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iM;: <br />11.2 Acceleration. The City shall be entitled to accelerate payments due under the <br />City Promissory Note, and the amount required thereunder shall become due and immediately <br />payable to City by Homebuyer upon the occurrence of any one of the following events of <br />acceleration: <br />11.2.1 During the Affordability Term, Homebuyer Transfers the Property for a <br />price in excess of an Affordable Sales Price or to a Transferee who does not qualify as a Very Low <br />Income Household; <br />11.2.2 Homebuyer makes a Prohibited Transfer of title to or any interest in the <br />Property without City's consent or in violation of this Agreement; <br />11.2.3 Homebuyer refinances any lien or encumbrance to which City Deed of Trust <br />is subordinate (each such lien, a "First Lien") for a loan amount in excess of the then current loan <br />balance secured by such lien or encumbrance and loan closing costs; <br />11.2.4 Homebuyer fails to occupy the Property as Homebuyer's principal <br />residence or is in Default of any other obligation under the Affordable Housing Resale <br />Restrictions; <br />11.2.5 Homebuyer has an Ownership Default violating any affordable housing <br />terms or provisions of this Agreement. <br />12. COMPLIANCE WITH LAWS; GOVERNING LAW. <br />Homebuyer hereby agrees to comply with all applicable ordinances, rules, and regulations of City. <br />Nothing herein is intended to be, nor shall it be deemed to be, a waiver of any City ordinance, rule, <br />or regulation. This Agreement shall be governed by the laws of the State of California. Any legal <br />action brought under this declaration must be instituted in the Superior Court of the County of <br />Orange, State of California, or in the Federal District Court in the Central District. <br />13. INDEMNIFICATION. <br />Homebuyer shall pay for, defend, indemnify and hold harmless City and the City and their <br />respective officers, officials, agents, employees, representatives, and volunteers from and against <br />any loss, liability, claim, or judgment relating in any manner to Homebuyer's use of the Property <br />or Homebuyer's violation of this Agreement. Homebuyer shall remain fully obligated for the <br />payment of taxes, liens and assessments related to the Property. There shall be no reduction in <br />taxes for Homebuyer, nor any transfer of responsibility to City to make such payments, by virtue <br />of this Agreement. <br />14. INSURANCE. <br />Homebuyer shall maintain, during the term of this Agreement, an all-risk property insurance policy <br />insuring the Property in an amount equal to the full replacement value of the structures on the <br />Property. The policy shall contain a statement of obligation on behalf of the carrier to notify the <br />City of any material change, cancellation or termination of coverage at least thirty (30) days in <br />advance of the effective date of such material change, cancellation or termination. Homebuyer <br />Page 37 <br />Exhibit B <br />5 53 94.00 10 1 \43423340.1 <br />