CONCLUSION:
The amendment will not give any benefit to the developer and the original agreement will remain the same and in full effect. Staff is recommending the approval of this amendment.
Respectfully Submitted: Reviewed:
Mr. Moma Cat Luch
Masoud Niroumand
Housing Program Coordinator Director of Development Services Reviewed and Approved:
ty Manager
Attachments:
1) Amendment to City Loan Agreement
2) Amendment to Regulatory Agreement and Declaration of Restrictive Covenants
PROMISSORY NOTE
SECURED BY DEED OF TRUST
$1,761,000.00 12/5 , 2005
Merced, California
1. FOR VALUE RECEIVED, the undersigned SUNNY VIEW OF MERCED, L.P., a California limited partnership ("Maker") promises to pay to the City of Merced, a California Charter Municipal Corporation, or order ("Holder") at 678 West 18" Street, Merced, California 95340, or at such other place as the Holder of this Promissory Note (Note) may designate in writing, the sum of One Million Seven Hundred Sixty-one Thousand Dollars ($1,761,000.00) or so much thereof as is disbursed to Maker, together with interest on unpaid principal until paid at the rate of two percent (2%) per annum on the first day of the month in which the Loan funds, with interest compounded annually.
This Note is secured by that certain Deed of Trust ("Deed of Trust") of even date herewith given by the Maker, as Trustor, to a title company approved by Lender as Trustee, for the benefit of Holder, as the Beneficiary, which Deed of Trust is to be recorded against that certain property in the City of Merced, County of Merced, State of California and more particularly described in Exhibit "A" to the Deed of Trust (the "Property").
The following terms as used in this Note shall have the meanings given herein unless expressly provided to the contrary:
"City Loan" means the Loan made by the City of Merced, a California Charter Municipal Corporation, to Maker evidenced by this Note.
"City Loan Documents" means that certain City Loan Agreement of even date herewith ("City Loan Agreement") by and between Maker and Holder, this Note, the Deed of Trust and all other documents and instruments evidencing, securing or relating to the indebtedness evidenced by this Note and the obligations of Maker.
"Code" shall mean the Internal Revenue Code of 1986, as amended. "Construction Loan" means any Loan or Loans obtained by Maker from an institutional lender making such loans in the ordinary course of its business, and secured by a first lien on the Project, the majority of the proceeds of which Loan are used to finance the construction of the Project.
"Debt Service" means the debt service on the Senior Mortgage Financing. 1 N:ISHARED Attorney/Agreements/Housing/2005 Sunnyview/Promissory Note - 11.22.05.doc -
"Developer Agreement" means that certain Developer Agreement entered into by and between the Maker and Simpson Housing Solutions, LLC with respect to the Project. "Gross Income" means all revenues or income collected by the Maker, or its successors or assigns from the Project. Gross Income shall be determined on a cash basis during any pertinent or applicable period, but shall not include security deposits (unless and until such security deposits have been forfeited by tenants), or insurance or condemnation proceeds (except as paid to Maker for loss of rents), or the proceeds from any sale or refinancing of the Project or any part thereof, or amounts expended from any reserves for the Project.
"Lender" means any lender under, or holder of, any Loan. "Lien" means any mortgage, deed of trust or other security instrument encumbering the Project or any part thereof as security for any Loan.
"Loan" or "Loans" means any loan made by the Mortgagee to Maker which is secured by a Lien.
"Mortgagee" means a mortgagee of a mortgage or a beneficiary under a deed of trust encumbering title to the Project, or any part thereof.
"Net Cash Flow" means for any period the amount of Gross Income for such period less Operating Expenses and Debt Service for such period.
"Net Proceeds" means the proceeds of any Loan secured by the Project, less the repayment of any Loan made prior in time to said Loan and less any fees or charges paid out of the gross proceeds related to such Loan, including without limitation broker's commissions and fees, Loan commitment fees or other charges assessed by the Lender for making the Loan, normal closing costs, title insurance premiums, and attorney's fees.
"Operating Expenses" means for any period the sum of the following expenses incurred and paid during such period: (i) all expenses incurred by Maker in owning, operating, maintaining, repairing, and replacing the Project (excluding payment from insurance proceeds and any costs or expenses paid or reimbursed by third parties), including without limitation taxes, assessments and bonds, insurance, and maintenance expenses for the Project, accounting and legal fees, leasing commissions, advertising expenses, property management fees (not to exceed 6% of Gross Income) and expenses of on-site employees, supplies, license and permit fees, capital expenditures (to the extent such expenses exceed reserves), any and all developer fees and payments on the Developer Note (as defined in the Maker's partnership agreement), if any, partnership management fees and asset management fees and utility charges, and (ii) such reasonable reserves as the Maker or any Mortgagee may require to be set aside for the Project (but excluding the expenditure of funds from the reserve once set aside) not exceeding Three Hundred Dollars ($300.00) per apartment unit per year. Maker shall be deemed to be required to pay Operating Expenses for materials and services upon receipt thereof, and to the extent services are not billed on a monthly basis, the bill for such 2 C:ISW Promissory Note - 11.22.05.doc
services shall be prorated over the period during which such services were received. Real estate taxes, assessments, bonds, and insurance premiums shall be prorated on a monthly basis based on the latest information available. If the actual cost of real estate taxes, assessments, bonds, or insurance premiums are different from the information used to make such prorations, then an adjustment in the next month's Operating Expenses shall be made based upon the correct information. Operating Expenses shall not include: (i) payments made from insurance proceeds for any loss or damage to the Project, or (il) depreciation of buildings or improvements or similar non-cash items of deduction or expense, or (iii) funds expended from reserves. Maker shall count an Operating Expense only one time in one category and under no circumstances shall an Operating Expense be counted more than once.
"Partnership Agreement of Maker" means the Agreement of Limited Partnership of Sunny View of Merced, L.P.
"Permanent Loan" means any Loan, secured by a first lien on the Project, the Net Proceeds of which are used to pay any Construction Loan or any previous Permanent Loan. "Project" means the Property and the proposed development of the Property with a 113-unit low income affordable housing residential apartment project. "Property" means the subject real property located in the City of Merced, County of Merced, State of California, and more particularly described in Exhibit "A" to the Deed of Trust securing this Note.
"Senior Mortgage Financing" means any of the following: (i) the Construction Loan; (ii) the Permanent Loan; or (iii) any Loan refinancing any Permanent Loan. "Tax Credits" means low-income housing tax credits allowable to the Maker with respect to the Project under Section 42 of the Internal Revenue Code of 1986, as amended. "Tax Credit Sale Proceeds" means the total net proceeds to be obtained by Maker from the sale of limited partnership interests in Maker to persons who will qualify as limited partners of Maker for purposes of receiving Tax Credits, less the cost of said sales, including without limitation syndication costs and syndication fees, attorney fees and accountant fees, filing fees with governmental agencies having jurisdiction over the syndication, brokerage or finder's fees, and consulting fees.
"Debt Service", "Gross Income", "Net Cash Flow", and "Operating Expenses" all shall be determined on a cash basis.
4. RESERVED.
3 C:ISW Promissory Note - 11.22.05.doc
5. Commencing on the first day of the first calendar month in which there is Net Cash Flow after payment of Debt Service, and continuing on the first day of each and every calendar month thereafter for the remaining term of this Note, there shall be due and payable to Holder an amount equal to twenty-five percent (25%) of the Net Cash Flow of the Project. The payments made pursuant to this Paragraph 5 shall first be applied to accrued interest and the remainder to principal.
6. If not sooner paid, the unpaid principal balance of this Note plus any unpaid interest thereon shall be all due and payable to Holder thirty-five years (35) from the date of execution of this Note.
7. The principal of this Note and any unpaid interest accrued thereon may be prepaid in whole or in part at any time without premium or penalty.
8. In the event of default in payment of principal hereunder or interest accrued thereon occurring for more than ten (10) days, or upon maturity of this Note (whether by acceleration or otherwise), interest shall thereafter accrue on said unpaid principal until said default is cured at the rate of twelve percent (12%) per annum, compounded annually, or the maximum amount allowed by applicable usury law if less than said rate, which interest shall be immediately due and payable as accrued to the Holder of this Note.
9. In the event of any default of Maker in payment hereof or under any terms, covenants or conditions contained herein, or in the City Loan Documents, the Deed of Trust or in any other instrument securing this Note, or under any modification, extension or renewal hereof or thereof, then the entire principal sum of this Note and all interest accrued thereon shall become immediately due and payable at the option of the Holder of this Note. Failure to exercise such option shall not constitute a waiver of the right to exercise such option in the event of any further or subsequent default.
10. Principal, interest and all other sums due hereunder shall be payable in lawful money of the United States of America. Maker agrees to pay all costs and expenses of collection of this Note, including, but not limited to, reasonable attorneys' fees whether collected by suit or otherwise.
Neither the failure to accelerate the indebtedness hereof by reason of any default or under any provision hereof nor the acceptance of any past-due payment shall constitute a waiver of the right of the Holder of this Note thereafter to enforce strict compliance of the terms, covenants and conditions hereof. This Note may be extended or renewed in whole or in part by the Holder hereof and any related right or security therefor may be waived, exchanged, surrendered or otherwise dealt with, all without affecting the liability of Maker. Maker hereby waives presentment for payment, demand, protest, notice of protest, and notice of dishonor. Time is of the essence herein.
11. In the event any term, covenant, condition or other provision contained in this Note or in any instrument securing this Note is for any reason held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect, alter, modify or impair in any manner whatsoever any other term, covenant, condition or other provision contained in this Note 4 C:ISW Promissory Note - 11.22.05.doc
or in any instrument securing this Note, the provisions of which shall continue to apply as if such invalid, illegal or unenforceable provision was not contained herein or therein.
12. Holder's recovery against any partner of Maker under this Note and the City Loan Documents shall be limited solely to the collateral given to Holder as security for Maker's performance under this Note and the City Loan Documents and to the general assets of Maker itself.
Such recovery shall not be a lien, or the basis of a claim of lien or levy of execution, against the general assets of any general or limited partner of Maker. Notwithstanding the foregoing, Maker, any general partner of Maker and the general assets of any general partner of Maker shall be fully liable to Holder to the same extent that Maker would be liable absent the foregoing limitation of this Paragraph for: (a) fraud or will ful misrepresentation on the part of Maker or such partners; (b) waste; (c) failure of such partner to pay any income or other taxes, assessments or other charges attributable to such partner which can create liens on any portion of the Project (to the full extent of any such taxes, assessments or other charges); (d) the amount of any money or value of any property received by such partner as a distribution of earnings or income from the Project if such distribution was prohibited under the terms of the City Loan Agreement (to the full extent of such distribution); (e) any breach by Maker of any covenant under Article 7 of the City Loan Agreement, entitled Hazardous Materials, any representation or warranty of Maker under such Article proving to have been untrue when made, or the presence of any significant Hazardous Materials in, on or about the Project which are discovered subsequent to the Effective Date; or (f) any obligation arising from the indemnity set forth in Section 11.10 of the City Loan Agreement (except for payment of principal and interest on this Note which shall remain non-recourse). In addition, the limitations hereof shall not be deemed to limit: (i) any right Holder might otherwise have to obtain injunctive relief against Maker, any partner of Maker or any other person or entity; (ii) any suit, action or proceeding (including without limitation exercise of the power of sale under or the filing of an action for judicial foreclosure of the Deed of Trust), in connection with the preservation, enforcement or foreclosure of the liens, mortgages, assignments and security interests now or at any time hereafter securing the payment and performance of all obligations under any of the City Loan Documents; or (ili) the collection of amounts which may become owing or payable under or on account of insurance, condemnation awards or damages for other public actions or surety bonds maintained or provided by Maker: provided, however, that the assertion by Holder of any such right, suit, action or collection of amounts shall not result in a momentary claim upon the general assets of any general or limited partner of Maker except as otherwise provided herein.
13. Whenever reference is made herein to "Maker" or "Holder", such reference shall be deemed to refer to and include the heirs, executors, legal representatives, successors and assigns thereof, it being expressly agreed that the rights and obligations of all parties named herein or liable hereunder shall inure to the benefit of and be binding upon such parties and their respective heirs, executors, legal representatives, successors and assigns. This Note and all provisions hereof shall be governed by and construed in accordance with the laws of the State of California, and any action brought relating to this Note shall be held exclusively in a state court in the County of Merced. 5 C:ISW Promissory Note - 11.22.05.doc
For the purpose of assuring compliance with the payment of this Note, representatives of the Holder shall have a right of access to the Project and the books and records of Maker pertaining to the Project, during normal business hours, upon at least twenty four (24) hours prior notice to Maker, including but not limited to the inspection of the books and records for determining the Net Cash Flow after Debt Service.
15. Prior to the recordation by Holder of a Certificate of Completion upon completion of the Project, the Maker shall not transfer, convey, assign, or lease the whole or any part of the Property or the Improvements thereon without the prior written approval of the Holder. Subsequent to the recordation of a Notice of Completion for the Project, maker may sell, transfer, assign, convey or encumber, mortgage or hypothecate the Property or the Project or any part thereof or any interest therein, and any of the general or limited partnership interests of the Maker in any manner; rent the apartment units to tenants in the ordinary course of business and in a manner otherwise meeting the requirements of the City Loan Documents and any other covenants, conditions or restrictions applicable to the Project (including the Construction Loan Documents and the Regulatory Agreement) - none of the foregoing shall require the consent of Holder.
16. Interest on the debt evidenced by this Note shall not exceed the maximum amount of nonusurious interest that may be contracted for, taken, reserved, charged, or received under applicable law; any interest in excess of that maximum amount shall be credited on the principal of the debt or, if that has been paid, refunded. On any acceleration or required or permitted prepayment, any such excess shall be canceled automatically as of the acceleration or prepayment or, if already paid, credited on the principal of the debt or, if the principal of the debt has been paid, refunded. This provision overrides other provisions in this and all other instruments concerning the debt.
17. The indebtedness evidenced by this Note is and shall be subordinate to the liens, terms, covenants and conditions of any construction and permanent loan made to the Maker in the original principal amount not to exceed Two Million One Hundred Thousand Dollars ($2,100,000.00) and any and all loans refinancing such loan (collectively the "Senior Loan") and all documents, agreements, and instruments executed in connection with or securing the Senior Loan (the "Senior Loan Documents"), provided that the priority of Holder's security in the Property shall remain at no less than second position. The rights and remedies of the Payee and each subsequent holder of this Note are subject to these restrictions and limitations. Each subsequent holder of this Note shall be deemed, by virtue of such holder's acquisition of this Note, to have agreed to perform and observe all of the terms, covenants and conditions of this Paragraph. The provisions of this Paragraph do not subordinate Payee's right to receive payments of the sums due hereunder except during the period of any uncured event of default under the Senior Loan Documents, and Payee shall pay to the holder of the Senior Loan any funds received by Payee during the period of any uncured event of default not later than 10 days after receipt by it of written demand from holder of the Senior Loan.
6 C:ISW Promissory Note - 11.22.05.doc
The person or persons executing this Note warrants and represents that he/she/they has/have the authority to execute this Note on behalf of their entity and has/have the authority to bind their party to the performance of its obligations hereunder.
IN WITNESS WHEREOF, the undersigned Maker has caused this Note to be executed on the day, month and year first written above.
MAKER:
SUNNY VIEW OF MERCED, L.P.,
a California Limited Partnership
By: Western Community Housing, Inc,
California Nonprofit Corporation,
its General Partner
By:
Name: Graham Espley-Jones
Title: President
Address: 151 Kalmus drive# Guite J-5
costa Masa, CA 92626
C: SW Promissory Note - 11.22.05.doc
IN WITNESS WHEREOF, the undersigned Maker has caused this Note to be executed on the day, month and year first written above.
MAKER:
SUNNY VIEW OF MERCED, L.P.,
a California Limited Partnership
By: Western Community Housing, Inc,
California Nonprofit Corporation,
its General Partner
By:X88
Name: Stahard Espley-Jones
Title: President
Adress: 151 Kalmus Drive, Suite 13
Costa Mesa, CA 92626
ween #i LobY D.3.6.
Recorded in Official Records, Merced County 1/26/2006
8:37 AM
M. STEPHEN JONES R04
County Recorder
RECORDING REQUESTED BY CM City of Merced G
AND WHEN RECORDED MAIL TO: Doc#: 2006-006143 Titles: 3 Pages: 29 Fees 0.00
City of Merced, a California Charter Municipal Corf Taxes 0.00 678 West 18 Street Other 0.00
Merced, California 95340 PAID $0.00
Attention: City Clerk
DEED OF TRUST WITH
ABSOLUTE ASSIGNMENT OF LEASES AND RENTS,
SECURITY AGREEMENT AND FIXTURE FILING
(CITY TRUST DEED)
The parties to this Deed of Trust with Absolute Assignment of Leases and Rents, Security Agreement and Fixture Filing ("Deed of Trust"), made as of: 1215, 2005, are SUNNY VIEW OF MERCED, L.P., a California limited partnership ("Trustor"), FIRST AMERICAN TITLE COMPANY ("Trustee"), and THE CITY OF MERCED, a California Charter Municipal Corporation ("Beneficiary").
ARTICLE 1. GRANT IN TRUST
1.1 Grant. For the purpose of securing the payment and performance of the Secured Obligations defined and described in Section 2.1, Trustor hereby irrevocably and unconditionally grants, conveys, transfers and assigns to Trustee, in trust for the benefit of the Beneficiary, with power of sale and right of entry and possession, all estate, right, title and interest which Trustor now has or may later acquire in and to all that certain real property located in the City of Merced, County of Merced, State of California, as more particularly described in Exhibit A attached hereto and incorporated herein (the "Land"),
TOGETHER with all buildings and improvements now or hereafter located thereon and all materials intended for construction, reconstruction, alteration and repair of such buildings and improvements (collectively, "Improvements");
TOGETHER with all existing and future easements, rights, rights of way, franchises, tenements, hereditaments and appurtenances of the Land, and all development rights and credits, air rights, water, water rights, water stock related to the Land and all minerals, oil, gas and other hydrocarbon substances in, on or under the Land and any land lying in the streets, roads or highways, open or proposed, in front of or adjoining the Land and Improvements (collectively, "Appurtenances");
TOGETHER with all goods, materials, supplies, equipment, appliances, machinery, fixtures, furniture, furnishings and other articles and types of tangible personal property and any additions to, 1 C:ISW Deed of Trust - |1.22.05.doc
substitutions for, changes in or replacements of the whole or any part thereof now or at any time hereafter affixed to, attached to, placed upon or used in any way in connection with the use, enjoyment, occupancy or operation of the Land, Improvements and Appurtenances or any portion thereof, including all building materials and equipment now or hereafter delivered to the Land, Improvements and Appurtenances and intended to be installed in or about the same; TOGETHER with all inventory, accounts, deposit accounts, accounts receivable, contract rights, development and use rights, permits, licenses, applications, architectural and engineering plans, specifications and drawings, as-built drawings, chattel paper, instruments, documents, notes, drafts and letters of credit (other than letters of credit in favor of Beneficiary) arising from or relating to the Land, Improvements and Appurtenances and any business conducted thereon by Trustor and any other intangible personal property and rights relating to the Land, Improvements and Appurtenances or any part thereof or to the operation thereof or used in connection therewith, including goodwill, trademarks and tradenames;
TOGETHER with all rents, issues, revenues, income, royalties and profits and all leases, rental agreements and other contracts and agreements relating to the use or possession of or otherwise derived from any of the Land, Improvements, Appurtenances or any of the other property described above, together with all guarantees thereof and all deposits (to the full extent permitted by law) and other security therefor;
TOGETHER with all proceeds of, additions and accretions to, substitutions and replacements of any of the foregoing (including, but not limited to, all claims to or demands thereto) from the voluntary or involuntary conversion of the Land, Improvements, Appurtenances or any of the other property described above into cash or liquidated claims, including proceeds of all present and future fire, hazard or casualty insurance policies and all condemnation awards or payments in lieu thereof made by any public body or decree by court of competent jurisdiction for taking or for degradation of the value in any condemnation or eminent domain proceeding, and all causes of action and the proceeds thereof of all types for any damage or injury to the Land, Improvements, Appurtenances or any of the other property described above or any part thereof, including causes of action arising in tort or contract and causes of action for fraud or concealment of a material fact (collectively "Proceeds"); together with all books and records pertaining to any and all of the property described above, including computer-readable memory and any computer hardware or software necessary to access and process such memory.
All property, both real and personal, described above and conveyed to Trustee under this Deed of Trust shall hereinafter be collectively referred to as the "Property." The listing of specific rights or property shall not be interpreted as a limit of general terms.
1.2 Address. The address of the real property described herein is the 1102-1194 D Street, Merced, CA 95340. However, neither the failure to designate an address nor any inaccuracy in the address designated shall affect the validity or priority of the lien of this Deed of Trust on the Property as described on Exhibit A. Trustor is the owner of the real property described 2 C:ISW DEED OF TRUST - 11.22.05.DOC
in Exhibit A attached hereto and Beneficiary is the lender making the loan secured by this Deed of Trust.
ARTICLE 2. OBLIGATIONS SECURED
2.1 Obligations Secured. Trustor makes this grant and assignment for the purpose of securing the following obligations ("Secured Obligations"):
Payment to Beneficiary of all sums at any time owing under that certain Promissory Note Secured By Deed of Trust ("Note") of even date herewith, in the principal amount of One Million Seven Hundred Sixty-one Thousand Dollars ($1,761,000.00) executed by Trustor and payable to the order of Beneficiary; and
(b) Payment and performance of all covenants and obligations on the part of Trustor under this Deed of Trust; and
(c) Payment and performance of all covenants and obligations on the part of Trustor under that certain City Loan Agreement ("Loan Agreement") of even date herewith by and between Trustor as borrower and Beneficiary, as lender and the payment and performance of all other obligations referred to in the Loan Agreement which would constitute a default thereunder if not performed as required; and
(d) Payment and performance of all covenants and obligations on the part of Trustor under all Loan Documents as defined in the Loan Agreement; and (e) Payment and performance of all covenants and obligations on the part of Trustor if any, which any rider attached as an Exhibit to this Deed of Trust recites are secured hereby; and
Payment and performance of all future advances and other obligations that the then record owner of all or part of the Property may agree to pay and/or perform (whether as principal, surety or guarantor) for the benefit of Beneficiary, when such future advance or obligation is evidenced by a writing which recites that it is secured by this Deed of Trust; and (g) All modifications, extensions and renewals of any of the obligations secured hereby, however evidenced, including, without limitation: (i) modifications of the required principal payment dates or interest payment dates or both, as the case may be, deferring or accelerating payment dates wholly or partly; or (ii) modifications, extensions or renewals at a different rate of interest whether or not in the case of a note, the modification, extension or renewal is evidenced by a new or additional promissory note or notes.
2.2 Obligations. The term "obligations" is used herein in its broadest and most comprehensive sense and shall be deemed to include, without limitation, all interest and charges, 3 C:ISW DEED OF TRUST - 11.22.05.DOC
-
prepayment charges (if any), late charges and loan fees at any time accruing or assessed on any of the Secured Obligations.
2.3 Incorporation. All terms of the Secured Obligations, Loan Documents and any other documents evidencing the Secured Obligations are incorporated herein by this reference. All persons who may have or acquire an interest in the Property shall be deemed to have notice of the terms of the Secured Obligations and to have notice, if provided therein, that: (a) the Note or the Loan Agreement may permit borrowing, repayment and re-borrowing so that repayments shall not reduce the amounts of the Secured Obligations; and (b) the rate of interest on one or more Secured Obligations may vary from time to time. Any capitalized terms used herein and not otherwise defined herein have the meanings ascribed to them under the Loan Agreement.
ARTICLE 3. ASSIGNMENT OF LEASES AND RENTS
3.1 Assignment. Subject to any prior assignment to the Senior Lender pursuant to the Senior Loan Documents, Trustor hereby irrevocably assigns to Beneficiary (a) all of Trustor's right, title and interest in, to and under all leases of the Property or any portion thereof, all licenses and agreements relating to the management, leasing or operation of the Property or any portion thereof, and all other agreements of any kind relating to the use or occupancy of the Property or any portion thereof, whether now existing or entered into after the date hereof ("Leases"); and (b) all rents, issues, deposits and profits of the Property, including, without limitation, all amounts payable and all rights and benefits accruing to Trustor under the Leases ("Rents"). The term "Leases" shall also include all security deposits, guarantees and other security for the lessees' performance thereunder, and all amendments, extensions, renewals or modifications thereto. This is a present and absolute assignment, not an assignment for security purposes only, and Beneficiary's right to the Leases and Rents is not contingent upon possession of the Property, and may be exercised without possession of the Property.
3.2 Grant of License. Subject to any prior rights of the Senior Lender pursuant to the Senior Loan Documents, Beneficiary confers upon Trustor a license ("License") to collect and retain the Rents as they become due and payable, until the occurrence of a Default (as hereinafter defined).
Upon a Default, the License shall be automatically revoked and Beneficiary may collect and apply the Rents pursuant to Section 6.5 without notice and without taking possession of the Property.
Trustor hereby irrevocably authorizes and directs the lessees under the Leases to rely upon and comply with any notice or demand by Beneficiary for the payment to Beneficiary of any rental or other sums which may at any time become due under the Leases, or for the performance of any of the lessees' undertakings under the Leases, and the lessees shall have no right or duty to inquire as to whether any Default has actually occurred or is then existing hereunder. Trustor hereby relieves the lessees from any liability to Trustor by reason of relying upon and complying with any such notice or demand by Beneficiary. Subject to the License granted to Trustor hereunder, Trustor irrevocably appoints Beneficiary as its true and lawful attorney-in-fact, at the option of Beneficiary, to demand, receive and enforce all Leases and Rents, to give receipts, releases and satisfactions and to sue, in the 4 C:ISW DEED OF TRUST - 11.22.05 DOC
name of Trustor or Beneficiary, in order to enforce all such Leases and apply all litigation proceeds to the Secured Obligations.
3.3 Effect of Assignment. The foregoing irrevocable Assignment shall not cause Beneficiary to be: (a) a mortgagee in possession; (b) responsible or liable for the control, care, management or repair of the Property or for performing any of the terms, agreements, undertakings, obligations, representations, warranties, covenants and conditions of the Leases; or (c) responsible or liable for any waste committed on the Property by the lessees under any of the Leases or any other parties; for any dangerous or defective condition of the Property; or for any negligence in the management, upkeep, repair or control of the Property resulting in loss or injury or death to any Lessee, licensee, employee, invitee or other person. Beneficiary shall not directly or indirectly be liable to Trustor or any other person as a consequence of: (i) the exercise or failure to exercise any of the rights, remedies or powers granted to Beneficiary hereunder; or (ii) the failure or refusal of Beneficiary to perform or discharge any obligation, duty or liability of Trustor arising under the Leases.
3.4 Representations and Warranties. Trustor represents and warrants that as of the date hereof, no Leases have been entered into.
3.5 Covenants. Trustor covenants and agrees at Trustor's sole cost and expense after completion of the Improvements on the Property to: (a) exercise Trustor's best efforts to keep all portions of the Property leased at all times at rental amounts permitted under the Loan Agreement and the Regulatory Agreement for the Tax Credits; (b) deliver to Beneficiary fully executed, counterpart original(s) or copies of each and every Lease, if requested to do so, and within twenty (20) days after the end of each calendar month, a certified rent roll for the prior month containing the names of all lessees of the Property, the date and term of their respective Leases, the apartment units occupied, the rent payable thereunder and the security deposit held; (c) execute and record such additional assignments of any Lease or specific subordinations of any Lease to the Deed of Trust, in form and substance acceptable to Beneficiary, as Beneficiary may request; (d) perform the obligations of lessor contained in the Leases and enforce by all available remedies performance by the lessees of the obligations of the lessees contained in the Leases; (e) give Beneficiary prompt written notice of any default which occurs with respect to any of the Leases, whether the default be that of the lessee or of the lessor; and (f) exercise Trustor's best efforts to avoid, prevent, and promptly remedy any and all code enforcement problems on the Land under the Merced Municipal Code, as said Code is amended from time to time. Trustor shall not, without Beneficiary's prior written consent or as otherwise permitted by any provision of the Loan Agreement: (1) execute any other assignment relating to any of the Leases except as required by the Senior Loan Documents; (ii) discount any rent or other sums due under the Leases or collect the same in advance, other than to collect rent two (2) months in advance of the time when it becomes due (exclusive of security deposits); (iii) terminate, modify or amend any of the terms of the Leases or in any manner release or discharge the lessees from any obligations thereunder; (iv) consent to any assignment or subletting by any lessee; or (V) subordinate or agree to subordinate any of the Leases to any other deed of trust or encumbrance except for the Senior Loan Documents and Permitted Exceptions. Any such C:ISW DEED OF TRUST - 11.22.05.D0C
attempted action in violation of the provisions of this Section 3.5 shall be null and void. Without in any way limiting the requirement of Beneficiary's consent hereunder, any sums received by Trustor in consideration of any termination (or the release or discharge of any lessee), modification or amendment of any Lease shall be applied to reduce the outstanding Secured Obligations and any such sums received by Trustor shall be held in trust by Trustor for such purpose.
3.6 Estoppel Certificates. Within twenty (20) days after request by Beneficiary, Trustor shall deliver to Beneficiary and to any party designated by Beneficiary estoppel certificates executed by Trustor and, if available, by each of the lessees, in recordable form, certifying (if such be the case): (i) that the foregoing assignment and the Leases are in full force and effect; (i) the date of each lessee's most recent payment of rent; (il) that there are no defenses or offsets outstanding, or stating those claimed by Trustor or lessees under the foregoing assignment or the Leases, as the case may be; and (iv) any other information reasonably requested by Beneficiary.
ARTICLE 4. SECURITY AGREEMENT AND FIXTURE FILING
4.1 Security Interest.
(a) Subject to the prior interests, if any, of the Senior Lender under the Senior Loan Documents, Trustor hereby grants and assigns to Beneficiary a security interest, to secure payment and performance of all of the Secured Obligations, in all of the following described personal property in which Trustor now or at any time hereafter has any interest (collectively, the "Collateral"):
i. All right, title and interest of Trustor in and with respect to all reservations and allocations for low income housing tax credits ("Tax Credits") available under Section 42 of the Internal Revenue Code of 1986, as amended, now or hereafter issued or awarded by the California Tax Credit Allocation Committee or other governmental agency having jurisdiction for a residential apartment project now or hereafter to be constructed on the Land, including without limitation, all applications and fees for such Tax Credits. ii. All personal property, including, without limitation, all goods, materials, supplies, equipment, appliances, furniture, furnishings, fixtures, machinery, inventory and construction materials which Trustor now or hereafter owns or in which Trustor now or hereafter acquires an interest or right, including, without limitation, those which are now or hereafter located on or affixed to any of the Land or used or useful in the operation, use or occupancy thereof or the construction of any improvements thereon, including, without limitation, any interest of Trustor in and to personal property which is leased or subject to any superior security interest, or which is being manufactured or assembled for later installation into the improvements to be located or constructed on the Land, wherever located, and all books, records, leases and other documents, of whatever kind or character, relating to any of the Property.
CASW DEED OF TRUST - 11.22.05.DOC
All fees, income, rents, issues, profits, earnings, receipts, royalties and revenues may accrue from said goods, fixtures, furnishings, equipment and building materials or any part thereof or from the Land, Improvements or Appurtenances or any part thereof, or which may be received or receivable by Trustor from any hiring, using, letting, leasing, subhiring, subletting, or subleasing thereof;
All of Trustor's present and future rights to receive payments of money, services or property including, without limitation, rights to all deposits from tenants of the, accounts receivable, deposit accounts, chattel paper, notes, drafts, letters of credit, contract rights (including, without limitation, all rights under any interest rate hedging or similar agreement), instruments, general intangibles and principal, interest and payments due on account of goods sold, services rendered, loans made or credit extended, together with title or interest in all documents evidencing or securing the same; V. All other intangible property, permits, consents, approvals, licenses authorizations and other rights relating to the Land, Improvements or Appurtenances or the use thereof, or used in connection therewith, including but not limited to all governmental permits relating to construction or other activities on the Land, all names under or by which the project located on the Land may at any time be operated or known, all rights to carry on business under any such names, or any variant thereof, all trade names and trademarks relating in any way to any of the Land, Improvements or Appurtenances, good will in any way relating to the Land, Improvements or Appurtenances, and all licenses and permits relating in any way to, or to the operation of, the project located on the Land; vi. All contracts for and all proceeds from the sale or disposition of the Land, Improvements or Appurtenances or the sale or disposition of the aforesaid collateral; vii. All right, title and interest of Trustor under all insurance policies covering any loss or damage to all or any part of the Property or any of the aforesaid collateral from any cause whatsoever, regardless of whether such insurance coverage is required by Beneficiary, and all proceeds, loss payments and premium refunds payable in connection with such insurance;
All reserves, deferred payments, deposits, accounts, refunds, cost Benetiay for me account or trisor whether or nor distury, and all loan funds held by ix. All water stock relating to the Land or any portion of thereof; x. All causes of action, claims, compensation and recoveries for any damage to or condemnation or taking of the Land, Improvements or Appurtenances or the aforesaid collateral, or for any conveyance in lieu thereof, whether direct or consequential, or 7 C:ISW DEED OF TRUST - 11.22.05.DOC
for any damage or injury to the Property or the aforesaid collateral, or for any loss or diminution in value of the Property or the aforesaid collateral; XI. All architectural, structural, mechanical and engineering plans and specifications prepared for construction of improvements on or extraction of minerals from the Land, Improvements or Appurtenances and all studies, data and drawings related thereto; and also all contracts and agreements of the Trustor relating to the aforesaid plans and specifications or to the aforesaid studies, data and drawings or to the construction of improvements on or extraction of minerals or gravel from the Land.
XII. All replacements and proceeds of, and all additions and accessions to, any of the foregoing collateral, together with all books, records and files relating to any of the foregoing.
(b) As to all of the above described personal property which is or which hereafter becomes a "fixture" under applicable law, this Deed of Trust constitutes a security agreement and a fixture filing under Sections 9334 and 9502 of the California Uniform Commercial Code ("UCC"), as amended or recodified from time to time, and is acknowledged and agreed to be a "construction mortgage" under such Sections. For purposes of subdivision (h) of Section 9334 of the UCC, "completion" of construction, work or Improvements shall not be deemed to occur prior to completion of all work, and installation or incorporation into the Improvements of all materials, for which sums secured hereby are disbursed by Beneficiary. (c) Beneficiary shall have no duty or obligation to make or give any presentments, demands for performance, notices of non-performance, notices of protest or notices of dishonor in connection with any of the Collateral. Beneficiary has no responsibility for, and does not assume any of, Trustor's obligations or duties under any agreement or obligation which is part of the Collateral or any obligation relating to the acquisition, preparation, custody, use, enforcement or operation of any of the Collateral.
4.2 Representations and Warranties. Trustor represents and warrants that: (a) Trustor has, or will have, good title to the Collateral; (b) Trustor has not previously assigned or encumbered the Collateral, and no financing statement covering any of the Collateral has been delivered to any other person or entity, except in favor of the Senior Lender; and (c) Trustor's principal place of business is located at the address shown in Section 7.15.
4.3 Rights of Beneficiary. In addition to Beneficiary's rights as a "Secured Party" under the UCC, Beneficiary may, but shall not be obligated to, at any time without notice and at the expense of Trustor: (a) give notice to any person of Beneficiary's rights hereunder and enforce such rights at law or in equity; (b) insure, protect, defend and preserve the Collateral or any rights or interests of Beneficiary therein; (c) inspect the Collateral; and (d) endorse, collect and receive any right to payment of money owing to Trustor under or from the Collateral. Notwithstanding any other provision contained herein, in no event shall Beneficiary be deemed to have accepted any property 8 C:ISW DEED OF TRUST - 11.22.05.DOC
other than cash in satisfaction of any obligation of Trustor to Beneficiary unless Beneficiary shall make an express written election of said remedy under UCC §9621, or other applicable law.
4.4 Rights of Beneficiary on Default. Upon the occurrence of a Default (hereinafter defined) under this Deed of Trust, then subject to the rights of the Senior Lender under the Senior Loan Documents, in addition to all of Beneficiary's rights as a "Secured Party" under the UCC or otherwise at law:
(a) Beneficiary may (i) upon written notice, require Trustor to assemble any or all of the Collateral and make it available to Beneficiary at a place designated by Beneficiary; (ii) without prior notice, enter upon the Property or other place where any of the Collateral may be located and take possession of, collect, sell, and dispose of any or all of the Collateral, and store the same at locations acceptable to Beneficiary at Trustor's expense; (111) sell, assign and deliver at any place or in any lawful manner all or any part of the Collateral and bid and become purchaser at any such sales; and
(b) Beneficiary may, for the account of Trustor and at Trustor's expense: (i) operate, use, consume, sell or dispose of the Collateral as Beneficiary deems appropriate for the purpose of performing any or all of the Secured Obligations; (ii) enter into any agreement, compromise, or settlement, including insurance claims, which Beneficiary may deem desirable or proper with respect to any of the Collateral; and (iii) endorse and deliver evidences of title for, and receive, enforce and collect by legal action or otherwise, all indebtedness and obligations now or hereafter owing to Trustor in connection with or on account of any or all of the Collateral. (c) It is the express understanding and intent of the parties that as to any personal property interests subject to Article 9 of the UCC, Beneficiary, upon Default, may proceed under the UCC or may proceed as to both real and personal property interests in accordance with the provisions of this Deed of Trust and its rights and remedies in respect to real property, as specifically permitted under Section 9604 of the UCC and treat both real and personal property interests as one parcel or package or security.
4.5 Power of Attorney. Trustor hereby irrevocably appoints Beneficiary as Trustor's attorney-in-fact (such agency being coupled with an interest), and as such attorney-in-fact Beneficiary may, without the obligation to do so, in Beneficiary's name, or in the name of Trustor, prepare, execute and file or record financing statements, continuation statements, applications for registration and like papers necessary to create, perfect or preserve any of Beneficiary's security interests and rights in or to any of the Collateral, and, upon a Default hereunder, take any other action required of Trustor; provided, however, that Beneficiary as such attorney-in-fact shall be accountable only for such funds as are actually received by Beneficiary. 9 C:SW DEED OF TRUST - 11.22.05.DOC
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4.6 Possession and Use of Collateral.
(a) Except as otherwise provided in this Section or the other Loan Documents (as defined in the Loan Agreement), so long as no Default exists under this Deed of Trust or any of the Loan Documents, Trustor may possess, use, move, transfer or dispose of any of the Collateral in the ordinary course of Trustor's business and in accordance with the Loan Agreement. (b) Trustor shall not permit any of the Collateral to be removed from the Improvements without the prior written consent of Beneficiary unless (i) the replacements of Collateral are of equivalent value and quality and (ii) Trustor has good and clear title to such replacements free and clear of any and all liens, encumbrances, security interests, ownership interests, claims of title (contingent or otherwise) or charges of any kind or the rights of any such conditional sellers, vendors or any other third parties have been expressly subordinated, at no cost to Beneficiary, to the lien and security interest granted hereby in a manner satisfactory to Beneficiary. (c) It is understood and agreed that, in order to protect Beneficiary from the effect of Section 9334 of the UCC, in the event that (i) Trustor intends to purchase any goods which may become fixtures attached to the Property, or any part thereof, and (ii) such goods will be subject to a purchase money security interest held by a seller or any other party, Trustor shall, before executing any security agreement or other document evidencing such security interest, obtain the prior written approval of Beneficiary, and all requests for such written approval shall be in writing and contain the following information: a description of the fixtures to be replaced, added to, installed or substituted; the address at which the fixtures will be replaced, added to, installed or substituted, and the name and address of the proposed holder and proposed amount of the security interest. Any failure of Trustor to obtain such approval shall be a material breach of Trustor's covenants under this Deed of Trust, and shall, at the option of Beneficiary, entitle Beneficiary to all rights and remedies provided for herein upon default. No consent by Beneficiary pursuant to this section shall be deemed to constitute an agreement to subordinate any right of Beneficiary in fixtures or other property covered by this Deed of Trust.
ARTICLE 5. RIGHTS AND DUTIES OF THE PARTIES
5.1 Title. Trustor represents and warrants that, except as disclosed to Beneficiary in a writing which refers to this warranty, Trustor lawfully holds and possesses fee simple title to the Property without limitation on the right to encumber the same, and that this Deed of Trust is a valid lien on the Property subject to no prior lien other than the lien of the Senior Loan Documents. taxes and assessments which are alien not yet due and payable and the Permitted Exceptions. 10 CASW DEED OF TRUST - 11.22.05.DOC
5.2 Taxes and Assessments.
(a) Subject to Trustor's rights to contest payment of taxes as may be provided in the Loan Agreement, Trustor shall pay prior to delinquency all taxes, assessments, levies and charges imposed by any public or quasi-public authority or utility company, including, without limitation, nongovernmental levies or assessments such as maintenance charges, levies or charges resulting from covenants, conditions and restrictions affecting the Property, which are assessed or imposed upon the Property or upon any person, property, equipment or other facility used in the operation or maintenance thereof (collectively, "Impositions") which are or which may become a lien upon or cause a loss in value of the Property or any interest therein Trustor shall also pay prior to delinquency all taxes, assessments, levies and charges imposed by any public authority upon Beneficiary by reason of its interest in any Secured Obligation or in the Property, or by reason of any payment made to Beneficiary pursuant to any Secured Obligation; provided, however, Trustor shall have no obligation to pay taxes which may be imposed from time to time upon Beneficiary and which are measured by and imposed upon Beneficiary's net income. Upon request by Beneficiary, Trustor shall deliver to Beneficiary, within thirty (30) days after the date upon which any such Imposition is due and payable by Trustor, official receipts of the appropriate taxing authority, or other proof satisfactory to Beneficiary, evidencing the payment thereof. (b) Ifrequested by Beneficiary, Trustor shall cause to be furnished to Beneficiary a tax reporting service covering the Property of the type, duration and with a company satisfactory to Beneficiary.
5.3 Insurance. Subject to the provisions of the Loan Agreement, Trustor covenants to insure the Property at Trustor's expense against such risks as Beneficiary may require under the Loan Agreement and, at Beneficiary's request, to provide evidence of such insurance and payment of all premiums to Beneficiary, and to comply with the requirements of any insurance companies insuring the Property. All insurance policies shall contain a provision that, notwithstanding any contrary agreement between Trustor and insurance company, such policies will not be canceled, allowed to lapse without renewal, surrendered or materially amended, which term shall include any reduction in the scope or limits of coverage, without at least thirty (30) days prior written notice to Beneficiary.
In the event Trustor fails to provide, maintain, keep in force or deliver to Beneficiary the polices of insurance required by this Deed of Trust, Beneficiary may (but shall have no obligation to) procure such insurance, and Trustor will pay all premiums thereon promptly upon demand by Beneficiary and until such payment is made by Trustor, the amount of all such premiums shall bear interest at the rate applicable to the principal balance outstanding under the Note.
5.4 Tax and Insurance Impounds. If the Senior Lender is not then requiring escrowing or impounding of taxes and insurance premiums, then at Beneficiary's option and upon its demand, Trustor, shall, until all Secured Obligations have been paid in full, pay to Beneficiary monthly, annually or as otherwise directed by Beneficiary an amount estimated by Beneficiary to be equal to:
(i) all taxes, assessments and levies imposed by any public or quasi-public authority or utility company which are or may become a lien upon the Property and will become due for the tax year 11 C:ISW DEED OF TRUST - |1.22.05.DOC
during which such payment is so directed; and (i) premiums for fire, other hazard and mortgage insurance next due. If Beneficiary determines that any amounts paid by Trustor are insufficient for the payment in full of such taxes, assessments, levies and/or insurance premiums, Beneficiary shall notify Trustor of the increased amounts required to pay all amounts due, whereupon Trustor shall pay to Beneficiary within thirty (30) days thereafter the additional amount as stated in Beneficiary's notice. All sums so paid shall not bear interest, except to the extent and in any minimum amount required by law; and Beneficiary shall, unless Trustor is otherwise in Default hereunder or under any Secured Obligation, apply said funds to the payment of, or at the sole option of Beneficiary release said funds to Trustor for the application to and payment of, such sums, taxes, assessments, levies, charges, and insurance premiums. Upon Default by Trustor hereunder or under any Secured Obligation, Beneficiary may apply all or any part of said sums to any Secured Obligation and/or to cure such Default, in which event Trustor shall be required to restore all amounts so applied, as well as to cure any other events or conditions of Default not cured by such application. Upon assignment of this Deed of Trust, Beneficiary shall have the right to assign all amounts collected and in its possession to its assignee whereupon Beneficiary and its Trustee shall be released from all liability with respect thereto. Within ninety-five (95) days following full repayment of the Secured Obligations (other than full repayment of the Secured Obligations as a consequence of a foreclosure or conveyance in lieu of foreclosure of the liens and security interests securing the Secured Obligations) or at such earlier time as Beneficiary may elect, the balance of all amounts collected and in Beneficiary's possession shall be paid to Trustor and no other party shall have any right or claim thereto.
5.5 Performance of Secured Obligations. Trustor shall promptly pay and perform each Secured Obligation when due. All sums payable by Trustor pursuant to this Deed of Trust, shall be paid without notice, demand, counterclaim, setoff, deduction or defense and without abatement, suspension, deferment, diminution or reduction, together with interest thereon from the date the indebtedness arises at the rate of interest then applicable to the principal balance of the Note as specified therein, and the obligations and liabilities of Trustor hereunder shall in no way be released, discharged or otherwise affected (except as expressly provided herein) by reason of: (i) any damage to or destruction of or any condemnation or similar taking of the Property or any part thereof, (ii) any restriction or prevention of or interference by any third party with any use of the Property or any part thereof; (iii) any title defect or encumbrance or any eviction from the Land or the Improvements or any part thereof by title paramount or otherwise; (iv) any bankruptcy, insolvency, reorganization, composition, adjustment, dissolution, liquidation or other like proceeding relating to Beneficiary, or any action taken with respect to this Deed of Trust by any trustee or receiver of Beneficiary, or by any court, in any such proceeding; (v) any claim which Trustor has or might have against Beneficiary; (vi) any default or failure on the part of Beneficiary to perform or comply with any of the terms hereof or of any other agreement with Trustor; or (vii) any other occurrence whatsoever, whether similar or dissimilar to the foregoing; whether or not Trustor shall have notice or knowledge of any of the foregoing. Except as expressly provided herein, Trustor waives all rights now or hereafter conferred by statute or otherwise to any abatement, suspension, deferent, diminution or reduction of any sum secured hereby and payable by Trustor. 12 C-SW DEED OF TRUST - 11.22.05.DOC
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5.6 Liens, Encumbrances and Charges. Trustor shall immediately discharge any lien not approved by Beneficiary in writing that has or may attain priority over this Deed of Trust (excepting the lien of the Senior Loan Documents). Subject to the provisions of the Loan Agreement regarding mechanics' liens, Trustor shall pay when due all obligations secured by or reducible to liens and encumbrances which shall now or hereafter encumber or appear to encumber all or any part of the Property or any interest therein, whether senior or subordinate hereto.
5.7 Damages; Insurance and Condemnation Proceeds.
(a) The following (whether now existing or hereafter arising) are all absolutely and irrevocably assigned by Trustor to Beneficiary and, at the request of Beneficiary but, subject to the prior rights, if any, of the Senior Lender under the Senior Loan Documents, shall be paid directly to Beneficiary: (i) all awards of damages and all other compensation payable directly or indırectly by reason of a condemnation or proposed condemnation for public or private use affecting all or any part of, or any interest in, the Property; (i) all other claims and awards for damages to, or decrease in value of, all or any part of, or any interest in, the Property; (iii) all proceeds of any insurance policies, whether or not required by the Beneficiary, payable by reason of any loss sustained to all or any part of the Property; and (iv) all interest which may accrue on any of the foregoing. Subject to applicable law, and without regard to any requirement contained in Section 5.8(a)(iv), Beneficiary may at its discretion apply all or any of the proceeds it receives to its expenses in settling, prosecuting or defending any claim, and may apply the balance to the Secured Obligations in any order, and/or Beneficiary may release all or any part of the proceeds to Trustor upon any conditions Beneficiary may impose. Beneficiary may commence, appear in, defend or prosecute any assigned claim or action and may adjust, compromise, settle and collect all claims and awards assigned to Beneficiary; provided, however, in no event shall Beneficiary be responsible for any failure to collect any claim or award, regardless of the cause of the failure. Trustor hereby authorizes and directs any affected insurance company to make payment of all proceeds directly to Beneficiary. If Trustor receives any such proceeds of insurance resulting from any casualty, Trustor shall promptly pay over such proceeds to Beneficiary.
(b) At its sole option, Beneficiary may permit insurance or condemnation proceeds held by Beneficiary to be used for repair or restoration but may condition such application upon reasonable conditions, including, without limitation: (i) the deposit with Beneficiary of such additional funds which Beneficiary determines are needed to pay all costs of the repair or restoration, (including, without limitation, taxes, financing charges, insurance and rent during the repair period); (il) the establishment of an arrangement for lien releases and disbursement of funds acceptable to Beneficiary (the arrangement contained in the Loan Agreement for obtaining lien releases and disbursing loan funds shall be deemed reasonable with respect to disbursement of insurance or condemnation proceeds); (iii) the delivery to Beneficiary of plans and specifications for the work, a contract for the work signed by a contractor acceptable to Beneficiary, a cost breakdown for the work and a payment and performance bond for the work, all of which shall be acceptable to Beneficiary; and (iv) the delivery to Beneficiary of evidence acceptable to Beneficiary (aa) that after completion of the work, the income from the Property will be sufficient to pay all expenses and debt service for 13 CASW DEED OF TRUST - 11.22.05.DOC
the Property; (bb) of the continuation of Leases acceptable to and required by Beneficiary; (cc) that upon completion of the work, the size, capacity and total value of the Property will be at least as great as it was before the damage or condemnation occurred; (dd) that there has been no material adverse change in the financial condition or credit of Trustor since the date of this Deed of Trust; and (ce) of the satisfaction of any additional conditions that Beneficiary may reasonably establish to protect its security. Trustor hereby acknowledges that the conditions described above are reasonable. (c) Nothing herein contained shall be deemed to excuse Trustor from repairing or maintaining the Property as provided in Section 5.8 hereof or restoring all damage or destruction to the Property, regardless of whether or not there are insurance proceeds available to Trustor or whether any such proceeds are sufficient in amount, and the application or release by Beneficiary of any insurance proceeds shall not cure or waive any Default or notice of Default under this Deed of Trust or invalidate any act done pursuant to such notice.
5.8 Maintenance and Preservation of the Property. Subject to the provisions of the Loan Agreement, Trustor covenants: (i) to keep the Property in good condition and repair; (II) not to remove or demolish the Property or any part thereof, not to alter, restore or add to the Property and not to initiate or acquiesce in any change in any zoning or other land classification which affects the Property without Beneficiary's prior written consent or as provided in the Loan Agreement; (iil) to complete or restore promptly and in good and workmanlike manner the Property, or any part thereof which may be damaged or destroyed, without regard to whether Beneficiary elects to require that insurance proceeds be used to reduce the Secured Obligations as provided herein; (iv) to comply with all laws, ordinances, regulations and standards, and all covenants, conditions, restrictions and equitable servitudes, whether public or private, of every kind and character which affect the Property and pertain to acts committed or conditions existing thereon, including, without limitation, any work, alteration, improvement or demolition mandated by such laws, covenants or requirements; (v) to comply with the requirements of Section 42 of the Internal Revenue Code of 1986, as amended, and all regulations promulgated thereunder and any other federal, state or local laws or regulations related thereto, including, without limitation, with respect to (x) Trustor's organization, business and operations, (y) the operation of the Property and (z) the maintenance of all Tax Credits heretofore or hereafter allocated to Trustor and/or the Property pursuant to said Section 42; (vi) not to commit or permit waste of the Property; (vii) to do all other acts which from the character or use of the Property may be reasonably necessary to maintain and preserve its value; and (vili) not to initiate or acquiesce in any change in any zoning or other land use or legal classification which affects the Property or any part of it without Beneficiary's prior written consent.
5.9 Defense and Notice of Losses, Claims and Actions. At Trustor's sole expense, Trustor shall protect, preserve and defend the Property and title to and right of possession of the Property, the security hereof and the rights and powers of Beneficiary and Trustee hereunder against all adverse claims. Trustor shall appear in and contest any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee and shall pay all costs and expenses, including cost of evidence of title and attorneys' fees, in any such action or proceeding.
Trustor shall give Beneficiary and Trustee prompt notice in writing of the assertion of any claim, of 14 C:ISW DEED OF TRUST - 11.22.05.DOC
the filing of any action or proceeding, of the occurrence of any casualty or damage to the Property, whether or not covered by insurance, and of any condemnation offer or action.
5.10 Acceptance of Trust; Powers and Duties of Trustee. Trustee accepts this trust when this Deed of Trust is recorded. From time to time upon written request of Beneficiary and presentation of this Deed of Trust or a certified copy thereof for endorsement, and without affecting the personal liability of any person for payment of any indebtedness or performance of any obligations secured hereby, Trustee may, without liability therefor and without notice: (1) reconvey all or any part of the Property; (ii) consent to the making of any map or plat thereof; and (iii) join in any grant of easement thereon, any declaration of covenants and restrictions, or any extension agreement or any agreement subordinating the lien or charge of this Deed of Trust. Except as may be required by applicable law, Trustee or Beneficiary may from time to time apply to any court of competent jurisdiction for aid and direction in the execution of the trust hereunder and the enforcement of the rights and remedies available hereunder, and may obtain orders or decrees directing or confirming or approving acts in the execution of said trust and the enforcement of said remedies. Trustee has no obligation to notify any party of any pending sale or any action or proceeding, including, without limitation, actions in which Trustor, Beneficiary or Trustee shall be a party unless held or commenced and maintained by Trustee under this Deed of Trust. Trustee shall not be obligated to perform any act required of it hereunder unless the performance of the act is requested in writing and Trustee is reasonably indemnified and held harmless against loss, cost, liability or expense.
5.11 Compensation; Exculpation; Indemnification.
(a) Trustor shall pay Trustee's fees and reimburse Trustee for expenses in the administration of this trust, including attorneys' fees. Trustor shall pay to Beneficiary reasonable compensation for services rendered concerning this Deed of Trust, including without limit any statement of amounts owing under any Secured Obligation. Beneficiary shall not directly or indirectly be liable to Trustor or any other person as a consequence of (i) the exercise of the rights, remedies or powers granted to Beneficiary in this Deed of Trust; (ii) the failure or refusal of Beneficiary to perform or discharge any obligation or liability of Trustor under any agreement related to the Property or under this Deed of Trust; or (iii) any loss sustained by Trustor or any third party resulting from Beneficiary's failure to lease the Property after a Default (hereinafter defined) or from any other act or omission of Beneficiary in managing the Property after a Default unless the loss is caused by the gross negligence or willful misconduct of Beneficiary and no such liability shall be asserted against or imposed upon Beneficiary, and all such liability is hereby expressly waived and released by Trustor.
(b) Notwithstanding any provision to the contrary, Trustor agrees to indemnify, protect, defend, and hold Trustee and Beneficiary harmless from all losses, damages, liabilities, injuries (including death of person or persons), claims, causes of action, judgments, court costs, attorneys' fees and other legal expenses, cost of evidence of title, cost of evidence of value, and other expenses which either may suffer or incur: (i) by reason of this Deed of Trust; (ii) by reason of the 15 C:SW DEED OF TRUST - 11.22.05.DOC
execution of this Deed of Trust or performance of any act required or permitted hereunder or by law; (iii) as a result of any failure of Trustor to perform Trustor's obligations. The above obligation of Trustor to indemnify, protect, defend, and hold harmless Trustee and Beneficiary shall survive the release and cancellation of the Secured Obligations and the release and reconveyance or partial release and reconveyance of this Deed of Trust and shall apply to any damages or claims for damages whether or not insurance policies shall have been determined to apply. It is understood that the duty of Trustor to indemnify and hold harmless includes the duty to defend as set forth in Section 2778 of the California Civil Code. Acceptance by Trustee or Beneficiary of insurance certificates and endorsements does not relieve Trustor from liability under this indemnification and hold harmless clause.
(c) Trustor shall pay all amounts and indebtedness arising under this Section 5.11 immediately upon demand by Trustee or Beneficiary together with interest thereon from the date the indebtedness arises at the rate of interest of 12% per annum.
5.12 Substitution of Trustees. From time to time, by a writing, signed and acknowledged by Beneficiary and recorded in the Office of the Recorder of the County in which the Property is situated, Beneficiary may appoint another trustee to act in the place and stead of Trustee or any successor. Such writing shall set forth any information required by law. The recordation of such instrument of substitution shall discharge Trustee herein named and shall appoint the new trustee as the trustee hereunder with the same effect as if originally named Trustee herein. A writing recorded pursuant to the provisions of this Section 5.12 shall be conclusive proof of the proper substitution of such new Trustee.
5.13 Due on Sale or Encumbrance. Prior to the recordation by Lender of a Certificate of Completion upon completion of the Project, the Borrower shall not transfer, convey, assign, or lease the whole or any part of the Property or the Improvements thereon without the prior written approval of the Lender. This prohibition shall not apply subsequent to the recordation of the Certificate of Completion with respect to the Improvements upon the Property. This prohibition shall not be deemed to prevent the granting of easements or permits to facilitate the development of the Project, or (i) prohibit the transfer of Borrower's limited partnership interests in any respect; (ii) prohibit the removal and replacement of the Borrower's general partner in accordance with the Borrower's partnership agreement; (iii) prohibit a transfer of the Property or the Improvements to the Borrower's general partner pursuant to the Borrower's partnership agreement as then in effect; or (iv) prohibit a transfer of the Property or the Improvements to any Affiliate of the Borrower's then general partner or the Borrower's then limited partner, so long as any and/or all of the foregoing transferees or assignees expressly and unconditionally assumes all of the duties and obligations of the Borrower and/or any subsequent transferee or assignee under this Agreement to the extend allocable to the portion transferred. Any sale, transfer, conveyance or assignment not made in strict compliance with the foregoing conditions shall constitute a default by the Borrower under this Agreement.
5.14 Releases, Extensions, Modifications and Additional Security. Without notice to or the consent, approval or agreement of any persons or entities having any interest at any time in the 16 C:ISW DEED OF TRUST - 11.22.05.DOC
Property or in any manner obligated under the Secured Obligations (Interested Parties"), Beneficiary may, from time to time, release any person or entity from liability for the payment or performance of any Secured Obligation, take any action or make any agreement extending the maturity or otherwise altering the terms or increasing the amount of any Secured Obligation, or accept additional security or release all or a portion of the Property and other security for the Secured Obligations. None of the foregoing actions shall release or reduce the personal liability of any of said Interested Parties, or release or impair the priority of the lien of this Deed of Trust upon the Property.
5.15 Reconveyance. Upon Beneficiary's written request, and upon surrender to Trustee for cancellation of this Deed of Trust or a certified copy thereof and any note, instrument, or instruments setting forth all obligations secured hereby, Trustee shall reconvey, without warranty, the Property or that portion thereof then held hereunder. To the extent permitted by law, the reconveyance may describe the grantee as "the person or persons legally entitled thereto" and the recitals of any matters or facts in any reconveyance executed hereunder shall be conclusive proof of the truthfulness thereof. Neither Beneficiary nor Trustee shall have any duty to determine the rights of persons claiming to be rightful grantees of any reconveyance. When the Property has been fully reconveyed, the last such reconveyance shall operate as a reassignment of all future rents, issues and profits of the Property to the person or persons legally entitled thereto.
5.16 Subrogation. Beneficiary shall be subrogated to the lien of all encumbrances, whether released of record or not, paid in whole or in part by Beneficiary pursuant to this Deed of Trust or by the proceeds of any loan secured by this Deed of Trust.
5.17 Right of Inspection. Beneficiary, its agents and employees, may enter the Property at any reasonable time for the purpose of inspecting the Property and ascertaining Trustor's compliance with the terms hereof.
ARTICLE 6. DEFAULT PROVISIONS
6.1 Default. For all purposes hereof, the term "Default" shall mean (a) at Beneficiary's option, the failure of Trustor to make any payment of principal or interest on the Note or to pay any other amount due hereunder or under the Note when the same is due and payable, whether at maturity, by acceleration or otherwise; (b) the failure of Trustor to perform any other obligation hereunder, or the failure to be true of any representation or warranty of Trustor contained herein and the continuance of such failure for any grace period, if any, allowed in the Loan Agreement for such failure, or (c) the existence of any Default as defined in the Loan Agreement or other Loan Documents.
6.2 Rights and Remedies. At any time after Default, Beneficiary and Trustee shall each have all the following rights and remedies:
17 C:ISW DEED OF TRUST - 11.22.05.DOC
(a) With or without notice, to declare all Secured Obligations immediately due and payable;
(b) With or without notice, and without releasing Trustor from any Secured Obligation, and without becoming a mortgagee in possession, to cure any breach or Default of Trustor and, in connection therewith, to enter upon the Property and do such acts and things as Beneficiary or Trustee deem necessary or desirable to protect the security hereof, including, without limitation: (i) 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 under this Deed of Trust; (ii) to pay, purchase, contest or compromise any encumbrance, charge, lien or claim of lien; (iii) to obtain insurance; (iv) to pay any premiums or charges with respect to insurance required to be carried under this Deed of Trust; or (v) to employ counsel, accountants, contractors and other appropriate persons; (c) To commence and maintain an action or actions in any court of competent jurisdiction to foreclose this instrument as a mortgage or to obtain specific enforcement of the covenants of Trustor hereunder, and Trustor agrees that such covenants shall be specifically enforceable by injunction or any other appropriate equitable remedy and that for the purposes of any suit brought under this subsection, Trustor waives the defense of laches and any applicable statute of limitations;
(d) To apply to a court of competent jurisdiction for and obtain appointment of a receiver of the Property as a matter of strict right and without regard to the adequacy of the security for the repayment of the Secured Obligations, the existence of a declaration that the Secured Obligations are immediately due and payable, or the filing of a notice of default, and Trustor hereby consents to such appointment;
(e) Either in person or by agent, with or without bringing any action or proceeding, or by a receiver appointed by a court and without regard to the adequacy of its security, to enter upon, possess, manage and operate the Property or any part thereof, to take and possess all documents, books, records, papers and accounts of Trustor or the then owner of the Property, to make, terminate, enforce or modify Leases of the Property upon such terms and conditions as Beneficiary deems proper, to make repairs, alterations and improvements to the Property as necessary, in Trustee's or Beneficiary's sole judgment, to protect or enhance the security hereof; (f) To execute a written notice of such Default and of its election to cause the Property to be sold to satisfy the Secured Obligations. As a condition precedent to any such sale, Trustee shall give and record such notice as the law then requires. When the minimum period of time required by law after such notice has elapsed, Trustee, without notice to or demand upon Trustor except as required by law, shall sell the Property at the time and place of sale fixed by it in the notice of sale, at one or several sales, either as a whole or in separate parcels and in such manner and order, all as Beneficiary in its sole discretion may determine, at public auction to the highest bidder for cash, in lawful money of the United States, payable at time of sale. Neither Trustor nor any other person or entity other than Beneficiary shall have the right to direct the order in which the 18 C:ISW DEED OF TRUST - 11.22.05.D0C
Property is sold. Subject to requirements and limits imposed by law, Trustee may from time to time postpone sale of all or any portion of the Property by public announcement at such time and place of sale. Trustee shall deliver to the purchaser at such sale a deed conveying the Property or portion thereof so sold, but without any covenant or warranty, express or implied. The recitals in the deed of any matters or facts shall be conclusive proof of the truthfulness thereof. Any person, including Trustee, Trustor or Beneficiary may purchase at the sale; (g) To resort to and realize upon the security hereunder and any other security now or later held by Beneficiary concurrently or successively and in one or several consolidated or independent judicial actions or lawfully taken non-judicial proceedings, or both, and to apply the proceeds received upon the Secured Obligations all in such order and manner as Trustee and Beneficiary, or either of them, determine in their sole discretion; (h) Upon sale of the Property at any judicial or non-judicial foreclosure, Beneficiary may credit bid (as determined by Beneficiary in its sole and absolute discretion) all or any portion of the Secured Obligations. In determining such credit bid, Beneficiary may, but is not obligated to, take into account all or any of the following: (i) appraisals of the Property as such appraisals may be discounted or adjusted by Beneficiary in its sole and absolute underwriting discretion; (ii) expenses and costs incurred by Beneficiary with respect to the Property prior to foreclosure; (iii) expenses and costs which Beneficiary anticipates will be incurred with respect to the Property after foreclosure, but prior to resale, including, without limitation, costs of structural reports and other due diligence, costs to carry the Property prior to resale, costs of resale (e.g. commissions, attorneys' fees, and taxes), costs of any hazardous materials clean-up and monitoring, costs of deferred maintenance, repair, refurbishment and retrofit, costs of defending or settling litigation affecting the Property, and lost opportunity costs (if any), including the time value of money during any anticipated holding period by Beneficiary; (iv) declining trends in real property values generally and with respect to properties similar to the Property; (v) anticipated discounts upon resale of the Property as a distressed or foreclosed property; (vi) the fact of additional collateral (if any), for the Secured Obligations; and (vii) such other factors or matters that Beneficiary (in its sole and absolute discretion) deems appropriate. In regard to the above, Trustor acknowledges and agrees that: (w) Beneficiary is not required to use any or all of the foregoing factors to determine the amount of its credit bid; (x) this Section does not impose upon Beneficiary any additional obligations that are not imposed by law at the time the credit bid is made; (y) the amount of Beneficiary's credit bid need not have any relation to any loan-to-value ratios specified in the Loan Documents or previously discussed between Trustor and Beneficiary; and (z) Beneficiary's credit bid may be (at Beneficiary's sole and absolute discretion) higher or lower than any appraised value of the Property.
6.3 Remedies Not Exclusive. Trustee and Beneficiary, and each of them, shall be entitled to enforce payment and performance of any indebtedness or obligations secured hereby and to exercise all rights and powers under this Deed of Trust or under any of the Loan Documents or other agreement or any laws now or hereafter in force, notwithstanding some or all of the said indebtedness and obligations secured hereby may now or hereafter be otherwise secured, whether by mortgage, deed of trust, pledge, lien, assignment or otherwise. Neither the acceptance of this Deed of 19 C:ISW DEED OF TRUST - 11.22.05.DOC
Trust nor its enforcement whether by court action or pursuant to the power of sale or other powers herein contained, shall prejudice or in any manner affect Trustee's or Beneficiary's right to realize upon or enforce any other security now or hereafter held by Trustee or Beneficiary, it being agreed that Trustee and Beneficiary, and each of them, shall be entitled to enforce this Deed of Trust and any other security now or hereafter held by Beneficiary or Trustee in such order and manner as they or either of them may in their absolute discretion determine. No remedy herein conferred upon or reserved to Trustee or Beneficiary is intended to be exclusive of any other remedy herein or by law provided or permitted, but each shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity or by statute. Every power or remedy given by any of the Loan Documents to Trustee or Beneficiary or to which either of them may be otherwise entitled, may be exercised, concurrently or independently, from time to time and as often as may be deemed expedient by Trustee or Beneficiary and either of them may pursue inconsistent remedies.
6.4 Application of Foreclosure Sale Proceeds. After deducting all costs, fees and expenses of Trustee, and of this trust, including, without limitation, cost of evidence of title and attorneys' fees in connection with sale and costs and expenses of sale and of any judicial proceeding wherein such sale may be made, Trustee shall apply all proceeds of any foreclosure sale: (i) to payment of all sums expended by Beneficiary under the terms hereof and not then repaid, with accrued interest at the rate of interest at 12% per annum; (ii) to payment of all other Secured Obligations; and (iii) the remainder, if any, to the person or persons legally entitled thereto.
6.5 Application of Other Sums. All sums received by Beneficiary under Section 6.2 or Section 3.2, less all costs and expenses incurred by Beneficiary or any receiver under Section 6.2 or Section 3.2, including, without limitation, attorneys' fees, may be applied in payment of the Secured Obligations in such order as Beneficiary shall determine in its sole discretion; provided, however, Beneficiary shall have no liability for funds not actually received by Beneficiary.
6.6 No Cure or Waiver. Neither Beneficiary's nor Trustee's nor any receiver's entry upon and taking possession of all or any part of the Property, nor any collection of rents, issues, profits, insurance proceeds, condemnation proceeds or damages, other security or proceeds of other security, or other sums, nor the application of any collected sum to any Secured Obligation, nor the exercise or failure to exercise of any other right or remedy by Beneficiary or Trustee or any receiver shall cure or waive any breach, Default or notice of default under this Deed of Trust, or nullify the effect of any notice of default or sale (unless all Secured Obligations then due have been paid and performed and Trustor has cured all other defaults), or impair the status of the security, or prejudice Beneficiary or Trustee in the exercise of any right or remedy, or be construed as an affirmation by Beneficiary of any tenancy, lease or option or a subordination of the lien of this Deed of Trust.
6.7 Payment of Costs, Expenses and Attorney's Fees. Trustor agrees to pay to Beneficiary immediately and without demand all costs and expenses incurred by Trustee and Beneficiary pursuant to subsections (a) through (g) inclusive of Section 6.2 (including, without limitation, court costs and attorneys' fees, whether incurred in litigation or not) with interest from the 20 C:ISW DEED OF TRUST - 11.22.05.D0C
date of expenditure until said sums have been paid at the rate of interest at 12% per annum then applicable to the principal balance of the Note as specified therein. In addition, Trustor shall pay to Trustee all Trustee's fees hereunder and shall reimburse Trustee for all expenses incurred in the administration of this trust, including, without limitation, any attorneys' fees.
6.8 Power to File Notices and Cure Defaults. Trustor hereby irrevocably appoints Beneficiary and its successors and assigns, as its attorney-in-fact, which agency is coupled with an interest, (a) to execute and/or record any notices of completion, cessation of labor, or any other notices that Beneficiary deems appropriate to protect Beneficiary's interest, (b) upon the issuance of a deed pursuant to the foreclosure of this Deed of Trust or the delivery of a deed in lieu of foreclosure, to execute all instruments of assignment or further assurance with respect to the Leases and Rents in favor of the grantee of any such deed, as may be necessary or desirable for such purpose, (c) to prepare, execute and file or record financing statements, continuation statements, applications for registration and like papers necessary to create, perfect or preserve Beneficiary's security interests and rights in or to any of the Collateral, and (d) upon the occurrence of an event, act or omission which, with notice or passage of time or both, would constitute a Default, Beneficiary may perform any obligation of Trustor hereunder; provided, however, that: (i) Beneficiary as such attorney-in-fact shall only be accountable for such funds as are actually received by Beneficiary; and (ii) Beneficiary shall not be liable to Trustor or any other person or entity for any failure to act under this Section.
6.9 Limitation on Partners' Liability. Beneficiary's recovery against any partner of Trustor under the Loan Documents shall be limited solely to the collateral given to Beneficiary as security for Trustor's performance under the Loan Documents and to the general assets of Trustor itself. Such recovery shall not be a lien, or the basis of a claim of lien or levy of execution, against the general assets of any general or limited partner of Trustor. Notwithstanding the foregoing, Trustor, any general partner of Trustor and the general assets of any general partner of Trustor shall be fully liable to Beneficiary to the same extent that Trustor would be liable absent the foregoing limitation of this Section for: (a) fraud or willful misrepresentation on the part of Trustor or such partner; (b) waste; (c) failure of such partner to pay any income or other taxes, assessments or other charges attributable to such partner which can create liens on any portion of the Property (to the full extent of any such taxes, assessments or other charges); (d) the amount of any money or value of any property received by such partner as a distribution of earnings or income from the Property if such distribution was prohibited under the terms of the Loan Agreement (to the full extent of such distribution); (e) any breach by Trustor of any covenant under Article 7, entitled Hazardous Materials of the Loan Agreement, any representation or warranty of Trustor under such Article proving to have been untrue when made, or the presence of any significant Hazardous Materials in, on or about the Property which are discovered subsequent to the Effective Date; or (f) any obligation arising from the indemnity set forth in Section 11.10 of the Loan Agreement (except for payment of principal and interest on the Note). In addition, the limitations hereof shall not be deemed to limit: (i) any right Beneficiary might otherwise have to obtain injunctive relief against Trustor, any general partner of Trustor or any other person or entity; (il) any suit, action or proceeding (including without limitation exercise of the power of sale under or the filing of an action for judicial foreclosure of the Deed of 21 C:ISW DEED OF TRUST - 11.22.05.DOC
Trust), in connection with the preservation, enforcement or foreclosure of the liens, mortgages, assignments and security interests now or at any time hereafter securing the payment and performance of all obligations under the Loan Agreement or any of the Loan Documents; or (iii) the collection of amounts which may become owing or payable under or on account of insurance, condemnation awards or damages or other public actions or surety bonds maintained or provided by Trustor; provided, however, that the assertion by Beneficiary of any such right, suit, action or collection of amounts shall not result in a monetary claim upon the general assets of any general or limited partner of Trustor except as otherwise provided herein.
ARTICLE 7. MISCELLANEOUS PROVISIONS
7.1 Additional Provisions. The Loan Documents contain or incorporate by reference the entire agreement of the parties with respect to matters contemplated herein and supersede all prior negotiations. The Loan Documents grant further rights to Beneficiary and contain further agreements and affirmative and negative covenants by Trustor which apply to this Deed of Trust and to the Property and such further rights and agreements are incorporated herein by this reference.
7.2 Financial Statements. Trustor shall deliver to Beneficiary copies of such financial statements, balance sheets, profit and loss statements, operating statements, income and expense statements and other financial information in reasonable detail and at the times required by the Loan Agreement. All such statements shall be prepared in accordance with the requirements of the Loan Agreement and Beneficiary shall have the right to audit and inspect all books and records relating thereto.
Trade Names. At the request of Beneficiary, Trustor shall execute a certificate in form satisfactory to Beneficiary listing the trade names or fictitious business names under which Trustor intends to operate the Property or any business located thereon and representing and warranting that Trustor does business under no other trade names or fictitious business names with respect to the Property. Trustor shall immediately notify Beneficiary in writing of any change in said trade names or fictitious business names, and will, upon request of Beneficiary, execute any additional financing statements and other certificates necessary to reflect the change in trade names or fictitious business names.
7.4 Merger. No merger shall occur as a result of Beneficiary's acquiring any other estate in, or any other lien on, the Property unless Beneficiary consents to a merger in writing.
Obligations of Trustor, Joint and Several. If more than one person has executed this Deed of Trust as "Trustor", the obligations of all such persons hereunder shall be joint and several.
7.6 Trustor Waiver of Rights. Trustor waives to the extent permitted by law, (i) the benefit of all laws now existing or that may hereafter be enacted providing for any appraisement 22 C:ISW DEED OF TRUST - 11.22.05.DOC
before sale of any portion of the Property, and, (ii) all rights of redemption, valuation, appraisement, stay of execution, notice of election to mature or declare due the whole of the secured indebtedness and marshaling in the event of foreclosure of the liens hereby created, and (111) all rights and remedies which Trustor may have or be able to assert by reason of the laws of the State of California pertaining to the rights and remedies of sureties; provided, however, nothing contained herein shall be deemed to be a waiver of Trustor's rights under Section 2924c of the California Civil Code.
7.7 Waiver of Marshalling Rights. Trustor, for itself and for all parties claiming through or under Trustor, and for all parties who may acquire a lien on or interest in the Property, hereby waives all rights to have the Property and/or any other property, including, without limitation, the Collateral, which is now or later may be security for any Secured Obligation ("Other Property") marshalled upon any foreclosure of this Deed of Trust or on a foreclosure of any other security for any of the Secured Obligations. Beneficiary shall have the right to sell, and any court in which foreclosure proceedings may be brought shall have the right to order a sale of, the Property and any or all of the Collateral or Other Property as a whole or in separate parcels, in any order that Beneficiary may designate.
7.8 Statements by Trustor. Trustor and Beneficiary shall, at any time and from time to time upon not less than twenty (20) days prior written notice from the other, execute, acknowledge and deliver to the requesting party a statement (i) stating the unpaid principal of and interest on the Note and any other amounts secured by this Deed of Trust and stating whether any offset or defense exists against such principal and interest; (ii) certifying that this Deed of Trust and the other Secured Obligations are unmodified and in full force and effect or, if modified, stating the nature thereof and certifying that each Secured Obligation, as so modified, is in full force and effect and the date to which principal, interest and other sums secured hereby have been paid and (iii) acknowledging that there are no uncured Default under this Deed of Trust or any other Secured Obligation or specifying such Defaults, if any are claimed. Any such certificate may be conclusively relied upon by the party requesting it and any prospective purchaser or assignee of any Secured Obligation. Either party's failure to deliver such certificate within such time shall be conclusive upon such party that (i) the Secured Obligations are in full force and effect, without modification, and (ii) there are no uncured Defaults hereunder.
7.9 Rules of Construction. When the identity of the parties or other circumstances make it appropriate the masculine gender includes the feminine and/or neuter, and the singular number includes the plural. The term "Property" means all and any part of the Property and any interest in the Property.
7.10 Further Assurances. Trustor shall promptly make, execute, acknowledge and deliver, in form and substance reasonably satisfactory to Beneficiary, all such additional instruments, agreements and other documents, and Trustor shall do all other acts as may at any time hereafter be requested by Beneficiary, to effectuate and carry out the purposes of this Deed of Trust and each of the Secured Obligations.
23 C: LSW DEED OF TRUST - 11.22.05.DOC
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Successors in Interest. The terms, covenants, and conditions herein contained shall be binding upon and inure to the benefit of the heirs, successors and assigns of the parties hereto; provided, however, that this Section 7.11 does not waive or modify the provisions of Section 5.13.
7.12 Execution in Counterparts. This Deed of Trust may be executed in any number of counterparts, each of which, when executed and delivered to Beneficiary, will be deemed to be an original and all of which, taken together, will be deemed to be one and the same instrument.
7.13 Governing Law. This Deed of Trust shall be construed in accordance with the laws of the State of California, except to the extent that Federal laws preempt the laws of the State of California, and any action brought relating to this Deed of Trust shall be held exclusively in a state court in the County of Merced
7.14 Incorporation. All Exhibits attached hereto are incorporated into this Deed of Trust by this reference.
7.15 Notices. All notices or other communications required or permitted to be given pursuant to the provisions of this Deed of Trust shall be in writing and shall be considered as properly given if delivered personally or sent by first class U.S. mail, postage prepaid, except that notice of a Default may be sent by certified mail, return receipt requested, o by Overnight Express Mail or by commercial courier service, charges prepaid. Notices so sent shall be deemed given when actually received at the addresses set forth below, except that notices sent by mail shall be deemed received three (3) calendar days following the date of mailing. For purposes of notice, the addresses of the parties shall be:
24 C:ISW DEED OF TRUST - 11.22.05.DOC
Trustor:
SUNNY VIEW OF MERCED, L.P.
320 Golden Shore Drive, Suite 200
Long Beach, California 90802-4217
Attn: Brian Gentner, Esq.
Fax No. (562) 902-0918
With copy to (which shall not constitute notice to Trustor):
Multi-Housing Investments, LLC
320 Golden Shore, Suite 200
Long Beach, CA 90802
Attn: Jeffrey Weiss
Fax No.: (562) 256-2003
Beneficiary:
City of Merced, a California Charter Municipal Corporation 678 West 18 Street
Merced, California 95340
Any party shall have the right to change its address for notice hereunder to any other location within the continental United States by the giving of thirty (30) days notice to the other party in the manner set forth hereinabove. Trustor shall forward to Beneficiary, without delay, any notices, letters or other communications delivered to the Property or to Trustor naming Beneficiary, "Lender" or the "Construction Lender" or any similar designation as addressee, or which could reasonably be deemed to affect the construction of the Improvements or the ability of Trustor to perform its obligations to Beneficiary under the Note or the Loan Agreement.
7.16 Authority to Execute. The person or persons executing this Deed of Trust warrants and represents that he/she/they has/have the authority to execute this Deed of Trust on behalf of their entity and has/have the authority to bind their party to the performance of its obligations hereunder. [SIGNATURE ON NEXT PAGE]
25 C:ISW DEED OF TRUST - 11.22.05.DOC
IN WITNESS WHEREOF, Trustor has executed this Deed of Trust as of the day and year set forth above.
"TRUSTOR"
SUNNY VIEW OF MERCED, L.P.,
A California Limited Partnership
By: Western Community Housing, Inc,
California Nonprofit Corporation,
its General Partner
By: _ 925
Name: Graham pigy-Jones
Title: President
STATE OF CALIFORNIA
COUNTY OF ORANGE
→ 2005, before me, SHELLEY WARNER, Notary Public,
personally appeared GRAHAM ESPLEy-JoNES, personally known to me or proved to me on the asis of satisfactory evidence to be the person whose name is subscribed to the within instrument and knowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument, the person, or the entity upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
SHELLEY WARNER
Commission # 1350180
Notary Public - California
Orange Councy
My Comm. Expires Apr 8, 200(
: '
GOVERNMENT CODE 27361.7
I CERTIFY UNDER PENALTY OF PERJURY THAT THE
NOTARY SEAL ON THE DOCUMENT IO WHICH THIS
STATEMENT IS ATTACHED READ AS FOLLOWS:
NAME OF NOTARY: — Shelley Warner
DATE COMMISSION EXPIRES: 4-8-06
COMMISSION NUMBER: 1350180
PLACE OF EXECUTION: Orange country
EXECUTION DATE: 12-14-05
SIGNATURE: Avali Gonza
FIRM NAME (IF APPLICABLE): City of Merced
•
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EXHIBIT A
LEGAL DESCRIPTION
Parcel 2, of Parcel Map titled City of Merced Lot Split #03-06, recorded on October 29, 2003 in Book 94 of Parcel Maps, at Pages 33 & 34, as Document No. 2003070795 in the Merced County Recorder's Office, State of California.
Assessors Parcel No: 035-010-062
CISW Deed of Trust - 11.22.05.doc