Leasehold Construction Deed of Trust with Absolute Assignment of Leases and Rents, Security Agreement and Fixture Filing 2002-0669578
." . '.f 00546GDOC ~
" 2002-066'~518
Recorded at the request 0
Chicago Title AlJG 08, 2002 10:19 AM
REC0@ING REQUE~TED BY OFFIcIAL ~'ECORDS
SAlj DIEGO'COUNTVRECORDER'S OFFICE
AND WHEN RECORDED MAIL TO' GREGORV J. SMITH, COUNTY RECORDER
FEES: 0.00
\ Poway'Redevdopment Agency , , IlAY:.. 4
~i~ ~::t~;:~ ~~::;:789 /111 UIIIII~ 1111,.
~ f I;) bbt.f2foA - () t;D ThisdocumentiseXCInptfromth~paymentofaiecoidingfeepursuantto
0 Government Code Secbon 27383
ur.J
\ LEASEHOLD CONSTRUCTION DEED OF TRUST
WITH ABSOLUTE ASSiGNMENT OF'LEASES AND RENTS,
SECURITY AGREEMENT AND FIXTURE FILING
TIDS LEASEHOLD CONSTRUCTION DEED OFTRUST WITH ABSOLUTE
..~ :'.'-
ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT AND FIXTURE
, ..
FILING {"Deed of "Trust"), made as oDAugust 1, 2002, is entered into by and between LOS
ARCOS DIMITED 'p ARTNERSHIP, a California limited R~rinership C'Trustor"), CIDCAGO
TITLECOI\1I'ANY ("Trustee"), and the POW A Y REDEVELOPMENT AGENCY, a public
body, corporate and politic ("BeneficiarY").
ARTICLE 1. GRANT IN TRUST
1.1 GRANT For the purposes of and upon the terms and conditions in this Deed.of
Trust, Trustor irrevocably graI1ts"conveys and assigns to Trustee, IN TRUST FOR THE BENEFIT
OF BENEFIOIARY, WITH POWER OF SALE AND RIGHT OF ENTRY AND POSSESSION, all
of Trustor's right, title and interest, whether now owned orhere,after acquired"in and to that certain
real property 10catec1"inthe,City of Po way, County of Sari Diego, State'6f California, described on
Exhibit A attached hereto (the "Real Property"), including, but not necessarily limited to,
(i) Trustor'ssubleasehold interesHnJheReal Property, includirig, but not limited to, that certain
suoleaseholo interest created by that'certain Ground Sublease dated as of June 8, 2001, by and
between Retirement Housing Foundation, a California nonprofit corporation, as Sublessor, and
Trusto~as Sublessee (the "GrouridLease"); (ii) all buildingsatid other improvements and.fixtures
now or hereafter located on li1eReal Property, incl!lding, but;Itot limited to, all apparatus, equipment,
and appliances'usedinJheoperation or occuRaricy of the Real Property, itbeingintended.by the
parties that all suchitems shall ,be, conclusively consideredio be apart of the Real Property, whether
or not attached ()r affixed to the Real Property (colledively, the "Imprbvements"); (iii) all
diwelopm~iit rights or credits, air rights, water, water rights and water stock related to the Real
Property, the'Leaseor the Il1)provements (the ReaLProperty, the Ground Lease and the
Improvementsarecolledtivelyreferred to herein as,the "Property");'(iv) all minerals, oil and gas, al)d
other hydrocarbon.substances in, on or under the Property,,(vl all appurtenances, easements, rights
and rights of way appurtena!1t:or related to the ProJlerty; tvi) all interest or est~te which Trustor may
hereafter acquire in any of the property described alJove; and (vii) all additions and accretions to, and
the ,proceeds of,any'ofthe foregoing (all of the foregoing being collectively referred to as the
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DOCSOC\914 70 I v2\22345,0075
15D11 "'L 9
. . .
. . 005467 "Subject PropertY'). The listing of specific rights or propertY shall not be interpreted as a limit of
general terms.
1.2 ADDRESS. The subject property is located at 12740 Gateway Park Road, Poway,
California 92064 However, neither the failure to designate an address nor any inaccuracy in the
address designated shall affecuhe validity or priority ofthe lien of this Deed of Tiust on the,Subject
Property as,described on Exhibit A.
ARTICLE 2. OBLIGATIONS SECURED
2,1 OBLIGATIONS SECURED Trustor makes this, grant and assignment for the
jmrpose of securing the following obligations ("Secured Obligations"):
a" Payment to Beneficiary of all sums atanytime owing under that certain
Promissory,Note{'Note") of even, date herewith, in the principal amount of Three Million One
Hundred Seventy-Eight Thousand Two Hundred Fifty-Seven"Dollars ($3,178,257) executed by
Trustor and payable to the order of Beneficiary, as lender; and
b. Payment and performance ofallcovenants and obligations of Trustor under
that certairi "Loan Agreement" between Trustor and Beneficiary, of even date herewith; and
c. Payment and performance of all covenants and' obligations of Trustor under
this'Deed of Trust; ,and
d. Paymenhmd performance of all future advances and other obligations that the
then ownet,ofall'orpart of the Subject Property may agree to pay and/or perform (whether as
principal; surety or guarantor),for tile benefit of Beneficiary, when such future advance or obligation
is evidenced by a writing which'recites that it is secured by this Deed of Trust; and
e. All modifications, extensions andrenewalsofany of the obligatibns'secured
hereby, however evidenced, includillg, without limitation: (i) modifications of the required principal
payment dates or interestpayfuent'datesorboth, as the case may be, deferring or accelerating
payment dates wholly or partly;'or (ii) modifications, extensions or renewals ata different rate of
interestwh~ther or not in the case of a,note, the modification, extension or renewalis evidenced bya
new or additional promissory note'or notes.
2.2 OBLIG-i\l'IONS. The term "obligations" is'used herein in its broadest and most
compnihensive senseiahd:shilll be deemed to include, withoutliinitation,allprincipal;,interest,
prepayment.charges (if any}, late charges, other charges, and'loan fees at anytime accruing or
assessed'on any of the Secured .Obligations.
2:3 INCORPORATION All terms of the Secured Obligations and the documents
evidencingsuch'obligations",are incorporated herein by this reference. Any and all persons 'or entities
who may have or'ac,quire an interest in the Subject Property shall be deemed to have notice ofthe
terms of the Secured Obiigations and to have notice, if provided therein, that: (a) the Note may
permit borrowing; r,epayment 'l,nd re-borrowing so that repayments shall not reduce the amounts of
the Secured'Obligations;and:(b) thente of interest on one or more Secured Obligations may vary
from time to time.
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DOCSOC\914701 v2\22345,OO75
.,. . ' . OOS~68 .
ARTICLE 3. ,ASSiGNMENT OF LEASES AND RENTS
3.1 ASSIGNMENT Trustor hereby irrevocably assigns to BenefiCiiiry, subject to any
prior assignment to Trustor's lenders,aILofTrustor',sright; titlLina interest in, to and under' (a) all
leas~s and;subje,!ses ofthe Subject Property or anyportion,thereof, all,licenses and agreements
relating:to'themanagement, leasing:ot:operation of the, Subject Property or anyportiorrthereof, and
all other agreements of any' kind relating to the use or occupancy of the Subject Property or any
p()rtion ther~()f, whether now existing or entered into after the date hereof("Leases");:and(b) the
rerits, is'sues,.deposits and profits oftheSubject Property, including; without limitation, all.amounts
paya):lle an~j;aILrightsand~enefits ~9cruing to Trustor under-the Leases ("Payments"). The term
"heas~s" sh~all'also'include a11;guaranteesofand security for the lessees'performal)ce ther~under,
and all amendments, extensions,renewals'Or m()difications thereto which areperinittedhe'r'eunder.
This.is:a presenf,and absolute assigJ?inerit, not an' assignmentfotsecurity, purposes only,and
BeneficiarY's-righUo theI"eases'iirid Payments is not contingent.upoIl,andmay be exercised without
possessionof,.the Subject Property
3,2GRAN'f OF'LICE~SE. Beneficiary confersluponTrustor:a license ("License"),
subject to anypriodicenseconferred upon Trustor's lenders, to'.collect and retain the Payments as
theyb'ecome dile andpayabie, untiltheoccurrence of a Defau,l! (a~hereinafter defined). Upon a
Default, tjleLicense shall',be'al,l1omatically revoked and Beneficiary.may collect and apply the
Payments. pursuant to Section 6,4 without notice and'withouttakingpossessionofthe\~ubject
Property Trustor hereby irr,evoc.ably aWhorizes and directs the lessees uriilertheLeasestorelyupon
,and~comply,~ithany notice 6f:deman~d by I3eneficiary, for the payment to Beneficiary of any rel)tal;or
other sums.v"hich'rriay.at any,time,become due under theL~ases,:or fortheperfoniiance of any'ofthe
.lessees' unde!iakin,gs under theJ~e<lses,'and'the lessees shall haveinoi'right or duty to inquireasJo
whether any Default,has actualiy occurred oris, then existing hereunder. Trustorherebyrelieves the
lessees from'any'liiibilityto Trustor by reason of relying upon and'complying with any such notice or
,demand by, Beneficiary .
3d EFFECT OF ASSIGNMENT The.foregoingirrevocable Assignmentshallnot
cause Beneficiary to be: (a) a,mortgageein possession; (b) respon~ible or liable for the:corittol, care,
management or r~pair oftlie SubjecH~r()perty or for perforinirigariy,ofthe terms, agreements,
undertakings; obligations, represeritations, warranties, covenants. and ~onditions of the Leases; or
(c) responsible, or liable for any waste 'committed on the'Subject Rroperty by the lessees.under.ariy of
the Leases or any other parties; forany'dangerous or defective', condition of the Subject Property; or
forariy negIigence in the management, upk:eep,repairor control'ofthe Subject Propeftytesulting in
loss or injury or death to any Lessee"licensee;employee, invitee onother person or entity
Beneficiary shall notdire'ctly or.indirectly be lia1;>le to Trustor ()r any other person or entity asa
consequence of: (i)'the.ext;J'cise:or failure to exercise any'ofthe rights, remedies or powers'granted
to Beneficiaiyiheretirideri'or'Ci!l the faiiureonefusa(ofBeneficiaryto perform or discharge. any
obl,!gation, duty or liabilityofTrustorarising under the Leases.
3~4;, ~PRESENTATlONSAND WARRANTIES. Trustor represents and warrants
thatasofth'e:date'ofth;s;b~ed of Trust'there are no 'existing Leases.
3,5 coVENANTS: Trustor covenants and agrees at Trustor's 'sole cO,stand,expense to:
(a)'perform the,obligatiol1s oJless.or containedin,the,Leasesand eriforce by aii available remedies
p~rformanc~by.t)1elessees6fth'eobligations ofthe'iessees.contained in the Leases; (b) exercise
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DOCSOC\914 701v2\22345 ,0075
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c . . .
005469
Tru~tor'sbestef(ortsJo lease all ofthe apartment units within the Subject Property at all times upon
the completion of constfuctiono't'the Inwrovements; (c) deliver to Beneficiary fully executed,
counterpartorigimil(s) of each and every Lease if requested todo,so; and (d) execute and record such
additiemaLassignlJlents of~ny Lease or specific subordinations of any Lease to the Deed.ofTrust, in
form aiid shosfance acceptable to Beneficiary, as Beneficiary m~y request. Trustor shall not, without
Beneficiary's prior written consent, except as otherwise permitted pursuant to the Loan Agreement:
(i) enter into any Leases after the date of this Assignment except leases in the ordinary course of
Trustor' s' business'and on the ,lease form approved by Beneficiary; (ii) execute any other assignment
relatingto,:anyoftheLe~ses;'(iii)discount any rent or-other sums, clue under the Leases or collect the
sameiii.,advance,other than to collectrent oue (I) month in advance of the time when it becomes
due; (iv) termmate, modify or amel1&any of the terms of the Leases'or.in any manner release or
discharge ~he'ies~eesfrom-.any obligations thereunder excepfin ,the ordinary course of Trustor's
bifsiness; (v)'cofisentto any assignment or subletting by'any lessee; or (vi) subordinate or agree to
subordinate any of the Leases to any other deed of trust or encumbrance, except as required to obtain
final1cinglfortht) ~ubje~t Properly Any such attempted action in violation of the provisions oftJiis
SectionJ,Sshall'benull and void. Without in any way limiting the requirement of Beneficiary's
consent hereunder,. any sumueceiyed by Trustor in consideration of illlytermination (or the release
or d,ischarge ofany lessee) modification or amendment of any Lease shall be applied to'reduce the
outstanding Secured Obligationsiand any such sums received by Trustor shall be held'intrust by
Trustor for such purpose.
3,6 ESTOPPEL. CERTIFICATES. Within thirty ('30) days after written request by
Beneficiary, Trustor shall deliver to, Beneficiary and to any party d~signated by Beneficiary estoppel
.certificates executed by.Trus,toral!dby each of the lessees, in recordable form, certifying (if such be
the case): (~) that,the foregoing.assiglfment and the Leases are in fuilforce and effect; (b) the date of
each'lesseesmost recent paymen(ofrent; (c) that there are no defenses: or offsets outstanding; or
stating tho~e,claimed by Tl1!stor orlessees.under the foregoing assignment orth'e Leases, as the case
may be; arid (d) any other irtfoffi1ation reasonably requested byBeneficiary
ARTICLE 4. SECURITY AGREEMENT AND FIXTURE FILING
4.1 SECURITY INTE_REST Trustor hereby grants .and assigns to Beneficiary, as of
the effective.date of the Loan Agreement, a security interest,;tosecurepayment and perfonnance of
all of the Secured Obligations; inallofthe following described,persopal property in which Trustor
now, or at any time hereafter has any interest (collectively, the "Collateral"):
AlLgoods, building and otheiimaterials, supplies; work in process, equipll1ent, machintlry,
fixtures;.furniture, furnishipgs, signs, and other personal property, wherever situated, which
are or are to be. incorporated into, ,used in conhection'with, or appropriated',for use thereon, (i)
the Real Property describe,d on Exhibit A attach~d.heretoandincorporated:by reference
herein (to the:extent+the satrie are not effectively made a part of the Real Property pursuant to
Section 1 I above) or (ii) the improvements constfuc,tedor to beconstructed'onthe Subject
P~qperly, as de,scribedill the Disposition and Development Agreement between Trustor and
Beneficiary, dated'May 2,2000 (which real property and improvements are, pursuant,to
Section 1 1 above, collectively referred to herein, along with the other property described in
Section 1 ! above, as,the Subject Property); together with.allrents, issues, deposits and
profits.ofllie Subject Property (to the extent, if any, they are not subject to Article 1Il); all
iiwentory"accounts, cash receipts, deposit accounts, accounts receivable, contract rights,
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DOCSOC\91470 l v2\22345 ,0075
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005470
general intangibles, chatteLpaper;,instiuments, docllinellts, notes, drafts, letters of credit,
insurance policies, insurinc-eand condemnationaward~'<ind,pro.cet<ds, any other rights to the
payment of money, trade names;tra,Iemarks,and service, marks arisingfroin.ofrelated to the
SlIbject.Property or any busillessnow orhereafterc6nducted thereon by Trustor; all permits
c'ohsents, approvals, licenses~autliorizations and oth~r rigli~sgrantedby, .given byor,?btained
from, any governmel1tal entity with respect to theSubjectPfoperty; all deposits or other
security now.or hereafter.macte'.with or given to utility companies byTrustor with respect to
the Subject Property; all advance payments of insurance premiums made by Trustor with
respect to the Subject Property; all plans, drawings andispecifications relating to the Subject
Property; all loan funds held bY Beneficiary, wheihef'or not disbursed;, all funds deposited
with Beneficiary pursuant to any loan agreement;'iaILreserves, deferred payments,. deposits,
accounts, refunds;costs<ivings and payments of any kind' reWed to the Subject froperty or
any portion thereof;together,with.alIreplacementsandproc!leds of, and additions and
accessions,to, any of the foregoing; together with all books, records and files nilating to any
of the foregoing.
Asto,all,ofthe aboyedescribed,personalproperty which is or which hereafter becomes a "fixture"
under appli~abIe.law, this DeedofTrustconstitutes,a security agreement and'a fixture filing under
Sections,9.1 05, ,9313 ,artd.9402( 6), of tlieCalifornia Uniform COJImlt<rci,aICode, as ,amended or
recodified from time to tiine, an,c1is acknowledged and agreedto.be a"construction mortgage' under
such Sections. Trustor is the "debtor" and Beneficiary is the "secured,party" Beneficiary's security
interestin tlie C6llateralshall be junior and subject to the prior security interest of Trustor's lenCler(s)
for the SubjectProperty
4,2 '~PRESENTA nONS AND WARRANTIES. Trustor represe,ntsand ,,!,arrants
that: Ca) Trustof,has, or will have, good title to the Collatera), (b) Trustor has not previously assigned
or encumbered the Collateral, an_Cl'l1ofinancing statement covering:any of the Collateral has been
delivered to any other person or entity except to constructign and'pe!111anent lenders approved by
Beneficiary; and (c) Trustor's principal place of business is located at the address shOwn in Section
7.8.
4,3 RIGHTS OF BENEFICIARY In addition to Beneficiary's rights as a "secured
party" under the California Uniform Commercial Code"as lI111eqdedor recodified from time to time
("DCC"), Beneficiary may, ,but shall not ,be obligated to, at all)! time witho.ut notice and at the
expense of Trustor:, (a) give notice'to,any person or entity of Beneficiary's rights hereunder and
enforce such rights at law or in equity; (b) insure, proteCl"defelldand'preservetlie Collatenil or any
,rights or interests of Beneficiary therein; (c) inspect the 'Colla!era,l, al1d Cd}endorse; collect and
receive any right topaym~ntoflTIoney owing to Tnistoiunder or from the Collateral.
Notwithstanding,the above, in nO,event shall Beneficiarybt<ideemed t9 hayeaccepte_d any property
other. than' cashjn satisfaction 9f any obligation of Trustor to Beneficiary unless Beneficiary shall
make an expr~~swritten election of said remedy underUCCs9505, or other applicable law
4.4 RlGHTS.OF BENEFICIARY ON DEFAULT, Upon the occurrence ofa Default
(hereimifter defirted)imder this Deed of Trust, then in'addition to all of Beneficiary's rights asa
"secured party' "under the DCC or otherwise at law'
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DOCSOC\91470 1 v2\22345 ,0075
. 005471- .
a. BenefiCiary rnay(i) upon written.notice, require Trustor to assemble any or
," . -". -- >
all oftl;e Collateral and make it availa.b)e to Beneficiary ata'place designated by Beneficiary; (ii)
without<prior notice, enter upon the SulijectProperty or,other place where any of the Collateral may
be locatedaild take possession of, collect; sell, and dispose<ofianY or all of the Collateral, and store
the same at locations acceptable,to Beneficiary at Trustor's:expense; (iii) sell, assign and deliver at
any pla~~:o~jn,:any lawful<manner all or any part of the Collateral and bid and become purchaserat
any such sales; and
b. Beneficiary may, for the account of Trust()r and at Trustor's expense: (i)
operate, use, consume, sell or dispqse of the Collateral as Beneficiary deerns appropriate for the
purpose oBperformingany ofalLofthe'Secured Obligations; (ii) enter, into any agreement,
compromise, or settlement;,including insurance, claims, which Beneficiary may deem desirable or
proper with respect to any oBtheCollateral; and (iii) endorseancl deliver evidences oftitle for,and
rec'eive, enforceandcollectby'legal action or otherwise,al! indebtedness and obligations now or
hereafter owing to Trustor.in cOtlllection with or on account of any or all ofthe Collateral.
Notwithstanding anyoth~rprovision hereof, Beneficiary shall not be:deemed to have accepted any
property other than .cash in satisfaction of any obligation of Tmstor to Beneficiary unless Trustor
shall rnake an express written election of said remedy under DCC 99505, or other applicable law
4.5 POWER OF ATTORNEY Tmstor hereby irrevocably appoints Beneficiary as
Tmstor's attorney-in7fact (such agency being coupled with an interest), and as such attorney-in-fact
Beneficiary may, Withoutthe obligation to do so, in Beneficiary.'s name, or in the name of Trustor,
prepare; execute!lnd file ofrecoid financingstitements, contimiationstatements, applications for
registfationand.1ike,.papers ne'cessary to create, perfect or preserve any of Beneficiary's security
interests. and rights in or to aJ?y oOhe Collateral, and, upon a Defaulthereunder, take any other action
required of Trustor; of oVid ed, however, that Beneficiary as,such attorney'in-fact shall be'accountable
only for such funds as are actually received by Beneficiary
4,6 POSSESSION AND' USE OF COLLATERAL. Except as otherwise provided in
this Section, or, any other Loan'oocurnents (as defined in the LoanAgreement), so long as no Default
exists under this De'ed of Trust, Trustor may possess, use, move, transfer or disposeof'imy of the
Collateral in the ordinary course,ofTrustor's business and iitaccordance with the Loan Agreement
and Disposition' and DevelopiIient Agreement.
ARTICLE 5. RIGHTS AND DUTIES <OF THE PARTIES
5,1 TITLE, Trustor represents and warrants"that, except as disclosed to, Beneficiary in a
writing,which-refers to this warranty, TmstorJawfully holds andpossesses valid title, to the Subject
Property without limitation ,on the right to encumber,(e~ceptfor the Lessor!s approval right for
encuf!1brancesspecifically set foithin the Ground Lease), and that this Deed of Trust is a first and
prior Ii en ontlie Siibject'Property
5;2 TAXES AND,ASSESSMENTS. Su15jectto Trustor's right to in good faith contest
payment of taxes, 'fUIstor shall pay prior to delinquency aIftaxes, assessrnents, levies and charges
imposed by any public orquasi'public authority or utililJ.' company which (i) are or which may
become a lien'upon or cause a loss:in value oftheSubject'Property or any interest therein, or (ii) are
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. DOCSOC\914 70] v2122345.0075
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005472
required to be paid by Trustor pursuanHo,theGround Sublease.. 'Trustor shall also pay prior to
delinquency aIUaxes,assessrilents, jeviesand charges imposedoy,any.public autl10rity upon
Beneficiaryhy reason of its interest in any Secured Obligation o~in,the Subject Property, or by
reason ofallypayn:1ent made to Beneficiary pursuant to any Secured Obligation; provided, however,
Trustor ~hl:!WIiave,no obligation,to pay taxes which may be.'irnposed from time to time upon
Beneficiary,alfd which are measured by and imposed uponBeneficiary's net income.
.5:3 TAX AND INSURANCE IMPOUNDS. At Beneficiary's option and upon its
deman9,'Trustor, shall, untilallSecured Obligations have' been paid' in full, pay to Beneficiary
monthlY, annually or as othelWise!directed by Beneficiary anamount'estimated by Beneficiary to be
equal to: (a) all taxes, assessments and levies imposed by'an'ypuhlic or. quasi-public authority or
utility company which are or may-become a lien upon the SubjeciProperty (or which are required to
be paid by Trustor pursuantJ:o the Ground 'Sublease) and will become due for the tax year during
which such payment is,so directed; and (b) premiums'for fire,other.hazard and mortgage insurance
next'due. If-Beneficiary determines that any amounts paid by 'Frustor. are insufficient for the
payment in full of such taxes,:assessments, levies and/or insurance premiums, Beneficiary shall
notify Trustor,ofth~ increased amounts ,required to paY,allarilounts due, whereupon Trustor shall pay
to Beneficiary within thirty (30)da'ysthereafter the additional ,mtount as stated in Beneficiary's
notice. All sums,so paid shall n,ot bear interest, except to the extentand in any minimUln,amount
requjredby lilw;;and Beneficiary shah, unless Trustor is othelWise,iniDefault hereunder or under any
Secured.0bligation, apply said' funds to, the payment of, or at'the,sole option ofBeneflCiarytelease
said funds to Trustor for the, application to and payment of, such sums"taxes, assessments, levies,
charges, ,and'insurancepremiums. Upon Default by Trustor hereunder or, under any Secured
Obligation,. Beneficiary may apply all or any part of said sums to,any Secured Obligation and/or to
cure such Default, in which'event.Trustor shall be required to restore all amounts so applied, as well
as to cure any other events of'Conditions of Default not cured by such application. Upon assignment
of this Deed of Trust, Beneficiary shall have the right to assign all amounts collected and in its
possession' to its!assignee whereupon Beneficiary and its Trustee shall,be released from all,'liability
withrespect thereto. Within ninety-five:(95) days following-fulIrepayment of the Secured
Obligations (other than full repayment of'the Secured Obligations as a consequence of a foreclosure
or conveyance in lieu offoreClosure of the liens and security interests. securing the Secured
Obligatioris) or at such earlier time as Beneficiary may elect, the balance orall amounts collected and
in. Beneficiary's possession shall be paid,toTrustor and no other party shall have any right or claim
thereto.
5:4 PERFORMANCE OF SECURED OBLIGATIONS. Trustor shall promptly pay
,and perform each Secured Obligation when due.
5S LIENS, ENCUMBRANCES AND CHARGES. Trustor shall immediately
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discharge any liell JIotapproved by Beneficiary in writing that has!or may attain:priority over this
Deed'ofTrust, subjectto'thetequirements of the Loan Agreement-and GroundLease with respeCt to
mechanic's liens. Trustor shall pay when due all obligations secured by or reduCible-to liens and
encumbrance~'whichshall now or'hereafter encumber'orappear to 'encumber all or any part of the
Subject Property. or any interest therein, whether senior or subordinate hereto.
5,6 DAMAGES; INSURANCE AND CONDEMNATION PROCEEDS.
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DOCSOC\914 701 v2\22345 ,007 5
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a. The;fol\ow:ing'(whether now existing, or 'hereafter arising)are, in the amount
not to exceed any sums then owing ullderthe Loan Agreement and Note, all absolutely and
irrevocably assigned'by Tt'ustor.t6 Beneficiary and, at the:reguest of Beneficiary, shall be paid
directly to Beneficiary' (i) all awards of damages and all othercOlllpensation payable' directly or
indirectly by reason. of aconderimation or. proposed condemnation for public or private' use affecting
all or allY jJart of, or any interest)n, the,subject Property; (ii) all other, claims and awards for damages
to, ordecrease in vahle of, all or;anfjJartof, or any interestin, the.Subject Property; (iii) :ill proceeds
of any insurance policiespayable by reason ofloss sustaine.d to all or any part of the Subject
Propei1Y;and (iv) all interestwhich'mayaccrue on any of the foregoing. Subject to appiicable law,
and withol,lt regar<J,to any req\lirementcontained in Section 5 7(d), Beneficiary may at 'its discretion
applyalhir allyofllie proceeds.itreceives to its expenses in settjing,prosecuting or defending any
claim and may apply thebahmce, to' the Secured Obligations in any order, and/or Beneficiary may
release all or any part,ofthe proceeds'to Trustor upon any conditions Beneficiary may impost:.
Beneficiarxmay.coimnence, appear ii), defend or prosecute any assigned claim or action and may
adjust, .compromise;settle an<:lcoll~ctallclaims and awards' assigned ,to Beneficiary; provided;
however, in no event shall Beneficiary be responsible for any failure to collect any claim oraward,
regard\ess'ofthe cause of the failure.
b. At its.reasonable option, Beneficiary may.permit insurance or condemnation
proceeds held by'Beneficiary to'be used for repair orrestoration'butmay condition such application
upon reasonable ccirtditions, including, without limitation: (i) thedt:posit with Beneficiary of such
additional funds which Beneficiary'determines are needed to pay all costs of the repair or restoration,
(including, without limitation, taxes, financing charges, insurance and rent during the repair period);
(ii) the establishment of an arrangement for lien releases and disbursement of funds acceptable to
Beneficiary; (iii) thedeliyery to Beneficiary of plans and specifications for the work, a contract for
the work signed by ii contractor acceptable to Beneficiary, ~ cost breakdown for the work<inda
payment and performance bond for the work, all of which, shall be, acceptable to Beneficiary; and (Iv)
the deliverylo-Beneficiary of evidence. acceptable to Beneficiary (aa) that after completion of the
work lhe..iiicome from the Subject. Property will be sufficient to pay all expenses and debt service for
the Subject Property; (bb) of the continuation of Leases acceptable to and required by Beneficiary;
(cc) thatuponcoriipietion of the work, the size, capacity and total value of the Subject Property will
be at ieast as great as itwas'beforeJhe damage or condemnation occurred; (dd) that there has been no
material adverse change in the financial condition or creditofTrustorsince the date ofthis Deed of
Trust; a.nd (ee) ofthe satisfactionof'imyadditional conditions that Beneficiary may reasonably
establish to protect i!ssecuri,ty., Trustor hereby acknowledges that the conditions described. above are
reasonable,.and, if such conditions have not been satisfied within thirty (30) days of receipt by
Beneficillry ofsuchinsur.~n9,e'or condemnation proceeds, then Beneficiary may'apply such insurance
orcondemnatioii,proceeds'to'pay down principal of the Secured Obligations in such order and
amounts as Beneficiary in its sokdiscretion may choose.
5,7 MAINTENANCE AND PRESERVATION OF THE SUBJ"EGT PROPERTY
. ...-
Trustor covenants, subject to' the provisions of the Loan Agreement: (a) to insure the Subject
Propertyagain'st such risks'as Beneficiary may reasonably require and, at Beneficiary's request, to
provide evidell()e <:,fsuchinsurance to Beneficiary"and'to,comply with the requirements of any
insurance cOll}panies insuring the Subject Property; (b) to keep the Subject Property in good
condition and repair; (c) notto,removeor demolish the Subject Property or any part thereof, not to
alter, rest()reor add to'lhe Subject Property and not to-initiate or acquiesce in any change in any
zoning or other land Classification which affects the Subject Property without Beneficiary's prior
8
DOCSOC\91470 1 v2\22345,0075
.' 00547'4 .
.
written consetii;\( d) to complete or restore ,promptly and<in good and workrnimlike,manner the
SubjectPi'operty,or ariypait:thereOfwnich may be damaged'ordt;stroy~d, without regard to whether
Beneficiary,elects to requirethatinsl!rance proceeds be, used to,reduce the Secureo Obligations,as
providediin;Se9!!<;>n'5'6,(e) to compl~with' all.1aws, ordinances, regUlations and standards, and all
covenantS, conditions, restrictions and equitable servitudes, whether public or private, of every kind
and characterwnich affectthe;SllpjectPropertyand pertain to acts committed or conditions existing
thereon; incluqing, withoutlirnitation, any work, alteration, irnprovementor demolition mandated by
such,la\vs,covenants or requirernents; (f) not to commit or pel1TIit waste of the SubjectProperty; and
(g)t6 do aU other acts which from the c~aracter or use of the' Subject Property maylJe,reasonably
necessary to maintain and preserve its value.
i5;S DEFENSE AND'NOTICE OF LOSSES, CLAIMS AND ACTIONS. At Trustor's
sole expense, Trustor shall protect; preserve and defend the Subject'Ptoperty and title to arid right of
possessionoftqe,Subj::ctProperty)hesecurity hereof and the rights ana powers of Beneficiary and
Trustee'heieunder against all ,adverse claims, Trustor shall give,Benefici,aryand Trustee prompt
notice in writillgofthe asseJ.tio,IlPt~nyclaim, of the filing ot"anyaction or proceeding"ofthe
occurrence ofanydamilgeto,tlie:Subject Property and of any conoemnation offer or action.
5.9 ACCEPTANCE OFTRUST; POWERS AND DUTIES OF TRUSTEE. Trustee
accepts,this trust wlien this Deed ofIrust is recorded. Fro!ll timetotime'upon written request of
Beneficiarya,nd.pre~entation'ofthis,Deed of Trust or a certified copy thereof for endorsement"and
withoutaffecting.thepersonalliability:of any person or entity for,paymentofany indebtednessoi
'. . _. -. -. .-. ,
performance,of any obligationsisecurt;dhereby, Trustee may, without liilbility therefor and without
notice: (a)-reconvey aU or any part Of the Subject Property; (b):consent to the making,of;any map or
plat thereof; and (c) join in any,granLof easement thereon, any declaration of covenants and
restrictions,oranyextensionagreementorany agreement subordinating the lien' or charge of this
Deed of Trust. Except as may'be,required by applicable,law, Trustee ,or Beneficiarymay.frorntirne
to tirne apply to' any court of competel)tjurisdiction for aid and direction in the execution:ofthe trust
hereunderand,theenforcement,oftherights and remedies availableheteunder, and'mayobtain orders
or gecrees directing, or confirrrting' ocapproving acts in the executio!l of-said trust and the
enforcement of saicf remedies. Tiusteehas no obligationtonotify'ariyparty of any pending sale or
any.actjonor pr()ceeding"including;.\vithout limitation, actionsoin which Trustor, Bene!1ci~ry or
TrusteeshaU be a'party unless held orcommenced and maintaiIleqby Trustee 'under this Deed of
Trust. Trustee shaU !lot bt; obliga~ed'toperformany act required of it hereunder unless the
performance ofthe aCt is requeSted in writing and Trustee is reasonably indemnified and held
,harmless againstloss, cost, liability of'expense.
5,10 COMPENSATION; EXCULPATION; INDEMNIFICATION
a, Trustoj-'shall pay Trustee's fees rand reimburse Trustee for expenses in the
administration oftliis trust; incll!ding'attorneys' fees. Trustor shall.pay to Beneficiary reasonable
compensation for, serVices tendered concerning this Deed;ofTrust, including withoudiIp.it any
, '
statement of amounts owing under any Secured Obligation. Beneficiary shallilOt directly or
indirectly be li~ble to Trustor or any other person or entityas,a consequence of (i) the. exercise of the
rights"remediesorpowets',grantedtoBeneficiary in this Deed ofTrust;(ii) the failure ouefusalof
Beneficiary to perform, or discha,rgeany obligation or liability of Trustor ,under any agreement related
to the Subj~ct Prope1}y,orundef'this Deed of Trust; or (iii),any loss' sustained by Trustororany third
party resulting,frorn Beneficiary's,failure to seU, lease or sublease tile Subject Property after a
9
DOCSOC\914701 v2\22345.0075
c . .
005475 Default (heniiiiaftefoefihed) brfrom any other act or omission of Beneficiary in managing the
Subject Property after <IJ:)efault, unJess'the loss is caused by the,gross negligence or willful
miscQnductofB~neficiary, and,no,stich,liability shall beasseried against or imposed upon
Beneficiary, and all such ]iabilityis hereby expressly waived and released by Trustor.
'b, Trustorindenmifies Trustee and Beneficiary against, and holds Trustee and
Beneficiary harmless from; a1l.loss,es"damages, liabilities, claims; causes of action, judgments, court
costs, <Itt.9meys' fees and othei'lega] expenses, cost of evidence of title, cost of evidence of value,
and other expenses which either may suffer or incur (i) by reason' of this Deed 6fTrust; (ii) by
reason of the execution ofthisitTust'or in performance of any act required or permitted hereunder or
by law; (iii) as a result of any,fai]ureiofTrustor to perform Trustor's obligations; or (iv) ,by reason of
any alleged obligation or undertaking on Beneficiary's part to perform or discharge any of the
representations, w,arranti~s, conditions, covenants or other obligations contained in any other
document related'to the Subject Property, unless the loss is caused by the gross negligence or willful
misconduct of Trustee or Beneficiary, as'applicable. The above:obligation of Trustor to indemnity
and hold,harmless Trustee and Beneficiary shall survive the rele<l$eand cancellation of the Secured
Obligations alldtherelease and reconveyance or partial release and.reconveyance of this Deed of
Trust. ,Notwithstanding,theforegoing, however, under no circumstances shall these indemnity
obligations of Trustor include any obligation for payment of punitive damages assessed against
Beneficiary or Trustee or their officers, employees, agents or representatives.
c. Trustor sha1l.,payall amounts and irtdebtednessarising under,this Section 5 ]0
immediately upon derriandby Trustee or Beneficiary together with interest thereon from the date the
indebtedness arises at the rate of interest then applicab]e to the principal balance <lfthe Note as
specified therein.
5.11 SUBSTITUTION OF TRUSTEES. From time to time, by a writing, signed and
acknowledged by Beneficiary artdtecorded in the Office of the Recorder of the Coimtyin which the
Subject Property is situated;,Ben~_ficiary may appoint another trustee to act in the place and stead of
Trustee,or any successor. Such writing shall set forth any information required by law The
recordation of such instrument of substitution shall discharge Trustee herein named and shall appoint
the new trustee as the trustee hereunder with the same effect as if originally named Trustee herein. A
writing recorded ,pursuant to theiptovisions ofthis Section 5 I] shall be conclusive proof of the
proper substitution of such new Trustee.
5,12 DUE ON SALE OR ENCUMBRANCE. IftheiSubject Property, or any interest
therein shall beisold, assigned, leased, subleased,tr<lnsferred (including, without limitation, through
sale or transfer of a IIl<lj~rity Qr controlling iriterest of the corporate stock or,generaLparlnership
interests or limited, liability, company interests of Trustor), mortgaged, collaterally assigned, or
further encumbered.(otherthan,leasesofindividual apartment units within the Improvements),
....- . -- -" , - ., -
whether directly of'iridirectly, whether voluntarily. involuntarily orby operation,oflaw, without the
pri'ot written consentofBeneficiary, THEN Beneficiary, in its sole discretion, may declare all
Secured Obligations'immediately due arid payable.
5,13 ,~LEASES, EXTENSIONS, MODIFICATIONS AND ADDITIONAL
SECURITY Without notice to or the consent, approval or agreement of any persons or'entities
having any interest'atanytime in the Subject Property orin any, manner obligated under the Secured
Obligations ("Interested Parties"), Beneficiary may, from time to time, release any person or entity
lO
DOCSOC\914701 v2\22345,0075
. 005476 .
from liability for the payment or performance of any Secured Obligation, ta~e any. action or make
any agreement'exiendingthema~rityor o.therwisealtering'the,teri'ris'or,increasing the,amount of any
Secured Obligati9n, or accept additional 'security or release'alI'or a portion bfthe Subjec(Property ,
and other security for the Secured Obligations. None'Of.the foregoing actions shall release oi.reduce
the personalliaoility of any of saidJn!erestedParties, orreleaseor impair the priority of the lien of
this DeedofTrust upon the SubjeCt Property
5.14 RECONVEYANCE. Upon Beneficiary's written request, and upon surrender to
Trustee for cancellation of this Deed of Trust or a certified copy thereof an&any,note"instrument, or
instruments setting forth all obligations secured hereby, Trustee shall reconvey, without warranty, the
Subject Property or that portion thereof then held hereunder 1:othe,extent permitted by law, the
~ .' - -
reconveyance may describethe,grantee as "the person or persons legally entitledtheretb" and the
recitals of any matters or facts'in'ilny reconveyance executed hereunder,shall be concll!sive proof of
the truthfulness thereof NeitherB.en!lficiary nor Trustee shall)(ive.'any duty to determine the rights
of persons or entities claiming to,be,rightful grantees of any reconveyance. When the Subject
. . - - , . -
Property has.been fully reconveyed, the last such reconveyance shall op.erate asa reassi~ent of all
future rents, issues and profits of the Subject Property to the personbr persons legally entitled
thereto.
5;15 SUBROGATION. Beneficiary shall be subrogated to'the lien of all encumbrances,
whether released ofrecord or 110.1; paid in whole or in part by Beneficiary pursuant to this Deed of
Trust or by the proceeds ofany loan secured by this Deed of Trust.
5;16 RIGHT OF INSPECTION. Beneficiary, its agents: and employees,may;enter the
Subject Property at any reasoll1ible time for the purpose of inspecting the Subject Property and
ascertaining Trustor's compliance with the ,terms hereof.'
5,17 SUBLEASEHOLD MATTERS. This Deed of Trust is.subject;to the requirements
of the Ground Sublease.
a. Termin~tion or Modification of Sublease. Without the express written
consent of Beneficiary, whichconsenFmay be granted or dimiedin Beneficiary's sokand absolute
discretion, Trustor shall not terminate,. cancel or surrender the Ground Sublease or the subleasehold
estate or interest in or to the Real Property, or modify, change, supplement, alter or amend the
Ground'Sublease, ' either orally orin writing. Any termination, cancellation, surrender modification,
change"supplement, alteration or amendment of the Ground Sublease without the prior written
consent-thereto by Beneficiary shall be void and of no"force or effect. Beneficiary's waiver ofthe
-- - ,... . . - ~
right to consenLto'on" mod~ficati()n,chal1ge, supplellfent,;alteration'or amendmeiitM the Ground
Sublease,shall not.be deeined to,be a waiver of the right to require consent to other, future or
successive,modifications; changes, supplements, aherations'9ramendmentsofthe Ground Sublease.
. ' _' d
As further security fonhe repayment of the Secured Obligations and for the performance of the
covenimts:contained herein or in, the Ground Sublease, Trustor hereby assig1)s to Beneficiary all of
Trustor's rights, privileges and prerogatives as lessee under the Ground'Sublease to tenitinate,
cancel, surrender, m()dify,change, supplement, alter or amend.the Ground Sublease. This
assignment',shall remain in eiIectuntil all obligations secured by this Deed of Trust are satisfied in
full.
11
DOCSOCI9 i 4701 v2\22345 ,0075
. , .
005477 b. Release of Obligations. No release or forbearance of any of Trustor's
. .. . .. ....~ .. . - . - - -. -, -,
obligations undef'the GroundStibleas~,:plirsuant to the Ground,Sublease or otherwise, shall release
Trustor from any of its obligations,under this Deed of Trust; including its obligations with respect to
th,epayrnellt of rent as provided fodn\he Ground Sublease and the performance ofall.6fthe terms,
provisions, covenants, conditions:andagreements contained in the Ground Sublease, to be kept,
performed and complied with by the lesse.e under the Ground Sublease,
c. Performance of Ground Sublease. Trustor covenants and agrees to pay
when due all rents and other payments ,and perform all covenants and agreements contained in the
Grou'nd'sublease and noHo surrender, cancel, assign or sublease the Ground Sublease, nor take any
other action that would effect'.or permittl}e termination ofthe Ground Sublease. Trustor covenants to
furnisl1to Beneficiary,.uponrequest, within thirty (30) days'after the date upon which such rents or
other, payments are due and payable by Trustor, receipts or other evidence satisfactory to Beneficiary
evidencing thepaymenttheniof Beneficiary shall have the right, but notthe obligation,. to cure any
defaulfby Trustor under ,the Ground Sublease and to perform any or all of Trustor's obligations
thereunder. All sums expended by Beneficiary in curing any such default shall be secured hereby
and shall be immediately due and payable without demand or notice Trustor agrees that it shall
promptly notify Beneficiary of any circumstances which give'rise'toa right on the part of Trustor
underthe Ground Sublease to make or participate in any decision, or determination which may affect
the Real Property Trustof'hereby assigns to Beneficiary all Of its rights to make or participate in any
such decision or determination. This,assignment shall r~main in effect until all oliligations secured by
this Deed of Trust are satisfied 'in full.
d, Representations of Trustor No consent, approval or agreement of any
person, entity, party, court or governmental agency is required to be obtained by Trustor in
connection witl1 the executionandd~livery of this Deed ofTrustoi'the performance of the tems
hereof or the consummation ofthetransactions provided for herein, that has not already been
obtained as,ofthe date hereof Consummation of the transactions contemplated by this,Deed of Trust
shall not cause a default or an eventthat, with notice or theJapse oftime or both, woul<lconstitute a
default, breach or violation of any agreement to which Trustor is'a party or by which its property is
bound.
e. Notices; If Trustor receives any notice,of default or alleged default under the
Ground Sublease or any other material notice, demand, complaint or other communication relating to
the Ground'Sublease or the Real Property, then Trustor.shall immediately deliver such notice;
deniand, c6mpiaint orother communication.to Beneficiary If either Trustor or the lessorunderJhe
Ground'Subleas~defaul.ts.or allegedly defaults under the Ground Sublease,thenTrustor shall
~.. '.
immediately delivefnotice of such default or alleged;default to Beneficiary
f. Joinder of Lessor If any lenderrequires Lessor's joinder in a note
securecl,bya;dlled of!rustor the:deed of trust itself no personalliability shall attach or personal
judgmeritbe obtained against Lessor by-reason of its joinder in such note secured by deed of trust or
the deed of trust itself Lessor shall not be required to encumber or subordinate its fee interest.
12
DOCSOC\91470 1 v2\223~5,OO75
.'
.. , . 005478 .
ARTICLE6, DEFAULT PROVISIONS
6,1 DEFAULT 'Fbrallpurposes.hereof, tlie,t~rm'''Defaulf'shall mean (a) at
Beneficiaty~s option, the failure of Trustor to make any payI1lent of principal or interest on the'Note
or to P<iY !lny other amount duehereunder,or under the Note when the same is due and payable,
within'!en'(10) days after receipt of written notice from BenefiCiary;,or (b) the failure of Trustor to
perforinan);"non-monetary obligation hereunder, or the failure to ,be true of any representation or
warranty of Trustor contained herein, and the continuance of such failure for thirty (30) days after
notice.from Beneficiary (or siichlonger grace period as maybeprovided pursuant to the Loan
AgreementJor such failure orlhe existence of any default under the Loan Agreement), or ifit is not
~easonably practicable to cure oireihedy,such failure within such thirty (30) day period, then Trustor
shall not'be deemed'to be in default if,Trustor shall commence such cure within such thirty (30) day
period and thereafter diligently prosecutes such cure to completion.
6,2 RIGHTS AND REMEDIES. At any time after Default, Beneficiary and Trustee
shall eaclihave all the following riglits and remedies:
a, With or without notice, to declare all Secured. Obligations immediiitely due
and payable;
b. With or without notice, and without releasing Trustor from any Secured
Obligation, and without becoming a mortgagee in possession, to cure any breach or Default of
Trustor and, in connection therewith, to enter upon the Subject Property. and do such acts and tl1ings
as.Beneficiaryor-Trustee deem necessary or desirable to protect'tl1e'~ecurity hereof, including,
without limitation: (i) to appear in'and defend any action or proceeding purporting to affect'the
security ofthisD~edofTrust oi.the rights or powers of Beneficiary or Trustee under this,Deed.of
Trust; (ii)'to pay, purchase, contest or compromise any encumbrance, charge, lienor claim oflien
which, in the solejudgmentofei!her,Beneficiary or Trustee, is orinay be senior in priority to this;
Deed of Trust, the judgment'ofBeneficiary or Trustee being conclusive as between the parties
hereto; (iii) to obtain insurance; (iv) to pay any premiums orcharges with respect to insurance
required to be ~arried under this Deed of Trust; or (v) to employ counsel, accountants, contractors
and other appropriate persons.
c. To commence'and maintain an action or actions in any court of competent
jurisdiction to foreclose this instrument as a mortgage or to'obtain specific enforcement ofthe
covenantS Of Tfustorhereunder, andTrusior agrees that such covenants shall be specifically
enforceable by injunctioJ.1 orany other appropriate equitable reinedy and that for, the purposes ofany
suit brought under this sUbparagraph, Trustor waives the defense oflaches and any applicable statute
oflimitations;
d: To apply to a court of competent jurisdiction for and obtain appointment of a
receiver oftlie Subject property as a matter of strict right andwithoutregard to the:adeqtiacy of the
security, for(1)e:repaYI!.)entoftheSecured Obligations,the,existenceofa declaration that the Secured
Obligations areinimediateJy dtieand payable, or the filingofanotice of default, and Trustor hereby
consents to such appointment;
e. To enter upon, possess, manage.and operate the Subject Property or any part
thereof, to take and P9ssess all documents, books, records, papers and accounts of Trustor or the then
13
DOCSOC\914 701 v 2\22345,0075
. 005479 .
owner oftheSuoject Property, to make, terminate, enforce or mod.ifyLeases of the, Subject Property
upon suchterms'alllfcoll,dit(ons as'Beneficiary deems proper,;tomakerepairs, alterations arid
improvements to the Stibject'PropeiiY as necessary, in Trustee's or Beneficiary's sole judgment, to
protect or enhance the,security,hereof;
f. To execute:a written notice of such Defatilt'and of its election to cause the
Subject Property to be sold'tlHatisfy the Secured Obligations. As a condition precedent to any'such
sale, Trustee shalL give and recorcl such notice as the law then requires. When,the minimum period
of time,requiredby'law after sucQllotice has'elapsed, Trustee, without notice to or demand upon
Trustof.except'as required by law;..sliaILsel\'the Subject Property. at the time 'and place of sale fixed
by it in the notice orsaIe, at'one;orseveral sales, either as a whole or in separate parcels and in such
manner and order, aIlasB~neficiil.ryjnits sole discretion may deteimine, at public auction to the
highestbiddetfor,cash, in,Iawfiil niorieyofthe United States, payable at time of sa Ie. Neither
Trustor nor'any other person oreniity,other than Beneficiary shaUhavethe right to direct the order in
which the S~bject Property is sold. Subject to requirements andlimits imposed by law, Trustee may
from time to time postpone saie of:HI or any portion of the Subject Property by public announcement
at such,time'and place of sale. Trustee sl1all deliver to the purchaser at such sale a deed conveying
the Subject Property or portion thereof so sold, but without ariy-covenant or warranty, express'or
implied. The.recitals in the deed Of any matters or facts shall b.~co.!1clusive proof of the truthfulness
thereof. Any person or entity, including Trustee, Trustor or Beneficiary may purchase at the.sale;
g. To resort to and realize upon the security hereunder and any othersecurity
now. or laterheid.by BenefiCiary concurrently or successivelYiand in one or several consolidated 'or
independellt judiciaL actions or lawfuljy,taken non-judicial proceedings, or both, and to apply the
proceeds received upon the Secured',Obligations all in such order and manner as Trustee and
Beneficiary,.or either of them, determine in their sole discretion.
h. Upop.saleofthe Subject Property atany judicial or nonojudiciaLforeclosure,
Beneficiary may'credit bid (as'deteimined by Beneficiary in its sole and absolute discretion) all or
any portion of the Secured Obligations. In determining such creditoid, Beneficiary may, but is not
obligated to, takeinto accountalI or any of-the following: (i) appraisals ofthe Subject Property as
such appraisals may be d:iscotihtedoradjusted by Beneficiary in its. sole and absolute underwriting,
discretion, (ii) expenses,and costs incurred by Beneficiary with respect to the SubjectProperty,prior
to foreclosury; (iii) expenses and costs which Beneficiary anticipates will be incurred with respect to
the Subject Property. after foreclosure, but prior to resale, inclUding, without limitation, costs of
structural reports al]d otherdue diligence, costs to carry the SUDject Property prior to resale, costs of
,resale (e.g. commissions,; attorneys' fees, and taxes), costs of any hazardous materials clean-up and
monitoring, costs oJ deferred. maintenance, .repair, refurbishment and retrofit,costs of defending, or
settling litigation.affectihg the Subject Property, and lost opportunity costs {ifany), including the
time valu<eoftponyy cIurinK~ny antiCipated holding period by Beneficiary; (iv) deClining trends in
real'property values,generallyand with respect to properties similar to the Subject Property; (v)
anticipated discounts.upon resale of the Subject Property asa distressed or foreclosed property; (vi)
the factofadcIitionalc~llilteral (if any), forthe Secured Obligations; and (vii) such other factors or
matters thalBerieficiafy(in its sole and absolute discretion),deems appropriate. Inregard to the
above, Trustor acknowledges and,agrees that: (w) Beneficiary is notrequired to use any or all of the
foregoihg.filctors todytermine,the,amount of its credit bid;, (x):this Section does not impose upon
BenefiCiaiyanyadditionalobligationsthat are not imposed by law at the time the credit bid is made;
(y) theamouhtofBeneficiary'scredit bid need not have any relation to any loan-to-value ratios
14
DOCSOC\91470 I v2\22345,0075
. .
005.A80
previouslydiscussed,between Trustor and Beneficiary; and'(z) Beneficiary's creditbid.may be (at
Beneficiary's!sole and ab,soIi)te:discretion) higher or lower than any,appnlised value oftheSubject
Property
6:3 ApPLICATION'OFFORECLOSURE SALKPROCEEDS. After deducting all
-. - - - - . -
costs, feesland..expensesofTrustee; and ofiliis trust, including, without limitation, cost of evidence
of title and, attorneys' fees ill. connection with sale and costsand,.expenses of sale and of any judicial
proceeding wherein such sale may be l11<lde, Trustee shall apply all proceeds of any Toreclosuie,sale:
(a)to,paymelltp'fall,sums expeniledbyBeneficiary under the terins hereof and not then repaid, with
accrued.iIlterestat:the'rate ofiIlterestspecified in the Notetobe.applicable on or after"maturity or
acceleratioIl of the Note; (b) to paYl11ent.ofallother Secured Obligations; and(c) the remainder, if
aIly;to the person or persons legally entitled thereto.
6A APPLICATIoilrOFOTHER SUMS. AU'sums:received by Beneticiary under
Section 6.2 or SectionJ.2,Jess'allcQsisand expenses incurred byBeneficiaiy or any receiver under
Se~tioIl.6.2 orS.ectionJ'2, includiIlg, without limitation,. attorneys' fees, shall be applied in.payment
oftheSeciifect:Obiigations in such order as Beneficiaryshaltdetermine jn its sole discretion;
provided, however, Beneficiary.shall have no liability for.:funds not actually received by Beneficiary
6.5 NOCURE'QRWAIVER. Neither Beneficiary'srior, Trustee's nor any receiver's
entry upon and.taking possessioii'bf,all or. any part of the SubjectPrqperty; nor any collectiollof
rents, issues, profits, insurance proceeds, condemnation proceeds'ori:1amages, other security or
proceedsot'other secl,1rity, orothersuins, nor the application of aIly.collected sum to any Secured
Obligation, nortlieexercise.or failure. to exercise of any other right or. remedy byBeneficiaryor
Trustee or,any receiyer s~~llcur~or waive'any breach, 'Default Of notice of default under this,Deed
of Trust, or ilUllify the effect of allY I10tice of default or sale (unless all Secured Obligations then due
have be~npaid andperforme<1and Trustor has cured all other: defaults), or impair the status,ofthe
security, or prejudiceiBeneficiaryor Trustee in the exerCise of any right orremedy, or be construed
as an affirination by Beiieficiary of any tenancy, lease or option or a stibordination of the lien, of this
Deed ofTrus!.
6;6 PAYMENT OF COSTS;,.EXPENSES AND ATTORNEYS , FEES: Trustor agrees
. ,- . ~ . - "
to pay to Beneficiary immediately and without demand all costs. and expenses incurred by Trustee
and Beneficiary pursuant to Sectic)ll' 6:2 (including, without lil11itati()n, court costs and attorneys'
fees, whether incurred in litigation' or not) with interest from the date of expenditure until said sums
have been paid at the rateofinierestthen applicable to the principal balance of the Note, as specified
tq.ereih. In addition, TrustorshalLpay to Trustee all Trustee's fees'hereunder.and,shall reimburse'
TrusteeJorall expenses incurred in the administration of this !rust, including, without limitation; any
attorneys' Tees.
6,7 POWERTOFILENOTICES AND CURE DEFAULTS. Trustor hereby
irrevocably,appoihts.Benejjciary, ami itssucce~sors and <ls~igns,as its attorney.in-fact, whichagehcy
is cqupled with an' interest, (a) to execute and/or record any notices of completion, cessation aflabor,
or any other. noticesthat-Beneficiarydeems appropriate,to proteclBeneficiary's interest, (b) upon the
issuance ofa.deed'pursuant,to the foreclosure ofthis,Deed of Trust or the deliveryofa deed in lieu of
forecLosure, to exe~ute all instruments of assignnient orfurther'assurance with respect to"the Leases
ahctPaynientsiii favor, of the ,grantee ,of any such deed, as may be necessary or desirable for such
purpose; (c)to prepare; execute and file or record financing statements, continuation statenients,
15
DOCSOC\9 J 4701 .v2\22345,0075
" . .
005481 applicationsJorregi,stration and likepap!lrs necessarytocreate;,perfect or preserve. Beneficiary's
security:interests and rights in or to any of the Collateral, imd(d)'-upori'theoccurrerice of an event, act
of omissloirwhich; wIthillotice of passage of time orboth, would constitute a Default, Beneficiary
may perfol1ll~anyobligationofTrustor,hereunder;prov!ded, however, that: (i) Beneficiary as such
attorney~incfactshall only beaccountableJor such funds as afeactually received by Beneficiary; and
, ....
(ii) Beneficiary shall not be liable to Trustor or any other person or entity for any failure to act under
this Section.
ARTICLE 7, MISCELLANEOUS,PROVISIONS
7,1 NO MERGER. No merger shall occur as a result of Beneficiary's acquiring any
othefestatein, or any other lien on, the Subject Property unless Beneficiary consents to a merger in
writing. Ifboththe lessor's'and lessee's'estate under any lease or apy portion thereof which now or
hereafter constitutes a part of SubjeCt Property shall atany.tirne'become vested in one owner, this
Deed of Trust and the lien created hereby shall not be destroyed. or tenninated by application of the
doctrine of merger unless Beneficiary so'elects as evidenced by.,recording a written declaration so
stating, and"unlessarid until Beneficiary so elects, Beneficiary,shaIi continue to have and enjoy all of
the rights and privileges of Beneficiary as to'the separate estates. In addition, upon the foreclosure of
the lien cn~atedby this Deed of Tiust.on the SubjectPropertypursuant'to the provisions hereof"any
leases. or subleases then existirigarid affecting all or any portion of I. he' Subject Property shall not be
destroyed or terminated by app1lcationofthe law of merger or.as a matter oflaw or as a result of
such foreclosure'unless Beneficiary"or any purchaser at such foreclosure sale shajl.so' elect. No act
by or'on behalf of Beneficiary or any such purchaser shaU.constitute atennination,of any lease or
sublease ul1less Beneficiary'or such purchaser shall give written riotice thereof to such tenant'or
subtenant.
7.2 WAIVER OF MARsHALLING RIGHTS. Trustor, for itself and for all parties
claiming through or under Trustor, and for all parties who may acquire a lien on or interest in the
Subje~t Property, hereby waives all rights to have the Subject Property and/or any other property,
including, without limitation, the'C':ollateral, which is now or later may be security for any Secured
Obligation ("Other Property")m<irshaledupon any foreclosure of this Deed of Trust or on a
foreclosure of any other security for.anyofthe Secured Obligations. Beneficiary shall have the right
to sell, and any court in which. foreclosure proceedings may be.grought shall have the righHoorder a
sale.of, the:SubjectProperty ana any or all of the Collateral or Other Property as a whole or in
separate parcels; in,any order that Beneficiary may designate,
7.) RULES OF CONSTRUCTION When the identity of the. parties of'other
circumstances make,itappfopriate the masculine gender includes the feminine and/or neuter, and the
singular numberi!1,c)udes",the plural. The tenn "$ubjectPr9perty" means all and any part of the
Subject Property, and any interest in the Subject Property
7.4 SUCGESSORS IN INTEREST The tenns, covenants, and conditions herein
containedshall'be binding upon and inure to the benefit ofthe.heirs, successors and assigns of the
. '
.parties hefeto';provided, howet;er, that this Section 7 4 does,notwaive or modify the provisions of
Section 5.12.
16
DOCSOC\914701 v2\22345,0075
" . . .
' ~:
.
005482
75 EXECUTION'lN COUNTERPARTS. This Deed ofTrust may be executed in any
nutnbetofcounterparts,each otwhich, when executedand':de)i'veregtoBenefi~iary, will be deemed
to,'be,an original and all of which, taken'together, will be deemed to be one and the same instrument.
7,6 CALIFORNIA LAW This Deed of Trustshall be construed in accordance with the
laws,of the State Of California, exceptto the extent that FederaIJaws preempt the laws of the State of
California,
7.7 INCORPORATION Exhibit A and Schedule I, all as attached, are incorporated
into:this,DeedofTrust by this reference.
7,8 NOTICES., All notices or other communications required or permitted to be given
pursuant to the provisions ofth!s'De~d of Trust shall beinwritihg and shall be considered as
properly given if delivered personally or sent by first class U,S. mail, postage prepaid; except that
notice ora Default may be sentby certified mail, return receipt requested, or by Overnight Express
Mail, or by overnight commerci~fcourier service, charges prepaid. Notices so sent shall be effective
three (3), days after mailing, .jf mailed .by first class mail, and otherwise upon receipt at the addresses
set forth. below. For purposes ofnoti~e, the addresses onhe parties shall be:
Trustor- Los Arcos Limited Partnership
c/o Retirement Housing Foundation
911 Nort)1 Studebaker Road
Long Beach, California 90815
Attention: Chief Executive Officer
Beneficiary- Poway Redevelopment Agency
PO Box 789
PoWay,California 92074-0789
Attention: Assistant Executive Director
Trustee: Chicago Title Company
925 "B" Street
San Diego, California 92101
Any party shall have the right,to change its address for notice hereunder to any other location within
the,continental United States by the'giving ofthirty (30) days notice to the other party in the manner
set forth hereinabove. Trustor shall forward to Beneficiary, without'deIay; allY notices, letters or
other c0!J1Il1uni9ation~ delivered to the Subject Property or to Trustor naming Beneficiary, "Lender"
or the '~COflstruction Lender" or any similar designation as ad.dressee; or which coule.! reasonably be
deemed to affe9tthe c<?TIstruction ofthe Improvements or'theability of Trustor to perforin its
obligationsJo Beneficiary under the Note.
17
. DOCSOC\914 701 v2122345,Q075
.,,, " . .
005483,
IN'WJTNESS WHERE0F, Trustor has executeclthisDeedofTrust as of the day and year
setJorth above.
LOS ARCOS LIMITED PARTNERSHIP,
a California limited partnership
BY' Los Areos RHF Housing, IDe" a California
nonprofit corporation, its Managing General
Partner
BY' -fV0 0~ r
(ALL SIGNATURES MUST BE ACKNOWLEDGED)
18
DOCSOC\91470i v2\22345 0075
; ,
.. . 005~84.
CALIFORNIA ALL.PURPOSE ACKNOWLEDGMENT
,<:</V<,j0<:'S:.;';:&Y:~{:<</c~ ...c<",-XX:.;-(;",';"''':AJ<: c:,.,-;-(><:;(<:/~'(:'-:' ~~x,~",:':C:'V{~'('z':.j-.X'A.J<':. ,^' ,.~'" ~":.~~_ c{: s"&~ .~" '-c~{"";(' ';::<:"0':.(<;;
Li, ~ i)
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State of'California } ss g
, .. ~'J'
.i< County"of Los Angeles i;>
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" Oh,---Augll~f' f1J 7007 before me, P~f'r;r;~ F W~lpr ~'
Date Name and Tille of 0 icer (e,g, 'Jane 000. Notary Pubh~.) i;>
Richard T, ".J
personally appeared Washington :')
~'):
Name(s)ofSigner{s) Ii
o personally known to me ,
Ij(I proved to me on ,the basis of satisfactory ~ ,',
evidence I,;,,)
~I'
to be the ,personl", whose name(s) is/are "
subscribed to the within instrument' and ~j,
acknowledged to me that halsi:lQAI><>\t executed
the in hi~ authorized , ,
_ PATRICIAE:wYLER' same
. Commissionifi3.598~4 i capacitYliB&), and that by hislOOl:llMir
l .1Ii "Not.ry>PUbliC,,'C.I~oml"_ sig"ature~) o,,"lhe instrument the person~)"or
, San,FranCisco, C~IY, the entity upon behalf of which the persorl\9Q
, > My Comm. Explras Ju14, 2006 acted, executed the instrument.
OPTIONAL
Though the information below IS not req!1ifed by law. it may prove. valuable to persons relying on the document and could prevent
fraudu,lent removal and reattachment of this form to -another document. ,
I',' ,~'
Description of Attached Document (I'
,
Title or Type of'Document: "1:
Document.Date: Number of Pages:
"
,
Signer(s) Other Than Named Above: ';,i
: )~',
( Capacity(ies) Claimed by Signer ?;,
~ji
Signer's Name:' ~'ll
8
.
o Individual Top of lhumb here \
o Corporate ()ffiger- 1itle(s): (>
o Partner ~ 0 Limited 0 General : ~
o Attorney,in,Fact
o Trustee ,
o Guardian orCons8rvator '~
'):
d Other" ' ,~)
, >,
"
Signer Is Representing: :~.
,
,
,
v "":, <,':..;' :,p :(',:';:.:{'" '('~ '< ;",~;", ( ,(;' " ~. ,; ,~ ":' :':<"::.>; ,.' .c ~)'."--_ ;i'~,-<~' ;<::.1:;(':.(,"::_>,:,.'
11::11999 Natlooal Notary Associatioo" 9350 De SQlo Ave PO' Box 2402" Chalsworlh, CA 91313.2402" www,nalionalrlQlaryorg Prod. No, 5907 Reor(jer: CaU TolI.F,ee'1-8OQ.876-6827
, ' , 005~85 .
. " .
EXHIBIT'!A:"
LegafDescripti6n:
AIHhatcertilin real property. situated in the City of Po way, County of San Diego, State of
California, described as follows:
PARCEL I OFPARCEi. MAP NO 18617 IN THE CITY OF POWAY, COUNTY OF SAN
DIEGO, STATE OF CALIFORNIA, RECORDED IN ntEoFFICE OF THE COUNTY
RECORDER"OFSAN.DIEGO COUNTY ON DECEMBER 27; 2000 AS FILE NO 2000-
0708415 OF OFFICIAL RECORDS
I .
.. . 0054.$6
REQUEST FOR RECONVEYANCE
TO' Chicago :ritle Company, Trustee:
Tl1eund~rsigned is the legaLowl1er and holder of all indebtedness secured by the within Deed of
Trust. When all sums secured by said Deed of Trust have been fully paid and sati~fied; and you are
.hereby requestea and directed, on'payment to you of aIlY sums o~ing to you under the terms of said
Deed of Trust, to cancel all evidences of indebtedness, secured ~ysaid Deed of Trust, delivered to you
herewith together with said Deed of Trust, and to recQnvey,wjthout'warrari.ty, to the parties designated
by thetenns of said Deed of Trust, the estate now held by you under the same.
By-
JEFFREY S. GRISSOM
County Officer
,
Mail Reconveyance to:
Department of Housing and Cotnrriunity Development
3989 Ruffih Road
San Diego"CA. 92123"1'890
Attention: Community. Development Division
Date:
12