HomeMy WebLinkAboutD-1970 313 South Street Recorded 01/31/201440t - 341 -7o7a� LeA
` 'RECORDLgG REQUESTED BY:
FIRST A'IiERIC -A TITLE CO'1iP A 'Y
WHEN RECORDED RETURN TO:
City of San Luis Obispo
990 Palm Street
San Luis Obispo, Ca. 93401
Attn: City Clerk
JULIE RODEWA - - -- Ac
San Luis Obispo coun�lerk/Recorder 1/31/2014
Recorded at the request of 11;20 AM
First American Title Company
D 0 C # : 2014004106 Tales: 4 Pages: 21.. ,
The undersigned declare that there is no documentary
transfer tax on this matter.
Fees
Taxes
Others
PAID
0.00
0.00
0.00
$0.00
Recorded for the Benefit of the
City of San Luis Obispo at No Fee Under
Section 27383 of the Government Code
PURCHASE MONEY DEED OF TRUST, DEED OF TRUST COVENANTS,
ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND FIXTURE FILING
THIS PURCHASE MONEY DEED OF TRUST, DEED OF TRUST COVENANTS,
ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND FIXTURE FILING (this "Deed
of Trust ") is made as of this 29 day of JM , 2014, by South Street Family Apartments,
L.P., a California limited partnership ( "Trustor"), the buyer of the real property described herein
below, whose address is:
313 South Street, San Luis Obispo, California
To First American Title Company ( "Trustee ") in' favor of the CITY OF SAN LUIS
OBISPO, a municipal corporation, whose address is 990 Palm Street, San Luis Obispo,
California 93401 ("Beneficiary").
WHEREAS, the Beneficiary- has made a loan to the Trustor in the initial principal amount of
$622,277.00 (the "Loan"), funded with 2006, 2007, 2008, 2009, 2010, 2011, 2012 and 2013
Community Development Block Grant (hereinafter referred to as "CDBG ") Program funds for
the acquisition of real property located at 313 South Street, San Luis Obispo, California which is
further described in Exhibit A attached hereto (hereinafter referred to as "the Real Property") on
which Beneficiary expects to develop, own and operate affordable rental housing (the "Project ");
and
WHEREAS, the Department of Housing and Urban Development (hereinafter referred to as
- - - - "HUD ") approved the 2006,- 2007,- -2008, 2009, 2010, 2011, 2012 and 2013 One Year Action
Plans of the Consolidated Plan and approved grant agreement numbers B- 06 -UC -06 -0508, B -07-
UC -06 -0508, B- 08 -UC -06 -0508, B- 09 -UC -06 -0508, B- 10 -UC -06 -0508, B- .11 -UC -06 -0508, B-
12 -UC -06 -0508 and B- 13 =UC -06 =0508 with the City (hereinafter referred to as "the Grant
Agreement "); and
WHEREAS, Trustor shall use the proceeds of the Loan solely for the acquisition and related
costs of the Real Property;.and
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Deed of Trust
Page 2
WHEREAS, the proposed activity, which meets HUD eligibility criteria by helping to provide
services for low income persons, according to 24 CFR 570.201(a), and is consistent with the
national objectives as described in 24 CFR 570.200(a)(2) by providing a benefit to low- and
moderate income persons as described in 24 CFR 570.208(a); and
WHEREAS, Beneficiary and Trustor have entered into a Loan Agreement and Promissory Note,
dated concurrently herewith; and
WHEREAS, the Loan Agreement and Promissory Note impose certain restrictions on the sale or
transfer of the Real Property; and -
WHEREAS, Beneficiary and Trustor desire to ensure that the Real Property remain affordable to
low, very low and/or extremely -low income persons for a period of not less than 30 years
following the Borrower's acquisition of the Real Property, pursuant to the Loan Agreement and
Promissory Note.
NOW, THEREFORE, THIS DEED OF TRUST WITNESSETH:
Trustor, in consideration of the indebtedness referred to below and the trust herein created,
irrevocably grants, conveys, transfers and assigns to Beneficiary, and its successors and assigns,
in trust, power of sale and right of entry and possession, all of Trustor's estate, right, title and
interest in, to and under the Real Property;
TOGETHER WITH all structures and improvements now existing or hereafter erected on the
Real Property, all easements, rights and appurtenances thereto or used in connection therewith,
all rents, royalties, issues, profits, revenues, income and other benefits thereof or arising from the
use or enjoyment of all or any portion thereof (subject, however, to the right, power and authority
given herein to Trustor to collect and apply such rents, royalties, issues, profits, revenues, income
and other benefits prior to an Event of Default hereunder), all interests in and rights, royalties and
profits in connection with all minerals, oil and gas and other hydrocarbon substances thereon or
therein, development rights or credits, air rights, water, water rights (whether riparian,
appropriative or otherwise and whether or not appurtenant) and water stock, all intangible
property and rights relating to the Real Property or the operation thereof or used in connection
therewith, including, without limitation, trade names and trademarks and all furniture and
fixtures, now or hereafter located in, or on, or attached or affixed to, or used or intended to be
used in connection with, the Real Property, including, but without limitation, all heating,
lighting, laundry, incinerating, gas, electric and power equipment, pipes, plumbing, fire
prevention and fire extinguishing, refrigerating, ventilating and communication apparatus, air
cooling and air conditioning apparatus, shades, awnings, blinds, curtains, drapes, attached floor
coverings, including rugs and carpeting and other installed appliances, attached cabinets, trees,
plants and other items of landscaping, shall, to the fullest extent permitted by law and for the
purposes of this Deed of Trust, be deemed to be part and parcel of, and appropriated to the use
of, the Real Property and, whether or not affixed or annexed thereto, be deemed conclusively to
be real property and conveyed by this Deed of Trust, and Trustor agrees to execute and deliver,
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from time to time, such further instruments and documents as may be required by Beneficiary to
confirm the lien of this Deed of Trust on any of the foregoing;
TOGETHER WITH all of the estate, interest, right, title, other claim or demand which Trustor
now has or may hereafter acquire in any and all awards made for the taking by eminent domain,
or by any proceeding or purchase in lieu thereof, of the whole or any part of the Property (as
hereinafter defined), including, without limitation, any awards resulting from a change of grade
of streets and awards for severance damages;
TOGETHER WITH all of the estate, interest, right, title and other claim or demand which
Trustor now has or may hereafter acquire with respect to the unearned premiums accrued,
accruing or to accrue and the proceeds of insurance in effect with respect to all or any part of the
foregoing. All of the foregoing property referred to in this Deed of Trust, together with the Real
Property, is herein referred to as the "Property."
ARTICLE 1. PURPOSE AND CONSIDERATION. This Deed of Trust is established for the
purpose of securing, in such order of priority as Beneficiary may elect:
(a) The repayment of the indebtedness evidenced by the Promissory Note Secured by
Deed of Trust (the "Promissory Note "), of even date herewith, executed by Trustor as
Maker, payable to the order of Beneficiary, in the initial principal amount of Six Hundred
Twenty Two Thousand Two Hundred and Seventy Seven Dollars ($622,277.00)
( "Principal "), and any and all late charges, interest costs or fees required thereunder, and
all extensions, renewals, modifications, amendments and replacements thereof.
(b) The payment of all other sums which may be advanced by or otherwise be due to
Trustee or Beneficiary under any provision of this Deed of Trust with interest (if any)
thereon at the rate provided herein or therein.
(c) Performance of all covenants of Trustor made in this Deed of Trust.
(d) Performance of all covenants of Trustor as set forth in the Promissory Note.
(e) Performance of all covenants of Trustor as set forth in the Loan Agreement.
ARTICLE 2. TRUSTOR RESTRICTIONS. To protect the security of this Deed of Trust,
Trustor and Trustee hereby covenant and agree as follows:
SECTION 2.01. Restrictions on Use and Occupancy. The Real Property shall be used solely
for low, very-low and/or extremely -low income rental (or leasing) housing purposes as defined in
Title 24, Section 92.216 and 92.252 of the Code of Federal Regulations (24 CFR 92.216 and
92.252) and the Loan Agreement and Promissory Note, the terms and restrictions of which are
incorporated by this reference as 'if fully set forth herein.
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Deed of Trust
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SECTION 2.02. Restrictions on Sale. The Real Property or any equitable interest in all or any
part of the Real Property shall not be sold, conveyed, encumbered, alienated or transferred
without the prior written consent of the City of San Luis Obispo Community Development
Director (except for leases to tenants, or a transfer to a City approved affiliated nonprofit
organization).
SECTION 2.03. Term of Use, Occupancy and Sale Restrictions. Trustor agrees that the
above restrictions to the use, occupancy and sale of the Real Property shall remain in effect for a
period of not less than thirty (30), years from the date of the Borrower's acquisition of the Real
Property' or until January 31, 2044.
SECTION 2.05. Covenants Binding. These affordability requirements shall be covenants
running with the land as defined in California Civil Code Section 1460, and shall apply to the
Real Property as further described in Exhibit A. Pursuant to Civil Code Section 1468, which
governs, such covenants, the provisions of this Deed of Trust shall be binding upon all parties
having any right; title, or interest in any of the Real Property, or any portion thereof, and on their
heirs, successors in interest and assigns for a period of 30 years from the Borrower's acquisition
of the Real Property. The parties agree that all future deeds or transfers of interest regarding the
Real Property shall show the restrictions of this Agreement for as long as the Agreement is in
effect.
SECTION 2.06. Right of Refusal. Trustor and Trustee agree that the general partners of the
Borrower shall have the option and or right of first refusal to purchase the Real Property pursuant
to a City approved. option and/or right of first refusal agreement, as further described in the
Promissory Note.
SECTION 2.07. Performance of Obligations Secured. Trustor shall promptly pay when due
the indebtedness evidenced by the Promissory Note and any late charges, costs and/or fees
provided for in the Promissory Note and shall further perform fully and in a timely manner all
other obligations of Trustor contained herein or in the Promissory Note.
ARTICLE 3 — INSURANCE REQUIREMENTS
SECTION 3.01. Trustor shall keep the Property and all improvements thereon insured against
loss or damage by fire with extended all -risk coverage clauses, including vandalism and
malicious mischief clauses, in an amount not less than one hundred percent, (100 %) of the full
replacement cost of such improvements with a company or companies and in such form and with
such endorsements as may be approved or required by Beneficiary.
SECTION 3.02. Trustor shall also maintain in full force and effect a policy of homeowners'
general liability insurance insuring Trustor against liability for bodily injury, property damage
and personal injury arising out of the operation, use or occupancy of the Property. The initial
amount of such insurance shall be One Hundred Thousand Dollars ($100,000.00) per occurrence
and not in the aggregate and shall be subject to periodic increase based upon increased liability
awards or the reasonable recommendation of Trustor's professional insurance advisor. Trustor
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Deed of Trust
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shall name Beneficiary as an additional insured under such policy. Such insurance shall be
primary with respect to any insurance maintained by Beneficiary and shall not call on
Beneficiary's insurance for contributions.
SECTION 3.03. Trustor shall pay all premiums for the insurance policies required to be
maintained under this Deed of Trust within fifteen (15) days after Trustor's receipt of a copy of
the premium statement or other evidence of the amount due. At least thirty (30) days prior to the
expiration of such policy, Trustor shall deliver to Beneficiary , a renewal of such policy.
SECTION 3.04. Any insurance which Trustor is required to maintain under this Deed of Trust
shall include a provision requiring that the insurance carrier give Beneficiary not less than thirty
(30) days written notice prior to any cancellation or modification of such coverage. If Trustor (i)
fails to deliver any policy or renewal. to Beneficiary required under this Deed of Trust within the
prescribed time period or (ii) if any such policy is canceled or modified to reduce the amount or
type of coverage without Beneficiary's consent and no substituted comparable coverage is
obtained by Trustor prior to such cancellation or modification, Beneficiary may obtain such
insurance. In such case, Trustor shall reimburse Beneficiary for the cost of such insurance within
fifteen (15) days after receipt of a statement that indicates the cost of such insurance and upon
proof that Beneficiary has paid said statement.
SECTION 3.05. Trustor shall maintain all insurance required under this Deed of ,Trust with
companies holding a "general policy rating" of A -8 or better, as set forth in the most current issue
of "Best Key Rating Guide." Trustor acknowledges that the insurance described in this Section is
for the primary benefit of Beneficiary. Beneficiary makes no representation as to the adequacy of
such insurance to protect Trustor's or Beneficiary's interests. Therefore, Trustor shall obtain any
additional property or liability insurance that Trustor deems necessary to protect Beneficiary and
Trustor, in the exercise of reasonable judgment.
SECTION 3.06. Notwithstanding anything to the contrary contained herein, Trustor's obligation
to carry the insurance provided for herein may be brought within the coverage of a so- called
blanket policy or policies of insurance carried and maintained by Trustor; provided, however,
that Beneficiary shall be named as an additional insured thereunder and that the coverage
afforded Beneficiary will not be reduced or diminished by reason of the use of such blanket
policy of insurance and provided further that the requirements set forth herein are otherwise
satisfied.
SECTION 3.07. All of the above - mentioned insurance policies or certificates of insurance must
be satisfactory to Beneficiary. Beneficiary shall not by the fact of approving, disapproving,
accepting, preventing, obtaining or failing to obtain any insurance, incur any liability for or with
respect to the amount of insurance carried, the form or legal sufficiency of insurance contracts,
insolvency of insurance companies or payment or defense of lawsuits and Trustor hereby
expressly assumes full responsibility therefor and all liability, if any, with respect thereto.
SECTION 3.08. Condemnation and Insurance Proceeds.
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SUBSECTION 3.08(a). Any award of damages in connection with any taking or condemnation,
or for injury to the Property by reason of public use, or for damages for private trespass or entry
onto the Property is hereby assigned and shall be paid to Beneficiary as further security for all
obligations secured by this Deed of Trust. Upon receipt of such proceeds, Beneficiary may hold
the proceeds as further security or apply or release them in the same manner and with the same
effect as provided in this Deed of Trust for the disposition of proceeds of fire or other insurance.
SUBSECTION 3.08(b). Any insurance proceeds or awards in connection with any casualty or
damage or injury to the Property covered by insurance ( "Insurance Proceeds ") are hereby
assigned to Beneficiary to be held and applied by Beneficiary in the manner hereinafter provided.
Beneficiary may, at its option, and at its own expense, appear in and prosecute in its own name
any action or proceeding to enforce any cause of action for such Insurance Proceeds. All
Insurance Proceeds shall be applied by Beneficiary upon any indebtedness secured by this Deed
of Trust and in any order determined by Beneficiary or, at the option of Beneficiary, the entire
amount so collected or any part of that amount may be released to Trustor. This application or
release shall not cure or waive any default or notice of default under this Deed of Trust or
invalidate any act done pursuant to such notice.
SUBSECTION 3.08(c). Trustor, immediately upon obtaining knowledge of the institution of any
proceedings relating to condemnation or other taking of or damage or injury to the Property or
any portion thereof, or knowledge of any casualty damage to the Property or damage in any other
manner, shall immediately notify Beneficiary in writing. Beneficiary may participate, at its own
expense, in any such proceedings and may join Trustor in adjusting any loss covered by
insurance.
ARTICLE 4. TAXES, LIENS AND OTHER ITEMS. Trustor shall pay, when due, all taxes,
bonds, assessments, fees, liens (including prior trust deed liens), charges, fines, impositions and
any and all other items which are attributable to or affect the Property and which may attain a
priority over this Deed of Trust or the indebtedness or evidence of indebtedness secured hereby,
by making payment prior to delinquency directly to the payee thereof. Trustor may initiate
proceedings to contest any such taxes, bonds, assessments, fees, liens, charges, fines, impositions
or other items so long as Trustor takes steps to ensure that Beneficiary's security is not threatened
in any manner. Trustor shall pay all costs of the proceedings, including any costs or fees incurred
by Beneficiary. Upon the final determination of any proceeding or contest, Trustor shall
immediately pay the amounts due, together with all costs, charges, interest and penalties
incidental to the proceedings.
ARTICLE 5. [Intentionally omitted.]
ARTICLE 6. PRESERVATION AND MAINTENANCE OF PROPERTY: Trustor shall
keep the Property and every part thereof in good condition and repair and shall not permit or
commit any waste, impairment or deterioration of the Property nor commit, suffer or permit any
act upon or use of the Property in violation of law or applicable order of any governmental
authority, whether now existing or hereafter enacted and whether foreseen or unforeseen,
including, without limitation, violation of any .zoning, building or environmental protection
statutes, ordinances, regulations, orders and restrictions or in violation of any covenants,
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conditions or restrictions affecting the Property or bring or keep any article upon any of the
Property or cause or permit any condition to exist thereon which would be prohibited by or could
invalidate any insurance coverage maintained or required hereunder to be maintained by Trustor
on or with respect to any part of the Property and further shall do all other acts which from the
character or use of the Property may be reasonably necessary to protect the security hereof, the
specific enumerations herein not excluding the general. Trustor shall completely restore and
repair promptly and in a good and workmanlike manner any building, structure or improvement
thereon which may be damaged or destroyed and pay, when due, all claims for labor performed
and materials furnished therefor, whether or not insurance or other proceeds are available to
cover, in whole or in part, the costs of any such restoration or repair. Trustor shall notify
Beneficiary immediately in writing of any damage to the Property in excess of Ten Thousand
Dollars ($10,000.00).
ARTICLE 7. PROTECTION OF SECURITY: COSTS AND EXPENSES. Trustor shall
appear in and defend any action or proceeding purporting to affect the security hereof or the
rights or powers of Beneficiary or Trustee and shall pay all reasonable costs and expenses,
including, without limitation, costs of evidence of title and reasonable attorney's fees, in any such
action or proceeding in which Beneficiary or Trustee may appear and in any suit brought by
Beneficiary to foreclose this Deed of Trust or to enforce or establish any other rights or remedies
of Beneficiary hereunder. If Trustor fails to perform any-of the covenants or agreements in this
Deed of Trust or if any action or proceeding is commenced which affects Beneficiary's interest in
the Property or any part thereof, including, but not limited to, eminent domain, code enforcement
or proceedings of any nature whatsoever under any federal or state law, whether now existing or
hereafter enacted or amended, relating to bankruptcy, insolvency, arrangement, reorganization or
other form of debtor relief, or to a decedent, then Beneficiary or Trustee may, but without,
obligation to do so and upon ten (10) days' prior written notice to and demand upon Trustor
(unless a shorter notice period is necessary to protect Beneficiary's interest in the security hereof,
in which case only reasonable notice and demand under the circumstances shall be required) and
without releasing Trustor from any obligation hereunder, make such appearances, disburse such
sums and take such action as Beneficiary or Trustee deems necessary or appropriate to protect
Beneficiary's interest, including, but not limited to, disbursement of reasonable attorney's fees,
entry upon the Property to make repairs or otherwise protect the security hereof, and payment,
purchase, contest or compromise of any encumbrance, charge or lien which in the judgment of
either Beneficiary or Trustee appear to be prior or superior hereto. Trustor further agrees to pay
all reasonable expenses of Beneficiary (including fees and disbursements of counsel) reasonably
related to the protection of the rights of Beneficiary hereunder,_ and enforcement or collection of
payment of the Promissory Note, whether by judicial or non judicial proceedings, or in
connection with any bankruptcy, insolvency, arrangement, reorganization or other debtor relief
proceeding of Trustor, or otherwise. Beneficiary shall give Trustor ten (10) days' prior written
notice before disbursing any amounts pursuant to this Article. Any amounts disbursed by
Beneficiary or Trustee pursuant to this Section shall be additional indebtedness of Trustor
secured by this Deed of Trust as of the date of disbursement. All such amounts shall be payable
by Trustor immediately without demand. Nothing contained herein shall be construed to require
Beneficiary or Trustee to incur any expense, make any appearance or take any other action.
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ARTICLE 8. ENFORCEMENT.
Section 8.01. Acknowledgement of Enforceability. Trustor represents, warrants, covenants
and agrees that it is the lawful owner of the Real Property and that it has good right and lawful
authority to encumber the same as provided herein; that the Real Property is free from any and all
liens and encumbrances excepting only such as have been approved by Beneficiary and that
Trustor warrants and will defend the title to the Property against all claims and demands
whatsoever not specifically excepted herein (and except for claims and demands arising from
acts or omissions of Beneficiary or any predecessor -in- interest to Beneficiary not previously
disclosed to Trustor), and Trustor will execute, acknowledge and deliver all and every such
further assurances unto Beneficiary of the title to the Property hereby conveyed and intended so
to be or that Trustor may be or shall become hereinafter bound so to do. Trustor covenants and
warrants that the Promissory Note and this Deed of Trust are valid and enforceable obligations of
Trustor in accordance with the terms thereof and hereof; and that this Deed of Trust does not, nor
does the Promissory Note, nor does the performance or observance by Trustor of any of the
matters or things in the Promissory Note or this Deed of Trust, contravene any covenant in any
indenture or agreement affecting Trustor.
Section 8.02. Due on Sale and Other Enforcement Provisions. Except as permitted in this
Deed of Trust, the Note or Loan Agreement, Trustor agrees that Trustor shall not Transfer all or
any part of the Property without the prior written consent of Beneficiary. Beneficiary may grant
or deny such consent in its sole and absolute discretion and as a condition to such consent may
require any transferee to assume all obligations hereunder and to agree to be bound by all
provisions contained herein. In the event of any proposed Transfer, Trustor shall provide
Beneficiary with all financial and other information pertaining to the intended transferee
reasonably requested by Beneficiary. In the event of any Transfer without the prior written
consent of Beneficiary, Beneficiary shall have the absolute right, at its option, without demand or
notice, to declare all outstanding Principal and all other sums due hereunder and under the
Promissory Note to be immediately due and payable. Further, Beneficiary may bring an action at
law or in equity to require Trustor and the proposed transferee to terminate and/or rescind any
sales contract or purchase and sale transaction between them and/or to declare the transfer void,
notwithstanding that the transfer may have closed and become final as between Trustor and the
transferee. Further, .Beneficiary may pursue any other remedy available under this Deed of Trust
or the Promissory Note or at law or in equity or under any other agreement, instrument or
document entered into by Trustor and Beneficiary. Beneficiary's consent to one Transfer shall
not be deemed to be a waiver of the right to require consent to a future or successive Transfer.
As used herein, "Transfer" includes any sale, agreement to sell, assignment, exchange or other
conveyance of the Property or any portion thereof or any interest therein, whether voluntary or
involuntary, by operation of law or otherwise, except that a Transfer by gift, devise or inheritance
to a spouse or to a spouse as a part of a dissolution proceeding shall not be considered a Transfer
for purposes of this Section.
ARTICLE 9. EVENTS OF DEFAULT. Each of the following shall constitute an event of
default ( "Event of Default ") hereunder (including, if Trustor and Trustee consists of more than
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one person or entity, the occurrence of any of such events with respect to any one or more of such
persons or entities):
SECTION 9.01. Breach of- Covenants. Default by Trustor in the performance of any of the
material covenants or agreements of Trustor contained herein, in the Promissory Note, in the
Loan Agreement or any other note or instrument, trust deed or-other obligation of Trustor relating
to the Property secured by any part of or all of the Property, whether junior or senior to this Deed
of Trust.
SECTION 9.02. Appointment of Trustee. The appointment pursuant to an order of a court of
competent jurisdiction, of a trustee, receiver or liquidator of the Property or any part thereof, or
of Trustor, or any termination or voluntary suspension of the transaction of business of Trustor,
or any attachment, execution or other judicial seizure of all or any substantial portion of Trustor's
assets; provided, however, that if such attachment, execution or seizure is involuntary, Trustor
shall not be deemed in default unless the same is not discharged within sixty (60) days.
SECTION 9.03. Bankruptcy Filing. The filing by or against Trustor of a petition in bankruptcy
or for an arrangement or for reorganization or for other form of debtor relief pursuant to the
federal Bankruptcy Act, as the same may be amended or replaced from time to time, or any other
law, federal or state, whether now existing or hereafter amended or enacted relating to insolvency
or debtor relief (except that in the case of a filing against Trustor, an Event of Default shall not
exist unless Trustor fails to have the proceeding discharged within sixty (60) days after such
filing), or the adjudication of Trustor as a bankrupt or an insolvent by a decree, of a court of
competent jurisdiction, or the making of an assignment for the benefit of creditors, or the
admission by Trustor in writing of its inability to pay its debts generally as they become due, or
the giving of consent by Trustor to the appointment of a receiver or receivers of all or
substantially all of its property.
SECTION 9.04. Misrepresentations. Any material representation or disclosure made to
Beneficiary by Trustor as an inducement to the making of the Loan evidenced by the Promissory
Note that proves to be false or misleading in any material respect as of the time the same was
made, whether or not any such representation or disclosure appears as part of this Deed of Trust.
SECTION 9.05. Other Events. Any other event which, under this Deed of Trust, or under the
Promissory Note or the Agreement, constitutes an Event of Default by Trustor hereunder or
_ thereunder or gives Beneficiary the right to accelerate the maturi ty of the indebtedness, or any
part thereof, secured hereby.
ARTICLE 10. REMEDIES. Upon the occurrence of any Event of Default and the expiration
of any applicable period within which to cure the same, Trustee and Beneficiary shall have the
following rights and remedies:
SECTION 10.01. Acceleration. Beneficiary may declare the entire outstanding Principal,
accrued and unpaid interest and all other sums or payments required hereunder to be due and
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payable immediately and notwithstanding the date such sums would otherwise be due in
accordance with the Promissory Note and the Agreement.
SECTION 10.02. Entry. Whether or not Beneficiary exercises the right provided in Section
10.01 above, Beneficiary, in person or by agent or court- appointed receiver, may enter upon, take
possession of, manage and operate the Property or any part thereof and do all things necessary or
appropriate in Beneficiary's sole discretion in connection therewith, including, without limitation,
making and enforcing, and if the same be subject to modification or cancellation, modifying or
canceling leases upon such terms or conditions as Beneficiary deems proper, obtaining and
evicting tenants, and fixing or modifying rents, contracting for and making repairs and
alterations, and doing any and all other acts which Beneficiary deems proper to protect the
security hereof; and either with or without so taking possession, in its own name, in the name of
Trustor or by court- appointed receiver (which may be appointed on notice or on ex parte
application without notice), suing for or otherwise collecting and receiving the rents and profits,
including those past due and unpaid, and applying the same less costs and expenses of operation
and collection, including reasonable attorney's fees, upon any indebtedness secured hereby and in
such order as Beneficiary may determine. Upon request of Beneficiary, Trustor shall assemble
and make available to Beneficiary at the site of the Real Property any of the Property which has
been removed therefrom. The entering upon and taking possession of the Property, or any part
thereof, the collection of any rents,and profits and the application thereof as aforesaid shall not
cure or waive any Event of Default theretofore or thereafter occurring or affect any notice or
Event of Default or notice, and, notwithstanding continuance in possession of the Property or any
part thereof by Beneficiary, Trustor or a receiver, and the collection, receipt and application of
the rents and profits, Beneficiary shall be entitled to exercise every right provided for in this
Deed of Trust or by law or in equity upon or after the occurrence of an Event of Default,
including, without limitation, the right to exercise the power of sale, Any of the actions referred
to in this Section may be taken by Beneficiary irrespective of whether any notice of an Event of
Default or election to sell has been given hereunder and without regard to the adequacy of the
security for the indebtedness hereby secured.
SECTION 10.03. Judicial Action. Beneficiary may bring an action in any court of competent
jurisdiction to foreclose this Deed of Trust or to enforce any of the covenants and agreements of
this Deed of Trust, or the Promissory Note and the Loan Agreement.
SECTION 10.04. Power of Sale.
SUBSECTION 10.04(a). Beneficiary may elect to cause the Property or any part thereof to be
sold under the power of sale herein granted in any manner permitted by applicable law. In
connection with any sale or sales hereunder, Beneficiary may elect to treat any of the Property
that consists of a right in action or that is property that can be severed from the Real Property or
any improvements thereon without causing structural damage thereto as if the same were
personal property and dispose of the same in accordance with applicable law, separate and apart
from the sale of the Real Property.
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SUBSECTION 10.04(b). Trustee may, and .upon request of Beneficiary shall, from time to time,
postpone any sale hereunder by public announcement thereof at the time and place noticed
therefor. If the Property consists of several items of property, Beneficiary may designate the order
in which such items shall be offered for sale or sold. Any person, including Trustor, Trustee or
Beneficiary, may purchase at any sale hereunder, and Beneficiary shall have the right to purchase
at any sale hereunder by crediting upon the bid price the amount of all or any part of the
indebtedness hereby secured.
SUBSECTION 10.04(c). Should Beneficiary desire that more than one sale or other disposition
of the Property be conducted, Beneficiary may, at its option, cause the same to be conducted
simultaneously, or successively, on the same day, or at such different days or times and in such
order as Beneficiary may deem to be in its best interests, and no such sale shall terminate or
otherwise affect the lien of this Deed of Trust on any part of the Property not sold until all
indebtedness secured hereby has been fully paid. Upon any sale hereunder, Trustee shall execute
and deliver to the purchaser or purchasers a deed or deeds conveying the Property so sold, but
without any covenant or warranty whatsoever, express or implied, whereupon such purchaser or
purchasers shall be let into immediate possession; and the recitals in any such deed or deeds of
facts, such as default, the giving of notice of default and notice of sale and other facts affecting
the regularity or validity of such sale or disposition, shall be conclusive proof of the truth of such
facts and any such deed or deeds shall be conclusive against all. persons as to such facts recited
therein.
SUBSECTION 10.04(d). In case of any sale of the Property pursuant to any judgment or decree
of any court or at public auction or otherwise in connection with the enforcement of any of the
terms of this Deed of Trust, Beneficiary, its successors or assigns, may become the purchaser,
and for the purpose of making settlement for or payment of the purchase price, shall be entitled to
deliver over and use the Promissory Note, together with all other sums, with interest, advanced
and unpaid hereunder, in order that there may be credited as paid on the purchase price the sum
then due under the Promissory Note, including principal thereon and all other sums, with interest,
advanced and unpaid hereunder.
SECTION 10.05. Proceeds of Sale. The proceeds of any sale made under or by virtue of this
Article, together with all other sums that then may be held by Trustee or Beneficiary under this
Deed of Trust, whether under the provisions of this Article or otherwise, shall be applied as
follows:
(a) First, to the payment of the costs and expenses of sale and of any judicial proceedings
wherein the same may be made; including reasonable compensation to Trustee and Beneficiary,
their agents and counsel, and to the payment of all expenses, liabilities and advances made or
incurred by Trustee under this Deed of Trust, together with interest on all advances made by
Trustee at the maximum rate permitted by law to be charged by Trustee.
(b) Second, to the payment of any and all sums expended by Beneficiary under the terms hereof
(including, but not limited to, sums paid by Beneficiary on the prior trust deed) not then repaid
and all other sums required to be paid by Trustor pursuant to any provisions of this Deed of Trust
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or the Promissory Note, including, without limitation, all expenses, liabilities and advances made
or incurred by Beneficiary under this Deed of Trust or in connection with the enforcement hereof,
together with interest thereon as herein provided.
(c) Third, to the payment of the entire amount then due, owing or unpaid upon the Promissory
Note, including attorney's fees and costs.
(d) Fourth, all amounts otherwise due Beneficiary.
(e) The remainder, if any, to the person or persons legally entitled thereto.
SECTION 10.06. Waiver of Marshaling. Trustor, for itself and for all persons hereafter
claiming through or under it or who may at any time hereafter become holders of liens junior to
the lien of this Deed of Trust, hereby expressly waives and releases all rights to direct the order in
which any of the Property shall be sold in the event of any sale or sales pursuant hereto, and to
have any of the Property and/or other property now or hereafter constituted security for any of the
indebtedness secured hereby, marshaled upon any foreclosure of this Deed of Trust or for any
other security for any of said indebtedness.
SECTION 10.07. Remedies Cumulative. No remedy herein conferred upon or reserved to
Trustee or Beneficiary is intended to be exclusive of any other remedy herein or by law provided,
but each shall be cumulative and shall be in addition to every other remedy given hereunder or
now or hereafter existing at law or in equity or by statute. No delay or omission of Trustee or
Beneficiary to exercise any right or power accruing upon any Event of Default shall impair any
right or power or shall be construed to be a waiver of any Event of Default or any acquiescence
therein; and every power and remedy given by this Deed of Trust to Trustee or Beneficiary may
be exercised from time to time as often as may be deemed expedient by Trustee or Beneficiary. If
there exists additional security for the performance of the obligations secured hereby, the holder
of the Promissory Note, at its sole option, and without limiting or affecting any of its rights or
remedies hereunder, may exercise any of the rights and remedies to which it may be entitled
hereunder either concurrently with whatever rights and remedies it may have in connection with
such other security or in such order as it may determine. Any application of any amounts or any
portion thereof held by Beneficiary at any time as additional security hereunder, whether
pursuant to this deed of trust or otherwise, to any indebtedness secured hereby shall not extend or
postpone the due dates of any payments due from Trustor to Beneficiary hereunder or under the
Promissory Note, or change the amounts of any such payments or otherwise be construed to cure_
or waive any default or notice of default hereunder or invalidate any act done pursuant to any
such default or notice. In the event that Beneficiary shall have proceeded to enforce any right
under this Deed of Trust by foreclosure, sale, entry or otherwise, and such proceedings shall have
been discontinued or abandoned for any reason or shall have been determined adversely, then,
and in every such case, Trustor and Beneficiary shall be restored to their former positions and
rights hereunder with respect to the Property subject to the lien hereof.
ARTICLE 11. MISCELLANEOUS
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SECTION 11.01. Severability. In the event that any one or more of the provisions contained in
this Deed of Trust shall for any reason be held to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or,unenforceability shall not affect any other provision of this
Deed of Trust, and this Deed of Trust shall be construed as if such invalid, illegal or
unenforceable provision had never been contained herein.
SECTION 11.02. Certain Charges. Trustor agrees to pay the charges of Beneficiary for any
service rendered Trustor, or on its behalf, connected with this Deed of Trust or the indebtedness
secured hereby, including, without limitation, delivering to an escrow holder a request for full or
partial reconveyance of this Deed of Trust, transmitting to an escrow holder moneys secured
hereby, changing the records pertaining to this Deed of Trust and indebtedness secured hereby,
showing a new owner of the Property and replacing an existing policy of insurance held
hereunder with another such policy.
SECTION 11.03. Notices. All notices expressly provided hereunder to be given by Beneficiary
to Trustor and all notices and demands of any kind or nature whatsoever that Trustor may be
required or may desire to give to or serve on Beneficiary shall be in writing and shall be served
by first class or registered or certified mail, return receipt requested. Any such notice or demand
so served shall be deposited in the United States mail, with postage thereon fully prepaid and
addressed to the party so to be served at its address above stated or at such other address of which
said party shall have theretofore notified in writing, as provided above, the party giving such
notice. Service of any such notice or demand so made shall be deemed effective on the date of
actual delivery as shown by the addressee's return receipt or the expiration of forty -eight (48)
hours after the date of mailing, whichever is the earlier in time, except that service of any notice
of default or notice of sale provided or required by law shall, if mailed, be deemed effective on
the date of mailing.
SECTION 11.04. Trustor Not Released. Extension of the time for payment or modification of
the terms of payment of any sums secured by this Deed of Trust granted by Beneficiary to any
successor -in- interest of Trustor shall not operate to release, in any manner, the liability of the
original Trustor. Beneficiary shall not be, required to commence proceedings against such
successor or refuse to extend time for payment or otherwise modify the terms of the payment of
the sums secured by this Deed of Trust by reason of any demand made by the original Trustor.
Without affecting the liability of any person, including Trustor, for the payment of any
indebtedness secured hereby, or the lien of this Deed of Trust on the remainder of the Property
for the full amount of any such indebtedness and liability unpaid, Beneficiary and Trustee are
respectively empowered as follows:. Beneficiary may from time to time and without notice (a)
release any person liable for the payment of any of the indebtedness, (b) extend the time or
otherwise alter the terms of payment of any of the indebtedness, (c) accept additional real or
personal property of any kind as security therefor, whether evidenced by deeds of trust,
mortgages, security agreements or any other instruments of security, or (d) alter, substitute or
release any property securing the indebtedness; Trustee may, at any time and from time to time,
upon the written request of Beneficiary (a) consent to the making of any map or plat of the
Property or any part thereof; (b) join in granting any easement or creating any restriction thereon,
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