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Smith, Bradley D.; 2015-08-11;
Recording Requested By Lawyers Title RECORDING REQUESTED PURSUANT TO GOVERNMENT CODE SECTION 27383 When Recorded Mail To: City of Carlsbad City Clerk's Office 1200 Carlsbad Village Drive Carlsbad, CA 92008 DOC# 2015-0480167 lllll Sep 10, 2015 04:22 PM OFFICIAL RECORDS Ernest J. Dronenburg, Jr., SAN DIEGO COUNTY RECORDER FEES: $63.00 PCOR: N/A PAGES: 11 NOTE TO BORROWER: THIS DEED OF TRUST CONTAINS PROVISIONS PROHIBITING ASSUMPTIONS DEED OF TRUST AND SECURITY AGREEMENT THIS DEED OF TRUST AND SECURITY AGREEMENT ("Deed of Trust") made as of this 11th day of August. 20 15 among Bradley D. Smith an single man ("Borrower(s)") as Trustor, and Lawyers Title Company"'), and the City of Carlsbad, a municipal corporation ("City"), as beneficiary. The Borrower, in consideration of the promises herein recited and the trust herein created, irreyocably grants, transfers, conveys and assigns to the Trustee, in trust, with power of sale, the real property located in the City of Carlsbad, State of Califomia, described in the attached Exhibit A ("Legal Description of Property") TOGETHER with all the improvements now or hereafter erected on the real property described in Exhibit A, and all easements, rights, appurtenances, and all fixtures now or hereafter attached to the property, all of which, including replacements and additions thereto, shall be deemed to be and remain a part of the property covered by this Deed of Trust ("Property"); and TOGETHER with all articles of personal property or fixtures now or hereafter attached to or used in and about the building or buildings now erected or hereafter to be erected on the Property which are necessary to the complete and comfortable use and occupancy of such building or buildings for the purposes for which they were or are to be erected, including all other goods and chattels and personal property as are ever used or fumished in operating a building, or the activities conducted therein, similar to the one herein described and referred to, and all renewals or replacements thereof or articles in substitution therefore, whether or not the same are, or shall be attached to said building or buildings in any manner; and all ofthe foregoing, together with the Property, is herein referred to as the "Security"; CA 6/22/2015 Recording Requested By Lawyers Title ^bJLeturLAiACi \r€^ RECORDING REQUESTED PURSUANT TO GOVERNMENT CODE SECTION 27383 When Recorded Mail To: City of Carlsbad City Clerk's Office 1200 Carlsbad Village Drive Carlsbad, CA 92008 NOTE TO BORROWER: THIS DEED OF TRUST CONTAINS PROVISIONS PROHIBITING ASSUMPTIONS DEED OF TRUST AND SECURITY AGREEMENT THIS DEED OF TRUST AND SECURITY AGREEMENT ("Deed of Trust") made as of this 11th day of August, 20 15 among Bradley D. Smith an single man ("Borrowerfs")"') as Trustor, and Lawyers Title Company"), and the City of Carlsbad, a municipal corporation ("City"), as beneficiary. ^ffUxs-^e^ The Borrower, in consideration of the promises herein recited and the tmst herein created, irrevocably grants, transfers, conveys and assigns to the Trustee, in trust, with power of sale, the real property located in the City of Carlsbad, State of Califomia, described in the attached Exhibit A ("Legal Description of Property") TOGETHER with all the improvements now or hereafter erected on the real property described in Exhibit A, and all easements, rights, appurtenances, and all fixtures now or hereafter attached to the property, all of which, including replacements and additions thereto, shall be deemed to be and remain a part of the property covered by this Deed of Tmst ("Property"); and TOGETHER with all articles of personal property or fixtures now or hereafter attached to or used in and about the building or buildings now erected or hereafter to be erected on the Property which are necessary to the complete and comfortable use and occupancy of such building or buildings for the purposes for which they were or are to be erected, including all other goods and chattels and personal property as are ever used or fumished in operating a building, or the activities conducted therein, similar to the one herein described and referred to, and all renewals or replacements thereof or articles in substitution therefore, whether or not the same are, or shall be attached to said building or buildings in any manner; and all of the foregoing, together with the Property, is herein referred to as the "Security"; CA 6/22/2015 To have and to hold the Security together with acquittances to the Tmstee, its successors and assigns forever; TO SECURE to the City the repayment of the sums evidenced by a promissory note in the amount of one hundred ninety-five thousand two hundred twenty nine dollars ($195.229) as executed by the Borrower to the City as of the date of this Deed of Trust ("Note"); TO SECURE to the City the payment of all other sums, with interest thereon, advanced in accordance herewith to protect the security of this Deed of Tmst; and the performance of the covenants and agreements of the Borrower herein contained; and TO SECURE to the City the performance of the covenants and agreements of Borrower contained in that certain Resale Restriction Agreement and Option to Purchase executed by and between the Borrower and the City of even date herewith ("Resale Agreement") and to secure the payment of Excess Sales Proceeds (as defmed in the Resale Agreement) and Unauthorized Rental Proceeds (as defined in the Resale Agreement) that may become due by Borrower to City; TO SECURE the performance of any obligations of Borrower in any other agreements with respect to the financing of the Property or the Security the failure of which would adversely affect Beneficiary, whether or not Beneficiary is a party to such agreements. BORROWER AND CITY COVENANT AND AGREE AS FOLLOWS: 1. Borrower's Estate. That the Borrower is lawfully seized of the estate hereby conveyed and has the right to grant and convey the Security, that other than this Deed of Trust, the Security is encumbered only by: (a) that deed of tmst executed by the Borrower in connection with a loan made to the Borrower by Union Bank or its successors and assigns (the "First Lender"), dated,, executed by the Borrower in favor of First Lender, and recorded in the County of San Diego on,, and assigned Recorder's Serial No. N/A ("First Lender Deed of Trust"), securing a promissory note executed by the Borrower in favor of the First Lender ("First Lender Note"), to assist in the purchase of the Property; and (b) the Resale Agreement. The Borrower agrees to warrant and defend generally the title to the Security against all claims and demands, subject to any declarations, easements or restrictions listed in a schedule of exceptions to coverage in any title insurance policy insuring the City's interest in the Security. (As used in this Deed of Trust, the term "First Lender" shall include all successors and assigns of the First Lender.) 2. Repavment of Loan. The Borrower will promptly repay, when due, the principal, interest and other sums required by the Note and Resale Agreement, including all principal and interest on the Homebuyer Loan (as defined in the Note) and the Excess Sales Proceeds and Unauthorized Rental Proceeds due under the Resale Agreement. The Note contains the following proyisions concerning repayment of the loan under certain conditions: Limitations on Assumption of Note. The Borrower acknowledges that this Note is given in connection with the purchase of the Property as part of a program of the City to assist in the purchase of homes by low and CA 6/22/2015 moderate income persons. Consequently, this Note is only assumable by Eligible Purchasers (as defined in the Resale Agreement). This Note is due in full upon all other Transfers. In the event this Note is assumed by an Eligible Purchaser, the Eligible Purchaser shall execute a new note, which shall be in an amount equal to the principal and Contingent Interest owed by Borrower, a new deed of tmst and a new resale restriction agreement with a restarted term in forms approved by the City. 3. First Lender Loan. The Borrower will observe and perform all of the covenants and agreements of the First Lender Note, First Lender Deed of Trust, and related First Lender loan documents. 4. Resale Agreement. The Borrower will observe and perform all of the covenants and agreements ofthe Resale Agreement. 5. Charges: Liens. The Borrower will pay all taxes, assessments and other charges, fines and impositions attributable to the Security which may attain a priority over this Deed of Trust, by the Borrower making any payment, when due, directly to the payee thereof The Borrower will promptly fumish to the City all notices of amounts due under this paragraph, and in the event the Borrower makes payment directly, the Borrower will promptly discharge any lien which has priority over this Deed of Tmst; provided, that the Borrower will not be required to discharge the lien of the First Lender Deed of Trust or any other lien described in this paragraph so long as the Borrower will agree in writing to the payment of the obligation secured by such lien in a manner acceptable to the City, or will, in good faith, contest such lien by, or defend enforcement of such lien in, legal proceedings which operate to prevent the enforcement of the lien or forfeiture of the Security or any part thereof 6. Insurance. The Borrower will keep the Security insured with a standard fire and extended coverage insurance policy in at least an amount equal to the replacement cost of the Security, but in no event less than the amount necessary to prevent the Borrower from becoming a co-insurer under the terms of the policy. The insurance carrier providing this insurance shall be licensed to do business in the State of California and be chosen by the Borrower subject to approval by the City; provided, that such approval will not be withheld if the insurer is also approved by the First Lender, the Federal Home Loan Mortgage Corporation, Fannie Mae, Freddie Mac, the United States Department of Housing and Urban Development, the United States Department of Veterans Affairs, or successors thereto. All insurance policies and renewals thereof will be in a form acceptable to the City and will include a standard mortgagee clause with standard lender's endorsement in favor of the holder of the First Lender Note and the City as their interests may appear and in a form acceptable to the City. The City shall have the right to hold, or cause its designated agent to hold, the policies and renewals thereof, and the Borrower shall promptly fiimish to the City, or its designated agent, the original insurance policies or certificates of insurance, all renewal notices and all receipts of paid premiums. In the event ofloss, the Borrower will give prompt CA 6/22/2015 notice to the insurance carrier and the City or its designated agent. The City, or its designated agent, may make proof of loss if not made promptly by the Borrower. The City shall receive ten (10) days advance notice of cancellation of any insurance policies required under this section. Unless the City and the Borrower otherwise agree in writing, insurance proceeds, subject to the rights ofthe First Lender, will be applied to restoration or repair of the Security damaged, provided such restoration or repair is economically feasible and the Security of this Deed of Tmst is not thereby impaired. If such restoration or repair is not economically feasible or if the security ofthis Deed of Tmst would be impaired, the insurance proceeds will be used, subject to the rights ofthe First Lender, to repay the Note and all sums secured by this Deed of Trust, with the excess, if any, paid to the Borrower. If the Security is abandoned by the Borrower, or if the Borrower fails to respond to the City, or its designated agent, within thirty (30) days from the date notice is mailed by either of them to the Borrower that the insurance carrier offers to settle a claim for insurance benefits, the City, or its designated agent, is authorized, subject to the rights ofthe First Lender, to collect and apply the insurance proceeds at the City's option either to restoration or repair of the Security or to repay the Note and all sums secured by this Deed of Trust. Ifthe Security is acquired by the City, all right, title and interest of the Borrower in and to any insurance policy and in and to the proceeds thereof resulting from damage to the Security prior to the sale or acquisition will pass to the City to the extent of the sums secured by this Deed of Tmst immediately prior to such sale or acquisition subject to the rights of the First Lender. 7. Preservation and Maintenance of Security. The Borrower will keep the Security in good repair and will not commit waste or permit impairment or deterioration of the Security. If there arises a condition in contravention of this section, and if the Borrower has not cured such condition within thirty (30) days after receiving a City notice of such a condition, then in addition to any other rights available to the City, the City shall have the right (but not the obligation) to perform all acts necessary to cure such condition, and to establish or enforce a lien or other encumbrance against the Security to recover its cost of curing. 8. Protection of the Citv's Security. If the Borrower fails to perform the covenants and agreements contained in this Deed of Tmst, the Resale Agreement, the First Lender Note, the First Lender Deed of Trust, or if any action or proceeding is commenced which materially affects the City's interest in the Security, including, but not limited to, default under the First Lender Deed of Tmst, the First Lender Note or any other deed of trust encumbering the Property, eminent domain, insolvency, code enforcement, or arrangements or proceedings involving a bankrupt or decedent, then the City, at the City's option, upon notice to the Borrower, may make such appearances, disburse such sums and take such action as it determines necessary to protect the City's interest, including but not limited to, disbursement of reasonable attomey's fees and entry upon the Security to make repairs. Any amounts disbursed by the City pursuant to this paragraph, with interest thereon, will become an indebtedness of the Borrower secured by this Deed of Trust. Unless the Borrower and City agree in writing to other terms of payment, such amount will be payable upon notice from the City to the Borrower requesting payment thereof, and will bear interest from the date of CA 6/22/2015 disbursement at the lesser of ten percent (10%) or the highest rate permissible under applicable law. Nothing contained in this paragraph will require the City to incur any expense or take any action hereunder. 9. Inspection. The City may make or cause to be made reasonable entries upon and inspections ofthe Security; provided that the City will give the Borrower reasonable notice of inspection. 10. Forbearance by the Citv Not a Waiver. Any forbearance by the City in exercising any right or remedy will not be a waiver ofthe exercise of any such right or remedy, nor shall acceptance by the City of any payment provided for in the Note constitute a waiver of the City's right to require prompt payment of any remaining principal and interest owed. The procurement oflnsurance or the payment of taxes or other liens or charges by the City will not be a waiver of the City's right to accelerate the maturity of the indebtedness secured by this Deed of Trust. 11. Hazardous Substances. Borrower shall not cause or permit the presence, use, disposal, storage, or release of any Hazardous Substances on or in the Property. Borrower shall not do, nor allow anyone else to do, anything affecting the Property that is in violation of any Environmental Law. The preceding two sentences shall not apply to the presence, use, or storage on the Property of small quantities of Hazardous Substances that are generally recognized to be appropriate to normal residential uses and to maintenance of the Property. "Hazardous Substances" shall mean those substances defined as toxic or hazardous substances or hazardous waste under any Environmental Law, and the following substances: gasoline, kerosene, other flammable or toxic petroleum products, toxic pesticides and herbicides, volatile solvents, materials containing asbestos or formaldehyde, and radioactive materials. "Environmental Law" shall mean all federal and state of California laws that relate to health, safety or environmental protection. Borrower shall promptly give City written notice of any investigation, claim, demand, lawsuit or other action by any govemmental or regulatory agency or private party involving the Property and any Hazardous Substance or Environmental Law of which Borrower has actual knowledge. If Borrower learns, or is notified by any govemmental or regulatory authority, that any removal or other remediation of any Hazardous Substance affecting the Property is necessary. Borrower shall promptly take all necessary remedial actions in accordance with Environmental Law. 12. Remedies Cumulative. All remedies provided in this Deed of Trust are distinct and cumulative to any other right or remedy under this Deed of Tmst or any other document, or afforded by law or equity, and may be exercised concurrently, independently or successively. 13. Successors and Assigns Bound. The covenants and agreements herein contained shall bind, and the rights hereunder shall inure to, the respective successors and assigns of the City and the Borrower subject to the provisions of this Deed of Tmst. CA 6/22/2015 14. Joint and Several Liabilitv. All covenants and agreements ofthe Borrower shall be joint and several. 15. Notice. Except for any notice required under applicable law to be given in another manner, all notices required in this Deed of Tmst shall be sent by certified mail, retum receipt requested or express delivery service with a delivery receipt, or personally delivered with a delivery receipt obtained, and shall be deemed to be effective as of the date shown on the delivery receipt as the date of delivery, the date delivery was refiised, or the date the notice was retumed as undeliverable as follows: To the Owner: 7011 Forsters Tem To the City: City of Carlsbad Housing and Neighborhood Services Department 1200 Carlsbad Village Drive Carlsbad, CA 92008 Attn: Housing and Neighborhood Services Director The parties may subsequently change addresses by providing written notice of the change in address to the other parties in accordance with this section. 16. Controlling Law. This Deed of Trust shall be construed in accordance with and be governed by the laws of the State of Califomia. 17. Invalid Provisions. If any one or more of the provisions contained in this Deed of Tmst, Resale Agreement or the Note shall for any reason be held to be invalid, illegal or unenforceable in any respect, then such provision or provisions shall be deemed severable from the remaining provisions, and this Deed of Trust, the Resale Agreement and the Note shall be constmed as if such invalid, illegal or unenforceable provision had never been contained in this Deed of Trust, Resale Agreement or the Note. 18. Captions. The captions and headings in this Deed of Trust are for convenience only and are not to be used to interpret or define the provisions hereof 19. Nonliability for Negligence. Loss, or Damage. Borrower acknowledges, understands and agrees that the relationship between Borrower and the City is solely that of an Borrower and the administrators of City inclusionary housing program, and that the City does not undertake or assume any responsibility for or duty to Borrower to select, review, inspect, supervise, pass judgment on, or inform Borrower ofthe quality, adequacy or suitability of the Security or any other matter. The City owes no duty of care to protect Borrower against negligent, faulty, inadequate or defective building or construction or any condition of the Security and Borrower agrees that neither Borrower, or Borrower's heirs, successors or assigns CA 6/22/2015 shall ever claim, have or assert any right or action against the City for any loss, damage or other matter arising out of or resulting from any condition of the Security and will hold City harmless from any liability, loss or damage for these things. 20. Indemnitv. Borrower agrees to defend, indemnify, and hold the City harmless from all losses, damages, liabilities, claims, actions, judgments, costs, expenses and reasonable attomey fees that the City may incur as a direct or indirect consequence ofi a. Borrower's failure to perform any obligations as and when required by the Note, Resale Restriction Agreement, and this Deed of Tmst; or b. the failure at any time of any of Borrower's representations or warranties to be true and correct. This provision shall survive the term of this Agreement. 21. Default: Remedies. Upon the Borrower's breach of any covenant or agreement of the Borrower in the Note, Resale Agreement or this Deed of Trust, including, but not limited to, the covenants to pay, when due, any sums secured by this Deed of Tmst, the City, prior to acceleration, will send, in the manner set forth in Section 15 of this Deed of Tmst, notice to the Borrower specifying: (1) the breach; (2) if the breach is curable, the action required to cure such breach; (3) a date, not less than thirty (30) days from the date the notice is effective as set forth in Section 15 of this Deed of Trust, by which such breach, if curable, is to be cured; and (4) if the breach is curable, that failure to cure such breach on or before the date specified in the notice may result in acceleration of the sums secured by this Deed of Trust and sale of the Security. Notice shall be effective as of the date shown on the delivery receipt as the date of delivery, the date delivery was refiised or the date the notice was retumed as undeliverable. The notice will also inform the Borrower of the Borrower's right to reinstate after acceleration and the right to bring a court action to assert the nonexistence of default or any other defense of the Borrower to acceleration and sale. Ifthe breach is not curable or is not cured on or before the date specified in the notice, the City, at the City's option, may: (a) declare all of the sums secured by this Deed of Trust to be immediately due and payable without further demand and may invoke the power of sale and any other remedies permitted by Califomia law; (b) either in person or by agent, with or without bringing any action or proceeding, or by a receiver appointed by a court, and without regard to the adequacy of its security, enter upon the Security and take possession thereof (or any part thereof) and of any of the Security, in its own name or in the name of the Tmstee, and do any acts which it deems necessary or desirable to preserve the value or marketability of the Security, or part thereof or interest therein, increase the income therefrom or protect the security thereof The entering upon and taking possession of the Security shall not cure or waive any breach hereunder or invalidate any act done in response to such breach and, notwithstanding the continuance in possession of the Security, the City shall be entitled to exercise every right provided for in this Deed of Tmst, or by law upon occurrence of any uncured breach, including the right to exercise the power of sale; (c) commence an action to foreclose this Deed of Tmst as a mortgage, appoint a receiver, or specifically enforce any of the covenants hereof; (d) deliver to CA 6/22/2015 the Trustee a written declaration of default and demand for sale, pursuant to the provisions for notice of sale found at California Civil Code Sections 2924, et seq.. as amended from time to time; or (e) exercise all other rights and remedies provided herein, in the instmments by which the Borrower acquires title to any Security, or in any other document or agreement now or hereafter evidencing, creating or securing all or any portion of the obligations secured hereby, or provided by law. The City shall be entitled to collect all reasonable costs and expenses incurred in pursuing the remedies provided in this paragraph, including, but not limited to, reasonable attomey's fees. 22. Acceleration. Upon the occurrence of a default under the Note, the Resale Agreement, this Deed of Trust, the First Lender Note, or the First Lender Deed of Trust, the City shall have the right to declare the full amount of the principal along with any interest under the Note immediately due and payable. Any failure by the City to pursue its legal and equitable remedies upon default shall not constitute a waiver of the City's right to declare a default and exercise all of its rights under the Note, the Resale Agreement, and this Deed of Tmst. Nor shall acceptance by the City of any payment provided for in the Note constitute a waiver of the City's right to require prompt payment of any remaining principal and interest owed. 23. Borrower's Right to Reinstate. Notwithstanding the City's acceleration of the sums secured by this Deed of Tmst, the Borrower will have the right to have any proceedings begun by the City to enforce this Deed of Trust discontinued at any time prior to five (5) days before sale of the Security pursuant to the power of sale contained in this Deed of Tmst or at any time prior to entry of a judgment enforcing this Deed of Trust ifi (a) the Borrower pays City all sums, if any, which would be then due under this Deed of Trust and no acceleration under the Note has occurred; (b) the Borrower cures all breaches of any other covenants or agreements of the Borrower contained in the Note, Resale Agreement or this Deed of Trust; (c) the Borrower pays all reasonable expenses incurred by City and the Tmstee in enforcing the covenants and agreements of the Borrower contained in the Note, Resale Agreement or this Deed of Trust, and in enforcing the City's and the Tmstee's remedies, including, but not limited to, reasonable attomey's fees; and (d) the Borrower takes such action as City may reasonably require to assure that the lien of this Deed of Trust, City's interest in the Security and the Borrower's obligation to pay the sums secured by this Deed of Trust shall continue unimpaired. Upon such payment and cure by the Borrower, this Deed of Tmst and the obligations secured hereby will remain in fiill force and effect as if no acceleration had occurred. 24. Reconveyance. Upon payment of all sums secured by this Deed of Trust, the City will request the Tmstee to reconvey the Security and will surrender this Deed of Tmst and the Note to the Trustee. The Trustee will reconvey the Security without warranty and without charge to the person or persons legally entitled thereto. Such person or persons will pay all costs of recordation, if any. 25. Substitute Tmstee. The City, at the City's option, may from time to time remove the Trustee and appoint a successor trustee to any trustee appointed hereunder. The successor trustee will succeed to all the title, power and duties conferred upon the Tmstee herein and by applicable law. CA 6/22/2015 26. Subordination to First Lender Mortgage. Notwithstanding any other provision hereof, the provisions of this Deed of Trust shall be subordinate to the lien of the First Lender Deed of Tmst and shall not impair the rights of the First Lender, or the First Lender's successor or assign, to exercise its remedies under the First Lender Deed of Tmst in the event of default under the First Lender Deed of Trust by the Borrower. Such remedies under the First Lender Deed of Tmst include the right of foreclosure or acceptance of a deed or assignment in lieu of foreclosure. After such foreclosure or acceptance of a deed or assignment in lieu of foreclosure, or upon assignment of the First Lender Deed of Tmst to the Secretary of the United States Department of Housing and Urban Development (the "Secretary"), this Deed of Tmst shall be forever terminated and shall have no further effect as to the Property or any transferee thereafter; provided, however, if the holder of such First Lender Deed of Trust acquired title to the Property pursuant to a deed or assignment in lieu of foreclosure, or if the First Lender's Deed of Trust is assigned to the Secretary, this Deed of Trust shall automatically terminate upon such acquisition of title or assignment to the Secretary provided that (i) the City has been given written notice of default under such First Lender Deed of Trust and (ii) the City shall not have cured or commenced to cure the default within such thirty (30)-day period and given its firm commitment to complete the cure in the form and substance acceptable to the First Lender. Borrower agrees to record any necessary documents to effect such termination, if applicable. IN WITNESS WHEREOF, the Borrower has executed this Deed Of Tmst as ofthe date first written above. Bradley D. Smith (Print Name) ' Pate (Borrower Signature) (Print Name) Date (Proper Notarial Acknowledgement of Execution by Borrower(s) Must Be Attached) CA 6/22/2015 ACKNOWLEDGMENT A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. STATE OF CALIFORNIA COUNTY OF Sin Ol^^(> ) )SS. On A(A<jlAS^r I^. .2bi5 before me, - (i^c{/-e^^/ncrhd^^ p(/idl/' L- A Notary Public personally appeared Bradley D. Smith who proved to me on the basis of satisfactory evidence to be the personj;s) whose name^ is/afe subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/het/tbeir authorized capacity(tes), and that by hls/b©F/tl=»eir signature(§>-on the instrument the person(s>i 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. Signature A. ESCALERA COMM. #1884421 NOTARV nmic •CAurawM OMNGE COUNTY Comm. Btp. JULY B. 2016 (Seal) EXHIBIT "A" THE LAND REFERRED TO HEREIN IS SITUATED IN THE COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS: A CONDOMINIUM COMPRISED OF: PARCEL 1: AN UNDIVIDED INTEREST IN THE COMMON AREA: A ONE-TWENTY-FOURTH (1/24TH) UNDIVIDED FRACTIONAL FEE INTEREST IN AND TO ALL OF THE PROPERTY LOCATED IN THE CITY OF CARLSBAD, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, DESCRIBED AS MODULE A OF THAT CERTAIN CONDOMINIUM PLAN RECORDED ON APRIL 25, 2005 AS INSTRUMENT NO. 05-0342075, AND RE-RECORDED MAY 5, 2005 AS INSTRUMENT NO. 2005- 0380844 BOTH IN THE OFFICIAL RECORDS OF SAN DIEGO COUNTY, CALIFORNIA, AS SAME MAY BE AMENDED, MODIFIED, AND/OR RE-RECORDED FROM TIME TO TIME ("CONDOMINIUM PLAN"). PARCEL 2: THE CONDOMINIUM UNIT: UNIT 7 ON THAT CERTAIN PORTION OF LOT 14 OF CITY OF CARLSBAD TRACT NO. CT 98-14-01, IN THE CITY OF CARLSBAD, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 14682 FILED ON SEPTEMBER 19, 2003, IN THE RECORDS OF SAN DIEGO COUNTY, CALIFORNIA, AS DESCRIBED AND DEPICTED ON THE CONDOMINIUM PLAN AND AS DESCRIBED IN THE "DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS, AND RESERVATION OF EASEMENTS FORTHE BAY COLLECTION" RECORDED ON NOVEMBER 10, 2004, AS INSTRUMENT NO. 04-1070454. AND THE "NOTICE OF ANNEXATION FOR PHASE 2 OF THE BAY COLLECTION. RECORDED ON APRIL 25, 2005, AS INSTRUMENT NO. 05-0342076. BOTH IN THE OFFICIAL RECORDS OF SAN DIEGO COUNTY, CALIFORNIA, AS SAME MAY BE AMENDED, MODIFIED, AND/OR RE-RECORDED FROM TIME TO TIME (COLLECTIVELY REFERRED TO AS THE "DECLARATION"). PARCEL 3: NONEXCLUSIVE EASEMENTS OVER ASSOCIATION PROPERTY: A NONEXCLUSIVE EASEMENT APPURTENANT TO THE AFORE-DESCRIBED CONDOMINIUM UNIT FOR INGRESS, EGRESS, USE, AND ENJOYMENT IN, ON, OVER, ACROSS, AND THROUGH ALL PORTIONS OF THE ASSOCIATION PROPERTY OF THE PROJECT, EXCEPTING THEREFROM THOSE PORTIONS DESCRIBED AS EXCLUSIVE USE ASSOCIATION PROPERTY, IF ANY, AND ACROSS ALL PORTIONS OF ANY ASSOCIATION PROPERTY SUBSEQUENTLY ANNEXED INTO THE PROJECT, IF ANY, WHICH ARE NOT DESCRIBED AS EXCLUSIVE USE ASSOCIATION PROPERTY. PARCEL 4: EASEMENTS FOR EXCLUSIVE USE ASSOCIATION PROPERTY: THE APPLICABLE EXCLUSIVE USE ASSOCIATION PROPERTY EASEMENTS APPURTENANT TO THE AFORE-DESCRIBED CONDOMINIUM UNIT (E.G., PORCH, DECK, YARD, PARKING SPACE, ETC.), AS MORE PARTICULARLY DESCRIBED AND/OR DEPICTED IN THE DECLARATION, NOTICE OF ANNEXATION, AND/OR THE CONDOMINIUM PLAN ("EXCLUSIVE USE ASSOCIATION PROPERTY"). [PARCELS 1 THROUGH 4, INCLUSIVE ARE COLLECTIVELY REFERRED TO AS THE "CONDOMINIUM ESTATE"] ASSESSOR'S PARCEL NUMBER: 214-620-14-07 Recording Requested By Lawyers Title RECORDING REQUESTED PURSUANT TO GOVERNMENT CODE SECTION 27383 When Recorded Mail To: City of Carlsbad City Cleric's Office 1200 Carlsbad Village Drive Carlsbad, CA 92008 DOC# 2015-0480168 llll Sep 10, 2015 04:22 PM OFFICIAL RECORDS Ernest J. Dronenburg, Jr., SAN DIEGO COUNTY RECORDER FEES: $30.00 PAGES: 6 NOTICE OF AFFORDABILITY RESTRICTIONS ON TRANSFER OF PROPERTY NOTICE IS HEREBY GIVEN, that the City of Carlsbad ("City"), has required Bradley D. Smith a Single Man ("Owner") to enter into certain affordability covenants and restrictions entitled, Affordability Restrictions on Transfer of Property, Occupancy, and Refinancing Restrictions and Option to Purchase ("Restrictions"), with reference to certain real property located at 7011 Forsters Tem Drive, San Diego County ("Property"), and further described in Exhibit A, incorporated herein by reference. The affordability covenants and restrictions contained in the Restrictions include without limitation and as further described in the Restrictions: 1. The Property is restricted for resale to a very low-income household at a purchase price affordable to a very low -income household, except as set forth in the Restriction. 2. The Owner must occupy the Property as the Owner's principal residence. 3. The Owner must give notice to the City before resale of the Property. 4. The Owner has granted the City an option to purchase the Property upon resale or default. 5. The Owner's rights to pledge the Property as security for a debt are limited. 6/22/2015 Recording Requested By Lawyers Title RECORDING REQUESTED PURSUANT TO GOVERNMENT CODE SECTION 27383 When Recorded Mail To: CityofCarlsbad City Clerk's Office 1200 Carlsbad Village Drive Carlsbad, CA 92008 NOTICE OF AFFORDABILITY RESTRICTIONS ON TRANSFER OF PROPERTY NOTICE IS HEREBY GIVEN, that the City of Carlsbad ("City"), has required Bradley D. Smith a Single Man ("Owner") to enter into certain affordability covenants and restrictions entitled, Affordability Restrictions on Transfer of Property, Occupancy, and Refinancing Restrictions and Option to Purchase ("Restrictions"), with reference to certain real property located at 7011 Forsters Tem Drive, San Diego County ("Property"), and fiirther described in Exhibit A, incorporated herein by reference. The affordability covenants and restrictions contained in the Restrictions include without limitation and as fiirther described in the Restrictions: 1. The Property is restricted for resale to a very low-income household at a purchase price affordable to a very low -income household, except as set forth in the Restriction. 2. The Owner must occupy the Property as the Owner's principal residence. 3. The Owner must give notice to the City before resale of the Property. 4. The Owner has granted the City an option to purchase the Property upon resale or default. 5. The Owner's rights to pledge the Property as security for a debt are limited. 6/22/2015 In the event of any conflict between this Notice of Affordability Restrictions on Transfer of Property ("Notice") and the Restrictions, the terms of the Restrictions shall prevail. The Restrictions have been recorded concurrently herewith and shall remain in effect for thirty (30) years commencing on the date of recordation of the Restrictions. This Notice is being recorded and filed by the City of Carlsbad ("City") in compliance with Health and Safety Code Sections 33334.5(f)(3) and (4) and/or Section 33413(c)(5), as amended effective this date, and shall be indexed against the City and the Owner. IN WITNESS WHEREOF, the parties have executed this Notice of Affordability Restrictions on Transfer of Property on or as of the date first written above. CITY: OWNER: CITYOF CARLSBAD , 1 . IZ- ^ (Signature) By: ^ LU.P^ f?7^-*^VO^^ Debbie~FCuntain, Housing &Neighborhood Services Director (Type name) Dated: g^/ZV //5" (Signature) (Type Name) (PROPER NOTORIAL ACKNOWLEDGEMENT MUST BE A TTA CHED) 6/22/2015 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT CIVIL CODE §1189 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 SoiV\ Dl'gA <r) ) On Plo^Qgrl' 17 ^Ot^ before me, PoHtcAn L 0 rPSC-er^ j^^tfVliUy 0 Dare Here Insert Name ana Title of the Officer personally appeared O^Hoig feoyApiID ' " " Name(s) of Signer(s) who proved to me on the basis of satisfactory evidence to be the person(;^$^ whose name(^ is/ai=©- subscribed to the within instrument and acknowledged to me that he/she/they executed the same in Ns/her/tbeir authorized capacity(i9^, and that by l^/her/their signature)^ on the instrument the person(a); or the entity upon behalf of which the person'J^acted, executed the instrument. I PATRICIA L CRESCENTI Commission # 2065912 Notary Pubiic - California San Oiego Couniy £ M|r Conm Explrw May j^^^^ 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 sei Signature Signature o; Place Notary Seal Above OPTIONAL Though this section is optional, completing this information can deter alteration of the documeoUif- fraudulent reattachment of this form to an unintended document. Description of Attacf Title or Type of Document: Number of Pages: ment Capacity(jes) Claimed by Signer(s) Signer's Name: • Corporate Officer — Title(s): • Partner — • Limited QjQ^fierai • Individual •Attorney in Fact • Trustee ^^^-^5Guardian or Conservator • Other: Sigperls'Representing: • Corporate Officer — Title(s): • Partner — • Limited • General • Individual • Attorney in Fact • Trustee • Guardian or Conservator • Other: Signer Is Representing: ©2014 National Notary Association • www.NationalNotary.org • 1 -800-US NOTARY (1 -800-876-6827) Item #5907 In the event of any conflict between this Notice of Affordability Restrictions on Transfer of Property ("Notice") and the Restrictions, the terms of the Restrictions shall prevail. The Restrictions have been recorded concurrently herewith and shall remain in effect for thirty (30) years commencing on the date of recordation of the Restrictions. This Notice is being recorded and filed by the City of Carlsbad ("City") in compliance with Health and Safety Code Sections 33334.5(f)(3) and (4) and/or Section 33413(c)(5), as amended effective this date, and shall be indexed against the City and the Owner. IN WITNESS WHEREOF, the parties have executed this Notice of Affordability Restrictions on Transfer of Property on or as of the date first written above. CITY: OWNER: CITYOF CARLSBAD By: Debbie Fountain, Housing &Neighborhood Bradley D. Smith Services Director (Type name) Dated: (Signature) (Type Name) (PROPER NOTORIAL ACKNOWLEDGEMENT MUST BE ATTACHED) 6/22/2015 ACKNOWLEDGMENT A notary public or other officer completing this certificate verifies only the identity ofthe individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity ofthat document. STATE OF CALIFORNIA ) )SS. COUNTYOF San P/(^o ) On (XlA^lAS-i IK I 9-0(5 before me, • {y5/:cyi/e^a^ t^^fv^i^j/ fu/?//C , A Notary Public personally appeared Bradley D. Smith who proved to me on the basis of satisfactory evidence to be the personas) whose name(^s/ap© subscribed to the within instrument and acknowledged to me that he/ehe/they executed the same in his/her/their authorized capacity (-ies), and that by his/lw/their signature(8) on the instrument the person)^, or the entity upon behalf of which the personOs) 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. ^^^^a^^ST^^^^A'ESCAi^RA' COMM. #1984421 NOTARY PUBUC • CAUFORNIA ORANOECOUNTY ^^^^^^^^^^Cpmm. Ex&. JULY 6^^2016 Signature /^A^^^i^^^^^^^T^ (Seal) EXHIBIT A LEGAL DESCRIPTION OF PROPERTY THE LAND REFERRED TO HEREIN IS SFTUATED IN THE COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS: A CONDOMINIUM COMPRISED OF: PARCEL 1: AN UNDIVIDED INTEREST IN THE COMMON AREA: A ONE-TWENTY-FOURTH (1/24TH) UNDIVIDED FRACTIONAL FEE INTEREST IN AND TO ALL OF THE PROPERTY LOCATED IN THE CrTY OF CARLSBAD, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, DESCRIBED AS MODULE A OF THAT CERTAIN CONDOMINIUM PLAN RECORDED ON APRIL 25, 2005 AS INSTRUMENT NO. 05-0342075, AND RE-RECORDED MAY 5, 2005 AS INSTRUMENT NO. 2005- 0380844 BOTH IN THE OFFICIAL RECORDS OF SAN DIEGO COUNTY, CALIFORNIA, AS SAME MAY BE AMENDED, MODIFIED, AND/OR RE-RECORDED FROM TIME TO TIME ("CONDOMINIUM PUN"). PARCEL 2: THE CONDOMINIUM UNFT: UNFF 7 ON THAT CERTAIN PORTION OF LOT 14 OF CFFY OF CARLSBAD TRACT NO. CT 98-14-01, IN THE CFTY OF CARLSBAD, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 14682 FILED ON SEPTEMBER 19, 2003, IN THE RECORDS OF SAN DIEGO COUNTY, CALIFORNIA, AS DESCRIBED AND DEPICTED ON THE CONDOMINIUM PLAN AND AS DESCRIBED IN THE "DECLARATION OF COVENANTS, CONDFTIONS AND RESTRICTIONS, AND RESERVATION OF EASEMENTS FOR THE BAY COLLECTION" RECORDED ON NOVEMBER 10, 2004, AS INSTRUMENT NO. 04-1070454. AND THE "NOTICE OF ANNEXATION FOR PHASE 2 OF THE BAY COLLECTION. RECORDED ON APRIL 25, 2005, AS INSTRUMENT NO. 05-0342076. BOTH IN THE OFFICIAL RECORDS OF SAN DIEGO COUNTY, CALIFORNIA, AS SAME MAY BE AMENDED, MODIRED, AND/OR RE-RECORDED FROM TIME TO TIME (COLLECTIVELY REFERRED TO AS THE "DECLARATION"). PARCEL 3: NONEXCLUSIVE EASEMENTS OVER ASSOCIATION PROPERTY: A NONEXCLUSIVE EASEMENT APPURTENANT TO THE AFORE-DESCRIBED CONDOMINIUM UNFT FOR INGRESS, EGRESS, USE, AND ENJOYMENT IN, ON, OVER, ACROSS, AND THROUGH ALL PORTIONS OFTHE ASSOCIATION PROPERTY OFTHE PROJECT, EXCEPTING THEREFROM THOSE PORTIONS DESCRIBED AS EXCLUSIVE USE ASSOCIATION PROPERTY, IF ANY, AND ACROSS ALL PORTIONS OF ANY ASSOCIATION PROPERTY SUBSEQUENTLY ANNEXED INTO THE PROJECT, IF ANY, WHICH ARE NOT DESCRIBED AS EXCLUSIVE USE ASSOCIATION PROPERTY. PARCEL 4: EASEMENTS FOR EXCLUSIVE USE ASSOCIATION PROPERTY: THE APPLICABLE EXCLUSIVE USE ASSOCIATION PROPERTY EASEMENTS APPURTENANT TO THE AFORE-DESCRIBED CONDOMINIUM UNFT (E.G., PORCH, DECK, YARD, PARKING SPACE, ETC.), AS MORE PARTICULARLY DESCRIBED AND/OR DEPICTED IN THE DECLARATION, NOTICE OF ANNEXATION, AND/OR THE CONDOMINIUM PLAN ("EXCLUSIVE USE ASSOCIATION PROPERTY"). [PARCELS 1 THROUGH 4, INCLUSIVE ARE COLLECTIVELY REFERRED TO AS THE "CONDOMINIUM ESTATE"] ASSESSOR'S PARCEL NUMBER: 214-620-14-07 Recording Requested By Lawyers Title RECORDING REQUESTED PURSUANT TO GOVERNMENT CODE SECTION 27383 When Recorded Mail To: City of Carlsbad City Clerk's Office 1200 Carlsbad Village Drive Carlsbad, CA 92008 DOC# 2015-0493789 lllllliilllllilillllllllllllllllllllllllllll Sep 18, 2015 10:18 AM OFFICIAL RECORDS Ernest J. Dronenburg, Jr., SAN DIEGO COUNTY RECORDER FEES: $0.00 PCOR: N/A PAGES: 29 RESALE RESTRICTION AGREEMENT, AND OPTION TO PURCHASE CITY OF CARLSBAD HOMEBUYER PROGRAM - 2015 Owner: Bradley D. Smith Address of Property: 7011 Forsters Tem Drive, Carlsbad, CA This Resale Restriction Agreement and Option to Purchase ("Agreement") is entered into as ofthis 11th day of August, 2015 by and between the City of Carlsbad a municipal corporafion ("City"), and Bradley D. Smith , a Single Man("Owner"). RECITALS A. The City has developed a second mortgage program designed to assist qualified low or moderate income households purchase their homes located within the City of Carlsbad ("Homebuyer Program"). B. In connection with its affordable homeownership program the City made a loan ("Homebuyer Loan") in the amount of One hundred ninety-five thousand twenty-two hundred twenty-nine Dollars ($195,2l3t]9) to Owner to purchase a single-family dwelling located in Carlsbad, Califomia on that certain real property and more particularly described in Exhibit A ("Property"). The Homebuyer Loan in is an amount that will make the Property affordable to low and moderate income households.] C. As used herein, the term "Property" includes both the real property and all improvements now or hereafter erected thereon and all easements, rights, appurtenances, and all fixtures now or hereafter attached thereto. D. The "Original Affordable "Purchase Price" of the Property is One hundred ninety- nine thousand seven hundred seventy-one Dollars ($199,771).The Original Affordable Purchase 1 CA 6/22/2015 Recording Requested By Lawyers Title A^o ilctt/O^ / A^ RECORDING REQUESTED PURSUANT TO GOVERNMENT CODE SECTION 27383 When Recorded Mail To: City of Carlsbad City Clerk's Office 1200 Carlsbad Village Drive Carlsbad, CA 92008 RESALE RESTRICTION AGREEMENT, AND OPTION TO PURCHASE CITY OF CARLSBAD HOMEBUYER PROGRAM - 2015 Owner: Bradley D. Smith Address of Property: 7011 Forsters Tem Drive, Carlsbad, CA This Resale Restriction Agreement and Option to Purchase ("Agreement") is entered into as ofthis 11th day of August, 2015 by and between the City of Carlsbad a municipal corporation ("City"), and Bradley D. Smith , a Single Man("Owner"). RECITALS A. The City has developed a second mortgage program designed to assist qualified low or moderate income households purchase their homes located within the City of Carlsbad ("Homebuyer Program"). B. In connection with its affordable homeownership program the City made a loan ("Homebuyer Loan") in the amount of One hundred ninety-five thousand twenty-two hundred twenty-nine Dollars ($195,22.9) to Owner to purchase a single-family dwelling located in Carlsbad, Califomia on that certain real property and more particularly described in Exhibit A ("Property"). The Homebuyer Loan in is an amount that will make the Property affordable to low and moderate income households.] C. As used herein, the term "Property" includes both the real property and all improvements now or hereafter erected thereon and all easements, rights, appurtenances, and all fixtures now or hereafter attached thereto. D. The "Original Affordable "Purchase Price" of the Property is One hundred ninety- nine thousand seven hundred seventy-one Dollars ($199,77l).The Original Affordable Purchase 1 CA 6/22/2015 Price is the effective price of the Residence paid by the Owner. The actual price of the Residence is equal to the Original Affordable Purchase Price plus the amount of the Promissory Note ("Full Purchase Price"). [Insert appropriate text: Owner is a [low income household] or [moderate income household.] E. The Owner is receiving a First Lender Loan in the amount of Eighty-three thousand Dollars ($83,000) ("First Lender Loan") fi-om Union Bank ("First Lender"). The First Lender Loan is secured by a deed of trust dated N/A, 20 /A, executed by the Buyer in favor of First Lender and recorded in the County of San Diego on , and assigned Recorder's Serial No. ("First Lender Deed of Trust"). F. The Loan is evidenced by a promissory note in the amount of the Loan ("City Note"). This Agreement and the City Note shall be secured by a deed of tmst ("City Deed of Tmst") subordinate to the lien of First Lender Deed of Trust. G. The purpose of this Agreement is to place resale controls on the Property, to provide the City an option to purchase the Property at a restricted price and to ensure that the Owner complies with the Homebuyer Program requirements. H. This Agreement and the City Note require repayment of the loan plus contingent interest and, in certain instances, payment of excess proceeds of sale. This Agreement will remain in full effect as an encumbrance on the Property after any prepayment of the City Note by the Buyer. NOW, THEREFORE, in consideration of the benefits received by the Owner and the City, the Owner and the City agree, as follows: 1. DEFINITIONS AND EXHIBITS A. The following terms are specifically defmed for this Agreement and their defmitions can be found in the Sections indicated below: (1) "Affordable Sales Price" - Secfion 14A(l)(a). (2) "Agreement" - first sentence of the Agreement on page 1. (3) "City" - first sentence of the Agreement on page 1. (4) "City Deed of Trust" - Recital F. (5) "City Designated Purchaser" - Secfion 12B. (6) "City Note" - Recital F. (7) "City Option" - Secfion 12A. CA 6/22/2015 (8) "City Response Notice" - Secfion 10. (9) "Default"-Section 18 (10) "Eligible Purchaser" Secfion 15B. (11) "Extended Term"-IOC. (12) "Excess Sales Proceeds" - Section 16. (13) "Fair Market Value" - Secfion 14B. (14) "First Lender" - Recital E. (15) "First Lender Deed of Tmst" - Recital E. (16) "First Lender Loan" - Recital E. (17) "Full Purchase Price" - Recital D. (18) "Full Sales Price" - Section 14A. (19) "Homebuyer Loan" - Recital B. (20) "HUD" - Section 30. (21) "Initial Term" - lOB. (22) "Market Purchaser" - Section 1 OC. (23) "Maximum Restricted Resale Price" - Section 14. (24) "Median Income" - Section 14A. (25) "Original Affordable Purchase Price" - Recital D. (26) "Owner" - first sentence of the Agreement on page 1. (27) "Owner's Notice of Intent to Transfer" - Section 8. (28) "Property" - Recital B. (29) "Proposed Purchaser" - Secfion 15A. (30) "Transfer" - Section 7. CA 6/22/2015 (31) "Unauthorized Rental Proceeds" - Section 4. B. The following Exhibits are attached to this Agreement: (1) Exhibit A: Legal Description of Property (2) Exhibit B: Form of Owner Occupancy Certification (3) Exhibit C: Form of Owner's Notice of Intent to Transfer (4) Exhibit D: Form of City Response Notice (5) Exhibit E: Form of Owner Acknowledgement of City Response Notice (6) Exhibit F: Form of Owner Request for City Subordination to Refinanced First Lender Loan 2. OWNER CERTIFICATIONS The Owner certifies that (i) the fmancial and other information previously provided in order to qualify to purchase the Property is true and correct as of the date first written above, (ii) the Owner is an Eligible Purchaser, and (iii) the Owner shall occupy the Property as the Owner's principal place of residence. 3. OCCUPANCY OF PROPERTY A. The Owner shall occupy the Property as the Owner's principal place of residence within sixty (60) days of close of escrow on the Homebuyer Loan. Failure by the Owner to occupy the Property as the Owner's principal place of residence shall constitute a Default under this Agreement for which the City may exercise its option to purchase pursuant to Section 21 below. The Owner shall be considered as occupying the Property if the Owner is living in the unit for at least ten (10) months out of each calendar year. The Owner shall provide an annual written certification in the form shown in the attached Exhibit B. to the City that the Owner is occupying the Property as his or her principal place of residence. Upon the City's written request, the Owner shall provide any additional information and documents which the City requests including but not limited to tax retums and bank statements, which may evidence whether the Owner is occupying the Property. Failure to provide any additional information or documentation requested shall constitute a Default under this Agreement. 4. LEASING OF PROPERTY The Owner shall not lease all or a portion of the Property to another party. Any lease of the Property in violation of this Agreement is prohibited and all proceeds derived therefrom are 4 CA 6/22/2015 "Unauthorized Rental Proceeds", and shall be a Default under this Agreement and the City Deed of Trust. 5. HOMEBUYER EDUCATION CLASS The Owner shall attend all sessions of a first-time homebuyer education class offered by Community Housing Works. 6. MAINTENANCE AND INSURANCE PROCEEDS A. The Owner shall maintain the Property, including landscaping, in good repair and in a neat, clean and orderly condition and will not commit waste or permit deterioration of the Property. Failure by the Owner to maintain the Property shall constitute a default under this Agreement for which the City may exercise the City Option to purchase the Property pursuant to Section 21 below. B. The Owner shall maintain a standard fire and extended coverage home insurance policy equal to the replacement value ofthe Property (adjusted every five (5) years by appraisal, if requested by City), naming the City as an additional insured. Additional insurance requirements are set forth in Section 6 of the City Deed of Trust. 7. TRANSFER AND SALE RESTRICTIONS Any Transfer of the Property will be subject to the provisions of this Agreement including, without limitation, exercise of the City Opfion pursuant to Section 12 below. "Transfer" shall mean any sale, assignment or transfer, voluntary or involuntary, of any interest in the Property, including, but not limited to, a fee simple interest, a joint tenancy interest, tenancy in common interest, a life estate, a leasehold interest, an interest evidenced by a land contract by which possession of the Property is transferred and Owner retains title. Any Transfer without satisfaction of the provisions of this Agreement is prohibited. A Transfer shall not include a transfer: (i) to an existing spouse who is also an obligor under the City Note; (ii) by the Owner to a spouse where the spouse becomes the co-owner of the Property; (iii) between spouses as part ofa marriage dissolution proceeding; (iv) to an existing spouse of Owner by devise or inheritance following the death of Owner; (v) by Owner into an inter vivos revocable trust in which Owner is the Trustor; (vi) by deed of trust or imposition ofa lien subordinate to the City Deed of Trust or (vii) refinance of the First Mortgage meeting the requirements of Section 28 of this Agreement; provided, however, that Owner shall provide written notice of all such transfers to City pursuant to Section 8 below; and Owner shall continue to occupy the Property as his or her principal place of residence (except where the transfer occurs pursuant to subsection (iii) or (iv) above, in which event the transferee shall owner-occupy the Property and affirmatively assume Owner's obligations under this Agreement, the City Note and the City Deed of Trust). CA 6/22/2015 8. NOTICE OF INTENDED TRANSFER A. In the event the Owner intends to transfer (including without limitation all "Transfers" as defmed in Section 7) or vacate the Property, the Owner shall promptly give the City written notice of such intent (the "Owner's Notice of Intent to Transfer ") in the form shown in the attached Exhibit C. The Owner shall give the City the Owner's Notice of Intent to Transfer prior to notifying real estate brokers or lenders of Owner's intent to Transfer the Property and prior to listing of the Property on the Multiple Listing Service. The Owner's Notice of Intent to Transfer shall be sent to the City in the manner and at the address provided in Section 33 of this Agreement. The Owner's Notice of Intent to Transfer shall include the information necessary for the City to determine the Maximum Restricted Resale Price of the Property, including the following information: (1) the address of the Property; (2) the date of purchase of the Property by the Owner; (3) the Original Affordable Purchase Price of the Property; (4) the Full Purchase Price of the Property (which is the Original Affordable Purchase Price plus the original amount of the Homebuyer Loan). (5) a copy of the HUD-1 Settlement Statement or equivalent document from the close of escrow on the Owner's purchase of the Property; (6) the date on which Owner intends to vacate Property; (7) the date the Property will be placed on the market; and (8) the name and phone number of the person to contact to schedule inspection of the Property by the City. 9. OWNER PREPARATION OF HOME FOR SALE A. The Owner may not wish to contract with a real estate broker to sell the Home until the Owner has received the City Response Notice pursuant to Section 10 below, as the services of a broker will not be required ifthe City exercises the City Option to purchase the Home pursuant to Section 12 below. B. Following delivery to the City of the Owner's Notice of Intent to Transfer, the Owner shall prepare the Home for sale, as follows: (1) within thirty (30) days of delivery of the Owner's Notice of Intent to Transfer, the Owner shall obtain and deliver to the City a current written report of inspection of the Home by a licensed structural pest control operator; CA 6/22/2015 (2) within the sooner of (a) sixty (60) days from the date of delivery of the Owner's Notice of Intent to Transfer, or (b) prior to close of escrow on the Transfer, the Owner shall repair all damage noted in the pest report including damage caused by infestation or infection by wood-destroying pests; (3) within thirty (30) days of the date of the Owner's Notice of Intent to Transfer, the Owner shall allow the City to inspect the Home to determine its physical condition; (4) if the Home is vacant, the Owner shall maintain utility connections until the close of escrow on the Transfer; (5) in the event of purchase of the Property by the City or City Designated Purchaser, the Owner shall permit a final walk-through of the Property by the City or City Designated Purchaser, in the final three (3) days prior to close of escrow on the Transfer. 10. CITY RESPONSE TO OWNER'S NOTICE OF INTENDED TRANSFER City shall respond in writing (the "City Response Notice") to the Owner's Notice of Intent to Transfer. The form of City Response Notice is attached as Exhibit D. The City Response Notice shall inform the Owner of the City's election to proceed under one (1) of the following two (2) altematives: A. Citv Exercise of Citv Purchase Option. The City Response Notice may notify the Owner that the City or a City Designated Purchaser elects to exercise the City Option to purchase the Property. The City Response Notice shall be sent within thirty (30) days of City receipt of Owner's Notice of Intent to Transfer and shall include the City's calculation of the (i) Maximum Restricted Resale Price pursuant to Section 14 below to be paid by the City or a City Designated Purchaser and (ii) the transaction fee to be paid by the Owner pursuant to Section 12 below. B. Initial Term: Owner Sale at a Restricted Sales Price to Eligible Purchaser. Altematively, the City Response Notice may notify the Owner that the City or a City Designated Purchaser will not exercise the City Option to purchase the Property. In this case, if the Owner has sent the Notice of Intent to Transfer within fifteen (15) years of the date of recordation of this Agreement (the "Initial Term"), the City Response Notice shall tell the Owner that the Owner may proceed to sell the Property to an Eligible Purchaser at a price not to exceed the Maximum Restricted Resale Price, as set forth in Section 14 and pursuant to the procedure set forth in Secfion 14 below. In this event, the City Response Nofice shall include the following information: (1) the maximum qualifying income for an Eligible Purchaser (which shall be the same income category as the Owner at the time of the Owner's purchase); (2) the certifications required of an Eligible Purchaser; (3) the Maximum Restricted Resale Price the Owner may receive for the Property, calculated by the Cify pursuant to Section 14 below; (4) whether Homebuyer Program assistance from the Cify may be available to an Eligible Purchaser, (5) Owner's repayment obligation as required by Section 13. C. Extended Term Owner Sale to Market Purchaser. If the Cify Response Notice notifies the Owner that the Cify or a City Designated Purchaser will not exercise the Cify Option 7 CA 6/22/2015 to purchase the Property, and the Owner has sent the Notice of Intent to Transfer between the fifteenth (15*) year of the Term and the end ofthe Term, (the "Extended Term"), the Cify Response Notice shall inform Owner that Owner may proceed to sell the Property to a third parfy at any income level (the "Market Purchaser") for an unrestricted price. The City Response Notice shall also inform Owner of Owner's repayment obligation as required by Section 13. 11. OWNER ACKNOWLEDGEMENT OF CITY RESPONSE NOTICE No later than seven (7) days following the date of the City Response Notice, the Owner shall acknowledge in writing to the Cify, in the form shown in the attached Exhibit E. that he/she has received the Cify Response Notice and still intends to Transfer the Property. 12. CITY PURCHASE OPTION A. The Owner agrees that if the Owner decides to Transfer the Properfy, the Cify shall have the option to purchase the Property for the Maximum Restricted Resale Price calculated pursuant to Section 14 of this Agreement (the "Cify Option"). The Owner shall pay the Cify a transaction fee up to six percent (6%) of the Maximum Restricted Resale Price ifthe Cify or a Cify Designated Purchaser exercises the City Option and purchases the Property. The Cify Option may be exercised by the Cify or by a Cify Designated Purchaser in the City Response Notice. If the City Response Notice notifies the Owner that the Cify or a City Designated Purchaser will exercise the Cify Option to purchase the Properfy, the Cify or the City Designated Purchaser shall purchase the Property within ninety (90) days ofthe date ofthe Cify Response Notice and title shall be delivered by the Owner to the Cify by grant deed free and clear of any mortgage or other liens, unless approved in writing by the Cify. B. The City may assign the Cify Option to another public agency, a nonprofit corporation, or an Eligible Purchaser selected by the Cify (any of which shall be referred to herein as a "Cify Designated Purchaser"). If the Cify assigns the Cify Option to a City Designated Purchaser, the Cify Response Notice shall be executed by the Cify Designated Purchaser and shall notify the Owner that a City Designated Purchaser is exercising the City Option in lieu of the Cify. C. In the event of exercise of the Cify Option and purchase of the Properfy by the Cify or a Cify Designated Purchaser, the Owner shall permit a final walk-through ofthe Properfy by the Cify or the City Designated Purchaser in the final three (3) days prior to close of escrow on the Transfer. 13. REPAYMENT OF CITY NOTE Upon any Transfer of the Property, the outstanding principal and interest due under the Cify Note shall be repaid pursuant to the Cify Note unless (i) such principal and interest is assumed by an Eligible Purchaser in accordance with Section 9 of the Cify Note or (ii) the Cify 8 CA 6/22/2015 exercises the Cify Option to purchase the Properfy, in which event the outstanding amount of principal and Contingent Interest due under the Cify Note shall be paid to the Cify in the form of a credit against the purchase price to be paid by the Cify to the Owner. Repayment of the Cify Note shall not affect Owner's obligation to comply with this Agreement, which shall remain in full force and effect following any repayment of the Cify Note. 14. DETERMINATION OF MAXIMUM RESTRICTED RESALE PRICE The maximum sales price (the "Maximum Restricted Resale Price") that the Owner shall receive from the resale of the Properfy from purchase of the Properfy by the City or Cify Designated Purchaser or from other sale or Transfer by the Owner when the Owner sends the Notice of Intent to Transfer during the Initial Term shall be the Full Sales Price or the Fair Market Value, whichever is less. A. Full Sales Price. (1) The Full Sales Price of the Properfy means: (a) the Affordable Sales Price plus (b) the principal and contingent interest then due on the Cify Note. The Affordable Sales Price means the Original Affordable Purchase Price, as set forth in Recital D to this Agreement, increased by the percentage of increase in the Median Income from the date of the original purchase of the Properfy by the Owner to the date of receipt by the City of the Owner's Notice of Intent to Transfer "Median Income" shall refer to the median yearly income, adjusted for a household size of four, in San Diego Counfy, as published by the Califomia Department of Housing and Communify Development ( "HCD"), or, in the event such income determination is no longer published by HCD, or has not been updated for a period of at least eighteen (18) months, the Cify may use or develop such other reasonable method as it may choose in order to determine the median yearly income in San Diego Counfy. As of the date of Owner's purchase of the Properfy, the Median Income for a household of four persons is Dollars ($ ). (2) The Affordable Sales Price shall include a downward adjustment, where applicable, in an amount necessary to repair any violations of applicable building, plumbing, electric, fire or housing codes or any other provisions of the City of Carlsbad Building Code, as well as any other repairs needed to put the Properfy into a "sellable condition". Items necessary to put a Properfy into sellable condition shall be determined by the Cify, and may include cleaning, painting and making needed stmctural, mechanical, electrical, plumbing and fixed appliance repairs and other deferred maintenance repairs. B. Fair Market Value. In certain circumstances it may be necessary to determine the fair market value of the Properfy without taking account of the resale restrictions imposed by this Agreement (the "Fair Market Value"). These circumstances include but are not limited to: (1) where the parties wish to determine if the Full Sales Price exceeds the Fair Market Value in order to determine the Maximum Restricted Resale Price pursuant to this section; (2) where the parties wish to determine if the sales price of the Properfy to a Market Purchaser is comparable to the Fair Market Value; and (3) to calculate the amount due under the Cify Note at the end of the term of the City Note or upon prepayment. If it is necessary to determine the Fair Market CA 6/22/2015 Value of the Properfy, it shall be determined by a certified MAI or other qualified real estate appraiser approved in advance by the Cify. If possible, the appraisal shall be based upon the sales prices of comparable properties sold in the market area during the preceding three (3)- month period. The cost of the appraisal shall be paid by the Owner, unless the appraisal is obtained from a new purchaser. Nothing in this section shall preclude the Owner and the Cify from establishing the Fair Market Value of the Properfy by mutual agreement in lieu of an appraisal pursuant to this section. 15. SALE BY OWNER DURING INITIAL TERM IF CITY DOES NOT EXERCISE OPTION TO PURCHASE In the event the City Response Notice notifies the Owner to proceed to sell the Properfy to an Eligible Purchaser at a price not exceeding the Maximum Restricted Resale Price, the Owner may proceed to sell the Properfy in compliance with the following requirements: A. Marketing. The Owner shall use bona fide good faith efforts to sell the Properfy to an Eligible Purchaser in compliance with this section, including listing the Properfy on the Multiple Listing Service, keeping the Properfy in an orderly condition, making the Properfy available to show to agents and prospective buyers, and providing buyers with Eligible Purchaser requirements, including income qualifications and the City's form of disclosure statement summarizing the terms of the buyer's occupancy and resale restriction agreement with option to purchase. A proposed purchaser ("Proposed Purchaser") who the Owner believes will qualify as an Eligible Purchaser shall be referred to the Cify for an eligibilify determination. If the Proposed Purchaser qualifies as an Eligible Purchaser the Cify will also determine if such Eligible Purchaser is eligible for Cify housing-related financial assistance that may be available at the time of resale. B. Eligible Purchaser. A Proposed Purchaser shall qualify as an "Eligible Purchaser "if he or she meets the following requirements, as determined by the Cify: (1) Income Eligibility. The combined maximum income for all household members of the Proposed Purchaser shall not exceed the income level designated by the Cify in the City Response Notice. (2) Intent to Owner Occupy. The Proposed Purchaser shall certify that he or she will occupy the Properfy as to his or her principal place of residence throughout his or her ownership. Co-signers are not required to occupy the Properfy. (3) Agreement to Sign Resale Restriction Agreement and to Cooperate with the City. The Proposed Purchaser shall agree to sign a resale restriction agreement restricting future resale of the Property and shall agree to cooperate fully with the Cify in promptly providing all information requested by the Cify to assist the Cify in monitoring the Proposed Purchaser's compliance with the resale restriction agreement. C. Maximum Restricted Resale Price. The purchase price for the sale of the Properfy by the Owner to the Eligible Purchaser shall not exceed the Maximum Restricted Resale Price calculated by the Cify pursuant to Section 14 above, as set forth in the Cify Response Notice. 10 CA 6/22/2015 The closing costs paid by the Eligible Purchaser shall not exceed reasonable customary buyer's closing costs in the Counfy of San Diego. Pursuant to Section 13 of this Agreement and Section 9 of the Cify Note, the Eligible Purchaser may assume the Homebuyer Loan and the effective purchase price that the Eligible Purchaser will pay for the Property is likely to be the Affordable Sales Price. D. Disclosure and Submittals. The Owner and the Proposed Purchaser shall provide the following information and documents to the Cify: (1) The name, address and telephone number in writing of the Proposed Purchaser. (2) A signed financial statement of the Proposed Purchaser in a form acceptable to the City and any other supporting documentation requested by the Cify. The financial information shall be used by the City to determine the income eligibilify of the Proposed Purchaser. (3) The proposed sales contract and all other related documents which shall set forth all the terms of the sale of the Property. Said documents shall include at least the following terms: (a) the sales price; and (b) the price to be paid by the Proposed Purchaser for the Owner's personal Properfy, if any, for the services of the Owner, if any, and any credits, allowances or other consideration, if any. (4) A written certification, from the Owner and the Proposed Purchaser in a form acceptable to the Cify that the sale shall be closed in accordance with the terms of the sales contract and other documents submitted to and approved by the Cify. The certification shall also provide that the Proposed Purchaser or any other parfy has not paid and will not pay to the Owner, and the Owner has not received and will not receive from the Proposed Purchaser or any other party, money or other consideration, including personal properfy, in addition to what is set forth in the sales contract and documents submitted to the Cify. The written certification shall also include a provision that in the event a Transfer is made in violation of the terms of this Agreement or false or misleading statements are made in any documents or certification submitted to the Cify, the Cify shall have the right to foreclose on the Property or file an action at law or in equity as may be appropriate. In any event, any costs, liabilities or obligations incurred by the Owner and the Proposed Purchaser for the return of any moneys paid or received in violation of this Agreement or for any of the Owner's and/or the Proposed Purchaser's costs and legal expenses, shall be bome by the Owner and/or the Proposed Purchaser and they shall hold the City harmless and reimburse the City's expenses, legal fees and costs for any action they reasonably take in good faith in enforcing the terms of this Agreement. (5) An executed buyer's resale agreement and deed of tmst to the City from the Proposed Purchaser in forms provided by the City. If the Proposed Purchaser is receiving assistance from the Homebuyer Program, a promissory note to the City shall also be required. The recordation of the new deed of trust and buyer's resale agreement shall be a condition of the City's approval of the proposed sale. 11 CA 6/22/2015 (6) The name of the title company escrow holder for the sale of the Property, the escrow number, and name, address, and phone number of the escrow officer. (7) Upon the close of the proposed sale, certified copies of the recorded City deed of trust and buyer's resale agreement, a copy of the final sales contract, settlement statement, escrow instructions, and any other documents which the City may reasonably request. 16. PAYMENT TO CITY OF EXCESS SALES PROCEEDS Ifthe Owner makes a Transfer in violation of this Agreement at any time during the Initial Term or Extended Term, the Owner shall pay the Excess Sales Proceeds to the City. If the Owner Transfers the Property in violation of this Agreement, the Appreciation Amount (as such term is defined in the City Note) shall be calculated using the Maximum Restricted Resale Price ofthe Property, rather than the actual sales price. For purposes of this Agreement, "Excess Sales Proceeds" shall mean ninety-four percent (94%) of the amount by which the gross sales proceeds received by the Owner from the new purchaser exceed the Maximum Restricted Resale Price for the Property. This amount shall be a debt of the Owner to the City, further evidenced by the City Note, and secured by the City Deed of Trust. The Owner acknowledges that the City shall have no obligation to cause reconveyance of this Agreement or of the City Deed of Tmst until the Excess Sales Proceeds are paid to the City. The City shall utilize the Excess Sales Proceeds for City affordable housing programs. The Owner and the City acknowledge that the formula for calculation of the amount of Excess Sales Proceeds due from the Owner to the City is intended to cause the Owner to receive the same net sales proceeds (following payment by Owner of a standard broker's commission) from sale of the Property at an unrestricted price to a market purchaser (in violation of this Agreement) as the Owner would receive from sale of the Property to the City, City Designated Purchaser or to an Eligible Purchaser at the Maximum Restricted Resale Price. 17. SALE OF PROPERTY BY OWNER DURING EXTENDED TERM In the event the City Response Notice notifies the Owner to proceed to sell the Property to a Market Purchaser at a price greater than or equal to the Fair Market Value of the Property, the Owner may proceed to sell the Property in compliance with the following requirements: Upon any sale of the Property, the Owner shall submit to the City at least fifteen (15) days prior to the close of escrow, a copy of the appraisal, and a copy of the sales contract and a written declaration, under penalty of perjury, from the Owner and the proposed purchaser in a form acceptable to the City stating the gross sales price ofthe Property. The certification shall also provide that the proposed purchaser or any other party has not paid and will not pay to the Owner, and the Owner has not received and will not receive from the proposed purchaser or any other party, money or other consideration, including personal property, in addition to what is set forth in the sales contract. At close of escrow. Owner shall submit to the City a copy ofthe HUD-1 Settlement Statement showing the purchase price paid for the Property. 12 CA 6/22/2015 18. DEFAULTS A. A Default by the Owner is any failure to comply with the requirements of this Agreement, the Promissory Note or the Deed of Tmst, whether by commission or omission which includes, but is not limited to the following:: (1) The City determines that the Owner has made a misrepresentation to obtain the benefits of purchase of the Property or in connection with its obligations under this Agreement. (2) The Owner fails to owner occupy the Property, as required pursuant to Section 3 above, and such failure continues following written notice by the City and sixty (60) days opportunity to cure following the date of such notice. (3) The Owner rents all or a portion of the Property in violation of Section 4 above, and such failure continues following written notice by the City and sixty (60) days opportunity to cure. (4) The Owner fails to provide information or documents to the City that the City deems necessary to determine Owner's compliance with the requirements of this Agreement. (5) The Owner makes a Transfer in violation of this Agreement. (6) A notice of default is issued under First Lender Loan or other financing secured by the Property. (7) A lien is recorded against the Property other than the lien of a bona fide mortgage loan. (8) Owner places a mortgage on the Property in violation of Section 28 below. (9) Owner declares bankmptcy or makes an assignment of assets for the benefit of creditors. B. Upon a declaration of Default by the City under this Agreement, the City may exercise any remedies at law or in equity, including without limitation, any or all of the following: (1) Declare all Excess Sales Proceeds immediately due and payable without fiirther demand, accelerate payments due under the City Note and invoke the power of sale under the City Deed of Trust; (2) Apply to a court of competent jurisdiction for such relief at law or in equity as may be appropriate; 13 CA 6/22/2015 (3) Declare a Default under the City Note and the City Deed of Tmst and pursue all City remedies under the City Note and the City Deed of Trust; and (4) Exercise the City Option upon Default as described in Section 21 below. 19. NOTICE AND CURE Upon a violation of any of the provisions of this Agreement, the City Note or the City Deed of Trust, the City may give written notice to the Owner specifying the nature of the violation and requesting a cure. If the violation is not corrected to the satisfaction of the Cify within a reasonable period of time, not longer than thirfy (30) days from the date the notice is mailed, or within such further time as the Cify determines is necessary to correct the violation, or ifthe Owner is in default under any other mortgage loan on the Properfy, the Cify may declare a Default under this Agreement. If the violation is failure to owner occupy or rental of the Properfy, the Owner shall be given sixfy (60) days from the date the notice is mailed to correct that violation and remit all Unauthorized Rental Proceeds to the Cify before the Cify may declare a Default. The Cify shall notify First Lender at the address provided by the First Lender to the Cify in the manner set forth in Section 33 of this Agreement, ifthe Cify has declared a Default under this Agreement or under the Cify Note or Cify Deed of Tmst. 20. NOTICE TO CITY OF DEFAULT A request for notice of default and any notice of sale under any deed of tmst or mortgage with power of sale encumbering the Properfy shall be recorded by the Cify in the Office of the Recorder of the Counfy of San Diego for the benefit of the Cify. The Cify may declare a default under this Agreement upon receipt of any notice given to the Cify pursuant to Civil Code Section 2924b, and may exercise its rights as provided in Sections 18 and 21. In the event of default and foreclosure under the First Lender Loan or any other mortgage loan on the Properfy, the Cify shall have the same right as the Owner to cure defaults and redeem the Properfy prior to the foreclosure sale. Nothing herein shall be constmed as creating any obligation ofthe Cify to cure any such default, nor shall this right to cure and redeem operate to extend any time limitations in the default provisions of the underlying deed of trust or mortgage. Ifthe Cify failed to file the request for notice of default, the City's right to purchase the Properfy shall commence from the date a notice of default is given by the Cify to the Owner. 21. PURCHASE OPTION UPON DEFAULT 14 CA 6/22/2015 A. Purchase Option. Notwithstanding, and in addition to, the remedies provided the Cify in Section 18, and the Cify Purchase Option provided in Section 12, the Owner hereby grants to the Cify or the Cify Designated Purchaser the option to purchase the Properfy effective upon the declaration of a Default by the Cify pursuant to Section 18 and Section 19 above, and subject to notice and cure rights set forth in Section 19. Said option to purchase is given in consideration of the economic benefits received by the Owner resulting from ownership of the Properfy made possible by the financial assistance of the Cify in the purchase ofthe Properfy. B. Exercise of Option. The option to purchase may be exercised upon a Default under this Agreement or upon default under any promissory note, deed of tmst or any other lien, including a judgment lien, recorded against the Properfy. The Cify shall have thirfy (30) days after a Default is declared to notify the Owner and the First Lender of its decision to exercise its option to purchase. Not later than ninefy (90) days after the notice is given by the Cify to the Owner of the Cify's intent to exercise its option, the City shall purchase the Properfy for the Maximum Restricted Resale Price set forth in Section 14. The Cify may assign its rights to purchase the Properfy under this section to a Cify Designated Purchaser. 22. NONLIABILITY OF THE CITY A. No Obligation to Exercise Option. The Cify shall have no obligation to exercise any option granted it under this Agreement. In no event shall the Cify become in any way liable or obligated to the Owner or any successor-in-interest to the Owner by reason of its option to purchase under Sections 12 and 21 nor shall the Cify be in any way obligated or liable to the Owner or any successor-in-interest to the Owner for any failure to exercise its option to purchase. B. Nonliability for Negligence. Loss, or Damage. Owner acknowledges, understands and agrees that the relationship between Owner and the City is solely that of an owner and an administrator of a Cify inclusionary housing program, and that the Cify does not undertake or assume any responsibilify for or duty to Owner to select, review, inspect, supervise, pass judgment on, or inform Owner of the qualify, adequacy or suitabilify of the Properfy or any other matter. The Cify owes no duty of care to protect Owner against negligent, faulfy, inadequate or defective building or constmction or any condition ofthe Properfy and Owner agrees that neither Owner, or Owner's heirs, successors or assigns shall ever claim, have or assert any right or action against the Cify for any loss, damage or other matter arising out of or resulting from any condition of the Properfy and will hold the Cify harmless from any liability, loss or damage for these things. C. Indemnity. Owner agrees to defend, indemnify, and hold the Cify harmless from all losses, damages, liabilities, claims, actions, judgments, costs including expenses, and reasonable attomeys fees that the Cify may incur as a direct or indirect consequence of: (1) Owner's default, performance, or failure to perform any obligations as and when required by this Agreement or the Deed of Tmst; or (2) the failure at any time of any of Owner's representations to the Cify to be true and correct. This provision shall survive the term of the Agreement. 15 CA 6/22/2015 23. RESTRICTIONS ON FORECLOSURE PROCEEDS If a creditor acquires title to the Properfy through a deed in lieu of foreclosure, a tmstee's deed upon sale, or otherwise, the Owner shall not be entitled to the proceeds of sale to the extent that such proceeds otherwise payable to the Owner when added to the proceeds paid or credited to the creditor exceed the Maximum Restricted Resale Price. The Owner shall instmct the holder of such excess proceeds (in addition to other amounts due to the Cify pursuant to the Cify Note and this Agreement) to pay such proceeds to the Cify in consideration of the benefits received by the Owner through purchase of the Properfy under this Agreement. 24. RESTRICTION ON INSURANCE PROCEEDS If the Properfy is damaged or destroyed and the Owner elects not to rebuild or repair the Properfy, the Owner shall pay the City the portion of any insurance proceeds received by the Owner for such destmction or damage which is in excess of the Maximum Restricted Resale Price calculated pursuant to Section 14 above. 25. TERM OF AGREEMENT All the provisions of this Agreement, including the benefits and burdens, mn with the land and the Properfy and this Agreement shall bind, and the benefit hereof shall inure to, the Owner, his or her heirs, legal representatives, executors, successors in interest and assigns, and to the Cify and its successors until the earlier of (i) [Modify if thirty years] [forty-five (45) years] [thirfy (30) years] from the date of recordation of this Agreement or (ii) the date of Transfer of the Property to the Cify or another purchaser in compliance with this Agreement (including execution by the purchaser of a new resale restriction agreement for the benefit of the Cify). 26. SUPERIORITY OF AGREEMENT The Owner covenants that he or she has not, and will not, execute any other agreement with provisions contradictory to or in opposition to the provisions of this Agreement hereof, and that, in any event, this Agreement is controlling as to the rights and obligations between and among the Owner, the Cify and their respective successors. 27. SUBORDINATION Notwithstanding any other provision hereof, the provisions of this Agreement shall be subordinate to the lien of the First Lender Loan and shall not impair the rights of the First Lender, or the First Lender's successor or assign, to exercise its remedies under the First Lender Deed of Trust in the event of default under the First Lender Deed of Trust by the Owner. Such remedies under the First Lender Deed of Trust include the right of foreclosure or acceptance of a deed or assignment in lieu of foreclosure. After such foreclosure or acceptance ofa deed or assignment in lieu of foreclosure, this Agreement shall be forever terminated and shall have no 16 CA 6/22/2015 fiirther effect as to the Properfy or any transferee thereafter; provided, however, ifthe holder of such First Lender Deed of Tmst acquired title to the Property pursuant to a deed or assignment in lieu of foreclosure, this Agreement shall automatically terminate upon such acquisition of title, provided that (i) the Cify has been given written notice of default under such First Lender Deed of Trust and (ii) the Cify shall not have cured or commenced to cure the default within such thirty (30)-day period and given its firm commitment to complete the cure in the form and substance acceptable to the First Lender. Owner agrees to record any necessary documents to effect such termination, if applicable. 28. REFINANCE OF FIRST LENDER LOAN The outstanding principal on the City Note shall not be due upon prepayment and refinancing of the First Lender Loan, and this Agreement and the City Deed of Trust shall be subordinated to the refinanced First Lender Loan, provided that (i) such refinancing is approved by the City, (ii) the amount refinanced does not exceed the outstanding principal balance ofthe First Mortgage at the time of refinance plus reasonable costs of refinance, and (iii) the refinance does not result in higher monthly payments on the First Lender Loan than were due prior to the refinance. Mortgage loans or equity lines of credit junior in lien priority to the City deed of tmst are not permitted. The City and the Owner agree that the requirements of this section are necessary to ensure the continued affordability of the Property to Owner and to minimize the risk ofloss of the Property by Owner through default and foreclosure of mortgage loans. Owner further acknowledges that violation of the provisions of this section shall constitute a Default under this Agreement. A form for use by the Owner in requesting City subordination to a refinanced First Lender Loan is attached hereto as Exhibit F. 29. NONDISCRIMINATION The Owner covenants by and for itself and its successors and assigns that there shall be no discrimination against or segregation of a person or of a group of persons on account of race, color, religion, creed, age, disability, sex, sexual orientation, marital status, ancestty or national origin in the sale, transfer, use, occupancy, tenure or enjoyment ofthe Property, nor shall the Owner or any person claiming under or through the Owner establish or permit any such practice or practices of discrimination or segregation with reference to the use, occupancy, or transfer of the Property. The foregoing covenant shall run with the land. 30. RIGHTS OF BENEFICIARIES UNDER DEEDS OF TRUSTS This Agreement shall not diminish or affect the rights ofthe City under the City Note and the City Deed of Trust. Notwithstanding any other provision in this Agreement to the contrary, this Agreement shall not diminish or affect the rights of the Califomia Housing Finance Agency ( "CHFA "), the United States Department of Housing and Urban Development ( "HUD "), the Federal National Mortgage Association ( "FNMA "), or the Veterans Administration ( "VA ") under the First 17 CA 6/22/2015 Lender Deed of Tmst or any subsequent First Lender deeds of trust hereafter recorded against the Property in compliance with Section 28 above. 31. HUD FORBEARANCE RELIEF Notwithstanding other provisions of this Agreement, the Option shall not be exercised by the City when a deed of tmst insured by HUD is secured by the Property, and (i) the Owner is undergoing consideration by HUD for assignment forbearance relief, or (ii) the Owner is undergoing consideration for relief under HUD's Temporary Mortgage Assistance Payment (TMAP) program. 32. INVALID PROVISIONS If any one or more of the provisions contained in this Agreement shall for any reason 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 Agreement, and this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein. 33. NOTICES All notices required herein shall be sent by certified mail, return receipt requested or express delivery service with a delivery receipt or personally delivered with delivery receipt obtained and shall be deemed to be effective as of the date shown on the delivery receipt as the date of delivery, or the date delivery was refiised as indicated on the retum receipt, or the date Notice was retumed as undeliverable as follows: To Owner(s): 4032 Sand Cove Way Carlsbad, CA 92008 To the City: City of Carlsbad Housing and Neighborhood Services 1200 Carlsbad Village Drive Carlsbad, CA 92008 Attn: Homebuyer Program The parties may subsequently change addresses by providing written notice of the change in address to the other parties in accordance with this section. 18 CA 6/22/2015 34. INTERPRETATION OF AGREEMENT The terms of this Agreement shall be interpreted so as to avoid speculation on the Property and to insure to the extent possible that the mortgage payments remain affordable to low and moderate income households. 35. CONTROLLING LAW The terms of this Agreement shall be interpreted under the laws of the State of Califomia. 36. EXHIBITS Any exhibits referred to in this Agreement are incorporated in this Agreement by such reference. IN WITNESS WHEREOF, the parties have executed this Agreement on or as ofthe date first written above. OWNER: CITY OF CARLSBAD: Bradley D. Smith Print Name Print Name By:. Name: Title: Owner Signature Date Date: (Proper notarial acknowledgment of execution by Owner must be attached) 19 CA 6/22/2015 ACKNOWLEDGMENT A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. STATE OF CALIFORNIA COUNTY OF San Ote^O On (\\XCja'^ IA. .^/^ ) )SS. before me,X?~ ^J/^^/t^/^ //7(^^/y pM i (- A Notary Public personally appeared Bradley D. Smith who proved to me on the basis of satisfactory evidence to be the personj^fwhose namej^a!^'is/ape subscribed to the within instrument and acknowledged to me that he/oho/thoy executed the same in his/her/their authorized capacity.(ies), and that by his/hef=/their signature.(8) on the instrument the person(8)7or the entity upon behalf of which the person(§)^cted, executed the instrument. 1 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. Signature (Seal) 34. INTERPRETATION OF AGREEMENT The terms of this Agreement shall be interpreted so as to avoid speculation on the Property and to insure to the extent possible that the mortgage payments remain affordable to low and moderate income households. 35. CONTROLLING LAW The terms of this Agreement shall be interpreted under the laws of the State of Califomia. 36. EXHIBITS Any exhibits referred to in this Agreement are incorporated in this Agreement by such reference. FN WITNESS WHEREOF, the parties have executed this Agreement on or as of the date first written above. OWNER: Print Name Ovmer Signature Print Name Owner Signature Date Date CITY OF CARLSBAD: By:. Name (Proper notarial acknowledgment of execution by Owner must be attached) 19 CA 6/22/2015 ACKNOWLEDGMENT A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. State of California County of San Diego On before me l^o^gen Fry, Notary Public I iDasis of satisfactory e (insert name and title of the officer) personally appeared who proved to me on the basis of satisfacf6ry evidence to be the persorf(s^ whose namefs^is/sH"© subscribed to the within instrument and acknowledged to me that-he/she/tbey-executed the same in ImsfherlVaevr authorized capacity(i©6), and that by bi8/her/tb9irsignature(s)'0n the instrument the personas), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature I MOROENFRY Commission # 2M1497 Notary Public-CaWornia z San Dieno County ^ MyComm Expires Dec 24.20181 (Seal) EXHIBIT A ADDRESS: 7011 Forsters Tern Drive, Carlsbad, CA 92011 ASSESSOR PARCEL NO,: 21 4-620-14-07 LEGAL DESCRIPTION OF PROPERTY A CONDOMINIUM COMPRISED OF: PARCEL 1: AN UNDIVIDED INTEREST IN THE COMMON AREA- 0380844 BOTH IN THE OmciAL RECORDI OF^AN mp^n^r^^'. l?-^ ^ INSTRUMENT NO. 7nn^-BE AMENDED, MODIFIED SOR RE°RE^^^ CALIFORNIA, AS SAME MAY , i^uiricu, ANU/OR RE-RECORDED FROM TIME TO TIME ("CONDOMINIUM PLAN"). PARCEL 2: THE CONDOMINIUM UNFT: PARCEL 3: NONEXCLUSIVE EASEMENTS OVER ASSOCIATION PROPERTY- PARCEL 4: EASEMENTS FOR EXCLUSIVE USE ASSOCIATION PROPERTY: DESCRIBED AND/OR DEPICT^ IN THE DEcKlJS^^ ANNEXATION, AND/OR THE CONDOMINIUM PUN (''EXCLJsiVE US^XQ^^^^ E^^SI^f ' ^' '^'^^ COLLECTIVELY REFERRED TO AS THE "CONDOMINIUM ASSESSOR'S PARCEL NUMBER: 214-620-14-07 EXHIBIT B FORM OF OWNER OCCUPANCY CERTIFICATION To: City of Carlsbad ("City") From: [name of owner(s)] ("Owner(s)") Address of Property: ("Property") Date: By signature below, I [insert name or names of Owner(s) ] hereby certify to the Cify under penaify of perjury that I/we occupy the home located at [insert address] ("Property") as my/our principal place of residence and that I/we have occupied the Properfy for ( ) [insert number] months ofthe calendar year [insert previous calendar year]. Attached to this letter is a copy of [insert utility bill or driver's license] showing my place of residence. This Owner Occupancy Certification is signed on , 20 , under penaify of perjury. By: Owner signature Date: By: Owner signature Date: Due Date: of each calendar year. Attach copy of utility bill or driver's license showing address of Home. CA 5/12/2011 EXHIBIT C FORM OF OWNER'S NOTICE OF INTENT TO TRANSFER To: City of Carlsbad ("Cify") From: [name of owner(s)] ("Owner(s)") Address of Properfy: ("Properfy") Date: Please be notified pursuant to Section 8 of the Resale Restriction Agreement and Option to Purchase between Owner and Cify dated , that the Owner intends to transfer the Properfy listed above. A. The following information is provided to the Cify pursuant to Section 8 of the Resale Agreement: 1. Address of Properfy: 2. Date Owner purchased Property: 3. Original Affordable Purchase Price: 4. Original amount of Homebuyer Loan: 5. Full Purchase Price: 6. Date Owner intends to vacate Properfy: 7.. Date Property will be placed on market: 8. Name and phone number of person for City to contact to schedule inspection: and (name) (phone number) B. As required by Section 8 of the Resale Agreement, the following the HUD-1 Settlement Statement from Owner's purchase of the property is attached. C. I have not yet listed the Property for sale with a multiple listing service, or contacted a real estate broker or financial institution. I agree to prepare tlie Property for sale by: 1. obtaining a pest control report within thirty (30) days of the date ofthis notice, C-2 CA 6/22/2015 2. repairing all damage noted in the pest report within the sooner ofi (i) sixty (60) days from the date of this notice, or (ii) two (2) weeks prior to close of escrow or the transfer of the Property, 3. allowing the City or its designee to inspect the Property within thirty (30) days of this notice, 4. maintaining utility connections until the Property is transferred, 5. permitting a walk through by the City prior to close of escrow or the transfer. This Owner's Notice of Intent to Transfer is certified by Owner to be true and correct and is signed on the date(s) below under penalty of perjury. By:. Owner signature Date: By:_ Owner signature Date: C-2 CA 6/22/2015 EXHIBIT D FORM OF CITY RESPONSE NOTICE To: ("Owner(s)") From: City of Carlsbad ("City") Address of Property: ("Property") Date: Thank you for delivering the Notice of Intent to Transfer. This letter is the City Response Notice described in Section 10 of the Resale Agreement that was recorded against title to your home. The City: City will check this Sentence #1 and complete other information listed in #1 ifthe City intends to exercise its option to purchase the Property or assign its option to the Property to a Designated Purchaser at any point during the entire Term of Resale Agreement A. Affordable Sales Price: $ B. Amount owed on Homebuyer Loan: $ C. Full Sales Price (add numbers in 1(A) and 1(B)): $_ D. Fair Market Value (as estimated by the City): $ The Price for which you may sell your Property (or the Maximum Restricted Resale Price) (the greater of 1(C) and 1(D)): $ In connection with the City's Option, you will owe a $ to City. Ifthe City has assigned its option, the name of Designated Purchaser is The City or its Designated Purchaser will follow up with you to complete the sale of your Property. If a Designated Purchaser purchases your Property, that Designated purchaser may CA 6/22/2015 assume the amount you owe on the Homebuyer Loan. If the City purchases your Property the amount you owe on the Homebuyer Loan shall credited against the purchase price e paid by the City. City will check this Sentence #2 and complete other information listed in #2 if the City intends for Owner to sell the Property to an Eligible Purchase during years 1-15 ofthe Resale Agreement. A. Affordable Sales Price: $ B. Amount owed on Homebuyer Loan: $ C. Full Sales Price (add numbers in 1(A) and 1(B)): $_ D. Fair Market Value (as estimated by the City): $ The total price for which you may sell your Property (or the Maximum Restricted Resale Price) (the greater of 1(C) and 1(D)): $ As noted in 2(B) above, the amount owed on the Homebuyer Loan is $ . An Eligible Purchaser is likely to assume the City Note and will then agree to repay the amount of the Homebuyer Loan. You must market your Property to an "Eligible Purchaser" as required by Section 15 of the Resale Agreement. The Maximum Qualifying Income of Eligible Purchaser is: Low Income Household 1 person household $ 2 person household $ 3 person household $ 4 person household $ 5 person household $ 6 person household $ Moderate Income Household 1 person household $_ CA 6/22/2015 2 person household $_ 3 person household $_ 4 person household $_ 5 person household $_ 6 person household $ When you locate a proposed purchaser of your Property, you must provide the Cify with the information listed in Section 15(B) of the Resale Agreement and 15(D)(1) through (4). Upon sale of your Properfy to a proposed purchaser who has been approved by the Cify as an Eligible Purchaser, you must provide the information required by Section 15(D)(5) through (7). 3. The Cify will check this Sentence #3 if it does not wish to exercise or assign its option to purchase the Properfy between the 16* year of the Resale Agreement and the end of the Term. At this point you may proceed to sell your Properfy to a third parfy for a market price. Upon sale of the Property, you must provide the Cify with the information required by Section 17 of the Resale Agreement. You also you must repay $ to the Cify as required by the Cify Promissory Note. Cify: Name: Tifie: _ Date: Designated Purchaser (if applicable): Name: Name: Date: Date: All questions regarding this notice should be directed to CA 6/22/2015 EXHIBIT E FORM OF OWNER ACKNOWLEDGEMENT OF CITY RESPONSE NOTICE Name: Address of Property: I (We), [insert name(s)] hereby acknowledge that I (We) received the Cify Response Notice (as described in Section 10 of the Resale Agreement on [insert date(s)]. By: Owner signature Date : By:. Owner signature Date: E-l CA 6/22/2015 EXHIBIT F FORM OF OWNER REQUEST FOR CITY SUBORDINATION TO REFINANCED FIRST LENDER LOAN To: City of Carlsbad ("Cify") From: ("Owner(s)") Properfy Address: ("Properfy") The Owner hereby requests the Cify to approve the Owner's refinance of the existing first mortgage on the Properfy. The Owner provides the following information which it certifies to be true and correct: 1. Original Affordable Purchase Price of Property: $ 2. Original Homebuyer Loan Amount 3. Full Purchase Price of Properfy (1 plus 2) $ 3. Original principal balance of existing First Lender Loan: $ 4. Interest rate of existing First Lender Loan: $ 5. Outstanding principal balance of existing First Lender Loan: $ 6. Monthly payments due on existing First Lender Loan $_ 7. Principal amount of proposed new First Lender Loan: $_ 8. Interest rate of Proposed new First Lender Loan: $_ 9. Monthly payments to be due on new First Lender Loan: $ The Owner hereby certifies the above information is true and correct and this Owner(s) Request is executed under penaify of perjury on the date(s) below. By:. Owner signature Date By: Owner signature Date C A 6/22/2015