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HomeMy WebLinkAboutHabitat For Humanity of Orange County, Inc. - 2011-09-060 A� naR CITY OF HUNTINGTON BEACH Interdepartmental Memo TO: Joan Flynn, City Clerk FROM: Kellee Fritzal, Deputy Director of Office of Business Development , DATE: February 10, 2016 SUBJECT: Habitat for Humanity Promissory Note 18451 Patterson ` On September 6, 2011, the City Council approved an Affordable Housing Agreement with Habitat for Humanity for the construction of two (2) ownership units There were several documents to be executed and recorded when the first home was sold, including the repayment of $261,604 as stated on a Promissory Note (Attachment 1) executed on February 15, 2012 The first scheduled closing of escrow was the Wear family On March 26, 2015, Denise Bazant sent several City documents to First American Escrow for execution and recording, including the original promissory note made by Habitat for Humanity in favor of the City of Huntington Beach in the amount of $261,604 Unfortunately, the Wear escrow did not close However, the second property purchased by the Guzman family did close on August 18, 2015 where the City was paid in full the promised amount of $261,604 on September 9, 2015 (Attachment 2) The original promissory note that was sent to escrow on March 26, 2015 has been lost Several attempts have been made to secure the original promissory note but to no avail This memo is explaining why the original promissory note is not in the City Clerk's vault However, the intended amount of the Promissory Note has been paid in full Please accept this memo as an explanation as to why the original Promissory Note has not been returned to the City Clerk's office On December 15, 2015, the Wear Family escrow closed The Wear final recorded documents are Attachment 3 As a result of both residential sales, the Habitat of Humanity project file can be closed Attachments 1 Form of Promissory Note Evidencing HOME funds 2 Verification from City Treasurer's Office that funds has been received 3 Wear recorded, closing escrow documents ATTACHMENT #1 R FORM OF PRONUSSORY NOTE EVIDENCING HOME FUNDS 0% Interest $261,604 00 _ �� IS , 2012 Huntington Beach, California FOR VALUE RECEIVED, the undersigned HABITAT FOR MJMANIT'Y OF ORANGE COUNTY, INC., a Cahfornia non-profit public benefit corporation ("Borrower") piomises to pay to the CITY OF HUNTINGTON BEACH, a municipal corporation (the "City") at 2000 Main Street, Huntington Beach, California 92648 Attention Director of Economic Development, or at such other address as the City may direct fiom time -to -tune in writing, the principal sum of TWO HUNDRED SIXTY ONE THOUSAND SIX HUNDRED AND FOUR DOLLARS AND NO CENTS ($261,604 00) (the "Note Amount"), as provided in tlus Piomissory Note Evidencing HOME Funds (the "Note") All sums hereunder shall be payable in lawful money of the United States of America 1. Affordable Housing Property Transfer Agreement This Note is made and delivered in implementation of that certain Affordable Housing Property Transfer Agreement entered into by and between the City and Borrower dated September 6, 2011, as amended by that certain Fust Amendment to the Affoidable Housing Property Transfer Agreement dated Jmwtmy gF6 6 , 2012 (collectively the "Agiieement") copies of which aie on file as public records with the City and are all incorporated herein by reference. The Agreement provides, among other things, for a loan of HOME Funds (as defined below) from City to Bonower to pay Development costs for the Dwelling Units The term "HOME Funds" as used herein shall mean funds in the amount of $748,437 made available to the City by the United States Department of Housing and Urban Development under the HOME Investment Paitnerships Progiam (the "HOME Funds") Puisuant to the Agreement, Borrower is required to repay to the City a portion of the HOME Funds in the Note Amount and at the time set forth herein Any capitalized term not defined helem shall have the meaning ascribed to such term in the Agreement. In connection with the Agreement, the parties hereto executed that certain Declaration of Conditions, Covenants and Restrictions for Property (Resale Restrictions) dated September 29, 2011 and recorded September 29, 2011 as Document No 2011000483564 in the Official Records of the Recorder's Office of Orange County (the " City Regulatory Agreement'). The Agreement, the City Regulatory Agreement and this Note shall be collectively referred to herein as the "City Documents." 2 Interest Rate Except in the Event of a Default hereunder, the entire principal amount of this Piomissory Note Evidencing Home Funds shall not bear any interest Default Interest, if any, shall be payable as provided in Section 4, below. Payment Dates. The entne principal amount of the indebtedness evidenced by this Note, with intetest, shall be all due and payable to the City by Borrowet upon the earlier of (i) one (1) year from the date of this Note set forth above and (ii) the date the close of escrow occurs for the sale of the Dwelling Unit constructed during Phase H to a Qualified Purchaser (the "Maturity Date") The term Qualified Purchasei used heiern shall mean a homebuyer whose family qualifies as a Low Income Household or a Very Low Income Household (as each teim is defined in the Agreement) and the housing must be the principal residence of the family throughout the Affordability Period Applications of Payments; Late Charges. (1) All payments to the City shall be applied first to accrued interest, then to reduce the principal amount owed, (2) If any payment of inteiest and/or principal is not received by the City on the due date thereof, then in addition to the iemedies conferred upon the City pursuant to Section 6 hereof and the other City Documents, a late charge of four percent (4%) of the amount due and unpaid will be added to the delinquent amount to compensate the City for the expense of handling the delinquency. 5. Term of Note. The term of this Note shall commence on the date first stated above and shall terminate upon the Maturity Date, 6. Acceleration. Subject to the notice and cure periods set forth in Section 9 below, the principal amount of this Note shall become immediately due and payable upon the occurrence of any one of the following events prior to the Maturity Date ("Event ofDefaulf'): (a) Failure to make a payment as set forth in Section 3 above, (b) The sale, tiansfer, assignment or other conveyance of the Property, any portion thereof or interest therein, except for a sale of the Dwelling Units to Qualified Puichasers, unless approved in writing by City; or (c) An uncured default in performance or breach by Borrower of any provision of the Agreement, City Regulatory Agreement, or this Note. The City may, in its sole and absolute discretion, waive these requirements and/or defer repayment and/or extend the term of this Note. Any such waiver, deferment or extension must be in writing and signed by the City. Amounts declared due and payable under this Note shall thereafter bear interest at the "Default Interest Rate" (as hereinafter defined) until the Event of Default is cured For purposes of this Note, the "Default Interest Rate" shall be the higher of (1) the interest rate payable hereunder, or (ii) a per annum percentage rate which is five (5) percentage points above the rate 2 on the twenty-fifth (25th) day of the month preceding the date of such Event of Default established by the Federal Reserve Bank of San Francisco on advances to member banks under Sections 13 and 13a of the Federal Reserve Act as now in effect or hereafter from time to time amended, Notwithstanding the foregoing or any other provision of this Note, in no event shall the Default Interest Rate or any other rate of interest under this Note exceed the maximum rate permitted by law; and if such rate of interest, computed in the amount provided for in this Note, should exceed said maximum legal late, then the late of interest shall be automatically reduced to such maximum legal rate The imposition of the Default Interest Rate shall be in addition to and not in lieu of any other rights and remedies provided for by law, The remedies of a holder of this Note as provided herein shall be cumulative and concurrent and may be pursued singularly, successively or together, at the sole discretion of the holder, and may be exercised as often as occasion therefor may arise under the terms of such documents. 7, Prepayment. The Note may be prepaid in whole or in part at any time without a prepayment penalty 8 Nondiscrimination There shall be no discrimination against or segregation of any person, or group of persons, on account of race, color, creed, religion, sex, sexual orientation, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property nor shall Borrower 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 of vendees of the Property 9 Defaults. The City (the "Complaining Party") shall give written notice of an Event of Default to the Bonower specifying in reasonable detail the matter constituting the default If a monetary Event of Default occurs, Borrower shall have a period of ten (10) calendar days after such notice is received of deemed received within which to cure the default prior to the City exercising its remedies. If a non -monetary Event of Default occurs, Borrower shall have thirty (30) calendar days following receipt of notice to cure the default. Except as required to protect against further damages, the Complaining Party shall not institute proceedings against the Borrower unless the matter is not cured within such thirty (30) calendar day penod, or, if the default is of a nature requiring more than thirty (30) calendar days to cure, the Borrower commences to cure the matter within such thirty (30) calendar day period and diligently pursues such cure to completion within a reasonable time, but in no event more than ninety (90) days after notice of default Failure or delay in giving such notice shall not constitute a waiver of any default, nor shall it change the time of default. Failure to cure the default within the applicable cure period shall entitle the Complaining Party to accelerate payment under this Note, and/or exercise any other remedies available to such party. 10. Non -Waiver Failure to exercise or delay in exercising any right the City may have of be entitled to, in an Event of Default hereunder, shall not constitute a waiver of such right or any other right in the event of a subsequent default. 11, Borrower's Waivers, Borrower hereby waives diligence, presentment, protest and demand, notice of protest, dishonor and nonpayment of this Note, and expressly agrees that, without in any way affecting the liability of Borrower hereunder, the City may extend any maturity date or the time for payment of any installment due hereunder, accept additional security, release any party liable hereunder and release any security now or hereafter securing this Note Borrower further waives, to the full extent permitted bylaw, the right to plead any and all statutes of limitations as a defense to any demand on this Note, or on any deed of trust, security agreement, guaranty or other agreement now or hereafter securing this Note. 12, Governing Law This Note shall be governed and interpreted by the internal laws of the State of California. 13. Severability. In the event that any provision or clause of this Note conflicts with applicable law, such conflict will not affect other provisions of this Note which can be given effect without the conflicting provision, and to this end the provisions of the Note are declared to be severable 14 Amendment of Note. No modification, rescission, waiver, release or amendment of any provision of this Note shall be made except by a written agreement executed by Borrower and the duly authorized representative of the City. 15 Assignment by City Permitted. The City may, in its sole and absolute discretion, assign its rights under this Note and/oi its right to receive repayment of the Note Amount without obtaining the consent of Borrower. 16 Assignment by Borrower Prohibited In no event shall Borrower assign or transfer any portion of this Note or any rights herein without the prior express written consent of the City, which consent the City may give or withhold in its sole and absolute discretion This provision shall not affect or drmrmsh the City's right to assign all or any portion of its rights under this Note or to the proceeds of the Note Amount hereunder. 17 Junior Liens. Borrower shall not encumber the Property for the purpose of securing financing either senior or junior in priority or subordinated to this Note without either (i) payment in full of the amounts due hereunder or (y) the prior written approval of the City in its sole and absolute discretion 18 Relationship of Borrower and City. The relationship of Borrower and City pursuant to this Note is that of debtor and creditor and shall not be, or be construed to be a joint venture, equity venture, partnership or other relationship. 19. Notices. (a) Except as otherwise expressly provided in this Note, in every case when, under the provisions of this Note, it shall be necessary or desirable for one party to serve any notice, request, demand, report or other communication on another party, the same shall be in writing and shall not be effective for any purpose unless served (r) personally, (rr) by independent, reputable, overnight commercial courier, or (in) by deposit in the United States mail, postage and fees fully prepaid, registered or certified mail, with return receipt requested, addressed as follows: To Bonower. Habitat for Humanity of Orange County 2200 S Ritchey Street Santa Ana, California 92705 Attention. CEO/Executive Director With a copy to: Jackson Demarco Tidus Peckenpaugh 2030 Main Street Irvine, California 92614 Attention. Ron DeFelice To City- City of Huntington Beach 2000 Main Street Huntington Beach, California 92648 Attention: Director of Economic Development With a copy to Office of the City Attorney City of Huntington Beach 2000 Main Street Huntington Beach, California 92648 Attention City Attorney 20 Attorneys' Fees In the event that any action is instituted to enforce payment or performance under this Note, or otherwise in connection with this Note, the parties agree that the prevailing party shall be reimbursed by the other party for all costs and all attorneys' fees incurred by the prevailing party in such action In addition, Borrower agrees to reimburse the City for reasonable costs of collection, costs, and expenses, and attorneys' fees paid or incurred in connection with the collection or enforcement of this Note, whether or not suit is filed. 21 Captions The captions and headings in this Note are for convenience only and are not to be used to interpret or define the provisions hereof 22 Joint and Several Liability. The undersigned, if more than one, shall be jointly and severally liable hereunder. [Remainder of page intentionally blank] [Signatures on following page] 23 Successors Bound. This Note shall be binding upon the parties hereto and their respective heirs, successors and assigns. BORROWER" HABITAT FOR HUMANITY OF ORANGE COUNTY, INC, a California non-profit public benefit corporation By- „Ay� Name. AR K a a� Its: A ,--/5:1 By. `ze Name: AqMcC cKv R,4 A/P a Its: SR, V. P ATTACHMENT #2 Report Run Date: 09/01/2015 07:50:10AM (PDT) FLedger Date: 09/0112015 Account: ­3419 -DDA-'CrTy OF HUNTINGTON BEACH' BankID: Description -` . ` Item(s) Amount(USD), Current Available Balance - 17,967,23123 Current Ledger Balance 18,051,021.19 Total ACH Credits - 1,077,973.29 Total Credit Amount 28 1,339,577.29 Tctal Debit Amount 4,E75.620.93 Total Incoming Money Transfers 261,604 00 Total Outgoing Money Transfers 3 4,675,620.93 Total Payables 3 4,E75,620.93 Distributed Funds Descrptron Bank Reference Customer Reference 0-Day1-Day 2+13ay Amount (USD); Incoming Money Transfer 20152432422000 150901018244 261,604.00 .00 00 261004.00 MC'NEY TRANSFER / - N T3r-cm �kr n , 'C-a _ - _ _. RDEP.�_. ;3ocs3-ooco .-LE COM_PAN'/ . A"_""N ESCROW _c,Uo'" ACCO[iifT�NG 3coa E PIMA =ENTER. P R.cWAY SCCT_SDFLE AZ FEDWIZE TRFNSFE_. aENDERS REF$: 2C132432422000 WIT ---CC: CUSTCMER TP_LN37EP. IrrR REE4: i=090i0IS244 TIME: 08:03 FCR PMT m0: CITY OF HUNTINGTON REACH CF PAYMENT: 3N-F: 274001341.9 CITY OF HUNTINGTON ]EACH ,COO MAIN ST a HUNTINGTON BEACH, CA 92646-2702 OBI: CENDEJPE Pa -TOFF BB=: 3EGIN,39098,9?1,410,7547389,39075=6 EAID Incoming Money Transfer 1 Iteri Pre -authorized ACH Credit PREAUTHORIZEDACH CREDIT/ PREAuT50RIZED ACH c'RCM:.,--_-_ L 2-Af°?,67 CR___TN?,TOR ID:3522I9078- EDiTRY DESC3IPTT_ON:CCD 9 31 20:1 rA72ENT ID:CAOTRHUNTBEC9 P.EC..=i__I INFCRM2!TICN:HUN1-TNGT0N ENDA 7NFCP.M_a'"=OBi: 444:.,_.,_3 7 Pre -authorized ACH Credit PREAUTHCRIZEDACH CREDIT/ F3CM:�.L3D'r_].ii"' 261,604.00 .00 00 00 .00 261,604.00 .00 16.73 00 .00 .00 30.00 urreor -ay Combination Report Page 1 or 7 09i01/2015 0750:12 A M , FCT) to UnicnSanik ATTACHMENT #3 RecoriJing Requested By: first American Title Subdivision Dept. RECORDING REQUESTED BY AND WHEN RECORDED MAIL City of Huntington Beach ) 2000 Main Street ) Huntington Beach, CA 92648 ) Attn. City Clerk *-�q cq5-2;Q) ) Recorded in Official Records, Orange County Hugh Nguyen, Clerk -Recorder I 1E �IIIIII1 111 11� 11� 111 El EII NO FEE *$ R 0 0 0 8 0 2 5 5 5 9$ 2015000632020 8:00 am 12/15/15 143 404 C16 7 0.00 0 00 0 00 0 00 18 00 0 00 0.00 0 00 T pace above for Recorder's use) his document is exempt from recording fees pursuant to Government Code Section 27383. CERTIFICATE OF COMPLETION FOR CONSTRUCTION AND DEVELOPMENT A. On or about September 6, 2011, the CITY OF HUNTINGTON BEACH, a municipal corporation, hereinafter referred to as "City," entered into an Affordable Housing Property Transfer Agreement (the "Agreement") with HABITAT FOR HUMANITY OF ORANGE COUNTY, INC., a California nonprofit religious corporation (the "Developer"), which Agreement provides, inter alia, for the disposition and development of certain real property (the "Site") situated in the City of Huntington Beach, California, and more particularly described on Exhibit "A" attached hereto and made a part hereof by this reference B. The Agreement provides that the City shall furnish the Developer with a Certificate of Completion for the site upon completion of construction of the improvements ("Improvements") required by the Agreement, which Certificate shall be in such form as to permit it to be recorded in the Recorder's Office of Orange County. r C. The City has conclusively determined that the construction on the Site described hereinabove required by the Agreement and the Grant Deed has been satisfactorily completed NOW, THEREFORE, the parties hereto certify as follows. 1. As provided in the Agreement, the City does hereby certify that the construction of the Improvements on the Site has been fully and satisfactorily performed and completed 2. The conditions and all rights and obligations under the Agreement as pertains to time Improvements are terminated, except as set forth or referenced in the Grant Deed and Memorandum of Agreement referred to in Recital B herein 3. Nothing contained in this instrument shall modify in any other way any other provisions of the Grant Deed or the Memorandum of Agreement. 4. After recordation of this Certificate of Completion, any person or entity then owning or thereafter purchasing, leasing, or otherwise acquiring any interest in the 1 2056-99886\RJD403\1245888 3 3/16/15 Recording Requested By., First American Title Subdivision Dept. RECORDING REQUESTED BY AND WHEN RECORDED MAIL City of Huntington Beach ) 2000 Main Street ) Huntington Beach, CA 9,2648 ) Attn City Clerk #301 tRI,57-o ) space above for tcecorcter's use) This document is exempt from recording fees pursuant to Government Code Section 27383 CERTIFICATE OF COMPLETION FOR CONSTRUCTION AND DEVELOPMENT A On or about September 6, 2011, the CITY OF HUNTINGTON BEACH, a municipal corporation, hereinafter referred to as "City," entered into an Affordable Housing Property Transfer Agreement (the "Agreement") with HABITAT FOR HUMANITY OF ORANGE COUNTY, INC, a California nonprofit religious corporation (the "Developer"), which Agreement provides, inter alga, for the disposition and development of certain real property (the "Site") situated in the City of Huntington Beach, California, and more particularly described on Exhibit "A" attached hereto and made a part hereof by this reference B The Agreement provides that the City shall furnish the Developer with a Certificate of Completion for the site upon completion of construction of the improvements ("Improvements") required by the Agreement, which Certificate shall be in such form as to permit it to be recorded in the Recorder's Office of Orange County C The City has conclusively determined that the construction on the Site described hereinabove required by the Agreement and the Grant Deed has been satisfactorily completed NOW, THEREFORE, the parties hereto certify as follows 1 As provided in the Agreement, the City does hereby certify that the construction of the Improvements on the Site has been fully and satisfactorily performed and completed 2 The conditions and all rights and obligations under the Agreement as pertains to time Improvements are terminated, except as set forth or referenced in the Grant Deed and Memorandum of Agreement referred to in Recital B herein 3 Nothing contained in this instrument shall modify in any other way any other provisions of the Grant Deed or the Memorandum of Agreement 4 After recordation of this Certificate of Completion, any person or entity then owning or thereafter purchasing, leasing, or otherwise acquiring any interest in the 1 2056-99886\RJD403\1245888 3 3/16/15 Improvements will not (because of such ownership, purchase, lease or acquisition) incur any obligation or liability under the Agreement, the Grant Deed or the Memorandum of Agreement, except that such party shall be bound by6 an and all of the covenants, conditions, and restrictions which survive such recordation 5 This Certificate of Completion shall not constitute evidence of compliance with or satisfaction of any obligation of the Developer to any holder of a mortgage, or any insurer of a mortgage securing money loaned to finance the Improvements to the Property, nor any party thereof This Certificate of Completion is not notice of completion as referred to in Section 3093 of the California Civil Code. 6 The Recitals above are incorporated in full as part of the substantive text of this Certificate of Completion Signatures on following page. 2 2056-99886\RJD403\1245888 3 3/16/15 IN WITNESS WHEREOF, City and Habitat have executed this instrument on the day and year set forth in their acknowledgments below "HABITAT" HABITAT FOR HUMANITY OF ORANGE COUNTY, INC, a California nonprofit religious corporation By Linda Shepard, Chief Financial Officer By - i aron Ellis, President and CEO "CITY" CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California 4eA.1- City Manager INITIA D AND PROVED G eAA Director of Economic Development KANE, BALLMER & BERKMAN Special Counsel Susa py 2056-99886\RJD403\1245888 3 3/I6/15 A notary public or other officer completing tlus certificate verifies only the identity of the individual who signed the document to which tlus certificate is attached, and not the truthfulness, accuracy, or validity of that document STATE OF CALIFORNIA COUNTY OF ORANGE , On 201 , before me, �J� v (hereinsertname and title of thdWicer) personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(les), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) 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 4�' I& Signature GERALDINE THEILE Commission #t 2065398 r Notar�EM pblc . Cahforma i County Alb 21, 2018 r (Seal) 2056-99886\RJD403\1245888 3 3/16/15 A notary public or other officer completing this certificate venfies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document STATE OF CALIFORNIA COUNTY OF ORANGE On , 2(\.:�vu, before me, �.e�` Cyr 2 (\ere insert name and tide of the officer) personally appeared f2�� who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument 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 Signature GERALDINE THEILE Commission # 2065398 i 0mvcomm.Ejires Notary Public • CaliforniaOrange County Ma 21, 2018 (Seal) 2056-99886\RJD403\1245888 3 3/16/15 -A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. ACKNOWLEDGMENT STATE OF CALIFORNIA ss COUNTY OF ORANGE On March 25, 2015, before me, P. L. Esparza, Notary Public, personally appeared Fred A. Wilson 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. WITNESS my hand and official seal. otary Signa ) P L ESPARZA Commission 0 2032750 Notary Public - California Orange County amycomm. ires Aug4. 2017 (Seal) EXHIBIT A TO r LEGAL DESCRIPTION, PARCEL NO. 1 Unit 2 (the "Unit") as shown and described in the Condominium Plan for Patterson at Huntington Condominiums (together with any amendments thereto, collectively, the "Plan") covering Parcel 1 of Parcel Map No 2011-104, as such Parcel is shown on the Parcel Map ("Map"), filed in Book 372, at Pages 31-33 of Parcel Maps, in the Office of the Orange County Recorder, recorded on November 2, 2011, as Instrument No 2011000553373 in the Official Records of Orange County, California ("Official Records"), which Plan was recorded in the Official Records on November 18, 2011, as Instrument No 2011000588862, together with an undivided One -Half (1/2) interest as tenant -in -common in the Common Area as shown and described in the Condominium Plan and exclusive easements as are shown as appurtenant to the Unit PARCEL NO.2 An undivided one-half (1/2) fee simple interest as a tenant in common in and to the Common Area described in the Plan PARCEL NO.3 Exclusive easements for the benefit of the Unit appurtenant to Parcel No 1 and Parcel No 2, described above, for porch and yard purposes, over those portions of the Common Area as shown numbered and assigned on the Plan or as described in the Declaration, and internal and external telephone wiring, as installed by Grantor PARCEL NO. 4 Nonexclusive easements for access, drainage, encroachment, maintenance, repair, and for other purposes, all as may be shown on the Plan and the Map, and as described in and as described in the Declaration Exhibit A 2056-99886\RJD403\1245888 3 3/16/15 U � 1/1 16GCORDING REQUESTED BY: Recording Requested By: First American Title Subdivision Dept. AND WHEN RECORDED MAIL TO: City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attn: Director of Economic Development t� 1�qb45-to Recorded in Official Records, Orange County Hugh Nguyen, Clerk -Recorder II II II IIIIII IIIII IIIIIIIIII III 36.00 *$ R 0 0 0 8 0 2 5 5 5 5$ 2015000632016 8:00 am 12/15/15 143 404 NO3 Al2 F14 7 0 00 0.00 0.00 0.00 18.00 0.00 0.00 0 00 NOTICE OF TERMINATION OF OPTION AGREEMENT (18451 Patterson Lane, Unit 102, Huntington Beach, CA 92646) SC,krh1-)1r2( This Notice of Termination of Option Agreement is dated for identification purposes , 2015, and is entered into by the City of Huntington Beach, a California municipal corporation ("City' and Habitat for Humanity of Orange County, Inc.; a California nonprofit religious corporation ("Habitat's. WHEREAS, Habitat is the owner of certain real property located at 18451 Patterson Lane, Unit 102, Huntington Beach, CA 92646, more particularly described on Schedule 1 attached hereto (the "Property"}; and WHEREAS, the Property is subject to that certain Option Agreement (the "Option Agreement's recorded on December 12, 2011, as Instrument No. 2011000647508 in the Official Records of the Recorder of Orange County, California ("Official Records'; and WHEREAS, pursuant to the Option Agreement, Habitat granted an option to purchase the Property under certain circumstances to City; and WHEREAS, Habitat and City desire to terminate the Option Agreement - [CONTINUED ON FOLLOWING PAGE] oc26856v1 2056-998861RJD40311245048 1 3/10/15 Recording Requested By: f First American Title �Subdlvislon Dept. RECORDING REQUESTED BY: AND WHEN RECORDED MAIL TO: City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attn Director of Economic Development a -+ 5-1-C NOTICE OF TERMINATION OF OPTION AGREEMENT (18451 Patterson Lane, Unit 102, Huntington Beach, CA 92646) e--r>,bor21, This Notice of Termination of Option Agreement is dated for identification purposes , 2015, and is entered into by the City of Huntington Beach, a California municipal corporation ("City' and Habitat for Humanity of Orange County, Inc, a California nonprofit religious corporation ("Habitat's WHEREAS, Habitat is the owner of certain real property located at 18451 Patterson Lane, Unit 102, Huntington Beach, CA 92646, more particularly described on Schedule 1 attached hereto (the "Property"), and WHEREAS, the Property is subject to that certain Option Agreement (the "Option Agreement's recorded on December 12, 2011, as Instrument No 2011000647508 in the Official Records of the Recorder of Orange County, California ("Official Records', and WHEREAS, pursuant to the Option Agreement, Habitat granted an option to purchase the Property under certain circumstances to City, and WHEREAS, Habitat and City desire to terminate the Option Agreement [CONTINUED ON FOLLOWING PAGE] oc26856v1 2056-998 MRJD403\ 1245 048 1 3/10/15 NOW, THEREFORE, Habitat and City hereby terminate the Option Agreement As a result hereof, the Option Agreement is of no further force or effect as to, and shall no longer be an encumbrance on, the Property IN WITNESS WHEREOF, City and Habitat have executed this instrument on the day and year set forth in their acknowledgments below "HABITAT" "CITY" HABITAT FOR HUMANITY OF ORANGE COUNTY, CITY OF N TINGTON BEACH, a municipal INC , a California nonprofit religious corporation corporal's `I�,� State of California By ��Z2 Linda Shepard, Chief Financial Officer By a t 60 ) k—l", Sharon Ellis, President and CEO oc26856v1 Manager INITI TED AND PPROVED KTe n9 es Director of Economic Development KANE, BALLMER & BERKMAN Special Counsel 2056-99886\RJD403\1245048 1 3/10/15 SCHEDULE 1 TO NOTICE OF TERMINATION LEGAL DESCRIPTION PARCEL NO. 1 Unit 2 (the "Unit") as shown and described in the Condominium Plan for Patterson at Huntington Condominiums (together with any amendments thereto, collectively, the "Plan") covering Parcel 1 of Parcel Map No 2011-104, as such Parcel is shown on the Parcel Map ("Map"), filed in Book 372, at Pages 31-33 of Parcel Maps, in the Office of the Orange County Recorder, recorded on November 2, 2011, as Instrument No 2011000553373 in the Official Records of Orange County, California ("Official Records"), which Plan was recorded in the Official Records on November 18, 2011, as Instrument No 2011000588862, together with an undivided One -Half (1/2) interest as tenant -in -common in the Common Area as shown and described in the Condominium Plan and exclusive easements as are shown as appurtenant to the Unit RESERVING THEREFROM, for the benefit of Grantor, its successors and assigns, together with the right to grant and transfer all or a portion of same, exclusive and nonexclusive easements for use, access, ingress, egress, encroachment, support, maintenance, drainage, repair, and for other purposes, all as may be shown on the Plan and the Map, and as described in the Declaration of Covenants, Conditions and Restrictions and Reservation of Easements for Patterson at Huntington Condominiums, recorded on November 18, 2011, as Instrument No 201100058862 (the "Seller CC&R's") in Official Records (together with any amendments thereto, collectively, the "Declaration") Unless otherwise defined, capitalized terms used herein shall have the meanings ascribed thereto in the Declaration ALSO RESERVING THEREFROM, for the benefit of Grantor, its successors in interest and assignees, the right to enter the Unit (i) to comply with requirements for the recordation of maps or lot line adjustments in the Properties, (ii) for repair of Improvements in accordance with the provisions of the "Right to Repair Law" at California Civil Code Sections 895 through 945 5, (ni) to accommodate grading or construction activities, (iv) to comply with requirements of applicable governmental agencies, and (v) as may be reasonably necessary to complete Improvements as determined by Grantor in its sole discretion Grantor shall provide reasonable notice to Grantee before such entry If this reservation of right of entry is not complied with by Grantee, Grantor may enforce this right of entry in a court of law Grantee shall be responsible for all damages arising out of such failure to comply, including attorneys' fees and court costs The term of this reservation of right of entry shall automatically expire on the date that is twelve (12) years from the last Close of Escrow for the sale of a Unit in the Properties FURTHER RESERVING THEREFROM, for the benefit of Grantor and its successors and assigns, nonexclusive easements for the installation, maintenance and repair of utilities and related facilities (including, but not limited to, electrical, telephone, cable television, gas, water and sewer lines, utility meters, storm drains) as shown on the Map, or otherwise of record \ 2056-99886TJD403\1245048 I 3/10/15 PARCEL NO.2 An undivided one-half (1/2) fee simple interest as a tenant in common in and to the Common Area described in the Plan. PARCEL NO.3 Exclusive easements for the benefit of the Unit appurtenant to Parcel No 1 and Parcel No 2, described above, for porch and yard purposes, over those portions of the Common Area as shown numbered and assigned on the Plan or as described in the Declaration, and internal and external telephone wiring, as installed by Grantor PARCEL NO.4 Nonexclusive easements for access, drainage, encroachment, maintenance, repair, and for other purposes, all as may be shown on the Plan and the Map, and as described in and as described in the Declaration 2056-99886\RJD403\ 1245048 1 3/10/15 A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document STATE OF CALIFORNIA COUNTY OF ORANGE p Ori\��'l , 20, before me, A1 ` 1 `IUi C-, (here insert name and titl5/o the officer) personally appeared���,(Jc� who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authonzed capacity(>es), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) 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 — S .gnature GERALDINF THEtLF Commission 0 20GS398 Notary Public • California Orange County Comm. E tea 21. 2018 r (Seal) 2 05 6-99886\iU D403 \ 1245 048 1 3/10/15 A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document STATE OF CALIFORNIA COUNTY OF ORANGE On , 20L3before me, k (here insert name and title of the officer) personally appeared '; " \k who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) 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 Signature IltGERAl01NE THEIIE Commission 0 2065398 eNotary PU1111C • Celatornie Orange County Conan Expiram 21, 2018 wwo (Seal) 2056-99886\RJD403\ 1245048 1 3/10/15 A notary public or other officer completing this certificate verifies only the identity 'of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. ACKNOWLEDGMENT STATE OF CALIFORNIA ) ) ss COUNTY OF ORANGE ) On March 25, 2015, before me, P. L. Esparza, Notary Public, personally appeared Fred A. Wilson 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. P L ESPARZA WITNESS m hand d official l. Commission #� 2032750 my anoseaNotary Public - CalHornia Orange County My Comm Expires Ava 4.2017 A� (Seal) (Notary Si at Recording Requested By: First American Title ✓' Subdivision Dept. Recording Requested by I - and When Recorded Return to: City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attention: City Clerk Recorded in Official Records, Orange County Hugh Nguyen, Clerk -Recorder II �1 1II 11� 111 II III II 11I1El 11 i 11 NO FEE *$ R 0 0 0 8 0 2 5 5 6 0$ 2015000632021 8:00 am 12/15/15 143 404 NO3 9 0.0000000000024.00 0.00 0.00 0 00 SPACE ABOVE THIS LINE FOR RECORDER'S USE GOVERNMENT BUSINESS Free Recording Requested (Govt. Code §27383) AMENDED NOTICE OF AFFORDABILITY RESTRICTIONS ON TRANSFER OF PROPERTY NOTICE IS HEREBY GIVEN that pursuant to Health & Safety Code Section 33334.3(f), the CITY OF HUNTINGTON BEACH, a municipal corporation (the "City") is recording this Amended Notice of Affordability Restrictions on Transfer of Property (hereinafter the "Notice") with regard to the property located at 18451 Patterson Lane, Unit No. 102, Huntington Beach, California 92646, and more particularly described in Exhibit "A" attached hereto (the "Property"). This Notice supersedes and replaces in its entirety that certain Notice of Affordability Restrictions on Transfer of Property dated September 23, 2011 and recorded September 29, 2011 as Document No. 2011000484328. The Property is subject to an Addendum executed by City and Robert James Wear ("R. Wear") and Jodi Marie Wear ("J. Wear" and together with R. Wear collectively referred to herein as "Owner") (the "Addendum") attached to that certain Grant Deed to Purchasers conveying the Property to Owner executed by Habitat For Humanity of Orange County, Inc. ("Habitat") (as Grantor) and Owner (as Grantee) recorded concurrently herewith in the Official Records of the County Recorder's Office of Orange County (the "Official Records'), and that certain Notice of Restrictions and Option to Purchase Dwelling Unit executed by City, Owner and Habitat (the "City Restrictions") also recorded concurrently herewith in Page 1 2056-99886\RJD40311245393 2 3/11/15 Recording Requested By: First American Title + Subdivision Dept. Recording Requested by and When Recorded Return to: City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attention: City Clerk SPACE ABOVE THIS LINE FOR RECORDER'S USE GOVERNMENT BUSINESS Free Recording Requested (Govt. Code §27383) AMENDED NOTICE OF AFFORDABILITY RESTRICTIONS ON TRANSFER OF PROPERTY NOTICE IS HEREBY GIVEN that pursuant to Health & Safety Code Section 33334.3(f), the CITY OF HUNTINGTON BEACH, a municipal corporation (the "City") is recording this Amended Notice of Affordability Restrictions on Transfer of Property (hereinafter the "Notice") with regard to the property located at 18451 Patterson Lane, Unit No. 102, Huntington Beach, California 92646, and more particularly described in Exhibit "A" attached hereto (the "Property"). This Notice supersedes and replaces in its entirety that certain Notice of Affordability Restrictions on Transfer of Property dated September 23, 2011 and recorded September 29, 2011 as Document No. 2011000484328. The Property is subject to an Addendum executed by City and Robert James Wear ("R. Wear") and Jodi Marie Wear ("J. Wear" and together with R.' Wear collectively referred to herein as "Owner.") (the "Addendum") attached to that certain Grant Deed to .Purchasers conveying the Property to Owner executed by Habitat For Humanity of Orange County, Inc. ("Habitat") (as Grantor) and Owner (as Grantee) recorded concurrently herewith in the Official Records of the County Recorder's Office of Orange County (the "Official Records'), and that certain Notice of Restrictions and Option to Purchase Dwelling Unit executed by City, Owner and Habitat (the "City Restrictions") also recorded concurrently herewith in Page 1 2056-99886\RJD403\1245393 2 3/11/15 the Official Records, which restrict the use of the Property as follows (any capitalized term not defined herein shall have the meaning ascribed to in the City Restrictions): 1. One (1) four -bedroom unit shall be owned and occupied exclusively by a Low Income Household at an Affordable Purchase Price, in accordance with and as more particularly described in the City Restrictions and the Addendum. 2. Owner shall occupy the Property as his or her or their primary residence, and the Property shall be used as the principal residence of Owner and Owner's household and for no other purpose. The Property shall not be leased or rented by Owner to any person or entity. The maximum occupancy of the Property shall not exceed the maximum occupancy allowed by the Uniform Housing Code. 3. For purposes of the City Restrictions and the Addendum, the following capitalized terms shall have the following meanings: a. "Affordable Purchase Price" shall mean a purchase price for the Property that does not exceed an Affordable Housing Cost b. "Affordable Housing Cost" shall mean as to the initial sale of the Property and any sale of the Property during the first fifteen years of the Affordability Period the lesser of, (i) monthly housing payments as defined by section 6920 of Title 25 of the California Code of Regulations, including payments for principal, interest, mortgage loan insurance fees, property taxes and assessments, fire and casualty insurance, a reasonable utility allowance (unless precluded by Federal requirements) and homeowner association fees, if any, which do not exceed the maximum housing cost allowed for Low Income Households in accordance with Section 50052.5 of the California Health and Safety Code, as may be amended from time to time, and (ii) a purchase price for the type of single family housing that does not Page 2 2056-99886\RJD403\1245393 2 3/11/15 exceed 95 pergent of the median purchase price for the area pursuant to § 92.254 a. 2. ii and iii. of the HOME Regulations as such now exists and as may hereafter be amended. Commencing on the sixteenth year of the Affordability Period, the term "Affordable Housing Cost" shall only have the meaning set forth in clause (i) of the preceding sentence. C. "Low Income Household" shall mean the more restrictive of the following, (i) a Household whose gross income does not exceed the maximum qualifying income for a "lower income household" as defined in Section 50079.5 of Health and Safety Code, and (ii) a Household whose annual gross income does not exceed the maximum qualifying income for "Low-income families" as defined in 24 Code of Federal Regulations (CFR) Part 92, Section 92.2. "Gross income" shall be determined in accordance with Section 6914 of Title 25 of the California Code of Regulations and 24 CFR Part 92, Section 92.203 (b)(2). The affordability restrictions imposed on the Property by the Addendum and the City Restrictions are scheduled to expire on the date that is sixty (60) years after the City issues a permanent certificate of occupancy for the Property. This Notice is recorded for the purpose of providing notice only and it in no way modifies the provisions of the Addendum or the City Restrictions [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] [SIGNATURES ON FOLLOWING PAGE] Page 3 2056-99886\KJD403\1245393 2 3/11/15 CITY OF HUNTINGTON BEACH, a munici al corporation of the State of Calif ja, n Cityyanajer TED APPROVED: Director of Eco mic Development APPROVED KANE, BALLMER & BERKMAN Special Counsel Sus tApy % U HABITAT FOR HUMANITY OF ORANGE COUNTY, INC, a California nonprofit religious corporation By Linda Shepard, Chief Financial Officer By aron Ellis, President / CEO Page 4 2056-99886\RJD403\1245393 2 3/11/15 A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document STATE OF CALIFORNIA COUNTY OF ORANGE On � , 2015, before me, �- ^ (here insert name and title 4the 9fficer) personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) 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 Signature GERALDINE THEME Comm18810n N 2065398 Notary Public • California i Orange County MY Cow E res may 21, 2018 (Seal) 2056-99886\RJD403\1245393 2 3/11/15 A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document STATE OF CALIFORNIA ' 'COUNTY OF ORANGE On �- \ 2015 before m �� n'\���,", 1__�-, r—, , \ (here insert name and title of # o icer) personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) 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 A�� �_ - 4�L Signature rA GERALDINNEE TH EILE Commission # 2065398 I Notary Public-Talitornia i Z a Orange County My Cortm► Ex iron May 21 t (Seal) 2056-99886\RJD403\1245393 2 3/11/15 A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. ACKNOWLEDGMENT STATE OF CALIFORNIA ) ) ss COUNTY OF ORANGE ) On March 25, 2015, before me, P. L. Esparza, Notary Public, personally appeared Fred A. Wilson 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. P L ESPARZA WITNESS my hand and official seal. Commission # 2032750 Z Notary Public - California Orange County My Comm Ex Tres Au 4, 2017 ------------ (Seal) (Notary Signat e) Exhibit A LEGAL DESCRIPTION PARCEL NO. 1 Unit 2 (the "Unit") as shown and described in the Condominium Plan for Patterson at Huntington Condominiums (together with any amendments thereto, collectively, the "Plan") covering Parcel 1 of Parcel Map No 2011-104, as such Parcel is shown on the Parcel Map ("Map"), filed in Book 372, at Pages 31-33 of Parcel Maps, in the Office of the Orange County Recorder, recorded on November 2, 2011, as Instrument No 2011000553373 in the Official Records of Orange County, California ("Official Records"), which Plan was recorded in the Official Records on November 18, 2011, as Instrument No 2011000588862,_together with an undivided One -Half (1/2) interest as tenant -in -common in the Common Area as shown and described in the Condominium Plan and exclusive easements as are shown as appurtenant to the Unit RESERVING THEREFROM, for the benefit of Grantor, its successors and assigns, together with the right to grant and transfer all or a portion of same, exclusive and nonexclusive easements for use, access, ingress, egress, encroachment, support, maintenance, drainage, repair, and for other purposes, all as may be shown on the Plan and the Map, and as described in the Declaration of Covenants, Conditions and Restrictions and Reservation of Easements for Patterson at Huntington Condominiums, recorded on November 18, 2011, as Instrument No 201100058862 (the "Seller CC&Rs ") in Official Records (together with any amendments thereto, collectively, the "Declaration") Unless otherwise defined, capitalized terms used herein shall have the meanings ascribed thereto in the Declaration ALSO RESERVING THEREFROM, for the benefit of Grantor, its successors in interest and assignees, the right to enter the Unit (1) to comply with requirements for the recordation of maps or lot line adjustments in the Properties, (ii) for repair of Improvements in accordance with the provisions,of the "Right to Repair Law" at California Civil Code Sections 895 through 945 5, (iii) to accommodate grading or construction activities, (iv) to comply with requirements of applicable governmental agencies, and (v) as may be reasonably necessary to complete Improvements as determined by Grantor in its sole discretion Grantor shall provide reasonable notice to Grantee before such entry If this reservation of right of entry is not complied with by Grantee, Grantor may enforce this right of entry in a court of law Grantee shall be responsible for all damages arising out of such failure to comply, including attorneys' fees and court costs The term of this reservation of right of entry shall automatically expire on the date that is twelve (12) years from the last Close of Escrow for the sale of a Unit in the Properties M Exhibit A Page 1 2056-99886\RJD403\1245393 2 3/11/15 FURTHER RESERVING THEREFROM, for the benefit of Grantor and its successors and assigns, nonexclusive easements for the installation, maintenance and repair of utilities and related facilities (including, but not limited to, electrical, telephone, cable television, gas, water and sewer lines, utility meters, storm drains) as shown on the Map, or otherwise of record PARCEL NO. 2' An undivided one-half (1/2) fee simple interest as a tenant in common in and to the Common Area described in the Plan. PARCEL NO.3 Exclusive easements for the benefit of the Unit appurtenant to Parcel No 1 and Parcel No 2, described above, for porch and yard purposes, over those portions of the Common Area as shown numbered and assigned on the Plan or as described in the Declaration, and internal and external telephone wiring, as installed by Grantor PARCEL NO.4 Nonexclusive easements for access, drainage, encroachment, maintenance, repair, and for other purposes, all as may be shown on the Plan and the Map, and as described in and as described in the Declaration Exhibit A Page 2 2056-99886\RJD403\1245393 2 3/11/15 i Recording Requested By: First American Title Subdivision Dept. RECORDING REQUESTED BY: AND WIFIEN RECORDED MAIL TO: City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attn• Director of Economic Development Recorded in Official Records, Orange County Hugh Nguyen, Clerk -Recorder IIII I I I II I II I II I I I II II II I I I I IIIII IIII IIII 36.00 *$ R 0 0 0 8 0 2 5 5 5 4$ 2015000632015 8:00 am 12/ 15/ 15 143 404 NO3 D02 F14 7 0.00 0.00 0.00 0 00 18.00 0 00 0.00 0 00 NOTICE OF TERMINATION OF DECLARATION OF CONDITIONS, COVENANTS AND RESTRICTIONS FOR PROPERTY (RESALE RESTRICTIONS) (18451 Patterson Lane, Unit 102, Huntington Beach, CA 92646) This Notice of Termination of Declaration of Conditio s, Covenants and Restrictions for Property (Resale Restrictions) is dated for identification purposes �'"�r �12015, and is entered into by the City of Huntington Beach, a California municipal corporation ("City' and Habitat for Humanity of Orange County, Inc , a California nonprofit religious corporation ("Habitat's. WIIEREAS, Habitat is the owner of certain real property located at 18451 Patterson Lane, Unit 102, Huntington Beach, CA 92646, more particularly described on Schedule 1 attached hereto (the "Property"), and WHEREAS, the Property is subject to that certain Declaration of Conditions, Covenants and Restrictions for Property (Resale Restrictions) (the "Declaration's dated September 6, 2011 and recorded on September 29, 2011, as Instrument No 2011000483564 in the Official Records of the Recorder of Orange County, California ("OfficialRecords'�; and WHEREAS, the Declaration was amended by that certain Amendment to Declaration of Conditions, Covenants and Restrictions for Property (Resale Restrictions) (the "Amendment's dated July 9, 2012 and recorded on July 10, 2012, as Instrument No. 2012000390398 in the Official Records of the Recorder of Orange County, California; and WHEREAS, Habitat executed the Declaration and City is the Beneficiary of the all the enforcement rights thereunder: [CONTINUED ON FOLLOWING PAGE] oc26856vi 2056-99886\RJD403\1244648 2 3/6/15 Recording Requested By: First American Title Subdivision Dept. RECORDING REQUESTED BY: AND WHEN RECORDED MAIL TO: City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attn Director of Economic Development 6 NOTICE OF TERMINATION OF DECLARATION OF CONDITIONS, COVENANTS AND RESTRICTIONS FOR PROPERTY (RESALE RESTRICTIONS) (18451 Patterson Lane, Unit 102, Huntington Beach, CA 92646) This Notice of Termination of Declaration of Conditions, Covenants and Restrictions for Property (Resale Restrictions) is dated for identification purposes �e�Grr 2A 2015, and is entered into by the City of Huntington Beach, a California municipal corporation ("City' and Habitat for Humanity of Orange County, Inc , a California nonprofit religious corporation ("Habitat's WHEREAS, Habitat is the owner of certain real property located at 18451 Patterson Lane, Unit 102, Huntington Beach, CA 92646, more particularly described on Schedule 1 attached hereto (the "Property"), and WHEREAS, the Property is subject to that certain Declaration of Conditions, Covenants and Restrictions for Property (Resale Restrictions) (the "Declaration's dated September 6, 2011 and recorded on September 29, 2011, as Instrument No 2011000483564 in the Official Records of the Recorder of Orange County, California ( "Official Records', and WHEREAS, the Declaration was amended by that certain Amendment to Declaration of Conditions, Covenants and Restrictions for Property (Resale Restrictions) (the "Amendment's dated July 9, 2012 and recorded on July 10, 2012, as Instrument No 2012000390398 in the Official Records of the Recorder of Orange County, California, and WHEREAS, Habitat executed the'Declaration and City is the Beneficiary of the all the enforcement rights thereunder [CONTINUED ON FOLLOWING PAGE] oc268560 2056-99886\RJD403\1244648 2 3/6/15 NOW, THEREFORE, Habitat and City hereby terminate the Declaration and the Amendment as to the Property As a result hereof, the Declaration as amended by the Amendment is of no further force or effect as to, and shall no longer be an encumbrance on, the Property IN WITNESS WHEREOF, City and Habitat have executed this instrument on the day and year set forth in their acknowledgments below "HABITAT" "CITY" HABITAT FOR HUMANITY OF ORANGE COUNTY, CITY OF INC , a California nonprofit religious corporation corpora Im Linda Shepard, Chief Financial Officer By A;�/� � y Sl�aron Ellis, President and CEO 1GTON BEACH, a municipal State of California Manager INITI TED AND APPROVED 14AnPAJ, A- OjN' Director of Economic Development, ACM APPROVED AS TO FORM KANE, BALLMER & BERKMAN Special Counsel CA Su Apy oc26856v1 2056-99886\RJD403\1244648 2 3/6/15 A notary public or other officer completing this certificate venfies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document STATE OF CALIFORNIA COUNTY OF ORANGE On , V\ , 20�, before me, \ ( ere insert name and title of the office personally appeared ��^ L c�� 2(� who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) 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 c Signature -------------------- GERALOINE THEILE Commission 0 2M398 Notary Public • California zZ 19 Orange County Conan. E fires 21, 2018 (Seal) 2056-99886\RJD403\1244648 2 3/6/15 A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document STATE OF CALIFORNIA COUNTY OF ORANGE On'��\� , 20 ? before in (here insert name and titleVof the officer) personally appeared &-, E \\ S who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument 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 Signature Commission #► 2065398 Nolary Public • California Orange County My Comm. E irea 21, 2018 (Seal) 2056-99886\RJD403\1244648 2 3/6/15 A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. ACKNOWLEDGMENT STATE OF CALIFORNIA ss COUNTY OF ORANGE On March 25, 2015, before me, P. L. Esparza, Notary Public, personally appeared Fred A. Wilson 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. WITNESS my hand and official seal (Notary Signa ) rA P L ESPARZA Commission aft 2032750 Notary Public • CatBornis Orange County Comm Ex 9 res A , 2017 (Seal) SCHEDULEI TO NOTICE OF`TERMINATION LEGAL DESCRIPTION PARCEL NO. 1 Unit' 2 (the "Unit") as shown and described in the Condominium Plan for Patterson at Huntington Condominiums (together with any amendments thereto, collectively, the "Plan") covering Parcel 1 of Parcel Map No 2011-104, as such Parcel is shown on the Parcel Map ("Map"), filed in Book 372, at Pages 31-33 of Parcel Maps, in the Office of the Orange County Recorder, recorded on November 2, 2011, as Instrument No 2011000553373 in the Official Records of Orange County, California ("Official Records"), which Plan was recorded in the Official Records on November 18, 2011, as Instrument No 2011000588862, together with an undivided One -Half (1/2) interest as tenant -in -common in the Common Area as shown and described in the Condominium Plan and exclusive easements as are shown as appurtenant to the Unit RESERVING THEREFROM, for the benefit of Grantor, its successors and assigns, together with the right to grant and transfer all or a portion of same, exclusive and nonexclusive easements for use, access, ingress, egress, encroachment, support, maintenance, drainage, repair, and for other purposes, all as may be shown on the Plan and the Map, and as described in the Declaration of Covenants, Conditions and Restrictions and Reservation of Easements for Patterson at Huntington Condominiums, recorded on November 18, 2011, as Instrument No 201100058862 (the "Seller CC&R's ") in Official Records (together with any amendments thereto, collectively, the "Declaration") Unless otherwise defined, capitalized terms used herein shall have the meanings ascribed thereto in the Declaration ALSO RESERVING THEREFROM, for the benefit of Grantor, its successors in interest and assignees, the right to enter the Unit (1) to comply with requirements for the recordation of maps or lot line adjustments in the Properties, (n) for repair of Improvements in accordance with the provisions of the "Right to Repair Law" at California Civil Code Sections 895 through 945 5, (in) to accommodate grading or construction activities, (iv) to comply with requirements of applicable governmental agencies, and (v) as may be reasonably necessary to complete Improvements as determined by Grantor in its sole discretion Grantor shall provide. reasonable notice to Grantee before such entry If this reservation of right of entry is not complied with by Grantee, Grantor may enforce this right of entry in a court of law Grantee shall be responsible for all damages arising out of such failure to comply, including attorneys' fees and court costs The term of this reservation of right of entry shall automatically expire on the,date that is twelve (12) years from the last Close of Escrow for the sale of a Unit in the Properties FURTHER RESERVING THEREFROM, for the benefit of Grantor and its successors and assigns, nonexclusive easements for the installation, maintenance and repair of utilities and related facilities (including, but not limited to, electrical, telephone, cable television, gas, water and sewer lines, utility meters, storm drains) as shown on the Map, or otherwise of record 2056-99886\RJD403\1244648 2 3/6/15 v PARCEL NO.2 An undivided one-half (1/2) f j- simile interest as a tenant in common in and to the Common Area described in the Plan PARCEL NO.3 Exclusive easements for the benefit of the Unit appurtenant to Parcel No 1 and Parcel No 2, described above, for porch and yard purposes, over those portions of the Common Area as shown numbered and assigned on the Plan or as described in the Declaration, and internal and external telephone wiring, as installed by Grantor PARCEL NO.4 Nonexclusive easements for access, drainage, encroachment, maintenance, repair, and for other purposes, all as may be shown on the Plan and the Map, and as described in and as described in the Declaration 2056-99886\RJD403\1244648 2 3/6/15 Recording Requested By: First American Title RECORDING REQUE5TEnipi Dept. AND WHEN RECORDED MAIL TO: City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 AIM Director of Economic Development- +3 C-F, Recorded in Official Records, Orange County Hugh Nguyen, Clerk -Recorder 1500 *$ R 0 0 0 8 0 2 5 5 6 1$ 2015000632022 8:00 am 12115/15 143 404 R23 F13 3 0.00 0.00 0.00 0.00 6.00 0.00 0.00 0 00 A P N ���-39 1 - ZL— REQUEST FOR NOTICE UNDER §292413 CIVIL CODE In accordance with Section 2924b, Civil Code, request is hereby made that a copy of any NOTICE OF DEFAULT and a copy of any NOTICE OF SALE under the DEED OF TRUST recorded as Instrument No N. , on 20 , Official Records of Orange County, Califomia, and describing land therein as -201I - O00 Lf�3Zg SEE EXHIBIT 1 ATTACHED HERETO executed by Robert James Wear and Jodi Marie Wear, as Trustor, in which Habitat for Humanity of Orange County, Inc. is named as Beneficiary, and First American Title Company as Trustee, be mailed to f^ City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attn Director of Economic Development NOTICE: A COPY OF ANY NOTICE OF DEFAULT AND OF ANY NOTICE OF SALE WILL BE SENT ONLY TO THE ADDRESS CONTAINED IN THIS RECORDED REQUEST. IF YOUR ADDRESS CHANGES, A NEW REQUEST MUST BE RECORDED. DATED Z 2015 I_ CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California By Ns Tit 2056-99886\RJD403\1245387 1 3/11/1: Recording Requested By: First dAmerican Title RECORDING REQUES706W Dept. AND WHEN RECORDED MAIL TO 0 City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attn Director of Economic Development +-:59 & APN U REQUEST FOR NOTICE UNDER §2924B CIVIL CODE In accordance with Section 2924b, Civil Code, request is hereby made that a copy of any NOTICE OF DEFAULT and a copy of any NOTICE OF SALE under the DEED OF TRUST recorded as Instrument No on _ 20L�L, Official Records of Orange County, California, and describing land therein as 2o1(_ 00O Lfw3ZF, q12-q/2-OII SEE EXHIBIT 1 ATTACHED HERETO executed by Robert James Wear and Jodi Marie Wear, as Trustor, in which Habitat for Humanity of Orange County, Inc is named as Beneficiary, and First American Title Company as Trustee, be mailed to f, City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attn Director of Economic Development F NOTICE. A COPY OF ANY NOTICE OF DEFAULT AND OF ANY NOTICE OF SALE WILL BE SENT ONLY TO THE ADDRESS CONTAINED IN THIS RECORDED REQUEST. IF YOUR ADDRESS CHANGES, A NEW REQUEST MUST BE RECORDED. DATED 3 2015 CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California By Ni Tit 2056-99886 M403\1245387 1 3/11/15 A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. ACKNOWLEDGMENT STATE OF CALIFORNIA ) ) ss COUNTY OF ORANGE ) On March 25, 2015, before me, P. L. Esparza, Notary Public, personally appeared Fred A. Wilson 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. P L ESPARZA WITNESS my hand and official seal. Commission #E 2032750 Notary Public - Calltornla i Orange Count my Comm. E lm Au 4. 2017 • (Seal) (Notary Signatur EXHIBIT 1 DESCRIPTION OF REAL PROPERTY All that certain real property located in the City of Huntington Beach, County of Orange, State of California, described as follows PARCEL 1 Unit 2 (the "Unit"), as shown and described in the Condominium Plan for Patterson at Huntington Condominiums (together with any amendments thereto, collectively, the "Plan") covering Parcel 1 of Parcel Map No 2011-104, as such Parcel is shown on the Parcel Map ("Map"), filed in Book 372, at Pages 31-33 of Parcel Maps, in the Office of the Orange County Recorder, recorded on November 2, 2011, as Instrument No 2011000553373 in the Official Records of Orange County, California ("Official Records"), which Plan was recorded in the Official Records on November 18, 2011, as Instrument No 2011000588862, together with an undivided One -Half (1/2) interest as tenant -in -common in the Common Area as shown and described in the Condominium Plan and exclusive easements as are shown as appurtenant to the Unit PARCEL 2 An undivided one-half (1/2) fee simple interest as a tenant in common in and to the Common Area described in the Plan PARCEL 3 Exclusive easements for the benefit of the Unit appurtenant to Parcel No 1 and Parcel No 2, described above, for porch and yard purposes, over those portions of the Common Area as shown numbered and assigned on the Plan or as described in the Declaration, and internal and external telephone wiring, as installed by Grantor PARCEL 4 Nonexclusive easements for access, drainage, encroachment, maintenance, repair, and for other purposes, all as may be shown on the Plan and the Map, and as described in the Declaration of Covenants, Conditions and Restrictions and Reservation of Easements for Patterson at Huntington Condominiums, recorded on November 18, 2011 as Instrument No 2011000588863, in Official Records (together with any amendments thereto, collectively, the "Declaration") l 2056-99886\RJD403\ 12453 87 1 3/11/15 Recording Requested By: First American Title Subdivision Dept. RECORDING REQUESTED BY AND WHEN RECORDED MAIL City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attn: City Clerk -*39a-4-0e Recorded in Official Records, Orange County Hugh Nguyen, Clerk -Recorder II II III II III III 111111 I I Ei 11 I II NO FEE *$ R 0 0 0 7 7 6 8 5 5 7$ 2015000430358 3:01 pm 08/18/15 217 402 C15 7 0.00 0 00 0.00 0.00 18000000.000.00 (Space above for Recorder's use) This document is exempt from recording fees pursuant to Government Code Section 27383. CERTIFICATE OF COMPLETION FOR CONSTRUCTION AND DEVELOPMENT A On or about September 6, 2011, the CITY OF HUNTINGTON BEACH, a municipal corporation, hereinafter referred to as "City," entered into an Affordable Housing Property Transfer Agreement (the "Agreement") with HABITAT FOR HUMANITY OF ORANGE COUNTY, INC., a California nonprofit religious corporation (the "Developer"), which Agreement provides, inter alia, for the disposition and development of certain real property (the "Site") situated in the City of Huntington Beach, California, and more particularly described on Exhibit "A" attached hereto and made a part hereof by this reference. B. The Agreement provides that the City shall furnish the Developer with a Certificate of Completion for the site upon completion of construction of the improvements ("Improvements")required by the Agreement, which Certificate shall be in such form as to permit it to be recorded in the Recorder's Office of Orange County. CQr,npjeired o n AuoJ us1- I y, 2015 C. The City has conclusively determined that the construction on the Site described hereinabove required by the Agreement and the Grant Deed has been satisfactorily completed. NOW, THEREFORE, the parties hereto certify as follows. 1. As provided in the Agreement, the City does hereby certify that the construction of the Improvements on the Site has been fully and satisfactorily performed and completed. 2. The conditions and all rights and obligations under the Agreement as pertains to time Improvements are terminated, except as set forth or referenced in the Grant Deed and Memorandum of Agreement referred to in Recital B herein 3. Nothing contained in this instrument shall modify in any other way any other provisions of the Grant Deed or the Memorandum of Agreement. 4 After recordation of this Certificate of Completion, any person or entity then owning or thereafter purchasing, leasing, or otherwise acquiring any interest in the 2056-999861RJD40311246500 3 3/31115 Recording Requested By: First American Title Subdnnsion Dept. RECORDING REQUESTED BY AND WHEN RECORDED MAIL City of Huntington Beach ) 2000 Main Street ) Huntington Beach, CA 92648 ) Attn City Clerk (Space above for Recorder's use) This document is exempt from recording fees pursuant to Government Code Section 27383. CERTIFICATE OF COMPLETION FOR CONSTRUCTION AND DEVELOPMENT A On or about September 6, 2011, the CITY OF HUNTINGTON BEACH, a municipal corporation, hereinafter referred to as "City," entered into an Affordable Housing Property Transfer Agreement (the "Agreement") with HABITAT FOR HUMANITY OF ORANGE COUNTY, INC, a California nonprofit religious corporation (the "Developer"), which Agreement provides, inter alga, for the disposition and development of certain real property (the "Site") situated in the City of Huntington Beach, California, and more particularly described on Exhibit "A" attached hereto and made a part hereof by this reference B The Agreement provides that the City shall furnish the Developer with a Certificate of Completion for the site upon completion of construction of the improvements ("Improvements")'required by the Agreement, which Certificate shall be in such form as to permit it to be recorded in the Recorder's Office of Orange County 4(Ccmpie�ed or-) Ago uS� 14,2(3j5 C The City has conclusively determined that the construction on the Site described hereinabove required by the Agreement and the Grant Deed has been satisfactorily completed NOW, THEREFORE, the parties hereto certify as follows. 1 As provided in the Agreement, the City does hereby certify that the construction of the Improvements on the Site has been fully and satisfactorily performed and completed 2 The conditions and all rights and obligations under the Agreement as pertains to time Improvements are terminated, except as set forth or referenced in the Grant Deed and Memorandum of Agreement referred to in Recital B herein. 3 Nothing contained in this instrument shall modify in any other way any other provisions of the Grant Deed or the Memorandum of Agreement. 4 After recordation of this Certificate of Completion, any person or entity then owning or thereafter purchasing, leasing, or otherwise acquiring any interest in the 1 2056-99886\RJD403\1246500 3 3/31/15 Improvements will not (because of such ownership, purchase, lease or acquisition) incur any obligation or liability under the Agreement, the Grant Deed or the Memorandum of Agreement, except that such party shall be bound by any and all of the covenants, conditions, and restrictions which survive such recordation 5. This Certificate of Completion shall not constitute evidence of compliance with or satisfaction of any obligation of the Developer to any holder of a mortgage, or any insurer of a mortgage securing money loaned to finance the Improvements to the Property, nor any party thereof This Certificate of Completion is not notice of completion as referred to in Section 3093 of the California Civil Code 6 The Recitals above are incorporated in full as part of the substantive text of this Certificate of Completion. Signatures on following page. 2 2056-99886\RJD403\1246500 3 3/31/15 IN WITNESS WHEREOF, City and Habitat have executed this instrument on the day and year set forth in their acknowledgments below "HABITAT" HABITAT FOR HUMANITY OF ORANGE COUNTY, INC, a California nonprofit religious corporation By: Linda Shepard, Chief Financial Officer By -15J l ll haron Ellis, President and CEO "CITY" CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California IN TED Al PROVED erector of Economic Development APPROVED AS TO FORM. KANE, BALLMER & BERKMAN Special Counsel Sus Apy 2056-99886\RJD403\1246500 3 3/31/15 EXHIBIT A TO CERTIFICATE OF COMPLETION LEGAL DESCRIPTION OF THE PROPERTY That certain real property located in the City of Huntington Beach, County of Orange, State of California, more particularly described as follows: PARCEL 1 Unit 1 (the "Unit"), as shown and described in the Condominium Plan for Patterson at Huntington Condominiums (together with any amendments thereto, collectively, the "Plan") covering Parcel 1 of Parcel Map No. 2011-104, as such Parcel is shown on the Parcel Map ("Map"), filed in Book 372, at Pages 31-33 of Parcel Maps, in the Office of the Orange County Recorder, recorded on November 2, 2011, as Instrument No. 2011000553373 1n the Official Records of Orange County, California ("Official Records"), which Plan was recorded in the Official Records on November 18, 2011, as Instrument No. 2011000588862, together with an undivided One -Half (1/2) interest as tenant -in -common in the Common Area as shown and described in the Condominium Plan and exclusive easements as are shown as appurtenant to the Unit. PARCEL 2- An undivided one-half (1/2) fee simple interest as a tenant in common in and to the Common Area described in the Plan PARCEL 3. Exclusive easements for the benefit of the Unit appurtenant to Parcel No 1 and Parcel No. 2, described above, for porch and yard purposes, over those portions of the Common Area as shown numbered and assigned on the Plan or as described in the Declaration, and internal and external telephone wiring, as installed by Grantor PARCEL 4 Nonexclusive easements for access, drainage, encroachment, maintenance, repair, and for other purposes, all as may be shown on the Plan and the Map, and as described in the Declaration of Covenants, Conditions and Restrictions and Reservation of Easements for Patterson at Huntington Condominiums, recorded on November 18, 2011 as Instrument No. 2011000588863, in Official Records (together with any amendments thereto, collectively, the "Declaration") Exhibit A 2056-99886\RJD403\1246500 3 3/31/15 A notary public or other officer completing this certificate venfies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. STATE OF CALIFORNIA COUNTY OF ORANGE On lL , 20[E, before me, %(TA A-P—D55 a- fi/RGc�& (here insert name and title d the officer) personally appeared L/NDA 5HOPAkD who proved to me on the basis of satisfactory evidence to be the persont&j whose name is subscribed to the within instrument and acknowledged to me that JKhe executed the same in bigog authorized capacity*:�,l, and that by signatures on the instrument the person(v, or the entity upon behalf of which the person(o 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. RITA A ROSS WITN S hand and offici se 1 �`r " Commission # 1929080 aQ 4 Notary Public - Calitorma D z r� Orange County My Comm Expires Apr 15, 2015 i (Seal) 2056-99886\RJD403\1246500 3 3/31/15 A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document STATE OF CALIFORNIA COUNTY OF ORANGE On 1 L ��, 2015, before me, P.177k A _ P`. 65 (here insert name and title dthe officer) personally appeared �51'f AknN EIL4 S who proved to me on the basis of satisfactory evidence to be the person*) whose name is,Aa subscribed to the within instrument and acknowledged to me that she ' executed the same in hix i re ter authorized capacity(, and that by ja signatureW 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 RITA A ROSS _ ! E Commission # 1929080 a - Notary Public - California i z " Orange County My Comm Comm Expires Apr 15, 2015 (Seal) 2056-99886\RJD403\1246500 3 3/31/15 notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. ACKNOWLEDGMENT STATE OF CALIFORNIA ss COUNTY OF ORANGE On July 20, 2015 before me, P. L. Esparza, Notary Public, personally appeared Fred A. Wilson and Ken Domer 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. WITNESS my hand and official seal. P L ESPARZA Commission * 2032750 Notary Public - California > Orange County My Comm Expires Au 4, 2017 (Seal) Recorded in Official Records, Orange County Hugh Nguyen, Clerk -Recorder Recording Requested By: II 1E1 III IE�III II 11111111 Ell Ell III INO FEE First American Title Subdivision Dept. *$ R 0 0 0 7 7 6 8 5 6 2$ 201500000363 3:01 pm 08/18/15 217 402 NO3 23 RECORDING REQUESTED BY 0 00 0 00 0.00 0 00 66 00 0 00 0 00 0 00 AND WHEN RECORDED MAIL TO: City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attention: Economic Development Director � 3q04 jq �__ SPACE ABOVE LINE FOR RECORDER'S USE OFFICIAL- Gusir4csS. � l free Vewychvng ` p_%oesl-ed S i- ep � �� C v,M� �'� ` Gov • Co d e- s-eci ovn 1-13 & 2i NOTICE OF RESTRICTIONS AND OPTION TO PURCHASE DWELLING UNIT This NOTICE OF RESTRICTIONS AND OPTION TO PURCHASE DWELLING UNIT (the "Notice") is made as of / , 2015 by and between THE CITY OF HUNTINGTON BEAC ', a 'cipal corporation (the "City"), HABITAT FOR HUMANITY OF ORANGE COUNTY, INC., a California nonprofit religious corporation ("Habitat"), RAUL CENDEJAS GUZMAN, an individual ("R. Guzman") and ADELINA LOPEZ DE CENDEJAS, an individual ("A Cendejas"). R. Guzman and A. Cendejas shall be collectively referred to herein as the "Owner." The City, Habitat and Owner, (collectively the, "Parties") hereby agree as follows: RECITALS WHEREAS, the City provided a development subsidy to Habitat in the amount of $748,437, derived from the United States Department of Housing and Urban Development ("HUD") under the HOME Investment Partnerships Program (the "HOME Program") in accordance with the regulations issued by HUD and set forth in 24 Code of Federal Regulations ("CFR') Part 92 ("HOME Regulations"), for the purposes of strengthening public -private partnerships to provide decent, safe, sanitary, and affordable housing ("Development Subsidy"). WHEREAS, the Development Subsidy was provided to Habitat by the City to pay a portion of the cost to develop two single family dwellings located on that certain real property legally described in Exhibit A of the City Affordable Housing Agreement and incorporated herein by this reference (the "Property") to be sold to and occupied by low and very low income households at an Affordable Housing Cost, in accordance with that certain Affordable Housing Dwelling Unit Transfer Agreement by and between City and Developer, dated as of September 6, 2011, as amended by that certain First Amendment Page 1 7/15/15 Recording Requested By: first American Title Subdivision Dept RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attention Economic Development Director -A 3cro4-9�- SPACE ABOVE LINE FOR RECORDER'S USE ok r J C FFICI AL Gis i NiSS ikee Y-ecoydkv-N!) Vltgt., ,red Govi-. Code 21363 NOTICE OF RESTRICTIONS AND OPTION TO PURCHASE DWELLING UNIT This NOTICE OF RESTRICTIONS AND OPTION TO PURCHASE DWELLING UNIT (the "Notice") is made as of leoz /7r , 2015 by and between THE CITY OF HUNTINGTON BEA cipal corporation (the "City"), HABITAT FOR HUMANITY OF ORANGE COUNTY, INC, a California nonprofit religious corporation ("Habitat"), RAUL CENDEJAS GUZMAN, an individual ("R Guzman") and ADELINA LOPEZ DE CENDEJAS, an individual ("A Cendejas") R Guzman and A Cendejas shall be collectively referred to herein as the "Owner " The City, Habitat and Owner, (collectively the, "Parties") hereby agree as follows RECITALS WHEREAS, the City provided a development subsidy to Habitat in the amount of $748,437, derived from the United States Department of Housing and Urban Development ("HUD") under the HOME Investment Partnerships Program (the "HOME Program") in accordance with the regulations issued by HUD and set forth in 24 Code of Federal Regulations ("CFR") Part 92 ("HOME Regulations"), for the purposes of strengthening public -private partnerships to provide decent, safe, sanitary, and affordable housing ("Development Subsidy") WHEREAS, the Development Subsidy was provided to Habitat by the City to pay a portion of the cost to develop two single family dwellings located on that certain real property legally described in Exhibit A of the City Affordable Housing Agreement and incorporated herein by this reference (the "Property") to be sold to and occupied by low and very low income households at an Affordable Housing Cost, in accordance with that certain Affordable Housing Dwelling Unit Transfer Agreement by and between City and Developer, dated as of September 6, 2011, as amended by that certain First Amendment Page 1 7nsns to the Affordable Housing Dwelling Unit Transfer Agreement dated February 6, 2012 and as modified by that certain Implementation Agreement to the Affordable Housing Dwelling Unit Transfer Agreement dated July 5, 2012 (collectively the, "City Affordable Housing Agreement") WHEREAS, the Development Subsidy has been passed along and made available to Owner in the form of a lower sales price for that certain three bedroom unit located at 18451 Patterson Lane, Unit No 101, Huntington Beach, California 92646 as described in the legal description attached hereto as Attachment No 1 and incorporated herein by this reference (the "Dwelling Unit"), presenting a lower financial burden to Owner Without the Development Subsidy, the sales price of the Dwelling Unit would exceed the amount that is affordable to Owner WHEREAS, the Property on which the Dwelling Unit is constructed has been assisted with moneys from the Low and Moderate Income Housing Fund established and maintained pursuant to California Health and Safety Code Section 33334 2 et sec , therefore the Property and the Dwelling Unit are subject to California Community Redevelopment Law (commencing with Section 33000 of the Health and Safety Code and hereinafter referred to as the "CRL") WHEREAS, the City and Owner executed that certain Addendum (the "Addendum") attached to that certain Grant Deed to Purchasers conveying the Dwelling Unit to Owner executed by Habitat (as Grantor) and Owner (as Grantee) recorded concurrently herewith in the Official Records of the County Recorder's Office of Orange County (the "Official Records") restricting the resale and use of the Dwelling Unit in accordance with the HOME Regulations and the CRL. Any capitalized term not defined herein shall have the meaning ascribed to such term in the Addendum WHEREAS, the financial assistance made available by the City for the benefit of Owner is conditioned on the use of the Dwelling Unit for owner -occupancy WHEREAS, the financial assistance made available by the City for the benefit of Owner is conditioned on the use of the Property and Dwelling Unit for housing affordable to persons or families of Very Low Income for the Affordability Period. WHEREAS, the financial assistance made available by the City for the benefit of Owner is also conditioned on the right but not the obligation of the City to purchase the Dwelling Unit from Owner on the same terms and for the same price as any bona fide offer made to Owner to purchase the Dwelling Unit during the Affordability Period FOR GOOD AND VALUABLE CONSIDERATION, the receipt and sufficiency of which are hereby acknowledged, the City and the Owner hereby agree and NOTICE IS HEREBY GIVEN that the Dwelling Unit shall be subject to this Notice Owner -Occupancy Requirement a. Owner shall occupy the Dwelling Unit as his or her or their primary residence, and the Dwelling Unit shall be used as the principal residence of Owner and Page 2 7/15/15 Owner's household and for no other purpose. The Dwelling Unit shall not be leased or rented by Owner to any person or entity The maximum occupancy of the Dwelling Unit shall not exceed the maximum occupancy allowed by the Uniform Housing Code b The City shall have the right to monitor whether the Dwelling Unit is owner -occupied by requesting that Owner provide the City, no more frequently than two (2) times in any consecutive twelve (12) month period, with a written certification under penalty of perjury that the Dwelling Unit is owner -occupied, accompanied by supporting documentation reasonably satisfactory to the City In the event of a breach or threatened breach of this paragraph b , the City or their successors or assigns shall be entitled to institute legal action to enforce performance of this paragraph b and to obtain an injunction prohibiting anyone but Owner from occupying the Dwelling Unit and/or requiring Owner to occupy the Dwelling Unit and/or requiring Owner to sell the Dwelling Unit to a Qualified Purchaser who will occupy the Dwelling Unit as his or her or their primary residence. c These owner -occupancy restrictions may be modified or terminated only upon the written approval of the City Any modification must be in writing 2 Maintenance of Dwelling Unit Owner shall maintain the interior and exterior of the improvements and the landscaping on the Dwelling Unit in a manner consistent with community standards which will uphold the value of the Dwelling Unit, in accordance with this Notice, the Huntington Beach Municipal Code and that certain Declaration of Covenants, Conditions, Restrictions, and Reservation of Easements for Patterson at Huntington Condominiums executed by Habitat, dated November 11, 2011 and recorded in the Official Records on November 18, 2011 as Document No. 2011000588863 ("CC&R's) a Exterior Maintenance All exterior, painted surfaces of any structures located on the Dwelling Unit shall be maintained at all times in a clean and presentable manner Any such defacing marks shall be cleaned or removed within a reasonable time b Front and Side Exteriors Owner shall, at all times, maintain the front exterior and any visible side exteriors and yards, if any, in a clean, safe and presentable manner c Graffiti Removal All graffiti, and defacement of any type, including marks, words and pictures, must be removed from the Dwelling Unit and any necessary painting or repair completed within a reasonable time, but in no event more than one (1) week after notice to Owner from City d Landscaping All landscaping surrounding the Dwelling Unit shall be maintained in a manner consistent with standards of the City of Huntington Beach's Municipal Code (the "Code") and any rules, regulations and standards adopted pursuant to the Code In addition, for example, the yard areas shall not contain the following (1) lawns with grasses in excess of nine (9) inches in height, (2) trees, shrubbery, lawns or other plant life which are dying from a lack of water or other necessary maintenance, Page 3 7/15/15 (3) trees and shrubbery grown uncontrolled without proper pruning; (4 vegetation so overgrown as to be likely to harbor rats or vermin; (5) dead, decayed or diseased trees, weeds and other vegetation, and (6) inoperative irrigation systems e Maintenance by Owner Owner shall, at his, her or their sole cost and expense, maintain and repair the Dwelling Unit and the improvements thereon, keeping the same in good condition and making all repairs as may be required by this Notice and the City of Huntington Beach's Municipal Code. f Damage and Destruction Affecting Dwelling Unit -- Duty to Rebuild. If all or any portion of the Dwelling Unit and the improvements thereon is damaged or destroyed by fire or other casualty, it shall be the duty of Owner to rebuild, repair or reconstruct the Dwelling Unit in a timely manner to restore it to the City of Huntington Beach's Municipal Code compliance condition. g. Variance in Exterior Appearance and Design If the Dwelling Unit is damaged or destroyed by casualty, Owner may not, without the prior written consent of the City, reconstruct, rebuild or repair the Dwelling Unit in a manner which will provide different exterior appearance and lot design from that which existed prior to the date of the casualty h. Time Limitation In the event of damage or destruction due to casualty, Owner shall be obligated to proceed with all due diligence to commence reconstruction within two (2) months after the damage occurs and to complete reconstruction within a reasonable time after damage occurs, unless prevented by causes beyond the reasonable control of Owner 1. Failure to Maintain Failure to maintain the Dwelling Unit in accordance with this Section 2, including, but not limited to, any violations of applicable building, plumbing, electric, fire, housing or other applicable City of Huntington Beach Building Codes, shall be a default by Owner under this Notice. In the event City, in the sole discretion of the Director of Economic Development for the City of Huntington Beach or designee (the "Director"), determines that Owner has failed to maintain the Dwelling Unit, City shall notify Owner with regard to any noted code violations and maintenance deficiencies (collectively, the "Deficiencies"), and Owner shall cure the Deficiencies in a reasonable manner acceptable to City within sixty (60) days following the date of such notice Should Owner fail to cure all the Deficiencies prior to the time set forth herein, City, or its designee, shall have the right, but not the obligation, to enter the Dwelling Unit, correct any Deficiency, and hold Owner responsible for the cost thereof Any cost incurred by City to cure any such Deficiency, until paid, shall constitute a lien on the Dwelling Unit pursuant to Civil Code Section 2881 j Pre -Sale Inspection. Not later than sixty (60) days prior to a Sale (defined below) of the Dwelling Unit, Owner shall give notice of the impending Sale to the City in accordance with Section 3, and shall permit the City (or designee), upon reasonable prior notice from the City, to inspect the Dwelling Unit prior to the Sale. Following such inspection, if the City determines that the Dwelling Unit is not in compliance with this Page 4 7/15/15 Section 2, the City shall deliver to the Owner a list of Deficiencies that are required to be cured in compliance with this Section 2 At his, her or their sole cost and expense, Owner shall complete such repairs, or provide for such repairs to be completed, to the reasonable satisfaction of the City prior to the Sale. With the written consent of the City, Owner may provide for such repairs to be paid out of the portion of net Sale proceeds to be paid to Owner For purposes of this Notice, "Sale" shall mean a voluntary Transfer of the Dwelling Unit to a Qualified Purchaser for payment of the Resale Price, not including a transfer of deed in lieu of foreclosure The "Resale Price" shall (i) mean the total compensation to be paid to the Owner upon a Sale of the Dwelling Unit by the Owner, (ii) constitute an Affordable Purchase Price and, (iii) provide the original HOME Program assisted Owner a fair return on investment (including the Owner's investment and any Capital Improvement) pursuant to Section 92 254 a 5. (1) of the HOME Regulations 3 Notice to City In the event Owner intends to sell or otherwise effect a Transfer of the Dwelling Unit, Owner shall promptly notify City in writing of such intent ("Owner's Notice"). The written notice shall be given in accordance with Section 5 of this Notice at least sixty (60) days prior to the actual date of any Transfer If applicable, the Owner's Notice shall specify all the terms of such Transfer, and provide such information as the City shall reasonably require regarding the proposed Transfer Representatives of the City may at any time after the submission of the Owner's Notice, require that the Owner or the proposed transferee, as applicable, provide additional information regarding the proposed transaction for the Transfer of the Dwelling Unit, and the Owner and/or transferee, as applicable, shall supply such information as soon as practicable. In the case of any proposed Sale of the Dwelling Unit, the City may require the Owner and the proposed purchaser to certify in writing in a form that is reasonably acceptable to the City, that the Owner and the proposed purchaser have not paid, have no agreement to pay and will not pay, to the other such party, or to any other person, any money or other consideration in addition to the consideration described in the written offer and conditional acceptance 4 City's Option a. Owner hereby grants to the City the option to purchase the Dwelling Unit from the Owner (the "Option") under the following terms and conditions In the event of a proposed sale or Transfer of the Dwelling Unit and/or upon the occurrence of an Event of Default, as defined in the Addendum, the City shall have the right, at its option, but not the obligation, to exercise the Option and purchase the Dwelling Unit for the "City Purchase Price " For the purposes of this Notice, the "City Purchase Price" shall be equal to the following: (1) In the event of a Sale, the City Purchase Price shall be equal to either (i) the total proposed Resale Price, and the City purchase shall be on the same terms and conditions as contained in such proposed Sale, or (ii) subject to the Senior Lender's approval of the new Qualified Purchaser selected by the City, the proposed Resale Price less the outstanding Page 5 Ins/15 balance of the Senior First Mortgage Loan so long as the City conveys title to the Dwelling Unit to such Qualified Purchaser and the Qualified Purchaser assumes the Senior First Mortgage Loan Deed of Trust and all related documents, and the City purchase shall be on the same terms and conditions as contained in such proposed Sale (2) In the event of an Event of Default or a Transfer (other than a Sale), the City Purchase Price shall be equal to (i) the outstanding amount of the principal and other amounts due under the Senior First Mortgage Loan, plus, to the extent applicable, (11) reasonable amounts which provide the original Owner a fair return on investment in the Dwelling Unit (including the original Owner's investment and any Capital Improvements to the Property that are approved by the City Director in writing prior to such construction (but in no event shall such amounts exceed the cost specifically approved by City in writing prior to such construction), pursuant to Section 92.254 a 5 (1) of the HOME Regulations. All amounts described in this Subsection 4 a (2) must be substantiated by Owner with appropriate invoices, reasonable evidence of payment and completion of construction and reasonable evidence that such amounts were used solely for the construction of such Capital Improvements. The City's Option shall survive a foreclosure or transfer of deed in lieu of foreclosure b In the event that the City does not exercise its Option and Owner desires to effect a Sale of the Dwelling Unit, all of the following provisions shall apply (1) No transfer of the Dwelling Unit shall occur until the City determines (a) that the proposed purchaser intends to occupy the Dwelling Unit as the proposed purchaser's principal residence, (b) that the proposed purchaser is a Very Low or Low Income Household as defined in the Addendum, and (c) that the proposed transfer occurs at an Affordable Housing Cost as defined in the Addendum. (2) The City shall send Owner 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 Dwelling 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. If the City fails to approve or disapprove a submission within such fourteen (14) day period, the City shall be deemed to have approved such transfer in accordance with the foregoing. Prior to the conveyance of the Dwelling Unit, each approved purchaser must also submit to the City an executed Page 6 7/15/15 disclosure statement which certifies that the purchaser is aware that the purchaser buying the Dwelling Unit may only sell the Dwelling Unit at an Affordable Housing Cost to a Very Low Income Household, that the maximum permitted sales price may be less than fair market value and that the Dwelling Unit must be owner -occupied at all times and cannot be rented or leased (3) Owner 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 Owner's sale of the Dwelling Unit, provided that the Owner shall not be obligated to incur any out-of-pocket costs in connection therewith, other than employee time dedicated to providing such assistance (4) Owner shall include in the escrow instructions and Purchase and Sale Agreements with buyers a provision which requires each buyer to record a covenant which will run with the land and bind all successors -in -interest or assignees that will ensure that all subsequent buyers and occupants qualify as Very Low or Low Income Households Said covenant shall remain in full force and effect for the Affordability Period c The term "Senior Lender" as used herein shall mean Habitat or the lender of any permanent loan or the beneficiary of a deed of trust securing any loan to finance Owner's acquisition of the Dwelling Unit, which deed of trust is senior in priority to all other mortgages on the Dwelling Unit. Notwithstanding any provision to the contrary herein, a trustee's sale held as a result of a foreclosure of a Senior Lender's deed of trust, or a transfer by deed -in -lieu of foreclosure to a Senior Lender, shall not constitute a sale, a "Transfer" (as defined in Section 7 below) or a an Event of Default hereunder provided that- (1) In the event of a foreclosure sale, the purchaser of the Dwelling Unit at such sale either (i) qualifies as a Qualified Purchaser and acquires the Dwelling Unit for an Affordable Purchase Price, assumes Owner's obligations hereunder and under the Addendum to Grant Deed by execution of an Assignment and Assumption Agreement first approved in writing by the City's Director, and thereafter occupies the Dwelling Unit as his or her principal residence; or (ii) sells the Dwelling Unit to a Qualified Purchaser for an Affordable Purchase Price within one hundred twenty (120) days after the conclusion of said foreclosure sale or transfer by deed -in -lieu of foreclosure and said Qualified Purchaser assumes Owner's obligations hereunder and under the Addendum to Grant Deed by execution of an Assignment and Assumption Agreement first approved in writing by the City's Director, and thereafter occupies the Dwelling Unit as his or her principal residence; or (2) In the event of a deed -in -lieu of foreclosure transfer, the Senior Lender who acquires title sells the Dwelling Unit to a Qualified Purchaser for an Affordable Purchase Price within one hundred twenty (120) days Page 7 7/15/15 after receipt of said transfer of title, said Qualified Purchaser assumes Owner's obligations hereunder by execution of an Assignment and Assumption Agreement first approved in writing by the City's Director, and thereafter occupies the Dwelling Unit as his or her principal residence d Exercise of Option to Purchase The Option may be exercised by the City delivering to Owner written notice of such exercise Upon the City's knowledge of the occurrence of an Event of Default or receipt of Owner's Notice, the City shall have sixty (60) days to give written notice to Owner (the "City's Notification") of its decision to exercise the Option The City's Notification shall be pursuant to Section 5 of this Notice Notwithstanding anything to the contrary set forth herein, the City's exercise of its Option to purchase the Dwelling Unit shall not impair the Senior Lender's Deed of Trust, which shall survive in its entirety unless the secured obligations are fully paid. e Escrow Within forty-five (45) days following the exercise of the Option, the City shall open, or cause to be opened, an escrow with a title insurance company or such other escrow agent selected by the City (the "Escrow Agent") and the parties agree to execute escrow instructions with Escrow Agent as may be required by Escrow Agent, or to implement or give effect to the terms and conditions of this Notice The parties agree to the following escrow terms and conditions (1) The escrow shall be for a period of ninety (90) days or sooner if mutually agreed by the parties, (2) The City agrees that it will pay the City Purchase Price upon the close of escrow or as otherwise mutually agreed to by the parties Notwithstanding the foregoing, and subject to the requirements set forth in Section 92 254 a 5 (1) of the HOME Regulations, should Owner fail to cure all Deficiencies, if any, in accordance with Section 2 prior to the close of escrow, the Owner hereby agrees that the Escrow Agent shall withhold that portion of the City Purchase Price necessary to pay for curing the Deficiencies, based upon written estimates obtained and submitted to the Escrow Agent by the City The City shall cause the Deficiencies to be cured and, upon certification of completion of work by the City, the Escrow Agent shall disburse such funds to the City to pay for said work Any remaining funds shall be disbursed by the Escrow Agent to Owner; (3) The Owner agrees that it shall pay the premium for a standard C L T A policy of owner's title insurance issued by the Escrow Agent or title insurance company reasonably acceptable to the City in the amount of the City Purchase Price, insuring title to the Dwelling Unit in the City's name, subject only to those matters approved by the City in writing. In the event the City requests an A.L T A policy of owner's insurance and/or any title endorsements, the additional costs associated with the issuance of an A L T A policy or the endorsements shall be paid by the City, (4) The Owner and City agree that all costs and fees charged in connection with the closing and escrow shall be borne by the Owner; Page 8 7/15/15 (5) The Owner agrees that it shall deposit in escrow for delivery to the City an executed grant deed to the City (in such form as may be reasonably acceptable to the Director in his or her sole discretion), (6) Taxes and assessments shall be prorated at the close of escrow with Owner paying all such taxes and assessments due and payable prior to the close of escrow and City paying all such taxes and assessments due and payable following the close of escrow, (7) Owner agrees that title shall be conveyed by Owner at the close of escrow to the City free and clear of all mortgages, deeds of trust, liens and encumbrances Owner agrees that any costs to remove or satisfy any mortgages, deeds of trusts, liens or encumbrances shall be the responsibility of Owner, at Owner's sole cost and expense, and (8) Any other terms or conditions mutually agreed to by the parties f. Priority of Option. Notwithstanding Section 6 of this Notice, this Section 4 and the City's Option granted hereby shall be junior in priority only to, and subordinated only to, Section 6 of the Affordable Housing Agreement for Raul Cendejas Guzman and Adelina Lopez de Cendejas, executed by Raul Cendejas Guzman and Adelma Lopez de Cendejas and Humanity Housing, Inc., recorded concurrently herewith in the Official Records, wherein Owner grants to Humanity Housing Inc. an option to purchase the Dwelling Unit (the "Humanity Housing Option") Except as provided in the immediately preceding sentence, this Section 4 and the City's Option granted hereby shall be senior and superior to all other mortgages, liens, encumbrances and options on the Dwelling Unit g The Addendum and the affordability and use restrictions set forth in this Notice shall not be extinguished, terminated or cancelled by a foreclosure sale under a Senior First Mortgage Loan or a transfer of deed in lieu of foreclosure during the Affordability Period City, Owner, and Senior Lender acknowledge and agree that, if due to an event of foreclosure, the Addendum and/or the affordability and use restrictions set forth in this Notice are terminated and eliminated from title to the Dwelling Unit during the term of the Affordability Period, the Senior Lender will allow the City to re-record the Addendum and the affordability and use restrictions contained in this Notice in a first priority position, on any post foreclosure estate retained or acquired by Senior Lender 5 Notices Owner agrees the City shall have the right to record against title to the Dwelling Unit a request for notice of default and any notice of sale under any deed of trust or mortgage with power of sale encumbering the Dwelling Unit in the Office of the Recorder of Orange County Such request shall specify that any such notice shall be mailed to - Page 9 7/15/15 City of Huntington Beach 2000 Main Street Huntington Beach, California 92648 Attention- Director of Economic Development The Owner shall provide to the City a written copy of any notice of default or notice of sale under any deed of trust or mortgage with power of sale encumbering the Dwelling Unit immediately upon receipt by the Owner. The City may declare a default under this Notice upon receipt of any notice given to the City pursuant to Civil Code Section 2924b or pursuant to this Section 5, and may exercise its remedies as provided in Section 11. In the event of default or foreclosure of such deed of trust or mortgage, the City shall have the same right as the Owner to cure defaults and redeem the Dwelling Unit prior to foreclosure sale Nothing contained herein shall be construed as creating any obligation of the City to cure any such default, nor shall this right to cure and redeem operate to extend any time limitations in the default provisions of the underlying deed of trust or mortgage Except as otherwise expressly provided in this Notice, in every case when, under the provisions of this Notice, it shall be necessary or desirable for one party to serve any notice, request, demand, report or other communication on another party, the same shall be in writing and shall not be effective for any purpose unless served (i) personally, (n) by independent, reputable, overnight commercial courier, or (ui) by deposit in the United States mail, postage and fees fully prepaid, registered or certified mail, with return receipt requested, addressed as follows To Owner Raul Cendejas Guzman and Adelina Lopez de Cendejas 18451 Patterson Lane, Unit No 101 Huntington Beach, California 92646 To City. City of Huntington Beach 2000 Main Street Huntington Beach, California 92648 Attention Director of Economic Development With a copy to. Office of the City Attorney City of Huntington Beach 2000 Main Street Huntington Beach, California 92648 Attention- City Attorney To Habitat Habitat for Humanity of Orange County 2200 S Ritchey Street Santa Ana, California 92705 Attention- CEO/Executive Director With a copy to- Jackson Demarco Tidus Peckenpaugh 2030 Main Street, 12t' Floor Page 10 7/15/15 Irvine, California 92614 Attention. Ron DeFelice 6 No violation or breach of this Notice shall defeat or render invalid or in any way impair the lien or charge of any mortgage, deed of trust or other security instrument permitted by the Addendum and made in good faith and for value Except as otherwise provided in Section 4, this Notice shall be senior to all liens, mortgages, options and encumbrances on the Dwelling Unit, including, but not limited to the Humanity Housing Option, Senior First Mortgage Loan Deed of Trust and WISH Mortgage Loan Deed of Trust. 7 Transfers Owner agrees that Owner shall not make any sale, transfer, assignment or conveyance of the Dwelling Unit, any portion thereof or interest therein, including, without limitation, any lease, exchange, or other disposition of any interest in the Dwelling Unit, whether voluntary or involuntary, or any refinancing of the Senior First Mortgage Loan ("Transfer"); provided however, the following transfers ("Permitted Transfers") shall not, for purposes of this Notice, be considered a Transfer resulting in an Event of Default under this Notice a. The creation of a purchase -money security interest for household appliances; b A transfer by devise, descent, or operation of law on the death of a joint tenant or tenant by the entirety, c A transfer, in which the transferee is a person who occupies or will occupy the Dwelling Unit, which is (1) A transfer by an Owner where the spouse becomes the co-owner of the Dwelling Unit and enters into an assumption agreement relating to the Addendum and this Notice, (2) A transfer where the spouse or child(ren) become an owner of the Dwelling Unit and enter into an assumption agreement relating to the Addendum and this Notice; or (3) A transfer resulting from a decree of dissolution of marriage, legal separation agreement, or from an incidental property settlement agreement by which the spouse becomes the sole owner of the Dwelling Unit d. A transfer into an inter vivos trust in which the Owner is and remains the beneficiary and occupant of the Dwelling Unit, unless, as a condition precedent to such transfer, the Owner refuses to provide the City with reasonable means acceptable to the City Manager or designee by which the City will be assured of timely notice of any subsequent transfer of the beneficial interest or change in occupancy of the Dwelling Unit Page 11 7/15/15 Provided, however, that the covenants contained in and the restrictions imposed on Owner and the Dwelling Unit by this Notice and the Addendum shall continue to encumber and run with title to the Dwelling Unit following said transfers 8 This Notice relates to the aforementioned Addendum which restricts the resale and use of the Dwelling Unit Owner agrees Owner shall not encumber the Dwelling Unit for the purpose of securing financing either senior or junior in priority or subordinated to this Notice or the Addendum without the prior written approval of City In the event the Dwelling Unit or any portion thereof is made subject to a junior or senior lien or encumbrance, the City shall be entitled to exercise the remedies available to the City pursuant to this Notice and the Addendum 9 Notwithstanding any other provision of law, this Notice shall run with the land and shall be enforceable against Owner and successors in interest by City or its successor in interest The covenants, conditions, restrictions, limitations and provisions of this Notice shall remain in effect with respect to the Dwelling Unit until the sixtieth (60t') anniversary of the date the City issues a permanent certificate of occupancy for the Dwelling Unit, provided, however, that the covenants, conditions, restrictions, limitations and provisions contained in Section 18 and 19 herein shall run in perpetuity 10 This Notice, without regard to technical classification or designation, shall be binding for the benefit of the City, and such covenants shall run in favor of the City for the entire period during which such covenants shall be in force and effect, without regard to whether the City is or remains an owner of any land or interest therein to which such covenants relate The City, 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 proceedings to enforce the curing of such breach 11. Defaults a Failure or delay by Owner to perform any term or provision of this Notice constitutes a default under this Notice The City shall give written notice of default to Owner, specifying in reasonable detail the matter constituting the default Owner shall have thirty (30) days following receipt of notice to cure the default Except as required to protect against further damages, the City shall not institute proceedings against the party in default unless the matter is not cured within such thirty (30) day period, or, if the default is of a nature requiring more than thirty (30) days to cure, Owner commences to cure the matter within such thirty (30) day period and diligently pursues such cure to completion within a reasonable time, but in no event more than ninety (90) days after notice of default Failure or delay by City in giving such notice shall not constitute a waiver of any default, nor shall it change the time of default. Failure to cure the default within the applicable cure period shall entitle City to apply to a court of competent jurisdiction for specific performance of the obligations of this Notice, for an injunction prohibiting a proposed Transfer in violation of this Notice, for a declaration that a Transfer in violation of the provisions of this Notice is void or any such relief at law or in equity as may be appropriate Owner, and/or Owner's purchaser or transferee in those circumstances where a Transfer has occurred in violation of this Notice, shall hold City Page 12 7/15/15 and its employees or other agents harmless and reimburse the expenses, legal fees and costs for any action City or its employees or other agents take in enforcing the provisions of this Notice b Except as otherwise expressly stated in this Notice, the rights and remedies of the parties are cumulative, and the exercise or failure to exercise one or more of such rights or remedies by either party shall not preclude the exercise by it, at the same time or different times, of any right or remedy for the same default or any other default by the other party. No waiver by City of any default or breach by Owner hereunder shall be implied from any omission by City to take action on account of such default if such default persists or is repeated, and no express waiver shall affect any default other than the default specified in the waiver, and such waiver shall be operative only for the time and to the extent therein stated Waivers of any covenant, term, or condition contained herein shall not be construed as a waiver of any subsequent breach of the same covenant, term or condition. The consent or approval by City to or of any act by Owner requiring further consent or approval shall not be deemed to waive or render unnecessary the consent or approval to or of any subsequent similar act. The exercise of any right, power, or remedy shall in no event constitute a cure or a waiver of any default under this Notice, nor shall it invalidate any act done pursuant to notice of default, or prejudice City In the exercise of any right, power, or remedy hereunder. 12 Only the City and the Owner, its successor, and assigns in and to the Dwelling Unit shall have the right to consent and agree to changes in, or to eliminate in whole or in part, this Notice or to subject the Dwelling Unit to additional covenants, easements, or other restrictions without the consent of any tenant, lessee, easement holder, licensee, trustee, beneficiary under a deed of trust (other than the Senior First Mortgage Loan) or any other person or entity having an interest less than a fee in the Dwelling Unit This Notice, without regard to technical classification or designation, shall not benefit or be enforceable by any person, or firm, or corporation, public or private, except the City and the Owner and their respective successors and assigns. 13 Acceptance of Terms by Owner By execution of this Notice, Owner accepts and agrees to be bound by all of the covenants and restrictions contained in this Notice, and further acknowledges receipt of and agrees to be bound by the provisions of this Notice 14. Non -liability of City In no event shall City become in any way liable or obligated to Owner or to any successor -in -interest of Owner by reason of the Option, nor shall City be in any way obligated or liable to Owner or any successor- in -interest of Owner for any failure to exercise such Option City shall be not be liable to Owner or become obligated in any manner to any owner by reason of the enforcement of this Notice, nor shall City be in any way obligated or liable to Owner or any subsequent owner for any failure of any purchaser to consummate a purchase of the Dwelling Unit or to comply with the terms of any agreement of escrow for the sale of the Dwelling Unit. Only the purchaser executing Page 13 7/15/15 a purchase agreement or escrow instruction shall be liable to Owner or any owner pursuant to the terms of any such agreement or escrow instructions City shall not be liable or responsible for any defect in the condition of the Dwelling Unit of whatever nature and Owner, on behalf of itself and any successor -in -interest of Owner, agrees to release City from any such liability and/or responsibility and further agrees to hold City harmless from any claim or cause of action brought by third parties arising out of any such defect 15 Invalid Provisions If any one or more of the provisions contained in this Notice shall for any reason be held to be invalid, illegal or unenforceable in any respect, then such provision or provisions shall be deemed severable from the remaining provisions contained in this Notice, and this Notice shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein 16. Controlling Law The internal laws of the State of California shall govern the interpretation and enforcement of this Notice 17. Interpretation of Notice The terms of this Notice shall be interpreted to encourage to the extent possible that the Dwelling Unit and any mortgage payments of the Dwelling Unit remain affordable to Very Low Income Households 18 Nondiscrimination 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 Dwelling Unit, or any part thereof, nor shall Owner or any person claiming under or through Owner 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 of the Dwelling Unit 19 Form of Nondiscrimination and Nonseg_regation Clauses All deeds, contracts or leases relating or pertaining to the Dwelling Unit 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 any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, Page 14 7/15/15 subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955 2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises herein conveyed, nor shall the grantee or any person claiming under or through him or her, establish or permit any 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 the premises 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 That there shall be no discrimination against or segregation of any person or group of persons, on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926 1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955 2 of the Government Code, 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 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 any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926 1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the land, nor shall the transferee itself 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, sublessees, subtenants, or vendees of the land " 20 Counterparts This Notice may be executed in any number of counterparts with the same force and effect as if executed in the form of a single document [Remainder of this page intentionally left blank ] Page 15 7/15/15 IN WITNESS WHEREOF, the parties have executed this Notice as of the day and year written below OWNER CTfY By CITY OF HUNTINGTON BEACH, Raul Cendejas Guzman a municipal co oration of the State of Califo' Dated A®/ / I Adelina Lopez de Cendejas Dated Manager Dated D '/au/qROVED Director of Economic Development APPROVED KANE, BALLMER & BERKMAN Spec 1,Counsel Sus py [Signatures continued on following page] Page 16 7/15/15 A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. STATE OF CALIFORNIA ) ) ss COUNTY OF ORANGE ) On July 20, 2015 before me, P. L. Esparza, Notary Public, personally appeared Fred A. Wilson and Ken Domer 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. LqpP l ESPAaZA WITNESS my hand and official seal. Commission #� 2032750 Notary Public - CaWornia Orange County M Comm E res Au 4, 2017 (Seal) (Notary Signatur IN WITNESS WHEREOF, the parties have executed this Notice as of the day and year written below OWNER By �9 j� u �Gi cP- 10 Raul Cendej as Gu man Dated- -71 1 I s By �CW\�AGA nde� Adelma Lopez de Cendejas Dated '7 — 18 -- t S CITY CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California City Manager Dated INITIATED AND APPROVED Director of Economic Development APPROVED AS TO FORM City Attorney KANE, BALLMER & BERKMAN Special Counsel Susan Apy [Signatures continued on following page] Page 16 7/15/15 ■ A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document STATE OF CALIFORNIA COUNTY OF o10-/A On l ?g , 20 ls, before me, Rt rA A - R-OSs a /U&Zar� Pul)Ar- (here insert name and title of th fficer) personally appeared 1z," 1. CI---)vDCTA- S G-0-bq M I /gyp (✓ U M A- Lo P 1✓-:2:7 Ae- CL-7)J D !":M- ' , who proved to me on the basis of satisfactory evidence to be the person(s) whz6gl*c name s) subscribed to the within instrument and acknowledged to me that the executed the same in te authorized capacity(ies), and that by ei signature(s) on the instrumenperson(s), or the entity upon behalf of which the person(s) 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 r RITA A. ROSS Comnussion # 2103706 Notary Pubk - California Oranpa County Donn, 1 1 (Seal) 2056-99886\RJD403\1245584 2 3/12/15 3-iia-1 CERTIFICATION Pursuant to the provisions of Government Code 273617, I certify under penalty of perjury that the Notary Seal on the document to which this statement is attached reads as follows Name of Notary �,1 +-t . D 5 5 Commission no : a P 3 —70to County where bond is filed. 0 CLpa) U -c- Commission expiration date: 15 1 Qolci V endor/Manufacturer's no. N Pursuant to the provisions of Government Code 27361.7, I certify under penalty of perjury that the illegible portion of this document to which this statement is attached reads as follows: pursuant to the provisions of Government Code 27361.7, I certify under penalty of perjury that r1he portion of this document to which thus statement is attached reads as follows: A NOTARY PUBLIC, personally appeared before me, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the mstrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct Wn-NESS my hand and official seal. ` (Seal) Signature PLACE OF EXECUTION: DATE. SIGNATURE. DPS Agent 0 ,a HABITAT HABITAT FOR HUMANITY OF ORANGE COUNTY, INC, a California non-profit religious corporation Dated 17 ZOf jf BY yot Name- On& 6hdpar"D� �I Its Ii/uef F!rlaklaicd Officer B Y Name - Its jgP'GS t pL-NT ( CGG Page 17 7/15/15 A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. STATE OF CALIFORNIA COUNTY OF QP,4 V C--,6 On ` �C 1 �� , 20 15 before me, R L'7-A /k (z.o g a Nc7j'a rca f � �E. (here insertname and title of officer) personally appeared Ll AJDA, 5'1 e-PA-R-D -1 S'1-/^Rd/\I eLC1 S who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) subscribed to the within instrument and acknowledged to me that he/ /� executed the same in hrg/1eT/ ei authorized capacity(ies), and that by IIW/ / eir signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true aAcorrect. W Commission #► 2103706 Notary Pubk - Uffornls Maps county (Seal) 2056-99886\RJD403\1245584 2 3/12/15 EXHIBIT "A" LEGAL DESCRIPTION OF THE PROPERTY That certain real property located in the City of Huntington Beach, County of Orange, State of California, more particularly described as follows PARCEL 1 Unit 1 (the "Unit"), as shown and described in the Condominium Plan for Patterson at Huntington Condominiums (together with any amendments thereto, collectively, the "Plan") covering Parcel 1 of Parcel Map No. 2011-104, as such Parcel is shown on the Parcel Map ("Map"), filed in Book 372, at Pages 31-33 of Parcel Maps, in the Office of the Orange County Recorder, recorded on November 2, 2011, as Instrument No 2011000553373 in the Official Records of Orange County, California ("Official Records"), which Plan was recorded in the Official Records on November 18, 2011, as Instrument No. 2011000588862, together with an undivided One -Half (1/2) interest as tenant -in -common in the Common Area as shown and described in the Condominium Plan and exclusive easements as are shown as appurtenant to the Unit PARCEL 2 An undivided one-half (1/2) fee simple interest as a tenant in common in and to the Common Area described in the Plan PARCEL 3 Exclusive easements for the benefit of the Unit appurtenant to Parcel No 1 and Parcel No. 2, described above, for porch and yard purposes, over those portions of the Common Area as shown numbered and assigned on the Plan or as described in the Declaration, and internal and external telephone wiring, as installed by Grantor PARCEL 4 Nonexclusive easements for access, drainage, encroachment, maintenance, repair, and for other purposes, all as may be shown on the Plan and the Map, and as described in the Declaration of Covenants, Conditions and Restrictions and Reservation of Easements for Patterson at Huntington Condominiums, recorded on November 18, 2011 as Instrument No. 2011000588863, in Official Records (together with any amendments thereto, collectively, the "Declaration") 2056-99886\RJD403\1245584 2 3/12/15 Kecuraing icequebmu oy: First American Title Subdivisian Dept. r RECORDING RtQUESTED BY �► �qo�-Sib AND WHEN RECORDED MAIL TO City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attn Director of Economic Development Recorded in Official Records, Orange County Hugh Nguyen, Clerk -Recorder I II 11H 1 i 11� 111 III 1111111 Ell 111 1i III NO FEE *$ R 0 0 0 7 7 6 8 5 6 3$ 2015000430364 3:01 pm 08/18/15 217 402 R23 3 0.00 0 00 0.00 0.00 6 00 0.00 0.00 0 00 APN 1S-4'34i- 2Z REQUEST FOR NOTICE UNDER §292413 CIVIL CODE In accordance with Section 2924b, Civil Code, request is hereby made that a copy of any NOTICE OF DEFAULT and a copy of any NOTICE OF SALE under the DEED OF TRUST recorded as Instrument No. , on Z 6 4-b , 2015, official Records of Orange County, California, and describing land therern a * 2oIE00047g32? SEE EXHIBIT 1 ATTACHED HERETO executed by Raul Cendejas Guzman and Adelina Lopez de Cendejas, as Trustor, in which Habitat for Humanity of Orange County, Inc. is named as Beneficiary, and First American Title Company as Trustee, be mailed to p1%r-ICIPIL f3USIN65S City of Huntington Beach E }-ree recordi nc fzoLum 2000 Main Street Cl ov {- . C O d-e SPech o n Huntington Beach, CA 92648 Attn Director of Economic 213 FS Development NOTICE: A COPY OF ANY NOTICE TOF DEFAULT AND OF ANY HIS RECORDED REQUEST.TICE OF SALEIFYOUR ADDRESS CHANGES, A NEW WILL BE SENT ONLY TO THE ADDRESS CONTAIN REQUEST MUST BE RECORDED. DATED. � I � , 2015 CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California By e'D &/ /Soy. Title: City Manager 2056-99886\RJD4031124 Recording Requested By. - first American Title 19 Subdiwsm Dept. RECORDING REQUESTED BY -4 �go:1slb AND WHEN RECORDED MAIL TO City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attn Director of Economic Development APN i5 '3�i- 2-2- REQUEST FOR NOTICE UNDER §292413 CIVIL CODE In accordance with Section 2924b, Civil Code, request is hereby made that a copy of any NOTICE OF DEFAULT and a copy of any NOTICE OF SALE under the DEED OF TRUST recorded as Instrument No 10 `1 , on Z 6 4--�3 , 2015, Official Records of Orange County, California, and describing land therein at * 20i%ooL4Fg32? SEE EXHIBIT 1 ATTACHED HERETO executed by Raul Cendejas Guzman and Adelina Lopez de Cendejas, as Trustor, in which Habitat for Humanity of Orange County, Inc. is named as Beneficiary, and First American Title Company as Trustee, be mailed to City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attn Director of Economic Development 04;:FICIPL GUS, IN6SS }-ree j^eCc v di n,� Icq'yesFec 'O}.CcceCVCh®j.-I 21 3 F3 NOTICE: A COPY OF ANY NOTICE OF DEFAULT AND OF ANY NOTICE OF SALE WILL BE SENT ONLY TO THE ADDRESS CONTAINED IN THIS RECORDED REQUEST. IF YOUR ADDRESS CHANGES, A NEW REQUEST MUST BE RECORDED. DATED 7 1 q"' , 2015 CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California By rj /& Nam F'ee-b 1011Sdr. Title City Manager 2056-99886\RJD403\124558: 3/12/ �A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. STATE OF CALIFORNIA ) ) ss COUNTY OF ORANGE ) On July 20, 2015, before me, P. L. Esparza, Notary Public, personally appeared Fred A. Wilson 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. P L E3PAf1IA WITNESS my hand and official seal. Commission * 2032750 Notary Public - California Orange County aMy Comm Expires Aug4, 2017' (Seal) (Notary i ure) .As EXHIBIT 1 LEGAL DESCRIPTION OF THE PROPERTY That certain real property located in the City of Huntington Beach, County of Orange, State of California, more particularly described as follows PARCEL 1 Unit 1 (the "Unit"), as shown and described in the Condominium Plan for Patterson at Huntington Condominiums (together with any amendments thereto, collectively, the "Plan") covering Parcel 1 of Parcel Map No 2011-104, as such Parcel is shown on the Parcel Map ("Map"), filed in Book 372, at Pages 31-33 of Parcel Maps, in the Office of the Orange County Recorder, recorded on November 2, 2011, as Instrument No 2011000553373 in the Official Records of Orange County, California ("Official Records"), which Plan was recorded in the Official Records on November 18, 2011, as Instrument No 2011000588862, together with an undivided One -Half (1/2) interest as tenant -in -common in the Common Area as shown and described in the Condominium Plan and exclusive easements as are shown as appurtenant to the Unit PARCEL 2. An undivided one-half (1 /2) fee simple interest as a tenant in common in and to the Common Area described in the Plan PARCEL 3 Exclusive easements for the benefit of the Unit appurtenant to Parcel No. 1 and Parcel No. 2, described above, for porch and yard purposes, over those portions of the Common Area as shown numbered and assigned on the Plan or as described in the Declaration, and internal and external telephone wiring, as installed by Grantor PARCEL 4 Nonexclusive easements for access, drainage, encroachment, maintenance, repair, and for other purposes, all as may be shown on the Plan and the Map, and as described in the Declaration of Covenants, Conditions and Restrictions and Reservation of Easements for Patterson at Huntington Condominiums, recorded on November 18, 2011 as Instrument No 2011000588863, in Official Records (together with any amendments thereto, collectively, the "Declaration") 2056-99886\RJD403\1245582 3/12/1 Recording Requested By: • first AmencanTitle Subdivision Dept. RECORDING REQUESTED BY: AND WHEN RECORDED MAIL TO: City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attn: Director of Economic Development *-Aq &4151V Recorded in Official Records, Orange County Hugh Nguyen, Clerk -Recorder II i II I I II I II II I III II I I I I I I I I I I I III 8.00 *$ R 0 0 0 7 7 6 8 5 5 5$ 2015000430356 3: 01 pm 08118115 217 402 NO3 7 0.00 0.00 0.00 0 00 0 00 0.00 0.00 0.00 NOTICE OF TERNIINATION OF OPTION AGREEMENT (18451 Patterson Lane, Unit 101, Huntington Beach, CA 92646) r This Notice of Termination of Option Agreement is dated for identification purposes D , 2015, and is entered into b the City of Huntington Beach, a California municipal corporation ("City' and Habitat for en y ty � Humanity of Orange County, Inc., a California nonprofit religious corporation ("Habitat" }. WHEREAS, Habitat is the owner of certain real property located at 18451 Patterson Lane, Unit 101, Huntington Beach, CA 92646, more particularly described on Schedule 1 attached hereto (the "Property"); and WHEREAS, the Property is subject to that certain Option Agreement (the "Option Agreement"} recorded on December 7, 2011, as Instrument No. 2011000647507 in the Official Records of the Recorder of Orange County, California ("Official Records'); and WHEREAS, pursuant to the Option Agreement, Habitat granted an option to purchase the Property under certain circumstances to City; and WHEREAS, Habitat and City desire to terminate the Option Agreement: [CONTINUED ON FOLLOWING PAGE] oc26856vI 2056-998861RJD403\ 1245580 1 3/12/15 Recording Requested By: First American Title Subdivision Dept. RECORDING REQUESTED BY: AND WHEN RECORDED MAIL TO: City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attn Director of Economic Development NOTICE OF TERMINATION OF OPTION AGREEMENT (18451 Patterson Lane, Unit 101, Huntington Beach, CA 92646) This Notice of Termination of Option Agreement is dated for identification purposes JUI , 2015, and is entered into by the City of Huntington Beach, a California municipal corporation ("City' and Habitat for Humanity of Orange County, Inc., a California nonprofit religious corporation ("Habitat's WHEREAS, Habitat is the owner of certain real property located at 18451 Patterson Lane, Unit 101, Huntington Beach, CA 92646, more particularly described on Schedule 1 attached hereto (the "Property"), and WHEREAS, the Property is subject to that certain Option Agreement (the "Option Agreement's recorded on December 7, 2011, as Instrument No. 2011000647507 in the Official Records of the Recorder of Orange County, California ( "Official Records'; and WHEREAS, pursuant to the Option Agreement, Habitat granted an option to purchase the Property under certain circumstances to City, and WHEREAS, Habitat and City desire to terminate the Option Agreement: [CONTINUED ON FOLLOWING PAGE] oc26856v1 2056-99886\RJD403\ 1245580 1 3/12/15 NOW, THEREFORE, Habitat and City hereby terminate the Option Agreement. As a result hereof, the Option Agreement is of no further force or effect as to, and shall no longer be an encumbrance on, the Property IN WITNESS WHEREOF, City and Habitat have executed this instrument on the day and year set forth in their acknowledgments below "HABITAT" "CITY" HABITAT FOR HUMANITY OF ORANGE COUNTY, CITY OUNTINGTON BEACH, a municipal INC , a California nonprofit religious corporation corporat pfthjState of California By- G Lmda Shepard, Chief Financial Officer By. �!,� Sharon Ellis, President and CEO Manager INITIATED =�- D. r/na� Director of Economic Development APPROVED AS TO FORM Counsel Susan Apy pecial oc26856v1 2056-99886\RJD403\12455801 3/12/15 A notary public or other officer completing this certificate venfies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document STATE OF CALIFORNIA COUNTY OF ORANGE On jj&" - , 20 l5, before me, ( TA A - 62 D SS-, 6- M Jkc- r (here insert name and title of the o cer) personally appeared Z-11-V DA 1-y GPA-ie-D who proved to me on the basis of satisfactory evidence to be the person( whose name( i /pAz subscribed to the within instrument and acknowledged to me that she y executed the same in bte�titeit authorized capacity(-fieS), and that by bis t}wffr signaturQM on the instrument the person, or the entity upon behalf of which the personal 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-mv hand and official RITA A ROSS Commission et 2103706 Notary Public - California Orange County (Seal) 2056-99886\RJD403\1245580 1 3/12/15 4r 3-i-1 CERTIFICATION pursuant to the provisions of Government tCod 27361 7,1t is certify rt tied reads malty of per)ury that the Notary Seal on the document Name of Notary 1 D 5 S Commission no.. a County where bond is filed: (D ►�� - l� `� Commission expiration date: rZ_ I�Ul Vendor/Manufacturer's no. N N A-:�— Pursuant to the provisions of Government Code 273617, I certify under penalty of perjury that the illegible portion of this document to which this statement is attached reads as follows. Pursuant to the provisions of Government Code 273617, I certify under penalty of perjury that the ille ble ortion of this document to which this statement is attached reads as follows: State of County of personally appeared On before me, A NOTARY PUBLIC, p who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) 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 Signature PLACE OF EXECUTION:��- DATE: SIGNATURE: (Seal) DPS Agent ti A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document STATE OF CALIFORNIA COUNTY OF ORANGE On n i- W � , 2015:, before me, &0 1 TA A - if 05 S� A 007zz f t �rcA "c, (here insert name and title of the rcer) personally appeared S�- AR.dtil 4✓L-L4 S who proved to me on the basis of satisfactory evidence to be the person( whose name(R)OW subscribed to the within instrument and acknowledged to me that 339/&tom executed the same in lrs er tbew authorized capacityOeg), and that by er � signatur*) on the instrument the person(, or the entity upon behalf of which the person(s) acted, executed the instrument I certify under PENALTY OF PERJURY under the laws of the State of California that the foreaoinaiwaaraph is true and correct. n i`�1 Commrss �i 2103706 Notar y P tic - CalifMIS ,-."Grange County omm Expires AW MA R11A A ROSS Commission # 2103706 Notary Public - CaIM� Orange County (Seal) Gomm Expires AV 1 2056-99886\RJD403\ 1245580 1 3/12/15 A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. ACKNOWLEDGMENT STATE OF CALIFORNIA ss COUNTY OF ORANGE On July 20, 2015 before me, P. L. Esparza, Notary Public, personally appeared Fred A. Wilson and Ken Domer 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. WITNESS my hand and official seal. (Notary Sign ure) P L ESPARZA Commission # 2032750 Notary Public - California Orange County My Comm Expires Ava 4, 2017 (Seal) SCHEDULEI TO NOTICE OF TERMINATION LEGAL DESCRIPTION OF THE PROPERTY That certain real property located in the City of Huntington Beach, County of Orange, State of California, more particularly described as follows: PARCEL 1 Unit 1 (the "Unit"), as shown and described in the Condominium Plan for Patterson at Huntington Condominiums (together with any amendments thereto, collectively, the "Plan") covering Parcel 1 of Parcel Map No. 2011-104, as such Parcel is shown on the Parcel Map ("Map"), filed in Book 372, at Pages 31-33 of Parcel Maps, in the Office of the Orange County Recorder, recorded on November 2, 2011, as Instrument No 2011000553373 in the Official Records of Orange County, California ("Official Records"), which Plan was recorded in the Official Records on November 18, 2011, as Instrument No 2011000588862, together with an undivided One -Half (1/2) interest as tenant -in -common in the Common Area as shown and described in the Condominium Plan and exclusive easements as are shown as appurtenant to the Unit PARCEL 2 An undivided one-half (1 /2) fee simple interest as a tenant in common in and to the Common Area described in the Plan PARCEL 3 Exclusive easements for the benefit of the Unit appurtenant to Parcel No. 1 and Parcel No 2, described above, for porch and yard purposes, over those portions of the Common Area as shown numbered and assigned on the Plan or as described in the Declaration, and internal and external telephone wiring, as installed by Grantor Nonexclusive easements for access, drainage, encroachment, maintenance, repair, and for other purposes, all as may be shown on the Plan and the Map, and as described in the Declaration of Covenants, Conditions and Restrictions and Reservation of Easements for Patterson at Huntington Condominiums, recorded on November 18, 2011 as Instrument No. 2011000588863, in Official Records (together with any amendments thereto, collectively, the "Declaration"). Re !fig Regta�ste� p rgArrietican Tit, S.6-ut4 r�s',ioorpept. Recording Requested by and When Recorded Return to: City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attention: City Clerk - 3 qb -�51 b Recorded in Official Records, Orange County Hugh Nguyen, Clerk -Recorder III II I I II I II II I III II I I I I I I II I I III III 33.00 *$ R 0 0 0 7 7 6 8 5 6 1$ 201500000362 3:01 pm 08/18/15 217 402 NO3 F13 9 0.00 0.00 0.00 0.00 24.00 0 00 0.00 0 00 SPACE ABOVE THIS LINE FOR RECORDER'S USE c�.griPd1 l� (UJ4e"K Pky- AMENDED NOTICE OF AFFORDABILITY RESTRICTIONS ON TRANSFER OF PROPERTY NOTICE IS HEREBY GIVEN that pursuant to Health & Safety Code Section 33334.3(f), the CITY OF HUNTINGTON BEACH, a municipal corporation (the "City"), is recording this Amended Notice of Affordability Restrictions on Transfer of Property (hereinafter the "Notice") with regard to the property located at 18451 Patterson Lane, Unit No. 101, Huntington Beach, California 92646, and more particularly described in Exhibit "A" attached hereto (the "Property"). This Notice supersedes and replaces in its entirety that certain Notice of Affordability Restrictions on Transfer of Property dated September 23, 2011 and recorded September 29, 2011 as Document No. 2011000484328. The Property is subject to an Addendum executed by City and Raul Cendejas Guzman ("R. Guzman") and Adelina Lopez de Cenjedas ("A Cenjedas" and together with R. Guzman collectively referred to herein as "Owner") (the "Addendum") attached to that certain Grant Deed to Purchasers conveying the Property to Owner executed by Habitat For Humanity of Orange County, Inc. ("Habitat") (as Grantor) and Owner (as Grantee) recorded concurrently herewith in the Official Records of the County Recorder's Office of Orange County (the "Official Records"), and that certain Notice of Restrictions and Option to Purchase Dwelling Unit executed by City, Owner and Habitat (the "City Restrictions") also recorded concurrently herewith in the Official Records, which restrict the use of Page 1 of 4 CENDEJAS AMENDED NOTICE OF AFFORDABILITY RESTRICTIONS v2 Re ng Recc}ueste0y: b Subdl rAsio_QPept. Recording Requested by and When Recorded Return to: City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attention: City Clerk -J� 2 SPACE ABOVE THIS LINE FOR RECORDER'S USE AMENDED NOTICE OF AFFORDABILITY RESTRICTIONS ON TRANSFER OF PROPERTY NOTICE IS HEREBY GIVEN that pursuant to Health & Safety Code Section 33334.3(f), the CITY OF HUNTINGTON BEACH, a municipal corporation (the "City"), is recording this Amended Notice of Affordability Restrictions on Transfer of Property (hereinafter the "Notice") with regard to the property located at 18451 Patterson Lane, Unit No. 101, Huntington Beach, California 92646, and more particularly described in Exhibit "A" attached hereto (the "Property"). This Notice supersedes and replaces in its entirety that certain Notice of Affordability Restrictions on Transfer of Property dated September 23, 2011 and recorded September 29, 2011 as Document No. 2011000484328. The Property is subject to an Addendum executed by City and Raul Cendejas Guzman ("R Guzman") and Adelina Lopez de Cenjedas ("A Cenjedas" and together with R. Guzman collectively referred to herein as "Owner") (the "Addendum") attached to that certain Grant Deed to Purchasers conveying the Property to Owner executed by Habitat For Humanity of Orange County, Inc. ("Habitat") (as Grantor) and Owner (as Grantee) recorded concurrently herewith in the Official Records of the County Recorder's Office of Orange County (the "Official Records"), and that certain Notice of Restrictions and Option to Purchase Dwelling Unit executed by City, Owner and Habitat (the "City Restrictions") also recorded concurrently herewith in the Official Records, which restrict the use of Page 1 of 4 CENDEJAS AMENDED NOTICE OF AFFORDABILITY RESTRICTIONS Q the Property as follows (any capitalized term not defined herein shall have the meaning ascribed to in the City Restrictions): 1. One (1) three -bedroom unit shall be owned and occupied exclusively by a Very Low Income Household at an Affordable Purchase Price, in accordance with and as more particularly described in the City Restrictions and the Addendum. 2. Owner shall occupy the Property as his or her or their primary residence, and the Property shall be used as the principal residence of Owner and Owner's household and for no other purpose. The Property shall not be leased or rented by Owner to any person or entity. The maximum occupancy of the Property shall not exceed the maximum occupancy allowed by the Uniform Housing Code. 3. For purposes of the City Restrictions and the Addendum, the following capitalized terms shall have the following meanings: a. "Affordable Purchase Price" shall mean a purchase price for the Property that does not exceed an Affordable Housing Cost. b. "Affordable Housing Cost" shall mean as to the initial sale of the Property and any sale of the Property during the first fifteen years of the Affordability Period the lesser of, (i) monthly housing payments as defined by section 6920 of Title 25 of the California Code of Regulations, including payments for principal, interest, mortgage loan insurance fees, property taxes and assessments, fire and casualty insurance, a reasonable utility allowance (unless precluded by Federal requirements) and homeowner association fees, if any, which do not exceed the maximum housing cost allowed for Very Low Income Households in accordance with Section 50052.5 of the California Health and Safety Code, as may be amended from time to time, and (ii) a purchase price for the type of single family housing that does not exceed 95 percent of the median purchase price Page 2 of 4 CENDEJAS AMENDED NOTICE OF AFFORDABILITY RESTRICTIONS v2 for the area pursuant to § 92.254 a. 2. ii. and iii. of the HOME Regulations as such now exists and as may hereafter be amended. Commencing on the sixteenth year of the Affordability Period, the term "Affordable Housing Cost" shall only have the meaning set forth in clause (i) of the preceding sentence. C. "Very Low Income Household" shall mean the more restrictive of the following, (i) a Household whose gross income does not exceed the maximum qualifying income for a "very low household" as defined in Section 50105 of Health and Safety Code, and (ii) a Household whose annual gross income does not exceed the maximum qualifying income for "Very low-income families" as defined in 24 Code of Federal Regulations (CFR) Part 92, Section 92.2. "Gross income" shall be determined in accordance with Section 6914 of Title 25 of the California Code of Regulations and 24 CFR Part 92, Section 92.203` (b)(2). The affordability restrictions imposed on the Property by the Addendum and the City Restrictions are scheduled to expire on the date that is sixty (60) years after the City issues a permanent certificate of occupancy for the Property. This Notice is recorded for the purpose of providing notice only and it in no way modifies the provisions of the Addendum or the City Restrictions. This Notice may be executed in any number of counterparts with the same force and effect as if executed in the form of a single document. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] [SIGNATURES ON FOLLOWING PAGE] Page 3 of 4 CENDEJAS AMENDED NOTICE OF AFFORDABILITY RESTRICTIONS v2 CITY OF HUNTINGTON BEACH, a municipal corporation of the State of Cali Cit er INI ED A PPROVED: r Director of Economic Development ty KANE, BALLMER & BERKMAN HABITAT FOR HUMANITY OF ORANGE COUNTY, INC., a California nonprofit religious corporation USA 0 Linda Shepard, Chief Financial Officer Sharon Ellis, President / CEO Page 4 of 4 CENDEJAS AMENDED NOTICE OF AFFORDABILITY RESTRICTIONS Q A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. STATE OF CALIFORNIA ) ) ss COUNTY OF ORANGE ) On July 20, 2015 before me, P. L. Esparza, Notary Public, personally appeared Fred A. Wilson and Ken Domer 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 ESPMZA WITNESS my hand and official seal. Commission #f 2032750 Notary Public - CalNorma Orange County Comm E res Au 4.2017 (Seal) (Notary i Aa�0� CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California City Manager INITIATED AND APPROVED: Director of Economic Development APPROVED AS TO FORM: City Attorney KANE, BALLMER & BERKMAN Special Counsel Susan Apy HABITAT FOR HUMANITY OF ORANGE COUNTY, INC., a California nonprofit religious corporation By: Linda Shepard, Chief Financial Officer By: S aron Ellis, President CEO Page 4 of 4 CENDEJAS AMENDED NOTICE OF AFFORDABILITY RESTRICTIONS Q doc I A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document STATE OF CALIFORNIA COUNTY OF ORANGE On -UL 2015, before me, k l TA A- F-'LSs . ,- Nufa n i Pu-b�tc (here insert name and title* the officer) personally appeared Sf-1Q0M Eft LA S I W AJ DA SH E`-PARL) who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) W/e subscribed to the within instrument and acknowledged to me that W*-04�executed the same in l j authorized capacity(ies), and that by bt5/bK hei signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true andcgrrect my and of is seal RtTA A. i1;088 Commissia� +� 2t03106 ILO way Public • camor ft orate County jgnatuK (Seal) CENDEJAS AMENDED NOTICE OF AFFORDABILITY RESTRICTIONS v2 doc 3-in-1 CERT I:FICAT'ION Pursuant to the provisions of Government Code 273617, I certify under penalty of penury that the Notary Seal on the document to which `t this statement is attached reads as follows - Name of Notary 1 1 R D 5 S Commission no : a �D 't> �7o0 County where bond is filed: 0 �'�..�>n U `e_ Commission expiration date: �0 �- 1 �v�c� Vendor/Manufacturer's no: N� Pursuant to the provisions of Government Code 273617, I certify under penalty of penury that the illegible portion of this document to which this statement is attached reads as follows: Pursuant to the provisions of Government Code 27361.7, I certify under penalty of perjury that the illegible portion of this document to which this statement is attached reads as follows: State of County of personally appeared on before me, A NOTARY PUBLIC, p who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) 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. Signature PLACE OF EXECUTION. DATE. SIGNATURE: (Seal) —�I— /IS- , DPS Agent 0 Exhibit A LEGAL DESCRIPTION All that certain real property located in the City of Huntington Beach, County of Orange, State of California, described as follows PARCEL 1 Unit 1 (the "Unit"), as shown and described in the Condominium Plan for Patterson at Huntington Condominiums (together with any amendments thereto, collectively, the "Plan") covering Parcel 1 of Parcel Map No 2011-104, as such Parcel is shown on the Parcel Map ("Map"), filed in Book 372, at Pages 31-33 of Parcel Maps, in the Office of the Orange County Recorder, recorded on November 2, 2011, as Instrument No 2011000553373 in the Official Records of Orange County, California ("Official Records"), which Plan was recorded in the Official Records on November 18, 2011, as Instrument No 2011000588862, together with an undivided One -Half (1/2) interest as tenant -in -common in the Common Area as shown and described in the Condominium Plan and exclusive easements as are shown as appurtenant to the Unit PARCEL 2 An undivided one-half (1 /2) fee simple interest as a tenant in common in and to the Common Area described in the Plan PARCEL 3 Exclusive easements for the benefit of the Unit appurtenant to Parcel No 1 and Parcel No 2, described above, for porch and yard purposes, over those portions of the Common Area as shown numbered and assigned on the Plan or as described in the Declaration, and internal and external telephone wiring, as installed by Grantor PARCEL 4 Nonexclusive easements for access, drainage, encroachment, maintenance, repair, and for other purposes, all as may be shown on the Plan and the Map, and as described in the Declaration of Covenants, Conditions and Restrictions and Reservation of Easements for Patterson at Huntington Condominiums, recorded on November 18, 2011 as Instrument No 2011000588863, in Official Records (together with any amendments thereto, collectively, the "Declaration") Exhibit A CENDEJAS AMENDED NOTICE OF AFFORDABILITY RESTRICTIONS v2 Recording Requested Syc First American Title Subdivision Dept. RECORDING REQUESTED BY: AND WHEN RECORDED MAIL TO: City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attn: Director of Economic Development 3utn,4!�q� Recorded in Official Records, Orange County Hugh Nguyen, Clerk -Recorder �11 I 11] II III III II 1 III 1111 I I [11 I I I II I I III 8.00 *$ R 0 0 0 7 7 6 8 5 5 6$ 2015000430357 3:01 pm 08/18/15 217 402 NO3 7 0.00 0.00 0.00 0 00 0 00 0.00 0.00 0.00 NOTICE OF TERMINATION OF DECLARATION OF CONDITIONS, COVENANTS AND RESTRICTIONS FOR PROPERTY (RESALE RESTRICTIONS) (18451 Patterson Lane, Unit 101, Huntington Beach, CA 92646) This Notice of Termination of Declaration of Conditions, Covenants and Restrictions for Property (Resale Restrictions) is dated for identification purposes . Ju I L\ 3 t; 2015, and is entered into by the City of Huntington Beach, a California municipal corporation ("City'l and Habitat for Humanity of Orange County, Inc., a California nonprofit religious corporation ("Habitat's. WHEREAS, Habitat is the owner of certain real property located at 18451 Patterson Lane, Unit 101, Huntington Beach, CA 92646, more particularly described on Schedule 1 attached hereto (the "Property"); and WHEREAS, the Property is subject to that certain Declaration of Conditions, Covenants and Restrictions for Property (Resale Restrictions) (the "Declaration's dated September 6, 2011 and recorded on September 29, 2011, as Instrument No. 2011000483564 in the Official Records of the Recorder of Orange County, California ("Official Records'; and WHEREAS, the Declaration was amended by that certain Amendment to Declaration of Conditions, Covenants and Restrictions for Property (Resale Restrictions) (the "Amendment's dated July 9, 2012 and recorded on July 10, 2012, as Instrument No. 2012000390398 in the Official Records of the Recorder of Orange County, California; and WHEREAS, Habitat executed the Declaration and City is the Beneficiary of the all the enforcement rights thereunder. [CONTINUED ON FOLLOWING RAGE] oc26856v1 2056-998861RJD40311245579 1 3/12/15 Recording Requested By: First American Title Subdivision Dept. RECORDING REQUESTI AND WHEN RECORDED City of Huntington Beach 2000 Main Street Huntington Beach, CA 9264E Attn Director of Economic I 43qe4�- NOTICE OF TERMINATION OF DECLARATION OF CONDITIONS, COVENANTS AND RESTRICTIONS FOR PROPERTY (RESALE RESTRICTIONS) (18451 Patterson Lane, Unit 101, Huntington Beach, CA 92646) This Notice of Termination of Declaration of Conditions, Covenants and Restrictions for Property (Resale Restrictions) is dated for identification purposes I I b +V; 2015, and is entered into by the City of Huntington Beach, a California municipal corporation ("City'l and Habitat for Humanity of Orange County, Inc , a California nonprofit religious corporation ("Habitat's WHEREAS, Habitat is the owner of certain real property located at 18451 Patterson Lane, Unit 101, Huntington Beach, CA 92646, more particularly described on Schedule 1 attached hereto (the "Property"), and WHEREAS, the Property is subject to that certain Declaration of Conditions, Covenants and Restrictions for Property (Resale Restrictions) (the "Declaration's dated September 6, 2011 and recorded on September 29, 2011, as Instrument No. 2011000483564 in the Official Records of the Recorder of Orange County, California ("Official Records', and WHEREAS, the Declaration was amended by that certain Amendment to Declaration of Conditions, Covenants and Restrictions for Property (Resale Restrictions) (the "Amendment's dated July 9, 2012 and recorded on July 10, 2012, as Instrument No 2012000390398 in the Official Records of the Recorder of Orange County, California; and WHEREAS, Habitat executed the Declaration and City is the Beneficiary of the all the enforcement rights thereunder [CONTINUED ON FOLLOWING PAGE) oc268560 2056-99886\RJD403\1245579 1 3/12/15 NOW, THEREFORE, Habitat and City hereby terminate the Declaration and the Amendment as to the Property. As a result hereof, the Declaration as amended by the Amendment is of no further force or effect as to, and shall no longer be an encumbrance on, the Property IN WITNESS WHEREOF, City and Habitat have executed this instrument on the day and year set forth in their acknowledgments below. "HABITAT" "CITY" HABITAT FOR HUMANITY OF ORANGE COUNTY, CITY INC., a California nonprofit religious corporation corpo: By Linda Shepard Chief Financial Officer HUNTINGTON BEACH, a municipal i bAe State of California Manager ' INITIATED A PPROVED. By �l l Aaron Ellis, President and CEO Director of Economic Development APPROVED AS TO FORM. Attorney INANE, BALLMER & BERKMAN Special Counsel JA S s Apy oc26856v1 2056-99886\RJD403\1245 579 1 3/12/15 205 6-99 8 8 6\R.1 D403 \ 124 5 5 79 1 3/12/15 A notary public or other officer completing this certificate venfies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document STATE OF CALIFORNIA COUNTY OF ORANGE On , 2015, before me, R( TA A /e055A Alclfar fa- &&G (here insert name and title otAe officer) personally appeared Ll IVDA- 5 (- ePA-p- D who proved to me on the basis of satisfactory evidence to be the person(g) whose name(x) 1s me subscribed to the within instrument and acknowledged to me that-*e sh t1* executed the same in NN�th6r authorized capacity(ieg), and that by lfs/(6�t�r signature(x) on the instrument the person(Ir), 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 Atdll A. i0� CoaaWWW • 2tO3* a Nay Publk - Ca wW& IZ Otage CW* —I—r— - W ft - .2alat (Seal) 205 6-998 86\RJD403 \ 1245 5 79 1 3/12/15 3-in-1 CERT'IFICAT'ION Pursuant to the provisions of Government Code 273617, I certify under penalty of perjury that the Notary Seal on the document to which this statement is attached reads as follows Name of Notary Commission no County where bond is filed, d %-PW) is `(�_ Commission expiration date: 1 a QC) lC Vendor/Manufacturer's no N ��— Pursuant to the provisions of Government Code 273617, I certify under penalty of perjury that the illegible portion of this document to which this statement is attached reads as follows. Pursuant to the provisions of Government Code 273617, I certify under penalty of perjury that - _L ,...1 _,.,. A -P— l l .,me the illegible portion oI tnis aocument to wrucu ulLb Z)��lil�u�- State of County of On before me, A NOTARY PUBLIC, personally appeared , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacrty(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) 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 Signature (Seal) PLACE OF EXECUTION: f �` DATE: ' SIGNATURE: DPS Agent 1W A A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document STATE OF CALIFORNIA COUNTY OF ORANGE On �71,� / , 201$, before me, k'tt (here insert name and title of the o cer) personally appeared SAA-R Q fQ U UA S who proved to me on the basis of satisfactory evidence to be the person(k) whose named 1s subscribed to the within instrument and acknowledged to me that, sh /icy executed the same in bts�r authorized capacity4K), and that by IYMO/Odr signature(K) on the instrument the person(, or the entity upon behalf of which the personM 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 (Seal) 2056-99886\RJD403\ 1245 5 79 1 3/12/15 A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. ACKNOWLEDGMENT STATE OF CALIFORNIA ) ) ss COUNTY OF ORANGE ) On July 20, 2015 before me, P. L. Esparza, Notary Public, personally appeared Fred A. Wilson and Ken Domer 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 ESPARIA WITNESS my hand and official seal. L.Mv Commission # 2032750 Notary Publoc - California Orange County Comm Ex ores Au 4, 2017 (Seal) (Notary Signa ) SCHEDULE 1 TO NOTICE OF TERMINATION LEGAL DESCRIPTION LEGAL DESCRIPTION OF THE PROPERTY That certain real property located in the City of Huntington Beach, County of Orange, State of California, more particularly described as follows PARCEL 1 Unit 1 (the "Unit"), as shown and described in the Condominium Plan for Patterson at Huntington Condominiums (together with any amendments thereto, collectively, the "Plan") covering Parcel 1 of Parcel Map No 2011-104, as such Parcel is shown on the Parcel Map ("Map"), filed in Book 372, at Pages 31-33 of Parcel Maps, in the Office of the Orange County Recorder, recorded on November 2, 2011, as Instrument No 2011000553373 in the Official Records of Orange County, California ("Official Records"), which Plan was recorded in the Official Records on November 18, 2011, as Instrument No 2011000588862, together with an undivided One -Half (1/2) interest as tenant -in -common in the Common Area as shown and described in the Condominium Plan and exclusive easements as are shown as appurtenant to the Unit PARCEL 2 An undivided one-half (1/2) fee simple interest as a tenant in common in and to the Common Area described in the Plan. PARCEL 3 Exclusive easements for the benefit of the Unit appurtenant to Parcel No 1 and Parcel No 2, described above, for porch and yard purposes, over those portions of the Common Area as shown numbered and assigned on the Plan or as described in the Declaration, and internal and external telephone wiring, as installed by Grantor PARCEL 4 Nonexclusive easements for access, drainage, encroachment, maintenance, repair, and for other purposes, all as may be shown on the Plan and the Map, and as described in the Declaration of Covenants, Conditions and Restrictions and Reservation of Easements for Patterson at Huntington Condominiums, recorded on November 18, 2011 as Instrument No. 2011000588863, in Official Records (together with any amendments thereto, collectively, the "Declaration") 2056-99886\RJD403\ 1245579 1 3/12/15 This Document was electronically recorded by City of Huntington Beach OFFICIAL BUSINESS Document entitled to free recording Per Government Code Section 6103 and 27383 RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO: City of Huntington Beach 2000 Main Street Huntington Beach, California 92648 Attention: Director of Economic Development Recorded in Official Records, Orange County Tom Daly, Clerk -Recorder IIIIIIIIIIIIIIII IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIJill IIIII IIIINC FEE 2012000390398 01:42pm 07/10/12 66 401 Al 11 0.00 0.00 0.00 0.00 30.00 0.00 0.00 0.00 AMENDMENT TO DECLARATION OF CONDITIONS, COVENANTS AND RESTRICTIONS FOR PROPERTY (RESALE RESTRICTIONS) This amendment to Declaration of Conditions, Covenants and Restrictions for Property (Resale Restrictions) (the "Amendment to City's Resale Restrictions") is dated as of 09 , 2012 by HABITAT FOR HUMANITY OF ORANGE COUNTY, INC., a California non-profit benefit corporation (the "Habitat"), and the CITY OF HUNTINGTON BEACH, a municipal corporation (the "City"). I. [§100] PURPOSE OF AMENDMENT TO CITY'S RESALE RESTRICTIONS Habitat and City previously executed that certain Declaration of Conditions, Covenants and Restrictions for Property (Resale Restrictions) dated September 6, 2011 and recorded on September 29, 2011 in the Official Records of the Recorder's Office of Orange County ("Official Records") as Document No. 2011000483564 (the "City's Resale Restrictions"). The City's Resale Restrictions, among other things, (i) restrict the use of that certain real property described in the legal description attached hereto as Attachment No. 1 and incorporated herein by this reference (the "Property") as two (2) single family residential units to be sold to and occupied by moderate, low and very low income families at an Affordable Housing Cost for the period set forth in the City's Resale Restrictions, and (ii) impose resale requirements. Habitat and the City entered into that certain AfIf6rdabk; Housing Property Transfer Agreement dated September 6, 2011 (the "Afforda)le Housing Agreement") as amended by that certain First Amendment to Affordable Housing Property Transfer Agreement dated February 6, 2012 (the "First Amendment") and that certain First L-npie nentation Agreement to Affordable Housing Property Transfer Agreement dated b , 2012 (the "First Implementation Agreement") The Affordable Housing Agreement, First Amendment and First Implementation Agreement are collectively referred to herein as the, "Affordable Housing Agreement." All capitalized terms not defined herein shall have the meaning ascribed to such term in the Affordable Housing Agreement. Page 1 Amendment to Resale Restrictions(execution).doc The City is responsible for administering the use of certain funds made available to it by the United States Department of Housing and Urban Development ("HUD") under the HOME Investment Partnerships Program (the "HOME Program") in accordance with the regulations issued by HUD and set forth in 24 Code of Federal Regulations ("CFR") Part 92 (the "HOME Regulations") for the purposes of strengthening public -private partnerships to provide decent, safe, sanitary, and affordable housing. Pursuant to the Affordable Housing Agreement, the City, among other things, provided a loan to Habitat in the amount of $748,437 derived from the HOME Program (the "HOME Loan") to pay a portion of the Development costs for the Dwelling Units. Pursuant to § 92.254 a. 3. of the HOME Regulations, the Dwelling Units must be acquired only by homebuyers whose families qualify as low-income households. The Dwelling Units have been assisted with moneys from the Low and Moderate Income Housing Fund established and maintained pursuant to California Health and Safety Code Section 33334.2 et se , therefore the Property is subject to California Community Redevelopment Law, commencing with Section 33000 of the Health and Safety Code and hereinafter referred to as the "CRL." The purpose of this Amendment to City's Resale Restrictions is to provide for the following revisions to the City's Resale Restrictions pursuant to the provisions of the First Amendment, First Implementation Agreement and § 92.254 a. 3. of the HOME Regulations, (i) delete all references to "Moderate Income Households" as an affordability level permitted under the City's Resale Restrictions, (ii) limit the affordability levels permitted under the City's Resale Restrictions to Low Income and Very Low Households only, and (iii) clarify that the City's Resale Restrictions, the Property and Habitat's use of the Property are subject to the CRL and the HOME Regulations. II. [§ 200] EFFECT OF AMENDMENT TO CITY'S RESALE RESTRICTIONS Except as expressly provided otherwise in this Amendment to City's Resale Restrictions, the City's Resale Restrictions remain in full force and effect, enforceable in accordance with its terms, without diminution or waiver of any kind of any right or remedy of the City thereunder. III. [§300] AMENDMENT TO RECITALS The recitals contained in the City's Resale Restrictions are hereby amended to add the following recitals: 1. "C. The Dwelling Units have been assisted with moneys from the Low and Moderate Income Housing Fund established and maintained pursuant to California Health and Safety Code Section 33334.2 et seg, therefore the Property is subject to California Community Redevelopment Law (commencing with Section 33000 of the Health and Safety Code and hereinafter referred to as the "CRL")." 2. "D. A development subsidy in the amount of $748,437, derived from the United States Department of Housing and Urban Development ("HUD") under the HOME Investment Partnerships Program (the "HOME Program") in accordance with the regulations issued by HUD and set forth in 24 Code of Federal Regulations ("CFR") Part 92 (the "HOME Page 2 Amendment to Resale Restrictions(execution).doc Regulations"), was made available to Covenanter by City in accordance with that certain Affordable Housing Property Transfer Agreement by and between City and Developer, dated as of September 6, 2011, as amended by that certain First Amendment to the Affordable Housing Property Transfer Agreement dated February 6, 2012 and as modified by that certain Implementation Agreement to the Affordable Housing Property Transfer Agreement dated ,TjX, Y 0,1' , 2012 (collectively the, "City Affordable Housing Agreement"). As such, Covenator's use of the Property is subject to the HOME Regulations. All capitalized terms not defined herein shall have the meaning ascribed to such terms in the City Affordable Housing Agreement." IV. [§400] AMENDMENT TO CITY'S RESALE RESTRICTIONS The City's Resale Restrictions is hereby amended as follows: 1. Delete all references to "Moderate Income Household" and "Moderate Income Households." 2. Provide that the term "Unit 1" shall mean the three —bedroom Dwelling Unit to be constructed on the Property. 3. Provide that the term "Unit 2" shall mean the four —bedroom Dwelling Unit to be constructed on the Property. 4. Section l.a., shall be deleted in its entirety and replaced with the following, "(a) Unit 1 shall be owned and occupied by Covenantor for subsequent sale to a qualified Very Low Income Household (as that term is defined in the City Affordable Housing Agreement)." Section Lb., shall be deleted in its entirety and replaced with the following, "(b) Unit 2 shall be owned and occupied by Covenantor for subsequent sale to a qualified Low Income Household (as that term is defined in the City Affordable Housing Agreement)." The second sentence in Section 1. (c) shall be deleted in its entirety and replaced with the following, ""Affordable Housing Cost" shall have the meaning attributed to it in the City Affordable Housing Agreement, as amended." T Add a Section 9 which provides the following: i. "9. Notwithstanding anything to the contrary contained herein, the terms of and provisions of this Declaration shall be subject to the CRL and HOME Regulations." V. [§500] NOTICE OF TRANSFER OF AFFORDABLE UNIT Section 2 of the City's Resale Resale Restrictions (Transfer of affordable unit) is hereby amended to delete the second paragraph commencing with the words, "Within (7) days of receiving such notice" and replace with the following paragraph: Page 3 Amendment to Resale Restrictions(execution).doc "In the event Covenantor intends to sell or otherwise effect a Transfer of a Dwelling Unit, Covenantor shall promptly notify City in writing of such intent ("Covenantor's Notice"). The written notice shall be given in accordance with Section 703 of the City Affordable Housing Agreement at least sixty (60) days prior to the actual date of any Transfer. If applicable, the Covenantor's Notice shall specify all the terms of such Transfer, and provide such information as the City shall reasonably require regarding the proposed Transfer. Representatives of the City may at any time after the submission of the Covenantor's Notice, require that the Covenantor or the proposed transferee, as applicable, provide additional information regarding the proposed transaction for the Transfer of the Dwelling Unit, and the Covenantor and/or transferee, as applicable, shall supply such information as soon as practicable. In the case of any proposed sale of the Dwelling Unit, the City may require the Covenantor and the proposed purchaser to certify in writing in a form that is reasonably acceptable to the City, that the Covenantor and the proposed purchaser have not paid, have no agreement to pay and will not pay, to the other such party, or to any other person, any money or other consideration in addition to the consideration described in the written offer and conditional acceptance." VI. [§600] DUPLICATE ORIGINALS This Amendment to City's Resale Restrictions may be signed in counterparts, each of which shall be deemed an original, and all such counterparts shall constitute one and the same instrument. [REMAINDER OF PAGE INTENTIONALLY BLANK] [SIGNATURES ON THE FOLLOWING PAGE] Page 4 Amendment to Resale Restrictions(execution).doc IN WITNESS WHEREOF, City and Habitat have caused this instrument to be executed on their behalf by their respective officers hereunto duly authorized on the date set forth above. HABITAT FOR HUMANITY OF ORANGE COUNTY, INC., a California non-profit public benefit corporation By:_ Name: Its: Dated: CITY OF HUNTINGTON BEACH, a municipa c rporation of the State of Californi tl k4iX Manager IN�IT4A7ED AND APPROVED: Director of Economic Development By: A P OVED AS TO FORM: OnName: 1 � Attorney Its: KANE, BALLMER & BERKMAN Dated: SpecjW Counsel;A a h Jh R. Brown®� COUNTERPARTa Page 5 Amendment to Resale Restrictions(execution).doc State of California ) County off ) - On �GC L % before me, L , a Notary Public, pers nally appeared - ,eJ ,who proved to me on the basis of satisfactory evidence to be the pers n whose name ts' aro--subscribed to the within instrument and acknowledged to me tha h y executed same i ts/het' authorized capacity(ies-), and that b is/he eir-signatureon the instrument the personW, or the entity upon behalf of which the persono 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. Signature USeal) P. L. ESPARZA Commission # 1857021 Z , •® Notary Public - California z Z Orange County MY Comm. Expires Aug 4, 2013 IN WITNESS WHEREOF, City and Habitat have caused this instrument to be executed on their behalf by their respective officers hereunto duly authorized on the date set forth above. HABITAT FOR HUMANITY OF ORANGE COUNTY, INC., a California non-profit p lic benefit corporation By: Awo<$e4 Name: 5H,A,',ol�l ALL -5 Dated: MAY Zo�l2, By: Name: M A P-K Ko 2 A i Do Its: sr • VLCE5 n2C5 (lie-1,Fr Dated: NiAY ZD( CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California City Manager INITIATED AND APPROVED: Director of Economic Development APPROVED AS TO FORM: City Attorney KANE, BALLMER & BERKMAN Special Counsel Jhaila R. Brown Page 5 Amendment to Resale Restrictions(execution).doc State of California ) County of 09ANC--A� ) On MAY /1- 2,0(2 before me, P—CiP, A - (20!3S a Notary Public, personally appeared 5NARO N E LLI S who proved to me on the basis of satisfactory evidence to be the person(o whose nameO is/ate subscribed to the within instrument and acknowledged to me that -hc/she/tom executed the same in his/her/fhcir authorized capacity(iu;4, and that by his/her/their signatureO on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the foregoing paragraph is true and correct. WITNES Signature State of California County of cg-AN&E laws- t e Statf, . of Califbrai4 1hat the RITA A. ROSS Commission # 1929080 a = d Notary Public California 2 `ri . z Orange County My Comm. Ex ires Apr 15. 2015 (Seal) On 144Y / -'�f ZD f 2 before me, jet- A,R'0SS , a Notary Public, personally appeared M,4ZK KORRkI o , who proved to me on the basis of satisfactory evidence to be the person(v) whose nameO is/ue subscribed to the within instrument and acknowledged to me that he/%he/tkcyy executed the same in his/hor/Ihzir authorized capacity(ivg), and that by his/lr/thw- signature(-&) on the instrument the person(s), 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 m ha nd offic' seal. SiRnatur RITA A. ROSS Commission # 1929080 -m Notary Public - California Orange County My Comm. Expires Apr 15, 2015 (Seal) ATTACHMENT NO. 1 LEGAL DESCRIPTION OF PROPERTY (behind this page) LEGAL DESCRIPTION That certain real property located in the City of Huntington Beach, County of Orange, State of California, described as follows: UNIT 1: PARCEL 1: Unit 1 (the "Unit"), as shown and described in the Condominium Plan for Patterson at Huntington Condominiums (together with any amendments thereto, collectively, the "Plan") covering Parcel 1 of Parcel Map No. 2011-104, as such Parcel is shown on the Parcel Map ("Map"), filed in Book 372, at Pages 31-33 of Parcel Maps, in the Office of the Orange County Recorder, recorded on November 2, 2011, as Instrument No. 2011000553373 in the Official Records of Orange County, California ("Official Records"), which Plan was recorded in the Official Records on November 18, 2011, as Instrument No 2011000588862, together with an undivided One -Half (1/2) interest as tenant -in -common in the Common Area as shown and described in the Condominium Plan and exclusive easements as are shown as appurtenant to the Unit. PARCEL 2: An undivided one-half (1/2) fee simple interest as a tenant in common in and to the common Area described in the Plan. PARCEL 3: Exclusive easements for the benefit of the Unit appurtenant to Parcel No. 1 and Parcel No. 2, described above, for porch and yard purposes, over those portions of the Common Area as shown numbered and assigned on the Plan or as described in the Declaration, and internal and external telephone wiring, as installed by Grantor. PARCEL 4: Nonexclusive easements for access, drainage, encroachment, maintenance, repair, and for other purposes, all as may be shown on the Plan and the Map, and as described in the Declaration of covenants, Conditions and Restrictions and Reservation of Easements for Patterson at Huntington Condominiums, recorded on November 18, 2011 as Instrument No. 2011000588863, in Official Records (together with any amendments thereto, collectively, the "Declaration"). [LEGAL DESCRIPTION CONTINUED ON FOLLOWING PAGE] UNIT 2: PARCELI: Unit 2 (the "Unit"), as shown and described in the Condominium Plan for Patterson at Huntington Condominiums (together with any amendments thereto, collectively, the "Plan") covering Parcel 1 of Parcel Map No. 2011-104, as such Parcel is shown on the Parcel Map ("Map"), filed in Book 372, at Pages 31-33 of Parcel Maps, in the Office of the Orange County Recorder, recorded on November 2, 2011, as Instrument No. 2011000553373 in the Official Records of Orange County, California ("Official Records"), which Plan was recorded in the Official Records on November 18, 2011, as Instrument No 2011000588862, together with an undivided One -Half (1/2) interest as tenant -in -common in the Common Area as shown and described in the Condominium Plan and exclusive easements as are shown as appurtenant to the Unit. PARCEL 2: An undivided one-half (1/2) fee simple interest as a tenant in common in and to the common Area described in the Plan. PARCEL 3: Exclusive easements for the benefit of the Unit appurtenant to Parcel No. 1 and Parcel No. 2, described above, for porch and yard purposes, over those portions of the Common Area as shown numbered and assigned on the Plan or as described in the Declaration, and internal and external telephone wiring, as installed by Grantor. PARCEL 4: Nonexclusive easements for access, drainage, encroachment, maintenance, repair, and for other purposes, all as may be shown on the Plan and the Map, and as described in the Declaration of covenants, Conditions and Restrictions and Reservation of Easements for Patterson at Huntington Condominiums, recorded on November 18, 2011 as Instrument No. 2011000588863, in Official Records (together with any amendments thereto, collectively, the "Declaration"). FIRST IMPLEMENTATION AGREEMENT TO THE AFFORDABLE HOUSING PROPERTY TRANSFER AGREEMENT THIS FIRST IMPLEMENTATION AGREEMENT TO THE AFFORDABLE HOUSING PROPERTY TRANSFER AGREEMENT (the "First Implementation Agreement") is entered into on this ,� '`�` day ofV , 2012 (the "Effective Date") by and between the CITY OF HUNTINGTON BEACH, a municipal corporation (the "City") and HABITAT FOR HUMANITY OF ORANGE COUNTY, INC., a California non-profit public benefit corporation (the "Habitat") with reference to the following. The City and Habitat are collectively referred to herein as the "Parties." RECITALS A. WHEREAS, the City is responsible for administering the use of certain funds made available to the City by the United States Department of Housing and Urban Development ("HUD") under the HOME Investment Partnerships Program (the "HOME Program") in accordance with the regulations issued by HUD and set forth in 24 Code of Federal Regulations ("CFR") Part 92 (the "HOME Regulations"). B. WHEREAS, the City has received HOME Program funds for the purposes of strengthening public -private partnerships to provide decent, safe, sanitary, and affordable housing, with primary attention to preserve homeownership opportunities available to low income households in the City. C. City and Habitat entered into that certain Affordable Housing Property Transfer Agreement dated as of September 6, 2011, as amended by that certain First Amendment to the Affordable Housing Property Transfer Agreement dated February 6, 2012 (collectively the "Agreement"). Agreement as used herein shall mean, refer to and include the Agreement, as well as any riders, exhibits, addenda, implementation agreements, amendments and attachments thereto (which are hereby incorporated herein by this reference) or other documents expressly incorporated by reference in the Agreement. Any capitalized term not defined herein shall have the meaning ascribed to such term in the Agreement. D. The Agreement provides, in part, for (i) the City to convey to Habitat that certain real property known as 18451 Patterson Lane in the City of Huntington Beach, described in the legal description attached hereto as Attachment No. 1 (the "Property"), (ii) the City to provide a loan to Habitat in the amount of $748,437 derived from the HOME Program (the "HOME Loan") to pay a portion of the Development costs for the Dwelling Units, (iii) Habitat to re -pay to the City a portion of the HOME Loan in the amount of $261,604 (the "HOME Loan Repayment"), and (iii) Habitat to develop on the Property two single family dwelling units to be sold to and occupied by Low and Very Low Income Households at an Affordable Purchase Price (all as defined in the Agreement) (the "Project"). 1 K:\CG\HB\Patterson at Huntington Condos(Habitat of Orange)\Impl. Agreement(execution)(2).doc E. The Dwelling Units have been assisted with moneys from the Low and Moderate Income Housing Fund established and maintained pursuant to California Health and. Safety Code Section 33334.2 et set, therefore the Property is subject to California Community Redevelopment Law (commencing with Section 33000 of the Health and Safety Code and hereinafter referred to as the "CRL"). F. Pursuant to the Agreement, Habitat executed that certain Promissory Note Evidencing HOME Funds dated February 15, 2012, evidencing Habitat's obligation to pay the HOME Loan Repayment to the City. G. Pursuant to the Agreement, Habitat and City executed that certain Declaration of Conditions, Covenants and Restrictions for Property (Resale Restrictions) (the "City Regulatory Agreement") dated September 6, 2011 and recorded September 29, 2011 as Document No. 2011000483564 in the Official Records of the Recorder's Office of Orange County (the "Official Records"). H. Pursuant to the Agreement, the City executed that certain Notice of Affordability Restrictions on Transfer of Property dated September 23, 2011 and recorded on September 29, 2011 in the Official Records as Document No. 2011000484328 ("Notice of Affordability Restrictions"). I. Pursuant to the Agreement, the City and Habitat executed that certain Option Agreement (Unit 1) dated December 7, 2011 and recorded on December 12, 2011 in the Official Records as Document No. 2011000647507 (the "City Option (Unit 1)") and that certain Option Agreement (Unit 2) dated December 7, 2011 and recorded on December 12, 2011 in the Official Records as Document No. 2011000647508 (the "City Option (Unit 2)"). J. Pursuant to § 92.254 a. 3. of the HOME Regulations, the Dwelling Units must be acquired by homebuyers whose families qualify as low-income families as defined in § 92.2 of the HOME Regulations. K. Pursuant to Section 501.4 of the Agreement, prior to the close of escrow for the sale of a Dwelling Unit, the buyer of such unit is required to execute an acknowledgement of the re -sale and use restrictions and maintenance requirements for the Property set forth in the Agreement and the City Regulatory Agreement. Such acknowledgement shall be in a form required by the City. L. Pursuant to Section 501.7 of the Agreement, in order to ensure compliance with the affordability, re -sale and other use restrictions set forth in the Agreement, concurrently with the sale of a Dwelling Unit, the buyer of such Dwelling Unit shall grant to the City an option to purchase such Dwelling Unit in the event of a proposed transfer. M. Pursuant to Section 705 of the Agreement, the Director of Economic Development for the City of Huntington Beach or his/her designee (the "Director of Economic Development") shall have the authority to issue interpretations, waive provisions and enter into amendments of the Agreement on behalf of the City so long as such actions do not substantially 2 K:\CG\HB\Patterson at Huntington Condos(Habitat of Orange)\Impl. Agreement(execution)(2).doc change the uses or development permitted by the Agreement, or add to the costs of the City as specified in the Agreement or agreed to by the City Council. N. The amendments set forth in this First Implementation Agreement below do not substantially change the uses or development permitted by the Agreement, or add to the costs of the City as specified in the Agreement or agreed to by the City Council. As such, pursuant to Section 705 of the Agreement, the Director of Economic Development or designee is authorized to administratively amend the Agreement as set forth below. O. The purpose of this First Implementation Agreement is to effectuate and amend the Agreement, by administrative action, by providing for () the .execution by each buyer of a Dwelling Unit of an option agreement in favor of the City, a grant deed addendum and acknowledgement of the re -sale and use restrictions all as required by the Agreement, (ii) modification of the Agreement to adhere to applicable HOME Regulations, and (iii) modifications to certain other obligations of the parties, all on the terms and conditions as set forth below. SECTION 1. AMENDMENTS TO THE AFFORDABLE HOUSING PROPERTY TRANSFER AGREEMENT For and in consideration of the mutual covenants and conditions set forth.herein, the City and Habitat hereby agree as follows: 1. Affordability Period. Part I. of the Agreement entitled Definitions is hereby amended by deleting in its entirety the definition of "Affordability Period" and replacing it with the following: "Affordability Period" means, as to each Dwelling Unit, that period commencing on the date the City issues a permanent certificate of occupancy for such Dwelling Unit and continuing for a period of sixty (60) years thereafter, during which such period the Dwelling Unit may be sold to a Low or a Very Low Income Household at an Affordable Purchase Price as specified herein. 2. Affordable Housing Cost. Part I. of the Agreement entitled Definitions is hereby amended by deleting in its entirety the definition of "Affordable Housing Cost" and replacing it with the following: "Affordable Housing Cost" shall have the following meaning: (i) as to the initial sale of a Dwelling Unit to a Low Income Household and any sale of such Dwelling Unit during the first fifteen years of the Affordability Period the lesser of, (i) monthly housing payments as defined by section 6920 of Title 25 of the California Code of Regulations, including payments for principal, interest, mortgage loan insurance fees, property taxes and assessments, fire and casualty insurance, a reasonable utility 3 K:\CG\HB\Patterson at Huntington Condos(Habitat of Orange)\Impl. Agreement(execution)(2).doc allowance (unless precluded by Federal requirements) and homeowner association fees, if any, which do not exceed the maximum housing cost allowed for Low Income Households in accordance with Section 50052.5 of the California Health and Safety Code, as may be amended from time to time, and (ii) a purchase price for the type of single family housing that does not exceed 95 percent of the median purchase price for the area pursuant to § 92.254 a. 2. ii. and iii. of the HOME Regulations as such now exists and as may hereafter be amended. Commencing on the sixteenth year of the Affordability Period, the term "Affordable Housing Cost" shall only have the meaning set forth in clause (i) of the preceding sentence. (ii) as to the initial sale of a Dwelling Unit to a Very Low Income Household and any sale of such Dwelling Unit during the first fifteen years of the Affordability Period the lesser of, (i) monthly housing payments as defined by section 6920 of Title 25 of the California Code of Regulations, including payments for principal, interest, mortgage loan insurance fees, property taxes and assessments, fire and casualty insurance, a reasonable utility allowance (unless precluded by Federal requirements) and homeowner association fees, if any, which do not exceed the maximum housing cost allowed for Very Low Income Households in accordance with Section 50052.5 of the California Health and Safety Code, as may be amended from time to time, and (ii) a purchase price for the type of single family housing that does not exceed 95 percent of the median purchase price for the area pursuant to § 92.254 a. 2. ii. and iii. of the HOME Regulations as such now exists and as may hereafter be amended. Commencing on the sixteenth year of the Affordability Period, the term "Affordable Housing Cost" shall only have the meaning set forth in clause (i) of the preceding sentence. 3. Affordable Purchase Price. Part I. of the Agreement entitled Definitions is hereby amended by deleting in its entirety the definition of "Affordable Purchase Price" and replacing it with the following: "Affordable Purchase Price" means a purchase price for a Dwelling Unit that does not exceed an Affordable Housing Cost for such Dwelling Unit. 4. City. Part I. of the Agreement entitled Definitions is hereby amended by deleting in its entirety the following definition as the definition was duplicative and partially incorrect: "City" means the City of Huntington Beach, a public body corporate and politic, and its successors and assigns. 4 K:\CG\HB\Patterson at Huntington Condos(Habitat of Orange)\Impl. Agreement(execution)(2).doc 5. Dwelling Unit. Part I. of the Agreement entitled Definitions is hereby amended by deleting in its entirety the definition of "Dwelling Unit" and replacing it with the following: "Dwelling Unit" means one of the two (2) single family residential units to be developed on the Property by Habitat as part of the Project and sold to and occupied by a Low Income and/or Very Low Income Households at an Affordable Purchase Price in accordance with the terms and conditions of this Agreement. The term "Dwelling Units" as used herein shall collectively refer to the two Dwelling Units to be developed on the Property by Habitat as part of the Project and sold to and occupied by a Low Income and/or Very Low Income Households at an Affordable Purchase Price in accordance with this Agreement. 6. Phase I. Part I. of the Agreement entitled Definitions is hereby amended by deleting in its entirety the definition of "Phase I" and replacing it with the following: "Phase I" means Habitat's acquisition of the Property, the construction thereon of a three (3) bedroom unit pursuant to the Scope of Work and this Agreement and the sale of such unit to a qualified Very Low Income Household at an Affordable Purchase Price. 7. Phase II. Part 1. of the Agreement entitled Definitions is hereby amended by deleting in its entirety the definition of "Phase I1" and replacing it with the following: "Phase II" means the construction by Habitat of a four (4) bedroom unit on the Property pursuant to the Scope of Work and this Agreement and the sale of such unit to a qualified Low Income Household at an Affordable Purchase Price. 8. Project. Part I. of the Agreement entitled Definitions is hereby amended by deleting in its entirety the definition of "Project" and replacing it with the following: "Project" means the acquisition of the Property by Habitat and the construction thereon by Habitat, in accordance with the Scope of Work and this Agreement, of (i) one three (3) bedroom unit to be sold to and occupied by a Very Low Income Household and (ii) one four (4) bedroom unit to be sold to and occupied by a Low Income Household, at an Affordable Purchase Price in accordance with this Agreement. 9. Scope of Development. The Agreement, including all attachments thereto, is hereby amended in its entirety to delete and replace all references to the "Scope of Development" with the "Scope of Work." 10. Definitions to be Added. Part I. of the Agreement entitled Definitions is hereby amended by adding the following definitions: 5 K:\CG\HB\Patterson at Huntington Condos(Habitat of Orange)\Impl. Agreement(execution)(2).doc "City Zoning and Subdivision Ordinance" means that certain Zoning and Subdivision Ordinance of the City of Huntington Beach set forth in the City of Hunting Beach's Municipal Code, including any amendments thereto. "CRL" means the California Community Redevelopment Law, commencing with Section 33000 of the Health and Safety Code. "First Implementation Agreement Closing Date" means no later than three (3) business days after the First Implementation Agreement to the Affordable Housing Property Transfer Agreement is administratively approved and executed by the City Manager. "HOME Loan" means that certain loan from the City to Habitat in the maximum amount of $748,437 derived from the HOME Program to pay a portion of the Development costs for the Dwelling Units. "HOME Loan Repayment Amount" means that portion of the HOME Loan in the amount of $261,604 to be paid to the City as evidenced by the Promissory Note Evidencing HOME Funds. "HOME Program" or "HOME" means the HOME Investment Partnerships Program administered in accordance with the regulations issued by HUD and set forth in the HOME Regulations. "HOME Regulations" means the regulations issued by HUD and set forth in 24 Code of Federal Regulations ("CFR") Part 92. "Promissory Note Evidencing HOME Funds" means that certain Promissory Note Evidencing HOME Funds dated February 15, 2012 and executed by Habitat in favor of the City evidencing Habitat's obligation to pay the HOME Loan Repayment Amount. "Qualified Purchaser" means (i) as to the three (3) bedroom Dwelling Unit, a homebuyer whose family qualifies as a Very Low Income Household and the Dwelling Unit must be the principal residence of the family throughout the Affordability Period, and (ii) as to the four (4) bedroom Dwelling Unit, a homebuyer whose family qualifies as a Low Income Household and the Dwelling Unit must be the principal residence of the family throughout the Affordability Period. 11. Deed of Trust. All references to the "Deed of Trust" contained in the Agreement, including all attachments thereto, including, but not limited to such reference in Section 207. b. of the Agreement are hereby deleted in their entirety. 12. Prohibition Against Change in Management and Control of Habitat. The third sentence in Section 300 of the Agreement (Prohibition Against Change in Management and Control of 6 K:\CG\HB\Patterson at Huntington Condos(Habitat of Orange)\Impl. Agreement(execution)(2).doc Habitat) commencing with the words, "Accordingly, without the..." is hereby amended to delete reference to the term, "Moderate Income." 13. City s Representations. The first sentence of Section 301.1 a. (Authority) of the Agreement is hereby deleted in its entirety and replaced with the following sentence, "City is a municipal corporation of the State of California." 14. Construction; Permitted Uses. Section 500 of the Agreement (Construction; Permitted Uses) is hereby amended as follows: a. The second sentence in the first paragraph of Section 500 of the Agreement (Construction; Permitted Uses) commencing with the words, "The three (3) bedroom Dwelling ..." is hereby deleted in its entirety and replaced with the following, "The three (3) bedroom Dwelling Unit shall be reserved for sale to and occupancy by a Very Low Income Household and the four (4) bedroom Dwelling Unit shall be reserved for sale to and occupancy by a Low Income Household. b. The first sentence in the second paragraph of Section 500 of the Agreement (Construction; Permitted Uses) commencing with the words, "All uses undertaken by Habitat.." is hereby deleted in its entirety and replaced with the following, "All uses undertaken by Habitat on the Property shall conform to this Agreement, the Declaration, and to all applicable provisions of the HOME Regulations, CRL, City Zoning and Subdivision Ordinance and Governmental Regulations." 15. Affordable Housing Use. Section 501 of the Agreement (Affordable Housing Use) is hereby deleted in its entirety and replaced with the following: "501. Affordable Housing Use Habitat covenants and agrees for itself, its successors, its assigns and every successor in interest to each Dwelling Unit, that (i) each Dwelling Unit shall be acquired by a Qualified Purchaser, (ii) each Qualified Purchaser shall occupy such Dwelling Unit as its principal residence, and (iii) each Dwelling Unit shall only be usedas a single family residence, pursuant to this Agreement, the Declaration, the HOME Regulations, the CRL and all applicable provisions of the City Zoning and Subdivision Ordinance. Each of the Dwelling Units shall also be subject to the long term use and affordability restrictions for the duration of the Affordability Period pursuant to this Agreement, the Declaration, the HOME Regulations and the CRL. Habitat further covenants and agrees, for itself, its successors, its assigns and every successor in interest to the Property (or any portion thereof), that Habitat shall (i) convey the three (3) bedroom Dwelling Unit to a Very Low Income Household for an Affordable Housing Cost, and convey the four (4) bedroom Dwelling Unit to a Low Income Household for an Affordable Purchase Price." 7 K:\CG\HB\Patterson at Huntington Condos(Habitat of Orange)\Impl. Agreement(execution)(2).doc 16. Income of Buyers. The introductory statement in the second paragraph of Section 501.2 of the Agreement (Income of Buyers) commencing with the words, "Such supporting documentation shall include..." is hereby deleted in its entirety and replaced with the following: "Such supporting documentation shall include true copies of income tax returns from the buyer for the two (2) most recent tax years in which a return was fled, any other additional documentation needed to confirm the sources of income, including, but not limited to sources referred to in "Gross Income," and at least one of the following:" The items listed in phrases a., b., c. and d. of Section 501.2 of the Agreement shall remain the same. 17. Affordable Purchase Price. Section 501.3 of the Agreement (Affordable Purchase Price) is hereby deleted in its entirety and replaced with the following: "501.3 Affordable Purchase Price The sales price of each Dwelling Unit conveyed by Habitat to a Low Income or Very Low Income Household shall not exceed an Affordable Purchase Price (as defined in Article 1. (Definitions) of this Agreement) for each Dwelling Unit." 18. Buyer Grant of City Option. The last sentence in Section 501.7 of the Agreement (Buyer Grant of City Option) is hereby deleted in its entirety and replaced with the following, "Such option shall conform in form and substance to the Form of Notice of Restrictions and Option to Purchase Dwelling Unit attached hereto as Exhibit J and incorporated herein by this reference. Each Qualified Purchaser and the City shall execute, in recordable form, a Notice of Restrictions and Option to Purchase Dwelling Unit substantially conforming to Exhibit J, to be recorded in the Official Records concurrently with the close of escrow for the applicable Dwelling Unit." The Form of Notice of Restrictions and Option to Purchase Dwelling Unit (newly added Exhibit No. J to the Agreement) is attached hereto as Attachment No. 2 and incorporated herein by this reference. 19. Buyer Grant Deed Addendum. Pursuant to Section 501.4 of the Agreement, prior to the close of escrow for the sale of a Dwelling Unit, the buyer of such unit is required to execute an acknowledgement of the re -sale and use restrictions and maintenance requirements for the Property set forth in the Agreement and the City Regulatory Agreement. Such acknowledgement shall conform in form and substance to the Form of Addendum to Grant Deed from Developer to Purchaser attached hereto as Attachment No. 3 and incorporated herein by this reference (the "Addendum to Grant Deed") and shall be attached to the Grant Deed conveying the Dwelling Unit from Habitat to the Qualified Purchaser. The Addendum to Grant Deed shall be executed, in recordable form, by the City and Buyer and recorded in the Official Records concurrently with the close of escrow for the applicable Dwelling Unit. The Addendum to Grant Deed is hereby added as Exhibit K to the Agreement. 8 K:\CG\HB\Patterson at Huntington Condos(Habitat of Orange)\Impl. Agreement(execution)(2).doe 20. Relationship of the City and Habitat. Section 700 of the Agreement (Relationship of City and Habitat) is hereby deleted in its entirety and replaced with the following: "700. Relationship of the City and Habitat Nothing contained in this Agreement shall be deemed or construed to create a partnership, joint venture, or any other similar relationship between the parties, hereto or cause the City to be responsible in any way for the debts or obligations of Developer or any other party." 21. Administration. All references to the "City Board" in Section 705 of the Agreement (Administration) are hereby deleted and replaced with the term "City Council of the City of Hunting Beach." 22. Declaration of Conditions, Covenants and Restrictions for Property (Resale Restrictions). That certain Declaration of Conditions, Covenants and Restrictions for Property (Resale Restrictions) dated September 6, 2011 and recorded September 29, 2011 as Document No. 2011000483564 in the Official Records (the "City Regulatory Agreement") shall be amended by an Amendment to Declaration of Conditions, Covenants and Restrictions for Property (Resale Restrictions) substantially conforming in a form and substance to Attachment No. 4 attached hereto and incorporated herein by this reference (the. "Amendment to City Regulatory Agreement"). The Amendment to City Regulatory Agreement shall be executed by the parties thereto, in recordable form, and delivered to the City on or prior to First Implementation Closing Date. Subject to the execution by the parties thereto, in recordable form, of the Notice of Restrictions and Option to Purchase Dwelling Unit, and the recording of the Notice of Restrictions and Option to Purchase Dwelling Unit in the Official Records, the City shall partially reconvey the lien of the City Regulatory Agreement, as amended, from each Dwelling Unit (i) upon the satisfaction of all City conditions precedent to the partial reconveyance of the City Regulatory Agreement discussed below, and (ii) concurrently with close of escrow for such Dwelling Unit. Any partial and/or full reconveyance of the City Regulatory Agreement shall be in a form and substance first,approved in writing by the Director of Economic Development in his sole discretion. The City shall partially reconvey the lien of the City Regulatory Agreement from each Dwelling Unit upon the satisfaction, or waiver, of the following conditions precedent: a. City has reviewed and approved all income documentation relating to the buyer; b. Buyer has executed, in recordable form, and delivered to City the Addendum to Grant Deed from Developer to Purchaser substantially in the form attached hereto as Attachment No. 3; C. Buyer has executed, in recordable form, and delivered to City the Notice of Restrictions and Option to Purchase Dwelling Unit substantially in the form attached hereto as Attachment No. 2; d. City determines buyer is a Qualified Purchaser; and e. Habitat is not in default under the Agreement. 9 K:\CG\HB\Patterson at Huntington Condos(Habitat of Orange)\Impl. Agreement(execution)(2).doc 23. Notice of Affordability Restrictions on Transfer of Property: That certain Notice of Affordability Restrictions on Transfer of Property dated September 29, 2011 and recorded September 29, 2011 as Document No. 2011000484328 in the Official Records shall be replaced and superseded in its entirety by an Amended Notice of Affordability Restrictions on Transfer of Property substantially conforming in a form and substance to Attachment No. 5 attached hereto and incorporated herein by this reference (the "Amended Notice of Affordability Restrictions"). The Amended Notice of Affordability Restrictions shall be executed by the City, in recordable form, and delivered to the City on or prior to the First Implementation Closing Date for immediate recording in the Official Records. 24. HOME Program Requirements. Habitat covenants and agrees for itself, its successors, its assigns and every successor in interest to the Property that Habitat, its successors and assigns shall comply with all applicable HOME Regulations, including, but not limited to the HOME Regulations set forth in the HOME Program Requirements attached hereto as Attachment No. 6 and incorporated herein by this reference. The HOME Program Requirements is hereby added as Exhibit L to the Agreement. 25. The Director of Economic Development is authorized to make such further changes to the documents and instruments attached to the Agreement and to this First Implementation Agreement as may be necessary or appropriate to effectuate the Agreement, as amended by this First Implementation Agreement, provided the HOME Loan is not increased or subordinated in greater proportion without the prior written approval of the City Council of the City of Huntington Beach. 26. The Director of Economic Development is authorized to execute such further instruments required by the Agreement, as may be necessary or appropriate to effectuate the Agreement, as amended by this First Implementation Agreement. SECTION 2. MISCELLANEOUS 1. Further Cooperation. The Parties agree to execute such other instruments, agreements and amendments to documents as may be necessary or appropriate to effectuate the Agreement as amended by this First Implementation Agreement. 2. Effectiveness of Agreement. Except as expressly provided otherwise in this First Implementation Agreement, the Agreement remains in full force and effect enforceable in accordance with its terms. 3. Interpretation. This First Implementation Agreement shall be executed in three duplicate originals, each of which is deemed to be an original. This First Implementation Agreement, when combined with the Agreement, constitutes the entire understanding and agreement of the parties and correctly sets forth the rights, duties and obligations of each to the other as of its date. 10 K:\CG\HB\Patterson at Huntington Condos(Habitat of Orange)\Impl. Agreement(execution)(2).doc 4. Waivers; Amendments. All waivers of the provisions of this First Implementation Agreement and all amendments hereto must be in writing and signed by the appropriate authorities of the City and Habitat. 5. Time of the Essence. Time is of the essence with respect to this First Implementation Agreement. 6. Effective Date. This First Implementation Agreement shall be dated and become effective on the date this First Implementation Agreement is executed by the City Manager. 7. Authority to Execute. Habitat hereby represents that the persons executing this First Implementation Agreement on behalf of Habitat have full authority to do so and to bind Habitat to perform pursuant to the terms and conditions of this First Implementation Agreement. [SIGNATURES ON FOLLOWING PAGE] 11 K:\CG\HB\Patterson at Huntington Condos(Habitat of Orange)\Impl. Agreement(execution)(2).doc IN WITNESS WHEREOF, the City and Habitat have executed this First Implementation Agreement to the Affordable Housing Property Transfer Agreement as of the date set opposite their signatures. HABITAT FOR HUMANITY OF ORANGE COUNTY, INC., a California non-profit public benefit corporation By:_ Name: Its: Dated: By:_ Name: Its: Dated: CITY OF HUNTINGTON BEACH, a municiaal�corporation of the State of INITIAD AND, APPROVED: Director of Economic Development AP -OVED AS TO FORM: rityAtto ey KANE, BALLMER & BERKMAN Special C unsel 1 Jla R. Brown 12 K:\C MI'atterson at Huntington Condos(Habitat of Orange)\Impl. Agreement(execution)(2).doc IN WITNESS WHEREOF, the City and Habitat have executed this First Implementation Agreement to the Affordable Housing Property Transfer Agreement as of the date set opposite their signatures. HABITAT FOR HUMANITY OF ORANGE COUNTY, INC., a California non-profit public benefit corporation By: _l Name:51-(fkiLc�f�1 Its: u tc )-r�VG D(R_.ECTz)R Dated: MANY �20 [2 By: Name: l" dA -kK V-0 A iQD0 Its:.9-- VICE P2�Lb(=—W Dated: -HA, Y' /`% 20 !Z CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California City Manager INITIATED AND APPROVED: Director of Economic Development APPROVED AS TO FORM: City Attorney KANE, BALLMER & BERKMAN Special Counsel Jhaila R. Brown 12 K:\CG\HB\Patterson at Huntington Condos(Habitat of Orange)\Impl. Agreement(execution)(2).doc ATTACHMENTS Attachment No. I LEGAL DESCRIPTION OF PROPERTY Attachment No. 2 FORM OF NOTICE OF RESTRICTIONS AND OPTION TO PURCHASE DWELLING UNIT Attachment No. 3 FORM OF ADDENDUM TO GRANT DEED FROM DEVELOPER TO PURCHASER Attachment No. 4 FORM OF AMENDMENT TO CITY REGULATORY AGREEMENT Attachment No. 5 FORM OF AMENDED NOTICE OF AFFORDABILITY RESTRICTIONS Attachment No. 6 HOME PROGRAM REQUIREMENTS ATTACHMENT NO. 1 LEGAL DESCRIPTION OF PROPERTY [behind this page] LEGAL DESCRIPTION That certain real property located in the City of Huntington Beach, County of Orange, State of California, described as follows: UNIT 1: PARCEL 1: Unit 1 (the "Unit"), as shown and described in the Condominium Plan for Patterson at Huntington Condominiums (together with any amendments thereto, collectively, the "Plan") covering Parcel 1 of Parcel Map No. 2011-104, as such Parcel is shown on the Parcel Map ("Map"), filed in Book 372, at Pages 31-33 of Parcel Maps, in the Office of the Orange County Recorder, recorded on November 2, 2011, as Instrument No. 2011000553373 in the Official Records of Orange County, California ("Official Records"), which Plan was recorded in the Official Records on November 18, 2011, as Instrument No 2011000588862, together with an undivided One -Half (1/2) interest as tenant -in -common in the Common Area as shown and described in the Condominium Plan and exclusive easements as are shown as appurtenant to the Unit. PARCEL 2: An undivided one-half (1/2) fee simple interest as a tenant in common in and to the common Area described in the Plan. PARCEL 3: Exclusive easements for the benefit of the Unit appurtenant to Parcel No. 1 and Parcel No. 2, described above, for porch and yard purposes, over those portions of the Common Area as shown numbered and assigned on the Plan or as described in the Declaration, and internal and external telephone wiring, as installed by Grantor. PARCEL 4: Nonexclusive easements for access, drainage, encroachment, maintenance, repair, and for other purposes, all as may be shown on the Plan and the Map, and as described in the Declaration of covenants, Conditions and Restrictions and Reservation of Easements for Patterson at Huntington Condominiums, recorded on November 18, 2011 as Instrument No. 2011000588863, in Official Records (together with any amendments thereto, collectively, the "Declaration"). [LEGAL DESCRIPTION CONTINUED ON FOLLOWING PAGE] UNIT 2: PARCELI: Unit 2 (the "Unit"), as shown and described in the Condominium Plan for Patterson at Huntington Condominiums (together with any amendments thereto, collectively, the "Plan") covering Parcel 1 of Parcel Map No. 2011-104, as such Parcel is shown on the Parcel Map ("Map"), filed in Book 372, at Pages 31-33 of Parcel Maps, in the Office of the Orange County Recorder, recorded on November 2, 2011, as Instrument No. 2011000553373 in the Official Records of Orange County, California ("Official Records"), which Plan was recorded in the Official Records on November 18, 2011, as Instrument No 2011000588862, together with an undivided One -Half (1/2) interest as tenant -in -common in the Common Area as shown and described in the Condominium Plan and exclusive easements as are shown as appurtenant to the Unit. PARCEL 2: An undivided one-half (1/2) fee simple interest as a tenant in common in and to the common Area described in the Plan. PARCEL 3: Exclusive easements for the benefit of the Unit appurtenant to Parcel No. 1 and Parcel No. 2, described above, for porch and yard purposes, over those portions of the Common Area as shown numbered and assigned on the Plan or as described in the Declaration, and internal and external telephone wiring, as installed by Grantor. PARCEL 4: Nonexclusive easements for access, drainage, encroachment, maintenance, repair, and for other purposes, all as may be shown on the Plan and the Map, and as described in the Declaration of covenants, Conditions and Restrictions and Reservation of Easements for Patterson at Huntington Condominiums, recorded on November 18, 2011 as Instrument No. 2011000588863, in Official Records (together with any amendments thereto, collectively, the "Declaration"). ATTACHMENT NO.2 FORM OF NOTICE OF RESTRICTIONS AND OPTION TO PURCHASE DWELLING UNIT [behind this page] FORM OF NOTICE OF RESTRICTIONS AND OPTION TO PURCHASE DWELLING UNIT Recording Requested By and When Recorded Mail to: City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attention: City Clerk SPACE ABOVE LINE FOR RECORDER'S USE OFFICIAL BUSINESS FREE RECORDING REQUESTED (Govt Code Section 27383) NOTICE OF RESTRICTIONS AND OPTION TO PURCHASE DWELLING UNIT This NOTICE OF RESTRICTIONS AND OPTION TO PURCHASE DWELLING UNIT (the "Notice") is made as of , 2012 by and between THE CITY OF HUNTINGTON BEACH, a municipal corporation (the "City"), RAUL CENDEJAS GUZMAN, an individual ("R. Guzman") and ADELINA LOPEZ DE GUZMAN, an individual ("A. Guzman"). R. Guzman and A. Guzman shall be collectively referred to herein as the "Owner." The City and Owner, (collectively the, "Parties") hereby agree as follows: RECITALS WHEREAS, the City provided a development subsidy to Habitat for Humanity of Orange County, Inc., a California non-profit public benefit corporation ("Habitat") in the amount of $748,437, derived from the United States Department of Housing and Urban Development ("HUD") under the HOME Investment Partnerships Program (the "HOME Program") in accordance with the regulations issued by HUD and set forth in 24 Code of Federal Regulations ("CFR") Part 92 ("HOME Regulations"), for the purposes of strengthening public -private partnerships to provide decent, safe, sanitary, and affordable housing ("Development Subsidy"). WHEREAS, the Development Subsidy was provided to Habitat by the City to pay a portion of the cost to develop two single family dwellings located on that certain real property legally described in Exhibit A of the City Affordable Housing Agreement and incorporated herein by this reference (the "Property") to be sold to and occupied by low and very low income households at an Affordable Housing Cost, in accordance with that certain Affordable Housing Dwelling Unit Transfer Agreement by and between City and Developer, dated as of September 6, 2011, as amended by that certain First Amendment Page 1 K:\CG\HB\Patterson at Huntington Condos(Habitat of Orange)\City Notice of Restrictions and Option (7).doc to the Affordable Housing Dwelling Unit Transfer Agreement dated February 6, 2012 and as modified by that certain Implementation Agreement to the Affordable Housing Dwelling Unit Transfer Agreement dated 2012 (collectively the, "City Affordable Housing Agreement"). WHEREAS, the Development Subsidy has been passed along and made available to Owner in the form of a lower sales price for that certain three bedroom [or four bedroom] unit located at 1841 Patterson Lane, Unit No. 1 [or Unit No. 2], Huntington Beach, California 92646 as described in the legal description attached hereto as Attachment No. 1 and incorporated herein by this reference (the, "Dwelling Unit"), presenting a lower financial burden to Owner. Without the Development Subsidy, the sales price of the Dwelling Unit would exceed the amount that is affordable to Owner. WHEREAS, the Property on which the Dwelling Unit is constructed has been assisted with moneys from the Low and Moderate Income Housing Fund established and maintained pursuant to California Health and Safety Code Section 33334.2 et sue,, therefore the Property and the Dwelling Unit are subject to California Community Redevelopment Law (commencing with Section 33000 of the Health and Safety Code and hereinafter referred to as the "CRL"). WHEREAS, the City and Owner executed that certain Addendum to Grant Deed from Developer to Purchaser (the "Addendum") dated of even date herewith and recorded concurrently herewith in the Official Records of the Recorder's Office of Orange County (the "Official Records") restricting the resale and use of the Dwelling Unit in accordance with the HOME Regulations and the CRL. Any capitalized term not defined herein shall have the meaning ascribed to such term in the Addendum. WHEREAS, the financial assistance made available by the City for the benefit of Owner is conditioned on the use of the Dwelling Unit for owner -occupancy. WHEREAS, the financial assistance made available by the City for the benefit of Owner is conditioned on the use of the Property and Dwelling Unit for housing affordable to persons or families of [Low Income/Very Low Income] for the Affordability Period. WHEREAS, the financial assistance made available by the City for the benefit of Owner is also conditioned on the right but not the obligation of the City to purchase the Dwelling Unit from Owner on the same terms and for the same price as any bona fide offer made to Owner to purchase the Dwelling Unit during the Affordability Period. FOR GOOD AND VALUABLE CONSIDERATION, the receipt and sufficiency of which are hereby acknowledged, the City and the Owner hereby agree and NOTICE IS HEREBY GIVEN that the Dwelling Unit shall be subject to this Notice. 1. Owner -Occupancy Requirement a. _ Owner shall occupy the Dwelling Unit as his or her or their primary residence, and the Dwelling Unit shall be used as the principal residence of Owner and Page 2 K:\CG\HB\Patterson at Huntington Condos(Habitat of Orange)\City Notice of Restrictions and Option (7).doc Owner's household and for no other purpose. The Dwelling Unit shall not be leased or rented by Owner to any person or entity. The maximum occupancy of the Dwelling Unit shall not exceed the maximum occupancy allowed by the Uniform Housing Code. b. The City shall have the right to monitor whether the Dwelling Unit is owner -occupied by requesting that Owner provide the City, no more frequently than two (2) times in any consecutive twelve (12) month period, with a written certification under penalty of perjury that the Dwelling Unit is owner -occupied, accompanied by supporting documentation reasonably satisfactory to the City. In the event of a breach or threatened breach of this paragraph b., the City or their successors or assigns shall be entitled to institute legal action to enforce performance of this paragraph b. and to obtain an injunction prohibiting anyone but Owner from occupying the Dwelling Unit and/or requiring Owner to occupy the Dwelling Unit and/or requiring Owner to sell the Dwelling Unit to a Qualified Purchaser who will occupy the Dwelling Unit as his or her or their primary residence.. C. These owner -occupancy restrictions may be modified or terminated only upon the written approval of the City. Any modification must be in writing. 2. Maintenance of Dwelliniz Unit Owner shall maintain the interior and exterior of the improvements and the landscaping on the Dwelling Unit in a manner consistent with community standards which will uphold the value of the Dwelling Unit, in accordance with this Notice, the Huntington Beach Municipal Code and that certain Declaration of Covenants, Conditions, Restrictions, and Reservation of Easements for Patterson at Huntington Condominiums executed by Habitat, dated November 11, 2011 and recorded in the Official Records on November 18, 2011 as Document No. 2011000588863 ("CC&R's). a. Exterior Maintenance. All exterior, painted surfaces of any structures located on the Dwelling Unit shall be maintained at all times in a clean and presentable manner. Any such defacing marks shall be cleaned or removed within a reasonable time. b. Front and Side Exteriors. Owner shall, at all times, maintain the front exterior and any visible side exteriors and yards, if any, in a clean, safe and presentable manner. C. Graffiti Removal. All graffiti, and defacement of any type, including marks, words and pictures, must be removed from the Dwelling Unit and any necessary painting or repair completed within a reasonable time, but in no event more than one (1) week after notice to Owner from City. d. Landscaping. All landscaping surrounding the Dwelling Unit shall be maintained in a manner consistent with standards of the City of Huntington Beach's Municipal Code (the "Code") and any rules, regulations and standards adopted pursuant to the Code. In addition, for example, the yard areas shall not contain the following: (1) lawns with grasses in excess of nine (9) inches in height; (2) trees, shrubbery, lawns or other plant life which are dying from a lack of water or other necessary maintenance; Page 3 K:\CG\HB\Patterson at Huntington Condos(Habitat of Orange)\City Notice of Restrictions and Option (7).doc (3) trees and shrubbery grown uncontrolled without proper pruning; (4 vegetation so overgrown as to be likely to harbor rats or vermin; (5) dead, decayed or diseased trees, weeds and other vegetation; and (6) inoperative irrigation systems. e. Maintenance by Owner. Owner shall, at his, her or their sole cost and expense, maintain and repair the Dwelling Unit and the improvements thereon, keeping the same in good condition and making all repairs as may be required by this Notice and the City of Huntington Beach's Municipal Code. f. Damage and Destruction Affecting Dwelling Unit -- Duty to Rebuild. If all or any portion of the Dwelling Unit and the improvements thereon is damaged or destroyed by fire or other casualty, it shall be the duty of Owner to rebuild, repair or reconstruct the Dwelling Unit in a timely manner to restore it to the City of Huntington Beach's Municipal Code compliance condition. g. Variance in Exterior Appearance and Design. If the Dwelling Unit is damaged or destroyed by casualty, Owner may not, without the prior written consent of the City, reconstruct, rebuild or repair the Dwelling Unit in a manner which will provide different exterior appearance and lot design from that which existed prior to the date of the casualty. h. Time Limitation. In the event of damage or destruction due to casualty, Owner shall be obligated to proceed with all due diligence to commence reconstruction within two (2) months after the damage occurs and to complete reconstruction within a reasonable time after damage occurs, unless prevented by causes beyond the reasonable control of Owner. i. Failure to Maintain. Failure to maintain the Dwelling Unit in accordance with this Section 2, including, but not limited to, any violations of applicable building, plumbing, electric, fire, housing or other applicable City of Huntington Beach Building Codes, shall be a default by Owner under this Notice. In the event City, in the sole discretion of the Director of Economic Development for the City of Huntington Beach or designee (the "Director"), determines that Owner has failed to maintain the Dwelling Unit, City shall notify Owner with regard to any noted code violations and maintenance deficiencies (collectively, the "Deficiencies"), and Owner shall cure the Deficiencies in a reasonable manner acceptable to City within sixty (60) days following the date of such notice. Should Owner fail to cure all the Deficiencies prior to the time set forth herein, City, or its designee, shall have the right, but not the obligation, to enter the Dwelling Unit, correct any Deficiency, and hold Owner responsible for the cost thereof. Any cost incurred by City to cure any such Deficiency, until paid, shall constitute a lien on the Dwelling Unit pursuant to Civil Code Section 2881. j. Pre -Sale Inspection. Not later than thirty (30) days prior to a Sale (defined below) of the Dwelling Unit, Owner shall give notice of the impending Sale to the City in accordance with Section 3, and shall permit the City (or designee), upon reasonable prior notice from the City, to inspect the Dwelling Unit prior to the Sale. Following such inspection, if the City determines that the Dwelling Unit is not in compliance with this Page 4 K:\CG\HB\Patterson at Huntington Condos(Habitat of Orange)\City Notice of Restrictions and Option (7).doc Section 2, the City shall deliver to the Owner a list of Deficiencies that are required to be cured in compliance with this Section 2. At his, her or their sole cost and expense, Owner shall complete such repairs, or provide for such repairs to be completed, to the reasonable satisfaction of the City prior to the Sale. With the written consent of the City, Owner may provide for such repairs to be paid out of the portion of net Sale proceeds to be paid to Owner. For purposes of this Notice, "Sale" shall mean a voluntary Transfer of the Dwelling Unit to a Qualified Purchaser for payment of the Resale Price, not including a transfer of deed in lieu of foreclosure. The "Resale Price" shall (i) mean the total compensation to be paid to the Owner upon a Sale of the Dwelling Unit by the Owner, (ii) constitute an Affordable Purchase Price and, (iii) provide the original HOME Program assisted Owner a fair return on investment (including the Owner's investment and any Capital Improvement) pursuant to Section 92.254 a. 5. (i) of the HOME Regulations. Notice to City In the event Owner intends to sell or otherwise effect a Transfer of the Dwelling Unit, Owner shall promptly notify City in writing of such intent ("Owner's Notice"). The written notice shall be given in accordance with Section 5 of this Notice at least sixty (60) days prior to the actual date of any Transfer. If applicable, the Owner's Notice shall specify all the terms of such Transfer, and provide such information as the City shall reasonably require regarding the proposed Transfer. Representatives of the City may at any time after the submission of the Owner's Notice, require that the Owner or the proposed transferee, as applicable, provide additional information regarding the proposed transaction for the Transfer of the Dwelling Unit, and the Owner and/or transferee, as applicable, shall supply such information as soon as practicable. In the case of any proposed Sale of the Dwelling Unit, the City may require the Owner and the proposed purchaser to certify in writing in a form that is reasonably acceptable to the City, that the Owner and the proposed purchaser have not paid, have no agreement to pay and will not pay, to the other such parry, or to any other person, any money or other consideration in addition to the consideration described in the written offer and conditional acceptance. 4. City's Option a. Owner hereby grants to the City the option to purchase the Dwelling Unit from the Owner (the "Option") under the following terms and conditions. In the event of a proposed sale or Transfer of the Dwelling Unit and/or upon the occurrence of an Event of Default, as defined in the Addendum, the City shall have the right, at its option, but not the obligation, to exercise the Option and purchase the Dwelling Unit for the "City Purchase Price." For the purposes of this Notice, the "City Purchase Price" shall be equal to the following: (1) In the event of a Sale, the City Purchase Price shall be equal to either (i) the total proposed Resale Price, and the City purchase shall be on the same terms and conditions as contained in such proposed Sale, or (ii) subject to the Senior Lender's approval of the new Qualified Purchaser selected by the City, the proposed Resale Price less the outstanding Page 5 K:\CG\HB\Patterson at Huntington Condos(Habitat of Orange)\City Notice of Restrictions and Option (7).doc balance of the Senior First Mortgage Loan so long as the City conveys title to the Dwelling Unit to such Qualified Purchaser and the Qualified Purchaser assumes the Senior First Mortgage Loan Deed of Trust and all related documents, and the City purchase shall be on the same terms and conditions as contained in such proposed Sale. (2) In the event of an Event of Default or a Transfer (other than a Sale), the City Purchase Price shall be equal to (i) the outstanding amount of the principal and other amounts due under the Senior First Mortgage Loan, plus, to the extent applicable, (ii) reasonable amounts which provide the original Owner a fair return on investment in the Dwelling Unit (including the original Owner's investment and any Capital Improvements to the Property that are approved by the City Director in writing prior to such construction (but in no event shall such amounts exceed the cost specifically approved by City in writing prior to such construction), pursuant to Section 92.254 a. 5. (i) of the HOME Regulations. All amounts described in this Subsection 4.a.(2) must be substantiated by Owner with appropriate invoices, reasonable evidence of payment and completion of construction and reasonable evidence that such amounts were used solely for the construction of such Capital Improvements. The City's Option shall survive a foreclosure or transfer of deed in lieu of foreclosure. b. The term "Senior Lender" as used herein shall mean Habitat or the lender of any permanent loan or the beneficiary of a deed of trust securing any loan to finance Owner's acquisition of the Dwelling Unit, which deed of trust is senior in priority to all other mortgages on the Dwelling Unit. Notwithstanding any provision to the contrary herein, a trustee's sale held as a result of a foreclosure of a Senior Lender's deed of trust, or a transfer by deed -in -lieu of foreclosure to a Senior Lender, shall not constitute a sale, a "Transfer" (as defined in Section 7 below) or a an Event of Default hereunder provided that: (1) In the event of a foreclosure sale, the purchaser of the Dwelling Unit at such sale either (i) qualifies as a Qualified Purchaser and acquires the Dwelling Unit for an Affordable Purchase Price, assumes Owner's obligations hereunder and under the Addendum to Grant Deed by execution of an Assignment and Assumption Agreement first approved in writing by the City's Director, and thereafter occupies the Dwelling Unit as his or her principal residence; or (ii) sells the Dwelling Unit to a Qualified Purchaser for an Affordable Purchase Price within one hundred twenty (120) days after the conclusion of said foreclosure sale or transfer by deed -in -lieu of foreclosure and said Qualified Purchaser assumes Owner's obligations hereunder and under the Addendum to Grant Deed by execution of an Assignment and Assumption Agreement first approved in writing by the City's Director, and thereafter occupies the Dwelling Unit as his or her principal residence; or Page 6 K:\CG\HB\Patterson at Huntington Condos(Habitat of Orange)\City Notice of Restrictions and Option (7).doc (2) In the event of a deed -in -lieu of foreclosure transfer, the Senior Lender who acquires title sells the Dwelling Unit to a Qualified Purchaser for an Affordable Purchase Price within one hundred twenty (120) days after receipt of said transfer of title, said Qualified Purchaser assumes Owner's obligations hereunder by execution of an Assignment and Assumption Agreement first approved in writing by the City's Director, and thereafter occupies the Dwelling Unit as his or her principal residence. C. Exercise of Option to Purchase. The Option may be exercised by the City delivering to Owner written notice of such exercise. Upon the City's knowledge of the occurrence of an Event of Default or receipt of Owner's Notice, the City shall have sixty (60) days to give written notice to Owner (the "City's Notification") of its decision to exercise the Option. The City's Notification shall be pursuant to Section 5 of this Notice. Notwithstanding anything to the contrary set forth herein, the City's exercise of its Option to purchase the Dwelling Unit shall not impair the Senior Lender's Deed of Trust, which shall survive in its entirety unless the secured obligations are fully paid. d. Escrow. Within forty-five (45) days following the exercise of the Option, the City shall open, or cause to be opened, an escrow with a title insurance company or such other escrow agent selected by the City (the "Escrow Agent") and the parties agree to execute escrow instructions with Escrow Agent as may be required by Escrow Agent, or to implement or give effect to the terms and conditions of this Notice. The parties agree to the following escrow terms and conditions: (1) The escrow shall be for a period of ninety (90) days or sooner if mutually agreed by the parties; (2) The City agrees that it will pay the City Purchase Price upon the close of escrow or as otherwise mutually agreed to by the parties. Notwithstanding the foregoing, and subject to the requirements set forth in Section 92.254 a.5. (i) of the HOME Regulations, should Owner fail to cure all Deficiencies, if any, in accordance with Section 2 prior to the close of escrow, the Owner hereby agrees that the Escrow Agent shall withhold that portion of the City Purchase Price necessary to pay for curing the Deficiencies, based upon written estimates obtained and submitted to the Escrow Agent by the City. The City shall cause the Deficiencies to be cured and, upon certification of completion of work by the City, the Escrow Agent shall disburse such funds to the City to pay for said work. Any remaining funds shall be disbursed by the Escrow Agent to Owner; (3) The Owner agrees that it shall pay the premium for a standard C.L.T.A. policy of owner's title insurance issued by the Escrow Agent or title insurance company reasonably acceptable to the City in the amount of the City Purchase Price, insuring title to the Dwelling Unit in the City's name, subject only to those matters approved by the City in writing. In the event the City requests an A.L.T.A. policy of owner's insurance and/or any title endorsements, the additional costs associated with the issuance of an A.L.T.A policy or the endorsements shall be paid by the City; Page 7 K:\CG\BB\Patterson at Huntington Condos(Habitat of Orange)\City Notice of Restrictions and Option (7).doc (4) The Owner and City agree that all costs and fees charged in connection with the closing and escrow shall be borne by the Owner; (5) The Owner agrees that it shall deposit in escrow for delivery to the City an executed grant deed to the City (in such form as may be reasonably acceptable to the Director in his or her sole discretion); (6) Taxes and assessments shall be prorated at the close of escrow with Owner paying all such taxes and assessments due and payable prior to the close of escrow and City paying all such taxes and assessments due and payable following the close of escrow; (7) Owner agrees that title shall be conveyed by Owner at the close of escrow to the City free and clear of all mortgages, deeds of trust, liens and encumbrances. Owner agrees that any costs to remove or satisfy any mortgages, deeds of trusts, liens or encumbrances shall be the responsibility of Owner, at Owner's sole cost and expense; and (8) Any other terms or conditions mutually agreed to by the parties. e. Priority of Option. Notwithstanding Section 6 of this Notice, this Section 4 and the City's Option granted hereby shall be junior in priority only to, and subordinated only to, Section 6 of the Affordable Housing Agreement for Raul Cendejas Guzman and Adelina Lopes de Guzman executed by Raul Cendejas Guzman and Adelina Lopes de Guzman and Humanity Housing, Inc., dated , 2012 and recorded on , 2012 in the Official Records, wherein Owner grants to Humanity Housing Inc. an option to purchase the Dwelling Unit (the "Humanity Housing Option"). Except as provided in the immediately preceding sentence, this Section 4 and the City's Option granted hereby shall be senior and superior to all other mortgages, liens, encumbrances and options on the Dwelling Unit. f. The Addendum and the affordability and use restrictions set forth in this Notice shall not be extinguished, terminated or cancelled by a foreclosure sale under a Senior First Mortgage Loan or a transfer of deed in lieu of foreclosure during the Affordability Period. City, Owner, and Senior Lender acknowledge and agree that, if due to an event of foreclosure, the Addendum and/or the affordability and use restrictions set forth in this Notice are terminated and eliminated from title to the Dwelling Unit during the term of the Affordability Period, the Senior Lender will allow the City to re-record the Addendum and the affordability and use restrictions contained in this Notice in a first priority position, on any post foreclosure estate retained or acquired by Senior Lender. 5. Notices Owner agrees the City shall have the right to record against title to the Dwelling Unit a request for notice of default and any notice of sale under any deed of trust or mortgage with power of sale encumbering the Dwelling Unit in the Office of the Recorder of Orange County. Such request shall specify that any such notice shall be mailed to: Page 8 K:\CG\HB\Patterson at Huntington Condos(Habitat of Orange)\City Notice of Restrictions and Option (7).doc City of Huntington Beach 2000 Main Street Huntington Beach, California 92648 Attention: Director of Economic Development The Owner shall provide to the City a written copy of any notice of default or notice of sale under any deed of trust or mortgage with power of sale encumbering the Dwelling Unit immediately upon receipt by the Owner. The City may declare a default under this Notice upon receipt of any notice given to the City pursuant to Civil Code Section 2924b or pursuant to this Section 5, and may exercise its remedies as provided in Section 11. In the event of default or foreclosure of such deed of trust or mortgage, the City shall have the same right as the Owner to cure defaults and redeem the Dwelling Unit prior to foreclosure sale. Nothing contained herein shall be construed as creating any obligation of the City to cure any such default, nor shall this right to cure and redeem operate to extend any time limitations in the default provisions of the underlying deed of trust or mortgage. Except as otherwise expressly provided in this Notice, in every case when, under the provisions of this Notice, it shall be necessary or desirable for one party to serve any notice, request, demand, report or other communication on another party, the same shall be in writing and shall not be effective for any purpose unless served (i) personally, (ii) by independent, reputable, overnight commercial courier, or (iii) by deposit in the United States mail, postage and fees fully prepaid, registered or certified mail, with return receipt requested, addressed as follows: To Owner: Huntington Beach, California 91205-3557 To City: City of Huntington Beach 2000 Main Street Huntington Beach, California 92648 Attention: Director of Economic Development 6. No violation or breach of this Notice shall defeat or render invalid or in any way impair the lien or charge of any mortgage, deed of trust or other security instrument permitted by the Addendum and made in good faith and for value. Except as otherwise provided in Section 4, this Notice shall be senior to all liens, mortgages, options and encumbrances on the Dwelling Unit, including, but not limited to the Humanity Housing Option, Senior First Mortgage Loan Deed of Trust and WISH Mortgage Loan Deed of Trust. Page 9 K:\CG\HB\Patterson at Huntington Condos(Habitat of Orange)\City Notice of Restrictions and Option (7).doc 7. Transfers Owner agrees that Owner shall not make any sale, transfer, assignment or conveyance of the Dwelling Unit, any portion thereof or interest therein, including, without limitation, any lease, exchange, or other disposition of any interest in the Dwelling Unit, whether voluntary or involuntary, or any refinancing of the Senior First Mortgage Loan ("Transfer"); provided however, the following transfers ("Permitted Transfers") shall not, for purposes of this Notice, be considered a Transfer resulting in an Event of Default under this Notice: a. The creation of a purchase -money security interest for household appliances; b. A transfer by devise, descent, or operation of law on the death of a joint tenant or tenant by the entirety; C. A transfer, in which the transferee is a person who occupies or will occupy the Dwelling Unit, which is: (1) A transfer by an Owner where the spouse becomes the co-owner of the Dwelling Unit and enters into an assumption agreement relating to the Addendum and this Notice; (2) A transfer where the spouse or child(ren) become an owner of the Dwelling Unit and enter into an assumption agreement relating to the Addendum and this Notice; or (3) A transfer resulting from a decree of dissolution of marriage, legal separation agreement, or from an incidental property settlement agreement by which the spouse becomes the sole owner of the Dwelling Unit. d. A transfer into an inter vivos trust in which the Owner is and remains the beneficiary and occupant of the Dwelling Unit, unless, as a condition precedent to such transfer, the Owner refuses to provide the City with reasonable means acceptable to the City Manager or designee by which the City will be assured of timely notice of any subsequent transfer of the beneficial interest or change in occupancy of the Dwelling Unit. Provided, however, that the covenants contained in and the restrictions imposed on Owner and the Dwelling Unit by this Notice and the Addendum shall continue to encumber and run with title to the Dwelling Unit following said transfers. 8. This Notice relates to the aforementioned Addendum which restricts the resale and use of the Dwelling Unit. Owner agrees Owner shall not encumber the Dwelling Unit for the purpose of securing financing either senior or junior in priority or subordinated to this Notice or the Addendum without the prior written approval of City. In the event the Dwelling Unit or any portion thereof is made subject to a junior or senior lien or Page 10 K:\CGM\Patterson at Huntington Condos(Habitat of Orange)\City Notice of Restrictions and Option O.doc encumbrance, the City shall be entitled to exercise the remedies available to the City pursuant to this Notice and the Addendum. 9. Notwithstanding any other provision of law, this Notice shall run with the land and shall be enforceable against Owner and successors in interest by City or its successor in interest. The covenants, conditions, restrictions, limitations and provisions of this Notice shall remain in effect with respect to the Dwelling Unit until the sixtieth (60t') anniversary of the date the City issues a permanent certificate of occupancy for the Dwelling Unit, provided, however, that the covenants, conditions, restrictions, limitations and provisions contained in Section 18 and 19 herein shall run in perpetuity. 10. This Notice, without regard to technical classification or designation, shall be binding for the benefit of the City, and such covenants shall run in favor of the City for the entire period during which such covenants shall be in force and effect, without regard to whether the City is or remains an owner of any land or interest therein to which such covenants relate. The City, 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 proceedings to enforce the curing of such breach. 11. Defaults. a. Failure or delay by Owner to perform any term or provision of this Notice constitutes a default under this Notice. The City shall give written notice of default to Owner, specifying in reasonable detail the matter constituting the default. Owner shall have thirty (30) days following receipt of notice to cure the default. Except as required to protect against further damages, the City shall not institute proceedings against the party in default unless the matter is not cured within such thirty (30) day period, or, if the default is of a nature requiring more than thirty (30) days to cure, Owner commences to cure the matter within such thirty (30) day period and diligently pursues such cure to completion within a reasonable time, but in no event more than ninety (90) days after notice of default. Failure or delay by City in giving such notice shall not constitute a waiver of any default, nor shall it change the time of default. Failure to cure the default within the applicable cure period shall entitle City to apply to a court of competent jurisdiction for specific performance of the obligations of this Notice, for an injunction prohibiting a proposed Transfer in violation of this Notice, for a declaration that a Transfer in violation of the provisions of this Notice is void or any such relief at law or in equity as may be appropriate. Owner, and/or Owner's purchaser or transferee in those circumstances where a Transfer has occurred in violation of this Notice, shall hold City and its employees or other agents harmless and reimburse the expenses, legal fees and costs for any action City or its employees or other agents take in enforcing the provisions of this Notice. b. Except as otherwise expressly stated in this Notice, the rights and remedies of the parties are cumulative, and the exercise or failure to exercise one or more of such rights or remedies by either party shall not preclude the exercise by it, at the same time or different times, of any right or remedy for the same default or any other default by the other party. No waiver by City of any default or breach by Owner hereunder shall Page 11 K:\CG\HB\Patterson at Huntington Condos(Habitat of Orange)\City Notice of Restrictions and Option (7).doc be implied from any omission by City to take action on account of such default if such default persists or is repeated, and no express waiver shall affect any default other than the default specified in the waiver, and such wavier shall be operative only for the time and to the extent therein stated. Waivers of any covenant, term, or condition contained herein shall not be construed as a waiver of any subsequent breach of the same covenant, term or condition. The consent or approval by City to or of any act by Owner requiring further consent or approval shall not be deemed to waive or render unnecessary the consent or approval to or of any subsequent similar act. The exercise of any right, power, or remedy shall in no event constitute a cure or a waiver of any default under this Notice, nor shall it invalidate any act done pursuant to notice of default, or prejudice City in the exercise of any right, power, or remedy hereunder. 12. Only the City and the Owner, its successor, and assigns in and to the Dwelling Unit shall have the right to consent and agree to changes in, or to eliminate in whole or in part, this Notice or to subject the Dwelling Unit to additional covenants, easements, or other restrictions without the consent of any tenant, lessee, easement holder, licensee, trustee, beneficiary under a deed of trust (other than the Senior First Mortgage Loan) or any other person or entity having an interest less than a fee in the Dwelling Unit. This Notice, without regard to technical classification or designation, shall not benefit or be enforceable by any person, or firm, or corporation, public or private, except the City and the Owner and their respective successors and assigns. 13. Acceptance of Terms by Owner By execution of this Notice, Owner accepts and agrees to be bound by all of the covenants and restrictions contained in this Notice, and further acknowledges receipt of and agrees to be bound by the provisions of this Notice. 14. Non -liability of City In no event shall City become in any way liable or obligated to Owner or to any successor -in -interest of Owner by reason of the Option, nor shall City be in any way obligated or liable to Owner or any successor- in -interest of Owner for any failure to exercise such Option. City shall be not be liable to Owner or become obligated in any manner to any owner by reason of the enforcement of this Notice, nor shall City be in any way obligated or liable to Owner or any subsequent owner for any failure of any purchaser to consummate a purchase of the Dwelling Unit or to comply with the terms of any agreement of escrow for the sale of the Dwelling Unit. Only the purchaser executing a purchase agreement or escrow instruction shall be liable to Owner or any owner pursuant to the terms of any such agreement or escrow instructions. City shall not be liable or responsible for any defect in the condition of the Dwelling Unit of whatever nature and Owner, on behalf of itself and any successor -in -interest of Owner, agrees to release City from any such liability and/or responsibility and further agrees to hold City harmless from any claim or cause of action brought by third parties arising out of any such defect. Page 12 K:\CG\HB\Patterson at Huntington Condos(Habitat of Orange)\City Notice of Restrictions and Option (7).doc 15. Invalid Provisions If any one or more of the provisions contained in this Notice shall for any reason be held to be invalid, illegal or unenforceable in any respect, then such provision or provisions shall be deemed severable from the remaining provisions contained in this Notice, and this Notice shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein. 16. Controlling Law The internal laws of the State of California shall govern the interpretation and enforcement of this Notice. 17. Intemretation of Notice The terms of this Notice shall be interpreted to encourage to the extent possible that the Dwelling Unit and any mortgage payments of the Dwelling Unit remain affordable to [Low Income HouseholdsNery Low Income] Households. 18. Nondiscrimination 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 Dwelling Unit, or any part thereof, nor shall Owner or any person claiming under or through Owner 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 of the Dwelling Unit. 19. Form of Nondiscrimination and Nonsegregation Clauses All deeds, contracts or leases relating or pertaining to the Dwelling Unit 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 any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises herein conveyed, nor shall the grantee or any person claiming under or through him or her, establish or permit any 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 the premises herein conveyed. The foregoing covenants shall run with the land." Page 13 K:\CG\HBTatterson at Huntington Condos(Habitat of Orange)\City Notice of Restrictions and Option (7).doc 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: That there shall be no discrimination against or segregation of any person or group of persons, on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, 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 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 any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the land, nor shall the transferee itself 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, sublessees, subtenants, or vendees of the land." [Remainder of this page intentionally left blank.] Page 14 K:\CG\HB\Patterson at Huntington Condos(Habitat of Orange)\City Notice of Restrictions and Option (7).doc IN WITNESS WHEREOF, the parties have executed this Notice as of the day and year written below. I j Name: Raul Cendeias Guzman Dated: IM Name: Adelina Lopez de Guzman Dated: Page 15 CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California City Manager INITIATED AND APPROVED: Director of Economic Development APPROVED AS TO FORM: City Attorney KANE, BALLMER & BERKMAN Special Counsel Jhaila R. Brown K:\CG\HB\Patterson at Huntington Condos(Habitat of Orange)\City Notice of Restrictions and Option (7).doc Exhibit "A" Legal Description [to be added] Page 16 K:\CG\HB\Patterson at Huntington Condos(Habitat of Orange)\City Notice of Restrictions and Option (7).doc State of California Orange County On before me, a Notary Public, personally appeared , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) 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. Signature Page 17 (Seal) K:\CG\HB\Patterson at Huntington Condos(Habitat of Orange)\City Notice of Restrictions and Option (7).doc State of California Orange County On before me, a Notary Public, personally appeared , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) 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. Signature Page 18 (Seal) K:\CG\HS\Patterson at Huntington Condos(Habitat of Orange)\City Notice of Restrictions and Option (7).doc State of California Orange County On before me, a Notary Public, personally appeared , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) 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. Signature Page 19 (Seal) K:\CG\HB\Patterson at Huntington Condos(Habitat of Orange)\City Notice of Restrictions and Option (7).doc ATTACHMENT NO. 3 FORM OF ADDENDUM TO GRANT DEED FROM DEVELOPER TO PURCHASER [behind this page] FORM OF ADDENDUM TO GRANT DEED FROM DEVELOPER TO PURCHASER A. Purpose of this Addendum. This Addendum to Grant Deed (this "Addendum") is attached to and made part of that certain Grant Deed between HABITAT OF HUMANITY OF ORANGE COUNTY, INC., a California nonprofit public benefit corporation ("Developer" herein) and , individual ("Owner" herein) and provides that the property which is the subject of the Grant Deed ("Dwelling Unit") is conveyed by Developer subject to the deed restrictions (collectively the "Deed Restriction") set forth below. Words and phrases used in this Addendum shall have the same meanings as in the City Affordable Housing Agreement unless specifically provided otherwise. If there is any conflict between the provisions of this Addendum and the provisions of the Grant Deed, the provisions of this Addendum will prevail. B. Subsidy. In accepting said Deed Restriction, the undersigned Owner understands and . acknowledges that the Dwelling Unit is being sold to the Owner because Owner qualifies as a [Low Income Household/ Very Low Income Household]; that the Dwelling Unit is being sold to Owner for a sales price that results in an Affordable Housing Cost to Owner as the result of a development subsidy made available under the HOME Program (defined below) (the "Subsidy") provided to Developer by the City of Huntington Beach, a municipal corporation ("City") in accordance with a certain Affordable Housing Property Transfer Agreement by and between City and Developer, dated as of September 6, 2011, as amended by that certain First Amendment to the Affordable Housing Property Transfer Agreement dated February 6, 2012 and as modified by that certain Implementation Agreement to the Affordable Housing Property Transfer Agreement dated , 2012 (collectively the, "City Affordable Housing Agreement") which City Affordable Housing Agreement is a public record on file in the office of the City; that the Subsidy has been passed along and made available to Owner in the form of a lower sales price for the Dwelling Unit presenting a lower burden to Owner; and that without the Subsidy, the sales price of the Dwelling Unit would exceed the amount that is affordable to Owner. Provided, however, that nothing contained herein is intended to prohibit Owner from benefiting from additional financing subsidies, if available, including, without limitation, subsidies made available under the Federal Home Loan Bank of San Francisco's Affordable Housing Program, Workforce Initiative Subsidy for Homeownership (WISH) program and similar programs. C. Dwelling Unit Subject to Community Redevelopment Law. The Property (as defined in the City Affordable Housing Agreement) on which the Dwelling Unit is constructed was originally acquired by the Redevelopment Agency of the City of Huntington Beach, a public body, corporate and politic (the "Agency"), using funds from its Low and Moderate Income Housing Fund, established and maintained by the Agency pursuant to California Health and Safety Code Section 33334.2 et sec . The City later acquired the Property from the Agency and conveyed it to Developer to carry out the purposes set forth in the City Affordable Housing Agreement. Since the development of the Dwelling Unit has been assisted with moneys from the Low and Moderate Income Housing Fund, the Property and the Dwelling Unit are subject to California Community Redevelopment Law (commencing with Section 33000 of the Health and Safety Code and hereinafter referred to as the "CRL"). Addendum to Grant Deed Form of Addendum to Grant Deed (purchaser)(3).doc D. Deed Restrictions. Upon the due execution, delivery and recordation of this Addendum, the CC&R's (Resale Restrictions) which restrict the use of the Property on which the Dwelling Units was constructed shall be released as to the Dwelling Unit and replaced with the terms, restrictions and provisions of this Addendum. Accordingly, and in return for and in consideration of the opportunity for the Developer to sell and the Owner to purchase the Dwelling Unit under the above -referenced circumstances and for other good and valuable consideration, the receipt and legal sufficiency of which the undersigned hereby acknowledge, the Owner, on behalf of himself, herself, or themselves and with the express intent to bind all those defined as "Owner" in Paragraph 1 below, hereby agrees as follows: 1. Definitions "Affordability Period" shall mean the period commencing on the date the City issues a permanent certificate of occupancy for the Dwelling Unit and continuing for sixty (60) years thereafter, during which such period the Dwelling Unit may only be sold pursuant to the terms and restrictions set forth herein. "Affordable Purchase Price" shall mean a purchase price for the Dwelling Unit that does not exceed an Affordable Housing Cost. "Affordable Housing Cost [Low Incomel" shall mean as to the initial sale of a Dwelling Unit and any sale of a Dwelling Unit during the first fifteen years of the Affordability Period the lesser of, (I) monthly housing payments as defined by section 6920 of Title 25 of the California Code of Regulations, including payments for principal, interest, mortgage loan insurance fees, property taxes and assessments, fire and casualty insurance, a reasonable utility allowance (unless precluded by Federal requirements) and homeowner association fees, if any, which do not exceed the maximum housing cost allowed for Low Income Households in accordance with Section 50052.5 of the California Health and Safety Code, as may be amended from time to time, and (ii) a purchase price for the type of single family housing that does not exceed 95 percent of the median purchase price for the area pursuant to § 92.254 a. 2. ii. and iii. of the HOME Regulations as such now exists and as may hereafter be amended. Commencing on the sixteenth year of the Affordability Period, the term "Affordable Housing Cost" shall only have the meaning set forth in clause (i) of the preceding sentence. "Affordable Housing Cost rVery Low Income]" shall mean as to the initial sale of a Dwelling Unit and any sale of a Dwelling Unit during the first fifteen years of the Affordability Period the lesser of, (i) monthly housing payments as defined by section 6920 of Title 25 of the California Code of Regulations, including payments for principal, interest, mortgage loan insurance fees, property taxes and assessments, fire and casualty insurance, a reasonable utility allowance (unless precluded by Federal requirements) and homeowner association fees, if any, which do not exceed the maximum housing cost allowed for Very Low Income Households in accordance with Section 50052.5 of the California Health and Safety Code, as may be amended from time to time, and (ii) a purchase price for the type of single family housing that does not exceed 95 percent of the median purchase price for the area pursuant to § 92.254 a. 2. ii. and iii. of the HOME Regulations as such now exists and as may hereafter be amended. Commencing on the Addendum to Grant Deed 2 Form of Addendum to Grant Deed (purchaser)(3).doc sixteenth year of the Affordability Period, the term "Affordable Housing Cost" shall only have the meaning set forth in clause (i) of the preceding sentence. "Capital Improvements" shall mean physical improvements made on the Dwelling Unit by the Owner that materially add to the value of the Dwelling Unit and considerably prolong its useful life, as determined by the Director. Examples of Capital Improvements include, but are not limited to, adding a new bathroom, installing new plumbing or wiring, installing a new roof, or repaving the driveway. Repairs or maintenance to the Dwelling Unit are not considered Capital Improvements. "City Affordable Housing Agreement" shall mean the Affordable Housing Property Transfer Agreement by and between City and Developer, dated as of September 6, 2011, as amended by that certain First Amendment to the Affordable Housing Property Transfer Agreement dated February 6, 2012 and as modified by that certain Implementation Agreement to the Affordable Housing Property Transfer Agreement dated , 2012. "CC&R's (Resale Restrictions)" shall mean the Declaration of Conditions, Covenants and Restrictions for Property (Resale Restrictions) dated September 29, 2011 and recorded September 29, 2011 as Document No. 2011000483564 in the Official Records. "City's Option" shall mean the City's option to purchase the Dwelling Unit pursuant to that certain "Notice of Restrictions and Option to Purchase Dwelling Unit" dated of approximately even date herewith by and between City and Owner and recorded concurrently herewith in the Official Records. The City's Option shall be senior in priority to the Senior First Mortgage Loan, Senior First Mortgage Loan Deed of Trust, WISH Mortgage Loan Deed of Trust, and any other liens, mortgages, options and encumbrances on the Dwelling Unit. The City's Option shall be freely assignable by the City to a Qualified Purchaser. "Developer Loan Documents" shall mean the promissory note, Senior First Mortgage Loan Deed of Trust and any other document executed in connection with the Senior First Mortgage Loan to Owner by Developer. "Director" shall mean the Director of Economic Development for the City of Huntington Beach or designee. "Dwelling Unit" shall mean the three bedroom [or four bedroom] unit located at 1841 Patterson Lane, Unit No. 1 [or Unit 2] , Huntington Beach, California 92646 as described in the legal description attached to the Grant Deed as Exhibit 1 and incorporated herein by this reference. "Event of Default" shall mean any of the following events upon which the City may exercise its option to purchase the Dwelling Unit pursuant to the City's Option, (a) a Transfer of the Property; (b) an uncured default under the Grant Deed; (c) an uncured default by Owner under the Addendum to Grant Deed or City's Option; (d) any refinancing of the Senior First Mortgage Loan, provided however, that the City will not exercise its option upon refinance of the Senior First Mortgage Loan, if the Senior First Mortgage Loan is refinanced with Developer and the amount refinanced does not exceed the outstanding principal of the Senior First Mortgage Loan Addendum to Grant Deed Form of Addendum to Grant Deed (purchaser)(3).doc plus value of Capital Improvements made by Owner to the Dwelling Unit, and closing costs; (e) any prepayment of the Senior First Mortgage Loan; (f) an uncured default by Owner on the promissory note evidencing the Senior First Mortgage Loan, or Senior First Mortgage Loan Deed of Trust or any other Senior First Mortgage Loan document, or any other senior or junior lien or encumbrance on the Dwelling Unit; (g) an uncured default by Owner on the promissory note evidencing the WISH Mortgage Loan or WISH Mortgage Loan Deed of Trust; (h) any refinancing or prepayment of the WISH Fourth Mortgage Loan or any portion thereof, and (i) an uncured default by Owner on the Humanity Housing Option. "HOME Loan" shall mean the financial assistance provided by the City to Developer in the amount of $748,437 derived from the United States Department of Housing and Urban Development ("HUD") under the HOME Investment Partnerships Program (the "HOME Program") in accordance with the HOME Regulations, for the purposes of strengthening public - private partnerships to provide decent, safe, sanitary, and affordable housing. "HOME Regulations" shall mean the regulations issued by HUD and set forth in 24 Code of Federal Regulations ("CFR") Part 92. "Humanity Housing" shall mean Humanity Housing, Inc., a California non-profit public benefit corporation, and an affiliate of Developer. "Humanity Housing Option" shall mean the Affordable Housing Agreement for Raul Cendejas Guzman and Adelina Lopes de Guzman executed by Raul Cendejas Guzman and Adelina Lopes de Guzman and Humanity Housing, Inc., dated , 2012 and recorded on , 2012 in the Official Records. The Humanity Housing Option is junior in priority to this Addendum. "Low Income Household" shall mean "Low Income Household" means the more restrictive of the following, (i) a Household whose gross income does not exceed the maximum qualifying income for a "lower income household" as defined in Section 50079.5 of Health and Safety Code, and (ii) a Household whose annual gross income does not exceed the maximum qualifying income for "Low-income families" as defined in 24 Code of Federal Regulations (CFR) Part 92, Section 92.2. "Gross income" shall be determined in accordance with Section 6914 of Title 25 of the California Code of Regulations and 24 CFR Part 92, Section 92.203 (b)(2). "Official Records" shall mean the Official Records of the Recorder's Office for Orange County. "Owner" shall mean and include the undersigned Owner and any or all successors in interest (whether voluntary or involuntary), transferees, assigns, heirs, executors, or administrators of the undersigned. "Qualified Purchaser" or "Purchaser" shall mean a qualified Low Income [Very Low Income] Household and the Low Income [Very Low Income] Household occupies the Dwelling Unit as its principal residence. "Resale Price" shall mean the total compensation paid to the Owner upon the sale of the Dwelling Unit. The Resale Price shall be an Affordable Purchase Price and provide the original Addendum to Grant Deed 4 Form of Addendum to Grant Deed (purchaser)(3).doc HOME Program assisted Owner a fair return on investment (including the Owner's investment and any Capital Improvement) pursuant to Section 92.254 a. 5. (i) of the HOME Regulations. "Senior First Mortgage Loan Deed of Trust" shall mean the first priority deed of trust on the Dwelling Unit, in a form reasonably acceptable to the Director, which secures the Senior First Mortgage Loan. The Senior First Mortgage Loan Deed of Trust is junior in priority to this Addendum and the City's Option. "Senior First Mortgage Loan" shall mean a loan made by a Senior Lender to Owner to be used to pay a portion of the Affordable Purchase Price of the Dwelling Unit, which shall be secured by a Senior First Mortgage Loan Deed of Trust and other security instruments having a lien on the Dwelling Unit that is senior in priority to the lien of the WISH Mortgage Loan Deed of Trust. "Senior Lender" shall mean Developer or the lender of any permanent loan or the beneficiary of a deed of trust securing any loan to finance Owner's acquisition of the Dwelling Unit, which deed of trust is senior in priority to all other mortgages on the Dwelling Unit. "Subsidy" shall mean the HOME Loan funds provided to the Developer by the City to pay a portion of the development costs for the Dwelling Unit. "Transfer" shall mean any sale, transfer, assignment or conveyance of the Dwelling Unit, any portion thereof or interest therein, including, without limitation, any lease, exchange, or other disposition of any interest in the Dwelling Unit, whether voluntary or involuntary, and/or a refinance of the Senior First Mortgage Loan, except that the following transfers shall not, for purposes of the City's Option, be considered a Transfer resulting in an event of default under the City's Option:(1) a transfer resulting from the death of an obligor where the transfer is to the spouse who is also an obligor; (2) a transfer by an obligor where the spouse becomes a co-owner of the Dwelling Unit; (3) a transfer resulting from a decree of dissolution of the marriage or legal separation or from a property settlement agreement incidental to such a decree which requires the obligor to continue to make the loan payments by which a spouse who is an obligor becomes the sole owner of the Dwelling Unit; (4) a transfer by an obligor or obligors into an inter vivos trust in which the obligor or obligors are beneficiaries; (5) a transfer resulting from Humanity Housing's exercise of its option pursuant to the Humanity Housing Option; or (6) transfer resulting from a trustee's sale held as a result of a foreclosure of a Senior First Mortgage Loan Deed of Trust, or a transfer by deed -in -lieu of foreclosure to a Senior Lender, provided the conditions set forth in Subsections 4.b.(1) or (2) (as applicable) of the City's Option are fully satisfied. "Very Low Income Household" shall mean the more restrictive of the following, (i) a Household whose gross income does not exceed the maximum qualifying income for a "very low income household" as defined in Section 50105 of Health and Safety Code, and (ii) a Household whose annual gross income does not exceed the maximum qualifying income for "Very low-income families" as defined in 24 Code of Federal Regulations (CFR) Part 92, Section 92.2. "Gross income" shall be determined in accordance with Section 6914 of Title 25 of the California Code of Regulations and 24 CFR Part 92, Section 92.203 (b)(2). Addendum to Grant Deed 5 Form of Addendum to Grant Deed (purchaser)(3).doc "WISH Mortgage Loan" shall mean a loan from California Bank and Trust or another member financial institution to an Owner derived from the Federal Home Loan Bank's Affordable Housing Program through its Workforce Initiative Subsidy for Homeownership (WISH) Program, in an amount not to exceed Fifteen Thousand Dollars ($15,000) which shall be used to pay a portion of the Affordable Purchase Price of the Dwelling Unit, evidenced by a promissory note and secured by a WISH Mortgage Loan Deed of Trust, that is subordinate to the Senior First Mortgage Loan Deed of Trust. "WISH Mortgage Loan Deed of Trust" shall mean a deed of trust, in a form reasonably acceptable to the City, which shall be subordinate to the Senior First Mortgage Loan Deed of Trust which secures the WISH Fourth Mortgage Loan. The WISH Mortgage Loan Deed of Trust is also junior in priority to this Addendum and the City's Option. 2. Owner Occupancy. (a) Owner shall occupy the Dwelling Unit as his or her or their primary residence, and the Dwelling Unit shall be used as the principal residence of Owner and Owner's household and for no other purpose. The Dwelling Unit shall not be leased or rented by Owner to any person or entity. The maximum occupancy of the Dwelling Unit shall not exceed the maximum occupancy allowed by the Uniform Housing Code. (b) The City shall have the right to monitor whether the Dwelling Unit is owner -occupied by requesting that Owner provide the City, no more frequently than two (2) times in any consecutive twelve (12) month period, with a written certification under penalty of perjury that the Dwelling Unit is owner -occupied, accompanied by supporting documentation reasonably satisfactory to the City. In the event of a breach or threatened breach of this paragraph (b) or a breach of the owner occupancy requirements of the City's Option, the City or their successors or assigns shall be entitled to institute legal action to enforce performance of this paragraph (b) and to obtain an injunction prohibiting anyone but Owner from occupying the Dwelling Unit and/or requiring Owner to occupy the Dwelling Unit and/or requiring Owner to sell the Dwelling Unit to a Low Income Household [or Very Low Income Household] who will occupy the Dwelling Unit as his or her or their primary residence. (c) These owner -occupancy restrictions may be modified or terminated only upon the written approval of the City. Method of Resale (a) Resale Requirements. Subject to the requirements set forth in the City's Option and the Humanity Housing Option, the following conditions must also be satisfied prior to the resale of the Dwelling Unit by Owner ("Resale"): (i) Available for Subsequent Purchase by Low Income [Very Low] Household Only. Pursuant to Section 92.254 a. 5. (i) of the HOME Regulations, if the Dwelling Unit does not continue to be the principal residence of the Owner for the duration of the Affordability Period, the Dwelling Unit must be made available for subsequent purchase only to a Addendum to Grant Deed 6 Form of Addendum to Grant Deed (purchaser)(3).doc buyer whose family qualifies as a Low Income Household [or Very Low Income Household] and the household will use the Dwelling Unit as its principal residence. (ii) Ordinal Owner Must Receive Fair Return on Investment. Pursuant to Section 92.254 a. 5. (i) of the HOME Regulations, the price of the Dwelling Unit at resale shall provide the original HOME Program assisted Owner a fair return on investment (including the Owner's investment and any Capital Improvement). (iii) Housing Must Remain Affordable. Pursuant to Section 92.254 a. 5. (i) of the HOME Regulations, the Dwelling Unit must remain affordable to a reasonable range of Low Income Households [or Very Low Income Households] for the duration of the Affordability Period. (b) Procedures to Notify City (i) Notice of Proposed Resale. Owner shall not sell or otherwise transfer the Dwelling Unit except in accordance with this Addendum and the City's Option. If the Owner of the Dwelling Unit desires to sell or otherwise transfer the Dwelling Unit, the Owner shall notify the City in writing (hereinafter referred to as the "Notice of Intended Sale") and provide such information as the City shall reasonably request regarding the proposed sale or transfer. The Notice of Intended Sale shall state the street address of the Dwelling Unit, the Owner's full name(s), the name and current address of the proposed purchaser, and the terms of the proposed transaction. The Notice of Intended Sale, together with the City -required information shall be personally delivered or deposited into the U.S. mail, postage prepaid, first class, certified mail, return receipt requested, addressed to: City of Huntington Beach 2000 Main Street Huntington Beach, California 92648 Attention: Director of Economic Development (ii) Submission of Additional Information. Representatives of the City may at any time after the City's receipt of the Notice of Intended Sale, request that the Owner or the proposed purchaser provide additional information regarding the proposed transaction for the transfer of the Dwelling Unit, and the Owner and/or purchaser shall supply such information as soon as practicable. (iii) Qualified Purchasers. In. the case of a Transfer and/or proposed Resale pursuant to a bonafide offer to purchase the Dwelling Unit by a proposed Qualified Purchaser, upon receipt of the requested information, the Director shall promptly determine whether the proposed purchaser is a Qualified Purchaser. (iv) Exercise of Option; Assignment of Addendum. If Humanity Housing elects to exercise the Humanity Housing Option to purchase the Dwelling Unit for sale to a Qualified Purchaser, the City and Owner shall execute and record such instruments as may be necessary to permit the Qualified Purchaser to assume Owner's obligations under this Addendum. Addendum to Grant Deed Form of Addendum to Grant Deed (purchaser)(3).doc Upon receipt of the Notice of Intended Sale, in the event Humanity Housing does not exercise its option to purchase the Dwelling Unit pursuant to the Humanity Housing Option, the City (or its delegated representative) shall notify Owner whether the City elects to exercise its option to purchase the Dwelling Unit pursuant to the City's Option. If the City elects not to exercise its City's Option, the Dwelling Unit must be sold with the Deed Restrictions to a Qualified Purchaser for an Affordable Purchase Price. The City and Owner shall execute and record such instruments as may be necessary to permit the Qualified Purchaser to assume Owner's obligations under this Addendum. (c) Notice of Default Under Deed of Trust or Mortgage, and City's Right to Enforce. The Owner covenants to cause to be filed in the Office of the Recorder of Orange County a request for a copy of any notice of sale or notice of default under any deed of trust or mortgage with power of sale encumbering the Dwelling Unit or any part thereof. Such request shall specify that any such notice shall be mailed to: City of Huntington Beach 2000 Main Street Huntington Beach, California 92648 Attention: Director of Economic Development (d) Disposition of the Dwelling Unit Contrary to Agreement; Other Defaults. If the Owner sells, Transfers, conveys or otherwise disposes of the Dwelling Unit contrary to this Addendum to Grant Deed, the City Option, Humanity Housing Option, any Developer Loan Document, or any promissory note, trust deed or lien secured against and/or encumbering the Dwelling Unit, the City shall at any time thereafter, at its election, have the right to declare such disposition or other act null and void and/or seek enforcement of the terms and conditions thereof in any manner whatsoever and by law or equity. 4. Limits on Liability The City shall not be liable to Owner or become obligated in any manner to any Owner by reason of the enforcement of this Deed Restriction, nor shall the City be in any way obligated or liable to Owner or any subsequent Owner for any failure of any person to consummate a purchase of the Dwelling Unit or to comply with the terms of any agreement of escrow for the sale of the Dwelling Unit. Only the purchaser executing a purchase agreement or escrow instruction shall be liable to Owner or any subsequent Owner pursuant to the terms of any such agreement or escrow instructions. The City shall not be liable or responsible for any defect in the condition of the Dwelling Unit of whatever nature and Owner, on behalf of itself and each subsequent Owner, agrees to release the City from any such liability and/or responsibility and further agrees to hold the City harmless from any claim or cause of action brought by third parties arising out of any such defect. Addendum to Grant Deed 8 Form of Addendum to Grant Deed (purchaser)(3).doc 5. Transfers and Conveyances Until such time as this Addendum is released by the City or expires, the Dwelling Unit and any interest or title thereto shall not be sold, leased, rented, assigned, or otherwise transferred to any person or entity except with the express written consent of the Director, which consent shall be granted or denied in the sole discretion of the Director and only if consistent with the City's goal of creating, preserving, maintaining, and protecting affordable Low Income [Very Low Income] housing in the City of Huntington Beach, and denial of which consent shall result in the City having the right, at its election, to declare the sale, lease, transfer, assignment or rental to be null and void and seek judicial enforcement thereof. Permitted Transfers The following transfers of title or any interest therein shall not constitute an Event of Default under the City's Option or this Addendum: a. The creation of a purchase -money security interest for household appliances; b. A transfer by devise, descent, or operation of law on the death of a joint tenant or tenant by the entirety; C. A transfer, in which the transferee is a person who occupies or will occupy the Dwelling Unit, which is: (1) A transfer by an Owner where the spouse becomes the co-owner of the Dwelling Unit and enters into an assumption agreement relating to the Addendum and this Notice; (2) A transfer where the spouse or child(ren) become an owner of the Dwelling Unit and enter into an assumption agreement relating to this Addendum and the City' Option; or (3) A transfer resulting from- a decree of dissolution of marriage, legal separation agreement, or from an incidental property settlement agreement by which the spouse becomes the sole owner of the Dwelling Unit. d. A transfer into an inter vivos trust in which the Owner is and remains the beneficiary and occupant of the Dwelling Unit, unless, as a condition precedent to such transfer, the Owner refuses to provide the City with reasonable means acceptable to the Director by which the City will be assured of timely notice of any subsequent transfer of the beneficial interest or change in occupancy of the Dwelling Unit. Provided, however, that the covenants contained in and the restrictions imposed upon the Owner and the Dwelling Unit by this Addendum shall continue to encumber and run with the title to the Dwelling Unit following said transfers. Addendum to Grant Deed Form of Addendum to Grant Deed (purchaser)(3).doc 7. Permitted Encumbrances; Foreclosures This Addendum is based upon the aforementioned City's Option on the Dwelling Unit in favor of the City. The Owner shall not encumber the Dwelling Unit for the purpose of securing financing either senior in priority or subordinated to said City's Option without the prior written approval of the City. Subject to Section 92.254 a. of the HOME Regulations during the first fifteen (15) years of the Affordability Period, if the Dwelling Unit is acquired at a foreclosure sale under any deed of trust or mortgage encumbering the Dwelling Unit or by deed in lieu of foreclosure sale, title to the Dwelling Unit shall be taken subject to the covenants, restrictions and terms of the Grant Deed (including, but not limited to this Addendum and the City's Option). 8. Runs With Land Unless otherwise provided by the terms herein, provisions of this Addendum constitute covenants which shall run with the land, shall further and independently constitute an encumbrance upon the Dwelling Unit, and shall be binding upon the Owner, the Owner's heirs, executors, administrators, successors, transferees and assigns, and all parties having or acquiring any right, title or interest in or to any part of the Dwelling Unit. As long as this Addendum has not expired, any attempt to transfer title to any interest in the Dwelling Unit in violation of this Addendum shall be voidable at the election of the City. 9. Seniority of Addendum. This Addendum shall be senior to all liens, mortgages, options and encumbrances on the Dwelling Unit, including, but not limited to the Humanity Housing Option, Senior First Mortgage Loan Deed of Trust and WISH Mortgage Loan Deed of Trust. 10. Acceptance of Terms by Owner. By acceptance of the Grant Deed (including this Addendum), the Owner accepts and agrees to be bound by all of the covenants and restrictions contained in this Addendum, and further acknowledges receipt of this Addendum. 11. Term of Addendum The term of the provisions of the Grant Deed, including this Addendum, restricting the sale and resale of the Dwelling Unit shall be sixty (60) years following the date the City issues a permanent certificate of occupancy for the Dwelling Unit, except if the City releases this Addendum sooner in accordance with this Addendum. 12. Miscellaneous Provisions (a) Independent and Severable Provisions. In the event that any provision of this Addendum is held by a court of competent jurisdiction to be unenforceable or invalid, such holding shall not render unenforceable any other provision hereof, each provision hereof being expressly severable and independently enforceable to the fullest extent permitted by law. Addendum to Grant Deed 10 Form of Addendum to Grant Deed (purchaser)(3).doc (b) Further Assurances and Recordation. The Owner covenants that upon the request of the City, he, she or they will execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, such further instruments and agreements and do so such further acts as may be necessary, desirable or proper to carry out more effectively the purpose of this Addendum and other instruments required hereunder, including, but not limited to, the City's Option, and upon the sale or other transfer of an interest subject to said City's Option, the Owner shall cause the purchaser or transferee to execute and acknowledge an Addendum to Grant Deed in a form acceptable to the City, which shall be attached to the grant deed by which the undersigned conveys title to the Dwelling Unit. (c) Captions and Paragraph Headings. Captions and paragraph headings used herein are for convenience only and shall not be used in construing this Addendum. (d) Waiver. No waiver by the City of any breach by the Owner of any covenant, restriction or condition herein contained shall be effective unless such waiver is in writing, signed by the City and delivered to the undersigned. The waiver by the City of any such breach of breaches, or the failure by the City to exercise any right or remedy in any and all such breach or breaches, shall not constitute a waiver or relinquishment for the future of any such covenant or condition nor bar any right or remedy of the City in respect of any such subsequent breach. (e) Enforcement. The terms and provisions of this Addendum shall, without regard to technical classification and designation, be binding on Owner and any successor in interest to the Dwelling Unit or any part thereof for the benefit and in favor of the City and its successors and assigns. The City shall have the right, if any provisions of this Addendum are breached, to exercise all rights and remedies, and to maintain anyactions or suits at law or in equity or other proper proceedings to enforce the curing of such breaches to which it or any other beneficiary of this Addendum are entitled. By signature hereinbelow the Owner hereby accepts and approves the foregoing, agrees to be bound by the provisions of this Addendum and the deed to which this Addendum is attached, and grants to the City such powers and rights that are set forth in this Addendum to Grant Deed. [SIGNATURES APPEAR ON NEXT PAGE] Addendum to Grant Deed 11 Form of Addendum to Grant Deed (purchaser)(3).doc fi OWATJ2111 Date: By: Date: By: Accepted and agreed to by the City this day of , 20 Dated: CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California City Manager INITIATED AND APPROVED: Director of Economic Development APPROVED AS TO FORM: City Attorney KANE, BALLMER & BERKMAN Special Counsel Jhaila R. Brown Addendum to Grant Deed 12 Form of Addendum to Grant Deed (purchaser)(3).doc ATTACHMENT NO.4 FORM OF AMENDMENT TO CITY REGULATORY AGREEMENT [behind this page] FORM OF AMENDMENT TO DECLARATION OF CONDITIONS, COVENANTS AND RESTRICTIONS FOR PROPERTY (RESALE RESTRICTIONS) OFFICIAL BUSINESS Document entitled to free recording Per Government Code Section 6103 and 27383 RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO: City of Huntington Beach 2000 Main Street Huntington Beach, California 92648 Attention: Director of Economic Development AMENDMENT TO DECLARATION OF CONDITIONS, COVENANTS AND RESTRICTIONS FOR PROPERTY (RESALE RESTRICTIONS) This Amendment to Declaration of Conditions, Covenants and Restrictions for Property (Resale Restrictions) (the "Amendment to City's Resale Restrictions") is dated as of , 2012 by HABITAT FOR HUMANITY OF ORANGE COUNTY, INC., a California non-profit benefit corporation (the "Habitat"), and the CITY OF HUNTINGTON BEACH, a municipal corporation (the "City"). I. [§ 100] PURPOSE OF AMENDMENT TO CITY' S RESALE RESTRICTIONS Habitat and City previously executed that certain Declaration of Conditions, Covenants and Restrictions for Property (Resale Restrictions) dated September 6, 2011 and recorded on September 29, 2011 in the Official Records of the Recorder's Office of Orange County ("Official Records") as Document No. 2011000483564 (the "City's Resale Restrictions"). The City's Resale Restrictions, among other things, (i) restrict the use of that certain real property described in the legal description attached hereto as Attachment No. 1 and incorporated herein by this reference (the "Property") as two (2) single family residential units to be sold to and occupied by moderate, low and very low income families at an Affordable Housing Cost for the period set forth in the City's Resale Restrictions, and (ii) impose resale requirements. Habitat and the City entered into that certain Affordable Housing Property Transfer Agreement dated September 6, 2011 (the "Affordable Housing Agreement") as amended by that certain First Amendment to Affordable Housing Property Transfer Agreement dated February 6, 2012 (the "First Amendment") and that certain First Implementation Agreement to Affordable Housing Property Transfer Agreement dated , 2012 (the "First Implementation Agreement") The Affordable Housing Agreement, First Amendment and First Implementation Agreement are collectively referred to herein as the, "Affordable Housing Agreement." All capitalized terms Page 1 K:\CG\HB\Patterson at Huntington Condos(Habitat of Orange)\Amendment to Resale Restrictions(2).doc not defined herein shall have the meaning ascribed to such term in the Affordable Housing Agreement. The City is responsible for administering the use of certain funds made available to it by the United States Department of Housing and Urban Development ("HUD") under the HOME Investment Partnerships Program (the "HOME Program") in accordance with the regulations issued by HUD and set forth in 24 Code of Federal Regulations ("CFR") Part 92 (the "HOME Regulations") for the purposes of strengthening public -private partnerships to provide decent, safe, sanitary, and affordable housing. Pursuant to the Affordable Housing Agreement, the City, among other things, provided a loan to Habitat in the amount of $748,437 derived from the HOME Program (the "HOME Loan") to pay a portion of the Development costs for the Dwelling Units. Pursuant to § 92.254 a. 3. of the HOME Regulations, the Dwelling Units must be acquired only by homebuyers whose families qualify as low-income households. The Dwelling Units have been assisted with moneys from the Low and Moderate Income Housing Fund established and maintained pursuant to California Health and Safety Code Section 33334.2 et sec,, therefore the Property is subject to California Community Redevelopment Law, commencing with Section 33000 of the Health and Safety Code and hereinafter referred to as the "CRL." The purpose of this Amendment to City's Resale Restrictions is to provide for the following revisions to the City's Resale Restrictions pursuant to the provisions of the First Amendment, First Implementation Agreement and § 92.254 a. 3. of the HOME Regulations, (i) delete all references to "Moderate Income Households" as an affordability level permitted under the City's Resale Restrictions, (ii) limit the affordability levels permitted 'Under the City's Resale Restrictions to Low Income and Very Low Households only, and (iii) clarify that the City's Resale Restrictions, the Property and Habitat's use of the Property are subject to the CRL and the HOME Regulations. II. [§ 200] EFFECT OF AMENDMENT TO CITY' S RESALE RESTRICTIONS Except as expressly provided otherwise in this Amendment to City's Resale Restrictions, the City's Resale Restrictions remain in full force and effect, enforceable in accordance with its terms, without diminution or waiver of any kind of any right or remedy of the City thereunder. III. [§300] AMENDMENT TO RECITALS The recitals contained in the City's Resale Restrictions are hereby amended to add the following recitals: 1. "C. The Dwelling Units have been assisted with moneys from the Low and Moderate Income Housing Fund established and maintained pursuant to California Health and Safety Code Section 33334.2 et sec, therefore the Property is subject to California Community Redevelopment Law (commencing with Section 33000 of the Health and Safety Code and hereinafter referred to as the "CRY)." Page 2 K:\CG\HB\Patterson at Huntington Condos(Habitat of Orange)\Amendment to Resale Restrictions(2).doc 2. "D. A development subsidy in the amount of $748,437, derived from the United States Department of Housing and Urban Development ("HUD") under the HOME Investment Partnerships Program (the "HOME Program") in accordance with the regulations issued by HUD and set forth in 24 Code of Federal Regulations ("CFR") Part 92 (the "HOME Regulations"), was made available to Covenanter by City in accordance with that certain Affordable Housing Property Transfer Agreement by and between City and Developer, dated as of September 6, 2011, as amended by that certain First Amendment to the Affordable Housing Property Transfer Agreement dated February 6, 2012 and as modified by that certain Implementation Agreement to the Affordable Housing Property Transfer Agreement dated , 2012 (collectively the, "City Affordable Housing Agreement"). As such, Covenator's use of the Property is subject to the HOME Regulations. All capitalized terms not defined herein shall have the meaning ascribed to such terms in the City Affordable Housing Agreement." IV. [§400] AMENDMENT TO CITY'S RESALE RESTRICTIONS The City's Resale Restrictions is hereby amended as follows: 1. Delete all references to "Moderate Income Household" and "Moderate Income Households." 2. Provide that the term "Unit 1" shall mean the three —bedroom Dwelling Unit to be constructed on the Property. 3. Provide that the term "Unit 2" shall mean the four —bedroom Dwelling Unit to be constructed on the Property. 4. Section La., shall be deleted in its entirety and replaced with the following, "(a) Unit 1 shall be owned and occupied by Covenantor for subsequent sale to a qualified Very Low Income Household (as that term is defined in the City Affordable Housing Agreement)." Section Lb., shall be deleted in its entirety and replaced with the following, "(b) Unit 2 shall be owned and occupied by Covenantor for subsequent sale to a qualified Low Income Household (as that term is defined in the City Affordable Housing Agreement)." 6. The second sentence in Section 1. (c) shall be deleted in its entirety and replaced with the following, ""Affordable Housing Cost" shall have the meaning attributed to it in the Affordable Housing Agreement, as amended." 7. Add a Section 9 which provides the following: i. "9. Notwithstanding anything to the contrary contained herein, the terms of and provisions of this Declaration shall be subject to the CRL and HOME Regulations." Page 3 K:\CG\HB\Patterson at Huntington Condos(Habitat of Orange)\Amendment to Resale Restrictions(2).doe V. [§500] NOTICE OF TRANSFER OF AFFORDABLE UNIT Section 2 of the City's Resale Resale Restrictions (Transfer of affordable unit) is hereby amended to delete the second paragraph commencing with the words, "Within (7) days of receiving such notice" and replace with the following paragraph: "In the event Covenantor intends to sell or otherwise effect a Transfer of a Dwelling Unit, Covenantor shall promptly notify City in writing of such intent ("Covenantor's Notice"). The written notice shall be given in accordance with Section 703 of the City Affordable Housing Agreement at least sixty (60) days prior to the actual date of any Transfer. If applicable, the Covenantor's Notice shall specify all the terms of such Transfer, and provide such information as the City shall reasonably require regarding the proposed Transfer. Representatives of the City may at any time after the submission of the Covenantor's Notice, require that the Covenantor or the proposed transferee, as applicable, provide additional information regarding the proposed transaction for the Transfer of the Dwelling Unit, and the Covenantor and/or transferee, as applicable, shall supply such information as soon as practicable. In the case of any proposed sale of the Dwelling Unit, the City may require the Covenantor and the proposed purchaser to certify in writing in a form that is reasonably acceptable to the City, that the Covenantor and the proposed purchaser have not paid, have no agreement to pay and will not pay, to the other such party, or to any other person, any money or other consideration in addition to the consideration described in the written offer and conditional acceptance." VI. [§600] DUPLICATE ORIGINALS This Amendment to City's Resale Restrictions may be signed in counterparts, each of which shall be deemed an original, and all such counterparts shall constitute one and the same instrument. [REMAINDER OF PAGE INTENTIONALLY BLANK] [SIGNATURES ON THE FOLLOWING PAGE] Page 4 K:\CG\HB\Patterson at Huntington Condos(Habitat of Orange)\Amendment to Resale Restrictions(2).doc IN WITNESS WHEREOF, City and Habitat have caused this instrument to be executed on their behalf by their respective officers hereunto duly authorized on the date set forth above. HABITAT FOR HUMANITY OF ORANGE COUNTY, INC., a California non-profit public benefit corporation By:_ Name: Its: Dated: By:_ Name: Its: Dated: CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California City Manager INITIATED AND APPROVED: Director of Economic Development APPROVED AS TO FORM: City Attorney KANE, BALLMER & BERKMAN Special Counsel Jhaila R. Brown Page 5 K:\CG\HB\Patterson at Huntington Condos(Habitat of Orange)\Amendment to Resale Restrictions(2).doe State of California ) County of ) On before me, , a Notary Public, personally appeared , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) 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. Signature (Seal) State of California ) County of ) On before me, , a Notary Public, personally appeared , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) 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. Signature (Seal) State of California County of On before me, a Notary Public, personally appeared , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) 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. Signature (Seal) ATTACHMENT NO. 1 LEGAL DESCRIPTION OF PROPERTY (behind this page) ATTACHMENT NO. 5 FORM OF AMENDED NOTICE OF AFFORDABILITY RESTRICTIONS [behind this page] FORM OF AMENDED NOTICE OF AFFORDABILITY RESTRICTIONS ON TRANSFER OF PROPERTY Recording Requested by and When Recorded Return to: City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attention: City Clerk SPACE ABOVE THIS LINE FOR RECORDER'S USE GOVERNMENT BUSINESS Free Recording Requested (Govt. Code §27383) AMENDED NOTICE OF AFFORDABILITY RESTRICTIONS ON TRANSFER OF PROPERTY NOTICE IS HEREBY GIVEN that pursuant to Health & Safety Code Section 33334.3(f), the CITY OF HUNTINGTON BEACH, a municipal corporation (the "City") is recording this Notice of Affordability Restrictions on Transfer of Property (hereinafter the "Notice") with regard to the property located at 1841 Patterson Lane, Unit No. , Huntington Beach, California 92646, and more particularly described in Exhibit "A" attached hereto (the "Property"). The Property is subject to that certain Addendum to Grant Deed from Developer to Purchaser executed by City and ("the "Owner"), dated , 2012 (the "Addendum") attached to that certain Grant Deed executed by Habitat of Humanity of Orange County, a California nonprofit public benefit corporation (the "Habitat") (as Grantor) and Owner (as Grantee) dated and recorded concurrently herewith in the Official Records of the County Recorder's Office of Orange County (the "Official Records"), and that certain Notice of Restrictions and Option to Purchase Dwelling Unit executed by City an Owner and Habitat dated (the "City Restrictions") also recorded concurrently herewith in the Official Records, which restrict the use of Page 1 K:\CG\HB\Patterson at Huntington Condos(Habitat of Orange)\Notice of Restrictions (4).doc the Property as follows (any capitalized term not defined herein shall have the meaning ascribed to in the City Restrictions): 1. One (1) three -bedroom unit shall be owned and occupied exclusively by a Very Low Income Household at an Affordable Purchase Price, in accordance with and as more particularly described in the City Restrictions and the Addendum. [or One (1) four -bedroom unit shall be owned and occupied exclusively by a Low Income Household at an Affordable Purchase Price, in accordance with and as more particularly described in the City Restrictions and the Addendum.] 2. Owner shall occupy the Property as his or her or their primary residence, and the Property shall be used as the principal residence of Owner and Owner's household and for no other purpose. The Property shall not be leased or rented by Owner to any person or entity. The maximum occupancy of the Property _shall not exceed the maximum occupancy allowed by the Uniform Housing Code. 3. For purposes of the City Restrictions and the Addendum, the following capitalized terms shall have the following meanings: a. "Affordable Purchase Price" shall mean a purchase price for the Dwelling Unit that does not exceed an Affordable Housing Cost. b. "Affordable Housing Cost [Low Inc_ome]" shall mean as to the initial sale of a Dwelling Unit and any sale of a Dwelling Unit during the first fifteen years of the Affordability Period the lesser of, (i) monthly housing payments as defined by section 6920 of Title 25 of the California Code of Regulations, including payments for principal, interest, mortgage loan insurance fees, property taxes and assessments, fire and casualty insurance, a reasonable utility allowance (unless precluded by Federal requirements) and homeowner association fees, if any, which do not exceed the maximum housing cost allowed for Low Income Households in accordance with Section 50052.5 of the California Health and Safety Code, as Page 2 K:\CG\HB\Patterson at Huntington Condos(Habitat of Orange)\Notice of Restrictions (4).doc may be amended from time to time, and (ii) a purchase price for the type of single family housing that does not exceed 95 percent of the median purchase price for the area pursuant to § 92.254 a. 2. ii. and iii. of the HOME Regulations as such now exists and as may hereafter be amended. Commencing on the sixteenth year of the Affordability Period, the term "Affordable Housing Cost" shall only have the meaning set forth in clause (i) of the preceding sentence. C. "Affordable Housing Cost [Very Low Income]" shall mean as to the initial sale of a Dwelling Unit and any sale of a Dwelling Unit during the first fifteen years of the Affordability Period the lesser of, (i) monthly housing payments as defined by section 6920 of title 25 of the California Code of Regulations, including payments for principal, interest, mortgage loan insurance fees, property taxes and assessments, fire and casualty insurance, a reasonable utility allowance (unless precluded by Federal requirements) and homeowner association fees, if any, which do not exceed the maximum housing cost allowed for Very Low Income Households in accordance with Section 50052.5 of the California Health and Safety Code, as may be amended from time to time, and (ii) a purchase price for the type of single family housing that does not exceed 95 percent of the median purchase price for an area pursuant to § 92.254 a. 2. ii. and iii. of the HOME Regulations as such now exists and as may hereafter be amended. Commencing on the sixteenth year of the Affordability Period, the term "Affordable Housing Cost" shall only have the meaning set forth in clause (i) of the preceding sentence. d. "Low Income Household" shall mean the more restrictive of the following, (i) a Household whose gross income does not exceed the maximum qualifying income for a "lower income household" as defined in Section 50079.5 of Health and Safety Code, and (ii) a Household whose annual gross income does not exceed the maximum Page 3. K:\CG\HB\Patterson at Huntington Condos(Habitat of Orange)\Notice of Restrictions (4).doc qualifying income for "Low-income families" as defined in 24 Code of Federal Regulations (CFR) Part 92, Section 92.2. "Gross income" shall be determined in accordance with Section 6914 of Title 25 of the California Code of Regulations and 24 CFR Part 92, Section 92.203 (b)(2). e. "Very Low Income Household" shall mean the more restrictive of the following, (i) a Household whose gross income does not exceed the maximum qualifying income for a "very low income household" as defined in Section 50105 of Health and Safety Code, and (ii) a Household whose annual gross income does not exceed the maximum qualifying income for "Very low-income families" as defined in 24 Code of Federal Regulations (CFR) Part 92, Section 92.2. "Gross income" shall be determined in accordance with Section 6914 of Title 25 of the California Code of Regulations and 24 CFR Part 92, Section 92.203 (b)(2). The affordability restrictions imposed on the Property by the Addendum and the City Restrictions are scheduled to expire on the date that is sixty (60) years after the City issues a permanent certificate of occupancy for the Property. This Notice is recorded for the purpose of providing notice only and it in no way modifies the provisions of the Addendum or the City Restrictions. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] [SIGNATURES ON FOLLOWING PAGE] Page 4 K:\CG\HB\Patterson at Huntington Condos(Habitat of Orange)\Notice of Restrictions (4).doc CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California City Manager INITIATED AND APPROVED: Director of Economic Development APPROVED AS TO FORM: City Attorney KANE, BALLMER & BERKMAN Special Counsel Jhaila R. Brown Page 1 K:\CG\HB\Patterson at Huntington Condos(Habitat of Orange)\Notice of Restrictions (4).doc STATE OF CALIFORNIA ) COUNTY OF ) On before me, , a Notary Public, personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) 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. Signature (Seal) Page 1 K:\CG\HB\Patterson at Huntington Condos(Habitat of Orange)\Notice of Restrictions (4).doc Exhibit A LEGAL DESCRIPTION [behind this page] Page 1 K:\CG\HB\Patterson at Huntington Condos(Habitat of Orange)\Notice of Restrictions (4).doc ATTACHMENT NO. 6 HOME PROGRAM REQUIREMENTS [behind this page] HOME PROGRAM REQUIREMENTS These HOME Program Requirements are attached as Exhibit L to that certain Affordable Housing Property Transfer Agreement between the City of Huntington Beach, a municipal corporation ("City") and Habitat. for Humanity of Orange County, Inc., a California non-profit public benefit corporation ("Habitat") dated as of September 6, 2011, as amended by that certain First Amendment to the Affordable Housing Property Transfer Agreement dated February 6, 2012 and that certain Implementation Agreement to the Affordable Housing Property Transfer Agreement dated , 2012 (collectively the "Affordable Housing Agreement" or "Agreement"). Any capitalized term not defined herein shall have the meaning ascribed to such term in the Affordable Housing Agreement. Habitat covenants and agrees for itself, its successors, its assigns and every successor in interest to the Property that Habitat, its successors and assigns shall comply with all applicable HOME Regulations, including, but not limited to the following: 1. Use of HOME Loan. 24 CFR 92.504(c) (3) (i) (Code of Federal Regulations). The HOME Loan shall be used exclusively for the payment of costs incurred in connection with the acquisition, development and construction of the Project (sometimes referred to herein as the "Project Activities") in accordance with the Affordable Housing Agreement. The development of the Property shall be accomplished within the time provided in the Schedule of Performance, which is attached to the Affordable Housing Agreement as Exhibit C. 2. Affordability. 24 CFR 92.254; 92.504(c) (3) (ii). a. The Project will be used exclusively as housing that is affordable to Very Low Income and Low Income Households. The Dwelling Units shall be designated as HOME units and restricted to Very Low Income and Low Income households pursuant to the Affordable Housing Agreement. b. The sale price of each Dwelling Unit shall be an Affordable Purchase Price (as defined in the Agreement). C. Failure to comply with the affordability requirements set forth in this Exhibit L or the Affordable Housing Agreement is an event of default under the terms of the HOME Loan. Pursuant to the promissory note by Habitat evidencing the HOME Loan dated February 15, 2012 (the "Promissory Note Evidencing HOME Funds"), subject to the right to cure, the HOME Loan Repayment amount will be due and payable immediately if the housing does not meet the affordability requirements of this Exhibit L, the Affordable Housing Agreement and that certain Declaration of Conditions, Covenants and Restrictions for Property (Resale Restrictions) (the "City Regulatory Agreement") executed by City and Habitat dated September 6, 2011 and recorded September 29, 2011 as Page 1 K:\CG\HB\Patterson at Huntington Condos(Habitat of Orange)\HOME PROGRAM REQUIREMENTS (2).doc Document No. 2011000483564 in the Official Records of the Recorder's Office of Orange County, including any amendments thereto (the "City Regulatory Agreement"). Project Requirements. 24 CFR 92 Subpart F (92.250 - 92.258, 92.504(c) (3) ij . Habitat shall comply with all applicable requirements set forth in Subpart F of the HOME Regulations, as provided elsewhere in this Exhibit L and the Affordable Housing Agreement and also including the following: a. Maximum Per -Unit Subsidy. 24 CFR 92.250. The amount of the HOME Loan does not exceed the per unit dollar limits established by HUD pursuant to section 221(d) (3) (ii) of the National Housing Act. b. Property Standards. 24 CFR 92.251. (i) The development of the Property shall comply with the City's building code and all other applicable local codes, rehabilitation standards, ordinances and zoning ordinances in effect at the time of project completion, and the Property shall be decent, safe and sanitary shall conform to the following codes that have been adopted by the City of Huntington Beach: Uniform Building Code (UBC) as adopted by the State of California (California Building Code [Title 24 Part 2], National Electrical Code (NEC), Uniform Plumbing Code (UPC), Uniform Mechanical Code (UMC) and California Energy Code (CEC). (ii) The Property shall comply with the accessibility requirements at 24 CFR Part 8, which implements Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794). C. Homeownership Requirements. 24 CFR 92.254. Habitat certifies that it will comply with all terms and provisions contained in 24 CFR 92.254. d. Faith -Based Activities. 24 CFR 92.257. Habitat certifies that it will comply with all terms and provisions contained in 24 CFR 92.257. Habitat further certifies that HOME Loan will not be used for the acquisition, construction or rehabilitation of structures to the extent that those structures are used for inherently religious activities. Habitat shall use the HOME Loan for the construction of structures only to the extent the structures are used for conducting eligible activities under 24 Code of Federal Regulations Part 92. 4. Property Standards. 24 CFR 92.504 (c) (3) (iv). a. Housing Quality Standards. Habitat shall maintain the housing in compliance with applicable property standards as required by §92.251. Page 2 K:\CG\HB\Patterson at Huntington Condos(Habitat of Orange)\HOME PROGRAM REQUIREMENTS (2).doc b. Lead -based Paint. The Project shall comply with the lead -based paint standards in §92.355. Housing assisted with the HOME Loan constitutes HUD - associated housing for the purpose of Lead -Based Paint Poisoning Prevention Act (42 U.S.C. Section 4821, et seg. and is, therefore, subject to 24 Code of Federal Regulations Part 35. Accordingly, and pursuant to Section 92.355 of the Regulations, Habitat hereby agrees to and shall be responsible for testing and abatement activities specified in the Lead -Based Paint Poisoning Prevention Act and the regulations set forth at 24 Code of Federal Regulations Part 25 with respect to the construction of the Property. 5. Records and Reports. 24 CFR 92.504(c) (3) (vi); 92.508; 92.61. To assist the City in meeting its recordkeeping and reporting requirements, Habitat shall prepare, maintain and submit to the City, as appropriate, the following records and reports: a. Records which demonstrate that the Property meets the property standard specified in 24 CFR 92.251 and the lead -based paint requirements of 24 CFR 92.355; b. Records which demonstrate that each family occupying the Property is income eligible in accordance with 24 CFR 92.203; C. Records which demonstrate that the Property meets the affordability and income targeting requirements of 24 CFR 92.254 for the Affordability Period. Records shall be kept for each purchaser of a Dwelling Unit; d. Equal opportunity and fair housing records, including, as applicable: (a) data on the extent to which each racial and ethnic group and single - headed household (by gender of household head) have applied for, participated in, or benefited from, any program or activity funded in whole or in part with the HOME Loan; (b) documentation of actions undertaken to meet the requirements of 24 CFR Part 135 which implements section 3 of the Housing Development Act of 1968, as amended (12 U.S.C. 1701u); (c) documentation of the actions the City has taken to affirmatively further fair housing; (d) records demonstrating compliance with the lead -based paint requirements of 24 CFR 92.355; (e) if applicable, records which support any exceptions to the conflict of interest.prohibition pursuant to 24 CFR 92.356; (f) debarment and suspension certifications required by 24 CFR Parts 24 and 91. Page 3 K:\CG\BB\Patterson at Huntington Condos(Habitat of Orange)\HOME PROGRAM REQUIREMENTS (2).doc e. Habitat shall retain all books and records relevant to the Affordable Housing Agreement for a minimum of five years after the project completion date, except that records of individual household income verifications and project inspections shall be retained for the most recent five year period until five years after the Affordability Period terminates, or until the conclusion or resolution of any and all audits or litigation relevant to the Affordable Housing Agreement, whichever is later. The City, HUD and the Comptroller General of the United States, and any of their representatives, shall have the right of access to any pertinent books, documents, papers or other records of the Habitat, in order to make audits, examinations, excerpts and transcripts. f. Habitat shall retain at all times the documentation submitted pursuant to 24 CFR 92.203, which provided the basis for determining income eligibility. 6. Enforcement of the Agreement. 24 CFR 92.504(c) (3) W. The Affordable Housing Agreement and all of its attachments shall be enforceable by the City in accordance with the terms thereof. Each of the Affordable Housing Agreement, the City Regulatory Agreement, and the Promissory Note Evidencing HOME Funds provide a means of enforcement if Habitat is in breach of its obligations hereunder and thereunder, including liens on the Property, deed restrictions and covenants running with the land. Failure to comply with the requirements of this Exhibit, the Agreement or the City Regulatory Agreement is an event of default under the terms of the Promissory Note Evidencing HOME Funds. The City will have all remedies available to it in law and equity in the event of an uncured default under the terms of this Exhibit, the Agreement, the City Regulatory Agreement and the Promissory Note Evidencing HOME Funds. 7. Duration of Agreement. 24 CFR 92.504(c) (3) (ix). The Affordable Housing Agreement shall remain in effect for the Affordability Period. 8. Other Program Requirements. 24 CFR 92, Subpart H (92.350 - 92.358). Habitat shall comply with all applicable federal requirements set forth in Subpart H of the HOME regulations, including, but not limited to the following: a. Other Federal Requirements and Nondiscrimination. 24 CFR 92.350. Habitat acknowledges that 24 CFR 92.350 provides that the Federal requirements set forth in 24 CFR Part 5, subpart A, including all amendments to 24 CFR Part 5, subpart A, are applicable to participants in the HOME program, and that these Federal requirements include the following: Page 4 K:\CG\HB\Patterson at Huntington Condos(Habitat of Orange)\HOME PROGRAM REQUIREMENTS (2).doc (i) Nondiscrimination and Equal Opportunity. (1) Civil Rights Fair Housing and Age and Disability Discrimination Acts Assurances: During the performance of the Affordable Housing Agreement, Habitat assures that no otherwise qualified person shall be excluded from participation or employment, denied program benefits, or be subjected to discrimination based on race, color, national origin, sex, sexual orientation, gender identity, marital status, age, handicap, religion, or religious preference, under any program or activity funded by this Agreement, as required by the Fair Housing Act (42 U.S.C. 3601-19) and implementing regulations at 24 CFR part 100 et seq.; Executive Order 11063, as amended by Executive Order 12259 (3 CFR, 1959-1963 Comp., p. 652 and 3 CFR, 1980 Comp., p. 307) (Equal Opportunity in Housing Programs) and implementing regulations at 24 CFR part 107; title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d- 2000d-4) (Nondiscrimination in Federally Assisted Programs) and implementing regulations at 24 CFR part 1; the Age Discrimination Act of 1975 (42 U.S.C. 6101-6107) and implementing regulations at 24 CFR part 146; section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794) and implementing regulations at 24 CFR part 8;Title VI of the Civil Rights Act of 1964, the Fair Housing Act (42 U.S.C. 3601-20) and all implementing regulations, and the Age Discrimination Act of 1975, and all implementing regulations. (ii) , Disclosure Requirements. The disclosure requirements and prohibitions of 31 U.S.C. 1352 and implementing regulations at 24 CFR Part 87; and the requirements for funding competitions established by the Housing and Urban Development Reform Act of 1989 (42 U.S.C. 3531 et seq.). (iii) Debarred Suspended or Ineligible Contractors. The prohibitions at 24 CFR Part 24 on the use of debarred, suspended or ineligible contractors. (iv) Drug -free Workplace. The Drug -Free Workplace Act of 1988 (41 U.S.C. 701 et seq.) and HUD's implementing regulations at 24 CFR Part 24. b. Displacement Relocation and Acquisition. 24 CFR 92.353. Habitat shall cooperate with the City in connection with any project -specific relocation plan to be prepared by the City, and shall certify that, to the extent applicable, it will comply or has complied with the federal relocation, displacement and acquisition rules governing the HOME Program, which are contained in the Uniform Relocation Act, 49 CFR Part 24, and applicable program regulations. 24 CFR Section 92.353 requires that tenants who are displaced from housing units demolished or converted as a result of HOME -funded activities be provided with relocation assistance. C. Lead -based Paint. 24 CFR 92.355. The Property shall comply with the lead -based paint standards in §92.355, as provided in Section 6.b., above. Page 5 K:\CGM\Patterson at Huntington Condos(Habitat of Orange)\HOME PROGRAM REQUIREMENTS (2).doe d. Conflict of Interest. 24 CFR 92.356. (1) Interest of Employees, Officers and Officials. No employee, agent, consultant, officer or elected official or appointed official of the City, or employee, agent, consultant or officer of Habitat, and no other public official of the City who exercises any functions or responsibilities with respect to the activities assisted with HOME Loan or who are in a position to participate in a decision making process or gain inside information with regard to these activities, during their tenure and for one year thereafter, may obtain a financial interest or benefit from a HOME assisted activity or have an interest in any contract or subcontract, or agreement with respect thereto, or the proceeds thereunder, either for themselves or those with whom they have family or business ties. Habitat shall incorporate, or cause to be incorporated, in all such contractors or subcontracts a provision prohibiting such interest pursuant to the purposes of this Section. Fulfillment of "sweat equity" obligations as defined in Section 8201 of the HOME regulations shall not be considered a violation of this prohibition. (2) Prohibition Against Occupying HOME -Assisted Units. No officer, employee, agent, official or consultant of Habitat may occupy the. Property or any Dwelling Unit. e. Consultant Activities. 24 CFR 92.358. No person providing consultant services in an employer -employee type relationship shall receive more than a reasonable rate of compensation for personal services paid for with the HOME Loan. In no event, however, shall such compensation exceed the limits in effect under the provisions of any applicable statute (e.g., annual HUD appropriations acts which have set the limit at the equivalent of the daily rate paid for Level IV of the Executive Schedule). Such services shall be evidenced by written agreements between the parties which detail the responsibilities, standards and compensation. Consultant services provided under an independent contractor relationship are not subject to the compensation limitation of Level IV of the Executive Schedule. Page 6 K:\CG\BB\Patterson at Huntington Condos(Habitat of Orange)\HOME PROGRAM REQUIREMENTS (2).doc Council/Agency Meeting Held: gA �iaozA_ Deferred/Continued to: 1 Appr ved ❑ Conditionally Approved ❑ Denied C Clero Sign jre Council Meeting Date: February 6, 2012 DepartmvnID Number: ED 12-03 CITY OF HUNTINGTON BEAGH REQUEST FOR CITY COUNCIL ACTION SUBMITTED TO: Honorable Mayor and City Council Members SUBMITTED BY: Fred A. Wilson, City Manager PREPARED BY: Bob Hall, Deputy City Manager/Director of Economic Development SUBJECT: Approve and authorize execution of the First Amendment to the Affordable Housing Agreement between the City and Habitat for Humanity of Orange County, Inc. for property located at 18451 Patterson Lane Statement of Issue: The City Council is requested to approve this Amendment which will allow for the replacement of a moderate income dwelling unit with a low or very -low income dwelling unit at 18451 Patterson Lane. Financial Impact: Federal Home Funds (Business Unit Number 84900849) allocated in the amount of $194,396 Recommended Action: Motion to: A) Approve "First Amendment to the Affordable Housing Agreement Between the City of Huntington Beach and Habitat for Humanity of Orange County, Inc.;" and, B) Authorize the Mayor and City Clerk to execute the Amendment and any related documents; and, C) Authorize the City Manager or designee to take any action and execute any and all documents and agreements necessary to implement this Agreement. Alternative Action(s): Do not approve and direct staff accordingly. Item 5. - 1 HB -116- REQUEST FOR COUNCIL ACTION MEETING DATE: 2/6/2012 DEPARTMENT ID NUMBER: ED 12-03 Analysis: On September 6, 2011, the City Council approved an Affordable Housing Property Transfer Agreement between the City of Huntington Beach (City) and Habitat for Humanity of Orange County, Inc (Habitat). The agreement was entered to develop two (2) affordable housing dwelling units located at 18451 Patterson Lane under the following terms: • City owned land is transferred to Habitat • Habitat will construct two (2) low income dwelling units: o (1) Low/Very-low Income: 30-80% of Area Median Income (AMI) o (1) Moderate Income: 81-120% of Area Median Income (AMI) • Preference to Huntington Beach residents and Military or Veteran families • HOME funds committed to construction of units of $748,437 • Once homes are sold, HOME funds of $456,000 are repaid/reimbursed' • City's total financial contribution is $292,437 and the land After review of the amended HOME Regulations, dwelling units must be built for low or very - low income families. HOME funds cannot be used to subsidize moderate income dwelling units. Habitat agrees to amend the Affordable Housing Property Transfer Agreement to restrict the sale of the Dwelling Units to families who qualify as low and very -low income households. The City's total financial contribution to the affordable housing project is $486,833. Environmental Status: Categorically excluded under the National Environmental Protection Act (NEPA) and categorically exempt under the California Environmental Quality Act (CEQA). Strategic Plan Goal: Maintain financial viability and our reserves Attachment(s): HB -117- Item 5. - 2 ATTACHMENT #1 Item 5. - 3 HB -118- FIRST AMENDMENT TO THE AFFORDABLE HOUSING PROPERTY TRANSFER AGREEMENT THIS FIRST AMENDMENT TO THE AFFORDABLE HOUSING PROPERTY T�E AGREEMENT (the "First Amendment") is entered into on this 6 � day of wry, 20 2 (the "Effective Date") by and between the CITY OF HUNTINGTON BEACH, a municipal corporation (the "City") and HABITAT FOR HUMANITY OF ORANGE COUNTY, INC., a California non-profit public benefit corporation (the "Habitat"). The City and Habitat (collectively, the "Parties") hereby agree as follows: RECITALS A. WHEREAS, the City is responsible for administering the use of certain funds made available to it by the United States Department of Housing and Urban Development ("HUD") under the HOME Investment Partnerships Program (the "HOME Program") in accordance with the regulations issued by HUD and set forth in 24 Code of Federal Regulations ("CFR") Part 92 (the "HOME Regulations") for the purposes of strengthening public -private partnerships to provide decent, safe, sanitary, and affordable housing. B. WHEREAS, the City and Habitat entered into that certain Affordable Housing Property Transfer Agreement dated as of September 6, 2011 (the "Affordable Housing Agreement"), which provides, among other things, for (1) the City to convey to Habitat that certain real property known as 18451 Patterson Lane in the City of Huntington Beach, described in the legal description attached to the Affordable Housing Agreement as Exhibit A which is incorporated herein by this reference (the "Property"), (ii) the City to provide a loan to Habitat in the amount of $748,437 derived from the HOME Program (the "HOME Loan") to pay a portion of the Development costs for the Dwelling Units, (111) Habitat to develop on the Property two single family dwelling units to be sold to and occupied by moderate, low and very low income households at an Affordable Purchase Price (the "Project"). All capitalized terms not defined herein shall have the meaning ascribed to such term in the Affordable Housing Agreement. C. WHEREAS, the Property was originally acquired by the Redevelopment Agency of the City of Huntington Beach, a public body, corporate and politic (the "Agency"), using funds from the Low and Moderate Income Housing Fund, established and maintained by the Agency pursuant to California Health and Safety Code Section 33334.2 et seq. The City later acquired the Property from the Agency and conveyed it to Habitat. Since the Development of the Dwelling Units has been assisted with moneys from the Low and Moderate Income Housing Fund, the Property is subject to California Community Redevelopment Law (commencing with Section 33000 of the Health and Safety Code and hereinafter referred to as the "CRL"). D. WHEREAS, pursuant to Section 92.254 a. 3. of the HOME Regulations, the Dwelling Units must be acquired by homebuyers whose families qualify as low-income families and the housing must be the principal residence of the family. 1 K:ACG\HB\Patterson at Huntington Condos(Habitat of Orange)A1 st Amend (execution).doc E. WHEREAS, the Parties desire to amend the Affordable Housing Agreement to restrict the sale of the Dwelling Units to families who qualify as low and very low income households (under both the CRL and the HOME Regulations) and the housing must be the principal residence of each family throughout the Affordability Period ( as defined in the Affordable Housing Agreement). F. WHEREAS, pursuant to Section 201 of the Affordable Housing Agreement, Habitat is required to re -pay to the City a. portion of the HOME Loan (the "HOME Loan Repayment"). The Parties desire to evidence Habitat's obligation to pay the HOME Loan Repayment in the form of a promissory note in favor of the City. G. WHEREAS, the purpose of this First Amendment is to effectuate and amend the Affordable Housing Agreement by providing for (i) the execution by Habitat of a promissory note in favor of the City evidencing Habitat's obligation to pay the HOME Loan Repayment, (ii) modification of the affordability level of the Project to restrict the sale of the Dwelling Units to low and very low income households pursuant to the HOME Regulations, and (iii) modification of certain other obligations of the parties, all on the terms and conditions as set forth below. SECTION 1. AMENDMENTS TO THE AFFORDABLE HOUSING PROPERTY TRANSFER AGREEMENT For and in consideration of the mutual covenants and conditions set forth, the City and Habitat hereby agree as follows: 1. Low Income Household. Section 102 of the Agreement entitled Definitions is hereby amended to delete the definition of "Low Income Household" in its entirety and replace it with the following: "Low Income Household" means the more restrictive of the following, (i) a Household whose gross income does not exceed the maximum qualifying income for a "lower income household" as defined in Section 50079.5 of Health and Safety Code, and (ii) a Household whose annual gross income does not exceed the maximum qualifying income for "Low-income families" as defined in 24 Code of Federal Regulations (CFR) Part 92, Section 92.2. "Gross income" shall be determined in accordance with Section 6914 of Title 25 of the California Code of Regulations and 24 CFR Part 92, Section 92.203 (b)(2). 2. Very Low Income Household. Section 102 of the Agreement entitled Definitions is hereby amended to delete the definition of "Very Low Income Household" in its entirety and replace it with the following: 2 K:\CG\HB\Patterson at Huntington Condos(Habitat of 0range)\1 st Amend (execution).doc "Very Low Income" means the more restrictive of the following, (i) a Household whose gross income does not exceed the maximum qualifying income for a "very low income household" as defined in Section 50105 of Health and Safety Code, and (ii) a Household whose annual gross income does not exceed the maximum qualifying income for "Very low-income families" as defined in 24 Code of Federal Regulations (CFR) Part 92, Section 92.2. "Gross income" shall be determined in accordance with Section 6914 of Title 25 of the California Code of Regulations and 24 CFR Part 92, Section 92.203 (b)(2). 3. Sale of Dwelling Units Limited to Low and Very Low Income Households Only. Pursuant to Section 92.254 a. 3. of the HOME Regulations, the Dwelling Units must only be acquired by Low Income and Very Low Income Households. The City and Habitat hereby acknowledge and agree that the Affordable Housing Agreement, including, but not limited to its attachments, is hereby amended in its entirety to provide that the two Dwelling Units shall only be acquired by Low Income and Very Low Income Households and the housing must be the principal residence of the family throughout the Affordability Period. The Affordable Housing Agreement, including, but not limited to all of its attachments, is hereby further amended in its entirety as follows: a. To delete the definition of "Moderate Income Household" under Part I, Definitions, of the Affordable Housing Agreement. b. To delete all references to "Moderate Income Household" and "Moderate Income." 4. HOME Loan Repayment Obli atgion. Section 201 of the Affordable Housing Agreement is hereby amended as follows: a. Delete in its entirety the following phrase marked by bullet point number three, "The two homes are sold as the same time for $300,000 (120% AMI), and $156,000(50% AMI). Habitat will reimburse the City $456,000 from the sale price." b. Add the following phrase as bullet point number three, "The four (4) bedroom Dwelling Unit shall be sold to a Low Income Household at an Affordable Housing Cost and the three (3) bedroom Dwelling Unit shall be sold to a Very Low Income Household at an Affordable Housing Cost." 3 K:ACG\HB\Patterson at Huntington Condos(Habitat of 0range)\1 st Amend (execution).doc C. Add the following listed phrase as bullet point number four, "Habitat shall reimburse to the City a total of $261,604 in HOME loan funds. Habitat's obligation to re -pay to the City the amount of $261,604 shall be evidenced by that certain Promissory Note Evidencing HOME Funds attached hereto as Exhibit I and incorporated herein by this reference." 5. Promissory Note Evidencing HOME Funds. Pursuant to Section 201 of the Affordable Housing Agreement, as amended by this First Amendment, Habitat's obligation to re- pay a portion of the HOME Loan in the amount of $261,604 to the City shall be evidenced by that certain Promissory Note Evidencing HOME Funds attached hereto as Attachment No. 1 and incorporated herein by this reference (the "HOME Loan Re -Payment Note"). The Affordable Housing Agreement is hereby amended to add the HOME Loan Re -Payment Note as Exhibit I. Habitat shall execute and, deliver the HOME Loan Re -Payment Note to the City no later than one (1) day after this First Amendment is approved by the City Council of the City of Huntington Beach (the "City Council"). SECTION 2. MISCELLANEOUS 1. Further Changes. The City Manager or designee is authorized to make such further changes to the documents and instruments attached to the Affordable Housing Agreement and this First Amendment as may be necessary or appropriate to effectuate the Affordable Housing Agreement, as amended by this First Amendment, provided the HOME Loan is not increased or subordinated in greater proportion without City Council written approval. 2. Further Instruments. The City Manager or designee is authorized to execute such further instruments required by the Affordable Housing Agreement, including but not limited to estoppel certificates and other closing documents, as may be necessary or appropriate to effectuate and implement the Affordable Housing Agreement, as amended by this First Amendment. 3. Further Cooperation. The Parties agree to execute such other instruments, agreements, and amendments to documents as may be necessary or appropriate to effectuate the Affordable Housing Agreement as amended by this First Amendment. 4. Effectiveness of Affordable Housing Agreement. Except as expressly provided otherwise in this First Amendment, the Affordable Housing Agreement remains in full force and effect enforceable in accordance with its terms. 5. Interpretation. This First Amendment shall be executed in three duplicate originals, each of which is deemed to be an original. This First Amendment, when combined with the Affordable Housing Agreement, constitutes the entire understanding and agreement of the parties and correctly sets forth the rights, duties and obligations of each to the other as of its date. 4 K:ACG\HB\Patterson at Huntington Condos(Habitat of 0range)\1st Amend (execution).doc 6. Waivers: Amendments. All waivers of the provisions of this First Amendment and all amendments hereto must be in writing and signed by the appropriate authorities of the City and Habitat. 7. Time of the Essence. Time is of the essence with respect to this First Amendment. 8. Effective Date. This .First Amendment shall be dated and become effective on the date set forth above. 9. Authority to Execute. Habitat hereby represents that the persons executing this First Amendment on behalf of Habitat have full authority to do so and to bind Habitat to perform pursuant to the terms and conditions of this First Amendment. [SIGNATURES ON FOLLOWING PAGE] 5 K:\CG\HB\Patterson at Huntington Condos(Habitat of Orange)\t st Amend (execution).doc IN WITNESS WHEREOF, the City and Habitat have executed this First Amendment to the Affordable Housing Property Transfer Agreement as of the date set opposite their signatures. CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California Mayor . .......... `C Dated ty Clerk AND APPROVED: Director df Economic Development REVIE D APPROVED: �/CftVXI,rager APPROVED AS TO FORM: Cit Attorney 1� I KANE, BALLMER & BERKMAN Special Counsel (24.x /-�' IA"" Jhaila R. Brown [SIGNATURES CONTINUED ON FOLLOWING PAGE] 6 K:\CG\HB\Patterson at Huntington Condos(Habitat of Orange)\1st Amend (execution).doc Dated: f1 c � HABITAT FOR IIUMANITY OF ORANGE COUNTY, INC., a California non-profit public benefit corporation Name: _15h epe,, f d Its: By: Name: Its: S�. �� C� ���5pF,✓r ATTACHMENT NO. 1 FORM OF PROMISSORY NOTE EVIDENCING HOME FUNDS (behind this page) FORM OF PROMISSORY NOTE EVIDENCING HOME FUNDS 0% Interest $261,604.00 _ VS ,2012 Huntington Beach, California FOR VALUE RECEIVED, the undersigned HABITAT FOR HUMANITY OF ORANGE COUNTY, INC., a California non-profit public benefit corporation ("Borrower") promises to pay to the CITY OF HUNTINGTON BEACH, a municipal corporation (the "City") at 2000 Main Street, Huntington Beach, California 92648 Attention: Director of Economic Development, or at such other address as the City may direct from time -to -time in writing, the principal sum of TWO HUNDRED SIXTY ONE THOUSAND SIX HUNDRED AND FOUR DOLLARS AND NO CENTS ($261,604.00) (the "Note Amount"), as provided in this Promissory Note Evidencing HOME Funds (the "Note"). All sums hereunder shall be payable in lawful money of the United States of America. 1. Affordable Housing Property Transfer Agreement. This Note is made and delivered in implementation of that certain Affordable Housing Property Transfer Agreement entered into by and between the City and Borrower dated September 6, 2011, as amended by that certain First Amendment to the Affordable Housing Property Transfer Agreement dated Jwrdery f , 2012 (collectively the "Agreement") copies of which are on file as public records with the City and are all incorporated herein by reference. The Agreement provides, among other things, for a loan of HOME Funds (as defined below) from City to Borrower to pay Development costs for the Dwelling Units. The term "HOME Funds" as used herein shall mean funds in the amount of $748,437 made available to the City by the United States Department of Housing and Urban Development under the HOME Investment Partnerships Program (the "HOME Funds"). Pursuant to the Agreement, Borrower is required to repay to the City a portion of the HOME Funds in the Note Amount and at the time set forth herein. Any capitalized term not defined herein shall have the meaning ascribed to such term in the Agreement. In connection with the Agreement, the parties hereto executed that certain Declaration of Conditions, Covenants and Restrictions for Property (Resale Restrictions) dated September 29, 2011 and recorded September 29, 2011 as Document No. 2011000483564 in the Official Records of the Recorder's Office of Orange County (the " City Regulatory Agreement"). The Agreement, the City Regulatory Agreement and this Note shall be collectively referred to herein as the "City Documents." 2. Interest Rate. Except in the Event of a Default hereunder, the entire principal amount of this Promissory Note Evidencing Home Funds shall not bear any interest. Default Interest, if any, shall be payable as provided in Section 4, below. 3. Payment bates. The entire principal amount of the indebtedness evidenced by this Note, with interest, shall be all due and payable to the City by Borrower upon the earlier of (i) one (1) year from the date of this Note set forth above and (ii) the date the close of escrow occurs for the sale of the Dwelling Unit constructed during Phase II to a Qualified Purchaser (the "Maturity Date"). The terns Qualified Purchaser used herein shall mean a homebuyer whose family qualifies as a Low Income Household or a Very Low Income Household (as each term is defined in the Agreement) and the housing must be the principal residence of the family throughout the Affordability Period. 4. Applications of Payments; Late Charges. (1) All payments to the City shall be applied first to accrued interest, then to reduce the principal amount owed. (2) If any payment of interest and/or principal is not received by the City on the due date thereof, then in addition to the remedies conferred upon the City pursuant to Section 6 hereof and the other City Documents, a late charge of four percent (4%) of the amount due and unpaid will be added to the delinquent amount to compensate the City for the expense of handling the delinquency. 5. Term of Note. The term of this Note shall commence on the date first stated above and shall terminate upon the Maturity Date. 6. Acceleration. Subject to the notice and cure periods set forth in Section 9 below, the principal amount of this Note shall become immediately due and payable upon the occurrence of any one of the following events prior to the Maturity Date ("Event of Default"): (a) Failure to make a payment as set forth in Section 3 above; (b) The sale, transfer, assignment or other conveyance of the Property, any portion thereof or interest therein, except for a sale of the Dwelling Units to Qualified Purchasers, unless approved in writing by City; or (c) An uncured default in performance or breach by Borrower of any provision of the Agreement, City Regulatory Agreement, or this Note. The City may, in its sole and absolute discretion, waive these requirements and/or defer repayment and/or extend the term of this Note. Any such waiver, deferment or extension must be in writing and signed by the City. Amounts declared due and payable under this Note shall thereafter bear interest at the "Default Interest Rate" (as hereinafter defined) until the Event of Default is cured. For purposes of this Note, the "Default Interest Rate" shall be the higher of (i) the interest rate payable hereunder, or (ii) a per annum percentage rate which is five (5) percentage points above the rate 2 on the twenty-fifth (25th) day of the month preceding the date of such Event of Default established by the Federal Reserve Bank of San Francisco on advances to member banks under Sections 13 and 13a of the Federal Reserve Act as now in effect or hereafter from time to time amended. Notwithstanding the foregoing or any other provision of this Note, in no event shall the Default Interest Rate or any other rate of interest under this Note exceed the maximum rate permitted by law; and if such rate of interest, computed in the amount provided for in this Note, should exceed said maximum legal rate, then the rate of interest shall be automatically reduced to such maximum legal rate. The imposition of the Default Interest Rate shall be in addition to and not in lieu of any other rights and remedies provided for by law. The remedies of a holder of this Note as provided herein shall be cumulative and concurrent and may be pursued singularly, successively or together, at the sole discretion of the holder, and may be exercised as often as occasion therefor may arise under the terms of such documents. 7. Prepayment. The Note may be prepaid in whole or in part at any time without a prepayment penalty. 8. Nondiscrimination. There shall be no discrimination against or segregation of any person, or group of persons, on account of race, color, creed, religion, sex, sexual orientation, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property nor shall Borrower 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 of the Property. 9. Defaults. The City (the "Complaining Party") shall give written notice of an Event of Default to the Borrower specifying in reasonable detail the matter constituting the default. If a monetary Event of Default occurs, Borrower shall have a period of ten (10) calendar days after such notice is received or deemed received within which to cure the default prior to the City exercising its remedies. If a non -monetary Event of Default occurs, Borrower shall have thirty (30) calendar days following receipt of notice to cure the default. Except as required to protect against further damages, the Complaining Party shall not institute proceedings against the Borrower unless the matter is not cured within such thirty (30) calendar day period, or, if the default is of a nature requiring more than thirty (30) calendar days to cure, the Borrower commences to cure the matter within such thirty (30) calendar day period and diligently pursues such cure to completion within a reasonable time, but in no event more than ninety (90) days after notice of default. Failure or delay in giving such notice shall not constitute a waiver of any default, nor shall it change the time of default. Failure to cure the default within the applicable cure period shall entitle the Complaining Party to accelerate payment under this Note, and/or exercise any other remedies available to such party. 10. Non -Waiver. Failure to exercise or delay in exercising any light the City may have or be entitled to, in an Event of Default hereunder, shall not constitute a waiver of such right or any other right in the event of a subsequent default. 11. Borrower's Waivers. Borrower hereby waives diligence, presentment, protest and demand, notice of protest, dishonor and nonpayment of this Note, and expressly agrees that, without in any way affecting the liability of Borrower hereunder, the City may extend any maturity date or the time for payment of any installment due hereunder, accept additional security, release any party liable hereunder and release any security now or hereafter securing this Note. Borrower further waives, to the full extent permitted by law, the right to plead any and all statutes of limitations as a defense to any demand on this Note, or on any deed of trust, security agreement, guaranty or other agreement now or hereafter securing this Note. 12. Governing Law. This Note shall be governed and interpreted by the internal laws of the State of California. 13. Severability. In the event that any provision or clause of this Note conflicts with applicable law, such conflict will not affect other provisions of this Note which can be given effect without the conflicting provision, and to this end the provisions of the Note are declared to be severable. 14. Amendment of Note. No modification, rescission, waiver, release or amendment of any provision of this Note shall be made except by a written agreement executed by Borrower and the duly authorized representative of the City. 15. Assignment by City Permitted. The City may, in its sole and absolute discretion, assign its rights under this Note and/or its right to receive repayment of the Note Amount without obtaining the consent of Borrower. 16. Assignment by Borrower Prohibited. In no event shall Borrower assign or transfer any portion of this Note or any rights herein without the prior express written consent of the City, which consent the City may give or withhold in its sole and absolute discretion. This provision shall not affect or diminish the City's right to assign all or any portion of its rights under this Note or to the proceeds of the Note Amount hereunder. 17. Junior Liens. Borrower shall not encumber the Property for the purpose of securing financing either senior or junior in priority or subordinated to this Note without either (i) payment in full of the amounts due hereunder or (ii) the prior written approval of the City in its sole and absolute discretion. 18. Relationship of Borrower and City. The relationship of Borrower and City pursuant to this Note is that of debtor and creditor and shall not be, or be construed to be a joint venture, equity venture, partnership or other relationship. 19. Notices. (a) Except as otherwise expressly provided in this Note, in every case when, under the provisions of this Note, it shall be necessary or desirable for one party to serve any notice, request, demand, report or other communication on another party, the same shall be in writing and shall not be effective for any purpose unless served (i) personally, (ii) by independent, reputable, overnight commercial courier, or (iii) by deposit in the United States mail, postage and fees fully prepaid, registered or certified mail, with return receipt requested, addressed as follows; To Borrower: Habitat for Humanity of Orange County 2200 S. Ritchey Street Santa Ana, California 92705 Attention: CEO/Executive Director With a copy to: Jackson Demarco Tidus Peckenpaugh 2030 Main Street Irvine, California 92614 Attention: Ron DeFelice To City: City of Huntington Beach 2000 Main Street Huntington Beach, California 92648 Attention: Director of Economic Development With a copy to: Office of the City Attorney City of Huntington Beach 2000 Main Street Huntington Beach, California 92648 Attention: City Attorney 20. Attorneys' Fees. In the event that any action is instituted to enforce payment or performance under this Note, or otherwise in connection with this Note, the parties agree that the prevailing party shall be reimbursed by the other party for all costs and all attorneys' fees incurred by the prevailing party in such action. hi addition, Borrower agrees to reimburse the City for reasonable costs of collection, costs, and expenses, and attorneys' fees paid or incurred in connection with the collection or enforcement of this Note, whether or not suit is filed. 21. Captions. The captions and headings in this Note are for convenience only and are not to be used to interpret or define the provisions hereof 22. Joint and Several Liability. The undersigned, if more than one, shall be jointly and severally liable hereunder. [Remainder of page intentionally blank] [Signatures on following page] 23. Successors Bound. This Note shall be binding upon the parties hereto and their respective heirs, successors and assigns. "BORROWRR" HABITAT FOR HUMANITY OF ORANGE COUNTY, INC., a California non-profit public benefit corporation By:✓�i�% [� Name: E LL�� Its: /0 By: Name: '&ffl4R/pa Its: SR, V. A 31 MD IR KANE, BALLMER & BERKMAN A LAW CORPORATION WWW.KBBLAW.COM 515 S. FIGUEROA STREET 402 WEST BROADWAY SUITE 1850 BRUCE E). BALLMER 4TH FLOOR LOS ANGELES, CALIFORNIA 90071 (RETIRED) SAN DIEGO, CALIFORNIA 92101 TELEPHONE (213) 617-0480 TELEPHONE (619) 567-3450 FAX (213) 625-0931 ROBERT P. BERKMAN FAX (619) 567-3448 (1919-2001) Writer: Jhaila Brown January 13, 2012 jhaila@kbblaw.com Direct (213) 452-0122 Los Angeles Office File No. 157-001 Via Overnight Express Luis Gomez, MBA, PE Economic Development Project Manager City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 RE: Proposed First Amendment to the Affordable Housing Property Transfer Agreement between the City of Huntington Beach and Habitat for Humanity of Orange County, Inc. Dear Luis: Regarding the referenced agreement, enclosed please find three (3) original signature pages executed by me. If you have any questions or comments, please do not hesitate to contact our office. Very truly yours, KANE, BALLMER & BERKMAN /Jil4arown Encl. A',,awWrsTide� Lawyers Title Company ift 4100 Newport Place Dr, Suite 120 w Newport Beach, CA 92660 Phone: (949) 724-3140 Fax: (949) 724-3173 December 12, 2011 CITY OF HUNTINGTON BEACH Attn. City Clerk 0 Main Street Huntington Beach, CA 92648 RE: Escrow No: 09270185-916-GKB Property: 18451 Patterson Lane, Huntington Beach, CA The above referenced escrow closed on 09/29/2011. The following items enclosed for you and your records. • Recorded Original Option Agreement for Unit 1 and Unit 2 It has been a pleasure handling this transaction for you. Please do not hesitate to contact our office if you have any questions regarding your escrow file. Should your future needs require the services of a Title or Escrow Company, we hope that you will again choose Lawyers Title Company. Sincerely, GraceZ m Commercial Escrow cer Phone:(949) 724-3141 Fax: (714) 459-7217 e-mail: gukim@ltic.com Enclosure(s) W his Document was electronica� recorded b Lawyers —Title Newport Beach RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO:. Recorded in Official Records, Oran e County om Dal ,Clerk-Recorde FEE City of Huntington Beach) 2011000647507 02:05pm 12/12/11 2000 Main Street ) 6 422 Al2 8 Huntington Beach, CA 92648 ) .00 0.00 0.00 0:00`21.00 0.00 OAO 0.00 Attn: City Clerk ) SPACE ABOVE FOR RECORDER'S USE] 4l "� Fee exempt pursuant to Government Code §27383 OPTION AGREEMENT (Unit 1) This Option Agreement is made as of December 07 2011 at Huntington Beach, California, by the CITY OF 'HUNTINGTON BEACH, a municipal corporation of the State of - California ("City") "Optionee," and HABITAT FOR HUMANITY OF ORANGE COUNTY, INC., a California non-profit public_ benefit corporation ("Habitat") referred to in this Agreement as "Optionor." Recitals WHEREAS, Habitat is the owner of certain real property known as 18451 Patterson Lane, Unit 101, Huntington Beach, California, referred to in this Agreement as "the Property," and more particularly described on Exhibit A attached hereto; And WHEREAS, Optionee is acquainted with the Property and desires to acquire from Habitat the exclusive right to repurchase, without being obligated to repurchase, the Property at the price and on the terms and conditions provided for in this Agreement; - NOW, THEREFORE, it.is agreed as follows: Grant of Option 1. For and in consideration of the amounts contributed by the City as set forth in the Affordable Housing Property Transfer Agreement paid ,by Optionee to Habitat, receipt of which is hereby acknowledged by'Habitat, Habitat hereby grants to Optionee the exclusive right to repurchase the Property before the property can be sold for fair market value to a subsequent purchaser pursuant to the terms and conditions of that certain Affordable Housing property Transfer Agreement that is attached to this Agreement as Exhibit.B and hereby incorporated by - reference. This Opt ion shall, be subordinate to any option or right of first refusal granted to Humanity Housing, Inc.,, aCalifornia non-profit public benefit corporation. Exercise of Option 2. In the event that Optionee desires to exercise this option, Optionee must do so by delivering signed, written notice to Habitat on or before the expiration of this option, of the election of Optionee to exercise this option. The notice must be accompanied by Escrow 1 07-1368.001/ 2056-99886\1070078.2 12/1/11 Instructions executed by Optionee as Buyer. On exercise by Optionee in the manner set forth above, Habitat must promptly execute the Escrow Instructions and deposit them with the Escrow Holder. Binding Effect 3. This Agreement will bind and inure to the benefit of the respective heirs, personal representatives, successors, and assigns of the parties to this Agreement. Execution IN WITNESS WHEREOF, the parties to this Agreement have executed this Option Agreement on the date above written. Habitat Optionee HABITAT FOR HUMANITY OF ORANGE CITY OF HUNTINGTON COUNTY, INC., a California non-profit public benefit corporation Mayor , BY: [SIGNATURE] Name: Title: 7>k4E�:5 %E O [PPJNT NAME] DATEeZ L C [SIGNATURE] Name: /Addle j,4wtZ4&2> a Title: .54'R® V. P [PRINT NAME] DATE / Z — 6 % / 07-1368.001/ Development City Manager APPROVED AS TO FORM: F— City Attorney MAIL TAX STATEMENTS TO: City Clerk City of Huntington Beach P.O. Box 190 / 2000 Main Street Huntington Beach, CA 92648 1 2056-99886\1070078.2 12/1/11 Exhibit A Legal Description That certain real property located in the City of Huntington Beach, County of Orange, State of California, described as follows: PARCELI: Unit 1 (the "Unit"), as shown and described in the Condominium Plan for Patterson at Huntington Condominiums (together with any amendments thereto, collectively, the "Plan") covering Parcel 1 of Parcel Map No. 2011-104, as such Parcel is shown on the Parcel Map ("Map"), filed in Book 372, at Pages 31-33 of Parcel Maps, in the Office of the Orange County Recorder, recorded on November 2, 2011, as Instrument No. 2011000553373 in the Official Records of Orange County, California ("Official Records"), which Plan was recorded in the Official Records on November 18, 2011, as Instrument No. 2011000588862, together with an undivided One -Half (1/2) interest as tenant -in -common in the Common Area as shown and described in the Condominium Plan and exclusive easements as are shown as appurtenant to the Unit. PARCEL 2: An undivided one-half (1/2) fee simple interest as a tenant in common in and to the Common Area described in the Plan. PARCEL 3 Exclusive easements for the benefit of the Unit appurtenant to Parcel No. 1 and Parcel No. 2, described above, for porch and yard purposes, over those portions of the Common Area as shown numbered and assigned on the Plan or as described in the Declaration, and internal and external telephone wiring, as installed by Grantor. PARCEL 4: Nonexclusive easements for access, drainage, encroachment, maintenance, repair, and for other purposes, all as may be shown on the Plan and the Map, and as described in the Declaration of Covenants, Conditions and Restrictions and Reservation of Easements for Patterson at Huntington Condominiums, recorded on November 18, 2011 as Instrument No. 2011000588863, in Official Records (together with any amendments thereto, collectively, the "Declaration"). 07-1368.001/ 2056-99886\ 1070078.2 12/1/11 CALIFORNIA ALL-PURPOSE ACKNOWLEI State of California ) ) ss. County of Or-6 LM,6 ) On DCCi✓ M (30 P,_ L 20 L ( , before me, Rita A. Ross, a Notary Public, personally (Here insert the name and title of the officer) appeared Si, tA�IRDIQ I LLiSI<GP_AIyDO who proved to me on the basis of satisfactory evidence to be the person(s) whose names mare subscribed to the within instrument and acknowledged to me that h/they executed the same in h/their authorized capacity(ies), and that by her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) 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. yi8"6 A A. ROSS Witness my hand and off' is seal.""" '' Commission # 1929080 Notary Public - California i Z �' Orange County r My Comm. Expires Apr 15, 2015. ture [Seal] Attached to Option Agreement (Unit 1), between the City of Huntington Beach and Habitat for Humanity of Orange County, Inc. Executed by Sharon Ellis and Mark Korando of Habitat for Humanity of Orange County, Inc. on December 6, 2011 ACKNOWLEDGMENT STATE OF CALIFORNIA ) ) ss COUNTY OF ORANGE ) On December 7, 2011 before me, P. L. Esparza, Notary Public, personally appeared Donald F. Hansen, Jr., 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. P. L. ESPARZA WITNESS my hand and official seal.Commission # 1857021 irQA Notary Public - California iZOrange County D MY Comm. Expires Au2 4, 2013 (Seal) (Notary Sig ture) ACKNOWLEDGMENT STATE OF CALIFORNIA ) ss COUNTY OF ORANGE ) On December 8, 2011 before me, P. L. Esparza, Notary Public, personally appeared Joan L. Flynn, 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 she executed the same in her authorized capacity, and that by 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. PSPARZA WITNESS my hand and official seal. Commission # 1857021 Notary Public - California Z x Orange County ' M Comm. Ex Tres Au 4, 2013 (Seal) (Not ig ture) ACKNOWLEDGMENT STATE OF CALIFORNIA ss COUNTY OF ORANGE On December 7, 2011, before me, P. L. Esparzca, Notary Public, personally appeared Fred A. Wilson 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. 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. (Notary Signatur P. L. ESPARZA Commission # 1857021 Z .'� Notary Public - California Z Z '' Orange County My Comm. Expires Aug 4, 2013 t (Seal) ACKNOWLEDGMENTCALIFORNIA ALL-PURPOSE �5.: ac oaf T-A .av!T3 •�. � ,?�> +aa,�. sa> �a¢.•�a.,�tti��.•a � A .•��a,..a 7c T. �> �. ��. �> � � yaS�' ,ya .»ca ,_ � ... � as State of California County of [tJ(s3G On��• Date' personally appeared before me, P L. ESPARZA '' Commission # 1857021 z Notary Public - California Z Z Orange County Z D My Comm. Expires Aug 4, 2013 Here Insert Name and Title of the C of who proved to me on the basis of satisfactory evidence to be the person* whose namea*a subscribed to the within instrument and acknowledged to me that he sfey executed the same in(0herftheir authorized capacity(K), and that by<j?he#th& signature(son the instrument the person(, or the entity upon behalf of which the personks) 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. WITNESSVMY In nd ficial s I. Signature Place Notary Seal Above Signa e 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: Signer(s) Other Than Named Above: Capacity(ies) Claimed by Signer(s) Signer's Name: ❑ Individual ❑ Corporate Officer — Title(s): ❑ Partner — ❑ Limited ❑ General ❑ Attorney in Fact • ❑ Trustee Top of thumb here ❑ Guardian or Conservator ❑ Other: Signer Is Representing: Number of Pages: Signer's Name: ❑ Individual ❑ Corporate Officer — Title(s): ❑ Partner — ❑ Limited ❑ General ❑ Attorney in Fact ❑ Trustee ❑ Guardian or Conservator ❑ Other: Signer Is Representing: RIGHTTHUMBPRINT OF SIGNER .0 ' 02007 National Notary Association - 9350 De Soto Ave., P.O. Box 2402 • Chatsworth, CA 91313-2402 • www.NationalNotaryorg Item #5907 Reorder: Call Toll -Free 1-800-876-6827 his Document was electronicall recorded b Lawyers Title Newport Beach Recorded in Official Records, Orange Count j _o RECORDING REQUESTED BY TornDaly, Clerk-Recorde AND WHEN RECORDED MAIL TO:. ) City of Huntington Beach ) 2011000647508 02:05prn 12/12/11 2000 Main Street ) 66 422 Al2 8 Huntington Beach, CA 92648 ). ;0.00 0.00 0.00 0.00 21.00 0.00 0.00 0.00-1 Attn: City Clerk - ) 01 SPACE ABOVE FOR RECORDER'S USE] 1 - Fee exempt pursuant to _Government Code §27383 OPTION AGREEMENT (Unit 2) This Option Agreement is made as of December 07 2011 at Huntington Beach, California, by the CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California ("City") "Optionee," and HABITAT FOR HUMANITY OF ORANGE COUNTY, INC., a California non-profit public benefit corporation ("Habitat") referred to in this Agreement as "Optionor." Recitals WHEREAS, Habitat is the owner of certain real property known as 18451 Patterson Lane, Unit 102, Huntington Beach, California, referred to in this Agreement as "the Property," and more particularly described. on Exhibit A attached hereto; And WHEREAS, Optionee is acquainted with the. Property and desires to acquire from Habitat the exclusive right to repurchase, without being obligated to repurchase, the Property at the price and on the terms and conditions provided for in this Agreement; NOW, THEREFORE, it is agreed as follows: Grant of Option 1. For and in consideration of the amounts contributed by the City as set forth in the Affordable Housing Property Transfer Agreement paid by Optionee to Habitat, receipt of which is hereby acknowledged by Habitat, Habitat hereby grants to Optionee the exclusive right to repurchase the Property before the property can be sold - for fair market value to a subsequent purchaser pursuant to the terms and conditions of that certain Affordable Housing property Transfer Agreement that is attached to this Agreement as Exhibit B and hereby incorporated by reference. This Option shall be subordinate to any option or right of first refusal granted to Humanity Housing, Inc., a California non-profit public benefit corporation. Exercise of Option 2. In the event that Optionee desires to exercise this option, Optionee must do so by delivering signed, written notice to Habitat on or before the expiration of this option, of the election of Optionee to exercise this option. The notice must be accompanied by Escrow 1 07-1368.001/ 2056-99886\ 1069280.3 12/1/11 Instructions executed by Optionee as Buyer. On exercise by Optionee in the manner set forth above, Habitat must promptly execute the Escrow Instructions and deposit them with the Escrow Holder. Binding Effect 3. This Agreement will bind and inure to the benefit of the respective heirs, personal representatives, successors, and assigns of the parties to this Agreement. Execution IN WITNESS WHEREOF, the parties to this Agreement have executed this Option Agreement on the date above written. Habitat Optionee HABITAT FOR HUMANITY OF ORANGE CITY OF HUNTINGTON UaCH COUNTY, INC., a California non-profit public benefit corporation Mayor n BY: City Clerk [SIGNATURE] Name: Title: p..0 / L° ED Di Economic Development [PRINT NA E] DATE City Manager BY: [SIGNATURE] APPROVED AS TO FORM: Name: AyAr F412ffI'�d Title: SR . l%e, [PRINT NAME] DATE / ?- - & — // City Attorney V - / _ s - It MAIL TAX STATEMENTS TO: City Clerk City of Huntington Beach P.O. Box 190 / 2000 Main Street Huntington Beach. CA 92648 1 07-1368.001/ 205 6-99886\1069280.3 12/1/11 Exhibit A Leal Description That certain real property located in the City of Huntington Beach, County of Orange, State of California, described as follows: PARCELI: Unit 2 (the "Unit'), as shown and described in the Condominium Plan for Patterson at Huntington Condominiums (together with any amendments thereto, collectively, the "Plan") covering Parcel 1 of Parcel Map No. 2011-104, as such Parcel is shown on the Parcel Map ("Map"), filed in Book 372, at Pages 31-33 of Parcel Maps, in the Office of the Orange County Recorder, recorded on November 2, 2011, as Instrument No. 2011000553373 in the Official Records of Orange County, California ("Official Records"), which Plan was recorded in the Official Records on November 18, 2011, as Instrument No. 2011000588862, together with an undivided One -Half (1/2) interest as tenant -in -common in the Common Area as shown and described in the Condominium Plan and exclusive easements as are shown as appurtenant to the Unit. PARCEL 2: An undivided one-half (1/2) fee simple interest as a tenant in common in and to the Common Area described in the Plan. PARCEL 3: Exclusive easements for the benefit of the Unit appurtenant to Parcel No. 1 and Parcel No. 2, described above, for porch and yard purposes, over those portions of the Common Area as shown numbered and assigned on the Plan or as described in the Declaration, and internal and external telephone wiring, as installed by Grantor. PARCEL 4: Nonexclusive easements for access, drainage, encroachment, maintenance, repair, and for other purposes, all as may be shown on the Plan and the Map, and as described in the Declaration of Covenants, Conditions and Restrictions and Reservation of Easements for Patterson at Huntington Condominiums, recorded on November 18, 2011 as Instrument No. 2011000588863, in Official Records (together with any amendments thereto, collectively, the "Declaration"). 07-1368.001/ 20 5 6- 9 9 8 8 6\ 10 6 9 2 80.3 12/1/11 CALIFORNIA ALL-PURPOSE ACKNOWLED State of California ) ) ss. County of Oro- r�ae ) On bP_c eog6-e_ - , 20 L (, before me, Rita A. Ross, a Notary Public, personally (Here insert the name and title of the officer) appeared 'S HP,0 t- l IE lL S t MAR I'll K 0 2 A" D O who proved to me on the basis of satisfactory evidence to be the person(s) whose names is/are subscribed to the within instrument and acknowledged to me that h> e/they executed the same in /their authorized capacity(ies), and that by /their signature(s) on the instrument. the person(s), or the entity upon behalf of which the person(s) 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. Witnes� my hand and Signature RITA A. ROSS Commission # 1929080 seal. j z :� a Notary Public - California a / z 4' Orange County D My Comm. Expires All 15, 2015 _10 WV [Seal] Attached to Option Agreement (Unit 2), between the City of Huntington Beach and Habitat for Humanity of Orange County, Inc. Executed by Sharon Ellis and Mark Korando of Habitat for Humanity of Orange County, Inc. on December 6, 2011 ACKNOWLEDGMENT STATE OF CALIFORNIA ) ) ss COUNTY OF ORANGE ) On December 7, 2011 before me, P. L. Esparza, Notary Public, personally appeared Donald F. Hansen, Jr., 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. ...'d► WITNESS my hand and official seal. ComP. L. ESPARZA mission # 1857021 z •'+s Notary Public - California z z %. z Orange County MY Comm. Expires Aug 4, 2013 (Seal) (Notary gnatur ACKNOWLEDGMENT STATE OF CALIFORNIA ss COUNTY OF ORANGE On December 8, 2011 before me, P. L. Esparza, Notary Public, personally appeared Joan L. Flynn, 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 she executed the same in her authorized capacity, and that by 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. (Notary Sig (ture) P. L. ESPAR[A Commission # 1857021 L .'� Notary Public - California a Orange County My Comm. Expires Au , 2013 (Seal) ACKNOWLEDGMENT STATE OF CALIFORNIA ) ss COUNTY OF ORANGE ) On December 7, 2011, before me, P. L. Esparza, Notary Public, personally appeared Fred A. Wilson 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. WITNESS my hand and official seal. P. L. ESPARZA Commission # 1857021 Z ;•-a Notary Public - California i Z ' Orange County NIComm. Expires Aug4, 2013 t (Seal) (Notary Sig ure) CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of California personally appeared P. L. ESPARZA Commission # 1857021 Notary Public - California z 2 D Orange County My Comm. Expires Aug 4, 2013 Place Notary Seal Above Here Insert Name and Title of th fficer who proved to me on the basis of satisfactory evidence to be the person(s) whose nameAd9aFe subscribed to the within instrument and acknowledged to me that he _1;1 ey executed the same it h>Qhe~r authorized capacity($M), and that by(ohefAheir signature() on the instrument the person(*, or the entity upon behalf of which the persorg&) 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. WITNES m an an ffid seal. Signatur ' Signat of Notary P lic 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: Signer(s) Other Than Named Above: Capacity(ies) Claimed by Signer(s) Signer's Name: ❑ Individual ❑ Corporate Officer — Title(s): ❑ Partner — ❑ Limited ❑ General ❑ Attorney in Fact ❑ Trustee ❑ Guardian or Conservator ❑ Other: Signer -is Representing: RIGHTTHUMBPRINT OF SIGNER Number of Pages: Signer's Nal ❑ Individual ❑ Corporate Officer — Title(s): ❑ Partner — ❑ Limited ❑ General ❑ Attorney in Fact ❑ Trustee ❑ Guardian or Conservator ❑ Other: Signer Is Representing: RIGHTTHUMBPRINT OF SIGNER' • of thumb here ©2007 National Notary Association • 9350 De Soto Ave., P.O. Box 2402 • Chatsworth, CA 91313-2402 • www.NationalNotary.org Item #5907 Reorder: Call Toll -Free 1-800-876-6827 Council/Agency Meeting Held:_ Deferred/Continued to: ),Appro d ❑ Conditionally Approved ❑ Denied Ci ler Sig VU re Council Meeting Date: September 6, 2011 Departmen ID Number: ED 11-25 (1, . i o: T, O, i SUBMITTED TO: Honorable Mayor and City Council Members SUBMITTED BY: Fred A. Wilson, City Manager PREPARED BY: Stanley Smalewitz, Economic Development Director SUBJECT: Adopt Resolution No. 2011-69 declaring disposition of certain surplus property and approve an Affordable Housing Agreement with Habitat for Humanity for construction of two units located at 18451 Patterson Lane Statement of Issue: An Affordable Housing Agreement between the City and Habitat for Humanity is submitted for City Council approval. This Agreement will facilitate the construction of two for -sale affordable housing units located at 18451 Patterson Lane. Financial Impact: HOME funds of $748,437. Homes will be sold for a total gross sales price of approximately $456,000. Once sold, the City's net HOME contribution towards the project will be $292,437. Recommended Action: Motion to: A) Adopt Resolution No. 2011-69, "A Resolution of the City Council of the City of Huntington Beach Declaring the Disposition of Certain Surplus Property;" and B) Approve Disposition and Development Agreement to form with Habitat for Humanity and approve the sale of real property; and, C) Authorize the Mayor and City Clerk to execute the "Affordable Housing Property Transfer Agreement" and any related documents and exhibits. Alternative Action(s): Do not approve and direct staff accordingly. HB -2 13- Item 4. - 1 REQUEST FOR COUNCIL ACTION MEETING DATE: 9/6/2011 DEPARTMENT ID NUMBER: ED 11-25 Analysis: The Redevelopment Agency and Habitat for Humanity have built a total 'of five (5) homes together in 2002 and 2004. The City received notice of a special Habitat for Humanity project focusing on providing home ownership opportunities for both active military families and veteran military families. The Redevelopment Agency purchased surplus property from the City in November 2007 for affordable housing opportunities; specifically 18451 Patterson Lane. After review by Habitat for Humanity -Orange County, the site will be suitable for two units- one for the military and one for a family. In March 2011, the Redevelopment Agency transferred all assets including land to the City of Huntington Beach; this included 18451 Patterson Lane. Habitat for Humanity had been processing plans through the Planning and Building Department to determine if two homes could be built on the site. A General Plan Conformance has been adopted by the Planning Commission in September 2010, as part of the surplus property list that was being compiled. With the land owned by the City, the City is able to declare the land surplus and approve the Affordable Housing Agreement. The Affordable Housing Agreement sets forth the following terms: - Land is transferred to Habitat for Humanity - Two units will be built: - Very -low Income: 30-80% of Area Median Income (AMI) - Moderate Income: 81-120% of Area Median Income (AMI) - Preference to Huntington Beach residents and Military or Veteran families - HOME funds committed to construction of units of $748,437 - Once homes are sold, HOME funds of $456,000 are repaid/reimbursed - City's total financial contribution is $292,437 and the land The Economic Development Committee has reviewed this project over the last year and recommends it for consideration. If the City approves the Affordable Housing Agreement, escrow is expected to close by September 30, 2011, with construction commencing immediately thereafter. Habitat is working to have the families in the new homes by the end of December. Environmental Status: Categorically excluded under the National Environmental Protection Act (NEPA) and Categorically exempt under the California Environmental Quality Act (CEQA). Strategic Plan Goal: Maintain financial viability and our reserves Attachment(s): Item 4. - 2 RB -2 I 4- ATTACHMENT 1 ', RESOLUTION NO. 2011-69 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH DECLARING THE DISPOSITION OF CERTAIN SURPLUS PROPERTY WHEREAS, the City of Huntington Beach is the owner of certain real property more particularly set forth on Exhibit A which is attached hereto and incorporated by this reference and consists of Assessor's Parcel Number 157-341-22; and The City acquired said parcel as a result of the Ellis Avenue Street widening Project (CC-891). On July 16, 1998, the City acquired the parcel formerly identified as 8051 Ellis Avenue and used a portion of it for the Street Widening Project; and The City Manager has recommended to this Council. that said property be declared Surplus Property ("the Surplus Property"); and Huntington Beach Municipal Code Section 3.06.010(b) authorizes the City to dispose of Surplus Property, and sets out the procedures therefore, NOW, THEREFORE, the City Council of the City of Huntington Beach does hereby resolve as follows: 1. That the real property described above is surplus and the public interest and necessity and in furtherance of affordable housing goals to require the disposition thereof. 2. All parcels have been appraised to establish the fair market value. 3. The costs incurred in preparing the land for sale including all related expenses and appraisal fees have been added to and made a part of the value to be paid on the sale of the Surplus Property. 4. The Surplus. Property is offered for disposition to Habitat for Humanity in order to develop two affordable housing units as those terms are defined by State Law. 5. The Surplus Property described herein is to be transferred at a below market rate such that the property may be developed and sold to Low Income buyers. 6. The City Manager is hereby authorized and directed to execute all documents and take all steps necessary to dispose of such Surplus Property, pursuant to the determinations of this Council and the procedures set forth in Chapter 3.06 of the Huntington Beach Municipal Code. 07-1368.001/69474 Resolution No. 2011-69 PASSED AND ADOPTED by the City Council of the City of Huntington Beach at a regular meeting thereof held on the 6th day of September , 2011. 0 r REVIEl APPROVED: INITIATED AND APPRO D: City Vilif �- Director of Econom' Development APPROVED AS TO FORM: �r ty Atto ey d'? Y� �l .fl 2 07-1368.001/69474 Res. No. 2011-69 STATE OF CALIFORNIA COUNTY OF ORANGE ) ss: CITY OF HUNTINGTON BEACH ) I, JOAN L. FLYNN the duly elected, qualified City Clerk of the City of Huntington Beach, and ex-officio Clerk of the City Council of said City, do hereby certify that the whole number of members of the City Council of the City of Huntington Beach is seven; that the foregoing resolution was passed and adopted by the affirmative vote of at least a majority of all the members of said City Council at an regular meeting thereof held on September 6, 2011 by the following vote: AYES: Shaw, Harper, Hansen, Carchio, Bohr, Dwyer, Boardman NOES: None ABSENT: None ABSTAIN: None Y` Clerk and ex-offici lerk of the City Council of the City of Huntington Beach, California ATTACHMENT #2 Lw� ml AFFORDABLE HOUSING PROPERTY TRANSFER AGREEMENT This AFFORDABLE HOUSING PROPERTY TRANSFER AGREEMENT ML "Agreement") is entered into this day of �U�, 20 // (the "Effective Date"), by and between the CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California ("City") and HABITAT FOR HUMANITY OF ORANGE COUNTY, INC., a California non-profit public benefit corporation ("Habitat"). RECITALS The following recitals are a substantive part of this Agreement. Capitalized terms used in these Recitals and not otherwise defined shall have the meaning set forth in Article I of this Agreement. A. The City desires to increase, improve and preserve affordable home ownership opportunities available to Moderate, Low and Very Low Income Households in Huntington Beach. B. In furtherance of these affordable housing goals and objectives, the City desires to convey that certain residential property located at 18451 Patterson Lane (the "Property") to Habitat for purposes of ensuring the development of two single family dwelling units and sale thereof to Moderate Income and Low or Very Low Income Households at an Affordable Purchase Price (the "Project"). The two dwelling units to be developed on the Property shall be referred to collectively herein as the "Dwelling Units" and individually as a "Dwelling Unit." C. The purpose of this Agreement is to effectuate the above referenced Plans conveying the Property to Habitat for the construction of the Dwelling Units and ensuring the resale of the Dwelling Units to one Moderate Income Household and one Low or one Very Low Income Household at an Affordable Purchase Price in furtherance of the City's affordable housing goals, objectives and requirements. The accomplishment of the Project, and the fulfillment generally of this Agreement, are in the vital and best interests of the City and the health, safety and welfare of its residents, and in accord with the public purposes and provisions of applicable federal, state, and local laws and requirements. NOW, THEREFORE, the City and Habitat hereby agree as follows: I. DEFINITIONS The capitalized terms and words used in this Agreement shall have the following meanings: "Affordability Period" means that period commencing on the date of the issuance by the City of a Certificate of Occupancy for each Dwelling Unit and continuing for sixty (60) years, during which such period the Dwelling Unit may be sold only to either Moderate, Low or a Very Low Income Household at an Affordable Purchase Price, as specified herein. "Affordable Housing Cost" means monthly housing payments as defined by Section 6920 of Title 25 of the California Code of Regulations, including payments for principal, interest, mortgage loan. insurance fees, property taxes and assessments, fire and casualty Page 1 of 30 07-1368.001/69450 insurance, a reasonable utility allowance (unless precluded by Federal requirements) and homeowner association fees, if any, which do not exceed the maximum housing cost allowed for the Dwelling Units in accordance with Section 50052.5 of the California Health & Safety Code or successor statute as set forth more fully in Section 501.3 of this Agreement. "Affordable Purchase Price" means a purchase price for which the monthly housing payments do not exceed Affordable Housing Cost. "City" means the City of Huntington Beach, a public body corporate and politic, and its successors and assigns. "City Conditions Precedent" is defined in Section 203.1. "City Conveyance" is defined in Section 200 of this Agreement. "City Option" means the option to repurchase the Property and/or Dwelling Unit granted by Habitat to City as set forth in Section 501.7. "Agreement" means this Affordable Housing Property Transfer Agreement by and between the City and Habitat, including all Exhibits hereto, any agreements entered into by the Parties in the form of an Exhibit, and any other documents or agreements delivered in connection herewith, all of which are incorporated herein by this reference. References to this "Agreement" shall include any modifications or amendments hereto. "Buyer Grant of City Option" means the option to repurchase the Dwelling Unit granted by the Qualified Buyer to City as set forth in Section 501.7. "Certificate of Completion " means certificate in the form attached as Exhibit E. "City" means the City of Huntington Beach, California, a municipal corporation. "County" shall mean the County of Orange, California. "Declaration" means the Declaration of Covenants, Conditions and Restrictions to be recorded against the Property imposing certain restrictions on the use, owner -occupancy, and maintenance thereof and the Dwelling Units thereon as affordable housing in substantially the form set forth in Exhibit F attached hereto and incorporated herein by reference. "Default" means the failure of a party to perform any action or covenant required by this Agreement within the time periods provided herein following notice and opportunity to cure, as set forth in Section 600 hereof. "Habitat" means Habitat for Humanity of Orange County, Inc., a California non- profit, public benefit corporation. The principal office of Habitat is 2200 S. Ritchey Street, Santa Ana, California 92705. Whenever the term "Habitat" is used herein, such term shall include any permitted successors and assigns as provided in Section 505 herein. "Development" means the construction of two single family residences on the Property and any improvements to the Property related thereto such that upon completion, the residences shall have been constructed in accordance with the Scope of Work and all other the requirements of this Agreement. Page 2 of 30 07-1368.001/69450 "Director" means the Director Economic Development for the City of Huntington Beach or his/her designee. "Dwelling Unit" means each of the two single family residential units to be developed on the Property by the Habitat as part of the Project and sold exclusively to one Moderate Income Household and one Low or Very Low Income Household at an Affordable Purchase Price in accordance with the terms and conditions of this Agreement. "Effective Date" means the effective date of this Agreement which is the latest of the dates this Agreement is executed by the City or the Habitat. "Escrow Instructions" means escrow instructions basically in the form attached as Rxl,ih;t N "Environmental Consultant" is defined in Section 208.1. "Environmental Reports" means the following reports on the Property: Asbestos Material, Building Survey and Lead Paint Screening Reports Vacant Single Family Residences 8051 and 8051-1/2 Ellis Avenue, Huntington Beach CA 92646 dated February 28, 2003 and Asbestos Material Building Survey and Lead Paint Screening Reports Vacant Single -Family Residence 8061 Ellis Avenue, Huntington Beach CA 92646 dated February 28, 2003. "Governmental Requirements" means all local, state, and federal laws, ordinances, rules, requirements, resolutions, policy statements and regulations (including, without limitation, those relating to land use, subdivision, zoning, environmental, labor relations, prevailing wage, notification of sale to employees, Hazardous Materials, occupational health and safety, water, earthquake hazard reduction and building and fire codes) applicable to the Project, the Property or the parties to this Agreement. "Grant Deed" means the Grant Deed in substantially the form set forth in Exhibit B attached hereto and incorporated herein by reference for the conveyance of the Property from the City to the Habitat. "Hazardous Materials" means any substance, material, or waste which is or becomes regulated by any local governmental authority, the County, the State of California, regional governmental authority, or the United States Government, or which poses a significant present or potential hazard to human health and safety, or to the environment, if released into a residential building or the environment, including (but not limited to) any material or substance which is (i) defined as a "hazardous waste," "extremely hazardous waste," or "restricted hazardous waste" under Section 25115, 25117 or 25122.7, or listed pursuant to Section 25140 of the California Health and Safety Code, Division 20, Chapter 6.5 (Hazardous Waste Control Law), (ii) defined as a "hazardous substance" under Section 25316 of the California Health and Safety Code, Division 20, Chapter 6.8 (Carpenter -Presley -Tanner Hazardous Substance Account Act), (iii) defined as a "hazardous material," "hazardous substance," or "hazardous waste" under Section 25501 of the California Health and Safety Code, Division 20, Chapter 6.95 (Hazardous Materials Release Response Plans and Inventory), (iv) defined as a "hazardous substance" under Section 25281 of the California Health and Safety Code, Division 20, Chapter 6.7 (Underground Storage of Hazardous Materials), (v) petroleum, (vi) friable asbestos, (vii) polychlorinated byphenyls, (viii) listed Page 3 of 30 07-1368.001/69450 under Article 9 or defined as "hazardous" or "extremely hazardous" pursuant to Article 11 of Title 22 of the California Code of Regulations, Division 4, Chapter 20, (ix) designated as "hazardous substances" pursuant to Section 311 of the Clean Water Act (33 U.S.C. ' 1317), (x) defined as a "hazardous waste" pursuant to Section 1004 of the Resource Conservation and Recovery Act, 42 U.S.C. ' 6901 et seq. (42 U.S.C. ' 6903), or (xi) defined as "hazardous substances" pursuant to Section 101 of the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. ' 6901 et seq. "Household" means one or more persons occupying a Dwelling Unit and sharing income and expenses. "HUD" means the United States Department of Housing and Urban Development. "Insurance Requirements" means the insurance requirements attached as Exhibit G. "Losses and Liabilities" means and includes all claims, causes of action, liabilities (including liability for claims, suits, actions, arbitration proceedings, administrative proceedings, regulatory proceedings, losses, expenses or cost of any kind, whether actual, alleged or threatened, including attorneys' fees and costs, court costs, interest or defense costs, and expert witness fees), losses, damages (including, without limitation, penalties, fines and monetary sanctions), injuries, expenses, charges, penalties or costs of whatsoever character, nature and kind, including reasonable attorney's fees and costs incurred by the indemnified party with respect to counsel of its choice, whether to property or to person, whether by direct or derivative action, and whether known or unknown, suspected or unsuspected, latent or patent. "Low Income Household" means a Household whose gross income does not exceed the maximum qualifying income for a "lower income household" as defined in Section 50079.5 of the Health & Safety Code. "Gross Income" shall be determined in accordance with Section 6914 of Title 25 of the California Code of Regulations. "Moderate Income Household" means persons or families whose income does not exceed 120 percent of the area median income, adjusted for family size by the California Department of Housing and Community Development ("HCD") in accordance with adjustment factors adopted and amended from time to time by the United States Department of Housing and Urban Development ("HUD") pursuant to Section 8 of the United States Housing Act of 1937. "Phase I" means the Habitat's acquisition of the Property, construction of a four (4) bedroom unit on the Property, and the sale thereof to a Moderate Income Household at an Affordable Housing Price. "Phase II" means the construction by Habitat of a three (3) bedroom unit on the Property, and the sale thereof to a Low or Very Low Income Household at an Affordable Housing Price. "Project" means the acquisition by Habitat of the Property and the construction of two Dwelling Units on the Property, with such Dwelling Units reserved for sale exclusively to one Moderate Income Household and one Low or Very Low Income Household at an Affordable Purchase Price, in accordance with this Agreement. Page 4 of 30 07-1368.001/69450 "Property" means that certain real property located at 18451 Patterson Lane in the City and more particularly described on the Property Legal Description. "Property Legal Description" means the legal description of the Property attached hereto as Exhibit A and incorporated herein by reference. "Property Standards" means (i) the housing quality standards in 24 CFR Section 882.109, (ii) all applicable federal, state and local codes (including, without limitation, Uniform Building, Electrical, Plumbing, Fire and Housing Codes), development standards, regulations and ordinances, and (iii) the cost-effective energy conservation and effectiveness standards in 24 CFR part 39. "Schedule of Performance" means the schedule of required actions under this Agreement as set forth in Exhibit C attached hereto and incorporated herein by reference. "Scope of Work" means the Development to be completed on the Property and the Dwelling Units thereon as set forth in Exhibit D attached hereto and incorporated herein by reference. "Very Low Income Household" means a Household whose gross income does not exceed the maximum qualifying income for a "very low income household" as defined in Section 50105 of the Health & Safety Code. "Gross Income" shall be determined in accordance with Section 6914 of Title 25 of the California Code of Regulations. II. CITY CONVEYANCE 200. City Conveyance Upon satisfaction of the conditions of this Agreement including the conditions precedent set forth in Section 203, the City agrees to convey the Property to the Habitat and the Habitat agrees to acquire the Property from the City (the "City Conveyance"). The City Conveyance shall be accomplished by the execution by the City of the Grant Deed and the recordation thereof in the official records of Orange County. 201. Purchase Price The purchase price of the property shall be one dollar ($1.00). Habitat acknowledges that such reduced price is given in consideration of Habitat completing the Development, recording the Declaration and City Option, conveying each Dwelling Unit to a qualified Moderate Income or Low or Very Low Income Household at an Affordable Purchase Price, then reimbursing the City and otherwise performing the obligations set forth below and in accordance with this Agreement. • City — transfers the land to Habitat for one dollar ($1.00) with terms and conditions running with the land as set forth herein. • Then City funds from Federal government HOME funds $748,437 for construction cost. • The two homes are sold at the same time for $300,000 (120% AMI), and $156,000 (50% AMI). Habitat will reimburse the City $456,000 from the sale price. Page 5 of 30 07-1368.001/69450 • The remaining balance of construction costs as well as the land value will be the City's cost of the Project. 202. Escrow By the time established therefore in the Schedule of Performance, the City and the Habitat agree to open an escrow ("Escrow") for the City Conveyance with First American Title Insurance Company (the "Escrow Agent"). The Escrow Agent will be provided Escrow Instructions together with a duplicate original of this Agreement. The parties agree to do all acts reasonably necessary to close the Escrow in the shortest possible time, including (without limitation) to execute such other and further documents as may be reasonably necessary, helpful or appropriate to effectuate the provisions of this Agreement. 203. Conditions Precedent to City Conveyance 203.1 City Conditions The City's obligations to execute the Grant Deed and deliver title to the Property to the Habitat are subject to the fulfillment by the Habitat of each and all of the conditions precedent described below (collectively, the "City Conditions Precedent") by the respective times established in the Schedule of Performance or as may be extended from time to time. The City Conditions Precedent are solely for the benefit of the City and may be waived by the Chairperson in writing in his/her sole and absolute discretion: a. Permits and Approvals. The Habitat shall have obtained all necessary entitlements and approvals for development of the Project, as set forth in Section IV hereof, and the City. b. Development Budget. By the date set therefore in the Schedule of Performance, Habitat shall have submitted to the City and the City shall have approved a budget and evidence of additional financing and construction for the Development of the Property. The proposed budget shall include and shall document in sufficient detail for the City to evaluate all of the following: (a) evidence that Habitat has assembled the wherewithal to complete the Development in accordance with this Agreement, including all necessary money, materials and labor, (b) evidence of Habitat's efforts to minimize the costs of the Development, including without limitation, Habitat's fundraising activities and solicitation for donations of materials and labor consistent with Habitat's corporate goal statement and purpose, and (c) documentation as determined by the City, of the market value of the Development compared to the actual cost of Development, discounted for donations of materials, labor and money. C. Execution and Delivery of Documents. The Habitat shall have executed and delivered to the Escrow Agent this Agreement, the Declaration, the City Option and any other documents required hereunder. d. Insurance. The Habitat shall have submitted to the City evidence of insurance in accordance with the Insurance Requirements. e. No Default. There shall exist no condition, event or act which would constitute a Default by Habitat hereunder or which, upon the giving of notice or the passage of time, or both, would constitute a Default. Page 6 of 30 07-1368.001/69450 f. Condition of the Property. Habitat shall have completed its environmental and soils review of the Property and provided copies of the results thereof to City. Any environmental remediation required pursuant hereto shall be complete. 203.2 Habitat's Conditions The Habitat's obligation to accept title to the Property is subject to the fulfillment by the City of each and all of the conditions precedent described below (collectively, the "Habitat Conditions Precedent") by the respective times established therefor in the Schedule of Performance or as may be extended from time to time. The Habitat Conditions Precedent are solely for the benefit of the Habitat and may be waived by the Habitat in writing in his/her sole and absolute discretion: a. Permits and Approvals. The Habitat shall have obtained all necessary entitlements and approvals for development of the Project, as set forth in Section IV or otherwise required hereof. b. Execution and Delivery of Documents. The City shall have executed and delivered to the Escrow Agent this Agreement, the Declaration and any other documents required hereunder for the City Conveyance. C. Title Policy; Escrow Fees. The City shall have deposited sufficient funds with the Escrow Agent to pay the costs of the Title Policy pursuant to Section 204 of this Agreement and any escrow fees. The Title Company shall have irrevocably committed to issue a Title Policy to Habitat in such form as is reasonably acceptable to Habitat. d. No Default. There shall exist no condition, event or act which would constitute a Default by City hereunder or which, upon the giving of notice or the passage of time, or both, would constitute a Default. e. Subdivision of Property. If determined by the Parties to be appropriate and necessary, City shall have completed the subdivision of the Property. f. Condition of the Property. Habitat shall have completed its environmental and soils review of the Property and the results thereof shall be satisfactory to the Habitat. Any environmental remediation required pursuant hereto shall be complete, to the satisfaction of Habitat. 204. Condition of Title; Title Policy Subject to the terms and conditions of this Agreement, the City shall convey to the Habitat fee simple title to the Property free and clear of all recorded or unrecorded liens, encumbrances, covenants, assessments, easements, leases and taxes, except for (i) title exceptions required by the City hereunder, (ii) the provisions contained in the Grant Deed; provided that, notwithstanding the foregoing, covenants and easements of record which do not affect the use of the Property for the purposes set forth in this Agreement shall be deemed to comply with this Section 204. Not later than thirty (30) days after the execution of this Agreement by the City, the City will cause First American Title Insurance Company (the "Title Company") to Page 7 of 30 07-1368.001/69450 deliver to Habitat a standard preliminary title report with respect to the Property (the "Title Report"). Subject to the provisions of this Section 204, the Habitat shall have the right to reasonably approve or disapprove the exceptions set forth in the Title Report. The Habitat shall have ten (10) days from the receipt of the Title Report to give written notice to the City of Habitat's approval or disapproval of the exceptions on the Title Report. Habitat's failure to give written approval or disapproval within such time limit shall be deemed approval of the Title Report. If the Habitat notifies the City of its disapproval of any exceptions in the Title Report, the City shall have the right, but not the obligation to remove such disapproved exceptions or provide assurances satisfactory to the Habitat that such exceptions will be removed on or before the City Conveyance. Within ten (10) days of written notification by the City to Habitat of the City's election not to remove such disapproved exceptions to title, Habitat shall notify the City of its election to proceed with the acquisition of the Property subject to the disapproved exceptions or to terminate this Agreement. Concurrently with recordation of the Grant Deed conveying title to the Property to Habitat, the Title Company shall issue and deliver to the Habitat a CLTA owner's title insurance policy (the "Title Policy") in an amount equal to the fair market value of the Property insuring that the title to the Property is vested in Habitat in the condition required by this Agreement. The Title Company shall provide the City with a copy of the Title Policy. 205. (Intentionally Blank) 206. Taxes and Assessments Ad valorem taxes and assessments, if any, on the Property, levied, assessed or imposed for any period commencing prior to the City Conveyance, shall be borne by the City, and any of such taxes imposed for any period commencing after conveyance of title to the Property shall be borne by the Habitat. 207. Recordation Upon satisfaction or waiver of the Conditions Precedent, the Escrow Agent shall complete the City Conveyance as follows: a. Record the Grant Deed with instructions for the Orange County Recorder to provide documentation thereof to both parties. b. Record the Declaration and Deed of Trust against the Property with instructions to the Orange County Recorder to provide documentation thereof to both parties. C. Record the City Option against the Property with instructions to the Orange County Recorder to provide documentation thereof to both parties. 208. Physical Condition of the Parcels 208.1 Environmental Condition The City is unaware of, after diligent inquiry, and has not received any notice or communication from any government agency having jurisdiction over the Property notifying the City of the presence of surface or subsurface zone hazardous materials, waste, or contamination in, on, or under such parcels, or any portion thereof. Habitat agrees and Page 8 of 30 07-1368.001/69450 acknowledges that City has provided it with copies of the Environmental Reports. Within the time set forth in the Schedule of Performance, Habitat shall have the right, but not the obligation, to investigate the environmental condition of the Property. The City shall reimburse the Habitat for the cost of the investigation up to a maximum amount of One Thousand Dollars ($1,000.00). Such investigation shall include such activities as a qualified environmental expert of consultant acceptable to City and Habitat (the "Environmental Consultant") deems necessary or appropriate to determine the environmental condition of the Property, [but, in any case, including preparation of at least a Phase I report for the entire Property]. The City shall make available at its sole cost the Property for the Environmental Consultant to conduct such investigation. Habitat shall copy the City on all correspondence and notify the City at least two (2) business days in advance of any meeting or site inspection by Environmental Consultant. If the Environmental Consultant finds that the projected cost of all activities necessary to correct or remove any hazardous waste, materials or contamination in, on or under the Property found in its investigation, including the cost of investigation by the Environmental Consultant (the "Remediation Cost") exceeds Two Thousand Dollars ($2,000.00), then either party may terminate this Agreement, within thirty (30) days after notice of the projected Remediation Cost, by the procedures set forth in Sections 602.1 and 602.2 herein; The City shall comply with CERCLA (Comprehensive Environmental Response, Compensation and Liability Act of 1980) 42 U.S.C. § 9601, et seq., and California Health & Safety Code §§ 25100, et seq., 25300, et seq., 25280, et seq. Any Remediation performed pursuant to this Agreement shall be performed pursuant to the provisions of Health & Safety Code § 33459, et seq. Upon the City Conveyance, the Habitat agrees to and hereby does release the City and its officers, directors, employees, representatives and agents and its successors of interest from and against all expenses including, without limitation, reasonable attorneys' fees and disbursements, losses, or liabilities suffered by the Habitat by reason of governmental action or third party claims arising out of preexisting hazardous materials, waste, or contamination, exacerbation, movement, release, or contamination of the Property, including without limitation those arising from the City's breach of its representation set forth in the first sentence of this Section 208.1 or the negligence or wrongful acts or omissions of City in its ownership, operation or remediation of the Property. 208.2 Soils Condition The City shall grant to the Habitat, and the Habitat's agents, employees and independent contractors, the right of access to and entry upon the Property for the purpose of inspection thereof, and conducting surveys, soils tests, and similar work to ascertain the soils condition of those parcels. The Habitat shall and hereby does release the City and the City, and their respective officers, employees, agents and representatives, from and against any damages, claims or other liabilities arising out of any injury or damages resulting from the activities of Habitat or its agents, employees independent contractors pursuant to any such access to, entry upon, or inspection of such parcel, excluding damage arising from pre- existing conditions. The Habitat shall reasonably determine whether the soils condition is suitable for the uses to which such parcels are to be put under this Agreement, and shall Page 9 of 30 07-1368.001/69450 approve or disapprove of the soils condition of the parcel on that basis, by written notice to the City within sixty (60) days of the City's execution of this Agreement. If the Habitat reasonably disapproves the soils condition of the parcel, the City may elect, within thirty (30) days of its notice of such disapproval, to cure such condition. If the City does not elect to cure the condition, the Habitat shall not be obligated to purchase the Property. If it so elects, City shall cure prior to close of escrow. 209. Preliminary Work Prior to the conveyance of title, representatives of Habitat shall have the right of access to all portions of the Property at all reasonable times for the purpose of obtaining data and making surveys and tests necessary to carry out this Agreement, including the investigation of the environmental condition of the Property pursuant to section 208 hereof. Any preliminary work undertaken on the Property by Habitat prior to conveyance of title or possession thereto shall require a written temporary right of entry agreement or license agreement which will provide in part the Habitat shall indemnify and hold harmless the City and the City against any claims resulting from any preliminary work and/or access or use of the Property undertaken by Habitat or its agents. Copies of data, surveys and tests obtained or made by the Habitat with respect to such parcels pursuant to this Section shall be promptly provided to the City after receipt by the Habitat. Any preliminary work by the Habitat shall be undertaken only after securing any necessary permits from the appropriate governmental agencies. 210. Condition of the Property; Indemnification 210.1 "As Is" Purchase a. City makes no covenant, representation or warranty as to the physical condition of the Property or the improvements located thereon. b. Upon City Conveyance, Habitat acknowledges and agrees that it has inspected the Property and satisfied itself as to all relevant physical characteristics and conditions applicable to the Property, including (without limitation) the presence/absence of Hazardous Materials and, having had the opportunity to conduct such investigations and studies on and of the Property as it deems necessary, hereby agrees that the City shall have no responsibility to correct or remediate any physical defect or condition present on, in or under the Property, except as provided in Section 208 above. C. Habitat further acknowledges and agrees that the Property is to be conveyed to, and accepted by, Habitat, in its present condition, "AS IS," and Habitat hereby assumes the risk (but only as between Habitat and the City) that adverse physical characteristics and existing conditions, including, but not limited to, the presence of Hazardous Materials, may not have been revealed by its investigation. 210.2 Release Effective upon the City Conveyance, Habitat hereby waives, releases, acquits and forever discharges the City and its respective officers, directors, employees or agents, or any other person acting on behalf of the City, of and from any and all claims, actions, causes of action, demands, rights, damages, costs, expenses or compensation whatsoever, direct or indirect, known or unknown, foreseen or unforeseen, which Habitat may Page 10 of 30 07-1368.001/69450 have or which may arise in the future on account of or in any way growing out of or in connection with the presence of Hazardous Materials on, in, under, from, or affecting or otherwise resulting frorn operations or activities on the Property, or, if applicable, the portion thereof conveyed, or any law or regulation applicable thereto, including, but not limited to, the application to the Property of the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. ' 9b01, as amended, and any similar state or local law. Habitat acknowledges that it is familiar with Section 1542 of the California Civil Code which reads: "A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor..." Habitat Habitat acknowledges that the release contemplated by this Section includes unknown claims, and Habitat waives the benefit of Civil Code Section 1542, or under any other statute or common law principle of similar effect, in connection with the releases contained in this Section. Habitat hereby waives and relinquishes all rights and benefits which it may have under Section 1542 of the California Civil Code with respect to the matters described in the Section. Unless explicitly set forth elsewhere in this Agreement, Habitat does not waive or relinquish any such rights and benefits it may have with respect to any other obligations of City set forth in this Agreement. Nothing contained in this Section is intended to modify the indemnities contained in this Agreement. 210.3 Indemnification Following the City Conveyance, Habitat agrees to save, protect, defend, indemnify and hold ]awnless the City, its board, employees, agents and contractors, from and against any and all Losses and Liabilities (including, without limitation, reasonable attorneys' and consultants' fees, investigation and laboratory fees, and remedial and response costs but excluding the extent to which such loss or liability arises from the active negligence or intentional misconduct of City) which may now or in the future be incurred or suffered by City, its board, employees, agents and contractors, by reason of, resulting from or arising in any manner whatsoever as a direct or indirect result of (i) Habitat's ownership (or possession) of all or any part of the Property for purposes of any Governmental Requirements regulating Hazardous Materials first discovered on the Property following the City Conveyance, (ii) any act or omission on the part of Habitat, or its representatives, contractors or invitees with respect to the Property or construction of the Dwelling Units thereon, (iii) the presence on or under, or the escape, seepage, leakage, spillage, discharge, emission or release from the Property of any Hazardous Materials first discovered on the Property following the City Conveyance, (iv) any enviromnental or other condition of the Property ;first discovered following the City Conveyance, and (v) any Losses and Liabilities incurred with respect to the Property under any Governrental Requirements relating to Hazardous Materials first Page 11 of 30 07-1368.001l69450 discovered on the Property following the City Conveyance. Habitat's obligations under this Section shall survive the issuance of the Release of Construction Covenants, the sale of the Dwelling Units or any termination of this Agreement. 211. habitat Obligations After the City Conveyance The Habitat shall not engage in any activities involving Hazardous Materials and shall comply with all Governmental Requirements including all applicable environmental laws in connection with the Development of the Property. III. CHANGE OF CONTROL; REPRESENTATIONS 300. Prohibition Against Change in Management and Control of habitat The qualifications and identities of Habitat and its members constitute a portion of the consideration given the City for the City Conveyance. It is because of Habitat's unique qualifications and characteristics that City has entered into this Agreement. Accordingly, without the prior written approval of City, which approval may be granted or withheld in the sole and absolute discretion of City, and except for the sale of the Dwelling Units to a Moderate Income or Low or Very Low Income Household in accordance with this Agreement, Habitat shall not (i) sell, assign, transfer, convey or hypothecate all or any part of its interest in or rights in the Property, the Dwelling Units or this Agreement, or (ii) effect any transfer or change in the ownership interests or management of Habitat which results in a change of control or management of Habitat. 301. Representations and Warranties 301.1 City's Representations City represents and warrants to Habitat as follows: a. Authority. City is a public body, corporate and politic, existing pursuant to the Community Redevelopment Law, which has been authorized to transact business pursuant to action of the City. The execution, performance and delivery of this Agreement by City have been fully authorized by all requisite actions on the part of City. b. No Conflict. To the best of City's knowledge, City's execution, delivery and performance of its obligations under this Agreement will not constitute a default or a breach under any contract, agreement or order to which City is a party or by which it is bound. C. No City Bankruptcy. City is not the subject of a bankruptcy proceeding. d. Title. At the Closing, City shall deliver title to the Property free of any right of any third party (except Habitat) to possession of all or any part of the Property. e. Litigation. To the best of City's knowledge, there are no actions, suits, material claims, legal proceedings, or any other proceedings affecting the Property or any portion thereof, at law or in equity before any court or governmental agency, domestic or foreign. Page 12 of 30 07-1368.001/69450 f. Governmental Compliance. To the best of City's knowledge, City has not received any notice from any governmental agency or authority alleging that the Property is currently in violation of any law, ordinance, rule, regulation or requirement applicable to its use and operation. If any such notice or notices are received by City following the Effective Date of this Agreement, City shall, within ten (10) days of receipt of such notice, notify Habitat. g. FIRPTA. City is not a "foreign person" within the parameters of FIRPTA or any similar state statute, or its exempt from the provisions of FIRPTA or any similar state statute, or that City has complied and will comply with all the requirements under FIRPTA or any similar state statute. Until the Closing, City shall, upon learning of any fact or condition which would cause any of the warranties and representations in this Section not to be true, immediately give written notice of such fact or condition to Habitat. 301.2 Habitat's Representations Habitat represents and warrants to City as follows: a. Organization. Habitat is a duly organized, validly existing nonprofit public benefit corporation in good standing under the laws of the state of California and has the power and authority to purchase, own and lease property and carry on its business as now being conducted. The copies of the documents evidencing the organization of Habitat and setting forth the membership interests, control and management of Habitat delivered to the City are true and correct (and true copies of the originals, if applicable) as of the Effective Date. b. Authority. Habitat has the legal power, right and authority to execute, deliver and enter into this Agreement and any and all other agreements and documents required to be executed and delivered by the Habitat in order to carry out, give effect to, and consummate the transactions contemplated by this Agreement, and to perform and observe the terms and provisions of all of the above. The parties who have executed this Agreement and all other documents or instruments executed and delivered, or to be executed and delivered, pursuant to this Agreement are authorized to execute and deliver the same on behalf of the Habitat and all actions required under Habitat's organizational documents and applicable governing law for the authorization, execution, delivery and performance of this Agreement and all other documents or instruments executed and delivered, or to be executed and delivered pursuant hereto, have been duly taken. C. Valid and Binding_ Agreements. This Agreement and all other documents or instruments which have been executed and delivered pursuant to or in connection with this Agreement constitute or, if not yet executed or delivered, will constitute when so executed and delivered, legal, valid and binding obligations of Habitat enforceable against it in accordance with their respective terms. d. Contingent Obligations. The Habitat does not have any contingent obligations or any contractual agreements which could materially adversely affect the ability of the Habitat to carry out its obligations hereunder. Page 13 of 30 07-1368.001/69450 e. Litigation. No action, suit or proceedings are pending or threatened before any governmental department, commission, board, bureau, agency or instrumentality to which the Habitat is or may be made a party or to which any of its property is or may become subject, which has not been fully disclosed to the City which could materially adversely affect the ability of the Habitat to carry out its obligations hereunder. f. No Conflict. Habitat's execution and delivery of this Agreement and any other documents or instruments executed and delivered, or to be executed or delivered, pursuant to this Agreement, and the performance of any provision, condition, covenant or other term hereof or thereof, do not or will not conflict with or result in a breach of any statute, rule or regulation, or any judgment, decree or order of any court, board, commission or agency whatsoever binding on Habitat, or any provision of the organizational documents of Habitat, or will conflict with or constitute a breach of or a default under any agreement to which Habitat is a party, or will result in the creation or imposition of any lien upon any assets or property of Habitat, other than liens established pursuant hereto. g. No Habitat Bankruptcy. No attachments, execution proceedings, assignments for the benefit of creditors, insolvency, bankruptcy, reorganization, receivership or other proceedings are pending or threatened against the Habitat or any parties affiliated with Habitat, nor are any of such proceedings contemplated by Habitat or any parties affiliated with Habitat. Until the Closing, Habitat shall, upon learning of any fact or condition which would cause any of the warranties and representations in this Section not to be true, immediately give written notice of such fact or condition to City. IV. DEVELOPMENT 400. Scope of Work Habitat shall complete the Development of the Property in accordance with this Agreement, the Scope of Work, the Schedule of Performance, and the approved plans, drawings and documents for each Dwelling Unit. As described in the Scope of Work, Habitat shall be permitted to construct the Dwelling Units in two phases: Phase I shall consist on the construction and sale of a four -bedroom Dwelling Unit to be sold to a Moderate Income Household at an Affordable Purchase Price; and Phase II shall consist of the construction and sale of a three' -bedroom Dwelling Unit to be sold to a Low or Very Low Income Household at an Affordable Purchase Price. Phase I and Phase II shall be completed within the time periods set forth therefore in the Schedule of Performance. The Scope of Work shall require the construction by Habitat of a block wall between the Property and the properties to the south and west of the Property. 401. Submission and Approval of Plans and Drawings Before commencement of the Development, and at or prior to the times set forth therefor in the Schedule of Performance, the Habitat shall submit to the City any plans and drawings (collectively, the "Design Development Drawings") which may be required by the City with respect to the permits and entitlement which are required to be obtained to commence the Development. Habitat covenants and agrees to blend the design of Phase I and Phase 1I in such a manner as is acceptable to the City. City shall have all rights to review and Page 14 of 30 07-1368.001/69450 approve or disapprove all design development drawings and other required submittals in accordance with the City Zoning and Subdivision Ordinance. The City shall have the right of reasonable architectural review of all plans and drawings, including any changes therein; provided, however, that nothing herein shall relieve Habitat of any obligation to submit plans and submissions for building permits to City departments or other agencies. Habitat shall not make any improvements to the Property which are not in conformance with the approved plans and the Scope of Work without the prior approval of the City. In the event of any inconsistency between the Scope of Work and the plans ultimately approved by the City for the Development, the approved plans shall supersede the Scope of Work and control the Development. 402. Construction Drawings and Related Documents By the time set forth therefore in the Schedule of Performance, Habitat shall prepare and submit to the City in form suitable for plan check, construction drawings, landscape plans, and related documents for development of the Dwelling Units. Approval of the construction drawings shall be granted by the City if they conform to the Design Development Drawings and the Scope of Development. Any items disapproved shall be revised and resubmitted within fifteen (15) days of disapproval. The landscaping and finished grading plans shall be prepared by a professional landscape architect or registered civil engineer who may be affiliated with the same firm as the Habitat's architect or civil engineer. During the preparation of all drawings and plans, staff of the City, City and the Habitat shall hold regular progress meetings to coordinate the preparation of, submission to, and review of drawings, plans and related documents by the City. The staff of City, the City and the Habitat shall communicate and consult informally as frequently as is necessary to aid in the prompt and speedy consideration of any submittals by Habitat. 403. Parcel Map By the time set forth in the Schedule of Performance, Habitat shall submit and process in accordance with applicable provisions of the City's Zoning and Municipal Codes and the laws of the State of California a parcel map in part to allow the Dwelling Units thereon to be sold and occupied as single family homes. 404. Building Permits By the time set forth in the Schedule of Performance, and before commencement of the Development, Habitat shall secure (or cause to be secured) any and all permits which may be required by the City or any other governmental agency affected by such work. It is understood that it is Habitat's obligation to timely submit to the City final drawings with final corrections to obtain building permits. City shall pay the cost of all permits in an amount not to exceed $45,000.00. Habitat will pay all permit costs in excess of $45,000.00. Habitat is obligated to timely submit to the City final drawings with final corrections to obtain building permits; City will use its reasonable best efforts to expedite the issuance of building permits and certificates of occupancy for construction that meets all applicable Governmental Requirements. Page 15 of 30 07-1368.001/69450 405. Cost of Development Except as provided in Section 404 above, all of the costs of planning, designing, and completing the Development and all permit fees associated therewith shall be borne solely by Habitat. 406. Development Schedule In accordance with the Schedule of Performance, Habitat shall promptly begin the Development, and thereafter diligently prosecute such Development to completion. Habitat's failure to comply with the Schedule of Performance shall constitute a Default. 407. Rights of Access For the purpose of assuring compliance with this Agreement, representatives of the City shall have the reasonable right of access to the Property and the Dwelling Units, without charges or fees, during normal construction hours during the period of Development and prior to the sale of each Dwelling Unit for the purposes of inspecting the work being performed by Habitat. Such representatives shall comply with all safety rules and shall not interfere with or delay the Development. 408. Compliance With Laws Habitat shall carry out the Development in conformity with all Property Standards and other applicable Governmental Requirements. 409. Construction Contracts All third party construction contracts entered into in connection with the Development shall be entered into with a duly licensed and insured contractor or contractors. All such contract(s) entered into on or after the Effective Date shall include reference to this Agreement and the contractor's specific obligation to carry out the construction and completion of the Development in conformity with all Property Standards and other applicable Governmental Requirements. Habitat shall ensure that all third party construction contractors and licensed building professionals such as architects carry insurance in accordance with City's requirements, including, if applicable, professional liability insurance. To assure that third party construction contracts are entered into pursuant to bidding requirements that include letting contracts to the lowest responsible bidder paying prevailing wages, the City requires that the Habitat submit a cost certification that demonstrates the third party contracts were let to lowest responsible bidder. 410. No Discrimination During Construction Habitat certifies and agrees that all persons employed or applying for employment by it and all general contractors, subcontractors, bidders and vendors, are and will be treated equally by it without regard to, or because of race, color, religion, ancestry, national origin, sex, sexual orientation, age, pregnancy, childbirth or related medical condition, medical condition (cancer related) or physical or mental disability, and in compliance with Title VII of the Civil Rights Act of 1964, 42 U.S.C. Section 2000, et seq., the Federal Equal Pay Act of 1963, 29 U.S.C. Section 206(d), the Age Discrimination in Employment Act of 1967, 29 U.S.C. Section 621, et seq., the Immigration Reform and Page 16 of 30 07-1368.001/69450 Control Act of 1986, 8 U.S.C. Section 1324b, et seq., 42 U.S.C. Section 1981, the California Fair Employment and Housing Act, Cal. Government Code Section 12900, et seq., the California Equal Pay Law, Cal. Labor Code Section 1197.5, Cal. Government Code Section 11135, the Americans with Disabilities Act, 42 U.S.C. Section 12101, et seq., and all other antidiscrimination laws and regulations of the United States and the State of California as they now exist or may hereafter be amended. Habitat shall allow representatives of City access to its employment records related to this Agreement during regular business hours to verify compliance with these provisions when so requested by City. 411. Taxes and Assessments Habitat shall pay prior to delinquency all ad valorem real estate taxes and assessments on the Property, subject to the Habitat's right to contest in good faith any such taxes or assessments and/or Habitat's exemption from such taxes awarded by the County on the basis of Habitat's non-profit status. 412. General Liability, Workers' Compensation and Builders' Risk Insurance During the Development and until the issuance of the Certificate of Completion pursuant to Section 416 of this Agreement, Habitat shall procure and maintain insurance against claims for injuries to persons or damages to property which may arise from or in connection with the performance of the Development hereunder by Habitat and all of its contractors, subcontractors, employees and agents. Subsequent to the issuance of the Certificate of Completion and until the sale of each Dwelling Unit, Habitat shall maintain all liability insurance required by Resolution No. 2008-63, and all risk insurance in an amount at least equal to the replacement value of the Dwelling Unit. All insurance comply with the Insurance Requirements. 413. Indemnification To the full extent permitted by law, Habitat shall indemnify, defend and hold harmless the City, its board, employees, agents and contractors from and against any and all Losses and Liabilities, where the same arise out of, are a consequence of, or are in any way attributable to, in whole or in part, to: (i) Habitat's compliance with all applicable Governmental Requirements, including all applicable federal and state labor standards; (ii) defects in the Project plans, design or drawings, including without limitation the violation of any laws, and for defects in any structural or other work performed by or on behalf of Habitat in designing or constructing the Project, and for defects in any work done according to the City approved plans; or (iii) any breach of or any performance or act or failure to perform or act pursuant to this Agreement by Habitat, or by any individual or entity that Habitat shall bear the legal responsibility therefore, including but not limited to, officers, agents, employees, volunteers, contractors or subcontractors of Habitat. The Habitat agrees to and shall defend, release, indemnify and hold harmless the City, its board, employees, agents and contractors from and against any and all losses and liabilities arising from or as a result of the death of any person or any accident, injury, loss, or damage whatsoever caused to any person or to the property of any person which shall occur directly or indirectly as a result of or in connection with the acts of or on behalf of the Habitat in connection with this Agreement, whether such damage shall occur or be discovered before Page 17 of 30 07-1368.001/69450 or after termination of this Agreement except where caused by the active negligence or willful misconduct of City or City. These indemnification provisions supplements and in no way limit the scope of the indemnification set out elsewhere in this Agreement. The indemnity obligations of Habitat under this Section shall survive the sale of the Dwelling Units and the expiration or termination, for any reason, of this Agreement. 414. Liens and Stop Notices Habitat shall not allow to be placed on the Property or any part thereof any lien or stop notice. If a claim of a lien or stop notice is given or recorded affecting the Property, the Habitat shall within thirty (30) days of such recording or service or within five (5) days of the City's demand whichever last occurs: a. pay and discharge the same; or b. affect the release thereof by recording and delivering to the City a surety bond in sufficient form and amount, or otherwise; or C. provide the City with indemnification from a title company against such lien or other assurance which the City deems, in its sole discretion, to be satisfactory for the payment of such lien or bonded stop notice and for the full and continuous protection of the City from the effect of such lien or bonded stop notice. 415. Right of City to Satisfy Liens Subsequent to the City Conveyance, but prior to the sale of the Dwelling Units, City shall have the right, but not the obligation, after Habitat has had written notice and failed after a reasonable time, but in any event not less than thirty (30) days, to challenge, cure, adequately bond against, or satisfy any liens or encumbrances on the Property which are not otherwise permitted under this Agreement. 416. Certificates of Completion Promptly after completion of the Development of the Property in conformity with this Agreement, the City shall furnish Habitat with a Certificate of Completion, following written request by Habitat. A Certificate of Completion shall be, and shall so state, a conclusive determination of satisfactory completion of the Development of the Property pursuant to this Agreement. Any party then owning or thereafter purchasing, leasing or otherwise acquiring any interest in the Dwelling Unit shall not (because of such ownership, purchase, or acquisition) incur any Development obligation or liability under this Agreement. The City shall not be obligated to issue a Certificate of Completion for the Property until all of the following have occurred: a. final inspection of the Dwelling Units by or on behalf of the City and determination by the City that the Dwelling Units have been completed in substantial conformance with this Agreement; and b. issuance of the final Certificate of Occupancy for each Dwelling Unit Page 18 of 30 07-1368.001/69450 by the City. C. Any applicable approvals obtained. Such Certificate of Completion shall not constitute evidence of compliance with or satisfaction of any obligation of Habitat to any holder of a mortgage, or any insurer of a mortgage securing money loaned to finance the improvements or any part thereof. Such Certificates of Completion are not notices of completion as referred to in the California Civil Code Section 3093. V. USE OF THE PROPERTY; COVENANTS 500. Construction; Permitted Uses Habitat covenants and agrees to develop two (2) Dwelling Units on the Property, one with three (3) bedrooms and one with four (4) bedrooms in conformity with the Scope of Development. The [three (3) bedroom] Dwelling Unit shall be reserved for sale solely to a Moderate Income Household and the four (4) bedroom Dwelling Unit shall be reserved for sale solely to a Low or Very Low Income Household. Habitat shall construct and fixturize the Dwelling Units in the same manner and to the same level of quality as comparable market rate units, except as otherwise specified in the approved plans for the Development. All uses undertaken by Habitat on the Property shall conform to the Declaration and to all applicable provisions of the City Zoning and Subdivision Ordinance and Governmental Requirements. Habitat agrees that the Dwelling Units shall not be leased or rented by the Habitat or any party related to the Habitat. Interim rental to a proposed purchaser during the performance of the purchaser's "sweat equity" obligation with Habitat shall be allowed. Neither of the Dwelling Units shall at any time be utilized on a transient basis, nor shall the Property or any portion thereof ever be used as a hotel, motel, dormitory, fraternity or sorority house, rooming house, group home, hospital, nursing home, sanitarium or rest home. The foregoing covenants are incorporated into the Declaration and shall run with the land. 501. Affordable Mousing Use Habitat covenants and agrees for itself, its successors, its assigns and every successor in interest to each Dwelling Unit, that the Dwelling Units shall be owner -occupied and used only for single family residential uses specified in this Agreement, the Declaration and all applicable provisions of the City Zoning and Subdivision Ordinance. Each of the Dwelling Units shall also be subject to long-term restrictions for the Affordability Period in accordance with this Agreement and the Declaration. Habitat further covenants and agrees, for itself, its successors, its assigns and every successor in interest to the Property (or portion thereof), that Habitat shall sell one Dwelling Unit to a Low or Very Low Income Household at a sales price that does not exceed an Affordable Purchase Price and one Dwelling Unit to a Moderate Income Household at a sales price that does not exceed Affordable Purchase Price. 501.1 Selection of Buyers Habitat shall be responsible for the selection of buyers for the Dwelling Units in compliance with the criteria set forth in Section 501.2 and the Marketing Plan Page 19 of 30 07-1368.001/69450 prepared in accordance with Section 502 of this Agreement. Habitat shall require each proposed buyer to occupy the Dwelling Unit as their principal residence. Habitat shall develop and submit to the City a written procedure for selection of buyers which, upon approval by the City, shall be implemented by Habitat. Each buyer must pay at the close of escrow not less than one (1%) of the Affordable Purchase Price of the Dwelling Unit. 501.2 Income of Buyers Prior to the close of escrow for the conveyance of each Dwelling Unit, Habitat shall obtain and maintain on file an income certification and supporting documentation as set forth below from each buyer demonstrating that such buyer is a Moderate Income or Low or Very Low Income Household and providing such additional information as may be required in the future by the City, the State of California or HUD. The income certification shall be completed in such form as may be provided by the City from time to time. Not less than thirty (30) days prior to the close of escrow, Habitat shall submit a duplicate original of the income certification to the City and shall meet with City staff to review the supporting documentation. Habitat shall maintain an original income certification and the supporting documentation in its files during the period of time that the Moderate Income or Low or Very Low Income Household buyer owns the Dwelling Unit and for ten (10) years after such buyer sells or otherwise transfers the Dwelling Unit. Such supporting documentation shall include true copies of income tax returns from the buyer for the two (2) most recent tax years in which a return was filed and at least one of the following: a. two (2) paycheck stubs from the buyer's two (2) most recent pay periods; b. a current written verification of income and employment from the buyer's current employer; C. an income verification certification from the Social Security Administration and/or the California Department of Social Services if the buyer receives assistance from such agencies; or d. an alternate form of income verification reasonably requested by the City, if none of the above forms of verification are available to Habitat. Each purchase agreement for the sale of a Dwelling Unit shall include a provision that Habitat has relied on the income certification and supporting information supplied by the buyers in determining qualification for ownership of the Dwelling Unit, and that any material misstatement in such certification (whether or not intentional) will be cause for immediate termination of such purchase agreement. In the event Habitat or its successors or assigns is unable to verify the buyer's income as provided herein prior to the proposed sale, then the buyer's income shall be deemed to exceed the maximum allowable income limit for Moderate Income or Low or Very Low Income Households and the Property shall not be conveyed to such buyer. A buyer who qualifies as a Moderate Income or Low or Very Low Income Household prior to purchase and occupancy of a Dwelling Unit in compliance with Page 20 of 30 07-1368.001/69450 this Agreement shall be deemed to continue to be so qualified so long as that buyer continues to own and occupy the Dwelling Unit as buyer's principal residence. 501.3 Affordable Purchase Price The sales price of each Dwelling Unit by Habitat to a Moderate Income or Low or Very Income Household shall not exceed an Affordable Purchase Price. In calculating an "Affordable Purchase Price," the monthly housing payments for the Dwelling Unit at an Affordable Purchase Price shall not exceed "Affordable Housing Cost" in accordance with Section 50052.5 of the California Health & Safety Code as such sections exist as of the Effective Date or as hereafter amended. As of the Effective Date, an Affordable Housing Cost calculated and determined in accordance with Section 50052.5 of the California Health & Safety Code is as follows: For a Very Low Income household, "Affordable Housing Cost" shall mean monthly housing payments which shall not exceed the product of thirty percent (30%) times seventy percent (70%) of the County median income, adjusted for family size. For a Low or Moderate Income household, "Affordable Housing Cost," for any Low or Moderate Income Household that has a gross income that exceeds the maximum income for a Very Low Income Household but does not exceed seventy percent (70%) of the County median income, means a monthly housing payment that shall not exceed thirty percent (30%) of seventy percent (70%) of the County median income adjusted for family size appropriate to the Unit. For any Low or Moderate Income Household that has gross income that equals or exceeds seventy percent (70%) of the County median income, Affordable Housing Cost shall be thirty percent (30%) of the actual income of the Low or Moderate Income Household, adjusted for family size appropriate to the Unit. The term "monthly housing payments" of a person or family purchasing a Dwelling Unit shall have the same meaning as set forth in Section 6920 of Title 25 of the California Code of Regulations, as from time to time amended, and any successor regulations thereto. 501.4 Declaration of Covenants, Conditions and Restrictions Habitat covenants and agrees, for itself, its successors, its assigns and every successor in interest to the Property, that each of the Dwelling Units shall be subject to long-term resale restrictions and use, owner -occupancy and maintenance covenants as set forth in the herein including in the Declaration of Covenants, Conditions And Restrictions, limiting the initial sale by Habitat and any subsequent resale throughout the Affordability Period to Moderate Income or Low or Very Low Income Households, as appropriate, at an Affordable Purchase Price. The Declaration of Covenants, Conditions and Restrictions shall be recorded and incorporated as part of the Grant Deed. The Declaration shall run in favor of the City and shall be enforceable by the City. Habitat shall provide each potential buyer with a copy of the Declaration and Page 21 of 30 07-1368.001/69450 disclose to each Moderate Income or Low or Very Low Income Household, as appropriate, prior to purchasing a Dwelling Unit the nature of the covenants contained in the Declaration. Further, Habitat shall cause each buyer of a Dwelling Unit to execute an acknowledgement of such covenants, in such form as is required by City, and shall provide a copy of such executed acknowledgement to City prior to the close of escrow for the sale of the Dwelling Unit. 501.5 Reverter Unless In order to ensure compliance with the affordability and other covenants set forth herein, concurrently with the City Conveyance, Habitat expressly agrees that in the event the Property is not developed in accordance with this Agreement or the Dwelling Units are not sold in accordance with this Agreement the Property and any improvements made thereto shall revert to City at no cost. 501.6 Conditions to Sale of Dwelling Units Habitat shall comply with all applicable Governmental Requirements in connection with the sale of the Dwelling Units. Each contract for sale of a Dwelling Unit shall require that any subsequent transfers of the Dwelling Unit be subject to the approval of the City in order to ensure compliance with the affordability and other covenants set forth herein, and shall require the submission and approval by the City of all income documentation for the proposed buyer evidencing that such proposed buyer is a Moderate Income or Low or Very Low Income Household, as appropriate. Habitat may reserve an option or right of first refusal to repurchase the Dwelling Unit from the buyer in the event of a proposed transfer by the buyer. 501.7 Buyer Grant of City Option In order to ensure compliance with the affordability and other covenants set forth herein, concurrently with the sale of a Dwelling Unit, the buyer of the Dwelling Unit shall grant the City an option to purchase the Dwelling Unit in the event of a proposed transfer by the buyer. Such option shall be in the form of the Buyer Grant of City Option, and shall be subordinate to any option or right of first refusal granted to Habitat. 502. Marketing Plan Habitat shall submit for the approval by the City, which approval shall not unreasonably be withheld, a plan for marketing the sale of the Dwelling Units. Such marketing plan shall include a plan for publicizing the availability of the Dwelling Units within the City, such as notices in City -sponsored newsletters, newspaper advertising in local newspapers and notices in City facilities. The Dwelling Units shall initially be marketed to City residents eligible for Moderate Income and Low or Very Low Income Households which include a member who is an active duty military or military veteran. Habitat shall maintain complete and accurate records pertaining to the marketing and initial sale of the Dwelling Units and, upon reasonable notice, permit any duly authorized representative of the City to inspect the books and records of Habitat. Page 22 of 30 07-1368.001/69450 503. Maintenance of Property Habitat covenants and agrees, for itself, its successors, its assigns and every successor -in -interest to the Property, to maintain the improvements and landscaping in a manner consistent with community standards which will uphold the value of the Property and in accordance with the Declaration and applicable provisions of the City's Municipal Code. Habitat also agrees to comply with any and all covenants and agreements established by any homeowner's association or other regulatory entity recognized by area property owners and to comply with all applicable federal, state and local laws. At the time Habitat sells a Dwelling Unit, the maintenance responsibility with respect to such Dwelling Unit (only) shall be assigned to the purchaser of such Dwelling Unit, and shall run with the land. All other maintenance responsibilities will remain with Habitat as provided herein. The City may at its discretion conduct a yearly inspection to assure that the maintenance of the property remains in compliance with this section. 504. Nondiscrimination Covenants Habitat covenants by and for itself and any successors in interest that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property or the Dwelling Units, nor shall the Habitat 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 of the Property, the Dwelling Units or any portion thereof. The foregoing covenants shall run with the land in perpetuity. Habitat shall refrain from restricting the rental, sale or lease of the Dwelling Units on the basis of race, color, religion, sex, marital status, ancestry or national origin 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, creed, 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 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, sublessees 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: "That there shall be no discrimination against or segregation of any person or group of persons, on account of race, color, creed, religion, sex, marital status, national origin, Page 23 of 30 07-1368.001/69450 or ancestry 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 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, creed, religion, sex, marital status, national origin, or ancestry, 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, sublessees or vendees of the premises." 505. Effect of Violation of the Terms and Provisions of this Agreement After Completion of Development The City is deemed the beneficiary of the terms and provisions of this Agreement and of the covenants running with the land, for and in their own right and for the purposes of protecting the interests of the community and other parties, public or private, in whose favor and for whose benefit this Agreement and the covenants running with the land have been provided, without regard to whether the City has been, remains or is an owner of any land or interest therein. The City shall have the right, if this Agreement or any covenants in any agreement pursuant to this Agreement are breached, to exercise all rights and remedies, and to maintain any actions or suits at law or in equity or other proper proceedings to enforce the curing of such breaches to which it or any other beneficiaries of this Agreement and such covenants may be entitled. VI. DEFAULTS AND REMEDIES 600. Defaults; General Subject to Section 707 hereof, failure or delay by any party to perform any term or provision of this Agreement constitutes a default under this Agreement. The party who so fails or delays must immediately commence to cure, correct or remedy such failure or delay, and shall complete such cure, correction or remedy within thirty (30) days following written notice of the default by the injured party. Failure or delay in giving notice shall not constitute a waiver of any default, nor shall it change the time of default. The City and Habitat agree to provide a copy of any notice of default to any mortgage lender requesting written notice of default and which has loans recorded against all or a portion of the Property. Failure by Habitat to cure any such default within the time frame specified in this Section 600 shall constitute a "Default" hereunder and entitle the City to pursue all remedies set forth herein and in the exhibits hereto, and all others available at law or equity, and entitle the City to terminate this Agreement at their sole and exclusive discretion. Except as otherwise expressly provided in this Agreement, a failure or delay by any party in asserting any of its rights or remedies as to any default shall not operate as a Page 24 of 30 07-1368.001/69450 waiver of any default or any such rights or remedies or deprive any such party of its right to institute and maintain actions or proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies. If any party shall default prior to the City's conveyance to Habitat, and if the defaulting party has not completed the cure, remedy or correction of such default within thirty (30) days following written notice of the default given by the non defaulting party, then, subject to the provisions of Section 602, the non -defaulting party shall have the right to terminate this Agreement and, upon such termination, neither party shall have any further rights or obligations under this Agreement. 601. Specific Performance If either the Habitat or the City defaults under any of the provisions of this Agreement, the non -defaulting party shall serve written Notice of such Default upon the defaulting party. If the Default is not commenced to be cured by the defaulting Party within thirty (30) days of service of the Notice of Default, the non -defaulting Party at its option may institute an action for specific performance of the terms of this Agreement. The rights established in this Section are not intended to be exclusive of any other right, power or remedy, but each and every such right, power, and remedy shall be cumulative and concurrent and shall be in addition to any other right, power and remedy authorized herein or now or hereafter existing at law or in equity. 602. Termination 602.1. Termination by Habitat In the event that Habitat is not in Default under this Agreement and the City fails to convey the Property to the Habitat in accordance with its obligations hereunder by the time required hereunder, and such failure is not cured within the applicable time period after written demand by Habitat, then this Agreement may, at the option of Habitat, be terminated by Notice thereof to the City. From the date of the Notice of termination of this Agreement by Habitat to the City, and thereafter, this Agreement shall be deemed terminated, and there shall be no further rights or obligations between the parties, except that Habitat may pursue any remedies it has hereunder. 602.2. Termination by the City In the event that the City is not in Default under this Agreement and prior to the City Conveyance: a. Habitat (or any successor in interest) assigns this Agreement or any rights therein or in the Property in violation of this Agreement; or b. Habitat does not fulfill one or more of the Conditions Precedent on or before the time set forth in this Agreement and such failure is not caused by the City; or C. Habitat is otherwise in default of this Agreement and fails to cure such default within the time set forth above in Section 600; Page 25 of 30 07-1368.001/69450 then this Agreement and any rights of the Habitat or any assignee or transferee with respect to or arising out of this Agreement or the Project, shall, at the option of the City, be terminated by Notice thereof to Habitat. From the date of the Notice of termination of this Agreement by the City to Habitat, and thereafter, this Agreement shall be deemed terminated, and there shall be no further rights or obligations between the parties, except that the City may pursue any remedies they have hereunder. In the event of a Default by Habitat after the City Conveyance, the City may pursue all available remedies. 603. Damages If either the Habitat or the City defaults with regard to any of the provisions of this Agreement, the non -defaulting Party shall serve written Notice of such Default upon defaulting party. If the Default is not cured or commenced to be cured by the defaulting party within thirty (30) days after service of the Notice of Default, the defaulting party shall be liable to the other party for any damages caused by such Default. 604. Consequential Damages Without limiting the generality of the foregoing, Habitat shall not in any event be entitled to, and Habitat hereby waives, any right to seek incidental or consequential damages of any kind or nature from City arising out of or in connection with this Agreement, and in connection with such waiver Habitat is familiar with and hereby waives the provision of Section 1542 of the California Civil Code which provides as follows: "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR." 605. Applicable Law; Interpretation The laws of the State of California shall govern the interpretation and enforcement of this Agreement. This Agreement shall be interpreted as a whole and in accordance with its fair meaning and as though each party participated equally in its preparation. Titles and captions are for convenience of reference only and do not define, describe, or limit the scope or the intent of this Agreement or of any of its terms. 606. Acceptance of Service of Process In the event that any legal action is commenced by City against the Habitat, service of process on the Habitat shall be made by personal service upon the Habitat's Executive Director or in such other manner as may be provided by law. In the event that any legal action is commenced by the Habitat against the City, service of process on the City shall be made by personal service on the Secretary of the City, or in such other manner as permitted by law. Page 26 of 30 07-1368.00t169450 607. Rights and Remedies Are Cumulative Except as otherwise expressly stated in this Agreement, the rights and remedies of the parties are cumulative, and the exercise by any party hereto of one or more of such rights or remedies shall not preclude the exercise by said party, at the same or different times, of any other rights or remedies for the same default or any other default by any other ply- 608. Inaction Not A Waiver of Default Any failures or delays by any party in asserting any of its rights and remedies as to any Default shall not operate as a waiver of any Default or of any such rights or remedies, or deprive any such party of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies. VII. MISCELLANEOUS AND GENERAL PROVISIONS 700. Relationship of the City and Habitat The Parties agree that the Habitat, in the performance of this Agreement, shall act as and be an independent contractor and shall not act in the capacity of an agent, employee or partner of the City. It is hereby acknowledged that the relationship between the City and the Habitat is not that of a partnership or joint venture and that the City and the Habitat shall not be deemed or construed for any purpose to be the agent of the other. Habitat agrees to indemnify, hold harmless and defend the City from any claim made against the City arising from a claimed relationship of partnership or joint venture between the City and the Habitat with respect to the development, operation, maintenance or management of the Project, the improvements developed thereon by Habitat, or the sale of the Dwelling Units by Habitat to third party purchasers. 701. No Third Party Beneficiary This Agreement is made and entered into for the sole protection and benefit of the City, its successors and assigns, and Habitat, its permitted successors and assigns, and no other person or persons shall have any right of action hereon. The City and its successors and assigns are deemed the beneficiaries of the covenants contained herein, without regard to technical classification and designation and without regard to whether the City has been, remains or is an owner of any land or interest therein. 702. Non -liability of Officials, Employees, Agents and Contractors of the City No member, official, employee, agent or contractor of the City shall be personally liable to Habitat, or any successor in interest, in the event of any default or breach by the City or for any amount which may become due to Habitat or its successors, or any obligations under the terms of this Agreement. 703. Notices, Demands and Communications Any approval, disapproval, demand, document or other notice ("Notice") which either party may desire to give to the other party under this Agreement must be in writing and shall be given at the address of the party as set forth below, or at any other Page 27 of 30 07-1368.001/69450 address as that party may later designate by Notice. Any Notice given under this paragraph, whether personally or by mail, shall be deemed received only upon actual receipt by the intended party. TO CITY: City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attn: Director of Economic Development Copy to: City Attorney/City Counsel City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 TO HABITAT: Habitat for Humanity of Orange County 2200 S. Ritchey Street Santa Ana, California 92705 Copy to: Jackson Demarco Tidus Peckenpaugh Attn: Ron DeFelice 2030 Main Street Irvine, CA 92614 Formal notices, demands and communications between the City and Habitat shall be sufficiently given if dispatched by messenger or registered or certified mail, postage prepaid, return receipt requested, to the principal offices of the City and Habitat, as designated hereinabove. 704. Time for Acceptance of Agreement by the City This Agreement, when executed by Habitat and delivered to the City, must be authorized, executed and delivered by the City within thirty (30) days after the date of signature by Habitat. 705. Administration Following the approval of this Agreement by the City, this Agreement shall be administered by the Director, and the City shall maintain authority of this Agreement through the Director. The Director shall have the authority to issue interpretations, waive provisions and enter into amendments of this Agreement on behalf of the City so long as such actions do not substantially change the uses or development permitted hereby, or add to the costs of the City as specified herein or agreed to by the City Board, and such amendments may include extensions of time specified in the Schedule of Performance. All other waivers or amendments shall require the written consent of the City Board. 706. Cooperation Each party agrees to cooperate with the other in this transaction and, in that regard, to sign any and all documents which may be reasonably necessary, helpful or appropriate to carry out the purposes and intent of this Agreement. Except as specifically noted herein, whenever in this Agreement the consent of one party is required to an act of the other party, such consent shall not be unreasonably withheld or delayed. Page 28 of 30 07-1368.001/69450 707. Enforced Delay; Extension of Times of Performance In addition to specific provisions of this Agreement, performance by the parties hereunder shall not be deemed to be in default and all performance and dates shall be extended where delays or defaults are due to war; insurrection; strikes; lock -outs; riots; floods; earthquakes; fires; casualties; supernatural causes; acts of the public enemy; epidemics; quarantine restrictions; freight embargoes; lack of transportation; governmental restrictions; unusually severe weather; acts or the failure to act of the City or any other public or governmental agency or entity (except that acts or the failure to act of the City shall not excuse performance by the City); or any other causes beyond the reasonable control or without the fault of the party claiming an extension of time to perform. Notwithstanding anything to the contrary in this Agreement, an extension of time for any such cause shall be for the period of the enforced delay and shall commence to run from the time of the commencement of the cause, if the notice by the party claiming such an extension is sent to the other party within thirty (30) days of the commencement of the cause. Times of performance under this Agreement may also be extended in writing by the written mutual agreement of the City and Habitat. Habitat is not entitled pursuant to this Section 707 to an extension of time to perform because of past, present or future difficulty in obtaining suitable temporary or permanent financing for the Project. 708. Attorneys' Fees If any party commences an action against the other party to enforce any of the terms hereof or because of the breach by any party of any of the terms hereof, each part shall pay for its attorney. 709. Entire Agreement, Waivers and Amendments This Agreement integrates all of the terms and conditions mentioned herein or incidental hereto, and supersedes all negotiations or previous agreements between the parties with respect to all or any portion of the Property. All waivers of the provisions of this Agreement, or amendments hereto, must be in writing and signed by the appropriate authorities of the City and Habitat. Page 29 of 30 07-1368.001/69450 710. Severability If any term or provision of this Agreement shall be held invalid, illegal or unenforceable, the validity of all other terms and provisions hereof shall in no way be affected thereby. IN WITNESS WHEREOF, the parties hereto have executed this Disposition and Development Agreement as of the Effective Date set forth above. HABITAT FOR HUMANITY OF ORANGE CITY -DE HUNTRNGTON BEACH, a COUNTY, INC., a California non-profit public i ipal ration of the State of California benefit corporation By: 4Mayo print name - ITS: (circle one) Chairman/President/Vice President Clerk Date Signed: AND LIN print name ITS: (circle one) Secretary/Chief Financial Officer/Asst. Secretary - Treasurer Date Signed: INITU(I'ED AND APPROVED: Director of EgWomic Development y Manager APPROVED TO FORM:_ Ci Exhibits ,y A. Property Legal Description B. Grant Deed C. Schedule of Performance D. Scope of Work E. Certificate of Completion F. Declaration of Covenants, Conditions and Restrictions G. Insurance Requirements H. Escrow Instructions Page 30 of 30 07-1368.001/69450 Attorney _T�), / - 710. Severability If any term or provision of this Agreement shall be held invalid, illegal or unenforceable, the validity of all other terms and provisions hereof shall in no way be affected thereby. IN WITNESS WHEREOF, the parties hereto have executed this Disposition and Development Agreement as of the Effective Date set forth above. HABITAT FOR HUMANITY OF ORANGE COUNTY, INC., a California non-profit public benefit corporation BY print name ITS: (circle one) Chairma6/-Presideno ice President Date Signed: AND By: print name _ ITS: (circle one) Secretar Chief Fin ancial O�/Asst. Secretary - Treasurer Date Signed: (/M-�// If i CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California Mayor City Clerk INITIATED AND APPROVED: Director of Economic Development REVIEWED AND APPROVED: City Manager APPROVED AS TO FORM: City Attorney Exhibits A. Property Legal Description B. Grant Deed C. Schedule of Performance D. Scope of Work E. Certificate of Completion F. Declaration of Covenants, Conditions and RestrictionsE G. Insurance Requirements H. Escrow Instructions Page 30 of 30 07-1368.001/69450 Exhibits A. Property Legal Description B. Grant Deed C. Schedule of Performance D. Scope of Work E. Certificate of Completion F. Declaration of Covenants, Conditions and Restrictions G. Insurance Requirements H. Escrow Instructions Item 4. - 38 RB -2250- Exhibit A Property Legal Description HB -251- Item 4. - 39 LEGAL DESCRIPTION Real property in the City of Huntington Beach, County of Orange, State of California, described as follows, PARCEL 1 AS SHOWN ON EXHIBIT "A" ATTACHED TO LOT LINE ADJUSTMENT NO. 02-08, RECORDED JUNE 11, 2003.AS INSTRUMENT NO, 03-678490 OF OFFICIAL RECORDS OF ORANGE COUNTY, CALIFORNIA. APN: 157-341-22 FimtAmerican Title Item 4. - 40 HB -252- Exhibit B Grant Deed xB -253- Item 4. - 41 his Document was electronically recorded b Lawyers Title Newport Beach RECORDING REQUESTED BY: City of Huntington Beach Real Estate Services Division P.O. Box 190 / 2000 Main Street Huntington Beach, Ca 92648 WHEN RECORDED MAIL TO: City Clerk City of Huntington Beach P.O. Box 190 / 2000 Main Street Huntington Beach, Ca 92648 Recorded in Official Records, Orange Count om Dal ,Clerk-Recorde 18.00 2011000534332 04:06 m 10/25/11 93 401 G02 5 0.00 0.00 0.00 0.00 12.00 0.00 0.00 0.00 GRANT DEED THIS INSTRUMENT IS BEING RE -RECORDED TO CORRECT AN ERROR IN THE NAME OF THE GRANTEE OF INSTRUMENT NO.2011000484329, RECORDED ON SEPTEMBER. 29,2011. The correct Grantee name is Habitat for Humanity of Orange County, In�a California non-profit public benefit corporation. // Carchio, D� ted: °% . , 2011 Robi gar, Assistant 6 Clerk Dated: 0&44 , 2011 RECORDING REQUESTED BY: his Documen s electronically recorded byl Lam Itle Newport Beach 'City of _Huntington Beach Real Estate Services Division P.O. Box 190 / 2000 Main Street Huntington Beach, CA 92648 WHEN RECORDED MAIL TO: City Clerk City of Huntington Beach P.O. Box 190 / 2000 Main Street Huntington Beach, CA 92648 APN(s): Location: 7757 INCORPORATED AREA 7-_J3 Ll- Recorded in Official Records, Orange Count om Daly, Clerk-Recorde 2011000484329 04:19pm 09/29/11 3 401 G02 3 0.00 0.00 0.00 0.0o s.00 o.00 o.00 o.00 GRANT DEED I DOCUMENTARY TRANSFER TAX$ EXEMPT of FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, THE CITY OF HUNTINGTON BEACH hereby GRANT(S) to Habitat for Humanity, Inc., a California non-profit public benefit real property in the City of Huntington Beach, County of Orange, State of California follows: See Exhibit "A" for legal Dated:-1l "1�P�'� �(3 , 20_1�_ Dated: 20 APPROVED AS TO FORM BY THE OFFICE OF CITY ATTORNEY By: t l Assistant/ pu City Atto ney This document is solely for the official business. of the City of Huntington Beach, as contemplated under Government Code Sec. 6103 and should be recorded free of charge. Tax Exempt Government Agency CITY OF HUNTINGTON BEACH Joan Flynn, City Clerk !: = CITY CLERK `' ' MAIL TAX STATEMENTA TO PARTY SHOWN ON E FOLLOWING LINE as City Clerk ON of Huntington Beach P.O. Box 190 / 2000 Main Street Huntington Beach, CA 92648 , the 64914 Exhibit "A" LEGAL DESCRIPTION Real property in the City of Huntington Beach, County of Orange, State of California, described as follows; PARCEL 1 AS SHOWN ON EXHIBIT "A" ATTACHED TO LOT LINE ADJUSTMENT NO, 02-08, RECORDED JUNE 11, 2003.AS INSTRUMENT NO. 03-678490 OF OFFICIAL RECORDS OF ORANGE COUNTY, CALIFORNIA. APN: 157-341-22 firstAmerican Title State of MAA)fA- County f kA-kZe- _ On V—.-kN11 before me, Notary Public, personally appeared 05E (Ae—el*o who proved to me on the basis of satisfactory evidence to be the person whose name(s) subscribed to the within instrument and acknowledged to me that ��sfaeAhey xecuted the same in hi if kleif-�authorized capacity`shis/h ), and that by reMheir slgnatureO 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. P L. ESPARZA Commission # 1857021 a :.m z Notary Public - California ZZ Signature (Seal) My Commr E Orange Auy q, p 9 2013 State of County f On / before me, Notary Public, personally appeared who proved to me on the basis of satisfactory evidence to be the pers n whose name(i)OX4 subscribed to the within instrument and acknowledged to me that sh hey xecuted the same in her/ 'r authorized capacity*), and that b ei- the+r slgnatureA 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. P. L. ESPARZA Commission # 1857021 i Notary Public - California z Z ' Orange County D My Comm. Expires Aug 4, 2013 Signature BOE-502-A'iPl) REV. 11 (07-10) FOR RECORDER'S USE ONLY PRELIMINARY CHANGE OF OWNERSHIP REPORT I To be completed by the transferee (buyer) prior to a transfer of subject property, in accordance with section 480.3 of the Revenue and Taxation Code, A Preliminary Change of Ownership Reportmust be filed with each conveyance in the County Recorder's office for the county where the property is located. Please answer all questions in each section, and sign and complete the certification before fling. This form may be used in all 58 California counties. If a document evidencing a change in ownership is presented to the Recorder for recordation without the concurrent filing of a Preliminary Change of Ownership Report, the Recorder may charge an additional recording fee of twenty dollars ($20). NOTICE: The property which you acquired may be subject to a supplemental assessment in an amount to be determined by the County Assessor. Supplemental assessments are not paid by the title or escrow company at close of escrow, and are not included in lender impound accounts. You may be responsible for the current or upcoming property taxes even if you do not receive the tax bill. ESCROW NO.: 09270185-916-GKB TITLE NO.: 12757042-10 SELLER/TRANSFEROR: CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California BUYER/TRANSFEREE: HABITAT FOR HUMANITY OF ORANGE COUNTY, INC., a California non-profit public benefit corporation ASSESSOR'S PARCEL NUMBER: 157-341-22 STREET ADDRESS OR PHYSICAL LOCATION OF REAL PROPERTY: 18451 Patterson Lane, Huntington Beach CA LEGAL DESCRIPTION: MAIL PROPERTY TAX INFORMATION TO: HABITAT FOR HUMANITY OF ORANGE COUNTY. INC., a California non-profit public benefit corporation BUYER'S DAYTIME TELEPHONE NUMBER: This property is intended as my principal residence. If YES, please indicate the date of MO DAY YEAR o YES o NO occupancy or intended occupancy. PART 1. TRANSFER INFORMATION Please complete all statements YES NO o A. This transfer is solely between spouses (addition or removal of spouse, death of spouse, divorce settlement, etc.). o B. This transfer is solely between domestic partners currently registered with the California Secretary of State (addition or removal of partner, death of partner, termination settlement, etc.). o )x * C. This is a transfer between: o parent(s) and child(ren) o grandparent(s) and grandchild(ren). o '9• * D This transaction is to replace a principal residence by a person 55 years of age or older. Within the same county? o YES o NO o 9k * E. This transaction is to replace a principal residence by a person who is severely disabled as defined by Revenue and Taxation Code section 69.5. Within the same county? o YES o NO o 0 F. This transaction is only a correction of the name(s) of the person(s) holding title to the property (e.g., a name change upon marriage). If YES, please explain: o )6 G. The recorded document creates, terminates, or reconveys a lender's interest in the property. o H. This transaction is recorded only as a requirement for financing purposes or to create, terminate, or reconvey a security interest (e.g., cosignel). If YES, please explain: o p I. The recorded document substitutes a trustee of a trust, mortgage, or other similar document. 1. This is a transfer of property: o ]d 1. to/from a revocable trust that may be revoked by the transferor and is for the benefit of o the transferor, and/or o the transferor's spouse o registered domestic partner. o �K 2, to/from a trust that may be revoked by the creator/grantor/trustor who is also a joint tenant, and which names the other joint tenant(s) as beneficiaries when the creator/grantor/trustor dies. o 3. to/from an irrevocable trust for the benefit of the o creator/grantor/trustor and/or o grantor's/trustor's spouse o grantor's/trustor's registered domestic partner. o Ar, 4. to/from an irrevocable trust from which the property reverts to the creator/grantor/trustor within 12 years. o )1iL K. This property is subject to a lease with a remaining lease term of 35 years or more including written options. o lac L. This is a transfer between parties in which proportional interests of the transferor(s) and transferee(s) in each and every parcel being transferred remain exactly the same after the transfer. o M This is a transfer subject to subsidized low-income housing requirements with governmentally imposed restrictions. o X * N. This transfer is to the first purchaser of a new building containing an active solar energy system. * If you checked YES to statements C, D, or E, you may qualify for a property tax reassessment exclusion, which may allow you to maintain your previous tax base. If you checked YES to statement N, you may qualify for a property tax new construction exclusion. A claim form must be filed and all requirements met in order to obtain any of these exclusions. Contact the Assessor for claim forms. Please provide any other information that will help the Assessor understand the nature of the transfer. THIS DOCUMENT IS NOT SUBJECT TO PUBLIC INSPECTION (ocor) (10-03) (Rev. 10-10) BOE-502-A �P2) REV. 11 (07-10) PART 2. OTHER TRANSFER INFORMATION Check and complete as applicable. A. Date of transfer, if other than recording date: B. Type of transfer: Purchase o Foreclosure o Gift o Trade or exchange o Merger, stock, or partnership acquisition (Form BOE-100-13) o Contract of sale. Date of contract: Inheritance. Date of death: o Sale/leaseback o Creation of a lease o Assignment of a lease o Termination of a lease. Date lease began: Original term in years (including written options): Remaining term in years (including written options): o Other. Please explain: C. Only a partial interest in the property was transferred. o YES ;, NO If YES, indicate the percentage transferred: % PART 3. PURCHASE PRICE AND TERMS OF SALE Check and complete as applicable. A. Total purchase or acquisition price. Do not include closing costs or mortgage insurance. $ I !3 Down payment: $ Interest rate: % Seller -paid points or closing costs: $ Balloon payment: $ o Loan carried by seller o Assumption of Contractual Assessment* with a remaining balance of: $ * An assessment used to finance property -specific improvements that constitutes a lien against the real property. B. The property was purchased: o Through real estate broker. Broker name: Phone number: j ) 9: Direct from seller o From a family member o Other. Please explain: C. Please explain any special terms, seller concessions, financing, and any other information (e.g., buyer assumed the existing loan balance) that would assist the Assessor in the valuation of your property. PART 4. PROPERTY INFORMATION A. Type of property transferred o Single-family residence o Multiple -family residence. Number of units: o Other. Description: (i.e., timber, mineral, water rights, etc.) Check and complete as applicable. o Co-op/Own-your-own o Manufactured home o Condominium ';of Unimproved lot o Timeshare o Commercial/Industrial B. o YES �'' NO Personal/business property, or incentives, are included in the purchase price. Examples are furniture, farm equipment, machinery, club memberships, etc. Attach list if available. If YES, enter the value If the personal/business property: $ C. o YES yiO A manufactured home is included in the purchase price. If YES, enter the value attributed to the manufactured home: $ o YES o NO The manufactured home is subject to local property tax. If NO, enter decal number: D. o YES �4 NO The property produces rental or other income. If YES, the income is from: o Lease/rent o Contract o Mineral rights o Other: E. The condition of the property at the time of sale was: W. Good o Average o Fair o Poor CERTIFICATION I certify (or declare) under penalty of perjury under the laws of the State of California that the foregoing and all information hereon, including any accompanying statements or documents, is true and correct to the best of my knowledge and belief. This declaration is binding on each and SIGNATURE O r U R/TRA� DZTE OFFICER UA I L NAM OF BU R/TRANSFEREE/LEGAL EPRESENTATIVE/CORPORATE OFFICER (PLEASE PRINT) TITLE `i �1G`c.: c W E i l t CtZc i� r2 cc� � z ea { U(i " C�Elle1c. P , /-ezt fz r E-MAIL ADDRESS The Assessor's office may contact you for additional information regarding this transaction. (ocor)(10-03)(Rev. 10-10) CALIFORNIA•ACKNOWLEDGMENT aq • S,�C!�.;:�5!�S�S�4S.--�.';�5�,_-�.'.�.s�S,��-.,,_a��.•,� ��.•s�.,aS�q,��,:�.-�.'S�..aS�:.�.S,�sa.��!�:,zaa,�.,�J�C.���.•,�t aS�..,y�C�>,��.✓a� State of California County of [ _,oOCA1 V(_, On 0 nax Q� poi/ Date / personally appeared before me, P. L. ESPARZA Commission # 185J021 z ..m Notary Public -California z z Orange County NIComm. Expires Au 4, 2013 who proved to me on the basis of satisfactory evidence to be the persoro whose name& ' re subscribed to the within instrument and acknowledged to me that -iI&, s ey executed the same in-his/4e hei uthorized capacity es nd that by.hks he heir ignatureos on the instrument the persortg or the entity upon behalf of which the persor6) 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 kny ha o ial se Signature Place Notary Seal Above Signature of Not Pu is OPTIONAL Though the information below is not required by law, it may prove valuable to persons relying on the docum and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Document: Document Date: Signer(s) Other Than Named Above: Capacity(ies) Claimed by Signer(s) Signer's Name: ❑ Individual ❑ Corporate Officer — Title(s): ❑ Partner — ❑ Limited ❑ General ❑ Attorney in Fact - • ❑ Trustee Top of thumb here ❑ Guardian or Conservator ❑ Other: Signer Is Representing: Number of Pages: Signer's Name: ❑ Individual ❑ Corporate Officer — Title(s): ❑ Partner — ❑ Limited ❑ General ❑ Attorney in Fact ❑ Trustee ❑ Guardian or Conservator ❑ Other: Signer Is Representing: RIGHTTHUMBPRINT OF SIGNER •. • . - ©2007 National Notary Association • 9350 De Soto Ave., P.O. Box 2402 • Chatsworth, CA 91313-2402 • www.NationalNotary.org Item #5907 Reorder: Call Toll -Free 1-800-876-6827 Exhibit C Schedule of Performance Item 4. - 44 xs -2256- Schedule of Performance Action Date Action to be Completed B 1. Developer submits to City applications and materials required to obtain all land use and other entitlements, permits, and Sept. 21, 2011 approvals required for the Project within 15 days of Affordable Housing Transfer Agreement approval. 2. Transfer of land Title to Developer within 15 days of Affordable Sept. 21, 2011 Housing Transfer Agreement approval, 3. Provide access to construction loan funds no later than 15 days after Oct. 10, 2011 Building Permit Approvals. 4. Start Construction within 20 days of building permit issuance. Oct. 15, 2011 5. Complete construction within 4 months of construction start. Feb. 15, 2012 6. Record "Notice of Completion" within 30 days of Certificate of Occupancy by City. March. 15, 2012 FIB -257- Item 4. - 45 Exhibit D Scope of Work Item 4. - 46 HB -258- Scope of Work - 18451 Patterson Habitat for Humanity of Orange County Inc. will construct a 2 unit Mixed-Incoine home development on land adjacent to Beach Blvd. The proposal will utilize two single family homes on a single lot. The low-income home is designed as a 2 story 3 bedroom 2 bath home and the moderate -income home is a 4 bedroom 2 bath home with an attached 2 car garage. The approximate sq footage of the 3 bedroom home will be 1163 sq ft. and the single family 4 bedroom home will be 1341 sq. ft. All homes will incorporate cement lap siding, concrete tile roofs and a variety of green and energy saving measures to increase the efficiency and sustainability of the buildings. All structures and improvements will meet or exceed State and Local codes and ordinances. Energy and resource savings will be realized by the installation of on -demand hot water heating systems, sealed and tested heating duct systems, cellulose fiber moist blown -in insulation treated with borates to deter termites, third party Quality Insulation inspections, on -demand hot water recirculation pumps, and dual flush low flow toilets. Additional green features to be incorporated into the development will be, recycled sub base aggregate concrete and asphalt for roads and driveways, construction waste reduction measures, storm water infiltration systems to reduce the hydrocarbon run-off and recharge the groundwater aquifers. KB -259- Item 4. - 47 Exhibit E Certificate of Completion Item 4. - 48 BB -260- RECORDING REQUESTED BY ) AND WHEN RECORDED MAIL TO: ) City of Huntington Beach } 2000 Main Street ) Huntington Beach, CA 92648 ) Attn: City Clerk ) (Space above for Recorder's use) This document is exempt from recording fees pursuant to Government Code Section 27383. CERTIFICATE OF COMPLETION FOR CONSTRUCTION AND DEVELOPMENT A. On or about the CITY OF HUNTINGTON BEACH, a municipal corporation, hereinafter referred to as "City," entered into an Affordable Housing Agreement (the "Agreement") with HABITAT FOR HUMANITY OF ORANGE COUNTY, INC., a California nonprofit public benefit corporation (the "Developer"), which Agreement provides, inter alia, for the disposition and development of certain real property (the "Site") situated in the City of Huntington Beach, California, and more particularly described on Exhibit "A" attached hereto and made a part hereof by this reference. B. As required in the Agreement and as referenced in the Grant Deed recorded on , as Instrument No. in Book , Page of the Official Records of Orange County, California, and the Memorandum of Agreement recorded on , as Instrument No. in Book , Page of the Official Records of Orange County California, the City shall furnish the Developer with a Certificate of Completion for the site upon completion of construction of the Improvements required by the Agreement, which Certificate shall be in such form as to permit it to be recorded in the Recorder's Office of Orange County. C. The City has conclusively determined that the construction on the Site described hereinabove required by the Agreement and the Grant Deed has been satisfactorily completed. NOW, THEREFORE, the parties hereto certify as follows: I , As provided in the Agreement, the City does hereby certify that the construction of the Improvements on the Site has been fully and satisfactorily performed and completed. 2. The conditions and all rights and obligations under the Agreement as pertains to the Improvements are terminated, except as set forth or referenced in the Grant Deed and Memorandum of Agreement referred to in Recital B herein, 69666 HB -261- Item 4. - 49 3. Nothing contained in this instrument shall modify in any other way any other provisions of the Grant Deed or the Memorandum of Agreement. 4. After recordation of this Certificate of Completion, any person or entity then owning or thereafter purchasing, leasing, or otherwise acquiring any interest in the Improvements will not (because of such ownership, purchase, lease or acquisition) incur any obligation or liability under the Agreement, the Grant Deed or the Memorandum of Agreement, except that such party shall be bound by6 an and all of the covenants, conditions, and restrictions which survive such recordation. 5. This Certificate of Completion shall not constitute evidence of compliance with or satisfaction of any obligation of the Developer to any holder of a mortgage, or any insurer of a mortgage securing money loaned to finance the Improvements to the Property, nor any party thereof. This Certificate of Completion is not notice of completion as referred to in Section 3093 of the California Civil Code. 6. The Recitals above arc incorporated in full as part of the substantive text of this Certificate of Completion. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by and through their authorized officers the day of , 20_ HABITAT FOR HUMANITY CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California By: print name ITS: (circle one) Chairman/PresidentNice President AND By: print name ITS: (circle ore) Secretary/CitiefFinancial Officer/Asst. Secretary - Treasurer 69666 Director of Economic Development APPROVED AS TO FORM: 2 City Attorney Item 4. - 50 1-113 -262- Exhibit F Declaration of Covenants, Conditions, and Restrictions xB -263- Item 4. - 51 This Document was electronically recorded by Lawyers Title Newport Beach Recorded in Official Records, Orange County Tom Daly, Clerk -Recorder 11111111111111111111 NO FEE 2011000483564 02:04pm 09/29/11 RECORDING REQUESTED BY ) 0. 401 D02 9 AND WHEN RECORDED MAIL TO: ) o.00 0.00 0.00 0.00 24.00 0.00 0.00 0.00 City of Huntington Beach ) 2000 Main Street ) Huntington Beach, CA 92648 ) Attn: City Clerk ) V ,�,�� � (Space above for Recorder's use) This document is exempt from recording fees pursuant to Government Code Section 27383, DECLARATION OF CONDITIONS, COVENANTS AND RESTRICTIONS FOR PROPERTY (RESALE RESTRICTIONS) This Declaration Of Conditions, Covenants And Restrictions For Property (the "Declaration") is made as of�, : a.,5,�3p 6, 2-oll , 2011, by and between Habitat for Humanity of Orange County, Inc., a California non-profit benefit corporation (the "Covenantor"), and THE CITY OF HUNTINGTON BEACH, a California municipal corporation (the "City" or "Covenantee"). RECITALS A. Covenantor will be 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 6, 2011, the City Council approved the Affordable Housing Property Transfer Agreement whereby the City would transfer property to Habitat for Humanity in part to construct two single family dwelling units. The City further required that transfer of the property shall be as affordable housing as provided in the Orange County Median Income for a period of sixty years. The execution and recordation of this Declaration is intended to satisfy that condition. NOW, THEREFORE, the parties hereto agree and covenant as follows: 1. Affordability Covenants. Covenantor agrees for itself and its successors and assigns, and every successor to Covenantor's interest in the affordable unit, or any part thereof, that the property located at 18451 Patterson Lane, Huntington Beach, CA, which consists of two single family units, shall be designated as affordable and shall be held subject to this Declaration for sixty years from the date of Notice of Completion on each unit as follows: 07-1368.001/64928 (a) Unit 1 shall only be owned and occupied by Covenantor or by Very Low, or Low Income Household, which shall mean persons or families earning less than eighty percent (80%) of the Orange County median income, adjusted for household size appropriate for the property as determined by the City 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) Unit 2 shall only be owned and occupied by Covenantor or by Moderate Income Household, which shall mean persons or families earning less than one hundred twenty (120%) of the Orange County median income, adjusted for household size appropriate for the property as determined by the City 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. (c) The affordable units shall only be sold at an "Affordable Housing Cost" to Very Low, Low, or Moderate Income Households. Affordable Housing Cost shall mean the permitted gross sales price of the 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. (d) The term of this agreement shall commence on the date this document is recorded with the Orange County Recorder's Office and continue for sixty years ("Affordability Period"). The covenant contained in this Section 1 shall run with the affordable unit and shall automatically terminate and be of no further force or effect upon the expiration of the Affordability Period. 2. Transfer of affordable unit. No transfer of the affordable unit shall occur until the City determines (a) that the proposed purchaser intends to occupy the affordable unit as the proposed purchaser's principal residence, (b) that the proposed purchaser is a Very Low, Low, or Moderate Income Household, and (c) that the proposed transfer occurs at an Affordable Housing Cost. In the event that Covenantor (including successors and assigns) desires to sell the affordable 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 affordable 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 2 07-1368.001 /64928 submission of a completed form. If the City fails to approve or disapprove a submission within such fourteen (14) day period, the City shall be deemed to have approved such transfer in accordance with the foregoing. Prior to conveyance of the affordable unit, each approved purchaser shall also submit to the City an executed disclosure statement which certifies that the purchaser is aware that the purchaser buying the affordable unit may only sell the unit at an Affordable Housing Cost to a Very Low, Low, or Moderate Income Household, that the maximum permitted sales price may be less than fair market value and that the affordable unit must be owner -occupied at all times and cannot be rented or leased. 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 affordable 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 OF 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 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 DECLARATION IS TO PROVIDE HOUSING TO VERY LOW, LOW OR MODERTE INCOME HOUSEHOLDS AT AN AFFORDABLE HOUSING COST. o enantor's Initials 3. Covenantor shall include in the escrow instructions and Purchase and Sale Agreements with buyers a provision which requires each buyer to record a covenant which will run with the land and bind all successors -in -interest or assignees that will ensure that all subsequent buyers and occupants qualify as Very Low, Low, or Moderate Income Households. Said covenant shall remain in full force and effect for the Affordability Period as set forth in Section 1. 4. Non -Discrimination Covenants. Covenantor 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, 3 07-1368.001/64928 religion, sex, sexual orientation, creed, ancestry, national or ethnic origin, age, family or martial status, handicap or disability, in the sale, transfer, use, occupancy, tenure, or enjoyment of the affordable 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 affordable unit. Covenantor and its successors and assigns shall refrain from restricting the sale of the affordable unit on the basis of race, color, religion, sex, sexual orientation, creed, ancestry, national or ethnic origin, age, family or martial 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 martial 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 martial status, handicap or disability, in the sale, transfer, use, occupancy, tenure or enjoyment of the premises, nor shall the transferor 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 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 through 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 martial 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 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 4 07-1368.001/64928 occupancy of tenants, lessees, sublessees, subtenants, or vendees in the premises herein leased." 5. Covenants Do Not Intl2air Lien. No violation or breach of the covenants, conditions, restrictions, provisions or limitations contained in this Declaration shall defeat or render invalid or in any way impair the lien or charge of any mortgage or deed of trust or security interest. 6. 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. 7. Counterl2arts. 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. 8. Api2 icable 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. 5 07-1368.001/64928 (b) This Agreement shall be construed in accordance with the laws of the State of California. 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. COV N TO COVENANTEE: E-1a1�a��or �ur-tan►�t�o� 3voln�e �C•� �l f>,1.1r0(�:3) riot-�Y'� �_� CITY OF iJNTIN N BEACH, a C 10 is ipal corporation SIGNATURE PRINT NAME 66� sX,d,P, SIGNATURE APl6ectf 14CdA,440 -0 PRINT NAME City Clerk V INITIA D APPROVED: C-�;� Director of Economic Development/ Deputy City Manager D APPROVED: APPROVED AS TO FORM: City Attorney +/��- q 6 07-1368.001/64928 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of California County of /Cam r^ Orr'/ r9&-k-20 20& before me, Date personally appeared P. L. ESPARZA Commission # 1857021 z • `� Notary Public - California z z Orange County N1 Comm. Expires Aug 4, 2013 Place Notary Seal Above who proved to me on the basis of satisfactory evidence to be the person(s�whose name/ re subscribed to the within instrument and acknowledged to me that - he the xecuted the same in h+ thei authorized capacit les , and that byhisfhe(neTvsignaturee soon the instrument the person s , or the entity upon behalf of which the persol (s 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 and fficial I. Signature ` Signature of ry 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 9 Title or Type of Documen 77��Cil)f1711.43 trot.`? 5 , �v7ZtCilZ�i� tS /�'Li`�/ Document Date:2I-I Number of Pages: Signer(s) Other Than Named Above: Capacity(ies) Claimed by Signer(s) Signer's Name: ❑ Individual ❑ Corporate Officer — Title(s): ❑ Partner — ❑ Limited ❑ General ❑ Attorney in Fact ❑ Trustee ❑ Guardian or Conservator ❑ Other: Signer Is Representing RIG_ HTTHUMBPRINT OF SIGNER .p of thumb here Signer's Name: ❑ Individual ❑ Corporate Officer — Title(s): ❑ Partner — ❑ Limited ❑ General ❑ Attorney in Fact ❑ Trustee ❑ Guardian or Conservator ❑ Other: Signer Is Representing: RIGHTTHUMBPRINT OF SIGNER ©2007 National Notary Association • 9350 De Soto Ave., P.O. Box 2402 • Chatsworth, CA 91313-2402 • www.NationalNotary.org Item #5907 Reorder: Call Toll -Free 1-800-876-6827 State of Count of On, Z3 ' bef' a me, lQ <l Notary Public, personally appeared nwho proved tome on the basis of satisfactory evidence to be the per,&Qn(s) whose name(s) i r:"subscribed to the within instrument and acknowledged to me that he/she he )executed the same in his/h r/their authorized capacity(ies), and that by his/h r/their signature s) on the instrument the person(s), or the entity upon behalf of which the person(s) 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. Le # �#A Oran" Cour�r _My Conn. E Signature ���� (Seal) State of _ County of On before me, , Notary Public, personally appeared , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) 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. Signature (Seal) Exhibit "A" LEGAL DESCRIPTION Real property In the City of Huntington Beach, County of Orange, State of California, described as follows: PARCEL 1 AS SHOWN ON EXHIBIT "A" ATTACHED TO LOT UNE ADJUSTMENT NO. 02-08, RECORDED JUNE 11, 2003.AS INSTRUMENT NO. 03-678490 OF OFFICIAL RECORDS OF ORANGE COUNTY, CALIFORNIA, APN: 157-341-22 FirstAmerican Title Exhibit G Insurance Requirements Item 4. - 60 Hs -272- Resolution No. 2008-63 INSURANCE REQUIREMENTS PLEASE GIVE THESE INSURANCE REQUIREMENTS TO YOUR INSURANCE AGENT Minimum Limits of Insurance City Council Resolution 2008-63 requires submittal of certificates of insurance evidencing the following minimum limits with a California admitted carrier with a current A.M. Best's Rating of no less than A:VII: 1, General Liability: $1,000,000 per occurrence for bodily injury, personal Injury and property damage. If Commercial General Liability Insurance or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to this project/location or the general aggregate limit shall be twice the required occurrence limit. "Claims made" designation is only acceptable for professional or pollution liability insurance. The City of Huntington Beach its officers, elected or appointed officials, employees,_ agents and volunteers must be named as certificate holder and as additional insured by separate attached endorsement. (This wording must be exact.) 2. Workers' Compensation and Employer's Liability: State statutory limits of $250,000 bodily Injury by disease, policy limit, and $100,000 bodily injury each employee for accident or disease per occurrence. If you have no employees, you must sign a Declaration of Non -employee Status form available from the City. In lieu of a certificate of insurance, a certificate of consent to self -insure issued by the California Director of Industrial Relations is also acceptable. 3. Automobile liability of $1,000,000 per occurrence for bodily injury, personal injury and property damages. The City of Huntington Beach, its officers, elected or appointed officials, employees, agents and volunteers must be named as certificate holder and as additional insured by separate attached endorsement. (This wording must be exact). Deductibles, Self -Insured Retentions, or Similar Forms of Coveraae Limitations or Modifigations Any deductibles, self -insured retentions or similar forms of coverage limitations or modifications, must be declared to and approved by the City of Huntington Beach. Subcontractors Contractor shall include all subcontractors as insured under its policies or shall furnish separate certificates and endorsements for each subcontractor. All coverages for subcontractors shall be subject to all of the requirements stated herein. Description of Work to be Performed The staff -contact and purpose of the evidence of coverage must be identified. 06-399/5103 PLEASE FORWARD THIS NOTICE TO YOUR INSURANCE AGENT. FOR ASSISTANCE, PLEASE CONTACT RISK MANAGEMENT. HB -273- Item 4. - 61 Exhibit H Escrow Instructions Item 4. - 62 HB _27/4_ ESCROW INSTRUCTIONS 1. Opening of Escrow. For purposes of this Agreement, the Escrow shall be deemed opened on the date Escrow Holder shall have received an executed counterpart of this Agreement from both Buyer and City ("Opening Date"). Escrow Holder shall notify Buyer and City, in writing, of the date Escrow is opened and the Closing Date, as defined in Paragraph 3.4, below. In addition, Buyer and City agree to execute, deliver, and be bound by any reasonable or customary supplemental escrow instructions of Escrow Holder, or other instruments as may reasonably be required by Escrow Holder, in order to consummate the transaction contemplated by this Agreement. Any such supplemental instructions shall not conflict with, amend, or supersede any portion of this Agreement, If there is any inconsistency between such supplemental instructions and this Agreement, this Agreement shall control. 2. Buyer's Costs. Buyer shall pay all recording fees, documentary transfer taxes, escrow fees, policies of title insurance, and any other costs connected with the closing of this transaction. 3. Documents and Assurances. Buyer and City shall each, diligently and in good faith, undertake all actions and procedures reasonably required to place the escrow in condition for closing as and when required by the Agreement. Buyer and City agree to execute and deliver all further documents and instruments reasonably required by the escrow holder or Title Company. City shall deliver or cause to be delivered to escrow holder in time for delivery to Buyer at the closing an original ink signed Grant Deed, duly executed and in recordable form, conveying fee title to the Property to Buyer. 4. Close of Escrow. Prior to close of escrow and as a condition precedent to this property conveyance Buyer shall first record the Notice of Affordability Restrictions on Transfer of Property (attached hereto) with the Conditions, Covenants & Restrictions ("CC&Rs") limiting transfer of property to very low, low or moderate income household as defined in the Disposition and Development Agreement that shall run with the land. "Close of Escrow" shall be defined as the date that the Grant Deed conveying the Property to Buyer, is recorded in the Official Records of Orange County, California. This Escrow shall close within sixty (60) days of the Opening Date ("Closing Date"). 5. Conditions of Title. It shall be a condition to the Close of Escrow and a covenant of City that title to the Property shall be conveyed to Buyer by City by the Grant Deed, subject only to the following Approved Conditions of Title ("Approved Condition of Title"): 5.1. Matters affecting the Approved Condition of Title created by or with the written consent of Buyer. 5.2. Exceptions which are disclosed by the Report described in Paragraph 6.1 hereof and which are approved or deemed approved by Buyer in accordance with Paragraph 3.5.1 hereof. 11-2927Ex. H HB -2755- Item 4. - 63 City covenants and agrees that during the term of this Escrow, City will not cause or permit title to the Property to differ fiom the Approved Condition of Title described in this Paragraph. Any liens, encumbrances, easements, restrictions, conditions, covenants, rights, rights -of -way, or other matters affecting the Approved Condition of Title which may appear of record or be revealed after the date of the Report described in Paragraph 3.5.1 below, shall also be subject to Buyer's approval and must be eliminated or ameliorated to Buyer's satisfaction by City prior to the Close of Escrow as a condition to the Close of Escrow for Buyer's benefit. 5.3 Title Policy. Title shall be evidenced by the willingness of the Title Company to issue its CLTA Standard Form Policy or Binder of Title Insurance ("Title Policy") in the amount of the Purchase Price showing title to the Property vested in Buyer subject only to the Approved Condition of Title. 6. Conditions to Close of Escrow. 6.1. Conditions to Buyer's Obligations. The Close of Escrow and Buyer's obligation to consummate the transaction contemplated by this Agreement are subject to the satisfaction of the following conditions for Buyer's benefit on or prior to the dates designated below for the satisfaction of such conditions: (a) Preliminary Title Report and Exceptions. Immediately after escrow is opened as provided herein, Buyer agrees to cause Title Company to issue a Preliminary Title Report relating to the Property. Within fifteen (15) days after escrow has been opened, the Buyer will cause Title Company to issue an Amendment to Escrow Instructions, which indicates those title exceptions that the Buyer will accept. City will have ten (10) days after receipt of such amendment to review and approve it. In the event of non -approval, escrow will fail and each party will instruct Title Company to cancel the escrow. (b) Representations, Warranties, and Covenants of City. City shall have duly performed each and every agreement to be performed by City hereunder and City's representations, warranties, and covenants set forth in Paragraph 4 shall be true and correct as of the Closing Date. (c) No Material Changes. At the Closing Date, there shall have been no material adverse changes in the physical or financial condition of the Property. (d) Inspections and Studies. On or before thirty (30) days after Opening Date ("Due Diligence Period"), Buyer shall have approved the results of any and all inspections, investigations, tests and studies (including, without limitation, investigations with regard to governmental regulations, engineering tests, soil and structure investigation and analysis, seismic and geologic reports) with respect to the Property (including all structural and mechanical systems and leased areas) as Buyer may elect to make or obtain. The failure of Buyer to disapprove said results on or prior to the expiration of the Due Diligence Period shall be deemed 2 11-2927Es. H Item 4. - 64 1­113 _2276_ to constitute Buyer's approval of the results. The cost of any such inspections, tests and studies shall be home by Buyer. During the term of this Escrow, Buyer, its agents, contractors and subcontractors shall have the right to enter upon the Property, at reasonable times during ordinary business hours, to make any and all inspections and tests as may be necessary or desirable in Buyer's sole judgment and discretion, Buyer shall use care and consideration in connection with any of its inspections. Buyer shall indemnify and hold City and the Property harmless from any and all damage arising out of, or resulting from the negligence of Buyer, its agents, contractors and/or subcontractors in connection with such entry and/or activities upon the Property. Buyer will provide City, upon request, at no cost, copies of any Buyer's investigation reports obtained by the Buyer, if any. (e) Council Approval. The completion of this transaction, and the escrow created hereby, is contingent upon the specific acceptance and approval of the City by action of the City Council. (f) The property is sold in its present condition as of the date of acceptance subject to the Buyer's investigation rights. 6.2. Conditions to City's Obligation. For the benefit of City, the Close of Escrow shall be conditioned upon the occurrence and/or satisfaction of each of the following conditions (or City's waiver thereof, it being agreed that City may waive any or all of such conditions): (a) Buyer's Obligations. Buyer shall have timely performed all of the obligations required by the terms of this Agreement to be performed by Buyer, and (b) Buyer's Representations. All representations and warranties made by Buyer to City in this Agreement shall be true and correct as of the Close of Escrow. 6.3. Deposits by City. At least one (1) business day prior to the Close of Escrow, City shall deposit or cause to be deposited with Escrow Holder the Grant Deed conveying the Property to Buyer duly executed by City, acknowledged and in recordable form. 6.4. Deposits by Buyer. Buyer shall deposit, or cause to be deposited with Escrow Holder, the funds which are to be applied toward the payment of the Purchase Price in the amounts and at the times if designated herein (as reduced or increased by the prorations, debits and credits hereinafter provided). 6.5. Costs and Expenses. The cost and expense of the Title Policy attributable to CLTA coverage shall be paid by Buyer. The escrow fee of Escrow Holder shall be paid by Buyer. Buyer shall pay all documentary transfer taxes, if any, payable in connection with the recordation of the Grant Deed. The amount of such transfer taxes shall not be posted on the Grant Deed, but shall be supplied by separate affidavit. Buyer shall pay the Escrow Holder's 3 1 I-2927Ex. If HB -277- Item 4. - 65 customary charges to Buyer and City for document drafting, recording, and miscellaneous charges. If, as a result of no fault of Buyer or City, Escrow fails to close, Buyer small pay all of Escrow Holder's fees and charges. Penalties for prepayment of bona fide obligations secured by any existing Deed of trust or mortgage shall be waived pursuant to Civil Code Procedures Section 1265.240. 6.6. Disbursements and Other Actions by Escrow Holder, Upon the Close of Escrow, the Escrow holder shall promptly undertake all of the following in the manner indicated: 6.6.1. Recording. Cause the Grant Deed and any other documents, which the parties hereto may mutually direct, to be recorded in the Official Records of Orange County, California, in the order set forth in this subparagraph. Escrow Holder is instructed not to affix the amount of documentary transfer tax (if any) on the face of the Deed, but to supply same by separate affidavit. 6.6.2. Funds. Disburse from funds deposited by Buyer with Escrow Holder toward payment of all items chargeable to the account of Buyer, pursuant thereto in payment of such costs, and disburse the balance of such funds, if any, to Buyer. 6.6.3. Documents to Buyer. Deliver when issued, the Title Policy to Buyer. 6.6.4. Pay demands of existing lienholders. Escrow Holder is hereby authorized and instructed to cause the reeonveyance, or partial reeonveyance, as the case may be, of any such monetary exceptions to Buyer's title to the Property at or prior to the Close of Escrow. 11-2927Ex.1i Item 4. - 66 1-1.13 -2278- his Document was electronicall recorded b Lawyers Title Newport Beach Recorded in Official Records, Orange Count om DaE+, Clerk-Recorde Recording Requested By: 15.00 Redevelopment Agency of the 3 401 NO3 4 2011000484328 04:19pm 09/29111� City of Huntington Beach 0.00 0.00 0.00 0.00 9.00 0.00 0.00 0.00 2000 Main Street Huntington Beach, CA 92648 Attn: Economic Development Dept/Housing SPACE ABOVE THIS LINE FOR RECORDER'S USE NOTICE OF AFFORDABILITY RESTRICTIONS ON TRANSFER OF PROPERTY NOTICE IS HEREBY GIVEN by City of Huntington Beach owner(s) of the property located at 18451 Patterson Lane, Huntington Beach, CA 92646 and more particularly described in Exhibit "A" attached hereto (the "Property"), that: 1. A "Declaration of Conditions, Covenants and Restrictions for Property" recorded on 9/29/2011 as Instrument Number 2011000483564 , in the Office of the County Recorder of the County of Orange, California (the "Resale Restrictions"). The Resale Restrictions were amended by the above Declaration of Conditions, Covenants and Restrictions for Property recorded concurrently with this Notice. Among other things, said Resale Restrictions provide that the Property may be sold to a "Low or Very Low or Moderate Income Household" at an "Affordable Housing Cost" as those terms are defined in said Resale Restrictions. 2. The Property may only be sold to "Low or Very Low or Moderate Income" households at an "Affordable Housing Cost," as those terms are further defined in Affordable Housing Restrictions, 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%) downpayment. The mortgage interest rate will be the prevailing Fannie Mae 5 11-292769647 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. The effect of relying on prevailing interest rates to determine the Affordable Housing Cost is to make the resale price of the Property sensitive to interest rates. For example, if interest rates rise, the resale price will fall, and if interest rates fall, the resale price will rise. This could result in the Affordable Housing Cost decreasing below the original purchase price. 3. The affordability and resale restrictions imposed on the Property by the Resale Restrictions as amended by the Deed of Trust are scheduled to expire sixty (60) years from the date this Notice is recorded (the "Expiration Date"), which date is approximately '9J29/2071 This Notice is recorded for the purpose of providing notice only and it in no way modified the provisions of the Resale Restrictions as amended by the Deed of Trust. Habitat for Humanity of Orange County, Inc., a California non -Profit benef�iit� corporation Dated: 9/23 20 Buyer' signature PRINT NAME _ --ce, V" P Buyer' signature PRINT NAME 6 11-292769647 ACKNOWLEDGMENT State of California } )ss. County of Orange ) On ` 1 �' , 20 (� , before me, G�� Ck E, k k"'A a notary public, personally appeared 3havM E S �"'i tt ovi /1d-0 who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) i ar subscribed to the within instrument and acknowledged to me that he/sh they executed the same in his/her/ eir authorized capacity(ies), and that by his/her/t it s'' nature(s) on the instrument the person(s , f the entity upon behalf of which the person(s) acted, executed the instrument. I certify under penalty of perjury under the laws of the State of California that the foregoing is true and correct. WITNESS my hand and official seal SEAL] (Signature of Notary Public) E k. Notary Peblie - Canton Orange C"" tg-* Comm. f0wes M 26.205 07-1368.001/69647 Page 7 of 7 EXHI IT All that certain real property situated in the County of Orange, State of California, described as follows: Parcel 1 of City of Huntington Beach Lot Line Adjustment No. 02-08 in the City of Huntington Beach, County of Orange, State of California, as described document recorded June 11, 2003 as Instrument No. 2003000678490, in the Office of the County Recorder of said County. Excepting therefrom 75 percent of all oil, minerals, gas and other hydrocarbon substances in, on and under said land, as reserved in the Deed from Tarver Montgomery and wife, to L. G. Patterson and wife, recorded December 17,1943 in Book 1216, Page 259 of Official Records. Assessor's Parcel Number: 157-341-22 CLTA Preliminary Report Form - Modified (11-17-06) La Title, Lawyers Title Company )yy qs 4100 Newport Place Dr, Suite 120 y Newport Beach, CA 92660 Phone: (949) 724-3141 Fax: (714) 459-7217 Email: gukim@ltic.com September 30, 2011 CITY OF HUNTINGTON BEACH Economic Development Department 2000 Main Street Huntington Beach, CA. 92648 Attn: Luis Gomez, Project Manager Escrow No.: 09270185-916-GKB Property Address: 18451 Patterson Lane, Huntington Beach, CA e,Ai i; ti71 e O l I We are pleased to inform you that the transaction as referenced above was closed on 09/29/2011. The following documentation is being provided to you for your disposition: • Settlement Statement • Original recorded Grant Deed • Original recorded Notice of Affordability Restriction on Transfer of Property • Original recorded CC& R for Property • Original Option Agreement signed by Habitat for Humanity of Orange County, Inc. We trust that this transaction has been handled to your entire satisfaction, and we hope that we may have the pleasure of serving you again in the near future. Should you have any questions regarding the items enclosed, please feel free to contact the undersigned. Sin erely, race Kim Commercial Escrow Officer Phone:(949) 724-3141 Fax: (714) 459-7217 e-mail: gukim@ltic.com Enclosures LAWYERS TITLE COMPANY 4100 Newport Place Dr, Suite 120, Newport Beach, CA 92660 Phone: (949) 724-3140 Fax: (949) 724-3173 Sellers Closing Statement Final Escrow No: 09270185 - 916 GKB Close Date: 09/29/2011 Proration Date: Seller(s): CITY OF HUNTINGTON BEACH Property: 18451 Patterson Lane Huntington Beach, CA Date Prepared: 09/30/2011 .. Description'"� Debit Credit TOTAL CONSIDERATION: Total Consideration 1.00 Closing Fund 748,437.00 PRORATIONS AND ADJUSTMENTS: Construction Funds to Buyer less closing cost 745,705.00 TITLE AND ESCROW CHARGES: CLTA Owners Policy liability amount $456,000.00 to Lawyers Title Co. 1,581.00 Escrow Charge to Lawyers Title Company 1,125.00 RECORDING FEES: Recording Notice of Affordability to Lawyers Title 15.00 Recording Deed to Lawyers Title 12.00 Sub Totals 748,438.00 748,438.00 Balance Due From Seller Totals 748,438.00 748,438.00 Printed by Grace Kim on 09/30/2011 - 10:42:14AM Page 1 of 1 LAWYERS TITLE COMPANY 4100 Newport Place Dr, Suite 120, Newport Beach, CA 92660 Phone: (949) 724-3140 Fax: (949) 724-3173 Sellers Closing Statement Final Escrow No: 09270185 - 916 GKB Close Date: 09/29/2011 Proration Date: Date Prepared: 09/30/2011 Seller(s): CITY OF HUNTINGTON BEACH Property: 18451 Patterson Lane Huntington Beach, CA Description n��_ c,:, ., �` _Debit Credit'- �h TOTAL CONSIDERATION: Total Consideration 1.00 Closing Fund 748,437.00 PRORATIONS AND ADJUSTMENTS: Construction Funds to Buyer less closing cost 745,705.00 TITLE AND ESCROW CHARGES: CLTA Owners Policy liability amount $456,000.00 to Lawyers Title Co. 1,581.00 Escrow Charge to Lawyers Title Company 1,125.00 RECORDING FEES: Recording Notice of Affordability to Lawyers Title 15.00 Recording Deed to Lawyers Title 12.00 Sub Totals 748,438.00 748,438.00 Balance Due From Seller Totals 748,438.00 748,438.00 Printed by Grace Kim on 09/30/2011 - 10:42:14AM Page 1 of 1 RECORDING REQUESTED BY: City of Huntington Beach Real Estate Services Division P.O. Box 190 / 2000 Main Street Huntington Beach, CA 92648 WHEN RECORDED MAIL TO: City Clerk City of Huntington Beach P.O, Box 190 / 2000 Main Street Huntington Beach, CA 92648 APN(s): Location: INCORPORATED FOR A VALUABLE CONSID`� RATIO_Nr (tEeiplkgwhich is hereby . REDEVELOPMENT AGENCY OF'AiE CITY OF I hereby GRANT to Habitat for Huma -Inc., a California nc real property in the City-ofgt�ach, County of Oran follows: 7 Ex. B Dated: See Exhibit "A" DOCUMENTARY TRANSFER TAX $ EXEMPT Si naSi re of Declarant or Agent determining taxDeclarant or A ent determinin tax Anowledged, /NNGTON BEACH profit public benefit Corporation, the State of California, described as description ' r AS TO FORM BY THE OFFICE OF CITY ATTORNEY F; l', Assistant/Deputy City Attorney rhs document is solely for the official business of the City of Huntington Beach, as contemplated under Government Code Sec. 6103 and should be recorded free of charge. Tax Exempt Government Agency CITY OF HUNTINGTON BEACH Joan Flynn, City Clerk By: 1 { CITY CLERK MAIL TAX STATEMENTS TO PARTY SHOWN ON THE FOLLOWING LINE Clty Clerk City of Huntington Beach P O Box 190 / 2000 Main Street Huntington Beach CA 92648 Item 4. - 42 HB -254- Project Name. APN(s): CALIFORNIA ALL-PURPOSE ACKNOWLEDGEMENT State of County of On before me, / personally Date Name & Title of Officer (Le, Jane Doe otary Public) appeared Name(s) of Signer(s) ❑ personally known to me -OR- ❑ proved to me on the basis o satisfactory evidence to be the person(s) whose name(s) is/a e°°subscribed to the within instrument and acknowledg to me that he/she/they executed the same in his/her/their a horized capacity(ies), and that by his/her/their signatures) n the instrument the person(s), or the entity upon behalf of " ich the person(s) acted, executed the instrument, WITNESS my han and official seal. Signature of Notary ----------------------------------------6 Though the data below is not required bylaw, it may prove removal and reattachm Description of Attached Document Title or Type of Document Document Date: Signer(s) Other Than Named Above: Capacity(les) Claimed by Seller(s) Signer's Name ❑ Individual r` ❑ Corporate Officer Titie(s): ❑ Partner ❑ Limited ❑ Attorney-in-FacZ ❑ Trustee Guardian Conservator ❑ Others Signer Is Ex. B I General Right Thumbprint of Signer r/YAL-----------m---------m ---- ------------- to persons relying on the document and could prevent fraudulent s form to another document. Number of Pages C; ' q /77i Signer's NameWL ❑ Individual ❑ Corporate Officer Title(s): ❑ Partner ❑ Limited ❑ Attorney -in -Fact ❑ Trustee ❑ Guardian or conservator ❑ Other Signer Is Representing: xs -255- Item 4. - 43 Exhibit F Declaration of Covenants, Conditions, and Restrictions KB -263- Item 4. - 51 RECORDING REQUESTED BY ) AND WHEN RECORDED MAIL TO: ) City of Huntington Beach ) 2000 Main Street ) Huntington Beach, CA 92648 ) Attn: City Clerk ) (Space above for Recorder's use) This document is exempt from recording fees pursuant to Government Code Section 27383. DECLARATION OF CONDITIONS, COVENANTS AND RESTRICTIONS FOR PROPERTY (RESALE RESTRICTIONS) This Declaration Of Conditions, Covenants And Restrictions;'For Property (the "Declaration") is made as of , 20 , h31 and between (the "Covenantor"), and THE corporation (the "City") and HUNTINGTON BEACH, a pub. City and Agency will be referred CITY N B r Al body corporate and politic as the "Covenantee". r° CH, a `li�fornia municipal NCY OF' HE CITY OF "Agency" ). Collectively, the A. Covenantor will be 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". d` B. On Agency/City Council approved Redevelopment Agency would ti single family dwelling units. T property shall be as affordable h period of sixty years. The exec that condition. ./ / , the Redevelopment th92Disposition and Development Agreement whereby the rtsfer property to Habitat for Humanity in part to construct two Redevelopment Agency further required that transfer of the using as provided in the Orange County Median Income for a tion and recordation of this Declaration is intended to satisfy NOW, THEREFORE, the parties hereto agree and covenant as follows: 1. A°ffordability Covenants. Covenantor agrees for itself and its successors and assigns, and"every successor to Covenantor's interest in the affordable unit, or any part thereof, that the property located at , which consists of two 07-1368.00]/Ex. r Item 4. - 52 HB -264- single family units, shall be designated as affordable and shall be held subject to this Dec for sixty years from the date of Notice of Completion on each unit as follows: (a) Unit 1 shall only be owned and occupied by Covenaftor or by (Very Low, Low, or Moderate) Income Households", which shall mean persons or families earning less than C_%) 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 Departrnen!/of Housing & Urban Development or established by the State of California, pursuant to Health and Safety Code Section 50093, or a successor statute. p' (b) Unit 2 shall only be owned " (Very Low, Low, or Moderate) In persons or families earning less than median income, adjusted for household size appropriat Agency based on statistics published by the United S Development or established by the State of California Section 50093, or a successor statute. and occupied by Covenantor or by came ouseholds", which shall mean ( __.___%) of the Orange County e for the property as determined by the fates Department of Housing & Urban pursuant to Health and Safety Code (c) The affordable unit shall only be sold at an "Affordable Housing Cost" to (Very Low, Low, or Moderate) Income Households, Affordable Housing Cost shall mean the permitted gross sales price of the 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. (d) The term of this agreement shall commence on the date this document is recorded with the Orange County Recorder's Office and continue for sixty years ("Affordability Period"). The covenant contained in this Section I shall run with the affordable unit and shall automatically terminate and ,b`e of no fiuther force or effect upon the expiration of the Affordability Period. 2. Transfer of affordable unit. No transfer of the affordable unit shall occur until the City determines (a) that the proposed purchaser intends to occupy the affordable unit as the proposed purchaser' /ypr incipal residence, (b) that the proposed purchaser is a (Very Low, Low, Moderate) Income Household, and (c) that the proposed transfer occurs at ail Affordable Housing Cost. In the event that Covenantor (including successors and assigns) desires to sell the affordable unit, Covenantor shall send written notice thereof to the City at the following address: 1 City of Huntington Beach 2000 Main Street I 1 /' \+ ; ✓� ' \ ri Huntington Beach, CA 92648 �'� '� � Lf 1 _. 0 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 07-1368.00[/Fx. F 2 HB -2165- Item 4. - 53 proposed purchaser's intent with respect to his/her/its residency of the affordable 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 a 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 fo 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. If the City fails to approve or disapprove a submission within such fourteen (14) day period, the City shall be deemed to have approved such transfer in accordance with the foregoing. Prior to conveyance of the affordable unit, each approved purchaser shall also submit to the City an executed disclosure statement which certifies that the purchaser is aware that the purchaser buying the affordable unit may only sell the unit at an Affordable Housing Cost to a (Very Low, LowyModerate) Income Household, that the maximum permitted sales price may be less than/fair market value and that the affordable unit must be owner -occupied at all times and cannot be rented or leased. 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 affordable 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 OF COVENANTOR UNDERSTAND THAT THE 10 DETERMINATION OF THE AFFORDABLE HOUSING COST CAN BE MADE ONLY AT TmftIME OF THE PROPOSED TRANSFER, TAKING INTO CONSIDERATION INTEREST RATES, THE TERMS OF SALE OFFERED TO AND THE ECONOMIC CIRCUMSTANCES OF THE PROPOSED a PURCHASER AND OTHER FACTORS THAT CANNOT BE ACCURATELY PREDICTED)/ AND THAT THE TRANSFER PRICE PERMITTED HEREUNDER MAY RE LESS THAN THE FAIR MARKET VALUE OF( THE PROPERTY AND MAY NOT INCREASE OR DECREASWIN THE SAME MANNER AS OTHER SIMILAR REAL PROPERTY WHICH IS NOT ENCUMBERED BY THIS RESTRICTION. COVENANTOR AND EACH SUCCESSOR, HEIR, OR ASSIGq OF COVENANTOR FURTHER ACKNOWLEDGES THAT AT ALL TIMES IN SETTING THE TRANSFER PRICE, THE PRIMARY OBJECTIVE OF THE CITY AND THIS DECLA TION IS TO PROVIDE HOUSING TO _ (VERY LOW, LOW, MODERTE) INCOME - HOUSEHOLDS AT AN AFFORDABLE HOUSING COST. \ Covenantor's Initials 3. Covenantor shall include in the escrow instructions and Purchase and Sale Agreements with buyers a provision which requires each buyer to record a covenant which will run with the land and bind all successors -in -interest or assignees that will ensure that all 3 07-1368.00UEx. F Item 4. - 54 HB -266- subsequent buyers and occupants qualify as (Very Low,,tow, or Moderate) Income households. Said covenant shall remain in Rill force and effect for the Affordability Period as set forth in Section 1. 4. Non -Discrimination Covenants. Covenantor covenants by and for itself, its successors and assigns, and all persons claiming under or through them thaethere 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 origin4age, family or martial status, handicap or disability, in the sale, transfer, use, occupancy, tenure, or enjoyment of the affordable unit, nor shall Covenantor itself or any person claiming udder 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 affordable unit. Covenantor and its successors and assigns shall refrain from restricting the sale of the affordable unit on the basis of race, color, religionVsex, sexual orientation, creed, ancestry, national or ethnic origin, age, family or martial statusViiandicap 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 martial/status, handicap or -disability, in the sale, transfer, use, occupancy, tenure or enjoyment ofithe 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 group9f persons on account of race, color, religion, sex, sexual orientation, creed, ancestry, national o ethnic origin, age, family or martial status, handicap or disability, in the sale, transfer, use,occupancy, tenure or enjoyment of the premises, nor shall the transferor 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 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 tinder or through him or her, and this lease is made and accepted upon and subject to the following conditions: 07-136$,001/Ex. F "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 4 i 1-113 -267- Item 4. - 55 ethnic origin, age, family or martial 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 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." 5. Covenants Do Not Impair Lien. No violation or/'breach of the covenants, conditions, restrictions, provisions or limitations contained in this Declaration shall defeat or render invalid or in any way impair the lien or charge of aiiy mortgage or deed of trust or security interest. %V 6. 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 small be in force and effect, without regard4o whether the Covenantee is or remains an owner of any land or interest therein to which sudh 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 enfoi;ced at law or in equity at any time in perpetuity. 7. 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. 8. 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. I< 07-1368.0011Ex. E Item 4. - 56 HB -268- (b) This Agreement shall be construed in accordance with the laws of the State of California. / ' 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: CITY OF HUNTINGTON BEACH, a California municipal corporation SIGNATURE Mayor PREtv'T NAB!£ j 1 /J City Clerk SIGNATURE THE/REDEVELOPMENT AGENCY OF THE 0 PRINT NAME CITY OF HUNTINGTON BEACH, a public body corporate and politic B y: Deputy Executive Director INITIATED AND APPROVED: Planning Director REVIEWED AND APPROVED: City Manager APPROVED AS TO FORM: City Attorney / Agency Counsel 5 6 07-1363.001/Et. r 1-1B -269- Item 4. - 57 STATE OF CALIFORNIA ss. COUNTY OF ORANGE On , 200, before me, the undersigned, a Notary Public in and for said State, personally appeared personally known to me (or 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 lie/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument the persons or the entities upon behalf of which the person acted executed the instrument. rr, WITNESS my hand and official seal. Signature of Notary Public (SEAL) STATE OF CALIFORNIA COUNTY OF ORANGE On , 200_, before me, the undersigned, a Notary Public in and for said State, personally appeared personally known to me (or 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 persons or the entities upon behalf of which the person acted executed the instrument. WITNESS my hand�and official seal. Signature of Notary Public °- (SEAL) 7 07-1365.001/Ex. F Item 4. - 58 I-1B -270- 07-1368.001/Ex. F EXHIBIT HB -271- Item 4. - 59 Insur, Item 4. - 60 HB -272- 710. Severability If' any term or provision of this Agreement shall be held invalid, illegal or unenforceable, the validity of all other terms and provisions hereof shall in no way be affected thereby. IN WITNESS WHEREOF, the parties hereto have executed this I)kliositi.on and Development Agreement as of the Effective Date set_Eot=tlratiave: - " - HABITAT FOR HUMANITY OF ORANGE THE REDEVELOPMENT AGENCY OF THE COUNTY, INC., a California non-profit public CITY OF HUNTINGTON BEACH, a public. benefit corporation body of the State of California By:L�' Chairperson prin acne /�,,Agency Clerk ITS: (circle o,ze) residenUCFC) lir•���%r��,fi`��� y CITY OF HUNTINGTON I AND municipal corporation of tie 00. By: o - C print name ITS: (circle one) Secretarhief Financial Officer r Vice President 14Psq 6ra&y-C4L)1yL/ T� a Exhibits A. Property I-egal B. Grant Deed C. Schedule ofPer D. Scope of Worlu 07-1368.001i68912 Mayor City EACH, a State of California INITIATEFJ AND APPROVED: Deputy Executive Director / Director of Economic Development APPROVED: ve Director / City Manager APPROVED AS TO FORM: `«Agency Counsel / City Attorney- w E. Certificate o Completion ztiollF. Declaration of Covenants, Conditions and Restrictions G. Insurance Requirements nce Ii. Escrow Instructions Page 30 of 30 1 f NOTICE OF COMPLIANCE WITH CONDITIONS ON TRACT/PARCEL MAP AND AUTHORIZATION FOR RELEASE FOR RECORDING TO: CITY CLERK DATE: 91 FROM: PLANNING & BUILDING DEPARTMENT TRACT NO. PARCEL MAP NO. _ 04 PARK AND RECREATION FEES PAID: YES $ COS, (-O 24 ❑NO DEVELOPER: OAcbl'r/.1- Fes' for: colt Hess Director of Planning & Building City ®f Huntington Beach 2000 Main Street ♦ Huntington Beach, CA 92648 (714) 536-5227 ® www.huntingtonbeachca.gov F817 t909.P���. ® Office of the City Clerk Joan L. Flynn, City Clerk September 2011 First American Title Company Attn: Hugo Tello 10535 Foothill Blvd., Suite 282 Rancho Cucamonga, CA 91730 (909) 257-3956 Attn: Hugo Tello, Title Officer Re: Parcel Map No. 2011-104— Order No. OSA-3690318 (29) — 18451 Patterson Lane The City Engineer of the City of Huntington Beach approved Parcel Map No. 2011-104 and authorized the release of said map for processing by the County. Enclosed with the Parcel Map are the Declaration of Covenants Conditions Restrictions and Reservation of Easements for same property. Please record the Parcel Map first: then complete Map recordation information on page 1 of the CC &R's and record that document. After recording, please return a duplicate Mylar, 2 prints, and a digital file disk of the Parcel Map to Bob Milani, Senior Civil Engineer, Department of Public Works, P.O. Box 190, Huntington Beach, CA 92648. Jo . Flynn, CMC City lerk JF:pe Attachments Received by: CLERIC'S OFFICE RETAINS COPY FOR FILE Date: Name of Company C �— Phone g:\followup\parcel\parcelmp2003.doc procecSiam Cities: Anjo,Japan ® Waitakere, New Zealand °Aa CITY OF H �J1� 'II GTON BEACH W1iroINTERDEPARTMENTAL COMMUNICATION TO: Patty Esparza, Deputy City Clerk FROM: Bob Milani, Senior Civil Engineer DATE: September 12, 2011 SUBJECT: Parcel Map 2011-104 Address is 18451 Patterson Lane THE ATTACHED ORIGINAL PARCEL MAP IS READ'FOR RECORDATION. Please Contact the Title Company listed below and request that they pick-up the attached Parcel Map. At the time of pick-up please forward a copy of this memo and the attached Parcel Map and request that they obtain all necessary County of Orange signatures and record it for their client. Title Company Name: First American Title Company Street Address: 10535 Foothill Blvd Suite 282 City, State, and Zip code: Rancho Cucamonga, CA 91730 Title Officer's name: Hugo Tello Telephone Number: (909) 257-3956 Commitment/Order Number: OSA-3690318 (29) Client: habitat For humanity Mr. Mark Korando Address: 2200 South Ritchey Street, Santa Ana, CA 92705 Telephone Number: 714-434-6200 ext 214 Engineer: Leonard Stiles Surveying,Leonard Stiles,P.L.S. Regarding Property at 18451 Patterson Lane Upon the City Clerks receipt of the recorded copy, please send a copy of the Parcel Map to: 1. County of Orange Resources &Development Management Department 300 N. Flower Street Santa Ana, CA 92702-4048 Attn: Brad Tippett, Orange County Surveyor's Office 714-834-3726 2. HB Planning Department Attn: Jill Arabe 714-374-5357 3. HB Public Works Department Attn: Bob Milani 714-374-1735 GA\Engineering Division\DEVELOPMENT\Maps and LLAs\City Clerk Memo's\PM 2011-104 memo to City Clerk(18451 Patterson)9-9-11 bsm.doc RECORDING REQUESTED BY: FIRST AMERICAN TITLE COMPANY WHEN RECORDED, MAIL TO: JACKSON, DeMARCO & TIDUS &PECKENPAUGH (RJD) 2030. Main Street, Suite 1200 Irvine, CA 92614 (Space Above for Recorder's Use) DECLARATION OF COVENANTS, CONDITIONS,RESTRICTIONS AND RESERVATION OF EASEMENTS FOR PATTERSON AT HUNTINGTON CONDOMINIUMS 205 6-99886\CCRS\1047088.5 9/28/11 TABLE OF CONTENTS FOR DECLARATION OF COVENANTS, CONDITIONS, RESTRICTIONS AND RESERVATION OF EASEMENTS FOR PATTERSON AT HUNTINGTON CONDOMINIUMS DESCRIPTION PAGE ARTICLE I DEFINITIONS AND INTERPRETATION.....................................................2 1.1 DEFINITIONS..................................................................................................2 1.2 INTERPRETATION.........................................................................................6 ARTICLE II USE RESTRICTIONS......................................................................................6 2.1 SINGLE FAMILY RESIDENCE.....................................................................6 2.2 FURTHER SUBDIVISION.............................................................................. 6 2.3 RESALE AND RENTAL.................................................................................7 2.4 BUSINESS AND COMMERCIAL ACTIVITIES...........................................7 2.5 NUISANCES .................................................................................................... 8 2.6 SIGNS ......................................................................................:........................9 2.7 PARKING AND VEHICULAR RESTRICTIONS..........................................9 2.8 ANIMAL REGULATIONS............................................................................ 10 2.9 ANTENNA AND SATELLITE DISH RESTRICTIONS.............................. 10 2.10 TRASH............................................................................................................ 11 2.11 IMPROVEMENTS......................................................................................... 11 2.12 MECHANICS' LIENS ................................................................................... 12 2.13 DRAINAGE.................................................................................................... 12 2.14 WATER SUPPLY SYSTEM.......................................................................... 13 2.15 VIEW OBSTRUCTIONS............................................................................... 13 2.16 RIGHTS OF DISABLED ............................................................................... 13 2.17 TEMPORARY BUILDINGS ......................................................................... 13 2.18 COMMON AREA .......................................................................................... 13 2.19 DRILLING...................................................................................................... 13 2.20 POST TENSION CONCRETE SLABS ......................................................... 14 ARTICLE III DISCLOSURES.............................................................................................. 14 3.1 NO REPRESENTATIONS OR WARRANTIES........................................... 14 3.2 EFFECT OF EXPANSIVE SOIL................................................................... 14 3.3 ELECTRIC POWER LINES, COMMUNICATIONS FACILITIES ANDHUMAN HEALTH............................................................................... 14 -i- 2056-99886\CCRS\1047088.5 9/28/11 3.4 PROPERTY LINES........................................................................................ 15 3.5 EARTHQUAKES, GENERALLY................................................................. 15 3.6 COMMERCIAL/INDUSTRIAL ZONE DISCLOSURE............................... 16 3.7 MOLD.............................................................................................................. 16 3.8 ADDITIONAL PROVISIONS ....................................................................... 16 ARTICLE IV THE ASSOCIATION..................................................................................... 17 4.1 GENERAL DUTIES AND POWERS............................................................ 17 4.2 MEMBERSHIP............................................................................................... 17 ARTICLE V REPAIR AND MAINTENANCE................................................................... 18 5.1 MAINTENANCE STANDARDS .................................................................. 18 ARTICLE VI PROPERTY EASEMENTS AND RIGHTS................................................... 19 6.1 EASEMENTS ................................................................................................. 19 6.2 RIGHTS OF ENTRY......................................................................................20 ARTICLE VII INSURANCE........:.........................................................................................21 7.1 INSURANCE FOR COMMON AREA..........................................................21 7.2 INSURANCE FOR UNITS ............................................................................21 ARTICLE VIII DESTRUCTION OF IMPROVEMENTS ......................................................21 8.1 RESTORATION OF THE PROPERTIES .....................................................21 8.2 INTERIOR DAMAGE ...................................................................................22 8.3 SALE OF PROPERTIES AND RIGHT TO PARTITION.............................22 8.4 NOTICE TO OWNERS AND FIRST MORTGAGEES................................22 ARTICLE IX EMINENT DOMAIN.....................................................................................22 9.1 DEFINITION OF TAKING............................................................................22 9.2 CONDEMNATION OF COMMON AREA...................................................22 9.3 CONDEMNATION OF EXCLUSIVE USE AREA 9.4 CONDEMNATION OF CONDOMINIUMS.................................................22 9.5 PORTIONS OF AWARDS IN CONDEMNATION NOT COMPENSATORY FOR VALUE OF REAL PROPERTY.....................:....23 9.6 NOTICE TO OWNERS AND MORTGAGEES............................................23 ARTICLE X RIGHTS OF MORTGAGEES........................................................................23 ARTICLE XI ENFORCEMENT...........................................................................................23 11.1 ENFORCEMENT OF GOVERNING DOCUMENTS ..................................23 11.2 DISPUTE WITH DECLARANT PARTIES ..................................................24 11.3 NO ENHANCED PROTECTION AGREEMENT ........................................28 11.4 COVENANT REGARDING PROCEEDS.....................................................28 ARTICLE XII DURATION AND AMENDMENT...............................................................28 -ii- 2056-99886\CCRS\1047088.5 9/28/11 12.1 DURATION....................................................................:...............................28 12.2 TERMINATION AND AMENDMENT........................................................28 ARTICLE XIII GENERAL PROVISIONS .............................................................................29 13.1 NO PUBLIC RIGHT OR DEDICATION......................................................29 13.2 NOTICES........................................................................................................29 13.3 CONSTRUCTIVE NOTICE AND ACCEPTANCE......................................29 ARTICLE XIV DECLARANT'S RIGHTS AND RESERVATIONS.....................................30 14.1 CONFLICTS...................................................................................................30 14.2 CONSTRUCTION RIGHTS ..........................................................................30 14.3 SALES AND MARKETING RIGHTS ..........................................................30 14.4 CREATING ADDITIONAL EASEMENTS..................................................30 14.5 USE RESTRICTION EXEMPTION..............................................................30 14.6 ASSIGNMENT OF RIGHTS .........................................................................30 14.7 AMENDMENT OF RIGHT TO REPAIR LAW PROVISIONS...................30 14.8 USE OF PROPERTIES ......................................:...........................................30 14.9 DECLARANT APPROVAL OF ACTIONS..................................................31 14.10 SPECIAL POWER OF ATTORNEY.............................................................31 -iii- 2056-99886\CCRS\1047088.5 9/28/11 DECLARATION OF COVENANTS, CONDITIONS, RESTRICTIONS AND RESERVATION OF EASEMENTS FOR PATTERSON AT HUNTINGTON CONDOMINIUMS THIS DECLARATION is made by Habitat for Humanity of Orange County, Inc., a California non-profit public benefit corporation. The capitalized terms used in the Preamble are defined in Article I. PREAMBLE: A. Declarant is the owner of real property located in the City of Huntington Beach, Orange County, California, described as follows: Parcel 1 of Parcel Map No. 2011-104, recorded in Book , Pages of Parcel Maps, in the Office of the County Recorder of Orange County. B. Declarant intends to create a "condominium project," as defined in Section 1351(f) of the California Civil Code, to subdivide the Properties as authorized by Section 66427 of the California Government Code into "condominiums" as defined in Section 783 of the California Civil Code, and to impose mutually beneficial restrictions under a general plan of improvement for the benefit of all the Condominiums created pursuant to the Davis-Stirling Common Interest Development Act. As part of said subdivision, portions of the Properties will be designated as Units and Common Area. C. The Properties are to be held, conveyed, encumbered, leased, used and improved subject to the limits, restrictions, reservations, rights, easements, conditions and covenants in this Declaration, all of which are in furtherance of a plan for subdividing, maintaining, improving and selling the Condominiums in the Properties. All provisions of this Declaration are imposed as equitable servitudes on the Properties. All covenants, conditions, restrictions and easements in this Declaration shall run with and burden the Properties, and be binding on and for the benefit of all of the Properties and all Persons acquiring any interest in the Properties. D. Declarant and its successors and assigns covenant that each undivided interest in the Common Area, the appurtenant Membership in the Association, all easements conveyed therewith and fee title to the respective Unit conveyed therewith shall not be separated or separately conveyed, and each such undivided interest, Membership and easement shall be deemed to be conveyed or encumbered with its respective Unit even though the description in the instrument of conveyance or encumbrance may refer only to the Unit. This restriction on severability of the component interests of the Condominiums shall not extend beyond the period for which the right to partition the Properties is suspended in accordance with Section 1359 of the California Civil Code. Any conveyance by an Owner of a Condominium, or any portion thereof, shall be presumed to convey the entire Condominium together with a Membership in the 2056-99886\CCRS\1047088.5 9/28/11 Association. ARTICLE I DEFINITIONS AND INTERPRETATION 1.1 DEFINITIONS. Unless otherwise expressly provided, the following words and phrases when used in this Declaration have the following meanings. 1.1.1 AHPTA. AHPTA means the Affordable Housing Property Transfer Agreement entered into between the City and Habitat For Humanity Of Orange County, Inc., concerning the Properties that are the subject of this Declaration, a copy of which is maintained in the office of the City Clerk of the City of Huntington Beach. . 1.1.2 Association. Association means Patterson at Huntington Homeowners Association, an unincorporated association (formed pursuant to Title 3 of the California Corporations Code), its successors and assigns. The Association is an "association" as defined in Section 1351(a) of the California Civil Code. 1.1.3 Building. Building means the structure containing the two Units. 1.1.4 City. City means the City of Huntington Beach, California, and its various departments, divisions, employees and representatives. 1.1.5 Close of Escrow. Close of Escrow means the date on which a deed is Recorded by Declarant to convey a Condominium to an Owner. 1.1.6 Common Area. Common Area means real or personal property designated by the Declarant as Common Area and therefore made subject to the Restrictions. Any references in this Declaration to Common Area are references to the Common Area as a whole and to portions thereof. The Common Area consists of Parcel 1 of Parcel Map No. 2011- 104, and all Improvements thereon, but excepting the Units as shown on the Condominium Plan. The Common Area includes, without limitation, the Building, all gas, water and waste pipes, all sewers, and other utility installations wherever located (except the outlets thereof when located within the Units), and the airspace above Parcel 1 Parcel Map No. 2011-104, all driveways, walkways and landscaping on those areas of the Properties which are not defined as part of the Units. Each Owner of a Condominium shall own an undivided one-half('/2) interest as tenant-in- common in the Common Area. The Common Area constitutes the undivided interest-in- common in a portion of the real property, in accordance with California Civil Code Section 1351(f). 1.1.7 Common Wall. Common Wall means the common walls separating any element of one Owner's Condominium from any element of the other Owner's Condominium, including fences or walls separating Exclusive Use Area yards. 1.1.8 Condominium. Condominium means an estate in real property as defined in California Civil Code Section 1351(f). A Condominium consists of an undivided fee 2056-99886\CCRS\1047088.5 9/28/11 simple ownership interest in the Common Area in the Properties together with a separate ownership interest in fee in a Unit and all easements appurtenant thereto. 1.1.9 Condominium Plan. Condominium Plan means the Recorded plan, as currently in effect, for the Properties, consisting of (a) a description or survey map of the Properties or portion thereof which shall refer to or show monumentation on the ground, (b) a three-dimensional description of the Properties or portion thereof, one or more dimensions of which may extend for an indefinite distance upwards or downwards in sufficient detail to identify the Common Area and each Unit, and (c) a certificate consenting to the Recordation thereof signed and acknowledged by the record owner of fee title to the Properties or portion thereof, by either the trustee or the beneficiary of each Recorded deed of trust and the Mortgagee of each Recorded Mortgage encumbering the Properties or portion thereof. 1.1.10 County. County means Orange County, California, and its various departments, divisions, employees and representatives. 1.1.11 Declarant. Declarant means Habitat for Humanity of Orange County, Inc., a California non-profit public benefit corporation, its successors and any Person to which it shall have assigned any of its rights by an express written assignment. As used in this Section, "successor" means a Person who acquires Declarant or substantially all of Declarant's assets by sale, merger, reverse merger, consolidation, sale of stock or assets, operation of law or otherwise. Declarant shall determine in its sole discretion the time, place and manner in which it discharges its obligations and exercises the rights reserved to it under this Declaration. Declarant is a "builder" as described in California Civil Code Section 1375. 1.1.12 Declaration. Declaration means this instrument as amended from time to time. 1.1.13 Exclusive Use Area. Exclusive Use Area means the Common Area over which exclusive easements are reserved for the benefit of specified Owners, including for porch and yard purposes and internal and external telephone wiring designed to serve a single Unit but located outside the boundaries of that Unit, in accordance with California Civil Code Section 1351(i). The approximate locations of the Exclusive Use Areas (excluding the telephone wiring) are shown and assigned in the Condominium Plan; however, the as-built location of the Improvements constituting the Exclusive Use Areas shall control. 1.1.14 Family. Family means natural individuals, related or not, who live as a single household in a Residence. 1.1.15 First Mortgage. First Mortgage means a Mortgage with first priority over other Mortgages on a Condominium. 1.1.16 First Mortgagee. First Mortgagee means the Mortgagee of a First Mortgage. 1.1.17 Fiscal Year. Fiscal Year means the fiscal accounting and reporting period of the Association. 2056-99886\CCRS\1047088.5 9/28/11 1.1.18 Governing Documents. Governing Documents means this Declaration and any Supplemental Declarations. 1.1.19 Improvement. Improvement means any structure and any appurtenance thereto. 1.1.20 Include, Including. Whether capitalized or not, include and including means "includes without limitation" and"including without limitation,"respectively. 1.1.21 Maintain, Maintenance. Whether capitalized or not, maintain and maintenance mean "maintain, repair and replace" and "maintenance, repair and replacement," respectively; provided however, that maintain or maintenance shall not include repair and replace(ment) where the context or specific language of this Declaration provides another meaning. 1.1.22 Maintenance Guidelines. Maintenance Guidelines means any current written guidelines provided by Declarant, setting forth procedures and standards for the maintenance and operation of Common Area or the Condominiums. Maintenance Guidelines include any maintenance manual initially prepared at Declarant's direction and containing recommended frequency of inspections and maintenance activities for components of the Common Area or pertaining to a Condominium. 1.1.23 Membership. Membership means the voting and other rights, privileges, and duties established in the Governing Documents for members of the Association. 1.1.24 Mortgage. Mortgage means any Recorded document, including a deed of trust, by which a Condominium or other portion of the Properties is hypothecated to secure performance of an obligation. 1.1.25 Mortgagee. Mortgagee means a Person to whom a Mortgage is made, or the assignee of the Mortgagee's rights under the Mortgage by a recorded instrument. For purposes of this Declaration, the term Mortgagee shall include a beneficiary under a deed of trust. 1.1.26 Mortgagor. Mortgagor means a person who has .mortgaged his property. For purposes of this Declaration, the term Mortgagor shall include a trustor under a deed of trust. 1.1.27 Official Records. Official Records means the Official Records of Orange County, California. 1.1.28 Owner. Owner means the Person or Persons, including Declarant, holding fee simple interest to a Condominium. Each Owner has a Membership in the Association. The term "Owner" includes sellers under executory contracts of sale but excludes Mortgagees. 2056-99886\CCRS\1047088.5 9/28/11 1.1.29 Person. Person means a natural individual or any legal entity recognized under California law. When the word "person" is not capitalized, the word refers only to natural persons. 1.1.30 Properties. Properties means the land described in Paragraph A of the Preamble. The Properties are a "condominium project" as defined in Section 1351(o of the California Civil Code. The Properties are a "common interest development" as defined in Section 1351(c) of the California Civil Code. Any references in this Declaration to the Properties are references to the Properties as a whole and to portions thereof. 1.1.31 Record or File. Record or File means, with respect to any document, the entry of such document in the Official Records. 1.1.32 Residence. Residence means the residential element of the Unit, which is the portion designed and intended for use and occupancy as a dwelling by a single Family. The Residence does not include the garage element or the Exclusive Use Areas. 1.1.33 Right to Repair Law, Right to Repair Law means Division 2, Part 2, Title 7 (commencing with Section 895) of the California Civil Code. 1.1.34 Right to Repair Law Claim. Right to Repair Law Claim means any claim brought by one or more Owners or by the Association against one or more Declarant Parties (as defined in Section 11.2) on any design construction defect matters that are governed by the Right to Repair Law. 1.1.35 Supplemental Declaration. Supplemental Declaration means an instrument Recorded by Declarant against all or a portion of the Properties in order to supplement, modify, or clarify conditions, covenants, restrictions or easements established under this Declaration. A Supplemental Declaration may affect one or more Condominiums and Common Area. Declarant may Record a Supplemental Declaration so long as Declarant owns all of the real property to be encumbered by the Supplemental Declaration. A Supplemental Declaration may modify this Declaration as it applies to the property encumbered by the Supplemental Declaration. A Supplemental Declaration may not revoke the covenants, conditions, restrictions, reservations of easements, or equitable servitudes in this Declaration as the same pertain to the real property originally covered by this Declaration. 1.1.36 Unit. Unit means a separate interest in space, in accordance with Section 1351(f) of the California Civil Code. Each Unit is a separate freehold estate, as separately shown, labeled and designated in the Condominium Plan. Each Unit consists of a residential element and a garage element in the spaces bounded by and contained within the unfinished surfaces of the perimeter walls, floors, ceilings, windows and doors of the Building. Each Unit includes the entry doors and the glass portions of the windows and sliding glass doors at Unit boundaries, and those portions of the gas, water and waste pipes, kitchen and bath fixtures, ducts, chutes, conduits, wires and other utility installations that extend into the Unit (and exclusively serve the Unit). Each Unit includes the garage door and all garage door hardware and opener (if any). The vertical and horizontal boundaries of each Unit shall be as described in the Condominium Plan. In interpreting deeds, this Declaration and the Condominium Plan, the 2056-99886\CCRS\1047088.5 9/28/11 actual boundaries of each Unit shall be deemed to extend to the interior unfinished surfaces of the walls, floors, and ceilings encompassing the residential element and garage element of the Unit, as constructed or reconstructed in substantial accordance with the original plans for the Unit. The foregoing interpretation shall apply notwithstanding any description expressed in the deed, the Condominium Plan or the Declaration, regardless of settling or lateral movements of Improvements, and regardless of variances between Unit boundaries shown in the Condominium Plan or deed and those of the Improvement. 1.2 INTERPRETATION. 1.2.1 General Rules. This Declaration shall be liberally construed to effectuate its purpose of creating a uniform plan for creating and operating a residential condominium development and maintaining the Common Area. As used in this Declaration, the singular includes the plural and the plural the singular. The masculine, feminine and neuter each includes the other, unless the context dictates otherwise. 1.2.2 Articles, Sections and Exhibits. The Article and Section headings are inserted for convenience only and may not be considered in resolving questions of interpretation or construction. Unless otherwise indicated, any references in this Declaration to articles, sections or exhibits are to Articles, Sections and Exhibits of this Declaration. The locations and dimensions of any Improvements depicted on any Exhibits attached hereto and to any Supplemental Declaration are approximate only and the as-built location and dimension of any such Improvements shall control. 1.2.3 Priorities and Inconsistencies. If there are conflicts or inconsistencies between this Declaration and a Supplemental Declaration or the Condominium Plan, then the provisions of this Declaration shall prevail, although the documents shall be construed to be consistent with one another to the extent possible. If there are conflicts or inconsistencies between this Declaration and the AHPTA, then the provisions of the AHPTA shall prevail, although the documents shall be construed to be consistent with one another to the extent possible. 1.2.4 Severability. The provisions of this Declaration are independent and severable. A determination of invalidity, partial invalidity or unenforceability of any. one (1) provision of this Declaration by a court of competent jurisdiction does not affect the validity or enforceability of any other provisions of this Declaration. 1.2.5 Statutory References. All references made in this Declaration to statutes are to those statutes as in effect from time to time, or to subsequently enacted replacement statutes. ARTICLE II USE RESTRICTIONS The Properties shall be held, used and enjoyed subject to the following restrictions and subject to the exemptions of Declarant set forth in the Governing Documents. 2056-99886\CCRS\1047088.5 9/28/11 2.1 SINGLE FAMILY RESIDENCE. The Residence shall be used as a dwelling for a single Family and for no other purpose. 2.2 FURTHER SUBDIVISION. Except as otherwise provided in this.Declaration, no Owner may physically or legally subdivide the Owner's Condominium in any manner, including dividing such Owner's Condominium into time-share estates or time-share uses. Except as provided in this Declaration, there shall be no judicial partition of the Common Area, or any part thereof, for the term of this Declaration, nor may Declarant, any Owner or any other Person acquiring any interest in any Condominium seek judicial partition. No Condominium may be partitioned or subdivided without the written approval of the First Mortgagee on that Condominium, if any, and the City. 2.3 RESALE AND RENTAL. Nothing in this Declaration shall be deemed to prevent an Owner from selling the Owner's Condominium (subject to all applicable affordable housing restrictions separately imposed by Declarant and by the City). No Owner may rent or lease any portion of the Condominium, except for temporary interim rental to a proposed purchaser during the performance of the purchaser's "sweat equity" obligation with Declarant. 2.4 BUSINESS AND COMMERCIAL ACTIVITIES. 2.4.1 Generally. No Owner or other occupant of the Properties may undertake any activity on any Unit or on any portion of the Common Area for business or commercial purposes including manufacturing, mercantile, storage, vending, auctions, transient occupancy (such as vacation rental, hotel, or time-share), vehicle or equipment repair, or other non-residential purposes. Such activities are prohibited whether they are engaged in full- or part- time, whether they are for-profit or non-profit, and whether they are licensed or unlicensed. 2.4.2 Exceptions. This Section shall not be interpreted to prohibit any of the following: (a) The hiring of employees or contractors to provide maintenance, construction or repair of any Improvement consistent with this Declaration or any Supplemental Declaration; (b) Exercise by Declarant of any rights reserved to Declarant under Article XIV; (c) The operation of small home-based service businesses that comply with all of the following: (i) The operator of the business lives in the Residence on a permanent, full-time basis; (ii) When conducted in the Properties, business activities take place solely inside the Unit; 2056-99886\CCRS\1047088.5 9/28/11 (iii) The activity complies with all laws, regulations and ordinances applicable to the Properties, including zoning, health and licensing requirements; (iv) The activity otherwise complies with this Declaration and is consistent with the residential character of the Properties; (v) The operator of the business posts no signage anywhere in the Properties; (vi) There is no visible evidence in the Properties of the activity; (vii) The activity does not generate noise or odors that are apparent outside the Unit; and (viii) The business does not increase the liability or casualty insurance obligation or premium of the other Owners or the Association. (d) Other activities that have been determined by governmental authorities to be consistent with the single-family residential uses in the Community, including, for example, residential care facilities that are operated in accordance with California Health and Safety Code Section 1566.5. 2.5 NUISANCES. Noxious or offensive activities are prohibited in the Properties and on any public street abutting or visible from the Properties. Any activity undertaking in the Properties, or the presence of any thing in the Properties, which activity or thing may (i) increase the rate of insurance in the Properties, (ii) result in cancellation of the insurance, (iii) obstruct or interfere with the rights of other Owners or the Association, (iv)violate any law or provisions of this Declaration, or (v) constitute a nuisance or other threat to health or safety under applicable law or ordinance, is a prohibited nuisance. 2.5.1 Nuisance Devices. Nuisance devices may not be kept or operated in the Properties or on any public street abutting the Properties, or exposed to the view of other Condominiums or Common Area. Nuisance devices include the following: (a) All horns, whistles, bells or other sound devices (except security devices used exclusively to protect the security of a Condominium or a vehicle and its contents) (b) Noisy or smoky vehicles, power equipment (excluding lawn mowers and other equipment used in connection with ordinary landscape maintenance), and Prohibited Vehicles (defined below); (c) Devices that create or emit loud noises or noxious odors; (d) Construction or demolition waste containers; (e) Devices that unreasonably interfere with television or radio reception to a Condominium; 2056-99886\CCRS\1047088.5 9/28/11 (f) Plants or seeds infected with noxious insects or plant diseases; 2.5.2 Nuisance Activities. Nuisance activities may not be undertaken in the Properties or on any public street abutting the Properties, or exposed to the view of other Condominiums or Common Area. Nuisance activities include the following: (a) Hanging, drying or airing clothing, fabrics or unsightly articles in any place that is visible from other Condominiums, Common Area or streets; (b) Unreasonable levels of noise from parties, recorded music, radios, television or related devices, or live music performance; (c) Repair or maintenance of vehicles or mechanical equipment, except in a closed garage or rear yard screened from view by other Condominiums or Common Area; (d) Outdoor fires, except in barbecue grills and fire pits designed and used in such a manner that they do not create a fire hazard; (e) Outdoor storage of bulk materials or waste materials except in temporary storage areas approved by both all Owners. 2.6 SIGNS. Subject to California Civil Code Sections 712, 713 and 1353.6, no sign, advertising device or other display of any kind shall be displayed in the Properties or on any public street in or abutting the Properties except for the following signs for each Condominium: (a) one nameplate or address identification sign; (b) one sign advising of the existence of security services; (c) one sign advertising the Condominium for sale that is not larger than eighteen (18) inches by thirty (30) inches in size, provided the sign is promptly removed at the close of the resale escrow, or upon the Owner's withdrawal of the Condominium from the resale market; (d) a noncommercial sign, poster, flag or banner must comply with the following requirements: (i) it may not be made of lights, roofing, siding, paving materials, flora, or balloons, or any other similar building, landscaping, or decorative component, or include the painting of architectural surfaces, and (ii) a noncommercial sign or poster must not be more than nine (9) square feet in size and a noncommercial flag or banner must not be more than fifteen (15) square feet in size; (e) other signs or displays authorized by both Owners. 2.7 PARKING AND VEHICULAR RESTRICTIONS. 2056-99886\CCRS\1047088.5 9/28/11 2.7.1 Authorized Vehicle. An "Authorized Vehicle" is an automobile, a passenger van designed to accommodate ten (10) or fewer people, a motorcycle, or a pickup truck having a manufacturer's rating or payload capacity of one (1)ton or less. 2.7.2 Restricted Vehicles. The following vehicles are "Restricted Vehicles:" (a) large commercial-type vehicles (for example, stake bed trucks, tank trucks, dump trucks, step vans, and concrete trucks), (b) buses, limousines or vans designed to accommodate more than ten (10) people, (c) inoperable vehicles or parts of vehicles, (d) aircraft, (e)boats,jet skis and other water craft, (f) trailers (for example, trailers designed for horses, boats, motorcycles or other equipment or materials), (g) motor homes and recreational vehicles (for example, fifth-wheels, folding camping trailers, travel trailers, but not including van conversions and truck campers), (h) any vehicle or vehicular equipment deemed a nuisance by the Association, and (i) any other vehicle that is not classified as an Authorized Vehicle. If a vehicle qualifies as both an Authorized Vehicle and a Restricted Vehicle, then the vehicle is presumed to be a Restricted Vehicle, unless the vehicle is expressly authorized in writing by both of the Owners. 2.7.3 Parking of Restricted Vehicles. No Restricted Vehicle may be parked, stored or kept in the Properties except for brief periods during loading, unloading, or emergency repairs. However, a resident may park a Restricted Vehicle in the garage so long as the garage is kept closed and the presence of the Restricted Vehicle does not prevent any Authorized Vehicle from being parked in the garage at the same time. 2.7.4 Garage Parking. Each Owner shall at all times ensure that the garage accommodates at least the number of Authorized Vehicles for which it was originally constructed by Declarant. The garages shall be used for parking of vehicles and storage of personal property only. No garage may be used for any living, recreational, or other purpose. Garage doors must be kept closed except as necessary for entry or exit of vehicles or persons. 2.7.5 Guest Parking. There are two (2) guest parking spaces in the Common Area. The guest spaces are reserved for guests of the Owners on a first-come, first- served basis. No guest may park in a guest space for a period exceeding 12 hours in any 24-hour period. 2.7.6 Repair, Maintenance and Restoration. No Person may repair, maintain or restore any vehicle in the Properties, unless such work is conducted in the garage with the garage door closed. No Person may carry on in any portion of the Properties any vehicle repair, maintenance or restoration business. . 2.7.7 Enforcement. The City may, but is not required to, enforce parking restrictions, rules and regulations, in addition to applicable laws and ordinances. 2.8 ANIMAL REGULATIONS. Up to two (2) domestic dogs, cats, birds or other customary household pets may be kept in each Condominium, provided that they are not kept, bred or maintained for commercial purposes; or in unreasonable quantities. Small household pets such as fish and caged birds may be kept in reasonable numbers so long as there is no external evidence of their presence in the Properties. Animals belonging to Owners, residents or guests in 2056-99886\CCRS\10470 88.5 9/28/11 the Properties must be kept in the Residence or in fenced areas of the Condominium. If an animal is taken outside a Condominium, it must be kept under the control of a Person capable of controlling the animal either on a leash or other appropriate restraint. Each Owner shall be liable to the other Owner, and the Owner's Family and guests, for damages or injuries caused by any animals brought or kept in the Properties by an Owner or the Owner's Family, guests or invitees. Each Owner shall immediately remove any excrement or clean other unsanitary conditions caused by the Owner's animals on any portion of the Properties. 2.9 ANTENNA AND SATELLITE DISH RESTRICTIONS. No Person may install in the Properties any antenna or over-the-air receiving device except for an"Authorized Antenna." 2.9.1 Definition. An Authorized Antenna is (a) an antenna designed to receive direct broadcast satellite service, including direct-to-home satellite service, that is one (1) meter or less in diameter, (b) an antenna designed to receive video programming service, including multi-channel multipoint distribution service, instructional television fixed service, and local multipoint distribution service, and is one (1) meter or less in diameter or diagonal measurement, (c) an antenna designed to receive television broadcast signals, or (d) an antenna used to receive and transmit fixed wireless signals. The foregoing definition is not intended to prohibit cordless or wireless telephones, PDAs, computers, wireless home data networking equipment or other portable wireless data or telephony devices that do not otherwise constitute a nuisance device under the Governing Documents. 2.9.2 Masts. An Authorized Antenna may be mounted on a mast to reach the height needed to receive an acceptable quality signal, subject to local governmental agency permitting requirements for safety purposes. No mast shall be installed in such a way that it overhangs any portion of the Common Area outside the Exclusive Use Area, or poses a threat of damage to property or injury to persons. 2.9.3 Preferred Installation Locations and Restrictions on Installation. The Exclusive Use Area yards are preferred installation locations for the Authorized Antenna, subject to applicable restrictions and prohibitions in this Declaration. 2.9.4 Prohibitions on Installation. No Authorized Antenna or any other device may be installed in the Common Area, including landscaped areas and exterior surfaces of the Building (such as the roof, fascia, chimneys and exterior wall surfaces). Authorized Antennae may be installed in Exclusive Use Area yards on a mast or tripod, but no Person may make any installation that penetrates the exterior surface of any portion of the Building. 2.9.5 Restatement of Applicable Law. This Section is intended to be a restatement of the law. All amendments, modifications, restatements and interpretations of the law applicable to the installation, use or maintenance of an antenna or over-the-air receiving device shall be interpreted to amend, modify, restate or interpret this Section. 2.10 TRASH. Trash must be stored in sanitary trash containers. No trash or containers may be left or stored outdoors. However, trash containers maybe set out at curbside on Patterson Lane for a reasonable period of time on trash collection days (not to exceed twelve (12) hours before and after scheduled trash collection hours). At all other times, Owners must store trash 2056-998 86\CCRS\1047088.5 9/28/11 containers in the garage until scheduled collection times. Each Owner shall at all times maintain adequate space in the garage for storage of trash containers. 2.11 IMPROVEMENTS. 2.11.1 Outdoors. No Person may construct or install any of the following without the prior written consent of the neighboring Owner: (a) patio or deck covers, accessory structures such as sheds, wiring, air conditioning equipment, water softeners, other machines and other similar Improvements, (b) Improvements protruding through the walls or roofs of the Building, and (c) other exterior additions or alterations to any Condominium. 2.11.2 Installation of Landscaping. Each Owner shall complete the installation of landscaping on the Exclusive Use Area yard of the Owner's Condominium no later than one year after the Close of Escrow. Each Owner shall obtain all permits necessary and shall comply with all requirements of the City. 2.11.3 Solar Energy Systems. When installing or replacing landscaping on the Properties, the Owners must consider the effect of shading on any roof-mounted solar energy systems, and comply with the requirements of any applicable declaration of covenants and restrictions for solar energy systems Recorded on the Properties. 2.11.4 Indoors. Paint, foil or other reflective material may not be applied to any window in the Condominium. Pending installation of permanent window coverings, Owners may cover windows with white sheets up to six (6) months following the Close of Escrow. Nothing may be done in any Condominium or in, on or to the Common Area which may impair the structural integrity of the Building or which structurally alters the Building except as otherwise expressly provided in this Declaration. No Owner may pierce or otherwise modify any Common Wall. 2.11.5 Structural Modification. Except as otherwise expressly provided in this Declaration, no Person may modify any Condominium or any Common_Area (including walls, foundation, roof or fire sprinklers) if the modification will impair the structural integrity or fire safety of the Condominium or neighboring Condominium. No Owner may pierce or remove or otherwise modify any fire wall assembly or other Common Wall. 2.11.6 Noise Mitigation in Residences. Declarant may have installed noise mitigating floor materials in upper floors or wall Improvements in walls shared with the adjoining Residence. No Owner shall replace any Declarant-installed noise mitigation Improvements unless the replacement offers the same or substantially similar noise mitigation as the Improvements originally installed by Declarant. Prior to installation, the Owner shall present the adjacent Owner with written evidence that the proposed flooring or wall material is the same or substantially similar to the material installed by Declarant. Owners are further prohibited from (a) puncturing, piercing or otherwise altering any Common Wall or other structure that separates the Units, (b) installing any sound system, stereo speakers or other entertainment system in any Common Wall, or in the walls or ceiling of the Unit, and (c) installing any tile or other hard surface flooring on the upper levels of the Unit, without the prior written approval of the adjacent Owner. 2056-99886\CCRS\1047088.5 9/28/11 2.11.7 No Liability. Declarant shall not be liable or responsible for any damage that results from Improvements installed, constructed or modified by or at the direction of an Owner. Owners are advised to consult and use qualified consultants and contractors when installing, constructing or modifying Improvements on the Owner's Condominium. 2.12 MECHANICS' LIENS. No Owner (an "Improving Owner") may cause or permit any mechanic's lien to be filed against the Common Area or another Owner's Condominium for labor or materials alleged to have been furnished or delivered to the Improving Owner and any Improving Owner who permits a mechanics' lien to be so filed shall cause the lien to be discharged within five (5) days after notice to the Improving Owner from the other Owner. 2.13 DRAINAGE. No one may interfere with or alter the established drainage pattern over any Condominium or Common Area unless an adequate alternative provision is made for proper drainage. For the purpose of this Section, "established" drainage means the drainage which (a) exists at the time of the first Close of Escrow, or (b) is shown in any plan approved by Declarant (until Declarant no longer owns any portion of the Properties). Established drainage includes drainage from the Condominiums onto the Common Area and from the Common Area onto the Condominiums. Declarant may have installed surface drainage improvements in the Properties, and "sub-drains" in the Common Area, including Exclusive Use Area yards (collectively, "Drainage Improvements"). The Drainage Improvements provide for collection and drainage of surface waters from each Condominium and from elsewhere in the Properties to proper points of disposal. Drainage Improvements shall not be modified, removed or blocked without first making alternative drainage arrangements approved by applicable governmental agencies. Owner-installed irrigation systems must be designed and maintained to prevent excess runoff and accumulation of surface water. The grading and drainage design in the Properties should not be altered in the course of installing Improvements in a manner that will redirect surface water flow toward the Building or onto adjacent property or that will trap water so that it ponds or floods. Grading and drainage modifications are subject to law, approval by the adjacent Owner and the City. 2.14 WATER SUPPLY SYSTEM. No individual water supply, sewage disposal or water softener system is permitted in any Condominium unless such system is designed, located, constructed and equipped in accordance with the requirements, standards and recommendations of any water district having jurisdiction, the City and all other applicable governmental authorities with jurisdiction. 2.15 VIEW OBSTRUCTIONS. Each Owner acknowledges that (a)there are no protected views in the Properties, and no Condominium is assured the existence or unobstructed continuation of any particular view, and (b) any construction, landscaping (including the growth of landscaping) or other installation of Improvements by Declarant or other Owners may impair the view from any Condominium, and each Owner hereby consents to such view impairment. 2.16 RIGHTS OF DISABLED. Each Owner may modify the Owner's Residence and the route over the Common Area leading to the front door of his Residence, at the Owner's sole expense, to facilitate access to the Owner's Residence by persons who are blind, visually impaired, deaf or physically disabled, or to alter conditions which could be hazardous to such persons, in accordance with California Civil Code Section 1360 or any other applicable law. 2056-99886\CCRS\1047088.5 9/28/11 2.17 TEMPORARY BUILDINGS. No outbuilding, tent, shack, shed or other temporary building or Improvement may be placed upon any portion of the Properties either temporarily or permanently, without the prior written consent of the Owners of both Units in the Properties. No garage, trailer, camper, motor home, recreation vehicle or other vehicle may be used as a residence in the Properties, either temporarily or permanently. 2.18 COMMON AREA. The Common Area may not be altered without the prior written consent of the Owners of both Units. 2.19 DRILLING. No oil drilling, oil, gas or mineral development operations, oil refining, geothermal exploration or development, quarrying or mining operations of any kind may be conducted on the Properties, nor are oil wells, tanks, tunnels or mineral excavations or shafts permitted upon the surface of the Properties or within five (500) hundred feet below the surface of the Properties. No derrick or other structure designed for use in boring for water, oil, geothermal heat or natural gas may be erected,maintained or permitted in the Properties. 2.20 POST TENSION CONCRETE SLABS. Concrete slabs for the Units may be reinforced with a grid of steel cable installed in the concrete slab and then tightened to create extremely high tension. This type of slab is commonly known as a "Post Tension Slab." Cutting into a Post Tension Slab for any reason (for example, to install a floor safe, to remodel plumbing, etc.) is very hazardous and may result in serious damage to the Residence, personal injury, or both. Each Owner shall determine if the Owner's Unit has been constructed with a Post Tension Slab and, if so agrees: (a) Owner shall not out into or otherwise tamper with the Post Tension Slab, (b) Owner shall not permit or allow any other Person to cut into or tamper with the Post Tension Slab so long as Owner owns any interest in the Unit, (c) Owner shall disclose the existence of the Post Tension Slab to any Person who rents, leases or purchases the Unit from Owner, and (d) Owner shall indemnify and hold Declarant and Declarant's agents, free and harmless from and against any and all claims, damages, losses or other liability (including attorneys' fees and costs of court) arising from any breach of this covenant by Owner.. ARTICLE III DISCLOSURES Because much of the information included in this Article (a) was obtained from other sources (e.g., governmental and other public agencies and public records) and (b) is subject to change for reasons beyond the control of Declarant and the Association, the Declarant and the Association do not guarantee the accuracy or completeness of any of the information in this Article. Further, neither Declarant nor the Association is obligated to advise any Person of any changes affecting the disclosures in this Article. Persons should make their own inquiries or investigations to determine the current status of the matters addressed in this Article. 3.1 NO REPRESENTATIONS OR WARRANTIES. No representations or warranties, express or implied, have been given by Declarant, the Association or their agents in connection with the Properties, its physical condition, zoning, compliance with law, fitness for intended use, or in connection with the subdivision, sale, operation, maintenance, cost of maintenance, taxes or regulation of the Properties as a condominium project, except as expressly provided in this Declaration, or provided by Declarant to the first Owner of each Condominium. 2056-99886\CCRS\1047088.5 9/28/11 3.2 EFFECT OF EXPANSIVE SOIL. The soil in the Properties may be composed of materials that have "expansive" characteristics. Owners should perform soils testing, use special construction techniques and take precautions when constructing new Improvements or modifying existing Improvements because the soil expands when it is wet and can cause Improvements to lift and crack. Special attention is required in designing and constructing concrete and masonry Improvements such as masonry walls and planters, concrete slabs, patios, walkways and decking. For example, steel reinforcing bars may be required in lieu of steel mesh in concrete patio slabs, and block walls may require extra horizontal and vertical steel reinforcing bars. 3.3 ELECTRIC POWER LINES, COMMUNICATIONS FACILITIES AND HUMAN HEALTH. Underground or overhead electrical power transmission and distribution lines and transformers are located in and around the Properties. The lines and transformers are owned, operated and maintained by Southern California Edison Company. Power lines and transformers produce extremely low-frequency electromagnetic fields ("ELF-EMF' when operating. Antennas and other equipment for wireless telecommunications (for example, cellular phones) may also be located in or in the vicinity of the Properties. Like all wireless communications facilities, these facilities produce ELF-EMF. For some time, there has been speculation in the scientific community about health risks associated with living near ELF-EMF sources. In 1992, the United States Congress authorized the Electric and Magnetic Fields Research and Public Information Dissemination Program ("EMF-RAPID Program' to perform research on these issues and to analyze the existing scientific evidence in order to clarify the potential for health risks from exposure to ELF-EMF. The National Institute of Environmental Health Sciences ("NIEIIS'� issued a report to Congress summarizing its review of scientific data from over three hundred (300) studies on ELF-EMF health risks. The ELF-EMF studies consist of both epidemiological studies (studies of exposure in human populations) and controlled laboratory experiments on animal and cell models. While some epidemiological studies suggested some possible relationship between EMF exposure and some health conditions, such as childhood leukemia, miscarriages, and certain neurological disorders, the laboratory experiments did not support such a link. Some studies have reported associations between ELF-EMF exposure and brain cancer, while other studies found no such relationship. According to the NIEHS report, the scientific evidence shows no clear pattern of health hazards from ELF-EMF exposure, and the NIEHS report did not find evidence of any link sufficient to recommend widespread changes in the design or use of electrical transmission equipment. However, because the evidence does not clearly rule out any effect, NIEHS advocated continuing inexpensive and safe reductions in exposure to ELF-EMF and endorsed current utility practices regarding design and siting of new transmission and distribution lines. Studies are ongoing. Further information on this subject is available from the World Health Organization's International EMF Project website at hM://www.who.int/peh-emf/en/; Southern California Edison website at http://www.sce.com/Safety/ eveaone/electric-magnetic-fields.htm; the U.S. National Institute of Environmental Health Sciences website at http://www.niehs.nih.gov/health,ltopies,lagents/emf/; the U.S. Food and Drug Administration website at hqp:/,www.fda.aov/cdrh/wireless/htmU; and Electric and Magnetic Fields Program, California Department of Public Health Services at www.cdpli.ca.gov. This list is not meant to be all inclusive. 2056-99886\CCRS\1047088.5 9/28/11 3.4 PROPERTY LINES. The boundaries of each Condominium and the Common Area are delineated on subdivision (parcel) maps, lot line adjustments or Condominium Plans that are public records and are available at the County Recorder's office. 3.5 EARTHQUAKES, GENERALLY. California is subject to a wide range of earthquake activity. California has many known faults as well as yet undiscovered faults. Owners must evaluate the potential for future seismic activity that might seriously damage a Condominium. A major earthquake, which some have predicted will occur in our lifetimes, could cause very serious damage to Units, located even many miles from the epicenter of the earthquake. A more moderate earthquake occurring on a more minor fault, or on an undiscovered fault, could also cause substantial damage. Declarant makes no representations or warranties as to the degree of earthquake risk within the Properties. Owners should read "The Homeowner's Guide to Earthquake Safety," and consult with the City, other public agencies, and appropriate experts to evaluate the potential risk. 3.6 COMMERCIALANDUSTRIAL ZONE DISCLOSURE. According to the Natural Hazard Disclosure Statement prepared by First American Title Company for the Properties dated June 1, 2011, the Properties are located within one mile of a property that is zoned to allow commercial or industrial use (as defined in California Code of Civil Procedure Section 731a) that must be disclosed to purchasers in accordance with California Civil Code Section 1102.17. 3.7 AFFORDABILITY RESTRICTIONS. Each Condominium is subject to affordability restrictions which, while operating to keep the home affordable, also limit the appreciation which might be gained from ownership of a similar home not subject to affordability restrictions. The affordability restrictions are contained within documents which include, but are not limited to the "Declaration of.Conditions, Covenants And Restrictions for Property (Resale Restrictions)" by and between Declarant and the City of Huntington Beach, dated September 6, 2011, and other affordability covenants and restrictions recorded against the Properties. 3.8 MOLD. Molds are simple, microscopic organisms, present virtually everywhere, indoors and outdoors. Mold can be any color, but is usually green, gray, brown or black. Mold requires a food source (such as paper, wood, leaves or dirt), a source of moisture and a suitable temperature (generally 40-100 degrees Fahrenheit)to grow. Individuals are exposed to molds on a daily basis, and in most instances there are no harmful effects. However, the buildup of molds in the indoor environment may contribute to serious health problems for some individuals. Due to a variety of factors, including the fact that sensitivities to various types of molds and other potential contaminants vary from person to person, there are currently no state or federal standards concerning acceptable levels of exposure to mold. Sources of indoor moisture that may lead to mold problems include, but are not limited to flooding, leaks, seepage, sprinkler spray hitting the Building, overflow from sinks or sewers, damp basement or crawl space, steam from shower or cooking, humidifiers, wet clothes drying indoors, watering house plants, and clothes dryers exhausting indoors. Each Owner should take precautions to prevent the growth of mold in the Unit from these and other sources. Preventative measures include,but are not limited to the 2 05 6-99886\CCRS\1047088.5 9/28/11 following: (1) regularly cleaning the Unit; (2) regularly checking for accumulated moisture in corners and unventilated areas; (3)running fans, dehumidifiers and air conditioners to reduce indoor humidity; (4) stopping the source of any leak or flooding; (5)removing excess water with mops or a wet vacuum; (6) moving wet items to a dry, well ventilated area; (7) regularly cleaning and disinfecting indoor and outdoor surfaces that may contain mold; (8) having major appliances, such as furnaces, heat pumps, central air conditioners, ventilation systems and furnace-attached humidifiers inspected, cleaned and serviced regularly by a qualified professional; (9) cleaning the refrigerator, air conditioner and dehumidifier drip pans and filters regularly and ensuring that refrigerator and freezer doors seal properly; and (10) avoiding over- watering of landscaping. It is the Owner's responsibility to monitor the Unit on a continual basis for excessive moisture, water and mold accumulation. For additional information regarding mold, refer to the following websites: California Department of Public Health - http://www.cdph.ca.gov; Centers for Disease Control and Prevention—http://www.cdc.gov/lceh; U.S. Environmental Protection Agency—http://www.epa.gov; Illinois Department of Public Health—http://www.idphstate.il.us; and Washington State Department of Health—http://www.doh.wa.pov. 3.9 ADDITIONAL PROVISIONS. There may be provisions of various laws, including the Davis-Stirling Common Interest Development Act (Sections 1350 et seq. of the California Civil Code) and the Fair Housing Act (Title 42 United States Code, Section 3601 et seq.) which may supplement or override the Governing Documents. Declarant makes no representations or warranties regarding the future enforceability of any portion of the Governing Documents. ARTICLE IV THE ASSOCIATION 4.1 GENERAL DUTIES AND POWERS. The Association has the duties and powers listed in the Governing Documents and also has the general and implied powers of an unincorporated association to do all things that an unincorporated association organized under the laws of the State of California may lawfully do which are necessary or proper in operating for the general welfare of the Owners. 4.2 MEMBERSHIP. 4.2.1 Generally. Every Owner shall automatically acquire a Membership in the Association and retain the Membership until such Owner's Condominium ownership ceases, at which time such Owner's Membership shall automatically cease. Ownership of a Condominium is the sole qualification for Membership. Memberships are not assignable except to the Person to whom title to the Condominium is transferred, and every Membership is appurtenant to and may not be separated from the fee ownership of the Condominium. The rights, duties, privileges and obligations of the Owners are as provided in the Governing Documents. 4.2.2 Transfer. The Membership of an Owner may not be transferred, pledged or alienated in any way, except on the transfer or encumbrance of such Owner's 2056-99886\CCRS\1047088.5 9/28/11 Condominium, and then only to the transferee or Mortgagee of the Owner's Condominium. Any Owner who has sold his Condominium to a contract purchaser under an agreement to purchase may delegate the Owner's Membership rights to the contract purchaser. 4.2.3 Classes of Membership. There is only one class of Membership in the Association. Each Condominium is entitled to a single vote. 4.2.4 Joint Ownership. When more than one Person holds an interest in any Condominium ("co-owners"), each co-owner may attend any Association meeting, but only one co-owner shall be entitled to exercise the single vote to which the Condominium is entitled. Co- owners owning the majority interests in a Condominium may designate in writing one of the co- owners to vote. Fractional votes shall not be allowed and the vote for each Condominium shall be exercised, if at all, as a unit. Where no voting co-owner is designated or if the designation is revoked, the vote for the Condominium shall be exercised as the co-owners owning the majority interests in the Condominium agree. Unless the Association receives a written objection in advance from a co-owner, it shall be conclusively presumed that the voting co-owner is acting with his co-owners' consent. No vote may be cast for any Condominium if the co-owners present in person or by proxy owning the majority interests in such Condominium fail to agree to the vote or other action. The nonvoting co-owner or co-owners .are jointly and severally responsible for all obligations imposed on the jointly-owned Condominium and are entitled to all other benefits of ownership. All agreements and determinations lawfully made by the Association in accordance with the voting percentages established in the Governing Documents are binding on all Owners and their successors in interest. ARTICLE V REPAID AND MAINTENANCE 5.1 MAINTENANCE STANDARDS. The Owners shall maintain everything they are obligated to maintain in a clean, sanitary and attractive condition, in accordance with the Governing Documents and any Maintenance Guidelines. Unless specifically provided in any Maintenance Guidelines, the Owners shall determine the level and frequency of maintenance of the Common Area and Improvements thereon. 5.1.1 The Unit. Each Owner shall maintain the Owner's Unit, at the Owner's sole expense, and in accordance with any Maintenance Guidelines, the Condominium Plan, and the original design of the Building; provided, however, that the Owners shall cooperate in the repair of the roof and any other portions of the Building that enclose the Units in accordance with Section 5.1.3 below. Each Owner shall pay when due all charges for any utility service separately metered to the Owner's Unit. 5.1.2 Exclusive Use Areas. Each Owner shall maintain the Exclusive Use Area appurtenant to such Owner's Unit, at the Owner's sole expense and in accordance with any Maintenance Guidelines. All Owner-maintained landscaping, including the Exclusive Use Area yard, shall be properly maintained, evenly cut, evenly edged, free of bare or brown spots, debris and weeds above the level of the lawn. Each Owner shall also maintain any internal or external telephone wiring wherever located which is designed to serve only the. Owner's Unit, and is entitled to reasonable access over the Common Area for such purposes. The cost of reasonable 205 6-99886\CCRS\1047088.5 9/28/11 repair and maintenance of any wall or fence separating Exclusive Use Area yards shall be shared equally by the Owners. 5.1.3 Roof and Building Exteriors. The Owners shall cooperate in maintaining, in accordance with any Maintenance Guidelines, all Common Area not designated for exclusive use and maintenance by a single Owner, including the roof, the structural components of the Building (including the Common Walls constructed between the Units or any element thereof, footings, foundation, braces, joists, studs, roof components and load bearing walls), and the exterior finished wall surfaces (including paint, stain, siding and stucco) of the Building, on a mutually-agreed schedule. Neither Owner, acting alone, without the prior approval of the other Owner, may repair or refinish the portions of the Building that enclose the neighboring Unit, except in an emergency situation where an immediate threat to life, health or safety exists. In such emergency situation, the Owner who performs the work shall be entitled to reimbursement by the other Owner of actual, reasonably incurred costs to the extent the repairs benefit the non-performing Owner's Unit. 5.1.4 Other Responsibilities. Each Owner shall regularly inspect his Condominium for wood-destroying pests, and if such pests are found, the Owner shall be responsible for the costs of eradication and future prevention. The Owners shall adopt and perform a pest control program on an agreed-upon schedule. Each Owner is responsible for the maintenance and repair of the portion of the sewer system lateral that exclusively serves the Owner's Unit. 5.1.5 Enforcement of Maintenance Obligations. If any Owner permits any Improvement or landscaping that the Owner is obligated to maintain to fall into disrepair, become unsafe, unsightly or unattractive, or otherwise violate this Declaration, the other Owner for himself and on behalf of the Association may seek any available remedies at law or in equity. If an alleged violation of the Declaration occurs that the non-violating Owner reasonably believes materially affects the structural integrity of his Residence, the non-violating Owner may deliver a written notice ("Notice of Violation") of such alleged violation, either personally or by certified mail, to the alleged violating Owner. The Notice of Violation shall specify the alleged act or omission and the applicable provisions in the Declaration which have been violated. If the allegedly violating Owner fails to begin rectifying the alleged violation or initiate a dispute resolution procedure under Article XI within thirty (30) days after the delivery of the Notice of Violation, the non-violating Owner may take the following actions: (a) enter the allegedly violating Owner's Unit and Exclusive Use Area to make such repairs or to perform such maintenance, or (b) seek the appropriate injunctive relief under Section 11.1.1. Neither Owner shall interfere with the right of the other Owner to enter an Owner's Unit or Exclusive Use Area for the purpose of enforcing this Declaration to protect the structural integrity of the other Owner's Unit or Exclusive Use Area, provided that the Notice of Violation is properly delivered in accordance with this provision. 5.1.6 Damage by Owners. Each Owner is liable for any damage to the Common Area if the damage is sustained due to the act or negligence of an Owner, or an Owner's Family, agents, guests or invitees, or any other Persons deriving their right to use the Common Area from the Owner, or from the Owner's Family, agents, guests or invitees. The 2056-99886\CCRS\1047088.5 9/28/11 Owner's liability for such damage may include (a)the amount of any deductible payable on the insured portion of the loss, if a claim is made under any applicable insurance policy, (b) all costs and expenses actually incurred to correct damage that is not covered by insurance or for which no claim has been made, and (c) the amount of the increase in premiums payable for insurance, to the extent the increase is directly caused by damage that was attributed to the Owner or the Owner's Family, agents, guests or invitees. In accordance with California Civil Code Section 1367.1(d), the Association shall have the power to impose a lien for the payment of expenses. If a Condominium is jointly owned, the liability of its Owners for damage to Common Area is joint and several, except to the extent that the Association and the joint Owners have otherwise agreed in writing. ARTICLE VI PROPERTY EASEMENTS AND RIGHTS 6.1 EASEMENTS. 6.1.1 Maintenance and Repair. Declarant reserves for the benefit of each Owner nonexclusive easements over the other Unit, the Common Area and the Exclusive Use Areas as necessary for each Owner to maintain and repair that Owner's Unit and Exclusive Use Area, or to maintain and repair the other Owner's Unit if that Owner fails to do so as required by this Declaration. 6.1.2 Utility Easements. Declarant reserves easements to install and maintain utilities over the Common Area for the benefit of the Owners and their Condominiums. Declarant reserves the right to grant additional easements and rights-of-way throughout the Properties to utility companies and public agencies as it deems necessary for the proper development and disposal of the Properties. Such right of Declarant shall expire on the Close of Escrow for the sale of the last Condominium in the Properties. 6.1.3 Encroachments. Declarant reserves for the benefit of each Owner a reciprocal easement appurtenant to each Condominium over the other Condominium and the Common Area to accommodate (a) any existing encroachment of any wall or any other authorized Improvement, (b) authorized construction or repair, and (c) shifting, movement or natural settling of the Building or other Improvements.. 6.1.4 Easements for Public Service Use. Declarant reserves easements over the Properties for public services of the local government agencies, including the right of law enforcement and fire protection personnel to enter upon the Properties to carry out their official duties. 6.1.5 Easements for Water and Utility Purposes. Declarant reserves easements over the Properties for public and private utility purposes, including the right of any public utility or mutual water district of ingress and egress over the Properties to read and maintain meters, and use and maintain fire hydrants. 2056-99886\CCRS\10470 88.5 9/28/11 6.1.6 Completion of Improvements. Declarant reserves the right and easement to enter the Properties to complete any Improvement which Declarant considers desirable to implement Declarant's development plan. 6.1.7 Owners' Easements in Common Area. Declarant reserves for the benefit of each Owner, and the Owner's Family, guests and invitees, nonexclusive easements for pedestrian and vehicular access (all as applicable) over the Common Area in the Properties as reasonably necessary for the use and enjoyment of each Condominium. This easement is appurtenant to and passes with title to every Condominium. 6.1.8 Drainage Easements. Declarant reserves for the benefit of each Owner reciprocal nonexclusive easements for drainage of water over, across and on the Properties. 6.1.9 Exclusive Use Area. Declarant reserves, for the benefit of specified Owners, exclusive easements over the Common Area for use of the Exclusive Use Area, including for porch and yard purposes as shown and assigned on the Condominium Plan. 6.2 RIGHTS OF ENTRY. 6.2.1 Declarant Right of Entry. Declarant has the right to enter the Units, Exclusive Use Areas and Common Area (i) to comply with requirements for the recordation of subdivision maps or lot line adjustments in the Properties, (ii) for repair of Improvements in accordance with the provisions of the Right to Repair Law, (iii) to accommodate grading or construction activities, and (iv) to comply with requirements of applicable governmental agencies. Declarant shall provide the applicable Owner reasonable notice before such entry, except for emergency situations, which shall not require notice. Any damage to the Properties that is caused by entry under this Subsection shall be repaired by the Declarant. Unless otherwise specified in the initial grant deed of a Condominium from the Declarant, this right of entry shall automatically expire eleven(11) years from the date of the last Close of Escrow in the Properties. 6.2.2 Owners Right of Entry. Each Owner shall permit the other Owners, and their representatives, to enter the Owner's Exclusive Use Area and Unit to perform installations, alterations or repairs to the mechanical or electrical services to a Unit if(a)requests for entry are made in advance, (b) entry is made at a time reasonably convenient to the Owner whose Exclusive Use Area or the Unit is to be entered; and (c)the entered Exclusive Use Area or the Unit is left in substantially the same condition as existed immediately preceding such entry. Any damage to the Exclusive Use Area or the entered Unit that is caused by entry under this Subsection shall be repaired at the sole cost of the Owner on whose behalf the entry was made. ARTICLE VII INSURANCE 7.1 INSURANCE FOR COMMON AREA. The Owners shall cooperate with each other to obtain for themselves or in the name of the Association a single policy of fire and casualty insurance with extended coverage, special form, without deduction for depreciation, insuring both 2056-99886\CCRS\104708 8.5 9/28/11 Owners or the Association as a single payee in the amount of the estimated full replacement value of the Building and other Improvements within the Common Area, excluding the contents of the Units to be insured by the Owners individually. The Owners shall similarly cooperate to obtain general liability insurance for bodily injury, death and property damage arising from use or ownership of the Common Area as customarily covered in condominium developments. Such coverage shall include a severability of interest endorsement or equivalent to preclude the insurer from denying the claim of an Owner because of the negligence or omissions of other Owners. The Owners shall cooperate in the application of any proceeds of such fire and casualty insurance policy to the repair of the Common Area damaged or destroyed by fire or other casualty. The cost of such insurance shall be shared equally by the Owners. 7.2 INSURANCE FOR UNITS. Each Owner is responsible for insuring the elements of the Owner's Unit, together with personal property and all other property and Improvements in the Owner's Unit. Nothing in this Declaration precludes any Owner from carrying any public liability insurance the Owner considers desirable. ARTICLE VIII DESTRUCTION OF IMPROVEMENTS 8.1 RESTORATION OF THE PROPERTIES. The Properties shall be reconstructed or rebuilt substantially in accordance with the original construction plans if they are available, unless changes recommended by the Owners. If the insurance proceeds amount to at least ninety percent (90%) of the estimated cost of restoration and repair, the Owners shall provide the additional funds necessary for such reconstruction. If the insurance proceeds amount to less than ninety percent (90%) of the estimated cost of restoration and repair, the Owners shall determine whether to perform the restoration. 8.2 INTERIOR DAMAGE. The restoration and repair of any damage to the interior of any individual Unit, including all fixtures, cabinets and improvements therein, together with restoration and repair of all interior paint, wall coverings and floor coverings, must be made by and at the individual expense of the Owner of the damaged Unit. If a determination to rebuild the Properties after partial or total destruction is made as provided in this Article, such interior repair and restoration shall be completed as promptly as practical and in a lawful and workmanlike manner, as provided in this Declaration. 8.3 SALE OF PROPERTIES AND RIGHT TO PARTITION. No Owner shall have the right to partition of his interest in the Condominium and there shall be no judicial partition of the Properties, or any part thereof, except as provided in Section 1359(b) of the California Civil Code. Nothing in this Declaration prevents partition of a co-tenancy in any Condominium. Except as provided above, each Owner and the successors of each Owner, whether by deed, gift, devise, or by operation of law, for their own benefit and for the Condominiums and for the benefit of all other Owners, specifically waive and abandon all rights, interests and causes of action for a judicial partition of the tenancy in common ownership of the Properties and do further covenant that no action for such judicial partition shall be instituted, prosecuted or reduced to judgment. 2056-99886\CCRS\1047088.5 9/28/11 8.4 NOTICE TO OWNERS AND FIRST MORTGAGEES. The Owners, immediately on having knowledge of any damage or destruction affecting a material portion of the Common Area, shall promptly notify all First Mortgagees. ARTICLE IX EMINENT DOMAIN 9.1 DEFINITION OF TAKING. As used in this Article, the term "taking" means inverse condemnation by exercise of the power of eminent domain or by sale under threat of the exercise of the power of eminent domain. All takings proceeds shall be payable to the Owners for the benefit of the Owners and their Mortgagees, and shall be distributed to such Owners and Mortgagees as provided in this Article. 9.2 CONDEMNATION OF COMMON AREA. If there is a taking of the Common Area then the award in condemnation shall be paid directly to the Owners. 9.3 CONDEMNATION OF EXCLUSIVE USE AREA. If there is a taking of all or any portion of an Exclusive Use Area, the award in condemnation shall be paid to the Owner of the Condominium to which the taken Exclusive Use Area was appurtenant; however, such award shall first be applied to the balance then due on any Mortgages encumbering such Owner's Condominium, in order of priority. 9.4 CONDEMNATION OF CONDOMINIUMS. If there is a taking of a Condominium, the award in condemnation shall be paid to the Owner of the Condominium; however, such award shall first be applied to the balance then due on any Mortgages encumbering such Owner's Condominium, in order of priority. If a Condominium is taken in its entirety then the Owner of such Condominium shall relinquish to the remaining Owner in the Properties such Owner's undivided interest in the Common Area. An Owner who relinquishes his interest in the Common Area shall execute, acknowledge and deliver to the other Owner such deeds and instruments as are reasonably necessary to evidence the relinquishment. The relinquishing Owner shall pay the cost of preparing, acknowledging and recording deeds and other instruments to carry out the relinquishment of his interest in the Common Area under this Section. 9.5 PORTIONS OF AWARDS IN CONDEMNATION NOT COMPENSATORY FOR VALUE OF REAL PROPERTY. Those portions of awards in condemnation which do not directly compensate Owners for takings of real property (e.g., awards for takings of personal property, relocation expenses, moving expenses, or other allowances of a similar nature intended to facilitate relocation) shall be paid to the Owners whose personal property is taken, or whose relocation is intended to be facilitated. 9.6 NOTICE TO OWNERS AND MORTGAGEES. The Owners, on learning of any condemnation proceeding affecting a Condominium or a material portion of the Common Area, or any threat thereof, shall promptly notify all First Mortgagees. 2056-99 886\CCRS\1047088.5 9/28/11 ARTICLE X RIGHTS OF MORTGAGEES No amendment or violation of this Declaration defeats or renders invalid the rights of the Mortgagee under any Mortgage encumbering one or more Condominiums made in good faith and for value, provided that after the foreclosure of any such Mortgage, the foreclosed Condominium will remain subject to this Declaration. ARTICLE XI ENFORCEMENT 11.1 ENFORCEMENT OF GOVERNING DOCUMENTS. All violations of the Governing Documents, other than those described leading to a dispute that is subject to the Right to Repair Law or regulated by Civil Code Section 1375, shall be resolved as follows: 11.1.1 Right to Enforce. Any Owner may enforce the Governing Documents as described in this Article, subject to California Civil Code Section 1363.810 et seq., and 1369.510, et seq. Each Owner has a right of action against the other Owner for the other Owner's failure to comply with the Governing Documents. Each remedy provided for in this Declaration is cumulative and not exclusive or exhaustive. 11.1.2 Violations Identified by an Owner. If an Owner alleges that another Person is violating the Governing Documents, the complaining Owner may resort to alternative dispute resolution, as required by California Civil Code Section 1369.510 et seq., or to litigation for relief. 11.1.3 Legal Proceedings. Failure to comply with any of the terms of the Governing Documents by any Person is grounds for relief which may include an action to recover damages, injunctive relief, foreclosure of any lien, or any combination thereof, however, the procedures established in California Civil Code Section 3 63.8 10 et seq. and 1369.510, et seq. and in this Article XI must first be followed, if they apply. 11.1.4 No Waiver. Failure to enforce any provision of this Declaration does not waive the right to enforce that provision, or any other provision of this Declaration. 11.2 DISPUTE WITH DECLARANT PARTIES. Any dispute between the Association or any Owner, on the one hand, and the Declarant, or any director, officer, partner, shareholder, member, employee, representative, contractor, subcontractor, design professional or agent of the Declarant (each, a"Declarant Party," and collectively the "Declarant Parties"), on the other hand, is a "Dispute" that shall be resolved in accordance with the following alternative dispute resolution procedures, if the Dispute: (a) Either arises under this Declaration or otherwise relates to the Properties (including Right to Repair Law Claims); and (b) Does not involve an amount in controversy that is subject to the Small Claims Act (California Civil Procedure Sections 116.110, et seq.). 2056-998 86\CCRS\1047088.5 9/28/11 11.2.1 Notice. Any Person with a Dispute shall give written notice of the Dispute by personal or mail service as authorized by Code of Civil Procedure Sections 415.10, 415.20, 415.21, 415.30 or 415.40 to the party to whom the Dispute is directed ("Respondent") describing the nature of the Dispute and any proposed remedy(the "Dispute Notice"). 11.2.2 Right to Inspect and Correct. Commencing on the date the Dispute Notice is delivered to the Respondent and continuing until the Dispute is resolved, the Respondent and its representatives have the right to (a) meet with the party alleging the Dispute at a reasonable time and place to discuss the Dispute, (b) enter the Properties to inspect any areas that are subject to the Dispute, and (c) conduct inspections and testing (including destructive or invasive testing) in a manner deemed appropriate by the Respondent. If Respondent elects to take any corrective action, Respondent and its representatives shall be provided full access to the Properties to take and complete the corrective action. Respondent is not obligated to take any corrective action. Respondent, with the consent of Declarant, has the right to select the corrective action Respondent believes is appropriate. The right to inspect and correct granted in this Section is in addition to the rights granted in the Calderon Act. The procedures established in the Calderon Act may be implemented before, during or after the procedure in this Section is implemented. 11.2.3 Mediation. If the Dispute is not resolved within ninety (90) days after the Respondent receives the Dispute Notice, any party may submit the Dispute to mediation by delivering a request for mediation (a "Mediation Notice") in the same manner as allowed for delivery of the Dispute Notice. The Dispute shall be mediated pursuant to (a)the JAMS (Judicial Arbitration and Mediation Service) mediation procedures in existence when the Dispute Notice is delivered, as modified by this Section, or (b)the mediation procedures of any successor to JAMS in existence when the Dispute Notice is delivered, as modified by this Section, or (c) mediation procedures approved by the parties of any entity offering mediation services that are acceptable to the parties to the Dispute (each, a "Party" and collectively, the "Parties"). Except as provided in Section 11.2.5, no Person shall commence litigation regarding a Dispute without complying with this Section 11.2.3. (a) Selection of Mediator. The mediator shall be selected within sixty (60) days from delivery of the Mediation Notice. The mediator shall be selected by mutual agreement of the Parties. If the Parties cannot agree on a mediator, the mediator shall be selected by the entity providing the mediation service. No Person shall serve as a mediator in any Dispute in which the Person has any financial or personal interest in the result of the mediation, except by the written consent of all Parties. Before accepting any appointment, the prospective mediator shall disclose any circumstances likely to create a presumption of bias or to prevent a prompt commencement of the mediation process. (b) Position Letter;Pre Mediation Conference. No later than sixty (60) days after selection of the mediator, each parry to the Dispute shall submit a letter ("Position Statement") containing (i) a description of the Party's position concerning the issues that need to be resolved, (ii) a detailed description of the defects allegedly at issue, and (iii) a suggested plan of repair, remediation or correction. The mediator may schedule a pre-mediation conference. All Parties shall attend unless otherwise mutually agreed. The mediation shall be commenced 2056-99886\CCRS\1047088.5 9/29/11 within twenty (20) days after submittal of all Position Statements and shall be concluded within fifteen (15) days after the mediation began unless either (A)the mediator extends the mediation period, or (B) the Parties mutually agree to extend the mediation period. The mediation shall be held in the County or another place mutually acceptable to the parties. (c) Conduct of Mediation. The mediator has discretion to conduct the mediation in the manner in which the mediator believes is most appropriate to achieve the goal of settling the Dispute. The mediator is authorized to conduct joint and separate meetings with the Parties and to make oral and written recommendations for settlement. The mediator may also obtain expert advice concerning technical aspects of the Dispute, provided the Parties assume the expenses of obtaining such advice. The mediator shall not have the authority to impose a settlement on the Parties. (d) Application of Evidence Code. The provisions of California Evidence Code Sections 1115 through 1128 shall be applicable to the mediation process. Use and disclosure of statements, evidence and communications offered or made in the course of the mediation shall be governed by these sections, including the sections which preclude use of material in future proceedings and the sections which provide for confidentiality of material. (e) Parties Permitted at Mediation. Persons other than the Parties, their liability insurers, Declarant, attorneys for the Parties and the mediator may attend mediation sessions only with the permission of the Parties and the consent of the mediator. Declarant has the right to attend the mediation session even if Declarant is not one of the Parties. (f) Record. There shall be no stenographic, video or audio record of the mediation process. (g) Expenses. Each Party shall bear its own attorneys' fees and costs incurred in connection with the mediation. All other expenses of the mediation including the fees charged by the mediator and the cost of any proof or expert advice requested by the mediator shall be borne equally by each of Declarant and the Declarant Parties to whom the Dispute is directed, unless the Parties agree otherwise. This provision does not modify any provision of a contract between Declarant and any Declarant Party requiring indemnification or establishing a different allocation of costs between the Declarant and the Declarant Party. 11.2.4 Judicial Reference. If a Dispute remains unresolved after the mediation required by Section 11.2.3 is completed, any of the Parties may file a lawsuit, provided that the Association must obtain the vote or written consent of Owners other than Declarant prior to filing a lawsuit in a Dispute with Declarant or a Declarant Party. All lawsuits regarding Disputes must be resolved by general judicial reference pursuant to California Code of Civil Procedure Sections 638 and 641 through 645.1, as modified by this Section 11.2.4. The Parties shall cooperate in good faith to ensure that all necessary and appropriate parties are included in the judicial reference proceeding. No Party shall be required to participate in the judicial reference proceeding if all Parties against whom such Party would have necessary or permissive cross-claims or counterclaims will not or cannot be joined in the judicial reference proceeding. The general referee shall have the authority to try all issues of fact and law and to report a statement of decision to the court. The referee shall be the only trier of fact and law in 2056-99886\CCRS\1047088.5 9/28/11 the reference proceeding, and shall have no authority to further refer any issues of fact or law to any other Person unless all parties to the judicial reference proceeding consent, or the referee determines that a conflict of interest or similar situation has arisen which would make it inappropriate for the referee to act as the trier of fact or law concerning an issue or matter. In the second alternative, an alternative judicial referee shall be selected in accordance with Section 11.2.4(b) solely for resolving or rendering a decision concerning the issue or matter involved in the conflict. (a) Place. The proceedings shall be heard in the County. (b) Referee. The referee shall be a retired judge who served on the Superior Court of the State of California in the County with substantial experience in the type of matter in dispute and without any relationship to the Parties or interest in the Properties, unless the Parties agree otherwise. The parties to the judicial reference proceeding shall meet to select the referee no later than thirty (30) days after service of the initial complaint on all defendants named in the complaint. Any dispute regarding the selection of the referee shall be resolved by the court in which the complaint is filed. (c) Commencement and Timing of Proceeding. The referee shall commence the proceeding at the earliest convenient date and shall conduct the proceeding without undue delay. (d) Pre-hearing Conferences. The referee may require pre-hearing conferences. (e) Discovery. The parties to the judicial reference proceeding shall be entitled only to limited discovery, consisting of the exchange of the following: witness lists, expert witness designations, expert witness reports, exhibits, reports of testing or inspections, and briefs. Any other discovery authorized in the California Code of Civil Procedure shall be permitted by the referee upon a showing of good cause or based on the consent of all parties to the judicial reference proceeding. (f) Motions. The referee shall have the power to hear and dispose of motions, including motions relating to discovery, provisional remedies, demurrers, motions to dismiss, motions for judgment on the pleadings and summary judgment and/or adjudication motions, in the same manner as a trial court judge. The referee shall also have the power to adjudicate summarily issues of fact or law including the availability of remedies whether or not the issue adjudicated could dispose of an entire cause of action or defense. (g) Record. A stenographic record of the hearing shall be made which shall remain confidential except as may be necessary for post-hearing motions and any appeals. (h) Statement of Decision. The referee's statement of decision shall contain an explanation of the factual and legal basis for the decision pursuant to California Code of Civil Procedure Section 632. The decision of the referee shall stand as the decision of the 2056-998 86\CCRS\1047088.5 9/28/11 court, and upon filing of the statement of decision with the clerk of the court,judgment may be entered thereon in the same manner as if the Dispute had been tried by the court. (i) Remedies. The referee may grant all legal and equitable remedies and award damages in the judicial reference proceeding. 0) Post-hearing Motions. The referee may rule on all post-hearing motions in the same manner as a trial judge. (k) Appeals. The decision of the referee shall be subject to appeal in the same manner as if the Dispute had been tried by the court. (1) Expenses. Each Party shall bear its own attorneys' fees and costs incurred in connection with the judicial reference proceeding. All other fees and costs incurred in connection with the judicial reference proceeding, including the cost of the stenographic record, shall be advanced equally by each of Declarant and the Declarant Parties to whom the Dispute is directed. However, the referee shall have the power to reallocate such fees and costs among the Parties in the referee's final ruling. This provision does not modify any provision of a contract between Declarant and any Declarant Party requiring indemnification or establishing a different allocation of costs between Declarant and the Declarant Party. 11.2.5 Statutes of Limitation. Nothing in this Section 11.2 shall be considered to toll, stay, reduce or extend any applicable statute of limitations; provided, however, that Declarant, the Declarant Parties, the Association and any Owner may commence a legal action which in the good faith determination of that Person is necessary to preserve that Person's rights under any applicable statute of limitations so long as no further steps in processing the action are taken except those authorized in this Section 11.2. 11.2.6 Agreement to Dispute Resolution; Waivers of .fury Trial. DECLARANT, THE ASSOCIATION AND EACH OWNER AGREE TO USE THE PROCEDURES ESTABLISHED IN THIS SECTION 11.2 TO RESOLVE ALL DISPUTES AND WAIVE THEIR RIGHTS TO RESOLVE DISPUTES IN ANY OTHER MANNER. DECLARANT, THE ASSOCIATION AND EACH OWNER ACKNOWLEDGE THAT BY AGREEING TO RESOLVE ALL DISPUTES AS PROVIDED IN THIS SECTION 11.2, THEY ARE GIVING UP THEIR RIGHT TO HAVE DISPUTES TRIED BEFORE A JURY. THIS SECTION 11.2 MAY NOT BE AMENDED WITHOUT DECLARANT'S PRIOR WRITTEN CONSENT. 11.3 NO ENHANCED PROTECTION AGREEMENT. No language contained in this Declaration or any Supplemental Declaration shall constitute, or be interpreted to constitute, an "enhanced protection agreement" as defined in Section 901 of the California Civil Code. Further, no express or implied representations or warranties made by Declarant in any other writing are intended to constitute, or to be interpreted to constitute, an enhanced protection agreement. 11.4 COVENANT REGARDING PROCEEDS. If any Owner prevails in a Dispute, and the judgment thereon or settlement terms thereof includes a monetary award, then the 205 6-99 886\CCRS\1047088.5 9/28/11 proceeds of the award shall be first applied to the remediation of the condition that gave rise to the Dispute. ARTICLE XII DURATION AND AMENDMENT 12.1 DURATION. This Declaration shall continue in full force unless a declaration of termination satisfying the requirements of an amendment to this Declaration established in Section 12.2 is Recorded. 12.2 TERMINATION AND AMENDMENT. 12.2.1 Amendment Approval. Subject to Declarant's approval rights under Article XIII, a proposed amendment of this Declaration or any Supplemental Declaration (other than an amendment described in Section 12.2.4) or any termination of this Declaration must be adopted by the vote, in person or by proxy, or written consent of both Owners, and if the termination or amendment would have a material adverse effect on the rights of any Mortgagee under its Mortgage, then the Owners must also obtain the written consent of the affected Mortgagee. 12.2.2 Notice to Mortgagees. Each First Mortgagee in the Properties which receives proper written notice of a proposed amendment or termination of this Declaration or any Supplemental Declaration with a return receipt requested is deemed to have approved the amendment or termination if the Mortgagee fails to submit a response to the notice within thirty (30) days after the First Mortgagee receives the notice. 12.2.3 Certificate. A copy of each amendment (except those amendments described in Section 12.2.4) must be signed by both Owners, and by Declarant if such amendment requires Declarant's approval. The amendment becomes effective when a Certificate of Amendment is Recorded. The certificate reflecting any termination or amendment which requires the written consent of any of the First Mortgagees of first Mortgages must include a certification that the requisite approval of such First Mortgagees was obtained. 12.2.4 Amendment or Termination by Declarant. Nothing in this Section 12.2.4 may be amended without the written consent of Declarant. (a) Before First Closing. Notwithstanding any other provisions of this Article, until the first Close of Escrow in the Properties, Declarant may unilaterally amend or terminate this Declaration for any purpose by Recording in the Official Records an instrument signed and acknowledged by Declarant and any other record owners of the Properties. (b) Minor Corrections. Notwithstanding any other provisions of this Article, Declarant (as long as Declarant owns any portion of the Properties) may unilaterally amend this Declaration or a Supplemental Declaration by Recording a written instrument signed by Declarant to: (1) conform this Declaration or any Supplemental Declaration to the rules, regulations or requirements of the County or City, (2) amend, replace or substitute any exhibit to correct typographical or engineering errors, (3) include any exhibit, that was inadvertently 205 6-99886\CCRS\1047088.5 9/28/11 omitted from the Declaration or any Supplemental Declaration at the time of Recording, (4) comply with any City, County, State or Federal laws or regulations, (5) correct typographical errors, (6) supplement this Declaration with provisions which pertain to rights and obligations of Declarant or the Owners arising under the Right to Repair Law, and (7) change any exhibit or portion of an exhibit to conform to as-built conditions, all as may be applicable. ARTICLE XIII GENERAL PROVISIONS 13.1 NO PUBLIC RIGHT OR DEDICATION. Nothing in this Declaration is a gift or dedication of all or any part of the Properties to the public, or for any public use. 13.2 NOTICES. Except as otherwise provided in this Declaration,notice to be given to an Owner must be in writing. Notice may be personally delivered to an Owner or delivered by regular United States mail, postage prepaid, addressed to the Owner at the most recent address furnished by such Owner to the Association or, if no such address has been furnished, to the street address of such Owner's Condominium. Delivery of such notice to one or more co-Owners, or any general partner of a partnership owning a Condominium, constitutes delivery to all Owners or to the partnership. Personal delivery of such notice to any officer or agent for the service of process on a corporation or limited liability company constitutes delivery to the corporation or limited liability company. Notice which is mailed as provided in this Section is deemed delivered three (3)business days after the time of such mailing. 13.3 CONSTRUCTIVE NOTICE AND ACCEPTANCE. Every Person who owns, occupies or acquires any right, title, estate or interest in or to any Condominium or other portion of the Properties consents and agrees to every limit, restriction, easement, reservation, condition and covenant contained in this Declaration, whether or not any reference to these restrictions is in the instrument by which such Person acquired an interest in the Properties. As soon as practicable before sale or transfer of title to a Condominium, or execution of a real property sales contract for such sale or transfer, the Owner of the Condominium shall provide to the purchaser copies of the Governing Documents listed in California Civil Code Section 1368(a) and its successor statutes. ARTICLE XIV DECLARANT'S RIGHTS AND RESERVATIONS 14.1 CONFLICTS. If there is a conflict between this Article and any other provision of the Governing Documents, this Article shall control. No amendment may be made to this Article without the prior written approval of Declarant. 14.2 CONSTRUCTION RIGHTS. Declarant has the right to (a) subdivide or resubdivide the Properties, (b) complete or modify Improvements to and on the Common Area or any portion of the Properties owned or leased solely or partially by Declarant, (c) alter Improvements and Declarant's construction plans and designs, (d)modify Declarant's development plan for the Properties, and (e) construct such additional Improvements as Declarant considers advisable in the course of development of the Properties so long as any Condominium in the Properties remains unsold. 2056-99886\CCRS\1047088.5 9/28/11 14.3 SALES AND MARKETING RIGHTS. Declarant's rights under this Declaration include the right to install and maintain such structures, displays, signs, billboards, flags and sales offices as may be reasonably necessary to conduct Declarant's business of completing construction and disposing of the Condominiums by sale, resale, lease or otherwise. 14.4 CREATING ADDITIONAL EASEMENTS. At any time before acquisition of title to a Condominium in the Properties by a purchaser from Declarant, Declarant has the right to establish on that Condominium additional licenses, easements, reservations and rights-of-way to itself, to utility companies, or to others as Declarant determines are reasonably necessary to the development and disposal of the Properties. 14.5 USE RESTRICTION EXEMPTION. Declarant, and any Person to whom Declarant may assign all or a portion of its exemptions under this Declaration, is exempt from the use restrictions established in this Declaration and the other Governing Documents. 14.6 ASSIGNMENT OF RIGHTS. Declarant may assign its rights under the Governing Documents to any successor in interest to any portion of Declarant's interest in the Properties by a Recorded written assignment. 14.7 AMENDMENT OF RIGHT TO REPAIR LAW PROVISIONS. This Article XIV and Sections 1.1.21, 1.1.32, 1.1.33, 5.1, 11.2 and 12.4 may not be amended without the prior written approval of Declarant until the expiration of all applicable statutes of limitation or repose for the filing of a complaint or suit or other legal remedies against Declarant or its affiliates under the Right to Repair Law(including tolling periods). 14.8 USE OF PROPERTIES. Declarant and its prospective purchasers of Condominiums are entitled to the nonexclusive use of the Common Area without further cost for access, ingress, egress, use or enjoyment, to (a) show the Properties to prospective purchasers, and (b) dispose of the Properties as provided in this Declaration. The use of the Common Area by Declarant may not unreasonably interfere with the use thereof by the other Owners. 14.9 DECLARANT APPROVAL OF ACTIONS. 14.9.1 General Rights. Until Declarant no longer owns a Condominium, and the expiration of all applicable statutes of limitations or repose for the filing of a complaint or suit or other legal remedies against Declarant under the Right to Repair Law (including any tolling periods), Declarant's prior written approval is required for any amendment to the Governing Documents which would impair or diminish Declarant's right to complete the Properties or dispose of the Condominiums. 14.9.2 Limit on Actions. Until Declarant no longer owns any Condominium, the following actions, before being undertaken by the Association, must first be approved in writing by Declarant: (a) Any amendment or action requiring the approval of First Mortgagees; 2056-99886\CCRS\1047088.5 9/28/11 (b) The annexation to the Properties of real property; (c) Any modification or termination of any provision of the Governing Documents benefiting Declarant. 14.10 SPECIAL. POWER OF ATTORNEY. Each Owner, by accepting and recording a Grant Deed to a Condominium in the Properties, is deemed to constitute and irrevocably appoint Declarant, for so long as Declarant owns all or any portion of the Properties, as Owner's Attorney- in-Fact, for Owner and for each of Owner's mortgagees, optionees, Owners, licensees, trustees, receivers, lessees, judgment creditors, heirs, legatees, devisees, administrators, executors, legal representatives, successors and assigns, whether voluntary or involuntary, and each Owner is deemed thereby to have conveyed to Declarant a special power of attorney coupled with an interest authorizing Declarant to act as each Owner's attorney in fact to prepare, execute, acknowledge and record any amendment to or restatement of a Condominium Plan, as Declarant deems to be reasonably necessary in order to correct errors,to conform to as-built conditions, or to bring the Plan into compliance with any City, County, State or Federal laws or regulations, and to execute and Record all documents and maps necessary to allow Declarant to exercise its rights under this Article. The acceptance or creation of any Mortgage or other encumbrance, whether or not voluntary, created in good faith, or given for value, shall be deemed to be accepted or created subject to each of the terms and conditions of the Power of Attorney described in this Section. [SIGNATURES ON FOLLOWING PAGE] 205 6-99886\CCRS\1047088.5 9/28/11 [SIGNATURE PAGE TO DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS AND RESERVATION OF EASEMENTS] This Declaration is dated for identification purposes Se-P1—M Bi5X '2=-R ,2011 HABITAT FOR HUMANITY OF ORANGE COUNTY, INC., a California public benefit corporation By: O Print Name: 5kAP20iQ 1✓L US Title: ME7C.UT1 VE DI P-Ec7DT2 APPROVED AS TO FORAM By: J ,NIF_E CGRATH,Cyr B Print Name: M ArP K K-MA-M bo Deputy City Attnmey Title: Sr. VICE PREStbe Declarant STATE OF CALIFORNIA COUNTY OF ORANGE On ,qEfV—(014 E CR ?f ,ZO l 1 ,before me, P-L MA. RQSS I cL N OlWf j PUb (here insert name and tirfe of the officer) personally appeared MA 9 KDRAN®D DdVD 5HA RW la-LOS who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s)is,are subscribed to the within instrument and acknowledged to me that kc/siw/they executed the same in l*l=r/their authorized capacity(ies), and that by r/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s)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 ni official seal. i RITA A.ROSS ! Commission# 1929080 i:® Notary Public -California D = Orange County Signature: My Comm.Ex Tres A r 15 2015 --- - - - - - - - - - - - (SEAL) 2056-99886\CCRS\1047088.5 9/28/11