HomeMy WebLinkAboutWASHINGTON SANTA ANA HOUSING PARTNERS, L (3).Pi,ecorded at the Request of
Old Republic Title Company -
Oak1 i and
�O 12ib--2..(
FREE RECORDING REQUESTED PURSUANT
TO GOVERNMENT CODE SECTION 27383
When Recorded Mail to
C� City of Santa Ana
Clerk of the Council
20 Civic Center Plaza (M-30)
P.O. Box 1988
Santa Ana, California 92702
Attention: Clerk of the Council
No fee per GC27388.1; recorded in
connection with concurrent transfer
subject to imposition of
documentary transfer tax
RE UIRED
Recorded in Official Records, Orange County
Hugh Nguyen, Clerk -Recorder
IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII NO FEE
* $ R 0 0 1 3 8 7 0 0 4 3 S*
202200025927412:43 pm 07/26/22
105 407A D11 A36 39
0.00 0.00 0.00 0.00 114.00 0.00 0.000.000.00 0.00
A-2022-133-01
INSURANCE NOT Q CITY NEIGBHORHOOD STABILIZATION PROGRAM
WORK MAY PROCEED DEED OF TRUSTAND ASSIGNMENT OF RENTS
CLERK OF COUNCIL(1126, 1136 & 1146 East Washington Avenue, Santa Ana, California)
DATE-
CIS (o)
6, THIS DEED OF TRUST AND ASSIGNMENT OF RENTS ("Deed of Trust") is made as of this
C��r )Vr "21st day of July, 2022, by Washington Santa Ana Housing Partners, L.P., a California limited
partnership, ("Trustor"), to [ ) __ ], as trustee ("Trustee"), for the benefit of the City of Santa
Ana, a'charter city and municipal corporation, as beneficiary ("Beneficiary").
�Clc1 P2r�Ulotl�Ti'I-IZG�u(xuu.lcc�t{r;.mih._Lc�v+f�eY�—
FOR GOOD AND VALUABLE CONSIDERATItON, including the indebtedness herein
recited and the trust herein created, the receipt of which is hereby acknowledged, Trustor hereby
irrevocably grants, transfers, conveys and assigns to Trustee, IN TRUST, WITH POWER OF
SALE AND RIGHT OF ENTRY AND POSSESSION, for the benefit and security of
Beneficiary, under and subject to the terms and conditions hereinafter set forth, Trustor's
leasehold interest in the property located in the City of Santa Ana, State of California, that is
described in Exhibit A, attached hereto and incorporated herein by this reference (the
"Property"), on which Trustor intended to construct and operate an apartment complex
commonly known as Crossroads at Washington.
TOGETHER WITH all interest, estates or other claims, both in law and in equity which
Trustor now has or may hereafter acquire in the Property and the rents;
TOGETHER WITH all easements, rights -of -way and rights used in connection therewith
or as a means of access thereto, including without limiting the generality of the foregoing, all
tenements, hereditament and appurtenances thereof and thereto;
TOGETHER WITH any and all buildings, improvements and landscaping of every kind
and description now or hereafter erected thereon, and all property of the Trustor now or hereafter
affixed to or placed upon the Property (sometimes collectively referred to as the
"Improvements");
The Crossroads at Washington
City NSP Deed of Trust
TOGETHER WITH all building materials and equipment now or hereafter delivered to
said Property and intended to be installed therein;
TOGETHER WITH all right, title and interest of Trustor, now owned or hereafter
acquired, in and to any land lying within the right-of-way of any street, open or proposed,
adjoining the Property, and any and all sidewalks, alleys, strips and gores of land adjacent to or
used in connection with the Property and/or Improvements;
TOGETHER WITH all estate, interest, right, title, other claim or demand, of every
nature, in and to such property, including the Property, both in law and in equity, including, but
not limited to, all oil, gas and mineral rights (including royalty and leasehold rights relating
thereto), all water and water rights and shares of stock relating thereto, all leases of all or any
portion of the Property or Improvements entered into by Truster as lessor or lessee, all options to
purchase or lease all or any portion of the Property and/or Improvements, all deposits made with
or other security given by Truster to third parties including, utility companies, the proceeds from
any or all of such property, including the Property, claims or demands with respect to the
proceeds of insurance in effect with respect thereto, which Truster now has or may hereafter
acquire, any and all awards made for the taking by eminent domain or by and proceeding or
purchase in lieu thereof of the whole or any part of such property; and
TOGETHER WITH all articles of personal property or fixtures now or hereafter attached
to, located on, installed in or used in and about the Property and/or Improvements, including
without limitation, all partitions, generators, screens, boilers, furnaces, pipes, plumbing,
elevators, cleaning and sprinkler systems, fire extinguishing machinery and equipment, water
tanks, heating, ventilating, air conditioning and air cooling machinery and, equipment, gas and
electric machinery and equipment and other appliances, machinery and equipment and other
fixtures of every nature, all of which shall remain real property, and all renewals or replacements
thereof or articles in substitution therefor, whether or not the same are, or shall be attached to the
Property in any manner.
TOGETHER WITH all present and future accounts, general intangibles, chattel paper,
deposit accounts, investment property, instruments and documents as those terms are defined in
the California Commercial Code, now or hereafter relating or arising with respect to the Property
and/or Improvements and/or the use thereof or any improvements thereto, including without
limitation: (i) all rights to the payment of money, including escrow proceeds arising out of the
sale or other disposition of all or any portion of the Property and/or Improvements; (ii) all
deposit accounts and other accounts and funds created under or pursuant to the Loan Agreement
(as defined below), and the other Loan Documents, all amounts now or hereafter on deposit
herein, and all interest and other earnings thereon with the exception of the operating reserve
created pursuant to Borrower's Partnership Agreement (as defined in the Loan Agreement); (iii)
all use permits, occupancy permits, construction and building permits, and all other permits and
approvals required by any governmental or quasi -governmental authority in connection with the
development, construction, use, occupancy or operation of the Property and/or Improvements;
(iv) any and all agreements relating to the occupancy and/or operation of the Property and/or
Improvements, including without limitation service, property management, landscaping,
gardening, consulting and other contracts of every nature (to the extent the same are assignable);
(v) all lease or rental agreements; (vi) all names under which the Property and/or Improvements
N
The Crossroads at Washington
City NSP Deed of Trust
are now or hereafter known and all rights to carry on business under any such names or any
variant thereof; (vii) all trademarks relating to the Property and/or Improvements and/or the use,
occupancy or operation thereof; (viii) all goodwill relating to the Property and/or Improvements
and/or the use, occupancy or operation thereof; (ix) all insurance proceeds and condemnation
awards arising out of or incidental to the ownership, use, occupancy or operation of the Property
and/or Improvements; (x) all reserves, deferred payments, deposits, refunds, cost savings, bonds,
insurance policies and payments of any kind relating to the Property and/or Improvements; (xi)
all water stock, if any, relating to any Property and/or Improvements; (xii) all supplements,
modifications and amendments to the foregoing and all present and future accessions, additions,
attachments, replacements and substitutions of or to any or all of the foregoing; and (xiii) all cash
and noncash proceeds and products of any or all of the foregoing, including without limitation all
monies, deposit accounts, insurance proceeds and other tangible or intangible property received
upon a sale or other disposition of any of the foregoing, whether voluntary or involuntary; and
TOGETHER WITH all present and future goods, equipment and inventory, as those
terms are defined in the California Commercial Code, and all other present and future personal
property of any kind or nature whatsoever, now or hereafter located at, upon or about the
Property and/or Improvements, or used or to be used in connection with or relating or arising
with respect to the Property and/or Improvements, the use thereof or any improvements thereto.
All of the foregoing, together with the Property, is herein referred to as the "Security".
To have and to hold the Security together with acquittances to the Trustee, its successors and
assigns forever.
FOR THE PURPOSE OF SECURING:
(a) Payment of and performance of all indebtedness of Trustor to Beneficiary as set
forth in the Loan Agreement (defined in Section 1.5 below) and the Note (defined in Section 1.6
below) in the original principal amount of $1,637,420 until paid or canceled. Said principal and
other payments shall be due and payable as provided in the Loan Agreement and the Note. The
Loan Agreement and the Note and all their terms are incorporated herein by reference, and this
conveyance shall secure any and all extensions thereof, however evidenced;
(b) Payment and performance of any sums advanced by Beneficiary to protect the
Security pursuant to the terms and provisions of this Deed of Trust with interest thereon as
provided herein;
(c) Payment and performance of every other obligation, covenant or agreement of
Trustor contained in this Deed of Trust and in the other "Loan Documents" (as such term is
defined in the Loan Agreement);
(d) Payment and performance of all renewals, extensions, supplements, amendments
and other modifications of any of the foregoing, including without limitation modifications that
are evidenced by new or additional docuinents or that change the rate of interest on any
obligation.
All of the foregoing obligations are referred to collectively herein as the "Obligations".
3
7nie Crossroads at Washington
City NSP Deed of Tmst
AND TO PROTECT THE SECURITY OF THIS DEED OF TRUST, TRUSTOR
COVENANTS AND AGREES:
Section 1. DEFINITIONS
1.1 Defined Terms. In addition to the terms defined elsewhere in this Deed of Trust,
the following terms shall have the following meanings in this Deed of Trust:
"Debt Instrument" means any debt, loan, mortgage, deed of trust, regulatory agreement
or security instrument relating to the Property or the Security, including, but not limited to, the
Loan Documents.
"Environmental Reports" [list to be provided under separate cover]
"Hazardous Substance" means:
(a) any oil, flammable substance, explosive, radioactive material, hazardous
waste or substance, toxic waste or substance or any other waste, material, or pollutant that
(i) poses a hazard to the Property or to persons on the Property or
(ii) causes the Property to be in violation of any Hazardous Substance
Law;
(b) asbestos in any form;
(c) urea formaldehyde foam insulation;
(d) transformers or other equipment that contain dielectric fluid containing
levels of polychlorinated biphenyls;
(e) radon gas;
(f) any chemical, material, or substance defined as or included in the
definition of "hazardous substance," "hazardous substances," "hazardous wastes," "hazardous
materials," "extremely hazardous waste," "restricted hazardous waste," or "toxic substances" or
words of similar import under any applicable local, state, or federal law or under the regulations
adopted or publications promulgated pursuant to those laws, including, but not limited to, any
Hazardous Substance Law, Code of Civil Procedure § 564, as amended from time to time, Code
of Civil Procedure § 726.5, as amended from time to time, Code of Civil Procedure §736, as
amended from time to time, and Civil Code § 2929.5, as amended from time to time;
(g) any other chemical, material, or substance, exposure to which is
prohibited, limited, or regulated by any governmental authority with authority over the Property
or which may pose a hazard to the health and safety of the occupants of the Property or the
owners or occupants of property adjacent to or surrounding the Property, or any other person
coming on the Property or any adjacent property; and
4
The Crossroads at Washington
City NSP Deed ofTtust
environment.
(h) any other chemical, material, or substance that may pose a hazard to the
The term Hazardous Substance shall not include materials or substances
commonly used in the construction and operation of an apartment complex in
accordance with applicable Hazardous Substance Law.
"Hazardous Substance Claim" means any enforcement, cleanup, removal, remedial, or
other governmental, regulatory, or private actions, agreements, or orders threatened, instituted, or
completed pursuant to any Hazardous Substance Law together with all claims made or
threatened by any third party against Truster or the Property relating to damage, contribution,
cost -recovery compensation, loss, or injury resulting from the presence, release or discharge of
any Hazardous Substance.
"Hazardous Substance Law" means any federal, state, or local law, ordinance,
regulation, or policy relating to the environment, health, and safety, any Hazardous Substance
(including, without limitation, the use, handling, transportation, production, disposal, discharge,
or storage of the substance), industrial hygiene, soil, groundwater, and indoor and ambient air
conditions or the environmental conditions on the Property, including, without limitation, the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980 [42 USCS
§§ 9601 et seq.], as amended from time to time; the Hazardous Substances Transportation Act
[49 USCS §§ 1801 et seq.], as amended from time to time; the Resource Conservation and
Recovery Act [42 USCS §§ 6901 et seq.], as amended from time to time; the Federal Water
Pollution Control Act [33 USCS §§ 1251 et seq.], as amended from time to time; the Hazardous
Substance Account Act [Health and Safety Code §§ 25300 et seq.], as amended from time to
time; the Hazardous Waste Control Law [Health and Safety Code §§ 25100 et seq.], as amended
from time to time; the Medical Waste Management Act [Health and Safety Code §§ 25015 et
seq.], as amended from time to time; and the Porter -Cologne Water Quality Control Act [Water
Code §§ 13000 et seq.], as amended from time to time.
"Loan Agreement" means that certain Loan Agreement, which terms and provision are
incorporated into this Deed of Trust by reference, of even date herewith between Trustor and
Beneficiary.
"Note" means that certain promissory note of even date herewith executed by the Trustor,
the payment of which is secured by this deed of Trust.
"Principal" means the aggregate of all principal and interest due under the Note.
"Release" means any spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, leaching, dumping, or disposing into the environment, including
continuing migration, of Hazardous Substances that goes into the soil, surface water, or
groundwater of the Property, whether or not caused by, contributed to, permitted by, acquiesced
to, or known to Trustor.
Section 2. GENERAL COVENANTS OF TRUSTOR REGARDING THE
PROPERTY, IMPROVEMENTS AND SECURITY
5
The Crossroads at Washington
City NSP Deed of Tms(
2.1. Payment of Secured Obligations.
Trustor shall duly and punctually pay and perform all Obligations, including but not
limited to all terms, covenants, conditions and agreements set forth in the Debt Instruments, the
Loan Agreement, the Note and any other agreement of any nature whatsoever now or hereafter
involving or affecting the Security or any part thereof.
2.2. Maintenance, Repair and Modification.
(a) The Trustor agrees that at all times prior to full payment of the sum owed under
the Note, the Trustor will, at the Trustor's own expense, maintain, preserve and keep the Security
or cause the Security to be maintained and preserved in good condition and repair and in a
prudent and businesslike manner. The Trustor will from time to time make or cause to be made
all repairs, replacements and renewals to the Security, which are necessary or appropriate. The
Beneficiary shall have no responsibility in any of these matters or for the making of
improvements or additions to the Security.
(b) Trustor shall not remove, demolish or substantially alter any of the Improvements,
other than to make repairs in the ordinary course of business of a non-structural nature which
serve to preserve or increase the value of the Security without Beneficiary's prior written
consent, which consent shall not be unreasonably withheld so long as Trustor provides
reasonable evidence to Beneficiary that, following such demolition and restoration and/or
alteration, the Improvements shall have a fair market value at least equal to their fair market
value prior to such demolition and restoration and/or alteration; Trustor shall complete promptly
and in a good and workmanlike manner any Improvement which may now or hereafter be
constructed and promptly restore in like manner any Improvement which may be damaged or
destroyed thereon from any cause whatsoever, and pay when due all claims for labor performed
and materials furnished therefor; Trustor shall comply with all laws, ordinances, rules,
regulations, covenants, conditions, restrictions and orders of any governmental authority now or
hereafter affecting the conduct or operation of Trustor's business or the security or any part
thereof or requiring any alteration or improvement to be made thereon; Trustor shall not commit,
suffer or permit any act to be done in, upon or to the Security or any part thereof in violation of
any such laws, ordinances, rules, regulations or orders, or any covenant, condition or restriction
now or hereafter affecting the Security; Trustor shall not commit or permit any waste or
deterioration of the Security, and shall keep and maintain abutting grounds, sidewalks, roads,
parking and landscape areas in good and neat order and repair; Trustor will not take (or fail to
take) any action, which if taken (or not so taken) would increase in any way the risk of fire or
other hazard occurring to or affecting the Security or otherwise would impair the security of
Beneficiary in the Security; Trustor shall comply with the provisions of all leases, if any,
constituting a portion of the Security; Trustor shall not abandon the Security or any portion
thereof or leave the Security unprotected, unguarded, vacant or deserted; Trustor shall not
initiate, join in or consent to any change in any zoning ordinance, general plan, specific plan,
private restrictive covenant or other public or private restriction limiting the uses which may be
made of the Security by Trustor or by the owner thereof; Trustor shall secure and maintain in full
force all permits necessary for the use, occupancy and operation of the Security; except as
otherwise prohibited or restricted by the Loan Agreement and the other instruments and
documents executed in connection with the transaction to which the Loan Agreement pertains or
6
The Crossroads at Washington
City NSP Deed of roast
any of them, Truster shall do any and all other acts which may be reasonably necessary to protect
or preserve the value of the Security and the rights of Trustee and Beneficiary with respect
thereto.
2.3. Granting of Easements.
Truster may not grant easements, licenses, rights -of -way or other rights or privileges in
the nature of easements with respect to any property or rights included in the Security except
those required or desirable for installation and maintenance of public utilities including, without
limitation, water, gas, electricity, sewer, telephone and telegraph, or those required by law.
2.4. Agreement to Pay Attorneys' Fees and Expenses.
In the event of any Event of Default (as defined below) hereunder, and if the Beneficiary
should employ attorneys or incur other expenses for the collection of amounts due or the
enforcement of performance or observance of an obligation or agreement on the part of the
Trustor in this Deed of Trust, the Trustor agrees that it will, on demand therefor, pay to the
Beneficiary the reasonable fees of such attorneys and such other reasonable expenses so paid by
the Beneficiary; and any such amounts paid by the Beneficiary shall be added to the
indebtedness secured by the lien of this Deed of Trust, and shall bear interest from the date such
expenses are paid at the Agreed Rate (as defined in Section 3.1(d) below).
2.5. Payment of the Principal.
The Trustor shall pay to the Beneficiary the Principal and any other payments as set forth
in the Note in the amounts and by the times set out therein.
2.6. Fixture Filing and Security Agreement.
(a) To the maximum extent permitted by law, the personal property subject to this
Deed of Trust shall be deemed to be fixtures and part of the real property and this Deed of Trust
shall constitute a fixture filing under the California Commercial Code. As to any personal
property not deemed or permitted to be fixtures, this Deed of Trust shall constitute a security
agreement under the California Commercial Code and Truster hereby grants to Beneficiary a
security interest in all of Trustor's right, title and interest, whether now existing or hereafter
arising, in and to any portion of the Property which constitutes personal property (the "Personal
Property").
(b) Truster hereby represents and warrants to Beneficiary that: (1) Truster is the
owner of the Personal Property and no other person has any right, title, claim or interest (by way
of security interest or other lien or charge or otherwise) in, against or to the Personal Property
other than any senior lender or lien holder approved in writing by Beneficiary; (2) the Personal
Property is free from all liens, security interests, encumbrances and adverse interests, except
Permitted Encumbrances (hereinafter defined); (3) no financing statement or similar filing
covering any of the Personal Property, and naming any secured party other than Beneficiary and
the holders of Permitted Encumbrances, is on file in any public office; (4) each account, general
intangible, chattel paper, deposit account, instrument, document, agreement, contract or right to
the payment of money constituting Personal Property (collectively, the "Rights to Payment"), if
7
The Crossroads at Washington
City NSP Deed of Trust
any, is genuine and enforceable in accordance with its terms against the party obligated to pay
the same and (5) the Personal Property is not used nor was the Personal Property purchased for
personal or family use by Truster.
(c) Trustor hereby agrees: (1) to pay, prior to delinquency, all taxes, assessments,
charges, encumbrances and liens now or hereafter imposed upon or affecting all or any part of
the Personal Property; (2) not to amend, modify, supplement, terminate or cancel any of the
Personal Property; (3) without the prior written consent of Beneficiary, not to remove all or any
part of the tangible Personal Property from the Property; (4) to give Beneficiary thirty (30) days'
prior written notice of any change in Trustor's residence, principal place of business, chief
executive office or trade names or styles; (5) to appear in and defend any action or proceeding
which may affect the Personal Property (including, without limitation, actions, proceedings and
claims which may affect Truster's title to the Personal Property or the validity or priority of
Beneficiary's security interest in the Personal Property); (6) to indemnify Beneficiary against all
claims, demands and liabilities of every kind caused by the Personal Property; and (7) upon not
less than 72 hours' prior written notice and during regular business hours, to permit Beneficiary
to enter Trustor's premises to inspect the Personal Property; provided, that Trustor shall have the
right to require that a representative of Trustor be present during any such entry made while any
construction and/or rehabilitation work is occurring. Trustor further agrees (8) to fully and timely
perform all of its obligations under and with respect to all Rights of Payment and to diligently
enforce all of the obligations of each obligor thereunder; (9) not to amend, modify, supplement,
cancel or terminate any of the Rights to Payment in any material respect without the prior written
consent of Beneficiary; (10) to keep the Rights to Payment and all proceeds free and clear of all
defaults, defenses, rights of offset and counterclaim; (11) to take or bring, in Beneficiary's name
or in the name of Trustor, as Beneficiary may require, all actions, suits or proceedings reasonably
deemed necessary by Beneficiary to effect collection or to realize upon Rights to Payment; and
(12) not to commingle Rights to Payment or collections thereunder with other property.
(d) As soon as practicable, and in any event within ten (10) days, Trustor shall notify
Beneficiary of: (1) any attachment or other legal process levied against any of the Personal
Property; (2) any information received by Truster which may in any manner materially and
adversely affect the value of the Personal Property or the rights and remedies of Beneficiary with
respect thereto; and (3) the removal of any of the Personal Property to a new location other than
in the ordinary course of business and the removal of any records of Truster relating to the
Personal Property to any location other than the Land and Improvements.
(e) Truster hereby irrevocably constitutes and appoints Beneficiary as its attorney -in -
fact to, after the occurrence and during the occurrence of an Event of Default: (1) perform any
obligation of Trustor hereunder in Trustor's name or otherwise; (2) give notice of Beneficiary's
rights in the Rights to Payment, to enforce the same, and make extension agreements with
respect thereto; (3) release persons liable on the Rights to Payment and to give receipts and
acquittances and compromise disputes in connection therewith; (4) release security for the Rights
to Payment; (5) resort to security for the Rights to Payment in any order; (5) prepare, execute,
file, record or deliver notes, assignments, schedules, designation statements, financing
statements, continuation statements, termination statements, and other documents to perfect
preserve or release Beneficiary's interest in the Rights to Payment; and (6) do all acts and things
8
The Crossroads at Washington
City NSP Deed ofTmst
and execute all documents in the name of Trustor or otherwise, deemed by Beneficiary as
necessary, proper and convenient in connection with the preservation, perfection or enforcement
of its rights hereunder. The power of attorney granted hereunder is coupled with an interest and
is irrevocable.
2.7. Financing Statement.
The Trustor shall execute and deliver to the Beneficiary such financing statements
pursuant to the appropriate statutes, and any other documents or instruments as are required to
convey to the Beneficiary a valid perfected security interest in the Security. The Trustor agrees
to perform all acts that the Beneficiary may reasonably request so as to enable the Beneficiary to
maintain such valid perfected security interest in the Security in order to secure the payment of
the Note in accordance with its terms. The Beneficiary is authorized to file a copy of any such
financing statement in any jurisdiction(s) as it shall deem appropriate from time to time in order
to protect the security interest established pursuant to this instrument.
2.8. Operation of the Security.
The Trustor agrees and covenants to operate the Security in full compliance with the
Loan Agreement and the Debt Instruments.
2.9. Inspection of the Security.
The Trustor covenants and agrees that at any and all reasonable times during regular
business hours and upon not less than 72 hours' prior written notice, the Beneficiary and its duly
authorized agents, attorney's experts, engineers, accountants and representatives, shall have the
right, without payment of charges or fees, to inspect all or any portion of the Security, including,
but not limited to, the right to inspect and copy all reports and records pertaining thereto
provided, that Trustor shall have the right to require that a representative of Trustor be present
during any entry onto the Property made while any construction and/or rehabilitation work is
occurring.
2.10. Nondiscrimination.
The Trustor herein covenants by and for itself, its heirs, executors, administrators, and
assigns, and all persons claiming under or through them, that there shall be no discrimination
against or segregation of, any person or group of persons on account of race, color, creed,
religion, sex, sexual orientation, age, marital status, national origin, ancestry or disability in the
sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Security, nor shall the
Trustor itself or any person claiming under or through it establish or permit any such practice or
practices of discrimination or segregation with reference to the selection, location, number, use
or occupancy of tenants, lessees, subtenants, sublessees or vendees in the Security. The
foregoing covenants shall run with the land.
2.11. Subrogation and Waiver of Offset.
(a) Trustor waives any and all right to claim or recover against Beneficiary, its
officers, employees, agents and representatives, for loss of or damage to Trustor, the Security,
9
The Crossroads at Washington
City NSP Deed of Tivst
Trustor's property or the property of others under Trustor's control from any cause insured
against or required to be insured against by the provisions of this Deed of Trust; provided,
however, that this waiver of subrogation shall not be effective with respect to any policy of
insurance permitted or required by this Deed of Trust if (i) such policy prohibits, or if coverage
thereunder would be reduced as a result of, such waiver of subrogation and (ii) Trustor is unable
to obtain from a carrier issuing such insurance a policy that, by special endorsement or
otherwise, permits such a waiver of subrogation.
(b) Except as otherwise specifically provided herein, all amounts payable by Trustor
pursuant to this Deed of Trust shall be paid without notice, demand, counterclaim, setoff,
deduction or defense and without abatement, suspension, deferment, diminution or reduction,
and the obligations and liabilities of Trustor hereunder shall in no way be released, discharged or
otherwise affected (except as expressly provided herein) by reason of (i) any damage to or
destruction of or any condemnation or similar taking of the Security or any part thereof, (ii) any
restriction or prevention of or interference by any third party with any use of the Security or any
part thereof; (iii) any title defect or encumbrance or any eviction from the Security or any part
thereof by title paramount or otherwise; (iv) any bankruptcy, insolvency, reorganization,
composition, adjustment, dissolution, liquidation or other like proceeding relating to Beneficiary,
or any action taken with respect to this Deed of Trust by any trustee or receiver of Beneficiary,
or by any court, in any such proceeding; (v) any claim which Trustor has or might have against
Beneficiary; (vi) any default or failure on the part of Beneficiary to perform or comply with any
of the terms hereof or of any other agreement with Trustor; or (vii) any other occurrence
whatsoever, whether similar or dissimilar to the foregoing. Except as expressly provided herein,
Trustor waives all rights now or hereafter conferred by statute or otherwise to any abatement,
suspension, deferment, diminution or reduction of any sum secured hereby and payable by
Truster.
2.12. Utilities.
Truster shall pay or cause to be paid when due all utility charges which are incurred for
the benefit of the Security or which may become a charge or lien against the Security for gas,
electricity, water, sewer services or other fees and charges for utilities furnished to the Security
and all other assessments or charges of a similar nature, whether public or private, affecting or
related to the Security or any portion thereof, whether or not such taxes, assessments or charges
are or may become liens thereon.
2.13. Actions by Beneficiary to Preserve Property.
If Trustor fails to make any payment or to do any act as and in the manner provided in
this Deed of Trust, Beneficiary and Trustee, and each of them, each in its own discretion, without
obligation to do so, without releasing Trustor from any Obligation, and subject only to the notice
and cure provisions of the Loan Agreement, may make or do the same in such manner and to
such extent as either may deem necessary to protect the security hereof. In connection therewith
(without limiting their general and other powers, whether conferred herein, in another Loan
Document or by law), Beneficiary and Trustee shall each and are hereby given the right, but not
the obligation: (i) to enter upon and take possession of the Security; (ii) to make additions,
alterations, repairs and improvements to the Security which either of them consider necessary or
10
The Crossroads at Washington
City NSP Deed or Trust
proper to keep the Security in good condition and repair; (iii) to appear and participate in any
action or proceeding which may affect the security hereof or the rights or powers of Beneficiary
or Trustee; (iv) to pay, purchase, contest or compromise any encumbrance, claim, charge, lien or
debt which in the judgment of either may affect the security of this Deed of Trust or be prior or
superior hereto; and (v) in exercising such powers to pay necessary expenses, including
employment of counsel or other necessary or desirable consultants. Trustor shall reimburse
Beneficiary on demand for all costs incurred by Beneficiary in connection with actions which
Beneficiary reasonably deems advisable to protect its interest under the Loan Agreement and all
such amounts shall bear interest at the Agreed Rate following demand and be secured hereby.
2.14. Transfer of Property by Trustor.
Prior to repayment of the Note, Trustor agrees that Trustor shall not sell or transfer the
Security or any interest therein or sell or transfer all or substantially all of the assets of Trustor or
any of them except as may be provided in the Loan Agreement.
2.15. Additional Security.
No other security now existing, or hereafter taken, to secure the Obligations secured
hereby or the liability of any maker, surety guarantor or endorser with respect to such
Obligations, or any of them, shall be impaired or affected by the execution of this Deed of Trust;
and all additional security shall be taken, considered and held as cumulative. The taking of
additional security, execution of partial releases of the Security, or any extension of the time of
payment of the indebtedness shall not diminish the force, effect or lien of this Deed of Trust and
shall not affect or impair the liability of any maker, surety, guarantor or endorser for the payment
of said indebtedness. In the event Beneficiary at any time holds additional security for any of the
Obligations secured hereby, it may enforce the sale thereof or otherwise realize upon the same, at
its option, either before, concurrently, or after a sale is made hereunder.
2.16. Liens.
Trustor shall not cause, incur suffer or permit to exist or become effective any lien,
encumbrance or charge upon all or any part of the Property, the Improvements or any interest
therein other than (a) easements, rights of way, covenants, conditions, restrictions, liens, and
other title limitations approved in writing by Beneficiary prior to the execution of this Deed of
Trust, (b) immaterial easements and rights of way which are required by governmental
authorities as a condition to the use and operation of the Improvements which are approved in
writing by Beneficiary after the execution of this Deed of Trust, (c) easements, rights of way,
covenants, conditions, restrictions, liens and other title limitations allowed pursuant to Section
2.3 hereof and (d) deeds of trust, regulatory agreements and covenants contained in that certain
lenders' title policy issued to the Beneficiary in connection with the Loan on or about the date
hereof (the "Permitted Encumbrances"). Trustor shall pay and promptly discharge, at Trustor's
cost and expense, all liens, encumbrances and charges upon the Security, or any part thereof or
interest therein other than the Permitted Encumbrances; provided, that the existence of any
mechanic's, laborer's, materialman's, supplier's or vendor's lien or right thereto shall not
constitute a violation of this Section if payment is not yet due under the contract which is the
foundation thereof. Trustor shall have the right to contest in good faith the validity of any such
11
The Crossroads at Washington
City NSP Deed of Trust
lien, encumbrance or charge, provided Trustor shall first deposit with the Beneficiary a bond or
other security reasonably satisfactory to Beneficiary in such amounts as Beneficiary shall
reasonably require, but not more than one hundred fifty percent (150%) of the amount of the
claim or shall post a bond authorized by statute in lieu thereof, and provided further that Trustor
shall thereafter diligently proceed to cause such lien, encumbrance or charge to be removed and
discharged. If Trustor shall fail to remove and discharge any such lien, encumbrance, or charge,
then, in addition to any other right or remedy of Beneficiary, Beneficiary may, but shall not be
obligated to, discharge the same, without inquiring into the validity of such lien, encumbrance or
charge nor into the existence of any defense or offset thereto, either by paying the amount
claimed to be due, or by procuring the discharge of such lien, encumbrance or charge by
depositing in court a bond or the amount claimed, or otherwise giving security for such claim, in
such manner as is or may be prescribed by law. Trustor shall, promptly upon demand therefor
by Beneficiary, pay to Beneficiary an amount equal to all costs and expenses incurred by
Beneficiary in connection with the exercise by Beneficiary of the foregoing right to discharge
any such lien, encumbrance or charge, together with interest thereon from the date of such
expenditure at the Agreed Rate and, until paid, such sums shall be secured hereby.
2.17. Beneficiary's Powers.
Without affecting the liability of any other person liable for the payment of any
Obligation herein mentioned, and without affecting the lien or charge of this Deed of Trust upon
any portion of the Security not then or theretofore released as security for the full amount of all
unpaid Obligations, Beneficiary may, from time to time and without notice: (a) release any
person so liable, (b) extend the maturity or alter any of the terms of any such Obligation (to the
extent that Beneficiary is so allowed under the Loan Agreement), (c) grant other indulgences, (d)
release or reconvey, or cause to be released or reconveyed at any time at Beneficiary's option any
parcel, portion or all of the Security, (e) take or release any other or additional security for any
Obligation herein mentioned, or (fl make compositions or other arrangements with debtors in
relation thereto. By accepting payment or performance of any Obligation secured by this Deed
of Trust after the payment or performance thereof is due or after the filing of notice of default
and election to sell (other than satisfaction in full of the Obligations), Beneficiary shall not have
thereby waived its right to require prompt payment or performance, when due, of all other
Obligations secured hereby, or to declare a default for failure so to pay or perform, or to proceed
with the sale under any notice of default and election to sell theretofore given by Beneficiary, or
with respect to any unpaid balance of the indebtedness secured hereby. The acceptance by
Beneficiary of any sum in an amount less than the sum then due shall not constitute a waiver of
the obligation of Trustor to pay the entire sum then due. Trustor's failure to pay the entire sum
then due shall continue to be a default, notwithstanding the acceptance of partial payment, and,
until the entire sum then due shall have been paid, Beneficiary or Trustee shall at all times be
entitled to declare a default and to exercise all the remedies herein conferred, and the right to
proceed with a sale under any notice of default and election to sell shall in no way be impaired,
whether or not such amounts are received prior or subsequent to such notice. No delay or
omission of Trustee or Beneficiary in the exercise of any other right or power hereunder shall
impair such right or power or any other right or power nor shall the same be construed to be a
waiver of any default or any acquiescence therein.
2.18. Suits to Protect Property.
12
Mie Crossroads at Washington
City NSP Deed of Trust
Trustor agrees to appear in and defend any action or proceeding purporting to affect the
security of this Deed of Trust or any additional or other security for the obligations secured, the
interest of Beneficiary of the rights, powers and duties of Trustee, and to pay all costs and
expenses, including without limitation, cost of evidence of title and reasonable attorneys' fees, in
any action or proceeding in which Beneficiary or Trustee may appear to be made a party,
including, but not limited to, foreclosure or other proceeding commenced by those claiming a
right to any part of the Property under subordinate liens, in any action to partition or condemn all
or part of the Property, whether pursued to final judgment, and in any exercise of the power of
sale in this Deed of Trust, whether the sale is actually consummated.
Section 3. TAXES AND INSURANCE; ADVANCES
3.1. Taxes, Other Governmental Charges and Utility Charges.
(a) Trustor shall pay, prior to delinquency, all real property taxes and assessments,
general and special, and all other charges of any kind, including without limitation non-
governmental levies or assessments such as maintenance charges, levies or other charges
resulting from covenants, conditions and restrictions affecting the Security, which are assessed or
imposed upon the Security or upon Trustor as owner or operator of the Security, or become due
and payable, and which create or may create a lien upon the Security, or any part thereof, or
upon any personal property, equipment or other facility used in the operation or maintenance
thereof (all the above collectively hereinafter referred to as "Impositions"); provided, however,
that if, by law, any Imposition is payable, or may at the option of the taxpayer be paid, in
installments, Truster may pay the same in installments (together with any interest charged) as the
same become due and before any fine, penalty or cost may be added thereto for the nonpayment
of any such installment. Notwithstanding the foregoing, Trustor shall have the right to diligently
contest, in good faith and by appropriate proceedings, the validity of any Imposition, so long as
Trustor demonstrates to Beneficiary that Trustor is maintaining sufficient reserves for the
payment of all contested liabilities and so long as the security and value of Beneficiary's interest
under this Deed of Trust are not impaired as a result of such contest.
(b) If at any time after the date hereof there shall be assessed or imposed (1) a tax or
assessment on the Security in lieu of or in addition to the Impositions payable by Trustor
pursuant to this Section 3.1 hereof, or (2) a license fee, tax or assessment imposed on Beneficiary
and measured by or based in whole or in part upon the amount of the outstanding Obligations
secured hereby, then all such taxes, assessments or fees shall be deemed to be included within
the term "Impositions" as defined in this Section and Trustor shall pay and discharge the same as
herein provided with respect to the payment of Impositions. If Trustor fails to pay such
Impositions prior to delinquency or if Trustor is prohibited by law from paying such Impositions,
Beneficiary may at its option declare all Obligations secured hereby, together with all accrued
interest thereon, immediately due and payable. Anything to the contrary herein notwithstanding,
Trustor shall have no obligation to pay any franchise, estate, inheritance, income, excess profits
or similar tax levied on Beneficiary or on the Obligations secured hereby.
(c) Trustor shall deliver to Beneficiary within thirty (30) days after the date upon
which any such Imposition is due and payable by Trustor official receipts of the appropriate
taxing authority, or other proof reasonably satisfactory to Beneficiary, evidencing the payment
13
The Crossroads at Washington
City NSP Deed ofTmst
thereof. Trustor shall not suffer, pennit or initiate the joint assessment of any real and personal
property which may constitute all or a portion of the Security and the personal property or suffer,
permit or initiate any other procedure whereby the lien of real property taxes and the lien of
personal property taxes shall be assessed, levied or charged to the Security as a single Lien.
Trustor shall cause to be furnished to Beneficiary a tax reporting service, covering the Property,
of a type and duration, and with a company, reasonably satisfactory to Beneficiary.
(d) In the event that Truster shall fail to pay any of the foregoing items required by
this Section to be paid by Trustor, Beneficiary may (but shall be under no obligation to) pay the
same, after the Beneficiary has notified the Trustor of such failure to pay and the Trustor fails to
fully pay such items within fifteen (15) business days after receipt of such notice. Any amount
so advanced therefor by Beneficiary, together with interest thereon from the date of such
advance at the lesser of twelve percent (12%) per annum or the maximum rate permitted by law
(hereinafter the "Agreed Rate"), shall become an additional Obligation of Trustor to the
Beneficiary and shall be secured hereby, and Trustor agrees to pay all such amounts.
3.2. Insurance.
(a) Trustor agrees to provide insurance confonning in all respects to that required
under the Loan Agreement at all times until all amounts secured by this Deed of Trust have been
paid and all other Obligations secured hereunder fulfilled, and this Deed of Trust reconveyed.
All such insurance policies and coverages shall be maintained at Trustor's sole cost and expense.
(b) All said insurance shall have attached thereto a lender's loss payable endorsement
for the benefit of Beneficiary in form reasonably satisfactory to the Beneficiary and/or shall
name Beneficiary as an additional insured, as Beneficiary may require, and shall contain an
endorsement or agreement by the insurer that any loss shall be payable in accordance with the
terms of such policies notwithstanding any act or negligence of Trustor or any party holding
under Trustor which might otherwise result in forfeiture of said insurance and the further
agreement of the insurer waiving all rights of setoff, counterclaim and deduction against Trustor.
At Beneficiary's option, Trustor shall furnish Beneficiary with an original of all required policies
of insurance and/or a certificate of insurance with all required endorsements for each required
policy setting forth the coverage, the limits of liability, the deductible, if any, the name of the
carrier, the policy number, and the period of coverage, which certificates and endorsements shall
be executed by authorized officials of the companies issuing such insurance, or any agents or
attorneys -in -fact authorized to issue said certificates and endorsements (in which event each such
certificate and endorsements shall be accompanied by a notarized affidavit, agency agreement or
power of attorney evidencing the authority of the signatory to issue such certificate on behalf of
the insurer named therein), accompanied by a certificate from Trustor that the insurance satisfies
the requirements of the Loan Agreement, and that Beneficiary may conclusively rely on such
certificates. If Beneficiary consents (which consent shall not be unreasonably withheld or
delayed), Trustor may provide any of the required insurance through blanket policies carried by
Trustor and covering more than one location; provided, however, all such policies shall be in
form and substance and issued by companies reasonably satisfactory to Beneficiary.
(c) At least thirty (30) days prior to the expiration of each required policy, Trustor
shall deliver to Beneficiary evidence reasonably satisfactory to Beneficiary of the payment of
14
The Crossroads at Washington
City NSP Deed of Toast
premium and the renewal or replacement of such policy continuing insurance in form as required
by this Deed of Trust or the Loan Agreement. All such policies shall contain a provision that,
notwithstanding any contrary agreement between Trustor and the insurance company, such
policies will not be canceled, allowed to lapse without renewal, surrendered or materially
amended (which tern shall include any reduction in the scope, or limits of coverage), other than
for nonpayment, without at least thirty (30) days prior written notice to Beneficiary.
(d) In the event of foreclosure of this Deed of Trust or other transfer of title or
assignment of the Property in extinguishment, in whole or in part, of the debt secured hereby, all
right, title and interest of Trustor in and to all policies of insurance required by Section 3.2
hereof and any unearned premiums paid thereon shall, without further act, be assigned to and
shall inure to the benefit of and pass to the successor in interest to Trustor or the purchaser or
grantee of the Property, and Trustor hereby appoints Beneficiary its lawful attorney -in -fact to
execute an assignment thereof and any other document necessary to effect such transfer.
3.3. Advances.
In the event the Trustor shall fail to maintain the full insurance coverage required by this
Deed of Trust or shall fail to keep the Security in accordance with the Loan Agreement, the
Beneficiary, after at least twenty (20) days prior written notice to Trustor, may (but shall be
under no Obligation to) take out the required policies of insurance and pay the premiums on the
same or may make such repairs or replacements as are necessary and provide for payment
thereof, and all amounts so advanced therefor by the Beneficiary shall become an additional
Obligation of the Trustor to the Beneficiary (together with any applicable interest) and shall be
secured hereby, which amounts the Trustor agrees to pay on the demand of the Beneficiary, and
if not so paid, shall bear interest from the date of the advance at the Agreed Rate.
Section 4. DAMAGE, DESTRUCTION OR CONDEMNATION
4.1. Casualties.
Trustor shall give prompt written notice to Beneficiary upon the occurrence of casualty to
or in connection with the Security or any part thereof, whether or not covered by insurance. In
the event of such casualty Trustor hereby absolutely and unconditionally assigns to Beneficiary
all insurance proceeds which it may be entitled to receive and such proceeds shall be delivered to
and held by Beneficiary to be applied to Beneficiary's expenses in settling, prosecuting or
defending any insurance claim, and then to the restoration of any portion of the Security that has
been damaged or destroyed to the same condition, character and value as existed prior to such
damage or destruction so long as the following conditions are satisfied: (i) Trustor is not in
default hereunder (other than any default resulting from such casualty), (ii) Beneficiary's
security is not materially impaired, (iii) all income (from the Security or otherwise) required to
pay all debt service and operating expenses of the Security during such restoration and thereafter
will be equal to or greater than the income which was required to pay such debt service and
operating expenses prior to the casualty, (iv) Trustor evidences to the reasonable satisfaction of
Beneficiary that the insurance required to be maintained hereunder will be available to the
Trustor during restoration and thereafter, (v) Beneficiary shall have approved the plans and
specifications for such restoration, which approval shall not be unreasonably withheld or
15
The Crossroads at Washington
City NSP Deed of Trust
delayed, and (vi) in the event that in Beneficiary's reasonable judgment the insurance proceeds
and any amounts deposited with a senior lender are not sufficient to accomplish restoration,
Trustor deposits with the Beneficiary or senior lender, if and to the extent required by that senior
lender pursuant to the terms of the senior debt instrument, within five days of demand by
Beneficiary, the additional amounts necessary to accomplish restoration. Proceeds disbursed for
restoration will be released to Truster in accordance with Beneficiary's then current customary
disbursement procedures. In the event any of the conditions set forth above are not satisfied or if
the insurance proceeds shall not be applied to the restoration of the Security within thirty days
after receipt of such proceeds by Beneficiary, Beneficiary may release such proceeds to Trustor
without such release being deemed a payment of any indebtedness secured hereby, rather than
apply such proceeds to the restoration of the Security. Such application or release shall not cure
or waive any default or notice of default hereunder or invalidate any act done pursuant to such
notice. If the Security is restored at a cost less than the available insurance proceeds, then such
excess proceeds shall, if Trustor is not then in default hereunder, be paid over to Truster.
Beneficiary may commence, appear in, defend or prosecute any assigned claim or action, and
may adjust, compromise, settle and collect all claims, proceeds and awards assigned to
Beneficiary, but shall not be responsible for any faihire to collect any claim, proceeds or award,
regardless of the cause of the failure.
4.2. Condemnation.
Promptly upon its obtaining knowledge of the institution or the threatened institution of
any proceeding for the condemnation or other taking for public or quasi -public use of the
Security or any part thereof, or if the same be taken or damaged by reason of any public
improvement or condemnation proceeding, or in any other manner, or should Trustor receive any
notice or other infonnation regarding such proceedings, action, taking or damage, Trustor shall
promptly notify Trustee and Beneficiary of such fact. Truster shall then, if requested by
Beneficiary, file or defend its right thereunder and prosecute the same with due diligence to its
final disposition and shall cause any award or settlement to be paid to Beneficiary in accordance
with the provisions of the Loan Agreement. At Beneficiary's option, Beneficiary or Trustor may
be the nominal party in such proceeding but in any event Beneficiary shall be entitled, without
regard to the adequacy of its security, to participate in, appear in, prosecute and settle, jointly
with Trustor to control the same and to be represented therein by counsel of its choice, and
Trustor will deliver, or cause to be delivered, to Beneficiary such instruments as may be
requested by it from time to time to permit such participation. Trustor and Beneficiary agree to
act in good faith with respect to any consent, settlement, or award arising out of said prosecution.
If the Security or any part thereof is taken or diminished in value, or if a consent settlement is
entered, by or under threat of such proceedings, all compensation, awards, damages, rights of
action proceeds and settlements payable to Trustor by virtue of its interest in the security shall be
and hereby are assigned, transferred and set over into Beneficiary to be held by it, in trust,
subject to the lien and security interest of this Deed of Trust. All such proceeds shall be first
applied to reimburse Trustee and Beneficiary, for all costs and expenses, including reasonable
attorneys' fees, incurred in connection with the collection of such award or settlement, and then
to the restoration of any portion of the Security that has been taken to the similar condition,
character and value as existed prior to such taking so long as the following conditions are
satisfied: (i) Trustor is not in default hereunder, (ii) Beneficiary's security is not materially
impaired, (iii) all income (from the Security or otherwise) required to pay all debt service and
16
The Crossroads at Washington
City NSP Deed of Trust
operating expenses of the Security during such restoration and thereafter will be equal to or
greater than the income which was required to pay such debt service and operating expenses
prior to the casualty, (iv) Truster evidences to the reasonable satisfaction of Beneficiary that the
insurance required to be maintained hereunder will be available to the Trustor during restoration
and thereafter, (v) Beneficiary shall have approved the plans and specifications for such
restoration, and (vi) in the event that in Beneficiary's reasonable judgment the insurance
proceeds and any amounts deposited with a senior lender are not sufficient to accomplish
restoration, Trustor deposits with the Beneficiary or senior lender, if and to the extent required
by that senior lender pursuant to the terms of the senior Debt Instrument, within five days of
demand by Beneficiary, the additional amounts necessary to accomplish restoration. Application
or release of proceeds as provided herein shall not cure or waive any default or notice of default
hereunder or invalidate any act done pursuant to such notice.
Section 5. ENVIRONMENTAL COVENANTS OF TRUSTOR
5.1. Disclosures By Trustor.
Except as disclosed in writing to, and acknowledged and accepted in writing by
Beneficiary, Truster represents and warrants that:
(a) during the period of Trustor's ownership of the Property
(1) there has been no use, generation, manufacture, storage, treatment,
disposal, discharge, Release, or threatened Release of any Hazardous Substance by any person
on or around the Property except in such small quantities as are customary and usual in the
ordinary course of constructing, using and operating a residential housing business on the
Property and in strict compliance with all Hazardous Substances Laws, and
(2) there have been no Hazardous Substances transported over or
through the Property;
(b) Trustor has no knowledge of, or reason to believe that, there has been:
(1) any use, generation, manufacture, storage, treatment, disposal,
Release, or threatened Release of any hazardous waste or substance by any prior owners or prior
occupants of the Property or by any third parties onto the Property, or
(2) any actual or threatened litigation or claims of any kind by any
person relating to these matters;
(c) to Trustor's knowledge, no Hazardous Substances in excess of permitted
levels or reportable quantities under applicable Hazardous Substance Laws are present in or
about the Property or any nearby real property that could migrate to the Property;
(d) to Trustor's knowledge, no Release or threatened Release exists or has
occurred;
17
The Crossroads at Washington
City NSP Deed of Trust
(e) to Trustor's knowledge, no underground storage tanks of any kind are or
ever have been located in or about the Property;
(f) the Property and all of Trustor's contemplated operations and activities at,
and Trustor's contemplated use and occupancy of, the Property comply with all applicable
Hazardous Substance Laws;
(g) Trustor is now in strict compliance with, every permit, license, and
approval required by all applicable Hazardous Substance Laws for all activities and operations
at, and the use and occupancy of, the Property;
(h) to Trustor's knowledge, there are no Hazardous Substance Claims pending
or threatened with regard to Property or against Trustor;
(i) to Trustor's knowledge the Property has not been nor is it within 2,000
feet of any other property designated as "hazardous waste property" or "border zone property"
pursuant to Health and Safety Code §§ 25220 et seq., and no proceedings for a determination of
this designation are pending or threatened;
0) to Trustor's knowledge, there exists no occurrence or condition on any
real property adjoining or within 2,000 feet of the Property that would cause the Property or any
part of it to be designated as "hazardous waste property" or "border zone property" under the
provisions of Health and Safety Code §§ 25220 et seq., and any regulation adopted in accordance
with that section;
(k) that the Trustor's use of the Property shall be residential housing;
(1) to Trustor's knowledge, any written disclosure submitted by or on behalf
of Trustor to Beneficiary concerning any Release or threatened Release, past or present
compliance by Trustor or other person of any Hazardous Substance Laws applicable to the
Property, the past and present use and occupancy of the Property, and any environmental
concerns relating to the Property, was true and complete when submitted and continues to be true
and complete as of the date of this Deed of Trust.
As used in this Section 5.1, phrases such as "to Trustor's knowledge," shall refer to the
actual knowledge of the Trustor, and its agents, directors and other associates, without duty of
inquiry or investigation other than the ordering of a Phase I Environmental Assessment as
required pursuant to the Loan Agreement.
5.2. Covenants of Trustor.
Trustor agrees, except in the ordinary course of business and in strict compliance with all
applicable Hazardous Substance Laws, as follows:
(a) not to cause or permit the property to be used as a site for the use,
generation, manufacture, storage, treatment, Release, discharge, disposal, transportation, or
presence of any Hazardous Substance, other than Existing Hazardous Materials (as such term is
defined in the Ground Lease);
18
The Crossroads at Washington
City NSP Deed of Trust
(b) not to cause, contribute to, permit, or acquiesce in any Release or
threatened Release;
(c) not to change or modify the use of the Property without the prior written
consent of Beneficiary;
(d) to comply with and to use reasonable commercial efforts to cause the
Property and every invitee or occupant of the Property to comply with all Hazardous Substance
Laws;
(e) to promptly upon Trustor's discovery thereof (other than Hazardous
Substances that were known prior to Loan closing as disclosed in the Environmental Reports),
notify Beneficiary in writing of and to provide Beneficiary with a reasonably detailed description
of:
(1) any noncompliance of the Property with any Hazardous Substance
Laws;
(2) any Hazardous Substance Claim;
(3) any Release or Threatened Release;
(4) the discovery of any occurrence or condition on any real property
adjoining or in the vicinity of the Property that would cause the Property or any part of it to be
designated as "hazardous waste property" or "border zone property" under the provisions of
Health and Safety Code §§ 25220 et seq., and any regulation adopted in accordance with that
section;
(f) if Truster discovers a Release or the presence of any Hazardous Substance
on or about the Property in violation of any Hazardous Substance Law, to:
(1) notify Beneficiary of that discovery together with a reasonably
detailed description;
(2) engage promptly after a request by Beneficiary, a qualified
environmental engineer reasonably satisfactory to Beneficiary to investigate these matters and
prepare and submit to Beneficiary a written report containing the findings and conclusions
resulting from that investigation, all at the sole expense of Trustor, and
(3) Except as otherwise provided in the Ground Lease, if the Release
of Hazardous Substances results in (i) injury to any person, (ii) injury to or contamination of the
Property (or a portion thereof), or (iii) injury to or contamination of any real or personal property
wherever situated take, at Trustor's sole expense, all necessary actions to remedy, repair, clean
up, or detoxify any Release of Hazardous Substance, including, but not limited to, any remedial
action required by any Hazardous Substance Laws or any judgment, consent, decree, settlement,
or compromise in respect of any Hazardous Substance Claims, these actions to be performed:
A. in accordance with Hazardous Substance Laws,
19
The Crossroads at Washington
City NSP Deed of Trust
B. in a good and proper manner,
C. under the supervision of a qualified environmental engineer
approved in writing by Beneficiary (such approval not to be unreasonably withheld or delayed),
D. in accordance with plans and specifications for these actions
approved in writing by Beneficiary (such approval not to be unreasonably withheld or delayed),
and
E. using licensed and insured qualified contractors approved in
writing by Beneficiary;
(g) promptly furnish to Beneficiary copies of all written communications
received by Truster from any governmental authority or other person or given by Trustor to any
person and any other information Beneficiary may reasonably request concerning any Release,
threatened Release, Hazardous Substance Claim, or the discovery of any Hazardous Substance
on or about the Property in violation of any Hazardous Substance Law; and
(h) keep Beneficiary generally informed regarding any Release, threatened
Release, Hazardous Substance Claim, or the discovery of any Hazardous Substance on or about
the Property in violation of any Hazardous Substance Law.
5.3. Rights of Beneficiary.
Upon Beneficiary's reasonable belief of the existence of a past or present Release or
threatened Release not previously disclosed by Trustor in connection with the making of the
Loan, Environmental Reportsor the execution of this Deed of Trust or upon Beneficiary's
reasonable belief that Trustor has failed to comply with any environmental provision of this
Deed of Trust or any other Loan Document and upon not less than 72 hours' prior written notice
(except in the case of an emergency) to Trustor, Beneficiary or its representatives, employees,
and agents, may from time to time and at all reasonable times during regular business hours (or
at any time in the case of an emergency) enter and inspect the Property and every part of it
(including all samples of building materials, soil, and groundwater and all books, records, and
files of Trustor relating to the Property) and perform those acts and things that Beneficiary
reasonably deems necessary to inspect, investigate, assess, and protect the Security of this Deed
of Trust, for the purpose of determining:
(a) the existence, location, nature, and magnitude of any past or present
Release or threatened Release,
(b) the presence of any Hazardous Substances on or about the Property in
violation of any Hazardous Substance Law, and
(c) the compliance by Trustor of every environmental provision of this Deed
of Trust and every other Loan Document.
In furtherance of the purposes above, without limitation of any of its other rights,
Beneficiary may:
20
The Crossroads at Washington
City NSP Deed of Trust
(1) obtain a court order to enforce Beneficiary's right to enter and
inspect the Property under Civil Code § 2929.5; and
(2) have a receiver appointed under Code of Civil Procedure § 564 to
enforce Beneficiary's right to enter and inspect the Property for the purpose set forth above.
All reasonable costs and expenses incurred by Beneficiary with respect to the audits,
tests, inspections, and examinations that Beneficiary or its agents, representatives, or employees
may conduct, including the reasonable fees of the engineers, laboratories, contractors,
consultants, and attorneys, will be paid by Truster. All reasonable costs or expenses incurred by
Trustee and Beneficiary pursuant to this Section (including without limitation court costs,
consultant's fees, and attorney fees, whether incurred in litigation and whether before or after
judgment) will bear interest at the Agreed Rate from the date they are incurred until those sums
have been paid in full. Except as provided by law, any inspections or tests made by Beneficiary
or its representatives, employees, and agents will be for Beneficiary's purposes only and will not
be construed to create any responsibility or liability on the part of Beneficiary to Truster or to
any other person. Beneficiary will have the right, but not the obligation, to communicate with
any governmental authority regarding any fact or reasonable belief of Beneficiary that constitutes
or could constitute a breach of any of Trustor's obligations under any environmental provision
contained in this Deed of Trust or any Loan Document.
5.4. Waiver and Indemnity.
Except as otherwise provided in the Ground Lease, Trustor:
(a) releases and waives any future claims against Beneficiary for indemnity or
contribution in the event Truster becomes liable for cleanup or other costs under any Hazardous
Substance Laws or under any Hazardous Substance Claim except to the extent such liability
arises out of the gross negligence or willful misconduct or Beneficiary;
(b) agrees to reimburse Beneficiary, on demand, for all costs and expenses
incurred by Beneficiary in connection with any review, approval, consent, or inspection relating
to the environmental provisions in this Deed of Trust together with interest, after demand, at the
Agreed Rate; and
(c) agrees to indemnify, defend, and hold Beneficiary and Trustee harmless
from all losses, costs, claims, damages, penalties, liabilities, causes of action, judgments, court
costs, reasonable attorney fees and other legal expenses, costs of evidence of title, cost of
evidence of value, and other expenses (collectively, "Expenses"), including, but not limited to,
any Expenses incurred or accruing after the foreclosure of the lien of this Deed of Trust, which
either may suffer or incur and which directly or indirectly arises out of or is in any way
connected with the breach of any environmental provision either in this Deed of Trust or in any
Loan Document or as a consequence of any Release or threatened Release or the presence, use,
generation, manufacture, storage, disposal, transportation, Release, or threatened Release of any
Hazardous Substance on or about the Property, (but excluding any Existing Hazardous
Materials), including the soils and groundwater, caused or permitted by Truster, including,
without limitation, to the extent required by an environmental agency with jurisdiction over the
21
The Crossroads at Washington
City NSP Deed of Trust
Property, the cost of any required or necessary repair, cleanup, remedy, or detoxification of any
hazardous Substance and the preparation of any closure, remedial action, or other required plans.
Trustor's obligations will survive the satisfaction, release, or cancellation of the indebtedness,
the release and reconveyance or partial release and reconveyance of this Deed of Trust, and the
foreclosure of the lien of this Deed of Trust or deed in lieu of the Deed of Trust, for any liability
accruing or arising prior to such satisfaction, release, or cancellation of the indebtedness, the
release and reconveyance or partial release and reconveyance of this Deed of Trust, and the
foreclosure of the lien of this Deed of Trust or deed in lieu of the Deed of Trust.
5.5. Additional Covenants of Trustor.
(a) Trustor and Beneficiary agree that:
(1) this Section is intended as Beneficiary's written request for
information and Trustor's written response concerning the environmental condition of the
Property as provided by Code of Civil Procedure § 726.5; and
(2) each representation, warranty, covenant, or indemnity made by
Trustor in this Section or in any other provision of this Deed of Trust or any Loan Document that
relates to the environmental condition of the Property is intended by Trustor and Beneficiary to
be an "environmental provision" for purposes of Code of Civil Procedure § 736 and will survive
the payment of the indebtedness and the termination or expiration of this Deed of Trust and will
not be affected by Lender's acquisition of any interest in the Property, whether by full credit bid
at foreclosure, deed in lieu of that, or otherwise. If there is any transfer of any portion of
Trustor's interest in the Property, any successor -in -interest to Trustor agrees by its succession to
that interest that the written request made pursuant to this Section will be deemed remade to the
successor -in -interest without any further or additional action on the part of Beneficiary and that
by assuming the debt secured by this Deed of Trust or by accepting the interest of Trustor subject
to the lien of this Deed of Trust, the successor remakes each of the representations and
warranties in this Deed of Trust and agrees to be bound by each covenant in this Deed of Trust,
including, but not limited to, any indemnity provision.
(b) Even though Trustor may have provided Beneficiary with an
environmental site assessment or other environmental report together with other relevant
information regarding the environmental condition of the Property, Trustor acknowledges and
agrees that Beneficiary is not accepting the Property as security for the Loan based on that
assessment, report, or information. Rather, Beneficiary has relied on the representations and
warranties of Trustor in this Deed of Trust, and Beneficiary is not waiving any of its rights and
remedies in the environmental provisions of this Deed of Trust or any other Loan Document.
(c) Beneficiary or its agents, representatives, and employees may seek a
judgment that Trustor has breached its covenants, representations, or warranties in Section 2 of
this Deed of Trust or any other covenants, representations, or warranties that are deemed to be
"environmental provisions" pursuant to Code of Civil Procedure § 736 (each an
"Environmental Provision"), by commencing and maintaining an action or actions in any court
of competent jurisdiction pursuant to Code of Civil Procedure § 736, whether commenced prior
to or after foreclosure of the lien of this Deed of Trust. Beneficiary or its agents, representatives,
22
The Crossroads at Washington
City NSP Deed or Trust
and employees may also seek an injunction to cause Trustor to abate any action in violation of
any Environmental Provision and may seek the recovery of all costs, damages, expenses, fees,
penalties, fines, judgments, indemnification payments to third parties, and other out-of-pocket
costs or expenses actually incurred by Beneficiary (collectively, "Environmental Costs")
incurred or advanced by Beneficiary relating to the cleanup, remedy, or other response action
required by any Hazardous Substances Law or any Hazardous Substance Claim. It will be
conclusively presumed between Beneficiary and Trustor that all Environmental Costs incurred or
advanced by Beneficiary relating to the cleanup, remedy, or other response action of or to the
Property were made by Beneficiary in good faith. All reasonable Environmental Costs incurred
by Beneficiary under this Section (including without limitation court costs, consultant fees, and
attorney fees, whether incurred in litigation and whether before or after judgment) will bear
interest at the Agreed Rate from the date of expenditure until those sums have been paid in full.
Beneficiary will be entitled to bid, at any trustee's or foreclosure sale of the Property, the amount
of the costs, expenses, and interest in addition to the amount of other indebtedness.
(d) Beneficiary or its agents, representatives, and employees may waive its
lien against the Property or any portion of it, including but not limited to the Improvements, to
the extent that the Property or any portion of the Security is found to be environmentally
impaired in accordance with Code of Civil Procedure § 726.5, and to exercise all rights and
remedies of an unsecured creditor against Trustor and all of Trustor's assets and property for the
recovery of any deficiency and Environmental Costs, including, but not limited to, seeking an
attachment order sander Code of Civil Procedure § 483.010. As between Beneficiary and
Trustor, for purposes of Code of Civil Procedure § 726.5, Trustor will have the burden of
proving that Trustor or any related party (or any affiliate or agent of Truster or any related party)
was not in any way negligent in permitting the Release or threatened Release of the Hazardous
Substances.
Section 6. ASSIGNMENTS OF RENTS, ISSUES AND PROFITS
6.1. Assignment.
Truster hereby absolutely, irrevocably and unconditionally assigns to Beneficiary, as
security for the Obligations, all rents, profits, deposits, royalties, income and other issues and
similar benefits derived from the Security (collectively, the "Rents"), and hereby confers upon
Beneficiary the right, power and authority to collect such Rents. Trustor irrevocably appoints
Beneficiary its true and lawful attorney -in -fact, at the option of Beneficiary, at any time and from
time to time, to demand, receive and enforce payment, to give receipts, releases and satisfactions,
and to sue, in its name or in the name of Trustor, for all Rents, and apply the same to the
Obligations secured hereby; provided, however, that Trustor shall have the right, as between
Trustor and Beneficiary, to collect the Rents but not more than one (1) month in advance of the
date due unless the written approval of Beneficiary has first been obtained, with the exception of
security deposits and "first and last months' rent" collected from tenants in connection with
Trustor's ordinary leasing of residential apartments within the Property), and to retain and enjoy
the same, so long as an Event of Default shall not have occurred hereunder and be continuing.
6.2. Collection Upon Default.
23
The Crossroads at Washington
City NSP Deed of Trust
While any Event of Default remains uncured, Beneficiary may, at any time without
notice, either in person, by agent or by a receiver appointed by a court, and without regard to the
adequacy of any security for the Obligations hereby secured, enter upon and take possession of
the Security, or any part thereof, and, with or without taking possession of the Security or any
part thereof, in its own name sue for or otherwise collect such Rents (including those past due
and unpaid, and all prepaid Rents and all other monies which may have been or may hereafter be
deposited with Trustor by any tenant to secure the payment of any Rent or for any services
thereafter to be rendered by Trustor for any other obligation of any tenant to Trustor arising
under any lease, and Trustor agrees that, upon the occurrence of any Event or Default hereunder,
Trustor shall promptly deliver all Rents and other moneys to Beneficiary), and Beneficiary may
apply the same, less costs and expenses of operation and collection, including, without
limitation, reasonable attorneys fees, whether or not suit is brought or prosecuted to judgment,
against any indebtedness or Obligation of Truster secured hereby, and in such order as
Beneficiary may determine notwithstanding that said indebtedness or the performance of said
Obligation may not then be due. The collection of Rents, or the entering upon and taking
possession of the Security, or the application thereof as aforesaid, shall not cure or waive any
default or notice of default hereunder or invalidate any act done in response to such default or
pursuant to such notice of default or be deemed or construed to make Beneficiary a mortgagee -
in -possession of the Security or any portion thereof.
6.3. Further Assignments.
Upon demand of Beneficiary, Trustor shall, from time to time hereafter, execute, and
deliver to Beneficiary recordable assignments of Trustor's interest in any or all leases, subleases,
contracts, rights, licenses and permits now or hereafter affecting the Security or any portion
thereof. Such assignments shall be made by instruments in form and substance reasonably
satisfactory to Beneficiary; provided, however, that no such assignment shall be construed as
imposing upon Beneficiary any obligation with respect thereto. Beneficiary may, at its option,
exercise its rights hereunder or under any such specific assignment and such exercise shall not
constitute a waiver of any right hereunder or under any such specific assignment.
Section 7. EVENTS OF DEFAULT
7.1. Events of Default.
Each of the following shall constitute Events of Default: (1) the occurrence of an "Event
of Default" as defined in the Loan Agreement or as defined in any Debt Instrument; or (2) the
failure to make any payment or perform any of Trustor's other Obligations now or hereafter
secured by this Deed of Trust (subject to written notice and expiration of any applicable cure
period) and if no cure period is provided, a cure period equal to those granted to the limited
partner under Section 7.12.
7.2. Acceleration of Maturity.
If an Event of Default shall have occurred and be continuing, then at the option of the
Beneficiary, the amount of any payment related to the Event of Default, the unpaid Principal of
the Note and any other indebtedness and other Obligations secured hereby shall immediately
24
The Crossroads at Washington
City NSP Deed of Trust
become due and payable without presentment, protest notice or demand, all of which are hereby
expressly waived, upon written notice by the Beneficiary to the Trustor and no omission on the
part of the Beneficiary to exercise such option when entitled to do so shall be construed as a
waiver of such right.
7.3. The Beneficiary's Right to Enter and Take Possession.
If an Event of Default shall have occurred and be continuing, the Beneficiary may:
(a) Either in person or by agent, with or without bringing any action or
proceeding, or by a receiver appointed by a court, and without regard to the adequacy of its
security, enter upon the Security and take possession thereof (or any part thereof) and of any of
the Security, in its own name or in the name of Trustee, and do any acts which it reasonably
deems necessary to preserve the value or marketability of the Security, or part thereof or interest
therein, increase the income therefrom or protect the security thereof and, with or without taking
possession of the Security, sue for or otherwise collect the Rents, including those past due and
unpaid, and apply the same, less costs and expenses of operation and collection including
without limitation reasonable attorneys fees, against any indebtedness secured hereby, all in such
order as Beneficiary may determine. The entering upon and taking possession of the Security the
collection of such Rents and the application thereof as aforesaid shall not cure or waive any
Event of Default or notice of default hereunder or invalidate any act done in response to such
Event of Default or pursuant to such notice of default, and, notwithstanding the continuance in
possession of the Security, Beneficiary shall be entitled to exercise every right provided for in
this Deed of Trust, or by law upon occurrence of any Event of Default, including the right to
exercise the power of sale;
(b) Commence an action to foreclose this Deed of Trust as a mortgage,
appoint a receiver, or specifically enforce any of the covenants hereof,
(c) Deliver to Trustee a written declaration of default and demand for sale,
and a written notice of default and election to cause Trustor's interest in the Security to be sold,
which notice Trustee or Beneficiary shall cause to be duly filed for record in the Official Records
of Orange County; or
(d) Exercise all other rights and remedies provided herein, in the instruments
by which the Trustor acquires title to any Security, or in any other document or agreement now
or hereafter evidencing, creating or securing all or any portion of the Obligations secured hereby,
or provided by law.
7.4. Foreclosure by Power of Sale.
Should the Beneficiary elect to foreclose by exercise of the power of sale herein
contained, the Beneficiary shall notify Trustee and shall deposit with Trustee this Deed of Trust,
the Loan Agreement and the Note which is secured hereby (and the deposit of which shall be
deemed to constitute evidence that the unpaid Principal amount of the Note is immediately due
and payable), and such receipts and evidence of any expenditures made that are additionally
secured hereby as Trustee may require.
25
The Crossroads at Washington
City NSP Deed ofTmst
(a) Upon receipt of such notice from the Beneficiary ("Notice of Default'),
Trustee shall cause to be recorded, published and delivered to Truster such Notice of Default and
election to sell as then required by law and by this Deed of Trust. Trustee shall, without demand
on Trustor, after lapse of such time as may then be required by law and after recordation of such
Notice of Default and after notice of sale having been given as required by law ("Notice of
Sale"), sell the Security, at the time and place of sale fixed by it in said Notice of Sale, whether
as a whole or in separate lots or parcels or items as Trustee shall deem expedient and in such
order as it may determine unless specified otherwise to the Truster according to California Civil
Code Section 2924g(b), at public auction to the highest bidder, for cash in lawful money of the
United States payable at the time of sale. Trustee shall deliver to such purchaser or purchasers
thereof its good and sufficient deed or deeds conveying the property so sold, but without any
covenant or warranty, express or implied. The recitals in such deed or any matters of facts shall
be conclusive proof of the truthfulness thereof. Any person, including, without limitation,
Trustor, Trustee or Beneficiary, may purchase at such sale.
(b) After deducting all reasonable costs, fees and expenses of Trustee,
including costs of evidence of title in connection with such sale, Trustee shall apply the proceeds
of sale to payment of (1) the unpaid Principal amount of the Note; (2) all other sums then
secured hereby; and (3) the remainder, if any, to Trustor.
(c) Trustee may postpone sale of all or any portion of the Security by public
announcement at such time and place of sale, and from time to time thereafter, and without
further notice make such sale at the time fixed by the last postponement, or may, in its discretion,
give a new notice of sale.
7.5. Receiver
If an Event of Default shall have occurred and be continuing, Beneficiary, as a matter of
right and without further notice to Trustor or anyone claiming under the Security, and without
regard to the then value of the Security or the interest of Trustor therein, shall have the right to
apply to any court having jurisdiction to appoint a receiver or receivers of the Security (or a part
thereof), and Truster hereby irrevocably consents to such appointment and waives further notice
of any application therefor. Any such receiver or receivers shall have all the usual powers and
duties of receivers in like or similar cases, and all the powers and duties of Beneficiary in case of
entry as provided herein, and shall continue as such and exercise all such powers until the date of
confirmation of sale of the Security, unless such receivership is sooner terminated.
7.6. Application of Funds After Default.
Except as otherwise herein provided, upon the occurrence of an Event of Default
hereunder, and while such Event of Default remains uncured, Beneficiary may, at any time
without notice, apply any or all sums or amounts received and held by Beneficiary to pay
insurance premiums, Impositions, or either of them, or as Rents or income of the Security, or as
insurance or condemnation proceeds, and all other sums or amounts received by Beneficiary
from or on account of Truster or the Security, or otherwise, against any indebtedness or
Obligation of the Trustor secured hereby, in such manner and order as Beneficiary may elect.
The receipt, use or application of any such sum or amount shall not be construed to affect the
26
The Crossroads at Washington
City NSP Deed of Trust
maturity of any indebtedness secured by this Deed of Trust, or any of the rights or powers of
Beneficiary under the terms of the Loan Agreement, this Deed of Trust or the Note, or any of the
Obligations of Trustor or any guarantor under any other instruments or documents now or
hereafter delivered in connection with the Loan Agreement or to cure or waive any default or
notice of default under the Loan Agreement or any such instruments or documents; or to
invalidate any act of Trustee or Beneficiary.
7.7. Costs of Enforcement.
If any Event of Default occurs, Beneficiary and Trustee, and each of them, may employ
an attorney or attorneys to protect their rights hereunder. Trustor promises to pay to Beneficiary,
on demand, the reasonable fees and expenses of such attorneys and all other reasonable costs of
enforcing the Obligations secured hereby, including, without limitation, recording fees, the
expense of a trustee, sale guarantee, Trustee's fees and expenses, receivers fees and expenses,
and all other reasonable expenses, of whatever kind or nature, incurred by Beneficiary and
Trustee, and each of them, in connection with the enforcement of the Obligations secured
hereby, whether or not such enforcement includes the filing of a lawsuit. Until paid, such sums
shall be secured hereby and shall bear interest at the Agreed Rate.
7.8. Remedies Cumulative.
No right, power or remedy conferred upon or reserved to the Beneficiary by this Deed of
Trust is intended to be exclusive of any other right, power or remedy, but each and every such
right, power and remedy shall be cumulative and concurrent and shall be in addition to any other
right, power and remedy given hereunder or now or hereafter existing at law or in equity.
7.9. No Waiver.
(a) No delay or omission of the Beneficiary to exercise any right, power or
remedy accruing upon any Event of Default shall exhaust or impair any such right, power or
remedy, or shall be construed to be a waiver of any such Event of Default or acquiescence
therein; and every right, power and remedy given by this Deed of Trust to the Beneficiary may
be exercised from time to time and as often as may be deemed expeditious by the Beneficiary.
No consent or waiver, expressed or implied, by the Beneficiary to or any breach by the Trustor in
the performance of the Obligations hereunder shall be deemed or construed to be a consent to or
waiver of Obligations of the Trustor hereunder. Failure on the part of the Beneficiary to
complain of any act or failure to act or to declare an Event of Default, irrespective of how long
such failure continues, shall not constitute a waiver by the Beneficiary of its right hereunder or
impair any rights, power or remedies consequent on any Event of Default by the Trustor.
(b) If the Beneficiary (1) grants forbearance or an extension of time for the
payment of any suns secured hereby, (2) takes other or additional security or the payment of any
sums secured hereby, (3) waives or does not exercise any right granted in the Loan Agreement,
(4) releases any part of the Security from the lien of this Deed of Trust, or otherwise changes any
of the terms, covenants, conditions or agreements in the Loan Agreement, (5) consents to the
granting of any easement or other right affecting the Security, or (6) makes or consents to any
agreement subordinating the lien hereof, any such act or omission shall not release, discharge,
27
The Crossroads at Washington
City NSP Deed of Tmst
modify, change or affect the original liability under this Deed of Trust, or any other obligation of
the Trustor or any subsequent purchaser of the Security or any part thereof, or any maker, co-
signer, endorser, surety or guarantor (unless expressly released); nor shall any such act or
omission preclude the Beneficiary from exercising any right, power or privilege herein granted
or intended to be granted in any Event of Default then made or of any subsequent Event of
Default, nor, except as otherwise expressly provided in an instrument or instruments executed by
the Beneficiary shall the lien of this Deed of Trust be altered thereby.
7.10. Suits to Protect the Security.
The Beneficiary shall have power to: (1) institute and maintain such suits and
proceedings as it may in its reasonable discretion deem expedient to prevent any impairment of
the Security and the rights of the Beneficiary as may be unlawful or any violation of this Deed of
Trust, (2) preserve or protect its interest (as described in this Deed of Trust) in the Security, and
(3) restrain the enforcement of or compliance with any legislation or other governmental
enactment, rule or order that may be unconstitutional or otherwise invalid, if the enforcement for
compliance with such enactment, rule or order would impair the Security thereunder or be
prejudicial to the interest of the Beneficiary.
7.11. Trustee May File Proofs of Claim.
In the case of any receivership, insolvency, bankruptcy, reorganization, arrangement,
adjustment, composition or other proceedings affecting the Trustor, its creditors or its property,
the Beneficiary, to the extent permitted by law, shall be entitled to file such proofs of claim and
other documents as may be necessary in order to have the claims of the Beneficiary allowed in
such proceedings and for any additional amount which may become due and payable by the
Trustor hereunder after such date.
7.12. Limited Partner Cure Rights.
Notwithstanding anything to the contrary in this Deed of Trust, Beneficiary shall give the
investor limited partner of Trustor the following notice at the address provided in Section 8.3(b)
and cure rights:
(a) Beneficiary will give the limited partner a copy of any notice (at the limited
partner's address provided in a notice by Trustor to Beneficiary) that Beneficiary gives to Trustor
under this Deed of Trust, provided that Trustor has provided the address and contact information
for the investor limited partner in writing to Beneficiary;
(b) Beneficiary will give the limited partner thirty (30) days after the limited partner's
receipt of such notice to cure a non-payment of any sum due under this Deed of Trust;
(c) Beneficiary will give the limited partner sixty (60) days after the limited partner's
receipt of such notice to cure any other default under this Deed of Trust;
(d) If a non -monetary default is incapable of being cured within sixty (60) days,
Beneficiary will give the limited partner such additional time as is reasonably necessary to cure
28
The Crossroads at Washington
City NSP Deed of Trust
such default provided the limited partner has commenced to cure such default and is diligently
proceeding to cure such default through the end of such period; and
(e) If the limited partner makes any such payment or otherwise cures such default, the
Beneficiary will accept such action as curing such default as if such payment or cure were made
by Trustor.
Section 8. MISCELLANEOUS
8.1. Amendments.
This instrument cannot be waived, changed, discharged or terminated orally, but only by
an instrument in writing signed by Beneficiary and Trustor.
8.2. Reconveyance by Trustee.
Upon written request of Beneficiary stating that all sums secured hereby have been paid,
and upon surrender of this Deed of Trust to Trustee for cancellation and retention, and upon
payment by Truster of Trustee's reasonable fees, Trustee shall reconvey, without warranty, the
Security to Trustor, or to the person or persons legally entitled thereto.
8.3. Notices.
(a) If at any time after the execution of this Deed of Trust it shall become
necessary or convenient for one of the parties hereto to serve any notice, demand or
communication upon the other party, such notice, demand or communication shall be in writing
and shall be served personally or by depositing the same in the registered United States mail,
return receipt requested, postage prepaid and:
(1) if intended for Beneficiary shall be addressed to:
City of Santa Ana
Executive Director (CDA)
20 Civic Center Plaza (M-26)
P.O. Box 1988
Santa Ana, California 92702
(2) if intended for Trustors shall be addressed to:
Trustor: Washington Santa Ana Housing Partners, L.P.
With a copy to:
Any notice, demand or communication shall be deemed given, received, made or
communicated on the date personal delivery is effected or, if mailed in the manner herein
specified, on the delivery date or date delivery is refused by the addressee, as shown on the
29
'file Crossroads at Washington
City NSP Deed of Trust
return receipt. Either party may change its address at any time by giving written notice of such
change to Beneficiary or Truster as the case may be, in the manner provided herein, at least ten
(10) days prior to the date such change is desired to be effective.
8.4. Successors and Joint Trustors.
All Obligations of Trustor secured by this Deed of Trust, shall also apply to and bind any
permitted transferee or successors in interest. Where the terms of the Deed of Trust have the
effect of creating an Obligation of the Truster and a transferee, such Obligation shall be deemed
to be a joint and several Obligation of the Truster and such transferee. Where Trustor is more
than one entity or person, all Obligations of Trustor shall be deemed to be a joint and several
Obligation of each and every entity and person comprising Truster.
8.5. Captions.
The captions or headings at the beginning of each Section hereof are for the convenience
of the parties and are not a part of this Deed of Trust.
8.6. Invalidity of Certain Provisions.
Every provision of this Deed of Trust is intended to be severable. In the event any tern
or provision hereof is declared to be illegal or invalid for any reason whatsoever by a court or
other body of competent jurisdiction, such illegality or invalidity shall not affect the balance of
the terms and provisions hereof, which terms and provisions shall remain binding and
enforceable. If the lien of this Deed of Trust is invalid or unenforceable as to any part of the
debt, or if the lien is invalid or unenforceable as to any part of the Security, the unsecured or
partially secured portion of the debt, and all payments made on the debt, whether voluntary or
under foreclosure or other enforcement action or procedure, shall be considered to have been
first paid or applied to the full payment of that portion of the debt which is not secured or
partially secured by the lien of this Deed of Trust.
8.7. Governing Law and Venue.
This Deed of Trust shall be governed by and construed in accordance with the laws of the
State of California. In the event of any legal action to enforce or interpret this Deed of Trust, the
sole and exclusive venue shall be a court of competent jurisdiction located in Orange County,
California, and the parties hereto agree to and do hereby submit to the jurisdiction of such court,
notwithstanding Code of Civil Procedure Section 394.
8.8. Gender and Number.
In this Deed of Trust the singular shall include the plural and the masculine shall include
the feminine and neuter and vice versa, if the context so requires.
8.9. Deed of Trust, Mortgage.
Any reference in this Deed of Trust to a mortgage shall also refer to a deed of trust and
any reference to a deed of trust shall also refer to a mortgage.
30
The Crossroads at Washington
City NSP Deed of Trust
8.10. Actions.
Trustor agrees to appear in and defend any action or proceeding purporting to affect the
Security.
8.11. Substitution of Trustee.
Beneficiary may from time to time substitute a successor or successors to any Trustee
named herein or acting hereunder to execute this Trust. Upon such appointment, and without
conveyance to the successor trustee, the latter shall be vested with all title, powers, and duties
conferred upon any Trustee herein named or acting hereunder. Each such appointment and
substitution shall be made by written instrument executed by Beneficiary, containing reference to
this Deed of Trust and its place of record, which, when duly recorded in the proper office of the
City or counties in which the Security is situated, shall be conclusive proof of proper
appointment of the successor trustee.
8.12. Acceptance by Trustee.
Trustee accepts this Trust when this Deed of Trust, duly executed and acknowledged, is
made public record as provided by law. Except as otherwise provided by law the Trustee is not
obligated to notify any party hereto of pending sale under this Deed of Trust or of any action of
proceedings in which Trustor, Beneficiary, or Trustee shall be a party unless brought by Trustee.
8.13. Conflicts.
If any term or provision of this Deed of Trust conflicts with any term of provision of the
Loan Agreement, the term or provision of the Loan Agreement shall control to the extent of such
conflict.
8.14. Statements by Trustor.
Trustor shall, at its cost, within ten (10) days after notice thereof from Beneficiary,
deliver to Beneficiary a written statement setting forth to the best of its knowledge and
information, the amounts then unpaid and secured by this Deed of Trust and stating whether
Trustor is aware of any offset or defense against such amounts.
8.15. Beneficiary Statements.
For any statement or accounting requested by Trustor or any other entitled person
pursuant to Section 2943 or Section 2954 of the California Civil Code or pursuant to any other
provision of applicable law, or for any other document or instrument furnished to Trustor by
Beneficiary, Beneficiary may charge the maximum amount permitted by law at the time of the
request therefor, or if there be no such maximum, then in accordance with Beneficiary's
customary charges therefor or the actual cost to Beneficiary therefor, whichever is greater.
8.16. Statute of Limitations.
31
The Crossroads at Washington
City NSP Deed of Must
Except insofar as now or hereafter prohibited by law, the right to plead, use or assert any
statute of limitations as a plea or defense or bar of any kind, or for any purpose, to any debt,
demand or obligation secured or to be secured hereby, or to any complaint or other pleading or
proceeding filed, instituted or maintained for the purpose of enforcing this Deed of Trust or any
rights hereunder, is hereby waived by Trustor.
8.17. Trust Irrevocable; No Offset.
The Trust created hereby is irrevocable by Trustor. No offset or claim that Truster now
has or may in the future have against Beneficiary shall relieve Truster from paying the
indebtedness or performing any other Obligation contained herein or secured hereby.
8.18. Corrections.
Truster shall, upon request of Beneficiary, promptly correct any defect, error or omission
which may be discovered in the contents hereof or in the execution or acknowledgment hereof,
and will execute, acknowledge and deliver such further instruments and do such further acts as
may be necessary or as may be reasonably requested by Beneficiary to carry out more effectively
the purposes thereof, to subject to, the lien and security interest hereby created any of Trustor's
properties, rights or interests covered or intended to be covered hereby, or to perfect and
maintain such lien and security interest.
8.19. Further Assurance.
Trustor, Beneficiary and Trustee agree to do or cause to be done such further acts and
things and to execute and deliver or to cause to be executed and delivered such additional
assignments, agreements, powers and instruments, as any of them may reasonably require to
keep valid and effective the charges and liens hereof, to carry into effect the purposes of this
Deed of Trust or to better assure and confirm unto any of them their rights, powers and remedies
hereunder; and, upon request by Beneficiary, shall supply evidence of fulfillment of each of the
covenants herein contained concerning which a request for such evidence has been made.
8.20. Waiver of Jury Trial.
Unless prohibited by Federal, State or local laws, each party acknowledges that it is
aware of and has had the advice of counsel of its choice with respect to its rights to trial by jury,
and each party, for itself and its successors and assigns, does hereby expressly and knowingly
waive and release all such rights to trial by jury in any action, proceeding or counterclaim
brought by any party hereto against the other (and/or against its officers, directors, employees,
agents, or subsidiary or affiliated entities) on or with regard to any matters whatsoever arising
out of or in any way connected with this Deed of Trust and/or any claim of injury or damage to
the fullest extent permitted by applicable law.
8.21. Tax Credits.
Beneficiary agrees that the lien of this Deed of Trust shall be subordinate to any extended
low-income housing commitment (as such term is defined in Section 42(h)(6)(B) of the Internal
Revenue Code) (the "Extended Use Agreement") recorded against the Security; provided that
32
The Crossroads at Washington
City NSP Deed of Trust
such Extended Use Agreement, by its terms, must terminate upon foreclosure under this
Instrument or upon a transfer of the Security by instrument in lieu of foreclosure, in accordance
with Section 42(h)(6)(E) of the Internal Revenue Code.
Section 9. WAIVERS
9.1. Waivers and Related Matters.
(a) To the fullest extent allowed by law, Trustor hereby waives: (i)
presentment, demand, protest, notice of dishonor, notice of protest and all other notices and
demands of every kind, and all suretyship defenses of every kind that would otherwise be
available in connection with this Deed of Trust, and (ii) all rights of redemption, valuation,
appraisement, stay of executive, notice of election to mature or declare due the whole of the
Obligation and marshaling in the event of foreclosure of the liens hereby created.
(b) Trustor hereby authorizes Beneficiary, at any time and from time to time
without notice and without affecting this Deed of Trust in any way, to: (i) accept new or
additional instruments, documents, agreements, security or guaranties in connection with all or
any part of the Obligations; (ii) accept partial payments on the Obligations; and (iii) waive,
release, reconvey, terminate, abandon, subordinate, exchange, substitute, transfer, compound,
compromise, liquidate and enforce all or any part of the Obligations and any security or
guaranties therefor, and apply any such security and direct the order or manner of sale thereof
and bid and purchase at any such sale.
(c) Trustor hereby waives any right to require Beneficiary to (i) proceed
against any person; (ii) proceed or exhaust any collateral held from any person; or (iii) pursue
any other remedy in Beneficiary's power. Upon the occurrence of any Event of Default,
Beneficiary is hereby expressly given the right, at its option, to proceed in the enforcement of
this Deed of Trust, independently of any other remedy or security Beneficiary may at any time
hold in connection with the Obligations, and Beneficiary shall not in any way be obligated or
otherwise required to proceed upon or against and/or exhaust any other security or remedy before
proceeding to enforce this Deed of Trust.
(d) Trustor hereby waives any defense arising by reason of (i) any disability
or other defense of Trustor or any other person; (ii) the cessation from any cause whatsoever,
other than full payment and performance of the Obligations, of the Obligations of Trustor or any
other person; or (iii) any act or omission by Beneficiary which directly or indirectly results in or
aids in the discharge or release of Trustor, or any other person, any Obligation, or any collateral
by operation of law or otherwise.
The waivers set forth in this Section 9 shall also apply, to the fullest extent permitted by
law to all other real and/or personal property of Trustor now or hereafter assigned to Beneficiary
as security for the Obligations. Trustor warrants and agrees that each, of the waivers set forth
above are made with Trustor's full knowledge of their significance and consequences, with the
understanding that events giving rise to any defense waived may diminish, destroy or otherwise
adversely affect rights which Trustor otherwise may have against Beneficiary or others, or
against collateral, and that under the circumstances, the waivers are reasonable and not contrary
33
The Crossroads at Washington
City NSP Deed of Tmst
to public policy or law. If any of the waivers are determined to be contrary to any applicable law
or public policy, such waivers shall be effective to the maximum extent permitted by law.
{signatures on following page}
34
The Crossroads at Washington
City NSP Deed of Trust
A-2022-133-01
IN WITNESS WHEREOF, Trustor has executed this City Deed of Trust as of the date fast
written above.
TRUSTOR:
Washington Santa Ana Housing Partners, L.P.,
a California limited partnership
By: Related/Washington Santa Ana Development Co., LLC,
a California limited liability company,
its Administrative General Partner
By: I t' ~"
Frank Cardone, President
By: Supportive Housing LLC,
a California limited liability company,
its Managing General Partner
By: A Community of Friends,
a California nonprofit public benefit corporation,
its sole member/manager
By:
Dora Luting Gallo,
President and Chief Executive Officer
The Crossroads at Washington
City NSP Deed of Trust
ACKNOWLEDGMENT
A notary public or other officer completing this
certificate verifies only the identity of the individual
who signed the document to which this certificate is
attached, and not the truthfulness, accuracy, or
validity of that document.
State of California
County of Orange
On July 18, 2022
before me, toV a Iwi a—w► -,, Notary Public
(insert name and title of the officer)
personally appeared Frank Cardone
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the
person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing
paragraph is true and correct.
WITNESS my hand and official seal.
Signature
(Seal)
ASHA KEAAMAT
Notary Public • California
Orange County
Commission B 2403693
10My Comm. Expires May 9, 2026
ACKNOWLEDGMENT
A notary public or other officer completing this
certificate verifies only the identity of the individual
who signed the document to which this certificate is
attached, and not the truthfulness, accuracy, or
validity of that document.
State of California
County of Orange
On July 18, 2022 before me, Col 4 J2. 'i�e r Notary Public
(insert name and title of the officer)
personally appeared Dora Leong Gallo
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the
person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing
paragraph is true and correct.
WITNESS my hand and official seal.
Signature
------------
GAIL R FEE
.d_ Notary Public - California
Orange CoLrty >_
Commiss;or = 2270789
My Comm. Expires Jar 10. 2023
(Seal)
EXHIBIT A
LEGAL DESCRIPTION
The Crossroads at Washington
City NSP Deed of Trust
EXHIBIT A
The land referred to is situated in the County of Orange, City of Santa Ana, State of California,
and is described as follows:
That portion of the Rancho Santiago De Santa Ana in the City of Santa Ana, County of Orange,
State of California per Map recorded in Book 3 Page 420 of Patents, Records of Los Angeles
County in the Office of the County Recorder, described as follows:
Beginning at the southwest terminus of that certain course on the southwest line of said land
shown as having a bearing and distance of "North 60005'57" East 133.86 feet" per Record of
Survey No, 2002-1059 recorded in Book 194 Pages 28 through 36 of Records of Surveys in the
Orange County records; thence along said southwest line North 60105'57" East, 133.81 feet;
thence North 64053'54" East, 193.71 feet; thence North 21100'44" West, 62.74 feet; thence
North 21000'43" West, 224.19 feet; thence North 32046'09" West, 150.43 feet to the beginning
of a non -tangent curve, concave northerly and having a radius of 45.00 feet, a radial line to
said beginning of curve bears North 8202826" East; thence southerly along said curve, 166.04
feet, through a central angle of 211024'37" to the beginning of a reverse curve, concave
westerly and having a radius of 71.00 feet, a radial line to said beginning of curve bears South
66006'57" East; thence northeasterly along said curve, 52.77 feet, through a central angle of
42035'14"; thence North 55121'04" West, 25,14 feet; thence South 00016'37" West, 621.36 feet
to the point of beginning.
Per lot merger recorded July 20, 2022, Instrument No. 2022000253305
APN'S 398-092-13 & 398-092-14
Page 1 of 1