1 Attachment “F”
Draft
COMMUNITY HOME INVESTMENT PARTNERSHIP
(Standard Community Housing Development Organization (CHDO Agreement))
AGREEMENT BETWEEN
THE CITY OF VISALIA
AND SELF-HELP ENTERPRISES
THIS AGREEMENT , is entered into this 1st day of ______, 2025 (the “Effective Date”) by and between the City of Visalia, (hereafter “City”) and Self-Help Enterprise (“SHE”), a Community Housing Development Organization, (hereafter “CHDO”), as follows:
RECITALS
WHEREAS, the City of Visalia (hereafter “City”) has entered into an agreement to receive funds under the HOME Investment Partnership Program (hereinafter called the “HOME” Program) from the U. S. Department (hereinafter called “HUD”); and
WHEREAS, the City has set aside (reserved) a portion of its HOME program funds for use by Community Housing Development Organization s (CHDO) in accordance with the National Affordable Housing Act of 1990 , as amended (hereinafter the “Act”); and
WHEREAS, City desires to have CHDO perform functions for the City as described herein;
WHEREAS, CHDO is a California, public benefit, non -profit corporation, established for the purpose of assisting in the development, expansion or preservation of affordable housing in the City of Visalia; and
WHEREAS, CHDO warrants and represents that CHDO, through this Agreement, will be engaged in the development, sponsorship or ownership of housing that is designed to assist low-income households as defined by the U.S. Department of Housing and Urban Development (“HUD”) in the City of Visalia; and
WHEREAS, CHDO warrants that CHDO has adopted articles of incorporation, by-laws of the organization, board resolution or charter which specifically states CHDO’s commitment to the development of affordable housing; and
WHEREAS, CHDO warrants that CHDO is not controlled by a for -profit interest, and has its own staff to carry out the intent of the HOME Investment Partnership Program (“HOME Program”), in conformance with 24 CFR Part 92; and
WHEREAS, CHDO warrants that its Board structure reflects the affordable housing interests in the City of Visalia, otherwise meets the low-income requirements of
2 the HOME Program, has at a minimum one third of its Board members consisting of either residents of low-income neighborhoods in Visalia, low income residents, or elected representatives of low -income neighborhood organizations, and has by -laws or a board resolution describing the process for obtaining input from low -income neighborhoods or residents, and not more than one third of its Board members are from the public sector; and
WHEREAS, CHDO is considered an owner of a property when it holds valid legal title or has a long-term leasehold interest (99 year minimum), and CHDO may be an owner with one or more individuals, corporations, partne rships, or other legal entities; and
WHEREAS, CHDO warrants that CHDO may be sole owner and have an other entity act as developer; and
WHEREAS, CHDO warrants that CHDO can also be the owner and developer of its own project; and
WHEREAS, CHDO may own a property in partnership with either a majority or minority interest, however, CHDO, in partnership with a solely owned for profit or non - profit subsidiary, must be the managing general partner with effective control (in decision making authority) of the project.
NOW, THEREFORE. in consideration of the mutual covenants and obligatio ns contained herein, including the A ttachments, and subject to the terms herein stated, the parties hereto understand and agree as follows:
1. Term of Contract. CHDO shall serve City on a project-by-project basis, pursuant to a separate written agreement for each project. This Agreement shall remain in effect until June 30, 20 28, and shall continue in full force and effect so long thereafter as City and CHDO have a separate agreement for a HOME funded project. Upon expiration or termination of all HOIME funded project agreements between City and CHDO, this Agreement shall also expire and terminate .
Funding of any projects through separate agreements or services beyond the term of this Agreement, by any new contract or amendment or extension of this Agreement, have not been authorized and will depend upon the satisfactory performance of this Agreement by CHDO and upon the availability to City of additional funds allocated for such purposes; and neither City nor any employee of City has made any promise or commitment, expressed or implied, that any additional funds will be paid or made available to CHDO for the purpose of this Agreement over and above the funds expressly allocated under the terms of this Agreement. This Agreement shall inure to the benefit of and be binding upon the parties hereto, their heirs, successors, survivors, and assigns.
2. Consolidated Plan Goals . CHDO shall, for the term of this contract, use its best efforts to assist City in implementing the objectives of the HUD Consolidated
3 Plan pertaining to the community development and public service needs of low - income households in the City of Visalia.
The CHDO shall provide the City with information necessary for it to complete any and all compliance reports required by HUD.
3. Reporting. CHDO shall, not less than monthly, report to City, in writing, the actions taken by CHDO toward implementation of the above policies.
CHDO shall provide an annual audit report performed in compliance with OMB Circular A-133.
4. Provision of Services and Programs . CHDO shall work with City to implement additional goals or policies of City related to affordable housing in the Visalia community. Specifically, CHDO shall provide the services and programs in the City of Visalia as shown on Exhibit A to this Agreement. CHDO shall be responsible for meeting all HOME affordability requirements. The City will require repayment of any HOME funds expended in the event HOME affordability requirements are not met. CHDO further agrees to meet all required HOME and/or CDBG project requirements, including documentation of incomes, gender, ethnicity, and sizes of households benefiting from the expenditure of HOME and/or CDBG funds, the per unit amount of HOME dollars invested, maximum and minimum funding requirements, housing quality standards requirements, affirmative marketing requirements, and record keeping requirements. Recordkeeping requirements shall include records for each household assisted, value of property, purchase price and rehabilitation cost, if any. CHDO agrees to monitor all HOME and/or CDBG -funded projects at least monthly to determine on -going compliance with HOME and/or CDBG regulations on the part of recipients of HOME and/or CDBG-funded projects.
5. Payment. City agrees to loan to CHDO funds for purposes consistent with the authorized uses for HOME funds, for the costs incurred by CHDO consistent with the provisions of this Agreement, any project related agreements, and based on available funding , for the programs and services identified in Exhibit “A”.
CHDO agrees to execute a Promissory Note in a form substantially similar to the Promissory Note attached hereto as Exhibit “B ,” and Deed of Trust in a form substantially similar to the Deed of Trust attached hereto as Exhibit “B ,” evidencing and securing loan(s). CHDO may request disbursement of funds only when funds are needed for payment of eligible costs as evidenced by submission of invoices, receipts, or other documents satisfactory to the City.
6. Use of Funds . Use of funds received pursuant to this Agreement shall be in accordance with the requirements of Title II of the Cranston -Gonzalez National Affordable Housing Act of 1990, 24 CFR Part 92, and other regulations governing the HOME Program, and any amendments or policy revisions thereto which shall become effective during the term of this Agreement. A copy of said
4 regulations is incorporated by reference. In addition, CHDO agrees to comply with other applicable laws, including those referred to and incorporated herein.
The CHDO shall repay its award of HOME funds in full to the City from proceeds and/or other project income. The City may waive repayment of the loan in part or in whole, if there are impediments to project development that the City determines are reasonably beyond the control of the CHDO on a case -by-case basis.
7. Program Income. Program income derived from a project, if any, shall revert to City for use in the HOME Program. Program Income is defined at 24 CFR 92.2.
This provision shall survive termination or expiration of this Agreement.
8. Disbursement. The CHDO shall request disbursement of HOME Program funds only at the time funds are needed to pay eligible costs and shall execute with City a project specific agreement memorializing the terms and conditions for same .
Requested funds are limited to the amount needed to cover these costs.
Program Income must be disbursed before requesting grant funds from the City.
For reimbursement of indirect costs, the CHDO shall have on file a cost allocation plan approved by the City.
The sum total of the CHDO reimbursement requests during a given year shall not exceed the amount of the agreed upon annual budget appearing in Exhibit “A”, or, if an amendment to the budget is made, the agreed upon amended budget.
The CHDO shall maintain, submit and make available, to the City, when requested, support documentation with all requests for payment/reimbursement.
9. Method and Place of Giving Notice, Submitting Bills, and Making Payments . All notices, bills, and payments shall be made in writing and may be given by personal delivery or by mail. Notices, bills, and payments sent by mail should be addressed as follows:
City: The City of Visalia
Attention: Housing Division
707 W. Acequia Avenue
Visalia, CA 93291
CHDO: Self Help Enterprises
8445 W. Elowin Ct.
Visalia, CA 93291
and when so addressed, shall be deemed mailed upon deposit in the United States Mail, postage prepaid. In all instances, notices, bills, and payments shall be
5 deemed given at the time of actual delivery. Changes may be made in the names and addresses of the person to whom notices, bills and payments are to be given by giving notice pursuant to this paragraph.
10. Assignment/Delegation. Except as provided above, neither party hereto shall assign, sublet, or transfer any interest in or duty under, this Agreement without written consent of the other and no assignment shall be of any force or effect whatsoever unless and until the other party shall have so consented.
11. Subcontracts. CHDO shall cause all of the provisions of this Agreement in its entirety to be included in and made a part of any subcontract executed in the performance of this Agreement. CHDO shall monitor all subcontracted services on a regular basis to ensure contract compliance. CHDO shall undertake to ensure that all subcontracts let in the performance of this Agreement are awarded on a fair and open competition basis. Executed copies of all subcontracts shall be forwarded to City along with a summary description of the selection process.
12. Inspection and Audit. CHDO agrees that City of Visalia, the U.S. Department of Housing and Urban Development (“HUD”), the Auditor General, the Comptroller General of the United States, or any of their duly authorized representatives shall have the right to inspect and/or audit any books, documents, papers, and records of CHDO which are directly pertinent to the services performed under this Agreement. Records for each grant year shall be retained for a period of five (5) years after the final HUD audit for that grant year. Where a period of affordability applies, records shall be retained for 3 years after the affordability period ends. Records covering displacement and acquisition shall be retained for three years after the date persons were displaced or three years from when the final acquisition payment is received, whichever is latest. City may inspect all applicable records and may cause to be audited invoices and supporting data relative to the funds paid by City to CHDO.
13. Monitoring. The City shall evaluate activities and monitor the programs and expenditures of CHDO at least annually to determine compliance with the provisions of this Agreement.
14. Records. The CHDO shall maintain and make available to the City of Visalia, HUD, Auditor General, or any of their duly authorized representatives, such records and accounts, including property, personnel, and financial records, the City and /or State and Federal Agencies, deem necessary to assure a proper accounting for all HOME Program funds, on a monthly, quarterly, and annual basis.
15. Insurance and Hold Harmless . CHDO shall carry workers’ compensation insurance in accordance with workers compensation laws of the State of California. CHDO will indemnify City, its officials and employees against and hold them harmless from any and all liability for damages on account of injury to
6 persons or damage to property resulting from or arising out of the performance by CHDO of this Agreement and reimburse City, its officials and employees for all costs, expenses and losses incurred by them in consequence of any claims, demands or causes of action which may be brought against them arising out of the performance by CHDO of this Agreement. CHDO shall furnish City with a Certificate of Insurance with combined single limit of at least $1,000,000 for bodily injuries and property damages on each occurrence. The Certificate of Insurance shall state that the contractual liability assumed under this Agreement is covered and shall provide that ten (10) days notice of cancellation or reduction in coverage shall be given to City. Certificates of said coverage shall be filed with City before any work commences.
The City shall not be liable for any and all claims, actions, suits, charges and judgments whatsoever arising out of the performance or nonperformance of the Agreement by the CHDO, its employees, officers, or agents.
The CHDO shall hold harmless, defend, and indemnify the City, its officers, agents, and employees from all such claims, actions, suits, charges, and judgments under this Agreement, including actions resulting from the use or disbursement of the HOME funds.
16. Termination. This Agreement may be terminated by either party for cause by giving thirty (30) days prior written notice to the other. Any funds advanced by City to CHDO and not expended by CHDO shall be returned to City within thirty (30) days after termination of this Agreement. Any funds due CHDO will be forwarded by City to CHDO. City expressly reserves the right to demand of and take actions to collect from CHDO the repayment to City of any funds disbursed to CHDO under this Agreement, which in the judgment of City were not expended in accordance with the terms of this Agreement. CHDO agrees to promptly refund any such funds upon demand.
City may terminate this Agreement at any time if it determines that one or more of the following conditions exist:
a. An illegal or improper use of funds by CHDO
b. CHDO fails to comply with any term or condition of this Agreement. c. CHDO improperly performs any of the services to be performed pursuant to this Agreement.
Upon receipt of notice from City that one or more of the above conditions exist, CHDO shall prepare and submit to City within thirty (30) days a proposal for the correction of all such conditions. In the event CHDO fails to submit such a proposal or otherwise fails to properly perform this Agreement after notification as hereinabove set forth, City may serve CHDO with written notice of termination of this Agreement. In the event of such termination, City shall be liable only for allowable services render ed
7 prior to such termination, but in no event shall City be liable for any services that are not performed in accordance with the terms of this Agreement.
17. Federal Funding. This Agreement is entered into in reliance on representation of the Federal Government that the HOME Program will continue to be funded.
Notwithstanding any other provision of this Agreement, City retains the right in its sole discretion and without notice to terminate or reduce the amount payable to CHDO under this Agreement in the event that the Federal Government does not fund the HOME Program in the amount projected at the time this Agreement is executed.
18. Affirmative Marketing . Affirmative marketing steps shall consist of actions to provide information and otherwise attract eligible persons in the housing market to the available housing without regard to race, color, national origin, sex, religion, familial status, or disability.
19. Civil Rights Act. During the performance of this Agreement, the CHDO assures that no otherwise qualified person shall be excluded from participation or employment, denied program benefits, or be subjected to discrimination based on race, color, national origin, sex, handicap, under any program or activity funded by this Agreement, as required by Title VI of the Civil Rights Act of 1964, Title I of the Housing and Community Development Act of 1974, as amended, and the Age Discrimination Act of 1975, and all implementing regulations.
20. Section 3 Requirements. The work to be performed under this Agreement is on a project-by-project basis, financed under a program providing direct federal financial assistance from the Department of Housing and Urban Development and is subject to the requirements of Section 3 of the Housing and Urban Development Act of 1968, as amended by the Housing and Community Development Act of 1992. The purpose of Section 3 is to ensure that economic opportunities, most importantly employment, generated by certain HUD financial assistance shall be directed to low - and very low -income persons, particularly those who are recipients of government assistance for housing or residents of the community in which the Federal assistance is spent, per 24 CFR Part 75.
The parties to this Agreement will comply with the provisions of said Section 3 and the regulations issued pursuant thereto by the Secretary of Housing and Urban Development set forth in 24 CFR Part 75, and all applicable rules and orders of the Department of Housing and Community Development issued thereunder prior to the execution of this Agreement. The parties to this Agreement certify and agree that they are under no contractual or other disability which would prevent them from complying with these requirements.
CHDO will send to each labor organization or representative of workers with which it has a collective bargaining agreement or other contract or understanding, if any, a notice advertising to the said labor organization or worker’s
8 representative of its commitments under this Section 3 clause and shall post copies of the notice in conspicuous places available to employees and applicants for employment or training.
CHDO will include these Section 3 clauses in every contract and subcontract for work in connection with the project and will, at the direction of the State or HUD, take appropriate action pursuant to the contract upon a finding that any Contractor or subcontractor is in violation of regulations issued by the Secretary of Housing and Urban Development, 24 CFR Part 75 and will not let any contract unless the Contractor or subcontractor has first provided it with a preliminary statement of ability to comply with the requirements of these regulations.
Compliance with the provision of Section 3, the regulations set forth in 24 CFR Part 75, and all applicable rules and orders of the Department issued thereunder prior to the execution of the Agreement shall be a condition of the federal financial assistance provided to the project, binding upon CHDO, its successors, and assigns. Failure to fulfill these requirements shall subject CHDO, its contractors and subcontractors, its successors, and assigns to those sanctions specified by the grant or contract through which federal assistance is provided, and to such sanctions as are specified by 24 CFR Part 75.
21. Fair Employment and Housing Act. CHDO and subcontractors shall comply with the provisions of the Fair Employment and Housing Act (Government Code, Section 12900 et seq.) and the applicable regulations promulgated thereunder (California Code of Regulations, Title 2, Section 7258.0 et seq.) The applicable regulations of the Fair Employment and Housing Commission implementing Government Code, Section 12990 (a -f), set forth in Chapter 5 of Division 4 of Title 2 of the California Code of Regulations are incorporated into this Agreement by reference and made a part hereof as if set forth in full. CHDO and its subcontractors shall give written notice of their obligations under this clause to labor organizations with which they have a collective bargaining or other agreement. CHDO shall include the nondiscrimination and compliance provisions of this clause in all subcontracts to perform work under the contract.
22. Equal Opportunity in Participation . In conformance with all requirements imposed by or pursuant to 24 CFR 92.350 and other local, state and federal law, no person in the United States shall on the ground of race, color, religion, sex, age, handicap, disability, ancestry, national origin, citizenship status, or any other basis prohibited by applicable law be excluded from participation in, be denied the benefits of, or be subjected to discrimination under, any program or activity funded in whole or in part with HOME funds.
Specific (not exclusive) Discriminatory Actions Prohibited:
9 The CHDO may not directly or through contractual or other arrangements, on the ground of race, color, religion, ancestry, national origin, citizenship status, age, handicap, disability, sex, or any other basis prohibited by applicable law:
A. Deny any facilities, services, financial aid, or other benefits provided under the program or activity.
B. Provide any facilities, services, financial aid, or other benefits which are different, or are provided in a different form from that provided to others under the program or activity.
C. Subject to segregated or separate treatment in any facility in, or in any matter or process related to receipt of any service or benefit under the program or activity.
D. Restrict in any way access to, or in the enjoyment of any advantage or privilege enjoyed by others in connection with facilities, services, financial aid or other benefits under the program or activity.
E. Treat an individual differently from others in determining whether the individual satisfies any admission, enrollment, eligibility, membership, or other requirement or condition which the individual must meet in order to be provided any facilities, services, or other benefit provided under the program or activity.
F. Deny an opportunity to participate in a program or activity as an employee.
23. Labor Standards . In the event that CHDO’s project involves construction on more than 12 units under the HOME Program, or more than 8 units under the CDBG Program, and the contract work is more than $2,000, or in the event CHDO is utilizing CDBG funds for non -residential construction purposes and the amount funded is over $2,000, CHDO agrees to comply with and be responsible for all Davis -Bacon wage requirements and applicable HUD Labor Standards.
CHDO further agrees to comply with the Copeland Act (Anti-Kickback Act) in its activities and programs.
24. HOME Subsidy Layering/Match Requirement. CHDO agrees to evaluate projects to ensure that no more than the necessary amount of federal funds is invested in any one project than is necessary in accordance with HUD CDP Notices. CHDO agrees to provide for and comply with HUD match requirements for the HOME Program for all HOME -funded projects at a rate of twenty -five percent (25%) match for every dollar of HOME funds used for projects. CHDO agrees to provide a narrative summary of match requirements on an annual basis to City.
10 25. Environmental Requirements. CHDO agrees to comply with the environmental review requirements in 24 CFR Part 58.35; Executive Order 11988 relating to the evaluation of flood hazards; Executive Order 11288 relating to the prevention, control, and abatement of water pollution; and Section 102(a) of the Flood Disaster Protection Act of 1973 in the implementation of CHDO activities.
26. Acquisition and Relocation Requirements . CHDO agrees to comply with the acquisition and relocation requirements in Section 104(D) and the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 in accordance with HUD/CPD Handbook 1378.
27. Lobbying Restrictions. CHDO agrees, to the best of its knowledge and belief:
No Federal appropriated funds have been paid or will be paid, by or on behalf of it, to any person for influencing or attempting to influence an officer or employee of any City, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with the awarding of any Federal contract, the making of any Federal grant, the making of any Federal loan, the entering into of any cooperative agreement, and the extension, continuation, renewal, amendment, or modification of any Federal contract, grant, loan, or cooperative agreement;
If any funds other than Federal appropriated funds have been paid or will be paid to any person for influencing or attempting to influence an officer or employee of any City, a Member of congress, an officer or employee of Congress, or an employee of a Member of Congress, in connection with this Federal contract, grant, loan, or cooperative agreement, it will complete and submit Standard Form LLL, “Disclosure Form to Report Lobbying,” in accordance with its instructions; and
It will require that the language of this paragraph be included in the award documents for all subawards at all tiers (including subcontracts, subgrants, and contracts under grants, loans, and cooperative agreements) and that all contractors shall certify and disclose accordingly.
28. Other Provisions. CHDO further agrees to comply with Subpart K of 24 CFR 570 (pertaining to affirmatively furthering fair housing, lead -based paint, flood mitigation, conflict of interest, and other administrative policies) attached hereto as Exhibit C; 24 CFR 85 (“Common Rule”) and 2 CFR Part 200 (pertaining to Uniform Administrative Requirements); Federal 2 CFR Part 230 ( OMB Circular A-122 Accounting principles for non-profit organizations); Federal OMB Circular A-110 (financial principles); Section 109 o f the Housing and Community Development Act of 1974 (regarding non -discrimination) and the regulations issued pursuant thereto; Section 3 of the Housing and Urban Development Act of 1968 (regarding fair housing and equal opportunity), as amended; Executive Order 11063, as amended by Executive Order 12259 and implementing
11 regulations at 24 CFR Part 107 (regarding equal opportunity in housing); Section 504 of the Rehabilitation Act of 1973 (regarding affirmative action for handicapped workers, as amended and implementing regulations; the Age Discrimination Act of 1975 as amended and implementing regulations; Title VII, Civil Rights Act of 1964 and Title VIII of the Civil Rights Act of 1968 as amended; Executive Order 11246, as amended by Executive Orders 11375 and 12086 and implementing regulations at 41 CFR Chapter 60 (pertaining to special equal opportunity provisions) the affirmative marketing non -discrimination and minority and women’s outreach requirements contained in 24 CFR 92.350 and
92.351 and Executive Orders 11625, 12138, and 12432 related thereto.; and all other applicable federal and state regulations pertaining to the use of HOME or CDBG funds. CHDO hereby acknowledges receipt and understanding of the regulations noted above.
29. Independent Contractor. CHDO and its officers, employees and agents shall act at all times in an independent capacity during the time of this Agreement, and shall not act as and shall not be, nor shall they in any manner be construed to be, agents, officers or employees of the City of Visalia.
30. Severability. Each paragraph and provision of this Agreement is severable from each other provision, and if any provision or part thereof is declared invalid, the remaining provisions shall nevertheless remain in full force and effect.
31. Provisions Required By Law Deemed Inserted . Each and every provision of law and clause required by law to be inserted in this contract shall be deemed to be inserted herein and the contract shall be read and enforced as though it were included herein, and if through mistake or otherwise any such provision is not inserted, or is not correctly inserted, then upon the application of either party the contract shall forthwith be physically amended to make such insertion or correction.
32. Religious Organizations . In addition to, and not in substitution for, other provisions of this Agreement regarding the provision of services and programs with HOME and/or CDBG funds, pursuant to Title I of the Housing and Community Development Act of 1974, as amended, GRANTEE:
A. Represents that it is, or may be deemed to be, a religious or denominational institution or organization or an organization operated for religious purposes which is supervised or controlled by or in connection with a religious or denomination institution or organization;
B. Agrees that, in connection with such services and programs:
1. It will not discriminate against any employee or applicant for employment on the basis of religion and will not limit employment
12 or give preference in employment to persons on the basis of religion;
2. It will not discriminate against any person applying for such public services on the basis of religion and will not limit such services or give preference to persons on the basis of religion;
3. It will provide no religious instruction or counseling, conduct no religious worship or services, engage in no religious proselytizing, and exert no other religious influence in the provision of such services or programs;
4. The portion of a facility used to provide services assisted in whole or in part under this Agreement shall contain no sectarian or religious symbols or decorations.
33. Authority to Enter into Agreement:
A. CDHO: CDHO is a corporation duly formed under the laws of the State of California with full power to enter into this Agreement and is duly qualified to transact business in California. The execution and delivery of this Agreement by CDHO has been duly authorized and approved by all corporate action.
B. CITY: City is municipal corporation of the State of California, charter law city organizes and existing pursuant to the laws of the State of California, public body of corporate and politic duly formed with full power to enter into this Agreement and is duly qualified to transact business in California. The execution and delivery of this Agreement by CITY has been duly authorized and approved by all legislative action.
34. Further Action . The Parties agree to perform all further acts, and to execute , acknowledge, and deliver any documents that may be reasonable necessary, appropriate or desirable to carry out the purposes of this Agreement.
35. Waiver. A waiver of any breach of this Agreement by any Party shall not constitute a continuing waiver or a waiver of any subsequent breach of the same or any other provision of this Agreement.
36. Choice of Laws . This Agreement shall be governed by the laws of the State of California and any questions arising hereunder shall be construed or determined according to such law. Venue for the legal action arising from or in connection with this Agreement shall be in Tulare County, California.
37. Attorney’s Fees . In the event either party commences any action for the enforcement of this Agreement, the prevailing party shall be entitled to recovery of its attorney’s fees and court costs incurred in the action brought thereon.
13 38. Construction. This Agreement is the product of negotiation and compromise on the part of each party and the parties agree, notwithstanding Civil Code Section 1654, that in the event of uncertainty the language will not be construed against the party causing the uncertainty to exist.
39. Headings. Headings at the beginning of each numbered Section of this Agreement are solely for the convenience of the Parties and are not a part of this Agreement.
40. Entire Agreement/Amendment . This Agreement and items incorporated herein contain all of the agreements of the Parties hereto with respect to the matters contained herein, and no prior agreement or understanding pertaining to any such matter shall be effective for any purpose. No provisions hereof may be amended or modified in any manner whatsoever except by an agreement in writing signed by duly authorized representatives of each of the Parties hereto, except that any modifications which relate to the adjustment of time limitations or the form of documents may be made by joint agreement of the Parties.
WHEREFORE, the parties have executed this Agreement on the date first set above.
Community Housing Development Organization “CHDO”
SELF HELP ENTERPRISES
By:______________________________________
Tom Collishaw, CEO
By:______________________________________
Betsy McGovern-Garcia, Secretary
THE CITY OF VISALIA
By:______________________________________
Leslie Caviglia, City Manager
By:______________________________________
Attest
Approved as to form:
By: ___________________________ By: ____________________________ City Attorney Counsel for SHE
14 Exhibit “A”
Description of Programs and Services to be Provided
The City will contract with a Visalia approved Community Housing Development Organization (“CHDO”) for the senior affordable housing development within the City of Visalia city limits.
Services to be provided:
1. CHDO will develop mulit-family housing to benefit low-income families.
2. CHDO agrees to analyze each property that is subject to purchase as follows:
a. CHDO will research the minimum bid for property.
b. CHDO will estimate costs for infill of the property. c. CHDO will estimate closing costs.
d. CHDO will research tax liens and any other liens that exist on the property.
e. CHDO will research the market values for comparable property sales in the area.
f. CHDO will analyze each project to ensure that the City will realize a return on its investment for the project.
3. CHDO will sign a Promissory Note and Deed of Trust for each property purchased.
4. CHDO will oversee the development of the property.
5. CHDO will oversee the purchase of the property thought the escrow process.
6. CHDO will return to the City the residual receipts amount on the sale of each property after all costs have been paid.
7. CHDO will ensure that the property will benefit families that are at or below 60% median income and comply with all other HUD and HOME Program requirements.
8. HOME regulations are subject to change and reinterpretation by HUD. The CHDO agrees to abide by any interpretations of the HOME regulations by HUD, even if HUD applies such interpretations retroactively.
9. CHDO will provide such reports on a monthly basis to the City of Visalia in order to comply with all HUD and City reporting requirements.
15 “Exhibit B”
Form of Promissory Note
$________________
____________(Date)
Visalia, California
FOR VALUE REC EIVED, SELF HELP ENTERPRISES , a California 501(c)3 nonprofit corporation, (the "Maker"), having a physical address of _________________________________________, Visalia, California, 932__ and a mailing address of ________________________ _____________, Visalia, CA 932__ , promises to pay THE CITY OF VISALIA ("Payee"), the principal sum of _____________________________________, or so much of such principal as may be advanced (the "Loan").
1. The Loan . This Loan is made pursuant to that certain Agreement and Declaration of Restrictive Covenants (the "Loan Agreement") among Maker and Pay ee dated _________________, 2023. The Loan will be used by Maker for the development of that certain real property identified generally as
___________________________________________, STATE OF CALIFORNIA, as more particularly and legally described in the Loan Agreement (the "Property").
2. Security. Payment of this Note is secured by a deed of trust and assignment of rents (the "Deed of Trust") from Maker to Payee upon the Property.
3. Project. Maker will or has constructed a __________________ affordable housing project (the "Project") as described in the Loan Agreement.
4. Maturity Date. This Note shall be forgiven at the rate of 1/30 th per year and shall only become due and payable upon failure to comply with the terms and conditions of the Loan Agreement. Upon such occurrence, any amount due and owing on the Loan which has not been forgiven shall be due and payable to Payee. To the extent there are residual receipts from the Project, Maker shall pay 100% of the residual receipts to Payee on an annual basis.
5. Payment. Any payment which becomes due shall be made in lawful money of the United States to Payee c/o the City of Visalia , 707 W. Acequia Avenue, Visalia, California 93291. The place of payment may be changed from time to time as the Payee may from time to time designate in writing.
6. Default. The occurrence of any of the following shall constitute an event of default under this Note: (i) Maker fails to pay any amount due hereunder within 15 days of its due date; or (ii) Any default by Maker under the Deed of Trust, or the
16 Agreement and Declaration of Restrictive Covenants recorded against the Property and failure to cure as described in the Agreement and Declaration of Restrictive Covenants.
Upon the occurrence of any event of default, or at any time thereafter, at the option of the Payee hereof, the entire unpaid principal owing on this Note shall become immediately due and payable. This option may be exercised at any time following any such event. Payee's failure to exercise such option shall not constitute a waiver of such option with respect to any subsequent event. Payee's failure in the exercise of any other right or remedy hereunder or under any agreement which secures the indebtedness or is related thereto shall not affect any right or remedy and no single or partial exercise of any such right or remedy shall preclude any further exercise thereof.
7. Default Interest Rate. At all times when Maker is in default hereunder by reason of Maker's failure to pay principal due under this Note or any amounts due under any loan documents securing this Note, the interest rate on the sums as to which Maker is in default (including principal, if Payee has elected to declare it immediately due and payable), shall be the lower of the highest rate then allowed by law or five percent over the prime interest rate announced by Wells Fargo Bank, N.A., as of the date of the default.
8. Waivers. Maker and any endorsers hereof and all others who may become liable for all or any part of this obligation, severally waive presentment for payment, demand and protest and notice of protest, and of dishonor and nonpayment of this Note, and expressly consent to any extension of the time of payment hereof , to the release of any party liable for this obligation, and any such extension or release may be made without notice to any of said parties and without any way affecting or discharging this liability.
9. Costs. Maker agrees to pay immediately upon demand all costs and expenses of Payee including reasonable attorneys' fees, (i) if after default this Note be placed in the hands of an attorney or attorneys for collection, (ii) if after a default hereunder or under the Deed of Trust, Loan Agreement or under any loan document referred to herein Payee finds it necessary or desirable to secure the services or advice of one or more attorneys with regard to collection of this Note against Maker, any guarantor or any other party liable therefore or to the protection of its rights under this Note, the Deed of Trust, the Loan Agreement or other loan document, or (iii) if Payee seeks to have the Property abandoned by or reclaimed from any estate in bankruptcy, or attempts to have any stay or injunction prohibiting the enforcement or collection of the Note or prohibiting the enforcement of the Deed of Trust or any other agreement evidencing or securing this Note lifted by any bankruptcy or other court.
If Payee shall be made a party to or shall reasonably intervene in any action or proceeding, whether in court or before any governmental agency, affecting the Property or the title thereto or the interest of the Payee under the Deed of Trust, including, without limitation, any form of condemnation or eminent domain proceeding, Payee shall be reimbursed by Maker immediately upon demand for all reasonable costs,
17 charges and attorneys' fees incurred by Payee in any such case, and the same shall be secured by the Deed of Trust as a further charge and lien upon the Property.
10. Notices. Any notices provided for in this Note shall be given by mailing such notice by certified mail, return receipt requested at the address stated in this Note or at such address as either party may designate by written notice.
11. Successors. This Note shall be binding upon Maker, its successors, and assigns.
12. California Law. This Note shall be construed in accordance with and be governed by the laws of the State of California.
13. Severability. If any provision of this Note shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions hereof shall not in any way be affected or impaired thereby.
14. Nonrecourse. In any action brought to enforce the obligations of Maker under this Note, the Deed of Trust or any other instrument or agreement evidencing, securing or relating to the indebtedness evidenced by this Note, the judgment or decree shall be enforceable against Maker only to the extent of its interest in the Property described in the Deed of Trust or its interest in any other security pledged by Maker as security for this Note, and Payee shall not seek any deficiency judgment against the Maker. The foregoing provisions shall not prevent recourse to the collateral security for the loan or constitute a waiver, release or discharge of or otherwise affect the obligation to pay, any indebtedness evidenced by the loan documents or limit the right of any person to name the Maker or any other person claiming an interest in or right to such collateral as party defendant in any action or suit for judicial foreclosure or in the exercise of any other remedy, including injunctive or other equitable relief, under any of the loan documents so long as no deficiency judgment shall be sought against the Maker.
The foregoing limitation shall not apply to any and all loss, damage, liability, action, cause of action, cost or expense (including without limitation, reasonable attorneys' fees and expenses) incurred by Payee as a result of any (i) fraud or material misrepresentation under or in connection with the loan or any loan document; (ii) intentional bad faith waste of the Property; (iii) losses resulting from Maker's failure to maintain insurance as required under the Deed of Trust; or (iv) misappropriation of any rents, security deposits, insurance proceeds, condemnation awards or any other proceeds derived from the collateral security. If any of the events listed in the foregoing (i) through (iv) occurs, Payee shall have the right to proceed directly against Maker at the time the event giving rise to the recourse liability occurred to recover any and all loss, damage, liability, action, cause of action, cost or expense (including without limitation, reasonable attorneys' fees and expenses) incurred by Payee.
18 MAKER:
, 2025 Self Help Enterprises
By:
Its:
19 “Exhibit C”
Form of Deed of Trust
RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:
The City of Visalia
Attn.: Real Estate Department
315 East Acequia Street
Visalia, CA 93291
(Space above this line for Recorder's use)
DEED OF TRUST, ASSIGNMENT OF RENTS,
SECURITY AGREEMENT AND FIXTURE FILING
THIS DEED OF TRUST is being executed this, __day of , 2025, by the SELF HELP ENTERPRISES , a California non -profit corporation ("Trustor"), to _______________________________ (the "Trustee"), in favor of THE CITY OF VISALIA (the "Beneficiary").
Trustor is the fee owner of the real property (the "property") described in the attached Exhibit A, which is incorporated into this Deed of Trust by reference.
Trustor executes this Deed of Trust in consideration of a loan being made by Beneficiary to Trustor (the "Loan"). The Loan is evidenced by a promissory note dated ________________ herew ith in the principal amount of _______________________ executed by Trustor in favor of Beneficiary (the "Note").
In consideration of the Loan, Trustor hereby irrevocably grants, conveys, transfers and assigns to the Trustee, its successors and assigns, in trust, with power of sale and right of entry and possession as provided below, all of their present and future estate, right, title and interest in and to the following described property (the "Property" or the "Premises"):
(A) All of Trustor's estate, right, title and interest in and to the property, and all minerals, oil, gas and other hydrocarbon substances on the property, as well as all Project rights, air rights, water, water rights, and water stock relating to the Property;
(B) All present and future structures, buildings, improvements, appurtenances and fixtures of any kind on the Property, including but not limited to all apparatus, equipment and appliances used in connection with the operation or occupancy of the Property, such as fire sprinklers and alarm systems, heating and air -conditioning systems and facilities used to provide any utility services, refrigeration, ventilation,
20 laundry, drying, dishwashing, garbage disposal, stoves, recreation or other services on the property, and all window coverings, drapes and rods, carpeting and floor coverings, it being intended and agreed that all such items will be conclusively considered to be a part of the real property conveyed by this Deed of Trust, whether or not attached or affixed to the Property (the "Improvements");
(C) All appurtenances of the property and all rights of the Trustor in and to any streets, roads or public places, easements or rights -of-way, relating to the Property;
(D) All of the rents, royalties, profits and income of the Property, and all rights of Trustor under all present and future leases affecting the Property, including but not limited to any security deposits;
(E) All proceeds and claims arising on account of any damage to or taking of the Property or any Improvements thereon or any part thereof, and all causes of action and recoveries for any loss or diminution in the value of the Property or any Improvements;
(F) All goods located on the Property and used in the operation or occupancy of the Property or in any construction on the Property but which are not effectively made real property under Clause (B) above, including but not limited to all appliances, furniture and furnishings, building service equipment, and building materials, supplies and equipment;
(G) All general intangibles relating to the Project or use of the Property, including but not limited to all governmental permits relating to construction on the Property, all names under or by which the Property or any Improvements on the Property may at any time be operated or known, and all rights to carry on business under any such names or any variant thereof, and all trademarks and goodwill in any way relating to the property; and
(H) All water stock relating to the Property, all shares of stock or other evidence of ownership of any part of the Property that is owned by the Trustor in common with others, and all documents of membership in any owners' or members' association or similar group having responsibility for managing or operating any part of the Property.
This instrument secures:
(1) The payment and performance of the Trustor's indebtedness and obligations under the Note including all extensions, renewals, modifications, amendments and replacements of the Note;
(2) The payment and performance of the Trustor's obligations under this Deed of Trust;
21 (3) The payment of all sums advanced or paid out by the Beneficiary or the Trustee under or pursuant to any provision of this Deed of Trust, together with interest thereon as provided herein;
(4) The payment of the principal and interest on all other future loans or advances made by the Beneficiary to the Trustor (or any successor in interest to the Trustor as the owner of all or any part of the Property) when the promissory note evidencing the loan or advance specifically states that it is secured by this Deed of Trust ("Future Advances"), including all extensions, renewals, modifications, amendments and replacements of any Future Advances; (5) The payment and performance of the Trustor's obligations under the Agreement and Declaration of Restrictive Covenants executed by Trustor, dated (the "Declaration");
(6) The payment and performance of each and every obligation, covenant, and agreement of Trustor contained under all other present and future agreements executed by Trustor in favor of Beneficiary and relating to the Note or the Loan, including without limitation, the Loan Agreement executed among Trustor and Beneficiary (as such documents may be amended, modified or supplemented from time to time, the "Related Documents").
This Deed of Trust, the Note, the Declaration, the Related Documents and any other instrument given to evidence or further secure the payment and performance of any obligation secured hereby may hereafter be referred to as the "Loan Documents".
ARTICLE I
COVENANTS OF TRUSTOR
To protect the security of this Deed of Trust, the Trustor agrees as follows:
1.01 Performance. Trustor will pay and perform all indebtedness and obligations that are secured by this Deed of Trust in accordance with their terms. All sums payable by Trustor hereunder shall be paid without notice, demand, counterclaim, offset, deduction, or defense.
1.02 Insurance. Trustor will maintain , or cause to be maintained, in force on the Property (a) hazard insurance against loss or damage to the Improvements and Personal Property by fire and any of the risks covered by "fire and extended coverage" insurance, (b) commercial general liability insurance, (c) such other insurance, and in such amounts, as may from time to time be reasonably required by Beneficiary against the same or other hazards, including without limitation flood insurance, and (d) any other insurance required by law. The insurance policies must be satisfactory to the Beneficiary as to amount, form, deductibles, and insurer, and must cover all risks Beneficiary reasonably requires. With respect to public liability insurance, Beneficiary shall be named as an additional insured, and as to Beneficiary such insurance shall be primary and noncontributing in the event of loss with any other insurance Beneficiary may carry.
22 Subject to the rights of the senior lender, the hazard insurance policy must contain a standard mortgagee clause satisfactory to the Beneficiary making all losses payable to the Beneficiary. All such insurance policies may only be canceled or modified upon not less than 30 days prior written notice to the Beneficiary. Certificates of all such insurance satisfactory to the Beneficiary and at the request of Beneficiary, such insurance policies, together with receipts for the payment of premiums, are to be delivered to and held by the Beneficiary. Certificates of all renewal and replacement policies must be delivered to the Beneficiary at least 15 days before expiration of the old policies. Approval, disapproval or acceptance of any insurance by the Beneficiary will not be a representation of the solvency of any insurer, the sufficiency of any amount of insurance or the form or legal sufficiency of any insurance contracts, and Trustor hereby expressly assumes full responsibility for and liability, if any, with respect thereto.
1.03 Proceeds. Subject to the rights of the senior lender, all insurance proceeds on the Property, and all causes of action, claims, compensation, awards and recoveries for any damage, condemnation or taking of all or any part of the Property or for any damage or injury to it or for any loss or diminution in value of the Property, are hereby assigned to and shall be paid to the Beneficiary. Trustor, upon obtaining knowledge of the institution of any such proceedings or of any damage to the Property, will immediately notify the Beneficiary in writing. The Beneficiary may participate in any suits or proceedings relating to any such proceeds, causes of action, claims, compensation, awards, or recoveries and may make any compromise or settlement thereof and may join with Trustor in adjusting any loss covered by insurance. The Beneficiary will apply any sums received by it under this paragraph first to the payment of all of its costs and expenses (including but not limited to legal fees and disbursements) incurred in obtaining those sums, and then, in its absolute discretion (subject to the following paragraph) and without regard to the adequacy of its security, to the payment of the indebtedness and obligations secured by this Deed of Trust or to Trustor for restoration or repair of the Property. Any application of such amounts or any portion thereof to the indebtedness secured hereby shall not be construed to cure or waive any default or notice of default hereunder or invalidate any act done pursuant to any such notice or default.
In the event Trustor is not in default hereunder and the following conditions are satisfied, Beneficiary shall make such remaining proceeds available to Trustor to restore the Property: (i) the Beneficiary shall be furnished with an estimate for its approval of the cost of restoration or repair accompanied by an architect's certification as to such costs and appropriate final plans and specifications for reconstruction of the improvements for approval by the Beneficiary; (ii) the improvements so restored or repaired shall be of substantially the same character and value as the improvements prior to damage or destruction and proper for the purposes for which they were originally erected; (iii) Trustor shall proceed forthwith with the completion of construction of the improvements, including the necessary work of restoration, in accordance with plans, specifications and drawings submitted to and approved by the Beneficiary; (iv) any monies which the Beneficiary makes available for restoration shall be disbursed in accordance with standard construction lending practice or in any other manner approved by the Beneficiary; (v) Trustor shall furnish the beneficiary with evidence satisfactory to the Beneficiary that all improvements so restored and/or repaired and their contemplated
23 use fully comply with all zoning, environmental and building laws, ordinances and regulations, and with all other applicable federal, state and municipal laws and requirements; and (vi) if the estimated costs of reconstruction shall exceed the proceeds available, Trustor shall furnish a satisfactory bond of completion or such cash deposits or other evidence satisfactory to the Beneficiary of Trustor's ability to meet such excess costs.
1.04 Payment of Taxes and Claims. Trustor agree to pay when due all taxes and assessments which are or may become a lien on the Property and any bonds, fees, liens, charges, fines, impositions and other items which are attributable to or which are assessed against the Property or its rents, royalties, profits and income ("Taxes"). Trustor also agrees to pay when due all lawful claims and demands of mechanics, materialmen, laborers and others for any work performed or materials delivered for the Property ("Claims").
Trustor, at its expense, may contest, by appropriate proceedings conducted in good faith and with due diligence, the amount or validity, in whole or in part, of any Taxes or Claims, provided (i) Trustor shall have notified Beneficiary prior to the commencement of such proceedings, (ii) in the case of any unpaid Taxes or Claims, such proceedings shall suspend the collection thereof from Trustor, Beneficiary and the Property, and shall not constitute a presently enforceable lien against the Property during the pendency of such contest, (iii) neither the Property nor any part thereof nor any interest therein will be in danger of being sold, forfeited, terminated, canceled or lost, (iv) such proceedings shall not have an adverse effect on the lien or security interest created hereby or upon the enforcement of any provisions of the Loan Documents, and (v) if Beneficiary shall so require, Trustor shall have deposited with Beneficiary such security reasonably necessary for payment of the contested Taxes or Claims, with interest and penalties and Beneficiary's expenses.
1.05 Impounds. Beneficiary may, at its option to be exercised prior to or upon the recordation of this Deed of Trust or thereafter upon 30 days' written notice to Trustor, require the deposit with Beneficiary or its designee by Trustor, at the time of each payment of an installment of interest, if any, or principal under the Note, of an additional amount sufficient to discharge the obligations of Trustor under Sections 1.02 and 1.04 hereof as and when they become d ue. The determination of the amount payable and of the fractional part thereof to be deposited with Beneficiary shall be made by Beneficiary in its sole discretion. Said amounts shall not be considered to be held by Beneficiary or its designee in trust nor as agent of Trustor, shall bear interest at the rate of interest customarily paid by Beneficiary, and shall be applied to the payment of the obligations in respect of which the amounts were deposited or, at the option of Beneficiary, to the payment of said obligations in such order or priority as Beneficiary shall determine. If at any time within 30 days prior to the due date of any of the aforementioned obligations the amounts then on deposit therefore shall be insufficient for the payment of such obligation in full, Trustor shall, within 10 days after demand, deposit the amount of the deficiency with Beneficiary. If the amounts deposited are in excess of the actual obligations for which they were deposited, Beneficiary may refund any such excess, or, at its option, may hold the same in a reserve account, not in trust and bearing interest, and reduce
24 proportionately the required monthly deposits for the ensuing year. Nothing herein contained shall be deemed to affect any right or remedy of Beneficiary under any other provision of this Deed of Trust or under any statute or rule of law to pay any such amount and to add the amount so paid to the indebtedness hereby secured.
All amounts so deposited shall be held by Beneficiary or its designee as additional security for the sums secured by this Deed of Trust, and upon the occurrence of a default hereunder Beneficiary may, in its sole and absolute discretion, and without regard to the adequacy of its security hereunder in the event of a monetary default or non- monetary default if the Beneficiary elects to accelerate the Loan, apply such amounts or any portion thereof to any part of the indebtedness secured hereby. Any such application of said amounts or any portion thereof to any indebtedness secured hereby shall not be construed to cure or waive any default or notice of default hereunder or invalidate any act done pursuant to any such default or notice.
To the extent Beneficiary requires deposits to be made pursuant to this Section, Trustor shall deliver to Beneficiary all tax bills, bond and assessment statements, statements of insurance premiums, and statements for any other obligations referred to above as soon as the same are received by Trustor.
If Beneficiary sells or assigns this Deed of Trust, Beneficiary shall have the right to transfer all amounts deposited under this Section to the purchaser or assignee, and Beneficiary shall thereupon be released and have no further liability hereunder for the application of such deposits, and Trustor shall look solely to such purchaser or assignee for such application and for all responsibility relating to such deposits.
1.06 Security Agreement. This Deed of Trust constitutes a security agreement with respect to all personal property and fixtures in which the Beneficiary is granted a security interest hereunder, and the Beneficiary shall have all of the rights and remedies of a secured party under the California Uniform Commercial Code as well as all other rights and remedies available at law or in equity. Trustor hereby agrees to execute and deliver on demand and hereby irrevocably constitutes and appoints Beneficiary the attorney-in-fact of Trustor, to execute, deliver and, if appropriate, to file with the appropriate filing officer or office such security agreements, financing statements, continuation statements or other instruments as the Beneficiary may request or require in order to impose, perfect or continue the perfection of, the lien or security interest created hereby. Upon the occurrence of any default hereunder, the Beneficiary shall have the right to cause any of the Property which is personal property and subject to the security interest of the Beneficiary hereunder ("Personal Property") to be sold at any one or more public or private sales in any manner permitted by applicable law, and the Beneficiary shall further have all other rights and remedies, whether at law, in equity, or by statute, as are available to secured creditors under applicable law. Any such disposition may be conducted by an employee or agent of the Beneficiary or the Trustee. Any person, including both the Trustor and the Beneficiary, shall be eligible to purchase any part or all of such property at any such disposition.
25 Expenses of retaking, holding, preparing for sale, selling or the like shall be borne by Trustor and shall include the Beneficiary's and the Trustee's reasonable attorneys' fees and legal expenses. Trustor, upon demand of the Beneficiary, shall assemble the Personal Property and make it available to the Beneficiary at the property, a place which is hereby deemed to be reasonably convenient to the Beneficiary. The Beneficiary shall give Trustor at least 5 days' prior written notice of the time and place of any public sale or other disposition of such property or of the time of or after which any private sale or any other intended disposition is to be made, and if such notice is sent to Trustor, as the same is provided for the mailing of notices herein, it is hereby deemed that such notice shall be and is reasonable notice to Trustor.
Trustor hereby warrants, represents and covenants as follows:
(a) Trustor is, and as to portions of the Personal Property to be acquired after the date hereof will be, the sole owner of the Personal Property (except that Trustor may lease Personal Property which is immaterial in value and merely incidental to the operation of the Property), subject to any senior adverse lien, security interest, encumbrance or adverse claims thereon of any kind whatsoever as approved by Beneficiary. Trustor will notify Beneficiary of, and will defend the Personal Property against, all claims and demands of all persons at any time claiming the same or any interest therein.
(b) Trustor will not lease, sell, convey or in any manner transfer the Personal Property, without the prior written consent of Beneficiary, except for transfers as described in clause (d) below.
(c) The Personal Property is not used or bought for personal, family or household purposes of Trustor.
(d) The Personal Property will be kept on or at the Property and Trustor will not remove the Personal Property from the Property without the prior written consent of Beneficiary, except such portions or items of Personal Property which are consumed or worn out in ordinary usage, all of which shall be promptly replaced by Trustor with new items of equal or greater quality and value. (e) Trustor maintains a place of business in the State of California and Trustor will immediately notify Beneficiary in writing of any change in its place of business.
(f) Trustor will execute and deliver to the Beneficiary on demand, and at Trustor's cost and expense, any documents required to perfect and continue the perfection of the Beneficiary's security interest in the personal property of Trustor granted by this instrument.
1.07 Assignment of Rents . All of the existing and future rents, royalties, income and profits of the Property that arise from its use or occupancy are hereby absolutely and presently assigned to the Beneficiary. Trustor irrevocably appoints Beneficiary its true and lawful attorney -in-fact at the option of Beneficiary at any time
26 and from time to time to demand, receive and enforce payment, give receipts or releases and sue in the name of Trustor or Beneficiary for all such rents, royalties, incomes and profits. However, until Trustor is in default under this Deed of Trust, Trustor will have a license to demand, receive and enforce payment, give receipts or releases and sue in the name of Trustor for all such rents, royalties, income and profits. Upon any default by Trustor under any of the Loan Documents and the expiration of applicable cure periods the Beneficiary may terminate Trustor's license in its discretion at any time without notice to Trustor and may thereafter collect the rents, royalties, income and profits itself or by an agent or receiver. No action taken by the Beneficiary to collect any rents, royalties, income or profits will make the Beneficiary a "mortgagee -in-possession" of the Property, unless the Beneficiary personally or by agent enters into actual possession of the Property. Possession by a court -appointed receiver will not be considered possession by the Beneficiary. All rents, royalties, income and profits collected by the Beneficiary or a receiver will be applied first to pay all expenses of collection, and then to the payment of all costs of operation and management of the Property, and then to the payment of the indebtedness and obligations secured by this Deed of Trust in whatever order the Beneficiary directs in its absolute discretion and without regard to the adequacy of its security.
1.08 Acceleration. If the Property or any part thereof or beneficial interest therein or any interest of Trustor is sold, assigned, transferred, conveyed, encumbered or full possessory rights therein transferred, conveyed or encumbered, in either or any case without the prior written consent of Beneficiary other than leases to tenants, such event shall constitute a default under this Deed of Trust and Beneficiary, at its option, may declare the Note and all other obligations hereunder to be immediately due and payable, and Beneficiary may invoke any remedies following such acceleration as are permitted by this Deed of Trust or at law or in equity.
1.09 Maintenance.
(a) Trustor will not commit any waste on the Property or take any actions that might invalidate any insurance carried on the Property. Trustor will maintain the Property in good condition and repair and will complete or restore and repair promptly and in a good and workmanlike manner any building, structure, or improvement which may be constructed, damaged or destroyed thereon, whether or not insurance or other proceeds are available to cover in whole or in part the cost of any such completion, restoration or repair. No Improvements may be removed, demolished or materially altered except for purposes of replacement valued at less than TEN THOUSAND DOLLARS ($10,000.00) without the prior written consent of the Beneficiary. (b) Without the prior written consent of the Beneficiary, Trustor will not seek, make or consent to any change in the zoning or nature of occupancy or conditions of use of all or any part of the Property to the extent the same was not intended by the Beneficiary at the time this Deed of Trust was delivered.
27 (c) Trustor shall comply with all applicable laws, orders, ordinances, regulations, restrictions and requirements of all governmental authorities affecting the Property and the use thereof, including, without limitation, those relating to hazardous substances, pollution, or protection of the environment. Trustor will comply with and make all payments required under the provisions of any covenants, conditions or restrictions affecting the Property, including but not limited to those contained in any declaration and constituent documents of any condominium, cooperative or planned Project on the Property.
1.10 Records. Trustor will keep adequate books and records of account of the Property and its own financial affairs sufficient to permit the preparation of financial statements therefrom in accordance with generally accepted accounting principles. The Beneficiary will have the right to examine, copy and audit Trustor's records and books of account at all reasonable times.
1.11 Defense. Trustor will, at its own expense, appear in and defend any action or proceeding that might affect the Beneficiary's security or the rights or powers of the Beneficiary or the Trustee or that purports to affect any of the Property. If Trustor fails to perform any of its covenants or agreements contained in this Deed of Trust after the expiration of any applicable cure period, or if any action or proceeding of any kind (including but not limited to any bankruptcy, insolvency, arrangement, reorganization or other debtor relief proceeding) is commenced which might affect the Beneficiary's or the Trustee's interest in the Property or the Beneficiary's right to enforce its security, then the Beneficiary and/or the Trustee may, at their option, but without obligation to do so and without notice to or demand upon Trustor and without releasing Trustor from any obligation hereunder, make any appearances, disburse any sums and take any actions as may be deemed necessary or desirable to the Trustee or the Beneficiary to protect or enforce the security of this Deed of Trust or to remedy the failure of Trustor to perform its covenants (without, however, waiving any default of Trustor), including but not limited to disbursement of reasonable attorneys' fees, entry upon the Property to make repairs or to take other action to protect the security hereof, and payment, purchase, contest or compromise of any encumbrance, charge or lien which in the judgment of the Beneficiary or the Trustee appears to be prior or superior hereto. Trustor agrees to pay all reasonable out -of-pocket expenses of the Beneficiary and the Trustee thus incurred (including but not limited to fees and disbursements of counsel). Any sums so disbursed or advanced by the Beneficiary or the Trustee will be additional indebtedness of the Trustor secured by this Deed of Trust and will be payable by Trustor upon demand. Any such sums so disbursed or advanced will bear interest at 10% per annum, provided that any such sums so disbursed or advanced by the Trustee will not bear interest in excess of the maximum rate permitted to be charged by the Trustee under applicable law. This paragraph will not be construed to require the Beneficiary or the Trustee to incur any expenses, make any appearances, or take any actions.
1.12 Financing Statement. This Deed of Trust constitutes a financing statement filed as a fixture filing in the Official Records of the County Recorder of the County of Tulare with respect to any and all fixtures included within the term "Property" as used
28 herein and with respect to any goods or other personal property that may now be or hereafter become such fixtures.
1.13 Indemnity. In addition to any other indemnities to Beneficiary specifically provided for in this Deed of Trust, Trustor shall defend, with counsel reasonably satisfactory to Beneficiary, protect, indemnify and save harmless Beneficiary from and against any and all losses, liabilities, obligations, claims, damages, fines, penalties, causes of action, costs and expenses (including, without limitation, attorneys' fees and expenses), excepting those resulting from the gross negligence or willful misconduct of Beneficiary, imposed upon or incurred by or asserted against Beneficiary by reason of (a) Beneficiary's interest in the Property or receipt of any rents or other sum therefrom, including without limitation any income (excluding only federal, state, and local income tax, and California franchise tax), license, business or excess profits tax payable by Beneficiary and determined on the basis of the Rents or the revenues from the Note or this Deed of Trust, (b) any accident, injury to or death or a person or persons or loss of or damage to property occurring on or about or with respect to the Property or any part thereof or the adjoining sidewalks, curbs, vaults and vault space (if any), streets or ways, (c) any use, non -use, misuse, possession, occupation, alteration, operation, maintenance, management or condition (including, without limitation, the location of any hazardous substance thereon) of the Property or any part thereof, or of the adjoining sidewalks, curbs, streets, ways, vaults and vault space (if any), (d) any failure on the part of Trustor to perform or observe any of its agreements or obligations under this Deed of Trust or the Loan Documents, provided that the exclusive indemnification obligations of Trustor with respect to any Claims (as such term is defined in Section 1.14(e) below) are set forth in Section 1.14(e) hereof, (e) any failure on the part of Trustor to comply with any law, regulation, ordinance, or requirement of any governmental body applicable to the Property, (f) the performance of any labor or service or the furnishing of any material or other property in respect of the Property or any part thereof, and (g) any negligence (to the extent that proceeds from any insurance actually maintained by Beneficiary do not cover the loss caused thereby) or willful act or omission on the part of Trustor. All amounts payable to Beneficiary under this Section which are not paid within ten days after written demand therefore by Beneficiary shall bear interest from the date of such demand.
1.14 Environmental Matters.
(a) Trustor hereby represents and warrants to Beneficiary as follows. (i) To its best knowledge, the Property has not previously been used as a landfill. Neither Trustor, nor to the best knowledge of Trustor, any other person, has ever caused or permitted any Hazardous Materials (as hereinafter defined) to be released or disposed of, on, under or at the Property or any part thereof, and neither the Property, nor any part thereof, has ever been used (whether by Trustor or by any other person) for activities involving, directly or indirectly, the storage, release or disposal of any Hazardous Materials. Neither Trustor nor, to the best knowledge of Trustor, any other person, has ever caused or permitted to be incorporated
29 into any Improvements located on the Property any asbestos in any form, any urea formaldehyde foam insulation, or any transformers or other equipment which contain dielectric fluid containing levels of polychlorinated biphenyls in excess of 50 parts per million or any other Hazardous Materials. Trustor has received no notice from the California Department of Health Services that the Property is, or is proposed or threatened to become, classified as "border -zone property" under the provisions of California Health and Safety Code Section 25220, et seq. or any regulation adopted in accordance therewith. Trustor has received no notice from the California Department of Health Services, and no other person has reported to Trustor, that any occurrence or condition exists on real property adjoining or within 2,000 feet of the Property that could cause the Property to be subject to any restrictions on the ownership, occupancy, transferability or use of the Property under any federal, state or local law, code, statute, ordinance, rule, regulation, rule of common law or guideline relating to Hazardous Materials now or hereafter enacted or promulgated (collectively, and including, without limitation, any such laws which require notice of the use, presence, storage, generation, disposal or release of any Hazardous Materials to be provided to any party, "Hazardous Materials Laws"). No litigation, administrative enforcement actions or proceedings have been brought or threatened against Trustor or, to the best knowledge of Trustor, any other person, nor have any settlements been reached by or with any party or parties, public or private, alleging the presence, disposal, release or threatened release of any Hazardous Materials on, from or under any of the Property. (ii) As used herein, the term "Hazardous Materials" means and includes any flammable, explosive, or radioactive materials or hazardous, toxic or dangerous wastes, substances or related materials or any other chemicals, materials or substances (excluding herefrom any chemicals, materials or substances which are necessary to and typically required for the construction and operation of a multi -family housing project) , exposure to which is prohibit ed, limited or regulated by any federal, state, county, regional or local authority or which, even if not so regulated, may or could pose a hazard to the health and safety of the occupants of the Property or of property adjacent to the Property, including, but not limited to, asbestos, PCBs, petroleum products and by -products, substances defined or listed as "hazardous substances" or "toxic substances" or similarly identified in, pursuant to, or for purposes of, the California Solid Waste Management, Resour ce Recovery and Recycling Act (California Government Code Section 66700, et seq.), the Comprehensive Environmental Response, Compensation, and Liability Act, as amended (42 U.S.C. Section 9601, et seq.), the Hazardous Materials Transportation Act (49 U.S.C. Section 1801, et seq.), the Resource Conservation and Recovery Act (42 U.S.C. Section 6901, et seq.), Section 25117 or Section 25316 of the California Health & Safety Code; and any so -called "Superfund" or "Superlien" law, or any other federal, state or local statute,
30 law, ordinance, code, rule, regulation, order or decree regulating, relating to or imposing liability or standards of conduct concerning any hazardous, toxic or dangerous waste, substance or material; or any substances or mixture regulated under the Toxic Substance Control Act of 1976, as now or hereafter amended (15 U.S.C. Section 2601, et seq.); and any "toxic pollutant" under the Clean Water Act, as now or hereafter amended (33 U.S.C. Section 1251, et seq.); and any hazardous air pollutant under the Clean Air Act, as now or hereafter amended (42 U.S.C. Section 7901, et seq.).
(iii) Trustor has obtained, or will obtain, all certificates, permits, licenses, approvals and authorizations necessary for the lawful construction, occupancy, use and operation of the Property for the purposes for which it is currently being used, including, but not limited to, any certificates, permits, licenses, approvals and authorizations required by any federal, state, county, regional or local authority whose jurisdiction includes, in whole or in part, environmental protection or matters pertaining to health, safety and welfare. Issuance of the certificates, permits, licenses, approvals and authorizations obtained by Trustor for the Property is no longer subject to further administrative review or appeal under any applicable laws or ordinances, and the time periods set forth in currently applicable laws and ordinances, within which a third party could commence a lawsuit or other legal proceeding challenging the issuance of any of such certificates, permits, licenses, approvals or authorizations, have lapsed. Trustor has received no notice of any lawsuit or other regulatory, administrative, judicial or legal proceeding which is presently pending which (A) challenges the issuance of any of the certificates, permits, licenses, approvals or authorizations obtained by Trustor for the Property or (B) alleges non -compliance by Trustor or the Property with any law, regulation, rule or ordinance which has a material effect on the operation, occupancy, leasing or use of the Property for the purposes for which it is currently being used. In addition, none of the non -residential tenants (if any) of the Property, to the knowledge of Trustor after due inquiry, has failed to obtain any certificate, permit, license, approval or authorization required in connection with its operations on its premises. (b) Trustor shall keep and maintain the Property in compliance with any and all federal, state and local laws, ordinances and regulations relating to Hazardous Materials, industrial hygiene or to the environmental conditions on, under or about the Property, including, but not limited to, soil and ground water conditions. Trustor shall not use, generate, manufacture, release, store or dispose of, or permit to be used, generated, manufactured, released, stored or disposed of on, under, about or from the Property, or transport to or from or permit to be transported to or from the Property, any Hazardous Materials in violation of any Hazardous Materials Laws. Trustor hereby agrees at all times to comply fully and in a timely manner with, and to cause all of Trustor's employees, agents, contractors and subcontractors to comply with, all Hazardous Materials Laws.
31 Trustor shall have the right to contest, at Trustor's sole cost and expense, the applicability of any Hazardous Materials Laws or the grounds for any attempted enforcement of any Hazardous Materials Laws provided that: (i) as a condition to any such contest, Trustor shall deliver to Beneficiary, at Trustor's sole cost and expense, such test results, consultants' reports and other information regarding the then current environmental condition of the Property and the effect that any additional delay that may result from any such contest would have on such environmental condition, as Beneficiary may reasonably require; (ii) Trustor shall have no right to contest if the delay that might result from any such contest would result in any material deterioration in the environmental condition of the Property or any portion thereof or in any material deterioration in the environmental condition of any other property; (iii) Trustor shall have no such right to contest if, as a result of such contest, any governmental City would have the right to enforce a lien on all or any portion of the Property; and (iv) Trustor shall give prior written notice to Beneficiary of Trustor's intention to exercise such right of contest and, upon written request of Beneficiary, shall deliver to Beneficiary a good and sufficient bond or other security reasonably satisfactory to Beneficiary for the costs which would be incurred in complying with such Hazardous Materials Laws. Should a new chemical, material or substance become prohibited by federal, state or local regulation, or become known to pose a hazard, Trustor shall take measures to comply with the law or regulation, and/or take such steps as are necessary to minimize environmental threats. (c) Trustor shall immediately advise Beneficiary in writing of: (i) any and all enforcement, cleanup, removal or other governmental or regulatory actions relating to the Property instituted, completed or threatened pursuant to any environmental laws, statutes, ordinances, rules and regulations, including any Hazardous Materials Laws, and of any notices received by Trustor with respect to the foregoing; (ii) Trustor's discovery of any claim made or clearly threatened in writing by any third party (other than by a governmental City) and of any claim made or clearly threatened (whether or not in writing) by any governmental City against Trustor or the Property relating to damage, contribution, cost recovery compensation, loss or injury resulting from any Hazardous Materials (the matters set forth in clauses (i) and (ii) above are hereinafter referred to as "Hazardous Materials Claims"); and (iii) Trustor's discovery of any occurrence or condition on any real property adjoining or in the vicinity of the Property that could cause the Property or any part thereof to be classified as "border -zone property" under the provisions of California Health and Safety Code Sections 25220, et seq., or any regulation adopted in accordance therewith, or to be otherwise subject to any restrictions on the ownership, occupancy, transferability or use of the Property under any Hazardous Materials Laws. Beneficiary shall have the right to join and participate in, as a party if it so elects, any legal proceedings or actions initiated in connection with any Hazardous Materials Claims and to have its reasonable attorneys' fees in connection therewith paid by Trustor. Trustor shall also immediately deliver to Beneficiary a copy of any notice of any violation of environmental laws, including Hazardous Materials Laws, hereafter received by Trustor.
32 (d) Without Beneficiary's prior written consent, which shall not be unreasonably withheld or delayed, Trustor shall not take any remedial action in response to the presence of any Hazardous Materials on, under or about the Property, nor enter into any settlement agreement, consent decree or other compromise in respect to any Hazardous Materials Claims, which remedial action, settlement, consent or compromise might, in Beneficiary's reasonable judgment, impair the value of Beneficiary's security hereunder; provided, however, that Beneficiary's prior consent shall not be necessary in the event that the presence of any Hazardous Materials on, under or about the Property either poses an immediate threat to the health, safety or welfare of any individual or is of such a nature that an immediate remedial response is necessary and it is not possible to obtain Beneficiary's consent before taking such action, provided that in such event Trustor shall notify Beneficiary as soon as practicable of any action so taken. Beneficiary agrees not to withhold its consent, where such consent is required hereunder, if either (i) a particular remedial action is ordered by a court of competent jurisdiction; (ii) Trustor establishes to the reasonable satisfaction of Beneficiary that there is no reasonable alternative to such remedial action which would result in less impairment of Beneficiary's security hereunder; (iii) all federal, state and local governmental agencies having jurisdiction have approved of or required the particular remedial action; or (iv) a particular remedial action is recommended by a reputable environmental consultant selected or approved by Beneficiary in a report which is satisfactory to Beneficiary in its reasonable discretion.
(e) Trustor hereby agrees to defend (with counsel approved by Beneficiary), indemnify and hold Beneficiary harmless from and against, and shall reimburse Beneficiary for any and all Claims (as defined below). Trustor hereby expressly waives, with respect to any Claims, any immunity to which Trustor may otherwise be entitled under any industrial or workers' compensation laws. As used herein, "Claims" means any and all actual out -of-pocket cost (including, without limitation, attorneys' fees, ex penses and court costs), expense or loss arising from any claim, liability, damage, injunctive relief, injury to person, property or natural resources, fine, penalty, action and cause of action incurred by or asserted against Beneficiary and arising, directly or indirectly, in whole or in part, out of the release, discharge, deposit or presence, or alleged or suspected release, discharge, deposit or presence, of any Hazardous Materials at, on, about, under, within or from the Property, or in or adjacent to any part of the Property, or in the soil, ground water or soil vapor on or under the Property or elsewhere in connection with the transportation of Hazardous Materials to or from the Property in violation of any Hazardous Materials Laws, whether or not known to Trustor or Beneficiary, whether foreseeable or unforeseeable, regardless of the source of such release, discharge, deposit or presence and regardless of when such release, discharge, deposit or presence occurred or is discovered, provided however tha t this indemnity shall not extend to affirmative acts by Beneficiary which Trustor establishes are responsible for such release, discharge, deposit or presence, or alleged or suspected release, discharge, deposit or presence of any Hazardous Materials, or for increasing the damage resulting from actual, alleged,
33 or suspected release, discharge, deposit or presence of any Hazardous Materials.
Without limiting the generality of the foregoing and for purposes of clarification only, Claims also include all actual out-of-pocket costs incurred by Beneficiary in connection with (i) determining whether the Property is in compliance or the amount of money required to remediate any environmental contamination, and causing the Property to be or become in compliance, with all applicable Hazardous Materials Laws, (ii) any removal or remediation of any kind and disposal of any Hazardous Materials present at, on, under or within the Property or released from the Property to the extent required by applicable Hazardous Materials Laws in effect at the time of such removal, remediation or disposal, and (iii) any repair of any damage to the Property or any other property caused by any such removal, remediation or disposal.
The rights of Beneficiary hereunder shall not be limited by any investigation or the scope of any investigation undertaken by or on behalf of Beneficiary in connection with the Property prior to the date hereof.
1.15 Access Law.
(a) Trustor agrees that Trustor and the Property shall at all times strictly comply to the extent applicable with the requirements of the Americans with Disabilities Act of 1990, the Fair Housing Amendments Act of 1988, all federal, state and local laws and ordinances related to disabled access, and all statutes, rules, regulations, and orders of governmental bodies and regulatory agencies or orders or decrees of any court adopted or enacted with respect thereto including the Americans with Disabilities Act Accessibility Guidelines for Buildings and Facilities, as now existing or hereafter amended or adopted (collectively, "Access Laws").
(b) Notwithstanding any limits set forth herein or in any other document on Trustor's obligation to obtain Beneficiary's approval of alterations of the Property, Trustor shall not alter or permit any tenant or other person to alter the Property in any manner which would increase Trustor's responsibilities for compliance with the Access Laws without the prior written approval of Beneficiary.
(c) Trustor agrees to give prompt notice to Beneficiary of any claims of violations of any Access Laws and of the commencement of any proceedings or investigations which relate to compliance with any of the Access Laws. (d) Trustor shall indemnify, defend, and hold harmless Beneficiary from and against any and all claims, demands, damages, costs, expenses, losses, liabilities, penalties, fines and other proceedings, including reasonable attorney fees and expenses arising directly or indirectly from or out of or in any way connected with any failure of the Property to comply with any of the Access Laws. The obligations and liabilities of Trustor unde r this section shall survive
34 any termination, satisfaction, assignment, judicial or nonjudicial foreclosure proceeding, or delivery of a deed of lieu of foreclosures.
ARTICLE II
EVENTS OF DEFAULT
2.01 Default. The Trustor will be in default under this Deed of Trust if:
(a) There shall be a failure by the Trustor to make the payment of any installment of principal or interest or any other sum secured hereby which continues for 15 days after such payment is due; or
(b) There shall be a failure to comply with any other term, obligation, covenant or condition contained in this Deed of Trust; provided, however, that Trustor shall not be in default if Trustor, after Beneficiary sends written notice demanding cure of such failure, (i) cures the failure within 30 days, or (ii) if the cure requires more than 30 days, immediately commences to cure the failure and thereafter diligently prosecutes such cure to completion within 90 days after giving notice of the default.
(c) There occurs an appointment, pursuant to an order of a court of competent jurisdiction, of a trustee, receiver or liquidator of the Property or any part thereof, or of the Trustor, or any termination or voluntary suspension of the transaction of business of the Trustor, or any attachment, execution or other judicial seizure of all or any substantial portion of the Borrower's assets, which appointment, attachment, execution or seizure is not discharged within 45 days; or (d) The Trustor, or any general partner or joint venturer of the Trustor at any level or any trustee of Trustor, shall file a voluntary case under any applicable bankruptcy, insolvency, debtor relief, or other similar law now or hereafter in effect, or shall consent to the appointment of or taking possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator (or similar official) of the Trustor or such pers on or entity or for any part of the Property or any substantial part of the Trustor or such person's or entity's property, or shall make any general assignment for the benefit of the Trustor’s or such person's or entity's creditors, or shall fail generally to pay the Trustor’s or such person's or entity's debts as they become due or shall take any action in furtherance of any of the foregoing, provided, however, that any such default with respect to any general partner of the Trustor at any level shall be d eemed cured if the limited partners of the Trustor replace such general partner in accordance with the partnership agreement of the Trustor within 45 days with another general partner acceptable to Beneficiary and approved by the bankruptcy court if such approval is necessary, provided however that if the limited partners' diligent efforts (with due regard to any injunction or other order resulting from a pending bankruptcy or other legal proceeding, if applicable) have not succeeded in the replacement of the general partner within 45 days and (i) they continue to diligently pursue (with due
35 regard to any injunction or other order resulting from a pending bankruptcy or other legal proceeding, if applicable) the appointment of an acceptable substitute general partner, and (ii) no other default has occurred and is continuing, then this time limitation shall be extended as necessary; or
(e) A court having jurisdiction shall enter a decree or order for relief in respect of Trustor, or any general partner or joint venturer of the Borrower at any level or any trustee of the Borrower, in any involuntary case brought under any bankruptcy, insolvency, debtor relief, or other similar law now or hereafter in effect, or the Borrower or such general partner, joint venturer or trustee shall consent to or shall fail to oppose any such proceeding, or any such court shall enter a decree or order appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar official) of the Borrower or such person or entity or for any part of the Property or any substantial part of the Borrower's or such person's or entity's property, or ordering the winding up or liquidation of the affairs of the Borrower or any such person or entity, and such decree or order shall not be dismissed within 60 days after the entry thereof, provided, however, that any such default with respect to any general partner of the Borrower at any level shall be deemed cured if the limited partners of the Trustor replace such general partner in accordance with the Partnership agreement of the Trustor within 45 days with another general partner acceptable to Beneficiary and approved by any court whose approval is necessary, provided however that if the limited partners' diligent efforts (with due regard to any injunction or other order resulting from a pending bankruptcy or other legal proceeding, if applicable) have not succeeded in the replacement of the general partner within 45 days and (i) they continue to diligently pursue (with due regard to any injunction or other order resulting from a pending bankruptcy or other legal proceeding, if applicable) the appointment of an acceptable substitute general partner, and (ii) no other default has occurred and is continuing, then this time limitation shall be extended as necessary; or
(f) A material breach or default of any term, covenant, condition, provision, representation or warranty occurs under any agreement which guarantees any part of the indebtedness or obligations secured by this Deed of Trust or any of the events enumerated in subparagraph (c), (d) or (e) above occurs with regard to any guarantor of any indebtedness or obligations secured by this Deed of Trust, or there occurs the revocation, limitation or termination of the obligations of any such guarantor except in accordance with the express written terms of the instrument of guaranty; or
(g) There has occurred a default under any term, covenant, agreement, condition, provision, representation or warranty contained in any of the Related Documents or any other mortgage or deed of trust encumbering all or any portion of the Property, regardless of whether such mortgage or deed of trust is prior or subordinate to this Deed of Trust, or contained in any note or other instrument secured thereby, or contained in any other instrument securing such note, if such default remains uncured following any applicable notice, grace or cure period; or
36 (h) There has occurred a violation of any condition, covenant or restriction recorded against or affecting the Property, and such violation has not been cured within any applicable cure period provided therein; or (i) Any representation or disclosure made to the Beneficiary by the Trustor or by any guarantor of any indebtedness or obligations secured by this Deed of Trust proves to be materially false or misleading on the date as of which made, whether or not that representation or disclosure appears in this Deed of Trust; or
(j) A change of the constituent general partner of the Trustor, whether voluntarily or involuntarily or otherwise, or the sale, conveyance, transfer, disposition, charging or encumbrance of any such general partner interests, without the prior written consent of the Beneficiary, provided however that any such default with respect to any general partner of the Trustor at any level shall be deemed cured if the limited partners of the Trustor replace such general partner in accordance with the partnership agreement of the Trustor within 45 days with another general partner acceptable to Beneficiary and approved by any court whose approval is required, provided, however, that if the limited partner's diligent efforts (with due regard to any injunction or other order issued in a pending legal proceeding, if applicable) have not succeeded in the replacement of the general partner within 45 days and (i) they continue to diligently pursue (with due regard to any injunction or other order issued in a pending legal proceeding, if applicable) the appointment of an acceptable general partner, and (ii) no other default has occurred and is continuing, then this time limitation shall be extended as necessary. Notwithstanding the foregoing, Beneficiary hereby approves the following transfers of interest in the Trustor: The admission of an investor as a limited partner in Trustor.
ARTICLE III
REMEDIES
3.01 Remedies. If the Trustor is in default under the Deed of Trust, the Beneficiary may, at its option, and without notice to or demand upon the Trustor:
(a) Declare any or all indebtedness secured by this Deed of Trust to be due and payable immediately;
(b) Upon five days' notice to Trustor, enter onto the Property, in person or by agent or by court -appointed receiver, and take any and all steps which may be desirable in the Beneficiary's sole discretion to complete any unfinished construction, to manage and operate the Property and to do any and all other acts which the Beneficiary deems proper to protect the security hereof and, either with or without taking possession, in its own name or in the name of the Trustor, sue for o r otherwise collect and receive the rents, royalties, income and profits of the Property, and the Beneficiary may apply any rents, royalties, income
37 or profits collected against the indebtedness secured by this Deed of Trust without in any way curing or waiving any default of the Trustor; (c) Bring a court action to foreclose this Deed of Trust or to enforce its provisions or any of the indebtedness or obligations secured by this Deed of Trust;
(d) Cause any or all of the Property to be sold under the power of sale granted by this Deed of Trust in any manner permitted by applicable law; and (e) Exercise any other right or remedy available under the Loan Documents or any other agreement of the Trustor, or under any guaranty of any obligations of the Trustor to the Beneficiary relating to the Loan, or otherwise available at law or in equity.
3.02 Power of Sale . In connection with the exercise of the power of sale granted by this Deed of Trust:
(a) Beneficiary may elect to cause the Property or any part thereof to be sold under the power of sale herein granted in any manner permitted by applicable law. In connection with any sale or sales hereunder, Beneficiary may elect to treat any of the Property which consists of a right in action or which is property that can be severed from the real property covered hereby or any improvements thereon without causing structural damage thereto as if the same were personal property, and dispose of the same in accordance with applicable law, separate and apart from the sale of real property. Any sale of any personal property hereunder shall be conducted in any manner permitted by Section 9501 or any other applicable section of the California Commercial Code. Where the Property consists of real and personal property or fixtures, whether or not such personal property is located on or within the real property, Beneficiary may elect in its discretion to exercise its rights and remedies against any or all of the real property, personal property, and fixtures in such order and manner as is now or hereafter permitted by applicable law.
(b) Without limiting the generality of the foregoing, Beneficiary may, in its sole and absolute discretion and without regard to the adequacy of its security, elect to proceed against any or all of the real property, personal property and fixtures in any manner permitted under Section 9501(4)(a) of the California Commercial Code; and if the Beneficiary elects to proceed in the manner permitted under Section 9501(4)(a)(ii) of the California Commercial Code, the power of sale herein granted shall be exercisable with respect to all or any of the real property, personal property and fixtures covered hereby, as designated by Beneficiary, and the Trustee is hereby authorized and empowered to conduct any such sale of any real property, personal property and fixtures in accordance with the procedures applicable to real property.
38 (c) Where the Property consists of real property and personal property, any reinstatement of the obligation secured hereby, following default and an election by the Beneficiary to accelerate the maturity of said obligation, which is made by Trustor or any other person or entity permitted to exercise the right of reinstatement under Section 2924c of the California Civil Code or any successor statute, shall, in accordance with the terms of California Commercial Code Section 9501(4)(c)(iii), not prohibit the Beneficiary from conducting a sale or other disposition of any personal property or fixtures or from otherwise proceeding against or continuing to proceed against any personal property or fixtures in any manner permitted by the California Commercial Code; nor shall any such reinstatement invalidate, rescind or otherwise affect any sale, disposition or other proceeding held, conducted or instituted with respect to any personal property or fixtures prior to such reinstatement or pending at the time of such reinstatement. Any sums paid to Beneficiary in effecting any reinstatement pursuant to Section 2924c of the California Civil Code shall be applied to the secured obligation and to the Beneficiary's and Trustee's reasonable costs and expenses in the manner required by Section 2924c.
(d) Should Beneficiary elect to sell any portion of the Property which is real property or which is personal property or fixtures that Beneficiary has elected under Section 9501(4)(a)(ii) of the California Commercial Code to sell together with real property in accordance with the laws governing a sale of real property, Beneficiary or Trustee shall give such notice of default and election to sell as may then be required by law. Thereafter, upon the expiration of such time and the giving of such notice of sale as may then be required by law, and without the necessity of any demand on Trustor, Trustee, at the time and place specified in the notice of sale, shall sell said real property or part thereof at public auction to the highest bidder for cash in lawful money of the United States. Trustee may, and upon request of Beneficiary shall, from time to time, postpone any sale hereunder by public announcement thereof at the time and place noticed therefor. (e) If the Property consists of several lots, parcels or items of property, Beneficiary may: (i) designate the order in which such lots, parcels or items shall be offered for sale or sold, or (ii) elect to sell such lots, parcels or items through a single sale, or through two or more successive sales, or in any other manner Beneficiary deems in its best interest. Any person, including Trustor, Trustee or Beneficiary, may purc hase at any sale hereunder, and Beneficiary shall have the right to purchase at any sale hereunder by crediting upon the bid price the amount of all or any part of the indebtedness hereby secured. Should Beneficiary desire that more than one sale or other disposition of the Property be conducted, Beneficiary may, at its option, cause the same to be conducted simultaneously, or successively, on the same day, or at such different days or times and in such order as Beneficiary may deem to be in its best inter ests, and no such sale shall terminate or otherwise affect the lien of this Deed of Trust on any part of the Property not sold until all indebtedness secured hereby has been fully paid. In the event Beneficiary elects to dispose of the Property through more than one sale, Trustor agrees to pay the costs and expenses of each such sale and of any judicial
39 proceedings wherein the same may be made, including reasonable compensation to Trustee and Beneficiary, their agents and counsel, and to pay all expenses, liabilities and advances made or incurred by Trustee in connection with such sale or sales, together with interest on all such advances made by Trustee at the lower of the interest rate set forth in the Note or the maximum rate permitted by law to be charged by Trustee.
(f) Upon any sale hereunder, Trustee shall execute and deliver to the purchaser or purchasers a deed or deeds conveying the property so sold, but without any covenant or warranty whatsoever, express or implied, whereupon such purchaser or purchasers shall be let into immediate possession; and the recitals in any such deed or deeds of facts, such as default, the giving of notice of default and notice of sale, and other facts affecting the regularity or validity of such sale or disposition, shall be conclusive proof of the truth of such facts and any such deed or deeds shall be conclusive against all persons as to such facts recited therein.
3.03 Sale Proceeds. The proceeds of any sale under this Deed of Trust will be applied in the following manner:
FIRST: Payment of the costs and expenses of the sale, including but not limited to the Trustee's fees, legal fees and disbursements, title charges and transfer taxes, and payment of all expenses, liabilities and advances of the Trustee, together with interest on all advances made by the Trustee at the lower of 10% per annum or the maximum rate permitted to be charged by the Trustee under applicable law.
SECOND: Payment of all sums expended by the Beneficiary under the terms of this Deed of Trust and not yet repaid, together with interest on such sums at the interest rate set forth in the Note.
THIRD: Payment of the indebtedness and obligations of the Trustor secured by this Deed of Trust in any order that the Beneficiary chooses.
FOURTH: The remainder, if any, to the person or persons legally entitled to it.
3.04 Waiver. Trustor, for itself and for all persons hereunder claiming through or under it or who may at any time acquire a lien on all or any part of the Property or any interest therein, hereby expressly waives and releases all rights to direct the order in which any of the Property and/or any other property now or hereafter constituting security for any of the indebtedness secured hereby will be sold in the event of any sale under this Deed of Trust, and also any right to have any of the Property and/or any other property now or hereafter constituting security for any of the indebtedness secured hereby marshaled upon any foreclosure of this Deed of Trust or of any other security for any of said indebtedness.
40 3.05 Remedies Cumulative. All remedies contained in this Deed of Trust are cumulative, and the Beneficiary also has all other remedies provided by law or in any other agreement between Trustor and the Beneficiary. No delay or failure by the Beneficiary to exercise any right or remedy under this Deed of Trust will be construed to be a waiver of that right or remedy or of any default by Trustor. The Beneficiary may exercise any one or more of its rights and remedies at its option without regard to the adequacy of its security.
3.06 Costs and Fees. Trustor will pay all of the Beneficiary's and the Trustee's costs, fees and expenses incurred in any efforts to enforce any terms of this Deed of Trust or in the performance of its or their duties hereunder, whether or not any lawsuit is filed, including but not limited to legal fees and disbursements, foreclosure costs and title insurance or trustee's sale guaranty charges and any other governmental charges or impositions imposed by any governmental authority on the Trustee or the Beneficiary by reason of its or their interest in the Note, any note evidencing a future advance, or this Deed of Trust.
3.07 Application of Rents to Protecting and Preserving the Property . If, as a result of an event of default, Beneficiary elects to enforce its rights under Section 2938(c) of the California Civil Code by any means other than the appointment of a receiver and Beneficiary receives rent payments from the Property pursuant to such enforcement, and Trustor thereafter makes written demand upon Beneficiary to pay the reasonable costs of protecting and preserving the Property pursuant to Section 2938(g) of the California Civil Code (a "2938(g) Demand"), then Trustor agrees that the obligation of Beneficiary to pay the "reasonable costs of protecting and preserving the Property" pursuant to Section 2938(g) shall be deemed fully satisfied upon payment by Beneficiary of only the following costs and only from and to the extent of rent payments actually received by Beneficiary: (i) delinquent real property taxes with respect to the Property only to the extent that such amounts subject the Property to an imminent tax sale which has been set for sale by the applicable taxing authority pursuant to applicable law; (ii) property damage insurance, and liability insurance in such amounts, with such insurers and pursuant to such terms as Beneficiary shall have previously approved for Trustor prior to the default or event of default; provided, however, that Beneficiary shall not be required to purchase any rental interruption insurance or earthquake insurance and provided further that, Beneficiary may satisfy all or any portion of such obligation by insuring the Property through Beneficiary's blanket insurance policy or policies; and (iii) the reasonable cost of compliance with building codes only to the extent the applicable governmental building authority makes a written demand to Beneficiary to comply therewith. Notwithstanding anything to the contrary contained herein, Beneficiary may (pursuant to such 2938(g) Demand or otherwise), but shall not be obligated to, pay out of such rent payments actually received any other reasonable costs which Beneficiary believes, in its sole discretion, is necessary for the protection and preservation of the Property (it being the intent of Trustor and Beneficiary that nothing contained herein shall be deemed to impair, define or limit Beneficiary's rights or remedies pursuant to this Deed of Trust, including, but not limited to, the right of Beneficiary as beneficiary under this Deed of Trust and/or the other Loan Documents to protect and preserve the security for this Deed of Trust in the event of default).
41 ARTICLE IV
MISCELLANEOUS
4.01 Invalidity. The invalidity or unenforceability of any one or more provisions of this Deed of Trust will in no way affect any other provision.
4.02 Loan Statement . Trustor agrees to pay to the Beneficiary a reasonable charge, not to exceed the maximum allowed by law, for giving any statement of the status of the obligations secured by this Deed of Trust.
4.03 Late Charge . If Trustor shall fail to make any payment due hereunder within 15 days after the date the same is due and payable, a late charge by way of damages shall be immediately due and payable in the amount of six percent of the overdue amount. Trustor recognizes that default in making the payments herein agreed to be paid when due will result in the Beneficiary incurring additional expense in servicing the Loan, in loss to the Beneficiary of the use of the money due, and in frustration to the Beneficiary in meeting its loan commitments. Trustor agrees that, if for any reason it fails to pay the amounts due under this Deed of Trust within 15 days after the date when due, the Beneficiary shall be entitled to damages for the detriment caused thereby, but that it is extremely difficult and impractical to ascertain the extent of such damages.
Trustor agrees that such amount as is specified herein is a reasonable approximation of damages for late payment.
4.04 Notices. All notices given under this Deed of Trust must be in writing and will be effectively served upon personal delivery or, if mailed, no later than 5 days after deposit in certified United States mail, postage prepaid, return receipt requested or overnight delivery service, sent to the Beneficiary at its address appearing in the recording information block on the front page of this Deed of Trust and sent to the Trustor at its address appearing below its signature, which addresses may be changed by written notice. However, the service of any notice of default or notice of sale under this Deed of Trust as required by law will, if mailed, be effective on the date of mailing.
4.05 Beneficiary Consent. Without affecting Trustor's liability for the payment of any of the indebtedness secured by this Deed of Trust, the Beneficiary may from time to time and without notice to the Trustor (a) release any person liable for the payment of that indebtedness, (b) extend or modify the terms of payment of that indebtedness, (c) accept additional real or personal property of any kind as security, or alter, substitute or release any property securing that indebtedness, or (d) cause the Trustee to consent to the making of any map or plat of the Property, or to reconvey any part of the Property, or to join in granting any easement or creating any restriction on the Property, or to join in any subordination or other agreement affecting this Deed of Trust.
4.06 Trustee Acceptance. Trustee accepts this Trust when this Deed of Trust, duly executed and acknowledged, is made a public record as provided by law.
4.07 Statute of Limitations . The Trustor waives all present and future statutes of limitations as a defense to any action to enforce the provisions of this Deed of Trust or
42 to collect any indebtedness secured by this Deed of Trust to the fullest extent permitted by law, provided that such waiver shall not apply at any time after payment in full of all sums secured by the Deed of Trust.
4.08 Interpretation. The term "Trustor" includes both the original Trustor and any subsequent owner or owners of any of the Property, and the term "Beneficiary" includes the original Beneficiary and also any future owner or holder, including pledgees and participants, of the Note or any interest therein. Whenever the context requires, the singular includes the plural and vice versa and each gender includes each other gender.
The headings of the articles of this Deed of Trust are for convenience only and do not limit its provisions.
4.09 Consent. The Beneficiary's consent to any act or omission by Trustor will not be a consent to any other or subsequent act or omission or a waiver of the need for such consent in any future or other instance.
4.10 Successors. The terms of this Deed of Trust will bind and benefit the heirs, legal representatives, successors and assigns of Trustor and Beneficiary and the successors in trust of the Trustee. If more than one person is named as Trustor, each will be jointly and severally liable to perform the obligations of the Trustor.
4.11 California Law. This Deed of Trust will be governed by California law.
4.12 Removal of Trustee . The Beneficiary may remove the Trustee or any successor Trustee at any time or times and appoint a successor Trustee by recording a written substitution in the county where the real property covered by this Deed of Trust is located, or in any other manner permitted by law. Upon that appointment, all of the powers, rights and authority of the Trustee will immediately become vested in its successor.
4.13 Requests for Notice of Default and Notice of Sale . The undersigned Trustor requests that a copy of any notice of default and any notice of sale hereunder be mailed to Trustor at Trustor's address hereinbefore set forth.
IN WITNESS WHEREOF, the undersigned has executed this Deed of Trust the day and year first hereinabove written.
TRUSTOR:
, 2025 Self Help Enterprises, a California non-
profit corporation
By:
Its:
43 STATE OF CALIFORNIA )
) ss
COUNTY OF )
On ________________, before me the undersigned, a notary public, personally appeared _______________________ and _______________________,
( ) personally known to me, or
( ) proved to me on the basis of satisfactory evidence
to be the persons whose names are subscribed to the within instrument and acknowledged to me that they executed the same in their authorized capacities, and that by their signatures on the instrument the persons, or the entity upon behalf of which the persons acted, executed the instrument.
WITNESS my hand and official seal.
Signature
44 “EXHIBIT A”
DESCRIPTION OF REAL PROPERTY