ATTACHMENT NO. 7 CITY DEED OF TRUST … · SECURITY AGREEMENT, AND FIXTURE FILING . ATTENTION...

City Deed of Trust of 36

ATTACHMENT NO. 7

CITY DEED OF TRUST OFFICIAL BUSINESS Document entitled to free recording per Government Code § 6103 Recording Requested by and When Recorded Return to: City of Lompoc 100 Civic Center Plaza P.O. Box 8001 Lompoc, CA 93438-8001 Attention: Dinah Perez Lockhart, Comm. Dev. Program Manager ________________________________________________________________________________ Space above this line for Recorder’s use only. SUBORDINATED DEED OF TRUST, SECURITY AGREEMENT, AND FIXTURE FILING ATTENTION COUNTY RECORDER: THIS INSTRUMENT COVERS GOODS THAT ARE OR ARE TO BECOME FIXTURES ON THE REAL PROPERTY DESCRIBED HEREIN AND IS TO BE FILED FOR RECORD IN THE RECORDS WHERE DEEDS OF TRUST ON REAL ESTATE ARE RECORDED. ADDITIONALLY, THIS INSTRUMENT SHOULD BE APPROPRIATELY INDEXED, NOT ONLY AS A DEED OF TRUST, BUT ALSO AS A FINANCING STATEMENT COVERING GOODS THAT ARE OR ARE TO BECOME FIXTURES ON THE REAL PROPERTY DESCRIBED HEREIN. THE MAILING ADDRESSES OF THE TRUSTOR (DEBTOR) AND BENEFICIARY (SECURED PARTY) ARE SET FORTH IN THIS INSTRUMENT.

THIS DEED OF TRUST, SECURITY AGREEMENT, AND FIXTURE FILING (the “Deed of Trust”) is made as of January 15, 2008 by and among College Park Housing Associates, a California Limited Partnership (“Trustor”), whose mailing address is 604 East Ocean Avenue, Suite E, Lompoc, CA 93436, CHICAGO TITLE INSURANCE COMPANY, a California corporation (“Trustee”), whose mailing address is 820 North H Street, Lompoc, CA 93436, and CITY OF LOMPOC, a municipal corporation (hereinafter “Beneficiary”), whose mailing address is 100 Civic Center Plaza, P.O. Box 8001, Lompoc, California 93438-8001, with a copy to Community


Development Department, Attention: Community Development Program Manager and the same address.

TRUSTOR IRREVOCABLY GRANTS, TRANSFERS, AND ASSIGNS TO TRUSTEE, ITS SUCCESSORS AND ASSIGNS, IN TRUST, WITH POWER OF SALE, AND RIGHT TO ENTRY AND POSSESSION:

All that real property now or hereafter acquired in the City of Lompoc, County of Santa Barbara, State of California, described in Exhibit “A” attached hereto and incorporated herein by this reference (herein referred to as the “Property”);

TOGETHER WITH, and including, without limitation, all of Trustor’s right, title, and interest in and to the following:

1. All buildings and improvements now or hereafter erected on the Property; all easements, rights, rights-of-way, privileges, franchises, appurtenances, tenements, and hereditaments now or hereafter belonging to, or in any way appertaining to, or in any way being a means of access to, or egress from the Property;

2. All equipment, machinery, and fixtures of any kind or nature whatsoever located on or attached to the Property and the improvements thereon, including without limitation, appliances, plumbing materials and supplies, concrete, lumber, hardware, electrical wiring, roofing materials, windows, doors, paint, drywall, insulation, carpet, cabinets, flooring, signs, furniture, furnishings, building materials, heating, air conditioning, television, radio, music, cable antenna and related systems, switchboards, communications apparatus, intercom systems, accounting machines, computers, cash registers, safes, vaults, facilities used to provide any utility services, refrigeration, ventilation or other services on the Property, and other personal property of every kind and character now or hereafter located in, or upon, or attached or appurtenant to, affixed to, or used or intended to be used in connection with, the operation, occupancy, development, or improvement of the Property, or any structures or improvements thereon, whether now existing or hereafter erected, all of which are declared to be real property;

3. Use of the Property;

4. All of Trustor’s right, title, and interest in and to all gas, oil, water, and mineral rights now or hereafter derived from, appurtenant to, or pertaining to the Property (and any and all shares of stock evidencing the same and profits relating thereto) and all air rights and development rights or credits relating to the Property;

5. All causes of action, claims and proceeds relating to or arising on account of any damage to or condemnation or other taking of the Property or any improvements thereon or any part


thereof, or for conveyance in lieu of condemnation, including without limitation insurance proceeds or condemnation or public improvement proceeding awards, or compensation which Trustor now has or may hereafter acquire with respect to the Property or any improvements thereon or any part thereof;

6. All rights to the payment of money and all refundable, returnable, or reimbursable fees, deposits, or other funds or evidences of credit or indebtedness deposited by or on behalf of Trustor with any governmental agency or other person, including but not limited to all refundable, returnable, or reimbursable tap fees, utility deposits, commitment fees, earnest money or escrow deposits and development costs, as well as any collateral securing the payment or receipt of any of the property described in this subsection;

7. All use, occupancy, construction, and building permits and all other permits and approvals issued or required by any governmental agency;

8. All contracts and agreements, including but not limited to sales contracts; contracts for deed; option contracts; right of first refusal agreements; permanent commitments; disposition and development agreements, subject to the terms thereof; architect, engineer, and other professional service contracts; tax service contracts; cleaning, maintenance, and other service contracts; management contracts; utility contracts; cable television, security and fire protection contracts; and any collateral securing any third party’s performance under any of the contracts or agreements described in this subsection;

9. All trademarks and all trade names and other names under which the Property is now or hereafter known and all rights to carry on business under any such names or any variant thereof;

10. All goodwill relating to the Property and/or the development, construction, use, occupancy, or operation thereof;

11. All insurance commitments and policies and insurance proceeds and condemnation awards;

12. Trustor’s interest in the Plans (hereinafter defined), together with any and all (a) accessions, accessories, additions, alterations, attachments, betterments, replacements, and substitutions of or to any of the foregoing; (b) amendments, supplements, modifications, renewals, extensions, restatements, reinstatements, rearrangements, enlargements, or replacements of or to any or all of the foregoing; and (c) all proceeds and products of any or all of the foregoing, including but not limited to all monies, deposit accounts, insurance proceeds, and other tangible or intangible property received upon a sale or other disposition of any or all of the foregoing; “Plans” means any and all plans, specifications, shop drawings, and other technical descriptions prepared for development, construction, reconstruction, restoration, decoration, repair, or replacement of the


Improvements as approved by Beneficiary pursuant to that certain Affordable Housing Loan Agreement between Trustor and Beneficiary (including all addenda thereto) dated as of January 15, 2008 (the “Loan Agreement”);

13. All proceeds of all present and future fire, hazard, or casualty insurance policies and all condemnation awards or payments in lieu thereof made by any public body, or decreed by any court, for a taking or for degradation of value in any condemnation or eminent domain proceedings, and all causes of action and the proceeds thereof for any damage or injury to the Property and improvements thereon or any part thereof, including, but not limited to, causes of action arising in tort or contract and causes of action for fraud or concealment of a material fact; and

14. All right, title, and interest now or hereafter acquired by Trustor in and to any greater estate in the Property as set forth below.

All of the foregoing, whether now owned or hereafter acquired, shall be deemed to be and shall remain a part of the Property encumbered by this Deed of Trust, and all of the foregoing, together with the Property, are hereinafter referred to as the “Premises”.

FOR THE PURPOSE OF SECURING, in such order of priority as Beneficiary in its absolute discretion, may determine (collectively, the “Indebtedness”):

1. Due, prompt, and complete, payment, observance, performance, and discharge of Trustor’s obligations under that certain Promissory Note, secured by this Deed of Trust, of even date herewith, executed by Trustor in favor of Beneficiary (the “Promissory Note”), in the original principal amount of One Hundred Fifty Nine Thousand Dollars ($159,000.00) (the “Loan”), which Promissory Note provides for, among other things, an extension of credit, together with the obligation to pay interest, costs, expenses and other sums, all as provided therein;

2. Payment of any other sums, with interest as herein provided, becoming due or payable to Trustee or Beneficiary under the provisions of this Deed of Trust;

3. Due, prompt, and complete payment, observance, performance, and discharge of each and every condition, obligation, covenant, and agreement contained in this Deed of Trust, the Loan Agreement and the following instruments and agreements executed by Trustor in favor of Beneficiary, dated on or about the date hereof: the Promissory Note, the Agreement Containing Covenants (Including Rental Restrictions) (the “Covenants”), or in any document or instrument supplementing, modifying, or amending any of the same, or otherwise evidencing, securing, or pertaining to the Indebtedness and obligations evidenced thereby; and

4. Payment of such additional sums (with interest thereon) as may hereafter be borrowed from Beneficiary, or its successors or assigns, by Trustor or the then record owner of the Premises


and evidenced by the Promissory Note or any other promissory note, security agreement, or other document, and discharge and performance of such other obligations and guarantees of Trustor or the then record owner, which documents or obligations by their terms are secured by this Deed of Trust, and all modifications, amendments, extensions, and renewals thereof.

TO PROTECT AND MAINTAIN THE SECURITY OF THIS DEED OF TRUST, TRUSTOR AGREES: Section 1 PAYMENT OF OBLIGATIONS WHEN DUE

Trustor shall promptly pay, when due and in lawful money of the United States of America which shall be legal tender for public and private debts at the time of payment, each and every Indebtedness, and shall promptly perform each obligation for which this Deed of Trust has been given as security as provided above; and Trustor shall promptly perform, observe, and discharge each and every condition, obligation, covenant, and agreement for which this Deed of Trust has been given as security as provided above. Section 2 GENERAL REPRESENTATIONS, COVENANTS, AND WARRANTIES

Trustor represents, warrants, and covenants that:

2.1 Trustor is seized of an indefeasible estate in fee simple in, and has good, absolute, and marketable title to the Property, and Trustor is the owner of the Premises, subject only to the rights of others provided in the documents and instruments approved in writing by Beneficiary in its sole discretion. Trustor has good right, full power, and lawful authority to mortgage and pledge its interests as provided herein, and Beneficiary may at all times peaceably and quietly enter upon, hold, occupy and enjoy the Premises in accordance with the terms hereof;

2.2 The Premises are free and clear of all liens, security interests, charges, encumbrances, and encroachments whatsoever except for the first priority liens deeds of trust in favor of Citibank Bank, the State of California Multifamily Housing Program, the County of Santa Barbara HOME Consortium, and Los Padres National Bank (Affordable Housing Program), recorded on or about the date hereof (the “Senior Encumbrance”), and encumbrances approved in writing by Beneficiary in its sole discretion;

2.3 Trustor will maintain and preserve the priority of this Deed of Trust until the Indebtedness, no matter how evidenced, and other sums secured hereby, have been paid in full;

2.4 Trustor will provide to Beneficiary, on or before November 1st of each calendar year


during which there is any outstanding Indebtedness, financial statements for Trustor individually, including without limitation statements of profit and loss and balance sheets for the applicable calendar year, prepared in accordance with generally accepted accounting principles, consistently applied, together with any and all necessary schedules and exhibits thereto;

2.5 Trustor is now able to meet its debts as they mature, the fair market value of its assets exceeds its liabilities and no bankruptcy or insolvency proceedings are pending or contemplated by or against Trustor;

2.6 Trustor hereby unconditionally restates and incorporates by this reference each and every representation and warranty contained in the Loan Agreement, as if each were set forth in full herein;

2.7 Trustor has and will maintain in full force and effect all licenses, permits, and approvals and shall comply with all federal, state, and local statutes, ordinances, rules and other regulations, as required from time to time by any federal, state, or local governmental agency, department, board, or other authority in connection with the operation and use of any portion of the Premises;

2.8 All reports, statements, and other data furnished by Trustor to Beneficiary in connection with the Indebtedness or Premises are true, correct, and complete in all material respects as of their respective dates and do not omit to state any fact or circumstance necessary to make the statements contained therein not misleading;

2.9 This Deed of Trust, the Promissory Note and the Covenants and any other documents and instruments evidencing or securing the Indebtedness, or otherwise executed in connection therewith, are valid and binding obligations, enforceable in accordance with their respective terms, and the execution and delivery thereof do not contravene any contract or agreement to which Trustor is a party or by which Trustor or any of its respective properties may be bound, and do not contravene any law, order, decree, rule, or regulation to which Trustor is subject;

2.10 All costs arising from construction of any improvements or from the purchase of all equipment located on the Property have been paid;

2.11 The Property has frontage on, and direct access for ingress and egress to, the street(s) contiguous thereto, and electric, gas, sewer, and water facilities and any other necessary utilities are, and at all times hereafter shall be, available in sufficient capacity to service the Premises satisfactorily, and any easements necessary to the furnishing of such utility service to Trustor have been obtained and duly recorded;

2.12 The Property is comprised of one or more legally subdivided lots pursuant to the


Subdivision Map Act;

2.13 Trustor is not in default under the terms of any instrument evidencing or securing any indebtedness of Trustor, and there has occurred no event which would, if uncured or uncorrected, with the giving of notice, passage of time or both, constitute a default under any such instrument;

2.14 All payments, accounts and other obligations of every nature whatsoever with respect to or relating to the Premises are current and are not in default, and there has occurred no event which would, if uncured or uncorrected, with the giving of notice, passage of time, or both, constitute a default with respect thereto;

2.15 To the best of Trustor’s knowledge, the improvements on the Property and the use and occupancy thereof comply with all applicable federal, state, and local laws, ordinances, rules, codes, regulations, and restrictions including, without limitation, building, zoning, platting, land use, and environmental laws, ordinances, and regulations, and all necessary governmental permits and approvals with respect to the use and occupancy of the Premises;

2.16 To the best of Trustor’s knowledge, the Premises, including the soil and the groundwater under the Premises, currently are not in violation of any Hazardous Materials Law, which as used herein refers to the collective federal, state, and local regulations, ordinances and laws relating to environmental conditions, industrial hygiene or Hazardous Materials including but not limited to, the Resource Conservation and Recovery Act of 1976 (RCRA), 42 USC §§ 6901 et seq., the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA), 42 USC §§ 9601 - 9657, as amended by the Superfund Amendments and Reauthorization Act of 1986 (SARA), the Hazardous Materials Transportation Act, 49 USC §§ 690 et seq., the Federal Water Pollution Control Act, 33 USC §§ 1251 et seq., the Clean Air Act, 42 USC §§ 741 et seq., the Clean Water Act, 33 USC §§ 7401, the Toxic Substances Control Act, 15 USC § 2601 - 2629, the Safe Drinking Water Act, 42 USC §§ 300f - 300j, and all applicable State, County and local laws, rules and regulations pertaining to Hazardous Materials, all as amended, and all similar federal, state, and local environmental statutes, ordinances, and the regulations, orders, and decrees now or hereafter promulgated thereunder. Hazardous Materials as used herein shall include, without limitation, asbestos or any substance containing asbestos and deemed hazardous under any Hazardous Materials Law, the group of organic compounds known as polychlorinated biphenyls, flammable explosives, radioactive materials, chemicals known to cause cancer or reproductive toxicity, pollutants, effluents, contaminants, emissions, or related materials in any items included in the definition of hazardous or toxic waste, materials or substances (but not including items used as ordinary household items, e.g., paint, provided same does not violate any Hazardous Material Law); any oil or petrochemical products, PCBs, ureaformaldehyde, flammable explosives, radioactive materials, or any substance, product, waste, or other material of any kind or nature whatsoever that may give rise to liability under any federal, state, or local regulation, ordinance, or law or under statutory or common law theory based on negligence, trespass, intentional tort, nuisance, or strict


liability, or under any reported decision of a state or federal court;

2.17 Except for Hazardous Materials used in the ordinary course of construction and in compliance with applicable Hazardous Materials Laws, Trustor has not and will not use, install, generate, manufacture, treat, refine, handle, produce, process, store, or dispose of, in, on, or under the Premises or transported to or from the Premises, any Hazardous Materials, which would result in a violation of any Hazardous Materials Law or the presence of any Hazardous Materials in, on, or under the Premises, including the soil and the groundwater under the Premises, and Trustor is not currently engaged in same. In addition, no third party has or will use, install, generate, manufacture, treat, refine, handle, produce, process, store, or dispose of in, on, or under the Premises, or transported to or from the Premises, any Hazardous Materials, which would result in a violation of any Hazardous Materials Law or the presence of any Hazardous Materials in, on, or under the Premises, including the soil or the groundwater under the Premises;

2.18 Trustor shall undertake no activity in, on, or under the Premises that would cause a violation or support a claim under any Hazardous Materials Law, and no underground storage tanks or underground deposits shall be located on the Property;

2.19 Trustor shall immediately advise Beneficiary in writing of (1) any governmental or regulatory actions instituted or threatened under any Hazardous Material Law affecting the Premises, (2) all claims made or threatened by any third party against Trustor or the Premises relating to damage, contribution, cost recovery, compensation, loss or injury resulting from any Hazardous Material, (3) the discovery of any occurrence or condition on any real property adjoining or in the vicinity of the Premises that could cause the Premises to be classified in a manner that may support a claim under any Hazardous Materials Law, and (4) the discovery of any occurrence or condition in, on, or under the Premises or any real property adjoining or in the vicinity of the Premises that could subject Trustor or the Premises to any restrictions on ownership, occupancy, transferability, or use of the Premises under any Hazardous Materials Law. Beneficiary may elect to join and participate in any settlements, remedial actions, legal proceedings, or other actions initiated in connection with any claims under any Hazardous Materials Law and to have its reasonable attorneys fees paid by Trustor. At its sole cost and expense, Trustor agrees when applicable or upon request of Beneficiary to promptly and completely cure and remedy every violation of any Hazardous Materials Law caused by Trustor or existing on or because of the Premises and to promptly remove all Hazardous Materials in, on, or under the Premises and to dispose of the same as required by any Hazardous Materials Law or by Beneficiary;

2.20 Without the prior written consent of Beneficiary, Trustor will not seek, make, or consent to any change in the zoning or conditions of use of the Property. Trustor will comply with and make all payments required under the provisions of any covenants, conditions, or restrictions affecting the Property. Trustor will comply with all existing and future requirements of all governmental authorities having jurisdiction over the Property;


2.21 Trustor will keep adequate books and records of account pertaining to the Premises

and its own financial affairs sufficient to permit the preparation of financial statements therefrom in accordance with generally accepted accounting principles. Following reasonable notice to Trustor, Beneficiary shall have the right to examine, copy, and audit Trustor’s records and books of account at all reasonable times; and

2.22 Trustor will promptly furnish, upon Beneficiary’s reasonable request, a duly acknowledged written statement setting forth all amounts due on the Indebtedness secured by this Deed of Trust and stating whether any offsets or defenses exist, and containing such other matters as Beneficiary may reasonably require. Section 3 MAINTENANCE OF PREMISES

Trustor shall:

3.1 Maintain and keep the Premises in good condition and repair and shall not commit or permit waste of the whole or part or any material item consisting of a part of the Premises;

3.2 Not alter, remove, or demolish any buildings, improvements, appliances, or fixtures now or hereafter on the Property without the prior written consent of Beneficiary; provided, however, Trustor may construct the improvements as required by the Loan Agreement;

3.3 Promptly repair, replace, or restore in a good, workmanlike manner and in compliance with all laws, ordinances, governmental rules and regulations, easements, agreements, covenants, conditions, and restrictions affecting the Premises, all buildings, improvements, appliances, and fixtures now or hereafter on the Property in the event of damage to or destruction of same;

3.4 Not commit, suffer, or permit any act upon the Premises in violation of any easements, agreements, covenants, conditions, and restrictions affecting the Premises or the use of the Premises, or any laws, ordinances, governmental rules and regulations, relating to zoning, building, occupational safety and health, industrial hygiene, Hazardous Materials, or to the environmental conditions on, under, or about the Premises, including but not limited to soil and groundwater conditions;

3.5 Not permit the Premises or any portion thereof to be a site for the use, generation, manufacture, storage, disposal or transportation of any Hazardous Materials (not including those used for ordinary household purposes); not take any remedial action in response to the presence of any Hazardous Materials in the Premises or on or under the Property, including the soil and


groundwater (other than in emergency situations), nor enter into any settlement agreement, consent decree or other compromise with respect to any claim arising out of or relating to Hazardous Materials in the Premises or on or under the Property, without Beneficiary’s prior written consent. In the event of an emergency situation involving the presence of any Hazardous Materials on or under the Property which in Trustor’s reasonable opinion threatens immediate injury to any person or personal property on or adjacent to the Property, Trustor may take such remedial action as Trustor reasonably deems necessary, and shall notify Beneficiary as promptly thereafter as possible;

3.6 Cause all tenants, employees, agents, contractors, and subcontractors of Trustor and any other persons occupying or present on the Premises to comply with all Hazardous Materials Laws applicable to the use, generation, handling, storage, treatment, transport, and disposal of any Hazardous Materials now or hereafter located or present on or under the Premises;

3.7 Perform in a timely and proper manner any and all other acts which from the character or use of the Premises are reasonably necessary to protect and preserve the security of this Deed of Trust; and

3.8 Promptly pay when due all expenses incurred pursuant to this Section 3, or otherwise relating to the Premises, and promptly pay, discharge, or otherwise release all claims for labor performed on, and materials furnished to, the Premises. Section 4 INSURANCE

4.1 Policies Required. While any obligation of Trustor under the Promissory Note or this Deed of Trust remains outstanding, Trustor shall procure and maintain, or shall cause to be procured and maintained, continuously in effect policies of insurance in form and amounts and issued by companies, associations, or organizations satisfactory to Beneficiary (but in any event rated Best’s A or higher), covering such casualties, risks, perils, liabilities, and other hazards required by Beneficiary. All original policies, or certificates thereof, and endorsements and renewals thereof shall be delivered to and retained by Beneficiary unless Beneficiary waives this requirement in writing. All policies shall expressly protect or recognize Beneficiary’s interest as required by Beneficiary. Without limiting the generality of the foregoing, Trustor shall provide or cause to be provided the following types of insurance coverage:

1. Until repayment of the Indebtedness and satisfaction of all obligations under the Promissory Note and this Deed of Trust (a) property insurance on an “all risks” cost basis, including without limitation, coverage against fire, theft, vandalism, mysterious disappearance, and builder’s risk in an amount equal to the replacement cost of the physical value of the Premises and the personal property, fixtures, and equipment attached thereto or located thereon, naming Beneficiary as mortgagee under a standard form mortgagee clause or as an additional insured; (b)


loss of earnings insurance, in an amount satisfactory to Beneficiary (and, if applicable, rental interruption insurance, in an amount equal to at least twelve (12) months rental income); (c) commercial general liability insurance, in a minimum amount of One Million Dollars ($1,000,000.00) per occurrence on a claims made basis; (d) boiler and machinery insurance covering all pressure vessels, air tanks, boilers, machinery, and elevator equipment (provided the Premises contain equipment of such description), and insurance against loss of occupancy or use arising from any such breakdown, in amounts satisfactory to Beneficiary; and (e) workers’ compensation insurance, covering employees of Trustor employed at the Premises, in amounts required by law and customarily carried by employers similarly situated; and

2. Such additional insurance as may be reasonably required by Beneficiary from time to time in the event that the Premises are exposed to hazards and risks with respect to which Beneficiary deems the existing insurance inadequate to properly protect its interests.

4.2 Lender’s Loss Payable. At Beneficiary’s option, all policies of insurance described in this Section 4 shall either have attached thereto a lender’s loss payable endorsement for the benefit of Beneficiary in form satisfactory to Beneficiary or shall name Beneficiary as an additional insured. Trustor shall furnish Beneficiary with an original, a certified copy of an original or a certificate of insurance of all policies of insurance required. All policies or certificates, as the case may be, of insurance shall set forth the coverage, the limits of liability, the name of the carrier, the policy number and the period of coverage. In addition, all policies of insurance required under the terms hereof shall contain an endorsement or agreement by the insurer that any loss shall be payable in accordance with the terms of such policy notwithstanding any act or negligence of Trustor or any party holding any beneficial interest which might otherwise result in a forfeiture of said insurance and the further agreement of the insurer waiving all rights of set off, counterclaim or deductions against Trustor. At least thirty (30) days prior to the expiration of each required policy, Trustor shall deliver to Beneficiary evidence of the renewal or replacement of such policy, continuing insurance in the form as required by this Agreement.

4.3 Renewal Provisions. All such insurance that is required to be maintained by Trustor shall (1) contain a provision that notwithstanding any contrary agreement between Trustor and the applicable insurance company, such policies will not be canceled, allowed to lapse without renewal, surrendered or materially amended (which provision shall include any reduction in the scope or limits of coverage) without at least twenty (20) days prior written notice to Beneficiary; (2) provide that Beneficiary may, but shall not be obligated to, make payments thereunder to prevent any cancellation, endorsement, or alteration of such policy; (3) except for workers’ compensation insurance, contain a standard mortgagee endorsement in favor of Beneficiary, and include an effective waiver by the issuer of all rights of subrogation against, Beneficiary, Trustee, any named insured or such insured’s interest in the Premises, or any income derived therefrom; (4) provide that all insurance proceeds, except for workers’ compensation, which shall be adjusted by Trustor, shall be adjusted by Beneficiary if permitted by applicable law or if not, by Trustor and Beneficiary


jointly; (e) provide that (except in the case of public liability and workers compensation insurance) insurance proceeds shall be payable directly and solely to Beneficiary, it being agreed by Trustor that subject to the provisions of Section 4.6 hereof, all such proceeds shall be applied either to the restoration, repair, or replacement of the Premises or toward the payment of the Loan; and (6) be reasonably satisfactory to Beneficiary in all other respects.

4.4 Appraisal. Until repayment of the Loan and satisfaction of all obligations under the Promissory Note and this Deed of Trust, Trustor shall also provide from time to time at the written request of Beneficiary, but not more often than once annually, satisfactory evidence of the insurable value of the Premises. Such evidence may be in the form of an insurance appraisal or report prepared by an insurance company, agent or broker, professional appraiser, architect, engineer, or contractor approved by Beneficiary. Trustor shall bear the cost, if any, of such insurance appraisal or valuation report.

4.5 Delivery of Proceeds to Beneficiary. In the event that, notwithstanding the lender’s loss payable endorsement requirement, the proceeds of any insurance policy described therein are paid to Trustor, Trustor shall deliver such proceeds to Beneficiary immediately upon receipt.

4.6 Restoration or Pay-Off Following Casualty. If any act or occurrence of any kind or nature, ordinary or extraordinary, foreseen or unforeseen (including any casualty for which insurance was not obtained or obtainable), shall result in damage to or loss or destruction of the Premises, Trustor shall give prompt notice thereof to Beneficiary and Trustor shall, at Trustor’s option, (1) pay to Beneficiary all Indebtedness then outstanding, pursuant to the Promissory Note, or (2) at Trustor’s sole cost and expense and regardless of whether the insurance proceeds (if any) shall be sufficient for the purpose, promptly commence and continue diligently to completion to restore, repair, replace, and rebuild the Project in accordance with the provisions of Section 4.7 hereof and all legal requirements as nearly as possible to its value, condition and character immediately prior to such damage, loss, or destruction. Trustor shall notify Beneficiary in writing of its election under this Section 4.6 within ten (10) business days following the date of such act or occurrence.

4.7 Acceleration Upon Destruction of Premises. Subject to the provisions of this Section 4, in the event the Premises are demolished, destroyed, or substantially damaged so that, in Beneficiary’s reasonable judgment, they cannot be restored or rebuilt to their former condition and character, and having at least the fair market value existing within one hundred and eighty (180) days prior to such damage, the Loan shall be accelerated as though an Event of Default hereunder had occurred, and the Loan will be due and payable within thirty (30) days of written notice to Trustor.

1. Notwithstanding anything herein to the contrary, the Beneficiary shall allow the use of such proceeds for the restoration of the Improvements and Chattels, provided the Beneficiary determines that the amount of such insurance proceeds shall be sufficient to complete


the restoration, or if the amount of such insurance proceeds shall be insufficient for completion of such restoration and the Trustor deposits with Beneficiary an amount equal to the difference between the Beneficiary’s estimated cost of restoration and the insurance proceeds.

2. The Trustor shall give the Beneficiary prompt written notice of damage to or destruction of the Improvements and Chattels or any part thereof and, unless the Indebtedness is paid in full to Beneficiary within thirty (30) days of the date of said damage or destruction, Trustor shall promptly commence and diligently continue to perform the repairs, restoration, and rebuilding of the portion of the Improvements and Chattels so damaged or destroyed (hereinafter the Work) so as to restore the Improvements and Chattels in full compliance with all legal requirements and so that the Mortgaged Property shall be at least equal in value and general utility as they were prior to such damage or destruction, and if such damage or destruction, in the reasonable judgment of the Beneficiary, shall exceed Fifty Thousand Dollars ($50,000) (hereinafter, collectively, Major Work), the Trustor shall, prior to the commencement of the Work, furnish to the Beneficiary for its approval: (a) complete plans and specifications for the Work, with satisfactory evidence of the approval thereof (i) by all governmental authorities whose approval is required and (ii) by an architect satisfactory to the Beneficiary (hereinafter the Architect) and which shall be accompanied by the Architect’s signed estimate, bearing the Architect’s seal, of the entire cost of completing the Work; (b) certified or photostatic copies of all permits and approvals required by law in connection with the commencement and conduct of the Work; and (c) a surety bond or guarantee of the payment for and completion of the Work, which bond or guarantee shall be in form satisfactory to Beneficiary and shall be signed by surety or sureties, or guarantor or guarantors, as the case may be, who are acceptable to the Beneficiary, and in an amount not less than the Architect’s estimate of the entire cost of completing the Work, less the amount of insurance proceeds, if any, then held by the Beneficiary for application toward the cost of the Work. The Trustor shall not commence any of the Work until the Trustor shall have complied with applicable requirements referred to in this subsection (2), and after commencing the Work the Trustor shall perform the Work diligently and in good faith in accordance with the plans and specifications referred to in this subsection (2), if applicable.

3. If the insurance proceeds, less the cost, if any, to the Beneficiary of such recovery and of paying out such proceeds (including reasonable attorney’s fees and costs allocable to inspecting the Work and the plans and specifications therefor) should be paid towards restoration of the Improvements and Chattels or if such insurance proceeds are applied toward such restoration, then such insurance proceeds shall be applied by the Beneficiary as follows:

i. To the payment of the cost of the Work and shall be paid out from time to time to the Trustor and/or, at the Beneficiary’s option exercised from time to time, directly to the contractor, subcontractors, materialmen, laborers, engineers, architects, and other persons rendering services or materials for the Work, as said Work progresses except as otherwise hereinafter provided, but subject to the following conditions, any of which the Beneficiary may freely waive:


A. If the Work to be done is Major Work, as determined by the

Beneficiary, the Architect shall be in charge of the Work;

B. Each request for payment shall be made on seven (7) days prior notice to the Beneficiary and shall be accompanied by a certificate of the Architect if one is required under subsection 2. above, otherwise by a certificate of an officer of the Trustor, stating (I) that all of the Work completed has been done in compliance with the approved plans and specifications, if any be required under said subsection 2., and in accordance with all provisions of law; (II) the sum requested is justly required to reimburse the Trustor for payments by the Trustor to, or is justly due to, the contractor, subcontractor, materialmen, laborers, engineers, architects or other persons rendering services or materials for the Work (giving a brief description of such services and materials), and that when added to all sums, if any, previously paid out by the Beneficiary does not exceed the value of the Work done to date of such certificate, and (III) that the amount of such proceeds and other deposits remaining in the hands of the Beneficiary will be sufficient on completion of the Work to pay for the same in full (giving in such reasonable detail as the Beneficiary may require an estimate of the cost of such completion);

C. Each request shall be accompanied by waivers of liens satisfactory to the Beneficiary covering that part of the Work previously paid for, if any, and by a search prepared by the title company that insured the lien of the Mortgage or by other evidence satisfactory to the Beneficiary, that there has not been filed with respect to the Mortgaged Property or any part thereof any mechanic’s lien or other lien or instrument for the retention of title in respect of any part of the Work not discharged of record and that there exist no encumbrances on or affecting the Mortgaged Property or any part thereof other than encumbrances, if any, existing as of the date hereof and that have been approved by the Beneficiary;

D. The request for any payment after the Work has been completed shall be accompanied by a copy of all certificates, permits, licenses, waivers, and/or other documents required by law to render occupancy of the Premises and/or Improvements legal; and

ii. Upon completion of the Work and payment in full therefor, or upon failure on the part of the Trustor to commence, as provided in Subsection (2), or diligently to continue the Work, or at any time upon request by the Trustor, the Beneficiary may apply the amount of any such proceeds then or thereafter in the hands of the Beneficiary to the payment of the Indebtedness, provided, however, that nothing herein contained shall prevent the Beneficiary from applying at any time the whole or any part of such proceeds to the curing of any default under this Mortgage or the Note.

4. If within one hundred and twenty (120) days after the occurrence of any damage or destruction to the Premises requiring Major Work in order to restore the Premises, the


Trustor shall not have submitted to the Beneficiary and received the Beneficiary’s approval of plans and specifications for the repair, restoration, and rebuilding of the Premises so damaged or destroyed (approved by the Architect and by all governmental authorities whose approval is required), or if, after such plans and specifications are approved by all such governmental authorities and the Beneficiary, the Trustor shall fail to commence promptly such repair, restoration, and rebuilding, or if thereafter the Trustor fails diligently to continue such repair, restoration, and rebuilding or is delinquent in the payment to mechanics, materialmen, or others of the cost incurred in connection with such Major Work, or, in the case of any damage or destruction not requiring Major Work, as determined by the Beneficiary, in order to restore the Premises, if the Trustor shall fail to repair, restore and rebuild promptly the Premises so damaged or destroyed then, in addition to all other rights herein set forth, and after giving the Trustor ten-days’ (10-days’) written notice of the nonfulfillment of one or more of the foregoing conditions, the Beneficiary, or any lawfully appointed receiver of the Premises, may at their respective options, perform or cause to be performed such repair, restoration, and rebuilding, and may take such other steps as they deem advisable to perform such repair, restoration, and rebuilding, and upon not less than twenty-four-hours’ (24-hours’) prior notice to the Trustor, the Beneficiary may enter upon the Premises to the extent reasonably necessary for any of the foregoing purposes. The Trustor hereby waives, for the Trustor and all others holding under the Trustor, any claim against the Beneficiary and such receiver arising out of anything done by the Beneficiary or such receiver pursuant hereto, and the Beneficiary may, at its option, apply insurance proceeds (without the need by the Beneficiary to fulfill any other requirements of this Mortgage) to reimburse the Beneficiary, and/or such receiver for all amounts expended or incurred by them, respectively, in connection with the performance of such Work, and any excess costs shall be paid by the Trustor to the Beneficiary upon demand. Section 5 INDEMNITIES

5.1 Nature of Indemnities. Trustor hereby agrees to and does indemnify and hold harmless, and agrees to defend Beneficiary, its officers, directors, agents, and employees (the Indemnitees), by counsel satisfactory to the Indemnitees, from and against:

1. Any and all claims, demands, lawsuits, damages (including all foreseeable and unforeseeable consequential damages), liabilities, fines, penalties, charges, administrative and judicial proceedings and orders, judgments, remedial action against requirements, enforcement actions of any kind and any other causes of action (collectively, Claims) asserted against any Indemnitee by any individual or entity, at any time prior to any foreclosure of the Property or the Premises by Beneficiary or any transfer of the Property or any portion thereof to Beneficiary in lieu of foreclosure, if said Claim directly or indirectly arises out of or is related to:

a. The Property or Trustor;


b. Hazardous Materials on the Property, including without limitation:

i. The presence of any Hazardous Material in, on, or under the Premises, including the groundwater and the soil under the Property;

ii. Any release or discharge of any Hazardous Material in, on or under the Premises, including the groundwater and the soil under the Property;

iii. Any activity carried on or undertaken on or off the Premises, whether prior to or during the term of the Promissory Note and whether by Trustor or any predecessor in title, or any employees, agents, contractors, or subcontractors of Trustor or any predecessor in title, or any third persons at any time occupying or present on the Premises, in connection with the handling, treatment, removal, storage, decontamination, clean-up, transport, or disposal of any Hazardous Material at any time located or present in, on, or under the Premises, including the groundwater and the soil under the Premises; and

iv. Any residual contamination in, on, or under the Premises, including the groundwater and the soil under the Premises, and any contamination of any property or natural resources arising in connection with the generation, use, handling, storage, transportation, or disposal of such Hazardous Materials in, on or under the Premises, irrespective of whether any such activities were or will be undertaken in accordance with any applicable Hazardous Materials Laws governing same;

c. Any act or omission of Trustor or any contractor, subcontractor, material supplier, engineer, architect, or other individual or entity engaged or employed by or on behalf of Trustor with respect to the Premises;

d. The payment of any commission, charge, or brokerage fee incurred in connection with the Promissory Note; or

e. Any claim or cause of action of any kind by any individual that would have the effect of denying Beneficiary the full benefit of protection of any provision of this Deed of Trust or the Promissory Note (excluding charges and assessments by any governmental agency imposed on Beneficiary in the normal course of Beneficiary’s business); and

2. Any and all liabilities, losses and any and all other costs and expenses (including, but not limited to court costs and reasonable attorneys’ fees) incurred by any Indemnitee as a result of any Claim described in this Section 5.

5.2 Indemnities as Agreement Pursuant to Statute. Without limiting the generality of this Section 5, the indemnification contained herein is intended to operate as an agreement pursuant to


Section 107(e) of CERCLA (42 USC § 9607(e)), to insure, protect, hold harmless, and indemnify the Indemnitees for, from, and against any liability pursuant to said statute. Section 6 PAYMENT OF TAXES, LIENS, AND ASSESSMENTS

Trustor shall pay and discharge, prior to the due date thereof, all liens and encumbrances, including, without limitation, any debt secured by a deed of trust or otherwise, ground rents, and other charges, together with interest and other costs as provided, affecting the Premises or any part thereof, whether such lien or encumbrance is senior or junior to the lien of this Deed of Trust. Section 7 LITIGATION, ETC.

7.1 Generally. Trustor shall promptly give written notice to Beneficiary of, and appear in and defend, at Trustor’s sole cost and expense, any action or proceeding affecting or purporting to affect Beneficiary’s interest in the Premises, the security of this Deed of Trust, or the rights and powers of Beneficiary and Trustee hereunder. Beneficiary and Trustee shall have the right to appear in and participate in all such proceedings at Trustor’s expense.

7.2 Hazardous Materials Claims. Without limiting the generality of the foregoing, without Beneficiary’s prior written consent, which consent shall not be unreasonably withheld, Trustor shall not take any remedial action in response to the presence of any Hazardous Materials on, under, or about the Premises, nor enter into any settlement agreement, consent decree, or other compromise with respect to any Hazardous Materials Claims, which remedial action, settlement, consent, or compromise might in Beneficiary’s reasonable judgment, impair the value of Beneficiary’s security hereunder; provided, however, that Beneficiary’s prior consent shall not be necessary in the event that the presence of Hazardous Materials on, or under, or about the Premises either poses an immediate threat to the health, safety or welfare of any individual or is of such a nature that an immediate remedial response is necessary and it is not possible to obtain Beneficiary’s consent before taking such action, provided that in such event Trustor shall notify Beneficiary as soon as practicable of any action so taken. Beneficiary agrees not to withhold its consent, where such consent is required hereunder, if either (1) a particular remedial action is ordered by a court of competent jurisdiction, or (2) Trustor establishes to the reasonable satisfaction of Beneficiary that there is no reasonable alternative to such remedial action that would result in less impairment of Beneficiary’s security hereunder. Section 8 PERFORMANCE OF OBLIGATIONS BY BENEFICIARY OR TRUSTEE

If Trustor fails to make any payment, perform any obligation or do any act set forth in or


secured by this Deed of Trust, then Beneficiary or Trustee may (at the request of Beneficiary), but without obligation to do so, without notice to or demand upon Trustor, and without releasing Trustor from making any such future payments, performing any such future obligations or doing any such future acts, make such payment, perform such obligation or do such act, in such manner and to such extent as Beneficiary or Trustee may reasonably deem necessary to protect the security of this Deed of Trust. Without limiting the foregoing, Beneficiary or Trustee may pay, purchase, contest, or compromise any encumbrance, charge, lien, claim, or debt that, in the sole judgment of Beneficiary or Trustee, appears to be prior or superior to this Deed of Trust or that may affect or appear to affect the security of this Deed of Trust, the interests of Beneficiary, or the rights, powers, and duties of Trustee or Beneficiary hereunder. Beneficiary, Trustee, and their agents, representatives, and workers, are authorized to enter the Premises or any part thereof at any reasonable time for the purpose of inspecting same, and for the purpose of performing any act authorized under this Deed of Trust. Section 9 CONDEMNATION

Any award of damages or other form of compensation awarded in connection with any condemnation for public use of, or injury to, the Premises or any part thereof are hereby assigned and shall be paid directly to Beneficiary, to be used, held, paid, applied, or released in the absolute discretion of Beneficiary and without regard to the adequacy of its security, in the same manner and with the same effect as provided herein for the disposition of insurance proceeds. In this regard, Trustor hereby waives the benefit of any statute, rule, or law that may be contrary thereto, and Trustor hereby agrees to execute such further assignments therefor as Beneficiary may require.


Section 10 GENERAL RIGHTS OF BENEFICIARY AND TRUSTEE

At any time and from time to time, without liability therefor, without notice and without affecting the liability of any person, including without limitation Trustor or any guarantor, for the payment or performance of any Indebtedness secured by this Deed of Trust or the lien of this Deed of Trust on the Premises or any portion thereof:

10.1 Beneficiary may (1) release any person liable for the payment of any Indebtedness; (2) extend the time or otherwise alter the terms of payment of any Indebtedness and make compositions or other arrangements with any debtor in relation thereto; (3) alter, substitute, increase, or release any portion of the Premises or any other collateral security securing any Indebtedness; and (4) grant such other indulgences as Beneficiary may determine in its sole discretion;

10.2 Trustee may, upon the written consent of Beneficiary (1) consent to the making of any map or plot of the Property; (2) join in granting any easements or creating any restrictions on the Property; and (3) join in any extension agreement or any agreement subordinating the lien or charge of this Deed of Trust.

10.3. 1. If any payment provided for herein or in the Promissory Note shall become overdue for a period in excess of fifteen (15) days, then, in addition to the remedies provided therefor in the Promissory Note, a late charge of four (4) cents for each dollar so overdue shall become immediately due to Beneficiary for the purpose of defraying the expenses incident to handling such delinquent payment, and such charge shall be deemed to be part of the Indebtedness and therefore secured by the lien of this Deed of Trust. Late charges shall be payable with the next installment of principal and/or interest due under the Promissory Note.

2. Trustor hereby authorizes Beneficiary to charge, after an Event of Default and/or any act or omission which, with notice, a passage of time, or both, would constitute an Event of Default, against any account of Trustor with Beneficiary, an amount equal to any amount from time to time due and payable to Beneficiary under the Promissory Note, this Deed of Trust and/or any other note or mortgage made by Trustor and held by Beneficiary. Section 11 RECONVEYANCE OF DEED OF TRUST

Upon written request of Beneficiary stating that all Indebtedness secured by this Deed of Trust has been paid or performed and upon surrender of this Deed of Trust and the documents evidencing such Indebtedness to Trustee for cancellation and retention, and upon payment to Trustee of its fees, costs, and expenses incurred or to be incurred thereby, Trustee shall reconvey, without


warranty, the Premises then held hereunder. The recitals in such reconveyance of any matters or facts shall be conclusive proof of the truthfulness thereof. The grantee in such reconveyance may be described as the person or persons legally entitled thereto. Section 12 DEFAULT; SALE BY TRUSTEE OF THE PREMISES

12.1 Event of Default. The following shall constitute a Default or Event of Default under this Deed of Trust:

a. Trustor’s failure to make any payment required by the Promissory Note or otherwise with respect to the Indebtedness secured by this Deed of Trust within ten (10) days after the date on which any such payment is due; or (ii) Trustor’s failure to pay all of the Indebtedness on or before the Maturity Date, as defined in the Promissory Note;

b. A default beyond any applicable notice and cure periods or an Event of Default shall occur under and as defined in any document, agreement, or instrument between Trustor and Beneficiary, including but not limited to the Promissory Note, the Loan Agreement (including all addenda thereto), and this Deed of Trust;

c. Any representation made herein or in any other document given in connection herewith or referred to herein shall prove to be untrue in any material respect;

d. Trustor (regardless of the pendency of any bankruptcy, reorganization, receivership, insolvency, or other proceedings, at law, in equity, or before any administrative tribunal which has prevented or might have the effect of preventing Trustor from complying with the terms of this Deed of Trust) shall fail to observe or perform any of Trustor’s covenants, agreements, or obligations under this Deed of Trust within thirty (30) days after notice from Beneficiary, provided however, that if, in Beneficiary’s reasonable judgment, said failure to comply is not capable of being cured within said thirty-day (30-day) period and is not curable by the payment of money, then Trustor shall have such additional time as Beneficiary deems necessary to cure such failure, provided that (i) Trustor immediately proceeds to commence curing said failure to comply upon receipt of notice of said failure from Beneficiary; (ii) in the judgment of Beneficiary, Trustor thereafter diligently and continuously proceeds to cure said failure so as to cure said failure in the shortest time possible; (iii) such additional time to cure does not impair any rights and/or remedies of Beneficiary and will not adversely affect the completion of the Improvements by the completion date, as provided in the Loan Agreement; and (iv) Trustor furnishes to Beneficiary, upon demand of Beneficiary, such documents and information with respect to Trustor’s curing of said failure to comply, as Beneficiary may request;

e. Subject to the provisions of Section 14 hereof, Trustor sells, conveys,


transfers, leases, assigns, pledges, or further encumbers the Premises or the Rents and Profits of the Premises, or any part thereof without the prior written consent of Beneficiary;

f. If a default beyond applicable notice and cure periods, if any, shall occur under any deed of trust encumbering the Premises or any portion thereof, whether such deed of trust is prior or subordinate to the lien of this Deed of Trust, and without regard to whether the beneficiary under any such deed of trust shall have commenced a foreclosure action in connection with said deed of trust;

g. Trustor shall admit in writing its inability to, or shall fail generally or be generally unable to, pay its debts (including its payrolls) as such debts become due, or shall make a general assignment for the benefit of creditors; or Trustor shall file a voluntary petition in bankruptcy or a petition or answer seeking reorganization, to effect a plan or other arrangement with creditors or any other relief under the Bankruptcy Reform Act of 1978, as amended from time to time (the Bankruptcy Act) or under any other state or federal law relating to bankruptcy or reorganization granting relief to debtors, whether now or hereafter in effect, or shall file an answer admitting the jurisdiction of the court and the material allegations of any involuntary petition filed against Trustor pursuant to the Bankruptcy Act or any such other state or federal law; or any order or relief shall be entered against Trustor in any involuntary proceeding under the Bankruptcy Act or any such other state or federal law, or Trustor shall be adjudicated as a bankrupt, or shall make an assignment for the benefit of creditors, or shall apply for or consent to the appointment of any custodian, receiver, or trustee for all or any substantial part of Trustor’s property, or shall take any action to authorize any of the actions set forth above in this subsection; or an involuntary petition seeking any of the relief specified in this subparagraph g. shall be filed against Trustor and shall not be dismissed within ninety (90) days;

h. Trustor terminates or suspends its business conducted on the Premises, or permits an attachment or judicial seizure of any substantial part of its assets;

i. If final judgment for the payment of money shall be rendered against Trustor and Trustor shall not discharge the same or cause it to be discharged within ninety (90) days from the entry thereof, or shall not appeal using good faith and due diligence from the order, decree, or process upon which or pursuant to which said judgment was granted, based, or entered within thirty (30) days, and thereafter secure a stay of execution pending such appeal;

j. If Trustor shall have concealed, removed or permitted to be concealed or removed any substantial part of its property or assets with the intent to hinder, delay or defraud Beneficiary of any of its property and assets that may be fraudulent under any federal or state bankruptcy, fraudulent conveyance or similar law now or hereafter enacted, or if Trustor shall have made any transfer of any of its property or assets to or for the benefit of a creditor at a time when other creditors similarly situated have not been paid, or if Trustor shall have suffered or permitted to


be suffered, while insolvent, any creditor to obtain a lien upon any of its property or assets through legal proceedings or distraint that is not vacated within (30) days from the date of entry thereof;

k. If any guarantor defaults under or attempts to withdraw, cancel, or disclaim liability under the guarantee and/or any guarantee or guarantees or indemnity given to Beneficiary in connection with the Loan;

l. If any general or limited partnership interest of Trustor shall be sold, assigned, transferred, conveyed, mortgaged, pledged, hypothecated, or alienated without the prior written consent of Beneficiary; or

m. The assertion or creation by any federal, state, or local department, regulatory body, or other agency of a lien upon any portion or all of the Premises by reason of the presence of any Hazardous Materials thereon or any violation of any Hazardous Materials Law affecting the Premises and such assertion or lien is not rescinded or removed within thirty (30) days.

12.2 Remedies Upon Default. Upon any such Default, Beneficiary may without notice or demand take such action as it deems necessary or advisable to protect and enforce its rights and remedies hereunder, at such time and in such order as Beneficiary may determine in its sole discretion, without impairing or otherwise affecting any rights and remedies of Beneficiary, including without limitation the following: (1) declare all Indebtedness secured by this Deed of Trust immediately due and payable; (2) execute and record (or cause Trustee to execute and record) a notice of default and election to cause the Premises to be sold to satisfy the Indebtedness secured hereby; (3) commence an action to foreclose this Deed of Trust and otherwise enforce and protect its security hereunder; and/or (4) take any other actions permitted by law or equity to enforce its rights and remedies hereunder, as it may deem appropriate in its sole discretion. With respect to the foregoing:

1. If required by Trustee or applicable law, Beneficiary shall, upon the recordation of such notice of default, deposit this Deed of Trust and all documents evidencing the Indebtedness with Trustee;

2. After the lapse of such time as may then be required by law following the recordation of the notice of default, and after the notice of the sale of the Premises has been given by Trustee as then required by law, Trustee (without demand on Trustor) shall sell the Premises at the time and place fixed in such notice of sale, either as a whole or in separate parcels, and in such order as Beneficiary may determine in its sole discretion, at public auction to the highest bidder for cash in lawful money of the United States of America, payable at the time of sale. Trustee may postpone the sale of all or any portion of the Premises 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 and place fixed by the preceding postponement;


3. Trustee shall deliver to the purchaser a deed conveying the Premises (or such

portion thereof) 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 Trustee or Beneficiary, may purchase at such sale;

4. Upon such sale by Trustee, and after deducting all costs, expenses, and fees of Trustee and of this trust, or incident to the enforcement of any right or remedy, or as otherwise provided hereunder, including, without limitation, the cost of evidence of title in connection with any sale, and attorneys’ fees and court costs, Trustee shall apply the proceeds from the sale to the payment of (a) the Indebtedness secured by this Deed of Trust, including without limitation all expenditures made and incurred by Beneficiary or Trustee under this Deed of Trust, or under any other document evidencing or securing any Indebtedness secured hereby, together with accrued interest thereon at the highest rate of interest then payable under the documents or instruments evidencing the Indebtedness; and (b) the remainder, if any, to the person or persons legally entitled thereto;

5. Upon a Default, Beneficiary shall be entitled to have a court immediately appoint a receiver for all or any portion of the Premises and Trustor hereby expressly consents to the appointment of such receiver. Any such appointment may be made either before or after sale, with such notice, if any, as may be required by court rule or proceeding, and without regard to the solvency or insolvency at the time of application for such receiver of the person or persons, if any, liable for the payment of the Indebtedness secured hereby, and without regard to the then value of the Premises, and without bond being required of the applicant. Such receiver shall have the power to take possession, control, and care of all or any portion of the Premises and to collect the rents and profits of the Premises and, in case of a sale and a deficiency, during the full statutory period of redemption, as well as during any further times when Trustor, its heirs, administrators, executors, successors or assigns, except for the intervention of such receiver, would be entitled to collect such rents, issues, and profits, and all other powers that may be necessary or are useful in such cases for the protection, possession, control, management, and operation of the Premises during the whole of said period. To the extent permitted by law, the receiver may be authorized by the court to extend or modify any then existing leases and to make new leases, which extensions, modifications, and new leases may provide for terms to expire, or for options to lessees to extend or renew terms to expire, beyond the maturity date of the Indebtedness secured hereunder. It is understood and agreed that any such leases and the options or other such provisions authorized by such receiver shall be binding upon Trustor and upon all persons whose interests in the Premises are subject to the lien hereof, and upon the purchaser or purchasers from sale, discharge of the Indebtedness secured hereby, satisfaction of any foreclosure decree, or issuance of any certificate of sale or deed to any purchaser; and

6. Trustor and Trustee acknowledge and agree that some or all of any personal


property collateral for the Indebtedness may at Beneficiary’s sole election be included in the grant of security under this Deed of Trust and sold pursuant to the power of sale hereunder. Trustor further agrees that any proceeds received by Beneficiary from the disposition of any such personal property collateral shall not operate or be deemed a cure of any Default under this Deed of Trust, and such proceeds as may be applied to the Indebtedness in such order or manner as Beneficiary may determine in its sole and absolute discretion, including, without limitation, in inverse order of maturity. Section 13 PAYMENTS

13.1 Payment of Costs and Expenses. Trustor shall immediately reimburse Beneficiary and Trustee for all reasonable costs and expenses that Beneficiary and Trustee may incur by reason of, or arising out of, or in connection with (1) any Default; (2) any action or proceeding in which Beneficiary or Trustee may appear or commence to protect, preserve, exercise, or enforce their rights, remedies, or security interests under this Deed of Trust, or under any document or instrument evidencing the Indebtedness secured by this Deed of Trust, or which otherwise relates to the Premises, including all appeals therefrom; (3) the performance of any act authorized or permitted hereunder; and (4) the exercise of any other rights or remedies under this Deed of Trust, or under any document or instrument evidencing the Indebtedness secured by this Deed of Trust, or otherwise relating, to the protection of Beneficiary’s or Trustee’s rights and interest hereunder or under any document or instrument evidencing the Indebtedness secured hereby, whether or not a suit or proceeding is instituted. Such reasonable costs and expenses shall include without limitation the fees, charges, and expenses of attorneys, engineers, accountants, appraisers, expert witnesses, consultants and other professional assistants and advisors, costs and expenses of searching records, examining title and determining rights in, title to, or the value of, the Premises, or the boundaries thereof, including but not limited to title company charges, title insurance premiums, survey costs, publication costs, and other charges incident thereto, all whether or not a suit or proceeding is instituted. Trustor agrees to and shall pay, immediately and without demand, all sums so expended by Beneficiary or Trustee, together with interest from the date of expenditure, at the highest legal interest rate then payable under the documents and instruments evidencing the Indebtedness, all of which sums plus interest shall constitute additional indebtedness secured by this Deed of Trust.

13.2 Payment of Rent for Occupation of the Property. During the continuance of any Event of Default, and pending the exercise by Beneficiary of its right to exclude Trustor from all or any part of the Property, Trustor agrees to pay the fair and reasonable rental value for the occupancy of the Property, or any part thereof, by Trustor that is in its possession for such period, and upon default of any such payment, will vacate and surrender possession of the Property, or any part thereof, to Beneficiary or to a receiver, if any, and/or may be evicted by any summary action or proceeding for the recovery of possession of the Property for non-payment of rent, however designated.


Section 14 TRANSFER OR FURTHER ENCUMBRANCE OF THE PREMISES

14.1 Acceleration of Indebtedness. In the event of any sale, conveyance, transfer, lease, pledge, or further encumbrance of the Premises, or any interest in or any part of the Premises, or any further assignment of rents from the Premises without the prior written consent of Beneficiary, which consent shall be in Beneficiary’s sole and absolute discretion, then, at Beneficiary’s option, Beneficiary may declare the outstanding principal amount of the Indebtedness and the interest accrued thereon, and all other sums secured hereby, to be due and payable immediately, and upon such declaration such principal and interest and other sums shall immediately become and be due and payable without demand or notice.

14.2 Approval of Transferee. Beneficiary specifically reserves the right to condition its consent upon (by way of illustration but not of limitation) its approval of the financial or management ability of the purchaser, transferee, lessee, pledgee, or assignee, and upon an agreement to escalate, the interest payable on the Indebtedness to Beneficiary’s then current interest rate, and upon the assumption of the Indebtedness and of this Deed of Trust by the purchaser, transferee, lessee, pledgee, or assignee, and upon the receipt of guarantees of the Indebtedness satisfactory to Beneficiary, and upon payment to Beneficiary of a reasonable assumption fee and upon the execution of such further documents and instruments as Beneficiary may require.

14.3 Assumption of Indebtedness. Any purchaser, transferee, lessee, pledgee, or assignee shall be deemed to have assumed and agreed to pay the Indebtedness and perform any other obligation secured by this Deed of Trust, and to have assumed and agreed to be bound by the terms and conditions of this Deed of Trust, including the terms of this Section 14, unless Beneficiary specifically agrees in writing to the contrary. Trustor agrees that in the event the ownership of Trustor or any part thereof becomes vested in a person other than Trustor, Beneficiary may, without notice to Trustor, deal in any way with such successor or successors in interest with reference to this Deed of Trust and the Indebtedness hereby secured, without in any way vitiating or discharging Trustor’s liability hereunder or under the documents and instruments evidencing the Indebtedness secured hereby. No transfer or encumbrance of the Premises or any interest herein, and no forbearance or assumption by any person with respect to this Deed of Trust, and no extension to any person of the time for payment of the Indebtedness hereby secured, given by Beneficiary shall operate to release, discharge, modify, change, or affect the liability of Trustor either in whole or in part, unless Beneficiary specifically agrees thereto in writing. Section 15 ACCEPTANCE OF LATE AND PARTIAL PAYMENTS

The acceptance by Beneficiary of the payment of any sum secured by this Deed of Trust after


its due date shall not constitute a waiver of the right to require prompt payment or performance when due of all other and future sums and obligations so secured, or to declare a Default for any failure to so pay or perform, or to proceed with foreclosure or sale for any other Default then existing. The acceptance by Beneficiary of the payment of a portion of any sum, or of the partial performance of any other obligation secured by this Deed of Trust at such time that the same is due and/or payable in its entirety, shall neither cure nor excuse the Default caused by failure to pay the whole of such payment or otherwise fully perform such obligation, or affect any notice of default recorded prior to such acceptance, unless such notice of default is expressly revoked in writing by Beneficiary. Such acceptance shall not constitute a waiver of Beneficiary’s rights to require full payment or performance when due of all other and future Indebtedness secured by this Deed of Trust. Section 16 RELATIONSHIP OF BENEFICIARY

The Trustee hereby agrees for itself and its successors and assigns that so long as any obligations to Beneficiary are outstanding, the right of the Trustee and its respective successors and assigns to grant consents, and to grant waivers, to release all or any portion of the Collateral (as defined in Section 22 below), to send and receive notices, and to otherwise exercise any rights, powers, discretions, or remedies hereunder may be taken by Beneficiary acting alone, and Trustor is authorized to rely upon any approval, consent, direction, notice, waiver, release, or other action taken by Beneficiary pursuant to this Deed of Trust and the same shall be binding upon the Trustee, and its respective successors and assigns. Trustor agrees to comply with and to be bound by any approval, consent, direction, notice, waiver, release, or other action taken by Beneficiary pursuant to this Deed of Trust. The Trustee and its successors and assigns will execute any documents and take or refrain from taking all action that the Trustee and its successors and assigns are required or entitled to execute or take or refrain from taking hereunder in accordance with the request and instructions of Beneficiary, provided that Beneficiary shall pay (subject to Beneficiary’s right to reimbursement thereof as provided in this Deed of Trust) all costs and expenses incurred or to be incurred in connection therewith. Beneficiary shall not be liable for any act of the Trustee or any of its successors or assigns hereunder, unless taken at Beneficiary’s direction, or, in the case of an omission, not taken at Beneficiary’s request, and the Trustee and its successors and assigns shall not be liable for any act or omission of Beneficiary hereunder. Section 17 CONCERNING THE TRUSTEE

The following provisions shall apply to the Trustee:

17.1 Acceptance of Trust; Powers and Duties of Trustee. Trustee accepts this trust as of the date this Deed of Trust is made a public record as required by applicable law. From time to time upon written request of Beneficiary and presentation of this Deed of Trust for endorsement, and


without affecting the personal liability of any Person for payment of any indebtedness or performance of any obligation secured hereby, Trustee may, without liability therefor and without notice, (a) reconvey all or any part of the Property, (b) consent to the making of any map or plat thereof, and (c) join in any grant of easement thereon, any declaration of covenants and restrictions, any extension agreement or any agreement subordinating the lien or charge hereof. Trustee or Beneficiary may from time to time apply to any court of competent jurisdiction for aid and direction in the execution of the trusts hereunder and the enforcement of the rights and remedies available hereunder, and may obtain orders or decrees directing or confirming or approving acts in the execution of said trusts and the enforcement of said rights and remedies. Trustee has no obligation to notify any party of any pending sale or any action or proceeding (including but not limited to actions in which Trustor, Beneficiary, or Trustee shall be a party) unless held or commenced and maintained by Trustee under this Deed of Trust. Trustee shall not be obligated to perform any act required of it hereunder unless the performance of the act is requested in writing and Trustee is reasonably indemnified against loss, cost, liability, and expense.

17.2 Compensation; Exculpation; Indemnification. Trustor shall pay Trustee’s fees and reimburse Trustee for expenses in the administration of this trust, including reasonable attorney’s fees. Trustor shall pay to Beneficiary reasonable compensation for services rendered concerning this Deed of Trust, including without limitation any statement of amounts owing with respect to the Indebtedness. Beneficiary shall not directly or indirectly be liable to Trustor or any other Person as a consequence of (1) the exercise of the rights, remedies, or powers granted to Beneficiary in this Deed of Trust; (2) the failure or refusal of Beneficiary to perform or discharge any obligation or liability of Trustor under any agreement related to the Property or under this Deed of Trust; or (3) any loss sustained by Trustor or any third party resulting from Beneficiary’s failure to lease the Property after a default or from any other act or omission of Beneficiary in managing the Property after a default unless the loss is caused by the willful misconduct or bad faith of Beneficiary and no such liability shall be asserted against or imposed upon Beneficiary, and all such liability is hereby expressly waived and released by Trustee. Trustor indemnifies Trustee and Beneficiary against, and holds them harmless from, all losses, damages, liabilities, claims, causes of action, judgments, court costs, reasonable attorneys’ fees and other legal expenses, cost of evidence of title, cost of evidence of value, and other expenses that either may suffer or incur (1) by reason of this Deed of Trust; or (2) by reason of execution of this trust or in performance of any act required or permitted hereunder by Law; or (3) as a result of any failure of Trustor to perform Trustor’s obligations; or (4) by reason of any alleged obligation or undertaking on Beneficiary’s part to perform or discharge any of the representations, warranties, conditions, covenants, or other obligations contained in any other document related to the Property, unless the subject act or omission (1) arises from or results from the gross negligence or willful misconduct of Beneficiary or Trustee, as the case may be, or the employees or agents of Beneficiary or Trustee, or (2) arises from or results from any other act or omission of Beneficiary or Trustee, as the case may be, or the employees or agents of Beneficiary or Trustee, to the extent it is not covered by any insurance policy required to be and actually carried by Trustor under the Loan Agreement. Trustor’s duty to indemnify Trustee and Beneficiary shall


survive the release and cancellation of the Indebtedness and the release and reconveyance or any partial release or reconveyance of this Deed of Trust.

17.3 No Required Action. Trustee shall not be required to take any action toward the execution and enforcement of the trust hereby created or to institute, appear in, or defend any action, suit, or other proceeding in connection therewith where in its opinion such action will be likely to involve it in expense or liability, unless requested so to do by a written instrument signed by Beneficiary and, if Trustee so requests, unless Trustee is tendered security and indemnity satisfactory to it against any and all costs, expense, and liability arising therefrom. Trustee shall not be responsible for the execution, acknowledgment, or validity of the Loan documents, or for the proper authorization thereof, or for the sufficiency of the lien and security interest purported to be created hereby, and makes no representation in respect thereof or in respect of the rights and remedies of Beneficiary.

17.4 Certain Rights. With the approval of Beneficiary, Trustee shall have the right to take any and all of the following actions: (1) to select, employ, and consult with counsel (who may be, but need not be, counsel for Beneficiary) upon any matters arising hereunder, including the preparation, execution, and interpretation of the Loan documents, and shall be fully protected in relying as to legal matters on the advice of counsel; (2) to execute any of the trusts and powers hereof and to perform any duty hereunder either directly or through its agents or attorneys; (3) to select and employ, in and about the execution of its duties hereunder, suitable accountants, engineers and other experts, agents, and attorneys-in-fact, either corporate or individual, not regularly in the employ of Trustee, and Trustee shall not be answerable for any act, default, or misconduct of any such accountant, engineer, or other expert, agent, or attorney-in-fact, if selected with reasonable care, or for any error of judgment or act done by Trustee in good faith, or be otherwise responsible or accountable under any circumstances whatsoever, except for Trustee’s gross negligence or willful misconduct; and (4) any and all other lawful action Beneficiary may instruct Trustee to take to protect or enforce Beneficiary’s rights hereunder. Trustee shall not be personally liable in case of entry by him, or anyone entering by virtue of the powers herein granted him, upon the Property for debts contracted or liability or damages incurred in the management or operation of the Property. Trustee shall have the right to rely on any instrument, document, or signature authorizing or supporting any action taken or proposed to be taken by it hereunder, believed to be in good faith and genuine.

17.5 Retention of Money. All moneys received by Trustee shall, until used or applied as herein provided, be held in trust for the purposes for which they were received; and Trustee shall be under no liability for interest on any moneys received by it hereunder.

17.6 Successor Trustees. Beneficiary may, from time to time, by instrument in writing, substitute a successor or successors to any Trustee named herein or acting hereunder. Such instrument, executed, acknowledged, and recorded in the manner required by law, shall be


conclusive proof of proper substitution of such successor Trustee or Trustees, who shall (without conveyance from the preceding Trustee) succeed to all of the title, estate, rights, powers, and duties of such preceding Trustee. Such instrument must contain the name of the original Trustor, Trustee, and Beneficiary hereunder, the book and page where this Deed of Trust is recorded, and the instrument number of this Deed of Trust and the name and address of the new Trustee. If a notice of default has been recorded, this power of substitution cannot be exercised until after the costs, fees, and expenses of the then acting Trustee have been paid to such Trustee, who shall endorse receipt thereof upon such instrument of substitution.

17.7 Perfection of Appointment. If any deed, conveyance, or instrument of any nature is required from Trustor by any successor Trustee to more fully and certainly vest in and confirm to such new Trustee such estates, rights, powers, and duties, then, upon request by such Trustee, any and all such deeds, conveyances, and instruments shall be made, executed, acknowledged, and delivered and shall be caused to be recorded and/or filed by Trustor.

17.8 Succession Instruments. Any new Trustee appointed pursuant to any of the provisions hereof shall, without any further act, deed, or conveyance, become vested with all the estates, properties, rights, powers, and trusts of its or his predecessor in the rights hereunder with like effect as if originally named as Trustee herein; but, nevertheless, upon the written request of Beneficiary or of the successor Trustee, the Trustee ceasing to act shall execute and deliver an instrument transferring to such successor Trustee, upon the trusts herein expressed, all the estates, properties, rights, powers, and trusts of the Trustee so ceasing to act, and shall duly assign, transfer, and deliver any of the property and moneys held by such Trustee to the successor Trustee.

17.9 No Representation by Trustee or Beneficiary. By accepting or approving anything required to be observed, performed, or fulfilled or to be given to Trustee or Beneficiary, pursuant to the Loan documents, including (but not limited to) any officer’s certificate, balance sheet, statement of profit and loss or other financial statement, survey, appraisal, or insurance policy, neither Trustee nor Beneficiary shall be deemed to have warranted, consented to, or affirmed the sufficiency, legality, effectiveness, or legal effect of the same, or of any term, provision, or condition thereof, and such acceptance or approval thereof shall not be or constitute any warranty or affirmation with respect thereto by Trustee or Beneficiary. Section 18 CUMULATIVE REMEDIES; ADDITIONAL SECURITY

No remedy herein conferred upon or reserved to the parties to this Deed of Trust is intended to be exclusive of any other remedy provided herein or by law. Each such remedy shall be cumulative and shall be in addition to every other remedy given hereunder, or now or hereafter existing, at law or in equity or by statute. No delay or omission of Trustee or Beneficiary in the exercise of any right or power, accruing upon any Default shall impair such right or power, or any


other right or power, nor shall such delay or omission be construed or deemed to be a waiver of any Default or any acquiescence therein. If Beneficiary at any time holds additional security for the Indebtedness or for the obligations secured by this Deed of Trust, Beneficiary, at its sole election and without limiting or affecting any of its rights or remedies hereunder or with respect to such other security, may exercise any of the rights and remedies to which Beneficiary may be entitled hereunder, either before, following, or concurrently with whatever rights or remedies Beneficiary may have in connection with such other security, and in such order and in such manner as Beneficiary may deem necessary or advisable in its sole discretion, without waiving any rights or remedies with respect to any other security hereunder. Section 19 PARTIAL INVALIDITY OF THIS DEED OF TRUST

In the event any one or more of the provisions of this Deed of Trust or of any other document evidencing the Indebtedness secured hereby shall for any reason be held to be invalid, illegal, and/or unenforceable in any respect, such invalidity, illegality, and/or unenforceability shall not affect any other provision of this Deed of Trust, or of any such other document, and such other provisions shall remain binding and enforceable, and shall continue in full force and effect. Section 20 WAIVER OF MARSHALLING, ETC.

Notwithstanding anything herein to the contrary, Trustor will not (1) at any time insist upon, or plead, or in any manner claim or take any benefit or advantage of any stay or extension or moratorium law, any exemption from execution or sale of the Premises or any part thereof, whenever or wherever enacted, which may affect the covenants, terms, or performance of this Deed of Trust; (2) claim, take or insist upon any benefit or advantage of any law now or hereafter in force providing for the valuation or appraisal of the Premises, or any part thereof, prior to any sale or sales thereof which may be made pursuant to any provision herein, or pursuant to the decree, judgment, or order of any court of competent jurisdiction; or (3) after any such sale or sales, claim or exercise any right under any statute heretofore or hereafter enacted to redeem the property so sold or any part thereof. Additionally, Trustor hereby expressly and irrevocably waives all benefit or advantage of any such law or laws. Trustor, for itself and its successors, assigns, heirs, and representatives, waives, to the extent that it lawfully may, all right to have the Premises marshaled upon any foreclosure hereof. Beneficiary shall have the right to determine the order in which any or all portions of the Indebtedness are to be satisfied from the proceeds realized upon the exercise of the remedies provided herein. Trustor, any party who consents to this Deed of Trust, and any party who now or hereafter acquires a lien or security interest in any of the Premises and who has actual or constructive notice hereof, hereby waives any and all right to require the marshaling of assets in connection with the exercise of any of the remedies permitted by applicable law or provided for herein.


Section 21 GOVERNING LAW

This Deed of Trust is to be construed, enforced, interpreted, and governed in accordance with the laws of the State of California. No act of Beneficiary shall be construed as an election to proceed under any one provision of this Deed of Trust or of the applicable statutes of the State of California to the exclusion of any other such provision, anything herein or otherwise to the contrary notwithstanding. Section 22 GRANT OF SECURITY INTEREST IN PERSONALTY AND FIXTURES

22.1 Security Interest. As additional security for the obligations and the Indebtedness secured by this Deed of Trust, Trustor hereby grants to Beneficiary a security interest in and to the following items (collectively, Collateral), but only to the extent that Trustor now has or hereafter acquires rights therein:

1. All equipment, machinery, fixtures, and other personal property of every nature whatsoever located in, or on, or attached or appurtenant to, and used or intended to be used in connection with, the operation, occupancy, development or improvement of the Property, and all buildings, structures, and other improvements thereon, including without limitation machine tools, motors, controls, attachments, heating, air conditioning, refrigeration, ventilation or utility systems, parts, tools, furniture, furnishings, shelves, racks, displays, appliances, drapes, and floor coverings, whether now owned or in existence or hereafter arising or acquired;

2. All policies and certificates of insurance, insurance proceeds, condemnation proceeds or awards, licenses, and permits, whether now owned or in existence or hereafter arising or acquired, arising from, used or held in connection with, or otherwise relating to the Premises;

3. All attachments, accessories, accessions, replacements, substitutions, additions, improvements, proceeds, and products of any and all of the foregoing.

In the event of a Default hereunder, Beneficiary is and shall be entitled to all the rights, powers, and remedies granted a secured party under the Uniform Commercial Code, as enacted in the State of California (the UCC), and other applicable law, including but not limited to the right to take possession of all such Collateral. Beneficiary or its representatives may enter upon the Premises (without Beneficiary being deemed to be taking possession of the Property or being deemed a mortgagee-in-possession) at any time to inspect, repair, assemble, have appraised, or to remove the Collateral, and may advertise and conduct public auctions and private sales thereon. Beneficiary may require Trustor to assemble the Collateral and make it available to Beneficiary at a place to be


designated by Beneficiary that is reasonably convenient to both parties. In addition to the expenses of retaking, holding, preparing for sale, selling, and otherwise exercising its remedies hereunder, Beneficiary shall be entitled to recover reasonable attorneys’ fees and legal expenses before applying the balance of the proceeds from the sale or other disposition of the Collateral towards satisfaction of the Indebtedness. Trustor shall remain liable for any deficiency remaining after such sale or other disposition.

22.2 Election of Beneficiary or Trustee. With respect to fixtures, Beneficiary or Trustee may elect to treat same as either real property or personal property and proceed to exercise such rights and remedies applicable to the categorization so chosen. Beneficiary may proceed against the items of real property and any items of Collateral separately or together in any order whatsoever, without in any way affecting or waiving Beneficiary’s rights and remedies under the Uniform Commercial Code as enacted in the State of California or its rights and remedies provided in this Deed of Trust.

22.3 Fixture Filing. Trustor agrees that this Deed of Trust constitutes a security agreement and financing statement filed as a fixture filing in the Official Records of Santa Barbara County, California with respect to any and all fixtures included within the term Premises as used herein, and with respect to any goods and other personal property that may now be or hereafter become fixtures. The names and mailing addresses of the debtor (Trustor) and the secured party (Beneficiary) are set forth on the first page of this Deed of Trust. Trustor is the record owner of the Property. The personal property described above and in this Deed of Trust is the collateral in which Trustor hereby grants Beneficiary a security interest and which is covered by this financing statement. Any reproduction of this Deed of Trust or of any other security agreement or financing statement shall be sufficient as a financing statement. In addition, Trustor agrees to execute and deliver to Beneficiary, upon Beneficiary’s request, any financing statements, as well as extensions, renewals, and amendments thereof, and reproductions of this Deed of Trust, in such form as Beneficiary may require to perfect a security interest with respect to such Collateral. Trustor shall pay all costs of filing such financing statements and any extensions, renewals, amendments, and releases thereof, and shall pay all reasonable costs and expenses of any record searches for financing statements Beneficiary may reasonably require.

22.4 Construction Mortgage and Fixture Filing. This Deed of Trust secures future advances to be used for construction of improvements on the Mortgaged Property pursuant to the Loan Agreement. Accordingly, this Deed of Trust constitutes a construction mortgage and a fixture filing under Sections 9313(1)(c) and 9402(6) of the UCC. Section 23 MISCELLANEOUS PROVISIONS


23.1 Site Assessment. Trustor hereby grants to Beneficiary and its officers, directors, employees, and agents, a license for access to and egress from the Premises, for the purposes set forth in this Section 23.1. Beneficiary (by its officers, employees, and agents), at any time and from time to time, may contract for the services of persons (the Site Reviewers) to perform environmental site assessments (Site Assessments) on the Premises for the purpose of determining whether there exists on the Premises any environmental condition that could reasonably be expected to result in any liability, cost, or expense to the owner, occupier, or operator of the Property arising under any Hazardous Materials Law relating to Hazardous Materials. The Site Reviewers are hereby authorized to enter the Property during the term of the loan secured hereby for purposes of conducting Site Assessments during business hours upon three (3) days notice. The Site Reviewers are further authorized to perform both above and below ground testing for environmental damage or the presence of Hazardous Materials on the Premises and such other tests as may be necessary to conduct the Site Assessments in the reasonable opinion of the Site Reviewers. Trustor agrees to supply the Site Reviewer with such historical and operational information regarding the Premises as may be reasonably requested by the Site Reviewers to facilitate Site Assessments and will make available for meetings with the Site Reviewers appropriate personnel having knowledge of such matters. The results of the Site Assessment shall be furnished to Trustor on request. The cost of performing such Site Assessments shall be paid by Trustor.

23.2 No Merger. In the event that both lessor’s and lessee’s estates under any lease or any portion thereof, which constitutes or may constitute a part of the Premises, shall at any time become vested in one owner, this Deed of Trust and the lien created hereby shall not be destroyed or terminated by the application of the doctrine of merger and, in such event, Beneficiary shall continue to have and enjoy all of the rights and privileges of Beneficiary as to the separate estates. In addition, upon the foreclosure of the lien created by this Deed of Trust on the Premises pursuant to the provisions hereof, any leases or subleases then existing and created by Trustor shall not be destroyed or terminated by application of the law of merger, as a matter of law, or as a result of such foreclosure, unless Beneficiary or any purchaser at such foreclosure sale shall so elect. No act by or on behalf of Beneficiary or any such purchaser shall constitute a termination of any lease or sublease unless Beneficiary or such purchaser shall have given written notice thereof to such tenant or subtenant.

23.3 Binding Effect. This Deed of Trust inures to the benefit of and binds all parties hereto and their respective heirs, legatees, devisees, administrators, executors, successors, and assigns. The term Beneficiary as used herein shall mean the owner and holder, including pledgee and assignees, of the instruments and documents evidencing the Indebtedness secured hereby, whether or not named as Beneficiary herein.

23.4 Headings. The headings and captions of the paragraphs of this Deed of Trust are for reference purposes only and shall not be construed or deemed to define or limit any of the terms and


provisions contained hereunder. Whenever in this Deed of Trust the content so requires, the gender used includes the masculine, feminine, and/or neuter.

23.5 Waiver of Statute of Limitations. The pleading of any statute of limitations as a defense to any and all Indebtedness secured by this Deed of Trust is hereby waived by Trustor to the fullest extent permissible by law.

23.6 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. Trustee is not obligated to notify any party to this Deed of Trust of pending sale under any other deed of trust or of any action or proceeding in which Trustor, Beneficiary, and/or Trustee is a party, unless brought by Trustee hereunder.

23.7 Payment of Charges by Trustor. Trustor agrees to pay such charges required by Beneficiary for any statement regarding the Indebtedness secured hereby, in an amount not exceeding the maximum allowed by law at the time such statement is requested.

23.8 Request for Notice of Default or Sale. Trustor requests that a copy of any notice of default or any notice of sale hereunder be mailed to Trustor at the address first referenced and set forth herein, or at such other address as Trustor may, from time to time, notify Trustee by certified United States mail.

23.9 Notices. All notices, consents, approvals, and other communications required hereunder shall be in writing; shall be deemed to have been given when received if personally delivered or one (1) day after being sent by a nationally recognized overnight courier, or three (3) days following deposit in the U.S. mail; shall be either personally delivered or sent by overnight delivery or mailed by certified or registered mail, return receipt requested, postage prepaid and affixed; shall be addressed to the appropriate parties at the addresses first referenced herein or to such other address as a party may have previously furnished for itself to the other parties hereto by a notice in accordance with this section; and if directed to Beneficiary, shall be directed to the attention of the Executive Director, and shall include a copy to: Community Development Department, 100 Civic Center Plaza, P.O. Box 8001, Lompoc, California 93438-8001.

23.10 Waiver of Jury Trial. In the event of any litigation involving any matter connected in any respect with this Deed of Trust or any other document executed in connection with the Loan, Trustor hereby expressly waives the right to a trial by jury.

23.11 Severability. In the event any one or more of the provisions of this Deed of Trust or of any other document evidencing the Indebtedness secured hereby shall for any reason be held to be invalid, illegal, and/or unenforceable in any respect, such invalidity, illegality, and/or unenforceability shall not affect any other provision of this Deed of Trust, or of any such other


document, and such other provisions shall remain binding and enforceable, and shall continue in full force and effect.

23.12 Trustor Waiver of Rights. Trustor waives the benefit of all laws now existing or that hereafter may be enacted providing for: (1) any appraisement before sale of any portion of the Mortgaged Property; and (2) the benefit of all laws that may be hereafter enacted in any way extending the time for the enforcement of the collection of the Note or the debt evidenced thereby or creating or extending a period of redemption from any sale made in collecting said debt. To the full extent Trustor may do so, Trustor agrees that Trustor will not at any time insist upon, plead, claim, or take the benefit or advantage of any law now or hereafter in force providing for any appraisement, valuation, stay, extension or redemption, and Trustor, for Trustor, Trustor’s heirs, devisees, representatives, successors, and assigns, and for any and all persons ever claiming any interest in the Mortgaged Property, to the extent permitted by law, hereby waives and releases all rights of redemption, valuation, appraisement, stay of execution, notice of election to mature or declare due the whole of the secured indebtedness and marshaling in the event of foreclosure of the liens hereby created. If any law referred to in this Section 23.12 and now in force, of which Trustor, Trustor’s heirs, devisees, representatives, successors, and assigns or other person might take advantage despite this Section 23.12, shall hereafter be repealed or cease to be in force, such law shall not thereafter be deemed to preclude the application of this Section 23.12. Trustor expressly waives and relinquishes any and all rights and remedies that the Trustor may have or be able to assert by reason of the laws of the State of California pertaining to the rights and remedies of sureties.

23.13 Limitation of Interest. It is the intent of the Trustor and Beneficiary in the execution of this Deed of Trust and the Note and all other instruments securing the Note to contract in strict compliance with the usury laws of the State of California governing the loan evidenced by the Note. In furtherance thereof, Beneficiary and Trustor stipulate and agree that none of the terms and provisions contained in the Loan Instruments shall ever be construed to create a contract for the use, forbearance, or detention of money requiring payment of interest at a rate in excess of the maximum interest rate permitted to be charged by the laws of the State of California governing the loan evidenced by the Note. Trustor or any guarantor, endorser, or other party now or hereafter becoming liable for the payment of the Note shall never be liable for unearned interest on the Note and shall never be required to pay interest on the Note at a rate in excess of the maximum interest that may be lawfully charged under the laws of the State of California. The provisions of this Section 23.13 shall control over all other provisions of the Note and any other instrument executed in connection herewith that may be in apparent conflict herewith. In the event any holder of the Note shall collect monies that are deemed to constitute interest that would otherwise increase the effective interest rate on the Note to a rate in excess of that permitted to be charged by the laws of the State of California, all such sums deemed to constitute interest in excess of the maximum permissible rate shall be immediately returned to the Trustor upon such determination.


23.14 Interpretation; Time Is of the Essence. This Deed of Trust, and the Loan Instruments shall not be construed more strictly against one party than against the other merely by virtue of the fact that they may have been prepared by counsel for one of the parties, it being recognized that both Trustor and Beneficiary have contributed substantially and materially to the preparation of this Deed of Trust and the Loan Instruments. Time is of the essence of this Deed of Trust and the indebtedness and obligations that it secures. Notwithstanding anything to the contrary contained herein, in the event of any conflict or inconsistency between the terms and provisions of the Loan Instruments and the terms and provisions of the Commitment, the terms and provisions of the Loan Instruments shall control.

IN WITNESS WHEREOF, this Deed of Trust is executed as of the date first hereinabove written.

“TRUSTOR”

COLLEGE PARK HOUSING ASSOCIATES, a California Limited Partnership LOMPOC HOUSING AND COMMUNITY DEVELOPMENT CORPORATION, Managing General Partner

Dated: ________________, 2008 By:_____________________________

Susan G. Ehrlich Its Executive Director

Dated: ________________, 2008 By:_____________________________

Susan G. Ehrlich Its Limited Partner

[SIGNATURES MUST BE NOTARIZED]

STATE OF CALIFORNIA) ) ss.

COUNTY OF SANTA BARBARA)

On __________________ , 20__, before me,___________________, personally appeared ____________________, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument.

WITNESS my hand and official seal.

Signature______________________________ Date________________________

EXHIBIT “A” LEGAL DESCRIPTION

[SEE ATTACHED LEGAL DESCRIPTION] Assessor’s Parcel Number: 087-132-04

ATTACHMENT NO. 7 CITY DEED OF TRUST … · SECURITY AGREEMENT, AND FIXTURE FILING . ATTENTION...

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Transcript of ATTACHMENT NO. 7 CITY DEED OF TRUST … · SECURITY AGREEMENT, AND FIXTURE FILING . ATTENTION...