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HomeMy WebLinkAbout26-149 Below Market Rate (BMR) Agreement and Declaration of Restictive Covenants (CC&Rs) with SummerHill Stevens Creek LLCFirst American Title Insurance Company Escrow No. NCS-1203762M Free recording in accordance with California Government Code Sections 6103 and 27383 Recording Requested by and When Recorded Mail to: City of Cupertino 10300 Torre Ave Cupertino, CA 95014 Attn: City Manager 26032810 Louis Chiaramonte Santa Clara County - Clerk -Recorder 08/04/2026 02:30 PM Titles: 2 Pages: 79 Fees: $0.00 Taxes: $0.00 Total: $0.00 1111 NOW iii BELOW MARKET RATE (BMR) AGREEMENT AND DECLARATION OF RESTRICTIVE COVENANTS (CC&Rs) This Below Market Rate (BMR) Agreement and Declaration of Restrictive Covenants (the "Agreement") is made and entered into as of 1vI 'Z' , 2026 (the "Effective Date"), by and between the City of Cupertino, a municiilal corporation (the "City"), and SurnmerHill Stevens Creek LLC, a California limited liability corporation (the "Developer"), (each individually a "Party" and together the "Parties"), with reference to the following facts. RECITALS A. Capitalized terms used but not defined in these recitals are as defined in Article I of this Agreement. B. The Developer owns certain real property located at 20770, 20830, and 20840 Stevens Creek Blvd (as new addresses assigned and approved by the City of Cupertino to be determined) (APN: 359-08-025, -26, -27, and 359-08-028 (partial)) Stevens Creek Blvd in the City of Cupertino, County of Santa Clara, as more particularly described in Exhibit A (the "Property"), The Developer intends to construct a townhouse development consisting of fifty-nine (59) units on the Property to be known as "20770-20840 Stevens Creek Blvd" (the "Development") of which six (6) units shall be affordable to Lower Moderate Income Households (as defined below) and six (6) units shall be affordable to Upper Moderate Income Households (as defined below) for a total of twelve (12) Below Market Rate, The Units are identified as Units # 2, 4, 11, 13, 17, 19, 22, 24, 41, 44, 45 and 53 as shown on Exhibit B attached hereto. C. On June 10, 2025, the Cupertino Planning Commission recommended approval of all discretionary entitlements for the Development, and on July 01, 2025, the Cupertino City Council approved all discretionary entitlements for the Development, subject to certain conditions (the "Project Approvals"), including that six (6) units be affordable and sold to Lower Moderate Income Households and six (6) units be affordable and sold to Upper Moderate Income Households (the "BMR Condition"). 394\09\3950092.2 D. To satisfy the BMR Condition, prior to the recordation of a final map or issuance of any building permit, City requires that this Agreement is recorded against the Property. E. The Developer and the City therefore desire to enter this Agreement to fulfill the BMR Condition and ensure that the Development will be used and operated in accordance with the requirements and conditions of the Project Approvals. AGREEMENT The foregoing recitals are hereby incorporated by reference and made part or this Agreement. 1. Definitions. When used in this Agreement, the following terms shall have the respective meanings assigned to them in this Section 1. 1.1 "Actual Household Size" means the actual bedroom count for the Unit in question plus one (1). 1.2 "Affordable Sales Price" means the maximum allowable sales price for a Unit in effect at the time of its sale by the Developer to an Eligible Household. 1.3 "Agreement" means this Below Market Rate (BMR) Agreement and Declaration of Restrictive Covenants. 1.4 "BMR Manual" means the City's Policy and Procedures Manual for Administering Deed Restricted Affordable Housing Units, adopted by City of Cupertino, as it may be amended. 1.5 "City" is defined in the first paragraph or this Agreement. 1.6 "City Deed of Trust" means a Deed of Trust and Security Agreement securing performance under the Resale Restriction and City Note in a form substantially similar to that shown in Exhibit F. 1.7 "City Note" means a Promissory Note in favor of the City in a form substantially similar to that shown in Exhibit E. 1.8 "Default" is defined in Section 5.5. 1.9 "Developer" is defined in the first paragraph of this Agreement. 1.10 "Development" is defined in Recital B. 394\09\3950092.2 1. I 1 "Director" is the City's Community Development Director or successor position. 1.12 "Effective Date" is defined in the first paragraph of this Agreement. 13 "Eligible Household" is a household which has been determined to be eligible to purchase a Unit as a Lower Moderate Income Household or a Upper Moderate Income Household as the case may be, in compliance with this Agreement. 1.14 "HCD" means the California Department of Housing and Community Development or any successor agency. 1.15 "Household Income" means the combined gross, pre-tax income of all occupants of the applicant household. 1.16 "Indemnities" is defined in Section 5.4. 1.17 "Lower Moderate Income Household" means a household whose Household Income is between eighty percent (80%) and one hundred percent (100%) of the Area Median Income ("AMI") for Santa Clara County periodically published by HCD pursuant to Health and Safety Code section 50093, adjusted for Actual Household Size of each Unit. This income range is referred to as "Median Income" in the BMR Manual. 1.18 "Upper Moderate Income Household" means a household whose Household Income is between one hundred percent (100%) and one hundred twenty percent (120%) of the area median income for Santa Clara County published and periodically published by HCD pursuant to Health and Safety Code section 50093, adjusted for Actual Household Size of each Unit. This income range is referred to as "Moderate Income" in the BMR Manual. 1.19 "Party or Parties" is defined in the first paragraph of this Agreement. 1.20 "Property" is defined in Recital B. 1.21 "Resale Restriction" means an Occupancy, Resale, and Refinancing Restriction Agreement, with Option to Purchase at Restricted Price in a form 394\09\3950092.2 substantially similar to that shown in Exhibit D. 1.22 "Term" shall mean the term of this Agreement, which commences on the date of this Agreement and continues until the ninety-ninth (99th) anniversary of the date of issuance of the last certificate of occupancy or equivalent certification provided by the Building Division of the City for the affordable Units. 1.23 "Units" shall mean Units # 2, 4, 11, 13, 17, 19, 22, 24, 41, 44, 45 and 53 at 20770-20840 Stevens Creek Blvd, Cupertino, CA 95014. 2. Affordability Covenants 2.1 Sale Requirements. The Units shall be sold to Lower and Upper Moderate Income Households for the Term. a. The affordable Units shall be comparable to market -rate units in terms of unit type, number of bedrooms per unit, quality of exterior appearance and overall quality of construction. The Unit size should generally be representative of the unit sizes within the market - rate portion of the Project. Interior features and finishes in the affordable Units shall be durable, of good quality and consistent with the contemporary standards of new housing. b. The affordable Units shall be constructed and completed concurrently with the construction of the market -rate units within the Development. The phasing and sequencing of construction shall be structured such that the affordable Units are delivered proportionately with the market -rate units and shall not be deferred to the final phase of development. In the event the Project is developed in phases, each phase shall include a proportional share of the affordable Units, as reasonably determined by the City, and no certificate of occupancy for market -rate units within any phase shall be issued unless the affordable Units required for that phase have been constructed and are ready for occupancy, or the Developer has made alternative arrangements acceptable to the City. c. Developer shall use diligent efforts to market and sell the affordable Units concurrently with the sale of the market rate units. For the issuance of certificates of occupancy for the market rate units in each phase, Developer must obtain certificates of occupancy for the affordable Units in each phase (which may occur concurrently with issuance of the certificates of occupancy for the market rate units). Compliance with this requirement may be enforced by City not issuing additional certificates of occupancy for the market rate units until Developer is in compliance. d. The affordable Units are described as follows: Unit # Plan Type Bedrooms Living Area (SF) Affordability 2, 22, 45 Plan 1_ALT 4 1,428 100%-120% AMI (Upper 394\09\3950092.2 Moderate) 4, 24, 44 Plan 1_ALT 4 l ,428 80%-100% AMI (Lower Moderate) 11, 17,41 Plan 3 4 2,037 100%-120% AMI (Upper Moderate) 13, 19, 53 Plan 3 4 2,037 80%-100% AMI (Lower Moderate) 2.2 Affordable Sales Prices. The Units shall be sold to Eligible Households at sales prices that do not exceed Affordable Sales Prices established by the City. The Affordable Sales Price shall be calculated in accordance to the procedures outlined in the BMR Manual. The initial Affordable Sales Prices for the Units in effect on the date of this Agreement are shown on Exhibit C attached hereto. Any changes to the initial Affordable Sales Prices as set forth in Exhibit C, shall be subject to the prior written approval of the City. 2.3 Loan. The maximum home loan amount for a Unit shall not exceed ninety-five percent (95%) of the purchase price for the Unit. The maximum home loan amount for the AH Unit shall be submitted by Developer and approved or rejected by City within ten (10) business days from receipt. 2.4 Offers. Eligible Households shall be selected in accordance to procedures outlined in the BMR Manual, as may be amended from time to time with City approval. If at any time during the Term of this Agreement, either party reasonably determines that the priority point placement system described in the BMR Manual conflicts with any applicable state or federal law, Developer and City shall meet and confer within fifteen (15) days of notification from one party to the other, to evaluate such potential conflict and identify mutually acceptable revisions necessary to ensure compliance with applicable laws. If, after good faith efforts, the parties are unable to reach an agreement, the Developer shall comply with any applicable law as reasonably determined by Developer in consultation with legal counsel; provided, however, that Developer shall provide the City with written notice of the basis for such determination and shall implement only those modifications that are narrowly tailored to achieve compliance. Developer shall not be deemed in default hereunder for implementing such legally required modifications, subject to the City's prior written approval, which shall not be unreasonably withheld, conditioned, or delayed. Additionally, all purchase and sale documentation with Developer shall be consistent with this Agreement, the BMR Manual, and shall be subject to city review. The City and the buyer of the Unit shall also execute the documentation required in Section 2.4 hereof. 2.5 Homebuver Documents and Security Instruments. Prior to the closing of each Unit, the Developer shall ensure that: (a) The Eligible Household and the City execute the Resale Restriction, which shall be recorded against the Unit at close of escrow on the sale to the Eligible Household. The 394\09\3950092.2 Resale Restriction shall be recorded immediately following the grant deed to the Eligible Household, unless otherwise approved in writing by the City. (b) The Eligible Household signs the City Note that obligates the Eligible Household to pay the City any excess sales proceeds or excess rents received by the Eligible Household if the Eligible Household fails to comply with the Resale Restriction on rental or resale of the Unit. (c) The Eligible Household signs the City Deed of Trust to secure performance of the Eligible Household's covenants under the Resale Restriction and payment of the amounts due under the City Note if the Eligible Household fails to comply with the terms of the Resale Restriction. The City Deed of Trust shall be recorded against the Unit, subordinate only to the Resale Restriction and the lien for the first mortgage loan obtained by Unit Buyer to finance the purchase of the Unit unless otherwise approved in writing by the City. 2.6 Compliance Reports, Inspections, Monitoring. Within five (5) days following the sale of any Unit by the Developer to an Eligible Household, Developer shall forward, or shall cause escrow officer to forward to the City, copies of the buyer's and seller's settlement statement and all closing documents, including Resale Restriction, City Note, and City Deed of Trust executed in connection with such sale. 3. Marketing, Income Certification, and oversight 3.1 Marketing Plan. a. At least ninety (90) days before the commencement of marketing the Units, Developer shall provide the City, for its review and approval, Developer's written buyer -selection and affirmative marketing plan for marketing the Units to income -eligible households (the "Marketing Plan"), consistent with the subsection below. Upon receipt of the Marketing Plan, the City shall promptly review the Marketing Plan and shall approve or disapprove it within thirty (30) days after submission provided. If the City does not respond within such 30 - day period, Developer may provide written notice to the City requesting a determination, and the City shall respond within fifteen (15) days of such notice. If the Marketing Plan is not approved, Developer shall submit a revised Marketing Plan within thirty (30) days and the City will approve or disapprove it in the same manner set forth in this subsection. b. The Marketing Plan submitted to the City shall include the following: means to be used to advertise the Units to the public for sale; maintenance of a waiting list; the amount of any application screening fee (if any) to be imposed by Developer; information to be provided to applicants, including conditions and restrictions applicable to purchase of the Unit; maximum qualifying income; requirement for annual income recertification; and preferences required by the City. 3.2 Income Certification, Non -Discrimination. a. Pursuant to subsection (b) below, Developer shall determine and certify 394\09\3950092.2 the incomes of the buyer of the Unit pursuant to this Agreement. b. Developer will obtain, complete and maintain on file, immediately prior to execution of the purchase agreement thereafter, income certifications for buyer of the Unit. Developer shall make a good faith effort to verify that the income statement provided by the buyer is accurate by taking two or more or the following steps as a part of the verification process: 1) most current 3 months' pay check stubs; (2) obtaining most current tax returns; (3) conduct credit agencies or similar search, the result shall be used solely for income certification purposes; (4) obtaining most current 3 months' bank statements; (5) Obtaining an income verification form from a current employer; (6) obtaining an income certification form from the Social Security Administration and/or the California Department of Social Services if an adult member in the buyer's household receives assistance from either of such agencies; or (7) if buyer is unemployed and has no such tax return, obtaining another form of independent verification. Developer shall make copies of buyer's income certifications available to the City upon request. 3.3 Records and Reporting. a. Developer shall maintain complete, accurate and current records pertaining to the sale of the Unit, and shall permit any duly authorized representative of the City to inspect the records, including but not limited to records pertaining to income and household size of the buyer of the Unit, upon reasonable prior notice during normal business hours. Developer shall retain copies of all materials obtained or produced with respect to sale of the Units for a period or at least five (5) years. b. The City shall notify Developer of any records it deems insufficient. Developer shall have thirty (30) calendar days after the receipt of such a notice to correct any deficiency in the records specified by the City in such notice, or if a period longer than thirty (30) days is reasonably necessary to correct the deficiency, then Developer shall begin to correct the deficiency within thirty (30) days and correct the deficiency within sixty (60) days, or as otherwise agreed by City. 4. Operation of the Development 4.1 Residential Use. The Property and the Unit shall be used only for residential purposes and home occupations as provided in Sections 14(a) and (b) of Table 19.20.020 of the Cupertino Municipal Code and the Unit shall be maintained as aresidence for the Term of this Agreement. No part of the Unit shall be leased except with the prior written consent of the City. 4.2 Compliance Monitoring Reimbursement. Until such time as Developer has completed the initial sale of the Units to Eligible Households, Developer shall timely reimburse the City for the costs of monitoring compliance with the BMR Manual and this Agreement (provided that Developer's reimbursement obligation shall not exceed $5,000 annually). Such reimbursable costs will be documented by invoices that the City submits to Developer pursuant to 394\09\3950092.2 typical City billing practices. 5. Miscellaneous 5.1 Assignment. This Agreement shall bind any successor, heir or assign of the Units throughout the Term, whether a change in interest occurs voluntary or involuntarily by operation of law, or otherwise except as expressly released by the City. The City approved the Development on the basis of and in consideration of the BMR Condition and would not have done so otherwise. Notwithstanding the foregoing, Developer may not assign its obligations under this Agreement without the written consent of the City which consent shall not be unreasonably withheld or delayed if the assignment is to a reputable and creditworthy homebuilder, as determined by the City in its reasonable discretion. 5.2 Relationship of BMR Manual and this Agreement. This Agreement and the BMR Manual regulate the Unit. Developer agrees that the BMR Manual governs the operation of the Unit, and in the event of any inconsistency between the BMR Manual and this Agreement, the BMR Manual will control. 5.3 Covenants Running with the Land. The City and Developer hereby declare that it is their express intent that the covenants and restrictions set forth in this Agreement shall apply to and bind Developer and its administrators, successors, transferees, and assignees having or acquiring any right, title or interest in or to any part or the Property, and shall run with and burden such portions of Property until the end of the relevant Term. Until all or portions of the Property are released from this Agreement, each and every contract, deed or other instrument hereafter executed covering or conveying the Property, or any portion thereof, shall be held conclusively to have been executed, delivered, and accepted subject to such covenants and restrictions contained in this Agreement, regardless of whether such covenants or restrictions are set forth in such contract deed or other instrument. In the event of foreclosure or transfer by deed - in -lieu of all or any portion of the Property prior to completion and sale of the Unit, title to all or any portion of the Property shall be taken subject to this Agreement. Developer acknowledges that compliance with this Agreement is a requirement of the Project Approvals, and that no event offoreclosure or trustee's sale may remove these requirements from the Property. Notwithstanding anything to the contrary in this Section 5.3, City and Developer agree as follows: (1) at the close of escrow for all affordable Units within a phase in the Development (each building being its own separate phase), then this Agreement shall automatically be released from title to all market rate units in that phase of the Development without further action required by the City or Developer; (2) when Developer has closed escrow with an Eligible Household for the last affordable Unit, Developer shall thereafter automatically be released from all obligations under this Agreement without further action required by the City or Developer; and (3) without limiting the effect of clause (1) immediately preceding, when the close of escrow for all Units have occurred with the Resale Restriction and City Deed of Trust having been recorded against all such Units, then at Developer's request, the City and Developer shall execute, acknowledge and record a termination of this Agreement, such that this Agreement shall thereafter 394\09\3950092.2 no longer be in effect. 5.4 Indemnification. a. To the fullest extent allowed by law, Developer shall indemnify and hold harmless City, its City Council boards and commissions, officers, officials, agents, employees, consultants and volunteers (the "Indemnities") from and against any liability, loss, damage, expense, and cost (including reasonable legal fees and costs of litigation or arbitration), resulting from injury to or death of any person, damage to property, or liability for other claims, stop notices, demands, causes of actions and actions, to the extent arising out of or in any way related to Developer's performance or nonperformance of its duties under this Agreement. Developer shall, at its own cost and expense, defend any and all such claims, actions, suits or legal proceedings that may be brought against the City or any of the Indemnities (with counsel acceptable to City) in connection with this Agreement or arising out of Developer's performance or nonperformance of its duties and obligations hereunder, except to the extent any of the foregoing is caused by the negligence or willful misconduct of the City or the City's agents, employees and independent contractors. b. To the fullest extent allowed by law, City shall indemnify and hold harmless Developer and its officers, agents, employees and contractors (the "Owner Indemnities") from and against any liability, loss, damage, expense, and cost (including reasonable legal fees and costs of litigation or arbitration), to the extent arising out of or in any way related to any violation of law associated with the priority point placement system in the BMR Manual. c. Each Party shall notify the other Party as soon as possible and in writing within twenty-four (24) business hours of any claim or damage related to activities performed under this Agreement. The Parties shall cooperate with each other in the investigation and disposition of any claim arising out of the activities under this Agreement, provided that nothing shall require either Party to disclose any documents, records or communications that are protected under the attorney -client privilege or attorney work product privilege. d. The provisions of this Section shall survive the expiration of the Term and any release ofpart or all of the Property from the burdens of this Agreement. 5.5 Default. a. Failure by Developer to perform any obligation under this Agreement shall constitute a "Default" by the Developer under this Agreement. b. The City shall provide written notice to the Developer specifying the nature of the violation giving rise to the Default. If the violation is not corrected to the satisfaction of the City within a reasonable period of time, in no event longer than thirty (30) days after the date the notice is mailed, except as provided herein for specific Defaults, or within such further time as the City reasonably determines is necessary to correct the violation, the City may declare a Default under this Agreement by written notice to the Developer. Notwithstanding anything to the contrary contained herein, the City agrees that any cure of any Default made or tendered by a lender of Developer shall be deemed to be a cure by the Developer, and shall be 394\09\3950092.2 accepted or rejected on the same basis as if made or tendered by Developer; provided, however. that any such lender shall not have any obligation to effectuate such cure. c. The occurrence of any Default following the expiration or all applicable notice and cure periods will give the City the right to proceed with any and all remedies available at law and equity. The Parties acknowledge that damages alone would be an inadequate remedy for any breach of the provisions of this Agreement, and agree that the obligation of the Parties hereunder may be enforced in equity including, without limitation, specific performance and injunctive relief. 5.6 Entire Understanding of the Parties. This Agreement constitutes the entire Agreement between the Parties and no modification shall be binding unless reduced to writing and signed by the Parties. If there is any conflict between this Agreement and any other applicable agreements or Project Approvals, the most restrictive provisions, as determined by the City in its sole discretion, shall control. 5.7 Each Party's Role in Drafting the Agreement. Each Party to this Agreement has had an opportunity to review the Agreement, confer with legal counsel regarding the meaning of the Agreement, and negotiate revisions of the Agreement. Accordingly, neither Party shall rely upon Civil Code Section 1654 in order to interpret any uncertainty in the meaning of the Agreement. 5.8 Recording and Filing. The City and Developer shall cause this Agreement, and all amendments and supplements to it, to be recorded in the Official Records or the County of Santa Clara. 5.9 Governing Law and Venue. This Agreement shall be governed by the laws of the State of California. Venue shall be the County of Santa Clara. 5.10 Title of Parts and Sections. Any titles or the sections or subsections of this Agreement are intended for convenience or reference only and shall be disregarded in interpreting any part of the Agreement's provisions. 5.11 Fees and Costs. In any action brought to enforce this Agreement, the prevailing party shall be entitled to all costs and expenses of suit, including reasonable attorneys' fees. This section shall be interpreted in accordance with California Civil Code Section 1717 and judicial decisions interpreting that statute. 5.12 Waiver of Requirements. No waiver of the requirements of this Agreement shall occur unless expressly waived by the City in writing. No waiver will be implied from any delay or failure by the City to take action on any breach or Default of Developer or to pursue any remedy permitted under this Agreement or applicable law. Any extension of time granted to Developer to perform any obligation under this Agreement shall not operate as a waiver or release from any of its obligations under this Agreement. Consent by the City to any act or omission by Developer shall not be construed to be consent to any other or subsequent act or omission or to waive the requirement for the City's written consent to future waivers. 5.13 Notices. Any notice requirement set forth herein shall be deemed to be satisfied 394\09\3950092.2 one business day after deposit with federal express or another reputable commercial carrier or three (3) days after mailing of the notice first-class United States certified mail postage prepaid, addressed to the appropriate Party as follows: Developer: SummerHill Stevens Creek LLC 6101 Bollinger Canyon Road, Suite 425 San Ramon, CA 94583 Attn: Senior Vice President of Development and to: SummerHill Stevens Creek LLC 777 California Avenue Palo Alto, CA 94304 Attn: General Counsel City: City of Cupertino 10300 Torre Ave Cupertino, CA 95014 Attn: City Manager and to: Aleshire & Wynder LLP 1970 Broadway, Suite 920 Oakland, California 94612 Attn: Floy Andrews, Interim City Attorney Such written notices, demands and communications may be sent in the same manner to such other addresses as the affected Party may from time to time designate by mail as provided in this Section. Receipt shall be deemed to have occurred on the date shown on a written receipt as the date or delivery or refusal of delivery (or attempted delivery if undeliverable). 5.14 Severability. Except to the extent that it would frustrate the Parties' intent in entering into this Agreement, if any provision of this Agreement shall be deemed invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining portions of this Agreement shall not in any way be affected or impaired thereby. 5.15 Multiple Originals; Counterparts. This Agreement may be executed in multiple 394\09\3950092.2 originals, each of which is deemed to be an original, and may be signed in counterparts 5.16 Amendments. This Agreement may be amended by the City and Developer in writing. The City authorizes the City Manager to execute this Agreement and has authorized the City Manager and the Director to grant such approvals or consents as are required by this Agreement, and any consents or approval shall not be unreasonably withheld or made. 5.17 Third Party Beneficiaries. This Agreement shall not be construed to be an agreement for the benefit of any third party or parties and no third party or parties shall have any claim or right of action under this Agreement. 5.18 Mortgagee Protection. Nothing in this Agreement shall be interpreted to render invalid any deed of trust or mortgage on any portion of the Property. No beneficiary under any deed of trust, purchaser at a foreclosure sale of such deed of trust, or grantee of a deed in lieu of foreclosure shall be obligated to cure any default of the previous owner of the Property, unless such obligation is expressly assumed in writing. [Signatures on following page] 394\09\3950092.2 CITY: CITY OF CUPERTINO, a municipal corporation By: Jl Z k. rs c1i7 APPROVED AS TO FORM AND LEGALITY BY: b1l V. v o c C c Mug•. � ,/ /� ' Ffriy MiAe 1 Wo. I Sonror Awakt(- ( 7 Prt' v;wq Date: / _ _ DEVELOPER: SUMMERHILL STEVENS CREEK LLC, a California limited liability company By: SUMMERHILL HOMES LLC, a California limited liability company, Its Manager By: Nai��. Kevin Ebrahimi Its: Sr. VP of Development By: Name: Jason Biggs Secretary Its: 394\09\3950092.2 A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. STATE OF CALIFORNIA COUNTY OF L O 141 COST A On 3u ly 22, Zo 2 W ,before me, gut b t LE P' 1 A ,Notary Public, personally appeared IAc vi n E jRA *ti mi and i o-bs , who 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 Ue/sly/they executed the same in //their authorized capacity(ies), and that by k/ke/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify UNDER PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. JUDY LEPULU Notary Public - California *my Contra Costa County Name: 5'4fl `� o -E FIA Y u Commission # 2549184 Name: Notary Public Comm. Expires Mar 30, 2030 r 394\09\3950092.2 4 t� CALIFORNIA ACKNOWLEDGMENT CIVIL CODE § 1189 A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. State of California County of d CI( 1 J} JCS ;YCf�-� On before me, Uv ` __ Date M I Here Insert Name and Title of the Officer personally appeared Name(s) of Signer(s) who proved to me on the basis of satisfactory evidence to be the persons whose name(is re subscribed to the within instrument and acknowledged to me that h __s e hey executed the same in hi her heir authorized capacity es), and that by his/her/their sign s) on the instrument the�erso ), or the entity upon behalf of which the person(s) acted, executed the instrument. 4� MELISSA ROBERTSON Notary Public - California Santa Clara County Commission # 2548768 IL ; " My Comm. Expires Feb 24, 2030 Place Notary Seal and/or Stamp Above I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature Signature of Notary Public Completing this information can deter alteration of the document or fraudulent reattachment of this form to an unintended document. Description of Attached Document Title or Type of Document: Document Date: Signer(s) Other Than Named Above: Capacity(ies) Claimed by Signer(s) Signer's Name: ❑ Corporate Officer — Title(s): ❑ Partner — ❑ Limited ❑ General ❑ Individual O Attorney in Fact ❑ Trustee ❑ Guardian or Conservator ❑ Other: Signer is Representing: ©2019 National Notary Association Number of Pages: Signer's Name: ❑ Corporate Officer — Title(s): ❑ Partner — ❑ Limited ❑ General ❑ Individual ❑ Attorney in Fact ❑ Trustee ❑ Guardian or Conservator ❑ Other: Signer is Representing: o ,7 - •'�1M l�tl�:R i EXHIBIT A LEGAL DESCRIPTION OF PROPERTY LEGAL DEScRIPUON Real property in the City of Cupertino, County of Santa Clara, State of California, described as follows: NEW PARCEL B, AS SHOWN ON LOT LINE ADJUSTMENT, AS EVIDENCED BY DOCUMENT RECORDED MARCH 07, 2025, AS DOCUMENT NO. 25774418 OF OFFICIAL RECORDS, BE MORE PARTICULARLY DESCRIBED AS FO1 L 0OWSS: BEING ALL OF PARCEL B, AS SAID PARCEL IS DESCRIBED IN THAT LOT LINE ADJUSTMENT RECORDED SEPTEMBER 2, 1993, FILED IN BOOK M980 OF OFFICIAL RECORDS, AT PAGE 2060, AS DOCUMENT NO. 12082642, SANTA CLARACOUNTY RECORDS, TOGETHER WITH A PORTION OF PARCEL A, AS SAID PARCEL IS DESCRIBED IN THAT LOT LINE ADJUSTMENT RECORDED JULY 23, 2012 AS (DOCUMENT NO. 21757773, SANTA CLARA COUNTY RECORDS, MORE PARTICULARLY DESCRIBED AS FOLLOWS: BEGINNING AT THE SOUTHEAST CORNER OF SAID PARCEL 81 SAID POINT BEING THE SOUTHWIEST CORNER OF SAID PARCEL A; THENCE, FROM SAID POINT OF BEGINNING, ALONG THE SOUTH LINE OF SAID PARCEL B, SOUTH 89°57`15" WEST 168.00 FEET TO THE SOUTHWEST CORNER THEREOF; THENCE, ALONG THE WEST LINE OF SAID PARCEL B THE FOLLOWING THREE (3) COURSES: 1) NORTH 00°00-35" WEST 224.63 FEET, 2) SOUTH 89°57'15" WEST 133.74 FEET, 3) NORTH 00°00`35" WEST 185.00 FEET TO A POINT ON THE SOUTIH LINE OF STEVENS CREEK BOULEVARD AS SHOWN ON SAID LOT LINE ADJUSTMENTS; THENCE, ALONG SAID SOUTH LINE OF STEVENS CREEK BOULEVARD, NORTH 89°S7'15" EAST 479.74 FEET TO THE NORTHWEST CORNER OF ANOTHER PARCEL B, AS SAID PARCEL IS DESCRIBED IN SAID LOT LINE ADJUSTMENT (DOCUMENT NO. 21757773); THENCE, ALONG THE WEST LINE OF SAID PARCEL B (DOCUMENT NO. 21757773) AND THE SOUTHERLY PROJECTION THEREOF, SOUTH 00°02"45" EAST 200.79 FEET; THENCE, SOUTH 89°5925" WEST 178.13 FEET; THENCE, SOUTH ,00°0035" EAST 208.95 FEET TO THE POINT OF BEGINNING, EXCEPTING THEREFROM THE UNDERGROUND WATER RIGHTS WITHOUT RIGHTS OF SURFACE ENTRY AS CONVEYED BY DOCUMENT RECORDED MAY 10, 1968, AS DOCUMENT NO. 3414435 AND IN BOOK 8119, PAGE 208, OF OFFICIAL RECORDS. ALSO EXCEPTING THEREFROM THE UNDERGROUND WATER RIGHTS WITHOUT RIGHTS OF SURFACE ENTRY AS CONVEYED BY DOCUMENT RECORDED FEBRUARY 26, 1970, AS DOCUMENT NO. 3768782 AND IN BOOK 8839, PAGE 594, OF OFFICIAL RECORDS. 394\09\3950092.2 O 0 U U CC cat cat cat N CJ 69 O o 0000 0000 CU U CQ N 0.1 U Cq U W — N M 't cat L cat 00 t � eat C) 00 •o v v o woaaaca N M 7 cat cat cat a O N N U at � "CC o cat Cat Cat t — vi O\ 69 Cat cat cat 'at - N •" 00 ss N N C) N M V 'I'i 0 0 0 0 0 v O C 6A -d o x "C C) o c0 0 C 0ci- a Y O o a U C, E Rai y Q T O �' OR N C N OU❑ cXd C 4) V co tl) L o 0 N. in C C N 00 Q � M N a d O t9 O T t O C C) 0s R tm E •ro. N o Ct C) E G a` N N N 64 D 0 — .-. O v3 5c C) uJ O O C) C i y4 a = C) 00 En O c 0 v O rn — Q O � a 0 C) EE O N 0 N 3 00 U) O Ct dJO E N C) u: U) Cr) O 2 E O. O C d1 C N CC CC O ti Cat ro x b 9 N CC cat q 3 >. 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M N o 2 00 C, C)v+, E o a Cc) 00 o 00 5 d t aZ{ (C E a 00 o a cn d N- 69 R ow 00 � C C) C oo.E O o o c a= N 0 o 00 OO O d c C R x o - p N _ Q L 'o U C t:- O <I N EG> N U) Cl) ,c) (no <I 0 d C m C) C) C) 1O N C 'p C O CO CO COCO v U U CO q 3 - U . b No � > .yb y y o � C o •v c > d Co X aw 000 q CO O G> U 0-.0 C CO [ > 6 C1 o. iy Y x o c E CO CO 00 ' CO N C Cn O Cl z�� N O N N. >- = C 0 C 0 CD C 0 S T 0 C) CC Q C) a Exhibit D: Resale Restriction RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: City of Cupertino Community Development Department 10300 Torre Avenue Cupertino, CA 95014 Attn: Senior Housing Planner No fee for recording pursuant to Government Code Section 27383 SPACE ABOVE FOR RECORDER'S USE OCCUPANCY, REFINANCING, AND RESALE RESTRICTION AGREEMENT WITH OPTION TO PURCHASE (City of Cupertino) NOTICE: THIS AGREEMENT RESTRICTS THE OCCUPANCY, REFINANCING, RESALE, AND TRANSFER OF YOUR PROPERTY. Date: Owner: Address of Home: Income Category of Owner: Purchase Price of Home ("Owner's Base Price"): Median Income on Agreement Date: RECITALS This Occupancy, Refinancing, and Resale Restriction Agreement with Option to Purchase ("Agreement") is entered into by and between , a single person (collectively, the "Owner") and the City of Cupertino, a municipal corporation, regarding certain improved real property located at , Cupertino, CA 95014 (the "Premises"). A. The Premises are described more fully on Exhibit A attached hereto and incorporated herein by reference and are subject to the terms and conditions set forth in this Agreement. B. , a California (the "Developer") entered into a Declaration of Resale Controls dated and recorded in the official records on as document , for housing development (the "Development"), (collectively, the "Legal Requirements"). C. Owner is an eligible -income purchaser, intends to purchase the Premises from the Developer, and thereafter, live in the Premises as an owner -occupant, and agrees to maintain the Premises as Owner's principal residence. D. The Legal Requirements have enabled the Owner to purchase a home at a price that is affordable to eligible households (the "Purchase Price"). The Purchase Price is lower than the unrestricted fair market value of the Premises, and other un-restricted units within the Development. E. Pursuant to the Legal Requirements, the City is required to ensure the continued affordability of the Premises as an Affordable Unit, and the City therefore requires the Owner to execute this Agreement as a condition of the Owner's purchase of the Premises. The purpose of this Agreement is to place occupancy, refinancing, and resale controls on the Premises, to require the payment of any excess proceeds of sale or excess rental proceeds to the City. The Owner's obligations to make such payments (if any) to the City are evidenced by a promissory note in favor of the City (the "City Promissory Note") and are secured by a deed of trust recorded concurrently herewith (the "City Deed of Trust"). This Agreement also provides the City an option to purchase the Premises at a restricted price. The Owner has agreed to execute and comply with this Agreement in consideration of the City's agreement to approve the sale of the Premises to the Owner at an affordable price which is below the unrestricted fair market value of the Premises. F. In order to maintain and preserve the Premises as housing affordable to eligible purchasers, it is necessary to restrict the occupancy, refinancing, and resale price of the Premises as provided in this Agreement. Such controls prevent initial and subsequent purchasers from using the Premises for purposes incompatible with the Legal Requirements and realizing unwarranted gains from sales of the Premises at unrestricted prices. The terms and conditions of this Agreement provide the necessary occupancy, refinancing, and resale controls to ensure that the Premises are used, maintained, and preserved as housing affordable to eligible purchasers. G. The Premises, subject to such occupancy, refinancing, and resale controls, constitute a valuable community resource by providing decent, safe, and sanitary housing to eligible purchasers 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 the occupancy, refinancing, and resale controls by means of this Agreement. H. Pursuant to Health and Safety Code Section 33413(b)(2)(A)(i), specified percentages of all new and substantially rehabilitated dwelling units developed in redevelopment project areas in a local jurisdiction shall be available at affordable housing cost to persons and families of moderate income and to very low income households, and such requirements shall be set forth in recorded covenants running with the land, enforceable by the City or the Redevelopment Agency of the City. This Agreement is intended to implement this requirement of law, if applicable, and to cause the Premises to be eligible for redevelopment housing production credit pursuant to Section 33413(b)(2)(A)(i). I. The Owner is receiving the following purchase money loans: Name of Lender Amount All purchase money loans are, collectively, the "First Lender Loan." All lenders of purchase money loans are, collectively, the "First Lender." The First Lender Loan is secured by one deed of trust executed by the Owner in favor of the First Lender and recorded in the County of Santa Clara concurrently with this Agreement (collectively, the "First Lender Deed of Trust"). J. This Agreement and the accompanying City Note are secured by the City Deed of Trust. This Agreement also ensures that the Owner complies with terms of the City Note and City Deed of Trust. This Agreement shall be senior to the lien of the First Lender Deed of Trust. The City Deed of Trust shall be subordinate to the lien of the First Lender Deed of Trust. NOW, THEREFORE, IN CONSIDERATION OF THE SUBSTANTIAL ECONOMIC BENEFITS INURING TO OWNER AND THE PUBLIC PURPOSES TO BE ACHIEVED UNDER THE LEGAL REQUIREMENTS, OWNER HEREBY GRANTS TO THE CITY THIS OPTION ON THE FOLLOWING TERMS AND CONDITIONS. - - - 1. Definitions and Exhibits. a. The following terms are specially defined for this Agreement, and their definitions can be found in the sections indicated below: "Advances" - paragraph 11 .c ii. "Administrative Fee" - paragraph 6.d iii. "Agreement" - first sentence of the Agreement on page 1 iv. "Assignee" - paragraph 6.b v. "City" - first sentence of the Agreement on page 1 vi. "City Deed of Trust" - Recital D vii. "City Note" - Recital D viii. "City Response Notice" — paragraph 9 ix. "Default" — paragraph 18 x. "Domestic Partners" — paragraph 5.b xi. "Eligible Capital Improvements" — paragraph 12.a xii. "Eligible Purchaser" — paragraph 13.b xiii. "Excess Rental Proceeds" — paragraph 3 xiv. "Excess Sales Proceeds" — paragraph 14 xv. "Fair Market Value" — paragraph 12.b xvi. "First Lender" — Recital H xvii. "First Lender Deed of Trust" - Recital H xviii. "First Lender Loan" — Recital H xix. "HCD" — paragraph 12.a xx. "HUD" — paragraph 24 xxi. "Indexed Price" — paragraph 12.a xxii. "Inheriting Owner: - paragraph 5.c xxiii. "Legal Requirements" — Recital B xxiv. "Limited Rent" — paragraph 3 xxv. "Maximum Restricted Resale Price" — paragraph 12 xxvi. "Median Income" — paragraph 12.a xxvii. "Notice of Death of Owner" — paragraph 5.c xxviii. "Notice of Intent to Transfer" — paragraph 8.a xxix. "Option" — paragraph 6.a xxx. "Owner" - first sentence of the Agreement on page 1 xxxi. "Permitted Encumbrance Amount" — paragraph 16.b xxxii. "Premises" - first sentence of the Agreement on page 1 xxxiii. "Program" - Recital B xxxiv. "Proposed Purchaser" — paragraph 13.a xxxv. "Purchase Price" — Recital D xxxvi. "Purchase Subsidy" - Recital D xxxvii. "Refinance Notice" — paragraph 16.b xxxviii. "Special Assessments" — paragraph 12.a xxxix. "Term" — paragraph 17 xl. "Transfer" — paragraph 5.a b. The following exhibits are attached to this Agreement: i. Exhibit A: Legal Description of Premises ii. Exhibit B: Form of Owner Occupancy Certification iii. Exhibit C: Form of Owner's Notice of Intent to Transfer iv. Exhibit D: Form of Owner Acknowledgement of City Response Notice v. Exhibit E: Form of Request for City Approval of Improvements to the Premises vi. Exhibit F: Form of Refinance Notice 2. Owner Occupancy Required. The Owner certifies that: (i) the financial and other information previously provided in order to qualify to purchase the Premises are true and correct as of the date first written above; and (ii) Owner shall occupy the Premises as the Owner's principal place of residence within sixty (60) days of the date of this Agreement. Failure by the Owner to occupy the Premises as the Owner's principal place of residence shall constitute a Default under this Agreement for which the City may exercise its Option. The Owner shall be considered as occupying the Premises if the Owner is living in the Premises for at least ten (10) months out of each calendar year. The Owner shall provide an annual written certification in the form shown in the attached Exhibit B, to the City that the Owner is occupying the Premises as his or her principal place of residence. Without limiting the generality of the foregoing, any absence from the Premises by Owner for a period of sixty (60) or more consecutive days shall be deemed an abandonment of the Premises as the principal residence of Owner, in violation of the conditions of this paragraph. 3. No Renting or Leasing of Premises. The Owner shall not rent or lease the Premises to another party. The Owner may apply to the City for written approval of a temporary and limited exception to the leasing prohibition of this paragraph in the event of extended hospitalization or convalescent care of Owner, or other hardship circumstance, to be determined by the City. Rentals approved by the City shall not exceed twelve (12) months, shall be to a moderate income tenant (with income eligibility certified by the City), and rent shall not exceed the Owner's monthly cost of mortgage payments, property taxes, homeowners' association fees, and insurance ("Limited Rent"). Any rental or lease of the Premises in violation of this Agreement is prohibited, and shall be a Default by Owner under this Agreement for which the City may exercise its Option. The Owner further agrees that, in the event the Owner rents or leases the Premises to a third party in violation of this paragraph, any excess rents paid to the Owner by the lessee over the Limited Rent ("Excess Rental Proceeds") shall be due and payable to the City immediately upon receipt thereof by the Owner. Such Excess Rental Proceeds shall be considered a recourse debt of the Owner to the City, which the City may collect by legal action against the Owner, including by foreclosure under the City Deed of Trust. 4. Maintenance and Insurance Requirements; Insurance Proceeds and Condemnation Awards; Right of Entry. a. The Owner shall maintain the Premises, including landscaping, in good repair and in a neat, clean and orderly condition and in accordance with all applicable laws and regulations of all federal, state, county, municipal, and other governmental agencies. The Owner shall not commit waste or permit deterioration of the Premises. b. The Owner shall not permit any condition to exist on the Premises that is defined as a nuisance, nor shall the Owner permit the Premises to be used for the commission of — any -misdemeanor or felony. - c. The Owner shall maintain a standard all risk property insurance policy equal to the replacement value of the Premises. The insurance policy shall be maintained and adjusted in accordance with the City's Policy and Procedures Manual for Administering Deed Restricted Affordable Housing Units. Additional insurance requirements are set forth in the City Deed of Trust. d. Entry by City. Owner hereby grants to the City and its duly authorized representatives the right to enter the Premises at reasonable times and in a reasonable manner, upon reasonable notice to Owner, for purposes of inspecting the Premises to determine compliance with the City Note, this Agreement, and the City Deed of Trust. e. Insurance and Condemnation Proceeds. In the event the Premises are destroyed and insurance proceeds are distributed to Owner instead of being used to rebuild or repair the Premises, or in the event of condemnation, if the proceeds thereof are distributed to Owner, the Owner shall pay the City the portion of any insurance or condemnation proceeds which is in excess of the Maximum Restricted Resale Price. 5. Transfer and Sale Restrictions. a. Transfer. Any Transfer of the Premises will be subject to the provisions of this Agreement including, without limitation, exercise of the Option described in paragraph 6 below. "Transfer" means any sale, assignment or transfer, voluntary or involuntary, of any interest in the Premises, including, but not limited to, a fee simple interest, a joint tenancy interest, a life estate, a leasehold interest (unless approved pursuant to paragraph 3 of this Agreement), an interest evidenced by a land contract by which possession of the Premises are transferred and Owner retains title, or a deed of trust. Any Transfer that does not satisfy the provisions of this Agreement is prohibited and shall constitute a Default for which the City may exercise its Option. b. Permitted Transfer. Notwithstanding paragraph 5.a, the following shall not be considered a Transfer for the purposes of this Agreement, but all such transferees shall continue to be bound by this Agreement: (i) a Transfer to an existing spouse or Domestic Partner who is also an obligor under the City Note; (ii) a Transfer to a spouse or Domestic Partner where the spouse or Domestic Partner becomes the co-owner of the Premises, (iii) a Transfer between spouses as part of a marriage dissolution proceeding, or between Domestic Partners as part of the dissolution of a domestic partnership; (iv) a Transfer by Owner into an inter vivos trust in which Owner is the beneficiary; (v) a Transfer by Owner to an existing spouse or Domestic Partner of Owner by devise or inheritance following the death of Owner; (vi) Transfer by operation of law on the death of a joint tenant; (vii) refinance of the First Lender Loan in accordance with paragraph 16 of this Agreement, or (viii) Transfer by deed of trust subordinate to the City Deed of Trust in accordance with paragraph 16 of this Agreement; provided, however, that Owner shall provide written notice of all such transfers to the City; and Owner shall continue to occupy the Premises as his or her principal place of residence (except where the transfer occurs pursuant to subparagraph (iii) above, in which event the transferee shall owner -occupy the Premises). For purposes of this paragraph, "Domestic Partners" shall mean two unmarried people, at least eighteen (l 8) -years of age, who have -lived together continuously for at least one (1) year and who are jointly responsible for basic living expenses incurred during their domestic partnership. Domestic Partners may not be persons related to each other by blood or adoption such that their marriage would be barred in the state of California. For purposes of this paragraph, an individual shall be considered a domestic partner of Owner upon presentation of an affidavit or other acceptable evidence by Owner to the City. c. Inheritance. In the event a Transfer occurs by devise or inheritance due to death of the Owner, the administrator of the Owner's estate or the person inheriting the Premises shall provide written notice to the City of the Owner's death within thirty (30) days of the date of death (the "Notice of Death of Owner"). If more than one person has inherited the Premises, the notice shall state which inheriting person, if any, desires to occupy the Premises as his or her principal place of residence (the "Inheriting Owner"), or that no inheriting person wishes to occupy the Premises, and the following procedures shall apply: i. If the Notice of Death of Owner states that no inheriting person wishes to occupy the Premises, the inheriting owner shall be required to Transfer the Premises to an Eligible Purchaser at a price not exceed the Maximum Restricted Resale Price, pursuant to the procedures set forth in paragraphs 8 through 15 below, and the City may exercise its Option to purchase the Premises. ii. The Inheriting Owner shall provide the City with income information, to be verified by the City, so that the City may determine if the Inheriting Owner is an Eligible Purchaser. If the Inheriting Owner fails to provide required financial information and/or documentation, he or she shall be deemed not to qualify as an Eligible Purchaser. If the Inheriting Owner qualifies as an Eligible Purchaser, he or she shall succeed to the Owner's interest and obligations under this Agreement, the City Note, and the City Deed of Trust and new documents shall be executed between the Inheriting Owner and the City and recorded against the Premises. If the Inheriting Owner fails to qualify as an Eligible Purchaser, he or she shall be required to Transfer the Premises to an Eligible Purchaser at a price not exceeding the Maximum Restricted Resale Price, pursuant to the procedures set forth in paragraphs 8 through 15 below, and the City may exercise its Option; provided, however that the Inheriting Owner may own the Premises for up to twelve (12) months prior to providing an Owner's Notice of Intent to Sell to the City pursuant to paragraph 8 below, and provided further that the Inheriting Owner remains in compliance with the requirements of this Agreement and the City Deed of Trust. The Inheriting Owner shall not be required to occupy the Premises during this twelve (12) month time period, but shall not rent the Premises except as provided in paragraph 3 above. iii. Failure of an Inheriting Owner to follow the procedures and file the notices described in this paragraph 5 shall constitute a Default under this Agreement. 6. Grant of Option to Purchase; Assignment of Option by City. a. In consideration of the economic benefits received by the Owner resulting from purchase and ownership of the Premises at an affordable price, Owner hereby grants and gives to the City a right to purchase all of Owner's right, title and interest in and to the Premises upon the occurrence of events specified in paragraph 7 of this Agreement ("Option"), subject to the terms and conditions included in this Agreement. - - - b. The City may assign the Option to another government entity or to another public agency or non-profit organization or to an Eligible Purchaser who meets the eligibility qualifications established by the City under the Program (the "Assignee"). c. If the City or its Assignee exercises the Option, the Owner shall pay the City an administrative fee equal to two percent (2%) of the sales price (the "Administrative Fee") at close of escrow. d. The City agrees that the Option shall only be exercised by the City or an Assignee for the purposes of retaining the Premises as an affordable housing unit pursuant to the Legal Requirements. e. In no event shall the City become liable or obligated in any manner to Owner by reason of the assignment of the Option, nor shall the City be in any way liable or obligated to Owner for any failure of the Assignee to consummate a purchase of the Premises or to comply with the terms of this Option, or any escrow instructions or agreement for the purchase of the Premises. 7. Events Giving Rise to Right to Exercise Option. a. The City shall have the right to exercise or to assign its Option upon the occurrence of either of the following events: i. Receipt by the City of a Notice of Intent to Transfer (defined in paragraph 8 below); or ii. A Default occurs as defined in paragraph 18 of this Agreement. b. If the City receives a Notice of Intent to Transfer, the City may exercise its Option pursuant to the procedures in paragraphs 8 through 12 of this Agreement. If a Default occurs, the City may exercise its Option pursuant to the procedures in paragraph 19 of this Agreement. c. The City's rights to exercise its Option shall survive any Transfer of the premises by the Owner in violation of this Agreement. Any actual or attempted Transfer of the premises in violation of the terms and conditions of this Option shall be a Default and shall be voidable at the election of the City. 8. Notice of Intended Transfer, Preparation of Premises for Sale. a. Notice of Intent to Transfer. In the event the Owner intends to transfer (including without limitation all Transfers as defined in paragraph 5) or vacate the Premises, the Owner shall promptly give the City written notice of such intent (the "Notice of Intent to Transfer") in the form shown in the attached Exhibit C. The Owner shall give the City the Notice of Intent to Transfer prior to retaining a real estate broker or notifying lenders of Owner's intent to —Transfer the Premises- and prior to listing of the Premises on the Multiple Listing Service. The Notice of Intent to Transfer shall be sent to the City by certified mail, return receipt requested at the address provided in paragraph 30 of this Agreement. The Notice of Intent to Transfer shall include the information necessary for the City to determine the Maximum Restricted Resale Price of the Premises, including the following information: the address of the Premises; ii. the date of purchase of the Premises by the Owner; iii. the Purchase Price paid by the Owner at the time of purchase; iv. a copy of the HUD -1 Settlement Statement or equivalent document from the close of escrow on the Owner's purchase of the Premises; v. if Owner has made Eligible Capital Improvements to the Premises, a description of the improvements, the date the improvements were made, a copy of the letter granting prior City approval of the improvements, and evidence of the cost of the improvements; vi. if the Owner has paid Special Assessments, a description of the Special Assessments from the homeowner's association and evidence that the Owner has paid the Special Assessment; vii. if the Owner believes the Premises are in good repair, with no deferred maintenance that would warrant a downward adjustment of the Indexed Price, a request for City inspection to verify good condition; viii. the date on which Owner intends to vacate the Premises; ix. the date the Premises will be placed on the market; and x. the name and phone number of the person to contact to schedule inspection of the Premises by the City. b. The Owner may not wish to contract with a real estate broker to sell the Premises until the Owner has received the City Response Notice pursuant to paragraph 9 below, as the services of a broker may not be required if the City exercises the Option to purchase the Premises and the City will charge an Administrative Fee that will be payable by the Owner. c. Following delivery to the City of the Notice of Intent to Transfer, the Owner shall prepare the Premises for sale, as follows: i. within fifteen (15) days of delivery of the Notice of Intent to Transfer, the Owner shall obtain and deliver to the City a current written report of inspection of the Premises by a licensed structural pest control operator; _ ii. within the sooner of (a) sixty (60) days from the date of delivery of the Notice of Intent to Transfer, or (b) two weeks prior to close of escrow on the Transfer, the Owner shall repair all damage noted in the pest report including damage caused by infestation or infection by wood -destroying pests; iii. within fifteen (15) days of the date of the Notice of Intent to Transfer, the Owner shall allow the City to inspect the Premises to determine its physical condition and, if requested by the City, following such inspection, the Owner shall obtain and deliver to the City a home inspection report prepared by a licensed home inspector; and iv. if the Premises are vacant, the Owner shall maintain utility connections (gas, electric and water) until the close of escrow on the Transfer; v. in the event of purchase of the Premises by the City or Assignee, the Owner shall permit a final walk-through of the Premises by the City or Assignee in the final three (3) days prior to close of escrow on the Transfer. 9. City Response to Owner's Notice of Intended Transfer The City shall respond in writing (the "City Response Notice") to the Notice of Intent to Transfer within thirty (30) days of City receipt of a complete Notice of Intent to Transfer that includes all information required under paragraph 8 above, including City receipt of the pest control report and home inspection report (if any) required pursuant to paragraph 8 above. The City Response Notice shall inform the Owner of the City's election to proceed under one of the following two alternatives: a. City Exercise of Option. The City Response Notice may notify the Owner that the City or an Assignee elects to exercise the Option to purchase the Premises. The City Response Notice shall include the City's calculation of the (i) Maximum Restricted Resale Price pursuant to paragraph 12 below to be paid by the City or Assignee and (ii) the amount of the Administrative Fee to be paid by the Owner. If the City assigns the Option to an Assignee, the City Response Notice shall be executed by the Assignee and shall notify the Owner that a Assignee is exercising the Option in lieu of the City. b. Owner Sale at a Restricted Sales Price to Eligible Purchaser. Alternatively, the City Response Notice may notify the Owner that the City will not exercise the Option to purchase the Premises. Upon receipt of such notice, the Owner may proceed to sell the Premises to an Eligible Purchaser at a price not to exceed the Maximum Restricted Resale Price, as set forth in paragraph 12, and pursuant to the procedure set forth in paragraph 13 below. In this event, the City Response Notice shall include the following information: (1) the maximum qualifying income for an Eligible Purchaser; (2) the certifications required of an Eligible Purchaser; and (3) the Maximum Restricted Resale Price the Owner may receive for the Premises, calculated by the City pursuant to paragraph 12 below. 10. Owner Acknowledgement of City Response Notice No later than seven (7) days following the date of receipt of the City Response Notice, the Owner shall acknowledge in writing to the City, in the form shown in the attached Exhibit D, that he/she has received the City Response Notice and still intends to Transfer the Premises. 11. City Purchase Option a. If the Owner provides the City with a Notice of Intent to Transfer, the City may exercise its Option to purchase the Premises for the Maximum Restricted Resale Price calculated pursuant to paragraph 12 of this Agreement. The Option may be exercised by the City or by an Assignee. b. Escrow. If the City Response Notice notifies the Owner that the City or a Assignee will exercise the Option to purchase the Premises, the City or the Assignee shall open an escrow account for the purchase of the Premises. Close of escrow shall take place on the date which is the later to occur of the following: (i) ninety (90) days after the date of the City Response Notice, or (b) ten (10) days after Owner has done all acts and executed all documents required for close of escrow, whichever is later. c. Deposit of Funds Into Escrow. Prior to the close of escrow, the City shall ensure that funds are deposited to pay the Maximum Restricted Resale Price for the Premises, minus the Administrative Fee and all sums due on the City Note, and minus all Advances previously paid by the City. "Advances" include any payment by the City of costs including, but not limited to, principal, interest, taxes, assessments, insurance premiums, homeowners' fees, and associated late fees, costs, interest, attorneys' fees, pest inspections, resale inspections, and other expenses related to the Premises, which Owner has failed to pay or has permitted to become delinquent or which are required to remove liens and encumbrances pursuant to subparagraph d below or which are otherwise due to City. Closing costs and title insurance shall be paid by City and Owner pursuant to the custom and practice in the County of Santa Clara at the time of the opening of escrow, or as may be provided otherwise by mutual agreement. Owner agrees to do all acts and execute all documents necessary to enable the close of escrow and transfer of the Premises to the City. d. Removal of Exceptions to Title. The Owner shall convey title to the Premises at the close of escrow free and clear of any mortgage, lien, or other encumbrance, unless approved in advance in writing by the City. If the amounts deposited into escrow by the City are not sufficient to satisfy all liens and encumbrances recorded against the Premises, then the Owner shall deposit into escrow the additional sums that are required to remove the liens and encumbrances. 12. Determination Of Maximum Restricted Resale Price If the City or its Assignee exercises the Option, or if Owner sells to an Eligible Purchaser, the Maximum Restricted Resale Price (the "Maximum Restricted Resale Price") that the Owner shall receive from the City, Assignee or Eligible Purchaser (or from any other sale or transfer by the Owner of the Premises) shall be no more than the lesser of (i) the Indexed Price of the Premises; or (ii) the Fair Market Value of the Premises. a. Indexed Price. The "Indexed Price" of the Premises means the original Purchase Price, as set forth on page 1 of this Agreement increased by the percentage of increase in the Median Income from the date of the original purchase of the Premises by the Owner to the date of receipt by the City of the Notice of Intent to Transfer, and, where applicable, adjusted pursuant to subsections (i) - (iii) below to reflect the value of Eligible Capital Improvements, Special Assessments, or the cost of deferred maintenance. "Median Income" shall refer to the median yearly income, adjusted for a household size of four, in Santa Clara County, as published by the California Department of Housing and Community Development ("HCD"), or, in the event such income determination is no longer published by HCD, or has not been updated for a period of at least eighteen (18) months, the City may use or develop such other reasonable method as it may choose in order to determine the median yearly income in Santa Clara County. The Median Income as of the date of this Agreement is shown on the first page of this Agreement. i. Eligible Capital Improvements. Where applicable, the Indexed Price shall include an upward adjustment reflecting the value of any substantial structural or permanent fixed improvements which the Owner has made to the Premises. No such adjustment shall be made except for improvements: (a) made or installed by the Owner which conform to applicable building codes; (b) approved in advance of installation by the City; and (c) whose initial costs were Two Thousand Dollars ($2,000) or more. Capital improvements meeting the above requirements are "Eligible Capital Improvements." A form for use in requesting City approval of an Eligible Capital Improvement is attached as Exhibit E. The adjustment to the Indexed Price for Eligible Capital Improvements shall be limited to the cost minus depreciation value of the Eligible Capital Improvements. ii. Special Assessments. Where applicable, the Indexed Price shall include an upward adjustment for the principal amount only of special assessments ("Special Assessments") (not including interest, finance charges, or penalties) paid by Owner to the Premises' homeowners' association to pay special repair or litigation costs assessed against all homeowners' association members, but only if such costs are actually paid by Owner, and subject to approval on a case -by -case basis by the City. iii. Repairs. The Indexed Price shall include a downward adjustment, where applicable, in an amount necessary to repair any violations of applicable building, plumbing, electric, fire or housing codes or any other provisions of the Building Code, as well as any other repairs needed to put the Premises into a "sellable condition." Items necessary to put a Premises into sellable condition shall be determined by the City, and may include cleaning, painting and making needed structural, mechanical, electrical, plumbing and fixed appliance repairs and other deferred maintenance repairs. b. Fair Market Value. In certain circumstances it may be necessary to determine the fair market value of the Premises without taking into account the resale restrictions imposed by this Agreement (the "Fair Market Value") where the parties wish to determine if the Indexed Price exceeds the Fair Market Value in order to determine the Maximum Restricted Resale Price. If it is necessary to determine the Fair Market Value of the Premises, it shall be determined by a certified MAT or other qualified real estate appraiser approved in advance by the City. If possible, the appraisal shall be based upon the sales prices of comparable properties sold in the market area during the preceding three month period. The cost of the appraisal shall be paid by the Owner, unless the appraisal is obtained from a new purchaser. In the event that the Owner has made Eligible Capital Improvements to the Premises which have increased the value of the Premises or if damage or deferred maintenance has occurred while the Owner owned the Premises which has decreased the value of the Premises, the appraisal shall specifically ascribe a value to these adjustment factors and state what the fair market value of the Premises would be without such adjustments by utilizing the procedures outlined in subparagraph a above for calculating the Indexed Price. Nothing in this section shall preclude the Owner and the City from establishing the Fair Market Value of the Premises by mutual agreement in lieu of an appraisal pursuant to this section. 13. Sale by Owner if City Does Not Exercise Option to Purchase In the event the City Response Notice notifies the Owner to proceed to sell the Premises to an Eligible Purchaser at a price not exceeding the Maximum Restricted Resale Price, the Owner may proceed to sell the Premises in compliance with the following requirements: a. Marketing. The Owner shall use bona fide good faith efforts to sell the Premises to an Eligible Purchaser in compliance with this paragraph, including listing the Premises on the Multiple Listing Service, keeping the Premises in an orderly condition, making the Premises available to show to agents and prospective buyers, and providing buyers with Eligible Purchaser requirements, including income qualifications and the City's form of disclosure statement summarizing the terms of the buyer's occupancy and resale restriction agreement with option to purchase. A proposed purchaser ("Proposed Purchaser") who the Owner believes will qualify as an Eligible Purchaser shall be referred to the City for an eligibility determination. b. Eligible Purchaser. A Proposed Purchaser shall qualify as an "Eligible Purchaser" if he or she meets the following requirements, as determined by the City or its agent: i. Income Eligibility. The combined maximum income for all household members of the Proposed Purchaser shall not exceed the income level designated in the Agency Response Notice. The maximum income level shall be based on the Income Category of the Owner as shown on page 1 of this Agreement and the maximum income for that income level for Santa Clara County, as published pursuant to California Code of Regulations, Title 25, Section 6932 or successor provision, and adjusted for household size. ii. Intent to Owner Occupy. The Proposed Purchaser shall certify that he or she will occupy the Premises as to his or her principal place of residence throughout his or her ownership. Co-signers are not required to occupy the Premises. iii. Agreement to Sign Resale Restriction Agreement and Other City Documents, and to Cooperate with the City. The Proposed Purchaser shall agree to sign a resale restriction agreement, promissory note and deed of trust restricting future resale of the Premises and shall agree to cooperate fully with the City in promptly providing all information requested by the City to assist the City in monitoring the Proposed Purchaser's compliance with the resale restriction agreement. Within fifteen (15) days of receipt of all information about the Proposed Purchaser required pursuant to this paragraph, the City shall notify the Owner and the Proposed Purchase whether or not the Proposed Purchaser has been determined by the City to qualify as an Eligible Purchaser. c. Maximum Sales Price. The purchase price for the sale of the Premises by the Owner to the Eligible Purchaser shall not exceed the Maximum Restricted Resale Price as set forth in the City Response Notice. The closing costs paid by the Eligible Purchaser shall not exceed reasonable customary buyer's closing costs in the County of Santa Clara. d. Disclosure and Submittals. The Owner and the Proposed Purchaser shall provide the following information and documents to the City or its agent at least fifteen (15) days prior to close of escrow: i. The name, address and telephone number of the Proposed Purchaser. ii. A signed financial statement by the Proposed Purchaser in a form acceptable to the City, including any supporting documentation requested by the City. The financial information shall be used by the City to determine the income eligibility of the Proposed Purchaser. iii. The proposed sales contract and all other related documents setting forth all the terms of the sale of the Premises, including at least the following terms: (a) the sales price; and (b) the price to be paid by the Proposed Purchaser for the Owner's personal property, if any, for the services of the Owner, if any, and any credits, allowances or other consideration, if any.. iv. A written certification, from the Owner and the Proposed Purchaser under penalty of perjury, in a form acceptable to the City, that the sale shall be closed in accordance with the terms of the sales contract and other documents submitted to and approved by the City. The certification shall also provide that neither the Proposed Purchaser nor any other party has paid or will pay to the Owner, and the Owner has not received and will not receive from the Proposed Purchaser or any other party, money or other consideration, including personal property, in addition to what is set forth in the sales contract and documents submitted to the City. The written certification shall also include a provision that in the event a Transfer is made in violation of the terms of this Agreement or false or misleading statements are made in any documents or certification submitted to the City, the City shall have the right to exercise its Option or file an action at law or in equity as may be appropriate. v. The name of the title company escrow holder for the sale of the Premises, the escrow number, and name, address, and phone number of the escrow officer. e. - Execution of New Documents.. Execution by the Proposed -Purchaser of a buyer's resale agreement, promissory note to the City, and deed of trust to the City, in forms provided by the City, and recordation of the new deed of trust and buyer's resale agreement, shall be a condition of the City's approval of the proposed sale and a condition of the reconveyance of this Agreement and the City Deed of Trust. f. Close of Sale. Upon the close of the proposed sale, certified copies of the recorded City deed of trust and Owner's resale agreement, the original City Note, a copy of the final sales contract, HUD -1 settlement statement, escrow instructions, and any other documents which the City may reasonably request. 14. Payment to City of Excess Sales Proceeds If the Owner makes a Transfer in violation of this Agreement, the Owner shall pay Excess Sales Proceeds to the City. For purposes of this Agreement, "Excess Sales Proceeds" shall mean the amount by which the gross sales proceeds received by the Owner from the new purchaser exceed the Maximum Restricted Resale Price for the Premises. This amount shall be a debt of the Owner to the City, further evidenced by the City Note, and secured by the City Deed of Trust. The City shall utilize the Excess Sales Proceeds for affordable housing programs. The Owner and the City acknowledge that the formula for calculation of the amount of Excess Sales Proceeds due from the Owner to the City is intended to cause the Owner to receive the same or fewer net sales proceeds from sale of the Premises at an unrestricted price to a market purchaser (in violation of this Agreement) as the Owner would receive from sale of the Premises to the City, Assignee, or to an Eligible Purchaser at the Maximum Restricted Resale Price. 15. Unrestricted Sale If Owner Unable to Sell to Eligible Purchaser a. If the City finds, based on substantial evidence, that either the City or the Owner has made a good faith effort for a period of at least one hundred eighty (180) days to locate an Eligible Purchaser who desires to purchase the Premises but has been unable to do so, then the Owner may sell the property to a buyer who is not an Eligible Purchaser at an unrestricted price which is at least ninety-five percent (95%) of Fair Market Value (supported by an MAI or other qualified appraisal), but shall pay all Excess Sales Proceeds to the City as set forth in paragraph 14 above. If the Owner Transfers the Premises pursuant to this paragraph, the purchaser shall not be required to execute a resale agreement, and the City shall reconvey the liens of this Agreement and the City Deed of Trust from the Premises, provided that the Owner sells the Premises at Fair Market Value and pays all Excess Sales Proceeds to the City. The Owner shall provide the City with the following documentation associated with such a Transfer at least fifteen (15) days prior to close of escrow: The name, address, and telephone number of the purchaser; ii. The proposed sales contract and all other related documents setting forth all the terms of the sale of the Premises, including at least the following terms: (a) the sales price; and (b) the price to be paid by the Proposed Purchaser for the Owner's personal property, if any, for the services of the Owner, if any, and any credits, allowances or other consideration, if any. iii. A written certification, from the Owner and the Proposed Purchaser under penalty of perjury, in a form acceptable to the City, that the sale shall be closed in accordance with the terms of the sales contract and other documents submitted to and approved by the City. The certification shall also provide that neither the Proposed Purchaser nor any other party has paid or will pay to the Owner, and the Owner has not received and will not receive from the Proposed Purchaser or any other party, money or other consideration, including personal property, in addition to what is set forth in the sales contract and documents submitted to the City. The written certification shall also include a provision that in the event a Transfer is made in violation of the terms of this Agreement or false or misleading statements are made in any documents or certification submitted to the City, the City shall have the right to exercise its Option or file an action at law or in equity as may be appropriate. iv. A copy of the MAI or other qualified appraisal for the Premises. v. The name of the title company escrow holder for the sale of the Premises, the escrow number, and name, address, and phone number of the escrow officer. b. If the City believes that the Premises are being sold at less than Fair Market Value, the City may complete its own appraisal to determine whether the Premises are being sold at Fair Market Value. The City's determination that the Premises are being sold at less than ninety- five percent (95%) of Fair Market Value shall constitute a Default. The City and the Owner agree that the requirements of this paragraph are necessary to ensure that the Premises are not being sold at a price below Fair Market Value to reduce the amounts due to the City under the City Note. c. Upon the close of escrow, the Owner shall provide the City with a copy of the HUD -1 settlement statement showing the purchase price paid for the Premises and all other payments from escrow, a copy of the final sales contract, and any other documents that the City may reasonably request. 16. Refinancing and Junior Loans. a. City Consent Required. The Owner covenants and agrees not to place aY additional mortgage or deeds of trust, including any line of credit, on the Premises without obtaining prior written consent of the City. b. Permitted Encumbrance Amount. At no time shall the total principal amount of all debt secured by the Premises exceed the "Permitted Encumbrance Amount", which is defined as the greater of: (i) ninety percent (90%) of the Maximum Restricted Resale Price calculated as of the date of the Owner's written notice to the City of the Owner's intent to refinance (the "Refinance Notice"); or (ii) the outstanding balance of the existing First Lender Loan as of the date of Refinance Notice. If escrow does not close on the refinance within one hundred twenty (120) days of the date of the Refinance Notice, the City shall have the right to recalculate the Permitted Encumbrance Amount. Owner shall not be in Default at the time of initial purchase of the Premises by the Owner if, at that time, the amount of the First Lender Loan secured by the — —Premises-exceeds the Permitted Encumbrance Amount and -Owner does not further encumber the - - Premises without approval of the City. c. Refinance of First Lender Loan. The City shall approve a prepayment and refinance of the existing First Lender Loan and shall provide for the subordination of the City Deed of Trust to the refinanced First Lender Loan provided that: (i) the total debt secured by the Premises, including junior mortgage loans and equity lines of credit but excluding the Purchase Subsidy, does not exceed the Permitted Encumbrance Amount; (ii) the refinanced First Lender Loan is fully amortized with a fixed rate of interest, permits no negative amortization, is fully documented, and requires no balloon payments; and (iii) the refinanced First Lender Loan does not exceed the Owner's ability to pay. d. Junior Loans and Equity Lines of Credit. Mortgage loans or equity lines of credit junior in lien priority to this Agreement and the City 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 which: (i) will not cause the total of all debt secured by the Premises (calculated assuming a maximum permitted draw on any equity line of credit but excluding the Purchase Subsidy) to exceed the Permitted Encumbrance Amount; (ii) are fully amortized, do not permit a rate of interest more than five percent (5%) above the initial rate, permit no negative amortization, are fully documented, and require no balloon payments; and (iii) the repayment of all debt on the Premises, including without limitation the First Lender Loan and all junior mortgage loans and equity lines of credit at the maximum possible required payment, does not exceed the Owner's ability to pay. e. Request for Notice of Default. As a condition for approval of a refinanced First Lender Loan, junior mortgage loan, or equity line of credit, requests for notice of default regarding the approved loan shall be recorded in the Office of the Recorder of the County of Santa Clara for the benefit of the City. f. Purpose of Restrictions on Refinance and Junior Loans. The City and the Owner agree that the requirements of this paragraph are necessary to ensure the continued affordability of the Premises to Owner; to minimize the risk of loss of the Premises by Owner through default and foreclosure of mortgage loans; and to protect the City's interest in the City Note. Owner further acknowledges that violation of the provisions of this paragraph shall constitute a Default under this Agreement, for which the City may exercise its Option. 17. Term of Agreement. All the provisions of this Agreement, including the benefits and burdens, run with the land and the Premises, and this Agreement shall bind, and the benefit hereof shall inure to, the Owner, his or her heirs, legal representatives, executors, successors in interest and assigns, and to the City and its successors for the "Term" of this Agreement, which is the earlier of (i) ninety-nine (99) years from the date of the recordation of this Agreement or (ii) the date of Transfer of the Premises to the City or another purchaser in compliance with this Agreement (including execution by the purchaser of a new resale restriction agreement for the benefit of the City). 18. Defaults and Remedies. a. Any one of the following events shall constitute a "Default" by the Owner under this Agreement: The Owner has made a misrepresentation to obtain the benefits of purchase of the Premises or in connection with its obligations under this Agreement; ii. The Owner fails to owner occupy the Premises, as required by paragraph 2 of this Agreement. iii. The Owner rents or leases the Premises in violation of paragraph 3 of this Agreement. iv. The Owner fails to provide information to the City necessary to determine Owner's compliance with this Agreement, the City Note, or the City Deed of Trust. v. The Owner actually Transfers, or attempts to Transfer, the Premises in violation of this Agreement; vi. An Inheriting Owner fails to comply with the requirements of paragraph 5 of this Agreement. vii. The Owner otherwise fails to comply with the requirements of this Agreement, the City Note, or the City Deed of Trust. viii. A notice of default is issued under First Lender Loan or any other financing secured by the Premises, or the City receives any other notice of default pursuant to Civil Code 2924b, or the Owner is in default on any other financing secured by the Premises. ix. A lien is recorded against the Premises other than the lien of the First Lender Loan or a loan approved by the City in accordance with paragraph 16. x. Judicial foreclosure proceedings are commenced regarding the Premises. xi. The Owner executes any deed in lieu of foreclosure transferring ownership of the Premises. b. Upon a declaration of Default by the City under this Agreement, the City may exercise any remedies at law or in equity, including without limitation, any or all of the following, none of which shall be an exclusive remedy: i. Declare all sums due under the City Note, including without limitation the Excess Sales Proceeds, and Excess Rental Proceeds, immediately due and payable without further demand; ii. Invoke the power of sale under the City Deed of Trust; iii. Apply to a court of competent jurisdiction for such relief at law or in equity as may be appropriate; iv. Take such enforcement action as is authorized under the or applicable law of the City; v. Declare a Default under the City Deed of Trust and pursue all City remedies under the City Deed of Trust; and vi. Exercise the Option pursuant to paragraph 19 of this Agreement. c. The City shall notify the First Lender at the address provided by the First Lender to the City in the manner set forth in paragraph 30 of this Agreement if the City has declared a Default under this Agreement or under the City Note or the City Deed of Trust. d. Requests for notice of default and any notice of sale under any deed of trust or mortgage with power of sale encumbering the Premises shall be recorded by the City in the Office of the Recorder of the County of Santa Clara for the benefit of the City. The City may declare a Default under this Agreement upon receipt of any notice given to the City pursuant to Civil Code section 2924b or through any other means and may exercise its rights as provided in this paragraph. 19. Exercise Of Option Upon Default a. Notice and Cure. Upon Default, the City may give written notice to the Owner specifying the nature of the violation. If the violation is not corrected to the satisfaction of City within a reasonable period of time, not longer than thirty (30) days after the date the notice is mailed, or within such further time as the City determines is necessary to correct the violation, the City may declare a Default under this Agreement. However, if the Owner is in default under any financing secured by the Premises, the City may declare a Default upon receipt of any notice given to the City pursuant to Civil Code section 2924b or through any other means and may exercise its rights as provided in paragraph 18 and this paragraph. b. Declaration of Default and Exercise of Option Upon Default. If Owner has not cured a Default within any applicable cure period, or if there is no applicable cure period, the City may declare a Default by written notice to Owner and shall have thirty (30) days after declaration of the Default to notify Owner and First Lender of its intent to exercise its Option. Not later than ninety (90) days after the City has notified the Owner of its intent to exercise the Option under this paragraph, the City shall purchase the Premises as described in paragraph 11, unless: (i) Owner has cured all Defaults, in which case City shall not exercise its Option; or (ii) Owner has not done all acts and executed all documents necessary to enable the close of escrow and transfer of the Premises to the City, including but not limited to removal of all exceptions to title as required by paragraph 11. If the Owner has not done all acts and executed all documents necessary to enable the close of escrow, City shall purchase the Premises ten (10) days after Owner has done all acts and executed all documents required for close of escrow. c. Court Order. If there is a stay or injunction imposed by court order precluding the City from exercising the Option within the applicable time period, then the running of such period shall be tolled until such time as the stay is lifted or injunction dissolved and the City has been given wri teiintideTher�ofatihichTine the period r exercise of the Option shall again begin to run. d. Right of City to Reinstate Mortgages. In the event of default and foreclosure, the City shall have the same right as the Owner to cure defaults and redeem the Premises prior to the foreclosure sale and shall be deemed to be Owner's successor in interest under California Civil Code section 2924c (or successor sections) solely for the purposes of reinstating any mortgage on the Premises that has led to the recordation of the notice of default. As Owner's deemed successor in interest, the City shall be entitled, but not required, to pay all amounts of principal, interest, taxes, assessments, insurance premiums, advances, costs, attorneys' fees and expenses required to cure the default. Nothing herein shall be construed as creating any obligation of the City to cure any such default, nor shall this right to cure and redeem operate to extend any time limitations in the default provisions of the underlying deed of trust or mortgage. 20. Notice of Option Abandonment and Termination of Agreement a. If this Agreement shall terminate in accordance with paragraph 17 of this Agreement or otherwise, upon request by Owner, the City shall record in the Office of the Recorder of Santa Clara County a notice of option abandonment and termination of this Agreement, which shall declare that the provisions of the Option and this Agreement are no longer applicable to the Premises. b. If the City fails to record a notice of option abandonment and termination of this Agreement, the sole remedy of Owner shall be to obtain a judicial order instructing such a recordation, and Owner shall have no right to damages against the City for failure to record such notice promptly 21. Nonliability of the City. a. No Obligation to Exercise Option. The City shall have no obligation to exercise any option granted it under this Agreement. In no event shall the City become in any way liable or obligated to the Owner or any successor -in -interest to the Owner by reason of its Option nor shall the City be in any way obligated or liable to the Owner or any successor -in -interest to the Owner for any failure to exercise its Option. b. Nonliability for Negligence, Loss, or Damage. Owner acknowledges, understands and agrees that the relationship between Owner and the City is solely that of an owner and administrator of an affordable housing program, and that the City does not undertake or assume any responsibility for or duty to Owner to select, review, inspect, supervise, pass judgment on, or inform Owner of the quality, adequacy or suitability of the Premises or any other matter. The City owes no duty of care to protect Owner against negligent, faulty, inadequate or defective building or construction or any condition of the Premises, and Owner agrees that neither Owner or Owner's heirs, successors or assigns shall ever claim, have or assert any right or action against the City for any loss, damage or other matter arising out of or resulting from any condition of the Premises and will hold the City harmless from any liability, loss or damage for these things. — — — — Inndemni .owner agrees to defend ,indemnify and_hold the_Cityiiarmless- from all losses, damages, liabilities, claims, actions, judgments, costs, and reasonable attorneys' fees that the City may incur as a direct or indirect consequence of: (1) Owner's Default, performance, or failure to perform any obligations as and when required by this Agreement or the City Deed of Trust; (2) the failure at any time of any of Owner's representations to the City to be true and correct; or (3) Owner's purchase or ownership of the Premises. 22. Superiority of Agreement The Owner covenants that he or she has not, and will not, execute any other agreement with provisions contradictory to or in opposition to the provisions in this Agreement, and that, in any event, this Agreement is controlling as to the rights and obligations between and among the Owner, the City and their respective successors. 23. Subordination Notwithstanding any other provision hereof, the City Deed of Trust shall be subordinate to the lien of the First Lender Deed of Trust, and this Agreement and the City Deed of Trust shall not impair the rights of the First Lender, or First Lender's assignee or successor in interest, to exercise its remedies under the First Lender Deed of Trust in the event of default under the First Lender Deed of Trust by the Owner. Such remedies under the First Lender Deed of Trust include the right of foreclosure or acceptance of a deed or assignment in lieu of foreclosure. This Agreement shall not be subordinated to the First Lender Deed of Trust and shall survive such foreclosure or acceptance of a deed in lieu of foreclosure. Notwithstanding such survival, this Agreement shall in no way impair the First Lender's ability to foreclose or accept a deed in lieu of foreclosure. After such foreclosure or acceptance of a deed in lieu of foreclosure, the City Deed of Trust shall be forever terminated and shall have no further effect as to the Premises or any transferee thereafter; provided, however, if the holder of such First Lender Deed of Trust acquired title to the Premises pursuant to a deed or assignment in lieu of foreclosure and no notice of default was recorded against the Premises by such holder in connection therewith, this Agreement shall automatically terminate upon such acquisition of title, only if (i) the City has been given written notice of default under such First Lender Deed of Trust with a sixty (60) -day cure period (which requirement shall be satisfied by recordation of a notice of default under California Civil Code section 2924) and (ii) the City or its designee shall not have cured the default within such sixty (60) -day period. The City shall not be entitled to obtain any proceeds from the initial sale or transfer of the Premises after foreclosure, from the foreclosing mortgage holder who obtained the Premises at foreclosure, or pursuant to a deed -in -lieu of foreclosure. 24. Rights of Beneficiaries Under Deeds of Trusts This Agreement shall not diminish or affect the rights of the City under the City Note and the City Deed of Trust. Notwithstanding any other provision in this Agreement to the contrary, this Agreement shall not diminish or affect the rights of the California Housing Finance Agency, the Department of Housing and Urban Development ("HUD"), the Federal National Mortgage Association, or the Veterans Administration under the First Lender Deed of Trust or any subsequent First Lender deeds of trust hereafter recorded against the Premises in compliance with paragraph 16 above. 25. Nondiscrimination The Owner covenants by and for itself and its successors and assigns that there shall be no discrimination against or segregation of a person or of a group of persons on account of race, color, religion, creed, age, disability, sex, sexual orientation, marital status, ancestry or national origin in the sale, transfer, use, occupancy, tenure or enjoyment of the Premises, nor shall the Owner or any person claiming under or through the Owner establish or permit any such practice or practices of discrimination or segregation with reference to the use, occupancy, or transfer of the Premises. The foregoing covenant shall run with the land. 26. HUD Forbearance Relief Notwithstanding other provisions of this Agreement, the Option shall not be exercised by the City when a deed of trust insured by HUD is secured by the Premises, and: (i) the owner is undergoing consideration by HUD for assignment forbearance relief; or (ii) the owner is undergoing consideration for relief under HUD's HOPE program. 27. Specific Performance. Owner acknowledges that any breach in Owner's performance of Owner's obligations under this Agreement or in the transfer of the Premises to the City 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. 28. City Deed of Trust. The obligations of the Owner contained in this Agreement are also secured by the City Deed of Trust. 29. Notices. All notices required herein shall be made by certified mail, return receipt requested, or by express delivery service with a delivery receipt, and shall be deemed to have been delivered as of the date received or the date delivery was refused as indicated on the return receipt, if sent to the following addresses: CITY: City of Cupertino Community Development Department 10300 Torre Avenue Cupertino, CA 95014 Attn: Senior Housing Planner OWNER_ _ At te-addrress of thelremises _ _ _ The addresses above may be changed by notice given pursuant to this paragraph. 30. Invalid Provisions. If any one or more of the provisions contained in this Agreement shall for any reason be held to be invalid, illegal or unenforceable in any respect, then such provision or provisions shall be deemed severable from the remaining provisions contained in this Agreement, and this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein. 31. Controlling Law. The terms of this Agreement shall be interpreted under the laws of the State of California. The venue for any legal action pertaining to this Agreement shall be Santa Clara County, California. 32. No Waiver. No delay or omission in the exercise of any right or remedy of City upon any Default by Owner shall impair such right or remedy or be construed as a waiver. The City's failure to insist in any one or more instance upon the strict observance of the terms of this Agreement shall not be considered a waiver of the City's right thereafter to enforce the provisions of the Agreement. The City shall not waive its rights to enforce any provision of this Agreement unless it does so in writing, signed by an authorized agent of the City. 33. Interpretation of Agreement. The terms of this Agreement shall be interpreted so as to avoid speculation on the Premises and to ensure to the extent possible that its sales price and mortgage payments remain affordable to Eligible Purchasers. 34. Third Party Beneficiary. The Redevelopment Agency of the City, if any, shall be considered a third party beneficiary of this Agreement, with full rights of enforcement. 35. Attorney's Fees. If either party is required to initiate legal proceedings to enforce its rights under this Agreement, including without limitation proceedings to remove liens and encumbrances subordinate to the Option, the prevailing party in such action shall be entitled to an award of reasonable attorneys' fees and costs in addition to any other recovery under this Agreement. 36. Covenants Running With The Land. a. Owner hereby subjects the Premises to the covenants and restrictions set forth in this Agreement. Owner hereby declares its express intent that the covenants and restrictions set forth herein shall be deemed covenants running with the land in perpetuity and shall pass to and be binding upon all parties having any interest in the Premises throughout the term of this Agreement set forth in paragraph 17. Each and every contract, deed, lease or other instrument covering, conveying or otherwise transferring the Premises or any interest therein, as the case may be, shall conclusively be held to have been executed, delivered and accepted subject to this Agreement regardless of whether the other party or parties to such contract have actual knowledge of this Agreement. b. The Owner and the City hereby declare their understanding and intent that: (i) the covenants and restrictions contained in this Agreement shall be construed as covenants running with the land pursuant to California Civil Code Section 1468 and not as conditions which might result in forfeiture of title by Owner; (ii) the burden of the covenants and restrictions set forth in this Agreement touch and concern the Premises in that the Owner's legal interest in the Premises may be rendered less valuable thereby; and (iii) the benefit of the covenants and restrictions set forth in this Agreement touch and concern the land by enhancing and increasing the enjoyment and use of the Premises by Eligible Purchasers, the intended beneficiaries of such covenants and restrictions. c. All covenants and restrictions contained herein without regard to technical classification or designation shall be binding upon Owner for the benefit of the City and Eligible Purchasers and such covenants and restrictions shall run in favor of such parties for the entire period during which such covenants and restrictions shall be in force and effect, without regard to whether the City is an owner of any land or interest therein to which such covenants and restrictions relate. 37. Enforcement Notwithstanding any other provision of the law, all covenants and restrictions contained herein which implement Health and Safety Code section 33334.3 and/or 33413, or successor provisions, shall run with the land and shall be enforceable by the City and the Redevelopment Agency of the City and any of the parties listed in Health and Safety Code section 33334.3(b)(7), so long as such provision or successor provision remains in effect. 38. Database Owner hereby acknowledges and agrees that Health and Safety Code section 33418(c) requires that the Premises be listed in a database that shall be made available to the public on the internet and which will include the street address, assessor's parcel number, and other information about the Premises. 39. Owner's Acknowledgement of Resale Restriction. — — — — -Owner hefeby acknowle-c ges and agrees-thaat: a. Owner hereby subjects the Premises to certain restrictions, and limits the price for which Owner may sell the Premises and the persons to whom Owner may sell the Premises. The resale price limitation, and other provisions contained in this Agreement, restrict the full benefits of owning the Premises. Owner may not enjoy the same economic or other benefits from owning the Premises that Owner would enjoy if this Agreement did not exist. b. Absent the provisions of the Legal Requirements and the provisions of this Agreement, the Premises could not be made available to Eligible Purchasers at an affordable price, including Owner. c. Owner understands all of the provisions of this Agreement. In recognition of the acknowledgments and agreements stated in this paragraph, Owner accepts and agrees to the provisions of this Agreement with the understanding that this Agreement will remain in full force and effect as to the Premises following any Transfer of the Premises throughout the term of this Agreement. d. OWNER UNDERSTANDS THAT THE DETERMINATION OF THE RESTRICTED RESALE PRICE OF THE PREMISES CAN BE MADE ONLY AT THE TIME OF THE PROPOSED TRANSFER, TAKING INTO CONSIDERATION INCREASES IN MEDIAN INCOME AND OTHER FACTORS THAT CANNOT BE ACCURATELY PREDICTED AND THAT THE SALES PRICE PERMITTED HEREUNDER MAY NOT INCREASE OR DECREASE IN THE SAME MANNER AS OTHER SIMILAR REAL PROPERTY WHICH IS NOT ENCUMBERED BY THIS AGREEMENT. OWNER FURTHER ACKNOWLEDGES THAT AT ALL TIMES IN SETTING THE SALES PRICE OF THE PREMISES THE PRIMARY OBJECTIVE OF THE CITY AND THIS AGREEMENT IS TO PROVIDE HOUSING TO ELIGIBLE HOUSEHOLDS AT AFFORDABLE HOUSING COST. THE RESTRICTED RESALE PRICE WILL ALMOST CERTAINLY BE LOWER THAN THE SALES PRICES OF OTHER SIMILAR PROPERTIES THAT HAVE NO RESTRICTIONS. [Initialed by Owner(s)] IN WITNESS WHEREOF, the parties have executed this Agreement on or as of the date first written above. OWNER: Name: CITY: CITY OF CUPERTINO, a municipal corporation IM Name: Pamela Wu Title: City Manager APPROVED AS TO FORM: Name: Christopher Jensen Title: City Attorney A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certification is attached, and not the truthfulness, accuracy, or validity of that document. State of California } County of Santa Clara } On , before me, Notary Public, personally appeared , who 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 capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. - — — — WITNESS my -hand -and -official -seal.— — — -- — — — — — (Seal) Signature of Notary Public A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certification is attached, and not the truthfulness, accuracy, or validity of that document. State of California } County of Santa Clara } On . before me, Notary Public, personally appeared , who 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 capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. — WI1NESSmy-hand-arid-official-seal: — - — — — (Seal) Signature of Notary Public EXHIBIT A LEGAL DESCRIPTION For APN/Parcel ID(s): THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF CUPERTINO, COUNTY OF SANTA CLARA, STATE OF CALIFORNIA AND IS DESCRIBED AS FOLLOWS: EXHIBIT B FORM OF OWNER OCCUPANCY CERTIFICATION To: City of Cupertino Community Development Department 10300 Torre Avenue Cupertino, CA 95014 Attn: Senior Housing Planner: From: Address of Premises: Date: ("Owner(s)") By signature below, I to the City under penalty of perjury principal place of residence and that I/we ha [insert number] months of the calendar year Attached to this letter is a copy of months] showing my place of residence. ("Premises") [insert name or names of Owner] hereby certify that I/we occupy the home located at [insert address] (the "Premises") as my/our ve occupied the Premises for L) [insert previous calendar year]. [insert utility bill dated within the past three This Owner Occupancy Certification is signed on , 20_, under penalty of perjury. By: By: Due Date: Annually, date to be determined. Owner [type name] Owner [type name] Attach copy of bill for utilities, phone, or internet showing owner's name and mailing address. EXHIBIT C FORM OF OWNER'S NOTICE OF INTENT TO TRANSFER To: City of Cupertino Community Development Department 10300 Torre Avenue Cupertino, CA 95014 Attn: Senior Housing Planner: From: Address of Premises: Date: [name of owner(s)] ("Owner(s)") ("Premises") Please be notified pursuant to paragraph 8 of the Occupancy, Resale, and Refinancing Restriction Agreement and Option to Purchase (the "Resale Agreement") between Owner and City dated _______________,that the Owner intends to transfer the Premises listed above. A. The following information is provided to the City: 1. Address of Premises: 2. Date Owner purchased Premises: 3. Purchase Price paid by Owner when Premises were purchased: 4. Date Owner intends to vacate Premises: 5. Date Premises will be placed on market: 6. Name and phone number of person for City to contact to schedule inspection: and (name) (phone number) B. The following documents are attached to this Notice: 1. Copy of HUD -1 Settlement Statement from Owner's purchase of the property 2. If Owner has made Eligible Capital Improvements to the Premises that Owner wishes to include in the City's calculation of Indexed Price, check box below Yes, I have made Eligible Capital Improvements. They are improvements] and were completed on documents to this letter: [describe [insert date]. I attach the following a. copy of City letter granting prior approval of these improvements; b. evidence of cost of these improvements (invoices and receipts, showing amount and payment); c. appraisal showing value added to Premises by the improvements. C. If the Owner has paid Special Assessments that Owner wishes included in the City's calculation of Indexed Price, include: a. evidence from homeowner's association of the purpose of the Special Assessment; and b. evidence that Owner has paid the Special Assessment (cancelled check, statement from homeowner's association, etc.). D. I have not yet listed the Premises for sale with a multiple listing service, or retained a real estate broker, or notified a financial institution. I agree to prepare the Premises for sale by: 1. obtaining a pest control report within fifteen (15) days of the date of this notice, 2. repairing all damage noted in the pest report within the sooner of: (i) sixty (60) days from the date of this notice, or (ii) two (2) weeks prior to close of escrow or the transfer of the Premises, allowing the City or its designee to inspect the Premises within fifteen (15) days of this notice, 4. maintaining utility connections (gas, electricity, and water) until the Premises is transferred, 5. permitting a walk through by the City within three day of the close of escrow on the transfer. This Owner's Notice of Intent to Transfer is certified by Owner to be true and correct and is signed on [insert date] under penalty of perjury. By: Owner By: Owner EXHIBIT D FORM OF OWNER ACKNOWLEDGEMENT OF CITY RESPONSE NOTICE Name: Address of Premises: Date: I, [insert name] hereby acknowledge that I received the City Response Notice on [insert date] and still intend to transfer the Premises. EXHIBIT E FORM OF REQUEST FOR CITY APPROVAL OF IMPROVEMENTS TO THE PREMISES To: City of Cupertino Community Development Department 10300 Torre Avenue Cupertino, CA 95014 Attn: Senior Housing Planner: From: Premises Address: Date: ("Owner") ("Premises") I hereby request City approval of the following capital improvements I intend to make to my Premises: Description of Improvements: timatedCost: Original Purchase Price: A copy of the building permit (if required) is attached. The City will respond in writing to this request. NOTE: Owner should retain copies of contracts, invoices, and receipts for all completed capital improvements. These documents will be necessary to establish the Maximum Restricted Resale Price of the Premises upon subsequent transfer. *Notice: Proposed Improvements must cost at least Two Thousand Dollars ($2,000) and must be approved by the City in writing prior to construction. EXHIBIT F FORM OF REFINANCE NOTICE To: City of Cupertino Community Development Department 10300 Torre Avenue Cupertino, CA 95014 Attn: Senior Housing Planner: From: Premises Address: Date: ("Owner") ("Premises") The Owner hereby requests the City to approve the Owner's refinance of the existing first mortgage on the Premises; or to approve a junior mortgage loan or home equity loan. The Owner provides the following information which it certifies to be true and correct: 1. Original purchase price of Premises: $ 2. Date of purchase of Premises: 3. Original principal amount of existing First Lender Loan: It 4. Interest rate of existing First Lender Loan: $ I am enclosing the following information: 1. Preliminary Title Report. 2. Signed Loan Application for New Loan. 3. Preliminary Loan Approval Document from New Lender that Describes New Loan Terms and Conditions. 4. Estimated HUD -1 Settlement Statement. 5. Prepared Requests for Notice of Default (to be executed by City upon approval). 6. Describe the reasons for refinance or junior loan. 7. Copy of HUD -1 Settlement Statement from Owner's purchase of the property If Owner has made Eligible Capital Improvements to the Premises that Owner wishes to include in the City's calculation of the Permitted Encumbrance Amount, check box below ❑ Yes, I have made Eligible Capital Improvements. They are improvements] and were completed on documents to this letter. [describe [insert date]. I attach the following a. copy of City letter granting prior approval of these improvements; b. evidence of cost of these improvements; 9. If Owner has paid Special Assessments that Owner wishes to include in the City's calculation of the Permitted Encumbrance Amount, include: a. evidence from homeowner's association of the purpose of the Special Assessment; and b. evidence that Owner has paid the Special Assessment (cancelled check, statement from homeowner's association, etc.). FOR PROPOSED REFINANCE OF FIRST MORTGAGE LOAN, also include Prepared Subordination Agreement (to be executed by City upon approval). The Owner hereby certifies the above information is true and correct and this Refinance Request is executed under penalty of perjury on [insert date]. By: By: [type buyer(s) name] [type buyer(s) name] Exhibit E: City Note NOTICE TO OWNER: THIS DOCUMENT CONTAINS PROVISIONS RESTRICTING RESALES AND ASSUMPTIONS. PROMISSORY NOTE Secured by Deed of Trust (City of Cupertino Inclusionary Housing Program) Cupertino, California Excess Sales Proceeds and Excess Rental Proceeds 202 FOR VALUE RECEIVED, the undersigned (collectively, "Owner"), promises to pay to the City of Cupertino, a municipal corporation (the "City"), at the City of Cupertino, Community Development Department, 10300 Torre Avenue, Cupertino, CA 95014, or such other place as the City may designate in writing, any amounts due the City as Excess Rental Proceeds pursuant to Section 3 of the Resale Restriction Agreement plus any amounts due the City as Excess Sales Proceeds pursuant to Section 14 of the Resale Restriction Agreement. 1. Purpose of Note. Owner is purchasing the Home located at , Cupertino, California pursuant to the City of Cupertino Inclusionary Housing Program, which provides for the rental or purchase of homes by low and moderate income households at affordable prices. Pursuant to the City of Cupertino Inclusionary Housing Program, the purchase price of the Home has been set substantially below the market value -so -that the Home will be -affordable for purchase -by moderate -income househo Because the purchase price has been set below the market value, the Owner is required and has agreed to execute a Resale Restriction Agreement which restricts the price of the Home upon resale and which requires the Owner to pay any Excess Sales Proceeds at resale to the City. In addition, the Resale Restriction Agreement prohibits the Owner from renting or leasing the Home except under limited circumstances and requires the Owner to pay any Excess Rental Proceeds to the City. This promissory note (the "Note") evidences both (a) the obligation of the Owner to pay any Excess Rental Proceeds to the City pursuant to Section 3 of the Resale Restriction Agreement, and (b) the obligation of the Owner to pay any Excess Sales Proceeds to the City pursuant to Section 14 of the Resale Restriction Agreement. 2. Definitions. The terms set forth in this section shall have the following meanings in this Note. (a) "City Option" shall mean the City's options to purchase pursuant to Section 6 of the Resale Restriction Agreement. (b) "Excess Rental Proceeds" shall have the meaning set forth in Section 3 of the Resale Restriction Agreement. Page 1 of 4 (c) "Excess Sales Proceeds" shall have the meaning set forth in Section 14 of the Resale Restriction Agreement. (d) "First Mortgage" shall mean the promissory note and deed of trust evidencing and securing a first mortgage loan for the Home. (e) "Home" shall mean the dwelling and the real property, on which the dwelling is located, which secure the deed of trust executed in connection with this Note. (f) "Resale Restriction Agreement" shall mean the Buyer's Occupancy, Refinancing and Resale Restriction Agreement with Option to Purchase executed by the Owner and the City in connection with the Owner's purchase of the Home. (g) "Term" shall mean the term of this Note, which shall be the same as the Term of the Resale Restriction Agreement, as set forth in Section 17 of the Resale Restriction Agreement. 3. Payments. In the event any Excess Rental Proceeds or Excess Sales Proceeds become due and payable under the Resale Restriction Agreement, such amounts shall be immediately due and payable hereunder. Failure to declare such amounts due shall not constitute a waiver on the part of the City to declare them due in the event of a subsequent Transfer. 4. Security. This Note is secured by a deed of trust dated the same date as this Note (the "Deed of Trust"). Owner and City have also executed the Resale Restriction Agreement. 5. Due on Transfer. Any amounts due under this Note shall be due and payable in full on the date of any Transfer (as defined in the Resale Restriction Agreement) of the Home. U. J I LU1L a11U tiGGG1G1QL1U11. llle Vwiiel siiaii oe in uelaun under Inls i ote ii ne or she is in default under the Resale Restriction Agreement. Upon the occurrence of a default under this Note, the full amount of any Excess Rental Proceeds or Excess Sales Proceeds due under the Resale Agreement shall be immediately due and payable. 7. No Waiver by City. Any failure by the City to pursue its legal and equitable remedies upon default shall not constitute a waiver of the City's right to declare a default and exercise all of its rights under this Note, the Resale Restriction Agreement, and the Deed of Trust. Nor shall acceptance by the City of any payment provided for herein constitute a waiver of the City's right to require prompt payment of any remaining payments owed. 8. Attorney's Fees and Costs. Owner agrees that if any amounts due under this Note are not paid when due, to pay in addition to principal and accrued interest, all costs and expenses of collection and reasonable attorney fees paid or incurred in connection with the collection or enforcement of this Note, whether or not suit is filed. 9. Joint and Several Obligations. This Note is the joint and several obligations of all makers, sureties, guarantors and endorsers, and shall be binding upon them and their successors and assigns. Page 2 of 4 10. No Offset. Owner hereby waives any rights of offset it now has or may hereafter have against City, its successors and assigns, and agrees to make the payments called for herein in accordance with the terms of this Note. 11. Waiver. Owner and any endorsers or guarantors of this Note, for themselves, their heirs, legal representatives, successors and assigns, respectively, severally waive diligence, presentment, protest, and demand, and notice of protest, notice of dishonor and notice of non- payment of this Note, and expressly waive any rights to be released by reason of any extension of time or change in terms of payment, or change, alteration or release of any security given for the payments hereof, and expressly waive the right to plead any and all statutes of limitations as a defense to any demand on this Note or agreement to pay the same, and jointly and severally agree to pay all costs of collection when incurred, including reasonable attorneys' fees. 12. Notices. All notices required in this Note shall be sent by certified mail, return receipt requested, or express delivery service with a delivery receipt, or personally delivered with a delivery receipt obtained and shall be deemed to be effective as of the date shown on the delivery receipt as the date of delivery, the date delivery was refused, or the date the notice was returned as undeliverable as follows: To the Owner: At the address of the Home. To the City: City of Cupertino Community Development Department 110301 Torre Avenue Cupertino, CA 95014 The parties may subsequently change addresses by providing written notice of the change in address to the other parties in accordance with this Section 12. 13. Controlling Law. This Note shall be construed in accordance with and be governed by the laws of the State of California. 14. Assignment by City. The City may assign its right to receive the proceeds under this Note to any person and upon notice to the Owner by the City all payments shall be made to the assignee. 15. Severability. If any provision of this Note shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions hereof shall not in any way be affected or impaired thereby. Page 3 of 4 16. Entire Agreement. This Note (along with the Resale Restriction Agreement and Deed of Trust) sets forth the entire understanding and agreement of the City and the Owner and any amendment, alteration or interpretation of this Note must be in writing signed by both the City and the Owner. OWNER: [type buyer(s) name], Vesting [type buyer(s) name] [type buyer(s) name] Page 4 of 4 Exhibit F: City Deed of Trust RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: City of Cupertino Community Development Department 10300 Torre Avenue Cupertino, CA 95014 Attn: Housing Dept No fee for recording pursuant to Government Code Section 27383 SPACE ABOVE FOR RECORDER'S USE DEED OF TRUST AND SECURITY AGREEMENT (City of Cupertino-Inclusionary Housing Program) NOTE TO TRUSTOR: THIS DEED OF TRUST CONTAINS PROVISIONS PROHIBITING ASSUMPTIONS THIS DEED OF TRUST AND SECURITY AGREEMENT (the "City Deed of Trust") made this day of 202_, among ("Trustor"), whose address is Cupertino, CA 95014, TITLE COMPANY as trustee ("Trustee"), and the City of Cupertino, a municipal corporation (the "City") as beneficiary. The T-r-usto -i-eonsideratin-of-the-promiscs hereinrccitcd and the trust -herein -created - irrevocably grants, transfers, conveys and assigns to Trustee, in trust, with power of sale, the property located in Santa Clara County, State of California, described in the attached Exhibit A and more commonly known as: ADDRESS, Cupertino, CA 95014, Cupertino, California (the "Home"). TOGETHER with all the improvements now or hereafter erected on the property, and all easements, rights, appurtenances, and all fixtures now or hereafter attached to the property, all of which, including replacements and additions thereto, shall be deemed to be and remain a part of the property covered by this City Deed of Trust; and TOGETHER with all articles of personal property or fixtures now or hereafter attached to or used in and about the building or buildings now erected or hereafter to be erected on the Home which are necessary to the complete and comfortable use and occupancy of such building or buildings for the purposes for which they were or are to be erected, including all other goods and chattels and personal property as are ever used or furnished in operating a building, or the activities conducted therein, similar to the one herein described and referred to, and all renewals or replacements thereof or articles in substitution therefore, whether or not the same are, or shall be attached to said building or buildings in any manner; and all of the foregoing, together with the Home, is herein referred to as the "Security"; To have and to hold the Security together with acquittances to the Trustee, its successors and assigns forever; TO SECURE to the City the performance of the covenants and agreements of Trustor contained in that certain Buyer's Occupancy, Refinancing, and Resale Agreement with Option to Purchase executed by and between Trustor and the City of even date herewith (the "Resale Agreement"); TO SECURE to the City the payment of Excess Sales Proceeds (as defined in the Resale Agreement) and Excess Rental Proceeds (as defined in the Resale Agreement) that may become due by Trustor to City, which payment obligation is further evidenced by the promissory note to the City, executed by Trustor, dated of even date herewith (the "City Note"); and TO SECURE the payment of all other sums, with interest thereon, advanced in accordance herewith to protect the security of this City Deed of Trust; and the performance of the covenants and agreements of Trustor herein contained. TRUSTOR AND CITY COVENANT AND AGREE AS FOLLOWS: 1. Trustor's Estate. That Trustor is lawfully seized of the estate hereby conveyed and has the right to grant and convey the Security, that other than this City Deed of Trust, the Security is encumbered only by those deeds of trust (collectively the "First Lender Deed of Trust") executed by Trustor to secure 1 promissory notes (collectively the "First Lender Note") executed by Trustor to assist in the purchase of the Home in connection with a loan or loans made to Trustor as follows: Name of Lender 1. XXX 2. 3. 4. Amount Date Deed of Trust Recorded All lenders listed above are collectively the "First Lender." Trustor agrees to warrant and defend generally the title to the Security against all claims and demands, subject to any declarations, easements, or restrictions listed in a schedule of exceptions to coverage in any title insurance policy insuring the City's interest in the Security. (As used in this City Deed of Trust, the term "First Lender" shall include all successors and assigns of the First Lender.) 2. Payment of Excess Sales Proceeds and/or Excess Rental Proceeds. Trustor will promptly pay to the City, when and if due pursuant to the Resale Agreement and City Note, the Excess Sales Proceeds (as defined in the Resale Agreement) and the Excess Rental Proceeds (as defined in the Resale Agreement). 3. Resale Agreement. Trustor will observe and perform all of the covenants and agreements of the Resale Agreement, City Note, and this City Deed of Trust. 4. First Lender Loan. Trustor will observe and perform all of the covenants and agreements of the First Lender Note, First Lender Deed of Trust, and related First Lender loan documents. 5. Charges; Liens. Trustor will pay all taxes, assessments and other charges, fines and impositions attributable to the Security which may attain a priority over this City Deed of Trust, by Trustor making any payment, when due, directly to the payee thereof. Upon request by the City, Trustor will promptly furnish to the City all notices of amounts due under this paragraph. In the event Trustor makes payment directly, Trustor will promptly discharge any lien which has priority over this City Deed of Trust; provided, that Trustor will not be required to discharge the lien of the First Lender Deed of Trust or any other lien described in this paragraph so long as Trustor will agree in writing to the payment of the obligation secured by such lien in a manner acceptable to the City, or will, in good faith, contest such lien by, or defend enforcement of such lien in, legal proceedings which operate to prevent the enforcement of the lien or forfeiture of the Security or any part thereof. 6. Hazard Insurance. (a) rustor will eep the Security insured y a standard all risk property insurance policy equal to the replacement value of the Security (adjusted every five (5) years by appraisal, if requested by the City) naming the City as an additional insured and loss payee. If the Security is located in a flood plain, Trustor shall also obtain flood insurance. In no event shall the amount of insurance be less than the amount necessary to prevent Trustor from becoming a co- insurer under the terms of the policy. The insurance carrier providing this insurance shall be licensed to do business in the State of California and be chosen by Trustor subject to approval by the City; provided, that such approval will not be withheld if the insurer is also approved by the First Lender, the Federal Home Loan Mortgage Corporation, Fannie Mae, Freddie Mac, the United States Department of Housing and Urban Development, the United States Department of Veterans Affairs, or successors thereto. All insurance policies and renewals thereof will be in a form acceptable to the City and will include a standard mortgagee clause with standard lender's endorsement in favor of the holder of the First Lender Note and the City as their interests may appear and in a form acceptable to the City. The City shall have the right to hold, or cause its designated agent to hold, the policies and renewals thereof, and Trustor shall promptly furnish to the City, or its designated agent, the original insurance policies or certificates of insurance, all renewal notices and all receipts of paid premiums. In the event of loss, Trustor will give prompt notice to the insurance carrier and the City or its designated agent. The City, or its designated agent, may make proof of loss if not made promptly by Trustor. The City shall receive thirty (30) days advance notice of cancellation of any insurance policies required under this section. Unless the City and Trustor otherwise agree in writing, insurance proceeds, subject to the rights of the First Lender, will be applied to restoration or repair of the Security damaged, provided such restoration or repair is economically feasible and the security of this City Deed of Trust is not thereby impaired. If such restoration or repair is not economically feasible or if the security of this City Deed of Trust would be impaired, the insurance proceeds will be used to repay any amounts due under the Resale Agreement, with the excess, if any, paid to Trustor. If the Security is abandoned by Trustor, or if Trustor fails to respond to the City, or its designated agent, within thirty (30) days from the date notice is mailed by either of them to Trustor that the insurance carrier offers to settle a claim for insurance benefits, the City, or its designated agent, is authorized to collect and apply the insurance proceeds at the City's option either to restoration or repair of the Security or to pay amounts due under the Resale Agreement. If the Security is acquired by the City, all right, title and interest of Trustor in and to any insurance policy and in and to the proceeds thereof resulting from damage to the Security prior to the sale or acquisition will pass to the City to the extent of the sums secured by this City Deed of Trust immediate prior to such sale or acquisition, subject to the rights of the First Lender. (b) During the course of any rehabilitation of the improvements located on the Home, Trustor shall comply with all contractors' licensing requirements. Any contractors shall be licensed contractors who maintain the following forms of insurance: (i) Liability Insurance. Comprehensive general liability insurance against liability or bodily injury to or death of any person or property damage arising out of an occurrence on or about the Property. The limits of such insurance shall be not less than One Million Dollars ($1,000,000) combined single limit for bodily injury and property damage. (ii) Worker's Compensation Insurance. Worker's compensation insurance covering all persons employed in connection with any work on the Home. 7. Preservation and Maintenance of Security. Trustor will keep the Security in good repair and in a neat, clean, and orderly condition and will not commit waste or permit impairment or deterioration of the Security. If there arises a condition in contravention of this section, and if Trustor has not cured such condition within thirty (30) days after receiving a notice from the City of such a condition, then in addition to any other rights available to the City, the City shall have the right (but not the obligation) to perform all acts necessary to cure such condition, and to establish or enforce a lien or other encumbrance against the Security to recover its cost of curing. 8. Protection of the City's Security. If Trustor fails to perform the covenants and agreements contained in this City Deed of Trust or if any action or proceeding is commenced which materially affects the City's interest in the Security, including, but not limited to, default under the First Lender Deed of Trust, eminent domain, insolvency, code enforcement, or arrangements or proceedings involving a bankrupt or decedent, then the City, at the City's option, upon notice to Trustor, may make such appearances, disburse such sums and take such action as it determines necessary to protect the City's interest, including but not limited to, disbursement of reasonable attorney's fees and entry upon the Security to make repairs. Any amounts disbursed by the City pursuant to this section, with interest thereon, will become an indebtedness of Trustor secured by this City Deed of Trust. Unless Trustor and City agree to other terms of payment, such amount will be payable upon notice from the City to Trustor requesting payment thereof, and will bear interest from the date of disbursement at the lesser of (i) ten percent (10%); or (ii) the highest rate permissible under applicable law. Nothing contained in this paragraph will require the City to incur any expense or take any action hereunder. 9. Inspection. The City may make or cause to be made reasonable entries upon and inspections of the Security; provided that the City will give Trustor reasonable notice of inspection. 10. Forbearance by the City Not a Waiver. Any forbearance by the City in exercising any right or remedy will not be a waiver of the exercise of any such right or remedy, nor shall acceptance by City of any payment provided for in the City Note constitute a waiver of the City's right to require prompt payment of any indebtedness secured by this City Deed of Trust. The procurement of insurance or the payment of taxes or other liens or charges by the City will not be a waiver of the City's rights to accelerate the maturity of the indebtedness secured by this City Deed of Trust, to require payment of any amounts secured by this City Deed of Trust, or to performance of any covenants secured by this City Deed of Trust. 11. Remedies Cumulative. All remedies provided in this City Deed of Trust are distinct and cumulative to any other right or remedy under this City Deed of Trust or any other document, or afforded by law or equity, and may be exercised concurrently, independently or successively. 12. Successors and Assigns Bound. The covenants and agreements herein contained shall bind, and the rights hereunder shall inure to, the respective successors and assigns of the City and Trustor subject to the provisions of this City Deed of Trust. 13. Joint and Several Liability. All covenants and agreements of Trustor shall be joint and several. 14. Notice. Except for any notice required under applicable law to be given in another manner, (a) any notice to Trustor provided for in this City Deed of Trust will be given by registered or certified mail, postage prepaid, return receipt requested, or delivered personally, or by express delivery service, addressed to Trustor at the address shown in the first paragraph of this City Deed of Trust or such other address as Trustor may designate by notice to the City as provided herein, and (b) any notice to the City will be given by given by registered or certified mail, postage prepaid, return receipt requested, or delivered personally, or by express delivery service, to the City of Cupertino, Community Development Department, 10300 Torre Avenue, Cupertino, CA 95014, or to such other address as the City may designate by notice to Trustor as provided above. Notice shall be effective as of the date received by City as shown on the return receipt. 15. Governing Law. This City Deed of Trust shall be governed by the laws of the State of California. 16. Severability. In the event that any provision or clause of this City Deed of Trust, City Note, or the Resale Agreement conflicts with applicable law, such conflict will not affect other provisions of this City Deed of Trust, City Note, or the Resale Agreement which can be given effect without the conflicting provision, and to this end the provisions of the City Deed of Trust, City Note, and the Resale Agreement are declared to be severable. 17. Captions. The captions and headings in this City Deed of Trust are for convenience only and are not to be used to interpret or define the provisions hereof. 18. Nondiscrimination. Trustor covenants by and for itself and its successors and assigns that there shall be no discrimination against or segregation of a person or of a group of persons on account of race, color, religion, creed, age, disability, sex, sexual orientation, marital status, ancestry or national origin in the sale, transfer, use, occupancy, tenure or enjoyment of the Home, nor shall Trustor or any person claiming under or through Trustor establish or permit any such practice or practices of occupancy, or transfer o foregoing covenant shall run with the land. 19. Nonliability for Negligence, Loss, or Damage. Trustor acknowledges, understands and agrees that the relationship between Trustor and City is solely that of a borrower and lender, and that City neither undertakes nor assumes any responsibility for or duty to Trustor to select, review, inspect, supervise, pass judgment on, or inform Trustor of the quality, adequacy or suitability of the Security or any other matter. City owes no duty of care to protect Trustor against negligent, faulty, inadequate or defective building or construction or any condition of the Security and Trustor agrees that neither Trustor, nor Trustor's heirs, successors or assigns shall ever claim, have or assert any right or action against City for any loss, damage or other matter arising out of or resulting from any condition of the Security and will hold City harmless from any liability, loss or damage for these things. 20. Hazardous Substances. Trustor shall not cause or permit the presence, use, disposal, storage, or release of any Hazardous Substances on or in the Home. Trustor shall not do, nor allow anyone else to do, anything affecting the Home that is in violation of any Environmental Law. The preceding two sentences shall not apply to the presence, use, or storage on the Home of small quantities of Hazardous Substances that are generally recognized to be appropriate to normal residential uses and to maintenance of the Home. "Hazardous Substances" shall mean those substances defined as toxic or hazardous substances or hazardous waste under any Environmental Law, and the following substances: gasoline, kerosene, other flammable or toxic petroleum products, toxic pesticides and herbicides, volatile solvents, materials containing asbestos or formaldehyde, and radioactive materials. "Environmental Law" shall mean all federal and state of California laws that relate to health, safety or environmental protection. Trustor shall promptly give City written notice of any investigation, claim, demand, lawsuit or other action by any governmental or regulatory agency or private party involving the Home and any Hazardous Substance or Environmental Law of which Trustor has actual knowledge. If Trustor learns, or is notified by any governmental or regulatory authority, that any removal or other remediation of any Hazardous Substance affecting the Home is necessary, Trustor shall promptly take all necessary remedial actions in accordance with Environmental Law. 21. Indemnity. Trustor agrees to defend, indemnify, and hold the City harmless from all losses, damages, liabilities, claims, actions, judgments, costs, and reasonable attorneys' fees that the City may incur as a direct or indirect consequence of: (a) Trustor 's failure to perform any obligations as and when required by the Resale Agreement, City Note, and this City Deed of Trust; or (b) The failure at any time of any of Trustor's representations or warranties to be true and correct. 22. Acceleration; Remedies. Upon Trustor's breach of any covenant or agreement of Trustor in the Resale Agreement, the City Note, or this City Deed of Trust, including, but not limited to, the covenants to pay, when due, any sums secured by this City Deed of Trust, the City Note, or the Resale Agreement, the City, prior to acceleration, will mail by express delivery, return receipt requested notice to Trustor specifying;_ (1) the breach; (2) if the breach is curable, the action required to cure such breach; (3) a date, not less than thirty (30) days from the date the notice is effective pursuant to Section 15, by which such breach is to be cured; and (4) if the breach is curable, that failure to cure such breach on or before the date specified in the notice may result in acceleration of the sums secured by this City Deed of Trust and sale of the Security. The notice will also inform Trustor of Trustor 's right to reinstate after acceleration or the declaration of a default and the right to bring a court action to assert the nonexistence of default or any other defense of Trustor to acceleration and/or sale. If the breach is not cured on or before the date specified in the notice, the City, at the City's option, may: (a) declare all of the sums, if any, secured by this City Deed of Trust to be immediately due and payable without further demand and may invoke the power of sale and any other remedies permitted by California law; (b) either in person or by agent, with or without bringing any action or proceeding, or by a receiver appointed by a court, and without regard to the adequacy of its security, enter upon the Security and take possession thereof (or any part thereof) and of any of the Security, in its own name or in the name of Trustee, and do any acts which it deems necessary or desirable to preserve the value or marketability of the Home, or part thereof or interest therein, increase the income therefrom or protect the security thereof. The entering upon and taking possession of the Security shall not cure or waive any breach hereunder or invalidate any act done in response to such breach and, notwithstanding the continuance in possession of the Security, the City shall be entitled to exercise every right provided for in this City Deed of Trust, or by law upon occurrence of any uncured breach, including the right to exercise the power of sale; (c) commence an action to foreclose this City Deed of Trust as a mortgage, appoint a receiver, or specifically enforce any of the covenants hereof; (d) deliver to Trustee a written declaration of default and demand for sale, pursuant to the provisions for notice of sale found at California Civil Code Sections 2924, et seq., as amended from time to time; or (e) exercise all other rights and remedies provided herein, in the instruments by which Trustor acquires title to any Security, or in any other document or agreement now or hereafter evidencing, creating or securing all or any portion of the obligations secured hereby, or provided by law. The City shall be entitled to collect all reasonable costs and expenses incurred in pursuing the remedies provided in this paragraph, including, but not limited to, reasonable attorney's fees. 23. Trustor's Right to Reinstate. Notwithstanding the City's acceleration of the sums secured by this City Deed of Trust, Trustor will have the right to have any proceedings begun by the City to enforce this City Deed of Trust discontinued at any time prior to five (5) days before sale of the Security pursuant to the power of sale contained in this City Deed of Trust or at any time prior to entry of a judgment enforcing this City Deed of Trust if: (a) Trustor pays City all sums which would be then due under this City Deed of Trust and no acceleration under this City Deed of Trust, the City Note, or the Resale Agreement has occurred; (b) Trustor cures all breaches of any other covenants or agreements of Trustor contained in the Resale Agreement, City Note, or this City Deed of Trust; (c) Trustor pays all reasonable expenses incurred y the City and rus ee in enforcing the covenants and agreements of Trustor contained in the Resale Agreement, City Note, or this City Deed of Trust, and in enforcing the City's and Trustee's remedies, including, but not limited to, reasonable attorney's fees; and (d) Trustor takes such action as the City may reasonably require to assure that the lien of this City Deed of Trust, the City's interest in the Security and Trustor 's obligation to comply with the Resale Agreement secured by this City Deed of Trust and to pay the sums secured by this City Deed of Trust shall continue unimpaired. Upon such payment and cure by Trustor, this City Deed of Trust and the obligations secured hereby will remain in full force and effect as if no acceleration or declaration of default had occurred. 24. Due on Transfer of the Home. Upon a Transfer (as defined in the Resale Agreement) of the Home or any interest in it, the City shall require immediate payment in full of all sums secured by this City Deed of Trust. 25. Reconveyance. Upon performance of all obligations of the Resale Agreement and expiration of its term and upon payment of all sums secured by this City Deed of Trust, the City will request Trustee to reconvey the Security and will surrender this City Deed of Trust, the Resale Agreement, and the City Note to Trustee. Trustee will reconvey the Security without warranty and without charge to the person or persons legally entitled thereto. Such person or persons will pay all costs of recordation, if any. 26. Substitute Trustee. The City, at the City's option, may from time to time remove Trustee and appoint a successor trustee to any Trustee appointed hereunder. The successor trustee will succeed to all the title, power and duties conferred upon the Trustee herein and by applicable law. 27. Superiority of First Lender Documents. Notwithstanding any provision herein, this City Deed of Trust shall not diminish or affect the rights of the First Lender under the First Lender Deed of Trust or any subsequent First Lender deeds of trust hereafter recorded against the Security in compliance with the requirements of Section 23 of the Resale Agreement. Notwithstanding any other provision hereof, the provisions of this City Deed of Trust shall be subordinate to the lien of the First Lender Deed of Trust and shall not impair the rights of the First Lender, or such lender's assignee or successor in interest, to exercise its remedies under the First Lender Deed of Trust in the event of default under the First Lender Deed of Trust by Trustor. Such remedies under the First Lender Deed of Trust include the right of foreclosure or acceptance of a deed or assignment in lieu of foreclosure. After such foreclosure or acceptance of a deed in lieu of foreclosure, this City Deed of Trust shall be forever terminated and shall have no further effect as to the Home or any transferee thereafter; provided, however, if the holder of such First Lender Deed of Trust acquired title to the Home pursuant to a deed or assignment in lieu of foreclosure, this City Deed of Trust shall automatically terminate upon such acquisition of title provided that (i) the City has been given written notice of default under such First Lender Deed of Trust with a sixty (60) -day cure period (which requirement shall be satisfied by recordation of a notice of default under California Civil Code Section 2924, and (ii) the City shall not have cured the default within such sixty (60) -day period. 28. Request for Notice. Trustor_requests that copies of the notice of default and notice of sale be sent to the City at the address set forth in Section 14 above. IN WITNESS WHEREOF, Trustor has executed this City Deed of Trust as of the date first written above. [type buyer(s) name] EXHIBIT A LEGAL DESCRIPTION RECORDING REQUESTED BY: AND WHEN RECORDED MAIL TO: City of Cupertino 10300 Torre Avenue Cupertino, CA 95014 Attention: City Manager No fee for recording pursuant to Government Code Section 27383 (SPACE ABOVE THIS LINE FOR RECORDER'S USE) SUBORDINATION AGREEMENT (CITY TO LENDER) NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN YOUR SECURITY INTEREST IN AND RESTRICTIVE COVENANTS AFFECTING THE PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENT AND RESTRICTIVE COVENANTS. THIS SUBORDINATION AGREEMENT (the "Agreement") is entered into as of 202_, by and among the City of Cupertino, a municipal corporation (the "City"), (the "Owner") and (the "Lender"). RECITALS A. Owner is the fee simple owner of that certain real property located at Cupertino, California, as more particularly described in Exhibit A attached hereto (the "Property"), which is a below market rate unit restricted under the City's Below Market Rate Housing Program. B. In connection with the Owner's purchase of the Property, the City and the Owner entered into the following documents: (i) That certain Occupancy, Refinancing, and Resale Restriction Agreement with Option to Purchase (the "City Resale Restriction Agreement") dated as of , by and between City and the Owner, and recorded in the official records of Santa Clara County (the "Official Records") on as Document No. (ii) That certain Promissory Note dated as of Owner for the benefit of the City (the "City Promissory Note"); and , executed by 394\09\3137609.2 (iii) That certain Deed of Trust dated as of , executed by the Owner, as trustor, naming the City as beneficiary, securing the City Promissory Note and the City Resale Restriction Agreement, and recorded in the Official Records on as Document No. (the "City Deed of Trust", and collectively with the City Promissory Note, the "City Documents"). C. Lender has agreed to finance the First Loan in an amount not to exceed Dollars ($ ), at a fixed interest rate of percent (_%) per annum, for a term of thirty (30) years (the "First Loan"). The First Loan will be evidenced by a promissory note (the "Lender Note"), and secured by a deed of trust (the "Lender Deed of Trust") dated as of , 2021, and recorded concurrently herewith in the Official Records. The Lender Note and the Lender Deed of Trust are hereinafter collectively referred to as the "Lender Documents." D. Owner, the City, and Lender hereby acknowledge and agree that the documents referenced herein shall be recorded in the Official Records in the following order: 1. City Resale Restriction Agreement 2. Lender Deed of Trust 3. City Deed of Trust E. It is a condition of the First Loan that the Lender Documents shall unconditionally be and remain at all times a lien or charge upon the Property, prior and superior to the lien or charge of the City Documents. F. As a condition to subordinating the City Documents, the City requires that the Lender provide the City notice of defaults and the right to cure defaults under the Lender G. It is to the mutual benefit of the parties herein that the Lender Documents shall constitute a lien or charge upon the Property which is unconditionally prior and superior to the lien or charge of the City Documents. NOW, THEREFORE, in consideration of the recitals hereof, the mutual benefits accruing to the parties hereto and other valuable consideration, the receipt and sufficiency of which consideration is hereby acknowledged, it is hereby declared, understood and agreed as follows: 1. The Lender Documents and any renewals, modifications, extensions or advances thereunder or secured thereby shall unconditionally be and remain at all times liens, claims or charges on the Property therein described, prior and superior to the lien or charge of the City Documents. 2. The City declares, agrees and acknowledges that it intentionally and unconditionally waives, relinquishes and subordinates the lien or charge of the City Documents in favor of the lien or charge upon the Property of the Lender Documents and understands that in reliance upon, and in consideration of, this waiver, relinquishment and subordination, specific monetary obligations are being entered into which would not be made or entered into but for said 394\09\3137609.2 reliance upon this waiver, relinquishment and subordination. Lender acknowledges and agrees for the benefit of the City that the City Resale Restriction Agreement shall unconditionally be and at all times remain an encumbrance on the Property prior and superior to the rights of Lender under the Lender Documents. Lender intentionally and unconditionally subordinates all of Lender's right, title and interest in and to the Lender Documents to the encumbrance of the City Resale Restriction Agreement. 3. Lender covenants and agrees that in the event that Lender delivers to Owner a notice of default under the Lender Documents, Lender shall deliver to the City a copy of said notice concurrently with delivery to Owner, and the City shall have the right (but not the obligation) to cure any or all defaults specified in said notice for a period of ninety (90) days after the date of such notice, and Lender hereby agrees to accept all payments and all acts done by the City on behalf of Owner within the cure period specified herein as though the same had been timely done and performed by Owner, so that such acts and payments shall fully and totally cure and correct all such defaults, breaches, failures or refusals for all purposes. 4. As a condition for approval of this subordination, a request for notice of default and notice of sale regarding the First Loan shall be recorded in the Official Records for the benefit of the City. 5. With regard to the priority of the deeds of trust described herein, this Agreement shall be the sole and only agreement with regard to the subordination of the lien of the City Documents to the liens, claims or charges of the Lender Documents and shall supersede and cancel any prior agreements as to such subordination including, but not limited to, those provisions, if any, contained in the City Documents, which provide for the subordination of the restrictions contained therein to another deed or deeds of trust or to another mortgage or mortgages or to another regulatory agreement. 6. This Agreement shall be binding on and inure to the benefit of the legal representatives, heirs, successors and assigns of the parties. 7. This Agreement shall be governed by and construed in accordance with the laws of the State of California. 8. If any of the provisions or terms of this Agreement shall for any reason be held invalid or unenforceable, such invalidity or unenforceability shall not affect any other of the terms hereof, and this Agreement shall be construed as if such unenforceable term had never been contained herein. 9. This Agreement may be signed by different parties hereto in counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same agreement. [Signatures on following page] 394\09\3137609.2 IN WITNESS WHEREOF, the parties have executed this Agreement as of the day first above written. NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN YOUR SECURITY INTEREST IN THE PROPERTY BECOMING SUBJECT TO AND LOWER PRIORITY THAN THE LIEN(S) OF SOME OTHER LATER SECURITY INTEREST(S). IT IS RECOMMENDED THAT PRIOR TO THE EXECUTION OF THIS AGREEMENT, THE PARTIES CONSULT WITH THEIR ATTORNEYS WITH RESPECT HERETO. CITY: CITY OF CUPERTINO, a municipal corporation By: Greg Larson, City Manager APPROVED AS TO FORM AND LEGALITY BY: OWNER: , an individual an individual 394\09\3137609.2 CST Dat( LET Nan Its: A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. STATE OF CALIFORNIA COUNTY OF On , before me, , Notary Public, personally appeared , who 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 capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify UNDER PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Name: Notary Public 394\09\3137609.2 A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. STATE OF CALIFORNIA COUNTY OF On , before me, , Notary Public, personally appeared , who 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 capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify UNDER PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Name: Notary Public 394\09\3137609.2 A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. STATE OF CALIFORNIA COUNTY OF On , before me, , Notary Public, personally appeared , who 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 capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify UNDER PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Name: Notary Public 394\09\3137609.2 EXHIBIT A LEGAL DESCRIPTION OF THE PROPERTY 394\09\3137609.2