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HomeMy WebLinkAboutD-1518 (Villa Rosa Llc Affordable Housing Agreement, City Holds Second) 811 Lawrence Drive Recorded 02/10/2000/F.ECORDING REQUESTED BY: SST AMMCA N MU tN COMM 1 - AND 2 WHEN RECORDED RETURN TO: 3 4 City of San Luis Obispo 5 990 Palm Street 6 San Luis Obispo, Ca. 93401 -.3249 7 Attn: Community Development Director 8 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Doc No: 2000 - 007294 Official Records San Luis Obispo Co. Julie L. Rodewald Recorder Feb 10, 2000 Recorded for the Benefit of the Time: 14:46 City of San Luis Obispo at No Fee Under i Section 6103 of the Government Code L i 295077 Sin k-,,- The undersigned declare that there is no documentary transfer tax on this matter. Rpt No: 00009634 ,NF -4 0.00, ,TOTAL 0.00 PURCHASE MONEY DEED OF TRUST, DEED OF TRUST COVENANTS, ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND FIXTURE FILING THIS PURCHASE MONEY DEED OF TRUST, DEED OF TRUST COVENANTS, ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND FIXTURE FILING (this "Deed of Trust ") is made as of this 1st day of February, 20 0b Douglas Rick Williams , the owner of the real property described hereinbelow, whose address is: 811 Lawrence Drive, San Luis Obispo, CA 93401 26 ( "Trustor" to) First American Title Insurance 27 Company 28 ( "Trustee ") in favor of the CITY 29 OF SAN LUIS OBISPO, a municipal corporation, whose address is 990 Palm Street, San Luis 30 Obispo, California 93401 -3249 ('Beneficiary"). 31 32 WHEREAS, on February 17, 1999, Beneficiary and Villa Rosa LLC, A California corporation, 33 entered into an Affordable Housing Agreement to implement Ordinance No. 1318 (1997 Series), 34 amending the Affordable Housing Requirement for the Villa Rosa Planned Residential 35 Development; and 36 37 WHEREAS, to implement said Affordable Housing Agreements Beneficiary and Trustor entered 38 into that certain Promissory Note ( "Note ") dated February 1, -2000 pursuant to which 39 Trustor agreed to certain restrictions on the sale or transfer of that certain real property located in 40 the County of San Luis Obispo, State of California, which is further described in Exhibit A (the 41 "Real Property "); and 42 43 WHEREAS, Beneficiary and Trustor desire to ensure that the Real Property remain affordable to 44 moderate - income persons for a period of not less than 30 years, pursuant to the Housing 45 Agreement. 46 47 NOW, THEREFORE, THIS DEED OF TRUST WITNESSETH: b /S /r 0 0 Villa Rosa Second Deed of Trust Page 2 2 Trustor, in consideration of the indebtedness referred to below and the trust herein created, 3 irrevocably grants, conveys, transfers and assigns to Trustee, and its successors and assigns, in 4 trust, with power of sale and right of entry and possession, all of Trustor's estate, right, title and 5 interest in, to and under the Real Property; 7 TOGETHER WITH all structures and improvements now existing or hereafter erected on the 8 Real Property, all easements, rights and appurtenances thereto or used in connection therewith, 9 all rents, royalties, issues, profits, revenues, income and other benefits thereof or arising from the 10 use or enjoyment of all or any portion thereof (subject, however, to the right, power and authority 11 given herein to Trustor to collect and apply such rents, royalties, issues, profits, revenues, income 12 and other benefits prior to an Event of Default hereunder), all interests in and rights, royalties and 13 profits in connection with all minerals, oil and gas and other hydrocarbon substances thereon or 14 therein, development rights or credits, air rights, water, water rights (whether riparian, 15 appropriative or otherwise and whether or not appurtenant) and water stock, all intangible 16 property and rights relating to the Real Property or the operation thereof or used in connection 17 therewith, including, without limitation, trade names and trademarks and all furniture and 18 fixtures, now or hereafter located in, or on, or attached or affixed to, or used or intended to be 19 used in connection with, the Real Property, including, but without limitation, all heating, 20 lighting, laundry, incinerating, gas, electric and power equipment, pipes, plumbing, fire 21 prevention and fire extinguishing, refrigerating, ventilating and communication apparatus, air 22 cooling and air conditioning apparatus, shades, awnings, blinds, curtains, drapes, attached floor 23 coverings, including rugs and carpeting and other installed appliances, attached cabinets, trees, 24 plants and other items of landscaping, shall, to the fullest extent permitted by law and for the 25 purposes of this Deed of Trust, be deemed to be part and parcel of, and appropriated to the use 26 of, the Real Property and, whether or not affixed or annexed thereto, be deemed conclusively to 27 be real property and conveyed by this Deed of Trust, and Trustor agrees to execute and deliver, 28 from time to time, such further instruments and documents as may be required by Beneficiary to 29 confirm the lien of this Deed of Trust on any of the foregoing; 30 31 TOGETHER WITH all of the estate, interest, right, title, other claim or demand which Trustor 32 now has or may hereafter acquire in any and all awards made for the taking by eminent domain, 33 or by any proceeding or purchase in lieu thereof, of the whole or any part of the Property (as 34 hereinafter defined), including, without limitation, any awards resulting from a change of grade 35 of streets and awards for severance damages; 36 37 TOGETHER WITH all of the estate, interest, right, title and other claim or demand which 38 Trustor now has or may hereafter acquire with respect to the unearned premiums accrued, 39 accruing or to accrue and the proceeds of insurance in effect with respect to all or any part of the 40 foregoing. All of the foregoing property referred to in this Deed of Trust, together with the Real 41 Property, is herein referred to as the "Property." 42 43 ARTICLE 1. PURPOSE AND CONSIDERATION. This trust deed is established for the 44 purpose of securing, in such order of priority as Beneficiary may elect: j • • Villa Rosa Second Deed of Tiust Page 3 1 - - 2 (a) The repayment of the indebtedness evidenced by Trustor's Promissory Note (the 3 "Note ") of even date herewith payable to the order of Beneficiary, in the principal sum of 4 Dollars ($ 6,900.00 ) ( "Principal "), and any and all late charges, costs or fees 5 required thereunder and all extensions, renewals, modifications, amendments and 6 replacements thereof. The amount of the Note is the monetary difference between said 7 property's initial sales price, as allowed by the City's Affordable Housing Standards and 8 its initial market value, as determined by City's Community Development Director based 9 on sales information for comparable market rate units provided by Trustee. 10 11 (b) The payment of all other sums which may be advanced by or otherwise be due to 12 Trustee or Beneficiary under any provision of this Deed of Trust with interest (if any) 13 thereon at the rate provided herein or therein. 14 15 (c) Performance of all covenants of Trustor made in this Deed of Trust. 16 17 (d) Performance of all obligations and conditions of the Housing Agreement. 18 19 ARTICLE 2. DEED COVENANTS. To protect the security of this Deed of Trust, Trustor and 20 Trustee hereby covenant and agree as follows: 21 22 SECTION 2.01. Restrictions on Use and Occupancy. The Real Property shall be used solely 23 for owner- occupied housing and occupied solely by low- or moderate income households, as 24 defined in the Housing Agreement. 25 26 SECTION 2.02. Restrictions on Sale. The Real Property shall be sold or otherwise transferred 27 only to eligible households, as defined herein, or to the City, its Housing Authority, or to a non- 28 profit housing agency designated by City. Sales prices shall be based on and consistent with the 29 Affordable Housing Standards published by the City's Community Development Department. 30 31 SECTION 2.03. Term of Use, Occupancy and Sale Restrictions. Trustor agrees that the 32 above restrictions to the use, occupancy and sale of the Real Property shall remain in effect for a 33 period of not less than thirty (30) years from the date of this executed deed of trust. Further, 34 Trustor agrees that all future grant deeds for or transfers of interest in the properties shall contain 35 a restriction providing that for the period of time specified in this deed of trust, there shall be no 36 sale, lease, rental, or other transfer of the properties except for the sale to and occupation by 37 eligible low or moderate income households. Any sale, lease, rental, or.other transfer of the 38 property in violation of this covenant shall be void, as provided below. 39 40 SECTION 2.04. Determination of Eligibility. Trustor and Trustee agree to retain the Housing 41 Authority of the City of San Luis Obispo, or other qualified entity acceptable to the City, to 42 determine whether prospective buyers qualify as eligible households as defined in the Affordable 43 Housing Standards. 44 3 Villa Rosa Second Deed of Trust Page 4 1 SECTION 2.05. Covenants Binding. These affordability requirements shall be covenants 2 running with the land as defined in California Civil Code Section 1460, and shall apply to the 3 Real Property as further described on Exhibit A. Pursuant to Civil Code Section 1468, which 4 governs such covenants, the provisions of this Agreement shall be binding upon all parties 5 having any right, title, or interest in any of the properties described herein, or any portion thereof 6 and on their heirs, successors in interest and assigns for a period of 30 years from the date of 7 occupancy of the property. The parties agree that all future deeds or transfers of interest 8 regarding the properties shall show the restrictions of this Agreement for as long as the 9 Agreement is in effect. 10 11 SECTION 2.06. First Right of Refusal. Upon resale, Trustor and Trustee agree that the City or 12 the Housing Authority of the City of San Luis Obispo shall have the first right of refusal to 13 purchase the property or properties at the then current appraised value, as further described in the 14 Note. 15 16 SECTION 2.07. Performance of Obligations Secured. Trustor shall promptly pay when due 17 the indebtedness evidenced by the Note and any late charges, costs and/or fees provided for in 18 the Note and shall further perform fully and in a timely manner all other obligations of Trustor 19 contained herein or in the Note. 20 21 ARTICLE 3 — INSURANCE REQUIREMENTS 22 23 SECTION 3.01. Trustor shall keep the Property and all improvements thereon insured against 24 loss or damage by fire with extended all -risk coverage clauses, including vandalism and 25 malicious mischief clauses, in an amount not less than one hundred percent (100 %) of the full 26 replacement cost of such improvements with a company or companies and in such form and with 27 such endorsements as may be approved or required by Beneficiary. 28 29 SECTION 3.02. Trustor shall also maintain in full force and effect a policy of homeowners' 30 general liability insurance insuring Trustor against liability for bodily injury, property damage 31 and personal injury arising out of the operation, use or occupancy of the Property. The initial 32 amount of such insurance shall be One Hundred Thousand Dollars ($100,000.00) per occurrence 33 and not in the aggregate and shall be subject to periodic increase based upon increased liability 34 awards or the reasonable recommendation of Trustor's professional insurance advisor. Trustor 35 shall name Beneficiary as an additional insured under such policy. Such insurance shall be 36 primary with respect to any insurance maintained by Beneficiary and shall not call on 37 Beneficiary's insurance for contributions. 38 39 SECTION 3.03. Trustor shall pay all premiums for the insurance policies required to be 40 maintained under this Deed of Trust within fifteen (15) days after Trustor's receipt of a copy of 41 the premium statement or other evidence of the amount due. At least thirty (30) days prior to the 42 expiration of such policy, Trustor shall deliver to Beneficiary a renewal of such policy. 43 4 0 0 Villa Rosa Second Deed of Trust Page 5 1 SECTION 3.04. Any insurance which Trustor is required to maintain under this Deed of Trust 2 shall include a provision requiring that the insurance carrier give Beneficiary not less than thirty 3 (30) days written notice prior to any cancellation or modification of such coverage. If Trustor (i) 4 fails to deliver any policy or renewal to Beneficiary required under this Deed of Trust within the 5 prescribed time period or (ii) if any such policy is canceled or modified to reduce the amount or 6 type of coverage without Beneficiary's consent and no substituted comparable coverage is 7 obtained by Trustor prior to such cancellation or modification, Beneficiary may obtain such 8 insurance. In such case, Trustor shall reimburse Beneficiary for the cost of such insurance within 9 fifteen (15) days after receipt of a statement that indicates the cost of such insurance and upon 10 proof that Beneficiary has paid said statement. 11 12 SECTION 3.05. Trustor shall maintain all insurance required under this Deed of Trust with 13 companies holding a "general policy rating" of A -8 or better, as set forth in the most current issue 14 of "Best Key Rating Guide." Trustor acknowledges that the insurance described in this Section is 15 for the primary benefit of Beneficiary. Beneficiary makes no representation as to the adequacy of 16 such insurance to protect Trustor's or Beneficiary's interests. Therefore, Trustor shall obtain any 17 additional property or liability insurance that Trustor deems necessary to protect Beneficiary and 18 Trustor, in the exercise of reasonable judgment. 19 20 SECTION 3.06. Notwithstanding anything to the contrary contained herein, Trustor's obligation 21 to carry the insurance provided for herein may be brought within the coverage of a so- called 22 blanket policy or policies of insurance carried and maintained by Trustor; provided, however, 23 that Beneficiary shall be named as an additional insured thereunder and that the coverage 24 afforded Beneficiary will not be reduced or diminished by reason of the use of such blanket 25 policy of insurance and provided further that the requirements set forth herein are otherwise 26 satisfied. 27 28 SECTION 3.07. All of the above - mentioned insurance policies or certificates of insurance must 29 be satisfactory to Beneficiary. Beneficiary shall not by the fact of approving, disapproving, 3o accepting, preventing, obtaining or failing to obtain any insurance, incur any liability for or with 31 respect to the amount of insurance carried, the form or legal sufficiency of insurance contracts, 32 insolvency of insurance companies or payment or defense of lawsuits and Trustor hereby 33 expressly assumes full responsibility therefor and all liability, if any, with respect thereto. 34 35 SECTION 3.08. Condemnation and Insurance Proceeds. 36 37 SUBSECTION 3.08(a). Any award of damages in connection with any takiiag or condemnation, 38 or for injury to the Property by reason of public use, or for damages for private trespass or entry 39 onto the Property is hereby assigned and shall be paid to Beneficiary as further security for all 40 obligations secured by this Deed of Trust. Upon receipt of such proceeds, Beneficiary may hold 41 the proceeds as further security or apply or release them in the same manner and with the same 42 effect as provided in this Deed of Trust for the disposition of proceeds of fire or other insurance. 43 Villa Rosa Second Deed of Trust Page 6 1 SUBSECTION 3.08(b). Any insurance proceeds or awards in connection with any casualty or 2 damage or injury to the Property covered by insurance ( "Insurance Proceeds ") are hereby 3 assigned to Beneficiary to be held and applied by Beneficiary in the manner hereinafter provided. 4 Beneficiary may, at its option, and at its own expense, appear in and prosecute in its own name 5 any action or proceeding to enforce any cause of action for such Insurance Proceeds. All 6 Insurance Proceeds shall be applied by Beneficiary upon any indebtedness secured by this Deed 7 of Trust and in any order determined by Beneficiary or, at the option of Beneficiary, the entire 8 amount so collected or any part of that amount may be released to Trustor. This application or 9 release shall not cure or waive any default or notice of default under this Deed of Trust or 10 invalidate any act done pursuant to such notice. 11 12 SUBSECTION 3.08(c). Trustor, immediately upon obtaining knowledge of the institution of any 13 proceedings relating to condemnation or other taking of or damage or injury to the Property or 14 any portion thereof, or knowledge of any casualty damage to the Property or damage in any other 15 manner, shall immediately notify Beneficiary in writing. Beneficiary may participate, at its own 16 expense, in any such proceedings and may join Trustor in adjusting any loss covered by 17 insurance. 18 19 ARTICLE 4. TAXES, LIENS AND OTHER ITEMS. Trustor shall pay, when due, all taxes, 20 bonds, assessments, fees, liens (including prior trust deed liens), charges, fines, impositions and 21 any and all other items which are attributable to or affect the Property and which may attain a 22 priority over this Deed of Trust or the indebtedness or evidence of indebtedness secured hereby, 23 by making payment prior to delinquency directly to the payee thereof. Trustor may initiate 24 proceedings to contest any such taxes, bonds, assessments, fees, liens, charges, fines, impositions 25 or other items so long as Trustor takes steps to ensure that Beneficiary's security is not threatened 26 in any manner. Trustor shall pay all costs of the proceedings, including any costs or fees incurred 27 by Beneficiary. Upon the final determination of any proceeding or contest, Trustor shall 28 immediately pay the amounts due, together with all costs, charges, interest and penalties 29 incidental to the proceedings. 30 31 ARTICLE 5. RENTS AND PROFITS. Trustor acknowledges and agrees that the Property 32 shall at all times be occupied by the Trustor as the Trustor's primary residence and shall not be 33 leased or rented during the term of the Note and this Deed of Trust. Notwithstanding the 34 foregoing, any rents, royalties, issues, profits, revenue, income and other benefits of the Property 35 arising from the use and enjoyment of all or any portion thereof or from any lease or agreement 36 pertaining thereto (the "Rents and Profits "), whether now due, past due, or to become due, and 37 including all prepaid rents and security deposits, are hereby absolutely, presently and 38 unconditionally assigned, transferred, conveyed and set over to Beneficiary to be applied by 39 Beneficiary in the payment of the principal and all other sums payable on the Note and of all 40 other sums payable under this Deed of Trust. It is understood and agreed that neither the 41 foregoing assignment of Rents and Profits to Beneficiary nor the exercise by Beneficiary of any 42 of its rights or remedies under Article 5 hereof shall be deemed to defeat the owner- occupied 43 restriction set forth in the Agreement or to make Beneficiary a mortgagee -in- possession or 44 otherwise responsible or liable in any manner with respect to the Property or the use, occupancy, 0 9 Villa Rosa Second Deed of Trust Page 7 1 enjoyment or operation of all or any portion thereof, unless and until Beneficiary, in person or by - 2 agent, assumes actual possession thereof. Further, the appointment of a receiver for the Property 3 by any court at the request of Beneficiary or by agreement with Trustor, or the entering into 4 possession of the Property or any part thereof by such receiver, shall not be deemed to make 5 Beneficiary a mortgagee -in- possession or otherwise responsible or liable in any manner with 6 respect to the Property or the use, occupancy, enjoyment or operation of all or any portion 7 thereof. 8 9 ARTICLE 6. PRESERVATION AND MAINTENANCE OF PROPERTY. Trustor shall 10 keep the Property and every part thereof in good condition and repair and shall not permit or 11 commit any waste, impairment or deterioration of the Property nor commit, suffer or permit any 12 act upon or use of the Property in violation of law or applicable order of any governmental 13 authority, whether now existing or hereafter enacted and whether foreseen or unforeseen, 14 including, without limitation, violation of any zoning, building or environmental protection 15 statutes, ordinances, regulations, orders and restrictions or in violation of any covenants, 16 conditions or restrictions affecting the Property or bring or keep any article upon any of the 17 Property or cause or permit any condition to exist thereon which would be prohibited by or could 18 invalidate any insurance coverage maintained or required hereunder to be maintained by Trustor 19 on or with respect to any part of the Property and further shall do all other acts which from the 20 character or use of the Property may be reasonably necessary to protect the security hereof, the 21 specific enumerations herein not excluding the general. Trustor shall complete and restore and 22 repair promptly and in a good and workmanlike manner any building, structure or improvement 23 thereon which may be damaged or destroyed and pay, when due, all claims for labor performed 24 and materials furnished therefor, whether or not insurance or other proceeds are available to 25 cover, in whole or in part, the costs of any such restoration or repair. Trustor shall notify 26 Beneficiary immediately in writing of any damage to the Property in excess of Ten Thousand 27 Dollars ($10,000.00). 28 29 ARTICLE 7. PROTECTION OF SECURITY: COSTS AND EXPENSES. Trustor shall 30 appear in and defend any action or proceeding purporting to affect the security hereof or the 31 rights or powers of Beneficiary or Trustee and shall pay all reasonable costs and expenses, 32 including, without limitation, costs of evidence of title and reasonable attorney's fees, in any such 33 action or proceeding in which Beneficiary or Trustee may appear and in any suit brought by 34 Beneficiary to foreclose this Deed of Trust or to enforce or establish any other rights or remedies 35 of Beneficiary hereunder. If Trustor fails to perform any of the covenants or agreements in this 36 Deed of Trust or if any action or proceeding is commenced which affects Beneficiary's interest in 37 the Property or any part thereof, including, but not limited to, eminent domain, code enforcement 38 or proceedings of any nature whatsoever under any federal or state law, whether now existing or 39 hereafter enacted or amended, relating to bankruptcy, insolvency, arrangement, reorganization or 40 other form of debtor relief, or to a decedent, then Beneficiary or Trustee may, but without 41 obligation to do so and upon ten (10) days' prior written notice to and demand upon Trustor 42 (unless a shorter notice period is necessary to protect Beneficiary's interest in the security hereof, 43 in which case only reasonable notice and demand under the circumstances shall be required) and 44 without releasing Trustor from any obligation hereunder, make such appearances, disburse such Villa, Rosa Second Deed of Trust Page 8 1 sums and take such action as Beneficiary or Trustee deems necessary or appropriate to protect 2 Beneficiary's interest, including, but not limited to, disbursement of reasonable attorney's fees, 3 entry upon the Property to make repairs or otherwise protect the security hereof, and payment, 4 purchase, contest or compromise of any encumbrance, charge or lien which in the judgment of 5 either Beneficiary or Trustee appear to be prior or superior hereto. Trustor further agrees to pay 6 all reasonable expenses of Beneficiary (including fees and disbursements of counsel) reasonably 7 related to the protection of the rights of Beneficiary hereunder, and enforcement or collection of 8 payment of the Note, whether by judicial or non judicial proceedings, or in connection with any 9 bankruptcy, insolvency, arrangement, reorganization or other debtor relief proceeding of Trustor, 10 or otherwise. Beneficiary shall give Trustor ten (10) days' prior written notice before disbursing 11 any amounts pursuant to this Article. Any amounts disbursed by Beneficiary or Trustee pursuant 12 to this Section shall be additional indebtedness of Trustor secured by this Deed of Trust as of the 13 date of disbursement. All such amounts shall be payable by Trustor immediately without 14 demand. Nothing contained herein shall be construed to require Beneficiary or Trustee to incur 15 any expense, make any appearance or take any other action. 16 17 ARTICLE 8. ENFORCEMENT. 18 19 Section 8.01. Acknowledgement of Enforceability. Trustor represents, warrants, covenants 20 and agrees that it is the lawful owner of the Real Property and that it has good right and lawful 21 authority to encumber the same as provided herein; that the Real Property is free from any and 22 all liens and encumbrances excepting only such as have been approved by Beneficiary and that 23 Trustor warrants and will defend the title to the Property against all claims and demands 24 whatsoever not specifically excepted herein (and except for claims and demands arising from 25 acts or omissions of Beneficiary or any predecessor -in- interest to Beneficiary not previously 26 disclosed to Trustor), and Trustor will execute, acknowledge and deliver all and every such 27 further assurances unto Beneficiary of the title to the Property hereby conveyed and intended so 28 to be or that Trustor may be or shall become hereinafter bound so to do. Trustor covenants and 29 warrants that the Note and this Deed of Trust are valid and enforceable obligations of Trustor in 30 accordance with the terms thereof and hereof; and that this Deed of Trust does not, nor does the 31 Note, nor does the performance or observance by Trustor of any of the matters or things in the 32 Note or this Deed of Trust, contravene any covenant in any indenture or agreement affecting 33 Trustor. 34 35 Section 8.02. Due on Sale and Other Enforcement Provisions. Trustor's agreement to ensure 36 the continued owner occupancy of the Real Property is a substantial material consideration to 37 Beneficiary and Beneficiary's agreement to accept the Note and to accept this Deed of Trust. In 38 accordance with California Civil Code Section 711.5 and in order to induce Beneficiary to accept 39 this Deed of Trust and the Note, Trustor agrees that Trustor shall not Transfer all or any part of 40 the Property without the prior written consent of Beneficiary. Except for a Transfer to a Eligible 41 Household (as defined in the City of San Luis Obispo's Affordable Housing Standards), 42 Beneficiary may grant or deny such consent in its sole and absolute discretion and as a condition 43 to such consent may require any transferee to assume all obligations hereunder and to agree to be 44 bound by all provisions contained herein. In the event of any proposed Transfer, Trustor shall , Villa Rosa Second Deed of Trust Page 9 1 provide Beneficiary with all financial and other information pertaining to the intended transferee 2 reasonably requested by Beneficiary. In the event of any Transfer without the prior written 3 consent of Beneficiary, Beneficiary shall have the absolute right, at its option, without demand or 4 notice, to declare all outstanding Principal and all other sums due hereunder and under the Note 5 to be immediately due and payable. Further, Beneficiary may bring an action at law or in equity 6 to require Trustor and the proposed transferee to terminate and/or rescind any sales contract or 7 purchase and sale transaction between them and/or to declare the transfer void, notwithstanding 8 that the transfer may have closed and become final as between Trustor and the transferee. 9 Further, Beneficiary may pursue any other remedy available under this Deed of Trust or the Note 1 o or at law or in equity or under any other agreement, instrument or document entered into by 11 Trustor and Beneficiary. Beneficiary's consent to one Transfer shall not be deemed to be a 12 waiver of the right to require consent to a future or successive Transfer. As used herein, 13 "Transfer" includes any sale, agreement to sell, assignment, exchange or other conveyance of the 14 Property or any portion thereof or any interest therein, whether voluntary or involuntary, by 15 operation of law or otherwise, except that a Transfer by gift, devise or inheritance to a spouse or 16 to a spouse as a part of a dissolution proceeding shall not be considered a Transfer for purposes 17 of this Section. 18 19 ARTICLE 9. EVENTS OF DEFAULT. Each of the following shall constitute an event of 20 default ( "Event of Default ") hereunder (including, if Trustor and Trustee consists of more than 21 one person or entity, the occurrence of any of such events with respect to any one or more of 22 such persons or entities): 23 24 SECTION 9.01. Breach of Covenants. Default by Trustor in the performance of any of the 25 covenants or agreements of Trustor contained'herein, in the Note, in the Housing Agreement or 26 any other note or instrument, trust deed or other obligation of Trustor relating to the Property 27 secured by any part of or all of the Property, whether junior or senior to this Deed of Trust. 28 29 SECTION 9.02. Appointment of Trustee. The appointment pursuant to an order of a court of 30 competent jurisdiction, of a trustee, receiver or liquidator of the Property or any part thereof, or 31 of Trustor, or any termination or voluntary suspension of the transaction of business of Trustor, 32 or any attachment, execution or other judicial seizure of all or any substantial portion of Trustor's 33 assets; provided, however, that if such attachment, execution or seizure is involuntary, Trustor 34 shall not be deemed in default unless the same is not discharged within sixty (60) days. 35 36 SECTION 9.03. Bankruptcy Filing. The filing by or against Trustor of a petition in bankruptcy 37 or for an arrangement or for reorganization or for other form of debtor relief pursuant to the 38 federal Bankruptcy Act, as the same may be amended or replaced from time to time, or any other 39 law, federal or state, whether now existing or hereafter amended or enacted relating to insolvency 40 or debtor relief (except that in the case of a filing against Trustor, an Event of Default shall not 41 exist unless Trustor fails to have the proceeding discharged within sixty (60) days after such 42 filing), or the adjudication of Trustor as a bankrupt or an insolvent by a decree of a court of 43 competent jurisdiction, or the making of an assignment for the benefit of creditors, or the 44 admission by Trustor in writing of its inability to pay its debts generally as they become due, or • • Villa Rosa Second Deed of Trust Page 10 1 the giving of consent by Trustor to the appointment of a receiver or receivers of all or 2 substantially all of its property. 4 SECTION 9.04. Misrepresentations. Any representation or disclosure made to Beneficiary by 5 Trustor as an inducement to the making of the loan evidenced by the Note that proves to be false 6 or misleading in any material respect as of the time the same was made, whether or not any such 7 representation or disclosure appears as part of this Deed of Trust. 9 SECTION 9.05. Other Events. Any other event which, under this Deed of Trust, or under the io Note or the Agreement, constitutes an Event of Default by Trustor hereunder or thereunder or 11 gives Beneficiary the right to accelerate the maturity of the indebtedness, or any part thereof, 12 secured hereby. 13 14 ARTICLE 10. REMEDIES. Upon the occurrence of any Event of Default and the expiration 15 of any applicable period within which to cure the same, Trustee and Beneficiary shall have the 16 following rights and remedies: 17 18 SECTION 10.01. Acceleration. Beneficiary may declare the entire outstanding Principal and all 19 other sums or payments required hereunder to be due and payable immediately and 20 notwithstanding the date such sums would otherwise be due in accordance with the Note and the 21 Agreement. 22 23 SECTION 10.02. Entry. Whether or not Beneficiary exercises the right provided in Section 24 10.01 above, Beneficiary, in person or by agent or court- appointed receiver, may enter upon, take 25 possession of, manage and operate the Property or any part thereof and do all things necessary or 26 appropriate in Beneficiary's sole discretion in connection therewith, including, without 27 limitation, making and enforcing, and if the same be subject to modification or cancellation, 28 modifying or canceling leases upon such terms or conditions as Beneficiary deems proper, 29 obtaining and evicting tenants, and fixing or modifying rents, contracting for and making repairs 30 and alterations, and doing any and all other acts which Beneficiary deems proper to protect the 31 security hereof; and either with or without so taking possession, in its own name, in the name of 32 Trustor or by court- appointed receiver (which may be appointed on notice or on ex parte 33 application without notice), suing for or otherwise collecting and receiving the rents and profits, 34 including those past due and unpaid, and applying the same less costs and expenses of operation 35 and collection, including reasonable attorney's fees, upon any indebtedness secured hereby and in 36 such order as Beneficiary may determine. Upon request of Beneficiary, Trustor shall assemble 37 and make available to Beneficiary at the site of the Real Property any of the Property which has 38 been removed therefrom. The entering upon and taking possession of the Property, or any part 39 thereof, the collection of any rents and profits and the application thereof as aforesaid shall not 40 cure or waive any Event of Default theretofore or thereafter occurring or affect any notice or 41 Event of Default or notice, and, notwithstanding continuance in possession of the Property or any 42 part thereof by Beneficiary, Trustor or a receiver, and the collection, receipt and application of 43 the rents and profits, Beneficiary shall be entitled to exercise every right provided for in this 44 Deed of Trust or by law or in equity upon or after the occurrence of an Event of Default, 10 Villa Rosa Second Deed of Trust Page 11 1 including, without limitation, the right to exercise the power of sale. Any of the actions referred 2 to in this Section may be taken by Beneficiary irrespective of whether any notice of an Event of 3 Default or election to sell has been given hereunder and without regard to the adequacy of the 4 security for the indebtedness hereby secured. 5 6 SECTION 10.03. Judicial Action. Beneficiary may bring an action in any court of competent 7 jurisdiction to foreclose this Deed of Trust or to enforce any of the covenants and agreements of 8 this Deed of Trust, or the Note and the Housing Agreement. 9 to SECTION 10.04. Power of Sale. 11 12 SUBSECTION 10.04(a). Beneficiary may elect to cause the Property or any part thereof to be 13 sold under the power of sale herein granted in any manner permitted by applicable law. In 14 connection with any sale or sales hereunder, Beneficiary may elect to treat any of the Property 15 that consists of a right in action or that is property that can be severed from the Real Property or 16 any improvements thereon without causing structural damage thereto as if the same were 17 personal property and dispose of the same in accordance with applicable law, separate and apart 18 from the sale of the Real Property. 19 20 SUBSECTION 10.04(b). Trustee may, and upon request of Beneficiary shall, from time to time, 21 postpone any sale hereunder by public announcement thereof at the time and place noticed 22 therefor. If the Property consists of several items of property, Beneficiary may designate the 23 order in which such items shall be offered for sale or sold. Any person, including Trustor, 24 Trustee or Beneficiary, may purchase at any sale hereunder, and Beneficiary shall have the right 25 to purchase at any sale hereunder by crediting'upon the bid price the amount of all or any part of 26 the indebtedness hereby secured. 27 28 SUBSECTION 10.04(c). Should Beneficiary desire that more than one sale or other disposition 29 of the Property be conducted, Beneficiary may, at its option, cause the same to be conducted 30 simultaneously, or successively, on the same day, or at such different days or times and in such 31 order as Beneficiary may deem to be in its best interests, and no such sale shall terminate or 32 otherwise affect the lien of this Deed of Trust on any part of the Property not sold until all 33 indebtedness secured hereby has been fully paid. Upon any sale hereunder, Trustee shall execute 34 and deliver to the purchaser or purchasers a deed or deeds conveying the Property so sold, but 35 without any covenant or warranty whatsoever, express or implied, whereupon such purchaser or 36 purchasers shall be let into immediate possession; and the recitals in any such deed or deeds of 37 facts, such as default, the giving of notice of default and notice of sale and other facts affecting 38 the regularity or validity of such sale or disposition, shall be conclusive proof of the truth of such 39 facts and any such deed or deeds shall be conclusive against all persons as to such facts recited 40 therein. 41 42 SUBSECTION 10.04(d). In case of any sale of the Property pursuant to any judgment or decree 43 of any court or at public auction or otherwise in connection with the enforcement of any of the 44 terms of this Deed of Trust, Beneficiary, its successors or assigns, may become the purchaser, 11 Villa Rosa Second Deed of Trust Page 12 1 and for the purpose of making settlement for or payment of the purchase price, shall be entitled 2 to deliver over and use the Note, together with all other sums, with interest, advanced and unpaid 3 hereunder, in order that there may be credited as paid on the purchase price the sum then due 4 under the Note, including principal thereon and all other sums, with interest, advanced and 5 unpaid hereunder. 6 7 SECTION 10.05. Proceeds of Sale. The proceeds of any sale made under or by virtue of this 8 Article, together with all other sums that then may be held by Trustee or Beneficiary under this 9 Deed of Trust, whether under the provisions of this Article or otherwise, shall be applied as 10 follows: 11 12 (a) First, to the payment of the costs and expenses of sale and of any judicial proceedings 13 wherein the same may be made, including reasonable compensation to Trustee and Beneficiary, 14 their agents and counsel, and to the payment of all expenses, liabilities and advances made or 15 incurred by Trustee under this Deed of Trust, together with interest on all advances made by 16 Trustee at the maximum rate permitted by law to be charged by Trustee. 17 18 (b) Second, to the payment of any and all sums expended by Beneficiary under the terms hereof 19 (including, but not limited to, sums paid by Beneficiary on the prior trust deed) not then repaid 20 and all other sums required to be paid by Trustor pursuant to any provisions of this Deed of Trust 21 or the Note, including, without limitation, all expenses, liabilities and advances made or incurred 22 by Beneficiary under this Deed of Trust or in connection with the enforcement hereof, together 23 with interest thereon as herein provided. 24 25 (c) Third, to the payment of the entire amount then due, owing or unpaid upon the Note, 26 including attorney's fees and costs. 27 28 (d) Fourth, all amounts otherwise due Beneficiary. 29 30 (e) The remainder, if any, to the person or persons legally entitled thereto. 31 32 SECTION 10.06. Waiver of Marshaling. Trustor, for itself and for all persons hereafter 33 claiming through or under it or who may at any time hereafter become holders of liens junior to 34 the lien of this Deed of Trust, hereby expressly waives and releases all rights to direct the order 35 in which any of the Property shall be sold in the event of any sale or sales pursuant hereto, and to 36 have any of the Property and/or other property now or hereafter constituted security for any of 37 the indebtedness secured hereby, marshaled upon any foreclosure of this Deed of Trust or for any 38 other security for any of said indebtedness. 39 40 SECTION 10.07. Remedies Cumulative. No remedy herein conferred upon or reserved to 41 Trustee or Beneficiary is intended to be exclusive of any other remedy herein or by law provided, 42 but each shall be cumulative and shall be in addition to every other remedy given hereunder or 43 now or hereafter existing at law or in equity or by statute. No delay or omission of Trustee or 44 Beneficiary to exercise any right or power accruing upon any Event of Default shall impair any 12 Villa Rosa Second Deed of Trust Page 13 i right or power or shall be construed to be a waiver of any Event of Default or any acquiescence - 2 therein; and every power and remedy given by this Deed of Trust to Trustee or Beneficiary may 3 be exercised from time to time as often as may be deemed expedient by Trustee or Beneficiary. If 4 there exists additional security for the performance of the obligations secured hereby, the holder 5 of the Note, at its sole option, and without limiting or affecting any of its rights or remedies 6 hereunder, may exercise any of the rights and remedies to which it may be entitled hereunder 7 either concurrently.with whatever rights and remedies it may have in connection with such other 8 security or in such order as it may determine. Any application of any amounts or any portion 9 thereof held by Beneficiary at any item as additional security hereunder, whether pursuant to this 10 deed of trust or otherwise, to any indebtedness secured hereby shall not extend or postpone the 11 due dates of any payments due from Trustor to Beneficiary hereunder or under the Note, or 12 change the amounts of any such payments or otherwise be construed to cure or waive any default 13 or notice of default hereunder or invalidate any act done pursuant to any such default or notice. 14 In the event that Beneficiary shall have proceeded to enforce any right under this Deed of Trust 15 by foreclosure, sale, entry or otherwise, and such proceedings shall have been discontinued or 16 abandoned for any reason or shall have been determined adversely, then, and in every such case, 17 Trustor and Beneficiary shall be restored to their former positions and rights hereunder with 18 respect to the Property subject to the lien hereof. 19 20 ARTICLE 11. MISCELLANEOUS 21 22 SECTION 11.01. Severability. In the event that any one or more of the provisions contained in 23 this Deed of Trust shall for any reason be held to be invalid, illegal or unenforceable in any 24 respect, such invalidity, illegality or unenforceability shall not affect any other provision of this 25 Deed of Trust, and this Deed of Trust shall be'construed as if such invalid, illegal or 26 unenforceable provision had never been contained herein. 27 28 SECTION 11.02. Certain Charges. Trustor agrees to pay the charges of Beneficiary for any 29 service rendered Trustor, or on its behalf, connected with this Deed of Trust or the indebtedness 30 secured hereby, including, without limitation, delivering to an escrow holder a request for full or 31 partial reconveyance of this Deed of Trust, transmitting to an escrow holder moneys secured 32 hereby, changing the records pertaining to this Deed of Trust and indebtedness secured hereby, 33 showing a new owner of the Property and replacing an existing policy of insurance held 34 hereunder with another such policy. 35 36 SECTION 12.03. Notices. All notices expressly provided hereunder to be given by Beneficiary 37 to Trustor and all notices and demands of any kind or nature whatsoever that Trustor may be 38 required or may desire to give to or serve on Beneficiary shall be in writing and shall be served 39 by first class or registered or certified mail, return receipt requested. Any such notice or demand 40 so served shall be deposited in the United States mail, with postage thereon fully prepaid and 41 addressed to the party so to be served at its address above stated or at such other address of which 42 said party shall have theretofore notified in writing, as provided above, the party giving such 43 notice. Service of any such notice or demand so made shall be deemed effective on the date of 44 actual delivery as shown by the addressee's return receipt or the expiration of forty -eight (48) 13 Villa Rosa Second Deed of Trust Page 14 1 hours after the date of mailing, whichever is the earlier in time, except that service of any notice 2 of default or notice of sale provided or required by law shall, if mailed, be deemed effective on 3 the date of mailing. 4 5 SECTION 12.04. Trustor Not Released. Extension of the time for payment or modification of 6 the terms of payment of any sums secured by this Deed of Trust granted by Beneficiary to any 7 successor -in- interest of Trustor shall not operate to release, in any manner, the liability of the 8 original Trustor. Beneficiary shall not be required to commence proceedings against such 9 successor or refuse to extend time for payment or otherwise modify the terms of the payment of to the sums secured by this Deed of Trust by reason of any demand made by the original Trustor. 11 Without affecting the liability of any person, including Trustor, for the payment of any 12 indebtedness secured hereby, or the lien of this Deed of Trust on the remainder of the Property 13 for the full amount of any such indebtedness and liability unpaid, Beneficiary and Trustee are 14 respectively empowered as follows: Beneficiary may from time to time and without notice (a) 15 release any person liable for the payment of any of the indebtedness, (b) extend the time or 16 otherwise alter the terms of payment of any of the indebtedness, (c) accept additional real or 17 personal property of an kind as security therefor, whether evidenced by deeds of trust, mortgages, 18 security agreements or any other instruments of security, or (d) alter, substitute or release any 19 property securing the indebtedness; Trustee may, at any time and from time to time, upon the 20 written request of Beneficiary (a) consent to the making of any map or plat of the Property or any 21 part thereof, (b) join in granting any easement or creating any restriction thereon, (c) join in any 22 subordination agreement or other agreement affecting this Deed of Trust or the lien or charge 23 hereof, or (d) reconvey, without any warranty, all or part of the Property. 24 25 SECTION 12.05. Inspection. Beneficiary may at any reasonable time or times make or cause to 26 be made entry upon and inspections of the Property or any part thereof in person or by agent. 27 28 SECTION 12.06. Reconveyance. Upon the payment in full of all sums secured by this Deed of 29 Trust or upon forgiveness of such payment in accordance with the Note, Beneficiary shall request 30 that Trustee reconvey the Property and shall surrender this Deed of Trust and Note evidencing 31 indebtedness secured by this Deed of Trust to Trustee. Upon payment of its fees and any other 32 sums owing to it under this Deed of Trust, Trustee shall reconvey the Property without warranty 33 to the person or persons legally entitled thereto. Such person or persons shall pay all costs of 34 recordation, if any. The recitals in such reconveyance of any matters of facts shall be conclusive 35 proof of the truthfulness thereof. The grantee in such reconveyance may be described as "the 36 person or persons legally entitled thereto." Five (5) years after issuance of such full 37 reconveyance, Trustee may destroy the Note and this Deed of Trust unless otherwise directed by 38 Beneficiary. 39 40 SECTION 12.07. Interpretation. Wherever used in this Deed of Trust, unless the context 41 indicates a contrary intent, or unless otherwise specifically provided herein, the word "Trustor" 42 shall mean and include both Trustor and any subsequent owner or owners of the Property, and 43 the word 'Beneficiary" shall mean and include not only the original Beneficiary hereunder but 44 also any future owner and holder, including pledgees, of the Note secured hereby. In this Deed of 14 0 0 Villa Rosa Second Deed of Trust Page 15 1 Trust wherever the context so requires, the masculine gender includes the feminine and/or neuter, 2 and the neuter includes the feminine and/or masculine, and the singular number includes the 3 plural and conversely. In this Deed of Trust, the use of the word "including" shall not be deemed 4 to limit the generality of the term or clause to which it has reference, whether or not non - limiting 5 language (such as "without limitation," or "but not limited to'' or words of similar import) is used 6 with reference thereto. The captions and headings of the Articles and Sections of this Deed of 7 Trust are for convenience only and are not to be used to interpret, define or limit the provisions 8 hereof. 9 to SECTION 12.08. Consent. The granting or withholding of consent by Beneficiary to any 11 transaction as required by the terms hereof shall not be deemed a waiver of the right to require 12 consent to future or successive transactions. 13 14 SECTION 12.09. Successors and Assigns. All of the grants, obligations, covenants, 15 agreements, terms, provisions and conditions herein shall run with the land and shall apply to, 16 bind, and inure to the benefit of the heirs, administrators, executors, legal representatives, 17 successors and assigns of Trustor and the successors -in -trust of Trustee and the endorsees, 18 transferees, successors and assigns of Beneficiary. In the event that Trustor is composed of more 19 than one party, the obligations, covenants, agreements and warranties contained herein as well as 20 the obligations arising therefrom are and shall be joint and several as to each such party. 21 22 SECTION 12.10. Governing Law. This Deed of Trust shall be governed by and construed under 23 the laws of the State of California. 24 25 SECTION 12.11. 'Trustor Waivers. Trustor waives the benefit of all laws now existing or that 26 hereafter may be enacted with respect to any statute of limitations for the filing of any action or 27 claims by Beneficiary. 28 29 SECTION 12.13. Superiority of First Lender Documents. 30 31 SUBSECTION 12.13(a). This Deed of Trust shall not diminish or affect the rights of the First 32 Lender under that certain deed of trust dated January 31, , 2000, executed by the 33 Trustor in favor of the First Lender and recorded in the County of San Luis Obispo on 34 , , and assigned Instrument No. or any subsequent 35 First Lender deeds of trust hereafter recorded against the Security (the "First Deed of Trust "), 36 except as provided in Subsection 12.13(b) below. Beneficiary and Trustor acknowledge and 37 agree that this Deed of Trust is subject and subordinate in all respects to the - liens, terms, 38 covenants and conditions of the First Deed of Trust and to all advances heretofore made or which 39 may hereafter be made pursuant to the First Deed of Trust including all sums advanced for the 40 purpose of (i) protecting or further securing the lien of the First Deed of Trust, curing defaults by 41 the Trustor under the First Deed of Trust or for any other purpose expressly permitted by the 42 First Deed of Trust or (ii) constructing, renovating, repairing, furnishing, fixturing or equipping 43 the Property. The terms and provisions of the First Deed of Trust are paramount and controlling, 44 and they supersede any other terms and provisions hereof in conflict therewith. 15 Villa Rosa Second Deed of Trust Page 16 1 SUBSECTION 12.13(b). In the event of default, the First Lender may take the following actions 2 to cure the default, provided first that: (i) the Beneficiary has been given written notice of a 3 default under the First Deed of Trust, and (ii) the Beneficiary shall not have cured the default 4 under the First Deed of Trust, or diligently pursued curing the default as determined by the First 5 Lender, within the 60 -day period provided in such notice sent to the Beneficiary: 6 7 1) Foreclose on the subject property pursuant to the remedies permitted by law and written 8 in a recorded contract or deed of trust; or 9 10 2) 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 by a 12 trustor; or 13 14 3) Sell the property to any person at a fair market value price subsequent to exercising its 15 rights under the deed of trust. Any value in excess of the unpaid mortgage and costs of 16 sale administration shall be used to satisfy the City loan. In no case may a first mortgage 17 lender, exercising foreclosure assignment in -lieu of foreclosure or sale, obtain value or 18 rights to value greater than the value of the outstanding indebtedness on the first 19 mortgage at the time of the debt clearing action. 20 21 The following types of transfers shall remain subject to the requirements of the City's loan and 22 right of first refusal: transfer by gift, devise, or inheritance to the owner's spouse; transfer to a 23 surviving joint tenant; transfer to a spouse as part of divorce or dissolution proceedings; or 24 acquisition in conjunction with a marriage. 25 26 SECTION 12.14. Request for Notices of Default and Sale. 27 28 SUBSECTION 12.14(a). Trustor hereby requests that a copy of any notice of default and notice 29 of sale as may be required by law or by this Deed of Trust be mailed to Trustor at its address 3o above stated. 31 32 SUBSECTION 12.14(b). In accordance with Section 2924b of the California Civil Code, request 33 is hereby made that a copy of any notice of default and a copy of any notice of sale under that 34 deed trust recorded on , in Book page 35 records of San Luis Obispo County, California, executed by Douglas= Rkck WiIIiam -%s 36 trustor in which American * is named as Beneficiary and American-City Mortgage 37 Corp., as Trustee, be mailed to: Community Development Director, City of San Luis Obispo, 38 990 Palm Street, San Luis Obispo, California 93401 -3249. NOTICE: A copy of any notice of 39 default and of any notice of sale will be sent only to the address contained in this recorded 40 request. If your address changes, a new request must be recorded. 41 *City Mortgage Corporation 42 SECTION 12.15. No Transfer. Trustor shall not voluntarily or involuntarily (except for a 43 transfer in accordance with the Housing Agreement) assign or otherwise transfer any of its rights, 16 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 39 40 41 42 43 44 0 9 Villa Rosa Second Deed of Trust Page 17 duties, liabilities or obligations hereunder or under the Note without the prior written consent of - Beneficiary. SECTION 12.16. Attorney's Fees. In any action to interpret or enforce any provision of this Deed of Trust, the prevailing party shall be entitled to reasonable costs and attorney's fees.. IN WITNESS WHEREOF, the undersigned have executed this Deed of Trust as of the day and year first above written. I O/1 GE / W4 r, , "Trustor" Do glas ick illiams 17 Villa Rosa Second Deed of Trust Page 18 1 2 EXHIBIT "A' 3 4 DESCRIPTION OF REAL PROPERTY 5 6 LOT 74 OF TRACT NO. 2066, IN THE CITY OF SAN LUIS OBISPO, 'IN THE 7 COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA, ACCORDING TO MAP RECORDED 8 MAY 12, 1992 IN BOOK 16, PAGE 71 OF MAPS AND AMENDED DECEMBER 31, 1992 9 IN BOOK 16, PAGE 85 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY 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 39 jh/L,:VaWedo&ust 18 .� AIVYERI 4 ') } STATE OF CALIFORNIA / }ss. COUNTY OF J'a—m GCcfi On Feb ('ya -ey 9,2--coo , before me, personally appeared bo -Le ��� (� i a(6 u :i-� cai� i r_� w� a e►iyy � �1�111h (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) k _ STEPHANIE L. MONK Cn : COMM. Xi 177392 �_ NO"Rry PubGc- Ca,ifomla Coj* of Sari Luis Obispo N My CUM Exa. April " orm Title of Document Liu Ct 4 Tnb t Date of Document a�o _ (,. 2-wp No. of Pages �g Other signatures not acknowledged k (C�— 3008 (1/94) (General) First American Title Insurance Company END OF DOCUMENT All C TIFICATE OF INSURANCE - CONDOM11 M COVERAGE AFFORDED BY THE POLICY IS PROVIDED BY THE ALLSTATE INSURANCE COMPANY MASTER POLICY NUMBER I LOAN NUMBER I CONDOMINIUM UNIT NUMBER 050 552018 MASTER POLICY l 1/llllllll llllllllllllllllllllllllllllllllllllllllllllllllllllll llllllllllllllllll/llllllllll!/lllllllllllllllllllllllllllllll lllllllllllllllllllllllllllllll INSURED% NAME Rosa Homeowners Association LOCATION OF PREMISES 811 Lawrence Drive San Luis Obispo, CA 93401 UNIT OWNER NAME DOUGLAS RICK WILLIAMS, A SINGLE MAN ADDRESS 811 Lawrence Drive . San Luis Obispo, CA 93401 PROPERTY INSURANCE reuiLOiNGsi COVERAGE AMOUNT $1,353,000 DEDUCTIBLE $1,000 Special Form (All Risk) Blanket Medical Payments Replacement Cost $2,000,000 COMBINED SINGLE LIMIT $5,000 PER PERSON ADDITIONAL COVERAGES Supplemental Property Board of Managers Employee Dishonesty - $30,000 Building Code Upgrades Employer's Non -owned Auto Liability NOTICE TO UNIT -OWNER: This policy does not include coverage for household contents or individual personal property of individual unit owners or individual unit owners personal liability. MORTGAGE CLAUSE Thebolicy contains a Mortgage Clause in favor of: Mortgagee SECOND MORTGAGE- CITY OF SAN LUIS OBISPO Address 990 PALM ST SAN LUIS OBISPO, CA 93401 •� THIS CERTIFICATE WILL REMAIN IN FORCE FROM THE INCEPTION OF THE POLICY UNTIL THE POLICY- IS CANCELLED OR EXPIRES, . POLICY INCEPTION DATE: 12/15/1997 . 12:01 A.M. Standard Time at the location of the Insured premises PROVISIONS /ll/l//ll/ll/////l///ll/l/l//////ll/lllll!!llll/lllllllllll/llllllllll/l/l/l////////l/lllll/llll/lllll/llllllllllllllll/lllllllllllll lllllllllll/l/lllll/ll/l/l/l/ll This form is not the contract of insurance, but attests that a policy as identified above has been issued. The provisions of the policy shall prevail in all respects. Note. to Mortgagee: This replaces the Certificate issued on in the name of terminated on It is agreed that should the insurance protection evidenced herein terminate for any reason, a thirty day written notice of such termination will be . given to the mortgagee. W • ?,k Andrew W. Cox (805) 543 -2194 .21112000 Authorized Agent / Representative Phone Number Date s• a s QS A M E R , first American Title I -r�rance Company 4� ',1 899 PACIFIC STREET (P.O. BOX 1147), SAN LUIS OBISPO, CA 93401 * (805) 543 -8900 +� 559 FIVE CITIES DRIVE, PISMO BEACH, CA 93449 - (805) 773 -6600 935 RIVERSIDE, SUITE 13, PASO ROBLES, CA 93446 - (805) 238 -7747 000 p0� 6895 MORRO ROAD, ATASCADERO, CA 93422 - (805) 466 -8545 815 MORRO BAY BOULEVARD, MORRO BAY, CA 93442 - (805) 772 -2773 ® 1352 LOS OSOS VALLEY ROAD, SUITE C, LOS OSOS, CA 93402 - (805) 528 -5224 783 ARLINGTON STREET, CAMBRIA, CA 93428 - (805) 927 -6192 * Office FAX No: (805) 773 -6604 City of San Luis Obispo Date : February 10, 2000 990 Palm Street Escrow No.: 41083 -SMK San Luis Obispo, CA 93401 -3249 Your Loan No. Attn: Jeff Hook RE: Borrower: Douglas Rick Williams Property: 811 Lawrence Drive, San Luis Obispo, CA 93401 Lot: 74, Tract: 2066 We are pleased to inform you that the above referenced escrow was closed on February 10, 2000 and we enclose the following for your records: Certified Copy of the Final HUD /RESPA Settlement Statements. Original Note If you have any questions or need anything further, please do not hesitate to call. Sincerely, Stephanie Monk Escrow Officer KMM 1. 2 3 4 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 39 40 41 42 43 44 45 46 RECORDING REQUESTED BY: City of San Luis Obispo _ WHEN RECORDED MAIL TO: bity Clerk_ City of San Luis Obispo 990 Palm Street San Luis Obispo, CA 93401 -3249 VILLA ROSA PROMISSORY NOTE SECURED BY DEED OF TRUST Date: FPhruary 1 , 2000 At San Luis Obispo, California FOR VALUE RECEIVED, Douglas Rick Williams ( "Maker ") promises to pay to the order of the City of San Luis Obispo ( "City ") at 990 Palm Street, San Luis Obispo, California 93401 -3249 or such other address as City may from time to time designate, the sum of s i x Thousand Nine Hundred Dollars ($ 6,900.00 ), according to the terms set forth herein. This Note shall accrue interest, compounded annually, at an annual rate of 4.5 percentage points added to the 11`h District Cost of Funds, as published by the Federal Home Loan Bank Board, amortized over 30 years. The Loan shall be amortized over thirty years, with monthly payments of principal and interest due and payable to the City on the first day of each month unless waived or forgiven, as set forth below. 1. Security for Note. This Note is secured by a deed of trust of even date herewith (the "Deed of Trust ") executed by Maker, as Trustor, and nanung City as Beneficiary, covering certain real property ( "the Property") owned by Maker in the County of San Luis Obispo, State of California, which Property is described in Exhibit A, attached hereto. 2. Incorporation of Affordable Housing Agreement. This Note and the Deed of Trust are executed and delivered pursuant to that certain "Affordable Housing Agreement" ( "Housing Agreement ") recorded in the County of San Luis Obispo on March 18, 1999 between City and Villa Rosa LLC, A California Corporation, regarding affordable housing requirements applying to the Villa Rosa Planned Residential Development, as amended by San Luis Obispo City Council in Ordinance 1318 (1997 Series). Pursuant to the Housing Agreement, Maker is to live at the Property. Consequently, this Note is subject to section 711.5 of the California Civil Code, which grants to City the authority to accelerate all amounts due under this Note if any subsequent transfer of the Property at any time does not comply with the provisions of the Housing Agreement or Deed of Trust. The Housing Agreement is incorporated herein by this reference as though set forth in its entirety and attached hereto as Exhibit B. 3. City's Right of First Refusal. Upon resale, 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 then current Villa Rosa Affordable Housing Promissory Note Page 2 1 appraised value. The consideration for the City's right of first refusal shall consist of I percent of 2 the remaining City loan balance. The balance of the City loan remaining after deducting this 1 3 percent of the loan balance shall be credited toward the purchase price if the City chooses to 4 exercise the purchase option. The provisions of this section shall not impair the rights of a first 5 mortgage lender secured by a recorded deed of trust. The purchase money lender shall have a 6 higher priority than the City's loan. The City's security shall be prioritized as a second mortgage. 7 This first priority applies to the purchase money lender's assignee or successor in interest, to: 8 9 i. Foreclose on the subject property pursuant to the remedies permitted by law and 10 written in a recorded contract or deed of trust; or 11 12 ii. Accept a deed of trust or assignment to the extent of the value of the unpaid first 13 mortgage to the current market value in lieu of foreclosure in the event of default by 14 a trustor; or 15 16 iii. Sell the property to any person at a fair market value price subsequent to 17 exercising its rights under the deed of trust. Any value in excess of the unpaid 18 mortgage and costs of sale administration shall be used to satisfy the City loan. In no 19 case may a first mortgage lender, exercising foreclosure assignment in -lieu of 20 foreclosure or sale, obtain value or rights to value greater than the value of the 21 outstanding indebtedness on the first mortgage at the time of the debt clearing 22 action. 23 24 The following types of transfers shall remain subject to the requirements of the City's loan and 25 right of first. refusal: transfer by gift, devise, or inheritance to the owner's spouse; transfer to a 26 surviving joint tenant; transfer to a spouse as part of divorce or dissolution proceedings; or 27 acquisition in conjunction with a marriage. 28 29 4. Due on Transfer. In the event Maker sells, leases, rents or otherwise transfers the 30 Property to any person or entity other than an "eligible household" (as such term is defined in the 31 Housing Agreement), then the Principal of and accrued interest on the Loan shall be immediately 32 due and payable to the City as set forth in the Deed of Trust in favor of City recorded 33 simultaneously herewith as a second deed of trust subordinate to the deed of trust of the first 34 mortgage lender on the Property.. 35 36 5. Waiver of Principal, and Interest. City waives timely payment of the Principal of and 37 interest on the Loan for such time as Maker, or subsequent buyer determined by City or its 38 Housing Authority to be an eligible household.' s as the owner and occupant of the 39 Property as Maker's principal residence until f L0 120. 40 41 • • Villa Rosa Affordable Housing Promissory Note Page 3 1 6. Forgiveness of Loan. City will forgive the repayment of the outstanding Principal of the 2 Loan and all interest thereon as long as Maker, or subsequent buyer determined by City or its 3 .Housing Authority to be an eligible household, reymms as the owner and occupant of the 4 Property as Maker's principal residence until 2 /// 20_ 5 6 7. Prepayment. This Note may be prepaid in whole or in part. 7 8 8. Payment. The amount due under this Note shall be paid without the necessity for notice 9 or demand by City. 10 11 9. Pay_ ment Amount. The amount due under this Note shall be paid from the net proceeds 12 as a result of any transfer. Net proceeds is the sales price minus any loans or liens that are senior 13 to this Note and minus closing costs. 14 15 10. Default Defined. In addition to other defaults referred to in this Note and the Deed of 16 Trust, it shall be a default under this Note if Maker fails to make any payment or perform any 17 obligation under or in connection with (a) this Note, (b) the Deed of Trust, or (c) an y other note, 1.8 trust deed or other obligation of Maker relating to the Property, including but not limited to the 19 Housing Agreement, or secured by all or any part of the Property, whether junior or senior to this 20 Note, and if such failure is not cured within such time as may be permitted by the obligation or the 21 obligee. 22 23 11. Options of City upon Default. Upon the occurrence of a default, City shall have the 24 option, without further notice or demand: 25 26 (a) To declare the Note to be immediately due and payable; 27 2 8 (b) If the default relates to a transfer of the Property, to bring an action at law or in 29 equity to require Maker and the proposed transferee to terminate and/or rescind the sales 30 contract or lease and/or to declare the transfer void, notwithstanding that the transfer may 31 have closed and become final as between Maker and the transferee; or 32 33 (c) To pursue any other remedy available under this Note or the Deed of Trust, or 34 at law or in equity or under any other agreement, instrument or document entered into by 35 Maker and City, including but not limited to the Housing Agreement. 36 37 12. Failure to Exercise Options. Failure to exercise any such option upon the occurrence of 38 one or more events of default shall not constitute a waiver of City's right to exercise any such 39 option at a later time. 40 Villa Rosa Affordable Housing Promissory Note Page 4 1 13. Costs of Enforcement and Collection. If Maker defaults under this Note, Maker shall 2 pay all costs of enforcement and collection, including, but not limited to, costs and attorney's fees, 3 including reasonable attorney's fees, whether or not such enforcement or collection includes filing 4 a lawsuit or prosecution of a lawsuit, if filed. 5 6 14. City's Right to Transfer Interest in Note. City and any subsequent holder of this Note 7 may at any time, without consent of Maker, sell, assign, pledge, hypothecate, transfer and 8 negotiate or grant participation in any part of or any interest in City's rights and benefits under this 9 Note to another governmental body or nonprofit organization which is eligible to receive such 10 transfer under state and federal law. 11 12 15. Waiver of Notice and Statute of Limitations. Except for any notice expressly required 13 by this Note, Maker waives demand, notice of demand, presentation for payment, notice of non- 14 payment or dishonor, protest and notice of protest. To the fullest extent permitted by law, Maker 15 waives the defense of the statute of limitations in any action on this Note or to recover on the 16 security for this Note. 17 18 16. Liability. City's acceptance of any payment under this Note which is less than payment in 19 full of all amounts then due and payable, or the granting of any extension of time for payment of 20 any amount due under this Note or for the performance of any covenant, condition or agreement 21 entered into by Maker and City, or City's. grant of any other indulgence to Maker, or City's taking 22 or release of other or additional security for the indebtedness evidenced hereby, or any other 23 modification or amendment of this Note shall in no way release or discharge the liability of Maker 24 or any endorser, guarantor or other person secondarily liable for this Note.. 25 26 17. Governine Law. This Note shall be governed by the laws of the State of California. 27 Maker agrees that the site of any hearing or action of whatever nature or kind regarding this Note 28 shall be conducted in the County of San Luis Obispo, State of California. 29 30 18. Seyerability. If any provision of this Note or any application of such provision be 31 declared by a court to be invalid or unenforceable, such invalidity or unenforceability shall not 32 affect any other application of such provision or the balance of the provisions hereof, which shall, 33 to the fullest extent possible, remain in full force and effect.. 34 35 36 Q 37 "Maker" Dou as Rick W liams 38 39 40 41 Villa Rosa Affordable Housing Promissory Note Page 5 1 CITY: 2 3 4 4JohnDCity Administrative Officer 7 8 9 APPROVED AS TO FORM AND LEGAL EFFECT: 1.0 11 12 13 J orge en, At mey 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 Na:vqxomLvmywu Villa Rosa Affordable Housing Promissory Note Page 6 EXHIBIT ''A' DESCRIPTION OF REAL PROPERTY LOT 74 OF TRACT NO. 2066, IN THE CITY OF SAN _LUIS OBISPO, IN THE COUNTY OF SAN LUIS OBISPO" STATE OF CALIFORNIA, ACCORDING TO THE MAP RECORDED MAY 12, 1992 IN BOOK 16, PAGE.71 OF MAPS AND AMENDED DECEMBER 31, 1992 IN BOOK 16, PAGE 85 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY CALIFORNIA ALL-PURPM ACKNOWLEDGMENT personally appeared rsonally -known to me – – ❑ proved to me on the basis of satisfactory evidence to be the person( whose name(b) is /are - subscribed to the within instrument and acknowledged to me that he /she /they executed the same in his /herA#eirorized capacity(;iQ), and that by his /hef4heir signaturAy on the instrument the person(* LEE PRICE or the entity upon behalf of which the persoAl�) acted, Commission 0 1220447 executed the instrument. $ Notary Public - Caiifomia y San this Obispo county WITN S my an an offic' se . MY Comm �g May21; � Signature of Notary Public OPTIONAL Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this AWn to another document. Description of Attached Docum Title or Type of Document: Document Date: C:911 16 G Signer(s) Other Than Named Above: Capacity(ies) Signer's Name: by Sigper(s) ❑ Individual )C rporate Officer ( Title(s): ❑ Partner — ❑ Limited ❑ General ❑ Attorney -in -Fact ❑ Trustee _ ❑ Guardian or Conservator ❑ Other: Top of thumb here Sicmr Is Representing: of Pages:, Signer's Name: ❑ Individual ❑ Corporate Officer Title(s): ❑ Partner — ❑ Limited ❑ General ❑ Attorney -in -Fact ❑ Trustee ❑ Guardian or Conservator - ❑ Other: Top of thumb here Signer Is Representing 0 1994 National Notary Association • 8236 Remmet Ave., P.O. Box 7184 • Canoga Park, CA 91309 -7184 Prod. No. 5907 Reorder: Call Toll -Free 1-800- 876 -6827 0265 A. Final SETTLEMENT STATEMENT B. TYPE OF LOAN 1. [ ]FHA 2. [ ]FMHA 4. [ ]VA 5. [ ACONV. INS. 6. File Number: (Escrow) 41083 -SMK 8. Mortgage Insurance Case Number: 3. [ ]CONV. UNINS. 7. Loan Number: AG%0051745 C. NOTE: This form is furnished to give you a statement of actual settlement costs. Amounts paid to and by the settlement agent are shown. Items marked "(p.o.c)" were paid outside the closing; they are shown here for information purposes and are not included in the totals. D. NAME OF BORROWER: Doug] as 1 ck Wi I I 1 am5 811 Lawrence Drive, San Luis Obispo CA 93401 E. NAME OF SELLER villa Rosa, LLL 592 So. 13th Street, Grover Beach CA 93433 F. NAME OF LENDER G. PROPERTY LOCATION: American City Mortgage 811 Lawrence Drive 20501 South Avalon Road San Luis Obispo, CA 93401 Carson, CA 90746 A ustments oritems : seller dJ ,. f .:. H. SETTLEMENT AGENT: 1-irst American litle insurance Co. I. SETTLEMENT DATE: 559 Five Cities Drive, Pismo Beach CA 93449 February 10, 2000 J. SUMMARY OF BORROWER'S TRANSACTION 211. County takes K. SUMMARY OF SELLER'S TRANSACTION 100 Gross Amqunt Due;Frorrl Borrower' :....... .. 400 .Gross Amount Due To Seiler _. ..... 101. Contract sales rice p 512. Assessments 179, 900.00 401. contract sales price 179, 900.00 102 Personal PrtY .: .. Credl t ::'for C ty 0f SLQ: 2nd _ 6; 900:. 00 402 Personal;: ro p PAY 103. Settlement charges to borrower pine 140C ned si tr her 514. he uh& 41 eb}+ Cerhfi@S that this Is 4,202.78 403. 104. " . .. . 515 c.or.rW :00y 0f :t.fm original. Document it ja oromeft 404 105 516. FIRST A- I!ERICAtd TVTLE COMPANY S < 405. ' Adjustments for items paid by seller in advancc ......... . ... Adjustments for items paid by seller in advanc 106. Ctty]town,take 518. 406 City / town taxes 107. countytaxes 02/10/00 - 07/01/00 ... 519: 183.93 407. Countytaxes 02/10/00- 07/01/00 183.93 . 108 Assessments ° : 408 Assessments lo9.H.O.Assn. Prorations * 63.76 409. H.0 Assn. Prorat ons * 63.76 1;10 >. :: .. ..... ....... 410 _. _ ..... 111. 411. 112. :412 -:.. 113. 413. 1.14 :' ........ . 414 115. 415. 116. `: ; 416 117. 417. 1.1R -. 'j:: ATA :::: -,: 203. Ekisting loan taken subject !to 204 ..Second mortgage Loan 504 :Payoff of first mortgage koan ;:. 205 505 Payoff of second �mortgage i.. an 206. 506 ... . 207. 507. 208. `'508 209. 509. A ustments oritems : seller dJ ,. f .:. A uslments r items:: dJ urlpat i?y seller:: 210. City/town taxes 5W. City/town taxes 211. County takes 511 County taxes ' 212. Assessments 512. Assessments 213. Credl t f0r City of ibLO 2:rld 6 9:00 00;'x513 Credl t ::'for C ty 0f SLQ: 2nd _ 6; 900:. 00 214. ned si tr her 514. he uh& 41 eb}+ Cerhfi@S that this Is a h'qQ ow 215. ... ...... : .. . 515 c.or.rW :00y 0f :t.fm original. Document it ja oromeft 216. 516. FIRST A- I!ERICAtd TVTLE COMPANY ... 1 .. ... ........ . ......... . 218. 518. .219. 519: 220. Total Paid For Borrower: 184 362.30 520. Total Reduction Amount Due 16 833.05 ... ............. _....... ........ ......... ..... .... ....... ..................... __ . ........ ....... ...... ........ ..._. _ . _........... ........ . 300..Cash:AtSettlementFrom /To Borrower ;:: 600`:: Cash AtSettlemerit To %From Seiler. .... , ......... ..... . >. 301. Gross amount due from borrower pine 12) 184 , 350.47 601. Gross amount due to seller pine 420) 180,147.69 302 Less'amour t`paid 1 y borrower [lir e;220) "184 ;362.30''602. less reductions iri amount due seller( #5 ) 16 ; 833 '05 * REFER TO ATTACHED DETAIL STATEMENTS Original Final SETTLEMENT STATEMENT U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT ATTACHMENT PAGE: 1 FILE NUMBER (ESCROW): 41083 -8MK SETTLEMENT DATE: 02110100 BORROWER(S) SELLERS(S) Douglas Rick Williams Villa Rosa: LLC LENDER: American City Mortgage PROPERTY LOCATED AT: 811 Lawrence Drive San Luis Obispo, CA 93401 - PAG E 1 - J. SUMMARY OF BORROWER'S TRANSACTION 107. COUNTY TAXES $ 183.93 County Taxes 183.93 at $ 234.81 per 6 months . From 02110100 To 07/01/00 109. H.O.ASSN. PRORATIONS * $ 63.76 Rosa Homeowners Association 63.76 at $ 91.08 per month From 02110100 To 03/01/00 201. DEPOSIT OR EARNEST MONEY $ 74,462.30 Deposit 500.00 Deposit 73,962.30 K. SUMMARY OF SELLER.'S.TRANSACTION 407. COUNTY TAXES $ 183.93 County Taxes 183.93 at $ 234.81 per 6 months From 02110100 To 07/01/00 409. H.O.ASSN. PRORATIONS * $ 63.76 Rosa Homeowners Association 63.76 at $ 91.08 per month From 02110100 To 03/01/00 PAID FROM PAID FROM - PAGE 2 - BORROWER'S SELLER'S FUNDS FUNDS DETAILED ESCROW FEES $ 175.00 $ 40.00 Prepare Grant Deed 40.00 Loan Tie -In Fee 150.00 Shipping and Handling Services 25.00 F 1 l_E No . 044 02. 01 V 1. : 30 I D : NOUN; I N; HUTHOR I TY Lo am Housing Authority of the City of San Luis Obispo February 1, 2000 Kimberly Schwarzkopf American City Mortgage 129 N. Halcyon Road Arroyo Grande, CA 93420 F1-,' Qnc 54:3 4992 PNGE 1 1 18/ Leff Street Post Office Box 1289 San Luis ObISPO CA 93106- 1789 (80S) 5,13 -4478 fax (805) 543 -4992 Executive Director- Secrotary Gworge J. Morlan Sent by Fax — 481 -1114 Kimberly, The income verification for nouglas Rick Willl s has been reviewed and approved. Please call me today. I have another question I think you can help me with. 597 -5304 Thanks, Craig., A. Rogneby Jam �fjy ZC, ear VILLA R A Q PLANNED UNIT DEVELOPMENT D.tPOSIT RECEIPT AND AGREEMENT OF PURCHAfE ANT) SALE PHIS AGREEMENT, made this 12th day of _August I 1999, between SRcS tlomcs and Douglas Rick Williams I hereinafter collectively called "Buyer ", whose address is 55 Highland Drive San Luis Obi po 93405 -1017 544- 4274hm or 786 - 2570wk _ _ and Villa RD" A LLC., a California limited liability company, hereinafter called "Villa Rosa." Recitals j 1. Buyer desires to purchase a single- family home in a planned n it development constructed by Villa Rosa on the terms and conditions set forth herein. 2. Buyer acknowledges that the following documents have at Villa Rosa's office prior to Buyer's execution of this Ag before executing this Agreement: (l) A copy of the Plans and Specifications (2) A copy of Villa Rosas Standard Policies exhibit "A" and hereby incorporated in fu (3) A copy of Villa Rosa's Description (A) The declaration of covenants, conditions, (5) A statement from the governing body oft the outstanding delinquent assessments ar against the Unit. de available to Buyer for Buyer's examination and that Buyer has read all of the documents the improvements to be constructed; ind Procedures attached hereto, marked by this reference. ends to be used in the residence; .nd restrictions for the Lot; i e Homeowner's Association setting forth :related charges levied by the Association In consideration of the covenants and agreements herein contained, tfi a parties hereto agree as follows: ReCBived from Douglas Rick Williams . I it (Buyer) the sum of Five Hundred dollars (S`500.00 I . )' Dollars (Deposit), in the form of _ cash X check cashier's check payable to First American Title Company. - . it1' OFFER TO PURCHASk 3(a). By execution of this planned unit development Deposit receipt and Agreement of Sale, Buyer r to «eEmtursti7w�..benaa�en3..p� 1 INt "fiALS iiilYlrR BUILDER i� 9t0;2C10'd tiir Mt- S08:01 SSL.9- 6Rt -;n2 u3H awT_4 i2 J,�jn.LIGD :WO&4 LS 6© 0 ©02- 6t -tlNf f purchase from Villa Rosa for thoce and terms in this San -Luis Obispo, California, described as follows: Lot74 and all improvements on the lot, as shown on in the Records of San Luis Obispo County, California, on 71 of Maps, in the office of the county recorder of said cc of Covenants, conditions, and Restrictions recorded in County, California, on May 12, 1992 in Book 16 of Map and rights of way of record. Excepting therefrom the ninerals removed from beneath the above described props including oil or minerals taken therefrom by so- called sla under the above described premises, as reserved by Paci corporation in deed recorded June A, 1942 in Book 33'_ includes the house that Seller will construct on the lot sub and specifications for Plan C___, approved by Purchaser 0. the hor,'Docated at R11 Lawrence e Map entitled Tract No. 2066, recorded lay 12, 1992, in Book 16 of Maps, page ity. The lot is subject to the Declaration e Official Records of San Luis Obispo page 71 and all easements, dedications, serest in 5% of the value of all oil and :y through operation conducted thereon, ing wells which may be bottomed on or Coast Railway Company, a California Page 79 of Official Records. (The Lot tntially in accordance with Seller's plans Section '3 of this Deposit Receipt.) 3(b). Unless Villa Rosa accepts this Deposit Receipt by executio ' and delivery of a fully executed copy to Buyer, either in person or by mail at the address shown below Buyer's si i nature at the end of this Agreement within five (5) days following the date Buyer executes this Agreement, this oi Fer shall be void, the Deposit shall be returned to Buyer, and neither Villa Rosa nor Buyer shall have any further r ghts or obligations tinder this Agreement. This Agreement shall be effective on the later of (i) the date on which Villa Rosa executes and delivers thi (ii) the date of delivery of the written acceptance, by counteroffer submitted by the other party_ Delivery shall be effective upon personal delivery or, if by mail postmark. 3(c). Unless otherwise designated by Buyer's instructions to the to be escrow NOTE: THE MANNER OF TAKING TITLE MAY CONSEQUENCES. IF YOU HAVE ANY QUESTIONS RI PLEASE CONSULT AN ATTORNEY. 3(d). Buyer has read and understood the provisions contaim Agreement is an offer only, and will not become a binding contract Rosa's acceptance of a different offer from another Buyer. 1sksWWMvUt =1 %-md* 3..i;r 2 Receipt, or ter Villa Rosa or Buyer, of the final the next business day following the date of Holder, title shall vest as follows: determined in WE SIGN..WICANT LEGAL AND TAX ,R.DTNG THE MANNER OF TAKING TITLE, p in this Agreement and understands that this ntil accepted by Villa Rosa and is subject to ' la kLS:. WYEP BUILDER 0. 0 & PRICE AND TERMS 4. In consideration of the covenants and agreements hereof being strictly performed and kept by Villa Rosa, including the supplying of all labor, materials and services required by this agreement, and the construction and completion of the home, Buyer agrees to pay to Villa Rosa the sum of $_ 179,900.00 , plus any additional charges for changes a.rtd upgrades, in installments as follows; a. Deposit: Due when Agreement is signed by Buyer. b. Down Payment: $70,000 frrnt Buyer and $500.00 $70 000 $ 1,900.00 $ 6,900. is a silent second to the city of San Luis Obispo C. Final Payment Due: S 102,500..00 This payment representing the contract balance remaining at completion plus any additional charges resulting from changes or upgrades shall be due at the close of escrow after a "notice of completion" has been filed and prior to move -in. (See changes and upgrades) ESCROW 5. Concurrent with the execution of this Agreement by Villa Rosa, an escrow shall be opened at, and each payment shall be made payable to and delivered to, First American Title Insurance Company, Pismo Beach, California 93449 (Escrow Holder /Title Company). Buyer shall execute and deliver the escrow instructions to Escrow Holder within five (5) days of receipt. The escrow instructions shall provide that the initial down payment shall remain on deposit with the escrow holder until close of escrow. The escrow closing date (Closing Date), shall be approximately _Nine months after Villa Rosa acceptance of this Agreement. Buyer's signing of this section constitutes acceptance of conditions of Estimated Escrow closing date as stated in this paragraph, page 10, B. Completion of Construction and Page 11, C. Excusable Delays of Construction. INITIALS: BUYER 6. Failure to deliver any payment when due shall constitute a default under this Agreement. Villa Rosa reserves the right to stop work on the home until any and all payments due are received. FINANCING 7. The close of escrow is _ is not X contingent upon the sale of Buyer's current residence locate at 1S &sHONfE 31vi11amaalumdo�PD3.eg 3 INITIALS: BUYFRDJPb[BUU.DEit IraO/ 7 TM, Tnn 'A a-TTT TOL. C[O-M r1C10_cn�_rr1n _. _ . r, ..._ U 0 Villa Ro. ;hall have the right to continue to offer the Lot for sale to third parties. If Villa Rosa agrees to accept another written offer, Villa Rosa shall give Buyer notice of said intent outside of escrow. Buyer shall have seventy -two (72) hours from receipt of said written notification to remove this contingency or terminate this Agreement and cancel the pending escrow. 8. If Buyer intends to finance all or any part of the Purchase Price, Buyer shall apply for a loan from a lender acceptable to Villa Rosa, provide satisfactory evidence of that application to Villa Rosa within _10 days of Buyer's execution of this Agreement, and provide Villa Rosa -with Buyer's qualifying information and a loan commitment from the lender within 30 days of Buyer's - execution of this Agreement. Buyer has been informed that locking a loan rate will be at Buyer's risk. Buyer agrees to take all possible delays in completing construction into consideration and to make appropriate decisions and plans to protect Buyer's interest in,regard to Buyer's financing. 9. If Buyer does not intend to finance the Purchase Price, Buyer shall provide Villa Rosa with reasonably satisfactory evidence in Villa Ross's opinion of Buyer's ability to pay the Purchase Price and Buyer's share of closing costs within days of Buyer's execution of this Agreement. 10. If Buyer fails either to apply for a loan as required in this Section, or to provide satisfactory evidence of Buyer's ability to pay the Purchase Price and the share of closing costs as required in this Section, this Agreement shall automatically terminate, and Title Company shall proceed as set forth in paragraph 15 herein. 11. Should Buyer qualify for a loan commitment and subsequently fail to close escrow, Buyer shall be deemed in default under this Agreement and Villa Rosa shall be entitled proceed as provided in paragraph 15 to obtain the deposit and to sell the residence to a third party as provided in paragraph 15. 12. Villa Rosa may, from time to time, furnish Buyer with names of lenders as an accommodation only. Buyer acknowledges that Villa Rosa is not an agent of any lender, that Buyer is free to choose any other acceptable lender, and that Villa Rosa has not agreed to obtain any loan for Buyer. For purposes of this Section, any federal or state chartered bank or savings and loan association is considered an acceptable lender. FEES i 13. Escrow Holder shall, at Villa Rosa's discretion, disburse from the Deposit the amounts required to pay for credit reports, escrow services, preliminary reports, appraisals, and loan processing services. Villa Rosa's estimate of the total amount for those charges is as follows: Credit Report $_300.00 Escrow Services $_500.00 f Preliminary Report $ 300.00 " These are estimates only Appraisal f 100.00 Loan Processing Service $_100.00. Total $_1300.00; �sasrrot sww.A..„a000a..g 4 1MT L S:13UYI; j)HUILDER 0 0 Jf the escrow fails to close, for Orenson other than Buyer's default, or b. -...xe Escrow Estimated Closing date (see paragraph 5' page 3, Escrow), within fifteen (15) days after said closirrl; date. Villa Rosa shall order all of the money remitted by Buyer under the terms of this Agreement for acquisition of the Lot and home (Purchase Money), including all third party disbursements (excluding amounts subject to liquidated damages), to be refunded to Buyer. HOMEOWNERS ASSOCIATION 13(a), Buyer acknowledges and agrees that the Homeowner's Association has been established for the putpose of operating, maintaining and managing the common areas and facilities of the Property, and Buyer agrees to become a member of the Association and to abide by the bylaws. The proposed monthly maintenance and operational assessments to be paid to the Association by the owner of each home, which are in the approved budget, are based on Villa Rosa's best estimates. The budget may be revised annually. NOTICES 14. All notices to be given under this Agreement shall be in writing and sent by overnight courier or certified mail, return receipt requested, to the addresses adjacent to each party's signature below. Any notice sent shall be deemed delivered one (1) day after deposit with an overnight courier and three (3) business days after deposit in the United States Mail, properly addressed and postage prepaid. Each party's address may be changed by written notice to the other party; provided that no notice of a change of address shall be effective until actual receipt of the notice. CANCELLATION BY BUYERIDAMAGES 15. If Buyer fails to complete the purchase of the property because of a default by Buyer, Villa Rosa may pursue any remedy in law or equity that it may have against Buyer on a{runt of the default; provided, however, that by placing their initials here BUYERQAkL_ SELLER _ agree that: 1. 3500.00 , which sum does not exceed the money remitted by Buyer under the terms of this Agreement for the purchase of the home (Initial Deposit), shall constitute liquidated damages payable to Villa Rosa if Buyer fails to complete the purchase of the home because of it default by the Buyer. 2. The payment of such liquidated damages to Villa Rosa shall constitute the exclusive remedy of Villa Ross on account of any default by Buyer. 3. Liquidated damages shall be payable to Villn Rosa out of Buyer's Purchase Money Deposit according to the following procedures: (1) u & 3; FOMP s niuuoe.{toeJclPO3..gr Villa Rosa shall give written notice (Seller's Notice and Demand) by registered or certified mail or personal delivery, or by any other means authorized for service by Code of Civil Procedure Section 116,340, to escrow holder and to Buyer that Buyer is in default under this Agreement And that Villa Ro is demanding, that escrow holder remit S _500.00 from the Initi 1 Deposit to Villa Rosa as liquidated damages unless, within twenty .(20) day , 5 IN uAL.s: Bt1YERiXJ81J11,DER I� 9TC);90�'d HTT T8th 90e:01 2919- 68t 7-90e H3N H :1T4 TP _I.;-n11J _4'l:WnA4 acccri nnn;3_cT_Faar Buyer C� escrow holder [luyer's written oLntion to disbursement of the Initial Deposit as liquidated damages (Buyer's Objection). (2) If Buyer fails to give escrow holder Buyer's objection within the twenty (20) day period: (a) escrow holder shall promptly remit the amount demanded by Villa Rosa; and (b) Villa Rosa is released from any obligation to sell the property to Buyer. (3) If Buyer gives escrow holder Buyer's objection within the twenty (20) day period, then the determination as to whether Villa Rosa is entitled to the disbursement of the initial Deposit as liquidated damages, and every other cause of action that has arisen between Buyer and Villa Rosa under this Agreement, shall be submitted to binding arbitration in accordance with the commercial arbitration rules of the American Arbitration Association. Judgment upon the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof. (4) if the determination as to whether Villa Rosa is entitled to disbursement of the Initial Deposit as liquidated damages is referred to arbitration, any fee to initial the arbitration shall be paid by Villa Rosa, but the cost of arbitration, including the initial fee, shall ultimately be borne as determined by the arbitrator. ARBITRATION OF DISPUTES 16. It is agreed that any claim or dispute between the Buyer and the Builder, or Builder's broker, arising out of this agreement or relating in any way to the lot and house being purchased under this agreement shall be determined by submission to binding arbitration pursuant to the commercial arbitration rules of the American arbitration association. 17. NOTICE: by initialing in the space below you are agreeing to have any dispute arising out of the matters included in the arbitration of disputes provision decided by neutral arbitration as provided by California law and you are giving up any rights you might possess to have the dispute litigated in a court or jury trial. By initialing in the space below you are giving up your judicial rights to discovery and appeal, unless such rights are specifically included in the arbitration of disputes provision. If you refuse to submit to arbitration after agreeing to this provision, you may be compelled to arbitrate under the authority of the California code of civil procedure. Your agreement to this arbitration provision is voluntary. WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT DISPUTES ARISING OUT OF THE MATTERS INCLUDED IN TfIE ARBITRATION OF DISPUTES PROVISION T 1JTRAL ARBITRATION. BY PLACING THEIR INITIALS HERE (BUYER L BUILDER , THE PARTIES AGREE TO ARBITRATION. COSTS AND ATTORNEY FEES �sastin s+vtu�., ae�on�,,� 6 IMTIALS: BUYER BUILDER 0 0 . a o 18. If any action or proceeding in law or equity or any arbitration proceeding is instituted by either party for arr alleged breach of any obligation of the other party tinder this Agreement, the prevailing party, by judgment, arbitration, or settlement, in that action or proceeding shall be entitled to recover reasonable attorney fees, expert witness fees, and court costs as may be fixed by the court, jury, or arbitration panel. THIRD PARTY RIGHTS 19. Nothing in this Agreement, express or implied, is intended to confer upon any person, other- than the parties and their respective successors anti assigns, any rights or remedies under this Agreement. SEVERABILM 20. If any provision of this Agreement is, to any extent, held invalid or unenforceable, the remainder of this Agreement shall not be affected. WAIVERS 21 . No waiver or breach of any covenant or provision in this Agreement shall be deemed a waiver of any other covenant or provision, and no waiver shall be valid unless in writing and executed by the waiving party. No extension of time for performance of an obligation shall be deemed an extension of the time for performance of another obligation. COUNTERPARTS 22. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which taken together shall constitute the same instrument. PARAGRAPH HEADINGS 23. All headings are solely for convenience and are not a part of and shall not be used to interpret this .Deposit Receipt. The singular form shall include the plural and vice versa. This Deposit Receipt shall not be construed as if it had been prepared by one of the parties, but rather, as if both parties have prepared it. Unless otherwise indicated, all references to sections are to this Deposit Receipt. ADDITIONAL, DOCUMENTATION 24. Whenever requested by the other party, each party shall execute, acknowledge, and deliver any further documents necessary, expedient, or proper, to carry out the terms of this Agreement. Each party shall also do any other acts and execute, acknowledge, and deliver all documents requested to carry out the intent and purpose of this Agreement. GOVERNING LAW �sasrror.+r st�at.:m.�oea���.� 7 INITIALS: BUYER *BULL DER- 9T0/e00'd bTTT Teb S08 :01 57'C)q- AP - -CC1R H =IN A=1-1T-1 TD r--- - ....- 0 0 Q O 25.; This Agreement shall be governed and construed in accordance with California law. RIGHT TO CANCEL 26. Regardless of any provision to the contrary, if Buyer signed a reservation agreement under the authority of a short form preliminary public report, Buyer has a right, until midnight of the fifth (5th) calendar day following the day this Deposit Receipt was signed by Buyer, to cancel and rescind this Deposit Receipt and a right to the return of all money given toward the purchase. ENT ME AGREEMENT 27. This Agreement including its exhibits, is an integrated agreement which sets forth the terms and conditions under which said home will be constructed by Villa Rosa and the compensation to be paid by Buyer. All prior agreements or understandings between Villa Rosa and Buyer, whether written or oral, are superceded by this Agreement and shall have no force or effect. Buyer represents and warrants that neither Villa Rosa not any agent of Villa Rosa, including Villa Rosa's employees, independent contractors, real estate agents, real estate brokers, or any other person associated with Villa Rosa, has made any representations, promises and/or warranties, to Buyer that are different than or in addition to those expressly set forth in this Agreement. Buyer represents and warrants that Buyer has not executed this Agreement in reliance on any such promise, representation or warranty not contained in this Agreement. TIME 1S OF THE ESSENCE 28. Buyer acknowledges that time is of the essence in the performance of Buyer's responsibilities and obligations under this Agreement and that any delay in Buyer's performance will prejudice Villa Rosa. Any failure by Buyer to perform within the specified time periods delineated herein will constitute a breach of this Agreement. MISCELLANEOUS 29. The Villa Rosa shall not assign or transfer any rights and/or obligations under this contract without first obtaining Buyers consent in writing. 30. The Buyer shall not assign or transfer any rights and/or obligations under this Agreement without first obtaining Villa Rosa's consent in writing. 31 _ Buyer's lender, if any, is not it party to this Contract and. is not bound or obligated by or under any of hereof. 32. Insulation disclosure: Villa Rosa shall install, insulation in the home as follows: \sae3x0M9W u„ov *\" auu 133-W g MTL41S-. I;LTYCRWRJ AUILUER Lt- X11^) --- , irrr To" � -no•ni cC)Q- r- qi, -CnA HqA XgITa 12 l.!nitM:W06J 00:Ot 0002- 6t —NUf 0 0 (1) Exterior bedroom v0 will be insulated with Batt insulation thickness of inches, which, according to the manufacturer, will yield an R -value of 15; (2) Fxterior walls and other areas will be insulated with Batt insulation to a thickness of 4 inches, which, according to the manufacturer, will yield an R- value.of 15; (3) Ceilings in all areas will be insulated with Batt insulation to a thickness of 6 inches, which, according to the manufacturer, will yield an R -value of 19.. (4) Party walls both sides will be insulated with Batt insulation to a thickness of 3.5 inches, which, according to the manufacturer, will yield an R -value of 19. 33. Buyer understands and agrees that Villa Rosa reserves the right to lease units remaining unsold from time to time, on a short-term basis, pending sale and close of escrow on those units. AGENCY CONFIRMATION 34. The following agency relationship(s) are hereby confirmed for this transaction: LISTING AGENT: Century 21 Filer Realtors is the agent of the Villa Rosa exclusively; or _X_ both the .Buyer and Villa Rosa SELLING AGENT: is the agent of the Buyer exclusively; or the Villa Rosa exclusively; or both the Villa Rosa and Buycr. By signing this Agreement, Villa Rosa accepts and agrees to the above confirmation of agency relationships. Villa Rosa agrees to pay to Broker(s) compensation for services as follows: Payable: (a) on recordation of the deed or other evidence of title; or (b) if completion of We is completed by default of Villa Rosa, upon Villa Rosa's default, or (c) if completion of sale is prevented by Buyer, only if Villa Rosa collects damages from Buyer, by suit or otherwise, and then in an amount not less than one -half of the damages recovered, but not to exceed the above fee, after first deducting title and escrow expenses and the expenses of collection, if any. Villa Rosa shall execute and deliver an escrow instruction irrevocably assigning the compensation for service in an amount equal to the compensation agreed to above. In any action or proceeding between Broker(s) and Villa Rosa arising out of this Agreement, the prevailing party shall be entitled to reasonable attorney fees, costs and expert witness expenses. IN WITNESS WHEREOF, the said parties hereunto set their hands the day and year first above written. Date: t SA.SrrUD [S91n'1lvns� +anndo�PD3.e(t Villa Rosa: VILLA ROSA LLC a Californi Limited iability Company By �L.. WARREN SANDERS Date: F I f3 Iq ?_ X 11 1 9 INITIALS: BUMF -R h.UILDEA� 0 0 4/ EXnBIT A STANDARD POLICIES AND PROCEDURES Villa Rosa's Standard Policies and Procedures are part of the Agreement and must be carefully reviewed by Buyer before signing the Agreement. 1. PLANS AND SPECIFICATIONS Your home will be constructed and completed based on the Plans and Specifications for the home (hereinafter called the "plans ") and the Description of Materials. In the event of any inconsistency between the Plans and Specifications and the Description of Materials, the Description of Materials shall govern. A copy of the Plans and Specifications have already been or will be, as soon as completed by Villa Rosa, filed with the appropriate Building Department. Your home shall be constntcted in strict compliance with all governmental laws, ordinances, rules and regulations. The Villa Rosa shall apply for all required permits, paying all fees therefore, and all other fees required by such public authority. The purchase price set forth in this agreement includes all fees charged by the governmental entity. 2. MARKETING BROCHURES /MODELS Buyer acknowledges that Villa Rosa's marketing brochures and /or model homes, and other.homes previously constructed by Villa Rosa, may not represent exactly the home to be built for Buyer, which could be due to changes in design and components made after the construction of the models. 3. WHAT TO EXPECT DURING CONSTRUCTION A. Meetings With Design Consultant: You will be contacted by our staff to schedule two (2) meetings with our Design Consultant to take place within two (2) weeks from the date of this Agreement, each meeting to last approximately two (2) hours. (1) First Meeting: During the first meeting you will review the standard selections listed in the Description of Materials and be asked to make selections from three categories including 1) Standard Selections listed in the Description of Materials, 2) Standard upgrades listed in our upgrade brochure and 3) Any custom upgrades you desire that are not listed in our brochure. We will provide an extensive selection of items in our brochure that fit the needs and desires of most of our buyers. We will try to answer any questions you have regarding the materials to be used will be answered during these meetings. Please review the brochures provided to you prior to the first meeting and make your selections carefully.. (2) Second Meeting: During the second meeting you will be asked to make futal selections regarding paint, tile, light fixtures, and flooring. B. Completion of Construction: Villa Rosa agrees to commence work hereunder as soon as practicable after the building permit is issued by the appropriate governmental entity and to prosecute said work thereafter diligently and continuously to completion: Villa Rosa makes no representation as to the actual date of completion and shad not tsntsrroMn ,S1•il6taeteoedoll'D7.br � 1,0 INITIALS: A ; 1R0 UUMER 9 0 be responsible for any inconvblce, loss or expense incurred by Buy esulting from delays in construction completion. C. Excusable Delays: The time during which the Villa Rosa is delayed in said work by (a) the acts of Buyer or his agents or employees or those claiming under agreement with or grant from Buyer, or by (b) the Acts of God which Villa Rosa could not have reasonably foreseen and provided against, or by (c) stormy or inclement weather which necessarily delays the work or by (d) any strikes, boycotts or like obstructive actions by employees or labor organizations and which are beyond the control of Villa Rosa and which he cannot reasonably overcome or by (e) any changes, modifications or deviations from the plans shall be added to the time for completion by a fair and reasonable allowance. D. Damages During Construction: Villa Rosa shall not be responsible for any damage occasioned by the Buyer or Buyer's agents, Acts of God, earthquake, or other causes beyond the control of Villa Rosa, unless otherwise herein provided or unless he is obligated by the terms hereof to provide insurance against such hazard or hazards. In the event the home cannot be completed prior to the scheduled date for close of escrow, Buyer agrees to execute and deliver any and all escrow instructions reasonably required by escrow holder extending the close of escrow for a period of tip to six (6) months. E. Changes and Upgrades: (1) Villa Rosa reserves the right to change features, plans, materials and structural specifications without notice to Buyer, provided said changes result in a home constructed of equal quality. (2) if you desire a change during the course of construction, you will be requested to use the Written Request for Changes and Upgrades form (See Exhibit B). Please contact our Villa Rosa's Design Consultant to complete this form. Do not contact any of the subcontractors directly as this causes confusion and may result in additional work that is not performed or specified by Villa Rosa and resultant charges. (3) After final design selections are complete, there will be a service charge of $100.00 for each additional Change Order inade. Said processing fee is in addition to the cost of the change or modification requested. If design drawings or additional meetings with the Design Consultant are needed you will be charged for the additional services necessary to obtain an accurate estimate of the desired change or upgrade. We will provide you with two (2) copies of an itemized estimate for the change or upgrade requested so you can decide whether you want to proceed. You can either approve the additional charges or elect not to proceed with the change or upgrade. Some changes and upgrades may take longer to process and implement_ Items such as structural changes, increasing the size of walkways, patios, decks and driveways, and other items may not be available due to City restrictions. You will be asked to sign and return one copy to Villa Rosa's Design Consultant. Your prompt action will be required to avoid delays in completing your home and to avoid additional charges resulting from changes to work already completed while processing your change. The cost of changes and upgrades will be due and payable to the escrow bolder before work commences and special items are ordered. NOTE: Your selections and/or changes may be limited due to the stage of the construction of the home at the time of purch4se. �� ��HOMESwiIl+toubende+PD3. � O'rn ,DTrA'J +-iii TRb ZnR:nL 1 1 INITIALS: BUYERAf,{ amr)FR 992.9-68t7-q08 U38 83-1IA t2 �.8nvm:wOb3 19:0i 0002 -6t -tW • • F. Safety Standards: We knoCat you want to visit your new home as .;_t n as possible during construction, but there are safety standards that must be adhered to. We must insist on your full cooperation with the following safety standards to adhere to our insurance requirements and to avoid any accidents or injuries: (1) Feel fi-ee to visit your new home at any time to view the work in progress provided you do so from a safe distance.. (2) Do not enter the home at any time while workers are on the job site and work is in progress unless you are accompanied by Villa Rosa's representative. (3) Children are not allowed on the property at any time unless accompanied by you and held by the hand at all times. (4) Tf you are instructed to leave the property by a S &S Homes representative you must do so immediately. (5) We will not be responsible for any injuries or accidents that occur daring any visits to the home. 'Your decision to inspect the work in progress is at your own risk. 4. SCHEDULING A. Initial Walk -Thru: You will be invited to inspect the work with a representative when framing is nearing completion_ You will have an opportunity at that time to ask any questions regarding your new home. Any additional changes or additions requested at this time may delay completion of your home and extra charges. The date for this initial inspection is a firm date that must be met to avoid missing the small window of time between framing inspection and insWation/drywall. (Applicable only if home is purchased prior to start of construction.) B. Updated Building Schedule: An updated building schedule will be provided to you during the initial inspection. This will provide you with an opportunity to start planning for the move to your new residence. C. Thirty (30) Day Notice of Completion: You will be provided with a thirty (30) day notice of the expected completion of your new home. This will enable you to adjust your plans, give notices to utility companies for your existing residence and landlord or buyer, and make your moving arrangements. At that time we will also provide the names and telephone numbers of utility companies so you can set up your accounts.. Your new home must pass the final governmental inspection before the utilities can be turned on. D. Seven (7) Day Notice of Completion: You will be contacted one (1) week prior to the expected completion of your new home and the date of your walls through and new home orientation. You will be requested to contact our office and schedule a time for said orientation between the hours of 7:00 a.m. and 4 :00 p.m. E. New Home Orientation: During the walk through prior to occupancy, any items or conditions which Villa Rosa agrees to cot rect will be listed by the Villa .Rosa's representative and provided to you shortly thereafter and you will be asked to sign a copy confirming your agreement with its contents, The fact that gems minor soimli9ns may be required will not be used to delay the close of escrow provided the governmental entity issues a certificate of 12 INITIALS: B�UII.DER 910/2T0'a t-iiT T86 goami rSI.4- 68b -qOR BAN MAITa TP U4n114A1:1JnA4 Pn:kAt nnna- Ai -iiHr 0 0 . • , • 0 0 occupancy. Items mentioned will be scheduled for correction. S. DELIVERY OF ROME Move -In: We want the move to your new home to go as smoothly as possible. During the New Home Orientation you will be provided with information regarding the use and enjoyment of your home and Homeowner's Manual to answer most of your questions. When the home is completed and you have fulfilled your obligations under this Agreement in full and the escrow has closed, you will receive the keys to your new home. 6. RIGHT TO OCCUPY if Villa Rosa faithfully performs the obligations of this Contract on his part to be performed, he shall have the right to refuse to permit occupancy of the home by the Buyer or Buyer's agent until Villa Rosa has received the payment, if any, due hereunder at completion of construction. Buyer has been informed that no buildings, structures, house trailers, tents or any other structures other than the buildings and improvements constructed by Villa Rosa shall be allowed on the Lot at any time prior to close of escrow. Buyer shall not cause any construction activity to be commenced on the Lot prior to close of escrow. Buyer shall not place any personal property on the Lot or in the residence to be constructed prior to close of escrow. 7. AFTER YOU MOVE IN Although we utilize skilled subcontractors and materials suited for the construction of your new home, some minor imperfections are inevitable and must,be expected. A. Shrinkage and Cracking: Some shrinkage and cracking will occur in concrete walkways, driveways, slabs due to natural expansion and contraction of soil. Because of the drying process, and as a result of expansion and contraction, cracks will also form in the stucco, drywall, wood railing, and other internal and external construction materials. D. Colors And Textures: Due to the nature of wood, variations in color, grains and texture will be apparent in cabinets and other wood components of the home. Decorative metal gates, railings and exterior light fixtures will eventually fade and rust due to the close proximity to the ocean. Although Villa Rosa will use its best efforts to minimize such shrinkage, cracking, variations in color, grains and texture, Villa Rosa shall not be responsible for same and any touchup and/or replacement shall be at Buyer's expense. C. Utility .Location: Electrical transformers, clustered mailboxes, street lights, telephone equipment, television equipment including cable TV equipment, may be located on or near the Lot. Said equipment may not appear until later in the construction process. Buyer waives any and all claims against Villa Rosa resulting from the location of utility equipment unless it materially interferes with Buyer's use of or access to the Lot. D. Reassessment Notice: The Lot may be reassessed on the change of ownership. The reassessment will be effective as of the Closing Bate, and a supplemental tax bill may be sent to Buyer requiring the payment of additional �S�SKOT�skj enkoa4eV D3rgs 13 INITIALS: BUYER 0&4) MDE1t --` _ property taxes. It shall be Buyer's responsibility to pay this supplemental tax bill. If an impound account for the payment of property taxes is used, the amount of impound payments may increase. E. Buyer's Duty to Maintain :Rome:.Homes require a certain amount of care and that is your responsibility. Auer occupation by Buyer, Buyer is responsible for routine maintenance and upkeep. Villa Rosa is not obligated to make any repairs to the home that result from Buyer's failure to properly maintain the home. Any alteration of the finish grade after occupancy by Buyer may effect proper drainage and shall not be the responsibility of Villa Rosa. In the event you notice any problems that you believe should be brought to the attention of the Villa Rosa, it is important that you provide us with notice as soon as possible. All routine repair items will be scheduled at 30 days and at 1 year. Mk FannieMae ` BOB SHUMEY APPRAISALS Is Desktop Underwriter Quantitative Analvsis Annraisal Renort File No_ CM_7ti'20 THIS SUMMARY APPRAISAL REPORT IS INTENDED FOR USE BY THE LENDER /CLIENT FOR A MORTGAGE FINANCE TRANSACTION ONLY. Property Address 811 Lawrence Drive City San Luis Obispo State CA Zip Code 93401 _ Legal Description Lot 74 Tract 2066 COUnty San Luis Obispo__ Assessor's Parcel No. 053-198-043 Tax Year 99 10 R.E. Taxes $ Pron, 13 Special Assessments $ A • Borrower Will S Current Own-S & S Homes Occupant Owner lonant X Vacant Neighborhood or Project Name Vi 1 la Rosa Project Type I IIIUD IX Condominium HUA S 91.00 1MO Sales Price $ Date of Sale �epdjnCj Description/ $ amount of loan charges /concessions lobe paid by seller Standard Property rights appraised I X I Fee Simple I 11-easehold IMapileferenceE654 — Census Tract Note: Race and the racial composition of the neighborhood are not appraisal factors. Location • Built up • Growth rate X Urban X Over75 % flapid X Suburban 25-75% Stable Rural Under25% Slow Property values Demand /supply Marketing time X Innensina - Shortage. Under 3 ales. X X Stable In balance 3 G roes. Declining Over supply Over G roes. Single family housing I'IUCE AGE 5(()00) (VIC) l uw Condominium houninll I'I110E AGI 5 (000) Ilf a1g11ic.1 (yrr) 1 ow _ 5 220 lligh 25 Neighborltnod boundaries: See Attached Addendum. 3 0 fligh 35 Predominant :;:..... <: `: Predominant " 280 185 15 _151 Dimensions Irregular Site area 1200+ —SF Shape Irregular Specific zoning classification and description — , D. Med - Dens ity Residen ' al Zoning compliance Fx—] Legal E Legal nonconforming (Grandfathered use) Illegal, attach description No zoning Highest and best use of subject property as improved (or as proposed per plans and specifications): X Present use Other use, attach description. Utilities Public Other Public Other Electricity X❑ Water X Gas X Sanitary Sewer X Off -site Improvements Type Public Private Street Asphalt X 1 H Alley ne Are there any apparent adverse site conditions (easements, encroachments, special assessments, slide areas, etc.)? Yes X No If Yes, attach description. Source(s) used for physical characteristics of property: Interior and exterior inspection X Exterior inspection from street Previous appraisal files MLS Assessment and tax records Prior inspection Property owner X Other (Describe): Builder No. of Stories 2 Type (Det. /Att.) Att. Exterior Walls StUCCO Roof SurfaceCMID. Shncf Manufactured Housing Yes I X rNo Does the property generally conform to the neighborhood in terms of style, condition, and construction materials? X I Yes No If No, attach description. ■ Are throe any apparent physical deficiencies or conditions that would affect the SOL111(111ess Or structural integrity of the improvements or the livability of the property? Yes X No If Yes, attach description. Are there any apparent adverse environmental conditions (hazardous wastes, toxic substances, etc.) present in the improvements, on the site, or in the immediate vicinity of the subject property? Dyes X No If Yes, attach description. I researched the subject market area for comparable listings and sales that are the most similar and proximate to the subject property. My research revealed a total of 8 sales ranging in sales price from $_170 000 to $ 240,000 My research revealed a total of 6 listings ranging in list price from $ 179! 000 to S 239. 000 The analysis of the comparable sales below reflects market reaction to significant variations between the sales and the subject property. ITEM I SUBJECT SALE 1 SALE 2 SALE 3 811 Lawrence Drive AddressSan LUiS ObiSpo, CA 3059 Garibaldi SLO, 053 -197 -001 3057 Garibaldi SLO, 053-197-002 813 Lawrence Drive 3- 98- Proximity to Subject I Same QpWlex Same om x or Sales Price $ 179,900 $ 204.00 1 $ 200,000 is Price /Gross Liv. Area $ 123.73 Z $ 128.63 01 13 2 .19 ZI 36.78 Pl Dete/Verification Sources Pr Vrooman #75494 CMDC/VrooTnan #75457 o an VALUE ADJUSTMENTS DESCRIPTION DESCRIPTION + H $Adjustment DESCRIPTION +H $Adjustment DESCRIPTION t 14 $Adjustment Sales or Financing Concessions C.1 Date of Sale/Time end ' mg 10 - -99 0- - - - Location r Urban Urban Urban Site 1300 + -SF 700 + - F 1200+- F 1200+-SF View Avg. Neicrb. Avcr. Neigh. Avg. Neigh. Avcr. Neigh. Design (Style) Conv. Conv. Conv. Conv. Actual Age (Yrs.) 1999 BUilt 1999 Condition New New r Above Grade Room Count r Gross Living Area Total Bdrnls Baths Total I Bdrms Baths —6.500 Total Bdrms I Baths —3 Q00 Total Bdrms Baths + 5 1 3 12.5 1 3 12.5 2, 2 1. 4 54 Sq. Ft. I 5586 Sq. Ft. 1 513 Sq. Ft. Sq. Ft. Basement & Finished Rooms Below Grade None None None None Garage /Carport I Car Gar 2 Car Gar — Ga —2.500 1 Car Gar -Int -10,000 t s. Net. Adj. (total) I I + 1X I— $ — 000 + X — $ —15 500- X + - S 7,000 Adjusted Sales Price of Comparables $ 1 0 $ 184,500 $ Date of Prior Sale New Const. ' New Construction ' New Construction ew Construction o Price of Prior Sale $ $ $ $ Analysis of any Current agreement of sale, option, or listing of the subject property and analysis of the prior sales of subject and comparables: Summary of sales comparison arid value conclusion: See Attached Addendum. The appraisal 1s made I •' ..as Is.., LJ Subject to completion per plans arid specifications OII the basis Of a hypothetical condition that ilia iniplovenl(.•I1ts have been completed, or n subject to the following repairs alterations or conditions: RGRFII (1N eat v I FY- rcnlrin o11C0CrTi NI roan. ­11 - — - -I .. -- — - ­­ — "" IJ -­ 111- 1 11— — uuvn nvarci. r rUrV, 1 tJ I IMA It I HL MAHKE I VALUE, AS DEFINED, OF THE REAL PROPERI Y THAT IS THE SUBJECT OF THIS REPORT TO BE $ 185, 000 AS OF 1 -18 -00 form wan reproduced by United Systems Software Company 1800) 969.8727 Paee 1 of 3 10 cN. • BOB SHUMEY APPRAISALS • Desktop Underwriter Quantitative Analysis Appraisal Report File No. SM -2630 Project information for PUDs (if, applicable) - - Is the developer/buildor in control of the Home Owners' Association (HOA)7 Yes X No Provide the following information for PUDs only if the developer/builder is in control of the HOA and the subject property is an attached dwelling unit: Total number of phases 3 Total number of units 91 Total number of units sold Total number of units rented 4 Total number of units for sale 2 Data Source(s) Builder Was the project created by the conversion of existing buildings into a PUD? Dyes W No If yes, date of conversion: Does the project contain any multi - dwelling units? ❑Yes No Data Source: Are the common elements completed? D Yas a No If No, dascribo status of completion: Are any common elements leasod to or by tho Homo Owners' Association? Yes ONO If yes, attach addondrnn describing rental teens arid nplions. Describe common elements and recreational facilities: Greenbelt, Exterior Building. Playground and-MB4 Area Maintenance, Fire Insurance, Project Information for Condominiums (if applicable) • - Is the developer /builder in control of the Homo Owners' Association (HOA)7 1J Yes Li No Provide the following information for all Condominium Projects: Total number of phases Total number of units Total number of units sold Total number of units rented Total number of units for sale Data Source(s) Was the project created by the conversion of existing buildings into a condominium? Yes. No If yes, date of conversion: Projoct Type: Primary Residence Second hlonro or Itocroational now or Townhouse Gardon r Midriso F] I lighriso LJ ° Condition of the project, quality of construction, unit mix, etc.: • Are the common elements completed? U Yes U No If No, describe status of completion: Are any common elements leased to or by the Home Owners' Association? Li Yes Li No If yes, attach addendum describing rental terms and options. Describe common elements and recreational facilities: PURPOSE OF APPRAISAL: The purpose of this appraisal is to estimate the market value of the real property that is the subject of this report based on a quantitative sales comparison analysis for use in a mortgage finance transaction. DEFINITION OF MARKET VALUE: The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeably and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under Conditions whereby: (1) buyer and seller are typically motivated; (2) both parties are well informed or well advised, and each acting in what he considers his own best interest; (3) a reasonable time is allowed for exposure in the open market; (4) payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and (5) the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions` granted by anyone associated with the sale. `Adjustments to the comparables must be made for special or creative financing or sales concessions. No adjustments are necessary for those costs which are normally paid by sellers as a result of tradition or law in a market area; these costs are readily identifiable since the seller pays these costs in virtually all sales transactions. Special or creative financing adjustments call be made to the comparable property by comparisons to financing terms offered by a third party institutional lender that is not already involved in the property or transaction. Any adjustment should not be calculated on a mechanical dollar for dollar cost of the financing or concession but the dollar amount of any adjustment should approximate the market's reaction to the financing or concessions based on the appraiser's judgment. STATEMENT OF LIMITING CONDITIONS AND APPRAISER'S CERTIFICATION CONTINGENT AND LIMITING CONDITIONS: The appraiser's certification that appears in the appraisal report is subject to the following conditions: 1. The appraiser will not be responsible for matters of a legal nature that affect either the property being appraised or the title to it. The appraiser assumes that the title is good and marketable and, therefore, will not render any opinions about the title. The property is appraised on the basis of being under responsible ownership. 2. The appraiser has provided any required sketch in the appraisal report to show approximate dimensions of the improvements and the sketch is included only to assist the reader of the report in visualizing the property and understanding the appraiser's determination of its size. 3. The appraiser will not give testimony or appear in court because he or she made an appraisal of the property in question, unless specific arrangements to do so have been made beforehand. 4. The appraiser has noted in the appraisal report any adverse conditions (such as, but not limited to, needed repairs, the presence of hazardous wastes, toxic substances, etc.) observed during the inspection of the subject property or that he or she became aware of during the normal research involved in performing the appraisal. Unless otherwise stated in the appraisal report, the appraiser has no knowledge of any hidden or unapparent conditions of the property or adverse environmental conditions (including the presence of hazardous wastes, toxic substances, etc.) that would make the property more or less valuable, and has assumed that there are no such conditions and makes no guarantees or warranties, expressed or implied, regarding the condition of the property. The appraiser will not be responsible for any such conditions that do exist or for any engineering or testing that might be required to discover whether such conditions exist. Because the appraiser is not an expert in the field of environmental hazards, the appraisal report must not be considered as an environment assessment of the property. 5. The appraiser obtained the information. estimates, and opinions that were expressed in the appraisal report from sources that he or she considers to be reliable and believes them to be true and correct. The appraiser does not assume responsibility for the accuracy of such items that were furnished by other parties. 6. The appraiser will not disclose contents of the appraisal report except as provided for in the Uniform Standards of Professional Appraisal Practice. 7. The appraiser must provide his or tier prior written consent before the lender /client specified in the appraisal report can distribute the appraisal report (including conclusions about the property value, the appraiser's identity and professional designations, and references to any professional appraisal organizations or the firm with which the appraiser is associated) to anyone other than the borrower; the mortgagee or its successors and assigns; the mortgage insurer; consultants; professional appraisal organizations; any state or federally approved financial institution; or any department, agency, or iris trumentality of the United States or any state or the District of Columbia; except that the lender /client may distribute the report to data collection or reporting service(s) without having to obtain the appraiser's prior written consent. The appraiser's written consent and approval must also be obtained before the appraisal can be conveyed by anyone to the public through advertising, public relations, news, sales, or other media. 8. The appraiser has based his or her appraisal report and valuation conclusion for an appraisal that is subject to completion per plans and specifications on the basis of a hypothetical condition that the improvements have been completed. 9. The appraiser has based his or her appraisal report and valuation conclusion for an appraisal that is subject to cornpletion, repairs, or alterations on the assumption that completion of the improvements will be performed in a workmanlike manner. 7hie loan waa reerodu —1 by Ilnirnd Svnr.n,n Cnu„„.,. r..... 18001 868 87 7 ) P V 2 F age 2 of 3 10 CH. Fennfe Mae ",m 7r1riF 0.09 • BOB SNUMEY APPRAISALS DesktoD Underwriter Quantitative Analvsis ADDraisal Resort APPRAISER'S CERTIFICATION: The Appraiser certifies and agrees that: File No. SM- 1. 1 performed this appraisal by (1) personally inspecting from the street the subject property and neighborhood and each of the comparable sales (unless I have otherwise indicated in this report that I also inspected the interior of the subioct property); (2) collecting, confirming, and analyzing data from reliable public and /or private sources; and (3) reporting the results of my inspection and analysis in this summary appraisal report. I further certify that I have adequate information about the physical characlerislics of the subject property and the comparable sales to develop this appraisal. 2. 1 have researched and analyzed the comparable sales and offerings /listings in the subject market area and have reported the comparable sates in this report that are the best available for the subject property. I further certify that adequate comparable market data exists in the general market area to develop a reliable sales comparison analysis for the subject property. 3. 1 have taken into consideration the factors that have an impact on value in my development of the estimate of market value in the appraisal report. I further certify that I have noted any apparent or known adverse conditions in the subject improvements, on the subject site, or on any site within the immediate vicinity of the subject property of which I am aware, have considered these adverse conditions in my analysis of the property value to the extent that I had market evidence to support them, and have commented about the effect of the adverse conditions on the marketability of the subject property. I have riot knowingly withheld any significant information from the appraisal report and I believe, to the best of my knowledge, that all statements and information in the appraisal report are true and correct. 4. 1 stated in the appraisal report only my own personal, unbiased, and professional analysis, opinions, and conclusions, which are subject only to the contingent and limiting conditions specified in this form. 5. 1 have no present or prospective interest in the property that is the subject of this report, and I have no present or prospective personal interest or bias with respect to the participants in the transaction. I did riot base, either partially or completely, my analysis and /or the estimate of market value in the appraisal report on the race, color, religion, sex, age, marital status, handicap, familial status, or national origin of either the prospective owners or occupants of the subject property or of the present owners or (occupants of the properties in the vicinity of the subject property or on any other basis prohibited by law. 6. 1 have no present or contemplated future interest in the subject property, and neither my current or future employment nor my compensation for performing this appraisal is contingent on the appraised value of the property. 7. 1 was not required to report a predetermined value or direction in value that favors the cause of the client or any related party, the amount of the value estimate, the attainment of a specific result, or the occurrence of a subsequent event in order to receive my compensation and /or employment for performing the appraisal. I did riot base the appraisal report on a requested minimum valuation, a specific valuation, or the need to approve a specific mortgage loan. 8. 1 estimated the market value of the real property that is the subject of this report based on the sales comparison approach to value. 1 further certify that I considered the cost and income approaches to value, but, through mutual agreement with the client, did not develop them, unless I have noted otherwise in this report. 9. 1 performed this appraisal as a limited appraisal, subject to the Departure Provision of the Uniform Standards of Professional Appraisal Practice that were adopted and promulgated by the Appraisal Standards Board of The Appraisal Foundation and that were in place as of the effective date of the appraisal (unless I have otherwise indicated in this report that the appraisal is a complete appraisal, in which case, the Departure Provision does not apply). 10. 1 acknowledge that an estimate of a reasonable time for exposure in the open market is a condition in the definition of market value. The exposure time associated with the estimate of market value for the subject property is consistent with the marketing time noted in the Neighborhood section of this report. The marketing period concluded for the subject property at the estimated market value is also consistent with the marketing time noted in the Neighborhood section. 11. 1 personally prepared all conclusions and opinions about the real estate that were set forth in the appraisal report. I further certify that no one provided significant professional assistance to me in the development of this appraisal. SUPERVISORY APPRAISER'S CERTIFICATION: If a supervisory appraiser signed the appraisal report, he or she certifies and agrees that: I directly supervise the appraiser who prepared the appraisal report, have examined the appraisal report for compliance with the Uniform Standards of Professional Appraisal Practice, agree with the statements and conclusions of the appraiser, agree to be bound by the appraiser's certifications numbered 5 through 7 above, and am taking full responsibility for the appraisal and the appraisal report. APPRAISER Signature: Name: _ Company Name: gobert Shutney Company Address: 2.00 E. Fesler .Santa Maria, CA 93456 Date of Report /Signature: State Certification b: or State License a: AL005415 State: ( A SUPERVISORY APPRAISER (ONLY IF REQUIRED): Signature: Name: Company Name: — Company Address: Date of Report /Signature: State Certification N: _ or State License a: State: Expiration Date of Certification or License: _9 -28 -2000 Expiration Date of Certification or License:. ADDRESS OF PROPERTY APPRAISED: SUPERVISORY APPRAISER: _811 Lawrence Drive San Luis Obispo, CA 93401 SUBJECT PROPERTY Did not inspect subject property APPRAISED VALUE OF SUBJECT PROPERTY $ 185, 000 Did inspect exterior of subject property from street -EFFECTIVE DATE OF APPRAISAL /INSPECTION 1 -18 -00 N Did inspect interior and exterior of subject property .ENDER /CLIENT: COMPARABLE SALES Jame: Did not inspect exterior of comparable sales from street ;ompany Name: American City mortgage HDid inspect exterior of comparable sales from street :ompany Address: 129 N. Halcyon Rd. orm was reproduced by United Systems Software Company (8001 989.8727 Pape 3 of 3 10 CH. Fannie Mae Borrower /Client Williams Address 811 Lawrence Drive City San Luis Obispo County San Luis Obispo state CA Zip Code 93401 COMMENTS ON NEIGHBORHOOD: Neighborhood is bordered by Tank Farm Road on the south, US HWY 101 on the west and north and Johnson Avenue on the east. Subject is located in a 91 unit PUD project known as Villa Rosa. The first phase of this project consisting of 31 units was built in 1993. Due to soft real estate market,development of the balance of the project was delayed. The remaining project was subsequently sold to current builder in 1998. The immediate area contains a variety of improvements ranging from industrial and commercial to residential. Schools, shopping and other amenities are located within a 2 mile radius. The project contains 5 various size models ranging from 1148 SF to 1586 SF. It has had good market acceptance with all but two units sold. COMMENTS ON COMPARISONS: Their were no recent sales of similar size models. These are considered the 3 best and most recent comparable sales available. Comparables 1 and 2 are both superior in gross living area. Both included internal upgrades and 2 car garages. Comparable 3 is inferior in room count and gross living area. Upgrades and parking facilities are similar. Gross living area adjustments are based on $50.00 per SF difference. Room count is included in gross living area adjustments. This is intended to be a limited summary appraisal report in conformity with USPAP. An interior inspection and cost approach were not analyzed. This report is intended for use by American City Mortgage. Use of this report by others is not intended by the appraiser. The intended use is for financing purpose only. This report is not intended for any other use. �obert ShtYme`y, Appraiser This form was reproduced by United Systems Software Company (800) 969 -8727 buy - Lj p "' i• (j a �. •b / /V{ /\ j tr Ci U � r ll � 'Oo p• � f.� O U �, rT G T V 7 iL a D / h -a N O 07 a / } m k t rn b Vt w E Q7 w rim 4 a m :111 121 117 •� (h LLtl � 4 � O a �S p nr� ° ` �`. tt N K �Y 4 � �Y ti x 17 �KD K=1 © rb� h o 1! a b c7 10� H o__ u o _ - - - - - - iwT_ri4-- — -- - - - - m2"d - - ---- -_ - ^ -^ __ GARIBALD! :AVE. m _ovi Ul t" �o ti b ca BJECT PHOTOGRAPH ADDENDI Address 811 Lawrence Drive -- cify San Luis Obispo county San Luis Obispo slap! CA _ zil, cry m 93401 rican City Mor This form wns by Unlled Svsrcma Sollwn, Comvnnv 19001 969 -8727 FRONT OF SUBJECT PROPERTY REAR OF SUBJECT PROPERTY STREET SCENE CO.- _flARABLE SALES PHOTO ADDEN_ JM Borrower /Client Williams Address 811 Lawrence Drive Cary San Luis Obispo county San Luis Obispo stale CA Zip Co(fo 93401 Lender /Client American City Mortgage This farm was -n ndue.d ho I1n4n 4 e­- COMPARABLE SALE 111 3059 Garibaldi SLO, 053 -197 -001 Sale Date: 10 -21 -99 Sale Price: $204,000 COMPARABLE SALE 42 3057 Garibaldi SLO, 053 - 197 -002 Sale Date: 10 -21 -99 Sale Price: $200,000 COMPARABLE SALE #3 813 Lawrence Drive SLO, 053 - 198 -042 Sale Date: 6 -4 -99 Sale Price: $ 180,000 Y; fill � iii -- � .. ®®® ■�� f � 11111111 �fllsill�i�l�ll�lllllllll�Ir' :,�.`. 4 m +4 = r This farm was -n ndue.d ho I1n4n 4 e­- COMPARABLE SALE 111 3059 Garibaldi SLO, 053 -197 -001 Sale Date: 10 -21 -99 Sale Price: $204,000 COMPARABLE SALE 42 3057 Garibaldi SLO, 053 - 197 -002 Sale Date: 10 -21 -99 Sale Price: $200,000 COMPARABLE SALE #3 813 Lawrence Drive SLO, 053 - 198 -042 Sale Date: 6 -4 -99 Sale Price: $ 180,000 BOB SHUMEY t -,EAL ESTATE APPRAISERS APPRAISAL COMMENTS - NOT ALL COMMENTS INCLUDED ON THIS PAGE MAY BE APPLICABLE TO THIS APPRAISAL. The San Luis Obispo County area and Northern Santa Barbara County area have a wide variety of Single Family Residences not in standard tract situations; therefore, the standard URAR form is sometimes not sufficient for comment. The following comments will attempt to explain any unusual situations in this area. SITE COMMENTS Site Values: In the semi -rural areas, there is a wide variety of site sizes, shape, topography, and view arnenities. There are virtually no two sites that are identical in all features; therefore, the use of a true paired sales analysis is impossible. In the cost approach and market analysis, the land values and adjustments are based on the sales of sites as similar as possible to the subject. These sites may be located within an area with a radius as large as five to twenty miles. Due to the fact that many of the homes in serni -rural areas are located on acreage parcels, it is common for the site values to represent 20% to 80% of the total value of the property. The roads in semi -rural area are typically asphalt paved or all- weather surfaced, with all- weather roads being acceptable in this market.. While many of the streets are publicly maintained, there are also numerous roads which are privately maintained, but are public streets. Any market discount for a home being on an unpaved or privately maintained street is typically reflected in the site value. Wells & Septic: Most single family residences in semi -rural areas are not served by the public water and sewer systems; therefore, wells and septic systems are typical for the area. COST APPROACH Construction Cost: The Marshall & Swift Residential Cost Handbook is typically used as a reference for construction cost and depreciation estimates in most single family residences. In larger custom homes and larger projects, a combination of the builder's actual cost and Marshall & Swift may be utilized. MARKET ANALYSIS Standard Criteria: Unless specifically stated in the appraisal report, the subject property has not sold or been listed for sales within the past twelve months. Every effort is made to find sales of homes that have occurred (a) within the past six months, (b) are within the general area of the subject property, and (c) do not generally require a net adjustment in excess of 15 %. (a) In San Luis Obispo County and Northern Santa Barbara County there is typically not enough market activity in a six month period to generate an adequate number of sales where all features are similar enough to fit the standard criteria for comparable sales. In order to obtain additional comparable sales in the general area of the subject, the marketing time is extended to include sales over six months old. (b) As is often the case, the comparable that is considered to be the best indicator might easily be out of the general subject area. In these cases the comparable is used if it is the opinion of the appraiser that they are in competing residential areas. (c) In some cases, the best comparable, as far as similarity of residences, might be on sites of significantly different sizes. One might be on a one acre site and the other on a significantly larger site. The adjustment for the site values will often cause the net adjustment to be in excess of 15 %. Data Source: In the typical appraisal, at least two of the following will be used as data sources for a comparable sale. (a) REC# - This term is used when a portion of the information regarding the sale was obtained from the public records at the County Recorder's Office. This is the usual method of confirming the closing date of the sale. (b) CMDC - California Market Data Cooperative - This term is used when the information regarding this sale was taken from this source of information. (c) MLS - This term is used when a portion of the information was obtained from the Multiple Listing Service. (d) Files - This term is used when the information on the sale is based on appraisal files in the appraisers office. (e) Broker This term is used when the broker or salesperson involved in the sale was consulted in obtaining details of the sale being used. (f) Seller /Buyer- These terms are used when the grantor or grantee were consulted in confirming the details of the sale being used. (g) Appraiser - This term is used when the information regarding the sale was obtained from the appraiser who completed the appraisal on the sale being used as a comparable. (h) Lender - This term refers to banking institutions, mortgage companies, savings & loans, and private lenders who have been consulted regarding details of the loan on the sale being used. Terms of Sale: Conventional, FHA, VA, and Seller financed sales are common in most of the areas. The majority of the sales involve conventional financing where there are no sales concessions on the part of the seller and the seller receives all cash in the transaction. In the majority of these types of sales the exact financing terms, ie., interest rate and loan term, are not made public. Therefore, information is typically not readily available to the appraiser. Whenever there are sales where the seller paid any of the borrower's loan fees or closing costs and facts are made known to me, the proper adjustments are made. In the attached appraisal, the term (Conv.) means that this was a conventional loan that was not government insured and that to the best of my knowledge the seller did not pay any of the buyer's loan fees. The term (CTNL) means Cash to New Loan. The seller received all cash for his equity and there were no recorded loans from the buyer to the seller as part of the market transaction. The term (CTEL) Cash to Existing Loan or Assumption, means the seller received all cash and the buyer assumed an existing loan. Seller carried financing means the seller has carried back a Trust Deed on the property. An adjustment may be made if this rate /agreement is better than current lending institution terms. The fact that the subject property lies near or within the Diablo Canyon Nuclear Power Plant Emergency Response zone has no adverse effect on real estate value. The fact that San Luis Obispo County has been designated as a seismic special studies zone has no adverse effect on subject property. In this appraisal assignment, the existence of potentially hazardous material used in the construction or maintenance of the building, such as the presence of urea formaldehyde foam insulation, radon gas, and /or existence of toxic waste, which may or may not be present on the property, has not been considered. The appraiser is not qualified to detect such substances. We urge the client to retain an expert in this field if desired. 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 39 40 41 42 43 44 45 46 RECORDING REQUESTED BY: City of San Luis Obispo WHEN RECORDED MAIL TO: Community Development Department City of San Luis Obispo 990 Palm Street San Luis Obispo, CA 93401 -3249 VILLA ROSA PROMISSORY NOTE SECURED BY DEED OF TRUST - Date: FPhr„arV 1 f 2000 At San Luis Obispo, California FOR VALUE RECEIVED, Douglas Rick Williams ( "Maker ") promises to pay to the order of the City of San Luis Obispo ( "City ") at 990 Palm Street, San Luis Obispo, California 93401 -3249 or such other address as City may from time to time designate, the sum of six Thousand Nine Hundred Dollars ($ 6,900. 0 0 ), according to the terms set forth herein. This Note shall accrue interest, compounded annually, at an annual rate of 4.5 percentage points added to the 11`h District Cost of Funds, as published by the Federal Home Loan Bank Board, amortized over 30 years. The Loan shall be amortized over thirty years, with monthly payments.of principal and interest due and payable to the City on the first day of each month unless waived or forgiven, as set forth below. 1. Security for Note. This Note is secured by a deed of trust of even. date herewith (the "Deed of Trust ") executed by Maker, as Trustor, and nanung City as Beneficiary, covering certain real property ( "the Property ") owned by Maker in the County of San Luis Obispo, State of California, which Property is described in Exhibit A, attached hereto. 2. Incorporation of Affordable Housing Agreement. This Note. and the Deed of Trust are executed and delivered pursuant to that certain "Affordable Housing Agreement" ( "Housing Agreement ") recorded in the County of San Luis Obispo on March 18, 1999 between City and Villa Rosa LLC, A California Corporation, regarding affordable housing requirements applying to the Villa Rosa Planned Residential Development, as amended by San Luis Obispo City Council in Ordinance 1318 (1997 Series). Pursuant to the Housing Agreement, Maker is to live at the Property. Consequently, this Note is subject to section 711.5 of the California Civil Code, which grants to City the authority to accelerate all amounts due under this Note if any subsequent transfer of the Property at any time does not comply with the provisions of the Housing Agreement or Deed of Trust. The Housing Agreement is incorporated herein by this reference as though set forth in its entirety and attached hereto as Exhibit B. 3. City's Right of First Refusal. Upon resale, 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 then current Villa Rosa Affordable Housing Promissory Note Page 2 -1 appraised value. The consideration for the City's right of first refusal shall consist of 1 percent of 2 the remaining City loan balance. The balance of the City loan remaining after deducting this 1 3 percent of the loan balance shall be credited toward the purchase price if the City chooses to ­ 4 exercise the purchase option. The provisions of this section shall not impair the rights of a first 5 mortgage lender secured by a recorded deed of trust. The purchase money lender shall have a 6 higher priority than the City's loan. The City's security shall be prioritized as a second mortgage. 7 This first priority applies to the purchase money lender's assignee or successor in interest, to: 8 9 i. Foreclose on the subject property pursuant to the remedies permitted by law and 10 written in a recorded contract or deed of trust; or 11' 12 ii. . Accept a deed of trust or assignment to the extent of the value of the unpaid first 13 mortgage to the current market value in lieu of foreclosure in the event of default by 14 a trustor; or 15 _ 16 iii. Sell the property to any person at a fair market value price subsequent to 17 exercising its rights under the deed of trust. Any value in excess of the unpaid 18 mortgage and costs of sale administration shall be used to satisfy the City loan. In no 19 case may a first mortgage lender, exercising foreclosure assignment in -lieu of 20 foreclosure or sale, obtain value or rights to value greater than the value of the, 21 outstanding indebtedness on the first mortgage at the time of the debt clearing 22 action. 23 24 The following types of transfers shall remain subject to the requirements of the City's loan and 25 right of first refusal: transfer by gift, devise, or inheritance to the owner's spouse; transfer to a 26 surviving joint tenant; transfer to a spouse as part of divorce or dissolution proceedings; or 27 acquisition in conjunction with a marriage. 28 29 4. Due on Transfer. In the event Maker sells, leases, rents or otherwise transfers the 30 Property to any person or entity other than an "eligible household" (as such term is defined in the 31 Housing Agreement), then the Principal of and accrued interest on the Loan shall be immediately 32 due and payable to the City as set forth in the Deed of Trust in favor of City recorded 33 simultaneously herewith as a second deed of trust subordinate to the deed of trust of the first 3 4 mortgage lender on the Property. 35 36 5. Waiver of Principal and Interest. City waives timely payment of the Principal of and 37 interest on the Loan for such time as Maker, or subsequent buyer determined by City or its 38 Housing Authority to be an eligible househol s as the owner and occupant of the 39 Property as Maker's principal residence until % ��� , 20 40 41 Villa Rosa Affordable Housing Promissory Note Page 3 1 6. Forgiveness of Loan.. City will forgive the repayment of the outstanding Principal of the 2 Loan and all interest thereon as long as Maker, or subsequent buyer determined by City or its 3 Housing Authority to be an eligible household, reFnain-s as the owner and occupant of the 4 Property as Maker's principal residence until , 20_ 5 6 7. Prepayment. This Note may be prepaid in whole or in part. 7 8- 8. Payment. The amount due under this Note shall be paid without the necessity for notice 9 or demand by City. 10 11 9. Payment Amount. The amount due under this Note shall be paid from the net proceeds 12 as a result of any transfer. Net proceeds is the sales price minus any loans or liens that are senior 13 to this Note and minus closing costs. 14 15 10. Default Defined. In addition to other defaults referred to in this Note and the Deed of 16 Trust, it shall be a default under this Note if Maker fails to make any payment or perform any 17 obligation under or in connection with (a) this Note, (b) the Deed of Trust, or (c) any other note, 18 trust deed or other obligation of Maker relating to the Property, including but not limited to the 19 Housing Agreement, or secured by all or any part of the Property, whether junior or senior to this 20 Note, and if such failure is not cured within such time as may be permitted by the obligation or the 21 obligee. 22 23 11. Options of City upon Default. Upon the occurrence of a default, City shall have the 24 option, without further notice or demand: 25 26 (a) To declare the Note to be immediately due and payable; 27 28 (b) If the default relates to a transfer of the Property, to bring an action at law or in 29 equity to require Maker and the proposed transferee to terminate and/or rescind the sales 30 contract or lease and/or to declare the transfer void, notwithstanding that!the transfer may 31 have closed and become final as between Maker and the transferee; or 32 33 (c) To pursue any other remedy available under this Note or the Deed of Trust, or 34 at law or in equity or under any other agreement, instrument or document entered into by 35 Maker and City, including but not limited to the Housing Agreement. 36 37 12. Failure to Exercise Options. Failure to exercise any such option upon the occurrence of 38 one or more events of default shall not constitute a waiver of City's right to exercise any such 39 option at a later time. 40 Villa Rosa Affordable Housing Promissory Note Page 4 1 13. Costs of Enforcement and Collection. If Maker defaults under this Note, Maker shall 2 pay all costs of enforcement and collection, including, but not limited to, costs and attorney's fees, 3 including reasonable attorney's fees, whether or not such enforcement or collection includes filing 4 a lawsuit or prosecution of a lawsuit, if filed. 5 6 14. City's Right to Transfer Interest in Note. City and any subsequent holder of this Note 7 may at any time, without consent of Maker, sell, assign, pledge, hypothecate, transfer and 8 negotiate or grant participation in any part of or any interest in City's rights and benefits under this 9 Note to another governmental body or nonprofit organization which is eligible to receive such 10 transfer under state and federal law. 11 12 15. Waiver of Notice and Statute of Limitations. Except for any notice expressly required 13 by this Note, Maker waives demand, notice of demand, presentation for payment, notice of non- 14 payment or dishonor, protest and notice of protest. To the fullest extent permitted by law, Maker - 1.5 waives the defense of the statute of limitations in any action on this Note or to recover on the 16 security for this Note. 17 18 16.. Liability. City's acceptance of any payment under this Note which is less than payment in 19 full of all amounts then due and payable, or the granting of any extension of time for payment of 20 any amount due under this Note or for the performance of any covenant, condition or agreement 21 entered into by Maker and City, or City's grant of any other indulgence to Maker, or City's taking 22 or release of other or additional security for the indebtedness evidenced hereby, or any other 23 modification or amendment of this Note shall in no way release or discharge the liability of Maker 24 or any endorser, guarantor or other person secondarily liable for this Note. 25 26 17. Governing Law. This Note shall be governed by the laws of the State of California. 27 Maker agrees that the site of any hearing or action of whatever nature or kind regarding this Note 28 shall be conducted in the County of San Luis Obispo, State of California. 29 30 18. Severability. If any provision of this Note or any application of such provision be 31 declared by a court to be invalid or unenforceable, such invalidity or unenforceability shall not 32 affect any other application of such provision or the balance of the provisions hereof, which shall, 33 to the fullest extent possible, remain in full force and effect. 34 35 q / 36 S,� 1� ; � 10 37 "Maker" Dou as Rick W liams 38 39 40 41 Villa Rosa Affordable Housing Promissory Note Page 5 1 CITY: 2 3 4 City Administrative Officer 8 9 APPROVED AS TO FORM AND LEGAL EFFECT: 10 11 12 13 P&5#krge en, At rney 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 Jh/L.:vwomL%oryww .......... .......... .......... ........... .......... .......... Villa Rosa Affordable Housing Promissory Note Page 6 EXHIBIT "A' DESCRIPTION OF REAL PROPERTY LOT 74 OF TRACT NO. 2066, IN THE CITY OF SAN LUIS.OBI'SPO, IN THE COUNTY OF SAN LUIS OBISPO, STATE.OF CALIFORNIA, ACCORDING TO THE MAP RECORDED MAY 12, 1992 IN BOOK 16, PAGE 71 OF MAPS AND AMENDED DECEMBER 31, 1992 IN BOOK 16, PAGE 85 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY CALIFORNIA ALL - PURPOSE ACKNOWLEDGMENT State of County of On personally appeared before'me, and Title of Officer (e.g., "Jfne Doe, Notary Public ") Name(s) of Signer(s) rsonally known to me – – ❑ proved to me on the basis of satisfactory evidence to be the person( whose name(b) is /are- subscribed to the within instrument and acknowledged to me that he /she /they executed the same in his /horized.capacity(Q, and that by his /he644eir signatur6Non the instrument the person()* LEE PRICE or the entity upon behalf of which the persoOS4 acted, Commission # 1220447 executed the instrument. Z i VMYCOrnrrL1519*M Notary Public - California San Luis Obispo county WITN S my an an offic' se ay21,2�3 Signature of Notary Public OPTIONAL Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of thi to another document. Description of Attached Docume Title or Type of Document:. Document Date: Signer(s) Other Than Named Above: Capacity(ies) Signer's Name: by Sigper(s) ❑ Individual rporate Officer Title(s): ❑ Partner — ❑ Limited ❑ General • Attorney -in -Fact • Trustee _ • Guardian or Conservator ❑ Other: Top of thumb here Si r Is Representing: �--lJ Signer's Name: I■ i Numbdfof Pages: Individual Corporate Officer Title(s): Partner — ❑ Limited 0 General Attorney -in -Fact Trustee Guardian or Conservator Other: Signer Is Representing: RIGHT THUMBPRINT OF SIGNER .p ot thumb here 0 1994 National Notary Association • 8236 Remmet Ave., P.O. Box 7184 • Canoga Park, CA 91309 -7184 Prod. No. 5907 Reorder: Call Toll -Free 1- 800 -876 -6827 0 1 REQUESTED BY AND 2 WHEN RECORDED RETURN TO: . 3 4 City of San Luis Obispo 5 990 Palm Street 6 San Luis Obispo, Ca. 93401 -3249 7 Attn: Community Development Director 8 9 Recorded for the Benefit of the to City of San Luis Obispo at No Fee Under 11 Section 6103 of the Government Code 12 13 14 15 16 17 18 19 20 21 22 23 24 25 The undersigned declare that there is no documentary transfer tax on this matter. U PURCHASE MONEY DEED OF TRUST, DEED OF TRUST COVENANTS, ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND FIXTURE FILING THIS PURCHASE MONEY DEED OF TRUST, DEED OF TRUST COVENANTS, ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND FIXTURE FILING (this "Deed of Trust ") is made as of this 1st day of February, 200%y Douglas Rick Williams , the owner of the real property described hereinbelow, whose address is: 811 Lawrence Drive, San Luis Obispo, CA 93401 26 ( "Trustor" to) First American Title Insurance 27 Company 28 ( "Trustee ") in favor of the CITY 29 OF SAN LUIS OBISPO, a municipal corporation, whose address is 990 Palm Street, San Luis 30 Obispo, California 93401 -3249 ('Beneficiary"). 31 32 WHEREAS, on February 17, 1999, Beneficiary and Villa Rosa LLC, A California corporation, 33 entered into an Affordable Housing Agreement to implement Ordinance No. 1318 (1997 Series), 34 amending the Affordable Housing Requirement for the Villa Rosa Planned Residential 35 Development; and 36 37 WHEREAS, to implement said Affordable Housing Agreement, Beneficiary and Trustor entered 38 into that certain Promissory Note ( "Note ") dated February 1, 2000 pursuant to which 39 Trustor agreed to certain restrictions on the sale or transfer of that certain real property located in 40 the County of San Luis Obispo, State of California, which is further described in Exhibit A (the 41 "Real Property "); and 42 43 WHEREAS, Beneficiary and Trustor desire to ensure that the Real Property remain affordable to 44 moderate - income persons for a period of not less than 30 years, pursuant to the Housing 45 Agreement. 46 47 NOW, THEREFORE, THIS DEED OF TRUST WITNESSETH: 0 0 Villa Rosa Second Deed of Trust Page 2 1 2 Trustor, in consideration of the indebtedness referred to below and the trust herein created, 3 irrevocably grants, conveys, transfers and assigns to Trustees and its successors and assigns, in 4 trust, with power of sale and right of entry and possession, all of Trustor's estate, right, title and 5 interest in, to and under the Real Property; 6 7 TOGETHER WITH all structures and improvements now existing or hereafter erected on the 8 Real Property, all easements, rights and appurtenances thereto or used in connection therewith, 9 all rents, royalties, issues, profits, revenues, income and other, benefits thereof or arising from the to use or enjoyment of all or any portion thereof (subject; however, to the right, power and authority 11 given herein to Trustor to collect and apply such rents, royalties, issues, profits, revenues, income 12 and other benefits prior to an Event of Default hereunder), all interests in and rights, royalties and 13 profits in connection with all minerals, oil and gas and other hydrocarbon substances-thereon or 14 therein, development rights or credits, air rights, water, water rights (whether riparian, 15 appropriative or otherwise and whether or not appurtenant) and water stock, all intangible 16 property and rights relating to the Real Property or the operation thereof or used in connection 17 therewith, including, without limitation, trade names and trademarks and all furniture and 18 fixtures, now or hereafter located in, or on, or attached or affixed to, or used or intended to be 19 used in connection with, the Real Property, including, but without limitation, all heating, 20 lighting, laundry, incinerating, gas, electric and power equipment, pipes, plumbing, fire 21 prevention and fire extinguishing, refrigerating, ventilating and communication apparatus, air 22 cooling and air conditioning apparatus, shades, awnings, blinds, curtains, drapes, attached floor 23 coverings, including rugs and carpeting and other installed appliances, attached cabinets, trees, 24 plants and other items of landscaping, shall, fq the fullest extent permitted by law and for the 25 purposes of this Deed of Trust, be deemed to be part and parcel of, and appropriated to the use 26 of, the Real Property and, whether or not affixed or annexed thereto, be deemed conclusively to 27 be real property and conveyed by this Deed of Trust, and Trustor agrees to execute and deliver, 28 from time to time, such further instruments and documents as may be required by Beneficiary to 29 confirm the lien of this Deed of Trust on any of the foregoing; 30 31 TOGETHER WITH all of the estate, interest, right, title, other claim or demand which Trustor 32 now has or may hereafter acquire in any and all awards made for the taking by eminent domain, 33 or by any proceeding or purchase in lieu thereof, of the whole or any part of the Property (as 34 hereinafter defined), including, without limitation, any awards resulting from a change of grade 35 of streets and awards for severance damages; 36 37 TOGETHER WITH all of the estate, interest, right, title and other claim ofdemand which 38 Trustor now has or may hereafter acquire with respect to the unearned premiums accrued, 39 accruing or to accrue and the proceeds of insurance in effect with respect to all or any part of the 40 foregoing. All of the foregoing property referred to in this Deed of Trust, together with the Real 41 Property, is herein referred to as the "Property." 42 43 ARTICLE 1. PURPOSE AND CONSIDERATION. This trust deed is established for the 44 purpose of securing, in such order of priority as Beneficiary may elect:. 0 0 Villa Rosa Second Deed of Trust Page 3 2 (a) The repayment of the indebtedness evidenced by Trustor's Promissory Note (the 3 "Note ") of even date herewith payable to the order of Beneficiary, in the principal sum of 4 Dollars ($ 6,900.00 ) ( "Principal "), and any and all late charges, costs or fees 5 required thereunder and all extensions, renewals, modifications, amendments and 6 replacements thereof. The amount of the Note is the monetary difference between said 7 property's initial sales price, as allowed by the City's Affordable Housing Standards and 8 its initial market value, as determined by City's Community Development Director based 9 on sales information for comparable market rate units provided by Trustee. 10 11 (b) The payment of all other sums which may be advanced by or otherwise be due to 12 Trustee or Beneficiary under any provision of this Deed of Trust with interest (if any) 13 thereon at the rate provided herein or therein. 14 15 (c) Performance of all covenants of Trustor made in this Deed of Trust. 16 17 (d) Performance of all obligations and conditions of the Housing Agreement. 18 19 ARTICLE 2. DEED COVENANTS. To protect the security of this Deed of Trust, Trustor and 20 Trustee hereby covenant and agree as follows: 21 22 SECTION 2.01. Restrictions on Use and Occupancy. The Real Property shall be used solely 23 for owner- occupied housing and occupied solely by low- or moderate income households, as 24 defined in the Housing Agreement. 25 26 SECTION 2.02. Restrictions on Sale. The Real Property shall be sold or otherwise transferred 27 only to eligible households, as defined herein, or to the City, its Housing Authority, or to a non- 28 profit housing agency designated by City. Sales prices shall be based on and consistent with the 29 Affordable Housing Standards published by the City's Community Development Department. 30 31 SECTION 2.03. Term of Use, Occupancy and Sale Restrictions. Trustor agrees that the 32 above restrictions to the use, occupancy and sale of the Real Property shall remain in effect for a 33 period of not less than thirty (30) years from the date of this executed deed of trust. Further, 34 Trustor agrees that all future grant deeds for or transfers of interest in the properties shall contain 35 a restriction providing that for the period of time specified in this deed of trust, there shall be no 36 sale, lease, rental, or other transfer of the properties except for the sale to and occupation by 37 eligible low or moderate income households. Any sale, lease, rental, or.other transfer of the 38 property in violation of this covenant shall be void, as provided below. 39 40 SECTION 2.04. Determination of Eligibility. Trustor and Trustee agree to retain the Housing 41 Authority of the City of San Luis Obispo, or other qualified entity acceptable to the City, to 42 determine whether prospective buyers qualify as eligible households as defined in the Affordable 43 Housing Standards. 44 3 Villa Rosa Second Deed of Trust Page 4 1 SECTION 2.05. Covenants Binding. These affordability requirements shall be covenants 2 running with the land as defined in California Civil Code Section 1460, and shall apply to the 3 Real Property as further described on Exhibit A. Pursuant to Civil Code Section 1468, which 4 governs such covenants, the provisions of this Agreement shall be binding upon all parties 5 having any right, title, or interest in any of the properties described herein, or any portion thereof 6 and on their heirs, successors in interest and assigns for a period of 30 years from the date of 7 occupancy of the property. The parties agree that all future deeds or transfers of interest 8 regarding the properties shall show the restrictions of this Agreement for as long as the 9 Agreement is in effect. 10 11 SECTION 2.06. First Right of Refusal. Upon resale, Trustor and Trustee agree that the City or 12 the Housing Authority of the City of San Luis Obispo shall have the first right of refusal to 13 purchase the property or properties at the then current appraised value, as further described in the 14 Note. 15 16 SECTION 2.07. Performance of Obligations Secured. Trustor shall promptly pay when due 17 the indebtedness evidenced by the Note and any late charges, costs and/or fees provided for in 18 the Note and shall further perform fully and in a timely manner all other obligations of Trustor 19 contained herein or in the Note. 20 21 ARTICLE 3 — INSURANCE REQUIREMENTS 22 23 SECTION 3.01. Trustor shall keep the Property and all improvements thereon insured against 24 loss or damage by fire with extended all-risk` overage clauses, including vandalism and 25 malicious mischief clauses, in an amount not less than one hundred percent (100 %) of the full 26 replacement cost of such improvements with a company or companies and in such form and with 27 such endorsements as may be approved or required by Beneficiary. 28 29 SECTION 3.02. Trustor shall also maintain in full force and effect a policy of homeowners' 30 general liability insurance insuring Trustor against liability for bodily injury, property damage 31 and personal injury arising out of the operation, use or occupancy of the Property. The initial 32 amount of such insurance shall be One Hundred Thousand Dollars ($100,000.00) per occurrence 33 and not in the aggregate and shall be subject to periodic increase based upon increased liability 34 awards or the reasonable recommendation of Trustor's professional insurance advisor. Trustor 35 shall name Beneficiary as an additional insured under such policy. Such insurance shall be 36 primary with respect to any insurance maintained by Beneficiary and shall not call on 37 Beneficiary's insurance for contributions. 38 39 SECTION 3.03. Trustor shall pay all premiums for the insurance policies required to be 40 maintained under this Deed of Trust within fifteen (1.5) days after Trustor's receipt of a copy of 41 the premium statement or other evidence of the amount due. At least thirty (30) days prior to the 42 expiration of such policy, Trustor shall deliver to Beneficiary a renewal of such policy. 43 4 Villa Rosa Second Deed of Trust Page 5 1 SECTION 3.04. Any insurance which Trustor is required to maintain under this Deed of Trust 2 shall include a provision requiring that the insurance carrier give Beneficiary not less than thirty 3 (30) days written notice prior to any cancellation or modification of such coverage. If Trustor (i) 4 fails to deliver any policy or renewal to Beneficiary required under this Deed of Trust within the 5 prescribed time period or (ii) if any such policy is canceled of modified to reduce the amount or 6 type of coverage without Beneficiary's consent and no substituted comparable coverage is 7 obtained by Trustor prior to such cancellation or modification, Beneficiary may obtain such 8 insurance. In such case, Trustor shall reimburse Beneficiary for the cost of such insurance within 9 fifteen (15) days after receipt of a statement that indicates the cost of such insurance and upon 10 proof that Beneficiary has paid said statement. 11 12 SECTION 3.05. Trustor shall maintain all insurance required under this Deed of Trust with 13 companies holding a "general policy rating" of A -8 or better, as set forth in the most current issue 14 of "Best Key Rating Guide." Trustor acknowledges that the insurance described in this Section is 15 for the primary benefit of Beneficiary. Beneficiary makes no representation as to the adequacy of 16 such insurance to protect Trustor's or Beneficiary's interests. Therefore, Trustor shall obtain any 17 additional property or liability insurance that Trustor deems necessary to protect Beneficiary and 18 Trustor, in the exercise of reasonable judgment. 19 20 SECTION 3.06. Notwithstanding anything to the contrary contained herein, Trustor's obligation 21 to carry the insurance provided for herein may be brought within the coverage of a so- called 22 blanket policy or policies of insurance carried and maintained by Trustor; provided, however, 23 that Beneficiary shall be named as an additional insured thereunder and that the coverage 24 afforded Beneficiary will not be reduced or diminished by reason of the use of such blanket 25 policy of insurance and provided further that the requirements set forth herein are otherwise 26 satisfied. 27 28 SECTION 3.07. All of the above - mentioned insurance policies or certificates of insurance must 29 be satisfactory to Beneficiary. Beneficiary shall not by the fact of approving, disapproving, 3o accepting, preventing, obtaining or failing to obtain any insurance, incur any liability for or with 31 respect to the amount of insurance carried, the form or legal sufficiency of insurance contracts, 32 insolvency of insurance companies or payment or defense of lawsuits and Trustor hereby 33 expressly assumes full responsibility therefor and all liability, if any, with respect thereto. 34 35 SECTION 3.08. Condemnation and Insurance Proceeds.. 36 37 SUBSECTION 3.08(a). Any award of damages in connection with any taking or condemnation, 38 or for injury to the Property by reason of public use, or for damages for private trespass or entry 39 onto the Property is hereby assigned and shall be paid to Beneficiary as further security for all 40 obligations secured by this Deed of Trust. Upon receipt of such proceeds, Beneficiary may hold 41 the proceeds as further security or apply or release them in the same manner and with the same 42 effect as provided in this Deed of Trust for the disposition of proceeds of fire or other insurance. 43 Villa Rosa Second Deed of Trust Page 6 1 SUBSECTION 3.08(b). Any insurance proceeds or awards in connection with any casualty or 2 damage or injury to the Property covered by insurance ( "Insurance Proceeds ") are hereby 3 assigned to Beneficiary to be held and applied by Beneficiary in the manner hereinafter provided. 4 Beneficiary may, at its option, and at its own expense, appear in and prosecute in its own name 5 any action or proceeding to enforce any cause of action for such Insurance Proceeds. All 6 Insurance Proceeds shall be applied by Beneficiary upon any indebtedness secured by this Deed 7 of Trust and in any order determined by Beneficiary or, at the option of Beneficiary, the entire 8 amount so collected or any part of that amount may be released to Trustor. This application or 9 release shall not cure or waive any default or notice of default under this Deed of Trust or 10 invalidate any act done pursuant to such notice. 11 12 SUBSECTION 3.08(c). Trustor, immediately upon obtaining knowledge of the institution of any 13 proceedings relating to condemnation or other taking of or damage or injury to the Property or 14 any portion thereof, or knowledge of any casualty damage to the Property or damage in any other 15 manner, shall immediately notify Beneficiary in writing. Beneficiary may participate, at its own 16 expense, in any such proceedings and may join Trustor in adjusting any loss covered by 17 insurance. 18 19 ARTICLE 4. TAXES, LIENS AND OTHER ITEMS. Trustor shall pay, when due, all taxes, 20 bonds, assessments, fees, liens (including prior trust deed liens), charges, fines, impositions and 21 any and all other items which are attributable to or affect the Property and which may attain a 22 priority over this Deed of Trust or the indebtedness or evidence of indebtedness secured hereby, 23 by making payment prior to delinquency directly to the payee thereof. Trustor may initiate 24 proceedings to contest any such taxes, bonds,, assessments, fees, liens, charges, fines, impositions 25 or other items so long as Trustor takes steps to ensure that Beneficiary's security is not threatened, 26 in any manner. Trustor shall pay all costs of the proceedings, including any costs or fees incurred 27 by Beneficiary. Upon the final determination of any proceeding or contest, Trustor shall 28 immediately pay the amounts due, together with all costs, charges, interest and penalties 29 incidental to the proceedings. 30 31 ARTICLE 5. RENTS AND PROFITS. Trustor acknowledges and agrees that the Property 32 shall at all times be occupied by the Trustor as the Trustor's primary residence and shall not be 33 leased or rented during the term of the Note and this Deed of Trust. Notwithstanding the 34 foregoing, any rents, royalties, issues, profits, revenue, income and other benefits of the Property 35 arising from the use and enjoyment of all or any portion thereof or from any lease or agreement 36 pertaining thereto (the "Rents and Profits "), whether now due, past due, or to become due, and 37 including all prepaid rents and security deposits, are hereby absolutely, presently and 38 unconditionally assigned, transferred, conveyed and set over to Beneficiary to be applied by ,39 Beneficiary in the payment of the principal and all other sums payable on the Note and of all 40 other sums payable under this Deed of Trust. It is understood and agreed that neither the 41 foregoing assignment of Rents and Profits to Beneficiary nor the exercise by Beneficiary of any 42 of its rights or remedies under Article 5 hereof shall be deemed to defeat the owner - occupied 43 restriction set forth in the Agreement or to make Beneficiary a mortgagee -in- possession or 44 otherwise responsible or liable in any manner with respect to the Property or the use, occupancy, Villa Rosa Second Deed of Trust Page 7 1 enjoyment or operation of all or any portion thereof, unless and until Beneficiary, in person or by 2 agent, assumes actual possession thereof. Further, the appointment of a receiver for the Property 3 by any court at the request of Beneficiary or by agreement with Trustor, or the entering into 4 possession of the Property or any part thereof by such receiver, shall not be deemed to make 5 Beneficiary a mortgagee -in- possession or otherwise responsible or liable in any manner with 6 respect to the Property or the use, occupancy, enjoyment or operation of all or any portion 7 thereof. 8 9 ARTICLE 6. PRESERVATION AND MAINTENANCE OF PROPERTY. Trustor shall 10 keep the Property and every part thereof in good condition and repair and shall not permit or 11 commit any waste, impairment or deterioration of the Property nor commit, suffer or permit any 12 act upon or use of the Property in violation of law or applicable order of any governmental 13 authority, whether now existing or hereafter enacted and whether foreseen or unforeseen, 14 including, without limitation, violation of any zoning, building or environmental protection 15 statutes, ordinances, regulations, orders and restrictions or in violation of any covenants, 16 conditions or restrictions affecting the Property or bring or keep any article upon any of the 17 Property or cause or permit any condition to exist thereon which would be prohibited by or could 18 invalidate any insurance coverage maintained or required hereunder to be maintained by Trustor 19 on or with respect to any part of the Property and further shall do all other acts which from the 20 character or use of the Property may be reasonably necessary to protect the security hereof, the 21 specific enumerations herein not excluding the general. Trustor shall complete and restore and 22 repair promptly and in a good and workmanlike manner any building, structure or improvement 23 thereon which may be damaged or destroyed and pay, when due, all claims for labor performed 24 and materials furnished therefor, whether or not insurance or other proceeds are available to 25 cover, in whole or in part, the costs of any such restoration or repair. Trustor shall notify 26 Beneficiary immediately in writing of any damage to the Property in excess of Ten Thousand 27 Dollars ($10,000.00). 28 29 ARTICLE 7. PROTECTION OF SECURITY: COSTS AND EXPENSES. Trustor shall 3o appear in and defend any action or proceeding purporting to affect the security hereof or the 31 rights or powers of Beneficiary or Trustee and shall pay all reasonable costs and expenses, 32 including, without limitation, costs of evidence of title and reasonable attorney's fees, in any such 33 action or proceeding in which Beneficiary or Trustee may appear and in any suit brought by 34 Beneficiary to foreclose this Deed of Trust or to enforce or establish any other rights or remedies 35 of Beneficiary hereunder. If Trustor fails to perform any of the covenants or agreements in this 36 Deed of Trust or if any action or proceeding is commenced which affects Beneficiary's interest in 37 the Property or any part thereof, including, but not limited to, eminent domain, code enforcement 38 or proceedings of any nature whatsoever under any federal or state law, whether now existing or 39 hereafter enacted or amended, relating to bankruptcy, insolvency, arrangement, reorganization or 40 other form of debtor relief, or to a decedent, then Beneficiary or Trustee may, but without 41 obligation to do so and upon ten (10) days' prior written notice to and demand upon Trustor 42 (unless a shorter notice period is necessary to protect Beneficiary's interest in the security hereof, 43 in which case only reasonable notice and demand under the circumstances shall be required) and 44 without releasing Trustor from any obligation hereunder, make such appearances, disburse such 9 9 Villa Rosa Second Deed of Trust Page 8 1 sums and take such action as Beneficiary or Trustee deems necessary or appropriate to protect 2 Beneficiary's interest, including, but not limited to, disbursement of reasonable attorney's fees, 3 entry upon the Property to make repairs or otherwise protect the security hereof, and payment, 4 purchase, contest or compromise of any encumbrance, charge or lien which in the judgment of 5 either Beneficiary or Trustee appear to be prior or superior hereto. Trustor further agrees to pay 6 all reasonable expenses of Beneficiary (including fees and disbursements of counsel) reasonably 7 related to the protection of the rights of Beneficiary hereunder, and enforcement or collection of 8 payment of the Note, whether by judicial or non judicial proceedings, or in connection with any 9 bankruptcy, insolvency, arrangement, reorganization or other debtor relief proceeding of Trustor, 10 or otherwise. Beneficiary shall give Trustor ten (10) days' prior written notice before disbursing 11 any amounts pursuant to this Article. Any amounts disbursed by Beneficiary or Trustee pursuant 12 to this Section shall be additional indebtedness of Trustor secured by this Deed of Trust as of the 13 date of disbursement. All such amounts shall be payable by Trustor immediately without 14 demand. Nothing contained herein shall be construed to require Beneficiary or Trustee to incur 15 any expense, make any appearance or take any other action. 16 17 ARTICLE 8. ENFORCEMENT. 18 19 Section 8.01. Acknowledgement of Enforceability. Trustor represents, warrants, covenants 20 and agrees that it is the lawful owner of the Real Property and that it has good right and lawful 21 authority to encumber the same as provided herein; that the Real Property is free from any and 22 all liens and encumbrances excepting only such as have been approved by Beneficiary and that 23 Trustor warrants and will defend the title to the�Property against all claims and demands 24 whatsoever not specifically excepted herein (4nd except for claims and demands arising from 25 acts or omissions of Beneficiary or any predecessor -in- interest to Beneficiary not previously 26 disclosed to Trustor), and Trustor will execute, acknowledge and deliver all and every such 27 further assurances unto Beneficiary of the title to the Property hereby conveyed and intended so 28 to be or that Trustor may be or shall become hereinafter bound so to do. Trustor covenants and 29 warrants that the Note and this Deed of Trust are valid and enforceable obligations of Trustor in 3o accordance with the terms thereof and hereof; and that this Deed of Trust does not, nor does the 31 Note, nor does the performance or observance by Trustor of any of the matters or things in the 32 Note or this Deed of Trust, contravene any covenant in any indenture or agreement affecting 33 Trustor. 34 35 Section 8.02. Due on Sale and Other Enforcement Provisions. Trustor's agreement to ensure 36 the continued owner occupancy of the Real Property is a substantial material consideration to 37 Beneficiary and Beneficiary's agreement to accept the Note and to accept this Deed of Trust. In 38 accordance with California Civil Code Section 711.5 and in order to induce Beneficiary to accept 39 this Deed of Trust and the Note, Trustor agrees that Trustor shall not Transfer all or any part of 40 the Property without the prior written consent of Beneficiary. Except for a Transfer to a Eligible 41 Household (as defined in the City of San Luis Obispo's Affordable Housing Standards), 42 Beneficiary may grant or deny such consent in its sole and absolute discretion and as a condition 43 to such consent may require any transferee to assume all obligations hereunder and to agree to be 44 bound by all provisions contained herein. In the event of any proposed Transfer, Trustor shall Villa Rosa Second Deed of Trust Page 9 1 provide Beneficiary with all financial and other information pertaining to the intended transferee 2 reasonably requested by Beneficiary. In the event of any Transfer without the prior written 3 consent of Beneficiary, Beneficiary shall have the absolute right, at its option, without demand or 4 notice, to declare all outstanding Principal and all other sums due hereunder and under the Note 5 to be immediately due and payable. Further, Beneficiary may bring an action at law or in equity 6 to require Trustor and the proposed transferee to terminate and/or rescind any sales contract or 7 purchase and sale transaction between them and/or to declare the transfer void, notwithstanding 8 that the transfer may have closed and become final as between Trustor and the transferee. 9 Further, Beneficiary may pursue any other remedy available under this Deed of Trust or the Note 1 o or at law or in equity or under any other agreement, instrument or document entered into by 11 Trustor and Beneficiary. Beneficiary's consent to one Transter shall not be aeemeo to be a 12 waiver of the right to require consent to a future or successive Transfer. As used herein, 13 "Transfer" includes any sale, agreement to sell, assignment, exchange or other conveyance of the 14 Property or any portion thereof or any interest therein, whether voluntary or involuntary, by 15 operation of law or otherwise, except that a Transfer by gift, devise or inheritance to a spouse or 16 to a spouse as a part of a dissolution proceeding shall not be considered a Transfer for purposes 17 of this Section. 18 19 ARTICLE 9. EVENTS OF DEFAULT. Each of the following shall constitute an event of 20 default ( "Event of Default ") hereunder (including, if Trustor and Trustee consists of more than 21 one person or entity, the occurrence of any of such events with respect to any one or more of 22 such persons or entities): 23 24 SECTION 9.01. Breach of Covenants. Default by Trustor in the performance of any of the 25 covenants or agreements of Trustor contained'herein, in the Note, in the Housing Agreement or 26 any other note or instrument, trust deed or other obligation of Trustor relating to the Property 27 secured by any part of or all of the Property, whether junior or senior to this Deed of Trust. 28 29 SECTION 9.02. Appointment of Trustee. The appointment pursuant to an order of a court of 30 competent jurisdiction, of a trustee, receiver or liquidator of the Property or any part thereof, or 31 of Trustor, or any termination or voluntary suspension of the transaction of business of Trustor, 32 or any attachment, execution or other judicial seizure of all or any substantial portion of Trustor's 33 assets; provided, however, that if such attachment, execution or seizure is involuntary, Trustor 34 shall not be deemed in default unless the same is not discharged within sixty (60) days. 35 36 SECTION 9.03. Bankruptcy Filing. The filing by or against Trustor of a petition in bankruptcy 37 or for an arrangement or for reorganization or for other form of debtor relief pursuant to the 38 federal Bankruptcy Act, as the same may be amended or replaced from time to time, or any other 39 law, federal or state, whether now existing or hereafter amended or enacted relating to insolvency 40 or debtor relief (except that in the case of a filing against Trustor, an Event of Default shall not 41 exist unless Trustor fails to have the proceeding discharged within sixty (60) days after such 42 filing), or the adjudication of Trustor as a bankrupt or an insolvent by a decree of a court of 43 competent jurisdiction, or the making of an assignment for the benefit of creditors, or the 44 admission by Trustor in writing of its inability to pay its debts generally as they become due, or 9 0 0 Villa Rosa Second Deed of Trust Page 10 1 the giving of consent by Trustor to the appointment of a receiver or receivers of all or 2 substantially all of its property. 3 4 SECTION 9.04. Misrepresentations. Any representation or disclosure made to Beneficiary by 5 Trustor as an inducement to the making of the loan evidenced by the Note that proves to be false 6 or misleading in any material respect as of the time the same was made, whether or not any such 7 representation or disclosure appears as part of this Deed of Trust. 8 9 SECTION 9.05. Other Events. Any other event which, under this Deed of Trust, or under the 10 Note or the Agreement, constitutes an Event of Default by Trustor hereunder or thereunder or 11 gives Beneficiary the right to accelerate the maturity of the indebtedness, or any part thereof, 12 secured hereby. 13 14 ARTICLE 10. REMEDIES. Upon the occurrence of any Event of Default and the expiration 15 of any applicable period within which to cure the same, Trustee and Beneficiary shall have the 16 following rights and remedies: 17 18 SECTION 10.01. Acceleration. Beneficiary may declare the entire outstanding Principal and all 19 other sums or payments required hereunder to be due and payable immediately and 20 notwithstanding the date such sums would otherwise be due in accordance with the Note and the 21 Agreement. 22 23 SECTION 10.02. Entry. Whether or not Beneficiary exercises the right provided in Section 24 10.01 above, Beneficiary, in person or by agent or court- appointed receiver, may enter upon, take 25 possession of, manage and operate the Property or any part thereof and do all things necessary or 26 appropriate in Beneficiary's sole discretion in connection therewith, including, without 27 limitation, making and enforcing, and if the same be subject to modification or cancellation, 28 modifying or canceling leases upon such terms or conditions as Beneficiary deems proper, 29 obtaining and evicting tenants, and fixing or modifying rents, contracting for and making repairs 3o and alterations, and doing any and all other acts which Beneficiary deems proper to protect the 31 security hereof; and either with or without so taking possession, in its own name, in the name of 32 Trustor or by court- appointed receiver (which may be appointed on notice or on ex parte 33 application without notice), suing for or otherwise collecting and receiving the rents and profits, 34 including those past due and unpaid, and applying the same less costs and expenses of operation 35 and collection, including reasonable attorney's fees, upon any indebtedness secured hereby and in 36 such order as Beneficiary may determine. Upon request of Beneficiary, Trustor shall assemble 37 and make available to Beneficiary at the site of the Real Property any of tht Property•which has 38 been removed therefrom. The entering upon and taking possession of the Property, or any part 39 thereof, the collection of any rents and profits and the application thereof as aforesaid shall not 40 cure or waive any Event of Default theretofore or thereafter occurring or affect any notice or 41 Event of Default or notice, and, notwithstanding continuance in possession of the Property or any 42 part thereof by Beneficiary, Trustor or a receiver, and the collection, receipt and application of 43 the rents and profits, Beneficiary shall be entitled to exercise every right provided for in this 44 Deed of Trust or by law or in equity upon or after the occurrence of an Event of Default, 10 Villa Rosa Second Deed of Trust Page 11 including, without limitation, the right to exercise the power of sale. Any of the actions referred to in this Section may be taken by Beneficiary irrespective of whether any notice of an Event of Default or election to sell has been given hereunder and without regard to the adequacy of the security for the indebtedness hereby secured. 6 SECTION 10.03. Judicial Action. Beneficiary may bring an action in any court of competent 7 jurisdiction to foreclose this Deed of Trust or to enforce any of the covenants and agreements of 8 this Deed of Trust, or the Note and the Housing Agreement. to SECTION 10.04. Power of Sale. 11 12 SUBSECTION 10.04(a). Beneficiary may elect to cause the Property or any part thereof to be 13 sold under the power of sale herein granted in any manner permitted by applicable law. In 14 connection with any sale or sales hereunder, Beneficiary may elect to treat any of the Property 15 that consists of a right in action or that is property that can be severed from the Real Property or 16 any improvements thereon without causing structural damage thereto as if the same were 17 personal property and dispose of the same in accordance with applicable law, separate and apart 18 from the sale of the Real Property. 19 20 SUBSECTION 10.04(b). Trustee may, and upon request of Beneficiary shall, from time to time, 21 postpone any sale hereunder by public announcement thereof at the time and place noticed 22 therefor. If the Property consists of several items of property, Beneficiary may designate the 23 order in which such items shall be offered for sale or sold. Any person, including Trustor, 24 Trustee or Beneficiary, may purchase at any sale hereunder, and Beneficiary shall have the right 25 to purchase at any sale hereunder by crediting upon the bid price the amount of all or any part of 26 the indebtedness hereby secured. 27 28 SUBSECTION 10.04(c). Should Beneficiary desire that more than one sale or other disposition 29 of the Property be conducted, Beneficiary may, at its option, cause the same to be conducted 30 simultaneously, or successively, on the same day, or at such different days or times and in such 31 order as Beneficiary may deem to be in its best interests, and no such sale shall terminate or 32 otherwise affect the lien of this Deed of Trust on any part of the Property not sold until all 33 indebtedness secured hereby has been fully paid. Upon any sale hereunder, Trustee shall execute 34 and deliver to the purchaser or purchasers a deed or deeds conveying the Property so sold, but 35 without any covenant or warranty whatsoever, express or implied, whereupon such purchaser or 36 purchasers shall be let into immediate possession; and the recitals in any such deed or deeds of 37 facts, such as default, the giving of notice of default and notice of sale and other facts affecting 38 the regularity or validity of such sale or disposition, shall be conclusive proof of the truth of such 39 facts and any such deed or deeds shall be conclusive against all persons as to such facts recited 40 therein. 41 42 SUBSECTION 10.04(d). In case of any sale of the Property pursuant to any judgment or decree 43 of any court or at public auction or otherwise in connection with the enforcement of any of the 44 terms of this Deed of Trust, Beneficiary, its successors or assigns, may become the purchaser, 11 0 0 Villa Rosa Second Deed of Trust Page 12 1 and for the purpose of making settlement for or payment of the purchase price, shall be entitled 2 to deliver over and use the Note, together with all other sums, with interest, advanced and unpaid 3 hereunder, in order that there may be credited as paid on the purchase price the sum then due 4 under the Note, including principal thereon and all other sums, with interest, advanced and 5 unpaid hereunder. 6 7 SECTION 10.05. Proceeds of Sale. The proceeds of any sale made under or by virtue of this 8 Article, together with all other sums that then may be held by Trustee or Beneficiary under this 9 Deed of Trust, whether under the provisions of this Article or otherwise, shall be applied as 10 follows: 11 12 (a) First, to the payment of the costs and expenses of sale and of any judicial proceedings 13 wherein the same may be made, including reasonable compensation to Trustee and Beneficiary, 14 their agents and counsel, and to the payment of all expenses, liabilities and advances made or 15 incurred by Trustee under this Deed of Trust, together with interest on all advances made by 16 Trustee at the maximum rate permitted by law to be charged by Trustee. 17 18 (b) Second, to the payment of any and all sums expended by Beneficiary under the terms hereof 19 (including, but not limited to, sums paid by Beneficiary on the prior trust deed) not then repaid 20 and all other sums required to be paid by Trustor pursuant to any provisions of this Deed of Trust 21 or the Note, including, without limitation, all expenses, liabilities and advances made or incurred 22 by Beneficiary under this Deed of Trust or in connection with the enforcement hereof, together 23 with interest thereon as herein provided. 24 25 (c) Third, to the payment of the entire amount then due, owing or unpaid upon the Note, 26 including attorney's fees and costs. 27 28 (d) Fourth, all amounts otherwise due Beneficiary. 29 30 (e) The remainder, if any, to the person or persons legally entitled thereto. 31 32 SECTION 10.06. Waiver of Marshaling. Trustor, for itself and for all persons hereafter 33 claiming through or under it or who may at any time hereafter become holders of liens junior to 34 the lien of this Deed of Trust, hereby expressly waives and releases all rights to direct the order 35 in which any of the Property shall be sold in the event of any sale or sales pursuant hereto, and to 36 have any of the Property and/or other property now or hereafter constituted security for any of 37 the indebtedness secured hereby, marshaled upon any foreclosure of this D'oed of Trust or for any 38 other security for any of said indebtedness. 39 40 SECTION 10.07. Remedies Cumulative. No remedy herein conferred upon or reserved to 41 Trustee or Beneficiary is intended to be exclusive of any other remedy herein or by law provided, 42 but each shall be cumulative and shall be in addition to every other remedy given hereunder or 43 now or hereafter existing at law or in equity or by statute. No delay or omission of Trustee or 44 Beneficiary to exercise any right or power accruing upon any Event of Default shall impair any 12 0 0 Villa Rosa Second Deed of Trust Page 13 i right or power or shall be construed to be a waiver of any Event of Default or any acquiescence 2 therein; and every power and remedy given by this Deed of Trust to Trustee or Beneficiary may 3 be exercised from time to time as often as may be deemed expedient by Trustee or Beneficiary. If 4 there exists additional security for the performance of the obligations secured hereby, the holder 5 of the Note, at its sole option, and without limiting or affecting any of its rights or remedies 6 hereunder, may exercise any of the rights and remedies to which it may be entitled hereunder 7 either concurrently with whatever rights and remedies it may have in connection with such other 8 security or in such order as it may determine. Any application of any amounts or any portion 9 thereof held by Beneficiary at any item as additional security hereunder, whether pursuant to this to deed of trust or otherwise, to any indebtedness secured hereby shall not extend or postpone the 11 due dates of any payments due from Trustor to Beneficiary hereunder or under the Note, or 12 change the amounts of any such payments or otherwise be construed to cure or waive any default 13 or notice of default hereunder or invalidate any act done pursuant to any such default _or notice. 14 In the event that Beneficiary shall have proceeded to enforce any right under this Deed of Trust 15 by foreclosure, sale, entry or otherwise, and such proceedings shall have been discontinued or 16 abandoned for any reason or shall have been determined adversely, then, and in every such case, 17 Trustor and Beneficiary shall be restored to their former positions and rights hereunder with 18 respect to the Property subject to the lien hereof. 19 20 ARTICLE 11. MISCELLANEOUS 21 22 SECTION 11.01. Severability. In the event that any one or more of the provisions contained in 23 this Deed of Trust shall for any reason be held to be invalid, illegal or unenforceable in any 24 respect, such invalidity, illegality or unenforceability shall not affect any other provision of this 25 Deed of Trust, and this Deed of Trust shall be construed as if such invalid, illegal or 26 unenforceable provision had never been contained herein. 27 28 SECTION 11.02. Certain Charges. Trustor agrees to pay the charges of Beneficiary for any 29 service rendered Trustor, or on its behalf, connected with this Deed of Trust or the indebtedness 30 secured hereby, including, without limitation, delivering to an escrow holder a request for full or 31 partial reconveyance of this Deed of Trust, transmitting to an escrow holder moneys secured 32 hereby, changing the records pertaining to this Deed of Trust and indebtedness secured hereby, 33 showing a new owner of the Property and replacing an existing policy of insurance held 34 hereunder with another such policy. 35 36 SECTION 12.03. Notices. All notices expressly provided hereunder to be given by Beneficiary 37 to Trustor and all notices and demands of any kind or nature whatsoever that Trustor may be 38 required or may desire to give to or serve on Beneficiary shall be in writing and shall be served 39 by first class or registered or certified mail, return receipt requested. Any such notice or demand 40 so served shall be deposited in the United States mail, with postage thereon fully prepaid and 41 addressed to the party so to be served at its address above stated or at such other address of which 42 said party shall have theretofore notified in writing, as provided above, the party giving such 43 notice. Service of any such notice or demand so made shall be deemed effective on the date of 44 actual delivery as shown by the addressee's return receipt or the expiration of forty -eight (48) 13 0 0 Villa Rosa Second Deed of Trust Page 14 1 hours after the date of mailing, whichever is the earlier in time, except that service of any notice 2 of default or notice of sale provided or required by law shall, if mailed, be deemed effective on 3 the date of mailing. 4 5 SECTION 12.04. Trustor Not Released. Extension of the time for payment or modification of 6 the terms of payment of any sums secured by this Deed of Trust granted by Beneficiary to any 7 successor -in- interest of Trustor shall not operate to release, in any manner, the liability of the 8 original Trustor. Beneficiary shall not be required to commence proceedings against such 9 successor or refuse to extend time for payment or otherwise modify the terms of the payment of to the sums secured by this Deed of Trust by reason of any demand made by the original Trustor. 11 Without affecting the liability of any person, including Trustor, for the payment of any 12 indebtedness secured hereby, or the lien of this Deed of Trust on the remainder of the Property 13 for the full amount of any such indebtedness and liability unpaid, Beneficiary and Trustee are 14 respectively empowered as follows: Beneficiary may from time to time and without notice (a) 15 release any person liable for the payment of any of the indebtedness, (b) extend the time or 16 otherwise alter the terms of payment of any of the indebtedness, (c) accept additional real or 17 personal property of an kind as security therefor, whether evidenced by deeds of trust, mortgages, 18 security agreements or any other instruments of security, or (d) alter, substitute or release any 19 property securing the indebtedness; Trustee may, at any time and from time to time, upon the 20 written request of Beneficiary (a) consent to the making of any map or plat of the Property or any 21 part thereof, (b) join in granting any easement or creating any restriction thereon, (c) join in any 22 subordination agreement or other agreement affecting this Deed of Trust or the lien or charge 23 hereof, or (d) reconvey, without any warranty, all or part of the Property. 24 25 SECTION 12.05. Inspection. Beneficiary may at any reasonable time or times make or cause to 26 be made entry upon and inspections of the Property or any part thereof in person or by agent. 27 28 SECTION 12.06. Reconveyance. Upon the payment in full of all sums secured by this Deed of 29 Trust or upon forgiveness of such payment in accordance with the Note, Beneficiary shall request 30 that Trustee reconvey the Property and shall surrender this Deed of Trust and Note evidencing 31 indebtedness secured by this Deed of Trust to Trustee. Upon payment of its fees and any other 32 sums owing to it under this Deed of Trust, Trustee shall reconvey the Property without warranty 33 to the person or persons legally entitled thereto. Such person or persons shall pay all costs of 34 recordation, if any. The recitals in such reconveyance of any matters of facts shall be conclusive 35 proof of the truthfulness thereof. The grantee in such reconveyance may be described as "the 36 person or persons legally entitled thereto. Five (5) years after issuance of such full 37 reconveyance, Trustee may destroy the Note and this Deed of Trust unless otherwise directed by 38 Beneficiary. 39 40 SECTION 12.07. Interpretation. Wherever used in this Deed of Trust, unless the context 41 indicates a contrary intent, or unless otherwise specifically provided herein, the word "Trustor" 42 shall mean and include both Trustor and any subsequent owner or owners of the Property, and 43 the word 'Beneficiary" shall mean and include not only the original Beneficiary hereunder but 44 also any future owner and holder, including pledgees, of the Note secured hereby. In this Deed of 14 • • Villa Rosa Second Deed of Trust Page 15 1 Trust wherever the context so requires, the masculine gender includes the feminine and/or neuter, 2 and the neuter includes the feminine and/or masculine, and the singular number includes the 3 plural and conversely. In this Deed of Trust, the use of the word "including" shall not be deemed 4 to limit the generality of the term or clause to which it has reference, whether or not non - limiting 5 language (such as "without limitation," or "but not limited to" or words of similar import) is used 6 with reference thereto. The captions and headings of the Articles and Sections of this Deed of 7 Trust are for convenience only and are not to be used to interpret, define or limit the provisions 8 hereof. 9 10 SECTION 12.08. Consent. The granting or withholding of consent by Beneficiary to any 11 transaction as required by the terms hereof shall not be deemed a waiver of the right to require 12 consent to future or successive transactions. 13 14 SECTION 12.09. Successors and Assigns. All of the grants, obligations, covenants, 15 agreements, terms, provisions and conditions herein shall run with the land and shall apply to, 16 bind, and inure to the benefit of the heirs, administrators, executors, legal representatives, 17 successors and assigns of Trustor and the successors -in -trust of Trustee and the endorsees, 18 transferees, successors and assigns of Beneficiary. In the event that Trustor is composed of more 19 than one party, the obligations, covenants, agreements and warranties contained herein as well as 20 the obligations arising therefrom are and shall be joint and several as to each such party. 21 22 SECTION 12.10. Governing Law. This Deed of Trust shall be governed by and construed under 23 the laws of the State of California. ; 24 25 SECTION 12.11. Trustor Waivers. Trustor waives the benefit of all laws now existing or that 26 hereafter may be enacted with respect to any statute of limitations for the filing of any action or 27 claims by Beneficiary. 28 29 SECTION 12.13. Superiority of First Lender Documents. 30 31 SUBSECTION 12.13(a). This Deed of Trust shall not diminish or affect the rights of the First 32 Lender under that certain deed of trust dated January 31, , 2000, executed by the 33 Trustor in favor of the First Lender and recorded in the County of San Luis Obispo on 34 , , and assigned Instrument No. or any subsequent 35 First Lender deeds of trust hereafter recorded against the Security (the "First Deed of Trust "), 36 except as provided in Subsection 12.13(b) below. Beneficiary and Trustor acknowledge and 37 agree that this Deed of Trust is subject and subordinate in all respects to the - liens, terms, 38 covenants and conditions of the First Deed of Trust and to all advances heretofore made or which 39 may hereafter be made pursuant to the First Deed of Trust including all sums advanced for the 40 purpose of (i) protecting or further securing the lien of the First Deed of Trust, curing defaults by 41 the Trustor under the First Deed of Trust or for any other purpose expressly permitted by the 42 First Deed of Trust or (ii) constructing, renovating, repairing, furnishing, fixturing or equipping 43 the Property. The terms and provisions of the First Deed of Trust are paramount and controlling, 44 and they supersede any other terms and provisions hereof in conflict therewith. 15 0 0 Villa Rosa Second Deed of Trust Page 16 1 SUBSECTION 12.1.3(b). In the event of default, the First Lender may take the following actions 2 to cure the default, provided first that: (i) the Beneficiary has been given written notice of a 3 default under the First Deed of Trust, and (ii) the Beneficiary shall not have cured the default. 4 under the First Deed of Trust, or diligently pursued curing -the default as determined by the First 5 Lender, within the 60 -day period provided in such notice sent to the Beneficiary: 6 7 1) Foreclose on the subject property pursuant to the remedies permitted by law and written 8 in a recorded contract or deed of trust; or 9 10 2) 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 by a 12 trustor; or 13 14 3) Sell the property to any person at a fair market value price subsequent to exercising its 15 rights under the deed of trust. Any value in excess of the unpaid mortgage and costs of 16 sale administration shall be used to satisfy the City loan. In no case may a first mortgage 17 lender, exercising foreclosure assignment in -lieu of foreclosure or sale, obtain value or 18 rights to value greater than the value of the outstanding indebtedness on the first 19 mortgage at the time of the debt clearing action. 20 21 The following types of transfers shall remain subject to the requirements of the City's loan and 22 right of first refusal: transfer by gift, devise, or inheritance to the owner's spouse; transfer to a 23 surviving joint tenant; transfer to a spouse as part of divorce or dissolution proceedings; or .24 acquisition in conjunction with a marriage. 25 26 SECTION 12.14. Request for Notices of Default and Sale. 27 28 SUBSECTION 12.14(a). Trustor hereby requests that a copy of any notice of default and notice 29 of sale as may be required by law or by this Deed of Trust be mailed to Trustor at its address 30 above stated. 31 32 SUBSECTION 12.14(b). In accordance with Section 2924b of the California Civil Code, request 33 is hereby made that a copy of any notice of default and a copy of any notice of sale under that 34 deed trust recorded on , , in Book page 35 records of San Luis Obispo County, California, executed by Douglas- Rick Williams 36 trustor in which American * is named as Beneficiary and American City Mortgage 37 Corp., as Trustee, be mailed to: Community Development Director, City of San Luis Obispo, 38 990 Palm Street, San Luis Obispo, California 93401 -3249. NOTICE: A copy of any notice of 39 default and of any notice of sale will be sent only to the address contained in this recorded 40 request. If your address changes, a new request must be recorded. 41 *City Mortgage Corporation 42 SECTION 12.15. No Transfer. Trustor shall not voluntarily or involuntarily (except for a 43 transfer in accordance with the Housing Agreement) assign or otherwise transfer any of its rights, 16 Villa Rosa Second Deed of Trust Page 17 1 duties, liabilities or obligations hereunder or under the Note without the prior written consent of 2 Beneficiary. 3 SECTION 12.16. Attorney's Fees. In any action to interpret or enforce any provision of this 4 Deed of Trust, the prevailing party shall be entitled to reasonable costs and attorney's fees. 5 6 IN WITNESS WHEREOF, the undersigned have executed this Deed of Trust as of the day and 7 year first above written. 8 9 10 ..9 11 "Trustor" Do glas Ric �illii,"s 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 • • Villa Rosa Second Deed of Trust Page 18 1 2 EXHIBIT "A' 3 4 DESCRIPTION OF REAL PROPERTY 5 6 LOT 74 OF TRACT NO. 2066, IN THE CITY OF SAN LUIS OBISPO, IN THE 7 COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA, ACCORDING TO MAP RECORDED 8 MAY 12, 1992 IN BOOK 16, PAGE 71 OF MAPS AND AMENDED DECEMBER 31, 1992 . 9 IN BOOK 16, PAGE 85 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY 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 39 ,jha,:vmwodo8rtmt 18 AM E R I • 4 � '7 } STATE OF CALIFORNIA }ss. COUNTY OF G (Lis L } On M before me, CS Lea 'lG crfc: � • personally appeared c c� L.L-S � t (� r i.t(6 tc (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 -A�C (This area for official notarial seal) STEPHANIE L. MONK v ' �CT�IPd.; "1177392 Pltti`s- Cavom(a ' CoL'�scy of S °� Luis Gbis j�►� Title of Document -N-Lc el c ,,� -T(--us Date of Document Fc) - I , 2-ocno No. of Pages Other signatures not acknowledged 3008 (1/94) (General) First American Title Insurance Company •� ,�