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HomeMy WebLinkAboutAgreement and Promissory Note Secured by Deed of Trust� d��r�rwc- ��4�c:srE� 3� C uE�r /� Ti rC.� loao63- �� xETU�v To: City of Arroyo Grande Community Development Director 214 East Branch Street P.O. Box 550 Arroyo Grande, CA 93421 ... JULIE RODEWALD San Luis Obispo County—Clerk/Recorder Necorded at ihe request Cuesta Title Com{ �oc�: 2002099223 I IIIII IIIIII IIIIIIIIIIIIII III AGREEMENT AND PROMISSORY NOTE SECURED BY DEED OF TRUST $30,000 Titles: 1 Fees Taxes Others PAID �o ivia►zoo2 8:00 AM Po98S: 5 ,s.00 0.00 0.00 $19.00 Date: October 1. 2002 At: Arroyo Grande, Califomia FOR VALUE RECEIVED, JOSHIJA BLAIR and JAYDI'N BLAIR (collectively "Maker") promise to pay to the order of the CITY OF ARROYO GRt1NDE ("City") or order at 214 East Branch Street, Arroyo Grande, California 93420 or such other place as City may from time to time designate in writing, the principal sum of Thirty Thousand Dollars ($30,000), according to the terms set forth herein with simple interest at the rate of six percent (6%) per annum, compounded annually, on the unpaid principal balance from the date of this Promissory Note (`Note') until paid, 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, which Property is described in Exhibit A, attached hereto. 2. Incorporation of Affordable Housin�Agreement. This Note and the Deed of Trust aze executed and delivered pursuant to that certain "Affordable Housing AgreemenY' ("Housing AgreemenY') recorded in the County of San Luis Obispo�OjYy concurrenti� between Pf City and MATTHEW G. MAURER and JOANNE A. MAURER regazding affordable housing requirements applying to the property. Pursuant to the Housing Agreement, Maker is to live at the Property. Consequently, this Note is subject to section 711.5 of the Califomia 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 ttus reference as though set forth in its entirety and attached hereto as Exhibit B. This document is being recorded by Cuesta Title Guaranty Co. as an ACCOMODATION ONLY and has not been examined as to its execution, validity or its ettect upon the tftle. - \. ! 3. City's Ri�ht 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 appraised value. The consideration for the City's right of first refusal shall consist of one percent (1%) of the remaining City loan balance. The balance of the City loan remaining after deducting this one percent (1%) of the loan balance shall be credited towazd the purchase price if the City chooses to exercise the purchase option. The provisions of this section shall not impair the rights of a first mortgage lender secured by a recorded deed of trust. The purchase money lender shall have a higher priority than the City's loan. The City's security shall be prioritized as a second mortgage. This first priority applies to the purchase money lender's assignee or successor in interest, to: a. Foreclose on the Property pwsuant to the remedies permitted by law and written in a recorded contract or deed of trust; or b. Accept a deed of trust or assignment to the extent of the value of the unpaid first mortgage to the current mazket value in lieu of foreclosure in the event of default by a trustor; or c. Sell the Property to any person at a fair market value price subsequent to exercising its rights under the deed of trust. Any value in excess of the unpaid mortgage and costs of sale administration shall be used to satisfy the City loan. In no case may a first mortgage lender, exercising foreclosure assigunent in-lieu of foreclosure or sale, obtain value or rights to value greater than the value of the outstanding indebtedness on the first mortgage at the time of the debt clearing action. The following types of transfers shall remain subject to the requirements of the City's loan and right of first refusal: transfer by gift, devise, or inheritance to the owner's spouse; transfer to a surviving joint tenant; transfer to a spouse as part of divorce or dissolution proceedings; ar acquisition in conjunction with a marriage. 4. Due on Transfer In the event Maker sells, leases, rents or otherwise transfers the Property to any person or entity other than an"eligible household" (as such term is defined in the Housing Agreement), then the Principal of and accrued interest on the Loan shall be immediately due and payable to the City as set forth in the Deed of Trust in favor of City recorded simultaneously herewith as a second deed oF trust subordinate to the deed of trust of the first mortgage lender on the Property. 5. Waiver of Principal and Interest. City waives timely payment of the Principal of and interest on the Loan for such time as Maker, or subsequent buyer determined by City or the Housing Authority to be an eligible household, remains as the owner and occupant of the Property as Maker's principal residence until October 1, 2032. 6. For�iveness of Loan. City will forgive the repayment of the outstanding Principal of the Loan and all interest thereon as long as Maker, or subsequent buyer determined by City or the Housing Authority to be an eligible household, remains as the owner and occupant of the Property as Maker's principal residence until October 1, 2032. 2 ,,. 7. Pre�vment. This Note may be prepaid in whole or in part. 8. Pavment. The amount due under this Note shall be paid without the necessity for notice or demand by City. 9. Pavment Amount. The amount due under this Note shall be paid from the net proceeds as a result of any transfer. Net proceeds is the sales price minus any loans or liens that are senior to this Note and minus closing costs. The City shall forgive the principal and interest due under this Note at the time of a transfer, prepayment, or repayment of this Note to the extent necessary to ensure that the Bonower's obligations to repay the principal and interest due on this Note and on all promissory notes secured by deeds of trust superior to the Deed of Trust, plus the amount of the Borrower's downpayment, do not exceed the Fair Mazket Value of the Residence. 10. Default Defined In addition to other defaults referred to in this Note and the Deed of Trust, it shall be a default under this Note if Maker fails to make any payment or perform any obligation under or in connection with (a) this Note, (b) the Deed of Trust, or (c) any other note, trust deed or other obligation of Maker relating to the Property, including but not limited to the Housing Agreement, or secured by all or any part of the Property, whether junior or senior to this Note, and if such failure is not cured within such time as may be permitted by the obligation or the obligee. 11. Options of City upon Default. Upon the occurrence of a default, City shall have the option, without further notice or demand: a. To declare the Note to be immediately due and payable; b. If the default relates to a transfer of the Property, to bring an action at law or in equity to require Maker and the proposed transferee to terminate and/or rescind the sales contract or lease and/or to declare the transfer void, notwithstanding that the transfer may have closed and become final as beriveen Maker and the transferee; or c. To pursue any other remedy available under this Note or the Deed of Trust, or at law or in equity or under any other agreement, instrument or document entered into by Maker and City, including but not limited to the Housing Agreement. 12. Failure to Exercise OQtions. Failure to exercise any such option upon the occurrence of one or more events of default shall not constitute a waiver of City's right to exercise any such option at a later time. 13. Costs of Enforcement and Collection. If Maker defaults under this Note, Maker shall pay all costs of enforcement and collection, including, but not limited to, costs and attorney's fees, including reasonable attomey's fees, whether or not such enforcement or collection includes filing a lawsuit or prosecution of a lawsuit, if filed. ,_. � 14. City's RiEht to Transfer Interest in Note. City and any subsequent holder of this Note may at any time, without consent oF Maker, sell, assign, pledge, hypothecate, transfer and negotiate or grant participation in any part of or any interest in City's rights and benefits under this Note to another governmental body or nonprofit organization which is eligible to receive such transfer under state and federal law. 15. Waiver of Notice and Statute of Limitations. Except for any notice expressly required by this Note, Maker waives demand, notice of demand, presentation for payment, notice of non- payment or dishonor, protest and notice of protest. To the fullest extent permitted by law, Maker waives the defense of the statute of limitations in any action on this Note or to recover on the security for this Note. 16. Liabili . City's acceptance of any payment under this Note which is less than payment in full of all amounts then due and payable, or the granting of any extension of time for payxnent of any amount due under this Note or for the performance oF any covenant, condition or agreement entered into by Maker and City, or City's grant of any other indulgence to Maker, or City's taking or release of other or additional security far the indebtedness evidenced hereby, or any other modification or amendment of this Note shall in no way release or dischazge the liability of Maker or any endorser, guazantor or other person secondarily liable for this Note. 17. Governing Law. This Note shall be govemed by the laws of the State of California. Maker agrees that the site of any hearing or action of whatever nature or kind regarding this Note shall be conducted in the County of San Luis Obispo, State of California. 18. Severabilitv. If any provision of this Note or any application of such provision be declared by a court to be invalid or unenforceable, such invalidity or unenforceability shall not affect any other application of such provision or the balance of the provisions hereof, which shall, to the fullest extent possible, remain in full force and effect. CITY: �� `�te en Adams, City Manager APPROVED AS TO FORM AND LEGAL EFFECT: � � � Ti thy J. C , ity � � � E�isiT «A DESCRIPTION OF REAL PROPERTY Pazcel 2 of Pazcel Map AG 95-068 in the City of Arroyo Grande, County of San Luis Obispo, State of California, according to the Map filed November 6, 1996, in Book 52, Page 25 of Pazcel Maps. 5 �t�l� 0� �O�UMENT.