Santa Ana City Council
April 15, 2025

55394.00101\43423340.1

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Exhibit B

EXHIBIT A

LEGAL DESCRIPTION OF THE PROPERTY
APN: 402-191-03
The Land referred to herein below is situated in the City of Santa Ana, County of Orange, State of California, and is described as follows:

THAT PORTION OF LOT "D" OF THE STAFFORD AND TUSTIN TRACT, IN THE CITY OF SANTA ANA, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS SHOWN ON A MAP RECORDED IN BOOK 2, PAGES 618 AND 619 OF MISCELLANEOUS RECORDS, IN THE OFFICE OF THE COUNTY RECORDER OF LOS ANGELES COUNTY, DESCRIBED AS FOLLOWS:

BEGINNING AT THE NORTHWESTERLY CORNER OF SAID LOT "D"; THENCE EASTERLY ALONG THE NORTHERLY LINE OF SAID LOT "D", 225.75 FEET TO THE NORTHWESTERLY CORNER OF THE LAND DESCRIBED IN A DEED TO MARY A. VANDERMEULEN, RECORDED SEPTEMBER 2, 1897, IN BOOK 33, PAGE 68 OF DEEDS, RECORDS OF ORANGE COUNTY; THENCE SOUTHERLY ALONG THE WESTERLY LINE OF SAID LAND OF VANDERMEULEN, 733.36 FEET TO THE NORTHERLY LINE OF THE LAND DESCRIBED IN A DEED TO CHARLES L. FOSTER, RECORDED NOVEMBER 3, 1892 IN BOOK 55, PAGE 126 OF DEEDS, RECORDS OF ORANGE COUNTY; THENCE WESTERLY ALONG SAID NORTHERLY LINE OF THE LAND OF FOSTER, 225.75 FEET TO THE WESTERLY LINE OF SAID LOT "D"; THENCE NORTHERLY ALONG SAID WESTERLY LINE OF LOT "D", 733.36 FEET TO THE POINT OF BEGINNING.

EXCEPT THE NORTH 19.00 FEET OF THAT PORTION OF THE LAND DESCRIBED IN THE DEED TO THE CITY OF SANTA ANA, RECORDED DECEMBER 22, 1965, IN BOOK 7781, PAGE 486, OFFICIAL RECORDS OF SAID COUNTY. A PORTION OF SAID LAND IS INCLUDED WITH THE AREA SHOWN ON A MAP FILED IN BOOK 74, PAGE 3 OF RECORD OF SURVEYS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.

55394.00101\43423340.1

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Exhibit B

EXHIBIT B

FORM OF AFFORDABLE HOUSING RESALE RESTRICTIONS, EQUITY SHARING, AND

REGULATORY AGREEMENT

RECORDING REQUESTED BY,
AND WHEN RECORDED MAIL TO:

City of Santa Ana
20 Civic Center Plaza (M-30)
P.O. Box 1988
Santa Ana, CA 92702
Attn: City Clerk

Free Recording pursuant to
Government Code 6103 & 27383

AFFORDABLE HOUSING RESALE RESTRICTIONS, EQUITY SHARING AND

REGULATORY AGREEMENT
2020 East First Street, APN: 402-191-02
This AFFORDABLE HOUSING RESALE RESTRICTIONS, EQUITY SHARING AND REGULATORY AGREEMENT (“Affordable Housing Resale Restrictions ” or "Agreement") is made as of______________, by ________________(“Homebuyer”) i n favor of the CITY OF SANTA ANA, a municipal corporation (“City”).

R E C I T A L S
A. Homebuyer has purchased a single family house located at_________________, Santa Ana, California, _____, as such real property is more part icularly described in “Exhibit 1” attached hereto and incorporated herein (“Property”).

B. In connection with Homebuyer purchasing the Property, Homebuyer acknowledged and received disclosures that the purchase was subject to a Density Bonus Housing Agreement with Declaration of Covena nts, Conditions and Restrictions ("Density Bonus Agreement"), dated on or about ______, 2025, between the developer of the Property, ______________ ("Developer"). The Density Bonus Agreement required the Property to be sold to a Very Low Income Household, subject to the provisions of this Affordable Housing Resale Restrictions, pursuant to which Developer imposed covenants upon the Property to be sold to Eligible Homebuyers at an Affordable Sales Price. Homebuyer hereby acknowledges and agrees that this Affordable Housing Resale Restrictions is intended to implement the requirements of the Density Bonus Agreement, and that the purchase, use and occupancy of the Property is subject to 55394.00101\43423340.1

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Exhibit B

the conditions, covenants and restrictions contained herein. Capitalized terms used herein and not otherwise defined shall have the same meaning as set forth in the Density Bonus Agreement.

C. Homebuyer desires and intends to restrict the Property and the improvements thereon in accordance with this Affordable Housing Resale Restrictions. Homebuyer agrees and acknowledges that this Affordable Housing Resale Restrictions is intended to implement and further the intent of the Density Bonus Agreement, entered into between City and Developer of the Property, which was recorded against the Affordable Unit to impose the conditions, covenants, and restrictions as set forth herein. This Affordable Housing Resale Restrictions shall be construed in accordance with the Regulatory Agreement.

D. Homebuyer is a Very Low Income Household, as that term is defined in this Agreement.

E. Homebuyer has represented to City that Homebuyer and Homebuyer’s household intend to reside in the Property as Homebuyer’s principal residence at all times during Homebuyer’s ownership of the Property.

NOW, THEREFORE, for good and valuable consideration, the parties agree as follows:

1. DEFINITIONS
“Affordability Term ” means that period of time commencing upon the Date of this Agreement and terminating on the date that is fifty five (55) years from the date a certificate of occupancy was issued for the Property.
“Affordable Housing Cost” means the purchase price for Very Low Income Households pursuant to California Health & Safety Code Section 50052.5, and implementing regulations of Sections 6920, 6924 and 69 26 of Title 25 of the California Code of Regulations for Very Low Income Households.
"Affordable Sales Price" means a purchase price required under a written purchase sale agreement that does not exceed the sum of the Supportable Mortgage plus the Benchmark Down Payment.

Affordable Unit" or "Property" means the individual dwelling unit restricted by this Agreement
“City” means the City of Santa Ana, California, a California municipal corporation, and the City’s successors and assigns.
"City Deed of Trust" means the City Deed of Trust, securing this Affordable Housing Resale Restrictions and the City Promissory Note, and dated on or about the same date hereof. "City Equity Share" means the amount that Homebuyers agree to pay to the City in accordance with the City Promissory Note.
55394.00101\43423340.1

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Exhibit B

"City Promissory Note" means the City Promissory Note, evidencing Homebuyer's agreement to pay the City Equity Share and dated on or about the same date hereof. “County” means the County of Orange, California.
“Date of this Agreement” means the date in the first paragraph of this Agreement. “Default” means the failure of a party to perform any action or covenant required by this Agreement within the time periods provided herein following notice and opportunity to cure.

The term default also includes an Ownership Default and a Maintenance Default as more fully defined and described herein. Notwithstanding the foregoing for purposes of acceleration of the City Promissory Note , or initiation of foreclosure proceedings there shall be a distinction between the types of default hereunder, including an “Ownership Default” and a “Maintenance Default.” The term “Ownership Default” means the failure of Homebuyer to perform any action or covenant required by the Affordable Housing Resale Restriction related to ownership, owner -occupancy, lien priority, and restrictions on sale and resale of the Property subject to the notice and opportunity to cure provisions set forth herein. A default of any obligation secured by the First Lien shall be a cross-default and also constitute an Ownership Default. The term “Maintenance Default” means the failure of Homebuyer to perform any action or covenant required by this Agreement relating to a “Maintenance Deficiency,” including the ongoing upkeep, maintenance, and use of the Property in decent, safe, sanitary, clean, and neighborly manner, subject to the notice and opportunity to cure provisions set forth herein (and expressly excluding an Ownership Default). “Developer” means MLC Holdings, Inc./Meritage Homes.
"Eligible Household" means a Household whose income does not exceed the “Very Low Income Household” qualifying limit as defined herein.
“First Lien” means the lien of th e institution making the purchase money mortgage loan to Homebuyer for the purchase of the Property.
“Homebuyer” means the person or persons set forth in the first paragraph of this Agreement, and their successors and assigns.
“Housing Cost” means and includes all of the following costs associated with ownership of an Affordable Unit as defined in Title 25 of the California Code of Regulations Section 6920, and Santa Ana Municipal Code, including:
(a) Principal and interest on a mortgage loan at the defined interest rate; (b) Property tax and assessments;
(c) Fire and casualty insurance covering replacement value of property improvements;
(d) Property maintenance and repairs;
55394.00101\43423340.1

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Exhibit B

(e) A reasonable utility allowance, as determined by the Orange County Housing Authority; and
(f) Homeowner Association assessments and dues.
“Legal Description” means the legal description of the Property which is attached hereto as Exhibit A and incorporated herein.
"Median Income" means the area median income for Orange County PMSA, adjusted for family size appropriate to the unit pursuant to California Health and Safety Code § 50052.5(h), as periodically published by the California Department of Housing and Community Development.
“Very Low Income and Very Low Income Households” means a Household whose income does not exceed fifty (50%) of the area median income for the Orange County, California PMSA, adjusted for household size, as published by HCD. “Notice of Intent to Transfer” means a written notice from Homebuyer to the City that provides notice of an intent to Transfer the Property and all information required by this Agreement in connection with the proposed Transfer.
“Permitted Transfer” means any Transfer which is permitted under this Agreement with the written consent of the City.
“Prohibited Transfer” means any Transfer which is disapproved by the City or violates this Agreement.
“Property” means that certain real property located at the street address set forth in Recital A and legally described in the Legal Description.
“Purchase Agreement” means that certain agreement pursuant to which Homebuyer has agreed to purchase the Property from the Developer.
“Request for Notice” means the Request for Notice of Default attached hereto as Exhibit I and incorporated herein.
“Sales Price” means the sum to be paid by a Transferee for the Transfer of the Property. “Transfer” shall mean any sale, assignment, conveyance, lease or transfer, voluntary or involuntary, of any interest in the Property. Without limiting the generality of the foregoing, Transfer shall include (i) a transfer by devise, inheritance or intestacy; (ii) creation of a life estate; (iii) creation of a joint tenancy interest; (iv) a gift of all or any portion of the Property; or (v) any voluntary conveyance of the Property.
“Transferee” shall mean any natural person or entity who obtains ownership or possessory rights in the Property pursuant to a Transfer.
55394.00101\43423340.1

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Exhibit B

2. HOMEBUYER’S REPRESENTATIONS AND WARRANTIES AS TO THE SALE OF THE PROPERTY TO HOMEBUYER.

2.1 Homebuyer represents and warrants to City that the financial and other information which Homebuyer has provided to City with respect to Homebuyer’s income and the purchase price of the Property was true and correct at the time such information was provided, and remains true and correct as of the Date of this Agreement.

2.2 Homebuyer agrees to occupy the Property as Homebuyer's primary residence.

3. RESTRICTIONS ON SALE OF PROPERTY.

3.1 Homebuyer covenants and agrees that during the Affordability Term, any resale of the Property shall be to a Very Low Income Household for an amount that does not exceed an Affordable Sales Price.

3.2 Prior to any Transfer of the Affordable Unit, Homebuyer shall provide the City with a Notice of Intent to Transfer , in a form approved by the City, and the City shall have the right to approve or disapprove of any Transfer, which approval shall not be unreasonably withheld.

3.3 Permitted Transfers . Prior to any Transfer of the Property, Homebuyer shall obtain City's written consent pursuant to the requirements of Section 4 and 5, below, and subject to the following:
(a) During the Affordability Term, the Homebuyer may Transfer the Property to a Very Low Income Household for an Affordable Sales Price. (b) Upon expiration of the Affordability Term, Homebuyer may sell the Property without the affordability restrictions of this Agreement, subject to the satisfaction of the City Promissory Note and City Deed of Trust.

3.4 Prohibited Transfers. Any Transfer of the Property without the City's written consent or in violation of this Agreement is a Prohibited Transfer.

4. HOMEBUYER PROCEEDS FROM SALE OF PROPERTY.

4.1 This Agreement implements the provisions of the Density Bonus Agreement for disbursement of funds from a sale of the Property, as further set forth below.

4.2 Permitted Transfers During the Affordability Term. During the Affordability Term, a Homebuyer retains the proceeds from a Permitted Transfer after payment of the First Lien, and reasonable closing costs and broker fees. The City Deed of Trust shall remain a lien on the Property, or the Transferee shall executed a new Affordable Housing Resale Restrictions, City Promissory Note, and City Deed of Trust.

4.3 Permitted Transfers Upon Expiration of the Affordability Term. Upon expiration of the Affordability Term, the City Equity Share shall become due and payable upon a 55394.00101\43423340.1

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Exhibit B

Permitted Transfer, and the proceeds from a sale shall be used for payment of the City Equity Share in satisfaction of the City Promissory Note.

4.4 Prohibited Transfers . Homebuyer agrees and acknowledges that a Prohibited Transfer is a default of this Agreement and, in the event of such a default, the City shall be entitled to the greater of: (a) all amounts paid for the Property in excess of the Affordable Sales Price shall be forfeited to the City, or (b) the City Equity Share.

4.5 Equity Sharing Agreement.

4.5.1 Following the expiration of the Affordability Term, Homebuyer agrees to pay to the City the City Equity Share, as follows:

4.5.2 The City Equity Share shall be paid out of proceeds from a Transfer of the Property after the Affordability Term.

4.5.3 The City Equity Share includes the following:
(a) An amount equal to the difference between the fair market value of the Affordable Unit at the time of the initial purchase and the Affordable Sales Price (the "Initial Subsidy").
(b) An amount equal to the product of (1) the appreciation of the Affordable Unit, as measured by the increase in the fair market value of the Affordable Unit at the time of the sale to the Homebuyer and the resale of the Affordable Unit, and (2) the percentage that the initial sub sidy represented of the fair market value of the Affordable Unit when it was purchased by the Homebuyer (the "Proportionate Share of Appreciation").

4.6 The City Equity Share shall only be subordinate to a First Lien, as approved by the City at the time of the initial sale (or subsequent approval in the event of a refinance or resale during the Affordability Term), and amounts owed to Homebuyer for the value of improvements to the Property and the down payment paid by Homebuyer.

4.7 For purposes of determining the City Equity Share, at the time of the initial sale of the Property, and each re -sale during the Affordability Term, the fair market value shall be determined as follows:

4.7.1 For the initial sale, Developer may propose to the City a fair market value based on a price per square foot that is based on comparable sales of other units within the Project.

4.7.2 Except as approved in writing by the City, prior to the sale of an Affordable Unit, a qualified appraiser shall conduct an appraisal of the Affordable Unit to det ermine fair market value without the restrictions of this Agreement. If the Developer or a prospective Homebuyer disputes the appraised value, then that party may pay for the costs of a second appraisal and, if there is still disagreement, the average of the two appraisals shall be used to determine the fair market value.
55394.00101\43423340.1

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Exhibit B

4.7.3 The fair market value of the Affordable Unit, as determined in accordance with the above, shall be provided to the City for approval or disapproval, which City shall provide within thirty (30) days of receipt of the proposed fair market value. If City does not provide a written response within such time period, then the proposed fair market value shall be deemed approved by the City.

5. PROCESS FOR TRANSFER OF THE PROPERTY. In the event that Homebuyer desires to Transfer the Property, the following procedure shall apply:

5.1 Notice to City. Prior to any Transfer, Homebuyer shall send a completed Notice of Intent to Transfer to City at the address set forth in Section 22. The Notice of Intent to Transfer shall include: (a) the identity of the proposed Transferee and contact information, including current address and phone number, (b) the proposed terms of the Transfer, (c) whether the Property is being sold to a purchaser that qualifies as a Very Low Household and supporting documentation, and (d) if during the Affordability Term, the proposed Affordable Sales Price and the resulting Monthly Housing Costs. If the proposed Transfer is upon expiration of the Affordability Term, then the Notice of Intent to Transfer shall include the proposed sales price and a good faith estimate of the proceeds from the sale of the Property. The City may request additional information as reasonably necessary to evaluate the requested Transfer.

5.2 Qualification of Pro posed Transferee. For a transfer during the Affordability Term, the proposed Transferee shall complete an Income Verification Form, in a form approved by the City, which shall include, without limitation, a certification as to the income and family size of the proposed Transferee.

5.3 Certificates from Parties. In the event the City approves the proposed Transfer, Homebuyer and proposed Transferee each shall certify in writing, in a form acceptable to City, that the Transfer shall be closed in accordance w ith the terms of the sales contract and other documents submitted to and approved by City and that all consideration delivered by the proposed Transferee to owner has been fully disclosed to City. The written certificate shall also include a provision that in the event a Transfer is made in violation of the terms of this Agreement or false or misleading statements are made in any documents or certificate submitted to City for its approval of the Transfer, City shall have the right to file an action at law or in equity to make the parties terminate and/or rescind the sales contract and/or declare the sale void notwithstanding the fact that the Transfer may have closed and become final as between Homebuyer and Transferee.

5.4 Requirements for Permitted Transfers. For a Permitted Transfer during the Affordability Term, the City will require: (1) an assignment and assumption agreement that is reasonably acceptable to City, or (2) the proposed Transferee execute a new City Promissory Note, City Deed of Trust, and Affordable Housing Resale Restrictions . Upon expiration of the Affordability Term, the City will require a closing statement setting forth the proceeds from a proposed sale, and shall have at least thirty (30) days to review and approve the sales documents.

5.5 Written Approval of City Required Before Transfer . The purchase sale agreement or other contract for Transfer of the Property, and the Income Verification Form, shall be provided to the City, which shall have at least thirty (30) days to review. The Property, and any interest therein, shall not be conveyed by any Transfer except with the express written consent of 55394.00101\43423340.1

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Exhibit B

City, which consent shall be given only if the Transfer is in accordance with the provisions of this Agreement.

5.6 Notice of Prohibited Transf er. Within thirty (30) days after receiving all information required by this Section 5, the City shall determine and give notice to Homebuyer as to whether the City consents to the Transfer as a Permitted Transfer, or if the City determines the proposed Transfer is a Prohibited Transfer. Any attempt to Transfer the Property without the City's written approval, or after the City has given notice of a Prohibited Transfer, shall be a Default of this Agreement, and the City may apply to a court of competent ju risdiction for specific performance of this Agreement, for an injunction prohibiting a proposed sale or Transfer in violation of this Agreement, for a declaration that the Prohibited Transfer is void, or for any such other relief as may be appropriate.

5.7 Delivery of Documents. Upon the close of the proposed Transfer, Homebuyer and Transferee, as applicable, shall provide the City with a copy of the final sales contract, settlement statement, escrow instructions, all certificates required by this Section 5 and any other documents City may request.

6. ENCUMBRANCES.

6.1 Subordination. Except as provided otherwise herein, the provisions of this Agreement, the Notice of Affordability Restrictions and the City Deed of Trust, the obligations herein and therein, shall be subordinate only to the First Lien on the Property and, if applicabl e, other loan(s) as approved by the City, including lien instruments that secure other Homebuyer purchase money and/or down payment assistance, including without limitation City, State of California, or federal affordable housing programs, which liens shal l not impair the rights under the First Lien in the event of default under the First Lien by Homebuyer. Such remedies under the First Lien include the right of foreclosure or acceptance of a deed or assignment in lieu of foreclosure.

6.2 Request for Notice of Default . City may cause a Request for Notice to be recorded on the Property subsequent to the recordation of the First Lien deed of trust or mortgage requesting a statutory notice of default as set forth in California Civil Code Section 2924b. A form of a Request for Notice is attached hereto as Exhibit I and incorporated herein.

6.3 Further Encumbrances. Homebuyer agrees that it shall not record or cause the recordation of any deed of trust (“Further Encumbrance”) securing a note having an original principal sum which, when added to the sum of the principal amount(s) of any notes secured by any deeds of trust against the Property as of the date of recordation of the Further Encumbrance, exceeds one hundred percent (100%) of the fair market value of the Property.

7. USES. Homebuyer covenants and agrees to devote, use and maintain the Property in accordance with this Agreement. All uses conducted on the Property, including, without limitation, all activities undertaken by Homebuyer pursuant to this Agreement, shall conform to all applicable provisions of the Santa Ana Municipal Code, and the recorded documents pertaining to and running with the Property.
55394.00101\43423340.1

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Exhibit B

8. NONDISCRIMINATION COVENANTS.

Homebuyer 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 any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defin ed in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises herein conveyed, nor shall the grantee or any person claiming under or through him or her, establish or permit any practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, su blessees, or vendees in the premises herein conveyed. The foregoing covenants shall run with the land. All deeds, leases or contracts relating to the Property, or any part thereof, shall contain or be subject to substantially the following non-discrimination or non-segregation clauses:
“The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators, and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises herein conveyed, nor shall the grantee or any person claiming under or through him or her, establish or permit any practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the premises herein conveyed. The foregoing covenants shall run with the land.”
The covenants established in this Section 8 shall, without regard to technical classification and designation, be binding for the benefit and in favor of City and its successors and assigns, and shall remain in effect in perpetuity.

9. MAINTENANCE OF PROPERTY.

Homebuyer shall maintain the improvements and landscaping on the Property in a manner consistent with community standards which will uphold the value of the Property, in accordance with the Santa Ana Municipal Code. Homebuyer also agrees to comply with all applicable federal, state and local laws.

9.1 Exterior Maintenance . Except as to be maintained by the homeowners association, as applicable, all exterior, painted surfaces of any structures located on the Property shall be maintained at all times in a clean and good condition. Any defacing marks shall be cleaned or removed within a reasonable period of time.

9.2 Front and Side Exteriors . Except as to be maintained by the homeowners association, as applicable, Homebuyer shall at all times maintain the front exterior, any visible side exteriors, and yards, if any, in a clean, safe and presentable manner. 55394.00101\43423340.1

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Exhibit B

9.3 Graffiti Removal. All graffiti and defacement of any type, including but not limited to marks, words and pictures, shall be promptly removed from the Property within two (2) days of the time they were made and any necessary painting or repair completed in a timely and expeditious manner after notice thereof, whichever is less.

9.4 No Nuisance. Homebuyer shall not maintain, cause to be maintained, or al low to be maintained on or about the Property any public or private nuisance, including without limitation, the conduct of criminal activities set forth in the nuisance abatement provisions of the Uniform Controlled Substances Act (Health & Safety Code Sec tions 11570, et seq.) or the Street Terrorism Enforcement and Prevention Act (Penal Code Sections 186.22 et seq.), or any successor statute or law.

10. OCCUPANCY STANDARDS.

The Property shall be used as the principal personal residence of Homebuyer and Homeb uyer’s immediate family/household and for no other purpose. Homebuyer shall not enter into an agreement for the rental or lease of all or any part of the Property. Homebuyer shall not rent out a room or rooms at the Property. Homebuyer may request a tem porary waiver of the foregoing requirement in the event of extreme hardship requiring Homebuyer to move to another geographical area or to less expensive housing, including, for example and without limitation, transfer of job location, loss of job, or unex pected major expenses. City may approve or disapprove such request in its sole discretion, and may require as a condition of approval that Homebuyer only rent the Property to Eligible Households at an affordable rent (as defined in Section 50052.5 and 50053 of the California Health & Safety Code.) Subject to applicable state or federal law, the standard occupancy for the Property shall be consistent with the Regulatory Agreement. Homebuyer shall, upon demand by City, submit to City an affidavit of occupa ncy verifying Homebuyer’s compliance with this Section 10. Such affidavit may be required by City on an annual basis.

11. EFFECT OF VIOLATION OF THE TERMS AND PRO VISIONS OF THIS AGREEMENT.

11.1 In General. The covenants established in this Agreement shall, without regard to technical classification and designation, be binding for the benefit and in favor of City, its successors and assigns, as to those covenants which are for its benefit. The covenants contained in this Agreement shall remain in effect for the pe riods of time specified herein. The covenants against discrimination shall remain in effect in perpetuity. City is deemed the beneficiary of the terms and provisions of this Agreement and of the covenants running with the land, for and in its own rights and for the purposes of protecting the interests of the community and other parties, public or private, in whose favor and for whose benefit this Agreement and the covenants running with the land have been provided. This Agreement and the covenants herein shall run in favor of City, without regard to whether City has been, remains or is an owner of any land or interest therein in the Property or in the Project Area. City shall have the right, if the Restriction or covenants are breached, to exercise all rights and remedies, and to maintain any actions or suits at law or in equity or other proper proceedings to enforce the curing of such breaches to which it or any other beneficiaries of this Agreement and covenants may be entitled. 55394.00101\43423340.1

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Exhibit B

11.2 Acceleration. The City shall be entitled to accelerate payments due under the City Promissory Note, and the amount required thereunder shall become due and immediately payable to City by Homebuyer upon the occurrence of any one of the following events of acceleration:

11.2.1 During the Affordability Term , Homebuyer Transfers the Property for a price in excess of an Affordable Sales Price or to a Transferee who does not qualify as a Very Low Income Household;

11.2.2 Homebuyer makes a Prohibited Transfer of title to or any interest in the Property without City's consent or in violation of this Agreement;

11.2.3 Homebuyer refinances any lien or encumbrance to which City Deed of Trust is subordinate (each such lien, a “First Lien”) for a loan amount in excess of the then current loan balance secured by such lien or encumbrance and loan closing costs;

11.2.4 Homebuyer fails to occupy the Property as Homebuyer’s principal residence or is in Default of any other obligation under the Affordable Housing Resale Restrictions;

11.2.5 Homebuyer has an Ownership Default violating any affordable housing terms or provisions of this Agreement.

12. COMPLIANCE WITH LAWS; GOVERNING LAW.

Homebuyer hereby agrees to comply with all applicable ordinances, rules, and regulations of City.

Nothing herein is intended to be, nor shall it be deemed to be, a waiver of any City ordinance, rule, or regulation. This Agreement shall be governed by the laws of the State of California. Any legal action brought under this declaration must be instituted in the Superior Court of the County of Orange, State of California, or in the Federal District Court in the Central District.

13. INDEMNIFICATION.

Homebuyer shall pay for, defend, indemnify and hold harmless City and the City and their respective officers, officials, agents, employees, representatives, and volunteers from and against any loss, liability, claim, or judgment relating in any manner to Homebuyer’s use of the Property or Homebuyer’s violation of this Agreement. Homebuyer shall remain fully obligated for the payment of taxes, liens and ass essments related to the Property. There shall be no reduction in taxes for Homebuyer, nor any transfer of responsibility to City to make such payments, by virtue of this Agreement.

14. INSURANCE.

Homebuyer shall maintain, during the term of this Agreement, an all-risk property insurance policy insuring the Property in an amount equal to the full replacement value of the structures on the Property. The policy shall contain a statement of obligation on behalf of the carrier to notify the City of any material change, cancellation or termination of coverage at least thirty (30) days in advance of the effective date of such material change, cancellation or termination. Homebuyer 55394.00101\43423340.1

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Exhibit B

shall transmit a copy of the certificate of insurance to City within thi rty (30) days of the effective Date of this Agreement, and Homebuyer shall annually transmit to City a copy of the certificate of insurance, signed by an authorized agent of the insurance carrier setting forth the general provisions of coverage. The copy of the certificate of insurance shall be transmitted to City at the address set forth in Section 22 hereof. The form, content and issuer of any certificate of insurance approved by City.

15. 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, that 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 to 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.

16. NON-WAIVER.

Failure to exercise any right City 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.

17. FURTHER ASSURANCES.

Homebuyer shall execute any further documents consistent with the terms of this Agreement, including documents in recordable form, as City shall from time to time find necessary or appropriate to effectuate its purposes in entering into this Agreement.

18. GOVERNING LAW.

Homebuyer hereby agrees to comply with all ordinances, rules and regulations of City. Nothing in this Agreement is intended to be, nor shall it be deemed to be, a waiver of any City ordinance, rule or regulation. 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, or in the Federal District Court where the City is located.

19. AMENDMENT OF RESTRICTION.

No modification, rescission, waiver, release or amendment of any provision of this Agreement shall be made except by a written agreement executed by Homebuyer and City.

20. CITY MAY ASSIGN.
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Exhibit B

City may, at its option, assign its rights hereunder without obtaining the consent of Homebuyer.

21. HOMEBUYER ASSIGNMENT PROHIBITED.

In no event shall Homebuyer assign or transfer any portion of this Agreement without the prior express written consent of City, which consent shall be given by City only in the ev ent that City determines that the assignee or transferee is an Eligible Household, that the assignee’s or transferee’s monthly housing payments are at an Affordable Housing Cost, and that the assignee or transferee has expressly assumed this Agreement by e xecution of a written assignment document to be provided by City and recorded against the Property, or execution of new instruments by the transferee. This section shall not affect or diminish City’s right to assign all or any portion of its rights hereunder.

22. NOTICES.

Any notices, requests or approvals given under this Agreement from one party to another may be personally delivered or deposited with the United States Postal Service for mailing, postage prepaid, registered or certified mail, return receipt requested to the following address:

To Homebuyer: At the property address.

To City: City of Santa Ana
20 Civic Center Plaza
Santa Ana, CA 92702
Attn: City Clerk

Either party may change its address for notice by giving written notice thereof to the other party.

23. ATTORNEYS’ FEES AND COSTS.

In the event that any action is instituted to enforce payment or performance under this Agreement, the parties agree the non -prevailing party shall be responsible for and shall pay all costs and all attorneys’ fees incurred by such prevailing party in enforcing this Agreement.

24. ENTIRE AGREEMENT.

This Agreement, together with the City Promissory Note and City Deed of Trust, and all attachments thereto and hereto, constitutes the entire understanding a nd 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 agreements between the City and Homebuyer concerning all or any part of the subject matter of this Agreement. 55394.00101\43423340.1

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Exhibit B

[Signature block begins on follow page.]

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Exhibit B

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date set forth above.

HOMEBUYER:

By:

By:_______________________________________

CITY:

ATTEST: CITY OF SANTA ANA

___________________________ _______________________
By: By:

City Clerk City Manager

Dated: Dated:

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Exhibit 1
of the Affordable Housing Resale Restrictions, et al.

EXHIBIT 1 OF THE AFFORDABLE HOUSING RESALE RESTRICTIONS, EQUITY

SHARING, AND REGULATORY AGREEMENT

LEGAL DESCRIPTION
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Exhibit C

EXHIBIT C

FORM OF CITY PROMISSORY NOTE

City Equity Share

[DATE]
Santa Ana, CA

1. FUNDAMENTAL PROVISIONS.

The following terms will be used as defined terms in this City Promissory Note (as it may be amended, modified, extended and renewed from time to time, this “Note”):

Lender/Payee: City of Santa Ana, a California municipal corporation.

Borrower/Maker: [HOMEBUYER]

Principal Amount: City Equity Share, as defined in the Affordable Housing Resale Restrictions

Interest Rate: None.

Default Interest Rate: Eight percent per annum.

Affordability Term: The date of this Note until [ADD DATE 55 YEARS FROM CERTIFICATE OF OCCUPANCY]

Maturity Date: The date of a Transfer of the Property after expiration of the Affordability Term.

Business Day: Any day of the year other than Saturdays, Sundays and legal holidays on which City's main office is closed.

Property: [ADDRESS]

Deed of Trust: The City Deed of Trust executed by Borrower, as “Trustor”, for the benefit of City, as “Beneficiary,” concurrently with this Note, and recorded against the Property.

Affordable Housing
Resale Restrictions: The Affordable Housing Resale Restrictions, Equity Sharing and Regulatory Agreement, dated on or about [DATE].

Loan: The agreement by Borrower to pay the Principal Amount to City, in accordance with the Affordable Housing Resale Restrictions and this Note.

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Exhibit C

City Documents: This Note, the Affordable Housing Resale Restrictions , the City Deed of Trust

2. PROMISE TO PAY. For value received, Borrower promises to pay to the City, at its office at 20 Civic Center Plaza (M-30), Santa Ana, CA 92702, or at such other place as the Lender hereof may from time to time designate in writing, the Principal Amount together with interest thereon, and all other sums due under and secured by the Deed of Trust.

3. SECURITY. This Note is secured by the City Deed of Trust. The holder of this Note will be entitled to the benefits of the security provided by the City Deed of Trust and will have the right to enforce the covenants and agreements of Maker contained therein and in the Affordable Housing Resale Restrictions

4. PAYMENTS. The City Equity Share is due upon a Transfer of the Property after expiration of the Affordability Term, or upon an event of Default. In the event any City Equity Share become due and payable hereunder or pursuant to the Affordable Housing Resale Restrictions, the City Equity Share shall be immediately due and payable hereunder. Failure to declare such amounts due in any instance shall not constitute a waiver on the part of the City to declare them due in the future. Maker will pay to City all sums owing under this Note without deduction, offset, or counterclaim of any kind.

5. DEFAULT RATE OF INTEREST. If City Equity Share payable to City pursuant to the Affordable Housing Resale Restrictions and this Note are not paid to City within ten (10) days of the due date thereof, then interest shall accrue on such sum at a rate equal to the lesser of eight percent (8%) interest per annum, compounded annually, or the maximum rate permitted by law.

6. PREPAYMENT. This Note may not be prepaid in whole or in part.

7. TRANSFER. Maker shall not transfer, lease, sell, assign, refinance, encumber, convey or otherwise Transfer any interest in the Property without complying with all requirements of the Affordable Housing Resale Restrictions. Maker’s failure to comply with the requirements of this paragraph shall be a Default under this Note.

8. DEFAULT. The occurrence of any one or more of the following shall constitute an event of default (“Default”) hereunder.

8.1 The occurrence of a breach of any of Maker’s covenants, warranties, or representations under this Note, the City Deed of Trust, or the Affordable Housing Resale Restrictions, including without limitation, any unauthorized refinancing, sale, conveyance, lease, assignment, encumbrance, or other Transfer of the Property, Maker’s failure to occupy the Property as Maker’s principal residence, any failure to pay amounts payable pursuant to this 55394.00101\43423340.1

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Exhibit C

Note, and Maker’s failure to maintain insurance on the Property as required pursuant to the City Deed of Trust.

8.2 The entry of an order for relief under federal bankruptcy laws as to Maker or the adjudication of Maker as insolvent or bankrupt pursuant to the provisions of any state or federal insolvency or bankruptcy act, or Maker’s consent to, acquiescence in, or attempt to secure the appointment of, any receiver for all or any substantial part of the Property.

8.3 The occurrence of an event of default under any loan secured by the Property and the continuance of such default beyond the expiration of all applicable cure periods such that the holder of such loan has the right to accelerate such loan.

9. Remedies. Upon the occurrence of a Default, the giving of any required notice thereof, and the expiration of any applicable cure period, City may, at its option, exercise any one or more of the following remedies:

9.1 Declare all of the sums payable under this Note to be immediately due and payable without further demand.

9.2 Pursue the exercise of the power of sale provided under the City Deed of Trust.

9.3 Either in person or by agent, with or without bringing any action or proceeding, or by a receiver appointed by a court, and without regard to the adequacy of its security, enter upon the Property and take possession thereof (or any part thereof) and of any of the Security in its own name or in the name of the Trustee, and do any acts which it deems necessary or desirable to preserve the value or marketability of the Property, or part thereof or interest therein, or protect the security thereof. The entering upon and taking possession of the Security shall not cure or waive any breach hereunder or invalidate any act done in response to such breach, and notwithstanding the continuance in possession of the Property, the City shall be entitled to exercise every remedy provided by the City Documents or by law, upon the occurrence of any uncured breach.

9.4 Commence an action to foreclose the City Deed of Trust as a mortgage, appoint a receiver, or specifically enforce any of the covenants set forth in the City Documents.

9.5 Exercise its option to purchase the Property pursuant to the Affordable Housing Resale Restrictions.

9.6 Exercise all other rights and remedies provided herein or in any other City Document.

9.7 Exercise any other remedy provided by law or in equity. 55394.00101\43423340.1

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Exhibit C

The rights and remedies of the City hereunder are cumulative, and the City’s exercise or failure to exercise one or more of such rights or remedies shall not preclude City’s exercise, at the same time or different times, of any other right or remedy for the same Default or any other Default.

10. Maker’s Personal Liability. Maker will be fully and personally liable for all loss, cost, liability, damage, and expense (including without limitation attorneys’ fees) suffered or incurred by City arising from any of the following:

10.1 Failure to pay taxes, assessments, and any other charges that could result in liens against any portion of the Property or any other Security.

10.2 Failure to pay and discharge any mechanics’ liens, materialmen’s liens, or other unpermitted liens against any portion of the Property or any other Security.

10.3 Maker’s fraud or intentional misrepresentation with respect to any representations, warranties, or certifications made in the City Documents or in connection with Maker’s application to participate in the City’s affordable housing program.

10.4 Maker’s retention of any rental income or other income arising with respect to any portion of the Property or any other Security subsequent to the date of City’s delivery of any notice of a Default, or which, under the terms of the City Documents, should otherwise have been paid to City.

10.5 Maker’s retention or use of insurance proceeds, condemnation awards, or other similar funds or payments attributable to the Property or any other Security that pursuant to the City Documents should have been paid to City or used for another purpose.

10.6 Waste of the Property, or any other failure to maintain, repair, or restore any portion of the Property or any other Security in accordance with the requirements of the City Documents.

10.7 The removal, demolition, damage or destruction of any portion of the Property or any other Security that is neither consented to in writing by City nor fully compensated for by insurance proceeds or condemnation awards.

10.8 The failure of the City Documents to constitute a lien or security interest, as applicable, on the Property or any other Security, subject only to those exceptions, if any, permitted by the City Documents or otherwise approved in writing by City.

10.9 Nothing in this paragraph will affect or limit the rights of City to enforce any of City’s rights or remedies with respect to any portion of the Property or any other Security. 55394.00101\43423340.1

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Exhibit C

11. Maker’s Waivers. Maker hereby expressly waives diligence, presentment, protest, and demand, and notice of protest, notice of dishonor and notice of nonpayment of this Note, and expressly waives any rights to be released by reason of any extension of time or change in terms of payment, or change, alteration or release of any security given for the payments hereof, and expressly waives the right to plead any and all statutes of limitation as a defense to any demand on this Note.

12. Notices. All notices, requests, demands, reports or other communications regarding this Note shall be in writing and delivered: (i) personally; or (ii) by independent, reputable, overnight commercial courier; or (iii) by deposit in the United States mail, postage and fees fully prepaid, registered or certified mail, with return receipt requested; addressed as follows, or to such other address as specified in written notice delivered to the parties pursuant to this Section:

To Maker: At the Property address.

To City: City of Santa Ana
20 Civic Center Plaza (M-30)
P.O. Box 1988
Santa Ana, CA 92702
Attn: City Clerk

13. Any notice that is personally delivered (including by means of professional messenger service, courier service such as United Parcel Service or Federal Express, or by U.S. Postal Service), shall be deemed received on the documented date of delivery thereof.

14. Assignment by Lender; Successors and Assigns. This Note shall be binding upon Maker and Maker’s heirs, successors and assigns; provided however, Maker may not assign this Note without City’s prior written consent except as may be permitted in accordance with the City Deed of Trust and the Affordable Housing Resale Restrictions. City may assign its rights to receive the proceeds under this Note to any person or entity without the consent of Maker, and upon notice to Maker of such assignment, all payments shall be made to the assignee.

15. No Joint Venture. The relationship of Maker and City under this Note is solely that of a participant and administrator of an affordable housing program, and in no manner are the City and the Maker partners or joint ventures, nor do any of the City Documents establish a principal and agent relationship between City and Maker.

16. Attorneys’ Fees and Costs. If any legal action is filed to interpret or enforce this Note, the prevailing party shall be entitled to an award of its reasonable attorneys’ fees, costs and expenses incurred therein. Maker agrees to pay all costs and expenses (including reasonable attorneys’ fees) that City may incur in connection with enforcement of this Note and collection of sums payable hereunder whether or not suit is filed.
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Exhibit C

17. No Third-Party Beneficiaries. This Note shall not benefit or be enforceable by any person or entity except the City and the Maker and their respective successors and assigns.

18. Entire Agreement; Amendments. This Note, together with the Affordable Housing Resale Restrictions and the City Deed of Trust, sets forth the entire understanding between Maker and the City with respect to the subject matter hereof. Any previous representations, warranties, agreements, and understandings among the parties regarding the subject matter of the Affordable Housing Resale Restrictions, this Note and City Deed of Trust whether written or oral, are superseded by the terms of the Affordable Housing Resale Restrictions, this Note and the City Deed of Trust. This Note may be modified or amended only by a written instrument duly executed by City and Maker.

19. No City Waiver. Any waiver of any term or provision of this Note must be in writing.

No waiver of any breach, default or failure of condition under this Note or any other City Document shall be implied from City’s failure or delay in declaring a default or exercising any of City’s rights or remedies with respect to such breach, default or failure, or from any previous waiver of any similar or unrelated breach, default or failure, nor shall acceptance by City of any payment hereunder constitute a waiver of City’s right to require prompt payment of any remaining amounts owed. Without limiting the generality of the foregoing, City’s failure or delay in declaring any amount due hereunder shall not constitute a waiver of City’s right to declare such sum due for the same or any subsequent event that triggers Maker’s payment obligations hereunder.

20. Severability. If any provision of this Note shall be held by a court of competent jurisdiction to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions of this Note shall not be affected or impaired thereby.

21. Controlling Law and Venue. The terms of this Note shall be interpreted under the laws of the State of California without regard to principles of conflicts of law. This Note was entered into and is to be performed in the County of Orange, which is the exclusive venue for any action or dispute arising hereunder.

22. Captions. All captions and headings in this Note are for the purposes of reference and convenience and shall be disregarded for all other purposes, including the construction or enforcement of any of the provisions of this Note.

23. Joint and Several. The obligations of each signatory to this Note shall be joint and several.

24. Time of the Essence. Time is of the essence with regard to all matters contained in this Note.

MAKER and HOMEBUYER:
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Exhibit C

By:_______________________________
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Exhibit D

EXHIBIT D

FORM OF CITY DEED OF TRUST

CITY DEED OF TRUST

RECORDING REQUESTED BY,
AND WHEN RECORDED MAIL TO:

City of Santa Ana
20 Civic Center Plaza (M-30)
P.O. Box 1988
Santa Ana, California 92702
Attention: City Clerk

Free Recording pursuant to
Government Code 6103 & 27383

CITY DEED OF TRUST, ASSIGNMENT OF RENTS AND SECURITY

AGREEMENT

THIS PERFORMANCE DEED OF TRUST, ASSIGNMENT OF RENTS AND SECURITY AGREEMENT (“ Deed of Trust ”) is made as of _______________, 20__, by _______________ and _______________ (collectively, “ Trustor”) as Trustor, to the City of Santa Ana, as Trustee and Beneficiary (hereafter, "Trustee", "Beneficiary," or "City").

The Trustor, in consideration of the promises herein recited and the trust herein created, irrevocably and unconditionally grants, transfers, conveys and assigns to Trustee, in trust for the benefit of City, with power of sale and right of entry and possession, all of Trustor’s right, title and interest now held or hereafter acquired in and to the property located in the City of Santa Ana, Orange County, State of California, des cribed in the attached Exhibit 1 and more commonly known as: _________________ (APN: _____) (the “Property”); TOGETHER with the rents, issues, and profits of such Property, subject however, to the right, power, and authority granted and conferred on City in this Deed of Trust to collect and apply the rents, issues, and profits; and TOGETHER with all the improvements now or hereafter erected on the Property, and all easements, rights of way, and appurtenances thereto, and all fixtures now or hereafter attached to the Property, all of which, including replacements and additions thereto, shall be deemed to be and remain a part of the Property covered by this Deed of Trust; All of the foregoing, together with the Property, is herein co llectively referred to as the “Security.”
TO HAVE AND TO HOLD the Security, together with acquittances, to the Trustee, its successors and assigns forever;
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Exhibit D

TO SECURE to the City the payment of the sums, and the performance of the covenants and agreements o f the Trustor evidenced by (i) that certain Affordable Housing Resale Restrictions, Equity Sharing and Regulatory Agreement executed by and between Trustor and City, dated as of the date hereof and recorded substantially concurrently herewith (the “Affordable Housing Resale Restrictions”), and (ii) that certain City Promissory Note (the “ Note”) dated as of the date hereof and executed by Trustor for the benefit of City, pursuant to which Trustor is obligated to pay to City a City Equity Share, and all extensions, modifications, or renewals of the Note and the Affordable Housing Resale Restrictions . The Note and the Affordable Housing Resale Restrictions are incorporated herein by this reference; and TO SECURE the payment of all other sums, with interest thereon, advanced in accordance herewith to protect the security of this Deed of Trust and the performance of the covenants and agreements of Trustor herein contained.

NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, it is agreed as follows:

1. Trustor’s Estate. Trustor represents and warrants that Trustor is lawfully seized of the estate hereby conveyed, has the right to grant and convey the Security, and that other than this Deed of Trust, the Security is encumbered only by: (1) that certain deed of trust executed by Trustor and recorded against the Property substantially concurrently herewith to secure repayment of a loan made by ___________________ (the “ First Mortgage Lender”) to assist Trustor in the purchase of the Property and evidenced by a promissory note executed by Trustor in favor of the First Mortgage Lender in the original principal amount of [Dollars] ($ ____ )(the “First Mortgage Note”), and (2) the Affordable Housing Resale Restrictions. Trustor agrees to warrant and defend generally the title to the Security against all claims and demands, subject to any declarations, easements or restrictions listed in a schedule of exceptions to coverage in any title insurance policy insuring the City’s interest in the Security, and Trustor shall pay all costs and expenses, including cost of evidence of title and attorneys’ fees in a reasonable sum, in any such action or proceeding in which City or Trustee may appear, and in any suit brought by City to foreclose this Deed of Trust. As used in this Deed of Trust, the term “First Mortgage Lender” shall include all successors and assigns of the First Mortgage Lender with respect to the First Mortgage Note.

2. Note and Affordable Housing Resale Restrictions . Trustor will promptly pay when due all sums payable pursuant to the Note and shall perform all of Trustor’s covenants and obligations under the Note, the Affordable Housing Resale Restrictions , and this Deed of Trust.

The amount due under the Note is payab le upon transfer of the Property following expiration of the Affordability Term. The Affordability Term expires on [ADD DATE THAT IS 55 YEARS FROM CERTIFICATE OF OCCUPANCY].

3. Charges and Liens . Trustor will promptly pay when due, the interest, principal, and all other charges accruing under any deed of trust, mortgage, or other instrument encumbering the Property, and will pay when due directly to the payee thereof all taxes, assessments and other charges, fines and impositions affecting the Property. Upon request by the City, Trustor will promptly furnish to the City copies of all notices of amounts due described in this Section and evidence of payment of such amounts. Trustor shall pay when due each obligation secured by or reducible to a lien, charge or e ncumbrance which now does or later may encumber or appear to encumber all or part of the Property or any interest therein, whether or not such lien, charge or 55394.00101\43423340.1

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Exhibit D

encumbrance is or would be senior or subordinate to this Deed of Trust; provided however, Trustor will not be required to discharge the lien of the deed of trust securing the First Mortgage Note (the “First Mortgage Deed of Trust”), and Trustor will not be required to pay any tax, charge, lien or assessment described in this Section so long as Trustor is actively contesting its validity in good faith and by appropriate legal proceedings that will operate to prevent the enforcement of the lien or forfeiture of the Property or any part thereof. Trustor shall post security for the payment of such contested claims as may be requested by the City.

4. Protection of Security . If Trustor fails to perform any of the covenants and agreements set forth in this Deed of Trust, or if any action or proceeding is commenced that materially affects City’s interest in the Pr operty, including, but not limited to, default under any senior lienholder document, eminent domain, insolvency, code enforcement, arrangements or proceedings involving a bankrupt or decedent, foreclosure of any mortgage secured by the Property or sale of the Property under a power of sale of any instrument secured by the Property, City, at its option, without releasing Trustor from any obligation hereunder, may upon notice to Trustor, make such appearance, disburse such sums and take such action as is necessary to protect City’s interest, including, but not limited to, the purchase of insurance, disbursement of reasonable attorneys’ fees and entry upon the Property to make repairs. Any amounts disbursed by City pursuant to this Section, with interest thereo n, shall become additional indebtedness of Trustor secured by this Deed of Trust. Unless Trustor and City agree to other terms of payment, such amounts shall be payable upon notice from City to Trustor requesting payment thereof, and shall bear interest from the date of disbursement at the highest rate permissible under applicable law.

Nothing contained in this Section shall require City to incur any expense or take any action hereunder.

5. Inspection. The City may make, or cause to be made, reasonable entries upon the Property and inspections of the Security; provided that the City will give Trustor reasonable notice of inspection.

6. Title Insurance. At Trustor’s expense, Trustor shall purchase a CLTA lender’s policy of title insurance for the benefit of City, insuring this Deed of Trust as a secondary lien on the Property, with no delinquent taxes or assessment liens appearing as exceptions to title.

7. Hazard Insurance. Trustor shall keep the Property insured by a standard all -risk property insurance policy with e ndorsements for vandalism, malicious mischief, and special extended perils, in the full replacement value of the improvements, and with endorsements for increases in costs due to changes in code and inflation, with loss payable to City and any superior trust deed holder, as their interests may appear, and any other insurance required by the City.

The insurance carrier providing such insurance shall be licensed to do business in the State of California and may be chosen by Trustor, subject to approval by Cit y. All insurance policies and renewals thereof shall be in a form acceptable to the City, and shall include a standard mortgagee clause with standard lender's endorsement in favor of the holder of any senior lien and the City as their interests may appear and in a form acceptable to the City. Trustor shall provide City with copies of all policies and renewals thereof, certificates of insurance, all renewal notices and all receipts of paid premiums. In the event of loss, Trustor shall give prompt notice to t he insurance carrier and the City or its designated agent. The City, or its designated agent, may make 55394.00101\43423340.1

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Exhibit D

proof of loss if not made promptly by Trustor. The policies shall include an endorsement providing that City shall receive thirty (30) days’ advance writ ten notice of the cancellation, expiration or termination or any material change in the coverage afforded by any of the insurance policies required under this Section.

If the Property is acquired by the City, all right, title and interest of Trustor in and to any insurance policy and in and to the proceeds thereof resulting from damage to the Property prior to the sale or acquisition will pass to the City to the extent of the sums secured by this Deed of Trust immediately prior to such sale or acquisition, subject to the rights of the holder of any senior lien.

Renewal policies and any replacement policies, together with premium receipts satisfactory to the City, shall be delivered to the City at least thirty (30) days prior to the expiration of existing policies. Neither Trustee nor the City shall by reason of accepting, rejecting, approving or obtaining insurance incur any liability for the existence, nonexistence, form or legal sufficiency of such insurance, or solvency of any insurer for payment of losses . The application of proceeds pursuant to this Section shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice.

8. Awards and Damages. Subject to the rights of senior lienholders, all judgments, awards of damages, settlements and compensation made in connection with or in lieu of (a) taking of all or any part of or any interest in the Property by or under assertion of the power of eminent domain, (b) any damage to or destruction of the Property or a ny part thereof by insured casualty, and (c) any other injury or damage to all or any part of the Property, are hereby assigned to and shall be applied to the restoration or repair of the Property (if applicable) or paid to the City. The City is authorized and empowered (but not required) to collect and receive any such sums and is authorized to apply them in whole or in part upon any indebtedness or obligation secured hereby, in such order and manner as the City shall determine at its option. The City shal l be entitled to settle and adjust all claims under insurance policies provided under this Deed of Trust and may deduct and retain from the proceeds of such insurance the amount of all expenses incurred by it in connection with any such settlement or adjustment. All or any part of the amounts so collected and recovered by the City may be released to Trustor upon such conditions as the City may impose for its disposition. Application of all or any part of the amounts collected and received by the City or the release thereof shall not cure or waive any default under this Deed of Trust. If the Property is abandoned by Trustor, or if, after notice by City or its designated agent to Trustor that the condemnor or insurer offers to make an award or settle a claim f or damages, Trustor fails to respond to City within thirty (30) days after the date such notice is mailed, City or its designated agent is authorized to collect and apply the proceeds, at City’s option, either to restoration or repair of the Property or to the sums secured by this Deed of Trust

9. Maintenance. Trustor shall maintain the Property and all structures and landscaping thereon in good condition and repair. Trustor agrees to complete installation of landscaping as approved by the City, and to diligently maintain and care for installed landscaping, using generally accepted methods of cultivation and watering. Trustor shall not remove or demolish any building located on the Property, and agrees to complete or restore promptly and in good and workmanlike manner any building which may be constructed, damaged or destroyed thereon, and to pay when due all claims for labor performed and materials furnished therefor, and to comply with all laws affecting the Property or requiring any alterations or improvement s to be 55394.00101\43423340.1

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Exhibit D

made thereon. Trustor shall not commit or permit waste thereof, and shall not commit or permit any act upon the Property in violation of applicable laws. Trustor will comply with all applicable laws, ordinances and governmental regulations affectin g the Property or requiring any alteration or improvement thereof, and will not suffer or permit any violations of any such law, ordinance or governmental regulation, nor of any covenant, condition or restriction affecting the Property. If there arises a c ondition in contravention of this Section, and if the Trustor has not cured such condition within thirty (30) days after receiving a notice from City of such a condition, then in addition to any other rights available to City, City shall have the right (bu t not the obligation) to perform all acts necessary to cure such condition, and to establish or enforce a lien or other encumbrance against the Property to recover its cost of cure.

10. Occupancy. Trustor shall occupy the Property as Trustor’s primary residence, and the Property shall be used as the primary residence of Trustor and Trustor’s household and for no other purpose. The Property shall not be leased or rented by Trustor to any person or entity other than as expressly permitted by the Affordable Housing Resale Restrictions or consented to by City in writing. The City shall have the right to monitor whether the Property is owner -occupied by requesting that Trustor provide City with a written certification under penalty of perjury that the Property is owner-occupied, accompanied by supporting documentation reasonably satisfactory to the City.

11. Transfer. Trustor shall not allow any Further Encumbrance or Transfer of the Property (as such terms are defined in the Affordable Housing Resale Restrictions ) any without complying with all requirements of the Affordable Housing Resale Restrictions.

12. Assignment of Rents. Trustor hereby irrevocably, absolutely, presently and unconditionally assigns to City the rents, issues, revenue and profits of the Property. This is an absolute assignment and not an assignment for security only. Subject to the limitations on lease or rental of the Property as set forth herein and in the Affordable Housing Resale Restrictions, City hereby confers upon Trustor a license to collect and retain such rents, issues, revenue and profits, as they become due and payable prior to any Default hereunder. Upon the occurrence of any such Default, City may terminate such license without notice to or demand upon Trustor and without regard to the adequ acy of any security for the indebtedness hereby secured, and may either in person, by agent, or by a receiver to be appointed by a court, enter upon and take possession of the Property or any part thereof, and sue for or otherwise collect such rents, issue s, and profits, including those past due and unpaid, and apply the same, less costs and expenses of operation and collection, including reasonable attorneys’ fees, to any indebtedness secured hereby, and in such order as City may determine. City’s right to the rents, issues, revenue and profits of the Property does not depend upon whether or not City takes possession of the Property. The entering upon and taking possession of the Property, the collection of such rents, issues, revenue and profits, and the application thereof as aforesaid, shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. If a Default occurs while City is in possession of all or part of the Property and/or is collecting and applying rents as permitted under this Deed of Trust, City, Trustee and any receiver shall nevertheless be entitled to exercise and invoke every right and remedy afforded any of them under this Deed of Trust and at law or in equity, including the right to exercise the power of sale granted hereunder. Regardless of whether or not City, in person or by agent, takes actual possession of the Property, City shall not be deemed to be a 55394.00101\43423340.1

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Exhibit D

“mortgagee in possession,” shall not be responsible for performing any obligat ion of the lessor under any lease, shall not be liable in any manner for the Property, or the use, occupancy, enjoyment or operation of any part of it , and unless due solely to the willful misconduct or gross negligence of City, shall not be responsible f or any dangerous or defective condition of the Property or any negligence in the management, repair or control of the Property.

13. Default. An event of default (“Default”) shall arise hereunder upon the occurrence of any one or more of the following and the expiration of any applicable cure period:
a. Trustor fails to occupy the Property as Trustor’s principal residence; b. The sale, conveyance, encumbrance, refinance, assignment, or other transfer of the Property including without limitation, the lease or rental of the Property in violation of the Affordable Housing Resale Restrictions;
c. An event of default arises under the Note or the Affordable Housing Resale Restrictions, and such default remains uncured following the expiration of any applicable cure period;
d. Trustor fails to pay when due any sum payable pursuant to the Note, the Affordable Housing Resale Restrictions or this Deed of Trust; e. The Property is refinanced or encumbered in violation of the Affordable Housing Resale Restrictions or this Deed of Trust;
f. Trustor fails to maintain insurance on the Property as required by the Affordable Housing Resale Restrictions and this Deed of Trust, g. Subject to Trustor’s right to contest the following charges, Trustor fails to pay prior to delinquency taxes or assessments due on the Property or fails to pay when due any other charge that may result in a lien on the Property, and Trustor fails to cure such default within twenty (20) days of date of delinquency, but in all events prior to the time that the holder of such lien has the right to pursue foreclosure thereon;
h. Trustor declares bankruptcy or makes an assignment of assets for the benefit of creditors, or an order for relief is entered under federal bankruptcy laws as to Trustor, or Trustor is adjudicated as insolvent or bankrupt pursuant to the provisions of any state or federal insolvency or bankruptcy, or Trustor consents to, acquiesces in, or attempts to secure the appointment of, any receiver for all or any substantial part of the Property; i. The occurrence of an event of default under any loan secured by the Property and the continuance of such default beyond the expiration of all applicable cure periods such that the holder of such loan has the right to accelerate such loan. j. Trustor fails to observe or perform any other covenant, condition, or agreement to be observed or performed by Trustor pursuant to the Note, the Affordable Housing Resale Restrictions or this Deed of Trust.
55394.00101\43423340.1

DRAFT

Exhibit D

14. Remedies. Upon the occurrence of a Default, the giving of notice thereof and the expiration of any applicable cure period, City may, at its option, exercise any one or more of the following remedies:
a. Declare all of the sums payable under the Note to be immediately due and payable without further demand.
b. Pursue the exercise of the power of sale provided under this Deed of Trust. c. Either in person or by agent, with or without bringing any action or proceeding, or by a receiver appointed by a court, enter upon, take possession thereof (or any part thereof) and of any of the Security, in its own name or in the name of Trustee, and do any acts which it deems necessary or desirable to preserve the value or marketa bility of the Property, or part thereof or interest therein, increase the income therefrom, or protect the security thereof. The entering upon and taking possession of the Security shall not cure or waive any breach hereunder or invalidate any act done in response to such breach and, notwithstanding the continuance in possession of the Security, the City shall be entitled to exercise every right and remedy provided under the Note, this Deed of Trust, or the Affordable Housing Resale Restrictions, or by law upon occurrence of any uncured breach.
d. Commence an action to foreclose this Deed of Trust as a mortgage, appoint a receiver, or specifically enforce any of the covenants hereof. e. Exercise any option to purchase the Property, as authorized pursuant to the Affordable Housing Resale Restrictions.
f. Exercise all other rights and remedies provided herein, in the instruments by which the Trustor acquires title to any Security, or in any other document or agreement now or hereafter evidencing, creating or securing all or any portion of the obligations secured hereby. g. Exercise any other remedy provided by law or in equity.

15. Acceleration and Sale.
a. Notice of Default. Upon Trustor’s breach of any covenant or agreement of Trustor under the Note, the Affordable Housing Resal e Restrictions or this Deed of Trust, City shall mail notice to Trustor as provided in Section 24 hereof specifying: (i) the nature of the breach; (ii) the action required to cure such breach; (iii) a date no less than thirty (30) days from the date the notice is mailed to Trustor by which such breach must be cured or such shorter cure period as may be provided in the Note, the Affordable Housing Resale Restrictions or this Deed of Trust; and (iv) that failure to cure such breach on or before the date speci fied in the notice may result in acceleration of the Loan and the sale of the Property. The notice shall further inform Trustor of Trustor’s right to reinstate after acceleration and the right to bring a court action to assert the nonexistence of a default or any other defense of Trustor to acceleration and sale. If the breach is not cured on or before the date specified in the notice, City at City’s option declare all of the sums secured by this Deed of Trust to be immediately due and payable without further demand and may invoke the power of sale and/or pursue any other remedy provided herein or available under law. 55394.00101\43423340.1

DRAFT

Exhibit D

City shall be entitled to collect from the Trustor, or from the proceeds of the sale of the Property, all reasonable costs and expenses incurred in pursuing the remedies provided hereunder, including, but not limited to, reasonable attorneys’ fees.

If a non -monetary default is not reasonably capable of being cured within thirty (30) days, the City, in its sole and absolute discretion, may grant the Trustor or the First Mortgage Lender such additional time as is reasonably necessary to cure the default provided that the Trustor or the First Mortgage Lender (i) initiates corrective action within said period, and (ii) diligently, continually, and in good faith works to effect a cure as soon as possible.

Notwithstanding the cure periods established in this Section, in no event shall the City be precluded from sooner exercising any remedies if its security becomes or is about to become materially jeopardized by any failure to cure a default or the default is not cured within ninety (90) days after the first notice of default or delinquency is given. b. Trustor’s Right to Reinstate . Notwithstanding City’s acceleration of the sums secured by this Deed of Trust, Trustor will have the right to have any proceedings begun by City to enforce this Deed of Trust discontinued at any time prior to five (5) days before sale of the Property pursuant to the power of sale contained in this Deed of Trust or at any time prior to entry of the judgment enforcing this Deed of Trust if: (a) Trustor pays City all sums which would be then due under this Deed of Trust and the Note had no acceleration occurred; (b) Trustor pays all reasonable expenses incurred by City and Trustee in enforcing the covenants and agreements of Trustor contained in this Deed of Trust, including, but not limited to, reasonable attorneys’ fees; Trustor cures all breaches of any other covenants or agreements of Trustor set forth in the Affordable Housing Resale Restrictions and this Deed of Trust; and (d) Trustor takes such action as City may reasonably require to assure that the lien of this Deed of Trust, City’s interest in the Property and Trustor’s obligation to pay the sums and perform the obligations secured by this Deed of Trust shall continue unimpaired. Upon such payment and cure by Trustor, this Deed of Trust and the obligations secured hereby will remain in full force and effect as if no acceleration had occurred.
c. Sale. After delivery to Trustee of a Notice of Default and Demand for Sale and after the expiration of such time and the giving of such notice of default and sale as may then be required by law, and without demand on Trustor, Trustee shall sell the Property at the time and place of sale fi xed by it in said notice of sale, at public auction to the highest bidder for cash in lawful money of the United States of America, payable at time of sale. Trustee may postpone sale of all or any portion of the Property by public announcement at such time and place of sale and from time to time thereafter may postpone such sale by public announcement at the time and place fixed by the preceding postponement. Any person, including Trustor, Trustee or the City, may purchase at such sale. Upon such sale by Tr ustee it shall deliver to such purchaser its deed conveying the Property so sold, but without any covenant or warranty expressed or implied. The recitals in such deed of any matters or facts shall be conclusive proof of their truthfulness. Upon sale by Trustee and after deducting all costs, expenses and fees of Trustee, Trustee shall apply the proceeds of sale to the payment of the indebtedness hereby secured, including without limitation the indebtedness evidenced by the Note, any advances made or costs or expenses paid or incurred by City under this Deed of Trust, any indebtedness evidenced by any other instrument hereby 55394.00101\43423340.1

DRAFT

Exhibit D

secured, and all other sums then secured hereby, including without limitation, interest as provided in the Note and the Affordable Housing Resale Restrictions, in such order as the City shall direct; and then the remainder, if any, shall be paid to the person or persons legally entitled thereto.

16. Remedies Cumulative; No Waiver . No exercise of any right or remedy by the City or Trustee hereunder shall constitute a waiver of any other right or remedy herein contained or provided by law, and no delay or forbearance by the City or Trustee in exercising any such right or remedy hereunder shall operate as a waiver thereof or preclude the exercise t hereof in any continued or subsequent default hereunder. All remedies provided in this Deed of Trust are distinct and cumulative to any other right or remedy under this Deed of Trust or any other document, or afforded by law or equity, and may be exercised concurrently, independently or successively. No sale of the Property, forbearance on the part of City, or extension of the time for payment of the indebtedness hereby secured shall operate to release, discharge, waive, modify, change or affect the liability of Trustor either in whole or in part.

17. Indemnity. Trustor agrees to defend, indemnify, and hold the Santa Ana, and its elected and appointed officers, officials, employees, and agents harmless from all losses, damages, liabilities, claims, actions, judgments, costs, and reasonable attorneys’ fees that they may incur as a direct or indirect consequence of: (i) Trustor’s failure to perform any obligations as and when required by the Note, the Affordable Housing Resale Restrictions, or this Deed of Trust; or (ii) the failure at any time of any of Trustor’s representations or warranties herein or in the Affordable Housing Resale Restrictions or the Note to be true and correct.

18. Due on Transfer of the Property. If the Trustor sells, conveys, assigns, transfers, alienates, or otherwise disposes of its interest in the Property, either voluntarily or involuntarily or by operation of law, in part or in full, in violation of the Affordable Housing Resale Restrictions, the City may, at its option, require immediate payment in full of all sums due under the Note.

19. Reconveyance. Upon payment of all sums and satisfaction of all obligations secured by this Deed of Trust, including without limitation, payment of the City Equity Share as defined in the Affordable Housing Resale Restrictions, and upon the expiration or termination of the Affordable Housing Resale Restrictions, the City will provide a written request to the Trustee to reconvey the Security and will surrender this Deed of Trust and the Note to Trustee. The Trustee shall reconvey the Security without warranty and without charge to the person or persons legally entitled thereto. Such person or persons shall pay all costs of recordation, if any. The recitals in the reconveyance of any matters or facts shall be conclusive proof of the truthfulness thereof.

20. Trustee Substitution. The City, at its option and without prior notice, may from time to time, by written instrument, remove the Trustee and appoint a successor trustee pursuant to a written instrument executed b y City and duly acknowledged and recorded in the Official Records of Orange. Such instrument shall be conclusive proof of proper substitution of such successor Trustee or Trustees, who shall, without conveyance from the predecessor Trustee, succeed to all the title, estate, power and duties conferred upon the Trustee herein and by applicable law. Such instrument shall set forth the name of the Trustor, the original Trustee and the Beneficiary hereunder, the book and page where this Deed of Trust is recorded, and the name and address of the new Trustee.
55394.00101\43423340.1

DRAFT

Exhibit D

21. City’s Rights to Release. Without affecting the liability of any person for payment of any indebtedness hereby secured (other than any person released pursuant hereto), including without limitation any one or more endorsers or guarantors, and without affecting the lien hereof upon any of the Property not released pursuant hereto, at any time and from time to time without notice: (a) City may in its sole discretion: (i) release any person now or hereafter liable for payment of any or all such indebtedness, (ii) extend the time for or agree to alter the terms of payment of any or all of such indebtedness, and (iii) release or accept additional security for such indebtedness, or subordinate the lien or charge hereof; and (b) Trustee, acting pursuant to the written request of the City, may reconvey all or any part of the Property, consent to the making of any map or plot of the Land, join in granting any easement thereon, or join in any extension agreement of any agreement subordinating the lien or charge hereof.

22. Subordination. Absent the prior written consent of City, this Deed of Trust shall not be subordinated to any other deed of trust or encumbrance on the Property, except a First Lien, as allowed by the Affordable Housing Resale Restrictions.

23. Request for Notice. City requests that copies of any notice of default and notice of sale affecting the Property be sent to City at its address set forth herein. City shall record a Request for Notice of Default and Sale.

24. Notices. All notices, requests, demands, reports or other communications regarding this Deed of Trust shall be in writing and delivered: (i) personally; or (ii) by independent, reputable, overnight commercial courier; or (iii) by deposit in the United States mail, postage and fees fully prepaid, registered or certified mail, with return receipt requested, and addressed as follows, or to such other address as specified in written notice delivered to the parties pursuant to this Section:

To Trustor: At the Property address.

To City: City of Santa Ana
20 Civic Center Plaza (M-30)
Santa Ana, CA 92702
Attn: City Clerk
Any notice that is personally delivered (including by means of professional messenger service, courier service such as United Parcel Service or Federal Express, or by U.S. Postal Service), shall be deemed received on the documented date of delivery thereof.

25. Successors Bound . The terms of this Deed of Trust shall be binding upon the Trustor and the Trustor’s heirs, legatees, devisees, administrator s, executors, successors and assigns.

26. Attorneys’ Fees and Costs. If any legal action is filed to enforce or interpret this Deed of Trust, or the interpretation or enforcement thereof, the prevailing party shall be entitled to an award of its reasonable attorneys’ fees, costs and expenses incurred therein. 55394.00101\43423340.1

DRAFT

Exhibit D

27. No Waiver. Any waiver of any term or provision of this Deed of Trust must be in writing. No waiver shall be implied from any delay or failure by City to take action on any breach or default hereunder or to pursue any remedy allowed under this Deed of Trust or applicable law.

No failure or delay by City at any time to require strict performance of any provision of this Deed of Trust or to exercise any election contained herein or any right, power or remedy hereunder shall be construed as a waiver of any other provision or any succeeding breach of the same or any other provision hereof or a relinquishment for the future of such election.

28. No Third -Party Beneficiaries. This Deed of Trust shall not benefit or be enforceable by any person or entity except the City, the Trustee, and the Trustor and their respective successors and assigns.

29. Entire Agreement . This Deed of Trust, together with the Affordable Housing Resale Restrictions and the Note, sets forth the entire understanding between Trustor and the City with respect to the subject matter hereof. Any previous representations, warranties, agreements, and understandings among the parties regarding the subject matter of the Affordable Housing Resale Restrictions, this Deed of Trust and Note whether written or oral, are superseded by the terms of the Affordable Housing Resale Restrictions, the Note and this Deed of Trust.

30. Amendments. This Deed of Trust shall not be amended except by a written instrument duly execut ed by Trustor and Beneficiary and recorded in the Official Records of Orange.

31. Severability. If any provision of this Deed of Trust shall be held by a court of competent jurisdiction to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions of this Deed of Trust shall not be affected or impaired thereby.

32. Controlling Law and Venue. The terms of this Deed of Trust shall be interpreted under the laws of the State of California without regard to principles of conflicts of law. This Deed of Trust was entered into and is to be performed in the County of Orange, which is the exclusive venue for any action or dispute arising out of this Deed of Trust.

33. Captions and Gender. All captions and headings in this Deed of Trust are for the purposes of reference and convenience and shall be disregarded for all other purposes, including the construction or enforcement of any of provisions thereof. Whenever the context so requires, the masculine gender includes the feminine and /or neuter, and the singular number includes the plural.

34. Joint and Several. The obligations of each signatory to this Deed of Trust shall be joint and several.

35. Time of the Essence. Time is of the essence with regard to all matters contained in this Deed of Trust.

55394.00101\43423340.1

DRAFT

Exhibit D

[SIGNATURES ON FOLLOWING PAGE]

IN WITNESS WHEREOF, Trustor has executed this Deed of Trust as of the date first written above.

TRUSTOR:

By: _________________________
Print Name: ___________________
By: _________________________
Print Name: ____________________
(Signatures must be acknowledged by notary)

55394.00101\43423340.1

DRAFT

Exhibit D

CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
A notary public or other officer completing this
certificate verifies only the identity of the
individual who signed the document to which this
certificate is attached, and not the truthfulness,
accuracy, or validity of that document.

State of California County of Orange} ss.

On ____________________, 20___, before me, ___________________, a Notary Public, personally appeared _____________ who proved to me on the basis of satisfactory evidence to be the person/s whose name/s is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity/ies, and that by his/her/their signature/s on the instrument the person/s, or the entity upon behalf of which the person/s acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing is true and correct.

WITNESS my hand and official seal Signature of Notary Public

____________________________________________

55394.00101\43423340.1

DRAFT

Exhibit 1
of Deed of Trust (Legal Description)

EXHIBIT 1 OF DEED OF TRUST

LEGAL DESCRIPTION
55394.00101\43423340.1

Exhibit E

EXHIBIT E

INCOME VERIFICATION FORM
Affordable Unit Address: ________________________________________________________________ Head of Household (Print Name):

Current Address (if
different from above):

Telephone Number: Home: Work: Cell:

Email address:

Date of Birth: Social Security # or TIN:

Household Composition

List All Household Members Living in the Affordable Unit

Name Sex Age
Dependent
(Y/N)
Social Security #
or Taxpayer ID #

List additional household members on a separate sheet of paper.

55394.00101\43423340.1

Exhibit E

INCOME VERIFICATION FORM
Monthly Gross Income *

List All Sources of Income of All Household Members Living in the Affordable Unit

Part 1: Earned Income

Head of
Household
Other
Household
Members Total

1. Gross wages, before payroll deductions and
including overtime pay, commissions, fees, tips
and bonuses.
$ $ $

2. Net income from self employment, independent
contractor work or a business.
$ $ $

3. Social security and any payments from annuities,
insurance policies, pension/retirement funds,
disability or death benefits received periodically.
$ $ $

4. Payment in lieu of earnings, such as
unemployment, disability compensation, worker’s
compensation and severance pay.
$ $ $

5. Public assistance, welfare payments $ $ $

6. Alimony, child support, other periodic allowances $ $ $

7. Regular pay, special pay and allowances of
members of the Armed Forces
$ $ $

8. Other $ $ $

Subtotal: Monthly Earned Income $

Total Monthly Earned Income x 12 = $_______________ Total Annual Household Gross Earned Income

INCOME VERIFICATION FORM
Monthly Gross Income *
55394.00101\43423340.1

Exhibit E

List All Sources of Income of All Household Members Living in the Affordable Unit

Part 2: Investment Income

Head of
Household
Other Adult
Household
Members
Total
Household
Investment
Income

1. Interest paid on Bank and Savings accounts $ $ $

2. Dividends and other payments from stocks and
bonds
$ $ $

3. Income from real property (i.e. rental property) $ $ $

4. Other (describe) $ $ $

Subtotal: Monthly Investment Income: $

Total Monthly Investment Income x 12 = $_______________ Total Annual Household Investment Income

*Note: The following items are not considered income: casual or sporadic gifts; amounts specifically for or in reimbursement of medical expenses; lump sum payments such as inheritances, insurance payments, capital gains and settlement for personal or property losses; educational scholarships paid directly to the student or educational institution; special pay to a serviceman head of family away from home and under hostile fire; relocation payments under federal, state or local law; foster child care payments; value of coupon allotments for purpose of food under Food Stamp Act of 1964 which is in excess of amount actually charged the eligible household; payments received pursuant to participation in the following programs: VISTA, Service Learning Programs, and Special Volunteer Programs, SCORE, ACE, Retired Senior Volunteer Program, Foster Grandparent Program, Older American Community Services Program, and National Volunteer Program to Assist Small Business Experience.

55394.00101\43423340.1

Exhibit E

INCOME VERIFICATION FORM
Assets **

List the Current Value of All Assets of All Household Members Living in the Affordable Unit

If the Asset generates income, that income must be specified In Part 2 above

Head of
Household
Other Adult
Household
Members Total Value of
Assets Value Value

1. Bank and Savings accounts $ $ $

2. Stocks and bonds $ $ $

3. Real property (i.e. rental property) $ $ $

4. Other (describe) $ $ $

Total Asset Value $______________________

**Note: Necessary items, such as furniture and automobiles, used for personal use are excluded from household assets. Collections of items for hobby, investment or business purposes must be included in household assets. If the total value of household assets exceeds $5,000, the calculation of the household’s annual income shall include the greater of the actual amount of income, if any, derived from all of the household assets; or 10% of the total value of the assets.

55394.00101\43423340.1

Exhibit E

INCOME VERIFICATION FORM
If the total asset value exceeds $5,000, perform the calculations in the following table. If the total asset value is less than $5,000, the amount of investment income to be included in annual household income is $0.

Calculation of Investment Income to be Included in Annual Household Income

1. Total Annual Household Investment Income $

2. Total Asset Value $ x 10% $

The Greater of #1 or #2 = Investment Income to be Included in Annual Household Income $___________

Calculation of the Household’s Total Annual Income

Total Annual Household Gross Earned Income $
Total Investment Income to be Included in Annual Household Income $

Total Household Income $

Documentation
Attach True Copies of the Relevant Documents Listed Below

Paycheck stubs from three most recent
pay periods

Bank/Savings account verification

Employment verification

Self-employment verification
Three years Income tax returns for Title
Holders

Unemployment verification

Social security verification

Welfare verification

Alimony/child support verification

Disability income verification

Other (Describe)

55394.00101\43423340.1

Exhibit E

AFFIDAVIT
This Affidavit is made with the knowledge that it will be relied upon by _____________ and the City of Santa Ana to determine maximum income for eligibility to purchase the Affordable Unit listed above. (I/we) warrant that all information set forth in this document is true, correct and complete and based upon information (I/we) deem reliable and based upon such investigation as (I/we) deemed necessary.
(I/We) acknowledge that (I/we) have been advised that the making of any misrepresentation or misstatement in this affidavit will constitute a material breach of (my/our) purchase agreement and will additionally enable the seller to terminate the purchase contract and sell the Affordable Unit to another party.
(I/We) do hereby swear under penalty of perjury that the foregoing statements are true and correct and that this affidavit has been executed as of the date specified below by each adult member of the household which intends to occupy an Affordable Unit located at ______________________ ,Santa Ana, California.

Signature Date

Printed Name

Executed at __________________________________, Santa Ana, California

Signature Date

Printed Name

Executed at __________________________________, Santa Ana, California 55394.00101\43423340.1

Exhibit F

EXHIBIT F

CERTIFICATION OF CONTINUED OCCUPANCY

Date:

Owner(s) Name:

Address: Santa Ana, CA

We are the Owners of an Inclusionary Unit that was produced under the requirements of the City of Santa Ana Inclusionary Housing Ordinance. We understand and agree that the Inclusionary Unit must be used as our Primary Residence and for no other purpose.

By this Certification, we declare under penalty of perjury that:

1. We currently occupy the Inclusionary Unit; and

2. We have occupied the Inclusionary Unit for at least ten (10) out of the past twelve (12) months; and

3. We have not used the Inclusionary Unit for any other purpose than as our Primary Residence; and

4. We are not renting or leasing any part of the Inclusionary Unit to another party.

We have attached true and accurate copies of two utility bills or other documentation evidencing our continued occupancy of the Inclusionary Unit.

We acknowledge that any intentional or negligent misrepresentation in this Certification may result in civil liability and/or criminal penalties including, but not limited to, fine or imprisonment, or both, and liability for monetary damages under the provisions of Title 18, United States Code, Section 100.1, et seq.

Signed: _____________________________

Signed: _____________________________
55394.00101\43423340.1

Exhibit G

EXHIBIT G

FORM OF NOTICE OF AFFORDABILITY RESTRICTIONS ON TRANSFER OF

PROPERTY

RECORDING REQUESTED BY,
AND WHEN RECORDED MAIL TO:

City of Santa Ana
20 Civic Center Plaza (M-30)
P.O. Box 1988
Santa Ana, California 92702
Attention: City Clerk

Free Recording pursuant to
Government Code 6103 & 27383

NOTICE OF AFFORDABILITY RESTRICTIONS ON

TRANSFER OF PROPERTY

This Notice of Affordability Restrictions on Transfer of Property (or “Notice of Affordability Restrictions”) is executed and recorded pursuant to the Density Bonus Housing Agreement With Decla ration of Covenants, Conditions, and Restrictions (the "Density Bonus Agreement"), recorded on or about __________, 202_, in the Official Records of Orange County, against that certain real property generally located at_______________ (APN: ______) in the City of Santa Ana, California (“City”) as legally described in Exhi bit 1 hereto (“Property”). The City of Santa Ana, a municipal corporation (“City”), and
____________________________(collectively “Homebuyer”) have entered into that certain Affordable Hou sing Resale Restrictions, Equity Sharing, and Regulatory Agreement, dated concurrently herewith (“Affordable Housing Resale Restrictions”).

1. The Affordable Housing Resale Restrictions provides for affordability restrictions and restrictions on the transf er of the Property, as more particularly set forth in the Affordable Housing Resale Restrictions. A copy of the Affordable Housing Resale Restrictions is on file with City as a public record and is deemed incorporated herein. Reference is made to the Affordable Housing Resale Restrictions with regard to the complete text of the provisions of such agreement and all defined terms therein, which provides for affordability restrictions and restrictions on the transfer of the Property.

2. The Affordable Housing Resale Restrictions contains restrictions on the sale of the Property and an equity sharing agreement for Homebuyer to pay to the City certain proceeds from the sale of the Property upon the expiration of the Affordability Term for the Property. 55394.00101\43423340.1

Exhibit G

2. The Affordable Housing Resale Restrictions contains restrictions on the sale of the Property and an equity sharing agreement for Homebuyer to pay to the City certain proceeds from the sale of the Property upon the expiration of the Affordability Term for the Property. (A) For a period commencing upon the date on which the Property receives a certificate of occupancy, which occurred on [DATE], and terminating on the date that is fifty five (55) years later (the "Affordability Term"), the Property may only be transferred to another eligible, qualified Very Low Income Household, at an Affordable Sales Price; such restrictions are set forth at greater length in the Density Bonus Agreement and the Affordable Housing Resale Restrictions.
(B) Upon expiration of the Affordability Term, the City is entitled to an amount of the proceeds from any Transfer that is equal to the City Equity Share, which is secured by the City Deed of Trust. The City Equity Share is based on the following: (i) an amount equal to the difference between the fair market value of the Affordable Unit at the time of the initial purchase and the Affordable Sales Price (the "Initial Subsidy"), plus (ii) an amount equal to the product of (1) the appreciation of the Affordable Unit, as measured by the increase in the fair market value of the Affordable Unit at the time of the sale to the Homebuyer and the resale of the Affordable Unit, and (2) the percentage that the initial subsidy represented of the fair market value of the Affordable Unit when it was purchased by the Homebuyer (the "Proportionate Share of Appreciation"). The City Deed of Trust will not be released as an interest in the Property or otherwise reconveyed unless and until the City is paid the City Equity Share in accordance with the Affordable Housing Resale Restrictions.

3. Prior to a transfer of the Property, Homebuyer must comply with requirements of the Affordable Housing Resale Restrictions , including but not limited to the following requirements of Section 5:
a. Notice to City. Homebuyer shall send the Notice of Intent to Transfer to City pursuant to Section of the Affordable Housing Resale Restrictions. b. Qualification of Proposed Transferee. During the Affordability Term, the proposed Transferee shall provide City with sufficient information in the form provided by City including without limitation, a certification as to the income and family size of the proposed Transferee, for City to determine if the proposed Transferee i s a Very Low Income Household, and the proposed Affordable Sales Price.
c. Certificates from Parties. During the Affordability Term, Homebuyer and proposed Transferee each shall certify in writing, in a form acceptable to City, that the Transfer shall b e closed in accordance with, and only with, the terms of the sales contract and other documents submitted to and approved by City and that all consideration delivered by the proposed Transferee to owner has been fully disclosed to City. The written certif icate shall also include a provision that in the event a Transfer is made in violation of the terms of this Agreement or false or misleading statements are made in any documents or certificate submitted to City for its approval of the Transfer, City shall have the right to file an action at law or in equity to make the 55394.00101\43423340.1

Exhibit G

parties terminate and/or rescind the sales contract and/or declare the sale void notwithstanding the fact that the Transfer may have closed and become final as between Homebuyer and Transferee. d. Written Consent of City Required Before Transfer . During the Affordability Term, the purchase sale agreement or other contract for Transfer of the Property, and the Income Verification Form, shall be provided to the City, which shall have at least t hirty (30) days to review. The Property, and any interest therein, shall not be conveyed by any Transfer except with the express written consent of City, which consent shall be given only if the Transfer is in accordance with the provisions of this Agreement The Property, and any interest therein, shall not be conveyed by any Transfer except with the express written consent of City, which consent shall be given only if the Transfer is in accordance with the provisions of the Affordable Housing Resale Restrictions.
e. Notice of Prohibited Transfer. Within thirty (30) days after receiving all information required by the Affordable Housing Resale Restrictions, the City shall determine and give notice to Homebuyer as to whether the City consents to the Transfer as a Permitted Transfer, or if the City determines the proposed Transfer is a Prohibited Transfer. Any attempt to Transfer the Property without the City's written approval, or after the City has given notice of a Prohibited Transfer, shall be a Default of this Agreement, and the City may apply to a court of competent jurisdiction for specific performance of this Agreement, for an injunction prohibiting a proposed sale or Transfer in violation of this Agreement, for a declaration that the Prohibited Tran sfer is void, or for any such other relief as may be appropriate. f. Delivery of Documents. Upon the close of the proposed Transfer, Homebuyer and Transferee, as applicable, shall provide the City with a copy of the final sales contract, settlement statem ent, escrow instructions, all required certificates, and any other documents City may request.”

8. The Affordable Housing Resale Restrictions and the Density Bonus agreement both remain in full force and effect and are not amended or altered in any manner whatsoever by this Notice of Affordability Restrictions.

10. Capitalized terms shall have the meaning established under the Density Bonus Agreement or the Affordable Housing Resale Restrictions (including all Attachments or Exhibits thereto) excepting only to the extent as otherwise expressly provided under this Notice of Affordability Restrictions.

11. Persons having questions regarding this Notice of Affordability Restrictions, the Affordable Housing Resale Restrictions or the Density Bonus Agreement shou ld contact City to obtain copies.

HOMEBUYER:

By:

By:_________________________________

55394.00101\43423340.1

Exhibit G

(Signatures must be acknowledged by notary)

CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
A notary public or other officer completing this
certificate verifies only the identity of the
individual who signed the document to which this
certificate is attached, and not the truthfulness,
accuracy, or validity of that document.

State of California County of Orange} ss.

On ____________________, 20___, before me, _______________ ____, a Notary Public, personally appeared _____________ who proved to me on the basis of satisfactory evidence to be the person/s whose name/s is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/ their authorized capacity/ies, and that by his/her/their signature/s on the instrument the person/s, or the entity upon behalf of which the person/s acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of Californi a that the foregoing is true and correct.

WITNESS my hand and official seal Signature of Notary Public

____________________________________________

55394.00101\43423340.1

Exhibit 1
to Notice of Affordability Restrictions (Legal Description)

EXHIBIT 1 TO NOTICE OF AFFORDABILITY RESTRICTIONS

LEGAL DESCRIPTION

55394.00101\43423340.1

Exhibit H

Exhibit H

FORM OF REQUEST FOR NOTICE OF DEFAULT

RECORDING REQUESTED BY,
AND WHEN RECORDED MAIL TO:

City of Santa Ana
20 Civic Center Plaza (M-30)
P.O. Box 1988
Santa Ana, California 92702
Attention: City Clerk

Free Recording pursuant to
Government Code 6103 & 27383

REQUEST FOR NOTICE UNDER CIVIL CODE SECTION 2924B
In accordance with California Civil Code Section 2924b request is hereby made that a copy of any Notice of Default and a copy of any Notice of Sale under the Deeds of Trust recorded as Instrument Nos. , , and on _______ in the Official Records of County of Orange , California, and
describing land therein as:
[See Exhibit 1 attached hereto]
executed by ______________________________________, as Trustor/Borrower, in which the City of Santa Ana is named as Be neficiary and Trustee, be mailed to:

City of Santa Ana, 20 Civic Center Plaza (M-30) P.O. Box 1988, Santa Ana, CA 92702, Attention:

City Clerk.
[Signature on next page]
55394.00101\43423340.1

Exhibit H

ATTEST: CITY OF SANTA ANA

Jennifer Hall Alvaro Nuñez
City Clerk City Manager

APPROVED AS TO FORM:

By: [NAME]
City Attorney

55394.00101\43423340.1

Exhibit 1
to Request for Default (Legal Description)

EXHIBIT 1 TO REQUEST FOR DEFAULT

LEGAL DESCRIPTION