Loading...
The URL can be used to link to this page
Your browser does not support the video tag.
Home
My WebLink
About
HECKETHORN, SEAN & JACQUELYN 7871 Happy Drive #102 - Pacific Park Villas Project - Sassounian - Talbert-Beach Redev Area - Down Payment Assistance Program 1/16/96 Expires 2026 (Loan Forgiven) - 1996-01-16
RECORDING REQUESTED BY: AND WHEN RECORDED MAIL TO: City of Huntington Beach (Pacific Park villas) Economic Development Department 2000 Main Street, PO Box 190 Huntington Beach, CA 92648 Recorded in Official Records, County of Orange Darlene Bloom, Interim Clerk -Recorder I III II I I 11111111111111111111111111111111111111111111110.00 20020502234 01:40pm 06/14/02 200 69 R01 3 0.00 0.00 0.00 0.00 4.00 0.00 0.00 0.00 SPACE ABOVE THIS LINE FOR RECORDER'S USE FULL RECONVEYANCE THE CITY OF HUNTINGTON BEACH as duly appointed Trustee under Deed of Trust hereinafter referred to, having received from holder of the obligations thereunder a written request to reconvey, reciting that all sums secured by said Deed of Trust have been fully paid, and said Deed of Trust and the note or notes secured thereby having been surrendered to said Trustee for cancellation, does hereby RECONVEY, without warranty, to the person or persons legally entitled thereto, the estate now held by it thereunder. Said Deed of Trust was executed by SEAN G. HECKETHORN D JACQUELYN A. H Trustor, and recorded in the official records of Orange County, California, on JANUARY 30, 1996 AS INSTRUMENT NO. 19960044556. DESCRIPTION: See "Exhibit A" for full legal description. lw 04 � David C. Biggs "V Director of Economic Development City of Huntington Beach Trustee Date: May 29, 2002 CFIV ' JUN 2 4 2002 DEPARTMEN r- OF ,F'CO !Ofit IC DEVELO- PhME. EXHIBIT A (LEGAL) A Condominium composed of: PARCEL 1: An undivided one twenty second (1/22) fee simple interest as a tenant in common in and to all of the Common Area defined in Declaration referred to below and described in the Condominium Plan ("Plan") for Lot 1 of Tract No. 14828, which Plan was recorded on August 25, 1.994 as Instrument No. 94-0525335 of Cfficial Records of Orange County, over Lot 1 of Tract No. 14828, in the City of Huntington Beach, County of Orange, State of California, as per map filed in Book 706, Pages 27 to 29 of Miscellaneous Maps, in the office of the County Recorder of said County. Excepting therefrom all oil, petroleum, asphaltum, gas, minerals and other hydrocarbon substances, as reserved in deed recorded Augu.st 16, 1921 in. Book 401, Page 3-c6 of Deeds, and in various other deeds of record. PARCEL 2: Unit No. 5 consisting of certain airspace and surface elements, as shown and described in the Condominium Plan referred to in Parcel 1 above. PARCEL 3: Non-exclusive easements for access, ingress, egress, use, enjoyment, drainage, State of California County of Orange ss. On May 29, 2002 , before me, --------- Laura A. Nelson, Notary Public ------- , Date Name and Title of Officer (e.g., 'Jane Doe, Notary Public") personally appeared ------------------------ David C. Biggs ---------------------------------- ---- Name(s) of Signer(s) [Vf personally known to me ❑ proved to me on the basis of satisfactory evidence LAUE.A A. NELSON Commission # 1226066 Notary Public - California 1jj@,yC OrangeCountyomm. Public . J 21=3Vw Place Notary Seal Above to be the person(s) whose name(la) is/afe subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/k "Aheizr authorized capacity(ioa), and that by his/Ue4;4Uek signature(s) on the instrument the person(a), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Signature of Notary 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: Full Reconveyance— Heckethorn Document Date: 5129102 Signer) Other Than Named Above: None Capacity(i9s) Claimed by Signer Signer's Name: David C. Biggs Number of Pages: ❑ Individual CYf Corporate Officer — Title(s): Director of Economic Development ❑ Partner — ❑ Limited ❑ General ❑ Attorney in Fact ❑ rustee ❑ Guardian or Conservator E3 Other: Signer Is Representing: The City of Huntington Beach 2 0 1999 National Notary Association • 9350 De Soto Ave., P.O. Box 2402 • Chatsworth, CA 91313.2402 • www.na11"W*tary.org Prod. No. 5907 Reorder: CaN Toll -Free 1-800-876-8827 VH TO: FROM: SUBJECT: DATE: . OFFICE OF THE CITY CLERK CITY OF HUNTINGTON BEACH INTER -DEPARTMENT COMMUNICATION Future City Clerks and Deputy City Clerks Janelle Case, Deputy City Clerk per Instructions by Connie Brockway, City Clerk Down Payment Assistance Forgivable Loans September 16, 1999 The attached documents are included in this file to assist you in the future to determine the forgiveability of the down payment assistance loans. DOWN PAYMENT ASSISTANCE PROGRAM Pacific Path Villas Council/Agency Loan No. Name Property Date Address---- - - --Amount------.-.- ----- -- /95-01 Carillo, Ana 7861 Happy Drive #102 92648 35,000 1/3/95 l' /95-02 Lawrence, James/Jeanette 1800 51 Joyful Lane #101A 9264-8 -35,000 1/3/95 vl 95-03 Wong, Wesley 7861 Happry Drive #202 9264-8- ---3-5,-0-0-0- 1/3/95 95-04 Hocker, Christopher PV—andereb, -da--�Ie— 7861 Happy Drive #101 926-4-8---- 35,000 ------1/3/95 95-06 ------------ Rivera, Victor & Burgess, Debra ...... 18061 Joyful Lane #104 92648 35,000 4/3/95 96-01 j,- Heckethorne, Sean/Jacquelyn 7871 Happy Drive #102 92648 18051 Joyful Lane #104 92648 35,000 35,000 35,000 1/16/96 3/4/96 4/1/96 7/15/96 96-02 Margolis, Peter 96-03 Wienfeld, Julie 18061 Joyful Lane #205 92648 96-04 Peltier, Edward ---- —7871----- Happy Drive #201 92648 --- 35.000 96-05Wallace, Barbara Jo 18051 Joyful Lane #205 92648- 35,00-0- 8/5/96 96-06 Murch, Gregory s. -k-rueck, --Deborah 18051 Joyful Lane #102 92648 35,000 8/5/96 97-01 J. —tRobert/Kathy -1-80--61- -Joyful Lane #103-92648 35,000 35,000 35,000 --1-/2-1/97 4/30/97 5/5/97 97-02 0 s t e r h n-e I 18061 Joyful Lane #102 92648- 97-03 Hosseinali, Faroukh 18061 Joyful Lane #201 92648 197-04 ITorchione, Richard .18051 Joyful Lane #201 92648 35,000 7/1 . /97 CITY OF HUNTINGTON BEACH Inter -Office Communication Economic Development Department DATE: June 12, 2000 TO: Gus Duran, Housing/Redevelopment Manager FROM: Joyce DeKreek, Housing/Redevelopment Consultan SUBJECT: Research on Loan Forgiveness, lst Time Home -Buyers Program Redevelopment Set -Aside, $400,000 and Redevelopment Set -Aside, $750,000 I have reviewed our records regarding funding of 1" Time Home -Buyers Program to determine the names and amount of assistance which benefited the applicants from the $400,000 in Redevelopment Set -Aside funds approved by the Redevelopment Agency (RDA) at their November 1, 1993, meeting and from the $750,000 in Redevelopment Set -Aside funds approved by the RDA for the Pacific Park Villas at their February 6, 1995 meeting. The Redevelopment Agency approved nine applicants from the $400,000 allocation in conjunction with the City's CDBG lst Time Home -Buyers Program and one additional applicant for the RDA lst Time Home -Buyers Program only. The RDA portion of these loans are Bastou ($25,000), Dieckmeyer ($23,000), Griffen ($25,000), Hoang ($23,000), Lawson ($23,000), Melvin_($35,000), Otto ($23,000), Quick, S. ($16,717), Quick, T. ($25,000), Rivera H. ($25,000). Quick, T. withdrew from the CDBG loan but maintains the RDA loan.. These loans total $243,717. The Redevelopment Agency approved fifteen (15) applicants from the $750,000 allocation at Pacific Park Villas (PPV) to participate in the Redevelopment Agency St Time Buyer Program. The names and amounts are (Carrillo ($35,000), Forchione ($35,000), Heckethorn ($35,000), Hosseinali ($35,000), Hocker ($35,000), Lawrence ($35,000), Murch ($35,000), Osterhoudt ($35,000), Peltier ($35,000), Rivera -Burgess ($35,000), Wallace ($35,000), Weinfeld ($35,000), Wong ($35,000), Krueck ($35,000), Margoles ($35,000). These loans total $525,000. Four loans (Melkerson/Uniack, Ojeda, Rene/White, Stratton), previously approved by RDA were not funded. Gljoyce/lntermemo Reconvey.doc One loan (Wallace) was assumed by another qualified buyer These loans accrue simple interest at 5%, due and payable upon sale to a non qualified buyer and has shared equity. Cc: Connie Brockway, City Clerk Paul D'Alessandro, Deputy City Attorney David Biggs, Director, Economic Development John Reekstin, Director of Administrative Services Dan Villella, Director of Finance Jake Rahn, Administrative Services Hank Reveles, Sr. Accountant Joyce de Kreek, Economic Development Steve Holtz, Development Specialist Gljoyce/Intermemo Reconvey.doc 95-01 (2-1-95) RDA 12-19-94 95-02 (2-1-95) RDA 12-19-94 95-03 (2-1-95) RDA 12-19-94 95-04 (2-1-95) RDA 12-19-94 95-06 (4-12-95) RDA 4-3-95 96-01 (1-24-96) RDA 1-16-96 96-02 (3-7-96) RDA 3-4-96 96-03 ( RDA 4-1-96 96-04 (7-17-96) RDA 7-15-96 96-05 (8-7-96) RDA 8-5-96 96-06 (8-7-96) RDA 8-5-96 97-01 (1-29-97) RDA 1721-97 97-02 (4-30-97) RDA PACIFIC PARK VILLAS ($750,000 — RDA) Carillo, Ann $ 35,000 7861 Happy Drive, #102 Lawrence, James and Jeanette $ 35,000 18051 Joyful Lane, #16 Wong, Wesley Chi $ 35,000 7681 Happy Drive, #202 Hocker, ChristopherNandereb, Gayle$ 35,000 7681 Happy Drive, #101 Rivera, Victor/Burgess, Debra $ 35,000 18061 Joyful Lane, #104 Heckethorne, Sean & Jacquelyn $ 35,000 7871 Happy Drive, #102 Margolis, Peter Weinfeld, Julie Peltier, Edward Wallace, Barbara Jo Murch, Gregory Krueck, Deborah Osterhoudt, Robert and Kathy $ 35,000 18651 Joyful Lane, #104 $ 35,000 18061 Joyful Lane, #205 $ 35,000 7871 Happy Drive, #201 $ 35,000 18051 Joyful Lane, #205 $ 35,000 18051 Joyful Lane, #102 $ 35,000 18061 Joyful Lane, #101 $ 35,000 18061 Joyful Lane, #102 &/joyce/Intermemo Reconvey.doc ♦ as s k F u se # s;' Yrlf, � � ie 97-03 (5-14-97) Hosseinali, Faroukh $ 35,000 18061 Joyful Lane, #201 RDA 97-04 (7-23-97) Forchine, Richard $ 35,000 18051 Joyful Lane, #201 RDA 7-21-97 lst TIME BUYER ASSISTANCE ($400,000 RDA) 94-4 (2-11-94) Lawson, Sally $ 23,000 409 Utica Avenue #A-1 (RDA 1-18-94) 94-5 (2-11-94) Quick, Shauna $ 16,717 409 Utica Avenue #C-32 (RDA 1-18-94) 94-6 (2-11-94) Dieckmeyer, Barbara $ 23,000 409 Utica Avenue#B-21 (RDA 2-22-94) 94-8 (2-11-94) Otto, T./Shorb R. $ 23,000 409 Utica Avenue #A-7 (RDA 1-18-94) 94-10 (2-11-94) Hoang, Tam $ 23,000 409 Utica Avenue #D-37 (RDA 2-22-94) 94-11 (5-18-94) Bastou, Valerie' $ 25,000 409 Utica Avenue #D-43 (RDA 5-18-94 94-12 (5-18-94) Quick La Reine, Teresa $ 25,000 409, Utica Avenue #A-9 (RDA 5-18-94) 94-13 (6-23-94) Melvin, Patrick $ '35,000 409 Utica Avenue #D-39 (RDA 6-20-94) 94-14 (7-27-94) Rivera, Hector & Iciar $ 25,000 409 Utica Avenue #A5 (RDA 7-18-94) 94-17 (10-4-94) Griffen, Olga Christina $ 25,000 409 Utica Avenue #C-23 (RDA 9-19-94) $ 243,717 G:/joyce/Intermemo Reconvey.doc K TO: FROM: DATE: SUBJECT: INDEX: BACKGROUND CITY OF HUNTINGTON BEACH Inter -Department Communication Gus Duran, Economic Development Gail Hutton, City Attorney June 1, 1999 Determination of Loan Forgiveness RLS 99-359 You have asked for a determination of whether several loans made by the City of Community Development Block Grant funds, for the first time home buyer down payment assistance program, are forgivable. ISSUE Are the nine loans forgivable? ANSWER Yes, if they were funded with the first $100,000 appropriated for this program. ANALYSIS As part of the 1993-94 CDBG program the City Council approved $100,000 as a pilot program to provide down payment assistance to moderate income households. We have reviewed several RCAs submitted by your department to the City Council for implementation of this program. The RCAs we reviewed were the originals in the City Clerk's office. From our review of these documents, we have developed the following chronology: 10/25/93: The City Council approved sample loan documents and four participants: Diane Culaciati, Michele Tullock, Osman Taban, and Caroline Sutherland in the total amount of $40,475. (RCA attached hereto as Attachment 1). 4/s:4-99Memos: Duran527 11/15/93: The City Council was requested to approve and additional S100,000 in CDBG funds for the program. The Council deferred the item to December 6, 1993. (RCA attached hereto as Attachment 2). 12/6/93: The City Council approved three more participants in the original program: Michelle Schmaderer, Carol Kanarski, and Nicholas Kormeluk. The amounts of their loans are not listed. (RCA attached hereto as Attachment 3.) 12/20/93, Item E-17: The City Council approved an additional participant in the program, David Dixson, for the amount of S 10,000, and increased the amount for participant Nicholas Kormeluk from S8,600 to $10,600. (RCA attached hereto as Attachment 4.) 12/20/93, Item F-2: The City Council approved an additional S 100,000 for the program, but changed the program to require repayment of these additional funds. There are two important attachments to this RCA. The first is entitled "Approved Participants," and lists the following six participants: Culiaciati, Taban, Sutherland, Schmaderer, Kanarski, and Kormeluk, in the total amount of $61,952.2 The second important document attached to this RCA is the list of "Pending Participants." It shows eight more participants in the total amount of S59,100. It is not determinable from this RCA whether these persons were intended to be in the grant program or the loan program, and we do not know when, if ever, these participants were actually approved. 1/3/94: The City Council approved three more participants in the original, non -repayment program: Judy Young, Treva Love, and Ellen Ommondson, in the total amount of $31,000. When added to the previously committed amount of S73,952, the total amount of funds committed is $104,952. This exceeds the original $100,000 appropriated for the original, non - repayment program. The analysis portion of this RCA states that "the approvals herein will be the first funded with the new appropriation," which implies that at least a portion of the funds used for these participants were part of the funds that were conditioned for repayment, as opposed to the original, non -repayment funds. However, the total numbers listed are roughly consistent with the original $100,000 set aside for the grant program. The total amount of loan funds used is less than $5,000. (RCA attached hereto as attachment 5). Our review of the above documents and chronology of events indicates that the Council did not intend to require repayment of the original $100,000 appropriation. Clearly, then, the loans made to Culiaciati, Taban, Sutherland, Schmaderer, Kanarski, Dixson and Kormeluk are forgivable, because they were funded using $73,952 of the first $100,000 appropriation. The problem is presented by the transactions with Young, Love, and Ommondson. We believe that the Council's intent was to not require repayment from these participants. Unfortunately, there was only $26,048 of the original, non -repayment funds available to these participants, and collectively, they received $31,000. Thus, a small portion of the funds used for these 1 Note that an attachment to this RCA lists ten approved participants. Since the dates listed are after the Council meeting of 12/6/93, we believe that this list has been erroneously added to the 12/6/93 RCA. z Please note that earlier during the same meeting, the Council had also approved David Dixson for S 10,000, and an additional $2000 for Kormeluk. Thus the amount committed from the original $100,000 was actually $73,952. 2 4/s:4-99,M emos: Duran527 participants must have come from the second S100,000, which the Council appropriated with the condition that the loans be repaid, not forgiven. CONCLUSION There are two conflicting Council actions. The Council's intent was to include participants Young, Love and Ommondson in the original, forgivable loan program. However, it appears that a portion of the funds actually used for the loans to Young, Love and Ommondson were from the second appropriation of funds, which included a repayment condition. Therefore, we recommend that the Council clarify this conflict by approval of an RCA that forgives the loans made to Young, Love and Ommondson. C-�7� Gail Hutton City Attorney 3 4/s:4-99Memos: Duran527 x Council/Agency Meeting Held: S' -17-29 Deferred/Continued to:,Z City Clerk's ignature C- 134&c1c �d Approved ❑ Conditionally Approved ❑ Denied -0 -/ H+1, -+,v ss.?r Council Meeting Date: May 17, 1999 Department ID Number: ED 99-29 CL,Ar CITY OF HUNTINGTON BEACH REQUEST FOR REDEVELOPMENT AGENCY ACTION SUBMITTED TO: HONORABLE CHAIRMAN AND REDEVELOPMENT AGENCY MEMBERS SUBMITTED BY: RAY SILVER, Executive Director J i PREPARED BY: DAVID C. BIGGS, Economic Development Director > SUBJECT: Authorize the Transferability of 15 Pacific Park Villas Down Payment Assistance Loans — Approve and Authorize Execution of Documents Statement of Issue, Funding Source, Recommended Action, Alternative Action(s), Analysis, Environmental Status, Attachment(s) Statement of Issue: Currently, the down payment assistance loans made by the Redevelopment Agency for Pacific Park Villas must be individually approved by the City Council. In order to facilitate transfers of these loans, staff is requesting that the Redevelopment Agency establish procedures for administrative approval of these transactions. Funding Source: None as a result of this action. Recommended Action: Motion to: 1. Authorize the Executive Director and the Agency Clerk to execute on behalf of the Redevelopment Agency any and all documents necessary to transfer to new low and moderate -income homebuyers the Down Payment Assistance Loans made by the Agency at the inception of the Pacific Park Villas project. See Attachment No. 3 "List of Down Payment Assistance Borrowers at Pacific Park Villas." (All documents to be approved as to form by the Agency Counsel). 2. Authorize the Executive Director and Agency Clerk to execute on behalf of the Redevelopment Agency any and all documents necessary to subordinate or to reconvey the Agency loans (notes and deeds of trust), as these home owners refinance, sell their homes or meet their loan obligations, as stated in their notes and deeds of trust. See Attachment No. 3 "List of Down Payment Assistance Borrowers at Pacific Park Villas." (All documents to be approved as to form by the Agency Counsel). 6"5 x REQUEST FOR REDEVELOPMENT AGENCY ACTION MEETING DATE: May 17, 1999 DEPARTMENT ID NUMBER: ED 99-29 Alternative Action(s): The Redevelopment Agency can retain the authority to approve the transferability of each and every Down Payment Assistance Loan made on this project. The number of loans originated for this project was 16 loans. This means that each and every time, Agency staff will have to prepare a Request for Agency Action, thereby increasing staff time and costs. It will also delay the ability the sellers and buyers to close escrow quickly. In some cases the delays could cause undue hardship and cause the sale of properties to fall out of escrow. Analysis: In 1996, the Redevelopment Agency made 15 Down Payment Assistance Loans to low- and moderate -income homebuyers purchasing dwellings at the Pacific Park Villas residential project located near Talbert and Beach. The purpose of these loans were to expedite the sales of homes in the Pacific Park Villas project and simultaneously meet the Redevelopment Agency's obligation to assist low and moderate income persons with 20% Set Aside Funds, as required by Redevelopment Law. The loans made to these homebuyers were meant to be transferable to other low and moderate -income families. The City Attorney's Office has been requested to make a determination of the transferability and has rendered a decision indicating that the loans are transferable to other homebuyers that meet the income qualification of having incomes below 120% of the median income for Orange County. (See attached memorandum from the City Attorney's Office). Some of these homebuyers are now ready to move on with their lives and are desirous to sell their properties. To facilitate the closing of escrows without significant delays to sellers and buyers, the Economic Development Department is requesting that the Redevelopment Agency Board authorize the Executive Director and the City Clerk to administratively manage the transferability of these loans. This will permit the Executive Director to execute documents without having to come the Agency Board on each and every loan, especially since these loans were prepared with the identical notes, deeds of trust and Covenants, Conditions and Restrictions (CC&R's). The City Attorney's Office has provided an opinion on the loans' transferability. Environmental Status: N/A Attachment(s): 1. 1 City Attorney's Office Memorandum. 2. Sample Loan Documents. 3. 1 List of Down Payment Assistance Borrowers at Pacific Park Villas. RCA Author: Gus Duran X1529 RCAPPV.DOC -2- 05/05/99 9:34 AM City Attornev's Office Memorandum FOB CITY OF HUNTINGTON BEACH Inter -Department Communication TO: David Biggs, Director of Economic Development FROM: Gail Hutton, City Attorney DATE: April 26, 1999 SUBJECT: Wallace Loan Documents You have asked several questions concerning the Wallace loan documents. 1. Is the loan transferable? A. Yes, with the Agency's prior written consent. See Section 18 of the Loan Agreement. 2. What are the income limits for purchasers? A. No greater than 120% of median income (moderate income) pursuant to Section 9 of the Loan Agreement. 3. Does the new buyer need to meet the income requirements of the CC&Rs? A. Yes. 4. Is the Equity Share payable if the buyer qualifies under the CC&Rs? A. Yes. 5. Can the interest be forgiven if the property's fair market value does not exceed 5% per year? A. No, unless the Agency approves forgiving the interest. 6. Should the Equity be calculated minus the selling expenses? • ►. Please contact me if you have any further questions. Gail Hutton City Attorney 4/s:4-99Memos: Bi esis426 El CITY OF HUNTINGTON BEACH Inter -Office Communication Economic Development Department TO: Gail Hutton, City Attorney Paul D'Alessandro, Deputy City Attorney FROM: David C. Biggs, Director of Economic Development DATE: April 20, 1999 SUBJECT: First Time Home Buyer Loan for Barbara Jo Wallace Yesterday, April 19, 1999, Gus Duran, the Department's Housing and Redevelopment Manager met with Ms. Barbara Jo Wallace, her real estate agent and other property owners of the Pacific Park Villas project to discuss their concerns regarding First Time Homebuyer loans made to them by the Redevelopment Agency. As you may recall, at a previous City Council meeting, Mr. Bob Osterhoudt made a plea to the City Council requesting assistance for the property owners of this complex. In addition, Ms. Wallace has written to the Mayor and the City Attorney (April 2, 1999) requesting the Redevelopment Agency's assistance in resolving her needs to sell her property with the Agency's assistance. The Economic Development Department is ready and willing to help Ms. Wallace and the other property owners sell their homes, as they need to move on with their lives when they desire, but we are in need of a legal opinion regarding the following issues: 1. Is the loan made to Ms. Wallace, which is similar to those made to the other buyers of Pacific Park Villas, transferable? 2. What are the income limit requirements for the purchasers of these homes when a property owner sells his/her home? (See attached 1999 Orange County Affordable Housing Worksheet issued by the la-vv firm of Stradling, Yocca, Carlson & Rauth.) 3. Does a new buyer need to meet the income requirements established in the CC&R's? 420/99:Gus Duran:Houdev:WALLACE 4. Is the "Equity" payable if the sellers sell their home to a buyer that meets the income requirements established in the Note and the CC&R's? 5. Can the interest be forgiven if the property's "fair market value" does not exceed 5% per year? 6. Should the "Equity" be calculated minus the selling expenses (See Section 4A of Loan Agreement)? We are requesting an immediate opinion on these issues, as Ms. Wallace has already purchased a home in the State of Washington and has a pending sale of her property in Huntington Beach in the works, subject to the Agency's determination on these issues. At the moment, her pending sale is being held up because neither the seller, nor the buyer knows what to do with the information on the note and deed of trust, or the CC&R's. Attached are copies of Ms. Wallace's documentation. These are the following: 1. Loan Agreement to Ms. Wallace from the Redevelopment Agency. 2. Promissory Note 3. Deed of Trust with Assignment of Rents 4. Lending Instructions 5. Certificate of Proposed Transferee 6. Declaration of Conditions, Covenants and Restrictions for Property 4/20/99:Gus Duran:Houdev:WALLACE Sample Loan Documents ATTAC M IL I :: S LOAN AGREEMENT THIS LOAN AGREEMENT (the "Agreement") is made this 5±� , day of 19q by and between BARBARA JO WALLACE ("Participant") and the RED VELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic (the "Agency") RECITALS A. Participant has entered into an agreement (the "Purchase Agreement") to purchase that certain real property commonly known as 18051 Joyful Lane, 9205 , Huntington Beach, California, and more particularly described in Exhibit A attached hereto and incorporated herein (the "Property"). B. Participant requires assistance to purchase the Property and would not be able to purchase the Property without such assistance. Participant is a person or family of low or moderate income and currently earns less than 120% of the current annual median income for the Orange County area, as those terms are defined by California Health and Safety Code Section 50093. C. Participant has represented to the Agency that Participant and Participant's immediate family intend to reside in the Property at all times throughout the term of this Agreement. D. The Agency desires to assist persons of low and moderate income to -purchase residential property to increase, improve, and preserve low and moderate income housing available at an affordable housing cost within the City of Huntington Beach (the "City"). E. The Agency wishes to lend, and Participant wishes to borrow, Program funds to assist Participant to purchase the Property upon the terms and conditions set forth herein. NOW, THEREFORE, for good and valuable consideration the parties agree as follows: 1. ' Agency Loan. The Agency shall loan to Participant (the "Agency Loan") the amount of Thirty-five Thousand Dollars ($35,000.00) subject to the conditions and restrictions set forth herein and those set forth in the Promissory Note and the Disclosure Statement for the Program. The Agency Loan shall be paid to the seller of the Property (the "Seller") by the Agency through deposit of the Agency Loan proceeds into escrow with TIEMPO ESCROW, INC., A CALIFORNIA CM)ORATION (the "Escrow Agent") (Escrow No. 9442--e ). The Agency shall direct the Escrow Agent to apply the proceeds of the Agency Loan on behalf of Participant to the purchase price of the Property, and, at Participant's election, to the costs of closing, escrow fees, recording fees, loan points and fees, and/or document fees. At such time, Participant shall execute and deliver to the Agency a Loan Agreement Page 1 of 8 4\s\(i:4-96-Agrce: W allacc:loanagree RM 96-523 7/26/96 promissory note in favor of the Agency as holder, in the amount of the Agency Loan, with simple interest at five percent (5%) per annum, due in thirty (30) years and payable upon the earlier sale, refinancing or transfer of the Property, substantially in the form of the "Promissory Note" attached hereto as Exhibit B and incorporated herein. Participant shall also execute and deliver to the Agency a second deed of trust encumbering the Property which shall secure the Promissory Note (the "Agency Deed of Trust"), in the form of Exhibit C attached hereto and incorporated herein. 2. Maintenance of Property. Participant shall maintain the improvements on the property in a manner consistent with community standards and in a manner which will uphold the value of the Property, and shall keep the Property free from any accumulation of debris and waste materials. Participant 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 comply with all applicable federal, state and local laws. 3. Due on Sale Transfer or Refinaa6ag. Participant agrees to notify the Agency not less than thirty (30) days prior to (1) the sale or transfer of the Property or (ii) any refinancing of the lien of the Agency Deed of Trust or any lien to which the lien of the Agency Deed of Trust is subordinate (the "First Mortgage"). The Agency Loan and all interest. accrued thereon shall be due and payable upon (i) such sale or transfer, (ii) the refinancing of the First Mortgage for a loan amount in excess of the then current loan balance or for an amortization period longer than the loan secured by the First Mortgage, or (iii) Participant is no longer an occupant of the Property pursuant to Section 5 of this Agreement or is in material default of any other obligation pursuant to this Agreement. At the request of Participant, the Agency may, in its sole discretion, waive the requirements of this Section 3 and extend the term of the Agency Loan. 4. Equity Sharing. In the event that the Agency Loan becomes due and payable prior to the thirtieth anniversary of the date of this Agreement, Participant shall pay to Agency concurrently with such sale, transfer or refinancing, an amount equal to the "Equity Share Amount." The Equity Share Amount shall be determined by applying a percentage factor (the "Applicable Factor") to the difference between the Sales Price and the Purchase Price (defined below) as follows: Prior to fifth anniversary of the Agency Deed of Trust: 2. After fifth anniversary but prior to sixth anniversary: After sixth anniversary but prior to seventh anniversary 4. After seventh anniversary but prior to eighth anniversary: Loan Agreement Page 2 of 8 fifty percent (50%) forty-eight percent (48%) forty-six percent (46%) forty-four percent (44%) 4\s\<i:4.96-AgrceMall accaoanagrcc RLS 9G-523 7/26/96 5. After eighth anniversary but prior to ninth anniversary: forty two percent (42%) 6. After ninth anniversary but prior to tenth anniversary: forty percent (40%) 7. After tenth anniversary but prior to eleventh anniversary: thirty-eight percent (38%) 8. After eleventh anniversary but prior to twelfth anniversary: thirty-six percent (36%) 9. After twelfth anniversary but prior to thirteenth anniversary: thirty-four percent (34%) 10. After thirteenth anniversary but prior to fourteenth anniversary: thirty-two percent (32%) 11. After fourteenth anniversary but prior to fifteenth anniversary: thirty percent (30%) 12. After fifteenth anniversary but prior to sixteenth anniversary: twenty-eight percent (28%) 13. After sixteenth anniversary but prior to seventeenth anniversary: twenty-six percent (26%) 14. After seventeenth anniversary but prior to eighteenth anniversary: twenty-four percent (24%) 15. After eighteenth anniversary but prior to nineteenth anniversary: twenty-two percent (22%) 16. After nineteenth anniversary but prior to twentieth anniversary: twenty percent (20%) 17. After twentieth anniversary but prior to twenty-first anniversary: eighteen percent (18%) 18. After twenty-first anniversary but prior to twenty-second anniversary: sixteen percent (16%) 19. After twenty-second anniversary but prior to twenty-third anniversary: fourteen percent (14%) Loan Agreement Page 3 of 8 4\s\G:4-9 6 -Agree: Wallace: loanagree RLS 96-523 7/26/96 20. After twenty-third anniversary but prior to twenty-fourth anniversary: twelve percent (12%) 21. After twenty-fourth anniversary but prior to twenty-fifth anniversary: ten percent (10%) 22. After twenty-fifth anniversary but prior to twenty-sixth anniversary: eight percent (8%) 23. After twenty-sixth anniversary but prior to twenty-seventh anniversary: six percent (6%) 24. After twenty-seventh anniversary but prior to twenty-eighth anniversary: four percent (4%) 25. After twenty-eighth anniversary but prior to twenty-ninth anniversary: two percent (2%) 26. After twenty-ninth anniversary but prior to thirtieth anniversary: one percent (1%) 27. After thirtieth anniversary: zero percent (0%) The "Purchase Price" is the price paid by the Participant to the Seller for Seller's interest in the Property, exclusive of escrow fees, title insurance costs, broker's commissions, loan fees or any other closing or transaction costs. The actual cost to Participant of all capital improvements to the Property made while Participant owned the Property may be added to the Purchase Price if Participant complies with the following: No capital improvements which cost more than two thousand five hundred dollars ($2,500) shall be added to the Purchase Price unless within sixty (60) days following completion of such capital improvements to the Property Participant shall send the following to the Agency: (1) an itemized list of the improvements, (ii) proof of completion of the improvements, and (iii) evidence of the cost of the improvements. The costs incurred by the Participant for capital improvements which cost less than two thousand five hundred dollars ($2,500) shall be added to the Purchase Price upon Participant's submission of evidence of such costs to the Agency, in a form reasonably satisfactory to the Agency, prior to the due date of the Agency Loan. The "Sales Price" is the price paid by the Buyer of the Property to Participant for Participant's interest in the Property, exclusive of escrow fees, title insurance costs, broker's commissions, loan fees or any other closing or transaction costs. Loan Agreement Page 4 of 8 4\s\G:4-96-Agrcc: W al Iacc:loanagrce RLS 9G-523 7/26/96 t f A. Equity Share Upon Sale or Transfer. The Equity Share Amount shall be payable to the Agency upon sale or transfer of the Property to a person or persons (the "Buyer") whose income exceeds I20% of the current annual median income for the Orange County area. If the Buyer does not submit an income verification statement to the Agency, the Buyer shall be deemed to exceed such income limit. If the Buyer does not exceed the aforesaid income limit, the Equity Share Amount shall not become payable. B. Equity Share Upon Refinancing or Failure to Occupy. The Equity Share Amount shall be payable to the Agency upon a refinancing, failure to occupy the Property or material breach of any other provision of this Agreement which causes the Agency Loan to become due and payable. The Sales Price for purposes of determining the Equity Share Amount shall be determined by an appraisal of the Property. The Agency shall appoint a certified, independent, -appraiser to conduct an appraisal of the Property,at Participant's expense, and Participant agrees t at in such event the Equity Share Amount shall be the Applicable Factor multiplied by the difference between the Purchase Price and the appraised value of the Property as of the time of such refinancing. This Agreement shall be terminated upon the Participant's repayment of the Agency Loan and payment of the Equity Share Amount as provided in this Agreement. C. Expiration of Equity Share Obligation. In the event the Participant does not sell or transfer the Property, does not fail to occupy the Property, does not refinance, or is not in material breach of any other provision of this Agreement before the Thirtieth anniversary of the date of this Agreement, the Participant shall have no obligation to pay the Equity Share Amount to Agency upon any later sale, transfer or refinancing. 5. Occupancy Standards. The Property shall be used as the personal residence of Participant and Participant's immediate family and for no other purpose. Participant shall not enter into an agreement for the rental or lease of the Property. 6. Income Information. Participant has submitted an eligibility verification form to the Agency prior to execution of this Agreement. Participant represents and warrants to the Agency that all information Participant has provided and will provide in the future is and will be true, correct and complete. Participant acknowledges that the Agency is relying upon Participant's representations that Participant's income does not exceed 120% of the area median income and would not have entered this Agreement if Participant's income exceeded 120% of the area median income. 7. Loan Servicinp. The Agency may contract with a private lender to originate and service the Agency Loan. 8. Participant Financing. Participant shall obtain financing for the purchase of the Property from the Southern California Home Financing Authority or a reputable institutional lender approved by the Agency (the "Lender"). The lien secured by the Agency Deed of Trust Loan Agreement Page 5 of 8 4\s\G:4-96-Agree: W alIace:loanagrcc RLS 9G-523 7/26/96 shall only be subordinated_ to a first lien on the Property held by the Lender or Lender's assigns. In addition, not less than three percent (3%) of the Purchase Price of the Property shall be paid in cash from Participant's own resources and not from the proceeds of a loan. 9. Covenants. Participant and the Agency shall execute and have recorded in the Official Records of Orange County, California, a "Declaration of Conditions, Covenants and Restrictions for Property," substantially in the form of Exhibit D attached hereto and incorporated herein, in which Participant agrees that the Property shall only be owned by Participant or other persons or families of low or moderate income available at an affordable housing cost, as those terms are defined in California Health & Safety Code Sections 50093 and 50052.5, and that Participant shall not discriminate against any person or group of persons on the basis of race, color, religion, sex, marital status, national origin or ancestry. Such covenants shall run with the land, in favor of the Agency and the City. 10. Non -Waiver. Failure to exercise any right the Agency may have or be entitled to, in the event of default hereunder, shall not constitute a waiver of such right or any other right in the event of a subsequent default. 11. Indemnification. The Participant shall defend, indemnify and hold harmless the Agency and the City of Huntington Beach and their respective officers, agents, employees, representatives and volunteers from and against any loss, liability, claim or judgment relating in any manner to the Property or this Agreement. The Participant shall remain fully obligated for the payment of property taxes and assessments related to the Property. There shall be no reduction in taxes for Participant, nor any transfer of responsibility to the Agency or the City to make such payments, by virtue of the Agency Loan. 12. Defaults. Failure or delay by either party to perform any term or provision of this Agreement which is not cured within thirty (30) days after receipt of notice from the other party constitutes a default under this Agreement; provided, however, if such default is of the nature requiring more than thirty (30) days to cure, the defaulting party shall avoid default hereunder by commencing to cure within such thirty (30) day period and thereafter diligently pursuing such cure to completion. 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 with diligence. The injured party shall give written notice of default to the party in default, specifying the default complained,of by the injured party. Except as required go protect against further damages, the injured party may not institute proceedings against the party in default until thirty (30) days after giving such notice. Failure or delay in giving such notice shall not constitute a waiver of any default, nor shall it change the time of default. 13. Documents. Participant is aware that the Agency has prepared certain documents to implement the Program and secure repayment of the Agency Loan. Participant has reviewed and agrees to execute the following documents prior to receiving the Agency Loan: Loan Agreement Page 6 of 8 4\s\G:4-96-Agrcc: W al l acc:Ioanagrcc RI S 96-523 7/26/96 (a) . Disclosure Statement; (b) Promissory Note; (c) Agency Deed of Trust; and (d) Declaration of Conditions, Covenants and Restrictions of Property. Participant agrees and acknowledges that the Agency Deed of Trust and the Declaration of Conditions, Covenants and Restrictions of Property shall be recorded with the County Recorder of the County of Orange and shall appear of record with respect to and as encumbrances to the Property. 14. Further Assurances. The Participant shall execute any further documents consistent with the terms of this Agreement, including documents in recordable form, as the Agency shall from time to time find necessary or appropriate to effectuate its purposes in entering into this Agreement and making the Agency Loan. 15. Governing Law. This Agreement shall be governed by the laws of the State of California. Any legal action brought under this Agreement must be instituted in the Superior Court of the County of Orange, State of California, in an appropriate municipal court in that county, or in the Federal District Court in the Central District of California. 16. Amendment of Agreement. No modification, rescission, waiver, release or amendment of any provision of this Agreement shall be made except by a written agreement executed by the Participant and Agency. 17. Agency May Assign. Agency may, at its option, assign its right to receive repayment of the loan proceeds without obtaining the consent of the Participant. 18. Participant Assignment Prohibited. In no event shall Participant assign or transfer any portion of this Agreement without the prior express written consent of the Agency, which consent may be given or withheld in the Agency's sole discretion. No assumption of the Agency Loan shall be permitted at any time. This section shall not proliibit the Agency's right to assign all or any portion of its rights to the loan proceeds hereunder. 19. Entire Agreement. This Agreement constitutes the entire understanding and agreement of the parties. This Agreement integrates all of the terms and conditions mentioned herein or incidental thereto, and supersedes all prior negotiations, discussions and previous Loan Agreement Page 7 of 8 4'�s\Ci:4-96-ngrcc: W al I ace: Ioanagrcc RI S 96-523 7/26/96 r agreements between the Agency and the Participant concerning all or any part of the subject matter of this Agreement. IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year written below. "PARTICIPANT" Date: AUGUST 13, 1996 19 By: BARBARA JO WALLACE Date: Date: Printed Name: 19 By: 19 Date: u , 19 % ATTEST: VAR ., Agency Clerk REVIEWED AND APPROVED: c Executi e birector Printed Name: By: Printed Name: THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic By: — Chairman APPROVED AS TO FORM: AgencCounsel INITIATED AND APPROVED: 2&d,f-W Director of Economic evelopment Loan Agreement Page 8 of 8 4\s1C3:4-96-Agrce: Wallacc:loanagrcc RI S 96-523 7/26/96 EXHIBIT A LEGAL DESCRIPTION OF PROPERTY PARCEL 1: An undivided one twenty second (1/22) fee simple interest as a tenant in common in and to all of the Common Area defined in Declaration referred to below and described in the condominium Plan ("Plan") for Lot 1 of Tract No. 14828, which Plan was recorded on August 25, 1994 as Instrument No. 94-0525335 of Official Records of Orange County, over Lot 1 of Tract No. 14828, in the City of Huntington Beach, county of Orange, state of California, ' as per map filed in Book 706, Pages 27 to.29 of Miscellaneous Maps, in the office of the County Recorder of said county. Excepting therefrom all oil, petroleum, asphaltum, gas, minerals and other hydrocarbon substances, as reserved in deed recorded August 16, 1921 in Book 401, Page 356 of Deeds, and in various other deeds of record. PARCEL 2: unit No. 22 consisting of certain airspace and surface elements, as shown and described in I the Condominium Plan referred to in Parcel 1 above. Parcel 3: non-exclusive easements for access, ingress, egress, use., enjoyment, drainage, encroachment, support, maintenance, repairs and for other purposes, all asdescribed in that certain Declaration of covenants, conditions and Restrictions and Reservation of Easements for Pacific Park villas, recorded August 25, 1994 as Instrument No. 94-0525336 of Official Records. Parcel 4: Exclusive easements appurtenant to Parcels 1 and 2 referred to above, for balcony or patio purposes, over the areas:defined, depicted and assigned on the Plan. Exhibit A to Loan Agreement Page 1 of 1 4\s\Agrcc: Margolis: CxhibitA\07/26/96 $ 35,000.00 AUGUST 5TH EXHIBIT B PROMISSORY NOTE 19 96 Huntington Beach, California FOR VALUE RECEIVED, the undersigned ("Maker") promises to pay to The Redevelopment Agency of the City of Huntington Beach ("Holder") at 2000 Main Street, P.O. Box 190, Huntington Beach, California 92648, or at such other address as Holder may direct from time to time in writing, Thirty-five Thousand Dollars ($35,000.00) (the "Note Amount") together with interest thereon at the rate set forth herein. All sums hereunder shall be payable in lawful money of the United States of America and all sums shall be credited first to interest then due and the balance to principal. 1. Interest Rate Simple interest shall accrue on the Note Amount at a rate of five percent (5.00%) per annum. If the fair market value of the Property does not increase at least five percent (5.00%) per annum, the accrued interest on the Note Amount shall be forgiven by the Holder. 2. Maturity Date The balance of all unpaid principal and accrued interest shall be due and payable on AUGUST STH 20 6 (thirtieth (30th) anniversary date of this Promissory Note). 3. Acceleration The whole of the Note Amount plus accrued interest and all other payments due hereunder shall become due and be immediately payable to the Holder by the Maker upon the occurrence of any one of the following events: (a) Maker sells or otherwise transfers title to the Property; or (b) Maker refinances any lien or encumbrance to which the Agency Deed of Trust is subordinate for a loan amount which is in excess of the then current loan balance of such prior lien or extends the amortization period of the loan secured by such prior lien; or (c) Maker fails to occupy the Property or to perform any obligation under the Agreement (as hereinafter defined). "Exhibit B" to Loan Agreement Pagel of 3 4\s\4-96Agree: WalIace: Gxhibitn RLS 9G-523 7/26/96 4. Security for Note This Promissory Note shall be secured by a second deed of trust encumbering the Property (the "Agency Deed of Trust"), executed by Maker as Trustor in favor of Holder as Trustee. Prepayment of Note Amount Maker may prepay to Holder the full Note Amount, together with simple interest thereon at a rate of five percent (5.00%) per annum, at any time prior to the due date of the Note Amount. 6. Loan Agreement This Promissory Note is made and delivered pursuant to and in implementation of Loan Agreement entered by and between the Holder and the Maker dated AUc[7S'r 5, 19 95 (the "Agreement"), a copy of which is on file as a public record with the Holder and is incorporated herein by reference. The Maker acknowledges that but for the execution of this Promissory Note, the Holder would not enter into the Agreement or make the loan contemplated therein. Unless definitions of terms have been expressly set out at length herein, each term shall have the same definition as set forth in the Agreement. 7. Holder May Assign Holder may, at its option, assign its right to receive payment under this Promissory Note without necessity of obtaining the consent of the Maker. Maker Assignment Prohibited In no event shall Maker assign or transfer any portion of this Agreement without the prior express written consent of the Holder, which consent may be given or withheld in the Holder's sole discretion. Likewise, no assumption of the Agency Loan shall be permitted at any time. This Section shall not prohibit the Holder's right to assign all or any portion of its rights to the loan proceeds hereunder. 9. Attorneys' Fees and Costs In the event that any action is instituted to enforce payment under this Promissory Note, the Maker promises to pay such sums as a court may fix for court costs and reasonable attorneys' fees. 10. Non -Waiver Failure or delay in giving any notice required hereunder shall not constitute a waiver of any default or late payment, nor shall it change the time for any default or payment. "Exhibit B" to Loan Agreement Page 2 of 3 4la\4-9GAgrcc: W al Iacc: Exhibid3 R S 96-523 7/2G/9G 11. Successors Bound - This Promissory Note shall be binding upon the parties hereto and their respective heirs, successors and assigns. By- `1 �LCC��Ic tTC Lil Printed Frame: BARBARA JO WALLA' By: Printed Name: By: Printed Name: "Exhibit B" to Loan Agreement Page 3 of 3 4\s%4-96Agrcc: Wallace: P,xhibit13 RLS 96-523 7/26/96 RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO: Redevelopment Agency of the City of Huntington Beach 2000 Main Street Huntington Beach, California 92648 Attn: Agency Clerk [Space Above This Line For Recorder's Use.] This document is exempt from recording fees pursuant to Government Code Section 6103. DEED OF TRUST WITH ASSIGNMENTS OF RENTS THIS DEED OF TRUST is made this 5TH day of AUG. , 19 96, by and among BARBARA JO WALLACE, whose address is 18051 Joyful Lane, 9205, Huntington Beach, California (the "Trustor") and THE CITY OF HUNTINGTON BEACH, a municipal corporation (the "Trustee") and THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic (the "BENEFICIARY"), whose address is 2000 Main Street, Huntington Beach, California 92648. WITNESSETH: That Trustor Irrevocably Grants, Transfers and Assigns, to Trustee, in Trust, with Power of Sale, that property in the City of Huntington Beach, County of Orange, State of California, described legally in the Legal Description attached hereto as Exhibit "A" and incorporated herein. TOGETHER WITH: (a) all buildings, improvements and fixtures, now or hereafter placed thereon, it being understood and agreed that all classes of property attached or unattached used in connection herewith shall be deemed fixtures, (b) rents, issues and profits thereof, (c) any water rights and/or stock are appurtenant or pertain to said land, and (d) all sums of money payable on the purchase price of said property secured by a lien thereon or payable under any agreement for the sale thereof, SUBJECT, HOWEVER, to the right, power and authority hereinafter given to and conferred upon Beneficiary to collect and apply such rents, issues and profits, and all sums of money payable on the purchase price of said property secured by a lien thereon or payable under any agreement. "Exhibit C" to Loan Agreement Page 1 of 15 4\s\G:4-96agree: W aUace:ExhibitC RLS 96-523 7/26/96 A. FOR THE PURPOSE OF SECURING: 1. Payment of the sum of Thirty-five Thousand Dollars ($35,000.00) with interest thereon according to the terms of a Promissory Note of even date herewith, made by Trustor, payable to the order of the Beneficiary and extensions or renewals thereof. 2. Payment of such additional sums with interest thereon as: (a) may be liereafter borrowed from the Beneficiary by the then record owner or owners of said property when evidenced by another Promissory Note or Notes, or (b) as may be added to the indebtedness secured hereby in accordance with the provision of this Deed of Trust. 3. Performance of each and every obligation, covenant, promise or agreement of Trustor contained herein in the Loan Agreement between Beneficiary and Trustor dated AUGUST 5 19 96 , insofar as the terms and conditions of that agreement may apply to Trustor. 4. Payment, with interest thereon, future indebtedness or obligation of the Trustor (or of any successor -in -interest of the Trustor to said property) to the Beneficiary, whether created directly or acquired by assignment, whether absolute or contingent, whether due or not, whether otherwise secured or not, or whether existing at the time of the execution of the Deed of Trust, or arising thereafter. B. TO PROTECT THE SECURITY OF THIS DEED OF TRUST, TRUSTOR AGREES: 1. To keep said property in good condition and repair; to allow Beneficiary or its representatives to enter and inspect the premises at all reasonable times and access thereto, shall be permitted for that purpose; not to remove or demolish any building thereon; not to make alterations thereto without the consent of the Beneficiary; to suffer or permit no change in the general nature of the occupancy of the premises without Beneficiary's written consent; to complete or restore promptly and in good workmanlike manner any building which may be constructed, damaged or destroyed thereon, including, without restricting the generality of the foregoing, damage from termites and dry -rot; to pay when due all claims for labor performed and materials furnished in connection with such property and not to permit any mechanic's lien against such property; to comply with all laws affecting such property or requiring any alterations or improvements to be made thereon; not to initiate or acquiesce in any zoning reclassification without Beneficiary's written consent; not to commit or permit waste thereon; not to commit, suffer or permit any act upon such property in violation of the law; and to paint, cultivate, irrigate, fertilize, fumigate, prune, and do all other acts that from the character or use of said property may be reasonably necessary; to promptly pay all amounts due others upon agreements of lease or conditional sale of all fixtures, furnishings and equipment located thereon. If the loan secured hereby or any part thereof is being obtained or should any additional loan be made hereafter for the purpose of financing rehabilitation improvements on said property, Trustor further agrees, anything in this Deed of Trust to the contrary notwithstanding; "Exhibit C" to Loan Agreement Page 2 of 15 4\s\G:4-96agrec: WalIacc:Exhibi(C RLS 9G-523 7/26/96 I (a) to complete the same in accordance with City approved plans and specifications satisfactory to Beneficiary; (b) to allow Beneficiary to inspect such property at all times during rehabilitation; (c) to replace any work or materials unsatisfactory to Beneficiary within fifteen (15) calendar days after written notice from Beneficiary of such fact, which notice may be given to Trustor by registered or certified mail, sent to his last known address, or by personal service of the same; (d) that work shall not cease on the rehabilitation of such improvements for any reason whatsoever for a period of fifteen (15) calendar days, whether consecutive or not, without the written permission of the Beneficiary; (e) to pay when due all claims of labor and materials furnished in connection with the said rehabilitation and not to permit any claims of lien for said work or material to be filed of record against the property; (0 not to permit any stop notice claims to be presented to Beneficiary. If said property is part of a larger tract upon which improvements will be constructed, Trustor shall make separate contracts and subcontracts for said construction which shall pertain to the said property only and shall keep separate, full and complete records of all work and materials furnished to the said property. Trustee upon presentation to it of an affidavit signed by the Beneficiary setting forth facts showing a default by Trustor under this paragraph, is authorized to accept as true and conclusive all facts and statements therein, and to act thereon hereunder. 2. To provide, and maintain in force at all times with respect to said property, fire and other types of insurance as may be required by Beneficiary. All of such insurance shall have a loss payable endorsement in favor of Beneficiary, shall be for a term and in form, content, amount and in such companies as may be satisfactory to Beneficiary, and the policies therefor shall be delivered to and remain in possession of Beneficiary as further security for the faithful performance of these trusts. At least thirty (30) days prior to the expiration of any insurance policy, a policy or policies renewing or extending such expiring insurance shall be delivered to Beneficiary together with written evidence showing payment of the premium therefor and, in the event any such insurance policy and evidence of the payment of the premium therefor are not so delivered by Trustor to Beneficiary, Trustor by executing this Deed of Trust specifically requests Beneficiary to obtain such insurance and Beneficiary, without obligation to do so, without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof, may obtain such insurance through or from any insurance agency or company acceptable to it, pay the premium thereof, and may add the amount thereof to the indebtedness secured hereby, which amount shall bear a like rate of interest. Beneficiary may furnish to any insurance agency or company, or any other.person, any information contained in or extracted from any insurance policy delivered to Beneficiary pursuant hereto and any information concerning the loan secured hereby. Neither Trustee nor Beneficiary shall be responsible for such insurance or for the collection of any insurance monies, or for any insolvency of any insurer or insurance underwriter. In case of insurance loss, Beneficiary is hereby authorized either (a) to settle and adjust any claim under the insurance policies provided for in this document without the consent of the Trustor, or (b) to allow Trustor to agree with the insurance company or companies on the amount to be paid upon the loss. In either case, the Beneficiary is authorized to collect and make receipt of any such insurance money. If Trustor is obligated to restore or replace the damaged or destroyed buildings or improvements under the terms of any lease or leases which are or may be prior to the lien of this Deed of Trust and such damage or destruction does not result in cancellation or termination "Exhibit C" to Loan Agreement Page 3 of 15 4\s\G: 4 -96 agree: W al lace: CxhibitC RLS 96-523 7/26/96 I t of such lease, such proceeds, after deducting therefrom any expenses incurred in the collection thereof, shall be used to reimburse the Trustor for the cost of rebuilding or restoring the buildings or improvements on said premises. In all other cases, such insurance proceeds, at the option of the Beneficiary, shall either be applied in reduction of the indebtedness secured hereby whether due or not, or in such order as Beneficiary may determine, or be held by the Beneficiary and used to reimburse the Trustor for the cost of the rebuilding or restoring the buildings or improvements on said premises. Such buildings and improvements shall be so restored or rebuilt as to be of at least equal value and substantially the same character as prior to the damage or destruction, and shall be in a condition satisfactory to Beneficiary. Such application or release shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. Any and all unexpired insurance shall inure to the benefit of, and pass to the purchaser of, the property conveyed at any Trustee sale held hereunder. 3. To pay: (a) at least ten (10) days before delinquency, all general and special City and County taxes, and all assessments on appurtenant water stock, affecting such property, (b) when done, all special assessments for public improvements, without permitting any improvement bond to issue for any special assessment (c) when done, all encumbrances, charges and lines, with interest, on said property, or any part thereof, which are or appears to be prior to superior hereto, (d) if the security of this Deed of Trust is leasehold estate, to make any payment or do any act required of the Lessee or its successor in interest under the terms of the instrument or instruments creating said leasehold, (e) all costs, fees and expenses of this trust, (0 for any statement regarding the obligation secured hereby any amount demanded by Beneficiary not to exceed the maximum allowed by law thereof at the time when such request is made, (g) such other charges for services rendered by Beneficiary and furnished at Trustor's request or that of any successor in interest to Trustor as the Beneficiary may deem reasonable. If, by the laws of the United States of America, or of any state having jurisdiction over the Trustor, any tax is due or becomes due in respect to the issuance of the Note hereby secured, the Trustor covenants and agrees to pay such tax in the manner required by such law. Should Trustor fail to make any such payment, Beneficiary may elect to make such payment, Beneficiary may elect to make such payment and any amount so paid may be added by Beneficiary to the indebtedness secured hereby and shall bear a like rate of interest. 4. That, should Trustor fail to make any payment or do any act as provided in this Deed of Trust, the Beneficiary or Trustee, but without obligation to do so and without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof, may (a) make or do the same in such manner and to such extent as either may deem necessary to protect the security hereof, Beneficiary or Trustee being authorized to enter upon said property for such purposes, (b) commence, appear in, or defend any action or proceeding purporting to affect the security hereof or. the property covered by this Deed of Trust, or the rights or powers of Beneficiary or Trustee, (c) pay, purchase, contest or compromise any encumbrance, charge or lien, which in the judgment of either is or appears to be prior or superior hereto, and (d) in exercising any such powers, pay necessary expenses, employ counsel and pay his reasonable fees. Trustor agrees to repay any amount so expended on demand of Beneficiary, and any amount so "Exhibit C" to Loan Agreement Page 4 of 15 4\s\G:4-96 agree: W al I ace: GxhibitC R S 9G-523 7/26/96 expended may be added by Beneficiary to the indebtedness secured hereby and shall bear a like rate of interest. 5. To appear in and defend any action or proceeding purporting to affect the security hereof or the property which is covered by this Deed of Trust, or the rights or powers of Beneficiary or Trustee, and whether or not Trustor so appears or defends, to pay all costs and expenses, including cost of evidence of title and attorney's fees in a reasonable sum, in any such action or proceeding in which Beneficiary or Trustee may appear by virtue of being made a party defendant or otherwise irrespective of whether the interest of Beneficiary or Trustee in such property id directly questioned by such action, including any action for the condemnation or partition of said premises, and in any suit brought by Beneficiary to foreclose this Deed of Trust. 6. To pay immediately and without demand, all sums expended under the terms of this Deed of Trust by Beneficiary or Trustee, with interest from the date of expenditure at the rate which the principal obligation secured hereby bears at the time such payment is made, and the repayment of such sums shall be secured hereby. 7. That, should the Trustor or any successor in interest to Trustor in such property drill or extract, or enter into a lease for drilling or extraction of oil, gas or other hydrocarbon substances or any mineral of any kind or character, or sell, convey, further encumber, or alienate said property, or any party thereof, or any interest therein, or be divested of his title or any interest therein in any manner or way, whether voluntarily or involuntarily, Beneficiary shall have the right, at its option, to declare any indebtedness or obligations secured hereby irrespective of the maturity date specified in any Note evidencing the same, immediately due and payable, and no waiver of this right shall be effective unless in writing. 8. That any award, settlement or damages for injury or damages to such property, or in construction with the transaction financed by such loan, and any award of damages in connection with any condemnation for public use of or injury to said property, or any part thereof, is hereby assigned and shall be paid to Beneficiary, who may apply or release such monies received by it in such manner and with the same effect as above provided for the disposition of proceeds of fire or other insurance. 9. That, by accepting payment of any sums secured hereby after its due date, or by making any payment, performing any act on behalf of Trustor, that Trustor was obligated hereunder, but failed, to make, or perform, or by adding any payment so made by Beneficiary to the indebtedness secured hereby, Beneficiary does not waive its right either to require prompt payment when due of all sums so secured or to declare a default for failure so to pay. 10. That at any time, or from time to time, without liability of the Beneficiary or Trustee thereof, and without notice, upon written request of Beneficiary and presentation of this Deed of Trust and any Note secured hereby for endorsement, and without affecting the personal liability of any person for payment of the indebtedness secured hereby, or the lien of the Deed of Trust upon the remainder of said property for the full amount of the indebtedness then or "Exhibit C" to Loan Agreement Page 5 of 15 4\s\G:4-96agree: W alIace: CxhibitC RB 96-523 7/26/96 r thereafter secured hereby, or the rights or powers of Beneficiary or the Trustee with respect to the remainder of said property, Trustee may: (a) reconvey any part of said property, (b) consent to the making of any map or plat thereof, (c) join in granting any easement thereon, (d) join in any agreement subordinating the lien or charge hereof. 1 1. That the lien hereof shall remain in full force and effect during any postponement or extension of time of payment of the indebtedness secured hereby, or any part thereof. 12. That, upon written request of Beneficiary stating that all sums secured hereby have been paid, and upon surrender of this Deed of Trust and said Note or Notes to Trustee for cancellation and retention, and upon payment of its fees, Trustee shall reconvey, without warranty, the property then held hereunder. The recitals in such reconveyance of any matters of fact shall be conclusive of the truthfulness thereof. The grantee in such reconveyance may be described as "the person or persons legally entitled thereto." Such request and reconveyance shall operate as re -assignment of the rents, issues, royalties and profits assigned to Beneficiary. Five (5) years after issuance of such full reconveyance, Trustee may destroy said Note and this Deed of Trust (unless directed in such request to retain them). 13. That as additional security, Trustor irrevocably assigns to Beneficiary the rents, issues, and profits of the property affected by this Trust Deed for the purposes and upon the terms and conditions set forth below. This assignment shall not impose upon Beneficiary any duty to produce rents from the property affected by this Trust Deed, or cause Beneficiary to be (a) "mortgages in possession" for any purpose; (b) responsible for performing any of the obligations of the lessor under any lease; or (c) responsible for any waste committed by lessees or any other parties, for any dangerous or defective condition of the property affected by this Trust Deed, or for any negligence in the management, upkeep, or control of such rights to rents, issues and profits is not contingent upon, and may be exercised without possession of, the property affected by this Trust Deed. Beneficiary confers upon Trustor a license ("License") to collect and retain the rents, issues and profits of the property affected by this Trust Deed as they become due and payable, until the occurrence of a default hereunder. Upon such default, the License shall be automatically revoked and Beneficiary may collect and retain the rents, issues and profits without notice and without taking possessions of the property affected by this Trust Deed. This right to collect rents, issues and profits shall not grant to Beneficiary or Trustee the right to possession, except as otherwise provided herein; and neither said right, nor termination of the License, shall impose upon Beneficiary or Trustee the duty to produce rents, issues or profits or maintain all or any part of the property affected by this Trust Deed. If Trustor shall default as aforesaid, Trustor's right to collect any such money shall cease and Beneficiary shall have the right, with or without taking possession of the property affected hereby, to collect all rents, issues, royalties and profits and shall be authorized to, and may, without notice and irrespective of whether declaration of default has been delivered to Trustee and without regard to declaration of default has been delivered to Trustee and without regard to the adequacy of the security for the indebtedness secured hereby, either personally or by attorney or agent without bringing any action or proceeding, or by receiver "Exhibit C" to Loan Agreement Page 6 of 15 4\S\C:4-96agree: WaIIace: Exhibi(C RLS 9G-523 7/26/96 t I to be appointed by the Court, enter into possession and hold, occupy, possess and enjoy the said property, make cancel, enforce and modify leases, obtain and eject tenants, and set and modify rents and terms of rents, and to sue, and to take, receive and collect all or any part of the said rents, issues, and profits of the property affected hereby, and after paying such costs of maintenance, operation of said property, and of collection including reasonable attorneys' fees, as in its judgment it may deem proper, to apply the balance upon any indebtedness then secured hereby, the rents, issues, royalties and profits of said property being hereby assigned to Beneficiary for said purposes. The acceptance of such rents, issues, royalties and profits shall not constitute a waiver of any other right which Trustee or Beneficiary may enjoy under this Deed of Trust or under the laws of California. Failure of or discontinuance by Beneficiary at any time, or from time to time, to collect any such rents, issues, royalties or profits shall not in any manner affect the subsequent enforcement by Beneficiary of the right, power and authority to collect the same. The receipt and application by said Beneficiary of all such rents, issues, royalties and profits pursuant hereto, after execution and delivery of declaration of default and demand for sale as hereinafter provided, or during the pendency of Trustee's sale proceedings hereunder, shall not cure such breach or default not affect said sale proceedings, or any sale made pursuant thereto, but such rents, issues, royalties and profits, less all costs of operation, maintenance, collection and reasonable attorneys' fees, when received by Beneficiary, shall be applied in reduction of the indebtedness secured hereby, from time to time, in such order as Beneficiary may determine. Nothing contained herein, nor the exercise of the right by Beneficiary to collect, shall be, or be construed to be, an affirmation by Beneficiary of any tenancy, lease or option, nor an assumption of liability under, nor subordination of the.lien or charge of this Deed of Trust to, any such tenancy, lease or option. 14. That if the security of this Deed of Trust is a leasehold estate, the Trustor agrees that: (a) the term "Lease" as used herein shall mean the lease creating the "leasehold estate"; (b) Trustor shall not amend, change or modify his leasehold interest, or the Lease, or agree to do so, without the written consent of the Beneficiary; (c) Trustor will promptly advise Beneficiary regarding any notice, request or demand received by him from the lessor under the Lease and promptly furnish Beneficiary with a copy of any such notice, request or demand; (d) as long as any of the indebtedness secured hereby shall remain unpaid, unless the Beneficiary shall otherwise consent thereto in writing, the leasehold estate shall not merge with the fee title but shall always be kept separate and distinct, notwithstanding the union of said estates in any party; (e) Trustor agrees that it will promptly, strictly, and faithfully perform, fulfill, and comply with all covenants, agreements, terms, conditions and provisions under any lease affecting the premises and to neither do anything, nor to permit anything to be done which may cause modification or termination of any such lease or of the obligations of any lessee or person claiming through such lease or the rents provided for therein or the interest of the lessor or the Beneficiary therein or thereunder. Trustor further agrees he will not execute a Deed of Trust or mortgage which may be or become superior to any leasehold estate that is security for this Deed of Trust. In the event of a violation of any of the covenants set forth in this paragraph, Beneficiary shall have the right, at its option, to declare all sums secured hereby immediately due and payable. Consent to or waiver of one of said violations shall not be deemed to be a consent to or waiver or any other violation. If the security for this Deed of Trust is a leasehold estate, the term "property" as used in this Deed of "Exhibit C" to Loan Agreement Page 7 of 15 4\s\G:4.96agree: W alIace: ExhibitC RIS 9G-523 7/26/96 f Trust shall be deemed to mean the leasehold estate whenever the context so requires for the protection of the Beneficiary. 15. That upon default by Trustor in payment of any indebtedness secured hereby or in performance of any agreement, and the Promissory Note, if applicable, hereunder, and upon default by Trustor under the terms of any encumbrance, charge or lien which is or appears to be prior or superior hereto, Beneficiary may declare all sums secured hereby immediately due and payable by delivery to Trustee of written declaration of default and demand for sale of written notice of default and of election to cause to be sold said property, which notice Trustee shall cause to be filed for record. Beneficiary shall also deposit with Trustee this Deed of Trust and any Notes and all documents evidencing expenditures, secured hereby. After the lapse of such time as then may be required by law following recordation of such notice of default, and notice of sale having been given as then required by law, Trustee, without demand on Trustor, shall sell said property at the time and place fixed by it in such notice of sale, whether as a whole or in separate parcels, and in such order as it may determine, at public auction to the highest bidder for case in lawful money of the United States; payable at time of sale. Trustee may postpone sale of all or any portion of said property by public announcement at such time and place of sale, and from time to time thereafter may postpone such sale by public announcement at the time fixed by the preceding postponement. Trustee shall deliver to such purchaser its Deed conveying the property so sold, but without any covenant or warranty, express or implied. The recital in such Deed of any matters of fact shall be conclusive of the truthfulness thereof. Any person, including Trustor, Trustee, or Beneficiary as hereinafter defined, may purchase at such sale. Trustee may also sell at any such sale and as part thereof any shares of corporate stock securing the obligations secured hereby, and Trustor waives demand and notice of such sale. (Beneficiary at its option may also foreclose on such shares by independent pledge sale, and Trustor waives demand and notice of such sale). After deducting all costs, fees and expenses of Trustee, and of this Trust, including cost of evidence of title in connection with this sale, Trustee shall apply the proceeds of sale to payment, first; all sums expended under the terms hereof, not then repaid, with accrued interest at the rate then payable under the Note or Notes secured hereby, and then of all other sums secured hereby, and, if there are any proceeds remaining, shall distribute them to the person or persons legally entitled thereto. 16. To waive, to the fullest extent permissible by law, the right to plead any statute of limitations as a defense to any demand secured hereby. 17. That Beneficiary may, from time to time, by instrument in writing, substitute a successor or successors to any Trustee named herein or acting hereunder, which instrument, executed and acknowledged by Beneficiary and recorded in the office of the recorder of the county or counties where such property is situated, shall be conclusive proof of property substitution of such successor Trustee or Trustees, who shall, without conveyances from the Trustee predecessor, succeed to all its title, estate, rights, powers and duties, including but not limited to the power to reconvey the whole or any part of the property covered by this Deed of Trust. Such instrument must contain the name of the original Trustor, Trustee and Beneficiary hereunder, the book and page where this Deed of Trust is recorded. If notice of default shall have "Exhibit C" to Loan Agreement Page 8 of 15 4\s\G:4-96agrcc: W allacc:r xliibitC RCS 96-523 7/26/96 been recorded, this power of substitution cannot be exercised until after the costs, fees and expenses of the then acting Trustee shall have been paid to such Trustee, who shall endorse receipt thereof upon such instrument. The procedures herein provided for substitution of Trustee shall not be exclusive of other provisions for substitution provided by law. 18. That this Deed of Trust applies to, inures to the benefit of, and binds all parties hereto, their heirs, legatees, devisees, administrators, executors, successors and assigns. The term "Beneficiary" shall mean the owner and holder, including pledge, of the Note secured hereby, whether or not named as Beneficiary herein. In this Deed of Trust, whenever the context so requires, the masculine gender includes the feminine and/or neuter, and the singular number includes the plural. 19. That in the event the property secured by this Deed of Trust is income producing property consisting of four units or more, Trustor agrees to file with Beneficiary, annually on January 1, a written operational report. Such operational report shall contain a brief but complete statement of the year's income and expenses of such property, a list of all vacancies, and a statement of any material change in the property or business carried on therein for such period. 20. That in the event of a demand for, and the preparation and delivery of a written statement regarding the obligations secured by this Deed of Trust pursuant to Sections 2943 and 2954 of the Civil Code of California, Beneficiary shall be entitled to make a reasonable charge, not exceeding the maximum amount which is permitted by law at the time the statement is furnished. Beneficiary may also charge Trustor a reasonable fee for any other services rendered to Trustor or rendered in Trustor's behalf in connection with said property of this Deed of Trust, including changing Beneficiary's records pertaining to this Deed of Trust and the loan secured hereby in connection with the transfer of said property, or releasing an existing policy of fire insurance or other casualty insurance held by Beneficiary and replacing the same with another such policy. 21. That Trustee accepts this Trust when this Deed of Trust, duly executed and acknowledged, is made a public record as provided by law. Trustee is not obligated to notify any party hereto of pending sale under any other Deed of Trust or of any action or proceeding in which Trustor, Beneficiary, or Trustee shall be a party unless brought by Trustee. 22. That should this Deed of Trust or any Note secured hereby provide any fee for prepayment of any indebtedness secured hereby, Trustor agrees to pay said fee, if any, of said indebtedness shall be paid prior to the due date thereof stated in said Note or this Deed of Trust even if notwithstanding Trustor shall have defaulted in payment thereof, or in performance of any agreement hereunder, and Beneficiary, by reason thereof, shall have declared all sums secured hereby immediately due and payable. 23. That Trustor has made certain representations and disclosures in order to induce Beneficiary to make the loan evidenced by the Promissory Note or Notes which this Deed of Trust secures, and in the event that Trustor has made any material misrepresentation or failed to "Exhibit C" to Loan Agreement Page 9 of 15 4\s\G:4-96agree: Wallace: Exhib itC RLS 9G-523 7/26/96 disclose any material fact, Beneficiary at its option and without notice, shall have the right to declare the indebtedness secured hereby, irrespective of the maturity date specified in such Note or Notes, immediately due and payable, and on failure to so pay Beneficiary may make a written declaration of default and demand for sale as in paragraph No. 15 herein set forth. Trustee, upon presentation to it of an affidavit signed by Beneficiary setting forth facts showing a default by Trustor under this paragraph, is authorized to accept as true and conclusive all facts and statements therein, and to act thereon hereunder. Any notice which any party hereto may desire or be required to give to the other party shall be in writing. The mailing thereof must be certified mail addressed to the Trustor at his address hereinabove set forth or to the Beneficiary at his office or at such other place as such parties hereto may designate in writing. THE UNDERSIGNED TRUSTOR REQUESTS that a copy of any notice of default and of any notice of sale hereunder be mailed to him at his address herein before set forth. TRUSTOR: BARBARA JO WKLL.ACE LOW In APPROVED AS TO FORM! Agency Counsel N -2.2`� "Exhibit C" to Loan Agreement Page 10 of 15 4\s\G:4-9 G agree: W al I ace: LAC}iibltC RLS 9G-523 7/26/96 % �, 1 t RIDER TO DEED OF TRUST FIRST TIME HOMEBUYER DOWN PAYMENT ASSISTANCE PROGRAM This Deed of Trust is subject to the terms and conditions of that certain Loan Agreement dated AUGUST 5TH , 19 96 (the "Loan Agreement"), pursuant to which Beneficiary has agreed to loan Trustor the sum of Thirty-five Thousand Dollars ($35,000.00) (the "Loan Amount"). All terms in this Rider to Deed of Trust, if not separately defined herein, shall have the meanings as defined in the Loan Agreement. In the event that the Agency Loan becomes due and payable prior to the thirtieth anniversary of the date of this Agreement, Trustor shall pay to Beneficiary concurrent with such sale, transfer or refinancing, an amount equal to the "Equity Share Amount." The Equity Share Amount shall be determined by applying a percentage factor (the "Applicable Factor") to the difference between the Sales Price and the Purchase Price (defined below) as follows: Prior to fifth anniversary of the Agency Deed of Trust: fifty percent (50%) 2. After fifth anniversary but) prior to sixth anniversary: forty-eight percent (48%) 3. After sixth anniversary but prior to seventh anniversary forty-six percent (46%) 4. After seventh anniversary but prior to eighth anniversary: forty-four percent (44%) 5. After eighth anniversary but prior to ninth anniversary: forty two percent (42%) 6. After ninth anniversary but prior to tenth anniversary: forty percent (40%) 7. After tenth anniversary but prior to eleventh anniversary: thirty-eight percent (38%) 8. After eleventh anniversary but prior to twelfth anniversary: thirty-six percent (36%) 9. After twelfth anniversary but prior to thirteenth anniversary: thirty-four percent (34%) "Exhibit C" to Loan Agreement Page 11 of 15 4\s1G:4-96agrcc: W allacc:ExhibitC RLS 96-523 7/26/96 10. After thirteenth anniversary but prior to fourteenth anniversary: thirty-two percent (32%) 11. After fourteenth anniversary but prior to fifteenth anniversary: thirty percent (30%) 12. After fifteenth anniversary but prior to sixteenth anniversary: twenty-eight percent (28%) 13. After sixteenth anniversary but prior to seventeenth anniversary: twenty-six percent (26%) 14. After seventeenth anniversary but prior to eighteenth anniversary: twenty-four percent (24%) 15. After eighteenth anniversary but prior to nineteenth anniversary: twenty-two percent (22%) 16. After nineteenth anniversary but prior to twentieth anniversary: twenty percent (20%) 17. After twentieth anniversary but prior to twenty-first anniversary: eighteen percent (18%) 18. After twenty-first anniversary but prior to twenty-second anniversary: sixteen percent (16%) 19. After twenty-second anniversary but prior to twenty-third anniversary: fourteen percent (14%) 20. After twenty-third anniversary but prior to twenty-fourth anniversary: twelve percent (12%) 21. After twenty-fourth anniversary but prior to twenty-fifth anniversary: ten percent (10%) 22. After twenty-fifth anniversary but prior to twenty-sixth anniversary: eight percent (8%) 23. After twenty-sixth anniversary but prior to twenty-seventh anniversary: six percent (6%) 24. After twenty-seventh anniversary but prior to twenty-eighth anniversary: four percent (4%) "Exhibit U to Loan Agreement Page 12 of 15 4\s\G:4-96agree: W al I ace:I:xhlbitC RI S 96-523 7/26/96 25. After twenty-eighth anniversary but prior to twenty-ninth anniversary: 26. After twenty-ninth anniversary but prior to thirtieth anniversary: 27. After thirtieth anniversary: two percent (2%) one percent (1 %) zero percent (0%) The "Purchase Price" is the price paid by the Participant to the Seller for Seller's interest in the Property, exclusive of escrow fees, title insurance costs, broker's commissions, loan fees or any other closing or transaction costs. The actual cost to Participant of all capital improvements to the Property made while Participant owned the Property may be added to the Purchase Price if Participant complies with the following: No capital improvements which cost more than two thousand five hundred dollars ($2,500) shall be added to the Purchase Price unless within sixty (60) days following completion of such capital improvements to the Property Participant shall send the following to the Agency: (i) an itemized list of the improvements, (ii) proof of completion of the improvements, and (iii) evidence of the cost of the improvements. The costs incurred by the Participant for capital improvements which cost less than two thousand five hundred dollars ($2,500) shall be added to the Purchase Price upon Participant's submission of evidence of such costs to the Agency, in a form reasonably satisfactory to the Agency, prior to the due date of the Agency Loan. The "Sales Price" is the price paid by the Buyer of the Property to Trustor for Trustor's interest in the Property, exclusive of escrow fees, title insurance costs, broker's commissions, loan fees or any other closing or transaction costs. The percentage factor so determined is the "Applicable Factor." If the Property is sold, an amount equal to the Applicable Factor multiplied by the difference between (i) the original Property purchase price and (ii) the amount received by Trustor as the Property sale price (as reduced by costs of sale paid by the Trustor) shall constitute the Equity Share Amount. If the Property is transferred or the lien of this Deed of trust or any lien to which this Deed of Trust is subordinate is refinanced for a loan amount which is in excess of the then current loan balance or extends the amortization period of the loan secured by such prior lien. Beneficiary shall appoint a certified, independent appraiser to conduct an appraisal of the Property and Trustor agrees that in such event the Equity Share Amount shall be the Applicable Factor multiplied by the difference between (i) the original Property purchase price and (ii) the appraised value of the "Exhibit C" to Loan Agreement Page 13 of 15 4\s\G:4-96agree: WalIace: LxhlbK RLS 96-523 7/26/96 Property as of the time of such transfer or refinancing. Dated: AUGUST 13, 1996 TRUSTOR APPROVED AS TO FORM: Agency Attorney _ 2 .y- k i BARBARA J6 WALLACE "Exhibit C" to Loan Agreement Page 14 of 15 4\S\G:4-96agree: W al lace: GxhibitC R1 S 96-523 7/26/96 RIDER TO DEED OF TRUST SUPERIORITY OF FIRST LENDER DOCUMENTS (if required by the First Lender) This Deed of Trust is subject to the terms and conditions of that certain Loan Agreement dated AUGUST 5 319 96 (the "Loan Agreement"), pursuant to which Beneficiary has agreed to loan Trustor the sum of Thirty-five Thousand dollars ($35,000.00) (the "Loan Amount"). All terms in this Rider to Deed of Trust, if not separately defined herein, shall have the meanings as defined in the Loan Agreement. Notwithstanding any provision herein, this Deed of Trust shall not diminish or affect the rights of the First Lender under the deed of trust executed by Trustor in favor of the First Lender as security for the First Lender Note, or any subsequent First Lender deeds of trust hereafter recorded against the property described herein. Notwithstanding any provision in this Deed of Trust to the contrary, all of the provisions of this Deed of Trust shall terminate and have no further force and effect upon the occurrence of one of the following events: 1) Title is acquired by the First Lender or another party upon foreclosure of a deed of trust by the First Lender. 2) Title is acquired by the First Lender or another party by a deed in lieu of foreclosure of the First Lender deed of trust. Dated: AUGUST 13, 1996 TRUSTOR: APPROVED AS TO FORM: Agency Attorneys rC� BARBARA JO LACE "Exhibit C" to Loan Agreement Page 15 of 15 4\s\G:4-96agrcc: WalIace: l;xhibilC RIS 96-523 7/26/96 t � t STATE OF - COUNTY OF CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT CALIFORNIA On AUGUST 13, 1996 • } SS. before Ine, the undersigned, personally appeared personally known to life (or proved to nee on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and aclvrowledged to me that he/she/they executed the salve in his/her/their authorized capacity(ies), and that by his/her/their sigrrature(s) all the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Signalur4�_�-- LIMA J. CAMPBELL (r his area for olficlal notarial seal) LINDt? J. CAMPBELL z Fs '' COMM. # 1045344 cu NOTARY PUBLIC- CALIFORNIA :jJ ORANGL- COUIM -� o°s My Comm. Ezpire_= DEC. 20, 19M 0PTI0N L fill ffftfffifitttfittfff fffffffffflff Though the data below are fiat required by law, they may prove valuable to persons relying on the dOCLlfllent and could prevent the fraudulent reattachment of this form. Capacity Claimed By Signer WindividUal [] Corporate Officer 'l ltles(s) U Parlrler(s) IJ Limited C1, General ❑ Attorney -in -Fact t] '(rustee(s) U Guardian/Conservator t] Other: Signer Is Representing: lhfarne of Person(s) or Enllly(les) Description of Attached DocL1111@nt 11tin or 'type or Document fdurnber of Pages Date of Document signer(s) Other I han Named Abovo EXHIBIT A TO AGENCY DEED OF TRUST LEGAL DESCRIPTION PARCEL 1: An undivided one twenty second (1/22) fee simple interest as a tenant in common in and to all of the Common Area defined in Declaration referred to below and described in the Condominium Plan ("Plan") for Lot 1 of Tract No. 14828, which Plan was recorded on August 25, 1994 as Instrument No. 94-0525335 of official Records of orange County, over Lot 1 of Tract No. 14828, in the City of Huntington Beach, County of orange, state of California, as per map filed in Book 706, Pages 27 to 29 of Miscellaneous claps, in the office of the County Recorder of said county. Excepting therefrom all oil, petroleum, asphaltum, gas, minerals and other hydrocarbon substances, as reserved in recorded August 16, 1921 in Book 401, Page 356 of Deeds, and in various other deeds of record. PARCEL 2: Unit No. 22 consisting of certain airspace and surface elements, as shown and described in I the Condominium Plan referred to in Parcel 1 above. Parcel 3: non-exclusive easements for access, ingress, egress, use, enjoyment, drainage, encroachment, support, maintenance, repairs and for other purposes, all as described in that certain Declaration of Covenants, Conditions and Restrictions and Reservation of Easements for Pacific Park villas, recorded August 25, 1994 as Instrument No. 94-0525336 Of official Records. Parcel 4: i Exclusive easements appurtenant to Parcels 1 and 2 referred to above, for balcony or patio purposes, over the areas defined, depicted and assigned on the Plan. "Exhibit A" to Agency Deed of Trust Page 1 of 1 4\s\G:Agrcc: Margolis: BxhCDccd\07/26,96 RLS 96-127 EXHIBIT D DECLARATION OF CONDITIONS, COVENANTS AND RESTRICTIONS FOR PROPERTY RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO (Space above for Recorder's use.) THIS DECLARATION OF CONDITIONS, COVENANTS AND RESTRICTIONS FOR PROPERTY (the "Declaration") is made by and between BARBARA JO WALLACE (the "Covenantor") and THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic (the "Agency" or "Covenantee") as of the date set forth below. RECITALS A. Covenantor and the Agency have entered into a certain Loan Agreement dated AUGUST 5 , 19 96 , (the "Agreement," a copy of which is on file with the Agency at its offices and is a public record) pursuant to which the Covenantor has agreed to subject certain real property (referred to in the Agreement and referred to herein as the "Property") described in the "Legal Description of the Property" (which is attached hereto as Exhibit "A" and incorporated herein by this reference) to certain covenants, conditions and restrictions. B. The Community Redevelopment Law (Califorfiia Health and Safety Code § 33000 et seq.) provides that a redevelopment agency shall establish covenants running with the land in furtherance of redevelopment plans. NOW, THEREFORE, the parties hereto agree and covenant as follows: "Exhibit D" to Loan Agreement Pagel of 9 4\s\G:4-96Agree: Wallace: Exhibitl) RLS 96-523 7/29/96 t / i I 1. Affordability Covenants. Covenantor agrees for itself, and its successors and assigns, and every successor to Covenantor's interest in the Property, or any part thereof that for thirty (30) years from the date of recording of the Deed of Trust in favor of the Agency regarding the Property (tile "Expiration Date"): (a) The Property shall only be owned and occupied by Convenantor or by other persons or families of "Moderate Income." "Moderate Income" shall mean persons or families earning One Hundred Twenty Percent (120%) or less of Orange County median income, adjusted for appropriate family size. (b) The Property shall be kept available at Affordable Housing Cost (as defined below) to the Covenantor or other persons or families of moderate income. Affordable Housing Cost shall mean, as to each person or family of low or moderate income, that purchase price which would result in monthly housing payments which do not exceed an amount under any currently prevailing conventional home mortgage lending rates applied by any reputable institutional home mortgage lender, or the lending rates of any government -subsidized or special mortgage program for which such person or family qualifies and has obtained a first trust deed loan, which do not exceed thirty-five percent (35%) of One Hundred Ten Percent (110%) of the Orange County monthly median income for those persons and families of moderate income (as determined by the United States Department of Housing and Urban Development) earning between Eighty Percent (80%) and One Hundred Ten Percent (1101/6) of the Orange County monthly median income, and Thirty -Five Percent (35%) of the monthly median income of any person or family of moderate income which earns more than One Hundred Ten Percent (110%) and not more than One Hundred Twenty Percent (120%) of the Orange County median income. (c) The covenant contained in this Section I shall run with the land and shall automatically terminate and be of no further force or effect upon the Expiration Date. 2. Transfer of Property. No transfer of the Property shall occur until the Agency determines (a) that the proposed purchaser intends to occupy the Property as the proposed purchaser's principal residence, (b) that the proposed purchaser is a person or family of moderate income, and (c) that the proposed transfer occurs at an Affordable Housing Cost. The Agency shall not be obligated to approve a transfer until and unless the proposed purchaser has submitted to the Agency such information and completed such forms as the Agency shall request to certify the proposed purchaser's intent with respect to its residency of the Property and its gross income, and the proposed purchaser has submitted an affidavit disclosing and certifying the amount of the proposed purchase price. Prior to conveyance of the Property, each approved purchaser shall submit to the Agency an executed disclosure statement which certifies that the purchaser is aware that the purchaser buying may only sell the unit at an Affordable Housing Cost to a moderate income person or family, that the maximum permitted sales price may be less than fair market value and that the unit must be owner -occupied at all times and cannot be rented or leased. Covenantor shall cooperate with the Agency in providing such forms to proposed purchasers and in assisting proposed purchasers. to prepare such forms and to provide any required information to the Agency in connection with the Covenantor's original sale of the Affordable Unit, provided that "Exhibit D" to Loan Agreement Page 2 of 9 4ls\G:4-96Agrce: W al lace: Exhibitll RLS 96-523 7/29/96 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 UNDERSTANDS THAT THE DETERMINATION OF THE AFFORDABLE HOUSING COST CAN BE MADE ONLY AT THE TIME OF THE PROPOSED TRANSFER, TAKING INTO CONSIDERATION INTEREST RATES, THE TERMS OF SALE OFFERED TO AND THE ECONOMIC CIRCUMSTANCES OF THE PROPOSED PURCHASER AND OTHER FACTORS THAT CANNOT BE ACCURATELY PREDICTED, A FD 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 AGENCY AND THIS DECLARATION IS TO PROVIDE HOUSING TO ELIGIBLE PERSONS OR FAMILIES AT AN AFFORDABLE HOUSING COST. Covenantor Initials The covenant contained in this Section 2 shall run with the land and shall automatically terminate and be of no further force or effect upon the Expiration Date. 3. 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, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the Property, 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, lessees, subtenants, sublessees, or vendees in the Property. Covenantor and its successors and assigns, shall refrain from restricting the rental or lease (if permitted by Covenantor) or sale of the property on the basis of race, color, religion, sex, marital status, national origin or ancestry of any person. All such deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or non segregation clauses: (a) In deeds: "The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, "Exhibit D" to Loan Agreement Page 3 of 9 4\s\G:4-96Agrce: WalIacc:Gxhibitll RLS 96-523 7/29/96 f ( nor shall the grantee himself or herself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessee or vendees in the land herein conveyed. The foregoing convenants shall run with the land." (b) In leases: "The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through him or her, and this lease is made and accepted upon and subject to the following conditions: "There shall be no discrimination against or segregation of any person or group of persons on account of race, color, religion, sex, marital status, ancestry or national origin in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the premises herein leased nor shall the lessee himself or herself, or any person claiming under 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, religion, sex, marital status, ancestry or national origin, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the premises, nor shall the transferee himself or herself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessee or vendees of the premises." Nothing in this Section 3 shall be construed to authorize the rental or lease of the Property if such rental or lease is not otherwise permitted. The convenants in this paragraph 3 shall run with the land in perpetuity. 4. 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 any mortgage or deed of trust or security interest. 5. Covenants For Benefit of City and Agency. All covenants without regard to technical classification or designation shall be binding for the benefit of the Covenantee and the City of Huntington Beach (the "City") and such covenants shall run in favor of the Covenantee and the City for the entire period during which such covenants shall be in force and effect, without regard to whether the Covenantee or the City is or remains an owner of any land or interest therein to which such covenants relate. The Covenantee and 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 actions at law or suits in equity or other proper legal proceedings to enforce and to cure such "Exhibit D" to Loan Agreement Page 4 of 9 4\s\G:4-96 Agree: Wallace:GxhibitD RLS 96-523 7/29/96 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. fN WITNESS WHEREOF, the Covenantee and Covenantor have caused this instrument to of be executed on their behalf by96 9 the respective officers hereunto duly authorized, this 13 day AUGUS COVENANTOR BARBARA JO WALLACE APPROVED AS TO FORM: Agency Counsel/ Jcfv "Exhibit D" to Loan Agreement Page 5 of 9 4\s\G:4-96Agree: Wallace: Exhibitll RLS 96-523 7/29/96 r 'e ti STATE OF CALIFORNIA ) COUNTY OF ORANGE ) On AUGUST 13, 1996 ss before me, LINDA J. CAMPBELL (name, title; e.g., "Jane Doe, Notary Public"), personally appeared BARBARA JO WALLACE (name(s) of signer(s)), personally known to be -- OR -- XX 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 liis/her/tlieir signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. .� '• , LINDA J. CAMPQELL COMM. # 1045344 p } •� Ei NOTARY PUBLIC -CALIFORNIA ORANGE COUNTY ...� My Comm. Expires DEC. 20, 19M CAPACITY CLAIMED BY SIGNER: XX Individual Corporate Officer(s): Partner(s): Limited Attorney -in -Fact Trustee(s) Guardian/Conservator Other SIGNER IS REPRESENTING: Name of Person(s) or Entity(ies) Title(s) General (Signat e of Notary) LINDA J. CAMPBELL ATTENTION NOTARY: Although the information requested below is OPTIONAL, IT COULD PREVENT FRAUDULENT ATTACHMENT OF THIS CERTIFICATE TO ANOTHER DOCUMENT. THIS CERTIFICATE Title or Type of Document DECLARATION OF CONDITIONS, COVENANTS MUST BE ATTACHED AND RFSTRICTICI N.S FOR PROPERTY TO THE DOCUMENT Number of Pages DESCRIBED Date of Document AUGUST 5, 1996 AT RIGHT: Signer(s) Other Than Named Above: "Exhibit W to Loan Agreement Page 6 of 9 4\s\G:4-96Agree: W al Iace: ExhibitD RLS 96-523 7/29/96 STATE OF CALIFORNIA COUNTY OF On personally appeared ss , before me, (name, title, e.g., "Jane Doe, Notary Public"), (name(s) of signer(s)), personally known to be -- OR -- 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. Witness my hand and official seal. (Signature of Notary) CAPACITY CLAIMED BY SIGNER: Individual Corporate Officer(s): Title(s) Partner(s): Limited General Attorney -in -Fact Trustee(s) Guardian/Conservator Other SIGNER IS REPRESENTING: Name of Person(s) or Entity(ies) ATTENTION NOTARY: Although the information requested below is OPTIONAL, IT COULD PREVENT FRAUDULENT ATTACHMENT OF THIS CERTIFICATE TO ANOTHER DOCUMENT. THIS CERTIFICATE Title or Type of Document MUST BE ATTACHED TO THE DOCUMENT Number of Pages DESCRIBED Date of Document AT RIGHT: Signer(s) Other Than Named Above: "Exhibit D" to Loan Agreement Page 7 of 9 4\s\G:4-96Agree: W a1Iace:GxhibitD RLS 96-523 7/29/96 Al STATE OF CALIFORNIA ) COUNTY OF ) On personally appeared ss before me, ame, title, e.g., "Jane Doe, Notary Public"), (name(s) of signer(s)), personally known to be -- OR -- 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/slie/they executed the same in his/her/their authorized cdpacity(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. Witness my hand and official seal. CAPACITY CLAIMED BY SIGNER: Individual Corporate Officer(s): Partner(s): Limited Attorney -in -Fact Trustees) Guardian/Conservator Other SIGNER IS REPRESENTING: Name of Person(s) or Entity(ies) Title(s) General (Signature of Notary) ATTENTION NOTARY: Although the information requested below is OPTIONAL, IT COULD PREVENT FRAUDULENT ATTACHMENT OF THIS CERTIFICATE TO ANOTHER DOCUMENT. THIS CERTIFICATE MUST BE ATTACHED TO THE DOCUMENT DESCRIBED AT RIGHT: Title or Type of Document Number of Pages Date of Document Signer(s) Other Than Named Above: "Exhibit D" to Loan Agreement Page 8 of 9 4\s\G:4-96Ag-ee: W allace:ExhibilD RLS 96-523 7/29/96 EXHIBIT A LEGAL DESCRIPTION OF PROPERTY [To Be Inserted] LEGBI, DESCRIPTION EXHIBIT "A" PARCEL 1: •i :I An undivided one twenty second (1/22) fee simple interest as a tenant in common in and to all of the Common Area defined in Declaration referred to below and described in the 1! Condominium Plan ("Plan") for Lot 1 of Tract No. 14828, which Plan was recorded on August:l 25, 1994 as Instrument No. 94-0525335 of official Records of orange County, over Lot 1 ofJi Tract No. 14828, in the City of Huntington Beach, County of orange, State of California, j as per map filed in Book 706, Pages 27 to 29 of 11iscellaneous Maps, in the office of the:; County Recorder of said County. j Excepting therefrom all oil, petroleum, asphaltum, gas, minerals and other hydrocarbon substances, as reserved in deed recorded August 16, 1921 in Book 401, Page 356 of Deeds, and in various other deeds of record. PARCEL 2: unit No. 22 consisting of certain airspace and surface elements, as shown and described in the Condominium Plan referred to in Parcel 1 above. Parcel 3:. non-exclusive easements for access, ingress, egress, use, enjoyment, drainage, encroachment, support, maintenance, repairs and for other purposes, all as described in that certain Declaration of Covenants, Conditions and Restrictions and Reservation of Easements for Pacific Park villas, recorded August 25, 1994 as Instrument No. 94-0525336 of official Records. Parcel 4: Exclusive easements appurtenant to Parcels 1 and 2 referred to above, for balcony or patio purposes, over the areasidefined, depicted and assigned on the Plan. i "Exhibit D" to•Loan Agreement Page 9 of 9 41s\G:4-96Agree: W al lace: GxhibitD RLS 96-523 7/29/96 W.+4 4 List of ®oven Payment Assistance Borrowers at Pacific Park Villas ATTACHME�NT #3 =MMMJ INITIATING DEPARTMENT: i Economic Development SUBJECT: Transferability of Pacific Park Villas Down Payment Assistance Loans COUNCIL MEETING DATE: May 17, 1999 RCA ATTACHMENTS STATUS Ordinance (w/exhibits & legislative draft if applicable Not Applicable Resolution (w/exhibits & legislative draft if applicable) Not Applicable Tract Map, Location Map and/or other Exhibits Not Applicable Contract/Agreement (w/exhibits if applicable) (Signed in full by the City Attorney) Not Applicable Subleases, Third Party Agreements, etc. (Approved as to form by City Attorne Not Applicable Certificates of Insurance (Approved by the City Attorney) Not Applicable Financial Impact Statement (Unbudget, over $5,000) Not Applicable Bonds (If applicable) Not Applicable Staff Report If applicable Not Applicable Commission, Board or Committee Report (If applicable) Not Applicable Findings/Conditions for Approval and/or Denial Not Applicable EXPLANATION FOR MISSING ATTACHMENTS REVIEWED RETURNED FORWARDED Administrative Staff Assistant City Administrator Initial City Administrator Initial p� City Clerk EXPLANATION FOR RETURN OF ITEM: RCA Author: Duran at extension1529 Council/Agency Meeting Held: 5-17-`1i Deferred/Continued to: Approved ❑ Conditionally Approved . ❑ Denied G _r)—/ 1-14,0akA, AARcc-T 7Z Qi t� City Clerk's ignature C-13,ev,f Council Meeting Date: May 17, 1999 I Department ID Number: ED 99-29 CITY OF HUNTINGTON BEACH REQUEST FOR REDEVELOPMENT AGENCY ACTION E' SUBMITTED TO: HONORABLE CHAIRMAN AND REDEVELOPMENT AGENCY _=a I"_,7 4 MEMBERS SUBMITTED BY: RAY SILVER, Executive Director 1* CJ' i PREPARED BY: DAVID C. BIGGS, Economic Development Director > SUBJECT: Authorize the Transferability of 15 Pacific Park Villas Down Payment Assistance Loans - Approve and Authorize Execution of Documents Statement of Issue, Funding Source, Recommended Action, Alternative Action(s), Analysis, Environmental Status, Attachment(s) Statement of Issue: Currently, the down payment assistance loans made by the Redevelopment Agency for Pacific Park Villas must be individually approved by the City Council. In order to facilitate transfers of these loans, staff is requesting that the Redevelopment Agency establish procedures for administrative approval of these transactions. Funding Source: None as a result of this action. Recommended Action: Motion to: 1. Authorize the Executive Director and the Agency Clerk to execute on behalf of the Redevelopment Agency any and all documents necessary to transfer to new low and moderate -income homebuyers the Down Payment Assistance Loans made by the Agency at the inception of the Pacific Park Villas project. See Attachment No. 3 "List of Down Payment Assistance Borrowers at Pacific Park Villas." (All documents to be approved as to form by the Agency Counsel). 2. Authorize the Executive Director and Agency Clerk to execute on behalf of the Redevelopment Agency any and all documents necessary to subordinate or to reconvey the Agency loans (notes and deeds of trust), as these home owners refinance, sell their homes or meet their loan obligations, as stated in their notes and deeds of trust. See Attachment No. 3 "List of Down Payment Assistance Borrowers at Pacific Park Villas." (All documents to be approved as to form by the Agency Counsel). 4r 6'y REQUEST FOR REDEVELOPMENT AGENCY ACTION MEETING DATE: May 17, 1999 . DEPARTMENT ID NUMBER: ED 99-29 Alternative Action(s): The Redevelopment Agency can retain the authority to approve the transferability of each and every Down Payment Assistance Loan made on this project. The number of loans originated for this project was 16 loans. This means that each and every time, Agency staff will have to prepare a Request for Agency Action, thereby increasing staff time and costs. It will also delay the ability the sellers and buyers to close escrow quickly. In some cases the delays could cause undue hardship and cause the sale of properties to fall out of escrow. Analysis: In 1996, the Redevelopment Agency made 15 Down Payment Assistance Loans to low- and moderate -income homebuyers purchasing dwellings at the Pacific Park Villas residential project located near Talbert and Beach. The purpose of these loans were to expedite the sales of homes in the Pacific Park Villas project and simultaneously meet the Redevelopment Agency's obligation to assist low and moderate income persons with 20% Set Aside Funds, as required by Redevelopment Law. The loans made to these homebuyers were meant to be transferable to other low and moderate -income families. The City Attorney's Office has been requested to make a determination of the transferability and has rendered a decision indicating that the loans are transferable to other homebuyers that meet the income qualification of having incomes below 120% of the median income for Orange County. (See attached memorandum from the City Attorney's Office). Some of these homebuyers are now ready to move on with their lives and are desirous to sell their properties. To facilitate the closing of escrows without significant delays to sellers and buyers, the Economic Development Department is requesting that the Redevelopment Agency Board authorize the Executive Director and the City Clerk to administratively manage the transferability of these loans. This will permit the Executive Director to execute documents without having to come the Agency Board on each and every loan, especially since these loans were prepared with the identical notes, deeds of trust and Covenants, Conditions and Restrictions (CC&R's). The City Attorney's Office has provided an opinion on the loans' transferability. Environmental Status: N/A Attachment(s): 1. 1 City Attorney's Office Memorandum. 2. Sample Loan Documents. 3. 1 List of Down Payment Assistance Borrowers at Pacific Park Villas. RCA Author: Gus Duran X1529 RCAPPV.DOC -2- 05/05/99 9:34 AM DOWN PAYMENT ASSISTANCE PROGRAM Pacific PaA Villas - Loan No. — Name Property Address Amount Council/Agency Date 95-01 Carillo, Ana 7861 Happy Drive #102 92648 ___ 35,000 1/3/95 95-02 Lawrence, James/Jeanette 18051 Joyful Lane #101A 92648_______ 35,000- 1/3/95 95-03 95-04 Wong, Wesley Hocker, Christopher & Vandereb, Gayle 7861 Happry Drive #202 92648 _ 7861 Happy Drive #101 92648 - 35,000 35,000 1/3/95 -- 1/3/95 95-06 Rivera, Victor & Burgess, Debra 18061 Joyful Lane #104 92648 - _ 35,000 _ 4/3/95 96-01 Heckethorne, Sean/Jacquelyn 7871 Happy Drive #102 92648 + _ 35,000 1/16/96 96-02 96-03 Margolis, Peter J Wen aid, Julie 18051 Joyful Lane #104 92648 18061 Joyful Lane #205 92648 —� 35,000 35,000 _ 3/4/96 4/1/96 96-04 Peltier, Edward 7871 Happy Drive #201 92648 - 35,000 7/15/96 96-05 Wallace, Barbara Jo 18051 Joyful Lane #205 92648 35,000 8/5/96 96-06--- -- 97-01 97-02 97-03 Murch, Gregory s. Krueck, Deborah J. OsterhaueIt, Robert/Kathy Hosseinali Faroukh 18051 Joyful Lane #102 92648 18061 Joyful Lane #103 92648 18061 Joyful Lane #102 92648 18061 Joyful Lane #201 92648 35,000 35,600 35,000 35,000 35,000 8 5 96 1121/97 4/30/97 5/5/97 7/1/97 97-04 Torchione, Richard 18051 Joyful Lane #201 92648 (1 l oc o Lw AX- .a— Council/Agency Meeting Held: Deferred/Continued to: ❑ Approved ❑ Conditionally Approved ❑ Denied \!J ,�4ity Clerk's Signature Council Meeting Date: January 16, 1996 Department ID Number: ED 96-05 SUBMITTED TO: HONORABLE CHAIRMAN AND REDEVELOPMENT AGENCY MEMBERS SUBMITTED BY: MICHAEL T. UBERUAGA, Executive D' / PREPARED BY: David C. Biggs, Director of Economic Development SUBJECT: DOWN PAYMENT ASSISTANCE PROGRAM - PARTICIPANT APPROVAL PACIFIC PART( VILLAS PROJECT, TALBERT-BEACH REDEVELOPMENT PROJECT AREA Statement of Issue, Funding Source, Recommended Action, Alternative Action(s), Analysis, Statement of Issue: The Agency is committed by a Disposition and Development Agreement to provide second trust deed loans to moderate income buyers in the Pacific Park Villas located in the Talbert- Beach Redevelopment Project Area. Funding Source: Redevelopment Agency Housing Set -Aside Funds, Account Number E-TX-E D -92 3-7-75-00. Recommended Action: Motion to: Approve the borrower listed on the attached by name, the amount of the loan and the specific property subject to trust deed and authorize the Chairperson and Agency Clerk to execute the loan documents between the Agency and the participant as prepared by the City Attorney. Alternative Action(s): Do not approve the participants. n > iiii 4nH MEETING DATE: January 16, 1996 DEPARTMENT ID NUMBER: ED 96-05� Analyses: On June 3, 1993, the Redevelopment Agency approved a Disposition and Development Agreement (DDA) between the Agency and Sassounian Capital Ventures Inc., calling for the completion of 38 condominiums on a site in the Talbert -Beach Redevelopment Project Area. Under the DDA, $750,000 of Redevelopment Housing funds are committed to assist up to twenty-five moderate -income buyers in the Pacific Park Villas Condominium project. This borrower has been reviewed to assure that they meet the income restrictions and other guidelines for the Down Payment Assistance Program. Environmental Status: None Attachment(s): 1. Prospective Borrower 2. Loan Documents RAA9605.DOC -2- 01/05/96 5:04 PM ATTAC MENT #1 Ll REQUEST FOR REDEVELOPMENT AGENCY ACTION MEETING DATE: January 16, 1996 DEPARTMENT ID NUMBER: ED 96-05 . DOWN PAYMENT ASSISTANCE PROGRAM Location of Property Loan Name ( Amount Subject to Trust Deed 96-01 Sean & JacquelfRe Heckethornf $35,000 7871 Happy Drive, #102 Note: 1. Borrowers have received "conditional loan approval' from first trust deed lender. 2. Pursuant to Agency direction, overtime and bonuses are considered indefinite sources of income and may or may not be used to qualify borrowers on a case - by -case basis. RAA9605.DOC -3- 01/03/96 10:52 AM ATTACHMENT #2- I1111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111 19093 Beach Boulevard • Huntington Beach, CA 92648 ® (714) 843-0101 • FAX (714) 843-9949 City of Huntington Beach Attention: Dan Bruening 2000 Main Street Huntington Beach, Ca. 92648 Date: April 1, 1996 Escrow No.: 8791-C Property Address: 7871 Happy Drive, #102, Huntington Beach, Ca 92648 In connection with the'above-numbered escrow, we are enclosing herewith the following: Returning EXHIBIT H per your request. If you should have any questions regarding the above, please do not hesitate to contact the undersigned. Thank you for your cooperation in this matter. Sinc elyVpb, -Linda J.11 Escrow Officer J IAN IN 4, ■ CERTIFICATE OF PROPOSED TRANSFEREE THIS FORM MUST BE DELIVERED TO THE DEVELOPER BEFORE PROCEEDING WITH ANY TRANSFER OF THE PROPERTY. 1996 The Proposed Transferee is f Names: Sean A. Heckethorn Jacqueli+ie A. Heckethorn yN Current Address: -71 L � tl b : *3 NV1N£1-t3t., F'1 C.41 lc* C176gq Telephone Number: 177 l LI - 9H q._ 1 i � 1 2. The address of the property which the proposed transferee desires to purchase is 7871 Happy Drive, #102, Huntington Beach, CA 92648 (the "Property"), which was built in the Talbert Beach Redevelopment Project Area. The Proposed transferee represents, warrants and covenants the following: (a) The Property will be the principal residence of the proposed transferee. (b) The combined maximum annual income in the current year for all household members of the proposed transferee is $ '% , .100.00 . (This figure must reflect income from all sources.) (c) The proposed transferee will deliver to the Redevelopment Agency of the City of Huntington Beach a signed financial statement on a form acceptable to the Agency. 4. The proposed transferee's household consists of the following persons who will reside in the Property: Adults (18 of over) - [name of each] : Sean A. Heckethorn � Jacqueline A. Heckethorn / z1 ri Minors (under 18) - [name of each]: "Exhibit H" to Loan Agreement Page 1 of 6 SFs\Agree:Heck: Certificate\1 /4/96 5. The proposed transferee must submit to the Developer, on a form available from the Developer, an income certification so the Developer may determine if the proposed transferee is an Eligible Person or Family. 6. A true and correct copy of the proposed transferee's most recent tax return to the U.S. Internal Revenue Service is attached hereto. 7. The terms of the proposed transfer are: (a) Sales price of $196,900.00. This sales price is based on the less of xx (i) Fair market value; or (ii) The maximum price at which the Purchase Housing Cost of the Proposed Transferee would not exceed Affordable Housing Cost. The calculation of the Sales Price under this subsection (ii) is illustrated in Attachment No. 10 to the Disposition and Development Agreement. IN ORDER TO ANSWER QUESTION 2(a) YOU MUST CALCULATE THE PROPOSED SALES PRICE BASED ON AFFORDABLE HOUSING COST, TAKING INTO CONSIDERATION ALL ITEMS LISTED IN THE DEFINITION OF PURCHASE HOUSING COST. (b) Price of any personal property being sold by the owner to the proposed transferee: E1� (if none, so state) (c) The price of $ —0— to be paid by the proposed transferee for any services of Owner. (If none, so state.) (d) All other amounts of money or other consideration, if any, concerning the Property or any other matter to be paid by the proposed transferee to the Owner: $ —0— . (If none, so state.) "Exhibit H" to Loan Agreement Page 2 of 6 SF1s\Agree:Heck: Certificate\ 1/4/96 (e) Sources of payment of sales price: Sales price $196.900.00 Cash down payment $ 6,000.00 1st loan $ 155,900.00 2nd loan $ 35,000.00 Other (describe) $ $196.900.00 Total (f) The financing obtained by the proposed transferee to purchase the Property is as follows: 1 st Loan: Loan amount: $ 155,900.00 Monthly payments: $ 1,105.09 Interest rate 7.25 % if variable interest, describe adjustment mechanism: FIXED RATE Due date: Balloon payment amount: Points and fees: Lender: Lender's address: SF\s\Agree: Heck: Certificate\ 1 /4/96 FEBRUARY 1, 2026 -0- $2,470.18 APPROXIMATE WEYERHAEUSER MORTGAGE COMPANY 1551 N. TUSTIN AVENUE, SUITE 670 SANTA ANA, CALIFORNIA 92701 LOAN NO: 497021 "Exhibit H" to Loan Agreement Page 3 of 6 2nd Loan: Loan amount: $ 35,000.00 Monthly payments: $ —0— Interest rate 5.00% ACCRUING if variable interest, describe adjustment mechanism: Due date: Balloon payment amount: Points and fees: UPON SALE PRINCIPAL AND ACCRUED INTEREST Lender: City of Huntington Beach Lender's address: 2000 Main Street Huntington Beach, CA 92648 Other Loans: (describe, if none, so state) (g) The monthly Purchase Housing Cost to be paid by the proposed transferee: 1 st loan monthly payment: $ 1,063.52 2nd loan monthly payment: $ —0— Other loans monthly payment: $ Taxes and assessments (1/12 of yearly taxes and assessments): $ 200.00 (Estimated) Insurance (1 /12 of yearly $ 41.57 (PMI Insurance) premium) Homeowner's dues: $ 145.12 Total: $ 1, 405.21 "Exhibit H" to Loan Agreement Page 4 of 6 S FS\Agree: Heck: Certificate\ 1 /4/96 r 8. A true and correct copy of the purchase and sale or other agreement between the owner and the proposed transferee is attached hereto. I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct. PROPOSED TRANSFEREE: Date Sig natureD Sean A. Heckethorn Print name ' nature Jacqueli A. Heckethorn Print name Street Address Telephone City State Zip Code "Exhibit H" to Loan Agreement Page 5 of 6 S F\s\Agree: Heck: C ertifi cate\ 1 /4/96 Developer's Certification Based on the Proposed Transferee's Certificate, above, and all documents attached hereto, Developer hereby certifies that: (1) Proposed Transferee is an Eligible Person or Family; and (2) The monthly Purchase Housing Cost to be paid by the Proposed Transferee shall not exceed the monthly Affordable Housing Cost. [Capitalized terms used above are defined in the Disposition and Development Agreement to which this certificate is attached.] DEVELOPER: SASSOUNIAN CAP E, INC. A CALIFO CORPORAT Its: Date: JANUARY 25, 1996 "Exhibit H" to Loan Agreement Page 6 of 6 S F\s\Agree: Heck: Certificate\ 1 /4/96 CONTINENTAL LAWYERS TITLE COMPANY A Wholly Owned Subsidiary of Lawyers Title Insurance Corporation 1015 N. Main Street, Santa Ana, California 92701 Telephone (714) 835-5575 Redevelopment Agency of the City of Huntington Beach 2000 Main St Huntington Beach, CA Our No.: 9402205-04 Re: Heckethorn Dear Agency Clerk: Enclosed please find our policy of title insurance issued per your request. Thank you for using Continental Lawyers Title Company. Very truly yours, Continental Lawyers Title Company Subsidiary of Lawyers Title Insurance Corporation u 1992 ALTA Loan Policy t4aye rg itIe Insurance Corporation NATIONAL HEADQUARTERS RICHMOND. VIRGINIA Loan Policy Number 135-06- 547-397 SUBJECT TO THE EXCLUSIONS FROM COVERAGE, THE, EXCEPTIONS" FROM COVERAGE CONTAINED IN SCHEDULE B AND THE CONDITIONS AND STIPULATIONS, LAWYERS TITLE INSURANCECORPORATION, a Virginia corporation, herein called the Company, insures, as of Date of Policy shown in Schedule A, against loss or damage,' not exceeding the Amount of Insurance stated in Schedule A, sustained or incurred by the insured by reason of: 1. Title to the estate or interest described in Schedule IA being vested' -(a). arising from an improvement or work related to the land which other than as stated therein; is contracted for or commenced prior to Dale of Policy; or 2. Any defect in or lien or encumbrance on the title; (jj)'= arising from an improvement or work related to the land which 3. Unmarketability of the title; is contracted for or commenced subsequent to Date of Policy and 4. Lack of a right of access to and from the land; which is financed in whole or in part by proceeds of the 5. The invalidity or unenforceability of the lien of the insured mortgage indebtedness secured by the insured mortgage which at Date of upon the title; Policy the insured has advanced or is obligated to advance; 6. The priority of any lien or encumbrance over the lien of the_,insured 8. The invalidity or unenforceability of any assignment of the insured mortgage; mortgage, provided the assignment is shown in Schedule A, or the 7. Lack of priority of the lien of the insured mortgage over any statutory failure of the assignment shown in Schedule A to vest title to the insured lien for services, labor or material: mortgage in the named insured assignee free and clear of all liens. The Company will also pay the costs, attorneys' fees and expenses incurred in defense of the title or the lien of the insured mortgage as insured, but only to the extent provided in the Conditions and Stipulations. EXCLUSIONS FROM COVERAGE The following matters are expressly excluded from the coverage of this policy and the Company will not pay loss or damage, costs, attorneys' fees or expenses which arise by reason of: 1. (a) Any law, ordinance or governmental regulation (including but not limited to building and zoning laws, ordinances or regulations) restricting, regulating, prohibiting or relating to (i) the occupancy, use or enjoyment of the land; (ii) the character, dimensions or location of any improvement now or hereafter erected on the land; (iii) a separation in ownership or a change in the dimensions or area of the land or any parcel of which the land is or was a part; or (iv) environmental protection, or the effect of any violation of these laws, ordinances or governmental regulation, except to the extent that a notice of the enforcement thereof or a notice of a defect, lien or encumbrance resulting from a violation or alleged violation affecting the land has been recorded in the public records at Date of Policy. (b) Any governmental police power not excluded by (a) above, except to the extent that a notice of the exercise thereof or a notice of a defect, lien or encumbrance resulting from a violation or alleged violation affecting the land has been recorded in the public records at Date of Policy. 2. Rights of eminent domain unless notice of the exercise thereof has been recorded in the public records at Date of Policy, but not excluding from coverage any taking which has occurred prior to Date of Policy which would be binding on the rights of a purchaser for value without knowledge. 3. Defects, liens, encumbrances, adverse claims or other matters: (a) created, suffered, assumed or agreed to by the insured claimant; (b) not known to the Company, not recorded in the public records at Date of Policy, but known to the insured claimant and not disclosed in writing to the Company by the insured claimant prior to the date the insured claimant became an insured under this policy; (c) resulting in no loss or damage tv the insured claimant; (d) attaching or created subsequent to Date of Policy (except to the extent that this policy insures the priority of the lien of the insured mortgage over any statutory lien for services, labor or material); or (e) resulting in loss or damage which would not have been sustained if the insured claimant had paid value for the insured mortgage. 4. Unenforceability of the lien of the insured mortgage because of the inability or failure of the insured at Date of Policy, or the inability or failure of any subsequent owner of the indebtedness, to comply with applicable doing business laws of the state in which the land is situated. 5. Invalidity or unenforceability of the lien of the insured mortgage, or claim thereof, which arises out of the transaction evidenced by the insured mortgage and is based upon usury or -any consumer credit protection or truth in lending law. 6. Any statutory lien for services, labor or materials (or the claim of priority of any statutory lien for services, labor or materials over the lien of the insured mortgage) arising from an improvement or work related to the land which is contracted for and commenced subsequent to Date of Policy and is not financed in whole or in part by proceeds of the indebtedness secured by the insured mortgage which at Date of Policy the insured has advanced or is obligated to advance. 7. Any claim, which arises out of the transaction creating the interest of the mortgagee insured by this policy, by reason of the operation of federal bankruptcy, state insolvency or similar creditors' rights laws, that is based on: (a) the transaction creating the interest of the insured mortgagee being deemed a fraudulent conveyance or fraudulent transfer; or (b) the subordination of the interest of the insured mortgagee as a result of the application of the doctrine of equitable subordination; or (c) the transaction creating the interest of the insured mortgagee being deemed a preferential transfer except where the preferential transfer results from the failure: (i) to timely record the instrument of transfer; or (ii) of such recordation to impart notice to a purchaser for value or a judgment or lien creditor. Policy 135 e Litho in U.S.A. 061-0-135-0006 Cover Sheet ALTA Loan Policy (10-17-92) CONDITIONS AND STIPULATIONS 1. DEFINITION OF TERMS. 3. NOTICE OF CLAIM TO BE GIVEN BY INSURED CLAIMANT. The following terms when used in this policy mean: (a) ''insured'': the insured named n Schedule A. The term ''insured" The insured shall notify the Company promptly in writing (Q in case of any litigation as set forth in Section 4(a) below, (ii) in case knowledge shall also includes come to an insured hereunder of any claim of title or interest,which is adverse (i) the owner of the indebtedness secured by the insured mortgage to the title to the estate or interest or the, lien of the insured'mortgage, as in - and each successor in ownership of the indebtedness except a successor who is an obligor under the provisions of Section 12(c) of these Conditions sured, and which might cause loss or damage for which the Company may be liable by virtue of this policy, or (iii) if title to the estate or interest or the and Stipulations (reserving, however, all rights and defenses as to any suc- cessor that the Company would have had against any predecessor insured, lien of the insured mortgage, as insured, is rejected as unmarketable. If prompt notice shall not be given to the Company, then as to the insured all liability unless the successor acquired the indebtedness as a purchaser for value of the Company shall terminate with regard to the matter or matters for which without knowledge of the asserted defect, lien, encumbrance, adverse claim prompt notice is required; provided, however, that failure to notify the Com- or other matter insured against by this policy as affecting title to the estate pany shall in no case prejudice the rights of any insured under this policy unless the Company shall be prejudiced by the failure and then only to the or interest in the land); (n) any governmental agency or governmental instrumentality which extent of the prejudice. is an insurer or guarantor under an insurance contract or guaranty insuring 4. DEFENSE AND PROSECUTION OF ACTIONS; DUTY OF INSURED or guaranteeing the indebtedness secured by the insured mortgage, or any CLAIMANT TO COOPERATE. part thereof, whether named as an inspired herein or not; (a) Upon written request by the insured and subject to the options (iii) the parties designated in Section 2(a) of these Conditions and contained in Section 6 of these Conditions and Stipulations, the Company, Stipulations. at its own costand without unreasonable delay, shall provide for the defense (b) ''insured claimant'': an insured claiming loss or damage. of an insured in litigation in which any third party asserts a claim adverse to (c) "knowledge" or ''known'': actual knowledge, not constructive the title or interest as insured, but only as to those stated causes of action knowledge or notice which may be Imputed to an insured by reason of the alleging a defect, lien or encumbrance or other matter insured against by public records as defined in this policy or any other records which impart this policy. The Company shall have the right to select counsel of its choice constructive notice of matters affecting the land. (subject to the right of the insured to object for reasonable cause) to repre- (d) "land'': the land described or referred to in Schedule A, and sent the insured as to those stated causes of action and shall not be liable improvements affixed thereto which by law constitute real property. The term for and will not pay the fees of any other counsel. The Company will not pay "land'' does not include any property beyond the lines of the area described any fees, costs or expenses incurred by the insured in the defense of those or referred to in Schedule A, nor any right, title, interest, estate or easement causes of action which allege matters not insured against by this policy. in abutting streets, roads, avenues, alleys, lanes, ways or waterways, but nothing (b) The Company shall have the right, at its own cost, to institute and herein shall modify or limit the extent to which a right of access to and from prosecute any action or proceeding orto.do any other act which in its opinion the land is insured by this policy. may be necessary or desirable to establish the title to the estate or interest (e) ''mortgage'': mortgage, deed of trust, trust deed, or other security or the lien of the insured mortgage, as insured, or to prevent or reduce loss instrument. or damage to the insured. The Company may take any appropriate action (f) "public records'': records established understate statutes at Date of under the terms of this policy, whether or not it shall be liable hereunder, and Policy for the purpose of imparting constructive notice of matters relating to shall not thereby concede liability or waive any provision of this policy. If the real property to purchasers for value and without knowledge. With respect Company shall exercise its rights under this paragraph, it shall do so diligently. to Section 1(a)(iv) of the Exclusions From Coverage, "public records'' shall (c) Whenever the Company shall have brought an action or interposed also include environmental protection liens filed in the records of the clerk defense as required or permitted by the provisions of this policy, the Com- of the United States district court for the district in which the land is located, pany may pursue any litigation to final determination by a court of competent (g) "unmarketability of the title'': an alleged or apparent matter jurisdiction and expressly reserves the right, in its sole discretion, to appeal affecting the title to the land, not excluded or excepted from coverage, which from any adverse judgment or order. would entitle a purchaser of the estate or interest described in Schedule A (d) In all cases where this policy permits or requires the Company to pro - or the insured mortgage to be released from the obligation to purchase by secute or provide for the defense of any action or proceeding, the insured virtue of a contractual condition requiring the delivery of marketable title. shall secure to the Company the right to so prosecute or provide defense 2. CONTINUATION OF INSURANCE. in the action or proceeding, and all appeals therein, and permit the Com- a) After Acquisition of Title. The coverage of this policy shall continue pany to use, at its option, the name of the insured for this purpose. Whenever in force as of Date of Policy in favor of (i) an insured who acquires all or any requested by the Company, the insured, at the Company's expense, shall part of the estate or interest in the land by foreclosure, trustee's sale, con- give the Company all reasonable aid (i) in any action or proceeding, securing veyance in lieu of foreclosure, or other legal manner which discharges the evidence, obtaining witnesses, prosecuting or defending the action or pro - lien of theinsured mortgage; (ii) a transferee of the estate or interest so acquired ceeding, or effecting settlement, and (ii) in any other lawful act which in the from an insured corporation, provided the transferee is the parent or wholly- opinion of the Company may be necessary or desirable to establish the title owned subsidiary of the insured corporation, and their corporate successors to the estate or interest or the lien of the insured mortgage, as insured. If the by operation of law and not by purchase, subject to any rights or defenses Company is prejudiced by the failure of the insured to furnish the required the Company may have against any predecessor insureds; and (iii) any govern- cooperation, the Company's obligations to the insured under the policy shall mental agency or governmental instrumentality which acquires all or any part terminate, including any liability or obligation to defend, prosecute, or con - of the estate or interest pursuant to a contract of insurance or guaranty insur- tinue any litigation, with regard to the matter or matters requiring such ing or guaranteeing the indebtedness secured by the insured mortgage. cooperation. (b) After Conveyance of Title. The coverage of this policy shall continue in force as of Date of Policy in favor of an insured only so long as the insured 5. PROOF OF LOSS OR DAMAGE. In addition to and after the notices required under Section 3 of these Con - retains an estate or interest in the land, or holds an indebtedness secured ditions and Stipulations have been provided the Company, a proof of loss by a purchase money mortgage given by a purchaser from the insured, or only so long as the insured shall have liability by reason of covenants of war- or damage signed and sworn to by the insured claimant shall be furnished to the Company within 90 days after the insured claimant shall ascertain the ranty made by the insured in any transfer or conveyance of the estate or in- terest. This policy shall not continue in force in favor of any purchaser from facts giving rise to the loss or damage. The proof of loss or damage shall describe the defect in, or lien or encumbrance on the title, or other matter the insured of either (i) an estate or interest in the land, or (ii) an indebtedness insured against by this policy which constitutes the basis of loss or damage secured by a purchase money mortgage given to the insured. and shall state, to the extent possible, the basis of calculating the amount (c) Amount of Insurance. The amount of insurance after the acquisition or after the conveyance shall in neither event exceed the least of: of the loss or damage. If the Company is prejudiced by the failure of the in - sured claimant to provide the required proof of loss or damage, the Com- (i) the Amount of Insurance stated in Schedule A; pany's obligations to the insured under the policy shall terminate, including (ii) the amount of the principal of the indebtedness secured by the any liability or obligation to defend, prosecute, or continue any litigation, with insured mortgage asof Date of Policy, interest thereon, expenses of foreclosure, regard to the matter or matters requiring such proof of loss or damage. amounts advanced pursuant to the insured mortgage to assure compliance In addition, the insured claimant may reasonably be required to submit with laws or to protect the lien of the insured mortgage prior to the time of acquisition of the estate or interest in the land and secured thereby and to examination under oath by any authorized representative of the Company and shall produce for examination, inspection and copying, at such reasonable reasonable amounts expended to prevent deterioration of improvements, but times and places as may be designated by any authorized representative reduced by the amount of all payments made; or (iii) the arnount paid by any governmental agency or governmental of the Company, all records, books, ledgers, checks, correspondence and memoranda, whether bearing a date before or after Date of Policy, which instrumentality, if the agency or instrumentality is the insured claimant, in the reasonably pertain to the loss or damage. Further, if requested by any author - acquisition of the estate or interest in satisfaction of its insurance contractor ized representative of the Company, the insured claimant shall grant its per - mission, in writing, for any authorized representative of the Company to guaranty. continued on next page of cover sheet CONDITIONS AND STIPULATIONS —CONTINUED examine, inspect and copy all records, books, ledgers, checks, qor- 8. LIMITATION OF LIABILITY. respondence and memoranda in the custody or control of athird party, which (A) If the Company'establishes the title, or removes the alleged defect, reasonably pertain to the loss or damage. All information designated as con- lien or encumbrance, or cures the lack of a right of access to or from the land, fidential by the insured claimant provided to the Company pursuant to this or cures the claim of unmarketability of title, or otherwise establishes the lien Section shall not be disclosed to others unless, in the reasonable judgment of the insured mortgage, all as insured, in a reasonably diligent manner by of the Company, it is necessary in the administration of the claim. Failure of any method, including litigation and the completion of any appeals therefrom. the insured claimant to submit for examination under oath, produce other it shall have fully performed its obligations with respect to that matter and reasonably requested information or grant permission to secure reasonably shall not be liable for any loss or damage caused thereby. necessary information from third parties as required in this paragraph, unless (b) In the event of any litigation, including litigation by the Company prohibited by law or governmental regulation, shall terminate any liability of the Company under this policy as to that claim. or with the Company's consent, the Company shall have no liability for loss 6. OPTIONS TO PAY OR OTHERWISE SETTLE CLAIMS; or damage until there has been a final determination by a court of competent jurisdiction, and disposition of all appeals therefrom, adverse to the title or TERMINATION OF LIABILITY. to the lien of the insured mortgage, as insured. In case of a claim under this policy, the Company shall have the follow- (c) The Company shall not be liable for loss or damage to any insured ing additional options: (a) To Pay or Tender Payment of the Amount of Insurance or to for liability voluntarily assumed bythe insured in settling any claim or suit without Purchase the Indebtedness. the prior written consent of the Company. (Q to pay or tender payment of the amount of insurance under (d) The Company shall not be liable for: (i) any indebtedness created subsequent to Date of Policy except for advances made to protect the lien this policy together with any costs, attorneys' fees and expenses incurred by the insured claimant, which were authorized by the Company, up to the of the insured mortgage and secured thereby and reasonable amounts ex - time of payment or tender of payment and which the Company is obligated pended to prevent deterioration of improvements; or (ii) construction loan to pay; or advances made, subsequent to.Date of Policy, except construction loan ad - (ii) to purchase the indebtedness secured by the insured mortgage vances made subsequent to Date of Policy for the purpose of financing in for the amount owing thereon together with any costs, attorneys' fees and whole or in part the construction of an improvement to the land which at Date expenses incurred by the insured claimant which were authorized by the Com- of Policy were secured by the insured mortgage and which the insured was pany up to the time of purchase and which the Company is obligated to pay. and continued to be obligated to advance at and after Date of Policy. If the Company offers to purchase the indebtedness as herein provided, 9• REDUCTION OF INSURANCE; REDUCTION OR TERMINATION the owner of the indebtedness shall transfer, assign, and convey the in- OF LIABILITY. debtedness and the insured mortgage, together with any collateral security, (a) All payments under this policy, except payments made for costs, to the Company upon payment therefor. attorneys' fees and expenses, shall reduce the amount of the insurance pro Upon the exercise by the Company of either of the options provided tanto. However, any payments made prior to the acquisition of title to the estate for in paragraphs a(i) or (ii), all liability and obligations to the insured under or interest as provided in Section 2(a) of these Conditions and Stipulations this policy, other than to make the payment required in those paragraphs, shall not reduce pro tanto the amount of the insurance afforded under this shall terminate, including any liability or obligation to defend, prosecute, or policy except to the extent that the payments reduce the amount of the in - continue any litigation, and the policy shall be surrendered to the Company debtedness secured by the insured mortgage. for cancellation. (b) Payment in part by any person of the principal of the indebtedness, (b) To Pay or Otherwise Settle With Parties Other than the Insured or any other obligation secured by the insured mortgage, or any voluntary or With the Insured Claimant. partial satisfaction or release of the insured mortgage, to the extent of the (i) to pay or otherwise settle with other parties for or in the name payment, satisfaction or release, shall reduce the amount of insurance pro of an insured claimant any claim insured against under this policy, together tanto. The amount of insurance may thereafter be increased by accruing in - with any costs, attorneys' fees and expenses incurred by the insured clai- terest and advances made to protect the lien of the insured mortgage and mant which were authorized by the Company up to the time of payment and secured thereby, with interest thereon, provided in no event shall the amount which the Company is obligated to pay; or of insurance be greater than the Amount of Insurance stated in Schedule A. (ii) to pay or otherwise settle with the insured claimant the loss or (c) Payment in full by any person or the voluntary satisfaction or release damage provided for under this policy, together with any costs, attorneys' of the insured mortgage shall terminate all liability of the Company except fees and expenses incurred, by the insured claimant which were authorized as provided in Section 2(a) of these Conditions and Stipulations. by the Company up to the time of payment and which the Company is obligated 10. LIABILITY NONCUMULATIVE. to pay. If the insured acquires title to the estate or interest in satisfaction of the Upon the exercise bytthe Company of either of the options provided indebtedness secured by the insured mortgage, or any part thereof, it is for in paragraphs b(i) or (6), the Company's obligations to the insured under expressly understood that the amount of insurance under this policy shall this policy for the claimed loss or damage, other than the payments required be reduced by any amount the Company may pay under any policy insuring to be made, shall terminate, including any liability or obligation to defend, a mortgage towhich exception is taken in Schedule B or to which the insured prosecute or continue any litigation. has agreed, assumed, or taken subject, of which is hereafter executed by 7. DETERMINATION AND EXTENT OF LIABILITY. an insured and which is a charge or lien on the estate or interest described This policy is a contract of indemnity against actual monetary loss or or referred to in Schedule A, and the amount so paid shall be deemed a pay - ment under this policy. damage sustained or incurred by the insured claimant who has suffered loss 11. PAYMENT OF LOSS. or damage by reason of matters insured against by this policy and only to the extent herein described. (a) No payment shall be made without producing this policy for endorse - (a) The liability of the Company under this policy shall not exceed the ment of the payment unless the policy has been lost or destroyed, in which least of: case proof of loss or destruction shall be furnished to the satisfaction of the (i) the Amount of Insurance stated in Schedule A, or, if applicable, Company.(b) When liability and the extent of loss or damage has been definitely the amount of insurance as defined in Section 2 (c) of these Conditions and Stipulations; Ishall the the indebtedness secured by fixed in accordance with these Conditions and Stipulations, the loss or damage be payable within 30 days thereafter. (ii) amount of unpaid principal the insured mortgage as limited or provided under Section 8 of these Condi 12 SUBROGATION UPON PAYMENT OR SETTLEMENT. tions and Stipulations or as reduced under Section 9 of these Conditions and (a) The Company's Right of Subrogation. Whenever the Company shall have settled and paid a claim under this Stipulations, at the time the loss or damage insured against by this policy policy, all right of subrogation shall vest in the Company unaffected by any occurs, together with interest thereon; or act of the insured claimant. ui theiffbetweenhlf the insured estate or () difference the value o The Company shall be subrogated.to and be entitled to all rights and interest as insured and the value of the insured estate or interest subject to remedies which the insured claimant would have had against any person the defect, lien or encumbrance insured against by this policy. or property in respect to the claim had this policy not been issued. If requested (b) In the event the insured has acquired the estate or interest in the by the Company, the insured claimant shall transfer to the Company all rights manner described in Section 2(a) of these Conditions and Stipulations or has and remedies against any person or property necessary in order to perfect conveyed the title, then the liability of the Company shall continue as set forth this right of subrogation. The insured claimant shall permit the Company to in Section 7(a) of these Conditions and Stipulations. sue, compromise or settle in the name of the insured claimant and to use (c) The Company will pay only those costs, attorneys' fees and expenses the name of the insured claimant in any transaction or litigation involving these incurred in accordance with Section 4 of these Conditions and Stipulations. rights or remedies. If a payment on account of a claim does not fully cover the loss of the continued on remainder of cover sheet CONDITIONS AND STIPULATIONS —CONTINUED insured claimant, the Company shall be subrogated to all rights and remedies or less shall be arbitrated at the option of either the Company or the insured. of the insured claimant after the insured claimant shall have recovered its prin- All arbitrable matters when the Amount of Insurance is in excess of $1,000,000 cipal, interest, and costs of collection. shall be arbitrated only when agreed to by both the Company and the in- (b) The Insured's Rights and Limitations. sured. Arbitration pursuant to this policy and under the Rules in effect on the Notwithstanding the foregoing, the owner of the indebtedness secured date the demand for arbitration is made or, at the option of the insured, the by the insured mortgage, provided the priority of the lien of the insured mor- Rules in effect at Date of Policy shall be binding upon the parties. The award tgage or its enforceability is not affected, may release or substitute the per- may include attorneys' fees only if the laws of the state in which the land is sonal liability of any debtor or guarantor, or extend or otherwise modify the located permit a court to award attorneys' fees to a prevailing party. Judg- terms of payment, or release a portion of the estate or interest from the lien ment upon the award rendered by the Arbitrator(s) may be entered in any oftheinsured mortgage, or release any collateral security for the indebtedness. court having jurisdiction thereof. When the permitted acts of the insured claimant occur and the insured The law of the situs of the land shall apply to an arbitration under the has knowledge of any claim of title or interest adverse to the title to the estate Title Insurance Arbitration Rules. or interest or the priority or enforceability of the lien of the insured mortgage, A copy of the Rules may be obtained from the Company upon request. as insured, the Company shall be required to pay only that part of any losses 14. LIABILITY LIMITED TO THIS POLICY; POLICY ENTIRE CONTRACT. insured against by this policy which shall exceed the amount, if any, lost to (a) This policy together with all endorsements, if any, attached hereto the Company by reason of the impairment bythe insured claimant of the Com- by the Company is the entire policy and contract between the insured and pany's right of subrogation. the Company. In interpreting any provision of this policy, this policy shall be (c) The Company's Rights Against Non-insured Obligors. construed as a whole. The Company's right of subrogation against no obligors shall (b) Any claim of loss or damage, whether or not based on negligence, exist and shall include, without limitation, the rights of the insured to indem- and which arises out of the status of the lien of the insured mortgage or of nities, guaranties, other policies of insurance or bonds, notwithstanding any the title to the estate or interest covered hereby or by any action asserting terms or conditions contained in those instruments which providefor subroga- such claim, shall be restricted to this policy. tion rights by reason of this policy. (c) No amendment of or endorsement to this policy can be made ex - The Company's right of subrogation shall not be avoided by acquisition cept by a writing endorsed hereon or attached hereto signed by either the of the insured mortgage by an obligor (except an obligor described in Sec- President, a Vice President, the Secretary, an Assistant Secretary, or validating tion 1(a)(ii) of these Conditions and Stipulations) who acquires the insured officer or authorized signatory of the Company. mortgage as a result of an indemnity, guarantee, other policy of insurance, 15. SEVERABILITY. or bond and the obligor will not be an insured under this policy, notwithstan- In the event any provision of this policy is held invalid or unenforceable ding Section 1(a)(i) of these Conditions and Stipulations. under applicable law, the policy shall be deemed not to include that provi- 13. ARBITRATION sion and all other provisions shall remain in full force and effect. Unless prohibited by applicable law, either the Company or the insured 16. NOTICES, WHERE SENT. may demand arbitration pursuant to the Title Insurance Arbitration Rules of All notices required to be given the Company and any statement Inwrtfing the American Arbitration Association. Arbitrable matters may include, but are required to be furnished the Company shall Include the number of this policy not limited to, any controversy or claim between the Company and the in- and shall be addressed to the Company at its Corporate Headquarters 6630 sured arising out of or relating to this policy, any service of the Company in West Broad Street, Richmond, Virginia 23230. Mailing Address: P.O. Box 27567, connection with its issuance or the breach of a policy provision or other obliga- Richmond, Vlrglnia 23261, or to the Company at its Pacific States Office, 55 tion. All arbitrable matters when the Amount of Insurance is $1,000,000 South Lake Avenue, Suite 600, Pasadena, CA 91101. IN WITNESS WHEREOF, the Company has caused this policy to be signed and sealed, to be valid when countersigned by an authorized officer or agent of the Company, all in accordance with its By -Laws. Attest: Z 1,�4— Secretary Countersigned by: `Auffiorizecl'Officer o Ag t' ,NSUNgy�N, LawyersTide Insurance Corporation s¢ �' By: 1 9 2 5 g i `�`NMONO N. - President POLICY OF TITLE INSURANCE A WORD OF THANKS... As we make your policy a part of our permanent records, we want to express our appreciation of this evidence of. your faith in Lawyers Title Insurance Corporation. There is no recurring premium. This policy provides valuable title protection and we suggest you keep it in a safe place where it will be readily available for future reference. If you have any questions about the protection provided by this policy, contact the office that issued your policy or you may write to: Consumer Affairs Department Lawyers"jidejnsurance Corporation P.O. Box 27567 Fi'rchm -id, 'Virginia 23261 L A W Y E R S T I T L E I N S U R A N C E C O R P O R A T I O N National Headquarters Richmond, Virginia A M E R I C A N L A N D T I T L E A S S O C I A T I O N L O A N P O L I C Y 1 9 9 2 Issued At: Continental Lawyers Title Company 18551 Von Karman, Suite 100, Irvine, California 92715 SCHEDULE A ------------------------------------------------------------------------------------------------ ORDER POLICY AMOUNT OF PREMIUM DATE OF POLICY NUMBER NUMBER INSURANCE ------------------------------------------------------------------------------------------------ 94-02205A 135-00-547-397 $35,000.00 $150.00 01/30/96 at 4:30 pm 1. NAME OF INSURED: The Redevelopment Agency of the City of Huntington Beach, a public body corporate and politic 2. THE ESTATE OR INTEREST IN THE LAND WHICH IS COVERED BY THE INSURED MORTGAGE IS: A CONDOMINIUM, as defined in Section 783 of the California Civil Code, in fee 3. TITLE TO THE ESTATE OR INTEREST IN THE LAND IS VESTED IN: Sean G. Heckethorn and Jacquelyn A. Heckethorn, husband and wife as joint tenants 4. THE INSURED MORTGAGE AND ASSIGNMENTS THEREOF, IF ANY, ARE DESCRIBED AS FOLLOWS: A Deed of Trust to secure an indebtedness in the amount shown below, and any other obligations secured thereby Amount: $35,000.00 Dated: January 8, 1996 Trustor: Sean G. Heckethorn and Jacquelyn A. Heckethorn Trustee: The City of Huntington Beach, a municipal corporation Beneficiary: The Redevelopment Agency of the City of Huntington Beach, a public body corporate and politic Recorded: January 30, 1996 Instrument No. 96-0044556 of Official Records A L T A L O A N P O L I C Y- 1 9 9 2 Policy No.:135-00-547-397 Order No.: 94-02205A SCHEDULE A CONTINUED S. THE LAND REFERRED TO IN THIS POLICY IS DESCRIBED AS FOLLOWS: A Condominium comprised of: PARCEL 1: An undivided one twenty second (1/22) fee simple interest as a tenant in common in and to all of the Common Area defined in Declaration referred to below and described in the Condominium Plan ("Plan") for Lot 1 of Tract No. 14828, which Plan was recorded on August 25, 1994 as Instrument No. 94-0525335 of Official Records of Orange County, over Lot 1 of Tract No. 14828, in the City of Huntington Beach, County of Orange, State of California, as per map filed in Book 706, Pages 27 to 29 of Miscellaneous Maps, in the office of the County Recorder of said County. Excepting therefrom all oil, petroleum, asphaltum, gas, minerals and other hydrocarbon substances, as reserved in deed recorded August 16, 1921 in Book 401, Page 356 of Deeds, and in various other deeds of record. PARCEL 2: Unit No. 5 consisting of certain airspace and surface elements, as shown and described in the Condominium Plan referred to in Parcel 1 above. PARCEL 3: Non-exclusive easements for access, ingress, egress, use, enjoyment, drainage, encroachment, support, maintenance, repairs and for other purposes, all as described in that certain Declaration of Covenants, Conditions and Restrictions and Reservation of Easements for Pacific Park Villas, recorded August 25, 1994 as Instrument No. 94-0525336 of Official Records. PARCEL 4: Exclusive easements appurtenant to Parcels 1 and 2 referred to above, for balcony or patio purposes, over the areas defined, depicted and assigned on the Plan. A L T A L O A N P O L I C Y- 1 9 9 2 POLICY NO.:135-00-547-397 ORDER NO.: 94-02205A SCHEDULE B PART I EXCEPTIONS FROM COVERAGE THIS POLICY DOES NOT INSURE AGAINST LOSS OR DAMAGE (AND THE COMPANY WILL NOT PAY COSTS, ATTORNEYS' FEES OR EXPENSES) WHICH ARISE BY REASON OF: A. Second installment property taxes, including general and special taxes, personal property taxes, if any, and any assessments collected with taxes, for the fiscal year 1995-1996. Amount: $1,064.63 Penalty (including cost): $None Exemption: None Code Area: 04-033 Assessment No.: 933-87-260 B. Supplemental or escaped assessments of property taxes, if any, assessed pursuant to the Revenue and Taxation Code, of the State of California. 1. The matters contained in a document entitled "Memorandum of Disposition and Development Agreement" recorded January 3, 1994 as Instrument No. 94-0001007 of Official Records. Reference is made to said document for full particulars. 2. The fact that the ownership of said land does not include rights of access to or from the street or highway abutting said land, such rights having been relinquished by the map of said Tract. Affects: Talbert Avenue; Joyful Lane and Happy Drive Except at street intersections and approved driveway locations. 3. Covenants, conditions and restrictions (deleting therefrom any restrictions based on race, color or creed) as set -forth in the document Recorded: February 24, 1994 Instrument No. 94-0137068 of Official Records Said covenants, conditions and restrictions provide that a violation thereof shall not defeat the lien of any mortgage or deed of trust made in good faith and for value. ORDER NO.: 94-02205A SCHEDULE B (PART I CONTINUED) 4. Matters in an Instrument which, among other things, contain or provide for Assessments, Liens and the subordination thereof, provisions relating to Partition, Restrictions on severability of Component Interests, Covenants, Conditions and Restrictions, a provision that no violation thereof and no enforcement of any Lien provided for herein shall defeat or render invalid the Lien of a Mortgage or Deed of Trust made in good faith and for value, but which however, do not contain Restrictions based on race, color or creed. Recorded: August 25, 1994 Instrument No. 94-0525336 of Official Records S. The matters contained in a document entitled "Common Facilities Use and Maintenance Agreement For Pacific Park Villas" recorded August 25, 1994 as Instrument No. 94-0525337 of Official Records. Reference is made to said document for full particulars. 6. An easement for the purpose shown below and rights incidental thereto as set forth in a document Granted to: Southern California Edison Company Purpose: Public utilities Recorded: October 27, 1994 Instrument No. 94-0632840 of Official Records Affects: the Southerly 50 feet of the Easterly 4 feet of Lot 1 7. A Deed of Trust to secure an indebtedness in the amount shown below, and any other obligations secured thereby Amount: $155,950.00 Dated: January 23, 1996 Trustor: Sean G. Heckethorn and Jacquelyn A. Heckethorn, husband and wife Trustee: Westwood Associates, a California corporation Beneficiary: Weyerhaeuser Mortgage Company Recorded: January 30, 1996 Instrument No. 96-0044555 of Official Records ORDER NO.: 94-02205A SCHEDULE B (PART I CONTINUED) ENDORSEMENTS The following endorsements are attached to and made a part of this policy: 100 110.9 115 116.2 tb Date typed: 02/05/96 Plats enclosed A L T A L O A N P O L I C Y- 1 9 9 2 POLICY NO.: 135-00-547-397 ORDER NO.: 94-02205A SCHEDULE B PART II IN ADDITION TO THE MATTERS SET FORTH IN PART I OF THIS SCHEDULE, THE TITLE TO THE ESTATE OR INTEREST IN THE LAND DESCRIBED OR REFERRED TO IN SCHEDULE A IS SUBJECT TO THE FOLLOWING MATTERS, IF ANY BE SHOWN, BUT THE COMPANY INSURES THAT THESE MATTERS ARE SUBORDINATE TO THE LIEN OR CHARGE OF THE INSURED MORTGAGE UPON THE ESTATE OR INTEREST: 8. Covenants, conditions and restrictions (deleting therefrom any restrictions based on race, color or creed) as set forth in the document Recorded: January 30, 1996 Instrument No. 96-0044557 of Official Records E N D O R S E M E N T LAWYERS TITLE INSURANCE CORPORATION CLTA FORM 100 Order No.: 94-02205A Attached to Policy No.: 135-00-547-397 The Company hereby insures against loss which said Insured shall sustain by reason of the following matters: 1. Any incorrectness in the assurance which the Company gives: a. That there are no covenants, conditions, or restrictions under which the lien of the mortgage referred to in Schedule A can be cut off, subordinated, or otherwise impaired; b. That there are no present violations on said land of any enforceable covenants, conditions, or restrictions; c. That, except as shown in Schedule B, there are no encroachments of buildings, structures, or improvements located on said land onto adjoining lands, nor any encroachments onto said land of buildings, structures, or improvements located on adjoining lands. 2. a. Any future violations on said land of any covenants, conditions, or re- strictions occurring prior to acquisition of title to the estate or interest referred to in Schedule A by the Insured provided such violations result in impairmemt or loss of the lien of the mortgage referred to in Schedule A, or result in impairment or loss of the title to the estate or interest referred to in Schedule A if the Insured shall acquire such title in satisfaction of the indebtedness secured by the insured mortgage; b. Unmarketability of the title to the estate or interest referred to in Schedule A by reason of any violations on said land, occurring prior to acquisition of title to estate or interest referred to in Schedule A by the insured, of any covenants, conditions or restrictions. 3. Damage to existing improvements, including lawns, shrubbery or trees: a. which are located or encroach upon that portion of the land subject to any easement shown in Schedule B, which damage results from the exercise of the right to use or maintain such easement for the purposes for which the same was granted or reserved. b. resulting from the exercise of any right to use the surface of said land for the extraction or development of the minerals excepted from the description of said land or shown as a reservation in Schedule B. 4. Any final court order or judgment requiring removal from any land adjoining the land of any encroachment shown in Schedule B. Wherever in this endorsement any or all the words "covenants, conditions, or restrictions" appear, they shall not be deemed to refer to or include the terms covenants and conditions contained in any lease referred to in Schedule A. For purposes of this endorsement, the words "covenants", "conditions" or "restrictions" shall not be deemed to refer to or include any covenants, conditions or restrictions relating to environmental protection, except to the extent that a notice of violation or alleged violataion affecting the land has been recorded in the public records at Date of Policy and is not excepted in Schedule B. This endorsement is made a part of the policy and is subject to all of the terms and provisions thereof and of any prior endorsements thereto. Except to the extent expressly stated, it neither modifies any of the terms and provisions of the policy and any prior endorsements; nor does it extend the effective date of the policy and any prior endorsements, nor does it increase the face amount thereof. IN WITNESS WHEREOF, the Company has caused this Endorsement to be signed, to be valid when countersigned by an authorized officer or agent of the Company, all in accordance with its By -Laws. Date: January 30, 1996 Issued at: Irvine, California Countersig d: Authorized Of icer or Agent LAWYERS TITLE INSURANCE CORPORATION Janet A. Alpert - President John M. Carter - Secretary E N D O R S E M E N T LAWYERS TITLE INSURANCE CORPORATION CLTA FORM 110.9 Attached to Policy No.: 135-00-547-397 Order No.: 94-02205A The insurance afforded by this endorsement is only effective if the land is used or is to be used primarily for residential purposes. The Company insures the insured against loss or damage sustained by reason of lack of priority of the lien of the insured mortgage over: (a) any environmental protection lien which, at Date of Policy is recorded in those records established under state statutes at Date of Policy for the purpose of imparting constructive notice of matters relating to real property to purchasers for value and without knowledge, or filed in the records of the clerk of the United States District Court for the district in which the land is located, except as set forth in Schedule B; or (b)_ any environmental protection lien provided for by any state statute in effect at Date of Policy, except environmental protection liens provided for in the following state statutes: NONE This endorsement is made a part of this policy and is subject to all of the terms and provisions thereof, and of any prior endorsements thereto. Except to the extent expressly stated, it neither modifies any of the terms and provisions.of the policy and any prior endorsements, nor does it extend the effective date of the policy and any prior endorsements, nor does it increase the face amount thereof. IN WITNESS WHEREOF, the. Company has caused this Endorsement to be signed, to be valid when countersigned by an authorized officer or agent of the Company, all in accordance with its By -Laws. LAWYERS TITLE INSURANCE CORPORATION Countersigned by: Janet A. Alpert - President John M. Carter - Secretary Issued at: Irvine, California E N D O R S E M E N T LAWYERS TITLE INSURANCE CORPORTION CLTA FORM 115 Attached to Policy No.: 135-00-547-397 The Company assures the Insured Order No.: 94-02205A The Redevelopment Agency of the City of Huntington Beach, a public body corporate and politic that the estate or interest described in Schedule A is a condominium as defined in Section 783 of the California Civil Code, in fee, and as such is entitled to be assessed and taxed as a separate parcel. The Company hereby insures said Assured against loss, which said Assured shall sustain in the event that the assurances made herein shall prove to be incorrect. The total liability of the Company under said policy and any endorsements therein shall not exceed, in the aggregate, the face amount of said Policy and costs which the Company is obligated under the conditions and stipulations thereof to pay. This endorsement is made a part of said policy and is subject to the schedules, condi- tions and stipulations contained therein, except as modified by the provisions hereof. IN WITNESS WHEREOF, the Company has cause this endorsement to be signed, to be valid when countersigned by an authorized officer or agent of the Company, all in accordance with its By -Laws. Countersigned by: LAWYERS TITLE INSURANCE CORPORATION r Janet A. Alpert - President �j John M. Carter - Secretary Issued at: Irvine, California E N D O R S E M E N T LAWYERS TITLE INSURANCE CORPORATION CLTA FORM 116.2 Attached to Policy No.: 135-00-547-397 Order No.: 94-02205A The Company assures the Insured that at the date of this Policy the dimensions of the exterior boundary of the Common Area referred to in Schedule A of this Policy which is also the exterior boundary of the project, are correctly shown on that map recorded in book 706, pages 27 to 29 of Maps in the office of the County Recorder of said County. The Company further assures the Insured that the estate in said land referred to in Schedule A includes a residence within the project boundaries, which residence is designated as Unit 5, as shown on the map recorded August 25, 1994 as Instrument No. 94-0525335, Official Records of Condominiums in the office of the County Recorder of said County, and known as: 7871 Happy Drive 4102 Huntington Beach, California The Company hereby insures the Insured against loss which said Insured shall sustain in the event that the assurance herein shall prove to be incorrect. The total liability of the Company under said policy and any endorsements therein shall not exceed, in the aggregate, the face amount of said Policy and costs which the Company is obligated under the conditions and stipulations thereof to pay. This endorsement is made a part of said policy and is subject to the schedules, condi- tions and stipulations therein contained. IN WITNESS WHEREOF, the Company has caused this endorsement to be signed, to be valid when countersigned by an authorized officer or agent of the Company, all in accordance with its By -Laws. Countersigned by: LAWYERS TITLE INSURANCE CORPORATION Janet A. Alpert - President �r John M. Carter - Secretary Issued at: Irvine, California M TRUCK ❑ FARMERS ❑ MID-CENTURY INSURANCE EXCHANGE INSURANCE EXCHANGE INSURANCE COMPANY CERTIFICATE OF INSURANCE (CONDOMINIUM AND TOWNHOUSE) The Company indicated above hereby certifies the insurance coverage is now in force and effect as follows: 1- UnnOwner 0 SEAN G. HECKETHORN AND JACQUELYN A. HECKETHORN, • HUSBAND AND WIFE, AS JOINT TENANTS Malling • 7871 HAPPY DRIVE, UNIT 102 Address • HUNTINGTON BEACH, CALIFORNIA 92648 Location (same as mailing address unless shown) 7871 HAPPY DRIVE, UNIT #102, HUNTINGTON BEACH, CA. 92648 NAMED Unit No. 102 INSURED • PACIFIC PARK VILLAS ASSOCIATION ADDRESS • C/O KEYSTONE PACIFIC PROPERTY MGMT • 4100 NEWPORT PLACE, #350 _97�Z_3. 150.58143 NEWPORT BEACH, CA 92660 Agent Policy Number EFFETIVE DATEOFFw� 12 / 15 / 94 TO lid UNTIL CANCELLED ❑ , / Amt. Of BUILDING Insurance $ 203550529 Coinsurance Amt. Of CONTENTS Insurance $ Coinsurance Amt. Of OTHER EQUIP, Insurance $ Coinsurance 1 0 0 % $ 140 0 Deductible % $ Deductible % $ Deductible Perils Insured Against nX Basic Form Broad Form [jd Special Form ❑ Sprinkler Leakage ❑ Earthquake ❑ Fidelity Bond nX Guaranteed Replacement Cost (See Endorsement for Details) This certificate is furnished simply as evidence of said policy as it stands at the date of issue hereof, and is given as matter of information only and, except as specified herein, this certificate confers no rights on the holder and imposes no liability on the Company. Any loss under coverages listed above, is payable as interest may appear to the named insured and the person or organization to whom this certificate is issued. THIS IS NOT A CONTRACT OF INSURANCE BUT ATTESTS THAT A POLICY, AS IDENTIFIED ABOVE, HAS BEEN ISSUED. THE ORIGINAL POLICY IS DEPOSITED WITH THE BOARD OF_MANAGERS AND MAY BE EXAMINED BY THE UNIT -OWNER UPON REQUEST. Issued Date 01 /24 / 96 MORTGAGEE • WEYERHAEUSER MORTGAGE COMPANY • ITS SUCCESSORS AND ASSIGNS, A/T/I/M/A • P. 0. BOX 54089, LOS ANGELES, CA.90054-0089 ATTN: HAZARD INSURANCE DEPT. LOAN #497021 MORTGAGEE CITY OF HUNTINGTON BEACH 2000 MAIN STREET HUNTINGTON BEACH, CALIFORNIA 92648 LABARRE/OKSNEE INSURANCE AGENCY 95 Argonaut, Suite 110 Allso Vlelo, CA 92656 ,�ft (714) 588-0711 Countersigned "r- #497021 Loan No. Loan No. ._- r. w' rI I 01 /24 /96 ep4sentww Dete 4M LENDERS LOSS PAYABLE ENDORSEMENT Form /388FU NS (Rev May 1, 19/2)X 1. Lose or damage, if any, under this policy, shall be paid to the Payee named on the first page of this policy, its successors and assigns, hereinafter referred to as 'the Lender', in whatever form or capacity its interest may appear and whether said interest be vested in said Lender in its individual or in its disclosed or undisclosed fiduciary or representative capacity, or otherwise, or vested in a nominee or trustee of said Lender. 2. The insurance under this policy or any rider or endorsement attached thereto as to the interest only of the Lender, its suc- cessors and assigns, shall not be invalidated or suspendedi (a)by any error, omission, or change respecting the ownership, descript- ion, possession, or location of the subject of insurance or the interest therein or the title thereto; (b)by the commencement of for closure proceedings or the giving of notice of sale of any of the property covered by this policy by virture of any mortgage or trust deed; (c)by any breach of warranty, act, omission neglect or non-compliance with any of the provisions of this policy, includ- ing any and all riders now or hereafter attached thereto by the named insured, the borrower, mortgagor, truster, vendee, owner, ten- ant, warehouseman, custodian, occupant or by the agents of either or any of them or by the happening of any event permitted by them or their agents or which they failed to prevent, whether occurring before or after the attachement of this endorsement or whether be fore or after a loss, which under the provisions of this policy of insurance or of any rider. or endorsement attached thereto would invalidate or suspend the insurance as to the named insured excluding hereform, however, any acts or emission of the Lender while exercising active control and management of the property. 3. In the avant of failure of the insured to pay any premium or additional premium which shall be or become due under the terms of this policy or on account of any change in occupancy or increase in hazard not permitted by this policy, thin Company agrees to give written notice to the Lender of ouch non-payment of premium after sixty (60) days from and within one hundred and twenty (120) days after due date of ouch premium, and it is a condition of the continuance of the rights of the Lender hereunder that the Lender when so notified in writing by this Company of the failure of the insured to pay such premium shall pay or cause to be paid the pre- mium due within ten (10) days following receipt of the Company's demand in writing therefor. If the Lender shall decline to pay said premium or additional premium, the rights of the Lender under this Lender's Loss Payable Endorsement shall not be terminated before ten (10) days after receipt of said written notice by the Lender. /. Whenever this Company shall pay to the Lender any sum for loss or damage under this policy and shall claim that as to the in sured no liability therefore exists, this Company at its option may pay to the lender the whole principal sum and interest and other indebtedness due or to become due from the insured whether secured or unsecured, (with refund of all interest not accured), and this Company, to the extent of such payment, shall thereupon receive a full assignment and transfer without recourse of the debt and all legal rights and securities held as collateral thereto. S. If there be any other insurance upon the within described property, the Company shall be liable under this policy no to the Lender for the proportion of such loss or damage that the sum hereby insured bears to the entire insurance of similar character on said property under policies held by, payable to and expressly consented to by the Lender. Any Contribution Clause included in any Fallen Building Clause waiver or any Extended Coverage Endorsement attached to this contract of insurance is hereby nullified, and also any Contribution Clause in any other endorsement or rider attached to this contract of insurance hereby nullified except Contri button Clauses for the compliance with which the insured has received reduction in the rate charged or has received extension of the coverage to include hazards other than fire and compliance with such Contribution Clause is made a part of the consideration for issuing such other hazards. The Lender upon the payment to it of the full amount of its claim, will subrogate this Company (pro rats with all other insurers contributing to said payment) to all of the Lender's rights of contribution under said other insurance. 6. This Company reserves the right to cancel this policy at any time, as provided by its terms, but in such case thin policy shall continue in force for the benefit of the Lender for ten (10) days after written notice of such cancellation is received by the Lender and shall then couse. 7. This policy shall remain in full force and effect as to the interest of the Lender for a period of ten (10) days after its expiration unleno an acceptable policy in renewal thereof with loss thereunder payable to the Lender in accordance with the terms of this Lender's Loss Payable Endorsement, shall have been issued by some insurance company and accepted by the Lender. 8. Should legal title to and beneficial ownership of any of the property covered under this policy become vested in the Lender or its agents, insurance under this policy shall continue for the term thereof for the benefit of the Lender but, in such event, any privileges granted by this Lender'■ Lose Payable Endorsement which are not also granted the insured under the terms and conditions of this policy and/or under other riders or endorsements attached thereto shall not apply to the insurance hereunder as respects ouch property. 9. All notices herein provided to be given by the Company to the Lender in connection with this policy and this Lender's Loss Payable Endorsement shall be mailed to or delivered to the Lender at its office or branch described on the first page of the policy. Approved Board of Fire Underwriters of the Pacific, California Bankers' Association Committee on Insurance aaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaa a aaaaaaaaaaaaa u 19093 Beach Boulevard © Huntington Beach, CA 92648 m (714) 843-0101 • FAX (714) 843-9949 City of Huntington Beach Attention: Evelyn 2000 Main Street, 2nd Floor Huntington Beach, Ca. 92648 Date: February 14, 1996 Escrow No.: 8791-C Property Address: 7871 Happy Drive, #102, Huntington Beach, Ca 92648 In connection with the above -numbered escrow, we are enclosing herewith the following: original Loan Agreement, Exhibit(s) B, C, D, E, F, G, H _ Lending Instructions acknowledged by Escrow officer = - -•- Copy of Preliminary Title Report & ALTA Title Policy Certified copy of Buyer and Sellers signed Amendment(s) Certified copy of Buyer and Sellers signed Escrow Instr. Certified copy of Buyer and Sellers Closing Statement(s) Please contact the undersigned, should need anything further. If you should have any questions regarding the above, please do not hesitate to contact the undersigned. Thank you for your cooperation in this matter. Sinc ' ly, Linda J. C pbell Escrow officer REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH LENDING INSTRUCTIONS TO: Tiempo Escrow 19093 Beach Blvd. Huntington Beach, CA 92648 RE: Your Escrow No. 8791-C Preliminary Recitals 1. Sean G. Heckethorn and Jacquelyn A. Heckethorn (hereinafter sometimes referred to as "Buyer") has applied to Redevelopment Agency of the City of Huntington Beach (hereinafter sometimes referred to as "Agency" or "Lender") for a loan of $35,000 to finance the purchase of certain real property known as and located at 7871 Happy Drive #102, Huntington Beach, California 92648, which property is hereinafter sometimes referred to as the "Subject Real Property." Lender has been advised that Buyer has opened the above -referenced escrow with you for the purpose of completing the purchase of the Subject Real Property. In order to secure performance or fulfillment of the terms and conditions of the loan for which Buyer has applied, and to facilitate the making of the loan if appropriate, Lender, reserving the right to amend or revoke these instructions, unilaterally and without prior notice, at any time, hereby authorizes and Instructs you as follows: Deposit Clause 2. Lender had enclosed herewith the following: (a) A loan agreement providing the terms and conditions by which the Borrower may participate in the Lender's program to assist low or moderate income households to purchase housing which includes an equity sharing provision; (b) A promissory note providing for the repayment of the principal amount of $35,000 plus accrued interest on the unpaid balance thereof at the rate of 5 percent (5%) per annum, due upon the thirtieth anniversary of the Loan, or earlier according to the terms and conditions of the note; (c) A second deed of trust, with a rider, conveying the Subject Real Property to City of Huntington Beach in trust for the purpose of securing performance of the obligations evidenced by the above -described promissory note and certain other obligations, to be executed by Buyer for the benefit of Lender; (d) A "Declaration of Conditions, Covenants and Restrictions for Property," in which Buyer agrees that the Subject Real Property shall only be owned by Buyer or other persons or families of low or moderate income available at an affordable housing cost, as those terms are SF\s:G:Agree: Heckethorn:EscrowIns defined in California Health & Safety Code Sections 5093 and 50052.5, and that Buyer shall not discriminate against any person or group of persons on the basis of race, color, religion, sex, marital status, national origin or ancestry. Such covenants shall run with the land, in favor of the Lender and the City of Huntington Beach; (e) The disclosure statement setting forth the conditions upon which the Lender will make the Loan; (0 The notice of the Buyer's right to rescind required by the Truth -in -Lending Act; (g) An expiration of rescission period form verifying the delivery of the notice of right to rescind; and (h) The Certificate of Proposed Disclosure, which must be signed by the Buyer, delivered to the current owner for his signature, and when fully executed, copies are to be delivered to Lender, Buyer, and owner. Execution of Loan Instruments and Documents 3. When you have received these instructions, please have Buyer execute immediately all loan instruments and documents that have been deposited with you for execution by Buyer. All of the loan instruments and documents that have been deposited with you for execution by Buyer are to be executed by Buyer on the same date. Buyer must execute all loan instruments and documents that they are required to execute by signing his/her/their name(s) exactly as it appears or will appear on the grant deed that will vest title in Buyer and on the enclosed deed of trust. Insurance Requirements 4. We require, as a condition of making the loan, that you hold for delivery to us an original policy of insurance, duly issued and in effect, providing fire and extended special coverage insurance on the Subject Real Property in an amount not less than $ 6,000.00 and complying with the following requirements: (a) The policy shall be issued by an insurer that is admitted to transact insurance business in California; (b) The policy shall either be a continuous policy or a policy with an unexpired term of at least one year, and the premium for the initial one year, following the making of the loan must have been paid; (c) The policy shall.name Buyer as an insured and shall contain a lender's loss payable endorsement naming Lender as the second loss payee; 2 SF\s:G:Agree: Heckethom:EscrowIns (d) The policy shall not have a deductible that exceeds $500. Requirement of Cash Downpayment 5. We require, as a condition of making the loan, that 3% of the purchase price of the Subject Real Property be paid by Buyer, in cash or its equivalent, from Buyer's own funds. Compliance With Truth -In -Lending Requirements 6. We require, as a condition of making the loan, that prior to the disbursement of any loan proceeds you effect compliance with the disclosure and notice requirements imposed by the Federal Truth -in -Lending Act and allow the three-day recission period required by the Truth - in -Lending Act to expire. You shall not request or disburse any loan proceeds unless and until you have complied with each of the following conditions: (a) You shall deliver one copy of the enclosed Disclosure Statement to Buyer at the time Buyer executes the enclosed promissory note, deed of trust and the other enclosed loan documents; (b) At the time a copy of the Disclosure Statement is delivered to Buyer, you shall have Buyer sign another copy of the Right to Rescind Statement, in the space provided for that purpose, to acknowledge receipt of the statement; (c) As soon as Buyer has executed the enclosed loan instruments and documents and you have delivered the copies of the Disclosure Statement and Notice of Right to Rescind and had Buyer acknowledge receipt of the statement, you shall deliver to us the copy of the Disclosure Statement and Notice of Right to Rescind and had Buyer acknowledge receipt of the statement, you shall deliver to us the copy of the Disclosure Statement that Buyer has signed and the copy of the Notice of Right to Rescind that you have retained; and (d) You shall not request or disburse the loan proceeds, or any part of them, until the fourth business day after the date on which the Disclosure Statement is delivered to Buyer or the fourth business day after the date on which the Notice of Right to Rescind is delivered to Buyer, whichever is later. Conditions Precedent to Request for Loan Funds 7. You may request us to deposit the proceeds of the loan with you when, and only when: (a) Buyer has properly executed the enclosed loan agreement promissory note without modification or deletion and you have delivered the original of the executed loan agreement to us; 3 SF\s:G:Agree: Heckethorn:EscrowIns (b) Buyer has properly executed the enclosed promissory note without modification or deletion and you have delivered the original of the executed loan agreement promissory note to us; (c) Buyer has properly executed the enclosed deed of trust without modification or deletion and it is in recordable form; (d) Buyer has properly executed the enclosed Declaration of Condition, Covenants, and Restrictions without modification or deletion and it is in recordable form; (e) You have delivered a true and complete copy of the executed deed of trust and Declaration of Conditions, Covenants and Restrictions to us and are authorized and prepared to record the original deed of trust when you receive and are authorized and prepared to disburse the loan proceeds; (f) You have delivered to us true and complete copies of all of the escrow instructions that you have received from Buyer and the other parties to the above escrow, including any amendments or supplemental instructions, and any assignments or demands that have been deposited with or delivered to you in connection with the escrow; (g) You have delivered to us a coy of the preliminary title report obtained for this transaction; (h) Continental Lawyers Title Company is prepared and obligated to issue in our favor, on the recordation of the enclosed deed of trust, a standard form American Land Title Association lender's policy in the amount of $35,000, insuring that title to the Subject Real Property is vested in Buyer and that the enclosed deed of trust is an encumbrance against the Subject Real Property that is subject and subordinate only to First Deed of Trust; (i) You have delivered to us a written confirmation verifying the commitment of Continental Lawyers Title Company to issue the policy of title insurance required by these instructions on the recordation of the enclosed deed of trust; 0) You have received in escrow, and are authorized and prepared to deliver to us on recordation of the enclosed deed of trust, an original policy of fire and extended special coverage insurance complying with the requirements set forth in � 4; (k) Buyer has deposited in escrow, to be applied toward payment of the purchase price for the Subject Real Property, the sum of $6,000.00 and has otherwise complied with the downpayment requirements set forth in ¶ 5; 4 SF\s:G:Agree: Heckethom:EscrowIns (1) You have delivered to us a true and complete copy of a written certification from a licensed structural pest control operator pursuant to Business and Professions Code Section 8519 that the residence and other improvements located on the Subject Real Property are free from evidence of active infestation or infection in the visible and accessible areas; (m) You have delivered to Buyer, in accordance with the requirements set forth in ¶ 6, one copy of the enclosed Disclosure Statement and two copies of the enclosed Notice of Right to Rescind; (n) More than three full business days have elapsed since the date on which the Disclosure Statement was delivered to Buyer, and more than three full business days have elapsed since the date on which the Notice of Right to Rescind were delivered to Buyer; (n) You are otherwise authorized and prepared, under the instructions you have received from all parties, to close the above -referenced escrow within 24 hours after the loan proceeds are deposited with you. Recording of Deed of Trust 8. When all of the conditions precedent to requesting the deposit of the loan proceeds, as set forth in ¶ 7, have been performed or fulfilled and the loan proceeds have been deposited with you pursuant to your request, you are authorized and instructed to record forthwith the grant deed conveying the Subject Real Property to Buyer, our enclosed deed of trust, our enclosed Declaration of Conditions, Covenants, and Restrictions and to close the above -referenced escrow. You are instructed to record our enclosed deed of trust and Declaration of Conditions, Covenants, and Restrictions immediately after you record the grant deed conveying the Subject Real Property to Buyer. Issuance of Title Insurance Policy 9. As soon as you have recorded our enclosed deed of trust and Declaration of Conditions, Covenants, and Restrictions, you are instructed to cause to issue and to deliver to us a standard form American Land Title Association lender's title insurance policy in the amount of $35,000, insuring that title to the Subject Real Property is vested in Buyer and that the enclosed deed of trust and Declaration of Conditions, Covenants, and Restrictions are encumbrances against the Subject Real Property that is subject to and subordinate only to the First Trust Deed. Conditions Precedent to Disbursement of Loan Proceeds 10. You are authorized to disburse the loan proceeds that we deposit with you when, and only when: (a) All of the conditions precedent to requesting the deposit of the loan proceeds, as set forth in ¶ 7, have been performed or fulfilled. 5 SF\s:G:Agree: Heckethom:EscrowIns (b) You have recorded the grant deed conveying the Subject Real Property to Buyer, the enclosed deed of trust and Declaration of Conditions, Covenants, and Restrictions; and (c) You have caused to issue and deliver a standard form American Land Title Association lender's title insurance policy that complies with the title insurance requirements set from in ¶ 7(h). Requests and Notices 11. The request for the loan proceeds and all other requests and notices directed to Lender shall be in writing and shall be personally delivered or sent by certified or registered mail, postage prepared, return receipt requested to Redevelopment Agency of the City of Huntington Beach, Attn: Agency Clerk, 2000 Main Street, Huntington Beach, CA 92648. Requests shall be deemed to have been made and notices shall be deemed to have been given only when they have been received by the City Clerk. . Delivery of Instruments and Documents 12. All instruments and documents that are to be delivered to Lender shall be personally delivered or sent by certified or registered mail, postage prepaid, return receipt requested to Agency Clerk, Redevelopment Agency of the City of Huntington Beach, 2000 Main Street, Huntington Beach, CA 92648. Instruments and documents shall be deemed to have been delivered only when they have been received by the Agency Clerk. Nonresponsibility for Escrow Fees and Charges 13. Lender shall have no responsibility or liability for any of your escrow fees or charges or for any fees, charges, costs, or expenses incurred by you or any other party to the above -referenced escrow in complying with these instructions, obtaining the loan for which Buyer has applied, or otherwise processing or closing the above -referenced escrow. Sole Instructions 14. These instructions constitute the complete escrow instructions, and the only escrow instructions, of Lender and shall revoke and supersede any prior oral or written instructions you may have received from Lender. Waiver and Deviations from Instructions 15. Lender may waive, or may permit deviations from, any term or condition of these instructions. However, a term or condition of these instructions can only be waived by means of a written waiver signed by an authorized officer, agent, or employee of Lender. Deviation from these instructions will only be permitted if it is specifically authorized in writing by an authorized officer, agent, or employee of Lender. Any purported oral waiver, and any purported oral authorization to deviate from the terms of these instructions, shall be ineffective and invalid. 6 SF1s:G:Agree: Heckethom:EscrowIns Amendments and Supplemental Instructions 16. Lender shall have the right to amend or supplement these instructions at any time without prior notice and without the agreement or consent of any other party or parties. However, these instructions may only be amended, supplemented, or modified by means of a written amendment or supplement that has either been signed or approved in writing by an authorized officer, agent, or employee of Lender. No written amendment, supplement, or modification of these instructions shall be effective or valid unless and until it has been deposited with you and unless and until an authorized officer, agent, or employee of Lender has either signed it or approved it in a signed writing that has been deposited with you. Any purported oral amendment, supplement, or modification of these instructions shall be ineffective and invalid. Revocation and Cancellation of Instructions 17. (a) Lender shall have the right to revoke and cancel these instructions at any time without prior notice and without the agreement or consent of any other party or parties. If Lender exercises its right to revoke and cancel these instructions, you shall return to Lender forthwith, upon demand, any and all funds, instruments, documents, and other items that Lender has deposited with you. (b) If the above -referenced escrow is canceled by any other party or parties, you shall return to Lender forthwith any and all funds, instruments, documents, and other items that Lender has deposited with you. Time Is of the Essence 18. Time is of the essence with respect to each and every provision of these instructions and in the performance, occurrence, fulfillment, or satisfaction of each and every term and condition of this escrow and these instructions. 7 SF,s:G:Agree: Heckethom:EscrowIns Request for Acknowledgment of Acceptance 19. Please acknowledge your receipt and acceptance of these instructions, and your agreement to hold and dispose of any funds, instruments, documents, or items that Lender deposits with you in accordance with the terms and conditions of these instructions, by signing the acknowledgment and acceptance set forth below on the enclosed copies and returning one signed copy to Lender. Dated: LENDE,Rr A44 C. - tv David Biggs Economic Development Director Redevelopment Agency of the City of Huntington Beach Acknowledgment and Acceptance by Escrow Holder Tiempo Escrow acknowledges receipt of the foregoing instructions and the items listed in Paragraph 2 of those instructions. Tiempo Escrow agrees that any funds, instruments, documents, or other items deposited by the Redevelopment Agency of the City of Huntington Beach shall be held and disposed of in accordance with the terms and conditions of the foregoing instructions and such amendments or additional instructions as may be submitted by the Redevelopment Agency of the City of Huntington Beach. ESCROW HOLDER Ties ; o;Escrow By lf -[signature] LINDA J CAMPBELL [typed name] ESCROW OFFICER [title] 8 SF\s:G:SF Misc:LendInst RLS 96-017 CITY OF HUNTINGTON BEACH "• INTER -DEPARTMENT COMMUNICATION HUNTINGTON BEACH TO: David Biggs, Director of Economic Development FROM: Gail Button, City Attorney DATE: January 26, 1996 SUBJECT: Instructions to escrow company in connection with downpayment assistance program RLS 96-017 Attached please find the letter of instructions to the escrow company in connection with the downpayment assistance program. When forwarding this letter to the escrow company, all loan documents should be attached. In addition, please note that the following provisions need to be completed: 1. The name of the buyer and the address of the property need to be completed at paragraph 1. 2. The amount of the homeowner's insurance policy needs to be added at paragraph 4. This amount is normally the value of the structure, not the purchase price of the home. If you have an appraisal, the value of the structure would be indicated in the appraisal. 3. The name of the title insurance company needs to be inserted at paragraph 7(h) and (i), and the amount of the loan needs to be inserted at paragraph 7(k). -F-a v Gail Hutton City Attorney Attachments G:escrowin IIIIIIIIIIII11111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111191111111111111111111111 19093 Beach Boulevard • Huntington Beach, CA 92648 ® (714) 843-0101 • FAX (714) 843-9949 -- BUYER/BORROWER CLOSING STATEMENT -- SETTLEMENT DATE: 01/30/96 TIEMPO ESCROW, INC. Escrow Statement of 19093 BEACH, BLVD. Sean G. Heckethorn HUNTINGTON BEACH, CA 92648 Jacquelyn A. Heckethorn Escrow officer: Linda J. Campbell 7912 Beachpoint Circle, #3 Escrow Number: 8791-C Huntington Beach, Ca. 92648 Property Address: 7871 Happy Drive, #102 Huntington Beach, Ca 92648 ---------------------------------------------------------------------------------------------- DEBIT CREDIT ---------------------------------------------------------------------------------------------- Consideration 196,900.00 Deposit or Earnest Money 7,644.00 2nd T.D. City Loan 35,000.00 PRORATES & ADJUSTMENTS: Assessment $ 145.12 Per/Mon from 01/30/96 to 02/01/96 4.84 County Tax $ 1,064.63 Per/Half from 01/01/96 to 01/30/96 171.39 Non -recurring costs 3,000.00 NEWT LOAN (S) : New'Loan Amount - 155,900.00 Loan Orig Fee 779.50 Appraisal Fee Parkview Mortgage 300.00 credit Report Parkview Mortgage 55.00 Tax Service Fee Transamerica 80.00 underwriting/Doc. Fees Weyerhaeuser Mortgage Company 620.00 Processing Fee Parkview Mortgage 375.00 Flood Determination Fee Pinnacle Data Corporation 30.00 Wire Transfer Fee Weyerhaeuser Mortgage 75.00 Yield Spread Premium to Broker Parkview Mortgage 1,559.00(poc) Interest $ 30.97 Per/Day from 01/29/96 to 02/01/96 61.94 Mortgage Ins 1 Mths to Weyerhaeuser 41.57 Mortgage Insurance 2 Mths @ $ 41.57 83.14 EXISTING LOANS: COSTS, CHARGES & OTHER DISBURSEMENTS: Loan Tie In Fee Tiempo Escrow, Inc. 125.00 Messenger Fees Tiempo Escrow, Inc. 35.00 Notary fees Tiempo Escrow, Inc. 20.00 02/01/96 HOA Dues Pacific Park villas 145.12 Capital Contribution Keystone Pacific Property 386.38 ESCROW FEES & CHARGES: Settlement/closing fee 534.00 TITLE FEES & CHARGES: Title insurance 508.00 Sub Title Fee 95.00 8.1 Lender Endorsement 25.00 Recording fees 75.00 Balance: (Check Enclosed Herewith) 360.90 TOTAL DEBITS: 201,715.39 TOTAL CREDITS: 201,715.39 (�ER FIF IED TO BE A TRUE AND EXACT c0l'Y OF THE ORIGINAL HEREOF. ill Si S(�1 W, INC. f v 11111111111111_IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIillllllliillllilliliillllllllll 19093 Beach Boulevard • Huntington Beach, CA 92648 • (714) 843-0101 • FAX (714) 843-9949 SELLER/LENDER CLOSING STATEMENT -- SETTLEMENT DATE: 01/30/96 TIEMPO ESCROW, INC. Escrow Statement of: 19093 BEACH, BLVD. sassounian Capital Venture HUNTINGTON BEACH, CA 92648 Escrow officer: Linda J. Campbell 16473 Bolsa Chica Street Escrow Number: 8791-C Huntington Beach, Ca 92649 Property Address: 7871 Happy Drive, #102 Huntington Beach, Ca 92648 --------------------------------------------------------------------------------------------- DEBIT CREDIT --------------------------------------------------------------------------------------------- Consideration 196,900.00 PRORATES & ADJUSTMENTS: Assessments $ 145.12 Per/Mon from 01/30/96 to 02/01/96 4.84 County Taxes $ 1,064.63 Per/Half from 01/01/96 to 01/30/96 171.39 Non -recurring costs 3,000.00 COMMISSION(S): Commission Ultimate New Home Sales 1,722.88 COSTS, CHARGES & OTHER DISBURSEMENTS: Notary fees Tiempo Escrow, Inc. 10.00 HOA Set Up Fee Keystone Pacific Property 45.00 ESCROW FEES & CHARGES: TITLE FEES & CHARGES: Title insurance 404.70 Wire Fee 25.00 City/County tax stamps 216.70 1994 Supplement Taxes 425.60 Balance: (Check Enclosed Herewith) 190,883.57 TOTAL DEBITS: 196,904.84 TOTAL CREDITS: CERTIFIED TO BE A TRUE AND EXACT ;C`�JY OF THE ORIGINAL HEREOF. I =100 O OW, INC. 196,904.84 Illlllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllillllllllllllllllllllllllllllllllllllllllllllllllllllllllllilll 19093 Beach Boulevard ® Huntington Beach, CA 92648 • (714) 843-0101 ® FAX (714) 843-9949 ESCROW NO. 8791-C DATE: January 18, 1996 ESCROW OFFICER: Linda J. Campbell PROPERTY ADDRESS: 7871 Happy Drive, #102, Huntington Beach, Ca 92647 ABMMMENT TO INSTRUCTIONS Previous instructions given you and contained in your above indicated escrow are hereby amended in the following particulars only: The parties hereto agree that paragraph (J) shown on Page #3 of the original escrow instructions is hereby amended to read as follows: (J) You are authorized and instructed to debit Sellers account and credit Buyers account with the sum of $3,000.00, at the close of escrow. said funds represent a credit towards Buyer's non -recurring closing costs. All other terms and conditions remain the same. Each of the undersigned states that he has read the foregoing amended instructions and agrees to them. The undersigned acknowledges receipt of a copy of these amended instructions. 's Sesf �. Heckethorn � ;! - `L.-�"� Get �� -�—� `' ` ✓ J' auelvn A. Heckethorn IIIIIIIIIAI1I11111111111111111111111111111111111111111111111111{1111111111111111111111111111111111111111111111111111111111111111111111111111111111111 19093 Beach Boulevard ® Huntington Beach, CA 92648 • (714) 843-0101 • FAX (714) 843-9949 ESCROW NO. 8791-C DATE: January 24, 1996 ESCROW OFFICER: Linda J. Campbell PROPERTY ADDRESS: 7871 Happy Drive, #102, Huntington Beach, Ca 92648 AMENDMENT TO INSTRUCTIONS Previous instructions given you and contained in your above indicated escrow are hereby amended in the following particulars only: It is acknowledged that Buyers new first trust deed loan has been approved, through Weyerhaeuser Mortgage Company, in the amount of $155,900.00, bearing interest at the rate of 7.25% per annum and amortized over 30 years. It is further acknowledged that Buyers new 2nd Trust Deed Loan, shall be in favor of the City of Huntington Beach, in the amount,of $35,000.00, bearing interest at the rate of 5.00% per annum, due in Thirty (30) years. Each of the undersigned states that he has read the foregoing amended instructions and agrees to them. The undersigned acknowledges receipt of a copy of these amended instructions. Buye s Sig atu e Sean G. Heckethorn Signature kh� cquely A. H ckethorn CITY OF HUNTINGTON BEACH 2000 MAIN STREET OFFICE OF THE CITY CLERK CONNIE BROCKWAY CITY CLERK January 23, 1996 Linda Campbell Tiempo Escrow, Inc. 19093 Beach Boulevard Huntington Beach , eg ��&qz Re: Escrow No. 8791-C CALIFORNIA 92648 Enclosed please find escrow documents related to Down Payment Assistance Program loan for Sean & Jacquelyn Heckethorn, property location 7871 Happy Drive, #102. Please make certain all blanks in documents are filled in before executing same. Please return documentation to City Clerk, City of Huntington Beach, 2000 Main Street, Huntington Beach, CA 92648. Connie Brockway, CIVIC City Clerk Evelyn Schubert, CIVIC Deputy City Clerk Enclosures 1 Received � Dated %";?"G� 1 Tele phon e: 714-536.5227 ) Office of the Director Housing Redevelopment Fax February 28, 1996 City ®f Huntington Beach 2000 MAIN STREET CALIFORNIA 92648 DEPARTMENT OF ECONOMIC DEVELOPMENT 536-5582 536-5542 536-5582 (714) 375-5087 Tiempo Escrow 19093 Beach Blvd. Huntington Beach, Ca 92648 Attn.: Linda J. Campbell, Escrow Officer SUBJECT: Escrow No. 8791-C Dear Ms. Campbell: am writing to you with regards about Exhibit H (Certificate of Proposed Transferee) of the above referenced escrow. Please complete the dollar amount under section 3(b). Information was faxed to you on January 25, 1996 from Stephen Kohler concerning the completion of this amount (see attached). I am sending you the original Exhibit H. Please complete and return to the City of Huntington Beach as soon as possible. It is very important that all blanks have the correct information inserted at escrow, so as not to create problems in the future. This will also pertain to all future City of Huntington Beach escrows. If you have any questions, you can contact me at (714) 536-5901. Sincerely, aniel ruening ` Housing Rehab Manag xc: Stephen Kohler, Project Manager's� v6onnie Brockway, City Clerk DEB:ee C& GUeiteffiempo.doc DRUG'S_ E_.> ISU. - ' .' .AB - 7- L4aiwyersTitle jnsurance Crooration NATIONAL HEADQUARTERS 1992 . ,LTA '..: `` aj RICHMOND, VIRGINIA Loan Policy �� UN'30 Loan Policy. Number 135-01- 2 0 5 -114 SUBJECT TO THE EXCLUSIONS FROM COVERAGE, THE EXCEPTIONS FROM COVERAGE CONTAINED IN SCHEDULE B AND THE CONDITIONS AND STIPULATIONS, LAWYERS TITLE INSURANCE CORPORATION, a Virginia corporation, herein called the Company, insures, as of Date of Policy shown in Schedule A, against loss or damage, not exceeding the Amount of Insurance stated in Schedule A, sustained or incurred by the insured by. reason of: 1. Title to the estate or interest described in Schedule A being vested other than as stated therein; 2. Any defect in or lien or encumbrance on the title; 3. Unmarketability of the title; 4. Lack of a right of access to and from the land; 5. The invalidity or unenforceability of the lien of the insured mortgage upon the title; 6. The priority of any lien or encumbrance over the lien of the insured mortgage; 7. Lack of priority of the lien of the insured mortgage over any statutory lien for services, labor or material: (a) arising from an improvement or work related to the land which is contracted for or commenced prior to Date of Policy; or (b) arising from an improvement or work related to the land which is contracted for or commenced subsequent to Date of Policy and which is financed in whole or in part by proceeds of the indebtedness secured by the insured mortgage which at Date of Policy the insured has advanced or is obligated to advance; 8. The invalidity or unenforceability of any assignment of the insured mortgage, provided the assignment is shown in Schedule A, or the failure of the assignment shown in Schedule A to vest title'to the insured mortgage in the named insured assignee free and clear of all liens. The Company will also pay the costs, attorneys' fees and expenses incurred in defense of the title or the lien of the insured mortgage as insured, but only to the extent provided in the Conditions and Stipulations. EXCLUSIONS FROM COVERAGE The following matters are expressly excluded from the coverage of this policy and the Company will not pay loss or damage, costs, attorneys' fees or expenses which arise by reason of: 1. (a) Any law, ordinance or governmental regulation (including but not limited to building and zoning laws, ordinances or regulations) restricting, regulating, prohibiting or relating to (i) the occupancy, use or enjoyment of the land; (ii) the character, dimensions or location of any improvement now or hereafter erected on the land; (iii) a separation in ownership or a change in the dimensions or area of the land or any parcel of which the land is or was a part; or (iv) environmentalprotection, or the effect of any violation of these laws, ordinances or governmental regulations, except to the extent that a notice of the enforcement thereof or a notice of a defect, lien or encumbrance resulting from a violation or alleged violation affecting the land has been recorded in the public records at Date of Policy. (b) Any governmental police power not excluded by (a) above, except to the extent that a notice of the exercise thereof or a notice of a defect, lien or encumbrance resulting from a violation or alleged violation affecting the land has been recorded in the public records at Date of Policy. 2. Rights of eminent domain unless notice of the exercise thereof has been recorded in the public records at Date of Policy, but not excluding from coverage any taking which has occurred prior to Date of Policy which would be binding on the rights of a purchaser for value without knowledge. 3. Defects, liens, encumbrances, adverse claims or other matters: (a) created, suffered, assumed or agreed to by the insured claimant; (b) not known to the Company, not recorded in the public records at Date of Policy, but known to the insured claimant and not disclosed in writing to the Company by the insured claimant prior to the date the insured claimant became an insured under this policy; (c) resulting in no loss or damage to the insured claimant; (d) attaching or created subsequent to Date of Policy (except to the extent that this policy insures the priority of the lien of the insured mortgage over any statutory lien for services, labor or material); or (e) resulting in loss or damage which would not have been sustained if the insured claimant had paid value for�the insured mortgage. 4. Unenforceability of the lien of the insured mortgage because of the inability or failure of the insured at Date of Policy, or the inability or failure of any subsequent owner of the indebtedness, to comply with applicable doing business laws of the state in which the land is situated. 5. Invalidity or unenforceability of the lien of the insured mortgage, or claim thereof, which arises out of the transaction evidenced by the insured mortgage and is based upon usury or any consumer credit protection or truth in lending law. 6. Any statutory lien for services, labor or materials (or the claim of priority of any statutory lien for services, labor or materials over the lien of the insured mortgage) arising from an improvement or work related to the land which is contracted for and commenced subsequent to Date of Policy and is not financed in whole or in part by proceeds of the indebtedness secured by the insured mortgage which at Date of Policy the insured has advanced or is obligated to advance. 7. Any claim, which arises out of the transaction creating the interest of the mortgagee insured by this policy, by reason of the operation of federal bankruptcy, state insolvency or similar creditors' rights laws, that is based on: (a) the transaction creating the interest of the insured mortgagee being deemed a fraudulent conveyance or fraudulent transfer; or (b) the subordination of the interest of the insured mortgagee as a result of the application of the doctrine of equitable subordination; or (c) the transaction creating the interest of the insured mortgagee being deemed a preferential transfer except where the preferential transfer results from the failure: (i) to timely record the instrument of transfer; or (ii) of such recordation to impart notice to a purchaser for value or a judgment or lien creditor. Policy 135 • Litho in U.S.A. 061-0-135-0006 Cover Sheet ALTA Loan Policy (10-17-92) CONDITIONS AND STIPULATIONS 1. DEFINITION OF TERMS. 3. NOTICE OF CLAIM TO BE GIVEN BY INSURED CLAIMANT. The following terms when used in this policy mean: The insured shall notify the Company promptly in writing (i) in case of (a) ''insured" the insured named in Schedule A. The term "insured" any litigation as set forth in Section 4(a) below, (!i) in case knowledge shall also includes come to an insured hereunder of any claim of title or interest which is adverse (i) the owner of the indebtedness secured by the insured mortgage to the title to the estate or interest or the lien of the insured mortgage, as in - and each successor in ownership of the indebtedness except a successor sured, and which might cause loss or damage for which the Company may who is an obligor under the provisions of Section 12(c) of these Conditions be liable by virtue of this policy, or (iii) if title to the estate or interest or the and Stipulations (reserving, however, all rights and defenses as to any suc- lien of the insured mortgage, as insured, is rejected as unmarketable. If prompt cessor that the Company would have had against any predecessor insured, notice shall not be given to the Company, then as to the insured all liability unless the successor acquired the indebtedness as a purchaser for value of the Company shall terminatew!th regard to the matter or matters for which without knowledge of the asserted defect, lien, encumbrance, adverse claim prompt notice is required; provided, however, that failure to notify the Com- or other matter insured against by this policy as affecting title to the estate pany shall in no case prejudice the rights of any insured under this policy or interest in the land); unless the Company shall be prejudiced by the failure and then only to the (ii) any governmental agency or governmental instrumentality which extent of the prejudice. is an insurer or guarantor under an insurance contract or guaranty insuring 4. DEFENSE AND PROSECUTION OF ACTIONS; DUTY OF INSURED or guaranteeing the indebtedness secured by the insured mortgage, or any CLAIMANT TO COOPERATE. part thereof, whether named as an ins,ired herein or not; (a) Upon written request by the insured and subject to the options (iii) the parties designated in Section 2(a) of these Conditions and contained in Section 6 of these Conditions and Stipulations, the Company, Stipulations, at its own costand without unreasonable delay, shall provide for the defense (b) "insured claimant'': an insured claiming loss or damage. of an insured in litigation in which any third party asserts a claim adverse to (c) "knowledge'' or "known'': actual knowledge, not constructive the title or interest as insured, but only as to those stated causes of action knowledge or notice which may be !mputed to an insured by reason of the alleging a defect, lien or encumbrance or other matter insured against by public records as defined in this policy or any other records which impart this policy. The Company shall have the right to select counsel of its choice constructive notice of matters affecting the land. (subject to the right of the insured to object for reasonable cause) to repre- (d) "land'': the land described or referred to in Schedule A, and sent the insured as to those stated causes of action and shall not be liable improvements affixed thereto which by law constitute real property. The term for and will not pay the fees of any other counsel. The Company will not pay "land'' does not include any property beyond the lines of the area described any fees, costs or expenses incurred by the Insured in the defense of those or referred to in Schedule A, nor any right, title, interest, estate or easement causes of action which allege matters not insured against by this policy. in abutting streets, roads, avenues, alleys, lanes, ways or waterways, but nothing (b) The Company shall have the right, at its own cost, to institute and herein shall modify or limit the extent to which a right of access to and from prosecute any action or proceeding or to do any other act which in its opinion the land is insured by this policy. may be necessary or desirable to establish the title to the estate or interest (e) ''mortgage'': mortgage, deed of trust, trust deed, or other security or the lien of the insured mortgage, as insured, or to prevent or reduce loss instrument. or damage to the insured. The Company may take any appropriate action (f) "public records": records established understate statutes at Date of under the terms of this policy, whether or not it shall be liable hereunder, and Policy for the purpose of imparting constructive notice of matters relating to shall not thereby concede liability or waive any provision of this policy. If the real property to purchasers for value and without knowledge. With respect Company shall exercise its rights underthis paragraph, it shall do so diligently. to Section 1(a)(iv) of the Exclusions From Coverage, ''public records'' shall (c) Whenever the Company shall have brought an action or interposed also include environmental protection liens filed in the records of the clerk defense as required or permitted by the provisions of this policy, the Com- of the United States district court for the district in which the land is located. pany may pursue any litigation to final determination by a court of competent (g) "unmarketability of the title': an alleged or apparent matter jurisdiction and expressly reserves the right, in its sole discretion, to appeal affecting the title to the land, not excluded or excepted from coverage, which from any adverse judgment or order would entitle a purchaser of the estate or interest described in Schedule A (d) In all cases where this policy permits or requires the Company to pro - or the insured mortgage to be released from the obligation to purchase by secute or provide for the defense of any action or proceeding, the insured virtue of a contractual condition requiring the delivery of marketable title. shall secure to the Company the right to so prosecute or provide defense 2. CONTINUATION OF INSURANCE. in the action or proceeding, and all appeals therein, and permit the Com- (a) After Acquisition of Title. The coverage of this policy shall continue pany to use, at its option, the name of the insured for this purpose. Whenever in force as of Date of Policy in favor of (i) an insured who acquires all or any requested by the Company, the insured, at the Company's expense, shall part of the estate or interest in the land by foreclosure, trustee's sale, con- givethe Companyall reasonableaid (i) in anyaction or proceeding, securing veyance in lieu of foreclosure, or other legal manner which discharges the evidence, obtaining witnesses, prosecuting or defending the action or pro - lien of the insured mortgage;(ii) atransferee of the estate or interest so acquired ceeding, or effecting settlement, and (ii) in any other lawful act which in the from an insured corporation, provided the transferee is the parent or wholly- opinion of the Company may be necessary or desirable to establish the title owned subsidiary of the insured corporation, and their corporate successors to the estate or interest or the lien of the insured mortgage, as insured. If the by operation of law and not by purchase, subject to any rights or defenses Company is prejudiced by the failure of the insured to furnish the required the Company may have against any predecessor insureds; and (iii) any govern- cooperation, the Company's obligations to the insured under the policy shall mental agency or governmental instrumentality which acquires all or any part terminate, including any liability or obligation to defend, prosecute, or con - of the estate or interest pursuant to a contract of insurance or guaranty insur- tinue any litigation, with regard to the matter or matters requiring such ing or guaranteeing the indebtedness secured by the insured mortgage. cooperation. (b) After Conveyance of Title. The coverage of this policy shall continue 5. PROOF OF LOSS OR DAMAGE. in force as of Date of Policy in favor of an insured only so long as the insured In addition to and after the notices required under Section 3 of these Con - retains an estate or interest in the land, or holds an indebtedness secured ditions and Stipulations have been provided the Company, a proof of loss by a purchase money mortgage given by a purchaser from the insured, or or damage signed and sworn to by the insured claimant shall be furnished only so long as the insured shall have liability by reason of covenants of war- to the Company within 90 days after the insured claimant shall ascertain the ranty made by the insured in any transfer or conveyance of the estate or in- facts giving rise to the loss or damage. The prcof of loss or damage shall terest. This policy shall not continue in force in favor of any purchaser from describe the defect in, or lien or encumbrance on the title, or other matter the insured of either (i) an estate or interest in the land, or (ii) an indebtedness insured against by this policy which constitutes the basis of loss or damage secured by a purchase money mortgage given to the insured, and shall state, to the extent possible, the basis of calculating the amount (c) Amount of Insurance. The amount of insurance after the acquisition of the loss or damage. If the Company is prejudiced by the failure of the in - or after the conveyance shall in neither event exceed the least of: sured claimant to provide the required proof of loss or damage, the Com- (i) the Amount of Insurance stated in Schedule A, pany's obligations to the insured under the policy shall terminate, including (ii) the amount of the principal of the indebtedness secured by the any liability or obligation to defend, prosecute, or continue any litigation, with insured mortgage as of Dateof Policy, interest thereon, expenses of foreclosure, regard to the matter or matters requiring such proof of loss or damage. amounts advanced pursuant to the insured mortgage to assure compliance In addition, the insured claimant may reasonably be required to submit with laws or to protect the lien of the insured mortgage prior to the time of to examination under oath by any authorized representative of the Company acquisition of the estate or interest in the land and secured thereby and and shall produce for examination, inspection and copying, at such reasonable reasonable amounts expended to prevent deterioration of improvements, but times and places as may be designated by any authorized representative reduced by the amount of all payments made; or of the Company, all records, books, ledgers, checks, correspondence and (iii) the arTiount paid by any governmental agency or governmental memoranda, whether bearing a date before or after Date of Policy, which instrumentality, if the agency or instrumentality is the insured claimant, in the reasonably pertain to the loss or damage. Further, if requested by any author - acquisition of the estate or interest in satisfaction of its insurance contract or ized representative of the Company, the insured claimant shall grant its per - guaranty mission, in writing, for anv authorized representative of the Company to continued on next page of cover sheet CONDITIONS AND STIPULATIONS —CONTINUED examine, inspect and copy all records, books, ledgers, check, cor- ► 8. LIMITATION OF LIABILITY. respondence and memoranda in the custody or control of a third party, which reasonably pertain to the loss or damage. All information designated (a) If the Company establishes the title, or removes the alleged defect, as con- fidential by the insured claimant provided to the Company pursuant to this lien or encumbrance, or cures the lack of a right of access to or from the land or cures the claim of unmarketability of title, or otherwise establishes the lien Section shall not be disclosed to others unless, in the reasonable judgment of the Company, it is necessary in the administration of the claim. Failure of of the insured mortgage, all as insured, in a reasonably diligent manner by the insured claimant to submit for examination under oath, produce other any method, including litigation and the completion of any appeals therefrom, reasonably requested information or grant permission to secure reasonably it shall have fully performed its obligations with respect to that matter and shall not be liable for any loss or damage caused thereby necessary information from third parties as required in this paragraph, unless prohibited by law or governmental regulation, shall terminate any liability of b In the event of an litigation, including litigation b the Company () y g g g y p y the Company under this policy as to that claim. or with the Company's consent, the Company shall have no liability for loss 6. OPTIONS TO PAY OR OTHERWISE SETTLE CLAIMS; or damage until there has been a final determination by a court of competent TERMINATION OF LIABILITY. jurisdiction, and disposition of all appeals therefrom, adverse to the title or In case of a claim under this policy, the Company shall have the follow- ing additional options: to the lien of the insured mortgage, as insured. (c) The Company shall not be liablee for loss or damage to any insured (a) To Pay or Tender Payment of the Amount of Insurance or to for liability voluntarily assumed by the insured in settling any claim or suit without Purchase the Indebtedness. the prior written consent of the Company. (i) to pay or tender payment of the amount of insurance under (d) The Company shall not be liable for (i) any indebtedness created this policy together with any costs, attorneys' fees and expenses incurred subsequent to Date of Policy except for advances made to protect the lien by the insured claimant, which were authorized by the Company, up to the of the insured mortgage and secured thereby and reasonable amounts ex - time of payment or tender of payment and which the Company is obligated pended to prevent deterioration of improvements; or (ii) construction loan to pay; or advances made subsequent to Date of Policy, except construction loan ad- (ii) to purchase the indebtedness secured the insured mortgage vances made subsequent to Date of Policy for the purpose of financing in for the amount owing thereon together with any costs, s, attorneys' fees and whole or in part the construction of an improvement to the land which at Date expenses incurred by the insured claimant which were authorized by the Com- of Policy were secured by the insured mortgage and which the insured was pany up to the time of purchase and which the Company is obligated to pay. and continued to be obligated to advance at and after Date of Policy. If the Company offers to purchase the indebtedness as herein provided, 9. REDUCTION OF INSURANCE; REDUCTION OR TERMINATION the owner of the indebtedness shall transfer, assign, and convey the in- OF LIABILITY. debtedness and the insured mortgage, together with any collateral security, (a) All payments under this policy, except payments made for costs, to the Company upon payment therefor. attorneys' fees and expenses, shall reduce the amount of the insurance pro Upon the exercise by the Company of either of the options provided tanto. However, any payments made prior to the acquisition of title to the estate for in paragraphs a(i) or (ii), all liability and obligations to the insured under or interest as provided in Section 2(a) of these Conditions and Stipulations this policy, other than to make the payment required in those paragraphs, shall not reduce pro tanto the amount of the insurance afforded under this shall terminate, including any liability or obligation to defend, prosecute, or policy except to the extent that the payments reduce the amount of the in - continue any litigation, and the policy shall be surrendered to the Company debtedness secured by the insured mortgage, for cancellation. (b) Payment in part by any person of the principal of the indebtedness, (b) To Pay or Otherwise Settle With Parties Other than the Insured or any other obligation secured by the insured mortgage, or any voluntary or With the Insured Claimant. partial satisfaction or release of the insured mortgage, to the extent of the (i) to pay or otherwise settle with other parties for or in the name payment, satisfaction or release, shall reduce the amount of insurance pro of an insured claimant any claim insured against under this policy, together tanto. The amount of insurance may thereafter be increased by accruing in - with any costs, attorneys' fees and expenses incurred by the insured clai- terest and advances made to protect the lien of the insured mortgage and mant which were authorized by the Company up to the time of payment and secured thereby, with interest thereon, provided in no event shall the amount which the Company is obligated to pay; or of insurance be greater than the Amount of Insurance stated in Schedule A. (ii) to pay or otherwise settle with the insured claimant the loss or (c) Payment in full by any person or the voluntary satisfaction or release damage provided for under this policy, together with any costs, attorneys' of the insured mortgage shall terminate all liability of the Company except fees and expenses incurred by the insured claimant which were authorized as provided in Section 2(a) of these Conditions and Stipulations. by the Company up tothe time of payment and which the Company is obligated 10. LIABILITY NONCUMULATIVE. to pay. If the insured acquires title to the estate or interest in satisfaction of the Upon the exercise by the Company of either of the options provided indebtedness secured by the insured mortgage, or any part thereof, it is for in paragraphs b(i) or (ii), the Company's obligations to the insured under expressly understood that the amount of insurance under this policy shall this policy for the claimed loss or damage, other than the payments required be reduced by any amount the Company may pay under any policy insuring to be made, shall terminate, including any liability or obligation to defend, a mortgage to which exception is taken in Schedule 8 or to which the insured prosecute or continue any litigation. has agreed, assumed, or taken subject, of which is hereafter executed by 7. DETERMINATION AND EXTENT OF LIABILITY. an insured and which is a charge or lien on the estate or interest described This policy is a contract of indemnity against actual monetary loss or or referred to in Schedule A, and the amount so paid shall be deemed a pay - damage sustained or incurred by the insured claimant who has suffered loss ment under this policy, or damage by reason of matters insured against by this policy and only to 11. PAYMENT OF LOSS. the extent herein described. (a) No payment shall be made without producing this policy for endorse - (a) The liability of the Company under this policy shall not exceed the ment of the payment unless the policy has been lost or destroyed, in which least of: case proof of loss or destruction shall be furnished to the satisfaction of the (i) the Amount of Insurance stated in Schedule A, or, if applicable, the amount of insurance as defined in Section 2 (c) of these Conditions and Company. (b) When liability and the extent of loss or damage has been definitely Stipulations; fixed in accordance with these Conditions and Stipulations, the loss or damage (ii) the amount of the unpaid principal indebtedness secured by shall be payable within 30 days thereafter. the insured mortgage as limited or provided under Section 8 of these Condi- 12. SUBROGATION UPON PAYMENT OR SETTLEMENT. tions and Stipulations or as reduced under Section 9 of these Conditions and (a) The Company's Right of Subrogation. Stipulations, at the time the loss or damage insured against by this policy Whenever the Company shall have settled and paid a claim under this occurs, together with interest thereon; or policy, all right of subrogation shall vest in the Company unaffected by any (iii) the difference between the value of the insured estate or act of the insured claimant. The Company shall be subrogated'to and be entitled to all rights and interest as insured and the value of the insured estate or interest subject to remedies which the insured claimant would have had against any person the defect, lien or encumbrance insured against by this policy. or property in respecttothe claim had this policy not been issued. If requested (b) In the event the insured has acquired the estate or interest in the by the Company, the insured claimant shall transfer to the Company all rights manner described in Section 2(a) of these Conditions and Stipulations or has and remedies against any person or property necessary in order to perfect conveyed the title, then the liability of the Company shall continue as set forth this right of subrogation. The insured claimant shall permit the Company to in Section 7(a) of these Conditions and Stipulations. sue, compromise or settle in the name of the insured claimant and to use (c) The Company will pay only those costs, attorneys' fees and expenses the name of the insured claimant in any transaction or litigation involving these incurred in accordance with Section 4 of these Conditions and Stipulations. rights or remedies. If a payment on account of a claim does not fully cover the loss of the CONDITIONS AND STIPULATIONS —CONTINUED insured claimant, the Company shall be subrogated to all rightsand remedies or less shall be arbitrated at the option of either the Company or the insured. of the insured claimant after the insured claimant shall have recovered its prin- All arbitrable matters when the Amount of Insurance is in excess of $1,000,000 cipal, interest, and costs of collection. shall be arbitrated only when agreed to by both the Company and the in- (b) The Insured's Rights and Limitations. sured. Arbitration pursuant to this policy and under the Rules in effect on the Notwithstanding the foregoing, the owner of the indebtedness secured date the demand for arbitration is made or, at the option of the insured, the by the insured mortgage, provided the priority of the lien of the insured mor- Rules in effect at Date of Policy shall be binding upon the parties. The award tgage or its enforceability is not affected, may release or substitute the per- may include attorneys' fees only if the laws of the state in which the land is sonal liability of any debtor or guarantor, or extend or otherwise modify the located permit a court to award attorneys' fees to a prevailing party. Judg- terms of payment, or release a portion of the estate or interest from the lien ment upon the award rendered by the Arbitrator(s) may be entered in any of the insured mortgage, or release any collateral security for the indebtedness. court having jurisdiction thereof. When the permitted acts of the insured claimant occur and the insured The law of the situs of the land shall apply to an arbitration under the has knowledge of any claim of title or interest adverse to the title to the estate Title Insurance Arbitration Rules. or interest or the priority or enforceability of the lien of the insured mortgage, A copy of the Rules may be obtained from the Company upon request. as insured, the Company shall be required to pay only that part of any losses 14. LIABILITY LIMITED TO THIS POLICY; POLICY ENTIRE CONTRACT. insured against by this policy which shall exceed the amount, if any, lost to (a) This policy together with all endorsements, if any, attached hereto the Company by reason of the impairment by the insured claimant of the Com- by the Company is the entire policy and contract between the insured and pany's right of subrogation. the Company. In interpreting any provision of this policy, this policy shall be (c) The Company's Rights Against Non-insured Obligors. construed as a whole. The Company's right of subrogation against non-insured obligors shall (b) Any claim of loss or damage, whether or not based on negligence, exist and shall include, without limitation, the rights of the insured to indem- and which arises out of the status of the lien of the insured mortgage or of nities, guaranties, other policies of insurance or bonds, notwithstanding any the title to the estate or interest covered hereby or by any action asserting terms or conditions contained in those instruments which provide for subroga- such claim, shall be restricted to this policy. Lion rights by reason of this policy. (c) No amendment of or endorsement to this policy can be made ex - The Company's right of subrogation shall not be avoided by acquisition cept by a writing endorsed hereon or attached hereto signed by either the of the insured mortgage by an obligor (except an obligor described in Sec- President, aVice President, the Secretary, an Assistant Secretary, or validating tion 1(a)(ii) of these Conditions and Stipulations) who acquires the insured officer or authorized signatory of the Company. mortgage as a result of an indemnity, guarantee, other policy of insurance, 15. SEVERABILITY. or bond and the obligor will not be an insured under this policy, notwithstan- In the event any provision of this policy is held invalid or unenforceable ding Section 1(a)(i) of these Conditions and Stipulations. under applicable law, the policy shall be deemed not to include that provi- 13. ARBITRATION sion and all other provisions shall remain in full force and effect. Unless prohibited by applicable law, either the Company or the insured 16. NOTICES, WHERE SENT. may demand arbitration pursuant to the Title Insurance Arbitration Rules of All notices required to be given the Company and any statement in writing the American Arbitration Association. Arbitrable matters may include, but are required to be furnished the Company shall include the number of this policy not limited to, any controversy or claim between the Company and the in- and shall be addressed to the Company at its Corporate Headquarters sured arising out of or relating to this policy, any service of the Company in 6630 West Broad Street, Richmond, Virginia 23230. Mailing Address: PO. connection with its issuance or the breach of a policy provision or other obliga- Box 27567, Richmond Virginia 23261, or to the Company at its Pacific States tion. All arbitrable matters when the Amount of Insurance is $1,000,000 Office, 10 Universal City Plaza, 23rd Floor, Universal City, CA 91608. IN WITNESS WHEREOF, the Company has caused this policy to be signed and sealed, to be valid when countersigned by an authorized officer or agent of the Company, all in accordance with its By -Laws. Attest: Z /,�&- Secretary Countersigned by: Authorized Officer or Agent LawyersTTdeInsurance Corporation ................ �E_F�ttt y . BY: jy s3;�$�`a4s �avbuf 6'. 4 _- t1'',1'cPresident POLICY OF TITLE INSURANCE A WORD OF THANKS... As we make your policy a part of our permanent records, we want to express our appreciation of this evidence of your faith in Lawyers Title Insurance Corporation. There is no recurring premium. This policy provides valuable title protection and we suggest you keep it in a safe place where it will be readily available for future reference. If you have any questions about the protection provided by this policy, contact the office that issued your policy or you may write to:. Consumer Affairs Department Lawyers ji leInsurance Corporation P.O. Box 27567 Richmond, Virginia 23261 LAWYERS TITLE -INSURANCE CORPORATION National Headquarters Rirtnn�, Virginia AMERICAN LAND TITLE ASSOCIATION LOAN POLICY 1 9 9 2 Issued At: Continental Lawyers Title Company 18551 Von Karman, Suite 100, Irvine, California 92715 SCHEDULE A ------------------------------------------------------------------------------------------------ ORDER POLICY AMOUNT OF PREMIUM DATE OF POLICY NUMBER NUMBER INSURANCE ------------------------------------------------------------------------------------------------ 94-02220A 135-01-205-114 $35,000.00 1. NAME OF INSURED: $150.00 03/13/96 at 3:16 pay► The Redevelopment Agency of the City of Huntington Beach, a public body Corporate and politic 2. THE ESTATE OR INTEREST IN THE LAND WHICH IS COVERED BY THE INSURED MORTGAGE IS: A CONDOMINIUM, as defined in Section 783 of the California Civil Code, in fee 3. TITLE TO THE ESTATE OR INTEREST IN THE LAND IS VESTED IN: Peter Margolis, a single man 4. THE INSURED MORTGAGE AND ASSIGZEN S THEREOF, IF ANY, ARE DESCRIBED AS FOLLOWS: A Deed of Trust to secure an indebtedness in the amount shown below, and any other obligations secured thereby Amount: $35,000.00 Dated: March 8, 1996 Trustor: Peter Margolis Trustee: The City of Huntington Beach, a municipal corporation Beneficiary: The Redevelopment Agency of the City of Huntington Beach, a public body corporate and politic Recorded: March 13, 1996 Instrument No. 96-0122114 of Official Records ALTA LOAN"POLICY- 1992 Policy No.:135-01-205-114 Order No.: 94-02220A 5. THE LAND REFERRED TO IN THIS POLICY IS DESCRIBED AS FOLLOWS: A Condominium comprised of: PARCEL 1: An undivided one twenty second (1/22) fee simple interest as a tenant in common in and to all of the Common Area defined in Declaration referred to blow and described in the Condominium Plan ("Plan") for Lot 1 of Tract No. 14828, which Plan was recorded on August 25, 1994 as Instrument No. 94-0525335 of Official Records of Orange County, over Lot 1 of Tract No. 14828, in the City of Huntington Beach, County of Orange, State of California, as per map filed in Book 706, Pages 27 to 29 of Miscellaneous Maps, in the office of the County Recorder of said County. Excepting therefrom all oil, petroleum, asphaltum, gas, minerals and other hydrocarbon substances, as reserved in deed recorded August 16, 1921 in Book 401, Page 356 of Deeds, and in various other deeds of record. PARCEL 2: Unit No. 20 consisting of certain airspace and surface elements, as shown and described in the Condominium Plan referred to in Parcel 1 above. PARCEL 3: Non-exclusive easements for access, ingress, egress, use, enjoyment, drainage, encroachment, support, maintenance, repairs and for other purposes, all as described in that certain Declaration of Covenants, Conditions and Restrictions and Reservation of Easements for Pacific Park Villas, recorded August 25, 1994 as Instrument No. 94-0525336 of Official Records. PARCEL 4: Exclusive easements appurtenant to Parcels 1 and 2 referred to above, for balcony or patio purposes, over the areas defined, depicted and assigned on the Plan. ALTA LOAN' POLICY- 1992 POLICY NO.:135-01-205-114 ORDER NO.: 94-02220A i ia►. MCI % 0 gp THIS POLICY DOES NOT INSURE AGAINST LOSS OR DAN M (AND THE COMPANY WILL NOT PAY COSTS, ATTORNEYS', FEES OR EXPENSES) WHICH ARISE BY REASON OF: A. Property taxes, including general and special taxes, personal property taxes, if any, and any assessments collected with taxes, to be levied for the fiscal year 1996-1997 which are a lien not yet payable. B. Supplemental or escaped assessments of propm-ty taxes, if any, assessed pursuant to the Revenue and Taxation Code, of the State of California. 1. The matters contained in a document entitled "Memorandum of Disposition and Development Agreement" recorded January 3, 1994 as Instrument No. 94-0001007 of Official Records. Reference is made to said document for full particulars. 2. The fact that the ownership of said land does not include rights of access to or from the street or highway abutting said land, such rights having been relinquished by the map of said Tract. Affects: Talbert Avenue; Joyful Lane and Happy Drive Except at street intersections and approved driveway locations. 3. Covenants, conditions and restrictions (deleting therefrom any restrictions based on race, color or creed) as set forth in the document Recorded: February 24, 1994 Instrument No. 94-0137068 of Official Records Said covenants, conditions and restrictions provide that a violation thereof shall not defeat the lien of any mortgage or deed of trust made in good faith and for value. 4. Matters in an Instrument which, among other things, contain or provide for Assessments, Liens and the subordination thereof, provisions relating to Partition, Restrictions on severability of Component Interests, Covenants, Conditions and Restrictions, a provision that no violation thereof and no enforcement of any Lien provided for herein shall defeat or render invalid the Lien of a Mortgage or Deed of Trust made in good faith and for value, but which however, do not contain Restrictions based on race, color or creed. Recorded: August 25, 1994 Instrument No. 94-0525336 of Official Records ORDER NO.: 94-02220A J` 1010 5. The matters contained in a document entitled "Common Facilities Use and Maintenance Agreement For Pacific Park Villas" recorded August 25, 1994 as Instrument No. 94-0525337 of Official Records. Reference is made to said document for full particulars. 6. An easement for the purpose shown below and rights incidental thereto as set forth in a document Granted to: Southern California Edison Company Purpose: Public utilities Recorded: October 27, 1994 Instrument No. 94-0632840 of Official Records Affects: the Southerly 50 feet of the Easterly 4 feet of Lot 1 7. A Deed of Trust to secure an indebtedness in the amount shown below, and any other obligations secured thereby Amount: $140,000.00 Dated: March 5, 1996 Trustor: Peter Margolis, a single man Trustee: Continental Lawyers Title Beneficiary: Michael L. Cummins dba Emerald Pacific Financial, a sole proprietorship Recorded: March 13, 1996 Instrument No. 96-0122112 of Official Records An assignment of the beneficial interest under said deed of trust which names As Assignee: FT Mortgage Companies, a Kansas corporation dba Sunbelt National Mortgage Recorded: March 13, 1996 Instrument No. 96-0122113 of Official Records ORDER NO.: 94-02220A SCHEDUI E B ( PART I CONTINUED) The following endorsements are attached to and made a part of this policy: 100 110.9 115 116.2 th Date typed: 02/05/96 Plats enclosed ALTA LOAN P O L I C Y- 1 9 9 2 POLICY NO.: 135-01-205-114 ORDER NO.: 94-02220A PART II IN ADDITION TO THE MATTERS SET FORTH IN PART I OF THIS SCHEDULE, THE TITLE TO THE ESTATE OR INTEREST IN THE LAND DESCRIBED OR REFERRED TO IN SSE A IS SUBJECT TO THE FOL DWING MATTERS, IF ANY BE SHOWN, BUT THE COMPANY INSURES THAT THESE MATTERS ARE SUBORDINATE TO THE LIEN OR CHARGE OF THE INSURED MORTGAGE UPON THE ESTATE OR INTEREST: 8. Covenants, conditions and restrictions (deleting therefrom any restrictions based on race, color or creed) as set forth in the document Recorded: March 13, 1996 Instrument No. 96-0122115 of Official Records ENDORSEMENT LAWYERS TITLE INSURANCE C7ORPORATION CLTA FORM 100 Order No.: 94-02220A Attached to Policy No.: 135-01-205-114 The Company hereby insures against loss which said Insured shall sustain by reason of the following matters: 1. Any incorrectness in the assurance which the Company gives: a. That there are no covenants, conditions, or restrictions under which the lien of the mortgage referred to in Schedule A can be cut off, subordinated, or otherwise impaired; b. That there are no present violations on said land of any enforceable covenants, conditions, or restrictions; c. That, except as shown in Schedule B, there are no encroachments of buildings, structures, or improvements located on said land onto adjoining lands, nor any encroachments onto said land of buildings, structures, or improvements located on adjo' lands. 2. a. Any future violations on said land of any covenants, conditions, or re- strictions occurring prior to acquisition of title to the estate or interest referred to in Schedule A by the Insured provided such violations result in impairmemt or loss of the lien of the mortgage referred to in Schedule A, or result in impairment or loss of the title to the estate or interest referred to in Schedule A if the Insured shall acquire such title in satisfaction of the indebtedness secured by the insured mortgage; b. Unmarketability of the title to the estate or interest referred to in Schedule A by reason of any violations on said land, occurring prior to acquisition of title to estate or interest referred to in Schedule A by the insured, of any covenants, conditions or restrictions. 3. Damage to existing improvements, including lawnsshrubbery or trees: a. which are located or encroach upon that portion of the land subject to any easement shown in Schedule B, which damage results from the exercise of the right to use or maintain such easement for the purposes for which the same was granted or reserved. b. resulting from the exercise of any right to use the surface of said land for the extraction or development of the minerals excepted from the description of said land or shown as a reservation in Schedule B. 4. Any final court order or judgment requiring removal from any land adjoining the land of any encroachment shown in Schedule B. Wherever in this endorsement any or all the words "covenants, conditions, or restrictions" appear, they shall not be deemed to refer to or include the terms covenants and conditions contained in any lease referred to in Schedule A. For purposes of this endorsement, the words "covenants", "conditions" or "restrictions" shall not be deemed to refer to or include any covenants, conditions or restrictions relating to environmental protection, except to the extent that a notice of violation or alleged violataion affecting the land has been recorded in the public records at Date of Policy and is not excepted in Schedule B. This endorsement is made a part of the policy and is subject to all of the terms and provisions thereof and of any prior endorsements thereto. Except to the extent expressly stated, it neither modifies any of the terms and provisions of the policy and any prior endorsements; nor does it extend the effective date of the policy and any prior endorsements, nor does it increase the face amount thereof. IN WITNESS W11EWF, the Catrpany has caused this Endorsement to be signed, to be valid when countersigned by an authorized officer or agent of the Company, all in accordance with its By -Laws. Date: March 13, 1996 Issued at: Irvine, California LAWYERS TITLE INSURANCE CORPORATION Countersigned: Janet A. Alpert - President `` br �c Authorized Officer or Agent John M. Carter - Secretary ENDORSEMENT LAWYERS TITLE INSURANCE CORPORATION CLTA FORM 110.9 Order No.: 94-02220A Attached to Policy No.: 135-01-205-114 The insurance afforded by this endorsement is only effective if the land is used or is to be used primarily for residential purposes. The Company insures the insured against loss or damage sustained by reason of lack of priority of the lien of the insured mortgage over: (a) any environmental protection lien which, at Date of Policy is recorded in those records established under state statutes at Date of Policy for the purpose of imparting constructive notice of matters relating to real property to purchasers for value and without knowledge, or filed in the records of the clerk of the United States District Court for the district in which the land is located, except as set forth in Schedule B; or (b) any environmental protection lien provided for by any state statute in effect at Date of Policy, except environmental protection liens provided for in the following state statutes: NONE This endorsement is made a part of this policy and is subject to all of the terms and provisions thereof, and of any prior endorsements thereto. Except to the extent expressly stated, it neither modifies any of the terms and provisions of the policy and any prior endorsements, nor does it extend the effective date of the policy and any prior endorsements, nor does it ire the face amount thereof. IN WITNESS WHEREOF, the Company has caused this Endorsement to be signed, to be valid when countersigned by an authorized officer or agent of the Company, all in accordance with its By -Laws. LAWYERS TITLE INSURANCE CORPORATION Countersigned by: Janet A. Alpert - President John M. Carter - Secretary Issued at: Irvine, California ENDORSEMENT LAWYERS TITLE INSURANCE CORPORTION CLTA FORM 115 Order No.: 94-02220A Attached to Policy No.: 135-01-205-114 The Company assures the Insured The Redevelopment Agency of the City of Huntington Beach, a public body corporate and politic that the estate or interest described in Schedule A is a condominium as defined in Section 783 of the California Civil Code, in fee, and as such is entitled to be assessed and taxed as a separate parcel. The Company hereby insures said Assured against loss, which said Assured shall sustain in the event that the assurances made herein shall prove to be incorrect. The total liability of the Company under said policy and any endorsements therein shall not exceed, in the aggregate, the face amount of said Policy and costs which the Company is obligated under the conditions and stipulations thereof to pay. This endorsement is made a part of said policy and is subject to the schedules, condi- tions and stipulations contained therein, except as modified by the provisions hereof. IN WITNESS WHEREOF, the Company has cause this endorsement to be signed, to be valid when countersigned by an authorized officer or agent of the Company, all in accordance with its By -Laws. Cotmtersigned by: LAWYERS TITLE INSURANCE CORPORATION Janet A. Alpert - President (f{ n Jahn M. Carter - Secretary Issued at: Irvine, California ENDORSEMENT LAWYERS TITLE INSURANCE CLTA FORM 116.2 Attached to Policy No.: 135-01-205-114 Order No.: 94-02220A The Company assures the Insured that at the date of this Policy the dimensions of the exterior boundary of the Common Area referred to in Schedule A of this Policy which is also the exterior boundary of the project, are correctly sham on that map recorded in book 706, pages 27 to 29 of Maps in the office of the County Recorder of said County. The Company further assures the Insured that the estate in said land referred to in Schedule A includes a residence within the project boundaries, which residence is designated as Unit 20, as shown on the map recorded August 25, 1994 as Instrument No. 94-0525335, Official Records of Condominiums in the office of the County Recorder of said County, and known as: 18051 Joyful Lane ##104 Huntington Beach, California The Company hereby insures the Insured against loss which said Insured shall sustain in the event that the assurance herein shall prove to be incorrect. The total liability of the Company under said policy and any endorsements therein shall not exceed, in the aggregate, the face amount of said Policy and costs which the Company is obligated under the conditions and stipulations thereof to pay. This endorsement is made a part of said policy and is subject to the schedules, condi- tions and stipulations therein contained. IN WITNESS WHEREOF, the Company has caused this endorsement to be signed, to be valid when countersigned by an authorized officer or agent of the Company, all in accordance with its By -Laws. LAWYERS TITLE INSURANCE CORPORATION Cotmtersigned by: Janet A. Alpert - President John M. Carter - Secretaxy a Issued at: Irvine, California CONDOMINIUM PLANS FOR SHEET 10 OF 32 LOT 1 OF TRACT 14828, IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA. AS SHOWN ON A MAP RECORDED IN MAP BOOK IVE. 706, PACES 27 THROUGH 29, INCLUSOF MISCELLANEOUS MAPS. IN OF THE RECORDER OF SAID COUNTY. THE OFFICE PHASE ONE OF PACIFIC PARK VILLAS CURVE DATA CURVE DELTA RADIUS LENGTH TANGENT ' 2 '3'' 30 1513'334'28' 327.00' 273.00' 88.80' 44.67' 3 89 53'10' 23.00' 74.21' 38.08' 37.33' 22.95' 4 5 OS'52'36' 327.00' 33.54' 16.78' 6 15*34*15' 15'33'30" 300.00' 300.00' 81.53, 41.02' 08*31*01' 327.00' 81.46' 48.61' 40.98' 24.35' 09'40'54- 327.00' 55.26' 27.69' MONUMENT NOTES 1 • 9 INDICATES FOUND MONUMENTS AS NOTED 2. ■ INDICATES FOUND SPIKE AND WASHER NO TAG. NO REF. HELD TO ESTABLISH THE CENTERUNES OF ,JOLLY LANE, HAPPY DRIVE, AND JOYFUL LANE REPLACED WITH S"cE AND WASHER TAGGED L.S. 5749. 3. O INDICATES 2' If TAGGED L.S. 5749 OR SPucE AND WASHER TAGGED L.S. 5749 OR LEAD AND TACK TAGGED L.S. 5749 TO BE SET BEFORE THE RECORDATION OF THIS MAP. 4. 4 INDICATES e" SPIKE k WASHER STAMPED L.S. 5749 TO BE SET WITHIN 90 DAYS AFTER AC'��'•• -- -- -- - 0 CONDOMINIUM PLANS FOR SHEET 11 OF 32 LOT 1 OF TRACT 14828. IN THE CITY OF HU%TINCTON BEACH. COUNTY OF ORANGE. STATE OF CALIFORNIA. AS SHOwN ON A MAP RECOROEO IN MAP GOOK 706. PACES 27 THROUGH 29. INCLUSIVE. OF MISCELLANEOUS MAPS. IN THE OFFICE OF THE RECORDER OF SAIO COUNTY. PHASE ONE OF PACIFIC PARK VILLAS ASSOCIATION PROPERTY, UNI � NUMBERS & TIES SCALE: 1 "=40' LOVER MJMM MptATES LOW" UVEL UNT. HmAgEm NAAIVI NO "ns NPPE11 UKL W®T. Ms. 80"ARY YAP IOR 9OL94WY OWNS OM KrWW UNTS ALOM6 "KUP4L ASSOCLArAN PROPEArr E7ftY0Es Lw113 94OVK JOB NO. 4285 HALL do FOREMAN. INC. CONDOMINIUM PLANS FOR SHEET 16 OF 32 LOT 1 OF TRACT 14828. IN THE CITY OF H%;NTINGTON BEACH. COUNTY OF ORANGE. STATE OF CALIFORNIA. AS SHOWN ON A MA2 RECORDED IN MAP BOOK 706. PACES 27 THROUGH 29. INCLUSIVE. OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE RECORDER OF SAID COUNTY. PHASE ONE OF PACIFIC PARK VILLAS Now- • 111111— n GARAGE LEVEL a UNIT 12 r J UNIT 18 II 13."r / UNIT 20 II 7' �33 I I STAIRS a I. II � o r6.1^n�^ 10.9'—J— 9.6' II 0.1It ! III —�i 1.0' -0&— 0.4• I I II 0.4' la' at ' II II II • d 20S I ( 1.4' (. A 8 SEtJNE L _—__ nvOICATES LWITS OF vERTICALI RI VAATIONS PER SECTIONS SCALE 1--lo' SEE SHEETS 26-31 FOR SECTIONS ANO ELEVATIONS. E SHEET 22 OF 32 I CONDOMINIUM PLANS FOR LOT 1 OF TRACT 14828, IN THE CITY OF HUNTINGTON BEACH. COUNTY OF ORANGE. STATE OF CALIFORNIA. AS SHOWN ON A MAP RECORDED IN MAP BOOK 706. PAGES 27 THROUGH 29, INCLUSIVE. OF MISCELLANEOUS MAPS. IN THE OFFICE OF THE RECORDER OF SAID COUNTY. PHASE ONE OF PACIFIC PARK VILLAS • 1ST LEVEL UNIT 18 ,g• 1.0- �- UNIT 20 ISCALE 1"=10' II i SEE SHEETS 26-31 FOR SECTIONS AND ELEVATION& iiiiw- I I ALL LmES INTERSECT I AT W. 4W. OR 135E - INDICATES LIMITS Of VERTICAL I — — — — VARIATIONS PER SECTIONS I I,oltr— - - lgr . ,..11w11� CONDOMINIUM PLANS FOR SHEET 26 OF LOT I OF TRACT STATE OF CALIFORNIA.2eAS SHIN OWN CH. COUNTY OF ORAN ON RECORDED IN MAP BOOK 706. GE. PACES 27 THROUCH 29. INCLUSIVE, Of MISCELLANEOUS MAPS. N THE OFFICE OF THE RECORDER OF SAID COUNTY. PHASE ONE OF PACIFIC PARK VILLAS � A = II 11 -- II II `� II "'• I � - 11 �jj � s-rr II II II 11 II a II II 2a6' 11 9AsfUNf L (SCALE 1's10' SEE SHEETS 26-31 FOR SfCT10N5 ANO ELEVATIONS. 2N® LEVEL UNIT 12 UNIT 18 UNIT 20 ALL UWS 61TERSECT AT 201. aS: OR 13r. — — — — NOCATES LIMITS Of VERT" VARIATIONS PER SECTIONS .a: 0 F-wm !s R=.nJFSTEID 9AY RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO: Redevelopment Agency of the City of Huntington Beach 2000 Main Street \ Huntington Beach, California 92648 Attn: Agency Clerk Recorded in the county of Orange, california Gary L. Granville, Clerk/Recorder 1111111111111 No Fee 19960044556 04 ; 30PM 01 /30/96 006 178902 11 12 IB45 D11 A36 18 0 14.00 0.00 51.00 0.00 0.00 0.00 0.00 0.00 0.00 [Space Above This Line For Recorders Use.] ff v) This document is exempt from - recording fees pursuant to Government Code Section 6103. r DEED OF TRUST WITH ASSIGNMENTS OF RENTS THIS DEED OF TRUST is made this, 8th day of January , 1996, by and among SEAN APHECKETHORN and JACQUELII� A. HECKETHORN, whose address is 7871 Happy Drive, 9102, Huntington Beach, CA 92648 (the "Trustor") and THE CITY OF HUNTINGTON BEACH, a municipal corporation (the "Trustee") and THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic (the 'BENEFICIARY'), whose address is 2000 Main Street, Huntington Beach, California 92648. WITNESSETH: That Trustor Irrevocably Grants, Transfers and Assigns, to Trustee, in Trust, with Power of Sale, that property in the City of Huntington Beach, County of Orange, State of California, described legally in the Legal Description attached hereto as Exhibit "A" and incorporated herein. TOGETHER WITH: (a) all buildings, improvements and fixtures, now or hereafter placed thereon, it being understood and agreed that all classes of property attached or unattached used in connection herewith shall be deemed fixtures, (b) rents, issues and profits thereof, (c) any water rights and/or stock are appurtenant or pertain to said land, and (d) all sums of money payable on the purchase price of said property secured by a lien thereon or payable under any agreement for the sale thereof, SUBJECT, HOWEVER, to the right, power and authority hereinafter given to and conferred upon Beneficiary to collect and apply such rents, issues and profits, and all sums of money payable on the purchase price of said property secured by a lien thereon or payable under any agreement. Page 1 of 15 SFs\Agree:HeckDeed\ 12/29/95 RLS 95-779 A. FOR THE PURPOSE OF SECURING: 1. Payment of the sum of Thirty-five Thousand Dollars ($35,000) with interest thereon according to the terms of a Promissory Note of even date herewith, made by Trustor, payable to the order of the Beneficiary and extensions or renewals thereof. 2. Payment of such additional sums with interest thereon as: (a) may be hereafter borrowed from the Beneficiary by the then record owner or owners of said property when evidenced by another Promissory Note or Notes, or (b) as may be added to the indebtedness secured hereby in accordance with the provision of this Deed of Trust. 3. Performance of each and every obligation, covenant, promise or agreement of Trustor contained herein in the Loan Agreement between Beneficiary and Trustor dated January 8th , 1996, insofar as the terms and conditions of that agreement may apply to Trustor. 4. Payment, with interest thereon, future indebtedness or obligation of the Trustor (or of any successor -in -interest of the Trustor to said property) to the Beneficiary, whether created directly or acquired by assignment, whether absolute or contingent, whether due or not, whether otherwise secured or not, or whether existing at the time of the execution of the Deed of Trust, or arising thereafter. B. TO PROTECT THE SECURITY OF THIS DEED OF TRUST, TRUSTOR AGREES 1. To keep said property in good condition and repair; to allow Beneficiary or its representatives to enter and inspect the premises at all reasonable times and access thereto, shall be permitted for that purpose, not to remove or demolish any building thereon; not to make alterations thereto without the consent of the Beneficiary; to suffer or permit no change in the general nature of the occupancy of the premises without Beneficiary's written consent; to complete or restore promptly and in good workmanlike manner any building which may be constructed, damaged or destroyed thereon, including, without restricting the generality of the foregoing, damage from termites and dry -rot; to pay when due all claims for labor performed and materials furnished in connection with such property and not to permit any mechanic's lien against such property; to comply with all laws affecting such property or requiring any alterations or improvements to be made thereon; not to initiate or acquiesce in any zoning reclassification without Beneficiary's written consent; not to commit or permit waste thereon; not to commit, suffer or permit any act upon such property in violation of the law; and to paint, cultivate, irrigate, fertilize, fumigate, prune, and do all other acts that from the character or use of said property may be reasonably necessary; to promptly pay all amounts due others upon agreements of lease or conditional sale of all fixtures, furnishings and equipment located thereon. If the loan secured hereby or any part thereof is being obtained or should any additional loan be made hereafter for the purpose of financing rehabilitation improvements on said property, Trustor further agrees, anything in this Deed of Trust to the contrary notwithstanding; (a) to complete the same in accordance with City approved plans and specifications satisfactory to Page 2 of 15 S Fs\Agree: HeckDeed\ 12/29/9 5 RLS 95-779 Beneficiary; (b) to allow Beneficiary to inspect such property at all times during rehabilitation, (c) to replace any work or materials unsatisfactory to Beneficiary within fifteen (15) calendar days after written notice from Beneficiary of such fact, which notice may be given to Trustor by registered or certified mail, sent to his last known address, or by personal service of the same; (d) that work shall not cease on the rehabilitation of such improvements for any reason whatsoever for a period of fifteen (15) calendar days, whether consecutive or not, without the written permission of the Beneficiary; (e) to pay when due all claims of labor and materials furnished in connection with the said rehabilitation and not to permit any claims of lien for said work or material to be filed of record against the property; (f) not to permit any stop notice claims to be presented to Beneficiary. If said property is part of a larger tract upon which improvements will be constructed, Trustor shall make separate contracts and subcontracts for said construction which shall pertain to the said property only and shall keep separate, full and complete records of all work and materials furnished to the said property. Trustee upon presentation to it of an affidavit signed by the Beneficiary setting forth facts showing a default by Trustor under this paragraph, is authorized to accept as true and conclusive all facts and statements therein, and to act thereon hereunder. 2. To provide, and maintain in force at all times with respect to said property, fire and other types of insurance as may be required by Beneficiary. All of such insurance shall have a loss payable endorsement in favor of Beneficiary, shall be for a term and in form, content, amount and in such companies as may be satisfactory to Beneficiary, and the policies therefor shall be delivered to and remain in possession of Beneficiary as further security for the faithful performance of these trusts. At least thirty (30) days prior to the expiration of any insurance policy, a policy or policies renewing or extending such expiring insurance shall be delivered to Beneficiary together with written evidence showing payment of the premium therefor and, in the event any such insurance policy and evidence of the payment of the premium therefor are not so delivered by Trustor to Beneficiary, Trustor by executing this Deed of Trust specifically requests Beneficiary to obtain such insurance and Beneficiary, without obligation to do so, without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof, may obtain such insurance through or from any insurance agency or company acceptable to it, pay the premium thereof, and may add the amount thereof to the indebtedness secured hereby, which amount shall bear a like rate of interest. Beneficiary may furnish to any insurance agency or company, or any other person, any information contained in or extracted from any insurance policy delivered to Beneficiary pursuant hereto and any information concerning the loan secured hereby. Neither Trustee nor Beneficiary shall be responsible for such insurance or for the collection of any insurance monies, or for any insolvency of any insurer or insurance underwriter. In case of insurance loss, Beneficiary is hereby authorized either (a) to settle and adjust any claim under the insurance policies provided for in this document without the consent of the Trustor, or (b) to allow Trustor to agree with the insurance company or companies on the amount to be paid upon the loss. In either case, the Beneficiary is authorized to collect and make receipt of any such insurance money. If Trustor is obligated to restore or replace the damaged or destroyed buildings or improvements under the terms of any lease or leases which are or may be prior to the lien of this Deed of Trust and such damage or destruction does not result in cancellation or termination of such lease, such proceeds, after deducting therefrom any expenses incurred in the collection thereof, shall be used to reimbu_ se the Trustor for the cost of rebuilding or restoring the buildings Page 3 of 15 SF \s\Agree:HeckDeed\ 12/29/9 5 RLS 95-779 or improvements on said premises. In all other cases, such insurance proceeds, at the option of the Beneficiary, shall either be applied in reduction of the indebtedness secured hereby whether due or not, or in such order as Beneficiary may determine, or be held by the Beneficiary and used to reimburse the Trustor for the cost of the rebuilding or restoring the buildings or improvements on said premises. Such buildings and improvements shall be so restored or rebuilt as to be of at least equal value and substantially the same character as prior to the damage or destruction, and shall be in a condition satisfactory to Beneficiary. Such application or release shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. Any and all unexpired insurance shall inure to the benefit of, and pass to the purchaser of, the property conveyed at any Trustee sale held hereunder. 3. To pay: (a) at least ten (10) days before delinquency, all general and special City and County taxes, and all assessments on appurtenant water stock, affecting such property, (b) when done, all special assessments for public improvements, without permitting any improvement bond to issue for any special assessment (c) when done, all encumbrances, charges and lines, with interest, on said property, or any part thereof, which are or appears to be prior to superior hereto, (d) if the security of this Deed of Trust is leasehold estate, to make any payment or do any act required of the Lessee or its successor in interest under the terms of the instrument or instruments creating said leasehold, (e) all costs, fees and expenses of this trust, (0 for any statement regarding the obligation secured hereby any amount demanded by Beneficiary not to exceed the maximum allowed by law thereof at the time when such request is made, (g) such other charges for services rendered by Beneficiary and furnished at Trustor's request or that of any successor in interest to Trustor as the Beneficiary may deem reasonable. If, by the laws of the United States of America, or of any state having jurisdiction over the Trustor, any tax is due or becomes due in respect to the issuance of the Note hereby secured, the Trustor covenants and agrees to pay such tax in the manner required by such law. Should Trustor fail to make any such payment, Beneficiary may elect to make such payment, Beneficiary may elect to make such payment and any amount so paid may be added by Beneficiary to the indebtedness secured hereby and shall bear a like rate of interest. 4. That, should Trustor fail to make any payment or do any act as provided in this Deed of Trust, the Beneficiary or Trustee, but without obligation to do so and without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof, may (a) make or do the same in such manner and to such extent as either may deem necessary to protect the security hereof, Beneficiary or Trustee being authorized to enter upon said property for such purposes, (b) commence, appear in, or defend any action or proceeding purporting to affect the security hereof or the property covered by this Deed of Trust, or the rights or powers of Beneficiary or Trustee, (c) pay, purchase, contest or compromise any encumbrance, charge or lien, which in the judgment of either is or appears to be prior or superior hereto, and (d) in exercising any such powers, pay necessary expenses, employ counsel and pay his reasonable fees. Trustor agrees to repay any amount so expended on demand of Beneficiary, and any amount so expended may be added by Beneficiary to the indebtedness secured hereby and shall bear a like rate of interest. Page 4 of 15 SF\s\Agrec: HcckDccd\ 12/29/95 RLS 95-779 5. To appear in and defend any action or proceeding purporting to affect the security hereof or the property which is covered by this Deed of Trust, or the rights or powers of Beneficiary or Trustee, and whether or not Trustor so appears or defends, to pay all costs and expenses, including cost of evidence of title and attorney's fees in a reasonable sum, in any such action or proceeding in which Beneficiary or Trustee may appear by virtue of being made a party defendant or otherwise irrespective of whether the interest of Beneficiary or Trustee in such property id directly questioned by such action, including any action for the condemnation or partition of said premises, and in any suit brought by Beneficiary to foreclose this Deed of Trust. 6. To pay immediately and without demand, all sums expended under the terms of this Deed of Trust by Beneficiary or Trustee, with interest from the date of expenditure at the rate which the principal obligation secured hereby bears at the time such payment is made, and the repayment of such sums shall be secured hereby. 7. That, should the Trustor or any successor in interest to Trustor in such property drill or extract, or enter into a lease for drilling or extraction of oil, gas or other hydrocarbon substances or any mineral of any kind or character, or sell, convey, further encumber, or alienate said property, or any party thereof, or any interest therein, or be divested of his title or any interest therein in any manner or way, whether voluntarily or involuntarily, Beneficiary shall have the right, at its option, to declare any indebtedness or obligations secured hereby irrespective of the maturity date specified in any Note evidencing the same, immediately due and payable, and no waiver of this right shall be effective unless in writing. 8. That any award, settlement or damages for injury or damages to such property, or in construction with the transaction financed by such loan, and any award of damages in connection with any condemnation for public use of or injury to said property, or any part thereof, is hereby assigned and shall be paid to Beneficiary, who may apply or release such monies received by it in such manner and with the same effect as above provided for the disposition of proceeds of fire or other insurance. 9. That, by accepting payment of any sums secured hereby after its due date, or by making any payment, performing any act on behalf of Trustor, that Trustor was obligated hereunder, but failed, to make, or perform, or by adding any payment so made by Beneficiary to the indebtedness secured hereby, Beneficiary does not waive its right either to require prompt payment when due of all sums so secured or to declare a default for failure so to pay. 10. That at any time, or from time to time, without liability of the Beneficiary or Trustee thereof, and without notice, upon written request of Beneficiary and presentation of this Deed of Trust and any Note secured hereby for endorsement, and without affecting the personal liability of any person for payment of the indebtedness secured hereby, or the lien of the Deed of Trust upon the remainder of said property for the full amount of the indebtedness then or thereafter secured hereby, or the rights or powers of Beneficiary or the Trustee with respect to the remainder of said property, Trustee may: (a) reconvey any part of said property, (b) consent to the making of any map or plat thereof, (c) join in granting any easement thereon, (d) join in any agreement subordinating the lien or charge hereof. Page 5 of 15 SF\s\Agree:HeckDeed\ 12/29/95 RLS 95-779 11. That the lien hereof shall remain in full force and effect during any postponement or extension of time of payment of the indebtedness secured hereby, or any part thereof. 12. That, upon written request of Beneficiary stating that all sums secured hereby have been paid, and upon surrender of this Deed of Trust and said Note or Notes to Trustee for cancellation and retention, and upon payment of its fees, Trustee shall reconvey, without warranty, the property then held hereunder. The recitals in such reconveyance of any matters of fact shall be conclusive of the truthfulness thereof. The grantee in such reconveyance may be described as "the person or persons legally entitled thereto." Such request and reconveyance shall operate as re -assignment of the rents, issues, royalties and profits assigned to Beneficiary. Five (5) years after issuance of such full reconveyance, Trustee may destroy said Note and this Deed of Trust (unless directed in such request to retain them). 13. That as additional security, Trustor irrevocably assigns to Beneficiary the rents, issues, and profits of the property affected by this Trust Deed for the purposes and upon the terms and conditions set forth below. This assignment shall not impose upon Beneficiary any duty to produce rents from the property affected by this Trust Deed, or cause Beneficiary to be (a) "mortgages in possession" for any purpose; (b) responsible for performing any of the obligations of the lessor under any lease; or (c) responsible for any waste committed by lessees or any other parties, for any dangerous or defective condition of the property affected by this Trust Deed, or for any negligence in the management, upkeep, or control of such rights to rents, issues and profits is not contingent upon, and may be exercised without possession of, the property affected by this Trust Deed. Beneficiary confers upon Trustor a license ("License") to collect and retain the rents, issues and profits of the property affected by this Trust Deed as they become due and payable, until the occurrence of a default hereunder. Upon such default, the License shall be automatically revoked and Beneficiary may collect and retain the rents, issues and profits without notice and without taking possessions of the property affected by this Trust Deed. This right to collect rents, issues and profits shall not grant to Beneficiary or Trustee the right to possession, except as otherwise provided herein; and neither said right, nor termination of the License, shall impose upon Beneficiary or Trustee the duty to produce rents, issues or profits or maintain all or any part of the property affected by this Trust Deed. If Trustor shall default as aforesaid, Trustor's right to collect any such money shall cease and Beneficiary shall have the right,. with or without taking possession of the property affected hereby, to collect all rents, issues, royalties and profits and shall be authorized to, and may, without notice and irrespective of whether declaration of default has been delivered to Trustee and without regard to declaration of default has been delivered to Trustee and without regard to the adequacy of the security for the indebtedness secured hereby, either personally or by attorney or agent without bringing any action or proceeding, or by receiver to be appointed by the Court, enter into possession and hold, occupy, possess and enjoy the said property, make cancel, enforce and modify leases, obtain and eject tenants, and set and modify rents and terms of rents, and to sue, and to take, receive and collect all or any part of the said rents, issues, and profits of the property affected hereby, and after paying such costs of maintenance, operation of said property, and of collection including reasonable attorneys' fees, as in its judgment it may deem proper, to apply the balance upon any indebtedness then secured Page 6 of 15 SF\s\Agree: HeckDeed\ 12/29/95 RLS 95-779 hereby, the rents, issues, royalties and profits of said property being hereby assigned to Beneficiary for said purposes. The acceptance of such rents, issues, royalties and profits shall not constitute a waiver of any other right which Trustee or Beneficiary may enjoy under this Deed of Trust or under the laws of California. Failure of or discontinuance by Beneficiary at any time, or from time to time, to collect any such rents, issues, royalties or profits shall not in any manner affect the subsequent enforcement by Beneficiary of the right, power and authority to collect the same. The receipt and application by said Beneficiary of all such rents, issues, royalties and profits pursuant hereto, after execution and delivery of declaration of default and demand for sale as hereinafter provided, or during the pendency of Trustee's sale proceedings hereunder, shall not cure such breach or default not affect said sale proceedings, or any sale made pursuant thereto, but such rents, issues, royalties and profits, less all costs of operation, maintenance, collection and reasonable attorneys' fees, when received by Beneficiary, shall be applied in reduction of the indebtedness secured hereby, from time to time, in such order as Beneficiary may determine. Nothing contained herein, nor the exercise of the right by Beneficiary to collect, shall be, or be construed to be, an affirmation by Beneficiary of any tenancy, lease or option, nor an assumption of liability under, nor subordination of the lien or charge of this Deed of Trust to, any such . tenancy, lease or option. 14. That if the security of this Deed of Trust is a leasehold estate, the Trustor agrees that: (a) the term "Lease" as used herein shall mean the lease creating the "leasehold estate"; (b) Trustor shall not amend, change or modify his leasehold interest, or the Lease, or agree to do so, without the written consent of the Beneficiary; (c) Trustor will promptly advise Beneficiary regarding any notice, request or demand received by him from the lessor under the Lease and promptly furnish Beneficiary with a copy of any such notice, request or demand; (d) as long as any of the indebtedness secured hereby shall remain unpaid, unless the Beneficiary shall otherwise consent thereto in writing, the leasehold estate shall not merge with the fee title but shall always be kept separate and distinct, notwithstanding the union of said estates in any party; (e) Trustor agrees that it will promptly, strictly, and faithfully perform, fulfill, and comply with all covenants, agreements, terms, conditions and provisions under any lease affecting the premises and to neither do anything, nor to permit anything to be done which may cause modification or termination of any such lease or of the obligations of any lessee or person claiming through such lease or the rents provided for therein or the interest of the lessor or the Beneficiary therein or thereunder. Trustor further agrees he will not execute a Deed of Trust or mortgage which may be or become superior to any leasehold estate that is security for this Deed of Trust. In the event of a violation of any of the covenants set forth in this paragraph, Beneficiary shall have the right, at its option, to declare all sums secured hereby immediately due and payable. Consent to or waiver of one of said violations shall not be deemed to be a consent to or waiver or any other violation. If the security for this Deed of Trust is a leasehold estate, the term "property" as used in this Deed of Trust shall be deemed to mean the leasehold estate whenever the context so requires for the protection of the Beneficiary. 15. That upon default by Trustor in payment of any indebtedness secured hereby or in performance of any agreement, and the Promissory Note, if applicable, hereunder, and upon default by Trustor under the terms of any encumbrance, charge or lien which is or appears to be prior or superior hereto, Beneficiary may declare all sums secured hereby immediately due and Page 7 of 15 S Fs\Agree: HeckDeed\ 12/29/9 5 RLS 95-779 payable by delivery to Trustee of written declaration of default and demand for sale of written notice of default and of election to cause to be sold said property, which notice Trustee shall cause to be filed for record. Beneficiary shall also deposit with Trustee this Deed of Trust and any Notes and all documents evidencing expenditures, secured hereby. After the lapse of such time as then may be required by law following recordation of such notice of default, and notice of sale having been given as then required by law, Trustee, without demand on Trustor, shall sell said property at the time and place fixed by it in such notice of sale, whether as a whole or in separate parcels, and in such order as it may determine, at public auction to the highest bidder for case in lawful money of the United States, payable at time of sale. Trustee may postpone sale of all or any portion of said property by public announcement at such time and place of sale, and from time to time thereafter may postpone such sale by public announcement at the time fixed by the preceding postponement. Trustee shall deliver to such purchaser its Deed conveying the property so sold, but without any covenant or warranty, express or implied. The recital in such Deed of any matters of fact shall be conclusive of the truthfulness thereof. Any person, including Trustor, Trustee, or Beneficiary as hereinafter defined, may purchase at such sale. Trustee may also sell at any such sale and as part thereof any shares of corporate stock securing the obligations secured hereby, and Trustor waives demand and notice of such sale. (Beneficiary at its option may also foreclose on such shares by independent pledge sale, and Trustor waives demand and notice of such sale). After deducting all costs, fees and expenses of Trustee, and of this Trust, including cost of evidence of title in connection with this sale, Trustee shall apply the proceeds of sale to payment, first; all sums expended under the terms hereof, not then repaid, with accrued interest at the rate then payable under the Note or Notes secured hereby, and then of all other sums secured hereby, and, if there are any proceeds remaining, shall distribute them to the person or persons legally entitled thereto. 16. To waive, to the fullest extent permissible by law, the right to plead any statute of limitations as a defense to any demand secured hereby. 17. That Beneficiary may, from time to time, by instrument in writing, substitute a successor or successors to any Trustee named herein or acting hereunder, which instrument, executed and acknowledged by Beneficiary and recorded in the office of the recorder of the county or counties where such property is situated, shall be conclusive proof of property substitution of such successor Trustee or Trustees, who shall, without conveyances from the Trustee predecessor, succeed to all its title, estate, rights, powers and duties, including but not limited to the power to reconvey the whole or any part of the property covered by this Deed of Trust. Such instrument must contain the name of the original Trustor, Trustee and Beneficiary hereunder, the book and page where this Deed of Trust is recorded. If notice of default shall have been recorded, this power of substitution cannot be exercised until after the costs, fees and expenses of the then acting Trustee shall have been paid to such Trustee, who shall endorse receipt thereof upon such instrument. The procedures herein provided for substitution of Trustee shall not be exclusive of other provisions for substitution provided by law. 18. That this Deed of Trust applies to, inures to the benefit of, and binds all parties hereto, their heirs, legatees, devisees, administrators, executors, successors and assigns. The term "Beneficiary" shall mean the owner and holder, including pledge, of the Note secured hereby, '• '.�:£_�-;,".` is i , , ...- •�- ,_�: _ _ .. Page 8 of 15 S F\s\Agree: HeckDeed\ 12/29/9 5 RLS 95-779 whether or not named as Beneficiary herein. In this Deed of Trust, whenever the context so requires, the masculine gender includes the feminine and/or neuter, and the singular number includes the plural. 19. That in the event the property secured by this Deed of Trust is income producing property consisting of four units or more, Trustor agrees to file with Beneficiary, annually on January 1, a written operational report. Such operational report shall contain a brief but complete statement of the year's income and expenses of such property, a list of all vacancies, and a statement of any material change in the property or business carried on therein for such period. 20. That in the event of a demand for, and the preparation and delivery of a written statement regarding the obligations secured by this Deed of Trust pursuant to Sections 2943 and 2954 of the Civil Code of California, Beneficiary shall be entitled to make a reasonable charge, not exceeding the maximum amount which is permitted by law at the time the statement is furnished. Beneficiary may also charge Trustor a reasonable fee for any other services rendered to Trustor or rendered in Trustor's behalf in connection with said property of this Deed of Trust, including changing Beneficiary's records pertaining to this Deed of Trust and the loan secured hereby in connection with the transfer of said property, or releasing an existing policy of fire insurance or other casualty insurance held by Beneficiary and replacing the same with another such policy. 21. That Trustee accepts this Trust when this Deed of Trust, duly executed and acknowledged, is made a public record as provided by law. Trustee is not obligated to notify any party hereto of pending sale under any other Deed of Trust or of any action or proceeding in which Trustor, Beneficiary, or Trustee shall be a party unless brought by Trustee. 22. That should this Deed of Trust or any Note secured hereby provide any fee for prepayment of any indebtedness secured hereby, Trustor agrees to pay said fee, if any, of said indebtedness shall be paid prior to the due date thereof stated in said Note or this Deed of Trust even if notwithstanding Trustor shall have defaulted in payment thereof, or in performance of any agreement hereunder, and Beneficiary, by reason thereof, shall have declared all sums secured hereby immediately due and payable. 23. That Trustor has made certain representations and disclosures in order to induce Beneficiary to make the loan evidenced by the Promissory Note or Notes which this Deed of Trust secures, and in the event that Trustor has made any material misrepresentation or failed to disclose any material fact, Beneficiary at its option and without notice, shall have the right to declare the indebtedness secured hereby, irrespective of the maturity date specified in such Note or Notes, immediately due and payable, and on failure to so pay Beneficiary may make a written declaration of default and demand for sale as in paragraph No. 15 herein set forth. Trustee, upon presentation to it of an affidavit signed by Beneficiary setting forth facts showing a default by Trustor under this paragraph, is authorized to accept as true and conclusive all facts and statements therein, and to act thereon hereunder. Page 9 of 15 S F\s\Agree: H eekDee d\ 12 /2 9/9 5 RLS 95-779 Any notice which any party hereto may desire or be required to give to the other party shall be in writing. The mailing thereof must be certified mail addressed to the Trustor at his address hereinabove set forth or to the Beneficiary at his office or at such other place as such parties hereto may designate in writing. THE UNDERSIGNED TRUSTOR REQUESTS that a copy of any notice of default and of any notice of sale hereunder be mailed to him at his address herein before set forth. TRU OR: -r By: Sean �: Heckethorn r Ja quel.kle A. Heckethorn APPROVED AS TO FORM: A nc Counsel / 5 Page 10 of 15 S F\s\Agree: HeckDeed\ 12/29/9 5 RLS 95-779 EXHIBIT A TO AGENCY DEED OF TRUST LEGAL DESCRIPTION A condominium comprised of PARCELI: An undivided one twenty second (1/22) fee simple interest as a tenant in common in and to all of the Common Area defined in Declaration referred to below and described in the Condominium Plan ("Plan") for Lot 1 of Tract No. 14828, which Plan was recorded on August 25, 1994 as Instrument No. 94-0525335 of the Official Records of Orange County, over Lot 1 of Tract No. 14828, in the City of Huntington Beach, County of Orange, State of California, as per map filed in Book 706, Pages 27 to 29 of Miscellaneous Maps, in the office of the County Recorder of said County. Excepting therefrom all oil, petroleum, asphaltum, gas, minerals and other hydrocarbon substances, as reserved in deed recorded August 16, 1921 in Book 401, Page 356 of Deeds, and in various other deeds of record. PARCEL 2: Unit No. 5 consisting of certain airspace and surface elements, as shown and described in the Condominium Plan referred to in Parcel 1 above. PARCEL 3: Non-exclusive easements for access, ingress, egress, use, enjoyment, drainage, encroachment, support, maintenance, repairs and for other purposes, all as described in that certain Declaration of Convenants, Conditions and Restrictions and Reservations of Easements for Pacific Park Villas, recorded August 25, 1994 as Instrument No. 94-0525336 of Official Records. PARCEL 4: Exclusive easements appurtenant to Parcels 1 and 2 referred to above, for balcony or patio purposes, over the areas defined, depicted and assigned on the Plan. Page 1 of 1 SF\s\Agree:HeckDeed \12/29/95 RIDER TO DEED OF TRUST FIRST TIME HOMEBUYER DOWN PAYMENT ASSISTANCE PROGRAM This Deed of Trust is subject to the terms and conditions of that certain Loan Agreement dated January 8th , 1996 (the "Loan Agreement"), pursuant to which Beneficiary has agreed to loan Trustor the sum of Thirty-five Thousand dollars ($35,000) (the "Loan Amount"). All terms in this Rider to Deed of Trust, if not separately defined herein, shall have the meanings as defined in the Loan Agreement. In the event that the Agency Loan becomes due and payable prior to the thirtieth anniversary of the date of this Agreement, Trustor shall pay to Beneficiary concurrent with such sale, transfer or refinancing, an amount equal to the 'Equity Share Amount." The Equity Share Amount shall be determined by applying a percentage factor (the "Applicable Factor") to the difference between the Sales Price and the Purchase Price (defined below) as follows: Prior to fifth anniversary of the Agency Deed of Trust: fifty percent (50%) 2. After fifth anniversary but) prior to sixth anniversary: forty-eight percent (48%) After sixth anniversary but prior to seventh anniversary forty-six percent (46%) 4. After seventh anniversary but prior to eighth anniversary: forty-four percent (44%) After eighth anniversary but prior to ninth anniversary: forty two percent (42%) 6. After ninth anniversary but prior to tenth anniversary: forty percent (40%) 7. After tenth anniversary but prior to eleventh anniversary: thirty-eight percent (38%) 8. After eleventh anniversary but prior to twelfth anniversary: thirty-six percent (36%) 9. After twelfth anniversary but prior to thirteenth anniversary: thirty-four percent (34%) nr-n'a -}• Page 11 of 15 SF\s\Agree:HeckDeed\ 12/29/95 RLS 95-779 10. After thirteenth anniversary but prior to fourteenth anniversary: 11. After fourteenth anniversary but prior to fifteenth anniversary: 12, After fifteenth anniversary but prior to sixteenth anniversary: 13. After sixteenth anniversary but prior to seventeenth anniversary: 14. After seventeenth anniversary but prior to eighteenth anniversary: 15. After eighteenth anniversary but prior to nineteenth anniversary: 16. After nineteenth anniversary but prior to twentieth anniversary: 17. After twentieth anniversary but prior to twenty-first anniversary: 18. After twenty-first anniversary but prior to twenty-second anniversary: 19. After twenty-second anniversary but prior to twenty-third anniversary: 20. After twenty-third anniversary but prior to twenty-fourth anniversary: 21. After twenty-fourth anniversary but prior to twenty-fifth anniversary: 22. After twenty-fifth anniversary but prior to twenty-sixth anniversary: 23. After twenty-sixth anniversary but prior to twenty-seventh anniversary: 24. After twenty-seventh anniversary but prior to twenty-eighth anniversary: Page 12 of 15 thirty-two percent (32%) thirty percent (30%) twenty-eight percent (28%) twenty-six percent (26%) twenty-four percent (24%) twenty-two percent (22%) twenty percent (20%) eighteen percent (18%) sixteen percent (16%) fourteen percent (14%) twelve percent (12%) ten percent (10%) eight percent (8%) six percent (6%) four percent (4%) S FWAgree: HeckDeed\1 2/2 9/9 5 RLS 95-779 25. After twenty-eighth anniversary but prior to twenty-ninth anniversary: two percent (2%) 26. After twenty-ninth anniversary but prior to thirtieth anniversary: one percent (1%) 27. After thirtieth anniversary: zero percent (0%) The "Purchase Price" is the price paid by the Participant to the Seller for Seller's interest in the Property, exclusive of escrow fees, title insurance costs, broker's commissions, loan fees or any other closing or transaction costs. The actual cost to Participant of all capital improvements to the Property made while Participant owned the Property may be added to the Purchase Price if Participant complies with the following: No capital improvements which cost more than two thousand five hundred dollars ($2,500) shall be added to the Purchase Price unless within sixty (60) days following completion of such capital improvements to the Property Participant shall send the following to the Agency: (i) an itemized list of the improvements, (ii) proof of completion of the improvements, and (iii) evidence of the cost of the improvements. The costs incurred by the Participant for capital improvements which cost less than two thousand five hundred dollars ($2,500) shall be added to the Purchase Price upon Participant's submission of evidence of such costs to the Agency, in a form reasonably satisfactory to the Agency, prior to the due date of the Agency Loan. The "Sales Price" is the price paid by the Buyer of the Property to Trustor for Trustor's interest in the Property, exclusive of escrow fees, title insurance costs, broker's commissions, loan fees or any other closing or transaction costs. The percentage factor so determined is the "Applicable Factor." If the Property is sold, an amount equal to the Applicable Factor multiplied by the difference between (i) the original Property purchase price and (ii) the amount received by Trustor as the Property sale price (as reduced by costs of sale paid by the Trustor) shall constitute the Equity Share Amount. If the Property is transferred or the lien of this Deed of trust or any lien to which this Deed of Trust is subordinate is refinanced for a loan amount which is in excess of the then current loan balance or extends the amortization period of the loan secured by such prior lien. Beneficiary shall appoint a certified, independent appraiser to conduct an appraisal of the Property and Trustor agrees that in such event the Equity Share Amount shall be the Applicable Factor multiplied by the difference between (i) the original Property purchase price and (ii) the appraised value of the M Page 13 of 15 S Rs\Agree: HeckDeed\ 12/29/95 RLS 95-779 Property as of the time of such transfer or refinancing. Dated: January 8, 1996 APPROVED AS TO FORM: Ag cy Attorney Page 14 of 15 TRU TOR / Sean A. Heckethorn iaccq isle—, �uelif e A. Heckethorn yN SF\s\Agree: HeckDeed\ 12/29/95 RLS 95-779 RIDER TO DEED OF TRUST SUPERIORITY OF FIRST LENDER DOCUMENTS (if required by the First Lender) This Deed of Trust is subject to the terms and conditions of that certain Loan Agreement dated January 8th , 1996 (the "Loan Agreement"), pursuant to which Beneficiary has agreed to loan Trustor the sum of Thirty-five Thousand dollars ($35,000) (the "Loan Amount"). All terms in this Rider to Deed of Trust, if not separately defined herein, shall have the meanings as defined in the Loan Agreement. Notwithstanding any provision herein, this Deed of Trust shall not diminish or affect the rights of the First Lender under the deed of trust executed by Trustor in favor of the First Lender as security for the First Lender Note, or any subsequent First Lender deeds of trust hereafter recorded against the property described herein. Notwithstanding any provision in this Deed of Trust to the contrary, all of the provisions of this Deed of Trust shall terminate and have no further force and effect upon the occurrence of one of the following. events: 1) Title is acquired by the First Lender or another party upon foreclosure of a deed of trust by the First Lender. 2) Title is acquired by the First Lender or another party by a deed in lieu of foreclosure of the First Lender deed of trust. Dated: �� �`� TR STO Sean Hckethorn 1 quelime A. eckethorn YPIJ APPROVED AS TO FORM: AA cy Att ney �r Page 15 of 15 SF\s\Agree:HeckDeed\ 12/29/95 RLS 95-779 STATE OF CALIFORNIA COUNTY OF ORANGE On JANUARY 24, 1996 I SS. before me, the undersigned, personally appeared SEAN � HECKETHORN AND JACQUELYN A. HECKETHORN personally known to me (or 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. WITNESS my hand and official seal. Signatures LINDA J CAMPBELL (This area for official notarial seal) IIIlfllltlltiiitflfiiflltllittiillitili OPTIONAL Though the data below are not required by law, they may prove valuable to persons relying on the document and could prevent the fraudulent reattachment of this form. Capacity Claimed By Signer gi Individual ❑ Corporate Officer Titles(s) ❑ Partner(s) ❑ Attorney -in -Fact ❑ Trustee(s) , ❑ Guardian/Conservator ❑ Other: Signer Is Representing: Name of Person(s) or Entity(les) ❑ Limited ❑ General Description of Attached Document DEED OF TRUST WITH ASSIGNMENT OF RENTS Title or Type of Document Number of Pages Date of Document Signer(s) Other Than Named Above 2000 MAIN STREET OFFICE OF THE CITY CLERK CONNIE BROCKWAY CITY CLERK DEED CERTIFICATION CALI FORNIA 92648 This is to certify that the interest in real property conveyed by the Deed of Trust with Assignment of Rents dated January 8, 1996 from Sean A. Heckethorn and Jacqueline A. Heckethorn, to the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic, is hereby accepted by the undersigned officer or agent on behalf of the Agency pursuant to the authority conferred by Resolution No. 76 of the Agency and the grantee consents to the recordation thereof by its duly authorized officer. Dated: January 26, 1996 REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH CONNIE BROCKWAY, CMC CLERK By: ,= Deputy Clerk g:lfoll owup\deedeert (Telephone: 714-536-5227 ) LOAN AGREEMENT THIS LOAN AGREEMENT (the "Agreement") is made this 8th day of January , 1996 by and between SEAN �. �KETHORN and JACQUEIsII+�'E.� A. HECKETHORN ("Participant") and the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic (the "Agency"). RECITALS A. Participant has entered into an agreement (the "Purchase Agreement") to purchase that certain real property commonly known as 7871 Happy Drive, 9102 , Huntington Beach, California 92648, and more particularly described in Exhibit A attached hereto and incorporated herein (the "Property"). B. Participant requires assistance to purchase the Property and would not be able to purchase the Property without such assistance. Participant is a person or family of low or moderate income and currently earns less than 120% of the current annual median income for the Orange County area, as those terms are defined by California Health and Safety Code Section 50093. C. Participant has represented to the Agency that Participant and Participant's immediate family intend to reside in the Property at all times throughout the term of this Agreement. D. The Agency desires to assist persons of low and moderate income to purchase residential property to increase, improve, and preserve low and moderate income housing available at an affordable housing cost within the City of Huntington Beach (the "City"). E. The Agency wishes to lend, and Participant wishes to borrow, Program funds to assist Participant to purchase the Property upon the terms and conditions set forth herein. NOW, THEREFORE, for good and valuable consideration the parties agree as follows: 1. Agency. The Agency shall loan to Participant (the "Agency Loan") the amount of Thirty --five Thousand Dollars ($35,000.00) subject to the conditions and restrictions set forth herein and those set forth in the Promissory Note and the Disclosure Statement for the Program. The Agency Loan shall be paid to the seller of the Property (the "Seller") by the Agency through deposit of the Agency Loan proceeds into escrow with Tiempo Escrow (the "Escrow Agent") (Escrow No. 8791—C ). The Agency shall direct the Escrow Agent to apply the proceeds of the Agency Loan on behalf of Participant to the purchase price of the Property, and, at Participant's election, to the costs of closing, escrow fees, recording fees, loan points and fees, and/or document fees. At such time, Participant shall execute and deliver to the Agency a promissory note in favor of the Agency as holder, in the amount of the Agency Loan, with simple interest at five percent (5%) per annum, Loan Agreement Pagel of 8 S F\s\Agre e: H eckl o an\ 12 RLS 95-779 due in thirty (30) years and payable upon the earlier sale, refinancing or transfer of the Property, substantially in the form of the "Promissory Note" attached hereto as Exhibit B and incorporated herein. Participant shall also execute and deliver to the Agency a second deed of trust encumbering the Property which shall secure the Promissory Note (the "Agency Deed of Trust"), in the form of Exhibit C attached hereto and incorporated herein. 2. Maintenance of Property. Participant shall maintain the improvements on the property in a manner consistent with community standards and in a manner which will uphold the value of the Property, and shall keep the Property free from any accumulation of debris and waste materials. Participant 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 comply with all applicable federal, state and local laws. 3. Due on Sale, Transfer or Refinancing. Participant agrees to notify the Agency not less than thirty (30) days prior to (i) the sale or transfer of the Property or (ii) any refinancing of the lien of the Agency Deed of Trust or any lien to which the lien of the Agency Deed of Trust is subordinate (the "First Mortgage"). The Agency Loan and all interest accrued thereon shall be due and payable upon (i) such sale or transfer, (ii) the refinancing of the First Mortgage for a loan amount in excess of the then current loan balance or for an amortization period longer than the loan secured by the First Mortgage, or (iii) Participant is no longer an occupant of the Property pursuant to Section 5 of this Agreement or is in material default of any other obligation pursuant to this Agreement. At the request of Participant, the Agency may, in its sole discretion, waive the requirements of this Section 3 and extend the term of the Agency Loan. 4. Equity Sharing. In the event that the Agency Loan becomes due and payable prior to the thirtieth anniversary of the date of this Agreement, Participant shall pay to Agency concurrently with such sale, transfer or refinancing, an amount equal to the "Equity Share Amount." The Equity Share Amount shall be determined by applying a percentage factor (the "Applicable Factor") to the difference between the Sales Price and the Purchase Price (defined below) as follows: Prior to fifth anniversary of the Agency Deed of Trust: 2. After fifth anniversary but prior to sixth anniversary: 3. After sixth anniversary but prior to seventh anniversary 4. After seventh anniversary but prior to eighth anniversary: Loan Agreement Page 2 of 8 fifty percent (50%) forty-eight percent (48%) forty-six percent (46%) forty-four percent (44%) S Rs\Agree: H eckloan\ 12 RLS 95-779 5. After eighth anniversary but prior to ninth anniversary: forty two percent (42%) 6. After ninth anniversary but prior to tenth anniversary: forty percent (40%) 7. After tenth anniversary but prior to eleventh anniversary: thirty-eight percent (38%) 8. After eleventh anniversary but prior to twelfth anniversary: thirty-six percent (36%) 9. After twelfth anniversary but prior to thirteenth anniversary: thirty-four percent (34%) 10. After thirteenth anniversary but prior to fourteenth anniversary: thirty-two percent (32%) 11. After fourteenth anniversary but prior to fifteenth anniversary: thirty percent (30%) 12. After fifteenth anniversary but prior to sixteenth anniversary: twenty-eight percent (28%) 13. After sixteenth anniversary but prior to seventeenth anniversary: twenty-six percent (26%) 14. After seventeenth anniversary but prior to eighteenth anniversary: twenty-four percent (24%) 15. After eighteenth anniversary but prior to nineteenth anniversary: twenty-two percent (22%) 16. After nineteenth anniversary but prior to twentieth anniversary: twenty percent (20%) 17. After twentieth anniversary but prior to twenty-first anniversary: eighteen percent (18%) 18. After twenty-first anniversary but prior to twenty-second anniversary: sixteen percent (16%) 19. After twenty-second anniversary but prior to twenty-third anniversary: fourteen percent (14%) Loan Agreement Page 3 of 8 S F\s\Agree: Heckloan\ 12 RLS 95-779 20. After twenty-third anniversary but prior to twenty-fourth anniversary: twelve percent (12%) 21. After twenty-fourth anniversary but prior to twenty-fifth anniversary: ten percent (10%) 22. After twenty-fifth anniversary but prior to twenty-sixth anniversary: eight percent (8%) 23. After twenty-sixth anniversary but prior to twenty-seventh anniversary: six percent (6%) 24. After twenty-seventh anniversary but prior to twenty-eighth anniversary: four percent (4%) 25. After twenty-eighth anniversary but prior to twenty-ninth anniversary: two percent (2%) 26. After twenty-ninth anniversary but prior to thirtieth anniversary: one percent (1%) 27. After thirtieth anniversary: zero percent (0%) The "Purchase Price" is the price paid by the Participant to the Seller for Seller's interest in the Property, exclusive of escrow fees, title insurance costs, broker's commissions, loan fees or any other closing or transaction costs. The actual cost to Participant of all capital improvements to the Property made while Participant owned the Property may be added to the Purchase Price if Participant complies with the following: No capital improvements which cost more than two thousand five hundred dollars ($2,500) shall be added to the Purchase Price unless within sixty (60) days following completion of such capital improvements to the Property Participant shall send the following to the Agency: (i) an itemized list of the improvements, (ii) proof of completion of the improvements, and (iii) evidence of the cost of the improvements. The costs incurred by the Participant for capital improvements which cost less than two thousand five hundred dollars ($2,500) shall be added to the Purchase Price upon Participant's submission of evidence of such costs to the Agency, in a form reasonably satisfactory to the Agency, prior to the due date of the Agency Loan. The "Sales Price" is the price paid by the Buyer of the Property to Participant for Participant's interest in the Property, exclusive of escrow fees, title insurance costs, broker's commissions, loan fees or any other closing or transaction costs. Loan Agreement Page 4 of 8 SFrs\Agree:Heckloan\ 12 RLS 95-779 A. Equity Share Upon Sale or Transfer. The Equity Share Amount shall be payable to the Agency upon sale or transfer of the Property to a person or persons (the "Buyer") whose income exceeds 120% of the current annual median income for the Orange County area. If the Buyer does not submit an income verification statement to the Agency, the Buyer shall be deemed to exceed such income limit. If the Buyer does not exceed the aforesaid income limit, the Equity Share Amount shall not become payable. B. Equity Share Upon Refinancing or Failure to Occupy. The Equity Share Amount shall be payable to the Agency upon a refinancing, failure to occupy the Property or material breach of any other provision of this Agreement which causes the Agency Loan to become due and payable. The Sales Price for purposes of determining the Equity Share Amount shall be determined by an appraisal of the Property. The Agency shall appoint a certified, independent, appraiser to conduct an appraisal of the Property, at Participant's expense, and Participant agrees that in such event the Equity Share Amount shall be the Applicable Factor multiplied by the difference between the Purchase Price and the appraised value of the Property as of the time of such refinancing. This Agreement shall be terminated upon the Participant's repayment of the Agency Loan and payment of the Equity Share Amount as provided in this Agreement. C. Expiration of Equity Share Obligation. In the event the Participant does not sell or transfer the Property, does not fail to occupy the Property, does not refinance, or is not in material breach of any other provision of this Agreement before the Thirtieth anniversary of the date of this Agreement, the Participant shall have no obligation to pay the Equity Share Amount to Agency upon any later sale, transfer or refinancing. 5. Occupancy Standards. The Property shall be used as the personal residence of Participant and Participant's immediate family and for no other purpose. Participant shall not enter into an agreement for the rental or lease of the Property. 6. Income Information. Participant has submitted an eligibility verification form to the Agency prior to execution of this Agreement. Participant represents and warrants to the Agency that all information Participant has provided and will provide in the future is and will be true, correct and complete. Participant acknowledges that the Agency is relying upon - Participant's representations that Participant's income does not exceed 120% of the area median income and would not have entered this Agreement if Participant's income exceeded 120% of the area median income. 7. Loan Servicing. The Agency may. contract with a private lender to originate and service the Agency Loan. 8. Participant Financing. Participant shall obtain financing for the purchase of the Property from the Southern California Home Financing Authority or a reputable institutional lender approved by the Agency (the "Lender"). The lien secured by the Agency Deed of Trust shall only be subordinated to a first lien on the Property held by the Lender or Lender's assigns. Loan Agreement Page 5 of 8 SF\s\Ag ee:Heckloan112 RLS 95-779 In addition, not less than three percent (3%) of the Purchase Price of the Property shall be paid in cash from Participant's own resources and not from the proceeds of a loan. 9. Covenants. Participant and the Agency shall execute and have recorded in the Official Records of Orange County, California, a "Declaration of Conditions, Covenants and Restrictions for Property," substantially in the form of Exhibit D attached hereto and incorporated herein, in which Participant agrees that the Property shall only be owned by Participant or other persons or families of low or moderate income available at an affordable housing cost, as those terms are defined in California Health & Safety Code Sections 50093 and 50052.5, and that Participant shall not discriminate against any person or group of persons on the basis of race, color, religion, sex, marital status, national origin or ancestry. Such convenants shall run with the land, in favor of the Agency and the City. 10. Non -Waiver. Failure to exercise any right the Agency may have or be entitled to, in the event of default hereunder, shall not constitute a waiver of such right or any other right in the event of a subsequent default. 11. Indemnification. The Participant shall defend, indemnify and hold harmless the Agency and the City of Huntington Beach and their respective officers, agents, employees, representatives and volunteers from and against any loss, liability, claim or judgment relating in any manner to the Property or this Agreement. The Participant shall remain fully obligated for the payment of property taxes and assessments related to the Property. There shall be no reduction in taxes for Participant, nor any transfer of responsibility to the Agency or the City to make such payments, by virtue of the Agency Loan. 12. Defaults. Failure or delay by either party to perform any term or provision of this Agreement which is not cured within thirty (30) days after receipt of notice from the other party constitutes a default under this Agreement; provided, however, if such default is of the nature requiring more than thirty (30) days to cure, the defaulting party shall avoid default hereunder by commencing to cure within such thirty (30) day period and thereafter diligently pursuing such cure to completion. 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 with diligence. The injured party shall give written notice of default to the party in default, specifying the default complained of by the injured party. Except as required go protect against further damages, the injured party may not institute proceedings against the party in default until thirty (30) days after giving such notice. Failure or delay in giving such notice shall not constitute a waiver of any default, nor shall it change the time of default. 13. Documents. Participant is aware that the Agency has prepared certain documents to implement the Program and secure repayment of the Agency Loan. Participant has reviewed and agrees to execute the following documents prior to receiving the Agency Loan: Loan Agreement Page 6 of 8 SF\s\Agree:Heckloan\ 12 RLS 95-779 (a) Disclosure Statement; (b) Promissory Note; (c) Agency Deed of Trust; and (d) Declaration of Conditions, Covenants and Restrictions of Property. Participant agrees and acknowledges that the Agency Deed of Trust and the Declaration of Conditions, Covenants and Restrictions of Property shall be recorded with the County Recorder of the County of Orange and shall appear of record with respect to and as encumbrances to the Property. 14. Further Assurances. The Participant shall execute any further documents consistent with the terms of this Agreement, including documents in recordable form, as the Agency shall from time to time find necessary or appropriate to effectuate its purposes in entering into this Agreement and making the Agency Loan. 15. Governing Law. This Agreement shall be governed by the laws of the State of California. Any legal action brought under this Agreement must be instituted in the Superior Court of the County of Orange, State of California, in an appropriate municipal court in that county, or in the Federal District Court in the Central District of California. 16. Amendment of Agreement. No modification, rescission, waiver, release or amendment of any provision of this Agreement shall be made except by a written agreement executed by the Participant and Agency. 17. Agency May Assign. Agency may, at its option, assign its right to receive repayment of the loan proceeds without obtaining the consent of the Participant. 18. Participant Assignment Prohibited. In no event shall Participant assign or transfer any portion of this Agreement without the prior express written consent of the Agency, which consent may be given or withheld in the Agency's sole discretion. No assumption of the Agency Loan shall be permitted at any time. This section shall not prohibit the Agency's right to assign all or any portion of its rights to the loan proceeds hereunder. 19. Entire Agreement. This Agreement constitutes the entire understanding and agreement of the parties. This Agreement integrates all of the terms and conditions mentioned herein or incidental thereto, and supersedes all prior negotiations, discussions and previous Loan Agreement Page 7 of 8 S F\s\Agee: H eckloan\ 12 RLS 95-779 agreements between the Agency and the Participant concerning all or any part of the subject matter of this Agreement. IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year written below. Date: )rnvaoo"� C6 19 -16 Date: 19 Date: l —" / r , 19�& ATTEST: Agency Clerk LM Printed Name: Sean A. Heckethorn By:(2/,- Printed Name: Jac uel' A. Heckethorn THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic l By: Lz- . Chairman / j,F-1,6 APPROVED AS TO FORM: Agency bunsel 9>0 INITIATED AND APPROVED: C� Direc or of Econo c Development Loan Agreement Page 8 of 8 S F\s\Agree: Heckloan\ 12 RLS 95-779 M EXHIBIT A LEGAL DESCRIPTION OF PROPERTY A condominium comprised of: PARCELI: An undivided one twenty second (1/22) fee simple interest as a tenant in common in and to all of the Common Area defined in Declaration referred to below and described in the Condominium Plan ("Plan") for Lot 1 of Tract No. 14828, which Plan was recorded on August 25, 1994 as Instrument No. 94-0525335 of the Official Records of Orange County, over Lot 1 of Tract No. 14828, in the City of Huntington Beach, County of Orange, State of California, as per map filed in Book 706, Pages 27 to 29 of Miscellaneous Maps, in the office of the County Recorder of said County. Excepting therefrom all oil, petroleum, asphaltum, gas, minerals and other hydrocarbon substances, as reserved in deed recorded August 16, 1921 in Book 401, Page 356 of Deeds, and in various other deeds of record. PARCEL 2: Unit No. 5 consisting of certain airspace and surface elements, as shown and described in the Condominium Plan referred to in Parcel 1 above. PARCEL 3: Non-exclusive easements for access, ingress, egress, use, enjoyment, drainage, encroachment, support, maintenance, repairs and for other purposes, all as described in that certain Declaration of Convenants, Conditions and Restrictions and Reservations of Easements for Pacific Park Villas, recorded August 25, 1994 as Instrument No. 94-0525336 of Official Records. PARCEL 4: Exclusive easements appurtenant to Parcels 1 and 2 referred to above, for balcony or patio purposes, over the areas defined, depicted and assigned on the Plan. Exhibit A to Loan Agreement Page 1 of 1 4\s\Agree:Heck1oan .:11,1198:? PROMISSORY NOTE $ 35,000.00 January 8th 51996 Huntington Beach, California FOR VALUE RECEIVED, the undersigned ("Maker") promises to pay to The Redevelopment Agency of the City of Huntington Beach ("Holder") at 2000 Main Street, P.O. Box 190, Huntington Beach, California 92648, or at such other address as Holder may direct from time to time in writing, Thirty-five Thousand Dollars ($35,000.00) (the "Note Amount") together with interest thereon at the rate set forth herein. All sums hereunder shall be payable in lawful money of the United States of America and all sums shall be credited first to interest then due and the balance to principal. Interest Rate Simple interest shall accrue on the Note Amount at a rate of five percent (5.00%) per annum. If the fair market value of the Property does not increase at least five percent (5.00%) per annum, the accrued interest on the Note Amount shall be forgiven by the Holder. 2. Maturity Date The balance of all unpaid principal and accrued interest shall be due and payable on January 8th , 2026 (thirtieth (30th) anniversary date of this Promissory Note). Acceleration The whole of the Note Amount plus accrued interest and all other payments due hereunder shall become due and be immediately payable to the Holder by the Maker upon the occurrence of any one of the following events: (a) Maker sells or otherwise transfers title to the Property-, or (b) Maker refinances any lien or encumbrance to which the Agency Deed of Trust is subordinate for a loan amount which is in excess of the then current loan balance of such prior lien or extends the amortization period of the loan secured by such prior lien; or (c) Maker fails to occupy the Property or to perform any obligation under the Agreement (as hereinafter defined). "Exhibit B" to Loan Agreement Pagel of 3 SF\s\Agree:Heckprom\ 12/29i 95 RLS 95-779 4. Security for Note This Promissory Note shall be secured by a second deed of trust encumbering the Property (the "Agency Deed of Trust"), executed by Maker as Trustor in favor of Holder as Trustee. Prepayment of Note Amount Maker may prepay to Holder the full Note Amount, together with simple interest thereon at a rate of five percent (5.00%) per annum, at any time prior to the due date of the Note Amount. 6. Loan Agreement This Promissory Note is made and delivered pursuant to and in implementation of Loan Agreement entered by and between the Holder and the Maker dated January 8th , 1996 (the "Agreement"), a copy of which is on file as a public record with the Holder and is incorporated herein by reference. The Maker acknowledges that but for the execution of this Promissory Note, the Holder would not enter into the Agreement or make the loan contemplated therein. Unless definitions of terms have been expressly set out at length herein, each term shall have the same definition as set forth in the Agreement. 7. Holder May Assign Holder may, at its option, assign its right to receive payment under this Promissory Note without necessity of obtaining the consent of the Maker. Maker Assignment Prohibited In no event shall Maker assign or transfer any portion of this Agreement without the prior express written consent of the Holder, which consent may be given or withheld in the Holder's sole discretion. Likewise, no assumption of the Agency Loan shall be permitted at any time. This Section shall not prohibit the Holder's right to assign all or any portion of its rights to the loan proceeds hereunder. 9. Attorneys' Fees and Costs In the event that any action is instituted to enforce payment under this Promissory Note, the Maker promises to pay such sums as a court may fix for court costs and reasonable attorneys' fees. 10. Non -Waiver Failure or delay in giving any notice required hereunder shall not constitute a waiver of any default or late payment, nor shall it change the time for any default or payment. "Exhibit B" to Loan Agreement Page 2 of 3 SF\s\Agree:Heckprom\ 12/29/95 RLS 95-779 11. Successors Bound This Promissory Note shall be binding upon the parties hereto and their respective heirs, successors and assigns. By: - Printed Name: Sean Heckethorn By: Printed Name: Jacqueline A. Heckethorn "Exhibit B" to Loan Agreement Page 3 of 3 SFIs\Agree:Heckprom\ 12/29/95 RLS 95-779 PLEASE COMPLETE THIS INFORMATION RECORDING REQUESTED BY: :®ntinental Lawyers Title Company AND WHEN RECORDED MAIL TO: C o f� i-i� �z11 Geac� �ooU a.�n S of Recorded in the County of orange, California Gary L. Granville, IIle34/Recorder IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII NIP �OP� R 1 /3R/9s 19960044997 005 178903 11 12 IB45 D02 10 7.00 27.00 0.00 0.00 0.00 0.00 r i- Continental Lawyers Title Company zf Subsidiary of LauyeirsTidejnsUrance Corporation THIS PAGE ADDED TO PROVIDE ADEQUATE SPACE FOR RECORDING INFORMATION (Additional recording fee applies) 61W 11 /92 RECf'jPOiN) nEQUESTc'J �YT C, t4 T iP'cWTA1. LYOVYYRS TITLE DECLARATION OF CONDITIONS, COVENANTS AND RESTRICTIONS FOR PROPERTY RECORDING REQUESTED BY ) V MAIL TO AND WHEN RECORDED : ) i ) REDEVELOPMENT AGENCY OF THE ) !� CITY OF HUNTINGTON BEACH ) 2000 MAIN STREET ) HUNTINGTON BEACH, CA 92648 ) ATTN: AGENCY CLERK ) ) (Space above for Recorder's use.) NJ THIS DECLARATION OF CONDITIONS, COVENANTS AND RESTRICTIONS FOR PROPERTY (the "Declaration") is made by and between SEAN�f HECKETHORN and JACQUELII4W. HECKETHORN (the "Covenantor") and THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic (the "Agency" or "Covenantee") as of the date set forth below. RECITALS A. Covenantor and the Agency have entered into a certain Loan Agreement dated January 8th , 1996, (the "Agreement," a copy of which is on file with the Agency at its offices and is a public record) pursuant to which the Covenantor has agreed to subject certain real property (referred to in the Agreement and referred to herein as the "Property") described in the "Legal Description of the Property" (which is attached hereto as Exhibit "A" and incorporated herein by this reference) to certain covenants, conditions and restrictions. B. The Community Redevelopment Law (California Health and Safety Code § 33000 et seq.) provides that a redevelopment agency shall establish covenants running with the land in furtherance of redevelopment plans. NOW, THEREFORE, the parties hereto agree and covenant as follows: Page 1 of 9 S F\s\Agree: Hecdeclar\ 12/29/95 1. Affordability Covenants. Covenantor agrees for itself, and its successors and assigns, and every successor to Covenantor's interest in the Property, or any part thereof that for thirty (30) years from the date of recording of the Deed of Trust in favor of the Agency regarding the Property (the "Expiration Date"): (a) The Property shall only be owned and occupied by Convenantor or by other persons or families of "Moderate Income." "Moderate Income" shall mean persons or families earning One Hundred Twenty Percent (120%) or less of Orange County median income, adjusted for appropriate family size. (b) The Property shall be kept available at Affordable Housing Cost (as defined below) to the Covenantor or other persons or families of moderate income. Affordable Housing Cost shall mean, as to each person or family of low or moderate income, that purchase price which would result in monthly housing payments which do not exceed an amount under any currently prevailing conventional home mortgage lending rates applied by any reputable institutional home mortgage lender, or the lending rates of any government -subsidized or special mortgage program for which such person or family qualifies and has obtained a first trust deed loan, which do not exceed thirty-five percent (35%) of One Hundred Ten Percent (110%) of the Orange County monthly median income for those persons and families of moderate income (as determined by the United States Department of Housing and Urban Development) earning between Eighty Percent (80%) and One Hundred Ten Percent (110%) of the Orange County monthly median income, and Thirty -Five Percent (35%) of the monthly median income of any person or family of moderate income which earns more than One Hundred Ten Percent (110%) and not more than One Hundred Twenty Percent (120%) of the Orange County median income. (c) The covenant contained in this Section 1 shall run with the land and shall automatically terminate and be of no further force or effect upon the Expiration Date. 2. Transfer of Property. No transfer of the Property shall occur until the Agency determines (a) that the proposed purchaser intends to occupy the Property as the proposed purchaser's principal residence, (b) that the proposed purchaser is a person or family of moderate income and (c) that the proposed transfer occurs at an Affordable Housing Cost. The Agency shall not be obligated to approve a transfer until and unless the proposed purchaser has submitted to the Agency such information and completed such forms as the Agency shall request to certify the proposed purchaser's intent with respect to its residency of the Property and its gross income, and the proposed purchaser has submitted an affidavit disclosing and certifying the amount of the proposed purchase price. Prior to conveyance of the Property, each approved purchaser shall submit to the Agency an executed disclosure statement which certifies that the purchaser is aware that the purchaser buying may only sell the unit at an Affordable Housing Cost to a moderate income person or family, that the maximum permitted sales price may be less than fair market value and that the unit must be owner -occupied at all times and cannot be rented or leased. Covenantor shall cooperate with the Agency in providing such forms to proposed purchasers and in assisting proposed purchasers to prepare such forms and to provide any required information to the Agency in connection with the Covenantor's original sale of the Affordable Unit, provided that 011 �z ., � P_Ag ,cement Page 2 of 9 SF\s\Agree:Hecdeclar\ 12/29/95 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 UNDERSTANDS THAT THE DETERMINATION OF THE AFFORDABLE HOUSING COST CAN BE MADE ONLY AT THE TIME OF THE PROPOSED TRANSFER, TAKING INTO CONSIDERATION INTEREST RATES, THE TERMS OF SALE OFFERED TO AND THE ECONOMIC CIRCUMSTANCES OF THE PROPOSED PURCHASER AND OTHER FACTORS THAT CANNOT BE ACCURATELY PREDICTED, AND THAT THE TRANSFER PRICE PERMITTED HEREUNDER MAY BE LESS THAN THE FAIR MARKET VALUE OF THE PROPERTY AND MAY NOT INCREASE OR DECREASE IN THE SAME MANNER AS OTHER SIMILAR REAL PROPERTY WHICH IS NOT ENCUMBERED BY THIS RESTRICTION. 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 AGENCY AND THIS DECLARATION IS TO PROVIDE HOUSING TO ELIGIBLE PERSONS OR FAMILIES AT AN AFFORDABLE HOUSING COST. C erian tor Initi� The covenant contained in this Section 2 shall run with the land and shall automatically terminate and be of no further force or effect upon the Expiration Date. 3. 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, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the Property, 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, lessees, subtenants, sublessees, or vendees in the Property. Covenantor and its successors and assigns, shall refrain from restricting the rental or lease (if permitted by Covenantor) or sale of the property on the basis of race, color, religion, sex, marital status, national origin or ancestry of any person. All such deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or non segregation clauses: (a) In deeds: "The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, 1,bxh;h;r D� +A i.n Agre-.ement Page 3 of 9 S F s`Agree:Hecdeclar\ 12/29/95 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. IN WITNESS WHEREOF, the Covenantee and Covenantor have caused this instrument to be executed on their behalf by their respective officers hereunto duly authorized, this 8th day of January , 1996. d APPROVED AS TO FORM: Agen cy Counsel 1_3.9` g y SFs\Agree:Hecdec1ar\12/29/95 Page 5 of 9 STATE OF CALIFORNIA ss COUNTY OF On , before me, (name, title, e.g., "Jane Doe, Notary Public"), personally appeared Sean A. Heckethorn and Jacqueline A. Heckethorn (name(s) of signer(s)), personally known to be -- OR -- 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. Witness my hand and official seal. CAPACITY CLAIMED BY SIGNER: Individual Corporate Officer(s): Partner(s): Limited - Attorney -in -Fact Trustee(s) Guardian/Conservator Other SIGNER IS REPRESENTING: Name of Person(s) or Entity(ies) Title(s) General (Signature of Notary) ATTENTION NOTARY: Although the information requested below is OPTIONAL, IT COULD PREVENT FRAUDULENT ATTACHMENT OF THIS CERTIFICATE TO ANOTHER DOCUMENT. THIS CERTIFICATE MUST BE ATTACHED TO THE DOCUMENT DESCRIBED AT RIGHT: Title or Type of Document Number of Pages Date of Document Signer(s) Other Than Named Above: wAgreement Page 6 of 9 S F\s\Agre e: Hecdeclar\01 /09/96 STATE OF CALIFORNIA ss COUNTY OF On , before me, (name, title, e.g., "Jane Doe, Notary Public"), personally appeared (name(s) of signer(s)), personally known to be -- OR -- 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. Witness my hand and official seal. (Signature of Notary) CAPACITY CLAIMED BY SIGNER: Individual Corporate Officer(s): Title(s) Partner(s): Limited General Attorney -in -Fact Trustee(s) Guardian/Conservator Other SIGNER IS REPRESENTING: Name of Person(s) or Entity(ies) ATTENTION NOTARY: Although the information requested below is OPTIONAL, IT COULD PREVENT FRAUDULENT ATTACHMENT OF THIS CERTIFICATE TO ANOTHER DOCUMENT. THIS CERTIFICATE MUST BE ATTACHED TO THE DOCUMENT DESCRIBED AT RIGHT: Title or Type of Document Number of Pages Date of Document Signer(s) Other Than Named Above: " Fle31t Page 7 of 9 SF\s\Agree:Hecdec1ar\01 /09/96 STATE OF CALIFORNIA COUNTY OF On personally appeared ss before me, (name, title, e.g., "Jane Doe, Notary Public"), (name(s) of signer(s)), personally known to be -- OR -- 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. Witness my hand and official seal. (Signature of Notary) CAPACITY CLAIMED BY SIGNER: Individual Corporate Officer(s): Title(s) Partner(s): Limited General Attorney -in -Fact Trustee(s) Guardian/Conservator Other SIGNER IS REPRESENTING: Name of Person(s) or Entity(ies) ATTENTION NOTARY: Although the information requested below is OPTIONAL, IT COULD PREVENT FRAUDULENT ATTACHMENT OF THIS CERTIFICATE TO ANOTHER DOCUMENT. THIS CERTIFICATE MUST BE ATTACHED TO THE DOCUMENT DESCRIBED AT RIGHT: Title or Type of Document Number of Pages Date of Document Signer(s) Other Than Named Above: ` n--Ag�emen t Page 8 of 9 S F\s\Agree:Hecdeclar\01/09/96 EXHIBIT A LEGAL DESCRIPTION OF PROPERTY A condominium comprised of: PARCEL L An undivided one twenty second (1/22) fee simple interest as a tenant in common in and to all of the Common Area defined in Declaration referred to below and described in the Condominium Plan ("Plan") for Lot 1 of Tract No. 14828, which Plan was recorded on August 25, 1994 as Instrument No. 94-0525335 of the Official Records of Orange County, over Lot 1 of Tract No. 14828, in the City of Huntington Beach, County of Orange, State of California, as per map filed in Book 706, Pages 27 to 29 of Miscellaneous Maps, in the office of the County Recorder of said County. Excepting therefrom all oil, petroleum, asphaltum, gas, minerals and other hydrocarbon substances, as reserved in deed recorded August 16, 1921 in Book 401, Page 356 of Deeds, and in various other deeds of record. PARCEL 2: Unit No. 5 consisting of certain airspace and surface elements, as shown and described in the Condominium Plan referred to in Parcel 1 above. PARCEL 3: Non-exclusive easements for access, ingress, egress, use, enjoyment, drainage, encroachment, support, maintenance, repairs and for other purposes, all as described in that certain Declaration of Convenants, Conditions and Restrictions and Reservations of Easements for Pacific Park Villas, recorded August 25, 1994 as Instrument No. 94-0525336 of Official Records. PARCEL 4: Exclusive easements appurtenant to Parcels 1 and 2 referred to above, for balcony or patio purposes, over the areas defined, depicted and assigned on the Plan. '�e-L-�arl Agreement Page 9 of 9 S F \s\Agree: Hecdeclar\ 12/29/95 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of CA County ofrQi%�9 On before me, �/ ���?J��y�ci /1��4 <Y¢//C_ Date Name and Title of Officer (e.q., "J oe, Notary Public") personally ❑ personally known to me - OR proved to me on the basis of satisfactory evidence to be the perso (s) whose names ss is/are subscribed to the within instrument and acknowledged to me that heAgl, they -bxecuted the same in his#4e hei uthorized capacit , and that by i-�r/their signatureCs�/bn the instrument the persor([s�, or the entity upon behalf of which the persorlU-) acted, executed the instrument. " •;• EUZA3t^N ENRING c M . COMM. # 1003397 Z z Notary Public — Coiifomia ORANGE COUNTY My Comm. Expires AUG 29, 1997 WITNESS my hand and official seal. OPTIONAL Signature of Notary Public 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: 9 Document Date: Number of Pages: 115 Signer(s) Other Than Named Above: �' �� 'k-_5 Capacity(ies) Claimed by Signer(s) Signer's Name:,'�,-_? (; �'C 'zL`jors�J Individual ❑ Corporate Officer Title(s): ❑ Partner — ❑ Limited ❑ General ❑ Attorney -in -Fact ❑ Trustee ❑ Guardian or Conservator ❑ Other: Top of thumb here Signer Is Representing:'` Signer's Name: individual ❑ Corporate Officer Title(s): ❑ Partner — ❑ Limited ❑ General ❑ Attorney -in -Fact ❑ Trustee ❑ Guardian or Conservator • El Other: Top of thumb here Signer Is Representing: d 01994 National Notary Association • 8236 Remmet Ave., P.O. Box 7184 • Canoga Park, CA 91309-7194 Prod. No. 5907 Reorder: Call Toll -Free 1.800-876-6827 DISCLOSURE STATEMENT C� ,z "? I r4 4-1 I\We Sean A. Heckethorn and Jacqueh4ie A. Heckethorn ("Applicant") understand and agree that the provision of financial assistance from The Redevelopment Agency of the City of Huntington Beach ("Agency") is conditional on a number of factors, including, but not limited to: ® I/We must qualify for a home loan from an institutional lender acceptable to the Agency. I/We must pay at least 3% of the home purchase price from our own funds. • I/We must qualify for assistance under the guidelines of the Agency's Program. ® I/We as owners of the unit must occupy it for the entire term of the loan. If I/We rent the unit to others, I/We will be in default of the Loan Agreement. I/We further understand and agree that: I/We will be responsible for repaying the loan with five percent (5%) simple interest per year at the time I/we sell, transfer, refinance, or no longer occupy my/our home, or breach any part of the Loan Agreement. The Annual Percentage Rate for this loan is five percent (5%). The simple interest shall accrue each year, but is not required to be paid except as described in the Loan Agreement. If within thirty (30) years from the date I/we receive the Agency financial assistance, I/we sell or transfer the home I/we purchased under this Program to persons who are not persons of low or moderate income or refinance the lien of the deed of trust held by my/our lender, I/we will be obligated to pay the Agency a percentage share of the difference between the price I/we paid for the home and its value at the time of such sale, transfer or refinancing. The Agency Loan is due upon sale, transfer or refinancing of the unit. ® I/We have a right to cancel or rescind this loan at any time prior to midnight on the third business day after the loan agreement is signed by sending a notice of my/our decision to The Redevelopment Agency of the City of Huntington Beach 2000 Main Street P.O. Box 190 Huntington Beach, California 92648 "Exhibit E" to Loan Agreement Page 1 of 2 r S F1s\Agre e: HeckDisc1\01 /04/96 The Agency will not require me/us to make payments of principal or interest during the term of the loan. The full balance of principal and interest will be due and payable when the term of the loan expires. There are no loan closing costs, prepayment penalties or charges, points, fees, finance charges, service charges, investigation fees, credit report fees, insurance premiums, notary or escrow fees, late payment charges or other fees payable pursuant to this loan. An appraisal fee may be payable upon the refinancing of my/our house. ® The Agency shall not be held responsible for any costs associated with the home Uwe purchase with such assistance including, but not limited to, any loan fees or charges, any charges for appraisals, or any escrow costs or other costs relating to the transfer of property. ® The Agency cannot ensure that information provided by or on behalf of Applicant will be kept confidential. ® The Agency shall not be responsible for the selection of a home by the Applicant, the selection of a lender providing funds assisting in the purchase of the home, providing information concerning other public or private sources of loans, or the competitiveness of the terms of the Program. Uwe assume all responsibility for determining whether Uwe desire to be considered for the Program, and Uwe will inform myself/ourselves as to the availability and terms of other public or private loans. The Agency shall not be charged with knowledge of the contents of the documents of the primary lender. The Agency financial assistance Uwe receive under this Program may be considered to be income for purposes of federal or state income taxes and the Agency shall not be held responsible for the payment of any taxes which Uwe may incur virtue of the receipt of such financial assistance. : � a\ r Dated: �t `'�` , 1996 By: Sean ckethorn l Dated: £ y , 1996 ByAacqueli A. Heckethom j y� "Exhibit E" to Loan Agreement Page 2 of 2 S Fs\Agree: HeckDiscl\01 /04/96 NOTICE OF RIGHT OF RESCISSION Participant(s): SEAN A. HECKETHORN and JACUUEUM G Loan Amount: $35,000.00 Address of Residence: 7871 Happy Drive #102 Huntington Beach CA 92648 Notice to Participant Required by Federal Law: You have entered into a transaction on January 8, 1996 [Date] which may result in a lien, mortgage, or other security interest on your home. You have a legal right under federal law to cancel this transaction, if you desire to do so, without any penalty or obligation within three business days from the above date or any later date on which all material disclosures required under the Truth in,Lending Act have been given to you. If you so cancel the transaction, any lien, mortgage, or other security interest on your home arising for this transaction is automatically void. You are also entitled to receive a refund of any down payment or other consideration if you cancel. If you decide to cancel this transaction, you may do so by notifying: The Redevelopment Agency of the City of Huntington Beach 2000 Main Street P.O. Box 190 Huntington Beach, California 92648 by mail or telegram sent not later than midnight of January 11, 1996 (Date) You may also use any other form of written notice identifying the transaction if it is delivered to the above address not later than that time. This notice may be used for that purpose by dating and signing below. I hereby cancel this transaction. x9aMl; XryXUX1999x By: (Date) Sean A Heckethorn C- - "Exhibit F" to Loan Agreement Page 1 of 2 A. Heckethorn SFs\Agree:HecNotice of Right\12/29/95 EFFECT OF RESCISSION. When a participant exercises his right to rescind under paragraph (a) of this section, he is not liable for any finance or other charge, and any security interest becomes void upon such a rescission. Within 10 days after receipt of a notice of rescission, the creditor shall return to the participant any money or property given as earnest money, down payment, or otherwise, and shall take any action necessary or appropriate to reflect the termination of any security interest created under the transaction. If the creditor has delivered any property to the customer, the customer may retain possession of it. Upon the performance of the creditor's obligations under this section, the customer shall tender its reasonable value. Tender shall be made at the location of the property or at the residence of the customer, at the option of the customer. If the creditor does not take possession of the property within 10 days after tender by the customer, ownership of the property vests in the customer without obligation on his part to pay for it. ACKNOWLEDGMENT OF RECEIPT OF TWO COPIES OF NOTICE Each o the p rsigne hereby acknowledges receipt of two c By: U By. Sean �. ,7kethorn Date Ja qi pleted copies of this Notice. "Exhibit F" to Loan Agreement Page 2 of 2 A.11eckethorn Date SF1s\Agree:HecNotice of Right112/29/95 EXHIBIT G EXPIRATION OF RESCISSION PERIODS (Truth in Lending - Real Estate and Home Improvement Loans) rf Participant(s): Sean 9s Loan Amount: $35 000.00 Address of Residence: 7871 Happy Drive #102 Huntington Beach CA 92648 In connection with the agreement of The Redevelopment Agency of the City of Huntington Beach to make the Loan, which will be secured by a deed of trust on the residence at the above address, each of the undersigned hereby represents as follows: The undersigned understands the terms of this Expiration of Rescission Periods Agreement and its attachments. 2. The Redevelopment Agency of the City of Huntington Beach has agreed, subject only to the occurrence of certain conditions, to make the Loan and has delivered to each undersigned a Disclosure Statement setting forth the terms of the Loan and a Notice of Right of Rescission advising each undersigned of their right to rescind and cancel said transaction in accordance with the Truth in Lending Act on or before the date the undersigned has executed this document. Prior to the date shown above, no proceeds of the Loan have been disbursed to or for the benefit of any of the undersigned. 4. None of the undersigned have canceled or rescinded the Loan nor have any of the undersigned notified The Redevelopment Agency of the City of Huntington Beach of any intention to cancel or rescind the Loan. The with M. request the Redevelopment Agency of the City of Huntington Beach to proceed ,. , eckethorn 0 the foregoing represel Date("' "Exhibit G" to Loan Agreement Page 1 of 1 4, SF\s\Agree: Heck: Expiration\ 12/29/9 5