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Home My WebLink About14 COLUMBUS SQUARE 06-20-05 AGENDA REPORT Agenda Item ~ Reviewed: I J!\ City Manager ~- Finance Director NiA MEETING DATE: JUNE 20, 2005 FROM: WilLIAM HUSTON, CITY MANAGER COMMUNITY DEVELOPMENT DEPARTMENT TO: SUBJECT: COLUMBUS SQUARE HOUSING AGREEMENT (TENTATIVE TRACT MAP 16581) SUMMARY On February 22, 2005, the City Council approved Tentative Tract Map 16581 for the subdivision of 105.5 acres for the purpose of developing 1,077 residential units. As a condition of the Tentative Tract Map, the applicant is required to enter into a Housing Agreement with the City to insure implementation of the Affordable Housing requirements of the Specific Plan, the City's Density Bonus Ordinance, and the City approved "Affordable Housing Plan, Density Bonus Application." The Columbus Square Housing Agreement prepared by the City Attorney and executed by Moffett Meadows Partners fulfills this condition of approval. ApplicanV Owner: Moffett Meadows Partners, LlC RECOMMENDATION: That the City Council authorize the Mayor to execute the Housing Agreement (Columbus Square) on behalf of the City of Tustin. FISCAL IMPACT: There are no associated fiscal impacts associated with the execution of this agreement. BACKGROUND/DISCUSSION: On February 22, 2005, the City Council approved Tentative Tract Map 16581 for the subdivision of 105.5 acres for the purpose of developing 1,077 residential units. As a condition of the Tentative Tract Map, the applicant is required to enter into a Housing Agreement with the City to insure implementation of the Affordable Housing requirements of the Specific Plan, the City's Density Bonus Ordinance, and the City approved "Affordable Housing Plan, Density Bonus Application." Specifically, Condition 2.4 requires: City Council Report Housing Agreement Tustin Square Page 2 of 2 Prior to recordation of the first final map including a conveyance map, or first building permit, whichever occurs first, the applicant shall enter into a Housing Agreement with the City to ensure implementation of the Affordable Housing requirements of the Specific Plan, the City's Density Bonus Ordinance, the City approved "Affordable Housing Plan, Density Bonus Application," and the City's Affordable Housing Policy and compliance with California Health and Safety Code Section 33413(b)(2). The development shall include 266 affordable units in Planning Areas 4 and 5 including twenty-five (25) affordable units transferred from Planning Area 21 to Planning Area 5. The Columbus Square Housing Agreement prepared by the City Attorney and executed by Moffett Meadows Partners fulfills this and various related conditions of approval. ~,;/~~'~; Izabeth A. Blnsack Community Development Director Attachment: Housing Agreement (Columbus Square) Due to the voluminous nature of the document, the Agreement is available for review in the City Clerk's office during business hours and wíll be available at the June 20th Council Meeting. S:\CddlCCREPORT\Columbus Square - Housing Agreemen - finall HOUSING AGREEMENT (COLUMBUS SQUARE) THIS HOUSING AGREEMENT is made and entered into as of 2005, by and belween Moffett Meadows Partners, LLC, a Delaware Limiled Liability Company (hereinafter the "Developer") and the City of Tustin, a municipal corporation (the "City"). RECITALS I. Developer owns certain real property in Tustin, California that it plans to develop as "Columbus Square." 2. The Columbus Square real property is more particularly described in Attachment No. I, attached hereto and incorporated herein by this reference (the "Property"). 3. In order to develop the Property, the Developer must comply with the MCAS, Tustin Specific Plan ("Specific Plan"), and applicable City ordinances and approvals, such as Ordinance No. 1297, City Council Resolution No. CC 05-40 and Planning Commission Resolutions No. 3951 and 3953 ("City Approvals"). 4. The Specific Plan requires the Developer to build a certain percentage, plus certain numbers of housing units in specified Planning Areas that will be sold to persons and families of very low, low and moderate income levels ("Affordable Housing Units"). 5. The Specific Plan also requires a housing agreement between the City and Developer for deed restrictions to insure the continued affordability of for-sale Atfordable Housing Units as required by California Redevelopment Law, [Health and Safety Code Section 33334.3(f)(I)(B) and 33413(b)], and that the Agreement address: (I) number of units by type, location, and bedroom count; (2) standards for qualifying income and maximum rent or sales price; and (3) parties responsible for qualifying sales price and incomes. 6. Chapter 1 of Title 9, of the Tustin City Code ("TCC"), [TCC Sections 9111- 9142] ("Density Bonus Ordinance"), provides certain incentives for the construction of Affordable Housing Units, namely a density bonus ("Density Bonus Units") and one (I) regulalory concession or incentive. 7. Developer submitted an "Affordable Housing Plan and Density Bonus Applicalion" for Columbus Square and Columbus Grove, another housing development owned by Developer and also subject to the Specific Plan (the "Application"). 8. The Application requested Density Bonus Units to be located in Columbus Square and the transfer from the Columbus Grove property to the Property of the obligations in the Specific Plan to develop and sell units for low and very low income households. 202435.3 Ju", 13. 2oo5 9. The City Council approved the Application through its approval of entitlements for the Property and the Columbus Grove property, thereby giving the benefits of the Density Bonus Ordinance 10 the Columbus Square property while correspondingly obligating Developer 10 meet the Specific Plan obligations for the Columbus Grove property 10 provide low and very low income units on the Property, in addition to the Specific Plan obligations for the Developer to develop and sell a certain number of unils for very low, low and moderale income households on the Property. 10. Resolution No. CC 05-40 requires that prior to recordation of the first final map including, conveyance map, or first building permit, whichever occurs first, the Developer shall enter into a Housing Agreement with the City to insure implementation of the Affordable Housing Requirements of the Specific Plan, the City's Density Bonus Ordinance, the City- approved "Affordable Housing Plan, Density Bonus Application, the City's "Affordable Housing Policy", and compliance with California Health and Safely Code Section 33413(b)(2). II. In Columbus Square the Developer is required to provide two hundred sixty-six (266) Affordable Housing Units in Planning Areas 4 and 5, including twenty-five (25) Affordable Housing Units transferred from Planning Area 21 (a portion of Columbus Grove) 10 Planning Area 5 (a portion of Columbus Square). 12. The City owns Reuse Plan Disposal Parcels I-H-17, I-H-5, I-H-4, and I-H-3 which are parcels of land adjacent to the Property (the "City Benefitted Property"). This Agreement is intended to benefit the Reuse Plan Disposal Parcels referenced above, and the obligations and rights herein are intended to run with the land. 13. Developer and City wish to provide for the terms and conditions of a Housing Agreement that complies with State Law, the Specific Plan, and City Approvals. NOW, THEREFORE, based on the recitals, and mutual promises and covenants contained herein, the parties agree as follows: AGREEMENT I. Definitions. 1.1. "Affordable Housing Cost for Lower Income Households" means a cost per Unit for Lower Income Households as more particularly defined in Health and Safety Code Section 50052.5(b)(3) and as generally described herein as a price per Unit calculated as follows: For Lower Income Households whose income exceeds the maximum income for Very Low Income Households and does not exceed seventy percent (70%) of the annual Orange County Median Income, adjusted for family size appropriate for the Unit, "Affordable Housing Cost for Lower Income Households" shall be a Monthly Housing Cost not in excess of one-twelfth of the product of thirty percent (30%) times seventy percent (70%) of the annual Orange County Median Income, adjusted for family size appropriate for the Unit. For Lower Income Households whose gross income exceeds seventy percent (70%) of the annual Orange County Median Income adjusted per family size, in accordance with Health and Safety Code Section 50052.5(b)(3), the City has determined and hereby agrees that the "Affordable Housing Cost for Lower Income Households" shall be a Monthly Housing Cost not in excess of thirty percent 202435.3 Ju", 13.2005 (30%) times eighty percent (80%) of the annual Orange County Median Income, adjusted for family size appropriate for Ihe Unit. 1.2. "Affordable Housing Cost for Moderate Income Households" means a cost per Unit for moderate income households as more particularly defined in Health and Safety Code Section SOOS2.S(b)( 4) and as generally described in this Agreement as a price per Unil calculaled as follows; "Annual Affordable Housing Cost for Moderate Income Households" shall not be less than twenty-eight percent (28%) of the gross annual income of the household, nor exceed the product of thirty-five percent (3S%) times one hundred ten percent (110%) of the annual Orange County Median Income, adjusted for family size appropriate for the Unit. Notwithstanding the foregoing, in accordance with Health and Safety Code Section SOOS2.S(b)(4), the City has determined and hereby agrees that, for a Moderate Income Household whose gross income exceeds one hundred ten percent (110%) of the annual Orange County Median Income adjusted for family size appropriate for the Unit, in accordance with Health and Safety Code Section SOOS2.S(b)(4), the City has determined and hereby agrees that the "Affordable Housing Cost for Moderate Income Households" shall be a Monthly Housing Cost not in excess of thirty- five percent (3S%) times one hundred twenty percent (120%) of the annual Orange County Median Income, adjusted for family size appropriate for the Unit. Affordable Housing Cost of Moderate Income Households shall take into account principal and interest, loan insurance, property taxes, fire and casualty insurance, utilities and Homeowners' Association fees. 1.3. "Affordable Housing Cost for Very Low Income Households" means the cost per Unit for Very Low Income Households as more particularly defined in Health and Safety Code Section SOOS2.S(b)(2) and as generally described herein as a price per Unit which results in Monthly Housing Costs for the purchaser which shall not exceed one-twelfth of thirty percent (30%) times fifty percent (SO%) of the annual Orange County Median Income, adjusted for Household size appropriate for the Unit. 1.4. "Affordable Housing Covenant" means one of the covenants in the form attached hereto as Attachments No. S. 6. and 7 to be recorded against the title to each Affordable Housing Unit, as applicable, and as defined herein. I.S. "Affordable Housing Note" shall have the meaning set forth in Section 3.2. 1.6. "Affordable Housing Option Agreement" means the agreement that gives the City an option to purchase a Unit which shall be exercisable in the event that (a) an owner of a Unit conveys all, or substantially all of the Owner's interest in the Unit, or (b) the owner of a Unit is in breach of the owner's obligations in the Affordable Housing Covenant. The Affordable Housing Option Agreement is referred to in the Affordable Housing Covenant, and is Exhibit "F" to that covenant. 1.7. "Affordable Housing Deed of Trust" shall have the meaning set forth in Section 3.2. 1.8. "Affordable Housing Unit" means one of two hundred sixty-six (266) units to be provided by Developer for sale at an Affordable Housing Cost for Very Low, Lower or Moderate Income Households and to be occupied by Owner-Occupiers who are Very Low, Lower or Moderate Income Households. 202435.3 lunol3,2005 1.9. "Agreement" means this Housing Agreement, together with all Attachments. 1.10. "City" means the City of Tustin, California. 1.11. "City Benefited Property" means the parcels owned by the City as of the effective date of this Agreement which are benefited by the covenants, agreement and restrictions set forth in Recital 12 of this Agreement and the Affordable Housing Covenants, and which are described in Exhibit B to each Affordable Housing Covenant. 1.12. "Developer" means Moffett Meadows Partners, LLC, or their successor(s) in interest or assigns with respect to any portion of the Columbus Square real property, which assignee has executed a City-approved assignment agreement, as described in Section 6. 1.13. "Lower Income Households" means a household consisting of persons and families whose gross income does not exceed the qualifying limits for lower income families as set forth in Health and Safety Code Section 50079.5. 1.14. "Market Rate Unit" is a housing unit approved by the City for Columbus Square that does not constitute an Affordable Housing Unit. 1.15. "MCAS Tustin" means the former Marine Corps Air Station-Tustin. 1.16. "Memorandum of Agreement" shall have the meaning set forth in Section 3.6. 1.17. "Moderate Income Household' means a household consisting of persons and families whose gross income does not exceed the qualifying limits for moderate income families as set forth in Health and Safety Code Section 50093. 1.18. "Orange County Median Income" means the median income of all households in Orange County, California, as established by official annual publications of the Federal Department of Housing and Urban Development as released by the State Department of Housing and Community Development. 1.19. "Owner-Occupier" means a person or persons who will own in fee and occupy, for residential purposes, an individual Affordable Housing Unit. 1.20. "Party" means a party to this Agreement, including lawful successors and assigns. 1.21. "Planning Area(s)" means a land use planning area designated by number in the Specific Plan. 1.22. "Reimbursement Agreement" means that certain agreement whereby an owner of an Affordable Housing Unit agrees to reimburse the City for certain amounts the City may advance on behalf of the owner. The Reimbursement Agreement is referred to in the Affordable Housing Covenant, and is attached as Exhibit "E" to the Affordable Housing Covenant. 202435.3 4 Jun, 13.2005 1.23. "Very Low Income Household" means a household consisting of persons and families whose gross income does not exceed the qualifying units for low income families as set forth in Health and Safety Code Section 50105. 2. Approved Housinl! Plan. includinl! Affordable Housinl! Units. The total number of dwelling units approved for Columbus Square, including the Affordable Housing Units, their bedroom count and Iheir proposed respective locations within Columbus Square are shown in Attachment No.2 and incorporated herein by this reference. 3. Affordable Housinl! Unit Oblil!ations. 3.1. Affordable Housing Unit Obligations (Number. Location. Bedrooms. Sale). 3.1.1. Two hundred sixty-six (266) Affordable Housing Units, as identified in Attachment No.2, shall be made available for sale to qualified persons at an Affordable Housing Cost for Very Low, Lower or Moderate Income Households, and shall be occupied by Owner- Occupiers. Of these two hundred sixty-six (266) units, a minimum of sixty-one (61) Units shall be sold to Very Low Income Households, a minimum of one hundred twenty-five (125) Units shall be sold to Lower Income Households, and a minimum of eighty (80) Units shall be sold to Moderate Income Households. The foregoing includes thirty-six (36) Units for Very Low Income Households, sixty-one (61) Units for Lower Income Households, and fifty-six (56) Units for Moderate Income Households, all to be located in the Senior Housing described in Attachment No.2 and as shown on Tentative Tract Map No. 16581. Such Units shall be constructed in accordance with the conditions of approval contained in Resolution CC 05-40, including Conditions 2.1, 2.2, and 2.3. 3.1.2. The Developer shall submit to the City an Affordable Housing Purchaser Selection and Criteria Plan for Redevelopment Agency review and approval thirty (30) days prior to approval of a final map or issuance of a building permit. The City will approve or disapprove the Affordable Housing Purchaser Selection and Criteria Plan with in Iwenty (20) calendar days. The Developer shall initiate marketing and sales of the Affordable Housing Units after City's Approval of Developer's Affordable Housing Purchaser Selection and Criteria Plan. Sale of Affordable Housing Units can begin after final map recordation and all necessary California Department of Real Estate approvals. Prior to execution of a sales contract for a Unit, Developer shall submit a certificate to City affirming the purchaser's income qualifications to purchase the Unit, and Cily shall verify in writing. The developer shall submit to City individual escrow instructions for buyers of Affordable Housing Unils and all other related documents at least twenty (20) calendar days prior to close of escrow of individual Affordable Housing Units and with submission of individual escrow instructions and related items by developer to City. The City shall approve or disapprove individual escrow instructions and related items for buys of Affordable Housing Units within ten (10) calendar days of following submission by developer. 3.2. Documents Required at Close of Escrow for an Affordable Housing Unit. In compliance with Section 3.1 herein, the Developer shall only sell Affordable Housing Units to Owner-Occupiers. At the time of closing of each sale of an Affordable Housing Unit to an Owner-Occupier, the Developer shall cause to be executed and recorded against such Affordable Housing Unit an appropriate Affordable Housing Covenant, Affordable Housing Deed of Trust, and an Affordable Housing Option Agreement (Exhibit "F" to each Affordable Housing 202435.3 Ju", 13.2005 Covenant). In addition, Developer shall require the prospective Owner-Occupier to execute the Reimbursement Agreement (Exhibit "E" to each Affordable Housing Covenant), which executed agreement shall be delivered to the City as a condition of close of escrow on the Unit. In order to enable City to meet its continuing affordable housing obligations under State law, and because the City has facilitated the provision of the Affordable Housing Units through its adoption of the Specific Plan and housing incentives in the Density Bonus Ordinance, and provided that the Affordable Housing Covenanl, Affordable Housing Deed of Trust and Affordable Housing Option Agreement are recorded concurrently with the closing of the sale of the Affordable Housing Unit, the City agrees to accept a promissory note executed by the purchasing Owner- Occupier (the "Affordable Housing Note"), which Affordable Housing Note shall be in an amount equal to the difference between the appraised market value of the Unit if it was a Markel Rate Unit, and the sales price required to sell the Unit at an Affordable Housing Cost for Very Low, Lower, or Moderate Income Households, as applicable. The Affordable Housing Note shall be in the form attached hereto as Attachment No.3. Each Affordable Housing Note shall be secured by a deed of trust executed by the purchasing Owner-Occupier and recorded against the Unit at the time of the closing of such sale (the "Affordable Housing Deed of Trust"). The Affordable Housing Deed of Trust shall be in the form attached hereto as Attachment No.4 and shall be subordinate in priority only to the monetary lien of a purchase money deed of trust also recorded at the time of closing of the sale securing an amount not in excess of the Affordable Housing Cost for a Very Low, Lower, or Moderate Income Household, as applicable. 3.3. Covenanl Re: Affordable Housing Unils. 3.3.1. The Developer covenants and agrees for itself, its successors, its assigns and every successor in interest to an Affordable Housing Unit that, for a period terminating forty-five (45) years from the date of the closing of the initial sale of the Unit to a member of the home buying public: (a) Affordable Housing Units designated in Attachment No.2 as being for sale to Very Low Income Households shall only be sold to and occupied by Very Low Income Households; (b) Affordable Housing Units designated in Attachment No.2 as being for sale to and occupied by Lower Income Households shall only be sold to Lower Income Households; and (c) Affordable Housing Units designated for sale to and occupied by Moderate Income Households shall only be sold to Moderate Income Households. The Developer also covenants and agrees for itself, its successors, its assigns and every successor in interest to an Affordable Housing Unit, that, for a period terminating forty-five (45) years from the date of the closing of the sale of an Affordable Unit to an Owner-Occupier, that the Affordable Housing Units designated in Attachment No.2: (a) as being for sale to Very Low Income Households shall be sold only at a price not in excess of an Affordable Housing Cost for Very Low Income Households; (b) as being for sale to a Lower Income Household shall only be sold at a price not in excess of an Affordable Housing Cost for Lower Income Households; (c) as being for sale to a Moderate Income Household shall only be sold at a price not in excess of an Affordable Housing Cost for Moderate Income Households; and (d) such Units will only be occupied by the purchasing Owner-Occupiers as their principal place of residence, and shall not be rented. 3.3.2. In order to impose upon purchasers of Affordable Housing Units the obligations set forth in Section 3.3.1, concurrently with the recordation of the grant deed for the Developer's conveyance of each Affordable Unit, there shall be recorded against each Affordable Housing Unit an "Affordable Housing Covenant," substantially in the form of Attachments No.5. 6. or 7 hereto, and an "Affordable Housing Deed of Trust," which Deed of 202435.3 Jun, 13.2005 Trust is to secure the obligations of the Owner-Occupier set forth in the Affordable Housing Covenant, the Reimbursement Agreement, and the Affordable Housing Note. 3.3.3. In addition, the Developer shall cause to be included in the grant deed for each Affordable Housing Unit (a) references to the Affordable Housing Covenant and the obligation of a Transferee of a Unit (as defined in the Affordable Housing Covenant to be bound by all of the obligations of Homeowner set forth in the Affordable Housing Covenant, (b) a reference to the Affordable Housing Deed of Trust, (c) a reference to the Affordable Housing Option Agreement, (d) a reference to the Reimbursement Agreement, (e) a reference to the due on sale provisions of the Affordable Housing Note, and (f) a covenant that will require the Transferee, and any successor and assign of the Transferee, to include in any document transferring (as defined in the Affordable Housing Covenant) the Unit, a reference to the Affordable Housing Covenant, the Affordable Housing Deed of Trust, the Affordable Housing Option Agreement, the Reimbursement Agreement, the due on sale provisions of the Affordable Housing Note, and the obligation of the Transferee to be bound by the obligations set forth in the Affordable Housing Covenant, the Affordable Housing Deed of Trust, the Affordable Housing Option Agreement, the Reimbursement Agreement and the due on sale provisions of the Affordable Housing Note. 3.3.4. In order to enable an owner of an Affordable Housing Unit to comply with the obligations described in the Affordable Housing Covenant, the City shall waive the right of the City to exercise its option to purchase set forth in the Affordable Housing Option Agreement, provided that all of the following occur: (a) the Unit is sold to an Owner-Occupier and not rented; (b) the Unit is sold at a price not in excess of the then appropriate Affordable Housing Cost for Very Low, Lower, or Moderate Income Households for the Unit; (c) the owner who intends to sell the Unit and all of that owner's predecessors in interest have fully complied with the Affordable Housing Covenant; (d) the purchaser agrees to be bound by the Affordable Housing Covenant, the Option Agreement and the Reimbursement Agreement; (e) the purchaser agrees to increase the amount of the Affordable Housing Note as provided in this Section, (f) the City receives a title policy, in an amount equal 10 the amount then due on the Affordable Housing Note as increased as provided in this Section, insuring the Affordable Housing Deed of Trust as a monetary lien of second priority subordinate in priority among monetary liens only to the monetary lien of any purchase money deed of trust recorded at the time of closing of the sale which deed of trust shall secure an amount not in excess of the then fair market value of the Unit less the amount of the Affordable Housing Note increased as provided in this Section, and (g) the City is reimbursed for its costs related to the transaction. The amount due on the Affordable Housing Note secured by the Affordable Housing Unit being sold shall be increased by the amount by which the fair market value of the Unit at the time of the closing of the sale is in excess of the sum of: (x) the amount of principal and interest then payable on the Affordable Housing Note secured by the Unit and (y) the Affordable Housing Cost of such Unit as of the time of the closing ofthe sale. Except for such increase in the amount of the Affordable Housing Note, the Affordable Housing Note, the Affordable Housing Deed of Trust, the Reimbursement Agreement and the Affordable Housing Option Agreement shall remain in full force and effect. 3.3.5. The City and the Developer hereby agree that (a) this Agreement is entered into in order to achieve a stabilized community of Owner-Occupied Affordable Housing Units, and to enable the City and its successors and assigns to enforce the Affordable Housing Covenant; (b) that it is the intention of the City and the Developer that the City and its successors 202435.3 Jun, 13.2005 and assigns be empowered to enforce the covenants contained in the Affordable Housing Covenant; and (c) that the Affordable Housing Covenant does empower the City and its successors and assigns 10 enforce Ihe covenants conlained in Ihe Affordable Housing Covenanl, and that the Affordable Housing Covenant should be so construed and interpreted. 3.4. Nondiscrimination and Equal Opportunitv. The Developer covenants and agrees for ilself, its successors, its assigns and every successor in inleresl 10 all or a portion of Ihe Property or any part thereof, there shall be no discriminalion against or segregalion of any person, or group of persons, on account of race, color, creed, religion, sex sexual orientation, marital status, national origin or ancestry in the sale, Iransfer, use, occupancy, tenure or enjoyment of the Property or any portions thereof, nor shall the Developer itself or any person claim under or through it establish or permit any such practice or practices of discriminalion or segregation with reference to the selection, location, number, use or occupancy of purchasers of the Property, or any portion thereof. 3.5. Compliance with Densitv Bonus Ordinance, Specific Plan, and Applicable State Law. The City and the Developer hereby agree that the provisions of this Agreement comply with Ihe Specific Plan, Density Bonus Ordinance, California Government Code Seclion 65915, and California Health and Safety Code Sections 33334.3, 33413(b) and 33334.14, and thaI Ihe Agreement fully satisfies the above-mentioned ordinances and State statutes. 3.6. Memorandum of Agreement. A Memorandum of Agreemenl, substantially in the form of Attachment No.8, attached hereto and incorporated herein by Ihis reference, shall be recorded against the Property upon execution of this Agreement. 4. Potential and Material Defaults. 4.1. Potential Defaults. Except as otherwise provided in this Agreement, in the event either Party (the "Defaulting Party") fails to perform, or delays in the performance of, any obligation, in whole or in part, required to be performed by Ihe Defaulling Party as provided in this Agreement (a "Potential Default"), the other party (the "Injured Party") may give written notice of such Potential Default to the Defaulting Party, which notice shall stale the particulars of the Potential Default. The City and the Developer agree 10 cooperate in good faith and meet and confer regarding such default. 4.2. Material Default. A Potential Default under Section 4.1 shall become a "Material Default" in the event the Potential Default is not cured within Ihirty (30) days of receipt of a written nolice of such Potential Default from the Injured Party; provided that if such cure cannot be reasonably accomplished within such period, then within ninety (90) days after receiving written notice of the Potential Default, but only if the Defaulting Party has commenced such cure within such period and diligently pursues such cure to completion, or within such longer period of time as may be expressly provided in this Agreement with respect to the Potential Default. The lime periods set forth above to cure within the time periods sel forth above, each Potential Default shall become a Material Default that shall be deemed to have occurred upon the expiration of the applicable cure period. 4.3. Specific Performance. In the event the Developer is in Material Default, in addition to whatever other rights the City may have in law or at equity, or as otherwise provided 202435.3 Jun, 13.2005 in this Agreement, the City may seek to specifically enforce the obligations of the Developer under this Agreement. 4.4. No Waiver. The failure to, or delay in, giving notice of a Potential Default shall not constitute a waiver of any default, nor shall it change the time of default. Except as otherwise expressly provided in this Agreement, any failures or delays by either Party in asserting any of ils rights and remedies as to any default shall not operale as a waiver of any default or of any such rights or remedies. Delays, by either Party in asserting any of its rights and remedies, shall not deprive either Party of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert, or enforce any such rights or remedies. 5. Governinl!: Law / Consent to Jurisdiction. 5.1. All queslions with respect to the interpretation of this Agreement and the rights and liabilities of the parties to this Agreement shall be governed by the laws of the State of California. 5.2. The Parties hereto agree that all aclions or proceedings arising in connection wilh this Agreement shall be tried and litigated exclusively in the Superior Court of the County of Orange, State of California, in any other appropriate court of that county, or in the United States District Courl for the Central Dislrict of California. This choice of Ihe venue is inlended by Ihe Parties to be mandatory and not permissive in nature, thereby precluding the possibility of litigation between or among the Parties wilh respect 10 or arising out of this Agreemenl in any jurisdiction other than that specified in this section. Each Party hereby waives any right that it may have to assert the doctrine forum non conveniens or similar doctrine or to object to venue with respect to any proceeding brought in accordance with this section, and slipulates thaI Ihe state and federal courts located in the County of Orange, State of California, shall have in personam jurisdiction and venue over each of them for the purpose of litigating any dispute, controversy or proceeding arising out of this agreement. Each Parly hereby authorizes and accepts service of process sufficient for personal jurisdiction in any action against il as contemplated by this Section 5.2 by means of registered or certified mail, return receipt requested, postage prepaid, to its address for the giving of notices as set forth in this Agreement, or in the manner set forlh in Section 16 of this Agreement perlaining to notice. Any final judgment rendered against a Party in any action or proceeding shall be conclusive as to the subject of such final judgment and may be enforced in other jurisdictions in any manner provided by law. 6. Bindinl!: on Successors / Assil!:nment Restricted to Builders/Purchasers. 6.1. This Agreement shall inure to the benefit of, and shall be binding upon, the successors and assigns of each of the parties to this Agreement, except that this Agreement may not be assigned by Developer without City's written consent. 6.2. The Developer may assign its obligations under this Agreement to a builder who purchases all or a portion of the Property ("Builder/Purchaser"). Such assignment shall not be effective until Developer and the Builder/Purchaser enter into an assignment agreement approved by City ("Assignment Agreement"), and the Assignment Agreement is recorded in 202435.3 9 Jun, 13.2005 the Official Records of the County of Orange against the Builder/Purchaser's portion of the Property. Such Agreement shall serve to release Developer from the obligations of this Agreemenl for that portion of the Property transferred in fee to the BuilderlPurchaser upon Ihe transfer of title to the BuilderlPurchaser and recordation of the Assignment Agreement. 7. No Third Party Beneficiaries. This Agreement has been made and entered into solely for the benefit of the Parties to this Agreement and their respective successors and permitted assigns. Nothing in this Agreement is intended to confer any rights or remedies under or by reason of this Agreement on any persons other than the parties to it and their respective successors and permitted assigns. Nothing in this Agreement is intended to relieve or discharge the obligation or liability of any third persons to any parties to this Agreement. 8. Entire Al!reement. This Agreement and the Attachments constitute the entire agreement and understanding between the parties hereto with respect of the subject matter of such Agreement and supersedes all prior or conlemporaneous agreements and understandings with respect to such subject matter, whether oral or written. 9. Waivers. Waiver by the City of any term, covenant or condition under this Agreement, including Attachments, or of any default by Developer under this Agreement, or any failure by the City to insist upon strict performance by Developer of any term, covenant or condition contained in this Agreement shall be effective or binding on the City only if made in writing by the City; no such waiver shall be implied from any omission by the City to take action with respect to any such term, covenant, condition or default. No express written waiver by the City of any term, co:venant, condition or default shall affect any other lerm, covenanl, condition or default or cover any other time period than the application of any such term, covenant or condition to the matter as to which a waiver has been given or the default or time period specified in such express waiver. 10. Severability. If any part of this Agreement is declared by a final decision of a court of competent jurisdiction to be invalid for any reason, such shall not affect the validity of the rest of the Agreement. The other parts of this Agreement shall remain in effect as if this Agreement had been executed without the invalid part. The parties declare that they intend and desire that the remaining parts of this Agreement continue to be effective without any part or parts that have been declared invalid. 202435.3 10 Ju",13.2005 11. Counterparts. This Agreement may be executed in counlerparts, each of which so execuled shall, irrespective of the date of its execution and delivery, be deemed an original, and all such counterparts together shall constitute one and the same instrument. 12. Time is of the Essence. Time is of the essence in this Agreement, and failure to timely comply with provisions of this Agreement shall be a Potential Default under this Agreement. 13. Attornevs' Fees. If any party files an action or brings any proceeding against the other arising from this Agreement, the prevailing party shall be entitled to recover as an element of its costs of suit, and not as damages, reasonable attorneys' fees and costs to be fixed by the court. A party not entitled to recover its costs shall not recover attorneys' fees. No sum for attorneys' fees shall be included in calculating the amount of a judgment for purposes of deciding whether a party is entitled to its costs or attorneys' fees. 14. Amendment. No modification, amendment, addition to, or alteration of the terms of this Agreement, or the Attachments, whether written or verbal, shall be valid unless made in writing and formally approved and executed by all parties. 15. Authority of SÌlmatories to Al!reement. Each person executing this Agreement represents and warrants that he or she is duly authorized and has legal capacity to execute and deliver this Agreement on behalf of the Parties for which execution is made. Each Party represents and warrants to the other that the execution of this Agreement and the performance of such Party's obligations hereunder have been duly authorized and that the agreement is a valid and legal agreement binding on such party and enforceable in accordance with its terms. 16. Notices. Demands and Communications between Parties. All notices, demands, consents, requests and other communications required or permitted to be given under this Agreement shall be in writing and shall be deemed conclusively to have been duly given (a) when hand delivered to the other party; (b) three (3) Business Days after such notice has been sent by United States mail via certified mail, return receipt requested, postage prepaid, and addressed to the other party as set forth below; (c) the next Business Day after such notice has been deposited with a national overnight delivery service reasonably approved by the parties (Federal Express, United Parcel Service and U.S. Postal Service are deemed approved by the parties), postage prepaid, addressed to the party to whom notice is being sent as set forth below with next business day delivery guaranteed, provided that the sending party receives a confirmation of delivery from the delivery service provider; or (d) when received by the recipient party when sent by facsimile transmission or email at the number or 202435.3 11 lu", 13. 2005 email address set forth below (provided, however, that notices given by facsimile or email shall not be effective unless either (i) a duplicate copy of such notice is promptly sent by any method permitted under this Section 16. other than by facsimile or email; or (ii) the receiving party delivers a written confirmation of receipt for such notice either by facsimile, email or any other method permitted under this Section. Any notice given by facsimile or email shall be deemed received on the next business day if such notice is received after 5:00 p.m. (recipient's time) or on a Saturday, Sunday or national holiday. Unless otherwise provided in wriling, all notices hereunder shall be addressed as follows: If to the City: City of Tustin 300 Centennial Way Tustin, CA 92780 Attention: City Manager and Assistant City Manager With a copy to: City Attorney City of Tustin Woodruff, Spradlin & Smart 70 I S. Parker Street, Suite 8000 Orange, CA 92868-4760 If to the Developer: Moffett Meadows Partners, LLC c/o Lennar Homes of California, its Managing Member [address] Any party may by written notice to the other party in the manner specified herein change Ihe address to which nolices to such party shall be delivered. 17. Attachments. This Agreement includes the following Attachments that are attached hereto and are incorporated by reference as though fully set forth herein: Attachment No.3 Attachment No.4 Legal Description Affordable Housing Units - Number, Location, Bedrooms Affordable Housing Note Affordable Housing Deed of Trust Affordable Housing Covenant (Very Low Income) Attachment No. I Attachment No.2 Attachment No.5 Attachment No.6 Attachment No.7 Attachment No.8 Affordable Housing Covenant (Lower Income) Affordable Housing Covenant (Moderate Income) Memorandum of Agreement 202435.3 12 Ju", 13.20'" -) ) 18. Effective Date. The Effective Date of this Agreement shall be the date when this Agreement has been executed by the Developer and City, which shall be the date first set forth above. IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year first written above- "DEVELOPER" MOFFETT MEADOWS PARTNERS, LLC, a Delaware limited liability company By: Marble Mountain Partners, LLC, its sole member, a Delaware limited liability company, its administrative member By: Leonar Homes of California, Inc., a California corporation, its managing member ~F~ By: ATTEST: Pamela Stoker, City Clerk APPROVED AS TO FORM: Lois E. Jeffrey, City Attorney ) Dated: Dated: APPROVED AS TO FORM: By: William Devine, Legal Counsel 202435.4 13 "CITY" CITY OF TUSTIN LOU BONE, MAYOR By: By: 1"",,2oo5 ATTACHMENT NO.1 LEGAL DESCRIPTION 202435.3 Jun,13.2005 SCHEDULE A l. THE ESTATE OR INTEREST IN THE LAND HEREINAFTER DESCRIBED OR REFERRED TO COVERED BY THIS REPORT IS: A FEE AS TO PARCEL l. AN EASEMENT MORE FUllY DESCRIBED BELOW AS TO PARCEL 2. 2. TITLE TO SAID ESTATE OR INTEREST AT THE DATE HEREOF IS VESTED IN: MOFFETT MEADOWS PARTNERS, LlC., A DELAWARE LIMITED LIABILITY COMPANY 3. THE lAND REFERRED TO IN THIS REPORT IS SITUATED IN THE STATE OF CALIFORNIA, COUNTY OF ORANGE, AND IS DESCRIBED AS FOllOWS: SEE EXHIBIT "A" ATTACHED HEREWITH AND MADE A PART HEREOF 202435.3 Ju",13.2005 EXHIBIT "A" (LEGAL DESCRIPTION) PARCEL 1: IN THE CITY OF TUSTIN, COUNTY OF ORANGE, STATE OF CALIFORNIA, BEING THOSE PORTIONS OF LOTS 68, 69, 70, 75, 76 AND 77, OF BLOCKS 10 AND 46 OF IRVINE'S SUBDIVfSION AS SHOWN ON THE MAP FILED IN BOOK 1, PAGE 88 OF MISCELLANEOUS RECORD MAPS, AND AS SHOWN ON A MAP FILED IN BOOK 165 PAGES 31 THROUGH 39 INCLUSIVE OF RECORDS OF SURVEY, ALL OF THE RECORDS OF SAID COUNTY, DESCRIBED AS FOLLOWS: FOR THE PURPOSE OF THIS DESCRIPTION THE FOLLOWING CONTROL LINES ARE HEREBY ESTABLISHED: CONTROL LINE "A" BEGINNING AT THE INTERSECTION OF THE CENTERLINE OF RED HILL AVENUE WITH THE CENTERLINE OF VALENCIA AVENUE AS SHOWN ON SAID RECORD OF SURVEY, THE CENTERLINE OF RED HILL AVENUE HAVING A BEARING OF NORTH 40 37' 39" EAST BETWEEN VALENCIA AVENUE AND WARNER A VENUE; THENCE SOUTH 49 20' 07" EAST 106.23 FEET TO THE BEGINNING OF A CURVE CONCAVE SOUTHWESTERLY HAVING A RADIUS OF 1400.04 FEET: THENCE SOUTHEASTERLY ALONG SAID CURVE 134.49 FEET THROUGH A CENTRAL ANGLE OF 5 30' 14"; THENCE SOUTH 43 49' 53" EAST 101.77 FEET TO THE BEGINNING OF A CURVE CONCAVE NORTHEASTERLY HAVING A RADIUS OF 1400.04 FEET; THENCE SOUTHEASTERLY ALONG SAID CURVE 134.40 FEET THROUGH A CENTRAL ANGLE OF OS 30' 01"; THENCE SOUTH 49 19' 54" EAST 586.96 FEET TO THE BEGINNING OF A CURVE CONCAVE NORTHEASTERLY HAVING A RADIUS OF 1400.04 FEET: THENCE SOUTHEASTERLY AND EASTERLY ALONG SAID CURVE 733.69 FEET THROUGH A CENTRAL ANGLE OF 3001' 33"; THENCE SOUTH 79 21' 27" EAST 309.99 FEET TO A POINT HEREAFTER TO BE REFERRED TO AS POINT "A"; THENCE CONTINUING SOUTH 79 21' 27" EAST 1047.64 FEET TO THE BEGINNING OF A CURVE CONCAVE SOUTHWESTERLY HAVING A RADIUS OF 1400.04 FEET; THENCE EASTERLY AND SOUTHEASTERLY ALONG SAID CURVE 733.34 FEET THROUGH A CENTRAL ANGLE OF 30 00' 42"; THENCE SOUTH 49 20' 45" EAST 1500.61 FEET TO THE TERMINUS OF THE HEREIN DESCRIBED CONTROL LINE "A". CONTROL LINE "D" BEGINNING AT THE HEREINABOVE DESCRIBED POINT 'A"; THENCE NORTH 1538' 31" EAST 159.80 FEET TO THE BEGINNING OF A CURVE CONCAVE WESTERLY HAVING A RADIUS OF 600.02 FEET: THENCE NORTHERLY ALONG SAID CURVE 116.30 FEET THROUGH A CENTRAL ANGLE OF 11 06' 21 "; THENCE NORTH 04 32' 10" EAST 747.07 FEET TO THE BEGINNING OF A CURVE CONCAVE SOUTHEASTERLY HAVING A RADIUS OF 251.01 FEET; THENCE NORTHERLY AND NORTHEASTERLY ALONG SAID CURVE 157.51 FEET THROUGH A CENTRAL ANGLE OF 36 05' 52": THENCE NORTH 40 38' 02" EAST 667.92 FEET TO THE TERMINUS OF THE HEREIN DESCRIBED CONTROL LINE. PARCEL TUSTIN VILLAS BEGINNING AT THE MOST NORTHERLY TERMINUS OF PARCEL I-H-3 AS DESCRIBED IN A DOCUMENT RECORDED MAY 14,2002 AS INSTRUMENT NO. 20020404598 OF OFFICIAL RECORDS OF SAID COUNTY, SAID POINT BEING ON A CURVE CONCAVE SOUTHWESTERLY, LYING 46 FEET NORTHEASTERLY OF SAID CONTROL LINE "A" AND BEING DESCRIBED AS "A RADIUS OF 1446.04 FEET, LENGTH OF 197.79 FEET AND A CENTRAL ANGLE OF 7 50' 13", A RADIAL LINE TO SAID POINT BEARS NORTH 32 49' 02" EAST; THENCE NORTHWESTERLY AND WESTERLY ALONG SAID CONCENTRIC CURVE 559.65 FEET THROUGH A CENTRAL ANGLE OF 22 10' 29" TO A LINE PARALLEL WITH AND 46.00 NORTHERLY OF SAID CONTROL LINE "A"; THENCE NORTH 79 21' 27" WEST 286.09 FEET ALONG SAID PARALLEL LINE TO THE BEGINNING OF A CURVE CONCAVE NORTHERLY 202435.3 )00,13.2005 HAVfNG A RADIUS OF 3743.60 FEET; THENCE LEAVING SAID PARALLEL LINE WESTERLY 149.73 FEET ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 2 17' 30" TO THE BEGINNING OF A REVERSE CURVE CONCAVE SOUTHERLY HAVING A RADIUS OF 3759.60 FEET, A RADIAL LINE TO SAID BEGINNING OF REVERSE BEARS NORTH t2 56' 03" EAST; THENCE WESTERLY 150.37 FEET ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 2 IT 30" TO A LINE THAT IS PARALLEL WITH AND 52.00 FEET NORTHERLY OF SAID CONTROL LINE "A"; THENCE ALONG SAID PARALLEL LINE NORTH 79 21' 27" WEST 381.34 FEET; THENCE LEAVING SAID PARALLEL LINE NORTH 35 59' 46" WEST 34.19 FEET; THENCE NORTH 7 15' 25" EAST 173.64 FEET TO THE BEGINNING OF A CURVE CONCAVE WESTERLY HAVING A RADIUS OF 630.02 FEET, SAID CURVE BEING CONCENTRIC WITH AND 30.00 FEET EASTERLY OF SAID CONTROL LINE "D"; THENCE PARALLEL AND CONCENTRIC WITH SAID CONTROL LINE "D" THE FOLLOWING FOUR (4) COURSES: I) NORTHERLY ALONG SAID CURVE 29.92 FEET THROUGH A CENTRAL ANGLE OF 02 43' 15"; 2) NORTH 04 32' 10" EAST 746.96 FEET TO THE BEGINNING OF A CURVE CONCAVE SOUTHEASTERLY HAVING A RADIUS OF 220.01 FEET; 3) NORTHERLY ALONG SAID CURVE 138.61 FEET THROUGH A CENTRAL ANGLE OF 36 05' 52"; 4) NORTH 40 38' 02" EAST 5.77 FEET TO THE SOUTHEASTERLY PROLONGATION OF THE SOUTHWESTERLY BOUNDARY OF THE PARCEL MAP FILED IN BOOK 64, PAGE 39 OF PARCEL MAPS, RECORDS OF SAID COUNTY; THENCE LEAVING SAID PARALLEL AND CONCENTRIC LINE AND ALONG SAID PROLONGATION NORTH 49 21' 28" WEST 60.01 FEET TO A LINE THAT IS PARALLEL WITH AND 30.00 FEET NORTHWESTERLY OF SAID CONTROL LINES "D": THENCE PARALLEL WITH SAID CONTROL LINE "D" NORTH 40 38' 02" EAST 115.80 FEET; THENCE NORTH 49 19' 53" WEST 64.56 FEET TO THE SOUTHEASTERLY LINE OF THAT CERTAIN REAL PROPERTY AS SHOWN SAID PARCEL MAP; THENCE NORTHEASTERLY ALONG SAID SOUTHEASTERLY LINE NORTH 40 38' 39" EAST, 1034.69 FEET TO THE SOUTHWESTERLY CORNER OF PARCEL I-H-17 AS DESCRIBED IN SAID INSTRUMENT NO. 20020404598, OF OFFICIAL RECORDS; THENCE ALONG THE SOUTHWESTERLY LINE OF SAID PARCEL I-H-17 THE FOLLOWING TWO (2) COURSES: I) SOUTH 49 20' 45" EAST 1780.30 FEET; 2) SOUTH 4823' 27" EAST 600.36 FEET TO THE NORTHWESTERLY CORNER OF PARCEL I-H-6 AS DESCRIBED IN SAID INSTRUMENT NO. 20020404598 OF OFFICIAL RECORDS, SAID CORNER BEING THE BEGINNING OF A CURVE CONCAVE TO THE SOUTHWEST HAVING A RADIUS OF 42.00 FEET; THENCE ALONG THE SOUTHWESTERLY LINE OF SAID PARCEL I-H-6 THE FOLLOWING FOUR (4) COURSES: I) SOUTHEASTERLY 5.28 FEET ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 0712' 19"; 2) SOUTH 41 II' OS" EAST 77.41 FEET TO THE BEGINNING OF A CURVE CONCAVE TO THE NORTHEAST HAVING A RADIUS OF 58.00 FEET; 3) SOUTHEASTERLY 8.26 FEET ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 08 09' 37"; 4) SOUTH 49 20 45" EAST 190.11 FEET TO THE NORTHWESTERLY LINE OF PARCEL I-H-5 AS DESCRIBED IN SAID INSTRUMENT NO. 20020404598 OF OFFICIAL RECORDS; THENCE ALONG THE NORTHWESTERLY AND SOUTHWESTERLY LINES OF SAID PARCEL I-H-5 THE FOLLOWING TWO (2) COURSES: I) SOUTH 40 29' 47" WEST 240.60 FEET; 202435.3 4 100013.2005 2) SOUTH 49 20' 44" EAST 230.85 FEET TO A POINT ON THE NORTHWESTERLY LINE OF PARCEL I-H-4 AS DESCRIBED IN SAID INSTRUMENT NO. 20020404598 OF OFFICIAL RECORDS, SAID POINT BEING ON A CURVE CONCAVE SOUTHEASTERLY HAVING A RADIUS OF 1446.04 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 53 48' 08" WEST; THENCE ALONG THE NORTHWESTERLY LINE OF SAID PARCEL I-H-4 THE FOLLOWING TEN (10) COURSES; I) SOUTHWESTERLY ALONG SAID CURVE 182.42 FEET THROUGH A CENTRAL ANGLE OF 713' 40"; 2) SOUTH 28 58' 13" WEST 302.71 FEET TO THE BEGINNING OF A CURVE CONCAVE NORTHWESTERLY HAVING A RADIUS OF 960.03 FEET; 3) SOUTHWESTERLY ALONG SAID CURVE 2I.I2 FEET THROUGH A CENTRAL ANGLE OF 01 IS' 37": 4) SOUTH 30 13' SO" WEST 98.66 FEET TO THE BEGINNING OF A CURVE CONCAVE NORTHWESTERLY HAVING A RADIUS OF 2074.36 FEET; 5) SOUTHWESTERLY ALONG SAID CURVE 174.88 FEET THROUGH A CENTRAL ANGLE OF 04 49' 50: TO THE BEGINNING OF A COMPOUND CURVE CONCAVE NORTHWESTERLY HAVING A RADIUS OF 1348.04 FEET, A RADIAL LINE TO SAID BEGINNING OF CURVE BEARS SOUTH 54 56' 20" EAST; 6) SOUTHWESTERLY ALONG SAID CURVE 54.83 FEET THROUGH A CENTRAL ANGLE OF 02 19' 49" TO THE BEGINNING OF A COMPOUND CURVE CONCAVE NORTHWESTERLY HAVING A RADIUS OF 143.00 FEET, A RADIAL LINE TO SAID BEGINNING OF CURVE BEARS SOUTH 52 36' 31" EAST; 7) SOUTHWESTERLY ALONG SAID CURVE 33.43 FEET THROUGH A CENTRAL ANGLE OF 1323' 34"; 8) SOUTH 50 47' 03" WEST 30.34 FEET TO THE BEGINNING OF A CURVE CONCAVE SOUTHEASTERLY HAVING A RADIUS OF 159.16 FEET; 9) SOUTHWESTERLY ALONG SAID CURVE 28.14 FEET THROUGH A CENTRAL ANGLE OF 1007' 48"; 10) SOUTH 40 39' IS" WEST 184.90 FEET TO THE NORTHEASTERLY LINE OF SAID PARCEL I-H-3; THENCE ALONG THE NORTHEASTERLY LINE OF SAID PARCEL I-H-3 THE FOLLOWING 14 COURSES: I) SOUTH 85 39' 13" WEST 38.18'; 2) NORTH 49-20-45 WEST 50.00 FEET TO THE BEGINNING OF A CURVE CONCAVE NORTHEASTERLY HAVING A RADIUS OF 42.00 FEET; 3) NORTHWESTERLY ALONG SAID CURVE 10.38 FEET THROUGH A CENTRAL ANGLE OF 1409' 13"; 4) NORTH 35 II' 32" WEST 36.66 FEET TO THE BEGINNING OF A CURVE CONCAVE SOUTHWESTERLY HAVING A RADIUS OF 58.00 FEET; 5) NORTHWESTERLY ALONG SAID CURVE 14.33 FEET THROUGH A CENTRAL ANGLE OF 1409' 13": 6) NORTH 49 20 45" WEST 60.00 FEET TO THE BEGINNING OF A CURVE CONCAVE SOUTHWESTERLY HAVING A RADIUS OF 58.00 FEET; 7) NORTHWESTERLY ALONG SAID CURVE t4.33 FEET THROUGH A CENTRAL ANGLE OF 1409' 13"; 8) NORTH 63 29' 58" WEST 36.66 FEET TO THE BEGINNING OF A CURVE CONCAVE NORTHEASTERLY HAVING A RADIUS OF 42.00 FEET; 202435.3 Ju",13.2005 9) NORTHWESTERLY ALONG SAID CURVE 10.38 FEET THROUGH A CENTRAL ANGLE OF 1409' 13"; 10) NORTH 49 20' 45" WEST 106.00 FEET TO THE BEGINNING OF A CURVE CONCAVE SOUTHWESTERLY HAVING A RADIUS OF 3759.60 FEET; II) NORTHWESTERLY ALONG SAID CURVE 150.35 FEET THROUGH A CENTRAL ANGLE OF 217' 29" TO THE BEGINNING OF A REVERSE CURVE CONCAVE NORTHEASTERLY HAVING A RADIUS OF 3743.60 FEET; A RADIAL LINE TO SAID POINT BEARS SOUTH 38 21' 46" WEST; 12) NORTHWESTERLY ALONG SAID CURVE 149.72 FEET THROUGH A CENTRAL ANGLE OF 217' 29"; 13) NORTH 49 20' 45" WEST 39.60 FEET TO THE BEGINNING OF A CURVE CONCAVE SOUTHWESTERLY HAVING A RADIUS OF 1446.04 FEET; 14) NORTHWESTERLY ALONG SAID CURVE 197.79 FEET THROUGH A CENTRAL ANGLE OF 7 50' 13" TO THE POINT OF BEGINNING. EXCEPTING THEREFROM EXCEPTION IRP-16 BEGINNING AT THE MOST NORTHERLY TERMINUS OF PARCEL I-H-3 AS DESCRIBED IN A DOCUMENT RECORDED MAY 14, 2002 AS INSTRUMENT NO. 20020404598 OF OFFICIAL RECORDS OF SAID COUNTY, SID POINT BEING ON A CURVE CONCAVE SOUTHWESTERLY, LYING 46 FEET NORTHEASTERLY OF SAID CONTROL LINE "A" AND BEING DESCRIBED AS "A RADIUS OF 1446.04 FEET, LENGTH OF 197.79 FEET AND A CENTRAL ANGLE OF 7 SO' 13", A RADIAL LINE TO SAID POINT BEARS NORTH 32 49' 02" EAST; THENCE NORTHWESTERLY AND ALONG SAID CONCENTRIC CURVE 207.96 FEET THROUGH A CENTRAL ANGLE OF 8 14' 24"; THENCE LEAVING SAID CONCENTRIC CURVE NORTH 24 34' 38" EAST 312.20 FEET TO THE TRUE POINT OF BEGINNING; THENCE NORTH 2 37' 41" EAST 309.90 FEET; THENCE NORTH 56 16' 38" WEST 114.65 FEET; THENCE NORTH 83 50' 08" WEST 148.04 FEET; THENCE SOUTH 2 56' 49" EAST 400.34 FEET: THENCE NORTH 87 03' II" EAST 208.02 FEET TO THE TRUE POINT OF BEGINNING. EXCEPTION UST-268 BEGINNING AT THE MOST NORTHERLY TERMINUS OF PARCEL I-H-3 AS DESCRIBED IN A DOCUMENT RECORDED MAY 14, 2002 AS INSTRUMENT NO. 20020404598 OF OFFICIAL RECORDS OF SAID COUNTY, SAID POINT BEING ON A CURVE CONCAVE SOUTHWESTERLY, LYING 46 FEET NORTHEASTERLY OF SAID CONTROL LINE "A" AND BEING DESCRIBED AS °A RADIUS OF 1446.04 FEET, LENGTH OF 197.79 FEET AND A CENTRAL ANGLE OF 7 50' 13", A RADIAL LINE TO SAID POINT BEARS NORTH 32 49' 02" EAST; THENCE NORTHWESTERLY AND WESTERLY ALONG SAID CONCENTRIC CURVE 559.65 FEET THROUGH A CENTRAL ANGLE OF 22 10' 29" TO A LINE PARALLEL WITH AND 46.00 FEET NORTHERLY OF SAID CONTROL LINE "A"; THENCE NORTH 79 21' 27" WEST 286.09 FEET ALONG SAID PARALLEL LINE TO THE BEGINNING OF A CURVE CONCAVE NORTHERLY HAVING A RADIUS OF 3743.60 FEET: THENCE LEAVING SAID PARALLEL LINE WESTERLY 28.26 FEET ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 0 25' 27" TO THE TRUE POINT OF BEGINNING; THENCE CONTINUING WESTERLY ALONG SAID CURVE 121.47 FEET THROUGH A CENTRAL ANGLE OF 1 51' 33" TO THE BEGINNING OF A REVERSE CURVE CONCAVE SOUTHERLY HAVING A RADIUS OF 3759.60 FEET, A RADIAL LINE TO SAID BEGINNING OF REVERSE CURVE BEARS NORTH 1256' 03" EAST; THENCE WESTERLY 150.37 FEET ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 217' 30" TO A LINE THAT IS PARALLEL WITH AND 52.00 FEET NORTHERLY OF SAID CONTROL LINE "A"; THENCE ALONG SAID PARALLEL LINE NORTH 79 21' 27" WEST 127.17 FEET; THENCE LEAVING SAID PARALLEL LINE NORTH 4 32' 10" EAST 207.34 FEET; THENCE SOUTH 8250' 40" EAST 407.32 FEET; THENCE SOUTH 7 09' 19" WEST 237.27 FEET TO THE TRUE POINT OF BEGINNING. 202435.3 6 lu", 13.2005 EXCEPTION IRP-13S BEGINNING AT THE MOST NORTHERLY TERMINUS OF PARCEL I-H-3 AS DESCRIBED IN A DOCUMENT RECORDED MAY 14, 2002 AS INSTRUMENT NO. 20020404598 OF OFFICIAL RECORDS OF SAID COUNTY, SAID POINT BEING ON A CURVE CONCAVE SOUTHWESTERLY, LYING 46 FEET NORTHEASTERLY OF SAID CONTROL LINE "A" AND BEING DESCRIBED AS "A RADIUS OF 1446.04 FEET, LENGTH OF 197.79 FEET AND A CENTRAL ANGLE OF 7 50' 13", A RADIAL LINE TO SAID POINT BEARS NORTH 32 49' 02" EAST; THENCE NORTHWESTERLY AND WESTERLY ALONG SAID CONCENTRIC CURVE 559.65 FEET THROUGH CENTRAL ANGLE 22 10' 29" TO A LINE PARALLEL WITH AND 46.00 NORTHERLY OF SAID CONTROL LINE "A"; THENCE NORTH 79 21' 27" WEST 286.09 FEET ALONG SAID PARALLEL LINE TO THE BEGINNING OF A CURVE CONCAVE NORTHERLY HAVING A RADIUS OF 3743.60 FEET; THENCE LEAVING SAID PARALLEL LINE WESTERLY 149.73 FEET ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 2 17'30" TO THE BEGINNING OF A REVERSE CURVE CONCAVE SOUTHERLY HAVING A RADIUS OF 3759 FEET, A RADIAL LINE TO SAID BEGINNING OF REVERSE CURVE BEARS NORTH 1256' 03" EAST; THENCE WESTERLY 150.37 FEET ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 2 17' 30" TO A LINE THAT IS PARALLEL WITH AND 52.00 FEET NORTHERLY OF SAID CONTROL LINE °A"; THENCE ALONG SAID PARALLEL LINE NORTH 79 21' 27" WEST 127.17 FEET TO THE TRUE POINT OF BEGINNING; THENCE CONTINUING NORTH 79 21' 27" WEST 254.17 FEET; THENCE LEAVING SAID PARALLEL LINE NORTH 3559' 46" WEST 34.19 FEET: THENCE NORTH 0715' 25" EAST 173.64 FEET TO THE BEGINNING OF A CURVE CONCAVE WESTERLY HAVING A RADIUS OF 630.02 FEET, SAID CURVE BEING CONCENTRIC WITH AND 30.00 FEET EASTERLY OF SAID CONTROL LINE °D"; THENCE PARALLEL AND CONCENTRIC WITH SAID CONTROL LINE "D" THE FOLLOWING TWO (2) COURSE: I) NORTHERLY ALONG SAID CURVE 29.92 FEET THROUGH A CENTRAL ANGLE OF 02 43' 15"; 2) NORTH 04 32' 10" EAST 365.06 FEET; THENCE LEAVING SAID PARALLEL LINE SOUTH 85 27' 50" EAST 266.00 FEET; THENCE SOUTH 4 32' 10" WEST 621.44 FEET TO THE TRUE POINT OF BEGINNING. EXCEPTION IRP-13W BEGINNING AT THE MOST NORTHERLY TERMINUS OF PARCEL I-H-3 AS DESCRIBED IN A DOCUMENT RECORDED MAY 14, 2002 AS INSTRUMENT NO. 20020404598 OF OFFICIAL RECORDS OF SAID COUNTY, SAID POINT BEING ON A CURVE CONCAVE SOUTHWESTERLY, LYING 46 FEET NORTHEASTERLY OF SAID CONTROL LINE "A" AND BEING DESCRIBED AS "A RADIUS OF 1446.04 FEET, LENGTH OF 197.79 FEET AND A CENTRAL ANGLE OF 7 50' 13", A RADIAL LINE TO SAID POINT BEARS NORTH 32 49' 02" EAST; THENCE NORTHWESTERLY AND WESTERLY ALONG SAID CONCENTRIC CURVE 559.65 FEET THROUGH A CENTRAL ANGLE OF 22 10' 29" TO A LINE PARALLEL WITH AND 46.00 FEET NORTHERLY OF SAID CONTROL LINE "A"; THENCE NORTH 79 21' 27" WEST 286:09 FEET ALONG SAID PARALLEL LINE TO THE BEGINNING OF A CURVE CONCAVE NORTHERLY HAVING A RADIUS OF 3743.60 FEET; THENCE LEAVING SAID PARALLEL LINE WESTERLY 149.73 FEET ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 2 17' 30" TO THE BEGINNING OF A REVERSE CURVE CONCAVE SOUTHERLY HAVING A RADIUS OF 3759.60 FEET, A RADIAL LINE TO SAID BEGINNING OF REVERSE CURVE BEARS NORTH 1256' 03" EAST; THENCE WESTERLY 150.37 FEET ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 2 17' 30" TO A LINE THAT IS PARALLEL WITH AND 52.00 FEET NORTHERLY OF SAID CONTROL LINE "A"; THENCE ALONG SAID PARALLEL LINE NORTH 79 21' 27" WEST 381.34 FEET; THENCE LEAVING SAID PARALLEL LINE NORTH 35 59' 46" WEST 34.19 FEET; THENCE NORTH 0715' 25" EAST 173.64 FEET TO THE BEGINNING OF A CURVE CONCAVE WESTERLY HAVING A RADIUS OF 630.02 FEET, SAID CURVE BEING CONCENTRIC WITH AND 30.00 FEET EASTERLY OF SAID CONTROL LINE "D"; THENCE PARALLEL AND CONCENTRIC WITH SID CONTROL LINE "D" THE FOLLOWING TWO (2) COURSES: I) NORTHERLY ALONG SAID CURVE 29.92 FEET THROUGH A CENTRAL ANGLE OF 02 43' 15"; 202435.3 7 Jun,13.2005 2) NORTH 04 32' 10" EAST 365.06 FEET TO THE TRUE POINT OF BEGINNING; THENCE LEAV[NG SAID PARALLEL LINE SOUTH 85 27' 50" EAST 266.00 FEET; THENCE NORTH 4 32' [0" EAST 243.00 FEET; THENCE NORTH 85 27' 50" WEST 266.00 FEET TO A LINE 30.00 FEET EASTERLY OF SAID CONTROL LINE "D"; THENCE PARALLEL WITH SAID CONTROL LINE "D" SOUTH 4 32' 10" WEST 243.00 FEET TO THE TRUE POINT OF BEGINNING. PARCEL 2: NON-EXCLUS[VE EASEMENTS FOR INGRESS AND EGRESS OVER THAT CERTAIN LAND RESERVED BY THE UNITED SATES OF AMERICA, FOR SAID PURPOSES, IN THE DEED RECORDED MAY 14,2002 AS INSTRUMENT NO. 2002-0404595, IN THE OFFICIAL RECORDS OF ORANGE COUNTY, CALIFORNIA. 202435.3 J~,13.2005 A TT ACHMENT NO.2 AFFORDABLE HOUSING UNITS Number, Location, Bedrooms 202435.3 lu",'3.2005 ATTACHMENT 2-A Columbus Square and ~olumbus Grov~._.__. .-------- 3. INCENTIVE qR CONCESSION REÇl1EST- SpodIic Plan -- H......., Roqui- "'- A- _sing PIon Plonning Toll! Units 15% % Target Unito Alea "'- flus _..lGpmont Additionol ToI8I (VI. + L) For PI_sed Tr_for of Ro- AIfordable Proposed \.ocotion/Product T rP8 Don...y Bonus} RHNA UtIiIs Roq_t Oonolty Bonus -- UnIts Unit Co..., IIoquIro...." PvrpoHO r- PA4 74U11i11 16VL 16VL 16VL (6) Move 8 10 PAS VL 8 VL .PA4-14 seniors For-Sale laL 38L I48L 48L I48L 148L-PA4'14SonìorsFor-- ISM ISM 30M (14) Move 141oPAS 16M 16M-PA4-14SonicrsFor-SaIe )1 1 To... 53 ToCol I9.oTOlai 64 Total (23%) (22) Total Transler Ir~~~~."'.. 72 TOIOI AIIordabie Units .,-- '".., .... " ","...."-.- .'.".. ,." -'.-.'. .-... "',,' ".".. ~ Y"""~"",, ,'..~' .. -... ~, ."--r", rs or.- PAS 21.."" 37VL 37VL 37VL t8fromPA21,+8 53VL fromPA4.t16- ""'Is- s 14 units. PA 5-7 GWen Cou1 TowrtIomes ....... - s 22L 38L 6OL 80L + 17t'om PA21 77L """'Is'~" ~O ..... ,owmomes 14 unos ~,,: .. ~OW 'ownnomos ~units- .uw...- IS r. 3<M 16M 5OM <14lromPA4 84M ..~...- ""_s "~-r" ownnomes \ 93 To... I97TOIaI(I7%) MO.."""", "'" 54 ToCoI 147ToIaI <47TotaIT""," Target Uoits) 206 Total AIIor- Units ". >" ' .- "." '~..' ..-", '.-. '_0«0- ~ PA21 329units 20 VL (00. 12 2OVL 2OVL (8) t.Iove8 10 PAS 12VL'" A21.13and21.14.Triplax .....-Units) 11 L 6L 17L 17L (17) Move 1710 PAS L "" IBM 12M 30M 30M "~~- '-1JaneI2'-'4-T- 9 Total '8ToCoI Holal 38 Total (12%) (171ToI8ITranofar 42ToCoI 2ToCoI_Unils . ". .. .. "'" .,., T UItin -.aJopmont -. the 15% requiIanwM is 10 be - IS follows: 40% VL, wi,., balance -- as 39% L and 61 % M .. ParT- Density Bonus 00Iin8nc:e. PA4 and PAS_lObe 0Iigj0e "'02511 Density Bonus (66 units in PA4 and 155 UI1iIsin PAS) ... The 12Tna>oiIionaI ums... _in PA21.13 and 21-14. Tti¡¡IoJcTownI1omes: those units mav be.anslerred to PA5a! the IOIe CIisc.-,otIlleC~Yupon aooroved_I1.."s,,;1h1ho pro_. Appendix A Affordable Housing Plan Summary --------- - Housing Plan and Density Bonus AppIcatoo Janu.., 17. 2005. Page 37 202435.3 Jun, 13. 2005 = ~ E-< Z "" ~ ::i:i U < E-< E-< < CII > 0 U VI :::I .!:J E :::I Õ U 'C c: '" CII :; :::I a ." VI :::I .!:J E :::I Õ U ~ ~ 8 0:: a.. 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" æ . ~ ~ ~ :; ~ B r; ~ j ~ ~ C ~ ! "- go '¡oJ 0 :z: I 1; ~ ~ ATTACHMENT NO.3 AFFORDABLE HOUSING NOTE 202435.3 Jun, 13.2oo5 AFFORDABLE HOUSING PROMISSORY NOTE (COLUMBUS SQUARE) $ ,200- , California FOR VALUE RECEIVED, the undersigned (jointly and severally "Homeowner"), promises to pay to the order of the City of Tustin, a municipal corporation (the "City"), at 300 Centennial Way, Tustin California 92780, Attention: Assistant City Manager, or at such other place as the holder of this Affordable Housing Promissory Note ("Affordable Housing Note" or "Note") ftom time to time may designate in writing, the principal sum of Dollars ($ ), plus such amount that is to be added to the principal sum of this Note as provided below, together with interest on the unpaid principal amount of this Note from time to time outstanding (the "Interest") in lawful money of the United States of America. RECITALS A. Homeowner has purchased a condominium located at , Tustin, California (the "Unit"). The Unit is part of that certain housing development known as " " (the "Project"). B. Pursuant to that certain Housing Agreement (the "Housing Agreement") between the City and Moffett Meadows Partners, LLC, a Delaware limited liability company (the "Developer"), the Developer is required 10 sell certain of the homes in the ProjecI at an "Affordable Housing Cost" as defined in the Housing Agreement. C. The Unit has been designaled by the Developer as a Unit that is 10 be sold at an Affordable Housing Cost to a Very Low, Lower, or Moderate Income Household. D. Homeowner has represented to the Developer and the City that Homeowner and Homeowner's household intend to reside in the Unit as the Homeowner's principal residence at all times during the Homeowner's ownership of the Unit, that they will not rent the Unit to others, and that they are a Very Low, Lower, or Moderate Income Household (as defined in the Housing Agreement) as is applicable to the Unit. E. In order to enable the City to meet its continuing affordable housing obligations under State law, and because the City has facilitated the provision of the Affordable Housing Units through its adoption of the Specific Plan and housing incentives in the Density Bonus Ordinance, the City agreed to accept as part payment of amounts owed by the Developer to the City this Note executed by Homeowner in connection with Homeowner's purchase of the Unit. 202435.3 lun, 13.2005 F. In order to assure the City that Ihe Unit will remain an Affordable Housing Unil for forty-five years, the Homeowner and the Developer have agreed to record against title to the Unit an Affordable Housing Covenant (the "Affordable Housing Covenant"). G. The payment of this Affordable Housing Note and the performance of the Homeowner's obligations under the Affordable Housing Covenant are secured by a Deed of Trust With Assignment of Rents of even date herewith (the "Affordable Housing Deed of Trust") encumbering the Unit. AGREEMENT 1. Definition of Terms. (a) "Affordable Housing Cost" shall mean a price that does not exceed the Affordable Housing Cost for a Household size appropriate for the Unit for Very Low Income Households, Lower Income Households, or Moderate Income Households, depending upon which category the Unit has been placed by the Housing Agreement. Affordable Housing Cost for an Affordable Housing Unit shall be calculated as of the date of sale or resale of the Unit. Household size appropriate for the Unit means two persons for a one bedroom house, Ihree persons for a two bedroom house, four persons for a three bedroom house, five persons for a four bedroom house, etc. (b) "Affordable Housing Covenant" shall mean the covenant in the form attached to the Housing Agreement as Attachment No.5, and recorded against the title to the Unit. (c) "Affordable Housing Deed of Trust" means that certain deed of trust with Assignment of Rents of even date herewith executed by Homeowner which encumbers the Unit and secures the obligations of Homeowner and his or her successors and assigns as provided in (a) the Affordable Housing Covenant, (b) the Reimbursement Agreement attached as Exhibit "E" to the Affordable Housing Covenant, and (c) this Affordable Housing Note. (d) "Assistant City Manager" shall mean Ms. Christine Shingleton, or her successor. (e) "City" means the City of Tustin, and the City's successors and assigns. (f) "Developer" means Moffett Meadows Partners, LLC, or a Builder/Purchaser, as defined in the Housing Agreement, who has executed a City-approved assignment agreement as provided in the Housing Agreement. (g) "Interest" means the amount of interest payable on this Note computed as provided in Sections 3 and 4. (h) "Homeowner" means the person or persons executing this Note, and his, her or their successors and assigns. 202435.3 lu", ]3,2005 (i) "Housing Agreement" means the Agreement required by Condition 2.3 of Tustin City Council Resolution No. 05-37, and entered into as of , 2005 by and between the City and Moffett Meadows Partners, LLC. (j) "Note Documents" means this Note, the Affordable Housing Deed of Trust, the Affordable Housing Option Agreement and the Reimbursement Agreement. (k) "Owner" means Homeowner and his, her or their successors and assigns. (I) "Transfer" means any sale, assignment, conveyance, lease or transfer, voluntary or involuntary, of any interest in the Unit. Without limiting the generality of the foregoing, Transfer shall include (i) a transfer by devise, inheritance or intestacy; (ii) the creation of a life estate; (iii) the creation of a joint tenancy interest; (iv) a gift of all or any portion of the Unit; or (v) any voluntary conveyance of the Unit. (m) Terms not otherwise defined in this Affordable Housing Note are defined in the appropriate Affordable Housing Covenant. 2. Payments of Principal and Interest. The entire unpaid principal amount of this Note, together with any accrued and unpaid interest and any other amounts then due under the Affordable Housing Deed of Trust, shall be due and payable forty-six (46) years from the date of this Note (the "Maturity Date"), unless such amounts become due and payable sooner because of acceleration, in which case they shall be due and payable in full on the date of such acceleration. 3. Computation of Interest. There are two elements of interest that shall be payable on this Note: (a) The first element of interesl is simple inlerest on Ihe original principal amount of this Note at the rate of five percent (5%) per annum (the "Interest Rate") computed from the date of this Note. (b) The second element of interest is the amount by which the principal amount ofthis Note is increased as provided in Section 4. 4. Increase in the Principal Amount of this Note. In the event the Homeowner Transfers his, her or their interest in the Unit, the City has the right to accelerate the Maturity Date of this Note as provided in the Affordable Housing Covenant and Affordable Housing Deed of Trust. In the event of such a Transfer and the City does not exercise its right to accelerate the Maturity Date of this Note, then there shall be added to the principal amount of this Note an amount by which the fair market value of the Unit at the time of the closing of the Transfer is in excess of the sum of the Affordable Housing Cost of such Unit as of the date of the closing of the Transfer. Such amount shall be automatically added to the principal amount of this Note without the need for the consent of Homeowner or a demand by the City. Any interest that has accrued on this Note as of the date of the closing of the Transfer shall be deemed to be included in the increased principal amount of this Note, and interest shall begin accruing on the increased principal amount of this Note as of the date of the closing of the Transfer at the Interest Rate provided above. Except for such increase in the principal amount of this Note and the reduction 202435,3 Ju""'.2005 to zero of accrued inlerest due on Ihis Nole, Ihe Nole Documenls shall remain in full force and effect. 5. Partial Forgiveness of Amounts Pavable. Notwithstanding the foregoing, in the event that the then-owner of the Unit and all of the owner's predecessors-in-interest have fully complied with the Affordable Housing Covenant as of the Maturity Date, the Owner of the Unit need only pay five percent (5%) of the amount due and payable on the Maturity Date. 6. No Prepavment. The City desires that the Note not be prepaid in order to assure that the Unit will only be sold at an Affordable Housing Cost for forty-five (45) years from the initial sale of the Unit. In order to assure this result, Homeowner and the City agree that this Note may not be prepaid in whole or in part at anytime prior to the Maturity Date. 7. Additional Interest. If any payment due under this Note shall become overdue for a period longer than ten (10) days, the unpaid amount shall bear interest at the highest rate permitted by law (the "Default Rate"). 8. Events of Default and Remedies. Upon the occurrence and during the continuance of a default under any of the Note Documents (an "Event of Default"), the City, at its option, may: (a) declare all of Homeowner's obligations under the Note Documents to be immediately due and payable, without notice (except as provided by law); and (b) pursue each other right, remedy and power available to it under the Note Documents or available to it at law or in equity. The rights, remedies and powers of the City, as provided in this Note and the other Note Documents, are cumulative and concurrent, and may be pursued singly, successively or together against Homeowner, the Unit, any gnarantor of Homeowner's obligations and any other security given at any time to secure the payment of Homeowner's obligations, all at the sole discretion of the City. The City may resort to every other right or remedy available at law or in equity without first exhausting the rights and remedies contained in the Note Documents, all in the City's sole discretion. Failure of the City, for any period of time or on more than one occasion, to exercise its option to accelerate the Maturity Date shall not constitute a waiver of the right to exercise such right at any time during the continued existence of any Event of Default under any of the Note Documents or in the event of any subsequent Event of Default under this Note or any of the other Note Documents. The City shall not by any other omission or act be deemed to waive any of its rights or remedies under the this Note or the other Note Documents unless such waiver is contained in a writing signed by the City, and then only to the extent specifically set forth in such writing. A waiver in connection with one event shall not be construed as continuing or as a bar to or waiver of any right or remedy in connection with a subsequent event. 9. Waivers and Consents. Homeowner and each endorser, guarantor, surety or accommodation party of this Nole and each other person liable or to become liable for any part of the indebtedness evidenced by this Note, waives presentment for payment, demand, notice of nonpayment, notice of dishonor, protest of any dishonor, notice of protest and protest of this 202435.3 4 Jun, 13,2005 Note, and all other nolices in connection with Ihe delivery, acceplance, performance, defaull or enforcement of Ihe payment of this Note (except in the case of Homeowner as provided by law), and agree that their liability shall be unconditional and without regard to the liability of any other party and shall not be in any manner affected by any indulgence, extension of time, renewal, waiver or modification granted or consented to by the City. Homeowner and each such endorser, guarantor, surety, accommodation party and person liable or to become liable further consent to every extension of time, renewal, waiver or modification that may be granted by the City with respect to the payment or olher provisions of this Note, and to the release of any collateral given to secure the payment of amounts owing under this Note, with or without substitution, and agree that additional makers or guarantors or endorsers may become parties to this Note without notice to Homeowner or any olher parties and without affecting the liability of Homeowner or any other parties under this Note. 10. Due on Sale. The Affordable Housing Deed of Trust includes provisions permitting the City to declare all sums secured by the Deed of Trust due and payable if an encumbrance of or transfer of any interest in the Property occurs in violation of the encumbrance or transfer provisions of the Affordable Housing Covenant. 11. Miscellaneous. (a) Governing Law. All questions with respecl to the construction of this Note and the rights and liabilities of the parties to this Note shall be governed by the laws of the State of California. (b) Binding on Successors. This Note shall inure to the benefit of, and shall be binding upon, the successors and assigns of each of the parties to this Note. (c) The City's Costs. Homeowner shall pay all reasonable Costs incurred by the City in connection with the documentation, modification, workout, collection or enforcemenl of the amount evidenced by this Note (the "Loaq") or any of the Note Documents (as applicable), including probate, appellate and bankruptcy proceedings, any post-judgment proceedings to collect or enforce any judgment or order relating to the Loan or any of the Note Documents (as applicable), and all such Costs shall bear interest at the Default Rate until paid. For the purposes hereof "Costs" means all expenditures and expenses which may be paid or incurred by or on behalf of the City including repair costs, payments to remove or protect against liens, attorneys' fees (including fees of the City's inside counsel), receivers' fees, appraisers' fees, engineers' fees, accountants' fees, independent consultants' fees (including environmental consultants), all costs and expenses incurred in connection with any of the foregoing, the City's out-of-pocket costs and expenses related to any audit or inspection of the Unit, outlays for documentary and expert evidence, stamp taxes, publication costs, and costs (which may be estimates as to items to be expended after entry of an order or judgment) for procuring all such abstracts of title, title searches and examination, title insurance policies, and similar data and assurances with respect to title as the City may deem reasonably necessary either to prosecute any action or to evidence to bidders at any sale of the Unit the true condition of the title to, or the value of, the Unit. Further, all "Costs" shall include such other costs, expenses and fees as may be incurred by the City in the protection of the Property and the maintenance of the lien of the Affordable Housing Deed of Trust, including, attorneys' fees, expenses and costs in any 202435.3 Ju", 13.2005 liligation or proceeding affecling Ihe Affordable Housing Deed of Trusl, this Note, Ihe olher Note Documents, the Unit, including probate, appellate, and bankruptcy proceedings, and any post-judgment proceedings to collect or enforce any judgment or order relating to this Note, the Affordable Housing Deed of Trust or the other Note Documents, to obtain any court order or the appointment of a receiver to enforce the City's righls pursuant to Section 564 of the California Code of Civil Procedure and/or Section 2929.5 of the California Civil Code or in preparation for the commencement or defense of any action or proceeding, shall be immediately due and payable to the City, with interest thereon at the Default Rate. This provision is separate and several, and shall survive the merger of this provision into any judgment. (d) Entire Agreement. This Note and the other Note Documents constitute the entire agreement and understanding between and among the parties in respect of the subject matter of such agreements and supersede all prior agreements and understandings with respect to such subject matter, whether oral or written. (e) Waivers. Waiver by the City of any term, covenant or condition under this Note or the other Note Documents, or of any default by Homeowner under this Note or the other Note Documents, or any failure by the City to insist upon strict performance by Homeowner of any term, covenant or condition contained in this Note or the other Note Documents, shall be effective or binding on the City only if made in writing by the City; no such wavier shall be implied from any omission by the City to take action with respect to any such term, covenant, condition or default. No express written waiver by the City of any term, covenant, condition or default shall affect any other term, covenant, condition or default or cover any other time period than the application of any such term, covenant or condition to the matter as to which a waiver has been given or the default or time period specified in such express waiver. This Note may be amended only by an instrument in writing signed by Homeowner and the City. (f) Severability. If any part of this Note is declared invalid for any reason, such shall not affect the validity of the rest of the Note. The other parts of this Note shall remain in effect as if this Note had been executed without the invalid part. The parties declare that they intend and desire that the remaining parts of this Note continue to be effective without any part or parts that have been declared invalid. (g) Lawful Rate of Interest. In no event whatsoever shall the amount of interest paid or agreed to be paid to the City pursuant to this Note or any of the Note Documents exceed the highest lawful rate of interest permissible under applicable law. If, from any circumstances whatsoever, fulfillment of any provision of this Note and the other Note Documents shall involve exceeding the lawful rate of interest which a court of competent jurisdiction may deem applicable hereto ("Excess Interest"), then ipso facto, the obligation to be fulfilled shall be reduced to the highest lawful rate of interest permissible under such law and if, for any reason whatsoever, the City shall receive, as interest, an amount which would be deemed unlawful under such applicable law, such interest shall be applied to the principal amount of this Note (whether or not due and payable), and not to the payment of interest, or refunded to Homeowner if all principal hereof has been paid in full. Neither Homeowner nor any guarantor, endorser or surety nor their heirs, legal representatives, successors or assigns shall have any 202435,3 6 100,13,2005 action against the City for any damages whatsoever arising out of the payment or colleclion of any such Excess Interest. 12. Waiver ofTrial bv JUry. EACH OF HOMEOWNER AND THE CITY WAIVES TRIAL BY JURY WITH RESPECT TO ANY ACTION, CLAIM, SUIT OR PROCEEDING IN RESPECT OF OR ARISING OUT OF THIS NOTE OR THE OTHER NOTE DOCUMENTS. Executed this - day of ,200_. 202435,3 lu", 13. 2005 ATTACHMENT NO.4 AFFORDABLE HOUSING DEED OF TRUST 202435,3 lu", 13.2005 RECORDING REQUESTED BY: ) ¡ ~ ~ WHEN RECORDED MAIL TO: [SPACE ABOVE LINE FOR RECOROER'S USE ONL YI AFFORDABLE HOUSING DEED OF TRUST WITH ASSIGNMENT OF RENTS This AFFORDABLE HOUSING DEED OF TRUST WITH ASSIGNMENT OF RENTS, made 2O_, belween , herein called Truslor, whose address is herein called TRUSTEE, and CITY OF TUSTIN, a municipal corporation, herein called BENEFICIARY, WITNESSETH:Thal Truslor granls, Iransfers and assigns 10 Truslee in trusl, with power of sale, Ihal property in Ihe City of Tuslin, County of Orange, Slale of Cali fomi a, described as: See Exhibil "An attached herelo Together wilh Ihe renls, issues and profils thereof, subjecI, however, 10 Ihe righI, power and aulhority hereinafter given to and conferred upon Beneficiary 10 collecl and apply such renls, issues and profils for Ihe purpose of securing (I) the paymenl of Ihe sum of $ with interesl Ihereon according 10 Ihe tenns of a promissory note of even dale herewith ("Nolen) made by Truslor payable 10 the order of Beneficiary, and exlensions or renewals Ihereof, (2) paymenl of any sums advanced on behalf of Trustor according 10 the lenns of a reimbursemenl agreemenl of even dale herewilh ("Reimbursemenl Agreemenl") made by Truslor and Beneficiary, and exlensions and renewals thereof, (3) the perfonnance of each agreemenl and obligalion of Truslor according 10 Ihe lenns of an affordable housing covenanl of even dale herewilh ("Affordable Housing Covenant") made by Truslor in favor of Beneficiary, and exlensions and renewals Ihereof, (4) Ihe perfonnance of each agreement of Truslor incorporaled by reference or conlained herein, and (4) payment of additional sums and inleresl thereon which may hereafter be loaned 10 Truslor, or his successors or assigns, when evidenced by a promissory nole or noles reciling Ihal Ihey are secured by Ihis Deed of Trusl. A. To prolecl the security oflhis Deed of Trusl, Truslor agrees: I) To keep said property in good condilion and repair, not 10 remove or demolish any building thereon; 10 complele or reslore promptly and in good and workmanlike manner any building which may be conslrucled, damaged or deslroyed Ihereon and to pay when due all claims for labor perfonned and malerials furnished Iherefore, to comply with all laws affecting said property or requiring any alteralions or improvemenls 10 be made Ihereon, not to commil or pennil wasle thereof; nol 10 commit, suffer or pennil any acl upon said property in violalion of law; 10 cullivale, irrigale, fertilize, fumigale, prune and do all olher acls which from Ihe characler or use of said property may be reasonable necessary, Ihe specific enumeralions herein nol excluding Ihe general. 202435.3 June 13.2005 2) To provide, mainlain and deliver 10 Beneficiary fire insurance salisfactory 10 and with loss payable to Beneficiary. The amount collecled under any fire or other insurance policy may be applied by Beneficiary upon any indebledness secured hereby and in such order as Beneficiary may delerrnine, or at option of Beneficiary Ihe entire amount so collected or any part thereof may be released 10 Truslor. Such application or release shall not cure or waive any default or nolice of default hereunder or invalidale any acl done pursuanl 10 such nolice. 3) To appear in and defend any action or proceeding purporting 10 affecl the security hereof or the rights or powers of Beneficiary or Truslee; and 10 pay all cosls and expenses, including cost of evidence of litle and attorney's fees in a reasonable sum, in any such aclion or proceeding in which Beneficiary or Truslee may appear, and in any suil broughl by Beneficiary 10 foreclose Ihis Deed. 4) To pay, al leasl len days before delinquency all taxes and assessmenls affecling said property, including assessmenls on appurtenanl waler stock; when due, all encumbrances, charges and liens, with inleresl, on said property or any part thereof, which appear to be prior or superior herelo: all cosls, fees and expenses oflhis Trust. Should Truslor fail 10 make any paymenl or 10 do any acl as herein provided, Ihen Beneficiary or Truslee, bul wilhoul obligation so 10 do and wilhoul nolice 10 or demand upon Truslor and withoul releasing Truslor from any obligation hereof, may, make or do Ihe same in such manner or 10 such exlenl as either may deem necessary 10 prolecl the security thereof, Beneficiary or Truslee being aulhorized 10 enler upon said property for such purposes; appear in and defend any aclion or proceeding purporting 10 affecl Ihe security hereof or Ihe righls or powers of Beneficiary or Truslee; pay, purchase, contesl or compromise any encumbrance, charge, or lien which in Ihe judgmenl of either appears to be prior or superior hereto; and, in exercising any such powers, pay necessary expenses, employ counsel and pay his or her reasonable fees. 5) To pay immedialely and wilhoul demand all sums so expended by Beneficiary or Trustee, wilh inlerest from dale of expenditure at the amounl allowed by law in effecl al Ihe dale hereof; and 10 pay for any statemenl provided for by law in effecl al Ihe dale hereof regarding Ihe obligation secured hereby any amount demanded by Ihe Beneficiary nol 10 exceed Ihe maximum allowed by law al Ihe lime when said slatemenl is demanded. B. It is mutually agreed: I) That any award of damages in conneclion with any condemnation for public use of or injury 10 said property or any part Ihereof is hereby assigned and shall be paid 10 Beneficiary who may apply or release such moneys received by him in Ihe same manner and wilh the same effect as above provided for disposilion of proceeds of fire or olher insurance. 2) ThaI by accepling paymenl of any sum secured hereby after its due dale, Beneficiary does nol waive his righl eilher 10 require prompl paymenl when due of all other sums so secured or 10 declare default for failure so 10 pay. 3) ThaI al any lime or from lime 10 lime, withoul liability Iherefor and wilhoul nolice, upon written request of beneficiary and presenlalion of Ihis Deed, or a copy Ihereof; and wilhoul affecling Ihe personal liability of any person for paymenl of Ihe indebledness secured hereby. Truslee may: reconvey any part of said property; consenl 10 Ihe making of any map or pial Ihereof; join in granling any easemenl thereon, or join in any exlension agreemenl or any agreemenl subordinaling the lien or charge hereof. 4) That upon written requesl of Beneficiary slaling that all sums secured hereby have been paid, and upon surrender of Ihis Deed, or a copy Ihereof; and upon paymenl of ils fees, Truslee shall 202435.3 June 13.2005 reconvey, without warranty, the property then held hereunder. The recitals in such reconveyance of any matters or facls shall be conclusive proof of the lrulhfulness thereof. The Grantee in such reconveyance may be described as "Ihe person or persons legally enlitled thereto." 5) That as additional security, Trustor hereby gives to and confers upon Beneficiary Ihe righI, power and authority, during the conlinuance of these Trusts, to collect the rents, issues and profits of said property, reserving unlo Truslor Ihe righI, prior 10 any default by Truslor in paymenl of any indebledness secured hereby or in performance of any agreement hereunder, to collect and relain such renls, issues and profils as Ihey become due and payable. Upon any such default, Beneficiary may al any lime withoul notice, eilher in person, by agenl, or by a receiver to be appoinled by a court, and wilhout regard 10 Ihe adequacy of any security for Ihe indebtedness hereby secured, enler upon and lake possession of said property or any part Ihereof; in his own name sue for or olherwise collect such renls, issues, and profilS, including Ihose pasl due and unpaid, and apply Ihe same, less cosls and expenses of operalion and colleclion, including reasonable attorney's fees, upon any indebledness secured hereby, and in such order as Beneficiary may delermine. The enlering upon and laking possession of said property, Ihe colleclion of such renls, issues and profils and Ihe applicalion Ihereof as aforesaid, shall nol cure or waive any defaull or notice of defaull hereunder or invalidale any acl done pursuanl 10 such notice. 6) ThaI upon default by Truslor in payment of any indebledness secured hereby or in performance of any agreement hereunder (including, without limilalion, any default under the Note, Reimbursement Agreement or Affordable Housing Covenant), Beneficiary may declare all sums secured hereby immedialely due and payable by delivery 10 Truslee of written declaration of defaull and demand for sale and of written nolice of defaull and of election 10 cause 10 be sold said property, which nolice Truslee shall cause 10 be filed for record. Beneficiary also shall deposil wilh Truslee Ihis Deed and all documenls evidencing expenditures secured hereby. After Ihe lapse of such time as may Ihen be required by law following Ihe recordalion of said notice of default, and nolice of sale having been given as Ihen required by law, Truslee, wilhoul demand on Trustor, shall sell said property al Ihe lime and place affixed by il in said notice of sale, either as a whole or in separale parcels, and in such order as it may delermine, al public auction 10 Ihe highest bidder for cash. in lawful money oflhe United Slales, payable al lime of sale. Truslee may poslpone sale of all or any portion of said property by public announcemenl al such time and place of sale, and from lime 10 time Ihereafter may poslpone such sale by public announcemenl at Ihe lime fixed by Ihe preceding poslponemenl. Truslee shall deliver 10 such purchaser ils deed conveying Ihe property so sold, bul wilhoul any covenanl or warranty, express or implied. The recilals in such deed of any matters or facls shall be conclusive proof of the trulhfulness Ihereof. Any person, including Truslor, Truslee, or Beneficiary as hereinafter defined, may purchase al such sale. After deducling all costs, fees and expenses of Trustee and of Ihis Trust, including cost of evidence of litle in conneclion with sale, Truslee shall apply Ihe proceeds of sale 10 paymenl of: all sums expended under the lenns hereof; nol then repaid, with accrued inlerest at Ihe amounl allowed by law in effect al Ihe dale hereof; all olher sums then secured hereby; and Ihe remainder, if any, 10 Ihe person or persons legally enlitled Iherelo. 7) Beneficiary, or any successor in inleresl 10 any obligation secured hereby, may from lime 10 lime, by inslrumenl in wriling, subslitule a successor or successors 10 any Truslee named herein or acting hereunder, which inslrument, executed by the Beneficiary and duly acknowledged and recorded in Ihe office of Ihe recorder of the county or counties where said property is situaled shall be conclusive proof of proper substitulion of such successor Truslee or Trustees, who shall, withoul conveyance from the Truslee predecessor, succeed 10 all ils litle, eslale, righls, powers and duties. Said inslrument must contain Ihe name oflhe original Truslor, Truslee and Beneficiary hereunder, Ihe book and page where Ihis Deed is recorded and Ihe name and address oflhe new Truslee. 2024353 4 June 13,2005 8) That this Deed applies to, inures to the benefit of; and binds all parties hereto, their heirs, legalees, devisees, administralors, execulors; successors and assign. In this Deed, whenever Ihe conlexl so requires, the masculine gender includes the feminine and/or neuter, and Ihe singular number includes the plural. 9) That Trustee accepts this Trust when this Deed, duly executed and acknowledged, is made a public record as provided by law. Truslee is nol obligaled 10 nolifY any party herelo of pending sale under any other Deed of Trusl or of any aclion or proceeding in which Truslor, Beneficiary or Truslee shall be a party unless broughl by Truslee. 10) All capitalized lerms used in this Deed of Trusl and which are not defined shall have Ihe meaning ascribed 10 such lerms under Ihe Affordable Housing Covenant. Truslor agrees for ilself and ils successors and assigns, and every successor 10 Truslor's inlerest in said property, or any part Ihereof, 10 abide by the terms of the Affordable Housing Covenant during the Affordability Period, including, withoul limitation, Ihat: (a) Said property shall not be Transferred excepl 10 Permitted Transferees in accordance with the requiremenls of Seclion 4 of the Affordable Housing Covenanl; and (b) Said property shall be subjecI 10 (i) the Further Encumbrance limilalions set forth under Section S(c) of Ihe Affordable Housing Covenanl, and (ii) Ihe lerms and condilions of Ihe Reimbursemenl Agreemenl and Ihe Affordable Housing Oplion Agreement. The undersigned Truslor requesls Ihal a copy of any nolice of defaull and of any nolice of sale hereunder be mailed 10 him al his address hereinbefore sel forth. Signature of Truslor Signature of Trustor Printed Name: Prinled Name: Daled STATE OF CALIFORNIA COUNTY OF On before me, Public in and for said County and Slale, personally appeared personally known 10 me (or proved 10 me on the basis of satisfaclory evidence) 10 be the person(s) whose name(s) is/are subscribed 10 Ihe wilhin inslrumenl and acknowledged 10 me Ihal he/she/lhey execuled Ihe same in his/her/their aulhorized capacity(ies), and Ihal by his/her/lheir signature(s) on the instrumenl Ihe person(s)or Ihe enlity upon behalf of which Ihe person(s) acled, execuled the instrument. a Nolary WITNESS my hand and official seal. Signature (Th;, ace. for offidal notar;.1 ,eal) 202435.3 l"neI3.2005 DO NOT RECORD REQUEST FOR FULL RECONVEYANCE TO , TRUSTEE: The undersigned is entitled to the indebtedness secured by the foregoing Deed of Trust. Said indebtedness secured by said Deed of Trust, have been fully paid and satisfied; and you are hereby requested and directed, on payment 10 you of any sums owing to you under the tenns of said Deed of Trust, to cancel any evidences of indebtedness secured by said Deed of Trusl delivered to you herewith, logether with the said Deed of Trust, and to reconvey, without warranty, to the parties designaled by the tenns of said Deed of Trust, all the estate now held by you under the same. Daled Please mail Deed of Trust and Reconveyance 10: Do not lose or destroy Ihis Deed of Trusl or Ihe evidences of indebtedness ils secures. They must be delivered 10 the Truslee for cancellalion before reconveyance will be made. 2024353 6 June 13.2005 CERTIFICATE OF ACCEPTANCE OF DEED OF TRUST (City of Tustin) This is to certify that the interest in real property conveyed by the deed of trust dated , - from , as trustor, to the CITY OF TUSTIN, a municipal corporation, as beneficiary ("grantee"), is hereby accepted by the undersigned officer on behalf of the CITY OF TUSTIN pursuant to authority conferred by Tustin City Council on March 3, 2003, and the grantee consents to recordation thereof by its duly authorized officer. Dated: . Title: [City Manager or his designee, Assistant City Manager] Do Nol lose or destroy this Deed of Trust. [t must be delivered to Ihe Truslee forcancellation before reconveyance will be made. 202435.3 1 June 13,2005 202435.3 ATTACHMENT NO.5 AFFORDABLE HOUSING COVENANT (VERY LOW INCOME) -1- RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: City of Tustin 300 Centennial Way Tustin, California 92780 Attention: Assistant City Manager E.empt From Recording Fee Pursuant to Government Code Sectio~ 27383 AFFORDABLE HOUSING COVENANT (Very Low Income) THIS AFFORDABLE HOUSING COVENANT (this "Covenant") is made as of ,200_, by (the "Homeowner") in favor of the CITY OF TUSTIN, a municipal corporation (the "City"). RECITALS A. Homeowner has purchased a condominium located at , Tustin, California, as such real property is more particularly described in Exhibit "A" attached hereto and incorporated herein (the "Unit"). The Unit is part of that certain housing development known as "COLUMBUS SQUARE" (the "Project"). B. Pursuant to the Housing Agreement between the City and Moffett Meadows Partners LLC, a Delaware limited liability company (the "Developer"), a memorandum of which has been recorded in the Official Records of the County of Orange, the Developer is required to sell certain of the homes in the Project to "Very Low Income Households", at an "Affordable Housing Cost for Very Low Income Households". C. The Unit has been designated by the Developer as a Unit that is to be sold to a Very Low Income Household. D. Homeowner has represented to the Developer and the City that Homeowner and Homeowner's household intend to reside in the Unit as the Homeowner's principal residence at all times during the Homeowner's ownership of the Unit, that they will not rent the Unit to others, and that they are a Very Low Income Household. E. In order to enable City to meet is continuing affordable housing obligations under State law, and because the City has facilitated the provision of Affordable Housing Units through its adoption of the Specific Plan and housing incentives in the Density Bonus Ordinance, the City has agreed to accept a promissory note executed by Homeowner (the "Affordable Housing Note") in connection with Homeowner's purchase of the Unit. The Affordable Housing Note is, or shall be, secured by the Affordable Housing Deed of Trust. 202435.3 -2- F. The City owns that certain parcel ofland adjacenl 10 the Project that is more particularly described on Exhibit "B" attached hereto. G. This Covenant is intended to benefit the parcel ofland described on Exhibit "B", and the obligations and rights contained herein are intended to run with the land and to be subordinale 10 a "First Lien" (as defined below). NOW, THEREFORE, for good and valuable consideration, the parties agree as follows: DEFINITIONS. "Affordability Period" means that period of time commencing upon the Date of this Covenant and terminating on the forty-fifth (45th) anniversary of such date. "Affordable Housing Cost" for an Affordable Housing Unit designated to be sold to, and occupied by, a Very Low Income Household shall mean a price that does not exceed the Affordable Housing Cost for a Household size appropriate for the Unit for Very Low Income Households. Affordable Housing Cost for an Affordable Housing Unit shall be calculated as of the date of sale or resale of the Unit. Household size appropriate for the Unit means two persons for a one bedroom house, three persons for a two bedroom house, four persons for a three bedroom house, five persons for a four bedroom house, etc. "Affordable Housing Cost for Very Low Income Households" means the cost per Unit for Very Low Income Households as more particularly defined in Health and Safety Code Section 50052.5(b)( I) and as generally described herein as a price per Unit which results in Monthly Housing Costs for the purchaser which shall not exceed one-twelfth of thirty percent (30%) times fifty percent (50%) of the annual Orange County Median Income, adjusted for Household size appropriate for the Unit. "Affordable Housing Note" means that promissory note executed by Homeowner as part of Homeowner's purchase of the Unit from the Developer. The principal amount oflhe Affordable Housing Note is an amount not in excess of the difference between the appraised fair market value of the Unit if it was a Market Rate Unit, and the sales price required to sell the Unit at an Affordable Housing Costs for Very Low Income Households. "Affordable Housing Option Agreement" means the agreement attached hereto as Exhibit "F" that provides an option to purchase in favor of the City as provided in Section 7, which option shall be exercisable in the event that the Owner of a Unit is in breach of the owner's obligations in this Covenant or in the event the due date of the Affordable Housing Note is accelerated as the result of a Transfer by the Owner. "Affordable Housing Deed of Trust" means that certain deed of trust executed by Homeowner which encumbers the Unit and secures the obligations of Homeowner and his or her successors and assigns as provided in (a) this Covenant, (b) the Reimbursement Agreement attached hereto as Exhibit "E", and (c) the Affordable Housing Note. 202435.3 .3- "City" means the City of Tustin and the City's successors and assigns. "County" means the County of Orange, California. "Covenant" means this Affordable Housing Covenant. "Date of this Covenant" means the date in the first paragraph of this Covenant. "Default" means the failure of a party to perform any action or covenant required by this Covenant within the time periods provided herein following notice and opportunity to cure. A deed in lieu of foreclosure of the Affordable Housing Deed of Trust shall not constitute a Default under this Covenant. "Developer" means Moffett Meadows Partners LLC, a Delaware limited liability company, described in Recital B, or its City-approved assignee as described in Section 6 of the Housing Agreement. "First Lien" means the lien of a purchase money Lender which secures the obligations of the Owner to repay amounts owed to the Lender. "Homeowner" means the person or persons set forth in the first paragraph of this Covenant, and his, her or their successors and assigns. "Legal Description" means the legal description of the Unit which is attached hereto as Exhibit "A" and incorporated herein. "Lender" means an institution making a purchase money loan to the Owner for the purchase of the Unit. "Monthly Housing Cost" means, for a Very Low Income Household purchasing the Unit, all of the following associated with the Unit, estimated or known as of the date of the proposed sale of the Unit: (i) principal and interest payments on a fixed interest rate mortgage loan, and any loan insurance fees associated therewith; (ii) property taxes and assessments; (iii) fire and casualty insurance covering replacement value of property improvements; (iv) any homeowner association fees; and (v) a reasonable utility allowance. Monthly housing cost of a purchaser shall be an average of estimated costs for the next twelve (12) month period. "Notice of Intent to Transfer" means the Notice of Intent to Transfer attached hereto as Exhibit "c" and incorporated herein by reference. "Owner" means Homeowner and any subsequent Transferee of the Unit. "Permitted Transfer" means any Transfer which is permitted pursuant to Section 4 hereof. 202435,3 -4- "Permitted Transferee" means a Transferee from the Homeowner or from any Permitted Transferee who acquires ownership of the Unit as set forth in Section 4 hereof. "Prohibited Transfer" means any Transfer which is not permitted pursuant to Section 4 hereof. "Project" means that certain housing development known as Columbus Square in which the Unit is located. "Reimbursement Agreement" means the Reimbursement Agreement to be executed by the Homeowner in favor of the City, in the form attached hereto as Exhibit "E" and incorporated herein. "Request for Notice" means the Request for Notice of Default attached hereto as Exhibit "D" and incorporated herein. "Transfer" shall mean any sale, assignment, conveyance, lease or transfer, voluntary or involuntary, of any interest in the Unit. Without limiting the generality of the foregoing, Transfer shall include (i) a transfer by devise, inheritance or intestacy; (ii) the creation of a life estate; (iii) the creation of a joint tenancy interest; (iv) a gift of all or any portion of the Unit; or (v) any voluntary conveyance of the Unit. "Transferee" shall mean any natural person or entity who obtains ownership rights in the Unit pursuant to a Transfer. "Unit" means that certain real property located at the street address set forth in Recital A and legally described in the Legal Description. "Very Low Income Household" a Household occupied by persons and families whose gross income does not exceed the qualifying limits for very low income families set forth in Health and Safety Code Section 50105. l. COVENANT RE: SALES OF UNIT. Homeowner covenants and agrees that, during the Affordability Period, each subsequent resale of the Unit by the then-Owner thereof shall be to a Very Low Income Household, at an Affordable Housing Cost for Very Low Income Households. Homeowner further covenants and agrees Ihat, during the Affordability Period, each Owner shall abide by and be bound by all the obligations of Homeowner set forth in this Covenant. Homeowner agrees that the obligations of Homeowner set forth in this Covenant shall be secured by the Affordable Housing Deed of Trust recorded concurrently with the recordation of the Covenant. HOMEOWNER AND EACH SUCCESSOR, HEIR OR ASSIGN OF HOMEOWNER UNDERSTAND THAT THE DETERMINATION OF THE AFFORDABLE HOUSING COST CAN BE MADE ONLY AT THE TIME OF A PROPOSED SALE OR OTHER TRANSFER, TAKING INTO CONSIDERATION PREVAILING INTEREST RATES, THE OFFERED TERMS OF SALE, THE ECONOMIC CIRCUMSTANCES OF THE PROPOSED PURCHASER AND OTHER FACTORS THAT CANNOT BE 202435.3 -5- ACCURATELY PREDICTED, AND THAT THE TRANSFER PRICE PERMITTED HEREUNDER MAY BE LESS THAN THE FAIR MARKET VALUE OF THE SAME OR OTHER SIMILAR REAL PROPERTY WHICH IS NOT ENCUMBERED BY THIS COVENANT. HOMEOWNER AND EACH SUCCESSOR, HEIR OR ASSIGN OF HOMEOWNER FURTHER ACKNOWLEDGES THAT AT ALL TIMES IN SETTING THE TRANSFER PRICE, THE PRIMARY OBJECTIVE OF THE CITY AND THIS COVENANT IS TO PROVIDE HOUSING TO VERY LOW INCOME HOUSEHOLDS AT AN AFFORDABLE HOUSING COST. Homeowner's Initials 2. HOMEOWNER'S REPRESENTATIONS AND WARRANTIES AS TO THE SALE OF THE UNIT TO HOMEOWNER. Homeowner represents and warrants 10 Ihe Developer and the City that the financial and other information which Homeowner has provided to the Developer and the City with respect to Homeowner's income and the purchase price of the Unit was true and correct at the time such information was provided, and remains true and correct as of the Date of this Covenant. 3. PERMITTED TRANSFERS OF THE UNIT. a. Notice Required for a Transfer. During the Affordability Period, Ihe Unit, and any interest therein, shall not be Transferred by the Owner except with the express written consent of the City, which consent shall be given only if the Transfer is in strict compliance with the provisions of this Section 4. Each Owner understands that appropriate transfers will be permitted and neither the City nor the Lender may determine that transfers which result from marriage, divorce, death of a spouse, or which are otherwise required to be permitted under applicable Federal law provided that the transferee otherwise complies with Section 4(i), (ii), (iii), (iv), (v), and (vi), constitute a Default under this Covenant or the Affordable Housing Deed of Trust. During the Affordability Period in the event the Ihen-Owner of the Unit, desires to Transfer the Unit, prior to the Transfer the Owner shall notify the City by delivering a Notice of Intent to Transfer to the City. City hereby agrees to permit Transfers of the Unit to proposed Transferees ("Permitted Transferees") provided the Transfer satisfies all of the following conditions: i. Notice to City. The Owner shall send the Notice ofIntent to Transfer to the City at the address set forth in Section 22 hereof. The Notice ofIntent to Transfer shall identify the proposed Transferee, certify that to the best knowledge of the Owner the Transferee is a Very Low Income Household, certify that the sales price is no more than an Affordable Housing Cost for Very Low Income Households, and shall include copies of the sales contract, the grant deed or other document that is proposed to be used to effectuate the Transfer, copies of documents verifying that the proposed Transferee is a Very Low Income Household (including, but not limited to, documents verifying the income of the proposed Transferee) and all other material documents related to the proposed Transfer. 202435.3 -6- ii. Qualificalion of Proposed Transferee. The proposed Transferee shall provide and certifY to Ihe City with such informalion as the City may request related 10 Ihe proposed Transfer in the form provided by the City, including without limitation: the Social Security Number of the proposed Transferee, copies of the federal income tax returns filed by the proposed Transferee for the prior two (2) calendar years, copies of the two most current wage earning statements of the proposed Transferee, a certification as to the income and family size of the proposed Transferee, the purchase price the Proposed Transferee intends to pay for the Unit, and a current appraisal reflecting the fair market value of the Unit on the assumption that the Unit is free from the restrictions provided for in this Covenant. The proposed Transferee shall also submit to the City an agreement by the Transferee to assume the obligations of an Owner of the Unit as set forth in this Covenant in such form as the City may request. iii. Certificates from Parties. The Owner and proposed Transferee each shall certify in writing, in a form acceptable to the City, that the Transfer shall be closed in accordance with, and only with, the terms of the sales contract and other documents submitted to and approved by the City and that all consideration delivered by the proposed Transferee to Owner has been fully disclosed to the City. The written certificate shall also include a provision that in the event a Transfer is made in violation of the terms of this Covenant or false or misleading statemenls are made in any documents or certificate submitted to the City for its approval of the Transfer, the 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 Owner and its transferee. iv. Agreemenl 10 Assume Ihe Obligations of This Covenant. The grant deed or other document effectuating the Transfer of the Unit shall include the following: (a) references to this Covenant and the obligation of the Transferee to be bound by all the obligations of Homeowner set forth in this Covenant, (b) a reference to the Affordable Housing Deed of Trust, (c) a reference to the Affordable Housing Option Agreement, (d) a reference to the due on sale provisions of the Affordable Housing Note, (e) a reference to the Reimbursement Agreement and (f) a covenant that will require the Transferee, and any successor or assign of the Transferee, to include in any document Transferring the Unit a reference to this Covenant, the Affordable Housing Deed of Trust, the Affordable Housing Option Agreement, the Reimbursement Agreement, the due on sale provisions of the Affordable Housing Note, and the obligation of the Transferee to be bound by the obligations set forth in this Covenant, the Affordable Housing Deed of Trust, the Affordable Housing Option Agreement, the Reimbursement Agreement and the due on sale provisions of the Affordable Housing Note. v. Agreement to Increase Amount due on the Affordable Housing Note. The Transferee must agree to increase the amount of the Affordable Housing Note to the amount by which the fair market value of the Unit at the time of the closing ofthe Transfer is in excess of the sum of the Affordable Housing Cost of such Unit as of the date of the closing of the Transfer. Any interest that has accrued on the Affordable Housing Note as of the date of the closing of the Transfer shall be deemed to be included in the increased principal amount ofthe note, and interest shall begin accruing on the increased principal amount of the note as of the date of the closing of the Transfer at the rate provided in the note. Except for such increase in the principal amount of the Affordable Housing Note and the reduction to zero of accrued 202435,3 -7- inlerest due on Ihe note, Ihe Affordable Housing Note, the Affordable Housing Deed of Trust, the Affordable Housing Option Agreement and the Reimbursement Agreement shall remain in full force and effect. vi. The City's Tille Policy. The City musl receive a litle policy, in an amount equal to the amount then due on the Affordable Housing Note as increased as provided in this Section 4, insuring the Affordable Housing Deed of Trust as a monetary lien of second priority, i.e., subordinate in priority among monetary liens only to the monetary lien of any purchase money deed of trust recorded at the time of sale which deed of trust shall secure an amount not in excess of the then Affordable Housing Cost of the Unit. vii. Spousal Transfers. Notwithstanding the foregoing provisions of Sections 4(a)(vi) and 4(a)(vii), in the event of a transfer to a spouse in a dissolution proceeding the City shall not require a new title policy nor shall the City require reimbursement for its costs. b. Notice of Prohibited Transfer. Within fifteen (15) days after the receipt by the City of the notices, documents and agreements referred to in Section 4(a), the City shall determine and give notice to the Owner as to whether the proposed Transfer is a Permitted Transfer or Prohibited Transfer. Transfers that result from marriage, divorce, or death of a spouse, or that are otherwise required to be permitted under applicable Federal law shall not be deemed by the City as a Prohibited Transfer so long as the Transferee complies with this Section 4(i), (ii), (iii). (iv), (v) and (vi). In the event that the proposed Transfer is a Prohibited Transfer, such notice to the Owner shall specify why the Transfer is a Prohibited Transfer. If the violation is not corrected to the satisfaction of the City within ten (10) days after the date of the notice, or within such further time as the City determines is necessary to correct the violation, the City may declare a Default under this Covenant. Upon the declaration of a Default, the City may apply to a court of competent jurisdiction for specific performance of this Covenant, for an injunction prohibiting a proposed sale or Transfer in violation of this Covenant, for a declaration that the Prohibited Transfer is void, or for any such other relief as may be appropriate. c. Delivery of Documents After the Closing. Upon the close of the proposed Transfer, the transferor and the Transferee, as applicable, shall provide Ihe City with a copy of the final sales contract, settlement statement, escrow instructions, all certificates required by this Section 4 and any other documents which the City may reasonably request. d. Refinancings. This Section 4 shall not prohibit the encumbering of title for the sole purpose of securing financing of the purchase price of the Unit; however, any such financing (i) must be a First Lien, (ii) must not be in excess of the Affordable Housing Cost of such Unit as of date of the refinancing, (iii) must be in compliance with the Affordable Housing Deed of Trust, and (iv) shall be subordinate to this Covenant. 4. ENCUMBRANCES. a. Subordination. The provisions of this Covenant and the Affordable Housing Deed of Trust shall be subordinate to any First Lien on the Unit that secures the payment of a principal amount that is not in excess, as of the time the First Lien is recorded against the Unit, of the Affordable Housing Cost of the Unit. Notwithstanding the fact that the 202435,3 -8- Covenant and Affordable Deed of Trust is subordinate to an appropriate First Lien, said fact shall not in any manner modify the obligations from time 10 time existing between the Owner and the City. The intent of this provision regarding subordination is that in the event of a foreclosure of the First Lien or the recordation of a deed in lieu of foreclosure of the First Lien, this Covenant shall no longer encumber the Unit and shall not be binding upon the lender or lender's successors or assigns, but shall in all cases remain binding upon the Owner. The City shall execute such written instruments for the subordination of its rights under this Covenant and the Affordable Housing Deed of Trust, including the Affordable Housing Option Agreement and the Reimbursement Agreement, as may reasonably be requested by the Lender. b. Request for Notice of Default. The City may cause a Request for Notice to be recorded on the Unit 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 "D" and incorporated herein. c. Further Encumbrances Prohibited. Homeowner agrees that he or she shall not record or cause or permit the recordation of any deed of trust, mortgage, lien or other instrument creating a security interest in or to the Unit (a "Further Encumbrance") other than a First Lien, the Affordable Housing Deed of Trust and the Affordable Housing Option Agreement. 5. REIMBURSEMENT AGREEMENT. Homeowner covenants and agrees to pay timely any and all amounts due and payable on the obligations secured by the First Lien. Homeowner and the City shall enter into a Reimbursement Agreement, in the form attached hereto as Exhibit "E" and incorporated herein, which provides that the City may make payments to cure a Default or delinquency ofany obligation secured by the First Lien, on the condition that the Homeowner agrees to reimburse the City for any payments made to cure such Default or delinquency. The Homeowner's repayment obligations pursuant to Ihe Reimbursement Agreement shall be secured by the Affordable Housing Deed of Trust. 6. OPTION TO ACQUIRE UNIT UPON DEFAULT OF OBLIGATIONS UNDER THIS COVENANT. Homeowner agrees to enter into an Affordable Housing Option Agreement, in the form attached hereto as Exhibit "F" and incorporated herein, which grants to City an option to purchase the Unit in the event that the Homeowner is in Default of any of his or her obligations under this Covenant. 7. USES. Homeowner covenants and agrees to devote, use and maintain the Unit in accordance with this Covenant. All uses conducted on the Unit, including, without limitation, all activities undertaken by the Homeowner pursuant to this Covenant, shall conform to all applicable provisions of the Tustin Municipal Code, and the recorded documents pertaining to and running with the Unit. 8. NONDISCRIMINATION COVENANTS. Homeowner covenants by and for himself or herself, and any successors in interest, that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, 202435.3 -9- lenure or enjoymenl of the Unit, nor shall the Homeowner or any person claiming under or through him or her establish or permit any such practice or practices of discriminalion or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the Unit. The foregoing covenants shall run with the land. 9. MAINTENANCE OF UNIT. Homeowner shall maintain the improvements and landscaping on the Unit in a manner consistent with community standards which will uphold the value of the Unit, in accordance with the Tustin Municipal Code. Homeowner also agrees to comply with all applicable federal, state and local laws. 10. OCCUPANCY STANDARDS. The Unit shall be used as the principal residence of Homeowner and Homeowner's family and for no other purpose. Homeowner shall not enter into an agreement for the rental or lease of the Unit, and Homeowner shall not otherwise rent or lease the Unit. The City may grant a temporary waiver of the above requirements for good cause, in the City's sole and absolute discretion. Examples of situations which may result in the grant of a temporary waiver include: (i) rental by Owner where necessary to accommodate a mandatory job transfer required by Owner's employer (not including Owner, if Owner is self- employed); (ii) rental necessitated by a medical or financial emergency, proof of which emergency has been delivered to the City, and (iii) other situations which constitute a "hardship" situation consistent with the intentions of this Covenant and the goal of the City to have affordable Owner occupied homes in the Project. The maximum occupancy of the Unit shall not exceed three persons ifthe Unit is a one bedroom home, five persons if the Unit is a two bedroom home, or seven persons if the Unit is a three bedroom home. Homeowner shall, commencing upon the first anniversary of the date of this Covenant first set forth above and on each succeeding anniversary thereafter, submit to the City an affidavit of occupancy in the form provided by the City. II. EFFECT OF VIOLATION OF THE TERMS AND PROVISIONS OF THIS COVENANT. a. In General. The covenants established in this Covenant shall, without regard to technical classification and designation, be binding for the benefit and in favor of the City, its successors and assigns, as to those covenants which are for its benefit. The covenants contained in this Covenant shall remain in effect for the periods of time specified herein. The covenants against discrimination shall remain in effect in perpetuity. The City is deemed the beneficiary of the terms and provisions of this Covenant 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 Covenant and the covenants running with the land have been provided. This Covenant and the covenants therein shall run in favor of the City, without regard to whether the City has been, remains or is an owner of any land or interest therein in the Unit or in the Project Area. The City shall have the right, if the Covenant 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 Covenant and covenants may be entitled. 202435.3 -10- b. Notice of Default. Failure or delay by Homeowner to perform any term or provision of this Covenant which is not cured within thirty (30) days after receipt of notice from the City constitutes a Default under this Covenant; provided, however, if such Default is of the nature requiring more than thirty (30) days to cure, Homeowner may avoid Default hereunder by immediately commencing to cure within such thirty (30) day period, and thereafter diligently pursuing such cure to completion. Failure or delay in giving notice by the City shall not constitute a waiver of any Default, nor shall it change the time of Default. c. City's Remedies. Upon the declaration of a Default, the City may (i) apply to a court of competent jurisdiction for specific performance, for an injunction prohibiting any act or omission in violation of this Covenant, or for any such other relief as may be appropriate, (ii) exercise the City's rights under the Affordable Housing Deed of Trust, including, without limitation, foreclosure of the Unit, and (iii) pursue such other rights and remedies permitted under applicable law. d. Prohibited Transfers Void. Any attempt by the Homeowner to make a Prohibited Transfer of title to or any interest in the Unit in violation of this Covenant shall be voidable by City. 12. INDEMNIFICATION. Homeowner shall defend, indemnify and hold harmless the City and its officers, officials, agents, employees, representatives, and volunteers from and against any loss, liability, claim, or judgment relating in any manner to the Homeowner's use of the Unit or Homeowner's violation of this Covenant. The Homeowner shall remain fully obligated for the payment of taxes, liens and assessments related to the Unit. There shall be no reduction in taxes for Homeowner, nor any transfer of responsibility to the City 10 make such payments, by virtue of this Covenant. 13. INSURANCE. Homeowner shall maintain, during the term of this Covenant, an all-risk property insurance policy insuring the Unit in an amount equal to Ihe full replacement value of the structures on the Unit. 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. Homeowner shall transmit a copy of the certificate of insurance to the City within thirty (30) days of the effective date of this Covenant, and Homeowner shall annually transmit to the 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 the City at the address set forth in Section 22 hereof. Any certificate of insurance must be in a form, content and with companies approved by the City. 14. TIME OF THE ESSENCE. Time is of the essence with respect to all provisions of this Covenant in which a definite time for performance is specified; provided, however, that the foregoing shall not be construed to limit or deprive a party of the benefits of any grace or use period provided for in this Covenant. 15. NO WAIVER. No waiver of any provision or consent to any action under this Covenant shall constitute a waiver of any other provision or consent to any other action, whether or not similar. No waiver or consent shall constitute a continuing waiver or consent or commit a '02435,3 -11- party to provide a waiver in the future except to the extent specifically set forth in writing. Any waiver given by a party shall be null and void if the party requesting such waiver has not provided a full and complete disclosure of all material facts relevant to the waiver requested. 16. FURTHER ASSURANCES. Homeowner shall execute any further documents consistent with the terms of this Covenant, including documents in recordable form, as the City shall from time to time find necessary or appropriate to effectuate its purposes in entering into this Covenant. 17. GOVERNING LAW. Homeowner hereby agrees to comply with all ordinances, rules and regulations of the City. Nothing in this Covenant is intended to be, nor shall it be deemed to be, a waiver of any City ordinance, rule or regulation. This Covenant shall be governed by the laws of the State of California. Any legal action brought under this Covenant 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 of California. 18. AMENDMENT OF COVENANT. No modification, rescission, waiver, release or amendment of any provision of this Covenant shall be made except by a written agreement executed by Homeowner and the City. 19. CITY MAY ASSIGN. The City may, at its option, assign its rights hereunder without obtaining the consent of the Homeowner. 20. HOMEOWNER ASSIGNMENT PROHIBITED. In no event shall Homeowner assign or transfer any portion of this Covenant without the prior express written consent of the City, which consent shall be given by the City only in the event that the City determines the Transfer fully complies with Section 4. This section shall not affect or diminish the City's right to assign all or any portion of its rights hereunder. 21. NOTICES. All notices, demands, consents, requests and other communications required or permitted to be given under this Covenant shall be in writing and shall be deemed conclusively to have been duly given (a) when hand delivered to the other party; (b) three (3) business days after such notice has been sent by United States mail via certified mail, return receipt requested, postage prepaid, and addressed to the other party as set forth below; or (c) the next business day after such notice has been deposited with a national overnight delivery service reasonably approved by the parties (Federal Express and Airborne Express are deemed approved by the parties), postage prepaid, addressed to the party to whom notice is being sent as set forth below with next-business-day delivery guaranteed, provided that the sending party receives a confirmation of delivery from the delivery service provider. Unless otherwise provided in writing, all notices hereunder shall be addressed as follows: To Homeowner: 202435.3 -12- To City: City of Tustin 300 Centennial Way Tustin, California 92780 Attention: City Manager and Attention: Assistant City Manager Either party may change its address for notice by giving written notice thereof to the other party. 22. ATTORNEYS' FEES AND COSTS. If any party to this Covenant institutes any action, suit, counterclaim, appeal, arbitration or mediation for any relief against another party, declaratory or otherwise (collectively an "Action"), to enforce the terms hereof or to declare rights hereunder or with respect to any inaccuracies or material omissions in connection with any of the covenants, representations or warranties on the part of the other party to this Agreement, then the prevailing party in such Action, whether by arbitration or final judgment, shall be entitled to have and recover of and from the other party all costs and expenses of the Action, including reasonable attorneys' fees and costs (at the prevailing party's attorneys' then- prevailing rates as increased from time to time by the giving of advanced written notice by such counsel to such party) incurred in bringing and prosecuting such Action and/or enforcing any judgment, order, ruling or award (collectively, a "Decision") granted therein, all of which shall be deemed to have accrued on the commencement of such Action and shall be paid whether or not such Action is prosecuted to a Decision. Any Decision entered in such Action shall contain a specific provision providing for the recovery of attorneys' fees and costs incurred in enforcing such Decision. A court or arbitrator shall fix the amount ofreasonable attorneys' fees and costs upon the request of either party. Any judgment or order entered in any final judgment shall contain a specific provision providing for the recovery of all costs and expenses of suit, including reasonable attorneys' fees and expert fees and costs (collectively "Costs") incurred in enforcing, perfecting and executing such judgment. For the purposes of this paragraph, Costs shall include, without limitation, in addition to Costs incurred in prosecution or defense of the underlying action, reasonable attorneys' fees, costs, expenses and expert fees and costs incurred in the following: (a) post judgment motions and collection actions; (b) contempt proceedings; (c) garnishment, levy, debtor and third party examinations; (d) discovery; (e) bankruptcy litigation; and (f) appeals ofany order or judgment. "Prevailing party" within the meaning ofthis section includes, without limitation, a party who agrees to dismiss an Action in consideration for the other party's payment of the amounts allegedly due or performance of the covenants allegedly breached, or obtains substantially the relief sought by such party. 23. ENTIRE AGREEMENT. This Covenant, together with all attachments hereto, constitutes the entire understanding and agreement of the parties. This Covenant 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 the Homeowner concerning all or any part of the subject matter ofthis Covenant. 202435.3 -13- 24. SEVERABILITY. Any provision of this Covenant that is deemed to be illegal, invalid or unenforceable by an arbitrator or court of competent jurisdiction shall be ineffective to the extent of the invalidity or unenforceability of such provision and shall be deemed stricken from this Covenant. Any stricken provision shall not affect the legality, enforceability or validity of the remainder of this Covenant. If any provision or part thereof of this Covenant is stricken in accordance with the provisions of this Section, then the stricken provision shall be replaced, to the extent possible, with a legal, enforceable and valid provision that is as similar in tenor and intent to the stricken provision as is legally possible. Any such invalidity or unenforceability of any provision in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. 25. COUNTERPARTS. This Covenant may be executed in two or more separate counterparts, each of which, when so executed, shall be deemed to be an original. Such counterparts shall, together, constitute and shall be one and the same instrument. This Covenant shall not be effective until the execution and delivery by the parties of at least one set of counterparts. The parties hereunder authorize each other to detach and combine original signature pages and consolidate them into a single identical original. Anyone of such completely executed counterparts shall be sufficient proof of this Covenant. IN WITNESS WHEREOF, the parties have executed this Covenant as of the date set forth above. BUYER: By: Printed Name: By: Printed Name: CITY: CITY OF TUSTIN, a municipal corporation By: 202435.3 -14- EXHIBIT "A" LEGAL DESCRIPTION OF UNIT [To Be Inserted) 202435,3 EXHIBIT A EXHIBIT "B" LEGAL DESCRIPTION OF CITY'S PROPERTY THE BENEFITED PROPERTY COLUMBUS SQUARE Reuse Plan Disposal Parcels I-H-I7, I-H-S, I-H-4, and I-H-3. 202435.3 EXHIBIT B EXHIBIT "c" NOTICE OF INTENT TO TRANSFER NOTICE OF INTENT TO TRANSFER MUST BE DELIVERED TO THE CITY OF TUSTIN PRIOR TO PROCEEDING WITH ANY TRANSFER OF THE PROPERTY. From: ("Homeowner") To: City ofTustin 300 Centennial Way Tustin, California 92780 Attn: Assistant City Manager Re: (street address) Tustin, California (the "Unit") Circle appropriate words: Homeowner desires to [sell, convey, transfer by inheritance or devise, lease, gift, otherwise transfer] the Unit. Proposed Transferee: Ages of Proposed Transferee: Income of Proposed Transferee: Household Size of Proposed Transferee: Proposed Transfer Price: If the City has a program to help locate a Very Low Income purchaser, does the Homeowner want the City to help look for a Very Low Income purchaser to buy the Unit? Yes: No: Date: Signature of Homeowner ( daytime telephone number of Homeowner 202435.3 EXHIBIT C EXHIBIT "0" RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: City ofTustin 300 Centennial Way Tuslin, California 92780 Attention: Assislanl City Manager SPACE ABOVE THIS LINE FOR RECORDER'S USE ONLY ",mpt r<om "",ding roo, p"!>,,,", to Govommont Codo, 27383, Request for Notice Under Civil Code Section 2924b In accordance with Section 2924b, Civil Code, request is hereby made that a copy of any Notice of Default and a copy of any Notice of Sale under the Deed of Trust recorded as Instrument No. _on ,200_, in Book -, Page -' Official Records of Orange County, California, and describing land therein as See Exhibit A altached hereto executed by , as Trustor, in which is named as Beneficiary, and , as Truslee, be mailed to CITY OF TUSTIN, at 300 Cenlennial Way, Tustin, California 92780, Attention: Assistant City Manager. NOTICE: A COpy OF ANY NOTICE OF DEFAULT AND OF ANY NOTICE OF SALE WILL BE SENT ONLY TO THE ADDRESS CONTAINED THIS RECORDED REQUEST. IF YOUR ADDRESS CHANGES, A NEW REQUEST MUST BE RECORDED. CITY OF TUSTIN By: 202435.3 EXHIBIT D EXHIBIT A TO EXHIBIT D LEGAL DESCRIPTION (Same as Exhibit A to the Covenant) 202435.3 EXHIBIT A TO EXHIBIT D STATE OF CALIFORNIA ) COUNTY OF ) ) ss. ) On ,before me, (Print Name of Notary Public) . Notary Public, 0 personally appeared -or- proved to me on the basis of satisfaclory evidence to be the person(s) whose name(s) is/are subscribed 10 the within instrument and acknowledged to me thaI he/she/they execuled Ihe 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 Ihe instrument. 0 WITNESS my hand and official seal. Signature of Notary Signer(s) Other Than Named Above 202435.3 EXHIBIT "E" REIMBURSEMENT AGREEMENT THIS REIMBURSEMENT AGREEMENT, dated as of ,2°- (the "Reimbursement Agreement"), is hereby entered into by and between Ihe CITY OF TUSTIN, a municipal corporation (the "Cily"), and (Ihe "Homeowner"). RECITALS A. The Homeowner is purchasing a condominium located at , Tustin, California (the "Unit"). B. The City and the Homeowner have executed an Affordable Housing Covenant (the "Covenant") which requires that for a forty-five year period the Unit be sold only to Very Low Income Households at an affordable housing cost, which may resull in purchase prices which are substantially less Ihan the current fair market value of the Unit. C. The Homeowner is oblaining a purchase money loan (the "Loan") from a private lender (Ihe "Lender") for a portion of Ihe costs of acquisition of the Unit. A description of the Loan is set forth in Exhibil "I" hereto, which is incorporated herein. D. The Homeowner may Transfer his, her or Iheir interesls in the Unit to a Permitted Transferee who may in turn obtain a purchase money loan from an institulionallender for a portion of the costs of acquisilion of the Unit. This subsequent lender and loan are also hereinafter referred to as the "Lender" and the "Loan". E. Pursuant to the Covenant, the City has the right to acquire the Unit in the event, among other things, that it becomes subjecI 10 a foreclosure proceeding, and the City has the right to make payments to cure a Default or delinquency on Ihe Loan. F. The right 10 make payments 10 cure a Default or delinquency on the Loan will be of benefit 10 the City by allowing Ihe City to prevent the foreclosure of the Unil, which will prevent Ihe possible early termination of the Covenant. G. The City's right to make payments to cure a Default or delinquency on the Loan will also be of benefil 10 the Homeowner, by allowing the Homeowner 10 retain ownership of the Unit and to avoid foreclosure. H. The City desires to obtain the authority to make paymenls to cure a Default or delinquency on the Loan, on the condition that the Homeowner agrees to reimburse the City for any payments made to cure a Default or delinquency on Ihe Loan. In order to induce Ihe City to obtain the authority 10 make payments to cure a Default or delinquency on the Loan, Ihe Homeowner is willing to agree to reimburse the City for any paymenls made to cure a Loan Default or delinquency. The Homeowner underslands and acknowledges that the City would not make payments to cure a Loan Default or delinquency but for the Homeowner's agreement to make such reimbursements to the City, as provided herein. NOW, THEREFORE, in consideralion of the mutual covenanls herein contained, it is agreed by and between the parties hereto as follows: I. Cure of Loan Default. The City hereby has the righI, bul not the obligation, to make payments to the Lender to fully or partially cure any Default or delinquency in payments of the Loan. 202435.3 EXHIBIT E 2. Reimbursement Obligation of Homeowner. The Homeowner hereby agrees to reimburse the City for any and all payments made by the City to fully or partially cure any Default or delinquency in payments of the Loan. Such payments shall be made within Ihirty (30) days after written demand is made therefore from Ihe City 10 the Homeowner. The City may make such writlen demand 10 the Homeowner at any time "fter making such paymenls. If such written demand is made by personal delivery of such demand given to the Homeowner, or left at the Unit, such demand shall be deemed given immedialely upon such delivery. If such written demand is made by reliable overnight delivery service (such as FedEx), such demand shall be deemed given one business day after deposit of the written demand with the ovemight delivery service. If such written demand is made by registered or certified U.S. Mail, such demand shall be deemed given three business days after deposit of the written demand with the U.S. Postal Service. 3. Security for Reimbursement. The obligation oflhe Homeowner to make the reimbursement paymenls to the City required under Section 2 shall be secured by the Affordable Housing Deed of Trust which shall encumber Ihe Homeowner's fee title to the Unit. Such deed of trust shall be executed by the Homeowner and shall be recorded in the official records of Orange County, California, at the time Homeowner acquires title 10 the Unit. The Homeowner consents to recordation of such deed of trust in the official records of Orange County, California. The Affordable Housing Deed of Trust shall secure all amounts due from the Homeowner and/or his, her or their successors and assigns as provided in this Reimbursement Agreement. 4. Notice of Default and Delinquency. The Homeowner agrees to deliver to the City a copy of any notice of Default or delinquency in repayment of the Loan which Homeowner receives from or on behalf of the Lender. Such notices shall be delivered 10 the City within five (5) days of Homeowner's receipt of such notice from the Lender. 5. Waivers (a) The Homeowner expressly agrees that any payment due hereunder may be extended from time to time at the City's sole and absolute discretion and that Ihe City may accept security in consideralion for any such exlension or release any security for this Reimbursement Agreement at its sole discretion all withoul in any way affecting the liability of the Homeowner. (b) No exlension of time for paymenl of the amounls due pursuant to Ihis Reimbursement Agreement made by agreement by the City with any person now or hereafter liable for the payment of this Reimbursement Agreement shall operate to release, discharge, modify, change or affecl the original liability of the Homeowner under this Reimbursemenl Agreement, either in whole or in part. (c) The obligations of the Homeowner under this Reimbursement Agreement shall be absolute and the Homeowner waives any and all righls 10 offset, deduct or withhold any paymenls or charges due under this Reimbursement Agreement for any reasons whalsoever. (d) The Homeowner waives presentment, demand, notice of protest and nonpayment, notice of Defaull or delinquency, notice of acceleration, notice of costs, expenses or leases or interest Ihereon, notice of dishonor, diligence in collection or in proceeding against any of the rights of in teres Is in or 10 properties securing of this Reimbursement Agreemenl, and the benefit of any exemption under any homestead exemplion laws, if applicable. (e) No previous waiver and no failure or delay by the City in acting with respect 10 the terms of this Reimbursement Agreemenl shall constitute a waiver of any breach, Default, or failure or condilion under this Reimbursement Agreement. A waiver of any term of this Reimbursement Agreemenl must be made in writing and shall be limited to the express written terms of such waiver. 6. Attorneys' Fees and Costs. The Homeowner agrees that if any amounts due under this Reimbursement Agreement are not paid when due, the Homeowner shall pay, in addition, all costs and expenses of colleclion and reasonable attorneys' fees paid or incurred in connection with the colleclion or enforcement oflhis 202435.3 EXHIBIT E Reimbursement Agreement, whether or not suit is filed. The Homeowner further agrees that the provisions of Section 23 of the Covenant regarding artorneys' fees and costs shall be equally applicable to this Reimbursement Agreement. 7. Miscellaneous. a. Term of Agreement. This Reimbursement Agreement shall take effect upon Ihe date set forth in the first paragraph hereof and shall terminate concurrently with the termination of the Covenant. b. Successor is Deemed Included in All References to Predecessor. Whenever in this Reimbursement Agreemenl either the Homeowner or the City is named or referred 10, such reference shall be deemed 10 include Ihe successors or assigns thereof, and all Ihe covenants and agreemenls in this Reimbursement Agreement conlained by or on behalf of the Homeowner or the City shall bind and inure to the benefit of the respective successors and assigns Ihereof whether so expressed or not. c. Amendment. No modification, rescission, waiver, release or amendment of any provision of this Covenanl shall be made except by a written agreemenl executed by Homeowner and Ihe City. d. Notices. All notices, certificates or olher communicalions hereunder shall be sufficiently given and shall be deemed to have been received in the manner and to the addresses sel forth in Section 22 of the Covenant. e. Further Assurances and Corrective Instrumenls. Homeowner shall execule any further documents consistent with the terms of this Covenant, including documents in recordable form, as the City shall from time to time find necessary or appropriate to effectuate its purposes in entering into this Covenant. f. Execution in Counlerparts. This Reimbursement Agreement may be executed in two or more separate counlerparts, each of which, when so executed, shall be deemed to be an original. Such counterparts shall, together, constitute and shall be one and the same instrument. This Agreement shall not be effective until the execution and delivery by the parties of at least one set of counterparts. The parties hereunder authorize each other to detach and combine original signature pages and consolidate them inlo a single idenlical original. Anyone of such completely executed counterparts shall be sufficient proof of this Agreement. g. Applicable Law. This Reimbursement Agreement shall be governed by and conslrued in accordance with the laws of the State of California. h. Captions. The captions or headings in this Reimbursement Agreement are for convenience only and in no way define, limit or describe the scope or intent of any provisions of this Reimbursement Agreement. i. Definition of Terms. Tenns not otherwise defined in this Reimbursement Agreement are defined in the Covenant. IN WITNESS WHEREOF, the Homeowner and the City have caused Ihis Reimbursement Agreement to be executed by their duly authorized respective officers, all as of the date first above written. CITY OF TUSTIN: By: Name: Title: 202435.3 EXHIBIT E 202435,3 EXHIBIT E HOMEOWNER: By: Printed Name: By: Printed Name: EXHIBIT "I" TO EXHIBIT E Name of Homeowner: Address of Unit: Name of Lender: Amount of Loan: 202435.3 EXHIBIT [ TO EXHIBIT E EXHIBIT "F" RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: City of Tustin City 300 Cenlennial Way Tustin, California 92780 Attention: Assistant City Manager This document is exempt from the payment of a recording fee pursuant to Government Code Section 27383. OPTION AGREEMENT .THlS OPTION AGREEMENT is entered into as of between the CITY OF TUSTIN, a municipal corporation (the "City"), and ,20O_, by and (the "Homeowner"). RECITALS A. Homeowner has purchased a condominium located at Tustin, California, as such real property is more particularly described in Exhibit "A" attached hereto and incorporated herein (the "Unit"). B. In order to assist Homeowner in the purchase oflhe Unit, the City agreed 10 accepl as part paymenl of amounts owed by Ihe Developer to the City a promissory note executed by Homeowner (the "Affordable Housing Note") in connection with Homeowner's purchase of the Unit. C. Homeowner and the City have enlered into an Affordable Housing Covenant daled concurrently herewith (the "Covenant"). Under Ihe terms oflhe Covenant, the parties have agreed that for a forty-five year period the Unit shall be sold only to Very Low Income Households at an Affordable Housing Cost and that the Unit may be sold or otherwise transferred only as provided in Section 4 of the Covenant. D. Pursuanl to Section 7 of the Covenanl, Ihe Homeowner has agreed 10 grant 10 the City an option to purchase the Unit in the event Homeowner is in Default of any of his or her obligations set forth in the Covenant. E. Homeowner desires 10 granl to City an option to purchase the Unil on the terms and conditions set forth hereinbelow. For purposes oflhis Option Agreement, "Unit" shall also be deemed to include any and all improvements located on the real property. NOW, THEREFORE, in consideration of the foregoing, and the mutual covenants and conditions contained herein, the parties herelo agree as follows: 1. Grant of Option. (a) Homeowner grants to City an option (Ihe "Option") to purchase Ihe Unil on the terms and conditions sel forth in Ihis Option Agreement. The Option may be exercised only (i) upon the occurrence of an event of Default under the Covenant, or (ii) the due dale oflhe Affordable Housing Note is accelerated because of a transfer by the Owner of title 10 the Unit. (b) The purchase price payable by the City to Ihe Homeowner for the Unit shall be the Affordable Housing Cosl of the Unil for Very Low Income Households (as defined in the Covenanl), as of the dale of the close 202435.3 EXHIBIT F of escrow for the City's acquisition of the Unit (the "Option Price"). Homeowner agrees that this Option may be specifically enforced. (c) For purposes oflhis Option Agreement, Ihe Affordable Housing Cosl oflhe Unit shall be reasonably determined the City by assuming (a) a 30 year, fully amortized, level payment mortgage loan for 97% of the price of the Unit, at currently prevailing mortgage rates, (b) the prevailing cosl of mortgage insurance payments for the loan described in subparagraph (a), but only if mortgage insurance would customarily be charged for such loan, (c) property taxes and assessments based on the reassessment of the Unit as of the closing date of the City's acquisition of the Unit, assuming the Unil is nol exempt from such taxes and assessmenls, (d) current homeowner's association fees, (e) Ihe prevailing cost for fire and casualty insurance, however, if the homeowner's association carries fire and casualty insurance wilh respect to the exlerior of the Unit, Ihen no addilional cosl shall be assigned to fire and casualty insurance, and (I) use of the ulilities allowance established by the Orange County Housing Authority for the size of the Unit, or if no such allowance exists at that time, then a reasonable utilities allowance as determined by the City. (d) The Oplion crealed hereby shall be irrevocable by Homeowner and shall be binding upon the successors and assigns of Homeowner. The City shall have the right of specific performance to enforce the terms of this Option Agreement. 2. Term and Consideration for Option. The term of the Option ("Option Term") shall commence on the date of this Option Agreemenl, and shall expire upon Ihe expiration or terminalion of the Covenant. 3. Exercise of Option. The Option may be exercised by City's delivery to Owner ofwrinen notice of such exercise (the "Exercise Notice"). In the event that the City exercises the Option, but, prior to Ihe sale of the Unit 10 the City, the Owner cures the event thaI gave rise to the right of the City to exercise the Option, Ihe City's exercise of the Option shall be deemed revoked. The revocation of the exercise of the Option shall nol terminale this Option Agreement or preclude the City from subsequently exercising the Option upon a later occurrence of an event giving rise to the righl of the City to exercise the Option. 4. Escrow and Completion of Sale. Within five (5) days after City has exercised the Option, or as soon thereafter as reasonably practicable, an escrow shall be opened with an escrow company mutually acceptable to City and Homeowner for Ihe conveyance of the Unil to the City. The Option Price shall be paid by the City in part by cancellation of the Affordable Housing Note. The City shall deposit in escrow nol later Ihan one (I) business day prior to the anticipated close of escrow dale the Affordable Housing Note, to be cancelled by the escrow holder upon the consummation of the sale, and cash in an amount equal to the difference between the Option Price and the amount then due on Ihe Affordable Housing Nole. The City's obligation to close escrow shall be subject to the City's approval of a then-current preliminary title report and, al City's option, environmenlal and other site testing. Any exceptions shown on such preliminary title report created on or afterlhe Homeowner's acquisition of the Unit shall be removed by Homeowner at its sole expense prior to the close of escrow pursuant to this Section 4 unless such exceplion(s) is (are) accepted by City in its reasonable discretion; provided, however, that City shall accept the following exceptions 10 title: (i) currenl taxes not yet delinquent, (ii) matters affecting title existing on the date of Homeowner's acquisition of the Unit, (iii) liens and encumbrances in favor of the City of Tustin, and (iv) matters shown as printed exceptions in the standard form CL TA owner's policy of title insurance. The parties shall each be responsible for one-half of Ihe escrow fees, documenlary transfer taxes, recording fees and any other costs and expenses of the escrow, and the Homeowner shall be responsible for the cost of a CL T A owner's policy oflitle insurance. City shall have thirty (30) days after exercise of the Option 10 enter upon the Unit to conducl any tests, inspections, invesligations, or studies of the condition of the Unit. Homeowner shall permit the City access to the Unil for such purposes. The City shall indemnity, defend, and hold harmless Homeowner and its officers, direclors, shareholders, partners, employees, agents, and representalives from and against all claims, liabilities, or damages, and including expert witness fees and reasonable attorney's fees and costs, caused by City's activities with respect to or arising out of such tesling, inspection, or investigalory aclivity on the Unit. Escrow shall close promplly after acceptance by City of the condition oftitle and the physical and environmental condition of the Unit. Until the Closing, Ihe terms of the Covenant and the documents executed and recorded pursuant thereto shall remain in full force and effect. 202435,3 EXHIBIT F 5. Failure to Exercise Option. Ifthe Oplion is not exercised in the manner provided in Section 3 above before the expiration of the Option Term, the Option shall terminate. Upon receipt of the written request of Homeowner, City shall cause a quilc1aim deed terminating or releasing any and all rights City may have to acquire the Unil (the "Quitclaim Deed") 10 be recorded in Ihe Official Records of Orange County, California. 6. Assignment and Nomination. The City may, at its option, assign its rights hereunder without obtaining Ihe consent of the Homeowner, and the City may nominate another person or entity to acquire the Unit, and Ihe idenlity of such nominee shall nol be subjecI to Ihe approval oflhe Homeowner. In no evenl shall Homeowner, withoul the prior express written consent of the City, which consent shall be given by the City only in the evenl that the City determines the Transfer fully complies with Section 4 of the Covenant, assign or transfer its obligations of this Option to any person olher than a Permitted Transferee as provided in the Covenant. 7. Title. Following the date hereof, except as permitted by the Covenanl, Homeowner agrees not 10 cause, and shall use commercially reasonable efforts not to permit, any lien, easement, encumbrance or other exception to title 10 be recorded against the Unit without City's prior writlen approval, such approval nol to be unreasonably withheld. 8. Represenlations and Warranties of Homeowner. Homeowner hereby represents, warrants and covenanls to City as follows, which representalions and warranties shall survive the exercise of the Option and the Close of Escrow: (a) that this Option Agreement and the other documents to be executed by Homeowner hereunder, upon execution and delivery thereof by Homeowner, will have been duly entered into by Homeowner, and will constitute legal, valid and binding obligations of Homeowner; (b) neither this Option Agreement, nor anything provided to be done under this Option Agreement, violates or shall violate any contract, document, understanding, agreement or instrument to which Homeowner is a party or by which it is bound; and (c) Homeowner shall pay, prior to delinquency, any and all real property taxes and assessments which affect the Unit. Homeowner agrees to indemnify, prolect, defend, and hold City and the Unit harmless from and against any damage, claim, liability, or expense of any kind whatsoever (including, without limilation, reasonable attorneys' fees and fees of expert witnesses) arising from or in conneclion with any breach of the foregoing representations, warranties and covenants. Such representations and warranties of Homeowner shall be true and correct on and as of the dale of Ihis Option Agreement and on and as of the date of the Close of Escrow. 9. Representations and Warranties of City. City hereby represents and warrants and covenants to Homeowner, as follows, which representations and warranties shall survive the Close of Escrow: (a) Ihat Ihis Option Agreement and the other documents to be executed by City hereunder, upon execulion and delivery thereof by City, will have been duly enlered into by City, and will constitute legal, valid and binding obligations of City, and (b) neilher Ihis Oplion Agreement, nor anything provided to be done under this Oplion Agreement, violales or shall violate any contracl, document, understanding, agreement or instrumenl to which City is a party or by which it is bound. City agrees 10 indemnify, prolect, defend, and hold Homeowner and Ihe Unit harmless from and against any damage, claim, liability, or expense of any kind whatsoever (including, withoul limitalion, reasonable attorneys' fees and fees of expert witnesses) arising from or in connection with any breach of the foregoing representations, warranties and covenants. Such representations and warranties of City, and any other representations and warranlies 202435.3 EXHIBIT F of City contained elsewhere in this Option Agreement shall be true and correct on and as of the date of this Option Agreement and on and as of the date of the Close of Escrow. 10. General Provisions. 10.1 Paragraph Headings. The paragraph headings used in this Option Agreement are for purposes of convenience only. They shall not be construed to limit or extend the meaning of any part oflhis Option Agreement. 10.2 Notices. All notices, demands, consents, requests and other communications required or permitted 10 be given under this Agreement shall be in wriling and shall be deemed conclusively 10 have been duly given (a) when hand delivered to Ihe other party; (b) three (3) business days after such nolice has been sent by United States mail via certified mail, return receipt requested, postage prepaid, and addressed to the other party as sel forth below; or (c) the nexl business day after such notice has been deposited with a national overnighl delivery service reasonably approved by the parties (Federal Express and Airborne Express are deemed approved by Ihe parties), postage prepaid, addressed to the party to whom notice is being sent as set forth below with next-business- day delivery guaranleed. provided that the sending party receives a confirmation of delivery from the delivery service provider. Unless otherwise provided in writing, all notices hereunder shall be addressed as follows: To Homeowner: ToCily: City of Tustin Tustin City Hall 300 Centennial Way Tuslin, California 92780 Attenlion: City Manager and Attention: Assistant City Manager with a copy 10: City Attorney City of Tustin Woodruff Spradlin & Smart 701 S. Parker Street, Suite 8000 Orange, California 92868-4760 Attention: Lois E. Jeffrey, Esq. 10.3 Binding Effect. Subjecl to Ihe provisions of Section 6. Ihe terms, covenants and conditions of Ihis Option Agreement shall be binding upon and inure to the benefit of the parties hereto and their respeclive successors, assigns and transferees. 10.4 Enlire Agreement. This Oplion Agreement sels forth Ihe entire agreement between Ihe parties hereto respecting Ihe Oplion, and supersedes all prior negotiations and agreements, written or oral, concerning or relating to the subject matter of this Option Agreement. 202435,3 EXHIBIT F 10.5 California Law. This Option Agreement shall be governed by the laws of the State of California and any question arisiug hereuuder shall be construed or determined according to such laws. 10.6 Time of Ihe Essence. Time is of Ihe essence of each and every provision of Ihis Oplion Agreement. 10.7 Counterparts. This Oplion Agreement may be signed by the parties hereto in duplicate counlerparts which togelher shall constitute one and the same agreement between the parties and shall become effective at such time as both of the parties shall have signed such counterparts. 10.8 Attorneys' Fees. If any party to this Agreement institutes any action, suit, counterclaim, appeal, arbitration or medialion for any relief against anolher party, declaratory or otherwise (collectively an "Action"), to enforce the terms hereof or to declare rights hereunder or with respect to any inaccuracies or material omissions in connection with any of the covenanls, representations or warranties on the part of the other party to this Agreement, then the prevailing party in such Action, whether by arbitration or final judgment, shall be entitled 10 have and recover of and from the other party all costs and expenses of the Action, including reasonable attorneys' fees and costs (at the prevailing party's attorneys' then-prevailing rates as increased from time to time by the giving of advanced written notice by such counsel 10 such party) incurred in bringing and proseculing such Action and/or enforcing any judgment, order, ruling or award (collectively, a "Decision") granted Iherein, all of which shall be deemed to have accrued on the commencement of such Action and shall be paid whether or nol such Action is proseculed to a Decision. Any Decision entered in such Action shall conlain a specific provision providing for the recovery of attorneys' fees and costs incurred in enforcing such Decision. A court or arbitrator shall fix the amount of reasonable attorneys' fees and costs upon the request of either party. Any judgment or order entered in any final judgment shall contain a specific provision providing for the recovery of all costs and expenses of suit, including reasonable attorneys' fees and expert fees and costs (collectively "Cosls") incurred in enforcing, perfecting and executing such judgment. For Ihe purposes of this paragraph, Cosls shall include, without limitation, in addition to Costs incurred in prosecution or defense of the underlying action, reasonable attorneys' fees, costs, expenses and expert fees and cosls incurred in the following: (a) post judgment motions and collection actions; (b) contempt proceedings; (c) garnishment, levy, debtor and third party examinations; (d) discovery; (e) bankruptcy litigation; and (f) appeals of any order or judgment. "Prevailing party" within the meaning of this section includes, withoul limilation, a party who agrees 10 dismiss an Aclion in consideration for the olher party's payment oflhe amounts allegedly due or performance of the covenants allegedly breached, or obtains substantially the relief sought by such party. 10.9 Computation of Time. All periods oftime referred to in this Option Agreement shall include all Saturdays, Sundays and stale or national holidays, unless the period of time is specified as business days (which shall not include Saturdays, Sundays and state or national holidays), provided that if the date or last dale to perform any act or give any notice with respect to this Option Agreement shall fall on a Saturday, Sunday or slate or national holiday, such act or notice may be limely performed or given on the next succeeding day which is not a Saturday, Sunday or state or national holiday. Time is of the essence with respecl to all provisions of this Agreement in which a definite time for performance is specified; provided, however, that the foregoing shall not be construed to limit or deprive a party of the benefits of any grace or use period provided for in this Agreement. 10.10 Definition of Terms. Terms not otherwise defined in this Oplion Agreement are defined in the Covenant. 10.11 Further Assurances. Each of the parties herelo shall execule and deliver at their own cost and expense, any and all additional papers, documents, or instruments, and shall do any and all acts and things reasonably necessary or appropriale in conneclion with the performance of Iheir respeclive obligalions hereunder in order to carry out the intent and purposes of this Agreement. 202435.3 EXHIBIT F IN WITNESS WHEREOF, this Option Agreement is executed by the parties hereto as oflhe date first above written. BUYER: By: Printed Name: By: Printed Name: CITY: CITY OF TUSTIN, a municipal corporation By: 202435.3 EXHIBIT F EXHIBIT "A" TO EXHIBIT F LEGAL DESCRIPTION [Same as Exhibit A to the Covenanl] 202435.3 Signer(s) Other Than Named Ahove Signer(s) Other Than Named Ahove In", 13. 2005 202435,3 ATTACHMENT NO.6 AFFORDABLE HOUSING COVENANT (LOWER INCOME) Ju",13.2005 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: City of Tuslin 300 Centennial Way Tustin, California 92780 Attention: Assistant City Manager Exempl From Recording Fee Pursuant to Govemmenl Code section 27383 AFFORDABLE HOUSING COVENANT (Lower Income) THIS AFFORDABLE HOUSING COVENANT (Ihis "Covenant") is made as of ,20o_, by (the "Homeowner") in favor of the CITY OF TUSTIN, a municipal corporation (the "City"). RECITALS A. Homeowner has purchased a condominium located at -' Tustin, California, as such real property is more particularly described in Exhibit "A" attached hereto and incorporated herein (the "Unit"). The Unil is part of that certain housing development known as "COLUMBUS SQUARE" (Ihe "Projecl"). B. Pursuant to the Housing Agreement between the City and Moffetl Meadows Partners, LLC, a Delaware limited liability company (Ihe "Developer"), the Developer is required to sell certain oflhe homes in the Project to "Lower Income Households", at an "Affordable Housing Cost for Lower Income Households". C. The Unit has been designated by the Developer as a Unit that is to be sold to a Lower Income Household. D. Homeowner has represented to the Developer and the City that Homeowner and Homeowner's household intend to reside in the Unit as the Homeowner's principal residence at all times during the Homeowner's ownership of the Unit, that they will not renl the Unit 10 others, and that they are a Lower Income Household. E. In order to enable City to meet is continuing affordable housing obligalions under State law, and because the City has facilitated the provision of Affordable Housing Units through its adoption of the Specific Plan and housing incentives in Ihe Density Bonus Ordinance, the City has agreed to accept a promissory note executed by Homeowner (Ihe "Affordable Housing Note") in conneclion with Homeowner's purchase of the Unit. The Affordable Housing Note is, or shall be, secured by the Affordable Housing Deed of Trust. F. The City owns that certain parcel ofland adjacent to the Project that is more particularly described on Exhibit "B" attached hereto. G. This Covenanl is intended to benefit the parcel ofland described on Exhibit "B", and the obligations and rights contained herein are inlended 10 run with the land and to be subordinate to a "Firsl Lien" (as defined below). NOW, THEREFORE, for good and valuable consideration, the parties agree as follows: 1. DEFINITIONS. "Affordability Period" means that period of lime commencing upon the Date of this Covenant and lerminating on the forty-fifth (45Ih) anniversary of such date. "Affordable Housing Cost" for an Affordable Housing Unit designaled to be sold to, and occupied by, a Lower Income Household shall mean a price thaI does not exceed the Affordable Housing Cost for a Household size appropriate for the Unit for Lower Income Households. Affordable Housing Cost for an Affordable Housing Unit shall be caleulaled as of the date of sale or resale of the Unit. Household size appropriate forthe Unit means two persons for a one bedroom house, three persons for a two bedroom house, four persons for a three bedroom house, five persons for a four bedroom house, elc. 202435.3 "Affordable Housing Cost Cor Lower Income Households" means a cost per Unit for Lower Income Households as more particularly defined in Health and Safety Code Section 50052.5(b)(3) and as generaIly described herein as a price per Unit calculated as foIlows: For Lower Income Households whose income exceeds the maximum income for Very Low Income Households and does not exceed seventy percent (70%) of the annual Orange County Median Income, adjusled for family size appropriate for the Unil, "Affordable Housing Cosl for Lower Income Households" shaIl be a Monthly Housing Cost not in excess of one-twelfth of the product of thirty percenl (30%) times seventy percent (70%) of the annual Orange County Median Income, adjusted for family size appropriate for the Unit. For Lower Income Households whose gross income exceeds seventy percenl (70%) of the annual Orange County Median Income adjusled per family size, in accordance with Health and Safety Code Seclion 50052.5(b)(3), Ihe City has determined and hereby agrees that the "Affordable Housing Cost for Lower Income Households" shaIl be a Monthly Housing Cosl not in excess of thirty percent (30%) times eighty percent (80%) of the annual Orange County Median Income, adjusled for family size appropriate for the Unit. "Affordable Housing Note" means thaI promissory note executed by Homeowner as part of Homeowner's purchase of the Unit from the Developer. The principal amount of the Affordable Housing Note is an amount not in excess of the difference between the appraised fair market value of the Unil if it was a Market Rate Unit, and the sales price required to seIl the Unit at the Affordable Housing Cost for Lower Income Households. "Affordable Housing Option Agreemenl" means the agreement attached hereto as Exhibit "F" that provides an option to purchase in favor of the City as provided in Section 7, which option shaH be exercisable in the event that the Owner of a Unit is in breach of the owner's obligations in this Covenanl or in Ihe event the due date of the Affordable Housing Note is accelerated as the resull of a Transfer by the Owner. "ACCordable Housing Deed oC Trust" means that certain deed of lrust executed by Homeowner which encumbers the Unit and secures the obligalions of Homeowner and his or her successors and assigns as provided in (a) this Covenant, (b) the Reimbursement Agreement attached hereto as Exhibit "E", and (c) the Affordable Housing Note. "Cily" means the City of Tustin, and the City's successors and assigns. "County" means Ihe County of Orange, California. "Covenanl" means this Affordable Housing Covenant. "Date of Ihis Covenant" means the date in the first paragraph of this Covenant. "Default" means the failure of a party to perform any aclion or covenant required by this Covenant within the time periods provided herein foHowing notice and opportunity to cure. A deed in lieu of foreclosure of the Affordable Housing Deed of Trust shaH not constitute a Default under this Covenant. "Developer" means Moffett Meadows Partners, LLC, a Delaware limiled liability company, described in Recital B, or its City-approved assignee as described in Section 6 of the Housing Agreement. "First Lien" means the lien of a purchase money Lender which secures the obligations of the Owner to repay amounls owed to the Lender. "Homeowner" means the person or persons set forth in the first paragraph of this Covenant, and his, her or their successors and assigns. "Legal Description" means the legal description of the Unit which is attached hereto as Exhibit "A" and incorporated herein. "Lower Income Household" means a Household occupied by persons and families whose gross income does not exceed the qualifYing limits for lower income families set forth in Health and Safety Code Section 50079.5. "Lender" means an institution making a purchase money loan 10 the Owner forlhe purchase of the Unit. "Monthly Housing Cost" means, for a Lower Income Household purchasing the Unit, all of the foIlowing associated with the Unit, estimated or known as of the date of the proposed sale of the Unit: (i) principal and inleresl payments on a fixed inlerest rate mortgage loan, and any loan insurance fees associated therewith: (ii) property laxes and assessments; (iii) fire and casualty insurance covering replacement value of property improvemenls; (iv) any homeowner association fees; and (v) a reasonable ulility aIlowance. Monthly housing cost of a purchaser shaIl be an average of eslimated costs for the next twelve (12) month period. 202435.3 "Notice of Intent to Transfer" mcans the Notice of Intent to Transfer attached hereto as Exhibit "C" and incorporated herein by reference. "Owner" means Homeowner and any subsequent Transferee of the Unit. "Permilled Transfer" means any Transfer which is permitted pursuant 10 Section 4 hereof. "Permilled Transferee" means a Transferee from the Homeowner or from any Permitted Transferee who acquires ownership of the Unit as set forth in Section 4 hereof. "Prohibited Transfer" means any Transfer which is not permitled pursuant to Section 4 hereof. "Project" means Ihat certain housing development in which Ihe Unil is located. "Reimbursement Agreement" means the Reimbursement Agreement 10 be executed by the Homeowner in favor of the City, in the form attached hereto as Exhibit "E" and incorporated herein. "Request for Notice" means the Request for Notice of Default attached herelo as Exhibit "D" and incorporated herein. "Transfer" shall mean any sale, assignment, conveyance, lease or transfer, voluntary or involuntary, of any interest in the Unit. Without limiting Ihe generality of the foregoing, Transfer shall include (i) a transfer by devise, inherilance or intestacy; (ii) Ihe creation of a life estale; (iii) the creation of a joint tenancy interest; (iv) a gift of all or any portion of the Unit; or (v) any voluntary conveyance of the Unit. "Transferee" shall mean any natural person or entity who obtains ownership rights in the Unit pursuant to a Transfer. "Unit" means that certain real property located at the street address set forth in Recital A and legally described in the Legal Description. 2. COVENANT RE: SALES OF UNIT. Homeowner covenants and agrees that, during the Affordability Period, each subsequent resale of the Unit by the then-Owner thereof shall be to a Lower Income Household, at an Affordable Housing Cost for Lower Income Households. Homeowner further covenants and agrees that, during the Affordability Period, each Owner shall abide by and be bound by all the obligations of Homeowner set forth in this Covenant. Homeowner agrees that the obligations of Homeowner set forth in this Covenanl shall be served b the Affordable Housing Deed of Trust recorded concurrently with the recordation of the Covenant. HOMEOWNER AND EACH SUCCESSOR, HEIR OR ASSIGN OF HOMEOWNER UNDERSTAND THAT THE DETERMINATION OF THE AFFORDABLE HOUSING COST CAN BE MADE ONL Y AT THE TIME OF A PROPOSED SALE OR OTHER TRANSFER, TAKING INTO CONSIDERATION PREVAILING INTEREST RATES, THE OFFERED TERMS OF SALE, THE ECONOMIC CIRCUMSTANCES OF THE PROPOSED PURCHASER AND OTHER FACTORS THAT CANNOT BE ACCURATELY PREDICTED, AND THAT THE TRANSFER PRICE PERMITTED HEREUNDER MAY BE LESS THAN THE FAIR MARKET VALUE OF THE SAME OR OTHER SIMILAR REAL PROPERTY WHICH IS NOT ENCUMBERED BY THIS COVENANT. HOMEOWNER AND EACH SUCCESSOR, HEIR OR ASSIGN OF HOMEOWNER FURTHER ACKNOWLEDGES THAT AT ALL TIMES IN SETTING THE TRANSFER PRICE, THE PRIMARY OBJECTIVE OF THE CITY AND THIS COVENANT IS TO PROVIDE HOUSING TO LOWER INCOME HOUSEHOLDS AT AN AFFORDABLE HOUSING COST. Homeowner's Initials 3. HOMEOWNER'S REPRESENTATIONS AND WARRANTIES AS TO THE SALE OF THE UNIT TO HOMEOWNER. Homeowner represents and warrants to the Developer and the City that the financial and other information which Homeowner has provided to the Developer and the City with respect to Homeowner's income and the purchase price of the 202435.3 Unit was true and correct at the time such information was provided, and remains true and correct as of the Date of this Covenant. 4. PERMITTED TRANSFERS OF THE UNIT. a. Notice Required for a Transfer. During the Affordability Period, the Unit, and any interest therein, shall not be Transferred by the Owner except with the express written consent of the City, which consent shall be given only if the Transfer is in strict compliance with the provisions of this Section 4. Each Owner understands that appropriate transfers will be permitted and neither the City nor the Lender may determine that transfers which result from marriage, divorce, death of a spouse, or which are otherwise required to be permitted under applicable Federal law provided that the transferee otherwise complies with Section 4(i), (ii), (iii), (iv), (v), and (vi), constitute a Default under this Covenant or the Affordable Housing Deed of Trust. During the Affordability Period in the event the then-Owner of the Unit, desires to Transfer the Unit, prior to the Transfer the Owner shall notify the City by delivering a Notice ofIntent to Transfer to the City. City hereby agrees to permit Transfers of the Unit to proposed Transferees ("Permitted Transferees") provided the Transfer satisfies all of the following conditions: i. Notice to City. The Owner shall send the Notice ofIntent to Transfer to the City at the address set forth in Section 22 hereof. The Notice ofIntent to Transfer shall identify the proposed Transferee, certify that to the best knowledge of the Owner the Transferee is a Lower Income Household, certify that the sales price is no more than an Affordable Housing Cost for Lower Income Households, and shall include copies of the sales contract, the grant deed or other document that is proposed to be used to effectuate the Transfer, copies of documents verifying that the proposed Transferee is a Lower Income Household (including, but not limited to, documents verifying the income of the proposed Transferee) and all other material documents related to the proposed Transfer. ii. Qualification of Proposed Transferee. The proposed Transferee shall provide and certify to the City with such information as the City may request related to the proposed Transfer in the form provided by the City, including without limitation: the Social Security Number of the proposed Transferee, copies of the federal income tax returns filed by the proposed Transferee for the prior two (2) calendar years, copies of the two most current wage earning statements of the proposed Transferee, a certification as to the income and family size of the proposed Transferee, the purchase price the Proposed Transferee intends to pay for the Unit, and a current appraisal reflecting the fair market value of the Unit on the assumption that the Unit is free from the restrictions provided for in this Covenant. The proposed Transferee shall also submit to the City an agreement by the Transferee to assume the obligations of an Owner of the Unit as set forth in this Covenant in such form as the City may request. iii. Certificates from Parties. The Owner and proposed Transferee each shall certify in writing, in a form acceptable to the City, that the Transfer shall be closed in accordance with, and only with, the terms of the sales contract and other documents submitted to and approved by the City and that all consideration delivered by the proposed Transferee to Owner has been fully disclosed to the City. The written certificate shall also include a provision that in the event a Transfer is made in violation of the terms of this Covenant or false or 202435.3 misleading slalements are made in any documents or certificale submitted 10 Ihe City for its approval of the Transfer, the City shall have the right to file an action al law or in equity 10 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 Owner and its transferee. iv. Agreement to Assume the Obligations of This Covenant. The grant deed or other document effectuating the Transfer of the Unit shall include the following: (a) references to this Covenant and the obligation ofthe Transferee to be bound by all the obligations of Homeowner set forth in this Covenant, (b) a reference to the Affordable Housing Deed of Trust, (c) a reference to the Affordable Housing Option Agreement, (d) a reference to the due on sale provisions of the Affordable Housing Note, (e) a reference to the Reimbursement Agreement and (f) a covenant that will require the Transferee, and any successor or assign of the Transferee, to include in any document Transferring the Unit a reference to this Covenant, the Affordable Housing Deed of Trust, the Affordable Housing Option Agreement, the Reimbursement Agreement, the due on sale provisions of the Affordable Housing Note, and the obligation of the Transferee to be bound by the obligations set forth in this Covenant, the Affordable Housing Deed of Trust, the Affordable Housing Option Agreement, the Reimbursement Agreement and the due on sale provisions of the Affordable Housing Note. v. Agreement to Increase Amount due on the Affordable Housing Note. The Transferee must agree to increase the amount of the Affordable Housing Note to the amount by which the fair market value of the Unit at the time of the closing of the Transfer is in excess of the sum of the Affordable Housing Cost of such Unit as of the date of the closing of the Transfer. Any interest that has accrued on the Affordable Housing Note as of the date of the closing of the Transfer shall be deemed to be included in the increased principal amount of the note, and interest shall begin accruing on the increased principal amount of the note as of the date of the closing of the Transfer at the rate provided in the note. Except for such increase in the principal amount of the Affordable Housing Note and the reduction to zero of accrued interest due on the note, the Affordable Housing Note, the Affordable Housing Deed of Trust, the Affordable Housing Option Agreement and the Reimbursement Agreement shall remain in full force and effect. vi. The City's Title Policy. The City must receive a title policy, in an amount equal to the amount then due on the Affordable Housing Note as increased as provided in this Section 4, insuring the Affordable Housing Deed of Trust as a monetary lien of second priority, i.e., subordinate in priority among monetary liens only to the monetary lien of any purchase money deed of trust recorded at the time of sale which deed of trust shall secure an amount not in excess of the then Affordable Housing Cost of the Unit. vii. Spousal Transfers. Notwithstanding the foregoing provisions of Sections 4(a)(vi) and 4(a)(vii), in the event of a transfer to a spouse in a dissolution proceeding the City shall not require a new title policy nor shall the City require reimbursement for its costs. b. Notice of Prohibited Transfer. Within fifteen (15) days after the receipt by the City of the notices, documents and agreements referred to in Section 4(a), the City shall determine and give notice to the Owner as to whether the proposed Transfer is a Permitted 202435,3 Transfer or Prohibited Transfer. Transfers that result from marriage, divorce, or death of a spouse, or Ihal are otherwise required 10 be permitted under applicable Federal law shall nol be deemed by the City as a Prohibited Transfer so long as the Transferee complies with this Section 4(i), (ii), (iii), (iv), (v) and (vi). In the event that the proposed Transfer is a Prohibited Transfer, such notice to the Owner shall specifY why the Transfer is a Prohibited Transfer. If the violation is not corrected to the satisfaction of the City within ten (10) days after the date of the notice, or within such further time as the City determines is necessary to correct the violation, the City may declare a Default under this Covenant. Upon the declaration of a Default, the City may apply 10 a court of competent jurisdiction for specific performance of this Covenant, for an injunction prohibiting a proposed sale or Transfer in violation of this Covenant, for a declaration that the Prohibited Transfer is void, or for any such other relief as may be appropriate. c. Delivery of Documents After the Closing. Upon the close of the proposed Transfer, the transferor and the 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 4 and any other documents which the City may reasonably request. d. Refinancings. This Section 4 shall not prohibit the encumbering of title for the sole purpose of securing financing of the purchase price of the Unit; however, any such financing (i) must be a First Lien, (ii) must not be in excess of the Affordable Housing Cost of such Unit as of date of the refinancing, (iii) must be in compliance with the Affordable Housing Deed of Trust, and (iv) shall be subordinate to this Covenant. 5. ENCUMBRANCES. a. Subordination. The provisions ofthis Covenant and the Affordable Housing Deed of Trust shall be subordinate to any First Lien on the Unit that secures the payment of a principal amount that is not in excess, as of the time the First Lien is recorded against the Unit, of the Affordable Housing Cost of the Unit. Notwithstanding the fact that the Covenant and Affordable Deed of Trust is subordinate to an appropriate First Lien, said fact shall not in any manner modify the obligations from time to time existing between the Owner and the City. The intent of this provision regarding subordination is that in the event of a foreclosure of the First Lien or the recordation of a deed in lieu offoreclosure of the First Lien, this Covenant shall no longer encumber the Unit and shall not be binding upon the lender or lender's successors or assigns, but shall in all cases remain binding upon the Owner. The City shall execute such written instruments for the subordination of its rights under this Covenant and the Affordable Housing Deed of Trust, including the Affordable Housing Option Agreement and the Reimbursement Agreement, as may reasonably be requested by the Lender. b. Request for Notice of Default. The City may cause a Request for Notice to be recorded on the Unit 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 "D" and incorporated herein. c. Further Encumbrances. Homeowner agrees that he or she shall not record or cause or permit the recordation of any deed of trust, mortgage, lien or other instrument 202435,3 creating a security interest in or to the Unit (a "Further Encumbrance") other than a First Lien, the Affordable Housing Deed of Trust and the Affordable Housing Option Agreement. 6. REIMBURSEMENT AGREEMENT. Homeowner covenants and agrees to pay timely any and all amounts due and payable on the obligations secured by the First Lien. Homeowner and the City shall enter into a Reimbursement Agreement, in the form attached hereto as Exhibit "E" and incorporated herein, which provides that the City may make payments to cure a Default or delinquency of any obligation secured by the First Lien, on the condition that the Homeowner agrees to reimburse the City for any payments made to cure such Default or delinquency. The Homeowner's repayment obligations pursuant to the Reimbursement Agreement shall be secured by a deed of trust which encumbers the Unit. 7. OPTION TO ACQUIRE UNIT UPON DEF AUL T OF OBLIGA nONS UNDER THIS COVENANT. Homeowner agrees to enter into an Option Agreement, in the form attached hereto as Exhibit "F" and incorporated herein, which grants to City an option to purchase the Unit in the event that the Homeowner is in Default of any of his or her obligations under this Covenant. 8. USES. Homeowner covenants and agrees to devote, use and maintain the Unit in accordance with this Covenant. All uses conducted on the Unit, including, without limitation, all activities undertaken by the Homeowner pursuant to this Covenant, shall conform to all applicable provisions of the Tustin Municipal Code, and the recorded documents pertaining to and running with the Unit. 9. NONDISCRIMINA nON COVENANTS. Homeowner covenants by and for himself or herself, and any successors in interest, that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Unit, nor shall the Homeowner or any person claiming under or through him or her establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the Unit. The foregoing covenants shall run with the land. 10. MAINTENANCE OF UNIT. Homeowner shall maintain the improvements and landscaping on the Unit in a manner consistent with community standards which will uphold the value of the Unit, in accordance with the Tustin Municipal Code. Homeowner also agrees to comply with all applicable federal, state and local laws. 11. OCCUPANCY STANDARDS. The Unit shall be used as the principal residence of Homeowner and Homeowner's family and for no other purpose. Homeowner shall not enter into an agreement for the rental or lease of the Unit, and Homeowner shall not otherwise rent or lease the Unit. The City may grant a temporary waiver of the above requirements for good cause, in the City's sole and absolute discretion. Examples of situations which may result in the grant of a temporary waiver include: (i) rental by Owner where necessary to accommodate a mandatory job transfer required by Owner's employer (not including Owner, if Owner is self- employed); (ii) rental necessitated by a medical or financial emergency, proof of which 202435.3 emergency has been delivered to the City, and (iii) other situations which constitute a "hardship" situation consistent with the intentions of this Covenant and the goal of the City to have affordable Owner occupied homes in the Project. The maximum occupancy of the Unit shall not exceed Ihree persons if the Unil is a one bedroom home, five persons iflhe Unil is a Iwo bedroom home, or seven persons if the Unit is a three bedroom home. Homeowner shall, commencing upon the first anniversary of the date of this Covenant first set forth above and on each succeeding anniversary thereafter, submit to the City an affidavit of occupancy in the form provided by the City. 12. EFFECT OF VIOLATION OF THE TERMS AND PROVISIONS OF THIS COVENANT. a. In General. The covenants established in this Covenant shall, without regard to technical classification and designation, be binding for the benefit and in favor of the City, its successors and assigns, as to those covenants which are for its benefit. The covenants contained in this Covenant shall remain in effect for the periods of time specified herein. The covenants against discrimination shall remain in effect in perpetuity. The City is deemed the beneficiary of the terms and provisions of this Covenant 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 Covenant and the covenants running with the land have been provided. This Covenant and the covenants therein shall run in favor of the City, without regard to whether the City has been, remains or is an owner of any land or interest therein in the Unit or in the Project Area. The City shall have the right, if the Covenant 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 Covenant and covenants may be entitled. b. Notice of Default. Failure or delay by Homeowner to perform any term or provision of this Covenant which is not cured within thirty (30) days after receipt of notice from the City constitutes a Default under this Covenant; provided, however, if such Default is of the nature requiring more than thirty (30) days to cure, Homeowner may avoid Default hereunder by immediately commencing to cure within such thirty (30) day period, and thereafter diligently pursuing such cure to completion. Failure or delay in giving notice by the City shall not constitute a waiver of any Default, nor shall it change the time of Default. c. City's Remedies. Upon the declaration of a Default, the City may (i) apply to a court of competent jurisdiction for specific performance, for an injunction prohibiting any act or omission in violation of this Covenant, or for any such other relief as may be appropriate, (ii) exercise the City's rights under the Affordable Housing Deed of Trust, including, without limitation, foreclosure of the Unit, and (iii) pursue such other rights and remedies permitted under applicable law. d. Prohibited Transfers Void. Any attempt by the Homeowner to make a Prohibited Transfer of title to or any interest in the Unit in violation of this Covenant shall be voidable by City. 202435,3 13. INDEMNIFICATION. Homeowner shall defend, indemnify and hold harmless the City and its officers, officials, agenls, employees, representalives, and volunleers from and against any loss, liability, claim, or judgment relating in any manner to the Homeowner's use of the Unit or Homeowner's violation of this Covenant. The Homeowner shall remain fully obligated for the payment of taxes, liens and assessments related to the Unit. There shall be no reduction in taxes for Homeowner, nor any transfer of responsibility to the City to make such payments, by virtue of this Covenant. 14. INSURANCE. Homeowner shall maintain, during the term of this Covenant, an all-risk property insurance policy insuring the Unit in an amount equal to the full replacement value of the structures on the Unit. 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. Homeowner shall transmit a copy of the certificate of insurance to the City within thirty (30) days of the effective date of this Covenant, and Homeowner shall annually transmit to the 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 the City at the address set forth in Section 22 hereof. Any certificate of insurance must be in a form, content and with companies approved by the City. 15. TIME OF THE ESSENCE. Time is of the essence with respect to all provisions of this Covenant in which a definite time for performance is specified; provided, however, that the foregoing shall not be construed to limit or deprive a party of the benefits of any grace or use period provided for in this Covenant. 16. NO WAIVER. No waiver of any provision or consent to any action under this Covenant shall constitute a waiver of any other provision or consent to any other action, whether or not similar. No waiver or consent shall constitute a continuing waiver or consent or commit a party to provide a waiver in the future except to the extent specifically set forth in writing. Any waiver given by a party shall be null and void if the party requesting such waiver has not provided a full and complete disclosure of all material facts relevant to the waiver requested. 17. FURTHER ASSURANCES. Homeowner shall execute any further documents consistent with the terms of this Covenant, including documents in recordable form, as the City shall from time to time find necessary or appropriate to effectuate its purposes in entering into this Covenant. 18. GOVERNING LAW. Homeowner hereby agrees to comply with all ordinances, rules and regulations of the City. Nothing in this Covenant is intended to be, nor shall it be deemed to be, a waiver of any City ordinance, rule or regulation. This Covenant shall be governed by the laws of the State of California. Any legal action brought under this Covenant 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 of California. 19. AMENDMENT OF COVENANT. No modification, rescission, waiver, release or amendment of any provision of this Covenant shall be made except by a written agreement executed by Homeowner and the City. 202435.3 20. CITY MAY ASSIGN. The City may, al its option, assign its rigbls hereunder without oblaining the consenl of the Homeowner. 21. HOMEOWNER ASSIGNMENT PROHIBITED. In no event shall Homeowner assign or transfer any portion of this Covenant without the prior express written consent of the City, which consent shall be given by the City only in the event that the City determines the Transfer fully complies with Section 4. This section shall not affect or diminish the City's right to assign all or any portion of its rights hereunder. 22. NOTICES. All notices, demands, consents, requests and other communications required or permitted to be given under this Covenant shall be in writing and shall be deemed conclusively to have been duly given (a) when hand delivered to the other party; (b) three (3) business days after such notice has been sent by United States mail via certified mail, return receipt requested, postage prepaid, and addressed to the other party as set forth below; or (c) the next business day after such notice has been deposited with a national overnight delivery service reasonably approved by the parties (Federal Express and Airborne Express are deemed approved by the parties), postage prepaid, addressed to the party to whom notice is being sent as set forth below with next-business-day delivery guaranteed, provided that the sending party receives a confirmation of delivery from the delivery service provider. Unless otherwise provided in writing, all notices hereunder shall be addressed as follows: To Homeowner: To City: City of Tustin 300 Cenlennial Way Tustin, California 92780 Attention: City Manager and Attenlion: Assislanl City Manager Eilher party may change ils address for notice by giving written notice thereof to the olher party. 23. ATTORNEYS' FEES AND COSTS. If any party to this Covenant institutes any action, suit, counterclaim, appeal, arbitration or mediation for any relief against another party, declaratory or otherwise (collectively an "Action"), to enforce the terms hereof or to declare rights hereunder or with respect to any inaccuracies or material omissions in connection with any of the covenants, representations or warranties on the part of the other party to this Agreement, then the prevailing party in such Action, whether by arbitration or final judgment, shall be entitled to have and recover of and from the other party all costs and expenses of the Action, including reasonable attorneys' fees and costs (at the prevailing party's attorneys' then- prevailing rates as increased from time to time by the giving of advanced written notice by such counsel to such party) incurred in bringing and prosecuting such Action and/or enforcing any 202435,3 10 judgment, order, ruling or award (collectively, a "Decision") granted therein, all of which shall be deemed to have accrued on the commencement of such Action and shall be paid whether or not such Action is prosecuted to a Decision. Any Decision entered in such Action shall contain a specific provision providing for the recovery of attorneys' fees and costs incurred in enforcing such Decision. A court or arbitrator shall fix the amount of reasonable attorneys' fees and costs upon the request of either party. Any judgment or order entered in any final judgment shall contain a specific provision providing for the recovery of all costs and expenses of suit, including reasonable attorneys' fees and expert fees and costs (collectively "Costs") incurred in enforcing, perfecting and executing such judgment. For the purposes of this paragraph, Costs shall include, without limitation, in addition to Costs incurred in prosecution or defense of the underlying action, reasonable attorneys' fees, costs, expenses and expert fees and costs incurred in the following: (a) post judgment motions and collection actions; (b) contempt proceedings; (c) garnishment, levy, debtor and third party examinations; (d) discovery; (e) bankruptcy litigation; and (f) appeals ofany order or judgment. "Prevailing party" within the meaning of this section includes, without limitation, a party who agrees to dismiss an Action in consideration for the other party's payment of the amounts allegedly due or performance of the covenants allegedly breached, or obtains substantially the relief sought by such party. 24. ENTIRE AGREEMENT. This Covenant, together with all attachments hereto, constitutes the entire understanding and agreement of the parties. This Covenant 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 the Homeowner concerning all or any part of the subject matter of this Covenant. 25. SEVERABILITY. Any provision of this Covenant that is deemed to be illegal, invalid or unenforceable by an arbitrator or court of competent jurisdiction shall be ineffective to the extent of the invalidity or unenforceability of such provision and shall be deemed stricken from this Covenant. Any stricken provision shall not affect the legality, enforceability or validity of the remainder of this Covenant. If any provision or part thereof of this Covenant is stricken in accordance with the provisions of this Section, then the stricken provision shall be replaced, to the extent possible, with a legal, enforceable and valid provision that is as similar in tenor and intent to the stricken provision as is legally possible. Any such invalidity or unenforceability of any provision in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. 26. COUNTERPARTS. This Covenant may be executed in two or more separate counterparts, each of which, when so executed, shall be deemed to be an original. Such counterparts shall, together, constitute and shall be one and the same instrument. This Covenant shall not be effective until the execution and delivery by the parties of at least one set of counterparts. The parties hereunder authorize each other to detach and combine original signature pages and consolidate them into a single identical original. Anyone of such completely executed counterparts shall be sufficient proof of this Covenant. IN WITNESS WHEREOF, the parties have executed Ihis Covenant as of the date sel forth above. BUYER: 202435.3 11 By: Printed Name: By: Printed Name: CITY: CITY OF TUSTIN, a municipal eorporation By: Printed Name: 202435,3 12 EXHIBIT "A" LEGAL DESCRIPTION OF UNIT [To Be Insertedl 202435.3 A-I EXHIBIT "B" LEGAL DESCRIPTION OF CITY'S PROPERTY THE BENEFITED PROPERTY COLUMBUS SQUARE Reuse Plan Disposal Parcels I-H-17, I-H-S, I-H-4, and I-H-3 202435,3 B-1 EXHIBIT "C" NOTICE OF INTENT TO TRANSFER NOTICE OF INTENT TO TRANSFER MUST BE DELIVERED TO THE CITY OF TUSTIN PRIOR TO PROCEEDING WITH ANY TRANSFER OF THE PROPERTY. From: ("Homeowner") To: City of Tustin 300 Centennial Way Tustin, California 92780 Attn: Assistant City Manager Re: (street address) Tustin, California (the "Unit") Circle appropriate words: Homeowner desires to [sell, convey, transfer by inheritance or devise, lease, gift, olherwise transfer] the Unit. Proposed Transferee: Ages of Proposed Transferee: Income of Proposed Transferee: Household Size of Proposed Transferee: Proposed Transfer Price: If the City has a program to help locate a Lower Income purchaser, does the Homeowner waul the City to help look for a Lower Income purchaser to buy the Unit? Yes: No: Date: Signature of Homeowner ( daytime telephone number of Homeowner 202435.3 C-I EXHIBIT "0" RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: City of Tuslin 300 Centennial Way Tustin, California 92780 Attention: Assistant City Manager SPACE ABOVE THIS LINE FOR RECORDER'S USE ONLY Exempt from recording fees pursuant to Govemmenl Code. 27383. Request for Notice Under Civil Code Section 2924b In accordance with Section 2924b, Civil Code, request is hereby made thata copy of any Notice of Default and a copy of any Notice of Sale under the Deed of Trust recorded as Inslrument No. _on ,200_, in Book, Page, Official Records of Orange County, California, and describing land therein as See Exhibit A attached hereto executed by , as Trustor, in which is named as Beneficiary, and , as Trustee, be mailed to CITY OF TUSTIN, at 300 Centennial Way, Tustin, California 92780, Attention: Assistant City Manager. NOTICE: A COpy OF ANY NOTICE OF DEF AUL T AND OF ANY NOTICE OF SALE WILL BE SENT ONLY TO THE ADDRESS CONTAINED THIS RECORDED REQUEST. IF YOUR ADDRESS CHANGES, A NEW REQUEST MUST BE RECORDED. CITY: CITY OF TUSTIN By: Printed Name: 202435.3 D-I EXHIBIT A TO EXHIBIT D LEGAL DESCRIPTION (Same as Exhibit A to the Covenant) 202435.3 EXHIBIT A TO EXHIBIT D COUNTY OF ) ) ss. ) STATE OF CALIFORNIA On , before me, , Nolary Public, (Print Name of Notary Public) 0 personally appeared -or- proved to me on Ihe basis of salisfactory evidence to be the person(s) whose name(s) is/are subscribed to Ihe 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 enlity upon behalf of which the person(s) acled, executed the instrument. 0 WITNESS my hand and official seal. Signature of Notary Signer(,) Other Than Named Above 202435.3 EXHIBIT A TO EXHIBIT D EXHIBIT "E" REIMBURSEMENT AGREEMENT THIS REIMBURSEMENT AGREEMENT, dated as of , 2°- (the "Reimbursemenl Agreement"), is hereby entered inlo by and between the CITY OF TUSTIN, a municipal corporation (the "City"), and (the "Homeowner"). RECITALS A. The Homeowner is purchasing a condominium localed at , Tustin, California (the "Unit"). B. The City and the Homeowner have executed an Affordable Housing Covenant (the "'Covenant") which requires that for a forty-five year period the Unit be sold only to Lower Income Households at an affordable housing cost, which may result in purchase prices which are substantially less than the current fair market value of the Unit. C. The Homeowner is obtaining a purchase money loan (the "Loan") from a private lender (the "Lender") for a portion of the cosls of acquisition of Ihe Unit. A description of Ihe Loan is set forth in Exhibit "1" hereto, which is incorporated herein. D. The Homeowner may Transfer his, her or their interests in the Unit to a Permitted Transferee who may in turn obtain a purchase money loan from an institutional lender for a portion of the costs of acquisition of the Unit. This subsequent lender and loan are also hereinafter referred to as the "Lender" and the "Loan". E. Pursuant 10 the Covenanl, Ihe City has the right to acquire the Unit in Ihe event, among other things, thaI it becomes subjecl to a foreeIosure proceeding, and the City has the righl to make payments to cure a Default or delinquency on the Loan. F. The righl to make payments to cure a Default or delinquency on the Loan will be of benefit to the City by allowing Ihe City to prevent the foreclosure of the Unil, which will prevent the possible early termination of the Covenant. G. The City's right to make payments to cure a Default or delinquency on the Loan will also be of benefit to the Homeowner, by allowing the Homeowner to retain ownership of the Unit and to avoid foreclosure. H. The City desires 10 obtain the authority 10 make payments to cure a Default or delinquency on the Loan, on the condition that the Homeowner agrees to reimburse the City for any payments made 10 cure a Default or delinquency on the Loan. In order to induce the City to obtain the authority to make payments to cure a Default or delinquency on the Loan, the Homeowner is willing to agree to reimburse the City for any payments made to cure a Loan Default or delinquency. The Homeowner understands and acknowledges that the City would nol make payments to cure a Loan Default or delinquency but for the Homeowner's agreement to make such reimbursements to the City, as provided herein. NOW, THEREFORE, in consideralion of the mutual covenants herein contained, it is agreed by and between the parties hereto as follows: I. Cure of Loan Default. The City hereby has the right, but not the obligation, to make payments to the Lender to fully or partially cure any Default or delinquency in payments of the Loan. 2. Reimbursement Obligation of Homeowner. The Homeowner hereby agrees to reimburse the City for any and all payments made by the City to fully or partially cure any Default or delinquency in payments of the Loan. Such payments shall be made within thirty (30) days after written demand is made therefor from the City to the Homeowner. The City may make such written demand to the Homeowner at any time after making such payments. If such written demand is made by personal delivery of such demand given to the Homeowner, or left at 202435.3 the Unit, such demand shall be deemed given immediately upon such delivery. If such written demand is made by reliable overnight delivery service (such as FedEx), such demand shall be deemed given one business day after deposit of the written demand with the overnight delivery service. If such written demand is made by registered or certified U.S. Mail, such demand shall be deemed given three business days after deposit of the written demand with the U.S. Postal Service. 3. Security for Reimbursement. The obligation ofthe Homeowner to make the reimbursement payments to the City required under Section 2 shall be secured by the Affordable Housing Deed of Trust which shall encumber the Homeowner's fee title to the Unit. Such deed of trust shall be executed by the Homeowner and shall be recorded in the official records of Orange County, California, at the time Homeowner acquires title to the Unit. The Homeowner consents to recordation of such deed of trust in the official records of Orange County, California. The Affordable Housing Deed of Trust shall secure all amounts due from the Homeowner and/or his, her or their successors and assigns as provided in this Reimbursement Agreement. 4. Notice of Default and Delinquency. The Homeowner agrees to deliver to the City a copy ofany notice of Default or delinquency in repayment of the Loan which Homeowner receives from or on behalf of the Lender. Such notices shall be delivered to the City within five (5) days of Homeowner's receipt of such notice from the Lender. 5. Waivers a. The Homeowner expressly agrees that any payment due hereunder may be extended from time 10 time at the City's sole and absolute discretion and that Ihe City may accept security in consideration for any such extension or release any security for this Reimbursement Agreement at its sole discretion all without in any way affecting the liability of the Homeowner. b. No extension of time for payment of the amounts due pursuant to this Reimbursement Agreement made by agreement by the City with any person now or hereafter liable for the payment of this Reimbursement Agreement shall operate to release, discharge, modify, change or affect the original liability of the Homeowner under this Reimbursement Agreement, either in whole or in part. c. The obligations of the Homeowner under this Reimbursement Agreement shall be absolute and the Homeowner waives any and all rights to offset, deduct or withhold any payments or charges due under this Reimbursement Agreement for any reasons whatsoever. d. The Homeowner waives presentment, demand, notice of protest and nonpayment, notice of Default or delinquency, notice of acceleration, notice of costs, expenses or leases or interest thereon, notice of dishonor, diligence in collection or in proceeding against any of the rights of interests in or to properties securing of this Reimbursement Agreement, and the benefit of any exemption under any homestead exemption laws, if applicable. e. No previous waiver and no failure or delay by the City in acting with respect to the terms of this Reimbursement Agreement shall constitute a waiver of any breach, Default, or failure or condition under this Reimbursement Agreement. A waiver of any term of 202435.3 this Reimbursement Agreement must be made in writing and shall be limiled to the express written terms of such waiver. 6. Attorneys' Fees and Costs. The Homeowner agrees that if any amounts due under this Reimbursement Agreement are not paid when due, the Homeowner shall pay, in addition, all costs and expenses of collection and reasonable attorneys' fees paid or incurred in connection with the collection or enforcement of this Reimbursement Agreement, whether or not suit is filed. The Homeowner further agrees that the provisions of Section 23 of the Covenant regarding attorneys fees and costs shall be equally applicable to this Reimbursement Agreement. 7. Miscellaneous. a. Term of Agreement. This Reimbursement Agreement shall take effect upon the date set forth in the first paragraph hereof and shall terminate concurrently with the termination of the Covenant. b. Successor is Deemed Included in All References to Predecessor. Whenever in this Reimbursement Agreement either the Homeowner or the City is named or referred to, such reference shall be deemed to include the successors or assigns thereof, and all the covenants and agreements in this Reimbursement Agreement contained by or on behalf of the Homeowner or the City shall bind and inure to the benefit of the respective successors and assigns thereof whether so expressed or not. c. Amendment. No modification, rescission, waiver, release or amendment of any provision of this Covenant shall be made except by a written agreement executed by Homeowner and the City. d. Notices. All notices, certificates or other communications hereunder shall be sufficiently given and shall be deemed to have been received in the manner and to the addresses set forth in Section 22 of the Covenant. e. Further Assurances and Corrective Instruments. Homeowner shall execute any further documents consistent with the terms of this Covenant, including documents in recordable form, as the City shall from time to time find necessary or appropriate to effectuate ils purposes in entering into this Covenant. f. Execution in Counterparts. This Reimbursement Agreement may be executed in two or more separate counterparts, each of which, when so executed, shall be deemed to be an original. Such counterparts shall, together, constitute and shall be one and the same instrument. This Agreement shall not be effective until the execution and delivery by the parties of at least one set of counterparts. The parties hereunder authorize each other to detach and combine original signature pages and consolidate them into a single identical original. Any one of such completely executed counterparts shall be sufficient proof of this Agreement. g. Applicable Law. This Reimbursement Agreement shall be governed by and construed in accordance with the laws of the State of California. 202435.3 h. Captions. The captions or headings in Ihis Reimbursemenl Agreement are for convenience only and in no way define, limit or describe the scope or intent of any provisions of this Reimbursement Agreement. i. Definition of Terms. Terms not otherwise defined in this Reimbursement Agreement are defined in the Covenant. IN WITNESS WHEREOF, the Homeowner and the City have caused this Reimbursement Agreement to be executed by their duly authorized respeclive officers, all as of the date first above written. CITY: CITY OF TUSTIN By: Printed Name: HOMEOWNER: Name: Name: 202435.3 4 EXHIBIT "I" TO EXHIBIT E Name of Homeowner: Address of Unit: Name of Lender: Amount of Loan: 202435,3 EXHIBIT "I" TO EXHIBIT E EXHIBIT "F" RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: City of Tustin 300 Centennial Way Tustin, California 92780 Attention: Assistant Citv Mana~er This document is exempt from the payment of a recording fee pursuant 10 Government Code Seclion 27383. OPTION AGREEMENT THIS OPTION AGREEMENT is entered into as of CITY OF TUSTIN, a municipal corporation (the "City"), and ,200_, by and between the (Ihe "Homeowner"). RECITALS Homeowner has purchased a condominium located al , California, as such real property is more particularly described in Exhibit "A" attached hereto and incorporated herein (the "Unil"). B. In order to assist Homeowner in the purchase of the Unit, the City agreed to accept as part paymenl of amounts owed by the Developer to the City a promissory note executed by Homeowner (the "Affordable Housing Note") in connection with Homeowner's purchase of the Unit. C. Homeowner and the City have entered into an Affordable Housing Covenant dated concurrently herewith (the "Coveuant"). Under the terms of the Covenant, the parties have agreed that for a forty-five year period the Unit shall be sold only to Lower Income Households at an Affordable Housing Cost and Ihat the Unit may be sold or othelWise transferred only as provided in Section 4 of Ihe Covenant. D. Pursuant to Section 7 of the Covenant, Ihe Homeowner has agreed to grant 10 the City an oplion to purchase the Unit in the event Homeowner is in Default of any of his or her obligations set forth in the Covenant. E. Homeowner desires to granl to City an option to purchase the Unit on the terms and condilions sel forth hereinbelow. For purposes of this Option Agreement, "Unil" shall also be deemed to include any and all improvemenls localed on the real property. NOW, THEREFORE, in consideration of the foregoing, and the mutual covenanls and conditions contained herein, the parties hereto agree as follows: A. 1. Grant of Option. a. Homeowner grants to City an option (the "Option") to purchase the Unit on the terms and conditions set forth in this Option Agreement. The Option may be exercised only (i) upon the occurrence of an event of Default under the Covenant, or (ii) the due date of the Affordable Housing Note is accelerated because ofa transfer by the Owner of title to the Unit. b. The purchase price payable by the City to the Homeowner for the Unit shall be the Affordable Housing Cost of the Unit for Lower Income Households (as defined in the Covenant), as of the date of the close of escrow for the City's acquisition of the Unit (the "Option Price"). Homeowner agrees that this Option may be specifically enforced. 18404:6402513.4 202435.3 c. F or purposes of this Option Agreement, the Affordable Housing Cost of the Unit shall be reasonably delermined the City by assuming (a) a 30 year, fully amortized, level payment mortgage loan for 97% of the price of the Unit, at currently prevailing mortgage rates, (b) the prevailing cost of mortgage insurance payments for the loan described in subparagraph (a), but only if mortgage insurance would customarily be charged for such loan, (c) property taxes and assessments based on the reassessment of the Unit as of the closing date of the City's acquisition ofthe Unit, assuming the Unit is not exempt from such taxes and assessments, (d) current homeowner's association fees, ( e) the prevailing cost for fire and casualty insurance, however, if the homeowner's association carries fire and casualty insurance with respect to the exterior of the Unit, then no additional cost shall be assigned to fire and casualty insurance, and (f) use of the utilities allowance established by the Orange County Housing Authority for the size of the Unit, or if no such allowance exists at that time, then a reasonable utilities allowance as determined by the City. d. The Option created hereby shall be irrevocable by Homeowner and shall be binding upon the successors and assigns of Homeowner. The City shall have the right of specific performance to enforce the terms of this Option Agreement. 2. Term and Consideration for Option. The term of the Option ("Option Term") shall commence on the date of this Option Agreement, and shall expire upon the expiration or termination of the Covenant. 3. Exercise of Option. The Option may be exercised by City's delivery to Owner of written notice of such exercise (the "Exercise Notice"). In the event that the City exercises the Option, but, prior to the sale of the Unit to the City, the Owner cures the event that gave rise to the right of the City to exercise the Option, the City's exercise of the Option shall be deemed revoked. The revocation of the exercise of the Option shall not terminate this Option Agreement or preclude the City from subsequently exercising the Option upon a later occurrence of an event giving rise to the right of the City to exercise the Option. 4. Escrow and Completion of Sale. Within five (5) days after City has exercised the Option, or as soon thereafter as reasonably practicable, an escrow shall be opened with an escrow company mutually acceptable to City and Homeowner for the conveyance of the Unit to the City. The Option Price shall be paid by the City in part by cancellation of the Affordable Housing Note. The City shall deposit in escrow not later than one (I) business day prior to the anticipated close of escrow date the Affordable Housing Note, to be cancelled by the escrow holder upon the consummation of the sale, and cash in an amount equal to the difference between the Option Price and the amount then due on the Affordable Housing Note. The City's obligation to close escrow shall be subject to the City's approval ofa then-current preliminary title report and, at City's option, environmental and other site testing. Any exceptions shown on such preliminary title report created on or after the Homeowner's acquisition of the Unit shall be removed by Homeowner at its sole expense prior to the close of escrow pursuant to this Section 4 unless such exceptiones) is (are) accepted by City in its reasonable discretion; provided, however, that City shall accept the following exceptions to title: (i) current taxes not yet delinquent, (ii) matters affecting title existing on the date of Homeowner's acquisition ofthe Unit, (iii) liens and encumbrances in favor of the City of Tustin, and (iv) matters shown as printed exceptions in the standard form CL TA owner's policy of title insurance. The parties 202435.3 2 shall each be responsible for one-half oflhe escrow fees, documentary transfer laxes, recording fees and any other costs and expenses of the escrow, and the Homeowner shall be responsible for the cost of a CLT A owner's policy of title insurance. City shall have thirty (30) days after exercise of the Option to enter upon the Unit to conduct any tests, inspections, investigations, or studies of the condition of the Unit. Homeowner shall permil the City access to the Unil for such purposes. The City shall indemnify, defend, and hold harmless Homeowner and its officers, directors, shareholders, partners, employees, agents, and representatives from and against all claims, liabilities, or damages, and including expert witness fees and reasonable attorney's fees and costs, caused by City's activities with respect to or arising out of such testing, inspection, or investigatory activity on the Unit. Escrow shall close promptly after acceptance by City of the condition of title and the physical and environmental condition of the Unit. Until the Closing, the terms of the Covenant and the documents executed and recorded pursuant thereto shall remain in full force and effect. 5. Failure to Exercise Option. If the Option is not exercised in the manner provided in Section 3 above before the expiration of the Option Term, the Option shall terminate. Upon receipt ofthe written request of Homeowner, City shall cause a quitclaim deed terminating or releasing any and all rights City may have to acquire the Unit (the "Quitclaim Deed") to be recorded in the Official Records of Orange County, California. 6. Assignment and Nomination. The City may, at its option, assign its rights hereunder without obtaining the consent of the Homeowner, and the City may nominate another person or entity to acquire the Unit and the identity of such nominee shall not be subject to the approval of the Homeowner. In no event shall Homeowner, without the prior express written consent of the City, which consent shall be given by the City only in the event that the City determines the Transfer fully complies with Section 4 of the Covenant, assign or transfer its obligations of this Option to any person other than a Permitted Transferee as provided in the Covenant. 7. Title. Following the date hereof, except as permitted by the Covenant, Homeowner agrees not to cause, and shall use commercially reasonable efforts not to permit, any lien, easement, encumbrance or other exception to title to be recorded against the Unit without City's prior written approval, such approval not to be unreasonably withheld. 8. Representations and Warranties of Homeowner. Homeowner hereby represents, warrants and covenants to City as follows, which representations and warranties shall survive the exercise of the' Option and the Close of Escrow: a. that this Option Agreement and the other documents to be executed by Homeowner hereunder, upon execution and delivery thereof by Homeowner, will have been duly entered into by Homeowner, and will constitute legal, valid and binding obligations of Homeowner; b. neither this Option Agreement, nor anything provided to be done under this Option Agreement, violates or shall violate any contract, document, understanding, agreement or instrument to which Homeowner is a party or by which it is bound; and 202435.3 c. Homeowner shall pay, prior to delinquency, any and all real property taxes and assessments which affect the Unit. Homeowner agrees to indemnify, protect, defend, and hold City and the Unit harmless from and against any damage, claim, liability, or expense of any kind whatsoever (including, without limitation, reasonable attorneys' fees and fees of expert witnesses) arising from or in connection with any breach of the foregoing representations, warranties and covenants. Such representations and warranties of Homeowner shall be true and correct on and as of the date of this Option Agreement and on and as of the date of the Close of Escrow. 9. Representations and Warranties of City. City hereby represents and warrants and covenants to Homeowner, as follows, which representations and warranties shall survive the Close of Escrow: a. that this Option Agreement and the other documents to be executed by City hereunder, upon execution and delivery thereof by City, will have been duly entered into by City, and will constitute legal, valid and binding obligations of City, and b. neither this Option Agreement, nor anything provided to be done under this Option Agreement, violates or shall violate any contract, document, understanding, agreement or instrument to which City is a party or by which it is bound. City agrees to indemnify, protect, defend, and hold Homeowner and the Unit harmless from and against any damage, claim, liability, or expense ofany kind whatsoever (including, without limitation, reasonable attorneys' fees and fees of expert witnesses) arising from or in connection with any breach of the foregoing representations, warranties and covenants. Such representations and warranties of City, and any other representations and warranties of City contained elsewhere in this Option Agreement shall be true and correct on and as of the date of this Option Agreement and on and as of the date of the Close of Escrow. 10. General Provisions. 10.1 Paragraph Headings. The paragraph headings used in this Option Agreement are for purposes of convenience only. They shall not be construed to limit or extend the meaning of any part of this Option Agreement. 10.2 Notices. All notices, demands, consents, requests and other communications required or permitted to be given under this Agreement shall be in writing and shall be deemed conclusively to have been duly given (a) when hand delivered to the other party; (b) three (3) business days after such notice has been sent by United States mail via certified mail, return receipt requested, postage prepaid, and addressed to the other party as set forth below; or (c) the next business day after such notice has been deposited with a national overnight delivery service reasonably approved by the parties (Federal Express and Airborne Express are deemed approved by the parties), postage prepaid, addressed to the party to whom notice is being sent as set forth below with next-business-day delivery guaranteed, provided that the sending party receives a confirmation of delivery from the delivery service provider. Unless otherwise provided in writing, all notices hereunder shall be addressed as follows: 202435.3 4 To Homeowner: To City: City of Tustin Tustin City Hall 300 Centennial Way Tustin, California 92780 Attention: City Manager and Attention: Assistant City Manager with a copy to: City Attorney City ofTustin Woodruff Spradlin & Smart 701 S. Parker Street, Suite 8000 Orange, California 92868-4760 Attention: Lois E. Jeffrey, Esq. 10.3 Binding Effect. Subject to the provisions of Section 6, the terms, covenants and conditions of this Option Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors, assigns and transferees. 10.4 Entire Agreement. This Option Agreement sets forth the entire agreement between the parties hereto respecting the Option, and supersedes all prior negotiations and agreements, written or oral, concerning or relating to the subject matter of this Option Agreement. 10.5 California Law. This Option Agreement shall be governed by the laws of the State of California and any question arising hereunder shall be construed or determined according to such laws. 10.6 Time of the Essence. Time is of the essence of each and every provision of this Option Agreement. 10.7 Counterparts. This Option Agreement may be signed by the parties hereto in duplicate counterparts which together shall constitute one and the same agreement between the parties and shall become effective at such time as both of the parties shall have signed such counterparts. 202435.3 10.8 Attorneys' Fees. Ifany party to this Agreement institutes any action, suit, counterclaim, appeal, arbitration or medialion for any relief againsl anolher party, declaratory or otherwise (collectively an "Action"), to enforce the terms hereof or to declare rights hereunder or with respect to any inaccuracies or material omissions in connection with any of the covenants, representations or warranties on the part of the other party to this Agreement, then the prevailing party in such Action, whether by arbitration or final judgment, shall be entitled to have and recover of and from the other party all costs and expenses of the Action, including reasonable attorneys' fees and costs (at the prevailing party's attorneys' then-prevailing rates as increased from time to time by the giving of advanced written notice by such counsel to such party) incurred in bringing and prosecuting such Action and/or enforcing any judgment, order, ruling or award (collectively, a "Decision") granted therein, all of which shall be deemed to have accrued on the commencement of such Action and shall be paid whether or not such Action is prosecuted to a Decision. Any Decision entered in such Action shall contain a specific provision providing for the recovery of attorneys' fees and costs incurred in enforcing such Decision. A court or arbitrator shall fix the amount of reasonable attorneys' fees and costs upon the request of either party. Any judgment or order entered in any final judgment shall contain a specific provision providing for the recovery of all costs and expenses of suit, including reasonable attorneys' fees and expert fees and costs (collectively "Costs") incurred in enforcing, perfecting and executing such judgment. For the purposes of this paragraph, Costs shall include, without limitation, in addition to Costs incurred in prosecution or defense of the underlying action, reasonable attorneys' fees, costs, expenses and expert fees and costs incurred in the following: (a) post judgment motions and collection actions; (b) contempt proceedings; (c) garnishment, levy, debtor and third party examinations; (d) discovery; (e) bankruptcy litigation; and (f) appeals of any order or judgment. "Prevailing party" within the meaning of this section includes, without limitation, a party who agrees to dismiss an Action in consideration for the other party's payment of the amounts allegedly due or performance of the covenants allegedly breached, or obtains substantially the relief sought by such party. 10.9 Computation of Time. All periods of time referred to in this Option Agreement shall include all Saturdays, Sundays and state or national holidays, unless the period of time is specified as business days (which shall not include Saturdays, Sundays and state or national holidays), provided that if the date or last date to perform any act or give any notice with respect to this Option Agreement shall fall on a Saturday, Sunday or state or national holiday, such act or notice may be timely performed or given on the next succeeding day which is not a Saturday, Sunday or state or national holiday. Time is of the essence with respect to all provisions of this Agreement in which a definite time for performance is specified; provided, however, that the foregoing shall not be construed to limit or deprive a party of the benefits of any grace or use period provided for in this Agreement. 10.10 Definition of Terms. Terms not otherwise defined in this Option Agreement are defined in the Covenant. 10.11 Further Assurances. Each of the parties hereto shall execute and deliver at their own cost and expense, any and all additional papers, documents, or instruments, and shall do any and all acts and things reasonably necessary or appropriate in connection with the performance of their respective obligations hereunder in order to carry out the intent and purposes of this Agreement. 202435,3 IN WITNESS WHEREOF, this Option Agreement is executed by the parties hereto as of the date first above written. BUYER: By: Printed Name: By: Printed Name: CITY: CITY OF TUSTIN, a municipal corporation By: Printed Name: 202435,3 EXHIBIT "A" TO EXHIBIT F LEGAL DESCRIPTION [Same as Exhibit A to the Covenant] 202435,3 EXHIBIT "An to EXHIBIT F COUNTY OF ) ) ss. ) STATE OF CALIFORNIA On . before me, , Notary Public, (Print Name of Notary Public) 0 personally appeared -or- proved to me on Ihe basis of salisfactory evidence 10 be Ihe person(s) whose name(s) is/are subscribed to the wilhin instrumenl and acknowledged to me that he/she/lhey executed the same in hislher/their authorized capacity(ies), and that by hislher/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. 0 WITNESS my hand and official seal. Signature of Notary Signer(s) Other Than Named Above 202435.3 ST ATE OF CALIFORNIA ) COUNTY OF ) ) ss. ) On ,before me, , Notary Public, (Print Name of Notary Public) 0 personaIIy appeared -or- proved to me on the basis of salisfactory 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/lheir 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. 0 WITNESS my hand and official seal. Signature of Notary Signer(s) Other Than Named Above 202435.3 J,",,13,2oo5 . -.---------- ,-..--. -------,_...._--- -."-.....,-- 202435.3 ATTACHMENT NO.7 AFFORDABLE HOUSING COVENANT (MODERATE INCOME) Ju", 13.2005 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: City ofTustin 300 Centennial Way Tustin, California 92780 Attention: Assistant City Manager Exempt From Recording Fee Pursuant tn Gnvemment Code Section 27383 AFFORDABLE HOUSING COVENANT (Moderate Income) THIS AFFORDABLE HOUSING COVENANT (this "Covenant") is made as of ,200_, by "Homeowner") in favor of the CITY OF TUSTIN, a municipal corporation (the "City"). RECITALS (the A. Homeowner has purchased a condominium located at , Tustin, California, as such real property is more particularly described in Exhibit "A" attached hereto (the "Unit"). The Unit is part of that certain housing development known as "COLUMBUS SQUARE" (the "Project"). B. Pursuant to the Housing Agreement between the City and Moffett Meadows Partners LLC, a Delaware limited liability company (the "Developer"), a memorandum of which has been recorded in the Official Records of the County of Orange, the Developer is required to sell certain of the homes in the Project to "Moderate Income Households", at an "Affordable Housing Cost for Moderate Income Households". C. The Unit has been designated by the Developer as a Unit that is to be sold to a Moderate Income Household. D. Homeowner has represented to the Developer and the City that Homeowner and Homeowner's household intend to reside in the Unit as the Homeowner's principal residence at all times during the Homeowner's ownership of the Unit, that they wi\1 not rent the Unit to others, and that they are a Moderate Income Household. E. In order to enable City to meet its continuing affordable housing obligations under State Law, and because the City has facilitated the provision of Affordable Housing Units through its adoption of the Specific Plan and housing incentives in the Density Bonus Ordinance, the City has agreed to accept a promissory note executed by Homeowner (the "Affordable 18404:6402515.3 1202435.3) -1- June 13. 2005 Housing Note") in connection with Homeowner's purchase of the Unit. The Affordable Housing Note is, or shall be, secured by the Affordable Housing Deed of Trust. F. The City owns that certain parcel ofland adjacent to the Project that is more particularly described on Exhibit "B" attached hereto. G. This Covenant is intended to benefit the parcel ofland described on Exhibit "B", and the obligations and rights contained herein are intended to run with the land and to be subordinate to a "First Lien" (as define below). NOW, THEREFORE, for good and valuable consideration, the parties agree as follows: 1. DEFINITIONS. "Affordability Period" means that period of time commencing upon the Date of this Covenant and terminating on the forty-fifth (45th) anniversary of such date. "Affordable Housing Cost" for an Affordable Housing Unit designated to be sold to, and occupied by, a Moderate Income Household shall mean a price that does not exceed the Affordable Housing Cost for a family size appropriate for the Unit for Moderate Income Households. Affordable Housing Cost for an Affordable Housing Unit shall be calculated as of the date of sale or resale of the Unit. For purposes of this Covenant, "family size appropriate for the Unit" means two persons for a one bedroom house, three persons for a two bedroom house, four persons for a three bedroom house, five persons for a four bedroom house, etc. "Affordable Housing Cost for Moderate Income Households"means a cost per Unit for moderate income households as more particularly defined in Health and Safety Code Section 50052.5(b)(4) and as generally described in this Agreement as a price per Unit calculated as follows: "Annual Affordable Housing Cost for Moderate Income Households" shall not be less than twenty-eight percent (28%) ofthe gross annual income of the household, nor exceed the product of thirty-five (35) times one hundred ten percent (110%) of the annual Orange County Median Income, adjusted for family size appropriate for the Unit. Notwithstanding the foregoing, in accordance with Health and Safety Code Section 50052.5(b)(4), the City has determined and hereby agrees that, for a Moderate Income Household whose gross income exceeds one hundred ten percent (110%) of the annual Orange County Median Income adjusted for family size appropriate for the Unit, in accordance with Health and Safety Code Section 50052.5(b)(4), the City has determined and hereby agrees that the "Affordable Housing Cost for Moderate Income Households" shall be a Monthly Housing Cost not in excess of thirty five percent (35%) times one hundred twenty percent (120%) of the annual Orange County Median Income, adjusted for family size appropriate for the Unit. Affordable Housing Cost of Moderate Income Households shall take into account principal and interest, loan insurance, property taxes, fire and casualty insurance, utilities and Homeowners' Association fees. (202435,3) -2- ¡"nn 13.2005 "Affordable Housing Note" means that promissory note executed by Homeowner as part of Homeowner's purchase of the Unit from the Developer. The principal amount of the Affordable Housing Note is an amount not in excess of Ihe difference between Ihe sales price of a comparable Market Rate Unit and the sales price of the unit that is required to be sold at an Affordable Housing Cost, identified as of the date of purchase. "Affordable Housing Option Agreement" means the agreement attached hereto as Exhibit "F", that provides an option to purchase in favor of the City as provided in Section 7, which option shall be exercisable in the event that the Homeowner of a Unit is in breach of the Homeowner's obligations in this Covenant or in the event the due date of the Affordable Housing Note is accelerated as the result of a Transfer by the Homeowner. "Affordable Housing Deed of Trust" means that certain deed of trust executed by Homeowner which encumbers the Unit and secures the obligations of Homeowner and his or her successors and assigns as provided in (a) Ihis Covenant, (b) the Reimbursement Agreement attached hereto as Exhibit "E", and (c) the Affordable Housing Note. "Affordable Housing Unit" means one (I) of the two hundred sixty-six (266) housing units to be provided by Developer in the Project and for sale at an Affordable Housing Cost. "City" means the City of Tustin, and the City's successors and assigns. "County" means the County of Orange, California. "Covenant" means this Affordable Housing Covenant. "Date of this Covenant" means the date in the first paragraph of this Covenant. "Default" means the failure of a party to perform any action or covenant required by this Covenant within the time periods provided herein following notice and opportunity to cure. A deed in lieu offoreclosure of the Affordable Housing Deed of Trust shall not constitute a Default under this Covenant. "Developer" means Moffett Meadows Partners LLC, a Delaware limited liability company, described in Recital B, or its City-approved assignee, as described in Section 6 of the Housing Agreement. "First Lien"means the lien of a purchase money Lender which secures the obligations of the Homeowner to repay amounts owed to the Lender. (202435.3) -3- June 13.2005 "Homeowner" or "Owner" means the person or persons sel forth in Ihe first paragraph of this Covenant, and his, her or their successors and assigns. "Household" means all persons residing in a unit. "Legal Description" means the legal description ofthe Unit which is attached hereto as Exhibit "A". "Lender" means an institution making a purchase money loan to the Homeowner for the purchase of the Unit. "Market Rate Unit" means a dwelling unit within the Project that is not an Affordable Housing Unit. "Moderate Income Household" means a Household occupied by persons and families whose gross income does not exceed the qualifying limits for moderate income families set forth in Health and Safety Code Section 50093. "Monthly Housing Cost" means, for a Moderate Income Household purchasing the Unit, all of the following associated with the Unit, estimated or known as of the date of the proposed sale of the Unit: (i) principal and interest payments on a fixed interest rate mortgage loan, and any loan insurance fees associated therewith; (ii) property taxes and assessments; (iii) fire and casualty insurance covering replacement value of property improvements; (iv) any homeowner association fees; and (v) a reasonable utility allowance. Monthly housing cost of a purchaser shall be an average of estimated costs for the next twelve (12) month period. "Notice of Intent to Transfer" means the Notice of Intent to Transfer attached hereto as Exhibit "C". "Permitted Transfer" means any Transfer which is permitted pursuant to Section 4 hereof. "Permitted Transferee" means a Transferee from the Homeowner or from any Permitted Transferee who acquires ownership of the Unit as set forth in Section 4 hereof. (202435.3) -4- June 13.2005 "Prohibited Transfer" meanS any Transfer which is not permitted pursuant to Section 4 hereof. "Project" means that certain housing development known as Columbus Grove in which Ihe Unit is located. "Reimbursement Agreement" means the Reimbursement Agreement to be executed by the Homeowner in favor of the City, in the form attached hereto as Exhibit "E". "Request for Notice" means the Request for Notice under Civil Code Section 2924b attached hereto as Exhibit "D". "Transfer" shall mean any sale, assignment, conveyance, lease or transfer, voluntary or involuntary, of any interest in the Unit. Without limiting the generality of the foregoing, Transfer shall include (i) a transfer by devise, inheritance or intestacy; (ii) the creation of a life estate; (iii) the creation of a joint tenancy interest; (iv) a gift of all or any portion of the Unit; or (v) any voluntary conveyance of the Unit. "Transferee" shall mean any natural person or entity who obtains ownership rights in the Unit pursuant to a Transfer. "Unit" means that certain real property located at the street address set forth in Recital A and legally described in the Legal Description. 2. COVENANT REGARDING SALES OF UNIT. Homeowner covenants and agrees that, during the Affordability Period, each subsequent resale of the Unit by the then-Homeowner of the Unit shall be to a Moderate Income Household, at an Affordable Housing Cost for Moderate Income Households. Homeowner further covenants and agrees that, during the Affordability Period, each Homeowner shall abide by and be bound by all the obligations of Homeowner set forth in this Covenant. Homeowner agrees that the obligations of Homeowner set forth in this Covenant shall be secured by Ihe Affordable Housing Deed of Trust recorded concurrently with the recordation of this Covenant. HOMEOWNER AND EACH SUCCESSOR, HEIR OR ASSIGN OF HOMEOWNER UNDERSTANDS THAT THE DETERMINATION OF THE AFFORDABLE HOUSING COST CAN BE MADE ONLY AT THE TIME OF A PROPOSED SALE OR OTHER TRANSFER, TAKING INTO CONSIDERATION PREVAILING INTEREST RATES, THE OFFERED TERMS OF SALE, THE ECONOMIC CIRCUMSTANCES OF THE PROPOSED PURCHASER AND OTHER FACTORS THAT CANNOT BE ACCURATELY PREDICTED, AND THAT THE TRANSFER PRICE PERMITTED HEREUNDER MAY BE LESS THAN THE FAIR MARKET VALUE OF THE SAME OR OTHER SIMILAR REAL PROPERTY WHICH IS NOT ENCUMBERED BY THIS (20243S.3) -5- Juno 13.2005 COVENANT. HOMEOWNER AND EACH SUCCESSOR, HEIR OR ASSIGN OF HOMEOWNER FURTHER ACKNOWLEDGES THAT AT ALL TIMES IN SETTING THE TRANSFER PRICE, THE PRIMARY OBJECTIVE OF THE CITY AND THIS COVENANT IS TO PROVIDE HOUSING TO MODERATE INCOME HOUSEHOLDS AT AN AFFORDABLE HOUSING COST. Homeowner's Initials 3. HOMEOWNER'S REPRESENTATIONS AND WARRANTIES AS TO THE SALE OF THE UNIT TO HOMEOWNER. Homeowner represents and warrants to the Developer and the City that the financial and other information which Homeowner has provided to the Developer and the City with respect to Homeowner's income and the purchase price of the Unit was true and correct at the time such information was provided, and remains true and correct as of the date of this Covenant. 4. PERMITTED TRANSFERS OF THE UNIT. a. Notice Required for a Transfer. During the Affordability Period, Ihe Unit, and any interest therein, shall not be Transferred by the Homeowner except with the express written consent of the City, which consent shall be given only if the Transfer is in strict compliance with the provisions of this Section 4. Each Owner understands that appropriate transfers will be permitted and neither the City nor the Lender may determine that transfers which result from marriage, divorce or death of a spouse, or which are otherwise required to be permitted under applicable Federal law provided that the transferee otherwise complies with Section 4(i), (ii), (iii), (iv), (v), and (vi), constitute a Default under this Covenant or the Affordable Housing Deed of Trust. During the Affordability Period, in the event the then- Homeowner of the Unit desires to Transfer the Unit, then prior to the Transfer such Homeowner shall notify the City by delivering a Notice ofIntent to Transfer to the City. City hereby agrees to permit Transfers of the Unit to proposed Transferees ("Permitted Transferees") provided the Transfer satisfies all of the following conditions: i. Notice to City. The Homeowner shall send the Notice ofIntent to Transfer to the City at the address set forth in Section 22 hereof. The Notice ofIntent to Transfer shall identify the proposed Transferee, certify that to the best knowledge of the Homeowner the Transferee is a Moderate Income Household, certify that the sales price is no more than an Affordable Housing Cost for Moderate Income Households, and shall include copies of the sales contract, the grant deed or other document that is proposed to be used to effectuate the Transfer, copies of documents verifying that the proposed Transferee is a Moderate Income Household (including, but not limited to, documents verifying the income of the proposed Transferee) and all other material documents related to the proposed Transfer. ii. Qualification of Proposed Transferee. The proposed Transferee shall provide and certify to the City such information as the City may request related to the proposed Transfer in the form provided by the City, including without limitation: the Social Security Number of the proposed Transferee; copies of the federal income tax returns filed by the proposed Transferee for the prior two (2) calendar years; copies of the two most current wage earning statements of the proposed Transferee; a certification as to the income and family size of (202435,31 -6- June 13,2005 the proposed Transferee; the purchase price the Proposed Transferee intends to pay for the Unit; and a current appraisal reflecting the fair market value of the Unit on the assumption that the Unil is free from the restrictions provided for in Ibis Covenant. The proposed Transferee shall also submit to the City an agreement by the Transferee to assume the obligations of a Homeowner of the Unit as set forth in this Covenant in such fonn as the City may request. iii. Certificates from Parties. The Homeowner and proposed Transferee each shall certify in writing, in a form acceptable to the City, that the Transfer shall be closed in accordance with, and only with, the terms of the sales contract and other documents submitted to and approved by Ihe City and that all consideration delivered by Ihe proposed Transferee to Homeowner has been fully disclosed to the City. The written certificate shall also include a provision that in the event a Transfer is made in violation of the terms of this Covenant or false or misleading statements are made in any documents or certificate submitted to the City for its approval of the Transfer, the 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 Homeowner and its transferee. iv. Agreement to Assume the Obligations of This Covenant. The grant deed or other document effectuating the Transfer of the Unit shall include the following: (a) references to this Covenant and the obligation of the Transferee to be bound by all the obligations of Homeowner set forth in this Covenant, (b) a reference to the Affordable Housing Deed of Trust, (c) a reference to the Affordable Housing Option Agreement, (d) a reference to the due on sale provisions of the Affordable Housing Note, (e) a reference to the Reimbursement Agreement and (f) a covenant that will require the Transferee, and any successor or assign of the Transferee, to include in any document Transferring the Unit a reference to this Covenant, the Affordable Housing Deed of Trust, the Affordable Housing Option Agreement, the Reimbursement Agreement, the due on sale provisions of the Affordable Housing Note, and the obligation of the Transferee to be bound by the obligations set forth in this Covenant, the Affordable Housing Deed of Trust, the Affordable Housing Option Agreement, the Reimbursement Agreement and the due on sale provisions of the Affordable Housing Note. v. Agreement to Increase Amount due on the Affordable Housing Note. The Transferee must agree to increase the amount of the Affordable Housing Note to the amount by which the fair market value of the Unit at the time of the closing of the Transfer is in excess ofthe sum of the Affordable Housing Cost of such Unit as of the date of the closing of the Transfer. Any interest that has accrued on the Affordable Housing Note as of the date of the closing of the Transfer shall be deemed to be included in the increased principal amount of the Affordable Housing Note, and interest shall begin accruing on Ihe increased principal amount of the Affordable Housing Note as of the date of the closing of the Transfer at the rate provided in the Affordable Housing Note. Except for such increase in the principal amount of the Affordable Housing Note and the reduction to zero of accrued interest due on the Affordable Housing Note, the Affordable Housing Note, the Affordable Housing Deed of Trust, the Affordable Housing Option Agreement and the Reimbursement Agreement shall remain in full force and effect. vi. The City's Title Policy. The City must receive a title policy, in an amount equal to the amount then due on the Affordable Housing Note as increased as provided in this Section 4, insuring the Affordable Housing Deed of Trust as a monetary lien of second (202435.3) -7- lone 13.2005 priority, i.e., subordinate in priority among monetary liens only to the monetary lien of any First Lien recorded at the time of sale which First Lien shall secure an amount not in excess of the Ihen Affordable Housing Cost oflhe Unit. vii. Spousal Transfers. Notwithstanding the foregoing provisions of Section 4(a)(vi), in the event of a transfer to a spouse in a dissolution proceeding, the City shall nol require a new litle policy, nor shall the City require reimbursement for its costs. b. Notice of Prohibited Transfer. Within fifteen (15) calendar days after the receipt by the City of the notices, documents and agreements referred to in Section 4(a), the City shall determine and give notice to the Homeowner as to whether the proposed Transfer is a Permitted Transfer or Prohibited Transfer. Transfers that result from marriage, divorce, or death ofa spouse, or that are otherwise required to be permitted under applicable Federal law shall not be deemed by the City as a Prohibited Transfer so long as tþe Transferee complies with this Section 4(i), (ii), (iii), (iv), (v) and (vi). In the event that the proposed Transfer is a Prohibited Transfer, such notice to the Homeowner shall specify why the Transfer is a Prohibited Transfer. If the violation is not corrected to the satisfaction of the City within ten (10) calendar days after the date of the notice, or within such further time as the City determines is necessary to correct the violation, the City may declare a Default under this Covenant. Upon the declaration of a Default, the City may apply to a court of competent jurisdiction for specific performance of this Covenant, for an injunction prohibiting a proposed sale or Transfer in violation of this Covenant, for a declaration that the Prohibited Transfer is void, or for any such other relief as may be appropriate. c. Delivery of Documents After the Closing. Upon the close of the proposed Transfer, the Iransferor and the Transferee, as applicable, shall provide Ihe City with a copy of the final sales contract, settlement statement, escrow instructions, all certificates required by this Section 4 and any other documents which the City may reasonably request. d. Refinancings. This Section 4 shall not prohibit the encumbering of title for the sole purpose of securing financing of the purchase price of the Unit upon a Transfer thereof; however, any such financing (i) must be a First Lien, (ii) must not be in excess of the Affordable Housing Cost of such Unit as of the date of the financing and (iii) must be in compliance with the Affordable Housing Deed of Trust. 5. ENCUMBRANCES. a. Subordination. The provisions of the Affordable Housing Deed of Trust and the Affordable Housing Option Agreement and the Reimbursement Agreement shall be subordinate to any First Lien on the Unit that secures the payment of a principal amount that is not in excess, as of the time the First Lien is recorded against the Unit, of the Affordable Housing Cost of the Unit. Notwithstanding the fact that the Covenant and Affordable Deed of Trust is subordinate to an appropriate First Lien, said fact shall not in any manner modify the obligations from time to time existing between the Owner and the City. The intent of this provision regarding subordination is that in the event of a foreclosure of the First Lien or the recordation of a deed in lieu of foreclosure of the First Lien, this Covenant shall no longer encumber the Unit and shall not be binding upon the Lender or Lender's successors or assigns, but shall in all cases remain binding upon the Owner. The City shall execute such written instruments for the subordination of its rights under the Affordable Housing Deed of Trust, the (202435,3) -8- June 13.2005 Affordable Housing Option Agreement and the Reimbursement Agreement, as may reasonably be requested by the Lender. The City's agreement to so subordinate its rights is subject to agreemenl in writing by the Lender providing the City the following righls: i. Upon the occurrence of a Default under any of the First Lien documents, the holder of the First Lien shall promptly notify the City of the occurrence of such Default, which notification shall be provided to the City contemporaneously with the delivery to Homeowner of any notice of Default under any of the First Lien documents; ii. The City shall have the right, during the cure periods which apply to the Homeowner pursuant to the First Lien documents and any cure period which may apply to the City under applicable law, to cure the Homeowner's Default relative to the First Lien; and iii. After a Default on any of the First Lien documents but prior to a foreclosure sale or deed in lieu assignment of the Unit, the City shall have the right to take title to the Unit and cure the Default relative to the First Lien documents, without the holder of the First Lien exercising any right it might otherwise have to accelerate the obligations secured by the First Lien by reason of such title transfer, so long as the City promptly cures any such Default upon taking title to the Unit. b. Request for Notice of Default. The City may cause a Request for Notice to be recorded on the Unit 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. c. Further Encumbrances. Homeowner agrees that he or she shall not record or cause the recordation of any deed of trust, mortgage, lien or other instrument creating a security interest in or to the Unit (a "Further Encumbrance") other than a First Lien, the Affordable Housing Deed of Trust and the Affordable Housing Option Agreement. 6. REIMBURSEMENT AGREEMENT. Homeowner covenants and agrees to pay timely any and all amounts due and payable on the obligations secured by the First Lien. At the time of the close of escrow with respect to any Transfer, each Homeowner shall enter into a Reimbursement Agreement, in the fonn attached hereto as Exhibit "E", which provides that the City may make payments to cure a Default or delinquency of any obligation secured by the First Lien, on the condition that the Homeowner agrees to reimburse the City for any payments made to cure such Default or delinquency. The Homeowner's repayment obligations pursuant to the Reimbursement Agreement shall be secured by the Affordable Housing Deed of Trust. 7. OPTION TO ACQUIRE UNIT UPON DEFAULT OF OBLIGATIONS UNDER THIS COVENANT. At the time of the initial close of escrow and at close of escrow with respect to any Transfer, each Homeowner shall enter into an Option Agreement, in the form attached hereto as Exhibit "F", which grants to City an option to purchase the Unit in the event that the Homeowner is in Default of any of his or her obligations under this Covenant. 8. USES. Homeowner covenants and agrees to devote, use and maintain the Unit in accordance with this Covenant. All uses conducted on the Unit, including, without limitation, all activities undertaken by the Homeowner pursuant to this Covenant, shall conform to all (202435.3) -9- I"ne 13. ZOOS applicable provisions of the Tustin Municipal Code, and the recorded documents pertaining to and running with the Unit. 9. NONDISCRIMINA nON COVENANTS. a. Homeowner covenants by and for himself or herself, and any successors in interest, that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, sexual orientation, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Unit, nor shall the Homeowner or any person claiming under or through him or her establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the Unit. The foregoing covenants shall run with the land. b. Redevelopment Law; Form of Nondiscrimination and Nonsegregation Clauses. Homeowner shall refrain from restricting the sale of the property on the basis of the race, color, creed, religion, sex, sexual orientation, marital status, national origin or ancestry of any person. All deeds, leases or contracts shall contain or be subject to substantially the following non-discrimination or non-segregation clauses: i. In deeds: "The grantee herein covenants by and for itself, its successors and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, sex, sexual orientation, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee itself or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the land herein conveyed. The foregoing covenants shall run with the land." ii. In leases: "The lessee herein covenants by and for itself, its successors and assigns, and all persons claiming under or through them, and this lease is made and accepted upon and subject to the following conditions: That there shall be no discrimination against or segregation of any person or group of persons, on account of race, color, creed, religion, sex, sexual orientation, marital status, national origin or ancestry in the leasing, subleasing, renting, transferring, use, occupancy, tenure or enjoyment of the land herein leased, nor shall lessee itself, or any person claiming under or through it, establish or permit such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sublessees, subtenants or vendees in the land herein leased." iii. In contracts: "There shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, sexual orientation, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land, nor shall the transferee itself or any person claiming under or through it, establish or permit any such practice or practices of discrimination (202435.3) -10- June 13.2005 or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the land.] 10. MAINTENANCE OF UNIT. Homeowner shall maintain the improvements and landscaping on the Unit in a manner consistent with community standards which will uphold the value of the Unit, in accordance with the Tustin Municipal Code. Homeowner also agrees to comply with all applicable federal, slate and local laws. II. RENTALS I OCCUPANCY STANDARDS. The Unit shall be used as the principal residence of Homeowner and Homeowner's family and for no other purpose. Homeowner shall not enter into an agreement for the rental or lease of the Unit, and Homeowner shall not otherwise rent or lease the Unit. The City may grant a temporary waiver of the above requirements for good cause, in the City's sole and absolute discretion. Examples of situations which may result in the grant of a temporary waiver include: (i) rental by Owner where necessary to accommodate a mandatory job transfer required by Owner's employer (not including Owner, if Owner is self-employed); (ii) rental necessitated by a medical or financial emergency, proof of which emergency has been delivered to the City, and (iii) other situations which constitute a "hardship" situation consistent with the intentions of this Covenant and the goal of the City to have affordable Owner occupied homes in the Project. The maximum occupancy of the Unit shall not exceed three persons if the Unit is a one bedroom home, five persons if the Unit is a two bedroom home, or seven persons if the Unit is a three bedroom home. Homeowner shall, commencing upon the first anniversary of the date of this Covenant first set forth above and on each succeeding anniversary thereafter, submit to the City an affidavit of occupancy in the form provided by the City. 12. EFFECT OF VIOLATION OF THE TERMS AND PROVISIONS OF THIS COVENANT. a. In General. The covenants established in this Covenant shall, without regard to technical classification and designation, be binding upon the Unit against which it is recorded and the Homeowner thereof and its successors and/or assigns owning all or any interest therein, (a) for the benefit and in favor of the City, its successors and assigns and (b) for the benefit of the property described on Exhibit "B" to this Covenant, and the City as the owner thereof and its successors and assigns owning all, or any portion of such property. The covenants contained in this Covenant shall remain in effect for the periods of time specified herein. The covenants against discrimination shall remain in effect in perpetuity. The City is deemed the beneficiary ofthe terms and provisions of this Covenant 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 Covenant and the covenants running with the land have been provided. This Covenant and the covenants herein shall run in favor of the City, without regard to whether the City has been, remains or is a Homeowner of any land or interest therein in the Unit or in the Project Area. The City shall have the right, if the Covenant 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 Covenant and covenants may be entitled. (202435,31 -11- June 13.2005 b. Notice of Default. Failure or delay by Homeowner to perfonn any term or provision of this Covenant which is not cured within thirty (30) days after receipt of notice from the City constitutes a Defaull under this Covenant; provided, however, if such Default is of the nature requiring more than thirty (30) days to cure, Homeowner may avoid Default hereunder by immediately commencing to cure within such thirty (30) day period, and thereafter diligently pursuing such cure to completion. Failure or delay in giving notice by the City shall not constitute a waiver of any Default, nor shall it change the time of Default. c. City's Remedies. Upon the declaration of a Default, the City may (i) apply to a court of competent jurisdiction for specific performance, for an injunction prohibiting any act or omission in violation of this Covenant, or for any such other relief as may be appropriate, (ii) exercise the City's rights under the Affordable Housing Deed of Trust, including, without limitation, foreclosure of the Unit, and (iii) pursue such other rights and remedies pennitted under applicable law. d. Prohibited Transfers Void. Any attempt by the Homeowner to make a Prohibited Transfer of title to or any interest in the Unit in violation of this Covenant shall be voidable by City. 13. INDEMNIFICATION. Homeowner shall defend, indemnify and hold hannless the City and its officers, officials, agents, employees, representatives, and volunteers from and against any loss, liability, claim, or judgment relating in any manner to the Homeowner's use of the Unit or Homeowner's violation of this Covenant. The Homeowner shall remain fully obligated for the payment of taxes, liens and assessments related to the Unit. There shall be no reduction in taxes for Homeowner, nor any transfer of responsibility to the City to make such payments, by virtue of this Covenant. 14. INSURANCE. Homeowner shall maintain, during the tenn of this Covenant, an all-risk property insurance policy insuring the Unit in an amount equal to the full replacement value of the structures on the Unit. 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. Homeowner shall transmit a copy of the certificate of insurance to the City within thirty (30) days of the effective date of this Covenant, and Homeowner shall annually transmit to the City a copy of the certificate of insurance, signed by an authorized agent ofthe insurance carrier setting forth the general provisions of coverage. The copy of the certificate of insurance shall be transmitted to the City at the address set forth in Section 22 hereof. Any certificate of insurance must be in a form, content and with companies approved by the City. 15. TIME OF THE ESSENCE. Time is of the essence with respect to all provisions of this Covenant in which a definite time for performance is specified; provided, however, that the foregoing shall not be construed to limit or deprive a party of the benefits of any grace or use period provided for in this Covenant. 16. NO WAIVER. No waiver of any provision or consent to any action under this Covenant shall constitute a waiver of any other provision or consent to any other action, whether or not similar. No waiver or consent shall constitute a continuing waiver or consent or commit a party to provide a waiver in the future except to the extent specifically set forth in writing. Any (202435.3) -12- June 13,2005 waiver given by a party shall be null and void if the party requesting such waiver has not provided a full and complete disclosure of all material facts relevant to the waiver requested. 17. FURTHER ASSURANCES. Homeowner shall execute any further documents consistent with the terms of this Covenant, including documents in recordable form, as the City shall from time to time find necessary or appropriate to effectuale ils purposes in entering into this Covenant. 18. GOVERNING LAW. Homeowner hereby agrees to comply with all ordinances, rules and regulations of the City. Nothing in this Covenant is intended 10 be, nor shall it be deemed to be, a waiver of any City ordinance, rule or regulation. This Covenant shall be governed by the laws of the State of California. Any legal action brought under this Covenant 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 of California. 19. AMENDMENT OF COVENANT. No modification, rescission, waiver, release or amendment of any provision of this Covenant shall be made except by a written agreement executed by Homeowner and the City. 20. CITY MAY ASSIGN. The City may, at its option, assign its rights hereunder without obtaining the consent of the Homeowner. 21. HOMEOWNER ASSIGNMENT PROHIBITED. In no event shall Homeowner assign or transfer any portion of this Covenant without the prior express written consent ofthe City, which consent shall be given by the City only in the event that the City determines the Transfer fully complies with Section 4. This section shall not affect or diminish the City's right to assign all or any portion of its rights hereunder. 22. NOTICES. All notices, demands, consents, requests and other communications required or permitted to be given under this Covenant shall be in writing and shall be deemed conclusively to have been duly given (a) when hand delivered to the other party; (b) three (3) business days after such notice has been sent by United States mail via certified mail, return receipt requested, postage prepaid, and addressed to the other party as set forth below; or (c) the next business day after such notice has been deposited with a national overnight delivery service reasonably approved by the parties (Federal Express and Airborne Express are deemed approved by the parties), postage prepaid, addressed to the party to whom notice is being sent as set forth below with next-business-day delivery guaranteed, provided that the sending party receives a confirmation of delivery from the delivery service provider. Unless otherwise provided in writing, all notices hereunder shall be addressed as follows: To Homeowner: (202435,3) -13- June 13.2005 To City: City of Tustin 300 Centennial Way Tustin, California 92780 Attention: City Manager and Attention: Assistant City Manager Either party may change its address for notice by giving written notice thereof to the other party. 23. ATTORNEYS' FEES AND COSTS. If any party to this Covenant institutes any action, suit, counterclaim, appeal, arbitration or mediation for any relief against another party, declaratory or otherwise (collectively an "Action"), to enforce the terms hereof or to declare rights hereunder or with respect to any inaccuracies or material omissions in connection with any of the covenants, representations or warranties on the part of the other party to this Agreement, then the prevailing party in such Action, whether by arbitration or final judgment, shall be entitled to have and recover of and from the other party all costs and expenses of the Action, including reasonable attorneys' fees and costs (at the prevailing party's attorneys' then- prevailing rates as increased from time to time by the giving of advanced written notice by such counsel to such party) incurred in bringing and prosecuting such Action and/or enforcing any judgment, order, ruling or award (collectively, a "Decision") granted therein, all of which shall be deemed to have accrued on the commencement of such Action and shall be paid whether or not such Action is prosecuted to a Decision. Any Decision entered in such Action shall contain a specific provision providing for the recovery of attorneys' fees and costs incurred in enforcing such Decision. A court or arbitrator shall fix the amount ofreasonable attorneys' fees and costs upon the request of either party. Any judgment or order entered in any final judgment shall contain a specific provision providing for the recovery of all costs and expenses of suit, including reasonable attorneys' fees and expert fees and costs (collectively "Costs") incurred in enforcing, perfecting and executing such judgment. For the purposes of this paragraph, Costs shall include, without limitation, in addition to Costs incurred in prosecution or defense of the underlying action, reasonable attorneys' fees, costs, expenses and expert fees and costs incurred in the following: (a) post judgment motions and collection actions; (b) contempt proceedings; (c) garnishment, levy, debtor and third party examinations; (d) discovery; (e) bankruptcy litigation; and (f) appeals of any order or judgment. "Prevailing party" within the meaning of this section includes, without limitation, a party who agrees to dismiss an Action in consideration for the other party's payment of the amounts allegedly due or performance of the covenants allegedly breached, or obtains substantially the relief sought by such party. 24. ENTIRE AGREEMENT. This Covenant, together with all attachments hereto, constitutes the entire understanding and agreement of the parties. This Covenant 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 the Homeowner concerning all or any part of the subject matter of this Covenant. 25. SEVERABILITY. So long as the material bargain ofthe parties may be preserved, any provision of this Covenant that is deemed to be illegal, invalid or unenforceable by an arbitrator or court of competent jurisdiction shall be ineffective to the extent of the invalidity or unenforceability of such provision and shall be deemed stricken from this Covenant. Any stricken provision shall not affect the legality, enforceability or validity of the remainder of this Covenant. If any provision or part thereof of this Covenant is stricken in accordance with (202435,3) -14- June 13,2005 the provisions of this Section, then the stricken provision shall be replaced, to the extent possible, with a legal, enforceable and valid provision that is as similar in tenor and intent to the slricken provision as is legally possible. Any such invalidity or unenforceability of any provision in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. 26. COUNTERPARTS. This Covenant may be executed in two or more separate counterparts, each of which, when so executed, shall be deemed to be an original. Such counterparts shall, together, constitute and shall be one and the same instrument. This Covenant shall not be effective until the execution and delivery by the parties of at least one set of counterparts. The parties hereunder authorize each other to detach and combine original signature pages and consolidate them into a single identical original. Anyone of such completely executed counterparts shall be sufficient proof of this Covenant. 27. EXHIBITS. Each of the exhibits referenced in this Covenant and attached hereto is incorporated into this Covenant by this reference as though fully set forth in this Section. IN WITNESS WHEREOF, the parties have executed this Covenant as ofthe date set forth above. HOMEOWNER: By: Printed Name: By: Printed Name: CITY: CITY OF TUSTIN, a municipal corporation By: (202435.3) -15- lu"013.2005 EXHIBIT "A" LEGAL DESCRIPTION OF UNIT [To Be Inserted] EXHIBIT A-I 18404:6402515.3 18404:6402515.3 EXHIBIT "B" LEGAL DESCRIPTION OF CITY'S PROPERTY THE BENEFITED PROPERTY COLUMBUS SQUARE Reuse Plan Disposal Parcels I-H-I7, I-H-5, I-H-4, and I-H-3. EXHIBIT B-1 EXHIBIT "C" NOTICE OF INTENT TO TRANSFER NOTICE OF INTENT TO TRANSFER MUST BE DELIVERED TO THE CITY OF TUSTIN PRIOR TO PROCEEDING WITH ANY TRANSFER OF THE PROPERTY. From: ("Homeowner") To: City of Tustin 300 Centennial Way Tustin, California 92780 Attn: Assistant City Manager Re: (street address) Tustin, California (the "Unit") Circle appropriate words: Homeowner desires to [sell, convey, transfer by inheritance or devise, lease, gift, otherwise transfer] the Unit. Proposed Transferee: Ages of Proposed Transferee: Income of Proposed Transferee: Household Size of Proposed Transferee: Proposed Transfer Price: If the City has a program to help locate a Moderate Income purchaser, does the Homeowner want the City to help look for a Moderate Income purchaser to buy the Unit? Yes: - No: Date Signature of Homeowner (-) daytime telephone number of Homeowner 202435.3 EXHIBIT C-I EXHIBIT "D" RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: City ofTustin 300 Centennial Way Tustin, California 92780 Attention: Assistant City Manager ONLY SPACE ABOVE THIS LINE FOR RECORDER'S USE Exempt from recording fees pursuant to Government Code §27383. Requesl for Notice Under Civil Code Section 2924b In accordance with Section 2924b of the California Civil Code, request is hereby made that a copy of any Notice of Default and a copy ofany Notice of Sale under the Deed of Trust recorded as Instrument No. on , 200_, in Book -, Page -, Official Records of Orange County, California, and describing land therein as See Exhibit A attached hereto executed by , as Trustor, in which is named as Beneficiary, and , as Trustee, be mailed to CITY OF TUSTIN, at 300 Centennial Way, Tustin, California 92780, Attention: Assistant City Manager. NOTICE: A COpy OF ANY NOTICE OF DEF AUL T AND OF ANY NOTICE OF SALE WILL BE SENT ONLY TO THE ADDRESS CONTAINED THIS RECORDED REQUEST. IF YOUR ADDRESS CHANGES, A NEW REQUEST MUST BE RECORDED. CITY OF TUSTIN By: 202435,3 EXHIBIT 0-1 EXHIBIT A TO EXHIBIT 0 LEGAL DESCRIPTION (Same as Exhibit A to the Covenant) 18404:6402515.3 EXHIBIT A TO EXHIBIT 0 STATE OF CALIFORNIA COUNTY OF ) ) ss. ) On , before me, (Print Name of Notary Public) , Nolary Public, personally appeared 0 personally known to me -or- proved to me on Ihe basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed 10 the within instrument and acknowledged to me Ihat he/she/lhey executed the same in his/her/their aulhorized 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. 0 WITNESS my hand and official seal. Signature of Notary Signer(s) Other Than Named Above 18404:6402515.3 EXHIBIT "E" REIMBURSEMENT AGREEMENT THIS REIMBURSEMENT AGREEMENT, daled as of ,20 (Ihe "Reimbursement Agreement"), is hereby entered inlo by and between Ihe CITY OF TUSTIN, a municipal corporation (the "City"), and (the "Homeowner"). RECITALS A. The Homeowner is purchasing a condominium located at , Tuslin, California (the "Unil"). B. The City and the Homeowner have executed an Affordable Housing Covenant (the "Covenant") which . requires for a forty-five year period commencing that the Unit be sold only to Moderate Income Households at an Affordable Housing Cost, which may result in purchase prices which are substantially less than the current fair markel value of the Unit. C. The Homeowner is obtaining a purchase money loan (the "Loan") from a privale lender (the "Lender") for a portion of the costs of acquisition of the Unit which loan shall be secured by a First Lien (as defined in the Covenant) against the Unit. A description of the Loan is set forth in Exhibit "I" hereto, which is incorporated herein. D. The Homeowner may Transfer his, her or their interests in the Unit to a Permitted Transferee who may in turn obtain a First Lien purchase money loan from an institutional lender for a portion of the costs of acquisition of the Unit. This subsequent lender and loan are also hereinafter referred 10 as the "Lender" and the "Loan". E. Pursuant to the Covenant, the City has the right to acquire the Unit in the evenl, among other Ihings, that it becomes subject to a foreclosure proceeding, and the City has the right to make payments to cure a Default or delinquency on the Loan. F. The right to make payments 10 cure a Default or delinquency on the Loan will be of benefit to the City by allowing the City to prevent the foreclosure of the Unit, which will prevent the possible early termination of the Covenant. G. The City's right to make payments to cure a Default or delinquency on the Loan will also be of benefit to the Homeowner, by allowing the Homeowner 10 retain ownership of the Unit and 10 avoid foreclosure. H. The City desires to obtain the aulhority to make payments to cure a Default or delinquency on the Loan, on the condition that Ihe Homeowner agrees to reimburse the City for any payments made to cure a Default or delinquency on the Loan. In order to induce the City to obtain the authority to make paymenls to cure a Default or delinquency on Ihe Loan, the Homeowner is willing to agree to reimburse Ihe City for any payments made to cure a Loan Default or delinquency. The Homeowner understands and acknowledges that Ihe City would not make payments 10 cure a Loan Default or delinquency but for the Homeowner's agreement to make such reimbursements 10 the City, as provided herein. NOW, THEREFORE, in consideration of the mutual covenanls herein contained, it is agreed by and between the parties herelo as follows: 1. Cure of Loan Default. The City hereby has the right, but not the obligation, to make payments to the Lender to fully or partially cure any Default or delinquency in payments of the Loan. 2. Reimbursement Obligation of Homeowner. The Homeowner hereby agrees to reimburse the City for any and all payments made by the City to fully or partially cure any Default or delinquency in payments of the Loan. Such payments shall be made within thirty (30) 202435,3 EXHIBIT E-l days after written demand is made therefore from the City to the Homeowner. The City may make such written demand to the Homeowner at any time after making such payments. If such written demand is made by personal delivery of such demand given to the Homeowner, or left at the Unit, such demand shall be deemed given immediately upon such delivery. If such written demand is made by reliable overnight delivery service (such as FedEx), such demand shall be deemed given one business day after deposit of the written demand with the overnight delivery service. If such written demand is made by regislered or certified U.S. Mail, such demand shall be deemed given Ihree business days after deposit of the written demand with the U.S. Postal Service. 3. Security for Reimbursement. The obligation of the Homeowner to make the reimbursement payments to the City required under Section 2 shall be secured by the Affordable Housing Deed of Trust which shall encumber the Homeowner's fee title to the Unit. Such deed of trust shall be executed by the Homeowner and shall be recorded in the official records of Orange County, California, at the time Homeowner acquires title to the Unit. The Homeowner consents to recordation of such deed of trust in the official records of Orange County, California. The Affordable Housing Deed of Trust shall secure all amounts due from the Homeowner and/or his, her or their successors and assigns as provided in this Reimbursement Agreement. 4. Notice of Default and Delinquency. The Homeowner agrees to deliver to the City a copy of any notice of Default or delinquency in repayment of the Loan which Homeowner receives from or on behalf of the Lender. Such notices shall be delivered to the City within five (5) days of Homeowner's receipt of such notice from the Lender. 5. Waivers. (a) The Homeowner expressly agrees that any payment due hereunder may be extended from time to time at the City's sole and absolute discretion and that the City may accept security in consideration for any such extension or release any security for this Reimbursemenl Agreement at its sole discretion all without in any way affecting the liability of the Homeowner. (b) No extension of time for payment of the amounts due pursuant to this Reimbursement Agreement made by agreement by the City with any person now or hereafter liable for the payment of this Reimbursement Agreement shall operate to release, discharge, modify, change or affect the original liability of the Homeowner under this Reimbursement Agreement, either in whole or in part. (c) The obligations of Ihe Homeowner under this Reimbursemenl Agreement shall be absolute and the Homeowner waives any and all rights to offsel, deducI or withhold any payments or charges due under this Reimbursement Agreement for any reasons whatsoever. (d) The Homeowner waives presentment, demand, notice of protest and nonpayment, notice of Default or delinquency, notice of acceleration, notice of cosls, expenses or leases or interest thereon, notice of dishonor, diligence in colleclion or in proceeding against any of the rights of interests in or 10 properties securing of this Reimbursemenl Agreement, and the benefit of any exemption under any homestead exemption laws, if applicable. (e) No previous waiver and no failure or delay by the City in acting with respect to the terms of this Reimbursemenl Agreement shall constitute a waiver of any breach, Default, or failure or condition under this Reimbursement Agreement. A waiver of any lerm of this Reimbursement Agreement must be made in writing and shall be limited to Ihe express written lerms of such waiver. 6. Attorneys' Fees and Costs. The Homeowner agrees that if any amounts due under this Reimbursement Agreement are not paid when due, the Homeowner shall pay, in 202435.3 EXHIBIT E-2 addition, all costs and expenses of collection and reasonable attorneys' fees paid or incurred in connection with the collection or enforcement of this Reimbursement Agreement, whether or not suit is filed. The Homeowner further agrees that the provisions of Section 23 of the Covenant regarding attorneys' fees and costs shall be equally applicable to this Reimbursement Agreement. 7. Miscellaneous. a. Term of Agreement. This Reimbursement Agreement shall take effe~t upon the date set forth in the first paragraph hereof and shall terminate concurrently with the termination of the Covenant. b. Successor is Deemed Included in All References to Predecessor. Whenever in this Reimbursement Agreement either the Homeowner or the City is named or referred to, such reference shall be deemed to include the successors or assigns thereof, and all the covenants and agreements in this Reimbursement Agreement contained by or on behalf of the Homeowner or the City shall bind and inure to the benefit of the respective successors and assigns thereof whether so expressed or not. c. Amendment. No modification, rescission, waiver, release or amendment of any provision of this Covenant shall be made except by a written agreement executed by Homeowner and the City. d. Notices. All notices, certificates or other communications hereunder shall be sufficiently given and shall be deemed to have been received in the manner and to the addresses set forth in Section 22 of the Covenant. e. Further Assurances and Corrective Instruments. Homeowner shall execute any further documents consistent with the terms of this Covenant, including documents in recordable form, as the City shall from time to time find necessary or appropriate to effectuate its purposes in entering into this Covenant. f. Execution in Counterparts. This Reimbursement Agreement may be executed in two or more separate counterparts, each of which, when so executed, shall be deemed to be an original. Such counterparts shall, together, constitute and shall be one and the same instrument. This Agreement shall not be effective until the execution and delivery by the parties of at least one set of counterparts. The parties hereunder authorize each other to detach and combine original signature pages and consolidate them into a single identical original. Any one of such completely executed counterparts shall be sufficient proof of this Agreement. g. Applicable Law. This Reimbursement Agreement shall be governed by and construed in accordance with the laws of the State of California. h. Captions. The captions or headings in this Reimbursement Agreement are for convenience only and in no way define, limit or describe the scope or intent of any provisions of this Reimbursement Agreement. 202435.3 EXHIBIT E-3 i. Definition of Terms. Terms nol olherwise defined in this Reimbursemenl Agreement are defined in the Covenant. IN WITNESS WHEREOF, the Homeowner and Ihe City have duly executed this Reimbursement Agreement, all as of the date first above written. CITY OF TUSTIN: By: Name: Title: HOMEOWNER: Name: Name: 202435.3 EXHIBIT E-4 EXHIBIT "I" TO EXHIBIT E Name of Homeowner: Address of Unit: Name of Lender: Amount of Loan: EXHIBIT "I" TO EXHIBIT E t84O4:64025t5,) EXHIBIT "F" RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: City ofTustin 300 Cenlennial Way Tustin, California 92780 Attention: Assistant City Manager This document is exempt from the payment ofa recording fee pursuanl to Government Code Section 27383. AFFORDABLE HOUSING OPTION AGREEMENT THIS AFFORDABLE HOUSING OPTION AGREEMENT ("Oplion Agreement") is entered into as of , 200_, by and between Ihe CITY OF TUSTIN, a municipal corporation (the "City"), and - (the "Homeowner"). RECITALS A, Homeowner has purchased a condominium located at , Tustin, California, as such real property is more particularly described in Exhibit "A" attached herelo and incorporaled herein (Ihe "Unit"). B. As Ihe City has required Developer to sell the Unil to a Moderate Income Household, the City agreed to accept a promissory note executed by Homeowner (the "Affordable Housing Note") in conneclion with Homeowner's purchase of the Unit. The Affordable Housing Note is, or shall be, secured by the Affordable Housing Deed of Trust. C. Homeowner and the City have entered into an Affordable Housing Covenant dated concurrently herewith (the "Covenanl"). Under the terms of the Covenant, the parties have agreed that for a forty-five year period the Unit shall be sold only to Moderale Income Households at an Affordable Housing Cost and that the Unit may be sold or otherwise transferred only as provided in Seclion 4 of the Covenant. D. Pursuant to Section 7 oflhe Covenant, the Homeowner has agreed to grant to the City an option to purchase the Unit in the event Homeowner is in Default of any of his, her or Iheir obligations set forth in the Covenant. E. Homeowner desires 10 grant to City an option 10 purchase the Unit on the terms and conditions set forth hereinbelow. For purposes of this Option Agreement, "Unit" shall also be deemed to include any and all improvements located on the real property. NOW, THEREFORE, in consideration of the foregoing, and the mutual covenants and conditions conlained herein, the parties herelo agree as follows: 1. Grant of Option. (a) Homeowner granls to City an option (the "Option") to purchase the Unit on the terms and conditions set forth in Ihis Option Agreement. The Option may be exercised only (i) upon the occurrence of an event of Default under Ihe Covenanl, or (ii) the due date of the Affordable Housing Note is acceleraled because of a transfer by the Homeowner of title to Ihe Unit. (b) The purchase price payable by the City to the Homeowner for the Unit shall be the Affordable Housing Cost of the Unit for Moderate Income Households (as defined in Ihe Covenant), as of the date 202435.3 EXHIBIT F-I of the close of escrow for the City's acquisition of the Unit (the "Option Price"). Homeowner agrees that this Option may be specifically enforced. (c) For purposes of this Option Agreement, the Affordable Housing Cost of the Unil shall be reasonably determined the City by assuming (a) a 30 year, fully amortized, level payment mortgage loan for 97% of the price of the Unit, at currently prevailing mortgage rates, (b) the prevailing cost of mortgage insurance payments for the loan described in subparagraph (a), but only if mortgage insurance would customarily be charged for such loan, (c) property taxes and assessments based on Ihe reassessmenl of the Unit as oflhe closing date of the City's acquisition of the Unit, assuming the Unit is not exempt from such taxes and assessments, (d) CUrrent Homeowner's association fees, (e) the prevailing cost for fire and casualty insurance, however, if the Homeowner's association carries fire and casualty insurance with respect to the exterior of Ihe Unit, then no additional cosl shall be assigned to fire and casualty insurance, and (I) use oflhe ulilities allowance eslablished by Ihe Orange County Housing Authority for the size oflhe Unit, or ifno such allowance exists at that time, then a reasonable utilities allowance as determined by the City. (d) The Option created hereby shall be irrevocable by Homeowner and shall be binding upon the successors and assigns of Homeowner. The City shall have the right of specific performance 10 enforce the terms of this Option Agreement. 2. Term and Consideration for Option. The term of the Option ("Option Term") shall commence on the date of this Option Agreement, and shall expire upon the expiration or termination of the Covenant. 3. Exercise of Option. The Option may be exercised by City's delivery to Homeowner of written notice of such exercise (the "Exercise Notice"). In the event that the City exercises the Option, but, prior to the sale of the Unit to the City, the Homeowner cures the event that gave rise to the right of the City to exercise the Option, the City's exercise of the Option shall be deemed revoked. The revocation of the exercise of the Option shall not terminate this Option Agreement or preclude the City from subsequently exercising the Option upon a later occurrence of an event giving rise to the right of the City to exercise the Option. 4. Escrow and Completion of Sale. Within five (5) days after City has exercised the Option, or as soon thereafter as reasonably practicable, an escrow shall be opened with an escrow company mutually acceptable to City and Homeowner for the conveyance of the Unit to the City. The Option Price shall be paid by the City in part by cancellation of the Affordable Housing Note and Affordable Housing Deed of Trust. The City shall deposit in escrow not later than one (I) business day prior to the anticipated close of escrow date the Affordable Housing Note, to be cancelled by the escrow holder upon the closing of the Option transaction and consummation of the sale ("Close of Escrow"), and cash in an amount equal to the difference between the Option Price and the amount then due on the Affordable Housing Note. The City's obligation to close escrow shall be subject to the City's approval of a then-current preliminary title report and, at City's option, environmental and other site testing. Any exceptions shown on such preliminary title report created on or after the Homeowner's acquisition of the Unit shall be removed by Homeowner at its sole expense prior to the close of escrow pursuant to this Section 1 unless such exceptiones) is (are) accepted by City in its reasonable discretion; provided, however, that City shall accept the following exceptions to title: (i) current taxes not yet delinquent, (ii) matters affecting title existing on the date of Homeowner's acquisition of the Unit, (iii) liens and encumbrances in favor of the City, and (iv) matters shown as printed exceptions in the standard form CLTA Homeowner's policy of title insurance. The parties shall each be responsible for one-half ofthe escrow fees, documentary transfer taxes, recording fees and any other costs and expenses of the escrow, and the Homeowner shall be responsible for the 202435.3 EXHIBIT F-2 cost of a CL T A Homeowner's policy of title insurance. The City shall have thirty (30) days after exercise of the Option to enter upon the Unit to conduct any tests, inspections, investigations, or studies of the condition of the Unit. Homeowner shall permit the City access to the Unit for such purposes. The City shall indemnify, defend, and hold harmless Homeowner and its officers, directors, shareholders, partners, employees, agents, and representatives from and against all claims, liabilities, or damages, and including expert witness fees and reasonable attorney's fees and costs, caused by City's activities with respect to or arising out of such testing, inspection, or invesligatory aclivity on Ihe Unit. Close of Escrow shall take place promptly after acceplance by City of the condition of title and the physical and environmental condition of the Unit. Until the Close of Escrow, the terms of the Covenant and the documents executed and recorded pursuant thereto shall remain in full force and effect. 5. Failure to Exercise Option. If the Option is not exercised in the manner provided in Section 3 above before the expiration of the Option Term, the Option shall terminate. Upon receipt of the written request of Homeowner, City shall cause a quitclaim deed terminating or releasing any and all rights City may have to acquire the Unit (the "Quitclaim Deed") to be recorded in the Official Records of Orange County, California. 6. Assignment and Nomination. The City may, at its option, assign its rights hereunder without obtaining the consent of the Homeowner, and the City may nominate another person or entity to acquire the Unit, and the identity of such nominee shall not be subject to the approval of the Homeowner. In no event shall Homeowner, without the prior express written consent of the City, which consent shall be given by the City only in the event that the City determines the Transfer fully complies with Section 4 of the Covenant, assign or transfer its obligations of this Option to any person other than a Permitted Transferee as provided in the Covenant. 7. Title. Following the date hereof, except as permitted by the Covenant, Homeowner agrees not to cause, and shall use commercially reasonable efforts not to permit, any lien, easement, encumbrance or other exception to title to be recorded against the Unit without City's prior written approval, such approval not to be unreasonably withheld. 8. Representations and Warranties of Homeowner. Homeowner hereby represents, warrants and covenants to City as follows, which representations and warranties shall survive the exercise of the Option and the Close of Escrow: (a) that this Option Agreement and the other documents to be executed by Homeowner hereunder, upon execution and delivery thereof by Homeowner, will have been duly entered into by Homeowner, and will constitute legal, valid and binding obligations of Homeowner; (b) neither this Option Agreement, nor anything provided to be done under this Option Agreement, violates or shall violate any contract, document, understanding, agreement or instrument to which Homeowner is a party or by which it is bound; and (c) Homeowner shall pay, prior to delinquency, any and all real property taxes and assessments which affect the Unit. 202435.3 EXHIBIT F-3 Homeowner agrees to indemnify, protect, defend, and hold City and the Unit harmless from and against any damage, claim, liability, or expense of any kind whatsoever (including, without limitation, reasonable attorneys' fees and fees of expert witnesses) arising from or in connection with any breach of the foregoing representations, warranties and covenants. Such representations and warranties of Homeowner, shall be true and correct on and as of the date of this Option Agreement and on and as of the date of the Close of Escrow. 9. Representations and Warranties of City. City hereby represents and warrants and covenants to Homeowner, as follows, which representations and warranties shall survive the Close of Escrow: (a) that this Option Agreement and the other documents to be executed by City hereunder, upon execution and delivery thereof by City, will have been duly entered into by City, and will constitute legal, valid and binding obligations of City, and (b) neither this Option Agreement, nor anything provided to be done under Ihis Option Agreement, violates or shall violale any contract, document, understanding, agreement or instrument to which City is a party or by which it is bound. City agrees to indemnify, protect, defend, and hold Homeowner and the Unit harmless from and against any damage, claim, liability, or expense of any kind whatsoever (including, without limitation, reasonable attorneys' fees and fees of expert witnesses) arising from or in connection with any breach of the foregoing representations, warranties and covenants. Such representations and warranties of City, and any other representations and warranties of City contained elsewhere in this Option Agreement shall be true and correct on and as of the date of this Option Agreement and on and as of the date of the Close of Escrow. 10. General Provisions. 10.1 Paragraph Headings. The paragraph headings used in this Option Agreement are for purposes of convenience only. They shall nol be construed to limit or extend the meaning of any part of this Option Agreement. 10.2 Notices. All notices, demands, consents, requests and other communications required or permitted 10 be given under this Agreement shall be in writing and shall be deemed conclusively to have been duly given (a) when hand delivered to the other party; (b) three (3) business days after such notice has been sent by United States mail via certified mail, return receipt requested, postage prepaid, and addressed to the other party as set forth below; or (c) the next business day after such notice has been deposited with a national overnight delivery service reasonably approved by the parties (Federal Express and Airborne Express are deemed approved by the parties), postage prepaid, addressed to the party to whom notice is being sent as set forth below with next-business-day delivery guaranteed, provided that the sending party receives a confirmation of delivery from the delivery service provider. Unless otherwise provided in writing, all notices hereunder shall be addressed as follows: To Homeowner: 202435,3 EXHIBIT F-4 To City: City of Tustin Tustin City Hall 300 Centennial Way Tustin, California 92780 Attention: City Manager and Attention: Assistant City Manager with a copy to: City Attorney City of Tustin Woodruff Spradlin & Smart 701 S. Parker Street, Suite 8000 Orange, California 92868-4760 Attention: Lois E. Jeffrey, Esq. 10.3 Binding Effect. Subject to the provisions of Section 6, the terms, covenants and conditions of this Option Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors, assigns and transferees. 10.4 Entire Agreement. This Option Agreement sets forth the entire agreement between the parties hereto respecting the Option, and supersedes all prior negotiations and agreements, written or oral, concerning or relating to the subject matter of this Option Agreement. 10.5 California Law. This Option Agreement shall be governed by the laws of the State of California and any question arising hereunder shall be construed or determined according to such laws. 10.6 Time of the Essence. Time is of the essence with respect to each and every provision of this Option Agreement. 10.7 Counterparts. This Option Agreement may be executed in two or more separate counterparts, each of which, when so executed, shall be deemed to be an original. Such counterparts shall, together, constitute and shall be one and the same instrument. This Option Agreement shaH not be effective until the execution and delivery by the parties of at least one set of counterparts. The parties hereunder authorize each other to detach and combine original signature pages and consolidate them into a single identical original. Anyone of such completely executed counterparts shall be sufficient proof of this Option Agreement. 10.8 Attorneys' Fees. If any party to this Agreement institutes any action, suit, counterclaim, appeal, arbitration or mediation for any relief against another party, declaratory or otherwise (collectively an "Action"), to enforce the terms hereof or to declare rights hereunder or with respect to any inaccuracies or material omissions in connection with any of the covenants, representations or warranties on the part of the other party to this Agreement, then the prevailing party in such Action, whether by arbitration or final judgment, shall be entitled to 202435,3 EXHIBIT F-5 have and recover of and from the other party all costs and expenses of the Action, including, withoul limitation, reasonable attorneys' fees and costs (at the prevailing party's attorneys' then- prevailing rates as increased from time to time by the giving of advanced written notice by such counsel to such party) incurred in bringing and prosecuting such Action and/or enforcing any judgment, order, ruling or award (collectively, a "Decision") granted therein, all of which shall be deemed to have accrued on the commencement of such Action and shall be paid whether or not such Action is prosecuted to a Decision. Any Decision entered in such Action shall contain a specific provision providing for the recovery of attorneys' fees and costs incurred in enforcing such Decision. A court or arbitrator shall fix the amount of reasonable attorneys' fees and costs upon the request of either party. Any judgment or order entered in any final judgment shall contain a specific provision providing for the recovery of all costs and expenses of suit, including, without limitation, reasonable attorneys' fees and expert fees and costs (collectively "Costs") incurred in enforcing, perfecting and executing such judgment. For the purposes of this paragraph, Costs shall include, without limitation, in addition to Costs incurred in prosecution or defense of the underlying action, reasonable attorneys' fees, costs, expenses and expert fees and costs incurred in the following: (a) post judgment motions and collection actions; (b) contempt proceedings; (c) garnishment, levy, debtor and third party examinations; (d) discovery; (e) bankruptcy litigation; and (f) appeals of any order or judgment. "Prevailing party" within the meaning of this section includes, without limitation, a party who agrees to dismiss an Action in consideration for the other party's payment of the amounts allegedly due or performance of the covenants allegedly breached, or obtains substantially the relief sought by such party. 10.9 Computation of Time. All periods of time referred to in this Option Agreement shall include all Saturdays, Sundays and state or national holidays, unless the period of time is specified as business days (which shall not include Saturdays, Sundays and state or national holidays), provided that if the date or last date to perform any act or give any notice with respect to this Option Agreement shall fall on a Saturday, Sunday or state or national holiday, such act or notice may be timely performed or given on the next succeeding day which is not a Saturday, Sunday or state or national holiday. Time is of the essence with respect to all provisions of this Agreement in which a definite time for performance is specified; provided, however, that the foregoing shall not be construed to limit or deprive a party of the benefits of any grace or use period provided for in this Agreement. 10.10 Definition of Terms. Terms not otherwise defined in this Option Agreement are defined in the Covenant. 10.11 Further Assurances. Each of the parties hereto shall execute and deliver at their own cost and expense, any and all additional papers, documents, or instruments, and shall do any and all acts and things reasonably necessary or appropriate in connection with the performance of their respective obligations hereunder in order to carry out the intent and purposes of this Agreement. IN WITNESS WHEREOF, this Option Agreement is executed by the parties hereto as of the date first above written. HOMEOWNER: By: Printed Name: 202435.3 EXHIBIT F-6 By: Printed Name: CITY: CITY OF TUSTIN, a municipal corporation By: Printed Name: 202435.3 EXHIBIT F-7 EXHIBIT "A" TO EXHIBIT F LEGAL DESCRIPTION [Same as Exhibit A 10 Ihe Covenanll EXHIBIT A TO EXHIBIT F IS404:64025 15.3 COUNTY OF ) ) ss. ) STATE OF CALIFORNIA On , before me, , Notary Public, (Print Name of Nota')' Public) personally appeared 0 personally known to me -or- proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) islare subscribed to the wilhin instrument and acknowledged 10 me thaI helshelthey execuled the same in his/herltheir authorized capacity(ies), and Ihat by hisiher/lheir signature(s) on the inslrumenl Ihe person(s), or Ihe entity upon behalf of which the person(s) acted, executed the instrument. 0 WfTNESS my hand and official seal. S.gnature Of Nota')' Signer(s) Otber Than Named Above 202435,3 EXHIBIT F-l COUNTY Of ) ) ss. ) STATE Of CALIfORNIA On , before me, , Nolary Public, (Prinl Name of Nolary Public) personally appeared 0 0 personally known 10 me -or- proved 10 me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the wilhin instrument and acknowledged to me Ihat he/she/lhey executed the same in his/her/their aulhorized capacity(ies), and Ihat by hislher/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official sea!. Slgnal"'e 01 Notary Signer(s) Olher Than Named Above 202435.3 EXHIBIT F-2 ATTACHMENT NO.8 MEMORANDUM OF AGREEMENT 202435.3 Ju", 13.2005 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: City of Tustin 300 Centennial Way Tustin, California 92780 Attention: Assistant City Manager No fee for recording requested pursuant to Government Code Sections 6103 and 27383 MEMORANDUM OF HOUSING AGREEMENT THIS MEMORANDUM OF HOUSING AGREEMENT ("Memorandum of Agreement") is made as of , 2005, by and between the CITY OF TUSTIN, a municipal corporation (the "City"), and MOFFETT MEADOWS PARTNERS, LLC, a Delaware limited liability company (the "Developer") to confirm thaI the City and the Developer have entered into that certain Housing Agreement dated as of , 2005 (the "Agreement") affecting the real property described below. The Agency and the Developer are sometimes referred 10 herein individually as a "Party" and collectively as the "Parties". Initially capitalized terms used herein and not otherwise defined shall have the meaning ascribed to such terms in the Agreement. I. Property Affected by the Agreement. The following described land is subjecI to the terms, covenants, conditions and restrictions set forth in the Agreement: 1.1 The "Property" consisting of, as of the date hereof, that certain property located at COLUMBUS SQUARE, in the City of Tustin, County of Orange, State of California. The Property is more particularly described on Attachment No. I, attached hereto, and incorporated herein by this reference. The Benefitted Property is described in Recital 13 of the Agreement. 1.2 This Memorandum of Agreement has been executed and shall be recorded immediately following execution of the Agreement and this Memorandum of Agreement shall each be binding upon the Property in accordance with its terms. 2. Effect of Agreement. The Agreement imposes certain obligalions, agreements, covenants, conditions and restrictions with respect to the Property and Developer's, development, use, operation and ultimate disposition thereof, that run with the land as further set forth below, including without limitation: 202435.3 Attachment No. 6-1 Jund3.2005 (a) the covenants for the development and sale of Affordable Housing Units contained in Section 3 of the Agreement; that remain in effect until escrow closes on all such units. (b) certain restrictions on assignment of the Agreement contained in Section 6 of the Agreement that remain in effect until all of the Affordable Housing Units on the Property are sold to Owner/Occupiers. (c) the non-discrimination covenants contained in Section 3.4 of the Agreement that remain in effect in perpetuity. 3. Agreement and Memorandum of Agreement Run With the Land. The Agreement and this Memorandum of Agreement, including, without limitation, the provisions recited and set forth above, and all other obligations, agreements, covenants, conditions, restrictions, set forth in the Agreement and this Memorandum of Agreement, are hereby agreed by the Developer and the City to be covenants running with the land and enforceable as equitable servitudes against the Property, and are hereby declared to be and shall be binding upon the Property and the Developer and the successors and assigns of the Developer owning all or any portion of the Property for the benefit of the City, except that a City-approved written assignment to a Builder/Purchaser that is recorded against the portion of the Property purchased by the Builder/Purchaser shall relieve Developer of its obligations under the Agreement for that portion of the Property. 4. Acknowledgement and Assumption by Developer. The Developer hereby acknowledges and assumes all responsibilities placed upon the Developer under the terms of the Agreement. 5. Public Documents. The documents constituting the Agreement are public documents and may be reviewed at the official offices of the City. 6. Interpretations; Notice. This Memorandum of Agreement is prepared for recordation and notice purposes only and in no way modifies the terms, conditions, provisions and covenants of the Agreement. In the event of any inconsistency between the terms, conditions, provisions and covenants of the Agreement and this Memorandum of Agreement, the Agreement shall prevail. 7. Attachments. Attachment No. I to this Memorandum of Agreement is hereby incorporated by this reference as though fully set forth in this Section. 202435.3 Attachment No. 6-2 Ju", 13. 2005 ) IN WITNESS WHEREOF, the City and the Developer have signed this Memorandum of Agreement as of the date first set forth above. "CITY" CITY OF TUSTIN Dated: By: Lou Bone, Mayor ATTEST: By: Pam Stoker, City Clerk APPROVED AS TO FORM: WOODRUFF, SPRADLIN & SMART By: Lois E. Jeffrey, City Attorney Dated: By: "DEVELOPER" MOFFETI MEADOWS PARTNERS, LLC, a Delaware lirnited liability company By: Marble Mountain Partners, LLC, its sole member, a Delaware limited liability company, its administrative member By: Leonar Homes of California, mc., a California corporation, its managing member ?~J ~ ,-,( 'chard Knowland, ice President By t.. ~ 7fv",...~ to , Assistan(Secretary Dated: APPROVED AS TO FORM: ) "-~y: "'William Devine, Legal Counsel "--... ZO2435') Attachment No. 6-3 J_6,2005 ATTACHMENT NO.1 LEGAL DESCRIPTION 202435.3 Attachment No. 6-4 ~,13.2005 I. 2. 3. 202435.3 SCHEDULE A THE ESTATE OR INTEREST IN THE LAND HEREINAFTER DESCRIBED OR REFERRED TO COVERED BY THIS REPORT IS: A FEE AS TO PARCEL I. AN EASEMENT MORE FULLY DESCRIBED BELOW AS TO PARCEL 2. TITLE TO SAID ESTATE OR INTEREST AT THE DATE HEREOF IS VESTED IN: MOFFETI MEADOWS PARTNERS, LLc., A DELAWARE LIMITED LIABILITY COMPANY THE LAND REFERRED TO IN THIS REPORT IS SITUATED IN THE STATE OF CALIFORNIA, COUNTY OF ORANGE, AND IS DESCRIBED AS FOLLOWS: SEE EXHIBIT "A" ATTACHED HEREWITH AND MADE A PART HEREOF 2 luno 13. 2005 EXHIBIT "A" (LEGAL DESCRIPTION) PARCEL I: IN THE CITY OF TUSTIN, COUNTY OF ORANGE, STATE OF CALIFORNIA, BEfNG THOSE PORTIONS OF LOTS 68, 69, 70, 75, 76 AND 77, OF BLOCKS 10 AND 46 OF IRVINE'S SUBDlVfSION AS SHOWN ON THE MAP FILED IN BOOK I, PAGE 88 OF MISCELLANEOUS RECORD MAPS, AND AS SHOWN ON A MAP FILED IN BOOK 165 PAGES 31 THROUGH 39 INCLUSIVE OF RECORDS OF SURVEY, ALL OF THE RECORDS OF SAID COUNTY, DESCRIBED AS FOLLOWS: FOR THE PURPOSE OF THIS DESCRIPTION THE FOLLOWING CONTROL LINES ARE HEREBY ESTABLISHED: CONTROL LINE "A" BEGINNING AT THE INTERSECTION OF THE CENTERLINE OF RED HILL AVENUE WITH THE CENTERLINE OF VALENCIA AVENUE AS SHOWN ON SAID RECORD OF SURVEY, THE CENTERLINE OF RED HILL AVENUE HAVING A BEARING OF NORTH 40 37' 39" EAST BETWEEN VALENCIA AVENUE AND WARNER AVENUE; THENCE SOUTH 49 20' 07" EAST 106.23 FEET TO THE BEGINNING OF A CURVE CONCAVE SOUTHWESTERLY HAVING A RADIUS OF 1400.04 FEET; THENCE SOUTHEASTERLY ALONG SAID CURVE 134.49 FEET THROUGH A CENTRAL ANGLE OF 5 30' 14"; THENCE SOUTH 43 49' 53" EAST 101.77 FEET TO THE BEGINNING OF A CURVE CONCAVE NORTHEASTERLY HAVING A RADIUS OF 1400.04 FEET; THENCE SOUTHEASTERLY ALONG SAID CURVE 134.40 FEET THROUGH A CENTRAL ANGLE OF OS 30' 01"; THENCE SOUTH 49 19' 54" EAST 586.96 FEET TO THE BEGINNING OF A CURVE CONCAVE NORTHEASTERLY HAVING A RADIUS OF 1400.04 FEET; THENCE SOUTHEASTERLY AND EASTERLY ALONG SAID CURVE 733.69 FEET THROUGH A CENTRAL ANGLE OF 3001' 33"; THENCE SOUTH 79 21' 27" EAST 309.99 FEET TO A POINT HEREAFTER TO BE REFERRED TO AS POINT "A"; THENCE CONTINUING SOUTH 79 21' 27" EAST 1047.64 FEET TO THE BEGINNING OF A CURVE CONCAVE SOUTHWESTERLY HAVING A RADIUS OF 1400.04 FEET; THENCE EASTERLY AND SOUTHEASTERLY ALONG SAID CURVE 733.34 FEET THROUGH A CENTRAL ANGLE OF 30 00' 42"; THENCE SOUTH 49 20' 45" EAST 1500.61 FEET TO THE TERMINUS OF THE HEREIN DESCRIBED CONTROL LINE "A". CONTROL LINE "D" BEGINNING AT THE HEREINABOVE DESCRIBED POINT °A"; THENCE NORTH 1538' 31" EAST 159.80 FEET TO THE BEGINNING OF A CURVE CONCAVE WESTERLY HAVING A RADIUS OF 600.02 FEET; THENCE NORTHERLY ALONG SAID CURVE 116.30 FEET THROUGH A CENTRAL ANGLE OF II 06' 21 "; THENCE NORTH 04 32' 10" EAST 747.07 FEET TO THE BEGINNING OF A CURVE CONCAVE SOUTHEASTERLY HAVING A RADIUS OF 251.01 FEET; THENCE NORTHERLY AND NORTHEASTERLY ALONG SAID CURVE 157.51 FEET THROUGH A CENTRAL ANGLE OF 36 05' 52"; THENCE NORTH 40 38' 02" EAST 667.92 FEET TO THE TERMINUS OF THE HEREIN DESCRIBED CONTROL LINE. PARCEL TUSTIN VILLAS BEGINNING AT THE MOST NORTHERLY TERMINUS OF PARCEL I-H-3 AS DESCRIBED IN A DOCUMENT RECORDED MAY 14, 2002 AS INSTRUMENT NO. 20020404598 OF OFFICIAL RECORDS OF SAID COUNTY, SAID POINT BEING ON A CURVE CONCAVE SOUTHWESTERLY, LYING 46 FEET NORTHEASTERLY OF SAID CONTROL LINE "A" AND BEING DESCRIBED AS "A RADIUS OF 1446.04 FEET, LENGTH OF 197.79 FEET AND A CENTRAL ANGLE OF 7 SO' 13", A RADIAL LINE TO SAID POINT BEARS NORTH 32 49' 02" EAST; THENCE NORTHWESTERLY AND WESTERLY ALONG SAID CONCENTRIC CURVE 559.65 FEET THROUGH A CENTRAL ANGLE OF 22 10' 29" TO A LINE PARALLEL WITH AND 46.00 NORTHERLY OF SAID CONTROL LINE "A"; THENCE NORTH 79 21' 27" WEST 286.09 FEET ALONG SAID PARALLEL LINE TO THE BEGINNING OF A CURVE CONCAVE NORTHERLY 20243'.3 Juno 13.2005 HAVING A RADIUS OF 3743.60 FEET; THENCE LEAVING SAID PARALLEL LINE WESTERLY 149.73 FEET ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 217' 30" TO THE BEGINNING OF A REVERSE CURVE CONCAVE SOUTHERLY HAVfNG A RADIUS OF 3759.60 FEET, A RADIAL LINE TO SAID BEGINNING OF REVERSE BEARS NORTH 12 56' 03" EAST; THENCE WESTERLY 150.37 FEET ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 2 IT 30" TO A LINE THAT IS PARALLEL WITH AND 52.00 FEET NORTHERLY OF SAID CONTROL LINE "A"; THENCE ALONG SAID PARALLEL LINE NORTH 79 21' 27" WEST 381.34 FEET; THENCE LEAVING SAID PARALLEL LINE NORTH 35 59' 46" WEST 34.19 FEET; THENCE NORTH 7 15' 25" EAST 173.64 FEET TO THE BEGINNING OF A CURVE CONCAVE WESTERLY HAVING A RADIUS OF 630.02 FEET, SAID CURVE BEING CONCENTRIC WITH AND 30.00 FEET EASTERLY OF SAID CONTROL LINE "D"; THENCE PARALLEL AND CONCENTRIC WITH SAID CONTROL LINE "D" THE FOLLOWING FOUR (4) COURSES: I) NORTHERLY ALONG SAID CURVE 29.92 FEET THROUGH A CENTRAL ANGLE OF 02 43' 15"; 2) NORTH 04 32' 10" EAST 746.96 FEET TO THE BEGINNING OF A CURVE CONCAVE SOUTHEASTERLY HAVING A RADIUS OF 220.01 FEET; 3) NORTHERLY ALONG SAID CURVE 138.61 FEET THROUGH A CENTRAL ANGLE OF 36 OS' 52"; 4) NORTH 40 38' 02" EAST 5.77 FEET TO THE SOUTHEASTERLY PROLONGATION OF THE SOUTHWESTERLY BOUNDARY OF THE PARCEL MAP FILED IN BOOK 64, PAGE 39 OF PARCEL MAPS, RECORDS OF SAID COUNTY: THENCE LEAVING SAID PARALLEL AND CONCENTRIC LINE AND ALONG SAID PROLONGATION NORTH 49 21' 28" WEST 60.01 FEET TO A LINE THAT IS PARALLEL WITH AND 30.00 FEET NORTHWESTERLY OF SAID CONTROL LINES "D"; THENCE PARALLEL WITH SAID CONTROL LINE "D" NORTH 40 38' 02" EAST 115.80 FEET; THENCE NORTH 49 19' 53" WEST 64.56 FEET TO THE SOUTHEASTERLY LINE OF THAT CERTAIN REAL PROPERTY AS SHOWN SAID PARCEL MAP; THENCE NORTHEASTERLY ALONG SAID SOUTHEASTERLY LINE NORTH 40 38' 39" EAST, 1034.69 FEET TO THE SOUTHWESTERLY CORNER OF PARCEL I-H-17 AS DESCRIBED IN SAID INSTRUMENT NO. 20020404598, OF OFFICIAL RECORDS; THENCE ALONG THE SOUTHWESTERLY LINE OF SAID PARCEL I-H-17 THE FOLLOWING TWO (2) COURSES: ' I) SOUTH 49 20' 45" EAST 1780.30 FEET; 2) SOUTH 48 23' 27" EAST 600.36 FEET TO THE NORTHWESTERLY CORNER OF PARCEL I-H-6 AS DESCRIBED IN SAID INSTRUMENT NO. 20020404598 OF OFFICIAL RECORDS, SAID CORNER BEING THE BEGINNING OF A CURVE CONCAVE TO THE SOUTHWEST HAVING A RADIUS OF 42.00 FEET; THENCE ALONG THE SOUTHWESTERLY LINE OF SAID PARCEL [-H-6 THE FOLLOWING FOUR (4) COURSES: I) SOUTHEASTERLY 5.28 FEET ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 0712' 19"; 2) SOUTH 41 II' OS" EAST 77.41 FEET TO THE BEGINNING OF A CURVE CONCAVE TO THE NORTHEAST HAVING A RADIUS OF 58.00 FEET; 3) SOUTHEASTERLY 8.26 FEET ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 08 09' 37"; 4) SOUTH 49 20 45" EAST 190.11 FEET TO THE NORTHWESTERLY LINE OF PARCEL I-H-5 AS DESCRIBED IN SAID INSTRUMENT NO. 20020404598 OF OFFICIAL RECORDS; THENCE ALONG THE NORTHWESTERLY AND SOUTHWESTERLY LINES OF SAID PARCEL I -H-5 THE FOLLOWING TWO (2) COURSES: I) SOUTH 40 29' 47" WEST 240.60 FEET; 202435.3 4 J""013.2005 2) SOUTH 49 20' 44" EAST 230.85 FEET TO A POINT ON THE NORTHWESTERLY LINE OF PARCEL I-H-4 AS DESCRIBED IN SAID INSTRUMENT NO. 20020404598 OF OFFICIAL RECORDS, SAID POINT BEING ON A CURVE CONCAVE SOUTHEASTERLY HAVING A RADIUS OF 1446.04 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 53 48' 08" WEST; THENCE ALONG THE NORTHWESTERLY LINE OF SAID PARCEL I-H-4 THE FOLLOWING TEN (10) COURSES; 1) SOUTHWESTERLY ALONG SAID CURVE 182.42 FEET THROUGH A CENTRAL ANGLE OF 7 13' 40"; 2) SOUTH 28 58' 13" WEST 302.71 FEET TO THE BEGINNING OF A CURVE CONCAVE NORTHWESTERLY HAVING A RADIUS OF 960.03 FEET; 3) SOUTHWESTERLY ALONG SAID CURVE 21.12 FEET THROUGH A CENTRAL ANGLE OF 01 15' 37"; 4) SOUTH 30 13' SO" WEST 98.66 FEET TO THE BEGINNING OF A CURVE CONCAVE NORTHWESTERLY HAVING A RADIUS OF 2074.36 FEET; 5) SOUTHWESTERLY ALONG SAID CURVE 174.88 FEET THROUGH A CENTRAL ANGLE OF 04 49' 50: TO THE BEGINNING OF A COMPOUND CURVE CONCAVE NORTHWESTERLY HAVING A RADIUS OF 1348.04 FEET, A RADIAL LINE TO SAID BEGINNING OF CURVE BEARS SOUTH 54 56' 20" EAST; 6) SOUTHWESTERLY ALONG SAID CURVE 54.83 FEET THROUGH A CENTRAL ANGLE OF 02 19' 49" TO THE BEGINNING OF A COMPOUND CURVE CONCAVE NORTHWESTERLY HAVING A RADIUS OF 143.00 FEET, A RADIAL LINE TO SAID BEGINNING OF CURVE BEARS SOUTH 52 36' 31" EAST; 7) SOUTHWESTERLY ALONG SAID CURVE 33.43 FEET THROUGH A CENTRAL ANGLE OF 1323' 34"; 8) SOUTH 50 47' 03" WEST 30.34 FEET TO THE BEGINNING OF A CURVE CONCAVE SOUTHEASTERLY HAVING A RADIUS OF 159.16 FEET; 9) SOUTHWESTERLY ALONG SAID CURVE 28.14 FEET THROUGH A CENTRAL ANGLE OF 1007' 48"; 10) SOUTH 40 39' 15" WEST 184.90 FEET TO THE NORTHEASTERLY LINE OF SAID PARCEL I-H-3; THENCE ALONG THE NORTHEASTERLY LINE OF SAID PARCEL I-H-3 THE FOLLOWING 14 COURSES: I) SOUTH 85 39' 13" WEST 38.18': 2) NORTH 49-20-45 WEST 50.00 FEET TO THE BEGINNING OF A CURVE CONCAVE NORTHEASTERLY HAVING A RADIUS OF 42.00 FEET; 3) NORTHWESTERLY ALONG SAID CURVE 10.38 FEET THROUGH A CENTRAL ANGLE OF 1409' 13": 4) NORTH 35 II' 32" WEST 36.66 FEET TO THE BEGINNING OF A CURVE CONCAVE SOUTHWESTERLY HAVING A RADIUS OF 58.00 FEET; 5) NORTHWESTERLY ALONG SAID CURVE 14.33 FEET THROUGH A CENTRAL ANGLE OF 1409' 13"; 6) NORTH 49 20 45" WEST 60.00 FEET TO THE BEGINNING OF A CURVE CONCAVE SOUTHWESTERLY HAVING A RADIUS OF 58.00 FEET: 7) NORTHWESTERLY ALONG SAID CURVE 14.33 FEET THROUGH A CENTRAL ANGLE OF 1409' 13"; 8) NORTH 63 29' 58" WEST 36.66 FEET TO THE BEGINNING OF A CURVE CONCAVE NORTHEASTERLY HAVING A RADIUS OF 42.00 FEET; 202435.3 1""013.2005 9) NORTHWESTERLY ALONG SAID CURVE 10.38 FEET THROUGH A CENTRAL ANGLE OF 1409' 13"; 10) NORTH 49 20' 45" WEST 106.00 FEET TO THE BEGINNING OF A CURVE CONCAVE SOUTHWESTERLY HAVING A RADIUS OF 3759.60 FEET; II) NORTHWESTERLY ALONG SAID CURVE 150.35 FEET THROUGH A CENTRAL ANGLE OF 217' 29" TO THE BEGINNING OF A REVERSE CURVE CONCAVE NORTHEASTERLY HAVING A RADIUS OF 3743.60 FEET; A RADIAL LINE TO SAID POINT BEARS SOUTH 38 21' 46" WEST; 12) NORTHWESTERLY ALONG SAID CURVE 149.72 FEET THROUGH A CENTRAL ANGLE OF 217' 29"; 13) NORTH 49 20' 45" WEST 39.60 FEET TO THE BEGINNING OF A CURVE CONCAVE SOUTHWESTERLY HAVING A RADIUS OF 1446.04 FEET; 14) NORTHWESTERLY ALONG SAID CURVE 197.79 FEET THROUGH A CENTRAL ANGLE OF 7 50' 13" TO THE POINT OF BEGINNfNG. EXCEPTING THEREFROM EXCEPTION IRP-16 BEGINNING AT THE MOST NORTHERLY TERMINUS OF PARCEL I-H-3 AS DESCRIBED IN A DOCUMENT RECORDED MAY 14, 2002 AS fNSTRUMENT NO. 20020404598 OF OFFICIAL RECORDS OF SAID COUNTY, SID POINT BEING ON A CURVE CONCAVE SOUTHWESTERLY, LYING 46 FEET NORTHEASTERLY OF SAID CONTROL LINE "A" AND BEING DESCRIBED AS "A RADIUS OF 1446.04 FEET, LENGTH OF 197.79 FEET AND A CENTRAL ANGLE OF 750' 13", A RADIAL LINE TO SAID POINT BEARS NORTH 32 49' 02" EAST; THENCE NORTHWESTERLY AND ALONG SAID CONCENTRIC CURVE 207.96 FEET THROUGH A CENTRAL ANGLE OF 8 14' 24"; THENCE LEAVING SAID CONCENTRIC CURVE NORTH 24 34' 38" EAST 312.20 FEET TO THE TRUE POINT OF BEGINNING; THENCE NORTH 2 37' 41" EAST 309.90 FEET; THENCE NORTH 56 16' 38" WEST 114.65 FEET; THENCE NORTH 83 50' 08" WEST 148.04 FEET; THENCE SOUTH 2 56' 49" EAST 400.34 FEET; THENCE NORTH 87 03' II" EAST 208.02 FEET TO THE TRUE POINT OF BEGINNING. EXCEPTION UST-268 BEGINNING AT THE MOST NORTHERLY TERMINUS OF PARCEL I-H-3 AS DESCRIBED IN A DOCUMENT RECORDED MAY 14, 2002 AS INSTRUMENT NO. 20020404598 OF OFFICIAL RECORDS OF SAID COUNTY, SAID POINT BEING ON A CURVE CONCAVE SOUTHWESTERLY, LYING 46 FEET NORTHEASTERLY OF SAID CONTROL LINE "A" AND BEING DESCRIBED AS °A RADIUS OF 1446.04 FEET, LENGTH OF 197.79 FEET AND A CENTRAL ANGLE OF 750' 13", A RADIAL LINE TO SAID POINT BEARS NORTH 32 49' 02" EAST; THENCE NORTHWESTERLY AND WESTERLY ALONG SAID CONCENTRIC CURVE 559.65 FEET THROUGH A CENTRAL ANGLE OF 2210' 29" TO A LINE PARALLEL WITH AND 46.00 FEET NORTHERLY OF SAID CONTROL LINE "A"; THENCE NORTH 79 21' 27" WEST 286.09 FEET ALONG SAID PARALLEL LINE TO THE BEGINNING OF A CURVE CONCAVE NORTHERLY HAVING A RADIUS OF 3743.60 FEET; THENCE LEAVING SAID PARALLEL LINE WESTERLY 28.26 FEET ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 0 25' 27" TO THE TRUE POINT OF BEGINNING; THENCE CONTINUING WESTERLY ALONG SAID CURVE 121.47 FEET THROUGH A CENTRAL ANGLE OF 1 51' 33" TO THE BEGINNING OF A REVERSE CURVE CONCAVE SOUTHERLY HAVING A RADIUS OF 3759.60 FEET, A RADIAL LINE TO SAID BEGINNING OF REVERSE CURVE BEARS NORTH 1256' 03" EAST; THENCE WESTERLY 150.37 FEET ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 217' 30" TO A LINE THAT IS PARALLEL WITH AND 52.00 FEET NORTHERLY OF SAID CONTROL LINE "A"; THENCE ALONG SAID PARALLEL LINE NORTH 79 21' 27" WEST 127.17 FEET; THENCE LEAVING SAID PARALLEL LINE NORTH 4 32' 10" EAST 207.34 FEET; THENCE SOUTH 8250' 40" EAST 407.32 FEET; THENCE SOUTH 7 09' 19" WEST 237.27 FEET TO THE TRUE POINT OF BEGINNING. 202435.3 6 Jun, 13.2oo' EXCEPTION IRP-I3S BEGINNING AT THE MOST NORTHERLY TERMINUS OF PARCEL I-H-3 AS DESCRIBED IN A DOCUMENT RECORDED MAY 14, 2002 AS INSTRUMENT NO. 20020404598 OF OFFICIAL RECORDS OF SAID COUNTY, SAID POINT BEING ON A CURVE CONCAVE SOUTHWESTERLY, LYING 46 FEET NORTHEASTERLY OF SAID CONTROL LINE "A" AND BEING DESCRIBED AS "A RADIUS OF 1446.04 FEET, LENGTH OF 197.79 FEET AND A CENTRAL ANGLE OF 7 50' 13", A RADIAL LINE TO SAID POINT BEARS NORTH 32 49' 02" EAST; THENCE NORTHWESTERLY AND WESTERLY ALONG SAID CONCENTRIC CURVE 559.65 FEET THROUGH CENTRAL ANGLE 22 10' 29" TO A LINE PARALLEL WITH AND 46.00 NORTHERLY OF SAID CONTROL LINE "A"; THENCE NORTH 79 21' 27" WEST 286.09 FEET ALONG SAID PARALLEL LINE TO THE BEGINNING OF A CURVE CONCAVE NORTHERLY HAVING A RADIUS OF 3743.60 FEET; THENCE LEAVING SAID PARALLEL LINE WESTERLY 149.73 FEET ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 2 17'30" TO THE BEGINNING OF A REVERSE CURVE CONCAVE SOUTHERLY HAVING A RADIUS OF 3759 FEET, A RADIAL LINE TO SAID BEGINNING OF REVERSE CURVE BEARS NORTH 12 56' 03" EAST; THENCE WESTERLY 150.37 FEET ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 2 17' 30" TO A LINE THAT IS PARALLEL WITH AND 52.00 FEET NORTHERLY OF SAID CONTROL LINE' A"; THENCE ALONG SAID PARALLEL LINE NORTH 79 21' 27" WEST 127.17 FEET TO THE TRUE POINT OF BEGINNING; THENCE CONTINUING NORTH 79 21' 27" WEST 254.17 FEET; THENCE LEAVING SAID PARALLEL LINE NORTH 3559' 46" WEST 34.19 FEET; THENCE NORTH 07 IS' 25" EAST 173.64 FEET TO THE BEGINNING OF A CURVE CONCAVE WESTERLY HAVING A RADIUS OF 630.02 FEET, SAID CURVE BEING CONCENTRIC WITH AND 30.00 FEET EASTERLY OF SAID CONTROL LINE 'D"; THENCE PARALLEL AND CONCENTRIC WITH SAID CONTROL LINE "D" THE FOLLOWING TWO (2) COURSE: 1) NORTHERLY ALONG SAID CURVE 29.92 FEET THROUGH A CENTRAL ANGLE OF 02 43' 15"; 2) NORTH 04 32' 10" EAST 365.06 FEET; THENCE LEAVING SAID PARALLEL LINE SOUTH 85 27' 50" EAST 266.00 FEET; THENCE SOUTH 4 32' 10" WEST 621.44 FEET TO THE TRUE POINT OF BEGINNING. EXCEPTION IRP-I3W BEGINNING AT THE MOST NORTHERLY TERMINUS OF PARCEL I-H-3 AS DESCRIBED IN A DOCUMENT RECORDED MAY 14,2002 AS INSTRUMENT NO. 20020404598 OF OFFICIAL RECORDS OF SAID COUNTY, SAID POINT BEING ON A CURVE CONCAVE SOUTHWESTERLY, LYING 46 FEET NORTHEASTERLY OF SAID CONTROL LINE "A" AND BEING DESCRIBED AS "A RADIUS OF 1446.04 FEET, LENGTH OF 197.79 FEET AND A CENTRAL ANGLE OF 7 50' 13", A RADIAL LINE TO SAID POINT BEARS NORTH 32 49' 02" EAST; THENCE NORTHWESTERLY AND WESTERLY ALONG SAID CONCENTRIC CURVE 559.65 FEET THROUGH A CENTRAL ANGLE OF 22 10' 29" TO A LINE PARALLEL WITH AND 46.00 FEET NORTHERLY OF SAID CONTROL LINE "A"; THENCE NORTH 79 21' 27" WEST 286:09 FEET ALONG SAID PARALLEL LINE TO THE BEGINNING OF A CURVE CONCAVE NORTHERLY HAVING A RADIUS OF 3743.60 FEET; THENCE LEAVING SAID PARALLEL LINE WESTERLY 149.73 FEET ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 2 17' 30" TO THE BEGINNING OF A REVERSE CURVE CONCAVE SOUTHERLY HAVING A RADIUS OF 3759.60 FEET, A RADIAL LINE TO SAID BEGINNING OF REVERSE CURVE BEARS NORTH 1256' 03" EAST; THENCE WESTERLY 150.37 FEET ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 2 17' 30" TO A LINE THAT IS PARALLEL WITH AND 52.00 FEET NORTHERLY OF SAID CONTROL LINE "A"; THENCE ALONG SAID PARALLEL LINE NORTH 79 21' 27" WEST 381.34 FEET: THENCE LEAVING SAID PARALLEL LINE NORTH 35 59' 46" WEST 34.19 FEET; THENCE NORTH 0715' 25" EAST 173.64 FEET TO THE BEGINNING OF A CURVE CONCAVE WESTERLY HAVING A RADIUS OF 630.02 FEET, SAID CURVE BEING CONCENTRIC WITH AND 30.00 FEET EASTERLY OF SAID CONTROL LINE "D"; THENCE PARALLEL AND CONCENTRIC WITH SID CONTROL LINE "D" THE FOLLOWING TWO (2) COURSES: I) NORTHERLY ALONG SAID CURVE 29.92 FEET THROUGH A CENTRAL ANGLE OF 02 43' 15"; 202435.3 100,13,2005 2) NORTH 04 32' 10" EAST 365.06 FEET TO THE TRUE POINT OF BEGINNING; THENCE LEAVfNG SAID PARALLEL LINE SOUTH 8527' 50" EAST 266.00 FEET; THENCE NORTH 4 32' 10" EAST 243.00 FEET; THENCE NORTH 85 27' 50" WEST 266.00 FEET TO A LINE 30.00 FEET EASTERLY OF SAID CONTROL LINE "D"; THENCE PARALLEL WITH SAID CONTROL LINE "D" SOUTH 4 32' 10" WEST 243.00 FEET TO THE TRUE POINT OF BEGINNING. PARCEL 2: NON-EXCLUSIVE EASEMENTS FOR INGRESS AND EGRESS OVER THAT CERTAIN LAND RESERVED BY THE UNITED SATES OF AMERICA, FOR SAID PURPOSES, IN THE DEED RECORDED MAY 14,2002 AS INSTRUMENT NO. 2002-0404595, IN THE OFFICIAL RECORDS OF ORANGE COUNTY, CALIFORNIA. 202435,3 lone 13,2oo5 (SEE ATTACHMENT NO.1 TO THE AGREEMENT) 202435.3 Attachmenl No. 6-5 Ju", 13.2005