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HomeMy WebLinkAboutRP/PLC Blue Canvas, LLC, Christopher Homes, Pacific Shores - 2010-09-20 This Document was electronically recorded by City of Huntington Beach Recorded in Official Records, Orange County RECORDING REQUESTED BY: ) Hugh Nguyen, Clerk-Recorder --- ) IIIIIIIIIIII IIIIIIII II IIII III IIII ���� IIINO FEE 2013000429411 04:23pm 07/17/13 AND WHEN RECORDED MAIL TO:) 105 401 Al2 28 -•0.00 0.00 0.00 0.00 81.00 0.00 0.00 0.00 City Clerk ) City of Huntington Beach ) 2000 Main Street ) Huntington Beach, CA 92648 ) (Space Above for Recorder's Use) AGREEMENT DECLARING CONDITIONS, COVENANTS AND RESTRICTIONS FOR PROPERTY (RESALE RESTRICTIONS) This Agreement Declaring Conditions, Covenants and Restrictions for Property (the "Agreement") is made as of�LC. e Al , 2013, by and between RP/PLC BLUE CANVAS, L.L.C., a Delaware limited liability company (the "Covenantor"), and THE CITY OF HUNTINGTON BEACH, a California municipal corporation (the "City"), and the HOUSING AUTHORITY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic (the "Authority"). Collectively, the City and Authority will be referred to as the "Covenantee". RECITALS A. Covenantor is the owner of record of that certain real property located in the City of Huntington Beach, County of Orange, State of California legally described in the attached Exhibit "A". B. On September 2, 2008, the City Council approved Tract No. 16733, as per map recorded as Instrument No. 2008000531659 in Book 897, Pages 10 through 14 of Miscellaneous Maps, Records of Orange County, California ("Project"). City imposed conditions of approval on the Project, requiring Covenantor to submit an Affordable Housing Agreement, in accordance with the Affordable Housing Program, for review by the Planning Department and approval by the City Attorney and acceptance by the City Council. The City further required that the plan shall provide ten percent (10%) of the total 201 units equaling 21 units to be restricted as set forth herein ("Restricted Units"), 3 of which are to be affordable housing for household earning less than 80% of the Orange County Median Income and 18 of which are to be affordable housing for households earning no more than 100% of the Orange County Median Income, in both cases for a period of sixty (60) years. The execution and recordation of this Agreement is intended to fully satisfy that condition. NOW, THEREFORE, the parties hereto agree and covenant as follows: 1. Affordability Covenants. Covenantor agrees for itself and its successor and assigns, and every successor to Covenantor's interest in the Restricted Unit, or any part thereof, that the Project located at Newland Street and Noelle Drive, which consists of a total of 201 13-3807/98445 t 18 wlely for the official 1Wanws of the City of Huntington so conilemplailed under Gavownent Coda Sec.6103 and be recovdad fm of charges residential condominium units, shall be designated as affordable and shall be held subject to this Agreement for sixty (60) years from the date of the close of escrow for the initial sale of each such Restricted Unit built in Tract No. 16733 as follows: (a) Eighteen (18) Restricted Units as further designated on Exhibit "B" attached hereto shall only be owned and occupied by "Median-Income Households", which shall mean persons or families earning not more than 100% of the Orange County median income, adjusted for household size appropriate for the property as determined by the Agency based on statistics published by the United States Department of Housing & Urban Development or established by the State of California, pursuant to Health and Safety Code Section 50093, or a successor statute. (b) These eighteen (18) Medium-Income Restricted Units shall only be sold at an "Affordable Housing Cost"to "Median-Income Households." (c) Three (3) Restricted Units as further designated on Exhibit "B" attached hereto shall only be owned and occupied by"Low-Income Households", which shall mean persons or families earning less than 80% of the Orange County median income, adjusted for household size appropriate for the property as determined by the Agency based on statistics published by the United States Department of Housing & Urban Development or established by the State of California, pursuant to Health and Safety Code Section 50093, or a successor statute. (d) These three (3) Low-Income Restricted Units shall only be sold at an "Affordable Housing Cost" to "Low-income Households." (e) "Affordable Housing Cost" shall mean the permitted gross sales price of the Restricted Unit as set forth in the Affordable Housing Price/Income Guidelines or successor guidelines published, from time to time, by the City for such purpose. (f) The term of this Agreement shall commence on the date of the initial sale of each Restricted Unit to a qualifying purchaser as evidenced by a deed recorded with the Orange County Recorder's Office and shall continue for sixty years from said date ("Affordability Period"). The covenant contained in this Section 1 shall run with the Restricted Unit and shall automatically terminate and be of no further force or effect upon the expiration of the Affordability Period. (g) Purchasers of the Restricted Units identified above shall enter into a promissory note and deed of trust in the forms attached hereto as Exhibit "C". 2. Transfer of Restricted Unit; Consent of Agency. During the Affordability Period no transfer of a Restricted Unit shall occur until the City determines: (a) that the proposed purchaser intends to occupy the Restricted Unit as the proposed purchaser's principal residence, (b) that the proposed purchaser is a "Low", or "Median" Income Household as provided in Section 1 above, and 13-3807/98445 2 (c) that the proposed transfer occurs at an Affordable Housing Cost. (d) The Restricted Units shall be constructed prior to or concurrent with the primary Project. (e) In the event that the Covenantor (including successors and assigns) desires to sell the Restricted Unit, Covenantor shall send written notice thereof to the City at the following address: City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attention: Director of Economic Development Within seven (7) days of receiving such notice, the City shall send Covenantor transfer application forms prepared by the City. Such forms shall contain a certification of the proposed purchaser's intent with respect to his/her/its residency of the Restricted Unit and his/her/its gross income, and an affidavit of the proposed purchaser disclosing and certifying the amount of the proposed purchase price. The City shall not be obligated to approve a transfer unless and until the proposed purchaser has submitted to the City such information and completed such forms. In the interest of expediting the close of escrow for such proposed transactions, the City shall reasonably approve or disapprove such submissions as soon as practicable after submission of such forms, and in no event later than fourteen (14) days after submission of a completed form. Prior to conveyance of the Restricted Unit, each approved purchaser shall also submit to the City an executed disclosure statement which certifies that the purchaser is aware that: (i) the purchaser buying the Restricted Unit may only sell the Restricted Unit at an Affordable Housing cost to a "Low" or "Median" Income Household as provided in Section 1 above, (ii) the maximum permitted sales price may be less than fair market value and (iii) the Restricted Unit must be owner-occupied at all times and cannot be rented or leased. The approved purchaser shall also submit an executed promissory, trust deed, notice documents, and any other documentation required by the City to effectuate the Affordable Housing Program. Covenantor shall cooperate with the City in providing such forms to proposed purchasers and in assisting proposed purchasers to prepare such forms and to provide any required information to the City in connection with only the Covenantor's sale of the Restricted Unit, provided that the Covenantor shall not be obligated to incur any out-of-pocket costs in connection therewith, other than employee time dedicated to providing such assistance. THE COVENANTOR AND EACH SUCCESSOR, HEIR, OR ASSIGN OR COVENANTOR UNDERSTAND THAT THE DETERMINATION OF THE AFFORDABLE HOUSING COST CAN BE MADE ONLY AT THE TIME OF THE PROPOSED TRANSFER, TAKING INTO CONSIDERATION INTEREST RATES, THE TERMS OF SALE OFFERED TO, AND THE ECONOMIC CIRCUMSTANCES OF, THE PROPOSED PURCHASER AND OTHER FACTORS THAT CANNOT BE ACCURATELY PREDICTED, AND THAT THE TRANSFER PRICE PERMITTED HEREUNDER MAY BE LESS THAN THE FAIR MARKET VALUE OF THE PROPERTY AND MAY NOT INCREASE OR DECREASE IN THE SAME MANNER AS OTHER SIMILAR REAL PROPERTY 13-3807/98445 3 WHICH IS NOT ENCUMBERED BY THIS RESTRICTION. COVENANTOR AND EACH SUCCESSOR, HEIR, OR ASSIGN OF COVENANTOR FURTHER ACKNOWLEDGES THAT AT ALL TIMES IN SETTING THE TRANSFER - - - PRICE, THE PRIMARY OBJECTIVE OF THE CITY AND THIS AGREEMENT IS TO PROVIDE HOUSING TO "LOW" OR "MEDIAN" INCOME HOUSEHOLDS AT AN AFFORDABLE HOUSING COST. D�y Covenantor's Initials Covenantor shall include in the escrow instructions and Purchase and Sale Agreements with purchaser a provision which requires each purchaser to record a covenant which will run with the land and bind all successors-in-interest or assignees that will ensure that all subsequent purchasers and occupants qualify as "Low" or "Median" Income Households as applicable. Said covenant shall remain in full force and effect for the Affordability Period as set forth in Section 1. 3. Non-Discrimination Covenants. Covenantor covenants by and for itself, it successors and assigns, and all persons claiming under or though them that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, religion, sex, sexual orientation, creed, ancestry, national or ethnic origin, age, family or marital status, handicap or disability, in the sale, transfer, use, occupancy, tenure or enjoyment of the Restricted Unit, nor shall Covenantor itself or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, subtenants, or vendees in the Restricted Unit. Covenantor and its successors and assigns shall refrain from restricting the sale of the Restricted Unit on the basis of race, color, religion, sex, sexual orientation, creed, ancestry, national or ethnic origin, age, family or marital status, handicap or disability, of any person. All such deeds or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clause: (a) In deeds: "The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, religion, sex, sexual orientation, creed, ancestry, national or ethnic origin, age, family or marital status, handicap or disability, in the sale, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee himself or herself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, or vendees in the land herein conveyed. The foregoing covenants shall run with the land." (b) In contracts: "There shall be no discrimination against or segregation of, any person or group of persons on account of race, color, religion, sex, sexual orientation, creed, ancestry, national or ethnic origin, age, family or marital status, handicap or disability, in the sale, transfer, use, occupancy, tenure or enjoyment of the premises, nor shall the transferor himself or herself of any person claiming under or though him or her, establish or 13-3807/98445 4 permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use of occupancy of tenants, subtenants or vendee of the premises." (c) In leases: "The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators, and assignees, and all persons claiming under or though him or her, and this lease is made and accepted upon and subject to the following conditions: "That there shall be no discrimination against or segregation of any person or group of persons on account of race, color, religion, sex, sexual orientation, creed, ancestry, national or ethnic origin, age, family or marital status, handicap or disability, in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the premises herein leased nor shall the lessee himself or herself, or any person claiming under or though him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy of tenants, sublessees, subtenants, or vendees in the premises herein leased." 4. Covenants Do Not Impair Lien. No violation or breach of covenants, conditions, restrictions, provisions or limitations contained in this Agreement shall defeat or render invalid or in any way impair the lien or charge of any mortgage or deed of trust or security interest. 5. Covenants For Benefit of City. All covenants without regard to technical classification or designation shall be binding for the benefit of the Covenantee and such covenants shall run in favor of Covenantee for the entire period during which time such covenants shall be in force and effect, without regard to whether the Covenantee is or remains an owner of any land or interest therein to which such covenants relate. The Covenantee, in the event of any breach of any such covenants, shall have the right to exercise all the rights and remedies and to maintain any such action at law or suits in equity or other proper legal proceedings to enforce and to cure such breach to which it or any other beneficiaries of these covenants may be entitled during the term specified for such covenants, except the covenants against discrimination which may be enforced at law or in equity at any time in perpetuity. 6. Counterparts. This Agreement may be executed in a number of counterparts, each of which shall be an original, but all of which shall constitute one and the same document. 13-3807/98445 5 7. Applicable Law. (a) If any provision of this Agreement or portion thereof, or the application of any provision to any person or circumstances, shall to any extent be held invalid, inoperative, or unenforceable, the remainder of this Agreement, or the application of such provision or portion thereof to any other persons or circumstances, shall not be affected thereby and it shall not be deeded that any such invalid provision affects the consideration for this Agreement; and each provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law. (b) This Agreement shall be construed in accordance with the laws of the State of California. [Balance of this page intentionally left blank] 13-3807/98445 6 IN WITNESS WHEREOF, the Covenantee and Covenantor have caused this instrument to be executed on their behalf by their respective officers hereunto duly authorized as of the date set forth above. - —-- - COVENANTOR: COVENANTEE: RP/PLC BLUE CANVAS, L.L.C., CITY OF HUNTINGTON BEACH a Delaware limited liability company a California municipal corporation---- Mayor Its: f/le� P,aaSiy-�T— 'City Clerk HOUSING AUTHORITY OF THE CITY OF HUNTINGTON BEACH, a public bod corporate and politic By: Deputy Executive Director AP7At=tor ED AS TO FORM: ty ey /Agency Cou INITIA Ar P OVED: Plann" g Die o REV ND APPROVED: Crit r, istrator 13-3807198445 7 STATE OF CALIFORNIA ) ) ss. COUNTY OF ORANGE On �(l��f �� 2013, before me, g3 u' cl Notary Public, personally appeared who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/haf authorized capacity, and that by his/he4 signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. [SEAL] Signature PATRICIA ALEXIS HANSON Commission# 1888030 i Notary Public-California z Z '' Orange County My Comm.Expires May 2,2014 STATE OF CALIFORNIA ) ) ss. COUNTY OF ORANGE ) On , 2012, before me, Notary Public, personally appeared who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. [SEAL] Signature 13-3807/98445 8 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT CIVIL CODE§1189 c State of California ,� ,, , , County of � v C= On .�013 before me, �• L-- ES #4 Date Here Insert Nam and Ti e,&the Officer personally appeared t�9N"JI16- .l3�lj.A,) 4--rUl� ee 7_14,A)S64"' Name(s)of Signer(s) who proved to me on the basis of satisfactory, evidence to be the person s6 whose name&' are subscribed to the within instrument and acknowledged to me that they executed the same in /thee authorized capacity ies , and that by er- or signature& on the instrument the pers0 the entity upon behalf of which the persor s5 acted, executed the instrument. P. L. ESPARZA amycog.=AU94,20113f Commission# 185702, 1 certify under PENALTY OF PERJURY under the zNotary Public-California i Orange County > laws of the State of California that the foregoing + paragraph is true and correct. WITNESS my han and official seal. Signature: Place Notary Seal Above ® p�/�I Signature of N P l otary ic ®r�I®/tlPi 6 Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Document: Document Date: Number of Pages: Signer(s) Other Than Named Above: Capacity(ies) Claimed by Signer(s) Signer's Name: Signer's Name: ❑ Corporate Officer — Title(s): ❑Corporate Officer — Title(s): ❑ individual ❑ Individual ❑ Partner —❑Limited ❑General ❑Partner — ❑Limited ❑General ❑ Attorney in Fact ❑Attorney in Fact ❑ Trustee ❑Trustee ❑ Guardian or Conservator ❑Guardian or Conservator ❑ Other: ❑Other: Signer Is Representing: Signer Is Representing: 0 2012 National Notary Association •NationalNotary.org m 1-800-US NOTARY(1-800-876-6827) Item#5907 EXHIBIT "A" Legal Description of Restricted Units in Tract 16733 All that certain real property in the City of Huntington Beach, County of Orange, State of California, described as follows: Parcel 1: The "Median-Income Households" consisting of: Units 192 , and 201 , as shown on that certain Condominium Plan Pacific Shores - Phase 16 recorded on April 30, 2013, as Instrument No. 2013000258235 of Official Records of Orange County, California, covering Lot 7 of Tract No. 16733, as per the Map, lying within the boundaries of said Condominium Plan. 13-3807/98445 1 _ EXHIBIT "B" Designation of Median-Income and Low-Income Household Restricted Units Median-Income Household Restricted Units: Those Units more particularly described as Parcel 1 on Exhibit "A" to this Agreement. 13-3807198445 1 EXHIBIT "C" Promissory (Vote and Deed of Trust (See Attached) 13-3807/98445 1 OFFICIAL BUSINESS ) Document entitled to free recording per ) Government Code §§ 6103 and 27383 ) Recording Requested By: ) Housing Authority ) of the City of Huntington Beach ) 2000 Main Street ) Huntington Beach, California 92648 ) Attn: Economic Development ) Dept./Housing Division ) SPACE ABOVE THIS LINE FOR RECORDER'S USE PROMISSORY NOTE TO SECURE AFFORDABILITY RESTRICTIONS ON TRANSFER OF PROPERTY THIS PROMISSORY NOTE (the "Note") is dated this day of , 20_, between (collectively, "Promissor") and the Housing Authority of the City of Huntington Beach ("Authority") with reference to the following facts: A. This Promissory Note is made in reference to that property in the City of Huntington Beach, County of Orange, State of California, with the street address Huntington Beach, California 92648, and the Assessor's Parcel No. and the Condominium Plan Tract No. 16733, Phase 16, recorded on April 30, 2013 as Instrument No. 2013000258235 (the "Property"). B. An "Agreement Declaring Conditions, Covenants and Restrictions for Property" was recorded on 20_, as Instrument Number , in the Office of the County Recorder of the County of Orange, California (the "Resale Restrictions"). Among other things, the Resale Restrictions limit the price that the Property may be sold to an "Affordable Housing Cost"to "Moderate Income Households," as those terms are defined in the Resale Restrictions, and further defined in the current Affordable Housing Regulations of the City of Huntington Beach and the Authority Deed of Trust referred to below. C. Concurrently with executing this Note, Promissor has executed a Deed of Trust securing and modifying the Resale Restrictions (the "Authority of Deed of Trust"). D. Pursuant to the Resale Restrictions, the City has approved the sale of the Property to Promissor at an Affordable Housing Cost. To insure that any further sale, transfer or assignment of the Property occurs with the City's approval and at an Affordable Housing Cost, the City has required as a condition of the Promissor's purchase of the Property that Promissor execute this Note. 13-3807/98445 Page 1 of 4 AGREEMENT NOW, THEREFORE, the parties agree as follows: 1. Incorporation of Recitals. The recitals set forth above are incorporated by reference as though fully set forth herein. 2. Amount of the Note. The Amount of this Note is the "Transfer Price" of the Property, less the "Affordable Housing Cost." The Transfer Price shall be determined according to the circumstances that cause the Amount of the Note to become due pursuant to Section 3 of this Note. In the case of the sale of the Property without the City's consent, the Transfer Price shall be the market sales price. In the case of the financing or refinancing of the Property without the City's consent, the Transfer Price shall be the loan amount in excess of the last loan balance on the First Mortgage that the City previously approved. In all other cases, the Transfer Price shall be the fair market value of the Property as established by the Director of Economic Development of the City pursuant to an appraisal. The term "Affordable Housing Cost" shall be defined according to the current Affordable Housing Regulations as adopted by the City of Huntington Beach. Promissor promises to pay the Amount of this Note when due to the Housing Authority at 2000 Main Street, P.O. Box 190, Huntington Beach, California 92648, or at such other address as Authority may direct from time to time in writing. All sums hereunder shall be payable in lawful money of the United States of America and all sums shall be credited first to interest then due and the balance to principal. 3. Due on Sale, Transfer or Refinancing. Promissor agrees to notify the Authority not less than thirty (30) days prior to (i) the sale or transfer of the Property or (ii) any financing or refinancing of the Property. This Note shall be due and payable upon (i) such sale or transfer without the City's consent, (ii) the financing or refinancing of the Property without the City's consent, (iii) Promissor is no longer an occupant of the Property, or (iv) Promissor is in material default of any other obligation under the Resale Restrictions, or the Authority Deed of Trust. 4. Expiration of the Note Obligation. In the event Promissor does not sell or transfer the Property, does not fail to occupy the Property, does not refinance, or is not in material breach of any other provision of the Resale Restrictions or the Agency Deed of Trust before the Sixtieth anniversary of the date of this Note, Promissor shall have no obligation to pay the Note Amount to Authority upon later sale, transfer or refinancing of the Property. 5. Default. The entire unpaid Amount of this Note shall be due and payable in full in the event of a default. The following shall be deemed to be an event of default: a. Failure of Promissor to pay any real property taxes or insurance premiums on the Property as they become due; or b. Any material breach of the Resale Restrictions or the Authority Deed of Trust, following the Authority giving notice of the breach and an opportunity to cure; or 13-3807/98"5 Page 2 of 4 C. Failure of Promissor to pay the Note Amount when due. 6. This Note is secured by a Deed of Trust, dated , to the City of Huntington Beach, as Trustee, executed by Promissor in favor of the Authority. 7. Notice. All payments, notices, consents, waivers and other communications under this Agreement must be in writing and shall be deemed to have been given when (a) delivered by hand, or, (b) when received by the addressee, if sent by a nationally recognized overnight delivery service (receipt requested), in each case addressed as set forth below: If to PROMISSOR: If to AGENCY: Housing Authority of the City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attention: City Clerk and, Economic Development Director City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 8. Governing Law. This Agreement is governed by and shall be construed in accordance with the laws of the State of California without giving effect to the conflict of laws principles thereof. The parties agree to personal jurisdiction in the State Courts in Orange County, California and specifically waive any claims of forum non conviens. 9. Modification. This Agreement shall not be amended or modified, except in writing, signed by both parties. 10. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the successors and assigns under this Note. This Note shall not be assigned without the express written consent of Agency. Dated: 20 By: HOUSING AUTHORITY OF THE CITY OF HUNTINGTON BEACH Dated: 20 By: Deputy Executive Director 13-3807/98445 Page 3 of 4 APPROVED AS TO FORM OFFICE OF HUNTINGTON BEACH CITY ATTORNEY Dated: 20 By: Jennifer McGrath, City Attorney 1 3-3 8 0 719 844 5 Page 4 of 4 OFFICIAL BUSINESS ) Document entitled to free recording per Government ) Code Sections 6103 and 27383 ) Recording Requested By: ) Housing Authority of the City of Huntington Beach ) 2000 Main Street ) Huntington Beach, California 92648 ) Attn: Economic Development Dept./Housing Division ) SPACE ABOVE THIS LINE FOR RECORDER'S USE DEED OF TRUST WITH ASSIGNMENTS OF RENTS TO SECURE AFFORDABILITY RESTRICTIONS ON TRANSFER OF PROPERTY THIS DEED OF TRUST is made this day of 20_, by and between whose address is Huntington Beach, California 92648 (collectively, the "Trustor") and the CITY OF HUNTINGTON BEACH, a municipal corporation (the "Trustee"), and the HOUSING AUTHORITY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic (the "Beneficiary"), whose address is 2000 Main Street, Huntington Beach, California 92648, with reference to the following facts: A. This Deed of Trust is made in reference to that property in the City of Huntington Beach, County of Orange, State of California, described legally in the Legal Description attached hereto as Exhibit "A" and incorporated herein with the street address , Huntington Beach, California 92648 and the Assessor's Parcel No. and the Plan Tract No. 16733, Phase 16, recorded on April 30, 2013 as Instrument No. 2013000258235 (the "Property"). B. An "Agreement Declaring Conditions, Covenants and Restrictions for Property" was recorded on , 20_, as Instrument Number , in the Office of the County Recorder of the County of Orange, California (the "Resale Restrictions"). Among other things, the Resale Restrictions limit the price that the Property may be sold to an "Affordable Housing Cost"to "Moderate Income Households," as those terms are defined in the Resale Restrictions, and further defined in the current affordable housing regulations of the City of Huntington Beach and this Deed of Trust. C. Pursuant to this Deed of Trust. the Resale Restrictions as applied to the Property-,, are extended to expire sixty (60) years from the date this Deed of Trust is recorded (the "Expiration Date"), which date is approximately 20_ NOW, THEREFORE, TRUSTOR HEREBY irrevocably grants, transfers and assigns, to Trustee, in trust, with power of sale of the Property, together with (a) all buildings, improvements 13-3807/98445 Page 1 of 12 and fixtures, now or hereafter placed thereon, it being understood and agreed that all classes of property attached or unattached used in connection herewith shall be deemed fixtures, (b) rents, issues and profits thereof, (c) any water rights and/or stock are appurtenant or pertain to said land, and (d) all sums of money payable on the purchase price of the Property secured by a lien thereon or payable under any agreement for the sale thereof, SUBJECT, HOWEVER, to the right, power and authority hereinafter given to and conferred upon Beneficiary to collect and apply such rents, issues and profits, and all sums of money payable on the purchase price of the Property secured by a lien thereon or payable under any agreement. A. FOR THE PURPOSE OF SECURING: 1. Payment of the indebtedness evidenced by a promissory note executed by Trustor on 20_ (the "Note"). The Amount of the indebtedness is the "Transfer Price" of the Property, less the "Affordable Housing Cost." The calculation of the Amount of the indebtedness is set forth with specificity in the Note, which is on file with the Economic Development Department of the City of Huntington Beach. 2. Performance of each and every obligation, covenant, promise and agreement of the Resale Restrictions, as amended by this Deed of Trust. B. TO PROTECT THE SECURITY OF THIS DEED OF TRUST, TRUSTOR AGREES: 1. Trustor agrees for itself, and its successors and assigns, and every successor to Trustor's interest in the Property, or any part thereof that for sixty (60) years from the date this Deed of Trust is recorded (the "Expiration Date"), to perform all obligations due under the Resale Restrictions, as those obligations are restated and modified as set forth below: (a) The Property shall only be owned and occupied by persons or families of "Median-Income." "Median-Income" shall mean persons or families earning one hundred percent (100%) or less of Orange County median income, adjusted for appropriate family size. (b) The Property may only be sold at an "Affordable Housing Cost" to households of"Median-Income," as those terms are defined in current Affordable Housing Regulations as adopted by the City of Huntington Beach. Generally, those Regulations define Affordable Housing Cost to mean that purchase price which would result in monthly housing payments which do not exceed Thirty-Five Percent (35%) of One Hundred Percent (100%) of the current Orange County monthly median income for a household equal to the number of bedrooms in the unit plus one (1) person. In determining monthly housing payments, the City will assume principal and interest payments on a conventional home mortgage after paying a ten percent (10%) down payment. The mortgage interest rate will be the prevailing Fannie Mae thirty (30) year mortgage rate, or a City-selected equivalent. Monthly housing costs will also include homeowner's association dues, utilities, homeowner's insurance, maintenance costs and property taxes. (c) The Trustor shall further comply with the Affordable Housing Guidelines promulgated by the City for purposes of administering the Affordable Housing Program of the City of Huntington Beach. 13-3807/98445 Page 2 of 12 (d) No transfer of the Property shall occur until the City of Huntington Beach determines (a) that the proposed purchaser intends to occupy the Property as the proposed purchaser's principal residence, (b) that the proposed purchaser is a person or family of Median Income, (c) that the proposed transfer occurs at an Affordable Housing Cost. The City of Huntington Beach shall not be obligated to approve a transfer until and unless the proposed purchaser has submitted to the City of Huntington Beach such information and completed such forms as the City of Huntington Beach shall request to certify the proposed purchaser's intent with respect to its residency of the Property and its gross income, and the proposed purchaser has submitted an affidavit disclosing and certifying the amount of the proposed purchase price. Prior to conveyance of the Property, each approved purchaser shall submit to the City of Huntington Beach an executed disclosure statement which certifies that the purchaser is aware that the purchaser may only sell the unit at an Affordable Housing Cost to a Median Income person or family, that the maximum permitted sales price may be less than fair market value and that the unit must be owner-occupied at all times and cannot be rented or leased. TRUSTOR AND EACH SUCCESSOR, HEIR OR ASSIGN OF TRUSTOR UNDERSTANDS THAT THE DETERMINATION OF THE AFFORDABLE HOUSING COST CAN BE MADE ONLY AT THE TIME OF THE PROPOSED TRANSFER, TAKING INTO CONSIDERATION INTEREST RATES, THE TERMS OF SALE OFFERED TO AND THE ECONOMIC CIRCUMSTANCES OF THE PROPOSED PURCHASER AND OTHER FACTORS THAT CANNOT BE ACCURATELY PREDICTED, AND THAT THE TRANSFER PRICE PERMITTED HEREUNDER MAY BE LESS THAN THE FAIR MARKET VALUE OF THE PROPERTY AND MAY NOT INCREASE OR DECREASE IN THE SAME MANNER AS OTHER SIMILAR REAL PROPERTY WHICH IS NOT ENCUMBERED BY THIS RESTRICTION. TRUSTOR AND EACH SUCCESSOR, HEIR OR ASSIGN OF TRUSTOR FURTHER ACKNOWLEDGES THAT AT ALL TIMES IN SETTING THE TRANSFER PRICE THE PRIMARY OBJECTIVE OF THE BENEFICIARY AND THIS DEED OF TRUST IS TO PROVIDE HOUSING TO ELIGIBLE PERSONS OR FAMILIES AT AN AFFORDABLE HOUSING COST. Trustor Initials Trustor Initials (e) The City of Huntington Beach may impose any conditions on the approval of any transfer of the Property as it determines are reasonably necessary for the effective administration of its Affordable Housing Program. (f) The Covenants contained in this Section 1 shall run with the land and shall automatically terminate and be of no further force or effect sixty (60) years from the date this Deed of Trust is recorded, which date is approximately 13-3807/98445 Page 3 of 12 2. Trustor covenants by and for itself, its successors and assigns, and all persons claiming under or through them that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the said property, nor shall Trustor itself or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in said property. Trustor and its successors and assigns, shall refrain from restricting the rental or lease (if permitted by Trustor) or sale of said property on the basis of race, color, religion, sex, marital status, national origin or ancestry of any person. All such deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: (a) In deeds: 'The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee himself or herself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessee or vendees in the land herein conveyed. The foregoing covenants shall run with the land." (b) In leases: 'The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through him or her,. and this lease is made and accepted upon and subject to the following conditions: "There shall be no discrimination against or segregation of any person or group of persons on account of race, color, religion, sex, marital status, ancestry or national origin in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the premises herein leased nor shall the lessee himself or herself, or any person claiming under to through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sublessees, subtenants or vendees in the premises herein leased." (c) In contracts: 'There shall be no discrimination against or segregation of, any person, or group of persons on account of race, color, religion, sex, marital status, ancestry or national origin, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the premises, nor shall the transferee himself or herself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessee or vendees of the premises." 13-3807198"5 Page 4 of 12 Nothing in this Section 2 shall be construed to authorize the rental or lease of the Property if such rental or lease is not otherwise permitted. The covenants in this paragraph shall run with the land in perpetuity. 3. No violation or breach of the covenants, conditions, restrictions, provisions or limitations contained in this Deed of Trust shall defeat or render invalid or in any way impair the lien or charge of any mortgage or deed of trust or security interest. 4. Trustor has made certain representations and disclosures as a requirement under the Resale Restrictions in order to induce Beneficiary to approve the sale of the Property to Trustor. In the event that Trustor has made any material misrepresentation or failed to disclose any material fact regarding said transaction, Beneficiary at its option and without notice, shall have the right to declare a material breach of the Resale Restrictions and the Note. Beneficiary may make a written declaration of default and demand for sale as in paragraph No. 6 herein set forth. Trustee, upon presentation to it of an affidavit signed by Beneficiary setting forth facts showing a default by Trustor under this paragraph, is authorized to accept as true and conclusive all facts and statements therein, and to act thereon hereunder. 5. All covenants without regard to technical classification or designation shall be binding for the benefit of the Beneficiary and such covenants shall run in favor of the Beneficiary for the entire period during which such covenants shall be in force and effect, without regard to whether the Beneficiary is or remains an owner of any land or interest therein to which such covenants relate. The Beneficiary, in the event of any breach of any such covenants, shall have the right to exercise all the rights and remedies and to maintain any action at law or suits in equity or other proper legal proceedings to enforce and to cure such breach to which it or any other beneficiaries of these covenants may be entitled during the term specified for such covenants, except the covenants against discrimination which may be enforced at law or in equity at any time in perpetuity. 6. Upon default by Trustor in the obligations of the Note, in the performance of any obligation under this Deed of Trust or under the terms of any First Lender's Deed of Trust which is or appears to be prior or superior to this Deed of Trust, Beneficiary may declare all sums secured by this Deed of Trust immediately due and payable by delivering to Trustee of a written declaration of default and demand for sale and a written notice of default and election to sell the Property. Default in the payment of any indebtedness secured by this Deed of Trust, in the obligation of the Note, or in the performance of any agreement under this Deed of Trust constitutes a default only under this Deed of Trust and the Note and does not constitute a default under the First Deed of Trust. Trustee shall cause the notice of default to be recorded. Beneficiary also shall deposit with Trustee this Deed of Trust, the Note, and all documents evidencing any additional expenditures secured by this Deed of Trust. After the lapse of such time as then may be required by law following recordation of such notice of default, and notice of sale having been given as then required by law, Trustee, without demand on Trustor, shall sell the Property at the time and place fixed by it in such notice of sale, whether as a whole or in separate parcels, and in such order as it may determine, at public auction to the highest bidder qualified under the Resale Restrictions and this Deed of Trust in lawful money of the United States, payable at time of sale. Trustee may postpone sale of all or any portion of the Property by 13-3807/98445 Page 5 of 12 public announcement at such time and place of sale, and from time to time thereafter may postpone such sale by public announcement at the time fixed by the preceding postponement. Trustee shall deliver to such purchaser its Deed conveying the Property so sold, but without any covenant or warranty, express or implied. The recital in such Deed of any matters of fact shall be conclusive of the truthfulness thereof. Any person, including Trustor, Trustee, or Beneficiary as hereinafter defined, may purchase at such sale. Trustee may also sell at any such sale and as part thereof any shares of corporate stock securing the obligations secured hereby, and Trustor waives demand and notice of such sale. (Beneficiary at its option may also foreclose on such shares by independent pledge sale, and Trustor waives demand and notice of such sale.) After deducting all costs, fees and expenses of Trustee, and of this Trust, including cost of evidence of title in connection with this sale, Trustee shall apply the proceeds of sale to payment, first; all sums expended under the teams hereof, not then repaid, with accrued interest at the rate then payable under the First Lender Deed of Trust secured hereby, and then of all other sums secured hereby, and, if there are any proceeds remaining, shall distribute them to the person or persons legally entitled thereto. 7. Trustor shall keep the Property in good condition and repair; to allow Beneficiary or its representatives to enter and inspect the Property at all reasonable times and access thereto, shall be permitted for that purpose; not to remove or demolish any building thereon; not to make alterations thereto without the consent of the Beneficiary; to suffer or permit no change in the general nature of the occupancy of the Property without Beneficiary's written consent; to complete or restore promptly and in good workmanlike manner any building which may be constructed, damaged or destroyed thereon, including, without restricting the generality of the foregoing, damage from termites and dry-rot; to pay when due all claims for labor performed and materials furnished in connection with the Property and not to permit any mechanic's lien against the Property; to comply with all laws affecting the Property or requiring any alterations or improvements to be made thereon; not to initiate or acquiesce in any zoning reclassification without Beneficiary's written consent; not to commit or permit waste thereon; not to commit, suffer or permit any act upon the Property in violation of the law; to paint, cultivate, irrigate, fertilize, fumigate, prune, and do all other acts that from the character or use of the Property may be reasonably necessary; and to promptly pay all amounts due others upon agreements of lease or conditional sale of all fixtures, furnishings and equipment located thereon. 8. Trustor shall provide, and maintain in force at all times with respect to the Property, fire and other types of insurance as may be required by Beneficiary. All of such insurance shall have a loss payable endorsement in favor of Beneficiary, shall be for a term and in form, content, amount and in such companies as may be satisfactory to Beneficiary, and the policies therefore shall be delivered to and remain in possession of Beneficiary as further security for the faithful performance of these trusts. At least thirty (30) days prior to the expiration of any such insurance policy, a policy or policies renewing or extending such expiring insurance shall be delivered to Beneficiary together with written evidence showing payment of the premium therefore and, in the event any such insurance policy and evidence of the payment of the premium therefore are not so delivered by Trustor to Beneficiary, Trustor by executing this Deed of Trust specifically requests Beneficiary to obtain such insurance and Beneficiary, without obligation to do so, without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof, may obtain such insurance through or from any 13-3807/98445 Page 6 of 12 insurance agency or company acceptable to it, pay the premium thereof, and may add the amount thereof to the indebtedness secured hereby, which amount shall bear a like rate of interest. Beneficiary may furnish to any insurance agency or company, or any other person, any information contained in or extracted from any insurance policy delivered to Beneficiary pursuant hereto and any information concerning the loan secured hereby. Neither Trustee nor Beneficiary shall be responsible for such insurance or for the collection of any insurance monies, or for any insolvency of any insurer or insurance underwriter. In case of insurance loss, Beneficiary is hereby authorized either (a) to settle and adjust any claim under the - insurance policies provided for in this document without the consent of the Trustor, or (b) to allow Trustor to agree with the insurance company or companies on the amount to be paid upon the loss. In either case, the Beneficiary is authorized to collect and make receipt of any such insurance money. If Trustor is obligated to restore or replace the damaged or destroyed buildings or improvements under the terms of any lease or leases which are or may be prior to the lien of this Deed of Trust and such damage or destruction does not result in cancellation or termination of such lease, such proceeds, after deducting therefrom any expenses incurred in the collection thereof, shall be used to reimburse the Trustor for the cost of rebuilding or restoring the buildings or improvements on said premises. In all other cases, such insurance proceeds shall either be applied for the cost of the rebuilding or restoring the buildings or improvements on said premises. Such buildings and improvements shall be so restored or rebuilt as to be of at least equal value and substantially the same character as prior to the damage or destruction, and shall be in a condition satisfactory to Beneficiary. Such application or release shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. Any and all unexpired insurance shall inure to the benefit of, and pass to the purchaser of, the property conveyed at any Trustee sale held hereunder. 9. Trustor shall pay: (a) at least ten (10) days before delinquency, all general and special City and County taxes, and all assessments on appurtenant water stock, affecting the Property, (b) when done, all special assessments for public improvements, without permitting any improvement bond to issue for any special assessment, (c) when done, all encumbrances, charges and liens, with interest, on the Property, or any part thereof, which are or appears to be prior to superior hereto, (d) if the security of this Deed of Trust is leasehold estate, to make any payment or do any act required of the Lessee or its successor in interest under the terms of the instrument or instruments creating said leasehold, (e) all costs, fees and expenses of this trust, (f) for any statement regarding the obligation secured hereby any amount demanded by Beneficiary not to exceed the maximum allowed by law thereof at the time when such request is made, (g) such other charges for services rendered by Beneficiary and furnished at Trustor's request or that of any successor in interest to Trustor as the Beneficiary may deem reasonable. 10. Should Trustor fail to make any payment or do any act as provided in this Deed of Trust, the Beneficiary or Trustee, but without obligation to do so and without noti ce to or demand upon Trustor and without releasing Trustor from any obligation hereof, may (a) make or do the same in such manner and to such extent as either may deem necessary to protect the security hereof, Beneficiary or Trustee being authorized to enter upon the Property for such purposes, (b) commence, appear in, or defend any action or proceeding purporting to affect the security hereof or the property covered by this Deed of Trust, or the rights or powers of Beneficiary or Trustee, (c) pay, purchase, contest or compromise any encumbrance, charge or lien, which in the judgment of either is or appears to be prior or superior hereto, and (d) in exercising any such 13-3807/98445 Page 7 of 12 powers, pay necessary expenses, employ counsel and pay his reasonable fees. Trustor agrees to repay any amount so expended on demand of Beneficiary, and any amount so expended may be added by Beneficiary to the indebtedness secured hereby and shall bear a like rate of interest. 11. Trustor shall appear in and defend any action or proceeding purporting to affect the security hereof or the Property which is covered by this Deed of Trust, or the rights or powers of Beneficiary or Trustee, and whether or not Trustor so appears or defends, to pay all costs and expenses, including cost of evidence of title and attorney's fees in a reasonable sum, in any such action or proceeding in which Beneficiary or Trustee may appear by virtue of being made a party defendant or otherwise irrespective of whether the interest of Beneficiary or Trustee in the Property is directly questioned by such action, including any action for the condemnation or partition of said premises, and in any suit brought by.Beneficiary to foreclose this Deed of Trust. 12. Trustor shall pay immediately and without demand, all sums expended under the terms of this Deed of Trust by Beneficiary or Trustee, with interest from the date of expenditure at the rate which the principal obligation secured hereby bears at the time such payment is made, and the repayment of such sums shall be secured hereby. 13. Should Trustor or any successor in interest to Trustor in the Property drill or extract, or enter into a lease for drilling or extraction of oil, gas or other hydrocarbon substances or any mineral of any kind or character, or sell, convey, further encumber, or alienate the Property, or any party thereof, or any interest therein, or be divested of his title or any interest therein in any manner or way, whether voluntarily or involuntarily, Beneficiary shall have the right, at its option, to declare any obligations secured hereby irrespective of the maturity date specified in any Note evidencing the same, immediately due and payable, and no waiver of this right shall be effective unless in writing. 14. Any award, settlement or damages for injury or damages to the Property, or in construction with the transaction financed by such loan, and any award of damages in connection with any condemnation for public use of or injury to the Property, or any part thereof, is hereby assigned and shall be paid to Beneficiary, who may apply or release such monies received by it in such manner and with the same effect as above provided for the disposition of proceeds of fire or other insurance. 15. By accepting payment of any sums secured by this Deed of Trust after its due date, or by making any payment, performing any act on behalf of Trustor, that Trustor was obligated hereunder, but failed, to make, or perform, or by adding any payment so made by Beneficiary to the indebtedness secured hereby, Beneficiary does not waive its right either to require prompt payment when due of all other sums so secured or to declare a default for failure so to pay. 16. At any time, or from time to time, without liability of the Beneficiary or Trustee thereof, and without notice, upon written request of Beneficiary and presentation of this Deed of Trust and the Note secured hereby for endorsement, and without affecting the personal liability of any person for payment of the indebtedness secured hereby, or the lien of the Deed of Trust upon the remainder of the Property for the full amount of the indebtedness then or thereafter secured hereby, or the rights or powers of Beneficiary or the Trustee with respect to the 13-3807/98"5 Page 8 of 12 remainder of the Property, Trustee may: (a) reconvey any part of the Property, (b) consent to the making of any map or plat thereof; (c)join in granting any easement thereon, (d)join in any agreement subordinating the lien or charge hereof. 17. The lien hereof shall remain in full force and effect during any postponement or extension of time of payment of the indebtedness secured hereby, or any part thereof. 18. As additional security, Trustor irrevocably assigns to Beneficiary the rents, issues, and profits of the Property for the purposes and upon the terms and conditions set forth below. This assignment shall not impose upon Beneficiary any duty to produce rents from the property affected by this Deed of Trust, or cause Authority to be (a) "mortgages in possession"for any purpose; (b) responsible for performing any of the obligations of the lessor under any lease; or (c) responsible for any waste committed by lessees or any other parties, for any dangerous or defective condition of the property affected by this Deed of Trust, or for any negligence in the management, upkeep, or control of such rights to rents, issues and profits is not contingent upon, and may be exercised without possession of, the property affected by this Deed of Trust. Beneficiary confers upon Trustor a license ("License") to collect and retain the rents, issues and profits of the property affected by this Deed of Trust as they become due and payable, until the occurrence of a default hereunder. Upon such default, the License shall be automatically revoked and Beneficiary may collect and retain the rents, issues and profits without notice and without taking possessions of the property affected by this Deed of Trust. This right to collect rents, issues and profits shall not grant to Beneficiary or Trustee the right to possession, except as otherwise provided herein; and neither said right, nor termination of the License, shall impose upon Beneficiary or Trustee the duty to produce rents, issues or profits or maintain all or any part of the Property affected by this Trust Deed. If Trustor shall default as aforesaid, Trustor's right to collect any such money shall cease and Beneficiary shall have the right, with or without taking possession of the property affected hereby, to collect all rents, issues, royalties and profits and shall be authorized to, and may, without notice and irrespective of whether declaration of default has been delivered to Trustee and without regard to the adequacy of the security for the indebtedness secured hereby, either personally or by attorney or agent without bringing any action or proceeding, or by receiver to be appointed by the Court, enter into possession and hold, occupy, possess and enjoy the Property, make, cancel, enforce and modify leases, obtain and eject tenants, and set and modify rents and terms of rents, and to sue, and to take, receive and collect all or any part of the said rents, issues, and profits of the property affected hereby, and after paying such costs of maintenance, operation of the Property, and of collection including reasonable attorneys' fees, as in its judgment it may deem proper, to apply the balance upon any indebtedness then secured hereby, the rents, issues, royalties and profits of the Property being hereby assigned to Beneficiary for said purposes. The acceptance of such rents, issues, royalties and profits shall not constitute a waiver of any other right which Trustee or Beneficiary may enjoy under this Deed of Trust or under the laws of California. Failure of or discontinuance by Beneficiary at any time, or from time to time, to collect any such rents, issues, royalties or profits shall not in any manner affect the subsequent enforcement by Beneficiary of the right, power and authority to collect the same. The receipt and application by said Beneficiary of all such rents, issues, royalties and profits pursuant hereto, after execution and delivery of declaration of default and demand for sale as hereinafter provided, or during the pendency of Trustee's sale 13-3807/98"5 Page 9 of 12 proceedings hereunder, shall not cure such breach or default nor affect sale proceedings, or any sale made pursuant thereto, but such rents, issues, royalties and profits, less all costs of operation, maintenance, collection and reasonable attorneys' fees, when received by Beneficiary, shall be applied in reduction of the indebtedness secured hereby, from time to time, in such order as Beneficiary may determine. Nothing contained herein, nor the exercise of the right by Beneficiary to collect, shall be, or be construed to be, an affirmation by Beneficiary of any tenancy, lease or option, nor an assumption of liability under, nor subordination of the lien or charge of this Deed of Trust to, any such tenancy, lease or option. 19. If the security of this Deed of Trust is a leasehold estate, the Trustor agrees that: (a) the term "Lease" as used herein shall mean the lease creating the "leasehold estate"' (b) Trustor shall not amend, change or modify his leasehold interest, or the Lease, or agree to do so, without the written consent of the Beneficiary; (c) Trustor will promptly advise Beneficiary regarding any notice, request or demand received by him from the lessor under the Lease and promptly furnish Beneficiary with a copy of any such notice, request or demand; (d) as long as any of the indebtedness secured hereby shall remain unpaid, unless the Beneficiary shall otherwise consent thereto in writing, the leasehold estate shall not merge with the fee title but shall always be kept separate and distinct, notwithstanding the union of said estates in any party; (e) Trustor agrees that it will promptly, strictly, and faithfully perform, fulfill, and comply with all covenants, agreements, terms, conditions and provisions under any lease affecting the premises and to neither do anything, nor to permit anything to be done which may cause modification or termination of any such lease or of the obligations of any lessee or person claiming through such lease or the rents provided for therein or the interest of the lessor or the Beneficiary therein or thereunder. Trustor further agrees he will not execute a Deed of Trust or mortgage which may be or become superior to any leasehold estate that is security for this Deed of Trust. In the event of a violation of any of the covenants set forth in this paragraph, Beneficiary shall have the right, at its option, to declare all sums secured hereby immediately due and payable. Consent to or waiver of one of said violations shall not be deemed to be a consent to or waiver of any other violation. If the security for this Deed of Trust is a leasehold estate, the term "property" as used in this Deed of Trust shall be deemed to mean the leasehold estate whenever the context so requires for the protection of the Beneficiary. 20. Trustor waives, to the fullest extent permissible by law, the right to plead any statute of limitations as a defense to any demand secured hereby. 21. Beneficiary may, from time to time, by instrument in writing, substitute a successor or successors to any Trustee named herein or acting hereunder, which instrument, executed and acknowledged by Beneficiary and recorded in the office of the recorder of the county or counties where the Property is situated, shall be conclusive proof of property substitution of such successor Trustee or Trustees, who shall, without conveyances from the Trustee predecessor, succeed to all its title, estate, rights, powers and duties, including but not limited to the power to reconvey the whole or any part of the property covered by this Deed of Trust. Such instrument must contain the name of the original Trustor, Trustee and Beneficiary hereunder, the book and page where this Deed of Trust is recorded. If notice of default shall have been recorded, this power of substitution cannot be exercised until after the costs, fees and expenses of the then acting Trustee shall have been paid to such Trustee, who shall endorse receipt thereof upon 13-3807/98445 Page 10 of 12 such instrument. The procedures herein provided for substitution of Trustee shall not be exclusive of other provisions for substitution provided by law. 22. This Deed of Trust applies to, inures to the benefit of, and binds all parties hereto, their heirs, legatees, devisees, administrators, executors, successors and assigns. The term "Beneficiary" shall mean the owner and holder, including pledgee, of the Note secured hereby, whether or not names as Beneficiary herein. In this Deed of Trust, whenever the context so requires, the masculine gender includes the feminine and/or neuter, and the singular number includes the plural. 23. That in the event of a demand for, and the preparation and delivery of a written statement regarding the obligations secured by this Deed of Trust pursuant to Sections 2943 and 2954 of the Civil Code of California, Beneficiary shall be entitled to make a reasonable charge, not exceeding the maximum amount which is permitted by law at the time the statement is furnished. Beneficiary may also charge Trustor a reasonable fee for any other services rendered to Trustor or rendered in Trustor's behalf in connection with the Property of this Deed of Trust, including changing Beneficiary's records, pertaining to this Deed of Trust in connection with the transfer of the Property, or releasing an existing policy of fire insurance or other casualty insurance held by Beneficiary and replacing the same with another such policy. 24. Trustee accepts this Trust when this Deed of Trust, duly executed and acknowledged, is made a public record as provided by law. Trustee is not obligated to notify any party hereto of pending sale under any other Deed of Trust or of any action or proceeding in which Trustor, Beneficiary, or Trustee shall be a party unless brought by Trustee. 25. Any notice which any party hereto may desire or be required to give to the other party shall be in writing. The mailing thereof must be certified mail addressed to the Trustor at his address hereinabove set forth or to the Beneficiary at his office or at such other place as such parties hereto may designate in writing. [Balance of this page intentionally left blank] 13-3807/98445 Page 11 of 12 THE UNDERSIGNED TRUSTOR REQUESTS that a copy of any notice of default and of any notice of sale hereunder be mailed to him at his address hereinbefore set forth. TRUSTOR Dated: , 20 By: HOUSING AUTHORITY OF THE CITY OF HUNTINGTON BEACH Dated: , 20 BY: Deputy Executive Director CITY OF HUNTINGTON BEACH Dated: , 20 BY: Assistant City Manager APPROVED AS TO FORM OFFICE OF HUNTINGTON BEACH CITY ATTORNEY Dated: , 20 By. Jennifer McGrath, City Attorney 13-3807/98445 Page 12 of 12 This Document was electronically recorded by City of Huntington Beach Recorded in Official Records, Orange County RECORDING REQUESTED BY: Hugh Nguyen, Clerk-Recorder ___ _ ; II I I IIII II IIIII III 11111111111111111111111111111 IIIIINO FEE 2013000429410 04:22pm 07/17/13 AND WHEN RECORDED MAIL TO:) 105 401 Al2 44 0.00 0.00 0.00 0.00 129.00 0.00 0.00 0.00 City Clerk ) City of Huntington Beach-- ) 2000 Main Street ) Huntington Beach, CA 92648 ) (Space Above for Recorder's Use) AGREEMENT DECLARING CONDITIONS, COVENANTS AND RESTRICTIONS FOR PROPERTY (RESALE RESTRICTIONS) This Agreement Declaring Conditions, Covenants and Restrictions for Property (the "Agreement") is made as of�(,�,Ak—_- A3t , 2013, by and between RP/PLC BLUE CANVAS, L.L.C., a Delaware limited liability company (the "Covenantor"), and THE CITY OF HUNTINGTON BEACH, a California municipal corporation (the "City"), and the HOUSING AUTHORITY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic (the "Authority"). Collectively, the City and Authority will be referred to as the "Covenantee". RECITALS A. Covenantor is the owner of record of that certain real property located in the City of Huntington Beach, County of Orange, State of California legally described in the attached Exhibit "A". B. On September 2, 2008, the City Council approved Tract No. 16733, as per map recorded as Instrument No. 2008000531659 in Book 897, Pages 10 through 14 of Miscellaneous Maps, Records of Orange County, California ("Project"). City imposed conditions of approval on the Project, requiring Covenantor to submit an Affordable Housing Agreement, in accordance with the Affordable Housing Program, for review by the Planning Department and approval by the City Attorney and acceptance by the City Council. The City further required that the plan shall provide ten percent (10%) of the total 201 units equaling 21 units to be restricted as set forth herein ("Restricted Units"), 3 of which are to be affordable housing for household earning less than 80% of the Orange County Median Income and 18 of which are to be affordable housing for households earning no more than 100% of the Orange County Median Income, in both cases for a period of sixty (60) years. The execution and recordation of this Agreement is intended to fully satisfy that condition. NOW, THEREFORE, the parties hereto agree and covenant as follows: 1. Affordability Covenants. Covenantor agrees for itself and its successor and assigns, and every successor to Covenantor's interest in the Restricted Unit, or any part thereof, that the Project located at Newland Street and Noelle Drive, which consists of a total of 201 13-3807/98446 1 This document is for the offidd buokmm of the City of Hundnom as oonWmphftd under Government Code SeQ 6103 should ba recordW free of chm9a, residential condominium units, shall be designated as affordable and shall be held subject to this Agreement for sixty (60) years from the date of the close of escrow for the initial sale of each such Restricted Unit built in Tract No. 16733 as follows: (a) Eighteen (18) Restricted Units as further designated on Exhibit "B" attached hereto shall only be owned and occupied by "Median-Income Households", which shall mean persons or families earning not more than 100% of the Orange County median income, adjusted for household size appropriate for the property as determined by the Agency based on statistics published by the United States Department of Housing & Urban Development or established by the State of California, pursuant to Health and Safety Code Section 50093, or a successor statute. (b) These eighteen (18) Medium-Income Restricted Units shall only be sold at an "Affordable Housing Cost" to "Median-Income Households." (c) Three (3) Restricted Units as further designated on Exhibit "B" attached hereto shall only be owned and occupied by "Low-Income Households", which shall mean persons or families earning less than 80% of the Orange County median income, adjusted for household size appropriate for the property as determined by the Agency based on statistics published by the United States Department of Housing & Urban Development or established by the State of California, pursuant to Health and Safety Code Section 50093, or a successor statute. (d) These three (3) Low-Income Restricted Units shall only be sold at an "Affordable Housing Cost" to "Low-income Households." (e) "Affordable Housing Cost" shall mean the permitted gross sales price of the Restricted Unit as set forth in the Affordable Housing Price/Income Guidelines or successor guidelines published, from time to time, by the City for such purpose. (f) The term of this Agreement shall commence on the date of the initial sale of each Restricted Unit to a qualifying purchaser as evidenced by a deed recorded with the Orange County Recorder's Office and shall continue for sixty years from said date ("Affordability Period"). The covenant contained in this Section 1 shall run with the Restricted Unit and shall automatically terminate and be of no further force or effect upon the expiration of the Affordability Period. (g) Purchasers of the Restricted Units identified above shall enter into a promissory note and deed of trust in the forms attached hereto as Exhibit "C". 2. Transfer of Restricted Unit; Consent of Agency. During the Affordability Period no transfer of a Restricted Unit shall occur until the City determines: (a) that the proposed purchaser intends to occupy the Restricted Unit as the proposed purchaser's principal residence, (b) that the proposed purchaser is a "Low", or "Median" Income Household as provided in Section 1 above, and 13-3807/98446 2 (c) that the proposed transfer occurs at an Affordable Housing Cost. (d) The Restricted Units shall be constructed prior to or concurrent with the primary Project. (e) In the event that the Covenantor (including successors and assigns) desires to sell the Restricted Unit, Covenantor shall send written notice thereof to the City at the following address: City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attention: Director of Economic Development Within seven (7) days of receiving such notice, the City shall send Covenantor transfer application forms prepared by the City. Such forms shall contain a certification of the proposed purchaser's intent with respect to his/her/its residency of the Restricted Unit and his/her/its gross income, and an affidavit of the proposed purchaser disclosing and certifying the amount of the proposed purchase price. The City shall not be obligated to approve a transfer unless and until the proposed purchaser has submitted to the City such information and completed such forms. In the interest of expediting the close of escrow for such proposed transactions, the City shall reasonably approve or disapprove such submissions as soon as practicable after submission of such forms, and in no event later than fourteen (14) days after submission of a completed form. Prior to conveyance of the Restricted Unit, each approved purchaser shall also submit to the City an executed disclosure statement which certifies that the purchaser is aware that: (i) the purchaser buying the Restricted Unit may only sell the Restricted Unit at an Affordable Housing cost to a "Low" or "Median" Income Household as provided in Section 1 above, (ii) the maximum permitted sales price may be less than fair market value and (iii) the Restricted Unit must be owner-occupied at all times and cannot be rented or leased. The approved purchaser shall also submit an executed promissory, trust deed, notice documents, and any other documentation required by the City to effectuate the Affordable Housing Program. Covenantor shall cooperate with the City in providing such forms to proposed purchasers and in assisting proposed purchasers to prepare such forms and to provide any required information to the City in connection with only the Covenantor's sale of the Restricted Unit, provided that the Covenantor shall not be obligated to incur any out-of-pocket costs in connection therewith, other than employee time dedicated to providing such assistance. THE COVENANTOR AND EACH SUCCESSOR, HEIR, OR ASSIGN OR COVENANTOR UNDERSTAND THAT THE DETERMINATION OF THE AFFORDABLE HOUSING COST CAN BE MADE ONLY AT THE TIME OF THE PROPOSED TRANSFER, TAKING INTO CONSIDERATION INTEREST, RATES, THE TERMS OF SALE OFFERED TO, AND THE ECONOMIC CIRCUMSTANCES OF, THE PROPOSED PURCHASER AND OTHER FACTORS THAT CANNOT BE ACCURATELY PREDICTED, AND THAT THE TRANSFER PRICE PERMITTED HEREUNDER MAY BE LESS THAN THE FAIR MARKET VALUE OF THE PROPERTY AND MAY NOT INCREASE OR DECREASE IN THE SAME MANNER AS OTHER SIMILAR REAL PROPERTY 13-3807/98446 3 WHICH IS NOT ENCUMBERED BY THIS RESTRICTION. COVENANTOR AND EACH SUCCESSOR, HEIR, OR ASSIGN OF COVENANTOR FURTHER ACKNOWLEDGES THAT AT ALL TIMES IN SETTING THE TRANSFER - PRICE, THE PRIMARY OBJECTIVE OF THE CITY AND THIS AGREEMENT IS TO PROVIDE HOUSING TO "LOW" OR "MEDIAN" INCOME HOUSEHOLDS AT AN AFFORDABLE HOUSING COST. Covenantor's Initials Covenantor shall include in the escrow instructions and Purchase and Sale Agreements with purchaser a provision which requires each purchaser to record a covenant which will run with the land and bind all successors-in-interest or assignees that will ensure that all subsequent purchasers and occupants qualify as "Low" or "Median" Income Households as applicable. Said covenant shall remain in full force and effect for the Affordability Period as set forth in Section 1. 3. Non-Discrimination Covenants. Covenantor covenants by and for itself, it successors and assigns, and all persons claiming under or though them that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, religion, sex, sexual orientation, creed, ancestry, national or ethnic origin, age, family or marital status, handicap or disability, in the sale, transfer, use, occupancy, tenure or enjoyment of the Restricted Unit, nor shall Covenantor itself or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, subtenants, or vendees in the Restricted Unit. Covenantor and its successors and assigns shall refrain from restricting the sale of the Restricted Unit on the basis of race; color, religion, sex, sexual orientation, creed, ancestry, national or ethnic origin, age, family or marital status, handicap or disability, of any person. All such deeds or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clause: (a) In deeds: "The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, religion, sex, sexual orientation, creed, ancestry, national or ethnic origin, age, family or marital status, handicap or disability, in the sale, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee himself or herself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, or vendees in the land herein conveyed. The foregoing covenants shall run with the land." (b) In contracts: "There shall be no discrimination against or segregation of, any person or group of persons on account of race, color, religion, sex, sexual orientation, creed, ancestry, national or ethnic origin, age, family or marital status, handicap or disability, in the sale, transfer, use, occupancy, tenure or enjoyment of the premises, nor shall the transferor himself or herself of any person claiming under or though him or her, establish or 13-3807/98446 4 permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use of occupancy of tenants, subtenants or vendee of the premises." (c) In leases: "The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators, and assignees, and all persons claiming under or though him or her, and this lease is made and accepted upon and subject to the following conditions: "That there shall be no discrimination against or segregation of any person or group of persons on account of race, color, religion, sex, sexual orientation, creed, ancestry, national or ethnic origin, age, family or marital status, handicap or disability, in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the premises herein leased nor shall the lessee himself or herself, or any person claiming under or though him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy of tenants, sublessees, subtenants, or vendees in the premises herein leased." 4. Covenants Do Not Impair Lien. No violation or breach of covenants, conditions, restrictions, provisions or limitations contained in this Agreement shall defeat or render invalid or in any way impair the lien or charge of any mortgage or deed of trust or security interest. 5. Covenants For Benefit of City. All covenants without regard to technical classification or designation shall be binding for the benefit of the Covenantee and such covenants shall run in favor of Covenantee for the entire period during which time such covenants shall be in force and effect, without regard to whether the Covenantee is or remains an owner of any land or interest therein to which such covenants relate. The Covenantee, in the event of any breach of any such covenants, shall have the right to exercise all the rights and remedies and to maintain any such action at law or suits in equity or other proper legal proceedings to enforce and to cure such breach to which it or any other beneficiaries of these covenants may be entitled during the term specified for such covenants, except the covenants against discrimination which may be enforced at law or in equity at any time in perpetuity. 6. Counterparts. This Agreement may be executed in a number of counterparts, each of which shall be an original, but all of which shall constitute one and the same document. 13-3807/98446 5 7. Applicable Law. (a) If any provision of this Agreement or portion thereof, or the application of any provision to any person or circumstances, shall to any extent be held invalid, inoperative, or unenforceable, the remainder of this Agreement, or the application of such provision or portion thereof to any other persons or circumstances, shall not be affected thereby and it shall not be deeded that any such invalid provision affects the consideration for this Agreement; and each provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law. (b) This Agreement shall be construed in accordance with the laws of the State of California. [Balance of this page intentionally left blank] 13-3807/98446 6 IN WITNESS WHEREOF, the Covenantee and Covenantor have caused this instrument to be executed on their behalf by their respective officers hereunto duly authorized as of the date set forth above. - COVENANTOR: COVENANTEE: RP/PLC BLUE CANVAS, L.L.C., CITY OF HUNTINGTON BEACH a Delaware limited liability company a California municipal/ corporation-- � f By: � (� e (�.�lA a4 - Mayor Its: ✓lam" PRaS�A�1?-' P ' O City Clerk HOUSING AUTHORITY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic By: DeputyOxecutive Director I OVED AS TO FORM: y Attorn y /Agency Coun el INITIA E A D OVED: Planni g Dir c or REVI ND APPROVED: Cit A istrator 13-3807/98446 7 STATE OF CALIFORNIA ) ) ss. COUNTY OF ORANGE On �J(ljrl� �'� 2013, before me, C - �_ �✓-s�� Notary Public, personally appeared �✓ �I �� who proved to me on the basis of satisfactory evidence to be the person whose name is- subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her-authorized capacity, and that by his/kfer-signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. // [SEAL] Signature c ��� � A/ f '�'j PATRHANSON ICIA Commission# 1888030 Notary Public-California v Z "'A• orange County My Comm.Expires May 2,2014 STATE OF CALIFORNIA ) ) ss. COUNTY OF ORANGE ) On , 2013, before me, Notary Public, personally appeared who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. [SEAL] Signature 13-3807/98446 8 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT CIVIL CODE§1189 c State of California County of teA4oj(L"- OnO,�G[L�/6 before me, Date I Here Insert Name amfl Title of the Officer personally appeared nitlAJ/& �AlLla�sA �D�3i�1Ti4sy/SGr9G� Name(s)of Sign (s) who proved to me on the basis of satisfactory evidence to be the persoro whose namgg ' are subscribed to the within instrument and acknowledged to me that he executed the same in heir authorized capacity(@sP and that by hLsLhaeir signatureW on the instrument the persoro or the entity upon behalf of which the persoqjjg�hcted, executed the instrument. P. L.ESPARZA I certify under PENALTY OF PERJURY under the -rt, 7 Commission# 18570 2t laws of the State of California that the foregoing Z •"m Notary Public-California Z z Orange County a paragraph is true and correct. My Comm.Expires Aug 4,2013+ WITNESS my hand and official seal. Signature: 5 q. A - Place Notary Seal Above Signature of ary Public OPTIONAL Though the information below is not required by law,it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Document: Document Date: Number of Pages: Signer(s) Other Than Named Above: Capacity(ies) Claimed by Signer(s) Signer's Name: Signer's Name: ❑ Corporate Officer — Title(s): ❑Corporate Officer — Title(s): ❑ Individual ❑ Individual ❑ Partner — ❑Limited ❑General ❑ Partner — ❑Limited ❑General ❑ Attorney in Fact ❑Attorney in Fact ❑ Trustee ❑Trustee ❑ Guardian or Conservator ❑Guardian or Conservator ❑ Other: ❑Other: Signer Is Representing: Signer Is Representing: ©2012 National Notary Association •NationalNotary.org• 1-800-US NOTARY(1-800-876-6827) Item#5907 EXHIBIT "A" Legal Description of Restricted Units in Tract 16733 All that certain real property in the City of Huntington Beach, County of Orange, State of California, described as follows: Parcel 1- The "Median-Income Households" consisting of: Units 147, and 150, as shown on that certain Condominium Plan Pacific Shores- Phase 18 recorded on April 30, 2013, as Instrument No. 2013000258232 of Official Records of Orange County, California, covering portions of Lots 11 and 12 of Tract No. 16733, as per the Map, lying within the boundaries of said Condominium Plan. Parcel 2: The "Low-Income Households" consisting of: Unit 144, as shown on that certain Condominium Plan Pacific Shores - Phase 18 recorded on April 30, 2013, as Instrument No. 2013000258232 of Official Records of Orange County, California, covering portions of Lots 11 and 12 of Tract No. 16733, as per the Map, lying within the boundaries of said Condominium Plan. 13-3807/98446 1 EXHIBIT "B" Designation of Median-Income and Low-Income Household Restricted Units Median-Income Household Restricted Units: Those Units more particularly described as Parcel 1 on Exhibit "A" to this Agreement. Low-Income Household Restricted Units: Those Units more particularly described as Parcel 2 on Exhibit "A" to this Agreement. 13-3807/98446 1 EXHIBIT "C" Promissory Note and Deed of Trust (See Attached — Median and Low Income Documents) 13-3807/98446 1 OFFICIAL BUSINESS ) Document entitled to free recording per ) Government Code §§ 6103 and 27383 ) Recording Requested By: ) Housing Authority ) of the City of Huntington Beach ) 2000 Main Street ) Huntington Beach,California 92648 ) Attn: Economic Development ) Dept./Housing Division ) SPACE ABOVE THIS LINE FOR RECORDERS USE PROMISSORY NOTE TO SECURE AFFORDABILITY RESTRICTIONS ON TRANSFER OF PROPERTY (MEDIAN-INCOME) THIS PROMISSORY NOTE (the "Note") is dated this day of , 20 between (collectively, "Promissor") and the Housing Authority of the City of Huntington Beach ("Authority") with reference to the following facts: A. This Promissory Note is made in reference to that property in the City of Huntington Beach, County of Orange, State of California, with the street address Huntington Beach, California 92648, and the Assessor's Parcel No. and the Condominium Plan Tract No. 16733, Phase 18, recorded on April 30, 2013 as Instrument No. 2013000258232 (the "Property"). B. An "Agreement Declaring Conditions, Covenants and Restrictions for Property" was recorded on , 20_, as Instrument Number , in the Office of the County Recorder of the County of Orange, California (the "Resale Restrictions"). Among other things, the Resale Restrictions limit the price that the Property may be sold to an "Affordable Housing Cost"to "Moderate Income Households," as those terms are defined in the Resale Restrictions, and further defined in the current Affordable Housing Regulations of the City of Huntington Beach and the Authority Deed of Trust referred to below. C. Concurrently with executing this Note, Promissor has executed a Deed of Trust securing and modifying the Resale Restrictions (the "Authority of Deed of Trust"). D. Pursuant to the Resale Restrictions, the City has approved the sale of the Property to Promissor at an Affordable Housing Cost. To insure that any further sale, transfer or assignment of the Property occurs with the City's approval and at an Affordable Housing Cost, the City has required as a condition of the Promissor's purchase of the Property that Promissor execute this Note. 13-3807/98446 MEDIAN Page 1 of 4 AGREEMENT NOW, THEREFORE, the parties agree as follows: 1. Incorporation of Recitals. The recitals set forth above are incorporated by reference as though fully set forth herein. 2. Amount of the Note. The Amount of this Note is the "Transfer Price" of the Property, less the "Affordable Housing Cost." The Transfer Price shall be determined according to the circumstances that cause the Amount of the Note to become due pursuant to Section 3 of this Note. In the case of the sale of the Property without the City's consent, the Transfer Price shall be the market sales price. In the case of the financing or refinancing of the Property without the City's consent, the Transfer Price shall be the loan amount in excess of the last loan balance on the First Mortgage that the City previously approved. In all other cases, the Transfer Price shall be the fair market value of the Property as established by the Director of Economic Development of the City pursuant to an appraisal. The term "Affordable Housing Cost" shall be defined according to the current Affordable Housing Regulations as adopted by the City of Huntington Beach. Promissor promises to pay the Amount of this Note when due to the Housing Authority at 2000 Main Street, P.O. Box 190, Huntington Beach, California 92648, or at such other address as Authority may direct from time to time in writing. All sums hereunder shall be payable in lawful money of the United States of America and all sums shall be credited first to interest then due and the balance to principal. 3. Due on Sale, Transfer or Refinancing. Promissor agrees to notify the Authority not less than thirty (30) days prior to (i) the sale or transfer of the Property or (ii) any financing or refinancing of the Property. This Note shall be due and payable upon (i) such sale or transfer without the City's consent, (ii) the financing or refinancing of the Property without the City's consent, (iii) Promissor is no longer an occupant of the Property, or (iv) Promissor is in material default of any other obligation under the Resale Restrictions, or the Authority Deed of Trust. 4. Expiration of the Note Obligation. In the event Promissor does not sell or transfer the Property, does not fail to occupy the Property, does not refinance, or is not in material breach of any other provision of the Resale Restrictions or the Agency Deed of Trust before the Sixtieth anniversary of the date of this Note, Promissor shall have no obligation to pay the Note Amount to Authority upon later sale, transfer or refinancing of the Property. 5. Default. The entire unpaid Amount of this Note shall be due and payable in full in the event of a default. The following shall be deemed to be an event of default: a. Failure of Promissor to pay any real property taxes or insurance premiums on the Property as they become due; or 13-3807/98446 MEDIAN Page 2 of 4 b. Any material breach of the Resale Restrictions or the Authority Deed of Trust, following the Authority giving notice of the breach and an opportunity to cure; or C. Failure of Promissor to pay the Note Amount when due. 6. This Note is secured by a Deed of Trust, dated , to the City of Huntington Beach, as Trustee, executed by Promissor in favor of the Authority. 7. Notice. All payments, notices, consents, waivers and other communications under this Agreement must be in writing and shall be deemed to have been given when (a) delivered by hand, or, (b) when received by the addressee, if sent by a nationally recognized overnight delivery service (receipt requested), in each case addressed as set forth below: If to PROMISSOR: If to AGENCY: Housing Authority of the City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attention: City Clerk and, Economic Development Director City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 8. Governing Law. This Agreement is governed by and shall be construed in accordance with the laws of the State of California without giving effect to the conflict of laws principles thereof. The parties agree to personal jurisdiction in the State Courts in Orange County, California and specifically waive any claims of forum non conviens. 9. Modification. This Agreement shall not be amended or modified, except in writing, signed by both parties. 10. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the successors and assigns under this Note. This Note shall not be assigned without the express written consent of Agency. Dated: 20 By: 13-3807/98446 MEDIAN Page 3 of 4 HOUSING AUTHORITY OF THE CITY OF HUNTINGTON BEACH Dated: 120 By: Deputy Executive Director APPROVED AS TO FORM OFFICE OF HUNTINGTON BEACH CITY ATTORNEY Dated: 120 By: Jennifer McGrath, City Attorney 13-3807/98446 MEDIAN Page 4 of 4 OFFICIAL BUSINESS ) Document entitled to free recording per Government ) Code Sections 6103 and 27383 ) Recording Requested By: ) Housing Authority of the City of Huntington Beach ) 2000 Main Street ) Huntington Beach, California 92648 ) Attn: Economic Development Dept./Housing Division ) SPACE ABOVE THIS LINE FOR RECORDER'S USE DEED OF TRUST WITH ASSIGNMENTS OF RENTS TO SECURE AFFORDABILITY RESTRICTIONS ON TRANSFER OF PROPERTY (MEDIAN-INCOME) THIS DEED OF TRUST is made this day of 20_, by and between whose address is Huntington Beach, California 92648 (collectively, the "Trustor") and the CITY OF HUNTINGTON BEACH, a municipal corporation (the "Trustee"), and the HOUSING AUTHORITY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic (the "Beneficiary"), whose address is 2000 Main Street, Huntington Beach, California 92648, with reference to the following facts: A. This Deed of Trust is made in reference to that property in the City of Huntington Beach, County of Orange, State of California, described legally in the Legal Description attached hereto as Exhibit "A" and incorporated herein with the street address , Huntington Beach, California 92648 and the Assessor's Parcel No. , and the Plan Tract No. 16733, Phase 18, recorded on April 30, 2013 as Instrument No. 2013000258232 (the "Property"). B. An "Agreement Declaring Conditions, Covenants and Restrictions for Property" was recorded on , 20_, as Instrument Number , in the Office of the County Recorder of the County of Orange, California (the "Resale Restrictions"). Among other things, the Resale Restrictions limit the price that the Property may be sold to an "Affordable Housing Cost"to "Moderate Income Households," as those terms are defined in the Resale Restrictions, and further defined in the current affordable housing regulations of the City of Huntington Beach and this Deed of Trust. C. Pursuant to this Deed of Trust. the Resale Restrictions as applied to the Property are extended to expire sixty (60) years from the date this Deed of Trust is recorded (the "Expiration Date"), which date is approximately , 20_ 13-3807/98446 MEDIAN Page 1 of 12 NOW, THEREFORE, TRUSTOR HEREBY irrevocably grants, transfers and assigns, to Trustee, in trust, with power of sale of the Property, together with (a) all buildings, improvements and fixtures, now or hereafter placed thereon, it being understood and agreed that all classes of property attached or unattached used in connection herewith shall be deemed fixtures, (b) rents, issues and profits thereof, (c) any water rights and/or stock are appurtenant or pertain to said land, and (d) all sums of money payable on the purchase price of the Property secured by a lien thereon or payable under any agreement for the sale thereof, SUBJECT, HOWEVER, to the right, power and authority hereinafter given to and conferred upon Beneficiary to collect and apply such rents, issues and profits, and all sums of money payable on the purchase price of the Property secured by a lien thereon or payable under any agreement. A. FOR THE PURPOSE OF SECURING: 1. Payment of the indebtedness evidenced by a promissory note executed by Trustor on , 20_(the "Note"). The Amount of the indebtedness is the "Transfer Price" of the Property, less the "Affordable Housing Cost." The calculation of the Amount of the indebtedness is set forth with specificity in the Note, which is on file with the Economic Development Department of the City of Huntington Beach. 2. Performance of each and every obligation, covenant, promise and agreement of the Resale Restrictions, as amended by this Deed of Trust. B. TO PROTECT THE SECURITY OF THIS DEED OF TRUST, TRUSTOR AGREES: 1. Trustor agrees for itself, and its successors and assigns, and every successor to Trustor's interest in the Property, or any part thereof that for sixty (60) years from the date this Deed of Trust is recorded (the "Expiration Date"), to perform all obligations due under the Resale Restrictions, as those obligations are restated and modified as set forth below: (a) The Property shall only be owned and occupied by persons or families of "Median-Income." "Median-Income" shall mean persons or families earning one hundred percent (100%) or less of Orange County median income, adjusted for appropriate family size. (b) The Property may only be sold at an "Affordable Housing Cost"to households of"Median-Income," as those terms are defined in current Affordable Housing Regulations as adopted by the City of Huntington Beach. Generally, those Regulations define Affordable Housing Cost to mean that purchase price which would result in monthly housing payments which do not exceed Thirty-Five Percent (35%) of One Hundred Percent (100%) of the current Orange County monthly median income for a household equal to the number of bedrooms in the unit plus one (1) person. In determining monthly housing payments, the City will assume principal and interest payments on a conventional home mortgage after paying a ten percent (10%) down payment. The mortgage interest rate will be the prevailing Fannie Mae thirty (30) year mortgage rate, or a City-selected equivalent. Monthly housing costs will also include homeowner's association dues, utilities, homeowner's insurance, maintenance costs and property taxes. 13-3807/98446 MEDIAN Page 2 of 12 (c) The Trustor shall further comply with the Affordable Housing Guidelines promulgated by the City for purposes of administering the Affordable Housing Program of the City of Huntington Beach. (d) No transfer of the Property shall occur until the City of Huntington Beach determines (a) that the proposed purchaser intends to occupy the Property as the proposed purchaser's principal residence, (b) that the proposed purchaser is a person or family of Median Income, (c) that the proposed transfer occurs at an Affordable Housing Cost. The City of Huntington Beach shall not be obligated to approve a transfer until and unless the proposed purchaser has submitted to the City of Huntington Beach such information and completed such forms as the City of Huntington Beach shall request to certify the proposed purchaser's intent with respect to its residency of the Property and its gross income, and the proposed purchaser has submitted an affidavit disclosing and certifying the amount of the proposed purchase price. Prior to conveyance of the Property, each approved purchaser shall submit to the City of Huntington Beach an executed disclosure statement which certifies that the purchaser is aware that the purchaser may only sell the unit at an Affordable Housing Cost to a Median Income person or family, that the maximum permitted sales price may be less than fair market value and that the unit must be owner-occupied at all times and cannot be rented or leased. TRUSTOR AND EACH SUCCESSOR, HEIR OR ASSIGN OF TRUSTOR UNDERSTANDS THAT THE DETERMINATION OF THE AFFORDABLE HOUSING COST CAN BE MADE ONLY AT THE TIME OF THE PROPOSED TRANSFER, TAKING INTO CONSIDERATION INTEREST RATES, THE TERMS OF SALE OFFERED TO AND THE ECONOMIC CIRCUMSTANCES OF THE PROPOSED PURCHASER AND OTHER FACTORS THAT CANNOT BE ACCURATELY PREDICTED, AND THAT THE TRANSFER PRICE PERMITTED HEREUNDER MAY BE LESS THAN THE FAIR MARKET VALUE OF THE PROPERTY AND MAY NOT INCREASE OR DECREASE IN THE SAME MANNER AS OTHER SIMILAR REAL PROPERTY WHICH IS NOT ENCUMBERED BY THIS RESTRICTION. TRUSTOR AND EACH SUCCESSOR, HEIR OR ASSIGN OF TRUSTOR FURTHER ACKNOWLEDGES THAT AT ALL TIMES IN SETTING THE TRANSFER PRICE THE PRIMARY OBJECTIVE OF THE BENEFICIARY AND THIS DEED OF TRUST IS TO PROVIDE HOUSING TO ELIGIBLE PERSONS OR FAMILIES AT AN AFFORDABLE HOUSING COST. Trustor Initials Trustor Initials (e) The City of Huntington Beach may impose any conditions on the approval of any transfer of the Property as it determines are reasonably necessary for the effective administration of its Affordable Housing Program. 13-3807198446 MEDIAN Page 3of12 (f) The Covenants contained in this Section 1 shall run with the land and shall automatically terminate and be of no further force or effect sixty (60) years from the date this Deed of Trust is recorded, which date is approximately 2. Trustor covenants by and for itself, its successors and assigns, and all persons claiming under or through them that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, religion, sex, marital status,- national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the said property, nor shall Trustor itself or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in said property. Trustor and its successors and assigns, shall refrain from restricting the rental or lease (if permitted by Trustor) or sale of said property on the basis of race, color, religion, sex, marital status, national origin or ancestry of any person. All such deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: (a) In deeds: "The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee himself or herself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessee or vendees in the land herein conveyed. The foregoing covenants shall run with the land." (b) In leases: "The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through him or her,. and this lease is made and accepted upon and subject to the following conditions: "There shall be no discrimination against or segregation of any person or group of persons on account of race, color, religion, sex, marital status, ancestry or national origin in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the premises herein leased nor shall the lessee himself or herself, or any person claiming under to through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sublessees, subtenants or vendees in the premises herein leased." (c) In contracts: "There shall be no discrimination against or segregation of, any person, or group of persons on account of race, color, religion, sex, marital status, 13-3807/98446 MEDIAN Page 4 of 12 ancestry or national origin, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the premises, nor shall the transferee himself or herself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessee or vendees of the premises." Nothing in this Section 2 shall be construed to authorize the rental or lease of the Property if such rental or lease is not otherwise permitted. The covenants in this paragraph shall run with the land in perpetuity. 3. No violation or breach of the covenants, conditions, restrictions, provisions or limitations contained in this Deed of Trust shall defeat or render invalid or in any way impair the lien or charge of any mortgage or deed of trust or security interest. 4. Trustor has made certain representations and disclosures as a requirement under the Resale Restrictions in order to induce Beneficiary to approve the sale of the Property to Trustor. In the event that Trustor has made any material misrepresentation or failed to disclose any material fact regarding said transaction, Beneficiary at its option and without notice, shall have the right to declare a material breach of the Resale Restrictions and the Note. Beneficiary may make a written declaration of default and demand for sale as in paragraph No. 6 herein set forth. Trustee, upon presentation to it of an affidavit signed by Beneficiary setting forth facts showing a default by Trustor under this paragraph, is authorized to accept as true and conclusive all facts and statements therein, and to act thereon hereunder. 5. All covenants without regard to technical classification or designation shall be binding for the benefit of the Beneficiary and such covenants shall run in favor of the Beneficiary for the entire period during which such covenants shall be in force and effect, without regard to whether the Beneficiary is or remains an owner of any land or interest therein to which such covenants relate. The Beneficiary, in the event of any breach of any such covenants, shall have the right to exercise all the rights and remedies and to maintain any action at law or suits in equity or other proper legal proceedings to enforce and to cure such breach to which it or any other beneficiaries of these covenants may be entitled during the term specified for such covenants, except the covenants against discrimination which may be enforced at law or in equity at any time in perpetuity. 6. Upon default by Trustor in the obligations of the Note, in the performance of any obligation under this Deed of Trust or under the terms of any First Lender's Deed of Trust which is or appears to be prior or superior to this Deed of Trust, Beneficiary may declare all sums secured by this Deed of Trust immediately due and payable by delivering to Trustee of a written declaration of default and demand for sale and a written notice of default and election to sell the Property. Default in the payment of any indebtedness secured by this Deed of Trust, in the obligation of the Note, or in the performance of any agreement under this Deed of Trust constitutes a default only under this Deed of Trust and the Note and does not constitute a default under the First Deed of Trust. Trustee shall cause the notice of default to be recorded. Beneficiary also shall deposit with Trustee this Deed of Trust, the Note, and all documents evidencing any additional expenditures secured by this Deed of Trust. After the lapse of such 13-3807/98446 MEDIAN Page 5 of 12 time as then may be required by law following recordation of such notice of default, and notice of sale having been given as then required by law, Trustee, without demand on Trustor, shall sell the Property at the time and place fixed by it in such notice of sale, whether as a whole or in - separate parcels, and in such order as it may determine, at public auction to the highest bidder qualified under the Resale Restrictions and this Deed of Trust in lawful money of the United States, payable at time of sale. Trustee may postpone sale of all or any portion of the Property by public announcement at such time and place of sale, and from time to time thereafter may postpone such sale by public announcement at the time fixed by the preceding postponement. Trustee shall deliver to such purchaser its Deed conveying the Property so sold, but without any covenant or warranty, express or implied. The recital in such Deed of any matters of fact shall be conclusive of the truthfulness thereof. Any person, including Trustor, Trustee, or Beneficiary as hereinafter defined, may purchase at such sale. Trustee may also sell at any such sale and as part thereof any shares of corporate stock securing the obligations secured hereby, and Trustor waives demand and notice of such sale. (Beneficiary at its option may also foreclose on such shares by independent pledge sale, and Trustor waives demand and notice of such sale.) After deducting all costs, fees and expenses of Trustee, and of this Trust, including cost of evidence of title in connection with this sale, Trustee shall apply the proceeds of sale to payment, first; all sums expended under the teams hereof, not then repaid, with accrued interest at the rate then payable under the First Lender Deed of Trust secured hereby, and then of all other sums secured hereby, and, if there are any proceeds remaining, shall distribute them to the person or persons legally entitled thereto. 7. Trustor shall keep the Property in good condition and repair; to allow Beneficiary or its representatives to enter and inspect the Property at all reasonable times and access thereto, shall be permitted for that purpose; not to remove or demolish any building thereon; not to make alterations thereto without the consent of the Beneficiary; to suffer or permit no change in the general nature of the occupancy of the Property without Beneficiary's written consent; to complete or restore promptly and in good workmanlike manner any building which may be constructed, damaged or destroyed thereon, including, without restricting the generality of the foregoing, damage from termites and dry-rot; to pay when due all claims for labor performed and materials furnished in connection with the Property and not to permit any mechanic's lien against the Property, to comply with all laws affecting the Property or requiring any alterations or improvements to be made thereon; not to initiate or acquiesce in any zoning reclassification without Beneficiary's written consent; not to commit or permit waste thereon; not to commit, suffer or permit any act upon the Property in violation of the law; to paint, cultivate, irrigate, fertilize, fumigate, prune, and do all other acts that from the character or use of the Property may be reasonably necessary; and to promptly pay all amounts due others upon agreements of lease or conditional sale of all fixtures, furnishings and equipment located thereon. 8. Trustor shall provide, and maintain in force at all times with respect to the Property, fire and other types of insurance as may be required by Beneficiary. All of such insurance shall have a loss payable endorsement in favor of Beneficiary, shall be for a term and in form, content, amount and in such companies as may be satisfactory to Beneficiary, and the policies therefore shall be delivered to and remain in possession of Beneficiary as further security for the faithful performance of these trusts. At least thirty (30) days prior to the 13-3807/98446 MEDIAN Page 6 of 12 expiration of any such insurance policy, a policy or policies renewing or extending such expiring insurance shall be delivered to Beneficiary together with written evidence showing payment of the premium therefore and, in the event any such insurance policy and evidence of the payment of the premium therefore are not so delivered by Trustor to Beneficiary, Trustor by executing this Deed of Trust specifically requests Beneficiary to obtain such insurance and Beneficiary, without obligation to do so, without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof, may obtain such insurance through or from any insurance agency or company acceptable to it, pay the premium thereof, and may add the amount thereof to the indebtedness secured hereby, which amount shall bear a like rate of interest. Beneficiary may furnish to any insurance agency or company, or any other person, any information contained in or extracted from any insurance policy delivered to Beneficiary pursuant hereto and any information concerning the loan secured hereby. Neither Trustee nor Beneficiary shall be responsible for such insurance or for the collection of any insurance monies, or for any insolvency of any insurer or insurance underwriter. In case of insurance loss, Beneficiary is hereby authorized either (a) to settle and adjust any claim under the insurance policies provided for in this document without the consent of the Trustor, or (b) to allow Trustor to agree with the insurance company or companies on the amount to be paid upon the loss. In either case, the Beneficiary is authorized to collect and make receipt of any such insurance money. If Trustor is obligated to restore or replace the damaged or destroyed buildings or improvements under the terms of any lease or leases which are or may be prior to the lien of this Deed of Trust and such damage or destruction does not result in cancellation or termination of such lease, such proceeds, after deducting therefrom any expenses incurred in the collection thereof, shall be used to reimburse the Trustor for the cost of rebuilding or restoring the buildings or improvements on said premises. In all other cases, such insurance proceeds shall either be applied for the cost of the rebuilding or restoring the buildings or improvements on said premises. Such buildings and improvements shall be so restored or rebuilt as to be of at least equal value and substantially the same character as prior to the damage or destruction, and shall be in a condition satisfactory to Beneficiary. Such application or release shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. Any and all unexpired insurance shall inure to the benefit of, and pass to the purchaser of, the property conveyed at any Trustee sale held hereunder. 9. Trustor shall pay: (a) at least ten (10) days before delinquency, all general and special City and County taxes, and all assessments on appurtenant water stock, affecting the Property, (b) when done, all special assessments for public improvements, without permitting any improvement bond to issue for any special assessment, (c) when done, all encumbrances, charges and liens, with interest, on the Property, or any part thereof, which are or appears to be prior to superior hereto, (d) if the security of this Deed of Trust is leasehold estate, to make any payment or do any act required of the Lessee or its successor in interest under the terms of the instrument or instruments creating said leasehold, (e) all costs, fees and expenses of this trust, (f) for any statement regarding the obligation secured hereby any amount demanded by Beneficiary not to exceed the maximum allowed by law thereof at the time when such request is made, (g) such other charges for services rendered by Beneficiary and furnished at Trustor's request or that of any successor in interest to Trustor as the Beneficiary may deem reasonable. 13-3807/98446 MEDIAN Page 7 of 12 10. Should Trustor fail to make any payment or do any act as provided in this Deed of Trust, the Beneficiary or Trustee, but without obligation to do so and without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof, may (a) make or do the same in such manner and to such extent as either may deem necessary to protect the security hereof, Beneficiary or Trustee being authorized to enter upon the Property for such purposes, (b) commence, appear in, or defend any action or proceeding purporting to affect the security hereof or the property covered by this Deed of Trust, or the rights or powers of Beneficiary or Trustee, (c) pay, purchase, contest or compromise any encumbrance, charge or lien, which in the judgment of either is or appears to be prior or superior hereto, and (d) in exercising any such powers, pay necessary expenses, employ counsel and pay his reasonable fees. Trustor agrees to repay any amount so expended on demand of Beneficiary, and any amount so expended may be added by Beneficiary to the indebtedness secured hereby and shall bear a like rate of interest. 11. Trustor shall appear in and defend any action or proceeding purporting to affect the security hereof or the Property which is covered by this Deed of Trust, or the rights or powers of Beneficiary or Trustee, and whether or not Trustor so appears or defends, to pay all costs and expenses, including cost of evidence of title and attorney's fees in a reasonable sum, in any such action or proceeding in which Beneficiary or Trustee may appear by virtue of being made a party defendant or otherwise irrespective of whether the interest of Beneficiary or Trustee in the Property is directly questioned by such action, including any action for the condemnation or partition of said premises, and in any suit brought by Beneficiary to foreclose this Deed of Trust. 12. Trustor shall pay immediately and without demand, all sums expended under the terms of this Deed of Trust by Beneficiary or Trustee, with interest from the date of expenditure at the rate which the principal obligation secured hereby bears at the time such payment is made, and the repayment of such sums shall be secured hereby. 13. Should Trustor or any successor in interest to Trustor in the Property drill or extract, or enter into a lease for drilling or extraction of oil, gas or other hydrocarbon substances or any mineral of any kind or character, or sell, convey, further encumber, or alienate the Property, or any party thereof, or any interest therein, or be divested of his title or any interest therein in any manner or way, whether voluntarily or involuntarily, Beneficiary shall have the right, at its option, to declare any obligations secured hereby irrespective of the maturity date specified in any Note evidencing the same, immediately due and payable, and no waiver of this right shall be effective unless in writing. 14. Any award, settlement or damages for injury or damages to the Property, or in construction with the transaction financed by such loan, and any award of damages in connection with any condemnation for public use of or injury to the Property, or any part thereof, is hereby assigned and shall be paid to Beneficiary, who may apply or release such monies received by it in such manner and with the same effect as above provided for the disposition of proceeds of fire or other insurance. 15. By accepting payment of any sums secured by this Deed of Trust after its due date, or by making any payment, performing any act on behalf of Trustor, that Trustor was obligated hereunder, but failed, to make, or perform, or by adding any payment so made by 13-3807/98446 MEDIAN Page 8 of 12 Beneficiary to the indebtedness secured hereby, Beneficiary does not waive its right either to require prompt payment when due of all other sums so secured or to declare a default for failure so to pay. 16. At any time, or from time to time, without liability of the Beneficiary or Trustee thereof, and without notice, upon written request of Beneficiary and presentation of this Deed of Trust and the Note secured hereby for endorsement, and without affecting the personal liability of any person for payment of the indebtedness secured hereby, or the lien of the Deed of Trust upon the remainder of the Property for the full amount of the indebtedness then or thereafter secured hereby, or the rights or powers of Beneficiary or the Trustee with respect to the remainder of the Property, Trustee may: (a) reconvey any part of the Property, (b) consent to the making of any map or plat thereof; (c)join in granting any easement thereon, (d)join in any agreement subordinating the lien or charge hereof. 17. The lien hereof shall remain in full force and effect during any postponement or extension of time of payment of the indebtedness secured hereby, or any part thereof. 18. As additional security, Trustor irrevocably assigns to Beneficiary the rents, issues, and profits of the Property for the purposes and upon the terms and conditions set forth below. This assignment shall not impose upon Beneficiary any duty to produce rents from the property affected by this Deed of Trust, or cause Authority to be (a) "mortgages in possession" for any purpose; (b) responsible for performing any of the obligations of the lessor under any lease; or (c) responsible for any waste committed by lessees or any other parties, for any dangerous or defective condition of the property affected by this Deed of Trust, or for any negligence in the management, upkeep, or control of such rights to rents, issues and profits is not contingent upon, and may be exercised without possession of, the property affected by this Deed of Trust. Beneficiary confers upon Trustor a license ("License") to collect and retain the rents, issues and profits of the property affected by this Deed of Trust as they become due and payable, until the occurrence of a default hereunder. Upon such default, the License shall be automatically revoked and Beneficiary may collect and retain the rents, issues and profits without notice and without taking possessions of the property affected by this Deed of Trust. This right to collect rents, issues and profits shall not grant to Beneficiary or Trustee the right to possession, except as otherwise provided herein; and neither said right, nor termination of the License, shall impose upon Beneficiary or Trustee the duty to produce rents, issues or profits or maintain all or any part of the Property affected by this Trust Deed. If Trustor shall default as aforesaid, Trustor's right to collect any such money shall cease and Beneficiary shall have the right, with or without taking possession of the property affected hereby, to collect all rents, issues, royalties and profits and shall be authorized to, and may, without notice and irrespective of whether declaration of default has been delivered to Trustee and without regard to the adequacy of the security for the indebtedness secured hereby, either personally or by attorney or agent without bringing any action or proceeding, or by receiver to be appointed by the Court, enter into possession and hold, occupy, possess and enjoy the Property, make, cancel, enforce and modify leases, obtain and eject tenants, and set and modify rents and terms of rents, and to sue, and to take, receive and collect all or any part of the said rents, issues, and profits of the property affected hereby, and after paying such costs 13-3807/98446 MEDIAN Page 9 of 12 of maintenance, operation of the Property, and of collection including reasonable attorneys' fees, as in its judgment it may deem proper, to apply the balance upon any indebtedness then secured hereby, the rents, issues, royalties and profits of the Property being hereby assigned to Beneficiary for said purposes. The acceptance of such rents, issues, royalties and profits shall not constitute a waiver of any other right which Trustee or Beneficiary may enjoy under this Deed of Trust or under the laws of California. Failure of or discontinuance by Beneficiary at any time, or from time to time, to collect any such rents, issues, royalties or profits shall not in any manner affect the subsequent enforcement by Beneficiary of the right, power and authority to collect the same. The receipt and application by said Beneficiary of all such rents, issues, royalties and profits pursuant hereto, after execution and delivery of declaration of default and demand for sale as hereinafter provided, or during the pendency of Trustee's sale proceedings hereunder, shall not cure such breach or default nor affect sale proceedings, or any sale made pursuant thereto, but such rents, issues, royalties and profits, less all costs of operation, maintenance, collection and reasonable attorneys' fees, when received by Beneficiary, shall be applied in reduction of the indebtedness secured hereby, from time to time, in such order as Beneficiary may determine. Nothing contained herein, nor the exercise of the right by Beneficiary to collect, shall be, or be construed to be, an affirmation by Beneficiary of any tenancy, lease or option, nor an assumption of liability under, nor subordination of the lien or charge of this Deed of Trust to, any such tenancy, lease or option. 19. If the security of this Deed of Trust is a leasehold estate, the Trustor agrees that: (a) the term "Lease" as used herein shall mean the lease creating the "leasehold estate"' (b) Trustor shall not amend, change or modify his leasehold interest, or the Lease, or agree to do so, without the written consent of the Beneficiary; (c) Trustor will promptly advise Beneficiary regarding any notice, request or demand received by him from the lessor under the Lease and promptly furnish Beneficiary with a copy of any such notice, request or demand; (d) as long as any of the indebtedness secured hereby shall remain unpaid, unless the Beneficiary shall otherwise consent thereto in writing, the leasehold estate shall not merge with the fee title but shall always be kept separate and distinct, notwithstanding the union of said estates in any party; (e) Trustor agrees that it will promptly, strictly, and faithfully perform, fulfill, and comply with all covenants, agreements, terms, conditions and provisions under any lease affecting the premises and to neither do anything, nor to permit anything to be done which may cause modification or termination of any such lease or of the obligations of any lessee or person claiming through such lease or the rents provided for therein or the interest of the lessor or the Beneficiary therein or thereunder. Trustor further agrees he will not execute a Deed of Trust or mortgage which may be or become superior to any leasehold estate that is security for this Deed of Trust. In the event of a violation of any of the covenants set forth in this paragraph, Beneficiary shall have the right, at its option, to declare all sums secured hereby immediately due and payable. Consent to or waiver of one of said violations shall not be deemed to be a consent to or waiver of any other violation. If the security for this Deed of Trust is a leasehold estate, the term "property" as used in this Deed of Trust shall be deemed to mean the leasehold estate whenever the context so requires for the protection of the Beneficiary. 20. Trustor waives, to the fullest extent permissible by law, the right to plead any statute of limitations as a defense to any demand secured hereby. 13-3807/98446 MEDIAN Page 10 of 12 21. Beneficiary may, from time to time, by instrument in writing, substitute a successor or successors to any Trustee named herein or acting hereunder, which instrument, executed and acknowledged by Beneficiary and recorded in the office of the recorder of the county or counties where the Property is situated, shall be conclusive proof of property substitution of such successor Trustee or Trustees, who shall, without conveyances from the Trustee predecessor, succeed to all its title, estate, rights, powers and duties, including but not limited to the power to reconvey the whole or any part of the property covered by this Deed of Trust. Such instrument must contain the name of the original Trustor, Trustee and Beneficiary hereunder, the book and page where this Deed of Trust is recorded. If notice of default shall have been recorded, this power of substitution cannot be exercised until after the costs, fees and expenses of the then acting Trustee shall have been paid to such Trustee, who shall endorse receipt thereof upon such instrument. The procedures herein provided for substitution of Trustee shall not be exclusive of other provisions for substitution provided by law. 22. This Deed of Trust applies to, inures to the benefit of, and binds all parties hereto, their heirs, legatees, devisees, administrators, executors, successors and assigns. The term "Beneficiary" shall mean the owner and holder, including pledgee, of the Note secured hereby, whether or not names as Beneficiary herein. In this Deed of Trust, whenever the context so requires, the masculine gender includes the feminine and/or neuter, and the singular number includes the plural. 23. That in the event of a demand for, and the preparation and delivery of a written statement regarding the obligations secured by this Deed of Trust pursuant to Sections 2943 and 2954 of the Civil Code of California, Beneficiary shall be entitled to make a reasonable charge, not exceeding the maximum amount which is permitted by law at the time the statement is furnished. Beneficiary may also charge Trustor a reasonable fee for any other services rendered to Trustor or rendered in Trustor's behalf in connection with the Property of this Deed of Trust, including changing Beneficiary's records, pertaining to this Deed of Trust in connection with the transfer of the Property, or releasing an existing policy of fire insurance or other casualty insurance held by Beneficiary and replacing the same with another such policy. 24. Trustee accepts this Trust when this Deed of Trust, duly executed and acknowledged, is made a public record as provided by law. Trustee is not obligated to notify any party hereto of pending sale under any other Deed of Trust or of any action or proceeding in which Trustor, Beneficiary, or Trustee shall be a party unless brought by Trustee. 25. Any notice which any party hereto may desire or be required to give to the other party shall be in writing. The mailing thereof must be certified mail addressed to the Trustor at his address hereinabove set forth or to the Beneficiary at his office or at such other place as such parties hereto may designate in writing. [Balance of this page intentionally left blank] 1 3-38 0 719 8446 MEDIAN Page 11 of 12 THE UNDERSIGNED TRUSTOR REQUESTS that a copy of any notice of default and of any notice of sale hereunder be mailed to him at his address hereinbefore set forth. TRUSTOR Dated: , 20 By: HOUSING AUTHORITY OF THE CITY OF HUNTINGTON BEACH Dated: , 20 BY: Deputy Executive Director CITY OF HUNTINGTON BEACH Dated: , 20 BY: Assistant City Manager APPROVED AS TO FORM OFFICE OF HUNTINGTON BEACH CITY ATTORNEY By: Dated: , 20 Jennifer McGrath, City Attorney 13-3807/98446 MEDIAN Page 12 of 12 OFFICIAL BUSINESS ) Document entitled to free recording per Government Code §§ 6103 and 27383 ) Recording Requested By: ) Housing Authority ) of the City of Huntington Beach ) 2000 Main Street ) Huntington Beach, California 92648 ) Attn: Economic Development ) Dept./Housing Division ) SPACE ABOVE THIS LINE FOR RECORDER'S USE PROMISSORY NOTE TO SECURE AFFORDABILITY RESTRICTIONS ON TRANSFER OF PROPERTY (LOW-INCOME) THIS PROMISSORY NOTE (the "Note") is dated this day of , 20_, between (collectively, "Promissor") and the Housing Authority of the City of Huntington Beach ("Authority") with reference to the following facts: A. This Promissory Note is made in reference to that property in the City of Huntington Beach, County of Orange, State of California, with the street address Huntington Beach, California 92648, and the Assessor's Parcel No. and the Condominium Plan Tract No. 16733, Phase 18, recorded on April 30, 2013 as Instrument No. 2013000258232 (the "Property"). B. An "Agreement Declaring Conditions, Covenants and Restrictions for Property" was recorded on , 20_, as Instrument Number , in the Office of the County Recorder of the County of Orange, California (the "Resale Restrictions"). Among other things, the Resale Restrictions limit the price that the Property may be sold to an "Affordable Housing Cost" to "Low Income Households," as those terms are defined in the Resale Restrictions, and further defined in the current Affordable Housing Regulations of the City of Huntington Beach and the Authority Deed of Trust referred to below. C. Concurrently with executing this Note, Promissor has executed a Deed of Trust securing and modifying the Resale Restrictions (the "Authority of Deed of Trust"). D. Pursuant to the Resale Restrictions, the City has approved the sale of the Property to Promissor at an Affordable Housing Cost. To insure that any further sale, transfer or assignment of the Property occurs with the City's approval and at an Affordable Housing Cost, the City has required as a condition of the Promissor's purchase of the Property that Promissor execute this Note. 13-3807/98446 LOW Page 1 of 4 AGREEMENT NOW, THEREFORE, the parties agree as follows: 1. Incorporation of Recitals. The recitals set forth above are incorporated by reference as though fully set forth herein. 2. Amount of the Note. The Amount of this Note is the "Transfer Price" of the Property, less the "Affordable Housing Cost." The Transfer Price shall be determined according to the circumstances that cause the Amount of the Note to become due pursuant to Section 3 of this Note. In the case of the sale of the Property without the City's consent, the Transfer Price shall be the market sales price. In the case of the financing or refinancing of the Property without the City's consent, the Transfer Price shall be the loan amount in excess of the last loan balance on the First Mortgage that the City previously approved. In all other cases, the Transfer Price shall be the fair market value of the Property as established by the Director of Economic Development of the City pursuant to an appraisal. The term "Affordable Housing Cost" shall be defined according to the current Affordable Housing Regulations as adopted by the City of Huntington Beach. Promissor promises to pay the Amount of this Note when due to the Housing Authority at 2000 Main Street, P.O. Box 190, Huntington Beach, California 92648, or at such other address as Authority may direct from time to time in writing. All sums hereunder shall be payable in lawful money of the United States of America and all sums shall be credited first to interest then due and the balance to principal. 3. Due on Sale, Transfer or Refinancing. Promissor agrees to notify the Authority not less than thirty (30) days prior to (i) the sale or transfer of the Property or (ii) any financing or refinancing of the Property. This Note shall be due and payable upon (i) such sale or transfer without the City's consent, (ii) the financing or refinancing of the Property without the City's consent, (iii) Promissor is no longer an occupant of the Property, or (iv) Promissor is in material default of any other obligation under the Resale Restrictions, or the Authority Deed of Trust. 4. Expiration of the Note Obligation. In the event Promissor does not sell or transfer the Property, does not fail to occupy the Property, does not refinance, or is not in material breach of any other provision of the Resale Restrictions or the Agency Deed of Trust before the Sixtieth anniversary of the date of this Note, Promissor shall have no obligation to pay the Note Amount to Authority upon later sale, transfer or refinancing of the Property. 5. Default. The entire unpaid Amount of this Note shall be due and payable in full in the event of a default. The following shall be deemed to be an event of default: a. Failure of Promissor to pay any real property taxes or insurance premiums on the Property as they become due; or 13-3807198"6 LOW Page 2 of 4 b. Any material breach of the Resale Restrictions or the Authority Deed of Trust, following the Authority giving notice of the breach and an opportunity to cure; or C. Failure of Promissor to pay the Note Amount when due. 6. This Note is secured by a Deed of Trust, dated , to the City of Huntington Beach, as Trustee, executed by Promissor in favor of the Authority. 7. Notice. All payments, notices, consents, waivers and other communications under this Agreement must be in writing and shall be deemed to have been given when (a) delivered by hand, or, (b) when received by the addressee, if sent by a nationally recognized overnight delivery service (receipt requested), in each case addressed as set forth below: If to PROMISSOR: If to AGENCY: Housing Authority of the City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attention: City Clerk and, Economic Development Director City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 8. Governing Law. This Agreement is governed by and shall be construed in accordance with the laws of the State of California without giving effect to the conflict of laws principles thereof. The parties agree to personal jurisdiction in the State Courts in Orange County, California and specifically waive any claims of forum non conviens. 9. Modification. This Agreement shall not be amended or modified, except in writing, signed by both parties. 10. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the successors and assigns under this Note. This Note shall not be assigned without the express written consent of Agency. Dated: 20 By: 13-3807/98446 LOW Page 3 of 4 HOUSING AUTHORITY OF THE CITY OF HUNTINGTON BEACH Dated: , 20 By: Deputy Executive Director APPROVED AS TO FORM -- OFFICE OF HUNTINGTON BEACH CITY ATTORNEY Dated: , 20 By: Jennifer McGrath, City Attorney 13-3807/98446 LOW Page 4 of 4 OFFICIAL BUSINESS ) Document entitled to free recording per Government ) Code Sections 6103 and 27383 ) Recording Requested By: ) Housing Authority of the City of Huntington Beach ) 2000 Main Street ) Huntington Beach, California 92648 ) Attn: Economic Development Dept./Housing Division ) SPACE ABOVE THIS LINE FOR RECORDER'S USE DEED OF TRUST WITH ASSIGNMENTS OF RENTS TO SECURE AFFORDABILITY RESTRICTIONS ON TRANSFER OF PROPERTY (LOW-INCOME) THIS DEED OF TRUST is made this day of 20_, by and between whose address is Huntington Beach, California 92648 (collectively, the "Trustor") and the CITY OF HUNTINGTON BEACH, a municipal corporation (the "Trustee"), and the HOUSING AUTHORITY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic (the "Beneficiary"), whose address is 2000 Main Street, Huntington Beach, California 92648, with reference to the following facts: A. This Deed of Trust is made in reference to that property in the City of Huntington Beach, County of Orange, State of California, described legally in the Legal Description attached hereto as Exhibit "A" and incorporated herein with the street address , Huntington Beach, California 92648 and the Assessor's Parcel No. and the Plan Tract No. 16733, Phase 18, recorded on April 30, 2013 as Instrument No. 2013000258232 (the "Property"). B. An "Agreement Declaring Conditions, Covenants and Restrictions for Property" was recorded on , 20_, as Instrument Number , in the Office of the County Recorder of the County of Orange, California (the "Resale Restrictions"). Among other things, the Resale Restrictions limit the price that the Property may be sold to an "Affordable Housing Cost"to "Low Income Households," as those terms are defined in the Resale Restrictions, and further defined in the current affordable housing regulations of the City of Huntington Beach and this Deed of Trust. C. Pursuant to this Deed of Trust. the Resale Restrictions as applied to the Property are extended to expire sixty (60) years from the date this Deed of Trust is recorded (the "Expiration Date"), which date is approximately 20_ 13-3807/98446 LOW Page 1 of 12 NOW, THEREFORE, TRUSTOR HEREBY irrevocably grants, transfers and assigns, to Trustee, in trust, with power of sale of the Property, together with (a) all buildings, improvements and fixtures, now or hereafter placed thereon, it being understood and agreed that all classes of property attached or unattached used in connection herewith shall be deemed fixtures, (b) rents, issues and profits thereof, (c) any water rights and/or stock are appurtenant or pertain to said land, and (d) all sums of money payable on the purchase price of the Property secured by a lien thereon or payable under any agreement for the sale thereof, SUBJECT, HOWEVER, to the right, power and authority hereinafter given to and conferred upon Beneficiary to collect and apply such rents, issues and profits, and all sums of money payable on the purchase price of the Property secured by a lien thereon or payable under any agreement. A. FOR THE PURPOSE OF SECURING: 1. Payment of the indebtedness evidenced by a promissory note executed by Trustor on , 20_(the "Note"). The Amount of the indebtedness is the "Transfer Price" of the Property, less the "Affordable Housing Cost." The calculation of the Amount of the indebtedness is set forth with specificity in the Note, which is on file with the Economic Development Department of the City of Huntington Beach. 2. Performance of each and every obligation, covenant, promise and agreement of the Resale Restrictions, as amended by this Deed of Trust. B. TO PROTECT THE SECURITY OF THIS DEED OF TRUST, TRUSTOR AGREES: 1. Trustor agrees for itself, and its successors and assigns, and every successor to Trustor's interest in the Property, or any part thereof that for sixty (60) years from the date this Deed of Trust is recorded (the "Expiration Date"), to perform all obligations due under the Resale Restrictions, as those obligations are restated and modified as set forth below: (a) The Property shall only be owned and occupied by persons or families of "Low-Income." "Low-Income" shall mean persons or families earning not more than eighty percent (80%) of the Orange County median income, adjusted for appropriate family size. (b) The Property may only be sold at an "Affordable Housing Cost"to households of"Low-Income," as those terms are defined in current Affordable Housing Regulations as adopted by the City of Huntington Beach. Generally, those Regulations define Affordable Housing Cost to mean that purchase price which would result in monthly housing payments which do not exceed Thirty-Five Percent (35%) of Eighty Percent (80%) of the current Orange County monthly median income for a household equal to the number of bedrooms in the unit plus one (1) person. In determining monthly housing payments, the City will assume principal and interest payments on a conventional home mortgage after paying a ten percent (10%) down payment. The mortgage interest rate will be the prevailing Fannie Mae thirty (30) year mortgage rate, or a City-selected equivalent. Monthly housing costs will also include homeowner's association dues, utilities, homeowner's insurance, maintenance costs and property taxes. 13-3807/98446 LOW Page 2 of 12 (c) The Trustor shall further comply with the Affordable Housing Guidelines promulgated by the City for purposes of administering the Affordable Housing Program of the City of Huntington Beach. (d) No transfer of the Property shall occur until the City of Huntington Beach determines (a) that the proposed purchaser intends to occupy the Property as the proposed purchaser's principal residence, (b) that the proposed purchaser is a person or family of Low Income, (c) that the proposed transfer occurs at an Affordable Housing Cost. The City of Huntington Beach shall not be obligated to approve a transfer until and unless the proposed purchaser has submitted to the City of Huntington Beach such information and completed such forms as the City of Huntington Beach shall request to certify the proposed purchaser's intent with respect to its residency of the Property and its gross income, and the proposed purchaser has submitted an affidavit disclosing and certifying the amount of the proposed purchase price. Prior to conveyance of the Property, each approved purchaser shall submit to the City of Huntington Beach an executed disclosure statement which certifies that the purchaser is aware that the purchaser may only sell the unit at an Affordable Housing Cost to a Low Income person or family, that the maximum permitted sales price may be less than fair market value and that the unit must be owner-occupied at all times and cannot be rented or leased. TRUSTOR AND EACH SUCCESSOR, HEIR OR ASSIGN OF TRUSTOR UNDERSTANDS THAT THE DETERMINATION OF THE AFFORDABLE HOUSING COST CAN BE MADE ONLY AT THE TIME OF THE PROPOSED TRANSFER, TAKING INTO CONSIDERATION INTEREST RATES, THE TERMS OF SALE OFFERED TO AND THE ECONOMIC CIRCUMSTANCES OF THE PROPOSED PURCHASER AND OTHER FACTORS THAT CANNOT BE ACCURATELY PREDICTED, AND THAT THE TRANSFER PRICE PERMITTED HEREUNDER MAY BE LESS THAN THE FAIR MARKET VALUE OF THE PROPERTY AND MAY NOT INCREASE OR DECREASE IN THE SAME MANNER AS OTHER SIMILAR REAL PROPERTY WHICH IS NOT ENCUMBERED BY THIS RESTRICTION. TRUSTOR AND EACH SUCCESSOR, HEIR OR ASSIGN OF TRUSTOR FURTHER ACKNOWLEDGES THAT AT ALL TIMES IN SETTING THE TRANSFER PRICE THE PRIMARY OBJECTIVE OF THE BENEFICIARY AND THIS DEED OF TRUST IS TO PROVIDE HOUSING TO ELIGIBLE PERSONS OR FAMILIES AT AN AFFORDABLE HOUSING COST. Trustor Initials Trustor Initials (e) The City of Huntington Beach may impose any conditions on the approval of any transfer of the Property as it determines are reasonably necessary for the effective administration of its Affordable Housing Program. 13-3807/98446 LOW Page 3 of 12 (f) The Covenants contained in this Section 1 shall run with the land and shall automatically terminate and be of no further force or effect sixty (60) years from the date this Deed of Trust is recorded, which date is approximately 2. Trustor covenants by and for itself, its successors and assigns, and all persons claiming under or through them that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the said property, nor shall Trustor itself or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in said property. Trustor and its successors and assigns, shall refrain from restricting the rental or lease (if permitted by Trustor) or sale of said property on the basis of race, color, religion, sex, marital status, national origin or ancestry of any person. All such deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: (a) In deeds: "The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee himself or herself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessee or vendees in the land herein conveyed. The foregoing covenants shall run with the land." (b) In leases: "The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through him or her,. and this lease is made and accepted upon and subject to the following conditions: "There shall be no discrimination against or segregation of any person or group of persons on account of race, color, religion, sex, marital status, ancestry or national origin in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the premises herein leased nor shall the lessee himself or herself, or any person claiming under to through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sublessees, subtenants or vendees in the premises herein leased." (c) In contracts: "There shall be no discrimination against or segregation of, any person, or group of persons on account of race, color, religion, sex, marital status, 13-3807/98446 LOW Page 4 of 12 ancestry or national origin, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the premises, nor shall the transferee himself or herself or any person claiming under or through him or her,, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessee or vendees of the premises." Nothing in this Section 2 shall be construed to authorize the rental or lease of the Property if such rental or lease is not otherwise permitted. The covenants in this paragraph shall run with the land in perpetuity. 3. No violation or breach of the covenants, conditions, restrictions, provisions or limitations contained in this Deed of Trust shall defeat or render invalid or in any way impair the lien or charge of any mortgage or deed of trust or security interest. 4. Trustor has made certain representations and disclosures as a requirement under the Resale Restrictions in order to induce Beneficiary to approve the sale of the Property to Trustor. In the event that Trustor has made any material misrepresentation or failed to disclose any material fact regarding said transaction, Beneficiary at its option and without notice, shall have the right to declare a material breach of the Resale Restrictions and the Note. Beneficiary may make a written declaration of default and demand for sale as in paragraph No. 6 herein set forth. Trustee, upon presentation to it of an affidavit signed by Beneficiary setting forth facts showing a default by Trustor under this paragraph, is authorized to accept as true and conclusive all facts and statements therein, and to act thereon hereunder. 5. All covenants without regard to technical classification or designation shall be binding for the benefit of the Beneficiary and such covenants shall run in favor of the Beneficiary for the entire period during which such covenants shall be in force and effect, without regard to whether the Beneficiary is or remains an owner of any land or interest therein to which such covenants relate. The Beneficiary, in the event of any breach of any such covenants, shall have the right to exercise all the rights and remedies and to maintain any action at law or suits in equity or other proper legal proceedings to enforce and to cure such breach to which it or any other beneficiaries of these covenants may be entitled during the term specified for such covenants, except the covenants against discrimination which may be enforced at law or in equity at any time in perpetuity. 6. Upon default by Trustor in the obligations of the Note, in the performance of any obligation under this Deed of Trust or under the terms of any First Lender's Deed of Trust which is or appears to be prior or superior to this Deed of Trust, Beneficiary may declare all sums secured by this Deed of Trust immediately due and payable by delivering to Trustee of a written declaration of default and demand for sale and a written notice of default and election to sell the Property. Default in the payment of any indebtedness secured by this Deed of Trust, in the obligation of the Note, or in the performance of any agreement under this Deed of Trust constitutes a default only under this Deed of Trust and the Note and does not constitute a default under the First Deed of Trust. Trustee shall cause the notice of default to be recorded. Beneficiary also shall deposit with Trustee this Deed of Trust, the Note, and all documents evidencing any additional expenditures secured by this Deed of Trust. After the lapse of such 13-3807/98446 LOW Page 5 of 12 time as then may be required by law following recordation of such notice of default, and notice of sale having been given as then required by law, Trustee, without demand on Trustor, shall sell the Property at the time and place fixed by it in such notice of sale, whether as a whole or in separate parcels, and in such order as it may determine, at public auction to the highest bidder qualified under the Resale Restrictions and this Deed of Trust in lawful money of the United States, payable at time of sale. Trustee may postpone sale of all or any portion of the Property by public announcement at such time and place of sale, and from time to time thereafter may postpone such sale by public announcement at the time fixed by the preceding postponement. Trustee shall deliver to such purchaser its Deed conveying the Property so sold, but without any covenant or warranty, express or implied. The recital in such Deed of any matters of fact shall be conclusive of the truthfulness thereof. Any person, including Trustor, Trustee, or Beneficiary as hereinafter defined, may purchase at such sale. Trustee may also sell at any such sale and as part thereof any shares of corporate stock securing the obligations secured hereby, and Trustor waives demand and notice of such sale. (Beneficiary at its option may also foreclose on such shares by independent pledge sale, and Trustor waives demand and notice of such sale.) After deducting all costs, fees and expenses of Trustee, and of this Trust, including cost of evidence of title in connection with this sale, Trustee shall apply the proceeds of sale to payment, first; all sums expended under the teams hereof, not then repaid, with accrued interest at the rate then payable under the First Lender Deed of Trust secured hereby, and then of all other sums secured hereby, and, if there are any proceeds remaining, shall distribute them to the person or persons legally entitled thereto. 7. Trustor shall keep the Property in good condition and repair; to allow Beneficiary or its representatives to enter and inspect the Property at all reasonable times and access thereto, shall be permitted for that purpose; not to remove or demolish any building thereon; not to make alterations thereto without the consent of the Beneficiary; to suffer or permit no change in the general nature of the occupancy of the Property without Beneficiary's written consent; to complete or restore promptly and in good workmanlike manner any building which may be constructed, damaged or destroyed thereon, including, without restricting the generality of the foregoing, damage from termites and dry-rot; to pay when due all claims for labor performed and materials furnished in connection with the Property and not to permit any mechanic's lien against the Property; to comply with all laws affecting the Property or requiring any alterations or improvements to be made thereon; not to initiate or acquiesce in any zoning reclassification without Beneficiary's written consent; not to commit or permit waste thereon; not to commit, suffer or permit any act upon the Property in violation of the law; to paint, cultivate, irrigate, fertilize, fumigate, prune, and do all other acts that from the character or use of the Property may be reasonably necessary; and to promptly pay all amounts due others upon agreements of lease or conditional sale of all fixtures, furnishings and equipment located thereon. 8. Trustor shall provide, and maintain in force at all times with respect to the Property, fire and other types of insurance as may be required by Beneficiary. All of such insurance shall have a loss payable endorsement in favor of Beneficiary, shall be for a term and in form, content, amount and in such companies as may be satisfactory to Beneficiary, and the policies therefore shall be delivered to and remain in possession of Beneficiary as further security for the faithful performance of these trusts. At least thirty (30) days prior to the 13-3807/98446 LOW Page 6 of 12 expiration of any such insurance policy, a policy or policies renewing or extending such expiring insurance shall be delivered to Beneficiary together with written evidence showing payment of the premium therefore and, in the event any such insurance policy and evidence of the payment of the premium therefore are not so delivered by Trustor to Beneficiary, Trustor by executing this Deed of Trust specifically requests Beneficiary to obtain such insurance and Beneficiary, without obligation to do so, without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof, may obtain such insurance through or from any insurance agency or company acceptable to it, pay the premium thereof, and may add the - amount thereof to the indebtedness secured hereby, which amount shall bear a like rate of interest. Beneficiary may furnish to any insurance agency or company, or any other person, any information contained in or extracted from any insurance policy delivered to Beneficiary pursuant hereto and any information concerning the loan secured hereby. Neither Trustee nor Beneficiary shall be responsible for such insurance or for the collection of any insurance monies, or for any insolvency of any insurer or insurance underwriter. In case of insurance loss, Beneficiary is hereby authorized either (a) to settle and adjust any claim under the insurance policies provided for in this document without the consent of the Trustor, or (b) to allow Trustor to agree with the insurance company or companies on the amount to be paid upon the loss. In either case, the Beneficiary is authorized to collect and make receipt of any such insurance money. If Trustor is obligated to restore or replace the damaged or destroyed buildings or improvements under the terms of any lease or leases which are or may be prior to the lien of this Deed of Trust and such damage or destruction does not result in cancellation or termination of such lease, such proceeds, after deducting therefrom any expenses incurred in the collection thereof, shall be used to reimburse the Trustor for the cost of rebuilding or restoring the buildings or improvements on said premises. In all other cases, such insurance proceeds shall either be applied for the cost of the rebuilding or restoring the buildings or improvements on said premises. Such buildings and improvements shall be so restored or rebuilt as to be of at least equal value and substantially the same character as prior to the damage or destruction, and shall be in a condition satisfactory to Beneficiary. Such application or release shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. Any and all unexpired insurance shall inure to the benefit of, and pass to the purchaser of, the property conveyed at any Trustee sale held hereunder. 9. Trustor shall pay: (a) at least ten (10) days before delinquency, all general and special City and County taxes, and all assessments on appurtenant water stock, affecting the Property, (b) when done, all special assessments for public improvements, without permitting any improvement bond to issue for any special assessment, (c) when done, all encumbrances, charges and liens, with interest, on the Property, or any part thereof, which are or appears to be prior to superior hereto, (d) if the security of this Deed of Trust is leasehold estate, to make any payment or do any act required of the Lessee or its successor in interest under the terms of the instrument or instruments creating said leasehold, (e) all costs, fees and expenses of this trust, (f) for any statement regarding the obligation secured hereby any amount demanded by Beneficiary not to exceed the maximum allowed by law thereof at the time when such request is made, (g) such other charges for services rendered by Beneficiary and furnished at Trustor's request or that of any successor in interest to Trustor as the Beneficiary may deem reasonable. 13-3807/98446 LOW Page 7 of 12 10. Should Trustor fail to make any payment or do any act as provided in this Deed of Trust, the Beneficiary or Trustee, but without obligation to do so and without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof, may (a) make or do the same in such manner and to such extent as either may deem necessary to protect the security hereof, Beneficiary or Trustee being authorized to enter upon the Property for such purposes, (b) commence, appear in, or defend any action or proceeding purporting to affect the security hereof or the property covered by this Deed of Trust, or the rights or powers of Beneficiary or Trustee, (c) pay, purchase, contest or compromise any encumbrance, charge or lien, which in the judgment of either is or appears to be prior or superior hereto, and (d) in exercising any such powers, pay necessary expenses, employ counsel and pay his reasonable fees. Trustor agrees to repay any amount so expended on demand of Beneficiary, and any amount so expended may be added by Beneficiary to the indebtedness secured hereby and shall bear a like rate of interest. 11. Trustor shall appear in and defend any action or proceeding purporting to affect the security hereof or the Property which is covered by this Deed of Trust, or the rights or powers of Beneficiary or Trustee, and whether or not Trustor so appears or defends, to pay all costs and expenses, including cost of evidence of title and attorney's fees in a reasonable sum, in any such action or proceeding in which Beneficiary or Trustee may appear by virtue of being made a party defendant or otherwise irrespective of whether the interest of Beneficiary or Trustee in the Property is directly questioned by such action, including any action for the condemnation or partition of said premises, and in any suit brought by Beneficiary to foreclose this Deed of Trust. 12. Trustor shall pay immediately and without demand, all sums expended under the terms of this Deed of Trust by Beneficiary or Trustee, with interest from the date of expenditure at the rate which the principal obligation secured hereby bears at the time such payment is made, and the repayment of such sums shall be secured hereby. 13. Should Trustor or any successor in interest to Trustor in the Property drill or extract, or enter into a lease for drilling or extraction of oil, gas or other hydrocarbon substances or any mineral of any kind or character, or sell, convey, further encumber, or alienate the Property, or any party thereof, or any interest therein, or be divested of his title or any interest therein in any manner or way, whether voluntarily or involuntarily, Beneficiary shall have the right, at its option, to declare any obligations secured hereby irrespective of the maturity date specified in any Note evidencing the same, immediately due and payable, and no waiver of this right shall be effective unless in writing. 14. Any award, settlement or damages for injury or damages to the Property, or in construction with the transaction financed by such loan, and any award of damages in connection with any condemnation for public use of or injury to the Property, or any part thereof, is hereby assigned and shall be paid to Beneficiary, who may apply or release such monies received by it in such manner and with the same effect as above provided for the disposition of proceeds of fire or other insurance. 15. By accepting payment of any sums secured by this Deed of Trust after its due date, or by making any payment, performing any act on behalf of Trustor, that Trustor was obligated hereunder, but failed, to make, or perform, or by adding any payment so made by 13-3807/98446 LOW Page 8 of 12 Beneficiary to the indebtedness secured hereby, Beneficiary does not waive its right either to require prompt payment when due of all other sums so secured or to declare a default for failure so to pay. - 16. At any time, or from time to time, without liability of the Beneficiary or Trustee thereof, and without notice, upon written request of Beneficiary and presentation of this Deed of Trust and the Note secured hereby for endorsement, and without affecting the personal liability of any person for payment of the indebtedness secured hereby, or the lien of the Deed of Trust upon the remainder of the Property for the full amount of the indebtedness then or thereafter secured hereby, or the rights or powers of Beneficiary or the Trustee with respect to the remainder of the Property, Trustee may: (a) reconvey any part of the Property, (b) consent to the making of any map or plat thereof; (c)join in granting any easement thereon, (d)join in any agreement subordinating the lien or charge hereof. 17. The lien hereof shall remain in full force and effect during any postponement or extension of time of payment of the indebtedness secured hereby, or any part thereof. 18. As additional security, Trustor irrevocably assigns to Beneficiary the rents, issues, and profits of the Property for the purposes and upon the terms and conditions set forth below. This assignment shall not impose upon Beneficiary any duty to produce rents from the property affected by this Deed of Trust, or cause Authority to be (a) "mortgages in possession" for any purpose; (b) responsible for performing any of the obligations of the lessor under any lease; or (c) responsible for any waste committed by lessees or any other parties, for any dangerous or defective condition of the property affected by this Deed of Trust, or for any negligence in the management, upkeep, or control of such rights to rents, issues and profits is not contingent upon, and may be exercised without possession of, the property affected by this Deed of Trust. Beneficiary confers upon Trustor a license ("License") to collect and retain the rents, issues and profits of the property affected by this Deed of Trust as they become due and payable, until the occurrence of a default hereunder. Upon such default, the License shall be automatically revoked and Beneficiary may collect and retain the rents, issues and profits without notice and without taking possessions of the property affected by this Deed of Trust. This right to collect rents, issues and profits shall not grant to Beneficiary or Trustee the right to possession, except as otherwise provided herein; and neither said right, nor termination of the License, shall impose upon Beneficiary or Trustee the duty to produce rents, issues or profits or maintain all or any part of the Property affected by this Trust Deed. If Trustor shall default as aforesaid, Trustor's right to collect any such money shall cease and Beneficiary shall have the right, with or without taking possession of the property affected hereby, to collect all rents, issues, royalties and profits and shall be authorized to, and may, without notice and irrespective of whether declaration of default has been delivered to Trustee and without regard to the adequacy of the security for the indebtedness secured hereby, either personally or by attorney or agent without bringing any action or proceeding, or by receiver to be appointed by the Court, enter into possession and hold, occupy, possess and enjoy the Property, make, cancel, enforce and modify leases, obtain and eject tenants, and set and modify rents and terms of rents, and to sue, and to take, receive and collect all or any part of the said rents, issues, and profits of the property affected hereby, and after paying such costs 13-3807/98446 LOW Page 9of12 of maintenance, operation of the Property, and of collection including reasonable attorneys' fees, as in its judgment it may deem proper, to apply the balance upon any indebtedness then secured hereby, the rents, issues, royalties and profits of the Property being hereby assigned to Beneficiary for said purposes. The acceptance of such rents, issues, royalties and profits shall not constitute a waiver of any other right which Trustee or Beneficiary may enjoy under this Deed of Trust or under the laws of California. Failure of or discontinuance by Beneficiary at any time, or from time to time, to collect any such rents, issues, royalties or profits shall not in any manner affect the subsequent enforcement by Beneficiary of the right, power and authority to collect the same. The receipt and application by said Beneficiary of all such rents, issues, royalties and profits pursuant hereto, after execution and delivery of declaration of default and demand for sale as hereinafter provided, or during the pendency of Trustee's sale proceedings hereunder, shall not cure such breach or default nor affect sale proceedings, or any sale made pursuant thereto, but such rents, issues, royalties and profits, less all costs of operation, maintenance, collection and reasonable attorneys' fees, when received by Beneficiary, shall be applied in reduction of the indebtedness secured hereby, from time to time, in such order as Beneficiary may determine. Nothing contained herein, nor the exercise of the right by Beneficiary to collect, shall be, or be construed to be, an affirmation by Beneficiary of any tenancy, lease or option, nor an assumption of liability under, nor subordination of the lien or charge of this Deed of Trust to, any such tenancy, lease or option. 19. If the security of this Deed of Trust is a leasehold estate, the Trustor agrees that: (a) the term "Lease" as used herein shall mean the lease creating the "leasehold estate"' (b) Trustor shall not amend, change or modify his leasehold interest, or the Lease, or agree to do so, without the written consent of the Beneficiary; (c) Trustor will promptly advise Beneficiary regarding any notice, request or demand received by him from the lessor under the Lease and promptly furnish Beneficiary with a copy of any such notice, request or demand; (d) as long as any of the indebtedness secured hereby shall remain unpaid, unless the Beneficiary shall otherwise consent thereto in writing, the leasehold estate shall not merge with the fee title but shall always be kept separate and distinct, notwithstanding the union of said estates in any party; (e) Trustor agrees that it will promptly, strictly, and faithfully perform, fulfill, and comply with all covenants, agreements, terms, conditions and provisions under any lease affecting the premises and to neither do anything, nor to permit anything to be done which may cause modification or termination of any such lease or of the obligations of any lessee or person claiming through such lease or the rents provided for therein or the interest of the lessor or the Beneficiary therein or thereunder. Trustor further agrees he will not execute a Deed of Trust or mortgage which may be or become superior to any leasehold estate that is security for this Deed of Trust. In the event of a violation of any of the covenants set forth in this paragraph, Beneficiary shall have the right, at its option, to declare all sums secured hereby immediately due and payable. Consent to or waiver of one of said violations shall not be deemed to be a consent to or waiver of any other violation. If the security for this Deed of Trust is a leasehold estate, the term "property" as used in this Deed of Trust shall be deemed to mean the leasehold estate whenever the context so requires for the protection of the Beneficiary. 20. Trustor waives, to the fullest extent permissible by law, the right to plead any statute of limitations as a defense to any demand secured hereby. 13-3807/98446 LOW Page 10 of 12 21. Beneficiary may, from time to time, by instrument in writing, substitute a successor or successors to any Trustee named herein or acting hereunder, which instrument, executed and acknowledged by Beneficiary and recorded in the office of the recorder of the county or counties where the Property is situated, shall be conclusive proof of property substitution of such successor Trustee or Trustees, who shall, without conveyances from the Trustee predecessor, succeed to all its title, estate, rights, powers and duties, including but not limited to the power to reconvey the whole or any part of the property covered by this Deed of Trust. Such instrument must contain the name of the original Trustor, Trustee and Beneficiary hereunder, the book and page where this Deed of Trust is recorded. If notice of default shall have been recorded, this power of substitution cannot be exercised until after the costs, fees and expenses of the then acting Trustee shall have been paid to such Trustee, who shall endorse receipt thereof upon such instrument. The procedures herein provided for substitution of Trustee shall not be exclusive of other provisions for substitution provided by law. 22. This Deed of Trust applies to, inures to the benefit of, and binds all parties hereto, their heirs, legatees, devisees, administrators, executors, successors and assigns. The term "Beneficiary" shall mean the owner and holder, including pledgee, of the Note secured hereby, whether or not names as Beneficiary herein. In this Deed of Trust, whenever the context so requires, the masculine gender includes the feminine and/or neuter, and the singular number includes the plural. 23. That in the event of a demand for, and the preparation and delivery of a written statement regarding the obligations secured by this Deed of Trust pursuant to Sections 2943 and 2954 of the Civil Code of California, Beneficiary shall be entitled to make a reasonable charge, not exceeding the maximum amount which is permitted by law at the time the statement is furnished. Beneficiary may also charge Trustor a reasonable fee for any other services rendered to Trustor or rendered in Trustor's behalf in connection with the Property of this Deed of Trust, including changing Beneficiary's records, pertaining to this Deed of Trust in connection with the transfer of the Property, or releasing an existing policy of fire insurance or other casualty insurance held by Beneficiary and replacing the same with another such policy. 24. Trustee accepts this Trust when this Deed of Trust, duly executed and acknowledged, is made a public record as provided by law. Trustee is not obligated to notify any party hereto of pending sale under any other Deed of Trust or of any action or proceeding in which Trustor, Beneficiary, or Trustee shall be a party unless brought by Trustee. 25. Any notice which any party hereto may desire or be required to give to the other party shall be in writing. The mailing thereof must be certified mail addressed to the Trustor at his address hereinabove set forth or to the Beneficiary at his office or at such other place as such parties hereto may designate in writing. [Balance of this page intentionally left blank] 13-3807/98446 LOW Page 11 of 12 THE UNDERSIGNED TRUSTOR REQUESTS that a copy of any notice of default and of any notice of sale hereunder be mailed to him at his address hereinbefore set forth. TRUSTOR Dated: , 20 By: HOUSING AUTHORITY OF THE CITY OF HUNTINGTON BEACH Dated: , 20 By: Deputy Executive Director CITY OF HUNTINGTON BEACH Dated: , 20 BY: Assistant City Manager APPROVED AS TO FORM OFFICE OF HUNTINGTON BEACH CITY ATTORNEY By: Dated: , 20 Jennifer McGrath, City Attorney 13-3807/98446 LOW Page 12 of 12 This Document was electronically recorded by City of Huntington Beach Recorded in Official Records, Orange County RECORDING REQUESTED BY: ) Hugh Nguyen, Clerk-Recorder } ��IIIII�II III I� III�I I 11111111111111111111111111111 1111N0 FEE } 2013000305878 10:46am 05/21/13 AND WHEN RECORDED MAIL TO:) 10 402 Al2 44 } 0.00 0.00 0.00 0.00 129.00 0.00 0.00 0.00 City Clerk } City of Huntington Beach ) 2000 Main Street } Huntington Beach, CA 92648 } E tf (Space Above for Recorder's Use) u,�iTs -N-4w1b 90 This docurnentis solely for the dec6GREEMENT DECLARING CONDITIONS, COVENANTS of the city of Hun AND RESTRICTIONS FOR PROPERTY Beach,ascwt (RESALE RESTRICTIONS) oovernetent Code sea.6103 WW shmM b s r000rdW frs of chffM This Agreement Declac'rg Conditions, Covenants and Restrictions for Property (the "Agreement") is made as of UXri% /Z , 2013, by and between RP/PLC BLUE CANVAS, L.L.C., a Delaware limited liability company (the "Covenantor"), and THE CITY OF HUNTINGTON BEACH, a California municipal corporation (the "City"), and the HOUSING AUTHORITY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic (the "Authority"). Collectively, the City and Authority will be referred to as the "Covenantee". RECITALS A. Covenantor is the owner of record of that certain real property located in the City of Huntington Beach, County of Orange, State of California legally described in the attached Exhibit "A". B. On September 2, 2008, the City Council approved Tract No. 16733, as per map recorded as Instrument No. 2008000531659 in Book 897, Pages 10 through 14 of Miscellaneous Maps, Records of Orange County, California ("Project"). City imposed conditions of approval on the Project, requiring Covenantor to submit an Affordable Housing Agreement, in accordance with the Affordable Housing Program, for review by the Planning Department and approval by the City Attorney and acceptance by the City Council. The City further required that the plan shall provide ten percent (10%) of the total 201 units equaling 21 units to be restricted as set forth herein ("Restricted Units"), 3 of which are to be affordable housing for household earning less than 80% of the Orange County Median Income and 18 of which are to be affordable housing for households earning no more than 100% of the Orange County Median Income, in both cases for a period of sixty (60) years. The execution and recordation of this Agreement is intended to fully satisfy that condition. NOW, THEREFORE, the parties hereto agree and covenant as follows: 1. Affordability Covenants. Covenantor agrees for itself and its successor and assigns, and every successor to Covenantor's interest in the Restricted Unit, or any part thereof, that the Project located at Newland Street and Noelle Drive, which consists of a total of 201 1 3-3 703/9391 5 1 residential condominium units, shall be designated as affordable and shall be held subject to this Agreement for sixty (60) years from the date of the close of escrow for the initial sale of each such Restricted Unit built in Tract No. 16733 as follows.- (a) Eighteen (18) Restricted Units as further designated on Exhibit "B" attached hereto shall only be owned and occupied by "Median-Income Households", which shall mean persons or families earning not more than 100% of the Orange County median income, adjusted for household size appropriate for the property as determined by the Agency based on statistics published by the United States Department of Housing & Urban Development or established by the State of California, pursuant to Health and Safety Code Section 50093, or a successor statute. (b) These eighteen (18) Medium-Income Restricted Units shall only be sold at an "Affordable Housing Cost" to "Median-Income Households." (c) Three (3) Restricted Units as further designated on Exhibit "B" attached hereto shall only be owned and occupied by "Low-Income Households", which shall mean persons or families earning less than 80% of the Orange County median income, adjusted for household size appropriate for the property as determined by the Agency based on statistics published by the United States Department of Housing & Urban Development or established by the State of California, pursuant to Health and Safety Code Section 50093, or a successor statute. (d) These three (3) Low-Income Restricted Units shall only be sold at an "Affordable Housing Cost" to "Low-income Households." (e) "Affordable Housing Cost" shall mean the permitted gross sales price of the Restricted Unit as set forth in the Affordable Housing Price/Income Guidelines or successor guidelines published, from time to time, by the City for such purpose. (f) The term of this Agreement shall commence on the date of the initial sale of each Restricted Unit to a qualifying purchaser as evidenced by a deed recorded with the Orange County Recorder's Office and shall continue for sixty years from said date ("Affordability Period"). The covenant contained in this Section 1 shall run with the Restricted Unit and shall automatically terminate and be of no further force or effect upon the expiration of the Affordability Period. (g) Purchasers of the Restricted Units identified above shall enter into a promissory note and deed of trust in the forms attached hereto as Exhibit "C". 2. Transfer of Restricted Unit; Consent of Agency. During the Affordability Period no transfer of a Restricted Unit shall occur until the City determines: (a) that the proposed purchaser intends to occupy the Restricted Unit as the proposed purchaser's principal residence, (b) that the proposed purchaser is a "Low", or "Median" Income Household as provided in Section 1 above, and 13-3703/93915 2 (c) that the proposed transfer occurs at an Affordable Housing Cost. (d) The Restricted Units shall be constructed prior to or concurrent with the primary Project. (e) In the event that the Covenantor (including successors and assigns) desires to sell the Restricted Unit, Covenantor shall send written notice thereof to the City at the following address: City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attention: Director of Economic Development Within seven (7) days of receiving such notice, the City shall send Covenantor transfer application forms prepared by the City. Such forms shall contain a certification of the proposed purchaser's intent with respect to his/her/its residency of the Restricted Unit and his/her/its gross income, and an affidavit of the proposed purchaser disclosing and certifying the amount of the proposed purchase price. The City shall not be obligated to approve a transfer unless and until the proposed purchaser has submitted to the City such information and completed such forms. In the interest of expediting the close of escrow for such proposed transactions, the City shall reasonably approve or disapprove such submissions as soon as practicable after submission of such forms, and in no event later than fourteen (14) days after submission of a completed form. Prior to conveyance of the Restricted Unit, each approved purchaser shall also submit to the City an executed disclosure statement which certifies that the purchaser is aware that: (i) the purchaser buying the Restricted Unit may only sell the Restricted Unit at an Affordable Housing cost to a "Low" or "Median" Income Household as provided in Section 1 above, (ii) the maximum permitted sales price may be less than fair market value and (iii) the Restricted Unit must be owner-occupied at all times and cannot be rented or leased. The approved purchaser shall also submit an executed promissory, trust deed, notice documents, and any other documentation required by the City to effectuate the Affordable Housing Program. Covenantor shall cooperate with the City in providing such forms to proposed purchasers and in assisting proposed purchasers to prepare such forms and to provide any required information to the City in connection with only the Covenantor's sale of the Restricted Unit, provided that the Covenantor shall not be obligated to incur any out-of-pocket costs in connection therewith, other than employee time dedicated to providing such assistance. THE COVENANTOR AND EACH SUCCESSOR, HEIR, OR ASSIGN OR COVENANTOR UNDERSTAND THAT THE DETERMINATION OF THE AFFORDABLE HOUSING COST CAN BE MADE ONLY AT THE TIME OF THE PROPOSED TRANSFER, TAKING INTO CONSIDERATION INTEREST RATES, THE TERMS OF SALE OFFERED TO, AND THE ECONOMIC CIRCUMSTANCES OF, THE PROPOSED PURCHASER AND OTHER FACTORS THAT CANNOT BE ACCURATELY PREDICTED, AND THAT THE TRANSFER PRICE PERMITTED HEREUNDER MAY BE LESS THAN THE FAIR MARKET VALUE OF THE PROPERTY AND MAY NOT INCREASE OR DECREASE IN THE SAME MANNER AS OTHER SIMILAR REAL PROPERTY 13-3703/93915 3 i ,I i WHICH IS NOT ENCUMBERED BY THIS RESTRICTION. COVENANTOR AND EACH SUCCESSOR, HEIR, OR ASSIGN OF COVENANTOR FURTHER ACKNOWLEDGES THAT AT ALL TIMES IN SETTING THE TRANSFER PRICE, THE PRIMARY OBJECTIVE OF THE CITY AND THIS AGREEMENT IS TO PROVIDE HOUSING TO "LOW" OR "MEDIAN" INCOME HOUSEHOLDS AT AN AFFORDABLE HOUSING COST. Covenantor's Initials Covenantor shall include in the escrow instructions and Purchase and Sale Agreements with purchaser a provision which requires each purchaser to record a covenant which will run with the land and bind all successors-in-interest or assignees that will ensure that all subsequent purchasers and occupants qualify as "Low" or "Median" Income Households as applicable. Said covenant shall remain in full force and effect for the Affordability Period as set forth in Section 1. 3. Non-Discrimination Covenants. Covenantor covenants by and for itself, it successors and assigns, and all persons claiming under or though them that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, religion, sex, sexual orientation, creed, ancestry, national or ethnic origin, age, family or marital status, handicap or disability, in the sale, transfer, use, occupancy, tenure or enjoyment of the Restricted Unit, nor shall Covenantor itself or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, subtenants, or vendees in the Restricted Unit. Covenantor and its successors and assigns shall refrain from restricting the sale of the Restricted Unit on the basis of race, color, religion, sex, sexual orientation, creed, ancestry, national or ethnic origin, age, family or marital status, handicap or disability, of any person. All such deeds or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clause: (a) in deeds: "The grantee herein covenants by and for himself or her his or her heirs, executors, administrators and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, religion, sex, sexual orientation, creed, ancestry, national or ethnic origin, age, family or marital status, handicap or disability, in the sale, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee himself or herself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, or vendees in the land herein conveyed. The foregoing covenants shall run with the land." (b) in contracts: "There shall be no discrimination against or segregation of, any person or group of persons on account of-race, color, religion, sex, sexual orientation, creed, ancestry, national or ethnic origin, age, family or marital status, handicap or disability, in the sale, transfer, use, occupancy, tenure or enjoyment of the premises, nor shall the transferor himself or herself of any person claiming under or though him or her, establish or 13-3703193915 4 permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use of occupancy of tenants, subtenants or vendee of the premises." (c) In leases: "The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators, and assignees, and all persons claiming under or though him or her, and this lease is made and accepted upon and subject to the following conditions: "That there shall be no discrimination against or segregation of any person or group of persons on account of race, color, religion, sex, sexual orientation, creed, ancestry, national or ethnic origin, age, family or marital status, handicap or disability, in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the premises herein leased nor shall the lessee himself or herself, or any person claiming under or though him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy of tenants, sublessees, subtenants, or vendees in the premises herein leased." 4. Covenants Do Not Impair Lien. No violation or breach of covenants, conditions, restrictions, provisions or limitations contained in this Agreement shall defeat or render invalid or in any way impair the lien or charge of any mortgage or deed of trust or security interest. 5. Covenants For Benefit of City. All covenants without regard to technical classification or designation shall be binding for the benefit of the Covenantee and such covenants shall run in favor of Covenantee for the entire period during which time such covenants shall be in force and effect, without regard to whether the Covenantee is or remains an owner of any land or interest therein to which such covenants relate. The Covenantee, in the event of any breach of any such covenants, shall have the right to exercise all the rights and remedies and to maintain any such action at law or suits in equity or other proper legal proceedings to enforce and to cure such breach to which it or any other beneficiaries of these covenants may be entitled during the term specified for such covenants, except the covenants against discrimination which may be enforced at law or in equity at any time in perpetuity. 6. Counterparts. This Agreement may be executed in a number of counterparts, each of which shall be an original, but all of which shall constitute one and the same document. 13-3703/93915 5 7. Applicable Law. (a) If any provision of this Agreement or portion thereof, or the application of any provision to any person or circumstances, shall to any extent be held invalid, inoperative, or unenforceable, the remainder of this Agreement, or the application of such provision or portion thereof to any other persons or circumstances, shall not be affected thereby and it shall not be deeded that any such invalid provision affects the consideration for this Agreement; and each provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law. (b) This Agreement shall be construed in accordance with the laws of the State of California. [Balance of this page intentionally left blank] 13-3703193915 6 IN WITNESS WHEREOF, the Covenantee and Covenantor have caused this instrument to be executed on their behalf by their respective officers hereunto duly authorized as of the date set forth above. COVENANTOR: COVENANTEE: RP/PLC BLUE CANVAS, L.L.C., CITY OF HUNTINGTON BEACH a Delaware limited liability company a California municipal corporation r By- Mayor Its: it-"EYerk lr 1 HOUSING AUTHORITY OF THE CITY OF HUNTINGTON BEACH, a public body car porate and politic By: Deputy Executive Director APPROVED AS TO FORM: ity Attor ey / Agency Cou sel y. Z INITA9Z ROVED: Planni g Dir ctor REVI D APPROVED: /&11 City d i strator 13-3703/93915 7 STATE OF CALIFORNIA ) ) ss. COUNTY OF ORANGE ) On D ,,- 2013, before me, Is Notary Public, personally appeared 1)'A,4 42Nd who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he/s#e-executed the same in his/Ie authorized capacity, and that by hisA-her signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. / [SEAL] Signature PATRICIA ALEXIS HANSON w Commission# 1888030 Notary Public-California z z ' Orange County My Comm.Expires May 2,2014 STATE OF CALIFORNIA ) ss. COUNTY OF ORANGE ) On 04A 2013, before me, >J�rl �lU Notary Publi personally appeared who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. [SEAL] Signature c5Z KATNLEEN NELSON Conadeebn# 1"1094 No"Pine-CAMOMia 14D Onw County my COMM.E 28.ZO1 B 1 3-3703/9391 5 8 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT CIVIL CODE§1189 c State of California County of On 3 before me, 'S ate Here Insert NAme and Title of the qcer personally appeared ���A)/� ,L,��9�1,d/�'1A� /4�nJ� �8igd1� -)Ci_VA)A) Name(s)of Signers) , who proved to me on the basis of satisfactory evidence to be the persor�q whose nameos 4 0 subscribed to the within instrument and acknowledged to me that b ,(he executed the same in bisthe authorized capacity and that by hLsLhel2jei signature($ on the instrument the persor s&or the entity upon behalf of which the persor�pacted, executed the instrument. P. L. ESPARZA I certify under PENALTY OF PERJURY under the a r�r Commission# 1857021 Z laws of the State of California that the foregoing z ; Notary Public-California Z Orange County D paragraph is true and correct. My Comm. Expires Au94,20 WITNESS my hand and official seal. � lax Signature: Place Notary Seal Above OPT y�N/y/ Signature of No Public ®P'I I®ItlML� Though the information below is not required by law,it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached)Pocument Title or Type of Document:fte< AMjW7`ZI_- .1-AfA)6 C6#)b1-nDA)S CbV49A OTS ;1���&-WLTAA1S Document Date: ftL I-L �/.3 Number of Pages: Signer(s) Other Than Named Above: Capacity(ies) Claimed by Signer(s) Signer's Name: Signer's Name: ❑ Corporate Officer — Title(s): ❑Corporate Officer — Title(s): ❑ Individual ❑ Individual ❑ Partner— ❑Limited ❑General ❑ Partner — ❑ Limited ❑General ❑ Attorney in Fact ❑Attorney in Fact ❑ Trustee ❑Trustee ❑ Guardian or Conservator ❑Guardian or Conservator ❑ Other: ❑Other: Signer Is Representing: Signer Is Representing: ©2012 National Notary Association •NationalNotary.org• 1-800-US NOTARY(1-800-876-6827) Item#5907 EXHIBIT "A" Legal Description of Restricted Units in Tract 16733 All that certain real property in the City of Huntington Beach, County of Orange, State of California, described as follows: Parcel 1: The "Median-Income Households" consisting of: Units 84, and 90, as shown on that certain Condominium Plan Pacific Shores - Phase 14 recorded on February 13, 2013, as Instrument No. 2013000091955 of Official Records of Orange County, California, covering Lot 3 of Tract No. 16733, as per the Map, lying within the boundaries of said Condominium Plan. Parcel 2: The "Low-Income Households" consisting of: Unit 87, as shown on that certain Condominium Plan Pacific Shores - Phase 14 recorded on February 13, 2013, as Instrument No. 2013000091955 of Official Records of Orange County, California, covering Lot 3 of Tract No. 16733, as per the Map, lying within the boundaries of said Condominium Plan. 13-3703/93915 1 EXHIBIT "B" Designation of Median-Income and Low-Income Household Restricted Units Median-Income Household Restricted Units: Those Units more particularly described as Parcel 1 on Exhibit "A" to this Agreement. Low-Income Household Restricted Units: Those Units more particularly described as Parcel 2 on Exhibit "A" to this Agreement. 13-3703/93915 1 EXHIBIT "C" Promissory Note and Deed of Trust (See Attached — Median and Low Income Documents) 13-3703/93915 1 OFFICL&L BUSINESS ) Document entitled to free recording per ) Government Code §§ 6103 and 27383 ) Recording Requested By: ) Housing Authority ) of the City of Huntington Beach ) 2000 Main Street ) Huntington Beach, California 92648 ) Attn: Economic Development ) Dept./Housing Division ) SPACE ABOVE THIS LINE FOR RECORDER'S USE PROMISSORY NOTE TO SECURE AFFORDABILITY RESTRICTIONS ON TRANSFER OF PROPERTY (MEDIAN-INCOME) THIS PROMISSORY NOTE (the "Note") is dated this day of , 20_ between (collectively, "Promissor") and the Housing Authority of the City of Huntington Beach ("Authority") with reference to the following facts: A. This Promissory Note is made in reference to that property in the City of Huntington Beach, County of Orange, State of California, with the street address Huntington Beach, California 92648, and the Assessor's Parcel No. and the Condominium Plan Tract No. 16733, Phase 14, recorded on February 13, 2013 as Instrument No. 2013000091955 (the "Property"). B. An "Agreement Declaring Conditions, Covenants and Restrictions for Property" was recorded on , 20_, as Instrument Number , in the Office of the County Recorder of the County of Orange, California (the "Resale Restrictions"). Among other things, the Resale Restrictions limit the price that the Property may be sold to an "Affordable Housing Cost" to "Moderate Income Households," as those terms are defined in the Resale Restrictions, and further defined in the current Affordable Housing Regulations of the City of Huntington Beach and the Authority Deed of Trust referred to below. C. Concurrently with executing this Note, Promissor has executed a Deed of Trust securing and modifying the Resale Restrictions (the "Authority of Deed of Trust"). D. Pursuant to the Resale Restrictions, the City has approved the sale of the Property to Promissor at an Affordable Housing Cost. To insure that any further sale, transfer or assignment of the Property occurs with the City's approval and at an Affordable Housing Cost, the City has required as a condition of the Promissor's purchase of the Property that Promissor execute this Note. 1 3-3 70 3193 9 1 5 MEDIAN Page 1 of 4 AGREEMENT NOW, THEREFORE, the parties agree as follows: 1. Incorporation of Recitals. The recitals set forth above are incorporated by reference as though fully set forth herein. 2. Amount of the Note. The Amount of this Note is the "Transfer Price" of the Property, less the "Affordable Housing Cost." The Transfer Price shall be determined according to the circumstances that cause the Amount of the Note to become due pursuant to Section 3 of this Note. In the case of the sale of the Property without the City's consent, the Transfer Price shall be the market sales price. In the case of the financing or refinancing of the Property without the City's consent, the Transfer Price shall be the loan amount in excess of the last loan balance on the First Mortgage that the City previously approved. In all other cases, the Transfer Price shall be the fair market value of the Property as established by the Director of Economic Development of the City pursuant to an appraisal. The term "Affordable Housing Cost" shall be defined according to the current Affordable Housing Regulations as adopted by the City of Huntington Beach. Promissor promises to pay the Amount of this Note when due to the Housing Authority at 2000 Main Street, P.O. Box 190, Huntington Beach, California 92648, or at such other address as Authority may direct from time to time in writing. All sums hereunder shall be payable in lawful money of the United States of America and all sums shall be credited first to interest then due and the balance to principal. 3. Due on Sale, Transfer or Refinancing. Promissor agrees to notify the Authority not less than thirty (30) days prior to (i) the sale or transfer of the Property or (ii) any financing or refinancing of the Property. This Note shall be due and payable upon (i) such sale or transfer without the City's consent, (ii) the financing or refinancing of the Property without the City's consent, (iii) Promissor is no longer an occupant of the Property; or (iv) Promissor is in material default of any other obligation under the Resale Restrictions, or the Authority Deed of Trust. 4. Expiration of the Note Obligation. In the event Promissor does not sell or transfer the Property, does not fail to occupy the Property, does not refinance, or is not in material breach of any other provision of the Resale Restrictions or the Agency Deed of Trust before the Sixtieth anniversary of the date of this Note, Promissor shall have no obligation to pay the Note Amount to Authority upon later sale, transfer or refinancing of the Property. 5. Default. The entire unpaid Amount of this Note shall be due and payable in full in the event of a default. The following shall be deemed to be an event of default: a. Failure of Promissor to pay any real property taxes or insurance premiums on the Property as they become due; or 13-3703/93915 MEDIAN Page 2 of 4 b. Any material breach of the Resale Restrictions or the Authority Deed of Trust, following the Authority giving notice of the breach and an opportunity to cure; or C. Failure of Promissor to pay the Note Amount when due. 6. This Note is secured by a Deed of Trust, dated , to the City of Huntington Beach, as Trustee, executed by Promissor in favor of the Authority. 7. Notice. All payments, notices, consents, waivers and other communications under this Agreement must be in writing and shall be deemed to have been given when (a) delivered by hand, or, (b) when received by the addressee, if sent by a nationally recognized overnight delivery service (receipt requested), in each case addressed as set forth below: If to PROMISSOR: If to AGENCY: Housing Authority of the City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attention: City Clerk and, Economic Development Director City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 8. Governing Law. This Agreement is governed by and shall be construed in accordance with the laws of the State of California without giving effect to the conflict of laws principles thereof. The parties agree to personal jurisdiction in the State Courts in Orange County, California and specifically waive any claims of forum non conviens. 9. Modification. This Agreement shall not be amended or modified, except in writing, signed by both parties. 10. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the successors and assigns under this Note. This Note shall not be assigned without the express written consent of Agency. Dated: 20 By: 13-3703/93915 MEDIAN Page 3 of 4 HOUSING AUTHORITY OF THE CITY OF HUNTINGTON BEACH Dated: , 20 By: Deputy Executive Director APPROVED AS TO FORM OFFICE OF HUNTINGTON BEACH CITY ATTORNEY Dated: , 20 By: Jennifer McGrath, City Attorney 13-3703/93915 MEDIAN Page 4 of 4 OFFICIAL BUSINESS } Document entitled to free recording per Government ) Code Sections 6103 and 27383 ) Recording Requested By: ) Housing Authority of the City of Huntington Beach ) 2000 Main Street ) Huntington Beach, California 92648 ) Attn: Economic Development Dept./Housing Division ) SPACE ABOVE THIS LINE FOR RECORDER'S USE DEED OF TRUST WITH ASSIGNMENTS OF RENTS TO SECURE AFFORDABILITY RESTRICTIONS ON TRANSFER OF PROPERTY (MEDIAN-INCOME) THIS DEED OF TRUST is made this day of 20_, by and between whose address is Huntington Beach, California 92648 (collectively, the "Trustor") and the CITY OF HUNTINGTON BEACH, a municipal corporation (the "Trustee"), and the HOUSING AUTHORITY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic (the "Beneficiary"), whose address is 2000 Main Street, Huntington Beach, California 92648, with reference to the following facts: A. This Deed of Trust is made in-reference to that property in the City of Huntington Beach, County of Orange, State of California, described legally in the Legal Description attached hereto as Exhibit "A" and incorporated herein with the street address Huntington Beach, California 92648 and the Assessor's Parcel No. and the Plan Tract No. 16733, Phase 14, recorded on February 13, 2013 as Instrument No. 2013000091955 (the "Property"). B. An "Agreement Declaring Conditions, Covenants and Restrictions for Property" was recorded on , 20 , as Instrument Number , in the Office of the County Recorder of the County of Orange, California (the "Resale Restrictions"). Among other things, the Resale Restrictions limit the price that the Property may be sold to an "Affordable Housing Cost" to "Moderate Income Households," as those terms are defined in the Resale Restrictions, and further defined in the current affordable housing regulations of the City of Huntington Beach and this Deed of Trust. C. Pursuant to this Deed of Trust. the Resale Restrictions as applied to the Property are extended to expire sixty (60) years from the date this Deed of Trust is recorded (the "Expiration Date"), which date is approximately 120 13-3703/93915 MEDIAN Page 1 of 12 NOW, THEREFORE, TRUSTOR HEREBY irrevocably grants, transfers and assigns, to Trustee, in trust, with power of sale of the Property, together with (a) all buildings, improvements and fixtures, now or hereafter placed thereon, it being understood and agreed that all classes of property attached or unattached used in connection herewith shall be deemed fixtures, (b) rents, issues and profits thereof, (c) any water rights and/or stock are appurtenant or pertain to said land, and (d) all sums of money payable on the purchase price of the Property secured by a lien thereon or payable under any agreement for the sale thereof, SUBJECT, HOWEVER, to the right, power and authority hereinafter given to and conferred upon Beneficiary to collect and apply such rents, issues and profits, and all sums of money payable on the purchase price of the Property secured by a lien thereon or payable under any agreement. A. FOR THE PURPOSE OF SECURING: 1. Payment of the indebtedness evidenced by a promissory note executed by Trustor on , 20_ (the "Note"). The Amount of the indebtedness is the "Transfer Price" of the Property, less the "Affordable Housing Cost." The calculation of the Amount of the indebtedness is set forth with specificity in the Note, which is on file with the Economic Development Department of the City of Huntington Beach. 2. Performance of each and every obligation, covenant, promise and agreement of the Resale Restrictions, as amended by this Deed of Trust. B. TO PROTECT THE SECURITY OF THIS DEED OF TRUST, TRUSTOR AGREES: 1. Trustor agrees for itself, and its successors and assigns, and every successor to Trustor's interest in the Property, or any part thereof that for sixty (60) years from the date this Deed of Trust is recorded (the "Expiration Date"), to perform all obligations due under the Resale Restrictions, as those obligations are restated and modified as set forth below'. (a) The Property shall only be owned and occupied by persons or families of "Median-Income." "Median-Income" shall mean persons or families earning one hundred percent (100%) or less of Orange County median income, adjusted for appropriate family size. (b) The Property may only be sold at an "Affordable Housing Cost" to households of"Median-income," as those terms are defined in current Affordable Housing Regulations as adopted by the City of Huntington Beach. Generally, those Regulations define Affordable Housing Cost to mean that purchase price which would result in monthly housing payments which do not exceed Thirty-Five Percent (35%) of One Hundred Percent (100%) of the current Orange County monthly median income for a household equal to the number of bedrooms in the unit plus one (1) person. In determining monthly housing payments, the City will assume principal and interest payments on a conventional home mortgage after paying a ten percent (10%) down payment. The mortgage interest rate will be the prevailing Fannie Mae thirty (30) year mortgage rate, or a City-selected equivalent. Monthly housing costs will also include homeowner's association dues, utilities, homeowner's insurance, maintenance costs and property taxes. 13-3703/93915 MEDIAN Page 2 of 12 (c) The Trustor shall further comply with the Affordable Housing Guidelines promulgated by the City for purposes of administering the Affordable Housing Program of the City of Huntington Beach. (d) No transfer of the Property shall occur until the City of Huntington Beach determines (a) that the proposed purchaser intends to occupy the Property as the proposed purchaser's principal residence, (b) that the proposed purchaser is a person or family of Median Income, (c) that the proposed transfer occurs at an Affordable Housing Cost. The City of Huntington Beach shall not be obligated to approve a transfer until and unless the proposed purchaser has submitted to the City of Huntington Beach such information and completed such forms as the City of Huntington Beach shall request to certify the proposed purchaser's intent with respect to its residency of the Property and its gross income, and the proposed purchaser has submitted an affidavit disclosing and certifying the amount of the proposed purchase price. Prior to conveyance of the Property, each approved purchaser shall submit to the City of Huntington Beach an executed disclosure statement which certifies that the purchaser is aware that the purchaser may only sell the unit at an Affordable Housing Cost to a Median Income person or family, that the maximum permitted sales price may be less than fair market value and that the unit must be owner-occupied at all times and cannot be rented or leased. TRUSTOR AND EACH SUCCESSOR, HEIR OR ASSIGN OF TRUSTOR UNDERSTANDS THAT THE DETERMINATION OF THE AFFORDABLE HOUSING COST CAN BE MADE ONLY AT THE TIME OF THE PROPOSED TRANSFER, TAKING INTO CONSIDERATION INTEREST RATES, THE TERMS OF SALE OFFERED TO AND THE ECONOMIC CIRCUMSTANCES OF THE PROPOSED PURCHASER AND OTHER FACTORS THAT CANNOT BE ACCURATELY PREDICTED, AND THAT THE TRANSFER PRICE PERMITTED HEREUNDER MAY BE LESS THAN THE FAIR MARKET VALUE OF THE PROPERTY AND MAY NOT INCREASE OR DECREASE IN THE SAME MANNER AS OTHER SIMILAR REAL PROPERTY WHICH IS NOT ENCUMBERED BY THIS RESTRICTION. TRUSTOR AND EACH SUCCESSOR, HEIR OR ASSIGN OF TRUSTOR FURTHER ACKNOWLEDGES THAT AT ALL TIMES IN SETTING THE TRANSFER PRICE THE PRIMARY OBJECTIVE OF THE BENEFICIARY AND THIS DEED OF TRUST IS TO PROVIDE HOUSING TO ELIGIBLE PERSONS OR FAMILIES AT AN AFFORDABLE HOUSING COST. Trustor Initials Trustor Initials (e) The City of Huntington Beach may impose any conditions on the approval of any transfer of the Property as it determines are reasonably necessary for the effective administration of its Affordable Housing Program. 13-3703/93915 MEDIAN Page 3 of 12 (f) The Covenants contained in this Section 1 shall run with the land and shall automatically terminate and be of no further force or effect sixty (60) years from the date this Deed of Trust is recorded, which date is approximately 2. Trustor covenants by and for itself, its successors and assigns, and all persons claiming under or through them that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the said property, nor shall Trustor itself or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in said property. Trustor and its successors and assigns, shall refrain from restricting the rental or lease (if permitted by Trustor) or sale of said property on the basis of race, color, religion, sex, marital status, national origin or ancestry of any person. All such deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: (a) In deeds: "The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee himself or herself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessee or vendees in the land herein conveyed. The foregoing covenants shall run with the land." (b) In leases: "The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through him or her,. and this lease is made and accepted upon and subject to the following conditions: "There shall be no discrimination against or segregation of any person or group of persons on account of race, color, religion, sex, marital status, ancestry or national origin in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the premises herein leased nor shall the lessee himself or herself, or any person claiming under to through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sublessees, subtenants or vendees in the premises herein leased." (c) In contracts: "There shall be no discrimination against or segregation of, any person, or group of persons on account of race, color, religion, sex, marital status, 13-3703/93915 MEDIAN Page 4 of 12 ancestry or national origin, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the premises, nor shall the transferee himself or herself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessee or vendees of the premises." Nothing in this Section 2 shall be construed to authorize the rental or lease of the Property if such rental or lease is not otherwise permitted. The covenants in this paragraph shall run with the land in perpetuity. 3. No violation or breach of the covenants, conditions, restrictions, provisions or limitations contained in this Deed of Trust shall defeat or render invalid or in any way impair the lien or charge of any mortgage or deed of trust or security interest. 4. Trustor has made certain representations and disclosures as a requirement under the Resale Restrictions in order to induce Beneficiary to approve the sale of the Property to Trustor. In the event that Trustor has made any material misrepresentation or failed to disclose any material fact regarding said transaction, Beneficiary at its option and without notice, shall have the right to declare a material breach of the Resale Restrictions and the Note. Beneficiary may make a written declaration of default and demand for sale as in paragraph No. 6 herein set forth. Trustee, upon presentation to it of an affidavit signed by Beneficiary setting forth facts showing a default by Trustor under this paragraph, is authorized to accept as true and conclusive all facts and statements therein, and to act thereon hereunder. 5. All covenants without regard to technical classification or designation shall be binding for the benefit of the Beneficiary and such covenants shall run in favor of the Beneficiary for the entire period during which such covenants shall be in force and effect, without regard to whether the Beneficiary is or remains an owner of any land or interest therein to which such covenants relate. The Beneficiary, in the event of any breach of any such covenants, shall have the right to exercise all the rights and remedies and to maintain any action at law or suits in equity or other proper legal proceedings to enforce and to cure such breach to which it or any other beneficiaries of these covenants may be entitled during the term specified for such covenants, except the covenants against discrimination which may be enforced at law or in equity at any time in perpetuity. 6. Upon default by Trustor in the obligations of the Note, in the performance of any obligation under this Deed of Trust or under the terms of any First Lender's Deed of Trust which is or appears to be prior or superior to this Deed of Trust, Beneficiary may declare all sums secured by this Deed of Trust immediately due and payable by delivering to Trustee of a written declaration of default and demand for sale and a written notice of default and election to sell the Property. Default in the payment of any indebtedness secured by this Deed of Trust, in the obligation of the Note, or in the performance of any agreement under this Deed of Trust constitutes a default only under this Deed of Trust and the Note and does not constitute a default under the First Deed of Trust. Trustee shall cause the notice of default to be recorded. Beneficiary also shall deposit with Trustee this Deed of Trust, the Note, and all documents evidencing any additional expenditures secured by this Deed of Trust. After the lapse of such 13-3703/93915 MEDIAN Page 5 of 12 time as then may be required by law following recordation of such notice of default, and notice of sale having been given as then required by law, Trustee, without demand on Trustor, shall sell the Property at the time and place fixed by it in such notice of sale, whether as a whole or in separate parcels, and in such order as it may determine, at public auction to the highest bidder qualified under the Resale Restrictions and this Deed of Trust in lawful money of the United States, payable at time of sale. Trustee may postpone sale of all or any portion of the Property by public announcement at such time and place of sale, and from time to time thereafter may postpone such sale by public announcement at the time fixed by the preceding postponement. Trustee shall deliver to such purchaser its Deed conveying the Property so sold, but without any covenant or warranty, express or implied. The recital in such Deed of any matters of fact shall be conclusive of the truthfulness thereof. Any person, including Trustor, Trustee, or Beneficiary as hereinafter defined, may purchase at such sale. Trustee may also sell at any such sale and as part thereof any shares of corporate stock securing the obligations secured hereby, and Trustor waives demand and notice of such sale. (Beneficiary at its option may also foreclose on such shares by independent pledge sale, and Trustor waives demand and notice of such sale.) After deducting all costs, fees and expenses of Trustee, and of this Trust, including cost of evidence of title in connection with this sale, Trustee shall apply the proceeds of sale to payment, first; all sums expended under the teams hereof, not then repaid, with accrued interest at the rate then payable under the First Lender Deed of Trust secured hereby, and then of all other sums secured hereby, and, if there are any proceeds remaining, shall distribute them to the person or persons legally entitled thereto. 7. Trustor shall keep the Property in good condition and repair; to allow Beneficiary or its representatives to enter and inspect the Property at all reasonable times and access thereto, shall be permitted for that purpose; not to remove or demolish any building thereon; not to make alterations thereto without the consent of the Beneficiary; to suffer or permit no change in the general nature of the occupancy of the Property without Beneficiary's written consent; to complete or restore promptly and in good workmanlike manner any building which may be constructed, damaged or destroyed thereon, including, without restricting the generality of the foregoing, damage from termites and dry-rot; to pay when due all claims for labor performed and materials furnished in connection with the Property and not to permit any mechanic's lien against the Property; to comply with all laws affecting the Property or requiring any alterations or improvements to be made thereon; not to initiate or acquiesce in any zoning reclassification without Beneficiary's written consent; not to commit or permit waste thereon; not to commit, suffer or permit any act upon the Property in violation of the law; to paint, cultivate, irrigate, fertilize, fumigate, prune, and do all other acts that from the character or use of the Property may be reasonably necessary; and to promptly pay all amounts due others upon agreements of lease or conditional sale of all fixtures, furnishings and equipment located thereon. 8. Trustor shall provide, and maintain in force at all times with respect to the Property, fire and other types of insurance as may be required by Beneficiary. All of such insurance shall have a loss payable endorsement in favor of Beneficiary, shall be for a term and in form, content, amount and in such companies as may be satisfactory to Beneficiary, and the policies therefore shall be delivered to and remain in possession of Beneficiary as further security for the faithful performance of these trusts. At least thirty (30) days prior to the 13-3703/93915 MEDIAN Page 6 of 12 expiration of any such insurance policy, a policy or policies renewing or extending such expiring insurance shall be delivered to Beneficiary together with written evidence showing payment of the premium therefore and, in the event any such insurance policy and evidence of the payment of the premium therefore are not so delivered by Trustor to Beneficiary, Trustor by executing this Deed of Trust specifically requests Beneficiary to obtain such insurance and Beneficiary, without obligation to do so, without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof, may obtain such insurance through or from any insurance agency or company acceptable to it, pay the premium thereof, and may add the amount thereof to the indebtedness secured hereby, which amount shall bear a like rate of interest. Beneficiary may furnish to any insurance agency or company, or any other person, any information contained in or extracted from any insurance policy delivered to Beneficiary pursuant hereto and any information concerning the loan secured hereby. Neither Trustee nor Beneficiary shall be responsible for such insurance or for the collection of any insurance monies, or for any insolvency of any insurer or insurance underwriter. In case of insurance loss, Beneficiary is hereby authorized either (a) to settle and adjust any claim under the insurance policies provided for in this document without the consent of the Trustor, or (b) to allow Trustor to agree with the insurance company or companies on the amount to be paid upon the loss. In either case, the Beneficiary is authorized to collect and make receipt of any such insurance money. If Trustor is obligated to restore or replace the damaged or destroyed buildings or improvements under the terms of any lease or leases which are or may be prior to the lien of this Deed of Trust and such damage or destruction does not result in cancellation or termination of such lease, such proceeds, after deducting therefrom any expenses incurred in the collection thereof, shall be used to reimburse the Trustor for the cost of rebuilding or restoring the buildings or improvements on said premises. In all other cases, such insurance proceeds shall either be applied for the cost of the rebuilding or restoring the buildings or improvements on said premises. Such buildings and improvements shall be so restored or rebuilt as to be of at least equal value and substantially the same character as prior to the damage or destruction, and shall be in a condition satisfactory to Beneficiary. Such application or release shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. Any and all unexpired insurance shall inure to the benefit of, and pass to the purchaser of, the property conveyed at any Trustee sale held hereunder. 9. Trustor shall pay: (a) at least ten (10) days before delinquency, all general and special City and County taxes, and all assessments on appurtenant water stock, affecting the Property, (b) when done, all special assessments for public improvements, without permitting any improvement bond to issue for any special assessment, (c) when done, all encumbrances, charges and liens, with interest, on the Property, or any part thereof, which are or appears to be prior to superior hereto, (d) if the security of this Deed of Trust is leasehold estate, to make any payment or do any act required of the Lessee or its successor in interest under the terms of the instrument or instruments creating said leasehold, (e) all costs, fees and expenses of this trust, (f) for any statement regarding the obligation secured hereby any amount demanded by Beneficiary not to exceed the maximum allowed by law thereof at the time when such request is made, (g) such other charges for services rendered by Beneficiary and furnished at Trustor's request or that of any successor in interest to Trustor as the Beneficiary may deem reasonable. 13-3703/93915 MEDIAN Page 7 of 12 10. Should Trustor fail to make any payment or do any act as provided in this Deed of Trust, the Beneficiary or Trustee, but without obligation to do so and without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof, may (a) make or do the same in such manner and to such extent as either may deem necessary to protect the security hereof, Beneficiary or Trustee being authorized to enter upon the Property for such purposes, (b) commence, appear in, or defend any action or proceeding purporting to affect the security hereof or the property covered by this Deed of Trust, or the rights or powers of Beneficiary or Trustee, (c) pay, purchase, contest or compromise any encumbrance, charge or lien, which in the judgment of either is or appears to be prior or superior hereto, and (d) in exercising any such powers, pay necessary expenses, employ counsel and pay his reasonable fees. Trustor agrees to repay any amount so expended on demand of Beneficiary, and any amount so expended may be added by Beneficiary to the indebtedness secured hereby and shall bear a like rate of interest. 11. Trustor shall appear in and defend any action or proceeding purporting to affect the security hereof or the Property which is covered by this Deed of Trust, or the rights or powers of Beneficiary or Trustee, and whether or not Trustor so appears or defends, to pay all costs and expenses, including cost of evidence of title and attorney's fees in a reasonable sum, in any such action or proceeding in which Beneficiary or Trustee may appear by virtue of being made a party defendant or otherwise irrespective of whether the interest of Beneficiary or Trustee in the Property is directly questioned by such action, including any action for the condemnation or partition of said premises, and in any suit brought by Beneficiary to foreclose this Deed of Trust. 12. Trustor shall pay immediately and without demand, all sums expended under the terms of this Deed of Trust by Beneficiary or Trustee, with interest from the date of expenditure at the rate which the principal obligation secured hereby bears at the time such payment is made, and the repayment of such sums shall be secured hereby. 13. Should Trustor or any successor in interest to Trustor in the Property drill or extract, or enter into a lease for drilling or extraction of oil, gas or other hydrocarbon substances or any mineral of any kind or character, or sell, convey, further encumber, or alienate the Property, or any party thereof, or any interest therein, or be divested of his title or any interest therein in any manner or way, whether voluntarily or involuntarily, Beneficiary shall have the right, at its option, to declare any obligations secured hereby irrespective of the maturity date specified in any Note evidencing the same, immediately due and payable, and no waiver of this right shall be effective unless in writing. 14. Any award, settlement or damages for injury or damages to the Property, or in construction with the transaction financed by such loan, and any award of damages in connection with any condemnation for public use of or injury to the Property, or any part thereof, is hereby assigned and shall be paid to Beneficiary, who may apply or release such monies received by it in such manner and with the same effect as above provided for the disposition of proceeds of fire or other insurance. 15. By accepting payment of any sums secured by this Deed of Trust after its due date, or by making any payment, performing any act on behalf of Trustor, that Trustor was obligated hereunder, but failed, to make, or perform, or by adding any payment so made by 13-3703/93915 MEDIAN Page 8 of 12 Beneficiary to the indebtedness secured hereby, Beneficiary does not waive its right either to require prompt payment when due of all other sums so secured or to declare a default for failure so to pay. 16. At any time, or from time to time, without liability of the Beneficiary or Trustee thereof, and without notice, upon written request of Beneficiary and presentation of this Deed of Trust and the Note secured hereby for endorsement, and without affecting the personal liability of any person for payment of the indebtedness secured hereby, or the lien of the Deed of Trust upon the remainder of the Property for the full amount of the indebtedness then or thereafter secured hereby, or the rights or powers of Beneficiary or the Trustee with respect to the remainder of the Property, Trustee may: (a) reconvey any part of the Property, (b) consent to the making of any map or plat thereof; (c)join in granting any easement thereon, (d)join in any agreement subordinating the lien or charge hereof. 17. The lien hereof shall remain in full force and effect during any postponement or extension of time of payment of the indebtedness secured hereby, or any part thereof. 18. As additional security, Trustor irrevocably assigns to Beneficiary the rents, issues, and profits of the Property for the purposes and upon the terms and conditions set forth below. This assignment shall not impose upon Beneficiary any duty to produce rents from the property affected by this Deed of Trust, or cause Authority to be (a) "mortgages in possession" for any purpose; (b) responsible for performing any of the obligations of the lessor under any lease; or (c) responsible for any waste committed by lessees or any other parties, for any dangerous or defective condition of the property affected by this Deed of Trust, or for any negligence in the management, upkeep, or control of such rights to rents, issues and profits is not contingent upon, and may be exercised without possession of, the property affected by this Deed of Trust. Beneficiary confers upon Trustor a license ("License") to collect and retain the rents, issues and profits of the property affected by this Deed of Trust as they become due and payable, until the occurrence of a default hereunder. Upon such default, the License shall be automatically revoked and Beneficiary may collect and retain the rents, issues and profits without notice and without taking possessions of the property affected by this Deed of Trust. This right to collect rents, issues and profits shall not grant to Beneficiary or Trustee the right to possession, except as otherwise provided herein; and neither said right, nor termination of the License, shall impose upon Beneficiary or Trustee the duty to produce rents, issues or profits or maintain all or any part of the Property affected by this Trust Deed. If Trustor shall default as aforesaid, Trustor's right to collect any such money shall cease and Beneficiary shall have the right, with or without taking possession of the property affected hereby, to collect all rents, issues, royalties and profits and shall be authorized to, and may, without notice and irrespective of whether declaration of default has been delivered to Trustee and without regard to the adequacy of the security for the indebtedness secured hereby, either personally or by attorney or agent without bringing any action or proceeding, or by receiver to be appointed by the Court, enter into possession and hold, occupy, possess and enjoy the Property, make, cancel, enforce and modify leases, obtain and eject tenants, and set and modify rents and terms of rents, and to sue, and to take, receive and collect all or any part of the said rents, issues, and profits of the property affected hereby, and after paying such costs 1 3-3 70 319 39 1 5 MEDIAN Page 9 of 12 of maintenance, operation of the Property, and of collection including reasonable attorneys' fees, as in its judgment it may deem proper, to apply the balance upon any indebtedness then secured hereby, the rents, issues, royalties and profits of the Property being hereby assigned to Beneficiary for said purposes. The acceptance of such rents, issues, royalties and profits shall not constitute a waiver of any other right which Trustee or Beneficiary may enjoy under this Deed of Trust or under the laws of California. Failure of or discontinuance by Beneficiary at any time, or from time to time, to collect any such rents, issues, royalties or profits shall not in any manner affect the subsequent enforcement by Beneficiary of the right, power and authority to collect the same. The receipt and application by said Beneficiary of all such rents, issues, royalties and profits pursuant hereto, after execution and delivery of declaration of default and demand for sale as hereinafter provided, or during the pendency of Trustee's sale proceedings hereunder, shall not cure such breach or default nor affect sale proceedings, or any sale made pursuant thereto, but such rents, issues, royalties and profits, less all costs of operation, maintenance, collection and reasonable attorneys' fees, when received by Beneficiary, shall be applied in reduction of the indebtedness secured hereby, from time to time, in such order as Beneficiary may determine. Nothing contained herein, nor the exercise of the right by Beneficiary to collect, shall be, or be construed to be, an affirmation by Beneficiary of any tenancy, lease or option, nor an assumption of liability under, nor subordination of the lien or charge of this Deed of Trust to, any such tenancy, lease or option. 19. If the security of this Deed of Trust is a leasehold estate, the Trustor agrees that: (a) the term "Lease" as used herein shall mean the lease creating the "leasehold estate"' (b) Trustor shall not amend, change or modify his leasehold interest, or the Lease, or agree to do so, without the written consent of the Beneficiary; (c) Trustor will promptly advise Beneficiary regarding any notice, request or demand received by him from the lessor under the Lease and promptly furnish Beneficiary with a copy of any such notice, request or demand; (d) as long as any of the indebtedness secured hereby shall remain unpaid, unless the Beneficiary shall otherwise consent thereto in writing, the leasehold estate shall not merge with the fee title but shall always be kept separate and distinct, notwithstanding the union of said estates in any party; (e) Trustor agrees that it will promptly, strictly, and faithfully perform, fulfill, and comply with all covenants, agreements, terms, conditions and provisions under any lease affecting the premises and to neither do anything, nor to permit anything to be done which may cause modification or termination of any such lease or of the obligations of any lessee or person claiming through such lease or the rents provided for therein or the interest of the lessor or the Beneficiary therein or thereunder. Trustor further agrees he will not execute a Deed of Trust or mortgage which may be or become superior to any leasehold estate that is security for this Deed of Trust. In the event of a violation of any of the covenants set forth in this paragraph, Beneficiary shall have the right, at its option, to declare all sums secured hereby immediately due and payable. Consent to or waiver of one of said violations shall not be deemed to be a consent to or waiver of any other violation. If the security for this Deed of Trust is a leasehold estate, the term "property" as used in this Deed of Trust shall be deemed to mean the leasehold estate whenever the context so requires for the protection of the Beneficiary. 20. Trustor waives, to the fullest extent permissible by law, the right to plead any statute of limitations as a defense to any demand secured hereby. 13-3703/93915 MEDIAN Page 10 of 12 21. Beneficiary may, from time to time, by instrument in writing, substitute a successor or successors to any Trustee named herein or acting hereunder, which instrument, executed and acknowledged by Beneficiary and recorded in the office of the recorder of the county or counties where the Property is situated, shall be conclusive proof of property substitution of such successor Trustee or Trustees, who shall, without conveyances from the Trustee predecessor, succeed to all its title, estate, rights, powers and duties, including but not limited to the power to reconvey the whole or any part of the property covered by this Deed of Trust. Such instrument must contain the name of the original Trustor, Trustee and Beneficiary hereunder, the book and page where this Deed of Trust is recorded. If notice of default shall have been recorded, this power of substitution cannot be exercised until after the costs, fees and expenses of the then acting Trustee shall have been paid to such Trustee, who shall endorse receipt thereof upon such instrument. The procedures herein provided for substitution of Trustee shall not be exclusive of other provisions for substitution provided by law. 22. This Deed of Trust applies to, inures to the benefit of, and binds all parties hereto, their heirs, legatees, devisees, administrators, executors, successors and assigns. The term "Beneficiary" shall mean the owner and holder, including pledgee, of the Note secured hereby, whether or not names as Beneficiary herein. In this Deed of Trust, whenever the context so requires, the masculine gender includes the feminine and/or neuter, and the singular number includes the plural. 23. That in the event of a demand for, and the preparation and delivery of a written statement regarding the obligations secured by this Deed of Trust pursuant to Sections 2943 and 2954 of the Civil Code of California, Beneficiary shall be entitled to make a reasonable charge, not exceeding the maximum amount which is permitted by law at the time the statement is furnished. Beneficiary may also charge Trustor a reasonable fee for any other services rendered to Trustor or rendered in Trustor's behalf in connection with the Property of this Deed of Trust, including changing Beneficiary's records, pertaining to this Deed of Trust in connection with the transfer of the Property, or releasing an existing policy of fire insurance or other casualty insurance held by Beneficiary and replacing the same with another such policy. 24. Trustee accepts this Trust when this Deed of Trust, duly executed and acknowledged, is made a public record as provided by law. Trustee is not obligated to notify any party hereto of pending sale under any other Deed of Trust or of any action or proceeding in which Trustor, Beneficiary, or Trustee shall be a party unless brought by Trustee. 25. Any notice which any party hereto may desire or be required to give to the other party shall be in writing. The mailing thereof must be certified mail addressed to the Trustor at his address hereinabove set forth or to the Beneficiary at his office or at such other place as such parties hereto may designate in writing. [Balance of this page intentionally left blank] 13-3703/93915 MEDIAN Page 11 of 12 THE UNDERSIGNED TRUSTOR REQUESTS that a copy of any notice of default and of any notice of sale hereunder be mailed to him at his address hereinbefore set forth.. TRUSTOR Dated: , 20 By: HOUSING AUTHORITY OF THE CITY OF HUNTINGTON BEACH Dated: , 20 BY: Deputy Executive Director CITY OF HUNTINGTON BEACH Dated: , 20 BY: Assistant City Manager APPROVED AS TO FORM OFFICE OF HUNTINGTON BEACH CITY ATTORNEY By: Dated: , 20 Jennifer McGrath, City Attorney 13-3703/93915 MEDIAN Page 12 of 12 OFFICIAL BUSINESS ) Document entitled to free recording per ) Government Code §§ 6103 and 27383 Recording Requested By: Housing Authority ) of the City of Huntington Beach ) 2000 Main Street ) Huntington Beach, California 92648 ) Attn: Economic Development ) Dept./Housing Division ) SPACE ABOVE THIS LINE FOR RECORDER'S USE PROMISSORY NOTE TO SECURE AFFORDABILITY RESTRICTIONS ON TRANSFER OF PROPERTY (LOW-INCOME) THIS PROMISSORY NOTE (the "Note") is dated this day of , 20_ between (collectively, "Promissor") and the Housing Authority of the City of Huntington Beach ("Authority") with reference to the following facts: A. This Promissory Note is made in reference to that property in the City of Huntington Beach, County of Orange, State of California, with the street address Huntington Beach, California 92648, and the Assessor's Parcel No. and the condominium Plan Tract No. 16733, Phase 14, recorded on February 13, 2013 as Instrument No. 2013000091955 (the "Property"). B. An "Agreement Declaring Conditions, Covenants and Restrictions for Property" was recorded on , 20_, as Instrument Number , in the Office of the County Recorder of the County of Orange, California (the "Resale Restrictions"). Among other things, the Resale Restrictions limit the price that the Property may be sold to an "Affordable Housing Cost" to "Low Income Households," as those terms are defined in the Resale Restrictions, and further defined in the current Affordable Housing Regulations of the City of Huntington Beach and the Authority Deed of Trust referred to below. C. Concurrently with executing this Note, Promissor has executed a Deed of Trust securing and modifying the Resale Restrictions (the "Authority of Deed of Trust"). D. Pursuant to the Resale Restrictions, the City has approved the sale of the Property to Promissor at an Affordable Housing Cost. To insure that any further sale, transfer or assignment of the Property occurs with the City's approval and at an Affordable Housing Cost, the City has required as a condition of the Promissor's purchase of the Property that Promissor execute this Note. 1 3-3 70 319 391 5 LOW Page 1 of 4 AGREEMENT NOW, THEREFORE, the parties agree as follows: 1. Incorporation of Recitals. The recitals set forth above are incorporated by reference as though fully set forth herein. 2. Amount of the Note. The Amount of this Note is the "Transfer Price" of the Property, less the "Affordable Housing Cost." The Transfer Price shall be determined according to the circumstances that cause the Amount of the Note to become due pursuant to Section 3 of this Note. In the case of the sale of the Property without the City's consent, the Transfer Price shall be the market sales price. In the case of the financing or refinancing of the Property without the City's consent, the Transfer Price shall be the loan amount in excess of the last loan balance on the First Mortgage that the City previously approved. In all other cases, the Transfer Price shall be the fair market value of the Property as established by the Director of Economic Development of the City pursuant to an appraisal. The term "Affordable Housing Cost" shall be defined according to the current Affordable Housing Regulations as adopted by the City of Huntington Beach. Promissor promises to pay the Amount of this Note when due to the Housing Authority at 2000 Main Street, P.O. Box 190, Huntington Beach, California 92648, or at such other address as Authority may direct from time to time in writing. All sums hereunder shall be payable in lawful money of the United States of America and all sums shall be credited first to interest then due and the balance to principal. 3. Due on Sale, Transfer or Refinancing. Promissor agrees to notify the Authority not less than thirty (30) days prior to (i) the sale or transfer of the Property or (ii) any financing or refinancing of the Property. This Note shall be due and payable upon (i) such sale or transfer without the City's consent, (ii) the financing or refinancing of the Property without the City's consent, (iii) Promissor is no longer an occupant of the Property, or (iv) Promissor is in material default of any other obligation under the Resale Restrictions, or the Authority Deed of Trust. 4. Expiration of the Note Obligation. In the event Promissor does not sell or transfer the Property, does not fail to occupy the Property, does not refinance, or is not in material breach of any other provision of the Resale Restrictions or the Agency Deed of Trust before the Sixtieth anniversary of the date of this Note, Promissor shall have no obligation to pay the Note Amount to Authority upon later sale, transfer or refinancing of the Property. 5. Default. The entire unpaid Amount of this Note shall be due and payable in full in the event of a default. The following shall be deemed to be an event of default: a. Failure of Promissor to pay any real property taxes or insurance premiums on the Property as they become due; or 13-3703/93915 LOW Page 2 of 4 b. Any material breach of the Resale Restrictions or the Authority Deed of Trust, following the Authority giving notice of the breach and an opportunity to cure; or C. Failure of Promissor to pay the Note Amount when due. 6. This Note is secured by a Deed of Trust, dated , to the City of Huntington Beach, as Trustee, executed by Promissor in favor of the Authority. 7. Notice. All payments, notices, consents, waivers and other communications under this Agreement must be in writing and shall be deemed to have been given when (a) delivered by hand, or, (b) when received by the addressee, if sent by a nationally recognized overnight delivery service (receipt requested), in each case addressed as set forth below: If to PROMISSOR: If to AGENCY: Housing Authority of the City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attention: City Clerk and, Economic Development Director City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 8. Governing Law. This Agreement is governed by and shall be construed in accordance with the laws of the State of California without giving effect to the conflict of laws principles thereof. The parties agree to personal jurisdiction in the State Courts in Orange County, California and specifically waive any claims of forum non conviens. 9. Modification. This Agreement shall not be amended or modified, except in writing, signed by both parties. 10. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the successors and assigns under this Note. This Note shall not be assigned without the express written consent of Agency. Dated: 20 By: 1 3-3 70 319 39 1 5 LOW Page 3 of 4 HOUSING AUTHORITY OF THE CITY OF HUNTINGTON BEACH Dated: , 20 By: Deputy Executive Director APPROVED AS TO FORM OFFICE OF HUNTINGTON BEACH CITY ATTORNEY Dated: , 20 By: Jennifer McGrath, City Attorney 13-3703/93915 LOW Page 4 of 4 OFFICIAL BUSINESS ) Document entitled to free recording per Government ) Code Sections 6103 and 27383 ) Recording Requested By: ) Housing Authority of the City of Huntington Beach ) 2000 Main Street ) Huntington Beach, California 92648 ) Attn: Economic Development Dept./Housing Division ) SPACE ABOVE THIS LINE FOR RECORDER'S USE DEED OF TRUST WITH ASSIGNMENTS OF RENTS TO SECURE AFFORDABILITY RESTRICTIONS ON TRANSFER OF PROPERTY (LOW-INCOME) THIS DEED OF TRUST is made this day of 20_, by and between whose address is Huntington Beach, California 92648 (collectively, the "Trustor") and the CITY OF HUNTINGTON BEACH, a municipal corporation (the "Trustee"), and the HOUSING AUTHORITY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic (the "Beneficiary"), whose address is 2000 Main Street, Huntington Beach, California 92648, with reference to the following facts: A. This Deed of Trust is made in reference to that property in the City of Huntington Beach, County of Orange, State of California, described legally in the Legal Description attached hereto as Exhibit "A" and incorporated herein with the street address Huntington Beach, California 92648 and the Assessor's Parcel No. and the Plan Tract No. 16733, Phase 14, recorded on February 13, 2013 as Instrument No. 2013000091955 (the "Property"). B. An "Agreement Declaring Conditions, Covenants and Restrictions for Property" was recorded on , 20_, as Instrument Number , in the Office of the County Recorder of the County of Orange, California (the "Resale Restrictions"). Among other things, the Resale Restrictions limit the price that the Property may be sold to an "Affordable Housing Cost" to "Low Income Households," as those terms are defined in the Resale Restrictions, and further defined in the current affordable housing regulations of the City of Huntington Beach and this Deed of Trust. C. Pursuant to this Deed of Trust. the Resale Restrictions as applied to the Property are extended to expire sixty (60) years from the date this Deed of Trust is recorded (the "Expiration Date"), which date is approximately 20_ 13-3703193915 LOW Page 1 of 12 NOW, THEREFORE, TRUSTOR HEREBY irrevocably grants, transfers and assigns, to Trustee, in trust, with power of sale of the Property, together with (a) all buildings, improvements and fixtures, now or hereafter placed thereon, it being understood and agreed that all classes of property attached or unattached used in connection herewith shall be deemed fixtures, (b) rents, issues and profits thereof, (c) any water rights and/or stock are appurtenant or pertain to said land, and (d) all sums of money payable on the purchase price of the Property secured by a lien thereon or payable under any agreement for the sale thereof, SUBJECT, HOWEVER, to the right, power and authority hereinafter given to and conferred upon Beneficiary to collect and apply such rents, issues and profits, and all sums of money payable on the purchase price of the Property secured by a lien thereon or payable under any agreement. A. FOR THE PURPOSE OF SECURING: 1. Payment of the indebtedness evidenced by a promissory note executed by Trustor on , 20_ (the "Note"). The Amount of the indebtedness is the "Transfer Price" of the Property, less the "Affordable Housing Cost." The calculation of the Amount of the indebtedness is set forth with specificity in the Note, which is on file with the Economic Development Department of the City of Huntington Beach. 2. Performance of each and every obligation, covenant, promise and agreement of the Resale Restrictions, as amended by this Deed of Trust. B. TO PROTECT THE SECURITY OF THIS DEED OF TRUST, TRUSTOR AGREES- 1. Trustor agrees for itself, and its successors and assigns, and every successor to Trustor's interest in the Property, or any part thereof that for sixty (60) years from the date this Deed of Trust is recorded (the "Expiration Date"), to perform all obligations due under the Resale Restrictions, as those obligations are restated and modified as set forth below: i (a) The Property shall only be owned and occupied by persons or families of "Low-Income." "Low-Income" shall mean persons or families earning not more than eighty percent (80%) of the Orange County median income, adjusted for appropriate family size. (b) The Property may only be sold at an "Affordable Housing Cost" to households of"Low-Income," as those terms are defined in current Affordable Housing Regulations as adopted by the City of Huntington Beach. Generally, those Regulations define Affordable Housing Cost to mean that purchase price which would result in monthly housing payments which do not exceed Thirty-Five Percent (35%) of Eighty Percent (80%) of the current Orange County monthly median income for a household equal to the number of bedrooms in the unit plus one (1) person. In determining monthly housing payments, the City will assume principal and interest payments on a conventional home mortgage after paying a ten percent (10%) down payment. The mortgage interest rate will be the prevailing Fannie Mae thirty (30) year mortgage rate, or a City-selected equivalent. Monthly housing costs will also include homeowner's association dues, utilities, homeowner's insurance, maintenance costs and property taxes. 13-3703/93915 LOW Page 2 of 12 (c) The Trustor shall further comply with the Affordable Housing Guidelines promulgated by the City for purposes of administering the Affordable Housing Program of the City of Huntington Beach. (d) No transfer of the Property shall occur until the City of Huntington Beach determines (a) that the proposed purchaser intends to occupy the Property as the proposed purchaser's principal residence, (b) that the proposed purchaser is a person or family of Low Income, (c) that the proposed transfer occurs at an Affordable Housing Cost. The City of Huntington Beach shall not be obligated to approve a transfer until and unless the proposed purchaser has submitted to the City of Huntington Beach such information and completed such forms as the City of Huntington Beach shall request to certify the proposed purchaser's intent with respect to its residency of the Property and its gross income, and the proposed purchaser has submitted an affidavit disclosing and certifying the amount of the proposed purchase price. Prior to conveyance of the Property, each approved purchaser shall submit to the City of Huntington Beach an executed disclosure statement which certifies that the purchaser is aware that the purchaser may only sell the unit at an Affordable Housing Cost to a Low Income person or family, that the maximum permitted sales price may be less than fair market value and that the unit must be owner-occupied at all times and cannot be rented or leased. TRUSTOR AND EACH SUCCESSOR, HEIR OR ASSIGN OF TRUSTOR UNDERSTANDS THAT THE DETERMINATION OF THE AFFORDABLE HOUSING COST CAN BE MADE ONLY AT THE TIME OF THE PROPOSED TRANSFER, TAKING INTO CONSIDERATION INTEREST RATES, THE TERMS OF SALE OFFERED TO AND THE ECONOMIC CIRCUMSTANCES OF THE PROPOSED PURCHASER AND OTHER FACTORS THAT CANNOT BE ACCURATELY PREDICTED, AND THAT THE TRANSFER PRICE PERMITTED HEREUNDER MAY BE LESS THAN THE FAIR MARKET VALUE OF THE PROPERTY AND MAY NOT INCREASE OR DECREASE IN THE SAME MANNER AS OTHER SIMILAR REAL PROPERTY WHICH IS NOT ENCUMBERED BY THIS RESTRICTION. TRUSTOR AND EACH SUCCESSOR, HEIR OR ASSIGN OF TRUSTOR FURTHER ACKNOWLEDGES THAT AT ALL TIMES IN SETTING THE TRANSFER PRICE THE PRIMARY OBJECTIVE OF THE BENEFICIARY AND THIS DEED OF TRUST IS TO PROVIDE HOUSING TO ELIGIBLE PERSONS OR FAMILIES AT AN AFFORDABLE HOUSING COST. Trustor Initials Trustor Initials (e) The City of Huntington Beach may impose any conditions on the approval of any transfer of the Property as it determines are reasonably necessary for the effective administration of its Affordable Housing Program. 13-3703/93915 LOW Page 3 of 12 (f) The Covenants contained in this Section 1 shall run with the land and shall automatically terminate and be of no further force or effect sixty (60) years from the date this Deed of Trust is recorded, which date is approximately 2. Trustor covenants by and for itself, its successors and assigns, and all persons claiming under or through them that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the said property, nor shall Trustor itself or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in said property. Trustor and its successors and assigns, shall refrain from restricting the rental or lease (if permitted by Trustor) or sale of said property on the basis of race, color, religion, sex, marital status, national origin or ancestry of any person. All such deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: (a) In deeds: "The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee himself or herself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessee or vendees in the land herein conveyed. The foregoing covenants shall run with the land." (b) In leases: "The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through him or her,. and this lease is made and accepted upon and subject to the following conditions: "There shall be no discrimination against or segregation of any person or group of persons on account of race, color, religion, sex, marital status, ancestry or national origin in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the premises herein leased nor shall the lessee himself or herself, or any person claiming under to through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sublessees, subtenants or vendees in the premises herein leased." (c) In contracts: "There shall be no discrimination against or segregation of, any person, or group of persons on account of race, color, religion, sex, marital status, 1 3-370 319 39 1 5 LOW Page 4 of 12 ancestry or national origin, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the premises, nor shall the transferee himself or herself or any person claiming under or through him or her, establish or permit any.such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessee or vendees of the premises." Nothing in this Section 2 shall be construed to authorize the rental or lease of the Property if such rental or lease is not otherwise permitted. The covenants in this paragraph shall run with the land in perpetuity. 3. No violation or breach of the covenants, conditions, restrictions, provisions or limitations contained in this Deed of Trust shall defeat or render invalid or in any way impair the lien or charge of any mortgage or deed of trust or security interest. 4. Trustor has made certain representations and disclosures as a requirement under the Resale Restrictions in order to induce Beneficiary to approve the sale of the Property to Trustor. In the event that Trustor has made any material misrepresentation or failed to disclose any material fact regarding said transaction, Beneficiary at its option and without notice, shall have the right to declare a material breach of the Resale Restrictions and the Note. Beneficiary may make a written declaration of default and demand for sale as in paragraph No. 6 herein set forth. Trustee, upon presentation to it of an affidavit signed by Beneficiary setting forth facts showing a default by Trustor under this paragraph, is authorized to accept as true and conclusive all facts and statements therein, and to act thereon hereunder. 5. All covenants without regard to technical classification or designation shall be binding for the benefit of the Beneficiary and such covenants shall run in favor of the Beneficiary for the entire period during which such covenants shall be in force and effect, without regard to whether the Beneficiary is or remains an owner of any land or interest therein to which such covenants relate. The Beneficiary, in the event of any breach of any such covenants, shall have the right to exercise all the rights and remedies and to maintain any action at law or suits in equity or other proper legal proceedings to enforce and to cure such breach to which it or any other beneficiaries of these covenants may be entitled during the term specified for such covenants, except the covenants against discrimination which may be enforced at law or in equity at any time in perpetuity. 6. Upon default by Trustor in the obligations of the Note, in the performance of any obligation under this Deed of Trust or under the terms of any First Lender's Deed of Trust which is or appears to be prior or superior to this Deed of Trust, Beneficiary may declare all sums secured by this Deed of Trust immediately due and payable by delivering to Trustee of a written declaration of default and demand for sale and a written notice of default and election to sell the Property. Default in the payment of any indebtedness secured by this Deed of Trust, in the obligation of the Note, or in the performance of any agreement under this Deed of Trust constitutes a default only under this Deed of Trust and the Note and does not constitute a default under the First Deed of Trust. Trustee shall cause the notice of default to be recorded. Beneficiary also shall deposit with Trustee this Deed of Trust, the Note, and all documents evidencing any additional expenditures secured by this Deed of Trust. After the lapse of such 13-3703/93915 LOW Page 5 of 12 time as then may be required by law following recordation of such notice of default, and notice of sale having been given as then required by law, Trustee, without demand on Trustor, shall sell the Property at the time and place fixed by it in such notice of sale, whether as a whole or in separate parcels, and in such order as it may determine, at public auction to the highest bidder qualified under the Resale Restrictions and this Deed of Trust in lawful money of the United States, payable at time of sale. Trustee may postpone sale of all or any portion of the Property by public announcement at such time and place of sale, and from time to time thereafter may postpone such sale by public announcement at the time fixed by the preceding postponement. Trustee shall deliver to such purchaser its Deed conveying the Property so sold, but without any covenant or warranty, express or implied. The recital in such Deed of any matters of fact shall be conclusive of the truthfulness thereof. Any person, including Trustor, Trustee, or Beneficiary as hereinafter defined, may purchase at such sale. Trustee may also sell at any such sale and as part thereof any shares of corporate stock securing the obligations secured hereby, and Trustor waives demand and notice of such sale. (Beneficiary at its option may also foreclose on such shares by independent pledge sale, and Trustor waives demand and notice of such sale.)After deducting all costs, fees and expenses of Trustee, and of this Trust, including cost of evidence of title in connection with this sale, Trustee shall apply the proceeds of sale to payment, first; all sums expended under the teams hereof, not then repaid, with accrued interest at the rate then payable under the First Lender Deed of Trust secured hereby, and then of all other sums secured hereby, and, if there are any proceeds remaining, shall distribute them to the person or persons legally entitled thereto. 7. Trustor shall keep the Property in good condition and repair; to allow Beneficiary or its representatives to enter and inspect the Property at all reasonable times and access thereto, shall be permitted for that purpose; not to remove or demolish any building thereon; not to make alterations thereto without the consent of the Beneficiary; to suffer or permit no change in the general nature of the occupancy of the Property without Beneficiary's written consent; to complete or restore promptly and in good workmanlike manner any building which may be constructed, damaged or destroyed thereon, including, without restricting the generality of the foregoing, damage from termites and dry-rot; to pay when due all claims for labor performed and materials furnished in connection with the Property and not to permit any mechanic's lien against the Property; to comply with all laws affecting the Property or requiring any alterations or improvements to be made thereon; not to initiate or acquiesce in any zoning reclassification without Beneficiary's written consent; not to commit or permit waste thereon; not to commit; suffer or permit any act upon the Property in violation of the law; to paint, cultivate, irrigate, fertilize, fumigate, prune, and do all other acts that from the character or use of the Property may be reasonably necessary; and to promptly pay all amounts due others upon agreements of lease or conditional sale of all fixtures, furnishings and equipment located thereon. 8. Trustor shall provide, and maintain in force at all times with respect to the Property, fire and other types of insurance as may be required by Beneficiary. All of such insurance shall have a loss payable endorsement in favor of Beneficiary, shall be for a term and in form, content, amount and in such companies as may be satisfactory to Beneficiary, and the policies therefore shall be delivered to and remain in possession of Beneficiary as further security for the faithful performance of these trusts. At least thirty (30) days prior to the 13-3703/93915 LOW Page 6 of 12 expiration of any such insurance policy, a policy or policies renewing or extending such expiring insurance shall be delivered to Beneficiary together with written evidence showing payment of the premium therefore and, in the event any such insurance policy and evidence of the payment of the premium therefore are not so delivered by Trustor to Beneficiary, Trustor by executing this Deed of Trust specifically requests Beneficiary to obtain such insurance and Beneficiary, without obligation to do so, without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof, may obtain such insurance through or from any insurance agency or company acceptable to it, pay the premium thereof, and may add the amount thereof to the indebtedness secured hereby, which amount shall bear a like rate of interest. Beneficiary may furnish to any insurance agency or company, or any other person, any information contained in or extracted from any insurance policy delivered to Beneficiary pursuant hereto and any information concerning the loan secured hereby. Neither Trustee nor Beneficiary shall be responsible for such insurance or for the collection of any insurance monies, or for any insolvency of any insurer or insurance underwriter. In case of insurance loss, Beneficiary is hereby authorized either (a) to settle and adjust any claim under the insurance policies provided for in this document without the consent of the Trustor, or (b) to allow Trustor to agree with the insurance company or companies on the amount to be paid upon the loss. In either case, the Beneficiary is authorized to collect and make receipt of any such insurance money. If Trustor is obligated to restore or replace the damaged or destroyed buildings or improvements under the terms of any lease or leases which are or may be prior to the lien of this Deed of Trust and such damage or destruction does not result in cancellation or termination of such lease, such proceeds, after deducting therefrom any expenses incurred in the collection thereof, shall be used to reimburse the Trustor for the cost of rebuilding or restoring the buildings or improvements on said premises. In all other cases, such insurance proceeds shall either be applied for the cost of the rebuilding or restoring the buildings or improvements on said premises. Such buildings and improvements shall be so restored or rebuilt as to be of at least equal value and substantially the same character as prior to-the damage or destruction, and shall be in a condition satisfactory to Beneficiary. Such application or release shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. Any and all unexpired insurance shall inure to the benefit of, .and pass to the purchaser of, the property conveyed at any Trustee sale held hereunder. 9. Trustor shall pay: (a) at least ten (10) days before delinquency, all general and special City and County taxes, and all assessments on appurtenant water stock, affecting the Property, (b) when done, all special assessments for public improvements, without permitting any improvement bond to issue for any special assessment, (c) when done, all encumbrances, charges and liens, with interest, on the Property, or any part thereof, which are or appears to be prior to superior hereto, (d) if the security of this Deed of Trust is leasehold estate, to make any payment or do any act required of the Lessee or its successor in interest under the terms of the instrument or instruments creating said leasehold, (e) all costs, fees and expenses of this trust, (f) for any statement regarding the obligation secured hereby any amount demanded by Beneficiary not to exceed the maximum allowed by law thereof at the time when such request is made, (g) such other charges for services rendered by Beneficiary and furnished at Trustor's request or that 1 of any successor in interest to Trustor as the Beneficiary may deem reasonable. 13-3703193915 LOW Page 7 of 12 10. Should Trustor fail to make any payment or do any act as provided in this Deed of Trust, the Beneficiary or Trustee, but without obligation to do so and without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof, may (a) make or do the same in such manner and to such extent as either may deem necessary to protect the security hereof, Beneficiary or Trustee being authorized to enter upon the Property for such purposes, (b) commence, appear in, or defend any action or proceeding purporting to affect the security hereof or the property covered by this Deed of Trust, or the rights or powers of Beneficiary or Trustee, (c) pay, purchase, contest or compromise any encumbrance, charge or lien, which in the judgment of either is or appears to be prior or superior hereto, and (d) in exercising any such powers, pay necessary expenses, employ counsel and pay his reasonable fees. Trustor agrees to repay any amount so expended on demand of Beneficiary, and any amount so expended may be added by Beneficiary to the indebtedness secured hereby and shall bear a like rate of interest. 11. Trustor shall appear in and defend any action or proceeding purporting to affect the security hereof or the Property which is covered by this Deed of Trust, or the rights or powers of Beneficiary or Trustee, and whether or not Trustor so appears or defends, to pay all costs and expenses, including cost of evidence of title and attorney's fees in a reasonable sum, in any such action or proceeding in which Beneficiary or Trustee may appear by virtue of being made a party defendant or otherwise irrespective of whether the interest of Beneficiary or Trustee in the Property is directly questioned by such action, including any action for the condemnation or partition of said premises, and in any suit brought by Beneficiary to foreclose this Deed of Trust. 12. Trustor shall pay immediately and without demand, all sums expended under the terms of this Deed of Trust by Beneficiary or Trustee, with interest from the date of expenditure at the rate which the principal obligation secured hereby bears at the time such payment is made, and the repayment of such sums shall be secured hereby. 13. Should Trustor or any successor in interest to Trustor in the Property drill or extract, or enter into a lease for drilling or extraction of oil, gas or other hydrocarbon substances or any mineral of any kind or character, or sell, convey, further encumber, or alienate the Property, or any party thereof, or any interest therein, or be divested of his title or any interest therein in any manner or way, whether voluntarily or involuntarily, Beneficiary shall have the right, at its option, to declare any obligations secured hereby irrespective of the maturity date specified in any Note evidencing the same, immediately due and payable, and no waiver of this right shall be effective unless in writing. 14. Any award, settlement or damages for injury or damages to the Property, or in construction with the transaction financed by such loan, and any award of damages in connection with any condemnation for public use of or injury to the Property, or any part thereof, is hereby assigned and shall be paid to Beneficiary, who may apply or release such monies received by it in such manner and with the same effect as above provided for the disposition of proceeds of fire or other insurance. 15. By accepting payment of any sums secured by this Deed of Trust after its due date, or by making any payment, performing any act on behalf of Trustor, that Trustor was obligated hereunder, but failed, to make, or perform, or by adding any payment so made by 13-3703193915 LOW Page 8 of 12 Beneficiary to the indebtedness secured hereby, Beneficiary does not waive its right either to require prompt payment when due of all other sums so secured or to declare a default for failure so to pay. 16. At any time, or from time to time, without liability of the Beneficiary or Trustee thereof, and without notice, upon written request of Beneficiary and presentation of this Deed of Trust and the Note secured hereby for endorsement, and without affecting the personal liability of any person for payment of the indebtedness secured hereby, or the lien of the Deed of Trust upon the remainder of the Property for the full amount of the indebtedness then or thereafter secured hereby, or the rights or powers of Beneficiary or the Trustee with respect to the remainder of the Property, Trustee may: (a) reconvey any part of the Property, (b) consent to the making of any map or plat thereof; (c)join in granting any easement thereon, (d)join in any agreement subordinating the lien or charge hereof. 17. The lien hereof shall remain in full force and effect during any postponement or extension of time of payment of the indebtedness secured hereby, or any part thereof. 18. As additional security, Trustor irrevocably assigns to Beneficiary the rents, issues, and profits of the Property for the purposes and upon the terms and conditions set forth below. This assignment shall not impose upon Beneficiary any duty to produce rents from the property affected by this Deed of Trust, or cause Authority to be (a) "mortgages in possession"for any purpose; (b) responsible for performing any of the obligations of the lessor under any lease; or (c) responsible for any waste committed by lessees or any other parties, for any dangerous or defective condition of the property affected by this Deed of Trust, or for any negligence in the management, upkeep, or control of such rights to rents, issues and profits is not contingent upon, and may be exercised without possession of, the property affected by this Deed of Trust. Beneficiary confers upon Trustor a license ("License") to collect and retain the rents, issues and profits of the property affected by this Deed of Trust as they become due and payable, until the occurrence of a default hereunder. Upon such default, the License shall be automatically revoked and Beneficiary may collect and retain the rents, issues and profits without notice and without taking possessions of the property affected by this Deed of Trust. This right to collect rents, issues and profits shall not grant to Beneficiary or Trustee the right to possession, except as otherwise provided herein; and neither said right, nor termination of the License, shall impose upon Beneficiary or Trustee the duty to produce rents, issues or profits or maintain all or any part of the Property affected by this Trust Deed. If Trustor shall default as aforesaid, Trustor's right to collect any such money shall cease and Beneficiary shall have the right, with or without taking possession of the property affected hereby, to collect all rents, issues, royalties and profits and shall be authorized to, and may, without notice and irrespective of whether declaration of default has been delivered to Trustee and without regard to the adequacy of the security for the indebtedness secured hereby, either personally or by attorney or agent without bringing any action or proceeding, or by receiver to be appointed by the Court, enter into possession and hold, occupy, possess and enjoy the Property, make, cancel, enforce and modify leases, obtain and eject tenants; and set and modify rents and terms of rents, and to sue, and to take, receive and collect all or any part of the said rents, issues, and profits of the property affected hereby, and after paying such costs 13-3703/93915 LOW Page 9 of 12 of maintenance, operation of the Property, and of collection including reasonable attorneys' fees, as in its judgment it may deem proper, to apply the balance upon any indebtedness then secured hereby, the rents, issues, royalties and profits of the Property being hereby assigned to Beneficiary for said purposes. The acceptance of such rents, issues, royalties and profits shall not constitute a waiver of any other right which Trustee or Beneficiary may enjoy under this Deed of Trust or under the laws of California. Failure of or discontinuance by Beneficiary at any time, or from time to time, to collect any such rents, issues, royalties or profits shall not in any manner affect the subsequent enforcement by Beneficiary of the right, power and authority to collect the same. The receipt and application by said Beneficiary of all such rents, issues, royalties and profits pursuant hereto, after execution and delivery of declaration of default and demand for sale as hereinafter provided, or during the pendency of Trustee's sale proceedings hereunder, shall not cure such breach or default nor affect sale proceedings, or any sale made pursuant thereto, but such rents, issues, royalties and profits, less all costs of operation, maintenance, collection and reasonable attorneys' fees, when received by Beneficiary, shall be applied in reduction of the indebtedness secured hereby, from time to time, in such order as Beneficiary may determine. Nothing contained herein, nor the exercise of the right by Beneficiary to collect, shall be, or be construed to be, an affirmation by Beneficiary of any tenancy, lease or option, nor an assumption of liability under, nor subordination of the lien or charge of this Deed of Trust to, any such tenancy, lease or option. 19. If the security of this Deed of Trust is a leasehold estate, the Trustor agrees that: (a) the term "Lease" as used herein shall mean the lease creating the "leasehold estate"' (b) Trustor shall not amend, change or modify his leasehold interest, or the Lease, or agree to do so, without the written consent of the Beneficiary; (c) Trustor will promptly advise Beneficiary regarding any notice, request or demand received by him from the lessor under the Lease and promptly furnish Beneficiary with a copy of any such notice, request or demand; (d) as long as any of the indebtedness secured hereby shall remain unpaid, unless the Beneficiary shall otherwise consent thereto in writing, the leasehold estate shall not merge with the fee title but shall always be kept separate and distinct, notwithstanding the union of said estates in any party; (e) Trustor agrees that it will promptly, strictly, and faithfully perform, fulfill, and comply with all covenants, agreements, terms, conditions and provisions under any lease affecting the premises and to neither do anything, nor to permit anything to be done which may cause modification or termination of any such lease or of the obligations of any lessee or person claiming through such lease or the rents provided for therein or the interest of the lessor or the Beneficiary therein or thereunder. Trustor further agrees he will not execute a Deed of Trust or mortgage which may be or become superior to any leasehold estate that is security for this Deed of Trust. In the event of a violation of any of the covenants set forth in this paragraph, Beneficiary shall have the right, at its option, to declare all sums secured hereby immediately due and payable. Consent to or waiver of one of said violations shall not be deemed to be a consent to or waiver of any other violation. If the security for this Deed of Trust is a leasehold estate, the term "property" as used in this Deed of Trust shall be deemed to mean the leasehold estate whenever the context so requires for the protection of the Beneficiary. 20. Trustor waives, to the fullest extent permissible by law, the right to plead any statute of limitations as a defense to any demand secured hereby. 1 3-3 70 3193 91 5 LOW Page 10 of 12 21. Beneficiary may, from time to time, by instrument in writing, substitute a successor or successors to any Trustee named herein or acting hereunder, which instrument, executed and acknowledged by Beneficiary and recorded in the office of the recorder of the county or counties where the Property is situated, shall be conclusive proof of property substitution of such successor Trustee or Trustees, who shall, without conveyances from the Trustee predecessor, succeed to all its title, estate, rights, powers and duties, including but not limited to the power to reconvey the whole or any part of the property covered by this Deed of Trust. Such instrument must contain the name of the original Trustor, Trustee and Beneficiary hereunder, the book and page where this Deed of Trust is recorded. If notice of default shall have been recorded, this power of substitution cannot be exercised until after the costs, fees and expenses of the then acting Trustee shall have been paid to such Trustee, who shall endorse receipt thereof upon such instrument. The procedures herein provided for substitution of Trustee shall not be exclusive of other provisions for substitution provided by law. 22. This Deed of Trust applies to, inures to the benefit of, and binds all parties hereto, their heirs, legatees, devisees, administrators, executors, successors and assigns. The term "Beneficiary" shall mean the owner and holder, including pledgee, of the Note secured hereby, whether or not names as Beneficiary herein. In this Deed of Trust, whenever the context so requires, the masculine gender includes the feminine and/or neuter, and the singular number includes the plural. 23. That in the event of a demand for, and the preparation and delivery of a written statement regarding the obligations secured by this Deed of Trust pursuant to Sections 2943 and 2954 of the Civil Code of California, Beneficiary shall be entitled to make a reasonable charge, not exceeding the maximum amount which is permitted by law at the time the statement is furnished. Beneficiary may also charge Trustor a reasonable fee for any other services rendered to Trustor or rendered in Trustor's behalf in connection with the Property of this Deed of Trust, including changing Beneficiary's records, pertaining to this Deed of Trust in connection with the transfer of the Property, or releasing an existing policy of fire insurance or other casualty insurance held by Beneficiary and replacing the same with another such policy. 24. Trustee accepts this Trust when this Deed of Trust, duly executed and acknowledged, is made a public record as provided by law. Trustee is not obligated to notify any party hereto of pending sale under any other Deed of Trust or of any action or proceeding in which Trustor, Beneficiary, or Trustee shall be a party unless brought by Trustee. 25. Any notice which any party hereto may desire or be required to give to the other party shall be in writing. The mailing thereof must be certified mail addressed to the Trustor at his address hereinabove set forth or to the Beneficiary at his office or at such other place as such parties hereto may designate in writing. [Balance of this page intentionally left blank] 13-3703/93915 LOW Page 11 of 12 THE UNDERSIGNED TRUSTOR REQUESTS that a copy of any notice of default and of any notice of sale hereunder be mailed to him at his address hereinbefore set forth. TRUSTOR Dated: , 20 By: HOUSING AUTHORITY OF THE CITY OF HUNTINGTON BEACH Dated: , 20 BY: Deputy Executive Director CITY OF HUNTINGTON BEACH Dated: , 20 BY: Assistant City Manager APPROVED AS TO FORM OFFICE OF HUNTINGTON BEACH CITY ATTORNEY Dated: , 20 By. Jennifer McGrath, City Attorney 13-3703/93915 LOW Page 12 of 12 This Document was electronically recorded by City of Huntington Beach Recorded in Official Records, Orange County RECORDING REQUESTED BY: ) Hugh Nguyen, Clerk-Recorder } II9I II II oI IIIII II ISII IIII IlO EEN0 FEE 2013000305877 10:46am 05/21/13 AND WHEN RECORDED MAIL TO:) 10 402 Al2 28 0.00 0.00 0.00 0.00 81.00 0.00 0.00 0.00 City Clerk ) City of Huntington Beach ) 2000 Main Street } Huntington Beach, CA 92648 ) f 93� /a. L(N.OrS I8'04,Ab /.P9 (Space Above for Recorder's Use) This document is solely for the dkW bushessottheCltyofHun&Von AGREEMENT DECLARING CONDITIONS, COVENANTS ,as contempWed under AND RESTRICTIONS FOR PROPERTY Govwwnt should b9 re=d „ idd sde (RESALE RESTRICTIONS) This Agreement Declari g Conditions, Covenants and Restrictions for Property (the "Agreement") is made as of Wey'/ /Z-, 2013, by and between RP/PLC BLUE CANVAS, L.L.C., a Delaware limited liability company (the "Covenantor"), and THE CITY OF HUNTINGTON BEACH, a California municipal corporation (the "City"), and the HOUSING AUTHORITY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic (the "Authority"). Collectively, the City and Authority will be referred to as the "Covenantee". RECITALS A. Covenantor is the owner of record of that certain real property located in the City of Huntington Beach, County of Orange, State of California legally described in the attached Exhibit "A". B. On September 2, 2008, the City Council approved Tract No. 16733, as per map recorded as Instrument No. 2008000531659 in Book 897, Pages 10 through 14 of Miscellaneous Maps, Records of Orange County, California ("Project"). City imposed conditions of approval on the Project, requiring Covenantor to submit an Affordable Housing Agreement, in accordance with the Affordable Housing Program, for review by the Planning Department and approval by the City Attorney and acceptance by the City Council. The City further required that the plan shall provide ten percent (10%) of the total 201 units equaling 21 units to be restricted as set forth herein ("Restricted Units"), 3 of which are to be affordable housing for household earning less than 80% of the Orange County Median Income and 18 of which are to be affordable housing for households earning no more than 100% of the Orange County Median Income, in both cases for a period of sixty (60) years. The execution and recordation of this Agreement is intended to fully satisfy that condition. NO!!tl', THEREFORE, the parties hereto agree and covenant as follows: 1. Affordability Covenants. Covenantor agrees for itself and its successor and assigns, and every successor to Covenantor's interest in the Restricted Unit, or any part thereof, that the Project located at Newland Street and Noelle Drive, which consists of a total of 201 1 3-370319 391 9 1 residential condominium units, shall be designated as affordable and shall be held subject to this Agreement for sixty (60) years from the date of the close of escrow for the initial sale of each such Restricted Unit built in Tract No. 16733 as follows: (a) Eighteen (18) Restricted Units as further designated on Exhibit "B" attached hereto shall only be owned and occupied by "Median-Income Households", which shall mean persons or families earning not more than 100% of the Orange County median income, adjusted for household size appropriate for the property as determined by the Agency based on statistics published by the United States Department of Housing & Urban Development or established by the State of California, pursuant to Health and Safety Code Section 50093, or a successor statute. (b) These eighteen (18) Medium-Income Restricted Units shall only be sold at an "Affordable Housing Cost" to "Median-income Households." (c) Three (3) Restricted Units as further designated on Exhibit "B" attached hereto shall only be owned and occupied by "Low-income Households", which shall mean persons or families earning less than 80% of the Orange County median income, adjusted for household size appropriate for the property as determined by the Agency based on statistics published by the United States Department of Housing & Urban Development or established by the State of California, pursuant to Health and Safety Code Section 50093, or a successor statute. (d) These three (3) Low-income Restricted Units shall only be sold at an "Affordable Housing Cost" to "Low-income Households." (e) "Affordable Housing Cost" shall mean the permitted gross sales price of the Restricted Unit as set forth in the Affordable Housing Price/income Guidelines or successor guidelines published, from time to time, by the City for such purpose. (f) The term of this Agreement shall commence on the date of the initial sale of each Restricted Unit to a qualifying purchaser as evidenced by a deed recorded with the Orange County Recorder's Office and shall continue for sixty years from said date ("Affordability Period"). The covenant contained in this Section 1 shall run with the Restricted Unit and shall automatically terminate and be of no further force or effect upon the expiration of the Affordability Period. (g) Purchasers of the Restricted Units identified above shall enter into a promissory note and deed of trust in the forms attached hereto as Exhibit "C". 2. Transfer of Restricted Unit; Consent of Agency. During the Affordability Period no transfer of a Restricted Unit shall occur until the City determines: (a) that the proposed purchaser intends to occupy the Restricted Unit as the proposed purchaser's principal residence, (b) that the proposed purchaser is a "Low", or "Median" Income Household as provided in Section 1 above, and 13-3703/93919 2 (c) that the proposed transfer occurs at an Affordable Housing Cost. (d) The Restricted Units shall be constructed prior to or concurrent with the primary Project. (e) In the event that the Covenantor (including successors and assigns) desires to sell the Restricted Unit, Covenantor shall send written notice thereof to the City at the following address: City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attention: Director of Economic Development Within seven (7) days of receiving such notice, the City shall send Covenantor transfer application forms prepared by the City. Such forms shall contain a certification of the proposed purchaser's intent with respect to his/her/its residency of the Restricted Unit and his/her/its gross income, and an affidavit of the proposed purchaser disclosing and certifying the amount of the proposed purchase price. The City shall not be obligated to approve a transfer unless and until the proposed purchaser has submitted to the City such information and completed such forms. In the interest of expediting the close of escrow for such proposed transactions, the City shall reasonably approve or disapprove such submissions as soon as practicable after submission of such forms, and in no event later than fourteen (14) days after submission of a completed form. Prior to conveyance of the Restricted Unit, each approved purchaser shall also submit to the City an executed disclosure statement which certifies that the purchaser is aware that: (i) the purchaser buying the Restricted Unit may only sell the Restricted Unit at an Affordable Housing cost to a "Low" or "Median" Income Household as provided in Section 1 above, (ii) the maximum permitted sales price may be less than fair market value and (iii) the Restricted Unit must be owner-occupied at all times and cannot be rented or leased. The approved purchaser shall also submit an executed promissory, trust deed, notice documents, and any other documentation required by the City to effectuate the Affordable Housing Program. Covenantor shall cooperate with the City in providing such forms to proposed purchasers and in assisting proposed purchasers to prepare such forms and to provide any required information to the City in connection with only the Covenantor's sale of the Restricted Unit, provided that the Covenantor shall not be obligated to incur any out-of-pocket costs in connection therewith, other than employee time dedicated to providing such assistance. THE COVENANTOR AND EACH SUCCESSOR, HEIR, OR ASSIGN OR COVENANTOR UNDERSTAND THAT THE DETERMINATION OF THE AFFORDABLE HOUSING COST CAN BE MADE ONLY AT THE TIME OF THE PROPOSED TRANSFER, TAKING INTO CONSIDERATION INTEREST RATES, THE TERMS OF SALE OFFERED TO, AND THE ECONOMIC CIRCUMSTANCES OF, THE PROPOSED PURCHASER AND OTHER FACTORS THAT CANNOT BE ACCURATELY PREDICTED, AND THAT THE TRANSFER PRICE PERMITTED HEREUNDER MAY BE LESS THAN THE FAIR MARKET VALUE OF THE PROPERTY AND MAY NOT INCREASE OR DECREASE IN THE SAME MANNER AS OTHER SIMILAR REAL PROPERTY 13-3703/93919 3 WHICH IS NOT ENCUMBERED BY THIS RESTRICTION. COVENANTOR AND EACH SUCCESSOR, HEIR, OR ASSIGN OF COVENANTOR FURTHER ACKNOWLEDGES THAT AT ALL TIMES IN SETTING THE TRANSFER PRICE, THE PRIMARY OBJECTIVE OF THE CITY AND THIS AGREEMENT IS TO PROVIDE HOUSING TO "LOW" OR "MEDIAN" INCOME HOUSEHOLDS AT AN AFFORDABLE HOUSING COST. Pam" 1 Covenantor's Initials Covenantor shall include in the escrow instructions and Purchase and Sale Agreements with purchaser a provision which requires each purchaser to record a covenant which will run with the land and bind all successors-in-interest or assignees that will ensure that all subsequent purchasers and occupants qualify as "Low" or"Median" Income Households as applicable. Said covenant shall remain in full force and effect for the Affordability Period as set forth in Section 1. 3. Non-Discrimination Covenants. Covenantor covenants by and for itself, it successors and assigns, and all persons claiming under or though them that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, religion, sex, sexual orientation, creed, ancestry, national or ethnic origin, age, family or marital status, handicap or disability, in the sale, transfer, use, occupancy, tenure or enjoyment of the Restricted Unit, nor shall Covenantor itself or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, subtenants; or vendees in the Restricted Unit. Covenantor and its successors and assigns shall refrain from restricting the sale of the Restricted Unit on the basis of race, color, religion, sex, sexual orientation, creed, ancestry, national or ethnic origin, age, family or marital status, handicap or disability, of any person. All such deeds or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clause: (a) In deeds: "The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, religion, sex, sexual orientation, creed, ancestry, national or ethnic origin, age, family or marital status, handicap or disability, in the sale, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee himself or herself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, or vendees in the land herein conveyed. The foregoing covenants shall run with the land." (b) In contracts: "There shall be no discrimination against or segregation of, any person or group of persons on account of race, color, religion, sex, sexual orientation, creed, ancestry, national or ethnic origin, age, family or marital status, handicap or disability, in the sale, transfer, use, occupancy, tenure or enjoyment of the premises, nor shall the transferor himself or herself of any person claiming under or though him or her, establish or 13-3703/93919 4 permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use of occupancy of tenants, subtenants or vendee of the premises." (c) In leases: "The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators, and assignees, and all persons claiming under or though him or her, and this lease is made and accepted upon and subject to the following conditions: "That there shall be no discrimination against or segregation of any person or group of persons on account of race, color, religion, sex, sexual orientation, creed, ancestry, national or ethnic origin, age, family or marital status, handicap or disability, in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the premises herein leased nor shall the lessee himself or herself, or any person claiming under or though him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy of tenants, sublessees, subtenants, or vendees in the premises herein leased." 4. Covenants Do Not Impair Lien. No violation or breach of covenants, conditions, restrictions, provisions or limitations contained in this Agreement shall defeat or render invalid or in any way impair the lien or charge of any mortgage or deed of trust or security interest. 5. Covenants For Benefit of City. All covenants without regard to technical classification or designation shall be binding for the benefit of the Covenantee and such covenants shall run in favor of Covenantee for the entire period during which time such covenants shall be in force and effect, without regard to whether the Covenantee is or remains an owner of any land or interest therein to which such covenants relate. The Covenantee, in the event of any breach of any such covenants, shall have the right to exercise all the rights and remedies and to maintain any such action at law or suits in equity or other proper legal proceedings to enforce and to cure such breach to which it or any other beneficiaries of these covenants may be entitled during the term specified for such covenants, except the covenants against discrimination which may be enforced at law or in equity at any time in perpetuity. 6. Counterparts. This Agreement may be executed in a number of counterparts, each of which shall be an original, but all of which shall constitute one and the same document. 13-3703193919 5 7. Applicable Law. (a) If any provision of this Agreement or portion thereof, or the application of any provision to any person or circumstances, shall to any extent be held invalid, inoperative, or unenforceable, the remainder of this Agreement, or the application of such provision or portion thereof to any other persons or circumstances, shall not be affected thereby and it shall not be deeded that any such invalid provision affects the consideration for this Agreement; and each provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law. (b) This Agreement shall be construed in accordance with the laws of the State of California. [Balance of this page intentionally left blank] 13-3703/93919 6 IN WITNESS WHEREOF, the Covenantee and Covenantor have caused this instrument to be executed on their behalf by their respective officers hereunto duly authorized as of the date set forth above. COVENANTOR: COVENANTEE: RP/PLC BLUE CANVAS, L.L.C., CITY OF HUNTINGTON BEACH a Delaware limited liability company a California municipal corporation By: Mayor Its: I1 tc City clerk HOUSING AUTHORITY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic By: L�J" Deputy Executiv4 Director ROVED AS TO FORM: CyclyAttorn y /Agency Cou sel L4 z . ,3 INITIA AND APPROVED: Planning Dir ctor REVI D APPROVED: City d i istrator 1 3-3 70 319 391 9 7 STATE OF CALIFORNIA ) ) ss. COUNTY OF ORANGE ) On &KIx.- Id, 2013, before me, , Notary Public, personally appeared 1-)Anjtg L-- C> 64--VVo who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he/she-executed the same in hish;fe�authorized capacity, and that by hisAw signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. / [SEAL] Signature QL2,��( � /74� PATRICIA ALEXIS HANSON Commission# 1888030 z Notary Public-California z Orange County My Comm.Expires May 2,2014 STATE OF CALIFORNIA ) ) ss. COUNTY OF ORANGE ) On ` r ! , 2013, before me, Notary Publi , personally appeared who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. r' [SEAL] Signature 17%"7 KKATKE N Can"Mon#1991094 LIS Pubk-C&Womia Orup County Coen. 28 2A1K 13-3703/93919 8 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT CIVIL CODE§ 1189 a State of California ,, _ l County of 6/e. U4-- On 3 before me, SUC, Dafe / Here Insert Name and ritlle6f the Officer personally appeared 46j �O" Name(s)of Signer(s) e who proved to me, on the basis of satisfactory evidence to be the perso s) whose nam6 are subscribed to the within instrument and acknowledged to me that- .e� executed the same in he' authorized capacity, and that by 44e hei ignature& on the instrument the person 'sue or the entity upon behalf of which the persor0js acted, executed the instrument. P. L.ESPARZA I certify under PENALTY OF PERJURY under the Commission# 1857021 laws of the State of California that the foregoing Z -�_ Notary Public-California a paragraph is true and correct. Z Orange County My Comm.Expires Au 4,2013 WITNESS m h d o iciZA�_ f Signature: Place Notary Seal Above OPTIONAL No Signature of Public Si ZThough the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Document:^ i.D'E'C.1,t iVA)4 (2).+).binaA1S 3 Co 06V JAt-)M l�r7tt Document Date: 4ftL 12-7 20/3 Number of Pages: Signer(s) Other Than Named Above: Capacity(ies) Claimed by Signer(s) Signer's Name: Signer's Name: ❑ Corporate Officer — Title(s): ❑Corporate Officer — Title(s): ❑ Individual ❑ Individual ❑ Partner —❑Limited ❑General ❑ Partner — ❑Limited ❑General ❑ Attorney in Fact ❑Attorney in Fact ❑ Trustee ❑Trustee ❑ Guardian or Conservator ❑Guardian or Conservator ❑ Other: ❑Other: Signer Is Representing: Signer Is Representing: ©2012 National Notary Association•NationalNotary.org • 1-800-US NOTARY(1-800-876-6827) Item#5907 EXHIBIT "A" Legal Description of Restricted Units in Tract 16733 All that certain real property in the City of Huntington Beach, County of Orange, State of California, described as follows: Parcel 1: The "Median-Income Households" consisting of: Units 180, and 189, as shown on that certain Condominium Plan Pacific Shores - Phase 12 recorded on February 13, 2013, as Instrument No. 2013000091956 of Official Records of Orange County, California, covering Lot 8 of Tract No. 16733, as per the Map, lying within the boundaries of said Condominium Plan. 13-3703193919 1 EXHIBIT "B" Designation of Median-income and Low-Income Household Restricted Units Median-Income Household Restricted Units: Those Units more particularly described as Parcel 1 on Exhibit "A" to this Agreement. Low-Income Household Restricted Units: Those Units more particularly described as Parcel 2 on Exhibit "A" to this Agreement. 13-3703/93919 1 EXHIBIT "C" Promissory Note and Deed of Trust (See Attached — Median Income Documents) 13-3703/93919 1 OFFICIAL BUSINESS ) Document entitled to free recording per ) Government Code §§ 6103 and 27383 ) Recording Requested By: ) Housing Authority ) of the City of Huntington Beach ) 2000 Main Street ) Huntington Beach, California 92648 ) Attn: Economic Development ) Dept./Housing Division ) SPACE ABOVE THIS LINE FOR RECORDER'S USE PROMISSORY NOTE TO SECURE AFFORDABILITY RESTRICTIONS ON TRANSFER OF PROPERTY (MEDIAN-INCOME) THIS PROMISSORY NOTE (the "Note") is dated this day of , 20_ between (collectively, "Promissor") and the Housing Authority of the City of Huntington Beach ("Authority") with reference to the following facts: A. This Promissory Note is made in reference to that property in the City of Huntington Beach, County of Orange, State of California, with the street address Huntington Beach, California 92648, and the Assessor's Parcel No. and the Condominium Plan Tract No. 16733, Phase 12, recorded on February 13, 2013 as Instrument No. 2013000091956 (the "Property"). B. An "Agreement Declaring Conditions, Covenants and Restrictions for Property" was recorded on , 20_, as Instrument Number , in the Office of the County Recorder of the County of Orange, California (the "Resale Restrictions"). Among other things, the Resale Restrictions limit the price that the Property may be sold to an "Affordable Housing Cost" to "Moderate Income Households," as those terms are defined in the Resale Restrictions, and further defined in the current Affordable Housing Regulations of the City of Huntington Beach and the Authority Deed of Trust referred to below. C. Concurrently with executing this Note, Promissor has executed a Deed of Trust securing and modifying the Resale Restrictions (the "Authority of Deed of Trust"). D. Pursuant to the Resale Restrictions, the City has approved the sale of the Property to Promissor at an Affordable Housing Cost. To insure that any further sale, transfer or assignment of the Property occurs with the City's approval and at an Affordable Housing Cost, the City has required as a condition of the Promissor's purchase of the Property that Promissor execute this Note. 13-3703/93919 MEDIAN Page 1 of 4 AGREEMENT NOW, THEREFORE, the parties agree as follows: 1. Incorporation of Recitals. The recitals set forth above are incorporated by reference as though fully set forth herein. 2. Amount of the Note. The Amount of this Note is the "Transfer Price" of the Property, less the "Affordable Housing Cost." The Transfer Price shall be determined according to the circumstances that cause the Amount of the Note to become due pursuant to Section 3 of this Note. In the case of the sale of the Property without the City's consent, the Transfer Price shall be the market sales price. In the case of the financing or refinancing of the Property without the City's consent, the Transfer Price shall be the loan amount in excess of the last loan balance on the First Mortgage that the City previously approved. In all other cases, the Transfer Price shall be the fair market value of the Property as established by the Director of Economic Development of the City pursuant to an appraisal. The term "Affordable Housing Cost" shall be defined according to the current Affordable Housing Regulations as adopted by the City of Huntington Beach. Promissor promises to pay the Amount of this Note when due to the Housing Authority at 2000 Main Street, P.O. Box 190, Huntington Beach, California 92648, or at such other address as Authority may direct from time to time in writing. All sums hereunder shall be payable in lawful money of the United States of America and all sums shall be credited first to interest then due and the balance to principal. 3. Due on Sale, Transfer or Refinancing. Promissor agrees to notify the Authority not less than thirty (30) days prior to (i) the sale or transfer of the Property or (ii) any financing or refinancing of the Property. This Note shall be due and payable upon (i) such sale or transfer without the City's consent, (ii) the financing or refinancing of the Property without the City's consent, (iii) Promissor is no longer an occupant of the Property, or (iv) Promissor is in material default of any other obligation under the Resale Restrictions, or the Authority Deed of Trust. 4. Expiration of the Note Obligation. In the event Promissor does not sell or transfer the Property, does not fail to occupy the Property, does not refinance, or is not in material breach of any other provision of the Resale Restrictions or the Agency Deed of Trust before the Sixtieth anniversary of the date of this Note, Promissor shall have no obligation to pay the Note Amount to Authority upon later sale, transfer or refinancing of the Property. 5. Default. The entire unpaid Amount of this Note shall be due and payable in full in the event of a default. The following shall be deemed to be an event of default: a. Failure of Promissor to pay any real property taxes or insurance premiums on the Property as they become due; or 13-3703193919 MEDIAN Page 2 of 4 b. Any material breach of the Resale Restrictions or the Authority Deed of Trust, following the Authority giving notice of the breach and an opportunity to cure; or C. Failure of Promissor to pay the Note Amount when due. 6. This Note is secured by a Deed of Trust, dated , to the City of Huntington Beach, as Trustee, executed by Promissor in favor of the Authority. 7. Notice. All payments, notices, consents, waivers and other communications under this Agreement must be in writing and shall be deemed to have been given when (a) delivered by hand, or, (b) when received by the addressee, if sent by a nationally recognized overnight delivery service (receipt requested), in each case addressed as set forth below: If to PROMISSOR: If to AGENCY: Housing Authority of the City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attention: City Clerk and, Economic Development Director City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 8. Governinq Law. This Agreement is governed by and shall be construed in accordance with the laws of the State of California without giving effect to the conflict of laws principles thereof. The parties agree to personal jurisdiction in the State Courts in Orange County, California and specifically waive any claims of forum non conviens. 9. Modification. This Agreement shall not be amended or modified, except in writing, signed by both parties. 10. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the successors and assigns under this Note. This Note shall not be assigned without the express written consent of Agency. Dated: 20 By: 13-3703/93919 MEDIAN Page 3 of 4 HOUSING AUTHORITY OF THE CITY OF HUNTINGTON BEACH Dated: , 20 By: Deputy Executive Director APPROVED AS TO FORM OFFICE OF HUNTINGTON BEACH CITY ATTORNEY Dated: , 20 By: Jennifer McGrath, City Attorney 13-3703/93919 MEDIAN Page 4 of 4 OFFICIAL BUSINESS ) Document entitled to free recording per Government ) Code Sections 6103 and 27383 ) Recording Requested By: ) Housing Authority of the City of Huntington Beach ) 2000 Main Street ) Huntington Beach, California 92648 ) Attn: Economic Development Dept./Housing Division ) SPACE ABOVE THIS LINE FOR RECORDER'S USE DEED OF TRUST WITH ASSIGNMENTS OF RENTS TO SECURE AFFORDABILITY RESTRICTIONS ON TRANSFER OF PROPERTY (MEDIAN-INCOME) THIS DEED OF TRUST is made this day of 20_, by and between whose address is Huntington Beach, California 92648 (collectively, the "Trustor") and the CiTY OF HUNTINGTON BEACH, a municipal corporation (the "Trustee"), and the HOUSING AUTHORITY OF THE CiTY OF HUNTINGTON BEACH, a public body corporate and politic (the "Beneficiary"), whose address is 2000 Main Street, Huntington Beach, California 92648, with reference to the following facts: A. This Deed of Trust is made in reference to that property in the City of Huntington Beach, County of Orange, State of California, described legally in the Legal Description attached hereto as Exhibit "A" and incorporated herein with the street address Huntington Beach, California 92648 and the Assessor's Parcel No. and the Plan Tract No. 16733, Phase 12, recorded on February 13, 2013 as instrument No. 2013000091956 (the "Property"). B. An "Agreement Declaring Conditions, Covenants and Restrictions for Property" was recorded on , 20_, as instrument Number , in the Office of the County Recorder of the County of Orange, California (the "Resale Restrictions"). Among other things, the Resale Restrictions limit the price that the Property may be sold to an "Affordable Housing Cost" to "Moderate income Households," as those terms are defined in the Resale Restrictions, and further defined in the current affordable housing regulations of the City of Huntington Beach and this Deed of Trust. C. Pursuant to this Deed of Trust. the Resale Restrictions as applied to the Property are extended to expire sixty (60) years from the date this Deed of Trust is recorded (the "Expiration Date"), which date is approximately 20_ 13-3703/93919 MEDIAN Page 1 of 12 NOW, THEREFORE, TRUSTOR HEREBY irrevocably grants, transfers and assigns, to Trustee, in trust, with power of sale of the Property, together with (a) all buildings, improvements and fixtures, now or hereafter placed thereon, it being understood and agreed that all classes of property attached or unattached used in connection herewith shall be deemed fixtures, (b) rents, issues and profits thereof, (c) any water rights and/or stock are appurtenant or pertain to said land, and (d) all sums of money payable on the purchase price of the Property secured by a lien thereon or payable under any agreement for the sale thereof, SUBJECT, HOWEVER, to the right, power and authority hereinafter given to and conferred upon Beneficiary to collect and apply such rents, issues and profits, and all sums of money payable on the purchase price of the Property secured by a lien thereon or payable under any agreement. A. FOR THE PURPOSE OF SECURING: 1. Payment of the indebtedness evidenced by a promissory note executed by Trustor on , 20_ (the "Note"). The Amount of the indebtedness is the "Transfer Price" of the Property, less the "Affordable Housing Cost." The calculation of the Amount of the indebtedness is set forth with specificity in the Note, which is on file with the Economic Development Department of the City of Huntington Beach. 2. Performance of each and every obligation, covenant, promise and agreement of the Resale Restrictions, as amended by this Deed of Trust. B. TO PROTECT THE SECURITY OF THIS DEED OF TRUST, TRUSTOR AGREES: 1. Trustor agrees for itself, and its successors and assigns, and every successor to Trustor's interest in the Property, or any part thereof that for sixty (60) years from the date this Deed of Trust is-recorded (the "Expiration Date"), to perform all obligations due under the Resale Restrictions, as those obligations are restated and modified as set forth below: (a) The Property shall only be owned and occupied by persons or families of "Median-Income." "Median-Income" shall mean persons or families earning one hundred percent (100%) or less of Orange County median income, adjusted for appropriate family size. (b) The Property may only be sold at an "Affordable Housing Cost" to households of"Median-Income," as those terms are defined in current Affordable Housing Regulations as adopted by the City of Huntington Beach. Generally, those Regulations define Affordable Housing Cost to mean that purchase price which would result in monthly housing payments which do not exceed Thirty-Five Percent (35%) of One Hundred Percent (100%) of the current Orange County monthly median income for a household equal to the number of bedrooms in the unit plus one (1) person. In determining monthly housing payments, the City will assume principal and interest payments on a conventional home mortgage after paying a ten percent (10%) down payment. The mortgage interest rate will be the prevailing Fannie Mae thirty (30) year mortgage rate, or a City-selected equivalent. Monthly housing costs will also include homeowner's association dues, utilities, homeowner's insurance, maintenance costs and property taxes. 13-3703/93919 MEDIAN Page 2 of 12 (c) The Trustor shall further comply with the Affordable Housing Guidelines promulgated by the City for purposes of administering the Affordable Housing Program of the City of Huntington Beach. (d) No transfer of the Property shall occur until the City of Huntington Beach determines (a) that the proposed purchaser intends to occupy the Property as the proposed purchaser's principal residence, (b) that the proposed purchaser is a person or family of Median Income, (c) that the proposed transfer occurs at an Affordable Housing Cost. The City of Huntington Beach shall not be obligated to approve a transfer until and unless the proposed purchaser has submitted to the City of Huntington Beach such information and completed such forms as the City of Huntington Beach shall request to certify the proposed purchaser's intent with respect to its residency of the Property and its gross income, and the proposed purchaser has submitted an affidavit disclosing and certifying the amount of the proposed purchase price. Prior to conveyance of the Property, each approved purchaser shall submit to the City of Huntington Beach an executed disclosure statement which certifies that the purchaser is aware that the purchaser may only sell the unit at an Affordable Housing Cost to a Median Income person or family, that the maximum permitted sales price may be less than fair market value and that the unit must be owner-occupied at all times and cannot be rented or leased. TRUSTOR AND EACH SUCCESSOR, HEIR OR ASSIGN OF TRUSTOR UNDERSTANDS THAT THE DETERMINATION OF THE AFFORDABLE HOUSING COST CAN BE MADE ONLY AT THE TIME OF THE PROPOSED TRANSFER, TAKING INTO CONSIDERATION INTEREST RATES, THE TERMS OF SALE OFFERED TO AND THE ECONOMIC CIRCUMSTANCES OF THE PROPOSED PURCHASER AND OTHER FACTORS THAT CANNOT BE ACCURATELY PREDICTED, AND THAT THE TRANSFER PRICE PERMITTED HEREUNDER MAY BE LESS THAN THE FAIR MARKET VALUE OF THE PROPERTY AND MAY NOT INCREASE OR DECREASE IN THE SAME MANNER AS OTHER SIMILAR REAL PROPERTY WHICH IS NOT ENCUMBERED BY THIS RESTRICTION. TRUSTOR AND EACH SUCCESSOR, HEIR OR ASSIGN OF TRUSTOR FURTHER ACKNOWLEDGES THAT AT ALL TIMES IN SETTING THE TRANSFER PRICE THE PRIMARY OBJECTIVE OF THE BENEFICIARY AND THIS DEED OF TRUST IS TO PROVIDE HOUSING TO ELIGIBLE PERSONS OR FAMILIES AT AN AFFORDABLE HOUSING COST. Trustor Initials Trustor Initials (e) The City of Huntington Beach may impose any conditions on the approval of any transfer of the Property as it determines are reasonably necessary for the effective administration of its Affordable Housing Program. 13-3703193919 MEDIAN Page 3 of 12 (f) The Covenants contained in this Section 1 shall run with the land and shall automatically terminate and be of no further force or effect sixty (60) years from the date this Deed of Trust is recorded, which date is approximately 2. Trustor covenants by and for itself, its successors and assigns, and all persons claiming under or through them that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the said property, nor shall Trustor itself or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in said property. Trustor and its successors and assigns, shall refrain from restricting the rental or lease (if permitted by Trustor) or sale of said property on the basis of race, color, religion, sex, marital status, national origin or ancestry of any person. All such deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: (a) In deeds: "The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee himself or herself or any person claiming under or through him or her, establish or permit any such practice or practices-of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessee or vendees in the land herein conveyed. The foregoing covenants shall run with the land." (b) In leases: "The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through him or her,. and this lease is made and accepted upon and subject to the following conditions: "There shall be no discrimination against or segregation of any person or group of persons on account of race, color, religion, sex, marital status, ancestry or national origin in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the premises herein leased nor shall the lessee himself or herself, or any person claiming under to through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sublessees, subtenants or vendees in the premises herein leased." (c) In contracts: "There shall be no discrimination against or segregation of, any person, or group of persons on account of race, color, religion, sex, marital status, 13-3703/93919 MEDIAN Page 4 of 12 ancestry or national origin, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the premises, nor shall the transferee himself or herself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessee or vendees of the premises." Nothing in this Section 2 shall be construed to authorize the rental or lease of the Property if such rental or lease is not otherwise permitted. The covenants in this paragraph shall run with the land in perpetuity. 3. No violation or breach of the covenants, conditions, restrictions, provisions or limitations contained in this Deed of Trust shall defeat or render invalid or in any way impair the lien or charge of any mortgage or deed of trust or security interest. 4. Trustor has made certain representations and disclosures as a requirement under the Resale Restrictions in order to induce Beneficiary to approve the sale of the Property to Trustor. In the event that Trustor has made any material misrepresentation or failed to disclose any material fact regarding said transaction, Beneficiary at its option and without notice, shall have the right to declare a material breach of the Resale Restrictions and the Note. Beneficiary may make a written declaration of default and demand for sale as in paragraph No. 6 herein set forth. Trustee, upon presentation to it of an affidavit signed by Beneficiary setting forth facts showing a default by Trustor under this paragraph, is authorized to accept as true and conclusive all facts and statements therein, and to act thereon hereunder. 5. All covenants without regard to technical classification or designation shall be binding for the benefit of the Beneficiary and such covenants shall run in favor of the Beneficiary for the entire period during which such covenants shall be in force and effect, without regard to whether the Beneficiary is or remains an owner of any land or interest therein to which such covenants relate. The Beneficiary, in the event of any breach of any such covenants, shall have the right to exercise all the rights and remedies and to maintain any action at law or suits in equity or other proper legal proceedings to enforce and to cure such breach to which it or any other beneficiaries of these covenants may be entitled during the term specified for such covenants, except the covenants against discrimination which may be enforced at law or in equity at any time in perpetuity. 6. Upon default by Trustor in the obligations of the Note, in the performance of any obligation under this Deed of Trust or under the terms of any First Lender's Deed of Trust which is or appears to be prior or superior to this Deed of Trust, Beneficiary may declare all sums secured by this Deed of Trust immediately due and payable by delivering to Trustee of a written declaration of default and demand for sale and a written notice of default and election to sell the Property. Default in the payment of any indebtedness secured by this Deed of Trust, in the obligation of the Note, or in the performance of any agreement under this Deed of Trust constitutes a default only under this Deed of Trust and the Note and does not constitute a default under the First Deed of Trust. Trustee shall cause the notice of default to be recorded. Beneficiary also shall deposit with Trustee this Deed of Trust, the Note, and all documents evidencing any additional expenditures secured by this Deed of Trust. After the lapse of such 13-3703/93919 MEDIAN Page 5 of 12 time as then may be required by law following recordation of such notice of default, and notice of sale having been given as then required by law, Trustee, without demand on Trustor, shall sell the Property at the time and place fixed by it in such notice of sale, whether as a whole or in separate parcels, and in such order as it may determine, at public auction to the highest bidder qualified under the Resale Restrictions and this Deed of Trust in lawful money of the United States, payable at time of sale. Trustee may postpone sale of all or any portion of the Property by public announcement at such time and place of sale, and from time to time thereafter may postpone such sale by public announcement at the time fixed by the preceding postponement. Trustee shall deliver to such purchaser its Deed conveying the Property so sold, but without any covenant or warranty, express or implied. The recital in such Deed of any matters of fact shall be conclusive of the truthfulness thereof. Any person, including Trustor, Trustee, or Beneficiary as hereinafter defined, may purchase at such sale. Trustee may also sell at any such sale and as part thereof any shares of corporate stock securing the obligations secured hereby, and Trustor waives demand and notice of such sale. (Beneficiary at its option may also foreclose on such shares by independent pledge sale, and Trustor waives demand and notice of such sale.) After deducting all costs, fees and expenses of Trustee, and of this Trust, including cost of evidence of title in connection with this sale, Trustee shall apply the proceeds of sale to payment, first; all sums expended under the teams hereof, not then repaid, with accrued interest at the rate then payable under the First Lender Deed of Trust secured hereby, and then of all other sums secured hereby, and, if there are any proceeds remaining, shall distribute them to the person or persons legally entitled thereto. 7. Trustor shall keep the Property in good condition and repair; to allow Beneficiary or its representatives to enter and inspect the Property at all reasonable times and access thereto, shall be permitted for that purpose; not to remove or demolish any building thereon; not to make alterations thereto without the consent of the Beneficiary; to suffer or permit no change in the general nature of the occupancy of the Property without Beneficiary's written consent; to complete or restore promptly and in good workmanlike manner any building which may be constructed, damaged or destroyed thereon, including, without restricting the generality of the foregoing, damage from termites and dry-rot; to pay when due all claims for labor performed and materials furnished in connection with the Property and not to permit any mechanic's lien against the Property; to comply with all laws affecting the Property or requiring any alterations or improvements to be made thereon; not to initiate or acquiesce in any zoning reclassification without Beneficiary's written consent; not to commit or permit waste thereon; not to commit, suffer or permit any act upon the Property in violation of the law; to paint, cultivate, irrigate, fertilize, fumigate, prune, and do all other acts that from the character or use of the Property may be reasonably necessary; and to promptly pay all amounts due others upon agreements of lease or conditional sale of all fixtures, furnishings and equipment located thereon. 8. Trustor shall provide, and maintain in force at all times with respect to the Property, fire and other types of insurance as may be required by Beneficiary. All of such insurance shall have a loss payable endorsement in favor of Beneficiary, shall be for a term and in form, content, amount and in such companies as may be satisfactory to Beneficiary, and the policies therefore shall be delivered to and remain in possession of Beneficiary as further security for the faithful performance of these trusts. At least thirty (30) days prior to the 13-3703/93919 MEDIAN Page 6 of 12 expiration of any such insurance policy, a policy or policies renewing or extending such expiring insurance shall be delivered to Beneficiary together with written evidence showing payment of the premium therefore and, in the event any such insurance policy and evidence of the payment of the premium therefore are not so delivered by Trustor to Beneficiary, Trustor by executing this Deed of Trust specifically requests Beneficiary to obtain such insurance and Beneficiary, without obligation to do so, without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof, may obtain such insurance through or from any insurance agency or company acceptable to it, pay the premium thereof, and may add the amount thereof to the indebtedness secured hereby, which amount shall bear a like rate of interest. Beneficiary may furnish to any insurance agency or company, or any other person, any information contained in or extracted from any insurance policy delivered to Beneficiary pursuant hereto and any information concerning the loan secured hereby. Neither Trustee nor Beneficiary shall be responsible for such insurance or for the collection of any insurance monies, or for any insolvency of any insurer or insurance underwriter. In case of insurance loss, Beneficiary is hereby authorized either (a) to settle and adjust any claim under the insurance policies provided for in this document without the consent of the Trustor, or (b) to allow Trustor to agree with the insurance company or companies on the amount to be paid upon the loss. In either case, the Beneficiary is authorized to collect and make receipt of any such insurance money. If Trustor is obligated to restore or replace the damaged or destroyed buildings or improvements under the terms of any lease or leases which are or may be prior to the lien of this Deed of Trust and such damage or destruction does not result in cancellation or termination of such lease, such proceeds, after deducting therefrom any expenses incurred in the collection thereof, shall be used to reimburse the Trustor for the cost of rebuilding or restoring the buildings or improvements on said premises. In all other cases, such insurance proceeds shall either be applied for the cost of the rebuilding or restoring the buildings or improvements on said premises. Such buildings and improvements shall be so restored or rebuilt as to be of at least equal value and substantially the same character as prior to the damage or destruction, and shall be in a condition satisfactory to Beneficiary. Such application or release shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. Any and all unexpired insurance shall inure to the benefit of, and pass to the purchaser of, the property conveyed at any Trustee sale held hereunder. 9. Trustor shall pay: (a) at least ten (10) days before delinquency, all general and special City and County taxes, and all assessments on appurtenant water stock, affecting the Property, (b) when done, all special assessments for public improvements, without permitting any improvement bond to issue for any special assessment, (c) when done, all encumbrances, charges and liens, with interest, on the Property, or any part thereof, which are or appears to be prior to superior hereto, (d) if the security of this Deed of Trust is leasehold estate, to make any payment or do any act required of the Lessee or its successor in interest under the terms of the instrument or instruments creating said leasehold, (e) all costs, fees and expenses of this trust, (f) for any statement regarding the obligation secured hereby any amount demanded by Beneficiary not to exceed the maximum allowed by law thereof at the time when such request is made, (g) such other charges for services rendered by Beneficiary and furnished at Trustor's request or that of any successor in interest to Trustor as the Beneficiary may deem reasonable. 13-3703/93919 MEDIAN Page 7 of 12 10. Should Trustor fail to make any payment or do any act as provided in this Deed of Trust, the Beneficiary or Trustee, but without obligation to do so and without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof, may (a) make or do the same in such manner and to such extent as either may deem necessary to protect the security hereof, Beneficiary or Trustee being authorized to enter upon the Property for such purposes, (b) commence, appear in, or defend any action or proceeding purporting to affect the security hereof or the property covered by this Deed of Trust, or the rights or powers of Beneficiary or Trustee, (c) pay, purchase, contest or compromise any encumbrance, charge or lien, which in the judgment of either is or appears to be prior or superior hereto, and (d) in exercising any such powers, pay necessary expenses, employ counsel and pay his reasonable fees. Trustor agrees to repay any amount so expended on demand of Beneficiary, and any amount so expended may be added by Beneficiary to the indebtedness secured hereby and shall bear a like rate of interest. 11. Trustor shall appear in and defend any action or proceeding purporting to affect the security hereof or the Property which is covered by this Deed of Trust, or the rights or powers of Beneficiary or Trustee, and whether or not Trustor so appears or defends, to pay all costs and expenses, including cost of evidence of title and attorney's fees in a reasonable sum, in any such action or proceeding in which Beneficiary or Trustee may appear by virtue of being made a party defendant or otherwise irrespective of whether the interest of Beneficiary or Trustee in the Property is directly questioned by such action, including any action for the condemnation or partition of said premises, and in any suit brought by Beneficiary to foreclose this Deed of Trust. 12. Trustor shall pay immediately and without demand, all sums expended under the terms of this Deed of Trust by Beneficiary or Trustee, with interest from the date of expenditure at the rate which the principal obligation secured hereby bears at the time such payment is made, and the repayment of such sums shall be secured hereby. 13. Should Trustor or any successor in interest to Trustor in the Property drill or extract, or enter into a lease for drilling or extraction of oil, gas or other hydrocarbon substances or any mineral of any kind or character, or sell, convey, further encumber, or alienate the Property, or any party thereof, or any interest therein, or be divested of his title or any interest therein in any manner or way, whether voluntarily or involuntarily, Beneficiary shall have the right, at its option, to declare any obligations secured hereby irrespective of the maturity date specified in any Note evidencing the same, immediately due and payable, and no waiver of this right shall be effective unless in writing. 14. Any award, settlement or damages for injury or damages to the Property, or in construction with the transaction financed by such loan, and any award of damages in connection with any condemnation for public use of or injury to the Property, or any part thereof, is hereby assigned and shall be paid to Beneficiary, who may apply or release such monies received by it in such manner and with the same effect as above provided for the disposition of proceeds of fire or other insurance. 15. By accepting payment of any sums secured by this Deed of Trust after its due date, or by making any payment, performing any act on behalf of Trustor, that Trustor was obligated hereunder, but failed, to make, or perform, or by adding any payment so made by 1 3-3 703/9391 9 MEDIAN Page 8 of 12 Beneficiary to the indebtedness secured hereby, Beneficiary does not waive its right either to require prompt payment when due of all other sums so secured or to declare a default for failure so to pay. 16. At any time, or from time to time, without liability of the Beneficiary or Trustee thereof, and without notice, upon written request of Beneficiary and presentation of this Deed of Trust and the Note secured hereby for endorsement, and without affecting the personal liability of any person for payment of the indebtedness secured hereby, or the lien of the Deed of Trust upon the remainder of the Property for the full amount of the indebtedness then or thereafter secured hereby, or the rights or powers of Beneficiary or the Trustee with respect to the remainder of the Property, Trustee may: (a) reconvey any part of the Property, (b) consent to the making of any map or plat thereof; (c)join in granting any easement thereon, (d)join in any agreement subordinating the lien or charge hereof. 17. The lien hereof shall remain in full force and effect during any postponement or extension of time of payment of the indebtedness secured hereby, or any part thereof. 18. As additional security, Trustor irrevocably assigns to Beneficiary the rents, issues, and profits of the Property for the purposes and upon the terms and conditions set forth below. This assignment shall not impose upon Beneficiary any duty to produce rents from the property affected by this Deed of Trust, or cause Authority to be (a) "mortgages in possession" for any purpose; (b) responsible for performing any of the obligations of the lessor under any lease; or (c) responsible for any waste committed by lessees or any other parties, for any dangerous or defective condition of the property affected by this Deed of Trust, or for any negligence in the management, upkeep, or control of such rights to rents, issues and profits is not contingent upon, and may be exercised without possession of, the property affected by this Deed of Trust. Beneficiary confers upon Trustor a license ("License") to collect and retain the rents, issues and profits of the property affected by this Deed of Trust as they become due and payable, until the occurrence of a default hereunder. Upon such default, the License shall be automatically revoked and Beneficiary may collect and retain the rents, issues and profits without notice and without taking possessions of the property affected by this Deed of Trust. This right to collect rents, issues and profits shall not grant to Beneficiary or Trustee the right to possession, except as otherwise provided herein; and neither said right, nor termination of the License, shall impose upon Beneficiary or Trustee the duty to produce rents, issues or profits or maintain all or any part of the Property affected by this Trust Deed. If Trustor shall default as aforesaid, Trustor's right to collect any such money shall cease and Beneficiary shall have the right, with or without taking possession of the property affected hereby, to collect all rents, issues, royalties and profits and shall be authorized to, and may, without notice and irrespective of whether declaration of default has been delivered to Trustee and without regard to the adequacy of the security for the indebtedness secured hereby, either personally or by attorney or agent without bringing any action or proceeding, or by receiver to be appointed by the Court, enter into possession and hold, occupy, possess and enjoy the Property, make, cancel, enforce and modify leases, obtain and eject tenants, and set and modify rents and terms of rents, and to sue, and to take, receive and collect all or any part of the said rents, issues, and profits of the property affected hereby, and after paying such costs 1 3-3 70 319 391 9 MEDIAN Page 9 of 12 of maintenance, operation of the Property, and of collection including reasonable attorneys' fees, as in its judgment it may deem proper, to apply the balance upon any indebtedness then secured hereby, the rents, issues, royalties and profits of the Property being hereby assigned to Beneficiary for said purposes. The acceptance of such rents, issues, royalties and profits shall not constitute a waiver of any other right which Trustee or Beneficiary may enjoy under this Deed of Trust or under the laws of California. Failure of or discontinuance by Beneficiary at any time, or from time to time, to collect any such rents, issues, royalties or profits shall not in any manner affect the subsequent enforcement by Beneficiary of the right, power and authority to collect the same. The receipt and application by said Beneficiary of all such rents, issues, royalties and profits pursuant hereto, after execution and delivery of declaration of default and demand for sale as hereinafter provided, or during the pendency of Trustee's sale proceedings hereunder, shall not cure such breach or default nor affect sale proceedings, or any sale made pursuant thereto, but such rents, issues, royalties and profits, less all costs of operation, maintenance, collection and reasonable attorneys' fees, when received by Beneficiary, shall be applied in reduction of the indebtedness secured hereby, from time to time, in such order as Beneficiary may determine. Nothing contained herein, nor the exercise of the right by Beneficiary to collect, shall be, or be construed to be, an affirmation by Beneficiary of any tenancy, lease or option, nor an assumption of liability under, nor subordination of the lien or charge of this Deed of Trust to, any such tenancy, lease or option. 19. If the security of this Deed of Trust is a leasehold estate, the Trustor agrees that: (a) the term "Lease" as used herein shall mean the lease creating the "leasehold estate"' (b) Trustor shall not amend, change or modify his leasehold interest, or the Lease, or agree to do so, without the written consent of the Beneficiary; (c) Trustor will promptly advise Beneficiary regarding any notice, request or demand received by him from the lessor under the Lease and promptly furnish Beneficiary with a copy of any such notice, request or demand; (d) as long as any of the indebtedness secured hereby shall remain unpaid, unless the Beneficiary shall otherwise consent thereto in writing, the leasehold estate-shall not merge with the fee title but shall always be kept separate and distinct, notwithstanding the union of said estates in any party; (e) Trustor agrees that it will promptly, strictly, and faithfully perform, fulfill, and comply with all covenants, agreements, terms, conditions and provisions under any lease affecting the premises and to neither do anything, nor to permit anything to be done which may cause modification or termination of any such lease or of the obligations of any lessee or person claiming through such lease or the rents provided for therein or the interest of the lessor or the Beneficiary therein or thereunder. Trustor further agrees he will not execute a Deed of Trust or mortgage which may be or become superior to any leasehold estate that is security for this Deed of Trust. in the event of a violation of any of the covenants set forth in this paragraph, Beneficiary shall have the right, at its option, to declare all sums secured hereby immediately due and payable. Consent to or waiver of one of said violations shall not be deemed to be a consent to or waiver of any other violation. If the security for this Deed of Trust is a leasehold estate, the term "property" as used in this Deed of Trust shall be deemed to mean the leasehold estate whenever the context so requires for the protection of the Beneficiary. 20. Trustor waives, to the fullest extent permissible by law, the right to plead any statute of limitations as a defense to any demand secured hereby. 13-3703/93919 MEDIAN Page 10 of 12 21. Beneficiary may, from time to time, by instrument in writing, substitute a successor or successors to any Trustee named herein or acting hereunder, which instrument, executed and acknowledged by Beneficiary and recorded in the office of the recorder of the county or counties where the Property is situated, shall be conclusive proof of property substitution of such successor Trustee or Trustees, who shall, without conveyances from the Trustee predecessor, succeed to all its title, estate, rights, powers and duties, including but not limited to the power to reconvey the whole or any part of the property covered by this Deed of Trust. Such instrument must contain the name of the original Trustor, Trustee and Beneficiary hereunder, the book and page where this Deed of Trust is recorded. If notice of default shall have been recorded, this power of substitution cannot be exercised until after the costs, fees and expenses of the then acting Trustee shall have been paid to such Trustee, who shall endorse receipt thereof upon .such instrument. The procedures herein provided for substitution of Trustee shall not be exclusive of other provisions for substitution provided by law. 22. This Deed of Trust applies to, inures to the benefit of, and binds all parties hereto, their heirs, legatees, devisees, administrators, executors, successors and assigns. The term "Beneficiary" shall mean the owner and holder, including pledgee, of the Note secured hereby, whether or not names as Beneficiary herein. In this Deed of Trust, whenever the context so requires, the masculine gender includes the feminine and/or neuter, and the singular number includes the plural. 23. That in the event of a demand for, and the preparation and delivery of a written statement regarding the obligations secured by this Deed of Trust pursuant to Sections 2943 and 2954 of the Civil Code of California, Beneficiary shall be entitled to make a reasonable charge, not exceeding the maximum amount which is permitted by law at the time the statement is furnished. Beneficiary may also charge Trustor a reasonable fee for any other services rendered to Trustor or rendered in Trustor's behalf in connection with the Property of this Deed of Trust, including changing Beneficiary's records, pertaining to this Deed of Trust in connection with the transfer of the Property, or releasing an existing policy of fire insurance or other casualty insurance held by Beneficiary and replacing the same with another such policy. 24. Trustee accepts this Trust when this Deed of Trust, duly executed and acknowledged, is made a public record as provided by law. Trustee is not obligated to notify any party hereto of pending sale under any other Deed of Trust or of any action or proceeding in which Trustor, Beneficiary, or Trustee shall be a party unless brought by Trustee. 25. Any notice which any party hereto may desire or be required to give to the other party shall be in writing. The mailing thereof must be certified mail addressed to the Trustor at his address hereinabove set forth or to the Beneficiary at his office or at such other place as such parties hereto may designate in writing. [Balance of this page intentionally left blank] 13-3703/93919 MEDIAN Page 11 of 12 THE UNDERSIGNED TRUSTOR REQUESTS that a copy of any notice of default and of any notice of sale hereunder be mailed to him at his address hereinbefore set forth.-- TRUSTOR Dated: , 20 By: HOUSING AUTHORITY OF THE CITY OF HUNTINGTON BEACH Dated: , 20 BY: Deputy Executive Director CITY OF HUNTINGTON BEACH Dated: , 20 BY: Assistant City Manager APPROVED AS TO PORIVI OFFICE OF HUNTINGTON BEACH CITY ATTORNEY Dated: , 20 By. Jennifer McGrath, City Attorney 13-3703/93919 MEDIAN Page 12 of 12 This Document was electronically recorded by City of Huntington Beach Recorded in Official Records, Orange County Renee Ramirez,Assistant Clerk Recorder RECORDING REQUESTED BY: ) IIIIIIIIII II 1111111111111111111111111111111111111111111111111 IEIINO FEE 2013000140731 12:37pm 03/07/13 AND WHEN RECORDED MAIL TO:) 93 406 Al2 29 ) 0.00 0.00 0.00 0.00 84.00 0.00 0.00 0.00 City Clerk ) City of Huntington Beach ) 2000 Main Street ) "Huntington Beach, CA 92648 ) P,q4,-O�— /d (Space Above for Recorder's Use) l.�lvlT,5 oC-- AGREEMENT DECLARING CONDITIONS, COVENANTS AND RESTRICTIONS FOR PROPERTY (RESALE RESTRICTIONS) This Agreement Declaring Conditions, Covenants and Restrictions for Property (the "Agreement") is made as of FemiA, u Ob, 2013, by and between RP/PLC BLUE CANVAS, L.L.C., a Delaware limited liability company (the "Covenantor"), and THE CITY OF HUNTINGTON BEACH, a California municipal corporation (the "City"), and the HOUSING AUTHORITY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic (the "Authority"). Collectively, the City and Authority will be referred to as the "Covenantee". RECITALS A. Covenantor is the owner of record of that certain real property located in the City of Huntington Beach, County of Orange, State of California legally described in the attached Exhibit "A". B. On September 2, 2008, the City Council approved Tract No. 16733, as per map recorded as Instrument No. 2008000531659 in Book 897, Pages 10 through 14 of Miscellaneous Maps, Records of Orange County, California ("Project"). City imposed conditions of approval on the Project, requiring Covenantor to submit an Affordable Housing Agreement, in accordance with the Affordable Housing Program, for review by the Planning Department and approval by the City Attorney and acceptance by the City Council. The City further required that the plan shall provide ten percent (10%) of the total 201 units equaling 21 units to be restricted as set forth herein ("Restricted Units"), 3 of which are to be affordable housing for household earning less than 80% of the Orange County Median Income and 18 of which are to be affordable housing for households earning no more than 100% of the Orange County Median Income, in both cases for a period of sixty (60) years. The execution and recordation of this Agreement is intended to fully satisfy that condition. NOW, THEREFORE, the parties hereto agree and covenant as follows: 1. Affordability Covenants. Covenantor agrees for itself and its successor and assigns, and every successor to Covenantor's interest in the Restricted Unit, or any part thereof, that the Project located at Newland Street and Noelle Drive, which consists of a total of 201 13-3639/90470 1 This document is solely for the ontow bueiness of the City of Huntington 1 ,as contemplated under Government Code Sec,e1o3 end should be recorded free of du rM. residential condominium units, shall be designated as affordable and shall be held subject to this Agreement for sixty (60) years from the date of the close of escrow for the initial sale of each such Restricted Unit built in Tract No. 16733 as follows: (a) Eighteen (18) Restricted Units as further designated on Exhibit "B" attached hereto shall only be owned and occupied by "Median-Income Households", which shall mean persons or families earning not more than 100% of the Orange County median income, adjusted for household size appropriate for the property as determined by the Agency based on statistics published by the United States Department of Housing & Urban Development or established by the State of California, pursuant to Health and Safety Code Section 50093, or a successor statute. (b) These eighteen (18) Medium-Income Restricted Units shall only be sold at an "Affordable Housing Cost" to "Median-Income Households." (c) Three (3) Restricted Units as further designated on Exhibit "B" attached hereto shall only be owned and occupied by "Low-Income Households", which shall mean persons or families earning less than 80% of the Orange County median income, adjusted for household size appropriate for the property as determined by the Agency based on statistics published by the United States Department of Housing & Urban Development or established by the State of California, pursuant to Health and Safety Code Section 50093, or a successor statute. (d) These three (3) Low-Income Restricted Units shall only be sold at an "Affordable Housing Cost" to "Low-income Households." (e) "Affordable Housing Cost" shall mean the permitted gross sales price of the Restricted Unit as set forth in the Affordable Housing Price/Income Guidelines or successor guidelines published, from time to time, by the City for such purpose. (f) The term of this Agreement shall commence on the date of the initial sale of each Restricted Unit to a qualifying purchaser as evidenced by a deed recorded with the Orange County Recorder's Office and shall continue for sixty years from said date ("Affordability Period"). The covenant contained in this Section 1 shall run with the Restricted Unit and shall automatically terminate and be of no further force or effect upon the expiration of the Affordability Period. (g) Purchasers of the Restricted Units identified above shall enter into a promissory note and deed of trust in the forms attached hereto as Exhibit "C". 2. Transfer of Restricted Unit; Consent of Agency. During the Affordability Period no transfer of a Restricted Unit shall occur until the City determines: (a) that the proposed purchaser intends to occupy the Restricted Unit as the proposed purchaser's principal residence, (b) that the proposed purchaser is a "Low", or "Median" Income Household as provided in Section 1 above, and 13-3639/90470 2 (c) that the proposed transfer occurs at an Affordable Housing Cost. (d) The Restricted Units shall be constructed prior to or concurrent with the primary Project. (e) In the event that the Covenantor (including successors and assigns) desires to sell the Restricted Unit, Covenantor shall send written notice thereof to the City at the following address: City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attention: Director of Economic Development Within seven (7) days of receiving such notice, the City shall send Covenantor transfer application forms prepared by the City. Such forms shall contain a certification of the proposed purchaser's intent with respect to his/her/its residency of the Restricted Unit and his/her/its gross income, and an affidavit of the proposed purchaser disclosing and certifying the amount of the proposed purchase price. The City shall not be obligated to approve a transfer unless and until the proposed purchaser has submitted to the City such information and completed such forms. In the interest of expediting the close of escrow for such proposed transactions, the City shall reasonably approve or disapprove such submissions as soon as practicable after submission of such forms, and in no event later than fourteen (14) days after submission of a completed form. Prior to conveyance of the Restricted Unit, each approved purchaser shall also submit to the City an executed disclosure statement which certifies that the purchaser is aware that: (i) the purchaser buying the Restricted Unit may only sell the Restricted Unit at an Affordable Housing cost to a "Low" or "Median" Income Household as provided in Section 1 above, (ii) the maximum permitted sales price may be less than fair market value and (iii) the Restricted Unit must be owner-occupied at all times and cannot be rented or leased. The approved purchaser shall also submit an executed promissory, trust deed, notice documents, and any other documentation required by the City to effectuate the Affordable Housing Program. Covenantor shall cooperate with the City in providing such forms to proposed purchasers and in assisting proposed purchasers to prepare such forms and to provide any required information to the City in connection with only the Covenantor's sale of the Restricted Unit, provided that the Covenantor shall not be obligated to incur any out-of-pocket costs in connection therewith, other than employee time dedicated to providing such assistance. THE COVENANTOR AND EACH SUCCESSOR, HEIR, OR ASSIGN OR COVENANTOR UNDERSTAND THAT THE DETERMINATION OF THE AFFORDABLE HOUSING COST CAN BE MADE ONLY AT THE TIME OF THE PROPOSED TRANSFER, TAKING INTO CONSIDERATION INTEREST RATES, THE TERMS OF SALE OFFERED TO, AND THE ECONOMIC CIRCUMSTANCES OF, THE PROPOSED PURCHASER AND OTHER FACTORS THAT CANNOT BE ACCURATELY PREDICTED, AND THAT THE TRANSFER PRICE PERMITTED HEREUNDER MAY BE LESS THAN THE FAIR MARKET VALUE OF THE PROPERTY AND MAY NOT INCREASE OR DECREASE IN THE SAME MANNER AS OTHER SIMILAR REAL PROPERTY 13-3639/90470 3 WHICH IS NOT ENCUMBERED BY THIS RESTRICTION. COVENANTOR AND EACH SUCCESSOR, HEIR, OR ASSIGN OF COVENANTOR FURTHER ACKNOWLEDGES THAT AT ALL TIMES IN SETTING THE TRANSFER PRICE, THE PRIMARY OBJECTIVE OF THE CITY AND THIS AGREEMENT IS TO PROVIDE HOUSING TO "LOW" OR "MEDIAN" INCOME HOUSEHOLDS AT AN AFFORDABLE HOUSING COST. 1W&— Covenantor's Initials Covenantor shall include in the escrow instructions and Purchase and Sale Agreements with purchaser a provision which requires each purchaser to record a covenant which will run with the land and bind all successors-in-interest or assignees that will ensure that all subsequent purchasers and occupants qualify as "Low" or "Median" Income Households as applicable. Said covenant shall remain in full force and effect for the Affordability Period as set forth in Section 1. 3. Non-Discrimination Covenants. Covenantor covenants by and for itself, it successors and assigns, and all persons claiming under or though them that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, religion, sex, sexual orientation, creed, ancestry, national or ethnic origin, age, family or marital status, handicap or disability, in the sale, transfer, use, occupancy, tenure or enjoyment of the Restricted Unit, nor shall Covenantor itself or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, subtenants, or vendees in the Restricted Unit. Covenantor and its successors and assigns shall refrain from restricting the sale of the Restricted Unit on the basis of race, color, religion, sex, sexual orientation, creed, ancestry, national or ethnic origin, age, family or marital status, handicap or disability, of any person. All such deeds or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clause: (a) In deeds: "The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, religion, sex, sexual orientation, creed, ancestry, national or ethnic origin, age, family or marital status, handicap or disability, in the sale, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee himself or herself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, or vendees in the land herein conveyed. The foregoing covenants shall run with the land." (b) In contracts: "There shall be no discrimination against or segregation of, any person or group of persons on account of race, color, religion, sex, sexual orientation, creed, ancestry, national or ethnic origin, age, family or marital status, handicap or disability, in the sale, transfer, use, occupancy, tenure or enjoyment of the premises, nor shall the transferor himself or herself of any person claiming under or though him or her, establish or 13-3639/90470 4 permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use of occupancy of tenants, subtenants or vendee of the premises." (c) In leases: "The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators, and assignees, and all persons claiming under or though him or her, and this lease is made and accepted upon and subject to the following conditions: "That there shall be no discrimination against or segregation of any person or group of persons on account of race, color, religion, sex, sexual orientation, creed, ancestry, national or ethnic origin, age, family or marital status, handicap or disability, in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the premises herein leased nor shall the lessee himself or herself, or any person claiming under or though him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy of tenants, sublessees, subtenants, or vendees in the premises herein leased." 4. Covenants Do Not Impair Lien. No violation or breach of covenants, conditions, restrictions, provisions or limitations contained in this Agreement shall defeat or render invalid or in any way impair the lien or charge of any mortgage or deed of trust or security interest. 5. Covenants For Benefit of City. All covenants without regard to technical classification or designation shall be binding for the benefit of the Covenantee and such covenants shall run in favor of Covenantee for the entire period during which time such covenants shall be in force and effect, without regard to whether the Covenantee is or remains an owner of any land or interest therein to which such covenants relate. The Covenantee, in the event of any breach of any such covenants, shall have the right to exercise all the rights and remedies and to maintain any such action at law or suits in equity or other proper legal proceedings to enforce and to cure such breach to which it or any other beneficiaries of these covenants may be entitled during the term specified for such covenants, except the covenants against discrimination which may be enforced at law or in equity at any time in perpetuity. 6. Counterparts. This Agreement may be executed in a number of counterparts, each of which shall be an original, but all of which shall constitute one and the same document. 13-3639190470 5 7. Applicable Law. (a) If any provision of this Agreement or portion thereof, or the application of any provision to any person or circumstances, shall to any extent be held invalid, inoperative, or unenforceable, the remainder of this Agreement, or the application of such provision or portion thereof to any other persons or circumstances, shall not be affected thereby and it shall not be deeded that any such invalid provision affects the consideration for this Agreement; and each provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law. (b) This Agreement shall be construed in accordance with the laws of the State of California. [Balance of this page intentionally left blank] 13-3639/90470 6 IN WITNESS WHEREOF, the Covenantee and Covenantor have caused this instrument to be executed on their behalf by their respective officers hereunto duly authorized as of the date set forth above. COVENANTOR: COVENANTEE: RP/PLC BLUE CANVAS, L.L.C., CITY OF HUNTINGTON BEACH a Delaware limited liability company a California municipal corporation Its: Vt 4-1c i°Ra'S tO�'r Mayor jiy I Ierk HOUSING AUTHORITY OF THE CITY OF HUNTINGTON BEACH, a public body c porate and politic By: Deputy Executive Director OVED AS TO^FORM: Y,c ity Atto ne /Agency unsel INITI E APPROVED: Pfann)Oig DKeL11tor REVI ND APPROVED: Cit ' nistrator t 3-3639190470 7 STATE OF CALIFORNIA ) ) ss. COUNTY OF ORANGE ) r On eu/-ly& 201,Z, before me, Notary Public, personally appeared D✓f 1(5L—6'g ka1N6 who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he/&he-executed the same in his/her authorized capacity, and that by his/#ef signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. [SEAL] Signature �J"�i� aJ CtJ( ZUX L PATRICIA ALEXIS HANS0N Commission# 1888030 a =-� Notary Public-California i Z Orange County My Comm.Expires May 2,2014 STATE OF CALIFORNIA ) ) ss. COUNTY OF ORANGE ) On , 2012, before me, Notary Public, personally appeared who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. [SEAL] Signature 13-3639/90470 8 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT CIVIL CODE§1189 c State of California' County of 0xx7 Cc On 6. o2b/.3 before me, —SI"G4� Al, C.s Date Here Insert Name and Title,6f the Officer / personally appeared Name(s)of Signer(s) e who proved to me on the basis of satisfactory evidence to be the persor!�P whose names < are subscribed to the within instrument and acknowledged to me that they executed the same in their_ uthorize capaci ies and that by -hwher(nyy signatureo on the instrument the persona or the entity upon behalf of which the persoroacted, executed the instrument. P. L.E$PAR85 1 certify under PENALTY OF PERJURY under the a -`� Commission # 1857021 laws of the State of California that the foregoing Notary Public California z z `' a Orange County ? paragraph is true and correct. My Comm. Expires Aug 4,2013 WITNESS my hand and official se Signature: ' Place Notary Seal Above gnature of Notary blic OPTIONAL Though the information below is not required bylaw, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Document: ���i o.JS O �✓ rrilcno•�s roti Document Date: !>6 Zo/.A Number of Pages: 41 Signer(s) Other Than Named Above: Capacity(ies) Claimed by Signer(s) Signer's Name: Signer's Name: ❑ Corporate Officer — Title(s): ❑Corporate Officer — Title(s): ❑ Individual ❑ Individual ❑ Partner—❑Limited ❑General ❑ Partner — ❑Limited ❑General ❑ Attorney in Fact ❑Attorney in Fact ❑ Trustee ❑Trustee ❑ Guardian or Conservator ❑Guardian or Conservator ❑ Other: ❑Other: Signer Is Representing: Signer Is Representing: ©2012 National Notary Association •NationalNotary.org• 1-800-US NOTARY(1-800-876-6827) Item#5907 ACKNOWLEDGMENT State of California County of Orange On February 21, 2013 before me, Kathleen Nelson, Notary Public, personally appeared Bob Hall who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. KAI Z i NELSON WITNESS m hand and official seal. Casion-'g9to"o YLIS, NoRu1i ic-CaHiorni® Ormot Caunh► Co .E es Se 23 20t6 Comm. Signatur (Seal) EXHIBIT "A" Legal Description of Restricted Units in Tract 16733 All that certain real property in the City of Huntington Beach, County of Orange, State of California, described as follows: Parcel 1: The "Median-Income Households" consisting of: Units 93 , and 102 , as shown on that certain Condominium Plan Pacific Shores - Phase 10 recorded on October 17, 2012, as Instrument No. 2012000634293 of Official Records of Orange County, California, covering portions of Lot 4 of Tract No. 16733, as per the Map, lying within the boundaries of said Condominium Plan. 13-3639/90470 1 EXHIBIT "B" Designation of Median-Income and Low-Income Household Restricted Units Median-Income Household Restricted Units: Those Units more particularly described as Parcel 1 on Exhibit "A" to this Agreement. Low-Income Household Restricted Units: Those Units more particularly described as Parcel 2 on Exhibit "A" to this Agreement. 13-3639/90470 1 EXHIBIT "C" Promissory Note and Deed of Trust (See Attached) 13-3639/90470 1 OFFICIAL BUSINESS ) Document entitled to free recording per ) Government Code §§ 6103 and 27383 ) Recording Requested By: ) Housing Authority ) of the City of Huntington Beach ) 2000 Main Street ) Huntington Beach, California 92648 ) Attn: Economic Development ) Dept./Housing Division ) SPACE ABOVE THIS LINE FOR RECORDER'S USE PROMISSORY NOTE TO SECURE AFFORDABILITY RESTRICTIONS ON TRANSFER OF PROPERTY THIS PROMISSORY NOTE (the "Note") is dated this day of , 20_, between (collectively, "Promissor") and the Housing Authority of the City of Huntington Beach ("Authority") with reference to the following facts: A. This Promissory Note is made in reference to that property in the City of Huntington Beach, County of Orange, State of California, with the street address Huntington Beach, California 92648, and the Assessor's Parcel No. and the Condominium Plan Tract No. 16733, Phase 10, recorded on October 17, 2012 as Instrument No. 2012000634293 (the "Property"). B. An "Agreement Declaring Conditions, Covenants and Restrictions for Property" was recorded on , 20_, as Instrument Number , in the Office of the County Recorder of the County of Orange, California (the "Resale Restrictions"). Among other things, the Resale Restrictions limit the price that the Property may be sold to an "Affordable Housing Cost" to "Moderate Income Households," as those terms are defined in the Resale Restrictions, and further defined in the current Affordable Housing Regulations of the City of Huntington Beach and the Authority Deed of Trust referred to below. C. Concurrently with executing this Note, Promissor has executed a Deed of Trust securing and modifying the Resale Restrictions (the "Authority of Deed of Trust"). D. Pursuant to the Resale Restrictions, the City has approved the sale of the Property to Promissor at an Affordable Housing Cost. To insure that any further sale, transfer or assignment of the Property occurs with the City's approval and at an Affordable Housing Cost, the City has required as a condition of the Promissor's purchase of the Property that Promissor execute this Note. 13-3639190470 Page 1 of 4 AGREEMENT NOW, THEREFORE, the parties agree as follows: 1. Incorporation of Recitals. The recitals set forth above are incorporated by reference as though fully set forth herein. 2. Amount of the Note. The Amount of this Note is the "Transfer Price" of the Property, less the "Affordable Housing Cost." The Transfer Price shall be determined according to the circumstances that cause the Amount of the Note to become due pursuant to Section 3 of this Note. In the case of the sale of the Property without the City's consent, the Transfer Price shall be the market sales price. In the case of the financing or refinancing of the Property without the City's consent, the Transfer Price shall be the loan amount in excess of the last loan balance on the First Mortgage that the City previously approved. In all other cases, the Transfer Price shall be the fair market value of the Property as established by the Director of Economic Development of the City pursuant to an appraisal. The term "Affordable Housing Cost" shall be defined according to the current Affordable Housing Regulations as adopted by the City of Huntington Beach. Promissor promises to pay the Amount of this Note when due to the Housing Authority at 2000 Main Street, P.O. Box 190, Huntington Beach, California 92648, or at such other address as Authority may direct from time to time in writing. All sums hereunder shall be payable in lawful money of the United States of America and all sums shall be credited first to interest then due and the balance to principal. 3. Due on Sale, Transfer or Refinancing. Promissor agrees to notify the Authority not less than thirty (30) days prior to (i) the sale or transfer of the Property or (ii) any financing or refinancing of the Property. This Note shall be due and payable upon (i) such sale or transfer without the City's consent, (ii) the financing or refinancing of the Property without the City's consent, (iii) Promissor is no longer an occupant of the Property, or (iv) Promissor is in material default of any other obligation under the Resale Restrictions, or the Authority Deed of Trust. 4. Expiration of the Note Obligation. In the event Promissor does not sell or transfer the Property, does not fail to occupy the Property, does not refinance, or is not in material breach of any other provision of the Resale Restrictions or the Agency Deed of Trust before the Sixtieth anniversary of the date of this Note, Promissor shall have no obligation to pay the Note Amount to Authority upon later sale, transfer or refinancing of the Property. 5. Default. The entire unpaid Amount of this Note shall be due and payable in full in the event of a default. The following shall be deemed to be an event of default: a. Failure of Promissor to pay any real property taxes or insurance premiums on the Property as they become due; or b. Any material breach of the Resale Restrictions or the Authority Deed of Trust, following the Authority giving notice of the breach and an opportunity to cure; or 13-3639/90470 Page 2 of 4 C. Failure of Promissor to pay the Note Amount when due. 6. This Note is secured by a Deed of Trust, dated to the City of Huntington Beach, as Trustee, executed by Promissor in favor of the Authority. 7. Notice. All payments, notices, consents, waivers and other communications under this Agreement must be in writing and shall be deemed to have been given when (a) delivered by hand, or, (b) when received by the addressee, if sent by a nationally recognized overnight delivery service (receipt requested), in each case addressed as set forth below: If to PROMISSOR: If to AGENCY: Housing Authority of the City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attention: City Clerk and, Economic Development Director City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 8. Governing Law. This Agreement is governed by and shall be construed in accordance with the laws of the State of California without giving effect to the conflict of laws principles thereof. The parties agree to personal jurisdiction in the State Courts in Orange County, California and specifically waive any claims of forum non conviens. 9. Modification. This Agreement shall not be amended or modified, except in writing, signed by both parties. 10. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the successors and assigns under this Note. This Note shall not be assigned without the express written consent of Agency. Dated: 20 By: HOUSING AUTHORITY OF THE CITY OF HUNTINGTON BEACH Dated: 20 By: Deputy Executive Director 13-3639/90470 Page 3 of 4 APPROVED AS TO FORM OFFICE OF HUNTINGTON BEACH CITY ATTORNEY Dated: , 20 By: Jennifer McGrath, City Attorney 13-3639/90470 Page 4 of 4 OFFICIAL BUSINESS ) Document entitled to free recording per Government ) Code Sections 6103 and 27383 ) Recording Requested By: ) Housing Authority of the City of Huntington Beach ) 2000 Main Street ) Huntington Beach, California 92648 ) Attn: Economic Development Dept./Housing Division ) SPACE ABOVE THIS LINE FOR RECORDER'S USE DEED OF TRUST WITH ASSIGNMENTS OF RENTS TO SECURE AFFORDABILITY RESTRICTIONS ON TRANSFER OF PROPERTY THIS DEED OF TRUST is made this day of 20_, by and between whose address is Huntington Beach, California 92648 (collectively, the "Trustor") and the CITY OF HUNTINGTON BEACH, a municipal corporation (the "Trustee"), and the HOUSING AUTHORITY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic (the "Beneficiary"), whose address is 2000 Main Street, Huntington Beach, California 92648, with reference to the following facts: A. This Deed.of Trust is made in reference to that property in the City of Huntington Beach, County of Orange, State of California, described legally in the Legal Description attached hereto as Exhibit "A" and incorporated herein with the street address , Huntington Beach, California 92648 and the Assessor's Parcel No. and the Plan Tract No. 16733, Phase 10, recorded on October 17, 2012 as Instrument No. 2012000634293 (the "Property"). B. An "Agreement Declaring Conditions, Covenants and Restrictions for Property" was recorded on , 20_, as Instrument Number , in the Office of the County Recorder of the County of Orange, California (the "Resale Restrictions"). Among other things, the Resale Restrictions limit the price that the Property may be sold to an "Affordable Housing Cost" to "Moderate Income Households," as those terms are defined in the Resale Restrictions, and further defined in the current affordable housing regulations of the City of Huntington Beach and this Deed of Trust. C. Pursuant to this Deed of Trust. the Resale Restrictions as applied to the Property are extended to expire sixty (60) years from the date this Deed of Trust is recorded (the "Expiration Date"), which date is approximately , 20_ NOW, THEREFORE, TRUSTOR HEREBY irrevocably grants, transfers and assigns, to Trustee, in trust, with power of sale of the Property, together with (a) all buildings, improvements 13-3639/90470 Page 1 of 12 and fixtures, now or hereafter placed thereon, it being understood and agreed that all classes of property attached or unattached used in connection herewith shall be deemed fixtures, (b) rents, issues and profits thereof, (c) any water rights and/or stock are appurtenant or pertain to said land, and (d) all sums of money payable on the purchase price of the Property secured by a lien thereon or payable under any agreement for the sale thereof, SUBJECT, HOWEVER, to the right, power and authority hereinafter given to and conferred upon Beneficiary to collect and apply such rents, issues and profits, and all sums of money payable on the purchase price of the Property secured by a lien thereon or payable under any agreement. A. FOR THE PURPOSE OF SECURING: 1. Payment of the indebtedness evidenced by a promissory note executed by Trustor on , 20_(the "Note"). The Amount of the indebtedness is the "Transfer Price" of the Property, less the "Affordable Housing Cost." The calculation of the Amount of the indebtedness is set forth with specificity in the Note, which is on file with the Economic Development Department of the City of Huntington Beach. 2. Performance of each and every obligation, covenant, promise and agreement of the Resale Restrictions, as amended by this Deed of Trust. B. TO PROTECT THE SECURITY OF THIS DEED OF TRUST, TRUSTOR AGREES: 1. Trustor agrees for itself, and its successors and assigns, and every successor to Trustor's interest in the Property, or any part thereof that for sixty (60) years from the date this Deed of Trust is recorded (the "Expiration Date"), to perform all obligations due under the Resale Restrictions, as those obligations are restated and modified as set forth below: (a) The Property shall only be owned and occupied by persons or families of "Median-Income." "Median-Income" shall mean persons or families earning one hundred percent (100%) or less of Orange County median income, adjusted for appropriate family size. (b) The Property may only be sold at an "Affordable Housing Cost" to households of"Median-Income," as those terms are defined in current Affordable Housing Regulations as adopted by the City of Huntington Beach. Generally, those Regulations define Affordable Housing Cost to mean that purchase price which would result in monthly housing payments which do not exceed Thirty-Five Percent (35%) of One Hundred Percent (100%) of the current Orange County monthly median income for a household equal to the number of bedrooms in the unit plus one (1) person. In determining monthly housing payments, the City will assume principal and interest payments on a conventional home mortgage after paying a ten percent (10%) down payment. The mortgage interest rate will be the prevailing Fannie Mae thirty (30) year mortgage rate, or a City-selected equivalent. Monthly housing costs will also include homeowner's association dues, utilities, homeowner's insurance, maintenance costs and property taxes. (c) The Trustor shall further comply with the Affordable Housing Guidelines promulgated by the City for purposes of administering the Affordable Housing Program of the City of Huntington Beach. t 3-3639/90470 Page 2 of 12 (d) No transfer of the Property shall occur until the City of Huntington Beach determines (a) that the proposed purchaser intends to occupy the Property as the proposed purchaser's principal residence, (b) that the proposed purchaser is a person or family of Median Income, (c) that the proposed transfer occurs at an Affordable Housing Cost. The City of Huntington Beach shall not be obligated to approve a transfer until and unless the proposed purchaser has submitted to the City of Huntington Beach such information and completed such forms as the City of Huntington Beach shall request to certify the proposed purchaser's intent with respect to its residency of the Property and its gross income, and the proposed purchaser has submitted an affidavit disclosing and certifying the amount of the proposed purchase price. Prior to conveyance of the Property, each approved purchaser shall submit to the City of Huntington Beach an executed disclosure statement which certifies that the purchaser is aware that the purchaser may only sell the unit at an Affordable Housing Cost to a Median Income person or family, that the maximum permitted sales price may be less than fair market value and that the unit must be owner-occupied at all times and cannot be rented or leased. TRUSTOR AND EACH SUCCESSOR, HEIR OR ASSIGN OF TRUSTOR UNDERSTANDS THAT THE DETERMINATION OF THE AFFORDABLE HOUSING COST CAN BE MADE ONLY AT THE TIME OF THE PROPOSED TRANSFER, TAKING INTO CONSIDERATION INTEREST RATES, THE TERMS OF SALE OFFERED TO AND THE ECONOMIC CIRCUMSTANCES OF THE PROPOSED PURCHASER AND OTHER FACTORS THAT CANNOT BE ACCURATELY PREDICTED, AND THAT THE TRANSFER PRICE PERMITTED HEREUNDER MAY BE LESS THAN THE FAIR MARKET VALUE OF THE PROPERTY AND MAY NOT INCREASE OR DECREASE IN THE SAME MANNER AS OTHER SIMILAR REAL PROPERTY WHICH IS NOT ENCUMBERED BY THIS RESTRICTION. TRUSTOR AND EACH SUCCESSOR, HEIR OR ASSIGN OF TRUSTOR FURTHER ACKNOWLEDGES THAT AT ALL TIMES IN SETTING THE TRANSFER PRICE THE PRIMARY OBJECTIVE OF THE BENEFICIARY AND THIS DEED OF TRUST IS TO PROVIDE HOUSING TO ELIGIBLE PERSONS OR FAMILIES AT AN AFFORDABLE HOUSING COST. Trustor Initials Trustor Initials (e) The City of Huntington Beach may impose any conditions on the approval of any transfer of the Property as it determines are reasonably necessary for the effective administration of its Affordable Housing Program. (f) The Covenants contained in this Section 1 shall run with the land and shall automatically terminate and be of no further force or effect sixty (60) years from the date this Deed of Trust is recorded, which date is approximately 13-3639/90470 Page 3 of 12 2. Trustor covenants by and for itself, its successors and assigns, and all persons claiming under or through them that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the said property, nor shall Trustor itself or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in said property. Trustor and its successors and assigns, shall refrain from restricting the rental or lease (if permitted by Trustor) or sale of said property on the basis of race, color, religion, sex, marital status, national origin or ancestry of any person. All such deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: (a) In deeds: "The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee himself or herself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessee or vendees in the land herein conveyed. The foregoing covenants shall run with the land." (b) In leases: "The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through him or her,. and this lease is made and accepted upon and subject to the following conditions: "There shall be no discrimination against or segregation of any person or group of persons on account of race, color, religion, sex, marital status, ancestry or national origin in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the premises herein leased nor shall the lessee himself or herself, or any person claiming under to through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sublessees, subtenants or vendees in the premises herein leased." (c) In contracts: "There shall be no discrimination against or segregation of, any person, or group of persons on account of race, color, religion, sex, marital status, ancestry or national origin, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the premises, nor shall the transferee himself or herself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessee or vendees of the premises." 13-3639/90470 Page 4 of 12 Nothing in this Section 2 shall be construed to authorize the rental or lease of the Property if such rental or lease is not otherwise permitted. The covenants in this paragraph shall run with the land in perpetuity. 3. No violation or breach of the covenants, conditions, restrictions, provisions or limitations contained in this Deed of Trust shall defeat or render invalid or in any way impair the lien or charge of any mortgage or deed of trust or security interest. 4. Trustor has made certain representations and disclosures as a requirement under the Resale Restrictions in order to induce Beneficiary to approve the sale of the Property to Trustor. In the event that Trustor has made any material misrepresentation or failed to disclose any material fact regarding said transaction, Beneficiary at its option and without notice, shall have the right to declare a material breach of the Resale Restrictions and the Note. Beneficiary may make a written declaration of default and demand for sale as in paragraph No. 6 herein set forth. Trustee, upon presentation to it of an affidavit signed by Beneficiary setting forth facts showing a default by Trustor under this paragraph, is authorized to accept as true and conclusive all facts and statements therein, and to act thereon hereunder. 5. All covenants without regard to technical classification or designation shall be binding for the benefit of the Beneficiary and such covenants shall run in favor of the Beneficiary for the entire period during which such covenants shall be in force and effect, without regard to whether the Beneficiary is or remains an owner of any land or interest therein to which such covenants relate. The Beneficiary, in the event of any breach of any such covenants, shall have the right to exercise all the rights and remedies and to maintain any action at law or suits in equity or other proper legal proceedings to enforce and to cure such breach to which it or any other beneficiaries of these covenants may be entitled during the term specified for such covenants, except the covenants against discrimination which may be enforced at law or in equity at any time in perpetuity. 6. Upon default by Trustor in the obligations of the Note, in the performance of any obligation under this Deed of Trust or under the terms of any First Lender's Deed of Trust which is or appears to be prior or superior to this Deed of Trust, Beneficiary may declare all sums secured by this Deed of Trust immediately due and payable by delivering to Trustee of a written declaration of default and demand for sale and a written notice of default and election to sell the Property. Default in the payment of any indebtedness secured by this Deed of Trust, in the obligation of the Note, or in the performance of any agreement under this Deed of Trust constitutes a default only under this Deed of Trust and the Note and does not constitute a default under the First Deed of Trust. Trustee shall cause the notice of default to be recorded. Beneficiary also shall deposit with Trustee this Deed of Trust, the Note, and all documents evidencing any additional expenditures secured by this Deed of Trust. After the lapse of such time as then may be required by law following recordation of such notice of default, and notice of sale having been given as then required by law, Trustee, without demand on Trustor, shall sell the Property at the time and place fixed by it in such notice of sale, whether as a whole or in separate parcels, and in such order as it may determine, at public auction to the highest bidder qualified under the Resale Restrictions and this Deed of Trust in lawful money of the United States, payable at time of sale. Trustee may postpone sale of all or any portion of the Property by 13-3639/90470 Page 5 of 12 public announcement at such time and place of sale, and from time to time thereafter may postpone such sale by public announcement at the time fixed by the preceding postponement. Trustee shall deliver to such purchaser its Deed conveying the Property so sold, but without any covenant or warranty, express or implied. The recital in such Deed of any matters of fact shall be conclusive of the truthfulness thereof. Any person, including Trustor, Trustee, or Beneficiary as hereinafter defined, may purchase at such sale. Trustee may also sell at any such sale and as part thereof any shares of corporate stock securing the obligations secured hereby, and Trustor waives demand and notice of such sale. (Beneficiary at its option may also foreclose on such shares by independent pledge sale, and Trustor waives demand and notice of such sale.) After deducting all costs, fees and expenses of Trustee, and of this Trust, including cost of evidence of title in connection with this sale, Trustee shall apply the proceeds of sale to payment, first; all sums expended under the teams hereof, not then repaid, with accrued interest at the rate then payable under the First Lender Deed of Trust secured hereby, and then of all other sums secured hereby, and, if there are any proceeds remaining, shall distribute them to the person or persons legally entitled thereto. 7. Trustor shall keep the Property in good condition and repair; to allow Beneficiary or its representatives to enter and inspect the Property at all reasonable times and access thereto, shall be permitted for that purpose; not to remove or demolish any building thereon; not to make alterations thereto without the consent of the Beneficiary; to suffer or permit no change in the general nature of the occupancy of the Property without Beneficiary's written consent; to complete or restore promptly and in good workmanlike manner any building which may be constructed, damaged or destroyed thereon, including, without restricting the generality of the foregoing, damage from termites and dry-rot; to pay when due all claims for labor performed-and materials furnished in connection with the Property and not to permit any mechanic's lien against the Property; to comply with all laws affecting the Property or requiring any alterations or improvements to be made thereon-, not to initiate or acquiesce in any zoning reclassification without Beneficiary's written consent; not to commit or permit waste thereon; not to commit, suffer or permit any act upon the Property in violation of the law; to paint, cultivate, irrigate, fertilize, fumigate, prune, and do all other acts that from the character or use of the Property may be reasonably necessary; and to promptly pay all amounts due others upon agreements of lease or conditional sale of all fixtures, furnishings and equipment located thereon. 8. Trustor shall provide, and maintain in force at all times with respect to the Property, fire and other types of insurance as may be required by Beneficiary. All of such insurance shall have a loss payable endorsement in favor of Beneficiary, shall be for a term and in form, content, amount and in such companies as may be satisfactory to Beneficiary, and the policies therefore shall be delivered to and remain in possession of Beneficiary as further security for the faithful performance of these trusts. At least thirty (30) days prior to the expiration of any such insurance policy, a policy or policies renewing or extending such expiring insurance shall be delivered to Beneficiary together with written evidence showing payment of the premium therefore and, in the event any such insurance policy and evidence of the payment of the premium therefore are not so delivered by Trustor to Beneficiary, Trustor by executing this Deed of Trust specifically requests Beneficiary to obtain such insurance and Beneficiary, without obligation to do so, without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof, may obtain such insurance through or from any 13-3639/90470 Page 6 of 12 insurance agency or company acceptable to it, pay the premium thereof, and may add the amount thereof to the indebtedness secured hereby, which amount shall bear a like rate of interest. Beneficiary may furnish to any insurance agency or company, or any other person, any information contained in or extracted from any insurance policy delivered to Beneficiary pursuant hereto and any information concerning the loan secured hereby. Neither Trustee nor Beneficiary shall be responsible for such insurance or for the collection of any insurance monies, or for any insolvency of any insurer or insurance underwriter. In case of insurance loss, Beneficiary is hereby authorized either (a) to settle and adjust any claim under the insurance policies provided for in this document without the consent of the Trustor, or (b) to allow Trustor to agree with the insurance company or companies on the amount to be paid upon the loss. In either case, the Beneficiary is authorized to collect and make receipt of any such insurance money. If Trustor is obligated to restore or replace the damaged or destroyed buildings or improvements under the terms of any lease or leases which are or may be prior to the lien of this Deed of Trust and such damage or destruction does not result in cancellation or termination of such lease, such proceeds, after deducting therefrom any expenses incurred in the collection thereof, shall be used to reimburse the Trustor for the cost of rebuilding or restoring the buildings or improvements on said premises. In all other cases, such insurance proceeds shall either be applied for the cost of the rebuilding or restoring the buildings or improvements on said premises. Such buildings and improvements shall be so restored or rebuilt as to be of at least equal value and substantially the same character as prior to the damage or destruction, and shall be in a condition satisfactory to Beneficiary. Such application or release shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. Any and all unexpired insurance shall inure to the benefit of, and pass to the purchaser of, the property conveyed at any Trustee sale held hereunder. 9. Trustor shall pay: (a) at least ten (10) days before delinquency, all general and special City and County taxes, and all assessments on appurtenant water stock, affecting the Property, (b) when done, all special assessments for public improvements, without permitting any improvement bond to issue for any special assessment, (c) when done, all encumbrances, charges and liens, with interest, on the Property, or any part thereof, which are or appears to be prior to superior hereto, (d) if the security of this Deed of Trust is leasehold estate, to make any payment or do any act required of the Lessee or its successor in interest under the terms of the instrument or instruments creating said leasehold, (e) all costs, fees and expenses of this trust, (f) for any statement regarding the obligation secured hereby any amount demanded by Beneficiary not to exceed the maximum allowed by law thereof at the time when such request is made, (g) such other charges for services rendered by Beneficiary and furnished at Trustor's request or that of any successor in interest to Trustor as the Beneficiary may deem reasonable. 10. Should Trustor fail to make any payment or do any act as provided in this Deed of Trust, the Beneficiary or Trustee, but without obligation to do so and without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof, may (a) make or do the same in such manner and to such extent as either may deem necessary to protect the security hereof, Beneficiary or Trustee being authorized to enter upon the Property for such purposes, (b) commence, appear in, or defend any action or proceeding purporting to affect the security hereof or the property covered by this Deed of Trust, or the rights or powers of Beneficiary or Trustee, (c) pay, purchase, contest or compromise any encumbrance, charge or lien, which in the judgment of either is or appears to be prior or superior hereto, and (d) in exercising any such 13-3639/90470 Page 7 of 12 powers, pay necessary expenses, employ counsel and pay his reasonable fees. Trustor agrees to repay any amount so expended on demand of Beneficiary, and any amount so expended may be added by Beneficiary to the indebtedness secured hereby and shall bear a like rate of interest. 11. Trustor shall appear in and defend any action or proceeding purporting to affect the security hereof or the Property which is covered by this Deed of Trust, or the rights or powers of Beneficiary or Trustee, and whether or not Trustor so appears or defends, to pay all costs and expenses, including cost of evidence of title and attorney's fees in a reasonable sum, in any such action or proceeding in which Beneficiary or Trustee may appear by virtue of being made a party defendant or otherwise irrespective of whether the interest of Beneficiary or Trustee in the Property is directly questioned by such action, including any action for the condemnation or partition of said premises, and in any suit brought by Beneficiary to foreclose this Deed of Trust. 12. Trustor shall pay immediately and without demand, all sums expended under the terms of this Deed of Trust by Beneficiary or Trustee, with interest from the date of expenditure at the rate which the principal obligation secured hereby bears at the time such payment is made, and the repayment of such sums shall be secured hereby. 13. Should Trustor or any successor in interest to Trustor in the Property drill or extract, or enter into a lease for drilling or extraction of oil, gas or other hydrocarbon substances or any mineral of any kind or character, or sell, convey, further encumber, or alienate the Property, or any party thereof, or any interest therein, or be divested of his title or any interest therein in any manner or way, whether voluntarily or involuntarily, Beneficiary shall have the right, at its option, to declare any obligations secured hereby irrespective of the maturity date specified in any Note evidencing the same, immediately due and payable, and no-waiver of this right shall be effective unless in writing. 14. Any award, settlement or damages for injury or damages to the Property, or in construction with the transaction financed by such loan, and any award of damages in connection with any condemnation for public use of or injury to the Property, or any part thereof, is hereby assigned and shall be paid to Beneficiary, who may apply or release such monies received by it in such manner and with the same effect as above provided for the disposition of proceeds of fire or other insurance. 15. By accepting payment of any sums secured by this Deed of Trust after its due date, or by making any payment, performing any act on behalf of Trustor, that Trustor was obligated hereunder, but failed, to make, or perform, or by adding any payment so made by Beneficiary to the indebtedness secured hereby, Beneficiary does not waive its right either to require prompt payment when due of all other sums so secured or to declare a default for failure so to pay. 16. At any time, or from time to time, without liability of the Beneficiary or Trustee thereof, and without notice, upon written request of Beneficiary and presentation of this Deed of Trust and the Note secured hereby for endorsement, and without affecting the personal liability of any person for payment of the indebtedness secured hereby, or the lien of the Deed of Trust upon the remainder of the Property for the full amount of the indebtedness then or thereafter secured hereby, or the rights or powers of Beneficiary or the Trustee with respect to the 13-3639190470 Page 8 of 12 remainder of the Property, Trustee may: (a) reconvey any part of the Property, (b) consent to the making of any map or plat thereof; (c)join in granting any easement thereon, (d)join in any agreement subordinating the lien or charge hereof. 17. The lien hereof shall remain in full force and effect during any postponement or extension of time of payment of the indebtedness secured hereby, or any part thereof. 18. As additiorial security, Trustor irrevocably assigns to Beneficiary the rents, issues, and profits of the Property for the purposes and upon the terms and conditions set forth below. This assignment shall not impose upon Beneficiary any duty to produce rents from the property affected by this Deed of Trust, or cause Authority to be (a) "mortgages in possession" for any purpose; (b) responsible for performing any of the obligations of the lessor under any lease; or (c) responsible for any waste committed by lessees or any other parties, for any dangerous or defective condition of the property affected by this Deed of Trust, or for any negligence in the management, upkeep, or control of such rights to rents, issues and profits is not contingent upon, and may be exercised without possession of, the property affected by this Deed of Trust. Beneficiary confers upon Trustor a license ("License") to collect and retain the rents, issues and profits of the property affected by this Deed of Trust as they become due and payable, until the occurrence of a default hereunder. Upon such default, the License shall be automatically revoked and Beneficiary may collect and retain the rents, issues and profits without notice and without taking possessions of the property affected by this Deed of Trust. This right to collect rents, issues and profits shall not grant to Beneficiary or Trustee the right to possession, except as otherwise provided herein; and neither said right, nor termination of the License, shall impose upon Beneficiary or Trustee the duty to produce rents, issues or profits or maintain all or any part of the Property affected by this Trust Deed. If Trustor shall default as aforesaid, -Trustor's right to collect any such money shall cease and Beneficiary shall have the right, with or without taking possession of the property affected hereby, to collect all rents, issues, royalties and profits and shall be authorized to, and may, without notice and irrespective of whether declaration of default has been delivered to Trustee and without regard to the adequacy of the security for the indebtedness secured hereby, either personally or by attorney or agent without bringing any action or proceeding, or by receiver to be appointed by the Court, enter into possession and hold, occupy, possess and enjoy the Property, make, cancel, enforce and modify leases, obtain and eject tenants, and set and modify rents and terms of rents, and to sue, and to take, receive and collect all or any part of the said rents, issues, and profits of the property affected hereby, and after paying such costs of maintenance, operation of the Property, and of collection including reasonable attorneys' fees, as in its judgment it may deem proper, to apply the balance upon any indebtedness then secured hereby, the rents, issues, royalties and profits of the Property being hereby assigned to Beneficiary for said purposes. The acceptance of such rents, issues, royalties and profits shall not constitute a waiver of any other right which Trustee or Beneficiary may enjoy under this Deed of Trust or under the laws of California. Failure of or discontinuance by Beneficiary at any time, or from time to time, to collect any such rents, issues, royalties or profits shall not in any manner affect the subsequent enforcement by Beneficiary of the right, power and authority to collect the same. The receipt and application by said Beneficiary of all such rents, issues, royalties and profits pursuant hereto, after execution and delivery of declaration of default and demand for sale as hereinafter provided, or during the pendency of Trustee's sale 13-3639/90470 Page 9 of 12 proceedings hereunder, shall not cure such breach or default nor affect sale proceedings, or any sale made pursuant thereto, but such rents, issues, royalties and profits, less all costs of operation, maintenance, collection and reasonable attorneys' fees, when received by Beneficiary, shall be applied in reduction of the indebtedness secured hereby, from time to time, in such order as Beneficiary may determine. Nothing contained herein, nor the exercise of the right by Beneficiary to collect, shall be, or be construed to be, an affirmation by Beneficiary of any tenancy, lease or option, nor an assumption of liability under, nor subordination of the lien or charge of this Deed of Trust to, any such tenancy, lease or option. 19. If the security of this Deed of Trust is a leasehold estate, the Trustor agrees that: (a) the term "Lease" as used herein shall mean the lease creating the "leasehold estate"' (b) Trustor shall not amend, change or modify his leasehold interest, or the Lease, or agree to do so, without the written consent of the Beneficiary; (c) Trustor will promptly advise Beneficiary regarding any notice, request or demand received by him from the lessor under the Lease and promptly furnish Beneficiary with a copy of any such notice, request or demand; (d) as long as any of the indebtedness secured hereby shall remain unpaid, unless the Beneficiary shall otherwise consent thereto in writing, the leasehold estate shall not merge with the fee title but shall always be kept separate and distinct, notwithstanding the union of said estates in any party; (e) Trustor agrees that it will promptly, strictly, and faithfully perform, fulfill, and comply with all covenants, agreements, terms, conditions and provisions under any lease affecting the premises and to neither do anything, nor to permit anything to be done which may cause modification or termination of any such lease or of the obligations of any lessee or person claiming through such lease or the rents provided for therein or the interest of the lessor or the Beneficiary therein or thereunder. Trustor further agrees he will not execute a Deed of Trust or mortgage which may be or become superior to any leasehold estate that is security for this Deed of Trust. In the event of a violation of any of the covenants set forth in this paragraph, Beneficiary shall have the right, at its option, to declare all sums secured hereby immediately due and payable. Consent to or waiver of one of said violations shall not-be deemed to be a consent to or waiver of any other violation. If the security for this Deed of Trust is a leasehold estate, the term "property" as used in this Deed of Trust shall be deemed to mean the leasehold estate whenever the context so requires for the protection of the Beneficiary. 20. Trustor waives, to the fullest extent permissible by law, the right to plead any statute of limitations as a defense to any demand secured hereby. 21. Beneficiary may, from time to time, by instrument in writing, substitute a successor or successors to any Trustee named herein or acting hereunder, which instrument, executed and acknowledged by Beneficiary and recorded in the office of the recorder of the county or counties where the Property is situated, shall be conclusive proof of property substitution of such successor Trustee or Trustees, who shall, without conveyances from the Trustee predecessor, succeed to all its title, estate, rights, powers and duties, including but not limited to the power to reconvey the whole or any part of the property covered by this Deed of Trust. Such instrument must contain the name of the original Trustor, Trustee and Beneficiary hereunder, the book and page where this Deed of Trust is recorded. If notice of default shall have been recorded, this power of substitution cannot be exercised until after the costs, fees and expenses of the then acting Trustee shall have been paid to such Trustee, who shall endorse receipt thereof upon 13-3639/90470 Page 10 of 12 such instrument. The procedures herein provided for substitution of Trustee shall not be exclusive of other provisions for substitution provided by law. 22. This Deed of Trust applies to, inures to the benefit of, and binds all parties hereto, their heirs, legatees, devisees, administrators, executors, successors and assigns. The term "Beneficiary" shall mean the owner and holder, including pledgee, of the Note secured hereby, whether or not names as Beneficiary herein. In this Deed of Trust, whenever the context so requires, the masculine gender includes the feminine and/or neuter, and the singular number includes the plural. 23. That in the event of a demand for, and the preparation and delivery of a written statement regarding the obligations secured by this Deed of Trust pursuant to Sections 2943 and 2954 of the Civil Code of California, Beneficiary shall be entitled to make a reasonable charge, not exceeding the maximum amount which is permitted by law at the time the statement is furnished. Beneficiary may also charge Trustor a reasonable fee for any other services rendered to Trustor or rendered in Trustor's behalf in connection with the Property of this Deed of Trust, including changing Beneficiary's records, pertaining to this Deed of Trust in connection with the transfer of the Property, or releasing an existing policy of fire insurance or other casualty insurance held by Beneficiary and replacing the same with another such policy. 24. Trustee accepts this Trust when this Deed of Trust, duly executed and acknowledged, is made a public record as provided by law. Trustee is not obligated to notify any party hereto of pending sale under any other Deed of Trust or of any action or proceeding in which Trustor, Beneficiary, or Trustee shall be a party unless brought by Trustee. 25. Any notice which any party hereto may desire or be required to give to the other party shall be in writing. The mailing thereof must be certified mail addressed to the Trustor at his address hereinabove set forth or to the Beneficiary at his office or at such other place as such parties hereto may designate in writing. [Balance of this page intentionally left blank] 13-3639/90470 Page 11 of 12 THE UNDERSIGNED TRUSTOR REQUESTS that a copy of any notice of default and of any notice of sale hereunder be mailed to him at his address hereinbefore set forth. TRUSTOR Dated: , 20 By: HOUSING AUTHORITY OF THE CITY OF HUNTINGTON BEACH Dated: , 20 BY: Deputy Executive Director CITY OF HUNTINGTON BEACH Dated: , 20 BY� Assistant City Manager APPROVED AS TO FORM OFFICE OF HUNTINGTON BEACH CITY ATTORNEY By: Dated: , 20 Jennifer McGrath, City Attorney 13-3639/90470 Page 12 of 12 This Document was electronically recorded by City of Huntington Beach Recorded in Official Records, Orange County RECORDING REQUESTED BY: ) Tom Daly, Clerk-Recorder > �II �� II II IIIIIIIIIII I 11111111111111111111111111111 IIIINO FEE 2012000581067 04:06pm 10/02/12 AND WHEN RECORDED MAIL TO:) 47 410 Al2 29 0.00 0.00 0.00 0.00 84.00 0.00 0.00 0.00 City Clerk ) City of Huntington Beach ) 2000 Main Street ) Huntington Beach, CA 92648 ) (Space Above for Recorder's Use) AGREEMENT DECLARING CONDITIONS, COVENANTS AND RESTRICTIONS FOR PROPERTY Tft dwmwtir somy for the of w (RESALE RESTRICTIONS) Ndnm of the CPtyofHuntington as car G&Mnmwt Code SM 8103 and shoW be This Agreement Declaring Conditions, Covenants and Restrictions for Property (the "Agreement") is made as of August 20, 2012 , by and between RP/PLC BLUE CANVAS, L.L.C., a Delaware limited liability company (the "Covenantor"), and THE CITY OF HUNTINGTON BEACH, a California municipal corporation (the "City"), and the HOUSING AUTHORITY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic (the "Authority"). Collectively, the City and Authority will be referred to as the "Covenantee". RECITALS A. Covenantor is the owner of record of that certain real property located in the City of Huntington Beach, County of Orange, State of California legally described in the attached Exhibit "A". B. On September 2, 2008, the City Council approved Tract No. 16733, as per map recorded as Instrument No. 2008000531659 in Book 897, Pages 10 through 14 of Miscellaneous Maps, Records of Orange County, California ("Project"). City imposed conditions of approval on the Project, requiring Covenantor to submit an Affordable Housing Agreement, in accordance with the Affordable Housing Program, for review by the Planning Department and approval by the City Attorney and acceptance by the City Council. The City further required that the plan shall provide ten percent (10%) of the total 201 units equaling 21 units to be restricted as set forth herein ("Restricted Units"), 3 of which are to be affordable housing for household earning less than 80% of the Orange County Median Income and 18 of which are to be affordable housing for households earning no more than 100% of the Orange County Median Income, in both cases for a period of sixty (60) years. The execution and recordation of this Agreement is intended to fully satisfy that condition. NOW, THEREFORE, the parties hereto agree and covenant as follows: 1. Affordability Covenants. Covenantor agrees for itself and its successor and assigns, and every successor to Covenantor's interest in the Restricted Unit, or any part thereof, that the Project located at Newland Street and Noelle Drive, which consists of a total of 201 12-3453/83481 1 residential condominium units, shall be designated as affordable and shall be held subject to this Agreement for sixty (60) years from the date of the close of escrow for the initial sale of each such Restricted Unit built in Tract No. 16733 as follows: (a) Eighteen (18) Restricted Units as further designated on Exhibit "B" attached hereto shall only be owned and occupied by "Median-Income Households", which shall mean persons or families earning not more than 100% of the Orange County median income, adjusted for household size appropriate for the property as determined by the Agency based on statistics published by the United States Department of Housing & Urban Development or established by the State of California, pursuant to Health and Safety Code Section 50093, or a successor statute. (b) These eighteen (18) Medium-Income Restricted Units shall only be sold at an "Affordable Housing Cost" to "Median-Income Households." (c) Three (3) Restricted Units as further designated on Exhibit "B" attached hereto shall only be owned and occupied by "Low-Income Households", which shall mean persons or families earning less than 80% of the Orange County median income, adjusted for household size appropriate for the property as determined by the Agency based on statistics published by the United States Department of Housing & Urban Development or established by the State of California, pursuant to Health and Safety Code Section 50093, or a successor statute. (d) These three (3) Low-Income Restricted Units shall only be sold at an "Affordable Housing Cost" to "Low-income Households." (e) "Affordable Housing Cost" shall mean the permitted gross sales price of the Restricted Unit as set forth in the Affordable Housing Price/Income Guidelines or successor guidelines published, from time to time, by the City for such purpose. (f) The term of this Agreement shall commence on the date of the initial sale of each Restricted Unit to a qualifying purchaser as evidenced by a deed recorded with the Orange County Recorder's Office and shall continue for sixty years from said date ("Affordability Period"). The covenant contained in this Section 1 shall run with the Restricted Unit and shall automatically terminate and be of no further force or effect upon the expiration of the Affordability Period. (g) Purchasers of the Restricted Units identified above shall enter into a promissory note and deed of trust in the forms attached hereto as Exhibit "C". 2. Transfer of Restricted Unit; Consent of Agency. During the Affordability Period no transfer of a Restricted Unit shall occur until the City determines: (a) that the proposed purchaser intends to occupy the Restricted Unit as the proposed purchaser's principal residence, (b) that the proposed purchaser is a "Low", or "Median" Income Household as provided in Section 1 above, and 12-3453/83481 2 (c) that the proposed transfer occurs at an Affordable Housing Cost. (d) The Restricted Units shall be constructed prior to or concurrent with the primary Project. (e) In the event that the Covenantor (including successors and assigns) desires to sell the Restricted Unit, Covenantor shall send written notice thereof to the City at the following address: City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attention: Director of Economic Development Within seven (7) days of receiving such notice, the City shall send Covenantor transfer application forms prepared by the City. Such forms shall contain a certification of the proposed purchaser's intent with respect to his/her/its residency of the Restricted Unit and his/her/its gross income, and an affidavit of the proposed purchaser disclosing and certifying the amount of the proposed purchase price. The City shall not be obligated to approve a transfer unless and until the proposed purchaser has submitted to the City such information and completed such forms. In the interest of expediting the close of escrow for such proposed transactions, the City shall reasonably approve or disapprove such submissions as soon as practicable after submission of such forms, and in no event later than fourteen (14) days after submission of a completed form. Prior to conveyance of the Restricted Unit, each approved purchaser shall also submit to the City an executed disclosure statement which certifies that the purchaser is aware that: (i) the purchaser buying the Restricted Unit may only sell the Restricted Unit at an Affordable Housing cost to a "Low" or "Median" Income Household as provided in Section 1 above, (ii) the maximum permitted sales price may be less than fair market value and (iii) the Restricted Unit must be owner-occupied at all times and cannot be rented or leased. The approved purchaser shall also submit an executed promissory, trust deed, notice documents, and any other documentation required by the City to effectuate the Affordable Housing Program. Covenantor shall cooperate with the City in providing such forms to proposed purchasers and in assisting proposed purchasers to prepare such forms and to provide any required information to the City in connection with only the Covenantor's sale of the Restricted Unit, provided that the Covenantor shall not be obligated to incur any out-of-pocket costs in connection therewith, other than employee time dedicated to providing such assistance. THE COVENANTOR AND EACH SUCCESSOR, HEIR, OR ASSIGN OR COVENANTOR UNDERSTAND THAT THE DETERMINATION OF THE AFFORDABLE HOUSING COST CAN BE MADE ONLY AT THE TIME OF THE PROPOSED TRANSFER, TAKING INTO CONSIDERATION INTEREST RATES, THE TERMS OF SALE OFFERED TO, AND THE ECONOMIC CIRCUMSTANCES OF, THE PROPOSED PURCHASER AND OTHER FACTORS THAT CANNOT BE ACCURATELY PREDICTED, AND THAT THE TRANSFER PRICE PERMITTED HEREUNDER MAY BE LESS THAN THE FAIR MARKET VALUE OF THE PROPERTY AND MAY NOT INCREASE OR DECREASE IN THE SAME MANNER AS OTHER SIMILAR REAL PROPERTY 12-3453/83481 3 WHICH IS NOT ENCUMBERED BY THIS RESTRICTION. COVENANTOR AND EACH SUCCESSOR, HEIR, OR ASSIGN OF COVENANTOR FURTHER ACKNOWLEDGES THAT AT ALL TIMES IN SETTING-THE TRANSFER PRICE, THE PRIMARY OBJECTIVE OF THE CITY AND THIS AGREEMENT IS TO PROVIDE HOUSING TO "LOW" OR "MEDIAN" INCOME HOUSEHOLDS AT AN AFFORDABLE HOUSING COST. ve Covenantor's Initials Covenantor shall include in the escrow instructions and Purchase and Sale Agreements with purchaser a provision which requires each purchaser to record a covenant which will run with the land and bind all successors-in-interest or.assignees that will ensure that all subsequent purchasers and occupants qualify as "Low" or "Median" Income Households as applicable. Said covenant shall remain in full force and effect for the Affordability Period as set forth in Section 1. 3. Non-Discrimination Covenants. Covenantor covenants by and for itself, it successors and assigns, and all persons claiming under or though them that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, religion, sex, sexual orientation, creed, ancestry, national or ethnic origin, age, family or marital status, handicap or disability, in the sale, transfer, use, occupancy, tenure or enjoyment of the Restricted Unit, nor shall Covenantor itself or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, subtenants, or vendees in the Restricted Unit. Covenantor and its successors and assigns shall refrain from restricting the sale of the Restricted Unit on the basis of race, color, religion, sex, sexual orientation, creed, ancestry, national or ethnic origin, age, family or marital status, handicap or disability, of any person. All such deeds or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clause: (a) In deeds: "The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, religion, sex, sexual orientation, creed, ancestry, national or ethnic origin, age, family or marital status, handicap or disability, in the sale, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee himself or herself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, or vendees in the land herein conveyed. The foregoing covenants shall run with the land." (b) In contracts: "There shall be no discrimination against or segregation of, any person or group of persons on account of race, color, religion, sex, sexual orientation, creed, ancestry, national or ethnic origin, age, family or marital status, handicap or disability, in the sale, transfer, use, occupancy, tenure or enjoyment of the premises, nor shall the transferor himself or herself of any person claiming under or though him or her, establish or 12-3453/83481 4 permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use of occupancy of tenants, subtenants or vendee of the premises." (c) In leases: "The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators, and assignees, and all persons claiming under or though him or her, and this lease is made and accepted upon and subject to the following conditions: "That there shall be no discrimination against or segregation of any person or group of persons on account of race, color, religion, sex, sexual orientation, creed, ancestry, national or ethnic origin, age, family or marital status, handicap or disability, in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the premises herein leased nor shall the lessee himself or herself, or any person claiming under or though him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy of tenants, sublessees, subtenants, or vendees in the premises herein leased." 4. Covenants Do Not Impair Lien. No violation or breach of covenants, conditions, restrictions, provisions or limitations contained in this Agreement shall defeat or render invalid or in any way impair the lien or charge of any mortgage or deed of trust or security interest. 5. Covenants For Benefit of City. All covenants without regard to technical classification or designation shall be binding for the benefit of the Covenantee and such covenants shall run in favor of Covenantee for the entire period during which time such covenants shall be in force and effect, without regard to whether the Covenantee is or remains an owner of any land or interest therein to which such covenants relate. The Covenantee, in the event of any breach of any such covenants, shall have the right to exercise all the rights and remedies and to maintain any such action at law or suits in equity or other proper legal proceedings to enforce and to cure such breach to which it or any other beneficiaries of these covenants may be entitled during the term specified for such covenants, except the covenants against discrimination which may be enforced at law or in equity at any time in perpetuity. 6. Counterparts. This Agreement may be executed in a number of counterparts, each of which shall be an original, but all of which shall constitute one and the same document. 12-3453/83481 5 7. Applicable Law. (a) If any provision of this Agreement or portion thereof, or the application of any provision to any person or circumstances, shall to any extent be held invalid, inoperative, or unenforceable, the remainder of this Agreement, or the application of such provision or portion thereof to any other persons or circumstances, shall not be affected thereby and it shall not be deeded that any such invalid provision affects the consideration for this Agreement; and each provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law. (b) This Agreement shall be construed in accordance with the laws of the State of California. [Balance of this page intentionally left blank] 12-3453/83481 6 IN WITNESS WHEREOF, the Covenantee and Covenantor have caused this instrument to be executed on their behalf by their respective officers hereunto duly authorized as of the date set forth above. -- COVENANTOR: COVENANTEE: RP/PLC BLUE CANVAS, L.L.C., CITY OF HUNTINGTON BEACH a Delaware limited liability company a California municipal corporation By: c Ma or Its: E rk HOUSING AUTHORITY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic By: Deputy Executive Director APPROVED AS TO FORM: '�A itx Attorney /Agen ns INITIAT ® A D P ROVED: Plan ing Director RE VIE D APPROVED: City d r strator 12-3453/83481 7 STATE OF CALIFORNIA ) ) ss. COUNTY OF ORANGE ) On 2012, before me, c)� Notary Public, personally appeared D/fIL)«I o'64-& o jJ who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he/s#e executed the same in his/her-authorized capacity, and that by his/her signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. n a [SEAL] Signature .yw _, PATRICIA ALEXIS HANSON Commission# 1888030 a �� Notary Public-California z Z 'Pt Z Orange County My Comm.Expires May 2,2014 STATE OF CALIFORNIA ) ) ss. COUNTY OF ORANGE ) On 2012, before me, Notary Public, personally appeared who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. [SEAL] Signature 12-3453/83481 8 ACKNOWLEDGMENT State of California County of Orange On September 17, 2012 before me, Kathleen Nelson, Notary Public, personally appeared Bob Udall who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. �iNNNIiN i11mIiINpiIgNNNNIiNNNWlgigmNpNqpqNNNNIIpqqNm}f' KATHLEEN NELSON WITNESS my hand and official seal. _ COMM.#1814694 Notary Public-California Orange County M�Comm.Expires Sa; 23 2012 Ittgm tntnttn Imnlntlunmtn=I puutmu Isms"1�NNImN r Signature (Seal) ACKNOWLEDGMENT STATE OF CALIFORNIA ) ) ss COUNTY OF ORANGE ) On October 1, 2012, before me, P. L. Esparza, Notary Public, personally appeared Joan L. Flynn and Donald F. Hansen, Jr. who proved to me on the basis of satisfactory evidence to be the persons whose names are subscribed to the within instrument and acknowledged to me that they executed the same in their authorized capacities, and that by their signatures on the instrument the persons, or the entity upon behalf of which the persons acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. P.L.ESPARZA WITNESS my hand and official seal. Commission#r 857021 < .d Notary Public-C California i Orange County My Comm.Ex ires Au 4.2013 (Seal) (Notary Sig natu;A EXHIBIT"A" Legal Description of Restricted Units in Tract 16733 All that certain real property in the City of Huntington Beach, County of Orange, State of California, described as follows: Parcel l: The "Median-Income Households" consisting of: Units 168 and 177 , as shown on that certain Condominium Plan Pacific Shores-Phase 6 recorded on July 9, 2012, as Instrument No. 2012000388345 of Official Records of Orange County, California, covering Lot 9 of Tract No. 16733, as per the Map, lying within the boundaries of said Condominium Plan. EXHIBIT "B" Designation of Median-Income and Low-Income Household Restricted Units Median-Income Household Restricted Units: Those Units more particularly described as Parcel 1 on Exhibit "A" to this Agreement. Low-Income Household Restricted Units: Those Units more particularly described as Parcel 2 on Exhibit "A" to this Agreement. 12-3453163461 1 EXHIBIT "C" Promissory Note and Deed of Trust (See Attached) 12-3453/83481 1 OFFICIAL BUSINESS ) Document entitled to free recording per ) Government Code §§ 6103 and 27383 ) Recording Requested By: ) Housing Authority ) of the City of Huntington Beach ) 2000 Main Street ) Huntington Beach,California 92648 ) Attn: Economic Development ) Dept./Housing Division ) SPACE ABOVE THIS LINE FOR RECORDER'S USE PROMISSORY NOTE TO SECURE AFFORDABILITY RESTRICTIONS ON TRANSFER OF PROPERTY THIS PROMISSORY NOTE (the "Note") is dated this day of , 20 between (collectively, "Promissor") and the Housing Authority of the City of Huntington Beach ("Authority") with reference to the following facts: A. This Promissory Note is made in reference to that property in the City of Huntington Beach, County of Orange, State of California, with the street address Huntington Beach, California 92648, and the Assessor's Parcel No. and the Condominium Plan Tract No. 16733, Phase 6, recorded on July 9, 2012 as Instrument No. 2012000388345 (the "Property"). B. An "Agreement Declaring Conditions, Covenants and Restrictions for Property" was recorded on , 20_, as Instrument Number , in the Office of the County Recorder of the County of Orange, California (the "Resale Restrictions"). Among other things, the Resale Restrictions limit the price that the Property may be sold to an "Affordable Housing Cost" to "Moderate Income Households," as those terms are defined in the Resale Restrictions, and further defined in the current Affordable Housing Regulations of the City of Huntington Beach and the Authority Deed of Trust referred to below. C. Concurrently with executing this Note, Promissor has executed a Deed of Trust securing and modifying the Resale Restrictions (the "Authority of Deed of Trust"). D. Pursuant to the Resale Restrictions, the City has approved the sale of the Property to Promissor at an Affordable Housing Cost. To insure that any further sale, transfer or assignment of the Property occurs with the City's approval and at an Affordable Housing Cost, the City has required as a condition of the Promissor's purchase of the Property that Promissor execute this Note. 12-3453/83481 Page 1 of 4 AGREEMENT NOW, THEREFORE, the parties agree as follows: 1. Incorporation of Recitals. The recitals set forth above are incorporated by reference as though fully set forth herein. 2. Amount of the Note. The Amount of this Note is the "Transfer Price" of the Property, less the "Affordable Housing Cost." The Transfer Price shall be determined according to the circumstances that cause the Amount of the Note to become due pursuant to Section 3 of this Note. In the case of the sale of the Property without the City's consent, the Transfer Price shall be the market sales price. In the case of the financing or refinancing of the Property without the City's consent, the Transfer Price shall be the loan amount in excess of the last loan balance on the First Mortgage that the City previously approved. In all other cases, the Transfer Price shall be the fair market value of the Property as established by the Director of Economic Development of the City pursuant to an appraisal. The term "Affordable Housing Cost" shall be defined according to the current Affordable Housing Regulations as adopted by the City of Huntington Beach. Promissor promises to pay the Amount of this Note when due to the Housing Authority at 2000 Main Street, P.O. Box 190, Huntington Beach, California 92648, or at such other address as Authority may direct from time to time in writing. All sums hereunder shall be payable in lawful money of the United States of America and all sums shall be credited first to interest then due and the balance to principal. 3. Due on Sale, Transfer or Refinancing. Promissor agrees to notify the Authority not less than thirty (30) days prior to (i) the sale or transfer of the Property or (ii) any financing or refinancing of the Property. This Note shall be due and payable upon (i) such sale or transfer without the City's consent, (ii) the financing or refinancing of the Property without the City's consent, (iii) Promissor is no longer an occupant of the Property, or (iv) Promissor is in material default of any other obligation under the Resale Restrictions, or the Authority Deed of Trust. 4. Expiration of the Note Obligation. In the event Promissor does not sell or transfer the Property, does not fail to occupy the Property, does not refinance, or is not in material breach of any other provision of the Resale Restrictions or the Agency Deed of Trust before the Sixtieth anniversary of the date of this Note, Promissor shall have no obligation to pay the Note Amount to Authority upon later sale, transfer or refinancing of the Property. 5. Default. The entire unpaid Amount of this Note shall be due and payable in full in the event of a default. The following shall be deemed to be an event of default: a. Failure of Promissor to pay any real property taxes or insurance premiums on the Property as they become due; or b. Any material breach of the Resale Restrictions or the Authority Deed of Trust, following the Authority giving notice of the breach and an opportunity to cure; or 12-3453183481 Page 2 of 4 C. Failure of Promissor to pay the Note Amount when due. 6. This Note is secured by a Deed of Trust, dated , to the City of Huntington Beach, as Trustee, executed by Promissor in favor of the Authority. 7. Notice. All payments, notices, consents, waivers and other communications under this Agreement must be in writing and shall be deemed to have been given when (a) delivered by hand, or, (b) when received by the addressee, if sent by a nationally recognized overnight delivery service (receipt requested), in each case addressed as set forth below: If to PROMISSOR: If to AGENCY: Housing Authority of the City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attention: City Clerk and, Economic Development Director City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 8. Governing Law. This Agreement is governed by and shall be construed in accordance with the laws of the State of California without giving effect to the conflict of laws principles thereof. The parties agree to personal jurisdiction in the State Courts in Orange County, California and specifically waive any claims of forum non conviens. 9. Modification. This Agreement shall not be amended or modified, except in writing, signed by both parties. 10. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the successors and assigns under this Note. This Note shall not be assigned without the express written consent of Agency. Dated: 20 By: HOUSING AUTHORITY OF THE CITY OF HUNTINGTON BEACH Dated: 20 By: Deputy Executive Director 12-3453/83481 Page 3 of 4 APPROVED AS TO FORD OFFICE OF HUNTINGTON BEACH CITY ATTORNEY ---- Dated: , 20 By: Jennifer McGrath, City Attorney 12-3453/83481 Page 4 of 4 OFFICIAL BUSINESS ) Document entitled to free recording per Government ) Code Sections 6103 and 27383 ) Recording Requested By: ) Housing Authority of the City of Huntington Beach ) 2000 Main Street ) Huntington Beach, California 92648 ) Attn: Economic Development Dept./Housing Division ) SPACE ABOVE THIS LINE FOR RECORDER'S USE DEED OF TRUST WITH ASSIGNMENTS OF RENTS TO SECURE AFFORDABILITY RESTRICTIONS ON TRANSFER OF PROPERTY THIS DEED OF TRUST is made this day of 20_, by and between whose address is Huntington Beach, California 92648 (Collectively, the "Trustor") and the CITY OF HUNTINGTON BEACH, a municipal corporation (the "Trustee"), and the HOUSING AUTHORITY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic (the "Beneficiary"), whose address is 2000 Main Street, Huntington Beach, California 92648, with reference to the following facts: A. This Deed of Trust is made in reference to that property in the City of Huntington Beach, County of Orange, State of California, described legally in the Legal Description attached hereto as Exhibit "A" and incorporated herein with the street address Huntington Beach, California 92648 and the Assessor's Parcel No. and the Plan Tract No. 16733, Phase 6, recorded on July 9, 2012 as Instrument No. 2012000388345 (the "Property"). B. An "Agreement Declaring Conditions, Covenants and Restrictions for Property" was recorded on , 20_, as Instrument Number , in the Office of the County Recorder of the County of Orange, California (the "Resale Restrictions"). Among other things, the Resale Restrictions limit the price that the Property may be sold to an "Affordable Housing Cost" to "Moderate Income Households," as those terms are defined in the Resale Restrictions, and further defined in the current affordable housing regulations of the City of Huntington Beach and this Deed of Trust. C. Pursuant to this Deed of Trust. the Resale Restrictions as applied to the Property are extended to expire sixty (60) years from the date this Deed of Trust is recorded (the "Expiration Date"), which date is approximately , 20_. NOW, THEREFORE, TRUSTOR HEREBY irrevocably grants, transfers and assigns, to Trustee, in trust, with power of sale of the Property, together with (a) all buildings, improvements 12-3453/83481 Page 1 of 12 and fixtures, now or hereafter placed thereon, it being understood and agreed that all classes of property attached or unattached used in connection herewith shall be deemed fixtures, (b) rents, issues and profits thereof, (c) any water rights and/or stock are appurtenant or pertain to said land, and (d) all sums of money payable on the purchase price of the Property secured by a lien thereon or payable under any agreement for the sale thereof, SUBJECT, HOWEVER, to the right, power and authority hereinafter given to and conferred upon Beneficiary to collect and apply such rents, issues and profits, and all sums of money payable on the purchase price of the Property secured by a lien thereon or payable under any agreement. A. FOR THE PURPOSE OF SECURING: 1. Payment of the indebtedness evidenced by a promissory note executed by Trustor on , 20_ (the "Note"). The Amount of the indebtedness is the "Transfer Price" of the Property, less the "Affordable Housing Cost." The calculation of the Amount of the indebtedness is set forth with specificity in the Note, which is on file with the Economic Development Department of the City of Huntington Beach. 2. Performance of each and every obligation, covenant, promise and agreement of the Resale Restrictions, as amended by this Deed of Trust. B. TO PROTECT THE SECURITY OF THIS DEED OF TRUST, TRUSTOR AGREES: 1. Trustor agrees for itself, and its successors and assigns, and every successor to Trustor's interest in the Property, or any part thereof that for sixty (60) years from the date this Deed of Trust is recorded (the "Expiration Date"), to perform all obligations due under the Resale Restrictions, as those obligations are restated and modified as set forth below: (a) The Property shall only be owned and occupied by persons or families of "Median-Income." "Median-Income" shall mean persons or families earning one hundred percent (100%) or less of Orange County median income, adjusted for appropriate family size. (b) The Property may only be sold at an "Affordable Housing Cost" to households of"Median-Income," as those terms are defined in current Affordable Housing Regulations as adopted by the City of Huntington Beach. Generally, those Regulations define Affordable Housing Cost to mean that purchase price which would result in monthly housing payments which do not exceed Thirty-Five Percent (35%) of One Hundred Percent (100%) of the current Orange County monthly median income for a household equal to the number of bedrooms in the unit plus one (1) person. In determining monthly housing payments, the City will assume principal and interest payments on a conventional home mortgage after paying a ten percent (10%) down payment. The mortgage interest rate will be the prevailing Fannie Mae thirty (30) year mortgage rate, or a City-selected equivalent. Monthly housing costs will also include homeowner's association dues, utilities, homeowner's insurance, maintenance costs and property taxes. (c) The Trustor shall further comply with the Affordable Housing Guidelines promulgated by the City for purposes of administering the Affordable Housing Program of the City of Huntington Beach. 12-3453/83481 Page 2 of 12 (d) No transfer of the Property shall occur until the City of Huntington Beach .- - determines (a) that the proposed purchaser intends to occupy the Property as the proposed purchaser's principal residence, (b) that the proposed purchaser is a person or family of Median Income, (c) that the proposed transfer occurs at an Affordable Housing Cost. The City of Huntington Beach shall not be obligated to approve a transfer until and unless the proposed purchaser has submitted to the City of Huntington Beach such information and completed such forms as the City of Huntington Beach shall request to certify the proposed purchaser's intent with respect to its residency of the Property and its gross income, and the proposed purchaser has submitted an affidavit disclosing and certifying the amount of the proposed purchase price. Prior to conveyance of the Property, each approved purchaser shall submit to the City of Huntington Beach an executed disclosure statement which certifies that the purchaser is aware that the purchaser may only sell the unit at an Affordable Housing Cost to a Median Income person or family, that the maximum permitted sales price may be less than fair market value and that the unit must be owner-occupied at all times and cannot be rented or leased. TRUSTOR AND EACH SUCCESSOR, HEIR OR ASSIGN OF TRUSTOR UNDERSTANDS THAT THE DETERMINATION OF THE AFFORDABLE HOUSING COST CAN BE MADE ONLY AT THE TIME OF THE PROPOSED TRANSFER, TAKING INTO CONSIDERATION INTEREST RATES, THE TERMS OF SALE OFFERED TO AND THE ECONOMIC CIRCUMSTANCES OF THE PROPOSED PURCHASER AND OTHER FACTORS THAT CANNOT BE ACCURATELY PREDICTED, AND THAT THE TRANSFER PRICE PERMITTED HEREUNDER MAY BE LESS THAN THE FAIR MARKET VALUE OF THE PROPERTY AND MAY NOT INCREASE OR DECREASE IN THE SAME MANNER AS OTHER SIMILAR REAL PROPERTY WHICH IS NOT ENCUMBERED BY THIS RESTRICTION. TRUSTOR AND EACH SUCCESSOR, HEIR OR ASSIGN OF TRUSTOR FURTHER ACKNOWLEDGES THAT AT ALL TIMES IN SETTING THE TRANSFER PRICE THE PRIMARY OBJECTIVE OF THE BENEFICIARY AND THIS DEED OF TRUST IS TO PROVIDE HOUSING TO ELIGIBLE PERSONS OR FAMILIES AT AN AFFORDABLE HOUSING COST. Trustor Initials Trustor Initials (e) The City of Huntington Beach may impose any conditions on the approval of any transfer of the Property as it determines are reasonably necessary for the effective administration of its Affordable Housing Program. (f) The Covenants contained in this Section 1 shall run with the land and shall automatically terminate and be of no further force or effect sixty (60) years from the date this Deed of Trust is recorded, which date is approximately 12-3453183481 Page 3 of 12 2. Trustor covenants by and for itself, its successors and assigns, and all persons claiming under or through them that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the said property, nor shall Trustor itself or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in said property. Trustor and its successors and assigns, shall refrain from restricting the rental or lease (if permitted by Trustor) or sale of said property on the basis of race, color, religion, sex, marital status, national origin or ancestry of any person. All such deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: (a) In deeds: "The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee himself or herself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessee or vendees in the land herein conveyed. The foregoing covenants shall run with the land." (b) In leases: "The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through him or her,. and this lease is made and accepted upon and subject to the following conditions: "There shall be no discrimination against or segregation of any person or group of persons on account of race, color, religion, sex, marital status, ancestry or national origin in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the premises herein leased nor shall the lessee himself or herself, or any person claiming under to through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sublessees, subtenants or vendees in the premises herein leased." (c) In contracts: "There shall be no discrimination against or segregation of, any person, or group of persons on account of race, color, religion, sex, marital status, ancestry or national origin, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the premises, nor shall the transferee himself or herself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessee or vendees of the premises." 12-3453/83481 Page 4 of 12 Nothing in this Section 2 shall be construed to authorize the rental or lease of the Property if such rental or lease is not otherwise permitted. The covenants in this paragraph shall run with the land in perpetuity. 3. No violation or breach of the covenants, conditions, restrictions, provisions or limitations contained in this Deed of Trust shall defeat or render invalid or in any way impair the lien or charge of any mortgage or deed of trust or security interest. 4. Trustor has made certain representations and disclosures as a requirement under the Resale Restrictions in order to induce Beneficiary to approve the sale of the Property to Trustor. In the event that Trustor has made any material misrepresentation or failed to disclose any material fact regarding said transaction, Beneficiary at its option and without notice, shall have the right to declare a material breach of the Resale Restrictions and the Note. Beneficiary may make a written declaration of default and demand for sale as in paragraph No. 6 herein set forth. Trustee, upon presentation to it of an affidavit signed by Beneficiary setting forth facts showing a default by Trustor under this paragraph, is authorized to accept as true and conclusive all facts and statements therein, and to act thereon hereunder. 5. All covenants without regard to technical classification or designation shall be binding for the benefit of the Beneficiary and such covenants shall run in favor of the Beneficiary for the entire period during which such covenants shall be in force and effect, without regard to whether the Beneficiary is or remains an owner of any land or interest therein to which such covenants relate. The Beneficiary, in the event of any breach of any such covenants, shall have the right to exercise all the rights and remedies and to maintain any action at law or suits in equity or other proper legal proceedings to enforce and to cure such breach to which it or any other beneficiaries of these covenants may be entitled during the term specified for such covenants, except the covenants against discrimination which may be enforced at law or in equity at any time in perpetuity. 6. Upon default by Trustor in the obligations of the Note, in the performance of any obligation under this Deed of Trust or under the terms of any First Lender's Deed of Trust which is or appears to be prior or superior to this Deed of Trust, Beneficiary may declare all sums secured by this Deed of Trust immediately due and payable by delivering to Trustee of a written declaration of default and demand for sale and a written notice of default and election to sell the Property. Default in the payment of any indebtedness secured by this Deed of Trust, in the obligation of the Note, or in the performance of any agreement under this Deed of Trust constitutes a default only under this Deed of Trust and the Note and does not constitute a default under the First Deed of Trust. Trustee shall cause the notice of default to be recorded. Beneficiary also shall deposit with Trustee this Deed of Trust, the Note, and all documents evidencing any additional expenditures secured by this Deed of Trust. After the lapse of such time as then may be required by law following recordation of such notice of default, and notice of sale having been given as then required by law, Trustee, without demand on Trustor, shall sell the Property at the time and place fixed by it in such notice of sale, whether as a whole or in separate parcels, and in such order as it may determine, at public auction to the highest bidder qualified under the Resale Restrictions and this Deed of Trust in lawful money of the United States, payable at time of sale. Trustee may postpone sale of all or any portion of the Property by 12-3453/83481 Page 5 of 12 public announcement at such time and place of sale, and from time to time thereafter may postpone such sale by public announcement at the time fixed by the preceding postponement. Trustee shall deliver to such purchaser its Deed conveying the Property so sold, but without any. covenant or warranty, express or implied. The recital in such Deed of any matters of fact shall be conclusive of the truthfulness thereof. Any person, including Trustor, Trustee, or Beneficiary as hereinafter defined, may purchase at such sale. Trustee may also sell at any such sale and as part thereof any shares of corporate stock securing the obligations secured hereby, and Trustor waives demand and notice of such sale. (Beneficiary at its option may also foreclose on such shares by independent pledge sale, and Trustor waives demand and notice of such sale.) After deducting all costs, fees and expenses of Trustee, and of this Trust, including cost of evidence of title in connection with this sale, Trustee shall apply the proceeds of sale to payment, first; all sums expended under the teams hereof, not then repaid, with accrued interest at the rate then payable under the First Lender Deed of Trust secured hereby, and then of all other sums secured hereby, and, if there are any proceeds remaining, shall distribute them to the person or persons legally entitled thereto. 7. Trustor shall keep the Property in good condition and repair; to allow Beneficiary or its representatives to enter and inspect the Property at all reasonable times and access thereto, shall be permitted for that purpose; not to remove or demolish any building thereon; not to make alterations thereto without the consent of the Beneficiary; to suffer or permit no change in the general nature of the occupancy of the Property without Beneficiary's written consent; to complete or restore promptly and in good workmanlike manner any building which may be constructed, damaged or destroyed thereon, including, without restricting the generality of the foregoing, damage from termites and dry-rot; to pay when due all claims for labor performed and materials furnished in connection with the Property and not to permit any mechanic's lien against the Property; to comply with all laws affecting the Property or requiring any alterations or improvements to be made thereon; not to initiate or acquiesce in any zoning reclassification without Beneficiary's written consent; not to commit or permit waste thereon; not to commit, suffer or permit any act upon the Property in violation of the law; to paint, cultivate, irrigate, fertilize, fumigate, prune, and do all other acts that from the character or use of the Property may be reasonably necessary; and to promptly pay all amounts due others upon agreements of lease or conditional sale of all fixtures, furnishings and equipment located thereon. 8. Trustor shall provide, and maintain in force at all times with respect to the Property, fire and other types of insurance as may be required by Beneficiary. All of such insurance shall have a loss payable endorsement in favor of Beneficiary, shall be for a term and in form, content, amount and in such companies as may be satisfactory to Beneficiary, and the policies therefore shall be delivered to and remain in possession of Beneficiary as further security for the faithful performance of these trusts. At least thirty (30) days prior to the expiration of any such insurance policy, a policy or policies renewing or extending such expiring insurance shall be delivered to Beneficiary together with written evidence showing payment of the premium therefore and, in the event any such insurance policy and evidence of the payment of the premium therefore are not so delivered by Trustor to Beneficiary, Trustor by executing this Deed of Trust specifically requests Beneficiary to obtain such insurance and Beneficiary, without obligation to do so, without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof, may obtain such insurance through or from any 12-3453183481 Page 6 of 12 insurance agency or company acceptable to it, pay the premium thereof, and may add the amount thereof to the indebtedness secured hereby, which amount shall bear a like rate of interest. Beneficiary may furnish to any insurance agency or company, or any other person; - - any information contained in or extracted from any insurance policy delivered to Beneficiary pursuant hereto and any information concerning the loan secured hereby. Neither Trustee nor Beneficiary shall be responsible for such insurance or for the collection of any insurance monies, or for any insolvency of any insurer or insurance underwriter. In case of insurance loss, Beneficiary is hereby authorized either (a) to settle and adjust any claim under the insurance policies provided for in this document without the consent of the Trustor, or (b) to allow Trustor to agree with the insurance company or companies on the amount to be paid upon the loss. In either case, the Beneficiary is authorized to collect and make receipt of any such insurance money. If Trustor is obligated to restore or replace the damaged or destroyed buildings or improvements under the terms of any lease or leases which are or may be prior to the lien of this Deed of Trust and such damage or destruction does not result in cancellation or termination of such lease, such proceeds, after deducting therefrom any expenses incurred in the collection thereof, shall be used to reimburse the Trustor for the cost of rebuilding or restoring the buildings or improvements on said premises. In all other cases, such insurance proceeds shall either be applied for the cost of the rebuilding or restoring the buildings or improvements on said premises. Such buildings and improvements shall be so restored or rebuilt as to be of at least equal value and substantially the same character as prior to the damage or destruction, and shall be in a condition satisfactory to Beneficiary. Such application or release shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. Any and all unexpired insurance shall inure to the benefit of, and pass to the purchaser of, the property conveyed at any Trustee sale held hereunder. 9. Trustor shall pay: (a) at least ten (10) days before delinquency, all general and special City and County taxes, and all assessments on appurtenant water stock, affecting the Property, (b) when done, all special assessments for public improvements, without permitting any improvement bond to issue for any special assessment, (c) when done, all encumbrances, charges and liens, with interest, on the Property, or any part thereof, which are or appears to be prior to superior hereto, (d) if the security of this Deed of Trust is leasehold estate, to make any payment or do any act required of the Lessee or its successor in interest under the terms of the instrument or instruments creating said leasehold, (e) all costs, fees and expenses of this trust, (f) for any statement regarding the obligation secured hereby any amount demanded by Beneficiary not to exceed the maximum allowed by law thereof at the time when such request is made, (g) such other charges for services rendered by Beneficiary and furnished at Trustor's request or that of any successor in interest to Trustor as the Beneficiary may deem reasonable. 10. Should Trustor fail to make any payment or do any act as provided in this Deed of Trust, the Beneficiary or Trustee, but without obligation to do so and without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof, may (a) make or do the same in such manner and to such extent as either may deem necessary to protect the security hereof, Beneficiary or Trustee being authorized to enter upon the Property for such purposes, (b) commence, appear in, or defend any action or proceeding purporting to affect the security hereof or the property covered by this Deed of Trust, or the rights or powers of Beneficiary or Trustee, (c) pay, purchase, contest or compromise any encumbrance, charge or lien, which in the judgment of either is or appears to be prior or superior hereto, and (d) in exercising any such 12-3453183481 Page 7 of 12 powers, pay necessary expenses, employ counsel and pay his reasonable fees. Trustor agrees to repay any amount so expended on demand of Beneficiary, and any amount so expended may be added by Beneficiary to the indebtedness secured hereby and shall bear a like rate of interest. 11. Trustor shall appear in and defend any action or proceeding purporting to affect the security hereof or the Property which is covered by this Deed of Trust, or the rights or powers of Beneficiary or Trustee, and whether or not Trustor so appears or defends, to pay all costs and expenses, including cost of evidence of title and attorney's fees in a reasonable sum, in any such action or proceeding in which Beneficiary or Trustee may appear by virtue of being made a party defendant or otherwise irrespective of whether the interest of Beneficiary or Trustee in the Property is directly questioned by such action, including any action for the condemnation or partition of said premises, and in any suit brought by Beneficiary to foreclose this Deed of Trust. 12. Trustor shall pay immediately and without demand, all sums expended under the terms of this Deed of Trust by Beneficiary or Trustee, with interest from the date of expenditure at the rate which the principal obligation secured hereby bears at the time such payment is made, and the repayment of such sums shall be secured hereby. 13. Should Trustor or any successor in interest to Trustor in the Property drill or extract, or enter into a lease for drilling or extraction of oil, gas or other hydrocarbon substances or any mineral of any kind or character, or sell, convey, further encumber, or alienate the Property, or any party thereof, or any interest therein, or be divested of his title or any interest therein in any manner or way, whether voluntarily or involuntarily, Beneficiary shall have the right, at its option, to declare any obligations secured hereby irrespective of the maturity date specified in any Note evidencing the same, immediately due and payable, and no waiver of this right shall be effective unless in writing. 14. Any award, settlement or damages for injury or damages to the Property, or in construction with the transaction financed by such loan, and any award of damages in connection with any condemnation for public use of or injury to the Property, or any part thereof, is hereby assigned and shall be paid to Beneficiary, who may apply or release such monies received by it in such manner and with the same effect as above provided for the disposition of proceeds of fire or other insurance. 15. By accepting payment of any sums secured by this Deed of Trust after its due date, or by making any payment, performing any act on behalf of Trustor, that Trustor was obligated hereunder, but failed, to make, or perform, or by adding any payment so made by Beneficiary to the indebtedness secured hereby, Beneficiary does not waive its right either to require prompt payment when due of all other sums so secured or to declare a default for failure so to pay. 16. At any time, or from time to time, without liability of the Beneficiary or Trustee thereof, and without notice, upon written request of Beneficiary and presentation of this Deed of Trust and the Note secured hereby for endorsement, and without affecting the personal liability of any person for payment of the indebtedness secured hereby, or the lien of the Deed of Trust upon the remainder of the Property for the full amount of the indebtedness then or thereafter secured hereby, or the rights or powers of Beneficiary or the Trustee with respect to the _ 12-3453/83481 Page 8 of 12 remainder of the Property, Trustee may: (a) reconvey any part of the Property, (b) consent to the making of any map or plat thereof; (c)join in granting any easement thereon, (d)join in any agreement subordinating the lien or charge hereof. 17. The lien hereof shall remain in full force and effect during any postponement or extension of time of payment of the indebtedness secured hereby, or any part thereof. 18. As additional security, Trustor irrevocably assigns to Beneficiary the rents, issues, and profits of the Property for the purposes and upon the terms and conditions set forth below. This assignment shall not impose upon Beneficiary any duty to produce rents from the property affected by this Deed of Trust, or cause Authority to be (a) "mortgages in possession" for any purpose; (b) responsible for performing any of the obligations of the lessor under any lease; or (c) responsible for any waste committed by lessees or any other parties, for any dangerous or defective condition of the property affected by this Deed of Trust, or for any negligence in the management, upkeep, or control of such rights to rents, issues and profits is not contingent upon, and may be exercised without possession of, the property affected by this Deed of Trust. Beneficiary confers upon Trustor a license ("License") to collect and retain the rents, issues and profits of the property affected by this Deed of Trust as they become due and payable, until the occurrence of a default hereunder. Upon such default, the License shall be automatically revoked and Beneficiary may collect and retain the rents, issues and profits without notice and without taking possessions of the property affected by this Deed of Trust. This right to collect rents, issues and profits shall not grant to Beneficiary or Trustee the right to possession, except as otherwise provided herein; and neither said right, nor termination of the License, shall impose upon Beneficiary or Trustee the duty to produce rents, issues or profits or maintain all or any part of the Property affected by this Trust Deed. If Trustor shall default as aforesaid, Trustor's right to collect any such money shall cease and Beneficiary shall have the right, with or without taking possession of the property affected hereby, to collect all rents, issues, royalties and profits and shall be authorized to, and may, without notice and irrespective of whether declaration of default has been delivered to Trustee and without regard to the adequacy of the security for the indebtedness secured hereby, either personally or by attorney or agent without bringing any action or proceeding, or by receiver to be appointed by the Court, enter into possession and hold, occupy, possess and enjoy the Property, make, cancel, enforce and modify leases, obtain and eject tenants, and set and modify rents and terms of rents, and to sue, and to take, receive and collect all or any part of the said rents, issues, and profits of the property affected hereby, and after paying such costs of maintenance, operation of the Property, and of collection including reasonable attorneys' fees, as in its judgment it may deem proper, to apply the balance upon any indebtedness then secured hereby, the rents, issues, royalties and profits of the Property being hereby assigned to Beneficiary for said purposes. The acceptance of such rents, issues, royalties and profits shall not constitute a waiver of any other right which Trustee or Beneficiary may enjoy under this Deed of Trust or under the laws of California. Failure of or discontinuance by Beneficiary at any time, or from time to time, to collect any such rents, issues, royalties or profits shall not in any manner affect the subsequent enforcement by Beneficiary of the right, power and authority to collect the same. The receipt and application by said Beneficiary of all such rents, issues, royalties and profits pursuant hereto, after execution and delivery of declaration of default and demand for sale as hereinafter provided, or during the pendency of Trustee's sale 1 2-34 5 318 34 8 1 Page 9 of 12 proceedings hereunder, shall not cure such breach or default nor affect sale proceedings, or any sale made pursuant thereto, but such rents, issues, royalties and profits, less all costs of operation, maintenance, collection and reasonable attorneys' fees, when received by Beneficiary, shall be applied in reduction of the indebtedness secured hereby, from time to time, in such order as Beneficiary may determine. Nothing contained herein, nor the exercise of the right by Beneficiary to collect, shall be, or be construed to be, an affirmation by Beneficiary of any tenancy, lease or option, nor an assumption of liability under, nor subordination of the lien or charge of this Deed of Trust to, any such tenancy, lease or option. 19. If the security of this Deed of Trust is a leasehold estate, the Trustor agrees that: (a) the term "Lease" as used herein shall mean the lease creating the "leasehold estate"' (b) Trustor shall not amend, change or modify his leasehold interest, or the Lease, or agree to do so, without the written consent of the Beneficiary; (c) Trustor will promptly advise Beneficiary regarding any notice, request or demand received by him from the lessor under the Lease and promptly furnish Beneficiary with a copy of any such notice, request or demand; (d) as long as any of the indebtedness secured hereby shall remain unpaid, unless the Beneficiary shall otherwise consent thereto in writing, the leasehold estate shall not merge with the fee title but shall always be kept separate and distinct, notwithstanding the union of said estates in any party, (e) Trustor agrees that it will promptly, strictly, and faithfully perform, fulfill, and comply with all covenants, agreements, terms, conditions and provisions under any lease affecting the premises and to neither do anything, nor to permit anything to be done which may cause modification or termination of any such lease or of the obligations of any lessee or person claiming through such lease or the rents provided for therein or the interest of the lessor or the Beneficiary therein or thereunder. Trustor further agrees he will not execute a Deed of Trust or mortgage which may be or become superior to any leasehold estate that is security for this Deed of Trust. In the event of a violation of any of the covenants set forth in this paragraph, Beneficiary shall have the right, at its option, to declare all sums secured hereby immediately due and payable. Consent to or waiver of one of said violations shall not be deemed to be a consent to or waiver of any other violation. If the security for this Deed of Trust is a leasehold estate, the term "property" as used in this Deed of Trust shall be deemed to mean the leasehold estate whenever the context so requires for the protection of the Beneficiary. 20. Trustor waives, to the fullest extent permissible by law, the right to plead any statute of limitations as a defense to any demand secured hereby. 21. Beneficiary may, from time to time, by instrument in writing, substitute a successor or successors to any Trustee named herein or acting hereunder, which instrument, executed and acknowledged by Beneficiary and recorded in the office of the recorder of the county or counties where the Property is situated, shall be conclusive proof of property substitution of such successor Trustee or Trustees, who shall, without conveyances from the Trustee predecessor, succeed to all its title, estate, rights, powers and duties, including but not limited to the power to reconvey the whole or any part of the property covered by this Deed of Trust. Such instrument must contain the name of the original Trustor, Trustee and Beneficiary hereunder, the book.and page where this Deed of Trust is recorded. If notice of default shall have been recorded, this power of substitution cannot be exercised until after the costs, fees and expenses of the then acting Trustee shall have been paid to such Trustee, who shall endorse receipt thereof upon 12-3453/83481 Page 10 of 12 such instrument. The procedures herein provided for substitution of Trustee shall not be exclusive of other provisions for substitution provided by law. 22. This Deed of Trust applies to, inures to the benefit of, and binds all parties hereto, their heirs, legatees, devisees, administrators, executors, successors and assigns. The term "Beneficiary" shall mean the owner and holder, including pledgee, of the Note secured hereby, whether or not names as Beneficiary herein. In this Deed of Trust, whenever the context so requires, the masculine gender includes the feminine and/or neuter, and the singular number includes the plural. 23. That in the event of a demand for, and the preparation and delivery of a written statement regarding the obligations secured by this Deed of Trust pursuant to Sections 2943 and 2954 of the Civil Code of California, Beneficiary shall be entitled to make a reasonable charge, not exceeding the maximum amount which is permitted by law at the time the statement is furnished. Beneficiary may also charge Trustor a reasonable fee for any other services rendered to Trustor or rendered in Trustor's behalf in connection with the Property of this Deed of Trust, including changing Beneficiary's records, pertaining to this Deed of Trust in connection with the transfer of the Property, or releasing an existing policy of fire insurance or other casualty insurance held by Beneficiary and replacing the same with another such policy. 24. Trustee accepts this Trust when this Deed of Trust, duly executed and acknowledged, is made a public record as provided by law. Trustee is not obligated to notify any party hereto of pending sale under any other Deed of Trust or of any action or proceeding in which Trustor, Beneficiary, or Trustee shall be a party unless brought by Trustee. 25. Any notice which any party hereto may desire or be required to give to the other party shall be in writing. The mailing thereof must be certified mail addressed to the Trustor at his address hereinabove set forth or to the Beneficiary at his office or at such other place as such parties hereto may designate in writing. [Balance of this page intentionally left blank] 12-3453/83481 Page 11 of 12 THE UNDERSIGNED TRUSTOR REQUESTS that a copy of any notice of default and of any notice of sale hereunder be mailed to him at his address hereinbefore set forth. TRUSTOR Dated: , 20 By: HOUSING AUTHORITY OF THE CITY OF HUNTINGTON BEACH Dated: , 20 By: Deputy Executive Director CITY OF HUNTINGTON BEACH Dated: , 20 By: Deputy City Manager APPROVED AS TO FORM OFFICE OF HUNTINGTON BEACH CITY ATTORNEY By: Dated: , 20 Jennifer McGrath, City Attorney 12-3453/83481 Page 12 of 12 Recorded in Official Records, Orange County RECORDING REQUESTED BY: ) Tom Daly, Clerk-Recorder ) II ��; Ili �IIIIIIII II III��IIIIIIIIIIIIIII IIIi�III;����II NO FEE * :b K 0 0 0 4 8 6 4 6 4 8 $ > 201200031852510:19 am 06/05112 AND WHEN RECORDED MAIL TO:) 10 414 Al2 28 0.00 0.00 0.00 0.00 81.00 0.00 0.00 0.00 City Clerk ) City of Huntington Beach ) 2000 Main Street ) Huntington Beach, CA 92648 ) {f049`039 300D-MOD U24 OV (Space Above for Recorder's Use) AGREEMENT DECLARING CONDITIONS, COVENANTS AND RESTRICTIONS FOR PROPERTY (RESALE RESTRICTIONS) This Agreement Declaring Conditions, Covenants and Restrictions for Property (the N1 "Agreement") is made as of T yq , 2012, by and between RP/PLC BLUE CANVAS, L.L.C., a Delaware limited liability company (the "Covenantor"), and THE CITY OF HUNTINGTON BEACH, a California municipal corporation (the "City"), and the HOUSING AUTHORITY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic (the "Authority"). Collectively, the City and Authority will be referred to as the "Covenantee". RECITALS A. Covenantor is the owner of record of that certain real property located in the City of Huntington Beach, County of Orange, State of California legally described in the attached Exhibit"A". B. On September 2, 2008, the City Council approved Tract No. 16733, as per map recorded as Instrument No. 2008000531659 in Book 897, Pages 10 through 14 of Miscellaneous Maps, Records of Orange County, California ("Project"). City imposed conditions of approval on the Project, requiring Covenantor to submit an Affordable Housing Agreement, in accordance with the Affordable Housing Program, for review by the Planning Department and approval by the City Attorney and acceptance by the City Council. The City further required that the plan shall provide ten percent (10%) of the total 201 units equaling 21 units to be restricted as set forth herein ("Restricted Units"), 3 of which are to be affordable housing for household earning less than 80% of the Orange County Median Income and 18 of which are to be affordable housing for households earning no more than 100% of the Orange County Median Income, in both cases for a period of sixty (60) years. The execution and recordation of this Agreement is intended to fully satisfy that condition. NOW, THEREFORE, the parties hereto agree and covenant as follows: 1. Affordability Covenants. Covenantor agrees for itself and its successor and assigns, and every successor to Covenantor's interest in the Restricted Unit, or any part thereof, that the Project located at Newland Street and Noelle Drive, which consists of a total of 201 08-1542.006/79840 1 r r Y ` residential condominium units, shall be designated as affordable and shall be held subject to this Agreement for sixty (60) years from the date of the close of escrow for the initial sale of each such Restricted Unit built in Tract No. 16733 as follows: (a) Eighteen (18) Restricted Units as further designated on Exhibit "B" attached hereto shall only be owned and occupied by "Median-Income Households", which shall mean persons or families earning not more than 100% of the Orange County median income, adjusted for household size appropriate for the property as determined by the Agency based on statistics published by the United States Department of Housing & Urban Development or established by the State of California, pursuant to Health and Safety Code Section 50093, or a successor statute. (b) These eighteen (18) Medium-Income Restricted Units shall only be sold at an "Affordable Housing Cost"to "Median-Income Households." (c) Three (3) Restricted Units as further designated on Exhibit "B" attached hereto shall only be owned and occupied by "Low-Income Households", which shall mean persons or families earning less than 80% of the Orange County median income, adjusted for household size appropriate for the property as determined by the Agency based on statistics published by the United States Department of Housing & Urban Development or established by the State of California, pursuant to Health and Safety Code Section 50093, or a successor statute. (d) These three (3) Low-Income Restricted Units shall only be sold at an "Affordable Housing Cost"to "Low-income Households." (e) "Affordable Housing Cost" shall mean the permitted gross sales price of the Restricted Unit as set forth in the Affordable Housing Price/Income Guidelines or successor guidelines published, from time to time, by the City for such purpose. (f) The term of this Agreement shall commence on the date of the initial sale of each Restricted Unit to a qualifying purchaser as evidenced by a deed recorded with the Orange County Recorder's Office and shall continue for sixty years from said date ("Affordability Period"). The covenant contained in this Section 1 shall run with the Restricted Unit and shall automatically terminate and be of no further force or effect upon the expiration of the Affordability Period. (g) Purchasers of the Restricted Units identified above shall enter into a promissory note and deed of trust in the forms attached hereto as Exhibit"C". 2. Transfer of Restricted Unit, Consent of Agency. During the Affordability Period no transfer of a Restricted Unit shall occur until the City determines: (a) that the proposed purchaser intends to occupy the Restricted Unit as the proposed purchaser's principal residence, (b) that the proposed purchaser is a "Low", or"Median" Income Household as provided in Section 1 above, and 08-1542.006/79840 2 (c) that the proposed transfer occurs at an Affordable Housing Cost. (d) The Restricted Units shall be constructed prior to or concurrent with the primary Project. (e) In the event that the Covenantor (including successors and assigns) desires to sell the Restricted Unit, Covenantor shall send written notice thereof to the City at the following address: City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attention: Director of Economic Development Within seven (7) days of receiving such notice, the City shall send Covenantor transfer application forms prepared by the City. Such forms shall contain a certification of the proposed purchaser's intent with respect to his/her/its residency of the Restricted Unit and his/her/its gross income, and an affidavit of the proposed purchaser disclosing and certifying the amount of the proposed purchase price. The City shall not be obligated to approve a transfer unless and until the proposed purchaser has submitted to the City such information and completed such forms. In the interest of expediting the close of escrow for such proposed transactions, the City shall reasonably approve or disapprove such submissions as soon as practicable after submission of such forms, and in no event later than fourteen (14) days after submission of a completed form. Prior to conveyance of the Restricted Unit, each approved purchaser shall also submit to the City an executed disclosure statement which certifies that the purchaser is aware that: (i) the purchaser buying the Restricted Unit may only sell the Restricted Unit at an Affordable Housing cost to a "Low" or"Median" Income Household as provided in Section 1 above, (ii) the maximum permitted sales price may be less than fair market value and (iii) the Restricted Unit must be owner-occupied at all times and cannot be rented or leased. The approved purchaser shall also submit an executed promissory, trust deed, notice documents, and any other documentation required by the City to effectuate the Affordable Housing Program. Covenantor shall cooperate with the City in providing such forms to proposed purchasers and in assisting proposed purchasers to prepare such forms and to provide any required information to the City in connection with only the Covenantor's sale of the Restricted Unit, provided that the Covenantor shall not be obligated to incur any out-of-pocket costs in connection therewith, other than employee time dedicated to providing such assistance. THE COVENANTOR AND EACH SUCCESSOR, HEIR, OR ASSIGN OR COVENANTOR UNDERSTAND THAT THE DETERMINATION OF THE AFFORDABLE HOUSING COST CAN BE MADE ONLY AT THE TIME OF THE PROPOSED TRANSFER, TAKING INTO CONSIDERATION INTEREST RATES, THE TERMS OF SALE OFFERED TO, AND THE ECONOMIC CIRCUMSTANCES OF, THE PROPOSED PURCHASER AND OTHER FACTORS THAT CANNOT BE ACCURATELY PREDICTED, AND THAT THE TRANSFER PRICE PERMITTED HEREUNDER MAY BE LESS THAN THE FAIR MARKET VALUE OF THE PROPERTY AND MAY NOT INCREASE OR DECREASE IN THE SAME MANNER AS OTHER SIMILAR REAL PROPERTY 08-1542.006/79840 3 WHICH IS NOT ENCUMBERED BY THIS RESTRICTION. COVENANTOR AND EACH SUCCESSOR, HEIR, OR ASSIGN OF COVENANTOR FURTHER ACKNOWLEDGES THAT AT ALL TIMES IN SETTING THE TRANSFER PRICE, THE PRIMARY OBJECTIVE OF THE CITY AND THIS AGREEMENT IS TO PROVIDE HOUSING TO "LOW" OR "MEDIAN" INCOME HOUSEHOLDS AT AN AFFORDABLE HOUSING COST. i Covenantor's Initials Covenantor shall include in the escrow instructions and Purchase and Sale Agreements with purchaser a provision which requires each purchaser to record a covenant which will run with the land and bind all successors-in-interest or assignees that will ensure that all subsequent purchasers and occupants qualify as "Low" or "Median" Income Households as applicable. Said covenant shall remain in full force and effect for the Affordability Period as set forth in Section 1. 3. Non-Discrimination Covenants. Covenantor covenants by and for itself, it successors and assigns, and all persons claiming under or though them that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, religion, sex, sexual orientation, creed, ancestry, national or ethnic origin, age, family or marital status, handicap or disability, in the sale, transfer, use, occupancy, tenure or enjoyment of the Restricted Unit, nor shall Covenantor itself or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, subtenants, or vendees in the Restricted Unit. Covenantor and its successors and assigns shall refrain from restricting the sale of the Restricted Unit on the basis of race, color, religion, sex, sexual orientation, creed, ancestry, national or ethnic origin, age, family or marital status, handicap or disability, of any person. All such deeds or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clause: (a) In deeds: "The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, religion, sex, sexual orientation, creed, ancestry, national or ethnic origin, age, family or marital status, handicap or disability, in the sale, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee himself or herself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, or vendees in the land herein conveyed. The foregoing covenants shall run with the land." (b) In contracts: "There shall be no discrimination against or segregation of, any person or group of persons on account of race, color, religion, sex, sexual orientation, creed, ancestry, national or ethnic origin, age, family or marital status, handicap or disability, in the sale, transfer, use, occupancy, tenure or enjoyment of the premises, nor shall the transferor himself or herself of any person claiming under or though him or her, establish or 08-1542.006/79840 4 permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use of occupancy of tenants, subtenants or vendee of the premises." (c) In leases: "The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators, and assignees, and all persons claiming under or though him or her, and this lease is made and accepted upon and subject to the following conditions: "That there shall be no discrimination against or segregation of any person or group of persons on account of race, color, religion, sex, sexual orientation, creed, ancestry, national or ethnic origin, age, family or marital status, handicap or disability, in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the premises herein leased nor shall the lessee himself or herself, or any person claiming under or though him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy of tenants, sublessees, subtenants, or vendees in the premises herein leased." 4. Covenants Do Not Impair Lien. No violation or breach of covenants, conditions, restrictions, provisions or limitations contained in this Agreement shall defeat or render invalid or in any way impair the lien or charge of any mortgage or deed of trust or security interest. 5. Covenants For Benefit of City. All covenants without regard to technical classification or designation shall be binding for the benefit of the Covenantee and such covenants shall run in favor of Covenantee for the entire period during which time such covenants shall be in force and effect, without regard to whether the Covenantee is or remains an owner of any land or interest therein to which such covenants relate. The Covenantee, in the event of any breach of any such covenants, shall have the right to exercise all the rights and remedies and to maintain any such action at law or suits in equity or other proper legal proceedings to enforce and to cure such breach to which it or any other beneficiaries of these covenants may be entitled during the term specified for such covenants, except the covenants against discrimination which may be enforced at law or in equity at any time in perpetuity. 6. Counterparts. This Agreement may be executed in a number of counterparts, each of which shall be an original, but all of which shall constitute one and the same document. 08-1542.006/79840 5 7. Applicable Law. (a) If any provision of this Agreement or portion thereof, or the application of any provision to any person or circumstances, shall to any extent be held invalid, inoperative, or unenforceable, the remainder of this Agreement, or the application of such provision or portion thereof to any other persons or circumstances, shall not be affected thereby and it shall not be deeded that any such invalid provision affects the consideration for this Agreement; and each provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law. (b) This Agreement shall be construed in accordance with the laws of the State of California. [Balance of this page intentionally left blank] 08-1542.006/79840 6 IN WITNESS WHEREOF, the Covenantee and Covenantor have caused this instrument to be executed on their behalf by their respective officers hereunto duly authorized as of the date set forth above. COVENANTOR: COVENANTEE: RP/PLC BLUE CANVAS, L.L.C., CITY OF HUNTINGTON BEACH a Delaware limited liability company a California municipal corporation By: Mayor Its: yl (�/l�S�gv 4ity C rk HOUSING AUTHORITY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic By: &Cqt Deputy Executive Director APPROVED AS TO FORM: 4cittor y /Agency Coun el INITI ED ND A OVED: a ng D ct r REVIE A D APPROVED: r City drhhgtrator 08-1542.006/79840 7 STATE OF CALIFORNIA ) ) ss. COUNTY OF ORANGE ) On /aV ,)q , 2012, before me, r6 r 6 A�Ltl-oJ Notary Public, personally appeared who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he/she-executed the same in his/4ef-authorized capacity, and that by histheer-signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. [SEAL] SignatureC�� PATRICIA ALEXIS HANSON Commission# 1888030 Z ®, Notary Public-California i Z ' Orange County D My Comm.Expires May 2,2014 c STATE OF CALIFORNIA ) ) ss. COUNTY OF ORANGE ) On * LX , 2012, before me, 24 Notary Public, personally appeared,&61 !=°4&M6W ZIL AiO %470- A.YAkl who proved to me on the basis of satisfactory evidence to be the persomwhose name isd-%N- subscribed to the within instrument and acknowledged to me that executed the same in how authorized capacity, and that by �signatureson the instrument the person, or the entity` i.pon behalf of which the persorfacted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. [SEAL) Signature P. L. ESPARZA w Commission# 1857021 -m Notary Public -California z i " Orange County D My Comm. Ex Tres Aug4,2013 08-1542.006/79840 8 ACKNOWLEDGMENT State of California County of Orange On June 4, 2012 before me, Kathleen Nelson, Notary Public, personally appeared Bob Hall, who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. JIIIn11u11 IIIIIIIIIIIIIIIIIIpNIp111p111111p111111nInlnmlpnnppppppp �..:. KATMLEEN NELSON : COMM.#1814694 = WITNESS my hand and official seal. _ - Notary Public-California o Orange County 3mlm ulnelwCOMM.un pio e,1,n1�n�n'n233'p20ppnu Signat / (Seal) EXHIBIT "A" Legal Description of Restricted Units in Tract 16733 All that certain real property in the City of Huntington Beach, County of Orange, State of California, described as follows: Parcel 1: The "Median-Income Households" consisting of: Units 105 , and 114 , as shown on that certain Condominium Plan Pacific Shores- Phase 5 recorded on May 4, 2012, as Instrument No. 201000258198 of Official Records of Orange County, California, covering portions of Lot 5 of Tract No. 16733, as per the Map, lying within the boundaries of said Condominium Plan. 08-1542.006/79840 Page 1 of 1 Pages EXHIBIT "B" Designation of Median-Income and Low-Income Household Restricted Units Median-Income Household Restricted Units: Those Units more particularly described as Parcel 1 on Exhibit "A" to this Agreement. Low-Income Household Restricted Units: Those Units more particularly described as Parcel 2 on Exhibit"A"to this Agreement. 08-1542.006/79840 EXHIBIT "C" Promissory Note and Deed of Trust (See Attached) 08-1542.006/79840 OFFICIAL BUSINESS ) Document entitled to free recording per ) Government Code §§ 6103 and 27383 ) Recording Requested By: ) Housing Authority ) of the City of Huntington Beach ) 2000 Main Street ) Huntington Beach, California 92648 ) Attn: Economic Development ) Dept./Housing Division ) SPACE ABOVE THIS LINE FOR RECORDERS USE PROMISSORY NOTE TO SECURE AFFORDABILITY RESTRICTIONS ON TRANSFER OF PROPERTY THIS PROMISSORY NOTE (the "Note") is dated this day of 20_, between (collectively, "Promissor") and the Housing Authority of the City of Huntington Beach ("Authority")with reference to the following facts: A. This Promissory Note is made in reference to that property in the City of Huntington Beach, County of Orange, State of California, with the street address Huntington Beach, California 92648, and the Assessor's Parcel No. and the Condominium Plan Tract No. 16733, Phase 5, recorded on May 4, 2012 as Instrument No. 2012000258198 (the "Property"). B. An "Agreement Declaring Conditions, Covenants and Restrictions for Property" was recorded on 20_1 as Instrument Number , in the Office of the County Recorder of the County of Orange, California (the "Resale Restrictions"). Among other things, the Resale Restrictions limit the price that the Property may be sold to an "Affordable Housing Cost" to "Moderate Income Households," as those terms are defined in the Resale Restrictions, and further defined in the current Affordable Housing Regulations of the City of Huntington Beach and the Authority Deed of Trust referred to below. C. Concurrently with executing this Note, Promissor has executed a Deed of Trust securing and modifying the Resale Restrictions (the "Authority of Deed of Trust"). D. Pursuant to the Resale Restrictions, the City has approved the sale of the Property to Promissor at an Affordable Housing Cost. To insure that any further sale, transfer or assignment of the Property occurs with the City's approval and at an Affordable Housing Cost, the City has required as a condition of the Promissor's purchase of the Property that Promissor execute this Note. 08-1542.006/79840 Page 1 of 4 AGREEMENT NOW, THEREFORE, the parties agree as follows: 1. Incorporation of Recitals. The recitals set forth above are incorporated by reference as though fully set forth herein. 2. Amount of the Note. The Amount of this Note is the "Transfer Price" of the Property, less the "Affordable Housing Cost." The Transfer Price shall be determined according to the circumstances that cause the Amount of the Note to become due pursuant to Section 3 of this Note. In the case of the sale of the Property without the City's consent, the Transfer Price shall be the market sales price. In the case of the financing or refinancing of the Property without the City's consent, the Transfer Price shall be the loan amount in excess of the last loan balance on the First Mortgage that the City previously approved In all other cases, the Transfer Price shall be the fair market value of the Property as established by the Director of Economic Development of the City pursuant to an appraisal. The term "Affordable Housing Cost" shall be defined according to the current Affordable Housing Regulations as adopted by the City of Huntington Beach. Promissor promises to pay the Amount of this Note when due to the Housing Authority at 2000 Main Street, P.O. Box 190, Huntington Beach, California 92648, or at such other address as Authority may direct from time to time in writing. All sums hereunder shall be payable in lawful money of the United States of America and all sums shall be credited first to interest then due and the balance to principal. . 3. Due on Sale, Transfer or Refinancing. Promissor agrees to notify the Authority not less than thirty (30) days prior to (i) the sale or transfer of the Property or(ii) any financing or refinancing of the Property. This Note shall be due and payable upon (i) such sale or transfer without the City's consent, (ii) the financing or refinancing of the Property without the City's consent, (iii) Promissor is no longer an occupant of the Property, or (iv) Promissor is in material default of any other obligation under the Resale Restrictions, or the Authority Deed of Trust. 4. Expiration of the Note Obligation. In the event Promissor does not sell or transfer the Property, does not fail to occupy the Property, does not refinance, or is not in material breach of any other provision of the Resale Restrictions or the Agency Deed of Trust before the Sixtieth anniversary of the date of this Note, Promissor shall have no obligation to pay the Note Amount to Authority upon later sale, transfer or refinancing of the Property. 5. Default. The entire unpaid Amount of this Note shall be due and payable in full in the event of a default. The following shall be deemed to be an event of default: a. Failure of Promissor to pay any real property taxes or insurance premiums on the Property as they become due; or b. Any material breach of the Resale Restrictions or the Authority Deed of Trust, following the Authority giving notice of the breach and an opportunity to cure; or 08-1542.006/79840 Page 2 of 4 C. Failure of Promissor to pay the Note Amount when due. 6. This Note is secured by a Deed of Trust, dated to the City of Huntington Beach, as Trustee, executed by Promissor in favor of the Authority. 7. Notice. All payments, notices, consents, waivers and other communications under this Agreement must be in writing and shall be deemed to have been given when (a) delivered by hand, or, (b)when received by the addressee, if sent by a nationally recognized overnight delivery service (receipt requested), in each case addressed as set forth below: If to PROMISSOR: If to AGENCY: Housing Authority of the City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attention: City Clerk and, Economic Development Director City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 8. Governing Law. This Agreement is governed by and shall be construed in accordance with the laws of the State of California without giving effect to the conflict of laws principles thereof. The parties agree to personal jurisdiction in the State Courts in Orange County, California and specifically waive any claims of forum non conviens. 9. Modification. This Agreement shall not be amended or modified, except in writing, signed by both parties. 10. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the successors and assigns under this Note. This Note shall not be assigned without the express written consent of Agency. Dated: 20 By: HOUSING AUTHORITY OF THE CITY OF HUNTINGTON BEACH Dated: 20 By: Deputy Executive Director 08-1542.006/79840 Page 3 of 4 APPROVED AS TO FORM OFFICE OF HUNTINGTON BEACH CITY ATTORNEY Dated: , 20 By: Jennifer McGrath, City Attorney 08-1542.006179840 Page 4 of 4 OFFICIAL BUSINESS ) Document entitled to free recording per Government ) Code Sections 6103 and 27383 ) Recording Requested By: ) Housing Authority of the City of Huntington Beach ) 2000 Main Street ) Huntington Beach, California 92648 ) Attn: Economic Development Dept./Housing Division ) SPACE ABOVE THIS LINE FOR RECORDER'S USE DEED OF TRUST WITH ASSIGNMENTS OF RENTS TO SECURE AFFORDABILITY RESTRICTIONS ON TRANSFER OF PROPERTY THIS DEED OF TRUST is made this day of 20 by and between whose address is Huntington Beach, California 92648 (collectively, the "Trustor") and the CITY OF HUNTINGTON BEACH, a municipal corporation (the "Trustee"), and the HOUSING AUTHORITY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic (the "Beneficiary"), whose address is 2000 Main Street, Huntington Beach, California 92648, with reference to the following facts: A. This Deed of Trust is made in reference to that property in the City of Huntington Beach, County of Orange, State of California, described legally in the Legal Description attached hereto as Exhibit "A" and incorporated herein with the street address Huntington Beach, California 92648 and the Assessor's Parcel No. and the Plan Tract No. 16733, Phase 5, recorded on May 4, 2012 as Instrument No. 2012000258198 (the "Property"). B. An "Agreement Declaring Conditions, Covenants and Restrictions for Property" was recorded on , 20_, as Instrument Number , in the Office of the County Recorder of the County of Orange, California (the "Resale Restrictions"). Among other things, the Resale Restrictions limit the price that the Property may be sold to an "Affordable Housing Cost"to "Moderate Income Households," as those terms are defined in the Resale Restrictions, and further defined in the current affordable housing regulations of the City of Huntington Beach and this Deed of Trust. C. Pursuant to this Deed of Trust. the Resale Restrictions as applied to the Property are extended to expire sixty (60) years from the date this Deed of Trust is recorded (the "Expiration Date"), which date is approximately , 20_ NOW, THEREFORE, TRUSTOR HEREBY irrevocably grants, transfers and assigns, to Trustee, in trust, with power of sale of the Property, together with (a) all buildings, improvements and fixtures, now or hereafter placed thereon, it being understood and agreed that all classes of 08-1542.006/79840 1 property attached or unattached used in connection herewith shall be deemed fixtures, (b) rents, issues and profits thereof, (c) any water rights and/or stock are appurtenant or pertain to said land, and (d) all sums of money payable on the purchase price of the Property secured by a lien thereon or payable under any agreement for the sale thereof, SUBJECT, HOWEVER, to the right, power and authority hereinafter given to and conferred upon Beneficiary to collect and apply such rents, issues and profits, and all sums of money payable on the purchase price of the Property secured by a lien thereon or payable under any agreement. A. FOR THE PURPOSE OF SECURING: 1. Payment of the indebtedness evidenced by a promissory note executed by Trustor on 20_(the "Note"). The Amount of the indebtedness is the "Transfer Price" of the Property, less the "Affordable Housing Cost." The calculation of the Amount of the indebtedness is set forth with specificity in the Note, which is on file with the Economic Development Department of the City of Huntington Beach. 2. Performance of each and every obligation, covenant, promise and agreement of the Resale Restrictions, as amended by this Deed of Trust. B. TO PROTECT THE SECURITY OF THIS DEED OF TRUST, TRUSTOR AGREES: 1. Trustor agrees for itself, and its successors and assigns, and every successor to Trustor's interest in the Property, or any part thereof that for sixty (60) years from the date this Deed of Trust is recorded (the "Expiration Date"), to perform all obligations due under the Resale Restrictions, as those obligations are restated and modified as set forth below: (a) The Property shall only be owned and occupied by persons or families of "Median-Income.""Median-Income" shall mean persons or families earning one hundred percent (100%) or less of Orange County median income, adjusted for appropriate family size. (b) The Property may only be sold at an "Affordable Housing Cost"to households of"Median-Income," as those terms are defined in current Affordable Housing Regulations as adopted by the City of Huntington Beach. Generally, those Regulations define Affordable Housing Cost to mean that purchase price which would result in monthly housing payments which do not exceed Thirty-Five Percent (35%) of One Hundred Percent (100%) of the current Orange County monthly median income for a household equal to the number of bedrooms in the unit plus one (1) person. In determining monthly housing payments, the City will assume principal and interest payments on a conventional home mortgage after paying a ten percent (10%) down payment. The mortgage interest rate will be the prevailing Fannie Mae thirty (30) year mortgage rate, or a City-selected equivalent. Monthly housing costs will also include homeowner's association dues, utilities, homeowner's insurance, maintenance costs and property taxes. (c) The Trustor shall further comply with the Affordable Housing Guidelines promulgated by the City for purposes of administering the Affordable Housing Program of the City of Huntington Beach. 08-1542.006/79840 2 (d) No transfer of the Property shall occur until the City of Huntington Beach determines (a) that the proposed purchaser intends to occupy the Property as the proposed purchaser's principal residence, (b) that the proposed purchaser is a person or family of Median Income, (c)that the proposed transfer occurs at an Affordable Housing Cost. The City of Huntington Beach shall not be obligated to approve a transfer until and unless the proposed purchaser has submitted to the City of Huntington Beach such information and completed such forms as the City of Huntington Beach shall request to certify the proposed purchaser's intent with respect to its residency of the Property and its gross income, and the proposed purchaser has submitted an affidavit disclosing and certifying the amount of the proposed purchase price. Prior to conveyance of the Property, each approved purchaser shall submit to the City of Huntington Beach an executed disclosure statement which certifies that the purchaser is aware that the purchaser may only sell the unit at an Affordable Housing Cost to a Median Income person or family, that the maximum permitted sales price may be less than fair market value and that the unit must be owner-occupied at all times and cannot be rented or leased. TRUSTOR AND EACH SUCCESSOR, HEIR OR ASSIGN OF TRUSTOR UNDERSTANDS THAT THE DETERMINATION OF THE AFFORDABLE HOUSING COST CAN BE MADE ONLY AT THE TIME OF THE PROPOSED TRANSFER, TAKING INTO CONSIDERATION INTEREST RATES, THE TERMS OF SALE OFFERED TO AND THE ECONOMIC CIRCUMSTANCES OF THE PROPOSED PURCHASER AND OTHER FACTORS THAT CANNOT BE ACCURATELY PREDICTED, AND THAT THE TRANSFER PRICE PERMITTED HEREUNDER MAY BE LESS THAN THE FAIR MARKET VALUE OF THE PROPERTY AND MAY NOT INCREASE OR DECREASE IN THE SAME MANNER AS OTHER SIMILAR REAL PROPERTY WHICH IS NOT ENCUMBERED BY THIS RESTRICTION. TRUSTOR AND EACH SUCCESSOR, HEIR OR ASSIGN OF TRUSTOR FURTHER ACKNOWLEDGES THAT AT ALL TIMES IN SETTING THE TRANSFER PRICE THE PRIMARY OBJECTIVE OF THE BENEFICIARY AND THIS DEED OF TRUST IS TO PROVIDE HOUSING TO ELIGIBLE PERSONS OR FAMILIES AT AN AFFORDABLE HOUSING COST. Trustor Initials Trustor Initials (e) The City of Huntington Beach may impose any conditions on the approval of any transfer of the Property as it determines are reasonably necessary for the effective administration of its Affordable Housing Program. (f) The Covenants contained in this Section 1 shall run with the land and shall automatically terminate and be of no further force or effect sixty (60) years from the date this Deed of Trust is recorded, which date is approximately 2. Trustor covenants by and for itself, its successors and assigns, and all persons claiming under or through them that there shall be no discrimination against or segregation of 08-1542.006/79840 3 any person or group of persons on account of race, color, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the said property, nor shall Trustor itself or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in said property. Trustor and its successors and assigns, shall refrain from restricting the rental or lease (if permitted by Trustor) or sale of said property on the basis of race, color, religion, sex, marital status, national origin or ancestry of any person. All such deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: (a) In deeds: "The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee himself or herself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessee or vendees in the land herein conveyed. The foregoing covenants shall run with the land." (b) In leases: "The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through him or her,. and this lease is made and accepted upon and subject to the following conditions: "There shall be no discrimination against or segregation of any person or group of persons on account of race, color, religion, sex, marital status, ancestry or national origin in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the premises herein leased nor shall the lessee himself or herself, or any person claiming under to through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sublessees, subtenants or vendees in the premises herein leased." (c) In contracts: "There shall be no discrimination against or segregation of, any person, or group of persons on account of race, color, religion, sex, marital status, ancestry or national origin, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the premises, nor shall the transferee himself or herself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessee or vendees of the premises." Nothing in this Section 2 shall be construed to authorize the rental or lease of the Property if such rental or lease is not otherwise permitted. The covenants in this paragraph shall run with the land in perpetuity. 08-1542.006/79840 4 3. No violation or breach of the covenants, conditions, restrictions, provisions or limitations contained in this Deed of Trust shall defeat or render invalid or in any way impair the lien or charge of any mortgage or deed of trust or security interest. 4. Trustor has made certain representations and disclosures as a requirement under the Resale Restrictions in order to induce Beneficiary to approve the sale of the Property to Trustor. In the event that Trustor has made any material misrepresentation or failed to disclose any material fact regarding said transaction, Beneficiary at its option and without notice, shall have the right to declare a material breach of the Resale Restrictions and the Note. Beneficiary may make a written declaration of default and demand for sale as in paragraph No. 6 herein set forth. Trustee, upon presentation to it of an affidavit signed by Beneficiary setting forth facts showing a default by Trustor under this paragraph, is authorized to accept as true and conclusive all facts and statements therein, and to act thereon hereunder. 5. All covenants without regard to technical classification or designation shall be binding for the benefit of the Beneficiary and such covenants shall run in favor of the Beneficiary for the entire period during which such covenants shall be in force and effect, without regard to whether the Beneficiary is or remains an owner of any land or interest therein to which such covenants relate. The Beneficiary, in the event of any breach of any such covenants, shall have the right to exercise all the rights and remedies and to maintain any action at law or suits in equity or other proper legal proceedings to enforce and to cure such breach to which it or any other beneficiaries of these covenants may be entitled during the term specified for such covenants, except the covenants against discrimination which may be enforced at law or in equity at any time in perpetuity. 6. Upon default by Trustor in the obligations of the Note, in the performance of any obligation under this Deed of Trust or under the terms of any First Lender's Deed of Trust which is or appears to be prior or superior to this Deed of Trust, Beneficiary may declare all sums secured by this Deed of Trust immediately due and payable by delivering to Trustee of a written declaration of default and demand for sale and a written notice of default and election to sell the Property. Default in the payment of any indebtedness secured by this Deed of Trust, in the obligation of the Note, or in the performance of any agreement under this Deed of Trust constitutes a default only under this Deed of Trust and the Note and does not constitute a default under the First Deed of Trust. Trustee shall cause the notice of default to be recorded. Beneficiary also shall deposit with Trustee this Deed of Trust, the Note, and all documents evidencing any additional expenditures secured by this Deed of Trust: After the lapse of such time as then may be required by law following recordation of such notice of default, and notice of sale having been given as then required by law, Trustee, without demand on Trustor, shall sell the Property at the time and place fixed by it in such notice of sale, whether as a whole or in separate parcels, and in such order as it may determine, at public auction to the highest bidder qualified under the Resale Restrictions and this Deed of Trust in lawful money of the United States, payable at time of sale. Trustee may postpone sale of all or any portion of the Property by public announcement at such time and place of sale, and from time to time thereafter may postpone such sale by public announcement at the time fixed by the preceding postponement. Trustee shall deliver to such purchaser its Deed conveying the Property so sold, but without any covenant or warranty, express or implied. The recital in such Deed of any matters of fact shall be conclusive of the truthfulness thereof. Any person, including Trustor, Trustee, or Beneficiary as 08-1542.006/79840 5 hereinafter defined, may purchase at such sale. Trustee may also sell at any such sale and as part thereof any shares of corporate stock securing the obligations secured hereby, and Trustor waives demand and notice of such sale. (Beneficiary at its option may also foreclose on such shares by independent pledge sale, and Trustor waives demand and notice of such sale.) After deducting all costs, fees and expenses of Trustee, and of this Trust, including cost of evidence of title in connection with this sale, Trustee shall apply the proceeds of sale to payment, first; all sums expended under the teams hereof, not then repaid,with accrued interest at the rate then payable under the First Lender Deed of Trust secured hereby, and then of all other sums secured hereby, and, if there are any proceeds remaining, shall distribute them to the person or persons legally entitled thereto. 7. Trustor shall keep the Property in good condition and repair; to allow Beneficiary or its representatives to enter and inspect the Property at all reasonable times and access thereto, shall be permitted for that purpose; not to remove or demolish any building thereon; not to make alterations thereto without the consent of the Beneficiary; to suffer or permit no change in the general nature of the occupancy of the Property without Beneficiary's written consent; to complete or restore promptly and in good workmanlike manner any building which may be constructed, damaged or destroyed thereon, including, without restricting the generality of the foregoing, damage from termites and dry-rot; to pay when due all claims for labor performed and materials furnished in connection with the Property and not to permit any mechanic's lien against the Property; to comply with all laws affecting the Property or requiring any alterations or improvements to be made thereon; not to initiate or acquiesce in any zoning reclassification without Beneficiary's written consent; not to commit or permit waste thereon; not to commit, suffer or permit any act upon the Property in violation of the law; to paint, cultivate, irrigate, fertilize, fumigate, prune, and do all other acts that from the character or use of the Property may be reasonably necessary; and to promptly pay all amounts due others upon agreements of lease or conditional sale of all fixtures, furnishings and equipment located thereon. 8. Trustor shall provide, and maintain in force at all times with respect to the Property, fire and other types of insurance as may be required by Beneficiary. All of such insurance shall have a loss payable endorsement in favor of Beneficiary, shall be for a term and in form, content, amount and in such companies as may be satisfactory to Beneficiary, and the policies therefore shall be delivered to and remain in possession of Beneficiary as further security for the faithful performance of these trusts. At least thirty (30) days prior to the expiration of any such insurance policy, a policy or policies renewing or extending such expiring insurance shall be delivered to Beneficiary together with written evidence showing payment of the premium therefore and, in the event any such insurance policy and evidence of the payment of the premium therefore are not so delivered by Trustor to Beneficiary, Trustor by executing this Deed of Trust specifically requests Beneficiary to obtain such insurance and Beneficiary, without obligation to do so, without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof, may obtain such insurance through or from any insurance agency or company acceptable to it, pay the premium thereof, and may add the amount thereof to the indebtedness secured hereby, which amount shall bear a like rate of interest. Beneficiary may furnish to any insurance agency or company, or any other person, any information contained in or extracted from any insurance policy delivered to Beneficiary pursuant hereto and any information concerning the loan secured hereby. Neither Trustee nor Beneficiary shall be responsible for such insurance or for the collection of any insurance 06-1542.006/79840 6 monies, or for any insolvency of any insurer or insurance underwriter. In case of insurance loss, Beneficiary is hereby authorized either (a) to settle and adjust any claim under the insurance policies provided for in this document without the consent of the Trustor, or (b) to allow Trustor to agree with the insurance company or companies on the amount to be paid upon the loss. In either case, the Beneficiary is authorized to collect and make receipt of any such insurance money. If Trustor is obligated to restore or replace the damaged or destroyed buildings or improvements under the terms of any lease or leases which are or may be prior to the lien of this Deed of Trust and such damage or destruction does not result in cancellation or termination of such lease, such proceeds, after deducting therefrom any expenses incurred in the collection thereof, shall be used to reimburse the Trustor for the cost of rebuilding or restoring the buildings or improvements on said premises. In all other cases, such insurance proceeds shall either be applied for the cost of the rebuilding or restoring the buildings or improvements on said premises. Such buildings and improvements shall be so restored or rebuilt as to be of at least equal value and substantially the same character as prior to the damage or destruction, and shall be in a condition satisfactory to Beneficiary. Such application or release shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. Any and all unexpired insurance shall inure to the benefit of, and pass to the purchaser of, the property conveyed at any Trustee sale held hereunder. 9. Trustor shall pay: (a) at least ten (10) days before delinquency, all general and special City and County taxes, and all assessments on appurtenant water stock, affecting the Property, (b) when done, all special assessments for public improvements, without permitting any improvement bond to issue for any special assessment, (c) when done, all encumbrances, charges and liens, with interest, on the Property, or any part thereof, which are or appears to be prior to superior hereto, (d) if the security of this Deed of Trust is leasehold estate, to make any payment or do any act required of the Lessee or its successor in interest under the terms of the instrument or instruments creating said leasehold, (e) all costs, fees and expenses of this trust, (f) for any statement regarding the obligation secured hereby any amount demanded by Beneficiary not to exceed the maximum allowed by law thereof at the time when such request is made, (g) such other charges for services rendered by Beneficiary and furnished at Trustor's request or that of any successor in interest to Trustor as the Beneficiary may deem reasonable. 10. Should Trustor fail to make any payment or do any act as provided in this Deed of Trust, the Beneficiary or Trustee, but without obligation to do so and without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof, may (a) make or do the same in such manner and to such extent as either may deem necessary to protect the security hereof, Beneficiary or Trustee being authorized to enter upon the Property for such purposes, (b) commence, appear in, or defend any action or proceeding purporting to affect the security hereof or the property covered by this Deed of Trust, or the rights or powers of Beneficiary or Trustee, (c) pay, purchase, contest or compromise any encumbrance, charge or lien, which in the judgment of either is or appears to be prior or superior hereto, and (d) in exercising any such powers, pay necessary expenses, employ counsel and pay his reasonable fees. Trustor agrees to repay any amount so expended on demand of Beneficiary, and any amount so expended may be added by Beneficiary to the indebtedness secured hereby and shall bear a like rate of interest. 11. Trustor shall appear in and defend any action or proceeding purporting to affect the security hereof or the Property which is covered by this Deed of Trust, or the rights or powers of Beneficiary or Trustee, and whether or not Trustor so appears or defends, to pay all costs and 08-1542.006/79840 7 expenses, including cost of evidence of title and attorney's fees in a reasonable sum, in any such action or proceeding in which Beneficiary or Trustee may appear by-virtue of being made a party defendant or otherwise irrespective of whether the interest of Beneficiary or Trustee in the Property is directly questioned by such action, including any action for the condemnation or partition of said premises, and in any suit brought by Beneficiary to foreclose this Deed of Trust. 12. Trustor shall pay immediately and without demand, all sums expended under the terms of this Deed of Trust by Beneficiary or Trustee, with interest from the date of expenditure at the rate which the principal obligation secured hereby bears at the time such payment is made, and the repayment of such sums shall be secured hereby. 13. Should Trustor or any successor in interest to Trustor in the Property drill or extract, or enter into a lease for drilling or extraction of oil, gas or other hydrocarbon substances or any mineral of any kind or character, or sell, convey, further encumber, or alienate the Property, or any party thereof, or any interest therein, or be divested of his title or any interest therein in any manner or way, whether voluntarily or involuntarily, Beneficiary shall have the right, at its option, to declare any obligations secured hereby irrespective of the maturity date specified in any Note evidencing the same, immediately due and payable, and no waiver of this right shall be effective unless in writing. 14. Any award, settlement or damages for injury or damages to the Property, or in construction with the transaction financed by such loan, and any award of damages in connection with any condemnation for public use of or injury to the Property, or any part thereof, is hereby assigned and shall be paid to Beneficiary, who may apply or release such monies received by it in such manner and with the same effect as above provided for the disposition of proceeds of fire or other insurance. 15. By accepting payment of any sums secured by this Deed of Trust after its due date, or by making any payment, performing any act on behalf of Trustor, that Trustor was obligated hereunder, but failed, to make, or perform, or by adding any payment so made by Beneficiary to the indebtedness secured hereby, Beneficiary does not waive its right either to require prompt payment when due of all other sums so secured or to declare a default for failure so to pay. 16. At any time, or from time to time, without liability of the Beneficiary or Trustee thereof, and without notice, upon written request of Beneficiary and presentation of this Deed of Trust and the Note secured hereby for endorsement, and without affecting the personal liability of any person for payment of the indebtedness secured hereby, or the lien of the Deed of Trust upon the remainder of the Property for the full amount of the indebtedness then or thereafter secured hereby, or the rights or powers of Beneficiary or the Trustee with respect to the remainder of the Property, Trustee may: (a) reconvey any part of the Property, (b) consent to the making of any map or plat thereof; (c)join in granting any easement thereon, (d)join in any agreement subordinating the lien or charge hereof. 17. The lien hereof shall remain in full force and effect during any postponement or extension of time of payment of the indebtedness secured hereby, or any part thereof. 08-1542.006/79840 8 18. As additional security, Trustor irrevocably assigns to Beneficiary the rents, issues, and profits of the Property for the purposes and upon the terms and conditions set forth below. This assignment shall not impose upon Beneficiary any duty to produce rents from the property affected by this Deed of Trust, or cause Authority to be (a) "mortgages in possession"for any purpose; (b) responsible for performing any of the obligations of the lessor under any lease; or (c) responsible for any waste committed by lessees or any other parties, for any dangerous or defective condition of the property affected by this Deed of Trust, or for any negligence in the management, upkeep, or control of such rights to rents, issues and profits is not contingent upon, and may be exercised without possession of, the property affected by this Deed of Trust. Beneficiary confers upon Trustor a license ("License") to collect and retain the rents, issues and profits of the property affected by this Deed of Trust as they become due and payable, until the occurrence of a default hereunder. Upon such default, the License shall be automatically revoked and Beneficiary may collect and retain the rents, issues and profits without notice and without taking possessions of the property affected by this Deed of Trust. This right to collect rents, issues and profits shall not grant to Beneficiary or Trustee the right to possession, except as otherwise provided herein; and neither said right, nor termination of the License, shall impose upon Beneficiary or Trustee the duty to produce rents, issues or profits or maintain all or any part of the Property affected by this Trust Deed. If Trustor shall default as aforesaid, Trustor's right to collect any such money shall cease and Beneficiary shall have the right, with or without taking possession of the property affected hereby, to collect all rents, issues, royalties and profits and shall be authorized to, and may, without notice and irrespective of whether declaration of default has been delivered to Trustee and without regard to the adequacy of the security for the indebtedness secured hereby, either personally or by attorney or agent without bringing any action or proceeding, or by receiver to be appointed by the Court, enter into possession and hold, occupy, possess and enjoy the Property, make, cancel, enforce and modify leases, obtain and eject tenants, and set and modify rents and terms of rents, and to sue, and to take, receive and collect all or any part of the said rents, issues, and profits of the property affected hereby, and after paying such costs of maintenance, operation of the Property, and of collection including reasonable attorneys' fees, as in its judgment it may deem proper, to apply the balance upon any indebtedness then secured hereby, the rents, issues, royalties and profits of the Property being hereby assigned to Beneficiary for said purposes. The acceptance of such rents, issues, royalties and profits shall not constitute a waiver of any other right which Trustee or Beneficiary may enjoy under this Deed of Trust or under the laws of California. Failure of or discontinuance by Beneficiary at any time, or from time to time, to collect any such rents, issues, royalties or profits shall not in any manner affect the subsequent enforcement by Beneficiary of the right, power and authority to collect the same. The receipt and application by said Beneficiary of all such rents, issues, royalties and profits pursuant hereto, after execution and delivery of declaration of default and demand for sale as hereinafter provided, or during the pendency of Trustee's sale proceedings hereunder, shall not cure such breach or default nor affect sale proceedings, or any sale made pursuant thereto, but such rents, issues, royalties and profits, less all costs of operation, maintenance, collection and reasonable attorneys' fees, when received by Beneficiary, shall be applied in reduction of the indebtedness secured hereby, from time to time, in such order as Beneficiary may determine. Nothing contained herein, nor the exercise of the right by Beneficiary to collect, shall be, or be construed to be, an affirmation by Beneficiary of any tenancy, lease or option, nor an assumption of liability under, nor subordination of the lien or charge of this Deed of Trust to, any such tenancy, lease or option. 08-1542.006/79840 9 19. If the security of this Deed of Trust is a leasehold estate, the Trustor agrees that: (a) the term "Lease" as used herein shall mean the lease creating the "leasehold estate"' (b) Trustor shall not amend, change or modify his leasehold interest, or the Lease, or agree to do so, without the written consent of the Beneficiary; (c) Trustor will promptly advise Beneficiary regarding any notice, request or demand received by him from the lessor under the Lease and promptly furnish Beneficiary with a copy of any such notice, request or demand; (d) as long as any of the indebtedness secured hereby shall remain unpaid, unless the Beneficiary shall otherwise consent thereto in writing, the leasehold estate shall not merge with the fee title but shall always be kept separate and distinct, notwithstanding the union of said estates in any party; (e) Trustor agrees that it will promptly, strictly, and faithfully perform, fulfill, and comply with all covenants, agreements, terms, conditions and provisions under any lease affecting the premises and to neither do anything, nor to permit.anything to be done which may cause modification or termination of any such lease or of the obligations of any lessee or person claiming through such lease or the rents provided for therein or the interest of the lessor or the Beneficiary therein or thereunder. Trustor further agrees he will not execute a Deed of Trust or mortgage which may be or become superior to any leasehold estate that is security for this Deed of Trust. In the event of a violation of any of the covenants set forth in this paragraph, Beneficiary shall have the right, at its option, to declare all sums secured hereby immediately due and payable. Consent to or waiver of one of said violations shall not be deemed to be a consent to or waiver of any other violation. If the security for this Deed of Trust is a leasehold estate, the term "property" as used in this Deed of Trust shall be deemed to mean the leasehold estate whenever the context so requires for the protection of the Beneficiary. 20. Trustor waives, to the fullest extent permissible by law, the right to plead any statute of limitations as a defense to any demand secured hereby. 21. Beneficiary may, from time to time, by instrument in writing, substitute a successor or successors to any Trustee named herein or acting hereunder, which instrument, executed and acknowledged by Beneficiary and recorded in the office of the recorder of the county or counties where the Property is situated, shall be conclusive proof of property substitution of such successor Trustee or Trustees, who shall, without conveyances from the Trustee predecessor, succeed to all its title, estate, rights, powers and duties, including but not limited to the power to reconvey the whole or any part of the property covered by this Deed of Trust. Such instrument must contain the name of the original Trustor, Trustee and Beneficiary hereunder, the book and page where this Deed of Trust is recorded. If notice of default shall have been recorded, this power of substitution cannot be exercised until after the costs, fees and expenses of the then acting Trustee shall have been paid to such Trustee, who shall endorse receipt thereof upon such instrument. The procedures herein provided for substitution of Trustee shall not be exclusive of other provisions for substitution provided by law. 22. This Deed of Trust applies to, inures to the benefit of, and binds all parties hereto, their heirs, legatees, devisees, administrators, executors, successors and assigns. The term "Beneficiary" shall mean the owner and holder, including pledgee, of the Note secured hereby, whether or not names as Beneficiary herein. In this Deed of Trust, whenever the context so requires, the masculine gender includes the feminine and/or neuter, and the singular number includes the plural. 08-1542.006/79840 10 23. That in the event of a demand for, and the preparation and delivery of a written statement regarding the obligations secured by this Deed of Trust pursuant to Sections 2943 and 2954 of the Civil Code of California, Beneficiary shall be entitled to make a reasonable charge, not exceeding the maximum amount which is permitted by law at the time the statement is furnished. Beneficiary may also charge Trustor a reasonable fee for any other services rendered to Trustor or rendered in Trustor's behalf in connection with the Property of this Deed of Trust, including changing Beneficiary's records, pertaining to this Deed of Trust in connection with the transfer of the Property, or releasing an existing policy of fire insurance or other casualty insurance held by Beneficiary and replacing the same with another such policy. 24. Trustee accepts this Trust when this Deed of Trust, duly executed and acknowledged, is made a public record as provided by law. Trustee is not obligated to notify any party hereto of pending sale under any other Deed of Trust or of any action or proceeding in which Trustor, Beneficiary, or Trustee shall be a party unless brought by Trustee. 25. Any notice which any party hereto may desire or be required to give to the other party shall be in writing. The mailing thereof must be certified mail addressed to the Trustor at his address hereinabove set forth or to the Beneficiary at his office or at such other place as such parties hereto may designate in writing. [Balance of this page intentionally left blank] 08-1542.006/79840 11 THE UNDERSIGNED TRUSTOR REQUESTS that a copy of any notice of default and of any notice of sale hereunder be mailed to him at his address hereinbefore set forth. TRUSTOR Dated: , 20 By: HOUSING AUTHORITY OF THE CITY OF HUNTINGTON BEACH Dated: , 20 By: Deputy Executive Director CITY OF HUNTINGTON BEACH Dated: , 20 By: Deputy City Manager APPROVED AS TO FORM OFFICE OF HUNTINGTON BEACH CITY ATTORNEY Dated: , 20 By Jennifer McGrath, City Attorney 08-1542.006/79840 12 This Document was electronically recorded by City of Huntington Beach Recorded in Official Records, Orange County Tom Daly, Clerk-Recorder RECORDING REQUESTED BY: ) IIIIIIIIIIIIIIIIII IIIIIIIIIIIIIIIIIIIIIIIIIINO FEE 2011000525023 04:05pm 10/20/11 AND WHEN RECORDED MAIL TO:) 37 402 Al2 40 0.00 0.00 0.00 0.00 117.00 0.00 0.00 0.00 City Clerk ) City of Huntington Beach ) 2000 Main Street ) Huntington Beach, CA 92648 ) (Space Above for Recorder's Use) AGREEMENT DECLARING CONDITIONS, COVENANTS AND RESTRICTIONS FOR PROPERTY (RESALE RESTRICTIONS) This Agreement Declaring Conditions, Covenants and Restrictions for Property (the "Agreement") is made as of6&11;k ?, 2011, by and between RP/PLC BLUE CANVAS, L.L.C., a Delaware limited liability company (the "Covenantor"), and THE CITY OF HUNTINGTON BEACH, a California municipal corporation (the "City"), and the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic (the "Agency"). Collectively, the City and Agency will be referred to as the "Covenantee". RECITALS A. Covenantor is the owner of record of that certain real property located in the City of Huntington Beach, County of Orange, State of California legally described in the attached Exhibit "A". B. On September 2, 2008, the City Council approved Tract No. 16733 as per map recorded as Instrument No. 2008000531659 in Book 897, Pages 10 through 14 of Miscellaneous Maps, Records of Orange County, California ("Project"). City imposed conditions of approval on the Project, requiring Covenantor to submit an Affordable Housing Agreement, in accordance with the Affordable Housing Program, for review by the Planning Department and approval by the City Attorney and acceptance by the City Council. The City further required that the plan shall provide ten percent (10%) of the total 201 units equaling 21 units to be restricted as set forth herein ("Restricted Units"), 3 of which are to be affordable housing for household earning less than 80% of the Orange County Median Income and 18 of which are to be affordable housing for households earning no more than 100% of the Orange County Median Income, in both cases for a period of sixty (60) years. The execution and recordation of this Agreement is intended to fully satisfy that condition. NOW, THEREFORE, the parties hereto agree and covenant as follows: This document Is solely for the offtc iw T:\FILES\WP51\DLB\PAC SHORES\AFFORDABLE HOUSING CC&R'S.DOC businew of tha city of Hun dngW 0 7/0111 0 0 7/1 3/1 0 Beach,as conkmVlaftd urger 1Government Cod»sec eim and bs fret of cheIps, 1. Affordability Covenants. Covenantor agrees for itself and its successor and assigns, and every successor to Covenantor's interest in the Restricted Unit, or any part thereof, that the Project located at Newland Street and Noelle Drive, which consists of a total of 201 residential condominium units, shall be designated as affordable and shall be held subject to this Agreement for sixty (60) years from the date of the close of escrow for the initial sale of each such Restricted Unit built in Tract No. 16733 as follows: (a) Eighteen (18) Restricted Units as further designated on Exhibit "B" attached hereto shall only be owned and occupied by "Median-Income Households", which shall mean persons or families earning not more than 100% of the Orange County median income, adjusted for household size appropriate for the property as determined by the Agency based on statistics published by the United States Department of Housing & Urban Development or established by the State of California, pursuant to Health and Safety Code Section 50093, or a successor statute. (b) These eighteen (18) Medium-Income Restricted Units shall only be sold at an "Affordable Housing Cost" to " Median-Income Households." (c) Three (3) Restricted Units as further designated on Exhibit "B" attached hereto shall only be owned and occupied by "Low-Income Households", which shall mean persons or families earning less than 80% of the Orange County median income, adjusted for household size appropriate for the property as determined by the Agency based on statistics published by the United States Department of Housing & Urban Development or established by the State of California, pursuant to Health and Safety Code Section 50093, or a successor statute. (d) These three (3) Low-Income Restricted Units shall only be sold at an "Affordable Housing Cost" to "Low-income Households." (e) "Affordable Housing Cost" shall mean the permitted gross sales price of . the Restricted Unit as set forth in the Affordable Housing Price/Income Guidelines or successor guidelines published, from time to time, by the City for such purpose. (f) The term of this Agreement shall commence on the date of the initial sale of each Restricted Unit to a qualifying purchaser as evidenced by a deed recorded with the Orange County Recorder's Office and shall continue for sixty years from said date ("Affordability Period"). The covenant contained in this Section 1 shall run with the Restricted Unit and shall automatically terminate and be of no further force or effect upon the expiration of the Affordability Period. (g) Purchasers of the Restricted Units identified above shall enter into a promissory note and deed of trust in the forms attached hereto as Exhibit "C". 2. Transfer of Restricted Unit; Consent of Agency. During the Affordability Period no transfer of a Restricted Unit shall occur until the City determines: (a) that the proposed purchaser intends to occupy the Restricted Unit as the proposed purchaser's principal residence, T:\FILES\WP51\DLB\PAC SHORES\AFFORDABLE HOUSING CC&R'S.DOC 07/01/1007/13/10 2 (b) that the proposed purchaser is a "Low", or "Median" Income Household as provided in Section 1 above, and (c) that the proposed transfer occurs at an Affordable Housing Cost. (d) The Restricted Units shall be constructed prior to or concurrent with the primary Project. (e) In the event that the Covenantor (including successors and assigns) desires to sell the Restricted Unit, Covenantor shall send written notice thereof to the City at the following address: City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attention: Director of Economic Development Within seven (7) days of receiving such notice, the City shall send Covenantor transfer application forms prepared by the City. Such forms shall contain a certification of the proposed purchaser's intent with respect to his/her/its residency of the Restricted Unit and his/her/its gross income, and an affidavit of the proposed purchaser disclosing and certifying the amount of the proposed purchase price. The City shall not be obligated to approve a transfer unless and until the proposed purchaser has submitted to the City such information and completed such forms. In the interest of expediting the close of escrow for such proposed transactions, the City shall reasonably approve or disapprove such submissions as soon as practicable after submission of such forms, and in no event later than fourteen (14) days after submission of a completed form. Prior to conveyance of the Restricted Unit, each approved purchaser shall also submit to the City an executed disclosure statement which certifies that the purchaser is aware that: (i) the purchaser buying the Restricted Unit may only sell the Restricted Unit at an Affordable Housing cost to a "Low" or "Median" Income Household as provided in Section 1 above, (ii) the maximum permitted sales price may be less than fair market value and (iii) the Restricted Unit must be owner-occupied at all times and cannot be rented or leased. The approved purchaser shall also submit an executed promissory, trust deed, notice documents, and any other documentation required by the City to effectuate the Affordable Housing Program. Covenantor shall cooperate with the City in providing such forms to proposed purchasers and in assisting proposed purchasers to prepare such forms and to provide any required information to the City in connection with only the Covenantor's sale of the Restricted Unit, provided that the Covenantor shall not be obligated to incur any out-of-pocket costs in connection therewith, other than employee time dedicated to providing such assistance. THE COVENANTOR AND EACH SUCCESSOR, HEIR, OR ASSIGN OR COVENANTOR UNDERSTAND THAT THE DETERMINATION OF THE AFFORDABLE HOUSING COST CAN BE MADE ONLY AT THE TIME OF THE PROPOSED TRANSFER, TAKING INTO CONSIDERATION INTEREST RATES, THE TERMS OF SALE OFFERED TO, AND THE ECONOMIC T:\FILES\WP51\DLB\PAC SHORES\AFFORDABLE HOUSING CC&R'S.DOC 07101/1 0 0 7/1 3/1 0 3 CIRCUMSTANCES OF, THE PROPOSED PURCHASER AND OTHER FACTORS THAT CANNOT BE ACCURATELY PREDICTED, AND THAT THE TRANSFER PRICE PERMITTED HEREUNDER MAY BE LESS THAN THE FAIR MARKET VALUE OF THE PROPERTY AND MAY NOT INCREASE OR DECREASE IN THE SAME MANNER AS OTHER SIMILAR REAL PROPERTY WHICH IS NOT ENCUMBERED BY THIS RESTRICTION. COVENANTOR AND EACH SUCCESSOR, HEIR, OR ASSIGN OF COVENANTOR FURTHER ACKNOWLEDGES THAT AT ALL TIMES IN SETTING THE TRANSFER PRICE, THE PRIMARY OBJECTIVE OF THE CITY AND THIS AGREEMENT IS TO PROVIDE HOUSING TO "LOW" OR "MEDIAN" INCOME HOUSEHOLDS AT AN AFFORDABLE HOUSING COST. T/# Covenantor's Initials Covenantor shall include in the escrow instructions and Purchase and Sale Agreements with purchaser a provision which requires each purchaser to record a covenant which will run with the land and bind all successors-in-interest or assignees that will ensure that all subsequent purchasers and occupants qualify as "Low" or "Median" Income Households as applicable. Said covenant shall remain in full force and effect for the Affordability Period as set forth in Section 1. 3. Non-Discrimination Covenants. Covenantor covenants by and for itself, it successors and assigns, and all persons claiming under or though them that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, religion, sex, sexual orientation, creed, ancestry, national or ethnic origin, age, family or marital status, handicap or disability, in the sale, transfer, use, occupancy, tenure or enjoyment of the Restricted Unit, nor shall Covenantor itself or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, subtenants, or vendees in the Restricted Unit. Covenantor and its successors and assigns shall refrain from restricting the sale of the Restricted Unit on the basis of race, color, religion, sex, sexual orientation, creed, ancestry, national or ethnic origin, age, family or marital status, handicap or disability, of any person. All such deeds or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clause: (a) In deeds: "The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, religion, sex, sexual orientation, creed, ancestry, national or ethnic origin, age, family or marital status, handicap or disability, in the sale, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee himself or herself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, or vendees in the land herein conveyed. The foregoing covenants shall run with the land." T:\FILES\WP51\DLB\PAC SHORES\AFFORDABLE HOUSING CC&R'S.DOC 07/01/1007/13/10 4 (b) In contracts: "There shall be no discrimination against or segregation of, any person or group of persons on account of race, color, religion, sex, sexual orientation, creed, ancestry, national or ethnic origin, age, family or marital status, handicap or disability, in the sale, transfer, use, occupancy, tenure or enjoyment of the premises, nor shall the transferor himself or herself of any person claiming under or though him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use of occupancy of tenants, subtenants or vendee of the premises." (c) In leases: "The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators, and assignees, and all persons claiming under or though him or her, and this lease is made and accepted upon and subject to the following conditions: "That there shall be no discrimination against or segregation of any person or group of persons on account of race, color, religion, sex, sexual orientation, creed, ancestry, national or ethnic origin, age, family or marital status, handicap or disability, in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the premises herein leased nor shall the lessee himself or herself, or any person claiming under or though him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy of tenants, sublessees, subtenants, or vendees in the premises herein leased." 4. Covenants Do Not Impair Lien. No violation or breach of covenants, conditions, restrictions, provisions or limitations contained in this Agreement shall defeat or render invalid or in any way impair the lien or charge of any mortgage or deed of trust or security interest. 5. Covenants For Benefit of City. All covenants without regard to technical classification or designation shall be binding for the benefit of the Covenantee and such covenants shall run in favor of Covenantee for the entire period during which time such covenants shall be in force and effect, without regard to whether the Covenantee is or remains an owner of any land or interest therein to which such covenants relate. The Covenantee, in the event of any breach of any such covenants, shall have the right to exercise all the rights and remedies and to maintain any such action at law or suits in equity or other proper legal proceedings to enforce and to cure such breach to which it or any other beneficiaries of these covenants may be entitled during the term specified for such covenants, except the covenants against discrimination which may be enforced at law or in equity at any time in perpetuity. 6. Counterparts. This Agreement may be executed in a number of counterparts, each of which shall be an original, but all of which shall constitute one and the same document. T:\FILES\WP51\DLB\PAC SHORES\AFFORDABLE HOUSING CC&R'S.DOC 07/01/1007/13/10 5 7. Applicable Law. (a) If any provision of this Agreement or portion thereof, or the application of any provision to any person or circumstances, shall to any extent be held invalid, inoperative, or unenforceable, the remainder of this Agreement, or the application of such provision or portion thereof to any other persons or circumstances, shall not be affected thereby and it shall not be deeded that any such invalid provision affects the consideration for this Agreement; and each provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law. (b) This Agreement shall be construed in accordance with the laws of the State of California. [Balance of this page intentionally left blank] T:\FILES\WP51\DLB\PAC SHORES\AFFORDABLE HOUSING CC&R'S.DOC 07/01/1007/13/10 6 IN WITNESS WHEREOF, the Covenantee and Covenantor have caused this instrument to be executed on their behalf by their respective officers hereunto duly authorized as of the date set forth above. COVENANTOR: COVENANTEE: RP/PLC BLUE CANVAS, L.L.C., CIT OF HUNTIN BEACH a Delaware limited liability company a lifornia ipal corporation By: Its: dl " .O'er t City k THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body orate and politic By: 4�-o Deputy Executive Director APPROVED AS TO FORM: ) alb./ City Attorn y/ Agency Couns ,Lv - . 1 9 INITIAT PPROVED: - ;0 Planni g DkrecTor REVI D APPROVED: City Yauffgjr T:\FILES\WP51\DLB\PAC SHORES\AFFORDABLE HOUSING CC&R'S.DOC 07/01/1007/13/10 7 STATE OF CALIFORNIA ) ) ss. COUNTY OF ORANGE ) On�, )7 , 2011, before me, Notary Public, personally appeared who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. [SEAL] Signature PATRICIA ALEXIS HANSON Commission# 1888030 a Notary Public-California z Orange County My Comm.Expires May 2.2014 STATE OF CALIFORNIA ) ) ss. COUNTY OF ORANGE ) On 1 b-14 , 2011, before me, KI t� Notary Public, personally appeared f� (� W+Lj-- �— who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he/so executed the same in his/hjgr authorized capacity, and that by hisltW signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. [SEAL] Signature Main'n IpIpllpppN111pINHI1111ppppl11p11p11pp11Hppllppllpm KATWEEN NELSON _c COMM.#1814694 Notary Public-California 8 Oran7Lgpe County ire — r-4Co1=HUW OUR T:\FILES\WP51\DLB\PAC SHORES\AFFORDABLE HOUSING CC&R'S.DOC 07/01/1007/13/10 8 EXHIBIT"A" Legal Description of the Restricted Units All that certain real property in the City of Huntington Beach, County of Orange, State of California, described as follows: Parcel 1: The "Median-Income Households" consisting of: Unit 156 , as shown on that certain Condominium Plan Pacific Shores - Phase 4 recorded on June 9, 2001, as Instrument No. 2011000284963 of Official Records of Orange County, California, covering portions of Lots 10 and "J" of Tract No. 16733, as per the Map, lying within the boundaries of said Condominium Plan. Parcel 2: The "Low-Income Households" consisting of: Unit 159 , as shown on that certain Condominium Plan Pacific Shores - Phase 4 recorded on June 9, 2001, as Instrument No. 2011000284963 of Official Records of Orange County, California, covering portions of Lots 10 and "J"of Tract No. 16733, as per the Map, lying within the boundaries of said Condominium Plan. lABlue Canvas\Affordable Housing\Affordable Housing CCR's-Bungalow Phase 3 Exhibit A Only(07-12-10)(3).doc 07/12/10 Exhibit "B" Lomond Drive �.. ) 0 J L s a ((. P s n r .. -1 J Sage Drive L Pad Future S 1 i Kendall Drive .. I n _ o �Noele Drive ] i kin s is fl't t. s0 .11 `}— - < . U ! 1 z D I s s o e ��. s 1 i8 n s .8 ni s . .8 n s 1 its 4 �1 irs 3 1 U 'ts nit Phase Bungalows Villas Total Affordable Bungalows Models 3 4 7 1 9 10 22 .rW.. - PACIFIC SHORES 2 12 5 17 Total 21 Huntington Beach, CA 3 12 8 20 4 12 8 20 Affordable Unit 5 12 8 20 6 12 8 20 & Phase Map 7 12 8 20 8 12 8 20 9 12 11' 23 10 15t -- 12 `Includes Parking Lot Total 123 78 201 '' " EXHIBIT "C" Promissory Note and Deed of Trust (See Attached) OFFICIAL BUSINESS ) Document entitled to free recording per ) Government Code§§6103 and 27383 ) Recording Requested By: ) Redevelopment Agency ) of the City of Huntington Beach ) 2000 Main Street ) Huntington Beach, California 92648 ) Attn: Economic Development ) Dept./Housing Division ) SPACE ABOVE THIS LINE FOR RECORDER'S USE PROMISSORY NOTE TO SECURE AFFORDABILITY RESTRICTIONS ON TRANSFER OF PROPERTY THIS PROMISSORY NOTE (the"Note") is dated this day of 20—, between (collectively, "Promissor") and the Redevelopment Agency of the City of Huntington Beach ("Agency") with reference to the following facts: A. This Promissory Note is made in reference to that property in the City of Huntington Beach, County of Orange, State of California, with the street address of Huntington Beach, California 92648, and the Assessor's Parcel No. (the "Property"). B. A "Declaration of Conditions, Covenants and Restrictions for Property" was recorded on , 20_, as Instrument Number , in the Office of the County Recorder of the County of Orange, California (the "Resale Restrictions"). Among other things, the Resale Restrictions limit the price that the Property may be sold to an "Affordable Housing Cost" to "Low Income Households," as those terms are defined in the Resale Restrictions, and further defined in the current Affordable Housing Regulations of the City of Huntington Beach and the Agency Deed of Trust referred to below. C. Concurrently with executing this Note, Promissor has executed a Deed of Trust securing and modifying the Resale Restrictions (the "Agency of Deed of Trust"). D. Pursuant to the Resale Restrictions, the City has approved the sale of the Property to Promissor at an Affordable Housing Cost. To insure that any further sale, transfer or assignment of the Property occurs with the City's approval and at an Affordable Housing Cost, the City has required as a condition of the Promissor's purchase of the Property that Promissor execute this Note. 08-1542.005/60418 1 AGREEMENT NOW, THEREFORE, the parties agree as follows: 1. Incorporation of Recitals. The recitals set forth above are incorporated by reference as though fully set forth herein. 2. Amount of the Note. The Amount of this Note is the "Transfer Price" of the Property, less the "Affordable Housing Cost." The Transfer Price shall be determined according to the circumstances that cause the Amount of the Note to become due pursuant to Section 3 of this Note. In the case of the sale of the Property without the City's consent, the Transfer Price shall be the market sales price. In the case of the financing or refinancing of the Property without the City's consent, the Transfer Price shall be the loan amount in excess of the last loan balance on the First Mortgage that the City previously approved. In all other cases, the Transfer Price shall be the fair market value of the Property as established by the Director of Economic Development of the City pursuant to an appraisal. The term "Affordable Housing Cost" shall be defined according to the current Affordable Housing Regulations as adopted by the City of Huntington Beach. Promissor promises to pay the Amount of this Note when due to the Redevelopment Agency at 2000 Main Street, P.O. Box 190, Huntington Beach, California 92648, or at such other address as Agency may direct from time to time in writing. All sums hereunder shall be payable in lawful money of the United States of America and all sums shall be credited first to interest then due and the balance to principal. 3. Due on Sale. Transfer or Refinancing. Promissor agrees to notify the Agency not less than thirty (30) days prior to (i) the sale or transfer of the Property or (ii) any financing or refinancing of the Property. This Note shall be due and payable upon (i) such sale or transfer without the City's consent, (ii) the financing or refinancing of the Property without the City's consent, (iii) Promissor is no longer an occupant of the Property, or (iv) Promissor is in material default of any other obligation under the Resale Restrictions, or the Agency Deed of Trust. 4. Expiration of the Note Obligation. In the event Promissor does not sell or transfer the Property, does not fail to occupy the Property, does not refinance, or is not in material breach of any other provision of the Resale Restrictions or the Agency Deed of Trust before the Thirtieth anniversary of the date of this Note, Promissor shall have no obligation to pay the Note Amount to Agency upon later sale, transfer or refinancing of the Property. 5. Default. The entire unpaid Amount of this Note shall be due and payable in full in the event of a default. The following shall be deemed to be an event of default: a Failure of Promissor to pay any real property taxes or insurance premiums on the Property as they become due; or b. Any material breach of the Resale Restrictions or the Agency Deed of Trust, following the Agency giving notice of the breach and an opportunity to cure; or C. Failure of Promissor to pay the Note Amount when due. 08-1542.005160418 2 6. This Note is secured by a Deed of Trust, dated to the City of Huntington Beach, as Trustee, executed by Promissor in favor of the Agency. 7. Notice. All payments, notices, consents, waivers and other communications under this Agreement must be in writing and shall be deemed to have been given when (a) delivered by hand, or, (b) when received by the addressee, if sent by a nationally recognized overnight delivery service (receipt requested), in each case addressed as set forth below: If to PROMISSOR: Huntington Beach, CA 92648 If to AGENCY: Redevelopment Agency of the City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attention: City Clerk and, Economic Development Director City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 8. Governing Law. This Agreement is governed by and shall be construed in accordance with the laws of the State of California without giving effect to the conflict of laws principles thereof. The parties agree to personal jurisdiction in the State Courts in Orange County, California and specifically waive any claims of forum non conviens. 9. Modification. This Agreement shall not be amended or modified, except in writing, signed by both parties. 10. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the successors and assigns under this Note. This Note shall not be assigned without the express written consent of Agency. Dated: , 20 AF RDVFQAS TD FO�Afto�f J iFER RATH B , }e�. Ike Deputy City A 08-1542.0 0 516 04 1 8 3 OFFICIAL BUSINESS ) Document entitled to free recording per ) Government Code§§6103 and 27383 ) Recording Requested By: ) Redevelopment Agency ) of the City of Huntington Beach ) 2000 Main Street ) Huntington Beach, California 92648 ) Attn: Economic Development ) Dept./Housing Division ) SPACE ABOVE THIS LINE FOR RECORDER'S USE DEED OF TRUST WITH ASSIGNMENTS OF RENTS TO SECURE AFFORDABILITY RESTRICTIONS ON TRANSFER OF PROPERTY THIS DEED OF TRUST is made this day of 20 by and between whose address is Huntington Beach, California 92648 (collectively, the "Trustor") and the CITY OF HUNTINGTON BEACH, a municipal corporation (the "Trustee"), and the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic (the "Beneficiary"), whose address is 2000 Main Street, Huntington Beach, California 92648, with reference to the following facts: A. This Deed of Trust is made in reference to that property in the City of Huntington Beach, County of Orange, State of California, described legally in the Legal Description attached hereto as Exhibit "A" and incorporated herein with the street address Huntington Beach, California 92648 and the Assessor's Parcel No. (the "Property"). B. An "Agreement Declaring Conditions, Covenants and Restrictions for Property" was recorded on , 20,, as Instrument Number , in the Office of the County Recorder of the County of Orange, California (the "Resale Restrictions"). Among other things, the Resale Restrictions limit the price that the Property may be sold to an "Affordable Housing Cost" to "Low Income Households," as those terms are defined in the Resale Restrictions, and further defined in the current affordable housing regulations of the City of Huntington Beach and this Deed of Trust. C. Pursuant to this Deed of Trust. the Resale Restrictions as applied to the Property are extended to expire sixty (60) years from the date this Deed of Trust is recorded (the "Expiration Date"), which date is approximately , 20_ NOW, THEREFORE, TRUSTOR HEREBY irrevocably grants, transfers and assigns, to Trustee, in trust, with power of sale of the Property, together with (a) all buildings, improvements and fixtures, now or hereafter placed thereon, it being understood and agreed that all classes of property attached or unattached used in connection herewith shall be deemed fixtures, (b) rents, 1 08-1542.005160419 issues and profits thereof, (c) any water rights and/or stock are appurtenant or pertain to said land, and (d) all sums of money payable on the purchase price of the Property secured by a lien thereon or payable under any agreement for the sale thereof, SUBJECT, HOWEVER, to the right, power and authority hereinafter given to and conferred upon Beneficiary to collect and apply such rents, issues and profits, and all sums of money payable on the purchase price of the Property secured by a lien thereon or payable under any agreement. A. FOR THE PURPOSE OF SECURING: 1. Payment of the indebtedness evidenced by a promissory note executed by Trustor on , 20_ (the "Note"). The Amount of the indebtedness is the "Transfer Price" of the Property, less the "Affordable Housing Cost." The calculation of the Amount of the indebtedness is set forth with specificity in the Note, which is on file with the Economic Development Department of the City of Huntington Beach. 2. Performance of each and every obligation, covenant, promise and agreement of the Resale Restrictions, as amended by this Deed of Trust. B. TO PROTECT THE SECURITY OF THIS DEED OF TRUST, TRUSTOR AGREES: 1. Trustor agrees for itself, and its successors and assigns, and every successor to Trustor's interest in the Property, or any part thereof that for sixty (60) years from the date this Deed of Trust is recorded (the "Expiration Date"), to perform all obligations due under the Resale Restrictions, as those obligations are restated and modified as set forth below: (a) The Property shall only be owned and occupied by persons or families of "Low Income." "Low Income" shall mean persons or families earning less than eighty percent (80%) of Orange County median income, adjusted for appropriate family size. (b) The Property may only be sold at an "Affordable Housing Cost" to households of "Low Income," as those tern's are defined in current Affordable Housing Regulations as adopted by the City of Huntington Beach. Generally, those Regulations define Affordable Housing Cost to mean that purchase price which would result in monthly housing payments which do not exceed Thirty-Five Percent (35%) of Eighty Percent(80%) of the current Orange County monthly median income for a household equal to the number of bedrooms in the unit plus one (1) person. In determining monthly housing payments, the City will assume principal and interest payments on a conventional home mortgage after paying a ten percent (10%) down payment. The mortgage interest rate will be the prevailing Fannie Mae thirty (30) year mortgage rate, or a City-selected equivalent. Monthly housing costs will also include homeowner's association dues, utilities, homeowner's insurance, maintenance costs and property taxes. (c) The Trustor shall further comply with the Affordable Housing Guidelines promulgated by the City for purposes of administering the Affordable Housing Program of the City of Huntington Beach. (d) No transfer of the Property shall occur until the City of Huntington Beach determines (a) that the proposed purchaser intends to occupy the Property as the proposed purchaser's principal residence, (b) that the proposed purchaser is a person or family of Low Income, (c) that the proposed transfer occurs at an Affordable Housing Cost. The City of Huntington Beach shall not be obligated to approve a transfer until and unless the proposed 2 08-1542.005/60419 purchaser has submitted to the City of Huntington Beach such information and completed such forms as the City of Huntington Beach shall request to certify the proposed purchaser's intent with respect to its residency of the Property and its gross income, and the proposed purchaser has submitted an affidavit disclosing and certifying the amount of the proposed purchase price. Prior to conveyance of the Property, each approved purchaser shall submit to the City of Huntington Beach an executed disclosure statement which certifies that the purchaser is aware that the purchaser may only sell the unit at an Affordable Housing Cost to a Low Income person or family, that the maximum permitted sales price may be less than fair market value and that the unit must be owner-occupied at all times and cannot be rented or leased. TRUSTOR AND EACH SUCCESSOR, HEIR OR ASSIGN OF TRUSTOR UNDERSTANDS THAT THE DETERMINATION OF THE AFFORDABLE HOUSING COST CAN BE MADE ONLY AT THE TIME OF THE PROPOSED TRANSFER, TAKING INTO CONSIDERATION INTEREST RATES, THE TERMS OF SALE OFFERED TO AND THE ECONOMIC CIRCUMSTANCES OF THE PROPOSED PURCHASER AND OTHER FACTORS THAT CANNOT BE ACCURATELY PREDICTED, AND THAT THE TRANSFER PRICE PERMITTED HEREUNDER MAY BE LESS THAN THE FAIR MARKET VALUE OF THE PROPERTY AND MAY NOT INCREASE OR DECREASE IN THE SAME MANNER AS OTHER SIMILAR REAL PROPERTY WHICH IS NOT ENCUMBERED BY THIS RESTRICTION. TRUSTOR AND EACH SUCCESSOR, HEIR OR ASSIGN OF TRUSTOR FURTHER ACKNOWLEDGES THAT AT ALL TIMES IN SETTING THE TRANSFER PRICE THE PRIMARY OBJECTIVE OF THE BENEFICIARY AND THIS DEED OF TRUST IS TO PROVIDE HOUSING TO ELIGIBLE PERSONS OR FAMILIES AT AN AFFORDABLE HOUSING COST. Trustor Initials Trustor Initials (e) The City of Huntington Beach may impose any conditions on the approval of any transfer of the Property as it determines are reasonably necessary for the effective administration of its Affordable Housing Program. Such conditions may include, but are not limited to, requiring as a condition of the Property transfer that the buyer agrees to extend the Resale Restrictions for a new, sixty (60)year term. (f) The Covenants contained in this Section I shall run with the land and shall automatically terminate and be of no further force or effect sixty (60) years from the date this Deed of Trust is recorded, which date is approximately , 2070, unless further extended as a condition of transfer of the Property. By executing this Deed of Trust, the Trustor is extending the term of the Resale Restrictions. 2. Trustor covenants by and for itself, its successors and assigns, and all persons claiming under or through them that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the said property, nor shall Trustor itself or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in said property. 3 08-1542.0 0 5/6041 9 Trustor and its successors and assigns, shall refrain from restricting the rental or lease (if permitted by Trustor) or sale of said property on the basis of race, color, religion, sex, marital status, national origin or ancestry of any person. All such deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: (a) In deeds: "The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee himself or herself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessee or vendees in the land herein conveyed. The foregoing covenants shall run with the land." (b) In leases: "The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through him or her,. and this lease is made and accepted upon and subject to the following conditions: "There shall be no discrimination against or segregation of any person or group of persons on account of race, color, religion, sex, marital status, ancestry or national origin in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the premises herein leased nor shall the lessee himself or herself, or any person claiming under to through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sublessees, subtenants or vendees in the premises herein leased." (c) In contracts: "There shall be no discrimination against or segregation of, any person, or group of persons on account of race, color, religion, sex, marital status, ancestry or national origin, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the premises, nor shall the transferee himself or herself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessee or vendees of the premises." Nothing in this Section 2 shall be construed to authorize the rental or lease of the Property if such rental or lease is not otherwise permitted. The covenants in this paragraph shall run with the land in perpetuity. 3. No violation or breach of the covenants, conditions, restrictions, provisions or limitations contained in this Deed of Trust shall defeat or render invalid or in any way impair the lien or charge of any mortgage or deed of trust or security interest. 4. Trustor has made certain representations and disclosures as a requirement under the Resale Restrictions in order to induce Beneficiary to approve the sale of the Property to Trustor. In the event that Trustor has made any material misrepresentation or failed to disclose any material fact regarding said transaction, Beneficiary at its option and without notice, shall have the right to declare a material breach of the Resale Restrictions and the Note. Beneficiary may make a written declaration of default and demand for sale as in paragraph No. 4 08-1542.005/60419 6 herein set forth. Trustee, upon presentation to it of an affidavit signed by Beneficiary setting forth facts showing a default by Trustor under this paragraph, is authorized to accept as true and conclusive all facts and statements therein, and to act thereon hereunder. 5. All covenants without regard to technical classification or designation shall be binding for the benefit of the Beneficiary and such covenants shall run in favor of the Beneficiary for the entire period during which such covenants shall be in force and effect, without regard to whether the Beneficiary is or remains an owner of any land or interest therein to which such covenants relate. The Beneficiary, in the event of any breach of any such covenants, shall have the right to exercise all the rights and remedies and to maintain any action at law or suits in equity or other proper legal proceedings to enforce and to cure such breach to which it or any other beneficiaries of these covenants may be entitled during the term specified for such covenants, except the covenants against discrimination which may be enforced at law or in equity at any time in perpetuity. 6. Upon default by Trustor in the obligations of the Note, in the performance of any obligation under this Deed of Trust or under the terms of any First Lender's Deed of Trust which is or appears to be prior or superior to this Deed of Trust, Beneficiary may declare all sums secured by this Deed of Trust immediately due and payable by delivering to Trustee of a written declaration of default and demand for sale and a written notice of default and election to sell the Property. Default in the payment of any indebtedness secured by this Deed of Trust, in the obligation of the Note, or in the performance of any agreement under this Deed of Trust constitutes a default only under this Deed of Trust and the Note and does not constitute a default under the First Deed of Trust. Trustee shall cause the notice of default to be recorded. Beneficiary also shall deposit with Trustee this Deed of Trust, the Note, and all documents evidencing any additional expenditures secured by this Deed of Trust. After the lapse of such time as then may be required by law following recordation of such notice of default, and notice of sale having been given as then required by law, Trustee, without demand on Trustor, shall sell the Property at the time and place fixed by it in such notice of sale, whether as a whole or in separate parcels, and in such order as it may determine, at public auction to the highest bidder qualified under the Resale Restrictions and this Deed of Trust in lawful money of the United States, payable at time of sale. Trustee may postpone sale of all or any portion of the Property by public announcement at such time and place of sale, and from time to time thereafter may postpone such sale by public announcement at the time fixed by the preceding postponement. Trustee shall deliver to such purchaser its Deed conveying the Property so sold, but without any covenant or warranty, express or implied. The recital in such Deed of any matters of fact shall be conclusive of the truthfulness thereof. Any person, including Trustor, Trustee, or Beneficiary as hereinafter defined, may purchase at such sale. Trustee may also sell at any such sale and as part thereof any shares of corporate stock securing the obligations secured hereby, and Trustor waives demand and notice of such sale. (Beneficiary at its option may also foreclose on such shares by independent pledge sale, and Trustor waives demand and notice of such sale.) After deducting all costs, fees and expenses of Trustee, and of this Trust, including cost of evidence of title in connection with this sale, Trustee shall apply the proceeds of sale to payment, first; all sums expended under the teams hereof, not then repaid, with accrued interest at the rate then payable under the First Lender Deed of Trust secured hereby, and then of all other sums secured hereby, and, if there are any proceeds remaining, shall distribute them to the person or persons legally entitled thereto. 7. Trustor shall keep the Property in good condition and repair; to allow Beneficiary or its representatives to enter and inspect the Property at all reasonable times and access thereto, shall be permitted for that purpose; not to remove or demolish any building thereon; not 5 08-1542.005/60419 to make alterations thereto without the consent of the Beneficiary; to suffer or permit no change in the general nature of the occupancy of the Property without Beneficiary's written consent; to complete or restore promptly and in good workmanlike manner any building which may be constructed, damaged or destroyed thereon, including, without restricting the generality of the foregoing, damage from termites and dry-rot; to pay when due all claims for labor performed and materials furnished in connection with the Property and not to permit any mechanic's lien against the Property;to comply with all laws affecting the Property or requiring any alterations or improvements to be made thereon; not to initiate or acquiesce in any zoning reclassification without Beneficiary's written consent; not to commit or permit waste thereon; not to commit, suffer or permit any act upon the Property in violation of the law; to paint, cultivate, irrigate, fertilize, fumigate, prune, and do all other acts that from the character or use of the Property may be reasonably necessary; and to promptly pay all amounts due others upon agreements of lease or conditional sale of all fixtures, furnishings and equipment located thereon. 8. Trustor shall provide, and maintain in force at all times with respect to the Property, fire and other types of insurance as may be required by Beneficiary. All of such insurance shall have a loss payable endorsement in favor of Beneficiary, shall be for a term and in form, content, amount and in such companies.as may be satisfactory to Beneficiary, and the policies therefore shall be delivered to and remain in possession of Beneficiary as further security for the faithful performance of these trusts. At least thirty (30) days prior to the expiration of any such insurance policy, a policy or policies renewing or extending such expiring insurance shall be delivered to Beneficiary together with written evidence showing payment of the premium therefore and, in the event any such insurance policy and evidence of the payment of the premium therefore are not so delivered by Trustor to Beneficiary, Trustor by executing this Deed of Trust specifically requests Beneficiary to obtain such insurance and Beneficiary, without obligation to do so, without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof, may obtain such insurance through or from any insurance agency or company acceptable to it, pay the premium thereof, and may add the amount thereof to the indebtedness secured hereby, which amount shall bear a like rate of interest. Beneficiary may furnish to any insurance agency or company, or any other person, any information contained in or extracted from any insurance policy delivered to Beneficiary pursuant hereto and any information concerning the loan secured hereby. Neither Trustee nor Beneficiary shall be responsible for such insurance or for the collection of any insurance monies, or for any insolvency of any insurer or insurance underwriter. In case of insurance loss, Beneficiary is hereby authorized either(a) to settle and adjust any claim under the insurance policies provided for in this document without the consent of the Trustor, or (b) to allow Trustor to agree with the insurance company or companies on the amount to be paid upon the loss. In either case, the Beneficiary is authorized to collect and make receipt of any such insurance money. If Trustor is obligated to restore or replace the damaged or destroyed buildings or improvements under the terms of any lease or leases which are or may be prior to the lien of this Deed of Trust and such damage or destruction does not result in cancellation or termination of such lease, such proceeds, after deducting therefrom any expenses incurred in the collection thereof, shall be used to reimburse the Trustor for the cost of rebuilding or restoring the buildings or improvements on said premises. In all other cases, such insurance proceeds shall either be applied for the cost of the rebuilding or restoring the buildings or improvements on said premises. Such buildings and improvements shall be so restored or rebuilt as to be of at least equal value and substantially the same character as prior to the damage or destruction, and shall be in a condition satisfactory to Beneficiary. Such application or release shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. Any and all unexpired insurance shall inure to the benefit of, and pass to the purchaser of, the property conveyed at any Trustee sale held hereunder. 6 08-1542.00 516 0 41 9 9. Trustor shall pay: (a) at least ten (10) days before delinquency, all general and special City and County taxes, and all assessments on appurtenant water stock, affecting the Property, (b) when done, all special assessments for public improvements, without permitting any improvement bond to issue for any special assessment, (c) when done, all encumbrances, charges and lines, with interest,on the Property, or any part thereof, which are or appears to be prior to superior hereto, (d) if the security of this Deed of Trust is leasehold estate, to make any payment or do any act required of the Lessee or its successor in interest under the terms of the instrument or instruments creating said leasehold, (e) all costs, fees and expenses of this trust, (f) for any statement regarding the obligation secured hereby any amount demanded by Beneficiary not to exceed the maximum allowed by law thereof at the time when such request is made, (g) such other charges for services rendered by Beneficiary and furnished at Trustor's request or that of any successor in interest to Trustor as the Beneficiary may deem reasonable. 10. Should Trustor fail to make any payment or do any act as provided in this Deed of Trust, the Beneficiary or Trustee, but without obligation to do so and without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof, may (a) make or do the same in such manner and to such extent as either may deem necessary to protect the security hereof, Beneficiary or Trustee being authorized to enter upon the Property for such purposes, (b) commence, appear in, or defend any action or proceeding purporting to affect the security hereof or the property covered by this Deed of Trust, or the rights or powers of Beneficiary or Trustee, (c) pay, purchase, contest or compromise any encumbrance, charge or lien, which in the judgment of either is or appears to be prior or superior hereto, and (d) in exercising any such powers, pay necessary expenses, employ counsel and pay his reasonable fees. Trustor agrees to repay any amount so expended on demand of Beneficiary, and any amount so expended may be added by Beneficiary to the indebtedness secured hereby and shall bear a like rate of interest. 11. Trustor shall appear in and defend any action or proceeding purporting to affect the security hereof or the Property which is covered by this Deed of Trust, or the rights or powers of Beneficiary or Trustee, and whether or not Trustor so appears or defends, to pay all costs and expenses, including cost of evidence of title and attorney's fees in a reasonable sum, in any such action or proceeding in which Beneficiary or Trustee may appear by virtue of being made a party defendant or otherwise irrespective of whether the interest of Beneficiary or Trustee in the Property is directly questioned by such action, including any action for the condemnation or partition of said premises, and in any suit brought by Beneficiary to foreclose this Deed of Trust. 12. Trustor shall pay immediately and without demand, all sums expended under the terms of this Deed of Trust by Beneficiary or Trustee, with interest from the date of expenditure at the rate which the principal obligation secured hereby bears at the time such payment is made, and the repayment of such sums shall be secured hereby. 13. Should Trustor or any successor in interest to Trustor in the Property drill or extract, or enter into a lease for drilling or extraction of oil, gas or other hydrocarbon substances or any mineral of any kind or character, or sell, convey, further encumber, or alienate the Property, or any party thereof, or any interest therein, or be divested of his title or any interest therein in any manner or way, whether voluntarily or involuntarily, Beneficiary shall have the right, at its option, to declare any obligations secured hereby irrespective of the maturity date specified in any Note evidencing the same, immediately due and payable, and no waiver of this right shall be effective unless in writing. 7 08-1542.005/60419 14. Any award, settlement or damages for injury or damages to the Property, or in construction with the transaction financed by such loan, and any award of damages in connection with any condemnation for public use of or injury to the Property, or any part thereof, is hereby assigned and shall be paid to Beneficiary, who may apply or release such monies received by it in such manner and with the same effect as above provided for the disposition of proceeds of fire or other insurance. 15. By accepting payment of any sums secured by this Deed of Trust after its due date, or by making any payment, performing any act on behalf of Trustor, that Trustor was obligated hereunder, but failed, to make, or perform, or by adding any payment so made by Beneficiary to the indebtedness secured hereby, Beneficiary does not waive its right either to require prompt payment when due of all other sums so secured or to declare a default for failure so to pay. 16. At any time, or from time to time, without liability of the Beneficiary or Trustee thereof, and without notice, upon written request of Beneficiary and presentation of this Deed of Trust and the Note secured hereby for endorsement, and without affecting the personal liability of any person for payment of the indebtedness secured hereby, or the lien of the Deed of Trust upon the remainder] of the Property for the full amount of the indebtedness then or thereafter secured hereby, or, the rights or powers of Beneficiary or the Trustee with respect to the remainder of the Property, Trustee may: (a) reconvey any part of the Property, (b) consent to the making of any nl ap or plat thereof; (c)join in granting any easement thereon, (d)join in any agreement subordinating the lien or charge hereof. 17. The lien hereof shall remain in full force and effect during any postponement or extension of time of payment of the indebtedness secured hereby, or any part thereof. 18. As additional security, Trustor irrevocably assigns to Beneficiary the rents, issues, and profits of the Property for the purposes and upon the terms and conditions set forth below. This assignment shall not impose upon Beneficiary any duty to produce rents from the property affected by this Deed of Trust, or cause Agency to be (a) "mortgages in possession"for any purpose; (b) responsible for performing any of the obligations of the lessor under any lease; or(c) responsible for any waste committed by lessees or any other parties, for any dangerous or defective condition of the property affected by this Deed of Trust, or for any negligence in the management, upkeiep, or control of such rights to rents, issues and profits is not contingent upon, and may be exercised without possession of, the property affected by this Deed of Trust. Beneficiary confers upon Trustor a license ("License") to collect and retain the rents, issues and profits iof the property affected by this Deed of Trust as they become due and payable, until the occurrence of a default hereunder. Upon such default, the License shall be automatically revoked and Beneficiary may collect and retain the rents, issues and profits without notice and without taking possessions of the property affected by this Deed of Trust. This right to collect rents, issues and profits shall not grant to Beneficiary or Trustee the right to possession, except as otherwise provided herein; and neither said right, nor termination of the License, shall impose upon Beneficiary or Trustee the duty to produce rents, issues or profits or maintain all or any part of the Property affected by this Trust Deed. If Trustor shall default as aforesaid, Trustor'si right to collect any such money shall cease and Beneficiary shall have the right, with or without taking possession of the property affected hereby, to collect all rents, issues, royalties and profits and shall be authorized to, and may, without notice and irrespective of whether declaration of default has been delivered to Trustee and without regard to the 8 08-1542.0 0 516 0 41 9 adequacy of the security for the indebtedness secured hereby, either personally or by attorney or agent without bringing any action or proceeding, or by receiver to be appointed by the Court, enter into possession and hold, occupy, possess and enjoy the Property, make, cancel, enforce and modify leases, obtain and eject tenants, and set and modify rents and terms of rents, and to sue, and to take, receive and collect all or any part of the said rents, issues, and profits of the property affected hereby, and after paying such costs of maintenance, operation of the Property, and of collection including reasonable attorneys' fees, as in its judgment it may deem proper, to apply the balance upon any indebtedness then secured hereby, the rents, issues, royalties and profits of the Property being hereby assigned to Beneficiary for said purposes. The acceptance of such rents, issues, royalties and profits shall not constitute a waiver of any other right which Trustee or Beneficiary may enjoy under this Deed of Trust or under the laws of California. Failure of or discontinuance by Beneficiary at any time, or from time to time, to collect any such rents, issues, royalties or profits shall not in any manner affect the subsequent enforcement by Beneficiary of the right, power and authority to collect the same. The receipt and application by said Beneficiary of all such rents, issues, royalties and profits pursuant hereto, after execution and delivery of declaration of default and demand for sale as hereinafter provided, or during the pendency of Trustee's sale proceedings hereunder, shall not cure such breach or default nor affect sale proceedings, or any sale made pursuant thereto, but such rents, issues, royalties and profits, less all costs of operation, maintenance, collection and reasonable attorneys'fees, when received by Beneficiary, shall be applied in reduction of the indebtedness secured hereby, from time to time, in such order as Beneficiary may determine. Nothing contained herein, nor the exercise of the right by Beneficiary to collect, shall be, or be construed to be, an affirmation by Beneficiary of any tenancy, lease or option, nor an assumption of liability under, nor subordination of the lien or charge of this Deed of Trust to, any such tenancy, lease or option. 19. If the security of this Deed of Trust is a leasehold estate, the Trustor agrees that: (a) the term "Lease" as used herein shall mean the lease creating the "leasehold estate"' (b) Trustor shall not amend, change or modify his leasehold interest, or the Lease, or agree to do so, without the written consent of the Beneficiary; (c) Trustor will promptly advise Beneficiary regarding any notice, request or demand received by him from the lessor under the Lease and promptly furnish Beneficiary with a copy of any such notice, request or demand; (d) as long as any of the indebtedness secured hereby shall remain unpaid, unless the Beneficiary shall otherwise consent thereto in writing, the leasehold estate shall not merge with the fee title but shall always be kept separate and distinct, notwithstanding the union of said estates in any party; (e) Trustor agrees that it will promptly, strictly, and faithfully perform, fulfill, and comply with all covenants, agreements, terms, conditions and provisions under any lease affecting the premises and to neither do anything, nor to permit anything to be done which may cause modification or termination of any such lease or of the obligations of any lessee or person claiming through such lease or the rents provided for therein or the interest of the lessor or the Beneficiary therein or thereunder. Trustor further agrees he will not execute a Deed of Trust or mortgage which may be or become superior to any leasehold estate that is security for this Deed of Trust. In the event of a violation of any of the covenants set forth in this paragraph, Beneficiary shall have the right, at its option, to declare all sums secured hereby immediately due and payable. Consent to or waiver of one of said violations shall not be deemed to be a consent to or waiver of any other violation. If the security for this Deed of Trust is a leasehold estate, the term "property" as used in this Deed of Trust shall be deemed to mean the leasehold estate whenever the context so requires for the protection of the Beneficiary. 20. Trustor waives, to the fullest extent permissible by law, the right to plead any statute of limitations as a defense to any demand secured hereby. 9 08-1542.0 0 516 041 9 21. Beneficiary may, from time to time, by instrument in writing, substitute a successor or successors to any Trustee named herein or acting hereunder, which instrument, executed and acknowledged by Beneficiary and recorded in the office of the recorder of the county or counties where the Property is situated, shall be conclusive proof of property substitution of such successor Trustee or Trustees, who shall, without conveyances from the Trustee predecessor, succeed to all its title, estate, rights, powers and duties, including but not limited to the power to reconvey the whole or any part of the property covered by this Deed of Trust. Such instrument must contain the name of the original Trustor, Trustee and Beneficiary hereunder, the book and page where this Deed of Trust is recorded. If notice of default shall have been recorded, this power of substitution cannot be exercised until after the costs, fees and expenses of the then acting Trustee shall have been paid to such Trustee, who shall endorse receipt thereof upon such instrument. The procedures herein provided for substitution of Trustee shall not be exclusive of other provisions for substitution provided by law. 22. This Deed of Trust applies to, inures to the benefit of, and binds all parties hereto, their heirs, legatees, devisees, administrators, executors, successors and assigns. The term "Beneficiary" shall mean the owner and holder, including pledgee, of the Note secured hereby, whether or not names as Beneficiary herein. In this Deed of Trust, whenever the context so requires, the masculine gender includes the feminine and/or neuter, and the singular number includes the plural. 23. That in the event of a demand for, and the preparation and delivery of a written statement regarding the obligations secured by this Deed of Trust pursuant to Sections 2943 and 2954 of the Civil Code of California, Beneficiary shall be entitled to make a reasonable charge, not exceeding the maximum amount which is permitted by law at the time the statement is furnished. Beneficiary may also charge Trustor a reasonable fee for any other services rendered to Trustor or rendered in Trustor's behalf in connection with the Property of this Deed of Trust, including changing Beneficiary's records, pertaining to this Deed of Trust in connection with the transfer of the Property, or releasing an existing policy of fire insurance or other casualty insurance held by Beneficiary and replacing the same with another such policy. 24. Trustee accepts this Trust when this Deed of Trust, duly executed and acknowledged, is made a public record as provided by law. Trustee is not obligated to notify any party hereto of pending sale under any other Deed of Trust or of any action or proceeding in which Trustor, Beneficiary, or Trustee shall be a party unless brought by Trustee. 25. Any notice which any party hereto may desire or be required to give to the other party shall be in writing. The mailing thereof must be certified mail addressed to the Trustor at his address hereinabove set forth or to the Beneficiary at his office or at such other place as such parties hereto may designate in writing. Rest of page not used 10 08-1542.0 0 516 0 41 9 THE UNDERSIGNED TRUSTOR REQUESTS that a copy of any notice of default and of any notice of sale hereunder be mailed to him at his address hereinbefore set forth. TRUSTOR: Dated: , 20 REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH By: Deputy Executive Director CITY OF HUNTINGTON BEACH By: Director of Economic Development APPROVE AS TO FORM J fFER Attorney ®� i e Vig Deputy City Attorney 11 08-1542.005/60419 OFFICIAL BUSINESS ) Document entitled to free recording per Government Code§§ 6103 and 27383 ) Recording Requested By: Redevelopment Agency ) of the City of Huntington Beach ) 2000 Main Street ) Huntington Beach,California 92648 ) Attn: Economic Development ) Dept./Housing Division ) SPACE ABOVE THIS LINE FOR RECORDER'S USE PROMISSORY NOTE TO SECURE AFFORDABILITY RESTRICTIONS ON TRANSFER OF PROPERTY THIS PROMISSORY NOTE(the "Note")is dated this day of , 20 ,between (collectively, "Promissor") and the Redevelopment Agency of the City of Huntington Beach ("Agency") with reference to the following facts: A. This Promissory Note is made in reference to that property in the City of Huntington Beach, County of Orange, State of California,with the street address of Huntington Beach, California 92648, and the Assessor's Parcel No. (the "Property"). B. A "Declaration of Conditions, Covenants and Restrictions for Property" was recorded on ,20_,as Instrument Number , in the Office of the County Recorder of the County of Orange, California(the "Resale Restrictions"). Among other things, the Resale Restrictions limit the price that the Property may be sold to an "Affordable Housing Cost" to "Median Income Households," as those terms are defined in the Resale Restrictions, and further defined in the current Affordable Housing Regulations of the City of Huntington Beach and the Agency Deed of Trust referred to below. C. Concurrently with executing this Note, Promissor has executed a Deed of Trust securing and modifying the Resale Restrictions(the "Agency of Deed of Trust"). D. Pursuant to the Resale Restrictions, the City has approved the sale of the Property to Promissor at an Affordable Housing Cost. To insure that any further sale, transfer or assignment of the Property occurs with the City's approval and at an Affordable Housing Cost, the City has required as a condition of the Promissor'purchase of the Property that Promissor execute this Note. 08-1542.005/60416 median 1 AGREEMENT NOW,THEREFORE,the parties agree as follows: 1. Incorporation of Recitals. The recitals set forth above are incorporated by reference as though fully set forth herein. 2. Amount of the Note. The Amount of this Note is the "Transfer Price" of the Property, less the "Affordable Housing Cost." The Transfer Price shall be determined according to the circumstances that cause the Amount of the Note to become due pursuant to Section 3 of this Note. In the case of the sale of the Property without the City's consent, the Transfer Price shall be the market sales price. In the case of the financing or refinancing of the Property without the City's consent, the Transfer Price shall be the loan amount in excess of the last loan balance on the First Mortgage that the City previously approved. In all other cases, the Transfer Price shall be the fair market value of the Property as established by the Director of Economic Development of the City pursuant to an appraisal. The term "Affordable Housing Cost" shall be defined according to the current Affordable Housing Regulations as adopted by the City of Huntington Beach. Promissor promises to pay the Amount of this Note when due to the Redevelopment Agency at 2000 Main Street, P.O. Box 190, Huntington Beach, California 92648, or at such other address as Agency may direct from time to time in writing. All sums hereunder shall be payable in lawful money of the United States of America and all sums shall be credited first to interest then due and the balance to principal. 3. Due on Sale, Transfer or Refinancing. Promissor agrees to notify the Agency not less than thirty (30)days prior to (i)the sale or transfer of the Property or(ii) any financing or refinancing of the Property. This Note shall be due and payable upon (i) such sale or transfer without the City's consent, (ii)the financing or refinancing of the Property without the City's consent, (iii) Promissor is no longer an occupant of the Property, or(iv)Promissor is in material default of any other obligation under the Resale Restrictions, or the Agency Deed of Trust. 4. Expiration of the Note Obligation. In the event Promissor does not sell or transfer the Property, does not fail to occupy the Property, does not refinance, or is not in material breach of any other provision of the Resale Restrictions or the Agency Deed of Trust before the Thirtieth anniversary of the date of this Note, Promissor shall have no obligation to pay the Note Amount to Agency upon later sale,transfer or refinancing of the Property. 5. Default. The entire unpaid Amount of this Note shall be due and payable in full in the event of a default. The following shall be deemed to be an event of default: a Failure of Promissor to pay any real property taxes or insurance premiums on the Property as they become due; or 08-1542.005/60416 median 2 b. Any material breach of the Resale Restrictions or the Agency Deed of Trust, following the Agency giving notice of the breach and an opportunity to cure; or C. Failure of Promissor to pay the Note Amount when due. 6. This Note is secured by a Deed of Trust, dated , to the City of Huntington Beach, as Trustee, executed by Promissor in favor of the Agency. 7. Notice. All payments, notices, consents, waivers and other communications under this Agreement must be in writing and shall be deemed to have been given when (a) delivered by hand, or, (b)when received by the addressee,if sent by a nationally recognized overnight delivery service(receipt requested),in each case addressed as set forth below: If to PROMISSOR: Huntington Beach, CA 92648 If to AGENCY: Redevelopment Agency of the City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attention: City Clerk and, Economic Development Director City of Huntington Beach 2000 Main Street Huntington Beach,CA 92648 8. Governing This Agreement is governed by and shall be construed in accordance with the laws of the State of California without giving effect to the conflict of laws principles thereof. The parties agree to personal jurisdiction in the State Courts in Orange County, California and specifically waive any claims of forum non conviens. 9. Modification. This Agreement shall not be amended or modified, except in writing, signed by both parties. 10. Successors and Assi ng_s. This Agreement shall be binding upon and inure to the benefit of the successors and assigns under this Note. This Note shall not be assigned without the express written consent of Agency. 08-1542.005/60416 median ,.r' ,W AS J-o FORM � ��'�.�` 3 J h� = RFtTH, A'Attorne} - ,M� Deputy CnyAttomey OFFICIAL BUSINESS ) Document entitled to free recording per ) Government Code §§ 6103 and 27383 ) Recording Requested By: ) } Redevelopment Agency ) of the City of Huntington Beach ) 2000 Main Street ) Huntington Beach,California 92648 ) Attn: Economic Development ) Dept./Housing Division ) SPACE ABOVE THIS LINE FOR RECORDERS USE DEED OF TRUST WITH ASSIGNMENTS OF RENTS TO SECURE AFFORDABILITY RESTRICTIONS ON TRANSFER OF PROPERTY THIS DEED OF TRUST is made this day of 20 by and between whose address is , Huntington Beach, California 92648 (collectively, the "Trustor") and the CITY OF HUNTINGTON BEACH, a municipal corporation(the "Trustee"), and the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic (the "Beneficiary"), whose address is 2000 Main Street, Huntington Beach, California 92648, with reference to the following facts: A. This Deed of Trust is made in reference to that property in the City of Huntington Beach, County of Orange, State of California, described legally in the Legal Description attached hereto as Exhibit "A" and incorporated herein with the street address , Huntington Beach, California 92648 and the Assessor's Parcel No. (the "Property"). B. An "Agreement Declaring Conditions, Covenants and Restrictions for Property" was recorded on ,20 ,as Instrument Number , in the Office of the County Recorder of the County of Orange, California (the "Resale Restrictions"). Among other things,the Resale Restrictions limit the price that the Property may be sold to an "Affordable Housing Cost" to "Median Income Households," as those terms are defined in the Resale Restrictions, and further defined in the current affordable housing regulations of the City of Huntington Beach and this Deed of Trust. C. Pursuant to this Deed of Trust. the Resale Restrictions as applied to the Property are extended to expire sixty (60) years from the date this Deed of Trust is recorded (the "Expiration Date"),which date is approximately , 20^ 1 08-1542.005/60417 median NOW, THEREFORE, TRUSTOR HEREBY irrevocably grants, transfers and assigns, to Trustee, in trust, with power of sale of the Property, together with (a) all buildings, improvements and fixtures, now or hereafter placed thereon, it being understood and agreed that all classes of property attached or unattached used in connection herewith shall be deemed fixtures, (b) rents, issues and profits thereof, (c) any water rights and/or stock are appurtenant or pertain to said land, and (d) all sums of money payable on the purchase price of the Property secured by a lien thereon or payable under any agreement for the sale thereof, SUBJECT, HOWEVER, to the right, power and authority hereinafter given to and conferred upon Beneficiary to collect and apply such rents, issues and profits, and all sums of money payable on the purchase price of the Property secured by a lien thereon or payable under any agreement. A. FOR THE PURPOSE OF SECURING: 1. Payment of the indebtedness evidenced by a promissory note executed by Trustor on , 20` (the "Note"). The Amount of the indebtedness is the "Transfer Price" of the Property, less the "Affordable Housing Cost." The calculation of the Amount of the indebtedness is set forth with specificity in the Note, which is on file with the Economic Development Department of the City of Huntington Beach. 2. Performance of each and every obligation, covenant, promise and agreement of the Resale Restrictions,as amended by this Deed of Trust. B. TO PROTECT THE SECURITY OF THIS DEED OF TRUST,TRUSTOR AGREES: 1. Trustor agrees for itself, and its successors and assigns, and every successor to Trustor's interest in the Property, or any part thereof that for sixty (60) years from the date this Deed of Trust is recorded (the "Expiration Date"), to perform all obligations due under the Resale Restrictions, as those obligations are restated and modified as set forth below: (a) The Property shall only be owned and occupied by persons or families of "Median Income." "Median Income" shall mean persons or families earning less than eighty percent(100%) of Orange County median income, adjusted for appropriate family size. (b) The Property may only be sold at an "Affordable Housing Cost" to households of "Median Income," as those tern's are defined in current Affordable Housing Regulations as adopted by the City of Huntington Beach. Generally, those Regulations define Affordable Housing Cost to mean that purchase price which would result in monthly housing payments which do not exceed Thirty-Five Percent(35%)of Eighty Percent(80%) of the current Orange County monthly median income for a household equal to the number of bedrooms in the unit plus one (1) person. In determining monthly housing payments, the City will assume principal and interest payments on a conventional home mortgage after paying a ten percent (10%) down payment. The mortgage interest rate will be the prevailing Fannie Mae thirty (30) year mortgage rate, or a City-selected equivalent. Monthly housing costs will also include homeowner's association dues, utilities, homeowner's insurance, maintenance costs and property taxes. 2 08-1542.005/60417 median (c) The Trustor shall further comply with the Affordable Housing Guidelines promulgated by the City for purposes of administering the Affordable Housing Program of the City of Huntington Beach. (d) No transfer of the Property shall occur until the City of Huntington Beach determines (a) that the proposed purchaser intends to occupy the Property as the proposed purchaser's principal residence, (b) that the proposed purchaser is a person or family of Median Income, (c) that the proposed transfer occurs at an Affordable Housing Cost. The City of Huntington Beach shall not be obligated to approve a transfer until and unless the proposed purchaser has submitted to the City of Huntington Beach such information and completed such forms as the City of Huntington Beach shall request to certify the proposed purchaser's intent with respect to its residency of the Property and its gross income, and the proposed purchaser has submitted an affidavit disclosing and certifying the amount of the proposed purchase price. Prior to conveyance of the Property, each approved purchaser shall submit to the City of Huntington Beach an executed disclosure statement which certifies that the purchaser is aware that the purchaser may only sell the unit at an Affordable Housing Cost to a Median Income person or family, that the maximum permitted sales price may be less than fair market value and that the unit must be owner-occupied at all times and cannot be rented or leased. TRUSTOR AND EACH SUCCESSOR, HEIR OR ASSIGN OF TRUSTOR UNDERSTANDS THAT THE DETERMINATION OF THE AFFORDABLE HOUSING COST CAN BE MADE ONLY AT THE TIME OF THE PROPOSED TRANSFER, TAKING INTO CONSIDERATION INTEREST RATES, THE TERMS OF SALE OFFERED TO AND THE ECONOMIC CIRCUMSTANCES OF THE PROPOSED PURCHASER AND OTHER FACTORS THAT CANNOT BE ACCURATELY PREDICTED, AND THAT THE TRANSFER PRICE PERMITTED HEREUNDER MAY BE LESS THAN THE FAIR MARKET VALUE OF THE PROPERTY AND MAY NOT INCREASE OR DECREASE IN THE SAME MANNER AS OTHER SIMILAR REAL PROPERTY WHICH IS NOT ENCUMBERED BY THIS RESTRICTION. TRUSTOR AND EACH SUCCESSOR, HEIR OR ASSIGN OF TRUSTOR FURTHER ACKNOWLEDGES THAT AT ALL TIMES IN SETTING THE TRANSFER PRICE THE PRIMARY OBJECTIVE OF THE BENEFICIARY AND THIS DEED OF TRUST IS TO PROVIDE HOUSING TO ELIGIBLE PERSONS OR FAMILIES AT AN AFFORDABLE HOUSING COST. Trustor Initials Trustor Initials (e) The City of Huntington Beach may impose any conditions on the approval of any transfer of the Property as it determines are reasonably necessary for the effective administration of its Affordable Housing Program. Such conditions may include, but are not limited to,requiring as a condition of the Property transfer that the buyer agrees to extend the Resale Restrictions for a new, sixty(60)year term. 3 08-1542.005/60417 median W The Covenants contained in this Section I shall run with the land and shall automatically terminate and be of no further force or effect sixty (60) years from the date this Deed of Trust is recorded, which date is approximately , 2070, unless further extended as a condition of transfer of the Property. By executing this Deed of Trust, the Trustor is extending the term of the Resale Restrictions. 2. Trustor covenants by and for itself, its successors and assigns, and all persons claiming under or through them that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the said property, nor shall Trustor itself or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in said property. Trustor and its successors and assigns, shall refrain from restricting the rental or lease (if permitted by Trustor) or sale of said property on the basis of race, color, religion, sex, marital status, national origin or ancestry of any person. All such deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: (a) In deeds: "The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee himself or herself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessee or vendees in the land herein conveyed.The foregoing covenants shall run with the land." (b) In leases: "The lessee herein covenants by and for himself or herself, his or her heirs, executors,administrators and assigns, and all persons claiming under or through him or her,. and this lease is made and accepted upon and subject to the following conditions: "There shall be no discrimination against or segregation of any person or group of persons on account of race, color,religion, sex,marital status, ancestry or national origin in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the premises herein leased nor shall the lessee himself or herself, or any person claiming under to through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sublessees, subtenants or vendees in the premises herein leased." (c) In contracts: "There shall be no discrimination against or segregation of, any person, or group of persons on account of race, color, religion, sex, marital status, ancestry or national origin, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of 4 08-1542.005/60417 median the premises,nor shall the transferee himself or herself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessee or vendees of the premises." Nothing in this Section 2 shall be construed to authorize the rental or lease of the Property if such rental or lease is not otherwise permitted. The covenants in this paragraph shall run with the land in perpetuity. 3. No violation or breach of the covenants, conditions, restrictions, provisions or limitations contained in this Deed of Trust shall defeat or render invalid or in any way impair the lien or charge of any mortgage or deed of trust or security interest. 4. Trustor has made certain representations and disclosures as a requirement under the Resale Restrictions in order to induce Beneficiary to approve the sale of the Property to Trustor. In the event that Trustor has made any material misrepresentation or failed to disclose any material fact regarding said transaction, Beneficiary at its option and without notice, shall have the right to declare a material breach of the Resale Restrictions and the Note. Beneficiary may make a written declaration of default and demand for sale as in paragraph No. 6 herein set forth. Trustee, upon presentation to it of an affidavit signed by Beneficiary setting forth facts showing a default by Trustor under this paragraph, is authorized to accept as true and conclusive all facts and statements therein,and to act thereon hereunder. 5. All covenants without regard to technical classification or designation shall be binding for the benefit of the Beneficiary and such covenants shall run in favor of the Beneficiary for the entire period during which such,covenants shall be in force and effect, without regard to whether the Beneficiary is or remains an owner of any land or interest therein to which such covenants relate. The Beneficiary, in the event of any breach of any such covenants, shall have the right to exercise all the rights and remedies and to maintain any action at law or suits in equity or other proper legal proceedings to enforce and to cure such breach to which it or any other beneficiaries of these covenants may be entitled during the term specified for such covenants, except the covenants against discrimination which may be enforced at law or in equity at any time in perpetuity. 6. Upon default by Trustor in the obligations of the Note, in the performance of any obligation under this Deed of Trust or under the terms of any First Lender's Deed of Trust which is or appears to be prior or superior to this Deed of Trust, Beneficiary may declare all sums secured by this Deed of Trust immediately due and payable by delivering to Trustee of a written declaration of default and demand for sale and a written notice of default and election to sell the Property. Default in the payment of any indebtedness secured by this Deed of Trust, in the obligation of the Note, or in the performance of any agreement under this Deed of Trust constitutes a default only under this Deed of Trust and the Note and does not constitute a default under the First Deed of Trust. Trustee shall cause the notice of default to be recorded. Beneficiary also shall deposit with Trustee this Deed of Trust, the Note, and all documents evidencing any additional expenditures secured by this Deed of Trust. After the lapse of such time as then may be required by law following recordation of such notice of default, and notice 5 08-1542.005/60417 median of sale having been given as then required by law, Trustee, without demand on Trustor, shall sell the Property at the time and place fixed by it in such notice of sale, whether as a whole or in separate parcels, and in such order as it may determine, at public auction to the highest bidder qualified under the Resale Restrictions and this Deed of Trust in lawful money of the United States,payable at time of sale. Trustee may postpone sale of all or any portion of the Property,by public announcement at such time and place of sale, and from time to time thereafter may postpone such sale by public announcement at the time fixed by the preceding postponement. Trustee shall deliver to such purchaser its Deed conveying the Property so sold, but without any covenant or warranty, express or implied. The recital in such Deed of any matters of fact shall be conclusive of the truthfulness thereof. Any person, including Trustor, Trustee, or Beneficiary as hereinafter defined, may purchase at such sale. Trustee may also sell at any such sale and as part thereof any shares of corporate stock securing the obligations secured hereby, and Trustor waives demand and notice of such sale. (Beneficiary at its option may also foreclose on such shares by independent pledge sale,and Trustor waives demand and notice of such sale.)After deducting all costs, fees and expenses of Trustee, and of this Trust, including cost of evidence of title in connection with this sale, Trustee shall apply the proceeds of sale to payment, first; all sums expended under the teams hereof, not then repaid, with accrued interest at the rate then payable under the First Lender Deed of Trust secured hereby, and then of all other sums secured hereby, and, if there are any proceeds remaining, shall distribute them to the person or persons legally entitled thereto. 7. Trustor shall keep the Property in good condition and repair; to allow Beneficiary or its representatives to enter and inspect the Property at all reasonable times and access thereto, shall be permitted for that purpose; not to remove or demolish any building thereon; not to make alterations thereto without the consent of the Beneficiary; to suffer or permit no change in the general nature of the occupancy of the Property without Beneficiary's written consent; to complete or restore promptly and in good workmanlike manner any building which may be constructed, damaged or destroyed thereon, including, without restricting the generality of the foregoing,damage from termites and dry-rot;to pay when due all claims for labor performed and materials furnished in connection with the Property and not to permit any mechanic's lien against the Property; to comply with all laws affecting the Property or requiring any alterations or improvements to be made thereon; not to initiate or acquiesce in any zoning reclassification without Beneficiary's written consent; not to commit or permit waste thereon; not to commit, suffer or permit any act upon the Property in violation of the law; to paint, cultivate, irrigate, fertilize, fumigate, prune, and do all other acts that from the character or use of the Property may be reasonably necessary; and to promptly pay all amounts due others upon agreements of lease or conditional sale of all fixtures,furnishings and equipment located thereon. 8. Trustor shall provide, and maintain in force at all times with respect to the Property, fire and other types of insurance as may be required by Beneficiary. All of such insurance shall have a loss payable endorsement in favor of Beneficiary, shall be for a term and in form, content, amount and in such companies as may be satisfactory to Beneficiary, and the policies therefore shall be delivered to and remain in possession of Beneficiary as further security for the faithful performance of these trusts. At least thirty (30) days prior to the expiration of any such insurance policy, a policy or policies renewing or extending such expiring insurance shall be delivered to Beneficiary together with written evidence showing payment of 6 08-1542.005/60417 median the premium therefore and, in the event any such insurance policy and evidence of the payment of the premium therefore are not so delivered by Trustor to Beneficiary, Trustor by executing this Deed of Trust specifically requests Beneficiary to obtain such insurance and Beneficiary, without obligation to do so, without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof, may obtain such insurance through or from any insurance agency or company acceptable to it,pay the premium thereof, and may add the amount thereof to the indebtedness secured hereby,which amount shall bear a like rate of interest. Beneficiary may furnish to any insurance agency or company, or any other person, any information contained in or extracted from any insurance policy delivered to Beneficiary pursuant hereto and any information concerning the loan secured hereby. Neither Trustee nor Beneficiary shall be responsible for such insurance or for the collection of any insurance monies, or for any insolvency of any insurer or insurance underwriter. In case of insurance loss, Beneficiary is hereby authorized either (a) to settle and adjust any claim under the insurance policies provided for in this document without the consent of the Trustor, or (b)to allow Trustor to agree with the insurance company or companies on the amount to be paid.upon the loss. In either case, the Beneficiary is authorized to collect and make receipt of any such insurance money. If Trustor is obligated to restore or replace the damaged or destroyed buildings or improvements under the terms of any lease or leases which are or may be prior to the lien of this Deed of Trust and such damage or destruction does not result in cancellation or termination of such lease, such proceeds, after deducting therefrom any expenses incurred in the collection thereof, shall be used to reimburse the Trustor for the cost of rebuilding or restoring the buildings or improvements on said premises. In all other cases, such insurance proceeds shall either be applied for the cost of the rebuilding or restoring the buildings or improvements on said premises. Such buildings and improvements shall be so restored or rebuilt as to be of at least equal value and substantially the same character as prior to the damage or destruction, and shall be in a condition satisfactory to Beneficiary. Such application or release shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. Any and all unexpired insurance shall inure to the benefit of, and pass to the purchaser of, the property conveyed at any Trustee sale held hereunder. 9. Trustor shall pay: (a) at least ten (10) days before delinquency, all general and special City and County taxes, and all assessments on appurtenant water stock, affecting the Property, (b) when done, all special assessments for public improvements, without permitting any improvement bond to issue for any special assessment, (c) when done, all encumbrances, charges and lines, with interest, on the Property, or any part thereof, which are or appears to be prior to superior hereto, (d) if the security of this Deed of Trust is leasehold estate,to make any payment or do any act required of the Lessee or its successor in interest under the terms of the instrument or instruments creating said leasehold, (e) all costs, fees and expenses of this trust, (f) for any statement regarding the obligation secured hereby any amount demanded by Beneficiary not to exceed the maximum allowed by law thereof at the time when such request is made, (g) such other charges for services rendered by Beneficiary and furnished at Trustor's request or that of any successor in interest to Trustor as the Beneficiary may deem reasonable. 10. Should Trustor fail to make any payment or do any act as provided in this Deed of Trust, the Beneficiary or Trustee, but without obligation to do so and without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof,may (a)make or 7 08-1542.005/60417 median do the same in such manner and to such extent as either may deem necessary to protect the security hereof, Beneficiary or Trustee being authorized to enter upon the Property for such purposes, (b) commence, appear in, or defend any action or proceeding purporting to affect the security hereof or the property covered by this Deed of Trust, or the rights or powers of Beneficiary or Trustee, (c) pay, purchase, contest or compromise any encumbrance, charge or lien, which in the judgment of either is or appears to be prior or superior hereto,and (d) in exercising any such powers, pay necessary expenses, employ counsel and pay his reasonable fees. Trustor agrees to repay any amount so expended on demand of Beneficiary, and any amount so expended may be added by Beneficiary to the indebtedness secured hereby and shall bear a like rate of interest. 11. Trustor shall appear in and defend any action or proceeding purporting to affect the security hereof or the Property which is covered by this Deed of Trust, or the rights or powers of Beneficiary or Trustee, and whether or not Trustor so appears or defends, to pay all costs and expenses, including cost of evidence of title and attorney's fees in a reasonable sum, in any such action or proceeding in which Beneficiary or Trustee may appear by virtue of being made a party defendant or otherwise irrespective of whether the interest of Beneficiary or Trustee in the Property is directly questioned by such action, including any action for the condemnation or partition of said premises, and in any suit brought by Beneficiary to foreclose this Deed of Trust. 12. Trustor shall pay immediately and without demand, all sums expended under the terms of this Deed of Trust by Beneficiary or Trustee, with interest from the date of expenditure at the rate which the principal obligation secured hereby bears at the time such payment is made, and the repayment of such sums shall be secured hereby. 13. Should Trustor or any successor in interest to Trustor in the Property drill or extract, or enter into a lease for drilling or extraction of oil, gas or other hydrocarbon substances or any mineral of any kind or character, or sell, convey, further encumber, or alienate the Property, or any party thereof, or any interest therein, or be divested of his title or any interest therein in any manner or way, whether voluntarily or involuntarily, Beneficiary shall have the right, at its option, to declare any obligations secured hereby irrespective of the maturity date specified in any Note evidencing the same, immediately due and payable, and no waiver of this right shall be effective unless in writing. 14. Any award, settlement or damages for injury or damages to the Property, or in construction with the transaction financed by such loan, and any award of damages in connection with any condemnation for public use of or injury to the Property, or any part thereof, is hereby assigned and shall be paid to Beneficiary, who may apply or release such monies received by it in such manner and with the same effect as above provided for the disposition of proceeds of fire or other insurance. 15. By accepting payment of any sums secured by this Deed of Trust after its due date, or by making any payment, performing any act on behalf of Trustor, that Trustor was obligated hereunder, but failed, to make, or perform, or by adding any payment so made by Beneficiary to the indebtedness secured hereby, Beneficiary does not waive its right either to 8 08-1542.005/60417 median require prompt payment when due of all other sums so secured or to declare a default for failure so to pay. 16. At any time, or from time to time, without liability of the Beneficiary or Trustee thereof, and without notice,upon written request of Beneficiary and presentation of this Deed of Trust and the Note secured hereby for endorsement, and without affecting the personal liability of any person for payment of the indebtedness secured hereby, or the lien of the Deed of Trust upon the remainder of the Property for the full amount of the indebtedness then or thereafter secured hereby, or the rights or powers of Beneficiary or the Trustee with respect to the remainder of the Property, Trustee may: (a)reconvey any part of the Property, (b) consent to the making of any map or plat thereof-, (c) join in granting any easement thereon, (d) join in any agreement subordinating the lien or charge hereof. 17. The lien hereof shall remain in full force and effect during any postponement or extension of time of payment of the indebtedness secured hereby, or any part thereof. 18. As additional security, Trustor irrevocably assigns to Beneficiary the rents, issues, and profits of the Property for the purposes and upon the terms and conditions set forth below. This assignment shall not impose upon Beneficiary any duty to produce rents from the property affected by this Deed of Trust, or cause Agency to be (a) "mortgages in possession" for any purpose; (b) responsible for performing any of the obligations of the lessor under any lease; or (c) responsible for any waste committed by lessees or any other parties, for any dangerous or defective condition of the property affected by this Deed of Trust, or for any negligence in the management, upkeep, or control of such rights to rents, issues and profits is not contingent upon, and may be exercised without possession of,the property affected by this Deed of Trust. Beneficiary confers upon Trustor a license ("License") to collect and retain the rents, issues and profits of the property affected by this Deed of Trust as they become due and payable, until the occurrence of a default hereunder.Upon such default,the License shall be automatically revoked and Beneficiary may collect and retain the rents, issues and profits without notice and without taking possessions of the property affected by this Deed of Trust. This right to collect rents,issues and profits shall not grant to Beneficiary or Trustee the right to possession,except as otherwise provided herein; and neither said right, nor termination of the License, shall impose upon Beneficiary or Trustee the duty to produce rents, issues or profits or maintain all or any part of the Property affected by this Trust Deed. If Trustor shall default as aforesaid, Trustor's right to collect any such money shall cease and Beneficiary shall have the right, with or without taking possession of the property affected hereby, to collect all rents, issues, royalties and profits and shall be authorized to, and may, without notice and irrespective of whether declaration of default has been delivered to Trustee and without regard to the adequacy of the security for the indebtedness secured hereby, either personally or by attorney or agent without bringing any action or proceeding, or by receiver to be appointed by the Court, enter into possession and hold, occupy, possess and enjoy the Property, make, cancel, enforce and modify leases, obtain and eject tenants, and set and modify rents and terms of rents, and to sue, and to take, receive and collect all or any part of the said rents, issues, and profits of the property affected hereby, and after paying such costs of maintenance, operation of the Property, and of collection including reasonable attorneys' fees, as in its judgment it may deem proper, to apply the balance upon any 9 08-1542.005/60417 median indebtedness then secured hereby, the rents, issues, royalties and profits of the Property being hereby assigned to Beneficiary for said purposes. The acceptance of such rents, issues, royalties and profits shall not constitute a waiver of any other right which Trustee or Beneficiary may enjoy under this Deed of Trust or under the laws of California. Failure of or discontinuance by Beneficiary at any time, or from time to time,to collect any such rents, issues,royalties or profits shall not in any manner affect the subsequent enforcement by Beneficiary of the right,power and authority to collect the same. The receipt and application by said Beneficiary of all such rents, issues, royalties and profits pursuant hereto, after execution and delivery of declaration of default and demand for sale as hereinafter provided, or during the pendency of Trustee's sale proceedings hereunder, shall not cure such breach or default nor affect sale proceedings, or any sale made pursuant thereto,but such rents, issues, royalties and profits,less all costs of operation, maintenance, collection and reasonable attorneys' fees, when received by Beneficiary, shall be applied in reduction of the indebtedness secured hereby, from time to time, in such order as Beneficiary may determine. Nothing contained herein, nor the exercise of the right by Beneficiary to collect, shall be, or be construed to be, an affirmation by Beneficiary of any tenancy, lease or option, nor an assumption of liability under, nor subordination of the lien or charge of this Deed of Trust to, any such tenancy, lease or option. 19. If the security of this Deed of Trust is a leasehold estate, the Trustor agrees that: (a) the term "Lease" as used herein shall mean the lease creating the "leasehold estate"' (b) Trustor shall not amend, change or modify his leasehold interest, or the Lease, or agree to do so, without the written consent of the Beneficiary; (c) Trustor will promptly advise Beneficiary regarding any notice, request or demand received by him from the lessor under the Lease and promptly furnish Beneficiary with a copy of any such notice, request or demand; (d) as long as any of the indebtedness secured hereby shall remain unpaid, unless the Beneficiary shall otherwise consent thereto in writing, the leasehold estate shall not merge with the fee title but shall always be kept separate and distinct, notwithstanding the union of said estates in any parry; (e) Trustor agrees that it will promptly, strictly, and faithfully perform, fulfill, and comply with all covenants, agreements, terms, conditions and provisions under any lease affecting the premises and to neither do anything, nor to permit anything to be done which may cause modification or termination of any such lease or of the obligations of any lessee or person claiming through such lease or the rents provided for therein or the interest of the lessor or the Beneficiary therein or thereunder. Trustor further agrees he will not execute a Deed of Trust or mortgage which may be or become superior to any leasehold estate that is security for this Deed of Trust. In the event of a violation of any of the covenants set forth in this paragraph, Beneficiary shall have the right,at its option,to declare all sums secured hereby immediately due and payable. Consent to or waiver of one of said violations shall not be deemed to be a consent to or waiver of any other violation. If the security for this Deed of Trust is a leasehold estate,the term "property" as used in this Deed of Trust shall be deemed to mean the leasehold estate whenever the context so requires for the protection of the Beneficiary. 20. Trustor waives, to the fullest extent permissible by law, the right to plead any statute of limitations as a defense to any demand secured hereby. 21. Beneficiary may, from time to time, by instrument in writing, substitute a successor or successors to any Trustee named herein or acting hereunder, which instrument, 10 08-1542.005M417 median executed and acknowledged by Beneficiary and recorded in the office of the recorder of the county or counties where the Property is situated, shall be conclusive proof of property substitution of such successor Trustee or Trustees, who shall, without conveyances from the Trustee predecessor, succeed to all its title, estate, rights, powers and duties, including but not limited to the power to reconvey the whole or any part of the property covered by this Deed of Trust. Such instrument must contain the name of the original Trustor, Trustee and Beneficiary hereunder,the book and page where this Deed of Trust is recorded. If notice of default shall have been recorded, this power of substitution cannot be exercised until after the costs, fees and expenses of the then acting Trustee shall have been paid to such Trustee, who shall endorse receipt thereof upon such instrument. The procedures herein provided for substitution of Trustee shall not be exclusive of other provisions for substitution provided by law. 22. This Deed of Trust applies to, inures to the benefit of, and binds all parties hereto, their heirs, legatees, devisees, administrators, executors, successors and assigns. The term "Beneficiary" shall mean the owner and holder, including pledgee, of the Note secured hereby, whether or not names as Beneficiary herein. In this Deed of Trust, whenever the context so requires, the masculine gender includes the feminine and/or neuter, and the singular number includes the plural. 23. That in the event of a demand for, and the preparation and delivery of a written statement regarding the obligations secured by this Deed of Trust pursuant to Sections 2943 and 2954 of the Civil Code of California, Beneficiary shall be entitled to make a reasonable charge, not exceeding the maximum amount which is permitted by law at the time the statement is furnished. Beneficiary may also charge Trustor a reasonable fee for any other services rendered to Trustor or rendered in Trustor's behalf in connection with the Property of this Deed of Trust, including changing Beneficiary's records,pertaining to this Deed of Trust in connection with the transfer of the Property, or releasing an existing policy of fire insurance or other casualty insurance held by Beneficiary and replacing the same with another such policy. 24. Trustee accepts this Trust when this Deed of Trust, duly executed and acknowledged, is made a public record as provided by law. Trustee is not obligated to notify any parry hereto of pending sale under any other Deed of Trust or of any action or proceeding in which Trustor, Beneficiary, or Trustee shall be a parry unless brought by Trustee. 25. Any notice which any party hereto may desire or be required to give to the other parry shall be in writing. The mailing thereof must be certified mail addressed to the Trustor at his address hereinabove set forth or to the Beneficiary at his office or at such other place as such parties hereto may designate in writing. Rest of page not used 11 08-1542.005/60417 median THE UNDERSIGNED TRUSTOR REQUESTS that a copy of any notice of default and of any notice of sale hereunder be mailed to him at his address hereinbefore set forth. TRUSTOR: Dated: 20 REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH By: Deputy Executive Director CITY OF HUNTINGTON BEACH By: Director of Economic Development �F PROVED T, FQ AN J I�iFEi M 7M Attorney Deputy City A 12 08-1542.005/60417 median This Document was electronically recorded by City of Huntington Beach Recorded in Official Records, Orange County Tom Daly, Clerk-Recorder RECORDING REQUESTED BY: j I�IIII��III II I 1111111111111111111111111111111111111111111 NO FEE 2011000168096 01:43pm 04/01/11 93 401 Al2 26 AND WHEN RECORDED MAIL TO:) 0.00 0.00 0.00 0.00 75.00 0.00 0.00 0.00 City Clerk ) City of Huntington Beach ) 2000 Main Street ) Huntington Beach, CA 92648 ) (Space Above for Recorder's Use) AGREEMENT DECLARING CONDITIONS, COVENANTS AND RESTRICTIONS FOR PROPERTY (RESALE RESTRICTIONS) This Agreement Declaring Conditions, Covenants and Restrictions for Property (the "Agreement") is made as of Ml/ ee,4 a/, 2011, by and between RP/PLC BLUE CANVAS, L.L.C., a Delaware limited liability company (the "Covenantor"), and THE CITY OF HUNTINGTON BEACH, a California municipal corporation (the "City"), and the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic (the"Agency"). Collectively, the City and Agency will be referred to as the "Covenantee". RECITALS A. Covenantor is the owner of record of that certain real property located in the City of Huntington Beach, County of Orange, State of California legally described in the attached Exhibit"A". B. On September 2, 2008, the City Council approved Tract No. 16733, as per map recorded as Instrument No. 2008000531659 in Book 897, Pages 10 through 14 of Miscellaneous Maps, Records of Orange County, California ("Project"). City imposed conditions of approval on the Project, requiring Covenantor to submit an Affordable Housing Agreement, in accordance with the Affordable Housing Program, for review by the Planning Department and approval by the City Attorney and acceptance by the City Council. The City further required that the plan shall-provide ten percent(10%) of the total 201 units equaling 21 units to be restricted as set forth herein ("Restricted Units"), 3 of which are to be affordable housing for household earning less than 80% of the Orange County Median Income and 18 of which are to be affordable housing for households earning no more than 100% of the Orange County Median Income, in both cases for a period of sixty (60)years. The execution and recordation of this Agreement is intended to fully satisfy that condition. NOW,THEREFORE, the parties hereto agree and covenant as follows: This docurnent is solely for the official businm of the City of Hunfirow T_\FILES\WP51\DLB\PAC SHORES\AFFORDABLE HOUSING CC&R'S.DOC Beach.as contemplated utiet t ,.6103 and oiilsil0 should be recordod fee of 1 1. Affordability Covenants. Covenantor agrees for itself and its successor and assigns, and every successor to Covenantor's interest in the Restricted Unit, or any part thereof, that the Project located at Newland Street and Noel le Drive,which consists of a total of 201 residential condominium units, shall be designated as affordable and shall be held subject to this Agreement for sixty(60)years from the date of the close of escrow for the initial sale of each such Restricted Unit built in Tract No. 16733 as follows: (a) Eighteen (18) Restricted Units as further designated on Exhibit"B" attached hereto shall only be owned and occupied by"Median-Income Households",which shall mean persons or families earning not more than 100% of the Orange County median income, adjusted for household size appropriate for the property as determined by the Agency based on statistics published by the United States Department of Housing & Urban Development or established by the State of California, pursuant to Health and Safety Code Section 50093, or a successor statute. (b) These eighteen (18) Medium-Income Restricted Units shall only be sold at an"Affordable Housing Cost"to" Median-Income Households." (c) Three (3) Restricted Units as further designated on Exhibit"B"attached hereto shall only be owned and occupied by"Low-Income Households",which shall mean persons or families earning less than 80% of the Orange County median income, adjusted for household size appropriate for the property as determined by the Agency based on statistic s published by the United States Department of Housing & Urban Development or established by the State of California, pursuant to Health and Safety Code Section 50093, or a successor statute. (d) These three (3) Low-Income Restricted Units shall only be sold at an "Affordable Housing Cost" to"Low-income Households." (e) "Affordable Housing Cost" shall mean the permitted gross sales price of the Restricted Unit as set forth in the Affordable Housing Price/Income Guidelines or successor guidelines published,from time to time, by the City for such purpose. (f) The term of this Agreement shall commence on the date of the initial sale of each Restricted Unit to a qualifying purchaser as evidenced by a deed recorded with the Orange County Recorder's Office and shall continue for sixty years from said date ("Affordability Period"). The covenant contained in this Section 1 shall run with the Restricted Unit and shall automatically terminate and be of no further force or effect upon the expiration of the Affordability Period. (g) Purchasers of the Restricted Units identified above shall enter into a promissory note and deed of trust in the forms attached hereto as Exhibit"C". 2. Transfer of Restricted Unit; Consent of Agency. During the Affordability Period no transfer of a Restricted Unit shall occur until the City determines: (a) that the proposed purchaser intends to occupy the Restricted Unit as the proposed purchaser's principal residence, T:\FILES\WP51\DLB\PAC SHORES\AFFORDABLE HOUSING CC&R'S.DOC 07/13/10 2 (b) that the proposed purchaser is a "Low", or"Median" Income Household as provided in Section 1 above, and (c) that the proposed transfer occurs at an Affordable Housing Cost. (d) The Restricted Units shall be constructed prior to or concurrent with the primary Project. (e) In the event that the Covenantor(including successors and assigns) desires to sell the Restricted Unit, Covenantor shall send written notice thereof to the City at the following address: City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attention: Director of Economic Development Within seven (7) days of receiving such notice, the City shall send Covenantor transfer application forms prepared by the City. Such forms shall contain a certification of the proposed purchaser's intent with respect to his/her/its residency of the Restricted Unit and his/her/its gross income, and an affidavit of the proposed purchaser disclosing and certifying the amount of the proposed purchase price. The City shall not be obligated to approve a transfer unless and until the proposed purchaser has submitted to the City such information and completed such forms. In the interest of expediting the close of escrow for such proposed transactions, the City shall reasonably approve or disapprove such submissions as soon as.practicable after submission of such forms, and in no event later than fourteen (14) days after submission of a completed form. Prior to conveyance of the Restricted Unit, each approved purchaser shall also submit to the City an executed disclosure statement which certifies that the purchaser is aware that: (i) the purchaser buying the Restricted Unit may only sell the Restricted Unit at an Affordable Housing cost to a "Low" or"Median" Income Household as provided in Section 1 above, (ii) the maximum permitted sales price may be less than fair market value and (iii)the Restricted Unit must be owner-occupied at all times and cannot be rented or leased. The approved purchaser shall also submit an executed promissory, trust deed, notice documents, and any other documentation required by the City to effectuate the Affordable Housing Program. Covenantor shall cooperate with the City in providing such forms to proposed purchasers and in assisting proposed purchasers to prepare such forms and to provide any required information to the City in connection with only the Covenantor's sale of the Restricted Unit, provided that the Covenantor shall not be obligated to incur any out-of-pocket costs in connection therewith, other than employee time dedicated to providing such assistance. THE COVENANTOR AND EACH SUCCESSOR, HEIR, OR ASSIGN OR COVENANTOR UNDERSTAND THAT THE DETERMINATION OF THE AFFORDABLE HOUSING COST CAN BE MADE ONLY AT THE TIME OF THE PROPOSED TRANSFER, TAKING INTO CONSIDERATION INTEREST RATES, THE TERMS OF SALE OFFERED TO, AND THE ECONOMIC TAFILEMP51MMIRAC SHORES\AFFORDABLE HOUSING CC&R'S.DOC 07/13/10 3 CIRCUMSTANCES OF, THE PROPOSED PURCHASER AND OTHER FACTORS THAT CANNOT BE ACCURATELY PREDICTED, AND THAT THE TRANSFER PRICE PERMITTED HEREUNDER MAY BE LESS THAN THE FAIR MARKET VALUE OF THE PROPERTY AND MAY NOT INCREASE OR DECREASE IN THE SAME MANNER AS OTHER SIMILAR REAL PROPERTY WHICH IS NOT ENCUMBERED BY THIS RESTRICTION. COVENANTOR AND EACH SUCCESSOR, HEIR, OR ASSIGN OF COVENANTOR FURTHER ACKNOWLEDGES THAT AT ALL TIMES IN SETTING THE TRANSFER PRICE, THE PRIMARY OBJECTIVE OF THE CITY AND THIS AGREEMENT IS TO PROVIDE HOUSING TO "LOW" OR"MEDIAN' INCOME HOUSEHOLDS AT AN AFFORDABLE HOUSING COST. r Covenantor's Initials Covenantor shall include in the escrow instructions and Purchase and Sale Agreements with purchaser a provision which requires each purchaser to record a covenant which will run with the land and bind all successors-in-interest or assignees that will ensure that all subsequent purchasers and occupants qualify as "Low" or"Median" Income Households as applicable. Said covenant shall remain in full force and effect for the Affordability Period as set forth in Section 1. 3. Non-Discrimination Covenants. Covenantor covenants by and for itself, it successors and assigns, and all persons claiming under or though them that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, religion, sex, sexual orientation, creed, ancestry, national or ethnic origin, age, family or marital status, handicap or disability, in the sale, transfer, use, occupancy, tenure or enjoyment of the Restricted Unit, nor shall Covenantor itself or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, subtenants, or vendees in the Restricted Unit. Covenantor and its successors and assigns shall refrain from restricting the sale of the Restricted Unit on the basis of race, color, religion, sex, sexual orientation, creed, ancestry, national or ethnic origin, age, family or marital status, handicap or disability, of any person. All such deeds or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clause: (a) In deeds: "The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, religion, sex, sexual orientation, creed, ancestry, national or ethnic origin, age, family or marital status, handicap or disability, in the sale, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee himself or herself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, or vendees in the land herein conveyed. The foregoing covenants shall run with the land." T:\FILES\WP51\DLB\PAC SHORES\AFFORDABLE HOUSING CC&F'S.DOC 07/13/10 4 (b) In contracts: "There shall be no discrimination against or segregation of, any person or group of persons on account of race, color, religion, sex, sexual orientation, creed, ancestry, national or ethnic origin, age, family or marital status, handicap or disability, in the sale, transfer, use, occupancy, tenure or enjoyment of the premises, nor shall the transferor himself or herself of any person claiming under or though him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use of occupancy of tenants, subtenants or vendee of the premises." (c) In leases: "The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators, and assignees, and all persons claiming under or though him or her, and this lease is made and accepted upon and subject to the following conditions: "That there shall be no discrimination against or segregation of any person or group of persons on account of race, color, religion, sex, sexual orientation, creed, ancestry, national or ethnic origin, age, family or marital status, handicap or disability, in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the premises herein leased nor shall the lessee himself or herself, or any person claiming under or though him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy of tenants, sublessees, subtenants, or vendees in the premises herein leased." 4. Covenants Do Not Impair Lien. No violation or breach of covenants, conditions, restrictions, provisions or limitations contained in this Agreement shall defeat or render invalid or in any way impair the lien or charge of any mortgage or deed of trust or security interest. 5. Covenants For Benefit of City. All covenants without regard to technical classification or designation shall be binding for the benefit of the Covenantee and such covenants shall run in favor of Covenantee for the entire period during which time such covenants shall be in force and effect, without regard to whether the Covenantee is or remains an owner of any land or interest therein to which such covenants relate. The Covenantee, in the event of any breach of any such covenants, shall have the right to exercise all the rights and remedies and to maintain any such action at law or suits in equity, or other proper legal proceedings to enforce and to cure such breach to which it or any other beneficiaries of these covenants may be entitled during the term specified for such covenants, except the covenants against discrimination which may be enforced at law or in equity at any time in perpetuity. 6. Counterparts. This Agreement may be executed in a number of counterparts, each of which shall be an original, but all of which shall constitute one and the same document. T:\FILES\WPSIIDLB\PAC SHORES\AFFORDABLE HOUSING CC&WS.DOC 07/13/10 5 7. Applicable Law. (a) if any provision of this Agreement or portion thereof, or the application of any provision to any person or circumstances, shall to any extent be held invalid, inoperative, or unenforceable, the remainder of this Agreement, or the application of such provision or portion thereof to any other persons or circumstances, shall not be affected thereby and it shall not be deeded that any such invalid provision affects the consideration for this Agreement; and each provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law. (b) This Agreement shall be construed in accordance with the laws of the State of California. [Balance of this page intentionally left blank] T:\FILES\WP51\DLB\PAC SHORESXAFFORDABLE HOUSING CC&FS.DOC 07/13/10 6 iN WITNESS WHEREOF, the Covenantee and Covenantor have caused this instrument to be executed on their behalf by their respective officers hereunto duly authorized as of the date set forth above. COVENANTOR: COVENANTEE: i RP/PLC BLUE CANVAS, L.L.C., CITY F HUNTINGTO -EACH a Delaware limited liability company a C I'i nia muni 'qai corporation By: Mayor Its: -'�Jd Ci lerk THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic By: Deputy Execut' a Director APPROVED AS TO FORM: r <�jity Attorn?y/Ag,ncy C6t@sel INITIAT D AND ROVED: Plana ng Director REVIE / D APPROVED: City d i strator TAFILEMPSI\DI- PAC SHORESWFFORDABLE HOUSING CCBR'S.DOC 07/13/10 7 STATE OF CALIFORNIA ) ) ss. COUNTY OF ORANGE } On _, 2011, before me, 11L4i& Notary Public, personally appeared ?a/jr T')"0A Aj")J who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he/srhe executed the same in his/#4&r authorized capacity, and that by hisA%.Fsignature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. [SEAL] Signature PATRICIA ALEXIS HANSON Commission#E 1688030 i Notuy Public-Cslifomis Orange County Mv Comm.Ex ices Mav 2.2011411 STATE OF CALIFORNIA ) ) ss. COUNTY OF ORANGE ) On , 2011, before me, Notary Public, personally appeared who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. [SEAL] Signature T:\FILES\WP51\DLB\PAC SHORES\AFFORDABLE HOUSING CC&R'S.DOC 07/13/10 8 ACKNOWLEDGMENT STATE OF CALIFORNIA ) ss COUNTY OF ORANGE ) On March 31, 2011 before me, P. L. Esparza, Notary Public, personally appeared Joan L. Flynn and Joe Carchio who proved to me on the basis of satisfactory evidence to be the persons whose names are subscribed to the within instrument and acknowledged to me that they executed the same in their authorized capacities, and that by their signatures on the instrument the persons, or the entity upon behalf of which the persons acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the,foregoing paragraph is true and correct. P.L.ESPARZA WITNESS my hand and official seal. Commission# 1857021 a -r Notary Public=California i a Orange County NI Comm.Expires Aug4,2013 (Seal) .(Notary Signat6re) EXHIBIT"A" Legal Description of Restricted Units in Tract 16733 All that certain real property in the City of Huntington Beach, County of Orange, State of California, described as follows: Parcel 1: The "Median-Income Households" consisting of: Units 117 , and 123 , as shown on that certain Condominium Plan Pacific Shores- 2 Phase recorded on September 20, 2010, as Instrument No. 2010000465241 of Official Records of Orange County, California, covering portions of Lots 6 and 10 of Tract No. 16733, as per the Map, lying within the boundaries of said Condominium Plan. CADocuments and Settings\powelld\Local Settings\Temporary Internet Files\Content.Oudook\8VYOD2FZ\Revised Legal Descriptions Phase II affordable 1- 16-11.doc 07/12/10 Page 1 of 2 Pages EXHIBIT "B" Designation of Median-Income and Low-Income Household Restricted Units Median-Income Household Restricted Units: Those Units more particularly described as Parcel 1 on Exhibit"A"to this Agreement. Low-Income Household Restricted Units: Those Units more particularly described as Parcel 2 on Exhibit"A"to this Agreement. TAFILES\WP511DL3\PAC SHORES\AFFORDABLE HOUSING CC&R'S.00C 07/13/10 Exhibit "C" OFFICIAL BUSINESS ) Document entitled to free recording per ) Government Code §§ 6103 and 27383 ) Recording Requested By: ) Redevelopment Agency ) of the City of Huntington Beach ) 2000 Main Street ) Huntington Beach,California 92648 ) Attn: Economic Development ) Dept./Housing Division ) SPACE ABOVE THIS LINE FOR RECORDERS USE PROMISSORY NOTE TO SECURE AFFORDABILITY RESTRICTIONS ON TRANSFER OF PROPERTY THIS PROMISSORY NOTE (the "Note") is dated this day of , 20------,, between (collectively, "Promissor") and the Redevelopment Agency of the City of Huntington Beach ("Agency") with reference to the following facts: A. This Promissory Note is made in reference to that property in the City of Huntington Beach, County of Orange, State of California, with the street address of Huntington Beach, California 92648, and the Assessor's Parcel No. (the "Property"). B. A "Declaration of Conditions, Covenants and Restrictions for Property" was recorded on 20 , as Instrument Number , in the Office of the County Recorder of the County of Orange, California (the "Resale Restrictions"). Among other things, the Resale Restrictions limit the price that the Property may be sold to an "Affordable Housing Cost" to "Median Income Households," as those terms are defined in the Resale Restrictions, and further defined in the current Affordable Housing Regulations of the City of Huntington Beach and the Agency Deed of Trust referred to below. C. Concurrently with executing this Note, Promissor has executed a Deed of Trust securing and modifying the Resale Restrictions (the "Agency of Deed of Trust"). D. Pursuant to the Resale Restrictions, the City has approved the sale of the Property to Promissor at an Affordable Housing Cost. To insure that any further sale, transfer or assignment of the Property occurs with the City's approval and at an Affordable Housing Cost, the City has required as a condition of the Promissor's purchase of the Property that Promissor execute this Note. 08-1542.005/60416 median 1 AGREEMENT NOW,THEREFORE, the parties agree as follows: 1. Incorporation of Recitals. The recitals set forth above are incorporated by reference as though fully set forth herein. 2. Amount of the Note. The Amount of this Note is the "Transfer Price" of the Property, less the "Affordable Housing Cost." The Transfer Price shall be determined according to the circumstances that cause the Amount of the Note to become due pursuant to Section 3 of this Note. In the case of the sale of the Property without the City's consent, the Transfer Price shall be the market sales price. In the case of the financing or refinancing of the Property without the City's consent, the Transfer Price shall be the loan amount in excess of the last loan balance on the First Mortgage that the City previously approved. In all other cases, the Transfer Price shall be the fair market value of the Property as established by the Director of Economic Development of the City pursuant to an appraisal. The term "Affordable Housing Cost" shall be defined according to the current Affordable Housing Regulations as adopted by the City of Huntington Beach. Promissor promises to pay the Amount of this Note when due to the Redevelopment Agency at 2000 Main Street, P.O. Box 190, Huntington Beach, California 92648, or at such other address as Agency may direct from time to time in writing. All sums hereunder shall be payable in lawful money of the United States of America and all sums shall be credited first to interest then due and the balance to principal. 3. Due on Sale, Transfer or Refinancing. Promissor agrees to notify the Agency not less than thirty (30) days prior to (i) the sale or transfer of the Property or(ii) any financing or refinancing of the Property. This Note shall be due and payable upon (i) such sale or transfer without the City's consent, (ii) the financing or refinancing of the Property without the City's consent, (iii) Promissor is no longer an occupant of the Property, or(iv) Promissor is in material default of any other obligation under the Resale Restrictions, or the Agency Deed of Trust. 4. Expiration of the Note Obligation. In the event Promissor does not sell or transfer the Property, does not fail to occupy the Property, does not refinance, or is not in material breach of any other provision of the Resale Restrictions or the Agency Deed of Trust before the Thirtieth anniversary of the date of this Note, Promissor shall have no obligation to pay the Note Amount to Agency upon later sale, transfer or refinancing of the Property. 5. Default. The entire unpaid Amount of this Note shall be due and payable in full in the event of a default. The following shall be deemed to be an event of default: a Failure of Promissor to pay any real property taxes or insurance premiums on the Property as they become due; or 08-1542.005160416 median 2 b. Any material breach of the Resale Restrictions or the Agency Deed of Trust, following the Agency giving notice of the breach and an opportunity to cure; or C. Failure of Promissor to pay the Note Amount when due. 6. This Note is secured by a Deed of Trust, dated , to the City of Huntington Beach, as Trustee, executed by Promissor in favor of the Agency. 7. Notice. All payments, notices, consents, waivers and other communications under this Agreement must be in writing and shall be deemed to have been given when (a) delivered by hand, or, (b)when received by the addressee, if sent by a nationally recognized overnight delivery service (receipt requested), in each case addressed as set forth below: If to PROMISSOR: Huntington Beach, CA 92648 If to AGENCY: Redevelopment Agency of the City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attention: City Clerk and, Economic Development Director City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 8. Governing Law. This Agreement is governed by and shall be construed in accordance with the laws of the State of California without giving effect to the conflict of laws principles thereof. The parties agree to personal jurisdiction in the State Courts in Orange County, California and specifically waive any claims of forum non conviens. 9. Modification. This Agreement shall not be amended or modified, except in writing, signed by both parties. 10. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the successors and assigns under this Note. This Note shall not be assigned without the express written consent of Agency. 08-1542.005/60416 needian F � AS TG, rORPj JENNIF " MCGRTH, 3 A Atfarne� BY Mike"goottaa DePutY City Attomey Exhibit "C" OFFICIAL BUSINESS ) Document entitled to free recording per ) Government Code §§ 6103 and 27383 ) Recording Requested By: ) Redevelopment Agency ) of the City of Huntington Beach ) 2000 Main Street ) Huntington Beach,California 92648 ) Attn: Economic Development ) Dept./Housing Division ) SPACE ABOVE THIS LINE FOR RECORDER'S USE DEED OF TRUST WITH ASSIGNMENTS OF RENTS TO SECURE AFFORDABILITY RESTRICTIONS ON TRANSFER OF PROPERTY THIS DEED OF TRUST is made this day of 20 by and between whose address is , Huntington Beach, California 92648 (collectively, the "Trustor") and the CITY OF HUNTINGTON BEACH, a municipal corporation(the "Trustee"), and the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic (the "Beneficiary"), whose address is 2000 Main Street, Huntington Beach, California 92648, with reference to the following facts: A. This Deed of Trust is made in reference to that property in the City of Huntington Beach, County of Orange, State of California, described legally in the Legal Description attached hereto as Exhibit "A" and incorporated herein with the street address , Huntington Beach, California 92648 and the Assessor's Parcel No. (the "Property"). B. An "Agreement Declaring Conditions, Covenants and Restrictions for Property" was recorded on , 20_, as Instrument Number 9 in the Office of the County Recorder of the County of Orange, California (the "Resale Restrictions"). Among other things, the Resale Restrictions limit the price that the Property may be sold to an "Affordable Housing Cost" to "Median Income Households," as those terms are defined in the Resale Restrictions, and further defined in the current affordable housing regulations of the City of Huntington Beach and this Deed of Trust. C. Pursuant to this Deed of Trust. the Resale Restrictions as applied to the Property are extended to expire sixty (60) years from the date this Deed of Trust is recorded (the "Expiration Date"), which date is approximately , 20 1 08-1542.005160417 median NOW, THEREFORE, TRUSTOR HEREBY irrevocably grants, transfers and assigns, to Trustee, in trust, with power of sale of the Property, together with (a) all buildings, improvements and fixtures, now or hereafter placed thereon, it being understood and agreed that all classes of property attached or unattached used in connection herewith shall be deemed fixtures,(b) rents, issues and profits thereof, (c) any water rights and/or stock are appurtenant or pertain to said land, and (d) all sums of money payable on the purchase price of the Property secured by a lien thereon or payable under any agreement for the sale thereof, SUBJECT, HOWEVER, to the right, power and authority hereinafter given to and conferred upon Beneficiary to collect and apply such rents, issues and profits, and all sums of money payable on the purchase price of the Property secured by a lien thereon or payable under any agreement. A. FOR THE PURPOSE OF SECURING: 1. Payment of the indebtedness evidenced by a promissory note executed by Trustor on , 20 (the "Note"). The Amount of the indebtedness is the "Transfer Price" of the Property, less the "Affordable Housing Cost." The calculation of the Amount of the indebtedness is set forth with specificity in the Note, which is on file with the Economic Development Department of the City of Huntington Beach. 2. Performance of each and every obligation, covenant, promise and agreement of the Resale Restrictions, as amended by this Deed of Trust. B. TO PROTECT THE SECURITY OF THIS DEED OF TRUST, TRUSTOR AGREES: 1. Trustor agrees for itself, and its successors and assigns, and every successor to Trustor's interest in the Property, or any part thereof that for sixty (60) years from the date this Deed of Trust is recorded (the "Expiration Date"), to perform all obligations due under the Resale Restrictions, as those obligations are restated and modified as set forth below: (a) The Property shall only be owned and occupied by persons or families of "Median Income." "Median Income" shall mean persons or families earning less than eighty percent (100%)of Orange County median income, adjusted for appropriate family size. (b) The Property may only be sold at an "Affordable Housing Cost" to households of "Median Income," as those tern's are defined in current Affordable Housing Regulations as adopted by the City of Huntington Beach. Generally, those Regulations define Affordable Housing Cost to mean that purchase price which would result in monthly housing payments which do not exceed Thirty-Five Percent (35%) of Eighty Percent(80%) of the current Orange County monthly median income for a household equal to the number of bedrooms in the unit plus one (1) person. In determining monthly housing payments, the City will assume principal and interest payments on a conventional home mortgage after paying a ten percent (10%) down payment. The mortgage interest rate will be the prevailing Fannie Mae thirty (30) year mortgage rate, or a City-selected equivalent. Monthly housing costs will also include homeowner's association dues, utilities, homeowner's insurance, maintenance costs and property taxes. 2 08-1542.005/60417 median (c) The Trustor shall further comply with the Affordable Housing Guidelines promulgated by the City for purposes of administering the Affordable Housing Program of the City of Huntington Beach. (d) No transfer of the Property shall occur until the City of Huntington Beach determines (a) that the proposed purchaser intends to occupy the Property as the proposed purchaser's principal residence, (b) that the proposed purchaser is a person or family of Median Income, (c) that the proposed transfer occurs at an Affordable Housing Cost. The. City of Huntington Beach shall not be obligated to approve a transfer until and unless the proposed purchaser has submitted to the City of Huntington Beach such information and completed such forms as the City of Huntington Beach shall request to certify the proposed purchaser's intent with respect to its residency of the Property and its gross income, and the proposed purchaser has submitted an affidavit disclosing and certifying the amount of the proposed purchase price. Prior to conveyance of the Property, each approved purchaser shall submit to the City of Huntington Beach an executed disclosure statement which certifies that the purchaser is aware that the purchaser may only sell the unit at an Affordable Housing Cost to a Median Income person or family, that the maximum permitted sales price may be less than fair market value and that the unit must be owner-occupied at all times and cannot be rented or leased. TRUSTOR AND EACH SUCCESSOR, HEIR OR ASSIGN OF TRUSTOR UNDERSTANDS THAT THE DETERMINATION OF THE AFFORDABLE HOUSING COST CAN BE MADE ONLY AT THE TIME OF THE PROPOSED TRANSFER, TAKING INTO CONSIDERATION INTEREST RATES, THE TERMS OF SALE OFFERED TO AND THE ECONOMIC CIRCUMSTANCES OF THE PROPOSED PURCHASER AND OTHER FACTORS THAT CANNOT BE ACCURATELY PREDICTED, AND THAT THE TRANSFER PRICE PERMITTED HEREUNDER MAY BE LESS THAN THE FAIR MARKET VALUE OF THE PROPERTY AND MAY NOT INCREASE OR DECREASE IN THE SAME MANNER AS OTHER SIMILAR REAL PROPERTY WHICH IS NOT ENCUMBERED BY THIS RESTRICTION. TRUSTOR AND EACH SUCCESSOR, HEIR OR ASSIGN OF TRUSTOR FURTHER ACKNOWLEDGES THAT AT ALL TIMES IN SETTING THE TRANSFER PRICE THE PRIMARY OBJECTIVE OF THE BENEFICIARY AND THIS DEED OF TRUST IS TO PROVIDE HOUSING TO ELIGIBLE PERSONS OR FAMILIES AT AN AFFORDABLE HOUSING COST. Trustor Initials Trustor Initials (e) The City of Huntington Beach may impose any conditions on the approval of any transfer of the Property as it determines are reasonably necessary for the effective administration of its Affordable Housing Program. Such conditions may include, but are not limited to, requiring as a condition of the Property transfer that the buyer agrees to extend the Resale Restrictions for a new, sixty(60) year term. 3 08-1542.005/60417 median (f) The Covenants contained in this Section I shall run with the land and shall automatically terminate and be of no further force or effect sixty (60) years from the date this Deed of Trust is recorded, which date is approximately , 2070, unless further extended as a condition of transfer of the Property. By executing_this Deed of Trust, the Trustor is extending the term of the Resale Restrictions. 2. Trustor covenants by and for itself, its successors and assigns, and all persons claiming under or through them that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the said property, nor shall Trustor itself or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in said property. Trustor and its successors and assigns, shall refrain from restricting the rental or lease (if permitted by Trustor) or sale of said property on the basis of race, color, religion, sex, marital status, national origin or ancestry of any person. All such deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: (a) In deeds: "The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee himself or herself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessee or vendees in the land herein conveyed. The foregoing covenants shall run with the land." (b) In leases: "The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through him or her,. and this lease is made and accepted upon and subject to the following conditions: "There shall be no discrimination against or segregation of any person or group of persons on account of race, color, religion, sex, marital status, ancestry or national origin in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the premises herein leased nor shall the lessee himself or herself, or any person claiming under to through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sublessees, subtenants or vendees in the premises herein leased." (c) In contracts: "There shall be no discrimination against or segregation of, any person, or group of persons on account of race, color, religion, sex, marital status, ancestry or national origin, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of 4 08-1542.005/60417 median the premises, nor shall the transferee himself or herself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessee or vendees of the premises." Nothing in this Section 2 shall be construed to authorize the rental or lease of the Property if such rental or lease is not otherwise permitted. The covenants in this paragraph shall run with the land in perpetuity. 3. No violation or breach of the covenants, conditions, restrictions, provisions or limitations contained in this Deed of Trust shall defeat or render invalid or in any way impair the lien or charge of any mortgage or deed of trust or security interest. 4. Trustor has made certain representations and disclosures as a requirement under the Resale Restrictions in order to induce Beneficiary to approve the sale of the Property to Trustor. In the event that Trustor has made any material misrepresentation or failed to disclose any material fact regarding said transaction, Beneficiary at its option and without notice, shall have the right to declare a material breach of the Resale Restrictions and the Note. Beneficiary may make a written declaration of default and demand for sale as in paragraph No. 6 herein set Iorth. Trustee, upon presentation to it of an affidavit signed by Beneficiary setting forth facts showing a default by Trustor under this paragraph, is authorized to accept as true and conclusive all facts and statements therein, and to act thereon hereunder. 5. All covenants without regard to technical classification or designation shall be binding for the benefit of the Beneficiary and such covenants shall run in favor of the Beneficiary for the entire period during which such covenants shall be in force and effect, without regard to whether the Beneficiary is or remains an owner of any land or interest therein to which such covenants relate. The Beneficiary, in the event of any breach of any such covenants, shall have the right to exercise all the rights and remedies and to maintain any action at law or suits in equity or other proper legal proceedings to enforce and to cure such breach to which it or any other beneficiaries of these covenants may be entitled during the term specified i.or such covenants, except the covenants against discrimination which may be enforced at law or in equity at any time in perpetuity. 6. Upon default by Trustor in the obligations of the Note, in the performance of any obligation under this Deed of Trust or under the terms of any First Lender's Deed of Trust which is or appears to be prior or superior to this Deed of Trust, Beneficiary may declare all sums secured by this Deed of Trust immediately due and payable by delivering to Trustee of a written declaration of default and demand for sale and a written notice of default and election to sell the Property. Default in the payment of any indebtedness secured by this Deed of Trust, in the obligation of the Note, or in the performance of any agreement under this Deed of Trust constitutes a default only under this Deed of Trust and the Note and does not constitute a default under the First Deed of Trust. Trustee shall cause the notice of default to be recorded. i eneficiary also shall deposit with Trustee this Deed of Trust, the Note, and all documents �..videncing any additional expenditures secured by this Deed of Trust. After the lapse of such time as then may be required by law following recordation of such notice of default, and notice 5 0 -i542.005/60417 median of sale having been given as then required by law, Trustee, without demand on Trustor, shall sell the Property at the time and place fixed by it in such notice of sale, whether as a whole or in separate parcels, and in such order as it may determine, at public auction to the highest bidder qualified under the Resale Restrictions and this Deed of Trust in lawful money of the United States,payable at time of sale. Trustee may postpone sale of all or any portion of the Property by public announcement at such time and place of sale, and from time to time thereafter may postpone such sale by public announcement at the time fixed by the preceding postponement. Trustee shall deliver to such purchaser its Deed conveying the Property so sold, but without any covenant or warranty, express or implied. The recital in such Deed of any matters of fact shall be conclusive of the truthfulness thereof. Any person, including Trustor, Trustee, or Beneficiary as hereinafter defined, may purchase at such sale. Trustee may also sell at any such sale and as part thereof any shares of corporate stock securing the obligations secured hereby, and Trustor waives demand and notice of such sale. (Beneficiary at its option may also foreclose on such shares by independent pledge sale, and Trustor waives demand and notice of such sale.)After deducting all costs, fees and expenses of Trustee, and of this Trust, including cost of evidence of title in connection with this sale, Trustee shall apply the proceeds of sale to payment, first; all sums expended under the teams hereof, not then repaid, with accrued interest at the rate then payable under the First Lender Deed of Trust secured hereby, and then of all other sums secured hereby, and, if there are any proceeds remaining, shall distribute them to the person or persons legally entitled thereto. 7. Trustor shall keep the Property in good condition and repair; to allow Beneficiary or its representatives to enter and inspect the Property at all reasonable times and access thereto, shall be permitted for that purpose; not to remove or demolish any building thereon; not to make alterations thereto without the consent of the Beneficiary; to suffer or permit no change in the general nature of the occupancy of the Property without Beneficiary's written consent; to complete or restore promptly and in good workmanlike manner any building which may be constructed, damaged or destroyed thereon, including, without restricting the generality of the foregoing, damage from termites and dry-rot;to pay when due all claims for labor performed and materials furnished in connection with the Property and not to permit any mechanic's lien against the Property; to comply with all laws affecting the Property or requiring any alterations or improvements to be made thereon; not to initiate or acquiesce in any zoning reclassification without Beneficiary's written consent; not to commit or permit waste thereon; not to commit, suffer or permit any act upon the Property in violation of the law; to paint, cultivate, irrigate, fertilize, fumigate, prune, and do all other acts that from the character or use of the Property may be reasonably necessary; and to promptly pay all amounts due others upon agreements of lease or conditional sale of all fixtures, furnishings and equipment located thereon. 8. Trustor shall provide, and maintain in force at all times with respect to the Property, fire and other types of insurance as may be required by Beneficiary. All of such insurance shall have a loss payable endorsement in favor of Beneficiary, shall be for a term and in form, content, amount and in such companies as may be satisfactory to Beneficiary, and the policies therefore shall be delivered to and remain in possession of Beneficiary as further security for the faithful performance of these trusts. At least thirty (30) days prior to the expiration of any such insurance policy, a policy or policies renewing or extending such expiring insurance shall be delivered to Beneficiary together with written evidence showing payment of 6 08-1542.005/60417 median the premium therefore and, in the event any such insurance policy and evidence of the payment of the premium therefore are not so delivered by Trustor to Beneficiary, Trustor by executing this Deed of Trust specifically requests Beneficiary to obtain such insurance and Beneficiary, without obligation to do so, without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof, may obtain such insurance through or from any insurance agency or company acceptable to it,pay the premium thereof, and may add the amount thereof to the indebtedness secured hereby, which amount shall bear a like rate of interest. Beneficiary may furnish to any insurance agency or company, or any other person, any information contained in or extracted from any insurance policy delivered to Beneficiary pursuant hereto and any information concerning the loan secured hereby. Neither Trustee nor Beneficiary shall be responsible for such insurance or for the collection of any insurance monies, or for any insolvency of any insurer or insurance underwriter. In case of insurance loss, Beneficiary is hereby authorized either (a) to settle and adjust any claim under the insurance policies provided for in this document without the consent of the Trustor, or (b) to allow Trustor to agree with the insurance company or companies on the amount to be paid upon the loss. In either case, the Beneficiary is authorized to collect and make receipt of any such insurance money. If Trustor is obligated to restore or replace the damaged or destroyed buildings or improvements under the terms of any lease or leases which are or may be prior to the lien of this Deed of Trust and such damage or destruction does not result in cancellation or termination of such lease, such proceeds, after deducting therefrom any expenses incurred in the collection thereof, shall be used to reimburse the Trustor for the cost of rebuilding or restoring the buildings or improvements on said premises. In all other cases, such insurance proceeds shall either be applied for the cost of the rebuilding or restoring the buildings or improvements on said premises. Such buildings and improvements shall be so restored or rebuilt as to be of at least equal value and substantially the same character as prior to the damage or destruction, and shall be in a condition satisfactory to Beneficiary. Such application or release shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. Any and all unexpired insurance shall inure to the benefit of, and pass to the purchaser of, the property conveyed at any Trustee sale held hereunder. 9. Trustor shall pay: (a) at least ten (10) days before delinquency, all general and special City and County taxes, and all assessments on appurtenant water stock, affecting the Property, (b) when done, all special assessments for public improvements, without permitting any improvement bond to issue for any special assessment, (c) when done, all encumbrances, charges and lines, with interest, on the Property, or any part thereof, which are or appears to be prior to superior hereto, (d) if the security of this Deed of Trust is leasehold estate, to make any payment or do any act required of the Lessee or its successor in interest under the terms of the instrument or instruments creating said leasehold, (e) all costs, fees and expenses of this trust, (f) for any statement regarding the obligation secured hereby any amount demanded by Beneficiary not to exceed the maximum allowed by law thereof at the time when such request is made, (g) such other charges for services rendered by Beneficiary and furnished at Trustor's request or that of any successor in interest to Trustor as the Beneficiary may deem reasonable. 10. Should Trustor fail to make any payment or do any act as provided in this Deed of Trust, the Beneficiary or Trustee, but without obligation to do so and without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof, may (a) make or 7 08-1542.005/60417 median do the same in such manner and to such extent as either may deem necessary to protect the security hereof, Beneficiary or Trustee being authorized to enter upon the Property for such purposes, (b) commence, appear in, or defend any action or proceeding purporting to affect the security hereof or the property covered by this Deed of Trust, or the rights or powers of Beneficiary or Trustee, (c) pay, purchase, contest or compromise any encumbrance, charge or lien, which in the judgment of either is or appears to be prior or superior hereto, and (d) in exercising any such powers, pay necessary expenses, employ counsel and pay his reasonable fees. Trustor agrees to repay any amount so expended on demand of Beneficiary, and any amount so expended may be added by Beneficiary to the indebtedness secured hereby and shall bear a like rate of interest. 11. Trustor shall appear in and defend any action or proceeding purporting to affect the security hereof or the Property which is covered by this Deed of Trust, or the rights or powers of Beneficiary or Trustee, and whether or not Trustor so appears or defends, to pay all costs and expenses, including cost of evidence of title and attorney's fees in a reasonable sum, in any such action or proceeding in which Beneficiary or Trustee may appear by virtue of being made a party defendant or otherwise irrespective of whether the interest of Beneficiary or Trustee in the Property is directly questioned by such action, including any action for the condemnation or partition of said premises, and in any suit brought by Beneficiary to foreclose this Deed of Trust. 12. Trustor shall pay immediately and without demand, all sums expended under the terms of this Deed of Trust by Beneficiary or Trustee, with interest from the date of expenditure at the rate which the principal obligation secured hereby bears at the time such payment is made, and the repayment of such sums shall be secured hereby. 13. Should Trustor or any successor in interest to Trustor in the Property drill or extract, or enter into a lease for drilling or extraction of oil, gas or other hydrocarbon substances or any mineral of any kind or character, or sell, convey, further encumber, or alienate the Property, or any party thereof, or any interest therein, or be divested of his title or any interest therein in any manner or way, whether voluntarily or involuntarily, Beneficiary shall have the right, at its option, to declare any obligations secured hereby irrespective of the maturity date specified in any Note evidencing the same, immediately due and payable, and no waiver of this right shall be effective unless in writing. 14. Any award, settlement or damages for injury or damages to the Property, or in construction with the transaction financed by such loan, and any award of damages in connection with any condemnation for public use of or injury to the Property, or any part thereof, is hereby assigned and shall be paid to Beneficiary, who may apply or release such monies received by it in such manner and with the same effect as above provided for the disposition of proceeds of fire or other insurance. 15. By accepting payment of any sums secured by this Deed of Trust after its due date, or by making any payment, performing any act on behalf of Trustor, that Trustor was obligated hereunder, but failed, to make, or perform, or by adding any payment so made by Beneficiary to the indebtedness secured hereby, Beneficiary does not waive its right either to 8 08-1542.005/60417 median require prompt payment when due of all other sums so secured or to declare a default for failure so to pay. 16. At any time, or from time to time, without liability of the Beneficiary or Trustee thereof, and without notice, upon written request of Beneficiary and presentation of this Deed of Trust and the Note secured hereby for endorsement, and without affecting the personal liability of any person for payment of the indebtedness secured hereby, or the lien of the Deed of Trust upon the remainder of the Property for the full amount of the indebtedness then or thereafter secured hereby, or the rights or powers of Beneficiary or the Trustee with respect to the remainder of the Property, Trustee may: (a) reconvey any part of the Property, (b) consent to the making of any map or plat thereof; (c) join in granting any easement thereon, (d) join in any agreement subordinating the lien or charge hereof. 17. The lien hereof shall remain in full force and effect during any postponement or extension of time of payment of the indebtedness secured hereby, or any part thereof. 18. As additional security,Trustor irrevocably assigns to Beneficiary the rents, issues, and profits of the Property for the purposes and upon the terms and conditions set forth below. This assignment shall not impose upon Beneficiary any duty to produce rents from the property affected by this Deed of Trust, or cause Agency to be (a) "mortgages in possession" for any purpose; (b) responsible for performing any of the obligations of the lessor under any lease; or (c) responsible for any waste committed by lessees or any other parties, for any dangerous or defective condition of the property affected by this Deed of Trust, or for any negligence in the management, upkeep, or control of such rights to rents, issues and profits is not contingent upon, and may be exercised without possession of,the property affected by this Deed of Trust. Beneficiary confers upon Trustor a license ("License") to collect and retain the rents, issues and profits of the property affected by this Deed of Trust as they become due and payable, until the occurrence of a default hereunder. Upon such default,the License shall be automatically revoked and Beneficiary may collect and retain the rents, issues and profits without notice and without taking possessions of the property affected by this Deed of Trust. This right to collect rents, issues and profits shall not grant to Beneficiary or Trustee the right to possession,except as otherwise provided herein; and neither said right, nor termination of the License, shall impose upon Beneficiary or Trustee the duty to produce rents, issues or profits or maintain all or any part of the Property affected by this Trust Deed. If Trustor shall default as aforesaid, Trustor's right to collect any such money shall cease and Beneficiary shall have the right, with or without taking possession of the property affected hereby, to collect all rents, issues, royalties and profits and shall be authorized to, and may, without notice and irrespective of whether declaration of default has been delivered to Trustee and without regard to the adequacy of the security for the indebtedness secured hereby, either personally or by attorney or agent without bringing any action or proceeding, or by receiver to be appointed by the Court, enter into possession and hold, occupy, possess and enjoy the Property, make, cancel, enforce and modify leases, obtain and eject tenants, and set and modify rents and terms of rents, and to sue, and to take, receive and collect all or any part of the said rents, issues, and profits of the property affected hereby, and after paying such costs of maintenance, operation of the Property, and of collection including reasonable attorneys' fees, as in its judgment it may deem proper, to apply the balance upon any 9 08-1541005/60417 median indebtedness then secured hereby, the rents, issues, royalties and profits of the Property being hereby assigned to Beneficiary for said purposes. The acceptance of such rents, issues, royalties and profits shall not constitute a waiver of any other right which Trustee or Beneficiary may enjoy under this Deed of Trust or under the laws of California. Failure of or discontinuance by Beneficiary at any time, or from time to time,to collect any such rents, issues, royalties or profits shall not in any manner affect the subsequent enforcement by Beneficiary of the right,power and authority to collect the same. The receipt and application by said Beneficiary of all such rents, issues, royalties and profits pursuant hereto, after execution and delivery of declaration of default and demand for sale as hereinafter provided, or during the pendency of Trustee's sale proceedings hereunder, shall not cure such breach or default nor affect sale proceedings, or any sale made pursuant thereto,but such rents, issues,royalties and profits, less all costs of operation, maintenance, collection and reasonable attorneys' fees, when received by Beneficiary, shall be applied in reduction of the indebtedness secured hereby, from time to time, in such order as Beneficiary may determine. Nothing contained herein, nor the exercise of the right by Beneficiary to collect, shall be, or be construed to be, an affirmation by Beneficiary of any tenancy, lease or option, nor an assumption of liability under, nor subordination of the lien or charge of this Deed of Trust to, any such tenancy, lease or option. 19. If the security of this Deed of Trust is a leasehold estate, the Trustor agrees that: (a) the term "Lease" as used herein shall mean the lease creating the "leasehold estate"' (b) Trustor shall not amend, change or modify his leasehold interest, or the Lease, or agree to do so, without the written consent of the Beneficiary; (c) Trustor will promptly advise Beneficiary regarding any notice, request or demand received by him from the lessor under the Lease and promptly furnish Beneficiary with a copy of any such notice, request or demand; (d) as long as any of the indebtedness secured hereby shall remain unpaid, unless the Beneficiary shall otherwise consent thereto in writing, the leasehold estate shall not merge with the fee title but shall always be kept separate and distinct, notwithstanding the union of said estates in any party; (e) Trustor agrees that it will promptly, strictly, and faithfully perform, fulfill, and comply with all covenants, agreements, terms, conditions and provisions under any lease affecting the premises and to neither do anything, nor to permit anything to be done which may cause modification or termination of any such lease or of the obligations of any lessee or person claiming through such lease or the rents provided for therein or the interest of the lessor or the Beneficiary therein or thereunder. Trustor further agrees he will not execute a Deed of Trust or mortgage which may be or become superior to any leasehold estate that is security for this Deed of Trust. In the event of a violation of any of the covenants set forth in this paragraph, Beneficiary shall have the right, at its option,to declare all sums secured hereby immediately due and payable. Consent to or waiver of one of said violations shall not be deemed to be a consent to or waiver of any other violation. If the security for this Deed of Trust is a leasehold estate, the term "property" as used in this Deed of Trust shall be deemed to mean the leasehold estate whenever the context so requires for the protection of the Beneficiary. 20. Trustor waives, to the fullest extent permissible by law, the right to plead any statute of limitations as a defense to any demand secured hereby. 21. Beneficiary may, from time to time, by instrument in writing, substitute a successor or successors to any Trustee named herein or acting hereunder, which instrument, 10 08-1542.005/60417 median executed and acknowledged by Beneficiary and recorded in the office of the recorder of the county or counties where the Property is situated, shall be conclusive proof of property substitution of such successor Trustee or Trustees, who shall, without conveyances from the Trustee predecessor, succeed to all its title, estate, rights, powers and duties, including but not limited to the power to reconvey the whole or any part of the property covered by this Deed of Trust. Such instrument must contain the name of the original Trustor, Trustee and Beneficiary hereunder,the book and page where this Deed of Trust is recorded. If notice of default shall have been recorded, this power of substitution cannot be exercised until after the costs, fees and expenses of the then acting Trustee shall have been paid to such Trustee, who shall endorse receipt thereof upon such instrument. The procedures herein provided for substitution of Trustee shall not be exclusive of other provisions for substitution provided by law. 22. This Deed of Trust applies to, inures to the benefit of, and binds all parties hereto, their heirs, legatees, devisees, administrators, executors, successors and assigns. The term "Beneficiary" shall mean the owner and holder, including pledgee, of the Note secured hereby, whether or not names as Beneficiary herein. In this Deed of Trust, whenever the context so requires, the masculine gender includes the feminine and/or neuter, and the singular number includes the plural. 23. That in the event of a demand for, and the preparation and delivery of a written statement regarding the obligations secured by this Deed of Trust pursuant to Sections 2943 and 2954 of the Civil Code of California, Beneficiary shall be entitled to make a reasonable charge, not exceeding the maximum amount which is permitted by law at the time the statement is furnished. Beneficiary may also charge Trustor a reasonable fee for any other services rendered to Trustor or rendered in Trustor's behalf in connection with the Property of this Deed of Trust, including changing Beneficiary's records, pertaining to this Deed of Trust in connection with the transfer of the Property, or releasing an existing policy of fire insurance or other casualty insurance held by Beneficiary and replacing the same with another such policy. 24. Trustee accepts this Trust when this Deed of Trust, duly executed and acknowledged, is made a public record as provided by law. Trustee is not obligated to notify any party hereto of pending sale under any other Deed of Trust or of any action or proceeding in which Trustor,Beneficiary, or Trustee shall be a party unless brought by Trustee. 25. Any notice which any party hereto may desire or be required to give to the other party shall be in writing. The mailing thereof must be certified mail addressed to the Trustor at his address hereinabove set forth or to the Beneficiary at his office or at such other place as such parties hereto may designate in writing. Rest of page not used 11 08-1542.005/60417 median THE UNDERSIGNED TRUSTOR REQUESTS that a copy of any notice of default and of any notice of sale hereunder be mailed to him at his address hereinbefore set forth. TRUSTOR: Dated: , 20 REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH By: Deputy Executive Director CITY OF HUNTINGTON BEACH By: Director of Economic Development APPROVED AS TO FORAM JENNIFER McGRATM,City Attorney By Mike Vigliotta Deputy City Attorney 12 08-1542.005/60417 median This Document was electronically recorded by City of Huntington Beach Recorded in Official Records, Orange County Tom Daly, Clerk-Recorder RECORDING REQUESTED BY; ) Illlllllllllllll111III111111IIIIIIIIIIIII911111111111111 NO FEE 2010000552304 09:46am 10/21/10 217 405 D02 13 0.00 0.00 0.00 0.00 36.00 0.00 0.00 0.00 AND WHEN RECORDED MAIL TO:) City Clerk ) City of Huntington Beach ) 2000 Main Street ) Huntington Beach, CA 92648 ) (Space Above for Recorder's Use) AGREEMENT DECLARING CONDITIONS, COVENANTS AND RESTRICTIONS FOR PROPERTY (RESALE RESTRICTIONS) This Agreement Declaring Conditions, Covenants and Restrictions for Property(the "Agreement") is made as ot��Ao 2010, by and between RP/PLC BLUE CANVAS, L.L.C., a Delaware limited liability company(the"Covenantor"), and THE CITY OF HUNTINGTON BEACH, a California municipal corporation (the"City"), and the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic(the"Agency"). Collectively, the City and Agency will be referred to as the "Covenantee". RECITALS A. Covenantor is the owner of record of that certain real property located in the City of Huntington Beach, County of Orange, State of California legally described in the attached Exhibit"A". B. On September 2, 2008,the City Council approved Tract No. 16733, as per map recorded as Instrument No. 2008000531659 in Book 897, Pages 10 through 14 of Miscellaneous Maps, Records of Orange County, California ("Project"). City imposed conditions of approval on the Project, requiring Covenantor to submit an Affordable Housing Agreement, in accordance with the Affordable Housing Program, for review by the Planning Department and approval by the City Attorney and acceptance by the City Council. The City further required that the plan shall provide ten percent(10%)of the total 201 units equaling 21 units to be restricted as set forth herein ("Restricted Units"), 3 of which are to be affordable housing for household earning less than 80%of the Orange County Median Income and 18 of r which are to be affordable housing for households earning no more than 100% of the Orange County Median Income, in both cases for a period of sixty (60)years. The execution and recordation of this Agreement is intended to fully satisfy that condition. NOW,THEREFORE, the parties hereto agree and covenant as follows: TAFILES\WP51\DLB\PAC SHORES\AFFORDABLE HOUSING CC&R'S.DOC 07/13/10 This dcaiment IS s okoy ter the or4w 1 bualnew of the City of Km*ow as conwnplaw undw Gover w*nt Code Sec.6103 s sli Wd be recorded fine of dmrp. 1. Affordability Covenants, Covenantor agrees for itself and its successor and assigns, and every successor to Covenantor's interest in the Restricted Unit, or any part thereof, that the Project located at Newland Street and Noelle Drive, which consists of a total of 201 residential condominium units, shall be designated as affordable and shall be held subject to this Agreement for sixty(60)years from the date of the close of escrow for the initial sale of each such Restricted Unit built in Tract No. 16733 as follows: (a) Eighteen (18) Restricted Units as further designated on Exhibit"B" attached hereto shall only be owned and occupied by"Median-Income Households",which shall mean persons or families earning not more than 100% of the Orange County median income, adjusted for household size appropriate for the property as determined by the Agency based on statistics published by the United States Department of Housing & Urban Development or established by the State of California, pursuant to Health and Safety Code Section 50093, or a successor statute. (b) These eighteen (18) Medium-Income Restricted Units shall only be sold at an "Affordable Housing Cost"to " Median-Income Households." (c) Three (3) Restricted Units as further designated on Exhibit"B"attached hereto shall only be owned and occupied by"Low-Income Households", which shall mean persons or families earning less than 80% of the Orange County median income, adjusted for household size appropriate for the property as determined by the Agency based on statistics published by the United States Department of Housing & Urban Development or established by the State of California, pursuant to Health and Safety Code Section 50093, or a successor statute. (d) These three (3) Low-Income Restricted Units shall only be sold at an "Affordable Housing Cost"to"Low-income Households." (e) "Affordable Housing Cost"shall mean the permitted gross sales price of the Restricted Unit as set forth in the Affordable Housing Price/Income Guidelines or successor guidelines published, from time to time, by the City for such purpose. (f) The term of this Agreement shall commence on the date of the initial sale of each Restricted Unit to a qualifying purchaser as evidenced by a deed recorded with the Orange County Recorder's Office and shall continue for sixty years from said date ("Affordability Period"). The covenant contained in this Section 1 shall run with the Restricted Unit and shall automatically terminate and be of no further force or effect upon the expiration of the Affordability Period. (g) Purchasers of the Restricted Units identified above shall enter into a promissory note and deed of trust in the forms attached hereto as Exhibit"C". 2. Transfer of Restricted Unit: Consent of Aaency. During the Affordability Period no transfer of a Restricted Unit shall occur until the City determines: (a) that the proposed purchaser intends to occupy the Restricted Unit as the proposed purchaser's principal residence, T:\FILES\WP51\DLB\PAC SHORES\AFFORDABLE HOUSING CCBR'S.DOC 07/13/10 2 (b) that the proposed purchaser is a "Low", or"Median" Income Household as provided in Section 1 above, and (c) that the proposed transfer occurs at an Affordable Housing Cost. (d) The Restricted Units shall be constructed prior to or concurrent with the primary Project. (e) In the event that the Covenantor(including successors and assigns) desires to sell the Restricted Unit, Covenantor shall send written notice thereof to the City at the following address: City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attention: Director of Economic Development Within seven (7) days of receiving such notice, the City shall send Covenantor transfer application forms prepared by the City. Such forms shall contain a certification of the proposed purchaser's intent with respect to his/her/its residency of the Restricted Unit and his/herlits gross income, and an affidavit of the proposed purchaser disclosing and certifying the amount of the proposed purchase price. The City shall not be obligated to approve a transfer unless and until the proposed purchaser has submitted to the City such information and completed such forms. In the interest of expediting the close of escrow for such proposed transactions, the City shall reasonably approve or disapprove such submissions as soon as practicable after submission of such forms, and in no event later than fourteen (14) days after submission of a completed form. Prior to conveyance of the Restricted Unit, each approved purchaser shall also submit to the City an executed disclosure statement which certifies that the purchaser is aware that: (i)the purchaser buying the Restricted Unit may only sell the Restricted Unit at an Affordable Housing cost to a "Low" or"Median" Income Household as provided in Section 1 above, (ii) the maximum permitted sales price may be less than fair market value and (iii) the Restricted Unit must be owner-occupied at all times and cannot be rented or leased. The approved purchaser shall also submit an executed promissory, trust deed, notice documents, and any other documentation required by the City to effectuate the Affordable Housing Program. Covenantor shall cooperate with the City in providing such forms to proposed purchasers and in assisting proposed purchasers to prepare such forms and to provide any required information to the City in connection with only the Covenantor's sale of the Restricted Unit, provided that the Covenantor shall not be obligated to incur any out-of-pocket costs in connection therewith, other than employee time dedicated to providing such assistance. THE COVENANTOR AND EACH SUCCESSOR, HEIR, OR ASSIGN OR COVENANTOR UNDERSTAND THAT THE DETERMINATION OF THE AFFORDABLE HOUSING COST CAN BE MADE ONLY AT THE TIME OF THE PROPOSED TRANSFER, TAKING INTO CONSIDERATION INTEREST RATES, THE TERMS OF SALE OFFERED TO, AND THE ECONOMIC T:\FILES\WP51\DLB\PAC SHORES\AFFORDABLE HOUSING CC&R'S DOC 07/13/10 3 CIRCUMSTANCES OF, THE PROPOSED PURCHASER AND OTHER FACTORS THAT CANNOT BE ACCURATELY PREDICTED,AND THAT THE TRANSFER PRICE PERMITTED HEREUNDER MAY BE LESS THAN THE FAIR MARKET VALUE OF THE PROPERTY AND MAY NOT INCREASE OR DECREASE IN THE SAME MANNER AS OTHER SIMILAR REAL PROPERTY WHICH IS NOT ENCUMBERED BY THIS RESTRICTION. COVENANTOR AND EACH SUCCESSOR, HEIR, OR ASSIGN OF COVENANTOR FURTHER ACKNOWLEDGES THAT AT ALL TIMES IN SETTING THE TRANSFER PRICE, THE PRIMARY OBJECTIVE OF THE CITY AND THIS AGREEMENT IS TO PROVIDE HOUSING TO"LOW" OR"MEDIAN" INCOME HOUSEHOLDS AT AN AFFORDABLE OUSING COST. Covenantoes Initials Covenantor shall include in the escrow instructions and Purchase and Sale Agreements with purchaser a provision which requires each purchaser to record a covenant which will run with the land and bind all successors-in-interest or assignees that will ensure that all subsequent purchasers and occupants qualify as"Low"or"Median" Income Households as applicable. Said covenant shall remain in full force and effect for the Affordability Period as set forth in Section 1. 3. Non-Discrimination Covenants. Covenantor covenants by and for itself,'i l' successors and assigns, and all persons claiming under or though them that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, religion, sex, sexual orientation, creed, ancestry, national or ethnic origin, age, family or marital status, handicap or disability, in the sale, transfer, use, occupancy,tenure or enjoyment of the Restricted Unit, nor shall Covenantor itself or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, subtenants,or vendees in the Restricted Unit. Covenantor and its successors and assigns shall refrain from restricting the sale of the Restricted Unit on the basis of race, color, religion, sex, sexual orientation, creed, ancestry, national or ethnic origin, age, family or marital status, handicap or disability, of any person. All such deeds or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clause: (a) In deeds: "The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns,and all persons claiming under or through them,that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, religion, sex, sexual orientation, creed, ancestry, national or ethnic origin, age, family or marital status, handicap or disability, in the sale, transfer, use,occupancy,tenure or enjoyment of the land herein conveyed, nor shall the grantee himself or herself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, or vendees in the land herein conveyed. The foregoing covenants shall run with the land." TAFILEMP51TUAIRAC SHORESWFORDABLE HOUSING CC&R'S.DOC 07/13/10 4 (b) In contracts: "There shall be no discrimination against or segregation of, any person or group of persons on account of race, color, religion, sex, sexual orientation, creed, ancestry, national or ethnic origin, age, family or marital status, handicap or disability, in the sale, transfer, use, occupancy, tenure or enjoyment of the premises, nor shall the transferor himself or herself of any person claiming under or though him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use of occupancy of tenants, subtenants or vendee of the premises." (c) In leases: "The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators, and assignees, and all persons claiming under or though him or her, and this lease is made and accepted upon and subject to the following conditions: "That there shall be no discrimination against or segregation of any person or group of persons on account of race, color, religion, sex, sexual orientation, creed, ancestry, national or ethnic origin, age, family or marital status, handicap or disability, in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the premises herein leased nor shall the lessee himself or herself, or any person claiming under or though him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy of tenants, sublessees, subtenants, or vendees in the premises herein leased." 4. Covenants Do Not Impair Lien. No violation or breach of covenants, conditions, restrictions, provisions or limitations contained in this Agreement shall defeat or render invalid or in any way impair the lien or charge of any mortgage or deed of trust or security interest. 5. Covenants For Benefit of City. All covenants without regard to technical classification or designation shall be binding for the benefit of the Covenantee and such covenants shall run in favor of Covenantee for the entire period during which time such covenants shall be in force and effect, without regard to whether the Covenantee is or remains an owner of any land or interest therein to which such covenants relate. The Covenantee, in the event of any breach of any such covenants, shall have the right to exercise all the rights and remedies and to maintain any such action at law or suits in equity or other proper legal proceedings to enforce and to cure such breach to which it or any other beneficiaries of these covenants may be entitled during the term specified for such covenants, except the covenants against discrimination which may be enforced at law or in equity at any time in perpetuity. 6. Counterparts. This Agreement may be executed in a number of counterparts, each of which shall be an original, but all of which shall constitute one and the same document. T:\FILES\WP51\DLB\PAC SHORES\AFFORDABLE HOUSING CC&R'S.DOC 07/13/10 5 7. Applicable Law. (a) If any provision of this Agreement or portion thereof, or the application of any provision to any person or circumstances, shall to any extent be held invalid, inoperative, or unenforceable, the remainder of this Agreement, or the application of such provision or portion thereof to any other persons or circumstances, shall not be affected thereby and it shall not be deeded that any such invalid provision affects the consideration for this Agreement; and each provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law. (b) This Agreement shall be construed in accordance with the laws of the State of California. [Balance of this page intentionally left blank] TARLES\WP51\DLB\PAC SHORES\AFFORDASLE HOUSING CC&R'S.DOC 07/13/10 6 IN WITNESS WHEREOF, the Covenantee and Covenantor have caused this instrument to be executed on their behalf by their respective officers hereunto duly authorized as of the date set forth above. COVENANTOR: COVENANTEE: RP/PLC BLUE CANVAS, L.L.C., CITY OF HUNTINGTON BEACH a Delaware limited liability company a California municipal corporation By: Its: Vito ®fit Mayor City Clerk THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic COUNTERPART By: Deputy Executive Director APPROVED AS TO FORM: City Attorney 1 Agency Counsel �.N. la INITIATED AND APPROVED: Planning Director REVIEWED AND APPROVED: City Administrator TAR LES%WP51\DLB%PAC SHCRESIAFFORDABLE HOUSING CCSR'S_DOC 07/13/10 7 STATE OF CALIFORNIA ) )ss. COUNTY OF ORANGE ) 0n P r sra 7 , 2010, before me, >' -l") 4,kSo , Notary Public, personally appeared 2WA J,E' who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/heF signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. [SEAL] Signature c,LG��•� 1�,�� f�7 PATRICIA ALEXIS HANSON Commission*1880030 Notary Public-Cal"ornis Oranpe County My Comm.Ex m Ma 2 8014 STATE OF CALIFORNIA ) ) ss. COUNTY OF ORANGE ) On , 2010, before me, , Notary Public, personally appeared who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. [SEAL] Signature T:TILES\WP511DLB\PAC SHORESWFORDABLE HOUSING CCBR'S.DDC 07/13/10 8 IN WITNESS WHEREOF, the Covenantee and Covenantor have caused this instrument to be executed on their behalf by their respective officers hereunto duly authorized as of the date set forth above. COVENANTOR: COVENANTEE: RP/PLC BLUE CANVAS, L.L.C., CITY OF HUNTINGTON BEACH a Delaware limited liability company a California municipal corporation By: A �. Mayor Its: �Ci Clerk THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic COLWTE"ART By: Deputy xec ive Director APPROVED AS TO FORM: F C y Attorne /Agency Co el jLQj 1-1L(-110 INITIA D A APPROVED: P an ing Director REVI ND APPROVED: Ci nistrator T:\FILES\WP51\DLB\PAC SHORESIAFFORDASLE HOUSING CCBR'S.DOC 07/13/10 7 STATE OF CALIFORNIA ) )ss. COUNTY OF ORANGE ) On 7, 2010, before me, 1 •1t.t T' t Notary Public, personally appeared who proved to me on the basis of satisfactory a nce to be the person whose name is subscribed to the within instrument and acknowledged to me thao&lae executed the same inN fiher-authorizedcapacity, and that by Is bw signature on the Instrument the person, or the entity upon behalf of which the person acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. [SEAL] Signature Vv4ju TERYLL L. KING Commission 0 1767806 -a Notary Public-California . Orange County wCamm.e"ModIZZ111 ACKNOWLEDGMENT STATE OF CALIFORNIA ) ) ss COUNTY OF ORANGE ) On October 11, 2010 before me,P. L. Esparza, Notary Public, personally appeared Joan L. Flynn and Cathy Green who proved to me on the basis of satisfactory evidence to be the persons whose names are subscribed to the within instrument and acknowledged to me that they executed the same in their authorized capacities, and that by their signatures on the instrument the persons, or the entity upon behalf of which the persons acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. 49 P.L.ESPARZA WITNESS my hand and official seal. Commission# 1857021 Notary Public-California z = Orange County RA Comm.Expires Aug4,2013 f r (Seal) otary Signat e) EXHIBIT "A" Legal Description of Restricted Units in Tract 16733 All that certain real property in the City of Huntington Beach, County of Orange, State of California, described as follows: Parcel 1: The "Median-Income Households" consisting of: Unit 129, as shown on that certain Condominium Plan Pacific Shores—Phase I recorded on September 20, 2010, as Instrument No. 2010000465240 of Official Records of Orange County, California, covering those portions of Lots 6 and 12 of Tract No. 16733, as per map filed in Book 897, Pages 10 through 14 of Miscellaneous Maps of said County (the "Map") lying within the boundaries of said Condominium Plan. EXHIBIT "B" Designation of Median-income and Low-Income Household Restricted Units Median-Income Household Restricted Units: Those Units more particularly described as Parcel 9 on Exhibit"A"to this Agreement. Low-income Household Restricted Units: Those Units more particularly described as Parcel 2 on Exhibit"A" to this Agreement. T_1FILES1WP511DLB1PAC SHORESIAFFORDABLE HOUSING CC8R'S.DOC 07/13/10 This Document was electronically recorded by City of Huntington Beach Recorded in Official Records, Orange County Tom Daly, Clerk-Recorder RECORDING REQUESTED BY: ) IIIIIIIII�III�II�IIII��IIIIIIII�I�I�I�I�III�IIIII111111111111 NO FEE } 2010000552305 09:46am 10/21/10 } 217 405 D02 13 } 0.00 0.00 0.00 0.00 36.00 0.00 0.00 0.00 AND WHEN RECORDED MAIL TO:) City Clerk ) City of Huntington Beach ) 2000 Main Street ) Huntington Beach, CA 92648 } (Space Above for Recorder's Use) AGREEMENT DECLARING CONDITIONS, COVENANTS AND RESTRICTIONS FOR PROPERTY (RESALE RESTRICTIONS) This Agreement Declaring Conditions, Covenants and Restrictions for Property(the "Agreement") is made as ot_5��-Ib 2010, by and between RP/PLC BLUE CANVAS, L.L.C., a Delaware limited liability company(the"Covenantor"), and THE CITY OF HUNTINGTON BEACH, a California municipal corporation (the"City"), and the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic(the"Agency"). Collectively, the City and Agency will be referred to as the "Covenantee". RECITALS A. Covenantor is the owner of record of that certain real property located in the City of Huntington Beach, County of Orange, State of California legally described in the attached Exhibit"A". B. On September 2, 2008,the City Council approved Tract No. 16733, as per map recorded as Instrument No. 2008000531659 in Book 897, Pages 10 through 14 of Miscellaneous Maps, Records of Orange County, California ("Project"). City imposed conditions of approval on the Project, requiring Covenantor to submit an Affordable Housing Agreement, in accordance with the Affordable Housing Program, for review by the Planning Department and approval by the City Attorney and acceptance by the City Council. The City further required that the plan shall provide ten percent(10%)of the total 201 units equaling 21 units to be restricted as set forth herein ("Restricted Units"), 3 of which are to be affordable housing for household earning less than 80%of the Orange County Median Income and 18 of which are to be affordable housing for households earning no more than 100%of the Orange County Median Income, in both cases for a period of sixty (60)years. The execution and recordation of this Agreement is intended to fully satisfy that condition. NOW,THEREFORE, the parties hereto agree and covenant as follows: T:\F1ES\WP51\DLB\PAC SHORES\AFFORDABLE HOUSWG COWS.DOC This�,s� 07/13/10 T h 000iment Is soWy for 1buakww of the CRY Of Hw*om as con GovWwwrit Code SeQ 8103 Shouid b 9 reconied fm of 1. Affordability Covenants. Covenantor agrees for itself and its successor and assigns, and every successor to Covenantor's interest in the Restricted Unit, or any part thereof, that the Project located at Newland Street and Noelle Drive, which consists of a total of 201 residential condominium units, shall be designated as affordable and shall be held subject to this Agreement for sixty(60) years from the date of the close of escrow for the initial sale of each such Restricted Unit built in Tract No. 16733 as follows: (a) Eighteen (18) Restricted Units as further designated on Exhibit"B" attached hereto shall only be owned and occupied by"Median-Income Households",which shall mean persons or families earning not more than 100% of the Orange County median income, adjusted for household size appropriate for the property as determined by the Agency based on statistics published by the United States Department of Housing & Urban Development or established by the State of California, pursuant to Health and Safety Code Section 50093, or a successor statute. (b) These eighteen (18) Medium-Income Restricted Units shall only be sold at an "Affordable Housing Cost"to " Median-Income Households." (c) Three(3) Restricted Units as further designated on Exhibit"B"attached hereto shall only be owned and occupied by"Low-Income Households", which shall mean persons or families earning less than 80% of the Orange County median income, adjusted for household size appropriate for the property as determined by the Agency based on statistics published by the United States Department of Housing & Urban Development or established by the State of California, pursuant to Health and Safety Code Section 50093, or a successor statute. (d) These three (3) Low-Income Restricted Units shall only be sold at an "Affordable Housing Cost"to"Low-income Households." (e) "Affordable Housing Cost"shall mean the permitted gross sales price of the Restricted Unit as set forth in the Affordable Housing Price/Income Guidelines or successor guidelines published, from time to time, by the City for such purpose. (f) The term of this Agreement shall commence on the date of the initial sale of each Restricted Unit to a qualifying purchaser as evidenced by a deed recorded with the Orange County Recorder's Office and shall continue for sixty years from said date ("Affordability Period"). The covenant contained in this Section 1 shall run with the Restricted Unit and shall automatically terminate and be of no further force or effect upon the expiration of the Affordability Period. (g) Purchasers of the Restricted Units identified above shall enter into a promissory note and deed of trust in the forms attached hereto as Exhibit"C". 2. Transfer of Restricted Unit: Consent of Agency. During the Affordability Period no transfer of a Restricted Unit shall occur until the City determines: (a) that the proposed purchaser intends to occupy the Restricted Unit as the proposed purchaser's principal residence, TAFILESMP51\DLBIPAC SHORESWFFORDABLE HOUSING CC&R'S.DOC 07/13/10 2 (b) that the proposed purchaser is a "Low", or"Median" Income Household as provided in Section 1 above, and (c) that the proposed transfer occurs at an Affordable Housing Cost. (d) The Restricted Units shall be constructed prior to or concurrent with the primary Project. (e) In the event that the Covenantor (including successors and assigns) desires to sell the Restricted Unit, Covenantor shall send written notice thereof to the City at the following address: City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attention: Director of Economic Development Within seven (7) days of receiving such notice, the City shall send Covenantor transfer application forms prepared by the City. Such forms shall contain a certification of the proposed purchaser's intent with respect to his/her/its residency of the Restricted Unit and his/her/its gross income, and an affidavit of the proposed purchaser disclosing and certifying the amount of the proposed purchase price. The City shall not be obligated to approve a transfer unless and until the proposed purchaser has submitted to the City such information and completed such forms. In the interest of expediting the close of escrow for such proposed transactions, the City shall reasonably approve or disapprove such submissions as soon as practicable after submission of such forms, and in no event later than fourteen (14) days after submission of a completed form. Prior to conveyance of the Restricted Unit, each approved purchaser shall also submit to the City an executed disclosure statement which certifies that the purchaser is aware that: (i)the purchaser buying the Restricted Unit may only sell the Restricted Unit at an Affordable Housing cost to a "Low" or"Median" Income Household as provided in Section 1 above, (ii) the maximum permitted sales price may be less than fair market value and (iii) the Restricted Unit must be owner-occupied at all times and cannot be rented or leased. The approved purchaser shall also submit an executed promissory, trust deed, notice documents, and any other documentation required by the City to effectuate the Affordable Housing Program. Covenantor shall cooperate with the City in providing such forms to proposed purchasers and in assisting proposed purchasers to prepare such forms and to provide any required information to the City in connection with only the Covenantor's sale of the Restricted Unit, provided that the Covenantor shall not be obligated to incur any out-of-pocket costs in connection therewith, other than employee time dedicated to providing such assistance. THE COVENANTOR AND EACH SUCCESSOR, HEIR, OR ASSIGN OR COVENANTOR UNDERSTAND THAT THE DETERMINATION OF THE AFFORDABLE HOUSING COST CAN BE MADE ONLY AT THE TIME OF THE PROPOSED TRANSFER, TAKING INTO CONSIDERATION INTEREST RATES, THE TERMS OF SALE OFFERED TO, AND THE ECONOMIC TAFILEMP510LB\PAC SHORES\AFFORDABLE HOUSING CC&R'S.DOC 07/13/10 3 CIRCUMSTANCES OF, THE PROPOSED PURCHASER AND OTHER FACTORS THAT CANNOT BE ACCURATELY PREDICTED, AND THAT THE TRANSFER PRICE PERMITTED HEREUNDER MAY BE LESS THAN THE FAIR MARKET VALUE OF THE PROPERTY AND MAY NOT INCREASE OR DECREASE IN THE SAME MANNER AS OTHER SIMILAR REAL PROPERTY WHICH IS NOT ENCUMBERED BY THIS RESTRICTION. COVENANTOR AND EACH SUCCESSOR, HEIR, OR ASSIGN OF COVENANTOR FURTHER ACKNOWLEDGES THAT AT ALL TIMES IN SETTING THE TRANSFER PRICE, THE PRIMARY OBJECTIVE OF THE CITY AND THIS AGREEMENT IS TO PROVIDE HOUSING TO"LOW" OR"MEDIAN" INCOME HOUSEHOLDS AT AN AFFORDABLE OUSING COST. Covenantor's Initials Covenantor shall include in the escrow instructions and Purchase and Sale Agreements with purchaser a provision which requires each purchaser to record a covenant which will run with the land and bind all successors-in-interest or assignees that will ensure that all subsequent purchasers and occupants qualify as"Low"or"Median" Income Households as applicable. Said covenant shall remain in full force and effect for the Affordability Period as set forth in Section 1. 3. Non-Discrimination Covenants. Covenantor covenants by and for itself,it-,' successors and assigns, and all persons claiming under or though them that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, religion, sex, sexual orientation, creed, ancestry, national or ethnic origin, age, family or marital status, handicap or disability, in the sale, transfer, use, occupancy,tenure or enjoyment of the Restricted Unit, nor shall Covenantor itself or any person claiming under or through it,establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, subtenants,or vendees in the Restricted Unit. Covenantor and its successors and assigns shall refrain from restricting the sale of the Restricted Unit on the basis of race, color, religion, sex, sexual orientation, creed, ancestry, national or ethnic origin, age, family or marital status, handicap or disability,of any person. All such deeds or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clause: (a) In deeds: "The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through them,that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, religion, sex, sexual orientation, creed, ancestry, national or ethnic origin, age, family or marital status, handicap or disability, in the sale, transfer, use,occupancy,tenure or enjoyment of the land herein conveyed, nor shall the grantee himself or herself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, or vendees in the land herein conveyed. The foregoing covenants shall run with the land." TAFILEMP51\DLB\PAC SHORESIAFFORDABLE HOUSING CCBR'S.DOC 07/13/10 4 (b) In contracts: "There shall be no discrimination against or segregation of, any person or group of persons on account of race, color, religion, sex, sexual orientation, creed, ancestry, national or ethnic origin, age, family or marital status, handicap or disability, in the sale, transfer, use, occupancy, tenure or enjoyment of the premises, nor shall the transferor himself or herself of any person claiming under or though him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use of occupancy of tenants, subtenants or vendee of the premises." (c) In leases: "The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators, and assignees, and all persons claiming under or though him or her, and this lease is made and accepted upon and subject to the following conditions: "That there shall be no discrimination against or segregation of any person or group of persons on account of race, color, religion, sex, sexual orientation, creed, ancestry, national or ethnic origin, age, family or marital status, handicap or disability, in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the premises herein leased nor shall the lessee himself or herself, or any person claiming under or though him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy of tenants, sublessees, subtenants, or vendees in the premises herein leased." 4. Covenants Do Not Impair Lien. No violation or breach of covenants, conditions, restrictions, provisions or limitations contained in this Agreement shall defeat or render invalid or in any way impair the lien or charge of any mortgage or deed of trust or security interest. 5. Covenants For Benefit of City. All covenants without regard to technical classification or designation shall be binding for the benefit of the Covenantee and such covenants shall run in favor of Covenantee for the entire period during which time such covenants shall be in force and effect, without regard to whether the Covenantee is or remains an owner of any land or interest therein to which such covenants relate. The Covenantee, in the event of any breach of any such covenants, shall have the right to exercise all the rights and remedies and to maintain any such action at law or suits in equity or other proper legal proceedings to enforce and to cure such breach to which it or any other beneficiaries of these covenants may be entitled during the term specified for such covenants, except the covenants against discrimination which may be enforced at law or in equity at any time in perpetuity. 6. Counterparts. This Agreement may be executed in a number of counterparts, each of which shall be an original, but all of which shall constitute one and the same document. T:\FILES\WP51\DLB\PAC SHORES\HFFORDABLE HOUSING CC&R'S.DOC 07/13/10 5 7. Applicable Law. (a) If any provision of this Agreement or portion thereof, or the application of any provision to any person or circumstances, shall to any extent be held invalid, inoperative, or unenforceable, the remainder of this Agreement, or the application of such provision or portion thereof to any other persons or circumstances, shall not be affected thereby and it shall not be deeded that any such invalid provision affects the consideration for this Agreement; and each provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law. (b) This Agreement shall be construed in accordance with the laws of the State of California. [Balance of this page intentionally left blank] T:\FILES\WP51\DLB\PAC SHORES\AFFORDABLE HOUSING CC&R'S.DOC 07/13/10 6 IN WITNESS WHEREOF, the Covenantee and Covenantor have caused this instrument to be executed on their behalf by their respective officers hereunto duly authorized as of the date set forth above. COVENANTOR: COVENANTEE: RP/PLC BLUE CANVAS, L.L.C., CITY OF HUNTINGTON BEACH a Delaware limited liability company a California municipal corporation By: Mayor Its: �l�i ®�� City Clerk THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic COUNTERPART By: Deputy Executive Director APPROVED AS TO FORM: City Attorney 1 Agency Counsel Atli 1-lLI 10 �.14. 10 INITIATED AND APPROVED: Planning Director REVIEWED AND APPROVED: City Administrator TAFILES\WP51\D SI LB\PAC SHOREAFFORDABLE HOUSING CCBR'S_DOC 07/13/10 7 STATE OF CALIFORNIA ) )ss. COUNTY OF ORANGE ) On fi fr a 7 , 2010, before me, Aj(-,1 4,-,,- s r� , Notary Public, personally appeared 34-x1rE"- who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/tier authorized capacity, and that by his/hef signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. ---- [SEAL] Signature �"c PAMICIA ALUM HANSON Commission*1SM30 Notary Public-California oranpa county wA COW.Ex fires Many 2 201d STATE OF CALIFORNIA ) ) ss. COUNTY OF ORANGE ) On L , 2010, before me, , Notary Public, personally appeared , who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. [SEAL] Signature T:TILESMP51%DLB\PAC SHORESIAFFORDABLE HOUSING CCBRS.DOC 07M3110 8 IN WITNESS WHEREOF, the Covenantee and Covenantor have caused this instrument to be executed on their behalf by their respective officers hereunto duly authorized as of the date set forth above. COVENANTOR: COVENANTEE: RP/PLC BLUE CANVAS, L.L.C., CITY OF HUNTINGTON BEACH a Delaware limited liability company a California municipal corporation By: Mayor Its: c� Ci Clerk THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic COUNTERPART By: Dutyxec ve eD APPROVED AS TO FORM: OyC Attorne /Agency Co PelitP ?111-10 INITIA D A APPROVED: P an mg Director REVI ND APPROVED: Ci A nistrator T:\FILES\WP51\DLB\PAC SHORESWFFORDABLE HOUSING CC&R'S.DOC 07/13/10 7 STATE OF CALIFORNIA ) )ss. COUNTY OF ORANGE ) On ( , 2010, before me, !l t Notary Public, personally appeared who proved to me on the basis of satisfactory a nce to be the person whose name is subscribed to the within instrument and acknowledged to me thsgaexecuted the same in&hei`authorized capacity, and that by Is hw signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. [SEAL) Signature TERYU L.KING Commission# 1767806 -� Notary Public-California Orange County *CarMD0w0a112,2011 ACKNOWLEDGMENT STATE OF CALIFORNIA ) ) ss COUNTY OF ORANGE ) On October 11, 2010 before me,P. L. Esparza, Notary Public, personally appeared Joan L. Flynn and Cathy Green who proved to me on the basis of satisfactory evidence to be the persons whose names are subscribed to the within instrument and acknowledged to me that they executed the same in their authorized capacities, and that by their signatures on the instrument the persons, or the entity upon behalf of which the persons acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. P.L.ESPARZA WITNESS my hand and official seal. Commission# 1857021 La Notary Public-CaliforniaOrange County NI Comm.Ex iresAu 4,2013 f r' (Seal) otary Signat e) EXHIBIT"A" Legal Description of Restricted Units in Tract 16733 All that certain real property in the City of Huntington Beach, County of Orange, State of California, described as follows: Parcel 1: The "Median-Income Households" consisting of: Units 117, 120, and 123, as shown on that certain Condominium Plan Pacific Shores— Phase 2 recorded on September 20, 2010, as Instrument No. 2010000465241 of Official Records of Orange County, California, covering those portions of Lots 6 and 10 of Tract No. 16733, as per map filed in Book 897, Pages 10 through 14 of Miscellaneous Maps of said County (the "Map") lying within the boundaries of said Condominium Plan. EXHIBIT "B" Designation of Median-Income and Low-Income Household Restricted Units Median-Income Household Restricted Units: Those Units more particularly described as Parcel 9 on Exhibit"A"to this Agreement. Low-Income Household Restricted Units:Those Units more particularly described as Parcel 2 on Exhibit"A" to this Agreement. TAFILES\WP571DLB%PAC SHORESIAFFORDABLE HOUSING CCBR'S.DOC 07/13/10 < :,Zb r S Council/Agency Meeting Held: Deferred/Continued to: :El Approved Condi io II A pro%, 0 Denied �Gity it`, rk's Siviature Council Meeting Date: September 20, 2010 Department ID Number: ED10-038 CITY OF HUNTINGTON BEACH REQUEST FOR COUNCIL/REDEVELOPMENT AGENCY ACTION SUBMITTED TO: Honorable Mayor/Chairperson and City Council/Agency Members SUBMITTED BY: Fred A. Wilson, City Administrator/Executive Director PREPARED BY: Stanley Smalewitz, Director of Economic Development/Deputy Executive Director SUBJECT: Approve and authorize the Mayor and City Clerk to execute an Inclusionary Affordable Housing Agreement with RP/PLC Blue Canvas, Huntington Beach (Pacific Shores) for twenty-one (21) units at a 201 unit residential development located at 21471 Newland Street (Tract 16733) Statement of Issue: Transmitted for consideration is an Inclusionary Affordable Housing Agreement for twenty-one (21) units at a 201 unit residential development located at 21471 Newland Street (Tract 16733). The units are required to be affordable in accordance with Huntington Beach Zoning and Subdivision Ordinance Section 230.26 (Affordable Housing). Financial Impact: Not applicable. City Council and Redevelopment Agency Recommended Action: Motion to: A) Approve the "Agreement Declaring Conditions, Covenants and Restrictions Affecting Property (Resale Restriction)" by and between the City of Huntington Beach, RP/PLC Blue Canvas, and the Redevelopment Agency of the City of Huntington Beach; and, B) Authorize the Mayor, City Clerk to sign and execute the Agreement; and, C) Authorize the Executive Director or designee to take any action and execute any and all documents necessary to implement this agreement. Alternative Action(s): 1. Continue the Agreement Declaring Conditions, Covenants and Restrictions for Property (Resale Restriction) with RP/PLC Blue Canvas and direct staff accordingly. -25- REQUEST FOR COUNCIL ACTION MEETING DATE: 9/20/2010 DEPARTMENT ID NUMBER: ED10-38 Analysis: On August 8, 2006, the Planning Commission approved the Newland Street Residential Project (Blue Canvas) located at 21471 Newland Street (northwest corner of Newland Street and the terminus of Hamilton) developed by WL Direct Huntington Beach, LLC. The City Council also approved the final tract map on September 2, 2008. Since 2008, the project has been sold to Christopher Homes who would like to continue the residential project previously approved by the Planning Commission and City Council. The inclusionary housing agreement remains the same; however, includes the new developer, Christopher Homes, and is now called Pacific Shores. The Affordable Housing Agreement applies to twenty one (21) for-sale inclusionary units within a master-planned, gated residential community of 201 attached homes (medium- density residential units). The 201 residential units would consist of 123 triplex units and 78 duplex units, and would occupy 8.45 net acres of the project site. The development includes two and three-story structures with a variety of architecture, dwelling unit types, and sizes. Amenities include 4.7 acres of common area and-a 2.07 acre public park. The project will be constructed in ten phases and each phase will include one or more affordable units as identified in the map attached to the Agreement. For a period of 60 years, the Affordable Housing Agreement will restrict three (3) units to be affordable to low-income households earning less than 80% of the Orange County median income, and eighteen (18) units to median-income households earning not more than 100% of the median income. The 60 year term will begin on the date of sale of each unit. Income is adjusted for household size appropriate for the property as determined by the Agency based on statistics published by the United States Department of Housing and Urban Development or established by the State of California, pursuant to Health and Safety Code Section 50093. Maximum sales price for the restricted units will be established by the Agency as set forth in the Inclusionary Affordable Housing Policies and Procedures. The proposed Agreement is consistent with the City-wide affordable housing ordinance and standard affordable housing agreements prepared by the City Attorney's Office. Therefore, staff recommends the City Council approve the Agreement. Environmental Status: This request is not subject to the California Environmental Quality Act pursuant to Section 15061 (b)(3). Strategic Plan Goal: Enhance Economic Development Attachment(s): ® p bod 7. Agreement Declaring Conditions, Covenants and Restrictions for Property Resale Restrictions -26- ATTACHMENT # 1 RECORDING REQUESTED BY: ) AND WHEN RECORDED MAIL TO:) City Clerk ) City of Huntington Beach ) 2000 Main Street ) Huntington Beach, CA 92648 ) (Space Above for Recorder's Use) AGREEMENT DECLARING CONDITIONS, COVENANTS AND RESTRICTIONS FOR PROPERTY (RESALE RESTRICTIONS) This Agreement Declaring Conditions, Covenants and Restrictions for Property (the "Agreement") is made as oQ�5' ,;U 2010, by and between RP/PLC BLUE CANVAS, L.L.C., a Delaware limited liability company (the "Covenantor"), and THE CITY OF HUNTINGTON BEACH, a California municipal corporation (the "City"), and the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic (the "Agency"). Collectively, the City and Agency will be referred to as the "Covenantee". l RECITALS A. Covenantor is the owner of record of that certain real property located in the City of Huntington Beach, County of Orange, State of California legally described in the attached Exhibit"A". B. On September 2, 2008, the City Council approved Tract No. 16733, as per map recorded as Instrument No. 2008000531659 in Book 897, Pages 10 through 14 of Miscellaneous Maps, Records of Orange County, California ("Project"). City imposed conditions of approval on the Project, requiring Covenantor to submit an Affordable Housing Agreement, in accordance with the Affordable Housing Program, for review by the Planning Department and approval by the City Attorney and acceptance by the City Council. The City further required that the plan shall provide ten percent (10%) of the total 201 units equaling 21 units to be restricted as set forth herein ("Restricted Units"), 3 of which are to be affordable housing for household earning less than 80% of the Orange County Median Income and 18 of which are to be affordable housing for households earning no more than 100% of the Orange County Median Income, in both cases for a period of sixty (60) years. The execution and recordation of this Agreement is intended to fully satisfy that condition. NOW, THEREFORE, the parties hereto agree and covenant as follows: T:\FILES\WP51\DLB\PAC SHORESWFFORDABLE HOUSING CC&R'S.DOC 07/13/10 1 1. Affordability Covenants. Covenantor agrees for itself and its successor and assigns, and every successor to Covenantor's interest in the Restricted Unit, or any part thereof, that the Project located at Newland Street and Noelle Drive, which consists of a total of 201 residential condominium units, shall be designated as affordable and shall be held subject to this Agreement for sixty (60)years from the date of the close of escrow for the initial sale of each such Restricted Unit built in Tract No. 16733 as follows: (a) Eighteen (18) Restricted Units as further designated on Exhibit"B" attached hereto shall only be owned and occupied by "Median-Income Households", which shall mean persons or families earning not more than 100% of the Orange County median income, adjusted for household size appropriate for the property as determined by the Agency based on statistics published by the United States Department of Housing & Urban Development or established by the State of California, pursuant to Health and Safety Code Section 50093, or a successor statute. (b) These eighteen (18) Medium-Income Restricted Units shall only be sold at an "Affordable Housing Cost"to " Median-Income Households." (c) Three (3) Restricted Units as further designated on Exhibit"B" attached hereto shall only be owned and occupied by"Low-Income Households", which shall mean persons or families earning less than 80% of the Orange County median income, adjusted for household size appropriate for the property as determined by the Agency based on statistics published by the United States Department of Housing & Urban Development or established by the State of California, pursuant to Health and Safety Code Section 50093, or a successor statute. (d) These three (3) Low-Income Restricted Units shall only be sold at an "Affordable Housing Cost"to"Low-income Households." (e) "Affordable Housing Cost" shall mean the permitted gross sales price of the Restricted Unit as set forth in the Affordable Housing Price/Income Guidelines or successor guidelines published, from time to time, by the City for such purpose. (f) The term of this Agreement shall commence on the date of the initial sale of each Restricted Unit to a qualifying purchaser as evidenced by a deed recorded with the Orange County Recorder's Office and shall continue for sixty years from said date ("Affordability Period"). The covenant contained in this Section 1 shall run with the Restricted Unit and shall automatically terminate and be of no further force or effect upon the expiration of the Affordability Period. (g) Purchasers of the Restricted Units identified above shall enter into a promissory note and deed of trust in the forms attached hereto as Exhibit"C". 2. Transfer of Restricted Unit; Consent of Agency. During the Affordability Period no transfer of a Restricted Unit shall occur until the City determines: (a) that the proposed purchaser intends to occupy the Restricted Unit as the proposed purchaser's principal residence, T:\FILES\WP51\DLB\PAC SHORESWFFORDABLE HOUSING CC&R'S.DOC 07/13/10 2 (b) that the proposed purchaser is a "Low", or "Median" Income Household as provided in Section 1 above, and (c) that the proposed transfer occurs at an Affordable Housing Cost. (d) The Restricted Units shall be constructed prior to or concurrent with the primary Project. (e) In the event that the Covenantor (including successors and assigns) desires to sell the Restricted Unit, Covenantor shall send written notice thereof to the City at the following address: City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attention: Director of Economic Development Within seven (7) days of receiving such notice, the City shall send Covenantor transfer application forms prepared by the City. Such forms shall contain a certification of the proposed purchaser's intent with respect to his/her/its residency of the Restricted Unit and his/her/its gross income, and an affidavit of the proposed purchaser disclosing and certifying the amount of the proposed purchase price. The City shall not be obligated to approve a transfer unless and until the proposed purchaser has submitted to the City such information and completed such forms. In the interest of expediting the close of escrow for such proposed transactions, the City shall reasonably approve or disapprove such submissions as soon as practicable after submission of such forms, and in no event later than fourteen (14) days after submission of a completed form. Prior to conveyance of the Restricted Unit, each approved purchaser shall also submit to the City an executed disclosure statement which certifies that the purchaser is aware that: (i) the purchaser buying the Restricted Unit may only sell the Restricted Unit at an Affordable Housing cost to a "Low" or"Median" Income Household as provided in Section 1 above, (ii) the maximum permitted sales price may be less than fair market value and (iii) the Restricted Unit must be owner-occupied at all times and cannot be rented or leased. The approved purchaser shall also submit an executed promissory, trust deed, notice documents, and any other documentation required by the City to effectuate the Affordable Housing Program. Covenantor shall cooperate with the City in providing such forms to proposed purchasers and in assisting proposed purchasers to prepare such forms and to provide any required information to the City in connection with only the Covenantor's sale of the Restricted Unit, provided that the Covenantor shall not be obligated to incur any out-of-pocket costs in connection therewith, other than employee time dedicated to providing such assistance. THE COVENANTOR AND EACH SUCCESSOR, HEIR, OR ASSIGN OR COVENANTOR UNDERSTAND THAT THE DETERMINATION OF THE AFFORDABLE HOUSING COST CAN BE MADE ONLY AT THE TIME OF THE PROPOSED TRANSFER, TAKING INTO CONSIDERATION INTEREST RATES, THE TERMS OF SALE OFFERED TO, AND THE ECONOMIC T:\FILES\WP51\DLB\PAC SHORES\AFFORDABLE HOUSING CCBR'S.DOC 07/13/10 3 _. __ __ __.... . _..... CIRCUMSTANCES OF, THE PROPOSED PURCHASER AND OTHER FACTORS THAT CANNOT BE ACCURATELY PREDICTED, AND THAT THE TRANSFER PRICE PERMITTED HEREUNDER MAY BE LESS THAN THE FAIR MARKET VALUE OF THE PROPERTY AND MAY NOT INCREASE OR DECREASE IN THE SAME MANNER AS OTHER SIMILAR REAL PROPERTY WHICH IS NOT ENCUMBERED BY THIS RESTRICTION. COVENANTOR AND EACH SUCCESSOR, HEIR, OR ASSIGN OF COVENANTOR FURTHER ACKNOWLEDGES THAT AT ALL TIMES IN SETTING THE TRANSFER PRICE, THE PRIMARY OBJECTIVE OF THE CITY AND THIS AGREEMENT IS TO PROVIDE HOUSING TO"LOW' OR "MEDIAN' INCOME HOUSEHOLDS AT AN AFFORDABLE OUSING COST. Covenantor's Initials Covenantor shall include in the escrow instructions and Purchase and Sale Agreements with purchaser a provision which requires each purchaser to record a covenant which will run with the land and bind all successors-in-interest or assignees that will ensure that all subsequent purchasers and occupants qualify as "Low" or"Median" Income Households as applicable. Said covenant shall remain in full force and effect for the Affordability Period as set forth in Section 1. 3. Non-Discrimination Covenants. Covenantor covenants by and for itself,it successors and assigns, and all persons claiming under or though them that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, religion, sex, sexual orientation, creed, ancestry, national or ethnic origin, age, family or marital status, handicap or disability, in the sale, transfer, use, occupancy, tenure or enjoyment of the Restricted Unit, nor shall Covenantor itself or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, subtenants,or vendees in the Restricted Unit. Covenantor and its successors and assigns shall refrain from restricting the sale of the Restricted Unit on the basis of race, color, religion, sex, sexual orientation, creed, ancestry, national or ethnic origin, age, family or marital status, handicap or disability, of any person. All such deeds or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clause: (a) In deeds: "The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through them,that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, religion, sex, sexual orientation, creed, ancestry, national or ethnic origin, age, family or marital status, handicap or disability, in the sale, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee himself or herself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, or vendees in the land herein conveyed. The foregoing covenants shall run with the land." TAFILES\WP51\DLB\PAC SHORES\AFFORDABLE HOUSING CC&R'S.DOC 07/13/10 4 (b) In contracts: "There shall be no discrimination against or segregation of, any person or group of persons on account of race, color, religion, sex, sexual orientation, creed, ancestry, national or ethnic origin, age, family or marital status, handicap or disability, in the sale, transfer, use, occupancy, tenure or enjoyment of the premises, nor shall the transferor himself or herself of any person claiming under or though him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use of occupancy of tenants, subtenants or vendee of the premises." (c) In leases. "The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators, and assignees, and all persons claiming under or though him or her, and this lease is made and accepted upon and subject to the following conditions: "That there shall be no discrimination against or segregation of any person or group of persons on account of race, color, religion, sex, sexual orientation, creed, ancestry, national or ethnic origin, age, family or marital status, handicap or disability, in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the premises herein leased nor shall the lessee himself or herself, or any person claiming under or though him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy of tenants, sublessees, subtenants, or vendees in the premises herein leased." 4. Covenants Do Not Impair Lien. No violation or breach of covenants, conditions, restrictions, provisions or limitations contained in this Agreement shall defeat or render invalid or in any way impair the lien or charge of any mortgage or deed of trust or security interest. 5. Covenants For Benefit of City. All covenants without regard to technical classification or designation shall be binding for the benefit of the Covenantee and such covenants shall run in favor of Covenantee for the entire period during which time such covenants shall be in force and effect, without regard to whether the Covenantee is or remains an owner of any land or interest therein to which such covenants relate. The Covenantee, in the event of any breach of any such covenants, shall have the right to exercise all the rights and remedies and to maintain any such action at law or suits in equity or other proper legal proceedings to enforce and to cure such breach to which it or any other beneficiaries of these covenants may be entitled during the term specified for such covenants, except the covenants against discrimination which may be enforced at law or in equity at any time in perpetuity. 6. Counterparts. This Agreement may be executed in a number of counterparts, each of which shall be an original, but all of which shall constitute one and the same document. T:\FILES\WP51\DLB\PAC SHORES\AFFORDABLE HOUSING CC&R'S.DOC 07/13/10 5 7. Applicable Law. (a) If any provision of this Agreement or portion thereof, or the application of any provision to any person or circumstances, shall to any extent be held invalid, inoperative, or unenforceable, the remainder of this Agreement, or the application of such provision or portion thereof to any other persons or circumstances, shall not be affected thereby and it shall not be deeded that any such invalid provision affects the consideration for this Agreement; and each provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law. (b) This Agreement shall be construed in accordance with the laws of the State of California. [Balance of this page intentionally left blank] TAFILESMP51\DLB\PAC SHORES\AFFORDABLE HOUSING CC&R'S.DOC 07/13/10 6 IN WITNESS WHEREOF, the Covenantee and Covenantor have caused this instrument to be executed on their behalf by their respective officers hereunto duly authorized as of the date set forth above. COVENANTOR: COVENANTEE: RP/PLC BLUE CANVAS, L.L.C., CITY OF HUNTINGTON BEACH a Delaware limited liability company a California municipal corporation By: Mayor Its: �l�i ® � City Clerk THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic COUNTERPART By. Deputy Executive Director APPROVED AS TO FORM: City Attorney/Agency Counsel /old 114(-10 J.1'4. 10 INITIATED AND APPROVED: Planning Director REVIEWED AND APPROVED: City Administrator TAR LES\WP51\DLB\PAC SHORES\AFFORDABLE HOUSING CC&R'S.DOC 07/13/10 7 STATE OF CALIFORNIA ) ) ss. COUNTY OF ORANGE ) On--S;-P,?F tF,e 7 , 2010, before me, Notary Public, personally appeared 2�4-xjIC' y 4J() who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he/site executed the same in his/tier authorized capacity, and that by his/hef signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. [SEAL] Signature PATRICIA ALEXIS HANSON Commission#18ti8030 Notary Public-Camornis Orange County M Comm.Ex pins May 2 2014 STATE OF CALIFORNIA ) ) ss. COUNTY OF ORANGE ) On , 2010, before me, , Notary Public, personally appeared > who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. [SEAL] Signature TAFILES\WP51\DLB\PAC SHORES\AFFORDABLE HOUSING CC&R'S.DOC 07/13/10 8 IN WITNESS WHEREOF, the Covenantee and Covenantor have caused this instrument to be executed on their behalf by their respective officers hereunto duly authorized as of the date set forth above. COVENANTOR: COVENANTEE: RP/PLC BLUE CANVAS, L.L.C., CITY OF HUNTINGTON BEACH a Delaware limited liability company a California municipal corporation By: Mayor Its: I d �C1", Clerk THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic COUNTERPART By: '�7 _Aaotr Deputy xec ive Director APPROVED AS TO FORM: / C y Attorne /Agency Co el jtl ?111-10 INITIAAD A APPROVED: P anirector REVI ND APPROVED: Ci)YA4 nistrator T:\FILES\WP51\DLB\PAC SHORES\AFFORDABLE HOUSING CC&R'S.DOC 07/13/10 7 STATE OF CALIFORNIA } ss. COUNTY OF ORANGE ) On -� 7 2010, before me, Notary Public, personally appeared who proved to me on the basis of satisfactory ev nce to be the person whose name is subscribed to the within instrument and acknowledged to thaoslr&executed the same inehel=authorized capacity, and that by Is lw signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. [SEAL] Signature TERYII L. KING Commission# 1767806 -� Notary Public-California Orange County WCorrMEx#MOct12,2011 a ACKNOWLEDGMENT STATE OF CALIFORNIA ) ) ss COUNTY OF ORANGE ) On October 11, 2010 before me, P. L. Psparza, Notary Public, personally appeared Joan L. Flynn and Cathy Green who proved to me on the basis of satisfactory evidence to be the persons whose names are subscribed to the within instrument and acknowledged to me that they executed the same in their authorized capacities, and that by their signatures on the instrument the persons, or the entity upon behalf of which the persons acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. P L ESPARZA WITNESS my hand and official seal. commission # 1857021 z .`m Notary Public -California z z Orange County My Comm.Expires Au 4,2013 (Seal) otary Signat e) EXHIBIT "A" Legal Description of the Restricted Units All that certain real property in the City of Huntington Beach, County of Orange, State of California, described as follows: Parcel 1: The "Median-Income Households" consisting of: Unit 129, as shown on that certain Condominium Plan Pacific Shores - Phase 1 recorded on 20 , as Instrument No. of Official Records of Orange County, California, covering those portions of Lots 6 and 12 of Tract No. 16733, as per map filed in Book 897, Pages 10 through 14 of Miscellaneous Maps of said County (the "Map") lying within the boundaries of said Condominium Plan. Units 117, 120 and 123 , as shown on that certain Condominium Plan Pacific Shores- Phase 2 recorded on 20 , as Instrument No. of Official Records of Orange County, California, covering portions of Lots 6 and 10 of Tract No. 16733, as per the Map, lying within the boundaries of said Condominium Plan. Unit 156, as shown on that certain Condominium Plan Pacific Shores - Phase 4 recorded on 20 , as Instrument No. of Official Records of Orange County, California, covering portions of Lots 10 and "J" of Tract No. 16733, as per the Map, lying within the boundaries of said Condominium Plan. Units 105 and 114, as shown on that certain Condominium Plan Pacific Shores- Phase 7 recorded on 20`, as Instrument No. of Official Records of Orange County, California, covering Lot 5 of Tract No. 16733, as per the Map, lying within the boundaries of said Condominium Plan. Units 168 and 177,as shown on that certain Condominium Plan Pacific Shores- Phase 9 recorded on 20 , as Instrument No. of Official Records of Orange County, California, covering Lot 9 of Tract No. 16733, as per the Map, lying within the boundaries of said Condominium Plan. Units 93 and 102, as shown on that certain Condominium Plan Pacific Shores- Phase 11 recorded on 20�, as Instrument No. of Official Records of Orange County, California, covering Lot 4 of Tract No. 16733, as per the Map, lying within the boundaries of said Condominium Plan. Units 180 and 189, as shown on that certain Condominium Plan Pacific Shores- Phase 13 recorded on 20_, as Instrument No. of Official Records of Orange County,California, covering Lot 8 of Tract No. 16733, as per the Map, lying within the boundaries of said Condominium Plan. T:\FILES\WP51\DLB\PAC SHORES\AFFORDABLE HOUSING CC&R'S.DOC 07/13/10 Page 1 of 2 Pages Unit 84, as shown on that certain Condominium Plan Pacific Shores - Phase 16 recorded on 20_, as Instrument No. of Official Records of Orange County, California, covering Lot 3 of Tract No. 16733, as per the Map, lying within the boundaries of said Condominium Plan. Units 192 and 201, as shown on that certain Condominium Plan Pacific Shores- Phase 18 recorded on 20 , as Instrument No. of Official Records of Orange County, California, covering Lot 7 of Tract No. 16733, as per the Map, lying within the boundaries of said Condominium Plan. Units 147 and 150, as shown on that certain Condominium Plan Pacific Shores- Phase 19 recorded on 20 , as Instrument No. of Official Records of Orange County, California, covering portions of Lots 11 and 12 of Tract No. 16733, as per the Map, lying within the boundaries of said Condominium Plan. Parcel. 2: The "Low-Income Households" consisting of: Unit 159, as shown on that certain Condominium Plan Pacific Shores - Phase 4 recorded on 20_, as Instrument No. of Official Records of Orange County, California, covering portions of Lots 10 and "J" of Tract No. 16733, as per the Map, lying within the boundaries of said Condominium Plan. Unit 87, as shown on that certain Condominium Plan Pacific Shores- Phase 16 recorded on 20 , as Instrument No. of Official Records of Orange County, California, covering Lot 3 of Tract No. 16733, as per the Map, lying within the boundaries of said Condominium Plan. Unit 144, as shown on that certain Condominium Plan Pacific Shores- Phase 19 recorded on 20_, as Instrument No. of Official Records of Orange County, California, covering portions of Lots 11 and 12 of Tract No. 16733, as per the Map, lying within the boundaries of said Condominium Plan. T:\FILES\WP51\DLB\PAC SHORES\AFFORDABLE HOUSING CC&R'S.DOC 07/13/10 Page 2 of 2 Pages n� EXHIBIT "B" Designation of Median-Income and Low-Income Household Restricted Units Median-Income Household Restricted Units: Those Units more particularly described as Parcel 1 on Exhibit "A" to this Agreement. Low-Income Household Restricted Units: Those Units more particularly described as Parcel 2 on Exhibit "A" to this Agreement. T:\FILES\WP51\DLB\PAC SHORESWFFORDABLE HOUSING CCRR'S.DOC 07/13/10 EXHIBIT "C Promissory Note and Deed of Trust (See Attached) T:\FILES\WP51\DLB\PAC SHORES\AFFORDABLE HOUSING CC&R'S.DOC 07/13/10 t�7 cY PROMISSORY NOTE TO SECURE AFFORDABILITY RESTRICTIONS ON TRANSFER OF PROPERTY THIS PROMISSORY NOTE (the "Note") is dated this day of , 20 between (collectively, "Promissor") and the Redevelopment Agency of the City of Huntington Beach ("Agency")with reference to the following facts: A. This Promissory Note is made in reference to that property in the City of Huntington Beach, County of Orange, State of California, with the street address Huntington Beach, California 92648, and the Assessor's Parcel No. (the"Property"). B. A"Declaration of Conditions, Covenants and Restrictions for Property"was recorded on , 20_, as Instrument Number , in the Office of the County Recorder of the County of Orange, California (the "Resale Restrictions"). Among other things, the Resale Restrictions limit the price that the Property may be sold to an "Affordable Housing Cost"to "Moderate Income Households,"as those terms are defined in the Resale Restrictions, and further defined in the current Affordable Housing Regulations of the City of Huntington Beach and the Agency Deed of Trust referred to below. C. Concurrently with executing this Note, Promissor has executed a Deed of Trust securing and modifying the Resale Restrictions (the "Agency of Deed of Trust"). D. Pursuant to the Resale Restrictions, the City has approved the sale of the Property to Promissor at an Affordable Housing Cost. To insure that any further sale, transfer or assignment of the Property occurs with the City's approval and at an Affordable Housing Cost, the City has required as a condition of the Promissor's purchase of the Property that Promissor execute this Note. AGREEMENT NOW, THEREFORE, the parties agree as follows: 1. Incorporation of Recitals. The recitals set forth above are incorporated by reference as though fully set forth herein. 2. Amount of the Note. The Amount of this Note is the "Transfer Price" of the Property, less the "Affordable Housing Cost." The Transfer Price shall be determined according to the circumstances that cause the Amount of the Note to become due pursuant to Section 3 of this Note. In the case of the sale of the Property without the City's consent, the Transfer Price shall be the market sales price. In the case of the financing or refinancing of the Property without the City's consent, the Transfer Price shall be the loan amount in excess of the last loan balance on the First Mortgage that the City previously approved. In all other cases, the Transfer Price shall be the fair market value of the Property as established by the Director of Economic Development of the City pursuant to an appraisal. The term "Affordable Housing Cost"shall be defined according to the current Affordable Housing Regulations as adopted by the City of Huntington Beach. TAFILES\WP51\DLB\PAC SHRS\AFFORD PN.DOC 07/13/10 Page 1 of 3 Promissor promises to pay the Amount of this Note when due to the Redevelopment Agency at 2000 Main Street, P.O. Box 190, Huntington Beach, California 92648, or at such other address as Agency may direct from time to time in writing. All sums hereunder shall be payable in lawful money of the United States of America and all sums shall be credited first to interest then due and the balance to principal. 3. Due on Sale, Transfer or Refinancing. Promissor agrees to notify the Agency not less than thirty (30) days prior to (i)the sale or transfer of the Property or(ii) any financing or refinancing of the Property. This Note shall be due and payable upon (i) such sale or transfer without the City's consent, (ii)the financing or refinancing of the Property without the City's consent, (iii) Promissor is no longer an occupant of the Property, or(iv) Promissor is in material default of any other obligation under the Resale Restrictions, or the Agency Deed of Trust. 4. Expiration of the Note Obligation. In the event Promissor does not sell or transfer the Property, does not fail to occupy the Property, does not refinance, or is not in material breach of any other provision of the Resale Restrictions or the Agency Deed of Trust before the Thirtieth anniversary of the date of this Note, Promissor shall have no obligation to pay the Note Amount to Agency upon later sale, transfer or refinancing of the Property. 5. Default. The entire unpaid Amount of this Note shall be due and payable in full in the event of a default. a. Events of Default. The following shall be deemed to be an event of default: i. Failure of Promissor to pay any real property taxes or insurance premiums on the Property as they become due; or ii. Any material breach of the Resale Restrictions or the Agency Deed of Trust, following the Agency giving notice of the breach and an opportunity to cure; or iii. Failure of Promissor to pay the Note Amount when due. 6. This Note is secured by a Deed of Trust, dated to the City of Huntington Beach, as Trustee, executed by Promissor in favor of the Agency. 7. Notice. All payments, notices, consents, waivers and other communications under this Agreement must be in writing and shall be deemed to have been given when (a) delivered by hand, or, (b)when received by the addressee, if sent by a nationally recognized overnight delivery service (receipt requested), in each case addressed as set forth below: If to PROMISSOR: Huntington Beach, CA 92648 If to AGENCY: Redevelopment Agency of the City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attention: City Clerk T:\FILES\WP51\DLB\PAC SHRS\AFFORD PN.DOC 07/13/10 Page 2 of 3 and, Economic Development Director Redevelopment Agency of the City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 8. Governing Law. This Agreement is governed by and shall be construed in accordance with the laws of the State of California without giving effect to the conflict of laws principles thereof. The parties agree to personal jurisdiction in the State Courts in Orange County, California and specifically waive any claims of forum non conviens. 9. Modification. This Agreement shall not be amended or modified, except in writing, signed by both parties. 10. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the successors and assigns under this Note. This Note shall not be assigned without the express written consent of Agency. Dated: 20 T:\FILES\WP51\DLB\PAC SHRS\AFFORD PN.DOC 07/13/10 Page 3 of 3 r OFFICIAL BUSINESS ) Document entitled to free recording per Government ) Code Sections 6103 and 27383 ) Recording Requested By: } } Redevelopment Agency of the City of Huntington Beach ) 2000 Main Street ) Huntington Beach, California 92648 } Attn: Economic Development Dept./Housing Division ) SPACE ABOVE THIS LINE FOR RECORDER'S USE DEED OF TRUST WITH ASSIGNMENTS OF RENTS TO SECURE AFFORDABILITY RESTRICTIONS ON TRANSFER OF PROPERTY THIS DEED OF TRUST is made this day of 20_, by and between whose address is Huntington Beach, California 92648 (collectively, the "Trustor") and the CITY OF HUNTINGTON BEACH, a municipal corporation (the "Trustee"), and the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic (the "Beneficiary"), whose address is 2000 Main Street, Huntington Beach, California 92648, with reference to the following facts: A. This Deed of Trust is made in reference to that property in the City of Huntington Beach, County of Orange, State of California, described legally in the Legal Description attached hereto as Exhibit,"A" and incorporated herein with the street address Huntington Beach, California 92648 and the Assessor's Parcel No. (the "Property"). B. An "Agreement Declaring Conditions, Covenants and Restrictions for Property" was recorded on , 20_, as Instrument Number , in the Office of the County Recorder of the County of Orange, California (the "Resale Restrictions"). Among other things, the Resale Restrictions limit the price that the Property may be sold to an "Affordable Housing Cost"to "Moderate Income Households," as those terms are defined in the Resale Restrictions, and further defined in the current affordable housing regulations of the City of Huntington Beach and this Deed of Trust. C. Pursuant to this Deed of Trust. the Resale Restrictions as applied to the Property are extended to expire sixty (60)years from the date this Deed of Trust is recorded (the "Expiration Date"), which date is approximately 20_ NOW, THEREFORE, TRUSTOR HEREBY irrevocably grants, transfers and assigns, to Trustee, in trust, with power of sale of the Property, together with (a) all buildings, improvements and fixtures, now or hereafter placed thereon, it being understood and agreed that all classes of property attached or unattached used in connection herewith shall be deemed fixtures, (b) rents, TAFILES\WP51\DLB\PAC SHRS\AFFORD TD.DOC 07/13/10 1 issues and profits thereof, (c) any water rights and/or stock are appurtenant or pertain to said land, and (d) all sums of money payable on the purchase price of the Property secured by a lien thereon or payable under any agreement for the sale thereof, SUBJECT, HOWEVER, to the right, power and authority hereinafter given to and conferred upon Beneficiary to collect and apply such rents, issues and profits, and all sums of money payable on the purchase price of the Property secured by a lien thereon or payable under any agreement. A. FOR THE PURPOSE OF SECURING: 1. Payment of the indebtedness evidenced by a promissory note-executed by Trustor on , 20 (the "Note"). The Amount of the indebtedness is the "Transfer Price" of the Property, less the "Affordable Housing Cost."The calculation of the Amount of the indebtedness is set forth with specificity in the Note, which is on file with the Economic Development Department of the City of Huntington Beach. 2. Performance of each and every obligation, covenant, promise and agreement of the Resale Restrictions, as amended by this Deed of Trust. B. TO PROTECT THE SECURITY OF THIS DEED OF TRUST, TRUSTOR AGREES: 1. Trustor agrees for itself, and its successors and assigns, and every successor to Trustor's interest in the Property, or any part thereof that for sixty (60) years from the date this Deed of Trust is recorded (the "Expiration Date"), to perform all obligations due under the Resale Restrictions, as those obligations are restated and modified as set forth below: (a) The Property shall only be owned and occupied by persons or families of "Moderate Income." "Moderate Income" shall mean persons or families earning one hundred twenty percent (120%) or less of Orange County median income, adjusted for appropriate family size. (b) The Property may only be sold at an "Affordable Housing Cost"to households of"Moderate Income," as those terms are defined in current Affordable Housing Regulations as adopted by the City of Huntington Beach. Generally, those Regulations define Affordable Housing Cost to mean that purchase price which would result in monthly housing payments which do not exceed Thirty-Five Percent (35%) of One Hundred Twenty Percent (120%) of the current Orange County monthly median income for a household equal to the number of bedrooms in the unit plus one (1) person. In determining monthly housing payments, the City will assume principal and interest payments on a conventional home mortgage after paying a ten percent (10%) down payment. The mortgage interest rate will be the prevailing Fannie Mae thirty (30) year mortgage rate, or a City-selected equivalent. Monthly housing costs will also include homeowner's association dues, utilities, homeowner's insurance, maintenance costs and property taxes. (c) The Trustor shall further comply with the Affordable Housing Guidelines promulgated by the City for purposes of administering the Affordable Housing Program of the City of Huntington Beach. T:\FILE\WP5 I\DLB\PAC SHRS\AFFORD TD.DOC 07/13/10 2 (d) No transfer of the Property shall occur until the City of Huntington Beach determines (a) that the proposed purchaser intends to occupy the Property as the proposed purchaser's principal residence, (b) that the proposed purchaser is a person or family of Moderate Income, (c) that the proposed transfer occurs at an Affordable Housing Cost. The City of Huntington Beach shall not be obligated to approve a transfer until and unless the proposed purchaser has submitted to the City of Huntington Beach such information and completed such forms as the City of Huntington Beach shall request to certify the proposed purchaser's intent with respect to its residency of the Property and its gross income, and the proposed purchaser has submitted an affidavit disclosing and certifying the amount of the proposed purchase price. Prior to conveyance of the Property, each approved purchaser shall submit to the City of Huntington Beach an executed disclosure statement which certifies that the purchaser is aware that the purchaser may only sell the unit at an Affordable Housing Cost to a Moderate Income person or family, that the maximum permitted sales price may be less than fair market value and that the unit must be owner-occupied at all times and cannot be rented or leased. TRUSTOR AND EACH SUCCESSOR, HEIR OR ASSIGN OF TRUSTOR UNDERSTANDS THAT THE DETERMINATION OF THE AFFORDABLE HOUSING COST CAN BE MADE ONLY AT THE TIME OF THE PROPOSED TRANSFER, TAKING INTO CONSIDERATION INTEREST RATES, THE TERMS OF SALE OFFERED TO AND THE ECONOMIC CIRCUMSTANCES OF THE PROPOSED PURCHASER AND OTHER FACTORS THAT CANNOT BE ACCURATELY PREDICTED, AND THAT THE TRANSFER PRICE PERMITTED HEREUNDER MAY BE LESS THAN THE FAIR MARKET VALUE OF THE PROPERTY AND MAY NOT INCREASE OR DECREASE IN THE SAME MANNER AS OTHER SIMILAR REAL PROPERTY WHICH IS NOT ENCUMBERED BY THIS RESTRICTION. TRUSTOR AND EACH SUCCESSOR, HEIR OR ASSIGN OF TRUSTOR FURTHER ACKNOWLEDGES THAT AT ALL TIMES IN SETTING THE TRANSFER PRICE THE PRIMARY OBJECTIVE OF THE BENEFICIARY AND THIS DEED OF TRUST IS TO PROVIDE HOUSING TO ELIGIBLE PERSONS OR FAMILIES AT AN AFFORDABLE HOUSING COST. Trustor Initials Trustor Initials (e) The City of Huntington Beach may impose any conditions on the approval of any transfer of the Property as it determines are reasonably necessary for the effective administration of its Affordable Housing Program. Such conditions may include, but are not limited to, requiring as a condition of the Property transfer that the buyer agrees to extend the Resale Restrictions for a new, sixty (60) year term. (f) The Covenants contained in this Section I shall run with the land and shall automatically terminate and be of no further force or effect sixty (60)years from the TAFILES\WP51\DLB\PAC SHRS\AFFORD TD.DOC 07/13/10 3 date this Deed of Trust is recorded, which date is approximately , 2070, unless further extended as a condition of transfer of the Property. By executing this Deed of Trust, the Trustor is extending the term of the Resale Restrictions. 2. Trustor covenants by and for itself, its successors and assigns, and all persons claiming under or through them that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the said property, nor shall Trustor itself or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in said property. Trustor and its successors and assigns, shall refrain from restricting the rental or lease (if permitted by Trustor) or sale of said property on the basis of race, color, religion, sex, marital status, national origin or ancestry of any person. All such deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: (a) In deeds: "The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee himself or herself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessee or vendees in the land herein conveyed. The foregoing covenants shall run with the land." (b) In leases: "The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through him or her,. and this lease is made and accepted upon and subject to the following conditions: "There shall be no discrimination against or segregation of any person or group of persons on account of race, color, religion, sex, marital status, ancestry or national origin in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the premises herein leased nor shall the lessee himself or herself, or any person claiming under to through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sublessees, subtenants or vendees in the premises herein leased." (c) In contracts: 'There shall be no discrimination against or segregation of, any person, or group of persons on account of race, color, religion, sex, marital status, ancestry or national origin, in the sale, lease, sublease, transfer, use, occupancy, tenure or T:\FILES\WP51\DLB\PAC SHRS\AFFORD TD.DOC 07/13/10 4 enjoyment of the premises, nor shall the transferee himself or herself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessee or vendees of the premises." Nothing in this Section 2 shall be construed to authorize the rental or lease of the Property if such rental or lease is not otherwise permitted. The covenants in this paragraph shall run with the land in perpetuity. 3. No violation or breach of the covenants, conditions, restrictions, provisions or limitations contained in this Deed of Trust shall defeat or render invalid or in any way impair the lien or charge of any mortgage or deed of trust or security interest. 4. Trustor has made certain representations and disclosures as a requirement under the Resale Restrictions in order to induce Beneficiary to approve the sale of the Property to Trustor. In the event that Trustor has made any material misrepresentation or failed to disclose any material fact regarding said transaction, Beneficiary at its option and without notice, shall have the right to declare a material breach of the Resale Restrictions and the Note. Beneficiary may make a written declaration of default and demand for sale as in paragraph No. 6 herein set forth. Trustee, upon presentation to it of an affidavit signed by Beneficiary setting forth facts showing a default by Trustor under this paragraph, is authorized to accept as true and conclusive all facts and statements therein, and to act thereon hereunder. 5. All covenants without regard to technical classification or designation shall be binding for the benefit of the Beneficiary and such covenants shall run in favor of the Beneficiary for the entire period during which such covenants shall be in force and effect, without regard to whether the Beneficiary is or remains an owner of any land or interest therein to which such covenants relate. The Beneficiary, in the event of any breach of any such covenants, shall have the right to exercise all the rights and remedies and to maintain any action at law or suits in equity or other proper legal proceedings to enforce and to cure such breach to which it or any other beneficiaries of these covenants may be entitled during the term specified for such covenants, except the covenants against discrimination which may be enforced at law or in equity at any time in perpetuity. 6. Upon default by Trustor in the obligations of the Note, in the performance of any obligation under this Deed of Trust or under the terms of any First Lender's Deed of Trust which is or appears to be prior or superior to this Deed of Trust, Beneficiary may declare all sums secured by this Deed of Trust immediately due and payable by delivering to Trustee of a written declaration of default and demand for sale and a written notice of default and election to sell the Property. Default in the payment of any indebtedness secured by this Deed of Trust, in the obligation of the Note, or in the performance of any agreement under this Deed of Trust constitutes a default only under this Deed of Trust and the Note and does not constitute a default under the First Deed of Trust. Trustee shall cause the notice of default to be recorded. Beneficiary also shall deposit with Trustee this Deed of Trust, the Note, and all documents evidencing any additional expenditures secured by this Deed of Trust. After the lapse of such time as then may be required by law following recordation of such notice of default, and notice of sale having been given as then required by law, Trustee, without demand on Trustor, shall sell T:\FILES\WP51\DLB\PAC SHRS\AFFORD TD.DOC 07/13/10 5 the Property at the time and place fixed by it in such notice of sale, whether as a whole or in separate parcels, and in such order as it may determine, at public auction to the highest bidder qualified under the Resale Restrictions and this Deed of Trust in lawful money of the United States, payable at time of sale. Trustee may postpone sale of all or any portion of the Property by public announcement at such time and place of sale, and from time to time thereafter may postpone such sale by public announcement at the time fixed by the preceding postponement. Trustee shall deliver to such purchaser its Deed conveying the Property so sold, but without any covenant or warranty, express or implied. The recital in such Deed of any matters of fact shall be conclusive of the truthfulness thereof. Any person, including Trustor, Trustee, or Beneficiary as hereinafter defined, may purchase at such sale. Trustee may also sell at any such sale and as part thereof any shares of corporate stock securing the obligations secured hereby, and Trustor waives demand and notice of such sale. (Beneficiary at its option may also foreclose on such shares by independent pledge sale, and Trustor waives demand and notice of such sale.) After deducting all costs, fees and expenses of Trustee, and of this Trust, including cost of evidence of title in connection with this sale, Trustee shall apply the proceeds of sale to payment, first; all sums expended under the teams hereof, not then repaid, with accrued interest at the rate then payable under the First Lender Deed of Trust secured hereby, and then of all other sums secured hereby, and, if there are any proceeds remaining, shall distribute them to the person or persons legally entitled thereto. 7. Trustor shall keep the Property in good condition and repair; to allow Beneficiary or its representatives to enter and inspect the Property at all reasonable times and access thereto, shall be permitted for that purpose; not to remove or demolish any building thereon; not to make alterations thereto without the consent of the Beneficiary; to suffer or permit no change in the general nature of the occupancy of the Property without Beneficiary's written consent; to complete or restore promptly and in good workmanlike manner any building which may be constructed, damaged or destroyed thereon, including, without restricting the generality of the foregoing, damage from termites and dry-rot; to pay when due all claims for labor performed and materials furnished in connection with the Property and not to permit any mechanic's lien against the Property; to comply with all laws affecting the Property or requiring any alterations or improvements to be made thereon; not to initiate or acquiesce in any zoning reclassification without Beneficiary's written consent; not to commit or permit waste thereon; not to commit, suffer or permit any act upon the Property in violation of the law; to paint, cultivate, irrigate, fertilize, fumigate, prune, and do all other acts that from the character or use of the Property may be reasonably necessary; and to promptly pay all amounts due others upon agreements of lease or conditional sale of all fixtures, furnishings and equipment located thereon. 8. Trustor shall provide, and maintain in force at all times with respect to the Property, fire and other types of insurance as may be required by Beneficiary. All of such insurance shall have a loss payable endorsement in favor of.Beneficiary, shall be for a term and in form, content, amount and in such companies as may be satisfactory to Beneficiary, and the policies therefore shall be delivered to and remain in possession of Beneficiary as further security for the faithful performance of these trusts. At least thirty (30) days prior to the expiration of any such insurance policy, a policy or policies renewing or extending such expiring insurance shall be delivered to Beneficiary together with written evidence showing payment of the premium therefore and, in the event any such insurance policy and evidence of T:\FILES\WP51\DLB\PAC SHRS\AFFORD TD.DOC 07/13/10 6 the payment of the premium therefore are not so delivered by Trustor to Beneficiary, Trustor by executing this Deed of Trust specifically requests Beneficiary to obtain such insurance and Beneficiary, without obligation to do so, without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof, may obtain such insurance through or from any insurance agency or company acceptable to it, pay the premium thereof, and may add the amount thereof to the indebtedness secured hereby, which amount shall bear a like rate of interest. Beneficiary may furnish to any insurance agency or company, or any other person, any information contained in or extracted from any insurance policy delivered to Beneficiary pursuant hereto and any information concerning the loan secured hereby. Neither Trustee nor Beneficiary shall be responsible for such insurance or for the collection of any insurance monies, or for any insolvency of any insurer or insurance underwriter. In case of insurance loss, Beneficiary is hereby authorized either (a) to settle and adjust any claim under the insurance policies provided for in this document without the consent of the Trustor, or (b) to allow Trustor to agree with the insurance company or companies on the amount to be paid upon the loss. In either case, the Beneficiary is authorized to collect and make receipt of any such insurance money. If Trustor is obligated to restore or replace the damaged or destroyed buildings or improvements under the terms of any lease or leases which are or may be prior to the lien of this Deed of Trust and such damage or destruction does not result in cancellation or termination of such lease, such proceeds, after deducting therefrom any expenses incurred in the collection thereof, shall be used to reimburse the Trustor for the cost of rebuilding or restoring the buildings or improvements on said premises. In all other cases, such insurance proceeds shall either be applied for the cost of the rebuilding or restoring the buildings or improvements on said premises. Such buildings and improvements shall be so restored or rebuilt as to be of at least equal value and substantially the same character as prior to the damage or destruction, and shall be in a condition satisfactory to Beneficiary. Such application or release shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. Any and all unexpired insurance shall inure to the benefit of, and pass to the purchaser of, the property conveyed at any Trustee sale held hereunder. 9. Trustor shall pay: (a) at least ten (10) days before delinquency, all general and special City and County taxes, and all assessments on appurtenant water stock, affecting the Property, (b)when done, all special assessments for public improvements, without permitting any improvement bond to issue for any special assessment, (c)when done, all encumbrances, charges and lines, with interest, on the Property, or any part thereof, which are or appears to be prior to superior hereto, (d) if the security of this Deed of Trust is leasehold estate, to make any payment or do any act required of the Lessee or its successor in interest under the terms of the instrument or instruments creating said leasehold, (e) all costs, fees and expenses of this trust, (f) for any statement regarding the obligation secured hereby any amount demanded by Beneficiary not to exceed the maximum allowed by law thereof at the time when such request is made, (g) such other charges for services rendered by Beneficiary and furnished at Trustor's request or that of any successor in interest to Trustor as the Beneficiary may deem reasonable. 10. Should Trustor fail to make any payment or do any act as provided in this Deed of Trust, the Beneficiary or Trustee, but without obligation to do so and without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof, may (a) make or do the same in such manner and to such extent as either may deem necessary to protect the security hereof, Beneficiary or Trustee being authorized to enter upon the Property for such purposes, (b) TAFILES\WP51\DLB\PAC SHRS\AFFORD TD.DOC 07/13/10 7 commence, appear in, or defend any action or proceeding purporting to affect the security hereof or the property covered by this Deed of Trust, or the rights or powers of Beneficiary or Trustee, (c) pay, purchase, contest or compromise any encumbrance, charge or lien, which in the judgment of either is or appears to be prior or superior hereto, and (d) in exercising any such powers, pay necessary expenses, employ counsel and pay his reasonable fees. Trustor agrees to repay any amount so expended on demand of Beneficiary, and any amount so expended may be added by Beneficiary to the indebtedness secured hereby and shall bear a like rate of interest. 11. Trustor shall appear in and defend any action or proceeding purporting to affect the security hereof or the Property which is covered by this Deed of Trust, or the rights or powers of Beneficiary or Trustee, and whether or not Trustor so appears or defends, to pay all costs and expenses, including cost of evidence of title and attorney's fees in a reasonable sum, in any such action or proceeding in which Beneficiary or Trustee may appear by virtue of being made a party defendant or otherwise irrespective of whether the interest of Beneficiary or Trustee in the Property is directly questioned by such action, including any action for the condemnation or partition of said premises, and in any suit brought by Beneficiary to foreclose this Deed of Trust. 12. Trustor shall pay immediately and without demand, all sums expended under the terms of this Deed of Trust by Beneficiary or Trustee, with interest from the date of expenditure at the rate which the principal obligation secured hereby bears at the time such payment is made, and the repayment of such sums shall be secured hereby. 13. Should Trustor or any successor in interest to Trustor in the Property drill or extract, or enter into a lease for drilling or extraction of oil, gas or other hydrocarbon substances or any mineral of any kind or character, or sell, convey, further encumber, or alienate the Property, or any party thereof, or any interest therein, or be divested of his title or any interest therein in any manner or way, whether voluntarily or involuntarily, Beneficiary shall have the right, at its option, to declare any obligations secured hereby irrespective of the maturity date specified in any Note evidencing the same, immediately due and payable, and no waiver of this right shall be effective unless in writing. 14. Any award, settlement or damages for injury or damages to the Property, or in construction with the transaction financed by such loan, and any award of damages in connection with any condemnation for public use of or injury to the Property, or any part thereof, is hereby assigned and shall be paid to Beneficiary, who may apply or release such monies received by it in such manner and with the same effect as above provided for the disposition of proceeds of fire or other insurance. 15. By accepting payment of any sums secured by this Deed of Trust after its due date, or by making any payment, performing any act on behalf of Trustor, that Trustor was obligated hereunder, but failed, to make, or perform, or by adding any payment so made by Beneficiary to the indebtedness secured hereby, Beneficiary does not waive its right either to require prompt payment when due of all other sums so secured or to declare a default for failure so to pay. 16. At any time, or from time to time, without liability of the Beneficiary or Trustee thereof, and without notice, upon written request of Beneficiary and presentation of this Deed of T:\FILES\WP51\DLB\PAC SHRS\AFFORD TD.DOC 07/13/10 8 Trust and the Note secured hereby for endorsement, and without affecting the personal liability of any person for payment of the indebtedness secured hereby, or the lien of the Deed of Trust upon the remainder of the Property for the full amount of the indebtedness then or thereafter secured hereby, or the rights or powers of Beneficiary or the Trustee with respect to the remainder of the Property, Trustee may: (a) reconvey any part of the Property, (b) consent to the making of any map or plat thereof; (c)join in granting any easement thereon, (d)join in any agreement subordinating the lien or charge hereof. 17. The lien hereof shall remain in full force and effect during any postponement or extension of time of payment of the indebtedness secured hereby, or any part thereof. 18. As additional security, Trustor irrevocably assigns to Beneficiary the rents, issues, and profits of the Property for the purposes and upon the terms and conditions set forth below. This assignment shall not impose upon Beneficiary any duty to produce rents from the property affected by this Deed of Trust, or cause Agency to be (a) "mortgages in possession"for any purpose; (b) responsible for performing any of the obligations of the lessor under any lease; or(c) responsible for any waste committed by lessees or any other parties, for any dangerous or defective condition of the property affected by this Deed of Trust, or for any negligence in the management, upkeep, or control of such rights to rents, issues and profits is not contingent upon, and may be exercised without possession of, the property affected by this Deed of Trust. Beneficiary confers upon Trustor a license ("License") to collect and retain the rents, issues and profits of the property affected by this Deed of Trust as they become due and payable, until the occurrence of a default hereunder. Upon such default, the License shall be automatically revoked and Beneficiary may collect and retain the rents, issues and profits without notice and without taking possessions of the property affected by this Deed of Trust. This right to collect rents, issues and profits shall not grant to Beneficiary or Trustee the right to possession, except as otherwise provided herein; and neither said right, nor termination of the License, shall impose upon Beneficiary or Trustee the duty to produce rents, issues or profits or maintain all or any part of the Property affected by this Trust Deed. If Trustor shall default as aforesaid, Trustor's right to collect any such money shall cease and Beneficiary shall have the right, with or without taking possession of the property affected hereby, to collect all rents, issues, royalties and profits and shall be authorized to, and may, without notice and irrespective of whether declaration of default has been delivered to Trustee and without regard to the adequacy of the security for the indebtedness secured hereby, either personally or by attorney or agent without bringing any action or proceeding, or by receiver to be appointed by the Court, enter into possession and hold, occupy, possess and enjoy the Property, make, cancel, enforce and modify leases, obtain and eject tenants, and set and modify rents and terms of rents, and to sue, and to take, receive and collect all or any part of the said rents, issues, and profits of the property affected hereby, and after paying such costs of maintenance, operation of the Property, and of collection including reasonable attorneys' fees, as in its judgment it may deem proper, to apply the balance upon any indebtedness then secured hereby, the rents, issues, royalties and profits of the Property being hereby assigned to Beneficiary for said purposes. The acceptance of such rents, issues, royalties and profits shall not constitute a waiver of any other right which Trustee or Beneficiary may enjoy under this Deed of Trust or under the laws of California. Failure of or discontinuance by Beneficiary at any time, or from time to time, to collect any such rents, issues, royalties or profits shall not T:\FILES\WP51\DLB\PAC SHRS\AFFORD TD.DOC 07/13/10 9 in any manner affect the subsequent enforcement by Beneficiary of the right, power and authority to collect the same. The receipt and application by said Beneficiary of all such rents, issues, royalties and profits pursuant hereto, after execution and delivery of declaration of default and demand for sale as hereinafter provided, or during the pendency of Trustee's sale proceedings hereunder, shall not cure such breach or default nor affect sale proceedings, or any sale made pursuant thereto, but such rents, issues, royalties and profits, less all costs of operation, maintenance, collection and reasonable attorneys' fees, when received by Beneficiary, shall be applied in reduction of the indebtedness secured hereby, from time to time, in such order as Beneficiary may determine. Nothing contained herein, nor the exercise of the right by Beneficiary to collect, shall be, or be construed to be, an affirmation by Beneficiary of any tenancy, lease or option, nor an assumption of liability under, nor subordination of the lien or charge of this Deed of Trust to, any such tenancy, lease or option. 19. If the security of this Deed of Trust is a leasehold estate, the Trustor agrees that: (a)the term "Lease" as used herein shall mean the lease creating the "leasehold estate"' (b) Trustor shall not amend, change or modify his leasehold interest, or the Lease, or agree to do so, without the written consent of the Beneficiary; (c) Trustor will promptly advise Beneficiary regarding any notice, request or demand received by him from the lessor under the Lease and promptly furnish Beneficiary with a copy of any such notice, request or demand; (d) as long as any of the indebtedness secured hereby shall remain unpaid, unless the Beneficiary shall otherwise consent thereto in writing, the leasehold estate shall not merge with the fee title but shall always be kept separate and distinct, notwithstanding the union of said estates in any party; (e) Trustor agrees that it will promptly, strictly, and faithfully perform, fulfill, and comply with all covenants, agreements, terms, conditions and provisions under any lease affecting the premises and to neither do anything, nor to permit anything to be done which may cause modification or termination of any such lease or of the obligations of any lessee or person claiming through such lease or the rents provided for therein or the interest of the lessor or the Beneficiary therein or thereunder. Trustor further agrees he will not execute a Deed of Trust or mortgage which may be or become superior to any leasehold estate that is security for this Deed of Trust. In the event of a violation of any of the covenants set forth in this paragraph, Beneficiary shall have the right, at its option, to declare all sums secured hereby immediately due and payable. Consent to or waiver of one of said violations shall not be deemed to be a consent to or waiver of any other violation. If the security for this Deed of Trust is a leasehold estate, the term "property" as used in this Deed of Trust shall be deemed to mean the leasehold estate whenever the context so requires for the protection of the Beneficiary. 20. Trustor waives, to the fullest extent permissible by law, the right to plead any statute of limitations as a defense to any demand secured hereby. 21. Beneficiary may, from time to time, by instrument in writing, substitute a successor or successors to any Trustee named herein or acting hereunder, which instrument, executed and acknowledged by Beneficiary and recorded in the office of the recorder of the county or counties where the Property is situated, shall be conclusive proof of property substitution of such successor Trustee or Trustees, who shall, without conveyances from the Trustee predecessor, succeed to all its title, estate, rights, powers and duties, including but not limited to the power to reconvey the whole or any part of the property covered by this Deed of Trust. Such instrument must contain the name of the original Trustor, Trustee and Beneficiary hereunder, the book and TAFILES\WP51\DLB\PAC SHRS\AFFORD TD.DOC 07/13/10 10 page where this Deed of Trust is recorded. If notice of default shall have been recorded, this power of substitution cannot be exercised until after the costs, fees and expenses of the then acting Trustee shall have been paid to such Trustee, who shall endorse receipt thereof upon such instrument. The procedures herein provided for substitution of Trustee shall not be exclusive of other provisions for substitution provided by law. 22. This Deed of Trust applies to, inures to the benefit of, and binds all parties hereto, their heirs, legatees, devisees, administrators, executors, successors and assigns. The term "Beneficiary"shall mean the owner and holder, including pledgee, of the Note secured hereby, whether or not names as Beneficiary herein. In this Deed of Trust, whenever the context so requires, the masculine gender includes the feminine and/or neuter, and the singular number includes the plural. 23. That in the event of a demand for, and the preparation and delivery of a written statement regarding the obligations secured by this Deed of Trust pursuant to Sections 2943 and 2954 of the Civil Code of California, Beneficiary shall be entitled to make a reasonable charge, not exceeding the maximum amount which is permitted by law at the time the statement is furnished. Beneficiary may also charge Trustor a reasonable fee for any other services rendered to Trustor or rendered in Trustor's behalf in connection with the Property of this Deed of Trust, including changing Beneficiary's records, pertaining to this Deed of Trust in connection with the transfer of the Property, or releasing an existing policy of fire insurance or other casualty insurance held by Beneficiary and replacing the same with another such policy. 24. Trustee accepts this Trust when this Deed of Trust, duly executed and acknowledged, is made a public record as provided by law. Trustee is not obligated to notify any party hereto of pending sale under any other Deed of Trust or of any action or proceeding in which Trustor, Beneficiary, or Trustee shall be a party unless brought by Trustee. 25. Any notice which any party hereto may desire or be required to give to the other party shall be in writing. The mailing thereof must be certified mail addressed to the Trustor at his address hereinabove set forth or to the Beneficiary at his office or at such other place as such parties hereto may designate in writing. [Balance of this page intentionally left blank] TAFILES\WP51\DLB\PAC SHRS\AFFORD TD.DOC 07/13/10 11 THE UNDERSIGNED TRUSTOR REQUESTS that a copy of any notice of default and of any notice of sale hereunder be mailed to him at his address hereinbefore set forth. TRUSTOR: Dated: , 2010 REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH By: Deputy Executive Director CITY OF HUNTINGTON BEACH By: Director of Economic Development P,R��r� ike Deputy City A TAFILES\WP51\DLB\PAC SHRS\AFFORD TD.DOC 07/13/10 12 Lomond Drive a �: s P s - .i Sage Dni , 'j L. future Park Kendall Drive _ _. _ 1 C n S / 4 -1 o O NoelleDnve n m �R v kin , e .. s of _ N r _ _ - Noelle Drive Pr_.. .I H! Cnak L B ni r1, St 8 n s �l', 8 n s i8 n z W its 4 ita 3 nsts _1 U is _ nit Phase Bungalows Villas Total Affordable Bungalows Models 9 10 22 oed PACIFIC SHORES 2 12 5 17 Total 21 Huntington Beach, CA 3 12 8 20 < 12 8 20 Affordable Unit 5 12 8 20 6 12 8 20 & Phase Map 7 12 8 20 8 12 8 20 10 1s* — 12 -- "Includes Parking Lot Total 123 78 201 a-:o-i. 1