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HomeMy WebLinkAbout2008 CON CDC Dallo & Foodland - Amendment Facade ImprovementAMENDMENT TO FACADE IMPROVEMENT AGREEMENT TO INCREASE THE LOAN AMOUNT FROM $347,320 TO $542,349 This Amendment to the Facade Improvement Agreement to Increase the Loan Amount from $347,320 to $542,349 ("Amendment to the Facade Improvement Agreement") is made as of April 1, 2008, by and between the Community Development Commission of the City of National City ("CDC"). Mike N. Dallo and Mona Dallo ("Property Owner"), and Foodland, Inc. ("Participant") located at 303 Highland Avenue in National City, California. Recitals WHEREAS, on or about September 18, 2006, the CDC, Property Owner and Participant executed the Facade Improvement Agreement, attached as Exhibit "A" and fully incorporated herein by reference, for purposes of rehabilitating the facade at 303 Highland Avenue which was funded by a loan from the CDC to the Property Owner; WHEREAS, on or about September 18, 2006, the CDC and Property Owner executed a Deed of Trust, for the purpose of securing payment of the indebtedness by the Property Owner to the CDC, in the principal sum of Three Hundred Forty Seven Thousand Three Hundred Twenty and No/100 Dollars (S347,320.00); WHEREAS, the CDC has previously loaned Property Owner $347,320 to perform facade improvements; WI IERFAS. the facade improvement costs have exceeded the original loan amount thus the CDC increased the amount loaned to Property Owner to pay for those increased costs, resulting in a new total loan amount of S542,349; WHEREAS, the purpose of this amendment is to increase the loan from the CDC to the Property Owner from S347,320 to $542,349 and to secure that loan through a deed of trust; WHEREAS, the CDC, the Property Owner, and the Participant agree that all provisions of the Facade Improvement Agreement remain in full force and effect, except that the amount of the CDC loan to Property Owner will increase from $347,320 to $542,349 and the Deed of Trust will record payment of indebtedness by Trustor, Property Owner, in the principal sum of Five Hundred Forty Two Thousand Three Hundred forty Nine and No/100 Dollars (S542,349). Agreement NOW THEREFORE. in consideration ol'the above recitals and mutual covenants and conditions set forth herein, and for good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, the CDC, Property Owner, and Participant agree to the following: 1 1. The Recitals set forth above are true and correct, and fully incorporated and agreed to herein. 2. Section V. entitled "Loan to Property Owner' is hereby amended to read as follows: The CDC hereby makes a Loan in the amount of $542,349 to the PROPERTY OWNER, MIKE N. DALLO AND MONA DALLO, for the purpose of rehabilitating the facade at 303 Ilighland Avenue (the PROPERTY). Said Loan is subject to be immediately repayable to the CDC if the PROPERTY is sold, leased. conveyed. refinanced. vacated. transferred, assigned. alienated. or hypothecated within five (5) years from the Completion Date of the improvements as defined and that option of the CDC. 3. Section X. entitled "Project Funding" is modified by changing the phrase "not to exceed S347,320- in the second sentence of that paragraph to "not to exceed S542,349' . which reflects the new loan amount commensurate with the increased cost expenditure. 4. This Amendment to the Facade Improvement Agreement fully expresses the final and complete understanding of the Parties concerning the matters covered herein. No change, alteration, or modification of'the terms or conditions of this Amendment to the Facade Improvement Agreement, and no verbal understanding of the Parties, their officers, agents, or employees, shall he valid unless made in writing and signed by each Parties' duly authorized representatives. All prior negotiations and agreements concerning the matters covered herein are merged into this Amendment to the Facade Improvement Agreement. 5. Other than the specific amendments to the Facade Improvement Agreement stated herein, all terms and conditions of the Facade Improvement Agreement remain in full force and effect. IN WITNESS WHEREOF, the Parties agree to abide by the terms of this Amendment to the Facade improvement Agreement. and hereby execute the same by and through their duly authorized representatives. THE COMMUNITY DEVELOPMENT COMMISSION OF THE CI )F NATIONAL CITY Date: '/-/-Ott' By Ron Morrison, Chairman 2 Approved as to form and legality: Date: lj ! By Date: mar_ zy-oY George Eiser, City Attorney PROPERTY OWNER: Rv By 1/1 e Mike N. Dallo FOODLAND, INC. (PARTICIPANT): Date: 3- ZS=ol By Chris Dallo, Secretary ACKNOWLEDGMENT State of California County of n (�,ti✓ CU_/(1On -�R,* G4,1 02ti k i, oc� before me, i C ei , %I C.t CL_ �C�C](�': '`,- (i� sert name and title of the officer) personally appearea 1- % 4.. ,'Od \t c I I tut OG. Lc. ck vCI `vA's V 0 , who 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. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) SERGIO O. GARCIA-GODOY Commission # 1482601 Notary Public - California San Diego County [ My Comm. Expires Apr 11, 2008 >,PLEAS,£ COMPLETE THIS INFORMATION DOC tt 2008-0183751 RECORDING REQUESTED BY: CITY CLERK OF NATIONAL CITY 1243 National City Blvd National City, CA 91950 AND WHEN RECORDED MAIL TO: CITY CLERK OF NATIONAL CITY 1243 National City Blvd National City, CA 91950 APR 08, 2008 9:27 AM OFFICIAL RE CORDS S.L.N DIEGO C'JuNT r• RECORDER'S OFFICE GRECiOF'r'J SF.1ITH,LouNTI RECORDER FEES- 000 PAGES: 32 111111111111101131111111111111141111111111111111111111 THIS SPACE FOR RECORDER'S USE ONLY AMENDMENT TO FACADE IMPROVEMENT AGREEMENT AND 303 Highland Avenue — Mike N. Dallo and Mona Dallo (Please fill in document title(s) on this line) 4a c a c e Z M FON ty en+ Aqrw.e-t Fern 00 _ r-q.. THIS PAGE ADDED TO PROVIDE ADEQUATE SPACE FOR RECORDING INFORMATION AMENDMENT TO FACADE IMPROVEMENT AGREEMENT TO INCREASE THE LOAN AMOUNT FROM $347,320 TO $542,349 This Amendment to the Facade Improvement Agreement to Increase the Loan Amount from $347.320 to $542,349 ("Amendment to the Facade Improvement Agreement") is made as of April 1, 2008, by and between the Community Development Commission of the City of National City ("CDC"). Mike N. Dallo and Mona Dallo ("Property Owner"), and Foodland. Inc. ("Participant") located at 303 Highland Avenue in National City, California. Recitals WHEREAS, on or about September 18, 2006, the CDC, Property Owner and Participant executed the Facade Improvement Agreement. attached as Exhibit "A" and fully incorporated herein by reference, for purposes of rehabilitating the facade at 303 Highland Avenue which was funded by a loan from the CDC to the Property Owner; WHEREAS, on or about September 18, 2006, the CDC and Property Owner executed a Deed of Trust, for the purpose of securing payment of' the indebtedness by the Property Owner to the CDC, in the principal sum of Three Hundred Forty Seven Thousand Three Hundred Twenty and No/100 Dollars (S347,320.00); WHEREAS, the CDC has previously loaned Property Owner $347.320 to perform facade improvements; WHEREAS. the facade improvement costs have exceeded the original loan amount thus the CDC increased the amount loaned to Property Owner to pay for those increased costs, resulting in a new total loan amount of $542,349; WHEREAS, the purpose of this amendment is to increase the loan from the CDC to the Property Owner from $347,320 to $542,349 and to secure that loan through a deed of trust; WHEREAS, the CDC, the Property Owner, and the Participant agree that all provisions of the Facade Improvement Agreement remain in full force and effect, except that the amount of the CDC loan to Property Owner will increase from $347,320 to S542,349 and the Deed of Trust will record payment of indebtedness by Trustor, Property Owner, in the principal sum of Five Hundred Forty Two Thousand Three Hundred forty Nine and No/100 Dollars ($542,349). Agreement NOW THEREFORE, in consideration of the above recitals and mutual covenants and conditions set forth herein, and for good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, the CDC, Property Owner, and Participant agree to the following: 1 1 The Recitals set forth above are true and correct, and fully incorporated and agreed to herein. 2. Section V. entitled "Loan to Property Owner" is hereby amended to read as follows: The CDC hereby makes a Loan in the amount of $542,349 to the PROPERTY OWNER, MIKE N. DALLO AND MONA DALLO, for the purpose of rehabilitating the facade at 303 Highland Avenue (the PROPERTY). Said Loan is subject to be immediately repayable to the CDC if the PROPERTY is sold, leased. conveverlrefinanced. vacated. transferred assigned. alienated. or hypothecated within five (5) years from the Completion Date of the improvements as defined and that option of the CDC. 3. Section X. entitled "Project Funding" is modified by changing the phrase "not to exceed S347,320- in the second sentence of that paragraph to not to exceed $542,349". which reflects the new loan amount commensurate with the increased cost expenditure. 4. This Amendment to the Facade Improvement Agreement fully expresses the final and complete understanding of the Parties concerning the matters covered herein. No change, alteration, or modification of the terms or conditions of this Amendment to the Facade Improvement Agreement. and no verbal understanding of the Parties, their officers, agents, or employees, shall be valid unless made in writing and signed by each Parties' duly authorized representatives. All prior negotiations and agreements concerning the matters covered herein are merged into this Amendment to the Facade Improvement Agreement. 5. Other than the specific amendments to the Facade Improvement Agreement stated herein, all terms and conditions of the Facade Improvement Agreement remain in full force and effect. IN WITNESS WHEREOF, the Parties agree to abide by the terms of this Amendment to the Facade Improvement Agreement, and hereby execute the same by and through their duly authorized representatives. Date: r/,j' THE COMMUNITY DEVELOPMENT COMMISSION ()F THE CI ) F NATIONAL CITY Ron Morrison, Chairman Approved as to form and legality: Date: y-/'OS By /Th George Eser, City Attorney ►,�,�• Yvl Gw- 24-0 PROPERTY OWNER: Rv ike N. Dallo By FOODLAND, INC. (PARTICIPANT): Date: 3"24� -O'8 By Chris Dallo, Secretary ACKNOWLEDGMENT State of California County of,n e�y On 1k'A TC/V1 a,ut 4 ,d,c6" before me, Yyyty 0.. �'C-i LA.- L,a (insirt name and title of the officer) sidr rail/Z personally appearea ( N Dc41LC) RK Oa an ctC6t vl j ti ((cj who proved to me on the basis of satisfactory eesidence 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. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature .- - t / -r (Seal) SERGIO O. GARCIA-GODOY Commission # 1482601 Notary Public - California t San Diego County My Comm. Expires Apr 11, 2008� FACADE IMPROVEMENT AGREEMENT THIS AGREEMENT, is made between the Community Development Commission of the City Of National City hereafter referred to as the "CDC", and MIKE N. DALLO AND MONA DALLO, hereafter referred to as the "Property Owner" and FOODLAND, Inc., hereafter referred to as the "Participant", located at 303 Highland Avenue in National City, California. RECITALS 1. The CDC desires to stimulate private investment in the City's Commercial Districts. 2. The CDC believes that investment on improvements visible to customers, neighboring merchants, and residents will beautify the commercial corridors and increase the volume of business by making the districts and individual businesses more attractive. 3. The CDC has adopted and established a Commercial Facade Improvement Program (The Program) to assist property and business owners to improve their properties located in designated areas of the City of National City. 4. The designated areas of the City of National City are major commercial streets in the Redevelopment Area. 5. The parties acknowledge that in utilizing The Program to make improvements to the property, the participant may he require to follow State Prevailing Wage Rates Requirements. 6. The CDC and the City of National City have determined that the property subject to this Agreement is located in the Redevelopment Area and is eligible to participate in the Program. NOW, THEREFORE, in consideration of the recitals and the mutual obligations of the parties as herein expressed, the CDC and the Property Owner agree as follows: AGREEMENT I. DEFINITIONS The following terms shall have the following meanings whenever used in this Agreement, except where the context clearly indicates otherwise. Any ambiguity as to the intended meaning or scope of the terms set forth below will be resolved solely by the CDC through its designated representati ve. 1. Completion Date is defined as the date that the contractor has finished the physical improvements per the Contractor's agreement and Scope of Work and to Page I of 8 EXHIBIT 'A' the satisfaction of the CDC, as evidenced by final inspection and sign off by a City's building inspector. 2. Facade is defined as the exterior of a commercial building visible from the public street, and excludes all else, unless otherwise determined by the Economic Development Manager. 3. The Property is defined as the unit of real property as identified within the County Recorder's documents which will be improved pursuant to this agreement. For purposes of this agreement, the Property is that real property commonly known as 303 Highland Avenue, National City. 4. Program Manager is defined as the CDC's designated representative for the Commercial Facade Improvement Program. 5. Project is defined as the total improvements made to subject property outlined in the Contractor's Scope of Work and approved by the Program Manager. 6. Total Cost Expenditure is defined as the total actual costs incurred by and paid for completing the project. 7. Contractor is defined as a California Licensed General Contractor selected through the bidding process to complete the improved at the project address. Contractor is to provide proof of license and insurance to the City at time of the hid process. 8. Participant is defined as the Property and/or Business Owner of the said property in which the Facade improvements are made. 9. Property Owner is defined as the person(s) on Title of the property as shown on the records of the San Diego County Recorders Office and identified on the Certificate of Ownership form (Exhibit A). 10. Request for Proposal (RFP) is defined as all City, Contractor, and Architect documents which detail the improvements on the subject property. I1. CERTIFICATION OF OWNERSHIP The Property Owner of the Property agrees to the improvements to the Property pursuant to this Agreement and has signed the Certificate of Ownership, attached as Exhibit A and by this reference made a part of this Agreement. Ill. CONSENT OF PARTICIPANT Page 2 of 8 The Participant consents to the construction of improvement on the Property which are contemplated by this Agreement. IV. PROPERTY OWNER'S RESPONSIBILITIES 1. The Property Owner shall submit an application form to the Program Manager. 2. The Property Owner shall meet with the Program Manager and the architect designated by the Program Manager to discuss the design for the facade improvements. 3. The Property Owner shall sign the architectural rendering prepared by the designated architect and, by signing, accept the design for the facade improvements. The architectural rendering is and by this reference made part of this Agreement. 5. For those projects which may qualify as Historic Preservation Projects, Property Owner shall provide all documentation requested by the Program Manager to make such a determination. Property Owner must have been designated by the Historic Resources Board as owning a designated historic structure or classified as a contributing structure, or be included on a locally defined historic building inventory in a designated historic district, and that any improvements be consistent with the historical character of the property. 6. The Property Owner agrees to maintain the improvements made pursuant to this agreement in good condition, and to repair or replace any damage which occurs to the improvements, for a period of five (5) years following the completion date of the improvements as agreed upon by the CDC. 7. The Property Owner agrees to not increase the rent to the tenants for a period of five (5) years following the completion date of the improvements. V. LOAN TO PROPERTY OWNER 1. The CDC hereby makes a Loan in the amount of $347,320 to the PROPERTY OWNER, MIKE N. DALLO AND MONA DALLO for the purpose of rehabilitating the Facade at 303 Highland Avenue (the PROPERTY). Said Loan is subject to be immediately repayable to the CDC if the PROPERTY is sold, leased, conveyed, refinanced (except for refinances involving existing secure debt which is in a superior position to the CDC Loan secured by this Agreement), vacated, transferred, assigned, alienated, or hypothecated within five (5) years from the Completion Date of the improvements as defined and at the option of the CDC. Page 3 of 8 VI. CONDITIONS OF LOAN / LIEN 2. The Property Owner and CDC agree that if the improvements detailed in the awarded "Contractor's Agreement and Scope of Work" on the PROPERTY commonly known as Foodland Market located at 303 Highland Avenue in the City of National City, arc maintained for at least five (5) years from the Completion Date of the improvements; the Loan will be forgiven and the Property Owner shall not be required to repay the loan to the CDC. However, should the PROPERTY be sold, hypothecated, vacated, leased, transferred, assigned, or alienated, or if it is determined by the CDC that the facade improvements describe hereinabove are not maintained per this agreement for at least five (5) years from the Completion Date of the improvements, then this Loan shall be repayable in full by the Property Owner to CDC, upon demand, with interest. Interest shall be 5% per annum simple interest retroactive to the date of the Loan. Any payments received shall first be applied first to accrued interest then to the principal. VII. RECORDATION OF AGREEMENT 3. The Property Owner and the CDC agree that this Facade Improvement Agreement shall be recorded in the Office of the County Recorder and shall constitute constructive notice to the public that upon sale, hypothecation, assignment, lease, transfer, or alienation less than five (5) years from the Completion Date of the Improvements, the Loan shall be repayable with interest retroactive to the date of the Loan. 4. If the improvements detailed in the awarded "Contractor's Agreement and Scope of Work" on the PROPERTY commonly known as Foodland Market located at 303 Highland Avenue in the City of National City, are maintained for at least five (5) years from the Completion Date of the improvements as determined by the CDC, then the Loan as referenced herein, shall have no further force and effect upon the PROPERTY and the CDC shall execute and RECORD a full reconvcyance of the title any and all documents necessary to clear title to the PROPERTY upon the request of the Property Owners. VIII. CDC'S RESPONSIBILITIES 1. The Economic Development Manager shall meet with the architect and the Property Owner to discuss designs for the facade improvements. 2. The CDC shall be responsible for hiring the Contractor from the RFP process licensed by the California Contractors State License Board to complete the improvement work, as identified by the RFP. Page 4 of 8 3. The CDC shall be responsible for all payments to the Contractors or other third parties. The sole source of funding for such payments shall be the Loan/Grant referred to hereinabove. 4. The Economic Development Manager shall ensure that the improvements were completed in accordance with the architectural rendering. 5. The Economic Development Manager shall review the final bill and receipts submitted by the Contractor and, if all the obligations under this Agreement have been met, shall issue full payment within thirty days of receipt. IX. TIME OF PERFORMANCE The parties anticipate that the Contractor shall complete the facade improvements within 6 MONTHS of the date of this agreement and that the Contractor shall submit final bills and receipts to the Economic Development Manager no later than thirty days after the Completion Date. X. PROJECT FUNDING The CDC has determined that this Project qualifies for Redevelopment Funds. The CDC agrees to pay the Total Cost Expenditure not to exceed $347,320, pursuant to the Loan/Grant referred to hereinabove, provided that the Property Owner complies with the conditions of the loan set forth in Section VI, herein. XI. ORAL REPRESENTATIONS; INTEGRATION This Agreement and the exhibits and references incorporated into this Agreement fully express all understandings of the parties concerning the matters covered in this Agreement. No change, alteration, or modification of the terms of this Agreement, and no verbal understanding of the parties, their officers, agents, or employees shall be valid unless made in the form of a written change agreed to in writing by both parties or an amendment to this Agreement agreed to by both Parties in writing. All prior negotiations and agreements arc merged into this Agreement. XII. CHANGES OR AMENDMENTS TO AGREEMENT All amendments to this Agreement shall be in writing signed by the Property Owner, Participant and the CDC. Page 5 of 8 This Agreement is executed by The Community Development Commission (CDC) of the City of National City acting by and through its Commissioners, and by the Property Owners and the Participant. Dated this ,J iay of PC.ther 2006. I APPROVE the form and legality of this Agreement this 3rd day of October, 2006. GEORGE EISER, City Attorney loatA: Dated this /g. day of • , 2006. Dated this / 8' day of SQY • , 2006. COMMUNITY DEVELOPMENT SION (OWNER) Nick Inzunza, Mayor /L 0.J PA? UK & ijp •.J �'�i� • Cit.: PROPERTY 0 N By Print Name: 01 I Kc DA LLO By friatat /OA Print Name: I/1/i ON74- IAL/—O FOODLAND, Inc.(Participant): By Print Name: Cf-1-72 ! S DA-L—W Officer Title: C/ZCrz- / By Print Name: Officer Title: Page 6 of 8 A - Certificate of Ownership B - Deed of Trust C - Note EXHIBITS: Page 7 of 8 State of California ) ) ss: County of San Diego ) �, 00-0 On S-e 7 i • 11 i , . before me, the undersigned, a Nota 1ic in and for the County of San Diego, State of California, personally appeared Eh ' nally known to me on the basis of satisfactory evidence, to be the person(s) whose name(s) is/are subscribed to the within Facade Improvement Agreement Affecting Real Property 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. NotaryPublic Page 8 of 8 SANDRA A. LARA Commission # 1478914 Notary Public - California San Diego County My Comm. Expires Apr 23, 2008 COMMUNITY DEVELOPMENT COMMISSION FACADE IMPROVEMENT PROGRAM CERTIFICATION OF OWNERSHIP/ CONSENT TO IMPROVEMENTS I/We, ►vt ( E D1-L-Lz ("Property Owner") hereby certify that (list all owners) is/are the Owner(s) of record of certain commercial real property commonly known as 303 /- (6 (4-6 A-A/D (address), National City, California. As Property Owner(s), we further certify that to the best of our knowledge, there are no current code enforcement actions pending against the real property described above. I/We declare under penalty of perjury pursuant to the laws of the State of California that the foregoing is true and correct. Executed this / day of S , 200 6, in National City, California. By (Ic6 (Property Owner) i/k /) (Signature) (Print Name) Exhibit A Page 1 of 1 NO CHARGE ON THIS DOCUMENT FOR THE BENEFIT OF A STATE AGENCY FORMED BY THE CITY OF NATIONAL CITY Recording Requested By: Community Development Commission of The City of National City Economic Development Division 1243 National City Blvd National City, CA 91950 And When Recorded Mail To: Community Development Commission of the City of National City Economic Development Division 1243 National City Blvd. National City, CA 91950 DEED OF TRUST THIS DEED OF TRUST is made this day of 3ekV)b°Y2006, by MIKE N. DALLO AND MONA DALLO, whose address is 5075 Federal Boulevard, San Diego, CA 92102, ("Trustor"), to Chicago Title Company, a California corporation ("Trustee"); for the benefit of the Community Development Commission of the City of National City ("Beneficiary"), whose address is 1243 National City Boulevard, National City, California 91950; TRUSTOR HEREBY irrevocably grants, transfers, and assigns to Trustee, in trust, with power of sale, all that property in the City of National City, County of San Diego, State of California, described as: (See Legal Description - Exhibit "A") FOR THE PURPOSE OF SECURING: (1) Payment of the indebtedness evidenced by a promissory note of even date herewith executed by Trustor, in the principal sum of THREE HUNDRED FORTY SEVEN THOUSAND THREE HUNDRED TWENTY AND NO/100 DOLLARS ($347,320.00), and any renewal, extension, or 1 " Xh,b�t B modification of the promissory note (the "Note"); (2) Any additional sums and interest that may hereafter be loaned to the then record owner of the Property by Beneficiary, when evidenced by another note or notes reciting that it or they are so secured; and (3) The performance of each agreement contained in this Deed of Trust. A. TO PROTECT THE SECURITY OF THIS DEED OF TRUST, TRUSTOR AGREES: Maintenance and Repair (1) To keep the Property in good condition and repair; not to remove or demolish any buildings on the Property; to complete or restore promptly and in good and workmanlike manner any building that may be constructed, damaged, or destroyed on the Property; to pay when due all claims for labor performed and materials furnished for the Property; to comply with all laws affecting the Property or requiring any alterations or improvements to be made on the Property; not to commit or permit waste of the Property; not to commit, suffer, or permit any act upon the Property in violation of law; and to cultivate, maintain the landscaping, and do all other acts that from the character or use of the Property may be reasonably necessary. Fire Insurance (2) To provide, maintain, and deliver to Beneficiary fire insurance satisfactory to and with loss payable to Beneficiary as its interest may appear. The amount collected under any fire or other insurance policy may be applied by Beneficiary upon any indebtedness secured by this Deed of Trust and in any order determined by Beneficiary, or at the option of Beneficiary the entire amount so collected or any part of that amount may be released to Trustor, except that if the proceeds of the award for any taking or injury to the Property or the amount of such proceeds plus funds provided by Trustor is sufficient to allow for the repair and restoration of the Property and such repair and/or restoration is physically and legally possible, then the Trustor shall use the proceeds of the award to timely effectuate such repair and/or restoration. Upon receipt of such proceeds, Beneficiary may hold the proceeds as further security, or apply or release them in the same manner and with the same effect as provided in this Deed of Trust for the disposition of proceeds of fire or other insurance. This application or release shall not cure or waive any default or notice of default under this Deed of Trust or invalidate any act done pursuant to such a notice. Defense of Security (3) To appear in and defend any action or proceeding purporting to affect the security of this Deed of Trust or the rights or powers of Beneficiary, or Trustee; and to pay all costs and expenses, including cost of evidence of title and attorneys' fees in a reasonable sum, in any such action or proceeding in which Beneficiary or Trustee may appear, and in any suit brought by Beneficiary to foreclose this Deed of Trust. Payment of Liens and Taxes 2 (4) To pay, at least ten (10) days before delinquency, all taxes and assessments affecting the Property, including assessments on appurtenant water stock, all encumbrances, charges, and liens, with interest, on the Property or any part of the Property, which appear to be prior or superior to this Deed of Trust; and all costs, fees, and expenses of this Trust. If Trustor fails to make any payment or to do any act as provided in this Deed of Trust, then Beneficiary or Trustee may (but is not obligated to) make the payment or do the act in the required manner and to the extent deemed necessary by Beneficiary or Trustee to protect the security of this Deed of Trust. The performance by Beneficiary or Trustee of such an act shall not require notice to or demand upon Trustor and shall not release Trustor from any obligation under this Deed of Trust. Beneficiary or Trustee shall also have the following related rights and powers: to enter upon the Property for the foregoing purposes; to appear in and defend any action or proceeding purporting to affect the security of this Deed of Trust or the rights or powers of Beneficiary or Trustee; to pay, purchase, contest, or compromise any encumbrance, charge, or lien that in the judgment of either appears to be prior or superior to this Deed of Trust; to employ counsel; and to pay necessary expenses and costs, including attorneys' fees. Reimbursement of Costs (5) To pay immediately and without demand all sums expended by Beneficiary or Trustee pursuant to this Deed of Trust, with interest from date of expenditure at the amount allowed by law in effect at the date of this Deed of Trust, and to pay any reasonable amount demanded by Beneficiary (up to the maximum allowed by law at the time of the demand) for any beneficiary statement requested by Trustor or any other beneficiary of a Deed of Trust encumbering the Property regarding the obligation secured by this Deed of Trust. Obligations of Trustor (6) That Trustor will not permit or suffer the use of any of the Property for any purpose other than the use for which the same was intended at the time this Deed of Trust was executed. (7) That the Facade Improvement Agreement referred in the Note is incorporated herein by reference and made a part of this Deed of Trust. (8) To perform, in a timely manner, each agreement and covenant by and between Trustor on any and all notes, loans and deeds of trust that are senior and/or junior to this Deed of Trust. A default in any of these obligations, beyond any applicable cure period, shall constitute a default under this Deed of Trust. 3 B. TRUSTOR AGREES THAT: Condemnation Award (1) Any award of damages in connection with any taking or condemnation, or for injury to the Property by reason of public use, or for damages for private trespass or injury to the Property, is hereby assigned and shall be paid to Beneficiary, as its interest may appear as further security for all obligations secured by this Deed of Trust, except that if the proceeds of the award for any taking or injury to the Property or the amount of such proceeds plus funds provided by Trustor is sufficient to allow for the repair and restoration of the Property and such repair and/or restoration is physically and legally possible, then the Trustor shall use the proceeds of the award to timely effectuate such repair and/or restoration. Upon receipt of such proceeds, Beneficiary may hold the proceeds as further security, or apply or release them in the same manner and with the same effect as provided in this Deed of Trust for the disposition of proceeds of fire or other insurance. Waiver of Late Payments (2) By accepting payment of any sum secured by this Deed of Trust after its due date, Beneficiary does not waive its right either to require prompt payment when due of all other sums so secured or to declare default for failure to pay any indebtedness secured by this Deed of Trust. Trustee's Powers (3) Upon written request of Beneficiary and presentation of this Deed of Trust, Trustee may (a) reconvey all or any part of the Property; (b) consent to the making and recording, or either, of any map or plat of all or any part of the Property; (c) join in granting any easement on the Property; or (d) join in or consent to any extension agreement or any agreement subordinating the lien, encumbrance, or charge of this Deed of Trust. Trustee need not provide Trustor with notice before taking any of the foregoing actions, and shall not be liable for the proper performance of the act. The exercise by Trustee of any of the foregoing powers shall not affect the personal liability of any person for payment of the indebtedness secured by this Deed of Trust, or the lien of this Deed of Trust on the remaining property as security for the repayment of the full amount secured by this Deed of Trust. Full Reconveyance (4) Upon written request of Beneficiary stating that all obligations secured by this Deed of Trust have been performed in full, surrender of this Deed of Trust, any notes secured by this Deed of Trust to the Trustee for cancellation and retention, and payment of Trustee's fees and charges, Trustee shall reconvey, without warranty, the Property then subject to this Deed of Trust. Absent manifest error, the recitals in the reconveyance shall be conclusive proof of the truthfulness of the recitals. The grantee in the reconveyance may be described as "the person or persons legally entitled thereto." Five years after issuance of the full reconveyance, Trustee may destroy the Note and this Deed of Trust, unless directed in the request to retain them. 4 Assignment of Rents (5) As additional security, Trustor hereby gives to and confers upon Beneficiary the right, power, and authority during the continuance of these Trusts, to collect the rents, issues, and profits of the Property, but reserves the right, prior to any default by Trustor in payment of any indebtedness secured by this Deed of Trust or in the performance of any agreement under this Deed of Trust, to collect and retain these rents, issues, and profits as they become due and payable. Upon any such default for which cure has not been commenced within thirty (30) days and thereafter completed with diligence, Beneficiary may, without notice and without regard to the adequacy of the security for the indebtedness secured by this Deed of Trust, either personally or by agent or court -appointed receiver, do the following: enter upon and take possession of the Property or any part of the Property; sue for or otherwise collect all rents, issues, and profits, including those past due and unpaid; and apply these rents, issues, and profits, less costs and expenses of operation and collection (including reasonable attorneys' fees), upon any indebtedness secured by this Deed of Trust, in any order determined by Beneficiary. The exercise of the foregoing rights by Beneficiary shall not cure or waive any default or notice of default under this Deed of Trust or invalidate any act done pursuant to such a notice. Default in Foreclosure (6) Upon default by Trustor in the payment of any indebtedness secured by this Deed of Trust or in the performance of any obligation under this Deed of Trust for which cure has not been commenced within thirty (30) days and thereafter completed with diligence, Beneficiary may declare all sums secured by this Deed of Trust immediately due and payable by delivering to Trustee a written declaration of default and demand for sale and a written notice of default and election to sell the Property. Trustee shall cause the notice of default and election to sell to be recorded. Beneficiary also shall deposit with Trustee this Deed of Trust, a copy of the Agreement, and all other documents evidencing obligations secured by this Deed of Trust. After the required time period has lapsed following the recordation of the notice of default, and after notice of sale has been given as required by law, Trustee, without demand on Trustor, shall sell the Property at the time and place specified in the notice of sale, either as a whole or in separate parcels, and in any order determined by Trustee, at public auction to the highest bidder for cash in lawful money of the United States, payable at the time of sale. Trustee may postpone sale of all or any portion of the Property by public announcement at the time and place of sale, and from time to time thereafter may postpone the sale by public announcement at the time fixed by the preceding postponement. Trustee shall deliver to the purchaser at the auction its deed conveying the Property sold, but without any covenant or warranty, express or implied. Absent manifest error, the recital in the deed of any matter or fact shall be conclusive proof of the truthfulness of the recital. Any person, including Trustor, Trustee, or Beneficiary, may purchase at the sale. After deducting all costs, fees, and expenses of Trustee and Beneficiary under this paragraph, including costs of procuring evidence of title incurred in connection with sale, Trustee shall apply the proceeds of sale to payment of: all sums expended under the terms of this Deed of Trust, not then 5 repaid, with accrued interest at the amount allowed by law in effect at the date of this Deed of Trust; all other sums then secured by this Deed of Trust; and the remainder, if any, to the person or persons legally entitled to the remaining proceeds. Further Encumbrances (7) Should the trustor agree to or actually sell, convey, transfer, or dispose of, or further encumber the Property, or any part of it, or any interest in it (each, a "Transfer"), without first obtaining the written consent of the Beneficiary, then all obligations secured by the Deed of Trust may be declared due and payable, at the option of the Beneficiary, unless such Transfer is permitted under Section 603 of the OPA (as defined in the Note). Consent to one transaction of this type will not constitute a waiver of the right to acquire consent to future or successive transactions. General Provisions (8) This Deed applies to, inures to the benefit of, and binds all parties to this Deed of Trust and their heirs, legatees, devisees, administrators, executors, successors, and assigns. The term "Beneficiary" shall mean the Community Development Commission of the City of National City, and the heirs, legatees, devisees, administrators, executors, and assigns of any such person. In this Deed, whenever the context so requires, the masculine gender includes the feminine and/or neuter, and the singular number includes the plural. Acceptance by Trustee (9) Trustee accepts this Trust when this Deed, duly executed and acknowledged, is made a public record as provided by law. Trustee is not obligated to notify any party to this Deed of Trust of pending sale under any other deed of trust or of any action or proceeding in which Trustor, Beneficiary, or Trustee shall be a party unless brought by Trustee. Substitution of Trustees (10) Beneficiary, or any successor in ownership of any indebtedness secured by this Deed of Trust, may from time to time, by written instrument, substitute a successor or successors to any Trustee named in or acting under this Deed of Trust. The substitution instrument shall contain the name of the original Trustor, Trustee, and Beneficiary under this Deed of Trust, the book and page where this Deed is recorded, and the name and address of the new Trustee. When executed by Beneficiary and duly acknowledged and recorded in the office of the recorder of the county or counties where the Property is situated, the substitution instrument shall be conclusive proof of proper substitution of the successor Trustee or Trustees. Any successor Trustee or Trustees shall, without conveyance from the Trustee predecessor, succeed to all its title, estate, rights, powers, and duties. Cumulative Powers and Remedies (11) The powers and remedies conferred in this Deed of Trust are concurrent and cumulative to all other rights and remedies provided in this Deed of Trust or given by law. These powers and 6 remedies may be exercised singly, successively, or together, and as often as deemed necessary. Conclusiveness of Recitals (12) The recitals contained in any reconveyance, trustee's deed, or any other instrument executed by the Trustee from time to time under the authority of this Deed of Trust or in the exercise of its powers or the performance of its duties under this Deed of Trust, shall be conclusive evidence of their truth, whether stated as specific and particular facts, or in general statements or conclusions absent manifest error. Further, the recitals shall be binding and conclusive upon the Trustor, its heirs, executors, administrators, successors, and assigns, and all other persons. Attorneys' Fees (13) If any action is brought for the foreclosure of this Deed of Trust or for the enforcement of any provision of this Deed of Trust (whether or not suit is filed), Trustor agrees to pay all costs and expenses of Beneficiary and Trustee, including reasonable attorneys' fees; and these sums shall be secured by this Deed of Trust. Co -trustees (14) If two or more persons are designated as Trustees in this Deed of Trust, any, or all, power granted in this Deed of Trust to Trustee may be exercised by any of those persons, if the other person or persons are unable, for any reason, to act. Any recital of this inability in any instrument executed by any of those persons shall be conclusive against Trustor and Trustor's heirs and assigns. Request for Notices of Default and Sale (15) In accordance with Section 2924b of the California Civil Code, request is hereby.made that a copy of any Notice of Default and a copy of any Notice of Sale under that Deed of Trust executed by the Trustor concerning this Property be mailed to: Community Development Commission of the City of National City Economic Development Division 1243 National City Blvd. National City, CA 91950 NOTICE: A copy of any notice of default and of any notice of sale will be sent only to the address contained in this recorded request. If your address changes, a new request must be recorded. The undersigned Trustor requests that a copy of any notice of default and of any notice of sale under this Deed of Trust be mailed to Trustor at the address of Trustor set forth above. 7 Reasonable Inspection (17) Trustor shall permit Beneficiary and its agents or representatives, to inspect the Property at any and all reasonable times, with at least 24 hours advance notice. Inspections shall be conducted so as not to interfere with the tenants' use and enjoyment of the Property. Hazardous Materials (18) For purposes of this Deed of Trust, "Hazardous Materials" mean and include any hazardous, toxic or dangerous waste, substance or material including, without limitation, flammable explosives, radioactive materials, asbestos, hazardous wastes, toxic substances and any materials or substances defined as hazardous materials, hazardous substances or toxic substances in (or for purposes of) the Comprehensive Environmental Response, Compensation and Liability Act of 1980 ("CERCLA"), as amended (42 U.S.C. §9601, et seq.), the Hazardous Materials Transportation Act (49 U.S.C. §1801, et seq.), the Resource Conservation and Recovery Act (42 U.S.C. §6901, et seq.), and those substances defined as hazardous wastes in §25117 of the California Health and Safety Code or as hazardous substances in §25316 of the California Health and Safety Code or in any regulations promulgated under either such law, any so-called "Superfund" or "Superlien" law, or any other federal, state or local statute, law, ordinance, code, rule, regulation, order or decree regulating, relating to, or imposing liability or standards of conduct concerning, any hazardous, toxic or dangerous waste, substance or material, as now or at any time hereafter in effect. (19) In addition to the general and specific representations, covenants and warranties set forth in the Deed of Trust or otherwise, Trustor represents, covenants and warrants, with respect to Hazardous Materials, as follows: (a) Neither Trustor nor, to the best knowledge of Trustor, any other person, has ever caused or permitted any Hazardous Materials to be manufactured, placed, held, located or disposed of on, under or at the Property or any part thereof, and neither the Property nor any part thereof, or any property adjacent thereto, has ever been used (whether by the Trustor or, to the best knowledge of the Trustor, by any other person) as a manufacturing site, dump site or storage site (whether permanent or temporary) for any Hazardous Materials; (b) Trustor hereby agrees to indemnify Beneficiary, its officers, employees, contractors and agents, and hold Beneficiary, its officers, employees, contractors and agents harmless from and against any and all losses, liabilities, damages, injuries, costs, expenses and claims of any and every kind whatsoever paid, incurred or suffered by, or asserted against Beneficiary, its officers, employees, contractors or agents for, with respect to, or as a direct or indirect result of, the presence or use, generation, storage, release, threatened release or disposal of Hazardous Materials on or under the Property or the escape, seepage, leakage, spillage, discharge, emission or release of any Hazardous Materials from the Property (including, without limitation, any losses, liabilities, damages, injuries, costs, expenses or claims asserted or arising under CERCLA, any so-called "Superfund" or "Superlien" law, or any other federal, state or local statute, law, ordinance, code, rule, regulation, order or decree regulating, relating to or imposing liability or standards of conduct 8 concerning any Hazardous Materials) regardless of whether or not caused by or within the control of Trustor. Notwithstanding the foregoing, Trustor's obligations under this section shall not apply to any losses, liabilities, damages, injuries, costs, expenses, or claims which arise out of or relate to Hazardous Materials which are generated, released or stored on the Property after the date that Beneficiary takes possession thereof. (c) Trustor has not received any notice of (i) the happening of any event involving the use, spillage, discharge, or cleanup of any Hazardous Materials ("Hazardous Discharge") affecting Trustor or the Property or (ii) any complaint, order, citation or notice with regard to air emissions, water discharges, noise emissions or any other environmental, health or safety matter affecting Trustor or the Property ("Environmental Complaint") from any person or entity, including, without limitation, the United States Environmental Protection Agency ("EPA"). If Trustor receives any such notice after the date hereof, then Trustor will give, within seven (7) business days thereafter, oral and written notice of same to Beneficiary. (d) Without limitation of Beneficiary's rights under this Deed of Trust, Beneficiary shall have the right, but not the obligation, to enter onto the Property or to take such other actions as it deems necessary or advisable to clean up, remove, resolve or minimize the impact of, or otherwise deal with, any such Hazardous Materials or Environmental Complaint upon its receipt of any notice from any person or entity, including without limitation, the EPA, asserting the existence of any Hazardous Materials or an Environmental Complaint on or pertaining to the Property which, if true, could result in an order, suit or other action against Trustor affecting any part of the Property by any governmental agency or otherwise which, in the sole opinion of Beneficiary, could jeopardize its security under this Deed of Trust. All reasonable costs and expenses incurred by Beneficiary in the exercise of any such rights shall be secured by this Deed of Trust and shall be payable by Trustor upon demand together with interest thereon at a rate equal to the highest rate payable under the note secured hereby. Continuing Obligations (e) The foregoing representation, covenants, indemnities and warranties shall be continuing and shall be true and correct for the period from the date hereof to the release of this Deed of Trust (whether by payment of the indebtedness secured hereby or foreclosure or action in lieu thereof), and these representations, covenants, indemnities and warranties shall survive such release. Successor Owners (20) Each successor owner of an interest in the Property other than through foreclosure or deed in lieu of foreclosure, shall take its interest subject to this Deed of Trust. Governing Law (21) This Deed of Trust shall be governed by and construed in accordance with the laws of the State of California. 9 TRUSTOR: MIKE N. DALLO AND MONA DALLO By Vt 'VV LcI Print Name: ill ( 'IAA-t-(O Its: Q 1/- By: Print Name:pion Its: Dl.il 1"1 -P 10 Exhibit "A" Legal Description PARCEL l: THE SOUTHERLY HALF OF THE EASTERLY HALF OP THE WESTERLY HALF, THE SOUTHERLY HALF OF THE WESTERLY HALF OF THE NORTHERLY HALF AND THE WESTERLY QUARTER OF THE SOUTHERLY HALF OF 20 ACRE LOT 2 OF QUARTER SECTION 131 OF RANCHO DE LA NACION, IN THE CITY OF NATIONAL CITY, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 166 BY MORRIIL, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAID SAN DIEGO COUNTY. EXCEPTING FROM SAID WESTERLY QUARTER OF THE SOUTHERLY HALF, THE SOUTHERLY 240 FEET THEREOF AND THE WESTERLY 40 FEET THEREOF. ALSO EXCEPTING THAT PORTION OF THE PROPERTY DESCRIBED ABOVE WHICH LIES EASTERLY OF THE FOLLOWING DESCRIBED LINE: BEGINNING AT A POINT IN THE NORTHERLY LINE OF SAID SOUTHERLY HALF OF THE WESTERLY HALF OF THE NORTHERLY HALF OF 20 ACRE LOT 2, WHICH IS DISTANT WESTERLY 172.50 FEET FROM THE NORTHEASTERLY CORNER OF SAID SOUTHERLY HALF OF THE WESTERLY HALF OF THE NORTHERLY HALF; THENCE SOUTHERLY IN A STRAIGHT LINE TO A POINT IN THE SOUTHERLY LINE OF SAID 20 ACRE LOT 2, WHICH IS DISTANT THEREON 171.46 FEET WESTERLY FROM THE SOUTHEASTERLY CORNER OF THE WESTERLY HALF OF SAID LOT. PARCEL 2: AN EASEMENT AND RIGHT OF WAY FOR INGRESS AND EGRESS FOR DRAINAGE PURPOSES, OVER A STRIP OF LAND 6 FEET WIDE IN 20 ACRE LOT 2 OF QUARTER SECTION 131 OF RANCHO DE LA NACION, IN THE CITY OF NATIONAL CITY, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 166 BY MORRIIL, FILED IN THE OFFICE OF THE COUNT Y RECORDER OF SAN DIEGO COUNTY, THE CENTER LINE OF SAID 6 FOOT STRIP BEING DESCRIBED AS FOLLOWS: BEGINNING AT A POINT IN THE NORTLY LINE OF THE SOUTHERLY HALF OF THE WESTERLY HALF OF THE NORTHERLY HALF OF SAID 20 ACRE LOT 2, WHICH IS DISTANT THEREON 172.50 FEET FROM THE NORTHEASTERLY CORNER OF SAID SOUTHERLY HALF OF THE WESTERLY HALF OF THE NORTHERLY HALF, BEING THE NORTHERLY TERMINUS OF THE STRAIGHT LINE WHICH CONNECTS SAID POINT OF BEGINNING WITH A POINT IN THE SOUTHERLY LINE OF SAID 20 ACRE LOT 2 WHICH IS DISTANT 171 • 46 FEET WESTERLY FROM THE SOUTHEASTERLY CORNER OF THE WESTERLY HALF OF SAID LOT; THENCE SOUTHERLY ALONG SAID STRAIGHT CONNECTING LINE, 90.00 FEET TO THE TRUE POINT OF BEGINNING; THENCE NORTHEASTERLY IN A STRAIGHT LINE TO A POINT IN SAID NORTHERLY LINE OF THE SOUTHERLY HALF OF THE WESTERLY HALF OF THE NORTHERLY HALF, WHICH IS DISTANT THEREON WESTERLY 103 • 46 FEET FROM SAID NORTHEASTERLY CORNER OF THE SOUTHERLY HALF OF THE WESTERLY HALF OF THE NORTHERLY HALF OF SAID LOT, SAID 6 FOOT STRIP BEGINNING IN THAT STRAIGHT CONNECTING LINE DESCRIBED ABOVE AND ENDING IN SAID NORTHERLY LINE OF THE SOUTHERLY HALF OF THE WESTERLY HALF OF THE NORTHERLY HALF OF SAID LOT 2. 11 ACKNOWLEDGMENT State of California ) County of San Diego ) nn On S f r - l ,2003-, before me, .()t (\ � 1ck iH - Cis r personally appeared, NA pc:1 t O N A D A ((U personally known to me (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 "DEED OF TRUST" 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 on behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Signature -1."-Q00,., (Seal) SANDRA A. LARA Commission # 1478914 Notary Public - California t San Diego County tT My Comm. Expires Apr 23. 2008 12 DO NOT DESTROY THIS NOTE: WHEN PAID, THIS NOTE AND THE DEED OF TRUST SECURING IT MUST BE SURRENDERED TO TRUSTEE FOR CANCELLATION BEFORE RECONVEYANCE WILL BE MADE. NOTE SECURED BY DEED OF TRUST ("Note") National City, California 1. Principal and Interest. S p (g , 2006 a. FOR VALUE RECEIVED, and in consideration of the Facade Improvement Agreement ("FIA") of even date herewith, by and between the Community Development Commission of the City of National City, ("CDC") and Mike N. Dallo and Mona Dallo ("Maker"), Maker promises to pay to CDC, or order, at 1243 National City Boulevard, National City, California 91950, or such other place as the holder may from time to time designate by written notice to Maker, the principal sum of THREE HUNDRED FORTY SEVEN THOUSAND THREE HUNDRED TWENTY AND NO/100 DOLLARS ($347,320.00), or so much as is paid to the contractor for work completed, together with accrued interest from the date of loan and unpaid principal at the simple interest rate of Five percent (5%) per annum. This Note is issued pursuant to the FIA and the deed of trust (the "Deed of Trust"), being executed concurrently herewith, to be recorded in the office of the County Recorder of San Diego County. The Deed of Trust securing this Note and the FIA are sometimes collectively referred to herein as the "Loan Documents." All capitalized terms which are not defined herein shall have the meaning ascribed to them in the FIA. 2. Term of Loan, Due Date and Right of Prepayment. This Note may be prepaid in whole or in part at any time and, from time to time, without notice or penalty. Should the undersigned sell, convey, transfer, further encumber, or dispose of the Property described in the Deed of Trust, or any part of it, or any interest in it, without first obtaining the written consent of CDC, or the then holder of this Note, then all obligations secured by this Note may be declared due and payable, at the option of CDC, or the then holder of this Note. CDC reserves the right to approve all sales, transfers, conveyances, additional encumbrances, or dispositions of the real property. Consent to one transaction of this type will not constitute a waiver of the right to require consent to future or successive transactions. If such a sale, transfer, further encumbrance, disposition, conveyance or transfer is approved by CDC, then upon the sale, transfer, Page 1 of 5 further encumbrance, conveyance, transfer all accrued but unpaid interest on this Note shall be paid to CDC, at the option of the CDC, or holder of this Note. The CDC and the undersigned agree that if the improvements detailed in the awarded "Contractor's Agreement and Scope of Work" on the REAL PROPERTY commonly known as Foodland Market located at 303 Highland Avenue in the City of National City, are maintained by the Maker for at least five (5) years from the Completion Date of the improvements as determined by the CDC; the Loan will be forgiven including principal and interest and the undersigned shall not be required to repay the loan to the CDC as further detailed in the Facade Improvement Agreement referenced and incorporated hereto. Interest shall be 5% per annum simple interest retroactive to the date of the Loan. Any payments received shall first be applied first to accrued interest then to the principal. No payments are due during the term of this loan, unless the loan is accelerated due to conditions mentioned hereinabove and in the Facade Improvement Agreement. 3. Security for Note. This Note is secured by the Deed of Trust of even date herewith executed by Maker, which creates a lien on that certain real property described therein and by the Loan Documents. 4. Acceleration Upon Default. In the event of any default under the terms of this Note after the expiration of all applicable cure periods, as set forth in the FIA and the Deed of Trust, at the option of the holder of this Note, and after written notice to Maker providing Maker with thirty (30) days in which to cure any default, all principal and interest due under this Note and the Note shall immediately become due and payable, without further notice. Failure to exercise such option shall not constitute a waiver of the right to exercise it in the event of any subsequent default. 5. Costs Paid by Maker. Maker agrees to pay the following costs, expenses, and attorneys' fees paid or incurred by the holder of this Note, or adjudged by a court: (a) reasonable costs of collection, costs, and expenses, and attorneys' fees paid or incurred in connection with the collection or enforcement of this Note, whether or not suit is filed; and (b) costs of suit and such sum as the court may adjudge as attorneys' fees in any action to enforce payment of this Note or any part of it. 6. Payment and Interest Calculation. Principal and interest shall be payable in lawful money of the United States of America. Interest shall be computed based on a 360-day year and 30-day month and the actual number of days elapsed. Payments shall be applied to interest first and then to any unpaid principal balance. 7. Incorporation of the FIA. Page 2 of 5 The provisions of the FIA are expressly incorporated in this Note by this reference. 8. Waiver. Maker hereby waives diligence, presentment, protest and demand, notice of protest, dishonor and nonpayment of this Note, and expressly agrees that, without in any way affecting the liability of Maker hereunder, CDC may extend any maturity date or the time for payment of any installment due hereunder, accept additional security, release any party liable hereunder and release any security now or hereafter securing this Note. Maker further waives, to the full extent permitted by law, the right to plead any and all statutes of limitations as a defense to any demand on this Note, or on any deed of trust, security agreement, guaranty or other agreement now or hereafter securing this Note. 9. Non -Recourse. (a) This Note is non -recourse to Maker. (h) Maker shall indemnify, defend, protect and hold CDC harmless from and against any and all loss, damage, liability, action, cause of action, cost or expense (including, without limitation, reasonable attorneys' fees and expenses) incurred by CDC as a result of any (i) fraud or material misrepresentation under or in connection with the Loan or any Loan Document; (ii) intentional bad faith waste of the real property more particularly described in the Deed of Trust; (iii) losses resulting from Maker's failure to maintain insurance as required under the Deed of Trust; and (iv) misapplication of any rents, security deposits, insurance proceeds, condemnation awards or any other proceeds derived from the collateral security in a manner prohibited by the Loan Documents. CDC shall promptly provide Maker with written notice of any event for which Maker has an indemnification obligation as provided in this Paragraph 9(b). 10. Late Charge. In addition to the foregoing, if any installment due hereunder, including but not limited to the final "balloon payment" due on maturity, is not paid within fifteen (15) days from the date due, Maker promises to pay a "late charge" of five percent (5%) of the installment so overdue to defray the expense incident to handling any such delinquent payment or payments. 11. Severability. If any provision of this Note is determined to be void by court of competent jurisdiction, such determination shall not affect any other provision of this Second Advance Note, and such other provisions shall remain in full force and effect. 12. Non -Waiver. No delay in demanding or failure to demand performance hereunder shall constitute a waiver by holding of its right to subsequently demand such performance or to exercise any remedies for any default hereunder. Further, in order to be effective, any waiver of any of CDC's rights and remedies Page 3 of 5 hereunder shall be expressed in a writing signed by CDC. Further waiver by CDC of any right hereunder shall not constitute a waiver of any other right, including but not limited to the right to exercise any and all remedies for a different or subsequent event of default hereunder. 13. Replacement Note. The undersigned agrees that, in the event that this Note shall become lost or stolen, upon request of CDC, the undersigned shall execute a replacement Note incorporating the terms hereof, provided that CDC shall furnish a written agreement to indemnify the undersigned against all losses, costs, and damages arising from a duplicative demand for payment under this Note. 14. Interpretation. This Note shall be governed and interpreted in accordance with applicable California law. Maker: Mike N. Dallo and Mona Dallo By: Print Name: ✓ I 1 KC DA-LL-O Its: o W Y10 ►' Its: rat any\.e ✓ Page 4 of 5 State of California ) ss: County of San Diego ) On �r _ 1�k 9-O0 (5, 2006, before me, the undersigned, a Notpry Public in and fo the C unty of San Diego, State of alifornia, personally appeared ik Q.. �� Ru Q- tY\OTO'- personally known to me on the basis of satisfactory evidence, to be the person(s) whose name(s) is/are subscribed to the within Note Secured by Deed of Trust 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. Notary Public Page 5 of 5 SANDRA A. LARA Commission # 1478914 Notary Public - California San Diego County My Comm. Expires Apr 23, 2008 RIGHT THUMBPRINT OF SIGNER Top of thumb here CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of California County of On /OM,/n(p Date personally appeared before me, M 0-14 Name and Title of Officer (e.g., "Jane Doe, Notary Pudic") Ron ill or'rrSG 17 Name(s) of Signer(s) Place Notary Seal Above Xpersonally known to me L l 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. OPTIONAL Signature of Notary Public 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 form to another document. Description of Attached Document Title or Type of Document: 61.C'-4-pe Document Date: /U/. /D (o n Number of Pages: Signer(s) Other Than Named Above: %1 f k /lo 4- C 4 t`!5 / (Q Capacity(ies) Claimed by Signer(s) Signer's Name: J Individual I-1 Corporate Officer — Title(s): El Partner — (-1 Limited Ll General f_; Attorney in Fact Trustee Cl Guardian or Conservator H Other: Signer Is Representing: P10 rig 15 Signer's Name: LJ Individual Li Corporate Officer — Title(s): Partner — ❑ Limited I 1 General :..1 Attorney in Fact [-I Trustee [ Guardian or Conservator Li Other: Signer Is Representing: 0 2004 National Notary Association • 9350 De Soto Ave., P.O Box 2402 • Chatsworth, CA 91313-2402 Item No. 5907 RIGHT THUMBPRINT OF SIGNER Top of thumb here Reorder Call Toll -Free 1-800-876-6827 DOCq 2008-0183750 NO CHARGE ON THIS DOCUMENT FOR THE BENEFIT OF A STATE AGENCY FORMED BY THE CITY OF NATIONAL CITY Recording Requested By: Community Development Commission of the City of National City Economic Development Division 11 ATnt+,nn) r';1- fin,•1-,•,nrd National City, CA 91950-4301 And When Recorded Mail To: Community Development Commission of the City of National City Economic Development Division 1243 National City Boulevard National City, CA 91950-4301 DEED OF TRUST APR 08, 2008 9:27 AM OFFICIAL RECORDS SAN DIEGO COUNTY RECORDERS OFFICE GREGORYJ SMITH, COUNTY RECORDER FEES: 0.00 DA: 1 PAGES: 11 18111ulllNIIIIIIIIIIIII0IIINIII0III1III11III1III1III1IIINIII011la1 oR\G\OA1/4d OOCS wE,P,. ?,ECoRoe0 p,EyNos o 2y w\�t\ cov�zy oits\G\NA\'' SCR, COROEO Coes \-10'1 FO�v�1ARpE0 "CO o“\Cc. of tt\c, c\zy THIS DEED OF TRUST is made this p2ti.k-1, day of t,rc,h , 2008, by MIKE N. DALLO AND MONA DALLO, whose address is 5075 Federal Boulevard, San Diego, CA 92102-2652 ("Trustor"), to Chicago Title Company, a California corporation ("Trustee"); for the benefit of the Community Development Commission of the City of National City ("Beneficiary"), whose address is 1243 National City Boulevard, National City, California 91950-4301. TRUSTOR HEREBY irrevocably grants, transfers, and assigns to Trustee, in trust, with power of sale, all that property in the City of National City, County of San Diego, State of California, described as: (See Legal Description — Exhibit "A") FOR THE PURPOSE OF SECURING: (1) Payment of the indebtedness evidenced by a promissory note of even date herewith executed by Trustor, in the principal sum of FIVE HUNDRED FORTY TWO THOUSAND THREE HUNDRED FORTY NINE AND NO/100 DOLLARS ($542,349.00), and any renewal, extension, or modification of the promissory note (the "Note); (2) Any additional sums and interest that may hereafter be loaned to the then record owner of the Property by Beneficiary, when evidenced by another note or notes reciting that it or they are so secured; and (3) The performance of each agreement contained in this Deed of Trust. A. TO PROTECT THE SECURITY OF THIS DEED OF TRUST, TRUSTOR AGREES: Maintenance and Repair (1) To keep the Property in good condition and repair; not to remove or demolish any buildings on the Property; to complete or restore promptly and in good and workmanlike manner any building that may be constructed, damaged or destroyed on the Property; to pay when due all claims for labor performed and materials furnished for the Property; to comply with all laws i,itecung the rroperty or requiring any atterauons or tmprovei„cuis to oe made on the rroperty; not to commit or permit waste of the Property; not to commit, suffer or permit any act upon the Property in violation of law; and to cultivate and maintain the landscaping, and do all other acts that from the character or use of the Property may be reasonably necessary. Fire Insurance (2) To provide, maintain, and deliver to Beneficiary fire insurance satisfactory to and with loss payable to Beneficiary as its interest may appear. The amount collected under any fire or other insurance policy may be applied by Beneficiary upon any indebtedness secured by this Deed of Trust, and in any order determined by Beneficiary, or at the option of Beneficiary, the entire amount so collected or any part of that amount may he released to Trustor, except that if the proceeds of the award for any taking or injury to the Property or the amount of such proceeds plus funds provided by Trustor is sufficient to allow for the repair and restoration of the Property, and such repair and/or restoration is physically and legally possible, then the Trustor shall use the proceeds of the award to timely effectuate such repair and/or restoration. Upon receipt of such proceeds, Beneficiary may hold the proceeds as further security, or apply or release them in the same manner and with the same effect as provided in this Deed of Trust for the disposition of proceeds of fire or other insurance. This application or release shall not cure or waive any default or notice of default under this Deed of Trust or invalidate any act done pursuant to such a notice. Defense of Security (3) To appear in and defend any action or proceeding purporting to affect the security of this Deed of Trust or the rights or powers of Beneficiary, or Trustee; and to pay all costs and expenses, including cost of evidence of title and attorneys' fees in a reasonable sum, in any such action or proceeding in which Beneficiary or Trustee may appear, and in any suit brought by Beneficiary to foreclose this Deed of Trust. Payment of Liens and Taxes (4) To pay, at least ten (l0) days before delinquency, all taxes and assessments affecting the Property, including assessments on appurtenant water stock, ail encumbrances, charges, and liens, with interest, on the Property or any part of the Property_ which appear to be prior or superior to this Deed of Trust; and all costs, fees, and expenses of this "Trust. Deed of Trust - 2008 Mike/Mona Dallo If Trustor fails to make any payment or to do any act as provided in this Deed of Trust, then Beneficiary or Trustee may (hut is not obligated to) make the payment or do the act in the required manner, and to the extent deemed necessary to Beneficiary or Trustee to protect the security of this Deed of Trust. The performance by Beneficiary or Trustee of such an act shall not require notice to or demand upon Trustor, and shall not release Trustor from any obligation under this Deed of Trust. Beneficiary or Trustee shall also have the following related rights and powers: to enter upon the Property for the foregoing purposes; to appear in and defend any action or proceeding purporting to affect the security of this Deed of Trust or the rights and powers of Beneficiary or Trustee; to pay, purchase, contest. or compromise any encumbrance, charge, or lien that in the judgment of either appears to be prior or superior to this Deed of Trust; to employ ,:onns'l: ;an(I to nsiv exnenses and ('(etc incI11(lino art0r1,0vq' fees Reimbursement of Costs (5) To pay immediately and without demand all sums expended by Beneficiary or Trustee pursuant to this Deed of Trust, with interest from date of expenditure at the amount allowed by law in effect at the date of this Deed of Trust, and to pay any reasonable amount demanded by Beneficiary (up to the maximum allowed by law at the time of the demand) for any beneficiary statement requested by Trustor or any other beneficiary of a Deed of Trust encumbering the Property regarding the obligation secured by this Deed of Trust. Obligations of Trustor (6) That Trustor will not permit or suffer the use of any of the Property for any purpose other than the use for which the same was intended at the time this Deed of Trust was executed. (7) That the Facade Improvement Agreement and Amendment to the Facade improvement Agreement referred in the Note are incorporated herein by reference and made a part of this Deed of Trust. (8) To perform, in a timely manner, each agreement and covenant by and between Trustor on any and all notes, loans, and deeds of trust that are senior and/or junior to this Deed of Trust. A default in any of these obligations. beyond any applicable cure period, shall constitute a default under the Deed of Trust. B. TRUSTOR AGREES TIIAT: Condemnation Award (1) Any award of damages in connection with any taking or condemnation, or for injury to the Property by reason of public use. or for damages for private trespass or injury to the Property, is hereby assigned and shall he paid to Beneficiary. as its interest may appear as further security for all obligations secured by this Deed of Trust, except that if the proceeds of the award for any taking or injury to the Property or the amount of such proceeds plus funds provided by Trustor is sufficient to allow for the repair and restoration of the Property, and such repair and/or restoration is physically and legally possible, then the Trustor shall use the proceeds of the award to timely effectuate such repair and/or restoration. Upon receipt of such proceeds. Beneficiary may hold the proceeds as further security, or apply or release them in the same manner and with the same effect as provided in this Deed of Trust for the disposition of proceeds of fire or other insurance. Deed of -r rust - 2008 Mike:'Mona Dallo Waiver of Late Payments (2) By accepting payment of any sum secured by this Dced of Trust after its due date, Beneficiary does not waive its right either to require prompt payment when due of all other sums so secured or to declare default for failure to pay any indebtedness secured by this Deed of Trust. Trustee's Powers (3) Upon written request of Beneficiary and presentation of this Deed of Trust, Trustee may (a) reconvey all or any part of the Property; (b) consent to the making and recording, or either, on any map or plat of all or any part of the Property; (c) join in granting any easement of the P toperly; or (d) joiii in of coii5cfl to any extension agreement or any agreement subordinating the lien, encumbrance, or charge of this Deed of Trust. Trustee need not provide Trustor with notice before taking any of the foregoing actions, and shall not be liable for the proper performance of the act. The exercise by Trustee of any of the foregoing powers shall not affect the personal liability of any person for payment of the indebtedness secured by this Deed of Trust, or the lien of this Deed of Trust on the remaining property as security for the repayment of the full amount secured by this Deed of Trust. Full Reconveyance (4) Upon written request of Beneficiary stating that all obligations secured by this Deed of Trust have been performed in full, surrender of this Deed of Trust, any notes secured by this Deed of Trust to the Trustee for cancellation and retention, and payment of Trustee's fees and charges, Trustee shall reconvey, without warranty, the Property then subject to this Deed of Trust. Absent manifest error, the recitals in the Reconveyance shall he conclusive proof of the truthfulness of the recitals. The grantee in the Reconveyance may he described as "the person or persons legally entitled thereto.- live years after issuance of the full reconveyance, Trustee may destroy the Note and this Deed of Trust, unless directed in the request to retain them. Assignment of Rents (5) As additional security, Trustor hereby gives to and confers upon Beneficiary the right, power, and authority during the continuance of these Trusts, to collect the rents, issues, and profits of the Property, but reserves the right, prior to any default by Trustor in payment of any indebtedness secured by this Deed of Trust or in the performance of any agreement under this Deed of Trust, to collect and retain these rents, issues, and profits as they become due and payable. Upon any such default for which cure has not been commenced within thirty (30) days and thereafter completed with diligence. Beneficiary may, without notice and without regard to the adequacy of the security for the indebtedness secured by this Deed of Trust, either personally or by agent or court -appointed receiver. do the following: enter upon and take possession of the Property or any part of the Property; sue for or otherwise collect all rents, issues, and profits, including those past due and unpaid; and apply these rents. issues, and profits, less costs and expenses of operation and collection (including reasonable attorneys' fees), upon any indebtedness secured by this Deed of Trust, in any order determined by Beneficiary. The exercise of the foregoing rights by Beneficiary shall not cure or waive any default under this Deed of Trust or invalidate any act done pursuant to such a notice. 4 Deed of Trust - 2008 MikciMona t)allo Default in Foreclosure (6) Upon default by Trustor in the payment of any indebtedness secured by this Deed of Trust or in the performance of any obligation under this Deed of Trust for which cure has not been commenced within thirty (30) days, and thereafter completed with diligence, Beneficiary may declare all sums secured by this Deed of Trust immediately due and payable by delivering to Trustee a written declaration of default and demand for sale and a written notice of default and election to sell the Property. Trustee shall cause the notice of default and election to sell to be recorded. Beneficiary also shall deposit with Trustee this Deed of Trust, a copy of the Agreement, and all other documents evidencing obligations secured by this Deed of Trust. Atter the required time period has lapsed following the recordation of the Notice of Default, and after notice of sale has been given as required by law, Trustee, without demand on Trustor, shall sell the Property at the time and place specified in the notice of sale, either as a whole or in separate parcels, and in any order determined by Trustee, at public auction to the highest bidder for cash in lawful money of the United States, payable at the time of sale. Trustee may postpone sale of all or any portion of the Property by public announcement at the time and place of sale, and from time to time thereafter may postpone the sale by public announcement at the time fixed by the preceding postponement. Trustee shall deliver to the purchaser at the auction its deed conveying the Property sold, but without any covenant or warranty, express or implied. Absent manifest error, the recital in the deed of any matter or fact shall be conclusive proof of the truthfulness of the recital. Any person, including Trustor, Trustee, or Beneficiary, may purchase at the sale. After deducting all costs, fees, and expenses of Trustee and Beneficiary under this paragraph, including costs of procuring evidence of title incurred in connection with sale, Trustee shall apply the proceeds of sale to payment of: all sums expended under the terms of this Deed of Trust. not then repaid, with accrued interest at the amount allowed by law in effect at the date of this Deed of Trust; all other sums then secured by this Deed of Trust; and the remainder, if any, to the person or persons legally entitled to the remaining proceeds. Further Encumbrances (7) Should the Trustor agree to or actually sell, convey, transfer, or dispose of, or further encumber the Property. or any part of it, or any interest in it (each, a "Transfer'), without first obtaining the written consent of the Beneficiary, then all obligations secured by the Deed of Trust may be declared due and payable, at the option of the Beneficiary, as stated in Section V.1 of the Facade Improvement Agreement (as defined in the Note). Consent to one transaction of this type will not constitute a waiver of the right to acquire consent to future or successive transactions. General Provisions (8) This Deed applies to, inures to the benefit of, and binds all parties to this Deed of Trust, and their heirs, legatees, devisees, administrators, executors, successors, and assigns. The term "Beneficiary" shall mean the Community Development Commission of the City of National City, and the heirs, legatees, devisees, administrators, executors, and assigns of any such person. 5 Deed of Trust - 2008 Mike'Mona t)a!lo In this Deed, whenever the context so requires, the masculine gender includes the feminine and/or neuter, and the singular number includes the plural. Acceptance by Trustee (9) Trustee accepts this Trust when this Deed, duly executed and acknowledged, is made a public record as provided by law. Trustee is not obligated to notify any party to this Decd of Trust of pending sale under any other deed of trust or of any action or proceeding in which Trustor, Beneficiary, or Trustee shall be a party unless brought by "Trustee. Substitution of Trustees (10) Beneficiary, or any successor in ownership of any indebtedness secured by this Deed of Trust, may from time to time, by written instrument, substitute a successor or successors to any Trustee named in or acting under this Deed of Trust. The substitution instrument shall contain the name of the original Trustor, Trustee, and Beneficiary under this Deed of Trust, the book and pate where this Deed is recorded, and the name and address of the new Trustee. When executed by Beneficiary, and duly acknowledged and recorded in the office of the recorder of the county or counties where the Property is situated, the substitution instrument shall he conclusive proof of proper substitution of the successor "trustee or Trustees. Any successor Trustee or Trustees shall, without conveyance from the Trustee predecessor, succeed to all its title, estate, rights, powers, and duties. Cumulate Powers and Remedies (11) The powers and remedies conferred in the Deed of Trust are concurrent and cumulative to all other rights and remedies provided in this Deed of Trust or given by law. These powers and remedies may be exercised singly. successively, or together, and as often as deemed necessary. Conclusiveness of Recitals (12) The recitals contained in any Reconveyance. trustees deed. or any other instrument executed by the Trustee from time to time under the authority of this Decd of Trust or in exercise of its powers or the performance of its duties under this Deed of Trust, shall be conclusive evidence of their truth, whether stated as specific and particular facts, or in general statements or conclusions absent manifest error. Further, the recitals shall he binding and conclusive upon the Trustor, its heirs, executors, administrators, successors, and assigns, and all other persons. Attorneys' Fees (13) If any action is brought for the foreclosure of this Deed of Trust or for the enforcement of any provision of this Deed of Trust (whether or not suit is filed), Trustor agrees to pay all costs and expenses of Beneficiary and Trustee, including reasonable attorneys' tees; and these sums shall he secured by this Deed of Trust. Co -trustees (14) If two or more persons arc designated as Trustee in this Deed of Trust, any, or all, power granted in this Deed of Trust to Trustee may be exercised by any of those persons, if the other person or persons are unable, for any reason, to act. Any recital of this inability in any instrument executed by any of those persons shall be conclusive against Trustor and Trustor's heirs and assigns. 6 Deed of -mist - 200R Mike/Mona Dailo Request for Notices of Default and Sale (15) In accordance with Section 2924b of the California Civil Code, request is hereby made that a copy of any Notice of Default and a copy of any Notice of Sale under that Deed of Trust executed by the Trustor concerning this Property be mailed to: Community Development Commission of the City of National City Economic Development Division 1243 National City Boulevard National City, CA 91950-430I NOTICE: A copy of any notice of default and of any notice of sale will be sent only to the address contained in this recorded request. If your address changes, a new request must be recorded. The undersigned Trustor requests that a copy of any notice of default and of any notice of sale under this Deed of Trust be mailed to Trustor at the address of Trustor set fbrth above. Reasonable Inspection (17) Trustor shall permit Beneficiary and its agents or representatives, to inspect the Property at any and all reasonable times, with at least 24 hours advance notice. Inspections shall he conducted so as not to interfere with the tenants' use and enjoyment of the Property. Hazardous Materials (18) For purposes of this Deed of Trust, "1 Iazardous Materials" mean and include any hazardous, toxic or dangerous waste, substance or material including, without limitation, flammable explosives, radioactive materials, asbestos, hazardous wastes or toxic substances in (or for purposes of) the Comprehensive Environmental Response, Compensation and Liability Act of 1980 ('`CI;RCLA"), as amended (42 U.S.C. § 9601, et seq.), the Ilazardous Materials Transportation Act (49 U.S.C. § 1801, et seq.), the Resource Conservation and Recovery Act (42 U.S.C. § 6901, et seq.), and those substances defined as hazardous wastes in § 25117 of the California Health and Safety Code or as hazardous substances in § 25316 of the California Health and Safety Code or in any regulations promulgated under either such Iaw, any so-called ."Superfund" or'`Superlien" law, or any other federal. state, or local statute, law, ordinance, code, rule, regulation, order, or decree regulating, relating to, or imposing liability or standards of conduct concerning any hazardous, toxic or dangerous waste, substance or material, as now or at any time hereafter in effect. (19) In addition to the general and specific representations, covenants, and warranties set forth in the Deed of Trust or otherwise, Trustor represents, covenants, and warrants, with respect to Hazardous Materials, as follows: (a) Neither Trustor nor, to the best knowledge of Trustor, any other person, has ever caused or permitted any Hazardous Materials to be manufactured. placed, held, located or disposed of on, under or at the Property or any part thereof, and neither the Property nor any part Deed of I rust - 2008 Mike;Mon. Dail() thereof, or any property adjacent thereto, has ever been used (whether by the Trustor or, to the best knowledge of the Trustor, by an other person) as a manufacturing site, dump site, or storage site (whether permanent or temporary) for any Hazardous Materials; (b) Trustor hereby agrees to indemnify Beneficiary, its officers, employees contractors, and agents, and hold Beneficiary, its officers, employees, contractors and agents harmless from and against any and all losses, liabilities, damages, injuries, costs, expenses and claims of any and every kind whatsoever paid, incurred or suffered by, or asserted against Beneficiary, its officers, employees, contractors or agents for, with respect to, or as a direct or indirect result of, the presence or use, generation, storage, release, threatened release or disposal of Hazardous Materials on or under the Property or the escape, seepage, leakage, spillage, discharge, emission or release of any Hazardous Materials from the Property (including, without limitation, any losses, liabilities, damages, injuries, costs. expenses, or claims asserted or arising under CERCL.A, any so-called "Superfund" or "Superlien" law. or any other federal, State or local statute law, ordinance, code, rule, regulation, order or decree regulating, relating to or imposing liability or standards of conduct concerning any Hazardous Materials) regardless of whether or not caused by or within the control of "fustor. Notwithstanding the foregoing, f rustor's obligations under this section shall not apply to any losses, liabilities, damages, injuries, costs, expense, or claims which arise out of or relate to Hazardous Materials which are generated, released or stored on the Property after the date that Beneficiary takes possession thereof. (c) Trustor has not received any notice of (i) the happening of any event involving the use, spillage, discharge, or cleanup of any Hazardous Materials ("Hazardous Discharge") affecting Trustor or the Property or (ii) any complaint, order, citation, or notice with regard to air emissions, water discharges, noise emissions, or any other environmental, health, or safety matter affecting Trustor, or the Property ("Environmental Complaint") from any person or entity. including, without limitations, the United States Environmental Protection Agency ("EPA"). If Trustor receives any such notice after the date hereof, then Trustor will give, within seven (7) days thereafter, oral and written notice of same to Beneficiary. (d) Without limitation of Beneficiary's rights under this Deed of Trust, Beneficiary shall have the right, but not the obligation, to enter onto the Property or to take such other actions as it deems necessary or advisable to clean up, remove, resolve, or minimize the impact of, or otherwise deal with, any such Hazardous Materials or Environmental Complaint upon its receipt of any notice from any person or entity, including without limitation, the EPA, asserting the existence of any Hazardous Materials or an Environmental Complaint on or pertaining to the Property, which if true, could result in an order, suit, or other action against Trustor affecting any part of the Property by any governmental agency or otherwise which, in the sole opinion of Beneficiary, could jeopardize its security under the Deed of Trust. All reasonable costs and expenses incurred by Beneficiary in the exercise of any such rights shall be secured by this Deed of Trust, and shall be payable by Trustor upon demand together with interest thereon at a rate equal to the highest rate payabk under the note secured hereby. 8 Deed of Trust • 2008 Miko'Mona f)allo Continuing Obligations (e) The foregoing representation, covenants, indemnities, and warranties shall be continuing, and shall be true and correct for the period from the date hereof to the release of this Deed of Trust (whether by payment of the indebtedness secured hereby or foreclosure or action in lieu thereof), and these representations, covenants, indemnities, and warranties shall survive such release. Successor Owners (20) Each successor owner of an interest in the Property other than through foreclosure or deed in lieu of ioreclosure, Niiiiil lake its tntetest subject to this Deed of Frust. Governing Law (21) This Deed of Trust shall he governed by and construed in accordance with the laws of the State of California. TRLJSTOR: MIKE N. DALLO, D MONA DALLO iAArr /V• Mik lei. Dallo Owner r) • 19 Mona P allo Owner 9 Deed of Trust - 2008 Mike/Mona D2flo ACKNOWLEDGMENT State of California County of ai,y► On t,rc' AA-- before me, Se, b 0 7arc-bdl9 sert name and title of the officer) personally a - red NC IV . Ballo aywi Igo 4- C/ck I O wh pr ved t n the basis of ‘a-lisfaccorto be th erson(s whose name(s) is1 subscribed to the within instrument and acknowledged to me that he/s a/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. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature/ (Seal) SERGIO O. GARCIA-GODOM Commission # 1 d62601 1 Nolan Public - Cawornio San Diego County My Comm. Expires Apr 11, 2006 Exhibit "A" Legal Description PARCEL 1: THE SOUTI IERLY HALF OF THE EASTERLY HALF OP THE WESTERLY IIALF, TIIE SOFJTIIERLY HALF OF TILE WESTERLY HALF OF THE NORTHERLY HALF AND TI-IE WESTERLY QUARTER OF TIIE SOUTIIERLY I IALF OF 20 ACRE LOT 2 OF QUARTER SECTION 131 OF RANCI IO DE LA NACION, IN THE CITY OF NATIONAL CITY, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 166 BY MORRIIL, FILED IN THE OFFICE OF TIIE COUNTY RECORDER OF SAID SAN DIEGO COUNTY. EXCEPTING FROM SAID WESTERLY QUARTER OF THE SOUTHERLY HALF, THE SOUTHERLY 240 FEET THEREOF AND THE WESTERLY 40 FEET THEREOF. ALSO EXCEPTING THAT PORTION OF TILE PROPERTY DESCRIBED ABOVE WHICH LIES EASTERLY OF TIIE; FOLLOWING DESCRIBED LINE: BEGINNING AT A POINT IN TIIE NORTHERLY LINE OF SAID SOUTHERLY HALF OF THE WESTERLY IIALF OF THE NORTHERLY IIALF OF 20 ACRE LOT 2, WHICH IS DISTANT WESTERLY 172.50 FEET FROM THE NORTHEASTERLY CORNER OF SAID SOUTIIERLY HALF OF THE WESTERLY HALF OF TIIE NORTHERLY HALF; TIIENCE SOUTHERLY IN A STRAIGHT LINE TO A POINT IN THE SOUTIIERLY LINE OF SAID 20 ACRE LOT 2, WHICI I IS DISTANT THEREON 171.46 FEET WESTERLY FROM THE SOUTHEASTERLY CORNER OF TILE WESTERLY HALF OF SAID LOT. PARCEL 2: AN EASEMENT AND RIGHT OF WAY FOR INGRESS AND EGRESS FOR DRAINAGE PURPOSES, OVER A STRIP OF LAND 6 FEET WIDE IN 20 ACRE LOT 2 OF QUARTER SECTION 131 OF RANCIIO DE LA NACION, IN THE CITY OF NATIONAL CITY, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 166 BY MORRIIL, FILED IN THE OFFICE OF THE COUNT Y RECORDER OF SAN DIEGO COUNTY, THE CENTER LINE OF SAID 6 FOOT STRIP BEING DESCRIBED AS FOLLOWS: BEGINNING AT A POINT IN THE NORTLY LINE OF THE SOUTHERLY HALF OF THE WESTERLY I-EALF OF TIiF NORTHERLY HALF OF SAID 20 ACRE LOT 2, WHICII IS DISTANT TIIEREON 172.50 FEET FROM THE NORTIIEASTERLY CORNER OF SAID SOUTHERLY HALF OF THE WESTERLY HALF OF THE NORTHERLY IIALF, BEING THE NORTHERLY TERMINUS OF THE STRAIGHT LINE WHICH CONNECTS SAID POINT OF BEGINNING WITH A POINT IN THE SOUTHERLY LINE OF SAID 20 ACRE LOT 2 WHICH IS DISTANT 171 • 46 FEET WESTERLY FROM THE SOUTI IEASTERLY CORNER OF THE WESTERLY IIALF OF SAID LOT; THENCE SOUTIIERLY ALONG SAID STRAIGHT CONNECTING LINE, 90.00 FEET TO THE TRUE POINT OF BEGINNING; THENCE NORTHEASTERLY IN A STRAIGHT LINE TO A POINT IN SAID NORTHERLY LINE OF TIIE SOUTHERLY IIALF OF THE WESTERLY HALF OF THE NORTHERLY IIALF, WHICH I IS DISTANT TIIEREON WESTERLY 103 • 46 FEET FROM SAID NORTIIEASTERLY CORNER OF THE SOUTHERLY HALF OF TIIE WESTERLY IIALF OF THE NORTE EERLY HALF OF SAID LOT, SAID 6 FOOT STRIP BEGINNING IN THAT STRAIGHT CONNECTING LINE DESCRIBED ABOVE AND ENDING IN SAID NORTHERLY LINE OF THE SOIJTHERI,Y I IALF OF THE WESTERLY HALF OF THE NORTHERLY HALF OF SAID LOT 2. PROMISSORY NOTE SECURED BY DEED OF TRUST San Diego, California March 24, 2008 [Date] 1. For value received, the undersigned, MIKE N. DALLO AND MONA DALLO ("Borrower" or "DALLO-), promise to pay to the order of the Community Development Commission of the City of National City ("Lender" or "CDC"). in accordance with the provisions of this Promissory Note ("Note"). on or before the Loan Maturity Date (defined hr.1n v). the initial sums of Five Hiindrerl Forty Two ThoiNand Three Hundred Forty Nine and no/100 Dollars ($542,349.00) (the "Loan Amount"). 2. The "Effective Date" of this Note is September 18. 2006. the date of the initial advance of funds. 3. All capitalized terms used in this Note, unless otherwise defined, will have the respective meanings specified in the Facade Improvement Agreement. Amendment to the Facade Improvement Agreement, or the Deed of Trust, entered into between Borrower and Lender on September 18, 2006, April 1, 2008 and April 1, 2008, respectively, which meanings are incorporated herein by this reference as though fully set forth. 4. If any provision of this Note conflicts with or is inconsistent with the provisions of the Facade Improvement Agreement or the Amendment to the Facade Improvement Agreement or the Deed of Trust (all collectively. the "Facade Agreements"). the Facade Agreements shall supersede. 5. The Loan Amount will hear interest at the rate of 5% per annum simple interest retroactive to the date of the Loan. 6. The Loan Amount will be due on the Loan Maturity Date (as defined below). 7. "Loan Maturity Date" means the date on which the indebtedness evidenced by this Note is due pursuant to the terms of any of the Facade Agreements. which includes. but is not limited to, immediate repayment if the Property is sold, leased, conveyed, refinanced, vacated, transferred, assigned, alienated, or hypothecated within five (5) years from the Completion Date of the improvements as defined by and at the option of the CDC. 8. All payments will be applied first to accrued interest then to the principal. 9. The Loan Amount is payable in lawful money of the United States of America, in same day funds at any place that Lender or the legal holders of this Note may, from time to time, in writing designate, and in the absence of that designation, then by cashiers check delivered to the attention of the Finance Department at CDC' s office located at 1243 National City Boulevard, National City, California 91950. 1 Dallo Promissory Not,: 10. The principal amount of the indebtedness evidenced by this Note may, at the option of the Borrower, be prepaid in whole or in part without penalty or premium. 11. Time is of the essence. A failure by Borrower to fully repay the Loan on or before the Loan Maturity Date will constitute an Event of Default under this Note and entitle Lender to exercise any and all of its contractual, legal or equitable remedies including but not limited to those set forth in the Facade Agreements. 12. On the occurrence of an Event of Default under this Note, or on the occurrence of any Event of Default under any of the Facade Agreements, or on the occurrence of any other r.ATont that under the terms of any of the Fa�a,rlr Aoret'r ents. s_=ivec rich to 1 i'nder's rit2ht to accelerate the repayment of the outstanding Loan Amount, then, at the sole option of Lender, the full outstanding amount of this Note, or any part thereof specifically designated by the Lender in writing, shall immediately become due and payable by Borrower to Lender, without any further presentment, demand, protest, or notice of any kind. Borrower agrees that this Note will be deemed to have been made under, and will be governed by, the laws of the state of California in all respects, including matters of construction, validity, and performance, and that none of its terms or provisions may be waived, altered, modified, or amended except as Lender may consent to in a writing duly signed by Lender or its authorized agents. 13. This Note is to become secured, among other security, by security instruments covering one or more parcels of real property in National City, California and any improvements, fixtures or personalty located thereon, together with: (i) all rights, privileges, tenements, hereditaments, rights -of -way, easements, and appurtenances of the land, the improvements, fixtures or personalty located on the land, and all rights, title, and interest of Borrower in any streets, ways, alleys, strips, or gores of land adjoining such property; and (ii) all of Borrower's right, title, and interest in and to said property, including any rights or entitlements affecting the land, the improvements, fixtures, or personalty, including, without limitation, the Deed of Trust, (which is attached to the Amendment to the Facade Improvement Agreement as Exhibit A. and incorporated herein by this reference as though fully set forth herein), to be executed by the undersigned, as trustor, in favor of Chicago Title, as trustee, for the benefit of Lender, as beneficiary, in accordance with the terms of the Facade Agreements. This Note is the Note referred to in the Facade Agreements, as well as the Deed of Trust, and is entitled to the benefits of the Facade Agreements. that contain among other things, provisions for acceleration of the maturity of this Note on the happening of certain stated events. 14. The Deed of Trust provides as follows: "Should the Trustor agree to or actually sell, convey, transfer, or dispose of or further encumber the Property, or any part of it, or any interest in it (each, a "Transfer"). without first obtaining the written consent of the Beneficiary, then all obligations secured by the Deed of Trust may be declared due and payable, at the option of the Beneficiary, as stated in Section V.I of the Facade Improvement Agreement (as defined in the Note). Consent to one Dail() Promissory Note transaction of this type will not constitute a waiver of the right to acquire consent to future or successive transactions." 15. Borrower agrees that, if Lender or holder of this Note incurs: (i) any costs, fees, or expenses, including costs of procuring evidence of title incurred in connection with sale; or (ii) any costs including, without limitation, attorney fees, incurred in enforcing payment, whether or not suit is filed, or protecting security, including, without limitation, all costs, attorney fees, and expenses incurred in connection with any bankruptcy, reorganization, arrangement, or other similar proceedings involving the undersigned or the Property, that in any way affects the exercise of rights and remedies under this Note or the Facade Agreements, then Borrower will r•Pnw such PYrenSr.s upon receipt of written demand from Lender, and, if'such expenses are not immediately repaid, such outstanding amount will increase the currently outstanding indebtedness under this Note, and be secured by the Deed of Trust. All costs and expenses incurred by Lender or holder of this Note to obtain relief from the stay of bankruptcy statutes are specifically included in the expenses referred to in this Paragraph. 16. Regardless of any of the provisions of this Note, nothing in this Paragraph will be deemed to limit or prejudice the rights of' Lender to: (a) foreclose any Deed of Trust or enforce any of its other rights or remedies under the Facade Agreements; or (b) proceed against any entity or person, including Borrower with respect to the enforcement of any leases, bonds, policies of insurance, or other agreements; or (c) recover damages against Borrower for fraud, breach of warranty, failure to maintain insurance, waste, or material misrepresentation; or (d) recover any condemnation proceeds or insurance proceeds or other similar funds or payments attributable to the Property that. under the terms of the Facade Agreements should have been paid to Lender; or (e) recover any tenant security deposits, prepaid rents, or other similar sums paid to or held by Borrower or any other entity or person in connection with the Property; or (f) recover the rents and profits of the Property accruing from and after the occurrence of an Event of Default that have not been applied to pay any portion of the outstanding indebtedness of this Note, operating, and maintenance expenses of the Property, insurance, premiums, impositions, deposits into a reserve for replacement, or other sums required by the Loan Document; or (g) recover damages including, without limitation, recovery of all amounts authorized under any environmental indemnity agreement between Lender and Borrower, relating to breach of any covenant, representation, or warranty of Borrower in the Facade Agreements; or (h) recover from Borrower the entire outstanding indebtedness of this Note, if the exercise of any right or remedy under federal, state, or local forfeiture laws results in the loss of the lien of any Deed of Trust, or the priority of such, against the respective Property; or (i) recover funds to reimburse Lender for sums expended by Lender for the protection or preservation of the Property or Lender's interest in it (including, without limitation, payment of any real property taxes or assessments). Any liability of Borrower for any obligations arising in connection with the matters set forth in the above clauses, (a) through (i) inclusive, will be personal liability, and may be asserted against and recovered from its or their interest in the Property. as well as. against any of Borrower's other assets. Any liability of Borrower arising in connection with matters set firth in clause (g) will not he limited to the outstanding principal amount of this Note, and Borrower's obligations will survive foreclosure, deed in lieu of foreclosure, release. partial release, reconveyance, partial reconveyance, or any other transfer of the Property. 3 Dalle Promissory Note 17. The Deed of Trust will be reconveyed upon Lender's satisfaction that all obligations secured by the Deed of Trust have been performed in full. In witness whereof, the undersigned has caused this Promissory Note to be executed as of the date and year first above written. Borrower: MIKE N. DALLO and MONA DALLO Mike N. Dallo By: 4 pnllo Promissory Note ACKNOWLEDGMENT State of California County of is r 0 i e1jr� On tekg-c,:n;x-"Vt't1.jAprif before me, I 0- l l.L'C-6 (in ert name and title of the officer) d personaiiy appearea Gal o CLy' 'L ILo Oc t.0 who 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. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) SERGIO O. GARCIA-GOODY Commission 1482601 Notary Public - CaNfomla San Diego County I My Comm. Expires Apr 11.2008 PROMISSORY NOTE SECURED BY DEED OF TRUST San Diego, California March 24, 2008 [Date] 1. For value received, the undersigned, MIKE N. DALLO AND MONA DALLO ('`Borrower' or "DALLO"), promise to pay to the order of the Community Development Commission of the City of National City ("Lender" or "CDC"). in accordance with the provisions of this Promissory Note ("Note"). on or before the Loan Maturity Date (defined below). the initial sums of Five Hundred Forty Two Thousand Three Hundred Forty Nine and no/100 Dollars (S542,349.00) (the "Loan Amount"). 2. The "Effective Date" of this Note is September 18. 2006, the date of the initial advance of funds. 3. All capitalized terms used in this Note, unless otherwise defined, will have the respective meanings specified in the Facade Improvement Agreement, Amendment to the Facade Improvement Agreement. or the Deed of "trust, entered into between Borrower and Lender on September 18, 2006, April 1, 2008 and April I, 2008, respectively, which meanings are incorporated herein by this reference as though fully set forth. 4. If any provision of this Note conflicts with or is inconsistent with the provisions of the Facade Improvement Agreement or the Amendment to the Facade improvement Agreement or the Deed of Trust (all collectively, the "Facade Agreements"). the Facade Agreements shall supersede. 5. The Loan Amount will hear interest at the rate of 5% per annum simple interest retroactive to the date of the Loan. 6. The Loan Amount will he due on the Loan Maturity Date (as defined below). 7. "Loan Maturity Date" means the date on which the indebtedness evidenced by this Note is due pursuant to the terms of any of the Facade Agreements. which includes, but is not limited to, immediate repayment if the Property is sold, leased, conveyed, refinanced, vacated, transferred, assigned, alienated, or hypothecated within five (5) years from the Completion Date of the improvements as defined by and at the option of the CDC. 8. All payments will he applied first to accrued interest then to the principal. 9. The Loan Amount is payable in lawful money of the United States of America, in same day funds at any place that ],ender or the legal holders of this Note may, from time to time, in writing designate, and in the absence of that designation, then by cashiers check delivered to the attention of the Finance Department at CDC's office located at 1243 National City Boulevard, National City, California 91950. 1 Dalio Promissory Note 10. The principal amount of the indebtedness evidenced by this Note may, at the option of the Borrower. be prepaid in whole or in part without penalty or premium. 11. Time is of the essence. A failure by Borrower to fully repay the Loan on or before the Loan Maturity Date will constitute an Event of Default under this Note and entitle Lender to exercise any and all of its contractual, legal or equitable remedies including but not limited to those set forth in the Facade Agreements. 12. On the occurrence of an Event of Default under this Note, or on the occurrence of any Event of Default under any of the Facade Agreements, or on the occurrence of any other c.ront that. under the terms of anv of the Facade Agreements, (lives rise to Lender's right to accelerate the repayment of the outstanding Loan Amount, then, at the sole option of Lender, the full outstanding amount of this Note, or any part thereof specifically designated by the Lender in writing, shall immediately become due and payable by Borrower to Lender, without any further presentment, demand, protest, or notice of any kind. Borrower agrees that this Note will be deemed to have been made under, and will be governed by, the laws of the state of California in all respects, including matters of construction, validity, and perfbrmance, and that none of its terms or provisions may be waived, altered, modified, or amended except as Lender may consent to in a writing duly signed by Lender or its authorized agents. 13. This Note is to become secured, among other security, by security instruments covering one or more parcels of real property in National City, California and any improvements, fixtures or personalty located thereon, together with: (i) all rights, privileges, tenements, hereditaments, rights -of -way, easements, and appurtenances of the land, the improvements, fixtures or personalty located on the land, and all rights, title, and interest of Borrower in any streets, ways, alleys, strips, or gores of land adjoining such property: and (ii) all of Borrower's right, title, and interest in and to said property, including any rights or entitlements affecting the land, the improvements, fixtures, or personalty, including, without limitation, the Deed of "Trust, (which is attached to the Amendment to the Facade Improvement Agreement as Exhibit "A and incorporated herein by this reference as though fully set forth herein), to be executed by the undersigned, as ttustor, in favor of Chicago Title, as trustee, for the benefit of Lender, as beneficiary, in accordance with the terms of the Facade Agreements. This Note is the Note referred io in the Facade Agreements. as well as the Deed of Trust, and is entitled to the benefits of the Facade Agreements. that contain among other things, provisions for acceleration of the maturity of this Note on the happening of certain stated events. 14. The Deed of Trust provides as follows: "Should the Trustor agree to or actually sell, convey, transfer, or dispose of, or further encumber the Property, or any part of it, or any interest in it (each, a "Transfer"), without first obtaining the written consent of the Beneficiary, then all obligations secured by the Deed of Trust may be declared due and payable, at the option of the Beneficiary, as stated in Section V.1 of the Facade Improvement Agreement (as defined in the Note). Consent to one 2 i allo Promissory Note transaction of this type will not constitute a waiver of the right to acquire consent to future or successive transactions.' 15. Borrower agrees that, if Lender or holder of this Note incurs: (i) any costs, fees, or expenses, including costs of procuring evidence of title incurred in connection with sale; or (ii) any costs including, without limitation, attorney fees, incurred in enforcing payment, whether or not suit is filed, or protecting security, including, without limitation, all costs, attorney fees, and expenses incurred in connection with any bankruptcy, reorganization, arrangement, or other similar proceedings involving the undersigned or the Property, that in any way affects the exercise of rights and remedies under this Note or the Facade Agreements, then Borrower will rpnav sneh eyrenses upon receipt of written demand from Lender, and, if such expenses are not immediately repaid, such outstanding amount will increase the currently outstanding indebtedness under this Note, and be secured by the Deed of Trust. All costs and expenses incurred by Lender or holder of this Note to obtain relief from the stay of bankruptcy statutes are specifically included in the expenses referred to in this Paragraph. 16. Regardless of any of the provisions of this Note, nothing in this Paragraph will he deemed to limit or prejudice the rights of Lender to: (a) foreclose any Deed of Trust or enforce any of its other rights or remedies under the Facade Agreements; or (b) proceed against any entity or person, including Borrower with respect to the enforcement of any leases, bonds, policies of insurance, or other agreements; or (c) recover damages against Borrower for fraud, breach of warranty, failure to maintain insurance, waste, or material misrepresentation; or (d) recover any condemnation proceeds or insurance proceeds or other similar funds or payments attributable to the Property that, under the terms of the Facade Agreements should have been paid to Lender; or (e) recover any tenant security deposits, prepaid rents, or other similar sums paid to or held by Borrower or any other entity or person in connection with the Property; or (f) recover the rents and profits of the Property accruing from and after the occurrence of an Event of Default that have not been applied to pay any portion of the outstanding indebtedness of this Note, operating, and maintenance expenses of the Property, insurance, premiums, impositions, deposits into a reserve for replacement, or other sums required by the Loan Document; or (g) recover damages including, without limitation, recovery of all amounts authorized under any environmental indemnity agreement between Lender and Borrower, relating to breach of any covenant, representation, or warranty of Borrower in the Facade Agreements; or (h) recover from Borrower the entire outstanding indebtedness of this Note, if the exercise of any right or remedy under federal, state, or local forfeiture laws results in the loss of the lien of any Deed of Trust, or the priority of such, against the respective Property; or (i) recover funds to reimburse Lender for sums expended by Lender for the protection or preservation of the Property or Lender's interest in it (including, without limitation, payment of any real property taxes or assessments). Any liability of Borrower for any obligations arising in connection with the matters set forth in the above clauses, (a) through (i) inclusive, will be personal liability, and may be asserted against and recovered from its or their interest in the Property. as well as, against any of Borrower's other assets. Any liability of Borrower arising in connection with matters set forth in clause (g) will not he limited to the outstanding principal amount of this Note. and Borrower's obligations will survive foreclosure. deed in lieu of foreclosure, release. partial release, reconveyance. partial reconveyance, or any other transfer of the Property. 3 )allu Promissory Notc 17. The Deed of Trust will be reconveyed upon Lender's satisfaction that all obligations secured by the Deed of Trust have been performed in full. In witness whereof; the undersigned has caused this Promissory Note to be executed as of the date and year first above written. Borrower: MIKE N. DALLO and MONA DALLO Mike N. Dallo By: 4 )alle Proriissory Note ACKNOWLEDGMENT State of California County of 7t,,x Q i psa a ) On KQLY (,,i, aL M 1 .( before me, personally appeared i1 V C I(A- (in ert name and title of the officer) 0 ti Oaato coot 1L-lo 04,6 who 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. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature -(Seal) SERGIO O. GARCIA-GODOW Commission # 1482601 Notary Public - California t San Diego County My Comm. Expires Apr 11. 2008 PROMISSORY NOTE SECURED BY DEED OF TRUST San Diego, California March 24, 2008 [Date] 1. For value received, the undersigned, MIKE N. DALLO AND MONA DALLO ("Borrower" or "DALLO''), promise to pay to the order of the Community Development Commission of the City of National City ("Lender" or "CDC"), in accordance with the provisions of this Promissory Note ("Note"), on or before the Loan Maturity Date (defined ',Plow). the initial sums of Five Himdr' I Forty Two "Thousand Three Hundred Forty Nine and no/100 Dollars ($542,349.00) (the "Loan Amount"). 2. The "Effective Date" of this Note is September 18, 2006, the date of the initial advance of funds. 3. All capitalized terms used in this Note, unless otherwise defined, will have the respective meanings specified in the Facade Improvement Agreement, Amendment to the Facade Improvement Agreement, or the Deed of Trust, entered into between Borrower and Lender on September 18, 2006, April 1, 2008 and April 1, 2008, respectively, which meanings are incorporated herein by this reference as though fully set forth. 4. If any provision of this Note conflicts with or is inconsistent with the provisions of the Facade improvement Agreement or the Amendment to the Facade Improvement Agreement or the Deed of Trust (all collectively, the "Facade Agreements"), the Facade Agreements shall supersede. 5. The Loan Amount will bear interest at the rate of 5% per annum simple interest retroactive to the date of the Loan. 6. The I.oan Amount will be due on the Loan Maturity Date (as defined below). 7. "Loan Maturity Date" means the date on which the indebtedness evidenced by this Note is due pursuant to the terms of any of the Facade Agreements, which includes, but is not limited to, immediate repayment if the Property is sold, leased, conveyed, refinanced, vacated, transferred, assigned, alienated, or hypothecated within five (5) years from the Completion Date of the improvements as defined by and at the option of the CDC. 8. All payments will he applied first to accrued interest then to the principal. 9. "I'he Loan Amount is payable in lawful money of the United States of America, in same day funds at any place that Lender or the legal holders of this Note may, from time to time, in writing designate, and in the absence of that designation, then by cashiers check delivered to the attention of the Finance Department at CDC's office located at 1243 National City Boulevard, National City, California 91950. 1 Uallo Promissow Nc,tc 10. The principal amount of the indebtedness evidenced by this Note may, at the option of the Borrower, he prepaid in whole or in part without penalty or premium. 11. Time is of the essence. A failure by Borrower to fully repay the Loan on or before the Loan Maturity Date will constitute an Event of Default under this Note and entitle Lender to exercise any and all of its contractual, legal or equitable remedies including but not limited to those set forth in the Facade Agreements. 12. On the occurrence of an Event of Default under this Note, or on the occurrence of anv Event of Default under any of the Facade Agreements, or on the occurrence of any other P"p.,t that. under the terms of anv of the Facade Agreements, skives rise to Lender's right to accelerate the repayment of the outstanding Loan Amount, then, at the sole option of Lender, the full outstanding amount of this Note, or any part thereof specifically designated by the Lender in writing, shall immediately become due and payable by Borrower 10 Lender, without any further presentment, demand, protest, or notice of any kind. Borrower agrees that this Note will be deemed to have been made under, and will he governed by, the laws of the state of California in all respects, including matters of construction, validity, and performance, and that none of its terms or provisions may he waived, altered, modified, or amended except as Lender may consent to in a writing duly signed by Lender or its authorized agents. 13. This Note is to become secured, among other security, by security instruments covering one or more parcels of real property in National City, California and any improvements, fixtures or personalty located thereon, together with: (i) all rights, privileges, tenements, hereditaments, rights -of -way, easements, and appurtenances of the land, the improvements, fixtures or personalty located on the land, and all rights, title, and interest of Borrower in any streets, ways, alleys, strips, or gores of land adjoining such property; and (ii) all of Borrower's right, title, and interest in and to said property, including any rights or entitlements affecting the land, the improvements, fixtures, or personalty, including, without limitation, the Deed of Trust, (which is attached to the Amendment to the Facade Improvement Agreement as Exhibit "A", and incorporated herein by this reference as though fully set forth herein), to be executed by the undersigned, as trustor, in favor of Chicago Title, as trustee, for the benefit of Lender, as beneficiary, in accordance with the terms of the Facade Agreements. This Note is the Note referred to in the Facade Agreements, as well as the Deed of Trust, and is entitled to the benefits of the Facade Agreements, that contain among other things, provisions for acceleration of the maturity of this Note on the happening of certain stated events. 14. The Deed of "Trust provides as follows: "Should the Trustor agree to or actually sell, convey, transfer, or dispose of, or further encumber the Property, or any part of it, or any interest in it (each, a "Transfer"), without first obtaining the written consent of the Beneficiary, then all obligations secured by the Deed of Trust may he declared due and payable, at the option of the Beneficiary, as stated in Section V.1 of the Facade Improvement Agreement (as defined in the Note). Consent to one 2 f)allo Prornisso; y Note transaction of this type will not constitute a waiver of the right to acquire consent to future or successive transactions." 15. Borrower agrees that, if I,ender or holder of this Note incurs: (i) any costs, fees, or expenses, including costs of procuring evidence of title incurred in connection with sale; or (ii) any costs including, without limitation, attorney fees, incurred in enforcing payment, whether or not suit is filed, or protecting security, including, without limitation, all costs, attorney fees, and expenses incurred in connection with any bankruptcy, reorganization, arrangement, or other similar proceedings involving the undersigned or the Property, that in any way affects the exercise of rights and remedies under this Note or the Facade Agreements, then Borrower will renpv snrh expanses upon receipt of written demand from Lender, and, if such expenses are not .. immediately repaid, such outstanding amount will increase the currently outstanding indebtedness under this Note, and be secured by the Deed of Trust. A11 costs and expenses incurred by Lender or holder of this Note to obtain relief from the stay of bankruptcy statutes are specifically included in the expenses referred to in this Paragraph. 16. Regardless of any of the provisions of this Note, nothing in this Paragraph will be deemed to limit or prejudice the rights of Lender to: (a) foreclose any Deed of "Trust or enforce any of its other rights or remedies under the Facade Agreements; or (b) proceed against any entity or person, including Borrower with respect to the enforcement of any leases, bonds, policies of insurance, or other agreements; or (c) recover damages against Borrower for fraud, breach of warranty, failure to maintain insurance, waste, or material misrepresentation; or (d) recover any condemnation proceeds or insurance proceeds or other similar funds or payments attributable to the Property that, under the terms of the Facade Agreements should have been paid to Lender; or (e) recover any tenant security deposits, prepaid rents, or other similar sums paid to or held by Borrower or any other entity or person in connection with the Property; or (f) recover the rents and profits of the Property accruing from and after the occurrence of an Event of Default that have not been applied to pay any portion of the outstanding indebtedness of this Note, operating, and maintenance expenses of the Property, insurance, premiums, impositions, deposits into a reserve for replacement, or other sums required by the Loan Document; or (g) recover damages including, without limitation, recovery of all amounts authorized under any environmental indemnity agreement between Lender and Borrower, relating to breach of any covenant, representation, or warranty of Borrower in the Facade Agreements; or (h) recover from Borrower the entire outstanding indebtedness of this Note, if the exercise of any right or remedy under federal, state, or local forfeiture laws results in the loss of the lien of any Deed of Trust, or the priority of such, against the respective Property; or (i) recover funds to reimburse Lender for sums expended by Lender for the protection or preservation of the Property or Lender's interest in it (including, without limitation, payment of any real property taxes or assessments). Any liability of Borrower for any obligations arising in connection with the matters set forth in the above clauses, (a) through (i) inclusive, will be personal liability, and may be asserted against and recovered from its or their interest in the Property, as well as, against any of Borrower's other assets. Any liability of Borrower arising in connection with matters set forth in clause (g) will not he limited to the outstanding principal amount of this Note, and Borrower's obligations will survive foreclosure, deed in lieu of foreclosure, release, partial release, reconveyance, partial reconveyance, or any other transfer of the Property. ;)alto Promissory Note 17. The Deed of Trust will be reconveyed upon Lender's satisfaction that all obligations secured by the Deed of Trust have been performed in full. In witness whereof; the undersigned has caused this Promissory Note to be executed as of the date and year first above written. Borrower: MIKE N. DALLO and MONA DALLO By: Mike N. Dallo B 4 I);1IT0 Prouiiss,y Note ACKNOWLEDGMENT State of California County of ' ;:wt 0 CesodAD ) On ek,,,c ,41 a -AA 11 0/061 before me, {-6 0- c kk— cry ��c��, ert name and title of the officer) G' personaiiy appeared - OaAo Cutr' OOti.o who 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. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature -(Seal) SERGIO O. GARCIA-GODc1' Commission # 1482601 Nolan/ Public - California t San Diego County My Comm. Expires Apr 11.2008� .R1:(1)I2,1)IN(i RN(_t(:I SIFE) h' 4209 CHI CAC;(.) `1'TTT..; C:;;;fl_:'T�N AND \Vf1E N I:I:('ORI)I:1) \l;i1. TO 1 City Clerk of National City 1243 National City Boulevard National City, CA 91950 c< Escrow ;No. ( )rdcr No. DOC k 2008-0184098 APR 08, 2008 11:19 AM OFFICIAL RECORDS SAN DIEGO COUNTY RECORDER'S OFFICE GREGOR J SMITH COUNTY RECORDER FEES: 27.00 ' A'-('S D.4 1 PAGES: 2 111111 bill Hill pill IIIII Hill Hill Hlli Hill pill dill Hill Hill H111011111 SUBSTITUTION OF TRUSTEE AND FULL RECONVEYANCE f ", t:ndrr.,I. Community Development Commission of City of National City present Beneficial. as owner and holder of the \ote secured by f)ecd of Trust dated September 18, 2006 r=iacc b` Mike N. and Mona Dailo as Trust or. to Chicago Title Co. as original Trustee. for Community Development Commission of City of National City as Beneficiary, wnu'.I' i)ecd 01 Trust was r,:corded November 7, 2006 , a, Instrument Numb; r 2006 0792087 _ in Book -- , Fame Official Record, of San Diego (.alifornia. hereby appoints and substitutes Community Development • Commission of City of National City it> Trustin IL ., the } rn tc therein. .\:: such du}; i:t)pnime;! iu'd .,t,}',iitut; �t Trusicc. Community Development Commission of City of National City appoicainew I ruste.e under the al ove 1)t cd of Trust, and as Successor Trustee. and p:ir\uani i:' `i:. ' r ceo.:.'st of said own::r and holder and in accordance with the provisions of said f.)ccd of Trust. does !rcrt'in Ri.( O\\ WI'TI'OUT \ \RR:\`: E'Y, TO THE PERSON OR PERSONS 1 F(IAI.I..Y ENTITLED f) 'I'i 1FR1 'hO..-' 11. the title and interest now held by utid trustee. under said 1)ced of trust. Vihcreyer the lexl. of this document so r•c,uii.e. 1h, singular includes the plural. IN WITNESS WIII:RI:OF, thin owner and hold:r above named. and Community Development Commission of City of National City as successor f� has caused this instrument to he executed. each in its respective interest. Rcnc! ictar,: and Trustee Ron Morrison, Chairman Community Development Commission of City of National City 1243 National City Boulevard National City, CA 91950 DATE: : 7 - & % - 0i This Instrument filed for record by Chicago We Company as an accommodation only. ft has not been examined as to its execution orast0Ile IQOCt upon the title f. c 10 4210 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of CaliforniaCounty of orcl D i ecj c' On q - 7- 0 F. before me, Date personally appeared n } e�_ 416 a ere Insert Name and title of the Officer fr-/SC Name(s) of Signer(s) • hJIC' V. M. OPcI T Cort ml. Ion 116310/2 Notary Pubic - Callow*, San Diego Coll► My Comm. 6glos Orc 20. Place Notary Seal Above who 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. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS myfofhand andofficialseal. �1 Signature /� (y"S, J 0 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 form to another document. Description of Attached Document Title or Type of Document: 5 ii i7 Document Date: _ di- 7 Number of Pages: Signer(s) Other Than Named Above: Capacity(ies) Claimed by Signer(s) Signer's Name: tcfn %�e/Y'i 5c-• 0 Individual 1..: Corporate Officer — Title(s): - 1 Partner — ' Limited - General Attorney in Fact Trustee Guardian or Conservator ! Other: ` C fY_•i; (/► lCt I' t RIGHT THUMBPRINT OF SIGNER To of thumb here Signer's Name: ! I Individual Corporate Officer — Title(s): Partner — Limited [ General Attorney in Fact Trustee L. Guardian or Conservator _' Other: Signer Is Representing: Signer Is Representing: etin mull Iltr 77c f (-cox((- Sio'n cfAld- C RIGHTTHUMBPRINT OF SIGNER Top of thumb here ©2007 National Notary Association • 9350 De Soto Ave . PO. Box 2402 • Chatsworth. CA 91313-2402 • www.NahonalNotary org Item 45907 Reorder. Call Toll -Free 1-800.876-6827 04/08/2008 10:41 FAX 619 521 3616 CTC WIRE DEPT Z 001 CHICAGO TITLE COMPANY PLEASE DELIVER TO: JA.CQUELINE Number Dialedgi9 336 4286 FROM: Darlene Berry CHICAGO TITLE COMPANY 2365 NORTHSIDE DR_ #600, SAN DIEGO, (619)521-3400 Fax: CA 92108 Date SentApril 8, 2008 Order NO : RECON - RegardingsussTITUTIoN TRUSTEE r'ULL RECN Pages:3 The number of pages includes this co If you did not receive all of the pa have any questions about this transm please contact the sender. COMMENTS AND ADDITIONAL INFORMATION ENCLOSED A CERTIFIED COPY OF THE SUBSTITUTION OF TRUSTEE AND 1.'uLL RECONVEYANCE WITH RECORDING NUMBERS. THE COST TO RECORD THIS DOCUMENT WAS $23_00 MAKE THE CHECK OUT TO CHICAGO TITLE. IT WAS VERY NICE MEETING YOU, AND I AM GLAD I COULD BE OF HELP TO YOU. DARLENE BERRY The materials enclosed with this facsimile transmission are private and conf information contained in the material is privileged and is intended only for th you are not the intended recipient, be advised that any unauthorized disclosur reliance on the contents of this information is strictly prohibited. FTS6--02/07/97bk 04/08/2008 TUE 11:44 (JOB NO. 8728) Z 001 04/08/2008 10:42 FAX 619 521 3616 CTC WIRE DEPT 0002 Rf=l t. Fc;•I'r:ID B COMPSiV AND \VI'iCN R1:(,'C)R1)1'.D MAU. "1T) City Clerk of National City 1243 National City Boulevard National City, CA 91950 iscru\V tit;. Order No. CERTIFIED to be a correct Copy of the Contents of the Original Document Recorded 9- S- x58 , File No,aWt, "O oci Book ,Page of Official Records ofSaitDiego County, California CHTLE COMJ NY AAs gore r. r•al'^r.. N7f'(' ' -. SUBSTITUTION OF TRUSTEE AND FULL RECONVEYANCE The ,.trdcr,;iplc-il, Community Development .Commission of City of National City zres;:nt (itsnt.Rciar, as nwn-.r and holder of lire Nola seettred by Deed of Trust rated September 18, 2006 madeby Mike N. and )(Iona Dallo aS Trustor, to Chicago Title Co. a . original 7•rusia:. far Community Development Commission of City of National City as Benciiaarv, which Deed of Trutt was recorded November 7, 2006 , as Instrument Nutnlxr 2006 -0792087 in Book -- _ , Pa;c , — . C)Iricial Records of San Diego County. C:alifnrnia, hcrchv appoints and substitutes Community Development • Commission of City of National City as Tt1.::ec in lien of the This', cc therein. .As such duly appointed and ..uhs!itucd Trustc.c. Cotwnunity Development Commission of City of National City accepts said appointment is Trusttx under the above. Deed of Trust, and as sucCrssor Trustcc% and pursuant to cite rctiocst of s;iid owner and holder and its accordance with the provisions of said Decd cif TrtLsl, does hcrchv Rf coNvI'' Y Wl i l•1OUT WARRANTY. TO THE PERSC)N Os'. PERSONS LEf;ALLY ENTITLED THERFTC), ALL the cstaE.:, title and interest now neld by sttid trustee under said Deed of crust. Wherever thc 1cNE of this document so rct;wres, the• :insular includes thc plural. Ili WITNESS W"1ERr:c)F, the uwncr and holier above named. aztd Community Development Commission of City of National City L.s stIcansor _!LS 'C. has Caused this instrument to h: executed. each in its respective interest. Beneficsarv: and Trustee DATE: q 7 0 c Bon Morrison, (. airman Community Development Commission of City of National City 1243 National City Boulevard National City, CA 91950 This instrument f1i ed for record by Chicago dice Company as an accommodation only. It has not been examined as to its execution or as t011aidtta upon t a title 04/08/2008 TUE 11:44 [JOB NO. 8728] [j002 04/08/2008 10:42 FAX 619 521 3616 CTC WIRE DEPT J003 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT ur..4'esccsc z%zr• • State of California County of -;.n On " 7 cre before me, Date personally appeared nn } ere Invert Namc and nee of Iho Olflcer )(2f/'lSn,,! Name(a) o rogncr(9) V. M. CROW Commission ns 1631 Sit Nolaty Pudic - Collonnito t Sat Diego Cotdy [ Mr Carrel. MemDec2Q, . PlBce Notary Seal Above who 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. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature 0 1 SIgnalure 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 form t0 another document. Description of Attached Document Title or Type of Document: SI 1 v Document Date: di 7 —C. e Signer(s) Other Than Named Above: Capacity(ies) Claimed by Signer(s) Signer's Name: ❑ Individual D Corporate Officer —Title(s): O Partner — O Limited ❑ General D Attorney in Fact O Trustee O Guardian or Conservator Other: Ctf_F y1 !' ! I 10, i Signer Is Representing: l _L/»nl,..:,I,ft. beic.U,;ry. C`'Aif rcrrt !;f tom;-`cC:c.:; �,. - - -c. _ti. _ ' <: LX.�ti'?-c.`c.C.`G, VY.0 �C`.'c:Ll<t_•Gc:GcaC.<%V�.eL`tS�.S:ti'Seci �t.�•C7_-."��c�Z:R:Z 0 2(107Nanori Notdi),?.ssoornon•9350De$(Trove.,P.OBox 2409•Chetew,,1h.CA913'3.24Z2•www.Naerir,,INotarvoro !;orn 5907 Peo!Oer.Call Toll -Free l-8OO-e76-68='/ RIGHTTHUM PRINT OF SIGNER Top of thtmb nave Number of Pages: Signer's Name: O Individual ❑ Corporate Officer — Title(s): O Partner — 0 Limited 0 General 0 Attorney in Fact ❑ Trustee 0 Guardian or Conservator 0 Other: Signer Is Representing: RIGHTTHUh1BPRINT OF SIGNER 04/08/2008 TUE 11:44 r JOB NO. 8728) Q 003 04/08/2008 TUE 11:44 FAX 619 336 4286 CDC OF NATIONAL CITY Cj 001 ********************* *** RX REPORT *** ********************* RECEPTION OK JOB NO. 8728 DESTINATION ADDRESS 619 521 3616 PSWD/SUBADDRESS DESTINATION ID ST. TIME 04/08 11:44 USAGE T 00'36 PGS. 3 RESULT OK CHICAGO TITLE COMPANY Date: APRIL 8, 2008 JACQUELINE CITY CLERK OF NATIONAL CITY 1243 NATIONAL CITY BOULEVARD NATIONAL CITY, CA 91950 Your Ref: Order No. RECON ENCLSOED ORIGIANL TRUST DEED WITH CERTIFIED SUBSTITUTION OF TRUSTEE AND FULL RECONVEYANCE We appreciate this opportunity to serve you. Title Officer: RECEIVED APR i42 DevelopmentCon/mission 11 THAN2 .. 10j 28/95 M Relic'Ciili' and Trustee City Clerk of National City 1243 National City Boulevard National City, CA 91950 CERTIFIED to be a correct Copy of the Contents of the Original Document Recorded <i - 8- 330B File No. "d I t 4 Book Page of Official Reconis of San Diego County, California CH TLE COMPANY SUBSTITUTION OF TRUSTEE AND FULL RECONVEYANCE -•' Community Development Commission of City of National City ,t.ti ;r, ;,, and il;rdcr of t!:: secured he Deed of Trusl caal_ct September 18, 2006 Mike N. and Mona Dallo a., Trusl,i-. to Chicago Title Co. Trus:.for Community Development Commission of City of National City .,11-rust was r_curd;;d November 7, 2006 . a, It, 2006 -0792087 i t htlnt. .Page — ; )t,ici:+I Record :'.! San Diego ( bunt\. (..aii(t+rnia. hereby i1;1pnin'.s and Lit es Community Development Commission of City of National City Community Development Commission of City of National City c t1t �.�:.. '1;1i!1 i,t :...'lli ;'ncicC a ikr ;il: iii)ove I)� ,! s C esso !�::.. ,...'Y ,. .,.. . - :i` :Cd ( I-I'Uti: A71dt: Uri' ril>1��. itili: of said ownL'r iintl Find in accordance li'lln the provisions t)1 said Deed of Trust. does l:i-t )w1.,1 i.\'1TI10l"T. \1:1RRANT1. "iO Tlil': PERSON OR PERSONS 1,17(LAL .Y ENTITLE.) T111 ht•'TO1 it i ih: '.it:e and interc't nova (i d by -uId trust. e under ..aid Deed of trust. Wherever th;: I(.' .1f',h! IlUC.1??ICiti _. r:'ti: singular includes the V\'1 i1:Ri•(±F. the o\.n,:r and hoiu.: above nanl.xi. and Community Development Commission of City of National City as successor : Us ,. hits causscd ;Ills instrument to I) executed. each In is r::srieztivc interest. I ).ATE: i &' 7 - L'' j' Ron Morrison, Chairman Community Development Commission of City of National City 1243 National City Boulevard National City, CA 91950 This Instrument filed for record by Chicago Title Company as an accommodation only. It haS not been examined as to its execution ora&10ISalfect upon the title CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT �.� v<;�Y•.�•, cs• �� �%c�',�•.c•^ �' v; ,�c',�' n•,.�.crcrc�• -�c c��'��'�c�'�"�'•cY'ti�.c� �'•e�'�� � �-r �re�',cc,�,�'�c State of California County of c: On i — 1_ Date personally appeared before me, i ) } ere Insert Name and Title of the Officer Names of Signerts} V. M. CIRCUIT Comm on # 1631$12 Noiary Public • CaNtomlo I San Diego Canty [ Place Notary Seal Above who 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. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature ) l7- 7 tell" - 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 form to another document. Description of Attached Document Title or Type of Document: 5 a I-- Tr Ll i?ol 4 i Ili Document Date: `li 7 --el Number of Pages: Signer(s) Other Than Named Above: Capacity(ies) Claimed by Signer(s) Signer's Name: tICI) /' )c` Individual Corporate Officer — Title(s): Partner — - Limited 1 General Attorney in Fact IT Trustee Guardian or Conservator ;� Other: Signer Is Representing: Signer Is Representing: RIGHTTHUMBPRINT OF SIGNER Signer's Name: = Individual 7. Corporate Officer — Title(s): 7. Partner — Limited 7... General Attorney in Fact Trustee Guardian or Conservator Other: Tot:, c' t nJm„ 'lere RIGHTTHUMBPRINT OF SIGNER lop of thump here 'Vo.2:', Ass;':.i ;uo^ • 4•:�h : Sot,. Ave PC'. Dp, :'402 • Cha!sw" tr. C!. P1313-i4az • ,-ieo•oe' Gal To!,-Fre, -eO( B -b fibs' . PLEASE .COMPLETE THIS INFORMATION RECORDING REQUESTED BY: CITY CLERK OF NATIONAL CITY 1243 National City Blvd National City, CA 91950 AND WHEN RECORDED MAIL TO: `` CITY CLERK OF NATIONAL CITY 1243 National City Blvd C>i' National City, CA 91950 ,_;:"LJ 5'705 NOV 07. 2006 11:08 AM ' [=:,. f f 7!{ i;.!1';(, V:Ei ili i'4fi 2006-079208 THIS SPACE FOR RECORDER'S USE ONLY Facade Improvement Agreement and Deed of Trust: 303 Highland Avenue — Mike N. Dello and Mona Dallo (Please fill in document title(s) on this line) THIS PAGE ADDED TO PROVIDE ADEQUATE SPACE FOR RECORDING INFORMATION (Additional recording fee applies) Engineering 8/1/2006 Resolution No. 2006-153 File Number NO CHARGE ON THIS DOCUMENT FOR TIIE BENEFIT OF A STATE AGENCY FORMED BY THE CITY OF NATIONAL CITY Recording Requested By: Community Development Commission of The City of National City Economic Development Division 1243 National City Blvd National City, CA 91950 And When Recorded Mail To: City Clerk City Of National City 1243 National City Blvd. National City, CA 91950 DEED OF TRUST 5706 CERTIFIED TO BE A TRUE AND CORRECT COPY OF THE ORI INAL UMENT .r,,' le Mir ad R. Dalla. Cit Clerk ('fig of National ('ity THIS DEED OF TRUST is made this day of SepmT2006, by MIKE N. DALLO AND MONA DALLO, whose address is 5075 Federal Boulevard, San Diego, CA 92102, ("Trustor"), to Chicago Title Company, a California corporation ("Trustee"); for the benefit of the Community Development Commission of the City of National City ("Beneficiary"), whose address is 1243 National City Boulevard, National City, California 91950; TRUSTOR HEREBY irrevocably grants, transfers, and assigns to Trustee, in trust, with power of sale, all that property in the City of National City, County of San Diego, State of California, described as: (See Legal Description - Exhibit "A") FOR THE PURPOSE OF SECURING: (1) Payment of the indebtedness evidenced by a promissory note of even date herewith executed by Trustor, in the principal sum of THREE HUNDRED FORTY SEVEN THOUSAND THREE 1IUNDRED TWENTY AND NO/100 DOLLARS ($347,320.00), and any renewal, extension, or 1 5707 modification of the promissory note (the "Note"); (2) Any additional sums and interest that may hereafter be loaned to the then record owner of the Property by Beneficiary, when evidenced by another note or notes reciting that it or they are so secured; and (3) The performance of each agreement contained in this Deed of Trust. A. TO PROTECT THE SECURITY OF THIS DEED OF'I'RUST, TRUSTOR AGREES: Maintenance and Repair (1) To keep the Property in good condition and repair; not to remove or demolish any buildings on the Property; to complete or restore promptly and in good and workmanlike manner any building that may be constructed, damaged, or destroyed on the Property; to pay when due all claims for labor performed and materials furnished for the Property; to comply with all laws affecting the Property or requiring any alterations or improvements to be made on the Property; not to commit or permit waste of the Property; not to commit, suffer, or permit any act upon the Property in violation of law; and to cultivate, maintain the landscaping, and do all other acts that from the character or use of the Property may be reasonably necessary. Fire insurance (2) To provide, maintain, and deliver to Beneficiary fire insurance satisfactory to and with loss payable to Beneficiary as its interest may appear. The amount collected under any fire or other insurance policy may be applied by Beneficiary upon any indebtedness secured by this Deed of Trust and in any order determined by Beneficiary, or at the option of Beneficiary the entire amount so collected or any part of that amount may he released to Trustor, except that if the proceeds of the award for any taking or injury to the Property or the amount of such proceeds plus funds provided by Trustor is sufficient to allow for the repair and restoration of the Property and such repair and/or restoration is physically and legally possible, then the Tnistor shall use the proceeds of the award to timely effectuate such repair and/or restoration. Upon receipt of such proceeds, Beneficiary may hold the proceeds as further security, or apply or release them in the same manner and with the same effect as provided in this Deed of Trust for the disposition of proceeds of fire or other insurance. This application or release shall not cure or waive any default or notice of default under this Deed of Trust or invalidate any act done pursuant to such a notice. Defense of Security (3) To appear in and defend any action or proceeding purporting to affect the security of this Deed of Trust or the rights or powers of Beneficiary, or Tnistee; and to pay all costs and expenses, including cost of evidence of title and attorneys' fees in a reasonable sum, in any such action or proceeding in which Beneficiary or Trustee may appear, and in any suit brought by Beneficiary to foreclose this Deed of Trust. Payment of Liens and Taxes 5708 (4) To pay, at least ten (10) days before delinquency, all taxes and assessments affecting the Property, including assessments on appurtenant water stock, all encumbrances, charges, and liens, with interest, on the Property or any part of the Property, which appear to be prior or superior to this Deed of Trust; and all costs, fees, and expenses of this Trust. If Trustor fails to make any payment or to do any act as provided in this Deed of Trust, then Beneficiary or Trustee may (but is not obligated to) make the payment or do the act in the required manner and to the extent deemed necessary by Beneficiary or Trustee to protect the security of this Deed of Trust. The performance by Beneficiary or Trustee of such an act shall not require notice to or demand upon Trustor and shall not release Trustor from any obligation under this Deed of Trust. Beneficiary or Trustee shall also have the following related rights and powers: to enter upon the Property for the foregoing purposes; to appear in and defend any action or proceeding purporting to affect the security of this Deed of Trust or the rights or powers of Beneficiary or Trustee; to pay, purchase, contest, or compromise any encumbrance, charge, or lien that in the judgment of either appears to be prior or superior to this Decd of Trust; to employ counsel; and to pay necessary expenses and costs, including attorneys' fees. Reimbursement of Costs (5) To pay immediately and without demand all sums expended by Beneficiary or Trustee pursuant to this Deed of Trust, with interest from date of expenditure at the amount allowed by law in effect at the date of this Deed of Trust, and to pay any reasonable amount demanded by Beneficiary (up to the maximum allowed by law at the time of the demand) for any beneficiary statement requested by Trustor or any other beneficiary of a Deed of Trust encumbering the Property regarding the obligation secured by this Deed of Trust. Obligations of 'Trustor (6) That Trustor will not permit or suffer the use of any of the Property for any purpose other than the use for which the same was intended at the time this Deed of Trust was executed. (7) That the Facade Improvement Agreement referred in the Note is incorporated herein by reference and made a part of this Deed of Trust. (8) To perform, in a timely manner, each agreement and covenant by and between Trustor on any and all notes, loans and deeds of trust that are senior and/or junior to this Deed of Trust. A default in any of these obligations, beyond any applicable cure period, shall constitute a default under this Deed of Trust. 3 B. TRUSTOR AGREES THAT: Condemnation Award 5709 (1) Any award of damages in connection with any taking or condemnation, or for injury to the Property by reason of public use, or for damages for private trespass or injury to the Property, is hereby assigned and shall be paid to Beneficiary, as its interest may appear as further security for all obligations secured by this Deed of Trust, except that if the proceeds of the award for any taking or injury to the Property or the amount of such proceeds plus funds provided by Trustor is sufficient to allow for the repair and restoration of the Property and such repair and/or restoration is physically and legally possible, then the Trustor shall use the proceeds of the award to timely effectuate such repair and/or restoration. Upon receipt of such proceeds, Beneficiary may hold the proceeds as further security, or apply or release them in the same manner and with the same effect as provided in this Deed of Trust for the disposition of proceeds of fire or other insurance. Waiver of Late Payments (2) By accepting payment of any sum secured by this Deed of Trust after its due date, Beneficiary does not waive its right either to require prompt payment when due of all other sums so secured or to declare default for failure to pay any indebtedness secured by this Deed of Tntst. Trustee's Powers (3) Upon written request of Beneficiary and presentation of this Deed of Trust, Trustee may (a) reconvey all or any part of the Property; (b) consent to the making and recording, or either, of any map or plat of all or any part of the Property; (c) join in granting any easement on the Property; or (d) join in or consent to any extension agreement or any agreement subordinating the lien, encumbrance, or charge of this Deed of "Trust. Trustcc need not provide Trustor with notice before taking any of the foregoing actions, and shall not he liable for the proper performance of the act. The exercise by Trustee of any of the foregoing powers shall not affect the personal liability of any person for payment of the indebtedness secured by this Deed of Tn►st, or the lien of this Deed of Trust on the remaining property as security for the repayment of the full amount secured by this Decd of Trust. Full Reconveyance (4) Upon written request of Beneficiary stating that all obligations secured by this Deed of Trust have been performed in full, surrender of this Deed of Trust, any notes secured by this Deed of Trust to the Trustee for cancellation and retention, and payment of Trustee's fees and charges, Trustee shall reconvey, without warranty, the Property then subject to this Deed of Trust. Absent manifest error, the recitals in the reconveyance shall be conclusive proof of the truthfulness of the recitals. The grantee in the reconveyance may be described as "the person or persons legally entitled thereto." Five years after issuance of the full reconveyance, Trustee may destroy the Note and this Deed of Trust, unless directed in the request to retain them. 4 5p Assignment of Rents (5) As additional security, Trustor hereby gives to and confers upon Beneficiary the right, power, and authority during the continuance of these Trusts, to collect the rents, issues, and profits of the Property, but reserves the right, prior to any default by Trustor in payment of any indebtedness secured by this Deed of 'Trust or in the performance of any agreement under this Deed of Trust, to collect and retain these rents, issues, and profits as they become due and payable. Upon any such default for which cure has not been commenced within thirty (30) days and thereafter completed with diligence, Beneficiary may, without notice and without regard to the adequacy of the security for the indebtedness secured by this Deed of Trust, either personally or by agent or court -appointed receiver, do the following: enter upon and take possession of the Property or any part of the Property; sue for or otherwise collect all rents, issues, and profits, including those past due and unpaid; and apply these rents, issues, and profits, less costs and expenses of operation and collection (including reasonable attorneys' fees), upon any indebtedness secured by this Deed of Trust, in any order determined by Beneficiary. The exercise of the foregoing rights by Beneficiary shall not cure or waive any default or notice of default under this Deed of Trust or invalidate any act done pursuant to such a notice. Default in Foreclosure (6) Upon default by Trustor in the payment of any indebtedness secured by this Deed of Trust or in the performance of any obligation under this Deed of Trust for which cure has not been commenced within thirty (30) days and thereafter completed with diligence, Beneficiary may declare all sums secured by this Deed of Trust immediately due and payable by delivering to Trustee a written declaration of default and demand for sale and a written notice of default and election to sell the Property. Trustee shall cause the notice of default and election to sell to be recorded. Beneficiary also shall deposit with Trustee this Deed of Trust, a copy of the Agreement, and all other documents evidencing obligations secured by this Deed of Trust. After the required time period has lapsed following the recordation of the notice of default, and after notice of sale has been given as required by law, Trustee, without demand on Trustor, shall sell thc Property at the time and place specified in thc notice of sale, either as a whole or in separate parcels, and in any order determined by Trustee, at public auction to the highest bidder for cash in lawful money of the United States, payable at the time of sale. Trustee may postpone sale of all or any portion of the Property by public announcement at the time and place of sale, and from time to time thereafter may postpone the sale by public announcement at the time fixed by the preceding postponement. 'Trustee shall deliver to the purchaser at the auction its deed conveying the Property sold, but without any covenant or warranty, express or implied. Absent manifest error, the recital in the deed of any matter or fact shall be conclusive proof of the truthfulness of the recital. Any person, including Trustor, Trustee, or Beneficiary, may purchase at the sale. After deducting all costs, fees, and expenses of Trustee and Beneficiary under this paragraph, including costs of procuring evidence of title incurred in connection with sale, Trustee shall apply the proceeds of sale to payment of: all sums expended under the terms of this Deed of Trust, not then 5 5711 repaid, with accrued interest at the amount allowed by law in effect at the date of this Deed of Trust; all other sums then secured by this Deed of Trust; and the remainder, if any, to the person or persons legally entitled to the remaining proceeds. Further Encumbrances (7) Should the trustor agree to or actually sell, convey, transfer, or dispose of, or further encumber the Property, or any part of it, or any interest in it (each, a "Transfer"), without first obtaining the written consent of the Beneficiary, then all obligations secured by the Deed of Trust may be declared due and payable, at the option of the Beneficiary, unless such Transfer is permitted under Section 603 of the OPA (as defined in the Note). Consent to one transaction of this type will not constitute a waiver of the right to acquire consent to future or successive transactions. General Provisions (8) This Deed applies to, inures to the benefit of, and binds all parties to this Decd of Trust and their heirs, legatees, devisees, administrators, executors, successors, and assigns. The term "Beneficiary" shall mean the Community Development Commission of the City of National City, and the heirs, legatees, devisees, administrators, executors, and assigns of any such person. In this Deed, whenever the context so requires, the masculine gender includes the feminine and/or neuter, and the singular number includes the plural. Acceptance by Trustee (9) Trustee accepts this Trust when this Deed, duly executed and acknowledged, is made a public record as provided by law. Trustee is not obligated to notify any party to this Deed of Trust of pending sale under any other deed of trust or of any action or proceeding in which Trustor, Beneficiary, or Trustee shall be a party unless brought by Trustee. Substitution of Trustees (10) Beneficiary, or any successor in ownership of any indebtedness secured by this Deed of Trust, may from time to time, by written instrument, substitute a successor or successors to any Trustee named in or acting under this Deed of Trust. The substitution instrument shall contain the name of the original Tnistor,'1'rustee, and Beneficiary under this Deed of Trust, the book and page where this Deed is recorded, and the name and address of the new Trustee. When executed by Beneficiary and duly acknowledged and recorded in the office of the recorder of the county or counties where the Property is situated, the substitution instrument shall be conclusive proof of proper substitution of the successor Trustee or Trustees. Any successor Trustee or Trustees shall, without conveyance from the Trustee predecessor, succeed to all its title, estate, rights, powers, and duties. Cumulative Powers and Remedies (1 1) The powers and remedies conferred in this Deed of Trust are concurrent and cumulative to all other rights and remedies provided in this Deed of Trust or given by law. These powers and 6 5712 remedies may he exercised singly. successively, or together, and as often as deemed necessary. Conclusiveness of Recitals (12) The recitals contained in any reconveyance, trustee's deed, or any other instrument executed by the Trustee from time to time under the authority of this Deed of Trust or in the exercise of its powers or the performance of its duties under this Deed of Trust, shall be conclusive evidence of their truth, whether stated as specific and particular facts, or in general statements or conclusions absent manifest error. Further, the recitals shall be binding and conclusive upon the Trustor, its heirs, executors, administrators, successors, and assigns, and all other persons. Attorneys' Fees (13) If any action is brought for the foreclosure of this Deed of Trust or for the enforcement of any provision of this Deed of Trust (whether or not suit is filed), Trustor agrees to pay all costs and expenses of Beneficiary and Trustee, including reasonable attorneys' fees; and these sums shall be secured by this Deed of Trust. Co -trustees (14) If two or more persons are designated as Trustees in this Deed of Trust, any, or all, power granted in this Deed of Trust to Trustee may he exercised by any of those persons, if the other person or persons are unable, for any reason, to act. Any recital of this inability in any instrument executed by any of those persons shall be conclusive against Trustor and Trustor's heirs and assigns. Request for Notices of Default and Sale (15) In accordance with Section 2924b of the California Civil Code, request is hereby made that a copy of any Notice of Default and a copy of any Notice of Sale under that Deed of Trust executed by the Trustor concerning this Property be mailed to: Community Development Commission of the City of National City Economic Development Division 1243 National City Blvd. National City, CA 91950 NOTICE: A copy of any notice of default and of any notice of sale will be sent only to the address contained in this recorded request. If your address changes, a new request must be recorded. The undersigned Trustor requests that a copy of any notice of default and of any notice of sale under this Deed of Trust be mailed to Trustor at the address of Trustor set forth above. 7 5713 Reasonable Inspection (17) Trustor shall permit Beneficiary and its agents or representatives, to inspect the Property at any and all reasonable times, with at least 24 hours advance notice. Inspections shall be conducted so as not to interfere with the tenants' use and enjoyment of the Property. Hazardous Materials (18) For purposes of this Deed of Trust, "Hazardous Materials" mean and include any hazardous, toxic or dangerous waste, substance or material including, without limitation, flammable explosives, radioactive materials, asbestos, hazardous wastes, toxic substances and any materials or substances defined as hazardous materials, hazardous substances or toxic substances in (or for purposes of) the Comprehensive Environmental Response, Compensation and Liability Act of 1980 ("CERCLA"), as amended (42 U.S.C. §9601, et seq.), the Hazardous Materials Transportation Act (49 U.S.C. §1801, et seq.), the Resource Conservation and Recovery Act (42 U.S.C. §6901, et seq.), and those substances defined as hazardous wastes in §25117 of the California Health and Safety Code or as hazardous substances in §25316 of the California Health and Safety Code or in any regulations promulgated under either such law, any so-called "Superfund" or "Superlien" law, or any other federal, state or local statute, law, ordinance, code, rule, regulation, order or decree regulating, relating to, or imposing liability or standards of conduct concerning, any hazardous, toxic or dangerous waste, substance or material, as now or at any time hereafter in effect. (19) In addition to the general and specific representations, covenants and warranties set forth in the Deed of Trust or otherwise, Trustor represents, covenants and warrants, with respect to Hazardous Materials, as follows: (a) Neither Trustor nor, to the best knowledge of Trustor, any other person, has ever caused or permitted any Hazardous Materials to be manufactured, placed, held, located or disposed of on, under or at the Property or any part thereof, and neither the Property nor any part thereof, or any property adjacent thereto, has ever been used (whether by the Trustor or, to the best knowledge of the Trustor, by any other person) as a manufacturing site, dump site or storage site (whether permanent or temporary) for any Hazardous Materials; (b) Trustor hereby agrees to indemnify Beneficiary, its officers, employees, contractors and agents, and hold Beneficiary, its officers, employees, contractors and agents harmless from and against any and all losses, liabilities, damages, injuries, costs, expenses and claims of any and every kind whatsoever paid, incurred or suffered by, or asserted against Beneficiary, its officers, employees, contractors or agents for, with respect to, or as a direct or indirect result of, the presence or use, generation, storage, release, threatened release or disposal of Hazardous Materials on or under the Property or the escape, seepage, leakage, spillage, discharge, emission or release of any Hazardous Materials from the Property (including, without limitation, any losses, liabilities, damages, injuries, costs, expenses or claims asserted or arising under CERCLA, any so-called "Superfund" or "Superlien" law, or any other federal, state or local statute, law, ordinance, code, rule, regulation, order or decree regulating, relating to or imposing liability or standards of conduct 8 5 714 concerning any Hazardous Materials) regardless of whether or not caused by or within the control of Trustor. Notwithstanding the foregoing, Trustor's obligations under this section shall not apply to any losses, liabilities, damages, injuries, costs, expenses, or claims which arise out of or relate to Hazardous Materials which are generated, released or stored on the Property after the date that Beneficiary takes possession thereof. (c) Trustor has not received any notice of (i) the happening of any event involving the use, spillage, discharge, or cleanup of any Hazardous Materials ("Hazardous Discharge") affecting Trustor or the Property or (ii) any complaint, order, citation or notice with regard to air emissions, water discharges, noise emissions or any other environmental, health or safety matter affecting Trustor or the Property ("Environmental Complaint") from any person or entity, including, without limitation, the United States Environmental Protection Agency ("EPA"). If Trustor receives any such notice after the date hereof, then Trustor will give, within seven (7) business days thereafter, oral and written notice of same to Beneficiary. (d) Without limitation of Beneficiary's rights under this Deed of Trust, Beneficiary shall have the right, but not the obligation, to enter onto the Property or to take such other actions as it deems necessary or advisable to clean up, remove, resolve or minimize the impact of, or otherwise deal with, any such Hazardous Materials or Environmental Complaint upon its receipt of any notice from any person or entity, including without limitation, the EPA, asserting the existence of any Hazardous Materials or an Environmental Complaint on or pertaining to the Property which, if true, could result in an order, suit or other action against Trustor affecting any part of the Property by any governmental agency or otherwise which, in the sole opinion of Beneficiary, could jeopardize its security under this Deed of Trust. All reasonable costs and expenses incurred by Beneficiary in the exercise of any such rights shall be secured by this Deed of Trust and shall be payable by Trustor upon demand together with interest thereon at a rate equal to the highest rate payable under the note secured hereby. Continuing Obligations (e) The foregoing representation, covenants, indemnities and warranties shall be continuing and shall be true and correct for the period from the date hereof to the release of this Deed of Trust (whether by payment of the indebtedness secured hereby or foreclosure or action in lieu thereof), and these representations, covenants, indemnities and warranties shall survive such release. Successor Owners (20) Each successor owner of an interest in the Property other than through foreclosure or deed in lieu of foreclosure, shall take its interest subject to this Deed of Trust. Governing Law (21) This Deed of Trust shall be governed by and construed in accordance with the laws of the State of California. TRUSTOR: MIKE N. DALLO AND MONA DALLO Print Name: t1/l (DA-LLO Its: '� (_U ►� Q By: Print Name:/1/107 5715 10 Exhibit "A" Legal Description PARCEI. I: 5716 TIIE SOUTHERLY HALE OF TIIE EASTERLY HALF OP THE WESTERLY HALF, THE SOUTHERLY IIALF OF TIIE WESTERLY IIALF OF THE NORTHERLY IIALF AND THE WESTERLY QUARTER OF THE SOUTHERLY HALF OF 20 ACRE LOT 2 OF QUARTER SECTION 131 OF RANCHO DE LA NACION, IN THE CITY OF NATIONAL CITY, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP TI IEREOF NO. 166 BY MORRIIL, FILED IN THE OFFICE OF TIIE COUNTY RECORDER OF SAID SAN DIEGO COUNTY. EXCEPTING FROM SAID WESTERLY QUARTER OF THE SOUTHERLY IIALF, THE SOUTHERLY 240 FEET THEREOF AND THE WESTERLY 40 FEET TIIEREOF. ALSO EXCEPTING THAT PORTION OF THE PROPERTY DESCRIBED ABOVE WHICII LIES EASTERLY OF THE FOLLOWING DESCRIBED LINE: BEGINNING AT A POINT IN THE NORTHERLY LINE OF SAID SOUTHERLY HALF OF THE WESTERLY I IALF OF THE NORTHERLY HALF OF 20 ACRE LOT 2, WHICH IS DISTANT WESTERLY 172.50 FEET FROM TILE NORTIEASTERLY CORNER OF SAID SOUTHERLY HALF OF TI IE WESTERLY IIALF OF TIFF: NORTHERLY }IALF;'I'IIENCE SOUTHERLY IN A STRAIGHT LINE TO A POINT IN THE SOIJT}IERI.Y LINE OF SAID 20 ACRE LOT 2, WHICII IS DISTANT THEREON 171.46 FEET WESTERLY FROM THE SOUTHEASTERLY CORNER OF THE WESTERLY HALF OF SAID LOT. PARCEI. 2: AN EASEMENT AND RIGIFT OF WAY FOR INGRESS AND EGRESS FOR DRAINAGE PURPOSES, OVER A STRIP OF LAND 6 FEET WIDE IN 20 ACRE LOT 2 OF QUARTER SECTION 131 OF RANCHO DE LA NACION, IN THE CITY OF NATIONAL CITY, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 166 BY MORRIIL, FILED IN THE OFFICE OF THE COUNT Y RECORDER OF SAN DIEGO COUNTY, THE CENTER LINE OF SAID 6 FOOT STRIP BEING DESCRIBED AS FOLLOWS: BEGINNING AT A POINT IN TIIE NORTLY LINE OF THE SOUTHERLY IIALF OF THE WESTERLY HALF OF TIIE NORTHERLY HALF OF SAID 20 ACRE LOT 2, WHICH IS DISTANT THEREON 172.50 FEET FROM THE NORTHEASTERLY CORNER OF SAID SOUTHERLY HALF OF THE WESTERLY I IALF OF TI lE NORTHERLY HALF, BEING THE NORTHERLY TERMINUS OF TIIE STRAIGHT LINE WHICII CONNECTS SAID POINT OF BEGINNING WITH A POINT IN THE SOUTIIERLY LINE OF SAID 20 ACRE I.OT 2 WHICH IS DISTANT 171 • 46 FEET WESTERLY FROM TI-IE SOUTHEASTERLY CORNER OF TIIE WESTERLY HALF OF SAID LOT; THENCE SOUTHERLY ALONG SAID STRAIGHT CONNECTING LINE, 90.00 FEET TO TIIE TRUE POINT OF BEGINNING; THENCE NORTHEASTERLY IN A STRAIGHT LINE TO A POINT IN SAID NORTHERLY LINE OF THE SOUTHERLY I IALF OF THE WESTERLY I IALF OF THE NORTHERLY I IALF, WHICH IS DISTANT TIIEREON WESTERLY 103 • 46 FEET FROM SAID NORTHEASTERLY CORNER OF "TIIE SOUTHERLY HALF OF TIIE WESTERLY HALF OF THE NORTHERLY IIALF OF SAID LOT, SAID 6 FOOT STRIP BEGINNING IN TIIAT STRAIGHT CONNECTING LINE DESCRIBED ABOVE AND ENDING IN SAID NORTHERLY LINE OF 'HIE SOUTIIERLY IIALF OF TIIE WESTERLY IIALF OF THE NORTHERLY HALF OF SAID LOT 2. 11 ACKNOWLEDGMENT State of California ) County of San Diego ) 5717 aO0 c° !^ On S {' - I b ,-gf03, before me, , it (1 CI ►'ii'k A -Lora personally appeared, \ \V Qc& v l\ N rr 1140 NA D A ( ( O personally known tome (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 "DEED OF TRUST" 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 on behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Signature (Seal) SANDRA A. LARA Commission # 1478914 Notary Public - California San Diego County My Comm. Expires Apr 23.2008 12 CERTIFIED TO BE A TRUE AND CORRECT COPY OF THE ORIGINA Michael R. Dalla, C. Cleft City of National City DO NOT DESTROY THIS NOTE: WHEN PAID, THIS NOTE AND THE DEED OF TRUST SECURING IT MUST BE SURRENDERED TO TRUSTEE FOR CANCELLATION BEFORE RECONVEYANCE WILL BE MADE. NOTE SECURED BY DEED OF TRUST ("Note") National City, California 1. Principal and Interest. S-p - I F , 2006 a. FOR VALUE RECEIVED, and in consideration of the Facade Improvement Agreement ("FIA") of even date herewith, by and between the Community Development Commission of the City of National City, ("CDC") and Mike N. Dallo and Mona Dallo ("Maker"), Maker promises to pay to CDC, or order, at 1243 National City Boulevard, National City, California 91950, or such other place as the holder may from time to time designate by written notice to Maker, the principal sum of THREE HUNDRED FORTY SEVEN THOUSAND THREE HUNDRED TWENTY AND NO/100 DOLLARS ($347,320.00), or so much as is paid to the contractor for work completed, together with accrued interest from the date of loan and unpaid principal at the simple interest rate of Five percent (5%) per annum. This Note is issued pursuant to the FIA and the deed of trust (the "Deed of Trust"), being executed concurrently herewith, to be recorded in the office of the County Recorder of San Diego County. The Deed of Trust securing this Note and the FIA are sometimes collectively referred to herein as the "Loan Documents." All capitalized terms which arc not defined herein shall have the meaning ascribed to them in the FIA. 2. Term of Loan, Due Date and Right of Prepayment. This Note may be prepaid in whole or in part at any time and, from time to time, without notice or penalty. Should the undersigned sell, convey, transfer, further encumber, or dispose of the Property described in the Deed of Trust, or any part of it, or any interest in it, without first obtaining the written consent of CDC, or the then holder of this Note, then all obligations secured by this Note may be declared due and payable, at the option of CDC, or the then holder of this Note. CDC reserves the right to approve all sales, transfers, conveyances, additional encumbrances, or dispositions of the real property. Consent to one transaction of this type will not constitute a waiver of the right to require consent to future or successive transactions. If such a sale, transfer, further encumbrance, disposition, conveyance or transfer is approved by CDC, then upon the sale, transfer, Page 1 of 5 further ericumbrance, conveyance, transfer all accrued but unpaid interest on this Note shall be paid to CDC, at the option of the CDC, or holder of this Note. The CI)C and the undersigned agree that if the improvements detailed in the awarded "Contractor's Agreement and Scope of Work" on the REAL PROPERTY commonly known as Foodland Market located at 303 Highland Avenue in the City of National City, are maintained by the Maker for at least five (5) years from the Completion Date of the improvements as determined by the CDC; the Loan will be forgiven including principal and interest and the undersigned shall not be required to repay the loan to the CDC as further detailed in the Facade Improvement Agreement referenced and incorporated hereto. Interest shall be 5% per annum simple interest retroactive to the date of the Loan. Any payments received shall first be applied first to accrued interest then to the principal. No payments are due during the term of this loan, unless the loan is accelerated due to conditions mentioned hereinabove and in the Facade Improvement Agreement. 3. Security for Note. This Note is secured by the Deed of Trust of even date herewith executed by Maker, which creates a lien on that certain real property described therein and by the Loan Documents. 4. Acceleration Upon Default. In the event of any default under the terms of this Note after the expiration of all applicable cure periods, as set forth in the FIA and the Deed of Trust, at the option of the holder of this Note, and after written notice to Maker providing Maker with thirty (30) days in which to cure any default, all principal and interest due under this Note and the Note shall immediately become due and payable, without further notice. Failure to exercise such option shall not constitute a waiver of the right to exercise it in the event of any subsequent default. 5. Costs Paid by Maker. Maker agrees to pay the following costs, expenses, and attorneys' fees paid or incurred by the holder of this Note, or adjudged by a court: (a) reasonable costs of collection, costs, and expenses, and attorneys' fees paid or incurred in connection with the collection or enforcement of this Note, whether or not suit is filed; and (b) costs of suit and such sum as the court may adjudge as attorneys' fees in any action to enforce payment of this Note or any part of it. 6. Payment and Interest Calculation. Principal and interest shall be payable in lawful money of the United States of America. Interest shall be computed based on a 360-day year and 30-day month and the actual number of days elapsed. Payments shall be applied to interest first and then to any unpaid principal balance. 7. Incorporation of the FIA. Page 2of5 The provisions of the FIA are expressly incorporated in this Note by this reference. 8. Waiver. Maker hereby waives diligence, presentment, protest and demand, notice of protest, dishonor and nonpayment of this Note, and expressly agrees that, without in any way affecting the liability of Maker hereunder, CDC may extend any maturity date or the time for payment of any installment due hereunder, accept additional security, release any party liable hereunder and release any security now or hereafter securing this Note. Maker further waives, to the full extent permitted by law, the right to plead any and all statutes of limitations as a defense to any demand on this Note, or on any deed of trust, security agreement, guaranty or other agreement now or hereafter securing this Note. 9. Non -Recourse. (a) This Note is non -recourse to Maker. (b) Maker shall indemnify, defend, protect and hold CDC harmless from and against any and all loss, damage, liability, action, cause of action, cost or expense (including, without limitation, reasonable attorneys' fees and expenses) incurred by CDC as a result of any (i) fraud or material misrepresentation under or in connection with the Loan or any Loan Document; (ii) intentional bad faith waste of the real property more particularly described in the Deed of Trust; (iii) losses resulting from Maker's failure to maintain insurance as required under the Deed of Trust; and (iv) misapplication of any rents, security deposits, insurance proceeds, condemnation awards or any other proceeds derived from the collateral security in a manner prohibited by the Loan Documents. CDC shall promptly provide Maker with written notice of any event for which Maker has an indemnification obligation as provided in this Paragraph 9(b). 10. Late Charge. In addition to the foregoing, if any installment due hereunder, including but not limited to the final "balloon payment" due on maturity, is not paid within fifteen (15) days from the date due, Maker promises to pay a "late charge" of five percent (5%) of the installment so overdue to defray the expense incident to handling any such delinquent payment or payments. 11. Severability. If any provision of this Note is determined to be void by court of competent jurisdiction, such determination shall not affect any other provision of this Second Advance Note, and such other provisions shall remain in full force and effect. 12. Non -Waiver. No delay in demanding or failure to demand performance hereunder shall constitute a waiver by holding of its right to subsequently demand such performance or to exercise any remedies for any default hereunder. Further, in order to he effective, any waiver of any of CDC's rights and remedies Page 3 of 5 hereunder shall be expressed in a writing signed by CDC. Further waiver by CDC of any right hereunder shall not constitute a waiver of any other right, including but not limited to the right to exercise any and all remedies for a different or subsequent event of default hereunder. 13. Replacement Note. The undersigned agrees that, in the event that this Note shall become lost or stolen, upon request of CDC, the undersigned shall execute a replacement Note incorporating the terms hereof, provided that CDC shall furnish a written agreement to indemnify the undersigned against all losses, costs, and damages arising from a duplicative demand for payment under this Note. 14. Interpretation. This Note shall he governed and interpreted in accordance with applicable California law. Maker: Mike N. Dallo and Mona Dallo By: Print Namc: 1 Kc DALJ O Its: C W ti1Q By: Print Dame: /l1 CY1 A Its: pWY\ ✓ Page 4 of 5 State of California ) ) ss: County of San Diego OnSe. r _ �� ;00 0, 2006, before me, the undersigned, a Not' ry Public in and fo the C unty of San Diego, State of : alifornia, personally appeared m tk e_ (t � iO a 'jY\O/� � personally known to me on the basis of satisfactory evidence, to be the person(s) whose name(s) is/are subscribed to the within Note Secured by Deed of Trust 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. Notary Public Page 5 of 5 SANDRA A. LARA Commission # 1478914 Notary Public - California San Diego County My Comm. Expires Apr 23, 2008 RESOLUTION NO. 2008 — 56 RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF NATIONAL CITY (CDC) AUTHORIZING THE CHAIRMAN TO EXECUTE AN AMENDMENT TO THE COMMUNITY DEVELOPMENT COMMISSION FACADE IMPROVEMENT AGREEMENT WITH MIKE N. DALLO AND MONA DALLO AND FOODLAND, INC. FOR THE PURPOSE OF INCREASING THE AMOUNT OF THEIR LOAN FROM THE CDC FROM $347,320 TO $542,349, AND AUTHORIZING THE CHAIRMAN TO EXECUTE A RECONVEYANCE OF THE CURRENT DEED OF TRUST IN ORDER TO RECORD A NEW DEED OF TRUST FOR $542,349 WHEREAS, on or about September 18, 2006, the Community Development Commission of the City of National City ("CDC"), Mike N. Dallo and Mona Dallo ("Property Owners") and Foodland, Inc. ("Participant") executed the Facade Improvement Agreement for purposes of rehabilitating the facade at 303 Highland Avenue, which was funded by a loan from the CDC to the Property Owners in the amount of $347,320; and WHEREAS, on or about September 18, 2006, the Property Owners executed a Deed of Trust for the purpose of securing payment of the indebtedness, in the principal sum of $347,320.00; and WHEREAS, on September 4, 2007, the CDC Board approved an increase in the budget for the project to $542,349; and WHEREAS, the facade improvement costs have exceeded the original loan amount, and the Property Owners have requested that the CDC increase the amount loaned to them to pay for those increased costs, which would result in a new total loan amount of $542,349; and WHEREAS, in order to increase the loan amount, it is proposed that the Facade Improvement Agreement be amended to provided that the amount of the CDC loan to the Property Owners increase from $347,320 to $542,349, and that a new Deed of Trust be executed by the Property Owners to secure the payment of $542,349, with all other provisions of the Facade Improvement Agreement to remain in full force and effect. NOW, THEREFORE, BE IT RESOLVED that the Community Development Commission of the City of National City hereby authorizes the Chairman to execute an Amendment to the Facade Improvement Agreement with Mike N. Dallo and Mona Dallo and Foodland, Inc. to increase the loan amount for the Foodland Facade Improvement Agreement Project from $347,320 to $542,349. BE IT FURTHER RESOLVED that the Chairman is authorized to execute a Reconveyance of the current Deed of Trust, and the City Clerk is directed to record the new Deed of Trust securing the payment of $542,349. --- Signature Page to Follow --- Resolution No. 2008 — 56 April 1, 2008 Page 2 PASSED and ADOPTED this 1st day of April, 20 on Morrison, Chairmaa ATTEST: APPROVED AS TO FORM: George H. Eiser, II Legal Counsel Passed and adopted by the Community Development Commission of the City of National City, California, on April 1, 2008, by the following vote, to -wit: Ayes: Commissioners Morrison, Natividad, Parra, Ungab, Zarate. Nays: None. Absent: None. Abstain: None. AUTHENTICATED BY: RON MORRISON Chairman, Community Development Commission Secretary, Community Development Commission By: Deputy I HEREBY CERTIFY that the above and foregoing is a full, true and correct copy of RESOLUTION NO. 2008-56 of the Community Development Commission of the City of National City, California, passed and adopted on April 1, 2008. Secretary, Community Development Commission By: Deputy cm)oc.-5\ City of National City, California COMMUNITY DEVELOPMENT COMMISSION AGENDA STATEMENT MEETING DATE April, 1, 2008 AGENDA ITEM NO. 21 M TITLE Resolution of the Community Development Commission authorizing the Chairman to execu an Amendment to the Community Development Commission Facade Improvement Agreement with Mike N. Dallo and Mona Dallo ("Property Owner") and Foodland, Inc. ("Participant") for the purpose of increasing the amount of the Loan to Property Owner from $347,320 to $542,349 and authorizing the reconveyance of the current Deed of Trust to record a new Deed of Trust for $542, 349 with the County of San Diego. EXPLANATION On September 18, 2006, The CDC entered into a Facade Improvement Agreement with the Property Owner and the Participant for $347,320 to rehabilitate the Facade at 303 Highland Avenue. On September 4, 2007, the CDC Board approved an increase in the project budget to $542,349. Staff suggests that the Board approve the proposed resolution to protect CDC's interest. PREPARED BY DEPARTMENT Jacqueline Reynoso (ext. 4293) Economic Development Division Community Development Coordinator Project Account Number 900731 Strategic Action Plan 9d Environmental Review N/A Financial Statement STAFF RECOMMENDATION Adopt the resolution. J ATTACHMENTS Resolution No. 'a o 0 ` •' G 1. Staff Report 4. Resolution NIT2. Amendment to Agreement 3. Agreement / Deed of Trust A-200 (9/80) City of National City Office of the City Clerk 1243 National City Blvd. National City, CA 91950-4397 619-336-4228 619-336-4229 fax MIKE N. & MONA DALLO AND FOODLAND, INC. Amendment to the Facade Improvement Agreement Jacqueline Reynoso (CDC) has provided the contractor a fully executed original contract.