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HomeMy WebLinkAboutChegdian, Vera D.; 1988-10-12;0857 1. Payment of Principal and Interest. Borrower shall pr~tly pay when clue the principal of and interest on the indebtedness evidenced by the Note, and the principal of and interest on any Future Advances secured by this Deed of Trust. 2. Qcclpncy. Borrower will occupy the Property as Borrower's principal residence and be the sole occupant of property conveyed by this Deed of Trust. This restriction includes, but is not limited to, prohibition of Borrower's renting or otherwise leasing the Property with or without consideration. 3. Sale or Transfer of Property. Before the sale or transfer of title, the Borrower or the Borrower's representative shall notify the Lender of his or her intention to sell or otherwise transfer title. Except as otherwise provided in this Deed of Trust, when Borrower transfers title, the entire Loan which is evidenced by the Note and additionally secured by the security Agreement, shall be inmediately due and payable. ~here title is transferred to, or otherwise altered to include or favor, a spouse or person signing the Note and Security Agreement, and such spouse or person resides on the Property conveyed in this Deed of Trust and is independently el iglble for assistance under the Program, the transfer or alteration of title shall not result in acceleration of the Loan evidenced by the Note and Securi,ty Agreement. Similarly, when a spouse or person signing the Note takes title to the Property which secures this Deed of Trust by devise, descent or by operation of law upon the death of a joint tenant and such spouse or person resides on the Property and is independently eligible for assistance under the Program, the transfer of title shall not result in acceleration of the loan evidenced by the Note. Upon sale of the Property, the Lender shall be paid the amounts described in the Note, in part, from the increase, if any, of the fair market value at the time of sale over the purchase price or the resale price of the property (as these terms are defined in the Note), whichever is greater. For this reason, if the Borrower determines to sell the Property, he or she has the affirraative duty to protect the interest of the Lender by selling the property at its fair mar~et value. When the proposed transfer is to be made pursuant to a proposed sale, the Borrower shall notify the Lender of the sales price agreed upon by the Borrower and the proposed purchaser of the Property. The Lender shall then appoint, within ten (10) working days of receipt of Borrower's notification, an appraiser to determine if the proposed sales price is at fair market value. The Borrower shall be informed within thirty (30) working days of the appraiser's determination of fair market value. 4. Charges: Liens. Borrower shall pay when due all taxes, assessments and other charges, f ines and impositions attributable to the Property which may attain a priority over this Deed of Trust. Borrower shall proq>tly furnish to Lender all notices of amounts due and paid under this paragraph. Borrower shall proq>tly dfscharge any lien which has priority over this Deed of Trust; provided, that Borrower shall not be required to discharge any such lien so long as Borrower shall agree in writing to the payment of the obligation secured by such lien in a manner acceptable to Lender, or shall in good faith contest such lien in a manner acceptable to Lender, or shall in good faith contest such lien by, or defend enforcement of such lien in, legal proceedings which operate to prevent the enforcement of the lien or forfeiture of the Property or any part thereof. Borrower shall not allow the attachment of any subordinate lien or other encunbrance on the Property without prior written consent of the Lender. 5. Preservation and Maintenance of Property: C01pliance with Doc1111ents. Borrower shall keep the Property in good repair and shall not coamit waste or permit impairment or deterioration of the Property. Borrower shall perform all of Borrower's obligations under the articles and bylaws and constituent doclJ'flents creating and governing Lender . Borrower shall perform all of Borrower's obligations under and pay when due all assessments and charges required by the Lender and any special assessments and charges made by the Lender. 6. Protection of Lender's security. If Borrower fails to perform the covenants and agreements contained in this Deed of Trust, including those contained in the Note and the security Agreement, or ff any action or proceeding is conrnenced which materially affects Lender's interest in the Property, including, but not limited to, eminent domain, insolvency, code enforcement, or arrangements or proceedings involving a bankruptcy or decedent, then trustee at Lender's option, upon notice to Borrower, may make such appearances, disburse such suns, and take such action as is necessary to protect Lender's interest, including, but not limited to, disbursement of reasonable attorney's fees and entry upon the Property to make repairs. Any amounts disbursed pursuant to this Section, with interest thereon, shall become additional indebtedness of Borrower secured by this Deed of Trust. Unless Borrower and Lender agree to other terms of payment, such amounts shall be payable upon notice from Lender to Borrower requesting payment thereof, and shall bear interest from the date of disbursement at the rate of 15X per annum, unless payment of interest at such rate would be contrary to applicable Law, in which event, such amounts shall bear interest al the highest rate permissible under applicable law. Nothing contained in this Section shall require Lender to incur any expense or take any action hereunder. 7. Inspection. Lender may make or cause to be made reasonable entries upon and inspection of the Property, provided that Lender shall give Borrower notice prior to any such inspection specifying reasonable cause therefor.related to Lender's interest in the Property. 8. Condenrlation. The proceeds of any award or claim for damages, direct or consequential, in comection with any condemnation or other taking of the Property, or part thereof, or for conveyance in lieu of condemnation, are hereby assigned 2 0858 and shall be paid to Lender. In the event of a total taltfng of the Property, the proceeds shall be treated as ff received from a sale of the Property. The proceeds shall be applied to the suns to be repaid in the amount and mamer described in Sections I.A. of the Note. Any part of the proceeds remaining after these afflOU"lts have been paid shall be paid to the Borrower. In the event of a partial taking of the Property, t.nless Borrower and Lender otherwise agree in writing, the proceeds shall be treated as if received from a sale of that portion of the Property which is taken in the condennation. The percentage value of the portion taken, as coq>ared to the full value of the entire Property, shall be determined by dividing the condetmation proceeds by the fair market value of the entire Property just prior to the taking. This percentage value, once determined, shall be used in the following manner to allocate the condemnation proceeds: a. First, to the amount of principal owing under Section I.A. of the Note shall be allocated. the value equal to the percentage value determined above nultiplied by the principal then outstanding in Section I.A. of the Note. b. Second, to the contingent interest described in Section I.A. of the Note shall be allocated the value equal to the fair market value of the entire Property just prior to the condemnation minus the purchase price (as this term is defined in the Note) rool ti plied by the percentage value determined above n..il tipl ied by the percentage value set out in Section I .A. of the Note (or the most recent calculation· of this lat_ter percentage value). c. Third, to the Borrower. Following the malting of the above allocations of an award in partial condemnation, the principal anount owing under Section I.A. of the Note and the purchase price of the Property, as this term is defined in the Note, shall both be reduced for al l purposes by the percentage value determined above. The percentage value set out in Section I.A. of the Note shall not be affected by any allocation of an award in partial condetmation. If the Property is abandoned by Borrower, or if after notice by Lender to Borrower that the condemnor offers to rake an award or settle a claim for damages, and Borrower fails to respond to Lender within 30 days after the date such notice is mailed. Lender is authorized to collect and apply the proceeds, at Lender's option, either to restoration or repair of the Property or to the suns secured by this Deed of Trust. Unless Lender and Borrower otherwise agree in writing, any such application of proceeds to principal shall not extend or postpone the due date of the payments referred to in Sections 1 and 4 hereof. 9. Hazard Insurance. The Borrower shall maintain hazard insurance on mobilehome. In the event of a distribution of hazard insurance proceeds in lieu of replacement, restoration or repair following a loss to the Exclusive Use Area of Borrower or to the cOIIIIIOn areas and facilities of the Lender, any such proceeds payable to Borrower are hereby assigned and shall be paid to Lender. In the event of a total loss of the Property, the proceeds shall be treated as if received from a sale of the Property. The proceeds shall be applied to the suns to be repaid in the amount and manner described in Section I.A. of the Note. Any part of the proceeds remaining after these amounts have been paid shall be paid to the Borrower. In the event of a partial loss of the Property, unless Borrower and Lender otherwise agree in writing, the proceeds shall be treated as if received from a sale of that portion of the Proper-ty which is lost and being COll1)ensated for by insurance. The percentage value of the portion lost, as c~red to the full value of the entire Property, shall be determined by dividing the insurance proceeds by the fair market value of the entire Property just prior to the loss. This percentage value, once determined, shall be used in the following manner to allocate the insurance proceeds specified in Section 8 regarding the allocation of Condennation proceeds. Following the making of the above allocations of an insurance award in case of a partial loss, the principal amount owing under Section I.A. of the Note and the purchase price of the Property, as this term is defined in the Note, shall both be reduced for all purposes by the percentage value determined above. The percentage value set out in Section I.A. of the Note shall not be affected by any allocation of an award in partial condennation. If the property is abandoned by Borrower, or if after notice to Borrower that the insuror or third party causing the loss offers to make an award or settle a claim for damages, Borrower fai ls to respond to Lender within thirty (30) days after the date such notice is mailed, is authorized to collect and apply the proceeds, at option, either to restoration or repair of the Property or to the suns secured by this Deed of Trust. 10. Lenter•s Prior Consent. Borrower shall not, except after notice to Lender and with Lender's prior written consent, consent to: (i) the abandonment or termination of the Lender; (ii) any material amenctnent to t he Covenants, Conditions and Restrictions, Articles of Incorporation, By-laws of the 3 0859 Lender, or any eq.iivalent constituent docunent of the Lender, including, but not limited to, any amendnent which would change the percentage interests of the owners in the cOll'fllOn areas and fac ilities of the Lender. (iii) the transfer, release, encl.111brance, partition or suxlivision of all or any part of the Nonprofit's conmon areas and faci lities, except as to the Lender's right to grant easements for utilities and similar or related purposes. 11. Borrower Not Released. Extension of the time for schedule of the sums secured by this Deed of Trust and the Security Agreement granted by Lender to any successor in interest of Borrower shall not operate to release, in any manner, the l i obi l i ty of the original Borrower and Borrower's successors in interest. Lender shall not be required to coomence proceedings against such successor or refuse to extend time for payment of the sums secured by this Deed of Trust and the Security Agreement by reason of any dellland made by the original Borrower and Borrower's successors in interest. 12. Forbearance by Lender Not a Waiver. Any forbearance by Lender in exercising any right or remedy hereunder, or otherwise afforded by applicable law, shall not be a waiver of or preclude the exercise of any such r ight or remedy. The procurement of insurance or the payment of taxes or other liens or charges by Lender shall not be a waiver of Lender's right to accelerate the maturity of the indebtedness secured by this Deed of Trust and the Security Agreement. 13. Retnedies Cunulative. All remedies provided in this Deed of Trust are distinct and cuwlative to any other right or remedy under this Deed of Trust or afforded by law or equity, and may be exercised concurrently, independently or successively. 14. Successors and Assigns Bound; Joint and Several Liability; Captions. The covenants and agreements contained in this Deed of Trust shall bind, and the rights hereunder shall inure to, the respective successors and assigns of Lender and Borrower, subject to the provisions of Section 17 hereof. All covenants and agreements of Borrower shall be joint and several. The captions and headings of the paragraphs of this Deed of Trust are for convenience only and are not to be used to interpret or define the provisions hereof. 15. Notice. Except for any notice required under applicable law to be given in another manner, (a) any notice to Borrower provided for in this Deed of Trust shall be given by mail in9 such notice by certified mail addressed to Borr_ower at the Property Address or at such other address as Borrower may designate by notice to Lender as provided in this Section, and (b) any notice to Lender shall be given by certified mai l, return recei pt requested, to Lender's addresses stated in this Deed of Trust or to such other address as Lender may designate by notice to Borrower as provided in this Section. Any notice provided for in this Deed of Trust shall be deemed to have been given to Borrower or Lender 11hen given in the manner designated herein. 16. Governing Law; Severability. This Deed of Trust shal l be governed by the law of California. In the event that any provision or clause of this Deed of Trust or the Note or the Security Agreement conflicts with applicable law, such conflict shall not affect other provisions of this Deed of Trust or the Note or the Security Agreement which can be given effect without the conflicting provision, and to this end the provisions of the Deed of Trust, the ijote, and the Security Agreement are declared to be severable. 17. Borrower's copy. Borrower shall be furnished a conformed copy of this Deed of Trust, the Note, and the security Agreement at the time of execution or after recordation hereof. 18. Sale or Transfer of the Property. If all or any of the property or an interest in it is sold or transferred by Borrower, excluding permitted transfers to a spouse or other person signing the Note and the Security Agreement in the manner described in Section 4 above, all the Sl.lllS secured by this Deed of Trust and the Security Agreement shall be immediately due and payable. In the event of such an acceleration, Lender shall mai l Borrower notice of the acceleration in accordance with Section 19 hereof. Such notice shal l provide a period of not less than 30 days from the date the notice is mailed within which-Borrower may pay the sums declared due. If Borrower fails to pay such SllllS prior to the expiration of such period, Lender may, without further notice or demand on Sorrower, invoke any remedies permitted by Section 19 hereof. 19. Acceleration; Remedies. Except as provided in Section 16 hereof, upon Borrower's breach of any covenant or agreement of Borrower in this Deed of Trust, the Security Agreement or the Note, and incorporated by reference in this Deed of Trust, including the covenants to pay when due any sums secured by this Deed of Trust, Lender prior to acceleration shall mail notice to Borrower as provided in Section 15 hereof specifying: (1) the breach; (2) the action required to cure such breach; (3) a date, not less than 30 days from the date the notice is mailed to Borrower, by wh ich such breach nust be cured; and (4) that failure to cure such breach on or before the date specified in the notice may result in acceleration of the sums secured by this Deed of Trust and the Security Agreement and sale of Property. The notice shall further inform Borrower ot his or her right to reinstate after acceleration and of the right to bring a court action to assert the non-existence of a default or any other defense of Borrower to acceleration and sale. If the breach is not cured on or before the date specified· in the notice, Lender may declare all of the suns secured by this Deed of Trust to be inrnediately due and payable without further demand and may invoke the power of sale and any other remedies permitted by applicable law. Lender shall be entitled · to collect all reasonable costs and expenses incurred in pursuing the remedies provided in this Section 19, including, but not limited to, reasonable attorney's fees. 4 0860 If Lender invokes the power of sale, lender shall have appraised the Property to determine its fair market value. Len:ler shall also execute or cause Trustee to execute a written notice of the occurrence of any event of default and of Lender's election to cause the Property to be sold and shall cause such notice to be recorded in each county in which the Property or some part thereof is located. Lender or Trustee shall mail copies of such notice in the 11amer· prescribed by applicable law to Borrower and to the other persons prescribed by applicable law. Trustee shall give public notice of sale to the persons an:I in the mamer prescribed -by applicable law. After the lapse of such tine as 11ay be required by applicable law, Trustee, without demand on Borrower, shall sell the Property at public auction to the highest bidder at the time and place and under the terms designated in the notice of sale in one or more parcels and in such order as Trustee may determine. Trustee may postpone sale of all or ariy parcel of the property by pu,l ic amouncement at the time and place of any previously scheduled sale. Lender or lender's designee may purchase the Property at any sale. Trustee shall deliver to the purchaser Trustee's deed conveying the Property so sold without any covenant or warranty, expressed or i111>lied. The recitals in the Trustee's deed shall be prime facie evidence of the truth of the statements made therein. Trustee shall apply the proceeds of the sale in the following order: (a) to all reasonable costs and expenses of the sale, including, but not limited to, reasonable Trustee's and attorney's fees and costs of title evidence; Cb) to all suns secured by this Deed of Trust, as evidenced by the Note. As to the indebtedness evidenced by Section I.A. of the Note, such siins secured by this Deed of Trust shall include the principal amount stated in Section I.A. (or the most recent recalculation of this amount made as provided for in t he Note) plus contingent interest in an alllOll"lt equal to the percentage value, as stated in Section I.A. (or the most recent recalculation of this value made as provided for in the Note), of the excess of the appraised fair market value of the Property just prior to the Trustee's sale over the purchase price; an:I (c) the excess, if any, to the person or persons legally entitled thereto. 20. Borrower's Right to Reinstate. Notwithstanding Lender's acceleration of the suns secured by this Deed of Trust, Borrower shall have the right to have any proceedings begun by Lender to enforce covenants of this Deed of Trust relating to sUIS due ard payable by Borrower discontinued at any time prior to five days before the Property is first scheduled for sale pursuant to the power of sale contained in this Deed of Trust or at any time prior to entry of a judgement enforcing this Deed of Trust, if: (a) Borrower pays Lender all sums which would be then due under this Deed of Trust, the Note and notes securing Future Advances, if any, had no acceleration occurred; Cb) Borrower pays all reasonable expenses incurred by Lender and Trustee in enforcing the covenants and agreements of Borrower contained in this Deed of Trust, an:I in enforcing Lender's and Trustee's remedies as provided in Section 19 hereof, including, but not limited to, reasonable attorney's fees; and Cc) Borrower ta~es such action as Lender may reasonably require to assure that the lien of this Deed of Trust, Lender's interests in the Property, and Borrower's obi igation to pay the sums secured by this Deed of Trust shall continue uniq,aired. Upon such payment and cure by Borrower, this Deed of Trust and the obligations secured hereby shall remain in full force and effect as if no acceleration had occurred. 21. Appointment of Receiver; Lender in Possession. Upon acceleration under Section 19 hereof or abandonment of the Property, Lender, by agent or by judicially appointed receiver, shall be entitled to enter upon, take possession of, rent and manage the Property and to collect the rents of the Property. Borrower agrees to surrender possession of the Property to Lender or receiver upon demand. If Borrower remains in possession after such demand, such possession shall be as tenant of the Lender or receiver, and Borrower agrees to pay 1110nthly in advance to Lender or receiver such rent as lender.or receiver may demand, and in default of so doing, Borrower may also be dispossessed by surmary proceedings or otherwise. All rents collected by Lender or the receiver shall be applied first to payment of the cost of management of the Property and collection of rents, including, but not limited to, receiver's fees, premillllS on receiver's bonds and reasonable attorney's fees, and then to the sums secured by this Deed of Trust. Lender and the receiver shall be liable to account only for those rents actually received. 22. Future Advances. Upon request of Borrower, Lender, at Lender's option prior to full reconveyance of the Property by Trustee to Borrower, may make future Advances to Borrower. Such future Advances, with interest thereon, shall be secured by this Deed of Trust when evidenced by promissory notes stating that said notes are secured by this Deed of Trust. 23. Reconveyance. Upon payment of all sums secured by this Deed of Trust, Lender shall request trustee to reconvey the Property and shall surrender this Deed of Trust and all. notes evidencing indebtedness secured by this Deed of Trust to Trustee. Trustee shall reconvey the Property without warran~y and without charge to the person or persons legal ly entitled thereto. Such person or persons shall pay all costs of recordation, if any. 24. Request for Notice. Borrower requests that copies of the Request for Notice of Default and Notice of Sale i.Je sent to Borrower's address which Is the Property Address. IN WITNESS THEREOF, Borrower has executed this Deed of Trust. -Yea.a ~ • ~r-d,_J.UV . Witnessed By: __________ ---__________ _ Borrower •J (Print Name) Borrower (Signature) 5 0863 EXHIBIT "A" A Condominium Compr~sed Of: SOLAMAR PARCEL 1: An undivided l/108th interest in and to a portion of Lot Hof RANCHO AGUA HEDIONDA, in the City of Car_lsbad, County of San Diego, State of California, a~cording co Map thereof No. 823 filed in the Office of the County Recorder of San biego County, November 16, 1896, more particularly described as follows: Beginning at a point on the Southerly boundary of said RANCHO AGUA REDIONDA, said Point of Beginning being also the Southwest corner of that parcel of land described in deed to the Atchison, Topeka and Santa Fe Railway Compeny recorded August 29, 1946 in Book 2216 at Page 412 of Official Records of said San Diego County; thence Northerly along the Westerly boundary of said "railroad" parcel the Northerly along the Westerly boundary of said "railroad" parcel the following courses: North 23 ° 12' 20" Vest, 963. 14 feet ( record North 25 ° 54' \leadt 964. 26 feet) thence North 66 ° 47' «>" East, 25.00 feet ( record North 64 • 06' East) thence North 23° 11' 19" West, 601.58 feet (record North 25° 54' West, 600.00 feet) to a point on the Westerly right-of-way line of the 100.00 foot right-of~ay of the Atchison, Topeka and Santa Fe Railroad as said right-of-way was conveyed to said Railroad by document recorded March 10, 1881 in Book 38 at Page 172 of Deeds in the Office of the County Recorder of said San Diego County; thence Northerly along said Westerly right-of-way line, North 23° 11' 19" West, 118. 82 feet to a point on the Northerly line of that parcel of land conveyed to P.A. Horton and Eva H. Horton by deed recorded March 10, 1944 in Book 1641, Page 437 of Official Records of said San Diego County; thence along said Northerly line, South 89° 54' 07" West, 3~. 30 feet (record South 89° 58' 13" West, 390. 53 feet) to an inter:section with the Easterly line of that rarce l of land condemned for freeway purposes by the State of California for the County of San Diego, Case No. 165983, described in Final Order of Condemnation as Parcel 20-A recorded March 12, 1953 in Book 4781, Page 510 of Official Records; thence along ~he Easterly Boundary of said Parcel 20-A, South 24° 44' 20" East, 1714.35 feet (Record 1715.95 feet) to a point on the Southerl>• l:!.ne of sa!.<! RANCHO AGUA IlEDIONDA; thence along said Southerly line, North 89° 55' 311" East. (Feco!"d North 89° 58' 13'! East) 313.07 fet!t to the Point of Beginning. EXCEPTING THEREFROM Living Units 1 through 108, inclusive, as shown and de- fined upon that certain Solamar Condominium Plan recorded May 31, 19 8 8 as File No. 88-255644 , Official Records of San Diego Coun ty. ALSO EXCEPTING THEREFROM the exclusi ve .right to possession of those portions designated as exclusive use areas on the above referenced Condominium Plan. PARCEL 2: Living Unit3~ as shown and defined on the Condominium Plan referred to above. PARCEL 3: The exclusive right to possession of those areas designated as exclusive use areas on the Condominium Plan referred to abov~, as appurtenant to Parcels land 2 above described. (O\,JNERSHIP INTEREST) NOTE us $20.351 Carlsbad, California October 12, 1988 I. FOR VALUE RECEIVED, the undersigned ("Borrower") promises to pay The Redevelopment Agency of the City of Carlsbad, herein known as "Lender", or order the principal sun of Twenty Thousand Three Hundred Fifty One and zero one hundredths Dollars ($20,351), in the manner and plus the additional suns described below: A. 1. Upon the sale of the Property which secures this pr011issory note ("Property"), the principal sun plus contingent interest equal to Twenty Five and eighty six one hundredths percent (25.86%) of the value of 1) the increase in the appraised fair market value of the property or 2) the resale price of the Property, whichever is greater shall be paid. If no sale of the Property is made before October 18, 2018 the sum of Twenty Thousand Three Hundred Fifty One and zero one hundredths Dollars ($20,351) plus an additional sum equal to Twenty five and eighty six one hundredths percent(~%> of. the value of the increase in the appraised fair market value of the Property over the original purchase price of the property shall be due and payable. The principal amount and percentage value stated in this Section I.A.1 shall be adjusted, as necessary, during the term of the Loan pursuant to the provisions and requirements set out in Sections below. The fair market value/original purchase price of the Property, at the time that the Promissory Note is executed, is determined to be $78,704. 2. At the time this note becomes due and payable, pursuant to Section I .A.1., contingent interest shall be determined by utilizing the original total purchase price as follows: TOTAL CITY ASSISTANCE PROVIDED (Loan amount) -divided by· ORIGINAL PURCHASE PRICE PLUS APPRAISED MOBILEHOME VALUE ··equals- PERCENTAGE (equity share) ·111Ul ti plied by- APPRAISED VALUE OF PROPERTY OR RESALE PRICE OF PROPERTY, WHICHEVER IS GREATER ·equals- TOTAL PAYMENT TO CITY 3. Borrower may choose to prepay all or part of the principal and contingent interest described in Section I.A. 1.above by male Ing one or more payments toward these amounts in addition to the oonthly payments amount described in section I.A.1. above. Any such amount paid by the Borrower are Excess Payments and shall reduce the suns payable in Section I.A.1. above as provided in Section II. below. 4. Borrower agrees that he/she will not make payments on any other loans secured by the Property except such minimun periodic payments as are required by the Note and Deed of Trust or ·.her docl.ments evidencing such loans until such time as Borrower has paid the alllOunts described in Section I.A.1. above., unless the Lender has given written approval. II. EXCESS PAYMENTS (as defined in Section I.) of $2,500 or more may be made by Borrower to Lender in any month, ilut not more than once per year. The Borrower shall notify Lender of his intent to mak:e "Excess Payments" at least thirty (30) days in advance and shall arrange for an appraisal to be performed by a Lender-approved Appraiser. The Borrower shall submit the appraiser's report within thirty (30) days of the Lender's notification to the Borrower of the existence of Aggregated Excess Payments. Within thirty (30) days of receipt of such appraiser's report, the Lender shall recalculate the Borrower's obi igation under Section I.A. 1. The Aggregated Excess Payments shall be credited partially to principal and partially to that portion of the increase in fair market value over purchase price which is owing pursuant to Section I.A.1. A. The portion of the Aggregated Excess Payments to be allocated to repayment of the portion of principal described in Section I.A.1., or to the most recent recalculation of such portion of the principal which has been made according to this Section II or Section IV.B. below, shal l be calculated as follows: Purchase Price Appraised Fair Market Value X Aggregated Excess Payments B. That portion of the Aggregated Excess Payments remaining after the value determined In Section JI.A. above has been subtracted shall be allocated to that portion of the increase in fair market value of the property over the purchase price owing pursuant to Section I.A.1. C. At the sa111e time the allocations in Sections II .A. and e. above are made, the Lender shall also recalculate, pursuant to the following formula, the percentage va lue used in Section t.A.1. above: (V x E ) -R p = V V = The value of the Property, as determined by the ar:prai sat. E = The percentage value, stated in Section I.A.1. or the most recent recalculation of this value made according to this forrrula, or, the forrrula in Section IV.B. below. R = The Aggregated Excess Payments. P • The recalculated percentage D. The Lender shall provide Borrower with a statement of the above recalculated values each time such.adjustments are made. DEFINITICII: The term "Property" means the following described property: A. Mobile llome described as fol lows: 1961 PARAH BTM. Mobi lehome Serial Nunber(s) S17788 and all substitutions, accretions, component parts, replacements thereof and additions thereto, and · B. The Property described in Exhibit A of the Deed of Trust securing this Note. JV. IMPROVEMENTS TO PROPERTY which increase the value of the property which cost the Borrower One Thousand Dol lars ($1000.00) or more may reduce the percentage value used in Section I.A.1. above. Such i~rovements shall reduce the percentage value used in Section I.A.1. to the extent that the increase in value caused by the improvements, plus the cost to the Borrower of two appraisals, one made before and one made after the improvements, minus the value by which the value of the Property has been increased by other work not constituting inprovements performed between the two appraisals, results in en increase to the value of the Property ("Value of the l~rovement11). The two appraisals, made to determine the value of the Property before and after the improvement are made, shall be made by an Approved Appraiser. The second appraisal shall be an update of the first. The first appraisal shall be made no earlier than one month prior to the time the improvements are begun and the second shall be made no later than one month following substantial COi1'4)letion of the improvements. · A. "Improvements" means substantial repairs, renovations or additions which increase the value of the Property or bring such Property into conformance with local or state building or housing standards. 1. "Improvements" includes: _I a. replacement of bui lt-in appliances, fixtures and equipment which were originally sold as part of the space, or replacement of structural components of the space, including plumbing and electrical systems, provided that replacement is required by the nonoperative, deteriorated, or obsolescent nature of the original appliance, fixture, equipment or structural component; b. improvements to the c01l11l0n area of a mobilehome park resulting in a mandatory assessment _by the Association; and c. permanent additions to the space. 2 2. "Improvements" does not include: a. a mobilehome vehicle and appurtenant structures attached or affixed to the space to the extent title is held by Borrower, not the Association; b. routine or cosmetic maintenance such as painting and replacement of items made necessary due to norlll8l wear and tear; and c. replacement or repair of items damaged or destroyed because of a fire or natural disaster, unless such activity is necessary to bring such property into conformance with local or state building or housing standards which are higher than previous standards in which case only the cost of work necessary to alter the premises from the lower to the higher standards will be included as an improvement. B. Where the improvements do increase the value of the property as described in this Section, the recalculation of the percentage value used in Section I.A.1. shall be made in the following manner: E = CV X D CV+ I E = The recalculated percentaged used in Section I.A.1. V = The appraised value of the Property imnediately prior to the making of the lmproverents. D = The percentage value stated in Section I.A.1. or the most recent recalculation of this value made according to this formula, or, the fonrula in Section 11.C. above. I= Value of the improvements based on appraisal. c. Lender shall provide Borrower with a statement of the above recalculated percentage value each time such an adjustment is made. D. To be eligible for the reduction in percentage value described in this Section IV, the Borrower rrust receive approval of the proposed improvements from the Lender. To receive the required approval, the Borrower must notify the Lender of the proposed improvements and their projected cost to Borrower at least thirty (3D) days prior to beginning construction on the improvements. The Lender shall notify the Borrower of approval of eligibility, or, disapproval of eligibility, of the proposed improvements for the reduction in percentage value within twenty-one (21) days of receipt of notification from the Borrower of the proposed improvements. If construction fs not begun and COl'1)leted wfthfn the allotted time, or, the Borrower has not sought and received an extension of the allotted time, the conditional ruling of eligibility will be revoked and the improvements will be adjudged ineligible for the reduction in percentage value described in this Section IV. When improvements are to the common areas, the Lender may take other necessary action on behalf of the Borrower as described in this section. E. Notice of change in the value of the Property due to improvements as defined in this Note must be provided to the Lender, along with the required appraisal and appraisal update, within forty-five (45) days of completion of the improvements. F. Improvements which do not increase the value of the Property but do bring the Property into conformance with local and state building or housing standards shall reduce the percentage value used in Section I.A., if the cost to the Borrower of such improvements is One Thousand Dollars ($1000.00) or more. V. UNLESS OTHERWISE PROVIDED HEREIN: A. Any time the services of an appraiser are required by this Note, the Borrower shall appoint an appraiser which shall be approved by the Lender and pay for the services of such appraiser. VI. Presentment, notice of dishonor, and protest are hereby waived by all makers, sureties, guarantors and endorsers of this Note. This Note shall be the joint and several obligation of all makers, sureties, guarantors and endorsers. and shall be binding upon them and their successors and assigns. VII. Any notice to Borrower provided for in this Note shall be given by mailing such notice by certif.ied mail addressed to Borrower at ·the Property Address stated below, or to such other address as Borrower may designate by notice to the Lender . Any notice to the Lender shall be given by mailing such notice by certified mail, return receipt requested, to the Lender at the address stated in the first paragraph of this Note, or at such other address as may have been designated by notice to 3 Borrower. Vl II. The indebtedness evidenced by this Note is secured by a O~ed of Trust, dated October 12, 1988, and Security Agreement, .dated OCtober 12, 1988, and reference is made to the Deed of Trust for rights as to acceleration of the indebtedness evidenced by this Note, including Section 18, which provides as follows: SALE OR TRANSFER Of THE PROPERTY: lf all or any part of the Property or an interest therein is sold or transferred by Borrower, excluding permitted transiers to a spouse or other person signing the Note in the manner described in Section 4 above, al l the suns secured by this Deed of Trust shall be inmediately due and payable. In the event of such an acceleration, Lender shall mail Borrower notice of the acceleration in accordance with Section 20 hereof. Such notice shall provide a period of not less than 30 days from the.date the notice is mailed within which Borrower may pay the suns declared due. lf Borrower fails to pay such sum prior to the expiration of such period, ~ender may, without further notice or demand on Borrower, invoke any remedies permitted by Section 19 hereof. Vera Chegdian 195 Palomar Airport Road, Space 32 Carlsbad, CA 92008 By, Tu :UL-Cb 71£,,,,,. . By:, ________________________ _ LOANOOCS:NOTE:8/29/88 4