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HomeMy WebLinkAboutRDA 03 HOUSING ASSIST 08-15-05 A G END A REPORT Agenda Item RDA 3 Reviewed: II ~ City Manager ~ Finance Director lL,tJ~ MEETING DATE: AUGUST 15, 2005 FROM: WILLIAM A. HUSTON, EXECUTIVE DIRECTOR REDEVELOPMENT AGENCY STAFF TO: SUBJECT: APPROVAL OF AMENDMENT NO.1 TO THE AFFORDABLE HOUSING ASSISTANCE AGREEMENT FOR THE REDEVELOPMENT OF PROPERTY LOCATED AT 16506 NEWPORT AVENUE SUMMARY Agency approval is requested for Amendment No.1 to the Affordable Housing Assistance Agreement for the residential condominium project identified as "Arbor Walk" being redeveloped adjacent to the South Central Project Area. RECOMMENDATION Staff recommends the Redevelopment Agency take the following action: Approve Amendment No.1 to the Affordable Housing Assistance Agreement between the Tustin Community Redevelopment Agency and Olson Urban Housing LLC for redevelopment of the property located at 16506 Newport Avenue. FISCAL IMPACT The Agency assistance for the residential condominium project is $969,960 from Redevelopment Agency Low and Moderate Income Housing Set-Aside Funds, as previously approved by the Agency. No additional funds are requested in Amendment No.1. BACKGROUND On February 17, 2004 the Agency approved an Affordable Housing Assistance Agreement ("Agreement") for the residential condominium project at the property located at 16506 Newport Avenue. The Agreement calls for the redevelopment of the former Tustin Block property with sixty-three (63) for-sale residential units. William Huston, Executive Director Approval of Amendment No.1 - 16506 Newport Avenue August 15, 2005 Page 2 The original Agreement requires the Olson Company to construct certain improvements to the property including ten (10) affordable housing units to be restricted for sale to and occupancy by Very Low and Moderate Income persons and families in compliance with all provisions of the Agreement and with all "Conditions of Approval" stipulated by the Tustin Planning Commission, the City Council and other applicable governmental agencies having jurisdiction. The affordable units consist of four (4) Very Low-Income units and six (6) Moderate Income units. Construction of the improvements is currently underway and sale activities for the affordable units have been initiated. The attached Amendment No.1 would make certain modifications to the Agreement, the Affordable Housing Covenants and related documents in order to conform to the lending requirements of Fannie Mae for sale of the loans to the secondary market and also consistent with the documents as approved by the City on the John Laing Homes and Lennar Homes projects. Also, like the Laing and Lennar documents, the modifications will expand the security for the Agency's housing assistance loans to reflect the difference between the fair market value of the properties and the affordable housing purchase price of the units. On December 1, 2003, the Tustin City Council adopted Resolution No. 03-130 approving a Mitigated Negative Declaration for the proposed Project including the proposed Housing Assistance Agreement as required by the California Environmental Quality Act. No further environmental clearance is needed for this recommended action. çØér~ Jim Draughon Redevelopment Program Manager S:IRDAIRDA reportlAgenda Report 08 16 2005 Olson Company Amendment No.1.doc Attachments AMENDMENT NO.1 TO AFFORDABLE HOUSING ASSISTANCE AGREEMENT By and Between the TUSTIN COMMUNITY REDEVELOPMENT AGENCY And OLSON URBAN HOUSING, LLC, ADELA WARE LIMITED LIABILITY COMPANY DATES: ,2005 2061051 AMENDMENT NO.1 TO AFFORDABLE HOUSING ASSISTANCE AGREEMENT TillS AMENDMENT NO.1 TO AFFORDABLE HOUSING ASSISTANT AGREEMENT ("Amendment No.1") is entered into as of , 2005 (the "Effective Date"), by and between the TUSTIN COMMUNITY REDEVELOPMENT AGENCY, a State agency organized for local purposes pursuant to Health and Safety Code Sections 33,000 et seq. (the "Agency") and OLSON URBAN HOUSING, LLC, a Delaware Limited Liability Company (the "Developer"), collectively, the Parties. RECITALS A. Agency and Developer entered into the Affordable Housing Assistant Agreement dated March 1, 2004, (the "Agreement") that provided for Developer to develop and sell four (4) housing units to Very Low Income Households and six (6) housing units to Moderate Income Households. B. The Agreement further provided for each prospective Owner-Occupier to execute an applicable Affordable Housing Promissory Note that will be secured by a recorded Affordable Housing Deed of Trust and to execute and record an Affordable Housing Covenant that, among other things, requires the Unit to remain affordable for a period of forty-five (45) years. C. The Parties desire to amend the subsection of the Agreement that describes the Affordable Housing Promissory Note and to replace Attachment Nos. 14 and 15 with new Attachment Nos. 14 and 15. NOW, THEREFORE, for valuable consideration, and the mutual promises and covenants herein, the parties agree as follows: AGREEMENT 1. Amendment of Subsection 12.1.2 Subsection 12.1.2 of the Agreement is hereby amended to read as follows: 12.1.2 The Developer shall only sell Affordable Housing Units to Owner- Occupiers. The Developer shall cause each prospective Owner- Occupier to execute an applicable Affordable Housing Promissory Note to Agency that will be secured by the Affordable Housing Deed of Trust. The forms of the Note and Deed of Trust are set forth in Attachments 11, 12 and 13. The Affordable Housing Promissory Note shall be in an amount not in excess of the difference between the market sales price of the Unit and the Affordable Housing Cost of such Unit. The Developer shall cause 2061051 the executed Affordable Housing Promissory Note to be delivered to Agency through escrow for the purchase of the Affordable Unit, and prior to Close of Escrow, the Affordable Housing Deed of Trust shall be subordinate in priority only to the monetary lien of a Purchase Money Deed of Trust also recorded at the time of close; 2. Replacement of Attachment Nos. 14 and 15 Attachment Nos. 14 and 15 are hereby replaced with Attachment Nos. 14 and 15, attached hereto as Exhibit "A" and incorporated herein by this reference. 3. No Other Changes to the Agreement. Except as amended herein, all other provisions of the Agreement remain in full force and effect. IN WITNESS WHEREOF, the Agency and the Developer have signed this Amendment No.1 as of the date first written above. AGENCY: TUSTIN COMMUNITY AGENCY REDEVELOPMENT Dated: William A. Huston, City Manager APPROVED AS TO FORM: By: Lois E. Jeffrey, Agency Counsel DEVELOPER: OLSON URBAN HOUSING, LLC, a Delaware limited liability company By: The Olson Company, a California corporation, its Managing Member By: Its: Dated: By: Its: 2 206105.1 EXHIBIT "A" 206105.1 ATTACHMENT NO. 14 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: Tustin Community Redevelopment Agency 300 Centennial Way Tustin, California Attention: Assistant Executive Director Exempt From Recording Fee Pursuant to Government Code Section 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 TUSTIN COMMUNITY REDEVELOPMENT AGENCY, a state agency activated by the Tustin City Council pursuant to Health and Safety Code Section 33000 et. seq. (together with its successors and assigns, the "Agency"). RECITALS 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 "Arbor Walk" (the "Project"). B. Pursuant to that certain Affordable Housing Assistance Agreement between the Agency and Olson Urban Housing, 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 Agency 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 Developer to sell the Unit to a Very Low Income Household, the Agency agreed to accept as part payment of amounts owed by the Developer to the Agency 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 Trust Deed. 206105.1 F. Pursuant to Health and Safety Code Section 33334.3, this Covenant shall run with the land and shall be enforceable, against Homeowner and successors in interest, by the Agency or the Community. G. This Covenant is intended to benefit the parcel of land owned by the City of Tustin located adjacent to the Project identified as the Fee Title to Newport Avenue granted to the City of Tustin, as shown on the Map recorded February 17, 2005, Instrument No. 2005000126492, Book 864, Pages 35-38 for Tract No. 16506, a subdivision of Parcell, of Parcel Map No. 84-1029, as shown on a map filed in Book 193, Pages 25 and 26 of Parcel Maps, in the Office of the County Recorder, County of Orange, State of California ("Benefited Property"), and the obligations and rights contained herein are intended to run with the land and to be subordinate to a "First Lien" (as defined herein). 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 Very Low Income Household shall mean a price that does not exceed the Affordable Monthly Housing Cost for a fanrily size appropriate for the Unit for Very Low Income Households. The 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 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 )(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 (50%) of the annual Orange County Median Income, adjusted for family 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 of the Affordable Housing Note is an amount not in excess of the difference between an amount to be identified as of the date of purchase and the Affordable Housing Cost for Very Low Income Households as of the date of purchase. "Affordable Housing Option Agreement" means the agreement attached hereto as Exhibit "E.", that provides an option to purchase in favor of the Agency 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. 2 206105.1 "Affordable Housing Trust Deed" 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 "D", and (c) the Affordable Housing Note. "Agency" means the Tustin Community Redevelopment Agency, and the Agency's successors and assigns. "City" means the City of Tustin, and the City's successors and assigns. "Community" means the City of Tustin (Health and Safety Code Section 33002) "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. "Developer" means Olson Urban Housing, LLC, a Delaware Limited Liability Company. "First Lien" means the lien of a purchase money Lender which secures the obligations of the Homeowner 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. "Household" means all persons residing in a Unit. "Legal Description" means the legal description of the 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. "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 "B". "Permitted Transfer" means any Transfer which is permitted pursuant to Section 4 hereof. 206105.1 "Permitted Transferee" means a Transferee from the Homeowner or from any Pennitted Transferee who acquires ownership of the Unit in full compliance with Section 4 hereof. "Prohibited Transfer" means any Transfer which is not permitted pursuant to Section 4 hereof. "Project" means that certain housing development in which the Unit is located. "Reimbursement Agreement" means the Reimbursement Agreement to be executed by the Homeowner in favor of the Agency, 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 "C". "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. 2. COVENANT RE SALES OF UNIT. Homeowner covenants and agrees that, during the Affordability Period, each subsequent resale of the Unit by the then-Homeowner thereof shall be to a Very Low Income Household, at an Affordable Housing Cost for Very Low 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 the Affordable Housing Trust Deed recorded concurrently with the recordation of this 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 ACCURA TEL Y 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 4 206105.1 SUCCESSOR, HEIR OR ASSIGN OF HOMEOWNER FURTHER ACKNOWLEDGES THAT AT ALL TIMES IN SETTING THE TRANSFER PRICE, THE PRIMARY OBJECTIVE OF THE AGENCY AND THIS COVENANT IS TO PROVIDE HOUSING TO VERY LOW 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 Agency that the financial and other information which Homeowner has provided to the Developer and the Agency 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, the Unit, and any interest therein, shall not be Transferred by the Homeowner except with the express written consent of the Agency, which consent shall be given only if the Transfer is in strict compliance with the provisions of this Section 4. Each Homeowner understands that appropriate transfers will be permitted and neither the Agency 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 Trust Deed. 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 Agency by delivering a Notice of Intent to Transfer to the Agency. Agency 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 Agency. The Homeowner shall send the Notice ofIntent to Transfer to the Agency at the address set forth in Section 22 hereof. The Notice of Intent to Transfer shall identify the proposed Transferee, certify that to the best knowledge of the Homeowner 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. ii. Qualification of Proposed Transferee. The proposed Transferee shall provide and certify to the Agency such information as the Agency may request related to the proposed Transfer in the form provided by the Agency, 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 206105.1 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 Agency an agreement by the Transferee to assume the obligations of a Homeowner of the Unit as set forth in this Covenant in such form as the Agency may request. iii. Certificates from Parties. The Homeowner and proposed Transferee each shall certify in writing, in a form acceptable to the Agency, 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 Agency and that all consideration delivered by the proposed Transferee to Homeowner has been fully disclosed to the Agency. 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 Agency for its approval of the Transfer, the Agency 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 Trust Deed, (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 Trust Deed, 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 Trust Deed, 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 Affordable Housing Note, and interest shall begin accruing on the 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 Trust Deed, the Affordable Housing Option Agreement and the Reimbursement Agreement shall remain in full force and effect. vi. The Agency's Title Policy. The Agency 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 Trust Deed as a monetary lien of second priority, i.e., subordinate in priority among monetary liens only to the monetary lien of any First Lien 6 206105.1 recorded at the time of sale which First Lien shall secure an amount not in excess of the then Affordable Housing Cost of the 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 Agency shall not require a new title policy, nor shall the Agency require reimbursement for its costs. b. Notice of Prohibited Transfer. Within fifteen (15) calendar days after the receipt by the Agency of the notices, documents and agreements referred to in Section 4(a), the Agency 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 of a spouse, or that are otherwise required to be permitted under applicable Federal law, shall not be deemed by the Agency 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 Homeowner shall specify why the Transfer is a Prohibited Transfer. If the violation is not corrected to the satisfaction of the Agency within ten (10) calendar days after the date of the notice, or within such further time as the Agency determines is necessary to correct the violation, the Agency may declare a Default under this Covenant. Upon the declaration of a Default, the Agency 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 the Agency 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 Agency may reasonably request. d. Financings on Transfer. 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 date of the financing, and (iii) must be in compliance with the Affordable Housing Trust Deed. 5. ENCUMBRANCES. a. Subordination. The provisions of this Covenant, the Affordable Housing Note, the Affordable Housing Trust Deed, 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 this Covenant, the Affordable Housing Note, the Affordable Housing Trust Deed, the Affordable Housing Option Agreement and the Reimbursement Agreement are subordinate to an appropriate First Lien, said fact shall not in any manner modify the obligations from time to time existing between the Agency and the Owner. 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, the Affordable Housing Note, the Affordable Housing Trust Deed, the Affordable Housing Option Agreement and the Reimbursement Agreement 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 7 206105.1 the Owner. The Agency shall execute such written instruments for the subordination of its rights under this Covenant, the Affordable Housing Note, the Affordable Housing Trust Deed, the Affordable Housing Option Agreement and the Reimbursement Agreement, as may reasonably be requested by the Lender. b. Request for Notice of Default. The Agency 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 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 Trust Deed 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 form attached hereto as Exhibit "D", which provides that the Agency 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 Agency 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 Trust Deed. 7. OPTION TO ACQUIRE UNIT UPON DEFAULT OF OBLIGATIONS UNDER THIS COVENANT. At the time of the close of escrow with respect to any Transfer, each Homeowner shall enter into an Option Agreement, in the form attached hereto as Exhibit "E", which grants to Agency 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. NONDISCRIMINATION 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. 206105.1 b. RedeveloDment 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 ofrace, 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." 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 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, 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 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. The Agency may grant a temporary waiver of the above requirements for good 9 206105.1 cause, in the Agency's sole and absolute discretion. Examples of situations which may result in the grant of a temporary waiver include: (i) rental by Homeowner where necessary to accommodate a mandatory job transfer required by Homeowner's employer (not including Homeowner, if Homeowner is self-employed); (ii) rental necessitated by a medical or financial emergency, proof of which emergency has been delivered to the Agency, and (iii) other situations which constitute a "hardship" situation consistent with the intentions of this Covenant and the goal of the Agency to have affordable Homeowner occupied homes in the Project. 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 Agency an affidavit of occupancy in the form provided by the Agency. 12. EFFECT OF VIOLA nON 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 Agency, its successors and assigns and (b) for the benefit of the property described on Exhibit "A" to this Covenant, and the Agency, 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 Agency 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 herein shall run in favor of the Agency, without regard to whether the Agency has been, remains or is a Homeowner of any land or interest therein in the Unit or in the Project Area. The Agency 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 Agency 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 Agency shall not constitute a waiver of any Default, nor shall it change the time of Default. c. Agency's Remedies. Upon the declaration of a Default, the Agency 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 Agency's rights under the Affordable Housing Trust Deed, including, without limitation, foreclosure of the Unit, and (iii) pursue such other rights and remedies permitted under applicable law. 10 206105.1 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 Agency. 13. INDEMNIFICATION. Homeowner shall defend, indemnify and hold harmless the Agency 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 Agency 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 Agency 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 Agency within thirty (30) days of the effective date of this Covenant, and Homeowner shall annually transmit to the Agency 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 Agency 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 Agency. 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 Agency 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 Agency. Nothing in this Covenant is intended to be, nor shall it be deemed to be, a waiver of any Agency 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. 11 206105.1 19. AMENDMENT OF COVENANT. No modification, rescission, waiver, release or amendment of any provision of this Covenant shaH be made except by a written agreement executed by Homeowner and the Agency. 20. AGENCY MAY ASSIGN. The Agency may, at its option, assign its rights hereunder without obtaining the consent of the Homeowner. 21. HOMEOWNER ASSIGNMENT PROHIBITED. In no event shaH Homeowner assign or transfer any portion of this Covenant without the prior express written consent of the Agency, which consent shall be given by the Agency only in the event that the Agency determines the Transfer fully complies with Section 4. This section shall not affect or diminish the Agency'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 Agency: Tustin Community Redevelopment Agency 300 Centennial Way Tustin, California 92780 Attention: Executive Director and Attention: Assistant Executive Director 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 (coHectively 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 12 206105.1 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) gamishment, 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 Agency and the Homeowner concerning all or any part of the subject matter of this Covenant. 25. SEVERABILITY. So long as the material bargain of the 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 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. 13 206105.1 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 of the date set forth above. HOMEOWNER: By: Printed Name: By: Printed Name: AGENCY: TUSTIN COMMUNITY REDEVELOPMENT AGENCY, a State agency activated by the Tustin City Council pursuant to Health and Safety Code Section 33000 et seq. By: , Executive Director APPROVED AS TO FORM AGENCY LEGAL COUNSEL 14 206105.1 COUNTY OF ) ) ss. ) STATE OF CALIFORNIA On , before me, Notary Public, (Print Name of Notary Public) personally appeared D personally known to me -or- proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in hislher/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. D :SIgnature VI Notary 206105.1 ATTACHMENT NO. 15 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: Tustin Community Redevelopment Agency 300 Centennial Way Tustin, California Attention: Assistant Executive Director Exempt From Recording Fee Pursuant to Government Code Section 273S3 AFFORDABLE HOUSING COVENANT (Moderate Income) TillS AFFORDABLE HOUSING COVENANT (this "Covenant") is made as of 200_, by (the "Homeowner") in favor of the TUSTIN COMMUNITY REDEVELOPMENT AGENCY, a state agency activated by the Tustin City Council pursuant to Health and Safety Code Section 33000 et. seq. (together with its successors and assigns, the "Agency"). 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 "Arbor Walk" (the "Project"). B. Pursuant to the Affordable Housing Assistant Agreement between the Agency and Olson Urban Housing, LLC, a Delaware lirrrited liability company (the "Developer"), the Developer is required to sell one unit in the Project to a "Moderate Income Household", 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 Agency 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 Moderate Income Household. E. In order to enable Developer to sell the Unit to a Moderate Income Household, the Agency agreed to accept as part payment of amounts owed by the Developer to the Agency a promissory note executed by Homeowner (the "Affordable Housing Promissory Note") in connection with Homeowner's purchase of the Unit. The Affordable Housing Promissory Note is, or shall be, secured by the Affordable Housing Trust Deed. F. Pursuant to Health and Safety Code Section 33334.3, this Covenant shall run with the land and shall be enforceable, against Homeowner and successors in interest, by the Agency or the Community. 206105.1 G. This Covenant is intended to benefit the parcel of land owned by the City of Tustin located adjacent to the Project identified as the Fee Title to Newport Avenue granted to the City of Tustin, as shown on the Map recorded February 17, 2005, Instrument No. 2005000126492, Book 864, Pages 35-38 for Tract No. 16506, a subdivision of Parcell, of Parcel Map No. 84-1029, as shown on a map filed in Book 193, Pages 25 and 26 of Parcel Maps, in the Office of the County Recorder, County of Orange, State of California ("Benefited Property"), and the obligations and rights contained herein are intended to run with the land and to be subordinate to a "First Lien" (as defined herein). 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 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 herein as a price per Unit calculated as follows: Affordable Housing Cost for Moderate Income Households shall be a Monthly Housing Cost not be less than one twelfth of twenty eight percent (28%) of the gross annual income of the household, nor exceed one twelfth of the product of thirty five percent (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 Agency has determined and hereby agrees that, for a Moderate Income Household with annual gross income that exceeds one hundred ten percent (110%) of the annual Orange County Median Income, adjusted for family size, and no maximum cap shall be placed upon the annual payments. "Affordable Housing Promissory 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 Promissory Note is an amount not in excess of the difference between an amount to be identified as of the date of purchase and the Affordable Housing Cost for Moderate Income Households 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 Agency 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 Promissory Note is accelerated as the result of a Transfer by the Owner. "Affordable Housing Trust Deed" 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 Promissory Note. "Agency" means the Tustin Community Redevelopment Agency, and the Agency's successors and assigns. "Community" means the City of Tustin (Health and Safety Code Section 33002) 2 206105.1 "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. "Developer" means Olson Urban Housing, LLC, a Delaware limited liability company. "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. "Moderate Income Household" means a Household occupied by persons and families whose gross income does not exceed the qualifying limits for lower and 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 "B" 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. "Permitted Transferee" means a Transferee from the Homeowner or from any Permitted Transferee who acquires ownership of the Unit in full compliance with Section 4 hereof. "Prohibited Transfer" means any Transfer which is not permitted pursuant to Section 4 hereof. 206105.1 "Project" means that certain mixed use development in which the Unit is located. "Reimbursement Agreement" means the Reimbursement Agreement to be executed by the Homeowner in favor of the Agency, in the form attached hereto as Exhibit "D" and incorporated herein. "Request for Notice" means the Request for Notice of Default attached hereto as Exhibit "C" 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 ajoint tenancy interest; (iv) a gift of all or any portion of the Unit; or (v) any voluntary conveyance of the Unit, or (vi) any month to month or longer lease 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 Moderate Income Household, at an Affordable Housing Cost for Moderate 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 Covenant shall be secured by the Affordable Housing Trust Deed 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 ACCURATELY PREDICTED, AND THAT THE TRANSFER PRICE PERMITTED HEREUNDER MAYBE 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 AGENCY AND TillS COVENANT IS TO PROVIDE HOUSING TO MODERATE INCOME HOUSEHOLDS AT AN AFFORDABLE HOUSING COST. Homeowner's Initials 4 206105.1 3. HOMEOWNER'S REPRESENTATIONS AND WARRANTIES AS TO THE SALE OF THE UNIT TO HOMEOWNER. Homeowner represents and warrants to the Developer and the Agency that the financial and other information which Homeowner has provided to the Developer and the Agency 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, the Unit, and any interest therein, shall not be Transferred by the Owner except with the express written consent of the Agency, which consent shall be given only if the Transfer is in strict compliance with the provisions of this Section 4. Each Homeowner understands that appropriate transfers will be permitted and neither the Agency 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 Trust Deed. During the Affordability Period in the event that then Owner of the Unit; desires to Transfer the Unit, prior to the Transfer the Owner shall notify the Agency by delivering a Notice of Intent to Transfer to the Agency. Agency 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 Agency. The Owner shall send the Notice of Intent to Transfer to the Agency at the address set forth in Section 22 hereof. The Notice of Intent to Transfer shall identify the proposed Transferee, certify that to the best knowledge of the Owner 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 Agency with such information as the Agency may request related to the proposed Transfer in the form provided by the Agency, including without limitation: the Social Security Number of the proposed Transferee, copies of the federal income tax returns filed by the proposed Transferee for 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 Agency 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 Agency may request. iii. Certificates from Parties. The Owner and proposed Transferee shall each shall certify in writing, in a form acceptable to the Agency, 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 Agency and that all consideration delivered by the proposed Transferee to Owner has been fully disclosed to the Agency. The written certificate shall also include a provision that in 5 206105.1 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 Agency for its approval of the Transfer, the Agency 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 the Transferee. iv. Agreement to Assume the Obligations of This Covenant. The grant deed or other document effecting 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 Trust Deed, (c) a reference to the Affordable Housing Option Agreement, (d) a reference to the due on sale provisions of the Affordable Housing Promissory 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 title to the Unit a reference to this Covenant, the Affordable Housing Trust Deed, the Affordable Housing Option Agreement, the Reimbursement Agreement, the due on sale provisions of the Affordable Housing Promissory Note, and the obligation of the Transferee to be bound by the obligations set forth in this Covenant, the Affordable Housing Trust Deed, the Affordable Housing Option Agreement, the Reimbursement Agreement and the due on sale provisions of the Affordable Housing Promissory Note. v. Agreement to Increase Amount due on the Affordable Housing Promissory Note. The Transferee must agree to increase the amount of the Affordable Housing Promissory 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 Promissory 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 Promissory Note and the reduction to zero of accrued interest due on the note, the Affordable Housing Promissory Note, the Affordable Housing Trust Deed, the Affordable Housing Option Agreement and the Reimbursement Agreement shall remain in full force and effect. vi. The Agency's Title Policy. The Agency must receive a title policy, in an amount equal to the amount then due on the Affordable Housing Promissory Note as increased as provided in this Section 4. insuring the Affordable Housing Trust Deed 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(vi). In the event of a transfer to a spouse in dissolution preceding the Agency shall not require a new title policy [nor shall the Agency require reimbursement for its costs]. b. Notice of Prohibited Transfer. Within fifteen (15) days after the receipt by the Agency of the notices, documents and agreements referred to in Section 4(a), the Agency 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 Agency 6 206105.1 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 Agency within ten (10) days after the date of the notice, or within such further time as the Agency determines is necessary to correct the violation, the Agency may declare a Default under this Covenant. Upon the declaration of a Default, the Agency 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 the Agency 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 Agency may reasonably request. d. Refinancing. 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 re: 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 refinancing, and (iii) must be in compliance with the Affordable Housing Trust Deed. 5. ENCUMBRANCES. a. Subordination. The provisions of this Covenant, the Affordable Housing Note, the Affordable Housing Trust Deed, 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 this Covenant, the Affordable Housing Note, the Affordable Housing Trust Deed, the Affordable Housing Option Agreement and the Reimbursement Agreement are subordinate to an appropriate First Lien, said fact shall not in any manner modify the obligations from time to time existing between the Agency and the Owner. The intent of this provision regarding subordination is that in the event of a for.eclosure of the First Lien or the recordation of a deed in lieu of foreclosure of the First Lien, this Covenant, the Affordable Housing Note, the Affordable Housing Trust Deed, the Affordable Housing Option Agreement and the Reimbursement Agreement 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 Agency shall execute such written instruments for the subordination of its rights under this Covenant, the Affordable Housing Note, the Affordable Housing Trust Deed, the Affordable Housing Option Agreement and the Reimbursement Agreement, as may reasonably be requested by the Lender. b. Request for Notice of Default. The Agency 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 the recordation of any deed of trust, mortgage, lien or other instrument creating a security 7 206105.1 interest in or to the Unit (a "Further Encumbrance") other than a First Lien, the Affordable Housing Trust Deed 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 Agency shall enter into a Reimbursement Agreement, in the fonn attached hereto as Exhibit "D" and incorporated herein, which provides that the Agency 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 Agency 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 Trust Deed. 7. OPTION TO ACQUIRE UNIT UPON DEF AUL T OF OBLIGATIONS UNDER THIS COVENANT. Homeowner agrees to enter into an Option Agreement, in the form attached hereto as Exhibit "E" and incorporated herein, which grants to Agency 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. 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, 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. I 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 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. The Agency may grant a temporary waiver of the above requirements for good cause, in the Agency's sole and absolute discretion. Examples of situations which may result in the grant of a temporary waiver include: (i) rental by Homeowner where necessary to accommodate a mandatory job transfer required by Homeowner's employer (not including Homeowner, if Homeowner is self-employed); (ii) rental necessitated by a medical or financial emergency, proof of which emergency has been delivered to the Agency, and (iii) other situations which constitute a "hardship" situation consistent with the intentions of this Covenant and the goal of the Agency to 206105.1 have affordable Homeowner occupied homes in the Project. 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 Agency an affidavit of occupancy in the form provided by the Agency. 12. EFFECT OF VIOLATION OF THE TERMS AND PROVISIONS OF THESE COVENANTS. a. In General. The covenants established herein shall, without regard to technical classification and designation, be binding for the benefit and in favor of the Agency, 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 Agency 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 Agency, without regard to whether the Agency has been, remains or is an owner of any land or interest therein in the Unit or in the Project Area. The Agency 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 Agency 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 Homeowner shall not constitute a waiver of any Default, nor shall it change the time of Default. c. Agency's Remedies. Upon the declaration of a Default, the Agency 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 Agency's rights under the Affordable Housing Trust Deed, 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 Agency. 13. INDEMNIFICATION. Homeowner shall defend, indemnify and hold harmless the Agency 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 Agency to make such payments, by virtue of this Covenant. 9 206105.1 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 Agency 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 Agency within thirty (30) days of the effective date of this Covenant, and Homeowner shall annually transmit to the Agency 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 Agency 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 Agency. 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 Agency 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 Agency. Nothing in this Covenant is intended to be, nor shall it be deemed to be, a waiver of any Agency 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 Agency. 20. AGENCY MAY ASSIGN. The Agency 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 of the Agency, which consent shall be given by the Agency only in the event that the Agency determines the Transfer fully complies with Section 4. This section shall not affect or diminish the Agency's right to assign all or any portion of its rights hereunder. 10 206105.1 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 Agency: Tustin Community Redevelopment Agency 300 Centennial Way Tustin, California 92780 Attention: Executive Director and Attention: Assistant Executive Director 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 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 11 206105.1 (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 (t) 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 Agency 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. 12 206105.1 IN WITNESS WHEREOF, the parties have executed this Covenant as of the date set forth above. HOMEOWNER: By: Name: By: Name: AGENCY: TUSTIN COMMUNITY REDEVELOPMENT AGENCY, a state agency activated by the Tustin City Council pursuant to Health and Safety Code Section 33000 et. seq. APPROVED AS TO FORM By: Title: AGENCY LEGAL COUNSEL 13 206105.1 EXHIBIT "A" LEGAL DESCRIPTION OF UNIT [To Be Inserted] 206105.1