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HomeMy WebLinkAboutD-1549 Tract 2307 - De Tolosa Ranch Recorded 09/25/2001EXHIBIT 'B' RECORDING REQUESTED BY: <SLO Estates, Inc. WHEN RECORDED MAIL TO: City Clerk City of San Luis Obispo 990 Palm Street San Luis Obispo, CA 93401 -3249 � a.- JULIE RQDEWALD San Luis Obispo County — Clerk/Recorder Recorded at the request of First American Title Company coca: 2001072163 C DG 9/25/2001 8:00 AM Titles: 1 Pages: 10 Fees 0.00 Taxes 0.00 Others 0.00 PAID $0.00 AFFORDABILITY AGREEMENT /DEED OF TRUST COVENANTS FOR TRACT 2307 THIS AGREEMENT (this "Agreement') is made and entered into as of this Iq day of be.r , 2001, by and between the City of San Luis Obispo (the "City ") and SLO Estates, Inc., a California corporation ( "Owner"), collectively referred to as "the parties." RECITAL S TR A. On December 15, 1998, the City Council adopted Resolution No. 8886, approving a 148 lot residential subdivision, located at the southern corner of the Madonna Road and Los Osos Valley Road intersection and more particularly described in Exhibit A attached hereto ( "the Project'); and B. Mitigation measure number 12 of that approval requires the applicant to provide affordable housing consistent with Policy 1.22.1 of the Housing Element; and C. The parties have agreed that the Owner shall construct and sell homes in conformance with the City's Affordable Housing Standards; and D. The City and Owner desire to assure that the affordable dwelling units identified in this Agreement remain affordable to moderate income households for a period of at least thirty (30) years. NOW, THEREFORE, the parties acknowledge and agree as follows: 1.01. "Effective Date" shall mean the date of the recordation of this Agreement in the Recorder's Office of the County of San Luis Obispo. 1.02 "Eligible Households" mean the persons and families meeting the definition under the City's Housing Element and Affordable Housing Standards. DI541-mv-) Page 2 Affordable Housing Agreernenl 1.03 "Houses" mean the duplex and patio single family residential structures to be constructed on the Properties. 1.04 "Moderate income households" mean persons and families whose income does not exceed one hundred twenty percent (120 %) of the County of San Luis Obispo area median income, adjusted for family size pursuant to the City of San Luis Obispo Affordable Housing Standards. 1.05 "Properties" mean those fourteen (14) specific real properties in the Project described in Exhibit B attached hereto and hereby incorporated by reference, which are intended to be sold to and occupied exclusively by Eligible Households during the Term pursuant to this Agreement. 1.06 'Property Term" means for each Property the thirty (30) year period commencing on the date of the recordation of the Grant Deed executed by the Owner or its successors and assigns conveying the Property to the first Eligible Household. 2.01. During the Property Term for each Property, the House to be constructed on the Property shall be used exclusively for Owner - occupied housing purposes and shall be sold or transferred only to Eligible Households. For the initial sale of each Property to an Eligible Household, the sales price shall be determined at time of building occupancy release, in accordance with City of San Luis Obispo affordable housing standards. For subsequent sales of the Property to Eligible Households, the sales prices shall be based on and consistent with then current City affordable housing standards. 2.02. The Grant Deeds for the transfers of interests in the Property by the Owner or its successors in interest and all future Grant Deeds for transfers of interests in the Properties by all subsequent owners of the Properties shall contain a restriction providing that during the Property Term for each Property there shall be no sale, lease, rental, or other transfer of the Property, except for the sale to an Eligible Household. Any sale, lease, rental, or other transfer of the Properties during their respective Property Terms in violation of this covenant shall be void. 2.03. The Owner agrees to retain the Housing Authority of the City of San Luis Obispo, or other qualified entity acceptable to the City, for screening of potential buyers of the Properties to determine if they qualify as Eligible Households. 2.04. These affordability requirements shall be covenants running with the : land as defined in California Civil Code Section 1460, and shall apply to the Properties. Pursuant to Civil Code Section 1468, which governs such covenants, the provisions of this Agreement shall be binding upon all parties having any right, title, or interest in any of the Properties described herein, or any portion thereof and on their heirs, successors in interest and assigns for their respective Property Terms. Page 3 Affordable Housing Agreement 2.05. When a Property is first sold to a buyer qualifying as an Eligible Household the buyer and City shall enter into an Affordable Housing Agreement which shall be recorded as an encumbrance on the Property, and secured by a recorded deed of trust. Said Agreement. and deed of trust shall establish the monetary difference between the initial purchase price and the initial appraised value as a loan payable to the City. Said loan shall accrue interest, compounded annually, at an annual rate equal to four and one half (4.5) points added to the Eleventh District Cost of Funds as currently published by the Federal Home Loan Bank Board, amortized over the Property Term, and the monthly payments of principal and interest shall be waived by the City as long as said buyer or subsequent buyers shall have been previously approved by the City Housing Authority or other entity approved by the City as an Eligible Household, continue to own and reside in the Property subject to the City loan as such buyer's principal residence. 2.06. If a Property is sold, leased, or otherwise transferred to an entity, other than to an Eligible Household, in violation of this Agreement, the City's loan shall immediately become due and payable from the proceeds of the sale of the Property. "Proceeds of sale" shall mean the value of any and all consideration, however denominated, received or to be received by the seller from the sale of the Property after the payment of all outstanding indebtedness under the first deed of trust and after all broker's, escrow, title and closing fees, costs and expenses in connection with the sale. 2.07. The City or the Housing Authority of the City of San Luis Obispo shall have the first right of refusal to purchase the Property at its then current fair market value in accordance with the terms and conditions set forth in this Agreement. The consideration for the City's right of first refusal shall consist of one percent (1 %) of the remaining City loan balance. The balance of the City loan remaining after deducting this one percent (1 %) of the loan balance shall be credited toward the purchase price if the City chooses to exercise the purchase option. The provisions of this Section shall not impair the rights of a first mortgage lender secured by a recorded deed of trust. The purchase money lender shall have a higher priority than the City's loan. The City's security shall be prioritized as a second mortgage. This first priority applies to the purchase money len.der's assignee or successor in interest, to: (i) Foreclose on the Property pursuant to the remedies permitted by law and written in a recorded contract or deed of trust; or (ii) Accept a deed of trust or assignment to the extent of the value of the unpaid first mortgage to the current market value in lieu of foreclosure in the event of default by a trustor; or (iii) Sell the Property to any person at a fair market value price subsequent to exercising its rights under the deed of trust. Any value in excess of the unpaid mortgage and costs of sale administration shall be used to satisfy the City loan. In no case may a first mortgage lender, exercising foreclosure Page 4 Affordable Housing Agreernent assignment in -lieu of foreclosure or sale, obtain value or rights to value greater than the value of the outstanding indebtedness on the first mortgage at the time of the debt clearing action. 2.08 In addition, the following types of transfers shall remain subject to the requirements of the City's loan and right of first refusal: transfer by gift, devise, or inheritance to the Owners spouse; transfer to a surviving joint tenant; transfer to a spouse as part of divorce or dissolution proceedings; or acquisition in conjunction with a marriage. 2.09 For purposes of determining the amount of the City's loan and the purchase price of the Property for the City's right of first refusal, the fair market value of a Property shall be determined as follows: (i) The then current Owner of the Property and the City shall attempt to agree on the fair market value of the Property. If the parties agree upon the fair market value, during the Agreement Period, the fair market value of the Property for purposes of determining the amount of the City's loan or the purchase price payable for the purchase of the Property pursuant to the right of first refusal shall be the agreed upon fair market value. If the parties are unable to agree upon the fair market value, they shall jointly select an independent MAI appraiser ( "Qualified Appraiser ") with at least five (5) years full time real estate appraisal experience for properties comparable to the Property in Santa Barbara County andlor San Luis Obispo County , to appraise and set the fair market value. The parties shall share equally the fees, costs and expenses of said Qualified Appraiser. (ii) If the parties fail to agree on the selection of a Qualified Appraiser within ten (10) days ( "Initial Appraiser Selection Period "), each party shall select their own Qualified Appraiser within ten (10) days following the Initial Appraiser Selection Period and the two Qualified Appraisers shall determine and attempt to agree upon the fair market value within fifteen (15) days following the Initial Appraiser Selection Period ( "Initial Appraisal Period "). Each party shall bear the expenses of their own Qualified Appraiser. In the event that either party fails to designate a Qualified Appraiser within the Initial Appraiser Selection Period, then the determination of the fair market value by the Qualified Appraiser selected by the other party shall be final and binding upon the parties. If the two Qualified Appraisers are able to agree as to the fair.market value of the Property within the Initial Appraisal Period, then the fair market value of the Property for purposes of determining the purchase price payable for the Property pursuant to the City's right of first refusal shall be shall be the determined by the two Qualified Appraisers. (iii) If the two Qualified Appraisers are unable to agree on the fair market value of the Property within the Initial Appraisal Period, then said Qualified Appraisers shall, Page 5 Affordable Housing Agreement within five (5) days of the expiration of the Initial Appraisal Period, designate a third Qualified Appraiser. If a third Qualified Appraiser is appointed, then the fees and costs of the third appraiser shall be borne equally by the then current owner of the Property and prospective buyer. The third Qualified Appraiser shall determine the fair market value of the Property within the ten (10) -day period following his or her appointment ( "Final Appraisal Period "). The fair market value of the Property for purposes of determining the purchase price payable for the purchase of the Property pursuant to the City's right of first refusal shall be as follows: If the highest appraised fair market value is more than one hundred five percent (105 %) of the middle appraised fair market value, then the highest appraised fair market value shall be disregarded. If the lowest appraised fair market value is less than ninety -five percent (95 %) of the middle appraised fair market value, then the lowest appraised fair market value shall be disregarded. If there is then only one remaining appraised fair market value, that fair market value shall be the fair market value of the Property for purposes of determining the purchase price payable for the purchase of the Property pursuant to the City's right of first refusal. If there is then more than one remaining appraised fair market value, the remaining appraised fair market value shall be averaged, and the fair market value of the Property for purposes of determining the the purchase price payable for the purchase of the Property pursuant to the City's right of first refusal shall be the average of such appraised fair market values. 3.01. In the event the Owner has not completed the construction of -the Houses -and received a final building inspection on all Houses within two (2) years from the Effective Date, the Ownership and control of the Properties shall revert to the City. Extensions of this period of time may be granted at the discretion of the City if the Owner has demonstrated just cause and a. "good faith" effort to develop the Properties. ba Page 6 Affordable Housing Agreement 4.01. Unless otherwise provided, all notices herein required shall delivered in person or sent by United States first class mail, the address of the respective parties as specified below or that may be later specified by the parties hereto: If to the City: City of San Luis Obispo Community Development Director 990 Palm Street San Luis Obispo, CA 93401 -3249 If to the Owner: SLO Estates, Inc. 200 East Carrillo Street, Suite 200 Santa Barbara California,93101 Attention: Kenneth P. Slaught and With a copy to: SLO Estates, Inc. 1880 Santa Barbara Street, Suite F San Luis Obispo, California 93401 Attention: Patrick N. Smith Seed Mackall & Cole ,LLP 1332 Anacapa Street, Suite 200 Santa Barbara, California 93101 Attention: David R. Reese, Esq. be in writing, and postage prepaid to at other addresses 4.02. The Owner hereby specifically acknowledges and agrees to be bound by the covenants respecting affordability on the Properties contained herein. 4.03 This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which shall constitute one and the same instrument. IN WITNESS WHEREOF, this Agreement has been duly executed by the undersigned as of the date set forth below. SLO ESTATES INC., a California co tion By: Patrick N. Smith, President , A mneth P. Slai ice President CITY: Date —4-0( Date Jo n Man eville, Community Development Director APPROVED AS TO FORM AND LEGAL EFFECT: `: STATE OF CALIFORNIA ) ) ss. COUNTY OF San Luis Obispo ) On August 27 , 2001 before me, the undersigned, a Notary Public in and for said County and State, personally appeared Patrick N. Smith , personally known to me (�r#�e c3Ri�e basafac�r�a flee) to be the person( whose name(* is /ara subscribed to the within instrument and acknowledged to me that he/sh:& e executed the same in h is1IqW1kWr authorized capacity( ), and that by hisATPMMKsignaturekce) on the instrument the person(T4, or the entity upon behalf of which the person( &� acted, executed the instrument. WITNESS my hand and official seal. 4(22�* (-C ot Public STATE OF CALIFORNIA ) ) ss. COUNTY OF SANTA BARBARA ) �, • rw On , 2001 before me, the undersigned, a Notary Public in and for said County and State, personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is /are subscribed to the within instrument and acknowledged to me that he /she /they executed the same in his /her /their authorized 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. WITNESS my hand and official seal. Notary Public _ .._...._. ! _.. __ ._.i..._.. -.- LOS OSOS VALLEY ROAD - - i i i EL TIGRE COURT 1 i j TONINI DRIVE M ^ rn ^ O 01 Op 1� � i _ FOREMAN COURT CA WELSH COURT \ cr W ``t � _`�'•� I O l0 O � O O M O \ h W O W h SPOONER DRIVE _ h M _ CIRCLE b Ohl Owl Obi 8 O^ � o, h ETO o , V N N a0 Q� ON N N N N t�'f a O O q Ql •� e DRIVE _ _ - �* '^ ^' ^ DeVAUL RANCH o N b o, m b I b b V tD W b W .• J v U v o� O _ h h M5 J O _ cp o M Q O � 1 I oaroNd Id .LI81HX3 EXHIBIT B DESCRIPTION OF REAL PROPERTY The properties located at Tract 2307 27D -1, 28D -2, 29P, 31D -2, 32D -1, 33P, 35P 102P, 120D -1, 131D-2, 132D -1, 138D -1, 140P, and 142D -1. Lots with a 1 or 2 designation following denote single (1) or two story (2) as further described below. 1. Eto Circle Lot # 27 Duplex APN 2. Eto Circle Lot # 28 Duplex APN 3. Eto Circle Lot # 29 Patio APN 4. Eto Circle Lot #31 Duplex APN 5. Eto Cirlce Lot #32 Duplex APN 6. Eto Circle Lot # 33 Patio APN 7. Eto Circle Lot #35 Patio APN 8. Spooner Drive Lot # 102 Patio APN 9. Foreman Court Lot # 120 Duplex APN 10. Foreman Court Lot # 131 Duplex APN 11. Foreman Court Lot #132 Duplex APN 12. Tonini Drive Lot #138 Duplex APN 13. Tonini Drive Lot #140 Patio APN 14. Tonini Drive Lot #142 Duplex APN END OF DOCUMENT EXHIBIT 'B' RECORDING REQUESTED BY: �SLO Estates, Inc. WHEN RECORDED MAIL TO: City Clerk City of San Luis Obispo 990 Palm Street San Luis Obispo, CA 93401 -3249 45b}4.,,— lS JULIE RODEWALD San Luis Obispo County— Clerk/Recorder Recorded at the request of First American Title Com coca: 2001072163 any DG 9/25/2001 8:00 AM Titles: 1 Pages: 10 Fees 0.00 Taxes 0.00 Others 0.00 PAID $0.00 AFFORDABILITY AGREEMENT /DEED OF TRUST COVENANTS FOR TRACT 2307 THIS AGREEMENT (this "Agreement ") is made and entered into as of this Iq day of _ 6epkwtb,,Py— , 2001, by and between the City of San Luis Obispo (the "City") and SLO Estates, Inc., a California corporation ( "Owner'), collectively referred to as "the parties." RECITALS A. On December 15, 1998, the City Council adopted Resolution No. 8886, approving a 148 lot residential subdivision, located at the southern corner of the Madonna Road and Los Osos Valley Road intersection and more particularly described in Exhibit A attached hereto ( "the Project "); and B. Mitigation measure number 12 of that approval requires the applicant to provide affordable housing consistent with Policy 1.22.1 of the Housing Element; and C. The parties have agreed that the Owner shall construct and sell homes in conformance with the City's Affordable Housing Standards; and D. The City and Owner desire to assure. that the affordable dwelling units identified in this Agreement remain affordable to moderate income households for a period of at least thirty (30) years. NOW, THEREFORE, the parties acknowledge and agree as follows: 1.01. "Effective Date" shall mean the date of the recordation of this Agreement in the Recorder's Office of the County of San Luis Obispo. 1.02 "Eligible Households" mean the persons and families meeting the definition under the City's Housing Element and Affordable Housing Standards. v)sqQ Page 2 Affordable Housing Agreement 1.03 "Houses" mean the duplex and patio single family residential structures to be constructed on the Properties. 1.04 Moderate income households" mean persons and families whose income does not exceed one hundred twenty percent (120 %) of the County of San Luis Obispo area median income, adjusted for family size pursuant to the City of San Luis Obispo Affordable Housing Standards. 1.05 "Properties" mean those fourteen (14) specific real properties in the Project described in Exhibit B attached hereto and hereby incorporated by reference, which are intended to be sold to and occupied exclusively by Eligible Households during the Term pursuant to this Agreement. 1.06 "Property Term" means for each Property the thirty (30) year period commencing on the date of the recordation of the Grant Deed executed by the Owner or its successors and assigns conveying the Property to the first Eligible Household. ARTIC:I F 2. RESTRICTIONS 2.01. During the Property Term for each Property, the House to be constructed on the Property shall be used exclusively for Owner -occupied housing purposes and shall be sold or transferred only to Eligible Households. For the initial sale of each Property to an Eligible Household, the sales price shall be determined at time of building occupancy release, in accordance with City of San Luis Obispo affordable housing standards. For subsequent sales of the Property to Eligible Households, the sales prices shall be based on and consistent with then current City affordable housing standards. 2.02. The Grant Deeds for the transfers of interests in the Property by the Owner or its successors in interest and all future Grant Deeds for transfers of interests in the Properties by all subsequent owners of the Properties shall contain a restriction providing that during the Property Term for each Property there shall be no sale, lease, rental, or other transfer of the Property, except for the sale to an Eligible Household. Any sale, lease, rental, or other transfer of the Properties during their respective Property Terms in violation of this covenant shall be void. 2.03. The Owner agrees to retain the Housing Authority of the City of San Luis Obispo, or other qualified entity acceptable to the City, for screening of potential buyers of the Properties to determine if they qualify as Eligible Households. 2.04. These affordability requirements shall be covenants running with the land as defined in California Civil Code Section 1460, and shall apply to the Properties. Pursuant to Civil Code Section 1468, which governs such covenants, the provisions of this Agreement shall be binding upon all parties having any right, title, or interest in any of the Properties described herein, or any portion thereof and on their heirs, successors in interest and assigns for their respective Property Terms. Page 3 Affordable Housing Agreen nt 2.05. When a Property is first sold to a buyer qualifying as an Eligible Household the buyer and City shall enter into an Affordable Housing Agreement which shall be recorded as an encumbrance on the Property, and secured by a recorded deed of trust. Said Agreement and deed of trust shall establish the monetary difference between the initial purchase price and the initial appraised value as a loan payable to the City. Said loan shall accrue interest, compounded annually, at an annual rate equal to four and one half (4.5) points added to the Eleventh District Cost of Funds as currently published by the Federal Home Loan Bank Board, amortized over the Property Term, and the monthly payments of principal and interest shall be waived by the City as long as said buyer or subsequent buyers shall have been previously approved by the City Housing Authority or other entity approved by the City as an Eligible Household, continue to own and reside in the Property subject to the City loan as such buyer's principal residence. 2.06. If a Property is sold, leased, or otherwise transferred to an entity, other than to an Eligible Household, in violation of this Agreement, the City's loan shall immediately become due and payable from the proceeds of the sale of the Property. "Proceeds of sale" shall mean the value of any and all consideration, however denominated, received or to be received by the seller from the sale of the Property after the payment of all outstanding indebtedness under the first deed of trust and. after all broker's, escrow, title and closing fees, costs and expenses in connection with the sale. 2.07. The City or the Housing Authority of the City of San Luis Obispo shall have the first right of refusal to purchase the Property at its then current fair market value in accordance with the terms and conditions set forth in this Agreement. The consideration for the City's right of first refusal shall consist of one percent (1 %) of the remaining City loan balance. The balance of the City loan remaining after deducting this one percent (1 %) of the loan balance shall be credited toward the purchase price if the City chooses to exercise the purchase option. The provisions of this Section shall not impair the rights of a first mortgage lender secured by a recorded deed of trust. The purchase money lender shall have a higher priority than the City's loan. The City's security shall be prioritized as a second mortgage. This first priority applies to the purchase money len.der's assignee or successor in interest, to: (i) Foreclose on the Property pursuant to the remedies permitted by law and written in a recorded contract or deed of trust; or (ii) Accept a deed of trust or assignment to the extent of the value of the unpaid first mortgage to the current market value in lieu of foreclosure in the event of default by a trustor; or (iii) Sell the Property to any person at a fair market value price subsequent to exercising its rights under the deed of trust. Any value in excess of the unpaid mortgage and costs of sale administration shall be used to satisfy the City loan. In no case may a first mortgage lender, exercising foreclosure Page 4 Affordable Housing Agrccrtxni assignment in -lieu of foreclosure or sale, obtain value or rights to value greater than the value of the outstanding indebtedness on the first mortgage at the time of the debt clearing action. 2.08 In addition, the following types of transfers shall remain subject to the requirements of the City's loan and right of first refusal: transfer by gift, devise, or inheritance to the Owners spouse; transfer to a surviving joint tenant; transfer to a spouse as part of divorce or dissolution proceedings; or acquisition in conjunction with a marriage. 2.09 For purposes of determining the amount of the City's loan and the purchase price of the Property for the City's right of first refusal, the fair market value of a Property shall be determined as follows: (i) The then current Owner of the Property and the City shall attempt to agree on the fair market value of the Property. If the parties agree upon the fair market value, during the Agreement Period, the fair market value of the Property for purposes of determining the amount of the City's loan or the purchase price payable for the purchase of the Property pursuant to the right of first refusal shall be the agreed upon fair market value. If the parties are unable to agree upon the fair market value, they shall jointly select an independent MAI appraiser ( "Qualified Appraiser ") with at least five (5) years full time real estate appraisal experience for properties comparable to the Property in Santa Barbara County and \or San Luis Obispo County , to appraise and set the fair market value. The parties shall share equally the fees, costs and expenses of said Qualified Appraiser. (ii) If the parties fail to agree on the selection of a Qualified Appraiser within ten (10) days ( "Initial Appraiser Selection Period "), each party shall select their own Qualified Appraiser within ten (10) days following the Initial Appraiser Selection Period and the two Qualified Appraisers shall determine and attempt to agree upon the fair market value within fifteen (15) days following the Initial Appraiser Selection Period ( "Initial Appraisal Period "). Each party shall bear the expenses of their own Qualified Appraiser. In the event that either party fails to designate a Qualified Appraiser within the Initial Appraiser Selection Period, then the determination of the fair market value by the Qualified Appraiser selected by the other party shall be final and binding upon the parties. If the two Qualified Appraisers are able to agree as to the fair market value of the Property within the Initial Appraisal Period, then the fair market value of the Property for purposes of determining the purchase price payable for the Property pursuant to the City's right of first refusal shall be shall be the determined by the two Qualified Appraisers. (iii) If the two Qualified Appraisers are unable to agree on the fair market value of the Property within the Initial Appraisal Period, then said Qualified Appraisers shall, Page 5 Affordable Housing Agreement within five (5) days of the expiration of the Initial Appraisal Period, designate a third Qualified Appraiser. If a third Qdalified Appraiser is appointed, then the fees and costs of the third appraiser shall be borne equally by the then current owner of the Property and prospective buyer. The third Qualified Appraiser shall determine the fair market value of the Property within the ten (10) -day period following his or her appointment ( "Final Appraisal Period "). The fair market value of the Property for purposes of determining the purchase price payable for the purchase of the Property pursuant to the City's right of first refusal shall be as follows: If the highest appraised fair market value is more than one hundred five percent (105 %) of the middle appraised fair market value, then the highest appraised fair market value shall be disregarded. If the lowest appraised fair . market value is less than ninety -five percent (95 %) of the middle appraised fair market value, then the lowest appraised fair market value shall be disregarded. If there is then only one remaining appraised fair market value, that fair market value shall be the fair market value of the Property for purposes of determining the purchase price payable for the purchase of the Property pursuant to the City's right of first refusal. If there is then more than one remaining appraised fair market value, the remaining appraised fair market value shall be averaged, and the fair market value of the Property for purposes of determining the the purchase price payable for the purchase of the Property pursuant to the City's right of first refusal shall be the average of such appraised fair market values. 3.01. In the event the Owner has not completed the construction of-the Houses-and received a final building inspection on all Houses within two (2) years from the Effective Date, the Ownership and control of the Properties shall revert to the City. Extensions of this period of time may be granted at the discretion of the City if the Owner has demonstrated just cause and a. "good faith" effort to develop the Properties. Page 6 Affordable Housing Agreement 4.01. Unless otherwise provided, all notices herein required shall be in writing, and delivered in person or sent by United States first class mail, postage prepaid to the address of the respective parties as specified below or at other addresses that may be later specified by the parties hereto: If to the City: City of San Luis Obispo Community Development Director 990 Palm Street San Luis Obispo, CA 93401 -3249 If to the Owner: SLO Estates, Inc. 200 East Carrillo Street, Suite 200 Santa Barbara Californiac93101 Attention: Kenneth P. Slaught and With a copy to: SLO Estates, Inc. 1880 Santa Barbara Street, Suite F San Luis Obispo, California 93401 Attention: Patrick N. Smith Seed Mackall & Cole ,LLP 1332 Anacapa Street, Suite 200 Santa Barbara, California 93101 Attention: David R. Reese, Esq. 4.02. The Owner hereby specifically acknowledges and agrees to be bound by the covenants respecting affordability on the Properties contained herein. 4.03 This Agreement maybe executed in any number of counterparts, each of which shall be an original, but all of which shall constitute one and the same instrument. IN WITNESS WHEREOF, this Agreement has been duly executed by the undersigned as of the date set forth below. SLO ESTATES INC., a California co tion By: Patrick N. Smith, neth P. Slaug President CITY: Date —dn 0 ( Date Jo n Man eville, Community Development Director APPROVED AS TO FORM AND LEGAL EFFECT: 2 STATE OF CALIFORNIA ) ) ss. COUNTY OF San Luis Obispo ) On August 27 , 2001 before me, the undersigned, a Notary Public in and for said County and State, personally appeared Patrick N. Smith personally known to me (eT=proved:te=me=en=thL-=basis:� aEterTeV#eAee) to be the. person(i&} whose nameA is /aRx subscribed to the within instrument and acknowledged to me that he /ala *executed the same in his/tgwt< authorized capacity(), and that by his#ffNtcsignature(cx) on the instrument the person(s4, or the entity upon behalf of which the person(o acted, executed the instrument. WITNESS my hand and official seal. Not ry Public STATE OF CALIFORNIA ) ) ss. COUNTY OF SANTA BARBARA ) On , 2001 before me, the undersigned, a Notary Public in and for said County and State, personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is /are subscribed to the within instrument and acknowledged to me that he /she /they executed the same in his /her /their authorized 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. WITNESS my hand and official seal. Notary Public ,I IOWONd V 1181MB , - - - - - LOS OSOS VALLEY ROAD i f I i � i ri I i . . ..... EL TIGRE COURT 1 .1. j TONINI DRIVE ..-�.. I b O1 y. M � 'C• v v •••• M ^ ^i - • ^ • Y••! •'. (i••• M ^� M M O M o� ep 1� N N FOREMAN COURT I ° N N N i ° WELSH COURT Lu • I b vl b W a SPOONER DRIVE O\ ETD CIRCLE n ep m O O o0 b b b p b � b N N N N N ai n N N o� b Ol DRIVE °s '^ .F '^ `" ^ DeVAUL RANCH p _ ^ eo b IQN. Y O b J cy- IU a •Q v W M m � (11 n J � J O o M ao oft% rz U left L r ,I W ,I IOWONd V 1181MB EXHIBIT B DESCRIPTION OF REAL PROPERTY The properties located at Tract 2307 27D -1, 28D -2, 29P, 31D-2, 32D -1, 33P, 35P 102P, 120D -1, 131D -2, 132D -1, 138D -1, 140P, and 142D -1. Lots with a 1 or 2 designation following denote single (1) or two story (2) as further described below. 1. Eto Circle Lot # 27 Duplex APN 2. Eto Circle Lot # 28 Duplex APN 3. Eto Circle Lot # 29 Patio APN 4. Eto Circle Lot #31 Duplex APN 5. Eto Cirlce Lot #32 Duplex APN 6. Eto Circle Lot # 33 Patio APN 7. Eto Circle Lot #35 Patio APN 8. Spooner Drive Lot # 102 Patio APN 9. Foreman Court Lot # 120 Duplex APN 10. Foreman Court Lot # 131 Duplex APN 11. Foreman Court Lot #132 Duplex APN 12. Tonini Drive Lot #138 Duplex APN 13. Tonini Drive Lot #140 Patio APN 14. Tonini Drive Lot #142 Duplex APN END OF DOCUMEN • RECORDING REQUESTED BY: �SLO Estates, Inc. WHEN RECORDED MAIL TO: City Clerk City of San Luis Obispo 990 Palm Street San Luis Obispo, CA 93401 -3249 4Eb�b— L= i JULIE RODEWALD San Luis Obispo County— Clerk/Recorder Recorded at the request of First American Title Company DOC #: 2001072163 r DG 9/25/2001 8:00 AM Titles: 1 Pages: 10 Fees 0.00 Taxes 0.00 Others 0.00 PAID $0.00 AFFORDABILITY AGREEMENT /DEED OF TRUST COVENANTS FOR TRACT 2307 THIS AGREEMENT (this "Agreement ") is made and entered into as of this ILI day of 6epkmbeer- , 2001, by and between the City of San Luis Obispo (the "City ") and SLO Estates, Inc., a California corporation ( "Owner"), collectively referred to as "the parties." A. On December 15, 1998, the City Council adopted Resolution No. 8886, approving a 148 lot residential subdivision, located at the southern corner of the Madonna Road and Los Osos Valley Road intersection and more particularly described in Exhihit A attached hereto ( "the Project "); and B. Mitigation measure number 12 of that approval requires the applicant to provide affordable housing consistent with Policy 1.22.1 of the Housing Element; and C. The parties have agreed that the Owner shall construct and sell homes in conformance with the City's Affordable Housing Standards; and D. The City and Owner desire to assure that the affordable dwelling units identified in this Agreement remain affordable to moderate income households for a period of at least thirty (30) years. NOW, THEREFORE, the parties acknowledge and agree as follows: 1.01. "Effective Date" shall mean the date of the recordation of this Agreement in the Recorder's Office of the County of San Luis Obispo. 1.02 "Eligible Households" mean the persons and families meeting the definition under the City's Housing Element and Affordable Housing Standards. DI-5qQ Page 2 Affordable Housing Agreement 1.03 "Houses" mean the duplex and patio single family residential structures to be constructed on the Properties. 1.04 "Moderate income households" mean persons and families whose income does not exceed one hundred twenty percent (120 %) of the County of San Luis Obispo area median income, adjusted for family size ipursuant to the City of San Luis Obispo Affordable Housing Standards. 1.05 "Properties" mean those fourteen (14) specific real properties in the Project described in Exhibit B attached hereto and hereby incorporated by reference, which are intended to be sold to and occupied exclusively by Eligible Households during the Term pursuant to this Agreement. 1.06 "Property Term" means for each Property the thirty (30) year period commencing on the date of the recordation of the Grant Deed executed by the Owner or its successors and assigns conveying the Property to the first Eligible Household. 2.01. During the Property Term for each Property, the House to be constructed on the Property shall be used exclusively for Owner - occupied housing purposes and shall be sold or transferred only to Eligible Households. For the initial sale of each Property to an Eligible Household, the sales price shall be determined at time of building occupancy release, in accordance with City of San Luis Obispo affordable housing standards. For subsequent sales of the Property to Eligible Households, the sales prices shall be based on and consistent with then current City affordable housing standards. 2.02. The Grant Deeds for the transfers of interests in the Property by the Owner or its successors in interest and all future Grant Deeds for transfers of interests in the Properties by all subsequent owners of the Properties shall contain a restriction providing that during the Property Term for each Property there shall be no sale, lease, rental, or other transfer of the Property, except for the sale to an Eligible Household. Any sale, lease, rental, or other transfer of the Properties during their respective Property Terms in violation of this covenant shall be void. 2.03. The Owner agrees to retain the Housing Authority of the City of San Luis Obispo, or other qualified entity acceptable to the City, for screening of potential buyers of the Properties to determine if they qualify as Eligible Households. 2.04. These affordability requirements shall be covenants running with the land as defined in California Civil Code Section 1460, and shall apply to the Properties. Pursuant to Civil Code Section 1468, which governs such covenants, the provisions of this Agreement shall be binding upon all parties having any right, title, or interest in any of the Properties described herein, or any portion thereof and on their heirs, successors in interest and assigns for their respective Property Terms. Page 3 Affordable Housing Agreement 2.05. When a Property is first sold to a buyer qualifying as an Eligible Household the buyer and City shall enter into an Affordable Housing Agreement which shall be recorded as an encumbrance on the Property, and secured by a recorded deed of trust. Said Agreement and deed of trust shall establish the monetary difference between the initial purchase price and the initial appraised value as a loan payable to the City. Said loan shall accrue interest, compounded annually, at an annual rate equal to four and one half (4.5) points added to the Eleventh District Cost of Funds as currently published by the Federal Home Loan Bank Board, amortized over the Property Term, and the monthly payments of principal and interest shall be waived by the City as long as said buyer or subsequent buyers shall have been previously approved by the City Housing Authority or other entity approved by the City as an Eligible Household, continue to own and reside in the Property subject to the City loan as such buyer's principal residence. 2.06. If a Property is sold, leased, or otherwise transferred to an entity, other than to an Eligible Household, in violation of this Agreement, the City's loan shall immediately become due and payable from the proceeds of the sale of the Property. "Proceeds of sale" shall mean the value of any and all consideration, however denominated, received or to be received by the seller from the sale of the Property after the payment. of all outstanding indebtedness under the first deed of trust and after all broker's, escrow, title and closing fees, costs and expenses in connection with the sale. 2.07. The City or the Housing Authority of the City of San Luis Obispo shall have the first right of refusal to purchase the Property at its then current fair market value in accordance with the terms and conditions set forth in this Agreement. The consideration for the City's right of first refusal shall consist of one percent (1 %) of the remaining City loan balance. The balance of the City loan remaining after deducting this one percent (1%) of the loan balance shall be credited toward the purchase price if the City chooses to exercise the purchase option. The provisions of this Section shall not impair the rights of a first mortgage lender secured by a recorded deed of trust. The purchase money lender shall have a higher priority than the City's loan. The City's security shall be prioritized as a second mortgage. This first priority applies to the purchase money lender's assignee or successor in interest, to: (i) Foreclose on the Property pursuant to the remedies permitted by law and written in a recorded contract or deed of trust; or (ii) Accept a deed of trust or assignment to the extent of the value of the unpaid first mortgage to the current market value in lieu of foreclosure in the event of default by a trustor; or (iii) Sell the Property to any person at a fair market value price subsequent to exercising its rights under the deed of trust. Any value in excess of the unpaid mortgage and costs of sale administration shall be used to satisfy the City loan. In no case may a first mortgage lender, exercising foreclosure Page 4 Affordable Housing Agreement assignment in -lieu of foreclosure or sale, obtain value or rights to value greater than the value of the outstanding indebtedness on the first mortgage at the time of the debt clearing action. 2.08 In addition, the following types of transfers shall remain subject to the requirements of the City's loan and right of first refusal: transfer by gift, devise, or inheritance to the Owner's spouse; transfer to a surviving joint tenant; transfer to a spouse as part of divorce or dissolution proceedings; or acquisition in conjunction with a marriage. 2.09 For purposes of determining the amount of the City's loan and the purchase price of the Property for the City's right of first refusal, the fair market value of a Property shall be determined as follows: (i) The then current Owner of the Property and the City shall attempt to agree on the fair market value of the Property. If the parties agree upon the fair market value, during the Agreement Period, the fair market value of the Property for purposes of determining the amount of the City's loan or the purchase price payable for the purchase of the Property pursuant to the right of first refusal shall be the agreed upon fair market value. If the parties are unable to agree upon the fair market value, they shall jointly select an independent MAI appraiser ( "Qualified Appraiser ") with at least five (5) years full time real estate appraisal experience for properties comparable to the Property in Santa Barbara County and \or San Luis Obispo County , to appraise and set the fair market value. The parties shall share equally the fees, costs and expenses of said Qualified Appraiser. (ii) If the parties fail to agree on the selection of a Qualified Appraiser within ten (10) days ( "Initial Appraiser Selection Period "), each party shall select their own Qualified Appraiser within ten (10) days following the Initial Appraiser Selection Period and the two Qualified Appraisers shall determine and attempt to agree upon the fair market value within fifteen (15) days following the Initial Appraiser Selection Period ( "Initial Appraisal Period "). Each party shall bear the expenses of their own Qualified Appraiser. In the event that either party fails to designate a Qualified Appraiser within the Initial Appraiser Selection Period, then the determination of the fair market value by the Qualified Appraiser selected by the other party shall be final and binding upon the parties. If the two Qualified Appraisers are able to agree as to the fair market value of the Property within the Initial Appraisal Period, then the fair market value of the Property for purposes of determining the purchase price payable for the Property pursuant to the City's right of first refusal shall be shall be the determined by the two Qualified. Appraisers. (iii) If the two Qualified Appraisers are unable to agree on the fair market value of the Property within the Initial Appraisal Period, then said Qualified Appraisers shall, Page 5 Affordable Housing Agreement within five (5) days of the expiration of the Initial Appraisal Period, designate a third Qualified Appraiser. If a third Qualified Appraiser is appointed, then the fees and costs of the third appraiser shall be borne equally by the then current owner of the Property and prospective buyer. The third Qualified Appraiser shall determine the fair market value of the Property within the ten (10) -day period following his or her appointment ( "Final Appraisal Period "). The fair market value of the Property for purposes of determining the purchase price payable for the purchase of the Property pursuant to the City's right of first refusal shall be as follows: If the highest appraised fair market value is more than one hundred five percent (105 %) of the middle appraised fair market value, then the highest appraised fair market value shall be disregarded. If the lowest appraised fair market value is less than ninety -five percent (95 %) of the middle appraised fair market value, then the lowest appraised fair market value shall be disregarded. If there is then only one remaining appraised fair market value, that fair market value shall be the fair market value of the Property for purposes of determining the purchase price payable for the purchase of the Property pursuant to the City's right of first refusal. If there is then more than one remaining appraised fair market value, the remaining appraised fair market value shall be averaged, and the fair market value of the Property for purposes of determining the the purchase price payable for the purchase of the Property pursuant to the City's right of first refusal shall be the average of such appraised fair market values. 3.01. In the event the Owner has not completed the construction of the Houses and received a final building inspection on all Houses within two (2) years from the Effective Date, the Ownership and control of the Properties shall revert to the City. Extensions of this period of time may be granted at the discretion of the City if the Owner has demonstrated just cause and a "good faith" effort to develop the Properties. • Page 6 Affordable Housing Agreement • 4.01. Unless otherwise provided, all notices herein required shall be in writing, and delivered in person or sent by United States first class mail, postage prepaid to the address of the respective parties as specified below or at other addresses that may be later specified by the parties hereto: If to the City: City of San Luis Obispo Community Development. Director 990 Palm Street San Luis Obispo, CA 93401 =3249 If to the Owner: SLO Estates, Inc. 200 East Carrillo Street, Suite 200 Santa Barbara California 93101 Attention: Kenneth P. Slaught and With a copy to: SLO Estates, Inc. 1880 Santa Barbara Street, Suite F San Luis Obispo, California 93401 Attention: Patrick N. Smith Seed Mackall & Cole ,LLP 1332 Anacapa Street, Suite 200 Santa Barbara, California 93101 Attention: David R. Reese, Esq. 4.02. The Owner hereby specifically acknowledges and agrees to be bound by the covenants respecting affordability on the Properties contained herein. 4.03 This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which shall constitute one and the same instrument. IN WITNESS WHEREOF, this Agreement has been duly executed by the undersigned as of the date set forth below. SLO ESTATEQ, INC., a California co tion By: Patrick N. Smith, Plresident _ Cenneth P. Slaug Vice President CITY: r, Jo n Man evi le, Community Development Director APPROVED AS TO FORM AND LEGAL EFFECT: MW sel, City Attorney a7 "� Date % —d 0 ( Date STATE OF CALIFORNIA ) ) ss. COUNTY OF San Luis Obispo ) On August 27 , 2001 before me, the undersigned, a Notary Public in and for said County and State, personally appeared Patrick N. Smith personally known to me (eF tia=rne=eFf4t%=ba;stFuf sstisfaeteFTe i Rae) to be the person(* whose name(* is /amcsubscribed to the within instrument and acknowledged to me that he /g#as*W executed the same in his/#q UKauthorized capacity( ), and that by his4Tf*%4?1signatureN on the instrument the person(z4, or the entity upon behalf of which the person(# acted, executed the instrument. WITNESS my hand and official seal. STATE OF CALIFORNIA ss. COUNTY OF SANTA BARBARA On , 2001 before me, the undersigned, a Notary Public in and for said County and State, personally appeared , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is /are subscribed to the within instrument and acknowledged to me that he /she /they executed the same in his /her /their authorized 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. WITNESS my hand and official seal. Notary Public CD CD O EXHIBIT A PROJECT CL 0, a� O p M H0NV8 JnVAIQ CD CD O EXHIBIT A PROJECT 0, M H0NV8 JnVAIQ _Mlao a try 00 o 4b. 43% -a.. & %in %4D Ln ca NOO 83NOO 3 A180 NJ OViO OD Oa r. 4cm 31381) 013 . . ........ iynoi Hs 3' lanoo 3a0a 13 A ca %0 18n019 NVH3803 ;z z z C= ZZ 3AI80 ININ01 --- - ------- . ..... (IV08 A311VA SOSO-SOL-1 . .. .. .... Ln cn 00 o 4b. 43% -a.. %in %4D Ln ca O NJ 4:-. %n co r. 4cm 31381) 013 . . ........ 3' lanoo 3a0a 13 EXHIBIT B DESCRIPTION OF REAL PROPERTY The properties located at Tract 2307 27D -1, 28D -2, 29P, 31 D -2, 32D -1, 33P, 35P 102P, 120D -1, 131 D -2, 132D -1, 138D -1, 140P, and 142D -1. Lots with a 1 or 2 designation following denote single (1) or two story (2) as further described below. 1: Eto Circle Lot # 27 Duplex APN 2. Eto Circle Lot # 28 Duplex APN 3. Eto Circle Lot # 29 Patio APN 4: Eto Circle Lot #31 Duplex APN 5. Eto Cirlce Lot #32 Duplex APN 6. Eto Circle Lot # 33 Patio APN 7. Eto Circle Lot #35 Patio APN 8. Spooner Drive Lot # 102 Patio APN 9. Foreman Court Lot # 120 Duplex APN 10. Foreman Court Lot # 131 Duplex APN 11. Foreman Court Lot #132 Duplex APN 12. , Tonini Drive Lot #138 Duplex APN 13. Tonini Drive Lot #140 Patio APN 14. Tonini Drive Lot #142 Duplex APN END OF DOCUMENT EXHIBIT 'B' • RECORDING REQUESTED BY: <SLO Estates, Inc.-) WHEN RECORDED MAIL TO: City Clerk City of San Luis Obispo 990 Palm Street San Luis Obispo, CA 93401 -3249 —LT_ JULIE RODEWALD OG San Luis Obispo county = Clerk/Recorder 9125/2001 Recorded at the request of 8:00 AM First American Title Company D O C # : 2001072163 Titles: 1 Pages: 10 Fees 0.00 Taxes 0.00 Others 0.00 PAID $0.00 AFFORDABILITY AGREEMENT /DEED OF TRUST COVENANTS FOR TRACT.2307 THIS AGREEMENT (this "Agreement ") is made and entered into as of this Iq day of 5 ,,j�kwtb -r- , 2001, by and between the City of San Luis Obispo (the "City ") and SLO Estates, Inc., a California corporation ( "Owner"), collectively referred to as "the parties." R I C, 9, r RECITALS A. On December 15, 1998, the City Council adopted Resolution No. 8886, approving a 148 lot residential subdivision, located at the southern corner of the Madonna Road and Los Osos Valley Road intersection and more particularly described in Fxhihit A attached hereto ( "the Project "); and B. Mitigation measure number 1:2 of that approval requires the applicant to provide affordable housing consistent with Policy 1.22.1 of the Housing Element; and C. The parties have agreed that the Owner shall construct and sell homes in conformance with the City's Affordable Housing Standards; and D. The City and Owner desire to assure that the affordable dwelling units identified in this Agreement remain affordable to moderate income households for a period of at least thirty (30) years. NOW, THEREFORE, the parties acknowledge and agree as follows: 1.01. "Effective Date" shall mean the date of the recordation of this Agreement in the Recorder's Office of the County of San Luis Obispo. 1.02 "Eligible Households" mean the persons and families meeting the definition under the City's Housing Element and Affordable Housing Standards. DI.sqq ,Page 2 • Affordable Housing Agreement • 1.03 "Houses" mean the duplex and patio single family residential structures to be constructed on the Properties. 1.04 1 Moderate income households" mean persons and families whose income does not exceed one hundred twenty percent (120°/x) of the County of San Luis Obispo area median income, adjusted for family size pursuant to the City of San Luis Obispo Affordable Housing Standards. 1.05 "Properties" mean those fourteen (14) specific real properties in the Project described in Exhibit B attached hereto and hereby incorporated by reference, which are intended to be sold to and occupied exclusively by Eligible Households during the Term pursuant to this Agreement. 1.06 "Property Term" means for each Property the thirty (30) year period commencing on the date of the recordation of the Grant Deed executed by the Owner or its successors and assigns conveying the Property to the first Eligible Household. 2.01. During the Property Term for each Property, the House to be constructed on the Property shall. be used exclusively for Owner - occupied housing purposes and shall be sold or transferred only to Eligible Households. For the initial sale of each Property to an Eligible Household, the sales price shall be determined at time of building occupancy release, in accordance with City of San Luis Obispo affordable housing standards. For subsequent sales of the Property to Eligible Households, the sales prices shall be based on and consistent with then current City affordable housing standards. 2.02. The Grant Deeds for the transfers of interests in the Property by the Owner or its successors in interest and all future Grant Deeds for transfers of interests in the Properties by all subsequent owners of the Properties shall contain a restriction providing that during the Property Term for each Property there shall be no sale, lease, rental, or other transfer of the Property, except for the sale to an Eligible Household. Any sale, lease, rental, or other transfer of the Properties during their respective Property Terms in violation of this covenant shall be void. 2.03. The Owner agrees to retain the Housing Authority of the City of San Luis Obispo, or other qualified entity acceptable to the City, for screening of potential buyers of the Properties to determine if they qualify as Eligible Households. 2.04. These affordability requirements shall be covenants running with the, land as defined in California Civil Code Section 1460, and shall apply to the Properties. Pursuant to Civil Code Section 1468, which governs such covenants, the provisions of this Agreement shall be binding upon all parties having any right, title, or interest in any of the Properties described herein, or any portion thereof and on their heirs, successors in interest and assigns for their respective Property Terms. Page 3 • • Affordable Housing Agreement 2.05. When a Property is first sold to a buyer qualifying as an Eligible Household the buyer and City shall enter into an Affordable Housing Agreement which shall be recorded as an encumbrance on the Property, and secured by a recorded deed of trust. Said Agreement. and deed of trust shall establish the monetary difference between the initial purchase price and the initial appraised value as a loan payable to the City. Said loan shall accrue interest, compounded annually, at an annual rate equal to four and one half (4.5) points added to the Eleventh District Cost of Funds as currently published by the Federal Home Loan Bank Board, amortized over the Property Term, and the monthly payments of principal and interest shall be waived by the City as long as said buyer or subsequent buyers shall have been previously approved by the City Housing Authority or other entity approved by the City as an Eligible Household, continue to own and reside in the Property subject to the City loan as such buyer's principal residence. 2.06. If a Property is sold, leased, or otherwise transferred to an entity, other than to an Eligible Household, in violation of this Agreement, the City's loan shall immediately become due and payable from the proceeds of the sale of the Property. "Proceeds of sale" shall mean the value of any and all consideration, however denominated, received or to be received by the seller from the sale of the Property after the payment of all outstanding indebtedness under the first deed of trust and after all broker's, escrow, title and closing fees, costs and expenses in connection with the sale. 2.07. The City or the Housing Authority of the City of San Luis Obispo shall have the first right of refusal to purchase the Property at its then current fair market value in accordance with the terms and conditions set forth in this Agreement. The consideration for the City's right of first refusal shall consist of one percent (1 %) of the remaining City loan balance. The balance of the City loan remaining after deducting this one percent (1%) of the loan balance shall be credited toward the purchase price if the City chooses to exercise the purchase option. The provisions of this Section shall not impair the rights of a first mortgage lender secured by a recorded deed of trust. The purchase money lender shall have a higher priority than the City's loan. The City's security shall be prioritized as a second mortgage. This first priority applies to the purchase money lender's assignee or successor in interest, to: (i) Foreclose on the Property pursuant to the remedies permitted by law and written in a recorded contract or deed of trust; or (ii) Accept a deed of trust or assignment to the extent of the value of the unpaid first mortgage to the current market value in lieu of foreclosure in the event of default by a trustor; or (iii) Sell the Property to any person at a fair market value price subsequent to exercising its rights under the deed of trust. Any value in excess of the unpaid mortgage and costs of sale administration shall be used to satisfy the City loan. In no case may a first mortgage lender, exercising foreclosure Page 4 • • Affordable Housing Agreement assignment in -lieu of foreclosure or sale, obtain value or rights to value greater than the value of the outstanding. indebtedness on the first mortgage at the time of the debt clearing action. 2.08 In addition, the following types of transfers shall remain subject to the requirements of the City's loan and right of first refusal: transfer by gift, devise, or inheritance to the Owner's spouse; transfer to a surviving joint tenant; transfer to a spouse as part of divorce or dissolution proceedings; or acquisition in conjunction with a marriage. 2.09 For purposes of determining the amount of the City's loan and the purchase price of the Property for the City's right of first refusal, the fair market value of a Property shall be determined as follows: (i) The then current Owner of the Property and the City shall attempt to agree on the fair market value of the Property. If the parties agree upon the fair market value, during the Agreement Period, the fair market value of the Property for purposes of determining the amount of the City's loan or the purchase price payable for the purchase of the Property pursuant to the right of first refusal shall be the agreed upon fair market value. If the parties are unable to agree upon the fair market value, they shall jointly select an independent MAI appraiser ( "Qualified Appraiser") with at least five (5) years full time real estate appraisal experience for properties comparable to the Property in Santa Barbara County and \or San Luis Obispo County , to appraise and set the fair market value. The parties shall share equally the fees, costs and expenses of said Qualified Appraiser. (ii) If the parties fail to agree on the selection of a Qualified Appraiser within ten (10) days ( "Initial. Appraiser Selection Period "), each party shall select their own Qualified Appraiser within ten (10) days following the Initial Appraiser Selection Period and the two Qualified Appraisers shall determine and attempt to agree upon the fair market value within fifteen (15) days following the Initial Appraiser Selection Period ( "Initial Appraisal Period "). Each party shall bear the expenses of their own Qualified Appraiser. In the event that either party fails to designate a Qualified Appraiser within the Initial. Appraiser Selection Period, then the determination of the fair market value by the Qualified Appraiser selected by the other party shall be final and binding upon the parties. If the two Qualified Appraisers are able to agree as to the fair market value of the Property within the Initial Appraisal Period, then the fair market value of the Property for purposes of determining the purchase price payable for the Property pursuant to the City's right of first refusal shall be shall be the determined by the two Qualified Appraisers. (iii) If the two Qualified Appraisers are unable to agree on the fair market value of the Property within the Initial Appraisal Period, then said Qualified Appraisers shall, Page 5 Affordable. Housing Agreement I7 within five (5) days of the expiration of the Initial Appraisal Period, designate a third Qualified Appraiser. If a third Qualified Appraiser is appointed, then the fees and costs of the third appraiser shall be borne equally by the then current owner of the Property and prospective buyer. The third Qualified Appraiser shall determine the fair market value of the Property within the ten (10) -day period following his or her appointment ( "Final Appraisal Period "). The fair market value of the Property for purposes of determining the purchase price payable for the purchase of the Property pursuant to the City's right of first refusal shall be as follows: If the highest appraised fair market value is more than one hundred five percent (105 %) of the middle appraised fair market value, then the highest appraised fair market value shall be disregarded. If the lowest appraised fair market value is less_than ninety -five percent (95 %) of the middle appraised fair market value, then the lowest appraised fair market value shall be disregarded. If there is then only one remaining appraised fair market value, that fair market value shall be the fair market value of the Property for purposes of determining the purchase price payable for the purchase of the Property pursuant to the City's right of first refusal. If there is then more than one remaining appraised fair market value, the remaining appraised fair market value shall be averaged, and the fair market value of the Property for purposes of determining the the purchase price payable for the purchase of the Property pursuant to the City's right of first refusal shall be the average of such appraised fair market values. ARTICLE 3 TIMING 3.01. In the event the Owner has not completed the construction of the -Houses and received a final building inspection on all Houses within two (2) years from the Effective Date, the Ownership and control of the Properties shall revert to the City. Extensions of this period of time may be granted at the discretion of the City if the Owner has demonstrated just cause and a. "good faith" effort to develop the Properties. No 0 1 * Page 6 Affordable Housing Agreement 4.01. Unless otherwise provided, all notices herein required shall be in writing, and delivered in person or sent by United States first class mail, postage prepaid to the address of the respective parties as specified below or at other addresses that may be later specified by the parties hereto: If to the City: City of San Luis Obispo Community Development Director 990 Palm Street San Luis Obispo, CA 93401 -3249 If to the Owner: SLO Estates, Inc. 200 East Carrillo Street, Suite 200 Santa Barbara. CaliforniaQ93101 Attention: Kenneth P. Slaught and With a copy to: SLO Estates, Inc. . 1880 Santa Barbara Street; Suite F San Luis Obispo, California 93401 Attention: Patrick N. Smith Seed Mackall & Cole ,LLP 1332 Anacapa Street, Suite 200 Santa Barbara, California 93101 Attention: David R. Reese, Esq. 4.02. The Owner hereby specifically acknowledges and agrees to be bound by the covenants respecting affordability on the Properties contained herein. 4.03 This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of ' which shall constitute one and the same instrument. IN WITNESS WHEREOF, this Agreement, has been duly executed by the undersigned as of the date set forth below. SLO ESTATES INC., a California co tion By: Patrick N. Smith, President Kenneth P. Slaug Vice President CITY: Date ' -- 0 ( Date Jo n Man eville, 4Comr Development Director APPROVED AS TO FORM AND LEGAL EFFECT: STATE OF CALIFORNIA ) ) ss. COUNTY OF San Luis Obispo ) On August 27 , 2001 before me, the undersigned, a Notary Public in and for said County and State, personally appeared Patrick. N. Smith personally known to me (ef te=me=GR=t#�baeis:B€�c�FT to be the person( whose name(* is /apcsubscribed to the within instrument and acknowledged to me that he /sIgnft gxexecuted the same in his/tawMtP�KNauthorized capacity(), and that by his4Vf#WKsignature (4) on the instrument the person(r4, or the entity upon behalf of which the person(# acted, executed the instrument. WITNESS my hand and official seal. Not ry Public STATE OF CALIFORNIA ss. COUNTY OF SANTA BARBARA On , 2001 before me, the undersigned, a Notary Public in and for said County and State, personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is /are subscribed to the within instrument and acknowledged to me that he /she /they executed the same in his /her /their authorized 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. WITNESS my hand and official seal. Notary Public io3mNd -0 V 1181HX3 LDS O.OS VALLEY ROAD EL TIGRE COURT TONINI DRIVE Ooh m FOREMAN COURT et Ln CID 4.0 WELSH COURT Ck-- O QLl U-b ^ co 43% 00 DRIVE 'o °° ca Lo cl% c7% SpOONER cft co 00 ao c" CIRCLE %.o ZK a% cn. c" C:b cz, -ETO cn -W UN to N r4 c", cm CY% cn ! -0- en 01 Ol op ;z co R cv$ cn DRIVE -.0. m DeVAUL RANCH rm un, C-0 cn t0 cv% Ln ko Li -C-r) b L> Ln cn (-.3 Ln CY$ LLJ Ln q7% ^ Ln ° QL N Lr% c Ian lima io3mNd -0 V 1181HX3 EXHIBIT- B DESCRIPTION OF REAL PROPERTY The properties located at Tract 2307 27D -1, . 28D -2, 29P, 31 D -2, 32D -1, 33P, 35P 102P, 120D -1, 131D-2, 132D -1, 138D -11 140P, and 142D -1. Lots with a 1 or 2 designation following denote single (1) or two story (2) as further described below. 1. Eto Circle Lot # 27 Duplex APN 2. Eto Circle Lot # 28 Duplex APN 3. Eto Circle Lot # 29 Patio APN 4. Eto Circle Lot #31 Duplex APN 5. Eto Circce Lot #32 Duplex APN 6. Eto Circle Lot # 33 Patio APN 7. Eto Circle Lot #35 Patio APN 8. Spooner Drive Lot # 102 Patio APN 9. Foreman Court Lot # 120 Duplex APN 10. Foreman Court Lot # 131 Duplex APN 11. Foreman Court . Lot #132 Duplex APN 12. Tonini Drive Lot #138 Duplex APN 13. Tonini Drive Lot #140 Patio APN 14. Tonini Drive Lot #142 Duplex APN FEND OF DOCUMENT r� p'ME RI } STATE OF CALIFORN A }ss. COUNTY OF ri�Ua. before me, , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is /are subscribed to the within instrument and acknowledged to me that he /she /they executed the same in his /her /their authorized 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. WITNESS my hand and official seal. Signature (This area for official notarial seal) Title of Documents KAREN L CC3L'RN COMM. # 1413293 < a Notafy Public -Ugonr Co uttty of San Luis Obispo N My Comm. EXP. May, 20, 2007 Date of Document (gicy No. of)Pages Other signatures not acknowledged 3008 (1/94) (General) First American Title Insurance Company 4 . . • i � A M E RI -9 STATE OF ' / IA Iss. COUNTY _ -- On pel , pIdNjUrtcuty KIIUWII LU IIIC ( e the persono) whose nam *) is /afe subscribed to the within instrument and acknowledged to me that he/sh4p,4hey executed the same in his/her/094r authorized capacity(*), and that by his/heffteir signature* on the instrument the person or the entity upon behalf of which the perso*) acted, executed the instrument. WITNESS my hand *d oM�Wseal. / j 4 Signature Title of Document Date of Document Other signatures not acknowledged (This area for official notarial seal) No. of Pages _ Commission r# 1413256 Nutury Public . CoMm. o San Luis Obbpo Candy M v Ca m 80=May21. 3006 (1/94) (General) First American Title Insurance Company EXHIBIT 'B' • RECORDING REQUESTED BY: <SLO Estates, Inc. WHEN RECORDED MAIL TO: City Clerk City of San Luis Obispo 990 Palm Street San Luis Obispo, CA 93401 -3249 4Eb}{o— L--T-- JULIE RODEWALD DG San Luis Obispo County— Clerk/Recorder 9/25/2001 Recorded at the request of 8:00 AM First American Title Company D o c # : 2001072163 Tales: 1 Pages: 10 Fees 0.00 Taxes 0.00 Others 0.00 PAID $0.00 AFFORDABILITY AGREEMENT /DEED OF TRUST COVENANTS FOR TRACT 2307 THIS AGREEMENT (this "Agreement ") is made and entered into as of this Iq day of 6 ,,12km be.r , 2001, by and between the City of San Luis Obispo (the "City ") and SLO Estates, Inc., a California corporation ( "Owner"), collectively referred to as "the parties." RECITALS A. On December 15, 1998, the City Council adopted Resolution No. 8886, approving a 148 lot residential subdivision, located at the southern corner of the Madonna Road and Los Osos Valley Road intersection and more particularly described in Fxhihit A attached hereto ( "the Project "); and B. Mitigation measure number 1.2 of that approval requires the' applicant to provide affordable housing consistent with Policy 1.22.1 of the Housing Element; and C. The parties have agreed that the Owner shall construct and sell homes in conformance with the City's Affordable Housing Standards; and D. The City and Owner desire to assure. that the affordable dwelling units identified in this Agreement remain affordable to moderate income households for a period of at least thirty (30) years. NOW, THEREFORE, the parties acknowledge and agree as follows: 1.01. "Effective Date" shall mean the date of the recordation of this Agreement in the Recorder's Office of the County of San Luis Obispo. 1.02 "Eligible Households" mean the persons and families meeting the definition under the City's Housing Element and Affordable Housing Standards. ,Page 2 Affordable Housing Agreement 1.03 "Houses" mean the duplex and patio single family residential structures to be constructed on the Properties. 1.04 "Moderate income households" mean persons and families whose income does not exceed one hundred twenty percent (120 %) of the County of San Luis Obispo area median income, adjusted for family size pursuant to the City of San Luis Obispo Affordable Housing Standards. 1.05 "Properties" mean those fourteen (14) specific real properties in the Project described in Exhibit B attached hereto and hereby incorporated by reference, which are intended to be sold to and occupied exclusively by Eligible Households during the Term pursuant to this Agreement. 1.06 "Property Term" means for each Property the thirty (30) year period commencing on the date of the recordation of the Grant Deed executed by the Owner or its successors and assigns conveying the Property to the first Eligible Household. 2.01. During the Property Term for each Property, the House to be constructed on the Property shall be used exclusively for Owner - occupied housing purposes and shall be sold or transferred only to Eligible Households. For the initial sale of each Property to an Eligible Household, the sales price shall be determined at time of building occupancy release, in accordance with City of San Luis Obispo affordable housing standards. For subsequent sales of the Property to Eligible Households, the sales prices shall be based on and consistent with then current City affordable housing standards. 2.02. The Grant Deeds for the transfers of interests in the Property by the Owner or its successors in interest and all future Grant Deeds for transfers of interests in the Properties by all subsequent owners of the Properties shall contain a restriction providing that during the Property Term for each Property there shall be no sale, lease, rental, or other transfer of the Property, except for the sale to an Eligible Household. Any sale, lease, rental, or other transfer of the Properties during their respective Property Terms in violation of this covenant shall be void. 2.03. The Owner agrees to retain the Housing Authority of the City of San Luis Obispo, or other qualified entity acceptable to the City, for screening of potential buyers of the Properties to determine if they qualify as Eligible Households. 2.04. These affordability requirements shall be covenants running with the - land as defined in California Civil Code Section 1460, and shall apply to the Properties. Pursuant to Civil Code Section 1468, which governs such covenants, the provisions of this Agreement shall be binding upon all parties having any right, title, or interest in any of the Properties described herein, or any portion thereof and on their heirs, successors in interest and assigns for their respective Property Terms. Page 3 • Affordable Housing Agreement • 2.05. When a Property is first sold to a buyer qualifying as an Eligible Household the buyer and City shall enter into an Affordable Housing Agreement which shall be recorded as an encumbrance on the Property, and secured by a recorded deed of trust. Said Agreement. and deed of trust shall establish the monetary difference between the initial purchase price and the initial appraised value as a loan payable to the City. Said loan shall accrue interest, compounded annually, at an annual rate equal to four and one half (4.5) points added to the Eleventh District Cost of Funds as currently published by the Federal Home Loan Bank Board, amortized over the Property Term, and the monthly payments of principal and interest shall be waived by the City as long as said buyer or subsequent buyers shall have been previously approved by the City Housing Authority or other entity approved by the City as an Eligible Household, continue to own and reside in the Property subject to the City loan as such buyer's principal residence. 2.06. If a Property is sold, leased, or otherwise transferred to an entity, other than to an Eligible Household, in violation of this Agreement, the City's loan shall immediately become due and payable from the proceeds of the sale of the Property. "Proceeds of sale" shall mean the value of any and all consideration, however denominated, received or to be received by the seller from the sale of the Property after the payment of all outstanding indebtedness under the first deed of trust and after all broker's, escrow, title and closing fees, costs and expenses in connection with the sale. 2.07. The City or the Housing Authority of the City of San Luis Obispo shall have the first right of refusal to purchase the Property at its then current fair market value in accordance with the terms and conditions set forth in this Agreement. The consideration for the City's right of first refusal shall consist of one percent (1 %) of the remaining City loan balance. The balance of the City loan remaining after deducting this one percent (1 %) of the loan balance shall be credited toward the purchase price if the City chooses to exercise the purchase option. The provisions of this Section shall not impair the rights of a first .mortgage lender secured by a recorded deed of trust. The purchase money lender shall have a higher priority than the City's loan. The City's security shall be prioritized as a second mortgage. This first priority applies to the purchase money lender's assignee or successor in interest, to: (i) Foreclose on the Property pursuant to the remedies permitted by law and written in a recorded contract or deed of trust; or (ii) Accept a deed of trust or assignment to the extent of the value of the unpaid first mortgage to the current market value in lieu of foreclosure in the event of default by a trustor; or (iii) Sell the Property to any person at a fair market value price subsequent to exercising its rights under the deed of trust. Any value in excess of the unpaid mortgage and costs of sale administration shall be used to satisfy the City loan. In no case may a first mortgage lender, exercising foreclosure Page 4 • Affordable Housing Agreement • assignment in -lieu of foreclosure or sale, obtain value or rights to value greater than the value of the outstanding. indebtedness on the first mortgage at the time of the debt clearing action. 2.08 In addition, the following types of transfers shall remain subject to the requirements of the City's loan and right of first refusal: transfer by gift, devise, or inheritance to the Owners spouse; transfer to a surviving joint tenant; transfer to a spouse as part of divorce or dissolution proceedings; or acquisition in conjunction with a marriage. 2.09 For purposes of determining the amount of the City's loan and the purchase price of the Property for the City's right of first refusal, the fair market value of a Property shall be determined as follows: (i) The then current Owner of the Property and the City shall attempt to agree on the fair market value of the Property. If the parties agree upon the fair market value, during the Agreement Period, the fair market value of the Property for purposes of determining the amount of the City's loan or the purchase price payable for the purchase of the Property pursuant to the right of first refusal shall be the agreed upon fair market value. If the parties are unable to agree upon the fair market value, they shall jointly select an independent MAI appraiser ( "Qualified Appraiser') with at least five (5) years full time real estate appraisal experience for properties comparable to the Property in Santa Barbara County and \or San Luis Obispo County , to appraise and set the fair market value. The parties shall share equally the fees, costs and expenses of said Qualified Appraiser. (ii) If the parties fail to agree on the selection of a Qualified Appraiser within ten (10) days ( "Initial Appraiser Selection Period "), each party shall select their own Qualified Appraiser within ten (10) days following the Initial Appraiser Selection Period and the two Qualified Appraisers shall determine and attempt to agree upon the fair market value within fifteen (15) days following the Initial Appraiser Selection Period ( "Initial Appraisal Period "). Each party shall bear the expenses of their own Qualified Appraiser. In the event that either party fails to designate a Qualified Appraiser within the Initial Appraiser Selection Period, then the determination of the fair market value by the Qualified Appraiser selected by the other party shall be final and binding upon the parties. If the two Qualified Appraisers are able to agree as to the fair market value of the Property within the Initial Appraisal Period, then the fair market value of the Property for purposes of determining the purchase price payable for the Property pursuant to the City's right of first refusal shall be shall be the determined by the two Qualified Appraisers. (iii) If the two Qualified Appraisers are unable to agree on the fair market value of the Property within the Initial Appraisal Period, then said Qualified Appraisers shall, Page S • Affordable Housing Agreement • within five (5) days of the expiration of the Initial Appraisal Period, designate a third Qualified Appraiser. If a third Qualified Appraiser is appointed, then the fees and costs of the third appraiser shall be borne equally by the then current owner of the Property and prospective buyer. The third Qualified Appraiser shall determine the fair market value of the Property within the ten (10) -day period following his or her appointment ( "Final Appraisal Period "). The fair market value of the Property for purposes of determining the purchase price payable for the purchase of the Property pursuant to the City's right of first refusal shall be as follows: If the highest appraised fair market value is more than one hundred five percent (105 %) of the middle appraised fair market value, then the highest appraised fair market value shall be disregarded. If the lowest appraised fair market value is less Ahan ninety -five percent (95 %) of the middle appraised fair market value, then the lowest appraised fair market value shall be disregarded. If there is then only one remaining appraised fair market value, that fair market value shall be the fair market value of the Property for purposes of determining the purchase price payable for the purchase of the Property pursuant to the City's right of first refusal. If there is then more than one remaining appraised fair market value, the remaining appraised fair market value shall be averaged, and the fair market value of the Property for purposes of determining the the purchase price payable for the purchase of the Property pursuant to the City's right of first refusal shall be the average of such appraised fair market values. 3.01. In the event the Owner has not completed the construction of -the- Houses and _. received a final building inspection on all Houses within two (2) years from the Effective Date, the Ownership and control of the Properties shall revert to the City. Extensions of this period of time may be granted at the discretion of the City if the Owner has demonstrated just cause and a- "good faith" effort to develop the Properties. so Page 6 Affordable - Housing Agreement 4.01. Unless otherwise provided, all notices herein required shall be in writing, and delivered in person or sent by United States first class mail, postage prepaid to the address of the respective parties as specified below or at other addresses that may be later specified by the parties hereto: If to the City: City of San Luis Obispo Community Development Director 990 Palm Street San Luis Obispo, CA 93401 -3249 If to the Owner: SLO Estates, Inc. 200 East Carrillo Street, Suite 200 Santa Barbara California 93101 Attention: Kenneth P. Slaught and With a copy to: SLO Estates, Inc. . 1880 Santa Barbara Street, Suite F San Luis Obispo, California 93401 Attention: Patrick N. Smith Seed Mackall & Cole ,LLP 1332 Anacapa Street, Suite 200 Santa Barbara, California 93101 Attention: David R. Reese, Esq. 4.02. The Owner hereby specifically acknowledges and agrees to be bound by the covenants respecting affordability on the Properties contained herein. 4.03 This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of ' which shall constitute one and the same instrument. IN WITNESS WHEREOF, this Agreement has been duly executed by the undersigned as of the date set forth below. SLO ESTATES INC., a California co tion By :- Patrick. N. Smith, President 9 neth P. Slaug e President CITY: Date -- 61 0 ( Date Jo n Man eville, Community Development Director APPROVED AS TO FORM AND LEGAL EFFECT: 2 0 STATE OF CALIFORNIA ) ) ss. COUNTY OF San Luis Obispo ) • On August 27 , 2001 before me, the undersigned, a Notary Public in and for said County and State, personally appeared Patrick N. Smith personally known to me �bas�#�c�rAee) to be the person(p) whose name(o is /aaetsubscribed to the within instrument and acknowledged to me that he /shm*Wexecuted the same in h isthwMwV authorized capacity(), and that by his4VMMI(signature�x) on the instrument the person(T4, or the entity upon behalf of which the person(o acted, executed the instrument. WITNESS my hand and official seal. SANDRA L NAUMANN C.ommisOM # 12M70 spry Pub8c — cdttomla Q.I,iGti San � pbypp county Not ry Public L-W=�� 20.ZV4 STATE OF CALIFORNIA ss. COUNTY OF SANTA BARBARA On , 2001 before me, the undersigned, a Notary Public in and for said County and State, personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is /are subscribed to the within instrument and acknowledged to me that he /she /they executed the same in his /her /their authorized 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. WITNESS my hand and official seal. Notary Public � O N Lt's LOS OWS VALLEY ROAD ---------- . ..... .. . ... . E L 77GRE COURT r,,s Lrw ioamMd V 1181HX3 TONINI DRIVE cr% Rj C, FOREMAN COURT rL- cr - WELSH COURT a= cm, co Py% cmo DRIVE 410 M Cc C,% ul% CID to CIRCLE cK cn -ETO c's N CY% ca t, on D1 Q1 cft 4m c7b DRIVE C-1 Ln -.a. M DeVAUL RANCH to l0 O l0 ZZ � O N Lt's r,,s Lrw ioamMd V 1181HX3 EXHIBIT B DESCRIPTION OF REAL PROPERTY The properties located at Tract 2307 27D -1, 28D -2, 29P, 31 D -2, 32D -1, 33P, 35P 102P, 120D -1, 131D-2, 132D -1, 138D -1, 140P, and 142D -1. Lots with a 1 or 2 designation following denote single (1) or two story (2) as further described below. 1. Eto Circle Lot # 27 Duplex APN 2. Eto Circle Lot # 28 Duplex APN 3. Eto Circle Lot # 29 Patio APN 4. Eto Circle Lot #31 Duplex APN 5. Eto Cirlce Lot #32 Duplex APN 6. Eto Circle Lot # 33 Patio APN 7. Eto Circle Lot #35 Patio APN 8. Spooner Drive Lot # 102 Patio APN 9. Foreman Court Lot # 120 Driplex APN 10. Foreman Court Lot # 131 Duplex APN 11. Foreman Court Lot #132 Duplex APN 12. Tonini Drive Lot #138 Duplex APN 13. Tonini Drive Lot #140 Patio APN 14. Tonini Drive Lot #142 Duplex APN END OF DOCUMENT T p' M E R I r9 } STATE OF CALIFORN A ll--�- }ss. COUNTY OF � n�LU, g ©K�1 ' } On before me,va"'..0 persona appeared • is . , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is /are subscribed to the within instrument and acknowledged to me that he /she /they executed the same in his /her /their authorized 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. WITNESS my hand and official seal. Signature KAREN L GC-BURN N COMM. # 1413233 < Notafy Public -ug7r is Co untyy of San Luis Obispo M VN y Comm. Exp. May. 20, 2007 (This area for official notarial seal) Title of Document Lo U &-7plo M". Date of Document ( 1-j"- No. off Pages Other signatures not acknowledged 3008 (1/94) (General) First American Title Insurance Company Second Deed of Trust Page 4 1 determine whether prospective buyers qualify as eligible households as defined in the Affordable 2 Housing Standards. 3 4 SECTION 2.05. Covenants Binding. These affordability requirements shall be covenants 5 running with the land as defined in California Civil Code Section 1460, and shall apply to the 6 Real Property as further described on Exhibit A. Pursuant to Civil Code Section 1468, which 7 governs such covenants, the provisions of this Agreement shall be binding upon all parties 8 having any right, title, or interest in any of the properties described herein, or any portion thereof 9 and on their heirs, successors in interest and assigns for a period of 30 years from the initial date 10 of sale of the property. The parties agree that all future deeds or transfers of interest regarding 11 the properties shall show the restrictions of this Agreement for as long as the Agreement is in 12 effect. 13 14 SECTION 2.06. First Right of Refusal. Upon resale, Trustor and Trustee agree that the City or 15 the Housing Authority of the City of San Luis Obispo shall have the first right of refusal to 16 purchase the property or properties at the then current appraised value, as further described in the 17 Note. 18 19 SECTION 2.07. Performance of Obligations Secured. Trustor shall promptly pay when due 20 the indebtedness evidenced by the Note and any late charges, costs and/or fees provided for in the 21 Note and shall further perform fully and in a timely manner all other obligations of Trustor 22 contained herein or in the Note. 23 24 ARTICLE 3 — INSURANCE REQUIREMENTS 25 26 SECTION 3.01. Trustor shall keep the Property and all improvements thereon insured against 27 loss or damage by fire with extended all -risk coverage clauses, including vandalism and 28 malicious mischief clauses, in an amount not less than one hundred percent (100 %) of the full 29 replacement cost of such improvements with a company or companies and in such form and with 30 such endorsements as may be approved or required by Beneficiary. 31 32 SECTION 3.02. Trustor shall also maintain in full force and effect a policy of homeowners' 33 general liability insurance insuring Trustor against liability for bodily injury, property damage 34 and personal injury arising out of the operation, use or occupancy of the Property. The initial 35 amount of such insurance shall be One Hundred Thousand Dollars ($100,000.00) per occurrence 36 and not in the aggregate and shall be subject to periodic increase based upon increased liability 37 awards or the reasonable recommendation of Trustor's professional insurance advisor. Trustor 38 shall name Beneficiary as an additional insured under such policy. Such insurance shall be 39 primary with respect to any insurance maintained by Beneficiary and shall not call on 40 Beneficiary's insurance for contributions. 41 42 SECTION 3.03. Trustor shall pay all premiums for the insurance policies required to be 43 maintained under this Deed of Trust within fifteen (15) days after Trustor's receipt of a copy of 4 Second Deed of Trust Page 5 is 1 the premium statement or other evidence of the amount due. At least thirty (30) days prior to the 2 expiration of such policy, Trustor shall deliver to Beneficiary a renewal of such policy. 4 SECTION 3.04. Any insurance which Trustor is required to maintain under this Deed of Trust 5 shall include a provision requiring that the insurance carrier give Beneficiary not less than thirty 6 (30) days written notice prior to any cancellation or modification of such coverage. If Trustor (i) 7 fails to deliver any policy or renewal to Beneficiary required under this Deed of Trust within the 8 prescribed time period or (ii) if any such policy is canceled or modified to reduce the amount or 9 type of coverage without Beneficiary's consent and no substituted comparable coverage is 10 obtained by Trustor prior to such cancellation or modification, Beneficiary may obtain such 11 insurance. In such case, Trustor shall reimburse Beneficiary for the cost of such insurance within 12 fifteen (15) days after receipt of a statement that indicates the cost of such insurance and upon 13 proof that Beneficiary has paid said statement. 14 15 SECTION 3.05. Trustor shall maintain all insurance required under this Deed of Trust with 16 companies holding a "general policy rating" of A -8 or better, as set forth in the most current issue 17 of "Best Key Rating Guide." Trustor acknowledges that the insurance described in this Section is 18 for the primary benefit of Beneficiary. Beneficiary makes no representation as to the adequacy of 19 such insurance to protect Trustor's or Beneficiary's interests. Therefore, Trustor shall obtain any 20 additional property or liability insurance that Trustor deems necessary to protect Beneficiary and 21 Trustor, in the exercise of reasonable judgment. 22 23 SECTION 3.06. Notwithstanding anything to the contrary contained herein, Trustor's obligation 24 to carry the insurance provided for herein may be brought within the coverage of a so- called 25 blanket policy or policies of insurance carried and maintained by Trustor; provided, however, 26 that Beneficiary shall be named as an additional insured thereunder and that the coverage 27 afforded Beneficiary will not be reduced or diminished by reason of the use of such blanket 28 policy of insurance and provided further that the requirements set forth herein are otherwise 29 satisfied. 30 31 SECTION 3.07. All of the above - mentioned insurance policies or certificates of insurance must 32 be satisfactory to Beneficiary. Beneficiary shall not by the fact of approving, disapproving, 33 accepting, preventing, obtaining or failing to obtain any insurance, incur any liability for or with 34 respect to the amount of insurance carried, the form or legal sufficiency of insurance contracts, 35 insolvency of insurance companies or payment or defense of lawsuits and Trustor hereby 36 expressly assumes full responsibility therefor and all liability, if any, with respect thereto. 37 38 SECTION 3.08. Condemnation and Insurance Proceeds. 39 40 SUBSECTION 3.08(a). Any award of damages in connection with any taking or condemnation, 41 or for injury to the Property by reason of public use, or for damages for private trespass or entry 42 onto the Property is hereby assigned and shall be paid to Beneficiary as further security for all 43 obligations secured by this Deed of Trust. Upon receipt of such proceeds, Beneficiary may hold Second Deed of Trust Page 6 1 the proceeds as further security or apply or release them in the same manner and with the same 2 effect as provided in this Deed of Trust for the disposition of proceeds of fire or other insurance. 3 4 SUBSECTION 3.08(b). Any insurance proceeds or awards in connection with any casualty or 5 damage or injury to the Property covered by insurance ( "Insurance Proceeds ") are hereby 6 assigned to Beneficiary to be held and applied by Beneficiary in the manner hereinafter provided. 7 Beneficiary may, at its option, and at its own expense, appear in and prosecute in its own name 8 any action or proceeding to enforce any cause of action for such Insurance Proceeds. All 9 Insurance Proceeds shall be applied by Beneficiary upon any indebtedness secured by this Deed 10 of Trust and in any order determined by Beneficiary or, at the option of Beneficiary, the entire 11 amount so collected or any part of that amount may be released to Trustor. This application or 12 release shall not cure or waive any default or notice of default under this Deed of Trust or 13 invalidate any act done pursuant to such notice. 14 15 SUBSECTION 3.08(c). Trustor, immediately upon obtaining knowledge of the institution of any 16 proceedings relating to condemnation or other taking of or damage or injury to the Property or 17 any portion thereof, or knowledge of any casualty damage to the Property or damage in any other 18 manner, shall immediately notify Beneficiary in writing. Beneficiary may participate, at its own 19 expense, in any such proceedings and may join Trustor in adjusting any loss covered by 20 insurance. 21 22 ARTICLE 4. TAXES, LIENS AND OTHER ITEMS. Trustor shall pay, when due, all taxes, 23 bonds, assessments, fees, liens (including prior trust deed liens), charges, fines, impositions and 24 any and all other items which are attributable to or affect the Property and which may attain a 25 priority over this Deed of Trust or the indebtedness or evidence of indebtedness secured hereby, 26 by making payment prior to delinquency directly to the payee thereof. Trustor may initiate 27 proceedings to contest any such taxes, bonds, assessments, fees, liens, charges, fines, impositions 28 or other items so long as Trustor takes steps to ensure that Beneficiary's security is not threatened 29 in any manner. Trustor shall pay all costs of the proceedings, including any costs or fees incurred 30 by Beneficiary. Upon the final determination of any proceeding or contest, Trustor shall 31 immediately pay the amounts due, together with all costs, charges, interest and penalties 32 incidental to the proceedings. 33 34 ARTICLE 5. RENTS AND PROFITS. Trustor acknowledges and agrees that the Property 35 shall at all times be occupied by the Trustor as the Trustor's primary residence and shall not be 36 leased or rented during the term of the Note and this Deed of Trust. Notwithstanding the 37 foregoing, any rents, royalties, issues, profits, revenue, income and other benefits of the Property 38 arising from the use and enjoyment of all or any portion thereof or from any lease or agreement 39 pertaining thereto (the "Rents and Profits "), whether now due, past due, or to become due, and 40 including all prepaid rents and security deposits, are hereby absolutely, presently and 41 unconditionally assigned, transferred, conveyed and set over to Beneficiary to be applied by 42 Beneficiary in the payment of the principal and all other sums payable on the Note and of all 43 other sums payable under this Deed of Trust. It is understood and agreed that neither the 44 foregoing assignment of Rents and Profits to Beneficiary nor the exercise by Beneficiary of any • Second Deed of Trust Page 7 • 1 of its rights or remedies under Article 5 hereof shall be deemed to defeat the owner- occupied 2 restriction set forth in the Agreement or to make Beneficiary a mortgagee -in- possession or 3 otherwise responsible or liable in any manner with respect to the Property or the use, occupancy, 4 enjoyment or operation of all or any portion thereof, unless and until. Beneficiary, in person or by 5 agent, assumes actual possession thereof. Further, the appointment of a receiver for the Property 6 by any court at the request of Beneficiary or by agreement with Trustor, or the entering into 7 possession of the Property or any part thereof by such receiver, shall not be deemed to make 8 Beneficiary a mortgagee -in- possession or otherwise responsible or liable in any manner with 9 respect to the Property or the use, occupancy, enjoyment or operation of all or any portion 10 thereof.. 11 12 ARTICLE 6. PRESERVATION AND MAINTENANCE OF PROPERTY. Trustor shall 13 keep the Property and every part thereof in good condition and repair and shall not permit or 14 commit any waste, impairment or deterioration of the Property nor commit, suffer or permit any 15 act upon or use of the Property in violation of law or applicable order of any governmental 16 authority, whether now existing or hereafter enacted and whether foreseen or unforeseen, 17 including, without limitation, violation of any zoning, building or environmental protection 18 statutes, ordinances, regulations, orders and restrictions or in violation of any covenants, 19 conditions or restrictions affecting the Property or bring or keep any article upon any of the 20 Property or cause or permit any condition to exist thereon which would be prohibited by or could 21 invalidate any insurance coverage maintained or required hereunder to be maintained by Trustor 22 on or with respect to any part of the Property and further shall do all other acts which from the 23 character or use of the Property may be reasonably necessary to protect the security hereof, the 24 specific enumerations herein not excluding the general. Trustor shall completely restore and 25 repair promptly and in a good and workmanlike manner any building, structure or improvement 26 thereon which may be damaged or destroyed and pay, when due, all claims for labor performed 27 and materials furnished therefor, whether or not insurance or other proceeds are available to 28 cover, in whole or in part, the costs of any such restoration or repair. Trustor shall notify 29 Beneficiary immediately in writing of any damage to the Property in excess of Ten Thousand 30 Dollars ($10,000.00). 31 32 -ARTICLE 7. PROTECTION OF SECURITY: COSTS AND EXPENSES. Trustor shall 33 appear in and defend any action or proceeding purporting to affect the security hereof or the 34 rights or powers of Beneficiary or Trustee and shall pay all reasonable costs and expenses, 35 including, without limitation, costs of evidence of title and reasonable attorney's fees, in any such 36 action or proceeding in which Beneficiary or Trustee may appear and in any suit brought by 37 Beneficiary to foreclose this Deed of Trust or to enforce or establish any other rights or remedies 38 of Beneficiary hereunder. If Trustor fails to perform any of the covenants or agreements in this 39 Deed of Trust or if any action or proceeding is commenced which affects Beneficiary's interest in 40 the Property or any part thereof, including, but not limited to, eminent domain, code enforcement 41 or proceedings of any nature whatsoever under any federal or state law, whether now existing or 42 hereafter enacted or amended, relating to bankruptcy, insolvency, arrangement, reorganization or 43 other form of debtor relief, or to a decedent, then Beneficiary or Trustee may, but without 44 obligation to do so and upon ten (10) days' prior written notice to and demand upon Trustor 0 0 Second Deed of Trust Page 8 1 (unless a shorter notice period is necessary to protect Beneficiary's interest in the security hereof, 2 in which case only reasonable notice and demand under the circumstances shall be required) and 3 without releasing Trustor from any obligation hereunder, make such appearances, disburse such 4 sums and take such action as Beneficiary or Trustee deems necessary or appropriate to protect 5 Beneficiary's interest, including, but not limited to, disbursement of reasonable attorney's fees, 6 entry upon the Property to make repairs or otherwise protect the security hereof, and payment, 7 purchase, contest or compromise of any encumbrance, charge or lien which in the judgment of 8 either Beneficiary or Trustee appear to be prior or superior hereto. Trustor further agrees to pay 9 all reasonable expenses of Beneficiary (including fees and disbursements of counsel) reasonably 10 related to the protection of the rights of Beneficiary hereunder, and enforcement or collection of 11 payment of the Note, whether by judicial or non judicial proceedings, or in connection with any 12 bankruptcy, insolvency, arrangement, reorganization or other debtor relief proceeding of Trustor, 13 or otherwise. Beneficiary shall give Trustor ten (10) days' prior written notice before disbursing 14 any amounts pursuant to this Article. Any amounts disbursed by Beneficiary or Trustee pursuant 15 to this Section shall be additional indebtedness of Trustor secured by this Deed of Trust as of the 16 date of disbursement. All such amounts shall be payable by Trustor immediately without 17 demand. Nothing contained herein shall be construed to require Beneficiary or Trustee to incur 18 any expense, make any appearance or take any other action. 19 20 ARTICLE 8. ENFORCEMENT. 21 22 Section 8.01. Acknowledgement of Enforceability. Trustor represents, warrants, covenants 23 and agrees that it is the lawful owner of the Real Property and that it has good right and lawful 24 authority to encumber the same as provided herein; that the Real Property is free from any and all 25 liens and encumbrances excepting only such as have been approved by Beneficiary and that 26 Trustor warrants and will defend the title to the Property against all claims and demands 27 whatsoever not specifically excepted herein (and except for claims and demands arising from 28 acts or omissions of Beneficiary or any predecessor -in- interest to Beneficiary not previously 29 disclosed to Trustor), and Trustor will execute, acknowledge and deliver all and every such 30 further assurances unto Beneficiary of the title to the Property hereby conveyed and intended so 31 to be or that Trustor may be or shall become hereinafter bound so to do. Trustor covenants and 32 warrants that the Note and this Deed of Trust are valid and enforceable obligations of Trustor in 33 accordance with the terms thereof and hereof; and that this Deed of Trust does not, nor does the 34 Note, nor does the performance or observance by Trustor of any of the matters or things in the 35 Note or this Deed of Trust, contravene any covenant in any indenture or agreement affecting 36 Trustor. 37 38 Section 8.02. Due on Sale and Other Enforcement Provisions. Trustor's agreement to ensure 39 the continued owner occupancy of the Real Property is a substantial material consideration to 40 Beneficiary and Beneficiary's agreement to accept the Note and to accept this Deed of Trust. In 41 accordance with California Civil Code Section 711.5 and in order to induce Beneficiary to accept 42 this Deed of Trust and the Note, Trustor agrees that Trustor shall not Transfer all or any part of 43 the Property without the prior written consent of Beneficiary. Except for a Transfer to a Eligible 44 Household (as defined in the City of San Luis Obispo's Affordable Housing Standards), Second Deed of Trust Page 9 1 Beneficiary may grant or deny such consent in its sole and absolute discretion and as a condition 2 to such consent may require any transferee to assume all obligations hereunder and to agree to be 3 bound by all provisions contained herein. In the event of any proposed Transfer, Trustor shall 4 provide Beneficiary with all financial and other information pertaining to the intended transferee 5 reasonably requested by Beneficiary. In the event of any Transfer without the prior written 6 consent of Beneficiary, Beneficiary shall have the absolute right, at its option, without demand or 7 notice, to declare all outstanding Principal and all other sums due hereunder and under the Note 8 to be immediately due and payable. Further, Beneficiary may bring an action at law or in equity 9 to require Trustor and the proposed transferee to terminate and/or rescind any sales contract or 10 purchase and sale transaction between them and/or to declare the transfer void, notwithstanding 11 that the transfer may have closed and become final as between Trustor and the transferee. 12 Further, Beneficiary may pursue any other remedy available under this Deed of Trust or the Note 13 or at law or in equity or under any other agreement, instrument or document entered into by 14 Trustor and Beneficiary. Beneficiary's consent to one Transfer shall not be deemed to be a 15 waiver of the right to require consent to a future or successive Transfer. As used herein, 16 "Transfer" includes any sale, agreement to sell, assignment, exchange or other conveyance of the 17 Property or any portion thereof or any interest therein, whether voluntary or involuntary, by 18 operation of law or otherwise, except that a Transfer by gift, devise or inheritance to a spouse or 19 to a spouse as a part of a dissolution proceeding shall not be considered a Transfer for purposes. 20 of this Section. 21 22 ARTICLE 9. EVENTS OF DEFAULT. Each of the following shall constitute an event of 23 default ( "Event of Default ") hereunder (including, if Trustor and Trustee consists of more than 24 one person or entity, the occurrence of any of such events with respect to any one or more of such 25 persons or entities): 26 27 SECTION 9.01. Breach of Covenants. Default by Trustor in the performance of any of the 28 covenants or agreements of Trustor contained herein, in the Note, in the Housing Agreement or 29 any other note or instrument, trust deed or other obligation of Trustor relating to the Property 30 secured by any part of or all of the Property, whether junior or senior to this Deed of Trust. 31 32 SECTION 9.02. Appointment of Trustee. The appointment pursuant to an order of a court of 33 competent jurisdiction, of a trustee, receiver or liquidator of the Property or any part thereof, or 34 of Trustor, or any termination or voluntary suspension of the transaction of business of Trustor, 35 or any attachment, execution or other judicial seizure of all or any substantial portion of Trustor's 36 assets; provided, however, that if such attachment, execution or seizure is involuntary, Trustor 37 shall not be deemed in default unless the same is not discharged within sixty (60) days. 38 39 SECTION 9.03. Bankruptcy Filing. The filing by or against Trustor of a petition in bankruptcy 40 or for an arrangement or for reorganization or for other form of debtor relief pursuant to the 41 federal Bankruptcy Act, as the same may be amended or replaced from time to time, or any other 42 law, federal or state, whether now existing or hereafter amended or enacted relating to insolvency 43 or debtor relief (except that in the case of a filing against Trustor, an Event of Default shall not 44 exist unless Trustor fails to have the proceeding discharged within sixty (60) days after such • Second Deed of Trust Page 10 • 1 filing), or the adjudication of Trustor as a bankrupt or an insolvent by a decree of a court of 2 competent jurisdiction, or the making of an assignment for the benefit of creditors, or the 3 admission by Trustor in writing of its inability to pay its debts generally as they become due, or 4 the giving of consent by Trustor to the appointment of a receiver or receivers of all or 5 substantially all of its property. 7 SECTION 9.04. Misrepresentations. Any representation or disclosure made to Beneficiary by 8 Trustor as an inducement to the making of the loan evidenced by the Note that proves to be false 9 or misleading in any material respect as of the time the same was made, whether or not any such 10 representation or disclosure appears as part of this Deed of Trust. 11 12 SECTION 9.05. Other Events. Any other event which, under this Deed of Trust, or under the 13 Note or the Agreement, constitutes an Event of Default by Trustor hereunder or thereunder or 14 gives Beneficiary the right to accelerate the maturity of the indebtedness, or any part thereof, 15 secured hereby. 16 17 ARTICLE 10. REMEDIES. Upon the occurrence of any Event of Default and the expiration 18 of any applicable period within which to cure the same, Trustee and Beneficiary shall have the 19 following rights and remedies: 20 21 SECTION 10.01. Acceleration. Beneficiary may declare the entire outstanding Principal and all 22 other sums or payments required hereunder to be due and payable immediately and 23 notwithstanding the date such sums would otherwise be due in accordance with the Note and the 24 Agreement. 25 26 SECTION 10.02. Entry. Whether or not Beneficiary exercises the right provided in Section 27 10.01 above, Beneficiary, in person or by agent or court- appointed receiver, may enter upon, take 28 possession of, manage and operate the Property or any part thereof and do all things necessary or 29 appropriate in Beneficiary's sole discretion in connection therewith, including, without limitation, 30 making and enforcing, and if the same be subject to modification or cancellation, modifying or 31 canceling leases upon such terms or conditions as Beneficiary deems proper, obtaining and 32 evicting tenants, and fixing or modifying rents, contracting for and making repairs and 33 alterations, and doing any and all other acts which Beneficiary deems proper to protect the 34 security hereof; and either with or without so taking possession, in its own name, in the name of 35 Trustor or by court- appointed receiver (which may be appointed on notice or on ex parte 36 application without notice), suing for or otherwise collecting and receiving the rents and profits, 37 including those past due and unpaid, and applying the same less costs and expenses of operation 38 and collection, including reasonable attorney's fees, upon any indebtedness secured hereby and in 39 such order as Beneficiary may determine. Upon request of Beneficiary, Trustor shall assemble 40 and make available to Beneficiary at the site of the Real Property any of the Property which has 41 been removed therefrom. The entering upon and taking possession of the Property, or any part 42 thereof, the collection of any rents and profits and the application thereof as aforesaid shall not 43 cure or waive any Event of Default theretofore or thereafter occurring or affect any notice or 44 Event of Default or notice, and, notwithstanding continuance in possession of the Property or any 10 • Second Deed of Trust Page 11 17-� 1 part thereof by Beneficiary, Trustor or a receiver, and the collection, receipt and application of 2 the rents and profits, Beneficiary shall be entitled to exercise every right provided for in this 3 Deed of Trust or by law or in equity upon or after the occurrence of an Event of Default, 4 including, without limitation, the right to exercise the power of sale. Any of the actions referred 5 to in this Section may be taken by Beneficiary irrespective of whether any notice of an Event of 6 Default or election to sell has been given hereunder and without regard to the adequacy of the 7 security for the indebtedness hereby secured. 9 SECTION 10.03. Judicial Action. Beneficiary may bring an action in any court of competent 10 jurisdiction to foreclose this Deed of Trust or to enforce any of the covenants and agreements of 11 this Deed of Trust, or the Note and the Housing Agreement. 12 13 SECTION 10.04. Power of Sale. 14 15 SUBSECTION 10.04(a). Beneficiary may elect to cause the Property or any part thereof to be 16 sold under the power of sale herein granted in any manner permitted by applicable law. In 17 connection with any sale or sales hereunder, Beneficiary may elect to treat any of the Property 18 that consists of a right in action or that is property that can be severed from the Real Property or 19 any improvements thereon without causing structural damage thereto as if the same were 20 personal property and dispose of the same in accordance with applicable law, separate and apart 21 from the sale of the Real Property. 22 23 SUBSECTION 10.04(b). Trustee may, and upon request of Beneficiary shall, from time to time, 24 postpone any sale hereunder by public announcement thereof at the time and place noticed 25 therefor. If the Property consists of several items of property, Beneficiary may designate the order 26 in which such items shall be offered for sale or sold. Any person, including Trustor, Trustee or 27 Beneficiary, may purchase at any sale hereunder, and Beneficiary shall have the right to purchase 28 at any sale hereunder by crediting upon the bid price the amount of all or any part of the 29 indebtedness hereby secured. 30 31 SUBSECTION 10.04(c). Should Beneficiary desire that more than one sale or other disposition 32 of the Property be conducted, Beneficiary may, at its option, cause the same to be conducted 33 simultaneously, or successively, on the same day, or at such different days or times and in such 34 order as Beneficiary may deem to be in its best interests, and no such sale shall terminate or 35 otherwise affect the lien of this Deed of Trust on any part of the Property not sold until all 36 indebtedness secured hereby has been fully paid. Upon any sale hereunder, Trustee shall execute 37 and deliver to the purchaser or purchasers a deed or deeds conveying the Property so sold, but 38 without any covenant or warranty whatsoever, express or implied, whereupon such purchaser or 39 purchasers shall be let into immediate possession; and the recitals in any such deed or deeds of 40 facts, such as default, the giving of notice of default and notice of sale and other facts affecting 41 the regularity or validity of such sale or disposition, shall be conclusive proof of the truth of such 42 facts and any such deed or deeds shall be conclusive against all persons as to such facts recited 43 therein. 44 11 0 1 0 Second Deed of Trust Page 12 1 SUBSECTION 10.04(d). In case of any sale of the Property pursuant to any judgment or decree, 2 of any court or at public auction or otherwise in connection with the enforcement of any of the 3 terms of this Deed of Trust, Beneficiary, its successors or assigns, may become the purchaser, 4 and for the purpose of making settlement for or payment of the purchase price, shall be entitled to 5 deliver over and use the Note, together with all other sums, with interest, advanced and unpaid 6 hereunder, in order that there may be credited as paid on the purchase price the sum then due 7 under the Note, including principal thereon and all other sums, with interest, advanced and 8 unpaid hereunder. 10 SECTION 10.05. Proceeds of Sale. The proceeds of any sale made under or by virtue of this 11 Article, together with all other sums that then may be held by Trustee or Beneficiary under this 12 Deed of Trust, whether under the provisions of this Article or otherwise, shall be applied as 13 follows: 14 15 (a) First, to the payment of the costs and expenses of sale and of any judicial proceedings 16 wherein the same may be made, including reasonable compensation to Trustee and Beneficiary, 17 their agents and counsel, and to the payment of all expenses, liabilities and advances made or 18 incurred by Trustee under this Deed of Trust, together with interest on all advances made by 19 Trustee at the maximum rate permitted by law to be charged by Trustee. 20 21 (b) Second, to the payment of any and all sums expended by Beneficiary under the terms hereof 22 (including, but not limited to, sums paid by Beneficiary on the prior trust deed) not then repaid 23 and all other sums required to be paid by Trustor pursuant to any provisions of this Deed of Trust 24 or the Note, including, without limitation, all expenses, liabilities and advances made or incurred 25 by Beneficiary under this Deed of Trust or in connection with the enforcement hereof, together 26 with interest thereon as herein provided. 27 28 (c) Third, to the payment of the entire amount then due, owing or unpaid upon the Note, 29 including attorney's fees and costs. 30 31 (d) Fourth, all amounts otherwise due Beneficiary. 32 33 (e) The remainder, if any, to the person or persons legally entitled thereto. 34 35 SECTION 10.06. Waiver of Marshaling. Trustor, for itself and for all persons hereafter 36 claiming through or under it or who may at any time hereafter become holders of liens junior to 37 the lien of this Deed of Trust, hereby expressly waives and releases all rights to direct the order in 38 which any of the Property shall be sold in the event of any sale or sales pursuant hereto, and to 39 have any of the Property and/or other property now or hereafter constituted security for any of the 40 indebtedness secured hereby, marshaled upon any foreclosure of this Deed of Trust or for any 41 other security for any of said indebtedness. 42 43 SECTION 10.07. Remedies Cumulative. No remedy herein conferred upon or reserved to 44 Trustee or Beneficiary is intended to be exclusive of any other remedy herein or by law provided, 12 • Second Deed of Trust Page 13 • 1 but each shall be cumulative and shall be in addition to every other remedy given hereunder or 2 now or hereafter existing at law or in equity or by statute. No delay or omission of Trustee or 3 Beneficiary to exercise any right or power accruing upon any Event of Default shall impair any 4 right or power or shall be construed to be a waiver of any Event of Default or any acquiescence 5 therein; and every power and remedy given by this Deed of Trust to Trustee or Beneficiary may 6 be exercised from time to time as often as may be deemed expedient by Trustee or Beneficiary. If 7 there exists additional security for the performance of the obligations secured hereby, the holder 8 of the Note, at its sole option, and without limiting or affecting any of its rights or remedies 9 hereunder, may exercise any of the rights and remedies to which it may be entitled hereunder 10 either concurrently with whatever rights and remedies it may have in connection with such other 11 security or in such order as it may determine. Any application of any amounts or any portion 12 thereof held by Beneficiary at any item as additional security hereunder, whether pursuant to this 13 deed of trust or otherwise, to any indebtedness secured hereby shall not extend or postpone the 14 due dates of any payments due from Trustor to Beneficiary hereunder or under the Note, or 15 change the amounts of any such payments or otherwise be construed to cure or waive any default 16 or notice of default hereunder or invalidate any act done pursuant to any such default or notice. In 17 the event that Beneficiary shall have proceeded to enforce any right under this Deed of Trust by 18 foreclosure, sale, entry or otherwise, and such proceedings shall have been discontinued or 19 abandoned for any reason or shall have been determined adversely, then, and in every such case, 20 Trustor and Beneficiary shall be restored to their former positions and rights hereunder with 21 respect to the Property subject to the lien hereof. 22 23 ARTICLE 11. MISCELLANEOUS 24 25 SECTION 11.01. Severability. In the event that any one or more of the provisions contained in 26 this Deed of Trust shall for any reason be held to be invalid, illegal or unenforceable in any 27 respect, such invalidity, illegality or unenforceability shall not affect any other provision of this 28 Deed of Trust, and this Deed of Trust shall be construed as if such invalid, illegal or 29 unenforceable provision had never been contained herein. 30 31 SECTION 11.02. Certain Charges. Trustor agrees to pay the charges of Beneficiary for any 32 service rendered Trustor, or on its behalf, connected with this Deed of Trust or the indebtedness 33 secured hereby, including, without limitation, delivering to an escrow holder a request for full or 34 partial reconveyance of this Deed of Trust, transmitting to an escrow holder moneys secured 35 hereby, changing the records pertaining to this Deed of Trust and indebtedness secured hereby, 36 showing a new owner of the Property and replacing an existing policy of insurance held 37 hereunder with another such policy. 38 39 SECTION 11.03. Notices. All notices expressly provided hereunder to be given by Beneficiary 40 to Trustor and all notices and demands of any kind or nature whatsoever that Trustor may be 41 required or may desire to give to or serve on Beneficiary shall be in writing and shall be served 42 by first class or registered or certified mail, return receipt requested. Any such notice or demand 43 so served shall be deposited in the United States mail, with postage thereon fully prepaid and 44 addressed to the party so to be served at its address above stated or at such other address of which 13 • Second Deed of Trust Page 14 • 1 said party shall have theretofore notified in writing, as provided above, the party giving such 2 notice. Service of any such notice or demand so made shall be deemed effective on the date of 3 actual delivery as shown by the addressee's return receipt or the expiration of forty-eight (48) 4 hours after the date of mailing, whichever is the earlier in time, except that service of any notice 5 of default or notice of sale provided or required by law shall, if mailed, be deemed effective on 6 the date of mailing. 8 SECTION 11.04. Trustor Not Released. Extension of the time for payment or modification of 9 the terms of payment of any sums secured by this Deed of Trust granted by Beneficiary to any 10 successor -in- interest of Trustor shall not operate to release, in any manner, the liability of the 11 original Trustor. Beneficiary shall not be required to commence proceedings against such 12 successor or refuse to extend time for payment or otherwise modify the terms of the payment of 13 the sums secured by this Deed of Trust by reason of any demand made by the original Trustor. 14 Without affecting the liability of any person, including Trustor, for the payment of any 15 indebtedness secured hereby, or the lien of this Deed of Trust on the remainder of the Property 16 for the full amount of any such indebtedness and liability unpaid, Beneficiary and Trustee are 17 respectively empowered as follows: Beneficiary may from time to time and without notice (a) 18 release any person liable for the payment of any of the indebtedness, (b) extend the time or 19 otherwise alter the terms of payment of any of the indebtedness, (c) accept additional real or 20 personal property of an kind as security therefor, whether evidenced by deeds of trust, mortgages, 21 security agreements or any other instruments of security, or (d) alter, substitute or release any 22 property securing the indebtedness; Trustee may, at any time and from time to time, upon the 23 written request of Beneficiary (a) consent to the making of any map or plat of the Property or any 24 part thereof, (b) join in granting any easement or creating any restriction thereon, (c) join in any 25 subordination agreement or other agreement affecting this Deed of Trust or the lien or charge 26 hereof, or (d) reconvey, without any warranty, all or part of the Property. 27 28 SECTION 11.05. Inspection. Beneficiary may at any reasonable time or times make or cause to 29 be made entry upon and inspections of the Property or any part thereof in person or by agent. 30 31 SECTION 11.06. Reconveyance. Upon the payment in full of all sums secured by this Deed of 32 Trust or upon forgiveness of such payment in accordance with the Note, Beneficiary shall request 33 that Trustee reconvey the Property and shall surrender this Deed of Trust and Note evidencing 34 indebtedness secured by this Deed of Trust to Trustee. Upon payment of its fees and any other 35 sums owing to it under this Deed of Trust, Trustee shall reconvey the Property without warranty 36 to the person or persons legally entitled thereto. Such person or persons shall pay all costs of 37 recordation, if any. The recitals in such reconveyance of any matters of facts shall be conclusive 38 proof of the truthfulness thereof. The grantee in such reconveyance may be described as "the 39 person or persons legally entitled thereto." Five (5) years after issuance of such full 40 reconveyance, Trustee may destroy the Note and this Deed of Trust unless otherwise directed by 41 Beneficiary. 42 43 SECTION 11.07. Interpretation. Wherever used in this Deed of Trust, unless the context 44 indicates a contrary intent, or unless otherwise specifically provided herein, the word "Trustor" 14 C� J Second Deed of Trust Page 15 .7 1. shall mean and include both Trustor and any subsequent owner or owners of the Property, and 2 the word 'Beneficiary" shall mean and include not only the original Beneficiary hereunder but 3 also any future owner and holder, including pledgees, of the Note secured hereby. In this Deed of 4 Trust wherever the context so requires, the masculine gender includes the feminine and/or neuter, 5 and the neuter includes the feminine and/or masculine, and the singular number includes the 6 plural and conversely. In this Deed of Trust, the use of the word "including" shall not be deemed 7 to limit the generality of the term or clause to which it has reference, whether or not non - limiting 8 language (such as "without limitation," or "but not limited to" or words of similar import) is used 9 with reference thereto. The captions and headings of the Articles and Sections of this Deed of 10 Trust are for convenience only and are not to be used to interpret, define or limit the provisions 11 hereof. 12 13 SECTION 11.08. Consent. The granting or withholding of consent by Beneficiary to any 14 transaction as required by the terms hereof shall not be deemed a waiver of the right to require 15 consent to future or successive transactions. 16 17 SECTION 11.09. Successors and Assigns. All of the grants, obligations, covenants, 18 agreements, terms, provisions and conditions herein shall run with the land and shall apply to, 19 bind, and inure to the benefit of the heirs, administrators, executors, legal representatives, 20 successors and assigns of Trustor and the successors -in -trust of Trustee and the endorsees, 21 transferees, successors and assigns of Beneficiary. In the event that Trustor is composed of more 22 than one party, the obligations, covenants, agreements and warranties contained herein as well as 23 the obligations arising therefrom are and shall be joint and several as to each such party. 24 25 SECTION 11.10. Governing Law. This Deed of Trust shall be governed by and construed under 26 the laws of the State of California. 27 28 SECTION 11.11. Trustor Waivers. Trustor waives the benefit of all laws now existing or that 29 hereafter may be enacted with respect to any statute of limitations for the filing of any action or 30 claims by Beneficiary. 31 32 SECTION 11.12. Superiority of First Lender Documents. 33 34 SUBSECTION 11.12(a). This Deed of Trust.shall not diminish or affect the rights of the First 35 Lender under that certain deed of trust dated Sept . 5_,- . 2003 , executed by the 36 Trustor in favor of the First Lender and recorded in the County of San Luis Obispo on _ 37 Sept - 5 , 2003 , and assigned Instrument No. concurrent herewith or any subsequent 38 First Lender deeds of trust hereafter recorded against the Security (the "First Deed of Trust "), 39 except as provided in Subsection 12.13(b) below. Beneficiary and Trustor acknowledge and 40 agree that this Deed of Trust is subject and subordinate in all respects to the liens, terms, 41 covenants and conditions of the First Deed of Trust and to all advances heretofore made or which 42 may hereafter be made pursuant to the First Deed of Trust including all sums advanced for the 43 purpose of (i) protecting or further securing the lien of the First Deed of Trust, curing defaults by 44 the Trustor under the First Deed of Trust or for any other purpose expressly permitted by the First 15 • Second Deed of Trust Page 16 1 Deed of Trust or (ii) constructing, renovating, repairing, furnishing, fixturing or equipping the 2 Property. The terms and provisions of the First Deed of Trust are paramount and controlling, and 3 they supersede any other terms and provisions hereof in conflict therewith. 4 5 SUBSECTION 11.12(b). In the event of default, the First Lender may take the following actions 6 to cure the default, provided first that: (i.) the Beneficiary has been given written notice of a 7 default under the First Deed of Trust, and (ii) the Beneficiary shall not have cured the default 8 under the First Deed of Trust, or diligently pursued curing the default as determined by the First 9 Lender, within the 60 -day period provided in such notice sent to the Beneficiary: 10 11 1) Foreclose on the subject property pursuant to the remedies permitted by law and written 12 in a recorded contract or deed of trust; or 13 14 2) Accept a deed of trust or assignment to the extent of the value of the unpaid first 15 mortgage to the current market value in lieu of foreclosure in the event of default by a 16 trustor; or 17 18 3) Sell the property to any person at a fair market value price subsequent to exercising its 19 rights under the deed of trust. Any value in excess of the unpaid mortgage and costs of 20 sale administration shall be used to satisfy the City loan. In no case may a first mortgage 21 lender, exercising foreclosure assignment in -lieu of foreclosure or sale, obtain value or 22 rights to value greater than the value of the outstanding indebtedness on the first 23 mortgage at the time of the debt clearing action. 24 25 The following types of transfers shall remain subject to the requirements of the City's loan and 26 right of first refusal: transfer by gift, devise, or inheritance to the owner's spouse; transfer to a 27 surviving joint tenant; transfer to a spouse as part of divorce or dissolution proceedings; or 28 acquisition in conjunction with a marriage. 29 30 SECTION 11.1.3. Request for Notices of Default and Sale. 31 32 SUBSECTION 11.13(a). Trustor hereby requests that a copy of any notice of default and notice 33 of sale as may be required by law or by this Deed of Trust be mailed to Trustor at its address 34 above stated. 35 36 SUBSECTION 11.13(b). In accordance with Section 2924b of the California Civil Code, request 37 is hereby made that a copy of any notice of default and a copy of any notice of sale under that 38 deed trust recorded concurrently herewith, be mailed to: Community Development Director, 39 City of San Luis Obispo, 990 Palm Street, San Luis Obispo, California 93401. 40 41 SECTION 11.14. No Transfer. Trustor shall not voluntarily or involuntarily (except for a 42 transfer in accordance with the Housing Agreement) assign or otherwise transfer any of its rights, 43 duties, liabilities or obligations hereunder or under the Note without the prior written consent of 44 Beneficiary. 45 16 i Second Deed of Trust Page 17 1- SECTION 11.15. Attorney's Fees. In any action to interpret or enforce any provision of this 2 Deed of Trust, the prevailing party shall be entitled to reasonable costs and attorney's fees. 3 4 IN WITNESS WHEREOF,, the undersigned have executed this Deed of Trust as of the day and 5 year first above written.. (attach notarization) 6 7 8 9 10 Tania L. Daniel, "Trustor" 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 17 1 ' 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32. Second Deed of Trust Page 18 EXHIBIT "A" LOT 142 OF TRACT 2307, IN THE CITY OF SAN LUIS OBISPO, COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA, ACCORDING TO MAP RECORDED SEPTEMBER 25, 2001 IN BOOK 19, PAGE 77 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.. 18 0 0 `t AMERI .4� � C } STATE OF COUNTY OF CALIFORNIA � }ss. On , before me cz)'- CA�V� K�t personally a ared \.� .1-- • Dax, , personally known to me (or proved to me on the basis of satisfactory evidence) to be the personKwhose nameWgisare subscribed to the within instrument and acknowledged to me that hgavthey executed the same in his er heir authorized capacity, and that by hi a their signature(N on the instrument the personN or the entity upon behalf of which the person acted, executed the instrument. WITNESS my hand and official seal. Signature (This area for official notarial seal) Title of Document C 11 A-Dwk (!!, 44. Date of Document �,1� No. of Pages Other signatures not acknowledged WEN L OGeuRN N COMM. # 1413283 < � Notary Public - Cali;ornia XI y County of San Luis Obspo Comm. Exp. May, 20, 2007 3008 (1/94) (General) First American Title Insurance Company 0 CERTIFICATE • This is to certify that the interest in the Property described in Exhibit A conveyed by the Deed of Trust/Deed of Trust Covenants dated -7 -2y-o3 from I „,4 L.1.2a4i ,, , Trustor, to the City of San Luis Obispo, a Charter Municipal Corporation, is hereby accepted by the undersigned officer or agent on behalf of the Council of the City of San Luis Obispo, pursuant to the authority granted by City Council Resolution No. 8886 (1998 Series), adopted December 15, 1998, and the grantee consents to recordation thereof by its duly authorized officer. CITY OF SAN LUIS OBISPO: fie. ' ljx-r-�2 8- 4- Wendy G rge, Acting City Administrative Officer Date Notary: STATE OF CALIFORNIA COUNTY OF SAN LUIS OBISPO On 44&003 before me, appeared (Name and 'Title a Officer) YlAvho is personally known to me — OR — ❑ 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 signatures(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the agreement. WITNESS my hand and official seal. Signature o Notary Public Cmmksbn # 1413258 Notmy Pubhc - Caarmjo o San LUIS Obispo County — t1Ay Comm. ExPires Mav 21.2007 END OF DOCUMENT 1 2 RETURN TO: 4 City Clerk 5 City of San Luis Obispo 6 990 Palm Street 7 8 9 10 11 12 1.3 14 15 • I • San Luis Obispo, CA 93401 -3249 - $ 136,175.00! DE TOLOSA PROMISSORY NOTE SECURED BY DEED OF TRUST Date: _July 24, _2003 At San Luis Obispo, California 16 FOR VALUE RECEIVED, Tania L. Daniel, ( "Maker ") promises to pay to the order of the City 17 of San Luis Obispo ( "City") at 990 Palm Street, San Luis Obispo, California 93401 or such other 18 address as City may from time to time designate, the sum of One Hundred Thirty -Six, Thousand 19 One Hundred Seventy -Five Dollars ($136,175.00) according to the terms set forth herein. This 20 Note shall accrue interest, compounded monthly, at an annual rate of 4.5 percentage points 21 added to the 11th District Cost of Funds, as . published by the Federal Home Loan Bank Board, 22 amortized over 30 years. The Loan shall be amortized over thirty years, with monthly payments 23 of principal and interest due and payable to the City on the first day of each month unless waived 24 or forgiven, as set forth below. 25 26 1. Security for Note. This Note is secured by a deed of trust of even date herewith (the "Deed 27 of Trust ") executed by Maker, as Trustor, and naming City as Beneficiary, covering certain real 28 property ( "the Property ") owned by Maker in the County of San Luis Obispo, State of California, 29 commonly knows as 1715 Tonini Drive, which Property is more particularly described in Exhibit 30 A, attached hereto. 31 3.2 2. Incorporation of Affordable Housing Agreement. This Note and the Deed of Trust are 33 executed and delivered pursuant to that certain "Affordable Housing Agreement" ( "Affordability 34 Agreement ") recorded in the County of San Luis Obispo on September 25, 2001 between City 3S and SLO Estates, Inc., regarding affordable housing requirements applying to the De Tolosa 36 Ranch Residential Development. Pursuant to the Affordability Agreement, Maker is to live at 37 the Property. Consequently, this Note is subject to section 711.5 of the California Civil Code, 38 which grants to City the authority to accelerate all amounts due under this Note if any subsequent 39 transfer of the Property at any time does not comply with the provisions of the Affordability 40 Agreement or Deed of Trust. The Affordability Agreement is incorporated herein by this 41 reference as though set forth in its entirety and attached hereto as Exhibit B. 42 4.3 3. City's Right of First Refusal. Upon resale, the City or the Housing Authority of the City 44 of San Luis Obispo shall have the first right of refusal to purchase the property at then current 4.5 appraised value. The consideration for the City's right of first refusal shall consist of 1 percent of 46 the remaining City loan balance. The balance of the City loan remaining after deducting this 1 • • Affordable Housing Promissory Note Page 2 i 1 percent of the loan balance shall be credited toward the purchase price if the City chooses to 2 exercise the purchase option. The provisions of this section shall not impair the rights, of a first 3 mortgage lender secured by a recorded deed of trust. The purchase money lender shall have a 4 higher priority than the City's loan. The City's security shall be prioritized as a second mortgage. 5 This first priority applies to the purchase money lender's assignee or successor in interest, to: 6 7 i. Foreclose on the subject property pursuant to the remedies permitted by law and 8 written in a recorded contract or deed of trust; or 9 10 ii. Accept a deed of trust or assignment to the extent of the value of the unpaid first 11 mortgage to the current market value in lieu of foreclosure in the event of default 12 by a trustor; or 13 14 iii. Sell the property to any person at a fair market value price subsequent to 15 exercising its rights under the deed of trust. Any value in excess of the unpaid 16 mortgage and costs of sale administration shall be used to satisfy the City loan. In 17 no case may a first mortgage lender, exercising foreclosure assignment in -lieu of 18 foreclosure or sale, obtain value or rights to value greater than the value of the 19 outstanding indebtedness on', the first mortgage at the time of the debt clearing 20 action. 21 22 The following types of transfers shall remain subject to the requirements of the City's loan 23 and right of first refusal: transfer by' gift, devise, or inheritance to the owner's spouse; 24 transfer to a surviving joint tenant; transfer to a spouse as part of divorce or dissolution 25 proceedings; or acquisition in conjunction with a marriage. 26 27 4. Due on Transfer. In the event Maker sells, leases, rents or otherwise transfers the 28 Property to any person or entity other than an "eligible household" (as such tern is defined in the 29 Housing Agreement), then the Principal of and accrued interest on the Loan shall be immediately 30 due and payable to the City as set forth in the Deed of Trust in- favor of City recorded 31 simultaneously herewith as .a second deed of trust subordinate to the deed of trust of the first 32 mortgage lender on the Property. 33 34 5. Waiver of Principal and Interest.; City waives timely payment of the Principal of and 35 interest on the Loan for such time as Maker, who has been determined by City or its Housing 36 Authority to be an eligible buyer, remains as the owner and occupant of the Property as Maker's 37 principal residence untilSeptember 5 , 2633. 38 39 6. Forgiveness of Loan. City will forgive the repayment of the outstanding Principal of the 40 Loan and all interest thereon as long as Maker, or subsequent buyer determined by City or its i i Affordable Housing Promissory Note Page 3 1 Housing Authority to be an eligible household, remains as the owner and occupant of the 2 Property as Maker's principal residence until September 5 , 2033. 3 4 7. Prepayment. This Note may not be prepaid in whole or in part, unless called due by City. 5 6 8. Pavment. The amount due under this Note shall be paid without the necessity for notice 7 or demand by City. 8 9 9. Payment Amount. The amount due under this Note shall be paid from the net proceeds 10 as a result of any transfer. Net proceeds is the sales price minus any loans or liens that are senior 11 to this Note and minus closing costs. 12 13 10. Default Defined. In addition to other defaults referred to in this Note and the Deed of 14 Trust, it shall be a default under this Note if Maker fails to make any payment or perform any 15 obligation under or in connection with (a) this Note, (b) the Deed of Trust, or (c) any other note, 16 trust deed or other obligation of Maker relating to the Property, including but not limited to the 17 Affordability Agreement, or secured by all or any part of the Property, whether junior or senior to 18 this Note, and if such failure is not cured within such time as may be permitted by the obligation 19 or the obligee. 20 21 11. Options of City upon Default. Upon the occurrence of a default, City shall have the 22 option, without further notice or demand: 23 24 (a) To declare the Note to be immediately due and payable; 25 26 (b) If the default relates to a transfer of the Property, to bring an action at law or in 27 equity to require Maker and the proposed transferee to terminate and/or rescind the sales 28 contract or lease and/or to declare the transfer void, notwithstanding that the transfer may 29 have closed and become final as between Maker and the transferee; or 30 31 (c) To pursue any other remedy available under this Note or the Deed of Trust, or 32 at law or in equity or under any other agreement, instrument or document entered into by 33 Maker and City, including but not limited to the Affordability Agreement. 34 35 12. Failure to Exercise Options. Failure to exercise any such option upon the occurrence of 36 one or more events of default shall not constitute a waiver of City's right to exercise any such 37 option at a later time. 38 39 13. Costs of Enforcement and Collection. If Maker defaults under this Note, Maker shall 40 'pay all costs of enforcement and collection, including, but not limited to, costs and attorney's Affordable Housing Promissory Note Page 4 1 fees, including reasonable attorney's fees, whether or not such enforcement or collection includes 2 filing a lawsuit or prosecution of a lawsuit, if filed. 3 4 14. City's Right to Transfer Interest in Note. City and any subsequent holder of this Note 5 may at any time, without consent of Maker, sell, assign, pledge, hypothecate, transfer and 6 negotiate or grant participation in any part of or any interest in City's rights and benefits under 7 this Note to another governmental body or nonprofit organization which is eligible to receive 8 such transfer under state and federal law. 9 10 15. Waiver of Notice and Statute of Limitations. Except for any notice expressly required 11 by this Note; Maker waives demand, notice of demand, presentation for payment, notice of non- 12 payment or dishonor, protest and notice of protest. To the fullest extent permitted by law, Maker 13 waives the defense of the statute of limitations in any action on this Note or to recover on the 14 security for this Note.. 15 16 16. Liability. City's acceptance of any payment under this Note which is less than payment in 17 full of all amounts then due and payable, or the granting of any extension of time for payment of 18 any amount due under this Note or for the performance of any covenant, condition or agreement 19 entered into by Maker and City, or City's grant of any other indulgence to Maker, or City's taking 20 or release of other or additional security for the indebtedness evidenced hereby, or any other 21 modification or amendment of this Note shall in no way release or discharge the liability of 22 Maker or any endorser, guarantor or other person secondarily liable for this Note. 23 24 17. Governing Law. This Note shall be governed by the laws of the State of California. 25 Maker agrees that the site of any hearing or action of whatever nature or kind regarding this Note 26 shall be conducted in the County of San Luis Obispo, State of California. 27 28 18. Severability. If any provision of this Note or any application of such provision be 29 declared by a court to be invalid or unenforceable, such invalidity or unenforceability shall not 30 affect any other application of such provision or the balance of the provisions hereof, which 31 shall, to the fullest extent possible, remain in full force and effect. 32 33 MAKER: 34 C\. 35 Tania L. Daniel 36 (attach notarization) 37 38 39 40 41 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 Affordable Housing Promissory Note CITY: W Wendy Ge ge, Acting City Administrative Officer APPROVED AS TO FORM AND LEGAL EFFECT: Jona owell, City Attorney Affordable Housing Promissory Note Page 6 EXHIBIT "A' DESCRIPTION OF_ REAL .PROPERTY Lot 14.2 of Tract 2307, in the City of San Luis Obispo, County of San Luis Obispo, State of California, according to map recorded September .25, 2001 in.Book 19, Page 77 of Maps, in the office of the County Recorder of said County. r� EXHIBIT 'B' RECORDING REQUESTED BY: <SLO Estates, Inc.-) e- WHEN RECORDED MAIL TO: City Clerk City of San Luis Obispo 990 Palm Street San Luis Obispo, CA 93401 -3249 4G �— L�F-- JULIE RODEWALD DG San Luis Obispo County- Clerk/Recorder 9/25/2001 Recorded at the request of 8:00 AM First American Title Company c O C # = 2001072163 Titles: 1 Pages: 10 Fees 0.00 Taxes 0.00 Others 0.00 PAID $0.00 AFFORDABILITY AGREEMENT /DEED OF TRUST COVENANTS FOR TRACT 2307 THIS AGREEMENT (this "Agreement ") is made and entered into as of this Iq day of 6eP4c Hbe_y- , 2001, by and between the City of San Luis Obispo (the "City ") and SLO Estates, Inc., a California corporation ( "Owner"), collectively referred to as "the parties." TR RECITALS A. On December 15, 1998, the City Council adopted Resolution No. 8886, approving a 148 lot residential subdivision, located at the southern corner of the Madonna Road and Los Osos Valley Road intersection and more particularly described in Fxhihit A attached hereto ( "the Project "); and B. Mitigation measure number 1.2 of that approval requires the applicant to provide affordable housing consistent with Policy 1.22.1 of the Housing Element; and C. The parties have agreed that the Owner shall construct and sell homes in conformance with the City's Affordable Housing Standards; and D. The City and Owner desire to assure, that the affordable dwelling units identified in this Agreement remain affordable to moderate income households for a period of at least thirty (30) years. NOW, THEREFORE, the parties.acknowledge and agree as follows: 1.01. "Effective Date" shall mean the date. of the recordation of this Agreement in the: Recorder's Office of the County of San Luis Obispo. 1.02 "Eligible Households" mean the persons and families meeting the definition under the City's Housing Element and Affordable Housing Standards. DISLIQ Page 2 Affordable Housing Agreement • 1.03 "Houses" mean the duplex and patio single family residential structures to be constructed on the Properties. 1.04 "Moderate income households" mean persons and families whose income does ,not exceed one hundred twenty percent (120 %) of the County of San Luis Obispo area median income, adjusted for family size pursuant to the City of San Luis Obispo Affordable Housing Standards. 1.05 "Properties" mean those fourteen (14) specific real properties in the Project described in Exhibit B attached hereto and hereby incorporated by reference, which are intended to be sold to and occupied exclusively by Eligible Households during the Term pursuant to this Agreement.. 1.06 "Property Term" means for each Property the thirty (30) year period commencing on the date of the recordation of the Grant Deed executed by the Owner or its successors and assigns conveying the Property to the first Eligible Household. 2.01. During the Property Term for each Property, the House to be constructed on the Property shall be used exclusively for Owner -occupied housing purposes and shall be sold or transferred only to Eligible Households. For the initial sale of each Property to an Eligible Household, the sales price shall be' determined at time of building occupancy release, in accordance with City of San Luis Obispo affordable housing standards. For subsequent sales of the Property to Eligible Households, the sales prices shall be based on and consistent with then current City affordable housing standards. 2.02. The Grant Deeds for the transfers of interests in the Property by the Owner or its successors in interest and all future Grant Deeds for transfers of interests in the Properties by all subsequent owners of the Properties shall contain a restriction providing that during the Property Term for each Property there shall be no sale, lease, rental, or other transfer of the Property, except for the sale to an Eligible Household. Any sale, lease, rental, or other transfer of the Properties during their respective Property Terms in violation of this covenant shall be void. 2.03. The Owner agrees to retain the Housing Authority of the City of San Luis Obispo, or other qualified entity acceptable to the City, for screening of potential buyers of the Properties to determine if they qualify as Eligible Households. 2.04. These affordability requirements shall be covenants running with the land as defined in California Civil Code Section 1460, and shall apply to the Properties. Pursuant to Civil Code Section 1468, which governs such covenants, the provisions of this Agreement shall be binding upon all parties having any right, title, or interest in any of the Properties described herein, or any portion thereof and on their heirs, successors in interest and assigns for their respective Property Terms. Page 3 0 Affordable Housing Agreement 40 2.05. When a Property is first sold to a buyer qualifying as an Eligible Household the buyer and City shall enter into an Affordable Housing Agreement which shall be recorded as an encumbrance on the Property, and secured by a recorded deed of trust. Said Agreement, and deed of trust shall establish the monetary difference between the initial purchase price and the initial appraised value as a loan payable to the City. Said loan shall accrue interest, compounded annually, at an annual . rate equal to four and one half (4.5) points added to the Eleventh District Cost of Funds as currently published by the Federal Home Loan Bank Board, amortized over the Property Term, and the monthly payments of principal and interest shall be waived by the City as long as said buyer or subsequent buyers shall have been previously approved by the City Housing Authority or other entity approved by the City as an Eligible Household, continue to own and reside in the Property subject to the City loan as such buyer's principal residence. 2.06. If a Property is sold, leased, or otherwise transferred to an entity, other than to an Eligible Household, in violation of this Agreement, the City's loan shall immediately become due and payable from the proceeds of the sale of the Property. "Proceeds of sale" shall mean the value of any and all consideration, however denominated, received or to be received by the seller from the sale of the Property after the payment of all outstanding indebtedness under the first deed of trust and after all broker's, escrow, title and closing fees, costs and expenses in connection with the sale. 2.07. The City or the Housing Authority of the City of San Luis Obispo shall have the first right of refusal to purchase the Property at its then current fair market value in accordance with the terms and conditions set forth in this Agreement. The consideration for the City's right of first refusal shall consist of one percent (1 %) of the remaining City loan balance. The balance of the City loan remaining after deducting this one percent (11%) of the loan balance shall be credited toward the purchase price if the City chooses to exercise the purchase option. The provisions of this Section shall not impair the rights of a first mortgage lender secured by a recorded deed of trust. The purchase money lender shall have a higher priority than the City's loan. The City's security shall be prioritized as a second mortgage. This first priority applies to the purchase money lender's assignee or successor in interest, to: (i) Foreclose on the Property pursuant to the remedies permitted by law and written in a recorded contract or deed of trust; or (ii) Accept a deed of trust or assignment to the extent of the value of the unpaid first mortgage to the current market value in lieu of foreclosure in the event of default by a trustor; or (iii) Sell the Property to any person at a fair market value price subsequent to exercising its rights under the deed of trust. Any value in excess of the unpaid mortgage and costs of sale administration shall be used to satisfy the City loan. In no case may a first mortgage lender, exercising foreclosure Page 4 • Affordable Housing Agreement • assignment in -lieu of foreclosure or sale, obtain value or rights to value greater than the value of the outstanding- indebtedness on the first mortgage at the time of the debt clearing action. 2.08 In addition, the following types of transfers shall remain subject to the requirements of the City's loan and right of first refusal: transfer by gift, devise, or inheritance to the Owners spouse; transfer to a surviving joint tenant; transfer to a spouse as part of divorce or dissolution proceedings; or acquisition in conjunction with a marriage. 2.09 For purposes of determining the amount of the City's loan and the purchase price of the Property for the City's right of first refusal, the fair market value of a Property shall be determined as follows: (i) The then current Owner of the Property and the City shall attempt to agree on the fair market value of the Property. If the parties agree upon the fair market value, during the Agreement Period, the fair market value of the Property for purposes of determining the amount of the City's loan or the purchase price payable for the purchase of the Property pursuant to the right of first refusal shall be the agreed upon fair market value. If the parties are unable to agree upon the fair market value, they shall jointly select an independent MAI appraiser ( "Qualified Appraiser") with at least five (5) years full time real estate appraisal experience for properties comparable to the Property in Santa Barbara County and \or San Luis Obispo County , to appraise and set the fair market value. The parties shall share equally the fees, costs and expenses of said Qualified Appraiser. (ii) If the parties fail to agree on the selection of a Qualified Appraiser within ten (10) days ( "Initial Appraiser Selection Period "), each party shall select their own Qualified Appraiser within ten (10) days following the Initial Appraiser Selection Period and the two Qualified Appraisers shall determine and attempt to agree upon the fair market value within fifteen (15) days following the Initial Appraiser Selection Period ( "Initial Appraisal Period "). Each party shall bear the expenses of their own Qualified Appraiser. In the event that either party fails to designate a Qualified Appraiser within the Initial Appraiser Selection Period, then the determination of the fair market value by the Qualified Appraiser selected by the other party shall be final and binding upon the parties. If the two Qualified Appraisers are able to agree as to the fair market value of the Property within the Initial Appraisal Period, then the fair market value of the Property for purposes of determining the purchase price payable for the Property pursuant to the City's right of first refusal shall be shall be the determined by the two Qualified Appraisers. (iii) If the two Qualified Appraisers are unable to agree on the fair market value of the Property within the Initial Appraisal Period, then said Qualified Appraisers shall, Page 5 Affordable Housing Agreement • within five (5) days of the expiration of the Initial Appraisal Period, designate a third Qualified Appraiser. If a third Qualified Appraiser is appointed, then the fees and costs of the third appraiser shall be borne equally by the then current owner of the Property and prospective buyer. The third Qualified Appraiser shall determine the fair market value of the Property within the ten (10) -day period following his or her appointment ( "Final Appraisal Period "). The fair market value of the Property for purposes of determining the purchase price payable for the purchase of the Property pursuant to the City's right of first refusal shall be as follows: If the highest appraised fair market value is more than one hundred five percent (105 %) of the middle appraised fair market value, then the highest appraised fair market value shall be disregarded. If the lowest appraised fair market value is less than ninety -five percent (95 %) of the middle appraised fair market value, then the lowest appraised fair market value shall be disregarded. If there is then only one remaining appraised fair market value, that fair market value shall be the fair market value of the Property for purposes of determining the purchase price payable for the purchase of the Property pursuant to the City's right of first refusal. If there is then more than one remaining appraised fair market value, the remaining appraised fair market value shall be averaged, and the fair market value of the Property for purposes of determining the.the purchase price payable for the purchase of the Property pursuant to the City's right of first refusal shall be the average of such appraised fair market values.. 3.01. In the event the Owner has not completed the construction of the Houses and received a final building inspection on all Houses within two (2) years from the Effective Date, the Ownership and control of the Properties shall revert to the City. Extensions of this period of time may be granted at the discretion of the City if the Owner has demonstrated just cause and a_ "good faith" effort to develop the Properties. No 0 . 0 Page 6 Affordable Housing Agreement 4.01. Unless otherwise provided, all notices herein required shall be in writing, and delivered in person or sent by United States first class mail, postage prepaid to the address of the respective parties as specified below or at other addresses that may be later specified by the parties hereto: If to the City: City of San Luis Obispo Community Development Director. 990 Palm Street San Luis Obispo, CA 93401 -3249 If.to the Owner: SLO Estates, Inc. 200 East Carrillo Street, Suite 200 Santa Barbara Californiao93101 Attention: Kenneth P. Slaught. and With a copy to: SLO Estates, Inc. 1880 Santa Barbara Street, Suite F San Luis Obispo, California 93401 Attention: Patrick N. Smith Seed Mackall & Cole ,LLP 1332 Anacapa Street, Suite 200 Santa Barbara, California 93101 Attention: David R. Reese, Esq. 4.02. The Owner hereby specifically acknowledges and agrees to be bound by the covenants respecting affordability on the Properties contained herein. 4.03 This Agreement may be executed in any number of counterparts, each of which ,shall be an original, but all of which shall constitute one and the same instrument. IN WITNESS WHEREOF, this Agreement has been duly executed by the undersigned as of the date set forth below. SLO EST AT -S INC., a California co tion By:. 77 Patrick N. Smith, President _ _ A (enneth P. Slau Vice President CITY: S7 O Date Date Jo n Man eville, Community Development Director APPROVED AS TO FORM AND LEGAL EFFECT: 9 STATE OF CALIFORNIA ) ) ss. COUNTY OF San Luis Obispo ) On August 27 , .2001 before me, the undersigned, a Notary Public in and for said County and State, personally appeared Patrick N. Smith personally known to me to be the person(r) whose name(* is /apa subscribed to the within instrument and acknowledged to me that hehslm; � executed the same in hisA%MVWauthorized capacity(), and that by his,rA#tMxsignature(cx) on the instrument the person(r4, or the entity upon behalf of which the person(s4 acted, executed the instrument. WITNESS my hand and official seal. Not ry Public STATE OF CALIFORNIA ss. COUNTY OF SANTA BARBARA On , 2001 before me, the undersigned, a Notary Public in and for said County and State, personally appeared , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is /are subscribed to the within instrument and acknowledged to me that he /she /they executed the same in his /her /their authorized 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. WITNESS my hand and official seal. Notary Public • O oa U ut cx- io3mNd V 1181HX3 EL TIGRE COURT U) O O.WS VAjjj.,EY ROAD 0 0 r- TONINI DRIVE M w N ! CZ .j FOREMAN COURT eV Al Al cn "t ETO CIRCLE 'a. Le% cm %com N LrN e& f'm rm as J ep C-3 Q: C-3 cm LA cn to Cc Ln %0 c7% .0. Ln WELSH COURT O oa U ut cx- io3mNd V 1181HX3 QA U) O O.WS VAjjj.,EY ROAD 0 0 r- TONINI DRIVE M w N ! CZ .j FOREMAN COURT eV cn to Cc WELSH COURT cl= C74 N Lo C=b U-1 2 r-_ co 00 SPOONER DRIVE .3% cft U-b co ON cm o Ol LIM crt co rQ 41 cn cn DeVAUL RANCH DRIVE X Lo O to to O oa U ut cx- io3mNd V 1181HX3 QA U) O *d m to "a - 0 0 r- • • EXHIBIT B DESCRIPTION OF REAL PROPERTY The properties located at Tract 2307 27D -1, 28D -2, 29P, 31 D -2, 32D =1, 33P, 35P 102P, 120D -1, 131D -2, 132D -1, 138D -1, 140P, and 142D -1. Lots with a 1 or 2 designation following denote single (1) or two story (2) as further described below. 1. Eto Circle Lot # 27 Duplex APN 2. Eto Circle Lot # 28 Duplex APN 3.- Eto Circle Lot #.29 Patio APN 4. Eto Circle Lot #31 Duplex APN 5. Eto Circce Lot #32 Duplex APN 6. Eto Circle Lot # 33 Patio APN 7. Eto Circle Lot #35 Patio APN 8. Spooner Drive Lot # 102 Patio APN 9. Foreman Court Lot # 120 Duplex APN 10. Foreman Court Lot # 131 Duplex APN 11. Foreman Court Lot #132 Duplex APN 12. Tonini Drive Lot #138 Duplex APN 13. 'Tonini Drive Lot #140 Patio APN 14. Tonini Drive Lot #142 Duplex APN END OF DOCUMENT 0 . 0 $ A M E RI A } STATE OF CALI °RNIA }ss. COUNTY OF .t -«�a } , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name( )s 3are subscribed to the within instrument and acknowledged to me that h / they executed the same in his her heir authorized capacityrtie and that by hi er heir signature(s) on the instrument the person(N or the entity upon behalf of which the person acted, executed the instrument. WITNESS my hand and official seal. Signature KAREN L. 0G8UR11 C N - t M. # 1413283. a En Pubic- Cakfomla f Sant WS M O Exp. ay, (This area for official notarial seal) Title of Document � � 1>1,7o - Date of Document U 07 L4-- O& No. of Pages Other signatures not acknowledged 3008 (1/94) (General) First American Title Insurance Company T AMERI r STATE OF CALIZJA COUNTY OF On before me, personally appeared , personally known to me (o ) to be the person(owhose name(* is /aye subscribed to the within instrument and acknowledged to me that #e/she /t#ey executed the same in hi6/her /the# authorized capacity(f *, and that by W6 /her /their signatures) on the instrument the person(Wor the entity upon behalf of which the person acted, executed the instrument. WITNES; Signature Title of Document Date of Document Other signatures not acknowledged LEE PRICE Commission # 1413258 Notary Public - Cantomia San Luis Obispo County OIMVCornm. Eq*es May 21.2007 (This area for official notarial seal) No. of Pages 3008 (1/94) (General) First American Title Insurance Company t I, I 1 ORIGINAL RECORDED IN THE Or-RCE 2 RETURN TO: OF THE COUNTY RECORDER Of SAN 3 LUIS 0615 O , COUNTY, CALIFORNIA 4 City Clerk ON 5Y- Z Z .0- 0 - AS 5 City of San Luis Obispo DOCUMENT NO.,Z��?� �y33f 6 990 Palm Street 7 San Luis Obispo, CA 93401 -3249 10 DE TOLOSA PROMISSORY NOTE 11 SECURED BY DEED OF TRUST 12 13 $ 210,675.00! Date: _July 23, _2003 14 At San Luis Obispo, California 15 16 FOR VALUE RECEIVED, Debbra Denise Thompson, ( "Maker ") promises to pay to the order of 17 the City of San Luis Obispo ( "City") at 990 Palm Street, San Luis Obispo, California 93401 or 18 such other address as City may from time to time designate, the sum of Two Hundred Ten 19 Thousand. Six Hundred Seventy -Five and 00 /100 Dollars ($210,675.00) according to the terms 20 set forth herein. This Note shall accrue interest, compounded monthly, at an annual rate of 4.5 21 percentage points added to the IIth District Cost of Funds, as published by the Federal Home 22 Loan Bank Board, amortized over 30 years. The Loan shall be amortized over thirty years, with 23 monthly payments of principal and interest due and payable to the City on the first day of each 24 month unless waived or forgiven, as set forth below. 25 26 1. Security for Note. This Note is secured by a deed of trust of even date herewith (the "Deed 27 of Trust ") executed by Maker, as Trustor, and naming City as Beneficiary, covering certain real 28 property ( "the Property") owned by Maker in the County of San Luis Obispo, State of California, 29 commonly knows as 1683 Tonini Drive, which Property is more particularly described in Exhibit 30 A, attached hereto. 31 32 2. Incorporation of Affordable Housing Agreement. This Note and the Deed of Trust are 33 executed and delivered pursuant to that certain "Affordable Housing Agreement" ( "Affordability 34 Agreement ") recorded in the County of San Luis Obispo on September 25, 2001. between City 3.5 and SLO Estates, Inc., regarding affordable housing requirements applying to the De Tolosa 36 Ranch Residential Development. Pursuant to the Affordability Agreement, Maker is to live at 37 the Property. Consequently, this Note is subject, to section 711.5 of the California Civil Code, 38 which grants to City the authority to accelerate all amounts due under this Note if any subsequent 39 transfer of the Property at any time does not comply with the provisions of the Affordability 40 Agreement or Deed of Trust. The Affordability Agreement is incorporated herein by this 41 reference as though set forth in its entirety and attached hereto as Exhibit B. 42 43 3. City's Right of First Refusal. Upon resale, the City or the Housing Authority of the City 44 of San Luis Obispo shall have the first right of refusal to purchase the property at then current 45 appraised value. The consideration for the City's right of first refusal shall consist of 1 percent of 46 the remaining City loan balance. The balance of the City loan remaining after deducting this 1 i Affordable Housing Promissory Note Page 2 ! ` 1 percent of the loan balance shall be credited toward the purchase price if the City chooses to 2 exercise the purchase option. The provisions of this section shall not impair the rights of a first 3 mortgage lender secured by a recorded deed of trust. The purchase money lender shall have a 4 higher priority than the City's loan. The City's security shall be prioritized as a second mortgage. 5 This first priority applies to the purchase money lender's assignee or successor in interest, to: 6 7 i. Foreclose on the subject property pursuant to the remedies permitted by law and 8 written in a recorded contract or deed of trust; or 9 10 ii.. Accept a deed of trust or assignment to the extent of the value of the unpaid first 11 mortgage to the current market value in lieu of foreclosure in the event of default 12 by a trustor; or 13 14 iii. Sell the property to any person at a fair market value price subsequent to 15 exercising its rights under the deed of trust. Any value in excess of the unpaid 16 mortgage and costs of sale administration shall be used to satisfy the City loan. In 17 no case may a first mortgage lender, exercising foreclosure assignment in -lieu of 18 foreclosure or sale, obtain value or rights to value greater than the value of the .19 outstanding indebtedness on the first mortgage at the time of the debt clearing 20 action. 21 22 The following types of transfers shall remain subject to the requirements of the City's loan 23 and right . of first refusal; transfer by gift, devise, or inheritance to the owner's spouse; 24 transfer to a surviving joint tenant; transfer to a spouse as part of divorce or dissolution 25 proceedings; or acquisition in conjunction with a marriage. 26 27 4. Due on Transfer. In the event Maker sells, leases, rents or otherwise transfers the 28 Property to any person or entity other than an "eligible household" (as such term is defined in the 29 Housing Agreement), then the Principal of and accrued interest on -the Loan shall be immediately 30 due and payable to the City as set forth in the Deed of Trust in favor of City recorded 31 simultaneously herewith as a second deed of trust subordinate to the deed of trust of the first 32 mortgage lender on the Property. 33 34 5. Waiver of Principal and Interest. City waives timely payment of the Principal of and 35 interest on the Loan for such time as Maker, who has been determined by City or its Housing 36 Authority to be an eligible buyer, remains as the owner and occupant of the Property as Maker's 37 principal residence until August Z2., 2033. 38 39 6. Forgiveness of Loan. City will forgive the repayment of the outstanding Principal of the 40 Loan and all interest thereon as long as Maker, or subsequent buyer determined by City or its kid Affordable Housing Promissory Note Page 3 1 Housing Authority to be an eligible household, remains as the owner and occupant of the 2 Property as Maker's principal residence until August ZZ , 2033. 3 4 7. Prepayment. This Note may not be prepaid in whole or in part, unless called due by City. 5 6 8. Payment. The amount due under this Note shall be paid without the necessity for notice 7 or demand by City. 8 9 9. Payment Amount. The amount due under this Note shall be paid from the net proceeds 10 as a result of any transfer. Net proceeds is the sales price minus any loans or liens that are senior 11 to this Note and minus closing costs. 12 13 10. Default Defined. In addition to other defaults referred to in this Note and the Deed of 14 Trust, it shall be a default under this Note if Maker .fails to make any payment or perform any 15 obligation under or in connection with (a) this Note, (b) the Deed of Trust, or (c) any other note, 16 trust deed or other obligation of Maker relating to the Property, including but not limited to the 17 Affordability Agreement, or secured by all or any part of the Property, whether junior or senior to 18 this Note, and if such failure is not cured within such time as may be permitted by the obligation 19 or the obligee. 20 21 11. Options of City upon Default. Upon the occurrence of a default, City shall have the 22 option, without further notice or demand: 23 24 (a) To declare the Note to be immediately due and payable; 25 26 (b) If the default relates to a transfer of the Property, to bring an action at law or in 27 equity to require Maker and the proposed transferee to terminate and/or rescind the sales 28 contract or lease and/or to declare the transfer void, notwithstanding that the transfer may 29 have closed and become final as between Maker and the transferee; or 30 31 (c) To pursue any other remedy available under this Note or the Deed of Trust, or 32 at law or in equity or under any other agreement, instrument or document entered into by 33 Maker and City, including but not limited to the Affordability Agreement. 34 35 12. Failure to Exercise Options. Failure to exercise any such option upon the occurrence of 36 one or more events of default shall not constitute a waiver of City's right to exercise any such 37 option at a later time. 38 39 13. Costs of Enforcement and Collection. If Maker defaults under this Note, Maker shall. 40 pay all costs of enforcement and collection, including, but not limited to, costs and attorney's I 0 � 0 Affordable Housing Promissory Note Page 4 1 fees, including reasonable attorney's fees, whether or not such enforcement or collection includes 2 filing a lawsuit or prosecution of a lawsuit, if filed. 3 4 14. City's Right to Transfer Interest in Note. City and any subsequent holder of this Note 5 may at any time, without consent of Maker, sell, assign, pledge, hypothecate, transfer and 6 negotiate or grant participation in any part of or any interest in City's rights and benefits under 7 this Note to another governmental body or nonprofit organization which is eligible to receive 8 such transfer under state and federal law. 9 10 15. Waiver of Notice and Statute of Limitations. Except for any notice expressly required 11 by this Note, Maker waives demand, notice of demand, presentation for payment, notice of non - 12 payment or dishonor, protest and notice of protest. To the fullest extent permitted by law, Maker 13 waives the defense of the statute of limitations in any action on this Note or to recover on the 14 security for this Note. 15 16 16. Liabili . City's acceptance of any payment under this Note which is less than payment in 17 full of all amounts then due and payable, or the granting of any extension of time for payment of 18 any amount due under this Note or for the performance of any covenant, condition or agreement 19 entered into by Maker and City, or City's grant of any other indulgence to Maker, or City's taking 20 or release of other or additional security for the indebtedness evidenced hereby, or any other 21 modification or amendment of this Note shall in no way release or discharge the liability of 22 Maker or any endorser, guarantor or other person secondarily liable for this Note. 23 24 17. Governing Law. This Note shall be .governed by the laws of the State of California. 25 Maker agrees that the site of any hearing or action of whatever nature or kind regarding this Note 26 shall be conducted in the County of San Luis Obispo, State of California. 27 28 18. Severability. If any provision of this Note or any application of such provision be 29 declared by a court to be invalid or unenforceable, such invalidity or unenforceability shall not 30 affect any other application of such provision or the balance of the provisions hereof, which 31 shall, to the fullest extent possible, remain in full force and effect. 32 33 MAKER: 34 PLU 35 Debbra Denise Thompson 36 (attach notarization) 37 38 39 40 41 1 2 3 4 5 6 7 8 .9 10 11. 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 n Affordable Housing Promissory Note [a) I rf Wendy orge, Acting City. Administrative Officer APPROVED AS TO FORM AND LEGAL EFFECT: Jonath ell, City Attorney • • Affordable Housing Promissory Note Page 6 EXHIBIT "A' • DESCRIPTION OF REAL PROPERTY Lot 140 of Tract 2307, in the City of S'an Luis Obispo, County of San Luis Obispo; State of California, according to map recorded September 25, 2001 in Book 19, Page 77 of Maps, in the office of the County Recorder of said County. . EXHIBIT 'B' RECORDING REQUESTED BY: <SLO Estates, Inc. Fin'! WHEN RECORDED MAIL TO: City Clerk City of San Luis Obispo 990 Palm Street San Luis Obispo, CA 93401 -3249 461- L--T-- JULIE RODEWALD San Luis Obispo County— Clerk/Recorder Recorded at the request of First American Title Company ; C DG 9/25/2001 8:00 AM D o C # : 2001072163 Titles: 1 Pages: 10 Fees 0.00 Taxes 0.00 Others 0.00 PAID $0.00 AFFORDABILITY AGREEMENT /DEED OF TRUST COVENANTS FOR TRACT 2307 THIS AGREEMENT (this "Agreement ") is made and entered into as of this Iq day of 6epkm be—y— , 2001, by and between the City of San Luis Obispo (the "City ") and SLO Estates, Inc., a California corporation ( "Owner"), collectively referred to as "the parties." �� RECITALS A. On December 15, 1998, the City Council adopted Resolution No. 8886, approving a 148 lot residential subdivision, located at the southern corner of the Madonna Road and Los Osos Valley Road intersection and more particularly described in Fxhihit A attached hereto ( "the Project "); and B. Mitigation measure number 1.2 of that approval requires the applicant to provide affordable housing consistent with Policy 1.22.1 of the Housing Element; and C. The parties have agreed that the Owner shall construct and sell homes in conformance with the City's Affordable Housing Standards; and D. The City and Owner desire to assure that the affordable dwelling units identified in this Agreement remain affordable to moderate income households for a period of at least thirty (30) years. NOW, THEREFORE, the parties acknowledge and agree as follows: 1.01. "Effective Date" shall mean the date of the recordation of this Agreement in the Recorder's Office of the County of San Luis Obispo. 1.02 "Eligible Households" mean the persons and families meeting the definition under the City's Housing Element and Affordable Housing Standards. DIS1 -% Page 2 0 Affordable Housing'Agreement • 1.03 "Houses" mean the duplex and patio single family residential structures to be constructed on the Properties. 1.04 "Moderate income households" mean persons and families whose income does not exceed one hundred twenty percent (120 %) of the County of San Luis Obispo area median income, adjusted for family size pursuant to the City of San Luis Obispo Affordable Housing Standards. 1.05 "Properties" mean those fourteen (14) specific real properties in the Project described in Exhibit B attached hereto and hereby incorporated by reference, which are intended to be sold to and occupied exclusively by Eligible Households during the Term pursuant to this Agreement. 1.06 "Property Term" means for each Property the thirty (30) year period commencing on the date of the recordation of the Grant Deed executed by the Owner or its successors and assigns conveying the Property to the first Eligible Household. 2.01. During the Property Term for each Property, the House to be constructed on the Property shall be used exclusively for Owner - occupied housing purposes and shall be sold or transferred only to Eligible Households. For the initial sale of each Property to an Eligible Household, the sales price shall be determined at time of building occupancy release, in accordance with City of San Luis Obispo affordable housing standards. For subsequent sales of the Property to Eligible Households, the sales prices shall be based on and consistent with then current City affordable housing standards. 2.02. The Grant Deeds for the transfers of interests in the Property by the Owner or its successors in interest and all future Grant Deeds for transfers of interests in the Properties by all subsequent owners of the Properties shall contain a restriction providing that during the Property Term for each Property there shall be no sale, lease, rental, or other transfer of the Property, except for the sale to an Eligible Household. Any sale, lease, rental, or other transfer of the Properties during their respective Property Terms in violation of this covenant shall be void. 2.03. The Owner agrees to retain the Housing Authority of the City of San Luis Obispo, or other qualified entity acceptable to the City, for screening of potential buyers of the Properties to determine if they qualify as Eligible Households. 2.04. These affordability requirements shall be covenants running with the, land as defined in California Civil Code Section 1460, and shall apply to the Properties. Pursuant to Civil Code Section 1468, which governs such covenants, the provisions of this Agreement shall be binding upon all parties having any right, title, or interest in any of the Properties described herein, or any portion thereof and on their heirs, successors in interest and assigns for their respective Property Terms. Page 3 • Affordable Housing Agreement • 2.05. When a Property is first sold to a buyer qualifying as an Eligible Household the buyer and City shall enter into an Affordable Housing Agreement which shall be recorded as an encumbrance on the Property, and secured by a recorded deed of trust. Said Agreement. and deed of trust shall establish the monetary difference between the initial purchase price and the initial appraised value as a loan payable to the City. Said loan shall accrue interest, compounded annually, at an annual rate equal to four and one half (4.5) points added to the Eleventh District Cost of Funds as currently published by the Federal Home Loan Bank. Board, amortized over the Property Term, and the monthly payments of principal and interest shall be waived by the City as long as said buyer or subsequent buyers shall have been previously approved by the City Housing Authority or other entity approved by the City as an Eligible Household, continue to own and reside in the Property subject to the City loan as such buyer's principal residence. 2.06. If a Property is sold, leased, or otherwise transferred to an entity, other than to an Eligible Household, in violation of this Agreement, the City's loan shall immediately become due and payable from the proceeds of the sale of the Property. "Proceeds of sale" shall mean the value of any and all consideration, however denominated, received or to be received by the seller from the sale of the Property after the payment of all outstanding indebtedness under the first deed of trust and. after all broker's, escrow, title and closing fees, costs and expenses in connection with the sale. 2.07. The City or the Housing Authority of the City of San Luis Obispo shall have the first right of refusal to purchase the Property at its then current fair market value in accordance with the terms and conditions set forth in this Agreement. The consideration for the City's right of first refusal shall consist of one percent (1 %) of the remaining City loan balance. The balance of the City loan remaining after deducting this one percent (11%) of the loan balance shall be credited toward the purchase price if the City chooses to exercise the purchase option. The provisions - of this Section shall not impair the rights of a first mortgage lender secured by a recorded deed of trust. The purchase money lender shall have a higher priority than the City's loan. The City's security shall be prioritized as a second mortgage. This first priority applies to the purchase money lenders assignee or successor in interest, to: (i) Foreclose on the Property pursuant to the remedies permitted by law and written in a recorded contract or deed of trust; or (ii) Accept a deed of trust or assignment to the extent of the value of the unpaid first mortgage to the current market value in lieu of foreclosure in the event of default by a trustor, or (iii) Sell the Property to any person at a fair market value price subsequent to exercising its rights under the deed of trust. Any value in excess of the unpaid mortgage and costs of sale administration shall be used to satisfy the City loan. In no case may a first mortgage lender, exercising foreclosure 'Page 4 • Affordable Housing Agreement • assignment in -lieu of foreclosure or sale, obtain value or rights to value greater than the value of the outstanding. indebtedness on the first mortgage at the time of the debt clearing action. 2.08 In addition, the following types of transfers shall remain subject to the requirements of the City's loan and right of first refusal: transfer by gift, devise, or inheritance to the Owner's spouse; transfer to a surviving joint tenant; transfer to a spouse as part of divorce or dissolution proceedings; or acquisition in conjunction with a marriage. 2.09 For purposes of determining the amount of the City's loan and the purchase price of the Property for the City's right of first refusal, the fair market value of a Property shall be determined as follows: (i) The then current Owner of the Property and the City shall attempt to agree on the fair market value of the Property. If the parties agree upon the fair market value, during the Agreement Period, the fair market value of the Property for purposes of determining the amount of the City's loan or the purchase price payable for the purchase of the Property pursuant to the right of first refusal shall be the agreed upon fair market value. If the parties are unable to agree upon the fair market value, they shall jointly select an independent MAI appraiser ( "Qualified Appraiser') with at least five (5) years full time real estate appraisal experience for properties comparable to the Property in Santa Barbara County and \or San Luis Obispo County , to appraise and set the fair market value. The parties shall share equally the fees, costs and expenses of said Qualified Appraiser. (ii) If the parties fail to agree on the selection of a Qualified Appraiser within ten (10) days ( "Initial Appraiser Selection Period "), each party shall select their own Qualified Appraiser within ten (10) days following the Initial Appraiser Selection Period and the two Qualified Appraisers shall determine and attempt to agree upon the fair market value within fifteen (15) days following the Initial Appraiser Selection Period ( "Initial Appraisal Period "). Each party shall bear the expenses of their own Qualified Appraiser. In the event that either party fails to designate a Qualified Appraiser within the Initial Appraiser Selection Period, then the determination of the. fair market value by the Qualified Appraiser selected by the other party shall be final and binding upon the parties. If the two Qualified Appraisers are able to agree as to the fair market value of the Property within the Initial Appraisal Period, then the fair market value of the Property for purposes of determining the purchase price payable for the Property pursuant to the City's right of first refusal shall be shall be the determined by the two Qualified Appraisers. (iii) If the two Qualified Appraisers are unable to agree on the fair market value of the Property within the Initial Appraisal Period, then said Qualified Appraisers shall, ,Wage 5 • Affordable Housing Agreement • within five (5) days of the expiration of the Initial Appraisal Period, designate a third Qualified Appraiser. If a third Qualified Appraiser is appointed, then the fees and costs of the third appraiser shall be borne equally by the then current owner of the Property and prospective buyer. The third Qualified Appraiser shall determine the fair market value of the Property within the ten (10) -day period following his or her appointment ( "Final Appraisal Period "). The fair market value of the Property for purposes of determining the purchase price payable for the purchase of the Property pursuant to the City's right of first refusal shall be as follows:, If the highest appraised fair market value is more than one hundred five percent (105 %) of the middle appraised fair market value, then the highest appraised fair market value shall be disregarded. If the lowest appraised fair market value is less than ninety -five percent (95 %) of the middle appraised fair market value, then the lowest appraised fair market value shall be disregarded. If there is then only one remaining appraised fair market value, that fair market value shall be the fair market value of the Property for purposes of determining the purchase price payable for the purchase of the Property pursuant to the City's right of first refusal. If there is then more than one remaining appraised fair market value, the remaining appraised fair market value shall be averaged, and the fair market value of the Property for purposes of determining the the purchase price payable for the purchase of the Property pursuant to the City's right of first refusal shall be the average of such appraised fair market values. 3.01. In the event the Owner has not completed the construction of the Housesand „ received a final building inspection on all Houses within two (2) years from the Effective Date, the Ownership and control of:the Properties shall revert to the City. Extensions of this period of time may be granted at the discretion of the City if the Owner has demonstrated just cause and a_ "good faith" effort to develop the Properties. NO • Page 6 Affordable Housing Agreement 4.01. Unless otherwise provided, all notices herein required shall be in writing, and delivered in person or sent by United States first class mail, postage prepaid to the address of the respective parties as specified below or at other addresses that may be later specified by the parties hereto: If to the City:. City of San Luis Obispo Community Development Director 990 Palm Street San Luis Obispo, CA 93401 -3249 If to the Owner: SLO Estates, Inc. 200 East Carrillo Street, Suite 200 Santa Barbara Californ_ iao931.01 Attention: Kenneth P. Slaught and With a copy to: SLO Estates, Inc. 1880 Santa Barbara Street, Suite F San Luis Obispo, California 93401 Attention: Patrick N. Smith Seed Mackall & Cole ,LLP 1332 Anacapa Street, Suite 200 Santa Barbara, California 93101 Attention: David R. Reese, Esq. 4.02. The Owner hereby specifically acknowledges and agrees to be bound by the covenants respecting affordability on the Properties contained herein. 4.03 This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which shall constitute one and the same instrument. • • IN WITNESS WHEREOF, this Agreement has been duly executed by the undersigned as of the date set forth below. SLO ESTAT S INC., a California co tion By: Patrick N. Smith, President — _ A enneth P. Slaug Vice President CITY: Jo n Man eville, Community Development Director APPROVED AS TO FORM AND LEGAL EFFECT: se City Attorney 9 S a7 O Date Date STATE OF CALIFORNIA ) ) ss. COUNTY OF San Luis Obispo ) On August N , 2001 before me, the undersigned, a Notary Public in and for said County and State, personally appeared Patrick N. Smith - personally known to me (uFlm to be the person( whose name(* is /aaecsubscribed to the within instrument and acknowledged to me that he /sJgnAhWexecuted the same in his%40 Wauthorized capacity(), and that by his4mrAM>Ksignature�x) on the instrument the person( r4, or the entity upon behalf of which the person(# acted, executed the instrument. WITNESS my hand and official seal. Not ry Public STATE OF CALIFORNIA ss. COUNTY OF SANTA BARBARA On , 2001 before me, the undersigned, a Notary Public in and for said County and State, personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is /are subscribed to the within instrument and acknowledged to me that he /she /they executed the same in his /her /their authorized 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. WITNESS my hand and official seal. Notary Public I i J _ - -.... _i.....:... LOS OSOS VALLEY ROAD j 1 j f i i 1 I j � j I I EL TIGRE COURT _ 1 j i i TONINI DRI VE t _._.�._.. —._. .. f . -.. _.... .I to � ^ M� ^ � �t tQ��•`� FOREMAN COURT i i i........ —_ . I Q) �• �.I Q C WELSH COURT i ` \ {• �` O C a O N t a0 c, " DRIVE cc - a -W ETO CIRCLE SP NER ^ ao a+ cK O1 ON °' c-0 N N N N o u'1 O O o0 x N O1 O1 ti _ RANCH DRIVE - - DeVAUL ON I__ -• N, _ b O b to la _ b t0 J Icr- U oa W = v rV � � I rn v .. -... Ln m O O o m Q O I I 1o3roNd d 1181HX3 it EXHIBIT B DESCRIPTION OF REAL PROPERTY The properties located at Tract 2307 27D -1, 28D -2, 29P, 3110-2, 32D -1, 33P, 35P 102P, 1.20D -1, 131D-2, 132D =1, 138D -1, 140P, and 142D -1. Lots with a 1 or 2 designation following denote single (1) or two story (2) as further described below. 1. Eto Circle Lot # 27 Duplex APN 2. Eto Circle Lot # 28 Duplex APN 3. Eto Circle Lot # 29, Patio APN 4. Eto Circle Lot #31 Duplex APN, 5. Eto Cirlce Lot #32 Duplex APN; 6. Eto Circle Lot # 33 Patio APN 7. Eto Circle Lot #35 Patio APN 8: Spooner Drive Lot # 102 Patio APN 9. Foreman Court Lot # 120 Duplex APN 10. Foreman Court Lot # 131 Duplex APN 11. Foreman Court Lot #132 Duplex APN 12. Tonini Drive Lot #138 Duplex APN.. 13. Tonini Drive Lot #140 Patio APN 14. Tonini Drive Lot #142 Duplex APN i END OF DOCUMENT T A M E RI ,� r9 } STATE OF CA }ss. COUNTY OF �"a e- '4111"1 Re" 0 = On before me, VIRWIN"C"Jon personally appeared I " personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose names sure subscribed to the within instrument and acknowledged to me that hEe5they executed the same in hi /her heir authorized capacity*�i�, and that by hi er eir signature(�on the instrument the person or the entity upon behalf of which the persons acted, executed the instrument. WITNESS m hand and official seal. KO.='.i:. L. OG 328 I Y N COMM. # 1413283 < W Notify pubic -Cajdnia I ow-Ity of San Luis Obispo Signature My Comm � May. 20 �1 (This area for official notarial seal) Title of Document `D,:>T0 jr a kb-eJ Date of Document No. of Pages Other signatures not acknowledged 3008 (1/94) (General) First American Title Insurance Company • • • AMER, r9 STATE OF CALIFOR } } ss. COUNTY OF } On �, ;do-before me, personally ppeared , personally known to me (o ) to be the person,() whose nam") is /ate subscribed to the within instrument and acknowledged to me that k}s /she /t#ey executed the same in his /her /their authorized capacity(os), and that by /her/ their signaturetsj on the instrument the person{/0 or the entity upon behalf of which the personal acted, executed the instrument. WITNESS Signature Title of Document Date of Document Other signatures not acknowledged LEE PRICE Commission # 1413258 LNotary Public - CaEfomla San Luis oblspo County — Comm. Expires May 21, 2007 (This area for official notarial sea]) No. of Pages 3008 (1/94) (General) First American Title Insurance Company 1 2 RETURN TO: 3 4 City Clerk 5 City of San Luis Obispo 6 990 Palm Street 7 San Luis Obispo, CA 93401 -3249 9 10 DE TOLOSA PROMISSORY NOTE 11 SECURED BY DEED OF TRUST 12 13 $ 210,675.00 Date: July 23, _2003 14 At San Luis Obispo, California 15 16 FOR VALUE RECEIVED, Debbra Denise Thompson, ( "Maker ") promises to pay to the order of 17 the City of San Luis Obispo ( "City") at 990 Palm Street, San Luis Obispo, California 93401 or 18 such other address as City may from time to time designate, the sum of Two Hundred Ten 19 Thousand Six Hundred Seventy -Five and 00 /100 Dollars ($210,675.00) according to the terms 20 set forth herein. This Note shall accrue interest, compounded monthly, at an annual rate of 4.5 21 percentage points added to the 11th District Cost of Funds, as published by the Federal Home 22 Loan Bank Board, amortized over 30 years. The Loan shall be amortized over thirty years, with 23 monthly payments of principal and interest due and payable to the City on the first day of each 24 month unless waived or forgiven, as set forth below. 25 26 1. Security for Note. This Note is secured by a deed of trust of even date herewith (the "Deed 27 of Trust ") executed by Maker, as Trustor, and naming City as Beneficiary, covering certain real 28 property ( "the Property") owned by Maker in the County of San Luis Obispo, State of California, 29 commonly knows as 1683 Tonini Drive, which Property is more particularly described in Exhibit 30 A, attached hereto. 31 32 2. Incorporation of Affordable Housing Agreement. This Note and the Deed of Trust are 33 executed and delivered pursuant to that certain "Affordable Housing Agreement" ( "Affordability 34 Agreement ") recorded in the County of San Luis Obispo on September 25, 2001 between City 35 and SLO Estates, Inc., regarding affordable housing requirements applying to the De Tolosa 36 Ranch Residential Development. Pursuant to the Affordability Agreement, Maker is to live at 37 the Property. Consequently, this Note is subject to section' 711.5 of the California Civil Code, 38 which grants to City the authority to accelerate all amounts due under this Note if any subsequent 39 transfer of the Property at any time does not comply with the provisions of the Affordability 40 Agreement or Deed of Trust. The Affordability Agreement is incorporated herein by this 41 reference as though set forth in its entirety and attached hereto as Exhibit B. 42 43 3. City's Right of First Refusal. Upon resale, the City or the Housing Authority of the City 44 of San Luis Obispo shall have the first right of refusal to purchase the property at then current 45 appraised value. The consideration for the City's right of first refusal shall consist of 1 percent of 46 the remaining City loan balance. The balance of the City loan remaining after deducting this 1 Affordable Housing Promissory Note Page 2 fA 1 percent of the loan balance shall be credited toward the purchase price if the City chooses to 2 exercise the purchase option. The provisions of this section shall not impair the rights of a first 3 mortgage lender secured by a recorded deed of trust. The purchase money lender shall have a 4 higher priority than the City's loan. The City's security shall be prioritized as a second mortgage. 5 This first priority applies to the purchase money lender's assignee or successor in interest, to: 6 7 i. Foreclose on the subject property pursuant to the remedies permitted by law and 8 written in a recorded contract or deed of trust; or 9 10 ii. Accept a deed of trust or assignment to the extent of the value of the unpaid first 11 mortgage to the current market value in lieu of foreclosure in the event of default 12 by a trustor-; or 13 14 iii. Sell the property to any person at a fair market value price subsequent to 15 exercising its rights under the deed of trust. Any value in excess of the unpaid 16 mortgage and costs of sale administration shall be used to satisfy the City loan. In 17 no case may a first mortgage lender, exercising foreclosure assignment in -lieu of 18 foreclosure or sale, obtain value or rights to value greater than the value of the 19 outstanding indebtedness on the first mortgage at the time of the debt clearing 20 action. 21 22 The following types of transfers shall remain subject to the requirements of the City's loan 23 and right of first refusal: transfer by gift, devise, or inheritance to the owner's spouse; 24 transfer to a surviving joint tenant; transfer to a spouse as part of divorce or dissolution 25 proceedings; or acquisition in conjunction with a marriage. 26 27 4. Due on Transfer. In the event Maker sells, leases, rents or otherwise transfers the 28 Property to any person or entity other than an "eligible household" (as such term is defined in the 29 Housing Agreement), then the Principal of and accrued interest on the Loan shall be immediately 30 due and payable to the City as set forth in the Deed of Trust in favor of City recorded 31 simultaneously herewith as a second deed of trust subordinate to the deed of trust of the first 32 mortgage lender on the Property. 3.3 34 5. Waiver of Principal and Interest. City waives timely payment of the Principal of and 3.5 interest on the Loan for such time as Maker, who has been determined by City or its Housing 36 Authority to be an eligible buyer, remains as the owner and occupant of the Property as Maker's 37 principal residence until August Y.Z.. 2033. 38 39 6. Forgiveness of Loan. City will forgive the repayment of the outstanding Principal of the 40 Loan and all interest thereon as long as Maker, or subsequent buyer determined by City or its Affordable Housing Promissory Note Page 3 1 Housing Authority to be an eligible household, remains as the owner and occupant of the 2 Property as Maker's principal residence until . August 2_.Z , 2033. 3 4 7. Prepayment. This Note may not be prepaid in whole or in part, unless called due by City. 5 6 8. Payment. The amount due under this Note shall be paid without the necessity for notice 7 or demand by City. 8 9 9. Payment Amount. The amount due under this Note shall be paid from the net proceeds 10 as a result of any transfer. Net proceeds is the sales price minus any loans or liens that are senior 11 to this Note and minus closing costs. 12 13 10. Default Defined. In addition to other defaults referred to in this Note and the Deed of 14 Trust, it shall be a default under this Note if Maker fails to make any payment or perform any 15 obligation under or in connection with (a) this Note, (b) the Deed of Trust, or (c) any other note, 16 trust deed or other obligation of Maker relating to the Property, including but not limited to the 17 Affordability Agreement, or secured by all or any part of the Property, whether junior or senior to 18 this Note, and if such failure is not cured within such time as may be permitted by the obligation 19 or the obligee. 20 21 11. Options of City upon Default. Upon the occurrence of a default, City shall have the 22 option, without further notice or demand: 23 24 (a) To declare the Note to be immediately due and payable; 25 26 (b) If the default relates to a transfer of the Property, to bring an action at law or in 27 equity to require Maker and the proposed transferee to terminate and/or rescind the sales 28 contract or lease and/or to declare the transfer void, notwithstanding that the transfer may 29 have closed and become final as between Maker and the transferee; or 30 31 (c) To pursue any other remedy available under this Note or the Deed of Trust, or 32 at law or in equity or under any other agreement, instrument or document entered into by 33 Maker and City, including but not limited to the Affordability Agreement. 34 35 12. Failure to Exercise Options. Failure to exercise any such option upon the occurrence of 36 one or more events of default shall not constitute a waiver of City's right to exercise any such 37 option at a later time. 38 39 13. Costs of Enforcement and Collection. If Maker defaults under this Note, Maker shall 40 pay all costs of enforcement and collection, including, but not limited to, costs and attorney's • 0 Affordable Housing Promissory Note Page 4 1 fees, including reasonable attorney's fees, whether or not such enforcement or collection includes 2 filing a lawsuit or prosecution of a lawsuit, if filed. 3 4 14. City's Right to Transfer Interest in Note. City and any subsequent holder of this Note 5 may at any time, without consent of Maker, sell, assign, pledge, hypothecate, transfer and 6 negotiate or grant participation in any part of or any interest in City's rights and benefits under 7 this Note to another governmental body or nonprofit organization which is eligible to receive 8 such transfer under state and federal law. 9 10 15. Waiver of Notice and Statute of Limitations. Except for any notice expressly required 11 by this Note, Maker waives demand, notice of demand, presentation for payment, notice of non - 12 payment or dishonor, protest and notice of protest. To the fullest extent permitted by law, Maker 13 waives the defense of the statute of limitations in any action on this Note or to recover on the 14 security for this Note. 15 16 16. Liability. City's acceptance of any payment under this Note which is less than payment in 17 full of all amounts then due and payable, or the granting of any extension of time for payment of 18 any amount due under this Note or for the performance of any covenant, condition or agreement 19 entered into by Maker and City, or City's grant of any other indulgence to Maker, or City's taking 20 or release of other or additional security for the indebtedness evidenced hereby, or any other 21 modification or amendment of this Note shall in no way release or discharge the liability of 22 Maker or any endorser, guarantor or other person secondarily liable for this Note. 23 24 17. Governing Law. This Note shall be governed by the laws of the State of California. 25 Maker agrees that the site of any hearing or action of whatever nature or kind regarding this Note 26 shall be conducted in the County of San Luis Obispo, State of California. 27 28 18. Severability. If any provision of this. Note or any application of such provision be 29 declared by a court to be invalid or unenforceable, such invalidity or unenforceability shall not 30 affect any other application of such provision or the balance of the provisions hereof, which 31 shall, to the.fullest extent possible, remain in full force and effect. 32 33 NUKER: 34 35 Debbra Denise Thompson 36 (attach notarization) 37 38 39 40 41 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 Affordable Housing Promissory Note Page 5 . CITY: Ken Hampian, City Administrative Officer APPROVED AS TO FORM AND LEGAL EFFECT: Jonathan Lowell, City Attorney Affordable Housing Promissory Note Page 6 EXHIBIT "A' DESCRIPTION OF REAL PROPERTY Lot 140 of Tract 2307, in the City of San Luis Obispo, County of San Luis Obispo, State of California, according to map recorded September 2.5, 2001 in Book 19, Page 77 of Maps, in the office of the County Recorder of said County. EXHIBIT 'B' RECORDING REQUESTED BY: <SLO Estates, Inc. � rrl t� ?-ft c.a -+�• T, -l-1 � WHEN RECORDED MAIL TO: City Clerk City of San Luis Obispo 990 Palm Street San Luis Obispo, CA 93401 -3249 4bbA4"- L= JULIE RODEWALD San. Luis Obispo County— Clerk/Recorder Recorded at the request of First American Title Company y DG. 9/25/2001 8:00 AM D O c # : 2001072163 Tales: 1 Pages: 10 Fees 0.00 Taxes 0.00 Others 0.00 PAID $0.00 AFFORDABILITY AGREEMENT /DEED OF TRUST COVENANTS FOR TRACT 2307 THIS AGREEMENT (this "Agreement ") is made and entered into as of this Iq day of l eP4cm be.;- , 2001, by and between the City of San. Luis Obispo (the "City') and SLO Estates, Inc., a California corporation ( "Owner'), collectively referred to as "the parties." RECITALS A. On December 15, 1998, the City Council adopted Resolution No. 8886, approving a 148 lot residential subdivision, located at the southern corner of the Madonna Road and Los Osos . Valley Road intersection and more particularly described in Fxhihit A attached hereto ( "the Project "); and B. Mitigation measure number 1.2 of that approval requires the applicant to provide affordable housing consistent with Policy 1.22.1 of the Housing Element; and C. The parties have agreed that the Owner shall construct and sell homes in conformance with the City's Affordable Housing Standards; and D. The City and Owner desire to assure. that the affordable dwelling units identified in this Agreement remain affordable to moderate income households for a period of at least thirty (30) years. NOW, THEREFORE, the parties acknowledge and agree as follows: 1.01. "Effective Date" shall mean the date of the recordation of this Agreement in the: Recorder's Office of the County of San Luis Obispo. 1.02 "Eligible Households" mean the persons and families meeting the definition under the City's Housing Element and Affordable Housing Standards. 7)1 -5qq Pige 2 10 Affordable Housing Agreement 1.03 "Houses" mean the duplex and patio single family residential structures to be constructed on the Properties. 1.04 "Moderate income households" mean persons and families whose income does not exceed one hundred twenty percent (120 %) of the County of San Luis Obispo area median income, adjusted for family size pursuant to the City of San Luis Obispo Affordable Housing Standards. 1.05 "Properties" mean those fourteen (14) specific real properties in the Project described in Exhibit B attached hereto and hereby incorporated by reference, which are intended to be sold to and occupied exclusively by Eligible Households during the Term pursuant to this Agreement. 1.06 "Property Term" means for each Property the thirty (30) year period commencing on the date of the recordation of the Grant Deed executed by the Owner or its successors and assigns conveying the Property to the first Eligible Household. 2.01. During the Property Term for each Property, the House to be constructed on the Property shall be used exclusively for Owner - occupied housing purposes and shall be sold or transferred only to Eligible Households. For the initial sale of each Property to an Eligible Household, the sales price shall be determined at time of building occupancy release, in accordance with City of San Luis Obispo affordable housing standards. For subsequent sales of the Property to Eligible Households, the sales prices shall be based on and consistent with then current City affordable housing standards. 2.02. The Grant Deeds for the transfers of interests in the Property by the Owner or its successors in interest and all future Grant Deeds for transfers of interests in the Properties by all subsequent owners of the Properties shall contain a restriction providing that during the Property Term for each Property there shall be no sale, lease, rental, or other transfer of the Property, except for the sale to an Eligible Household. Any sale, lease, rental, or other transfer of the Properties during their respective Property Terms in violation of this covenant shall be void. 2.03. The Owner agrees to retain the Housing Authority of the City of San Luis Obispo, or other qualified entity acceptable to the City, for screening of potential buyers of the Properties to determine if they qualify as Eligible Households. 2.04. These affordability requirements shall be covenants running with the . land as defined in California Civil Code Section 1460, and shall apply to the Properties. Pursuant to Civil Code Section 1468, which govems such covenants, the provisions of this Agreement shall be binding upon all parties having any right, title, or interest in any of the Properties described herein, or any portion thereof and on their heirs, successors in interest and assigns for their respective Property Terms. Page 3 Affordable Housing Agreement 2.05. When a Property is first sold to a buyer qualifying as an Eligible Household the buyer and City shall enter into an Affordable Housing Agreement which shall be recorded as an encumbrance on the Property, and secured by a recorded deed of trust. Said Agreement. and deed of trust shall establish the monetary difference between the initial purchase price and the initial appraised value as a loan payable to the City. Said loan shall accrue interest, compounded annually, at an annual rate equal to four and one half (4.5) points added to the Eleventh District Cost of Funds as currently published by the Federal Home Loan Bank Board, amortized over the Property Term, and the monthly payments of principal and interest shall be waived by the City as long as said buyer or subsequent buyers shall have been previously approved by the City Housing Authority or other entity approved by the City as an Eligible Household, continue to own and reside in the Property subject to the City loan as such buyer's principal residence. 2.06. If a Property is sold, leased, or otherwise transferred to an entity, other than to an Eligible Household, in violation of this Agreement, the City's loan shall immediately become due and payable from the proceeds of the sale of the Property. "Proceeds of sale" shall mean the value of any and all consideration, however denominated, received or to be received by the seller from the sale of the Property after the payment of all outstanding indebtedness under the first deed of trust and after all broker's, escrow, title and closing fees, costs and expenses in connection with the sale. 2.07.. The City or the Housing Authority of the City of San Luis Obispo shall have the first right of refusal to purchase the Property at its then current fair market value in accordance with the terms and conditions set forth in this Agreement. The consideration for the City's right of first refusal shall consist of one percent (1 %) of the remaining City loan balance. The balance of the City loan remaining after deducting this one percent (11%) of the loan balance shall be credited toward the purchase price if the City chooses to exercise the purchase option. The provisions of this Section shall not impair the rights of a first mortgage lender secured by a recorded deed of trust. The purchase money lender shall have a higher priority than the City's loan. The City's security shall be prioritized as a second mortgage. This first priority applies to the purchase money lender's assignee or successor in interest, to: (i) Foreclose on the Property pursuant to the remedies permitted by law and written in a recorded contract or deed of trust; or (ii) Accept a deed of trust or assignment to the extent of the value of the unpaid first mortgage to the current market value in lieu of foreclosure in the event of default by a trustor; or (iii) Sell the Property to any person at a fair market value price subsequent to exercising its rights under the deed of trust. Any value in excess of the unpaid mortgage and costs of sale administration shall be used to satisfy the City loan. In no case may a first mortgage lender, exercising foreclosure Page 4 • Affordable Housing Agreement assignment in -lieu of foreclosure or sale, obtain value or rights to value greater than the' value of the outstanding. indebtedness on the first mortgage at the time of the debt clearing action. 2.08 In addition, the following types of transfers shall remain subject to the requirements of the City's loan and right of first refusal: transfer by gift, devise, or inheritance to the Owners spouse; transfer to a surviving joint tenant; transfer to a spouse as part of divorce or dissolution proceedings; or acquisition in conjunction with a marriage. 2.09 For purposes of determining the amount of the City's loan and the purchase price of the Property for the City's right of first refusal, the fair market value of a. Property shall be determined as follows: (i) The then current Owner of the Property and the City shall attempt to agree on the fair market value of the Property. If the parties agree upon the fair market value, during the Agreement Period, the fair market value of the Property for purposes of determining the amount of the City's loan or the purchase price payable for the purchase of the Property pursuant to the right of first refusal shall be the agreed upon fair market value. If the parties are unable to agree upon the fair market value, they shall jointly select an independent MAI appraiser ( "Qualified Appraiser') with at least five (5) years full time real estate appraisal experience for properties comparable to the Property in Santa Barbara County and \or San Luis Obispo County, to appraise and set the fair market value. The parties shall share equally the fees, costs and expenses of said Qualified Appraiser. (ii) If the parties fail to agree on the selection of a Qualified Appraiser within ten (10) days ( "Initial Appraiser Selection Period "), each party shall select their own Qualified Appraiser within ten (10) days following the Initial Appraiser Selection Period and the two Qualified Appraisers shall determine and attempt to agree upon the fair market value within fifteen (15) days following the Initial Appraiser Selection Period ( "Initial Appraisal Period "). Each party shall bear the expenses of their own Qualified Appraiser. In the event that either party fails to designate a Qualified Appraiser within the Initial Appraiser Selection Period, then the determination of the fair market value by the Qualified Appraiser selected by the other party shall be final and binding upon the parties. If the two Qualified Appraisers are able to agree as to the fair market value of the Property within the Initial Appraisal Period, then the fair market value of the Property for purposes of determining the purchase price payable for the Property pursuant to the City's right of first refusal shall be shall be the determined by the two Qualified Appraisers. (iii) If the two Qualified Appraisers are unable to agree on the fair market value of the Property within the Initial Appraisal Period, then said Qualified Appraisers shall, Page 5 Affordable Housing Agreement 6 within five (5) days of the expiration of the Initial Appraisal Period, designate a third Qualified Appraiser. If a third Qualified Appraiser is appointed, then the fees and costs of the third appraiser shall be borne equally by the then current owner of the Property and prospective buyer. The third Qualified Appraiser shall determine the fair market value of the Property within the ten (10) -day period following his or her appointment ( "Final Appraisal Period "). The fair market value of the Property for purposes of determining the purchase price payable for the purchase of the Property pursuant to the City's right of first refusal shall be as follows: If the highest appraised fair market value is more than one hundred five percent (105 %) of the middle appraised fair market value, then the highest appraised fair market value shall be disregarded. If the lowest appraised fair market value is less than ninety -five percent (95 %) of the middle appraised fair market value, then the lowest appraised fair market value shall be disregarded. If there is then only one remaining appraised fair market value, that fair market value shall be the fair market value of the Property for purposes of determining the purchase price payable for the purchase of the Property pursuant to the City's right of first refusal. If there is then more than one remaining appraised fair market value, the remaining appraised fair market value shall be averaged, and the fair market value of the Property for purposes of determining the the purchase price payable for the purchase of the Property pursuant to the City's right of first refusal shall be the.average of such appraised fair market values. 3.01. In the event the Owner has not completed the construction of the - Houses and received a final building inspection on all Houses within two (2) years from the Effective Date, the Ownership and control of-the Properties shall revert to the City. Extensions of this period of time may be granted at the discretion of the City if the Owner has demonstrated just cause and a7good faith" effort to develop the Properties. No Page 6 Affordable Housing Agreement 4.01. Unless otherwise provided, all notices herein required shall be in writing, and delivered in person or sent by United States first class mail, postage prepaid to the address of the respective parties as specified below or at other addresses that may be later specified by the parties hereto: If to the City: City of San Luis Obispo Community Development Director 990 Palm Street San Luis Obispo, CA 93401 -3249 If to the Owner: SLO Estates, Inc. 200 East Carrillo Street, Suite 200 Santa Barbara Californiao93101 Attention: Kenneth P. Slaught and With a copy to: SLO Estates, Inc. 1880 Santa Barbara Street, Suite F San Luis Obispo, California 93401 Attention: Patrick N. Smith Seed Mackall & Cole ,LLP 1332 Anacapa Street, Suite 200 Santa Barbara, California 93101 Attention: David R. Reese, Esq. 4.02. The Owner hereby specifically acknowledges and agrees to be bound by the covenants respecting affordability on the Properties contained herein. 4.03 This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which shall constitute one and the same instrument. IN WITNESS WHEREOF, this Agreement has been duly executed by the undersigned as of the date set forth below. SLO ESTAT S INC., a California co tion By. S 7/4 Date Patrick N. Smith -, President :th P. Slaug President CITY: � — U1/- 0 ( Date Jo n Man evi le, Community Development Director APPROVED AS TO FORM AND LEGAL EFFECT: 2 STATE OF CALIFORNIA ) ) ss. COUNTY OF San Luis Obispo ) On August 27 , 2001 before me, the undersigned, a Notary Public in and for said County and State, personally appeared Patrick N. Smith personally known to me (eT=pre #e=me=uR:t#�asiu:sf Frei; eFlEe) to be the person( whose name(* is /a¢ecsubscribed to the within instrument and acknowledged to me that he /sIgm* Wexecuted the same in his/ (#oWauthorized capacity(), and that by his4Wff#MJ<signature(* on the instrument the person(, or the entity upon behalf of which the person(o acted, executed the instrument. WITNESS my hand and official seal. Not ry Public . STATE OF CALIFORNIA ss COUNTY OF SANTA BARBARA On , 2001 before me, the undersigned, a Notary Public in and for said County and State, personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is /are subscribed to the within instrument and acknowledged to me that he /she /they executed the same in his /her /their authorized 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. WITNESS my hand and official seal. Notary Public • LOS OSOS VALLEY ROAD i. . ..... TOMINI DRIVE 6% :z !Qt Ln FOREMAN COURT c, Qk WELSH COURT Q) —N Cal C- O —E. r- C:31 eo cc 1.0 zz; SPOONER DRIVE cc r C1.1 co °O C In m M 0% 41 01 DRIVE C DeVAUL RANCH DRIVE o Cc eft %o %= Lo to b O an to O CL O EM 13WONd v 11131HX3 O �N U) *d cc O "o O �a 0 EL 77GRE COURT % ------------ cic cc I-- to C'm rn tvi m cn C', ETO CIRCLE cm. to N c14 crw u -t 11b UN to LA cni Ln en LOS OSOS VALLEY ROAD i. . ..... TOMINI DRIVE 6% :z !Qt Ln FOREMAN COURT c, Qk WELSH COURT Q) —N Cal C- O —E. r- C:31 eo cc 1.0 zz; SPOONER DRIVE cc r C1.1 co °O C In m M 0% 41 01 DRIVE C DeVAUL RANCH DRIVE o Cc eft %o %= Lo to b O an to O CL O EM 13WONd v 11131HX3 O �N U) *d cc O "o O �a 0 EXHIBIT B DESCRIPTION OF REAL PROPERTY The properties located at Tract 2307 27D -1, 28D -2, 29P, 31D-2, 32D -1, 33P, 35P 102P, 120D -1, 131D-2, 132D -1, 138D -1, 140P, and 142D -1. Lots with a 1 or 2 designation following denote single (1) or two story (2) as further described below. 1. Eto Circle Lot # 27 Duplex APN 2. Eto Circle Lot # 28 Duplex APN 3. Eto Circle Lot. # 29 Patio APN 4. Eto Circle Lot #31 Duplex APN 5. Eto Cidce Lot #32 Duplex APN 6. Eto Circle Lot # 33 Patio APN 7. Eto Circle Lot #35 Patio APN 8. Spooner Drive Lot # 102 Patio APN 9. Foreman Court Lot # 120 Duplex APN 10. Foreman Court Lot # 131 Duplex APN 11. Foreman Court Lot #132 Duplex APN. 12. Tonini Drive Lot #138 Duplex APN 13. Tonini Drive Lot #140 Patio APN 14. Tonini Drive Lot #142 Duplex APN END OF DOCUMEN L • r `T AME RI. } STATE OF CA ORf�IA }ss. COUNTY OF Lu - h } J personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name,s`(�Yare subscribed to the within instrument and acknowledged to me that he sh they executed the same in hi /her heir authorized capacit�i , and that by hi er eir signature(�on the instrument the person or the entity upon behalf of which the person(skacted, executed the instrument. WITNESS my hand and official seal. ISignature Title of Document Date of Document Other signatures not acknowledged (This area for official notarial seal) Z KAREN L. CG3r:RN 4 COMM. * 1413283 < ' 5 No;afy Pubic- Cafdmm a J Courty of San Luis Cbisoo My Ccxm. E*. May. 20 )2Y7 No. of Pages 3008 (1 /94) (General) Cl.of A...n•;r Tfle —...a nne (`,nm nanv � I AMERI STATE OF CALIFORNIA COUNTY OF On , before me, , personally appeared personally, known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is /are subscribed to the within instrument and acknowledged to me that he /she /they executed the same in his /her /their authorized 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. WITNESS my hand and official seal. Signature (This area for official notarial seal) Title of Document. Date of Document No. of Pages Other signatures not acknowledged 3008 (1/94) (General) • EXHIBIT 'B' RECORDING REQUESTED BY: <SLO Estates, Inc. —F, Rcrl pri C-0— � me- 1-1 WHEN RECORDED MAIL TO: City Clerk City of San Luis Obispo 990 Palm Street San Luis Obispo, CA 93401 -3249 44SZ0R,,— t.S JULIE RODEWALD DG San Luis Obispo County— Clerk/Recorder 9/25/2001 Recorded at the request of 8:00 AM First American Title Company D o C # : 2001072163 Titles: 1 Pages: 10 Fees 0.00 Taxes 0.00 Others 0.00 PAID $0.00 AFFORDABILITY AGREEMENT /DEED OF TRUST COVENANTS FOR TRACT 2307 THIS AGREEMENT (this "Agreement ") is made and entered into as of this Iq day of l- t�,km be.;- , 2001, by and between the City of San Luis Obispo (the "City") and SLO Estates, Inc., a California corporation ( "Owner"), collectively referred to as "the parties." RECITALS A. On December 15, 1998, the City Council adopted Resolution No. 8886, approving a 148 lot residential subdivision, located at the southern corner of the Madonna Road and Los Osos Valley Road intersection and more particularly described in Fxhihit A attached hereto ( "the Project "); and B. Mitigation measure number 1.2 of that approval requires the applicant to provide affordable housing consistent with Policy 1.22.1 of the Housing Element; and C. The parties have agreed that the Owner shall construct and sell homes in conformance with the City's Affordable Housing Standards; and D. The City and Owner desire to assure that the affordable dwelling units identified in this Agreement remain affordable to moderate income households for a period of at least thirty (30) years. NOW, THEREFORE, the parties acknowledge and agree as follows: 1.01. "Effective Date" shall mean the date of the recordation of this Agreement in the Recorder's Office of the County of San Luis Obispo. 1.02 "Eligible Households" mean the persons and families meeting the definition under the City's Housing Element and Affordable Housing Standards. DI-5qq Page 2 Affordable Housing Agreement • 1.03 "Houses" mean the duplex and patio single family residential structures to be constructed on the Properties. 1.04 "Moderate income households" mean persons and families whose income does not exceed one hundred twenty percent (120 %) of the County of San Luis Obispo area median income, adjusted for family size pursuant to the City of San Luis Obispo Affordable Housing Standards. 1.05 "Properties" mean those fourteen (14) specific real properties in the Project . described in Exhibit B attached hereto and hereby incorporated by reference, which are intended to be sold to and occupied exclusively by Eligible Households during the Term pursuant to this Agreement. 1.06 "Property Term" means for each Property the thirty (30) year period commencing on the date of the recordation of the Grant Deed executed by the Owner or its successors and assigns conveying the Property to the first Eligible Household. 2.01. During the Property Term for each Property, the House to be constructed on the Property shall be used exclusively for Owner - occupied housing purposes and shall be sold or transferred only to Eligible Households. For the initial sale of each Property to an Eligible Household, the sales price shall be determined at time of building occupancy release, in accordance with City of San Luis Obispo affordable housing standards. For subsequent sales of the Property to Eligible Households, the sales prices shall be based on and consistent with then current City affordable housing standards. 2.02. The Grant Deeds for the transfers of interests in the Property by the Owner or its successors in interest and all future Grant Deeds for transfers of interests in the Properties by all subsequent owners of the Properties shall contain a restriction providing that during the Property Term for each Property there shall be no sale, lease, rental, or other transfer of the Property, except for the sale to an Eligible Household. Any sale, lease, rental, or other transfer of the Properties during their respective Property Terms in violation of this covenant shall be void. 2.03. The Owner agrees to retain the Housing Authority of the City of San Luis Obispo, or other qualified entity acceptable to the City, for screening of potential buyers of the Properties to determine if they qualify as Eligible Households. 2.04. These affordability requirements shall be covenants running with the - land as defined in California Civil Code Section 1460, and shall apply to the Properties. Pursuant to Civil Code Section 1468, which governs such covenants, the provisions of this Agreement shall be binding upon all parties having any right, title, or interest in any of the Properties described herein, or any portion thereof and on their heirs, successors in interest and assigns for their respective Property Terms. Page 3 0 Affordable Housing Agreement • 2.05. When a Property is first sold to a buyer qualifying as an Eligible Household the .buyer and City shall enter into an Affordable Housing Agreement which shall be recorded as an encumbrance on the Property, and secured by a recorded deed of trust. Said Agreement. and deed of trust shall establish the monetary difference between the initial purchase price and the initial appraised value as a loan payable to the City. Said loan shall accrue interest, compounded annually, at an annual rate equal to four and one half (4.5) points added to the Eleventh District Cost of Funds as currently published by the Federal Home Loan Bank Board, amortized over the Property Term, and the monthly payments of principal and interest shall be waived by the City as long as said buyer or subsequent buyers shall have been previously approved by the City Housing Authority or other entity approved by the City as an Eligible Household, continue to own and reside in the Property subject to the City loan as such buyer's principal residence. 2.06. If a Property is sold, leased, or otherwise transferred to an entity, other than to an Eligible Household, in violation of this Agreement, the City's loan shall immediately become due and payable from the proceeds of the sale of the Property. "Proceeds of sale" shall mean the value of any and all consideration, however denominated, received or to be received by the seller from the sale of the Property after the payment of all outstanding indebtedness under the first deed of trust and after all broker's, escrow, title and closing fees, costs and expenses in connection with the sale. 2.07. The City or the Housing Authority of the City of San Luis Obispo shall have the first right of refusal to purchase the Property at its then current fair market value in accordance with the terms and conditions set forth in this Agreement. The consideration for the City's right of first refusal shall consist of one percent (1 %) of the remaining City loan balance. The balance of the City loan remaining after deducting this one percent (1 %) of the loan balance shall be credited toward the purchase price if the City chooses to exercise the purchase option. The provisions of this Section shall not impair the rights of a first mortgage lender secured by a recorded deed of trust. The purchase money lender shall have a higher priority than the City's loan. The City's security shall be prioritized as a second mortgage. This first priority applies to the purchase money lender's assignee or successor in interest, to: (i) Foreclose on the Property pursuant to the remedies permitted by law and written in a recorded contract or deed of trust; or (ii) Accept a deed of trust or assignment to the extent of the value of the unpaid first mortgage to the current market value in lieu of foreclosure in the event of default by a trustor; or (iii) Sell the Property to any person at a fair market value price subsequent to exercising its rights under the deed of trust. Any value in excess of the unpaid mortgage and costs of sale administration shall be used to satisfy the City loan. In no case may a first mortgage lender, exercising foreclosure Page 4 0 Affordable Housing Agreement 0 assignment in -lieu of foreclosure or sale, obtain value or rights to value greater than the value of the outstanding. indebtedness on the first mortgage at the time of the debt clearing action. 2.08 In addition, the following types of transfers shall remain subject to the requirements of the City's loan and right of first refusal: transfer by gift, devise, or inheritance to the Owners spouse; transfer to a surviving joint tenant; transfer to a spouse as part of divorce or dissolution proceedings; or acquisition in conjunction with a marriage. 2.09 For purposes of determining the amount of the City's loan and the purchase price of the Property for the City's right of first refusal, the fair market value of a Property shall be determined as follows: (i) The then current Owner of the Property and the City shall attempt to agree on the fair market value of the Property. If the parties agree upon the fair market value, during the Agreement Period, the fair market value of the Property for purposes of determining the amount of the City's loan or the purchase price payable for the purchase of the Property pursuant to the right of first refusal shall be the agreed upon fair market value. If the parties are unable to agree upon the fair market value, they shall jointly select an independent MAI appraiser ( "Qualified Appraiser") with at least five (5) years full time real estate appraisal experience for properties comparable to the Property in Santa Barbara County and \or San Luis Obispo County , to appraise and set the fair market value. The parties shall share equally the fees, costs and expenses of said Qualified Appraiser. (ii) If the parties fail to agree on the selection of a Qualified Appraiser within ten (10) days ( "Initial Appraiser Selection Period "), each party shall select their own Qualified Appraiser within ten (10) days following the Initial Appraiser Selection Period and the two Qualified Appraisers shall determine and attempt to agree upon the fair market value within fifteen (15) days following the Initial Appraiser Selection Period ( "Initial Appraisal Period "). Each party shall bear the expenses of their own Qualified Appraiser. In the event that either party fails to designate a Qualified Appraiser within the Initial Appraiser Selection Period, then the determination of the fair market value by the Qualified Appraiser selected by the other party shall be final and binding upon the parties. If the two Qualified Appraisers are able to agree as to the fair market value of the Property within the Initial Appraisal Period, then the fair market value of the Property for purposes of determining the purchase price payable for the Property pursuant to the City's right of first refusal shall be shall be the determined by the two Qualified Appraisers. (iii) If the two Qualified Appraisers are unable to agree on the fair market value of the Property within the Initial Appraisal Period, then said Qualified Appraisers shall, Page 5 0 Affordable Housing Agreement �J within five (5) days of the expiration of the Initial Appraisal Period, designate a third Qualified - Appraiser. If a third Qualified Appraiser is appointed, then the fees and costs of the third appraiser shall be borne equally by the then current owner of the Property and prospective buyer. The third Qualified Appraiser shall determine the fair market value of the Property within the ten (10) -day period following his or her appointment ( "Final Appraisal Period "). The fair market value of the Property for purposes of determining the purchase price payable for the purchase of the Property pursuant to the City's right of first refusal shall be as follows: If the highest appraised fair market value is more than one hundred five percent (105°/x) of the middle appraised fair market value, then the highest appraised fair market value shall be disregarded. If the lowest appraised fair market value is less than ninety -five percent (95 %) of the middle appraised fair market value, then the lowest appraised fair market value shall be disregarded. If there is then only one remaining appraised fair market value, that fair market value shall be the fair market value of the Property for purposes of determining the purchase price payable for the purchase of the Property pursuant to the City's right of first refusal. If there is then more than one remaining appraised fair market value, the remaining appraised fair market value shall be averaged, and the fair market value of the Property for purposes of determining the the purchase price payable for the purchase of the Property pursuant to the City's right of first refusal shall be the average of such appraised fair market values. 3.01. In the event the Owner has not completed the construction of the Houses-and received a final building inspection on all Houses within two (2) years from the Effective Date, the Ownership and control of the Properties shall revert to the City. Extensions of this period of time may be granted at the discretion of the City if the Owner has demonstrated just cause and a. "good faith" effort to develop the Properties. Nn 0 Page 6 Affordable Housing Agreement • 4.01. Unless otherwise provided, all notices herein required shall be in writing, and delivered in person or sent by United States first class mail, postage prepaid to the address of the respective parties as specified below or at other addresses that may be later specified by the parties hereto: If to the City: City of San Luis Obispo Community Development Director 990 Palm Street San Luis Obispo, CA 93401 -3249 If to the Owner: SLO Estates, Inc. 200 East Carrillo Street, Suite 200 Santa Barbara Californiac93101 Attention: Kenneth P. Slau.ght and With a copy to: SLO Estates, Inc. 1880 Santa Barbara Street, Suite F San Luis Obispo, California 93401 Attention: Patrick N. Smith Seed Mackall & Cole ,LLP 1332 Anacapa Street, Suite 200 Santa Barbara, California 93101 Attention: David R. Reese, Esq. 4.02. The Owner hereby specifically acknowledges and agrees to be bound. by the covenants respecting affordability on the Properties contained herein. 4.03 This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which shall constitute one and the same instrument. IN WITNESS WHEREOF, this Agreement has been duly executed by the undersigned as of the date set forth below. SLO ESTATES INC., a California co tion By: Patrick N. Smith, 4esident — _ A (enneth P. Sla Vice President CITY: 8 7/ O / Date (� a Date Jo n Man evi le, Community Development Director APPROVED AS TO FORM AND LEGAL EFFECT: 9 • STATE OF CALIFORNIA ss. COUNTY OF San Luis Obispo On August 27 , .2001 before me, the undersigned, a Notary Public in and for said County and State, personally' appeared Patrick N. Smith personally known to me (vT tu=me=;an=tti=-=baet-,-r;af to be the person( whose name(* is /apasubscribed to the within instrument and acknowledged to me that he/shm#Wexecuted the same in his/# Alt�authorized capacity(i45), and that by his4WT*tcsignature(4) on the instrument the person(T4, or the entity upon behalf of which the person(" acted, executed the instrument. WITNESS my hand and official seal. Not ry Public STATE OF CALIFORNIA ss. COUNTY OF SANTA BARBARA On , 2001 before me, the undersigned, a Notary Public in and for said County and State, personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is /are subscribed to the within instrument and acknowledged to me that he /she /they executed the same in his /her /their authorized 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. WITNESS my hand and official seal. Notary Public S VALLEY ROAD I EL PGRE COURT TONINI DRI Vf FOREMAN COURT O. wo Z-1 ° Cl WELSH COURT c� to C=b C Kb co iER DRIVE SPOON ER A.0 -0 Cy% ETO CIRCLE cc ",I O co co as N r'4 CM ON co OMf cm Ln N RANCH DRIVE DeVAUL to I. cn to to co O N M i u CL un =0 < ioamUd v 1181HX3 0. 0 EXHIBIT B DESCRIPTION OF REAL PROPERTY The properties located at Tract 2307 27D -1, 28D -2, 29P, 31D-2, 32D -1, 33P, 35P 102P, 120D -1, 131D-2, 132D -1, 138D -1, 140P, and 142D -1. Lots with a 1 or 2 designation following denote single (1) or two story (2) as further described below. 1. Eto Circle Lot # 27 Duplex APN 2. Eto Circle Lot # 28 Duplex APN 3. Eto Circle Lot # 29 Patio APN 4. Eto Circle Lot #31 Duplex APN 5. Eto Circce Lot #32 Duplex APN 6. Eto Circle Lot # 33 Patio APN 7. Eto Circle Lot #35 Patio APN 8. Spooner Drive Lot # 102 Patio APN 9. Foreman Court Lot # 120 Duplex APN 10. Foreman Court Lot # 131 Duplex APN 11. Foreman Court Lot #132 Duplex APN 12. Tonini Drive Lot #138 Duplex APN 13. Tonini Drive Lot #140 Patio APN 14. Tonini Drive Lot #142 Duplex APN END OF DOCUMENT EXHIBIT 'B' RECORDING REQUESTED BY: <SLO Estates, Inc. - rirrl WHEN RECORDED MAIL. TO: City Clerk City of San Luis Obispo 990 Palm Street San Luis Obispo, CA 93401 -3249 Q �— L= JULIE RODEWALD DG San Luis Obispo County— Clerk/Recorder 9/25/2001 Recorded at the request. of 8:00 AM First American Title Company D 0 C # : 2001072163 Titles: 1 Pages: 10 Fees 0.00 Taxes - 0.00 Others 0.00 PAID $0.00 AFFORDABILITY AGREEMENT /DEED OF TRUST COVENANTS FOR TRACT 2307 THIS AGREEMENT (this "Agreement ") is made and entered into as of this Iq day of l- P,4c t b-e-;-- , 2001, by and between the City of San Luis Obispo (the "City ") and SLO Estates, Inc., a California corporation ( "Owner"), collectively referred to as "the parties." RECITALS A. On December 15, 1998, the City Council adopted Resolution No. 8886, approving a 148 lot residential subdivision, located at the southern corner of the Madonna Road and Los Osos Valley Road intersection and more particularly described in Exhibit A attached hereto ( "the Project "); and B. Mitigation measure number 1.2 of that approval requires the applicant to provide affordable housing consistent with Policy 1.22.1 of the Housing Element; and C. The parties have agreed that the Owner shall construct and sell homes in conformance with the City's Affordable Housing Standards; and D. The City and Owner desire to assure that the affordable dwelling units identified in this Agreement remain affordable to moderate income households for a period of at. least thirty (30) years. NOW, THEREFORE, the parties acknowledge and agree as follows: 1.01. "Effective Date" shall mean the date of the recordation of this Agreement in the Recorder's Office of the County of San Luis Obispo. 1.02 "Eligible Households" mean the persons and families meeting the definition under the City's Housing Element and Affordable Housing Standards. b1.sqq Page 2 Affordable Housing Agreement • 1.03 "Houses" mean the duplex and patio single family residential structures to be constructed on the Properties. 1.04 "Moderate income households" mean persons and families whose income does not exceed one hundred twenty percent (120 %) of the County of San Luis Obispo area median income, adjusted for family size pursuant to the City of San Luis Obispo Affordable Housing Standards. 1.05 "Properties" mean those fourteen (14) specific real properties in the Project described in Exhibit B attached hereto and hereby incorporated by reference, which are intended to be sold to and occupied exclusively by Eligible Households during the Term pursuant to this Agreement. 1.06 "Property Term" means for each Property the thirty (30) year period commencing on the date of the recordation of the Grant Deed executed by the Owner or its successors and assigns conveying the Property to the first Eligible Household. 2.01. During the Property Term for each Property, the House to be constructed on the Property shall be used exclusively for Owner -occupied housing purposes and shall be sold or transferred only to Eligible Households. For the initial sale of each Property to an Eligible Household, the sales price shall be determined at time of building occupancy release, in accordance with City of San Luis Obispo affordable housing standards. For subsequent sales of the Property to Eligible Households, the sales prices shall be based on and consistent with then current City affordable housing standards. 2.02. The Grant Deeds for the transfers of interests in the Property by the Owner or its successors in interest and all future Grant Deeds for transfers of interests in the Properties by all subsequent owners of the Properties shall contain a restriction providing that during the Property Term for each Property there shall be no sale, lease, rental, or other transfer of the Property, except for the sale to an Eligible Household. Any sale, lease, rental, or other transfer of the Properties during their respective Property Terms in violation of this covenant shall be void. 2.03. The Owner agrees to retain the Housing Authority of the City of San Luis Obispo, or other qualified entity acceptable to the City, for screening of potential buyers of the Properties, to determine if they qualify as Eligible Households. 2.04. These affordability requirements shall be covenants running with the - land as defined in California Civil Code Section 1460, and shall apply to the Properties. Pursuant to Civil Code Section 1468, which governs such covenants, the provisions of this Agreement shall be binding upon all parties having any right, title, or interest in any of the Properties described herein, or any portion thereof and on their heirs, successors in interest and assigns for their respective Property Terms. Page 3 • Affordable Housing Agreement • 2.05. When a Property is first sold to a buyer qualifying as an Eligible Household the buyer and City shall enter into an Affordable Housing Agreement which shall be recorded as an encumbrance on the Property, and secured by a recorded deed of trust. Said Agreement. and deed of trust shall establish the monetary difference between the initial purchase price and the initial appraised value as a loan payable to the City. Said loan shall accrue interest, compounded annually, at an annual rate equal to four and one half (4.5) points added to the Eleventh District Cost of Funds as currently published by the Federal Home Loan Bank Board, amortized over the Property Term, and the monthly payments of principal and interest shall be waived by the City as long as said buyer or subsequent buyers shall have been previously approved by the City Housing Authority or other entity approved by the City as an Eligible Household, continue to own and reside in the Property subject to the City loan as such buyer's principal residence. 2.06. If a Property is sold, leased, or otherwise transferred to an entity, other than to an Eligible Household, in violation of this Agreement, the City's loan shall immediately become due and payable from the proceeds of the sale of the Property. "Proceeds of sale" shall mean the value of any and all consideration, however denominated, received or to be received by the seller from the sale of the Property after the payment of all outstanding indebtedness under the first deed of trust and. after all broker's, escrow, title and closing fees, costs and expenses in connection with the sale. 2.07. The City or the Housing Authority of the City of San Luis Obispo shall have the first right of refusal to purchase the Property at its then current fair market value in accordance with the terms and conditions set forth in this Agreement. The consideration for the City's right of first refusal shall consist of one percent (1 %) of the remaining City loan balance. The balance of the City loan remaining after deducting this one percent (1%) of the loan balance shall be credited toward the purchase price if the City chooses to exercise the purchase option. The provisions of this Section shall not impair the rights of a first mortgage lender secured by a recorded deed of trust. The purchase money lender shall have a higher priority than the City's loan. The City's security shall be prioritized as a second mortgage. This first priority applies to the purchase money lender's assignee or successor in interest, to: (i) Foreclose on the Property pursuant to the remedies permitted by law and written in a recorded contract or deed of trust; or (ii) Accept a deed of trust or assignment to the extent of the value of the unpaid first mortgage to the current market value in lieu of foreclosure in the event of default by a trustor; or (iii) Sell the Property to any person at a fair market value price subsequent to exercising its rights under the deed of trust. Any value in excess of the unpaid mortgage and costs of sale administration shall be used to satisfy the City loan. In no case may a first mortgage lender, exercising foreclosure Page 4 • Af'(ordablc Housing Agrccmcnt • assignment in -lieu of foreclosure or sale, obtain value or rights to value greater than the value of the outstanding- indebtedness on the first mortgage at the time of the debt clearing action. 2.08 In addition, the following types of transfers shall remain subject to the requirements of the City's loan and right of first refusal: transfer by gift, devise, or inheritance to the Owner's spouse; transfer to a surviving joint tenant; transfer to a spouse as part of divorce or dissolution proceedings; or acquisition in conjunction with a marriage. 2.09 For purposes of determining the amount of the City's loan and the purchase price of the Property for the City's right of first refusal, the fair market value of a Property shall be determined as follows: (i) The then current Owner of the Property and the City shall attempt to agree on the fair market value of the Property. If the parties agree upon the fair market value, during the Agreement Period, the fair market value of the Property for purposes of determining the amount of the City's loan or the purchase price payable for the purchase of the Property pursuant to the right of first refusal shall be the agreed upon fair market value. If the parties are unable to agree upon the fair market value, they shall jointly select an independent MAI appraiser ( "Qualified Appraiser") with at least five (5) years full time real estate appraisal experience for properties comparable to the Property in Santa Barbara County andlor San Luis Obispo County , to appraise and set the fair market value. The parties shall share equally the fees, costs and expenses of said Qualified Appraiser. (ii) If the parties fail to agree on the selection of a Qualified Appraiser within ten (10) days ( "Initial Appraiser Selection Period "), each party shall select their own Qualified Appraiser within ten (10) days following the Initial Appraiser Selection Period and the two Qualified Appraisers shall determine and attempt to agree upon the fair market value within fifteen (15) days following the Initial Appraiser Selection Period ( "Initial Appraisal Period "). Each party shall bear the expenses of their own Qualified Appraiser. In the event that either party fails to designate a Qualified Appraiser within the Initial Appraiser Selection Period, then the determination of the fair market value by the Qualified Appraiser selected by the other party shall be final and binding upon the parties. If the two Qualified Appraisers are able to agree as to the fair market value of the Property within the Initial Appraisal Period, then the fair market value of the Property for purposes of determining the purchase price payable for the Property pursuant to the City's right of first refusal shall be shall be the determined by the two Qualified Appraisers. (iii) If the two Qualified Appraisers are unable to agree on the fair market value of the Property within the Initial Appraisal Period, then said Qualified Appraisers shall, Page 5 Affordable Housing Agreement • within five (5) days of the expiration of the Initial Appraisal Period, designate a third Qualified Appraiser. If a third Qualified Appraiser is appointed, then the fees and costs of the third appraiser shall be borne equally by the then current owner of the Property and prospective buyer. The third Qualified Appraiser shall determine the fair market value of the Property within the ten (10) -day period following his or her appointment ( "Final Appraisal Period "). The fair market value of the Property for purposes of determining the purchase price payable for the purchase of the Property pursuant to the City's right of first refusal shall be as follows: If the highest appraised fair market value is more than one hundred five percent (105 %) of the middle appraised fair market value, then the highest appraised fair market value shall be disregarded. If the lowest appraised fair market value is less than ninety -five percent (95 %) of the middle appraised fair market value, then the lowest appraised fair market value shall be disregarded. If there is then only one remaining appraised fair market value, that fair market value shall be the fair market value of the Property for purposes of determining the purchase price payable for the purchase of the Property pursuant to the City's right of first refusal. If there is then more than one remaining appraised fair market value, the remaining appraised fair market value shall be averaged, and the fair market value of the Property for purposes of determining the the purchase price payable for the purchase of the Property pursuant to the City's right of first refusal shall be the average of such appraised fair market values. 3.01. In the event the Owner has not completed the construction of the Houses and received a final building inspection on all Houses within two (2) years from the Effective Date, the Ownership and control of the Properties shall revert to the City. Extensions of this period of time may be granted at the discretion of the City if the Owner has demonstrated just cause and a. "good faith" effort to develop the Properties. No Page 6 Affordable Housing Agreement 4.01. Unless otherwise provided, all notices herein required shall be in writing, and delivered in person or sent by United States first class mail, postage prepaid to the address of the respective parties as specified below or at other addresses that may be later specified by the parties hereto: If to the City: City of San Luis Obispo Community Development Director 990 Palm Street San Luis Obispo, CA 93401 -3249 If to the Owner: SLO Estates, Inc. 200 East Carrillo Street, Suite 200 Santa Barbara Californiac93101 Attention: Kenneth P. Slaught and With a copy to: SLO Estates, Inc. 1880 Santa Barbara Street, Suite F San Luis Obispo, California 93401 Attention: Patrick N. Smith Seed Mackall & Cole ,LLP 1332 Anacapa Street, Suite 200 Santa Barbara, California 93101 Attention: David R. Reese, Esq. 4.02. The Owner hereby specifically acknowledges and agrees to be bound by the covenants respecting affordability on the Properties contained herein. 4.03 This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which shall constitute one and the same instrument. 0 IN WITNESS WHEREOF, this Agreement has been duly executed by the undersigned as of the date set forth below. SLO ESTATES INC., a California co tion Date Patrick N. Smith, esider By. Date enneth P. Slaugh Vice President CITY: '99 Jo n Man eville, Community Development Director APPROVED AS TO FORM AND LEGAL EFFECT: N myr/m.�., ow self City Attorney 9 STATE OF CALIFORNIA ) ss. COUNTY OF San Luis Obispo ) On August 27 , 2001 before me, the undersigned, a Notary Public in and for said County and State, personally appeared Patrick N. Smith personally known to me to be the person( whose name(* is /amxsubscribed to the within instrument and acknowledged to me that. he/ai'az 1*Wexecuted the same in his/i4wg#gWauthorized capacity( ), and that by hisAMPIWKsignature(4) on the instrument the person( ", or the entity upon behalf of which the person(# acted, executed the instrument. WITNESS my hand and official seal. Not ry Public STATE OF CALIFORNIA ss. COUNTY OF SANTA BARBARA Vii 1: On , 2001 before me, the undersigned, a Notary Public in and for said County and State, personally-appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is /are subscribed to the within instrument and acknowledged to me that he /she /they executed the same in his /her /their authorized 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. WITNESS my hand and official seal. Notary Public LOS OSOI VALLEY ROAD — ----- EL TIGRE COURT A TONINI DRIVE Ut w Ln ni FOREMAN COURT Ln cy, 4.0 Ln C�l c,= WELSH COURT L2 Lu cS U-) 12 --R DRIVE Zc; SpOONE to co co M F1 cn 01 cy, T-1 co 0% t^ co CIA 00 ETO CIRCLE. cn obi cn N C', "J N cm Ln -4- N cn DRIVE Ln -0- 1" C-1 DeVAUL RANCH UJ -0 C= Ln cc A co r-4 Ln Loara8d V 11131HX3 • Ll EXHIBIT B DESCRIPTION.OF REAL PROPERTY The properties located at Tract 2307 27D -1, 28D -2, 29P, 31D-2, 32D -1, 33P, 35P 102P, 120D -1, 131 D -2, 132D -1, 138D -1, 140P, and 142D -1. Lots with a 1 or 2 designation following denote single (1) or two story (2) as further described below. 1. Eto Circle Lot # 27 Duplex APN 2. Eto Circle Lot # 28 Duplex APN 3. Eto Circle Lot # 29 Patio APN 4. Eto Circle Lot #31 Duplex APN 5. Eto Cirlce Lot #32 Duplex APN 6. Eto Circle Lot # 33 Patio APN 7. Eto Circle Lot #35 Patio APN 8. Spooner Drive Lot # 102 Patio APN 9. Foreman Court Lot # 120 Duplex APN 10. Foreman Court Lot # 131 Duplex APN 11. Foreman Court Lot #132 Duplex APN 12. Tonini Drive Lot #138 Duplex APN 13. Tonini Drive Lot #140 Patio APN 14. Tonini Drive Lot #142 Duplex APN END OF DOCUMENT • EXHIBIT 'B' 0 RECORDING REQUESTED BY: <SLO Estates, Inc. WHEN RECORDED MAIL TO: City Clerk City of San Luis Obispo 990 Palm Street San Luis Obispo, CA 93401 -3249 4GOA4"— LS JULIE RODEWALD San Luis Obispo County— Clerk/Recorder Recorded at the request of First American Title Company C DG 9/25/2001 8:00 AM D O C # : 2001072163 Titles: 1 Pages: 10 Fees 0.00 Taxes 0.00 Others 0.00 PAID $0.00 AFFORDABILITY AGREEMENT /DEED OF TRUST COVENANTS FOR TRACT 2307 THIS AGREEMENT (this "Agreement ") is made and entered into as of this Iq day of 6eP4cmb---y- , 2001, by and between the City of San Luis Obispo (the "City") and SLO Estates, Inc., a California corporation ( "Owner'), collectively referred to as "the parties." TR I C: 9. 9 � RECITALS A. On December 15, 1998, the City Council adopted Resolution No. 8886, approving a 148 lot residential subdivision, located at the southern corner of the Madonna Road and Los Osos Valley Road intersection and more particularly described in Fxhihit A attached hereto ( "the Project "); and B. Mitigation measure number 12 of that approval requires the applicant to provide affordable housing consistent with Policy 1.22.1 of the Housing Element; and C. The parties have agreed that the Owner shall construct and sell homes in conformance with the City's Affordable Housing Standards; and D. The City and Owner desire to assure. that the affordable dwelling units identified in this Agreement remain affordable to moderate income households for a period of at least thirty (30) years. NOW, THEREFORE, the parties acknowledge and agree as follows: 1.01. "Effective Date" shall mean the date of the recordation of this Agreement in the Recorder's Office of the County of San Luis Obispo. 1.02 "Eligible Households" mean the persons and families meeting the definition under the City's Housing Element and Affordable Housing Standards.