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HomeMy WebLinkAboutItem 4.06 Revise Resale Restr Agmt (c~TY (ClERK fIle # Drn[]~c~[Q] AGIE~IDJA 5l1AlIEMIEU\Ill CllY COUNCIL MlElEl~NG DAllE December 18,2007 SUBJECT Proposed ReVISIons to Resale Restnctton Agreement for Incluslonary Housmg Umts Report prepared by John Lucero Housmg Specwhst and Sabrzna Wolfson Deputy Czty Attorney A 1'1' ACHMENTS I) Resolutton approvmg the ReVIsed Resale Restnctton Agreement and authonzmg the CIty Manager to make non-matenal changes to the Resale RestrictIOn Agreement 2) EXlstmg Resale Agreement (marked to show proposed revISIons) RECOMMENDATiON ~1) rJ/' 2) ~ 3) ReceIve Staff Report, DelIberate, and Adopt the ResolutIon approvmg the revIsed Resale Restnctton Agreement and authonzmg the City Manager to make non- materIal changes to the Resale RestrIction Agreement IF'JNANCHAlL STATEMENT None DESCRlIJPTHlN As a mechamsm to ensure the long-term affordabIhty of mcluslOnary for-sale umts, the CIty reqUIres purchasers of for-sale mc1uslOnary umts to execute a Resale RestrIctton Agreement and OptIon to Purchase CResale RestnctIOn Agreement"), WhICh IS recorded agamst the mc1uslOnary umt The current fonn, Resale RestnctIOll Agreement was approved by the CIty CouncIl on Apnl 18, 2006 The Resale Restnctton Agreement reqUIres the mc1uslOnary umt to remam affordable to very low, low, and moderate- mcome households for a perIod of 55 years In addItIon, the Agreement grants the CIty an optIOn to purchase ("OptIon") the mcluslOnary umt at a restncted pnce upon the occurrence of certam speCified events, mcludmg a default by the owner on the loan Wells Fargo IS a preferred lender for several of Dublm's development commumttes that are bUIldmg the CIty'S mclusIOnary umts Wells Fargo recently mfonned Staff that Wells Fargo would no longer be able to provide purchase money loans to purchasers of the City's mc1uslOnary umts unless the CIty reVIses ItS Resale RestnctIon Agreement to comply With the Federal Home Loan Mortgage CorporatIOn's ("Freddie Mac") and the Federal NatIOnal Mortgage ASSOCiatIOn's ("Fanrue Mae") recently revised gUIdelInes ---------_____~~______M~_____________________________________w_______________________________________________ COpy TO Page 1 of2 K \Agenda <;latemmts\2007\CC\Revl~ed Resale Restriction Agreement\Revlslons 10 RRA DOC H1I'lEM NO ~ J.i FannIe Mae and FreddIe Mac are government chartered prIvate corporatIons that purchase mortgages on the secondary market from banks and other financlallllstltutIOns Tflenders can sell mortgages to Fflnme Mae and FreddIe Mac, borrowers can receive more favorable terms than they would otherwIse receIve m the mortgage marketplace Thus, complymg WIth FannIe Mae's and FreddIe Mac's reqUIrements IS beneficIal to the Indus 10 nary Housmg Program because It makes It more lIkely that affordable home loan products WIll be aVailable to purehasers of mclusIonary umts Under FannIe Mae's and FreddIe Mac's revised gUIdelInes, If the CIty desires to exerCIse Its optIOn to purchase an mclusIonary umt followmg an owner's default on the loan, the CIty must complete the purchase wIthm 90 days after receIvmg nottce of such default The current fonn, Resale RestnctIOn Agreement, does not contaIn thIS 90-day lImItatIon As a result, Staff recommends that the CIty CouncIl approve Staff's proposed reVISIOns to the Resale RestnctIOn Agreement so that Wells Fargo (and other lenders that WIsh to resell mortgages to FannIe Mae and Freddie Mac) can contmue to provIde home loan products to purchasers ofthe CIty'S mclusIonary umts Staff IS currently m the process ofprepanng reVlSlons to the CIty'S Incluslonary Zomng OrdInance and the Layperson's GUIde to the Inc1usIOnary Zomng Ordmance Those reVISIOns WIll be brought before the City CouncIl for approval early next year It IS antIcIpated that addItIonal reVlSlons to the form Resale RestnctIOn Agreement to Implement those proposed reVISIOns WIll be necessary Staff recommends that the CIty Manager be authonzed to make non-matenal changes to the Resale RestrIction Agreement ThIS Will allow Staff to respond to polIcy changes m the mortgage market over tIme RECOMMENDATION Staff recommends that the CIty CounCIl I) ReceIve Staff Report, 2) DelIberate, and 3) Adopt the ResolutIOn approvmg the reVIsed Resale RestnctIOn Agreement and authonzmg the City Manager to make non-matenal changes to the Resale RestnctIOn Agreement Page 2 of2 K \Agenda Stalcmcnts\2007lCCIRevlsed Resale Restriction Agrct.mcnl\Revlslons to RRA DOC lofSI RESOILU1'iON NO XX - 07 A RESOl.UTiON OF THE CiTY COUNCIL OF THE CiTY OF DUBJUN ************************************ !RESOl.UTiON OF THE CiTY COUNCil. OF THE CiTY OF DUBLiN APP!ROViNG REViSiONS TO THE FORM !RESALE REST!RiCfION AGREEMENT AND OPTiON TO PURCHASE WHEREAS, the CIty of DublIn's ("CIty") IncluslOnary 20nmg Ordmance (Dublm MumcIpal Code, Chapter 8 68) ("120") reqUlres developers to construct mclusIOnary umts affordable to very low-, low- and moderate-mcome households and reqUlres purchasers of mclusIOnary umts to execute and record a form Resale RestnctIOn Agreement WIth OptIOn to Purehase ("Resale Restnctton Agreement") , and WHEREAS, the City CouncIl approved the current form Resale Restnchon Agreement by resolutton on Apn118, 2006, and WHEREAS, Staff has proposed certam reVlSlons to the Resale RestrIction Agreement attached hereto as ExlubIt A m order to make the Agreement consIstent WIth the Federal Home Loan Mortgage CorporatIOn's ("FreddIe Mac") and the Federal NatlOnaI Mortgage ASSOCIatIon's ("FannIe Mae") recently reVIsed gUldelmes so that affordable home loan products will contmue to be aVaIlable to purchasers of mcluslOnary umts NOW, THEREFORE, the City CouncIl of the CIty of DublIn does hereby approve the reVised Resale RestnetIOn Agreemcnt substantIally III the form attached hereto as Exhibit A and authonzes the City Manager to make non-matenal changes to the same PASSED, APPROVED AND ADOPTED thiS 18th day of December, 2007, by the followmg vote AYES NOES ABSENT ABSTAIN Mayor ATTEST City Clerk K \Agenda SkllernentsI2007\CC. \Revlsed Resale RestrictIOn AgreerncntlRRA RevlslUn Reso 12 18 07 doc -:r-teM.#-l..f b n1J~(g7 ~ ATTACHMENT] CJ ~~51 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO CITY OF DUBLIN, 100 CIVIC Plaza Dublin, CaliFornia 94568 Attn City Clerk To be recorded Without fee (Gov Code, ~~ 6103 and 27383 ) (Space Above This Line Far Recorder's Use Only) RESALE RESTRICTION AGREEMENT AND OPTION TO PURCHASE Owner Property Address Dublin, California Name of Development This RESALE RESTRICTION AGREEMENT AND OPTION TO PURCHASE ( Agreement) IS entered Into by and between the CITY OF DUBLIN, a California municIpal corporatIon (the City) and ("Owner") regarding certain Improved real property which IS more particularly desCribed In ExhIbit A attached hereto and Incorporated herein and commonly known as , Dublin, CA, (the "Property) effective as of , 20 ( Effective Date") City and Owner are heremafter collectively referred to as the Parties RECITALS A The City has Incluslonary Zoning Regulations (Dublin MUnicipal Code Chapter 868) (the "RegulatIons") that require developers of rental and ownership housing to construct wlthm their projects units that are affordable to very low-, low-, and moderate- Income households ("the Program") To further ItS goal of creatmg affordable home ownership opportunities for very low- low- and moderate-mcome persons and families the City has Initiated a program for the sale of some homes at a price below their market rate ("Program") Pursuant to the Program developers of housmg developments agree to set aSide a certain number of units for purchase or rent, as applicable by very low-, low-, and moderate-tncome persons and families, as defined herein B Owner IS an eligible [very [ow-, low- or moderate-]mcome purchaser under the Program Intends to live In the Property as an owner occupant, and agrees to malntam the Property as Owner's principal residence 1030393 -1- Proposed RevIsions 11/14/07 lExllnibnt A 3~51 C In order to maintain and preserve the Property as housing affordable to eligible [very low-, low-, or moderate-]Income purchasers, It IS necessary to restrict the use and resale of the Property through ImposItIon of the occupancy and resale restrictions set forth herein These restrictions are Intended to prevent initial and subsequent purchasers from USing the Property for purposes Incompatible with the Program and realizing unwarranted gains from sales of the Property at unrestricted prices The terms and conditions of thiS Agreement are Intended to provide the necessary occupancy and resale restrictions to ensure that the Property IS used, maintained, and preserved as housmg affordable to eligible [very low-, low-, or moderate-]Income purchasers To further serve the purposes of the Program, It IS necessary that the City be granted an option to purchase the property so that the property may be resold by the City to an eligible household D The Property constitutes a valuable community resource by providing decent, safe and sanitary housing to persons and families of [very low, low or moderate] Income who otherwise would be unable to afford such housing To protect and preserve thiS resource It IS necessary proper and In the public Interest for the City to administer occupancy and resale controls consistent with the Program and the Regulations by means of thiS Agreement AGREEMENT NOW THEREFORE In consideration of the substantial economic benefits Inuring to Owner and the public purposes to be achieved under the Program Owner and City hereby agree as follows 1 Definitions a Affordable Unit Cost shall be as defined In the Regulations as follows "Owner-occupied units are deemed affordable Units If the sales price results In annual housing expenses that do not exceed 35% of Income level for very-Iow-, low- and moderate-Income households, adjusted for household size and as defined below For very low-Income owner occupied units, the unit shall be deemed an affordable umt If the sales prrce results In annual housing expenses that do not exceed 35% of the maximum In the very low-Income level, adjusted for household size and as defined below' b "Area [Very Low, Low, or Moderate] Income for Alameda County means those Income and elIgibility levels determined updated, and published each year by the California Department of Housing and CommunIty Development, based on Alameda County median Income levels, adjusted for household sIze c "Persons and families of [very low, low, or moderate} Income means persons and famIlies whose Income does not exceed [fifty percent (50%), eighty percent (80%), or one hundred twenty percent (120%)] of the Area Median Income for Alameda County, as adjusted for household size 1030393 -2- Proposed RevIsions 11/14/07 41-61 d Persons and families meeting the definition set forth 10 Paragraph 1 b above shall be referred to as Eligible Households 2 Program Requirements a Affordablhty Restrictions Owner hereby covenants and agrees that dUring the term of this Agreement all of the requirements and restrictIons of this Agreement shall apply and the Property shall be sold or otherwise transferred only pursuant to the terms and conditions of this Agreement and only to (I) Eligible Households at a price not to exceed the Adjusted Resale Price, as defmed 10 Paragraph 5 (II) the City pursuant to Paragraph 3, at a price not to exceed the Adjusted Resale Price as defmed In Paragraph 5, or (III) a permitted transferee pursuant to Paragraph 9 ..." b Disclosure DURING THE TERM OF THIS AGREEMENT THERE SHALL BE NO SALE OR OTHER TRANSFER OF THE PROPERTY WITHOUT THE WRITTEN CERTIFICATION BY THE CITY THAT THE TRANSFEREE QUALIFIES AS AN ELIGIBLE HOUSEHOLD AND THAT THE PROPERTY IS BEING TRANSFERRED AT A PRICE NOT TO EXCEED THE ADJUSTED RESALE PRICE, WHICH IS CAPPED AT THE AFFORDABLE UNIT COST AS DEFINED IN PARAGRAPH 1 a ANY SALE OR OTHER TRANSFER OF THE PROPERTY IN VIOLATION OF THIS COVENANT SHALL BE VOIDABLE BY THE CITY c Principal ReSidence Requirement OWNER COVENANTS AND AGREES THAT HE/SHEITHEY SHALL OCCUPY THE PROPERTY AS HIS/HERffHEIR PRINCIPAL RESIDENCE FOR THE DURATION OF HIS/HERffHEIR OWNERSHIP AND SHALL NOT RENT OR LEASE THE PROPERTY OR PORTION THEREOF DURING THE TERM OF THIS AGREEMENT WITHOUT PRIOR WRITTEN APPROVAL OF CITY Without limiting the generality of the foregomg, any absence from the Property by Owner for a period of ninety (90) or more days shall be deemed an abandonment of the Property as the principal reSIdence of Owner In violation of the conditions of thiS Paragraph Upon request by the City made from time to time, the Owner of the Property shall submit an affidavit to the City certifying that the Property IS the Owner s principal reSidence and proVide such documents and other eVIdence as may be requested to venfy Owner s compliance with thiS requirement Abandonment of the Property shall constitute an OptIon Event (as defined In Paragraph 3 c below) and shall entItle the City to exercise ItS Option to purchase the Property 3 Option to Purchase a Grant of Option to Purchase Owner hereby grants to the CIty an option ("Optlon") to purchase all of Owner's nght, title and Interest In and to the Property upon the occurrence of an OptIon Event (defined In Paragraph 3 c below), subject to the terms and conditions contained herein b Assignment of the Option The City may assign the Option to another government entity, a non-profit affordable housing proVider or a person or family that qualifies as an Eligible Household The City's assignment of the Option shall not extend any time limits contamed herein with respect to the exerCise penod of the Option or the penod within which the Property must be purchased 1030393 -3- Proposed RevIsions 11/14/07 515/ c Events Glvmg Rise to Right to Exercise Option The City shall have the nght to exerCise Its Option upon the occurrence of any of the following events (each, an Option Event") Receipt of a Notice of Intent to Transfer (defined In Paragraph 3 d I below), II Any actual, attempted or pending sale, conveyance, transfer, lease or other attempted disposition of the Property or of any estate or Interest therein, except as provided In Paragraph 10 below, III Any actual, attempted or pending encumbrance of the Property, including without limitation by way of mortgage or deed of trust, or by Judgment mechanics, tax or other lien except as provided In Paragraph 9 below, IV Recordation of a notice of default and/or notice of sale pursuant to Callforma CIvil Code section 2924 (or successor provIsions) under any deed of trust or mortgage with a power of sale encumbenng the Property, V Commencement of a Judicial foreclosure proceeding regarding the Property, VI Execution by Owner of any deed In lieu of foreclosure transferring ownership of the Property, VII Commencement of a proceeding or action In bankruptcy, whether voluntary or Involuntary, pursuant to Title 11 of the United States Code or other bankruptcy statute, or any other Insolvency, reorgamzatlon, arrangement, assignment for the benefit of creditors, receivership or trusteeship, concerning the Owner, or VIII Any violation by Owner of any provIsion of thiS Agreement Including without limitation, the conditions set forth In Paragraph 2 above d Method of Exerclsmg the Option I Notice of Intent to Transfer If Owner deSires to sell, convey, transfer (other than pursuant to Paragraph 9 below), lease, encumber (other than pursuant to Paragraph 10 below) or otherwise dispose of the Property or of any estate or Interest therein, no less than 45 days pnor to the date of such proposed sale, conveyance, transfer, lease encumbrance or diSPOSition, Owner shall notify City In writing to that effect (the "NotIce of Intent to Transfer) The Notice of Intent to Transfer shall be In substantially the form attached hereto as ExhIbIt B In the case of a proposed sale of the Property to an Identified prospective purchaser, the Owner shall submIt to the City, together with the Notice of Intent to Transfer, a copy of the prospective purchaser's Income certification, a list of all assets owned by the prospective purchaser, and other financial Information reasonably requested by City, In a form approved by the City, along With the Income certification to be provided to any lender making a loan to the prospective purchaser The City may require documentation eVidenCing and supporting the Income and other finanCial Information contained In the certifications 1030393 -4- Proposed ReVISions 11/14/07 ~a{61 II Notice of Exercise Upon the occurrence of any Option Event, the CIty may exercise Its Option by delivering notice, pursuant to Paragraph 17 and within the time period specified In Paragraph 3 d IV, to Owner of CIty s Intent to exercise such Option pursuant to the terms of this Agreement ("Notice of ExerCise") The Notice of ExerCise may be In the form attached hereto and Incorporated herein as Exhibit C, or In such other form as the City may from time to time adopt If the Option Event relates to the potential foreclosure of a mortgage under Paragraphs 3 c IV, 3 c v, or 3 c VI, then the City shall also deliver the Notice of ExerCise to the mortgagee or beneficiary under such mortgage at such mortgagee's or benefiCiary's address of record In the Office of the Recorder of Alameda County III Notice of Consent to Transfer If the City does not exercise the Option, It may give Its consent to the occurrence of the Option Event ("Consent to Transfer") If the Option Event Involves a proposed sale of the Property to a prospective purchaser, the CIty's consent shall be conditioned upon (I) the proposed purchaser s qualification as an Eligible Household, (II) the sale of the Property at a pnce not to exceed the Adjusted Resale Pnce (III) the proposed purchaser'S execution of a Disclosure Statement In the form attached hereto as Exhibit F or such other form or forms as may be promulgated by the City (IV) the proposed purchaser s assumption of Owner's duties and obligations under thiS Agreement pursuant to a wntten assumption agreement In a form acceptable to City or execution of an agreement substantially Similar to thiS Agreement, within thirty (30) days after the Consent to Transfer has been delivered to Owner and recordation of such assumption agreement or substitute agreement, and (v) the proposed purchaser'S execution of a Performance Deed of Trust In the form attached hereto as Exhibit G SELLER SHALL PAY REAL ESTATE COMMISSIONS, IF ANY, WHICH SHALL NOT TO EXCEED 6% OF THE ACTUAL SALES PRICE If the prospective purchaser (I) falls to qualify as an Eligible Household, (II) falls to execute and deliver the Disclosure Statement to the City, (III) falls to execute and deliver to the City an assumption agreement or an agreement substantIally Similar to thiS Agreement Within such thirty (30) day penod, or (IV) falls to execute and deliver to the City a Performance Deed of Trust In the form attached hereto as Exhibit G then the Consent to Transfer shall expire and the City may, at ItS option, either notify Owner of the dlsquallflcatron thereby entitling Owner to locate another purchaser who qualifies as Eligible Household, or exercise the Option, as If no Consent to Transfer had been delivered IV Time Period for Notice The City shall deliver a Consent to Transfer, If applicable, not later than thirty (30) days after the date that It receives notificatIon of an Option Event The CIty shall deliver a NotIce of ExerCise, If applicable, on or before the date which IS the later to occur of the follOWing (I) thirty (30) days after the date that the CIty receives notification of an Option Event or (Il) fifteen (15) days after a Consent to Transfer has expired If the City delIvers a Notice of ExerCise to Owner upon occurrence of an Option Event descnbed In Paragraphs 3 c IV 3 c v, or 3 c VI, the City or ItS assIgnee shall close escrow for the purchase of the Property no later than 90 days after the date the City receives notification of such Option Event For purposes of computing commencement of the delivery periods, the City shall be deemed to have received notification of an Option Event on the date of delivery of a Notice of Intent to Transfer, pursuant to the terms of Paragraph 17 below or on the date It actually receives notice of default, summons and complaint or other pleading or other wntlng speCifically stating that an Option Event has occurred The City shall have no obligation to deliver a Notice of 1030393 -5- Proposed ReVISIons 11/14/07 '1151 Exercise or Consent to Transfer, and the applicable time period for exercise of the Option shall not commence to run, unless and until the City has received notlflcatlon of an Option Event In the manner specified In this subparagraph If there IS a stay or Injunction Imposed by court order precluding the CIty from delivering Its Consent to Transfer or Notice of Exercise within the apphcable time period, then the running of such period shall cease untIl such time as the stay IS lifted or the Injunction IS dissolved and the City has been given written notice thereof, at which time the period for delivery of a Consent to Transfer or Notice of Exercise shall again begm to run v Notice of Abandonment If the City falls to deliver a Notlce of Exercise or Consent to Transfer within the time periods set forth In Paragraph 3 d IV upon request by Owner, the City shall cause to be filed for recordation In the Office of the Recorder of Alameda County, a notice of abandonment, which shall declare that the provIsions of the Optlon are no longer appl1cable to the Property Unless Owner requests recordation of notice of abandonment within 30 days of the City's failure to deliver Notice of ExerCise or Consent to Transfer, the City shall have no obligation to record the notice of abandonment Upon recordation of a notice of abandonment, the Option shall terminate and have no further force and effect If the City falls to record a notice of abandonment, the sole remedy of Owner shall be to obtain a JudIcial order instructing prompt recordation of such a notice VI Right to Reinstatement If the Option Event IS the recordation of a notice of default, then the City shall be deemed to be Owner's successor In Interest under California CIvil Code Section 2924(c) (or successor sectton) solely for purposes of reinstatement of any mortgage on the Property that has led to the recordation of the notice of default As Owner s deemed successor In mterest, the City shall be entltled to pay all amounts of principal Interest taxes, assessments, homeowners' association fees, Insurance premiums advances, costs, attorneys fees and expenses reqUired to cure the default If the City exercises the Option then any and all amounts paid by the City pursuant to this Paragraph shall be treated as Adjustments to the Base Resale Pnce for the Property, as defined In Paragraph 5 below VII Inspection of Property After receiving a Notice of Intent to transfer or delivering a Notice of Exercise, the City shall be entitled to Inspect the Property one or more times prior to the close of escrow to determine the amount of any Adjustments to the Base Resale Price Before Inspecting the Property, the City shall give Owner not less than forty-eight (48) hours written notice of the date, time and expected duration of the inspection The inspection shall be conducted between the hours of 900 a m and 500 pm, Monday through Friday, excluding court holidays, unless the parties mutually agree In wntmg to another date and time Owner shall make the Property available for Inspection on the date and at the time speCified In the City's request for inspection VIII Escrow Promptly after delivering a Notice of ExerCise the City shall open an escrow account for Its purchase of the Property Close of escrow shall take place on such date whIch IS the later to occur of the following (a) sixty (60) days after a Notice of ExerCise has been delivered, or (b) ten (10) days after Owner has performed all acts and executed all documents required for close of escrow, provided however, If the City exercises the Option upon the occurrence of an OptIon Event deSCribed In Paragraphs 3 c IV, 3 c v, or 3 c VI, close of escrow shall take place no later than 90 days after the date 1030393 -6- Proposed ReVISion S 11/14/07 9~51 the City receives notification of such Option Event Prior to the close of escrow the City shall deposit Into escrow with a title company of City s chOOSing the Adjusted Resale Price as defined In Paragraph 5 below and all escrow fees and closing costs to be paid by City Commissions (not to exceed 6% of the actual sales pnce), clOSing costs and tItle Insurance shall be paid pursuant to the custom and practice In the County of Alameda at the time of the opening of escrow or as may otherwise be provided by mutual agreement Owner agrees to perform all acts and execute all documents reasonably necessary to effectuate the close of escrow and transfer of the Property to the City IX Proceeds of Escrow, Removal of Exceptions to Title Prior to close of escrow Owner shall cause the removal of all exceptions to title to the Property that were recorded after the Effective Date With the exception of (I) taxes for the fiscal year In which the escrow for thiS transaction closes, which taxes shall be prorated as between Owner and CIty as of the date of close of escrow (II) quaSI-public utility, public alley, public street easements, and rights of way of record, and (III) such other liens encumbrances reservations and restrictIons as may be approved In writing by City ("Permitted Exceptions") The purchase price depOSited Into escrow by the City shall be applied first to the payment of any and all Permitted Encumbrances (as defined In Paragraph 10) recorded against the Property In order of hen prlonty, and thereafter to the payment of Owner's share of escrow fees and clOSing costs Any amounts remaining after the purchase price has been so applied, If any, shall be paid to Owner upon the close of escrow If the purchase price IS Insufficient to satisfy all hens and encumbrances recorded against the Property, the Owner shall depOSit Into escrow such additional sums as may be required to remove said liens and encumbrances In the event that the City agrees to proceed With close of escrow prior to the date that Owner has caused all exceptions to title recorded after the Effective Date other than Permitted Exceptions to be removed, then Owner shall Indemnify, defend and hold City harmless from any and all costs expenses or liabilities (Including attorneys' fees) Incurred or suffered by City that relate to such exceptions and their removal as exceptions to tItle to the Property 4 Base Resale Price Prior to adjustment pursuant to Paragraph 5 the base resale price ("Base Resale Price") of the Property shall be the lowest of a Median Income The original price ("Base Price") paid by Owner for acquIsition of the Property pursuant to the Program Increased (but not decreased) by an amount, If any equal to the Base Price multiplied by the percentage Increase In the median household Income ("MedIan Income") for Alameda County published by the CalIfornia Department of HOUSing and Community Development, DIVISIon of HOUSing PoliCY Development, between the Effective Date and the date that the City receives notification of an Option Event, or b Fair Market Value The fair market value of the Property as determined by an appraiser selected and paid for by Owner and approved In writing by the City To compute the Base Resale Price, the City may use the Base Resale Price Worksheet attached as Exhibit D hereto, or such other form as the City may from time to time adopt 1030393 -7- Proposed ReVISions 11/14107 q oJ: EI 5 Adjustments to Base Resale Pnce Subject to the Affordable Unit Cost restriction described In subparagraph (d) below, the Base Resale Price shall be Increased or decreased as applIcable, by the following adjustment factors ("Adjustment") a Capital Improvements An Increase for capital Improvements made to the Property, but only If the amount of such Improvements has been previously approved In wntlng by the City after Owner has submitted original written documentation of the cost to the City for verification The amount of the Adjustment shall equal the onglnal cost of any such capital Improvements b Damages A decrease by the amount necessary to repair damage to the Property, If any, and to place the Property Into saleable condition as reasonably determined by the CIty upon CIty's exercise of Its Option hereunder Including Without limitation, amounts attributed to cleaning, painting, replaCing worn carpeting and draperies, making necessary structural, mechanical, electrical and plumbing repairs, and repalnng or replaCing bUilt-In appliances and fixtures Owner hereby covenants to, at Owner s expense, mamtaln the Property In the same condition as In eXistence on the date of CIty s Notice of ExerCise, reasonable wear and tear excepted c Advances by the City A decrease In an amount equal to the sum of all costs advanced by the CIty for the payment of mortgages, taxes, assessments, Insurance premiums, homeowner's assoclatlon fees and/or associated late fees, costs, penalties, Interest, attorneys' fees pest Inspections, resale Inspections and other expenses related to the Property, whIch Owner has failed to payor has permitted to become delinquent d Adjusted Resale Pnce Not to Exceed Affordable Unit Cost The Base Resale Price as adjusted, IS hereinafter referred to as the Adjusted Resale Price" Notwithstanding any other provIsion hereof to the contrary, In no event shall the Adjusted Resale Pnce exceed the Affordable Unit Cost 6 Pnontyand Effectiveness of the Option a Recordation This Agreement shall be recorded In the Office of the Recorder of the County of Alameda on or as soon as practicable after the Effective Date The' Option shall have pnorlty over any subsequent sale conveyance, transfer lease or other diSposition or encumbrance of the Property, or of any estate or Interest therein, and In the event of exercise of the Option by CIty, the City shall take the Property subject only to Permitted Exceptions Except as otherwise proVided In Paragraph 7 a, the exercIse of the Option by the City at any time and from time to time shall not extinguish the Option or cause a merger of the Option Into any estate or other Interest In the Property, and the Option shall continue to eXist and be effective With respect to the Property against any and all subsequent owners In accordance With the terms and conditions hereof b Request for Notice of Default The City shall file a Request for Notice of Default for recordation In the Office of the Recorder of the County of Alameda promptly upon execution of thiS Agreement (see Exhibit E) c Subordmatlon The City agrees that In order to assIst qualified purchasers to secure purchase money finanCing for the acquIsition of the Property the City 1030393 -8- Proposed ReVISIons 11/14/07 10 or- 5/ will enter Into a subordination agreement with a senior purchase money lender to subordinate this Agreement under such terms as the City and the senior purchase money lender shall negotiate 7 Survival of Option Upon Transfer a In General The City's right to exercise the Option shall survive any transfer of the Property by Owner Each transferee aSSignee or purchaser of the Property dUring the term hereof shall be required to execute an agreement substantially In the form of thiS Agreement, provided that the term of any such agreement shall be for the duration of the term hereof as of the date of any such transfer, assignment or sale The Option may be exercised against the Property throughout the term hereof, regardless of whether the Property IS owned, possessed or occupied by Owner or any successor, transferee, assignee, heir, executor, or administrator of Owner, regardless of household Income (If applicable) including a debtor-In-possesslon, debtor or trustee pursuant to Title 11 of the Unrted States Code Notwithstanding the foregoing, the Option shall not survive (I) the sale and transfer of the Property to a third party purchaser pursuant to a JudiCial or non-Judicial foreclosure or a deed-In-Ileu of foreclosure under a power of sale contained In a mortgage or deed of trust held by an institutional lender, or (II) the recording of an Instrument conveYing Owner's Interest In the Property to the City or Its assignee, provided the conveyance IS In accordance With the terms of thiS Agreement b HUD Insured Mortgage If Owner has acquired the Property by a mortgage Insured by the Secretary of the Unrted States Department of HOUSing and Urban Development, and a notice of default has been recorded pursuant to California CIvil Code Section 2924 (or successor proVIsions) then thiS Option shall automatically terminate If title to the Property IS transferred by foreclosure or deed-In~heu of foreclosure, or If the msured mortgage IS assigned to the Secretary 8 VOidable Transfers As long as the Option has not been abandoned pursuant to Paragraph 3 d v, any actual or attempted sale, conveyance transfer or other dispOSition of the Property, or of any estate or Interest therein In Violation of the terms and conditions of thiS Agreement, shall be VOidable at the election of the City 9 Permitted Transfers Provided that the transferee assumes, Within 30 days of a written request by the City, all of Owner's duties and obligations under thiS Agreement pursuant to a written assumption agreement In a form acceptable to City or at City's election execution of an agreement substantially similar to thiS Agreement, the followmg transfers ( Permitted Transfers") of title to the Property, or of any estate or mterest therein, shall not be subject to the City'S prior approval, shall not trigger the exerCise of the Option, and shall not be considered Option Events (a) a good-faith transfer by gift deVise or Inheritance to Owner's spouse or Issue, (b) a taking of title by a surviVing JOint tenant (c) a court-ordered transfer of title to a spouse as part of a divorce or dissolution proceeding, (d) a transfer by Owner Into an Inter VIVOS trust In which the Owner IS a beneficiary and the Owner continues to occupy the property as his/her primary residence, (e) an acquIsition of title, or of any Interest therein, In conjunction With marriage or (f) any good faith transfer to an EligIble Household Notwithstanding any Permitted Transfer, the Option shall remain effective With respect to the Property for the duration of the term hereof 1030393 -9- Proposed ReVISions 11/14/07 /1 ~!?I 10 Permitted Encumbrances This Option shall not become exercisable as the result of Owner's encumbering the Property (a) for the purpose of securing financing to purchase the Property pursuant to the Program, (b) to refinance Indebtedness Incurred to purchase the Property pursuant to the Program, provided that prior to refinancing the Property Owner shall obtain City's approval of the refinancing pursuant to sechon 11 below which shall not be unreasonably Withheld, or (c) to make necessary repairs to the Property In an amount approved by City pursuant to Paragraph 5a ("Permitted Encumbrances") The maximum aggregate amount of such encumbrances outstanding at any time (the "Permitted Encumbrance Amount") shall not exceed an amount equal to one-hundred percent (100%) of the Base Resale Price calculated as provided In Paragraph 4 The Permitted Encumbrance Amount shall be calculated as If the City had received notifIcation of an Option Event on the earlier of (a) the date on which the deed of trust or mortgage securing the Indebtedness IS flIed for record In the Office of the Recorder of the County of Alameda or (b) the date the City receives Notice of Intent to Transfer pursuant to Paragraph 3 d I above Owner hereby covenants and agrees that he/she/they shall use his/her/their best efforts to ensure that any deed of trust or other agreement encumbering the property shall Include provIsions providing for notice to be delivered to City of any default thereunder and for City's right to cure such default at City selection 11 Reflnancmg, JUnior Loans a Imtlal Fmancmg Any prepayment and refinance of any financing used to purchase the Property ("the Initial Financing") shall not be permitted unless expressly approved by the City In Writing, and the City may approve such refinanCing only If all of the follOWing condltlons are met I the refinance reduces Owner's monthly payments of principal and Interest on the Imtlal FinanCing or shall be used to finance capital Improvements preapproved by the City ( Eligible Capital Improvements"), 11 the refinance does not cause the principal amount of all debt secured by the Property to exceed the then outstanding balance (plus refinanCing and clOSing costs) of the Initial Improvements plus the cost of any Eligible Capital Improvements that shall be made by Owner, III the refinance does not result In Owner receiving any cash from the refinance other than for Eligible Capital Improvements permitted pursuant to Paragraphs 11 a I and 11 a II, IV the refinance does not cause the Property's loan to value ratio (calculated by comparing the total debt secured by the Property to the Adjusted Resale Price of the Home) to exceed the loan to value ratio for the Property at the time of Initial purchase by the Owner (calculated by comparing the total debt secured by the Property to the Purchase Price paid by the Owner) v the total outstanding balance of principal and any accrued Interest on all loans secured by the Property does not exceed the Adjusted Resale Price, calculated by the CIty pursuant to Paragraph 5 of thiS Agreement 1030393 -10- Proposed ReVISions 11/14/07 102 ~ 6"1 b JUnior Loans Mortgage loans or equIty lines of credit Junior In hen priority to the Performance Deed of Trust are not permitted except as when expressly approved by the City In writing The City shall only approve Junior mortgage loans or equity hnes of credit as follows I the loan or equity line of credit does not does not cause the Property's loan to value ratio (calculated by comparing the total debt secured by the Property to the Adjusted Resale Price of the Property) to exceed the loan to value ratio for the Property at the time of initial purchase by the Owner (calculated by comparing the total debt secured by the Property to the purchase paid by the Owner), II the proceeds of such loan or equity line of credit are used only for Eligible Capital Improvements and III the total outstanding balance of principal and any accrued Interest on all loans secured by the Property does not exceed the Adjusted Resale Price, calculated by the City pursuant to Paragraph 5 of thiS Agreement c Eligible CapItal Improvements In the event (I) the Owner refinances the [nltla[ Financing In accordance with Paragraph 11 a, or (II) the Owner borrows a Junior roan or takes an equity [lne of credit In accordance with Paragraph 11 b, and the funds from such refinance, roan, or [me of credit shall be used for E[lglble Caplta[ Improvements, Owner shall provide eVidence to City, In a form acceptable to City In ItS sore and absolute discretion, that any amount of funds received by Owner for such Eligible Caplta[ Improvements shall be and are used for the construction of such Eligible Caplta[ Improvements d Affordable Housing Cost, Subordmatlon The City and the Owner agree that the requirements of thiS Paragraph 11 are necessary to ensure the continued affordablhty of the Property to Owner and to mlnrmlze the risk of loss of the Property by Owner through default and foreclosure of mortgage loans Owner further acknowledges that violation of the provIsions of thiS Paragraph 11 shall constitute a Defau[t under thiS Agreement In no case shall thiS Agreement and the Performance Deed of Trust be In [ower than third lien position on the Property Any subordination agreement to be executed by City shall Include notice and cure rights for City regarding any defaults In the mortgage to whIch the City IS subordinating 12 Obligation of Owner After Option Abandonment If the City records a notice of abandonment of the Option then the Property may be sold by Owner to a third party wIthout restriction as to price, however, upon such safe, Owner shall pay to City an amount ("City's Share") equal to twenty-five percent (25%) of the dIfference between (a) the actual sales price net of reasonable and customary real estate commiSSions paid (such commiSSions not to exceed SIX percent (6%) of the actual sales price), and (b) the Adjusted Resale Price The City'S Share shall be paid to the City concurrently with close of escrow on the sale of the Property, or upon receipt by Owner of the sale price for the Property, whichever shall first occur 13 Limits on Liability In no event shall the City become [table or obligated In any manner to Owner by reason of the assignment of thiS Agreement or the Option, nor shall 1030393 -11- Proposed ReVISions 11/14/07 I.? ~ 5) City be m any way liable or obligated to Owner for any failure of the City's assignee to consummate a purchase of the Property or to comply with the terms of this Agreement or the Option, or any escrow mstructlons or agreement for the purchase of the Property 14 Insurance Proceeds and Condemnation Award In the event the Property IS destroyed and Insurance proceeds are distributed to Owner Instead of being used to rebuild the Property, or, In the event of condemnation If the proceeds thereof are distributed to Owner, any surplus of proceeds remaining after payment of the senior liens and, encumbrances on the Property shall be distributed as follows that portion of the surplus up to, but not to exceed, the net amount Owner would have received pursuant to Paragraph 3 d IX had the CIty exerCised Its Option on the date of the destruction of condemnation valuation date shall be distributed to Owner, and the balance of such surplus, If any, shall be distributed to the City 15 Effective Date The rights and obligations of the City and Owner set forth In thiS Agreement shall be effective as of the Effective Date 16 Term of Agreement and Option The restrictions contamed herem and the City's option to purchase the Property shall continue for a period of fifty-five (55) years commencmg on the Effective Date Notwlthstandmg anything to the contrary In the foregoing the Agreement shall remain In effect until the first transfer on or after the termination of the restrictions and option to purchase pursuant to thiS Paragraph Upon such sale, Owner shall pay to City an amount ( City s Share') equal to twenty-five percent (25%) of the difference between (a) the actual sales pnce net of reasonable and customary real estate commiSSions paid (such commiSSions not to exceed SIX percent (6%) of the actual sales price), and (b) the Adjusted Resale Price on the date of the termination of the restrictions and option to purchase pursuant to thiS Paragraph The City's Share shall be paid to the City concurrently with close of escrow on the sale of the Property or upon receipt by Owner of the sale price for the Property, whichever shall first occur Following completion of a sale In compliance with thiS provIsion, thiS Agreement shall terminate 17 Notices Except as otherwise specified In thiS Agreement all notices to be sent pursuant to thiS Agreement shall be made In Writing, and sent to the Parties at their respective addresses specified below or to such other address as a Party may deSignate by written notice delivered to the other Party In accordance with thiS Section All such notices shall be sent by a personal delivery, In which case notice shall be deemed delivered upon receipt, b certified or registered mall, return receipt requested, In which case notice shall be deemed delivered two (2) bUSiness days after depOSit, postage prepaid In the United States mall, c natlonally recognized overnight courier In which case notice shall be deemed delivered one (1) day after depOSit with such courier or 1030393 -12- Proposed ReVISions 11/14/07 )41 51 d facSimile transmission In which case notice shall be deemed delivered on transmittal, provIded that a transmission report IS generated reflecting the accurate transmiSSIon thereof City City of Dublin, 100 CIVIC Plaza Dublin, California 94568 Attn City Manager Owner At the address of the Property 18 Remedies Upon Breach a SpecIfic Performance Owner acknowledges that any breach In the performance of ItS obligations under this Agreement shall cause Irreparable harm to the City Owner agrees that the City IS entitled to eqUitable relief In the form of specific performance upon ItS exerCise of the Option, and that an award of damages shall not be adequate to compensate the City for Owner's failure to perform according to the terms of this Agreement b Other Remedies City shall have all of the remedies provided for at law or equity 19 General ProvIsions a Attorneys' Fees If either party Initiates legal proceedings to Interpret or enforce ItS nghts under this Agreement the prevailing party In such action shall be entitled to an award of reasonable attorneys fees and costs m additions to any other recovery to which It IS entitled under this Agreement b No Jomt Venture, No Third-Party Beneficiary No JOint venture or other partnership eXists or IS created between the Parties by virtue of this Agreement Except as expressly stated herem, this Agreement does not benefit any third party c Successors, Assignment This Agreement shall Inure to the benefit of and shall be binding upon the Parties to this Agreement and their respective heirs, executors, administrators, successors and assigns City shall have the nght to assign all of ItS nghts and obligations under this Agreement without the consent of Owner d Entire Agreement, Amendment This Agreement constitutes the entire agreement of the PartIes with respect to the subject matter hereof, and supersedes any and all other pnor negotiations, correspondence, understandings and agreements with respect thereto There are no representations, promises, agreements or other understandmgs between the Parties relatmg to the subject matter of this Agreement that are not expressed herein This Agreement may be modIfied only by an Instrument In wntlng executed by the Parties or their respecttve successors In Interest 1030393 -13- Proposed RevIsions 11/14/07 15 ~ 51 e Survival, No Merger All of the terms, provIsions, representations, warrantles and covenants of the Parties under thiS Agreement shall survive the close of escrow of any sale of the Property and shall not be merged In any deed transfernng the Property f Authority And Execution Each Party represents and warrants that It has full power and authority to enter Into thiS Agreement and to undertake all of Its obligations hereunder, that each person executing thiS Agreement on ItS behalf IS duly and validly authorized to do so g Severability The Invalidity or unenforceablltty of any term or provISion of thIS Agreement shall not Impair or affect the remainder of thiS Agreement, and the remaining terms and provIsions hereof shall not be Invalidated but shall remain In full force and effect h Waiver, Modification No waiver or modification of thiS Agreement or any covenant, condition, or limitation herein contained shall be valid unless In writing and duly executed by the Party to be charged therewith No eVidence or any waiver or modification shall be offered or received In eVidence In any proceeding, arbitration, or litigation between the Parties arising out of or affecting thiS Agreement or the rights or obligations of any Party hereunder, unless such waiver or modification IS In writing and duly executed as aforesaid The provIsions of thIS section may not be waived except as herein set forth A waiver or breach of any covenant, condition or provIsion of thiS Agreement shall not be deemed a waiver of any other covenant, condition or provIsion hereof I Construction The section headings and captions used In thiS Agreement are for convenience of reference only and shall not modify, define, limit or amplify any of the terms or provIsions hereof ThiS Agreement shall not be construed as If It had been prepared by one of the Parties, but rather as If both Parties have prepared It J Governing Law ThiS Agreement shall In all respects be governed by and construed In accordance with the laws of the State of California k Time of the Essence Time IS of the essence In thiS Agreement as to each provISion In which tIme IS an element of performance I Further Assurances Each Party Will, upon reasonable request of the other Party, execute acknowledge and deliver, or cause to be executed acknowledged, and delivered, such further Instruments and documents as may be reasonably necessary In order to fulfill the Intents and purposes of thIS Agreement m Counterparts ThiS Agreement may be executed In counterparts, each of which shall be deemed an onglnal, and all which together shall constItute one and the same Instrument [EXECUTION PAGE FOLLOWS] 1030393 -14- Proposed RevIsions 11/14/07 1~~51 IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed as of the date first wntten above OWNER(S) CITY CITY OF DUBLIN Richard Ambrose City Manager ATTEST City Clerk 1030393 -15- Proposed RevIsions 11/14/07 J7~ 5' STATE OF CALIFORNIA COUNTY OF ) ) ) On before me, In and for saId county and state, personally appeared , a Notary Public personally known to me (or proved to me on the basIs of satisfactory eVidence) to be the person(s) whose name(s) Is/are subscribed to the within Instrument and acknowledged to me that he/she/they executed the same In his/her/their authorized capaclty(les), and that by his/her/their slgnature(s) on the Instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the Instrument WITNESS my hand and officIal seal Signature (Seal) STATE OF CALIFORNIA COUNTY OF ) ) ) On before me, In and for said county and state, personally appeared , a Notary Public personally known to me (or proved to me on the basIs of satisfactory eVidence) to be the person(s) whose name(s) Is/are subscribed to the within Instrument and acknowledged to me that he/she/they executed the same In his/her/their authorized capacltY(les), and that by his/her/their slgnature(s) on the Instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the Instrument WITNESS my hand and official seal Signature (Seal) 790277 2 Form Revised April 18 2006 Ig%rl STATE OF CALIFORNIA ) ) ) COUNTY OF On before me, In and for said county and state, personally appeared , a Notary Public personally known to me (or proved to me on the baSIS of satisfactory eVidence) to be the person(s) whose name(s) Is/are subscribed to the within Instrument and acknowledged to me that he/she/they executed the same In his/her/their authorized capacltY(les), and that by his/her/their slgnature(s) on the Instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the Instrument WITNESS my hand and offiCial seal Signature (Seal) 790277 2 Form ReVised Apnl18 2006 rq ~ .6 ) CERTIFICATE OF ACCEPTANCE (Pursuant to Government Code 327281) This IS to certify that the rnterest In real property conveyed by the Resale Restriction Agreement and Option to Purchase dated from to the City of Dublin a Califorma munIcipal corporation IS hereby accepted by the undersigned office or agent on behalf of the City of Dublin pursuant to authOrity conferred by the Resolution No dated , and the grantee consents to recordation thereof by ItS duly authOrized officer Dated By Its Attest CIty Clerk 790277 2 Form Revised April 18 2006 o? D ~ 5J EXHIBIT A LEGAL DESCRIPTION 790277 2 Form Revised April 18 2006 ~) c;{.!5) EXHIBIT B FORM NOTICE OF INTENT TO TRANSFER VIA CERTIFIED MAIL - RETURN RECEIPT REQUESTED To City of Dublin 100 CIVIC Center Dublin California 94568 Attn City Manager Date Re Notice of Intent to Transfer Pursuant to the terms of the Resale Restnctlon Agreement and Option to Purchase, dated the undersigned Owner(s), hereby glve(s) notice of his/her/their Intent to transfer the property located at Dublin, California (the "Property") Owner may be contacted at the Property or at the following address Owner's daytime telephone number IS L) [If applicable The proposed transfer of the Property IS to the following person(s) Name Address Telephone L) The proposed transfer IS (check one) o Sale o Other Specify Owner(s) slgnature(s) 790277 2 Form ReVised Apfll18 2006 c2d~5J EXHIBIT C FORM NOTICE OF EXERCISE Date To Owner or Transferee Address Re Notice of Exercise The City of Dublin ("City") hereby gives notice that It IS exercIsing ItS option to purchase the real property located at , Dublin, California The option has been granted to the City pursuant to the Resale Restriction Agreement and Option to Purchase between Owner and the City dated and recorded on as Instrument No City has assigned ItS option to purchase the real property to escrow for the purchase will be opened With the First American Title Company [The An City of Dublin By Its 790277 2 Form Revised Apnl 18 2006 -' 0'13 ~61 EXHIBIT 0 INCLUSIONARY ZONING BASE RESALE PRICE WORKSHEET Date Owner Address Purchase Price Date of Purchase Years Owned years CALCULATION BASED ON INCREASE IN MEDIAN INCOME.*. Present Median Income $ Family of four County of Alameda (at lime of sale of unit) Effective Date Effective Date Onglnal Median Income $ Family of four County of Alameda (at time of purchase of unit) Amount of Increase Family of four County of Alameda (Present median Income minus anginal median Income) Increase In Pnce x x = Method #1 Resale Pnce + = [ Based on the above the base resale pnce as of this date, IS By 790277 2 Form ReVised Apnl 18 2006 0<4- ~G) EXHIBIT E REQUEST FOR NOTICE OF DEFAULT Order No Escrow No Loan No WHEN RECORDED MAIL TO CITY OF DUBLIN Dublin California Attn (Space Above This Line For Recorder s Use Only) REQUEST FOR NOTICE UNDER SECTION 2924b CIVIL CODE In accordance with Section 2924b CIvil Code request IS hereby made that a copy of any Notice of Default and a copy of any Notice of Sale under the Deed of Trust recorded as Instrument No on _ In the Official Records of Alameda County California and describing land therein as executed by as Trustor In which IS named as Beneficiary and as Trustee be mailed to the City of Dublin Dublin, California AUn By NOTICE A COPY OF ANY NOTICE OF DEFAULT AND OF ANY NOTICE OF SALE WILL BE SENT ONLY TO THE ADDRESS CONTAINED IN THIS RECORDED REQUEST IF YOUR ADDRESS CHANGES A NEW REQUEST MUST BE RECORED STATE OF CALIFORNIA COUNTY OF On before me said county and state personally appeared a Notary Public In and for personally known to me (or proved to me on the basIs of satisfactory eVidence) to be the person(s) whose name{s) Is/are subscribed to the within Instrument and acknowledged to me that he/she/they executed the same In his/her/their authorized capacltY(les) and that by his/her/their slgnature{s) on the Instrument the person(s) or the entity upon behalf of which the person(s) acted executed the Instrument WITNESS my hand and official seal Signature (Seal) 790277 2 Form Revised April 18 2006 J-t; ~.?I EXHIBIT F DISCLOSURE STATEMENT THERE ARE RESTRICTIONS ON THE SALE OF THE PROPERTY YOU ARE BUYING EXCEPT FOR A TRANSFER TO THE CITY FOllOWING CITY'S EXERCISE OF ITS OPTION TO PURCHASE, THIS PROPERTY MAY ONLY BE SOLD TO AN "ELIGIBLE HOUSEHOLD" AT A PRICE NOT TO EXCEED THE ADJUSTED RESALE PRICE WHICH IS CAPPED AT AN "AFFORDABLE UNIT COST" THIS MEANS THAT YOU MAY NOT SELL THE PROPERTY FOR MARKET VALUE TO WHOMEVER YOU LIKE THESE RESTRICTIONS WILL BE IN EFFECT UNTIL ANY SALE OF THE PROPERTY IN VIOLATION OF THE RESTRICTIONS, SHALL BE VOIDABLE AT THE ELECTION OF THE CITY TO DETERMINE WHO AN ELIGIBLE HOUSEHOLD IS AND WHAT THE ADJUSTED RESALE PRICE AND AFFORDABLE HOUSING COST ARE, YOU SHOULD CONTACT THE OF THE CITY OF DUBLIN YOU SHOULD READ THE RESALE RESTRICTION AGREEMENT AND OPTION TO PURCHASE RECORDED AGAINST THE PROPERTY YOU MAY OBTAIN A COPY FROM THE CITY OF DUBLIN OR FROM THE ESCROW COMPANY YOU SHOULD ALSO BE AWARE THAT A PERFORMANCE DEED OF TRUSTWILL BE RECORDED AGAINST THE PROPERTY TO ENSURE COMPLIANCE WITH THE RESALE RESTRICTION AGREEMENT AND OPTION TO PURCHASE YOU MAY OBTAIN A COpy FROM THE CITY OF DUBLIN OR FROM THE ESCROW COMPANY I HAVE READ THE FOREGOING AND I UNDERSTAND WHAT IT MEANS BUYER BUYER 790277 2 Form ReVised Apnl18 2006 J& ~ '51 EXHIBIT G FORM PERFORMANCE DEED OF TRUST 7902772 Form RevIsed Apnl 18 2006 ~'1151 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO CITY OF DUBLIN, 100 CIVIC Plaza Dublin, California 94568 Attn City Clerk To be recorded WIthout fee (Gov Code ~~ 6103 and 27383 ) (Space Above This Line For Recorder s Use Only) RESALE RESTRICTION AGREEMENT AND OPTION TO PURCHASE Owner Property Address Dublin, California Name of Development ThiS RESALE RESTRICTION AGREEMENT AND OPTION TO PURCHASE ("Agreement") IS entered Into by and between the CITY OF DUBLIN, a Callforma municIpal corporation (the 'City") and ("Owner') regarding certaIn Improved real property which IS more particularly described In Exhibit A attached hereto and Incorporated herem and commonly known as ,Dublin CA, (the 'Property") effective as of ,20 ('Effective Date") City and Owner are hereinafter collectively referred to as the "Parttes RECITALS A The City has Incluslonary Zoning Regulations (Dublin Municipal Code Chapter 868) (the 'Regulations") that require developers of rental and ownership housing to construct wlthm their projects umts that are affordable to very low-, low-, and moderate- Income households ( the Program ') To further Its goal of creating affordable home ownership opportumtles for very low- low- and moderate-Income persons and families the City has initiated a program for the sale of some homes at a price below their market rate ("Program') Pursuant to the Program, developers of housing developments agree to set aSide a certain number of units for purchase or rent, as applicable, by very low-, low-, and moderate-Income persons and families, as defined herein B Owner IS an eligible [very low-, low- or moderate-]lncome purchaser under the Program, Intends to live In the Property as an owner occupant, and agrees to maintain the Property as Owner s principal reSidence 1030393 -1- Proposed RevIsions 11/14/07 ATTACHMENT 2 ..?g~ 51 C In order to maintain and preserve the Property as housing affordable to eligible [very low-, low-, or moderate-]lncome purchasers It IS necessary to restrict the use and resale of the Property through Imposition of the occupancy and resale restrictions set forth herein These restrictions are Intended to prevent InItial and subsequent purchasers from uSing the Property for purposes Incompatible with the Program and realizing unwarranted gains from sales of the Property at unrestricted prices The terms and conditions of this Agreement are Intended to provide the necessary occupancy and resale restrictions to ensure that the Property IS used, maintained, and preserved as housing affordable to eligIble [very low-, low-, or moderate-]Income purchasers To further serve the purposes of the Program, It IS necessary that the CIty be granted an option to purchase the property so that the property may be resold by the City to an eligible household o The Property constitutes a valuable community resource by providing decent, safe and sanitary housing to persons and families of [very low, low, or moderate] Income who otherwIse would be unable to afford such housing To protect and preserve thiS resource It IS necessary, proper and In the public Interest for the City to administer occupancy and resale controls consistent with the Program and the Regulations by means of thiS Agreement AGREEMENT NOW, THEREFORE In consideration of the substantial economiC benefits Inuring to Owner and the public purposes to be achieved under the Program, Owner and City hereby agree as follows 1 Definitions a Affordable Unit Cost" shall be as defined In the Regulations, as follows Owner-occupied units are deemed affordable units If the sales price results In annual housing expenses that do not exceed 35% of Income level for very-Iow-, low-, and moderate-Income households, adjusted for household size and as defined below For very low-income owner occupied units, the unit shall be deemed an affordable umt If the sales price results In annual housmg expenses that do not exceed 35% of the maximum In the very low-Income level, adjusted for household size and as defined below" b Area [Very Low, Low, or Moderate] Income for Alameda County" means those Income and eligibIlity levels determmed, updated, and published each year by the California Department of Housing and Community Development based on Alameda County median Income levels, adjusted for household size c 'Persons and families of [very low, low, or moderate] Income" means persons and families whose Income does not exceed [fifty percent (50%), eighty percent (80%), or one hundred twenty percent (120%)] of the Area Median Income for Alameda County, as adjusted for household size 1030393 -2- Proposed ReVISions 11/14/07 0<1 ~ 51 d Persons and families meeting the definition set forth In Paragraph 1 b above shall be referred to as 'Eligible Households" 2 Program Requirements a Affordablllty Restrictions Owner hereby covenants and agrees that dUring the term of this Agreement all of the requirements and restrictions of this Agreement shall apply, and the Property shall be sold or otherwise transferred only pursuant to the terms and conditions of this Agreement and only to (I) Eligible Households at a price not to exceed the Adjusted Resale Price, as defined In Paragraph 5, (II) the City pursuant to Paragraph 3 at a price not to exceed the Adjusted Resale Price, as defined In Paragraph 5, or (III) a permitted transferee pursuant to Paragraph 9 b Disclosure DURING THE TERM OF THIS AGREEMENT THERE SHALL BE NO SALE OR OTHER TRANSFER OF THE PROPERTY WITHOUT THE WRITTEN CERTIFICATION BY THE CITY THAT THE TRANSFEREE QUALIFIES AS AN ELIGIBLE HOUSEHOLD AND THAT THE PROPERTY IS BEING TRANSFERRED AT A PRICE NOT TO EXCEED THE ADJUSTED RESALE PRICE, WHICH IS CAPPED AT THE AFFORDABLE UNIT COST AS DEFINED IN PARAGRAPH 1 a ANY SALE OR OTHER TRANSFER OF THE PROPERTY IN VIOLATION OF THIS COVENANT SHALL BE VOIDABLE BY THE CITY c Principal ReSidence ReqUirement OWNER COVENANTS AND AGREES THAT HE/SHEITHEY SHALL OCCUPY THE PROPERTY AS HIS/HERffHEIR PRINCIPAL RESIDENCE FOR THE DURATION OF HIS/HERlTHEIR OWNERSHIP AND SHALL NOT RENT OR LEASE THE PROPERTY OR PORTION THEREOF DURING THE TERM OF THIS AGREEMENT WITHOUT PRIOR WRITTEN APPROVAL OF CITY Without limiting the generality of the foregOing any absence from the Property by Owner for a period of ninety (90) or more days shall be deemed an abandonment of the Property as the principal reSidence of Owner In Violation of the conditions of thiS Paragraph Upon request by the City made from time to time the Owner of the Property shall submit an affidaVit to the City certIfYing that the Property IS the Owner's principal reSidence and proVide such documents and other eVidence as may be requested to verify Owner's compliance With thIS requirement Abandonment of the Property shall constitute an Option Event (as defmed In Paragraph 3 c below) and shall entitle the City to exercise Its Option to purchase the Property 3 Option to Purchase a Grant of Option to Purchase Owner hereby grants to the City an option ("Option") to purchase all of Owner's right, title and Interest In and to the Property upon the occurrence of an Option Event (defined In Paragraph 3 c below) subject to the terms and conditions contained herem b ASSignment of the Option The City may assign the Option to another government entIty, a non-profit affordable hOUSing proVider or a person or family that qualifies as an Eligible Household The City's assignment of the Option shall not extend any time limits contamed herein With respect to the exerCise period of the Option or the period Within which the Property must be purchased 1030393 -3- Proposed ReVISions 11/14/07 I c Events GIVing Rise to Right to Exercise Option The City shall have I the right to exercise Its Option upon the occurrence of any of the following events (each, an Option Event") 20 ~51 Receipt of a Notice of Intent to Transfer (defined In Paragraph 3 d I below), II Any actual, attempted or pending sale, conveyance, transfer, lease or other attempted disposition of the Property or of any estate or Interest therein, except as provided In Paragraph 10 below, III Any actual, attempted or pending encumbrance of the Property, Including without lImitation by way of mortgage or deed of trust, or by Judgment, mechanics, tax or other lien, except as provided In Paragraph 9 below, IV Recordation of a notice of default and/or notice of sale pursuant to California CIvil Code sectIon 2924 (or successor provIsions) under any deed of trust or mortgage with a power of sale encumbering the Property, V Commencement of a Judicial foreclosure proceeding regarding the Property VI Execution by Owner of any deed In lieu of foreclosure transferring ownership of the Property, VII Commencement of a proceeding or action In bankruptcy, whether voluntary or Involuntary, pursuant to Title 11 of the United States Code or other bankruptcy statute, or any other Insolvency, reorganization, arrangement, assIgnment for the benefit of creditors, receivership or trusteeship, concerning the Owner, or VIII Any violation by Owner of any provIsion of this Agreement Including wIthout limitation, the conditions set forth In Paragraph 2 above d Method of ExercIsing the Option I Notice of Intent to Transfer If Owner desires to sell, convey, transfer (other than pursuant to Paragraph 9 below) lease encumber (other than pursuant to Paragraph 10 below) or otherwise dispose of the Property or of any estate or Interest therein, no less than 45 days pnor to the date of such proposed sale, conveyance transfer lease, encumbrance or disposition, Owner shall notify City In wntlng to that effect (the Notice of Intent to Transfer) The Notice of Intent to Transfer shall be In substantially the form attached hereto as Exhibit B In the case of a proposed sale of the Property to an Identified prospective purchaser, the Owner shall submit to the City, together With the Notice of Intent to Transfer, a copy of the prospective purchaser s Income certIfication, a list of all assets owned by the prospective purchaser, and other financial Information reasonably requested by City, In a form approved by the City along With the Income certification to be provided to any lender making a loan to the prospective purchaser The City may require documentation eVidenCing and supporting the Income and other financial Information contained In the certifications 1030393 -4- Proposed RevIsions 11/14/07 " 3) %51 II Notice of Exercise Upon the occurrence of any Option Event the City may exercise Its Option by delivering notice, pursuant to Paragraph 17 and wlthm the time period specified In Paragraph 3 d IV to Owner of City s mtent to exercise such Option pursuant to the terms of this Agreement ("Nottce of Exercise") The Notice of Exercise may be In the form attached hereto and Incorporated herem as Exhibit C, or In such other form as the City may from time to time adopt If the Option Event relates to the potential foreclosure of a mortgage under Paragraphs 3 c IV 3 c v or 3 c VI, then the City shall also deliver the Notice of ExerCise to the mortgagee or benefIciary under such mortgage, at such mortgagee's or benefiCiary s address of record In the OffIce of the Recorder of Alameda County III Notice of Consent to Transfer If the City does not exercise the Option It may give Its consent to the occurrence of the Option Event ("Consent to Transfer") If the Option Event Involves a proposed sale of the Property to a prospective purchaser, the CIty's consent shall be conditioned upon (I) the proposed purchaser s qualification as an Eligible Household (II) the sale of the Property at a price not to exceed the Adjusted Resale Price (III) the proposed purchaser's execution of a Disclosure Statement In the form attached hereto as Exhibit F or such other form or forms as may be promulgated by the City (IV) the proposed purchaser's assumptton of Owner's duties and obligations under this Agreement pursuant to a written assumption agreement In a form acceptable to City, or execution of an agreement substantially Similar to this Agreement Within thirty (30) days after the Consent to Transfer has been delivered to Owner and recordation of such assumption agreement or substitute agreement, and (v) the proposed purchaser's execution of a Performance Deed of Trust In the form attached hereto as Exhibit G SELLER SHALL PAY REAL ESTATE COMMISSIONS, IF ANY, WHICH SHALL NOT TO EXCEED 6% OF THE ACTUAL SALES PRICE If the prospective purchaser (I) falls to qualify as an Eligible Household, (II) falls to execute and deliver the Disclosure Statement to the City, (III) falls to execute and delIver to the City an assumption agreement or an agreement substantially Similar to thiS Agreement wlthm such thirty (30) day penod, or (IV) falls to execute and deliver to the City a Performance Deed of Trust m the form attached hereto as Exhibit G, then the Consent to Transfer shall expire and the City may, at Its option either notify Owner of the disqualification thereby entitling Owner to locate another purchaser who qualifies as Eligible Household, or exercise the Option, as If no Consent to Transfer had been delivered IV Time Period for Notice The CIty shall deliver a Consent to Transfer, If applicable, not later than thirty (30) days after the date that It receives notification of an Option Event The City shall deliver a Notice of Exercise, If applicable, on or before the date which IS the later to occur of the follOWing (I) thirty (30) days after the date that the City receives notification of an Option Event or (II) fifteen (15) days after a Consent to Transfer has expired If the City delivers a Notice of Exercise to Owner upon occurrence of an OPtion Event described m Paraqraphs 3 C IV, 3 c v, or 3 c VI, the City or ItS aSSIQnee shall close escrow for the purchase of the Property no later than 90 days after the date the Cltv receives notification of such Option Event For purposes of computing commencement of the delivery periods the City shall be deemed to have received notlftcatlon of an Option Event on the date of delivery of a Notice of Intent to Transfer, pursuant to the terms of Paragraph 17 below or on the date It actually receives notice of default, summons and complaint or other pleading, or other writing speCifically stating that an Option Event has occurred The City shall have no obligation to delIver a Notice of 1030393 -5- Proposed RevISions 11/14/07 2;GZ ~ 81 Exercise or Consent to Transfer, and the applicable time period for exercise of the Option shall not commence to run unless and untIl the City has received notification of an Option Event In the manner specified In thIs subparagraph If there IS a stay or Injunction Imposed by court order precluding the City from delivenng ItS Consent to Transfer or NotIce of Exercise within the applicable time penod, then the runmng of such penod shall cease until such time as the stay IS lifted or the Injunction IS dissolved and the City has been given written notice thereof, at which time the period for delivery of a Consent to Transfer or Notice of Exercise shall again begin to run v Notice of Abandonment If the City falls to deliver a Notice of Exercise or Consent to Transfer within the time periods set forth In Paragraph 3 d IV, upon request by Owner the City shall cause to be filed for recordation In the Office of the Recorder of Alameda County, a notice of abandonment, whIch shall declare that the prOVIsions of the Option are no longer applicable to the Property Unless Owner requests recordation of notice of abandonment within 30 days of the City s failure to deliver Notice of Exercise or Consent to Transfer, the City shall have no obligation to record the notIce of abandonment Upon recordation of a notice of abandonment, the Option shall terminate and have no further force and effect If the City falls to record a notice of abandonment, the sole remedy of Owner shall be to obtain a Judicial order Instructing prompt recordation of such a notice VI Right to Remstatement If the Option Event IS the recordatIon of a notice of default, then the City shall be deemed to be Owner s successor In Interest under California CIVil Code Section 2924(c) (or successor section) solely for purposes of reinstatement of any mortgage on the Property that has led to the recordation of the notice of default As Owner's deemed successor m mterest, the City shall be entitled to pay all amounts of principal, Interest, taxes, assessments homeowners' association fees Insurance premiums, advances, costs, attorneys' fees and expenses reqUired to cure the default If the CIty exercIses the Option, then any and all amounts paid by the City pursuant to thiS Paragraph shall be treated as Adjustments to the Base Resale Price for the Property, as defined In Paragraph 5 below VII Inspection of Property After receiving a NotIce of Intent to transfer or delivering a Notice of ExerCise, the City shall be entitled to Inspect the Property one or more times prior to the close of escrow to determine the amount of any Adjustments to the Base Resale Price Before Inspecting the Property, the City shall give Owner not less than forty-eight (48) hours written notice of the date, time and expected duratIon of the inspectIon The Inspection shall be conducted between the hours of 900 a m and 500 pm, Monday through Friday excluding court holidays unless the parties mutually agree In writing to another date and time Owner shall make the Property available for Inspection on the date and at the tIme specified In the City's request for Inspection VIII Escrow Promptly after delivering a Notice of ExerCise the City shall open an escrow account for Its purchase of the Property Close of escrow shall take place on such date which IS the later to occur of the follOWing, (a) sixty (60) days after a Notice of ExerCise has been delivered or (b) ten (10) days after Owner has performed all acts and executed all documents reqUired for close of escrow, proVided however, If the CIty exercises the Option upon the occurrence of an OptIon Event deSCribed In Paraqraphs 3 c IV, 3 c V, or 3 c VI. close of escrow shall take place no later than 90 days after the date 1030393 -6- Proposed ReVISions 11/14/07 33 ~61 the Cltv receives notification of such Option Event Prior to the close of escrow, the City shall depoSIt Into escrow with a title company of City's choosing the Adjusted Resale Price as defined In Paragraph 5 below and all escrow fees and closing costs to be paid by City Commissions (not to exceed 6% of the actual sales price), clOSing costs and title Insurance shall be paid pursuant to the custom and practice In the County of Alameda at the time of the opening of escrow or as may otherwise be provided by mutual agreement Owner agrees to perform all acts and execute all documents reasonably necessary to effectuate the close of escrow and transfer of the Property to the City IX Proceeds of Escrow, Removal of Exceptions to Title Prior to close of escrow, Owner shall cause the removal of all exceptrons to title to the Property that were recorded after the Effective Date With the exception of (I) taxes for the fiscal year In which the escrow for thiS transaction closes, which taxes shall be prorated as between Owner and City as of the date of close of escrow, (II) quasI-public utility, public alley, public street easements, and nghts of way of record, and (III) such other lIens, encumbrances, reservations and restrictions as may be approved In writing by CIty ( Permitted Exceptions) The purchase price deposited Into escrow by the City shall be applied fIrst to the payment of any and all Permitted Encumbrances (as defined In Paragraph 10) recorded against the Property In order of hen prlonty, and thereafter to the payment of Owner's share of escrow fees and clOSing costs Any amounts remaining after the purchase pnce has been so applied If any shall be paid to Owner upon the close of escrow If the purchase price IS Insufficient to satIsfy all hens and encumbrances recorded against the Property the Owner shall deposit Into escrow such addltronal sums as may be required to remove said hens and encumbrances In the event that the City agrees to proceed With close of escrow pnor to the date that Owner has caused all exceptions to title recorded after the EffectIve Date other than Permitted Exceptions to be removed then Owner shall indemnify defend and hold City harmless from any and all costs expenses or liabilities (Including attorneys fees) Incurred or suffered by City that relate to such exceptions and theIr removal as exceptions to title to the Property 4 Base Resale Price Prior to adjustment pursuant to Paragraph 5 the base resale pnce ("Base Resale Pnce") of the Property shall be the lowest of a Median Income The angInal price (' Base Price") paid by Owner for acquIsition of the Property pursuant to the Program, Increased (but not decreased) by an amount, If any, equal to the Base Price multiplied by the percentage Increase In the median household Income ( Median Income) for Alameda County published by the California Department of HOUSing and Community Development, DIVISion of HOUSing Polley Development between the Effective Date and the date that the City receives notification of an Option Event, or b fair Market Value The fair market value of the Property as determined by an appraiser selected and paid for by Owner and approved In wrltmg by the City To compute the Base Resale Price the City may use the Base Resale Price Worksheet attached as Exhibit 0 hereto, or such other form as the City may from time to time adopt 1030393 -7- Proposed ReVISions 11/14/07 24~51 5 Adjustments to Base Resale Price Subject to the Affordable Unit Cost, restriction described In subparagraph (d) below, the Base Resale Price shall be Increased or decreased, as applicable, by the following adjustment factors ("Adjustment") a Capital Improvements An Increase for capital Improvements made to the Property, but only If the amount of such Improvements has been preViously approved In writing by the City after Owner has submitted original written documentation of the cost to the City for verification The amount of the Adjustment shall equal the original cost of any such capital Improvements b Damages A decrease by the amount necessary to repair damage to the Property, If any, and to place the Property Into saleable condltron as reasonably determined by the City upon City's exercise of Its Option hereunder, including, Without Ilmltatron, amounts attributed to cleaning, painting, replaCing worn carpetrng and draperies, making necessary structural, mechanical, electrical and plumbing repairs, and repairing or replaCing bUilt-In appliances and fixtures Owner hereby covenants to, at Owner's expense, maintain the Property In the same condition as In eXistence on the date of City's Notice of ExerCise, reasonable wear and tear excepted c Advances by the City A decrease In an amount equal to the sum of all costs advanced by the City for the payment of mortgages, taxes assessments Insurance premiums, homeowner's association fees and/or assOCiated late fees costs penalties Interest, attorneys' fees, pest Inspections, resale Inspections and other expenses related to the Property which Owner has failed to payor has permitted to become delinquent d Adjusted Resale Price Not to Exceed Affordable Unit Cost The Base Resale Price as adjusted IS hereinafter referred to as the' Adjusted Resale Price" NotWithstanding any other proVISion hereof to the contrary In no event shall the Adjusted Resale Price exceed the Affordable Unit Cost 6 Priority and Effectiveness of the Option a Recordation ThiS Agreement shall be recorded In the Office of the Recorder of the County of Alameda on or as soon as practicable after the Effective Date The Option shall have priority over any subsequent sale conveyance, transfer, lease or other dispOSition or encumbrance of the Property, or of any estate or Interest therein and In the event of exercise of the Option by City the City shall take the Property subject only to Pennltted Exceptions Except as otherwise prOVIded In Paragraph 7 a the exercise of the Option by the City at any time and from time to time shall not extingUish the Option or cause a merger of the Optron Into any estate or other Interest In the Property, and the Option shall continue to eXist and be effective With respect to the Property against any and all subsequent owners In accordance With the terms and conditions hereof b Request for Notice of Default The City shall file a Request for Notice of Default for recordation In the Office of the Recorder of the County of Alameda promptly upon executIon of thiS Agreement (see Exhibit E) c Subordmatlon The City agrees that In order to assist qualified purchasers to secure purchase money finanCing for the acqUiSition of the Property, the City 1030393 -8- Proposed ReVISions 11/14/07 35~61 will enter Into a subordination agreement with a senior purchase money lender to subordinate this Agreement under such terms as the City and the senior purchase money lender shall negotiate 7 Survival of Option Upon Transfer a In General The City's right to exercise the Option shall survive any transfer of the Property by Owner Each transferee assignee or purchaser of the Property dUring the term hereof shall be required to execute an agreement substantially In the form of thIs Agreement provided that the term of any such agreement shall be for the duration of the term hereof as of the date of any such transfer assignment or sale The Option may be exercised against the Property throughout the term hereof regardless of whether the Property IS owned possessed or occupied by Owner or any successor, transferee, assignee heir executor or administrator of Owner regardless of household Income (If applicable) Including a debtor-In-possesslon debtor or trustee pursuant to Title 11 of the United States Code Notwithstanding the foregoing the Option shall not survive (I) the sale and transfer of the Property to a third party purchaser pursuant to a Judicial or non-Judicial foreclosure or a deed-In-lieu of foreclosure under a power of sale contained In a mortgage or deed of trust held by an Institutional lender, or (II) the recording of an Instrument conveYing Owner s Interest In the Property to the City, or Its assignee, provided the conveyance IS In accordance with the terms of this Agreement b HUD Insured Mortgage If Owner has acqUired the Property by a mortgage Insured by the Secretary of the United States Department of HOUSing and Urban Development, and a notice of default has been recorded pursuant to CalIfornia CIvil Code SectIon 2924 (or successor provIsions), then this Option shall automatically terminate If title to the Property IS transferred by foreclosure or deed-in-lieu of foreclosure, or If the Insured mortgage IS aSSigned to the Secretary 8 VOidable Transfers As long as the Option has not been abandoned pursuant to Paragraph 3 d v, any actual or attempted sale, conveyance transfer or other dispOSition of the Property, or of any estate or Interest therein, In violation of the terms and condItIons of this Agreement shall be vOidable at the election of the City 9 Permitted Transfers Provided that the transferee assumes, within 30 days of a written request by the City, all of Owner's dutles and obligations under this Agreement pursuant to a written assumption agreement In a form acceptable to City or at City s election, executIon of an agreement substantially similar to this Agreement, the following transfers ("Permitted Transfers") of title to the Property or of any estate or Interest therein, shall not be subject to the City s prror approval shall not trigger the exercise of the Option, and shall not be conSidered Option Events (a) a good-faith transfer by gift deVise or Inherrtance to Owner's spouse or Issue, (b) a taking of title by a surviving JOint tenant, (c) a court-ordered transfer of title to a spouse as part of a divorce or dissolution proceedmg, (d) a transfer by Owner Into an Inter VIVOS trust In which the Owner IS a beneficiary and the Owner continues to occupy the property as his/her primary residence, (e) an acqUisition of title, or of any Interest therein, In conjunction with marriage, or (f) any good faith transfer to an Eligible Household Notwithstanding any Permitted Transfer, the Option shall remain effective with respect to the Property for the duration of the term hereof 1030393 -9- Proposed ReVISions 11/14/07 3' ~E I 10 Permitted Encumbrances This Option shall not become exercisable as the result of Owner s encumbering the Property (a) for the purpose of securing financing to purchase the Property pursuant to the Program, (b) to refmance mdebtedness Incurred to purchase the Property pursuant to the Program, provided that prior to refinancing the Property Owner shall obtain City's approval of the reflnancmg pursuant to section 11 below, which shall not be unreasonably withheld, or (c) to make necessary repairs to the Property m an amount approved by City pursuant to Paragraph 5a ("Permitted Encumbrances") The maximum aggregate amount of such encumbrances outstandmg at any time (the "Permitted Encumbrance Amount") shall not exceed an amount equal to one-hundred percent (100%) of the Base Resale Price calculated as provided In Paragraph 4 The Permitted Encumbrance Amount shall be calculated as If the City had received notification of an Option Event on the earlier of (a) the date on which the deed of trust or mortgage securing the Indebtedness IS filed for record m the Office of the Recorder of the County of Alameda or (b) the date the City receIves Notice of Intent to Transfer pursuant to Paragraph 3 d I above Owner hereby covenants and agrees that he/she/they shall use his/her/their best efforts to ensure that any deed of trust or other agreement encumbering the property shall Include provIsions providing for notice to be delivered to City of any default thereunder and for City s right to cure such default at City's election 11 Reflnancmg, JUnior Loans a Imtlal Fmancmg Any prepayment and refinance of any fmancmg used to purchase the Property ("the Initial Financing") shall not be permitted unless expressly approved by the City In wrltmg, and the City may approve such refinancing only If all of the following conditions are met I the refinance reduces Owner's monthly payments of prmclpal and Interest on the Initial Financing or shall be used to fmance capital Improvements preapproved by the City ("Eligible Capital Improvements"), II the refinance does not cause the princIpal amount of all debt secured by the Property to exceed the then outstanding balance (plus refinancing and closing costs) of the Initial Improvements plus the cost of any Eligible Capital Improvements that shall be made by Owner, III the refmance does not result m Owner receIving any cash from the refinance other than for Eligible Capital Improvements permitted pursuant to Paragraphs 11 a I and 11 a II, IV the refinance does not cause the Property's loan to value ratio (calculated by comparing the total debt secured by the Property to the Adjusted Resale Price of the Home) to exceed the loan to value ratio for the Property at the time of InItial purchase by the Owner (calculated by comparing the total debt secured by the Property to the Purchase Price paid by the Owner) v the total outstanding balance of principal and any accrued Interest on all roans secured by the Property does not exceed the Adjusted Resale Price, calculated by the City pursuant to Paragraph 5 of this Agreement 1030393 -10- Proposed RevIsions 11/14/07 31 ~?I b Junior loans Mortgage loans or equity lines of credit Junior In lien priority to the Performance Deed of Trust are not permitted except as when expressly approved by the City In writing The City shall only approve Junior mortgage loans or equity lines of credit as follows I the loan or equity line of credit does not does not cause the Property's loan to value ratio (calculated by comparing the total debt secured by the Property to the Adjusted Resale Price of the Property) to exceed the loan to value ratio for the Property at the time of Inlllal purchase by the Owner (calculated by comparing the total debt secured by the Property to the purchase paid by the Owner), II the proceeds of such loan or equity line of credit are used only for Eligible Capital Improvements, and III the total outstanding balance of principal and any accrued Interest on all loans secured by the Property does not exceed the Adjusted Resale Price calculated by the City pursuant to Paragraph 5 of thiS Agreement c Eligible Capital Improvements In the event (I) the Owner refinances the lmtlal Financing In accordance With Paragraph 11 a, or (II) the Owner borrows a Junior loan or takes an equity line of credit In accordance With Paragraph 11 b, and the funds from such refinance, loan, or line of credit shall be used for Eligible Capital Improvements, Owner shall provide eVidence to City, In a form acceptable to City In Its sole and absolute discretion, that any amount of funds received by Owner for such Eligible Capital Improvements shall be and are used for the construction of such Eligible Capital Improvements d Affordable Housmg Cost, Subordination The City and the Owner agree that the requirements of thiS Paragraph 11 are necessary to ensure the continued affordablllty of the Property to Owner and to minimize the risk of loss of the Property by Owner through default and foreclosure of mortgage loans Owner further acknowledges that Violation of the prOVISions of thiS Paragraph 11 shall constitute a Default under thiS Agreement In no case shall thIS Agreement and the Performance Deed of Trust be In lower than third lien pOSitIon on the Property Any subordination agreement to be executed by City shalt Include notice and cure nghts for CIty regarding any defaults In the mortgage to which the City IS subordlnattng 12 Obligation of Owner After Option Abandonment If the City records a notice of abandonment of the Option, then the Property may be sold by Owner to a third party Without restrlctron as to pnce, however, upon such sate Owner shall pay to City an amount ("City's Share) equal to twenty-five percent (25%) of the difference between (a) the actual sales price net of reasonable and customary real estate commiSSIons paid (such commissions not to exceed SIX percent (6%) of the actual sales price), and (b) the Adjusted Resale Price The City s Share shall be paid to the City concurrently With close of escrow on the sale of the Property, or upon receipt by Owner of the sale pnce for the Property whichever shall first occur 13 Limits on Liability In no event shall the City become liable or obligated In any manner to Owner by reason of the assignment of thiS Agreement or the Option, nor shall 1030393 -11- Proposed ReVISions 11/14/07 r ~:;51 City be In any way lIable or obligated to Owner for any failure of the City's assignee to consummate a purchase of the Property or to comply with the terms of this Agreement or the Option, or any escrow Instructions or agreement for the purchase of the Property 14 Insurance Proceeds and Condemnation Award In the event the Property IS destroyed and Insurance proceeds are distributed to Owner Instead of being used to rebuild the Property or In the event of condemnation If the proceeds thereof are distributed to Owner any surplus of proceeds remaining after payment of the senior liens and encumbrances on the Property shall be distributed as follows that portion of the surplus up to, but not to exceed, the net amount Owner would have received pursuant to Paragraph 3 d IX had the City exercised ItS Option on the date of the destruction of condemnatron valuation date shall be distributed to Owner and the balance of such surplus If any, shall be distributed to the City 15 Effective Date The rights and obligations of the City and Owner set forth In thIs Agreement shall be effective as of the Effective Date 16 Term of Agreement and Option The restrictions contained herem and the City s option to purchase the Property shall continue for a period of fifty-five (55) years commencing on the Effective Date Notwithstanding anything to the contrary In the foregOing the Agreement shall remain In effect until the first transfer on or after the termination of the restrictions and option to purchase pursuant to thiS Paragraph Upon such sale Owner shall pay to City an amount ("CIty s Share") equal to twenty-five percent (25%) of the dIfference between (a) the actual sales price net of reasonable and customary real estate commissions paid (such commiSSions not to exceed SIX percent (6%) of the actual sales price) and (b) the Adjusted Resale Price on the date of the termination of the restrictions and option to purchase pursuant to thiS Paragraph The City's Share shall be paid to the City concurrently With close of escrow on the sale of the Property, or upon receipt by Owner of the sale price for the Property whichever shall first occur FollOWing completion of a sale In compliance With thiS provISion, thiS Agreement shall terminate 17 Notices Except as otherwise specified In thiS Agreement all notices to be sent pursuant to thiS Agreement shall be made In writing, and sent to the Parties at their respective addresses specIfIed below or to such other address as a Party may designate by written notIce delivered to the other Party In accordance With thIS Section All such notices shall be sent by a personal delivery In which case notice shall be deemed delivered upon receipt, b certified or registered mall, return receipt requested In which case notice shall be deemed delivered two (2) bUSiness days after deposit, postage prepaid In the United States mall, c nationally recognized overnight courier, In whIch case notice shall be deemed delivered one (1) day after deposit With such courier or 1030393 -12- Proposed ReVISions 11/14/07 3) ~61 d facsimile transmission In which case notice shall be deemed delivered on transmittal, provided that a transmission report IS generated reflectmg the accurate transmission thereof City City of Dublin, 100 CIVIC Plaza Dublin California 94568 Attn City Manager Owner At the address of the Property 18 Remedies Upon Breach a Specific Performance Owner acknowledges that any breach In the performance of ItS obligations under this Agreement shall cause Irreparable harm to the City Owner agrees that the City IS entitled to equitable rehef In the form of specific performance upon ItS exerCise of the Option, and that an award of damages shall not be adequate to compensate the City for Owner s failure to perform according to the terms of this Agreement b Other Remedies City shall have all of the remedies provided for at law or equity 1 9 General ProvIsions a Attorneys' Fees If either party Initiates legal proceedings to Interpret or enforce ItS nghts under this Agreement, the prevailing party m such action shall be entitled to an award of reasonable attorneys' fees and costs In additions to any other recovery to which It IS entitled under this Agreement b No Jomt Venture, No Third-Party Beneficiary No Jomt venture or other partnership eXists or IS created between the Parties by virtue of this Agreement Except as expressly stated herem, this Agreement does not benefit any third party c Successors, ASSignment This Agreement shall Inure to the benefit of and shall be binding upon the Parties to this Agreement and their respective heirs, executors, administrators successors and assigns City shall have the right to assign all of ItS rights and oblrgatlons under thiS Agreement Without the consent of Owner d Entire Agreement, Amendment ThiS Agreement constitutes the entire agreement of the Parties With respect to the subject matter hereof, and supersedes any and all other prior negotiations, correspondence understandings and agreements With respect thereto There are no representations, promises, agreements or other understandings between the Parties relating to the subject matter of thiS Agreement that are not expressed herein ThiS Agreement may be modified only by an Instrument In writing executed by the Parties or their respective successors In mterest 1030393 -13- Proposed ReVISions 11/14/07 Ifo ~51 e SurvIval, No Merger All of the terms, provISions, representations, warranties and covenants of the Parties under this Agreement shall survive the close of escrow of any sale of the Property and shall not be merged In any deed transfernng the Property f AuthOrity And Execution Each Party represents and warrants that It has full power and authOrity to enter Into thiS Agreement and to undertake all of ItS obligations hereunder that each person executing thiS Agreement on ItS behalf IS duly and validly authOrized to do so g Severability The invalidity or unenforceablllty of any term or provIsion of thiS Agreement shall not Impair or affect the remainder of thiS Agreement, and the remaining terms and proVIsions hereof shall not be Invalidated but shall remain In full force and effect h Waiver, Modification No waiver or modification of thiS Agreement or any covenant condition or limitation herein contamed shall be valid unless In wrltmg and duly executed by the Party to be charged therewith No eVidence or any waiver or modification shall be offered or received In eVIdence m any proceeding arbitration, or litigation between the Parties arising out of or affecting thiS Agreement or the nghts or obligations of any Party hereunder unless such waiver or modification IS In writing and duly executed as aforesaid The proVIsIons of thiS section may not be waived except as herem set forth A waiver or breach of any covenant, condition or provIsion of thiS Agreement shall not be deemed a waiver of any other covenant, condltton or provIsion hereof I Construction The section headings and captions used In thiS Agreement are for convenience of reference only and shall not modify, define, limit or amplify any of the terms or provIsions hereof ThiS Agreement shall not be construed as If It had been prepared by one of the Parties but rather as If both Parties have prepared It J Governmg law ThiS Agreement shall In all respects be governed by and construed In accordance With the laws of the State of California k Time of the Essence Time IS of the essence In thiS Agreement as to each provIsion In which time IS an element of performance I Further Assurances Each Party Will, upon reasonable request of the other Party execute acknowledge, and deliver or cause to be executed, acknowledged and delivered, such further Instruments and documents as may be reasonably necessary In order to fulfill the Intents and purposes of thIS Agreement m Counterparts ThIS Agreement may be executed In counterparts, each of which shall be deemed an onglnal, and all which together shall constitute one and the same Instrument [EXECUTION PAGE FOLLOWS] 1030393 -14- Proposed ReVISions 11/14/07 4115/ IN WITNESS WHEREOF the undersigned have caused this Agreement to be executed as of the date first written above OWNER(S) CITY CITY OF DUBLIN Richard Ambrose CIty Manager ATTEST City Clerk 1030393 -15- Proposed RevIsions 11/14/07 LftX ctJ?j I STATE OF CALIFORNIA ) ) ) COUNTY OF On before me, In and for said county and state, personally appeared , a Notary Public personally known to me (or proved to me on the basIs of satisfactory eVidence) to be the person(s) whose name(s) Is/are subscribed to the within Instrument and acknowledged to me that he/she/they executed the same In his/her/their authOrized capacltY(les), and that by his/her/their slgnature(s) on the Instrument the person(s), or the entity upon behalf of whIch the person(s) acted, executed the Instrument WITNESS my hand and offiCial seal Signature (Seal) STATE OF CALIFORNIA ) ) ) COUNTY OF On before me, In and for said county and state, personally appeared , a Notary Public personally known to me (or proved to me on the baSIS of satisfactory eVidence) to be the person(s) whose name(s) Is/are subscribed to the wlthm Instrument and acknowledged to me that he/she/they executed the same In his/her/their authOrized capaclty(les), and that by his/her/their slgnature(s) on the Instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the Instrument WITNESS my hand and offiCial seal Signature (Seal) 790277 2 Form ReVised April 18 2006 4;}; 15/ STATE OF CALIFORNIA COUNTY OF ) ) ) On before me, In and for said county and state, personally appeared , a Notary Public personally known to me (or proved to me on the basIs of satisfactory eVidence) to be the person(s) whose name(s) Is/are subscnbed to the within Instrument and acknowledged to me that he/she/they executed the same In hIs/her/their authonzed capacltY(les), and that by his/her/their slgnature(s) on the Instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the Instrument WITNESS my hand and offiCial seal Signature (Seal) 790277 2 Form Revised Apnl18 2006 ULf ~ ~I CERTIFICATE OF ACCEPTANCE (Pursuant to Government Code ~27281) This IS to certify that the Interest In real property conveyed by the Resale Restriction Agreement and Option to Purchase dated from to the City of Dublm, a California munIcipal corporation IS hereby accepted by the undersigned office or agent on behalf of the City of Dublin pursuant to authority conferred by the Resolution No dated , and the grantee consents to recordation thereof by ItS duly authorized officer Dated By Its Attest City Clerk 790277 2 Form Revised Apnl18 2006 EXHIBIT A LEGAL DESCRIPTION 790277 2 45181 Form RevIsed April 18 2006 EXHIBIT B FORM NOTICE OF INTENT TO TRANSFER VIA CERTIFIED MAIL - RETURN RECEIPT REQUESTED To City of Dublin 100 CIVIC Center Dublin, California 94568 Attn City Manager Date Re Notice of Intent to Transfer Pursuant to the terms of the Resale Restnctlon Agreement and OptIon to Purchase dated the undersigned Owner(s), \ hereby glve(s) notice of his/her/their Intent to transfer the property located at Dublin, California (the Property") Owner may be contacted at the Property or at the followrng address Owner's daytime telephone number IS L) [If appl1cable The proposed transfer of the Property IS to the followrng person(s) Name Address Telephone ~) The proposed transfer IS (check one) o Sale o Other Specify Owner(s) slgnature(s) 790277 2 Form Revised Apnl18 2006 4~ ~ ~I 41 ~61 EXHIBIT C FORM NOTICE OF EXERCISE Date To Owner or Transferee Address Re Notice of Exercise The City of Dublin ("City") hereby gives notice that It IS exerclsmg Its option to purchase the real property located at Dublin, Callforma The option has been granted to the City pursuant to the Resale Restriction Agreement and Option to Purchase between Owner and the City dated and recorded on as Instrument No City has assigned Its option to purchase the real property to escrow for the purchase will be opened with the First American Title Company [The An City of Dublin By Its 790277 2 Form Revised April 18 2006 42, of 15/ EXHIBIT 0 INCLUSIONARY ZONING BASE RESALE PRICE WORKSHEET Date Owner Address Purchase Price Date of Purchase Years Owned years CALCULATION BASED ON INCREASE IN MEDIAN INCOME*** Present Median Income $ Family of four County of Alameda (at time of sale of unit) Effective Date Effective Date Original Median Income $ Family of four County of Alameda (at time of purchase of unit) Amount of Increase Family of four County of Alameda (Present median Income minus anginal median Income) Inerease In Price x x = Method #1 Resale Pnce + = I Based on the above the base resale price as of this date 1$ By 790277 2 Form Revised Apnl18 2006 111~51 EXHIBIT E REQUEST FOR NOTICE OF DEFAULT Order No Escrow No Loan No WHEN RECORDED MAIL TO CITY OF DUBLIN Dublin California Attn (Space Above This Line For Recorder s Use Only) REQUEST FOR NOTICE UNDER SECTION 2924b CIVIL CODE In accordance With Sectlon 2924b CIvil Code request IS hereby made that a copy of any Notice of Default and a copy of any Notice of Sale under the Deed of Trust recorded as Instrument No on _ In the Official Records of Alameda County California and desCribing land therein as executed by as Trustor In which IS named as BenefiCiary and as Trustee be mailed to the City of Dublin Dublin California Attn By NOTICE A COpy OF ANY NOTICE OF DEFAULT AND OF ANY NOTICE OF SALE WILL BE SENT ONLY TO THE ADDRESS CONTAINED IN THIS RECORDED REQUEST IF YOUR ADDRESS CHANGES A NEW REQUEST MUST BE RECORED STATE OF CALIFORNIA COUNTY OF On before me said county and state personally appeared a Notary Public In and for personally known to me (or proved to me on the basIS of satisfactory eVidence) to be the person(s) whose name(s) Is/are subscribed to the Within Instrument and acknowledged to me that he/she/they executed the same In his/her/their authOrized capacltY(les) and that by his/her/their slgnature(s) on the Instrument the person{s) or the entity upon behalf of which the person(s) acted executed the Instrument WITNESS my hand and offiCial seal Signature (Seal) 790277 2 Form Revised April 18 2006 501 ?1 EXHIBIT F DISCLOSURE STATEMENT THERE ARE RESTRICTIONS ON THE SALE OF THE PROPERTY YOU ARE BUYING EXCEPT FOR A TRANSFER TO THE CITY FOLLOWING CITY'S EXERCISE OF ITS OPTION TO PURCHASE, THIS PROPERTY MAY ONLY BE SOLD TO AN "ELIGIBLE HOUSEHOLD" AT A PRICE NOT TO EXCEED THE ADJUSTED RESALE PRICE WHICH IS CAPPED AT AN "AFFORDABLE UNIT COST" THIS MEANS THAT YOU MAY NOT SELL THE PROPERTY FOR MARKET VALUE TO WHOMEVER YOU LIKE THESE RESTRICTIONS WILL BE IN EFFECT UNTIL ANY SALE OF THE PROPERTY IN VIOLATION OF THE RESTRICTIONS, SHALL BE VOIDABLE AT THE ELECTION OF THE CITY TO DETERMINE WHO AN ELIGIBLE HOUSEHOLD IS AND WHAT THE ADJUSTED RESALE PRICE AND AFFORDABLE HOUSING COST ARE YOU SHOULD CONTACT THE OF THE CITY OF DUBLIN YOU SHOULD READ THE RESALE RESTRICTION AGREEMENT AND OPTION TO PURCHASE RECORDED AGAINST THE PROPERTY YOU MAY OBTAIN A COpy FROM THE CITY OF DUBLIN OR FROM THE ESCROW COMPANY YOU SHOULD ALSO BE AWARE THAT A PERFORMANCE DEED OF TRUSTWILL BE RECORDED AGAINST THE PROPERTY TO ENSURE COMPLIANCE WITH THE RESALE RESTRICTION AGREEMENT AND OPTION TO PURCHASE YOU MAY OBTAIN A COpy FROM THE CITY OF DUBLIN OR FROM THE ESCROW COMPANY I HAVE READ THE FOREGOING AND I UNDERSTAND WHAT IT MEANS BUYER BUYER 790277 2 Form ReVised April 18 2006 5/ ~ 5) EXHIBIT G FORM PERFORMANCE DEED OF TRUST 790277 2 Form Revised Apnl 18 2006