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HomeMy WebLinkAboutCDC/2004-21 (Note: See Companion Resolution CDC/2004-22) RESOLUTION NO. CDC/2004-21 2 3 A RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO APPROVING AND AUTHORIZING THE EXECUTIVE DIRECTOR OF THE AGENCY TO EXECUTE THE TERMINATION AGREEMENT TO THE 2001 HOME PROGRAM COMMUNITY HOUSING DEVELOPMENT ORGANIZATION (CHDO) LOAN AGREEMENT BY AND BETWEEN NEIGHBORHOOD HOUSING SERVICES OF THE INLAND EMPIRE, INC (NHS) AND THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO (AGENCY). 4 5 6 7 8 9 WHEREAS, NHS and the Agency entered into that certain 2001 HOME Program Community Housing Development Organization (CHDO) Loan Agreement dated September 17, 2001 ("Loan Agreement"), and NHS and the Agency mutually desire to terminate the Loan 10 11 12 Agreement in accordance with the HOME Loan Termination Agreement ("Termination Agreement") for the purpose of transferring said Properties as referred to under the Loan 13 Agreement to Frazee Community Center, Inc., (Frazee) pursuant to the terms of the 2004 14 15 Assumption Agreement between NHS, Agency and Frazee; and WHEREAS, NHS covenants and warrants that all actions required under the Loan Agreement have been completed with regards to acquisition, rehabilitation and management of the Properties as set forth in the Loan Agreement and desires and agrees to transfer title to the 16 17 18 Properties as described in the Loan agreement to Frazee in accordance with the Assumption 19 Agreement by and between the Agency, NHS and Frazee; 20 NOW, THEREFORE, THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO DOES HEREBY RESOLVE, DETERMINE AND ORDER, AS FOLLOWS: 21 22 23 The Community Development Commission ("Commission') hereby Section 1. 24 approves the attached Termination Agreement of even date herein. The Executive Director of 25 the Agency is hereby authorized and directed to execute the Termination Agreement on behalf of the Agency, together with such technical and conforming changes as may be recommended -1- P:\Ageadas\Resolutlons\Resolutions\2004\()4..07-06 Frazee NUS HOME Agnut Reso A.doc CDC/2004-21 by the Executive Director and Agency Counsel. The Executive Director of the Agency is 2 further authorized to execute any other documents that are necessary to terminate the Loan 3 Agreement as deemed appropriate and necessary by the Executive Director and Agency 4 counsel. 5 Section 2. 6 11/ 7 11/ 8 11/ 9 11/ 10 11/ 11 11/ 12 11/ 13 11/ 14 11/ 15 11/ 16 11/ 17 18 11/ 19 11/ 20 11/ 21 11/ 22 11/ 23 11/ 24 /11 25 11/ The Resolution shall become effective immediately upon its adoption. -2- p:\Agendas\Resolutions\Resolutions\2004\o4-07.06 Frazee NHS HOME Agrmt Reso A.doc CDC/2004-21 5 A RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO APPROVING AND AUTHORIZING THE EXECUTIVE DIRECTOR OF THE AGENCY TO EXECUTE THE TERMINATION AGREEMENT TO THE 2001 HOME PROGRAM COMMUNITY HOUSING DEVELOPMENT ORGANIZATION (CHDO) LOAN AGREEMENT BY AND BETWEEN NEIGHBORHOOD HOUSING SERVICES OF THE INLAND EMPIRE, INC (NHS) AND THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO (AGENCY). 2 3 4 6 I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the 7 Community Development Commission of the City of San Bernardino at a j t. reg. meeting 8 thereof, held on the 19th day of July 9 Commission Members: Aves Navs 10 ESTRADA X 11 LONGVILLE --L 12 MCGINNIS --1L 13 DERRY X 14 KELLEY -L 15 JOHNSON X 16 MC CAMMACK , 2004, by the following vote to wit: Abstain Absent 17 18 The foregoing resolution is hereby approved this Se~eta 'J" d y of J~2004. .K-~ J Esther Estrada, Vice-Chairperson Community Development Commission City of San Bernardino 19 23 20 21 22 By: 24 25 -3- P:\Agendas\ResolutioDI\ResolutloDs\2004\04-07-06 Frazee NHS HOME Agrmt Reso A.doc CDC/2004-21 REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO 2004 HOME LOAN TERMINATION AGREEMENT NEIGHBORHOOD HOUSING SERVICES OF THE INLAND EMPIRE, INC THE 2001 HOME LOAN AGREEMENT dated as of October 1, 2001, by and between the Redevelopment Agency of the City of San Bernardino, a public body corporate and politic (the "Agency"), and Neighborhood Housing Services of the Inland Empire, Inc., a California non-profit corporation (the "Participant") is hereby terminated as of July 19, 2004 by the terms and provisions of this 2004 Home Loan Termination Agreement (this "Termination Agreement") as further described below and subject to the conditions and as agreed to hereinafter by the parties. NOW THEREFORE, THE PARTIES TO THIS 2004 HOME LOAN TERMINATION AGREEMENT COVENANT AND AGREE AS FOLLOWS: Section 1. (a) The parties intend that this Termination Agreement shall effectively terminate the above referenced 2001 Home Loan Agreement (the "Agreement") dated as of October I, 2001, based upon the reasons hereinafter set forth. The Participant covenants and warrants that all actions required of the Participant pursuant to the Agreement required to be undertaken by the Participant have been completed in a workmanlike and professional manner, including, the rehabilitation of the Rental Units (as defined in the Agreement). The Participant covenants and warrants that 9 tenants are currently occupying the Rental Units located on the Parcels (as defined in the Agreement) since the date of the Agreement and the Participant has rented, leased and otherwise authorized qualified persons to occupy Rental Units since the date of the Agreement. (b) The Participant further certifies and represents to the Agency that the entire amount of the $129,000 intended for the acquisition of the Parcels and the $18,000 to be used for the rehabilitation of the Rental Units have been used solely in accordance with the purposes and intents of the Agreement and that all of such funds have been fully expended prior to this date. (c) The parties desire for their independent reasons as well as for the mutual benefit of the parties hereto, to cause the Agreement to be terminated as of the date set forth herein and to cause the transfer of the title to the Parcels to vest in the name of Frazee Community Center, a California non-profit corporation ("Frazee"). All duties, obligations and performance requirements of the Participant under the Agreement shall be void and no longer enforceable as against the Participant from and after the affective date of this Termination Agreement and execution by the Agency and Frazee of that certain FRAZEE COMMUNITY CENTER 2004 HOME - COMMUNITY HOUSING DEVELOPMENT ORGANIZATION (CHDO) -LOAN AGREEMENT dated as of July 19, 2004 by and between the Agency and Frazee (the "2004 Home Loan Agreement"), and that certain Loan Assumption Agreement, dated as of July 19, 2004 by and between the Agency and Frazee (the "Loan Assumption Agreement"). All rights, duties and obligations of the parties to each other, including the I P:\Agendas\Agreements-Amendments\Agrmts-Amend 2004\04-07-06 Frazee 2004 HOME Loan Term Agr.doc CDC/2004-21 obligation of the Participant to indemnify the Agency, shall be as set forth in this Termination Agreement and not as otherwise required in the Agreement. (d) The parties hereby represent and warrant that neither party is in default of their respective obligations and duties pursuant to the Agreement. The parties intend to mutually agree to terminate the Agreement by the execution of this Termination Agreement and such termination shall not place the Agency in any greater risk of financial liability nor shall the Agency be deemed to have conferred any monetary benefit upon the Participant. The parties recognize that this Termination Agreement may be validly executed by the undersigned individuals without any further actions of their respective governing boards. This Termination Agreement is intended to place both parties in the same position they held prior to the undertaking of the tasks required pursuant to the Agreement and the origination of the HOME Loan (as hereinafter defined). Section 2. Notwithstanding the terms and conditions of the Agreement, the Agency shall approve the transfer of title of the Parcels more specifically described in Exhibit "A" attached hereto, to Frazee in lieu of the repayment of the loan in the original principal amount of One Hundred Forty Seven Thousand Dollars ($147,000) (the "HOME Loan") which was originated by the Agency to the Participant from 2000/2001 HOME Program funds. Such transfer shall occur pursuant to the terms of both the 2004 Home Loan Agreement and the Loan Assumption Agreement. Such funds were used and applied by the Participant for the purchase and rehabilitation of the Parcels as required pursuant to the Agreement. Such forbearance of the HOME Loan and transfer of title to the Property from the Participant to Frazee shall relieve the Participant of its responsibilities under the executed Agreement, Promissory Note, Deed of Trust and the HOME Regulatory Agreement provided that all representations, covenants and warranties of the Participant set forth in Section 1 above are true and correct in all respects. Section 3. (a) The Participant represents and warrants that the Rental Units located on the Parcels are currently occupied by 9 tenants and the Parcels are otherwise free of all encumbrances and liens, including, but not limited to, property taxes, mechanical liens and any other forms of assessments or recorded mortgage documents except for the outstanding semor debt provided for in the Agreement in the principal amount of $327,503.00. (b) The Participant covenants and warrants that it shall not displace or threaten to displace any of the current tenants occupying the Rental Units prior to the termination date of this Agreement and the transfer of the Parcels to a new Purchaser. Participant further agrees to enter into a purchase and sale agreement for the transfer of the Parcels within five (5) days of execution of this Termination Agreement and will assign all leases and rents to such purchaser. Section 4. The Participant hereby agrees to indemnify and hold harmless the Agency and the City and the officials, officers, attorneys, employees and agents of the City and the Agency from and against any and all claims or liability arising from the Participant's actions under the Agreement and this Termination Agreement or from the conduct of the Participant's business or from any activity, work or things done, permitted or suffered by the Participant and shaH further indemnify and hold harmless the Agency and City and their officials, officers, attorneys, employees and agents from and against any and all claims arising from any breach or 2 P:\Agendas\Agreements-Amendments\Agnnts-Amend 2004\04.07-06 Frazee 2004 HOME Loan Tenn Agr.doc CDC/2004-21 default in the performance of any obligation of the Participant under the terms of the Agreement and this Termination Agreement arising from any negligent or wrongful act or omission of the Participant or Participant's agents, contractors, employees or invitees and from and against all costs, attorneys' fees, expenses and liability incurred in the defense of any such claim or any action or proceeding brought thereon. The Participant's agreement to indemnify and hold the Agency and City harmless shall extend to any claims or liabilities, including but not limited to claims pertaining to environmental conditions, alleged construction defects, or other matters, that may arise as a result of the Participant's acquisition, ownership, management and operation of the Property during the period of time owned by the Participant during the term of the Agreement. For the purposes hereof, "attorneys' fees" means and includes the salaries and benefits of lawyers employed by the Office of the City Attorney of the City of San Bernardino who provide legal services to the Agency in connection with any such enforcement proceedings. Section 5. Participant shall perform the following: (a)Execute a purchase and sale agreement with Frazee for the transfer of the Parcels for a total purchase price of $406,202 which purchase price includes payment of the following: (i) Payment of the senior loan in the amount of$327,503; and (ii) Payment to Participant in the amount of $78,700.00, which amount represents the equity contribution of Participant totaling $15,000.00 required to acquire the Parcels and unanticipated rehabilitation costs contributed by Participant totaling $63,699.00. (b) Enter into an escrow to facilitate the transfer of the Parcels to Frazee, (c) Execute any other document reasonably required by any title company to accomplish the intent of this Termination Agreement for the extinguishment of the HOME Loan and the transfer of title to the Parcels from the Participant to Frazee. 3 P:\Agendas\Agreements-Amendments\Agrmts-Amend 2004\04-07..06 Frazee 2004 HOME Loan Term Agr.doc CDC/2004-21 IN WITNESS HEREOF, the Agency and Participant have executed this Agreement as of the date first hereinabove set forth. AGENCY Date r /;/ hi I / PARTICIPANT Neighborhood Housing Services of the Inland Empire, Inc., a California nonprofit corporation Date BY~~'~~ Tit e: 'F.x-tvJi; e I})w e~/ By: Title: Approv d as to Form and Legal Content 4 P:\Agendas\Agrecmcnts-Amendments\Agrmts.Amcnd 2004\04-07-06 Frazee 2004 HOME Loan Term Agr.doc CDC/2004-21 Exhibit "A" Legal Description of the Property PARCEL 1 1441-1443 MOUNTAIN VIEW AVENUE APN 0146-163-43000 THE NORTH 49.6 FEET OF THE SOUTH 297.60 FEET OF THE WEST 181.5 FEET OF LOT 3, BLOCK 33, RANCHO SAN BERNARDINO, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 7, PAGE(S) 2, OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. PARCEL 2 1495 MOUNTAIN VIEW AVENUE AND 195-197 MAGNOLIA AVENUE APN 0146-163-02000 LOT 3 OF TRACT NO. 1957, KIMMEL'S MAGNOLIA TRACT, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 28, PAGE(S) 55, OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. EXCEPT THE EAST 5.00 FEET THEREOF. PARCEL 3 1379 ARROWHEAD AVENUE APN 0146-162-22000 LOT 10, BLOCK "B" OF EDELEN TRACT, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 5, P AGE(S) 35 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. PARCEL 4 1501-1503 PERSHING APN 0146-132-18000 LOT 11, TRACT NO. 1785, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 26 OF MAPS, PAGE 19, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. 5 P:\Agendas\Agreements-Amendments\Agnnts-Amend 2004\04-07-06 Frazee 2004 HOME Loan Term Agr.doc .' RECORDATION REQUESTED BY: Recorded in Official Records, County of San Bernardino, Larry Walker, Recorder REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO Doc No. 20010551913 3:00pm 12/05/01 ~OMMONWEAlrH rIrlE A ~ ~I~ WHEN RECORDED MAIL TO: Redevelopment Agency of the City of San Bernardino 201 North "E" Street Third Floor San Bernardino, California 92401-15D Attn: Executive Director 5 NON ST LN SVY CIT.CO TRANS TAX OA ')-0 Space Above This Line is For Recorder's Use Only DEED OF TRUST, SECURITY AGREEMENT, ASSIGNMENT OF LEASES AND RENTS AND FIXTURE FILING Neighborhood Housing Service THIS DEED OF TRUST, SECURITY AGREEMENT, ASSIGNMENT OF LEASES AND RENTS AND FIXTURE FILING (the "Deed of Trust") is dated October 1, 2001, among Neighborhood Housing Service (the "Trustor"), whose address is 1390 North "D" Street, San Bernardino, California 92405; the Redevelopment Agency of the City of San Bernardino, a body corporate and politic, whose address is 201 North "E" Street, Third Floor, San Bernardino, California 92401-1507 (the "Lender" or the "Beneficiary"); and First American Title Insurance Company (the "Trustee") . 1.0 CONVEYANCE AND GRANT. For valuable consideration, Trustor irrevocably grants, transfers and assigns to Trustee in trust, with power of sale, for the benefit of Lender as Beneficiary, all of Trustor's right, title, and interest in and to that certain real property described (APN 0146-162-22000 and APN 0146-132-18000, Parcel 3) in Exhibit "A" attached hereto and incorporated herein by this reference (the "Property"), together with all existing or subsequently erected or affixed buildings, improvements and fixtures; all easements, rights of way, and appurtenances and all other rights, royalties, and profits relating to the real property, including and without limitation all minerals, oil, gas, geothermal and similar matters located in San Bernardino County, State of California (the "Mortgaged Property") . 58200 1:25550.1 1 , Trustor presently assigns to the Lender all of Trustor's right, title and interest in and to all present and future leases of the Mortgaged Property and all Rents from the Mortgaged Property. In addition, Trustor grants Lender a Uniform Commercial Code security interest in the Rents and the Personal Property as set forth herein. 2.0 DEFINITIONS. The following words shall ha"\lte the following meanings when used in this Deed of Trust. Terms not otherwise defined in this Deed of Trust shall have the meanings attributed to such terms in the Uniform Commercial Code. All references to dollar amounts shall mean amounts in lawful money of the United States of America: Beneficiary. The word "Beneficiary" means the Redevelopment Agency of the City of San Bernardino, a body corporate and politic, its successors and assigns. Deed of Trust. The words "Deed of Trust" mean this Deed of Trust and Assignment of Leases and Rents and Fixture Filing among Trustor, Lender, and Trustee, and includes without limitation all assignment and security interest provisions relating to the Personal Property and Rents. Improvements. The word "Improvements" means and includes all existing improvements on the Property and all improvements to be constructed on the Property. Indebtedness. The word "Indebtedness" means all principal and, if applicable, interest payable under the Promissory Note and any amounts expended or advanced by Lender to discharge obligations of Trustor or expenses incurred by Trustee or Lender to enforce obligations of Trustor under the Promissory Note and this Deed of Trust, together with interest on such amounts. This Deed of Trust secures, in addition to the amounts specified in the Promissory Note, any future advances, together with all interest thereon, that may be made by the Lender pursuant to the Loan Agreement and/or the Related Documents so long as Trustor complies with all the terms and conditions of the Promissory Note, Loan Agreement and/or the Related Documents. Lender. The word "Lender" means the Redevelopment Agency of the City of San Bernardino, its successors and assigns. 8B2001:25550.1 2 Loan Agreement. The words "Loan Agreement" mean that certain 2000 HOME Loan Agreement, dated as of October I, 2001, by and between the Trustor and the Lender which provides for the loan to the Trustor which is secured by this Deed of Trust. Mortgaged Property. The refer to the Property, Rents, together with: words "Mortgaged Property mean and Improvements, Personal Property and all right, title, and interest (including any claim or demand or demand in law or equity) that Trustor now has or may later acquire in or to such Mortgaged Property; all easements, rights, privileges, tenements, hereditaments, and appurtenances belonging or in any way appertaining to the Mortgaged Property; all of the estate, right, title, interest, claim, demand, reversion, or remainder of Trustor in or to the Mortgaged Property, either at law or in equity, in possession or expectancy, now or later acquired; all exterior landscaping on the Mortgaged Property; all development rights or credits and air rights; all water and water rights (whether or not appurtenant to the Mortgaged Property) and shares of stock pertaining to such water or water rights, ownership of which affects the Mortgaged Property; all minerals, oil, gas, and other hydrocarbon substances and rights thereto in, on, under, or upon the Mortgaged Property and all royalties and profits from any such rights or shares of stock; all right, title, and interest of Trustor in and to any streets, ways, alleys, strips, or gores of land adjoining the Property or any part of it that Trustor now owns or at any time later acquires and all adjacent lands within enclosures or occupied by buildings partly situated on the Mortgaged Property; all intangible Mortgage Property and rights the Mortgaged Property or its operation connection with it, including, without permits, licenses, plans, specifications, contracts, subcontracts, bids, deposits services, installations, refunds due Trustor, trademarks, and service marks; relating to or used in limitation, construction for utility trade names, all of the right, title, and interest of Trustor in and to the land lying in the bed of any street, road, highway, or avenue in front of or adjoining the Property; any and all awards previously made or later to be made by any governmental authority to the present and all subsequent owners of the Mortgaged Property that may be SB2001 :25550.1 3 SB2001 :25550.1 made with respect to the Mortgaged Property as a result of the exercise of the right of eminent domain, the alteration of the grade of any street, or any other injury to or decrease of value of the Mortgaged Property, which award or awards are assigned to the Lender, and which the Lender, at its option, is authorized, directed, and empowered to collect and receive the proceeds of any such award or awards from the authorities making them and to give proper receipts and acquittances for them, and to apply them as provided in this Deed of Trust; all leases of the Mortgaged Property or any part of it now or later entered into and all right, title, and interest of the Trustor under such leases, including cash or securities deposited by the tenants to secure performance of their obligations under such leases (whether such cash or securities are to be held until the expiration of the terms of such leases or applied to one or more of the installments of rent coming due immediately before the expiration of such terms), all rights to al insurance proceeds and unearned insurance premiums arising from or relating to the Mortgaged Property, all other rights and easements of the Trustor now or later existing pertaining to the use and enjoyment of the Mortgaged Property, and all right, title, and interest of the Trustor in and to all declarations of covenants, conditions, and restrictions as may affect or otherwise relate to the Mortgaged Property; any and all proceeds of any insurance policies covering the Mortgaged Property, whether or not such insurance policies were required by the Lender as a condition of making the loan secured by this Deed of Trust or are required to be maintained by the Trustor as provided below in this Deed of Trust; which proceeds are assigned to the Lender, and which the Lender, at its option, is authorized, directed, and empowered to collect and receive the proceeds of such insurance policies from the insurers issuing the same and to give proper receipts and acquittances for such policies, and to apply the same as provided below; all plans and specifications for the Improvements; all contracts and subcontracts relating to the Improvements; all deposits (including tenants' security deposits; provided, however, that if the Lender acquires possession or control of tenants' security deposits the Lender shall use the tenants' security deposits only for such purposes as governmental requirements permit), funds, accounts, contract rights, instruments, documents, general 4 intangibles, and notes or chattel paper arising from or in connection with the Property or other Mortgaged Property; all permits, licenses, certificates, and other rights and privileges obtained in connection with the Property or other Mortgaged Property; all soils reports, engineering reports, land planning maps, drawings, construction contracts, notes, drafts, documents, engineering and architectural drawings, letters of credit, bonds, surety bonds, any other intangible rights relating to the Property and Improvements, surveys, and other reports, exhibits, or plans used or to be used in connection with the construction, planning, operation, or maintenance of the Property and Improvements and all amendments and modifications; all proceeds arising from or by virtue of the sale, lease, grant of option, or other disposition of all or any part of the Property, Personal Property, or other Mortgaged Property (consent to same is not granted or implied); and all proceeds (including premium refunds) payable or to be payable under each insurance policy relating to the Property, the Personal Property, or other Mortgaged Property; all tax refunds, bills, notes, inventories, accounts and charges receivable, credits, claims, securities, and documents of all kinds, and all instruments, contract rights, general intangibles, bonds and deposits, and all proceeds and products of the Trustor in the Mortgaged Property; all accounts, contract rights, chattel paper, documents, instruments, books, records, claims against third parties, money, securities, drafts, notes, proceeds, and other items relating to the Mortgaged Property; all proceeds of any of the foregoing. As used in this Deed of Trust, "Mortgaged Property" is expressly defined as meaning allor, when the context permits or requires, any portion of it and allor, when the context permits or requires, any interest in it. Personal Property. The words "Personal Property" mean all of the right, title and interest of Trustor now or hereafter existing in and to the following now or hereafter located in, upon, within or about, or used in connection with or generated by the construction, use, operation or occupancy of the Property and any business or activity conducted thereon or therein, together with all accessories, additions, accessions, renewals, replacements and substitutions thereto or therefore and the proceeds and products thereof: (a) all materials, 5B2001 :25550.\ 5 supplies, furniture, floor coverings window coverings, furnishings, appliances, office supplies, equipment, construction materials, vehicles, machinery, computer hardware and software, maintenance equipment, window washing equipment, repair equipment and other equipment, tools, telephone and other communications equipment, food service preparation equipment and.utensils, chinaware, glassware, silverware and hollowware, food and beverage service equipment, food items and food stuffs; (b) all books, ledgers, records accounting records, files, tax records and returns, policy manuals, papers, correspondence, and electronically recorded data; (c) all "General Intangibles" (as defined in the California Uniform Commercial Code), instruments, money, "Accounts" (as defined in the California Uniform Commercial Code), accounts receivable, notes, certificates of deposit, chattel paper, letters of credit, chooses in action, good will, rights to pay of money, rents, rental fees, equipment fees and other amounts relating to the development or use of the Property or payable by persons who utilize the Property or any of the Improvements or paid by persons in order to obtain the right to use the Property and any of the Improvements, whether or not so used; trademarks, service marks, trade dress, trade names, licenses, sales contracts, deposits, plans and specifications, drawings, working drawings, studies, maps, surveys; soils, environmental engineering or other reports, arc hi tectural and engineering contracts, construction contracts, construction management contracts, surety bonds, feasibility and market studies, management and operating agreements, service agreements and contracts, landscape maintenance agreements, security service and other services agreements and vendors agreements; (d) all compensation, awards and other payments of relief (and claims therefore) made for a taking by eminent domain, or by any event in lieu thereof (including, without limitation, property and rights and interests in property received in lieu of any such taking), of all or any part of such Personal Property, together with interest thereon, and any and all proceeds (or claims for proceeds) of casualty, liability or other insurance pertaining to such Personal Property, together with interest thereon; (e) any and all claims or demands against any person with respect to damage or diminution in value to such Personal Property or b damage or diminution in value to any business or other activity conducted on Property; (f) any and all security deposits, deposits of security or advance payments made to others to Trustor with respect to: (i) insurance policies relating to the Property; (ii) prepayments and/or periodic deposits or improvements for property taxes or assessments of any kind or nature affecting the Property; (iii) utility services for the Property and/or the Improvements; (iv) maintenance, repair or similar services for the Property or any other services or goods to be used by any business or other activity conducted on SB2001 :25550.1 6 the Property; (g) any and all authorizations, consents, licenses, permits and approvals of and from all persons required from time to time in connection with the construction, use, occupancy or operation of the Property, the improvements, or any business or activity conducted thereon or therein or in connection with the operation, occupancy or use thereof; (h) all warranties, guaranties, utility or street improvement bonds, construction completion and payment surety bonds, utility contracts, telephone exchange numbers, yellow page or other directory advertising and the like; (i) all goods, contract rights, and inventory; (j) all leases and use agreements of machinery, equipment and other personal property; (k) all insurance policies covering all or any portion of the Property; (1) all reserves and funds held in escrow by the Lender or other persons for the Lender's benefit under the Loan Agreement and all funds deposited with the Lender pursuant to the Loan Agreement, all accounts into which such funds are deposited and all accounts, contract rights and general intangibles or other rights relating thereto; (m) all names by which the Property is now or hereafter known; (n) all interests in the security deposits of tenants; (0) all management agreements, blueprints, plans, maps, documents, books and records relating to the Property; (p) the proceeds from sale, assignment, conveyance or transfer of all or , any portion of the Property or any interest therein, or from the sale of any goods, inventory or services from upon or within the Property and/or the Improvements; ) (q) all documents of membership in an owner or members association or similar group having responsibility for managing or operating any part of the Property; (r) all other property (other than "Fixtures," as defined in the Uniform Commercial Code) of any kind or character as defined in or subject to the provisions of the California Uniform Commercial Code, Secured Transactions, as amended and; (s) all proceeds of the conversions, voluntarily or involuntarily, of any of the foregoing into cash or liquidated claims. Promissory Note. The words "Promissory Note" mean the Promissory Note of even date herewith, in the principal amount of Thirty Seven Thousand, Five Hundred dollars ($37,500) delivered by the Trustor to the Redevelopment Agency of the City of San Bernardino, as Lender, together with all renewals, extensions, modifications, refinancing, and substitutions for the Promissory Note. Related Documents. The words "Related Documents" mean and include without limitation all promissory notes, credit agreements, loan agreements, guaranties, security agreements, mortgages, deeds of trust, and all other instruments, agreements and documents, by and between the Trustor and the SB2001 :25550.1 7 Lender whether now or hereafter existing, evidencing or securing the Indebtedness. Rents. The word "Rents" means all present and future revenues, income, issues, royalties, profits, and benefits derived from the Property. rents, other Trustee. The word "Trustee" means First American Title Insurance Company, and any substitute or successor trustees. Trustor. The word "Trustor" means the Trustor named above and its successors and assigns. 3.0 THIS DEED OF TRUST, INCLUDING THE ASSIGNMENT OF LEASES AND RENTS AND THE SECURITY INTEREST IN THE RENTS AND PERSONAL PROPERTY, IS GIVEN TO SECURE (1) PAYMENT OF THE INDEBTEDNESS AND (2) PERFORMANCE OF ANY AND ALL OBLIGATIONS OF TRUSTOR UNDER THE PROMISSORY NOTE, THE RELATED DOCUMENTS, AND THIS DEED OF TRUST. THE PROMISSORY NOTE AND THIS DEED OF TRUST ARE GIVEN AND ACCEPTED ON THE FOLLOWING TERMS: 3.1 PAYMENT AND PERFORMANCE. Except as otherwise provided in this Deed of Trust, Trustor shall pay to Lender all amounts secured by this Deed of Trust as they become due, and shall strictly and in a timely manner perform all of Trustor's obligations under the Promissory Note, this Deed of Trust, the Loan Agreement and the Related Documents. 3.2 POSSESSION AND MAINTENANCE that Trustor's possession Mortgaged Property shall provisions: OF THE PROPERTY. Trustor agrees and use of the Property and the be governed by the following Possession and Use. Until the occurrence of an Event of Default, Trustor may (a) remain in possession and control of the Mortgaged Property and collect Rents as they become due and (b) use, develop, operate or manage the Property for the purposes authorized in the Loan Agreement. Duty to Maintain and Preserve. Trustor shall: (a) maintain the Property and the Mortgaged Property in good condition and repair; (b) shall construct and improve the Property in accordance with the Loan Agreement; (c) restore and repair the Improvements or any part of the Mortgaged Property that may be damaged or destroyed, including but not limited to construction defects, soil subsidiances and environmental damages whether or not insurance proceeds are available to cover any part of such cost of restoration or repair (regardless of whether the proceeds of insurance may be available to the Trustor under this Deed of Trust); (d) pay when due all claims for labor 582001:25550.1 8 performed and materials furnished in connection with the Improvements and not permit any mechanics' liens or materials suppliers' liens to arise against the Property; (e) not permit any waste on the Property, or commit, suffer or permit any nuisance to occur on the Property; (f) not abandon the Mortgaged Property; (g) notify the Beneficiary in writing of any condition at or on the Property that may have a material affect on the market value of the Mortgaged Property; and (h) maintain the Property and the Improvements and generally operate it in a manner to realize it maximum rental potential. Hazardous Substances. (a) The terms "hazardous wastes", "hazardous substance", "disposal," "release", and "threatened release", as used in this Deed of Trust, shall have the same meanings as set forth in the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, 42 U.S. C. Section 9601, et seq. ("CERCLA"), the Superfund Amendments and Reauthorization Act of 1986, Pub. L. No. 99-499 ("SARA"), the Hazardous Materials Transportation Act. 49 U.S.C. SectioIT 1801, et ~eq., the Resource Conservation and Recovery Act, 49 U.S.C. Section 6901, et ~., Chapters 6.5 through 7.7 of Division 20 of the California Health and Safety Code, Section 25100, et seq., or other applicable state or Federal laws, rules, or regulations adopted pursuant to any of the foregoing. . (b) [OMITTED - - NO TEXT] (c) Trustor represents and warrants that neither the Trustor nor any tenant of Trustor occupying and improving any portion of the Mortgaged Property or any contractor, agent or other authorized user of any such tenant shall use, generate, manufacture, store, treat, dispose of, or release any hazardous waste or substance on, under, about or from any of the Mortgaged Property, except in compliance with all applicable law relating to the transportation, storage, disposal or lawful use of any hazardous waste or substance. Trustor shall comply and cause each of its tenants and all contractors, agents or other authorized users of the Mortgaged Property to comply with all applicable laws relating to any hazardous wastes or substances, including without limitation, obtaining and filing all applicable notices, licenses, permits and similar authorizations. Trustor shall establish and maintain a hazardous wastes and substances management and operations policy for the Mortgaged Property in order to assure and monitor continued compliance by the Trustor and each of its tenants and all contractors, agents, or other authorized users of the Property with all laws relating to hazardous wastes or substances. SB2001:25550.1 9 (d) Trustor authorizes Lender and its agents to enter upon the Mortgaged Property upon reasonable notice to make such inspections and tests as Lender may deem appropriate to determine compliance by the Trustor with this paragraph of Section 3.2 if Lender reasonably believes a violation of law has occurred. Any inspections or tests made by Lender shall be at Trustor's expense and for Lender's purposes only and shall not be construed to create any responsibility or liability on the part of Lender to Trustor or to any other person. Trustor hereby agrees to indemnify and hold harmless Lender against any and all claims, losses, liabilities, damages, penalties, and expenses which Lender may directly or indirectly sustain or suffer resulting from breach of this paragraph of Section 3.2. The provisions of this paragraph of Section 3.2 of the Deed of Trust, including the obligation to indemnify the Lender, shall survive the payment of the Indebtedness and the satisfaction and reconveyance of the lien of this Deed of Trust and shall not be affected by Lender's acquisition of any interest in the Property, whether by foreclosure or otherwise. Compliance with Governmental Requirements. Trustor shall promptly comply with all laws, ordinances, and regulations, now or hereafter in effect, of all governmental authorities applicable to the use or occupancy of the Mortgaged Property. Trustor may contest in good faith any such law, ordinance, or regulation and withhold compliance during any proceeding, including appropriate appeals, so long as Trustor has notified Lender in writing prior to doing so and so long as, in Lender's reasonable opinion, Lender's interests in the Mortgaged Property are not jeopardized. Lender may require Trustor to post adequate security or a surety bond, reasonably satisfactory to Lender, to protect Lender's interest. Duty to Protect. Trustor agrees neither to abandon nor leave unattended the Mortgaged Property. Trustor shall do all other acts, in addition to those acts set forth above in this section, which from the character and use of the Mortgaged Property are reasonably necessary to protect and preserve the Mortgaged Property. 3.3 DUE ON SALE. Lender may, at its option, declare immediately due and payable all sums secured by this Deed of Trust upon the sale or transfer, without the Lender's prior written approval, of all or any part of the Mortgaged Property, or any interest in the Mortgaged Property. A" sale or transfer" means the conveyance of the Mortgaged Property or any right, title or interest therein; whether legal or equitable; whether voluntary or involuntary; whether by outright sale, deed, installment sale contract, land contract, contract for deed, leasehold S82001:25550.1 10 interest with a term greater than one (1) year, lease-option contract, or by sale, assignment or transfer of any beneficial interest in or to any land trust holding title to the Mortgaged Property or by any other method of conveyance of the property interest. This option shall be exercised by the Lender in accordance with the provisions of Section 5.1 hereof; provided however, this option shall not be exercised if such remedy is prohibited by applicable law. 3.4 TAXES AND LIENS. The following provisions relating to the taxes and liens on the Mortgaged Property are part of this Deed of Trust: Payment. Trustor shall pay when due (and in all events prior to delinquency) all taxes, special taxes, assessments, charges (including water and sewer), fines and impositions levied against or on account of the Mortgaged Property, and shall pay when due all claims for work done on or for services rendered or material furnished to the Mortgaged Property. Trustor shall maintain the Mortgaged Property free of all liens having priority over or equal to the interest of Lender under this Deed of Trust, except for the lien of property taxes and assessments not due. Right to Contest. Trustor may withhold payment of any tax, assessment, or claim in connection with a good faith dispute over the obligation to pay, so long as Lender's interest in the Mortgaged Property is not jeopardized. If a lien arises or is filed as a result of nonpayment, Trustor shall within sixty (60) days after the lien arises or, if a lien is filed, within sixty (60) days after Trustor has notices of the filing, secure the discharge of the lien, or if requested by Lender, deposit with Lender cash or a sufficient corporate surety bond or other security satisfactory to Lender in an amount sufficient to discharge the lien plus any costs and attorneys' fees or other charges that could accrue as a result of a foreclosure or sale under the lien; provided, however, that Trustor shall not be required to payor make provisions for the payment of any tax, assessment, lien or charge so long as the Trustor in good faith shall contest the validity or amount thereof and so long as such delay in payment does not subject the Property to forfeiture or sale. In any contest, Trustor shall defend itself and Lender and shall satisfy any adverse judgment before enforcement against the Property. Trustor shall name Lender as an additional obligee under any surety bond furnished in the contest proceedings. SB2001 :25550.1 11 Evidence of Payment. Trustor shall upon demand furnish to Lender satisfactory evidence of payment of the taxes or assessments and shall authorize the appropriate governmental official to deliver to Lender at any time a written statement of the taxes and assessments against the Property. 3.5 CONDEMNATION. The following provisions relating to condemnation proceedings are a part of this Deed of Trust: Proceedings. If any proceeding in condemnation is filed affecting any portion of the Mortgaged Property, Trustor shall promptly notify the Beneficiary in writing, and Trustor shall promptly take such steps as may be necessary to defend the action and obtain the award. Trustor may be the nominal party in such proceeding, but the Beneficiary shall be entitled to participate in the proceeding and to be represented in the proceeding by counsel of its own choice, and Trustor will deliver or cause to be delivered to the Beneficiary such instruments as may be requested by it from time to time to permit such participation. 3.6 CASUALTY INSURANCE. The Trustor shall at all times keep the Mortgaged Property insured for the benefit of the Trustee and the Beneficiary as additional insured as follows: ('.' , Against damage or loss by fire and such other hazards (including lightning, windstorm, hail, explosion, riot, acts of striking employees, civil commotion, vandalism, malicious mischief, aircraft, vehicle, and smoke) as are covered by the broadest form of extended coverage endorsement available from time to time, including course of construction and builders risk endorsements in an amount not less than the full insurable value of the Mortgaged Property, with a deductible amount not to exceed Ten Thousand Dollars ($10,000); provided however, that prior to the recordation of the "Construction Loan" as this term is defined in the Loan Agreement, such insured amount shall be not less than $1,000,000, and upon the recordation of such Construction Loan the full insurable value shall be not less than the principal amount of such Construction Loan, plus .~, the principal amount of the Indebtedness; Against damage or loss from (a) sprinkler system leakage and (b) boilers, boiler tanks, heating and air conditioning equipment, pressure vessels, auxiliary piping, and similar apparatus, on such basis and in such amounts as the Beneficiary may require; Liability Insurance. Trustor shall procure and maintain workers' compensation insurance for employees and comprehensive SB200] :25550.1 12 general liability insurance covering Trustor, Trustee, and the Beneficiary against claims for bodily injury or death or for damage occurring in, on, about, or resulting from the Mortgaged Property, or any street, drive, sidewalk, curb, or passageway adjacent to it, in standard form and with such insurance company or companies and in an amount of at least One Million Dollars ($1,000,000) combined single limit, or such greater amount as the buyer may require, which insurance shall include completed operations, product liability, and blanket contractual liability coverage that insures contractual liability under the indemnifications set forth in this Deed of Trust (but such insurance coverage or its amount shall in no way limit such indemnification) . Other Insurance. The Trustor shall procure and maintain such other insurance or such additional amounts of insurance, covering the Trustor or the Mortgaged Property, as (a) may be required by the terms of any construction contract for the improvements or by any governmental authority, or (b) may be reasonably required by the Beneficiary from time to time. Form of Policies. All insurance required under this paragraph shall be paid for and nonassessable. The policies shall contain such provisions, endorsements, and expiration dates as the Beneficiary from time to time reasonably requests and shall be in such form and amounts, and be issued by such insurance companies admitted as surety companies and doing business in the State of California, as the Beneficiary shall approve in the Beneficiary's sole and absolute discretion. Unless otherwise expressly approved in writing by the Beneficiary, each insurer shall have a Best Rating of not less than "A(vii)", or better. All policies shall (a) contain a waiver of subrogation endorsement; (b) provide that the policy will not lapse or be canceled, amended, or materially altered (including by reduction in the scope or limits of coverage) without at least thirty (30) days prior written notice to the Beneficiary; (c) with the exception of the comprehensive general liability policy, contain a mortgagee's endorsement (438 BFU Endorsement or equivalent), and name the Beneficiary and trustee as insureds; and (d) include such deductibles as the Beneficiary may approve. If a policy required under this paragraph contains a co-insurance or overage clause, the policy shall include a stipulated value or agreed amount endorsement acceptable to the Beneficiary. Duplicate Originals or Certificates. Duplicate original policies evidencing the insurance required under this paragraph and any additional insurance that may be purchased on the Mortgaged Property by or on behalf of Trustor shall be deposited with and held by the Beneficiary (a) receipts SB2001:25550. t 13 evidencing payment of all premiums on the policies and (b) duplicate original renewal policies or a binder with evidence satisfactory to the Beneficiary of payment of all premiums at least thirty (30) days before the policy expires. In lieu of the duplicate original policies to be delivered to the Beneficiary under this paragraph, Trustor may also deliver original certificates from the issuing insurance company, evidencing that such policies are in full force and effect and containing information that, in the reasonable judgment of the Beneficiary, is sufficient to allow Lender to ascertain whether such policies comply with the requirements of this Paragraph. No Separate Insurance. The Trustor shall not carry separate or additional insurance concurrent in form or contributing in the event of loss with that required under this paragraph unless endorsed in favor of Trustee and the Beneficiary as required by this paragraph and otherwise approved by the Beneficiary in all respects. Transfer of Title. In the event of foreclosure of this Deed of Trust or other transfer of title or assignment of the Mortgaged Property in extinguishment, in whole or in part, of the Indebtedness, all right, title, and interest of the Trustor in and to all insurance policies required under this paragraph or otherwise then in force with respect to the Mortgaged Property and all proceeds payable under, and unearned premiums on, such policies shall immediately vest in the purchaser or other transferee of the Mortgaged Property. Beneficiary's Right to Obtain. Trustor shall deliver to the Beneficiary original policies or certificates evidencing such insurance at least thirty (30) days before the existing policies expire. If any such policy is not so delivered to the Beneficiary or if any such policy is canceled, whether or not Lender has the policy in its possession, and no reinstatement or replacement policy is received before termination of insurance, the Beneficiary, without notice to or demand on Trustor, may (but is not obligated to) obtain such insurance insuring only the Beneficiary and Trustee with such company as the Beneficiary may deem satisfactory, and pay the premium for such policies, and the amount of any premium so paid shall be charged to and promptly paid by Trustor or, at the Beneficiary's option, may be added to the Indebtedness. The Beneficiary acknowledges that, if the Beneficiary obtains insurance, it is for the sole benefit of the Beneficiary and Trustee, and Trustor shall not rely on any insurance obtained by the Beneficiary to protect Trustor in any way. SB2001 :25550.1 14 Duty to Restore After Casualty. If any act or occurrence of any kind or nature (including any casualty for which insurance was not obtained or obtainable) results in damage to or loss or destruction of the Mortgaged Property, Trustor shall immediately give notice of such loss or damage to the Beneficiary and, if the Beneficiary so instructs, shall promptly, at the Trustor's sole cost and expense, regardless of whether any insurance proceeds will be sufficient for the purpose, commence and continue diligently to completion to restore, repair, replace, and rebuild the Mortgaged Property as nearly as possible to its value, condition, and character immediately before the damage, loss, or destruction. 3.7 ASSIGNMENT TO THE BENEFICIARY. The proceeds of any award or claim for damages, direct or consequential, in connection with any condemnation or other taking of or damage or injury to the Mortgaged Property, or any part of it, or for conveyance in lieu of condemnation, are assigned to and shall be paid to the Beneficiary, regardless of whether the Beneficiary's security is impaired. All causes of action, whether accrued before or after the date of this Deed of Trust, of all types for damages or injury to the Mortgaged Property or any part of it, or in connection with any transaction financed by funds lent to the Trustor by the Beneficiary and secured by this Deed of Trust, or in connection with or affecting the Mortgaged Property or any part of it, including, without limitation, causes of action arising in tort or contract or in equity, are assigned to the Beneficiary as additional security, and the proceeds shall be paid to the Beneficiary. The Beneficiary, at its option, may appear in and prosecute in its own name any action or proceeding to enforce any such cause of action and may make compromise or settlement of such action. The Trustor shall notify the Beneficiary in writing immediately on obtaining knowledge of any casualty damage to the Mortgaged Property or damage in any other manner in excess of Ten Thousand Dollars ($10,000) or knowledge of the institution of any proceedirtg relating to the condemnation or other taking of or damage or injury to all or any portion of the Mortgaged Property. The Beneficiary in its sole and absolute discretion, may participate in any such proceedings and may join borrower in adjusting any loss covered by insurance. Trustor covenants and agrees with the Beneficiary, at Beneficiary's request, to make, execute, and deliver, at Trustor's expense, any and all assignments and other instruments sufficient for the purpose of assigning the aforesaid award or awards, causes of action, or claims of damages or proceeds to the Beneficiary free, clear, and discharged of any and all encumbrances of any kind or nature. S82001 :25550.1 15 Compensation and Insurance Payments. All compensation, awards, proceeds, damages, claims, insurance recoveries, rights of action, and payments that Trustor may receive or to which the Beneficiary may become entitled with respect to the Mortgaged Property if any damage or injury occurs to the Mortgaged Property, other than by the Beneficiary condemnation or partial taking of the Mortgaged Property, shall be paid over to the Beneficiary and shall be applied first toward reimbursement of all costs and expenses of the Beneficiary in connection with their recovery and disbursement, and shall then be applied as follows: The Beneficiary shall consent to the application of such payments to the restoration of the Mortgaged Property so damages only the Beneficiary has met all the following conditions (a breach of one of which shall constitute a default under this Deed of Trust, the Promissory Note, and any Related Document): (a) Trustor is not in default under any of the terms, covenants, and conditions of the Related Documentsi (b) all then-existing leases affected in any way by such damage will continue in full force and effecti (c) the Beneficiary is satisfied that the insurance or award proceeds, plus any sums added by Trustor, shall be sufficient to fully restore and rebuild the Mortgaged Property under then current governmental requirementsi (d) within sixty (60) days after the damage tot he Mortgaged Property I Trustor presents to the Beneficiary a restoration plan satisfactory to the Beneficiary and each local agency with jurisdiction, which includes cost estimates and schedulesi (e) construction and completion of restoration and rebuilding of the Mortgaged Property shall be completed in accordance with plans and specifications and drawings submitted to the Beneficiary within thirty (30) days after receipt by the Beneficiary of the restoration plan and thereafter approved the BeneficiarYi which plans, specifications, and drawings shall not be substantially modified, changed, or revised without the Beneficiary's prior written consenti (f) within ninety (90) days after such damage, Trustor and a licensed contractor satisfactory to the Beneficiary enter into a fixed price or guaranteed maximum price contract satisfactory to the Beneficiary, providing for complete restoration in accordance with such restoration plan for an amount not to exceed the amount of funds held or to be held by the BeneficiarYi (g) all restoration of the Improvements so damaged or destroyed shall be made with reasonable promptness and shall be of a value at least equal to the value of the Improvements so damages or destroyed before such damage or destructioni (h) the Beneficiary reasonably determines that there is an 5B200 1:25550.1 16 identified source (whether from income from the Mortgaged Property or another source) sufficient to pay all debt service and operating expenses of the Mortgaged Property during its restoration as required above; and (i) any and all funds that are made available for restoration and rebuilding under this subparagraph shall be disbursed at the sole election of the Beneficiary through the Trustee, or a title insurance or trust company satisfactory to the Beneficiary, in accordance with standard construction lending practices and mechanics' lien waivers and title insurance date-downs, and the provision of payment and performance bonds by the Trustor, or in any other manner approved by the Beneficiary in the Beneficiary's sole and absolute discretion; or If fewer than all conditions (a) through (i) in the preceding subparagraph are satisfied, then such payments shall be applied in the sole and absolute discretion of the Beneficiary: to the payment of the Indebtedness secured by this Deed of Trust; or to the reimbursement of Trustor's expenses incurred in the rebuilding and restoration of the Mortgaged Property. If the Beneficiary elects to make any funds available to restore the Mortgaged Property, then all of the conditions (a) through (i) in the preceding subparagraph shall apply, except for such conditions that the Beneficiary in its sole and absolute discretion, may waive. Material Loss Not Covered. If any material part of the Mortgaged Property is damaged or destroyed and the loss, is not adequately covered by insurance proceeds collected or in the process of collection, the Trustor shall deposit with the Beneficiary, within thirty (30) days after the Beneficiary's request, the amount of the loss not so covered. Total Condemnation Payment. All compensation, awards, proceeds, damages, claims, rights of action, and payments that Borrower may recei ve or to which the Trustor may become entitled with respect to the Mortgaged Property in the event of a total condemnation or other total taking of the Mortgaged Property by a public agency shall be paid over to the Beneficiary and shall be applied first to the reimbursement of all Beneficiary's costs and expenses in connection with their recovery, and shall then be appl ied to the payment of the Indebtedness. Any surplus remaining after payment and satisfaction of the Indebtedness shall be paid to the Trustor as its interest may then appear. SB2001:25550.1 17 3.8 (. Partial Condemnation Payments. All compensation, awards, proceeds, damages, claims, insurance recoveries, rights of action, and payments ("funds") that the Trustor may receive or to which the Trustor may become entitled with respect to the Mortgaged Property in the event of a partial condemnation or other partial taking of the Mortgaged Property by a public agency, unless the Trustee and Beneficiary otherwise agree in writing, shall be divided into two portions, one equal to the principal balance of the Promissory Note at the time of receipt of such funds and the other equal to the amount by which such funds exceed the principal balance of the Promissory Note at the time of receipt of such funds. The first such portion shall be applied to the sums secured by this Deed of Trust, whether or not then due, including but not limited to principal, accrued interest, and advances with the balance of the funds paid to the Trustor. No Cure of Waiver of Default. Any application of such amounts or any portion of it to any Indebtedness secured by this Deed of Trust shall not be construed to cure or waive any default or notice of default under this Deed of Trust or invalidate any act done under any such default or notice. t. EXPENDITURES BY LENDER. If Trustor fails to comply with any provision of this Deed of Trust, or if any action or proceeding is commenced against the Mortgaged Property that would materially affect Lender's interests in the Property, Lender on Trustor's behalf may, but shall not be required to, take any action that Lender reasonably deems appropriate. Any amount that Lender expends in do doing will bear interest at the rate charged under the Promissory Note from the date incurred or paid by Lender to the date of repayment by Trustor. All such expenses, at Lender's option, will (a) be payable on demand, (b) be added to the balance of the Promissory Note and be apportioned among and be payable with any installment payments to become due during the remaining term of the Promissory Note, or (c) be treated as a balloon payment which will be due and payable at the Promissory Note's maturity. This Deed of Trust also will secure payment of these amounts. The rights provided for in this paragraph shall be in addition to any other rights or any remedies to which Lender may be entitled on account of the default. Any such action by Lender shall not be construed as curing the default so as to bar Lender from any remedy that it otherwise would have had. SB200 I :25550.1 18 3.9 WARRANTY. Trustor warrants that the Mortgaged Property Trustor's use of the Mortgaged Property complies with existing applicable laws, ordinances, and regulations governmental authorities. and all of 3.10 IMPOSITION OF TAXES, FEES AND CHARGES BY GOVERNMENTAL AUTHORITIES. The following provisions relating to governmental taxes, fees and charges are a part of this Deed of Trust: Current Taxes, Fees and Charges. Upon request by Lender, Trustor shall execute such documents in addition to this Deed of Trust and take whatever other action is requested by Lender to perfect and continue Lender's lien and security interest on the Property. Trustor shall reimburse Lender for all taxes, as described below, together with all expenses incurred in recording, perfecting or continuing this Deed of Trust, including without limitation all taxes, fees, documentary stamps, and other charges for recording or registering this Deed of Trust. Taxes. The following shall constitute taxes to which this section applies: (a) a specific tax upon this type of Deed of Trust or upon all or any part of the Indebtedness secured by this Deed of Trust; (b) a specific tax on Trustor which Trustor is authorized or required to deduct from payments on the Indebtedness secured by this type of Deed of Trust; (c) a tax on this type of Deed of Trust chargeable against the Lender or the holder of the Promissory Note; and (d) a specific tax on all or any portion of the Indebtedness or on payments of principal and interest made by Trustor. Subsequent Taxes. If any tax to which this section applies is enacted subsequent to the date of this Deed of Trust, this event shall have the same effect as an Event of Default (as defined below), and Lender may exercise any or all of its available remedies for an Event of Default as provided below unless Trustor either (a) pays the tax before it becomes delinquent, or (b) contests the tax as provided above in the Taxes and Liens section and deposits with Lender cash or a sufficient corporate surety bond or other security satisfactory to Lender. 3.11 SECURITY AGREEMENT; FINANCING STATEMENTS. The provisions relating to this Deed of Trust as agreement are a part of this Deed of Trust: following a security SB2001:2SSS0.1 19 Security Agreement. This instrument shall constitute a security agreement to the extent of any of the Mortgaged Property constitutes fixtures or other personal property, and Lender shall have all of the rights of a secured party under the Uniform Commercial Code as amended from time to time. Security Interest. Upon request by Lender, Trustor shall execute financing statements and take whatever other action is requested by Lender to perfect and continue Lender's security interest in the Rents and Personal Property in a manner and at a place reasonably convenient to Trustor and Lender and make it available to Lender within ten (10) days after receipt of written demand from Lender. Addresses. The mailing addresses of Trustor (debtor) and Lender (secured party), from which information concerning the security interest granted by this Deed of Trust may be obtained (each as required by the Uniform Commercial Code), are as stated on the first page of this Deed of Trust. 3.12 FURTHER ASSURANCES; ATTORNEY-IN-FACT. The following provisions relating to further assurances and attorney-in-fact are a part of this Deed of Trust: Further Assurances. At any time, and from time to time, upon request of Lender, Trustor will make, execute and deliver, or will cause to be made, executed or delivered, to Lender or to Lender's designee, and when requested by Lender, cause to be filed, recorded, refiled, or rerecorded, as the case may be, at such times and in such offices and places as Lender may deem appropriate, any and all such mortgages, deeds of trust, security deeds, security agreements, financing statements, continuation statements, instruments of further assurance, certificates, and other documents as may, in the sole opinion of Lender, be necessary or desirable in order to effectuate, complete, perfect, continue, or preserve (a) the obligations of Trustor under the Promissory Note, this Deed of Trust, and the Related Documents, and (b) the liens and security interests created by this Deed of Trust as second priority liens on the Mortgaged Property, whether now owned or hereafter acquired by Trustor. Unless prohibited by law or agreed to the contrary by Lender in writing. Trustor shall reimburse Lender for all costs and expenses incurred in connection with the matters referred to in this paragraph. Attorney-In-Fact. If Trustor fails to do any of the things referred to in the preceding paragraph, Lender may do so for and in the name of Trustor and at Trustor's expense. For such purposes, Trustor hereby irrevocably appoints Lender as Trustor's attorney-in-fact for the purpose of making, SB200 1 :25550.1 20 executing, delivering, filing, recording, and doing all other things as may be necessary or desirable, in Lender's sole opinion, to accomplish the matters referred to in the preceding paragraph. 4.0 FULL PERFORMANCE AND RECONVEYANCE. If Trustor pays all the Indebtedness, including without limitation, all future advances, when due, and otherwise performs all the obligations imposed upon Trustor under the Loan Agreement, the Promissory Note and this Deed of Trust, Lender shall execute and deliver to Trustee a request for full reconveyance and shall execute and deliver to Trustor suitable statements of termination of any financing statement on file evidencing Lender's security interest in the Rents and Personal Property. Lender may charge Trustor a reasonable reconveyance fee at the time of reconveyance. 5.0 DEFAULT. Each of the following, at the option of Lender, shall constitute an event of default ("Event of Default") under this Deed of Trust: . Default on Indebtedness. Failure of Trustor to make any payment when due under the Promissory Note if not cured within thirty (30) days after written notice from the Lender. Default on Other Payments. Failure of Trustor within the time required by this Deed of Trust to make any payment for taxes or insurance, or any other payment necessary to prevent filing of or to effect discharge of any lien. Compliance Default. Failure of Trustor to comply with any other term, obligation, covenant or condition contained in this Deed of Trust, the Promissory Note, the Loan Agreement, the Related Documents, including without limitation the OPA, after notice and any applicable cure period has expired. Breaches. Any warranty, representation or statement made or furnished to Lender by or on behalf of Trustor under this Deed of Trust, the Promissory Note, the Loan Agreement, or any of the Related Documents is, or at the time made or furnished was, false in any material respect. Insolvency. The insolvency of Trustor, appointment of a receiver for any part of Trustor's property, any assignment for the benefit of creditors, the commencement of any proceeding under any bankruptcy or insolvency laws by or against Trustor, which is not discharged or dismissed within ninety (90) days, or the dissolution or termination of Trustor's existence as a going business (if Trustor is a business) . SB2001 :25550.1 21 Foreclosure, etc. Commencement of foreclosure, whether by judicial proceeding, self-help, repossession or any other method, by any creditor of Trustor against any of the Mortgaged Property. However, this subsection shall not apply in the event of a good faith dispute by Trustor as to the validity or reasonableness of the claim which is the basis of the foreclosure, provided that Trustor gives Lender written notice of such claim and furnishes reserves or a surety bond for the claim satisfactory to Lender. 5.1 RIGHTS AND REMEDIES ON DEFAULT. Upon the occurrence of any Event of Default and at any time thereafter, Trustee or Lender, at its option, may exercise anyone or more the following rights and remedies, in addition to any other rights or remedies provided by law: Foreclosure by Sale. Upon an Event of Default under this Deed of Trust, Beneficiary may declare the entire Indebtedness secured by this Deed of Trust immediately due and payable by delivery to Trustee of written declaration of default and demand for sale and of written notice of default and of election to cause the Mortgaged Property to be sold, which notice Trustee shall cause to be filed for record. Beneficiary also shall deposit with Trustee this Deed of Trust, the Promissory Note, other documents requested by Trustee, and all documents evidencing expenditures secured hereby. After the lapse of such time may then be required by law following the recordation of the notice of default, and notice of sale having been given as then required by law, Trustee, without demand on Trustor, shall sell the Mortgaged Property at the time and place fixed by it in the notice of sale, either as a whole or in separate parcels, and in such order as it may determine, at public auction to the highest bidder for cash in lawful money of the United States, payable at time of sale. Trustee may postpone sale of all or any portion of the Mortgaged Property by public announcement at such time and place of sale, and from time to time thereafter may postpone such sale by public announcement at the time filed by the preceding postponement in accordance with applicable law. Trustee shall deliver to such purchaser its deed conveying the Mortgaged Property so sold, but without any covenant or warranty, express or implied. The recitals in such deed of any matters or facts shall be conclusive proof of the truthfulness thereof. Any person, including Trustor, Trustee or Beneficiary may purchase at such sale. After deducting all costs, fees and expenses of Trustee and of this Trust, including cost of evidence of title in connection with sale, Trustee shall apply the proceeds of sale to payment of: all sums expended under the terms hereof, not then repaid, with accrued interest at the amount allowed by law in effect at the date hereof; all other sums then secured SB2001:25550.1 22 hereby; and the remainder, if any, to the person or persons legally entitled thereto. Judicial Foreclosure. With respect to all or any part of the Mortgaged Property, Lender shall have the right in lieu of foreclosure by power of sale to foreclose by judicial foreclosure in accordance with and to the full extent provided by California law. It is understood and agreed by the parties hereto that no action taken by the Lender shall result in the imposition of personal liability on any of the members, partners, directors, shareholders and officers, as applicable, of Trustor or on Trustor itself or its constituent members. UCC Remedies. With respect to all or any part of the Mortgaged Property, Lender shall have the rights and remedies of a secured party under the Uniform Commercial Code, including without limitation the right to recover any deficiency in the manner and to the full extent provided by California law. Collect Rents. Lender shall have the right, without notice to Trustor, to take possession of and manage the Mortgaged Property and collect the Rents, including amounts past due and unpaid, and apply the net proceeds, over and above Lender's costs, against the Indebtedness. In furtherance of this right, Lender may require any tenant or other user of the Mortgaged Property to make payments of rent or use fees directly to Lender. If the Rents are collected by Lender, then Trustor irrevocably designates Lender as Trustor's attorney-in-fact to endorse instruments received in payment thereof in the name of Trustor and to negotiate the same and collect the proceeds. Payments by tenants or other users to Lender in response to Lender's demand shall satisfy the obligations for which the payments are made, whether or not any property grounds for the demand existed. Lender may exercise its rights under this subparagraph either in person, by agent, or through a receiver. Appoint Receiver. Lender shall have the right to have a receiver appointed to take possession of all or any part of the Mortgaged Property, with the power to protect and preserve the Mortgaged Property, to operate the Property preceding foreclosure or sale, and to collect the Rents from the Mortgaged Property and apply the proceeds, over and above the cost of the receivership against the Indebtedness. The receiver may serve without bond if permitted by law. Lender's right to the appointment of a receiver shall exist whether or not the apparent value of the Mortgaged Property exceeds the indebtedness by a substantial amount. Employment by Lender shall not disqualify a person from serving as a receiver. 582001:25550.1 23 Tenancy at Sufferance. If Trustor remains in possession of the Mortgaged Property after the Property is sold as provided above or Lender otherwise becomes entitled to possession of the Property upon default of Trustor, Trustor shall become a tenant at sufferance of Lender or the purchaser of the Mortgaged Property and shall, at Lender's option, either (a) pay a reasonable rental for the use of the Property, or (b) vacate the Mortgaged Property immediately upon the demand of Lender. Other Remedies. Trustee or right or remedy provided in Promissory Note or by law. Lender shall have any other this Deed of Trust or the Notice of Sale. Lender shall give Trustor reasonable notice of the time and place of any public sale of the Personal Property or of the time after which any private sale or other intended disposition of the Personal Property is to be made. Reasonable notice shall mean notice given at least thirty (30) days before the time of the sale or disposition. Any sale of Personal Property may be made in conjunction with any sale of the Mortgaged Property. I~.. Sale of the Mortgaged Property. To the extent permitted by applicable law, Trustor hereby waives any and all rights to have the Mortgaged Property marshaled. In exercising its rights and remedies, the Trustee or Lender shall be free to sell all or any part of the Property together or separately, in one sale or by separate sales. Lender shall be entitled to bid at any public sale on all or any portion of the Mortgaged Property. ~ Waiver; Election of Remedies. A waiver by any party of a breach of a provision of this Deed of Trust shall not constitute a waiver of or prejudice the party's rights otherwise to demand strict compliance with that provision or any other provision. Election by Lender to pursue any remedy provided in this Deed of Trust, the Promissory Note, in any Related Document, or provided by law shall not exclude pursuit of any other remedy, and an election to make expenditures or to take action to perform an obligation of Trustor under this Deed of Trust after failure of Trustor to perform shall not affect Lender's right to declare a default and to exercise any of its remedies. Attorneys' Fees; Expenses. If Lender institutes any suit or action to enforce any of the terms of this Deed of Trust, Lender shall be entitled to recover such sum as the court may adjudge reasonable as attorneys' fees at trial and on any appeal. Whether or not any court action is involved, all reasonable expenses incurred by Lender which in Lender 's opinion are necessary at any time for the protection of its 582001:25550.1 24 interest or the enforcement of its rights shall become a part of the Indebtedness payable on demand and shall bear interest at the Promissory Note rate from the date of expenditure until repaid. Expenses covered by this paragraph include, without limitation, however subject to any limits under applicable law, Lender's attorneys' fees whether or not there is a lawsuit, including attorneys' fees for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), appeals and any anticipated post-judgment collection services, the cost of searching records, obtaining title reports (including foreclosure reports), surveyors' reports, appraisal fees, title insurance, and fees for the Trustee, to the extent permitted by applicable law. For the purposes hereof, the words "Lender's attorneys' fees" include the salaries, benefits and expenses of attorneys employed in the office of the City Attorney computed on an hourly basis for any such legal services provided in connection with the enforcement of the rights of the Lender hereunder. Trustor also will pay any court costs, in addition to all other sums provided by law. Rights of Trustee. Trustee shall have all of the rights and duties of Lender as set forth in this section. 6.0 POWERS AND OBLIGATIONS OF TRUSTEE. The following provisions relating to the powers and obligations of Trustee are part of this Deed of Trust: Powers of Trustee. In addition to all powers of Trustee arising as a matter of law, Trustee shall have the power to take the following actions with respect to the Property upon the written request of Lender and Trustor: (a) join in preparing and filing a map or plat of the Mortgaged Property, including the dedication of streets or other rights to the public; and (b) join in granting any easement or creating any restriction on the Mortgaged Property. Obligations to Notify. Trustee shall not be obligated to notify any other party of a pending sale under any other trust deed or lien, or of any action or proceeding in which Trustor, Lender, or Trustee shall be a party, unless the action or proceeding is brought by Trustee. Trustee. Trustee shall meet all qualifications required for Trustee under applicable law. In addition to the rights and remedies set forth above, with respect to all or any part of the Mortgaged Property, the Trustee shall have the right to foreclose by notice and sale, and Lender shall have the right to foreclose by judicial foreclosure, in either case in accordance with and to the full extent provided by applicable law. SB2001:25550.1 25 Successor Trustee. Lender, at Lender's option, may from time to time appoint a successor Trustee to any Trustee appointed hereunder by an instrument executed and acknowledged by Lender and recorded in the office of the recorder of San Bernardino County, California. The instrument shall contain, in addition to all other matters required by state law, the names of the original Lender, Trustee, and Trustor the book and page where this Deed of Trust is recorded, and the name and address of the successor trustee, and the instrument shall be executed and acknowledged by Lender or its successors in interest. The successor trustee, without conveyance of the Mortgaged Property, shall succeed to all the title, power, and duties conferred upon the Trustee in this Deed of Trust and by applicable law. This procedure for substitution of trustee shall govern to the exclusion of all other provisions for substitution. 7.0 NOTICES TO TRUSTOR AND OTHER PARTIES. Any notice under this Deed of Trust shall be in writing and shall be effective when actually delivered or, if mailed, shall be deemed effective three business days after it is deposited in the United States mail first class, registered mail, postage prepaid, directed to the addresses shown near the beginning of this Deed of Trust. Any party may change its address for notices under this Deed of Trust by giving formal written notice to the other parties, specifying that the purpose of this notice is to change the party's address. All copies of notices of foreclosure from the holder of any lien which has priority over this Deed of Trust shall be sent to Lender's address, as shown near the beginning of this Deed of Trust. For Notice purposes, Trustor agrees to keep Lender and Trustee informed at all times of Trustor's current address. Each Trustor requests that copies of any notices of default and sale be directed to Trustor's address shown near the beginning of this Deed of Trust. 8.0 STATEMENT OF OBLIGATION. Lender may collect a fee, in an mount not to exceed the statutory maximum, for furnishing the statement of obligation as provided by Section 2943 of the Civil Code of California. 9.0 [RESERVED] 10.0 ASSIGNMENT OF CONTRACTS. In addition to any other grant, transfer or assignment effectuated hereby, without in any manner limiting the generality of the grants in the conveyance and grant section hereof, Trustor shall assign to Beneficiary, as security for the indebtedness secured hereby, Trustor's interest in all agreements, contracts, leases, licenses and permits affecting the Property in any manner whatsoever, such SB2001 :25550.1 26 assignments to be made, if so requested by Beneficiary, by instruments in form satisfactory to Beneficiary; but no such assignment shall be construed as a consent by Beneficiary to any agreement, contract license or permit so assigned, or to impose upon Beneficiary any obligations with respect thereto. 11.0 BOOKS AND RECORDS. Trustor shall maintain, or cause to be maintained, proper and accurate books, records and accounts reflecting all items of income and expense in connection with the operation of the Mortgaged Property or in connection with any services, equipment or furnishings provided in connection wi th the operation of the Mortgaged Property, whether such income or expense be realized by Trustor or by any other person or entity whatsoever excepting persons unrelated to and unaffiliated with Trustor and who leased from Trustor portions of the Mortgaged Property for the purposes of occupying the dame. Upon the request of Beneficiary, Trustor shall prepare and deliver to Beneficiary such financial statements regarding operation of the Mortgaged Property as Beneficiary may reasonably request. Beneficiary, or its designee, shall have the right from time to time during normal business hours to examine such books, records and accounts and to make copies or extracts therefrom. Trustor shall keep all records and documents for a period of five years after the expiration of the Loan and Regulatory Agreements. 12.0 MISCELLANEOUS PROVISIONS. The following provisions are a part of this Deed of Trust: miscellaneous Environmental Default and Remedies. In the event that any portion of the Mortgaged Property is determined to be "environmentally impaired", or an "affected parcel" as these terms are defined at Code of Civil Procedure Section 725.5(e), then in such event and without limiting or in any way affecting the another rights and remedies of the Trustee and the Beneficiary under this Deed of Trust, the Beneficiary may elect to exercise its rights under Code of Civil Procedure Section 725.5(a) to waive its lien or such portion of the Mortgaged Property and to exercise its rights and remedies to recover the Indebtedness under a judgment as an unsecured creditor of the Trustor and/or to exercise any other remedy authorized by law. The Trustor shall be deemed to have willfully permitted or acquired in a or release or threatened release of a hazardous substance, if such release or threatened release was knowingly or negligently caused or contributed by to by any lessee, occupant, user of the Mortgaged Property which caused or contributed to the release or threatened release of a hazardous substance. All costs and expenses of the Beneficiary, including reasonable attorney's fees, plus interest at a rate per annum of eight percent (8%) until paid, as incurred in 8B2001:25550.1 27 connection with an action as may be brought by the Beneficiary as provided in Code of Civil Procedure Section 725.5(b). Amendments. This Deed of Trust, together with any Related Documents, constitutes the entire understanding and agreement of the parties as to the matters set forth in this Deed of Trust. No alteration of or amendment to this Deed of Trust shall be effective unless given in writing and signed by the party or parties sought to be charged or bound by the altercation or amendment. Acceptance by Trustee. Trustee accepts this Trust when this Deed of Trust, duly executed and acknowledged, is made a public record as provided by law. Applicable Law. This Deed of Trust has been delivered to Lender and accepted by Lender in the State of California. This Deed of Trust shall be governed by and construed in accordance with the laws of the State of California. Caption Headings. Caption headings in this Deed of Trust are for convenience purposes only and are not to be used to interpret or define the provisions of this Deed of Trust. Merger. There shall be no merger of the interest or estate created by this Deed of Trust with any other interest or estate in the Property at any time held by or for the benefit of Lender in any capacity, without the written consent of Lender. Severability. If a court of competent jurisdiction finds any provision of this Deed of Trust to be invalid or unenforceable as to any person or circumstance, such finding shall not render that provision invalid or unenforceable as to any other persons or circumstances. If feasible, any such offending provision shall be deemed to be modified to be within the limits of enforceability or validity; however, if the offending provision cannot be so modified, it shall be stricken and all other provisions of this Deed of Trust in all other respects shall remain valid and enforceable. Successors and Assigns. Subject to the limitations stated in this Deed of Trust on transfer of Trustor's interest, this Deed of Trust shall be binding upon and inure to the benefit of the parties, their successors and assigns. If ownership of the Property becomes vested in a person other Trustor, Lender, without notice to Trustor, may deal with Trustor's successors with reference to this Deed of Trust and the indebtedness by way of forbearance or extension without releasing Trustor from SB200 I :25550.1 28 IIII IIII IIII IIII IIII IIII IIII IIII IIII the obligations of this Deed of Trust or liability under the Indebtedness. Time is of the Essence. Time is of the essence in the performance of this Deed of Trust. Waivers and Consents. Lender shall not be deemed to have waived any rights under this Deed of Trust (or under the Related Documents) unless such waiver is in writing and signed by Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right. A waiver by and any party of a provision of this Deed of Trust shall not constitute a waiver of or prejudice the party's right otherwise to demand strict compliance with that provision or any other provision. No prior waiver by Lender, nor any course of deal ing between Lender and Trustor, shall constitute a waiver of any of Lender's rights or any of Trustor I s obligations as to any future transactions. Whenever consent by Lender is required in this Deed of Trust, the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent instances where such consent is required. Fixture Filing. This Deed of Trust also constitutes a fixture filing as defined in the California Uniform Commercial Code, as amended or recodified from time to time. This Deed of Trust is to be recorded in the real estate records of San Bernardino County, California, and covers goods which are to become fixtures. SB2001 :25550.1 29 THE TRUSTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS DEED OF TRUST, AND THE TRUSTOR AGREES TO ITS TERMS, AND THE TERMS OF THE PROMISSORY NOTE SECURED BY THIS DEED OF TRUST. TRUSTOR Neighborhood Housing Services ) )'12-)1) I By, ~e 1:~br Date: [SIGNATURES MUST BE ACCOMPANIED BY NOTARY JURAT] SB2001:25550.1 30 STATE OF CALIFORNIA ) COUNTY OF SAN BERNARDINO ) On November 2,2001 before me, Lisa A. Gomez, Notary Public, personally appeared Dawkins Hodqes , personally known to me teJ: proved to me on the basis of satisfactory evidence) to be the persontsj whose nametsj istaFe subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacityties1, and that by his/her/their signaturetsj on the instrument the persontsj, or the entity upon behalf of which the persontsj acted, executed the instrument. WITNESS my hand and official seal. Signature i------------ @ LlSAAGOMEZ ... - . Commission # 1198921-c f i' Notary PubITc - CaITfomlo: f 1 San Bemadlno.c ou.nfy f MtCanm. Bq:l!resOct 18,2:02 ------ ". '!"l!" ___ JII'III!'. -,_::I!!'l[n"'- (Seal) File No.: 6033044 EXHIBIT "A" Lot 11 of Tract No. 1785, in the City of SAN BERNARDINO, County of SAN BERNARDINO, State of California, as per map recorded in Book 26, page(s) 19, of Maps, in the office of the County Recorder of said County. Page 3 of 5 . , Recorded in Official Records, County of San Bernardino, Larry Walker, Recorder RECORDATION REQUESTED BY: Doc No. 20010551915 3:00pm 12/05/01 REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO WHEN RECORDED MAIL TO: I COMMONWE~Ll~ lI1LE ~ ~ o~~ Redevelopment Agency of the City of San Bernardino 201 North "E" Street Third Floor San Bernardino, California 92401-15C Attn: Executive Director Space Above This Line is For Recorder's Use Only DEED OF TRUST, SECURITY AGREEMENT, ASSIGNMENT OF LEASES AND RENTS AND FIXTURE FILING Neighborhood Housing Service THIS DEED OF TRUST, SECURITY AGREEMENT, ASSIGNMENT OF LEASES AND RENTS AND FIXTURE FILING (the "Deed of Trust") is dated October 1, 2001, among Neighborhood Housing Service (the "Trustor"), whose address is 1390 North "D" Street, San Bernardino, California 92405; the Redevelopment Agency of the City of San Bernardino, a body corporate and politic, whose address is 201 North "E" Street, Third Floor, San Bernardino, California 92401-1507 (the "Lender" or the "Beneficiary"); and First American Title Insurance Company (the "Trustee") . 1.0 CONVEYANCE AND GRANT. For valuable consideration, Trustor irrevocably grants, transfers and assigns to Trustee in trust, with power of sale, for the benefit of Lender as Beneficiary, all of Trustor's right, title, and interest in and to that certain real property described (APN 0146-163-43000, Parcell), in Exhibit "A" attached hereto and incorporated herein by this reference (the "Property"), together with all existing or subsequently erected or affixed buildings, improvements and fixtures; all easements, rights of way, and appurtenances and all other rights, royalties, and profits relating to the real property, including and without limitation all minerals, oil, gas, geothermal and similar matters located in San Bernardino County, State of California (the "Mortgaged Property") . 1 P:\Fonns\Housing Forrns\HOME Forms\Neighborhood Hsg\NH$ Deed of Trust Parcell ,doc , , Trustor presently assigns to the Lender all of Trustor's right, title and interest in and to all present and future leases of the Mortgaged Property and all Rents from the Mortgaged Property. In addition, Trustor grants Lender a Uniform Commercial Code security interest in the Rents and the Personal Property as set forth herein. 2.0 DEFINITIONS. The following words shall have the following meanings when used in this Deed of Trust. Terms not otherwise defined in this Deed of Trust shall have the meanings attributed to such terms in the Uniform Commercial Code. All references to dollar amounts shall mean amounts in lawful money of the United States of America: Beneficiary. The word "Beneficiary" means the Redevelopment Agency of the City of San Bernardino, a body corporate and politic, its successors and assigns. Deed of Trust. The words "Deed of Trust" mean this Deed of Trust and Assignment of Leases and Rents and Fixture Filing among Trustor, Lender, and Trustee, and i~cludes without limitation all assignment and security interest provisions relating to the Personal Property and Rents. Improvements. The word "Improvements" means and includes all existing improvements on the Property and all improvements to be constructed on the Property. Indebtedness. The word "Indebtedness" means all principal and, if applicable, interest payable under the Promissory Note and any amounts expended or advanced by Lender to discharge obligations of Trustor or expenses incurred by Trustee or Lender to enforce obligations of Trustor under the Promissory Note and this Deed of Trust, together with interest on such amounts. This Deed of Trust secures, in addition to the amounts specified in the Promissory Note, any future advances, together with all interest thereon, that may be made by the Lender pursuant to the Loan Agreement and/or the Related Documents so long as Trustor complies with all the terms and conditions of the Promissory Note, Loan Agreement and/or the Related Documents. Lender. The word "Lender" means the Redevelopment Agency of the City of San Bernardino, its successors and assigns. 2 P:\FOITIls\Housing Fonns\HOME Forms\Neighborhood Hsg\NHS [ked of Trust Parccll.doc Loan Agreement. The words "Loan Agreement" mean that certain 2000 HOME Loan Agreement, dated as of October 1, 2001, by and between the Trustor and the Lender which provides for the loan to the Trustor which is secured by this Deed of Trust. Mortgaged Property. The refer to the Property, Rents, together with: words "Mortgaged Property mean and Improvements, Personal Property and all right, title, and interest (including any claim or demand or demand in law or equity) that Trustor now has or may later acquire in or to such Mortgaged Property; all easements, rights, privileges, tenements, hereditaments, and appurtenances belonging or in any way appertaining to the Mortgaged Property; all of the estate, right, title, interest, claim, demand, reversion, or remainder of Trustor in or to the Mortgaged Property, either at law or in equity, in possession or expectancy, now or later acquired; all exterior landscaping on the Mortgaged Property; all development rights or credits and air rights; all water and water rights (whether or not appurtenant to the Mortgaged Property) and shares of stock pertaining to such water or water rights, ownership of which affects the Mortgaged Property; all minerals, oil, gas, and other hydrocarbon substances and rights thereto in, on, under, or upon the Mortgaged Property and all royalties and profits from any such rights or shares of stock; all right, title, and interest of Trustor in and to any streets, ways, alleys, strips, or gores of land adjoining the Property or any part of it that Trustor now owns or at any time later acquires and all adjacent lands within enclosures or occupied by buildings partly situated on the Mortgaged Property; all intangible Mortgage Property and rights the Mortgaged Property or its operation connection with it, including, without permits, licenses, plans, specifications, contracts, subcontracts, bids, deposits services, installations, refunds due Trustor, trademarks, and service marks; relating to or used in limitation, construction for utility trade names, all of the right, title, and interest of Trustor in and to the land lying in the bed of any street, road, highway, or avenue in front of or adjoining the Property; 3 P:\forms\Housing Fonns\HOME Forms\Neighborhood Hsg\NHS Deed of Trust Parcel Ldoc any and all awards previously made or later to be made by any governmental authority to the present and all subsequent owners of the Mortgaged Property that may be made with respect to the Mortgaged Property as a result of the exercise of the right of eminent domain, the alteration of the grade of any street, or any other injury to or decrease of value of the Mortgaged Property, which award or awards are assigned to the Lender, and which the Lender, at its option, is authorized, directed, and empowered to collect and receive the proceeds of any such award or awards from the authorities making them and to give proper receipts and acquittances for them, and to apply them as provided in this Deed of Trust; all leases of the Mortgaged Property or any part of it now or later entered into and all right, title, and interest of the Trustor under such leases, including cash or securities deposited by the tenants to secure performance of their obligations under such leases (whether such cash or securities are to be held until the expiration of the terms of such leases or applied to one or more of the installments of rent coming due immediately before the expiration of such terms), all rights to al insurance proceeds and unearned insurance premiums arising from or relating to the Mortgaged Property, all other rights and easements of the Trustor now or later existing pertaining to the use and enjoyment of the Mortgaged Property, and all right, title, and interest of the Trustor in and to all declarations of covenants, conditions, and restrictions as may affect or otherwise relate to the Mortgaged Property; any and all proceeds of any insurance policies covering the Mortgaged Property, whether or not such insurance policies were required by the Lender as a condition of making the loan secured by this Deed of Trust or are required to be maintained by the Trustor as provided below in this Deed of Trust; which proceeds are assigned to the Lender, and which the Lender, at its option, is authorized, directed, and empowered to collect and receive the proceeds of such insurance policies from the insurers issuing the same and to give proper receipts and acquittances for such policies, and to apply the same as provided below; all plans and specifications for the Improvements; all contracts and subcontracts relating to the Improvements; all deposits (including tenants' security deposits; provided, however, that if the Lender acquires possession 4 P:\Forms\Housing Fonns\HOME Fonns\Neighborhood Hsg\NHS Deed of Trust Parcell.doc or control of tenants' security deposits the Lender shall use the tenants' security deposits only for such purposes as governmental requirements permit), funds, accounts, contract rights, instruments, documents, general intangibles, and notes or chattel paper arising from or in connection with the Property or other Mortgaged Property; all permits, licenses, certificates, and other rights and privileges obtained in connection with the Property or other Mortgaged Property; all soils reports, engineering reports, land planning maps, drawings, construction contracts, notes, drafts, documents, engineering and architectural drawings, letters of credit, bonds, surety bonds, any other intangible rights relating to the Property and Improvements, surveys, and other reports, exhibits, or plans used or to be used in connection with the construction, planning, operation, or maintenance of the Property and Improvements and all amendments and modifications; all proceeds arising from or by virtue of the sale, lease, grant of option, or other disposition of all or any part of the Property, Personal Property, or other Mortgaged Property (consent to same is not granted or implied); and all proceeds (including premium refunds) payable or to be payable under each insurance policy relating to the Property, the Personal Property, or other Mortgaged Property; (, all tax refunds, bills, notes, inventories, accounts and charges receivable, credits, claims, securities, and documents of all kinds, and all instruments, contract rights, general intangibles, bonds and deposits, and all proceeds and products of the Trustor in the Mortgaged Property; all accounts, contract rights, chattel paper, documents, instruments, books, records, claims against third parties, money, securities, drafts, notes, proceeds, and other items relating to the Mortgaged Property; all proceeds of any of the foregoing. ~ As used in this Deed of Trust, "Mortgaged Property" is expressly defined as meaning allor, when the context permits or requires, any portion of it and allor, when the context permits or requires, any interest in it. 5 P:\Fonns\Housing Forms\HOME Fonns\Neighborhood Hsg\NHS Deed ofTrusl Parcell ,doc Personal Property. The words "Personal Property" mean all of the right, title and interest of Trustor now or hereafter existing in and to the following now or hereafter located in, upon, within or about, or used in connection with or generated by the construction, use, operation or occupancy of the Property and any business or acti vi ty conducted thereon or therein, together with all accessories, additions, accessions, renewals, replacements and substitutions thereto or therefore and the proceeds and products thereof: (a) all materials, suppl ies, furniture, floor coverings window coverings, furnishings, appliances, office supplies, equipment, construction materials, vehicles, machinery, computer hardware and software, maintenance equipment, window washing equipment, repair equipment and other equipment, tools, telephone and other communications equipment, food service preparation equipment and utensils, chinaware, glassware, silverware and hollowware, food and beverage service equipment, food items and food stuffs; (b) all books, ledgers, records accounting records, files, tax records and returns, policy manuals, papers, correspondence, and electronically recorded data; (c) all "General Intangibles" (as defined in the California Uniform Commercial Code), instruments, money, "Accounts" (as defined in the California Uniform Commercial Code), accounts receivable, notes, certificates of deposit, chattel paper, letters of credit, chooses in action, good will, rights to pay of money, rents, rental fees, equipment fees and other amounts relating to the development or use of the Property or payable by persons who utilize the Property or any of the Improvements or paid by persons in order to obtain the right to use the Property and any of the Improvements, whether or not so used; trademarks, service marks, trade dress, trade names, licenses, sales contracts, deposits, plans and specifications, drawings, working drawings, studies, maps, surveys; soils, environmental engineering or other reports, architectural and engineering contracts, construction contracts, construction management contracts, surety bonds, feasibility and market studies, management and operating agreements, service agreements and contracts, landscape maintenance agreements, security service and other services agreements and vendors agreements; (d) all compensation, awards and other payments of relief (and claims therefore) made for a taking by eminent domain, or by any event in lieu thereof (including, without limitation, property and rights and interests in property received in lieu of any such taking), of all or any part of such Personal Property, together with interest thereon, and any and all proceeds (or claims for proceeds) of casualty, liability or other insurance pertaining to such Personal Property, together with interest thereon; (e) any and all claims or demands against any person with respect to damage or diminution in value to such Personal Property or 6 P:\Forms\Housing Forms\HOME Forms\Neighborhood Hsg\NHS Deed of Trust Parcd I.doc damage or diminution in value to any business or other activity conducted on Property; (f) any and all security deposits, deposits of security or advance payments made to others to Trustor with respect to: (i) insurance policies relating to the Property; (ii) prepayments and/or periodic deposits or improvements for property taxes or assessments of any kind or nature affecting the Property; (iii) utility services for the Property and/or the Improvements; (iv) maintenance, repair or similar services for the Property or any other services or goods to be used by any business or other activity conducted on the Property; (g) any and all authorizations, consents, licenses, permits and approvals of and from all persons required from time to time in connection with the construction, use, occupancy or operation of the Property, the improvements, or any business or activity conducted thereon or therein or in connection with the operation, occupancy or use thereof; (h) all warranties, guaranties, utility or street improvement bonds, construction completion and payment surety bonds, utility contracts, telephone exchange numbers, yellow page or other directory advertising and the like; (i) all goods, contract rights, and inventory; (j) all leases and use agreements of machinery, equipment and other personal property; (k) all insurance policies covering all or any portion of the Property; (1) all reserves and funds held in escrow by the Lender or other persons for the Lender's benefit under the Loan Agreement and all funds deposited with the Lender pursuant to the Loan Agreement, all accounts into which such funds are deposited and all accounts, contract rights and general intangibles or other rights relating thereto; (m) all names by which the Property is now or hereafter known; (n) all interests in the security deposits of tenants; (0) all management agreements, blueprints, plans, maps, documents, books and records relating to the Property; (p) the proceeds from sale, assignment, conveyance or transfer of all or , any portion of the Property or any interest therein, or from the sale of any goods, inventory or services from upon or within the Property and/or the Improvements; ) (q) all documents of membership in an owner or members association or similar group having responsibility for managing or operating any part of the Property; (r) all other property (other than "Fixtures," as defined in the Uniform Commercial Code) of any kind or character as defined in or subject to the provisions of the California Uniform Commercial Code, Secured Transactions, as amended and; (s) all proceeds of the conversions, voluntarily or involuntarily, of any of the foregoing into cash or liquidated claims. 7 P:\FOlms\Housing FotT11S\HOME Forms\Neighborhood Hsg\NHS Deed of Trust Parcel 1 doc Promissory Note. The words "promissory Note" mean the Promissory Note of even date herewith, in the principal amount of Thirty Two Thousand, Five Hundred Dollars ($32,500) delivered by the Trustor to the Redevelopment Agency of the City of San Bernardino, as Lender, together with all renewals, extensions, modifications, refinancing, and substitutions for the Promissory Note. Related Documents. The words "Related Documents" mean and include without limitation all promissory notes, credit agreements, loan agreements, guaranties, security agreements, mortgages, deeds of trust, and all other instruments, agreements and documents, by and between the Trustor and the Lender whether now or hereafter existing, evidencing or securing the Indebtedness. Rents. The word "Rents" means all present and future revenues, income, issues, royalties, profits, and benefits derived from the Property. rents, other Trustee. The word "Trustee" means First :American Title Insurance Company, and any substitute or successor trustees. Trustor. The word "Trustor" means the Trustor named above and its successors and assigns. 3.0 THIS DEED OF TRUST, INCLUDING THE ASSIGNMENT OF LEASES AND RENTS AND THE SECURITY INTEREST IN THE RENTS AND PERSONAL PROPERTY, IS GIVEN TO SECURE (1) PAYMENT OF THE INDEBTEDNESS AND (2) PERFORMANCE OF ANY AND ALL OBLIGATIONS OF TRUSTOR UNDER THE PROMISSORY NOTE, THE RELATED DOCUMENTS, AND THIS DEED OF TRUST. THE PROMISSORY NOTE AND THIS DEED OF TRUST ARE GIVEN AND ACCEPTED ON THE FOLLOWING TERMS: 3.1 PAYMENT AND PERFORMANCE. Except as otherwise provided in this Deed of Trust, Trustor shall pay to Lender all amounts secured by this Deed of Trust as they become due, and shall strictly and in a timely manner perform all of Trustor's obligations under the Promissory Note, this Deed of Trust, the Loan Agreement and the Related Documents. 3.2 POSSESSION AND MAINTENANCE OF THE PROPERTY. Trustor that Trustor I s possession Mortgaged Property shall provisions: and use of the Property be governed by the agrees and the following 8 P:\Forms\Housing Fonns\HOME Forms\Neighborhood Hsg\NHS Deed ofTrusl Parcell ,doc Possession and Use. Until the occurrence of an Event of Default, Trustor may (a) remain in possession and control of the Mortgaged Property and collect Rents as they become due and (b) use, develop, operate or manage the Property for the purposes authorized in the Loan Agreement. Duty to Maintain and Preserve. Trustor shall: (a) maintain the Property and the Mortgaged Property in good condition and repair; (b) shall construct and improve the Property in accordance with the Loan Agreement; (c) restore and repair the Improvements or any part of the Mortgaged Property that may be damaged or destroyed, including but not limited to construction defects, soil subsidiances and environmental damages whether or not insurance proceeds are available to cover any part of such cost of restoration or repair (regardless of whether the proceeds of insurance may be available to the Trustor under this Deed of Trust); (d) pay when due all claims for labor performed and materials furnished in connection with the Improvements and not permit any mechanics' liens or materials suppliers' liens to arise against the Property; (e) not permit any waste on the Property, or commit, suffer or permit any nuisance to occur on the Property; (f) not abandon the Mortgaged Property; (g) notify the Beneficiary in writing of any condition at or on the Property that may have a material affect on the market value of the Mortgaged Property; and (h) maintain the Property and the Improvements and generally operate it in a manner to realize it maximum rental potential. Hazardous Substances. (a) The terms "hazardous wastes", "hazardous substance", "disposal," "release", and "threatened release", as used in this Deed of Trust, shall have the same meanings as set forth in the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, 42 U.S. C. Section 9601, et seq. ("CERCLA"), the Superfund Amendments and Reauthorization Act of 1986, Pub. L. No. 99-499 ("SARA"), the Hazardous Materials Transportation Act. 49 U.S.C. Section 1801, et seq., the Resource Conservation and Recovery Act, 49 U.S.C. Section 6901, et seq., Chapters 6.5 through 7.7 of Division 20 of the California Health and Safety Code, Section 25100, et seq., or other applicable state or Federal laws, rules, or regulations adopted pursuant to any of the foregoing. (b) [OMITTED - - NO TEXT] (c) Trustor represents and warrants that neither the Trustor nor any tenant of Trustor occupying and improving any portion of the Mortgaged Property or any contractor, agent or other 9 P:\Fonns\Housing Fonns\HOME Forms\Neighborhood Hsg\NHS Deed of Trust Parcd 1 ,doc authorized user of any such tenant shall use, generate, manufacture, store, treat, dispose of, or release any hazardous waste or substance on, under, about or from any of the Mortgaged Property, except in compliance with all applicable law relating to the transportation, storage, disposal or lawful use of any hazardous waste or substance. Trustor shall comply and cause each of its tenants and all contractors, agents or other authorized users of the Mortgaged Property to comply with all applicable laws relating to any hazardous wastes or substances, including without limitation, obtaining and filing all applicable notices, licenses, permits and similar authorizations. Trustor shall establish and maintain a hazardous wastes and substances management and operations policy for the Mortgaged Property in order to assure and monitor continued compliance by the Trustor and each of its tenants and all contractors, agents, or other authorized users of the Property with all laws relating to hazardous wastes or substances. (d) Trustor authorizes Lender and its agents to enter upon the Mortgaged Property upon reasonable notice to make snch inspections and tests as Lender may deem appropriate to determine compliance by the Trustor with this paragraph of Section 3.2 if Lender reasonably believes a violation of law has occurred. Any inspections or tests made by Lender shall be at Trustor's expense and for Lender's purposes only and shall not be construed to create any responsibility or liability on the part of Lender to Trustor or to any other person. Trustor hereby agrees to indemnify and hold harmless Lender against any and all claims, losses, liabilities, damages, penalties, and expenses which Lender may directly or indirectly sustain or suffer resulting from breach of this paragraph of Section 3.2. The provisions of this paragraph of Section 3.2 of the Deed of Trust, including the obligation to indemnify the Lender, shall survive the payment of the Indebtedness and the satisfaction and reconveyance of the lien of this Deed of Trust and shall not be affected by Lender's acquisition of any interest in the Property, whether by foreclosure or otherwise. Compliance with Governmental Requirements. Trustor shall promptly comply with all laws, ordinances, and regulations, now or hereafter in effect, of all governmental authorities applicable to the use or occupancy of the Mortgaged Property. Trustor may contest in good faith any such law, ordinance, or regulation and withhold compliance during any proceeding, including appropriate appeals, so long as Trustor has notified Lender in writing prior to doing so and so long as, in Lender's reasonable opinion, Lender's interests in the Mortgaged Property are not jeopardized. Lender may require Trustor to 10 P:\Fonns\Housing forms\HOME Forms\Neighborhood Hsg\NHS Deed of Trust Parcel I doc 3.3 (, post adequate security or a surety bond, reasonably satisfactory to Lender, to protect Lender's interest. Duty to Protect. Trustor agrees neither to abandon nor leave unattended the Mortgaged Property. Trustor shall do all other acts, in addition to those acts set forth above in this section, which from the character and use of the Mortgaged Property are reasonably necessary to protect and preserve the Mortgaged Property. DUE ON SALE. Lender may, at its option, declare immediately due and payable all sums secured by this Deed of Trust upon the sale or transfer, without the Lender's prior written approval, of all or any part of the Mortgaged Property, or any interest in the Mortgaged Property. A" sale or transfer" means the conveyance of the Mortgaged Property or any right, title or interest therein; whether legal or equitable; whether voluntary or involuntary; whether by outright sale, deed, installment sale contract, land contract, contract for deed, leasehold interest with a term greater than one (1) year, lease-option contract, or by sale, assignment or transfer of any beneficial interest in or to any land trust holding title to the Mortgaged Property or by any other method of conveyance of the property interest. This option shall be exercised by the Lender in accordance with the provisions of Section 5.1 hereof; provided however, this option shall not be exercised if such remedy is prohibited by applicable law. 3.4 TAXES AND LIENS. The following provisions relating to the taxes and liens on the Mortgaged Property are part of this Deed of Trust: Payment. Trustor shall pay when due (and in all events prior to delinquency) all taxes, special taxes, assessments, charges (including water and sewer), fines and impositions levied against or on account of the Mortgaged Property, and shall pay when due all claims for work done on or for services rendered or material furnished to the Mortgaged Property. Trustor shall maintain the Mortgaged Property free of all liens having priority over or equal to the interest of Lender under this . Deed of Trust I except for the lien of property taxes and assessments not due. Right to Contest. Trustor may withhold payment of any tax, assessment, or claim in connection with a good faith dispute over the obligation to pay, so long as Lender's interest in the Mortgaged Property is not jeopardized. If a lien arises or is filed as a result of nonpayment, Trustor shall within sixty 11 P:\Fonns\Housing Forms\HOME Forms\Neighborhood Hsg\NHS Deed ofTrusl Parcell.doc (60) days after the lien arises or, if a lien is filed, within sixty (60) days after Trustor has notices of the filing, secure the discharge of the lien, or if requested by Lender, deposit with Lender cash or a sufficient corporate surety bond or other security satisfactory to Lender in an amount sufficient to discharge the lien plus any costs and attorneys' fees or other charges that could accrue as a result of a foreclosure or sale under the lien; provided, however, that Trustor shall not be required to payor make provisions for the payment of any tax, assessment, lien or charge so long as the Trustor in good faith shall contest the validity or amount thereof and so long as such delay in payment does not subject the Property to forfeiture or sale. In any contest, Trustor shall defend itself and Lender and shall satisfy any adverse judgment before enforcement against the Property. Trustor shall name Lender as an additional obligee under any surety bond furnished in the contest proceedings. Evidence of Payment. Trustor shall upon demand furnish to Lender satisfactory evidence of payment of the taxes or assessments and shall authorize the appropriate governmental official to deliver to Lender at any time a written statement of the taxes and assessments against the Property. 3.5 CONDEMNATION. The following provisions relating to condemnation proceedings are a part of this Deed of Trust: Proceedings. If any proceeding in condemnation is filed affecting any portion of the Mortgaged Property, Trustor shall promptly notify the Beneficiary in writing, and Trustor shall promptly take such steps as may be necessary to defend the action and obtain the award. Trustor may be the nominal party in such proceeding, but the Beneficiary shall be entitled to participate in the proceeding and to be represented in the proceeding by counsel of its own choice, and Trustor will deliver or cause to be delivered to the Beneficiary such instruments as may be requested by it from time to time to permit such participation. 3.6 CASUALTY INSURANCE. The Trustor shall at all times keep the Mortgaged Property insured for the benefit of the Trustee and the Beneficiary as additional insured as follows: Against damage or loss by fire and such other hazards (including lightning, windstorm, hail, explosion, riot, acts of striking employees, civil commotion, vandalism, malicious mischief, aircraft, vehicle, and smoke) as are covered by the broadest form of extended coverage endorsement available from 12 P:\Fonns\Housing Fonns\HOME FOIms\Neighoorhood Hsg\NHS Deed of Trust Parcell_doc time to time, including course of construction and builders risk endorsements in an amount not less than the full insurable value of the Mortgaged Property, with a deductible amount not to exceed Ten Thousand Dollars ($10,000); provided however, that prior to the recordation of the UConstruction Loan" as this term is defined in the Loan Agreement, such insured amount shall be not less than $1,000,000, and upon the recordation of such Construction Loan the full insurable value shall be not less than the principal amount of such Construction Loan, plus the principal amount of the Indebtedness; Against damage or loss from (a) sprinkler system leakage and (b) boilers, boiler tanks, heating and air conditioning equipment, pressure vessels, auxiliary piping, and similar apparatus, on such basis and in such amounts as the Beneficiary may require; Liability Insurance. Trustor shall procure and maintain workers' compensation insurance for employees and comprehensive general liability insurance covering Trustor, Trustee, and the Beneficiary against claims for bodily injury or death or for damage occurring in, on, about, or resulting from the Mortgaged Property, or any street, drive, sidewalk, curb, or passageway adj acent to it, in standard form and with such insurance company or companies and in an amount of at least One Million Dollars ($1,000,000) combined single limit, or such greater amount as the buyer may require, which insurance shall include completed operations, product liability, and blanket contractual liability coverage that insures contractual liability under the indemnifications set forth in this Deed of Trust (but such insurance coverage or its amount shall in no way limit such indemnification) . Other Insurance. The Trustor shall procure and maintain such other insurance or such additional amounts of insurance, covering the Trustor or the Mortgaged Property, as (a) may be required by the terms of any construction contract for the improvements or by any governmental authority, or (b) may be reasonably required by the Beneficiary from time to time. Form of Policies. All insurance required under this paragraph shall be paid for and nonassessable. The policies shall contain such provisions, endorsements, and expiration dates as the Beneficiary from time to time reasonably requests and shall be in such form and amounts, and be issued by such insurance companies admitted as surety companies and doing business in the State of California, as the Beneficiary shall approve in the Beneficiary's sole and absolute discretion. Unless otherwise expressly approved in writing by the Beneficiary, 13 P:\Fonns\Housing Forms\HOME Forms\Neighborhood Hsg\NHS Deed of Trust Pared I.doc each insurer shall have a Best Rating of not less than "A (vii)", or better. All policies shall (a) contain a waiver of subrogation endorsement; (b) provide that the policy will not lapse or be canceled, amended, or materially altered (including by reduction in the scope or limits of coverage) without at least thirty (30) days prior written notice to the Beneficiary; (c) with the exception of the comprehensive general liability policy, contain a mortgagee's endorsement (438 BFU Endorsement or equivalent), and name the Beneficiary and trustee as insureds; and (d) include such deductibles as the Beneficiary may approve. If a policy required under this paragraph contains a co-insurance or overage clause, the policy shall include a stipulated value or agreed amount endorsement acceptable to the Beneficiary. Duplicate Originals or Certificates. Duplicate original policies evidencing the insurance required under this paragraph and any additional insurance that may be purchased on the Mortgaged Property by or on behalf of Trustor shall be deposited with and held by the Beneficiary (a) receipts evidencing payment of all premiums on the Pdlicies and (b) duplicate original renewal policies or a binder with evidence satisfactory to the Beneficiary of payment of all premiums at least thirty (30) days before the policy expires. In lieu of the duplicate original policies to be delivered to the Beneficiary under this paragraph, Trustor may also deliver original certificates from the issuing insurance company, evidencing that such policies are in full force and effect and containing information that, in the reasonable judgment of the Beneficiary, is sufficient to allow Lender to ascertain whether such policies comply with the requirements of this Paragraph. No Separate Insurance. The Trustor shall not carry separate or additional insurance concurrent in form or contributing in the event of loss with that required under this paragraph unless endorsed in favor of Trustee and the Beneficiary as required by this paragraph and otherwise approved by the Beneficiary in all respects. Transfer of Title. In the event of foreclosure of this Deed of Trust or other transfer of title or assignment of the Mortgaged Property in extinguishment, in whole or in part, of the Indebtedness, all right, title, and interest of the Trustor in and to all insurance policies required under this paragraph or otherwise then in force with respect to the Mortgaged Property and all proceeds payable under, and unearned premiums on, such policies shall immediately vest in the purchaser or other transferee of the Mortgaged Property. 14 P:\Fonns\Housing Fonns\HOME FOlTl1S\Neighborhood Hsg\NHS Deed of Trust Parcell.doc Beneficiary's Right to Obtain. Trustor shall deliver to the Beneficiary original policies or certificates evidencing such insurance at least thirty (30) days before the existing policies expire. If any such policy is not so delivered to the Beneficiary or if any such policy is canceled, whether or not Lender has the policy in its possession, and no reinstatement or replacement policy is received before termination of insurance, the Beneficiary, without notice to or demand on Trustor, may (but is not obligated to) obtain such insurance insuring only the Beneficiary and Trustee with such company as the Beneficiary may deem satisfactory, and pay the premium for such policies, and the amount of any premium so paid shall be charged to and promptly paid by Trustor or, at the Beneficiary's option, may be added to the Indebtedness. The Beneficiary acknowledges that, if the Beneficiary obtains insurance, it is for the sole benefit of the Beneficiary and Trustee, and Trustor shall not rely on any insurance obtained by the Beneficiary to protect Trustor in any way. Duty to Restore After Casualty. If any act or occurrence of any kind or nature (including any casualty for which insurance was not obtained or obtainable) results in damage to or loss or destruction of the Mortgaged Property, Trustor shall immediately give notice of such loss or damage to the Beneficiary and, if the Beneficiary so instructs, shall promptly, at the Trustor's sole cost and expense, regardless of whether any insurance proceeds will be sufficient for the purpose, commence and continue diligently to completion to restore, repair, replace, and rebuild the Mortgaged Property as nearly as possible to its value, condition, and character immediately before the damage, loss, or destruction. 3.7 ASSIGNMENT TO THE BENEFICIARY. The proceeds of any award or claim for damages, direct or consequential, in connection with any condemnation or other taking of or damage or injury to the Mortgaged Property, or any part of it, or for conveyance in lieu of condemnation, are assigned to and shall be paid to the Beneficiary, regardless of whether the Beneficiary's security is impaired. All causes of action, whether accrued before or after the date of this Deed of Trust, of all types for damages or injury to the Mortgaged Property or any part of it, or in connection with any transaction financed by funds lent to the Trustor by the Beneficiary and secured by this Deed of Trust, or in connection with or affecting the Mortgaged Property or any part of it, including, without limitation, causes of action arising in tort or contract or in equity, are assigned to the Beneficiary as additional security, and the proceeds shall be paid to the Beneficiary. The Beneficiary, at its option, may appear in and prosecute in its own name any action or 15 P:\Fonns\Housing Forms\HOME Forms\Neighborhood Hsg\NHS Deed ofTrusl Parcell.doc proceeding to enforce any such cause of action and may make compromise or settlement of such action. The Trustor shall notify the Beneficiary in writing immediately on obtaining knowledge of any casualty damage to the Mortgaged Property or damage in any other manner in excess of Ten Thousand Dollars ($10,000) or knowledge of the institution of any proceeding relating to the condemnation or other taking of or damage or injury to all or any portion of the Mortgaged Property. The Beneficiary in its sole and absolute discretion, may participate in any such proceedings and may join borrower in adjusting any loss covered by insurance. Trustor covenants and agrees with the Beneficiary, at Beneficiary's request, to make, execute, and deliver, at Trustor's expense, any and all assignments and other instruments sufficient for the purpose of assigning the aforesaid award or awards, causes of action, or claims of damages or proceeds to the Beneficiary free, clear, and discharged of any and all encumbrances of any kind or nature. Compensation and Insurance Payments. All compensation, awards, proceeds, damages, claims, insurance recoveries, rights of action, and payments that Trustor may receive or to which the Beneficiary may become entitled with respect to the Mortgaged Property if any damage or injury occurs to the Mortgaged Property, other than by the Beneficiary condemnation or partial taking of the Mortgaged Property, shall be paid over to the Beneficiary and shall be applied first toward reimbursement of all costs and expenses of the Beneficiary in connection with their recovery and disbursement, and shall then be applied as follows: The Beneficiary shall consent to the application of such payments to the restoration of the Mortgaged Property so damages only the Beneficiary has met all the following conditions (a breach of one of which shall constitute a default under this Deed of Trust, the Promissory Note, and any Related Document): (a) Trustor is not in default under any of the terms, covenants, and conditions of the Related Documents; (b) all then-existing leases affected in any way by such damage will continue in full force and effect; (c) the Beneficiary is satisfied that the insurance or award proceeds, plus any sums added by Trustor, shall be sufficient to fully restore and rebuild the Mortgaged Property under then current governmental requirements; (d) within sixty (60) days after the damage tot he Mortgaged Property, Trustor presents to the Beneficiary a restoration plan satisfactory to the Beneficiary and each local agency with jurisdiction, which includes cost estimates and schedules; (e) construction and completion 16 P:\Fonns\Housing Forms\UOME Fonns\Neighborhood Hsg\NHS Deed of Trust Parcd I_doc (, of restoration and rebuilding of the Mortgaged Property shall be completed in accordance with plans and specifications and drawings submitted to the Beneficiary within thirty (30) days after receipt by the Beneficiary of the restoration plan and thereafter approved the Beneficiary; which plans, specifications, and drawings shall not be substantially modified, changed, or revised without the Beneficiary's prior written consent; (f) within ninety (90) days after such damage, Trustor and a licensed contractor satisfactory to the Beneficiary enter into a fixed price or guaranteed maximum price contract satisfactory to the Beneficiary, providing for complete restoration in accordance with such restoration plan for an amount not to exceed the amount of funds held or to be held by the Beneficiary; (g) all restoration of the Improvements so damaged or destroyed shall be made with reasonable promptness and shall be of a value at least equal to the value of the Improvements so damages or destroyed before such damage or destruction; (h) the Beneficiary reasonably determines that there is an identified source (whether from income from the Mortgaged Property or another source) sufficient to pay all debt service and operating expenses of the Mortgaged Property during its restoration as required above; and (i) any and all funds that are made available for restoration and rebuilding under this subparagraph shall be disbursed at the sole election of the Beneficiary through the Trustee, or a title insurance or trust company satisfactory to the Beneficiary, in accordance with standard construction lending practices and mechanics' lien waivers and title insurance date-downs, and the provision of payment and performance bonds by the Trustor, or in any other manner approved by the Beneficiary in the Beneficiary's sole and absolute discretion; or .. If fewer than all conditions (a) through (i) in the preceding subparagraph are satisfied, then such payments shall be applied in the sole and absolute discretion of the Beneficiary: to the payment of the Indebtedness secured by this Deed of Trust; or to the reimbursement of Trustor's expenses incurred in the rebuilding and restoration of the Mortgaged Property. If the Beneficiary elects to make any funds available to restore the Mortgaged Property, then all of the conditions (a) through (i) in the preceding subparagraph shall apply, except for such conditions that the Beneficiary in its sole and absolute discretion, may waive. 17 P:\Forms\Housing Forms\HOME Fonns\Neighborhood Hsg\NHS [ked of Trust Parcell.doc Material Loss Not Covered. If any material part of the Mortgaged Property is damaged or destroyed and the loss, is not adequately covered by insurance proceeds collected or in the process of collection, the Trustor shall deposit with the Beneficiary, within thirty (30) days after the Beneficiary's request, the amount of the loss not so covered. Total Condemnation Payment. All compensation, awards, proceeds, damages, claims, rights of action, and payments that Borrower may receive or to which the Trustor may become entitled with respect to the Mortgaged Property in the event of a total condemnation or other total taking of the Mortgaged Property by a public agency shall be paid over to the Beneficiary and shall be applied first to the reimbursement of all Beneficiary's costs and expenses in connection with their recovery, and shall then be applied to the payment of the Indebtedness. Any surplus remaining after payment and satisfaction of the Indebtedness shall be paid to the Trustor as its interest may then appear. Partial Condemnation Payments. All compensation, awards, proceeds, damages, claims, insurance recoveries, rights of action, and payments ("funds") that the Trustor may receive or to which the Trustor may become entitled with respect to the Mortgaged Property in the event of a partial condemnation or other partial taking of the Mortgaged Property by a public agency, unless the Trustee and Beneficiary otherwise agree in writing, shall be divided into two portions, one equal to the principal balance of the Promissory Note at the time of receipt of such funds and the other equal to the amount by which such funds exceed the principal balance of the Promissory Note at the time of receipt of such funds. The first such portion shall be applied to the sums secured by this Deed of Trust, whether or not then due, including but not limited to principal, accrued interest, and advances with the balance of the funds paid to the Trustor. No Cure of Waiver of Default. Any application of such amounts or any portion of it to any Indebtedness secured by this Deed of Trust shall not be construed to cure or waive any default or notice of default under this Deed of Trust or invalidate any act done under any such default or notice. 3.8 EXPENDITURES BY LENDER. If Trustor fails to comply with any provision of this Deed of Trust, or if any action or proceeding is commenced against the Mortgaged Property that would materially affect Lender's interests in the Property, Lender on 18 P:\Fonns\Housing Fonns\HOME Forms\Neighborhood Hsg\NHS Deed of Trust Parcell_doc Trustor's behalf may, but shall not be required to, take any action that Lender reasonably deems appropriate. Any amount that Lender expends in do doing will bear interest at the rate charged under the Promissory Note from the date incurred or paid by Lender to the date of repayment by Trustor. All such expenses, at Lender's option, will (a) be payable on demand, (b) be added to the balance of the Promissory Note and be apportioned among and be payable with any installment payments to become due during the remaining term of the Promissory Note, or (c) be treated as a balloon payment which will be due and payable at the Promissory Note's maturity. This Deed of Trust also will secure payment of these amounts. The rights provided for in this paragraph shall be in addition to any other rights or any remedies to which Lender may be entitled on account of the default. Any such action by Lender shall not be construed as curing the default so as to bar Lender from any remedy that it otherwise would have had. 3.9 WARRANTY. Trustor warrants that the Mortgaged Property Trustor's use of the Mortgaged Property complies with existing applicable laws, ordinances, and regulations governmental authorities. and all of 3.10 IMPOSITION OF TAXES, FEES AND CHARGES BY GOVERNMENTAL AUTHORITIES. The following provisions relating to governmental taxes, fees and charges are a part of this Deed of Trust: Current Taxes, Fees and Charges. Upon request by Lender, Trustor shall execute such documents in addition to this Deed of Trust and take whatever other action is requested by Lender to perfect and continue Lender's lien and security interest on the Property. Trustor shall reimburse Lender for all taxes, as described below, together with all expenses incurred in recording, perfecting or continuing this Deed of Trust, including without limitation all taxes, fees, documentary stamps, and other charges for recording or registering this Deed of Trust. Taxes. The following shall constitute taxes to which this section applies: (a) a specific tax upon this type of Deed of Trust or upon all or any part of the Indebtedness secured by this Deed of Trustj (b) a specific tax on Trustor which Trustor is authorized or required to deduct from payments on the Indebtedness secured by this type of Deed of Trustj (c) a tax on this type of Deed of Trust chargeable against the Lender or the holder of the Promissory Notej and (d) a specific tax on 19 P:\Forms\Housing Fonns\HOME Forms\Neighborhood Hsg\NHS Deed of Trust Parcell_doc all or any portion of the Indebtedness or on payments of principal and interest made by Trustor. Subsequent Taxes. If any tax to which this section applies is enacted subsequent to the date of this Deed of Trust, this event shall have the same effect as an Event of Default (as defined below), and Lender may exercise any or all of its available remedies for an Event of Default as provided below unless Trustor either (a) pays the tax before it becomes delinquent, or (b) contests the tax as provided above in the Taxes and Liens section and deposits with Lender cash or a sufficient corporate surety bond or other security satisfactory to Lender. 3.11 SECURITY AGREEMENT; FINANCING STATEMENTS. The provisions relating to this Deed of Trust as agreement are a part of this Deed of Trust: following a security Security Agreement. This instrument shall constitute a security agreement to the extent of any of the Mortgaged Property constitutes fixtures or other personal propetty, and Lender shall have all of the rights of a secured party under the Uniform Commercial Code as amended from time to time. Security Interest. Upon request by Lender, Trustor shall execute financing statements and take whatever other action is requested by Lender to perfect and continue Lender's security interest in the Rents and Personal Property in a manner and at a place reasonably convenient to Trustor and Lender and make it available to Lender within ten (10) days after receipt of written demand from Lender. Addresses. The mailing addresses of Trustor (debtor) and Lender (secured party), from which information concerning the security interest granted by this Deed of Trust may be obtained (each as required by the Uniform Commercial Code), are as stated on the first page of this Deed of Trust. 3.12 FURTHER ASSURANCES; ATTORNEY-IN-FACT. The following provisions relating to further assurances and attorney-in-fact are a part of this Deed of Trust: Further Assurances. At any time, and from time to time, upon request of Lender, Trustor will make, execute and deliver, or will cause to be made, executed or delivered, to Lender or to Lender's designee, and when requested by Lender, cause to be filed, recorded, refiled, or rerecorded, as the case may be, at such times and in such offices and places as Lender may deem 20 P:\Fonn<;\Housing Fonns\HOME Fonns\Neighborhood Hsg\NHS Dttd of Trust Parcell.doc appropriate, any and all such mortgages, deeds of trust, security deeds, security agreements, financing statements, continuation statements, instruments of further assurance, certificates, and other documents as may, in the sole opinion of Lender, be necessary or desirable in order to effectuate, complete, perfect, continue, or preserve (a) the obligations of Trustor under the Promissory Note, this Deed of Trust, and the Related Documents, and (b) the liens and security interests created by this Deed of Trust as second priority liens on the Mortgaged Property, whether now owned or hereafter acquired by Trustor. Unless prohibited by law or agreed to the contrary by Lender in writing. Trustor shall reimburse Lender for all costs and expenses incurred in connection with the matters referred to in this paragraph. Attorney-In-Fact. If Trustor fails to do any of the things referred to in the preceding paragraph, Lender may do so for and in the name of Trustor and at Trustor's expense. For such purposes, Trustor hereby irrevocably appoints Lender as Trustor's attorney-in-fact for the purpose of making, executing, delivering, filing, recording, and doing all other things as may be necessary or desirable, in Lender's sole opinion, to accomplish the matters referred to in the preceding paragraph. 4.0 FULL PERFORMANCE AND RECONVEYANCE. If Trustor pays all the Indebtedness, including without limitation, all future advances, when due, and otherwise performs all the obligations imposed upon Trustor under the Loan Agreement, the Promissory Note and this Deed of Trust, Lender shall execute and deliver to Trustee a request for full reconveyance and shall execute and deliver to Trustor suitable statements of termination of any financing statement on file evidencing Lender's security interest in the Rents and Personal Property. Lender may charge Trustor a reasonable reconveyance fee at the time of reconveyance. 5.0 DEFAULT. Each of the following, at the option of Lender, shall constitute an event of default ("Event of Default") under this Deed of Trust: Default on Indebtedness. Failure of Trustor to make any payment when due under the Promissory Note if not cured within thirty (30) days after written notice from the Lender. 21 P:\Forms\Housing Forms\HOME Fonns\Neighborhood Hsg\NHS Deed of Trust Parcel1.doc Default on Other Payments. Failure of Trustor within the time required by this Deed of Trust to make any payment for taxes or insurance, or any other payment necessary to prevent filing of or to effect discharge of any lien. Compliance Default. Failure of Trustor to comply with any other term, obligation, covenant or condition contained in this Deed of Trust, the Promissory Note, the Loan Agreement, the Related Documents, including without limitation the OPA, after notice and any applicable cure period has expired. Breaches. Any warranty, representation or statement made or furnished to Lender by or on behalf of Trustor under this Deed of Trust, the Promissory Note, the Loan Agreement, or any of the Related Documents is, or at the time made or furnished was, false in any material respect. Insolvency. The insolvency of Trustor, appointment of a receiver for any part of Trustor's property, any assignment for the benefit of creditors, the commencement of any proceeding under any bankruptcy or insolvency laws by or against Trustor, which is not discharged or dismissed within ninety (90) days, or the dissolution or termination of Trustor's existence as a going business (if Trustor is a business) . Foreclosure, etc. Commencement of foreclosure, whether by judicial proceeding, self -help, repossession or any other method, by any creditor of Trustor against any of the Mortgaged Property. However, this subsection shall not apply in the event of a good faith dispute by Trustor as to the validity or reasonableness of the claim which is the basis of the foreclosure, provided that Trustor gives Lender written notice of such claim and furnishes reserves or a surety bond for the claim satisfactory to Lender. 5.1 RIGHTS AND REMEDIES ON DEFAULT. Upon the occurrence of any Event of Default and at any time thereafter, Trustee or Lender, at its option, may exercise anyone or more the following rights and remedies, in addition to any other rights or remedies provided by law: Foreclosure by Sale. Upon an Event of Default under this Deed of Trust, Beneficiary may declare the entire Indebtedness secured by this Deed of Trust immediately due and payable by delivery to Trustee of written declaration of default and demand for sale and of written notice of default and of election to cause the Mortgaged Property to be sold, which notice Trustee shall cause to be filed for record. Beneficiary 22 P:\Fonns\Housing Fo~\HOME Fonns\Neighborhood Hsg\NHS Deed ofTrust Parcd I.doc also shall deposit with Trustee this Deed of Trust, the Promissory Note, other documents requested by Trustee, and all documents evidencing expenditures secured hereby. After the lapse of such time may then be required by law following the recordation of the notice of default, and notice of sale having been given as then required by law, Trustee, without demand on Trustor, shall sell the Mortgaged Property at the time and place fixed by it in the notice of sale, either as a whole or in separate parcels, and in such order as it may determine, at public auction to the highest bidder for cash in lawful money of the United States, payable at time of sale. Trustee may postpone sale of all or any portion of the Mortgaged Property by public announcement at such time and place of sale, and from time to time thereafter may postpone such sale by public announcement at the time filed by the preceding postponement in accordance with applicable law. Trustee shall deliver to such purchaser its deed conveying the Mortgaged Property so sold, but without any covenant or warranty, express or implied. The recitals in such deed of any matters or facts shall be conclusive proof of the truthfulness thereof. Any person, including Trustor, Trustee or Beneficiary may purchase at such sale. After deducting all costs, fees and expenses of Trustee and of this Trust, including cost of evidence of title in connection with sale, Trustee shall apply the proceeds of sale to payment of: all sums expended under the terms hereof, not then repaid, with accrued interest at the amount allowed by law in effect at the date hereof; all other sums then secured hereby; and the remainder, if any, to the person or persons legally entitled thereto. ,. Judicial Foreclosure. With respect to all or any part of the Mortgaged Property, Lender shall have the right in lieu of foreclosure by power of sale to foreclose by judicial foreclosure in accordance with and to the full extent provided by California law. It is understood and agreed by the parties hereto that no action taken by the Lender shall result in the imposition of personal liability on any of the members, partners, directors, shareholders and officers, as applicable, of Trustor or on Trustor itself or its constituent members. \ UCC Remedies. With respect to all or any part of the Mortgaged Property, Lender shall have the rights and remedies of a secured party under the Uniform Commercial Code, including without limitation the right to recover any deficiency in the manner and to the full extent provided by California law. Collect Rents. Lender shall have the right, without notice to Trustor, to take possession of and manage the Mortgaged Property and collect the Rents, including amounts past due and 23 P:\Fonns\Housing Fonns\HOME Forms\Neighborhood Hsg\NHS Deed of Trust Parcell.doc unpaid, and apply the net proceeds, over and above Lender's costs, against the Indebtedness. In furtherance of this right, Lender may require any tenant or other user of the Mortgaged Property to make payments of rent or use fees directly to Lender. If the Rents are collected by Lender, then Trustor irrevocably designates Lender as Trustor's attorney-in-fact to endorse instruments received in payment thereof in the name of Trustor and to negotiate the same and collect the proceeds. Payments by tenants or other users to Lender in response to Lender's demand shall satisfy the obligations for which the payments are made, whether or not any property grounds for the demand existed. Lender may exercise its rights under this subparagraph either in person, by agent, or through a receiver. Appoint Receiver. Lender shall have the right to have a receiver appointed to take possession of all or any part of the Mortgaged Property, with the power to protect and preserve the Mortgaged Property, to operate the Property preceding foreclosure or sale, and to collect the Rents from the Mortgaged Property and apply the proceeds, over and above the cost of the receivership against the Indebtedness. The receiver may serve without bond if permitted by law. Lender's right to the appointment of a receiver shall exist whether or not the apparent value of the Mortgaged Property exceeds the indebtedness by a substantial amount. Employment by Lender shall not disqualify a person from serving as a receiver. Tenancy at Sufferance. If Trustor remains in possession of the Mortgaged Property after the Property is sold as provided above or Lender otherwise becomes entitled to possession of the Property upon default of Trustor, Trustor shall become a tenant at sufferance of Lender or the purchaser of the Mortgaged Property and shall, at Lender's option, either (a) pay a reasonable rental for the use of the Property, or (b) vacate the Mortgaged Property immediately upon the demand of Lender. Other Remedies. Trustee right or remedy provided Promissory Note or by law. or in Lender shall this Deed of have any other Trust or the Notice of Sale. Lender shall give Trustor reasonable notice of the time and place of any public sale of the Personal Property or of the time after which any private sale or other intended disposition of the Personal Property is to be made. Reasonable notice shall mean notice given at least thirty (30) days before the time of the sale or disposition. Any sale of Personal Property may be made in conjunction with any sale of the Mortgaged Property. 24 P:\Forms\Housing Fonns\HOME Forms\Neighborhood Hs.g\NHS Deed ofTrust Parcell.doc Sale of the Mortgaged Property. To the extent permitted by applicable law, Trustor hereby waives any and all rights to have the Mortgaged Property marshaled. In exercising its rights and remedies, the Trustee or Lender shall be free to sell all or any part of the Property together or separately, in one sale or by separate sales. Lender shall be entitled to bid at any public sale on all or any portion of the Mortgaged Property. Waiver; Election of Remedies. A waiver by any party of a breach of a provision of this Deed of Trust shall not constitute a waiver of or prejudice the party's rights otherwise to demand strict compliance with that provision or any other provision. Election by Lender to pursue any remedy provided in this Deed of Trust, the Promissory Note, in any Related Document, or provided by law shall not exclude pursuit of any other remedy, and an election to make expenditures or to take action to perform an obligation of Trustor under this Deed of Trust after failure of Trustor to perform shall not affect Lender's right to declare a default and to exercise any of its remedies. Attorneys' Fees; Expenses. If Lender institutes any suit or action to enforce any of the terms of this Deed of Trust, Lender shall be entitled to recover such sum as the court may adjudge reasonable as attorneys' fees at trial and on any appeal. Whether or not any court action is involved, all reasonable expenses incurred by Lender which in Lender's opinion are necessary at any time for the protection of its interest or the enforcement of its rights shall become a part of the Indebtedness payable on demand and shall bear interest at the Promissory Note rate from the date of expenditure until repaid. Expenses covered by this paragraph include, without limitation, however subject to any limits under applicable law, Lender's attorneys' fees whether or not there is a lawsuit, including attorneys' fees for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), appeals and any anticipated post-judgment collection services, the cost of searching records, obtaining title reports (including foreclosure reports), surveyors' reports, appraisal fees, title insurance, and fees for the Trustee, to the extent permitted by applicable law. For the purposes hereof, the words "Lender's attorneys' fees" include the salaries, benefits and expenses of attorneys employed in the office of the City Attorney computed on an hourly basis for any such legal services provided in connection with the enforcement of the rights of the Lender hereunder. Trustor also will pay any court costs, in addition to all other sums provided by law. 25 P:\Fonns\Housing Fonns\HOME Fonns\Neighborhood Hsg\NHS Deed of Trust Parcel Ldoc Rights of Trustee. Trustee shall have all of the rights and duties of Lender as set forth in this section. 6.0 POWERS AND OBLIGATIONS OF TRUSTEE. The following provisions relating to the powers and obligations of Trustee are part of this Deed of Trust: Powers of Trustee. In addition to all powers of Trustee arising as a matter of law, Trustee shall have the power to take the following actions with respect to the Property upon the written request of Lender and Trustor: (a) join in preparing and filing a map or plat of the Mortgaged Property, including the dedication of streets or other rights to the publici and (b) join in granting any easement or creating any restriction on the Mortgaged Property. Obligations to Notify. Trustee shall not be obligated to notify any other party of a pending sale under any other trust deed or lien, or of any action or proceeding in which Trustor, Lender, or Trustee shall be a party, unless the action or . proceeding is brought by Trustee. Trustee. Trustee shall meet all qualifications required for Trustee under applicable law. In addition to the rights and remedies set forth above, with respect to all or any part of the Mortgaged Property, the Trustee shall have the right to foreclose by notice and sale, and Lender shall have the right to foreclose by judicial foreclosure, in either case in accordance with and to the full extent provided by applicable law. Successor Trustee. Lender, at Lender's option, may from time to time appoint a successor Trustee to any Trustee appointed hereunder by an instrument executed and acknowledged by Lender and recorded in the office of the recorder of San Bernardino County, California. The instrument shall contain, in addition to all other matters required by state law, the names of the original Lender, Trustee, and Trustor the book and page where this Deed of Trust is recorded, and the name and address of the successor trustee, and the instrument shall be executed and acknowledged by Lender or its successors in interest. The successor trustee, without conveyance of the Mortgaged Property, shall succeed to all the title, power, and duties conferred upon the Trustee in this Deed of Trust and by applicable law. This procedure for substitution of trustee shall govern to the exclusion of all other provisions for substitution. 26 P:\Fonns\Housing Forms\HOME Fonns\Neighborhood Hsg\NHS Deed of Trust Parcell.doc 7.0 NOTICES TO TRUSTOR AND OTHER PARTIES. Any notice under this Deed of Trust shall be in writing and shall be effective when actually delivered or, if mailed, shall be deemed effective three business days after it is deposited in the United States mail first class, registered mail, postage prepaid, directed to the addresses shown near the beginning of this Deed of Trust. Any party may change its address for notices under this Deed of Trust by giving formal written notice to the other parties, specifying that the purpose of this notice is to change the party's address. All copies of notices of foreclosure from the holder of any lien which has priority over this Deed of Trust shall be sent to Lender's address, as shown near the beginning of this Deed of Trust. For Notice purposes, Trustor agrees to keep Lender and Trustee informed at all times of Trustor's current address. Each Trustor requests that copies of any notices of default and sale be directed to Trustor's address shown near the beginning of this Deed of Trust. 8.0 STATEMENT OF OBLIGATION. Lender may collect a fee, in an mount not to exceed the statutory maximum, for furnishing the statement of obligation as provided by Section 2943 of the Civil Code of California. 9.0 [RESERVED] 10.0 ASSIGNMENT OF CONTRACTS. In addition to any other grant, transfer or assignment effectuated hereby, without in any manner limiting the generality of the grants in the conveyance and grant section hereof, Trustor shall assign to Beneficiary, as security for the indebtedness secured hereby, Trustor 's interest in all agreements, contracts, leases, licenses and permits affecting the Property in any manner whatsoever, such assignments to be made, if so requested by Beneficiary, by instruments in form satisfactory to Beneficiary; but no such assignment shall be construed as a consent by Beneficiary to any agreement, contract license or permit so assigned, or to impose upon Beneficiary any obligations with respect thereto. 11.0 BOOKS AND RECORDS. Trustor shall maintain, or cause to be maintained, proper and accurate books, records and accounts reflecting all items of income and expense in connection with the operation of the Mortgaged Property or in connection with any services, equipment or furnishings provided in connection with the operation of the Mortgaged Property, whether such income or expense be realized by Trustor or by any other person or entity whatsoever excepting persons unrelated to and unaffiliated with Trustor and who leased from Trustor portions of the Mortgaged Property for the purposes of occupying the 27 P:\Fonns\Housing Forms\HOME Fonns\Neighborhood Hsg\NHS Deed of Trust Parcel I.doc dame. Upon the request of Beneficiary, Trustor shall prepare and deliver to Beneficiary such financial statements regarding operation of the Mortgaged Property as Beneficiary may reasonably request. Beneficiary, or its designee, shall have the right from time to time during normal business hours to examine such books, records and accounts and to make copies or extracts therefrom. Trustor shall keep all records and documents for a period of five years after the expiration of the Loan and Regulatory Agreements. 12.0 MISCELLANEOUS PROVISIONS. The following provisions are a part of this Deed of Trust: miscellaneous Environmental Default and Remedies. In the event that any portion of the Mortgaged Property is determined to be "environmentally impaired", or an "affected parcel" as these terms are defined at Code of Civil Procedure Section 725.5(e), then in such event and without limiting or in any way affecting the another rights and remedies of the Trustee and the Beneficiary under this Deed of Trust, the Beneficiary may elect to exercise its rights under Code of Civil Procedure Section 725.5(a) to waive its lien or such portion of the Mortgaged Property and to exercise its rights and remedies to recover the Indebtedness under a judgment as an unsecured creditor of the Trustor and/or to exercise any other remedy authorized by law. The Trustor shall be deemed to have willfully permitted or acquired in a or release or threatened release of a hazardous substance, if such release or threatened release was knowingly or negligently caused or contributed by to by any lessee, occupant, user of the Mortgaged Property which caused or contributed to the release or threatened release of a hazardous substance. All costs and expenses of the Beneficiary, including reasonable attorney's fees, plus interest at a rate per annum of eight percent (8%) until paid, as incurred in connection with an action as may be brought by the Beneficiary as provided in Code of Civil Procedure Section 725.5(b). Amendments. This Deed of Trust, together with any Related Documents, constitutes the entire understanding and agreement of the parties as to the matters set forth in this Deed of Trust. No alteration of or amendment to this Deed of Trust shall be effective unless given in writing and signed by the party or parties sought to be charged or bound by the altercation or amendment. Acceptance by Trustee. Trustee accepts this Trust when this Deed of Trust, duly executed and acknowledged, is made a public record as provided by law. 28 P:\Forms\Housing FOIlTl'>\HOME fonns\Ncighborhood Hsg\NHS Deed of Trust Parcell.doc Applicable Law. This Deed of Trust has been delivered to Lender and accepted by Lender in the State of California. This Deed of Trust shall be governed by and construed in accordance with the laws of the State of California. Caption Headings. Caption headings in this Deed of Trust are for convenience purposes only and are not to be used to interpret or define the provisions of this Deed of Trust. Merger. There shall be no merger of the interest or estate created by this Deed of Trust with any other interest or estate in the Property at any time held by or for the benefit of Lender in any capacity, without the written consent of Lender. Severability. If a court of competent jurisdiction finds any provision of this Deed of Trust to be invalid or unenforceable as to any person or circumstance, such finding shall not render that provision invalid or unenforceable as to any other persons or circumstances. If feasible, any such offending provision shall be deemed to be modified to be within the limits of enforceability or validity; however, if the offending provision cannot be so modified, it shall be stricken and all other provisions of this Deed of Trust in all other respects shall remain valid and enforceable. " Successors and Assigns. Subject to the limitations stated in this Deed of Trust on transfer of Trustor's interest, this Deed of Trust shall be binding upon and inure to the benefit of the parties, their successors and assigns. If ownership of the Property becomes vested in a person other Trustor, Lender, without notice to Trustor, may deal with Trustor's successors with reference to this Deed of Trust and the indebtedness by way of forbearance or extension without releasing Trustor from the obligations of this Deed of Trust or liability under the Indebtedness. Time is of the Essence. Time is of the essence in the performance of this Deed of Trust. Wai vers and Cons en t.s . Lender shall not be deemed to have ~ waived any rights under this Deed of Trust (or under the Related Documents) unless such waiver is in writing and signed by Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right. A waiver by and any party of a provision of this Deed of Trust shall not constitute a waiver of or prejudice the party's right otherwise to demand strict compliance with that provision or any other provision. No 29 P:\Fonns\Housing Forms\HOME Forms\Neighborhood Hsg\NHS Deed of Trust Parccll.doc IIII IIII IIII IIII IIII IIII prior waiver by Lender, nor any course of dealing between Lender and Trustor, shall constitute a waiver of any of Lender 1 s rights or any of Trustor I s obligations as to any future transactions. Whenever consent by Lender is required in this Deed of Trust, the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent instances where such consent is required. Fixture Filing. This Deed of Trust also constitutes a fixture filing as defined in the California Uniform Commercial Code, as amended or recodified from time to time. This Deed of Trust is to be recorded in the real estate records of San Bernardino County, California, and covers goods which are to become fixtures. 30 P:\Forms\Housing Forms\HOME Fonns\Neighborhood Hsg\NHS Deed of Trust Parcell.doc THE TRUSTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS DEED OF TRUST, AND THE TRUSTOR AGREES TO ITS TERMS, AND THE TERMS OF THE PROMISSORY NOTE SECURED BY THIS DEED OF TRUST. TRUSTOR Neighborhood Housing Services Date: nJ)...J 01 , f By: rjkuk.; JIrJ~ Execu ive Direc~i [SIGNATURES MUST BE ACCOMPANIED BY NOTARY JURAT] 31 P:\Fonns\Housing Fonns\HOME Forrns\Neighborhood Hsg\NHS Deed of Trust Parcell.doc STATE OF CALIFORNIA ) COUNTY OF SAN BERNARDINO ) On November 2. 2001 before me, Lisa A. Gomez. Notary Public, personally appeared Dawkins Hodqes , personally known to me tef proved to me on the basis of satisfactory evidence) to be the personfsj whose namefsj iSfafe subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacityttes1, and that by his/her/their signaturefsj on the instrument the personfsj, or the entity upon behalf of which the personfsj acted, executed the instrument. ------------1 USA A. GOMEZ . -." ~ ~ Commission # 11989Z1 z ~ 0 Notary PubITc - Cafifcmla ~ Z san BernardIno COunty ( ! _ _ _ ~:a:m~~O:l~. (Seal) ~: File No.: 6033043 EXHIBIT "A" The ,North 49.6 ,feet of the South 297.60 feet of tile West 18.1~.15 feet of Lot 3, Block 3:3, Ranc.ho San Bernardino, In ttJe City of SAN BE~NARDINO, County of SAN BERNARDINO; State of California; as per map recorded~n Book 7, page(s) 2, of Maps, In the office of the County Recorder of said County. ~ RECORDATION REQUESTED BY: Recorded in Official Records County of San Bernardino, Larry Walker: Recorder REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO Doc No. 20010551917 3:00pm 12/05/01 C~MM~NWEAlrH rIrlE A ~ o~~ WHEN RECORDED MAIL TO: Redevelopment Agency of the City of San Bernardino 201 North "E" Street Third Floor San Bernardino, California 92401-15 Attn: Executive Director 5 NON ST LN SVY CIT-CO TRANS TAX OA A ,)'v: 1":'.J rot CD ~ .-.:;. ~ Space Above This Line is For Recorder's Use Only " ~ C'-.J ~ " l.J" ~ . E 0_ ..:;'1: ~l~ r-- C'-.J c...:J LLJ o ~ DEED OF TRUST, SECURITY AGREEMENT, i,.'l. KSSLGNMENT OF LEASES AND RENTS AND FIXTURE FILING ao ::> " <) ( [};,.! -. 1St': -; :z: <<( G;f) Neighborhood Housing Service ..-. r:~:::) :. THIS DEED OF TRUST, SECURITY AGREEMENT, ASSIGNMENT OF LEASES AND RENTS AND FIXTURE FILING (the "Deed of Trust") is dated October 1, 2001, among Neighborhood Housing Service (the "Trustor"), whose address is 1390 North "D" Street, San Bernardino, California 92405; the Redevelopment Agency of the City of San Bernardino, a body corporate and politic, whose address is 201 North "E" Street, Third Floor, San Bernardino, California 92401-1507 (the "Lender" or the "Beneficiary"); and First American Title Insurance Company (the "Trustee") . 1.0 CONVEYANCE AND GRANT. For valuable consideration, Trustor irrevocably grants, transfers and assigns to Trustee in trust, with power of sale, for the benefit of Lender as Beneficiary, all of Trustor's right, title, and interest in and to that certain real property described (APN 0146-163 -02000, Parcel 2)in Exhibit "A" attached hereto and incorporated herein by this reference (the "Property"), together with all existing or subsequently erected or affixed buildings, improvements and fixtures; all easements, rights of way, and appurtenances and all other rights, royalties, and profits relating to the real property, including and without limitation all minerals, oil, gas, geothermal and similar matters located in San Bernardino County, State of California (the "Mortgaged Property"). SB2001:25550.1 1 Trustor presently assigns to the Lender all of Trustor's right, title and interest in and to all present and future leases of the Mortgaged Property and all Rents from the Mortgaged Property. In addition, Trustor grants Lender a Uniform Commercial Code security interest in the Rents and the Personal Property as set forth herein. 2.0 DEFINITIONS. The following words shall have the following meanings when used in this Deed of Trust. Terms not otherwise defined in this Deed of Trust shall have the meanings attributed to such terms in the Uniform Commercial Code. All references to dollar amounts shall mean amounts in lawful money of the United States of America: Beneficiary. The word "Beneficiary" means the Redevelopment Agency of the City of San Bernardino, a body corporate and politic, its successors and assigns. Deed of Trus t. The words "Deed of Trust If mean thi s Deed of Trust and Assignment of Leases and Rents and Fixture Filing among Trustor, Lender, and Trustee, and includes without limitation all assignment and security interest provisions relating to the Personal Property and Rents. Improvements. The word "Improvements" means and includes all existing improvements on the Property and all improvements to be constructed on the Property. Indebtedness. The word "Indebtedness" means all principal and, if applicable, interest payable under the Promissory Note and any amounts expended or advanced by Lender to discharge obligations of Trustor or expenses incurred by Trustee or Lender to enforce obligations of Trustor under the Promissory Note and this Deed of Trust, together with interest on such amounts. This Deed of Trust secures, in addition to the amounts specified in the Promissory Note, any future advances, together with all interest thereon, that may be made by the Lender pursuant to the Loan Agreement and/or the Related Documents so long as Trustor complies with all the terms and conditions of the Promissory Note, Loan Agreement and/or the Related Documents. Lender. The word "Lender" means the Redevelopment Agency of the City of San Bernardino, its successors and assigns. 5B2001 :25550.1 2 Loan Agreement. The words "Loan Agreement" mean that certain 2000 HOME Loan Agreement, dated as of October 1, 2001, by and between the Trustor and the Lender which provides for the loan to the Trustor which is secured by this Deed of Trust. Mortgaged Property. The refer to the Property, Rents, together with: words "Mortgaged Property mean and Improvements, Personal Property and all right, title, and interest (including any claim or demand or demand in law or equity) that Trustor now has or may later acquire in or to such Mortgaged Property; all easements, rights, privileges, tenements, hereditaments, and appurtenances belonging or in any way appertaining to the Mortgaged Property; all of the estate, right, title, interest, claim, demand, reversion, or remainder of Trustor in or to the Mortgaged Property, either at law or in equity, in possession or expectancy, now or later acquired; all exterior landscaping on the Mortgaged Property; all development rights or credits and air rights; all water and water rights (whether or not appurtenant to the Mortgaged Property) and shares of stock pertaining to such water or water rights, ownership of which affects the Mortgaged Property; all minerals, oil, gas, and other hydrocarbon substances and rights thereto in, on, under, or upon the Mortgaged Property and all royalties and profits from any such rights or shares of stock; all right, title, and interest of Trustor in and to any streets, ways, alleys, strips, or gores of land adjoining the Property or any part of it that Trustor now owns or at any time later acquires and all adjacent lands within enclosures or occupied by buildings partly situated on the Mortgaged Property; all intangible Mortgage Property and rights the Mortgaged Property or its operation connection with it, including, without permits, licenses, plans, specifications, contracts, subcontracts, bids, deposits services, installations, refunds due Trustor, trademarks, and service marks; relating to or used in limitation, construction for utility trade names, all of the right, title, and interest of Trustor in and to the land lying in the bed of any street, road, highway, or avenue in front of or adjoining the Property; SB2001 :25550.1 3 SB2001 :25550.1 any and all awards previously made or later to be made by any governmental authority to the present and all subsequent owners of the Mortgaged Property that may be made with respect to the Mortgaged Property as a result of the exercise of the right of eminent domain, the alteration of the grade of any street, or any other injury to or decrease of value of the Mortgaged Property, which award or awards are assigned to the Lender, and which the Lender, at its option, is authorized, directed, and empowered to collect and receive the proceeds of any such award or awards from the authorities making them and to give proper receipts and acquittances for them, and to apply them as provided in this Deed of Trust; all leases of the Mortgaged Property or any part of it now or later entered into and all right, title, and interest of the Trustor under such leases, including cash or securities deposited by the tenants to secure performance of their obligations under such leases (whether such cash or securities are to be held until the expiration of the terms of such leases or applied to one or more of the installments of rent coming due immediately before the expiration of such terms), all rights to al insurance proceeds and unearned insurance premiums arising from or relating to the Mortgaged Property, all other rights and easements of the Trustor now or later existing pertaining to the use and enjoyment of the Mortgaged Property, and all right, title, and interest of the Trustor in and to all declarations of covenants, conditions, and restrictions as may affect or otherwise relate to the Mortgaged Property; any and all proceeds of any insurance policies covering the Mortgaged Property, whether or not such insurance policies were required by the Lender as a condition of making the loan secured by this Deed of Trust or are required to be maintained by the Trustor as provided below in this Deed of Trust; which proceeds are assigned to the Lender, and which the Lender, at its option, is authorized, directed, and empowered to collect and receive the proceeds of such insurance policies from the insurers issuing the same and to give proper receipts and acquittances for such policies, and to apply the same as provided below; all plans and specifications for the Improvements; all contracts and subcontracts relating to the Improvements; all deposits (including tenants' security deposits; provided, however, that if the Lender acquires possession 4 or control of tenants' security deposits the Lender shall use the tenants' security deposits only for such purposes as governmental requirements permit), funds, accounts, contract rights, instruments, documents, general intangibles, and notes or chattel paper arising from or in connection with the Property or other Mortgaged Property; all permits, licenses, certificates, and other rights and privileges obtained in connection with the Property or other Mortgaged Property; all soils reports, engineering reports, land planning maps, drawings, construction contracts, notes, drafts, documents, engineering and architectural drawings, letters of credit, bonds, surety bonds, any other intangible rights relating to the Property and Improvements, surveys, and other reports, exhibits, or plans used or to be used in connection with the construction, planning, operation, or maintenance of the Property and Improvements and all amendments and modifications; all proceeds arising from or by virtue of the sale, lease, grant of option, or other disposition of all or any part of the Property, Personal Property, or other Mortgaged Property (consent to same is not granted or implied); and all proceeds (including premium refunds) payable or to be payable under each insurance policy relating to the Property, the Personal Property, or other Mortgaged Property; all tax refunds, bills, notes, inventories, accounts and charges receivable, credits, claims, securities, and documents of all kinds, and all instruments, contract rights, general intangibles, bonds and deposits, and all proceeds and products of the Trustor in the Mortgaged Property; all accounts, contract rights, chattel paper, documents, instruments, books, records, claims against third parties, money, securities, drafts, notes, proceeds, and other items relating to the Mortgaged Property; all proceeds of any of the foregoing. As used in this Deed of Trust, "Mortgaged Property" is expressly defined as meaning allor, when the context permits or requires, any portion of it and allor, when the context permits or requires, any interest in it. Personal Property. The words "Personal Property" mean all of the right, title and interest of Trustor now or hereafter existing in and to the following now or hereafter located in, upon, within or about, or used in connection with or generated by the construction, use, operation or occupancy of the SB2001:25550.1 5 Property and any business or activity conducted thereon or therein, together with all accessories, additions, accessions, renewals, replacements and substitutions thereto or therefore and the proceeds and products thereof: (a) all materials, supplies, furniture, floor coverings window coverings, furnishings, appliances, office supplies, equipment, construction materials, vehicles, machinery, computer hardware and software, maintenance equipment, window washing equipment, repair equipment and other equipment, tools, telephone and other communications equipment, food service preparation equipment and utensils, chinaware, glassware, silverware and hollowware, food and beverage service equipment, food items and food stuffsi (b) all books, ledgers, records accounting records, files, tax records and returns, policy manuals, papers, correspondence, and electronically recorded datai (c) all "General Intangibles" (as defined in the California Uniform Commercial Code), instruments, money, "Accounts" (as defined in the California Uniform Commercial Code), accounts receivable, notes, certificates of deposit, chattel paper, letters of credit, chooses in action, good will, rights to pay of money, rents, rental fees, equipment fees and other amounts relating to the development or use of the Property or payable by persons who utilize the Property or any of the Improvements or paid by persons in order to obtain the right to use the Property and any of the Improvements, whether or not so usedi trademarks, service marks, trade dress, trade names, licenses, sales contracts, deposits, plans and specifications, drawings, working drawings, studies, maps, surveysi soils, environmental engineering or other reports, architectural and engineering contracts, construction contracts, construction management contracts, surety bonds, feasibility and market studies, management and operating agreements, service agreements and contracts, landscape maintenance agreements, security service and other services agreements and vendors agreementsi (d) all compensation, awards and other payments of relief (and claims therefore) made for a taking by eminent domain, or by any event in lieu thereof (including, without limitation, property and rights and interests in property received in lieu of any such taking), of all or any part of such Personal Property, together with interest thereon, and any and all proceeds (or claims for proceeds) of casualty, liability or other insurance pertaining to such Personal Property, together with interest thereoni (e) any and all claims or demands against any person with respect to damage or diminution in value to such Personal Property or damage or diminution in value to any business or other activity conducted on PropertYi (f) any and all security deposits, deposits of security or advance payments made to others to Trustor with respect to: (i) insurance policies relating to the PropertYi (ii) prepayments and/or periodic deposits or improvements for property taxes or assessments of any kind or SB2001:25550.1 6 nature affecting the Property; (iii) utility services for the Property and/or the Improvements; (iv) maintenance, repair or similar services for the Property or any other services or goods to be used by any business or other activity conducted on the Property; (g) any and all authorizations, consents, licenses, permits and approvals of and from all persons required from time to time in connection with the construction, use, occupancy or operation of the Property, the improvements, or any business or activity conducted thereon or therein or in connection with the operation, occupancy or use thereof; (h) all warranties, guaranties, utility or street improvement bonds, construction completion and payment surety bonds, utility contracts, telephone exchange numbers, yellow page or other directory advertising and the like; (i) all goods, contract rights, and inventory; (j) all leases and use agreements of machinery, equipment and other personal property; (k) all insurance policies covering all or any portion of the Property; (1) all reserves and funds held in escrow by the Lender or other persons for the Lender's benefit under the Loan Agreement and all funds deposited with the Lender pursuant to the Loan Agreement, all accounts into which such funds are deposited and all accounts, contract rights and general intangibles or other rights relating thereto; (m) all names by which the Property is now or hereafter known; (n) all interests in the security deposits of tenants; (0) all management agreements, blueprints, plans, maps, documents, books and records relating to the Property; (p) the proceeds from sale, assignment, conveyance or transfer of all or , any portion of the Property or any interest therein, or from the sale of any goods, inventory or services from upon or within the Property and/or the Improvements; ) (q) all documents of membership in an owner or members association or similar group having responsibility for managing or operating any part of the Property; (r) all other property (other than RFixtures," as defined in the Uniform Commercial Code) of any kind or character as defined in or subject to the provisions of the California Uniform Commercial Code, Secured Transactions, as amended and; (s) all proceeds of the conversions, voluntarily or involuntarily, of any of the foregoing into cash or liquidated claims. Promissory Note. The words "Promissory Note" mean the Promissory Note of even date herewith, in the principal amount of fifty Nine thousand dollars ($59,000) delivered by the Trustor to the Redevelopment Agency of the City of San Bernardino, as Lender, together with all renewals, extensions, modifications, refinancing, and substitutions for the Promissory Note. SB2001:25550.\ 7 Related Documents. The words "Related Documents" mean and include without limitation all promissory notes, credit agreements, loan agreements, guaranties, security agreements, mortgages, deeds of trust, and all other instruments, agreements and documents, by and between the Trustor and the Lender whether now or hereafter existing, evidencing or securing the Indebtedness. Rents. The word "Rents" means all present and future revenues, income, issues, royalties, profits, and benefits derived from the Property. rents, other Trustee. The word "Trustee" means First American Title Insurance Company, and any substitute or successor trustees. Trustor. The word "Trustor" means the Trustor named above and its successors and assigns. 3.0 THIS DEED OF TRUST, INCLUDING THE ASSIGNMENT OF LEASES AND RENTS AND THE SECURITY INTEREST IN THE RENTS AND PERSONAL PROPERTY, IS GIVEN TO SECURE (1) PAYMENT OF THE INDEBTEDNESS AND (2) PERFORMANCE OF ANY AND ALL OBLIGATIONS OF TRUSTOR UNDER THE PROMISSORY NOTE, THE RELATED DOCUMENTS, AND THIS DEED OF TRUST. THE PROMISSORY NOTE AND THIS DEED OF TRUST ARE GIVEN AND ACCEPTED ON THE FOLLOWING TERMS: 3.1 PAYMENT AND PERFORMANCE. Except as otherwise provided in this Deed of Trust, Trustor shall pay to Lender all amounts secured by this Deed of Trust as they become due, and shall strictly and in a timely manner perform all of Trustor's obligations under the Promissory Note, this Deed of Trust, the Loan Agreement and the Related Documents. 3.2 POSSESSION AND MAINTENANCE OF THE PROPERTY. Trustor agrees that Trustor's possession and use of the Property and the Mortgaged Property shall be governed by the following provisions: Possession and Use. Until the occurrence of an Event of Default, Trustor may (a) remain in possession and control of the Mortgaged Property and collect Rents as they become due and (b) use, develop, operate or manage the Property for the purposes authorized in the Loan Agreement. Duty to Maintain and Preserve. Trustor shall: (a) maintain the Property and the Mortgaged Property in good condition and repair; (b) shall construct and improve the Property in accordance with the Loan Agreement; (c) restore and repair the Improvements or any part of the Mortgaged Property that may be SB2001:25550.1 8 damaged or destroyed, including but not limited to construction defects, soil subsidiances and environmental damages whether or not insurance proceeds are available to cover any part of such cost of restoration or repair (regardless of whether the proceeds of insurance may be available to the Trustor under this Deed of Trust); (d) pay when due all claims for labor performed and materials furnished in connection with the Improvements and not permit any mechanics' liens or materials suppliers' liens to arise against the Property; (e) not permit any waste on the Property, or commit, suffer or permit any nuisance to occur on the Property; (f) not abandon the Mortgaged Property; (g) notify the Beneficiary in writing of any condition at or on the Property that may have a material affect on the market value of the Mortgaged Property; and (h) maintain the Property and the Improvements and generally operate it in a manner to realize it maximum rental potential. Hazardous Substances. (a) The terms "hazardous wastes", "hazardous substance", "disposal," "release", and "threatened release", as used in this Deed of Trust, shall have the same meanings as set forth in the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, 42 U.S. C. Section 9601, ~~ seq. ("CERCLA"), the Superfund Amendments and Reauthorization Act of 1986, Pub. L. No. 99-499 ("SARA"), the Hazardous Materials Transportation Act. 49 U.S.C. Section 1801, et seq., the Resource Conservation and Recovery Act, 49 U.S.C. Section 6901, et seq., Chapters 6.5 through 7.7 of Division 20 of the California Health and Safety Code, Section 25100, et seq., or other applicable state or Federal laws, rules, or regulations adopted pursuant to any of the foregoing. (b) [OMITTED - - NO TEXT] (c) Trustor represents and warrants that neither the Trustor nor any tenant of Trustor occupying and improving any portion of the Mortgaged Property or any contractor, agent or other authorized user of any such tenant shall use, generate, manufacture, store, treat, dispose of, or release any hazardous waste or substance on, under, about or from any of the Mortgaged Property, except in compliance with all applicable law relating to the transportation, storage, disposal or lawful use of any hazardous waste or substance. Trustor shall comply and cause each of its tenants and all contractors, agents or other authorized users of the Mortgaged Property to comply with all applicable laws relating to any hazardous wastes or substances, including without limitation, obtaining and filing all applicable notices, licenses, permits and similar authorizations. Trustor shall establish and maintain a SB2001 :25550.1 9 hazardous wastes and substances management and operations policy for the Mortgaged Property in order to assure and monitor continued compliance by the Trustor and each of its tenants and all contractors, agents, or other authorized users of the Property with all laws relating to hazardous wastes or substances. (d) Trustor authorizes Lender and its agents to enter upon the Mortgaged Property upon reasonable notice to make such inspections and tests as Lender may deem appropriate to determine compliance by the Trustor with this paragraph of Section 3.2 if Lender reasonably believes a violation of law has occurred. Any inspections or tests made by Lender shall be at Trustor's expense and for Lender's purposes only and shall not be construed to create any responsibility or liability on the part of Lender to Trustor or to any other person. Trustor hereby agrees to indemnify and hold harmless Lender against any and all claims, losses, liabilities, damages, penalties, and expenses which Lender may directly or indirectly sustain or suffer resulting from breach of this paragraph of Section 3.2. The provisions of this paragraph of Section 3.2 of the Deed of Trust, including the obligation to indemnify the Lender, shall survive the payment of the Indebtedness and the satisfaction and reconveyance of the lien of this Deed of Trust and shall not be affected by Lender's acquisition of any interest in the Property, whether by foreclosure or otherwise. Compliance with Governmental Requirements. Trustor shall promptly comply with all laws, ordinances, and regulations, now or hereafter in effect, of all governmental authorities applicable to the use or occupancy of the Mortgaged Property. Trustor may contest in good faith any such law, ordinance, or regulation and withhold compliance during any proceeding, including appropriate appeals, so long as Trustor has notified Lender in writing prior to doing so and so long as, in Lender's reasonable opinion, Lender's interests in the Mortgaged Property are not jeopardized. Lender may require Trustor to post adequate security or a surety bond, reasonably satisfactory to Lender, to protect Lender's interest. Duty to Protect. Trustor agrees neither to abandon nor leave unattended the Mortgaged Property. Trustor shall do all other acts, in addition to those acts set forth above in this section, which from the character and use of the Mortgaged Property are reasonably necessary to protect and preserve the Mortgaged Property. SB2001 :25550.1 10 3.3 DUE ON SALE. Lender may, at its option, declare immediately due and payable all sums secured by this Deed of Trust upon the sale or transfer, without the Lender's prior written approval, of all or any part of the Mortgaged Property, or any interest in the Mortgaged Property. A" sale or transfer" means the conveyance of the Mortgaged Property or any right, title or interest therein; whether legal or equitable; whether voluntary or involuntary; whether by outright sale, deed, installment sale contract, land contract, contract for deed, leasehold interest with a term greater than one (1) year, lease-option contract, or by sale, assignment or transfer of any beneficial interest in or to any land trust holding title to the Mortgaged Property or by any other method of conveyance of the property interest. This option shall be exercised by the Lender in accordance with the provisions of Section 5.1 hereof; provided however, this option shall not be exercised if such remedy is prohibited by applicable law. 3.4 TAXES AND LIENS. The following provisions relating to the taxes and liens on the Mortgaged Property are part of this Deed of Trust: Payment. Trustor shall pay when due (and in all events prior to delinquency) all taxes, special taxes, assessments, charges (including water and sewer), fines and impositions levied against or on account of the Mortgaged Property, and shall pay when due all claims for work done on or for services rendered or material furnished to the Mortgaged Property. Trustor shall maintain the Mortgaged Property free of all liens having priority over or equal to the interest of Lender under this Deed of Trust, except for the lien of property taxes and assessments not due. Right to Contest. Trustor may withhold payment of any tax, assessment, or claim in connection with a good faith dispute over the obligation to pay, so long as Lender's interest in the Mortgaged Property is not jeopardized. If a lien arises or is filed as a result of nonpayment, Trustor shall within sixty (60) days after the lien arises or, if a lien is filed, within sixty (60) days after Trustor has notices of the filing, secure the discharge of the lien, or if requested by Lender, deposit with Lender cash or a sufficient corporate surety bond or other security satisfactory to Lender in an amount sufficient to discharge the lien plus any costs and attorneys' fees or other charges that could accrue as a result of a foreclosure or sale under the lien; provided, however, that Trustor shall not be required to payor make provisions for the payment of any tax, assessment, lien or charge so long as the Trustor in good faith shall contest the validity or amount thereof and so long as 8B2001:25550.1 11 such delay in payment does not subject the Property to forfeiture or sale. In any contest, Trustor shall defend itself and Lender and shall satisfy any adverse judgment before enforcement against the Property. Trustor shall name Lender as an additional obligee under any surety bond furnished in the contest proceedings. Evidence of Payment. Trustor shall upon demand furnish to Lender satisfactory evidence of payment of the taxes or assessments and shall authorize the appropriate governmental official to deliver to Lender at any time a written statement of the taxes and assessments against the Property. 3.5 CONDEMNATION. The following provisions relating to condemnation proceedings are a part of this Deed of Trust: Proceedings. If any proceeding in condemnation is filed affecting any portion of the Mortgaged Property, Trustor shall promptly notify the Beneficiary in writing, and Trustor shall promptly take such steps as may be necessary to defend the action and obtain the award. Trustor may be the nominal party in such proceeding, but the Beneficiary shall be entitled to participate in the proceeding and to be represented in the proceeding by counsel of its own choice, and Trustor will deliver or cause to be delivered to the Beneficiary such instruments as may be requested by it from time to time to permit such participation. 3.6 CASUALTY INSURANCE. The Trustor shall at all times keep the Mortgaged Property insured for the benefit of the Trustee and the Beneficiary as additional insured as follows: Against damage or loss by fire and such other hazards (including lightning, windstorm, hail, explosion, riot, acts of striking employees, civil commotion, vandalism, malicious mischief, aircraft, vehicle, and smoke) as are covered by the broadest form of extended coverage endorsement available from time to time, including course of construction and builders risk endorsements in an amount not less than the full insurable value of the Mortgaged Property, with a deductible amount not to exceed Ten Thousand Dollars ($10,000); provided however, that prior to the recordation of the "Construction Loan" as this term is defined in the Loan Agreement, such insured amount shall be not less than $1,000,000, and upon the recordation of such Construction Loan the full insurable value shall be not less than the principal amount of such Construction Loan, plus the principal amount of the Indebtedness; SB2001 :25550.1 12 Against damage or loss from (a) sprinkler system leakage and (b) boilers, boiler tanks, heating and air conditioning equipment, pressure vessels, auxiliary piping, and similar apparatus, on such basis and in such amounts as the Beneficiary may requirei Liabili ty Insurance. Trustor shall procure and maintain workers' compensation insurance for employees and comprehensive general liability insurance covering Trustor, Trustee, and the Beneficiary against claims for bodily injury or death or for damage occurring in, on, about, or resulting from the Mortgaged Property, or any street, drive, sidewalk, curb, or passageway adj acent to it, in standard form and wi th such insurance company or companies and in an amount of at least One Million Dollars ($1,000,000) combined single limit, or such greater amount as the buyer may require, which insurance shall include completed operations, product liability, and blanket contractual liability coverage that insures contractual liability under the indemnifications set forth in this Deed of Trust (but such insurance coverage or its amount shall in no way limit such indemnification) . Other Insurance. The Trustor shall procure and maintain such other insurance or such additional amounts of insurance, covering the Trustor or the Mortgaged Property, as (a) may be required by the terms of any construction contract for the improvements or by any governmental authority, or (b) may be reasonably required by the Beneficiary from time to time. For.m of Policies. All insurance required under this paragraph shall be paid for and nonassessable. The policies shall contain such provisions, endorsements, and expiration dates as the Beneficiary from time to time reasonably requests and shall be in such form and amounts, and be issued by such insurance companies admitted as surety companies and doing business in the State of California, as the Beneficiary shall approve in the Beneficiary's sole and absolute discretion. Unless otherwise expressly approved in writing by the Beneficiary, each insurer shall have a Best Rating of not less than "A(vii)", or better. All policies shall (a) contain a waiver of subrogation endorsementi (b) provide that the policy will not lapse or be canceled, amended, or materially altered (including by reduction in the scope or limits of coverage) without at least thirty (30) days prior written notice to the BeneficiarYi (c) with the exception of the comprehensive general liability policy, contain a mortgagee's endorsement (438 BFU Endorsement or equivalent), and name the Beneficiary and trustee as insuredsi and (d) include such deductibles as the Beneficiary may approve. If a policy required under this 8B200 1 :25550.1 13 paragraph contains a co-insurance or overage clause, the policy shall include a stipulated value or agreed amount endorsement acceptable to the Beneficiary. Duplicate Originals or Certificates. Duplicate original policies evidencing the insurance required under this paragraph and any additional insurance that may be purchased on the Mortgaged Property by or on behalf of Trustor shall be deposited with and held by the Beneficiary (a) receipts evidencing payment of all premiums on the policies and (b) duplicate original renewal policies or a binder with evidence satisfactory to the Beneficiary of payment of all premiums at least thirty (30) days before the policy expires. In lieu of the duplicate original policies to be delivered to the Beneficiary under this paragraph, Trustor may also deliver original certificates from the issuing insurance company, evidencing that such policies are in full force and effect and containing information that, in the reasonable judgment of the Beneficiary, is sufficient to allow Lender to ascertain whether such policies comply with the requirements of this Paragraph. No Separate Insurance. The Trustor shall not carry separate or additional insurance concurrent in form or contributing in the event of loss with that required under this paragraph unless endorsed in favor of Trustee and the Beneficiary as required by this paragraph and otherwise approved by the Beneficiary in all respects. Transfer of Title. In the event of foreclosure of this Deed of Trust or other transfer of title or assignment of the Mortgaged Property in extinguishment, in whole or in part, of the Indebtedness, all right, title, and interest of the Trustor in and to all insurance policies required under this paragraph or otherwise then in force with respect to the Mortgaged Property and all proceeds payable under, and unearned premiums on, such policies shall immediately vest in the purchaser or other transferee of the Mortgaged Property. Beneficiary's Right to Obtain. Trustor shall deliver to the Beneficiary original policies or certificates evidencing such insurance at least thirty (30) days before the existing policies expire. If any such policy is not so delivered to the Beneficiary or if any such policy is canceled, whether or not Lender has the policy in its possession, and no reinstatement or replacement policy is received before termination of insurance, the Beneficiary, without notice to or demand on Trustor, may (but is not obligated to) obtain such insurance insuring only the Beneficiary and Trustee with such company as the Beneficiary may deem satisfactory, and pay the premium for such policies, and the amount of any premium so paid shall be SB2001 :25550.1 14 charged to and promptly paid by Trustor or, at the Beneficiary's option, may be added to the Indebtedness. The Beneficiary acknowledges that, if the Beneficiary obtains insurance, it is for the sole benefit of the Beneficiary and Trustee, and Trustor shall not rely on any insurance obtained by the Beneficiary to protect Trustor in any way. Duty to Restore After Casualty. If any act or occurrence of any kind or nature (including any casualty for which insurance was not obtained or obtainable) results in damage to or loss or destruction of the Mortgaged Property, Trustor shall immediately give notice of such loss or damage to the Beneficiary and, if the Beneficiary so instructs, shall promptly, at the Trustor's sole cost and expense, regardless of whether any insurance proceeds will be sufficient for the purpose, commence and continue diligently to completion to restore, repair, replace, and rebuild the Mortgaged Property as nearly as possible to its value, condition, and character immediately before the damage, loss, or destruction. 3.7 ASSIGNMENT TO THE BENEFICIARY. The proceeds of any award or claim for damages, direct or consequential, in connection with any condemnation or other taking of or damage or injury to the Mortgaged Property, or any part of it, or for conveyance in lieu of condemnation, are assigned to and shall be paid to the Beneficiary, regardless of whether the Beneficiary's security is impaired. All causes of action, whether accrued before or after the date of this Deed of Trust, of all types for damages or injury to the Mortgaged Property or any part of it, or in connection with any transaction financed by funds lent to the Trustor by the Beneficiary and secured by this Deed of Trust, or in connection with or affecting the Mortgaged Property or any part of it, including, without limitation, causes of action arising in tort or contract or in equity, are assigned to the Beneficiary as additional security, and the proceeds shall be paid to the Beneficiary. The Beneficiary, at its option, may appear in and prosecute in its own name any action or proceeding to enforce any such cause of action and may make compromise or settlement of such action. The Trustor shall notify the Beneficiary in writing immediately on obtaining knowledge of any casualty damage to the Mortgaged Property or damage in any other manner in excess of Ten Thousand Dollars ($10,000) or knowledge of the institution of any proceeding relating to the condemnation or other taking of or damage or injury to all or any portion of the Mortgaged Property. The Beneficiary in its sole and absolute discretion, may participate in any such proceedings and may join borrower in adjusting any loss covered by insurance. Trustor covenants and agrees with the Beneficiary, at Beneficiary's request, to make, execute, and deliver, at Trustor's expense, any and all 8B2001:25550.1 15 assignments and other instruments sufficient for the purpose of assigning the aforesaid award or awards, causes of action, or claims of damages or proceeds to the Beneficiary free, clear, and discharged of any and all encumbrances of any kind or nature. Compensation and Insurance Payments. All compensation, awards, proceeds, damages, claims, insurance recoveries, rights of action, and payments that Trustor may receive or to which the Beneficiary may become entitled with respect to the Mortgaged Property if any damage or injury occurs to the Mortgaged Property, other than by the Beneficiary condemnation or partial taking of the Mortgaged Property, shall be paid over to the Beneficiary and shall be applied first toward reimbursement of all costs and expenses of the Beneficiary in connection with their recovery and disbursement, and shall then be applied as follows: The Beneficiary shall consent to the application of such payments to the restoration of the Mortgaged Property so damages only the Beneficiary has met all the following conditions (a breach of one of which shall constitute a default under this Deed of Trust, the Promissory Note, and any Related Document): (a) Trustor is not in default under any of the terms, covenants, and conditions of the Related Documents; (b) all then-existing leases affected in any way by such damage will continue in full force and effect; (c) the Beneficiary is satisfied that the insurance or award proceeds, plus any sums added by Trustor, shall be sufficient to fully restore and rebuild the Mortgaged Property under then current governmental requirements; (d) within sixty (60) days after the damage tot he Mortgaged Property, Trustor presents to the Beneficiary a restoration plan satisfactory to the Beneficiary and each local agency with jurisdiction, which includes cost estimates and schedules; (e) construction and completion of restoration and rebuilding of the Mortgaged Property shall be completed in accordance with plans and specifications and drawings submitted to the Beneficiary within thirty (30) days after receipt by the Beneficiary of the restoration plan and thereafter approved the Beneficiary; which plans, specifications, and drawings shall not be substantially modified, changed, or revised without the Beneficiary's prior written consent; (f) within ninety (90) days after such damage, Trustor and a licensed contractor satisfactory to the Beneficiary enter into a fixed price or guaranteed maximum price contract satisfactory to the Beneficiary, providing for complete restoration in accordance with such restoration plan for an amount not to exceed the amount of funds held or to be SB2001 :25550.1 16 held by the Beneficiary; (g) all restoration of the Improvements so damaged or destroyed shall be made with reasonable promptness and shall be of a value at least equal to the value of the Improvements so damages or destroyed before such damage or destruction; (h) the Beneficiary reasonably determines that there is an identified source (whether from income from the Mortgaged Property or another source) sufficient to pay all debt service and operating expenses of the Mortgaged Property during its restoration as required above; and (i) any and all funds that are made available for restoration and rebuilding under this subparagraph shall be disbursed at the sole election of the Beneficiary through the Trustee, or a title insurance or trust company satisfactory to the Beneficiary, in accordance with standard construction lending practices and mechanics' lien waivers and title insurance date-downs, and the provision of payment and performance bonds by the Trustor, or in any other manner approved by the Beneficiary in the Beneficiary's sole and absolute discretion; or If fewer than all conditions (a) through (i) in the preceding subparagraph are satisfied, then such payments shall be applied in the sole and absolute discretion of the Beneficiary: to the payment of the Indebtedness secured by this Deed of Trust; or to the reimbursement of Trustor's expenses incurred in the rebuilding and restoration of the Mortgaged Property. If the Beneficiary elects to make any funds available to restore the Mortgaged Property, then all of the conditions (a) through (i) in the preceding subparagraph shall apply, except for such conditions that the Beneficiary in its sole and absolute discretion, may waive. Material Loss Not Covered. If any material part of the Mortgaged Property is damaged or destroyed and the loss, is not adequately covered by insurance proceeds collected or in the process of collection, the Trustor shall deposit with the Beneficiary, within thirty (30) days after the Beneficiary's request, the amount of the loss not so covered. Total Condemnation Payment. All compensation, awards, proceeds, damages, claims, rights of action, and payments that Borrower may receive or to which the Trustor may become entitled with respect to the Mortgaged Property in the event of a total condemnation or other total taking of the Mortgaged Property by a public agency shall be paid over to the Beneficiary and shall be applied first to the reimbursement of all Beneficiary's costs and expenses in connection with their recovery, and shall then be applied to the payment of the SB2001:25550.1 17 Indebtedness. satisfaction of as its interest Any surplus remaining the Indebtedness shall be may then appear. after payment and paid to the Trustor Partial CondellUlation Payments. All compensation, awards, proceeds, damages, claims, insurance recoveries, rights of action, and payments ("funds") that the Trustor may receive or to which the Trustor may become entitled with respect to the Mortgaged Property in the event of a partial condemnation or other partial taking of the Mortgaged Property by a public agency, unless the Trustee and Beneficiary otherwise agree in writing, shall be divided into two portions, one equal to the principal balance of the Promissory Note at the time of receipt of such funds and the other equal to the amount by which such funds exceed the principal balance of the Promissory Note at the time of receipt of such funds. The first such portion shall be applied to the sums secured by this Deed of Trust, whether or not then due, including but not limited to principal, accrued interest, and advances with the balance of the funds paid to the Trustor. No Cure of Waiver of Default. Any application of such amounts or any portion of it to any Indebtedness secured by this Deed of Trust shall not be construed to cure or waive any default or notice of default under this Deed of Trust or invalidate any act done under any such default or notice. 3.8 EXPENDITURES BY LENDER. If Trustor fails to comply with any provision of this Deed of Trust, or if any action or proceeding is commenced against the Mortgaged Property that would materially affect Lender's interests in the Property, Lender on Trustor's behalf may, but shall not be required to, take any action that Lender reasonably deems appropriate. Any amount that Lender expends in do doing will bear interest at the rate charged under the Promissory Note from the date incurred or paid by Lender to the date of repayment by Trustor. All such expenses, at Lender's option, will (a) be payable on demand, (b) be added to the balance of the Promissory Note and be apportioned among and be payable with any installment payments to become due during the remaining term of the Promissory Note, or (c) be treated as a balloon payment which will be due and payable at the Promissory Note's maturity. This Deed of Trust also will secure payment of these amounts. The rights provided for in this paragraph shall be in addition to any other rights or any remedies to which Lender may be entitled on account of the default. Any such action by Lender shall not be construed as curing the default so as to bar Lender from any remedy that it otherwise would have had. SB2001:25550.\ 18 3.9 WARRANTY. Trustor warrants that the Mortgaged Property Trustor's use of the Mortgaged Property complies with existing applicable laws, ordinances, and regulations governmental authorities. and all of 3.10 IMPOSITION OF TAXES, FEES AND CHARGES BY GOVERNMENTAL AUTHORITIES. The following provisions relating to governmental taxes, fees and charges are a part of this Deed of Trust: Current Taxes, Fees and Charges. Upon request by Lender, Trustor shall execute such documents in addition to this Deed of Trust and take whatever other action is requested by Lender to perfect and continue Lender's lien and security interest on the Property. Trustor shall reimburse Lender for all taxes, as described below, together with all expenses incurred in recording, perfecting or continuing this Deed of Trust, including without limitation all taxes, fees, documentary stamps, and other charges for recording or registering this Deed of Trust. Taxes. The following shall constitute taxes to which this section applies: (a) a specific tax upon this type of Deed of Trust or upon all or any part of the Indebtedness secured by this Deed of Trusti (b) a specific tax on Trustor which Trustor is authorized or required to deduct from payments on the Indebtedness secured by this type of Deed of Trusti (c) a tax on this type of Deed of Trust chargeable against the Lender or the holder of the Promissory Notei and (d) a specific tax on all or any portion of the Indebtedness or on payments of principal and interest made by Trustor. Subsequent Taxes. If any tax to which this section applies is enacted subsequent to the date of this Deed of Trust, this event shall have the same effect as an Event of Default (as defined below), and Lender may exercise any or all of its available remedies for an Event of Default as provided below unless Trustor either (a) pays the tax before it becomes delinquent, or (b) contests the tax as provided above in the Taxes and Liens section and deposits with Lender cash or a sufficient corporate surety bond or other security satisfactory to Lender. 3.11 SECURITY AGREEMENT; FINANCING STATEMENTS. The provisions relating to this Deed of Trust as agreement are a part of this Deed of Trust: following a security SB2001:25550.1 19 Security Agreement. This instrument shall constitute a security agreement to the extent of any of the Mortgaged Property constitutes fixtures or other personal property, and Lender shall have all of the rights of a secured party under the Uniform Commercial Code as amended from time to time. Security Interest. Upon request by Lender, Trustor shall execute financing statements and take whatever other action is requested by Lender to perfect and continue Lender's security interest in the Rents and Personal Property in a manner and at a place reasonably convenient to Trustor and Lender and make it available to Lender within ten (10) days after receipt of written demand from Lender. Addresses. The mailing addresses of Trustor (debtor) and Lender (secured party), from which information concerning the security interest granted by this Deed of Trust may be obtained (each as required by the Uniform Commercial Code), are as stated on the first page of this Deed of Trust. 3.12 FURTHER ASSURANCES; ATTORNEY-IN-FACT. The following provisions relating to further assurances and attorney-in-fact are a part of this Deed of Trust: Further Assurances. At any time, and from time to time, upon request of Lender, Trustor will make, execute and deliver, or will cause to be made, executed or delivered, to Lender or to Lender's designee, and when requested by Lender, cause to be filed, recorded, refiled, or rerecorded, as the case may be, at such times and in such offices and places as Lender may deem appropriate, any and all such mortgages, deeds of trust, security deeds, security agreements, financing statements, continuation statements, instruments of further assurance, certificates, and other documents as may, in the sole opinion of Lender, be necessary or desirable in order to effectuate, complete, perfect, continue, or preserve (a) the obligations of Trustor under the Promissory Note, this Deed of Trust, and the Related Documents, and (b) the liens and security interests created by this Deed of Trust as second priority liens on the Mortgaged Property, whether now owned or hereafter acquired by Trustor. Unless prohibited by law or agreed to the contrary by Lender in writing. Trustor shall reimburse Lender for all costs and expenses incurred in connection with the matters referred to in this paragraph. Attorney-In-Fact. If Trustor fails to do any of the things referred to in the preceding paragraph, Lender may do so for and in the name of Trustor and at Trustor's expense. For such purposes, Trustor hereby irrevocably appoints Lender as SB2001:25550.1 20 Trustor's attorney-in-fact for the purpose of making, executing, delivering, filing, recording, and doing all other things as may be necessary or desirable, in Lender's sole opinion, to accomplish the matters referred to in the preceding paragraph. 4.0 FULL PERFORMANCE AND RECONVEYANCE. If Trustor pays all the Indebtedness, including without limitation, all future advances, when due, and otherwise performs all the obligations imposed upon Trustor under the Loan Agreement, the Promissory Note and this Deed of Trust, Lender shall execute and deliver to Trustee a request for full reconveyance and shall execute and deliver to Trustor suitable statements of termination of any financing statement on file evidencing Lender's security interest in the Rents and Personal Property. Lender may charge Trustor a reasonable reconveyance fee at the time of reconveyance. 5.0 DEFAULT. Each of the following, at the option of Lender, shall constitute an event of default ("Event of Default") under this Deed of Trust: Default on Indebtedness. Failure of Trustor to make any payment when due under the Promissory Note if not cured within thirty (30) days after written notice from the Lender. Default on Other Payments. Failure of Trustor within the time required by this Deed of Trust to make any payment for taxes or insurance, or any other payment necessary to prevent filing of or to effect discharge of any lien. Compliance Default. Failure of Trustor to comply with any other term, obligation, covenant or condition contained in this Deed of Trust, the Promissory Note, the Loan Agreement, the Related Documents, including without limitation the OPA, after notice and any applicable cure period has expired. Breaches. Any warranty, representation or statement made or furnished to Lender by or on behalf of Trustor under this Deed of Trust, the Promissory Note, the Loan Agreement, or any of the Related Documents is, or at the time made or furnished was, false in any material respect. Insol vency. The insolvency of Trustor, appointment of a receiver for any part of Trustor's property, any assignment for the benefit of creditors, the commencement of any proceeding under any bankruptcy or insolvency laws by or against Trustor, which is not discharged or dismissed within ninety (90) days, or the dissolution or termination of Trustor's existence as a going business (if Trustor is a business) . SB200\:25550.\ 21 Foreclosure, etc. Commencement of foreclosure, whether by judicial proceeding, self-help, repossession or any other method, by any creditor of Trustor against any of the Mortgaged Property. However, this subsection shall not apply in the event of a good faith dispute by Trustor as to the validity or reasonableness of the claim which is the basis of the foreclosure, provided that Trustor gives Lender written notice of such claim and furnishes reserves or a surety bond for the claim satisfactory to Lender. 5.1 RIGHTS AND REMEDIES ON DEFAULT. Upon the occurrence of any Event of Default and at any time thereafter, Trustee or Lender, at its option, may exercise anyone or more the following rights and remedies, in addition to any other rights or remedies provided by law: Foreclosure by Sale. Upon an Event of Default under this Deed of Trust, Beneficiary may declare the entire Indebtedness secured by this Deed of Trust immediately due and payable by delivery to Trustee of written declaration of default and demand for sale and of written notice of default and of election to cause the Mortgaged Property to be sold, which notice Trustee shall cause to be filed for record. Beneficiary also shall deposit with Trustee this Deed of Trust, the Promissory Note, other documents requested by Trustee, and all documents evidencing expenditures secured hereby. After the lapse of such time may then be required by law following the recordation of the notice of default, and notice of sale having been given as then required by law, Trustee, without demand on Trustor, shall sell the Mortgaged Property at the time and place fixed by it in the notice of sale, either as a whole or in separate parcels, and in such order as it may determine, at public auction to the highest bidder for cash in lawful money of the United States, payable at time of sale. Trustee may postpone sale of all or any portion of the Mortgaged Property by public announcement at such time and place of sale, and from time to time thereafter may postpone such sale by public announcement at the time filed by the preceding postponement in accordance with applicable law. Trustee shall deliver to such purchaser its deed conveying the Mortgaged Property so sold, but without any covenant or warranty, express or implied. The recitals in such deed of any matters or facts shall be conclusive proof of the truthfulness thereof. Any person, including Trustor, Trustee or Beneficiary may purchase at such sale. After deducting all costs, fees and expenses of Trustee and of this Trust, including cost of evidence of title in connection with sale, Trustee shall apply the proceeds of sale to payment of: all sums expended under the terms hereof, not then repaid, with accrued interest at the amount allowed by law SB2001 :25550.1 22 in effect at the date hereof i all herebYi and the remainder, if any, legally entitled thereto. other sums then secured to the person or persons Judicial Foreclosure. With respect to all or any part of the Mortgaged Property, Lender shall have the right in lieu of foreclosure by power of sale to foreclose by judicial foreclosure in accordance with and to the full extent provided by California law. It is understood and agreed by the parties hereto that no action taken by the Lender shall result in the imposition of personal liability on any of the members, partners, directors, shareholders and officers, as applicable, of Trustor or on Trustor itself or its constituent members. UCC Remedies. With respect to all or any part of the Mortgaged Property, Lender shall have the rights and remedies of a secured party under the Uniform Commercial Code, including without limitation the right to recover any deficiency in the manner and to the full extent provided by California law. Collect Rents. Lender shall have the right, without notice to Trustor, to take possession of and manage the Mortgaged Property and collect the Rents, including amounts past due and unpaid, and apply the net proceeds, over and above Lender's costs, against the Indebtedness. In furtherance of this right, Lender may require any tenant or other user of the Mortgaged Property to make payments of rent or use fees directly to Lender. If the Rents are collected by Lender, then Trustor irrevocably designates Lender as Trustor's attorney-in-fact to endorse instruments received in payment thereof in the name of Trustor and to negotiate the same and collect the proceeds. Payments by tenants or other users to Lender in response to Lender's demand shall satisfy the obligations for which the payments are made, whether or not any property grounds for the demand existed. Lender may exercise its rights under this subparagraph either in person, by agent, or through a receiver. Appoint Receiver. Lender shall have the right to have a receiver appointed to take possession of all or any part of the Mortgaged Property, with the power to protect and preserve the Mortgaged Property, to operate the Property preceding foreclosure or sale, and to collect the Rents from the Mortgaged Property and apply the proceeds, over and above the cost of the receivership against the Indebtedness. The receiver may serve without bond if permitted by law. Lender's right to the appointment of a receiver shall exist whether or not the apparent value of the Mortgaged Property exceeds the indebtedness by a substantial amount. Employment by Lender shall not disqualify a person from serving as a receiver. SB200!:25550.! 23 Tenancy at Sufferance. If Trustor remains in possession of the Mortgaged Property after the Property is sold as provided above or Lender otherwise becomes entitled to possession of the Property upon default of Trustor, Trustor shall become a tenant at sufferance of Lender or the purchaser of the Mortgaged Property and shall, at Lender's option, either (a) pay a reasonable rental for the use of the Property, or (b) vacate the Mortgaged Property immediately upon the demand of Lender. Other Remedies. Trustee or right or remedy provided in Promissory Note or by law. Lender shall have any other this Deed of Trust or the Notice of Sale. Lender shall give Trustor reasonable notice of the time and place of any public sale of the Personal Property or of the time after which any private sale or other intended disposition of the Personal Property is to be made. Reasonable notice shall mean notice given at least thirty (30) days before the time of the sale or disposition. Any sale of Personal Property may be made in conjunction with any sale of the Mortgaged Property. Sale of the Mortgaged Property. To the extent permitted by applicable law, Trustor hereby waives any and all rights to have the Mortgaged Property marshaled. In exercising its rights and remedies, the Trustee or Lender shall be free to sell all or any part of the Property together or separately, in one sale or by separate sales. Lender shall be entitled to bid at any public sale on all or any portion of the Mortgaged Property. Waiver; Election of Remedies. A waiver by any party of a breach of a provision of this Deed of Trust shall not constitute a waiver of or prejudice the party's rights otherwise to demand strict compliance with that provision or any other provision. Election by Lender to pursue any remedy provided in this Deed of Trust, the Promissory Note, in any Related Document, or provided by law shall not exclude pursuit of any other remedy, and an election to make expenditures or to take action to perform an obligation of Trustor under this Deed of Trust after failure of Trustor to perform shall not affect Lender's right to declare a default and to exercise any of its remedies. Attorneys' Fees; Expenses. If Lender institutes any suit or action to enforce any of the terms of this Deed of Trust, Lender shall be entitled to recover such sum as the court may adjudge reasonable as attorneys' fees at trial and on any appeal. Whether or not any court action is involved, all reasonable expenses incurred by Lender which in Lender's opinion are necessary at any time for the protection of its 8B2001:25550.1 24 interest or the enforcement of its rights shall become a part of the Indebtedness payable on demand and shall bear interest at the Promissory Note rate from the date of expenditure until repaid. Expenses covered by this paragraph include, without limitation, however subject to any limits under applicable law, Lender's attorneys' fees whether or not there is a lawsuit, including attorneys' fees for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), appeals and any anticipated post-judgment collection services, the cost of searching records, obtaining title reports (including foreclosure reports), surveyors' reports, appraisal fees, title insurance, and fees for the Trustee, to the extent permitted by applicable law. For the purposes hereof, the words "Lender's attorneys' fees" include the salaries, benefits and expenses of attorneys employed in the office of the City Attorney computed on an hourly basis for any such legal services provided in connection with the enforcement of the rights of the Lender hereunder. Trustor also will pay any court costs, in addition to all other sums provided by law. Rights of Trustee. Trustee shall have all of the rights and duties of Lender as set forth in this section. 6.0 POWERS AND OBLIGATIONS OF TRUSTEE. The following provisions relating to the powers and obligations of Trustee are part of this Deed of Trust: Powers of Trustee. In addition to all powers of Trustee arising as a matter of law, Trustee shall have the power to take the following actions with respect to the Property upon the written request of Lender and Trustor: (a) join in preparing and filing a map or plat of the Mortgaged Property, including the dedication of streets or other rights to the public; and (b) join in granting any easement or creating any restriction on the Mortgaged Property. Obligations to Notify. Trustee shall not be obligated to notify any other party of a pending sale under any other trust deed or lien, or of any action or proceeding in which Trustor, Lender, or Trustee shall be a party, unless the action or proceeding is brought by Trustee. Trustee. Trustee shall meet all qualifications required for Trustee under applicable law. In addition to the rights and remedies set forth above, with respect to all or any part of the Mortgaged Property, the Trustee shall have the right to foreclose by notice and sale, and Lender shall have the right to foreclose by judicial foreclosure, in either case in accordance with and to the full extent provided by applicable law. SB200 I :25550.1 25 Successor Trustee. Lender, at Lender's option, may from time to time appoint a successor Trustee to any Trustee appointed hereunder by an instrument executed and acknowledged by Lender and recorded in the office of the recorder of San Bernardino County, California. The instrument shall contain, in addition to all other matters required by state law, the names of the original Lender, Trustee, and Trustor the book and page where this Deed of Trust is recorded, and the name and address of the successor trustee, and the instrument shall be executed and acknowledged by Lender or its successors in interest. The successor trustee, without conveyance of the Mortgaged Property, shall succeed to all the title, power, and duties conferred upon the Trustee in this Deed of Trust and by applicable law. This procedure for substitution of trustee shall govern to the exclusion of all other provisions for substitution. 7.0 NOTICES TO TRUSTOR AND OTHER PARTIES. Any notice under this Deed of Trust shall be in writing and shall be effective when actually delivered or, if mailed, shall be deemed effective three business days after it is deposited in the United States mail first class, registered mail, postage prepaid, directed to the addresses shown near the beginning of this Deed of Trust. Any party may change its address for notices under this Deed of Trust by giving formal written notice to the other parties, specifying that the purpose of this notice is to change the party's address. All copies of notices of foreclosure from the holder of any lien which has priority over this Deed of Trust shall be sent to Lender's address, as shown near the beginning of this Deed of Trust. For Notice purposes, Trustor agrees to keep Lender and Trustee informed at all times of Trustor's current address. Each Trustor requests that copies of any notices of default and sale be directed to Trustor's address shown near the beginning of this Deed of Trust. 8.0 STATEMENT OF OBLIGATION. Lender may collect a fee, in an mount not to exceed the statutory maximum, for furnishing the statement of obligation as provided by Section 2943 of the Civil Code of California. 9.0 [RESERVED] 10.0 ASSIGNMENT OF CONTRACTS. In addition to any other grant, transfer or assignment effectuated hereby, without in any manner limiting the generality of the grants in the conveyance and grant section hereof, Trustor shall assign to Beneficiary, as security for the indebtedness secured hereby, Trustor's interest in all agreements, contracts, leases, licenses and permits affecting the Property in any manner whatsoever, such SB2001 :25550.1 26 assignments to be made, if so requested by Beneficiary, by instruments in form satisfactory to Beneficiary; but no such assignment shall be construed as a consent by Beneficiary to any agreement, contract license or permit so assigned, or to impose upon Beneficiary any obligations with respect thereto. 11.0 BOOKS AND RECORDS. Trustor shall maintain, or cause to be maintained, proper and accurate books, records and accounts reflecting all items of income and expense in connection with the operation of the Mortgaged Property or in connection with any services, equipment or furnishings provided in connection with the operation of the Mortgaged Property, whether such income or expense be realized by Trustor or by any other person or entity whatsoever excepting persons unrelated to and unaffiliated with Trustor and who leased from Trustor portions of the Mortgaged Property for the purposes of occupying the dame. Upon the request of Beneficiary, Trustor shall prepare and deliver to Beneficiary such financial statements regarding operation of the Mortgaged Property as Beneficiary may reasonably request. Beneficiary, or its designee, shall have the right from time to time during normal business hours to examine such books, records and accounts and to make copies or extracts therefrom. Trustor shall keep all records and documents for a period of five years after the expiration of the Loan and Regulatory Agreements. 12.0 MISCELLANEOUS PROVISIONS. The following provisions are a part of this Deed of Trust: miscellaneous Environmental Default and Remedies. In the event that any portion of the Mortgaged Property is determined to be "environmentally impaired", or an "affected parcel" as these terms are defined at Code of Civil Procedure Section 725.5(e), then in such event and without limiting or in any way affecting the another rights and remedies of the Trustee and the Beneficiary under this Deed of Trust, the Beneficiary may elect to exercise its rights under Code of Civil Procedure Section 725.5(a) to waive its lien or such portion of the Mortgaged Property and to exercise its rights and remedies to recover the Indebtedness under a judgment as an unsecured creditor of the Trustor and/or to exercise any other remedy authorized by law. The Trustor shall be deemed to have willfully permitted or acquired in a or release or threatened release of a hazardous substance, if such release or threatened release was knowingly or negligently caused or contributed by to by any lessee, occupant, user of the Mortgaged Property which caused or contributed to the release or threatened release of a hazardous substance. All costs and expenses of the Beneficiary, including reasonable attorney's fees, plus interest at a rate per annum of eight percent (8%) until paid, as incurred in SB200l:25550.1 27 connection with an action as may be brought by the Beneficiary as provided in Code of Civil Procedure Section 725.5(b). Amendments. This Deed of Trust, together with any Related Documents, constitutes the entire understanding and agreement of the parties as to the matters set forth in this Deed of Trust. No alteration of or amendment to this Deed of Trust shall be effective unless given in writing and signed by the party or parties sought to be charged or bound by the altercation or amendment. Acceptance by Trustee. Trustee accepts this Trust when this Deed of Trust, duly executed and acknowledged, is made a public record as provided by law. Applicable Law. This Deed of Trust has been delivered to Lender and accepted by Lender in the State of California. This Deed of Trust shall be governed by and construed in accordance with the laws of the State of California. Caption Headings. Caption headings in this Deed of Trust are for convenience purposes only and are not to be used to interpret or define the provisions of this Deed of Trust. Merger. There shall be no merger of the interest or estate created by this Deed of Trust with any other interest or estate in the Property at any time held by or for the benefit of Lender in any capacity, without the written consent of Lender. Severability. If a court of competent jurisdiction finds any provision of this Deed of Trust to be invalid or unenforceable as to any person or circumstance, such finding shall not render that provision invalid or unenforceable as to any other persons or circumstances. If feasible, any such offending provision shall be deemed to be modified to be within the limits of enforceability or validity; however, if the offending provision cannot be so modified, it shall be stricken and all other provisions of this Deed of Trust in all other respects shall remain valid and enforceable. Successors and Assigns. Subject to the limitations stated in this Deed of Trust on transfer of Trustor's interest, this Deed of Trust shall be binding upon and inure to the benefit of the parties, their successors and assigns. If ownership of the Property becomes vested in a person other Trustor, Lender, without notice to Trustor, may deal with Trustor's successors with reference to this Deed of Trust and the indebtedness by way of forbearance or extension without releasing Trustor from 8B2001:25550.1 28 IIII IIII IIII IIII IIII IIII IIII IIII IIII IIII the obligations of this Deed of Trust or liability under the Indebtedness. Time is of the Essence. Time is of the essence in the performance of this Deed of Trust. Waivers and Consents. Lender shall not be deemed to have waived any rights under this Deed of Trust (or under the Related Documents) unless such waiver is in writing and signed by Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right. A waiver by and any party of a provision of this Deed of Trust shall not constitute a waiver of or prejudice the party's right otherwise to demand strict compliance with that provision or any other provision. No prior waiver by Lender, nor any course of dealing between Lender and Trustor, shall constitute a waiver of any of Lender I s rights or any of Trustor's obligations as to any future transactions. Whenever consent by Lender is required in this Deed of Trust, the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent instances where such consent is required. Fixture Filing. This Deed of Trust also constitutes a fixture filing as defined in the California Uniform Commercial Code, as amended or recodified from time to time. This Deed of Trust is to be recorded in the real estate records of San Bernardino County, California, and covers goods which are to become fixtures. 8B200 I :25550.1 29 THE TRUSTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS DEED OF TRUST, AND THE TRUSTOR AGREES TO ITS TERMS, AND THE TERMS OF THE PROMISSORY NOTE SECURED BY THIS DEED OF TRUST. TRUSTOR Neighborhood Housing Services ,j) ) ~I D I By: ~~ ikJ,--- E ecutive Dir~tor Date: [SIGNATURES MUST BE ACCOMPANIED BY NOTARY JURAT] SB200 I :25550.1 30 STATE OF CALIFORNIA ) COUNTY OF SAN BERNARDINO ) On November 2. 2001 before me, Lisa A. Gomez. Notary Public, personally appeared Dawkins Hodqes , personally known to me fet: proved to me on the bosis of s3tisbctory evidence) to be the personW whose nameW iSfafe subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity{ies1, and that by his/her/their signatureW on the instrument the personW, or the entity upon behalf of which the personW acted, executed the instrument. WITNESS my hatlnd ..7 offi~ial seal. , " /j ,i Signature J - - - - - -~;G;Mi --= F @ Commission * 1198971", ~, Notary Pubnc - CanfanJa f J San BeTatfino Countv ( _ _ _ ~~~~1~~ . --......_-- (Seal) I '.-. File No.: 6019099 EXHIBIT "A" Lot 3 of Tract No. 1957, Kimmel's Magnolia Tract, in the City of SAN BERNARDINO, County of SAN BERNARDINO, State of California, as per map recorded in Book 28, page(s) 55, of Maps, in the office of the County Recorder of said County. Except the East 5.00 feet thereof. Page 3 of 5