Loading...
HomeMy WebLinkAboutD-1593A 2302 Santa Ynez with a 2nd dwelling unit known as 2304 Santa Ynez - Public improvements consist of: curb, gutter and sidewalk along the Loomis Street frontage of said property. Scope of work shall include additional grading, retaining walls, util' RECORDING REQUESIFD BY: - Cuesta -Titli Co6Lpany - WHEN RECORDED RETURN TO: City of San Luis Obispo 990 Palm Street �' JU IL E RODLD ^ San Luis Obispo. County— ClerklRecorder 'Recorded 0 the �egoest of 'Cuesta Title Company D 0 C #t : 2004086998 I Titles: 1 San Luis Obispo, CA 93401 Attn: City Clerk Fees Taxes Record for the benefit of the City of San Luis Ol Others PAID At No Fee under Section 27383 of the Governml. The undersigned declare that there is no documentary Transfer tax on this matter. SUBORDINATION AGREEMENT NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN YOUR SECURITY INTEREST IN THE PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LEIN OF SOME OTHER OR LATER SECURITY INSTRUMENT. THIS AGREEMENT, made 8131/04 , byr., m M- Castello , Owner of. the land hereinafter described and hereinafter referred to as "Owner," and City of San Luis Obispo Present owner and holder of the deed of trust and note first hereinafter described and hereinafter referred to as "Beneficiary"; WITNESSETH THAT WHEREAS, Li -9a M. Flo , did execute a deed of trust, dated 8/'19/03 , to First ATeican Title Ompx y , as trustee, covering property located at **** as more particularly described in Exhibit One; SEE EXHIBIT ONE ATTACHED HERETO AND MADE A PART HEREOF '`***1651 Tmini Driver San Luis Obispo, CA. 93405 To secure a note in the sum of $136,175.Q0 , dated 8/19/03 . , in favor of City of San Luis Obispo, which deed of trust was recorded as instrument no. 2003-112242 , on 9/30/03 of Official Records of said county; and WHEREAS Owner has executed, or is about to execute, a deed of trust and note in the sum of $190,000.w dated 9/24/2004 in favor of *** , hereinafter referred to as "Lender," payable with interest and upon the terms and conditions described therein, which deed of trust is to be recorded concurrently herewith; and *"Vbshirrjbon M:bnl Bark, FA WHEREAS, it is a condition precedent to obtaining said loan that said deed of trust last above mentioned shall unconditionally be and remain at all times a lien or charge upon the land hereinbefore described, prior and superior to the lien or charge of the deed of trust first above mentioned; and WHEREAS, lender is willing to make said loan provided the deed of trust securing the same is a lien or charge upon the above described property prior and superior to the lien or charge of the deed of trust first above mentioned and provided that Beneficiary will specifically and Page 1 of 5 INITIALS NIF 10/01/2004 1:28 PM Pages: 0.00 0:00 0:00 $o.00 unconditionally subordinate the lien or charge of the deed of trust first above mentioned to the lien or charge of the deed of trust in favor of Lender; and WHEREAS, it is to the mutual benefit of the parties hereto that Lender make such loan to Owner; and Beneficiary is willing that the deed of trust securing the same shall, when recorded, constitute a lien or charge upon said land which is unconditionally prior and superior to the lien or charge of the deed of trust first above mentioned. NOW, THEREFORE, in consideration of the mutual benefits accruing to the parties hereto and other valuable consideration, the receipt and sufficiency of which consideration is hereby acknowledged, and in order to induce Lender to make the loan above referred to, it is hereby declared, understood and agreed as follows: 1. That said deed of trust securing said note in favor of Lender, and any renewals or extensions thereof, shall unconditionally be and remain at all times a lien or charge on the property therein described, prior and superior to the lien or charge of the deed of trust above mentioned.. 2. That Lender would not make its loan above described without this subordination agreement. 3. That this agreement shall be the whole and only agreement with regard to the subordination of the lien or charge of the deed of trust above mentioned to the lien or charge of the deed of trust in favor of the lender above referred to and shall supersede and cancel, but only insofar as would affect the priority between the deeds of trust hereinbefore specifically described, any prior agreement as to such subordination including, but not limited, those provisions, if any, contained in the deed of trust first above mentioned, which provide for the subordination of the lien or charge thereof to another deed or deeds of trust or to another mortgage or mortgages. Beneficiary declares, agrees and. acknowledges that a. He consents to and approves (i) all provisions of the note and deed of trust in favor of Lender above referred to, and (ii) all agreements, including but not limited to any loan or escrow agreements, between Owner and Lender for the disbursement of the proceeds of Lender's loan; b. Lender in making disbursements pursuant to any such agreement is under no obligation or duty to, nor has Lender represented that it will, see to the application of such proceeds but the person or persons to whom Lender disburses such proceeds and any application or use of such proceeds for purposes other than those provided for in such agreement or agreements shall not defeat the subordination herein made in whole or in part; c. He intentionally and unconditionally waives, relinquishes and subordinates the lien or charge of the deed of trust first above mentioned in favor of the lien or charge upon said land of the deed of trust in favor of lender above referred to and understands that in reliance upon, and in consideration of, this waiver; relinquishment and subordination, specific loans and advances are being and will be made and, as part and parcel thereof, specific monetary and other obligations are being and will be entered into which would not be made or entered into but for said reliance upon this waiver, relinquishment and subordination; and Page 2 of 5 i d. An endorsement has been placed upon the note secured l y the deed of trust first above - mentioned that said deed of trust has by this instrument been subordinated to the lien or charge of the deed of trust in favor of Lender above referred to. NOTICE: THIS SUBORDINATION AGREEMENT CONTAINS A PROVISION WHICH ALLOWS THE PERSON OBLIGATED ON YOUR REAL PROPERTY SECURITY TO OBTAIN A LOAN A PORTION OF WHICH MAY BE EXPENDED FOR OTHER PURPOSES THAN IMPROVEMENT OF THE LAND. IT IS RECOMMENDED THAT, PRIOR TO THE EXECUTION OF THIS SUBORDINATION AGREEMENT, THE PARTIES CONSULT WITH THEIR ATTORNEYS WI'T'H RESPECT THERETO. City oLSan L is Obispo, Beneficiary:. oar elc-� APPROVED AS TO FORM: Ken Hampian, ity Administrative Officer UON&TRM P. LOWELL Owner(s): Attorney (ALL SIGNATURES MUST BE ACKNOWLEDGED) STATE OF CALIFORNIA COUNTY OF SAN LUIS OBISPO ON efore me personalyy appeared , tee. -a1I4 known to —e (or proved to me on the basis of satisfactory evidence) to be the person(o whose name( is /pt subscribed to the within instrument and acknowledged to me that t>Ahe /day executed the same in f*/her /thQj authorized capacity(>4, and that by 1*7her!j}c¢ signature( on the instrument the person(91 or the entity upon behalf of which the person( acted, executed the instrument. Witness n Signature M KIMBEFRLY A. HINES Commission #1450132 Notary Public Cammia W LUIS OBISPo COUNTY Cain om E tlxambm 6, 2007 Page 3 of 5 =IAL34-:Q STATE OF CALIFORNIA COUNTY OF SRru ,4 u w, O 2 tSe D ON V- o0y before me, 1%4LI i �l�Pci� GJalt►�ry Pbi:,personally appeared X, n w► n J , personally known to me we can the basis of saisfactoly-eqvidenc —_c) to be the person whose nam ) is/me subscribed to the within instrument and acknowledged to me that he/stiefthey executed the same in hisAter'dMir authorized capacity( *), and that by his/h 111 eir fN signatur 4.on the instrument the person(yak the entity upon behalf of which the person4acted, executed the instrument. Witness my hand and official seal Signature. OoNA90oe0 1441M Mr�Ow� �IpMMael.l, Page 4 of 5 INITI EXHIBIT "ONE" LOT 138 OF TRACT 2307, IN THE CITY OF SAN LUIS OBISPO, COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA, ACCORDING TO MAP RECORDED SEPTEMBER 25, 2001 IN BOOK 19, PAGE 77 OF MAPS. Page 5 of 5 INITIALS +1D OF DOC4JMIEiVT 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 0 0 RETURN TO: City Clerk City of San Luis Obispo 990 Palm Street San Luis Obispo, CA 93401 -3249 $ 136,175.00! DE TOLOSA PROMISSORY NOTE SECURED BY DEED OF TRUST Date: _August 19, 2003 At San Luis Obispo, California FOR VALUE RECEIVED, Lisa M Castello, ( "Maker ") promises to pay to the order of the City of San Luis Obispo ( "City") at 990 Palm Street, San Luis Obispo, California 93401 or such other address as City may from time to time designate, the sum of One Hundred Thirty -Six Thousand One Hundred Seventy -Five Dollars ($136,175.00) according to the terms set forth herein. This Note shall accrue interest, compounded monthly, 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 naming City as Beneficiary, covering certain real property ( "the Property") owned by Maker in the County of San Luis Obispo, State of California, commonly knows as 1651 Tonim Drive, which Property is more particularly described in Exhibit A, attached hereto. 32 2. Incorporation of Affordable Housing Agreement. This Note and the Deed of Trust are 33 executed and delivered pursuant to that certain "Affordable Housing Agreement" ( "Affordability 34 Agreement ") recorded in the County of San Luis Obispo on September 25, 2001 between City 35 and SLO Estates, Inc., regarding affordable housing requirements applying to the De Tolosa 36 Ranch Residential Development. Pursuant to the Affordability Agreement, Maker is to live at 37 the Property. Consequently, this Note is subject to section 711.5 of the California Civil Code, 38 which grants to City the authority to accelerate all amounts due under this Note if any subsequent 39 transfer of the Property at any time does not comply with the provisions of the Affordability 40 Agreement or Deed of Trust. The Affordability Agreement is incorporated herein by this 41 reference as though set forth in its entirety and attached hereto as Exhibit B. 42 43 3. City's Right of First Refusal. Upon resale, the City or the Housing Authority of the City 44 of San Luis Obispo shall have the first right of refusal to purchase the property at then current 45 appraised value. The consideration for the City's right of first refusal shall consist of 1 percent of 46 the remaining City loan balance. The balance of the City loan remaining after deducting this 1 ,pis -y-3 5 r Affordable Housing Promissory Note Page 2 1 percent of the loan balance shall be credited toward the purchase price if the City chooses to 2 exercise the purchase option. The provisions of this section shall not impair the rights of a first 3 mortgage lender secured by a recorded deed of trust. The purchase money lender shall have a 4 higher priority than the City's loan. The City's security shall be prioritized as a second mortgage. 5 This first priority applies to the purchase money lender's assignee or successor in interest, to: 6 7 i. Foreclose on the subject property pursuant to the remedies permitted by law and 8 written in a recorded contract or deed of trust; or 9 10 ii. Accept a deed of trust or assignment to the extent of the value of the unpaid first 11 mortgage to the current market value in lieu of foreclosure in the event of default 12 by a trustor; or 13 14 iii. Sell the property to any person at a fair market value price subsequent to 15 exercising its rights under the deed of trust. Any value in excess of the unpaid 16 mortgage and costs of sale administration shall be used to satisfy the City loan. In 17 no case may a first mortgage lender, exercising foreclosure assignment in -lieu of 18 foreclosure or sale, obtain value or rights to value greater than the value of the 19 outstanding indebtedness on the first mortgage at the time of the debt clearing 20 action. 21 22 The following types of transfers shall remain subject to the requirements of the City's loan 23 and right of first refusal: transfer by gift, devise, or inheritance to the owner's spouse; 24 transfer to a surviving joint tenant; transfer to a spouse as part of divorce or dissolution 25 proceedings; or acquisition in conjunction with a marriage. 26 27 4. Due on Transfer. In the event. Maker sells, leases, rents or otherwise transfers the 28 Property to any person or entity other than an "eligible household" (as such term is defined in the 29 Housing Agreement), then the Principal of and accrued interest on the Loan shall be immediately 30 due and payable to the City as set forth in the Deed of Trust in favor of City recorded 31 simultaneously herewith as a second deed of trust subordinate to the deed of trust of the first 32 mortgage lender on the Property. 33 34 5. Waiver of Principal and Interest. City waives timely payment of the Principal of and 35 interest on the Loan for such time as Maker, who has been determined by City or its Housing 36 Authority to be an eligible buyer, remains as the owner and occupant of the Property as Maker's 37 principal residence until September 30 ., 2033. 38 39 6. Forgiveness of Loan. City will forgive the repayment of the outstanding Principal of the 40 Loan and all interest thereon as long as Maker, or subsequent buyer determined by City or its Affordable Housing. Promissory Note Page 3 1 Housing Authority to be an eligible household, remains as the owner and occupant of the 2 Property as Maker's principal residence until September. , 2033. 3 4 7. Prepayment. This Note may not be prepaid in whole or in part, unless called due by City. 5 6 8. Payment. The amount due under this Note shall be paid without the necessity for notice 7 or demand by City. 8 9 9. Payment Amount. The amount due under this Note shall be paid from the net proceeds 10 as a result of any transfer. Net proceeds is the sales price minus any loans or liens that are senior 11 to this Note and minus closing costs. 12 13 10. Default Defined. In addition to other defaults referred to in this Note and the Deed of 14 Trust, it shall be a default under this Note if Maker fails to make any payment or perform any 15 obligation under or in connection with (a) this Note, (b) the Deed of Trust, or (c) any other note, 16 trust deed or other obligation of Maker relating to the Property, including but not limited to the 17 Affordability Agreement, or secured by all or any part of the Property, whether junior or senior to 18 this Note, and if such failure is not cured within such time as may be permitted by the obligation 19 or the obligee. 20 21 11. Options of City upon Default. Upon the occurrence of a default, City shall have the 22 option, without further notice or demand: 23 24 (a) To declare the Note to be immediately due and payable; 25 26 (b) If the default relates to a transfer of the Property, to bring an action at law or in 27 equity to require Maker and the proposed transferee to terminate and/or rescind the sales 28 contract or lease and/or to declare the transfer void, notwithstanding that the transfer may 29 have closed and become final as between Maker and the transferee; or 30 31 (c) To pursue any other remedy available under this Note or the Deed of Trust, or 32 at law or in equity or under any other agreement, instrument or document entered into by 33 Maker and City, including but not limited to the Affordability Agreement. 34 35 12. Failure to Exercise Options. Failure to exercise any such option upon the occurrence of 3.6 one or more events of default shall not constitute a waiver of City's right to exercise any such 37 option at a later time. 38 39 13. Costs of Enforcement and Collection. If Maker defaults under this Note, Maker shall 40 pay all costs of enforcement and collection, including, but not limited to, costs and attorney's Affordable Housing Promissory Note Page 4 1 fees, including reasonable attorney's fees, whether or not such enforcement or collection includes 2 filing a lawsuit or prosecution of a lawsuit, if filed. 3 4 14. City's Righi to Transfer Interest in Note. City and any subsequent holder of this Note 5 may at any time, without consent of Maker, sell, assign, pledge, hypothecate, transfer and 6 negotiate or grant participation in any part of or any interest in City's rights and benefits under 7 this Note to another governmental body or nonprofit organization which is eligible to receive 8 such transfer under state and federal law. lo 15. Waiver of Notice and Statute of Limitations. Except for any notice expressly requited 11 by this Note, Maker waives demand, notice of demand, presentation for payment, notice of non- 12 payment or dishonor, protest and notice of protest. To the fullest extent permitted by law, Maker 13 waives the defense of the statute of limitations in any action on this Note or to recover on the 14 security for this Note. 15 16 16. Liability. City's acceptance of any payment under this Note which is less than payment in 17 full of all amounts then due and payable, or the granting of any extension of time for payment of 18 any amount due under this Note or for the performance of any covenant, condition or agreement 19 entered into by Maker and City, or City's grant of any other indulgence to Maker, or City's taking 20 or release of other or additional security for the indebtedness evidenced hereby, or any other 21 modification or amendment of this Note shall in no way release or discharge the liability of 22 Maker or any endorser, guarantor or other person secondarily liable for this Note. 23 24 17. Governing Law. This Note shall be governed by the laws of the State of California. 25 Maker agrees that the site of any hearing or action of whatever nature or kind regarding this Note 26 shall be conducted in the County of San Luis Obispo, State of California. 27 28 18. Severability. If any provision of this Note or any application of such provision be 29 declared by a court to be invalid or unenforceable, such invalidity or unenforceability shall not 30 affect any other application of such provision or the balance of the provisions hereof, which 31 shall, to the fullest extent possible, remain in full force and effect. 32 33 MAKER: 34 O r7'Yl t°aa7i$� r 35 Lisa M. Castello 36 37 38 39 40 (attach notarization) 41 Affordable Housing Promissory Note Page 5 1 CITY: 2 3 .- 4. 5 Ken H pian, City Affiministrative Officer 6 7 8 9 APPROVED AS TO FORM AND LEGAL EFFECT: 10 11 12 13 Jonathan ow ,ad, City Attorney 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 3.3 34 35 36 • u .` 9 Affordable Housing Promissory Note Page 6 EXHIBIT "Al • DESCRIPTION OF REAL PROPERTY Lot 138 of Tract 2307, in the City of San. Luis Obispo, County of San Luis Obispo, State of California, according to map recorded September 2.5, 2001 . in Book 19, Page 77 of Maps, in the office of the County Recorder of said County. • Recording Requested by and when recorded return to: CITY OF SAN LUIS OBISPO Public Works Department 955 Morro Street San Luis Obispo, CA 93401 JULIE RO®EWAM ( NR San Luis Obispo Coun ClerkLRecorder 9/19/2003 1`1e60rdtid at the request of 9:26 AM Public D O c# 2003108320 Tales: 1 Pages: 2 i Fees 10.00 Taxes 0.00 Others 0.00 PAID $10.00 COVENANT TO INSTALL PUBLIC IMPROVEMENTS UPON REQUEST OF CITY WHEREAS, the undersigned own certain real property commonly known as 2302 and 2304 Santa Ynez, and WHEREAS, the undersigned have requested and been granted a temporary exception by the Public Works Director from the requirement of installing certain public improvements on said r property conditioned upon execution of a covenant by the property owner agreeing to install said v improvements at such time in the future as the city may request same. 0 NOW THEREFORE, in consideration of the granting of permission to temporarily defer the installation of certain public improvements consisting of. Curb, gutter & sidewalk per city standard along the Loomis Street frontage of said property. The scope of work shall include any additional grading, retaining walls, utility world andlor street improvements as required. Street trees shall be planted along the Loomis Street frontage to the satisfaction of the City Arborist. The undersigned owner(s) of property hereinafter described hereby covenant with the City of San Luis Obispo to install all of said public improvements without cost to City upon 30 days written notice from the City of San Luis Obispo requesting that said improvements be installed. Said property is located in the City of San Luis Obispo, County of San Luis Obispo, State of California, and is described as follows: 1. Parcel 4, Lot Line Adjustment 79 -01 (SLOAL 01 -192), recorded in Document Number 2002 - 034511 -4 in the Office of the County Recorder of said county. 2.. Assessors Parcel Number: 052- 136 -037 3. Commonly known as 2302 Santa Ynez with a 2nd dwelling unit known as 2304 Santa Ynez. This covenant shall run with the land and shall be binding upon the undersigned owners, their heirs, executors, administrators, and assigns. Dated this day of —2003. �i�3� Owner: Michael Villarreal State of California } County of San Luis Obispo } ell abe, A1(l�o� On , 2003, before me, Fame! otary Public, personally appeared Michael Villarreal, () personally known to me or (proved to me on the basis of satisfactory evidence to be the persons whose names are subscribed to the within instrument and acknowledged to me that they executed the same in their capacity, and that by their signatures on the instrument the persons or the entity upon behalf of which the persons acted, executed the instrument. Capacity claimed by signer(s): ( ) individual(s) ( ) corporation APPROVED: Public -Works Director ELIZABETH ALLISON Commission #1416602 Notary Public '10 Califomia SAN LUIS OBISPO COUNTY My Commw4n Expires May L, 2067 ( ) partnership City of San Luis Obispo (Authorization — Resolution No. 3897, 1979 Series) State of California County of San Luis Obispo PAMELA K. KING 'roe Commission # 1422138 Notary Public - Calitornio Son Luis Obispo County My Comm. Expkes Jul 2, 2007 On \�Q t 2t"00 ?" 2003, before me, Pamela K. King, Notary Public, personally appeared Michael . McCluskey, proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his capacity, and that by his signature on the instrument the person or the entity upon behalf of which the person acted, executed the instrument. Lness my hand an offi ial se . Pamela K. King, Notary Public Capacity claimed by signer: (X) potigency iAdoc manageme It\streets \...... \Covenant to Install State of Ca AVWELA K. KM Cc FIN *0 10144130 Noon► "Aft - caftcmlo son LUIS Oblgio county My Cocoas, Eupites Jut 2, 2007 Cotrmamm * 1422T3s NOW oubiYc - Catttoeda San Luls Obtapo County I Comm: Expires Jul 2. 20 4b y�. -f'.- T7-., PAMELA K. KING 'roe Commission # 1422138 Notary Public - Calitornio Son Luis Obispo County My Comm. Expkes Jul 2, 2007 On \�Q t 2t"00 ?" 2003, before me, Pamela K. King, Notary Public, personally appeared Michael . McCluskey, proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his capacity, and that by his signature on the instrument the person or the entity upon behalf of which the person acted, executed the instrument. Lness my hand an offi ial se . Pamela K. King, Notary Public Capacity claimed by signer: (X) potigency iAdoc manageme It\streets \...... \Covenant to Install State of Ca AVWELA K. KM Cc FIN *0 10144130 Noon► "Aft - caftcmlo son LUIS Oblgio county My Cocoas, Eupites Jut 2, 2007 Cotrmamm * 1422T3s NOW oubiYc - Catttoeda San Luls Obtapo County I Comm: Expires Jul 2. 20 1 2 RETURN TO: 4 City Clerk 5 City of San Luis Obispo 6 990 Palm Street 7 8 9 10 1.1 12 13 14 15 San Luis Obispo, CA 93401 -3249 $ 136,175.00! DE TOLOSA PROMISSORY NOTE SECURED BY DEED OF TRUST Date:—August 19, _2003 At San Luis Obispo, California 16 FOR VALUE RECEIVED, Lisa M Castello, ( "Maker ") promises to pay to the order of the City 17 of San Luis Obispo ( "City") at 990 Palm Street, San Luis Obispo, California 93401 or such other 18 address as City may from time to time designate, the sum of One Hundred Thirty-Six Thousand 19 One Hundred Seventy -Five Dollars ($136,175.00) according to the terms set forth herein. This 20 Note shall accrue interest, compounded monthly, at an annual rate of 4.5 percentage points 21 added to the I Ith District Cost of Funds, as published by the Federal Home Loan Bank Board, 22 amortized over 30 years. The Loan shall be amortized over thirty years, with monthly payments 23 of principal and interest due and payable to the City on the first day of each month unless waived 24 or forgiven, as set forth below. 2.5 26 1. Security for Note. This Note is secured by a deed of trust of even date herewith (the "Deed 27 of Trust ") executed by Maker, as Trustor, and naming City as Beneficiary, covering certain real 28 property ( "the Property ") owned by Maker in the County of San Luis Obispo, State of California, 29 commonly knows as 1651 Tonini Drive, which Property is more particularly described in Exhibit 30 A, attached hereto. 31 32 2. Incorporation of Affordable Housing Agreement. This Note and the Deed of Trust are 33 executed and delivered pursuant to that certain "Affordable Housing Agreement" ( "Affordability 34 Agreement ") recorded in the County of San Luis Obispo on September 25, 2001 between City 35 and SLO Estates, Inc., regarding affordable housing requirements applying to the De Tolosa 36 Ranch Residential Development. Pursuant to the Affordability Agreement, Maker is to live at 37 the Property. Consequently, this Note is subject to section 711.5 of the California Civil Code, 38 which grants to City the authority to accelerate all amounts due under this Note if any subsequent 3-9 transfer of the Property at any time does not comply with the provisions of the Affordability 40 Agreement or Deed of Trust. The Affordability Agreement is incorporated herein by this 41 reference as though set forth in its entirety and attached hereto as Exhibit B. 42 43 3. City's Right of First Refusal. Upon resale, the City or the Housing Authority of the City 44 of San Luis Obispo shall have the first right of refusal to purchase the property at then current 45 appraised value. The consideration for the City's right of first refusal shall consist of 1 percent of 46 the remaining City loan balance. The balance of the City loan remaining after deducting this 1 Affordable Housing Promissory Note Page 2 1 percent of the loan balance shall be credited toward the purchase price if the City chooses to 2 exercise the purchase option. The provisions of this section shall not impair the rights of a first 3 mortgage lender secured by a recorded deed of trust. The purchase money lender shall have a 4 higher priority than the City's loan. The City's security shall be prioritized as a second mortgage. 5 This first priority applies to the purchase money lender's assignee or successor in interest, to: 6 7 i. Foreclose on the subject property pursuant to the remedies permitted by law and 8 written in a recorded contract or deed of trust; or 9 10 ii. Accept a deed of trust or assignment to the extent of the value of the unpaid first 11 mortgage to the current market value in lieu of foreclosure in the event of default 12 by a trustor; or 13 14 iii. Sell the property to any person at a fair market value- price subsequent to 15 exercising its rights under the deed of trust. Any value in excess of the unpaid 16 mortgage and costs of sale administration shall be used to satisfy the City loan. In 17 no case may a first mortgage lender, exercising foreclosure assignment in -lieu of 18 foreclosure or sale, obtain value or rights to value greater than the value of the 19 outstanding indebtedness on the first mortgage at the time of the debt clearing 20 action. 21 2.2 The following types of transfers shall remain subject to the requirements of the City's loan 23 and right of first refusal: transfer by gift, devise, or inheritance to the owner's spouse; 24 transfer to a surviving joint tenant; transfer to a spouse as part of divorce or dissolution 25 proceedings; or acquisition in conjunction with a marriage. 26 27 4. Due on Transfer. In the event. Maker sells, leases, rents or otherwise transfers the 28 Property to any person or entity other than an "eligible household" (as such term is defined in the 29 Housing Agreement), then the Principal of and accrued interest on the Loan shall be immediately 30 due and payable to the City as set forth in the Deed of Trust in favor of City recorded 31 simultaneously herewith as a second deed of trust subordinate to the deed of trust of the first 32 mortgage lender on the Property. 33 34 5. Waiver of Principal and Interest. City waives timely payment of the Principal of and 35 interest on the Loan for such time as Maker, who has been determined by City or its Housing 36 Authority to be an eligible buyer, remains as the owner and occupant of the Property as Maker's 37 principal residence until September 3O ., 2033. 38 39 6. Forgiveness of Loan. City will forgive the repayment of the outstanding Principal of the 40 Loan and all interest thereon as long as Maker, or subsequent buyer determined by City or its I - • • Affordable Housing Promissory Note Page 3 1 Housing Authority to be an eligible household, remains as the owner and occupant of the 2 Property as Maker's principal residence until September, , 2033. 3 4 7. Prepayment. This Note may not be prepaid in whole or in part, unless called due by City. 5 6 8. Payment. The amount due under this Note shall be paid without the necessity for notice 7 or demand by City. 8 9 9. Payment Amount. The amount due under this Note shall be paid from the net proceeds 10 as a result of any transfer. Net proceeds is the sales price minus any loans or liens that are senior 1.1 to this Note and minus closing costs. 1.2 13 10. Default Defined. In addition to other defaults referred to in this Note and the Deed of 14 Trust, it shall be a default under this Note if Maker fails to make any payment or perform any 15 obligation under or in connection with (a) this Note, (b) the Deed of Trust, or (c) any other note, 16 trust deed or other obligation of Maker relating to the Property, including but not limited to the 17 Affordability Agreement, or secured by all or any part of the Property, whether junior or senior to 18 this Note, and if such failure is not cured within such time as may be permitted by the obligation 19 or the obligee. 20 21 11. Options of City upon .Default. Upon the occurrence of a default, City shall have the 22 option, without further notice or demand: 23 24 (a) To declare the Note to be immediately due and payable; 25 26 (b) If the default relates to a transfer of the Property, to bring an action at law or in 2.7 equity to require Maker and the proposed transferee to terminate and/or rescind the sales 28 contract or lease and/or to declare the transfer void, notwithstanding that the transfer may 29 have closed and become final as between Maker and the transferee; or 30 31 (c) To pursue any other remedy available under this Note or the Deed of Trust, or 32 at law or in equity or under any other agreement, instrument or document entered into by 33 Maker and City, including but not limited to the Affordability Agreement. 34 35 12. Failure to Exercise Options. Failure to exercise any such option upon the occurrence of 16 one or more events of default shall not constitute a waiver of City's right to exercise any such 37 option at a later time. 38 39 13. Costs of Enforcement and Collection. 'If Maker defaults under this Note, Maker shall 40 pay all costs of enforcement and collection, including, but not limited to, costs and attorney's Affordable Housing Promissory Note Page 4 1 fees, including reasonable attorney's fees, whether or not such enforcement or collection includes 2 filing a lawsuit or prosecution of a lawsuit, if filed. 3 4 14. City's Right to 'Transfer Interest in Note. City and any subsequent holder of this Note 5 may at any time, without consent of Maker, sell, assign, pledge, hypothecate, transfer and 6 negotiate or grant participation in any part of or any interest in City's rights and benefits under 7 this Note to another governmental body or nonprofit organization which is eligible to receive 8 such transfer under state and federal law. 9 10 15. Waiver of Notice and Statute of Limitations. Except for any notice expressly required 11 by this Note, Maker waives demand, notice of demand, presentation for payment, notice of non - 1.2 payment or dishonor, protest and notice of protest. To the fullest extent permitted by law, Maker 13 waives the defense of the statute of limitations in any action on this Note or to recover on the 14 security for this Note., 15 16 16. Liability. City's acceptance of any payment under this Note which is less than payment in 17 full of all amounts then due and payable, or the granting of any extension of time for payment of 18 any amount due under this Note or for the performance of any covenant, condition or agreement 19 entered into by Maker and City, or City's grant of any other indulgence to Maker, or City's taking 20 or release of other or additional security for the indebtedness evidenced hereby, or any other 21 modification or amendment of this Note shall in no way release or discharge the liability of 22 Maker or any endorser, guarantor or other person secondarily liable for this Note.. 23 24 17. Governing Law. This Note shall be governed by the laws of the State of California. 25 Maker agrees that the site of any hearing or action of whatever nature or kind regarding this Note 26 shall be conducted in the County of San Luis Obispo, State of California. 27 28 18. Severability. If any provision of this Note or any application of such provision be 29 declared by a court to be invalid or unenforceable, such invalidity or unenforceability shall not 30 affect any other application of such provision or the balance of the provisions hereof, which 31 shall, to the fullest extent possible, remain in full force and effect. 32 33 MAKER: 34 35 Lisa M. Castello 36 37 38 39 40 (attach notarization) 41 Affordable Housing Promissory Note Page 5 1 CITY: 2 3 4 5 Ken HAmpian, City Aministrative Officer 6 7 8 9 APPROVED AS TO FORM AND LEGAL EFFECT: 10 11 12 13 Jonathan ow , City Attorney 14 15 16 1.7 18 .19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 Affordable Housing Promissory Note Page 6 EXHIBIT "A' n u DESCRIPTION OF REAL PROPERTY Lot 138 of Tract 2307, in the City of San Luis Obispo, County of San Luis Obispo, State of California, according to map recorded September 25, 2001 in Book 19, Page 77 of Maps, in the office of the County Recorder of said County.