Loading...
HomeMy WebLinkAboutSANTA ANA 5, LLC -2015t i tr i City of Santa Ana 20 Civic Center Plaza Santa Ana, California 92701 Attention: Housing Manager A -2015 -177 {� (�� l ntJ ICJ � ``_:.�'' u u To be recorded without fee. (Space Above This Line For Recorder's Use Only) (Government Code, §§ 6163 and 27383) INCLUSIONARY HOUSING AGREEMENT THIS INCLUSIONARY HOUSING AGREEMENT is dated as of August 4, 2015, by and between the CITY OF SANTA ANA, a charter city and municipal corporation organized and existing under the Constitution and laws of the State of California, and Santa Ana 5 Inv,,LLC, a Delaware limited liability company ( "Developer "). A. The City's Housing Opportunity ( "Ordinance ") was adopted by the City Council on November 28, 201 land is codified in Article XVIIIA Section 41 —1900 of the City's Municipal Code. B. The Developer is the fee owner of the Property located at 1010 S. Harbor Blvd, Santa Ana, California. C. The Developer desires to, at the Developer's sole cost and expense, develop a seventy -nine (79) unit Project on the Property. D. On August 4, 2015 the City Council /Planning Commission approved Resolution Number , which sets forth the City Approvals for the Project. (2015 -25) Inclusionary Housing Agreement - Ownership Project Page 1 City of Santa Ana January 2015 a 0 N 0 RECORDING REQUESTED BY AND WHEN RECORDED MAIL_ TO: City of Santa Ana 20 Civic Center Plaza Santa Ana, California 92701 Attention: Housing Manager A- 2015 -177 To be recorded without fee. (Space Above This Line For Recorder's Use Only) (Government Code, §§ 6103 and 27383) INCLUSIONARY HOUSING AGREEMENT OWNERSHIP PROJECT THIS INCLUSIONARY HOUSING AGREEMENT is dated as of August 4, 2015, by and between the CITY OF SANTA ANA, a charter city and municipal corporation organized and existing under the Constitution and laws of the State of California, and Santa Ana 5 Inv.,LLC, a Delaware limited liability company ( "Developer "). RECITALS A. The City's Housing Opportunity ( "Ordinance ") was adopted by the City Council on November 28, 2011 and is codified in Article XVIII.1 Section 41 — 1900 of the City's Municipal Code. B. The Developer is the fee owner of the Property located at 1010 S. Harbor Blvd, Santa Ana, California. C. The Developer desires to, at the Developer's sole cost and expense, develop a seventy -nine (79) unit Project on the Property. D. On August 4, 2015 the City Council /Planning Commission approved Resolution Number , which sets forth the City Approvals for the Project. (2015 -25) Inclusionary Housing Agreement - Ownership City of Santa Ana January 2015 E. On June 17, 2015, the Program Director, acting on behalf of the City, approved an Inclusionary Housing Plan that was prepared by the Developer in accordance with the requirements imposed by the Ordinance and the Administrative Procedures Manual established by the City Council to implement the Ordinance requirements. F. This Inclusionary Housing Agreement, when fully executed by the City and the Developer and recorded, is intended to satisfy the requirement that the Developer enter into an Inclusionary Housing Agreement, as set forth in the Ordinance and the conditions to City Approvals. NOW, THEREFORE, in consideration of the mutual promises set forth in this Inclusionary Housing Agreement and other good and valuable consideration, the receipt and sufficiency of which is acknowledged by the City and the Developer, the Parties, agree as follows: DEFINITIONS OF TERMS The following words, terms and phrases are used in this Inclusionary Housing Agreement, as follows, unless the particular context of usage of a word, term or phrase requires another interpretation. Administrative Procedures means the regulations promulgated by the Executive Director pursuant to the Ordinance. Administrative Procedures Manual is the Affordable Ownership Housing Administrative Procedures Manual — Developer Requirements dated January 2014, which has been prepared by the City for the implementation and enforcement of the Ordinance. A copy of the Administrative Procedures Manual shall be maintained on file with the City, and shall be provided to each Developer of Inclusionary Units. Affordability Gap is equal to the difference between the Fair Market Value of the Inclusionary Unit and the Affordable Sales Price for the Inclusionary Unit at the time of acquisition by the Homebuyer. Affordability Period shall be defined for each Inclusionary Unit in the Inclusionary Housing Covenants Declaration recorded on legal title to the Property. Inclusionary Housing Agreement - Ownership Project Page 2 City of Santa Ana January 2015 Affordable Housing Cost means the maximum costs that can be borne by Moderate Income Household based on the requirements imposed by H &SC Section 50052.5. The calculation methodology is described in Section VI of the Administrative Procedures Manual. Affordable Sales Price means the maximum sales price that can be charged for an Inclusionary Unit. The Affordable Sales Price is equal to the lesser of: 1. The sum of the Supportable Mortgage plus the Benchmark Down Payment; or 2. The purchase price prospective buyers are willing to pay in return for purchasing a home that is subject to restrictive covenants. The statutorily set Affordable Sales Prices for the initial sale of each Inclusionary Unit are shown in Exhibit 8 to this Inclusionary Housing Agreement. The Affordable Sales Prices for Inclusionary Units shall be adjusted quarterly. Benchmark Down Payment is a component of the Affordable Sales Price calculations. For the purposes of these Administrative Procedures, the Benchmark Down Payment is set at 5% of the total Affordable Sales Price. California Health and Safety Code ( "HSC ") provides definitions of household income and affordable housing costs that are used in this Inclusionary Housing Agreement. City means the City of Santa Ana, California. City Approvals are defined as the entitlement approvals and the Inclusionary Housing Plan that must be approved by the Program Director prior to the issuance of building permits for the Project. City Council means the City of Santa Ana City Council. City Deed of Trust means a deed of trust, that secures the Owner's obligation to comply with the obligations imposed by the Inclusionary Housing Covenant Declaration. Default means the failure of a Party to perform any action or covenant required by this Inclusionary Housing Agreement within the time period provided herein following notice and opportunity to cure, as set forth in Article 3 — Section I of this Inclusionary Housing Agreement. Inclusionary Housing Agreement - Ownership Project Page 3 City of Santa Ana January 2015 Delivery Date means the date on which an Inclusionary Unit Escrow closes and the Homebuyer acquires a fee title interest in the completed Inclusionary Unit. Developer means the developer of the Project. Effective Date means the date on which this Inclusionary Housing Agreement is approved and executed by appropriate authorities of the Developer and the City; and this Inclusionary Housing Agreement is delivered to the Developer. Eligible Purchaser shall mean a Homebuyer who meets the eligibility criteria set forth in the Administrative Procedures. Executive Director is the Executive Director of the Community Development Agency of the City. The Executive Director, or designee, has the ultimate authority to evaluate appeals submitted in relation to the Administrative Procedures. Exhibits means the exhibits to this Inclusionary Housing Agreement, which are listed in Article 1 - Section V. Fair Market Value means the value of the Inclusionary Unit under normal circumstances in which the seller and the buyer freely negotiate the terms of the transfer of ownership. The Fair Market Value must be established by a licensed Real Estate agent based on three comparable properties. Gross Household Income means all income from whatever source from all Adult Household members, which is anticipated to be received during the 12- month period following the date of the determination of Gross Household Income. The applicable sources of income are defined in California Code of Regulations Title 25 Housing and Community Development Section 6914. The definition includes the following specific requirements: 1. Except as provided in subdivision (2), all payments from all sources received by the head of Household (even if temporarily absent) and each additional member of the Household who is not a minor shall be included in the annual income of a Household. Gross Household Income shall include, but not be limited to: a. The gross amount, before any payroll deductions, of wages and salaries, overtime pay,.commissions, fees, tips and bonuses; Incluslonary Housing Agreement - Ownership Project Page 4 City of Santa Ana January 2015 b. The net income from operation of a business or profession or from rental or real or personal property (for this purpose, expenditures for business expansion or amortization of capital indebtedness shall not be deducted to determine the net income from a business); C. Interest and dividends; d. The full amount of periodic payments received from social security, annuities, insurance policies, retirement funds, pensions, disability or death benefits and other similar types of periodic receipts (but see subdivision (2)(c)); e. Payments in lieu of earnings, such as unemployment and disability compensation, worker's compensation and severance pay; f. Public Assistance. If the public assistance payment includes an amount specifically designated for shelter and utilities which is subject to adjustment by the public assistance agency in accordance with the actual cost of shelter and utilities, the amount of public assistance income to be included as income shall consist of: i. The amount of the allowance or grant exclusive of the amount specifically designated for shelter and utilities, plus ii. The maximum amount which the public assistance agency could in fact allow for the Household for shelter and utilities. g. Periodic and determinable allowances such as alimony and child support payments, and regular contributions or gifts received from persons not residing in the dwelling; h. All regular pay, special pay and allowances of a member of the Armed Forces (whether or not living in the dwelling) who is head of the Household or spouse or domestic partner (but see subdivision (2)(e)); i. Where a Household has net assets in excess of $5,000, income shall include the actual amount of income, if any, derived from all of the net Household assets or 10 percent of the value of all such assets, whichever is greater. For purposes of this section, net Inclusionary Housing Agreement - Ownership Project Page 5 City of Santa Ana January 2015 Household assets means value of equity in real property other than the Household's full -time residence, savings, stocks, bonds, and other forms of capital investment. The value of necessary items such as furniture and automobiles shall be excluded. 2. The following items shall not be considered as income: a. Casual, sporadic or irregular gifts; b. Amounts which are specifically for or in reimbursement of the cost of medical expenses; C. Lump -sum additions to Household assets, such as inheritances, insurance payments (including payments under health and accident insurance and worker's compensation), capital gains and settlement for personal or property losses; d. Amounts of educational scholarships paid directly to the student or to the educational institution, and amounts paid by the government to a veteran for use in meeting the costs of tuition, fees, books and equipment. Any amounts of such scholarships, or payments to veterans not used for the above purposes of which are available for subsistence are to be included in income; e. The special pay to a serviceman head of a Household away from home and exposed to hostile fire; f. Relocation payments made pursuant to federal, state, or local relocation law; g. Foster child care payments; h. The value of coupon allotments for the purchase of food pursuant to the Food Stamp Act of 1964 which is in excess of the amount actually charged the eligible Household; Payments received pursuant to participation in the following volunteer programs under the ACTION Agency: National Volunteer Antipoverty Programs which include VISTA, Service Learning Programs and Special Volunteer Programs. Inclusionary Housing Agreement - Ownership Project Page 6 City of Santa Ana January 2015 ii. National Older American Volunteer Programs for persons aged 60 and over which include Retired Senior Volunteer Programs, Foster Grandparent Program, Older American Community Services Program, and National Volunteer Program to Assist Small Business Experience, Service Corps of Retired Executive (SCORE) and Active Corps of Executives (ACE). Homebuyer means an Eligible Purchaser that has executed an agreement to purchase an Inclusionary Unit. Household means all the persons who will occupy the Inclusionary Unit as their Primary Residence. A child who is subject to a legally- binding shared - custody agreement, in which the child resides with the Household at least 50% of the time, is counted as a member of the Household. Excluded from the definition of Household are live -in caregivers /caretakers, foster children, unborn children and children being pursued for legal custody or adoption that are not currently living with the Household. Housing Cost means and includes all of the following costs associated with ownership of an Inclusionary Unit as defined in Title 25 of the California Code of Regulations Section 6920: 1. Principal and interest on a mortgage loan at the defined interest rate; 2. Property tax and assessments; 3. Fire and casualty insurance covering replacement value of property improvements; 4. Property maintenance and repairs; 5. A reasonable utility allowance, as determined by the City; and 6. Homeowner Association assessments and dues. HCD means the California Department of Housing and Community Development. HUD means the United States Department of Housing and Urban Development. Inclusionary Housing Agreement - Ownership Project Page 7 City of Santa Ana January 2015 Inclusionary Housing Covenants Declaration means the Declaration of Inclusionary Housing Covenants, Conditions and Restrictions attached hereto as Exhibit 5. Incluslonary Housing Fund means a separate fund of the City which is codified in Article XVIII.1 Section 41 -1909 of the City's Municipal Code. The fund was established for the specific purpose of providing the City with funds to assist in the development of housing that is affordable to low and moderate income households. The allowable uses of Inclusionary Housing Funds, and the related reporting are described in Attachment I of the Administrative Procedures Manual. Incluslonary Housing Plan means a plan submitted for approval to the Program Director that details the manner in which the Inclusionary Housing obligations will be fulfilled by the Project. The Inclusionary Housing Plan form is presented in Attachment B of the Administrative Procedures Manual, and also attached as Exhibit 3 to this Inclusionary Housing Agreement. Inclusionary Unit means a completed affordable owner- occupied housing unit, including the landscape improvements thereon, if any, that is made available for sale to an Eligible Purchaser. The location of each Inclusionary Unit in the Project is shown on Exhibit 3 to this Inclusionary Housing Agreement. Inclusionary Unit Escrow means the escrow transaction by and between the Developer and each Homebuyer, through which the Developer shall transfer fee title in each completed Inclusionary Unit to an Eligible Purchaser. In -Lieu Fee refers to a fee that may be paid by the Property Owner in specific circumstances in lieu of providing Inclusionary Units within a Project. These circumstances are identified in Section II -A of the Administrative Procedures Manual. The In -Lieu Fee calculation worksheet is updated quarterly. The current Affordable Housing In -Lieu Fee calculation worksheet schedule is presented in Attachment J of the Administrative Procedures Manual. Market Rate Unit means any unit in the Project that is not restricted for ownership and occupancy by Eligible Purchasers. Median Income is calculated by HCD using non- aggregated census income data and applying trending factors for metropolitan statistical areas (MSA) throughout the country. The MSA for Santa Ana is Orange County. The current household income information is presented in Attachment I of the Administrative Procedures Manual. Inclusionary Housing Agreement - Ownership Project Page 8 City of Santa Ana January 2015 Moderate Income refers to Households whose incomes meet the standards defined by the H &SC Section 50093. Generally, Moderate Income means household income that does not exceed 120% of the County Median Income, as adjusted for Household size. The maximum household income amount for Moderate Income Households shall be set at the amount published by HCD annually. Moderate Income Household shall mean individuals or Households who have an adjusted Gross Income that does not exceed Moderate Income. Ordinance means the Housing Opportunity Ordinance adopted by the City Council on November 28, 2011, which is codified in Article XVIII.1 Section 41- 1900 et seq. of the City's Municipal Code. Owner means the current owner of an Inclusionary Unit. Party and Parties mean the City and the Developer as parties to this Inclusionary Housing Agreement. Program Director has the day -to -day authority for making determinations related to the Ordinance and Administrative Procedures Manual. The Program Director will be appointed by the Executive Director. Project means the owner - occupied housing project proposed to be developed on the Property at the Developer's sole cost and expense. Property means the real property, as shown on Exhibit 2 attached to this Inclusionary Housing Agreement, on which the Project is to be developed, for which the legal description is provided in Exhibit 1 to this Inclusionary Housing Agreement. Supportable Mortgage means the mortgage amount that can be supported by a Moderate Income Household based on the Affordable Housing Cost calculations. The mortgage calculation is based on the prevailing market interest rate for a 30- year fully amortizing mortgage with a fixed interest rate. See Section VI -B of the Administrative Procedures Manual for an explanation of the calculation methodology. Inclusionary Housing Agreement - Ownership Project Page 9 City of Santa Ana January 2015 ARTICLE 1 PARTIES; REPRESENTATIONS AND WARRANTIES; EFFECTIVE DATE; RECITALS; AND EXHIBITS I. Parties to this Inclusionary Housing Agreement I -A. City. The City is a charter city and municipal corporation organized and existing under the Constitution and laws of the State of California. The address of the City, for the purposes of this Inclusionary Housing Agreement, is: City of Santa Ana Community Development Agency 20 Civic Center Plaza, M -25 Santa Ana, California 92701 Attention: Program Director Facsimile Number: (714) 647 -6549 11-13. Developer. The Developer is a Santa Ana 5 Inv., LLC. The principal office and address of the Developer, for the purposes of this Inclusionary Housing Agreement, is: Santa Ana 5 Inv, LLC 3121 Michelson, Suite #150 Irvine, CA 92612 Attention: Kim Prijatel, VP of Development Facsimile Number: (949) 336 -4349 II. Developer Representations And Warranties The representations and warranties of the Developer contained in Article 1 — Section II shall be based upon the actual knowledge of the Developer as of the Effective Date, and are true and correct as of the Effective Date. The Developer's liability for misrepresentation or breach of warranty, representation Inclusionary Housing Agreement - Ownership Project Page 10 City of Santa Ana January 2015 or covenant, wherever contained in this Inclusionary Housing Agreement, shall survive the execution and delivery of this Inclusionary Housing Agreement. The Developer hereby makes the following representations, covenants and warranties, and Developer acknowledges that the execution of this Inclusionary Housing Agreement by the City has been made in material reliance by the City on such covenants, representations and warranties: II -A. The Developer is a Santa Ana 5 Inv., LLC, lawfully entitled to do business in the State of California and the City. The Developer has the legal right, power and authority to enter into this Inclusionary Housing Agreement and the instruments and documents referenced herein and to consummate the transaction contemplated hereby. The persons executing this Inclusionary Housing Agreement and the instruments referenced herein on behalf of the Developer hereby represent and warrant that such persons have the power, right and authority to bind the Developer. II -B. The Developer has taken all requisite action and obtained all requisite consents in connection with entering into this Inclusionary Housing Agreement and the instruments and documents referenced herein and the consummation of the transactions contemplated hereby, and no consent of any other party is required for the Developer's authorization to enter into this Inclusionary Housing Agreement. II -C. Neither the execution of this Inclusionary Housing Agreement nor the consummation of the transactions contemplated hereby shall result in a breach of or constitute a default under any other agreement, document, instrument, or other obligation to which the Developer is a party or by which the Developer may be bound, or to the best of the Developer's knowledge, under any law, statute, ordinance, governmental regulation or any writ, injunction, order or decree of any court or governmental body applicable to the Developer or to the Property. II -D. This Inclusionary Housing Agreement is, and all agreements, instruments and documents to be executed by the Developer pursuant to this Inclusionary Housing Agreement shall be duly executed by, and to the best of the Developer's knowledge, are or shall be valid and legally binding upon the Developer and enforceable in accordance with their respective terms. Inclusionary Housing Agreement - Ownership Project Page 11 City of Santa Ana January 2015 III. Effective Date This Inclusionary Housing Agreement is dated August 4, 2015 for reference purposes only. This Inclusionary Housing Agreement shall not go into effect before the Effective Date. IV. Recitals The Recitals set forth above are true and correct. The Recitals are incorporated into this Inclusionary Housing Agreement in their entirety by this reference. V. Exhibit List The following is a list of the exhibits attached to this Inclusionary Housing Agreement. Each of the exhibits is incorporated by reference into the text of this Inclusionary Housing Agreement. Exhibit 1 Legal Description of Property Exhibit 2 Site Map Depicting Property and Zoning Designations Exhibit 3 Inclusionary Housing Plan Exhibit 4 Schedule of Performance for Construction of Inclusionary Units Exhibit 5 Inclusionary Housing Covenants Declaration Exhibit 6 City Deed of Trust Exhibit 7 Calculations of Affordable Sales Prices Exhibit 8 Developer's Phasing Map Exhibit 9 Legal Description of Inclusionary Units Inclusionary Housing Agreement - Ownership Project Page 12 City of Santa Ana January 2015 ARTICLE 2 INCLUSIONARY HOUSING COVENANTS Developer Compliance with the Ordinance The Developer acknowledges that the City has provided the Developer with copies of the Ordinance and the Administrative Procedures Manual. The Developer is familiar with the requirements of all the foregoing documents and shall ensure that the Project complies in all material respects with this Inclusionary Housing Agreement and the requirements set forth in all the foregoing documents. II. Inclusionary Housing Covenants The Developer covenants and agrees that twelve (12) of the units to be developed on the Property shall be Inclusionary Units reserved for sale at the Affordable Sales Price and occupancy by Homebuyers whose Gross Household Income at the time of occupancy of each Inclusionary Unit does not exceed the household income qualification limits of a Moderate Income Household. This covenant and agreement shall be binding on the successors and assigns of Developer, as set forth herein and in the Inclusionary Housing Covenants Declaration (Exhibit 5) and the City Deed of Trust (Exhibit 6). II -A. The Inclusionary Units to be developed on the Property shall be reasonably dispersed throughout the market rate project as depicted on Exhibit 3. The Developer may change the location of any Inclusionary Unit to another area within the Project upon approval of the Program Director. Changes in the location of Inclusionary Units as approved on the Tentative Subdivision Map in which the Project is included shall be made consistent with all requirements of the Ordinance and the Administrative Procedures Manual, and shall be subject to the approval of the Program Director, such approval not to be unreasonably withheld. II -B. The Inclusionary Units to be developed on the Property shall be proportional in the number of bedrooms to the market rate units in the Project; they shall be comparable to the market rate units in terms of design, materials, finished quality and appearance; and be permitted the same access to the Project amenities and recreation facilities as the market rate units. Incluslonary Housing Agreement - Ownership Project Page 13 City of Santa Ana January 2015 II -C. The Inclusionary Units to be developed on the Property shall be constructed concurrently with, or prior to, the Market Rate Units in the Project. If the Project is phased, the Inclusionary Units shall be constructed in accordance with the phasing plan included as Exhibit 8 to this Inclusionary Housing Agreement. If the Developer wishes to change the timing and /or phasing of the Project's construction, the City agrees to amend said schedule in a manner consistent with such change so long as the revised schedule continues to ensure that the Inclusionary Units will be constructed concurrently with, or prior to, the Market Rate Units. II -D. The Developer shall affirmatively market the Inclusionary Units to Moderate Income Households in accordance with the Administrative Procedures Manual. III. Sale of Inclusionary Units Each of the Inclusionary Units shall be sold to a Moderate Income Household as set forth in the Inclusionary Housing Plan. The purchaser of each Inclusionary Unit shall qualify as an Eligible Purchaser, as defined in the Administrative Procedures Manual. IV. Selection of Eligible Purchaser The Developer shall, at its sole cost and expense, conduct all procedures and comply with all requirements as set forth in the Ordinance and the Administrative Procedures Manual in selecting qualified Eligible Purchasers for each of the Inclusionary Units. Specific procedures are set forth in Attachment D in the Administrative Procedures Manual. If a prospective Homebuyer qualifies as an Eligible Purchaser, as defined herein, the Homebuyer shall be required to execute the Developer's standard purchase agreement for the purchase and sale of an Inclusionary Unit. The Developer shall seek and obtain all approvals required from the City pursuant to the Ordinance and the Administrative Procedures Manual, and shall provide the City with all documentation required pursuant to the Administrative Procedures Manual. Inclusionary Housing Agreement - Ownership Project Page 14 City of Santa Ana January 2015 V. Execution of Incluslonary Housing Covenants Declaration and City Deed of Trust The Developer shall not sell an Inclusionary Unit unless and until the City has reviewed and approved the Homebuyer as an Eligible Purchaser for the purchase of the Inclusionary Housing Unit, and the Homebuyer has executed and submitted to the Program Director, in recordable form, the Inclusionary Housing Covenants Declaration and the City Deed of Trust. The forms to be used are found in Exhibits 5 and 6, respectively, to this Inclusionary Housing Agreement. VI. Enforcement of Inclusionary Housing Covenants Declaration The Developer irrevocably stipulates and agrees that breach of the Inclusionary Housing Covenants set forth above in Article 2 — Section II will result in great and irreparable damage to the City, and will result in damages to the City that are either impracticable or extremely difficult to quantify. Accordingly, upon the breach of the Inclusionary Housing Covenants Declaration set forth above in Article 2 — Section Il, the City may institute an action for injunctive relief and /or specific performance for the remedy of such breach. VII. Recordation of Inclusionary Housing Covenants Declaration and City Deed of Trust Prior to the close of each Inclusionary Unit Escrow, each Homebuyer shall sign, and the City shall cause to be recorded, the City Deed of Trust and the Inclusionary Housing Covenants Declaration. Inclusionary Housing Agreement - Ownership Project Page 15 City of Santa Ana January 2015 ARTICLE 3 DEFAULTS AND REMEDIES Default If either Party defaults with regard to any provision of this Inclusionary Housing Agreement, the non - defaulting Party shall serve written notice of such default upon the defaulting Party. If, after the service of written notice of such default, the defaulting Party does not cure such default within thirty (30) calendar days after service of the notice of default (or, if such cure reasonably takes longer than thirty (30) days, if such cure has not been commenced within the thirty (30) day period or is not diligently completed within a reasonable time, not to exceed an additional sixty (60) calendar days), the defaulting Party shall be in Default of the terms of this Inclusionary Housing Agreement, and shall be liable to the other Party for damages caused by such Default. Alternatively, the non - defaulting Party, at its option, may institute an action for specific performance of the terms of this Inclusionary Housing Agreement. II. Legal Actions In the event of a breach or potential breach of program requirements, in addition to any other rights or remedies, either Party may institute legal action to cure, correct or remedy any Default, to recover damages for any Default, or to obtain any other remedy consistent with the purposes of this Inclusionary Housing Agreement. 11 -A. The City's actions may include, but are not limited to, the following: 1. The following legal actions: a. Actions to enforce compliance with the program requirements and to enjoin any actions by the Developer that violate program requirements; b. Actions to disapprove, revoke or suspend any permit, including a Building Permit, Certificate of Occupancy or other discretionary approval; C. Injunctive relief and damages; and Inclusionary Housing Agreement - Ownership Project Page 16 City of Santa Ana January 2015 d. Civil citations with monetary penalties for violations of the Inclusionary Housing Agreement. 2. If the Developer rents any of the Inclusionary Units in violation of this Inclusionary Housing Agreement, as restitution to the City, the Developer shall forfeit all monetary amounts obtained through the rental of the Inclusionary Units. 3. If the Developer sells any of the Inclusionary Units in violation of this Inclusionary Housing Agreement, as restitution to the City, the Developer shall forfeit all monetary amounts obtained from the sale of the Inclusionary Units that are in excess of the Affordable Sales Price permitted by this Inclusionary Housing Agreement for such Inclusionary Units. 4. All such restitution shall be made to the City. Any funds received by the City under this provision of this Inclusionary Housing Agreement shall be placed in the City's Inclusionary Housing Fund. II -B. The laws of the State of California shall govern the interpretation and enforcement of this Inclusionary Housing Agreement. II -C. In the event that any legal action is commenced by the Developer against the City, service of process on the City shall be made by personal service upon the Clerk of the City Council, or in such other manner as may be provided by law. II -D. In the event that any legal action is commenced by the City against the Developer, service of process shall be made by personal service on the Developer's designated agent at such address as may be specified in written notice to the City, or in such other manner as may be provided by law, and shall be valid whether made within or without the State of California. III. Rights and Remedies are Cumulative The rights and remedies of the Parties are cumulative and the exercise by either Party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same Default or any other Default by the other Party. Inclusionary Housing Agreement - Ownership Project Page 17 City of Santa Ana January 2015 ARTICLE 4 GENERAL PROVISIONS I. Notices, Demands and Communications Between the Parties Any and all notices, demands or communications submitted by any Party to another Party pursuant to, or required by, this Inclusionary Housing Agreement shall be proper if in writing and dispatched by messenger for immediate personal delivery, or by registered or certified United States mail, postage prepaid, return receipt requested, to the address of the City and Developer, as applicable, as designated in Article 1 — Section I of this Inclusionary Housing Agreement. Such written notices, demands and communications may be sent in the same manner to such other addresses as either Party may from time -to -time designate as provided in this Section. Any notice, demand or communication shall be deemed to be received by the addressee, on the day that it is personally delivered, if dispatched by messenger, or two (2) calendar days after it is placed in the United States mail. In addition to the submission of notices, demands or communications to the Parties via United States mail, copies of all notices shall also be delivered by facsimile to the facsimile numbers designated in Article 1 — Section I. II. Conflict of Interest No council member, official, contractor, consultant, attorney or employee of the City having any conflict of interest, direct or indirect, related to this Inclusionary Housing Agreement, or in the development of the Property, shall participate in any decision relating to this Inclusionary Housing Agreement. The Parties represent and warrant that they do not have knowledge of any such conflict of interest. III. Non - liability of City or City Officials and Employees No council member, official, contractor, consultant, attorney or employee of the City shall be personally liable to the Developer, any voluntary or involuntary successors and assignees, or any lender or other party holding any interest in the Property, in the event of any default or breach by the City, or for any amount which may become due to the Developer or to its successors or assignees, or on any obligations arising under this Inclusionary Housing Agreement. Inclusionary Housing Agreement -Ownership Project Page 18 City of Santa Ana January 2015 IV. Indemnification The Developer agrees to indemnify and hold the City, and their officers, employees and agents, harmless from and against all damages, judgments, costs, expenses and fees arising from or related to any negligent or wrongful act or omission of the Developer in performing its obligations hereunder. The City agrees to indemnify and hold the Developer and its officers, employees and agents, harmless from and against all damages, judgments, costs expenses and fees arising from or related to any negligent or wrongful act or omission of the City in performing its obligations hereunder. V ;a 7 Failure to insist upon strict compliance with any of the terms, covenants, conditions and restrictions hereof on any one occasion shall not be deemed a waiver of such term, covenant, condition or restriction. Any waiver or relinquishment of rights or powers hereunder at any one time or more times shall not be deemed a waiver or relinquishment of such other rights or powers at any other time or times. VI. Attorneys' Fees and Costs If either Party hereto files any action, or brings any action or proceeding against the other arising out this Inclusionary Housing Agreement, the prevailing Party shall be entitled to recover its reasonable attorneys' fees and costs. The recovery shall be treated as an element of its costs of the suit, and not as damages. The amount of the recovery shall be fixed by the court in such action or proceeding, or in a separate action or proceeding brought to recover such attorneys' fees and costs. VII. Jurisdiction and Venue Any legal action or proceeding concerning this Inclusionary Housing Agreement shall be filed and prosecuted in the appropriate State of California court in Orange County, California. Each Party hereto irrevocably consents to the personal jurisdiction of that court. The City and the Developer each hereby expressly waive the benefit of any provision of federal or state law or judicial decision providing for the filing, removal, or change of venue to any other court or jurisdiction, including without implied limitation, federal district court due to any of the following: Inclusionary Housing Agreement - Ownership Project Page 19 City of Santa Ana January 2015 1. Any diversity of citizenship between the City and the Developer; or 2. The fact that the City is a party to such action or proceeding; or 3. That a federal question or federal right is involved or alleged to be involved. Without limiting the generality of the foregoing, the Developer and the City specifically waive any rights provided to it pursuant to California Code of Civil Procedure 394. The Developer acknowledges that the provisions of this Article 3 — Section VII are material consideration to the City for its entry into this Inclusionary Housing Agreement, in that the City will avoid the potential cost, expense and inconvenience of litigating in a distant forum. VIII. Inspection of Books and Records To enforce its rights under this Inclusionary Housing Agreement, the City shall have the right at all reasonable times and upon reasonable advance notice, at the City's cost and expense, to inspect the books and records of the Developer that are not privileged, confidential, trade secrets or otherwise protected from disclosure and that pertain to the sale of the Inclusionary Units at the Property. Matters discovered by the City shall not be disclosed to third parties unless required by law, or unless otherwise resulting from or related to the pursuit of any remedies or the assertion of any rights of the City hereunder subject to, however, any right of the Developer to seek a protective order to prevent the disclosure of any confidential or privileged information. IX. Successors and Assigns This Inclusionary Housing Agreement shall be binding upon, and inure to the benefit of, the Parties hereto and their respective heirs, executors, administrators, legal representatives, successors and assigns. X. No Third Party Beneficiaries The performance of the City's and the Developer's respective obligations under this Inclusionary Housing Agreement are not intended to benefit any party other than the City or the Developer, except as expressly provided otherwise herein. No person or entity not a signatory to this Inclusionary Housing Agreement shall have any rights or causes of action against any Party to this Inclusionary Housing Agreement as a result of that Party's performance or non - performance under this Inclusionary Housing Agreement - Ownership Project Page 20 City of Santa Ana January 2015 Inclusionary Housing Agreement, or for the enforcement of any provisions of this Agreement, except as expressly provided otherwise herein. XI. Entire Agreement This Inclusionary Housing Agreement integrates all of the terms and conditions mentioned herein or incidental hereto. This Inclusionary Housing Agreement supersedes all negotiations or previous agreement between the Parties with respect to all or any portion of the Property and the Project thereof. XII. Recordation The Developer and the City agree to permit recordation of this Inclusionary Housing Agreement, against the Inclusionary Units in the Office of the County Recorder of Orange County, California. The legal description for the Inclusionary Units is provided in Exhibit 10 to this Inclusionary Housing Agreement. XIII. Termination Except as set forth elsewhere, this Inclusionary Housing Agreement shall be effective until all of the following have been completed: 1. All of the Inclusionary Units have been constructed and sold by the Developer to Eligible Purchasers; 2. The Inclusionary Housing Covenants Declaration (Exhibit 5) has been recorded against each Inclusionary Unit; 3. The City Deed of Trust (Exhibit 6) has been recorded against each Inclusionary Unit. Upon satisfaction of the above - referenced items, this Inclusionary Housing Agreement shall automatically and immediately terminate and shall have no further force and effect. Upon the termination of this Inclusionary Housing Agreement, the Developer shall have no further obligations or liability hereunder, or any responsibility with respect to the Inclusionary Units. The City and the Developer agree to promptly execute, acknowledge and deliver for recordation any documents that may be necessary to remove this Inclusionary Housing Agreement as encumbrance against title to any portion of the Property. IN WITNESS WHEREOF, the Parties hereto have duly executed this Inclusionary Housing Agreement as of the dates set forth below. Inclusionary Housing Agreement - Ownership Project Page 21 City of Santa Ana January 2015 [Signatures on Following Pages] Inclusionary Housing Agreement - Ownership Project Page 22 City of Santa Ana January 2015 SIGNATURE PAGE TO INCLUSIONARY ROUSING AGREEMENT CITY: CITY OF SANTA ANA A California Charter City and Municipal Corporation C By: Name: David Cavazos Its: City Manager Date: t 12 APPROVE TO T GAL FORM: ATTEST. 4aL MARIA D. HUIZAH l By: CLERK OF THE COUNCIL nt CityAttorney City of Santa Ana Inclusionary Housing Agreement - Ownership Project Page 23 City of Santa Ana January 2015 SIGNATURE PAGE TO INCLUSIONARY HOUSING AGREEMENT DEVELOPER: Santa Ana 5 Inv., LLC A Delaware limited liability company By: Name: Kim Priiatel Its: Vice President of Development Date: 1-7111 15 Inclusionary Housing Agreement - Ownership Project Page 24 City of Santa Ana January 2015 CALIFORNIA ALL- PURPOSE ACKNOWLEDGEMENT A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. State of California) County of Orange) On October 15, 2015 before me, Maria D. Huizar, Notary Public personally appeared David Cavazos, City Manager who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. - - WITNESS my hand and official seal. Commission # 1974202 i Notary Public • California d Crape County Signature M Comm. Ex irss A r 5, 2016 (Seal) CAPACITY CLAIMED BY SIGNER: SIGNER IS REPRESENTING: ❑ Individual(s) _ ❑ Corporate ❑ Officers Titles) ❑ Partner(s) ❑ General Partner of a Limited ❑ Partnership ❑ Attorney -in -Fact ❑ Trustee (s) ❑ Subscribing Witness ❑ Guardian /Conservator ❑ Other: THIS CERTIFICATE MUST BE ATTACHED TO THE DOCUMENT DESCRIBED TO THE BELOW: INCLUSIONARY HOUSING AGREEMENT OWNERSHIP PROJECT, 1010 S. HARBOR BLVD. SANTA ANA CA NUMBER OF PAGES: DATE OF DOCUMENT: SIGNER (S) OTHER THAN NAMED ABOVE: CALIFORNIA ALL - PURPOSE ACKNOWLEDGMENT CIVIL CODE § 1189 r.�.��rr. -c _��re��� Ycracm�.re��eceLrcr�rQr��m:��^ srsrcra�s�s,�err� A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. State of California ) County of On ®'`Z> A °�� before me, L LL LQ Date "are Insert Name and Title of the Officer personally appeared �� `l Ci_A -e. o Names) of Signers) who proved to me on the basis of satisfactory evidence to be the person( whose whose name(gfGl af4 subscribed to the within instrument and acknowled ed to me that sh /tY}�y executed the same in I�is(6 t�yair authorized capacity(ie4) and that b hg�/ 4hprr signature on the instrument the personoy, or tl�e entity upon behalf of which the persono acted, executed the instrument. MICHELLE BOHANNON Commission 2059807 Z ; °: 2 Notary Public • California a z a. Orange County M Comm. Ez ilres Mar 26, 2018 Place Notary Seal Above I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my ha d %an offici eal. , Signature /y Signature of Notary Public OPTIONAL Though this section is optional, completing this information can deter alteration of the document or fraudulent reattachment of this form to an unintended document. Description of Attached Do urnent Title or Type of Document: LVt U 1uOq /l Document Number of Pages: e r g M A Signer s) ter an amed Above: Date: S- C, ­ "(13 Capacity(ies) C o ad by gnar(s) Si ner's Name: A Gti Sig Name: orporate Officer — Title(s):4Lk❑ Corpora icer — Title(s): ❑ Partner — ❑ Limited ❑ General ❑ Partner — ❑ Lim ❑ ❑ Individual ❑ Attorney in Fact ❑ Individual ne ❑ Trustee ❑ Guardian or Conservator ❑ Trustee ❑ Guardian or El Other: ❑ Signer Is Representing: igner Is Representing: v' aC1U." eGY' ?J2, V.:"£ SV?JC' OC' 4' v= v?= zSCZiR- 4�G�/c°.g'- _G'c%:eJ,)c[(;'i ©2014 National Notary Association - www.NationaiNotary.org = 1- 800 -US NOTARY (1 -800- 876 -6827) Item #5907 EXHIBIT 1 LEGAL DESCRIPTION OF PROPERTY Inclusionary Housing Agreement — Ownership Project City of Santa Ana January 2016 Order Number: NHSC- 4236547 (50) Page Number: 9 LEGAL DESCRIPTION Real property in the City of Santa Ana, County of Orange, State of California, described as follows: PARCEL 2 OF A PARCEL MAP, IN THE CITY OF SANTA ANA, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS RECORDED IN PARCEL MAP BOOK 72, PAGE 42 IN THE OFFICE OF THE COUNTY RECORDER OF ORANGE COUNTY, CALIFORNIA. APN: 108 - 722 -49 and 108- 722 -50 FirstAmerlcan Title EXHIBIT 2 SITE MAP DEPICTING PROPERTY AND ZONING DESIGNATIONS Inclusionary Housing Agreement— Ownership Project City of Santa Ana January 2015 W Z y� q �+ �-0¢ W z O ZQOJ U U LL — w Z >a� C�Faa CO W 0 F— �U a a E� Z� U` 7 6 aaNUAV SN]J IS3 T-- -- �--- - - - -- -- -- I > I 0 q it0 �I ® A 9 xGw � � m Z I rc gom zm� ao °s xm� o- a x 0 s d� p am W Z y� q �+ �-0¢ W z O ZQOJ U U LL — w Z >a� C�Faa CO W 0 F— �U a a E� Z� U` 7 6 aaNUAV SN]J IS3 T-- -- �--- - - - -- -- -- I > I 0 q it0 �I ® A 9 xGw � � m Z I rc gom zm� ao °s xm� o- a x 0 EXHIBIT 3 INCLUSIONARY HOUSING PLAN I ncl us! onary Housing Agreement— Ownership Project City of Santa Ana January 2015 Planning and Building Agency t, Planning Division 20 Civic Center Plaza P.O. Box INS (M -20) t t ilir Santa Ana, CA 82702 X Vii, (714)047.6006 www,santA4nat.org INCLUSIdhlARY HOUSING PLAN OWNERIAPPLICANT INFORMATION Legal Owner �_C�7 F /.L.AL. Full name of Person, Firm or Corpora� Area Cods Phone Number �cdress Area Cade Fax Number Applicant j_ Fell name of Person, Finn or corporation Area Code Phone Number Malling Address Area Cod Fax Number Contact Person ' Fu',I name of Parsan, n or Coffrandon _ E� I addu.as ry Area Cade Phone Number Area Cade Qbllo Phone Number Area Code Fax Number PROJECT DESCRIPTION Project Address: 1 O 1 f? _ , Assessor Parcel Number(s): „ % 2 2�- Total number of units proposed: Number of Rental Units: ._.r _ Number of For Sale units:__ Number of 15% inclusionary obligation: _I ,�`4, ; identify the gross livable area of the proposed project (including private balconies, decks and patios),__.___ square feet WIIE the project be constructed in phases? Yes _ No Is a density bonus being requested? Yes No Clrr APPROVALS IN applicable) INCLUSIONARY HOUSING PLAN NO. P' APPROVE ❑ DENY Date: (,0 i ,j Signature: Page ,''of4 &P1ann1npl01er =kCournar RormsvODappllcellon Ills HOUSING ALTERNATIVES Select the applicable alternatives to indicate how the project will comply with the inclusionary housing requirement: On-site construction of Incluslonary units _ In -lieu fee payment for entire obligation' In -lieu fee payment for fractional unit Land dedication Note: For development projects with more than 20 units requesting in -lieu fee payment to fulfill their inclusionary obilgation, "substantial evidence" that the cost of providing inclusionary units on site would substantially exceed the amount of the applicable In -lieu fee is to be provided with this application. Please complete the following table(s) as It applies to your project proposal: Pro2osed Rental Housing Prolecte: 1 I Number of Unit Size 1 Number of Number of Very-Low Total Percent Number of (Square I Market Rate Low Income ; Income Number of Total Bedrooms Feel) Units Units Units i of Units j Units � I I ' If the calculation of the number of required Incluslonsry housing units results Ina frectlan, the devaloper has the option to (a( provide an additional inclusionary housing unit or (b) pay an In -Lieu Fee equal to the pamen toga represented by the fraadpnal Indualonary housing unit multiplied by the applicable In-Llau Fee Page 2 or4 e:Planning \Clad W.Ceunler Form.NOCappantfcn 1115 Required Exhibits to the Inclusionary Housing Plan Narrative description of the entire project: !3. PX8ite plan that depicts the entire project (minimum 11vX17"); C. �K Depiction of the location of the Inclusionary housing units; and D. applicable, phasing plan that provides for the proportionate number ofthe total Inclusionary housing unit requirement to be built within each phase of the project. E. 0 If applicable, provide the In-Lieu Calculation Summary for the project. �|�� Page 304 rpwm/owm�=x�ow^"mmmwoo"p*mmo^ vw Number of (Square Market Rate I Moderate Numb:r of, Per nt of Bedrooms Feet) I Units Income Unit Units Total Units Studio Required Exhibits to the Inclusionary Housing Plan Narrative description of the entire project: !3. PX8ite plan that depicts the entire project (minimum 11vX17"); C. �K Depiction of the location of the Inclusionary housing units; and D. applicable, phasing plan that provides for the proportionate number ofthe total Inclusionary housing unit requirement to be built within each phase of the project. E. 0 If applicable, provide the In-Lieu Calculation Summary for the project. �|�� Page 304 rpwm/owm�=x�ow^"mmmwoo"p*mmo^ vw Property OWNER'S AFFIDAVIT I hereby certify that I am the legally authorized owner of all property involved in this application or have been empowered to sign as the property owner on behalf of a corporation, partnership, business, etc„ as evidenced by separate instrument attached herewith. I hereby grant to the applicant submitting this form full power to sign all documents related to this application, including any conditions or litigation measures as may be deemed necessary. I declare under penalty of perjury that the foregoing is true and correct. Executed on (Date) / at ✓ ✓t California Property Owner's Signature t Property Owner's Printed Name r—io t. py-; Q t+kli a4,,o�t/ irttl�LL -C. 1 APPLICANT'S AFFIDAVIT I hereby certify that the statements furnished above and in the attached exhibits represent the data and information required for this initial evaluation and that the facts, statements and information presented are true and correct to the best of my knowledge and belief. Further, should the stated information be found false or insufficient, I agree to the return of this form for appropriate revisions, understanding the City of Santa Ana cannot process this form until all applicable information is corrected or provided by the applicant. I hereby certify that I have been legally authorized by the property owner to present this application and to sign on behalf of all documents related to this application, including any conditions or litigation measures as may be deemed necessary. Note: When the applicant is a corporation, partnership, business, etc., a separate document verifying the authorization to sign for such applicant is required. I declare under penalty of perjury that the foregoing is true and correct. Executed on (Date) Applicant's Signature Applicant's Printed Name at �TN ih1r rQ , California Page 4 of 4 SIP1ann1m9kCIoaml- Caunter FormsWOOapolcaticn 1/16 Project Description Proposed New Residential Development 1010 S. Harbor Blvd, Santa Ana CV Santa Ana 5 Inv., LLC (City Ventures) is proposing to develop 79 townhomes on the property located at 1010 S. Harbor Boulevard within the North Harbor Specific Plan area, Corridor District. There are two product types proposed including Tuck -Under Townhomes and Courtyard Townhomes as defined in the Specific Plan. Units range in size from 1,259 to 1,913 square feet with 2 -4 bedrooms and attached two car garages (tandem and side by side). There are several open space areas within the project including a tot lot, bocce ball court, citrus garden, small dog park and a village green for throwing a ball or just relaxing on a bench, In order to meet the requirement of the City's Inclusionary Housing Ordinance, 12 of the homes will be reserved for moderate income households. I 'GAV;UD>t . .. .. ..... . ti . ... .......... . Un HQ & 63 3 EXHIBIT 4 SCHEDULE OF PERFORMANCE FOR CONSTRUCTION OF INCLUSIONARY UNITS Inclusionary Housing Agreement — Ownership Project City of Santa Ana January 2015 mC,) x(C)0 oz L UJ cc Zao� .�CEUU LL �wzo QO F— Q Z � J LL W0 U a z; U� 7M3AV IM3 IS23 —_ —_ �___ —_ _ —_ k 3 g � a O ITV 1 I m 0 z 0 �e map X v w W � m 2 I rc 5 >= Zm'o aoa x Jw� M a aw @'m I mC,) x(C)0 oz L UJ cc Zao� .�CEUU LL �wzo QO F— Q Z � J LL W0 U a z; U� 7M3AV IM3 IS23 —_ —_ �___ —_ _ —_ k 3 g � a O ITV 1 I m 0 z 0 �e map X v w W � m 2 I rc 5 >= Zm'o aoa x Jw� M EXHIBIT 5 INCLUSIONARY HOUSING COVENANTS DECLARATION Inclus !on ary Housing Agreement— Ownership Project City of Santa Ana January 2015 RECORDING REQUESTED BY WFIXTA.WWk • . r. City of Santa Ana 20 Civic Center Plaza Santa Ana, California 92701 Attention: City Clerk To be recorded without fee. (Space Above This Line For Recorder's Use Only) (Government Code, §§ 6103 and 27383) DECLARATION OF INCLUSIONARY HOUSING COVENANTS, RESALE RESTRICTIONS AND CITY'S OPTION TO PURCHASE FX40 =1 "T 14 AT (PROPERTY ADDRESS) This DECLARATION OF INCLUSIONARY HOUSING COVENANTS, RESALE RESTRICTIONS AND CITY'S OPTION TO PURCHASE AGREEMENT ( "Inclusionary Housing Covenants Declaration "), dated as of , is made by and between ( "Homebuyer ") and the CITY OF SANTA ANA ( "City "), a charter city and municipal corporation organized and existing under the Constitution and laws of the State of California. RECITALS A. The Homebuyer is acquiring title to an Inclusionary Unit, which is more particularly described in Exhibit 1. The Inclusionary Unit was originally constructed as part of a development that was approved by the City subject to the requirement that one or more of the units be designated and maintained as affordable to Moderate Income Households. B. The Homebuyer is a Moderate Income Household as defined in this Inclusionary Housing Covenant Declaration, and meets the eligibility requirements necessary to acquire the Inclusionary Unit as set forth in Section IV of the Administrative Procedures Manual. Inclusionary Housing Covenants Declaration Page 1 City of Santa Ana January 2015 C. The Homebuyer is acquiring the Inclusionary Unit at the Affordable Sales Price, which is less than the Fair Market Value for the Inclusionary Unit. The Inclusionary Unit is being sold for a reduced price as a direct result of the requirements imposed pursuant to the City's Housing Opportunity Ordinance ( "Ordinance "). In consideration for the right to acquire the Inclusionary Unit at a reduced price, the Homebuyer, its successors and assigns agree to enter into, and be bound by, the terms and conditions of this Inclusionary Housing Covenants Declaration. D. The purpose of this Inclusionary, Housing Covenants Declaration is to ensure that the Inclusionary Unit is only purchased and occupied by a Moderate Income Household. This Inclusionary Housing Covenants Declaration accomplishes this purpose by, among other things, imposing conditions on the Owner's future resale of the Inclusionary Unit, and requiring that the Owner maintain the Inclusionary Unit as the Owner's Primary Residence. The Homebuyer is required to execute this Inclusionary Housing Covenants Declaration as a condition of purchasing the Inclusionary Unit. This Inclusionary Housing Covenants Declaration is secured by the City Deed of Trust executed by the Homebuyer. Now, therefore, in consideration of the mutual promises set forth in this Inclusionary Housing Covenants Declaration, the receipt and sufficiency of which is acknowledged by the City and the Homebuyer, the Parties agree as follows: Inclusionary Housing Covenants Declaration Page 2 City of Santa Ana January 2015 DEFINITION OF TERMS As used in this Inclusionary Housing Covenants Declaration, the terms set forth below shall have the following meanings: Adjusted Household Size Appropriate for the Unit is based on the H &SC Section 50052.5 definition, and is only used in the Affordable Housing Cost calculations. For Affordable Housing Cost calculation purposes, the household size is set at one person in the case of a studio unit, two persons in the case of a one - bedroom unit, three persons in the case of a two- bedroom unit, four persons in the case of a three - bedroom unit, and five persons in the case of a four - bedroom unit. This household size standard is used in the Affordable Housing Cost calculations; it is not an occupancy limit. Administrative Procedures means the Affordable Ownership Housing Administrative Procedures promulgated by the Executive Director pursuant to the Ordinance. Administrative Procedures Manual is the Affordable Ownership Housing Administrative Procedures Manual — Owner Requirements dated January 2015, which has been prepared by the City for the implementation and enforcement of the Ordinance. A copy of the Administrative Procedures Manual shall be maintained on file with the City, and shall be provided to each Homebuyer of an Inclusionary Unit. Affordable Housing Cost means the maximum costs that can be borne by Moderate Income Household based on the requirements imposed by H &SC Section 50052.5. The calculation methodology is described in Section VI of the Administrative Procedures Manual. Affordability Period shall be set at 45 years in the Inclusionary Housing Covenant Declaration recorded on legal title to the Inclusionary Unit. The covenant period is set at 45 years following the date of the first sale of the Inclusionary Unit, Affordable Sales Price means the maximum price that can be charged for an Inclusionary Unit. The Affordable Sales Price is equal to the lesser of: 1. The sum of the Supportable Mortgage plus the Benchmark Down Payment; or Inclusionary Housing Covenants Declaration Page 3 City of Santa Ana January 2015 2. The purchase price prospective buyers are willing to pay in return for purchasing a home that is subject to restrictive covenants. The statutorily set Affordable Sales Prices for the initial sale of each Inclusionary Unit are shown in Exhibit 6 to the Inclusionary Housing Agreement. The Affordable Sales Prices for Inclusionary Units shall be adjusted quarterly. Assumption Agreement means the Disclosure, Acknowledgement and Assumption Agreement in the form attached as Exhibit 4 to this Inclusionary Housing Covenants Declaration that shall be entered into between the City and a transferee as a condition of an Exempt Transfer. Benchmark Household Income is used in the Affordable Housing Cost calculations, and is based on the requirements imposed by H &SC Section 50052.5. For a Moderate Income Household, the Benchmark Household Income is based on 110% of the County Median Income for an Adjusted Household Size Appropriate for the Unit. City means the City of Santa Ana, California. City Deed of Trust means a deed of trust, that secures the Owner's obligation to comply with the obligations imposed by the Inclusionary Housing Covenant Declaration. City Manager means the City Manager of the City of Santa Ana. City's Purchase Option means the irrevocable option that the Owner must offer to the City under the circumstances defined in Article 3 - Section II of this Inclusionary Housing Covenants Declaration. City's Share of Excess Proceeds means 50% of the Excess Proceeds generated under an Extraordinary Sale. The City's Share of Excess Proceeds, if received, shall be deposited in the City's Inclusionary Housing Fund. County means the County of Orange. County Median Income shall mean the Median Income adjusted by actual household size as published annually by HCD for the County. Default means the failure of an Owner to perform any action or covenant required by this Inclusionary Housing Covenants Declaration within the time Inclusionary Housing Covenants Declaration Page 4 City of Santa Ana January 2015 period provided herein following notice and opportunity to cure, as set forth in Article 5 — Section III of this Inclusionary, Housing Covenants Declaration. Eligible Purchaser shall mean a Homebuyer who meets the eligibility criteria set forth in these Administrative Procedures. Excess Proceeds means the difference between the Extraordinary Sales Price and the Affordable Sales Price the Inclusionary Unit at the time of the Extraordinary Sale. Executive Director is the Executive Director of the Community Development Agency of the City. The Executive Director, or designee, has the ultimate authority to evaluate appeals submitted in relation to the Administrative Procedures. Exempt Transfer means the following: A transfer resulting from the death of the Owner; A transfer by the Owner where the spouse or domestic partner becomes a co -owner of the Inclusionary Unit; A transfer of title to a spouse or domestic partner as part of divorce or dissolution proceedings; and A transfer by the Owner into a trust in which the Owner or Owners are beneficiaries, provided that the Owner or Owners continue to maintain the Inclusionary Unit as their Primary Residence. A transfer by the Owner of a non - possessory interest in the Property, such as an easement or license for utilities or other like purposes; the granting of ingress or egress rights over or across the Property or a portion thereof; or a modification to the non - exclusive common area rights of any Owner located in a common interest subdivision development. 6. A condemnation, or conveyance in lieu of condemnation, that does not preclude the Owner's continued use and occupancy of the Inclusionary Unit, such as a street widening or other incidental taking that does not preclude continued occupancy of the Inclusionary, Unit, or a taking of an interest in a portion of the common area appurtenant to any Inclusionary Unit located in a common interest development. Inclusionary Housing Covenants Declaration Page 5 City of Santa Ana January 2015 Exhibits The following exhibits are attached to this Inclusionary Housing Covenants Declaration and incorporated herein by this reference: 1. Exhibit 1: Property Description 2. Exhibit 2: Occupancy Recertification Form 3. Exhibit 3: Notice of Intent to Transfer 4. Exhibit 4: Assumption Agreement 5. Exhibit 5: Notice of Intent to Sell 6. Exhibit 6: Notice of Extraordinary Sale Extraordinary Sale means a sale of the Inclusionary Unit to a buyer who is not an Eligible Purchaser, when an Eligible Purchaser has not been secured within the timeframes required by this Inclusionary Housing Covenants Declaration, and the City has opted not to exercise the City's Purchase Option within the timeframes allowed pursuant to this Inclusionary Housing Covenants Declaration. Extraordinary Sales Price means the gross sales proceeds generated by an Extraordinary Sales executed under the terms included in Article 3 - Section III of this Inclusionary Housing Covenants Declaration. Fair Market Vague means the value of the Inclusionary Unit under normal circumstances in which the seller and the buyer freely negotiate the terms of the transfer of ownership. The Fair Market Value must be established by a licensed Real Estate agent based on three comparable properties. Gross Household Income means all income from whatever source from all Adult Household members, which is anticipated to be received during the 12- month period following the date of the determination of Gross Income. The applicable sources of income are defined in California Code of Regulations Title 25 Housing and Community Development Section 6914. The definition includes the following specific requirements: 1. Except as provided in subdivision (2), all payments from all sources received by the head of Household (even if temporarily absent) and each additional member of the Household who is not a minor shall be included in the annual income of a Household. Gross Income shall include, but not be limited to: Inclusionary Housing Covenants Declaration Page 6 City of Santa Ana January 2015 a. The gross amount, before any payroll deductions, of wages and salaries, overtime pay, commissions, fees, tips and bonuses; b. The net income from operation of a business or profession or from rental or real or personal property (for this purpose, expenditures for business expansion or amortization of capital indebtedness shall not be deducted to determine the net income from a business); G. Interest and dividends; d. The full amount of periodic payments received from social security, annuities, insurance policies, retirement funds, pensions, disability or death benefits and other similar types of periodic receipts (but see subdivision (2)(c)); e. Payments in lieu of earnings, such as unemployment and disability compensation, worker's compensation and severance pay; Public Assistance. If the public assistance payment includes an amount specifically designated for shelter and utilities which is subject to adjustment by the public assistance agency in accordance with the actual cost of shelter and utilities, the amount of public assistance income to be included as income shall consist of: The amount of the allowance or grant exclusive of the amount specifically designated for shelter and utilities, plus ii. The maximum amount which the public assistance agency could in fact allow for the Household for shelter and utilities. Periodic and determinable allowances such as alimony and child support payments, and regular contributions or gifts received from persons not residing in the dwelling; h. All regular pay, special pay and allowances of a member of the Armed Forces (whether or not living in the dwelling) who is head of the Household or spouse or domestic partner (but see subdivision (2)(e)); Where a Household has net assets in excess of $5,000, income shall include the actual amount of income, if any, derived from all of Inclusionary Housing Covenants Declaration Page 7 City of Santa Ana January 2015 the net Household assets or 10 percent of the value of all such assets, whichever is greater. For purposes of this section, net Household assets means value of equity in real property other than the Household's full -time residence, savings, stocks, bonds, and other forms of capital investment. The value of necessary items such as furniture and automobiles shall be excluded. 2. The following items shall not be considered as income: a. Casual, sporadic or irregular gifts; b. Amounts which are specifically for or in reimbursement of the cost of medical expenses; C. Lump -sum additions to Household assets, such as inheritances, insurance payments (including payments under health and accident insurance and worker's compensation), capital gains and settlement for personal or property losses; d. Amounts of educational scholarships paid directly to the student or to the educational institution, and amounts paid by the government to a veteran for use in meeting the costs of tuition, fees, books and equipment. Any amounts of such scholarships, or payments to veterans not used for the above purposes of which are available for subsistence are to be included in income; e. The special pay to a serviceman head of a Household away from home and exposed to hostile fire; f. Relocation payments made pursuant to federal, state, or local relocation law; g. Foster child care payments; h. The value of coupon allotments for the purchase of food pursuant to the Food Stamp Act of 1964 which is in excess of the amount actually charged the eligible Household; i. Payments received pursuant to participation in the following volunteer programs under the ACTION Agency: Inclusionary Housing Covenants Declaration Page 8 City of Santa Ana January 2015 National Volunteer Antipoverty Programs which include VISTA, Service Learning Programs and Special Volunteer Programs. National Older American Volunteer Programs for persons aged 60 and over which include Retired Senior Volunteer Programs, Foster Grandparent Program, Older American Community Services Program, and National Volunteer Program to Assist Small Business Experience, Service Corps of Retired Executive (SCORE) and Active Corps of Executives (ACE). Homebuyer means an Eligible Purchaser that has executed an agreement to purchase an Inclusionary Unit. Homebuyer Purchase Price means the means the original price paid by the Homebuyer to purchase the Inclusionary Unit, exclusive of any closing or transaction costs. The Homebuyer Purchase Price shall not exceed the Affordable Sales Price. HCD means the California Housing and Community Development Department. H &SC shall mean the California Health and Safety Code. Household means all the persons who will occupy the Inclusionary Unit as their Primary Residence. A child who is subject to a legally- binding shared - custody agreement, in which the child resides with the Household at least 50% of the time, is counted as a member of the Household. Excluded from the definition of Household are live -in caregivers /caretakers, foster children, unborn children and children being pursued for legal custody or adoption that are not currently living with the Household. Inclusionary Housing Covenants Declaration means this Declaration of Inclusionary Housing Covenants, Conditions and Restrictions. Inclusionary Housing Fund means a separate fund of the City which is codified in Article XVI11.1 Section 41 -1909 of the City's Municipal Code. The fund was established for the specific purpose of providing the City with funds to assist in the development of housing that is affordable to low and moderate income households. The allowable uses of Inclusionary Housing Funds, and the related reporting are described in Attachment 1 of the Administrative Procedures Manual. Incluslonary Housing Covenants Declaration Page 9 City of Santa Ana January 2015 Inclusionary Unit means a home in Santa Ana that is made affordable by an Inclusionary Housing Covenant Declaration that restricts ownership, occupancy and the Affordable Sales Price as described in the Administrative Procedures Manual. Median Income is calculated by HCD using non - aggregated census income data and applying trending factors for metropolitan statistical areas (MSA) throughout the country. The MSA for Santa Ana is Orange County. Moderate Income refers to Households whose incomes meet the standards defined by the H &SC Section 50093. Generally, Moderate Income means household income that does not exceed 120% of the County Median Income, as adjusted for Household size. The maximum household income amount for Moderate Income Households shall be set at the amount published by HCD annually. Moderate Income Household shall mean individuals or Households who have an adjusted Gross Income that does not exceed Moderate Income. Net Resale Proceeds means the Resale Price for the Inclusionary Unit minus the following amounts and costs in the following priority order: 1. Escrow fees, transfer taxes, recording fees, and any other customary non- recurring closing costs; 2. Brokerage commissions and similar transaction costs; and 3. Repayment of the outstanding balance of the Senior Loan. Notice of Extraordinary Sale means the form provided in Exhibit 6 to this Inclusionary Housing Covenants Declaration. Notice of Intent to Sell means the form provided in Exhibit 5 to this Inclusionary Housing Covenants Declaration. Notice of Intent to Transfer means the form provided in Exhibit 3 to this Inclusionary Housing Covenants Declaration. Ordinance means the Housing Opportunity Ordinance adopted by the City Council on November 28, 2011, which is codified in Article XVIII.1 Section 41- 1900 et seq. of the City's Municipal Code. Inclusionary Housing Covenants Declaration Page 10 City of Santa Ana January 2015 Owner means the current owner of an Inclusionary Unit. Party and Parties mean the City and the Homebuyer as parties to the Inclusionary Housing Covenants Declaration, Permitted Sales are defined as a sale to an Eligible Purchaser or a sale executed under the City's Purchase Option. Primary Residence is defined as the only home that may be owned by the Owner. The Owner must reside in the Inclusionary Unit for not less than 10 out of every 12 months. Program Director has the day -to -day authority for making determinations related to the Ordinance and Administrative Procedures Manual. The Program Director will be appointed by the Executive Director. Prohibited Sales and Transfers are defined as any sale or transfer that is not explicitly allowed by this Inclusionary Housing Covenants Declaration. Prohibited Transfers specifically include any transfer of a use, rental or leasehold interest in the Inclusionary Unit. Project means the owner - occupied housing project proposed to be developed on the Property at the Developer's sole cost and expense. Project CC &Rs means the Declaration of Covenants, Conditions and Restrictions of the Project recorded or to be recorded against the entirety of the Property and applicable to the Inclusionary Unit and the Homebuyer. Property means the real property on which the Project is to be developed, for which the legal description is provided in Exhibit 1 to the Inclusionary Housing Agreement. Recordation Date means the date of recording in the Official Records of the County of Orange, California of the City Deed of Trust and the Inclusionary Housing Covenants Declaration. Resale means the resale of the Inclusionary Unit by the Owner. Prior to the Resale of the Inclusionary Unit, the Owner must submit a Notice of Resale to the City as set forth in Exhibit 4 to this Inclusionary Housing Covenants Declaration. Resale Price is defined as the lesser of the Fair Market Value or the Affordable Sales Price. Inclusionary Housing Covenants Declaration Page 11 City of Santa Ana January 2015 Seller means the current Owner of the Inclusionary Unit in the context of the sale of the Inclusionary Unit, Senior Lender means a bank, savings and loan association, insurance company, pension fund, publicly traded real estate investment trust, governmental agency, charitable organization or other governmentally regulated entity regularly engaged in making residential real estate loans. Senior Loan means a purchase money loan of funds to be used by the Homebuyer for financing the acquisition of the Inclusionary Unit, or a refinancing approved by the City, which loan is in a lien position prior to this Inclusionary Housing Covenants Declaration. Supportable Mortgage means the mortgage amount that can be supported by a Moderate Income Household based on the Affordable Housing Cost calculations. The mortgage calculation is based on the prevailing market interest rate for a 30- year fully amortizing mortgage with a fixed interest rate. See Section VI -B of the Administrative Procedures Manual for an explanation of the calculation methodology. Transfer shall mean any sale, transfer, lease, exchange, assignment or conveyance of an Inclusionary Unit, including any portion or interest in an Inclusionary Unit or other disposition of any interest in an Inclusionary Unit, whether voluntary or involuntary. Inclusionary Housing Covenants Declaration Page 12 City of Santa Ana January 2015 ARTICLE 1 RESTRICTIONS Owner Acknowledgments and Agreements: Owner hereby acknowledges and agrees that taking title to the Inclusionary Unit shall constitute Owners acknowledgment of and agreement to the following: Occupancy Requirements I -A. The Owner shall occupy and continually use the Inclusionary Unit as the Owner's Primary Residence during the Affordability Period, On an annual basis, the Inclusionary Program Director will send the Owner an Occupancy Recertification Form to be filled out and returned to the City within thirty (30) days of receipt. The Owner shall affirm that they are occupying the Inclusionary Unit as their Primary Residence. The Owner will be required to submit copies of two current utility bills, or other evidence of occupancy that is acceptable to the City, as part of the annual recertification process. I -B. If an Owner vacates the Inclusionary Unit, or for any reason does not continue to occupy the Inclusionary Unit as its Primary Residence, the City may declare the Owner in Default pursuant to Article 1- Section I of this Inclusionary Housing Covenants Declaration, and exercise any or all of its rights and remedies hereunder, including without limitation the City's Purchase Option pursuant to Article 3 - Section II of this Inclusionary Housing Covenants Declaration. II. Resale and Transfer Restrictions II -A. The Inclusionary Unit is being acquired by the Homebuyer at a cost that is below the Fair Market Value for the Inclusionary Unit, and that such Inclusionary Unit is subject to resale restrictions and the City's Purchase Option contained in this Inclusionary Housing Covenants Declaration. Any resale or transfer of the Inclusionary Unit in violation of this Inclusionary Housing Covenants Declaration shall be voidable by the City. 11 -B. The Owner's right to resell the Inclusionary Unit at the Fair Market Value is very limited, and in certain instances, the City will have the option to purchase the Inclusionary Unit from the Owner at the Affordable Sales Price. Inclusionary Housing Covenants Declaration Page 13 City of Santa Ana January 2015 II -C. The Inclusionary Unit will not necessarily appreciate in value during the duration of its ownership, and the Affordable Sales Price may decrease from the amount the Owner paid to acquire the Inclusionary Unit. Thus, when the Owner resells the Inclusionary Unit, the sales proceeds received by the Owner may be less than the amount the Owner paid to acquire the Inclusionary Unit. II -D. In the event that the Inclusionary Unit is sold for the Fair Market Value, either through an Extraordinary Sale or pursuant to a foreclosure sale, the Owner must pay to the City the City Share of Excess Proceeds, which is set at fifty percent (50 %) of the difference between the Affordable Sales Price and the Net Resale Proceeds received from the sale of the Inclusionary Unit. 119. Refinancing Limits III -A. The Owner is not permitted to refinance a Senior Loan for more than the outstanding principal amount of the Senior Loan, plus the cost of Qualified Capital Improvements, plus the customary fees and costs associated with obtaining the new Senior Loan. However, in no event can the refinanced Senior Loan be set at an amount that exceeds the then current Supportable Mortgage. III -B. If an Owner refinances the Senior Loan in violation of the requirements imposed in the Administrative Procedures Manual and this Inclusionary Housing Covenants Declaration, the City may declare the Owner in Default pursuant to Article I - Section III of this Inclusionary Housing Covenants Declaration, and exercise any or all of its rights and remedies hereunder. IV. Project CC &Rs The Inclusionary Unit is subject to the Project CC &Rs. The Homebuyer acknowledges and agrees that the Homebuyer is obligated to comply with all of the terms, conditions, covenants and restrictions set forth in the Project CC &Rs. Inclusionary Housing Covenants Declaration Page 14 Clty of Santa Are January 2015 ARTICLE 2 TRANSFER PROCEDURES I. Exempt Transfers of the Inclusionary Unit The following transfer procedures apply to Exempt Transfers: I -A. Transfer by Inheritance: 1. If an Exempt Transfer is made by inheritance or rights of survival, the trustee, executor or new Owner shall notify the City in writing of the change in ownership of the Inclusionary Unit within 20 days of such event giving rise to such Exempt Transfer. 2. Any such transferee shall be bound by and subject to the provisions of this Inclusionary Housing Covenants Declaration and the City Deed of Trust. The trustee, executor or new Owner shall execute, acknowledge and deliver to the City, within such 45 -day period, an Assumption Agreement whereby the transferee agrees to be bound by such documents. 3. The failure to notify the City in writing and execute an Assumption Agreement within the timeframes required by this Section shall constitute a Default; provided that such transferee shall be bound by and subject to the provisions of this Inclusionary Housing Covenants Declaration and the City Deed of Trust notwithstanding its failure to deliver such executed and recordable Assumption Agreement. I -B. Other Exempt Transfers: If the Owner desires to transfer the Inclusionary Unit by an Exempt Transfer other than inheritance, the Owner shall provide the City with a Notice of Intent to Transfer in the form attached as Exhibit 3 to this Inclusionary Housing Covenants Declaration, together with any other documentation the City may reasonably request in order to ensure that the transfer is an Exempt Transfer. II. Notice of Intent to Transfer — Exempt Transfer In the case of an Exempt Transfer, this Inclusionary Housing Covenants Declaration imposes the following noticing obligations on the City and the Owner: II -A. City Obligations: Inclusionary Housing Covenants Declaration Page 15 City of Santa Ana January 2015 The City shall have 45 days after receipt by the City of a Notice of Intent to Transfer and other documentation to deliver written notice to the Owner that the City either approves the transfer as an Exempt Transfer or disapproves the transfer. The transfer shall be deemed an Exempt Transfer if the City fails to disapprove the proposed transfer within such 45 -day period. II -B. Owner Obligations: The Owner shall complete the Exempt Transfer, including recordation of all applicable documents, within 60 days after receipt of approval, or deemed approval, of the transfer. 2. Any such transferee of the fee interest in the Inclusionary Unit shall be bound by and subject to the provisions of this Inclusionary Housing Covenants Declaration and the City Deed of Trust as the Owner and, as a condition to the conveyance of the Inclusionary Unit, shall execute, acknowledge and deliver to the City an Assumption Agreement. 3. The failure to comply with the requirements of this Section in undertaking any transfer of the Inclusionary Unit shall constitute a Default; provided that any transferee of the Inclusionary Unit shall be bound by and subject to the provisions of this Inclusionary Housing Covenants Declaration and the City Deed of Trust as the Owner notwithstanding its failure to deliver such executed and recordable Assumption Agreement. III. Transfer of the Inclusionary Unit without the City's Approval III -A. If the City determines that a proposed transfer is a Prohibited Transfer, the Owner shall not transfer the Inclusionary Unit. III -B. Any transfer of an Inclusionary Unit without the City's approval shall be voidable. In addition to all other rights and remedies the City may have under this Inclusionary Housing Covenants Declaration, the City shall have the right to exercise the City's Purchase Option. This may be exercised against the transferee or the Owner under such Prohibited Transfer. Inclusionary Housing Covenants Declaration Page 16 City of Santa Ana January 2015 ARTICLE 3 RESALE PROCEDURES Permitted Sale -A. Notice of Permitted Sale: If an Owner desires to sell the Inclusionary Unit, the Owner shall provide City with a Notice of Intent to Sell in the form attached as Exhibit 5: 1. Within fifteen (15) business days after receipt of such Notice, City shall provide the Owner with the Affordable Sales Price and the maximum incomes of Eligible Purchasers. 2. The Owner shall market the Inclusionary Unit to Eligible Purchasers for a period of not less than ninety (90) days from providing the Notice. 3. If the Owner is unable to locate an Eligible Purchaser who is ready, willing and able to enter into a purchase agreement for the Inclusionary Unit within the 90 -day period: a. The Owner must demonstrate to the Inclusionary Program Director that all reasonable efforts were made to diligently market the Inclusionary Unit. b. If the Inclusionary Program Director determines that adequate marketing efforts were pursued, the City shall have 30 days from after the expiration of the period to exercise City's Purchase Option under Article 3 - Section IL C. If the City does not exercise the City's Purchase Option, the Owner may sell the Inclusionary Unit to a buyer is not an Eligible Purchaser under the Extraordinary Sale terms identified in Article 3 - Section 111. I -B. Inspection and Repair Costs: Upon receipt of a Notice of Intent to Sell, the City shall have the right to inspect the Inclusionary Unit to determine whether any violations of applicable laws or ordinances exist. 1. The City may hire a third party to undertake the inspection. Inclusionary Housing Covenants Declaration Page 17 City of Santa Ana January 2015 2. The inspection shall take place within fifteen (15) days after receipt of the Notice of Intent to Sell. 3. The City shall undertake the inspection at a reasonable time, and provide the Owner with at least 24 advance notice prior to the inspection. 4. In the event any violations are discovered, within thirty (30) days, the City shall provide the Owner with a written report describing the necessary repairs. 5. The Owner shall have the option to either: a. Repair or replace the items on such report at Owner's cost prior to closing, without extending the closing date; or b. At closing, cause the escrow holder to pay the repair costs to the buyer out of Seller's gross proceeds of the sale. 6. If an Owner elects to repair or replace the items on such report, the City shall have the right to re- inspect the Inclusionary Unit after the repairs and /or replacements are complete. If City determines that deficiencies still remain, the Owner shall cause the escrow agent at closing to pay to buyer from Seller's gross proceeds the repair costs in such amounts as the City determines are necessary to complete the remaining repairs and /or replacements. The City's determination shall be final. I -C. Sales Price: The sale of the Inclusionary Unit pursuant to this Section may only be made to an Eligible Purchaser at a price that does not exceed the lesser of the Affordable Sales Price or the Fair Market Value of the Inclusionary Unit. 1 -D. At close of escrow, the Eligible Purchaser shall deliver or cause to be delivered into escrow: 1. A Declaration of Inclusionary Housing Covenants, Resale Restrictions and City's Option to Purchase Agreement in substantially the form of this Inclusionary Housing Covenants Declaration, approved by the City, and executed by the City and the Eligible Purchaser, together with a City Deed of Trust securing the obligations thereunder. 2. The required down payment and all documents required by the Eligible Purchaser's Senior Lender. Inclusionary Housing Covenants Declaration Page 18 City of Santa Ana January 2015 I -E. Proceeds from Permitted Sale: To the extent funds are available, the gross proceeds from a Permitted Sale shall be distributed in the following priority: 1. Escrow fees, transfer taxes, recording fees, and any other customary non- recurring closing costs; 2. Brokerage commissions and similar transaction costs; 3. Repayment of the outstanding balance of the Senior Loan; 4. Reimbursement to the buyer of all repair costs funded by the buyer pursuant to this Section; and 5. Any remaining amounts shall be paid to the Seller. I -F. Personal Property: Any sums paid to an Owner by an Eligible Purchaser for personal property shall not be part of the Affordable Sales Price. Any consideration, of any nature whatsoever, paid by an Eligible Purchaser to the Owner must be fully disclosed to and approved by the City in advance. I -G. Closing: 1. At closing, the Owner shall convey fee title to the Eligible Purchaser by standard title company form grant deed. 2. The Owner shall cause the title company to issue to the Eligible Purchaser a CLTA standard coverage owner's form of title insurance policy in the amount of the Affordable Sales Price insuring title to the Inclusionary Unit is vested in the Eligible Purchaser, subject to the following exclusions from coverage: a. Current taxes and assessments not yet due; b. This Inclusionary Housing Covenants Declaration and all documents recorded pursuant to this Inclusionary Housing Covenants Declaration; and C. Such other matters (other than encumbrances created or suffered by the Owner) that were exceptions to title on the date of this Inclusionary Housing Covenants Declaration. Inclusionary Housing Covenants Declaration Page 19 City of Santa Ana January 2015 3. All other closing costs shall be paid by the Seller or the Eligible Purchaser pursuant to the custom in Orange County. II. City's Purchase Option II -A. Purchase Option: By taking title to the Inclusionary Unit, the Owner irrevocably grants the City's Purchase Option upon the occurrence of any of the following: 1. The Owner is unable to identify an Eligible Purchaser pursuant to and within the times set forth in Article 3 - Section I; 2. Any Prohibited Transfer or Prohibited Sale by the Owner; 3. The Owner is in default of the occupancy requirement set forth in Article 1 — Section 1; and 4. An Event of Default as defined in Article 1: a. City's Purchase Option shall be in addition to any other remedy provided in this Inclusionary Housing Covenants Declaration for an Event of Default. b. By taking title to the Inclusionary Unit, the Owner agrees that City's facilitation of the transfers contemplated hereby constitute adequate consideration for the grant of the City's Purchase Option in the Event of Default. II -B. Procedure Upon Exercise of Option: 1. The City shall exercise the City's Purchase Option by delivering written notice to the Owner (and to transferee, if applicable). 2. Closing of escrow shall occur within 120 days (plus any time delays caused by the Owner), or such additional time as reasonably determined by the City is necessary under the circumstances after the date of the City's written notice exercising the City's Purchase Option. 3. Proceeds from the sale shall be distributed in the manner provided in this Section. Inclusionary Housing Covenants Declaration Page 20 City of Santa Ana January 2015 4. Closing shall occur in the manner provided in this Section, with the City having the rights and responsibilities of the Eligible Purchaser provided thereunder. II -C. Assignment of City's Purchase Option: After the City has exercised the City's Purchase Option, the City may, without the Owner's or transferee's consent, assign the City's Purchase Option to an Eligible Purchaser or to a government or non - profit organization that agrees to be subject to this Inclusionary, Housing Covenants Declaration. Such assignment shall not extend any time limits contained in this Inclusionary Housing Covenants Declaration. II -D. Failure to Close: 1. If the City exercises the City's Purchase Option pursuant to this Section, and fails to close escrow pursuant to the identified timeframes, the Owner may conduct an Extraordinary Sale under Article 3 - Section III. 2. If the City exercises the City's Purchase Option pursuant to a Prohibited Transfer, a Prohibited Sale or an Event of Default, and the City fails to close escrow pursuant to this Section, then the City shall be deemed to retain all remedies available under Article 5 - Section IV. II -E. Power of Attorney: By taking title to the Inclusionary Unit, the Owner grants to the City an irrevocable power of attorney that authorizes the City to act on the Owner's behalf to execute, acknowledge and deliver any and all documents related to the City's Purchase Option. III. Extraordinary Sale The purpose of this Section is to permit the sale of the Inclusionary Unit to a buyer who is not an Eligible Purchaser when an Eligible Purchaser has not been secured and the City's Purchase Option has not been exercised. III -A. Notice of Extraordinary Sale: The Owner shall notify the City of the Owner's intent to make an Extraordinary Sale by delivering a Notice of Extraordinary Sale in the form attached as Exhibit 6. 1. The Notice of Extraordinary Sale shall identify the Fair Market Value of the Inclusionary Unit. Inclusionary Housing Covenants Declaration Page 21 City of Santa Ana January 2015 2. The Owner shall be required to sell the Inclusionary Unit at a price not less than the Fair Market Value, unless otherwise approved by the City in writing. 3. All transfer documents relating to the Extraordinary Sale shall be submitted to the City for its review and approval as consistent with the terms of this Inclusionary Housing Covenants Declaration. III -B. Distribution of Proceeds: The Extraordinary Sales Price shall be distributed in the following priority to the extent funds are available: Escrow fees, transfer taxes, recording fees, and any other customary non- recurring closing costs; 1. Brokerage commissions and similar transaction costs; 2. Repayment of the outstanding balance of the Senior Loan; 3. Payment to the City of the City Share of Excess Sales Proceeds; and 4. Any remaining amounts shall be paid to the Seller. III -C. Effect of Extraordinary Sale: 1. Upon the close of escrow for an Extraordinary Sale in compliance with the provisions of this Section, the purchaser shall acquire title to the Inclusionary Unit free and clear of the provisions of this Inclusionary Housing Covenants Declaration, including the City's Purchase Option. 2. Pursuant to Article 5 - Section I, and in accordance with this Section, the City agrees to execute, acknowledge and record a release of the Inclusionary Unit from the provisions of this Inclusionary Housing Covenants Declaration. III -D. Foreclosure Sale: In the event of a foreclosure sale, this Section shall impose the same obligations on the Owner and the City as in an Extraordinary Sale. All references to the "close of escrow" shall be replaced by "foreclosure sale." Inclusionary Housing Covenants Declaration Page 22 City of Santa Ana January 2015 ARTICLE 4 LENDER PROVISIONS I. Senior Loan Mortgages, deeds of trust, or any other form of conveyance required for any reasonable method of financing as a Senior Loan are permitted, but only as follows: I -A. For the sole purpose of securing a purchase money loan of funds to be used by an Owner for financing the acquisition of the Inclusionary Unit. The Senior Loan must comply with the requirements imposed by Section IV -D of the Administrative Procedures Manual; or I -B. For the sole purpose of refinancing a Senior Loan that was obtained by the Owner, and approved by the City, provided that the principal amount of such refinancing shall be limited to the outstanding principal then owed on the existing Senior Loan, plus any customary fees and costs associated with such current refinancing. II. Subordination II -A. This Inclusionary Housing Covenants Declaration shall be subordinate to the Senior Loan, so long as the Senior Lender agrees to the default and foreclosure provisions set forth in this Inclusionary Housing Covenants Declaration, or other alternative provisions proposed by the Senior Lender, and acceptable to the City in its sole discretion. II -B. In the event the City fails to timely cure a default under such Senior Loan, and the Senior Lender proceeds with foreclosure, or deed in lieu of foreclosure, of such Senior Loan, then any provisions herein or in any other collateral agreement restricting the use of the Inclusionary Unit to Moderate Income Households or otherwise restricting the Senior Lender's ability to sell the Inclusionary Unit based upon income qualification of the purchaser shall terminate and shall have no further force or effect on subsequent owners or purchasers of the Inclusionary Unit. II -C. In that event, any person, including the Senior Lender's successors and assigns, receiving title to the Inclusionary Unit through foreclosure, or deed in lieu of foreclosure, of such Senior Loan shall receive title to the Inclusionary Housing Covenants Declaration Page 23 City of Santa Ana January 2015 Property free and clear from such restrictions. The City shall promptly execute, acknowledge and deliver for recordation such subordination documents or agreements as necessary to confirm the foregoing subordination. III. Default and Foreclosure III -A. The City shall record a request for notice of default and any notice of sale under any deed of trust or mortgage with a power of sale encumbering the Inclusionary Unit pursuant to California Civil Code Section 2924b. Whether or not a request for a notice of default is recorded, the Owner shall provide a true and correct copy of any notice of default to the City within three (3) business days of the Owner's receipt. III -B. In the event of default and foreclosure, the City shall have the same rights as the Owner to cure any defaults and reinstate the Senior Loan prior to foreclosure sale or the acceptance of a deed in lieu of foreclosure by the Senior Lender. Such reinstatement shall be subject to the same fees, charges and penalties that would otherwise be assessed against the Owner. Nothing herein shall be construed as creating any obligation on the part of the City to cure any such default, nor shall this right to cure and reinstate operate to extend any time limitations in the default provisions of the underlying deed of trust or mortgage. III -C. If the trustee set forth in Senior Lender's deed of trust sells the Inclusionary Unit at a foreclosure sale, the proceeds shall be delivered in the following priority to the extent funds are available: 1. Payment of all delinquent assessments, if any, to the extent required by the Project CC &Rs; 2. Payment of all sums due and owing under the Senior Loan, including without limitation the principal amount, interest, fees and costs of sale; 3. Payment to the City of the City Share of Excess Sales Proceeds; 4. Repayment of all sums due and owing to junior creditors; and 5. Any remaining amounts shall be paid to the Owner. III -D. By taking a loan from a Senior Lender, the Owner represents that it has provided the Senior Lender with the necessary consent and authorization Inclusionary Housing Covenants Declaration Page 24 City of Santa Ana January 2015 to provide a monthly report of the payment status of the Owner and all other financial information concerning the Owner that the City reasonably requests. III -E. Except as otherwise expressly provided in a City approved subordination agreement, by making a loan to the Owner, Senior Lender grants to the City the option to purchase the Senior Loan from the Senior Lender at any time after the filing of a notice of default under the Senior Loan, but prior to consummation of the foreclosure or the giving of a deed -in -lieu of foreclosure for an amount equal to the entire indebtedness secured by the Senior Lender Deed of Trust: The City may exercise this option by giving Senior Lender written notice of its intent to do so: with respect to a foreclosure, at any time prior to the filing of a notice of sale under the Senior Loan; and with respect to a deed -in -lieu of foreclosure, within ten (10) days after receiving written notice from Senior Lender of its intent to accept a deed -in -lieu of foreclosure with respect to the Inclusionary Unit. Upon receipt of such written notice from the City, the Senior Lender shall promptly give the City a written statement setting forth the amount of the total indebtedness secured by the Senior Lender Deed of Trust, which shall be the purchase price for the Senior Loan, and a copy of the policy of title insurance insuring the priority and validity of the Senior Lender Deed of Trust. 3. Within ten (10) days after the City gives such written notice, the City shall establish an escrow at the title company insuring the Senior Lender Deed of Trust and concurrently therewith give the Senior Lender written notice thereof, and the City shall deposit the purchase price in such escrow. 4. Within fifteen (15) days after the Senior Lender's receipt of notice of the opening of the escrow, the Senior Lender shall deposit in the escrow: a. the promissory note evidencing the Senior Loan endorsed in favor of the City; Incluslonary Housing Covenants Declaration Page 25 City of Santa Ana January 2015 b. the original of the Senior Lender Deed of Trust; G. an assignment of the Senior Lender Deed of Trust duly executed by the Senior Lender and in recordable form; and d. all other documents, instruments, agreements, certificates and other items that evidence or secure the Senior Loan. III -F. The Senior Lender and the City shall execute and deliver escrow instructions and such other documents as may be reasonably necessary or appropriate in connection with such escrow and to implement the intent hereof. III -G. The escrow holder shall be instructed to close the escrow within two (2) business days after receipt of all such items and upon such close of escrow to issue to the City a CLTA Form No. 104.1 endorsement to the title policy, showing the City as Senior Lender's assignee with respect to the Senior Lender Deed of Trust. III -H. The City shall pay the escrow fees (irrespective of whether the escrow closes), recording fees and the premium for the CLTA Form No. 104.1 endorsement. Inclusionary Housing Covenants Declaration Page 26 City of Santa Ana January 2015 ARTICLE 5 MISCELLANEOUS I. Term of the Inclusionary Housing Covenants Declaration This Inclusionary Housing Covenants Declaration shall become effective upon its execution and delivery. 2. This Inclusionary Housing Covenants Declaration shall terminate as to the Inclusionary Unit at the earliest of: a. as provided under the terms and conditions of any subordination agreement between a Senior Lender and the City; or b. upon the close of escrow for an Extraordinary Sale; or C. at the end of the Affordability Period. 3. Upon termination of the Affordability Period, on request of the then record Owner of the Property, the City shall execute, acknowledge and record a termination of the Inclusionary Housing Covenants Declaration and the City Deed of Trust. To the extent permitted by law, any unfulfilled obligations of any Owner shall survive the termination of the Inclusionary Housing Covenants Declaration, but it shall no longer affect title to the Property. II. Maintenance and Use 1. The Owner shall maintain the interior and exclusive use areas of the Inclusionary Unit in a clean, well maintained condition consistent with the neighborhood, as set forth in the Project CC &Rs. 2. The Inclusionary Unit shall be used and occupied by the Owner solely for residential purposes, and in addition to the residential purpose may also be used for any accessory uses that comply with the provisions of the Santa Ana Municipal Code, as it may be amended from time to time. 3. No Owner shall grant use of, rent or lease all or any part of the Inclusionary Unit, but shall occupy the Inclusionary Unit as its Primary Residence. Inclusionary Housing Covenants Declaration Page 27 City of Santa Ana January 2015 The Owner shall comply with all of the use and maintenance provisions and obligations set forth in the Project CC &Rs. III. Default If the Owner defaults in the performance or observance of any covenant, condition or restriction of the Owner set forth in this Inclusionary Housing Covenants Declaration, and if such default remains uncured for a period of thirty (30) days after written notice has been given by the City (or, if such cure reasonably takes longer than thirty (30) days, if such cure has not been commenced within the thirty (30) day period or is not diligently completed within a reasonable time, not to exceed an additional sixty (60) calendar days), or in the event the Owner has provided false information or documentation required in connection with the purchase or resale of an Inclusionary Unit, then the City may declare an Event of Default has occurred. In that event, the City may exercise any or all of its rights or remedies under this Inclusionary Housing Covenants Declaration, including without limitation any or all of the following: by any suit, action or proceeding at law or in equity, require the Owner to perform its obligations and covenants under this Inclusionary Housing Covenants Declaration or enjoin any unlawful acts; 2. take such other action at law or in equity as may appear necessary or desirable to enforce the Owner's obligations, covenants and agreements; and 3. in addition to the foregoing remedies, in the event that the Owner rents or resells the Inclusionary Unit in violation of this Inclusionary Housing Covenants Declaration, as restitution, the Owner shall forfeit, and the City shall have the right to recover the following monetary amounts: a. If the Owner rents the Inclusionary, Unit in violation of this Inclusionary Housing Covenants Declaration, the Owner shall forfeit all monetary amounts obtained through the rental of the Inclusionary, Unit. b. If the Owner resells the Inclusionary Unit in violation of this Inclusionary Housing Covenants Declaration, the Seller and the new Owner shall be jointly and severally liable to the City for an amount equal to difference between the Fair Market Value and the Affordable Sales Price for the Inclusionary Unit. However, the Inclusionary Housing Covenants Declaration Page 28 City of Santa Ana January 2015 Executive Director has the discretion to allow the Seller and the new Owner to cure a violation of the resale requirements imposed by this Inclusionary Housing Covenants Declaration. All such restitution shall be made to the City. Any funds received by the City under this provision of the Inclusionary Housing Covenants Declaration shall be placed in the City's Inclusionary Housing Fund. IV. Default Remedies In addition to any other rights or remedies set forth in this Inclusionary Housing Covenants Declaration, or allowed by law or equity, in the event of a default by an Owner of any of the Owner's obligations under this Inclusionary Housing Covenants Declaration, that is not cured within the cure period provided below, the City may apply to a court of competent jurisdiction for specific performance of this Inclusionary Housing Covenants Declaration, or for an injunction prohibiting a proposed resale or transfer in violation of this Inclusionary Housing Covenants Declaration. V. Distribution of Insurance and Condemnation Proceeds If the Inclusionary Unit is condemned or the improvements damaged or destroyed, all proceeds from insurance or condemnation shall be distributed to the Owner, for purposes of restoring or replacing the Inclusionary Unit, unless the Senior Lender Deed of Trust, the City Deed of Trust or the Project CC &Rs provide otherwise. In that case, the Senior Lender Deed of Trust, the City Deed of Trust and the Project CC &Rs shall control, in that order of priority. VI. Attorneys' Fees and Costs If any action is brought to enforce the terms of this Inclusionary Housing Covenants Declaration, the prevailing party shall be entitled to reasonable attorneys' fees and costs. VII. Controlling Agreement The Owner covenants that it has not knowingly executed, and will not knowingly execute, without the City's prior written approval, any other agreements with provisions contradictory to or in opposition to the provisions of this Inclusionary Housing Covenants Declaration. Inclusionary Housing Covenants Declaration Page 29 City of Santa Ana January 2015 VIII. Severability If any one or more of the provisions contained in this Inclusionary Housing Covenants Declaration for any reason shall be held to be invalid, illegal or unenforceable in any respect, then such provision or provisions shall be deemed severable from the remaining provisions contained in this Inclusionary Housing Covenants Declaration, and this Inclusionary Housing Covenants Declaration shall be construed as if such invalid, illegal or unenforceable provisions had never been contained herein. IX. Time of the Essence Time is of the essence for this entire Inclusionary Housing Covenants Declaration. Whenever the time for performance falls on a day which is not a business day, such time for performance shall be extended to the next business day. X. Covenants Running with the Land All provisions of this Inclusionary Housing Covenants Declaration, including the benefits and burdens, are equitable servitudes, run with the land and are binding upon the heirs, successors, assigns and personal representatives of the Owner hereto and inure to the benefit of the City and permitted successors and assigns. The covenants benefit and bind the City, the Inclusionary Unit and the Owner thereto. Each and every contract, deed or other instrument covering, conveying or otherwise transferring the Inclusionary Unit or any interest therein shall conclusively be held to have been executed, delivered and accepted subject to this Inclusionary Housing Covenants Declaration regardless of whether the other party or parties have actual knowledge of this Inclusionary Housing Covenants Declaration. XI. Construction The rule of strict construction does not apply to this Inclusionary Housing Covenants Declaration. This Inclusionary Housing Covenants Declaration shall be given a reasonable construction to prevent any use of the Inclusionary Unit in violation of this Inclusionary Housing Covenants Declaration. Whenever the context and construction so requires, all words used in the singular shall be deemed to be used in the plural, all masculine pronouns shall include the feminine and neuter, and vice versa. Inclusionary Housing Covenants Declaration Page 30 City of Santa Ana January 2015 XII. Indemnification The Owner agrees to indemnify and hold harmless the City and its respective officers, directors, employees and agents from and against all liabilities, losses, claims, damages, judgments, costs and expenses (including, without limitation, reasonable attorney's fees) incurred by the City arising out of or relating to any negligent or wrongful action by the Owner with respect to the Inclusionary Unit. The Owner agrees that if any claims, demands, suits or other legal proceedings are made or instituted by any person against the City that arise out of any of the matters relating to this Inclusionary Housing Covenants Declaration, the Owner shall cooperate fully with the City in the defense or other disposition. XIII. Entire Inclusionary Housing Covenants Declaration and Modifications This Inclusionary Housing Covenants Declaration may be modified only in a writing duly signed by the Owner and an authorized agent of the City. The modifications shall become effective when recorded in the official records of Orange County, California. r1TR Notwithstanding the following, the Owner acknowledges under this Inclusionary Housing Covenants Declaration that it is expressly prohibited from renting or leasing the Inclusionary Unit, and is required to occupy the Inclusionary Unit as its Primary Residence at all times: The Owner covenants by and for itself, its successors, and its assigns 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, sexual orientation, source of income, age, physical or mental handicap, medical condition, ancestry or national origin in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Inclusionary Unit. The foregoing covenants shall run with the land and shall remain in effect in perpetuity. 2. All deeds and contracts made relative to the Inclusionary Unit shall contain or be subject to the following non - discrimination or non - segregation clauses set forth in H &SC Section 33436 in substantially the same form: Inclusionary Housing Covenants Declaration Page 31 City of Santa Ana January 2015 a. In deeds: "The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators, and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of any person or group of persons on any basis listed in subdivision (a) or (d) of Section 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed. The foregoing covenants shall run with the land." b. In contracts: "There shall be no discrimination against or segregation of any person or group of persons on any basis listed in subdivision (a) or (d) of Section 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed. The foregoing covenants shall run with the land." XV. Notices 1. All notices, demands, requests for approval and other communications provided for in this Inclusionary Housing Covenants Declaration shall be in writing and shall be deemed received if sent to the addresses set forth below: a. on the date of delivery when personally delivered; b. one business day after deposit with a reputable overnight courier or delivery service with all delivery charges paid; or C. date of receipt by party if deposited in the United States first class mail, postage prepaid, registered or certified, return receipt requested. 2. Either party may change its address by notice delivered in the manner specified above. Inclusionary Housing Covenants Declaration Page 32 City of Santa Ana January 2015 If to City: City Manager City of Santa Ana 20 Civic Center Plaza Santa Ana, California 92701 If to Owner: at the Inclusionary Unit address IN WITNESS WHEREOF, the City and the Homebuyer have duly executed this Inclusionary Housing Covenants Declaration as of the dates set forth below. [Signatures on Following Pages] Inclusionary Housing Covenants Declaration Page 33 City of Santa Ana January 2015 SIGNATURE PAGE m INCLUSIONARY ROUSING COVENANTS DECLARATION CITY: CITY OF SANTA ANA A California Charter City and Municipal Corporation M Name: Its: Date: APPROVED AS TO LEGAL FORM: so Name: City Attorney City of Santa Ana Inclusionary Housing Covenants Declaration Page 34 City of Santa Ana January 2015 SIGNATURE PAGE m INCLUSIONARY HOUSING COVENANTS DECLARATION Homebuyer: M 1► 7111 Date: A Name: Date: Inclusionary Housing Covenants Declaration Page 35 City of Santa Ana January 2015 EXHIBIT 1 PROPERTY DESCRIPTION [To Be Inserted.] Inclusionary Housing Covenants Declaration Property Description January 2015 EXHIBIT 2 OCCUPANCY RECERTIFICATION FORM Incluslonary Housing Covenants Declaration Occupancy Recertification Fonn January 2015 CERTIFICATION OF CONTINUED OCCUPANCY Date: Owner(s) Name: Address: We are the Owners of an Inclusionary Unit that was produced under the requirements of the City of Santa Ana Inclusionary Housing Ordinance. We understand and agree that the Inclusionary Unit must be used as our Primary Residence and for no other purpose. By this Certification, we declare under penalty of perjury that: 1. We currently occupy the Inclusionary Unit; and 2. We have occupied the Inclusionary Unit for at least 10 out of the past 12 months; and 3. We have not used the Inclusionary Unit for any other purpose than as our Primary Residence; and 4. We are not renting or leasing any part of the Inclusionary Unit to another party. We have attached true and accurate copies of two utility bills or other documentation evidencing our continued occupancy of the Inclusionary Unit. We acknowledge that any intentional or negligent misrepresentation in this Certification may result in civil liability and /or criminal penalties including, but not limited to, fine or imprisonment, or both, and liability for monetary damages under the provisions of Title 18, United States Code, Section 1001, et seq. [Signatures on the Following Page] Inclusionary Housing Covenants Declaration Page 1 Occupancy Recertificatlon Forrn January 2015 SIGNATURE PAGE rL OCCUPANCY RECERTIFICATION FORM Owner: Signature: Print Name: Date: Telephone: Signature: Print Name: Date: Telephone: Co: Owner Inclusionary Housing Covenants Declaration Page 2 Occupancy Recertification Form January 2015 EXHIBIT 3 NOTICE OF INTENT TO TRANSFER Inclusionary Housing Covenants Declaration Notice of Intent to Transfer January 2015 Date To: City Manager City of Santa Ana 20 Civic Center Plaza Santa Ana, California 92701 The undersigned , Owner of the Inclusionary Unit located at , Santa Ana, California, hereby notifies you of its intent to transfer in compliance with Article 2 of the Inclusionary Housing Covenants Declaration. The reason or circumstances relating to such transfer are as follows: . Any additional information reasonably required regarding the proposed transferee shall be provided to you immediately upon request. The undersigned acknowledges that all applicable time periods under the Inclusionary Housing Covenants Declaration commence only upon the City's receipt of this notice. The undersigned further acknowledges and agrees that any such transfer shall be subject to the provisions of the Inclusionary Housing Covenants Declaration. Owner Inclusionary Housing Covenants Declaration Page 1 Notice of Intent to Transfer January 2016 EXHIBIT 4 ASSUMPTION AGREEMENT Inclusionary Housing Covenants Declaration Assumption Agreement January 2015 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: City of Santa Ana 20 Civic Center Plaza Santa Ana, California 92701 Attention: City Clerk To be recorded without fee. (Space Above This Line For Recorder's Use Only) (Government Code, §§ 6103 and 27383) DISCLOSURE, ACKNOWLEDGMENT AND ASSUMPTION AGREEMENT THIS DISCLOSURE, ACKNOWLEDGMENT AND ASSUMPTION AGREEMENT (Assumption Agreement) made among ( "Owner "), ( "Transferee ") and the CITY OF SANTA ANA ( "City "). A =Mr -rte A. The Owner is the current owner of the real property commonly known as _ , Santa Ana, California, and now particularly described on Exhibit A, which together with all improvements located thereon is referred to in this Assumption Agreement as the "Inclusionary Unit ". B. The Owner wishes to transfer and convey to the Transferee the Inclusionary Unit; and C. The Inclusionary Unit is subject to the restrictions applied by the Inclusionary Housing Covenants, Resale Restrictions and City's Option to Purchase Agreement recorded on , 20_, as Document No. , in the Official Records of Orange County, California (the "Inclusionary Housing Covenants Declaration ") that imposes resale controls on the Inclusionary Unit; and Inclusionary Housing Covenants Declaration Page 1 Assumption Agreement January 2015 D. The obligations set forth in the Inclusionary Housing Covenants Declaration are secured by a Deed of Trust recorded against the Inclusionary Unit on 20_, as Document No. in the Official Records of Orange County, California (the "City Deed of Trust "); and E. The Transferee is acquiring, the Inclusionary Unit and will assume the obligations of an Owner under the Inclusionary Housing Covenants Declaration and as Trustor under the City Deed of Trust. F. Capitalized terms used herein, and not defined in this Assumption Agreement, shall have the meanings set forth in the Inclusionary Housing Covenants Declaration and the City Deed of Trust. The parties to this Assumption Agreement agree to the following: 1. The Transferee hereby acknowledges and agrees to the following: a. The Inclusionary Unit is subject to the Inclusionary Housing Covenants Declaration that are secured by the City Deed of Trust. The Transferee acknowledges that it has received a copy of the Inclusionary Housing Covenants Declaration, and agrees to be bound by all the conditions and covenants contained therein. b. The Transferee shall occupy and continually use the Inclusionary Unit as the Transferee's Primary Residence during the Affordability Period as defined in the Inclusionary Housing Covenants Declaration. c. The Transferee's right to resell the Inclusionary Unit at the Fair Market Value is very limited, and in certain instances, the City will have the option to purchase the Inclusionary Unit from the Transferee at the Affordable Sales Price: Under a Permitted Sale, the Inclusionary Unit must be sold at the Affordable Sales Price. The Inclusionary Unit will not necessarily appreciate in value during the duration of its ownership. ii. In the event that the Inclusionary Unit is sold for the Fair Market Value, either through an Extraordinary Sale or Inclusionary Housing Covenants Declaration Page 2 Assumption Agreement January 2015 pursuant to a foreclosure sale, the Transferee must pay to the City the City Share of Excess Proceeds, which is set at fifty percent (50 %) of the difference between the Affordable Sales Price and the Net Resale Proceeds received from the sale of the Inclusionary Unit. iii. Any resale or transfer of the Inclusionary Unit in violation of the Inclusionary Housing Covenants Declaration shall be voidable by the City. d. The Transferee is not permitted to refinance a Senior Loan that is secured by the Property for more than the outstanding principal amount of that Senior Loan plus the customary fees and costs associated with obtaining the new Senior Loan. e. The Inclusionary Unit is subject to the Project CC &Rs. The Transferee acknowledges and agrees that it is obligated to comply with all of the terms, conditions, covenants and restrictions set forth in the Project CC &Rs. 3. The City hereby consents to the transfer of the Inclusionary Unit to the Transferee under a Permitted Transfer as defined in the Inclusionary Housing Covenants Declaration. 4. All questions with respect to the interpretation of this Assumption Agreement, and the rights and liabilities of the parties hereto, shall be governed by the laws of the State of California. 5. This Assumption Agreement shall inure to the benefit of, and shall be binding upon, the assigns, successors in interest, personal representatives, estates, heirs and legatees of each of the parties hereto. 6. The Transferee hereby grants to the City an irrevocable power of attorney coupled with an interest to act on Buyer's behalf to execute, acknowledge and deliver any and all documents relating to the City's Purchase Option under Article 3 — Section II of the Inclusionary Housing Covenants Declaration. Executed on , 20, at Santa Ana, California. [Signatures on Following Pages) Inclusionary Housing Covenants Declaration Page 3 Assumption Agreement January 2015 SIGNATURE PAGE Fie ASSUMPTION AGREEMENT Owner: By: Date: Transferee: By: Date: City: By: Date: Its: Attest: Inclusionary Housing Covenants Declaration Page 4 Assumption Agreement January 2015 EXHIBIT A LEGAL DESCRIPTION [To Be Inserted.] Inclusionary Housing Covenants Declaration Page 1 Assumption Agreement— Legal Description January 2015 EXHIBIT 5 NOTICE OF INTENT TO SELL Inclusionary Housing Covenants Declaration Notice of Intent to Sell January 2015 Date To: City Manager City of Santa Ana 20 Civic Center Plaza Santa Ana, California 92701 The undersigned , Owner of the Inclusionary Unit located at Santa Ana, California, hereby notifies you of its intent to resell the Inclusionary Unit in compliance with the requirements imposed by Article 3 of the Inclusionary Housing Covenants Declaration.. The undersigned acknowledges that all applicable time periods under the Inclusionary Housing Covenants Declaration commence only upon the City's receipt of this notice. Owner Inclusionary Housing Covenants Declaration Page 1 Notice of Intent to Sell January 2015 EXHIBIT 6 NOTICE OF EXTRAORDINARY SALE Inclusionary Housing Covenants Declaration Notice of Extraordinary Sale January 2015 The undersigned , is the Owner of the Inclusionary Unit located at Santa Ana, California. On , 20_, Owner provided City with written notice of its intent to sell the Inclusionary Unit. Owner has failed to identify an Eligible Purchaser in accordance with Article 3 — Section I of the Inclusionary Housing Covenants Declaration, and the City has failed to exercise the City's Purchase Option pursuant to Article 3 — Section 11. Accordingly, Owner hereby notices the City of its intent to make an Extraordinary Sale of the Inclusionary Unit in accordance with Article 3 — Section III of the Inclusionary Housing Covenants Declaration. Attached herewith is the estimate of the Fair Market Value for the Inclusionary Unit as defined in the Inclusionary Housing Covenants Declaration. Owner hereby acknowledges that the City shall retain City's Purchase Option until the time that Owner has accepted in writing an offer to purchase the Inclusionary Unit from a buyer, and that all applicable time periods for an Extraordinary Sale under the Agreement commence only upon City's receipt of this Notice. .�1T =I =I- Inclusionary Housing Covenants Declaration Page 1 Notice of Extraordinary Sale January 2015 CITY DEED OF TRUST Inclusionary Housing Agreement — Ownership Project City of Santa Ana January 2015 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: City of Santa Ana 20 Civic Center Plaza Santa Ana, California 92701 Attention: Housing Manager To be recorded without fee, (Space Above This Line For Recorder's Use Only) (Government Code, §§ 6103 and 27383) DEED OF TRUST AND SECURITY AGREEMENT APN: [fo iae inserfedl There are restrictions on the sale of the Property encumbered by this City Deed of Trust, as contained in that certain Inclusionary Housing Covenants, Resale Restrictions and City's Option to Purchase Agreement ( "Inclusionary Housing Covenants Declaration "). Except for a Transfer to the City of Santa Ana ( "City ") or City's assignee following the City's exercise of the City' Purchase Option, this Property may only be sold to an Eligible Purchaser at a price not to exceed the defined Affordable Sales Price. The Inclusionary Housing Covenants Declaration also restricts the extent to which this Property may be encumbered by junior financing and limits the Trustor's rights to refinance Senior Loans. THIS DEED OF TRUST AND SECURITY AGREEMENT ( "City Deed of Trust ") is made this day of 20__, among finserf name of jajLt.or I ( "Trustor "), whose address is [Insert address of Trusoorl, [insert name of title companyl ( "Trustee "), whose address is [Insert address of title companyl, and the City of Santa Ana (referred to variously as "City' or "Beneficiary"), whose address is 20 Civic Center Plaza, California 92701 as Beneficiary. Trustor irrevocably grants, conveys, transfers and assigns to Trustee in trust, with power of sale and right of entry and possession, all of Trustor's right, title and interest now owned or hereafter acquired in and to the real property in the City of Inclusionary Housing Covenants Declaration Page 1 Assumption Agreement January 2015 Santa Ana, Orange County, California, described on Exhibit 1 attached hereto and incorporated herein by this reference, together with the Improvements constructed thereon and all other property and interests of any kind or character that may be reasonably necessary or desirable to promote the present and future beneficial use and enjoyment of such real property and improvements. RECITALS A. Trustor is the owner of the Property located at , Santa Ana, California and more particularly described in the attached Exhibit A. B. The Trustor's predecessor in interest developed the Property pursuant to the City's Housing Opportunity Ordinance ( "Ordinance "), which regulations require developers of ownership housing to construct within their projects units that are affordable to Moderate Income Households. These regulations require the Property to be subjected to restrictions on resale that ensure that the Property remains affordable. C. In connection with the Ordinance, Beneficiary and Trustor entered into a Inclusionary Housing Covenants Declaration dated as of and recorded in the Official Records of Orange County substantially concurrently herewith (capitalized terms used without definition herein have the meaning ascribed to such terms in the Inclusionary Housing Covenants Declaration). D. Pursuant to the Inclusionary Housing Covenants Declaration, the Trustor is obligated, among other requirements, to sell the Property only to Eligible Purchasers at a price not in excess of the Affordable Sales Price. E. The Inclusionary Housing Covenants Declaration also provides that: 1. Trustor is obligated to notify the Beneficiary of the Trustor's intent to sell the Property in order to enable Beneficiary to exercise the City's Purchase Option at the Affordable Sales Price; 2. The Beneficiary may exercise the City's Purchase Option if the Trustor defaults under the Inclusionary Housing Covenants Declaration; and Inclusionary Housing Covenants Declaration Page 2 Assumption Agreement January 2015 There are restrictions on Trustor's ability to encumber the Property and to refinance the Senior Loans secured by the Property. Inclusionary Housing Covenants Declaration Page 3 Assumption Agreement January 2015 DEFINITION OF TERMS As used in this City Deed of Trust, the terms set forth below shall have the following meanings: Administrative Procedures means the Affordable Ownership Housing Administrative Procedures promulgated by the Executive Director pursuant to the Ordinance. Affordable Housing Cost means the maximum price of an Inclusionary Unit, as calculated under the requirements imposed by H &SC Section 50052.5. The calculation methodology is described in Section VI of the Affordable Ownership Housing Administrative Procedures Manual. Affordability Gap is equal to the difference between the Fair Market Value of the Inclusionary Unit and the Affordable Sales Price for the Inclusionary Unit at the time of acquisition by the Homebuyer. Affordable Sales Price means the maximum price that can be charged for an Inclusionary Unit. The Affordable Sales Price is equal to the lesser of: The sum of the Supportable Mortgage plus the Benchmark Down Payment; or 2. The purchase price prospective buyers are willing to pay in return for purchasing a home that is subject to restrictive covenants. The statutorily set Affordable Sales Prices for the initial sale of each Inclusionary Unit are shown in Exhibit 8 to the Inclusionary Housing Agreement. The Affordable Sales Prices for Inclusionary Units shall be adjusted quarterly. Benchmark Down Payment is a component of the Affordable Sales Price calculations. For the purposes of the Administrative Procedures, the Benchmark Down Payment is set at 5% of the total Affordable Sales Price. Beneficiary refers to the City as the provider of the City Shared Appreciation Loan, and otherwise defined as the Subordinate Lender. Trustor means the person or persons described as the Trustor in the introductory paragraph of this City Deed of Trust. Inclusionary Housing Covenants Declaration Page 4 Assumption Agreement January 2015 City means the City of Santa Ana, California. City Deed of Trust means a deed of trust, that secures the Owner's obligation to comply with the obligations imposed by the Inclusionary Housing Covenant Declaration. City's Purchase Option means the irrevocable option that the Owner must offer to the City under the circumstances defined in Article 3 — Section II of the Inclusionary Housing Covenants Declaration. Eligible Purchaser shall mean a Homebuyer who meets the eligibility criteria set forth in the Administrative Procedures. Exempt Transfer means the following: A transfer resulting from the death of the Owner; A transfer by the Owner where the spouse or domestic partner becomes a co -owner of the Inclusionary Unit; A transfer of title to a spouse or domestic partner as part of divorce or dissolution proceedings; and 3. A transfer by the Owner into a trust in which the Owner or Owners are beneficiaries, provided that the Owner or Owners continue to maintain the Inclusionary Unit as their Primary Residence. 4. A transfer by the Owner of a non - possessory interest in the Property, such as an easement or license for utilities or other like purposes; the granting of ingress or egress rights over or across the Property or a portion thereof; or a modification to the non - exclusive common area rights of any Owner located in a common interest subdivision development. 5. A condemnation, or conveyance in lieu of condemnation, that does not preclude the Owner's continued use and occupancy of the Inclusionary Unit, such as a street widening or other incidental taking that does not preclude continued occupancy of the Inclusionary Unit, or a taking of an interest in a portion of the common area appurtenant to any Inclusionary Unit located in a common interest development. Extraordinary Sale means a sale of the Inclusionary Unit to a buyer who is not an Eligible Purchaser, when an Eligible Purchaser has not been secured within Inclusionary Housing Covenants Declaration Page 5 Assumption Agreement January 2015 the timeframes required by this Inclusionary Housing Covenants Declaration, and the City has opted not to exercise the City's Purchase Option within the timeframes allowed pursuant to this Inclusionary Housing Covenants Declaration, Fair Market Value means the value of the Inclusionary Unit under normal circumstances in which the seller and the buyer freely negotiate the terms of the transfer of ownership. The Fair Market Value must be established by a licensed Real Estate agent based on three comparable properties. H &SC shall mean the California Health and Safety Code. Inclusionary Housing Covenants Declaration means the Declaration of Inclusionary Housing Covenants, Conditions and Restrictions. Incluslonary Unit means the completed affordable owner - occupied housing unit, that is being purchased by the Trustor. Moderate Income refers to Households whose incomes meet the standards defined by the H &SC Section 50093. Generally, Moderate Income means household income that does not exceed 120% of the County Median Income, as adjusted for Household size. The maximum household income amount for Moderate Income Households shall be set at the amount published by HCD annually. Moderate Income Household shall mean individuals or Households who have an adjusted Gross Income that does not exceed Moderate Income. Ordinance means the Housing Opportunity Ordinance adopted by the City Council on November 28, 2011, which is codified in Article XVI11.1 Section 41- 1900 et seq. of the City's Municipal Code. Owner means the current owner of the Inclusionary Unit. Primary Residence is defined as the only home that may be owned by the Owner. The Owner must reside in the Inclusionary Unit for not less than 10 out of every 12 months. Property means the real property on which the Project is to be developed, for which the legal description is provided in Exhibit 1 to this City Deed of Trust. Rents means all rents, issues, profits, royalties, revenues, income and other benefits derived from the Property. Inclusionary Housing Covenants Declaration Page 6 Assumption Agreement January 2015 Senior Lender means a bank, savings and loan association, insurance company, pension fund, publicly traded real estate investment trust, governmental agency, charitable organization or other governmentally regulated entity regularly engaged in making residential real estate loans. Senior Loan means a purchase money loan of funds to be used by the Homebuyer for financing the acquisition of the Inclusionary Unit, or a refinancing approved by the City, which loan is in a lien position prior to the Inclusionary Housing Covenants Declaration. Supportable Mortgage means the mortgage amount that can be supported by a Moderate Income Household based on the Affordable Housing Cost calculations. The mortgage calculation is based on the prevailing market interest rate for a 30- year fully amortizing mortgage with a fixed interest rate. See Section VI -B of the Administrative Procedures Manual for an explanation of the calculation methodology. Trustee means the title company that insures title for the Inclusionary Unit that is subject to the City Deed of Trust. Trustor means the Trustor that enters into the City Deed of Trust that secures the City Shared Appreciation Loan. Inclusionary Housing Covenants Declaration Page 7 Assumption Agreement January 2015 ARTICLES 1. Grant in Trust. Trustor, in consideration of the promises herein recited and the trust herein created, hereby irrevocably and unconditionally grants, transfers, conveys and assigns to Trustee, in trust for the benefit of Beneficiary, with power of sale, all estate, right title and interest which Trustor now has or may later acquire the Property together with all of the following: all improvements now or hereafter located or constructed on the Property and all replacements and additions thereto; all easements, rights of way, appurtenances and other rights used in connection with the Property or as a means of access thereto; all fixtures now or hereafter attached to or used in and about the Property or the improvements located thereon or hereafter located or constructed on the Property, and all renewals or replacements thereof or articles in substitution therefor, whether or not the same are, or shall be attached to the improvements in any manner; and all leases, subleases, licenses and other agreements relating to use or occupancy of the Property, and all rents or other payments that may now or hereafter accrue or otherwise become payable to or for the benefit of Trustor (whether or not such Leases and Rents are permitted by the Inclusionary Housing Covenants Declaration). All of the above - referenced Property, improvements, appurtenance, fixtures and equipment, leases and rents are herein referred to collectively as the "Security ". 2. Secured Obligations. Trustor makes the grant, conveyance, transfer and assignment herein for the purpose of securing payment and performance of the following: (a) the City Share of Excess Proceeds in the event of an Extraordinary Sale or a foreclosure sale; and (b) Trustor's obligations under the term of the Inclusionary Housing Covenants Declaration. 3. Maintenance and Repair, Trustor shall (a) keep the Property in good condition and repair and not remove or demolish any building; (b) complete or restore promptly and in good and workmanlike manner any building which may be constructed, damaged or destroyed; (c) pay when due all claims for labor performed and materials furnished; (d) comply with all laws affecting the Property or requiring any alterations or improvements to be made; (e) not commit or permit waste; and (f) cultivate, irrigate, fertilize, fumigate, prune and do all other acts which from the character or use of the Property may be reasonably necessary. Incluslonary Housing Covenants Declaration Page 8 Assumption Agreement January 2015 4. Insurance. Trustor shall maintain hazard insurance against loss by fire, hazards included with the term "extended coverage," and any other hazards for which Beneficiary requires insurance, and liability insurance. The insurance carrier and the insurance policies and amounts of coverage shall set at the full replacement value of the Inclusionary Unit based on the then current City Building Code. The liability policy shall name Beneficiary as an additional insured, and shall require 30 days' prior notice to Beneficiary before the policy is modified or terminated. 5. Defense of Security. Trustor shall appear in and defend any action or proceeding purporting to affect the security or the rights or powers of Beneficiary or Trustee. Trustor shall pay all costs and expenses, including costs of evidence of title and attorneys' fees, in any such action or proceeding in which Trustee or Beneficiary may appear, and in any suit brought by Beneficiary to foreclose this City Deed of Trust. 6. Payment of Taxes and Liens. Trustor shall pay (a) at least 10 days before delinquency, all taxes and assessments affecting the Property, including water stock assessments; (b) when due, all encumbrances, charges and liens, with interest, on the Property, which are or appear to be prior or superior to this City Deed of Trust; and (c) upon demand all costs, fees and expenses of this City Deed of Trust. If Trustor fails to make any payment or to do any act provided for in this City Deed of Trust, then Beneficiary or Trustee may, without obligation to do so, and with or without notice to or demand upon Trustor, and without releasing Trustor from any obligation under this City Deed of Trust: (i) make or do the same in such manner and to such extent as either may deem necessary to protect the security, Beneficiary or Trustee being authorized to enter upon the Property for such purposes; (ii) appear in or commence any action or proceeding purporting to affect the security, or the rights or powers of Beneficiary or Trustee; (iii) pay, purchase, contest or settle any encumbrance, charge or lien which in the judgment of either appears to be senior to this City Deed of Trust; and (iv) in exercising any such powers, pay allowable expenses, including attorneys' fees. 7. Reimbursement of Costs. Trustor shall pay upon demand all sums expended by Beneficiary or Trustee provided for in this City Deed of Trust or allowed by law, with interest from date of expenditure at the maximum rate allowed by law. Inclusionary Housing Covenants Declaration Page 9 Assumption Agreement January 2015 8. No Waiver, By accepting payment of any sum after its due date, Beneficiary does not waive its right either to require prompt payment when due of all other sums or declare a default for failure to pay. 9, Reconveyance. That upon written request of Beneficiary stating that the Secured Obligations have been fulfilled, and upon surrender of this City Deed of Trust, Trustee shall reconvey, without warranty, the property then held hereunder. The recitals of such reconveyance of any matters or facts shall be conclusive proof of the truthfulness thereof. The grantee in such reconveyance may be described as "the person or persons legally entitled thereto." 10. Default and Foreclosure. Upon default by Trustor in performance of any Secured Obligation, Beneficiary may deliver to Trustee a declaration of default and demand for sale and of a notice of default and a notice of sale, which notice Trustee shall cause to be filed for record. Beneficiary also shall deposit with Trustee this City Deed of Trust and all documents evidencing the Secured Obligations and expenditures, if any, secured by this City Deed of Trust. Upon default of any obligation secured by this City Deed of Trust and acceleration of all sums due, if any, Beneficiary may instruct Trustee to proceed with a sale of the Property under the power of sale granted in this City Deed of Trust, noticed and held in accordance with California Civil Code Sections 2924, et seq., as such statutes may be amended from time to time. Trustor waives all rights it may have to require marshaling of assets or to require sales of assets in any particular order, including any rights under California Civil Code Sections 2899 and 3433. 11. Substitution of Trustee. Beneficiary, or any successor beneficiary of the Secured Obligations or of any indebtedness secured hereby, may from time to time, by instrument in writing, substitute a successor or successors to any Trustee named herein or acting hereunder, which instrument executed by the Beneficiary and duly acknowledged and recorded in the office of the recorder of the county or counties where the Property is situated, shall be conclusive proof of proper substitution of such successor Trustee or Trustees, who shall, without conveyance from the Trustee predecessor, succeed to all its title, estate, rights, powers and duties. Said instrument must contain the name of the original Trustor, Trustee and Beneficiary hereunder, the book and page where this City Deed of Trust is recorded and the name and address of the new Trustee. Inclusionary Housing Covenants Declaration Page 10 Assumption Agreement January 2015 12. Successors and Assigns. This City Deed of Trust applies to, inures to the benefit of, and binds all parties hereto, their heirs, legatees, devisees, administrators, executors, successors and assigns. The term 'Beneficiary" shall mean the holder, including pledgees, of the covenants set forth in the Inclusionary Housing Covenants Declaration whether or not named as Beneficiary herein. 13. Trustee Acceptance. Trustee accepts this trust when this City Deed of Trust, duly executed and acknowledged, is made a public record as provided by law. Trustee is not obligated to notify any party hereto of pending sale under any other deed of trust or of any action or proceeding in which Trustor, Beneficiary or Trustee shall be a party unless brought by Trustee. 14, Further Assurances. Trustor shall, at its own cost and expense, do, execute, acknowledge, and deliver all and every such further acts, deeds, conveyances, mortgages, assignments, notices of assignments, transfers, and assurances as Trustee or Beneficiary shall from time to time require, for better assuring, conveying, assigning, transferring, and confirming unto Trustee the Property and rights hereby conveyed or assigned or intended now or hereafter so to be, or which Trustor may be or may hereafter become bound to convey or assign to Trustee, or for carrying out the intention or facilitating the performance of the terms of this City Deed of Trust, or for filing, registering, or recording this City Deed of Trust. Trustor shall, on demand, execute and deliver, and hereby authorizes Trustee and Beneficiary, or either of them, to execute in the name of Trustor, to the extent it may lawfully do so, one or more financing statements, chattel mortgages, or comparable security instruments, to evidence more effectively the lien hereof. Immediately upon the execution and delivery of this City Deed of Trust, and thereafter from time to time, Trustor shall cause this City Deed of Trust, and any security instruments creating a lien or evidencing the lien hereof upon any personal property and each instrument of further assurance, to be filed, registered, or recorded in such manner and in such places as may be required by any present or future law in order to publish notice of and fully to protect the lien hereof upon, and the title of Trustee to, the Property encumbered hereby. 15. Condemnation and Insurance Proceeds. Immediately upon obtaining knowledge of the institution of any proceedings for the condemnation or other taking of all or any portion of the Property, or knowledge of any casualty damage to the Property, or damage in any other manner, Trustor shall immediately notify Beneficiary thereof. Trustor hereby authorizes and Inclusionary Housing Covenants Declaration Page 11 Assumption Agreement January 2015 empowers Beneficiary as attorney -in -fact for Trustor to make proof of loss, to adjust and compromise any claim under the insurance policies covering the Property, to appear in and prosecute any action arising from such insurance policies, to collect and receive insurance proceeds, and to deduct therefrom Beneficiary's expenses incurred in the collection of such proceeds; provided, however, that nothing contained in this Section shall require Beneficiary to incur any expense or take any action hereunder. Trustor hereby authorizes and empowers Beneficiary, at Beneficiary's option, as attorney -in -fact for Trustor, to commence, appear in and prosecute, in Beneficiary's or Trustor's name, any action or proceeding relating to any condemnation or other taking of all or any part of the Property, whether direct or indirect, and to settle or compromise any claim in connection with such condemnation or other taking. The proceeds of any award payment or claim for damages, direct or consequential, in connection with any condemnation or other taking, whether direct or indirect, of the Property, or any part thereof, or for conveyances in lieu of the Property, or any part thereof, shall be paid to Beneficiary. The foregoing powers of attorney are coupled with an interest and are irrevocable. Trustor hereby authorizes Beneficiary to apply such awards, payments, proceeds or damages relating to condemnation of the Property and insurance covering the Property, after the deduction of Beneficiary's expenses incurred in the collection of such amounts, at Beneficiary's option, subject to the requirements of applicable law and the provisions hereof, to restoration or repair of the Property or to payment of the sums secured by this City Deed of Trust. Beneficiary shall be under no obligation to question the amount of any compensation, awards, proceeds, damages, claims, rights of action, and payments relating to condemnation or other taking of the Property or insured casualty affecting the Property, and may accept the same in the amount in which the same shall be paid. Trustor shall execute such further evidence of assignment of any awards, proceeds damages or claims arising in connection with such condemnation or taking or such insurance as Beneficiary may require. 16. Severability. If any one or more of the provisions contained in this City Deed of Trust shall for any reason be held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provisions of this City Deed of Trust, but this City Deed of Trust shall be construed as if such invalid, illegal, or unenforceable provision had never been contained herein or therein, but only to the extent of such invalidity. Inclusionary Housing Covenants Declaration Page 12 Assumption Agreement January 2015 17. Estoppel Certificate. Trustor shall, within ten (10) days of a written request from Beneficiary, furnish Beneficiary with a written statement, duly acknowledged, setting forth the sums secured by this City Deed of Trust and any right of set -off, counterclaim or other defense which exists against such sums and the obligations of this City Deed of Trust. 18. Due - ®n -Sale or Encumbrance. Except for Exempt Transfers approved by the City, if all or any part of the Property, or any interest therein, or any beneficial interest in Trustor (if Trustor is not a natural person or persons but is a corporation, partnership, trust, limited liability company or other legal entity), is sold, transferred, mortgaged, assigned, pledged, or further encumbered, whether directly or indirectly, whether voluntarily or involuntarily or by operational law, Beneficiary may, at Beneficiary's option invoke any remedies permitted by this City Deed of Trust. 19. Subordination. This City Deed of Trust shall be subordinate to the Senior Loan, so long as the Senior Lender agrees to the default and foreclosure provisions set forth in the Inclusionary Housing Covenants Declaration, or other alternative provisions proposed by the Senior Lender, and acceptable to the City in its sole discretion. In the event the City fails to timely cure a default under such Senior Loan, and the Senior Lender proceeds with foreclosure, or deed in lieu of foreclosure, of such Senior Loan, then any provisions herein or in any other collateral agreement restricting the use of the Inclusionary Unit to Moderate income households or otherwise restricting the Senior Lender's ability to sell the Inclusionary Unit based upon income qualification of the purchaser shall terminate and shall have no further force or effect on subsequent owners or purchasers of the Inclusionary Unit. In that event, any person, including the Senior Lender's successors and assigns, receiving title to the Inclusionary Unit through foreclosure, or deed in lieu of foreclosure, of such Senior Loan shall receive title to the Property free and clear from such restrictions. The City shall promptly execute, acknowledge and deliver for recordation such subordination documents or agreements as necessary to confirm the foregoing subordination. Inclusionary Housing Covenants Declaration Page 13 Assumption Agreement January 2015 The undersigned Trustor requests that a copy of any Notice of Default and of any Notice of Sale hereunder be mailed to Trustor at Trustor's address hereinbefore set forth. TRUSTOR: By: Name: By: Name: Inclusionary Housing Covenants Declaration Page 14 Assumption Agreement January 2015 EXHIBIT 1 LEGAL DESCRIPTION Situated in the State of California, City of Santa Ana, County of Orange, and described as follows: [Insert legal description] Deed of Trust— Legal Description Page 1 City of Santa Ana [Acid Notary Ackn®wledggmentsl Deed of Trust — Notary Acknowledgements Page 1 City of Santa Ana EXHIBIT 7 CALCULATIONS OF AFFORDABLE SALES PRICE Inclusionary Housing Agreement— Ownership Project City of Santa Ana January 2015 EXHIBIT 8 DEVELOPER'S PHASING MAP Inclusionary Housing Agreement — Ownership Project City of Santa Ana January 2015 W Z \m M(�1 O 0< N O a Lli I- ZQ CC o �EUU IL °L LLI z ¢O 0�¢F Z 155 U5 ~ LL! � Z IL ~ O IL U a s� zo 3I1N3Atl 1N]51 .LS2M � a 1 o A q Q i b�& =Gw Z I ¢ gom Zma =mo � a x R 8 tl 01 i? f ffa W Z \m M(�1 O 0< N O a Lli I- ZQ CC o �EUU IL °L LLI z ¢O 0�¢F Z 155 U5 ~ LL! � Z IL ~ O IL U a s� zo 3I1N3Atl 1N]51 .LS2M � a 1 o A q Q i b�& =Gw Z I ¢ gom Zma =mo � a x R 8 tl 01 i? EXHIBIT 9 LEGAL DESCRIPTION OF INCLUSIONARY UNITS I nclusionary Housing Agreement— Ownership Project City of Santa Ana January 2015