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Leasehold Deed of Trust with Assignment of Rents and Security Agreement 2010-0500091D 0 C ## 201 0-0500091 11111111 SEP 21, 2010 8:00 AM OFFICIAL RECORDS SAN DIEGO COUNTY RECORDER'S OFFICE DAVID L. BUTLER, COUNTY RECORDER FEES. 0.00 WAYS. 3 DA t PAGES: 20 g3odt4 9 -3 v LEASEHOLD DEED,OF TRUST WITH ASSIGNMENT OF RENTS AND SECURITY AGREEMENT (Brighton Place) THIS DEED OF TRUST WITH ASSIGNMENT OF RENTS AND SECURITY AGREEMENT ( "Deed of Trust ") is made as of September 1, 2010, by and among the Brighton Place, L.P., a California limited partnership ( "Trustor "), Chicago Title Company, a California corporation ("Trustee"), and the Poway Redevelopment Agency, a public body corporate and politic ( "Beneficiary "). FOR GOOD AND VALUABLE CONSIDERATION, 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, for the benefit and'securityof Beneficiary, under and subject to the terms and conditions hereinafter set forth, Trustor's interest [Note: Covers leasehold interest'in the land and fee interest, in the improvements] in an approximately 4 -acre site located_'east of Midland Road between Edgemoor Street and Adrian Street, Assessor's Parcel'Numbers: 314- 220 -69 and 314- 220 -70, within the Paguay Redevelopment Project Area located in' the 'City of Poway, County of San Diego,_State of California', that is described in the attached Exhibit A, incorporated herein by this reference (the "Property" ). 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 therents; 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, hereditaments and appurtenances thereof and thereto; TOGETHER WITH any and all buildings and_improvements 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; TOGETHER WITH all building niat&ialsrand equipment now or hereafter delivered to said property and intended,to be installed therein; 1552\05\642706 5 RECORDED AT THE REQUEST OF CHICAGO TITLE, COMPANY SUBDIVISION DEPT. �(\ RECORDING REQUESTED BY AND WHEN TO:, , Poway Redevelopment Agency 13325 Civic Center Drive n rl Poway, CA 92064 Attn: Executive Director , C� 1( No fee for recording pursuant to1206 Government Code Section 27383 D 0 C ## 201 0-0500091 11111111 SEP 21, 2010 8:00 AM OFFICIAL RECORDS SAN DIEGO COUNTY RECORDER'S OFFICE DAVID L. BUTLER, COUNTY RECORDER FEES. 0.00 WAYS. 3 DA t PAGES: 20 g3odt4 9 -3 v LEASEHOLD DEED,OF TRUST WITH ASSIGNMENT OF RENTS AND SECURITY AGREEMENT (Brighton Place) THIS DEED OF TRUST WITH ASSIGNMENT OF RENTS AND SECURITY AGREEMENT ( "Deed of Trust ") is made as of September 1, 2010, by and among the Brighton Place, L.P., a California limited partnership ( "Trustor "), Chicago Title Company, a California corporation ("Trustee"), and the Poway Redevelopment Agency, a public body corporate and politic ( "Beneficiary "). FOR GOOD AND VALUABLE CONSIDERATION, 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, for the benefit and'securityof Beneficiary, under and subject to the terms and conditions hereinafter set forth, Trustor's interest [Note: Covers leasehold interest'in the land and fee interest, in the improvements] in an approximately 4 -acre site located_'east of Midland Road between Edgemoor Street and Adrian Street, Assessor's Parcel'Numbers: 314- 220 -69 and 314- 220 -70, within the Paguay Redevelopment Project Area located in' the 'City of Poway, County of San Diego,_State of California', that is described in the attached Exhibit A, incorporated herein by this reference (the "Property" ). 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 therents; 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, hereditaments and appurtenances thereof and thereto; TOGETHER WITH any and all buildings and_improvements 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; TOGETHER WITH all building niat&ialsrand equipment now or hereafter delivered to said property and intended,to be installed therein; 1552\05\642706 5 12068 TOGETHER WITH all right, title and interest of Trustor; now owned or hereafter acquired, in and to anydand.lying within the right -of -way of anystreet; open or proposed, adjoining the Property, and any and all sidewalks, alleys and strips and areas of land adjacent to or used in connection with the Property: 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 deposits made with or other security given by Trustor to 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 Trustor now has or may hereafter acquire, any and all awards made for the taking by eminent domain or by any proceeding or purchase in lieu thereof of the whole or any part of such property, including without limitation, any awards resulting from a change of grade of streets and awards for severance damages to the extent Beneficiary has an interest in such awards for taking as provided in Paragraph 4.1 herein; TOGETHER WITH all of Trustor's interest in all articles of personal property or fixtures now or hereafter attached to or used in and about the building.or buildings now erected or hereafter to be erected on the Property which are necessary to the,complete and comfortable use and occupancy of such building or buildings for the purposes for which they were or are to be erected, including all other goods,and chattels and personal property as are ever used or furnished in.operating a building, or the activities conducted therein, similar to the one herein described and referred to, and all.renewals or replacements thereof or articles in substitution therefor, whether or not the same are, or shall be attached to said building or buildings in any manner; and TOGETHER WITH all ofTrustor's interest in all building materials, fixtures, equipment, work in process and other personal property to be incorporated info the Property; all goods, materials, supplies, fixtures, equipment, machinery, furniture and.furnishings, signs and other personal property now or hereafter appropriated for use on the Property, whether stored on the Property or elsewhere, and used or to be used in connection with the Property; all rents, issues and profits, and all inventory, accounts, accounts receivable, contract rights, general intangibles, chattel paper, instruments, documents; notes drafts, letters of credit, insurance policies, insurance and condemnation awards and proceeds, trade names, trademarks and service marks arising from or related to the Property and any business conducted thereon by Trustor, all replacements, additions, accessions and proceeds; and all books, records and files relating to any of the foregoing. All of the foregoing, together with the Property, is herein referred to as the "Security." To have and to hold together with acquittances to the Trustee, its successors and assigns forever. FOR THE PURPOSE OF SECURING: (a) Payment of just indebtedness of Trustor to Beneficiary as set forth in the Note (defined in Article I below) until paid or cancelled. Said principal and other payments shall be due and payable as provided in the Note. Said Note and all its terms are incorporated herein by 1552`0i�64 ?706 5 12069 reference, and this conveyance shall secure any and all extensions thereof, however evidenced; and (b) Payment of any sums advanced by Beneficiary to protect the Security pursuant to the terms and provisions of this Deed of Trust following a breach ofTrustor's obligation to advance said sums and the expiration of any applicable cure period, with interest thereon as provided herein: and (c) Performance of every obligation, covenant or agreement of Trustor contained herein and in the Disposition Documents (defined in Section 1.2 below). AND TO PROTECT THE SECURITY OF THIS DEED OF TRUST, TRUSTOR COVENANTS AND AGREES: ARTICLE I DEFINITIONS 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: Section 1.1 The term "Disposition Agreement" means that certain Land Disposition and Loan Agreement between.Trustorand Beneficiary, dated as of.March 3, 2009, as amended by a First Amendment to Land Disposition, Development and Loan Agreement dated as of March 17, 2010, providing, for the Beneficiary to loan to the Trustor Five Million Three Hundred Eighty -One Thousand Dollars ($9,38'1,000) for the Development of the Property. Section 1.2 The term "Disposition Documents" means this Deed of Trust, the Agency Note, the Disposition Agreement, the Regulatory Agreement,,the Ground Lease, the Notice of Affordability Restrictions, and any other debt, loan or security instruments between Trustor and the Beneficiary relating to the Property. Section 1.3 The term "Note" means the promissory note in the principal amount not to exceed Five Million Three Hundred Eighty -One Thousand Dollars ($5.381,000) dated of even date herewith executed by.the Trustor in favor of the Beneficiary, the payment of which is secured by this Deed of Trust. (The Note is on file with the Beneficiary and terms and provisions ofthe Note are incorporated herein by reference.). Section 1.4 The term "Notice of Affordability Restrictions" means the Notice of Affordability Restrictions on Transfer of Property by and between the Beneficiary and the Trustor, dated and recorded in the official Records of San Diego County concurrently herewith. Section 1.5 The term "Principal" means the amount required to be paid under the Note. Section 1.6 The term "Regulatory Agreement" means the regulatory agreement by and between the Beneficiary and the Trustor, dated and recorded in the official Records of San Diego County concurrently herewith. li 5205 5 12070 ARTICLE 2 MAINTENANCE AND MODIFICATION OF THE PROPERTY AND SECURITY Section 2.1 Maintenance and Modification of the Property by Trustor (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. The Trustor will from time to time make or cause to be made all repairs, replacements and renewals deemed proper and necessary by it. The Beneficiary shall have no responsibility in any of these matters or for the making of improvements or additions to the Security. (b) Trustor agrees to pay fully and discharge (or cause to be paid fully and discharged) all claims for labor done, and for material and services furnished in connection with the Security, diligently to file or procure the filing of a valid notice of cessation upon the event of a cessation of labor on the work or construction on the Security for a continuous period of thirty (30) days or more, and to take all other reasonable steps to forestall the assertion of claims of lien against the Security of any part thereof. Trustor irrevocably appoints, designates and authorizes Beneficiary as its agent (said agency being coupled with an interest) with the authority, but without any obligation, to file for record any notices of completion or cessation of labor or any other notice that Beneficiary deems necessary or desirable to protect its interest in and to the Security or the Loan Documents; provided, however, that Beneficiary shall exercise its.rights as agent of Trustor only in the event that Trustor shall fail to take, or fail to diligently continue to take, those actions as hereinbefore provided. (c) Upon demand by Beneficiary, Trustor shall make or cause to be made such demands or claims as Beneficiary shall specify upon laborers, materialmen, subcontractors or other persons who have furnished or claim to have furnished labor, services or materials in connection with the Security. Nothing herein contained shall require Trustor to pay any claims for labor, materials or services which Trustor in good faith disputes and is diligently contesting provided that Trustor, upon written request of the Beneficiary, shall, within thirty (30) days after the filing of any claim of lien, record in the Office of the Recorder of San Diego County, a'surety bond in an amount one and one -half (I'/2) times the amount of such claim item to protectagainst a claim of lien. Section 2.2 Granting of Easements Trustor 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, cable, telephone and telegraph, or those required by law and as approved, in writing, by Beneficiary. Section 2.3 Assignment of Rents As part of the consideration for the.indebtedness evidenced by the Note, Trustor hereby absolutely and unconditionally assigns and transfers to Beneficiary all the rents and revenues of the Property including those now due, past due, or to become due by virtue of any lease or other agreement for the occupancy or use of all or any part of the Property,, regardless of to whom the rents and revenues of the Property are payable. Trustor hereby authorizes Beneficiary or Beneficiary's agents to collect the aforesaid rents and 1552\05'642706 5 12071 revenues'and hereby directseach tenant of the Property to pay such rents to Beneficiary or Beneficiary's agents; provided, however, that prior to written notice given by Beneficiary to Trustor of the breach by Truster of any covenant or agreement of Trustor in the Loan Documents, Trustor shall collect and receive all rents and revenues of the Property as trustee for the benefit of Beneficiary and Trustor to apply the rents and revenues so collected to the sums secured by this Deed of Trust with the balance, so long as no such breach has occurred, to the account of Trustor, it being intended by Trustor and Beneficiary that this assignment of rents constitutes an absolute assignmenvand not an assignment for additional security only. Upon delivery of written notice by Beneficiary to Trustor of the breach by Trustor of any covenant or agreement of Trustor in - the Loan Documents, and without the necessity of Beneficiary entering upon and taking and maintaining full control of the Property in person, by agent or by a court - appointed receiver, Beneficiary shall immediately be entitled to possession of all rents and revenues of the Property as specified in this Section 2.3 as the same becomes due and payable, including but not limited to rents then due and unpaid, and all such rents shall immediately upon delivery of such notice be held by Trustor as trustee for the benefit of Beneficiary only: provided, however, that the written notice by Beneficiary to Trustor of the breach by Trustor shall contain a statement thaVBeneficiary exercises its rights to such rents. Trustor agrees that commencing upon delivery of such written notice ofTrustor's breach by Beneficiary to Trustor, each tenant of the Property shall, make such rents payable to and pay such rents to Beneficiary or Beneficiary's agents on Beneficiary's, written demand to each tenant therefor, delivered to each tenant personally, by mail or by delivering such demand to each rental unit, without any liability on the part of said tenant to inquire further as to the existence of a default by Trustor. (a) Except as previously approved by the Beneficiary as set forth in the Disposition Documents, Trustor hereby covenants that Trustor has not executed any prior assignment of said rents, that Trustor has not performed, and will not perform, any acts or has not executed and will not execute, any instrument which would prevent Beneficiary from exercising its rights under this Section 2.3, and that at the time of execution of this Deed of Trust, there has been no anticipation' or prepayment of any of the rents of the Property for more than two (2) months prior to the due dates of such rents. Trustor covenants that Trustor will not hereafter collect, or accept payment of any rents of the Property more than two (2) months prior to the due dates of such rents. Trustor further covenant that Trustor will execute and deliver to Beneficiary such further assignments of rents and revenues of the Property as Beneficiary may from time to time request. (b) Upon Trustor's.breach of any covenant or agreement of Trustor in the Loan Documents, Beneficiary may, in person, by agent or by a court- appointed receiver, regardless of the adequacy of Beneficiary's security, enter upon and take and maintain full control of the Property in order to perform all acts necessary and appropriate for the operation and maintenance thereof including, but not limited to, the execution, cancellation or modification of leases, the collection of all rents and revenues of the Property, the making of repairs to the Property and the execution or termination of contracts providing for the management or maintenance of the Property, all on such terms as are deemed best to protect the security of this Deed.of Trust. [n the event Beneficiary'elects to seek the appointment of a receiver for the Property upon Trustor's breach of any covenant or agreement of Trustor in this Deed of Trust, Trustor hereby expressly consents to the appointment of such receiver. Beneficiary or the receiver, shall be entitled fo:receive a reasonable fee for so managing the Property. 15s1'051642706 5 12072 (c) All rents and revenues collected subsequentJo delivery of written notice by Beneficiary to Trustor of the breach by Trustor of any covenant or agreement of Trustor in the Loan Documents be applied first to the costs, if any of taking control of and managing the Property and collecting the rents; including, but not limited to, attorney's fees, receiver's fees, premiums on receiver's bonds, costs of repairs to the Property, premiums on insurance policies, taxes, assessments and other charges on the Property, and the costs of discharging any obligation or liability of Trustor as lessor or landlord of the Property and then to the sums secured by this Deed of Trust. Beneficiary or the receiver shall have access to the books and records used in the operation and maintenance of the Property and shall be liable to account only for those rents actually received. Beneficiary shall not be liable to Trustor, anyone claiming under or through Trustor or anyone having an interest'in the Property by reason of anything done or left undone by Beneficiary under this Section 2.3. (d) If the rents of the Property are not sufficient to meet the costs, if any, of taking control of and managing the Property and collecting the rents, any funds expended by Beneficiary for such purposes shall become indebtedness of Trustor to Beneficiary secured by this Deed of Trust pursuant to'Section 3.3 hereof. Unless Beneficiary and Trustor agree in writing to other terms of payment, such amounts shall be payable upon notice from Beneficiary to Trustor requesting payment thereof and shall bear interest from the date of disbursement at the rate stated in Section 3.3. (e) Any entering upon and taking and maintaining of control of the Property by Beneficiary or the receiver and any application of rents as provided herein shall not cure or waive any default hereunder or invalidate any other right or remedy of Beneficiary under applicable law or provided herein. This - assignment of rents of the Property shall terminate at such time as this Deed of Trust ceases to secure indebtedness held by Beneficiary. The rights of the Beneficiary under this Section 2.3 are subject to the rights of any approved Senior Lender. ARTICLE 3 TAXES AND INSURANCE; ADVANCES Section 3.1 Taxes Other Governmental Charges and Utility Charges (a) Trustor shall pay, or cause to be paid, at least fifteen (15) days prior to the date of delinquency, all taxes, assessments, charges and levies imposed by any public authority or utility company which are or may become a lien affecting the Security or any part thereof; provided, however, that Trustor shall not be required to pay and discharge any such tax, assessment, charge or levy long as (i) the legality thereof shall be promptly and actively contested in good faith and by appropriate proceedings, and (ii) Trustor maintains reserves adequate to pay any liabilities contested pursuant to this Section 3.1. With respect to taxes, special assessments or other similar governmental charges, Trustor shall pay such amount in full prior to the attachment of any lien therefor on any part of the Security; provided, however, if such taxes,, assessments or charges may be paid in installments, Trustor may pay in such installments. Except as provided in clause (ii) of the first sentence of this paragraph, the provisions of this Section 3. f(a) shall not be construed to require that Trustor maintain a reserve account, escrow account, impound account or other similar account for the payment of future taxes, assessments, charges and levies. 1552'05642706 5 12073 (b) In the event that Trustor 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 seven (7) business days after receipt of such.notice. Any amount so:advanced, therefor by Beneficiary, together with interest thereon from the date of such advance atthe maximum rate permitted by law, shall become an,additional obligation of Trustor to the Beneficiary and shall be secured hereby, and Trustor-agrees to pay all such amounts. Section 3.2 Provisions Respecting Insurance (a) Trustor agrees to provide insurance conforming in all respects to that required under the Loan Documents during the course of construction and following completion, and at 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. (b) All such insurance policies and coverages shall be maintained at Truster's sole cost and expense. Certificates,of insurance for all of the above'insurance policies, showing the same to be in full force and effect, shall be delivered to the Beneficiary upon demand therefor at any time prior to the- Beneficiary,s receipt of the entire Principal and all amounts secured by this Deed of Trust. Section 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 Documents, the Beneficiary, after at least seven (7) days prior notice to Beneficiary, may (but shall be under no obligation to) take out the required policiesof insurance and pay the premiums on the same or,maymake,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 interest as set forth below) 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 lesser of ten percent (10%) per annum or the maximum rate permitted by law. ARTICLE 4 DAMAGE', DESTRUCTION OR CONDEMNATION Section 4.1 Awards and Damages All judgments, awards of damages, settlements and compensation made in connection with or in lieu of (i) taking of all or any part of or any interest in the Property by or under assertion of the power of eminent domain, (ii) any damage to or destruction of the Property or in any part thereof by insured casualty, and (iii) any other injury or damage to all or any part of the Property ( "Funds ") are hereby assigned to and shall be paid to the Beneficiary by a made payable to the Beneficiary. The Beneficiary is authorized and empowered (but not required) to collect and receive any funds and shall release all or any part of the amounts•so'collected and recovered to Trustor upon such conditions as the Beneficiary may impose for its disposition, and Beneficiary agrees to release Funds to Trustor to.rebuild the Project ;on, the Property provided, Trustor demonstrates to Beneficiary that such rebuilding is 1 552 \09642706.5 12074 economically'feasible. The Beneficiary shall be entitled to settle and adjust all claims under insurance policies provided under this Deed of Trust and may deduct and retain from the proceeds of such insurance the amount of all expenses incurred by it in connection with any such settlement or adjustment. Application of all or any part of the Funds collected and received by the Beneficiary or the release thereof shall not cure or waive any default under this Deed of Trust. The rights of the Beneficiary under this Section 4.1 are subject to the rights of any senior mortgage lender. ARTICLE 5 AGREEMENTS AFFECTING THE PROPERTY; FURTHER ASSURANCES; PAYMENT OF PRINCIPAL AND INTEREST Section 5.1 Other Agreements Affecting Property The Trustor shall duly and punctually perform all terms, covenants, conditions and agreements binding upon it under the Loan Documents and any other agreement of any nature whatsoever now or hereafter involving or affecting the Security or any part thereof. Section 5? 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 incurred 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 incurred at the lesser often percent (10 %) per annum or the maximum rate permitted by law. Section 5.3 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. Section 5.4 Personal Property 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 fixtures filing under the California Uniform 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 Uniform Commercial Code. Section 5.5 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 which 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 their terms. The Beneficiary is authorized to file a copy of any such financing statement in anvjurisdiction(s) as it shall deem appropriate from time to time in order to protect the security interest established pursuant to this instrument. 1552\05 \64'_70b,5 12075 Section 5.6 Operatiomofthe Securitv The Trustor shall operate the Security (and, in case',of a', transfer of a portion of the Security subject to this Deed of Trust, the transferee shall operate such portion of the Security) in full compliance with the Loan Documents. Section 5.7 Inspection of the Security At any and all reasonable times upon forty - eight (48) hours notice, the Beneciary and its duly authorized agents, attorneys, experts, engineers, accountants and representatives, shall have the right, without payment of charges or fees, to inspect the Security. Section 5.8 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, age, sex, sexual orientation, marital status, national origin, ancestry or source of income 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. ARTICLE 6 HAZARDOUS WASTE Section 6.1 Hazardous Waste (a) Trustor shall keep and maintain the Property in compliance with, and shall not cause or permit the Property to be in violation of any federal state or local laws, ordinances or regulations relating to industrial'hygiene or to the environmental conditions on, under or about the Property including, but not limited to, soil and ground water conditions. Trustor shall not use, generate, manufacture, store or dispose of on, under, or about the Property or transport to or from the Property any flammable explosives, radioactive materials, hazardous wastes, toxic substances or related materials, including without limitation, any substances defined as or included in the definition of "hazardous substances," "hazardous wastes," "hazardous materials," or "toxic substances" under any. applicable federal or state laws or regulations (collectively referred to hereinafter as "Hazardous Materials ") except such of the foregoing as may be customarily kept and used in and about multifamily residential property. (b) Trustor shall immediately advise Beneficiary in writing if at any time it receives written notice of (i) any and all enforcement, cleanup, removal or other governmental or regulatory actions instituted, completed or threatened against Trustor or the Property pursuant to any applicable federal state or local laws, ordinances, or regulations relating to any Hazardous Materials, ( "Hazardous Materials Law "); (ii) all claims made or threatened by any third party against Trustor or the Property relating to damage, contribution, cost recovery compensation, loss or injury resulting from Hazardous Materials (the matters set forth in clauses (i) and (ii) above hereinafter referred to a "Hazardous Materials Claims "); and (iii) Trustor's discovery of any occurrence or condition on any real property adjoining or in the vicinity of the Property that could cause the.Property or any part thereof to be classified as "border -zone property" under the provision of California Health and Safety Code Section 25220 et seq., or any regulation adopted 15 52' 05 5 12076 in accordance therewith; or to be otherwise subject to any restrictions on the ownership, occupancy, transferability or use of the Property under any Hazardous Materials Law. (c) Beneficiary shall have the right tojoin_ and participate in, as a party if it so elects, any legal proceedings or actions initiated in connection with any Hazardous Materials Claims and to have its reasonable'attorneys' fees in connection therewith paid by Trustor. Truster shall indemnify and hold harmless Beneficiary and its boardmembers, supervisors, directors, officers, employees, agents, successors and assigns from and against any loss, damage, cost. expense or liability' directly or indirectly arising out of or attributable to the use, generation, storage, release, threatened release, discharge, disposal, or presence of Hazardous Materials on, under, or about the Property including without limitation: (i) all foreseeable consequential damages; (ii) the costs of any required or necessary repair, cleanup or detoxification of the Property and the preparation and implementation of any closure, remedial or other required plans; and (iii) all reasonable costs and expenses incurred by Beneficiary in connection with clauses (ii) and (iii),, including but not limited to reasonable attorney's fees. (d) Without Beneficiary's prior written consent, which shall not be unreasonably withheld, Truster shall not take any remedial action in response to,the presence of any Hazardous Materials,on, under, or about the Property, nor enter into any settlement agreement, consent decree, or other compromise in respect to any Hazardous Material Claims, which remedial action, settlement;.consent decree or compromise_ might, in Beneficiary's reasonable judgment, impair the value of the Beneficiary's security hereunder; provided, however, that Beneficiary's prior consent shall not be necessary in the event that the presence of Hazardous Materials on, under, or about the Property either poses an immediate threat to the health, safety or welfare of any individual or is of such a nature that an immediate remedial response is necessary and it is not reasonably possible to obtain. Beneficiary's consent before taking such action, provided that in such event Trustor shall notify Beneficiary as soon as practicable of any action so taken. Beneficiary agrees not to withhold its consent, where such consent is required hereunder, if either (i) a particular remedial action is ordered by a court of competent jurisdiction, (ii) Truster will or may be subjected to civil or criminal sanctions or penalties if it fails to take a required action; (iii) Trustor establishes to the reasonable satisfaction of Beneficiary that there is no reasonable alternative to such remedial action which would result in less impairment of Beneficiary's security hereunder; or (iv) the action has been agreed to by Beneficiary. (e) The Trustor hereby acknowledges and agrees that (i) this Article is intended as the Beneficiary's written request for information (and the Trustor's response) concerning the environmental condition of the Property as required by California Code of Civil Procedure Section 726.5, and (ii) each representation and warranty in this Deed of Trust or any of the other Loan Documents (together with any indemnity applicable to a breach of any such representation and warranty) With respect to the environmental condition of the property is intended by the Beneficiary and the Truster to be an "environmental provision" for purposes of California Code of Civil Procedure Section 736. (0 In the event that any portion of the Property is determined to be ,. environmentally impaired" (as that term is defined in California Code of Civil Procedure Section 726.5(e)(3)) or to be an "affected parcel" (as that term is defined in California Code of Civil Procedure Section 726.5(e)(1)), then, without otherwise limiting or in any way affecting the 10 I s52�05�6d27o6 5 12077 Beneficiary's or the Trustee's, rights and remedies under this Deed of Trust, the Beneficiary may elect'to exercise its rights undr California Code of Civil Procedure Section 726.5(a) to (1) waive its lien on such environmentally impaired or affected portion 'of the Property, and (2) exercise (a) the rights and remedies of an unsecured creditor, including reduction of its claim against the Trustor to judgment, and (b) any other rights and remedies permitted by law. For purposes of determining the Beneficiary's right to proceed as an unsecured creditor under California Code of Civil Procedure Section 726.5(a), the Trustor shall be deemed to have willfully permitted or acquiesced in a release or threatened release of hazardous materials, within the meaning of California Code of Civil Procedure Section 726.5(d)( I ), if the release or threatened release of hazardous materials was knowingly or negligently caused or contributed to by any lessee, occupant, or user of any portion of the Property and the Trustor knew or should have known of the activity by such lessee, occupant, or user which caused or contributed to the release or threatened release. All costs and expenses, including (but not limited to) attorneys fees, incurred by the Beneficiary in connection with any action commenced under this paragraph, including any action required by California Code of Civil Procedure Section 726.5(b) to determine the degree to which the Property is environmentally impaired, plus interest thereon at the rate specified in the Note,until paid, shall be added to the indebtedness secured by this Deed of Trust and shall be due and payable to the Beneficiary upon its demand made at any time following the conclusion of such action. The Trustor is aware that California Civil Code Section 2955.5(a) provides as follows: "No lender shall require a borrower, as a condition of receiving or maintaining a loan secured by real property, to provide hazard insurance coverage against risks to the improvements on that real property in an amount exceeding the replacement value of the improvements on the property." ARTICLE 7 EVENTS OF DEFAULT AND REMEDIES Section 7.1 Events of Default The following shall constitute Events of Default following the expiration of any applicable notice and cure periods:' .(i) failure to make any payment to be paid by Trustor under the Loan Documents; (ii) failure to observe or perform any ofTrustor's other covenants, agreements or obligations under the Loan Documents, including, without limitation, the provisions concerning discrimination; or (iii),failure to make any payment or perform any ofTrustor's other covenants, agreements, or obligations under any other debt instruments or regulatory agreement secured by the Property, which default shall not be cured within the times and in the manner provided therein. Section 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 and the unpaid Principal of the Note shall immediately become due and payable, upon written notice by the Beneficiary to the Trustor (or automatically where so specified in the Loan Documents), 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. Section 7.3 The Beneficiary's Rieht 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 1552\05 \642706 5 12078 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 deems necessary or desirable to preserve the value or marketability of the Property, or part thereof or interest therein, increase the income therefrom or protect the security thereof. The entering upon and taking possession of the Security shall not cure or waive any Event of Default or Notice of Default (as defined below) hereunder or invalidate any act done in response to such Default or pursuant to such Notice of Default and, notwithstanding the continuance,m 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 ( "Notice of Default and Election io Sell "), which notice Trustee or Beneficiary shall cause to be dulv filed for record in the Official Records of San Diego 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 orsecuring all or any portion of the obligations secured hereby, or provided by law. Section 7.4 Foreclosure By Power of Sale (a) Should the Beneficiary elect to foreclose by exercise of the power of sale herein contained, the Benefciary shall give notice to the Trustee (the "Notice of Default and Election to Sell ") and shall deposit with Trustee this Deed of Trust which is secured hereby (and the deposit of which shall be deemed to constitute evidence that the unpaid principal amount of the Note is immediatelydue and payable), and such receipts and evidence of any expenditures made that are additionally secured hereby as Trustee may require. (b) Upon receipt of such notice from the Beneficiary, Trustee shall cause to be recorded, published and delivered to Trustor 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 Election to Sell having been given as required by law, sell the'Security, at the time and place of sale fixed by it in said Notice of Default and Election to Sell, 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 by the Trustor 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 truth fulness'thereof. Any person, including, without limitation, Trustor, Trustee or Beneficiary, 12 1 55r05�e4270e 12079 may purchase at such sale, and Trustor hereby covenants.to warrant and defend the title of such purchaser or purchasers. (c) 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: (i) the unpaid Principal amount of the Note; (ii) all other amounts owed to Beneficiary under the Loan Documents; (iii) all other sums then secured hereby; and (iv) the remainder, if any, to Trustor. (d) Trustee.niay postpone sale of all or any portion of the Property 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. Section 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 Truster therein, shall have the right to apply to any court having jurisdiction to appoint a receiver or receivers of the Security (or apart Thereof), and Trustor 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. Section 7.6 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. Section 7.7 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. Beneficiary's expressed or implied consent to a breach by Trustor, or. a waiver of any obligation of Trustor hereunder'shal I not be deemed or construed to be a consent to any subsequent breach, or further waiver, of, such obligation or of any other 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 Benetciary of its right hereunder or impair any rights, power or remedies consequent on any Event of Default by the Trustor. (b) If the Beneficiary (i) grants forbearance or an extension of time for the payment of any sums °secured hereby, (ii) takes other or additional security or the payment of any 13 15521051642706 5 12080 sums secured hereby, (iii) waives or does not exercise any right granted in the Loan Documents, (iv) 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 Documents, (v) consents to the granting of any easement or other right affecting the Security, or (iv) makes or consents to any agreement subordinating the lien hereof, any such act or omission shall not release, discharge, modify, change or affect the original liability under this Deed of Trust, or any other obligation of the Truster 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. Section 7.8 Suits.to Protect the Security The Beneficiary shall have power to (i) institute and maintain such suits and proceedings as it may 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, (ii) preserve or protect its interest (as described in this Deed of Trust) in the Security, and (iii) 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. Section 7.9 Trustee May File Proofs of Claim In the case of any receivership, insolvency, bankruptcy, reorganization, arrangement, adjustment, composition or other proceedings affecting the Truster, its creditors or its property, the Trustee, to the extent permitted by law, shall be entitled to file such proofs of claim and other documents as may be necessary or advisable 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 Truster hereunder after such date. Section 7.10 Waiver The Trustor waives presentment, demand for payment, notice of dishonor, notice of protest and nonpayment, protest, notice of interest on interest and late charges, and diligence in taking any action to collect any sums owing under the Note or in proceedings against the Security, in connection with the delivery, acceptance, performance, default, endorsement or guaranty of this Deed of Trust. Section 7.11 Rider If an Event of Default shall have occurred, whenever the Agency delivers any notice or demand to the Trustor, the Agency shall at the same time deliver to the Approved Lenders and the investor, a copy of such notice or demand. The Investor shall (insofar as the.rights of the Agency are concerned) have the right, but not the obligation, at its option to cure such default as follows: (a) with respect to monetary defaults, within ten (10) days after the receipt of said notice of such monetary default; and (b) with respect to any nonmonetary default under the Loan Documents, within thirty (30) days after the receipt of such notice of such nonmonetary default to cure such default. Beneficiary agrees'that the Loan Documents will not be considered to be in default until the expiration of all contractual notice and cure periods provided to Trustor and Investor. 14 155210s642706 s 12081 ARTICLE 8 MISCELLANEOUS Section 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. Section 8.2 Reconveyance by Trustee Upon written request of Beneficiary stating that all sums secured hereby have been paid or forgiven, and upon surrender of this Deed of Trust to Trustee for cancellation and retention, and upon payment by Trustor of Trustee's reasonable fees, Trustee shall reconvey the Security to Trustor, or to the person or persons legally entitled thereto. Section 8.3 Notices 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 (i) if intended for Beneficiary shall be addressed to: Poway Redevelopment Agency 13325 Civic Center Drive Poway, CA 92064 Attn: City Manager (ii) if intended for Trustor shall be addressed to: Brighton Place, L.P. 7956 Lester Avenue Lemon Grove, CA 91945 Attn: Executive Director With copy to: WFCIH Investment Fund I LLC NEF, Inc. 120 S. Riverside Plaza, 15 ° i Floor Chicago, IL 60606 Attn: Investor Relations Any notice, demander 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 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 manner provided herein, at least ten (10) days prior to the date such change is desired to be effective. Section 8.4 Successors and Joint Trustors Where an obligation is created herein binding upon Trustor, the obligation shall also apply to and bind any transferee or successors in interest. Where the terms of the Deed of Trust have the effect of creating an obligation of the 15 1352'05!642706 5 12082 Trustor anda transferee, such obligation shall be deemed to be ajoint and several obligation of the Trustor and d. such transferee. Where Trustor is more than one entity or person, all obligations of Trustor shall be deemed to be ajoint and several obligation of each and every entity and person comprising Trustor. Section 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. Section 8.6 Invalidity of Certain Provisions Every provision of this Deed of Trust is intended to be severable. In the event any term 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 isnot secured or partially secured by the lien of this Deed of Trust. Section 8.7 G_overnina Law This Deed of Trust shall be governed by and construed in accordance with the laws of the State of California. Section 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. Section 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. Section 8.10 Actions Trustor agrees to appear in and defend any action or proceeding purporting to affect the Security. Section 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 county or counties in which the Property is situated, shall be conclusive proof of proper appointment of the successor trustee. Section 8.12 Statute of Limitations The pleading of any statute of limitations as a defense to any and all obligations secured by this Deed of Trust is hereby waived to the full extent permissible by law. Section 8.13 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 16 1552\05�642706 5 12083 under this Deed of Trust or of any action of proceeding in which Trustor, Beneficiary, or Trustee shall be a party unless brought by Trustee. IN WITNESS WHEREOF, Truster has executed this Deed of Trust as of the day and year first above written. TRUSTOR: BRIGHTON PLACE, L.P., a California limited partnership By: Brighton Avenue Interfaith Housing Corporation, a California nonprofit corporation, its General Partner Name �- - 17 1 sr_�os\642706 5 12084 State of California ) County of San Diego On iSeptember 10, 20io,before me, Adelle Michaelson, a Notary Public, personally appeared Matthew B. Jumper, 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 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. and official seal. Signature (Affix Seal) ADELLE MICHAELSON COmmIs5lon # 1776279 °_ •• Not PUbllc • Cai,; ornia Son Dlego Co,. , '- W Comm. 12085 (VOTARY SEAL CERTIFICATION (Government Code 27361.7) I CERTIFY UNDER PENALTY OF PERJURY THAT THE NOTARY SEAL ON THE DOCUMENT TO WHICH THIS STATEMENT IS ATTACHED READS AS FOLLOWS: Name of the Notary: Commission Number: � K(AuLgko - Date Commission Expires: County Where Bond is Filed: S%k Manufacturer or Vendor Number: W1 (Located on both sides of the notary seal border) Signature: Name (if applicable) Place of Execution: San Diego Date. ReC. Form #R101 (Rev 6111/03) 12086 EXHIBIT A LEGAL DESCRIPTION The land is situated in the City of Poway, County of San Diego, State of California, and is described as follows: (Note: The Deed of trust covers Trustor's interest in the leasehold and fee interest in the improvements) Brighton Parcel: PARCEL 2 OF PARCEL 14AP NO. 19198, IN THE CITY OF POWAY, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF FILED IN THE OFFICE OF THE SAN DIEGO COUNTY RECORDER, APRIL 1, 2003. City Parcel: PARCEL I OF FARCEL MAP NO. 19196, IN 191E CITY OF POWAY, COUNT %' OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF FILED IN THE OFFICE OF THE SAN DIEGO COUNTY RECORDER, APRIL 1, 2003. 1552�05 \642706 5 A-1