RecDoc 2010-110432 - Laserfiche WebLink

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upon repayment of this Note as set forth in the Funding Agreement or Declaration of Affordability Covenants, or the Property is transferred in violation of the Funding Agreement or Declaration of Affordability Covenants. There shall be no payments due under this Note, so long as there is no Event of Default under the Funding Agreement or the Declaration of Affordability Covenants. This Note shall be due and payable in full upon the occurrence of any Event of Default by Maker under the Funding Agreement and /or Declaration of Affordability Covenants following notice and expiration of any applicable cure periods. 7. AMOUNT PAYABLE WHEN DUE ON SALE. If and when this Note becomes due and payable, Maker shall pay to City the Principal Amount of this Note, plus a share of the appreciation ( "City's Shared Appreciation "), if any, in the value of the Property between the time the Property was acquired by Maker and the sale of the Property in accordance with California Civil Code Section 1917.006 and as provided for herein. The distribution of any appreciation in value shall be shared by Maker and City in proportion to the amount of equity contributed by each party for purchase of the Property as follows: a. The City's equity contribution shall equal the Principal Amount of this Note. b. Maker's equity contribution shall be equal to the aggregate amount of the following: (i) the amount of Maker's contribution for payment of the Purchase Price; and (ii) escrow fees, transfer taxes, recording fees, and similar costs of acquisition actually paid by Maker in connection with its acquisition of the Property. [Example of Calculation of Maker's and City's Equity: If, (i) at the time Maker acquired the Property, the Maker paid $675,000 and, escrow fees, transfer taxes, recording fees, and similar costs of acquisition actually paid by Maker equal $5,000 resulting in a total Maker equity amount of $680,000, and (ii) the Principal Amount of this Note is $400,000, then (iii) the Maker would receive 63% of any remaining appreciation value available for distribution, and the City would receive 37% of any remaining appreciation value available for distribution at the time of a sale.] c. The City's right to receive the City's Shared Appreciation shall be subject to the Maker's superior right to receive repayment of the following items as described in California Civil Code Section 1917.006(a)(3) and the requirements of Section 7(e) below: amount of the cash payment paid by Maker at the time Maker acquired the Property; ii. amounts of escrow fees, transfer taxes, recording fees, brokerage commissions and similar costs of acquisition actually paid by Maker; money paid by Maker for those capital improvements to the Property which significantly increased the value of the Property; and iv. amount equal to the "legal rate of interest" (as defined herein in Section 7(d) below) on cash payments by Maker as identified in (i) through (iii) above. d. Because there is no generally accepted definition of "legal rate of interest," as the term is used in Civil Code Section 1917.006(a)(3), Maker and City stipulate and agree that the "legal rate of interest" for purposes of this Note shall be calculated using the annual compound interest rate for the Long -Term Applicable Federal Rate (AFR) as defined in 26 U.S.C. Section 1274(d) and as is issued by the United States Internal Revenue Service monthly, as then in effect at the time this Note is executed. Based on the foregoing, the legal rate of interest for purposes of this Note is stipulated to be three and a quarter percent (3.25 %) per annum, compounded annually. e. Prior to payment to Maker of the amounts set forth in Section 7(c) of this Note, Maker shall submit evidence not less than 30 days prior to the scheduled date for the close of escrow or foreclosure sale to allow City to verify the evidence provided by Maker to the reasonable satisfaction of the City of the Maker's equity as set forth in Section 7(b) and Maker's Exhibit E 2