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PURCHASE MONEY HANDLING: The subdivider must impound all funds received from you in an escrow depository until legal title is delivered to you. (Refer to Section 11013.4(a) of the Business and Professions Code.) CONDITIONS OF SALE: If your purchase involves financing, a form of deed of trust and note will be used. These documents may contain the following infor- mation: An Acceleration Clause. This is a clause in a mortgage or deed of trust which provides that if the borrower (trustor) defaults on the loan or sells the property, the lender may declare the unpaid balance of the loan immedi- ately due and payable. An Acceleration Clause triggered by sale of the property is sometimes referred to as a due -on -sale clause. The California Supreme Court has decided that neither state chartered institu- tional lenders, nor private lenders can automatically enforce a due -on -sale clause when the property subject to the deed of trust is sold. This enables many persons to sell their homes to buyers who simply assume, or take subject to, the existing loan. The United States Supreme Court has held that a federally -chartered savings and loan association which is the mortgagee or beneficiary under a mortgage or deed of trust containing a due -on -sale clause may automatically enforce the clause when the securing property is sold. If your purchase of a lot or unit in this subdivision is financed by a loan from a federally -chartered lender, you should not expect to be able to sell the property in the future under an arrangement by which the buyer can assume and take subject to the existing loan. If the federally -chartered savings and loan association does not accelerate the loan, it is likely to insist upon modification of the loans as a condition to permitting assumption by the buyer. You may wish to obtain the advise of an attorney concerning the enforceability of a due -on -sale clause before making this purchase or before any effort to resell the property. A Late Charge. This means that if you are late in making your installment payments, you may have to pay an additional amount as a penalty. A Prepayment Penalty. This means that if you wish to pay off your loan in whole or in part before it is due, you may be required to pay an addi- tional amount as a penalty in accordance with the terms of the loan. BEFORE SIGNING, YOU SHOULD READ AND THOROUGHLY UNDERSTAND ALL LOAN DOCUMENTS. For further information in regard to this subdivision, you may call (916) 322- 2505 or examine the documents at the Department of Real Estate, 4433 Florin Road, Suite 250, Sacramento, CA 95823. 0386/SST/ccm Page 4 of 4 File No. 020892SA-FOO