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HomeMy WebLinkAboutR27- Economic Development Agency CDC/99-5 ECONOMIC DEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO REQUEST FOR COMMISSION/COUNCIL ACTION FROM: Ann B.Harris,Director SUBJECT: LOAN TO STEVEN T.WUO Business Recruitment,Retention& &KUAN-YIH WUO TO PURCHASE Revitalization CAR WASH AT 101 NORTH "E" STREET DATE: February 5, 1999 Synopsis of Previous Commission/Councii/Committee Action(s): On January 28, 1999,the Redevelopment Committee considered the proposal and requested legal documents be prepared and item be brought back to the Committee on February 4, 1999. On February 4, 1999,the Redevelopment Committee considered the proposal and requested that language be added to allow the loan to be assigned. Recommended Motion(s): (Community Development Commission) MOTION A: RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO AUTHORIZING THE EXECUTIVE DIRECTOR OF THE ECONOMIC DEVELOPMENT AGENCY TO EXECUTE A LOAN AGREEMENT WITH STEVEN T.AND KUAN-YIH WUO TO PURCHASE PROPERTY AT 101 NORTH`B"STREET MOTION B: That the Community Development Commission authorize a loan agreement with Steven T.and Kuan-Yih Wuo. Contact Person(s): Gary Van Osdel/Ann Harris Phone: 5081 Project Area(s): Central City North Ward(s): One(1) Supporting Data Attached:® Staff Report® Resolution(s) ® Agreement(s)/Contract(s)❑ Map(s)❑Ltr/Memo FUNDING REQUIREMENTS: Amount: $200.000 Source: Community Reinvestment Fund Budget Authority: Requested SIGNATURE: G VAN OSDEL Ann arris,Director E ecutive Director Bus.Recruitment,Retention&Revital. ------_--'-'------------------------------------------------------------------------------------------------------------------------------ Commission/Council Notes: ----------------------------------------------------------------'"_ ----___------------_____--------- GVO:ABH:lag:99-02-15 Car Wash COMMISSION MEETING AGENDA MEETING DATE: 02/15/1999 Agenda Item Number: -A� CDC/99-5 ECONOMIC DEVELOPMENT AGENCY STAFF REPORT ----------------------------------------------------------------------------------------------------------------------------- Bridee Loan to Purchase Car Wash at 101 North"E"Street BACKGROUND In 1992,after years of being boarded up and blighted,the former Nissan dealership,located at 101 North"E"Street, was converted into a car wash. The business had a very high debt load of over$1 million. The owners suffered ill health and were not available to oversee day to day management of the business,consequently the business failed. The business is currently closed. Steven T.and Kuan-Yih Won have negotiated with the bank to purchase the property and business for$650,000. The buyer has$450,000 cash to purchase the property leaving the need for $200,000 to close the purchase. The Agency has been approached by Steven T.and Kuan-Yih Wuo(Buyers)to provide a bridge loan in the amount of$200,000 at(10%)interest for a period of one year secured by a First Deed Of Trust. The buyer has $450,000 cash down payment, leaving a balance of$200,000 to close the purchase of the property and business. The buyer will make monthly interest payments to the Agency. The principal amount will be due and payable,in full,in one year. The business will employ 15 full-time,and 15-20 part-time employees. The Redevelopment Committee reviewed this item at the January 28, 1999 meeting and requested that Agency Special Counsel review the business plan and financials and prepare detailed documents to be brought back to the Committee. The Redevelopment Committee reviewed this item on February 4, 1999,and requested that Agency Special Counsel add language to the documents so that the loan can be assigned to a private lender,also to check and see if there is a bank that would be interested in this loan. The documents have been amended to include such language and a bank has been contacted that would be interested in purchasing the loan under the terms of the agreement. Agency Counsel has prepared the loan agreement,promissory note agreement and a Deed of Trust which are attached. Staff has reviewed the appraisal of the property and business,the business plan and the financials of the Buyer. The chances for this business to succeed have been enhanced by the fact the new owner will have only$200,000 debt and has sufficient operating capital. The funding source has been identified as Community Reinvestment Funds(CRF). Currently,there is a balance of $1,000,000 in the CRF. If this to f is approved,the balance remaining is the CRF would be$800,000. Ann 13.Harris,Director Business Recruitment,Retention&Revitalization GVO:ABH:lag:99-02-15 Car Wash COMMISSION MEETING AGENDA MEETING DATE: 02/15/1999 Agenda Item Number: Z.Z RESOLUTION NO: OUT z 3 RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO 9 AUTHORIZING THE EXECUTIVE DIRECTOR OF THE 5 ECONOMIC DEVELOPMENT AGENCY TO EXECUTE A LOAN AGREEMENT WITH STEVEN T. AND KUAN-YIH 6 WUO TO PURCHASE PROPERTY AT 101 NORTH "E" STREET 7 8 BE IT RESOLVED BY THE COMMUNITY DEVELOPMENT COMMISSION 9 OF THE CITY OF SAN BERNARDINO AS FOLLOWS: 10 SECTION 1. The Executive Director of the Economic Development Agency is 12 hereby authorized and directed to execute a Loan Agreement with Steven T. and Kuan-Yih Wuo, 13 a copy of which is attached hereto and marked as Exhibit"A" and incorporated herein by 19 reference as fully as though set forth at length. .s SECTION 2. The authorization to execute the above referenced agreement 1s 16 rescinded if the parties to the agreement fail to execute it and return it to the Office of the City 17 Clerk within sixty (60) days following the effective date. 19 //// 19 20 21 22 23 29 25 26 27 28 - 1 - RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO AUTHORIZING THE EXECUTIVE DIRECTOR OF THE 3 ECONOMIC DEVELOPMENT AGENCY TO EXECUTE A LOAN AGREEMENT WITH STEVEN T. AND KUAN-YIH 4 WUO TO PURCHASE PROPERTY AT 101 NORTH "E" 5 STREET 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 e meeting thereof, held on day of 1999 by the 9 following vote,to wit: 10 COMMISSION MEMBERS: AYES NAYS ABSTAIN ABSENT 11 ESTRADA 12 LIEN 13 MCGINNIS 14 SCHNETZ DEVLIN 16 ANDERSON 17 MILLER 1e 19 Secretary 20 zl The foregoing resolution is hereby approved this day of 22 11999. 23 24 Judith Valles, Chairperson 25 Community Development Commission Of the City of San Bernardino 26 Approved as to 4urn and Leg Content: zi By:Y: Agency Counsel i 2 - crr/99-5 , • EXHIBIT "A" ' LOAN AGREEMENT THIS LOAN AGREEMENT (the "Agreement") is entered into as of this 1st day of February, 1999, by and between the Redevelopment Agency of the City of San Bernardino, a public body, corporate and politic (the "Agency") and Steven T. Wuo and Kuan-Yih Wuo (together, the "Borrower") . WHEREAS, the Agency is organized and existing under Chapter 2 of the Community Redevelopment Law of the State of California (Health and Safety Code Section 33020, e_t sea. ) ; and WHEREAS, the Borrower desires to purchase that certain real property located at 101 North "E" Street, San Bernardino, California and more particularly described on Exhibit "A" attached hereto and by this reference incorporated herein (the "Property") , on which is located a carwash business ("Carwash") (the Carwash and the Property being hereinafter from time to time collectively referred to as the "Business") ; and WHEREAS, the Business is currently in foreclosure; and WHEREAS, the Borrower has made an offer of Six Hundred Fifty Thousand Dollars ($650, 000. 00) to purchase the Business out of foreclosure (the "Purchase Price") ; and WHEREAS, the Borrower has entered into that certain escrow with Vera ' s Escrow Service, Inc. , numbered 981134-EL (the "Escrow") , in connection with the purchase of the Business, which escrow is scheduled to close on February _, 1999 (the "Escrow Close Date") ; and WHEREAS, the Borrower has cash on hand of Four Hundred Fifty Thousand Dollars ($450, 000.00) to apply to the Purchase Price; and WHEREAS, the Borrower has requested the Agency to loan to the Borrower the sum of Two Hundred Thousand Dollars ($200, 000 . 00) to enable the Borrower to consummate the purchase of the Business; and WHEREAS, the Borrower has represented to the Agency that the Business will, when fully operational, employ fifteen (15) full-time employees and fifteen (15) to twenty (20) part-time employees; and CDC/99-5 WHEREAS, the Agency is responsible for, among other things, increasing economic activity and employment opportunities in the City of San Bernardino (the "City") ; and WHEREAS, the Agency desires to lend to the Borrower for the purpose of increasing economic activity and employment opportunities in the City. NOW, THEREFORE, in consideration of the premises and for such other good and valuable consideration receipt of which is hereby acknowledged the parties hereto agree as follows : 1 . The Loan. The Agency shall loan to the Borrower a principal amount equal to Two Hundred Thousand Dollars ($200, 000 . 00) (the "Loan") . The Loan shall bear interest at the rate of ten percent (10%) per annum, accruing from and after the date that the Loan is funded. Interest shall be calculated on an actual days basis of a year equal to 365/366 days . The Loan shall be represented by a promissory note substantially in the form attached hereto as Exhibit "B" (the "Note") executed by the Borrower in favor of the Lender and shall be secured by a first deed of trust on the Property substantially in the form attached hereto as Exhibit "C" (the "Deed of Trust") . 2 . Use of Funds . The Borrower shall use and apply the proceeds of the Loan solely for the purpose of consummating the purchase of the Business from the Seller. 3 . Repayment of the Loan. (a) Principal . Payment of principal shall be due February 1, 2000 (the "Maturity Date") and shall be in immediately available funds . (b) Interest. Interest in the amount of $1, 666. 67 shall be paid monthly on the first day of the month, beginning March 1, 1999. The final interest payment of $1, 666. 67 shall be adjusted downward in an amount equal to the interest paid for the period of time from February 1, 1999 until the date of funding of the Loan, as provided in Section 5 hereof, and shall be due and payable on the Maturity Date. 2 CDC/99-5 (c) Late Charaes . A late charge of five percent (5%) of the amount due shall be paid by the Borrower with respect to each payment of interest not made by the fifth (5th) day of the month. A late charge of five percent (58) of the amount due shall be paid by Borrower with respect to the payment of principal, if such payment of principal is not made by the fifth (5th) day of February, 2000 . 4 . Security for the Loan. The Loan is secured by the Deed of Trust, pursuant to which the Borrower grants to the Agency a first lien on the Property. The Borrower hereby agrees and covenants to deposit Four Hundred Fifty Thousand Dollars ($450, 000 .00) into Escrow so that, upon the funding of the Loan by the Agency, there will be sufficient funds in Escrow to pay off a presently outstanding Small Business Administration loan (the "SBA Loan") with respect to the Business . The Borrower hereby agrees and covenants to direct the officer in charge of the Escrow (the "Escrow Officer") to pay off the SBA Loan and to obtain a reconveyance of the property subject to the deed of trust securing the SBA Loan (the "SBA Deed of Trust") so that, upon the delivery of the Deed of Trust to the Agency, the Agency shall occupy the position of first lienholder with respect to the Property. 5 . Funding of the Loan. The Agency shall disburse to the Borrower the entire amount of the Loan by depositing said amount into Escrow for the benefit of the Borrower prior to the close of business on the Escrow Close Date; provided, however, that funding of the Loan shall occur only upon the satisfaction of each of the following C conditions precedent: i (a) The receipt by the Agency of a preliminary title report prepared by Lawyers Title Company (the "Title Company") in connection with the purchase of the Property by the Borrower, showing no liens or encumbrances on the Property other than the lien of the SBA Deed of Trust and any liens for taxes due and payable in the current tax year; (b) The receipt by the Agency from the Escrow Officer of evidence that the SBA Loan has been paid and the property subject to the SBA Deed of Trust has been reconveyed; I 3 I I CDC/99-5 - (c) The deposit into Escrow by the Borrower of the sum of Four Hundred Fifty Thousand Dollars ($450, 000 . 00) ; (d) The deposit into Escrow by the Borrower of the executed Note and executed Deed of Trust; and (e) The receipt by the Agency of a CLTA Lender' s Policy of title insurance issued by the Title Company, insuring the first lien position of the Agency with respect to the Property. 6 . Representations and Warranties of Borrower; Covenants of Borrower. (a) This Agreement has been, and the Note will be, duly executed and delivered by the Borrower and this Agreement does, and the Note will, constitute valid and binding obligations of the Borrower. (b) On and as of the funding date as referred to in Section 5 above, Borrower is not in default under any other indebtedness of Borrower, and the execution, delivery or performance of Borrower of this Agreement and the Note shall not, to the best of Borrower ' s knowledge, contravene any provision of law, statute, rule or regulation of any governmental instrumentality and shall not, to the best of Borrower' s knowledge, conflict or be inconsistent with or result in any breach of any terms, covenants or provisions of, or constitute a default under, or result in the creation or imposition of a lien pursuant to the terms of, any loan agreement, credit agreement or any other agreement, contract or instrument to which Borrower is a party or by which it is bound or to which it may be subject. (c) The Borrower hereby covenants that Borrower shall not incur, create or suffer the imposition of any indebtedness secured in any way by the Property so long as the Note is outstanding. The Borrower hereby further covenants that Borrower shall not sell, lease, transfer or convey the Property so long as the Note is outstanding, without the prior written consent of the Agency, which consent may be given or withheld by the Agency in its sole discretion. (d) The Borrower hereby covenants that it shall seek permanent financing to enable Borrower to repay the Note on the Maturity Date. Borrowers shall within thirty (30) days of the date of this Agreement submit to lending institutions one or more applications for permanent financing; shall within six (6) months from the date of this Agreement obtain a tentative commitment or 4 CDC/99-5 letter of interest with respect to such permanent financing; and shall within nine (9) months of the date of this Agreement obtain a firm commitment for such permanent financing. 7 . Events of Default. (a) By Agency. The following shall constitute a default by the Agency: failure to fund the Loan as provided in Section 5 of this Agreement . (b) By Borrower. Each of the following shall constitute a default by the Borrower: (i) failure to pay the principal of, interest on, and any other payments with respect to, the Note, on or before an Interest Payment Date or the Maturity Date, as applicable, as each payment of interest and principal is required to be made; and (ii) failure to perform or a delay in performing or a failure to comply with any term or provision of this Agreement and such failure or delay or noncompliance is not corrected within thirty (30) days of notice thereof by the Agency. 6 . Remedies . (a) Upon a default by the Agency, (i) the Borrower shall be released from any further obligation under this Agreement or the Note and (ii) the Borrower may seek appropriate legal or equitable relief. (b) Upon a default by the Borrower, the Agency may, at its option, (i) declare all sums due under the Note immediately due and payable; (ii) institute suit for the foreclosure of the Deed of Trust or deliver to the trustee under the Deed of Trust a written declaration of default by Borrower and of election to cause the Property to be sold, all as provided in the Deed of Trust; (iii) institute any proceeding at law or in equity to enforce the obligations and covenants of the Borrower under this Agreement, the Note and the Deed of Trust. (c) In any action brought under this Agreement, the prevailing party shall be entitled to reimbursement from the other party of its costs and expenses (including reasonable attorney' s fees) in bringing such action. Additionally, the Agency shall be entitled to any costs, including reasonable attorney's fees, incurred in collecting amounts due the Agency under the Note. 5 CDC/99-5 9 . Assignment by Agency. The Agency shall be entitled to assign its rights and obligations under this Agreement upon consent by the Borrower to such assignment, which consent shall not unreasonably be withheld. The Borrower shall not be entitled to, and shall not, assign its rights and obligations under this Agreement. 10 . Term. This Agreement shall terminate upon the payment in full by the Borrower of all amounts due under the Note. 11. Notices . Notices shall be presented in person or by certified or registered United States mail, return receipt requested, postage prepaid, or by overnight delivery made by a nationally recognized delivery service to the address noted below. Notice presented by United States mail shall be deemed effective the second business day after deposit with the United States Postal Service. This Section shall not prevent giving notice by personal service or telephonically verified fax transmission, which shall be deemed effective upon actual receipt of such personal service or telephonic verification. Either party may change their address for receipt of written notice by so notifying the other party in writing. TO THE AGENCY: Ann Harris Redevelopment Agency of the City of San Bernardino 201 North "E" Street, Suite 301 San Bernardino, California 92401 Telephone: (909) 384-5081 Facsimile: (909) 384-5216 with a copy to: Timothy J. Sabo, Esq. Sabo & Green A Professional Corporation 201 North "E" Street, Suite 300 San Bernardino, California 92401 Telephone: (909) 383-9373 Facsimile: (909) 383-9378 TO BORROWER: Steven T. and Kuan-Yih Wuo with a copy to: 6 CDC/99-5 12 . Governing Law. This Agreement shall be governed by the laws of the State of California. 13 . Entire Agreement . This Agreement constitutes the entire agreement between the parties and may not be amended without the prior written consent of the parties hereto. This Agreement supersedes all prior negotiation, discussions and previous agreements between the parties concerning the subject matter herein. The parties intend this Agreement to be the final expression of their agreement with respect to the terms herein and a complete and exclusive statement of such terms . No modification, amendment or waiver of any term herein shall be binding unless executed in writing by the parties hereto. 14 . Amendment. i This Agreement may be amended as deemed necessary by written instruments duly approved and executed by the parties hereto. Any such amendments or modifications shall be valid, binding and legally enforceable only if in written form and executed by the parties hereto and only after the approval thereof by official action of the Agency. j 15 . Severability. Each and every section of this Agreement shall be construed as a separate and independent covenant and agreement. If any term or provision of this Agreement or the application thereof shall be declared invalid or unenforceable, the remainder of this Agreement, or the application of such term or provision to circumstances other than those to which it is invalid or unenforceable, shall not be affected thereby, and each term and provision of this Agreement shall be valid and enforceable to the extent permitted by law. 16. Representation by Counsel . i The Borrower hereby represents and warrants to the Agency that the Borrower has had the opportunity to obtain counsel on Borrower ' s behalf in connection with the Loan, this Agreement, the Note and the Deed of Trust, and Borrower further represents and warrants that it has not, in connection with the Loan, this Agreement, the Note and the Deed of Trust relied on the advice of 7 CDC/99-4 Agency Special Counsel or the City Attorney of the City of San Bernardino. IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date first written above. REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO By: Title: (SEAL) ATTEST: Secretary Approved as to Form and Legal Content: By: Agency Special Counsel Steven T. Wuo Kuan-Yih Wuo P:\APPS\WPDATA\SBEO\0001\DOC\3446.WPD 2\5\99 1245 dh 8 CDC/99-5 EXHIBIT "A" LEGAL DESCRIPTION [TO COME] UJC/99-5 EXHIBIT "B" PROMISSORY NOTE PROMISSORY NOTE SECURED BY DEED OF TRUST $200, 000 . 00 Place: Redevelopment Agency of the City of San Bernardino 201 North "E" Street Suite 301 San Bernardino, CA 92401 Attn: Development Director Date: February , 1999 FOR VALUE RECEIVED, the undersigned promises to pay to Redevelopment Agency of the City of San Bernardino (the "Agency") or its successors, the sum of Two Hundred Thousand Dollars ($200, 000 . 00) . 1 . Payment of principal shall be due February 1, 2000 (the "Maturity Date") and shall be in immediately available funds . 2 . This Note shall bear interest from its date at the rate of ten percent (108) per annum, payable monthly on the first day of each month , beginning March 1, 1999, with the final payment due on the Maturity Date. Each monthly payment of interest shall be in the amount of $1, 666. 67; provided, however, that the final interest payment shall be adjusted downward in an amount equal to the interest paid for the period of time from February 1, 1999 until the date of funding of the Loan (as that term is defined in the Loan Agreement dated as of February 1, 1999, by and between the Agency and the undersigned) (the "Loan Agreement") , as provided in Section 5 of the Loan Agreement . 3 . A late charge of five percent (58) of the amount due shall be paid by the undersigned with respect to each payment of interest not made by the fifth (5th) day of the month. A late charge of five percent (58) of the amount due shall be paid by the undersigned with respect to the payment of principal, if such payment of principal is not made by the fifth (5th) day of February, 2000. 4 . In the event the property which is subject to the Deed of Trust securing this Note is sold, leased, transferred or conveyed, or is subject to a refinancing, the outstanding principal CDC/99-5 balance of this Note shall be deemed immediately due and payable in full . 5 . A failure to pay any sum provided for in this Note when due, or a material breach of this Note or the Deed of Trust, shall constitute a breach hereof and shall entitle the Agency to declare all sums due hereunder immediately due and payable and to pursue all remedies available under this Note and or the Deed of Trust . All payments due under this Note shall be made in lawful money of the United States at the principal office of the Agency, 201 North "E" Street, Suite 301, San Bernardino, California 92401, or at such other place as may from time to time be designated by the Agency in writing. In no event shall the interest and late charge payable hereunder exceed the maximum amount of interest permitted under the usury laws of the State of California. If suit is instituted by the Agency to recover on this Note, the undersigned agrees to pay all costs of such collection including reasonable attorney' s fees and court costs . THIS NOTE is secured by a Deed of Trust of even date, duly filed for record in the office of the County Recorder of the County of San Bernardino, State of California. DEMAND, protest and notice of demand and protest are hereby waived and the undersigned hereby waives, to the extent authorized by law, any and all homestead and other exemption rights which otherwise would apply to the debt evidenced by this Note. cuc/99-s IN WITNESS WHEREOF, THIS NOTE has been duly executed by the undersigned, as of its date. Steven T. Wuo Kuan-Yih Wuo CDC/9`J-5 EXHIBIT "C" DEED OF TRUST RECORDING REQUESTED BY: ) ) REDEVELOPMENT AGENCY OF THE ) CITY OF SAN BERNARDINO ) AND WHEN RECORDED MAIL TO: ) REDEVELOPMENT AGENCY OF THE ) CITY OF SAN BERNARDINO ) 201 North "E" Street, Suite 301 ) San Bernardino, California 92401 ) Attn: Development Director ) (Space Above for Recorder ' s Use) DEED OF TRUST WITH ASSIGNMENT OF RENTS Deed of trust made on February , 1999, by Steven T. Wuo and Kuan-Yih Wuo, hereinafter called "Trustor, " whose address is California , to hereinafter referred to as "Trustee", whose business address is California , in favor of REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, hereinafter referred to as "Beneficiary", whose business address is 201 North "E" Street, Suite 301, San Bernardino, California 92401 . Trustor irrevocably grants, transfers, and assigns to Trustee in trust, with power of sale, all that property, including all easements and rights of way used in connection therewith or as a means of access thereto, in the City of San Bernardino, County of San Bernardino, State of California, described as follows : [LEGAL DESCRIPTION TO COME] together with the rents, issues and profits thereof, subject however to the right reserved by Trustor in Paragraph B-17 hereof to collect and apply such rents, issues and profits, prior to any default hereunder; for the purpose of securing performance in a timely manner of all of Trustor' s obligations under that certain Loan Agreement dated as of February 1, 1999, by and between the Trustor and the Beneficiary and payment of the indebtedness evidenced by a Promissory Note executed by Trustor in the principal sum of Two Hundred Thousand Dollars ($200, 000 .00) , payable to CDC/99-5 Beneficiary, both executed in connection with this Deed of Trust . A. To protect the security of this Deed of Trust, Trustor agrees : i . To maintain the property in good condition and repair; not to remove or demolish any building or improvement thereon; to complete promptly in workmanlike manner any improvement hereafter constructed thereon and to restore promptly in workmanlike manner any improvement thereon that is damaged or destroyed, and to pay when due all costs incurred therefor or in connection therewith; to comply with all laws, ordinances, regulations, covenants, conditions and restrictions affecting the property; not to commit or permit any waste thereof or any act upon the property in violation of law or of covenants, conditions or restrictions affecting the property. ii . To appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee; and also, if at any time Beneficiary or Trustee is a party to or appears in any such action or proceeding, or in any action or proceeding to enforce any obligation hereby secured, to pay all costs and expenses paid or incurred by them or either of them in connection therewith, including, but not limited to, cost of evidence of title and attorneys ' fees in a reasonable sum. iii. To pay (a) at least ten (10) days before delinquency, all taxes and assessments affecting the property, all assessment upon water company stock, and all rents, assessments and charges for water appurtenant to or used in connection with the property; (b) when due, all encumbrances, charges and liens, with interest, on the property or any part thereof, which appear to be prior or superior hereto; and (c) all costs, fees and expenses of this trust . iv. If Trustor fails to make any payment or to do any act as herein provided, then Beneficiary or Trustee (but without obligation to do so, and with or without notice to or demand upon Trustor, and without releasing Trustor from any obligation hereof) may (a) make or do the same in such manner and to such extent as either deems necessary to CDC/99-5 protect the security hereof, Beneficiary or Trustee being authorized to enter upon the property for such purpose; (b) appear in or commence any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee; (c) pay, purchase, contest, or compromise any encumbrance, charge or lien that, in the judgment of either, appears to be superior hereto; and in exercising any such power, Beneficiary or Trustee may incur necessary expenses, including reasonable attorneys ' fees . V. To pay immediately and without demand all sums expended hereunder by Beneficiary or Trustee, with interest from date of expenditure at the annual rate of two percentage points over Bank of America' s published prime rate. B. It is mutually agreed that : i 1 . Any award of damages made in connection with the condemnation for public use of or injury to the property or any part thereof is hereby assigned and shall be paid to Beneficiary, who may apply or release such moneys received therefor upon any indebtedness secured hereby in such order as Beneficiary determines, or at the option of Beneficiary the entire amount so j received or any part thereof may be released to Trustor. Such application or release shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. 2 . The acceptance by Beneficiary of any payment less than the amount then due shall be deemed an acceptance on account only and shall not constitute a waiver of the obligation of Trustor to pay the entire sum then due or of Beneficiary' s right either to require prompt payment of all sums then due or to declare default. The acceptance of payment of any sum secured hereby after its due date will not waive the right of Beneficiary either to require prompt payment when due of all other sums so secured or to declare default for failure so to pay. No waiver of any default shall be a waiver of any preceding or succeeding default of any kind. 3 . At any time or from time to time, without liability therefor and with or without notice, upon written request of Beneficiary and presentation of this deed and the secured note for endorsement, and without effecting the personal liability of any person for payment of the indebtedness secured hereby or the effect of this deed upon the remainder of the property, Trustee may reconvey any part of the property, consent to the making of any map CDC/99-5 or plat thereof, join in granting any easement or join in any extension agreement or any agreement subordinating the lien or charge thereof. i 9 . Upon written request of Beneficiary stating that all sums secured hereby have been paid, surrender of this deed and the note to Trustee for cancellation and retention, and payment of its fees, Trustee shall reconvey, without warranty the property then held hereunder. The recitals in such reconveyance shall be conclusive proof of the truthfulness thereof. The grantee may be designated in such reconveyance as "the person or persons legally entitled thereto. " 5 . Trustor may give such notice to Beneficiary at any time before there is a Trustee ' s sale of the property. At any time Trustor is in default in payments to be made to Beneficiary hereunder, any amounts paid to and received by Beneficiary for execution of releases pursuant to the terms of this paragraph after notice of default and election to sell has been recorded shall not, unless the requirements of Section 2929c of the Civil Code are fully met by or on behalf of Trustor, waive the right of Beneficiary to continue its plans to have the property sold, nor shall they have any effect on the exercise by Beneficiary of the acceleration privilege contained herein, except to entitle the person effecting such payment to the release of the property for which the release amount was paid, and insofar as Beneficiary is concerned, to constitute a credit against the secured debt. 6. If Trustor or any subsequent owner of the property covered hereby shall occupy the property, or any part thereof, after any default in payment of any amount secured by this deed of trust, Trustor or such owner shall pay to Beneficiary in advance on the first day of each month a reasonable rental for the premises so occupied. On failure to pay such reasonable rental, Trustor or such owner may be removed from the premises by. summary dispossession proceedings or by any other appropriate action or proceeding. 7 . If default is made in payment of any indebtedness or in performance of any agreement hereby secured, then Beneficiary, with or without notice to Trustor, may declare all sums secured hereby immediately due and payable by instituting suit for the recovery thereof or for the foreclosure of this deed, or by delivering to Trustee a written declaration of default and demand for sale, as well as a written notice of default and of election to cause the property to be sold, which notice Trustee shall cause to be filed for record. If such declaration is delivered to Trustee, Beneficiary shall also deposit with Trustee this deed, the secured note, and all documents evidencing expenditures secured hereby. CDC/99-5 8 . Should Trustor, without the consent in writing of Beneficiary, voluntarily sell, transfer or convey his interest in the property or any part thereof, or if by operation of law, it be sold, transferred or conveyed, then Beneficiary may, at its option, declare all sums secured hereby immediately due and payable. Consent to one such transaction shall not be deemed to be a waiver of the right to require such consent to future or successive transactions . 9. After the time then required by law has elapsed after recordation of such notice of default, and notice of sale having been given as then required by law, Trustee, with or without demand on Trustor, shall sell the property at the time and place fixed in the notice of sale, . either as a whole or in separate parcels and in such order as Trustee determines, at public auction, to the highest bidder, for cash in lawful money of the United States, payable at the time of sale. Trustee may postpone from time to time sale of all or any portion of the property by public announcement at the time and place of sale originally fixed or at the last preceding postponed time. Trustee shall deliver to the purchaser its deed conveying the property 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. Trustor, Trustee, Beneficiary or any other person may purchase at the sale. 10 . After deducting all costs, fees and expenses of Trustee and of this trust, including cost of evidence of title and reasonable attorneys ' fees in connection with sale, Trustee shall apply the proceeds of sale to payment of (a) all sums expended under the terms hereof and not theretofore repaid, with accrued interest at two percentage points over Bank of America' s published prime rate per annum, and (b) all other sums then secured hereby in such order as Beneficiary, in the exercise of its sole discretion, directs. The remainder, if any, shall be paid to the person or persons legally entitled thereto. 11 . Before Trustee ' s sale, Beneficiary may rescind such notices of default and of election to cause the property to be sold by delivering to Trustee a written notice of rescission, which notice, when recorded, shall cancel any prior declaration of default, demand for sale and acceleration of maturity. The exercise of such a right of rescission shall not constitute a waiver of any default then existing or subsequently occurring, or impair the right of Beneficiary to deliver to Trustee other declarations of default and demands for sale or notices of default and of election to cause the property to be sold, or otherwise affect any provision of the secured note or of this deed or any of the rights, obligations or remedies of Beneficiary or Trustee hereunder . CDC/99-5 , 12 . The restrictions pertaining to the property will automatically terminate if title to the mortgaged property is transferred by foreclosure or deed-in-lieu of foreclosure, or if the mortgage is assigned to the Secretary of the Department of Housing and Urban Development . 13 . Beneficiary may, from time to time as provided by statute, or by a writing signed and acknowledged by him and recorded in the office of the county recorder of the county in which the land or such party thereof as is then affected by this deed of trust is situated, appoint another trustee in stead and of Trustee herein named; and thereupon, the Trustee herein named shall be discharged, and the trustee so appointed shall be substituted as Trustee hereunder with the same effect as if originally named Trustee herein. 14 . If two or more persons are designated as Trustee herein, any or all powers granted herein to Trustee may be exercised by any of such persons if the other person or persons is unable, for any reason, to act . Any recital of such inability in any instrument executed by any of such persons shall be conclusive against Trustor, his heirs and assigns . 15 . All leases now or hereafter affecting the property are hereby assigned and transferred to Beneficiary by Trustor. Trustor hereby covenants that none of such leases will be modified or terminated without the written consent of Beneficiary. 16. When requested to do so, Trustor shall give such further written assignments of rents, royalties, issues and profits; of all security for the performance of leases; and of all money payable under any option to purchase, and shall give executed originals of all leases, now or hereafter on or affecting the property. 17 . Trustor reserves the right, prior to any default in payment of any indebtedness or performance of any obligation secured hereby, to collect all such rents, royalties, issues and profits, as but not before they become due. Upon any such default, Trustor' s right to collect such moneys shall cease, not only as to amounts accruing thereafter, but also as to amounts then accrued and unpaid. In the event of default, Beneficiary, with or without notice and without regard to the adequacy of security for the indebtedness hereby secured, either in person or by agent, or by a receiver to be appointed by the court, (a) may enter upon and take possession of the property at any time and manage and control it in Beneficiary' s discretion, and (b) with or without taking possession, may sue for or otherwise collect the rents, issues and profits thereof, whether past due or coming due thereafter, and apply the same, less costs and expenses of operation and CDC/99-5 , collection, including reasonable attorneys ' fees, upon any obligation secured hereby and in such order as Beneficiary determines . None of the aforesaid acts shall cure or waive any default hereunder or invalidate any act done pursuant to such notice. Beneficiary shall not be required to act diligently in the care or management of the property or in collecting any rents, royalties or other profits that it is hereby authorized to collect, and shall be accountable only for sums actually received. 18 . Without affecting the liability of Trustor or of any other party now or hereafter bound by the terms hereof, from time to time and with or without notice, may release any person now or hereafter liable for performance of such obligation, and may extend the time for payment or performance, accept additional security, and alter, substitute or release any security. 19 . In any judicial action brought to foreclose this deed or to enforce any right of Beneficiary or of Trustee hereunder, Trustor shall pay to Beneficiary and to Trustee attorneys ' fees in a reasonable sum, to be fixed by the court . 20 . No remedy hereby given to Beneficiary or Trustee is exclusive of any other remedy hereunder or under any present or future law. 21 . The pleading of any statute of limitations as a defense to any and all obligations secured by this deed is hereby waived, to the full extent permissible by law. 22 . In the event of default in the payment of any indebtedness secured hereby, and if such indebtedness is secured at any time by any other instrument, Beneficiary shall not be obligated to resort to any security in any particular order; and the exercise by Beneficiary of any right or remedy with respect to any security shall not be a waiver of or limitation on the right of Beneficiary to exercise, at any time or from time to time thereafter, any right or remedy with respect to this deed. 23 . Beneficiary may collect a "late charge" not to exceed an amount equal to five percent (5%) on the amount past due and remaining unpaid on any installment that is not paid within five (5) days from the due date thereof, to cover the extra expense involved in handling delinquent payments . 24 . This deed applies to, inures to the benefit of and binds all parties hereto, their heirs, legatees, devisees, administrators, executors, successors, successors in interest, and assigns . The term "Beneficiary" means the owner and holder, including pledgees, of the note secured hereby, whether or not named as Beneficiary herein. In this deed, whenever the context so CDC/99-5 requires, the masculine gender includes the feminine and neuter, and the singular number includes the plural, and all obligations of each Trustor hereunder are joint and several . 25 . Trustee accepts this trust when this deed, duly executed and acknowledged, is made a public record as provided by law. Trustee is not obligated to notify any party hereto of pending sale under any other deed of trust or of any action or proceeding in which Trustor, Beneficiary or Trustee is a party unless brought by Trustee . Trustor requests that a copy of notice of default and of any notice of sale hereunder shall be mailed to Trustor at the address set forth immediately below. MAILING ADDRESS FOR NOTICES : Steven T. Wuo and Kuan-Yih Wuo, as Trustor: [ADDRESS TO COME] i Executed at San Bernardino, California, on the date first above written. TRUSTOR Steven T . Wuo Kuan-Yih Wuo C I T Y OF S A N B E R N A R D I N O INTEROFFICE MEMORANDUM _ CITY CLERK' S OFFICE DATE: February 17, 1999 TO: Barbara Lindseth, ASD, EDA FROM: Josie Alvarez, Account Clerk III/Liens SUBJECT: Agreement - Transmittal for signatures re : CDC/99-5 COPIES : File ---------------------------------------------------------------- Attached are the following: One (1) original agreement and two (2) duplicate original agreements to be filed with Res . CDC 99-5 authorizing the executive director of the EDA Agency to execute a loan agreement with Steven T. and Kuany-Yih wuo. Please obtain signatures on all documents and return to the City Clerk' s office. Said agreements must be executed by the Mayor. If you have any questions please do not hesitate to call Josie Alvarez at 5102 . Thank you. I hereby acknowledg recei t of the above mentioned documents . Signed: Dated: ��� y' 9 attachments