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CC - Item 11A - Acquisition of 8628 Landis View Lane, Rosemead for Affordable Housing Compliance with Federal Home Grant Regulations
ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION & CITY COUNCIL STAFF REPORT TO: THE HONORABLE CHAIRMAN AND COMMISSION MEMBERS THE HONORABLE MAYOR AND CITY COUNCIL FROM: JEFF ALLRED, EXECUTIVE DIRECTOR /CITY MANAGER DATE: MARCH 22, 2011 SUBJECT: ACQUISITION OF 8628 LANDIS VIEW LANE, ROSEMEAD FOR AFFORDABLE HOUSING IN COMPLIANCE WITH FEDERAL HOME GRANT REGULATIONS SUMMARY On April 27, 2010, the City Council entered into an Agreement with Rio Hondo Community Development Corporation (RHCDC) for the production of affordable housing using the 15% Community Housing Development Organization (CHDO) set -aside funding as required under the Home Investment Partnerships (HOME) entitlement grant. Since then, the City has been working with RHCDC to locate a property suitable for affordable housing. Recently, a single - family home located at 8626 Landis View Lane in the City of Rosemead became available for sale with an asking price of $425,000. We were one of several offers made on the property and the owner selected RHCDC's offer of $425,000. In addition to the $425,000, RHCDC would be required to pay approximately $24,840 in related closing costs, development fees, and cosmetic improvements upon acquiring the property. The seller has agreed to a $15,000 credit and the RHCDC has allocated $6,440 that will be applied towards these additional costs leaving a balance of $3,400. Therefore, the total amount needed would be $428,400, pending funding approval of a 0% deferred payment loan by the City Council in the amount of $227,086 from the HOME CHDO Set -Aside Fund and a 0% forgivable loan by the Rosemead Community Development Commission ( "CDC ") of $201,314 from the Low and Moderate Income Housing Fund. The unit would be restricted as a rental property for a low- to moderate - income household and be subject to a 55 -year affordability covenant. The property currently contains a 1,600 square foot, three - bedroom, two bathrooms, single - family residence built in 1959 on a 8,120 square foot, R1 -zoned lot (see Attachment A). Staff Recommendation It is recommended that the following actions are taken for the purchase of the property located at 8628 Landis View Lane, Rosemead: ITEM NO. I I A APPROVED FOR CITY COUNCIL AGENDA: Community Development Commission March 22, 2011 Page 2 of 3 1. The Community Development Commission approve a 0% deferred payment loan in the amount of $201,314 funded by the Redevelopment Low and Moderate Income Housing Fund to the Rio Hondo Community Development Corporation and authorize the Chairman to enter into all related documents including the Loan Agreement, Promissory Note, Deed of Trust, Regulatory Agreement, and Affordable Housing Declaration of Covenants, Conditions and Restrictions (see Attachments B — F). The loan would be forgivable in year 55 if all conditions of the agreements are met; and 2. The City Council approve a 0% deferred payment loan in the amount of $227,086 funded by the HOME CHDO Set -Aside Fund to the Rio Hondo Community Development Corporation and authorize the Mayor to enter into all related documents including the Loan Agreement, Promissory Note, Deed of Trust, Regulatory Agreement, and Affordable Housing Declaration of Covenants, Conditions and Restrictions (see Attachments B — F). The loan would not be due payable until the sale of the home, transfer of ownership or year 55. ANALYSIS One of the goals of the HOME program is to provide affordable housing opportunities. Having said this, the intention behind the purchase of the subject property is to help accomplish this goal. RHCDC provided an independent appraisal indicating the property's value to be $425,000 (see Attachment G). It is proposed that Home CHDO set -aside funds and CDC low and moderate set -aside funds be used to acquire the property. The objectives of the HOME Program are 1) to provide decent affordable housing to low- and moderate - income households, 2) expand the capacity of nonprofit housing providers, and 3) strengthen the ability of state and local governments to provide housing, and 4) leverage private sector participation. Therefore, under HOME regulations, this is an eligible activity. In addition, the HOME Program statute and regulations require a HOME Participating Jurisdiction (PJ) to commit 100 percent of its annual allocation of HOME funds within 24 months of receiving its grant. Within this amount, PJs are also required to reserve a minimum of 15 percent for investment in housing developed, sponsored, or owned by a CHDO. In addition, a PJ has a total of 5 years to expend the funds. Funds that do not meet either of these requirements must be returned to HUD. At this point, the City is in jeopardy of losing approximately $40,104.65 in HOME CHDO funds if not spent by July 31, 2011. Upon acquiring the property, the RHCDC plans on making some cosmetic improvements totaling to approximately $19,770. Once the unit is brought up to building standards, the unit would be rented to a low- to moderate - income household and be subject to a 55 -year affordability covenant. The RHCDC has an adopted tenant Community Development Commission March 22, 2011 Page 3 of 3 selection system in conformity with Section 92.253(d) of the United States Code of Federal Regulations or its successor regulations, which establishes a chronological waiting list system and /or random lottery system for selection of tenants with preference given to current Rosemead residents (see Attachment H). If the purchase is approved, RHCDC will be required to sign a Deed of Trust, Promissory Note, and Covenants, Conditions & Restrictions (CC &R's) defining the terms and conditions of the loan as well as the affordability period. In addition, this property would be added to the CDC's affordable housing stock. PUBLIC NOTICE PROCESS This item has been noticed through the regular agenda notification process. LEGAL REVIEW The attached legal documents (i.e. Loan Agreement, Promissory Note, Deed of Trust, Regulatory Agreement, and Affordable Housing Declaration of Covenants, Conditions and Restrictions) have been reviewed and approved by the Commission's Attorney and the City Attorney. Prepared by: cm �. Michelle G. Ramirez Ili Community Development Manager Attachment A — Pictures Attachment B — Loan Agreement Attachment C — Promissory Note Attachment D — Deed of Trust Attachment E — Regulatory Agreement Attachment F — Affordable Housing Declaration of Covenants, Conditions and Restrictions Attachment G - Appraisal Report Attachment H — Tenant Selection and Affirmative Fair Housing Marketing Plan ATTACHMENT A I Vol' C J N w 00 r ife OD N OD ATTACHMENT B 2011 AFFORDABLE HOUSING DEVELOPMENT LOAN AGREEMENT CITY OF ROSEMEAD, ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION, AND RIO HONDO COMMUNITY DEVELOPMENT CORPORATION THIS 2011 AFFORDABLE HOUSING DEVELOPMENT LOAN AGREEMENT (the "Agreement ") is dated as of March 22, 2011 by and between the Rio Hondo Community Development Corporation, a California non -profit public benefit corporation (the `Borrower "); the City of Rosemead, a public body (the "City"), and the Rosemead Community Development Commission, a public body (the "CDC ") (the City and the CDC also collectively referred to as the "Beneficiaries "), and is made and executed in light of the factors set forth in the following Recitals: - RECITALS - 1. Borrower has requested the City provide a zero percent (0 %) loan, subject to a final balloon payment at the expiration of the fifty -five (55) year term limit, in a total principal amount not to exceed the sum of Two Hundred Twenty-Seven Thousand Eighty-Six Dollars ($227,086.00), and the CDC provide a zero percent (0 %) forgivable loan in a total principal amount not to exceed the sum of Two Hundred One Thousand Three Hundred Fourteen Dollars ($201,314.00), for a total sum of Four Hundred Twenty-Eight Thousand Four Hundred Dollars ($428,400.00), in support of affordable rental housing and affordable single family housing preservation, rehabilitation, development and operations program of the Borrower which will support and implement the affordable housing preservation, rehabilitation and development goals of the City and the CDC. 2. The City and CDC are willing to loan such an amount to Borrower under the terms and conditions specified in this Agreement and in the "Related Loan Documents" as this term is hereinafter defined. 3. Borrower understands and agrees that: (A) in providing the Loan as defined and set forth in this Agreement, the City and CDC are relying upon Borrower's representations, warranties, and agreements as provided below; and, (B) such Loan shall be and remain subject to the terms and conditions of this Agreement. THE BORROWER, THE CITY, AND THE CDC HEREBY AGREE AS FOLLOWS: Section 1. EFFECTIVE DATE AND TERM. This Agreement shall be dated as of March 22, 2011, and shall be effective as of the specific date provided in Section 12(19), below, (the "Effective Date ") and shall continue thereafter until the indebtedness of the Borrower to the City and the CDC has been paid in full, and the parties terminate this Agreement in writing. Section 2. DEFINITIONS. In addition to the words defined elsewhere in this Agreement, the following words shall have the following meanings when used in this Agreement. All references to dollar amounts shall mean amounts in lawful money of the United States of America. • Advance. The word "Advance" refers to the disbursement by the City and the CDC of the proceeds of the Loan to the Borrower. • Agreement. The word "Agreement" means this 2011 Affordable Housing Development Loan Agreement, together with all exhibits and schedules attached to this Agreement from time to time. • Borrower. The word `Borrower" means the Rio Hondo Community Development Corporation, a California non - profit public benefit corporation. • Budget. The word "Budget" means and refers to the Program Budget attached as Exhibit `B" relating to the Advance, which has been prepared by the Borrower and approved by the City and the CDC. • Collateral. The word "Collateral" means and includes without limitation all property and assets granted as collateral security for the Loan, whether real or personal property, whether granted directly or indirectly, whether granted now or in the future, and whether granted in the form of a security interest, mortgage, deed of trust, assignment, pledge, chattel mortgage, chattel trust, factor's lien, equipment trust, conditional sale, trust received, lien, charge, lien or title retention contract, lease or consignment intended as a security device, or any other security or lien interest whatsoever whether created by law, contract, or otherwise. • Collateral Documents. The words "Collateral Documents" mean and refer to each of the following: (i) the Deed of Trust; and (ii) all other documents and instruments securing any of the Indebtedness. • Deed of Trust. The words "Deed of Trust" mean and refer to the Deed of Trust, Assignment of Leases and Rents, Fixture Filing and Security Agreement, date the date of the Promissory Note, by and among the Borrower, as Trustor, United Title Company, as Trustee, and the City and the CDC, as Beneficiaries. • Environmental Conditions. The words "Hazardous Substance," mean (1) any chemical, compound, material, mixture or substance that is now or hereafter defined or listed in, or otherwise classified pursuant to, any Environmental Laws (defined below) as a "hazardous substance," "hazardous material," "hazardous waste," "extremely hazardous waste," "infectious waste," "toxic substance," "toxic pollutant" or any other formulation intended to define, list or classify substances by reason of deleterious properties such as ignitability, corrosivity, reactivity, carcinogenicity, toxicity, reproductive toxicity or "EP toxicity" and (2) any petroleum product, natural gas, natural gas liquids, liquified natural gas and 2 synthetic gas usable for fuel (or mixtures of natural gas such as synthetic gas) which is not stored in a motor vehicle for use in the regular course of operation of such motor vehicle; and the words "Environmental Laws" as used herein mean any and all present and future federal, state and local laws (whether under common law, statute, rule, regulation or otherwise), requirements of permits issued with respect thereto, and other requirements of governmental authorities relating to the environmental regulation of any Hazardous Substance (including, without limitation, the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (42 U.S.C. Sections 9601, et seq.) ( "CERCLA ") and the applicable provisions of the California Health and Safety Code and the California Water Code, all as heretofore or hereafter amended from time to time). • Event of Default. The words "Event of Default" mean and include without limitation any of the Events of Default set forth below in Section 9, titled "Events of Defaults." • HOME Regulatory Agreement. The words "HOME Regulatory Agreement" mean and refer to the HOME Investment Partnership and Redevelopment Low and Moderate Income Housing Funds Regulatory Agreement, dated March 22, 2011 by and between the Borrower and the City of Rosemead. The HOME Regulatory Agreement evidences the covenant of the Borrower to preserve, operate and maintain the Rental Housing Property at affordable rents available to persons and households of very low- and low- income for the period set forth therein. • Improvements. The word "Improvements" means and includes without limitation all existing structures, facilities, fixtures, additions and similar construction on the Rental Housing Property which are owned by the Borrower. • Indebtedness. The word "Indebtedness" means and includes the amounts payable under the Promissory Note described in Section 3 and all amounts disbursed by the City and the CDC in respect of the Loan or otherwise payable to the City and the CDC by the Borrower under the Promissory Note or any of the Related Loan Documents. • Loan. The word "Loan" means the loan to be made to Borrower by the City under this Agreement and the Related Documents as described below in a maximum principal amount not to exceed Two Hundred Twenty-Seven Thousand Eighty-Six Dollars ($227,086.00). The word "Loan" also means the loan to be made to Borrower by the CDC under this Agreement and the Related Documents as described below in a maximum principal amount not to exceed Two Hundred One Thousand Three Hundred Fourteen Dollars ($201,314.00). • Promissory Note. The words "Promissory Note" mean the promissory note, described below in Section 3, in an original principal amount not to exceed Two Hundred Twenty-Seven Thousand Eighty-Six Dollars ($227,086.00) from the City, and Two Hundred One Thousand Three Hundred Fourteen Dollars 3 ($201,314.00) from the CDC, for a sum total amount of Four Hundred Twenty- Eight Thousand Four Hundred Dollars ($428,400.00), together with all renewals of, extensions of, modifications of, refinancings of, consolidations of, and substitutions for the Promissory Note. The form of the Promissory Note is attached as Exhibit "C " . • Rental Housing Property or Property. The words "Rental Housing Property" or "Property" mean and refer to the one (1) improved legal parcel of land which is situated in the City of Rosemead and generally identified as follows: (i) 8628 Landis View Lane, Rosemead, California (there is 1 single family rental dwelling unit situated on this parcel); and together with all accessions, parts, and additions to, all replacements of, and all substitutions for any of such property identified in the preceding subparagraph, and all proceeds (including insurance proceeds and refunds of premiums) from any sale, casualty loss, condemnation or other disposition of such property. A legal description of the Rental Housing Property is attached to this Agreement as Exhibit "A " • Related Loan Documents. The words "Related Loan Documents" mean and include without limitation all instruments, agreements and documents, whether now or hereafter existing, executed by the Borrower and delivered to the City and the CDC in connection with the Loan and the Indebtedness, including, without limitation, this Agreement, the Promissory Note and the Collateral Documents. • Title Company. The words "Title Company" mean and refer to a title insurance company escrow department designated by the City and the CDC which shall serve as the loan escrow accommodation agent of the parties for the exchange and recordation of the various Collateral Documents and Related Loan Documents, and the disbursement of the proceeds of the Loan to the Borrower as set forth in Section 5. Section 3. THE LOAN. (a) The Loan shall be in a principal amount not to exceed the sum of Two Hundred Twenty-Seven Thousand and Eighty-Six Dollars ($227,086.00) provided by the City, and Two Hundred and One Thousand Three Hundred and Fourteen Dollars ($201,314.00) provided by the CDC, for a total sum of Four Hundred Twenty-Eight Thousand Four Hundred Dollars ($428,400.00), or so much thereof as the Beneficiaries may make available to the Borrower as the net proceeds (after certain costs and reserves are established) disbursed by the Beneficiaries, on or before March 22, 2011. The Loan, or so much of the Loan as may be disbursed to the Borrower, shall be evidenced by the Promissory Note in the form attached hereto as Exhibit "C " . The Loan shall have a term of fifty -five (55) years from the date of the initial Advance. The Loan shall be evidenced by the Promissory Note. The date of the Promissory Note shall be the date on which the CDC makes the Advance of proceeds under the 4 Loan to the Borrower as provided in Section 5. The CDC Loan amounts shall be forgivable if a Default does not occur prior to the 55 -year term limit as described in the Promissory Note. The City Loan amounts shall be payable in full at the end of the 55 -year term limit as described in the Promissory Note. If a Default occurs prior to the end 55 -year term limit, the City and CDC shall have the right full payment of all Loan amounts. The Promissory Note shall be secured by the Deed of Trust, pursuant to which the Borrower grants to the CDC a first lien position in the Rental Housing Property. (b) The Loan shall be payable as set forth in the Promissory Note. (c) The Borrower shall use the proceeds of the Loan solely for the purposes set forth below: The Loan shall be used and applied by the Borrower to acquire 8628 Landis View Lane, Rosemead, California for development, improvement, operation and/or resale to qualified very low -and low- income purchasers or renters, as applicable, of the Affordable Housing Units. Section 4. GENERAL REPRESENTATIONS AND WARRANTIES. Borrower represents and wan to the City and the CDC, as of the date of this Agreement and the date of the Promissory Note and at all times that any balance of the Loan is outstanding: (1) Borrower is and shall maintain during the period of time when any principal balance of the Loan may remain outstanding its status as a California non - profit public benefit corporation, duly organized and existing and authorized to transact business in California and the Borrower has previously qualified as a 501(c)(3) tax exempt entity under applicable federal tax laws; (2) Borrower is a "Community Housing Development Organization" ( "CHDO "), as this term is defined at 24 CFR Part 92.2, and the Borrower shall continuously maintain its status as a CHDO during the term of time when any principal balance of the Loan may remain outstanding; (3) the corporate charter and by -laws of the Borrower authorize the Borrower to enter into this Agreement and to undertake the affordable housing preservation, operation and development activities contemplated hereunder, and the governing board and membership of the Borrower has previously taken all action necessary to authorize the execution of this Agreement by the Borrower; (4) the Borrower is qualified to undertake and complete the affordable housing preservation, operation and development activities contemplated under this Agreement; (5) each financial statement of Borrower supplied to the City and the CDC truly and completely disclosed Borrower's financial condition as of the date of the statement, and there has been no material adverse change in Borrower's financial condition subsequent to the date of the most recent financial statement supplied to the City and the CDC. Borrower has no material contingent obligations except as disclosed in such financial statements; (6) the Borrower has conducted a due and diligent inquiry and investigation of the environmental condition of the Rental Housing Property relating to the potential presence of Hazardous Substances and the use thereon of Hazardous Substances and based upon such inquiry, the Borrower represents to the City and the CDC that as of the date of the Promissory Note, the Borrower is unaware of any adverse environmental conditions relating to the presence or potential presence of Hazardous Substances; (7) no litigation, claim, investigation, administrative proceeding or similar action (including those for unpaid taxes) against Borrower is pending or threatened and no other event has occurred which may materially adversely affect Borrower's financial condition, or the Rental Housing Property, other than litigation, claims, or other events, if any, that have been disclosed to and acknowledged by the City and the CDC in writing; (8) Borrower has on the date of the Promissory Note and the Advance good and marketable title to the Rental Housing Property free and clear of all defects, liens, and encumbrances, excepting only liens for taxes, assessment, or governmental charges or levies not yet delinquent or payable without penalty or interest and such liens and encumbrances as may be approved in writing by the City and the CDC prior to the date of the Promissory Note and the Advance; (9) no tenant in lawful possession of the Rental Housing Property shall be in arrears in its rental obligation to the Borrower unless Borrower has initiated reasonable measures acceptable to the City and the CDC to correct such arrearage in rent, and each rental agreement is in full force and effect without any other default by the renter unless Borrower has initiated reasonable measures to obtain the cure of any such other default; (10) the information set forth in the Budget generally describes the proposed housing improvements and activities to be undertaken by the Borrower. The Borrower shall not materially alter or modify the programs set forth in the Budget without consent of the City and the CDC; (11) Borrower understands and agrees that the City and the CDC are each relying upon the above representations and warranties in extending the Loan and making the Advance to Borrower. Borrower further agrees that the foregoing representations and warranties shall be continuing in nature 3 and shall remain in full force and effect until such time as the Loan and Promissory Note shall be paid in full, or until the Agreement is terminated, whichever is the last to occur. Section 5. CONDITIONS PRECEDENT TO TBE LOAN AND DISBURSEMENT OF THE ADVANCE. (a) The proceeds of the Loan shall be disbursed to the Borrower in a single Advance. The aggregate amount of the Advance under Section 5(b) shall not exceed the sum of Two Hundred Twenty-Seven Thousand Eighty-Six Dollars ($227,086.00) from the City, and the sum of Two Hundred One Thousand Three Hundred Fourteen Dollars ($201,314.00) from the CDC, for a total sum of Four Hundred Twenty-Eight Thousand Four Hundred Dollars ($428,400.00). The Advance shall occur by a date no later than June 1, 2011. The obligation of the CDC to make the Loan and provide the Advance under Section 5(b) shall be subject to the fulfillment and satisfaction by the Borrower of all of the conditions set forth in this Agreement and the following: (1) Borrower shall have provided to the City and the CDC an ALTA Extended Coverage Lender's Policy with such endorsements as the City and the CDC may require, issued by a title insurance company acceptable to the City and the CDC and in a form, amount, and content satisfactory to the Executive Director of the CDC insuring or agreeing to insure that the City's and the CDC's Deed of Trust on the Rental Housing Property is, or will be upon its recordation be, a valid first priority lien on the Rental Housing Property free and clear of all defects, liens, encumbrances, and exceptions except as to those security lien obligations approved by the Executive Director in writing; (2) Unless waived by the City and the CDC in writing, Borrower shall have delivered to the City and the CDC the insurance policies or evidence thereof as described in the Deed of Trust; (3) There shall not exist on the date of the Promissory Note and the Advance a condition which would constitute an Event of Default under this Agreement; (4) Each of the representations and warranties of the Borrower set forth in Section 4 shall be true and correct. (5) Prior to or currently with the Advance the Borrower shall have executed the Promissory Note and all of the Related Loan Documents; (6) Prior to or currently with the Advance the Borrower shall have delivered to the City and the CDC an approving legal opinion of its legal counsel in a form reasonably acceptable to the City and the CDC stating that the Borrower has taken all necessary action to approve the Loan and transaction contemplated under this Agreement, that the Loan, the Agreement and each of the Related Loan Documents, are properly 7 executed by the Borrower and each evidences a valid, lawful and binding obligation of the Borrower, and such other matters as required by the City and the CDC; and (7) At least ten (10) days prior to the Advance, the Borrower shall have submitted to the City and the CDC its appropriately detailed Budget for the use of the proceeds of the Advance, and the Executive Director shall have approved such Budget for the Advance, and such approval of the Executive Director shall not be unreasonably conditioned, withheld or delayed. (8) (b) Provided that all of the conditions for the Advance have been satisfied, the City shall disburse the sum of $227,086.00, and the CDC shall disburse the sum of $201,314.00, or such lesser sum as the Borrower may request, on or before June 1, 2011. Section 6. AFFIRMATIVE COVENANTS. Borrower covenants and agrees with the City and the CDC that, while this Agreement is in effect, Borrower will: (1) promptly inform the City and the CDC in writing of (A) all material adverse changes in Borrower's financial condition, and (B) all existing and threatened litigation, claims, investigations, administrative proceedings or similar actions affecting Borrower which could materially affect the financial condition of Borrower; (2) maintain its books and records in accordance with generally accepted accounting principles, applied on a consistent basis and permit the City and the CDC to examine and audit Borrower's books and records at all reasonable times; (3) furnish such additional information and statements, list of assets and liabilities, agings of receivables and payables, inventory schedules, budgets, forecasts, tax returns, and other reports with respect to Borrower's financial condition and business operations which the City and the CDC may request from time to time; (4) comply with all laws, ordinances, and regulations, now or hereafter in effect of governmental authorities applicable to the use or occupancy of the Rental Housing Property including without limitation "Environmental Laws" as defined in Section 2, above. Borrower may contest in good faith any such law, ordinance, or regulation and withhold compliance during any proceeding, including appropriate appeals, so long as Borrower has notified the City and the CDC in writing prior to doing so and so long as, in the City's and the CDC's sole opinion, the City's and the CDC's interests in the Rental Housing Property are not jeopardized. The City and the CDC may require Borrower to post adequate security or a surety bond, reasonably satisfactory to the City and the CDC, to protect the City's and the CDC's interest; (5) use the proceeds of the Loan solely for the purposes set forth in Section 3 and for expenses directly related to the Loan and the execution and delivery of the Promissory Note and the Deed of Trust and the Related Loan Documents; (6) pay and discharge when due all of Borrower's other indebtedness, obligations, and claims (exclusive of the Deed of Trust) which, if unpaid, might become a lien or charge upon the Rental Housing Property; provided, however, that Borrower shall not be required to pay and discharge any such indebtedness, obligation, or claim so long as (A) its legality is being contested by Borrower in good faith by appropriate proceedings, (B) the indebtedness, obligation, or claim does not become a lien or charge upon any of the Rental Housing Property, and (C) Borrower shall have established on its books adequate reserves with respect to the amount contested in accordance with generally accepted accounting practices; (7) perform and comply with all terms, conditions, and provisions set forth in this Agreement and in all other instruments and agreements between Borrower and the City and the CDC, including without limitation the HOME Regulatory Agreement and the Related Loan Documents, and in all other loan agreements now or hereafter existing between Borrower and any other party. Borrower shall notify the City and the CDC immediately in writing of any default in connection with any such agreement; (8) make, execute, and deliver to the City and the CDC such security agreements, instruments, documents, and other agreements reasonably necessary to document and secure the Loan and to perfect the security interest of the City and the CDC in any of the Rental Housing Property; (9) submit affordable rental housing continuous compliance reports with respect to the Rental Housing Property as provided under the HOME Regulatory Agreement for and approved by the City and the CDC; (10) The Borrower shall improve the Rental Housing Property in a good and workman-like manner and shall complete the improvements thereon within 90 calendar days following the date of recordation of the HOME Regulatory Agreement on such Rental Housing Property; (11) The Borrower hereby covenants and agrees to use the rental or net sales proceeds realized by the rental or sale of the Rental Housing Property (after the payment of permitted development costs) for the affordable housing development purposes of the Borrower, as a community 7 housing development organization, for other affordable housing improvement projects in the City of Rosemead. Borrower shall provide the City and the CDC with written confirmation that it is in compliance with this covenant annually, until the fifty-fifth (55th) anniversary of the date on which the Deed of Trust is recorded =. Section 7. NEGATIVE COVENANTS. Borrower covenants and agrees with the City and the CDC that while this Agreement is in effect, Borrower shall not, without the prior written consent of the City and the CDC: (1) Indebtedness and Liens. (A) Incur or assume indebtedness for borrowed money, including capital leases, (B) sell, transfer, mortgage, assign, pledge, or lease any of the Rental Housing Property (except for leases of rental dwelling units on any of the Rental Housing Property to qualified tenants), (C) grant a security interest in, or encumber any of Borrower's assets, or (D) sell with recourse any of Borrower's accounts. (2) Continuity of Operations. (A) engage in any business activities substantially different than those in which Borrower is presently engaged, (B) cease operations, liquidate, merge, transfer, acquire or consolidate with any other entity, change ownership, change its name, dissolve or transfer or sell any property or assets out of the ordinary course of business, or (C) make any distribution with respect to any capital account, whether by reduction of capital or otherwise. (3) Loans, Acquisitions and Guaranties. (A) loan, invest in or advance money or assets to third- parties except to first time homebuyers under a mortgage program approved by the City and the CDC, (B) purchase, create or acquire any interest in any other enterprise or entity, or (C) incur any obligation as surety or guarantor other than in the ordinary course of business. (4) Liens. Create or allow to be created any lien or charge upon any of the Rental Housing Property, except for liens and charges in favor of the City and the CDC. (5) Hazardous Substances. Use, store, dispose of or release, or permit the use, storage, disposal or release, of any Hazardous Substance in, on, under or about the Rental Housing Property, except to the extent the same is in strict compliance with all applicable Environmental Laws. The following provisions relate to the Loan: (1) General Indemnity. Borrower shall indemnify, defend with counsel selected by the City and the CDC, protect and hold the City and the CDC, and their respective officials, officers, employees, agents and successors, 10 harmless from and against any and all claims, losses, liabilities, fines, penalties, damages, actions, judgments, costs and expenses (including attorneys' fees and expenses) asserted against them, or any of them, by any person, entity, or governmental body, arising out of or in connection with the use, operation or ownership of the Rental Housing Property by the Borrower or its agents, employees, tenants or permittees. The City and the CDC shall be entitled to appear in any action or proceeding to defend itself against such claims, and all costs incurred by the City and the CDC in connection with such defense, including attorneys' fees, shall be paid by Borrower to the City and the CDC. The City and the CDC shall, in their sole discretion, be entitled to settle or compromise any asserted claims, and such settlement shall be binding upon Borrower for purposes of the indemnification under this Section 8(1). All amounts paid by the City and the CDC under this Section 8(1), if any, shall be secured by the Deed of Trust and be payable upon demand, and shall bear interest at the maximum rate permitted by law. (2) Special Environmental Indemnity. Borrower shall indemnify, defend with counsel selected by the City and the CDC, protect and hold harmless the City and the CDC, and their respective officials, officers, employees, agents and successors (collectively, "Indemnified Parties" or singularly, "Indemnified Party ") from and against all claims, damages (including without limitation, special and consequential damages), punitive damages, injuries, costs, response costs, losses, demands, debts, liens, liabilities, causes of action, suits, legal and administrative proceedings, interest, fines, charges, penalties and expenses (including without limitation (A) attomey's, engineer's, consultant's and expert witness fees and costs incurred in defending against any of the foregoing or in enforcing this indemnity and (B) any diminution in the value of the Property) of any kind whatsoever paid, incurred or suffered by any Indemnified Party, or asserted against the Property, directly or indirectly arising from or attributable to (i) any breach by the Borrower of any of its agreements, representations or warranties set forth in Section 4(6) or Section 7(5), or (ii) any repair, cleanup, remediation, detoxification, closure or preparation and implementation of any plan therefor undertaken by any Indemnified Party concerning Hazardous Substances on, under or about any of the Rental Housing Property. The foregoing indemnity shall apply whether acts of any Indemnified Party are undertaken because of proceedings initiated by any federal, state or other government authority or by any private persons(s). The foregoing indemnity is intended by the parties to be an agreement pursuant to Section 107(e) of CERCLA, 42 U.S.C. Section 9607(e) and California Health and Safety Code Section 25364. (3) Special Covenant to Give Notice to the City and the CDC. The Borrower shall promptly give the City and the CDC (i) a copy of any notice, correspondence or information the Borrower receives from any federal, state or other government authority regarding Hazardous Substances on, under or about the Rental Housing Property or regarding any actions, instituted, completed or threatened by any such governmental authority concerning Hazardous Substances which affect or may affect the Rental Housing Property, (ii) written notice of any knowledge or information the Borrower obtains regarding Hazardous Substances on, under or about the Rental Housing Property or expenses or losses incurred or expected to be incurred by the Borrower, third party or any government agency to study, assess, contain or remove any Hazardous Substances on, under or about the Rental Housing Property for which expense or loss the Borrower may be liable or for which a lien may be imposed on the Rental Housing Property, (iii) written notice of all claims made or threatened by any third party (other than government authority) against the Borrower or the Rental Housing Property relating to damage, contribution, cost recovery compensation, loss or injury resulting from any Hazardous Substance and (iv) written notice of the Borrower's discovery of any occurrence or condition on any land adjacent to the Rental Housing Property that could cause the Rental Housing Property to be classified as "border -zone property" under the provisions of California Health and Safety Code Sections 25220, et -M., or any regulation adopted in accordance therewith, or to be otherwise subject to any restrictions on the ownership, occupancy, transferability or use of the Rental Housing Property under any of the statutes referred to in the preceding paragraph or any regulation adopted pursuant thereto. (4) Actions. The City and the CDC shall have the right to commence, appear in, or defend any action or proceeding purporting to affect the rights, duties, or liabilities of the parties to this Agreement. In connection with this right, the City and the CDC may incur and pay reasonable costs and expenses, including, but not limited to, attorneys' fees, for both trial and appellate proceedings. Borrower covenants to pay to the City and the CDC on demand all such expenses, together with interest from the date the City and the CDC may incur the expense at the maximum rated permitted by law. Section 9. EVENTS OF DEFAULT. (a) Default By City or the CDC. The following shall constitute a default by the City or the CDC: failure to fund the Loan as provided in Section 5 of this Agreement. (b) Default By Borrower. The following shall constitute a default by the Borrower: failure by the Borrower to perform or a delay in performing or a failure to comply with any term or provision of this Agreement or any of the Related Agreements, including the failure to operate or make the Rental Housing Property available for occupancy to persons and households of very low- and low - income, or a default or breach under the Promissory Noteor under the HOME Regulatory Agreement where such failure or delay or noncompliance is not corrected within thirty (30) days 12 of notice thereof by the City and the CDC. The City and the CDC reserve the right to exercise any and all remedies under the law against RHCDC, as provided for in Section 10 of this Agreement. Section 10. REMEDIES BY BORROWER OR CDC (a) Remedies of Borrower. Upon a default by the City and the CDC, the Borrower may seek appropriate legal or equitable relief for the default of the City and the CDC. (b) Remedies of the City and the CDC. Upon a default by the Borrower, the City and the CDC may, at their option, and in addition to all other rights and remedies available to them, all of which are cumulative and not alternative: (i) declare all sums due under the Promissory Note immediately due and payable; (ii) institute suit for the foreclosure of the Deed of Trust or deliver to the trustee under the Deed of Trust a written declaration of default by Borrower and of election to cause the Rental Housing Property to be sold, all as provided in the Deed of Trust; (iii) institute any proceeding at law or in equity to enforce the obligations and covenants of the Borrower under this Agreement, the Promissory Note, the Deed of Trust, or any Affordable Housing Regulatory Agreement. (c) In any action brought under this Agreement, the prevailing party shall be entitled to reimbursement from the other party of its costs and expenses (including reasonable attorney's fees) in bringing such action. Additionally, the City and the CDC shall be entitled to any costs, including reasonable attorney's fees, incurred in collecting amounts due the City and the CDC under the Promissory Note. For the purpose of the preceding sentences, the words "reasonable attorney's fees" means and includes, without limitation, the salary and expenses of in -house lawyers employed by the City and the CDC who may perform legal services in connection with such an action computed on an hourly basis. Section 11. TERMINATION OF AGREEMENT. Exempt for the provisions of Section 6(l 1) which shall survive and remain in effect for a period of five (5) years following the repayment in full of the Loan and the provisions of Sections 8(1) and 8(2) and Section 12(2) which shall survive and remain in effect in perpetuity, the remaining provisions of this Agreement shall terminate upon the payment in full by the Borrower of all amounts due under the Promissory Note. Section 12. HOUSING AFFORDABILITY COVENANT OF THE BORROWER AND MISCELLANEOUS PROVISIONS. The following provisions are a part of this Agreement: (1) Housing Affordability Covenant. Concurrently with the Advance, the Borrower shall cause to be recorded the HOME Regulatory Agreement which shall affect Borrower's title in the Rental Housing Property. The HOME Regulatory Agreement contains certain affordable rental housing 13 regulatory and affordability covenants which shall run with the land and the Rental Housing Property for a term of fifty five (55) years following its recordation. The text of the HOME Regulatory Agreement is incorporated into this Agreement by this reference. During the term of this Agreement, any amendment of the HOME Regulatory Agreement shall be subject to the prior written approval of the CDC as provided in Sectionl2(4) of this Agreement. (2) Discrimination Prohibited. The Borrower covenants and agrees that there shall be no discrimination against or segregation of any person, or group of persons, on account of race, color, religion, sex, sexual orientation, marital status, national origin, ancestry, familial status, source of income, or disability" in the use, operation, occupation, lease, sublease, transfer or sale of the Rental Housing Property, nor shall the Borrower, or any third party related to the Borrower establish or permit any such practice of discrimination or segregation to occur on the Rental Housing Property in connection with the selection, location, number or occupancy of residents in any of the rental dwelling units on the Rental Housing Property. The text of Health and Safety Code Section 33375 which sets forth the general form of non - discrimination clauses to be included in each lease or contract entered into by the Borrower with respect to the Rental Housing Property, is hereby incorporated in this Agreement by this reference. (3) No Joint Venture. Nothing in this Agreement shall be construed to constitute the creation of a partnership or joint venture between the City, CDC and Borrower. The City and the CDC are not agents or representatives of Borrower and the Borrower is not an agent or representative of the City or the CDC. This Agreement does not create a contractual relationship with and shall not be construed to benefit or bind the City and the CDC in any way with or create any contractual duties by the City and the CDC to any contractor, subcontractor, materialman, laborer, or any other person. (4) Amendment. This Agreement may be amended as deemed necessary only by written instruments duly approved by the Borrower, the City and the CDC. Any such amendments or modifications shall be valid, binding and legally enforceable only if in written form and executed by the parties hereto and only after the approval thereof by official action of the City and the CDC; provided however, that the Executive Director in consultation with legal counsel for the City and the CDC, is authorized to make non- substantive revisions and changes to the text of any instrument attached hereto as an exhibit prior to the delivery of such instrument by the Borrower. (5) Applicable Law. This Agreement has been delivered to the City and the CDC and accepted by the City and the CDC in the State of California. If 14 there is a lawsuit arising under this Agreement, the Superior Court of Los Angeles County, State of California shall have jurisdiction. This Agreement shall be governed by and construed in accordance with the laws of the State of California. (6) Authority to File Notices. Borrower appoints and designates the City and the CDC as its attorney -in -fact to file for record any notice that the City and the CDC deem necessary to protect their interests under this Agreement. This power shall be deemed coupled with an interest and shall be irrevocable while any sum or performance remains due and owing under the Promissory Note or any of the Related Loan Documents. (7) Caption Headings. Caption headings in this Agreement are for convenience purposes only and are not to be used to interpret or define the provisions of this Agreement. The recitals and exhibit to this Agreement are a part of this Agreement. (8) Consent to Sale of Loan and Promissory Note by the City and the CDC. Borrower agrees and consents to the sale, transfer or collateral assignment, whether now or later by the City and the CDC of the Loan, the Promissory Note and the Deed of Trust (or to any participating interest therein) to a third parry including without limitation Community Reinvestment Fund, Inc., and Borrower further waives all right of offset or counterclaim that it may have now or later against the City and the CDC or against any purchaser of the Loan, the Promissory Note and the Deed of Trust (or a participating interest therein) and Borrower unconditionally agrees that the City and the CDC, and each such purchaser (including successors to purchasers), may enforce Borrower's obligations to the City and the CDC hereunder. Borrower further agrees that such purchaser from the City and the CDC may enforce its interests irrespective of any personal claim or defense that Borrower may have against the City and the CDC. (9) INTENTIONALLY BLANK (10) Costs and Expenses. The City and the CDC may pay someone else to help collect the Loan and to enforce this Agreement, and Borrower will pay that amount. This includes, subject to any limits under applicable law, attorneys' fees and legal expenses of the City and the CDC, whether or not there is a lawsuit, including reasonable attorneys' fees for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), appeals, and any anticipated post judgment collection services. Borrower also will pay any court costs, in addition to all other sums provided by law. For the purposes hereof, the words, "reasonable attorney's fees" in the case of the City and the CDC means and includes the salaries and benefits payable to the lawyers employed in the office of the City Attorney and the Legal Counsel to the CDC, as allocated on an 1F] hourly basis for any such legal services performed on behalf of the City and the CDC hereunder. (11) Entire Agreement. This Agreement and the Related Documents constitute all of the agreements between the parties relating to the subject matter hereof and thereof and supersede all other prior or concurrent oral or written agreements or understandings with respect to that subject matter. The City and the CDC have no obligation to extend any additional credit to the Borrower for any other purpose. (12) Notices. All notices, requests, demands and other communications required or permitted to be given under the terms of this Agreement by one party to the other shall be in writing addressed to the recipient party's Notice Address set forth below and shall be deemed to have been duly given or made (a) if delivered personally (including by commercial courier or delivery service) to the party's Notice Address, then as of the date delivered (or if delivery is refused, on presentation), or (b) if mailed by certified mail to the party's Notice Address, postage prepaid and return receipt requested, then at the time received at the party's Notice Address as evidenced by the return receipt, or (c) if mailed by first class mail to the party's Notice address, postage prepaid, then on the third (3rd) business day following deposit in the United States Mail. Any party may change its Notice Address by a notice given in the foregoing form and manner. The Notice Addresses of the parties are: TO CDC: TO BORROWER: Rosemead Community Development Commission 8838 E. Valley Boulevard Rosemead, California 91770 Attn.: Executive Director (626) 569 -2106 Rio Hondo Community Development Corporation 11401 Valley Boulevard, Suite 201 El Monte, California 91731 Attn.: President (626) 401 -2784 TO CITY: City of Rosemead Administration Department 8838 E. Valley Boulevard Rosemead, California 91770 Attn.: City Manager (626) 569 -2106 (13) Successors and Assigns. All covenants and agreements contained by or on behalf of Borrower shall bind its successors and assigns and shall inure to the benefit of the City and the CDC, its successors and assigns. Borrower shall not however, have the right to assign its rights under this 16 Agreement or any interest therein, without the prior written consent of the City and the CDC. (14) Severability. If a court of competent jurisdiction finds any provision of this Agreement to be invalid or unenforceable as to any person or circumstance, such finding shall not render that provision invalid or unenforceable as to any other persons or circumstances. If feasible, any such offending provision shall be deemed to be modified to be within the limits of enforceability or validity; however, if the offending provision cannot be so modified, it shall be stricken and all other provisions of this Agreement in all other respects shall remain valid and enforceable. (15) Survival. All warranties, representations, and covenants made by Borrower in this Agreement or in any certificate or other instrument delivered by Borrower to the City and the CDC under this Agreement shall be considered to have been relied upon by the City and the CDC and will survive the making of the Loan and delivery to the City and the CDC of the Related Loan Documents, regardless of any investigation made by the City and the CDC (16) Time is of Essence. Time is of the essence in the performance of this Agreement. (17) Waiver. The City and the CDC shall not be deemed to have waived any rights under this Agreement, either orally or by a course of conduct, but only if such waiver is given in writing and signed by the City and the CDC. No delay or omission on the part of the City and the CDC in exercising any right shall operate as waiver of such right or any other right. A waiver by the City or the CDC of a provision of this Agreement shall not prejudice or constitute a waiver of the right of the City and the CDC otherwise to thereafter demand strict compliance with that provision or any other provision of this Agreement. No prior waiver by the City or the CDC shall constitute a waiver of any of the rights of the City and the CDC or of any obligations of Borrower as to any future transactions. Whenever the consent of the City and the CDC is required under this Agreement, the granting of such consent by the City and the CDC in any instance shall not constitute continuing consent in subsequent instances where such consent is required, and in all cases, such consent may be granted or withheld in the sole discretion of the City and the CDC. (18) List of Exhibits. Each of the following documents is attached as an exhibit to the Agreement and each in incorporated herein by this reference: Exhibit "A" - Legal Description of the Rental Housing Property Exhibit `B" - Program Budget Exhibit "C" - Promissory Note 17 Exhibit "D" - Deed of Trust (19) Effective Date of Agreement. This Agreement shall have no force or effect until it has been approved at a public meeting in the sole and absolute discretion of the City and the CDC and executed by the authorized officers of the City and the CDC and the authorized officers of the Borrower. The Effective Date of this Agreement shall be either the date of such approval by the City Council and the CDC Council of the CDC or such other date as may be expressly provided for in such approval of the City and the CDC of the Agreement by the City and the CDC. Signatures of Following page. 18 BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS AGREEMENT, AND BORROWER AGREES TO ITS TERMS. THIS AGREEMENT IS DATED AS OF MARCH 22, 2011. CDC Rosemead Community Commission D CITY OF ROSEMEAD „J Development Rio Hondo Community Development Corporation, a California public benefit corporation By: Its: Steven Ly Mayor and Chairman By: Its: By: Jeff Allred City Manager and Approved As To Form: Executive Director Approved As To Form: Rachel Richman Burke, Williams & Sorensen, LLP City Attorney and Legal Counsel Counsel to the Borrower 19 EXHIBIT "A" LEGAL DESCRIPTION OF THE PROPERTY Subject Address: 8628 Landis View Lane (1 SFD unit on lot) Legal Description: TRACT NO 701 LOT COM S 89 56' FT FROM SW COR OF LOT 1 P M 20 -65 TH N 0 04' W TO S LINE OF LANDISVIEW LANE TH W THEREON 56 FT TH S 0 04' E TO A PT S 89 56' W FROM BEG TH N 89 56' E 56 FT TO LOT 49 City: Rosemead County: Los Angeles State: California Zip Code: 91770 -3724 Census Tract: 4824.02 Map Reference: 46 -F4 APN: 5281- 032 -033 EXHIBIT B" PROGRAM BUDGET Construction Loan Amount Residential Development Budget Interest Rate 5.5% Months of Construction Total Average Outstanding Balance Construction interest S Development Residentlal Cost Total Rosemead Ros imeac RDA RHCDC I Owner HOME Equity Acquisition Costs: Purchase Prim 425,000 425,000 227,086 197,914 - Liens - Closing. Title 8 Recording Costs 2,750 - 2,750 Extension payment - Other: - SUBTOTAL - ACQUISITION B RELATED COSTS 427,750 427,750 227,086 197,914 2,750 Construction - Rehabifdation / Repairs 14,710 3,400 11,310 Bond Premium - Infrastructure Improvements - Hazardous Abate. B Monitoring 5,060 5,060 5,060 Construction Contingency (10 %) - - - Sales Taxes - Olher Construcion Costs: - Olher Construction Costs: - SUBTOTAL- REHABILITATION COSTS 19,770 19,770 - 3,400 16,370 Development - Appraisal 375 375 - 375 Phase 1 LBP B Asbestos Testing 1,145 1,145 - - 1,145 Geoterhnicel Study Boundary 8 Topographic Survey Legal Developer Fee - - - - - Project Management - Technlcel Assistance Other: Misc. Soft Costs - - - - Other: Soft Cost Conlnigency, (3 %) - - - - - SUBTOTAL SOFT COST 1,520 1,520 - - 1,520 Other Development Rest Estate Tax Insurance - - - - - Relocation - Bidding Costs - Fa mks. Fees 8 Hookups 800 800 - - 800 ImpaCUMiligation Fees - Development Period Utilities - - - - ConstruGion Loan Feas - - - - Construction Interest - - - - Other Loan Fees - - - LIHTC Fees ACCOUntinglAudil Marketing/Leasing Expenses - - - - - Carrying Costs at Rent up - - - - - Operaling Reserves Replacement Reserves SUBTOTAL 800 800 - - 800 Total Development Cost 449,840 449,840 227,086 201,314 21,440 50% 45% 5% unso Construction Loan Amount S Interest Rate 5.5% Months of Construction 12 Average Outstanding Balance Construction interest S Use of Public Funds City of Budget Rosemead Rosemead Line Item (s) Amount HOME RDA 1. Property Acquisition $ 427,750 $ 227,086 $ 197,914 2. Rehabilitation / Repairs $ 14,71u 5,4uu Total Project Budget: $442,46 $227 $201,31 a W w J H Z W cc 0 W (n O a O o: a O LL c m m �E� � O Y C C C ¢ — 7 p C � m m = O N O Y Y m x c ca t (7 a+ o 0 o 0 > , m P{ r y o = r 0 O C C 9 p m a a� O Y? O m C a o d Ta C N m a a Q w mNao�- o N E o S r ' a o x ?ac 1 m N N O d a � E� z z c A m 2 (D o a V Z O C to e N � w V) Vf V) fp w as z z z Q o m v o E z 3 m 0 0 00 7 § E Lo m§ mƒ § }\ }} k \ \k \� \)k} k§ §kk E -a — k °w 3 m4! ƒ# ® _0 $ !e � -��/ }\/ � k ( § .§( § i ! ■ � |° ./! ƒ((!f�! # @ A■ . 2 .: 0 7 § E Lo m§ mƒ § }\ }} k \ \k \� \)k} k§ §kk E -a — k °w 3 m4! ƒ# ® _0 $ !e � -��/ }\/ � EXHIBIT "C" PROMISSORY NOTE EXHIBIT "D" DEED OF TRUST AND ASSIGNMENT OF RENTS ATTACHMENT C HOME INVESTMENT PARTNERSHIP PROGRAM PROMISSORY NOTE Secured by a Deed of Trust For Multiple Real Property Parcels Executed By Rio Hondo Community Development Corporation In Favor of the City of Rosemead, California And the Rosemead Community Development Commission [55 -YEAR TERM] Amount: $ Date: March 22, 2010 NOT TO EXCEED $201,314 Low /Mod Set -Aside Funding $227,086 HOME Funding $428,400 Total BORROWER(S) PROMISE TO REPAY FOR VALUE RECEIVED, the undersigned, Rio Hondo Community Development Corporation (hereinafter, "RHCDC "), a California public benefit corporation, whose address is 11401 Valley Boulevard, Suite 201, Rosemead, California, 91731 (hereafter referred to as "BORROWER "), hereby promises to pay to the ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION, a public body (hereinafter, "CDC "), or its order, the sum total of Two Hundred One Thousand Three Hundred Fourteen Dollars ($201,314.00), and to the CITY OF ROSEMEAD, a public body (hereinafter, "CITY'), or its order, the sum total of Two Hundred Twenty -Seven Thousand Eighty -Six Dollars ($227,086.00), and in such manner as set forth in this promissory note and the Related Documents (defined below), in lawful money of the United States of America. A. DEFINITIONS The following definitions shall apply throughout this Note: 1. Pro e . "Property" shall collectively mean the real property parcel described in Exhibit "A" attached to this NOTE and made a part of hereof. This Property shall serve as security for the NOTE by way of a single deed of trust. 2. REGULATORY AGREEMENT "REGULATORY AGREEMENT" means that certain HOME Investment Partnership Funds Regulatory Agreement, dated as of the date hereof, by and between the City of Rosemead, the CDC, and Rio Hondo Community Development Corporation. 3. DEED OF TRUST The term "DEED OF TRUST" means that trust deed, dated as of the date hereof, evidencing the real property security for this Note with Borrower as Trustor, CITY and CDC as Beneficiaries, and United Title Company as Trustee. (The form of the DEED OF TRUST is attached hereto as Exhibit 'B'j. Page I 4. Principal Sum. The term "Principal Sum" means the principal indebtedness of Two Hundred One Thousand Three Hundred Fourteen Dollars ($201,314.00) and Two Hundred Twenty -Seven Thousand Eighty -Six Dollars ($227,086.00), for a sum total of Four Hundred Twenty -Eight Thousand Four Hundred Dollars ($428,400.00), evidenced by this NOTE, excluding any interest or other fees the CITY or the CDC may be owed pursuant to this NOTE and /or the Related Documents. 5. Loan: The term "Loan" means the loan evidenced by this NOTE and granted to the BORROWER pursuant to the terms, conditions, restrictions and covenants of the REGULATORY AGREEMENT and the Related Documents. 6. Promissory Note "NOTE" means the instant promissory note. 7. Affordability Period The term "Affordability Period" means the fifty -five (55) year period commencing from the date the REGULATORY AGREEMENT is recorded. 8. Related Documents The term "Related Documents" means the CONVENANTS, CONDITIONS AND RESTRICTIONS, DEED OF TRUST, LOAN AGREEMENT and the REGULATORY AGREEMENT. TERMS A. INTEREST Interest shall accrue at a rate of ZERO PERCENT (0 %) per annum on all outstanding indebtedness evidenced by this NOTE. B. TIME AND MANNER OF PAYMENT The indebtedness evidenced by this NOTE shall be repaid by the BORROWER in the following manner: 1. BORROWER shall repay the sum loaned by the CITY in the amount of Two Hundred Twenty -Seven Thousand Eighty -Six Dollars ($227,086.00) at the end of the fifty -five -year term of this NOTE. In the event that the BORROWER breaches or defaults and fails to cure any of the covenants, restrictions, terms, promises or provisions of this NOTE or any of the RELATED DOCUMENTS as further described in Section E, the CITY is entitled to immediate repayment. 2. BORROWER shall only be required to pay back the sum loaned by the CDC in the amount of Two Hundred One Thousand Three Hundred Fourteen Dollars ($201,314.00) in the event that the BORROWER breaches or defaults and fails to cure any of the covenants, restrictions, terms, promises or provisions of this NOTE or any of the RELATED DOCUMENTS as further described in Section E. C. ASSIGNMENT BORROWER may not assign or otherwise transfer (collectively, an Page 2 "assignment ") all or any part of its interest or obligations in this NOTE without the prior written consent of the CITY and the CDC. Any request for assignment must be made to the CITY and the CDC in writing no less than sixty (60) days prior to the proposed assignment date. Any request for assignment must be accompanied by financial documentation demonstrating the creditworthiness and financial assets of the proposed assignee and the assignees ability to properly operate the Property. The decision to approve the assignment shall be at the sole discretion of the CITY and the CDC. D. SECURITY This NOTE is secured by a voluntarily subordinated DEED OF TRUST in the Property. E. DEFAULT UNDER NOTE, DEED OF TRUST, REGULATORY AGREEMENT CONVENANTS, CONDITIONS AND RESTRICTIONS OR LOAN AGREEMENT Notwithstanding any other provisions of this NOTE, if default occurs in any of the covenants or agreements contained herein or in any of the Related Documents, the Principal Sum shall be immediately due and payable in full at the option of the CITY and the CDC. Failure by the CITY and the CDC to exercise its option to accelerate in the event of a default shall not constitute waiver of any other available right or remedy or of the right to exercise such option in the event of the same or any other default. Further, the occurrence of a default shall not relieve the BORROWER or any subsequent owner of the Property from adhering to the affordability restrictions contained herein or in the Related Documents. F. DUE ON SALE CITY and CDC may, at their option, declare immediately due and payable the Principal Sum and other all sums secured by the DEED OF TRUST upon the sale or transfer, without the CITY's and the CDC's prior written consent, of all or any part of the Property, or any interest in the Property. Except as set forth in the REGULATORY AGREEMENT a "sale or transfer' means the conveyance of Property or any right, title or interest therein; whether legal or equitable; whether voluntary or involuntary; whether by outright sale, deed, installment sale contract, land contract, contract for deed, leasehold interest, lease option contact, or by sale, assignment or transfer of any beneficial interest in or to any land trust holding title to the Property or by other method of conveyance of property interest. G. ATTORNEYS FEES If any default or dispute gives rise to litigation, the prevailing party in such litigation shall pay reasonable attorney fees and costs and expenses incurred by the non - prevailing in connection with any such default or any other action or other proceeding brought to enforce any of the provisions of this NOTE. The prevailing party's right to such fees shall be valued at customary and reasonable rates for private sector legal services. H. MODIFICATION: This NOTE may not be modified or amended, except by mutual agreement of the parties and then only if such agreement is made by written instrument expressing such intention. Any modification or amendment shall be attached to this Note and become a part hereof, but the failure to so attach any such Page 3 modification or amendment shall not affect the validity or binding nature of such modification or amendment. I. SEVERABILITY The covenants, terms and provisions of this NOTE are severable. Invalidation of any covenant, term or provision or any part thereof by law, judgment, or court order shall not affect any other covenants. J. PLACE OF REPAYMENT BORROWER shall make payment of all amounts due to CITY and the CDC under this NOTE to the City of Rosemead, 8838 E. Valley Boulevard, Rosemead, CA 91770, or such other address as CITY or the CDC may designate in writing to BORROWER. K. BORROWER'S WAIVERS BORROWER waives any rights to require the CITY or the CDC to do the following: (1) to demand payment of amounts due (known as a "presentment "); (2) to give notice that amounts due have not been paid (known as "notice of dishonor"); (3) to obtain an official certificate of nonpayment (known as a "protest "). L. GIVING OF NOTICES Any notice that must be given to the CITY and the CDC under this NOTE will be given by hand delivery or mailing it certified mail to the Rosemead Development Services Department at 8838 E. Valley Boulevard, Rosemead, CA 91770. Any notice that must be given to the BORROWER will be given by hand delivery or mailing it certified mail to the BORROWER at Rio Hondo Community Development Corporation, a California public benefit corporation, whose address is 11401 Valley Boulevard, Suite 201, El Monte, California, 91731. Each party agrees to provide the other with thirty (30) days written notice of any change of address. M. NON - RECOURSE PROVISION The indebtedness evidenced by this NOTE and secured by the DEED OF TRUST is a non - recourse obligation of the BORROWER. Neither the BORROWER nor any other party shall have any personal liability for repayment of the loan indebtedness. Except as otherwise provided in this NOTE or the Related Documents, the sole recourse of the CITY and the CDC for repayment of the principal and interest shall be the exercise of the CITY'S or the CDC's right to foreclose on the Property and all structures and improvements constructed thereon. The following shall apply notwithstanding the foregoing: (a) If the BORROWER executes, or has executed, a Project - related loan agreement, which provides that the BORROWER'S board shall be personally liable for repayment of the loan, such provisions shall be deemed to apply to the BORROWER with equal force. (b) Nothing in this Section shall be interpreted as relieving the BORROWER from all other duties imposed upon them under this NOTE or the Related Documents. Page 4 N. UNAPPROVED SALES OR TRANSFERS Except for the provisions regarding tenancy set forth in the REGULATORY AGREEMENT, if the BORROWER otherwise sells or transfers the Property, any portion thereof, or any structures and improvements constructed thereon without the prior written approval of the CITY and the CDC, the Principal Sum and all other amounts owing on the NOTE shall be immediately due and payable to the CITY and the CDC. The phrase "sells or transfers" means the conveyance of Property (or any portion thereof) or any right, title or interest therein; whether legal or equitable; whether voluntary or involuntary; whether by outright sale, deed, installment sale contract, land contract, contract for deed, leasehold interest, lease option contract, or by sale, assignment or transfer or any beneficial interest in or to any land trust holding title to the Property or by other method of conveyance of a property interest. The phrase "sells or transfers" does not include a conveyance of an interest in the Property or any structures and improvements constructed thereon if such conveyance is authorized by the CITY and the CDC in writing. O. AUTHORIZATION BORROWER'S signatories to this NOTE warrant, represent and agree that they are duly authorized to bind BORROWER in the manner set forth in this NOTE. [Signatures are on the Next Page] Page 5 BY SIGNING BELOW, THE BORROWER ACCEPTS AND AGREES TO THE TERMS CONTAINED IN THIS NOTE. 1 TiITISIVA 7 RIO HONDO COMMUNITY DEVELOPMENT CORPORATION, A California public benefit corporation A Donna Duncan, President Rio Hondo Community Development Corporation, Date: , Secretary Date: Page 6 EXHIBIT 'A' LEGAL DESCRIPTION OF THE PROPERTY Subject Address: 8628 Landis View Lane (1 SFD unit on lot) Legal Description: TRACT NO 701 LOT COM S 89 56' FT FROM SW COR OF LOT 1 P M 20 -65 TH N 0 04'W TO S LINE OF LANDISVIEW LANE TH W THEREON 56 FT TH S 0 04'E TO A PT S 89 56'W FROM BEG TH N 89 56' E 56 FT TO LOT 49 City: Rosemead County: Los Angeles State: California Zip Code: 91770 -3724 Census Tract: 4824.02 Map Reference: 46 -F4 APN: 5281 - 032 -033 Page 7 EXHIBIT 'B' DEED OF TRUST Page 8 Recording Requested By WHEN RECORDED MAIL TO CITY OF ROSEMEAD Attention: Michelle Ramirez 8838 E. Valley Boulevard Rosemead, California 91770 (SPACE ABOVE THIS LOVE RESERVED FOR RECODER'S USE) DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS, FIXTURE FILING AND SECURITY AGREEMENT (RIO HONDO CDC: RENTAL HOUSING PROPERTY) THIS DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS, FIXTURE FILING AND SECURITY AGREEMENT ( "Deed of Trust ") is made as of March 22, 2010, by the Rio Hondo Community Development Corporation, a California public benefit corporation (hereinafter referred to as "Trustor "), whose address is 11401 Valley Boulevard, Suite 201, El Monte, California 91731, to United Title Company, whose address is 500 North Brand Boulevard, Suite 1150, Glendale, California 91203 (hereinafter referred to as "Trustee "), for the benefit of the City of Rosemead, a municipal corporation ( "City "), and the Rosemead Community Development Commission, a public entity ("CDC" and, collectively with City, herein called `Beneficiaries "), whose address is 8838 E. Valley Boulevard, Rosemead, California 91770. FOR GOOD AND VALUABLE CONSIDERATION, including the indebtedness herein recited and the trust herein created, the receipt of which is hereby acknowledged, and for the purpose of securing, in such priority as Beneficiaries may elect, each of the following: 1. The due, prompt and complete payment, observance, performance and discharge of each and every obligation, covenant and agreement contained in that certain Promissory Note (the "Promissory Note ") of even date herewith evidencing a loan (the "Loan ") in the principal amount not to exceed Four Hundred Twenty -Eight Thousand Four Hundred Dollars ($428,400), executed by Trustor, as maker, to the order of Beneficiaries and any and all modifications, extensions or renewals thereof, whether hereafter evidenced by the Promissory Note or otherwise; and 2. The payment of all other sums, with interest thereon at the rate of interest, if any, provided for herein or in the Promissory Note, becoming due or payable under the provisions of this Deed of Trust, the 2011 Affordable Housing Development Loan Agreement (the "Loan Agreement") dated as of March 22, 2010, by and between Trustor and the Beneficiaries or any other document or instrument heretofore or hereafter executed by Trustor having reference to or arising out of or securing the indebtedness represented by the Promissory Note; and 3. The payment of such additional sums and interest thereof which may hereafter be loaned to Trustor, or its successors or assigns, by Beneficiaries, whether or not evidenced by a promissory note or notes which are secured by this Deed of Trust; and 4. The due, prompt and complete observance, performance and discharge of each and every obligation, covenant and agreement of Trustor contained in the Loan Agreement, the Promissory Note, this Deed of Trust or any other document or instrument heretofore or hereafter executed by Trustor having reference to or arising out of or securing the indebtedness represented by the Promissory Note (collectively, the "Loan Documents "). TRUSTOR DOES HEREBY irrevocably grant, transfer, bargain, sell, convey and assign to Trustee, in trust, with power of sale and right of entry and possession, and does grant to Beneficiaries a security interest for the benefit and security of Beneficiaries under and subject to the terms and conditions hereinafter set forth, in and to any and all of the following described property which is (except where the context otherwise requires) herein collectively called the "Property" whether now owned or held or hereafter acquired and wherever located, including any and all substitutions, replacements and additions to same: (a) That certain real property located in Los Angeles County, State of California, and more particularly described in Exhibit "A " , attached hereto and incorporated herein by this reference (the "Real Property"), together with all of the easements, rights, privileges, franchises, appurtenances thereunto belonging or in any way appertaining to the real property, including specifically but not limited to all appurtenant water, water rights and water shares or stock of Trustor, any and all general intangibles relating to the use and/or development of the real property, including development allotments, governmental permits, approvals, authorizations and entitlements, agreements to provide necessary utility or municipal services, all engineering plans and diagrams, surveys and/or soil and substrata studies, and all other rights, privileges and appurtenances related to the said real property and all of the estate, right, title, interest, claim and demand whatsoever of Trustor therein or thereto, either in law or in equity, in possession or in expectancy, now owned or hereafter acquired; (b) All structures, buildings and improvements of every kind and description now or at any time hereafter located on the Real Property (hereinafter referred to as the "Improvements "), including all equipment, apparatus, machinery, fixtures, fittings, and appliances and other articles and any additions to, substitutions for, changes in or replacements of the whole or any part thereof, now or at any time hereafter affixed or attached to and which are an integral part of the Improvements or any portion thereof, and such Improvements shall be deemed to be fixtures and an accession to the freehold and a part of the Real Property as between the parties hereto and all persons claiming by, through or under such parties; (c) All articles of tangible personal property and any additions to, substitutions for, changes in or replacements of the whole or any part thereof (other than personal property which is or at any time has become toxic waste, waste products or hazardous substances), including without limitation all installations, shelving, partitions, door -tops, vaults, awnings, window shades, venetian blinds, light fixtures, fire hoses and brackets and boxes for the same, fire sprinklers, alarm systems, drapery rods and brackets, screens, water heaters, wall coverings, carpeting, linoleum, tile, other floor coverings of whatever description, communication systems, all specifically designed installations and furnishings, office maintenance and other supplies and all of said articles of property, the specific property, the specific enumerations herein not excluding the general, now or at any time hereafter placed upon or used in any way in connection with the ownership, operation or maintenance of the Real Property or the Improvements or any portion thereof and owned by Trustor or in which Trustor now has or hereafter acquires an interest, and all building materials and equipment now or hereafter delivered to the Real Property and intended to be installed or placed in or about the Improvements. Such tangible, personal property shall, in addition to all other tangible, personal property herein described or defined, specifically include each and every item of tangible, personal property and any substitutions for, changes in or replacements thereof which are used in the operation of the Improvements. Notwithstanding the breadth of the foregoing, the Real Property shall not include (i) personal property which may be owned by lessees or other occupants of the Real Property; (ii) inventory of any lessee or occupant of the Real Property used in the normal course of the business conducted thereon; (iii) material, equipment, tools, machinery, or other personal property which is brought upon the Real Property only for use in construction, maintenance or repair and which is not intended to remain after the completion of such construction, maintenance or proper maintenance, of the Real Property; (d) All right, title and interest of Trustor, now owned or hereafter acquired in and to and lying within the right -of -way of any street, road, alley or public place, opened or proposed, vacated or extinguished by law or otherwise, and all easements and rights of way, public or private, tenements, hereditaments, appendages, rights and appurtenances how or hereafter located upon the Real Properthy or now or hereafter used in connection with or now or hereafter belonging or appertaining to the Real Property; and all right, title and interest in the Trustor, now owned or hereafter acquired, in and to any strips and gores adjoining or relating to the Real Property; (e) All judgments, awards of damages, settlements and any and all proceeds derived therefrom hereafter made as a result of or in lieu of any taking of the Real Property or any part thereof, interest therein or any rights appurtenant thereto under the power of eminent domain, or by private or other purchase in lieu thereof, or for any damage (whether caused by such taking or otherwise) to the Real Propertyh or the Improvements thereon, including change of grade of streets, curb cuts or other rights of access for any public or quasi- public use or purpose under any law; (f) All rents, incomes, issues and profits, revenues, royalties, bonuses, rights, accounts, contract rights, insurance policies and proceeds thereof, general intangibles and benefits of the Real Property, or arising from any lease or similar agreement pertaining thereto and all right, title and interest of Trustor in and to all leases of the Real Property now or hereafter entered into and all right, title and interest of Trustor thereunder, including, without limitation, cash or securities deposited thereunder to secure performance by the lessees of their obligations thereunder, whether said cash or securities are to be held until the expiration of the terms of said leases or applied to one or more of the installments of rent coming due immediately prior to the expiration of said terms with the right to receive and apply the same to said indebtedness, and Trustee or Beneficiaries may demand, sue for and recover such payments but shall not be required to do so; and (g) All proceeds of the conversion, voluntary or involuntary, of any of the foregoing into cash or liquidated claims. Trustor makes the foregoing grant to Trustee for the purposes herein set forth; provided, however, that if the Trustor shall pay or cause to be paid to the holder of the Promissory Note all amounts required to be paid under the provisions of the Promissory Note, this Deed of Trust and any other Loan Documents, and at the time and in the manner stipulated therein, and shall further pay or cause to be paid all other sums payable hereunder and all indebtedness hereby secured, then, in such case, the estate, right, title and interest of the Trustee and Beneficiaries in the Property shall cease, determine and become void, and upon proof being given to the satisfaction of the Beneficiaries that all amounts due to be paid under the Promissory Note have been paid or satisfied, and upon payment of all fees, costs, charges, expenses and liabilities chargeable or incurred or to be incurred by Trustee or Beneficiaries, and of any other sums as herein provided, the Trustee shall, upon receipt of the written request of the Beneficiaries, cancel, reconvey and discharge this Deed of Trust. TO HAVE AND TO HOLD THE MORTGAGED PROPERTY UNTO THE TRUSTEE ITS SUCCESSORS AND ASSIGNS FOREVER, ALL IN ACCORDANCE WITH THE PROVISIONS HEREOF. To protect the security of this Deed of Trust, Trustor agrees: 1. Trustor's Covenant of Payment Trustor shall perform all of its obligations under the Loan Agreement, the Promissory Note and this Deed of Trust when due, without excuse or delay of any kind whatsoever, except as expressly provided herein or therein, and Trustor shall pay the Loan and all other debts and monies secured by this Deed of Trust when due, without set off or deduction of any kind. 2. Trustor's Warranties of Title Trustor wan-ants to Beneficiaries that it is the sole holder of fee simple absolute title to all of the Property and that said title is marketable and free from any lien or encumbrance, except (a) as otherwise provided in this section, (b) those approved in writing by Beneficiaries, and (c) the liens imposed by law for nondelinquent real property taxes and assessments. Trustor further covenants and agrees as follows: that Trustor will keep the Property free from all liens of any kind, including, without limitation, statutory and governmental; that no lien superior or junior to this Deed of Trust will be created or suffered to be created by Trustor during the life of this Deed of Trust without Beneficiaries' prior written consent; that Trustor has good right to make this Deed of Trust and the person or persons executing this Deed of Trust on behalf of Trustor has or have the authority to do so; and that Trustor will forever warrant and defend Beneficiaries' interest in the Property against every person, whomsoever, claiming any right or interest in the Property or any part thereof. 3. Trustor's Right to Contest Statutory Liens As used herein the words "mechanic's lien" and "materialman's lien" mean and include a stop notice as this term is defined in California Civil Code Section 3179, et seq. The filing of a mechanic's or materialman's lien against the Property or a stop notice against the Trustor or the Beneficiaries and/or funds held by or owed to the Trustor for the improvement of the Property shall not constitute a default hereunder, if and so long as (a) no defaults exist under the Loan Agreement, this Deed of Trust or the Promissory Note; (b) within fifteen (15) days after filing of such lien, Trustor obtains and maintains in effect a bond 4 issued by a California admitted surety acceptable to Beneficiaries in an amount not less than 125% of the entire sum alleged to be owed to the lien claimant or such other amount as is required to obtain a court order to release said lien of record; (c) Trustor provides to Beneficiaries and pays for an endorsement to Beneficiaries' title insurance policy, in a form satisfactory to Beneficiaries, which insures the priority of this Deed of Trust over the lien being contested; (d) Trustor immediately commences its contest of such lien and continuously pursues the same in good faith and with due diligence; (e) such bond or contest stays the foreclosure of the lien; and (f) Trustor pays in full any judgment rendered for the lien claimant within ten (10) days following entry of any such judgment. 4. (RESERVED — NO TEXT 5. Maintenance and Inspection of Improvements Trustor shall maintain the Improvements now or hereafter constituting a part of the Property in a good and reasonable condition and state of repair. Trustor shall not commit or suffer any waste respecting the Property; shall promptly comply with all requirements of federal, state and municipal authorities and all other laws, ordinances, regulations, covenants, conditions and restrictions respecting the Property or the use thereof; and shall pay all fees or charges of any kind in connection therewith. 6. Construction and Repairs Trustor shall complete or restore promptly and in a good and workmanlike manner any Improvements that may now or hereafter be constructed, damaged or destroyed on the Property, and pay when due all costs incurred therefor. 7. Alterations No Improvements shall be structurally altered, removed or demolished without the Beneficiaries' prior written consent, nor shall any fixture or chattel covered by this Deed of Trust and adapted to the proper use and enjoyment of the Property be removed at any time without Beneficiaries' prior written consent, unless actually replaced by an article of equal suitability and value, owned by the Trustor, free and clear of any lien or security interest, except such as may be approved in writing by the Beneficiaries. 8. Compliance With Laws Trustor shall comply with all statutes, laws, ordinances and regulations which now or hereafter pertain to the construction, repair, condition, use and occupancy of the Property, including, without limitation, all environmental, subdivision, zoning, building code, fire, occupational, health, safety, occupancy and other similar or dissimilar statutes, and shall not permit any tenant or other occupant to violate the same. If any statute or order of any court of competent jurisdiction requires any correction, alteration or retrofitting of any Improvements constituting a part of the Property, Trustor shall promptly undertake the required repairs and restoration and complete the same with due diligence at its sole cost and expense. 9. Environmental Covenants. Representations. Warranties and Indemniri (a) Trustor will not use any Hazardous Materials (as defined herein below) in the construction of any Improvements constituting a part of the Property. (b) Trustor shall, at its sole expense, comply and cause each tenant leasing space within any Improvements to comply with all applicable laws, regulations, codes and ordinances relating to any Hazardous Materials or to any Environmental Activities (as defined below), including, without limitation, obtaining, filing, serving or posting all applicable notices, permits, licenses and similar authorizations. Trustor shall establish and maintain a management and operating policy for the Real Property and Improvements to assure and monitor continued compliance by Trustor and each tenant leasing space in the Improvements with all such laws, regulations, codes and ordinances. (c) Trustor agrees to submit from time to time, if requested by Beneficiaries, a report, satisfactory to Beneficiaries, certifying that the Real Property and Improvements and each part thereof is not then being used nor has it ever been used for any Environmental Activities. Beneficiaries reserve the right, in their reasonable discretion, to retain, at Trustor's expense, an independent professional consultant to review any report prepared by Trustor and/or to conduct its own investigation of the Real Property and Improvements, or any part thereof, for Hazardous Materials. Trustor hereby grants to Beneficiaries, their agents, employees, consultants and contractors the right to enter upon the Real Property and Improvements to perform such tests as are reasonably necessary to conduct such a review and/or investigation. (d) Upon the discovery by Trustor of any event or situation which would render any of the representations or warranties contained in subparagraph 9(g) hereof inaccurate in any respect, if made at the time of such discovery, Trustor shall promptly notify Beneficiaries of such event or situation and, within thirty (30) days after such discovery, submit to Beneficiaries a preliminary written environmental plan setting forth a general description of such event or situation and the action that Trustor proposes to take with respect thereto. Within sixty (60) days after such discovery, Trustor shall submit to Beneficiaries a final written environmental report, setting forth a detailed description of such event or situation and the action that Trustor proposes to take with respect thereto, including, without limitation, any proposed corrective work, the estimated cost and time of completion, the name of the contractor and a copy of the construction contract, if any, and such additional data, instruments, documents, agreements or other materials or information as Beneficiaries may reasonably request. The plan shall be subject to Beneficiaries' written approval, which approval may be granted or withheld in Beneficiaries' sole but reasonable discretion. Beneficiaries shall notify Trustor in writing of its approval or disapproval of the final plan within fifteen (15) days after receipt thereof by Beneficiaries. If Beneficiaries disapprove the plan, Beneficiaries' notice to Trustor of such disapproval shall include a brief explanation of the reasons therefor. Trustor shall submit to Beneficiaries a revised final written environmental plan that remedies the defects identified by Beneficiaries as reasons for Beneficiaries' disapproval of the previous plan. If Trustor fails to submit a revised plan to Beneficiaries within said thirty (30) day period, or if such revised plan is submitted to Beneficiaries and Beneficiaries disapproves said plan, such failure or disapproval shall, at Beneficiaries' option and upon notice to Trustor, constitute an "Event of Default" hereunder. If Beneficiaries do not notify Trustor of its approval or disapproval of the final plan or any revisions thereof within the fifteen (15) day period described above, Trustor shall provide written notice to Beneficiaries of Beneficiaries' failure to respond, at which time Beneficiaries shall have an additional forty-five (45) days after receipt of such notice from Trustor to notify Trustor of their approval or disapproval of the final plan within said additional forty -five (45) day period. If Beneficiaries fail to notify Trustor of their disapproval or approval of said plan within said forty -five (45) day period the plan shall be deemed approved. Once any such plan is approved in :i in writing or deemed approved by Beneficiaries, Trustor shall promptly commence all action necessary to implement such plan and to comply with any requirements or conditions imposed by Beneficiaries, and shall diligently and continuously pursue such action to completion in strict accordance with the terms of said plan. The rights of Beneficiaries with respect to the approval or disapproval of the environmental plan set forth herein and the actions of Beneficiaries pursuant to such rights are not intended to, and shall not, in and of themselves, confer on Beneficiaries a right to manage, operate or control the Property on a continuing basis following the discovery of the event(s) or occurrence(s) described in this subparagraph 9(d). (e) Trustor agrees to submit from time to time, if requested by Beneficiaries, a report, satisfactory to Beneficiaries, specifying any activities involving, directly or indirectly, the use, generation, treatment, storage or disposal of any Hazardous Materials on the Real Property or the Improvements. Beneficiaries reserve the right, in its sole and reasonable discretion, to retain, at Trustor's expense, an independent professional consultant to review any report prepared by Trustor and/or to conduct its own investigation of the Real Property and Improvements. Trustor hereby grants to Beneficiaries, their agent, employees, consultants and contractors the right to enter upon the Real Property and Improvements and to perform such tests as Beneficiaries deem are necessary to conduct such a review and/or investigation. Beneficiaries shall hold in confidence any report delivered by Trustor to Beneficiaries pursuant to this Section 9, except for disclosure to (a) any consultant(s) hired by Beneficiaries to review said report, (b) legal counsel, accountants and other professional advisors to Beneficiaries, (c) regulatory officials having jurisdiction over Beneficiaries who may request said report, (d) as required by any federal, state, county, regional or local authority or law, rule, regulation or ordinance, (e) as required in connection with any legal proceeding, and (f) any financial institution in connection with a disposition or proposed disposition of all or part of Beneficiaries' or any participant's interests hereunder. "Hazardous Materials" as used in this Deed of Trust shall mean any hazardous or toxic materials, pollutants, effluents, contaminants, radioactive materials, flammable explosives, chemicals known to cause cancer or reproductive toxicity, emissions or wastes and any other chemical, material or substance, the handling, storage, release, transportation, or disposal of which is or becomes prohibited, limited or regulated by any federal, state, county, regional or local authority or which, even if not so regulated, is or becomes known to pose a hazard to the health and safety of the occupants of the Property including, without limitation, (i) asbestos, (ii) petroleum and petroleum by- products, (iii) urea formaldehyde foam insulation, (iv) polychlorinated biphenyls, (v) all substances now or hereafter designated as "hazardous substances," "hazardous materials" or "toxic substances" pursuant to the Comprehensive Environmental Response, Compensation and Liability Act of 1980 ("CERCLA "), 42 U.S.C. Section 9601 et seq., as amended by the Superfund Amendments and Reauthorization Act of 1986 ( "SARA "), the Federal Water Pollution Control Act, 33 U.S.C. Section 1251 et seq. the Clean Air Act, 42 U.S.C. Section 7401 et seq., the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801 et seq., or the Resource, Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq.; (vi) all substances now or hereafter designated as "hazardous wastes" in Section 25117 of the California Health & Safety Code or as "hazardous substances" in Section 25316 of the California Health & Safety Code; (vii) all substances now or hereafter designated by the Governor of the State of California pursuant to the Safe Drinking Water and Toxic Enforcement Act of 1986 as being known to cause cancer or reproductive toxicity, or (viii) 7 (viii) all substances now or hereafter designated as "hazardous substances," "hazardous materials" or "toxic substances" under any other federal, state or local laws or in any regulations adopted and publications promulgated pursuant to said laws. "Environmental Laws" as used herein shall mean all laws, rules, regulations and ordinances relating to Hazardous Materials, including, but not limited to, those relating to soil and groundwater conditions and those statutes referred to in the definition of Hazardous Materials set forth hereinabove. "Environmental Activities" as used herein shall mean the use, generation, transportation, treatment, storage or disposal of any Hazardous Materials at any time located on or present on, under or about the Real Property or the Improvements. (f) Trustor hereby agrees, at its sole cost and expense, to indemnify, protect, hold harmless and defend (with counsel of Beneficiaries' choice), Beneficiaries, and each of them and their respective successors and assignees, and the officials, officers, agents, attorneys and employees of each of them (individually, each an "Indemnitee ", and collectively, the "Indemnitees ") from and against any and all claims, demands, damages, losses, liabilities, obligations, penalties, fines, actions, causes of action, judgments, suits, proceedings, costs, disbursements and expenses (including, without limitation, attorneys' and experts' reasonable fees, disbursements and costs) of any kind or of any nature whatsoever (collectively, "Claims ") which may at any time be imposed upon, incurred or suffered by, or asserted or awarded against, any Indemnitee directly or indirectly relating to or arising from any of the following "Environmental Matters," but excluding any Claims arising solely from the gross negligence or willful misconduct of Beneficiaries: 0) Any past, present or future presence of any Hazardous Materials on, in, under or affecting all or any portion of the Real Property or Improvements or on, in, under or affecting all or any portion of any property adjacent or proximate to the Real Property or Improvements, if such Hazardous Materials originated or allegedly originated on or from the Real Property or Improvements ; (ii) Any past, present or future storage, holding, handling, release, threatened release, discharge, generation, leak, abatement, removal or transportation of any Hazardous Materials on, in, under or from the Real Property or Improvements or any portion thereof, (iii) The failure of Trustor to comply with any and all laws, rules, regulations, judgments, orders, permits, licenses, agreements, covenants, restrictions, requirements or the like now or hereafter relating to or governing in any way the environmental condition of the Real Property or Improvements or the presence of Hazardous Materials on, in, under or affecting all or any portion of the Real Property or Improvements including, without limitation, all Environmental Laws; 8 (iv) The failure of Trustor to properly complete, obtain, submit and/or file any and all notices, permits, licenses, authorizations, covenants, and the like relative to any of the Environmental Matters described herein in connection with the Real Property or Improvements or the ownership, use, operation or enjoyment thereof, (v) The extraction, removal, containment, transportation or disposal of any and all Hazardous Materials from any portion of the Real Property or Improvements or any other property adjacent or proximate to the Real Property or Improvements , if such Hazardous Materials originated or allegedly originated on or from the Real Property or Improvements; (vi) Any past, present or future presence, permitting, operation, closure, abandonment or removal from the Real Property or Improvements of any storage tank that at any time contains or contained any Hazardous Materials and is or was located on, in or under the Real Property or Improvements or any portion thereof, (vii) The implementation and enforcement of any monitoring, notification or other precautionary measures that may at any time become necessary to protect against the release or discharge of Hazardous Materials on, in, under or affecting the Real Property or Improvements or into the air, any body of water, any other public domain or any property adjacent or proximate to the Real Property or Improvements ; (viii) Any failure of any Hazardous Materials generated or moved from the Real Property or Improvements to be removed, contained, transported or disposed of in compliance with all applicable Environmental Laws; or (ix) Any breach by Trustor of any of its covenants, representations or warranties regarding Environmental Matters contained in this Deed of Trust. The indemnity contained herein shall survive the expiration or termination of the Loan Documents and the repayment of the Loan. (g) Trustor hereby represents and warrants as follows: (i) Neither the Real Property nor the Improvements, or any part of either of them, has been a site for the use, generation, manufacture, storage, treatment, release, threatened release, discharge, disposal, or transportation of any Hazardous Materials; (ii) The Real Property and Improvements , and each part thereof, are in compliance with all Environmental Laws; (iii) Trustor has not received any written notice of claims or actions (collectively, "Hazardous Materials Claims ") pending or threatened against Trustor or any previous owner or user of the Real Property or Improvements (and relating to Trustor's and/or such previous owner's or user's ownership of the Real Property or Improvements ), by any governmental entity or agency or any other person or entity and relating to Hazardous Materials or pursuant to Environmental Laws; and (iv) Trustor has not received any written notice (i) pursuant to which the Real Property or Improvements have been designated as "border zone property" under the provisions of California Health and Safety Code Sections 25220 et seq., or any regulation adopted in accordance therewith, (ii) of a hearing at which the Real Property or Improvements will be considered for designation as "border zone property," or (iii) of an occurrence or condition on any real property adjoining or in the vicinity of the Real Property or Improvements that could cause the Real Property or Improvements or any part thereof to be designated as "border zone property." The foregoing shall constitute environmental provisions for purposes of California Code of Civil Procedure Section 736. 10. Insurance 10.1. Casualty Insurance Trustor shall at all times keep the Real Property and Improvements insured for the benefit of Trustee and Beneficiaries as follows, despite governmental requirements that may detrimentally affect Trustor's ability to obtain or may materially increase the cost of such insurance coverage: 10.1.1. Against damage or loss by fire and such other hazards (including lightning, windstorm, hail, explosion, riot, acts of striking employees, civil commotion, vandalism, malicious mischief, aircraft, vehicle, and smoke) as are covered by the broadest form of extended coverage endorsement available from time to time, in an amount not less than the full insurable value (as defined in section 10.9) of the Real Property and Improvements, with a deductible amount not to exceed an amount satisfactory to Beneficiaries; 10.1.2. Rent or business interruption or use and occupancy insurance on such basis and in such amounts and with such deductibles as are satisfactory to Beneficiaries; 10.1.3. Against damage or loss by flood, if the Real Property and Improvements are located in an area identified by the Secretary of Housing and Urban Development or any successor or other appropriate authority (governmental or private) as an area having special flood hazards and in which flood insurance is available under the National Flood Insurance Act of 1968 or the Flood Disaster Protection Act of 1973, as amended, modified, supplemented, or replaced from time to time, on such basis and in such amounts as Beneficiaries may require; 10.1.4. Against damage or loss from (a) sprinkler system leakage and (b) boilers, boiler tanks, heating and air conditioning equipment, pressure vessels, auxiliary piping, and similar apparatus, on such basis and in such amounts as Beneficiaries may require; 10.1.5. During any alteration, construction, or replacement of the Improvements, or any substantial portion thereof, a Builder's All Risk policy with extended coverage 10 with course of construction and completed value endorsements, for an amount at least equal to the full insurable value of the Improvements with provision for replacement with the coverage described in Section 10.1.5, without gaps or lapsed coverage, for any completed portion of Improvements and workers' compensation, in statutory amounts; and 10.1.6. Against damage or loss by earthquake, in an amount and with a deductible satisfactory to Beneficiaries, if such insurance is required by Beneficiaries in the exercise of its business judgment in light of the commercial real estate practices existing at the time the insurance is issued and in the County where the Real Property and Improvements are located. 10.2. Liability Insurance Trustor shall procure and maintain workers' compensation insurance for Trustor's employees and comprehensive general liability insurance covering Trustor, Trustee, and Beneficiaries against claims for bodily injury or death or for damage occurring in, on, about, or resulting from the Real Property or Improvements, or any street, drive, sidewalk, curb, or passageway adjacent to them, in standard form and with such insurance company or companies and in an amount of at least $2,000,000 combined single limit, or such greater amount as Beneficiaries may require, which insurance shall include completed operations, product liability, and blanket contractual liability coverage that insures contractual liability under the indemnifications set forth in this Deed of Trust (but such coverage or its amount shall in no way limit such indemnification). 10.3. Other Insurance Trustor shall procure and maintain such other insurance or such additional amounts of insurance, covering Trustor and the Real Property and Improvements, as (a) may be required by the terms of any construction contract for any improvements on the Real Property and Improvements or by any governmental authority, other than Beneficiaries or (b) may be reasonably required by Beneficiaries from time to time. 10.4. Form of Policies All insurance required under this Section 10 shall be fully paid for and nonassessable. The policies shall contain such provisions, endorsements, and expiration dates as Beneficiaries from time to time reasonably requests and shall be in such form and amounts, and be issued by such insurance companies doing business in the State of California, as Beneficiaries shall approve in Beneficiaries' sole and absolute discretion. Unless otherwise expressly approved in writing by Beneficiaries, each insurer shall have a Best Insurance Guide, current edition, rating of at least A(viii), or better. All policies shall (a) contain a waiver of subrogation endorsement; (b) provide that the policy will not lapse or be canceled, amended, or materially altered (including by reduction in the scope or limits of coverage) without at least 30 days' prior written notice to Beneficiaries; (c) with the exception of the comprehensive general liability policy, contain a mortgagee's endorsement (438 BFU Endorsement or equivalent), and name Beneficiaries and Trustee as insureds; and (d) include such deductibles as Beneficiaries may approve. If a policy required under this paragraph contains a co- insurance or overage clause, the policy shall include a stipulated value or agreed amount endorsement acceptable to Beneficiaries. 10.5. Duplicate Originals or Certificates Duplicate original policies evidencing the insurance required under this Section 10 and any additional insurance that may be purchased on the Property by or on behalf of Trustor shall be deposited with and held by Beneficiaries and, in addition, 11 addition, Trustor shall deliver to Beneficiaries (a) receipts evidencing payment of all premiums on the policies and (b) duplicate original renewal policies or a binder with evidence satisfactory to Beneficiaries of payment of all premiums at least 30 days before the policy expires. In lieu of the duplicate original policies to be delivered to Beneficiaries under this Section 10.5, Trustor may deliver an underlier of any blanket policy, and Trustor may also deliver original certificates from the issuing insurance company, evidencing that such policies are in full force and effect and containing information that, in Beneficiaries' reasonable judgment, is sufficient to allow Beneficiaries to ascertain whether such policies comply with the requirements of this Section 10. 10.6. Increased Coverage If Beneficiaries determine that the limits of any insurance carried by Trustor are inadequate or that additional coverage is required, Trustor shall, within 10 days after written notice from Beneficiaries, procure such additional coverage as Beneficiaries may require in Beneficiaries' sole and absolute discretion. 10.7. No Separate Insurance Trustor shall not carry separate or additional insurance concurrent in form or contributing in the event of loss with that required under this Section 10, unless endorsed in favor of Trustee and Beneficiaries, as required by this Section 10 and otherwise approved by Beneficiaries in all respects. 10.8. Transfer of Title In the event of foreclosure of this Deed of Trust or other transfer of title or assignment of the Property in extinguishment, in whole or in part, of the Tnrstor's obligation to repay the Loan, all right, title, and interest of Trustor in and to all insurance policies required under this Section 10 or otherwise then in force with respect to the Real Property and Improvements and all proceeds payable under, and unearned premiums on, such policies shall immediately vest in the purchaser or other transferee of the Property. 10.9. Replacement Cost For purposes of this Section 10, the tens "full insurable value" means the actual cost of replacing the Real Property and/or Improvements in question, without allowing for depreciation, as calculated from time to time (but not more often than once every calendar year) by the insurance company or companies holding such insurance or, at Beneficiaries' request, by appraisal made by an appraiser, engineer, architect, or contractor proposed by Trustor and approved by said insurance company or companies and Beneficiaries. Trustor shall pay the cost of such appraisal. 10.10. Approval Not Warranty No approval by Beneficiaries of any insurer may be construed to be a representation, certification, or warranty of its solvency and no approval by Beneficiaries as to the amount, type, or form of any insurance may be construed to be a representation, certification, or warranty of its sufficiency. 10.11. Beneficiaries' Right To Obtain Insurance Trustor shall deliver to Beneficiaries original policies or certificates evidencing such insurance at least 30 days before the existing policies expire. If any such policy is not so delivered to Beneficiaries or if any such policy is canceled, whether or not Beneficiaries have the policy in its possession, and no reinstatement or replacement policy is received before termination of insurance, Beneficiaries, without notice to or demand on Trustor, may (but are not obligated to) obtain such insurance insuring only Beneficiaries 12 and Trustee with such company as Beneficiaries may deem satisfactory, and pay the premium for such policies, and the amount of any premium so paid shall be charged to and promptly paid by Trustor. Trustor acknowledges that, if Beneficiaries obtain insurance, it is for the sole benefit of Beneficiaries and Trustee, and Trustor shall not rely on any insurance obtained by Beneficiaries to protect Trustor in any way. 10.12. Duty To Restore After Casualri If any act or occurrence of any kind or nature (including any casualty for which insurance was not obtained or obtainable) results in damage to or loss or destruction of the Real Property and/or Improvements, Trustor shall immediately give notice of such loss or damage to Beneficiaries and, if Beneficiaries so instruct, shall promptly, at Trustor's sole cost and expense, regardless of whether any insurance proceeds will be sufficient for the purpose, commence and continue diligently to completion to restore, repair, replace, and rebuild the Real Property and/or Improvements as nearly as possible to its value, condition, and character immediately before the damage, loss or destruction. 11. Assimiment of Insurance and Condemnation Proceeds Should the Property or any part or appurtenance thereof or right or interest therein be taken or damaged by reason of any public or private improvement, condemnation proceeding (including change of grade), fire, earthquake or other casualty, or in any other manner, Beneficiaries or Trustee may, at their option, commence, appear in and prosecute, in its own name, any action or proceeding, or make any reasonable compromise or settlement in connection with such taking or damage, and obtain all compensation, awards or other relief therefor. All compensation, awards, damages, rights of action and proceeds, including the policies and the proceeds of any policies of insurance affecting the Real Property and Improvements, are hereby assigned to Beneficiaries, but no such assignments shall be effective to invalidate or impair any insurance policy. Trustor further assigns to Beneficiaries any return premiums or other repayments upon any insurance at any time provided for the benefit of the Beneficiaries and all refunds or rebates made of taxes or assessments on the Property, and Beneficiaries may at any time collect said return premiums, repayments, refunds and rebates in the event of any default by Trustor under the Loan Agreement, this Deed of Trust or the Promissory Note. No insurance proceeds or condemnation awards at any time assigned to or held by Beneficiaries shall be deemed to be held in trust and Beneficiaries may commingle such proceeds with its general assets and shall not be liable for the payment of any interest thereon. Trustor also agrees to execute such further assignments of any such policies, compensation, award, damages, rebates, return of premiums, repayments, rights of action and proceeds as Beneficiaries or Trustee may require. 12. Use of Insurance Proceeds After any damage by casualty to the Real Property and/or Improvements, whether or not required to be insured against under the policies to be provided by Trustor, Trustor shall give prompt written notice thereof to Beneficiaries generally describing the nature and cause of such casualty and the extent of the damage to or destruction of the Real Property and/or Improvements . Trustor shall have the obligation to promptly repair the damage, regardless of whether and to the extent the casualty was covered by an insurance policy. For these purposes, Beneficiaries shall make available to Trustor proceeds of any insurance policy covering the casualty and maintained by Trustor under and subject to each ofthe following terms and conditions: 13 (a) Insurance proceeds which are directly attributable to the damage (herein the "Proceeds ") shall be released to Trustor upon and subject to satisfaction of each of the following conditions: (i) There exists no default under the Loan Agreement, this Deed of Trust or the Promissory Note at any time prior to or during the course of reconstruction; (ii) Receipt by Beneficiaries of satisfactory written evidence that any proposed restorations by Trustor will comply with all statutes, ordinances, regulations, rules, rulings, restrictive covenants, reciprocal easements, leases and contracts; that all proposed plans and specifications are approved by all required governmental agencies; and that Trustor has obtained all necessary building and other permits and approvals for such reconstruction; (iii) Receipt by Beneficiaries of proof reasonably satisfactory to Beneficiaries that there exists and will continue to exist, until the Real Property and/or Improvements are reasonably expected to be restored and fully occupied, a source of funds sufficient to pay the Loan as and when due. Such computation shall include Beneficiaries' estimate of the amount necessary to pay all of Trustor's operating expenses and pay all of the sums due on the Loan over the projected period of reconstruction, and Beneficiaries may require Trustor to establish and fund a holdback account up to the amount of the difference between the anticipated debt service and operating expenses of Trustor. In the event of any default under the Loan Agreement, this Deed of Trust, the Promissory Note or any reconstruction requirements, Beneficiaries may, at their option, apply any portion or all of such amounts against accrued interest and the outstanding amounts due under the Loan; (iv) Receipt by Beneficiaries from Trustor of sufficient cash funds to cover one hundred percent (100 %) of any difference between the estimated costs of completion, as certified by an architect or engineer approved by Beneficiaries in writing, and the Proceeds, the amount of such difference shall be paid in cash to Beneficiaries with said amount and any interest earned thereon shall be released to Beneficiaries, as necessary, following the exhaustion of available insurance proceeds, or at such earlier time deemed appropriate by Beneficiaries. In the event of any default under the Loan Agreement, this Deed of Trust, the Promissory Note or any reconstruction requirements, Beneficiaries may, at their option, apply any portion or all of such amounts and interest against the accrued interest and principal sums outstanding under the Loan; (v) Receipt by Beneficiaries of a certificate executed by Trustor describing the work to be performed in connection with such restoration and a certificate by an independent architect or engineer selected or approved by Beneficiaries in writing stating that the work described in the Trustor's certificate is 14 adequate to restore the Real Property and Improvements to substantially the same size, design, quality and condition as existed prior to the damage. The architect's or engineer's certificate shall include its estimate of all costs and expenses which will be required to complete such restorations; and (vi) Such additional conditions as may reasonably be imposed by Beneficiaries to provide assurance that the Proceeds will be used to restore the Real Property and Improvements to substantially the same condition, to the extent possible, as existed prior to the damage or taking, including, without limitation, Beneficiaries' prior written approval of all permits, plans, specifications and construction contracts for such restoration. (b) Beneficiaries shall disburse the Proceeds in increments corresponding to the percentage of completion costs then incurred for labor performed and materials furnished (which may, at Beneficiaries' discretion, be subject to reasonable holdbacks required by Beneficiaries, not exceeding ten percent (10%) of the total estimated cost of completion and which will be released upon lien -free completion of the restorations in accordance with the requirements of this Deed of Trust and the expiration of the periods within which any mechanic's or materialman's lien may be filed). Disbursements shall be conditioned upon Beneficiaries' written confirmation that all of its requirements therefor have been satisfied, including its receipt of periodic inspection and completion percentage certificates executed by the project architect approved by Beneficiaries in writing, payment acknowledgments and unconditional lien releases, and such other conditions to periodic disbursements as are customarily imposed by Beneficiaries in connection with its construction loans, no defaults or misrepresentations of Trustor and Trustor's obtaining all title insurance endorsements, payment and performance bonds, and builder's risk policies required by Beneficiaries. Trustor shall, during the progress of the work, also submit to the Beneficiaries, at periodic intervals not less frequently than monthly, a certificate satisfactory to Beneficiaries furnished by an architect or engineer approved by Beneficiaries in writing showing the cost of labor and materials incorporated into the work during the period specified in the certificate, which period shall not include any part of the period covered by any other such certificate; and (c) After completion ofthe restoration and subject to the conditions herein stated, and, if Trustor is not then in default under the Loan Agreement, this Deed of Trust or the Promissory Note, Beneficiaries shall pay to Trustor (or such other persons or entities that may have an interest therein) the undisbursed Proceeds and Trustor's deposit for any estimated restoration expense held by Beneficiaries upon delivery to Beneficiaries of (i) a certificate executed by Trustor showing that the work has been completed and that all bills for labor performed and materials furnished in connection therewith have been paid, (ii) unconditional lien releases and other appropriate written acknowledgments of payment in full executed by all contractors and subcontractors performing labor on or famishing materials to the Real Property and Improvements; (iii) a certificate executed by an architect or engineer approved by Beneficiaries confirming that the Real Property and Improvements have been restored to substantially the same size, design, quality and condition as existed immediately prior to the damage and in accordance with all applicable federal, state, local and other governmental laws and regulations; and (iv) a certificate of occupancy and other permits issued by 15 the appropriate governmental authorities authorizing the occupancy of the Real Property and Improvements for its intended purposes and use. If: (i) any of the conditions in subparagraph 12(b), above, are not fulfilled within sixty (60) days after the date of the casualty, or if the reconstruction cannot be completed within such 60 day period, within such additional time as may be reasonably necessary to complete the reconstruction, not to exceed one hundred eighty (180) days, and provided such additional time does not result in a breach by the Trustor under the Loan Agreement, this Deed of Trust or the Promissory Note; or (ii) Trustor fails to exercise diligence in promptly commencing or continuously prosecuting the work; or (iii) Trustor is otherwise in default under the Loan Agreement, this Deed of Trust, the Promissory Note or any reconstruction requirements set forth therein or herein, then in any such event Beneficiaries may, at their option, apply the Proceeds and any deposits made by Trustor hereunder to the indebtedness secured hereby, or to complete the necessary repairs and use the Proceeds for the payment thereof. If the Proceeds are so applied to the indebtedness and, together with any other payments due to Beneficiaries under the Loan and all other debts of Trustor to Beneficiaries are discharged, Beneficiaries shall not have the right to require the Real Property and Improvements to be repaired under the terms of this Deed of Trust, but Beneficiaries' rights under any other lien that it holds against the Property and which is not also required to be released shall not be thereby impaired or affected. Trustor shall not commence any repairs or reconstruction of any casualty until Beneficiaries consent in writing thereto, which consent may be withheld by Beneficiaries in its sole discretion, until all of the conditions contained in this paragraph are satisfied. All work of repairing or restoring damage shall be done in a good and workmanlike manner with materials of good quality and in conformity with all applicable laws, ordinances, rules and regulations. Nothing herein contained shall be construed as authorizing the Trustor to subject the Real Property and Improvements to any mechanic's, materialman's or other lien for the payment of bills for material furnished or labor performed in connection with any work contemplated by this paragraph 12. In any event in which the Beneficiaries are not otherwise obligated to authorize the insurance proceeds to be applied to the restoration of the Real Property and Improvements as hereinabove described and, at the option of Beneficiaries, the proceeds of a loss under any policy, whether or not endorsed payable to Beneficiaries, may be applied in payment of the principal, interest or any other sums secured by this Deed of Trust, whether or not then due, or to the restoration or replacement of any building on the Property, without in any way affecting the enforceability or priority of the lien of this Deed of Trust or the obligation of the Trustor or any other person for payment of the indebtedness hereby secured or the reconstruction of the damaged improvements, whether such Trustor be the then owner of said building or improvements or not. 13. Use of Condemnation Awards Should the Property or any portion thereof or any improvements thereon be taken or damaged by reason of any public improvement or condemnation proceeding, or by any other form of eminent domain, Trustor agrees that Beneficiaries shall be entitled to all compensation, awards and other payments or relief therefor and may, at its option, commence, appear in or prosecute in its own name any action or proceeding or make any reasonable compromise or settlement in connection with such taking or damage, and Trustor agrees 16 to pay Beneficiaries' costs and reasonable attorneys' fees incurred in connection therewith. All such compensation, awards, damages, rights of actions and proceeds may be applied by Beneficiaries toward the repair of any damage to the improvements on any portion of the Property not subject to the taking as and subject to the same conditions herein provided with respect to the disposition of insurance proceeds; provided, however, that if the taking results in a loss of the Property to an extent which, in the reasonable opinion of Beneficiaries, renders or will render the Property not economically viable or which substantially impairs Beneficiaries' security or lessens to any extent the value, marketability or intended use of the Property, Beneficiaries may apply the condemnation proceeds to reduce the unpaid indebtedness secured hereby in such order as Beneficiaries may determine. Trustor agrees to execute such further assignments of condemnation proceeds as Beneficiaries or Trustee may from time to time require. If so applied, any proceeds in excess of the unpaid principal and accrued interest due under the Loan plus all other sums due to Beneficiaries from Trustor shall be paid to Trustor or Trustor's assignee. 14. ProMrty Taxes and Assessments Trustor shall pay in full on or before the due date thereof all rents, taxes, assessments and encumbrances, with interest, that may now or hereafter be levied, assessed or claimed upon the Trustor's ownership or use of the Property that is the subject of this Deed of Trust or any part thereof, and upon request, provide the Beneficiaries with copies of official receipts for payment therefor, and shall pay all taxes imposed upon, and reasonable costs, fees and expenses of, this Deed of Trust. 15. Assessment Districts Trustor agrees to consent to inclusion of the Real Property and Improvements in any local improvement or special assessment district and to the imposition of any special or local improvement assessment against the Real Property and Improvements , upon the Beneficiaries' written request. 16. Mortgage Taxes In the event of the passage after the date of this Deed of Trust of any federal, state or municipal law, ordinance or regulation relating to the taxation of mortgages, deeds of trust or debts secured thereby so as to tax or assess any interest of Beneficiaries or any payments secured hereby, Trustor shall bear and pay the full amount of such taxes. 17. Special Assessment and Insurance Reserves Trustor shall, at the request of the Beneficiaries, pay to Beneficiaries equal monthly installments of the special assessments and insurance premiums estimated by the Beneficiaries next to become due, in addition to any other periodic payment or performances owed by Trustor under the Loan Agreement, the Promissory Note or this Deed of Trust, so that thirty (30) days before the due date thereof, or of the first installment thereof, Beneficiaries will have on hand an amount sufficient to pay the next maturing assessments and insurance premiums. The amount of the additional payment to be made on account of assessments and insurance premiums shall be adjusted annually or more frequently as Beneficiaries deem necessary and any deficit shall be immediately paid by Trustor upon request and any surplus shall be credited on the mortgage account. Subsequent payments on account of assessments and insurance premiums shall be made in accordance with the next estimate by the Beneficiaries of annual requirements. To the extent permitted by applicable law, all monies paid to Beneficiaries on account of assessments or insurance premiums may be commingled and invested with Beneficiaries' own funds and, unless and to the extent required by law, shall not bear interest for Trustor. 17 Beneficiaries shall not exercise the rights granted in this paragraph so long as all of the following conditions are met: (a) There is no other default under the Loan Agreement, this Deed of Trust or the Promissory Note; and (b) Trustor pays all assessments and insurance premiums prior to delinquency. Upon Trustor's failure to comply with either of the conditions (a) and (b), above, Beneficiaries may, at their option, then or thereafter exercised, require Trustor to pay the additional sums described in this paragraph. 18. Trustor's Right to Contest Taxes Trustor shall have the right to contest any real property tax or special assessment so long as (a) no defaults exist under the Loan Agreement, this Deed of Trust or the Promissory Note; (b) Trustor makes any payment or deposit or posts any bond as and when required as a condition to pursuing such contest; (c) Trustor commences such contest prior to such tax or assessment becoming delinquent and continuously pursues the same in good faith and with due diligence; (d) such contest or any bond furnished by Trustor stays the foreclosure of any lien securing the payment of any such tax or assessment; and (e) Trustor pays any tax or assessment within ten (10) days following the date of resolution of such contest. 19. Report of Real Estate Transaction Trustor has made or provided for making, or will make or provide for making, on a timely basis, any reports or returns required by state or local law relating to the Property, or the development of the Property, notwithstanding the fact that the primary reporting responsibility may fall on the Beneficiaries, or other party. Trustor's obligations under this paragraph will be deemed to be satisfied, if proper and timely reports and returns required under this paragraph are filed by a title company involved in each real estate transaction relating to the Property, but nothing contained herein shall be construed to require such returns or reports to be filed by Beneficiaries. 20. Leases/Rental Agreements With respect to any leases and/or rental agreements currently or hereafter relating to any portion of the Real Properthy, Trustor agrees that: (a) Trustor shall take all reasonable measures to cause each dwelling unit on the Real Property to be made available for rent and occupancy by a "low- or moderate - income household" as this term is defined in Health and Safety Code Section 50093. For purposes of this subparagraph (a), compliance by the Trustor of the applicable provisions of the HOME Regulatory Agreement of even date herewith relating to the rental and occupancy of each such dwelling unit on the Real Property shall be deemed to be compliance with the provisions of this subparagraph (a); (b) Each lease or rental agreement for each dwelling unit on the Real Property shall comply with the covenants of the Trustor under the Loan Agreement, this 1F:i Deed of Trust the Promissory Note and the HOME Regulatory Agreement of even date herewith; (c) Trustor shall fully comply with all of its obligations under all leases or rental agreements on the Real Property so that the same shall not become in default and shall do all that is necessary to preserve the same in force; (d) Trustor shall not permit an assignment of any leases, or any subletting thereunder; and (e) Beneficiaries and their successors and assigns (including any purchaser at a foreclosure or trustee's sale) shall have the right, at its option, to recognize and continue in effect any such leasehold interests following any foreclosure or trustee's sale hereunder. 21. Collateral Assignment of Leases and Rents to Beneficiaries Trustor hereby unconditionally and absolutely assigns, transfers and sets over unto Beneficiaries, all leases, subleases, rental agreements, occupancy agreements, licenses, concessions, entry fees and other agreements that grant a possessory interest in all or any part of the Property, together with all rents, issues, deposits and profits of the Property, together with the immediate and continuing right to collect and receive the same, for the purpose and upon the terms and conditions hereinafter set forth. Trustor further unconditionally and absolutely assigns, transfers and sets over unto Beneficiaries all of its right, title and interest in and to any plans, drawings, specifications, permits, engineering reports and land planning maps, which it now has or may hereafter acquire regarding any improvements now on or to be constructed upon the Property. Beneficiaries confer upon Trustor a license to collect and retain the rents, issues, deposits and profits of the Property, as they become due and payable, subject, however, to the right of Beneficiaries upon a default hereunder to revoke said license, at any time, in its sole discretion and without notice to Trustor. Beneficiaries may revoke said license and collect and retain the rents, issues, deposits and profits of the Property assigned herein to Beneficiaries upon the occurrence of an Event of Default hereunder or under any of the obligations secured hereby, and without taking possession of all or any part of the Property, and without prejudice to or limitation upon any of its additional rights and remedies granted pursuant hereto or pursuant to the Loan Agreement or the Promissory Note, and Beneficiaries shall, in their sole and absolute discretion, have the right to apply such income for the payment of all expenses or credit the net amount of income that it receives from the Property, to the indebtedness in the manner, order and amounts as Beneficiaries shall determine. In the event the Beneficiaries exercise or are entitled to exercise any of their rights or remedies under this Deed of Trust as a result of the default of the Trustor under the Loan Agreement, and if any lessee, sublessee or assignee under any lease assigned under this paragraph files or has filed against it any petition in bankruptcy or for reorganization or undertakes or is subject to similar action, Beneficiaries shall have, and are hereby assigned by Trustor, all of the rights that would otherwise inure to the benefit of Trustor in such proceedings, including, without limitation, the right to seek "adequate protection" of its interests, to compel assumption or rejection of any such lease and to seek such claims and awards as may be sought or granted in connection with the rejection of any such lease. Unless otherwise agreed to by Beneficiaries in writing, Beneficiaries' exercise of any of the rights provided in this paragraph shall 19 preclude Trustor from the pursuit and benefit thereof, without any further action or proceeding of any nature. The foregoing assignment shall not impose upon Beneficiaries any duty to produce rents from the Property, and such assignment shall not cause Beneficiaries to be a "mortgagee in possession" for any purpose. The rights granted in this paragraph shall be in addition to and not in derogation of any similar or related rights granted to Beneficiaries in any separate assignment of leases and rents. 22. ]mnairment of Security Trustor shall not, without first obtaining Beneficiaries' written consent, assign any of the rents or profits of the Property or change the general nature or use of the Property or initiate or acquiesce in any zoning reclassification, or do, or suffer to be done, any act or thing that would impair the security of Beneficiaries' lien upon the Property or the rents thereof. Trustor shall not, without the written consent of Beneficiaries, (i) initiate or support any zoning reclassification of the Property, seek any variance under existing zoning ordinances applicable to the Property or use or permit the use of the Property in a manner that would result in such use becoming a non - conforming use under applicable zoning ordinances; (ii) modify, amend or supplement any easement, reservation, restriction, covenant, condition or encumbrance pertaining to the Property; (iii) impose or consent to any restrictive covenant or encumbrance upon the Property, execute or file any subdivision or parcel map affecting the Property or consent to the annexation of the Property to any municipality; or (iv) permit or suffer the Property to be used by the public or any person in such manner as might make possible a claim of any implied dedication or easement. 23. Defense of Suits Trustor shall appear in and defend any suit, action or proceeding that might affect the value, priority or enforceability of this Deed of Trust or the Property itself or the rights or powers of Beneficiaries or Trustee, including any suits relating to damage to property or death or personal injuries, whether or not Trustor is ultimately found liable for any negligence or other wrongful conduct or inaction. Trustor, following mutual negotiations with Beneficiaries, has waived and does hereby waive any immunity to such liability to Beneficiaries under any industrial insurance or similar statute, to the extent such immunity would impair Beneficiaries' rights against Trustor. Should Beneficiaries elect to appear in or defend any such action or proceeding or be made a party to any such action or proceeding by reason of this Deed of Trust, or elect to prosecute such action as appears necessary to preserve the value, priority or enforceability of this Deed of Trust or the Property itself, Trustor will at all times indemnify from and, on demand, reimburse Beneficiaries and Trustee for, any and all loss, damage, expense or cost, including cost of evidence of title expert witness fees and attorneys' fees, arising out of or incurred in connection with any such suit, action or proceeding, and any appeal or petition for review thereof, and the sum of such expenditures shall be secured by this Deed of Trust with interest at the rate of 10% per annum and shall be due and payable on demand. Trustor shall pay costs of suit, cost of evidence of title expert witness fees and reasonable attorneys' fees in any proceeding or suit brought by Beneficiaries to foreclose this Deed of Trust and in any appeal therefrom or petition for review thereof. 24. Due on Sale and Sale of Premises or Additional Financing Not Permitted Trustor specifically agrees that: 20 (a) In order to induce Beneficiaries to make the loan secured hereby, Trustor agrees that if the Real Property or any part thereof or any interest therein, shall be sold, assigned, transferred, conveyed, pledged, mortgaged or encumbered with financing other than that secured hereby or otherwise alienated by Trustor whether voluntarily or involuntarily or by operation of law, except as shall be specifically hereinafter permitted or without the prior written consent of Beneficiaries, then Beneficiaries, at their option, may declare the Promissory Note secured hereby and all other obligations hereunder to be forthwith due and payable. Except as shall be otherwise specifically provided herein, any (a) change in the legal or equitable ownership of the Real Property whether or not of record, or (b) change in the form of entity or ownership (including the hypothecation or encumbrance thereof) of any ownership interest in Trustor shall be deemed a transfer of an interest in the Real Property; provided, however, that any transfer of the Real Property or any interest therein to an entity which controls, is controlled by, or is under common control with Trustor shall not be considered a transfer hereunder. In connection herewith, the financial stability and managerial and operational ability of Trustor is a substantial and material consideration to Beneficiaries in their agreement to make the loan to Trustor secured hereby. The transfer of an interest in the Real Property may materially alter and reduce Beneficiaries' security for the indebtedness secured hereby. Moreover, Beneficiaries have agreed to make its loan based upon the presumed value of the Real Property and the rents and profits thereof. Therefore, it will be a diminution of Beneficiaries' security if junior financing, except as shall be permitted by Beneficiaries, or if other liens or encumbrances should attach to the Real Property. (b) Trustor may request Beneficiaries to approve a sale or transfer of the Real Property to a party who would become the legal and equitable owner of the real property described in Exhibit "A" and would assume any and all obligations of Trustor under the Loan Documents (the "Purchaser "). Beneficiaries shall not be obligated to consider or approve any such sale, transfer or assumption or request for the same. However, upon such request, Beneficiaries may impose limiting conditions and requirements to its consent to an assumption. (c) In the event ownership of the Real Property, or any part thereof, becomes vested in a person or persons other than Trustor, the Beneficiaries may deal with such successor or successors in interest with reference to the Note or this Deed of Trust in the same manner as with Trustor, without in any way releasing, discharging or otherwise affecting the liability of Trustor under the Promissory Note, this Deed of Trust or the other Loan Documents. No sale of Trustor's interest in the Real Property, no forbearance on the part of Beneficiaries, no extension of the time for the payment of the Deed of Trust indebtedness or any change in the terms thereof consented to by Beneficiaries shall in any way whatsoever operate to release, discharge, modify, change or affect the original liability of the Trustor herein, either in whole or in part. Any deed conveying the Real Property, or any part thereof, shall provide that the grantee thereunder assume all of Trustor's obligations under the Note, this Deed of Trust and all other Loan Documents. In the event such deed shall not contain such assumption, Beneficiaries shall have all rights reserved to it hereunder in the event of a default or if Beneficiaries shall not elect to exercise such rights and remedies, the grantee under such deed shall nevertheless be deemed to have assumed such obligations by acquiring the Real Property or such portion thereof subject to this Deed of Trust. Nothing contained in this section shall be construed to waive the restrictions against the transfer of the Real Property contained in paragraph 24(a). 21 25. Further Encumbrances Trustor acknowledges that Beneficiaries relied upon the Property not being subject to additional liens or encumbrances for reasons including, but not limited to, the possibility of competing claims or the promotion of plans disadvantageous to Beneficiaries in bankruptcy; the risks to Beneficiaries in a junior lienholder's bankruptcy; questions involving the priority of future advances, the priority of future leases of the Property, the marshaling of Trustor's assets, and the Beneficiaries' rights to determine the application of condemnation awards and insurance proceeds; the impairment of the Beneficiaries' option to accept a deed in lieu of foreclosure; the increased difficulty of reaching agreements for workouts or to the actions to be taken by trustees, receivers, liquidators and fiduciaries; and Beneficiaries' requirements of Trustor's preservation of its equity in the Property and the absence of debt that could increase the likelihood of Trustor's being unable to perform its obligations when due. Therefore, as a principal inducement to Beneficiaries to make the Loan secured by this Deed of Trust, and with the knowledge that Beneficiaries will materially rely upon this paragraph in so doing, Trustor covenants not to further encumber the Property without first receiving Beneficiaries' express written consent in each instance, which consent may be withheld by Beneficiaries in their sole discretion. A breach of this covenant shall constitute a default under the Loan Agreement and this Deed of Trust, and Beneficiaries may exercise all remedies available to Beneficiaries under the Loan Agreement or this Deed of Taut. Without limiting the generality of the foregoing, no mortgage, deeds of trust or other forms of security interests prior or subordinate to the security interests of Beneficiaries shall encumber the Property. 26. RESERVED — NO TEXT 27. Event of Default An "Event of Default" shall be deemed to have occurred in any of the following circumstances: (a) Failure of Trustor to satisfy any performance or payment obligation required under the HOME Regulatory Agreement, the subordinate deed of trust referenced in paragraph 25 of this Deed of Trust [[1S THERE A SUBORDINATE DEED OF TRUST? ?]], the Loan Agreement or the Promissory Note when due; (b) Failure of Trustor to properly perform its obligations under this Deed of Trust, the Loan Agreement or the Promissory Note by a date specified herein or therein or in a written notice to Trustor, if applicable, (which date specified shall not be less than thirty (30) days from the date of such notice, and shall be determined by Beneficiaries in their sole discretion); provided, however, that: (i) if such default set forth in the notice cannot be cured by the date specified, (ii) Trustor commences to cure the default prior to the date specified in the notice, and (iii) Trustor diligently proceeds to cure the default thereafter; then the date specified in the notice may be extended by any period reasonably necessary to complete the cure, but in no event for more than ninety (90) days after the date originally specified in the notice; 22 (c) The condemnation, seizure or appropriation of, or the occurrence of an uninsured casualty with respect to, any material (as determined by Beneficiaries) portion of the Property; (d) Trustor becomes insolvent or generally is not paying its debts as they become due, as defined in the United States Bankruptcy Reform Act, as amended from time to time (which Act, as amended, is herein called the "Bankruptcy Code "), or shall file a voluntary petition in bankruptcy seeking to effect a reorganization plan or other arrangement with creditors or any other relief under the Bankruptcy Code or under any other state or federal law relating to bankruptcy or other relief for debtors, whether now or hereafter in effect, or shall consent to or suffer the entry of any order for relief in any involuntary case under the Bankruptcy Code, or shall be the defendant or subject of any involuntary petition filed under the Bankruptcy Code that is not dismissed within ninety (90) days of the filing thereof, or shall make an assignment for the benefit of creditors; (e) Any court (or similar tribunal) having jurisdiction over Trustor or any of the Property or other property of Trustor shall enter a decree or order appointing a receiver, trustee, guardian, conservator, assignee in bankruptcy or insolvency of Trustor, of any of the Property, of any other real property of Trustor, of any other significant asset of Trustor, or shall enter a decree or order for relief in any involuntary case under the Bankruptcy Code; (f) The entry of any final judgment or arbitration award against Trustor that is not paid or stayed pending appeal, or the sequestration or attachment of, or any levy or execution upon (i) any of the Property, (ii) any other collateral provided by Trustor or any other person under this Deed of Trust or as security for performance or payment of the Loan, or (iii) any significant portion of the other assets of Trustor, which is not released, expunged or dismissed prior to the earlier of (10) days after such sequestration, attachment or execution or five (5) days before the sale of any such assets; (g) Trustor shall dissolve, liquidate or wind up its affairs or shall bring any legal action or take any other action contemplating such dissolution, liquidation or winding up; (h) The determination by Beneficiaries that any representation, warranty or statement contained in this Deed of Trust or the Loan Agreement or in any other writing delivered to Beneficiaries in connection with the Loan or the Promissory Note was incomplete, untrue or misleading in any material respect as of the date made; (i) The enactment of any law that deducts from the value of the Property for the purpose of taxation of any lien thereon or imposing upon Beneficiaries the payment of the whole or any part of the taxes, assessments, charges or liens herein required to be paid by Trustor or changing in any way the laws relating to the taxation of deeds of trust or debts secured by deeds of trust or Beneficiaries' interest in the Property or the manner of collection of taxes so as to affect this Deed of Trust or the Loan Agreement or the Promissory Note or 23 the holder thereof or imposing a tax, other than a Federal or state income tax, on or payable by Trustee or Beneficiaries by reason of their ownership of this Deed of Trust, the Loan Agreement or the Promissory Note and, in such event, Trustor, after demand by Beneficiaries, does not pay such taxes or assessments or reimburse Beneficiaries therefor or, in the opinion of counsel for Beneficiaries, it might be unlawful to require Trustor to make such payment or the making of such payment might result in the imposition of interest costs beyond the maximum amount permitted by applicable law; 0) The occurrence of a default by Trustor under any of the contracts and agreements assigned to Beneficiaries under this Deed of Trust, where such default is not cured within the applicable cure period, if any, or the failure of Trustor to diligently enforce its rights and remedies under such contracts and agreements upon the default of any other party thereto; and (k) Trustor acknowledges and agrees that all material non - monetary defaults are conclusively deemed to be and are defaults impairing the security of this Deed of Trust, and that Beneficiaries shall be entitled to exercise any appropriate remedy, including, without limitation, foreclosure of this Deed of Trust, upon the occurrence of any such material non - monetary default. 28. Rights and Remedies on Default Upon the occurrence of any Default or Event of Default under this Deed of Trust and at any time thereafter, Trustee or Beneficiaries may exercise any one or more of the following rights and remedies: (a) Loan Agreement Beneficiaries may exercise any right or remedy provided for in the Loan Agreement or the Promissory Note; (b) Acceleration Beneficiaries may declare the Loan and all other performances or sums secured by this Deed of Trust immediately due and payable; (c) Foreclosure Rights Beneficiaries may declare all performances or sums secured hereby immediately due and payable either by commencing an action to foreclose this Deed of Trust as a mortgage, or by the delivery to Trustee of a written declaration of default and demand for sale and of written notice of default and of election to cause the Property to be sold, which notice Trustee shall cause to be duly filed for record in case of foreclosure by exercise of the power of sale herein. Should Beneficiaries elect to foreclose by exercise of the power of sale herein, Beneficiaries shall also deposit with Trustee this Deed of Trust, the documents evidencing the Loan and any receipts and evidence of expenditures made and secured hereby as Trustee may require, and notice of sale having been given as then required by law and after lapse of such time as may then be required by law after recordation of such notice of default, Trustee, without demand on Trustor, shall sell the Property at the time and place of sale fixed by it in said notice of sale at public auction to the highest bidder upon any terms and conditions specified by Beneficiaries and permitted by applicable law. Trustee may 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 may postpone 24 such sale by public announcement at the time fixed by the preceding postponement. Trustee shall deliver to any purchaser its deed or deeds conveying the Property, or any portion thereof, so sold, but without any covenant or warranty, express or implied. The recitals in such deed or deeds of any matters or facts, shall be conclusive proof of the truthfulness thereof. Any person, including Trustor, Trustee or Beneficiaries, may purchase all or any portion of the Property, as applicable, at sale. (d) Right to Rescind Beneficiaries, from time to time before Trustee's sale, may rescind any such notice of breach or default and of election to cause the Property to be sold by executing and delivering to Trustee a written notice of such rescission, which notice, when recorded, shall also constitute a cancellation of any prior declaration of default and demand for sale. The exercise by Beneficiaries of such right of rescission shall not constitute a waiver of any breach or default then existing or subsequently occurring, or impair the right of Beneficiaries to execute and deliver to Trustee, as above provided, other declarations of default and demand for sale, and notices of breach or default, and of election to cause the Property to be sold to satisfy the obligations hereof, nor otherwise affect any provision, agreement, covenant or condition of the Loan Agreement and/or of this Deed of Trust or any of the rights, obligations or remedies of the parties hereunder. (e) UCC Remedies Beneficiaries shall have all the rights and remedies under this Deed of Trust as a secured party under the California Uniform Commercial Code, including, without limitation, Section 9501(4) thereof. Upon request, Trustor shall assemble and make such collateral available to Beneficiaries at a place to be designated by Beneficiaries that is reasonably convenient to both parties. Upon repossession, Beneficiaries may propose to retain the collateral in partial satisfaction of the Loan or sell the collateral at public or private sale in accordance with the Uniform Commercial Code as adopted in the state where the Property is situated or any other applicable statute. Such sale may be held as a part of, distinctive from or without a trustee's sale or foreclosure of the real property secured by this Deed of Trust. If any notification of disposition of all or any portion of the collateral is required by law, such notification shall be deemed reasonably and properly given, if mailed at least ten (10) days prior to such disposition. If Beneficiaries dispose of all or any part of the collateral after default, the proceeds of disposition shall be applied in the following order: (i) to the reasonable expenses of retaking, holding, preparing for sale, selling the collateral, and the like; (ii) to the reasonable attorneys' fees and legal expenses incurred by Beneficiaries; and (iii) to the satisfaction of the indebtedness secured by this Deed of Trust. (f) Remedial Advances Should Trustor fail to make any payment or to do any act as herein provided, then Beneficiaries or Trustee, without obligation so to do and 25 without demand upon Trustor and without releasing Trustor from any obligation hereof, may (i) make or do the same in such manner and to such extent as either may deem necessary to protect the security hereof, Beneficiaries or Trustee being authorized to enter upon the Property for such purposes; (ii) commence, appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiaries or Trustee, (iii) pay, purchase, contest or compromise any encumbrance, charge, lien, tax or assessment, or the premium for any policy of insurance required herein; and in exercising any such power, incur any liability, expend whatever amounts in its absolute discretion it may deem necessary therefor, including cost of evidence of title, employ counsel and pay such counsel's fees. Beneficiaries shall be subrogated to the rights and lien interests of any person who is paid by Beneficiaries pursuant to the terms of this paragraph. Trustor shall repay immediately on written notice to Trustor all sums expended or advanced hereunder by or on behalf of Beneficiaries, with interest from the date of such advance or expenditure at the rate of 10% per annum, and the repayment thereof shall be secured hereby. (g) Summary Possession Beneficiaries may, at their option, either in person or by agent, employee or court - appointed receiver, enter upon and take possession of the Property and continue any work of improvement, repair or renovation thereof at Trustor's expense and lease the same or any part thereof, making such alterations as it finds necessary, and may terminate in any lawful manner any lease(s) of the Property, exercising with respect thereto any right or option available to the Trustor. The entering upon and taking possession of the Property, the collection of rents, issues and profits, or the proceeds of fire and other insurance policies or compensation or awards for any taking or damage to the Property, and the application or release thereof shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. (h) Collection of Rents Beneficiaries may require any tenant or other user of the Property to make payments of rent or use fees directly to Beneficiaries, regardless of whether Beneficiaries has taken possession of the Property. If any rents are collected by Beneficiaries, then Trustor hereby irrevocably designates Beneficiaries as Trustor's attorney- in-fact to endorse instruments received in payment thereof in the name of Trustor and to negotiate the same and collect the proceeds. Payments by tenants or other users to Beneficiaries in response to Beneficiaries' demand shall satisfy the obligation for which the payments are made, whether or not any proper grounds for the demand existed. Beneficiaries may exercise its rights under this paragraph either in person, by agent or through a receiver. (i) Beneficiaries' Enforcement of Leases Beneficiaries are hereby vested with full power to use all measures, legal and equitable, deemed by it necessary or proper to collect the rents assigned in this Deed of Trust, including the right, in person or by agent, employee or court - appointed receiver, to enter upon the Property, or any part thereof, and take possession thereof forthwith to the extent necessary to effect the cure of any default on the part of Trustor as lessor in any leases or upon Trustor's default under the Loan Agreement. Trustor hereby grants to Beneficiaries full power and authority to exercise all rights, privileges and powers herein granted at any and all times hereafter, without notice to Trustor, including the right to operate and manage the Property, make and amend leases and 26 perform any other acts reasonably necessary to protect the value, priority or enforceability of any security for the obligations of the Trustor under the Loan Agreement and use and apply all of the rents and other income herein assigned to the payment of the costs of exercising such remedies, of managing and operating the Property, and of any indebtedness or liability of Trustor to Beneficiaries, including but not limited to the payment of taxes, special assessments, insurance premiums, damage claims, the costs of maintaining, repairing, rebuilding and restoring any improvements on the Property or of making the same rentable, attorneys' fees incurred in connection with the enforcement of this Deed of Trust, and any principal and interest payments due from Trustor to Beneficiaries under the Loan Agreement, the Promissory Note and this Deed of Trust, all in such order as Beneficiaries may determine. Beneficiaries shall be under no obligation to enforce any of the rights or claims assigned to it hereunder or to perform or carry out any of the obligations of the lessor under any leases and does not assume any of the liabilities in connection with or arising or growing out of the covenants and agreements of Trustor in any leases. It is further understood that this Deed of Trust shall not operate to place responsibility for the control, care, management or repair of the Property, or parts thereof, upon Beneficiaries nor shall it operate to make Beneficiaries liable for the carrying out of any of the terms and conditions of any leases, or for any waste of the Property by the lessee under any leases or by any other party, or for any dangerous or defective condition of the Property or for any negligence in the management, upkeep, repair or control of the Property resulting in loss or injury or death to any lessee, invitee, licensee, employee or stranger, except as may result from the gross negligence or willful misconduct of Beneficiaries after taking possession of the Property hereunder. 0) Beneficiaries' Enforcement of Contracts Beneficiaries shall have the right to enforce Trustor's rights under all architect, engineering, construction and related contracts and to bring an action for the breach thereof in the name of Beneficiaries or, at Beneficiaries' option, in the name of Trustor, in the event any architect, engineer, contractor or other party breaches their respective contract or contracts, regardless of whether Beneficiaries acquires or retains any interest in the Property. Trustor hereby irrevocably appoints Beneficiaries as its attomey -in -fact for the purposes of the foregoing, which power shall be durable and coupled with an interest. Beneficiaries do not assume and shall not be obligated to perform any of Trustor's obligations under said contracts nor shall Beneficiaries be required to enforce such contracts or bring action for the breach thereof, provided; however, any performance of the respective contracts specifically required by the Beneficiaries in writing, following any default by Trustor under the Loan Agreement or the contracts, and which is properly and timely undertaken by the contractor, engineer or architect, shall be paid for by the Beneficiaries in accordance with the terms and conditions of the contracts. Such payments shall be deemed additions to the amounts owed by Trustor to the Beneficiaries under the Loan Agreement and Promissory Note and secured by this Deed of Trust and shall bear interest at the rate of 10% per annum from the date of advance to and including the date of full payment, and shall be secured by any deed of trust, collateral assignment of leases and rents, security agreement and other documents granted to secure the Loan. `4A (k) Appointment of Receiver Beneficiaries have the right to have a receiver appointed to take possession of any or all of the Property, with the power to protect and preserve the Property, to operate the Property preceding foreclosure or sale, to collect the income from the Property and apply the proceeds, over and above the cost of the receivership, against the Loan. The receiver may serve without bond, if permitted by law. Beneficiaries' right to the appointment of a receiver shall exist whether or not the apparent value of the Property exceeds the indebtedness secured hereby by a substantial amount. Employment by Beneficiaries shall not disqualify a person from serving as a receiver. Upon taking possession of all or any part of the Property, the receiver or Beneficiaries may: (i) use, operate, manage, control and conduct business on the Property and make expenditures for all maintenance and improvements as in its judgment are necessary and proper; (ii) collect the income from the Property and apply such sums to the expenses of use, operation and management; and (iii) at Beneficiaries' option, complete any construction in progress on the Property, and in that connection pay bills, borrow funds, employ contractors and make any changes in plans or specifications as Beneficiaries deems reasonably necessary or appropriate. If the revenues produced by the Property are insufficient to pay expenses, the receiver may borrow, from Beneficiaries or otherwise, as Beneficiaries may deem reasonably necessary for the purposes stated in this paragraph. The amounts borrowed or advanced shall be payable on demand and bear interest from the date of expenditure until repaid at the rate of 10% per annum. Such sums shall become a part of the debt secured by this Deed of Trust. (1) Specific Enforcement Beneficiaries may specifically enforce any covenant in this Deed of Trust or the Trustor's compliance with its warranties herein and may restrain and enjoin the breach or prospective breach of any such covenant or the noncompliance with any condition and Trustor waives any requirement of the posting of any bond in connection therewith. (m) General Creditors - Remedies Beneficiaries shall have such other rights and remedies as are available under any statute or at law or in equity, generally, and the delineation of certain remedies in this Deed of Trust shall not be deemed in limitation thereof. 29. Application of Sale Proceeds After deducting all costs and expenses of Trustee and of this Deed of Trust, including cost of evidence of title and reasonable attorneys' fees in connection with sale, as above set forth, Trustee shall apply the proceeds of sale to payment of all sums expended under the terms hereof, not then repaid, with accrued interest at the rate of 10% per annum; all other sums then secured hereby; and the remainder, if any, to the Beneficiaries and any other person or persons legally entitled thereto. 30. Remedies Cumulative No remedy herein conferred upon or reserved to Trustee or Beneficiaries is intended to be exclusive of any other remedy provided herein or under the Loan Agreement or the Promissory Note, or otherwise by law provided or permitted, or provided in any guaranty given in connection with the Loan, but each shall be cumulative and shall be in addition to every other remedy. Every power or remedy given by this instrument to Trustee or Beneficiaries or to which either of them may be otherwise entitled, may be exercised concurrently or 28 independently, from time to time and as often as may be deemed expedient by Trustee or Beneficiaries and either of them may pursue inconsistent remedies. 31. No Waiver No waiver of any default or failure or delay to exercise any right or remedy by Beneficiaries shall operate as a waiver of any other default or of the same default in the future or a preclusion of any right or remedy with respect to the same or any other occurrence. 32. Marshaline In case of a sale under this Deed of Trust, the Property, real, personal and mixed, may be sold in one parcel. Neither Trustee nor Beneficiaries shall be required to marshal Trustor's assets. 33. SUBMISSION TO JURISDICTION (A) TRUSTOR, TO THE FULLEST EXTENT PERMITTED BY LAW, HEREBY KNOWINGLY, INTENTIONALLY AND VOLUNTARILY, WITH AND UPON THE ADVICE OF COMPETENT COUNSEL, (A) SUBMITS TO PERSONAL JURISDICTION IN THE STATE OF CALIFORNIA OVER ANY SUIT, ACTION OR PROCEEDING BY ANY PERSON ARISING FROM OR RELATING TO THIS DEED OF TRUST, (B) AGREES THAT ANY SUCH ACTION, SUIT OR PROCEEDING MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION SITTING IN LOS ANGELES COUNTY, CALIFORNIA, (C) SUBMITS TO THE JURISDICTION OF SUCH COURTS, AND, (D) TO THE FULLEST EXTENT PERMITTED BY LAW, AGREES THAT IT WILL NOT BRING ANY ACTION, SUIT OR PROCEEDING IN ANY FORUM OTHER THAN LOS ANGELES COUNTY, CALIFORNIA (BUT NOTHING HEREIN SHALL AFFECT THE RIGHT OF BENEFICIARIES TO BRING ANY ACTION, SUIT OR PROCEEDING IN ANY OTHER FORUM). TRUSTOR FURTHER CONSENTS AND AGREES TO SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER LEGAL PROCESS IN ANY SUCH SUIT, ACTION OR PROCEEDING BY REGISTERED OR CERTIFIED U.S. MAIL, POSTAGE PREPAID, TO THE TRUSTOR AT THIN ADDRESS FOR NOTICES DESCRIBED HEREIN, AND CONSENTS AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE IN EVERY RESPECT VALID AND EFFECTIVE SERVICE (BUT NOTHING HEREIN SHALL AFFECT THE VALIDITY OR EFFECTIVENESS OF PROCESS SERVED IN ANY OTHER MANNER PERMITTED BY LAW). (B) TRUSTOR, TO THE FULLEST EXTENT PERMITTED BY LAW, HEREBY KNOWINGLY, INTENTIONALLY AND VOLUNTARILY, WITH AND UPON THE ADVICE OF COMPETENT COUNSEL, WAIVES, RELINQUISHES AND FOREVER FORGOES THE RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, ARISING OUT OF, OR IN ANY WAY RELATING TO THIS DEED OF TRUST OR ANY CONDUCT, ACT OR OMISSION OF BENEFICIARIES OR TRUSTOR, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE. 34. Trustor's Indemnification Trustor agrees to indemnify and hold harmless Trustee and Beneficiaries from and against any and all losses, liabilities, penalties, claims, charges, 29 costs and expenses (including attorneys' fees and disbursements) (the "Losses ") that may be imposed on, incurred or paid by or asserted against Trustee and/or Beneficiaries by reason or on account of, or in connection with: (a) any default by Trustor hereunder or under the Loan Agreement; (b) Trustee's and/or Beneficiaries' good faith and commercially reasonable exercise of any of their rights and remedies or the performance of any of their duties hereunder or under any other documents to which Trustor is a party; (c) the construction, reconstruction or alteration of the Property; (d) any negligence, willful misconduct or failure to act of Trustor, or any negligence, willful misconduct or failure to act of any lessee of the Property, or any of their respective agents, contractors, subcontractors, servants, employees, licensees or invitees; or (e) any accident, injury, death or damage to any person or property occurring in, on or about the Property or any street, drive, sidewalk, curb or passageway adjacent thereto, except for the willful misconduct or gross negligence of the indemnified person. Any amount payable to Trustee, Beneficiaries or counsel for Beneficiaries under this paragraph shall be due and payable within ten (10) days after demand therefor and receipt by Trustor of a statement from Trustee, Beneficiaries and/or counsel for Beneficiaries setting forth in reasonable detail the amount claimed and the basis therefor, and such amounts shall bear interest at the rate of 10% per annum from and after the date such amounts are paid by Beneficiaries, Trustee or counsel for Beneficiaries, until paid in full by Trustor. Trustor's obligations under this paragraph shall not be affected by the absence or unavailability of insurance covering the same or by the failure or refusal by any insurance carrier to perform any obligation on its part under any such policy of insurance. If any claim, action or proceeding is made or brought against Trustor and/or Beneficiaries that is subject to the indemnity set forth in this paragraph, Trustor shall resist or defend against the same, if necessary, in the name of Trustee and/or Beneficiaries, with attorneys for Trustor's insurance carrier (if the same is covered by insurance) or otherwise by attorneys approved by Beneficiaries. Notwithstanding the foregoing, Trustee and Beneficiaries, in their reasonable discretion, may engage their own attorneys to resist or defend, or assist therein, and Trustor shall pay, or, on demand, shall reimburse Trustee and Beneficiaries for the payment of the reasonable fees and disbursements of said attorneys. The indemnity provided for herein shall survive Trustor's payment of the Loan secured by this Deed of Trust and foreclosure, whether by judicial foreclosure, power of sale pursuant to this Deed of Trust or by deed in lieu of foreclosure. 35. Attorneys' Fees; Costs Trustor agrees to reimburse Beneficiaries for all costs, expenses expert witness and consulting fees and reasonable attorneys' fees that Beneficiaries incur in connection with the realization or enforcement of any obligation or remedy contained in this Deed of Trust, the Loan Agreement or the Promissory Note, with or without litigation, including without limitation any costs, expenses and fees incurred: (a) on appeal; (b) in any arbitration or mediation; (c) in any action contesting or seeking to restrain, enjoin, stay, or postpone the exercise of any remedy in which Beneficiaries prevails; (d) in any bankruptcy, probate, receivership or other proceeding involving Trustor; and (e) in connection with all negotiations, documentation, and other actions relating to any work -out, compromise, settlement or satisfaction of the debt secured hereby or settlement of any covenants and obligations secured by this Deed of Trust or set forth in the Loan Agreement or the Promissory Note. All such costs, expenses and fees shall be due and payable upon demand, shall bear interest from the date incurred through the date of collection at the rate of 10% per annum, and shall be secured by this Deed of Trust. 30 36. Acceptance by Trustee Trustee accepts this Trust when this Deed of Trust, duly executed and acknowledged, is made a public record, as provided by law. 37. Successor Trustee Trustee may resign by an instrument in writing addressed to Beneficiaries, or Trustee may be removed at any time with or without cause by an instrument in writing executed by Beneficiaries and duly recorded. In case of the death, resignation, removal or disqualification of Trustee or if for any reason Beneficiaries shall deem it desirable to appoint a substitute or successor trustee to act instead of Trustee herein named or any substitute or successor trustee, then Beneficiaries shall have the right and is hereby authorized and empowered to appoint a successor trustee, or a substitute trustee, without other formality than appointment and designation in writing executed and acknowledged by Beneficiaries and the recordation of such writing in the office where this Deed of Trust is recorded, and the authority hereby conferred shall extend to the appointment of other successor and substitute trustees successively. Such appointment and designation by Beneficiaries shall be full evidence of the right and authority to make the same and of all facts therein recited. If such appointment is executed on behalf of Beneficiaries by an officer of Beneficiaries, such appointments shall be conclusively presumed to be executed with authority and shall be valid and sufficient without proof of any action by the Trustee or any officer of Beneficiaries. Upon the making of such appointment and designation, all of the estate and title of Trustee in the Property shall vest in the named successor or substitute trustee and it shall thereupon succeed to and shall hold, possess and execute all the rights, powers, privileges, immunities and duties herein conferred upon Trustee; but, nevertheless, upon the written request of Beneficiaries or of the successor substitute trustee, the Trustee shall execute and deliver an instrument transferring to such successor or substitute trustee all of the estate and title in the Property of the trustee so ceasing to act, together with all the rights, powers, privileges, immunities and duties herein conferred upon Trustee, and shall duly assign, transfer and deliver any of the properties and moneys held by the Trustee hereunder to said successor or substitute trustee. All references herein to Trustee shall be deemed to refer to any trustee (including any successor or substitute, appointed and designated, as herein provided) from time to time acting hereunder. Trustor hereby ratifies and confirms any and all acts that Trustee herein named or its successor or successors, substitute or substitutes, in this Deed of Trust, shall do lawfully by virtue hereof. 38. Reconveyance Upon written request of Beneficiaries, stating that all performances and sums secured hereby have been satisfied and paid, and upon surrender of this Deed of Trust to Trustee for cancellation and retention, and upon payment of its fees, Trustee shall reconvey, without warranty, the Property then held hereunder. The recitals in any reconveyance executed under this Deed of Trust of any matters or facts shall be conclusive proof of the truthfulness thereof. The grantee in such reconveyance may be described as "the person or persons legally entitled thereto." 39. No Releases The Property shall not be released from the lien of this Deed of Trust and no person shall be released from liability under the Loan Agreement or any other obligation secured hereby, except in the manner herein specified. Without affecting the liability of any other person for the payment and performance of any obligation herein mentioned (including Trustor should it convey said Property) and without affecting the lien or priority hereof upon any Property not released, Beneficiaries may, without notice, release any person so liable, extend the maturity or frill maturity or modify the terms of any such obligation, grant other indulgences, make future or other advances to Trustor or any one or more parties comprising Trustor, assign or in any manner transfer this Deed of Trust, release or reconvey or cause to be released or reconveyed at any time all or part of the said Property described herein, take or release any other security or make compositions or other arrangements with debtors. Beneficiaries may also accept additional security, either concurrently herewith or thereafter, and sell same or otherwise realize thereon, either before, concurrently with, or after sale hereunder. 40. Beneficiaries Consent At any time, upon written request of Trustor, Trustor's payment of Beneficiaries' fees and presentation of this Deed of Trust (in case of full reconveyance, for cancellation and retention), without affecting the liability of any person for the payment of the indebtedness, Beneficiaries may: (a) consent to the making of any map or plat of said Property; (b) join in granting any easement or creating any restriction thereon, (c) join in any other agreement affecting this Deed of Trust or the lien or charge thereof, and (d) reconvey, without warranty, all or any part of the Property. 41. jRESERVED NO TEXT] 42. Further Assurances Trustor, from time to time, within fifteen (15) days after request by Beneficiaries, shall execute, acknowledge and deliver to Beneficiaries, such chattel mortgages, security agreements or other similar security instruments, in form and substance reasonably satisfactory to Beneficiaries, covering all property of any kind whatsoever owned by Trustor or in which Trustor has any interest which, in the reasonable opinion of Beneficiaries, is essential to the operation of the Property covered by this Deed of Trust. Trustor shall further, from time to time, within fifteen (15) days after request by Beneficiaries, execute, acknowledge and deliver any financing statement, renewal, affidavit, certificate, continuation statement or other document as Beneficiaries may reasonably request in order to perfect, preserve, continue, extend or maintain the security interest under, and the priority of, this Deed of Trust and the priority of each such chattel mortgage or other security instrument. Trustor further agrees to pay to Beneficiaries on demand all reasonable costs and expenses incurred by Beneficiaries in connection with the preparation, execution, recording, filing and refiling of any such instrument or document, including the charges for ex aminin g title and the attorneys' fees for rendering an opinion as to priority of this Deed of Trust and of such chattel mortgage or other security instrument as a valid and subsisting lien. However, neither a request so made by Beneficiaries, nor the failure of Beneficiaries to make such request shall be construed as a release of such Property, or any part thereof, from the conveyance of title under this Deed of Trust, it being understood and agreed that this covenant and any such chattel mortgage, security agreement or other similar security instrument delivered to Beneficiaries are cumulative and given as additional security. 43. Time of Performance Time is of the essence hereof in connection with all obligations of the Trustor herein and under the Loan Agreement and Promissory Note. 44. Notices The undersigned Trustor requests that a copy of any Notice of Default or Notice of Sale hereunder be mailed to it at its address as hereinbefore set forth. Any notices to be given to Trustor by Beneficiaries hereunder shall be sufficient, if personally delivered or 32 or mailed, postage prepaid, to the address of the Trustor stated hereinabove, or to such other address that Trustor has requested in writing to Beneficiaries. Any time period provided in the giving of any notice hereunder shall commence upon the date such notice is delivered or deposited with the United States Postal Service for delivery by regular first -class postage pre -paid mail, as officially recorded on the certified mail receipt. 45. Beneficiaries' Right to Inspect Beneficiaries and their agents and representatives may enter upon the Property at all reasonable times to attend to Beneficiaries' interest and to inspect the Property. 46. Reports and Statements Trustor shall deliver to Beneficiaries, within ninety (90) days after the end of each of Trustor's fiscal years, and within twenty (20) days after Beneficiaries' request, following an Event of Default, reasonably detailed operating statements and occupancy reports in a form satisfactory to Beneficiaries covering the Property, both certified as correct by Trustor. At Beneficiaries' option, after an Event of Default, such operating statements shall be prepared by an independent certified public accountant at Trustor's expense. If Beneficiaries so request, such statements shall specify, in addition to other information requested by Beneficiaries, the rents and profits received from the Property, the disbursements made for such period, the names of the tenants of the Property and a summary of the terns of the respective leases or the rental arrangements. Trustor shall permit Beneficiaries or their representative to examine all books and records pertaining to the Property, and shall deliver to Beneficiaries all financial statements, credit reports, and other documents pertaining to the financial condition and obligations of Trustor and any tenants of the Property, and rental, income, and expense statements, audits, and tax returns relating to the Property. 47. Assignment by Beneficiaries: Participation Beneficiaries may assign this Deed of Trust in whole or in part to any person and may grant participations in any of its rights under this Deed of Trust, without notice and without affecting Trustor's liability under this Deed of Trust. In connection with any proposed assignment, participation or similar arrangement, Beneficiaries may make available to any person all credit and financial data famished or to be furnished to Beneficiaries by Trustor. Trustor agrees to provide to the person designated by Beneficiaries any information as such person may reasonably require to form a decision regarding the proposed assignment, participation or other arrangement. Trustor may not assign this Deed of Trust to any person at any time, except in connection with a transaction approved in writing by Beneficiaries, under the terms of this Deed of Trust. 48. [RESERVED NO TEXT] 49. Legal Relationships The relationship between Beneficiaries and Trustor is similar to that of lender and borrower, and no partnership, joint venture, or other similar relationship shall be inferred from this Deed of Trust. Trustor shall not have the right or authority to make representations, to act, or to incur debts or liabilities on behalf of Beneficiaries. Trustor is not executing this Deed of Trust as an agent or nominee for an undisclosed principal, and no third party beneficiaries are or shall be created by the execution of this Deed of Trust, other than by the assignment by Beneficiaries of this Deed of Trust. 33 50. [RESERVED NO XTI 51. Modification This Deed of Trust may be amended, modified, changed or varied only by a written agreement signed by all of the parties hereto. No requirement of this Deed of Trust may be waived, at any time, except in a writing signed by Beneficiaries and any such waiver shall be effective only as to its terms and on a single occasion. Neither, Beneficiaries' delay or omission in exercising any right, power or remedy under this Deed of Trust upon default of Trustor nor Beneficiaries' failure to insist upon strict performance of any of the covenants or agreements contained in this Deed of Trust shall be construed as a waiver of any such right, power, remedy, covenant or agreement or as an acquiescence in Trustor's breach or default. 52. Successors Subject to the prohibitions against Trustor's assignments herein, this Deed of Trust shall inure to the benefit of and bind all of the parties, their successors, estates, heirs, personal representatives and assigns. 53. Partial Invalidity If a court of competent jurisdiction finally determines that any provision of this Deed of Trust is invalid or unenforceable, the court's determination shall not affect the validity or enforceability of the remaining provisions of this Deed of Trust. In such event, this Deed of Trust shall be construed as if it did not contain the particular provision that was determined to be invalid or unenforceable. No such determination shall affect any provision of this Deed of Trust to the extent that it is otherwise enforceable under the laws of any other applicable jurisdiction. 54. Mutual Negotiation Beneficiaries and Trustor confirm that they have mutually negotiated this Deed of Trust and that none of the terms or provisions of this Deed of Trust shall be construed against either party. 55. Paragraph Headings The paragraph headings are for convenience only and in no way define, limit, extend, or describe the scope or intent of this Deed of Trust or any of its provisions. 56. Applicable Law This Deed of Trust and the rights of the parties hereunder shall be governed by, construed and enforced in accordance with the laws of the State of California. 57. Entire Agreement This Deed of Trust, including any exhibits or addenda, contains the entire agreement of the parties with respect to the subject matter hereof 58. Counterparts This Deed of Trust may be executed in two or more counterparts, all of which together shall constitute one and the same instrument and lien. The signature pages of exact copies of this Deed of Trust may be attached to one copy to form one complete document. Additional copies of this Deed of Trust may be executed in counterparts and recorded in two or more counties, all of which shall constitute one and the same instrument and lien. 34 59. Fixture Filing and Recording This Deed of Trust constitutes a financing statement filed as a fixture filing under California Commercial Code Section 9502(c), as amended or recodified from time to time. This Deed of Trust is to be recorded in the real estate records of Los Angeles County, California, and covers goods that are, or are to become, fixtures. 60. Survival of Representations and Warranties All of Trustor's representations and wan-antics contained in this Deed of Trust shall be true and correct at all times during the term of the Loan secured hereby, until performance of all obligations set forth in the Loan Agreement and in the Promissory Note or, alternatively, full repayment of the Loan and release and reconveyance of this Deed of Trust. IN WITNESS WHEREOF, Trustor hereby duly executes this Deed of Trust and Assignment of Rents as of the day and year first above written. TRUSTOR Rio Hondo Community Development Corporation, a California public benefit corporation !A LE [NOTARY JURAT ATTACHED] 35 EXHIBIT A LEGAL DESCRIPTION OF THE PROPERTY Subject Address: 8628 Landis View Lane (1 SFD unit on lot) Legal Description: TRACT NO 701 LOT COM S 89 56' FT FROM SW COR OF LOT 1 P M 20-65 TH N 0 04'W TO S LINE OF LANDISVIEW LANE TH W THEREON 56 FT TH S 0 04' E TO A PT S 89 56' W FROM BEG TH N 89 56' E 56 FT TO LOT 49 City: Rosemead County: Los Angeles State: California Zip Code: 91770 -3724 Census Tract: 4824.02 Map Reference: 46 -1 APN: 5281- 032 -033 ;6 ATTACHMENT D Recording Requested By WHEN RECORDED MAIL TO CITY OF ROSEMEAD Attention: Michelle Ramirez 8838 E. Valley Boulevard Rosemead, California 91770 DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS, FIXTURE FILING AND SECURITY AGREEMENT (RIO HONDO CDC: RENTAL HOUSING PROPERTY) THIS DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS, FIXTURE FILING AND SECURITY AGREEMENT ( "Deed of Trust") is made as of March 22, 2010, by the Rio Hondo Community Development Corporation, a California public benefit corporation (hereinafter referred to as "Trustor "), whose address is 11401 Valley Boulevard, Suite 201, El Monte, California 91731, to United Title Company, whose address is 500 North Brand Boulevard, Suite 1150, Glendale, California 91203 (hereinafter referred to as "Trustee "), for the benefit of the City of Rosemead, a municipal corporation ( "City "), and the Rosemead Community Development Commission, a public entity ("CDC" and, collectively with City, herein called `Beneficiaries "), whose address is 8838 E. Valley Boulevard, Rosemead, California 91770. FOR GOOD AND VALUABLE CONSIDERATION, including the indebtedness herein recited and the trust herein created, the receipt of which is hereby acknowledged, and for the purpose of securing, in such priority as Beneficiaries may elect, each of the following: 1. The due, prompt and complete payment, observance, performance and discharge of each and every obligation, covenant and agreement contained in that certain Promissory Note (the "Promissory Note ") of even date herewith evidencing a loan (the "Loan ") in the principal amount not to exceed Four Hundred Twenty-Eight Thousand Four Hundred Dollars ($428,400), executed by Trustor, as maker, to the order of Beneficiaries and any and all modifications, extensions or renewals thereof, whether hereafter evidenced by the Promissory Note or otherwise; and 2. The payment of all other sums, with interest thereon at the rate of interest, if any, provided for herein or in the Promissory Note, becoming due or payable under the provisions of this Deed of Trust, the 2011 Affordable Housing Development Loan Agreement (the "Loan Agreement') dated as of March 22, 2010, by and between Trustor and the Beneficiaries or any other document or instrument heretofore or hereafter executed by Trustor having reference to or arising out of or securing the indebtedness represented by the Promissory Note; and 3. The payment of such additional sums and interest thereof which may hereafter be loaned to Trustor, or its successors or assigns, by Beneficiaries, whether or not evidenced by a promissory note or notes which are secured by this Deed of Trust; and 4. The due, prompt and complete observance, performance and discharge of each and every obligation, covenant and agreement of Trustor contained in the Loan Agreement, the Promissory Note, this Deed of Trust or any other document or instrument heretofore or hereafter executed by Trustor having reference to or arising out of or securing the indebtedness represented by the Promissory Note (collectively, the "Loan Documents "). TRUSTOR DOES HEREBY irrevocably grant, transfer, bargain, sell, convey and assign to Trustee, in trust, with power of sale and right of entry and possession, and does grant to Beneficiaries a security interest for the benefit and security of Beneficiaries under and subject to the terms and conditions hereinafter set forth, in and to any and all of the following described property which is (except where the context otherwise requires) herein collectively called the "Property" whether now owned or held or hereafter acquired and wherever located, including any and all substitutions, replacements and additions to same: (a) That certain real property located in Los Angeles County, State of California, and more particularly described in Exhibit " A " , attached hereto and incorporated herein by this reference (the "Real Property"), together with all of the easements, rights, privileges, franchises, appurtenances thereunto belonging or in any way appertaining to the real property, including specifically but not limited to all appurtenant water, water rights and water shares or stock of Trustor, any and all general intangibles relating to the use and/or development of the real property, including development allotments, governmental permits, approvals, authorizations and entitlements, agreements to provide necessary utility or municipal services, all engineering plans and diagrams, surveys and/or soil and substrata studies, and all other rights, privileges and appurtenances related to the said real property and all of the estate, right, title, interest, claim and demand whatsoever of Trustor therein or thereto, either in law or in equity, in possession or in expectancy, now owned or hereafter acquired; (b) All structures, buildings and improvements of every kind and description now or at any time hereafter located on the Real Property (hereinafter referred to as the "Improvements "), including all equipment, apparatus, machinery, fixtures, fittings, and appliances and other articles and any additions to, substitutions for, changes in or replacements of the whole or any part thereof, now or at any time hereafter affixed or attached to and which are an integral part of the Improvements or any portion thereof, and such Improvements shall be deemed to be fixtures and an accession to the freehold and a part of the Real Property as between the parties hereto and all persons claiming by, through or under such parties; (c) All articles of tangible personal property and any additions to, substitutions for, changes in or replacements of the whole or any part thereof (other than personal property which is or at any time has become toxic waste, waste products or hazardous substances), including without limitation all installations, shelving, partitions, door -tops, vaults, awnings, window shades, venetian blinds, light fixtures, fire hoses and brackets and boxes for the same, fire sprinklers, alarm systems, drapery rods and brackets, screens, water heaters, wall coverings, carpeting, linoleum, tile, other floor coverings of whatever description, communication systems, all specifically designed installations and furnishings, office maintenance and other supplies and all of said articles of property, the specific 2 property, the specific enumerations herein not excluding the general, now or at any time hereafter placed upon or used in any way in connection with the ownership, operation or maintenance of the Real Property or the Improvements or any portion thereof and owned by Trustor or in which Trustor now has or hereafter acquires an interest, and all building materials and equipment now or hereafter delivered to the Real Property and intended to be installed or placed in or about the Improvements. Such tangible, personal property shall, in addition to all other tangible, personal property herein described or defined, specifically include each and every item of tangible, personal property and any substitutions for, changes in or replacements thereof which are used in the operation of the Improvements. Notwithstanding the breadth of the foregoing, the Real Property shall not include (i) personal property which may be owned by lessees or other occupants of the Real Property; (ii) inventory of any lessee or occupant of the Real Property used in the normal course of the business conducted thereon; (iii) material, equipment, tools, machinery, or other personal property which is brought upon the Real Property only for use in construction, maintenance or repair and which is not intended to remain after the completion of such construction, maintenance or proper maintenance, of the Real Property; (d) All right, title and interest of Trustor, now owned or hereafter acquired in and to and lying within the right -of -way of any street, road, alley or public place, opened or proposed, vacated or extinguished by law or otherwise, and all easements and rights of way, public or private, tenements, hereditaments, appendages, rights and appurtenances how or hereafter located upon the Real Properthy or now or hereafter used in connection with or now or hereafter belonging or appertaining to the Real Property; and all right, title and interest in the Trustor, now owned or hereafter acquired, in and to any strips and gores adjoining or relating to the Real Property; (e) All judgments, awards of damages, settlements and any and all proceeds derived therefrom hereafter made as a result of or in lieu of any taking of the Real Property or any part thereof, interest therein or any rights appurtenant thereto under the power of eminent domain, or by private or other purchase in lieu thereof, or for any damage (whether caused by such taking or otherwise) to the Real Properthh or the Improvements thereon, including change of grade of streets, curb cuts or other rights of access for any public or quasi- public use or purpose under any law; (f) All rents, incomes, issues and profits, revenues, royalties, bonuses, rights, accounts, contract rights, insurance policies and proceeds thereof, general intangibles and benefits of the Real Property, or arising from any lease or similar agreement pertaining thereto and all right, title and interest of Trustor in and to all leases of the Real Property now or hereafter entered into and all right, title and interest of Trustor thereunder, including, without limitation, cash or securities deposited thereunder to secure performance by the lessees of their obligations thereunder, whether said cash or securities are to be held until the expiration of the terms of said leases or applied to one or more of the installments of rent coming due immediately prior to the expiration of said terms with the right to receive and apply the same to said indebtedness, and Trustee or Beneficiaries may demand, sue for and recover such payments but shall not be required to do so; and (g) All proceeds of the conversion, voluntary or involuntary, of any of the foregoing into cash or liquidated claims. Trustor makes the foregoing grant to Trustee for the purposes herein set forth; provided, however, that if the Trustor shall pay or cause to be paid to the holder of the Promissory Note all amounts required to be paid under the provisions of the Promissory Note, this Deed of Trust and any other Loan Documents, and at the time and in the manner stipulated therein, and shall further pay or cause to be paid all other sums payable hereunder and all indebtedness hereby secured, then, in such case, the estate, right, title and interest of the Trustee and Beneficiaries in the Property shall cease, determine and become void, and upon proof being given to the satisfaction of the Beneficiaries that all amounts due to be paid under the Promissory Note have been paid or satisfied, and upon payment of all fees, costs, charges, expenses and liabilities chargeable or incurred or to be incurred by Trustee or Beneficiaries, and of any other sums as herein provided, the Trustee shall, upon receipt of the written request of the Beneficiaries, cancel, reconvey and discharge this Deed of Trust. TO HAVE AND TO HOLD THE MORTGAGED PROPERTY UNTO THE TRUSTEE ITS SUCCESSORS AND ASSIGNS FOREVER, ALL IN ACCORDANCE WITH THE PROVISIONS HEREOF. To protect the security of this Deed of Trust, Trustor agrees: I. Trustor's Covenant of Payment Trustor shall perform all of its obligations under the Loan Agreement, the Promissory Note and this Deed of Trust when due, without excuse or delay of any kind whatsoever, except as expressly provided herein or therein, and Trustor shall pay the Loan and all other debts and monies secured by this Deed of Trust when due, without set off or deduction of any kind. 2. Trustor's Warranties of Title Trustor warrants to Beneficiaries that it is the sole holder of fee simple absolute title to all of the Property and that said title is marketable and free from any lien or encumbrance, except (a) as otherwise provided in this section, (b) those approved in writing by Beneficiaries, and (c) the liens imposed by law for nondelinquent real property taxes and assessments. Trustor further covenants and agrees as follows: that Trustor will keep the Property free from all liens of any kind, including, without limitation, statutory and governmental; that no lien superior or junior to this Deed of Trust will be created or suffered to be created by Trustor during the life of this Deed of Trust without Beneficiaries' prior written consent, that Trustor has good right to make this Deed of Trust and the person or persons executing this Deed of Trust on behalf of Trustor has or have the authority to do so; and that Trustor will forever warrant and defend Beneficiaries' interest in the Property against every person, whomsoever, claiming any right or interest in the Property or any part thereof. 3. Trustor's Right to Contest Statutory Liens As used herein the words "mechanic's lien" and "materialman's lien" mean and include a stop notice as this term is defined in California Civil Code Section 3179, et seq. The filing of a mechanic's or materialman's lien against the Property or a stop notice against the Trustor or the Beneficiaries and/or funds held by or owed to the Trustor for the improvement of the Property shall not constitute a default hereunder, if and so long as (a) no defaults exist under the Loan Agreement, this Deed of Trust or the Promissory Note; (b) within fifteen (15) days after filing of such lien, Trustor obtains and maintains in effect a bond issued by a California admitted surety acceptable to Beneficiaries in an amount not less than 125% of the entire sum alleged to be owed to the lien claimant or such other amount as is required to obtain a court order to release said lien of record; (c) Trustor provides to Beneficiaries and pays for an endorsement to Beneficiaries' title insurance policy, in a form satisfactory to Beneficiaries, which insures the priority of this Deed of Trust over the lien being contested; (d) Trustor immediately commences its contest of such lien and continuously pursues the same in good faith and with due diligence; (e) such bond or contest stays the foreclosure of the lien; and (f) Trustor pays in full any judgment rendered for the lien claimant within ten (10) days following entry of any such judgment. 4. (RESERVED — NO TEXT 5. Maintenance and Inspection of Improvements Trustor shall maintain the Improvements now or hereafter constituting a part of the Property in a good and reasonable condition and state of repair. Trustor shall not commit or suffer any waste respecting the Property; shall promptly comply with all requirements of federal, state and municipal authorities and all other laws, ordinances, regulations, covenants, conditions and restrictions respecting the Property or the use thereof, and shall pay all fees or charges of any kind in connection therewith. 6. Construction and Repairs Trustor shall complete or restore promptly and in a good and workmanlike manner any Improvements that may now or hereafter be constructed, damaged or destroyed on the Property, and pay when due all costs incurred therefor. 7. Alterations No Improvements shall be structurally altered, removed or demolished without the Beneficiaries' prior written consent, nor shall any fixture or chattel covered by this Deed of Trust and adapted to the proper use and enjoyment of the Property be removed at any time without Beneficiaries' prior written consent, unless actually replaced by an article of equal suitability and value, owned by the Trustor, free and clear of any lien or security interest, except such as may be approved in writing by the Beneficiaries. S. Compliance With Laws Trustor shall comply with all statutes, laws, ordinances and regulations which now or hereafter pertain to the construction, repair, condition, use and occupancy of the Property, including, without limitation, all environmental, subdivision, zoning, building code, fire, occupational, health, safety, occupancy and other similar or dissimilar statutes, and shall not permit any tenant or other occupant to violate the same. If any statute or order of any court of competent jurisdiction requires any correction, alteration or retrofitting of any Improvements constituting a part of the Property, Trustor shall promptly undertake the required repairs and restoration and complete the same with due diligence at its sole cost and expense. 9. Environmental Covenants. Representations. Warranties and Indemnity (a) Trustor will not use any Hazardous Materials (as defined herein below) in the construction of any Improvements constituting a part of the Property. (b) Trustor shall, at its sole expense, comply and cause each tenant leasing space within any Improvements to comply with all applicable laws, regulations, codes and ordinances 5 relating to any Hazardous Materials or to any Environmental Activities (as defined below), including, without limitation, obtaining, filing, serving or posting all applicable notices, permits, licenses and similar authorizations. Trustor shall establish and maintain a management and operating policy for the Real Property and Improvements to assure and monitor continued compliance by Trustor and each tenant leasing space in the Improvements with all such laws, regulations, codes and ordinances. (c) Trustor agrees to submit from time to time, if requested by Beneficiaries, a report, satisfactory to Beneficiaries, certifying that the Real Property and Improvements and each part thereof is not then being used nor has it ever been used for any Environmental Activities. Beneficiaries reserve the right, in their reasonable discretion, to retain, at Trustor's expense, an independent professional consultant to review any report prepared by Trustor and/or to conduct its own investigation of the Real Property and Improvements, or any part thereof, for Hazardous Materials. Trustor hereby grants to Beneficiaries, their agents, employees, consultants and contractors the right to enter upon the Real Property and Improvements to perform such tests as are reasonably necessary to conduct such a review and/or investigation. (d) Upon the discovery by Trustor of any event or situation which would render any of the representations or warranties contained in subparagraph 9(g) hereof inaccurate in any respect, if made at the time of such discovery, Trustor shall promptly notify Beneficiaries of such event or situation and, within thirty (30) days after such discovery, submit to Beneficiaries a preliminary written environmental plan setting forth a general description of such event or situation and the action that Trustor proposes to take with respect thereto. Within sixty (60) days after such discovery, Trustor shall submit to Beneficiaries a final written environmental report, setting forth a detailed description of such event or situation and the action that Trustor proposes to take with respect thereto, including, without limitation, any proposed corrective work, the estimated cost and time of completion, the name of the contractor and a copy of the construction contract, if any, and such additional data, instruments, documents, agreements or other materials or information as Beneficiaries may reasonably request. The plan shall be subject to Beneficiaries' written approval, which approval may be granted or withheld in Beneficiaries' sole but reasonable discretion. Beneficiaries shall notify Trustor in writing of its approval or disapproval of the final plan within fifteen (15) days after receipt thereof by Beneficiaries. If Beneficiaries disapprove the plan, Beneficiaries' notice to Trustor of such disapproval shall include a brief explanation of the reasons therefor. Trustor shall submit to Beneficiaries a revised final written environmental plan that remedies the defects identified by Beneficiaries as reasons for Beneficiaries' disapproval of the previous plan. If Trustor fails to submit a revised plan to Beneficiaries within said thirty (30) day period, or if such revised plan is submitted to Beneficiaries and Beneficiaries disapproves said plan, such failure or disapproval shall, at Beneficiaries' option and upon notice to Trustor, constitute an "Event of Default" hereunder. If Beneficiaries do not notify Trustor of its approval or disapproval of the final plan or any revisions thereof within the fifteen (15) day period described above, Trustor shall provide written notice to Beneficiaries of Beneficiaries' failure to respond, at which time Beneficiaries shall have an additional forty -five (45) days after receipt of such notice from Trustor to notify Trustor of their approval or disapproval of the final plan within said additional forty-five (45) day period. If Beneficiaries fail to notify Trustor of their disapproval or approval of said plan within said forty-five (45) day period the plan shall be deemed approved. Once any such plan is approved in C in writing or deemed approved by Beneficiaries, Trustor shall promptly commence all action necessary to implement such plan and to comply with any requirements or conditions imposed by Beneficiaries, and shall diligently and continuously pursue such action to completion in strict accordance with the terms of said plan. The rights of Beneficiaries with respect to the approval or disapproval of the environmental plan set forth herein and the actions of Beneficiaries pursuant to such rights are not intended to, and shall not, in and of themselves, confer on Beneficiaries a right to manage, operate or control the Property on a continuing basis following the discovery of the event(s) or occurrence(s) described in this subparagraph 9(d). (e) Trustor agrees to submit from time to time, if requested by Beneficiaries, a report, satisfactory to Beneficiaries, specifying any activities involving, directly or indirectly, the use, generation, treatment, storage or disposal of any Hazardous Materials on the Real Property or the Improvements. Beneficiaries reserve the right, in its sole and reasonable discretion, to retain, at Trustor's expense, an independent professional consultant to review any report prepared by Trustor and/or to conduct its own investigation of the Real Property and Improvements. Trustor hereby grants to Beneficiaries, their agent, employees, consultants and contractors the right to enter upon the Real Property and Improvements and to perform such tests as Beneficiaries deem are necessary to conduct such a review and/or investigation. Beneficiaries shall hold in confidence any report delivered by Trustor to Beneficiaries pursuant to this Section 9, except for disclosure to (a) any consultant(s) hired by Beneficiaries to review said report, (b) legal counsel, accountants and other professional advisors to Beneficiaries, (c) regulatory officials having jurisdiction over Beneficiaries who may request said report, (d) as required by any federal, state, county, regional or local authority or law, rule, regulation or ordinance, (e) as required in connection with any legal proceeding, and (f) any financial institution in connection with a disposition or proposed disposition of all or part of Beneficiaries' or any participant's interests hereunder. "Hazardous Materials" as used in this Deed of Trust shall mean any hazardous or toxic materials, pollutants, effluents, contaminants, radioactive materials, flammable explosives, chemicals known to cause cancer or reproductive toxicity, emissions or wastes and any other chemical, material or substance, the handling, storage, release, transportation, or disposal of which is or becomes prohibited, limited or regulated by any federal, state, county, regional or local authority or which, even if not so regulated, is or becomes known to pose a hazard to the health and safety of the occupants of the Property including, without limitation, (i) asbestos, (ii) petroleum and petroleum by- products, (iii) urea formaldehyde foam insulation, (iv) polychlorinated biphenyls, (v) all substances now or hereafter designated as "hazardous substances," "hazardous materials" or "toxic substances" pursuant to the Comprehensive Environmental Response, Compensation and Liability Act of 1980 ( "CERCLA "), 42 U.S.C. Section 9601 et seq., as amended by the Superfund Amendments and Reauthorization Act of 1986 ( "SARA"), the Federal Water Pollution Control Act, 33 U.S.C. Section 1251 et seq. the Clean Air Act, 42 U.S.C. Section 7401 et seq., the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801 et seq., or the Resource, Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq.; (vi) all substances now or hereafter designated as "hazardous wastes" in Section 25117 of the California Health & Safety Code or as "hazardous substances" in Section 25316 of the California Health & Safety Code; (vii) all substances now or hereafter designated by the Governor of the State of California pursuant to the Safe Drinking Water and Toxic Enforcement Act of 1986 as being known to cause cancer or reproductive toxicity, or (viii) 7 (viii) all substances now or hereafter designated as "hazardous substances," "hazardous materials" or "toxic substances" under any other federal, state or local laws or in any regulations adopted and publications promulgated pursuant to said laws. "Environmental Laws" as used herein shall mean all laws, rules, regulations and ordinances relating to Hazardous Materials, including, but not limited to, those relating to soil and groundwater conditions and those statutes referred to in the definition of Hazardous Materials set forth hereinabove. "Environmental Activities" as used herein shall mean the use, generation, transportation, treatment, storage or disposal of any Hazardous Materials at any time located on or present on, under or about the Real Property or the Improvements. (f) Trustor hereby agrees, at its sole cost and expense, to indemnify, protect, hold harmless and defend (with counsel of Beneficiaries' choice), Beneficiaries, and each of them and their respective successors and assignees, and the officials, officers, agents, attorneys and employees of each of them (individually, each an "Indemnitee ", and collectively, the "Indemnitees ") from and against any and all claims, demands, damages, losses, liabilities, obligations, penalties, fines, actions, causes of action, judgments, suits, proceedings, costs, disbursements and expenses (including, without limitation, attorneys' and experts' reasonable fees, disbursements and costs) of any kind or of any nature whatsoever (collectively, "Claims ") which may at any time be imposed upon, incurred or suffered by, or asserted or awarded against, any Indemnitee directly or indirectly relating to or arising from any of the following "Environmental Matters," but excluding any Claims arising solely from the gross negligence or willful misconduct of Beneficiaries: W Any past, present or future presence of any Hazardous Materials on, in, under or affecting all or any portion of the Real Property or Improvements or on, in, under or affecting all or any portion of any property adjacent or proximate to the Real Property or improvements, if such Hazardous Materials originated or allegedly originated on or from the Real Property or Improvements ; (ii) Any past, present or future storage, holding, handling, release, threatened release, discharge, generation, leak, abatement, removal or transportation of any Hazardous Materials on, in, under or from the Real Property or Improvements or any portion thereof, (iii) The failure of Trustor to comply with any and all laws, rules, regulations, judgments, orders, permits, licenses, agreements, covenants, restrictions, requirements or the like now or hereafter relating to or governing in any way the environmental condition of the Real Property or Improvements or the presence of Hazardous Materials on, in, under or affecting all or any portion of the Real Property or Improvements including, wi*ut limitation, all Environmental Laws; 8 (iv) The failure of Trustor to properly complete, obtain, submit and/or file any and all notices, permits, licenses, authorizations, covenants, and the like relative to any of the Environmental Matters described herein in connection with the Real Property or Improvements or the ownership, use, operation or enjoyment thereof, (v) The extraction, removal, containment, transportation or disposal of any and all Hazardous Materials from any portion of the Real Property or Improvements or any other property adjacent or proximate to the Real Property or Improvements , if such Hazardous Materials originated or allegedly originated on or from the Real Property or Improvements ; (vi) Any past, present or future presence, permitting, operation, closure, abandonment or removal from the Real Property or Improvements of any storage tank that at any time contains or contained any Hazardous Materials and is or was located on, in or under the Real Property or Improvements or any portion thereof, (vii) The implementation and enforcement of any monitoring, notification or other precautionary measures that may at any time become necessary to protect against the release or discharge of Hazardous Materials on, in, under or affecting the Real Property or Improvements or into the air, any body of water, any other public domain or any property adjacent or proximate to the Real Property or Improvements; (viii) Any failure of any Hazardous Materials generated or moved from the Real Property or Improvements to be removed, contained, transported or disposed of in compliance with all applicable Environmental Laws; or (ix) Any breach by Trustor of any of its covenants, representations or warranties regarding Environmental Matters contained in this Deed of Trust. The indemnity contained herein shall survive the expiration or termination of the Loan Documents and the repayment of the Loan. (g) Trustor hereby represents and warrants as follows: W Neither the Real Property nor the Improvements, or any part of either of them, has been a site for the use, generation, manufacture, storage, treatment, release, threatened release, discharge, disposal, or transportation of any Hazardous Materials; (ii) The Real Property and Improvements , and each part thereof, are in compliance with all Environmental Laws; (iii) Trustor has not received any written notice of claims or actions (collectively, "Hazardous Materials Claims ") pending or threatened against Trustor or any previous owner or user of the Real Property or Improvements (and relating to Trustor's and/or such previous owner's or user's ownership of the Real Property or Improvements), by any governmental entity or agency or any other person or entity and relating to Hazardous Materials or pursuant to Environmental Laws; and (iv) Trustor has not received any written notice (i) pursuant to which the Real Property or Improvements have been designated as "border zone property" under the provisions of California Health and Safety Code Sections 25220 et seq., or any regulation adopted in accordance therewith, (ii) of a hearing at which the Real Property or Improvements will be considered for designation as "border zone property," or (iii) of an occurrence or condition on any real property adjoining or in the vicinity of the Real Property or Improvements that could cause the Real Property or Improvements or any part thereof to be designated as "border zone property." The foregoing shall constitute environmental provisions for purposes of California Code of Civil Procedure Section 736. 10. Insurance 10.1. Casualty Insurance Trustor shall at all times keep the Real Property and Improvements insured for the benefit of Trustee and Beneficiaries as follows, despite governmental requirements that may detrimentally affect Trustor's ability to obtain or may materially increase the cost of such insurance coverage: 10.1.1. Against damage or loss by fire and such other hazards (including lightning, windstorm, hail, explosion, riot, acts of striking employees, civil commotion, vandalism, malicious mischief, aircraft, vehicle, and smoke) as are covered by the broadest form of extended coverage endorsement available from time to time, in an amount not less than the full insurable value (as defined in section 10.9) of the Real Property and Improvements, with a deductible amount not to exceed an amount satisfactory to Beneficiaries; 10.1.2. Rent or business interruption or use and occupancy insurance on such basis and in such amounts and with such deductibles as are satisfactory to Beneficiaries; 10.1.3. Against damage or loss by flood, if the Real Property and Improvements are located in an area identified by the Secretary of Housing and Urban Development or any successor or other appropriate authority (governmental or private) as an area having special flood hazards and in which flood insurance is available under the National Flood Insurance Act of 1968 or the Flood Disaster Protection Act of 1973, as amended, modified, supplemented, or replaced from time to time, on such basis and in such amounts as Beneficiaries may require; 10.1.4. Against damage or loss from (a) sprinkler system leakage and (b) boilers, boiler tanks, heating and air conditioning equipment, pressure vessels, auxiliary piping, and similar apparatus, on such basis and in such amounts as Beneficiaries may require; 10.1.5. During any alteration, construction, or replacement of the Improvements, or any substantial portion thereof, a Builder's All Risk policy with extended coverage 10 with course of construction and completed value endorsements, for an amount at least equal to the full insurable value of the Improvements with provision for replacement with the coverage described in Section 10.1.5, without gaps or lapsed coverage, for any completed portion of Improvements and workers' compensation, in statutory amounts; and 10.1.6. Against damage or loss by earthquake, in an amount and with a deductible satisfactory to Beneficiaries, if such insurance is required by Beneficiaries in the exercise of its business judgment in light of the commercial real estate practices existing at the time the insurance is issued and in the County where the Real Property and Improvements are located. 10.2. Liability Insurance Trustor shall procure and maintain workers' compensation insurance for Trustor's employees and comprehensive general liability insurance covering Trustor, Trustee, and Beneficiaries against claims for bodily injury or death or for damage occurring in, on, about, or resulting from the Real Property or Improvements, or any street, drive, sidewalk, curb, or passageway adjacent to them, in standard form and with such insurance company or companies and in an amount of at least $2,000,000 combined single limit, or such greater amount as Beneficiaries may require, which insurance shall include completed operations, product liability, and blanket contractual liability coverage that insures contractual liability under the indemnifications set forth in this Deed of Trust (but such coverage or its amount shall in no way limit such indemnification). 10.3. Other Insurance Trustor shall procure and maintain such other insurance or such additional amounts of insurance, covering Trustor and the Real Property and Improvements, as (a) may be required by the terms of any construction contract for any improvements on the Real Property and Improvements or by any governmental authority, other than Beneficiaries or (b) may be reasonably required by Beneficiaries from time to time. 10.4. Form of Policies All insurance required under this Section 10 shall be fully paid for and nonassessable. The policies shall contain such provisions, endorsements, and expiration dates as Beneficiaries from time to time reasonably requests and shall be in such form and amounts, and be issued by such insurance companies doing business in the State of California, as Beneficiaries shall approve in Beneficiaries' sole and absolute discretion. Unless otherwise expressly approved in writing by Beneficiaries, each insurer shall have a Best Insurance Guide, current edition, rating of at least A(viii), or better. All policies shall (a) contain a waiver of subrogation endorsement; (b) provide that the policy will not lapse or be canceled, amended, or materially altered (including by reduction in the scope or limits of coverage) without at least 30 days' prior written notice to Beneficiaries; (c) with the exception of the comprehensive general liability policy, contain a mortgagee's endorsement (438 BFU Endorsement or equivalent), and name Beneficiaries and Trustee as insureds; and (d) include such deductibles as Beneficiaries may approve. If a policy required under this paragraph contains a co- insurance or overage clause, the policy shall include a stipulated value or agreed amount endorsement acceptable to Beneficiaries. 10.5. Duplicate Originals or Certificates Duplicate original policies evidencing the insurance required under this Section 10 and any additional insuran that may be purchased on the Property by or on behalf of Trustor shall be deposited with and held by Beneficiaries and, in addition, 11 addition, Trustor shall deliver to Beneficiaries (a) receipts evidencing payment of all premiums on the policies and (b) duplicate original renewal policies or a binder with evidence satisfactory to Beneficiaries of payment of all premiums at least 30 days before the policy expires. In lieu of the duplicate original policies to be delivered to Beneficiaries under this Section 10.5, Trustor may deliver an underlier of any blanket policy, and Trustor may also deliver original certificates from the issuing insurance company, evidencing that such policies are in full force and effect and containing information that, in Beneficiaries' reasonable judgment, is sufficient to allow Beneficiaries to ascertain whether such policies comply with the requirements of this Section 10. 10.6. Increased Coverage If Beneficiaries determine that the limits of any insurance carried by Trustor are inadequate or that additional coverage is required, Trustor shall, within 10 days after written notice from Beneficiaries, procure such additional coverage as Beneficiaries may require in Beneficiaries' sole and absolute discretion. 10.7. No Separate Insurance Trustor shall not carry separate or additional insurance concurrent in form or contributing in the event of loss with that required under this Section 10, unless endorsed in favor of Trustee and Beneficiaries, as required by this Section 10 and otherwise approved by Beneficiaries in all respects. 10.8. Transfer of Title In the event of foreclosure of this Deed of Trust or other transfer of title or assignment of the Property in extinguishment, in whole or in part, of the Trustor's obligation to repay the Loan, all right, title, and interest of Trustor in and to all insurance policies required under this Section 10 or otherwise then in force with respect to the Real Property and Improvements and all proceeds payable under, and unearned premiums on, such policies shall immediately vest in the purchaser or other transferee of the Property. 10.9. Replacement Cost For purposes of this Section 10, the term "full insurable value" means the actual cost of replacing the Real Property and/or Improvements in question, without allowing for depreciation, as calculated from time to time (but not more often than once every calendar year) by the insurance company or companies holding such insurance or, at Beneficiaries' request, by appraisal made by an appraiser, engineer, architect, or contractor proposed by Trustor and approved by said insurance company or companies and Beneficiaries. Trustor shall pay the cost of such appraisal. 10.10. Approval Not Warranty No approval by Beneficiaries of any insurer may be construed to be a representation, certification, or warranty of its solvency and no approval by Beneficiaries as to the amount, type, or form of any insurance may be construed to be a representation, certification, or warranty of its sufficiency. 10.11. Beneficiaries' Right To Obtain Insurance Trustor shall deliver to Beneficiaries original policies or certificates evidencing such insurance at least 30 days before the existing policies expire. If any such policy is not so delivered to Beneficiaries or if any such policy is canceled, whether or not Beneficiaries have the policy in its possession, and no reinstatement or replacement policy is received before termination of insurance, Beneficiaries, without notice to or demand on Trustor, may (but are not obligated to) obtain such insurance insuring only Beneficiaries 12 and Trustee with such company as Beneficiaries may deem satisfactory, and pay the premium for such policies, and the amount of any premium so paid shall be charged to and promptly paid by Trustor. Trustor acknowledges that, if Beneficiaries obtain insurance, it is for the sole benefit of Beneficiaries and Trustee, and Trustor shall not rely on any insurance obtained by Beneficiaries to protect Trustor in any way. 10.12. Duty To Restore After Casualty If any act or occurrence of any kind or nature (including any casualty for which insurance was not obtained or obtainable) results in damage to or loss or destruction of the Real Property and/or Improvements, Trustor shall immediately give notice of such loss or damage to Beneficiaries and, if Beneficiaries so instruct, shall promptly, at Trostor's sole cost and expense, regardless of whether any insurance proceeds will be sufficient for the purpose, commence and continue diligently to completion to restore, repair, replace, and rebuild the Real Property and/or Improvements as nearly as possible to its value, condition, and character immediately before the damage, loss or destruction. ] L Assignment of Insurance and Condemnation Proceeds Should the Property or any part or appurtenance thereof or right or interest therein be taken or damaged by reason of any public or private improvement, condemnation proceeding (including change of grade), fire, earthquake or other casualty, or in any other manner, Beneficiaries or Trustee may, at their option, commence, appear in and prosecute, in its own name, any action or proceeding, or make any reasonable compromise or settlement in connection with such taking or damage, and obtain all compensation, awards or other relief therefor. All compensation, awards, damages, rights of action and proceeds, including the policies and the proceeds of any policies of insurance affecting the Real Property and Improvements, are hereby assigned to Beneficiaries, but no such assignments shall be effective to invalidate or impair any insurance policy. Trustor further assigns to Beneficiaries any return premiums or other repayments upon any insurance at anytime provided for the benefit of the Beneficiaries and all refunds or rebates made of taxes or assessments on the Property, and Beneficiaries may at any time collect said return premiums, repayments, refunds and rebates in the event of any default by Trustor under the Loan Agreement, this Deed of Trust or the Promissory Note. No insurance proceeds or condemnation awards at any time assigned to or held by Beneficiaries shall be deemed to be held in trust and Beneficiaries may commingle such proceeds with its general assets and shall not be liable for the payment of any interest thereon. Trustor also agrees to execute such further assignments of any such policies, compensation, award, damages, rebates, return of premiums, repayments, rights of action and proceeds as Beneficiaries or Trustee may require. 12. Use of Insurance Proceeds After any damage by casualty to the Real Property and/or Improvements , whether or not required to be insured against under the policies to be provided by Trustor, Trustor shall give prompt written notice thereof to Beneficiaries generally describing the nature and cause of such casualty and the extent of the damage to or destruction of the Real Property and/or Improvements . Trustor shall have the obligation to promptly repair the damage, regardless of whether and to the extent the casualty was covered by an insurance policy. For these purposes, Beneficiaries shall make available to Trustor proceeds of any insurance policy covering the casualty and maintained by Trustor under and subject to each ofthe following terms and conditions: Ilk] (a) Insurance proceeds which are directly attributable to the damage (herein the "Proceeds ") shall be released to Trustor upon and subject to satisfaction of each of the following conditions: (i) There exists no default under the Loan Agreement, this Deed of Trust or the Promissory Note at any time prior to or during the course of reconstruction; (ii) Receipt by Beneficiaries of satisfactory written evidence that any proposed restorations by Trustor will comply with all statutes, ordinances, regulations, rules, rulings, restrictive covenants, reciprocal easements, leases and contracts; that all proposed plans and specifications are approved by all required governmental agencies; and that Trustor has obtained all necessary building and other permits and approvals for such reconstruction; (iii) Receipt by Beneficiaries of proof reasonably satisfactory to Beneficiaries that there exists and will continue to exist, until the Real Property and/or Improvements are reasonably expected to be restored and fully occupied, a source of funds sufficient to pay the Loan as and when due. Such computation shall include Beneficiaries' estimate of the amount necessary to pay all of Trustor's operating expenses and pay all of the sums due on the Loan over the projected period of reconstruction, and Beneficiaries may require Trustor to establish and fund a holdback account up to the amount of the difference between the anticipated debt service and operating expenses of Trustor. In the event of any default under the Loan Agreement, this Deed of Trust, the Promissory Note or any reconstruction requirements, Beneficiaries may, at their option, apply any portion or all of such amounts against accrued interest and the outstanding amounts due under the Loan; (iv) Receipt by Beneficiaries from Trustor of sufficient cash funds to cover one hundred percent (100 %) of any difference between the estimated costs of completion, as certified by an architect or engineer approved by Beneficiaries in writing, and the Proceeds, the amount of such difference shall be paid in cash to Beneficiaries with said amount and any interest earned thereon shall be released to Beneficiaries, as necessary, following the exhaustion of available insurance proceeds, or at such earlier time deemed appropriate by Beneficiaries. In the event of any default under the Loan Agreement, this Deed of Trust, the Promissory Note or any reconstruction requirements, Beneficiaries may, at their option, apply any portion or all of such amounts and interest against the accrued interest and principal sums outstanding under the Loan; (v) Receipt by Beneficiaries of a certificate executed by Trustor describing the work to be performed in connection with such restoration and a certificate by an independent architect or engineer selected or approved by Beneficiaries in writing stating that the work described in the Trustor's certificate is 14 adequate to restore the Real Property and Improvements to substantially the same size, design, quality and condition as existed prior to the damage. The architect's or engineer's certificate shall include its estimate of all costs and expenses which will be required to complete such restorations; and (vi) Such additional conditions as may reasonably be imposed by Beneficiaries to provide assurance that the Proceeds will be used to restore the Real Property and Improvements to substantially the same condition, to the extent possible, as existed prior to the damage or taking, including, without limitation, Beneficiaries' prior written approval of all permits, plans, specifications and construction contracts for such restoration. (b) Beneficiaries shall disburse the Proceeds in increments corresponding to the percentage of completion costs then incurred for labor performed and materials furnished (which may, at Beneficiaries' discretion, be subject to reasonable holdbacks required by Beneficiaries, not exceeding ten percent (10 %) of the total estimated cost of completion and which will be released upon lien -free completion of the restorations in accordance with the requirements of this Deed of Trust and the expiration of the periods within which any mechanic's or materialman's lien may be filed). Disbursements shall be conditioned upon Beneficiaries' written confirmation that all of its requirements therefor have been satisfied, including its receipt of periodic inspection and completion percentage certificates executed by the project architect approved by Beneficiaries in writing, payment acknowledgments and unconditional lien releases, and such other conditions to periodic disbursements as are customarily imposed by Beneficiaries in connection with its construction loans, no defaults or misrepresentations of Trustor and Trustor's obtaining all title insurance endorsements, payment and performance bonds, and builder's risk policies required by Beneficiaries. Trustor shall, during the progress of the work, also submit to the Beneficiaries, at periodic intervals not less frequently than monthly, a certificate satisfactory to Beneficiaries fiunished by an architect or engineer approved by Beneficiaries in writing showing the cost of labor and materials incorporated into the work during the period specified in the certificate, which period shall not include any part of the period covered by any other such certificate; and (c) After completion of the restoration and subject to the conditions herein stated, and, if Trustor is not then in default under the Loan Agreement, this Deed of Trust or the Promissory Note, Beneficiaries shall pay to Trustor (or such other persons or entities that may have an interest therein) the undisbursed Proceeds and Trustor's deposit for any estimated restoration expense held by Beneficiaries upon delivery to Beneficiaries of (i) a certificate executed by Trustor showing that the work has been completed and that all bills for labor performed and materials furnished in connection therewith have been paid, (ii) unconditional lien releases and other appropriate written acknowledgments of payment in full executed by all contractors and subcontractors perfomiing labor on or furnishing materials to the Real Property and Improvements; (iii) a certificate executed by an architect or engineer approved by Beneficiaries confirming that the Real Property and Improvements have been restored to substantially the same size, design, quality and condition as existed immediately prior to the damage and in accordance with all applicable federal, state, local and other governmental laws and regulations; and (iv) a certificate of occupancy and other permits issued by 15 the appropriate governmental authorities authorizing the occupancy of the Real Property and Improvements for its intended purposes and use. If (i) any of the conditions in subparagraph 12(b), above, are not fulfilled within sixty (60) days after the date of the casualty, or if the reconstruction cannot be completed within such 60 day period, within such additional time as may be reasonably necessary to complete the reconstruction, not to exceed one hundred eighty (180) days, and provided such additional time does not result in a breach by the Trustor under the Loan Agreement, this Deed of Trust or the Promissory Note; or (ii) Trustor fails to exercise diligence in promptly commencing or continuously prosecuting the work; or (iii) Trustor is otherwise in default under the Loan Agreement, this Deed of Trust, the Promissory Note or any reconstruction requirements set forth therein or herein, then in any such event Beneficiaries may, at their option, apply the Proceeds and any deposits made by Trustor hereunder to the indebtedness secured hereby, or to complete the necessary repairs and use the Proceeds for the payment thereof. If the Proceeds are so applied to the indebtedness and, together with any other payments due to Beneficiaries under the Loan and all other debts of Trustor to Beneficiaries are discharged, Beneficiaries shall not have the right to require the Real Property and Improvements to be repaired under the terms of this Deed of Trust, but Beneficiaries' rights under any other lien that it holds against the Property and which is not also required to be released shall not be thereby impaired or affected. Trustor shall not commence any repairs or reconstruction of any casualty until Beneficiaries consent in writing thereto, which consent may be withheld by Beneficiaries in its sole discretion, until all of the conditions contained in this paragraph are satisfied. All work of repairing or restoring damage shall be done in a good and workmanlike manner with materials of good quality and in conformity with all applicable laws, ordinances, rules and regulations. Nothing herein contained shall be construed as authorizing the Trustor to subject the Real Property and Improvements to any mechanic's, materialman's or other lien for the payment of bills for material furnished or labor performed in connection with any work contemplated by this paragraph 12. In any event in which the Beneficiaries are not otherwise obligated to authorize the insurance proceeds to be applied to the restoration of the Real Property and Improvements as hereinabove described and, at the option of Beneficiaries, the proceeds of a loss under any policy, whether or not endorsed payable to Beneficiaries, may be applied in payment of the principal, interest or any other sums secured by this Deed of Trust, whether or not then due, or to the restoration or replacement of any building on the Property, without in any way affecting the enforceability or priority of the lien of this Deed of Trust or the obligation of the Trustor or any other person for payment of the indebtedness hereby secured or the reconstruction of the damaged improvements, whether such Trustor be the then owner of said building or improvements or not. 13. Use of Condemnation Awards Should the Property or any portion thereof or any improvements thereon be taken or damaged by reason of any public improvement or condemnation proceeding, or by any other form of eminent domain, Trustor agrees that Beneficiaries shall be entitled to all compensation, awards and other payments or relief therefor and may, at its option, commence, appear in or prosecute in its own name any action or proceeding or make any reasonable compromise or settlement in connection with such taking or damage, and Trustor agrees Irl to pay Beneficiaries' costs and reasonable attorneys' fees incurred in connection therewith. All such compensation, awards, damages, rights of actions and proceeds may be applied by Beneficiaries toward the repair of any damage to the improvements on any portion of the Property not subject to the taking as and subject to the same conditions herein provided with respect to the disposition of insurance proceeds; provided, however, that if the taking results in a loss of the Property to an extent which, in the reasonable opinion of Beneficiaries, renders or will render the Property not economically viable or which substantially impairs Beneficiaries' security or lessens to any extent the value, marketability or intended use of the Property, Beneficiaries may apply the condemnation proceeds to reduce the unpaid indebtedness secured hereby in such order as Beneficiaries may determine. Trustor agrees to execute such further assignments of condemnation proceeds as Beneficiaries or Trustee may from time to time require. If so applied, any proceeds in excess of the unpaid principal and accrued interest due under the Loan plus all other sums due to Beneficiaries from Trustor shall be paid to Trustor or Trustor's assignee. 14. Property Taxes and Assessments Trustor shall pay in fiill on or before the due date thereof all rents, taxes, assessments and encumbrances, with interest, that may now or hereafter be levied, assessed or claimed upon the Trustor's ownership or use of the Property that is the subject of this Deed of Trust or any part thereof, and upon request, provide the Beneficiaries with copies of official receipts for payment therefor, and shall pay all taxes imposed upon, and reasonable costs, fees and expenses of, this Deed of Trust. 15. Assessment Districts Trustor agrees to consent to inclusion of the Real Property and Improvements in any local improvement or special assessment district and to the imposition of any special or local improvement assessment against the Real Property and Improvements , upon the Beneficiaries' written request. 16. Mortgage Taxes In the event of the passage after the date of this Deed of Trust of any federal, state or municipal law, ordinance or regulation relating to the taxation of mortgages, deeds of trust or debts secured thereby so as to tax or assess any interest of Beneficiaries or any payments secured hereby, Trustor shall bear and pay the full amount of such taxes. 17. Special Assessment and Insurance Reserves Trustor shall, at the request of the Beneficiaries, pay to Beneficiaries equal monthly installments of the special assessments and insurance premiums estimated by the Beneficiaries next to become due, in addition to any other periodic payment or performances owed by Trustor under the Loan Agreement, the Promissory Note or this Deed of Trust, so that thirty (30) days before the due date thereof, or of the first installment thereof, Beneficiaries will have on hand an amount sufficient to pay the next maturing assessments and insurance premiums. The amount of the additional payment to be made on account of assessments and insurance premiums shall be adjusted annually or more frequently as Beneficiaries deem necessary and any deficit shall be immediately paid by Trustor upon request and any surplus shall be credited on the mortgage account. Subsequent payments on account of assessments and insurance premiums shall be made in accordance with the next estimate by the Beneficiaries of annual requirements. To the extent permitted by applicable law, all monies paid to Beneficiaries on account of assessments or insurance premiums may be commingled and invested with Beneficiaries' own funds and, unless and to the extent required by law, shall not bear interest for Trustor. 17 Beneficiaries shall not exercise the rights granted in this paragraph so long as all of the following conditions are met: (a) There is no other default under the Loan Agreement, this Deed of Trust or the Promissory Note; and (b) Trustor pays all assessments and insurance premiums prior to delinquency. Upon Trustor's failure to comply with either of the conditions (a) and (b), above, Beneficiaries may, at their option, then or thereafter exercised, require Trustor to pay the additional sums described in this paragraph. 18. Trustor's Right to Contest Taxes Trustor shall have the right to contest any real property tax or special assessment so long as (a) no defaults exist under the Loan Agreement, this Deed of Trust or the Promissory Note; (b) Trustor makes any payment or deposit or posts any bond as and when required as a condition to pursuing such contest; (c) Trustor commences such contest prior to such tax or assessment becoming delinquent and continuously pursues the same in good faith and with due diligence; (d) such contest or any bond furnished by Trustor stays the foreclosure of any lien securing the payment of any such tax or assessment; and (e) Trustor pays any tax or assessment within ten (10) days following the date of resolution of such contest. 19. Report of Real Estate Transaction Trustor has made or provided for making, or will make or provide for making, on a timely basis, any reports or returns required by state or local law relating to the Property, or the development of the Property, notwithstanding the fact that the primary reporting responsibility may fall on the Beneficiaries, or other party. Trustor's obligations under this paragraph will be deemed to be satisfied, if proper and timely reports and returns required under this paragraph are filed by a title company involved in each real estate transaction relating to the Property, but nothing contained herein shall be construed to require such returns or reports to be filed by Beneficiaries. 20. Leases/Rental Agreements With respect to any leases and/or rental agreements currently or hereafter relating to any portion of the Real Properthy, Trustor agrees that: (a) Trustor shall take all reasonable measures to cause each dwelling unit on the Real Property to be made available for rent and occupancy by a "low- or moderate - income household" as this term is defined in Health and Safety Code Section 50093. For purposes of this subparagraph (a), compliance by the Trustor of the applicable provisions of the HOME Regulatory Agreement of even date herewith relating to the rental and occupancy of each such dwelling unit on the Real Property shall be deemed to be compliance with the provisions of this subparagraph (a); (b) Each lease or rental agreement for each dwelling unit on the Real Property shall comply with the covenants of the Trustor under the Loan Agreement, this am Deed of Trust the Promissory Note and the HOME Regulatory Agreement of even date herewith; (c) Trustor shall fully comply with all of its obligations under all leases or rental agreements on the Real Property so that the same shall not become in default and shall do all that is necessary to preserve the same in force; (d) Trustor shall not permit an assignment of any leases, or any subletting thereunder; and (e) Beneficiaries and their successors and assigns (including any purchaser at a foreclosure or trustee's sale) shall have the right, at its option, to recognize and continue in effect any such leasehold interests following any foreclosure or trustee's sale hereunder. 21. Collateral Assignment of Leases and Rents to Beneficiaries Trustor hereby unconditionally and absolutely assigns, transfers and sets over unto Beneficiaries, all leases, subleases, rental agreements, occupancy agreements, licenses, concessions, entry fees and other agreements that grant a possessory interest in all or any part of the Property, together with all rents, issues, deposits and profits of the Property, together with the immediate and continuing right to collect and receive the same, for the purpose and upon the terms and conditions hereinafter set forth. Trustor further unconditionally and absolutely assigns, transfers and sets over unto Beneficiaries all of its right, title and interest in and to any plans, drawings, specifications, permits, engineering reports and land planning maps, which it now has or may hereafter acquire regarding any improvements now on or to be constructed upon the Property. Beneficiaries confer upon Trustor a license to collect and retain the rents, issues, deposits and profits of the Property, as they become due and payable, subject, however, to the right of Beneficiaries upon a default hereunder to revoke said license, at any time, in its sole discretion and without notice to Trustor. Beneficiaries may revoke said license and collect and retain the rents, issues, deposits and profits of the Property assigned herein to Beneficiaries upon the occurrence of an Event of Default hereunder or under any of the obligations secured hereby, and without taking possession of all or any part of the Property, and without prejudice to or limitation upon any of its additional rights and remedies granted pursuant hereto or pursuant to the Loan Agreement or the Promissory Note, and Beneficiaries shall, in their sole and absolute discretion, have the right to apply such income for the payment of all expenses or credit the net amount of income that it receives from the Property, to the indebtedness in the manner, order and amounts as Beneficiaries shall determine. In the event the Beneficiaries exercise or are entitled to exercise any of their rights or remedies under this Deed of Trust as a result of the default of the Trustor under the Loan Agreement, and if any lessee, sublessee or assignee under any lease assigned under this paragraph files or has filed against it any petition in bankruptcy or for reorganization or undertakes or is subject to similar action, Beneficiaries shall have, and are hereby assigned by Trustor, all of the rights that would otherwise inure to the benefit of Trustor in such proceedings, including, without limitation, the right to seek "adequate protection" of its interests, to compel assumption or rejection of any such lease and to seek such claims and awards as may be sought or granted in connection with the rejection of any such lease. Unless otherwise agreed to by Beneficiaries in writing, Beneficiaries' exercise of any of the rights provided in this paragraph shall 19 preclude Trustor from the pursuit and benefit thereof, without any further action or proceeding of any nature. The foregoing assignment shall not impose upon Beneficiaries any duty to produce rents from the Property, and such assignment shall not cause Beneficiaries to be a "mortgagee in possession" for any purpose. The rights granted in this paragraph shall be in addition to and not in derogation of any similar or related rights granted to Beneficiaries in any separate assignment of leases and rents. 22. Impairment of Securiri Trustor shall not, without first obtaining Beneficiaries' written consent, assign any of the rents or profits of the Property or change the general nature or use of the Property or initiate or acquiesce in any zoning reclassification, or do, or suffer to be done, any act or thing that would impair the security of Beneficiaries' lien upon the Property or the rents thereof. Trustor shall not, without the written consent of Beneficiaries, (i) initiate or support any zoning reclassification of the Property, seek any variance under existing zoning ordinances applicable to the Property or use or permit the use of the Property in a manner that would result in such use becoming a non - conforming use under applicable zoning ordinances; (ii) modify, amend or supplement any easement, reservation, restriction, covenant, condition or encumbrance pertaining to the Property; (iii) impose or consent to any restrictive covenant or encumbrance upon the Property, execute or file any subdivision or parcel map affecting the Property or consent to the annexation of the Property to any municipality; or (iv) permit or suffer the Property to be used by the public or any person in such manner as might make possible a claim of any implied dedication or easement. 23. Defense of Suits Truster shall appear in and defend any suit, action or proceeding that might affect the value, priority or enforceability of this Deed of Trust or the Property itself or the rights or powers of Beneficiaries or Trustee, including any suits relating to damage to property or death or personal injuries, whether or not Trustor is ultimately found liable for any negligence or other wrongful conduct or inaction. Trustor, following mutual negotiations with Beneficiaries, has waived and does hereby waive any immunity to such liability to Beneficiaries under any industrial insurance or similar statute, to the extent such immunity would impair Beneficiaries' rights against Trustor. Should Beneficiaries elect to appear in or defend any such action or proceeding or be made a party to any such action or proceeding by reason of this Deed of Trust, or elect to prosecute such action as appears necessary to preserve the value, priority or enforceability of this Deed of Trust or the Property itself, Trustor will at all times indemnify from and, on demand, reimburse Beneficiaries and Trustee for, any and all loss, damage, expense or cost, including cost of evidence of title expert witness fees and attorneys' fees, arising out of or incurred in connection with any such suit, action or proceeding, and any appeal or petition for review thereof, and the sum of such expenditures shall be secured by this Deed of Trust with interest at the rate of 10% per annum and shall be due and payable on demand. Trustor shall pay costs of suit, cost of evidence of title expert witness fees and reasonable attorneys' fees in any proceeding or suit brought by Beneficiaries to foreclose this Deed of Trust and in any appeal therefrom or petition for review thereof. 24. Due on Sale and Sale of Premises or Additional Financing Not Permitted Trustor specifically agrees that: PLO] (a) In order to induce Beneficiaries to make the loan secured hereby, Trustor agrees that if the Real Property or any part thereof or any interest therein, shall be sold, assigned, transferred, conveyed, pledged, mortgaged or encumbered with financing other than that secured hereby or otherwise alienated by Trustor whether voluntarily or involuntarily or by operation of law, except as shall be specifically hereinafter permitted or without the prior written consent of Beneficiaries, then Beneficiaries, at their option, may declare the Promissory Note secured hereby and all other obligations hereunder to be forthwith due and payable. Except as shall be otherwise specifically provided herein, any (a) change in the legal or equitable ownership of the Real Property whether or not of record, or (b) change in the form of entity or ownership (including the hypothecation or encumbrance thereof) of any ownership interest in Trustor shall be deemed a transfer of an interest in the Real Property; provided, however, that any transfer of the Real Property or any interest therein to an entity which controls, is controlled by, or is under common control with Trustor shall not be considered a transfer hereunder. In connection herewith, the financial stability and managerial and operational ability of Trustor is a substantial and material consideration to Beneficiaries in their agreement to make the loan to Trustor secured hereby. The transfer of an interest in the Real Property may materially alter and reduce Beneficiaries' security for the indebtedness secured hereby. Moreover, Beneficiaries have agreed to make its loan based upon the presumed value of the Real Property and the rents and profits thereof. Therefore, it will be a diminution of Beneficiaries' security if junior financing, except as shall be permitted by Beneficiaries, or if other liens or encumbrances should attach to the Real Property. (b) Trustor may request Beneficiaries to approve a sale or transfer of the Real Property to a party who would become the legal and equitable owner of the real property described in Exhibit "A" and would assume any and all obligations of Trustor under the Loan Documents (the "Purchaser "). Beneficiaries shall not be obligated to consider or approve any such sale, transfer or assumption or request for the same. However, upon such request, Beneficiaries may impose limiting conditions and requirements to its consent to an assumption. (c) In the event ownership of the Real Property, or any part thereof, becomes vested in a person or persons other than Trustor, the Beneficiaries may deal with such successor or successors in interest with reference to the Note or this Deed of Trust in the same manner as with Trustor, without in any way releasing, discharging or otherwise affecting the liability of Trustor under the Promissory Note, this Deed of Trust or the other Loan Documents. No sale of Trustor's interest in the Real Property, no forbearance on the part of Beneficiaries, no extension of the time for the payment of the Deed of Trust indebtedness or any change in the terms thereof consented to by Beneficiaries shall in any way whatsoever operate to release, discharge, modify, change or affect the original liability of the Trustor herein, either in whole or in part. Any deed conveying the Real Property, or any part thereof, shall provide that the grantee thereunder assume all of Trustor's obligations under the Note, this Deed of Trust and all other Loan Documents. In the event such deed shall not contain such assumption, Beneficiaries shall have all rights reserved to it hereunder in the event of a default or if Beneficiaries shall not elect to exercise such rights and remedies, the grantee under such deed shall nevertheless be deemed to have assumed such obligations by acquiring the Real Property or such portion thereof subject to this Deed of Trust. Nothing contained in this section shall be construed to waive the restrictions against the transfer of the Real Property contained in paragraph 24(a). 21 25. Further Encumbrances Trustor acknowledges that Beneficiaries relied upon the Property not being subject to additional liens or encumbrances for reasons including, but not limited to, the possibility of competing claims or the promotion of plans disadvantageous to Beneficiaries in bankruptcy; the risks to Beneficiaries in a junior lienholder's bankruptcy; questions involving the priority of future advances, the priority of future leases of the Property, the marshaling of Trustor's assets, and the Beneficiaries' rights to determine the application of condemnation awards and insurance proceeds; the impairment of the Beneficiaries' option to accept a deed in lieu of foreclosure; the increased difficulty of reaching agreements for workouts or to the actions to be taken by trustees, receivers, liquidators and fiduciaries; and Beneficiaries' requirements of Trustor's preservation of its equity in the Property and the absence of debt that could increase the likelihood of Trustor's being unable to perform its obligations when due. Therefore, as a principal inducement to Beneficiaries to make the Loan secured by this Deed of Trust, and with the knowledge that Beneficiaries will materially rely upon this paragraph in so doing, Trustor covenants not to further encumber the Property without first receiving Beneficiaries' express written consent in each instance, which consent may be withheld by Beneficiaries in their sole discretion. A breach of this covenant shall constitute a default under the Loan Agreement and this Deed of Trust, and Beneficiaries may exercise all remedies available to Beneficiaries under the Loan Agreement or this Deed of Trust. Without limiting the generality of the foregoing, no mortgage, deeds of trust or other forms of security interests prior or subordinate to the security interests of Beneficiaries shall encumber the Property. 26. RESERVED — NO TEXT 27. Event of Default An "Event of Default" shall be deemed to have occurred in any of the following circumstances: (a) Failure of Trustor to satisfy any performance or payment obligation required under the HOME Regulatory Agreement, the subordinate deed of trust referenced in paragraph 25 of this Deed of Trust [[IS THERE A SUBORDINATE DEED OF TRUST? ?]], the Loan Agreement or the Promissory Note when due; (b) Failure of Trustor to properly perform its obligations under this Deed of Trust, the Loan Agreement or the Promissory Note by a date specified herein or therein or in a written notice to Trustor, if applicable, (which date specified shall not be less than thirty (30) days from the date of such notice, and shall be determined by Beneficiaries in their sole discretion); provided, however, that: (i) if such default set forth in the notice cannot be cured by the date specified, (ii) Trustor commences to cure the default prior to the date specified in the notice, and (iii) Trustor diligently proceeds to cure the default thereafter; then the date specified in the notice may be extended by any period reasonably necessary to complete the cure, but in no event for more than ninety (90) days after the date originally specified in the notice; 22 (c) The condemnation, seizure or appropriation of, or the occurrence of an uninsured casualty with respect to, any material (as determined by Beneficiaries) portion of the Property; (d) Trustor becomes insolvent or generally is not paying its debts as they become due, as defined in the United States Bankruptcy Reform Act, as amended from time to time (which Act, as amended, is herein called the "Bankruptcy Code "), or shall file a voluntary petition in bankruptcy seeking to effect a reorganization plan or other arrangement with creditors or any other relief under the Bankruptcy Code or under any other state or federal law relating to bankruptcy or other relief for debtors, whether now or hereafter in effect, or shall consent to or suffer the entry of any order for relief in any involuntary case under the Bankruptcy Code, or shall be the defendant or subject of any involuntary petition filed under the Bankruptcy Code that is not dismissed within ninety (90) days of the filing thereof, or shall make an assignment for the benefit of creditors; (e) Any court (or similar tribunal) having jurisdiction over Trustor or any of the Property or other property of Trustor shall enter a decree or order appointing a receiver, trustee, guardian, conservator, assignee in bankruptcy or insolvency of Trustor, of any of the Property, of any other real property of Trustor, of any other significant asset of Trustor, or shall enter a decree or order for relief in any involuntary case under the Bankruptcy Code; (f) The entry of any final judgment or arbitration award against Trustor that is not paid or stayed pending appeal, or the sequestration or attachment of, or any levy or execution upon (i) any of the Property, (ii) any other collateral provided by Trustor or any other person under this Deed of Trust or as security for performance or payment of the Loan, or (iii) any significant portion of the other assets of Trustor, which is not released, expunged or dismissed prior to the earlier of (10) days after such sequestration, attachment or execution or five (5) days before the sale of any such assets; (g) Trustor shall dissolve, liquidate or wind up its affairs or shall bring any legal action or take any other action contemplating such dissolution, liquidation or winding up; (h) The determination by Beneficiaries that any representation, warranty or statement contained in this Deed of Trust or the Loan Agreement or in any other writing delivered to Beneficiaries in connection with the Loan or the Promissory Note was incomplete, untrue or misleading in any material respect as of the date made; (i) The enactment of any law that deducts from the value of the Property for the purpose of taxation of any lien thereon or imposing upon Beneficiaries the payment of the whole or any part of the taxes, assessments, charges or liens herein required to be paid by Trustor or changing in any way the laws relating to the taxation of deeds of trust or debts secured by deeds of trust or Beneficiaries' interest in the Property or the manner of collection of taxes so as to affect this Deed of Trust or the Loan Agreement or the Promissory Note or 23 the holder thereof or imposing a tax, other than a Federal or state income tax, on or payable by Trustee or Beneficiaries by reason of their ownership of this Deed of Trust, the Loan Agreement or the Promissory Note and, in such event, Trustor, after demand by Beneficiaries, does not pay such taxes or assessments or reimburse Beneficiaries therefor or, in the opinion of counsel for Beneficiaries, it might be unlawful to require Trustor to make such payment or the making of such payment might result in the imposition of interest costs beyond the maximum amount permitted by applicable law; 0) The occurrence of a default by Trustor under any of the contracts and agreements assigned to Beneficiaries under this Deed of Trust, where such default is not cured within the applicable cure period, if any, or the failure of Trustor to diligently enforce its rights and remedies under such contracts and agreements upon the default of any other parry thereto; and (k) Trustor acknowledges and agrees that all material non - monetary defaults are conclusively deemed to be and are defaults impairing the security of this Deed of Trust, and that Beneficiaries shall be entitled to exercise any appropriate remedy, including, without limitation, foreclosure of this Deed of Trust, upon the occurrence of any such material non - monetary default. 28. Rights and Remedies on Default Upon the occurrence of any Default or Event of Default under this Deed of Trust and at any time thereafter, Trustee or Beneficiaries may exercise any one or more of the following rights and remedies: (a) Loan Agreement Beneficiaries may exercise any right or remedy provided for in the Loan Agreement or the Promissory Note; (b) Acceleration Beneficiaries may declare the Loan and all other performances or sums secured by this Deed of Trust immediately due and payable; (c) Foreclosure Rights Beneficiaries may declare all performances or sums secured hereby immediately due and payable either by commencing an action to foreclose this Deed of Trust as a mortgage, or by the delivery to Trustee of a written declaration of default and demand for sale and of written notice of default and of election to cause the Property to be sold, which notice Trustee shall cause to be duly filed for record in case of foreclosure by exercise of the power of sale herein. Should Beneficiaries elect to foreclose by exercise of the power of sale herein, Beneficiaries shall also deposit with Trustee this Deed of Trust, the documents evidencing the Loan and any receipts and evidence of expenditures made and secured hereby as Trustee may require, and notice of sale having been given as then required by law and after lapse of such time as may then be required by law after recordation of such notice of default, Trustee, without demand on Trustor, shall sell the Property at the time and place of sale fixed by it in said notice of sale at public auction to the highest bidder upon any terms and conditions specified by Beneficiaries and permitted by applicable law. Trustee may 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 may postpone 24 such sale by public announcement at the time fixed by the preceding postponement. Trustee shall deliver to any purchaser its deed or deeds conveying the Property, or any portion thereof, so sold, but without any covenant or warranty, express or implied. The recitals in such deed or deeds of any matters or facts, shall be conclusive proof of the truthfulness thereof. Any person, including Trustor, Trustee or Beneficiaries, may purchase all or any portion of the Property, as applicable, at sale. (d) Right to Rescind Beneficiaries, from time to time before Trustee's sale, may rescind any such notice of breach or default and of election to cause the Property to be sold by executing and delivering to Trustee a written notice of such rescission, which notice, when recorded, shall also constitute a cancellation of any prior declaration of default and demand for sale. The exercise by Beneficiaries of such right of rescission shall not constitute a waiver of any breach or default then existing or subsequently occurring, or impair the right of Beneficiaries to execute and deliver to Trustee, as above provided, other declarations of default and demand for sale, and notices of breach or default, and of election to cause the Property to be sold to satisfy the obligations hereof, nor otherwise affect any provision, agreement, covenant or condition of the Loan Agreement and/or of this Deed of Trust or any of the rights, obligations or remedies of the parties hereunder. (e) UCC Remedies Beneficiaries shall have all the rights and remedies under this Deed of Trust as a secured party under the California Uniform Commercial Code, including, without limitation, Section 9501(4) thereof. Upon request, Trustor shall assemble and make such collateral available to Beneficiaries at a place to be designated by Beneficiaries that is reasonably convenient to both parties. Upon repossession, Beneficiaries may propose to retain the collateral in partial satisfaction of the Loan or sell the collateral at public or private sale in accordance with the Uniform Commercial Code as adopted in the state where the Property is situated or any other applicable statute. Such sale may be held as a part of, distinctive from or without a trustee's sale or foreclosure of the real property secured by this Deed of Trust. If any notification of disposition of all or any portion of the collateral is required by law, such notification shall be deemed reasonably and properly given, if mailed at least ten (10) days prior to such disposition. If Beneficiaries dispose of all or any part of the collateral after default, the proceeds of disposition shall be applied in the following order: (i) to the reasonable expenses of retaking, holding, preparing for sale, selling the collateral, and the like; (ii) to the reasonable attorneys' fees and legal expenses incurred by Beneficiaries; and (iii) to the satisfaction of the indebtedness secured by this Deed of Trust. (f) Remedial Advances Should Trustor fail to make any payment or to do any act as herein provided, then Beneficiaries or Trustee, without obligation so to do and 25 without demand upon Trustor and without releasing Trustor from any obligation hereof, may (i) make or do the same in such manner and to such extent as either may deem necessary to protect the security hereof, Beneficiaries or Trustee being authorized to enter upon the Property for such purposes; (ii) commence, appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiaries or Trustee, (iii) pay, purchase, contest or compromise any encumbrance, charge, lien, tax or assessment, or the premium for any policy of insurance required herein; and in exercising any such power, incur any liability, expend whatever amounts in its absolute discretion it may deem necessary therefor, including cost of evidence of title, employ counsel and pay such counsel's fees. Beneficiaries shall be subrogated to the rights and lien interests of any person who is paid by Beneficiaries pursuant to the terms of this paragraph. Trustor shall repay immediately on written notice to Trustor all sums expended or advanced hereunder by or on behalf of Beneficiaries, with interest from the date of such advance or expenditure at the rate of 10% per annum, and the repayment thereof shall be secured hereby. (g) Summary Possession Beneficiaries may, at their option, either in person or by agent, employee or court- appointed receiver, enter upon and take possession of the Property and continue any work of improvement, repair or renovation thereof at Trustor's expense and lease the same or any part thereof, making such alterations as it finds necessary, and may terminate in any lawful manner any lease(s) of the Property, exercising with respect thereto any right or option available to the Trustor. The entering upon and taking possession of the Property, the collection of rents, issues and profits, or the proceeds of fire and other insurance policies or compensation or awards for any taking or damage to the Property, and the application or release thereof shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. (h) Collection of Rents Beneficiaries may require any tenant or other user of the Property to make payments of rent or use fees directly to Beneficiaries, regardless of whether Beneficiaries has taken possession of the Property. If any rents are collected by Beneficiaries, then Trustor hereby irrevocably designates Beneficiaries as Trustor's attorney - in -fact to endorse instruments received in payment thereof in the name of Trustor and to negotiate the same and collect the proceeds. Payments by tenants or other users to Beneficiaries in response to Beneficiaries' demand shall satisfy the obligation for which the payments are made, whether or not any proper grounds for the demand existed. Beneficiaries may exercise its rights under this paragraph either in person, by agent or through a receiver. (i) Beneficiaries' Enforcement of Leases Beneficiaries are hereby vested with full power to use all measures, legal and equitable, deemed by it necessary or proper to collect the rents assigned in this Deed of Trust, including the right, in person or by agent, employee or court- appointed receiver, to enter upon the Property, or any part thereof, and take possession thereof forthwith to the extent necessary to effect the cure of any default on the part of Trustor as lessor in any leases or upon Trustor's default under the Loan Agreement. Trustor hereby grants to Beneficiaries full power and authority to exercise all rights, privileges and powers herein granted at any and all times hereafter, without notice to Trustor, including the right to operate and manage the Property, make and amend leases and 26 perform any other acts reasonably necessary to protect the value, priority or enforceability of any security for the obligations of the Trustor under the Loan Agreement and use and apply all of the rents and other income herein assigned to the payment of the costs of exercising such remedies, of managing and operating the Property, and of any indebtedness or liability of Trustor to Beneficiaries, including but not limited to the payment of taxes, special assessments, insurance premiums, damage claims, the costs of maintaining, repairing, rebuilding and restoring any improvements on the Property or of making the same rentable, attorneys' fees incurred in connection with the enforcement of this Deed of Trust, and any principal and interest payments due from Trustor to Beneficiaries under the Loan Agreement, the Promissory Note and this Deed of Trust, all in such order as Beneficiaries may determine. Beneficiaries shall be under no obligation to enforce any of the rights or claims assigned to it hereunder or to perform or carry out any of the obligations of the lessor under any leases and does not assume any of the liabilities in connection with or arising or growing out of the covenants and agreements of Trustor in any leases. It is further understood that this Deed of Trust shall not operate to place responsibility for the control, care, management or repair of the Property, or parts thereof, upon Beneficiaries nor shall it operate to make Beneficiaries liable for the carrying out of any of the terms and conditions of any leases, or for any waste of the Property by the lessee under any leases or by any other party, or for any dangerous or defective condition of the Property or for any negligence in the management, upkeep, repair or control of the Property resulting in loss or injury or death to any lessee, invitee, licensee, employee or stranger, except as may result from the gross negligence or willful misconduct of Beneficiaries after taking possession of the Property hereunder. 0) Beneficiaries' Enforcement of Contracts Beneficiaries shall have the right to enforce Trustor's rights under all architect, engineering, construction and related contracts and to bring an action for the breach thereof in the name of Beneficiaries or, at Beneficiaries' option, in the name of Trustor, in the event any architect, engineer, contractor or other party breaches their respective contract or contracts, regardless of whether Beneficiaries acquires or retains any interest in the Property. Trustor hereby irrevocably appoints Beneficiaries as its attomey -in -fact for the purposes of the foregoing, which power shall be durable and coupled with an interest. Beneficiaries do not assume and shall not be obligated to perform any of Trustor's obligations under said contracts nor shall Beneficiaries be required to enforce such contracts or bring action for the breach thereof, provided; however, any performance of the respective contracts specifically required by the Beneficiaries in writing, following any default by Trustor under the Loan Agreement or the contracts, and which is properly and timely undertaken by the contractor, engineer or architect, shall be paid for by the Beneficiaries in accordance with the terms and conditions of the contracts. Such payments shall be deemed additions to the amounts owed by Trustor to the Beneficiaries under the Loan Agreement and Promissory Note and secured by this Deed of Trust and shall bear interest at the rate of 10% per annum from the date of advance to and including the date of full payment, and shall be secured by any deed of trust, collateral assignment of leases and rents, security agreement and other documents granted to secure the Loan. 27 (k) Appointment of Receiver Beneficiaries have the right to have a receiver appointed to take possession of any or all of the Property, with the power to protect and preserve the Property, to operate the Property preceding foreclosure or sale, to collect the income from the Property and apply the proceeds, over and above the cost of the receivership, against the Loan. The receiver may serve without bond, if permitted by law. Beneficiaries' right to the appointment of a receiver shall exist whether or not the apparent value of the Property exceeds the indebtedness secured hereby by a substantial amount. Employment by Beneficiaries shall not disqualify a person from serving as a receiver. Upon taking possession of all or any part of the Property, the receiver or Beneficiaries may: (i) use, operate, manage, control and conduct business on the Property and make expenditures for all maintenance and improvements as in its judgment are necessary and proper; (ii) collect the income from the Property and apply such sums to the expenses of use, operation and management; and (iii) at Beneficiaries' option, complete any construction in progress on the Property, and in that connection pay bills, borrow funds, employ contractors and make any changes in plans or specifications as Beneficiaries deems reasonably necessary or appropriate. If the revenues produced by the Property are insufficient to pay expenses, the receiver may borrow, from Beneficiaries or otherwise, as Beneficiaries may deem reasonably necessary for the purposes stated in this paragraph. The amounts borrowed or advanced shall be payable on demand and bear interest from the date of expenditure until repaid at the rate of 10% per annum. Such sums shall become a part of the debt secured by this Deed of Trust. (1) Specific Enforcement Beneficiaries may specifically enforce any covenant in this Deed of Trust or the Trustor's compliance with its warranties herein and may restrain and enjoin the breach or prospective breach of any such covenant or the noncompliance with any condition and Trustor waives any requirement of the posting of any bond in connection therewith. (m) General Creditors - Remedies Beneficiaries shall have such other rights and remedies as are available under any statute or at law or in equity, generally, and the delineation of certain remedies in this Deed of Trust shall not be deemed in limitation thereof. 29. Application of Sale Proceeds After deducting all costs and expenses of Trustee and of this Deed of Trust, including cost of evidence of title and reasonable attorneys' fees in connection with sale, as above set forth, Trustee shall apply the proceeds of sale to payment of all sums expended under the terms hereof, not then repaid, with accrued interest at the rate of 10% per annum; all other sums then secured hereby; and the remainder, if any, to the Beneficiaries and any other person or persons legally entitled thereto. 30. Remedies Cumulative No remedy herein conferred upon or reserved to Trustee or Beneficiaries is intended to be exclusive of any other remedy provided herein or under the Loan Agreement or the Promissory Note, or otherwise by law provided or permitted, or provided in any guaranty given in connection with the Loan, but each shall be cumulative and shall be in addition to every other remedy. Every power or remedy given by this instrument to Trustee or Beneficiaries or to which either of them may be otherwise entitled, may be exercised concurrently or 04.1 independently, from time to time and as often as may be deemed expedient by Trustee or Beneficiaries and either of them may pursue inconsistent remedies. 31. No Waiver No waiver of any default or failure or delay to exercise any right or remedy by Beneficiaries shall operate as a waiver of any other default or of the same default in the future or a preclusion of any right or remedy with respect to the same or any other occurrence. 32. Marshaling In case of a sale under this Deed of Trust, the Property, real, personal and mixed, may be sold in one parcel. Neither Trustee nor Beneficiaries shall be required to marshal Trustor's assets. 33. SUBMISSION TO JURISDICTION (A) TRUSTOR, TO THE FULLEST EXTENT PERMITTED BY LAW, HEREBY KNOWINGLY, INTENTIONALLY AND VOLUNTARILY, WITH AND UPON THE ADVICE OF COMPETENT COUNSEL, (A) SUBMITS TO PERSONAL JURISDICTION IN THE STATE OF CALIFORNIA OVER ANY SUIT, ACTION OR PROCEEDING BY ANY PERSON ARISING FROM OR RELATING TO THIS DEED OF TRUST, (B) AGREES THAT ANY SUCH ACTION, SUIT OR PROCEEDING MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION SITTING IN LOS ANGELES COUNTY, CALIFORNIA, (C) SUBMITS TO THE JURISDICTION OF SUCH COURTS, AND, (D) TO THE FULLEST EXTENT PERMITTED BY LAW, AGREES THAT IT WILL NOT BRING ANY ACTION, SUIT OR PROCEEDING IN ANY FORUM OTHER THAN LOS ANGELES COUNTY, CALIFORNIA (BUT NOTHING HEREIN SHALL AFFECT THE RIGHT OF BENEFICIARIES TO BRING ANY ACTION, SUIT OR PROCEEDING IN ANY OTHER FORUM). TRUSTOR FURTHER CONSENTS AND AGREES TO SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER LEGAL PROCESS IN ANY SUCH SUIT, ACTION OR PROCEEDING BY REGISTERED OR CERTIFIED U.S. MAIL, POSTAGE PREPAID, TO THE TRUSTOR AT THE ADDRESS FOR NOTICES DESCRIBED HEREIN, AND CONSENTS AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE IN EVERY RESPECT VALID AND EFFECTIVE SERVICE (BUT NOTHING HEREIN SHALL AFFECT THE VALIDITY OR EFFECTIVENESS OF PROCESS SERVED IN ANY OTHER MANNER PERMITTED BY LAW). (B) TRUSTOR, TO THE FULLEST EXTENT PERMITTED BY LAW, HEREBY KNOWINGLY, INTENTIONALLY AND VOLUNTARILY, WITH AND UPON THE ADVICE OF COMPETENT COUNSEL, WAIVES, RELINQUISHES AND FOREVER FORGOES THE RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, ARISING OUT OF, OR IN ANY WAY RELATING TO THIS DEED OF TRUST OR ANY CONDUCT, ACT OR OMISSION OF BENEFICIARIES OR TRUSTOR, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE. 34. Trustor's Indemnification Trustor agrees to indemnify and hold harmless Trustee and Beneficiaries from and against any and all losses, liabilities, penalties, claims, charges, 29 costs and expenses (including attorneys' fees and disbursements) (the "Losses ") that may be imposed on, incurred or paid by or asserted against Trustee and/or Beneficiaries by reason or on account of, or in connection with: (a) any default by Trustor hereunder or under the Loan Agreement; (b) Trustee's and/or Beneficiaries' good faith and commercially reasonable exercise of any of their rights and remedies or the performance of any of their duties hereunder or under any other documents to which Trustor is a party; (c) the construction, reconstruction or alteration of the Property; (d) any negligence, willful misconduct or failure to act of Trustor, or any negligence, willful misconduct or failure to act of any lessee of the Property, or any of their respective agents, contractors, subcontractors, servants, employees, licensees or invitees; or (e) any accident, injury, death or damage to any person or property occurring in, on or about the Property or any street, drive, sidewalk, curb or passageway adjacent thereto, except for the willful misconduct or gross negligence of the indemnified person. Any amount payable to Trustee, Beneficiaries or counsel for Beneficiaries under this paragraph shall be due and payable within ten (10) days after demand therefor and receipt by Trustor of a statement from Trustee, Beneficiaries and/or counsel for Beneficiaries setting forth in reasonable detail the amount claimed and the basis therefor, and such amounts shall bear interest at the rate of 10% per annum from and after the date such amounts are paid by Beneficiaries, Trustee or counsel for Beneficiaries, until paid in full by Trustor. Trustor's obligations under this paragraph shall not be affected by the absence or unavailability of insurance covering the same or by the failure or refusal by any insurance carrier to perform any obligation on its part under any such policy of insurance. If any claim, action or proceeding is made or brought against Trustor and/or Beneficiaries that is subject to the indemnity set forth in this paragraph, Trustor shall resist or defend against the same, if necessary, in the name of Trustee and/or Beneficiaries, with attorneys for Trustor's insurance carrier (if the same is covered by insurance) or otherwise by attorneys approved by Beneficiaries. Notwithstanding the foregoing, Trustee and Beneficiaries, in their reasonable discretion, may engage their own attorneys to resist or defend, or assist therein, and Trustor shall pay, or, on demand, shall reimburse Trustee and Beneficiaries for the payment of the reasonable fees and disbursements of said attorneys. The indemnity provided for herein shall survive Trustor's payment of the Loan secured by this Deed of Trust and foreclosure, whether by judicial foreclosure, power of sale pursuant to this Deed of Trust or by deed in lieu of foreclosure. 35. Attorneys' Fees: Costs Trustor agrees to reimburse Beneficiaries for all costs, expenses expert witness and consulting fees and reasonable attorneys' fees that Beneficiaries incur in connection with the realization or enforcement of any obligation or remedy contained in this Deed of Trust, the Loan Agreement or the Promissory Note, with or without litigation, including without limitation any costs, expenses and fees incurred: (a) on appeal; (b) in any arbitration or mediation; (c) in any action contesting or seeking to restrain, enjoin, stay, or postpone the exercise of any remedy in which Beneficiaries prevails; (d) in any bankruptcy, probate, receivership or other proceeding involving Trustor; and (e) in connection with all negotiations, documentation, and other actions relating to any work -out, compromise, settlement or satisfaction of the debt secured hereby or settlement of any covenants and obligations secured by this Deed of Trust or set forth in the Loan Agreement or the Promissory Note. All such costs, expenses and fees shall be due and payable upon demand, shall bear interest from the date incurred through the date of collection at the rate of 10% per annum, and shall be secured by this Deed of Trust. 30 36. Accentance by Trustee Trustee accepts this Trust when this Deed of Trust, duly executed and acknowledged, is made a public record, as provided by law. 37. Successor Trustee Trustee may resign by an instrument in writing addressed to Beneficiaries, or Trustee may be removed at any time with or without cause by an instrument in writing executed by Beneficiaries and duly recorded. In case of the death, resignation, removal or disqualification of Trustee or if for any reason Beneficiaries shall deem it desirable to appoint a substitute or successor trustee to act instead of Trustee herein named or any substitute or successor trustee, then Beneficiaries shall have the right and is hereby authorized and empowered to appoint a successor trustee, or a substitute trustee, without other formality than appointment and designation in writing executed and acknowledged by Beneficiaries and the recordation of such writing in the office where this Deed of Trust is recorded, and the authority hereby conferred shall extend to the appointment of other successor and substitute trustees successively. Such appointment and designation by Beneficiaries shall be full evidence ofthe right and authority to make the same and of all facts therein recited. If such appointment is executed on behalf of Beneficiaries by an officer of Beneficiaries, such appointments shall be conclusively presumed to be executed with authority and shall be valid and sufficient without proof of any action by the Trustee or any officer of Beneficiaries. Upon the making of such appointment and designation, all of the estate and title of Trustee in the Property shall vest in the named successor or substitute trustee and it shall thereupon succeed to and shall hold, possess and execute all the rights, powers, privileges, immunities and duties herein conferred upon Trustee; but, nevertheless, upon the written request of Beneficiaries or of the successor substitute trustee, the Trustee shall execute and deliver an instrument transferring to such successor or substitute trustee all of the estate and title in the Property of the trustee so ceasing to act, together with all the rights, powers, privileges, immunities and duties herein conferred upon Trustee, and shall duly assign, transfer and deliver any of the properties and moneys held by the Trustee hereunder to said successor or substitute trustee. All references herein to Trustee shall be deemed to refer to any trustee (including any successor or substitute, appointed and designated, as herein provided) from time to time acting hereunder. Trustor hereby ratifies and confirms any and all acts that Trustee herein named or its successor or successors, substitute or substitutes, in this Deed of Trust, shall do lawfully by virtue hereof. 38. Reconvevance Upon written request of Beneficiaries, stating that all performances and sums secured hereby have been satisfied and paid, and upon surrender of this Deed of Trust to Trustee for cancellation and retention, and upon payment of its fees, Trustee shall reconvey, without warranty, the Property then held hereunder. The recitals in any reconveyance executed under this Deed of Trust of any matters or facts shall be conclusive proof of the truthfulness thereof. The grantee in such reconveyance may be described as "the person or persons legally entitled thereto." 39. No Releases The Property shall not be released from the lien of this Deed of Trust and no person shall be released from liability under the Loan Agreement or any other obligation secured hereby, except in the manner herein specified. Without affecting the liability of any other person for the payment and performance of any obligation herein mentioned (including Trustor should it convey said Property) and without affecting the lien or priority hereof upon any Property not released, Beneficiaries may, without notice, release any person so liable, extend the maturity or 31 maturity or modify the terms of any such obligation, grant other indulgences, make future or other advances to Trustor or any one or more parties comprising Trustor, assign or in any manner transfer this Deed of Trust, release or reconvey or cause to be released or reconveyed at any time all or part of the said Property described herein, take or release any other security or make compositions or other arrangements with debtors. Beneficiaries may also accept additional security, either concurrently herewith or thereafter, and sell same or otherwise realize thereon, either before, concurrently with, or after sale hereunder. 40. Beneficiaries Consent At any time, upon written request of Trustor, Trustor's payment of Beneficiaries' fees and presentation of this Deed of Trust (in case of full reconveyance, for cancellation and retention), without affecting the liability of any person for the payment of the indebtedness, Beneficiaries may: (a) consent to the making of any map or plat of said Property; (b) join in granting any easement or creating any restriction thereon, (c) join in any other agreement affecting this Deed of Trust or the lien or charge thereof, and (d) reconvey, without warranty, all or any part of the Property. 41. IRESERVED NO TEXTI 42. Further Assurances Trustor, from time to time, within fifteen (15) days after request by Beneficiaries, shall execute, acknowledge and deliver to Beneficiaries, such chattel mortgages, security agreements or other similar security instruments, in form and substance reasonably satisfactory to Beneficiaries, covering all property of any kind whatsoever owned by Trustor or in which Trustor has any interest which, in the reasonable opinion of Beneficiaries, is essential to the operation of the Property covered by this Deed of Trust. Trustor shall further, from time to time, within fifteen (15) days after request by Beneficiaries, execute, acknowledge and deliver any financing statement, renewal, affidavit, certificate, continuation statement or other document as Beneficiaries may reasonably request in order to perfect, preserve, continue, extend or maintain the security interest under, and the priority of, this Deed of Trust and the priority of each such chattel mortgage or other security instrument. Trustor further agrees to pay to Beneficiaries on demand all reasonable costs and expenses incurred by Beneficiaries in connection with the preparation, execution, recording, filing and refiling of any such instrument or document, including the charges for examining title and the attorneys' fees for rendering an opinion as to priority of this Deed of Trust and of such chattel mortgage or other security instrument as a valid and subsisting lien. However, neither a request so made by Beneficiaries, nor the failure of Beneficiaries to make such request shall be construed as a release of such Property, or any part thereof, from the conveyance of title under this Deed of Trust, it being understood and agreed that this covenant and any such chattel mortgage, security agreement or other similar security instrument delivered to Beneficiaries are cumulative and given as additional security. 43. Time of Performance Time is of the essence hereof in connection with all obligations of the Trustor herein and under the Loan Agreement and Promissory Note. 44. Notices The undersigned Trustor requests that a copy of any Notice of Default or Notice of Sale hereunder be mailed to it at its address as hereinbefore set forth. Any notices to be given to Trustor by Beneficiaries hereunder shall be sufficient, if personally delivered or UPI or mailed, postage prepaid, to the address of the Trustor stated hereinabove, or to such other address that Trustor has requested in writing to Beneficiaries. Any time period provided in the giving of any notice hereunder shall commence upon the date such notice is delivered or deposited with the United States Postal Service for delivery by regular fast -class postage pre -paid mail, as officially recorded on the certified mail receipt. 45. Beneficiaries' Right to Inspect Beneficiaries and their agents and representatives may enter upon the Property at all reasonable times to attend to Beneficiaries' interest and to inspect the Property. 46. Reports and Statements Trustor shall deliver to Beneficiaries, within ninety (90) days after the end of each of Trustor's fiscal years, and within twenty (20) days after Beneficiaries' request, following an Event of Default, reasonably detailed operating statements and occupancy reports in a form satisfactory to Beneficiaries covering the Property, both certified as correct by Trustor. At Beneficiaries' option, after an Event of Default, such operating statements shall be prepared by an independent certified public accountant at Trustor's expense. If Beneficiaries so request, such statements shall specify, in addition to other information requested by Beneficiaries, the rents and profits received from the Property, the disbursements made for such period, the names of the tenants of the Property and a summary of the terms of the respective leases or the rental arrangements. Trustor shall permit Beneficiaries or their representative to examine all books and records pertaining to the Property, and shall deliver to Beneficiaries all financial statements, credit reports, and other documents pertaining to the financial condition and obligations of Trustor and any tenants of the Property, and rental, income, and expense statements, audits, and tax returns relating to the Property. 47. Assignment by Beneficiaries, Participation Beneficiaries may assign this Deed of Trust in whole or in part to any person and may grant participations in any of its rights under this Deed of Trust, without notice and without affecting Trustor's liability under this Deed of Trust. In connection with any proposed assignment, participation or similar arrangement, Beneficiaries may make available to any person all credit and financial data furnished or to be famished to Beneficiaries by Trustor. Trustor agrees to provide to the person designated by Beneficiaries any information as such person may reasonably require to form a decision regarding the proposed assignment, participation or other arrangement. Trustor may not assign this Deed of Trust to any person at any time, except in connection with a transaction approved in writing by Beneficiaries, under the terms of this Deed of Trust. 48. [RESERVED NO TEXT] 49. Legal Relationships The relationship between Beneficiaries and Trustor is similar to that of lender and borrower, and no partnership, joint venture, or other similar relationship shall be inferred from this Deed of Trust. Trustor shall not have the right or authority to make representations, to act, or to incur debts or liabilities on behalf of Beneficiaries. Trustor is not executing this Deed of Trust as an agent or nominee for an undisclosed principal, and no third party beneficiaries are or shall be created by the execution of this Deed of Trust, other than by the assignment by Beneficiaries of this Deed of Trust. 33 50. [RESERVED NO TEXT] 51. Modification This Deed of Trust may be amended, modified, changed or varied only by a written agreement signed by all of the parties hereto. No requirement of this Deed of Trust may be waived, at any time, except in a writing signed by Beneficiaries and any such waiver shall be effective only as to its terms and on a single occasion. Neither, Beneficiaries' delay or omission in exercising any right, power or remedy under this Deed of Trust upon default of Trustor nor Beneficiaries' failure to insist upon strict performance of any of the covenants or agreements contained in this Deed of Trust shall be construed as a waiver of any such right, power, remedy, covenant or agreement or as an acquiescence in Trustor's breach or default. 52. Successors Subject to the prohibitions against Trustor's assignments herein, this Deed of Trust shall inure to the benefit of and bind all of the parties, their successors, estates, heirs, personal representatives and assigns. 53. Partial Invaliditv If a court of competent jurisdiction finally determines that any provision of this Deed of Trust is invalid or unenforceable, the court's determination shall not affect the validity or enforceability of the remaining provisions of this Deed of Trust. In such event, this Deed of Trust shall be construed as if it did not contain the particular provision that was determined to be invalid or unenforceable. No such determination shall affect any provision of this Deed of Trust to the extent that it is otherwise enforceable under the laws of any other applicable jurisdiction. 54. Mutual Negotiation Beneficiaries and Trustor confirm that they have mutually negotiated this Deed of Trust and that none of the terms or provisions of this Deed of Trust shall be construed against either party. 55. Paragraph Headings The paragraph headings are for convenience only and in no way define, limit, extend, or describe the scope or intent of this Deed of Trust or any of its provisions. 56. Applicable Law This Deed of Trust and the rights of the parties hereunder shall be governed by, construed and enforced in accordance with the laws of the State of California. 57. Entire Agreement This Deed of Trust, including any exhibits or addenda, contains the entire agreement of the parties with respect to the subject matter hereof 58. Counterpart s . This Deed of Trust may be executed in two or more counterparts, all of which together shall constitute one and the same instrument and lien. The signature pages of exact copies of this Deed of Trust may be attached to one copy to form one complete document. Additional copies of this Deed of Trust may be executed in counterparts and recorded in two or more counties, all of which shall constitute one and the same instrument and lien. 34 59. Fixture Filing and Recording This Deed of Trust constitutes a financing statement filed as a fixture filing under California Commercial Code Section 9502(c), as amended or recodified from time to time. This Deed of Trust is to be recorded in the real estate records of Los Angeles County, California, and covers goods that are, or are to become, fixtures. 60. Survival of Representations and Warranties All of Trustor's representations and warranties contained in this Deed of Trust shall be true and correct at all times during the term of the Loan secured hereby, until performance of all obligations set forth in the Loan Agreement and in the Promissory Note or, alternatively, full repayment of the Loan and release and reconveyance of this Deed of Trust. IN WITNESS WHEREOF, Trustor hereby duly executes this Deed of Trust and Assignment of Rents as of the day and year first above written. TRUSTOR Rio Hondo Community Development Corporation, a California public benefit corporation 0 M [NOTARY JURAT ATTACHED] 35 EXHIBIT A LEGAL DESCRIPTION OF THE PROPERTY Subject Address: 8628 Landis View Lane (1 SFD unit on lot) Legal Description: TRACT NO 701 LOT COM S 89 56' FT FROM SW COR OF LOT I P M 20 -65 TH N 0 04'W TO S LINE OF LANDISVIEW LANE TH W THEREON 56 FT TH S 0 04' E TO A PT S 89 56' W FROM BEG TH N 89 56' E 56 FT TO LOT 49 City: Rosemead County: Los Angeles State: California Zip Code: 91770 -3724 Census Tract: 4824.02 Map Reference: 46 -F4 APN: 5281- 032 -033 ;6 ATTACHMENT E RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO CITY OF ROSEMEAD 8838 E. Valley Boulevard Rosemead, California 91770 Attention: Michelle Ramirez Exempt from Recording Fee per Govermnent Code Section 27383 (SPACE ABOVE THIS LINE RESERVED FOR RECODER'S USE) CITY OF ROSEMEAD AND ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION HOME INVESTMENT PARTNERSHIP AND REDEVELOPMENT LOW AND MODERATE INCOME HOUSING FUNDS REGULATORY AGREEMENT THIS HOME INVESTMENT PARTNERSHIP AND REDEVELOPMENT LOW AND MODERATE INCOME HOUSING FUNDS REGULATORY AGREEMENT (the "REGULATORY AGREEMENT") is dated as of March 22, 2011 by and among the CITY OF ROSEMEAD, a California municipal corporation (the "CITY"), the ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION, a California municipal corporation (the "CDC ") and the RIO HONDO COMMUNITY DEVELOPMENT CORPORATION, a California public benefit corporation (the "RHCDC "). CITY, CDC and RHCDC may be referred to collectively as "Parties" or individually as a "Party." RECITALS A. WHEREAS, the CITY has received funds from the HOME Investment Partnership Act of the United States, 42 U.S.C. §12701, el seq., for the purpose of the production and operation of housing affordable to one (1) low- and moderate- income (0 to 80% of the area median family income as defined under the HOME Investment Partnerships Regulations) family; and C. WHEREAS, the CDC has funds in its Low and Moderate Housing Set Aside account which must be used for the purpose of the production and operation of housing affordable to low- and moderate- income (0 to 80% of the area median family income as defined under the HOME Investment Partnerships Regulations) families; and B. WHEREAS, the CITY and CDC, in utilizing the aforementioned funds, has acquired a total of one property located in the City of Rosemead, County of Los Angeles, State of California commonly identified as follows: (a) 8628 Landis View Lane, Rosemead, California 91770 The aforementioned property shall be collectively referred to as the "PROPERTY" and are more specifically described in the legal description attached and incorporated hereto as Exhibit "A ". C. WHEREAS, RHCDC is committed to working with the City of Rosemead's residents, community organizations, governmental agencies, and other stakeholders to provide and preserve high quality affordable housing, stabilize residential neighborhoods suffering from neglect, and promote economic opportunity and the restoration of economic vitality to areas of the community struggling with economic distress; and D. WHEREAS, the CITY and CDC have determined that the public interest shall be served by conveying the PROPERTY to RHCDC so that they may be more efficiently and expertly managed, operated and utilized as affordable residential rental property thereby furthering the public purpose of providing affordable housing for the CITY's low- and moderate - income (0 to 80% of the area median family income as defined under the HOME Investment Partnerships Regulations) families; and E. WHEREAS, the RHCDC desires to purchase the rental property; and. F. WHEREAS, the CITY has agreed to loan RHCDC funds in the amount of Two Hundred Twenty-Seven Thousand Eighty -Six Dollars ($227,086.00) and the CDC has agreed to loan RHCDC funds in the amount of Two Hundred One Thousand Three Hundred Fourteen Dollars ($201,314.00) to assist in the purchase of one property for a total of $428,400.00 to be used as an affordable low- and moderate - income rental property (as defined under the HOME Investment Partnership Regulations) for a minimum of fifty -five (55) years; and G. WHEREAS, RHCDC has agreed to acquire and operate the PROPERTY subject to the terms of this REGULATORY AGREEMENT; and H. WHEREAS, the execution and recording of this REGULATORY AGREEMENT is a condition to the CITY and CDC financing of RHCDC's acquisition of the PROPERTY. NOW, THEREFORE, IN CONSIDERATION OF THE PROMISES AND COVENANTS OF THE PARTIES CONTAINED HEREIN AND FOR OTHER GOOD AND VALUABLE CONSIDERATION, THE PARTIES COVENANT AND AGREE AS FOLLOWS: 1. PURPOSE. The purpose of this REGULATORY AGREEMENT is to set forth those duties and responsibilities of the Parties with respect to the management, operation and maintenance of the PROPERTY. 2. DEFINITIONS. The following capitalized terms shall have the following meanings under this REGULATORY AGREEMENT, unless otherwise stated herein: (a) "DEED OF TRUST" means that deed of trust for the PROPERTY which serves as security for the NOTE. (b) "HOME Regulations" means those regulations relating to the federal HOME Investment Partnership Program authorized under Titles I and II of the National Affordable Housing Act of 1990 and all related amendments and successors statutes thereto. (c) "HUD" means the Department of Housing and Urban Development of the United States of America. (d) "Loan Agreement" means that 2011 Affordable Housing Development Loan Agreement pursuant to which the loans from the CITY and the CDC are being made to RHCDC. (e) "Low Household" means low- income families whose annual incomes do not exceed fifty percent (50 %) of the area median income ( "AMI ") adjusted for family size for Los Angeles County as established and amended from time to time by HUD. (f) "Monthly Rent" means the total monthly payments for use and occupancy of the one (1) residential dwelling unit on the PROPERTY and land and facilities associated therewith; (2) any separately charged fees or service charges assessed by the RHCDC which are required of all tenants, other than security deposits; (3) a reasonable allowance for an adequate level of service of utilities, including garbage collection, sewer, water, electricity, gas and other heating, cooking and refrigeration fuels, but not including telephone service; and (4) possessory interest, taxes or other fees or charges assessed for use of the land and facilities associated therewith by a public or private entity other than RHCDC. (g) "Moderate Income" means households whose incomes are between 51 percent and 80 percent of the median income for the area, as determined by HUD, with adjustments for smaller or larger families. HUD may establish income ceilings higher or lower than 80 percent of the median for the area on the basis of HUD's findings that such variations are necessary because of prevailing levels of construction costs, fair market rents, or unusually high or low family incomes. (h) "NOTE" means that certain promissory note secured by the DEED OF TRUST and executed by RHCDC in favor of CITY and CDC in the amount of $428,400.00. (i) "Related Documents" means the NOTE, DEED OF TRUST, COVENANTS, CONDITIONS AND RESTRICTIONS, and LOAN AGREEMENT. (j) "Very -Low Income Households" means very-low income families whose annual incomes do not exceed thirty percent (30 %) of the area median income ( "AMP') adjusted for family size for Los Angeles County as established and amended from time to time by HUD. 3. DUTY TO PREVENT HAZARDOUS MATERIAL CONTAMINATION. During any rehabilitation, repair and/or operation of the PROPERTY, the RHCDC shall take all necessary precautions to prevent the release of any Hazardous Materials on, under or about the PROPERTY. Such precautions shall include compliance with all applicable federal, state, county and local governmental laws, ordinances, statutes, codes, rules, regulations, orders or decrees relating to Hazardous Materials. The RHCDC shall notify the CITY and provide to the CITY a copy or copies, of any notices of violation, notices to comply, citations, inquiries, clean-up or abatement orders, cease and desist orders, reports filed pursuant to self - reporting requirements and reports filed or applications made pursuant to any Governmental Requirements relating to Hazardous Materials and underground tanks. RHCDC shall report all incidents and releases to the CITY, as soon as possible after each incident or release and shall also report any unusual, potentially important in the event of an incident or release of any Hazardous Materials.. For the purposes of this Section 3, "Governmental Requirements" shall mean all laws, ordinances, statutes, codes, rules, regulations, orders and decrees of the United States, the State of California, the County of Los Angeles, the City of Rosemead, Rosemead Community Development Commission or any other public entity or agency with regulatory jurisdiction over the territory where the PROPERTY are located. For purposes of this Section 3, "Hazardous Materials" means any substance, material, or waste which is or becomes, regulated by any local governmental authority, the State of California, or the United States Government, including, but not limited to, any material or substance which is (i) defined as a "hazardous waste," "extremely hazardous waste," or "restricted hazardous waste" under Section 25115, 25117 or 25122.7, or listed pursuant to Section 25140 of the California Health and Safety Code, Division 20, Chapter 6.5 (Hazardous Waste Control Law); (ii) defined as a "hazardous substance" under Section 25316 of the California Health and Safety Code, Division 20, Chapter 6.8 (Carpenter - Presley- Tanner Hazardous Substance Account Act); (iii) defined as a "hazardous material," "hazardous substance," or "hazardous waste" under Section 25501 of the California Health and Safety Code, Division 20, Chapter 6.95 (Hazardous Materials Release Response Plans and Inventory); (iv) defined as a "hazardous substance" under Section 25281 of the California Health and Safety Code, Division 20, Chapter 6.7 (Underground Storage of Hazardous Substances); (v) petroleum, (vi) friable asbestos, (vii) polychlorinated byphenyls; (viii) methyl tertiary butyl ether, (ix) listed under Article 9 or defines as "hazardous" or "extremely hazardous" pursuant to Article 11 of Title 22 of the California Code of Regulations, Division 4, Chapter 20; (x) designated as "hazardous substances" pursuant to Section 311 of the Clean Water Act (33 U.S.C. §1317); (xi) defined as a "hazardous waste" pursuant to Section 1004 of the Resource Conservation and Recovery Act, 42 U.S.C. § §6901, et seq. (42 U.S.C. §6903); or (xii) defined as "hazardous substances" pursuant to Section 101 of the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. § §9601, et seq. RHCDC shall be required to submit Lead Based Paint and Asbestos Reports to the CITY and CDC regarding the PROPERTY. These reports are attached to the REGULATORY AGREEMENT as Exhibit "E " . In addition to complying with the duties and obligations of the Reports RHCDC will also comply with all Federal and state regulations as the apply to lead based paint and asbestos. 4. COMPLIANCE WITH LAWS. The RHCDC shall undertake the management, operation, maintenance, repair and/or rehabilitation of the PROPERTY in conformity with all applicable federal, state, county and local laws, ordinances, statutes, codes, rules, regulations, orders and decrees, including but not limited to, California Community Redevelopment Law, all applicable state labor standards, local zoning and development standards, building, plumbing, mechanical and electrical codes, all other provisions of the Rosemead Municipal Code, and all applicable disabled and handicapped access requirements, including without limitation the Americans With Disabilities Act, 42 U.S.C. Section 12101, et seq., Government Code Section 4450, et seq., Government Code Section 11135, et seq., and the Unruh Civil Rights, Civil Code Section 51, et seq. 5. AFFORDABII.ITY. RHCDC agrees to make available, restrict occupancy to, and rent the PROPERTY to Low Income and Moderate Income households, at an Affordable Rent as defined under the HOME Investments Partnership Program regulations If, after a tenant - household's initial occupancy of an PROPERTY the tenant - household's income increases above levels that would qualify it as a Low to Moderate Income Household, the rent charged by RHCDC may be increased to the maximum rent set forth in Section 6 hereof. To preserve the affordability of the PROPERTY, RHCDC covenants and agrees that the PROPERTY shall remain affordable for a period of fifty-five (55) years following the date of recordation of this duly executed REGULATORY AGREEMENT. m u It is intended by the Parties to this REGULATORY AGREEMENT, that the rent affordability covenant of this Section shall run with the PROPERTY with the benefit of this covenant running to the CITY and CDC and their respective successors and asigns, in order to preserve the public interest in maintaining the affordability of the PROPERTY. The terns and conditions of this REGULATORY AGREEMENT (including but not limited to, the affordability restrictions on the PROPERTY) shall remain in full force and effect, without regard to the term of any mortgage, transfer ownership, payment or pre - payment of the indebtedness evidenced by the NOTE for a period that will end no sooner than fifty -five (55) years following the date this REGULATORY AGREEMENT is recorded; this 55 -year period of affordability shall hereinafter be referred to as the "Affordability Period." 6. AFFORDABLE MONTHLY RENTS. The maximum Monthly Rent for the PROPERTY shall be annually determined by the CITY and CDC in accordance with the HOME Regulations and this REGULATORY AGREEMENT. The CITY shall transmit these annual determinations to the RHCDC each year after such Monthly Rents have been determined. As the PROPERTY shall be restricted to Low and Moderate Income households, the maximum initial Monthly Rent, less tenant -paid utility allowances, shall conform to the rent limitations set forth in Section 92.252, subdivision (b) of Title 24 of the United States Code of Federal Regulations or its successor regulation. In the event a tenant- household's income increases above levels that qualify it as a Low Income Household, yet such income remains at or below levels that qualify it as a Moderate Income Household, the Monthly Rent charged by RHCDC may be increased to conform to the rent limitations set forth in Section 92.252, subdivision (a) of Title 24 of the United States Code of Federal Regulations or its successor regulation. In the event a tenant - household's income increases above levels that qualify it as a Moderate Income Household, the Monthly Rent shall be increased in the manner provided under Section 92.252, subdivision (i) of Title 24 of the United States Code of Federal Regulations or its successor regulation. 7. ANNUAL TENANT INCOME. The methodology for calculating a tenant- household's annual income shall be the methodology set forth in Section 5.609 of Title 24 of the United States Code of Federal Regulations — a methodology commonly, and hereinafter, referred to as the "Section 8 Program Methodology." In keeping with Section 92.203(d)(1) of Title 24 of the United States Code of Federal Regulations, RHCDC shall estimate and ascertain whether a tenant - household's annual income during its initial rental period qualifies it as a Low to Moderate Income Household. The amount of Monthly Rent required to be paid by a tenant- household whose income subsequently increases above levels that qualify it as a Low to Moderate Income Household shall be subject to the provisions of Section 6 (Affordable Monthly Rents), above. 8. INCOME CERTIFICATION. RHCDC shall be responsible for monitoring and keeping itself apprised of the income status of the tenants upon the PROPERTY. The RHCDC, prior to initial occupancy of the PROPERTY by a prospective tenant - household and annually thereafter on the anniversary of the aforementioned title transfer, shall diligently verify the tenant - household's income. Such verification shall be conducted in accordance with the Section 8 Program Methodology; HUD's Technical Guide for Determining Income and Allowances for the HOME Program, Second Edition or any subsequent editions thereto; and one or more of the following methods: a. The procurement from the tenant- household of documents such as paycheck stubs, tax returns, bank statements; or b. The procurement of a verified statement and certification from the tenant - household; or c. The procurement of a true and correct certified income verification documents prepared for another governmental program, the adequacy of which, meets with CITY and CDC approval. 9. LEASE REQUIREMENTS. Prior to the rental of the PROPERTY the RHCDC shall submit a standard lease form to the CITY and CDC for its approval. The CITY shall reasonably approve such lease form upon a finding that such lease form is consistent with this REGULATORY AGREEMENT and contains all of the provisions required pursuant to the HUD's HOME Investment Partnership Program and the HOME Regulations and the California Community Redevelopment Law. The RHCDC shall enter into a written lease, in the form approved by the CITY and CDC, for the PROPERTY. No lease shall contain any of the provisions, which are prohibited pursuant to Section 92.253 of Title 24 of the United States Code of Federal Regulations. Pursuant to Section 92.253 (Tenant and Participant Protections) of Title 24 of the United States Code of Regulations and its successor regulations, such leases may not contain any of the following provisions: (a) Agreement to be sued. Agreement by the tenant to be sued, to admit guilt, or to a judgment in favor of any owner of the property (including, RHCDC, its successors or assigns) in a lawsuit brought in connection with the lease; (b) Treatment of property. An agreement by the tenant that any owner of the property (including, RHCDC, its successors or assigns) may take, hold, or sell personal property of a tenant - household members without notice to the tenant and a court decision on the rights of the parties; (c) Excusing Owner from responsibility. An agreement by the tenant not to hold any owner of the property (including RHCDC, its successors or assigns) or their respective agents legally responsible for any action or failure to act, whether intentional or negligent; (d) Waiver of notice. An agreement of the tenant that any owner of the property (including RHCDC, its successors or assigns) may institute a lawsuit without notice to the tenant; (e) Waiver of legal proceedings. An agreement by the tenant that any owner of the property (including RHCDC, its successors or assigns) may evict the tenant or household members without instituting a civil court proceeding in which the tenant has the opportunity to present a defense, or before a court decision on the rights of the parties; (f) Waiver of a jury trial. An agreement by the tenant to waive any right to a trial by jury; (g) Waiver of right to appeal court decision. An agreement by the tenant to waive the tenant's right to appeal, or to otherwise challenge in court, a court decision in connection with the lease; (h) Tenant chargeable with cost of legal actions regardless of outcome. An agreement by the tenant to pay attorney's fees or other legal costs even if the tenant wins in a court proceeding by any owner of the property (including RHCDC, its successors or assigns) against the tenant; (i) Termination of tenancy. An agreement that any owner of the property (including RHCDC, its successors or assigns) may terminate the tenancy or refuse to renew the lease of a tenant residing in rental housing assisted with HOME Program funds, except for serious or repeated violation of the terms and conditions of the lease; for violation of applicable Federal, State, or local law; or for other good cause; (j) Maintenance and replacement. An agreement that provides that any owner of the property (including RHCDC, its successors or assigns) need not maintain the premises in compliance with all applicable housing quality standards and local code requirements. Pursuant to Section 92.254 of the United States Code of Federal Regulations, the following exceptions and clarifications to the prohibitions set forth in paragraphs (a) through 0) of this Section 9 shall apply: 1. The prohibition set forth in paragraph (b) of this Section 9, does not apply to an agreement by the tenant concerning the disposition of personal property remaining in the housing unit after the tenant has moved out of the unit; under such circumstances, the owner may dispose of such personal property in accordance with the laws of the State of California. 2. The prohibition set forth in paragraph (h) of this Section 9 notwithstanding, a tenant may be obligated to pay costs if the tenant loses. 3. In order to terminate or refuse to renew a tenancy, any owner of the property (including RHCDC, its successors and assigns) must serve written notice upon the tenant specifying the grounds for the action at least thirty (30) days before the termination of the tenancy. 10. AFFIRMATIVE MARKE TING. The rental of the PROPERTY shall be conducted in accordance with the affirmative marketing requirements adopted by the CITY and the requirements of Section 92.351 of Title 24 of the United States Code of Federal Regulations, or its successor regulation, and other applicable HOME Investment Partnership Program requirements. 11. SELECTION OF TENANTS. The PROPERTY shall be leased to a tenant - household selected by the RHCDC who meet all of the requirements provided herein. The RHCDC shall adopt a tenant selection system in conformity with Section 92.253(d) of the United States Code of Federal Regulations or its successor regulations, which establishes a chronological waiting list system and/or random lottery system for selection of tenants and which shall be approved by the CITY and CDC, in it's reasonable discretion. RHCDC shall not refuse to lease to a holder of a certificate of family participation under 24 CFR part 882 (Rental Certificate Program) or a rental voucher under 24 CFR part 887 (Rental Voucher Program) or to the holder of a comparable document evidencing participation in HUD's HOME Investment Partnership Program; the Section 8 program or other tenant -based assistance programs, who is otherwise qualified to be a tenant in accordance with the approved tenant selection criteria. 12. OCCUPANCY STANDARDS. The PROPERTY is a three- bedroom residential home and shall be limited to six - persons. 13. MAINTENANCE. RHCDC shall, at all times relevant, maintain the interior and exterior of the PROPERTY in a neat, clean, sanitary and orderly condition, that complies with the maintenance standards set forth in this REGULATORY AGREEMENT and the Related Documents and that are no less stringent than HUD Housing Quality Standards; maintenance standards required by Section 92.251 of Title 24 of the United States Code of Federal Regulations, or the standard of maintenance for similar residential unit within the County of Los Angeles, State of California, whichever standard is the more stringent. If at any time RHCDC fails to maintain the PROPERTY in accordance with the maintenance standards set forth in this REGULATORY AGREEMENT or in the Related Documents, CITY or CDC shall issue notice specifying the nature of such maintenance deficiency to RHCDC. With respect to maintenance deficiencies relating to the general maintenance and up -keep of the PROPERTY or the presence of graffiti, debris or waste material, RHCDC shall cure all such 7 deficiencies within seventy-two (72) hours from the date of CITY or CDC issuance of its notice of such deficiencies. With respect to all other maintenance deficiencies (including but not limited to landscaping, landscape up -keep or structural improvements), RHCDC shall cure all such deficiencies within thirty (30) calendar days from the date of CITY or CDC issuance of its notice of such deficiencies. In the event RHCDC fails to cure any noticed maintenance deficiency within the applicable time period required, then the CITY and/or CDC in addition to whatever remedy it may have at law or in equity, shall have the right to enter upon the PROPERTY and perform all acts and work necessary to protect, maintain, and preserve the PROPERTY and landscaped areas on the PROPERTY, and to attach a lien upon the PROPERTY, or to assess the PROPERTY, in the amount of the expenditures arising from such acts and work of protection, maintenance, and preservation by the CITY and CDC and/or costs of such cure, including a reasonable administrative charge, which amount shall be promptly paid by RHCDC to the CITY and CDC, as appropriate, upon demand. Graffiti which is visible from any public right -of -way which is adjacent to, or contiguous with, the PROPERTY shall be removed by the RHCDC from any exterior surface of a structure or improvement on the PROPERTY by either painting over the evidence of such vandalism with a paint which has been color - matched to the surface on which the paint is applied, or graffiti may be removed with solvents, detergents or water as appropriate. In the event that graffiti is placed on the PROPERTY and such graffiti is visible from an adjacent or contiguous public right -of -way and thereafter such graffiti is not removed within 72 hours following the time of its application; then in such event and without notice to the RHCDC, the CITY and CDC shall have the right to enter the PROPERTY and remove the graffiti. Notwithstanding any provision of this AGREEMENT to the contrary, any sum expended by the CITY for the removal of graffiti from the PROPERTY as authorized by this Section 10(b) shall become a lien on the PROPERTY. If the amount of the lien is not paid within thirty (30) days after written demand for payment by the CITY to the RHCDC, the CITY shall have the right to enforce its lien in the manner as provided in Section 7(c). The Parties hereto further mutually understand and agree that the rights conferred upon the CITY under this section expressly include the power to establish and enforce a lien or other encumbrance against the PROPERTY, or any portion thereof, in the manner provided under Civil Code Sections 2924 et al. in the amount reasonably necessary to restore the PROPERTY to the maintenance standard forth herein or in the Related Documents, including reasonable attorneys fees and costs of the CITY associated with the abatement of the Maintenance Deficiency or removal of graffiti and the collection of the costs of the CITY in connection with such action. The provisions of this section shall be a covenant running with the land for the duration of the Affordability Period and shall be enforceable by the CITY, and its successors and assigns. Nothing in the foregoing provisions of this section shall be deemed to preclude the RHCDC from making any alterations, additions, or other changes to any structure or improvement or landscaping on the PROPERTY, provided that such changes comply with this REGULATORY AGREEMENT and other applicable law. No lien as may arise under this Section shall interfere with or be superior to the security interest of any mortgage secured by the PROPERTY. Any lease for the PROPERTY shall contain a provision acceptable to CITY and CDC whereby the tenant acknowledges and agrees to the foregoing rights of entry and rights of repair in favor of CITY and CDC and to the rights of entry provided for in Section 17. 14. MANAGEMENT PLAN. RHCDC shall submit for the approval of the CITY and CDC a "Management Plan" which sets forth in detail the RHCDC's property management duties, the affirmative marketing procedures in accordance with Section 10 (Affirmative Marketing) hereof, the tenant selection process in accordance with Section I1 (Selection of Tenants) hereof, a security system and crime prevention program, the procedures for the collection of rent, the procedures for eviction of tenants, the rules and regulations of the PROPERTY and manner of enforcement, a standard lease form in accordance with Section 9 (Lease Requirements) hereof, the identity of the manager of the PROPERTY K (the "Management Agent "), and other matters relevant to the management of the PROPERTY. The Management Plan shall require the RHCDC to adhere to a fair lease and grievance procedure and provide a plan for tenant participation in management decisions. The management of the PROPERTY shall be in compliance with the Management Plan that is approved by the CITY and CDC. If CITY and CDC, in their sole discretion, determine that the performance of the Management Agent is deficient based upon the standards set forth in the Management Plan, this REGULATORY AGREEMENT or the Related Documents, then CITY and CDC shall provide notice to the RHCDC to compel a meeting within fifteen (15) days of such notice wherein the Parties shall in good faith consider methods for improving the operation, management and/or maintenance of the PROPERTY. In the event that RHCDC or the Management Agent fail to correct its management, operation or maintenance practices to conform to the standards of this REGULATORY AGREEMENT and the Related Documents, the CITY and CDC shall have the right to require the RHCDC to immediately remove and replace the Management Agent with another Management Agent or Agency reasonably acceptable to the CITY and CDC and not related to or affiliated with the RHCDC, and possessing no less than five (5) years experience in the property management field, including significant experience managing multiple affordable residential dwelling unit properties of the size and nature involved herein. 15. RESERVE ACCOUNTS. Annually, RHCDC shall set aside no less than One Thousand Five Hundred Dollars ($1,500.00) per year, into a separate interest - bearing trust account (the "Capital Replacement Reserve "). Funds in the Capital Replacement Reserve shall be used for capital replacements to the PROPERTY fixtures and equipment that are normally capitalized under generally accepted accounting principles. The non - availability of funds in the Capital Replacement Reserve does not in any manner relieve the RHCDC of the obligation to undertake necessary capital repairs and improvements and to continue to maintain the Project in the manner prescribed herein. Not less than once per year, RHCDC, at its expense, shall submit to the CITY and CDC an accounting for the Capital Replacement Reserve. Capital repairs to, and replacement of, the PROPERTY's fixtures shall include only those items with a long useful life, including without limitation the following: carpet and drape replacement; appliance replacement; exterior painting, including exterior trim; hot water heater replacement; plumbing fixtures replacement, including tubs and showers, toilets, lavatories, sinks, faucets; air conditioning and heating replacement; asphalt repair and replacement, and seal coating; roofing repair and replacement; landscape tree replacement and irrigation pipe and controls replacement; gas line pipe replacement; and lighting fixture replacement. 16. MONITORING & RECORD KEEPING. Throughout the Affordability Period, RHCDC shall comply with all applicable record keeping and monitoring requirements set forth in Section 92.508 of Title 24 of the United States Code of Federal Regulations (or successor regulation) and shall annually complete and submit to CITY and CDC a Certification of Continuing Program Compliance in the form provided by the CITY and CDC. follows: 17. RECORD RETENTION & ACCESS TO RECORDS. Records shall be retained as (a) The Parties shall each retain this REGULATORY AGREEMENT and the Related Documents for a period of sixty (60) years from the date this duly executed REGULATORY AGREEMENT is recorded. (b) RHCDC shall retain all documentation relating to tenant income, rent and unit inspection information for a period of sixty (60) years from the date this duly executed REGULATORY AGREEMENT is recorded. 0 (c) RHCDC shall retain records related to property acquisition and any related displacements for a period of five (5) years from the date all persons displaced from the property and all persons whose property is acquired for the project have received the final payment to which they are entitled in accordance with 92.353 of Title 24 of the United States Code of Federal Regulations. (d) The Parties shall retain all other records for a period of not less than five (5) years. If any litigation, claim, negotiation audit, monitoring inspection or other action has started before the expiration of the required record retention period, records shall be retained until completion of that matter and all issues arising therefrom, or until the end of the required period, whichever is later. CITY, CDC, HUD and the Controller General of the United States, and their respective agents, officers or employees shall have the right of access to any and all pertinent books, documents, papers or other records to conduct audits, examinations or to make excerpts and transcripts. Representatives of the CITY and CDC shall further have the right (a) to enter onto the PROPERTY, upon at least twenty -four (24) hours notice to RHCDC to monitor compliance with this REGULATORY AGREEMENT and the Related Documents; (b) to inspect the records of the PROPERTY; and (c) to conduct an independent audit or inspection of such records. RHCDC agrees to cooperate with the CITY and CDC and in making the PROPERTY available for such inspection or audit. If for any reason CITY and CDC is unable to obtain the RHCDC's consent to such an inspection or audit, RHCDC understands and agrees that the CITY and CDC may obtain at RHCDC's expense an administrative inspection warrant or other appropriate legal order to obtain access to records and/or the PROPERTY themselves. 18. NON- DISCREWWATION COVENANTS. A. RHCDC covenants by and for itself, its successors 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, religion, sex, marital status, familial status, disability, national origin, or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the PROPERTY or there residential dwelling unit located therein, nor shall RHCDC 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 on the PROPERTY. RHCDC shall also comply with the equal opportunity and fair housing requirements set forth in Section 92.350 of Title 24 of the United States Code of Federal Regulations. B. RHCDC covenants and agrees for itself, its successors, its assigns and every successor in interest to the Property or any part thereof, there shall be no discrimination against or segregation of any person, or group of persons, on account of race, color, creed, national origin, sex, marital status, handicap, religion or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property nor shall the RHCDC 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, leases, subtenants, sublessees, or vendees of the Property. C. The RHCDC shall refrain from restricting the rental, sale or lease of the Property on the basis of race, color, creed, ancestry, national origin, sex, marital status, handicap, or religion of any person. All such deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: In deeds: "The grantee herein covenants by and for himself or herself, his or her 10 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, national origin, sex, religion, marital status, handicap, or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee himself or herself or any person claiming under or through him or her, 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 land herein conveyed. The foregoing covenants shall run with the land." 2. In leases: "The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through him or her, and this lease is made and accepted upon and subject to the following conditions: That there shall be no discrimination against or segregation of any person or group of persons, on account of race, color, creed, national origin, sex, marital status, handicap, religion, or ancestry, in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the premises herein leased nor shall the lessee himself or herself, or any person claiming under or through him or her, 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, sublessees, subtenants or vendees in the premises herein leased." 3. In contracts: "There shall be no discrimination against or segregation of, any person, or group of persons on account of race, color, creed, national origin, sex, religion, marital status, handicap, or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the premises, nor shall the transferee himself or herself or any person claiming under or through him or her, 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 of the premises." D. The covenants established in this Agreement shall, without regard to technical classification and designation, be binding for the benefit and in favor of the Agency, its successors and assigns, the City and any successor in interest to the Property or any part thereof. The covenants contained in this section shall remain in perpetuity. 19. Indemnity and Insurance A. RHCDC shall defend, indemnify, assume all responsibility for and hold the CDC and the CITY, and their respective elected and appointed officials, officers, agents and employees, harmless from all costs (including attorneys' fees and costs), claims, demands or judgments for injury or damage to property and injuries to persons, including death, which may be caused by any of RHCDC's activities under this Agreement, whether such activities or performance thereof be by the RHCDC or anyone directly or indirectly employed or contracted with by the RHCDC and whether such damage shall accrue or be discovered before or after termination of this Agreement. B. Not in derogation of the indemnity provisions of this Section, the RHCDC shall take out and maintain during the life of this Agreement the following: 1. A comprehensive general liability insurance policy in the amount of at least $2,000,000 combined single limit, or such greater amount as CITY and CDC may 11 require, naming the CITY and CDC as additional insureds. RHCDC shall also insure the Property (fire, etc.) for the full acquisition amount. 2. A policy of workers' compensation insurance in such amount as will fully comply with the California laws and which shall indemnify, insure and provide legal defense for the RHCDC against any loss, claim or damage arising from any injuries or occupational diseases occurring to any worker employed by or any persons retained by the RHCDC in the course of carrying out the activities in the CC&Rs. 3. A policy of comprehensive automobile liability insurance written on a per occurrence basis in an amount not less than either (i) bodily injury liability limits of FIVE HUNDRED THOUSAND DOLLARS ($500,000.00) per person and ONE MILLION DOLLARS ($1,000,000.00) per occurrence and (ii) property damage liability limits of TWO HUNDRED THOUSAND DOLLARS ($200,000.00) per occurrence and FIVE HUNDRED THOUSAND DOLLARS ($500,000.00) in the aggregate. Said policy shall include coverage for owned, non - owned, leased and hired vehicles. C. All policies of insurance shall be primary insurance and not contributing with any insurance which may be maintained by CITY or CDC, and shall name the CITY and the CDC, and their officers, employees, and agents as additional insureds. The insurer shall waive all rights of subrogation and contribution it may have against the CITY and/or the CDC and their officers, employees and agents and their respective insurers. All of said policies of insurance shall provide that said insurance may not be amended or canceled without providing thirty (30) calendar days prior written notice by registered mail to the CITY and CDC. In the event any of said policies of insurance are canceled, the RHCDC shall, prior to the cancellation date, submit new evidence of insurance in conformance with Section 4.3 to the CITY Manager /CDC Executive Director. No operation of the Project shall commence until the RHCDC has provided the CITY and CDC with certificates of insurance or appropriate insurance binders evidencing the above insurance coverage, and said certificates of insurance or binders are approved by the CITY and CDC. If CITY and CDC determine that the limits of any insurance carried by RHCDC are inadequate or that additional coverage is required, RHCDC shall, within 10 days after written notice from CITY and CDC, procure such additional coverage as CITY and CDC may require in their sole and absolute discretion. 20. DEFAULTS & REMEDIES. Defaults under this REGULATORY AGREEMENT and remedies therefore shall be governed by the default provisions of the DEED OF TRUST. 21. WAIVER OF TERMS & CONDITIONS. Either Party may, in its sole discretion, agree to waive any duty or obligation owed to it by the other Party under this REGULATORY AGREEMENT, provided such waiver is (a) in writing; and (b) permitted under the HOME Investment Partnership Program or under regulations set forth by HUD. Any waiver that does not satisfy the foregoing conditions shall be invalid Waivers of any covenant, term, or condition contained herein shall not be construed as a waiver of any subsequent breach of the same covenant, term, or condition. 22. NON - LIABILITY OF CITY OFFICIALS & EMPLOYEES. No member, official, officer, employee or agent of the CITY or CDC shall be personally liable to the RHCDC, or any successor in interest, in the event of any default or breach by the CITY or CDC or for any amount which may become due to the RHCDC or its successors, or on any obligations under the terms of this REGULATORY AGREEMENT. lye 23. TIME. Time is of the essence under this REGULATORY AGREEMENT. The Parties acknowledge and agree that the time periods set forth herein are to be strictly adhered to, unless otherwise provided under this REGULATORY AGREEMENT or unless strict compliance with such time periods is properly waived. 24. NOTICES. Any approval, disapproval, demand, document or other notice ( "Notice ") which either party may desire to give to the other party under this REGULATORY AGREEMENT must be in writing and may be given either by (i) personal service; (ii) delivery by reputable document delivery service such as Federal Express that provides a receipt showing date and time of delivery, (iii) mailing in the United States mail, certified mail, postage prepaid, return receipt requested, addressed to the address of the party as set forth below, or at any other address that party may later designate by Notice: CITY /CDC: City of Rosemead Community Development Department 8838 E. Valley Boulevard Rosemead, California 91770 Attention: Jeff Allred, City Manager c/o Michelle Ramirez, Community Development Manager RHCDC: Rio Hondo Community Development Corporation 1104 Valley Boulevard, Suite 201 El Monte, California 91731 Attention: Donna Duncan, President Notice shall be deemed given on the date of personal delivery, the five (5) from the date deposited with the United States Postal Service if by regular mail; or the date upon which notice is received if by certified mail or reputable document delivery service such as Federal Express. Such addresses may be changed by notice to the other party given in the same manner as provided above. 25. EFFECTIVE DATE; AGREEMENT TERM; SUCCESSORS & ASSIGNS. This REGULATORY AGREEMENT shall become effective upon the date it is signed and duly executed by all of the Parties. The REGULATORY AGREEMENT and all terms, conditions and restrictions contained herein shall continue in full force and effect for a period that shall end fifty -five (55) years following the date this duly executed REGULATORY AGREEMENT is recorded, ; this period shall be referred to as the "Contract Term." This REGULATORY AGREEMENT and all covenants, terms, conditions and restrictions contained herein shall run with the land, and shall be binding upon the RHCDC, the CITY, their respective successors and assigns, and any subsequent owner of the PROPERTY for the duration of the Contract Term. Whenever the term "RHCDC," or "CITY "or "CDC" is used in this REGULATORY AGREEMENT, such term shall include any other successors and assigns. 26. NO THIRD PARTY BENEFIT. This REGULATORY AGREEMENT is made and entered into for the sole protection and benefit of the CITY and CDC, and RHCDC, and no other person or persons shall have any right of action hereon. 27. PARTIAL INVAILIDITY. If any provision of this REGULATORY AGREEMENT shall be declared invalid, illegal, or unenforceable, the validity, legality, and enforceability of the remaining provisions hereof shall not in any way be affected or impaired. 28. GOVERNING LAW. This REGULATORY AGREEMENT and the Related Documents shall be construed in accordance with and be governed by the laws of the State of California, 13 except to the extent any of its provisions are exclusively governed by federal law. Any references herein to particular statutes or regulations shall be deemed to refer to successor statutes or regulations, or amendments thereto. 29. CORPORATE AUTHORITY. The persons executing this REGULATORYAGREEMENT on behalf of the Parties hereto warrant that they are duly authorized to execute this REGULATORY AGREEMENT on behalf of said Parties and that by doing so, the Parties hereto are formally bound to the provisions of this REGULATORY AGREEMENT. 30. ENTIRE AGREEMENT. This REGULATORY AGREEMENT and the Related Documents constitute the entire, complete, final and exclusive expression of the Parties with respect to the matters addressed herein and supersedes all other agreements or understandings, whether oral or written, or entered into by the Parties prior to the execution of the REGULATORY AGREEMENT and the Related Documents. No statements, representations or other agreements, whether oral or written, made by any Party which are not embodied herein shall be valid or binding. No amendment to, or modification of, this REGULATORY AGREEMENT or the Related Documents shall be valid or binding unless in writing and duly signed and executed by each of the Parties. 31. AMENDMENT. This REGULATORY AGREEMENT may not be modified or amended orally. Any contemplated modification or amendment shall be made by mutual written agreement of the Parties. 32. RESOLVING INCONSISTANCY WITH RELATED DOCUMENTS. In the event of inconsistency between this REGULATORY AGREEMENT and any of the Related Documents, this REGULATORY AGREEMENT shall control. [Signatures are on the Next Page] 14 IN WITNESS WHEREOF, the parties hereto have executed this REGULATORY AGREEMENT as of the 22 "" Day of March 2011. CITY OF ROSEMEAD, a municipal corporation RIO HONDO COMMUNITY DEVELOPMENT CORPORATION, a California public benefit corporation By: Steven Ly, Mayor Date: Jeff Allred, City Manager Date: APPROVED AS TO FORM: By: Rachel Richman, City Attorney Burke, Williams & Sorensen, LLP Date: ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION, a municipal corporation By: Steven Ly, Chairman Jeff Allred, Executive Director Date: APPROVED AS TO FORM: Rachel Richman, Legal Counsel Burke, Williams & Sorensen, LLP Date: By: Donna Duncan, President Date: Date: W 1*3 LEGAL DESCRIPTION OF THE PROPERTY Subject Address: 8628 Landis View Lane (1 SFD unit on lot) Legal Description: TRACT NO 701 LOT COM S 89 56' FT FROM SW COR OF LOT 1 P M 20-65 TH N 0 04'W TO S LINE OF LANDISVIEW LANE TH W THEREON 56 FT TH S 0 04' E TO A PT S 89 56' W FROM BEG TH N 89 56'E 56 FT TO LOT 49 City: Rosemead County: Los Angeles State: California Zip Code: 91770 -3724 Census Tract: 4824.02 Map Reference: 46 -174 APN: 5281- 032 -033 16 wMtiH _� n 0`Oe e�. EXHIBIT B PROPERTY PARCEL MAP — � t � nr •ri _ J V Slyli � F y a}Q o z x Ri n 1 � O O N P d, Z Zi u W W N H f N N o nnM� gR z• ° u u$mu Ex h g + H 6J !� JQ GO N� V W � J W a< �o y y J 6Q z 7 0 U N CI i 00 fw N I� Z sa 1 0 4 Y in m ar I Q © P O J' I a) r��ii4l� '3AV 3AOH9 1f1NlVM 18 O � ,) w I Q © P O J' I a) r��ii4l� '3AV 3AOH9 1f1NlVM 18 ®o � o o� J ss+a, w r� bsl +• ✓4n� ++ +r 0 Q T m f O Z U Q F ®o � o o� J ss+a, w r� bsl +• ✓4n� ++ +r 0 Q T m f O Z U Q F � C I cm <(l 7 O a y P nav 1 P � try � 4 i y Y n Y ©d a® a f O L � i xi V sr � 0 � V V 0 An a a 1 � v N N a m g m g� u Z Q i F �I e YI 19 � a+f faj.`i•ii:7r1[� DEED OF TRUST 20 ATTACHMENT F RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: CITY OF ROSEMEAD 8838 E. Valley Boulevard Rosemead, California 91770 Attention: Michelle Ramirez Exempt from Recording Fee per Government Code Section 27383 (SPACE ABOVE THIS LINE RESERVED FOR RECODER'S USE) 8628 Landis View Lane, Rosemead AFFORDABLE HOUSING DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS by RIO HONDO COMMUNITY DEVELOPMENT CORPORATION a California non - profit corporation For the benefit of THE CITY OF ROSEMEAD, and THE ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION [Reference dated as of March 22, 2011 This AFFORDABLE HOUSING DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS ( "CC &Rs ") dated March 22, 2011 is made by RIO HONDO COMMUNITY DEVELOPMENT CORP., ( "RHCDC ") a California non -profit corporation and community housing development organization, for the benefit of the CITY OF ROSEMEAD ( "City") and the ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION ( "CDC "). The City, CDC and the RHCDC are sometimes referred to in these CC &Rs, individually, as a "Party" and, collectively, as "Parties." These CC &Rs are entered into with reference to the following recitals of fact ( "Recitals "): RECITALS A. The City, CDC and the RHCDC have entered into that certain Regulatory Agreement, dated March 22, 2011 (the "Regulatory Agreement "). The Regulatory Agreement provides for, among other things, the acquisition of the Property described in Exhibit I attached hereto (the "Property "), and the minor renovation and operation of same as a single family rental property for a low- to moderate- income (0 to 80% of the area median family income as defined under the HOME Investment Partnerships Regulations) household (the "Project ") by RHCDC. Financing for such acquisition and renovation has been provided by City and CDC in the form of funds from the City's allocation of Federal HOME funds and the CDC's low and moderate income set aside funds. B. The terms of the Regulatory Agreement require that certain affordability restrictions remain in full force and effect on the Property for a term of fifty -five (55) years following the recordation of a Certificate of Completion for the Project in order to ensure that an affordable low- to moderate - income (0 to 80% of Area Median Income) rental property (as defined under the HOME Investment Partnership Regulations) in the Project is restricted for lease to households at the low- to moderate - income affordability level, as further defined herein. NOW, THEREFORE, THE RHCDC DOES COVENANT AND AGREE ON BEHALF OF ITSELF, ITS SUCCESSORS AND ASSIGNS AS FOLLOWS: 1. Definitions of Certain Terms As used in these CC &Rs, the following words and terms shall have the meaning as provided in the Recitals or in this Section 1, unless the specific context of usage of a particular word or term may otherwise require: 1.1 Low Income Household. The term "Low Income Household" shall mean an individual or household that has an annual income that does not exceed fifty percent (50 %) of the area median income ( "AMI ") adjusted for family size for Los Angeles County as established and amended from time to time by the United States Department of Housing and Urban Development ( "HUD "). 1.2 Moderate Income Household. The term "Moderate Income Household" shall mean an individual or household that has an income that does not exceed eighty percent (80 %) of the area median income ( "AMI ") adjusted for family size for Los Angeles County as established and amended from time to time by HUD. I 1.3 Affordable Rent. The term "Affordable Rent" shall have the same meaning as set forth in California Health and Safety Code Section 50053, and in 24 CFR Part 92.252, as those sections may hereafter be amended from time -to -time, and shall provide an allowance for utilities and maintenance costs established by the State of California Department of Housing and Community Development, in accordance with adjustment factors adopted and amended by HUD pursuant to Section 8 of the United States Housing Act of 1937. To the extent there is a conflict between the definitions/calculations found in Federal and State Law, the calculation that yields the lowest rent shall be used. 1.4 Certificate of Completion. The term "Certificate of Completion" shall mean the written certification of the CDC that the development of the Project is complete and in compliance with the terms and conditions of the Regulatory Agreement. 1.5 Deed of Trust. The term "Deed of Trust" shall mean the Deed of Trust, Assignment of Leases and Rents, Fixture Filing and Security Agreement, dated the date of the Promissory Note, by and among the RHCDC, as Trustor, United Title Company, as Trustee, and the City and the CDC, as Beneficiaries. 1.6 Loan Agreement. The term "Loan Agreement" shall mean the 2011 Affordable Housing Development Loan Agreement, dated the date hereof, between RHCDC, the City and CDC. 1.7 Promissory Note. The term "Promissory Note" shall mean the Promissory Note, dated the date hereof, by RHCDC, as maker, in favor of the City and CDC, as holder. 1.8 Qualifying Household. The words "Qualifying Household" shall mean a household that has an income that does not exceed the Qualifying Household Income applicable to the unit occupied or to be occupied by such household. 1.9 Qualifying Household Income. The words "Qualifying Household Income" mean a household income that does not exceed 80% of the area Median Family Income, as adopted annually by the U.S. Department of Housing and Urban Development, at the commencement of the occupancy of such unit and upon any renewal of a lease. 1.10 Term. The word "Term" shall mean the period of time beginning on the date of the recordation of the Deed of Trust and ending on the fifty -fifth (55th) anniversary thereafter. 2. Covenant of RHCDC to Rent to Oualifying Households: Covenant of RHCDC to Charge Affordable Rent; Covenants of RHCDC Regarding Maintenance of Records 2.1 During the Term, the RHCDC covenants that the Project shall at all times be occupied or held vacant and available for rental at an Affordable Rent, with the Property leased to Moderate Income Households at an Affordable Rent calculated for such households. 2.2 Determination of Qualifying Household Income shall be made by the RHCDC at the time of initial occupancy of a unit and upon each renewal of a Qualifying 2 Household's lease. The RHCDC shall obtain, prior to initial occupancy and upon each lease renewal and, thereafter, maintain on file, income certifications from each Qualifying Household renting any of the units in the Project in the form provided in Exhibit 2 attached hereto and incorporated herein by reference. The RHCDC shall make a good faith effort to verify that the income information provided by an applicant (or occupying Qualifying Household) in an income certification is accurate by taking one or more of the following steps as a part of the verification process: 2.2.1 Obtain an income tax return for the most recent tax year; 2.2.2 Obtain an income verification form from the applicant's current employer; 2.2.3 Obtain an income verification form from the United States Social Security Administration and/or the California Department of Social Services, if the applicant receives assistance from either of such agencies; or 2.2.4 If the applicant is unemployed and has no such tax return, obtain another foam of independent verification. 2.3 All such verification information described in Section 2.2 shall only be obtained by the RHCDC after obtaining the Qualifying Household's written consent for the release of such information to the RHCDC. On the annual anniversary of the occupancy of the property, the RHCDC shall recertify the household income of the Qualifying Household occupying such unit. Any tenants whose income no longer qualifies due to increases in household income shall be required to vacate the property at the conclusion of their leases. Copies of any and all completed tenant income certifications shall be available to the City and CDC upon request. 2.4 The RHCDC covenants that no Qualified Household shall pay an amount in excess of Affordable Rent for such Qualified Household's income level. 2.5 Rent increases shall comply with the requirements of 24 CFR Part 92.252, and sections amendatory and supplementary thereto. 2.6 The RHCDC and all Qualifying Households shall permit the City and CDC to conduct inspections of the Property and the Project from time -to -time for purposes of verifying compliance with these CC &Rs, upon two (2) calendar days prior written notice to the RHCDC. 2.7 Records shall be established and maintained by the RHCDC relating to the use and occupancy of the Property and the Project for affordable rental housing use purposes, as authorized herein. The RHCDC shall be responsible for establishing and maintaining such records during the Tenn of these CC &Rs, and the RHCDC shall provide the City and CDC with copies of such records within thirty (30) calendar days of written request by the City or CDC. 2.8 Commencing on the June 30 following the first (1st) anniversary of the date of recordation of these CC &Rs, and on each June 30 thereafter during the Term, RHCDC shall submit a report to the City and CDC, in the form provided in Exhibit 3 , attached hereto and incorporated herein ( "Annual Report "). The Annual Report shall include for the property in the Project, the rent, income, and family size of the Qualifying Household occupying the property. The Annual Report shall also state the date the tenancy commenced and such other information as the CDC may be required by law to obtain; provided, however, that the CDC shall take reasonable steps to maintain the confidential nature of the information contained in any Annual Report specifically relating to the property. The RHCDC shall provide any additional information reasonably requested by the City or CDC, including without limitation Project - related income and expense accounting information. 2.9 The City and CDC shall have the right to examine and make copies of all books, records or other documents of the RHCDC which pertain to any unit; provided, however, that the City and CDC shall take reasonable steps to maintain the confidential nature of such information. The RHCDC shall maintain complete, accurate and current records pertaining to the units, the Property and the Project, and shall permit any duly authorized representative of the City or CDC (during normal business hours and upon not less than seventy-two (72) hours notice) to inspect such records, including records pertaining to income and household size of Qualifying Households; provided, however, that the City and CDC shall take reasonable steps to maintain the confidential nature of information relating to any specific household. 3. Covenant of RHCDC Regarding Contract Terms For Units in the Proiect The RHCDC for itself, its successors and assigns hereby covenants and agrees that, in connection with the rental/lease of units in the Project to Qualifying Households during the Term, it shall comply with the following requirements: 3.1 The rental agreement or lease between the RHCDC and the Qualifying Household shall be for not less than one (1) year, and shall be consistent with the requirements of 24 CFR Part 92.253, and sections amendatory and supplementary thereto. 3.2 The RHCDC shall not terminate the tenancy or refuse to renew the rental agreement or lease of a Qualifying Household, except for serious or repeated violations of the terms and conditions of the rental agreement or lease; for violation of applicable federal, state, or local law; or for other good cause. The RHCDC shall, in connection with a termination of a tenancy or a refusal to renew a rental agreement or lease, serve written notice upon the Qualifying Household specifying the grounds for the action, at least thirty (30) calendar days before the termination of the tenancy. 3.3 The RHCDC shall adopt written tenant selection policies and criteria that: 3.3.1 are consistent with the purpose of providing housing for individuals who have an income that is no more than the Qualifying Household Income; 3.3.2 are reasonably related to program eligibility and the applicants' ability to perform the obligations of the lease; 3.3.3 provide for the selection of tenants from a written waiting list in the chronological order of their application, insofar as is practicable; and 4 3.3.4 give prompt written notification to any rejected applicant of the grounds for rejection. 3.4 All units shall be available at an Affordable Rent for occupancy on a continuous basis to the appropriate Qualifying Households. There shall be no discrimination against or segregation of any person or group of persons, on account of race, color, religion, sex, sexual orientation, marital status, national origin, ancestry, familial status, source of income or disability in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of any Unit. All deeds, leases or contracts made or entered into by the RHCDC as to the units, the Project or the Property or any portion thereof, shall contain covenants prohibiting discrimination, as prescribed by these CC &Rs and as required by California Health and Safety Code section 33436. Additionally, RHCDC agrees to comply with the non - discrimination requirements of 24 CFR Part 92.350. 4. Development and Management of the Project 4.1 The RHCDC shall be responsible for management of the Project, including, without limitation, the selection of Qualifying Households, certification and recertification of household size, and income of tenants of all units, evictions, collection of rents and deposits, maintenance, landscaping, routine and extraordinary repairs, replacement of capital items, and security. Neither the City nor the CDC shall have any responsibility for the management or operation of the Project or the Property. The Project shall at all times be managed by RHCDC or an experienced management agent ( "Management Agent") reasonably acceptable to the City and CDC, with demonstrated ability to operate residential rental facilities similar to the Project in a manner that will provide decent, safe, and sanitary housing. For the purposes hereof, if the RHCDC directly performs the functions of the Management Agent by its employees or by means of a service contract with an entity which is a partner in the RHCDC, such a Management Agent shall be deemed approved by the City and CDC. If the Management Agent is an entity or person other than the RHCDC, its employees, a partner in the RHCDC or an entity owned or controlled by the RHCDC or which owns and/or controls the RHCDC, the RHCDC shall submit for the City's and CDC's approval the identity of any proposed Management Agent, together with additional information relevant to the background, experience and financial condition of any proposed Management Agent, as reasonably requested by the City and CDC. If the proposed Management Agent meets the standard for a qualified Management Agent set forth above, the City and CDC shall approve the proposed Management Agent by notifying the RHCDC in writing. 4.2 The RHCDC shall cause to be in full force and effect during the Term hereof insurance coverage, as follows: 4.2.1 not in derogation of the indemnity provisions of this Section, the RHCDC shall take out and maintain during the life of these CC &R's a comprehensive general liability insurance policy in an amount of at least $2,000,000 combined single limit, or such greater amount as CITY and CDC may require, naming the City and CDC as additional insureds. RHCDC shall also insure the Property (fire, etc.) for the full acquisition amount. 4.2.2 a policy of workers' compensation insurance in such amount as will fully comply with the California laws and which shall indemnify, insure and provide legal defense for the RHCDC against any loss, claim or damage arising from any injuries or occupational diseases occurring to any worker employed by or any persons retained by the RHCDC in the course of carrying out the activities in these CC &Rs. 4.2.3 a policy of comprehensive automobile liability insurance written on a per occurrence basis in an amount not less than either (i) bodily injury liability limits of FIVE HUNDRED THOUSAND DOLLARS ($500,000.00) per person and ONE MILLION DOLLARS ($1,000,000.00) per occurrence and (ii) property damage liability limits of TWO HUNDRED THOUSAND DOLLARS ($200,000.00) per occurrence and FIVE HUNDRED THOUSAND DOLLARS ($500,000.00) in the aggregate. Said policy shall include coverage for owned, non - owned, leased and hired vehicles. 4.3 All policies of insurance shall be primary insurance and not contributing with any insurance which may be maintained by CITY or CDC, and shall name the City and the CDC, and their officers, employees, and agents as additional insureds. The insurer shall waive all rights of subrogation and contribution it may have against the City and/or the CDC and their officers, employees and agents and their respective insurers. All of said policies of insurance shall provide that said insurance may not be amended or canceled without providing thirty (30) calendar days prior written notice by registered mail to the City and CDC. In the event any of said policies of insurance are canceled, the RHCDC shall, prior to the cancellation date, submit new evidence of insurance in conformance with Section 4.3 to the City Manager /CDC Executive Director. No operation of the Project shall commence until the RHCDC has provided the City and CDC with certificates of insurance or appropriate insurance binders evidencing the above insurance coverage, and said certificates of insurance or binders are approved by the City and CDC. If CITY and CDC determine that the limits of any insurance carried by RHCDC are inadequate or that additional coverage is required, RHCDC shall, within 10 days after written notice from CITY and CDC, procure such additional coverage as CITY and CDC may require in their sole and absolute discretion. 4.4 The policies of insurance required by these CC &R's shall be satisfactory only if issued by companies qualified to do business in California, rated at least "A" or better in the most recent edition of Best Insurance Rating Guide or an equivalent rating in The Key Rating Guide or in the Federal Register unless such requirements are modified or waived by the Executive Director of the CDC due to unique circumstances. 4.5 The RHCDC agrees that the provisions of Section 4 shall not be construed as limiting in any way the extent to which the RHCDC may be held responsible for the payment of damages to any persons or property resulting from the RHCDC's activities or the activities of any person or persons for which the RHCDC is otherwise responsible. 5. Maintenance of the Project The RHCDC, for itself, its successors and assigns, hereby covenants and agrees that the Project shall be maintained in good repair and in a neat, clean and orderly condition, ordinary wear and tear excepted. In the event that at any time during the Term, there is an occurrence of an adverse condition on any area of the Project in contravention of the general maintenance standard described above, ( "Maintenance 0 Deficiency ") then the City or CDC shall notify the RHCDC in writing of the Maintenance Deficiency and give the RHCDC thirty (30) calendar days from the date of such notice to cure the Maintenance Deficiency as identified in the notice. The words "Maintenance Deficiency" include without limitation: (i) failure to properly maintain the windows, structural elements, and painted exterior surface areas of the dwelling units in a clean and presentable manner; (ii) failure to keep the Project free of accumulated debris, appliances, inoperable motor vehicles or motor vehicle parts, or free of storage of lumber, building materials or equipment not regularly in use on the Property; (iii) failure to regularly maintain, replace and renew the landscaping in a reasonable condition free of weed and debris; (iv) graffiti on the Property; and (v) the use of garage area on the Project for purposes other than the parking of motor vehicles and the storage of personal possessions and mechanical equipment of persons residing in the Project. 5.1 In the event the RHCDC fails to cure or commence to cure the Maintenance Deficiency within the time allowed, the City or CDC may cause such Maintenance Deficiency to be cured or corrected. Any sum expended by the City or CDC for the abatement of a Maintenance Deficiency as authorized by this Section 5.1 shall become a lien on the Project. If the amount of the lien is not paid within thirty (30) calendar days after written demand for payment by the City or CDC to the "CDC, the City or CDC shall have the right to enforce the lien in the manner as provided in Section 5.2. 5.2 The Parties hereto further mutually understand and agree that the rights conferred upon the City and CDC under this Section 5 expressly include a right of entry for the purpose of correcting any uncured Maintenance Deficiency and the power to establish and enforce a lien or other encumbrance against the Property in the manner provided under California Civil Code Sections 2924, 2924b and 2924c in the amount as reasonably necessary to restore the Project to the maintenance standards required under Section 5.1, including attorneys fees and costs of the City and CDC associated with the abatement of the Maintenance Deficiency and the collection of the costs of the City and CDC in connection with such action. In any legal proceeding for enforcing such a lien against the Project, the prevailing party shall be entitled to recover its attorneys' fees and costs of suit. Any lease for the Project shall contain a provision acceptable to City and CDC whereby the tenant acknowledges and agrees to the foregoing rights of entry and cure rights in favor of City and CDC. 6. Covenants to Run With the Land The RHCDC hereby declares its specific intent that the covenants, reservations and restrictions set forth herein are part of a plan for the promotion and preservation of affordable housing by the City and CDC and that each shall be deemed covenants running with the land and shall pass to and be binding upon the Property and each successor -in- interest of the RHCDC in the Property for the Term. The RHCDC hereby expressly assumes the duty and obligation to perform each of the covenants and to honor each of the reservations and restrictions set forth in these CC &Rs. Each and every contract, deed or other instrument hereafter executed covering or conveying the Property or any interest therein shall conclusively be held to have been executed, delivered and accepted subject to such covenants, reservations, and restrictions, regardless of whether such covenants, reservations and restrictions are set forth in such contract, deed or other instrument. 7. Burden and Benefit The RHCDC hereby declares its understanding and intent that the burden of the covenants set forth herein touch and concern the land in that the RHCDC's 7 legal interest in the Property is affected by the affordable dwelling use and occupancy covenants hereunder. The RHCDC hereby further declares it's their understanding and intent that the benefit of such covenants touch and concern the land by enhancing and increasing the enjoyment and use of the Property by the intended beneficiaries of such covenants, reservations and restrictions, and by furthering the affordable housing goals and objectives of the City and CDC. 8. Term. The provisions of these CC &Rs shall apply to the Property for a term of fifty -five (55) years following the date of recordation of the Certificate of Completion for the Project. 9. Defaults 9.1 Events of Default The occurrence of any of the following is a default and shall constitute a material breach of these CC&Rs and, if not corrected, cured or remedied in the time period set forth in Section 9.2, shall constitute an "Event of Default" hereunder: 9.1.1 failure of the RHCDC or any person under its direction or control to comply with or perform when due any material term, obligation, covenant or condition contained in these CC &Rs, including, but not limited to, the affordability and maintenance covenants contained herein; 9.1.2 any warranty, representation or statement made or finnished to the City or CDC by the RHCDC under these CC &Rs is false or misleading in any material respect either now or at the time made or furnished; 9.1.3 the dissolution or termination of the existence of the RHCDC as an ongoing business, insolvency, appoint of a receiver for any part of the property of the RHCDC, any assignment for the benefit of creditors, any type of creditor workout or the commencement of any proceeding under any bankruptcy or insolvency laws by or against the RHCDC. 9.1.4 any violations of the provisions of the CC &Rs, Regulatory Agreement, Deed of Trust, Loan Agreement, Promissory Note, or any related agreements, including the failure to operate or make the Rental Housing Facility available for occupancy to persons and households of low - and moderate - income, by RHCDC is a default as to all documents, and the City and the CDC reserve the right to exercise any and all remedies under the law against RHCDC, as provided for in Section 10 of these CC &R's. 9.2 Notice of Default The City or CDC shall give written notice of default to the RHCDC, stating that such notice is a "Notice of Default," specifying the default complained of by the City or CDC and requiring the default to be remedied within thirty (30) calendar days of the date of the Notice of Default. Except as required to protect against further material damage, the City and CDC may not institute legal proceedings against the RHCDC until thirty (30) calendar days after giving notice. Failure or delay in giving notice shall not constitute a waiver of any default, nor shall it change the time of occurrence of the default. If the default specified in the Notice of Default is such that it is not reasonably capable of being cured within thirty (30) calendar days, and if the RHCDC initiates corrective action within said thirty (30) calendar day period and diligently works to effect a cure as soon as possible, then the RHCDC may have such additional time as authorized in writing by the City or CDC as reasonably necessary to complete the cure of the breach prior to exercise of any other remedy for the occurrence of an Event of Default. Such authorization for additional time to cure shall not be unreasonably withheld. If the RHCDC fails to take corrective action relating to a default within thirty (30) calendar days following the date of notice (or to complete the cure within the additional as may be authorized by the City or CDC), an Event of Default shall be deemed to have occurred. 9.3 Inaction Not a Waiver of Default Any failure or delays by the City or CDC in asserting any of their rights and remedies as to any default or Event of Default shall not operate as a waiver of any default or Event of Default or of any such rights or remedies. Delays by the City or CDC in asserting any of their rights and remedies shall not deprive the City or CDC of their right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies. 10. Remedies Upon the occurrence of an Event of Default, the City and CDC shall, in addition to the remedial provisions of Section 5 as related to a Maintenance Deficiency at the Property, be entitled to seek any appropriate remedy or damages by initiating legal proceedings as follows: (i) by mandamus or other suit, action or proceeding at law or in equity, to require the RHCDC to perform its obligations and covenants hereunder, or enjoin any acts or things which may be unlawful or in violation of the rights of the City or CDC; or (ii) by other action at law or in equity as necessary or convenient to enforce the obligations, covenants and agreements of the RHCDC to the City and CDC. 10.1 Deed of Trust and Foreclosure Pursuant to the Regulatory Agreement, City and CDC have obtained the Promissory Note and the Deed of Trust recorded against the Property, securing financing provided by the City and CDC. To the extent the Promissory Note and Deed of Trust remain on title to the Property, RHCDC covenants and understands that any Event of Default shall be grounds for exercising the City's and CDC's remedies under the Promissory Note and Deed of Trust. 10.2. Riehts and Remedies are Cumulative The rights and remedies of the City and CDC as set forth in this Section 10 are cumulative and the exercise by the City and CDC of one or more of such rights or remedies shall not preclude the exercise by them, at the same or different times, of any other rights or remedies for the same Event of Default or any other Event o f Default by the RHCDC. 10.3 Enforcement by Third Parties No third parry shall have any right or power to enforce any provision of these CC &Rs on behalf of the City or CDC or to compel the City or CDC to enforce any provision of these CC &Rs against the RHCDC or the Project. 11. Governing Law These CC &Rs shall be governed by California and federal regulations and laws. 12. Amendment These CC &Rs may be amended after their recordation only by a written instrument executed by the RHCDC, City and CDC. 13. Attorneys' Fees In the event that a Party brings an action to enforce any condition or covenant, representation or warranty in these CC &Rs or otherwise arising out of 0 these CC &Rs, the prevailing Party in such action shall be entitled to recover from the other Party reasonable attorneys' fees to be fixed by the court in which a judgment is entered, as well as the costs of such suit. 14. Severability If any provision of these CC &Rs shall be declared invalid, inoperative or unenforceable by a final judgment or decree of a court of competent jurisdiction such invalidity or unenforceability of such provision shall not affect the remaining parts of these CC &Rs which are hereby declared by the parties to be severable from any other part which is found by a court to be invalid or unenforceable. 15. Time is of the Essence For each provision of these CC &Rs which states a specific amount of time within which the requirements thereof are to be satisfied, time shall be deemed to be of the essence. 16. Notice Any notice required to be given under these CC &Rs shall be given by the City, CDC or by the RHCDC, as applicable, by personal delivery or by First Class United States mail at the addresses specified below or at such other address as may be specified in writing by the Parties hereto: to the RHCDC: with copy to: Rio Hondo Community Development Corporation 1104 Valley Boulevard, Suite 201 El Monte, California 91731 to the City: Rosemead Community Development Commission 8838 E. Valley Boulevard Rosemead, California 91770 Attention: City Manager/ Executive Director with copy to: Burke, Williams & Sorensen, LLP 444 South Flower, Suite 2400 Los Angeles, California 90071 Attention: Rachel Richman Notice shall be deemed given five (5) calendar days after the date of mailing to the Party, or, if personally delivered, when received by the City Manager of the City, Executive Director of the CDC or the RHCDC, as applicable. [Signatures are on the Next Page] IN WITNESS WHEREOF, the RHCDC has caused these CC &Rs to be signed, acknowledged and attested on its behalf by duly authorized representatives, approved as to form and accepted by the CDC and City as set forth below as of the 22 " Day of March 2011. Rio Hondo Community Development Corporation, a California public benefit corporation Donna Duncan, President Accepted and Approved: City of Rosemead Steven Ly, Mayor Attest: Gloria Molleda, City Clerk Rosemead Community Development Commission Steven Ly, Chairman Attest: Gloria Molleda, Secretary 11 EXHIBIT 1 Legal Description of the Property Subject Address: 8628 Landis View Lane (1 SFD unit on lot) Legal Description: TRACT NO 701 LOT COM S 89 56' FT FROM SW COR OF LOT 1 P M 20 -65 TH N 0 04' W TO S LINE OF LANDISVIEW LANE TH W THEREON 56 FT TH S 0 04' E TO A PT S 89 56' W FROM BEG TH N 89 56'E 56 FT TO LOT 49 City: Rosemead County: Los Angeles State: California Zip Code: 91770 -3724 Census Tract: 4824.02 Map Reference: APN: 46 -F4 5281- 032 -033 12 . V __W Certification of Tenant Eligibility NOTE TO APARTMENT OWNER: This form is designed to assist you in computing Annual Income in accordance with the method set forth in the United States Department of Housing and Urban Development ( "HUD ") Regulations (24 CFR 813 and 24 CFR 92.203). You should make certain that this form is at all times up -to -date with the HUD and HOME Regulations. Re: 8628 Landis View Lane, Rosemead, CA 91770 I/We, the undersigned state that Uwe have read and answered fully, frankly and personally each of the following questions for all persons who are to occupy the unit being applied for in the above apartment project. Listed below are the names of all persons who intend to reside in the unit: 1. 2. 3. 4. Names of Relationship Social Place of Members of to Head of Security Employment Household Household Number Income Computation 6. The total anticipated income, calculated in accordance with the provisions of this Section 6, of all persons listed above for the 12 -month period beginning the date that Uwe plan to move into a unit is $ Included in the total anticipated income listed above are: (a) all wages and salaries, overtime pay, commissions, fees, tips and bonuses and other compensation for personal services, before payroll deductions; (b) the net income from the operation of a business or profession or from the rental of real or personal property (without deducting expenditures for business expansion or amortization of capital indebtedness or any allowance for depreciation of capital assets); (c) interest and dividends (including income from assets excluded below); 13 (d) the full amount of periodic payments received from social security, annuities, insurance policies, retirement funds, pensions, disability or death benefits and other similar types of period receipts, including any lump sum payment for the delayed start of a periodic payment; (e) payments in lieu of earnings, such as unemployment and disability compensation, workmen's compensation and severance pay; (f) the maximum amount of public assistance available to the above persons other than the amount of any assistance specifically designated for shelter and utilities; (g) periodic and determinable allowances, such as alimony and child support payments and regular contributions and gifts received from persons not residing in the dwelling; (h) all regular pay, special pay and allowances of a member of the Armed Forces (whether or not living in the dwelling) who is the head of the household or spouse; and (i) any earned income tax credit to the extent that it exceeds income tax liability. Excluded from such anticipated income are: (a) casual, sporadic or irregular gifts; (b) amounts which are specifically for or in reimbursement of medical expenses; (c) lump sum additions to family assets, such as inheritances, insurance payments (including payments under health and accident insurance and workmen's compensation), capital gains and settlement for personal or property losses; (d) amounts of educational scholarship paid directly to the student of the educational institution, and amounts paid by the government to a veteran for use in meeting the costs of tuition, fees, book and equipment. Any amounts of such scholarships, or payments to veterans not used for the above purposes, are to be included in income; (e) special pay to a household member who is away from home and exposed to hostile fine; (f) relocation payments under Title 11 of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970; (g) foster child care payments; (h) the value of coupon allotments for the purchase of food pursuant to the Food Stamp Act of 1977; 14 (i) payments to volunteers under the Domestic Volunteer Service Act of 1973; payments received under the Alaska Native Claims Settlement Act. (k) income derived from certain submarginal land of the United States that is held in trust for certain Indian tribes; (1) payments or allowances made under the Department of Health and Human Services' Low - Income Home Energy Assistance Program; (m) payments received from the Job Training Partnership Act; (n) income derived from the disposition of funds of the Grant Riber Band of Ottawa Indians; and (o) the first $2,000 of per capita shares received from judgment funds awarded by the Indian Claims Commission or the Court of Claims. 7. Do the persons whose income or contributions are included in item 6 above: (a) have savings, stocks, bonds, equity in real property or other form of capital investment (excluding the values of necessary items of personal property such as furniture and automobiles and interests in Indian trust land)? Yes _ No; or (b) have they disposed of any assets (other than at a foreclosure or bankruptcy sale) during the last two years at less than fair market value? _Yes _No (c) If the answer to (a) or (b) above is yes, does the combined total value of all such assets owned or disposed of by all such persons total more than $5,000? _Yes _No (d) If the answer to (c) is yes, state: (i) the amount of income expected to be derived from such assets in the 12 -month period beginning on the date of initial occupancy in the unit that you propose to rent: $ ; and (ii) the amount of such income, if any, that was included in item 6 above: $ 8. (a) Are all of the individuals who propose to reside in the unit full -time students *? Yes No *A full -time student is an individual enrolled as a full -time student during each of five calendar months during the calendar year in which occupancy of the unit begins at an educational organization which normally maintains a regular faculty and curriculum and normally has a regularly enrolled body of students in attendance and is not an individual pursuing a full-time course of institutional or farm training under the supervision of an 15 accredited agent of such an educational organization or of a state or political subdivision thereof. (b) If the answer to 8(a) is yes, is at least one of the proposed occupants of the unit a husband and wife entitled to file a joint federal income tax return? _Yes No 9. Neither myself nor any other occupant of the unit I/we propose to rent is the owner of the rental housing project in which the unit is located (hereinafter the "Owner "), has any family relationship to the Owner or owns, directly or indirectly, any interest in the ownership. For purposes of this section, indirect ownership by an individual shall mean ownership by a family member, ownership by a corporation, partnership, estate or trust in proportion to the ownership or beneficial interest in such corporation, partnership, estate or trust held by the individual or a family member, and ownership, direct or indirect, by a partner of the individual. 10. This certificate is made with the knowledge that it will be relied upon by the Owner to determine maximum income for eligibility to occupy the unit; and I/we declare that all information set forth herein is true, correct and complete and, based upon information I/we deem reliable and that the statement of total anticipated income contained in Section 6 is reasonable and based upon such investigation as the undersigned deemed necessary. 11. I/we will assist the Owner in obtaining any information or documents required to verify the statements made herein, including either income verification from my /our present employer(s) or copies of federal tax returns for the immediately preceding calendar year. 12. I/we acknowledge that I/we have been advised that the making of any misrepresentation or misstatement in this declaration will constitute a material breach of my /our agreement with the Owner to lease the units and will entitle the Owner to prevent or terminate my /our occupancy of the unit by institution of an action for eviction or other appropriate proceedings. 13. Housing Issuer Statistical Information: Marital Status: Race (Head of Household) White Asian African- American _ Hispanic _ Native American Other Physical Disability: Yes No I/we declare under penalty of perjury that the foregoing is true and correct. 16 Executed this day of _ in the County of Los Angeles, California Applicant Applicant [Signature of all persons over the age of 18 years listed in number 2 above required 17 f�l);ZSZ13V 961�Z1)►it3`i: I)uIRWA11'0WIPRIRT 1. Calculation of eligible income: (a) Eligibility form: $ Enter amount entered for entire household in #6 of Certification of Tenant (b) (1) If answer to 7(c) above is yes, enter the total amount entered in 7(d)(1), subtract from that figure the amount entered in 7(d)(2) and enter the remaining balance (2) Multiply the amount entered in 7(c) times the current passbook savings rate to determine what the total annual earnings on the amount in 7(c) would be if invested in passbook savings subtract from that figure the amount entered in 7(d)(2) and enter the remaining balance above: $ (3) Enter at right the greater of the amount calculated under (1) or (2) (c) TOTAL ELIGIBLE INCOME (Line 1(a) plus line I(b)(3): $_ 2. The amount entered in 1(c): Household Does not qualify the applicant(s) as Qualified Household. 3. This house [was /was not] last occupied for a period of one year by persons whose aggregate anticipated annual income, as certified in the above manner upon their initial occupancy of the apartment unit, qualified them as Moderate - Income Tenants. 4. Method used to verify applicant(s) income: Employer income verification. Copies of tax returns. Other Manager Qualifies the applicant(s) as a [insert income category] Qualified 18 FOR COMPLETION BY TENANT'S EMPLOYER: The undersigned employee has applied for a rental unit located in a project financed by The Rosemead Community Development Commission and the City of Rosemead for persons of low- to moderate- income. Every income statement of a prospective tenant must be stringently verified. Please indicate below the employee's current annual income from wages, overtime, bonuses, commissions or any other form of compensation received on a regular basis. Annual wages Overtime Bonuses Commissions Total current income I hereby certify that the statements above are true and complete to the best of my knowledge. Signature I hereby grant rental of an apartment at Date Title you permission to disclose my income to _ in order that they may determine my income eligibility for Signature Please send to: Date I hereby attach copies of my individual federal and state income tax returns for the immediately preceding calendar year and certify that the information shown in such income tax returns is true and complete to the best of my knowledge. Signature 19 Date EXHIBIT 3 Certificate of Continuing Program Compliance For Annual Reporting Period Ending The undersigned, ' as the authorized representative of , a California non -profit corporation ( "RHCDC "), has read and is thoroughly familiar with the provisions of the various documents associated with the financial assistance provided by the Rosemead Community Development Commission ( "CDC ") and the City of Rosemead ( "City") as established in numerous documents including the CC &Rs, dated as of 2011 between the City of Rosemead, the CDC and RHCDC. As of the date of this Certificate, the Project is (i) occupied by a Qualified Household (as such term is defined in the CC &Rs) or (ii) is currently vacant and being held available for such occupancy and have been so held continuously since the date a Qualified Household vacated such unit, as indicated by an "x" below: Occupied by Low- Income Households: Occupied by Moderate- Income Households: Property is vacant: Attached is the following information: the number of occupants of the Property, the rent paid, and the Certification of Tenant Eligibility for all new Qualified Households who have moved into the Project since the last Annual Certification. The information contained thereon is true and accurate and reasonable and is based on information submitted to the owner and is certified under penalty of pedury by each tenant. The undersigned hereby certifies that (1) a review of the activities of the RHCDC during such reporting period and of the RHCDC's performance under the CC &Rs has been made under the supervision of the undersigned; and (2) to the best of the knowledge of the undersigned, based on the review described in clause (1) hereof, the RHCDC is not in default under any of the terms and provisions of the above documents. Rio Hondo Community Development Corp. a California non -profit Corporation Date: 20 ATTACHMENT G File No 16470 Date of Valuation: 0211712011 Located At: 8628 Landis Vlew Ln of com s 89 56'w 56 it from sw cor of lot 1 p m 2465 th n 0 04'w to s line of l Rosemead. CA 917743724 For: R o Hondo CDC 11401 Valley Blvd. Su4e 201, EJ Monde. CA 91731 Table of Contents: Letter of Transmittal ........... Summary of Salient Features FJ. CHASTAIN (909) 949 -1933 Form TCG — "MnTOTAL' appraisal sftwe by a la no im. — 1- MALAMODE APPRAISAL OF REAL PROPERTY Frank Chastain P.O. Box 733 Upland, Ca 91785 -0733 909- 949 -1933 02/17/2011 Ro Hondo CDC 11401 Valley Blvd. Suite 201 El Horde, CA 91731 Re: Property: 8828 Landis View Ln Rosemead, CA 917703724 Borrower. Rio Hondo CDC Fde No.: 16470 In accordance with your request, we have appraised the above referenced property. The report of that appraisal is attached. The purpose of this appraisal is to estimate the market value of the property described in this appraisal report, as improved, in unencumbered fee simple We of ownership. This report s based on a physical analysis of the site and improvements. a locational analysis of the neighborhood and city, and an economic analysts of the market for propenies such as Ine subject. The appraisal was developed and the report was prepared in accordance with the Uniform Standards of Professional Appraisal Practice. The value conclusions reported are as of the effeCtW date Stated In the body of the report and contiigent upon the certification and limiting Conditions attached. if has been a pleasure to assist you. Please do not hesitate to contact me or any of my staff it we can be of additional service to you. G a4 Frank J. Chastain Real Estate Appraiser SUMMARY OF SALIENT FEATURES Subject Address 8628 Lends View Ln Legal Descnplioa Tract no 701 Lot com s 89 56'w 56 R from sw cor of IN 1 p m 20-651n n 0 04' w to s Iii City Rosemead County Los Angeles Slate CA Lp Code 917763724 Census Tract 4824.02 Map Reference 636 -G5 Bale Price S 429,500 Date of Sale 02/112011 Borrower /Client Rio Hondo CDC Lender Rio Hondo CDC Size (Square Feel) 1,601 Price per Square Foot $ 268.27 Location Avg- 636 -G5 Age 52 Yeans Condition Average /Dated Too Room 6 Bedrooms 3 Ball' 1.5 Appraiser Frank J. Clrastatn Date of Appraised VaWe 02117/2011 Final Estimate of Value S 425,000 Form SSD — 'WInTOTAL' appraisal software by a la made, Inc. — 1- 8WALAMODE F.J. CH ASTAIN (9091949 -1933 Uniform Residential Appraisal Report Fie# 16470 The purpose d this sunny a ralsal repon Is to provide to hMer /cPaA with an accurate and adequately supported, opinion of t markal value of the sub' Property Address 8628 Lardy View Lr, City Rosemead Sole CA Ti Coda 91770 -3724 Borrower Rlo Hondo CDC Owner d Pudic Recom Rose Jaan K COUTI Los Anctoles, Legal Descri Tract no 701 Lot com s 8956' w 56 It from sw cor of lot( p m20-0 th n 004' w to s llne of lardur iew lane Assessor's Parch # 5281 -032 -033 Tax Year 2010 R.E. Tams $ 1,053.71 Neighborhood Name NIA Nlap Refami 5 Ceres That 4824.02 Occupa 7 Owner X Terrell E Vacant Spechil ASSessmeds$ Unknown EPLID HOA$ WA I I PWYW I I WITION11 " ProperthiltordsAppraiserIMPerShrole leas" Over describe Asst it eri i Purchse Trveaclion FIRefinanceTransacton - Otler desMbe Lender/Ctent Rb Hondo CDC Address 11401 Valley Blvd. Suite 201 EI Morita CA 91731 Is the subject property comently offered la sale or has IT been offered for sale in the Who months prior to to effective data of INS appraisal? Z Yes No Rithad dad sources used, offerinq pincift and dabs The subiecl is cumantly listed for sale at $429,500 MLSN K70101308 as a probate sale on 9121/2010 with 145 DOM current status: Pending on 02111/2011 1 X did ❑ did rat pah/ae The contract for sale for the subject Rrchase transaction. Expbin the resub; to the analysis of the contract for sale a why The a III was not pad ommill. Sete prim to be $429,500 ' Contract Rice S 429 Date of Coamd 02/11/2011 Is her poperty seler the owner d pubic recad7 Yes No Dab Source a TNb & Selee comreet Is there arty financial assslance Iloan charges, sale coincessbn4 fiat or dowlpaymenl assistance, etc.) lobe paid by any path an behad of the borrower? ®Yes ❑ No If Yes, the lolal dollar amount and describe the klr s m be paid . 15 $15,01)(1 in upgrades to buyer at dose of escrow Note: Race and the mclal composition of the neigh are not app mlsal factors. boyhood ChereeWeto on-tw Tmnde ona,"ftmi Ruerdlyd We% Location " Urban Suburban - Ruml Property Values - Increasing'' Stable Clecining PRICE AGE Oni 85% BI INer 75% 25.75% i- Under 25% 1 Dernsind/Supply - S M Baance ��. Over S $ 000 2 -4 Wt % Growth Ra 'd Stable I I Slow I lAufailing none F Under 3 cots X 3-6 note Ej Own 6 rams 400 Low 42 Mue -Famly , 2% Neighborhood Boundaries North: Genre Ave. Smith: Lincoln Ave. 450 No 60 Comnerclal 3% East: Rosemead BNd. West City of Moraere Park 428 Rnd. 50 Other 10 % Nei hbom0od Description The sub act is located in an established neighborhood of primarily sintile family residerxxw similar in des n age condition and a L The suaect is located in an area of dose pro.mity to necesse ry services stares schools; and pubic Irer1s nation. Freexa awass A less Inan 1/4 mile to the 60 freeway. Markel Conditions including soploon for to above concho iarls Market condhions in tlm area appear to be stable at this time. However Havre are a nanber of REOmhort sales which still effect prices in all price tames. Marketina times have increased to 2-6 months. There is a mix of standard sales REO's & short sales in the area. Amalvins of similar listed erms; are cordairwxd In the sales com arson arid, whore avaaable. Dimensions 56 x 145 Amy 8,120 Sq.Ft. Shape Recta ular View None SpecificZatintiClassafkalknoRMA11 Zonang Descriefion Sh ie Family Residence ZI Compliance IN Legal Ll Legal Nonconloun (randfamereo USe No Zoning describe Is the highest! and best use of subject properry as Improved or as propoud per pla and s ecticatorls tine pIeserd use? X Yes El No IT No describe Chwin pudic o0er tlllcrbe) Pubk other deschi W-a6 Pubao PFKIM Elect WaW Suet Asphalt Gas 23 El tilrelairysewer E x 0 Alley No FEMA Special Flood Harad Amy Yes M No FEMA Food Zone X FEMAMap# 06037107665F FEMA Map On 9/28Q008 Are the utlltes and off-site Improvements Typical for the malice( am? M Yes No t No, describe Are tlme arry adverse Me condmons or external factors easemeds, 9fhcroachmerds. environmental condtions. WM was, ale. ? M Yea No t Yes, dsalbe Easements of appnok 10' for pubic nildhes at the rear V lina. Typral site for the area. The subied backs to the 60 free" off mmp which apwars to bet icaI in the ne hborhood. GWAI*DNMWM hurdeNOn Edeelorigaulpft Interior Units One El Om wtr Amessmy Unit Concrete Slab X Crawl Space Foundation Walls Concrete/A Floors C trWOOdfV A # of Stance One Full Basement Ll Partial Basertcem Fxlerbr Walls StuccolAw Wallis Plaster/A Type I Del. F At. S-OeI Unit Basemen! Area None Sq.1t floor SWIM Can A Tnm'Ansh Wuod/A Existl - Under Const Basement Finish None % GMers d Now Bath Flaw V1 A Deal Single sto I Outside En _ /EM L I Sumir Pu Window TYPe Wood DHI Bash Wainscot TINVA Year BUt 1959 Evidence of F1 Infestation Storm SasMneutabd None Car SIM a None Effecllve 44 Age rs veers Gaminess ❑ Sentiment Sows Ye 51A OMew # of Cars 2 Car 7 Noce Rearm FWA � HWBB 11 l Radarr Ameades Woodstom s # Drineway Surface Concrete F] Drop Stair El Stake I I Omer Wel Gas RIVIIII Y X Face dlbwAvd Z Garage # d Cars 2 Cam Flea X SCUte Coning Central Air Conditioning PatioNeck Cov. Path Caroorl # of Cars Rntshed 0 Heated tdhddual — Omer Pod Otl1er At DOL Bali larces Ej Refingerator r Rangat0ven Dishwasher N Disposal U Microwave ❑ Washer /Dryer L Omer describe Rnsned amt Iowa Grace contain: 6 Rotas 3 Bedrooms 1.5 BI 1,601 Swam Feet of Cross Llvl Ama Above Grade . Addhorm te3dms ( special energy efficient Tens, elC.. Family room addsbn behind bedroom tandem alum. covered Panic. Describe the coodbon of Te operty ( inchadno needed repa orientation, mnovatons remodeling, etc.. PrAnacial De relation arcentalse, seas derive l by the formula - Depreciation %= Effective e/Effective we * Remaining Economic Life. No apparent functional or exlemal made uaclas rhecosea repairs or deferred maintenance Was rimed with the sub'ecf In a" me condrdw. Are dent any ithys ical deficiences or adverse eondthone T affect tip livabi soundness, or structural inogrtly ta ? D Yes Z No 9Yes, dscil Norm apparem or disclosed to the appraiser. I have not been Provided with any dowmenlation nnAsailent, am physical delicbncies and have reported only apparent adverse condtio s. The borrower may not rely on this report for str conditions; that may exist and Is enconumared to obtain a home inspection by a prolessiomal home inanDactOr to determine t problennis OVS1. Dos The property, oenerath, conform to tle neighborhood nc tmal Why, syle, condition , use, constructor, e ? X Yes D No IT No, describe Freddie Mac Form 70 March 2005 Page 1 of 6 Fannie Mae Form 1004 March 2005 Form 1004 — 'WnTOTAL' apprasal sotwere by a ta mode, inc. — 1- SWALAMGDE Uniform Residential Appraisal Report 116470 Them are 4 c cuff ently offend to sale in t subled neighbor ranging In POW ham S 420 000 m $ 460 ODO Them am 3 compa note asks In to au nei huMd wktin the bast NoMidw nanN6 n in sale henna S 400. a $ 480 ODO FEATURE SUBJECT COMPARABLE SALE # 1 COMPARABLE SALE # 2 COhWAHABLE SALE IF 3 Atll6ass 8628 Landis View Ln Rosemead. CA91770 -3724 8623 Landis View Ln. Rcwroeatl CA 91770 921 Rose Glen Ave. Rosemead CA 91770 514 EllbVbmok Dr. Momebello CA 90640 _ Pena aSub 0.03 miles NW 0.32 miles SW 0.37 miles SW Sale Free iS 429 500 $ 427,000 S 480,000 & 400 ODO Sale Prkvtamss Uv. Arm 'S 268.27 39.111. $ 350.57 sq.1.1 S 22430 s .h. $ 254.45 s .t. - - DaaSoaces WIn2DAWrWMLs APN#5281 -032 -034 vvlaoalir,u LSA mlfS27s-007 -026 Whn2DatWnflevMLS APN#5275417416 Yerakadm Sources Doc# 195498 MI W 11001820 Doc# 1922915 MLS# M1010787 Doc# 1634235 MLSSy K10075131 VALUE ADJUSTMENTS DESCRIPTION DESCPAMON +- S Ad DESCRPTDN +- S Adjustment DESCRIPTION +- Adj ustment Saks a Financing Cohcessiaa Conventional 300 led Convembral 384 ltd FHA 1389.860 1W Date of Said I'mr 02/04111 12128110 11/15/10 Location A 636-G5 AW 638-65 -3 A 636.65 -3000A 636-G5 LeasemWFCa Slumpie Fee Simple Fee Simple Fee Sim le, Fee Simple Site 8 Sq.Pt. 7 Sq.Ft Si Ski +5 5 .FL +5000 Yaw None None None Nora Deign ftle) Simla story Simla story Two story Simla sto Duality of Coamcum A e/Stucco Ave a/Stuao I AveragerStuccif A tucoo Actual Age 52 Years 50 Years 43 Years 45 Years Condition Average/Dated A -7 500 Averal Plus -10,000 A Above Grade Taal Bahna Boa Total Berms, Bah Total Kama. Bata Tow e#me. save Room Coum 6 3 1.5 6 4 2 •1 500 7 1 4 1 3 -5.50 6 3 2 -1,5130 Gmss Living Area 1 sq.ft, 1 SqUIL +9600 2 9QfL •13500 1 Sq .ft 0 Basement & Finished Rooms Below Grade Probate Sale None Standard Sale None RED Sala None Short Saks None Functional Utility Avensbe Avers a Average Ave Heat Could FAU /CAC FAU/OAC FAU /CAC FAU/CAC .• Energy Efficient tma Standard I Standard Standard I Standard GarageiCarlsom Alt-2-Ga Alt-2 -Gal Att -2-Ga a All-2-Ge Paerupata'Deck Oov. Patio Cov. Patio Cov. Patti Cov. Petb Fire on -1,00 Fire ace -1 • On iml List Price on MLS $495,000 50 000 $479,900 S365,0100 • Total Days an Market 145 DOM 73 DOM 28 DOM 63 DON • Net Adustmad ofa + M • S -2400 + N - S -28 M + - S 2500 Adjusted Saie Price of Companion Not Adj. Gross 0.6 % Ad. 5.1 %S 424600 Net Adj. 5.8 % Gross AE. 7.9 %S 452 Net Adj. 0.6 % Cross Ad. 1.9 %S 402 1 X dot did not re6mmh the sale or transfer Malay of the SUi propoorly and comblowable sm. R not, exiblialn Prior sales listed below. My research Z dd did not reveal any or sales or transfers of hie sub' fa tlk new years labor to tlk effective ate of his afainfralsal. Data SerfCO 5 Thule- 04/21/2010 affidavit dot# 544322 My research M did did not mvml any prior sales or transfers of the co able sales to the year prim to Pe date of sale of the comparable sale. Data Sources True Repon to results of NB research and analysis of the prior sale a broader Mai of the subject probanty and comparable sales additional finarges on Pape 3), ITEM SUBJECT COMPARABLE SALE #1 COMPARABLE SALE #2 CO&WARABLE SALE #3 Dale of Prier Sak✓fransler 10710111976 80312010 10101/2004 No of Prior SaWTransfo affcavt 143 1453 Trustee's Deed 430 Data scarce s Tee I Title I Title TWO Effective Data of Data $am s Februa 2011 Feb 2011 F 2011 FeDnua 2011 Ara sly of prior sale a transfer hishm of tla sub' and cpmWM sofa M prior sales are listed above. Summary of Sales Composition Appribach The gross aiving area ad u inners Is based on $25.00 Par sqmm foot where the verlance exceeds 100 square feet. Ad usiments for less than 100 square feet are deemed unmecessaary. After investigation, conversational with area brokers sales people and research of the MILS system, A a the appraisers opinion t compeurable, sans collected for this analysis are the most record and most relevant available at this Ume. All comparable sakss are wrssidersd reliable Indicators on the subje&s market vakse. Do to the wde range of Prices within the 6 was rlecessa to emend the seemh best one mile. Also (rote that the prices, am showing a wide review dependinit on owned condition and appeal. lndlutedValwbySalesCffWmwAppaCh$ 425000 Intlkated Value by .Selo Comparison Approach S 425000 CMAPFOKh(RftVdOPBMS 427 Income roach (R S WA The sales core arson approach or market approach is the best Indicator of market values ea it best tyinflies, b (/"Heir malvatan on the open I arse market. Accordingly, t was given the highest consideration in this report and is supported by the cat approach. Trns appraisal is made X'as Is', 7 to completion per plans and spe ificatora on tla basis of a hypothetical mndNon that tla Impoverishes have been completed, _J subjed to t fnmwmg (epads a alienations on the basis of a Iypolner al condition tat tla repoirs or Ileadi have been compiled, or ❑ subject to the following required inspection based an the extraordinary assumption that the condition or deftlency dos non r are satiation or repair: Based on a compote visual in ion of the interior and Interior areas of the subject pmpel defined scope of work statement of assumptions and looking condDons, and op"Wer's cedlffagan, my (err) opinla of the market Valk, as defined, of (he real property that is the subject of this report is S 425,000 asof 02/17/2011 , which is the date of inspection and the effective dais of Na appraisal. Freddie Mac Form 70 March 2005 Page 2 of 6 Fannie Mae Form 1004 Marsh 2005 Ears 1004 — NMTOTAL' appralsal sotware by a Is mode, ire. —1. 800- AIAMDOE Uniform Residential Appraisal Report Fk# 16470 Escrow Instructions and pral lmma We mport not reviewed. Land value obtained by abstraction. Land value typical for the immediate area. Cost analysis intonation obtained from Marshall and Swift. Sub'ad is located in an area of Primarily owner- lotto led sf's. The Income approach Is not considered to be meaningful. For this reason a Is not used. The initial cerninaraloW sale search focused on sass lisb s and pendim sales with bansatrbn dates Mon the 4 months bcated within 1 mile from the subIW w4Nn 200 tausine, feet above and meow the sueects G similar sae sae similar me within a 10 war re e. The initial search resumed in 5 properbers, however oniy two - one sale and one listi - were considered comparable: the Pinar ware of sr rbr gwift. The search Pa rameters were then a ended to trermac6on dales within the past 6 months and within 2 miss from the sub pvgpeMy who the same Oftsical chareclensdcs. Using the a anded search paremeters a total of 11 properties Nana found which Intrudes those 2roperbas found In the Indhai search 6 of which 4 sass and 2 harries, were considered most com rabs and included In the Sass Comparison Approach. Thoae not chosen Here of superior empty and /or superior bcation. Notes: The apposisrar has prepaned this appraisal In full cum Isnce with tlo Home Valuation Code of Conduct and has not performed, panicioated in or been associated with any actmtv in vrostlonr of the coda. The appraiser has not rformetl any apprawl valuation service's to Include appraildina, neviewma, BPOs . impai or updating) cn Ito subject p roperty within 36 months of the effective date of the cunent assignment. • The Intended User of this appraisal report is the Lender /Client. The Intended Use is W evaluate the property that is the subject of this appraisal for a monciane finance transaction sQb b the staled Scopie of Work a of the a naisal reporrm neouiverments of this appraisal report form and the Definition of Market Value. No addalorel intended Users are identfied by the appraiser. COSTAPPROACHTO VALUE not niquirsd by Fannie Mae) Provide adequate Inoenadon for the IeMer /cllent lo replicsto the beWw cast li urea and calculations. SU for tit opinion of ste value (spormary of comparable land sales a Wla ontoods to Warbling she Vats In the subjects case the n e hoorhood does not have single vacand saes available. It is typical to value ate by e#redlan. E#rxWn is e pripcedcire In which the comnbubW of the rn rovenrems am deducted from the total property value. ESOMATEO M REPROWCTION OR r7 REPIACEMENT COST NEW OPM OF SITE VALLE - _........ _ =5 325 Source tr coil data Marshall and Swih OW UNG 1,601 Sq.FL @ S 125.00 — ___. =S 200125 Ou rating from cost service Average Elective date of nisi data 2011 Now SQFI, @ 5 .........._ =S Commems on Cost Approach (gross living area calculations, deprecadon, eh. _ =$ The land to improvement mbo is typical for the area. The costs of GujoilyCarporr 395 Sq.Ft @ S 30.00 _ _.. =$ 11,850 • re roducton wena estimated by Ise of the cu nArd "MARSHALL & Total Estimate of CosFNew _ =5 211,975 SWIFT' cost handbook and coal wRossale bu supply stores and Less Fundlorel BFpml local blddem, These cost ores are rot deemed approprialre for fire Depreciabon 116 586 =S 116.5m irmurance PurD0,51115. DexecM Cost of Iffrovennoins ...................— =5 95,389 'As -is' Value of Site Improvements _......._ =E 7,5D0 Esdmatd Remaining Economic Life MUD and VAO 36 Years INDICATED VALUE BY COST APPROACH _— ..__ °a 427889 RMEAPPROACHTOVALUE IroI MqWmd byFWWO AlaN _. —_ -- • Bombed MoaNy Market Red S N/A X Gross Rem Mudiplor N/A = S Indicated Value by Income Approach Summary of Income Approach indudi su for market rag and GRM PiUMWOFWATION FOR PIW9(R ) _ Is the deveb r/bmltla In comrot of the Ham ddmraK Assalatlon OA ? Yes No Unit s Detached Adached Provide the following Information for PUD; ONLY d the dado a/builder IF In control of he HOA and he subjecl properly is an attacned dweling unit. Legal Nan of Pro number N chases Tohl momma of alts Tula) ndnter of ends sold Total nurrber of units rented Total nmDa of ails for sat Data source(s) Was the project cmatd by his conversion of missing but S Ydo a PUD7 El Yes No d Yes. date of comersion. Does tit ro t cocain any rnldll- dwells unes? Yea I I No Dad Soon Are at polls, common Wraps. and mcniadon facllibeS co i El Yea El No It No, describe ha St" of co on. Are fit cmmtn demNts lased to or by Rt Homemnara AsSOettlonT 0 Yea No R Yes desglbe Set fin l [amts at Dessdbe common alines as reamearal facilities. Freddie Mac Form 70 March 2005 Page 3 of 6 Fannie Mae Farm 1004 March 2005 Form 1 D04 — V nTOTAL' appraisal software by a Ia mode, inc. — 1.800AIAMODE Worm Residential Appraisal Report Fk# 16470 This report form is designed to report an appraisal of a one -unit property or a one -unit property with an accessory unit; including a unit in a planned unit development (PUD). This report form is not designed to report an appraisal of a manufactured home or a unit in a condominium or cooperative project. This appraisal report is subject to the following scope of work, intended use, intended user, definition of market value. statement of assumptions and limiting conditions, and certifications. Modifications, additions, or deletions to the intended use, intended user, definition of market value, or assumptions and limiting conditions are not permitted. The appraiser may expand the scope of work to include any additional research or analysis necessary based on the complexity of this appraisal assignment. Modifications or deletions to the certifications are also not permitted. However, additional certifications that do not constitute material alterations to this appraisal report, such as those required by law or those related to the appraiser's continuing education or membership in an appraisal organization, are permitted. SCOPE OF WORK: The scope of work for this appraisal is defined by the complexity of this appraisal assignment and the reporting requirements of this appraisal report form, including the following definition of market value. statement of assumptions and limiting conditions, and certifications. The appraiser must, at a minimum: (1) perform a complete visual inspection of the interior and exterior areas of the subject property, (2) inspect the neighborhood, (3) inspect each of the comparable sales from at least the sheet, (4) research, verity, and analyze data from reliable public and/or private sources, and (5) report his or her analysis, opinions, and conclusions in this appraisal report. INTENDED USE: The intended use of this appraisal report is for the lender /client to evaluate the property that is the subject of this appraisal for a mortgage finance transaction. INTENDED USER: The intended user of this appraisal report is the lender /client. DEFINITION OF MARKET VALUE: The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeably and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: (1) buyer and seller are typically motivated; (2) both parties are well informed or well advised, and each acting in what he or she considers his or her own best interest; (3) a reasonable time is allowed for exposure in the open market; (4) payment is made in terms of cash in U. S. dollars or in terms of financial arrangements comparable thereto; and (5) the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions' granted by anyone associated with the sale. `Adjustments to the comparables must be made for special or creative financing or sales concessions. No adjustments are necessary for those costs which are normally paid by sellers as a result of tradition or law in a market area; these costs are readily identifiable since the seller pays these costs in virtually all sales transactions. Special or creative financing adjustments can be made to the comparable property by comparisons to financing terms offered by a third party institutional lender that is not already involved in the property or transaction. Any adjustment should not be calculated on a mechanical dollar for dollar cost of the financing or concession but the dollar amount of any adjustment should approximate the market's reaction to the financing or concessions based on the appraiser's judgment. STATEMENT OF ASSUMPTIONS AND LIMITING CONDITIONS: The appraiser's certification in this report is subject to the following assumptions and limiting conditions: 1. The appraiser will not be responsible for matters of a legal nature that affect either the property being appraised or the title to it, except for information that he or she became aware of during the research involved in performing this appraisal. The appraiser assumes that the title is good and marketable and will not render any opinions about the title. 2. The appraiser has provided a sketch in this appraisal report to show the approximate dimensions of the improvements. The sketch is included only to assist the reader in visualizing the property and understanding the appraiser's determination of its size. 3. The appraiser has examined the available flood maps that are provided by the Federal Emergency Management Agency (or other data sources) and has noted in this appraisal report whether any portion of the subject she is located in an identified Special Flood Hazard Area. Because the appraiser is not a surveyor, he or she makes no guarantees, express or implied, regarding this determination. 4. The appraiser will not give testimony or appear in court because he or she made an appraisal of the property in question, unless specific arrangements to do so have been made beforehand, or as otherwise required by law. 5. The appraiser has noted in this appraisal report any adverse conditions (such as needed repairs, deterioration, the presence of hazardous wastes, toxic substances, etc.) observed during the inspection of the subject property or that he or she became aware of during the research involved in performing the appraisal. Unless otherwise stated in this appraisal report, the appraiser has no knowledge of any hidden or unapparent physical deficiencies or adverse conditions of the property (such as, but not limited to, needed repairs, deterioration, the presence of hazardous wastes, taxic substances, adverse environmental conditions, etc.) that would make the property less valuable, and has assumed that there are no such conditions and makes no guarantees or warranties, express or implied. The appraiser will not be responsible for any such conditions that do exist or for any engineering or testing that might be required to discover whether such conditions exist. Because the appraiser is not an expert in the field of environmental hazards, this appraisal report must not be considered as an environmental assessment of the property. 6. The appraiser has based his or her appraisal report and valuation conclusion for an appraisal that is subject to satisfactory completion, repairs, or alterations on the assumption that the completion, repairs, or alterations of the subject property will be performed in a professional manner. Freddie Mae Form 70 March 2005 Page 4 of 6 Fannie Mae Farm 1004 March 2005 Form 1004— '%nMTAL- appraisal srrft r by a la mope, inc. — 1- 8004A1AWDE unfTOrm mesiaenval APPRAISER'S CERTIFICATION: The Appraiser certifies and agrees that 1. 1 have, at a minimum, developed and reported this appraisal in accordance whin the scope of work requirements stated in this appraisal report. 2. 1 performed a complete visual inspection of the interior and exterior areas of the subject property. I reported the condition of the improvements in factual, specific terms. I identified and reported the physical deficiencies that could affect the livability, soundness, or structural integrity of the property. 3. 1 performed this appraisal in accordance with the requirements of the Uniform Standards of Professional Appraisal Practice that were adopted and promulgated by the Appraisal Standards Board of The Appraisal Foundation and that were In place at the time this appraisal report was prepared. 4. 1 developed ny opinion of the market value of the real property that is the subject of this report based on the sales comparison approach to value. I have adequate comparable market data to develop a reliable sales comparison approach for this appraisal assignment. I further certify that I considered the cost and income approaches to value but did not develop them, unless otherwise indicated in this report. 5. I researched, verified, analyzed, and reported on any current agreement for sale for the subject property, any offering for sale of the subject property in the twelve months prior to the effective date of this appraisal, and the prior sales of the subject property for a minimum of three years prior to the effective date of this appraisal, unless otherwise indicated in this report. 6. 1 researched, verified, analyzed, and reported on the prior sales of the comparable sales for a minimum of one year prior to the date of sale of the comparable sale, unless otherwise indicated in this report. 7. 1 selected and used comparable sales that are locationally, physically, and functionally the most similar to the subject property. 8. 1 have not used comparable sales that were the result of combining a land sale with the contract purchase price of a home that has been built or will be built an the land. 9. 1 have reported adjustments to the comparable sales that reflect the market's reaction to the differences between the subject property and the comparable sales. 10. 1 verified, from a disinterested source, all information in this report that was provided by parties who have a financial interest in the sale or financing of the subject property. 11. I have knowledge and experience in appraising this type of property in this market area. 12. 1 am aware of, and have access to, the necessary and appropriate public and private data sources, such as multiple listing services, tax assessment records, public land records and other such data sources for the area in which the property is located. 13. 1 obtained the information, estimates, and opinions tumished by other parties and expressed in this appraisal report from reliable sources that I believe to be true and correct 14. 1 have taken into consideration the factors that have an impact on value with respect to the subject neighborhood, subject property, and the proximity of the subject property to adverse influences in the development of my opinion of market value. I have noted in this appraisal report any adverse conditions (such as, but not limited to, needed repairs, deterioration, the presence of hazardous wastes, toxic substances, adverse environmental conditions, etc.) observed during the inspection of the subject property or that I became aware of during the research involved in performing this appraisal. I have considered these adverse conditions in my analysis of the property value, and have reported on the effect of the conditions on the value and marketability of the subject property. 15. 1 have not knowingly withheld any significant information from this appraisal report and, to the best of my knowledge, all statements and information in this appraisal report are true and correct. 16. 1 stated in this appraisal report my own personal, unbiased, and professional analysis, opinions, and conclusions, which are subject only to the assumptions and limiting conditions in this appraisal report. 17. 1 have no present or prospective interest in the property that is the subject of this report, and I have no present or prospective personal interest or bias with respect to the participants in the transaction. I did not base, either partially or completely, my analysis and/or opinion of market value in this appraisal report on the race. color, religion, sex, age, marital status, handicap, familial status, or national origin of either the prospective owners or occupants of the subject property or of the present owners or occupants of the properties in the vicinity of the subject property or on any other basis prohibited by law. 18. My employment andlof compensation for perfomeng this appraisal or any future or anticipated appraisals was not conditioned on any agreement or understanding, written or otherwise, that I would report (or present analysis supprxfing) a predetermined specific value, a predetermined minimum value, a range or direction in value, a value that favors the cause of any party, or the attainment of a specific result or occurrence of a specific subsequent event (such as approval of a pending mortgage loan application). 19. I personally prepared all conclusions and opinions about the real estate that were set forth in this appraisal report If I relied on significant real property appraisal assistance from any individual or individuals in the performance or this appraisal or the preparation of this appraisal report, I have named such individual(s) and disclosed the specific tasks performed in this appraisal report. I certify that any individual so named is qualified to perform the tasks. I have not authorized anyone to make a change to any hem in this appraisal report; therefore, any change made to this appraisal is unauthorized and I will take no responsibility for it. 20. 1 identified the lender /client in this appraisal report who is the individual, organization, or agent for the organization that ordered and will receive this appraisal report. Freddie Mac Forth 70 March 2005 Page 5 of 6 Fannie Mae Form 1004 March 2005 Fam 1004 — ^NinTOTAL' appraisal software by a la mode, ma. — 1- NOALAMODE unnOr liesiaeaTlal Appraisal he 21. The lender /client may disclose or distribute this appraisal report to: the borrower; another lender at the request of the borrower; the mortgagee or its successors and assigns; mortgage insurers; government sponsored enterprises; other secondary market participants; data collection or reporting services; professional appraisal organizations; any department, agency, or instrumentality of the United States; and any state, the District of Columbia, or other jurisdictions; without having to obtain the appraiser's or supervisory appraisers (if applicable) consent. Such consent must be obtained before this appraisal report may be disclosed or distributed to any other party ( including, but not limited to, the public through advertising, public relations, news, sales, or other media). 22. 1 am aware that any disclosure or distribution of this appraisal report by me or the lender/client may be subject to certain laws and regulations. Further, I am also subject to the provisions of the Undo" Standards of Professional Appraisal Practice that pertain to disclosure or distribution by me. 23. The borrower, another lender at the request of the borrower, the mortgagee or its successors and assigns, mortgage insurers, government sponsored enterprises, and other secondary market participants may rely on this appraisal report as part of any mortgage finance transaction that involves any one or more of these parties. 24. d this appraisal report was transmitted as an "electronic record" containing my "electronic signature," as those terms are defined in applicable federal and/or state laws (excluding audio and video recordings), or a facsimile transmission of this appraisal report containing a copy or representation of my signature, the appraisal report shall be as effective, enforceable and valid as if a paper version of this appraisal report were delivered containing my original hand written signature. 25. Any intentional or negligent misrepresentation(s) contained in this appraisal report may result in civil liability and/or criminal penalties including, but not limited to, fine or imprisonment or both under the provisions of Title 18, United States Code, Section 1001, at seq., or similar state laws. SUPERVISORY APPRAISER'S CERTIFICATION: The Supervisory Appraiser certifies and agrees that: 1. 1 directly supervised the appraiser for this appraisal assignment, have read the appraisal report, and agree with the appraiser's analysis, opinions, statements, conclusions, and the appraiser's certification. 2. 1 accept full responsibility for the contents of this appraisal report including, but not limited to. the appraiser's analysis, opinions, statements, conclusions, and the appraiser's certification. 3. The appraiser identified in this appraisal report is either a sub - contractor or an employee of the supervisory appraiser (or the appraisal firm), is qualified to perform this appraisal, and is acceptable to perform this appraisal under the applicable slate law. 4. This appraisal report complies with the Uniform Standards of Professional Appraisal Practice that were adopted and promulgated by the Appraisal Standards Board of The Appraisal Foundation and that were in place at the time this appraisal report was prepared. 5. If this appraisal report was transmitted as an "electronic record" containing my "electronic signature," as those terns are defined in applicable federal and/or state laws (excluding audio and video recordings), or a facsimile transmission of this appraisal report containing a copy or representation of my signature, the appraisal report shall be as effective, enforceable and valid as it a paper version Of this appraisal report were delivered containing my original hand written signature. APPRAISER Signature s,/grs�.6'wa�r...r..._ Name Fronk J. Chastain Company Name Frank J. Chastain Company Address P.O. Bax 733 Upland, CA 917850733 Telephone Number (909)949 -1633 Email Address rrankchastair4veri mn.net Date of Signature and Report 02/17/2011 Effective Date of Appraisal 02/1712011 State Certification # AROD4441 or State License At or Other (describe) State # State CA Expiration Date of Certification or License 2/1512013 ADDRESS OF PROPERTY APPRAISED Rosemead, CA 917703724 APPRAISED VALUE OF SUBJECT PROPERTY$ 425,01)) LENDER/CLIENT Name Company Name Rio Redo CDC Company Address 11401 Valley Blvd. Suds 201, El Monte, CA Email Address SUPERVISORY APPRAISER (ONLY IF REQUIRED) Signature Name Company Name Company Address Telephone Number Email Address Date of Signature State Certification # or State License # State Expiration Date of Certification or License SUBJECT PROPERTY ❑ Did not inspect subject property Did inspect exterior of subject property from street Date of Inspection ❑ Did inspect interior and exterior of subject property Date of Inspection COMPARABLE SALES ❑ Did not inspect exterior of comparable sales from street Did inspect exterior of comparable sales from street Date of Inspection Freddie Mac Form 70 March 2005 Page 6 of 6 Form 1004— WmTOTAL' appraisal software by a la mode. Inc. — 1- 80OAlAIADDE Fannie Mae Farm 1004 March 2005 Uniform Residerrtlal Appraisal Report Rle# 16470 FEAOAIE SUBJECT COMPARABLE SPLE #/ COMPARABLE SALE #5 COMPARABLE SALE #6 Address 8628 Lands View Ln Rosemead CA 91770 -3724 8138 Orange St. Rosemead. CA 91770 1138 POIbCk St. 1 Rosemead. CA 91770 8248 Yarrow St. Rosemead CA 91770 aam to Sub' d 0.69 miles W miss iss W 0.61 miles NW S ale Pace S500 $ 429, S 460000 E 458,000 E 420000 Sale RiceSuss Uv. Ara E 268.27 Sq.ft. f 273.97 .1L E 348.02 sciAll E 448.72 .R gala Sources wmao.r milemas APruszTU++as Ww»20W&rr0w Snn+as 7"11405 wwrzarrawsusAVNaszaeolsao7 Vmdlcatlon Source s Dom# 1072466 MLS# P2140181 MLS# Al 1013861 ActWe Listina MLS# H11003820 Active Loadi VALUE ADJUSTMENTS DESCWTION DESCRIPTDN +- $ Ad DESCRPTION +- S Aclualandal DESCRPRON I +I-)$ Ad Vrahl Saks or Financing Concessions Conventional 337,500 ltd All Terms All Terms Date of Sak7Dme 03110 ActKra List ActivE List Location A 63605 Aw 636-F6 -3. AW 636+4 -3.00 Ava Si -3.00 Leasehadfa Sime Fee Simple Fee Sample Fee Sim Fee Simple Site 8 Sq.Ft. 7900 Sq.FL 7 Sq.Ft, 6 .Ft. View None Norte None None Dell n k Single story Simla story Simla story S' le at • Ouall m COnstrucBOn AverabedStmoo AvereeWSIeupoc, Ave e/Stucco A e/Stucco ' Actual a 62 Years 51 Years 1 51 Years I SB Years ' Condition A ated A Pkac -1 000A Plus - 15000A -5000 • Above Grade TOM Brims. Band Tcal Brim. Bea 7eG Beams. BMa Tam Bdams. ones Room Court 3 1. 7 4 3 -5500 5 3 2 -1500 5 3 1 1 +1 Gross LvO Ara 1,601 sq.fl. 1 sqt 0 1,316 5 .tl. +7 100 938 SQ.fL +18600 Basanem E Finished Rooms Below Grade Probate Sale None REO Sale Nona Standard Listing None Standard Listing None Functional UtIF fiorarture Average Average Ava Had Conlin FAU7CAC FAU /CAC FAU /CAC FAU /CAC E Efficient hems Standard Standard I Standard Standard Gara Car d Aft-2-Ga Aa -2-Ga Alt-2-Garage Det -2 -Ga Pach/Pauo/Deck Cm. Patio Cm. PaW/PCm -10000 Cov. Patio Cov. Patio Fhe ce -1. Fi place -1.000 Od irW Ust Prke on Ml5 $495,000 W9,500 $479,GDO S420,ODO Total Da en Medal 145 DOM 8 DOM 20 DOM 44 DOM Nei Ad olel FI + M - S 34500 + M - S -134 + - f 10 Adjusted Sale Rice of Corroarables I Net Adj. 7.5 96 Gross Ad'. 7.5 % S 425500 Not Add. 29 % Gross Ad. 6.0 % S 444,60 Net Adj. 2.1 % Gross Adj. 6.2 % f 430,100 Report to results of N research and analysis of its prior sale or transler history of has suW property and cooverable sales ad he or sale an pap 3). ITEM I SUBJECT COMPARABLE SALE #4 COMPARABLE SALE # 5 COMPARABLE SALE #6 N Prim im Sma TralSla 042 1/2010 06104 /2010 1171 42001 N/A Price of Prior SaWTranster I affidavit 351 Trustee's Deed 1235,000 Data Some s ITrue This ule Title EBec6ve Dale of Data Soum 5 Februan, 2011 Febnuary 2011 1 Februa 2011 Am sis of pror sale a harsher history of Bea subled property and co able $ales All poor seas are listed above. Aiaiysis/Commems Freddle Mac Fonn 70 March 2005 Fannie Mae Farm 1004 March 2005 Fonn 1004(AC) — "NInTOTAL' appraisal software by a la node. im.- 1- 800AlAMODE Building Sketch BOrraWa/Ckrl RIO Hondo CDC Pro Addre558628 LerWis View Ln city Rosemead Coady Los Ameles Stole CA ZIP Code 91770 -3724 lertl& Rio Hondo CDC Form SK113101— NIInTOTAL' appraisal software by a Is made, me. — 1- MALAMOOE 20ft 0 Family Room N E a A N Q j C) U (Tandem) aft loft L Serv. w Bath 1 Bedroom Bedroom ° U Hall Kitchen ;P Bedroom Dining Living Room Area loft Close Entry 17ft N ° ;:P 2 Car Attached First Floor [395 Sq ft] [1601 Sq ft] 20ft After 41uYtlwa samnrry 1 n9 ArY 4kaYtloe Dm14 Hnt Roar 160159 fl 2a v 29 = 460 19 +5 = 95 38. 27 = 1026 TeW 1ariN Aran (rmuASea: iWl s9 R R9iFpNW AreA 2 CU At4dwtl 39559fl 20 +19= 360 I5 +1 = 16 Form SK113101— NIInTOTAL' appraisal software by a Is made, me. — 1- MALAMOOE Plat Map liMy+aG ]IM1A013 -0a�®, aa]1aM109VEW L]1 Rf19%'10. GT]AJlK ]1! 1 S] N 5 � d2 w a♦s. Ja sus eav x � I. a ." O O Y .n i ilJlw Z p t 2 o xm is i;� O r i z E J I c • L i fON � - -5�. l +a. saaa Msa O yN MR ' . T of b Al I 5 w }` FW SCNLGL — MnTGTAL' appmisn cuUm by a W n", Inc. — 1- NO- ALAMGOE Location Map Borrawff(Caem Rn Hondo CDC Pr6 Adorers 8628 LaMrs View Ln [ Clary Rosemead County Los Aweles Slate CA L CMe 917743724 Leneer Poo Hondo COG a la mode inc: R Of M ^ • ' d MvnYM1 A,. ia 5 ` �}Wwni6 Awg Aw ET R UU' ID l g # Fin Aw s a s ems. Z ` q i t E Y '9 R wren In WNSi ♦ry e�rn aM q 4 � r Y �CQ �� ii8 t y `Q •��� Sor.P� C. O` , � g acp negnm s �n .y- 4" Wyr S Resurtacon umaiery AA. Av ��Aw 2yV pW 2 p p 4 t � W A'MYCACFr Me< Y'E�rge D. q � S a afYS ne.. p� F s d M & VI�Y:I6f NWIawS GOII CAUAE P { e & iv 400 yd. Form MARLOC — 'WInTOTAL appraisal software by a la made, inc. — 1- 8WALAMOOE r6n Ga.vpy Aw Fie AN Fan Ax D s a o 5 5 $ g � r U' DeArM IUlnpwrwi9 1(Fgrmw 6i Aw Y '9 R wren In WNSi ♦ry e�rn aM q 4 � r Y �CQ �� ii8 t y `Q •��� Sor.P� C. O` , � g acp negnm s �n .y- 4" Wyr S Resurtacon umaiery AA. Av ��Aw 2yV pW 2 p p 4 t � W A'MYCACFr Me< Y'E�rge D. q � S a afYS ne.. p� F s d M & VI�Y:I6f NWIawS GOII CAUAE P { e & iv 400 yd. Form MARLOC — 'WInTOTAL appraisal software by a la made, inc. — 1- 8WALAMOOE Subject Photo Page Bartowa/Ctle1a Rio L1orM0 CDC Address 8628 Landes View Ln city Rosemead COUITY Los les Stale CA ZiP Code 91770.3724 Lower Rio Rondo CDC Subject Front 8628 Landis View Ln Saks Pnce 429.500 Gross Limp Area 1,601 Total Roars 6 Total Bedrooms 3 Total Bathrooms 1.5 Location Avg- 636-G5 view None Site 8, 120 Sq.Ft. Quality Average/Stumo Ape 52 Years Subject Rear Subject Street Form PICPn.SR — WInTOTAL' appraisal software ay a ta mode, Inc. —1. 800- ALAMODE Han:. r ,' ,., • r RYTTALI Photograph Addendum aormwer/Crem Rio Hondo CDC Praperly Address 8828 Lardis View L. CRY Rosemead CMnPY Los Amalas Side CA Zp Code 81770-3724 l VWW Rio Hondo CDC garage side view side view side view side view rear yard fen PICSIR2 — WmTOTAL" appraisal software ey a la mode, lec. — 1- 8J0ALAMODE Photograph Addendum BOrtower YBBI RD Hondo CDC AONess 8828 Landka Yx,w Lin IM Rosemead Clounly Los,&g0s SNOB CA ZI COO 917703724 L ndw Rio Hondo CDC rear yard bedroom bedroom bedroom bathroom Form PICSI82 — W nTOTAL' appraisal sativare by a Is mode, Inc. — 1 .800ALAMOOE Photograph Addendum living room kitchen laundry room kitchen bathroom Farm PIC$pl2 — WOW appraisal sonwam by a la made, Inc. — 1.BOPALAMOUE Comparable Photo Pape Bonower /Casa Rio Hondo CDC Pro Address 8628 Landis View Ln I chy Rosemead COUnlY Los Anueles, State CA ZjpCwe 91770 -3724 Lerear Rio, Hondo CDC Comparable 1 8623 Lands View Ln. Pron N Subject 0.03 miles NW S* Nee 427,000 Gross La4q Area 1.218 Total Awn 6 Total Bedrooms 4 Total Bathrooms 2 Location Avg 636-65 VIEW None Site 7,900 SQ.Ft. Quaq Awrage/Stucco Age 50 Years Comparable 2 921 Rose Glen Ave. Rat to SOW 0.32 miles SW Sale Price 480,000 Gross Llving Aim 2,140 Total Rooms 7 Total Bedrooms 4 Total Battiums 3 Location Avg 635-G5 view None Site 5,90OSq.Ft. OuallM Average/Sti=o Age 43 Years Comparable 8 514 ENngOrook Dr. Prat to Subject 0.37 mass SW Sale Pose 400,000 Gross Claire Area 1.572 Taal ROOms 6 Total Bedrooms 3 Total Badroems 2 Location Avg- 636-x5 View None Site 5,460 Sq.Fl. QWq Average/Slucco Age 45 Years Form PICWCR — 'NanTOTAL' appraisal sotiware by a Is mode, Inc. — 1- 800-ALAMODE 1717ITTIMIMMIMM, 977M Comparable Photo Page BpmwedCldl Rio Ficei CDC I Property Odtl 8628 Landis Yiew Ln My Rosemead Cooley Los Ambles Soo CA DDC.Dde 91770 -3724 Letter Rio Hondo CDC Comparable 4 8138 Grange St. Prat to Subject 0.69 miles W Sale Poce 460,000 Grass living Area 1,679 Total Rooms 7 Total Bedrooms 4 Total Babuooms 3 Location Avg 636-FS Yew Nom Site 7,900 Sq.Ft. Dan Average/Stucw Age 51 Years Comparable 5 1138 Pollock St. Firm b Subject 0.65 miles W Sale Price 458,000 Gross living Area 1,316 Tote) floors 5 Total Bedroom 3 Total Badvooms 2 Location Avg 636-F4 Yew Norte Site 7,500 Scii Ouft AvaragerStucm Age 51 Years Comparable 6 8248 Yarrow St. Prat to Subject 0.61 miles NW Sale Price 420,000 Gross Living Aria 936 Total Roam 5 Taal Bedroom 3 Total Badxaom5 1 Location Avg 635-F4 Yew None Site 6,240 Sq.Ft. Quality AverageStucco Age 58 Years Faro PICPD(.CR — WnTOTAIL' appraisal software by a a mode, inc, — 1-BD6AIAMODE Iiiii —I= License I a F+ N ca W CD (JI p O a 9 9 d z z tII 3 W F n n' n� U O. O O w - r n w � w � dm N y . . N C E � rr V 0 0 7 O S w y d D ro H A t � N n ry o w � R � R S fD 3 9 c� s 0 , c w Er a. fl y R ry N a. d � � w R � w � G N w � r .7 n w 70 z n H z fJ rn c Y r m ro � L Cr1 E n rn Form SCNLGL— 'MnTOTAL' appraisal software EV a W mode, im. — 1- SOO-ALAMOOE ATTACHMENT H TENANT SELECTION AND AFFIRMATIVE FAIR HOUSING MARKETING PLAN Rio Hondo Community Development Corporation's (Rio Hondo CDC) tenant selection and affirmative fair housing marketing plan for the ROSEMEAD RENTAL HOMES — 2 (aWa 8628 Landis View, hereinafter the "Project ") incorporates certain threshold requirements and marketing preferences associated with certain Federal programs. It also serves as a practical guide to assist staff in marketing and leasing Project units and implementing the Plan. Project Summary The Project will consist of a single (1) three- bedroom, single - family detached structure. The Project will receive financial assistance from the City of Rosemead and the Rosemead Community Development Commission. Certain Federal requirements, which may be found at 24 CFR Part 92, apply due to the utilization of HOME Investment Partnerships Program funds in financing this project. Eligibility As a condition of Federal and City of Rosemead public agency funding, Rio Hondo CDC has agreed to the following threshold eligibility requirements and preferences. Program Threshold Requirements Income Eligibility — Since the unit is receiving HOME Program assistance, the maximum household income cannot exceed 80% of the area (Los Angeles PMSA) median income. Housing Expense (Gross Rent) —At no time may the total housing expense' (gross rent) exceed the Federally published housing expense limit. Household Size Appropriate for Unit Size- The household size should be appropriate to the size of the unit. "Appropriate size" is defined as: No. of Bedrooms Min. Household Size Max. Household Size 3- bedroom 3 7 Housing expense is defined as the "contract rent ", plus the published utility allowance by the Los Angles County Housing Authority for certain required utilities not provided by Rio Hondo CDC. Preferences. in order of priority: 1. Eligible Rosemead residents' involuntarily displaced. 2. Eligible Rosemead residents living in substandard housing (including the homeless) 3. Eligible Rosemead residents paying more than 50% of their family income for rent. 4. Eligible employees of the City of Rosemead not residing within the City at the time of application (Note: 1 through 4 above applies when a City employee already resides within the City) 5. All other eligible Rosemead residents. 6. Other Non- resident employees able to satisfy at least one of the following tests: a. The non - resident is an employee of a company having its corporate headquarters within the City b. The non- resident employee conducts at least 51 percent of their work activity within the City c. The non - resident employee commences and concludes their workday or other similar work period within the City. 7. All other eligible Non - residents. Marketing Strategy 1. Signage- An exterior sign will provide the Name and Phone Number of the Property Management Firm / Leasing Agent. 2. Agency Outreach - Rio Hondo CDC will announce the availability of project units to relevant Community Organizations and Public Sector Agencies. The following agencies will be contacted and supplied with flyers that describe the Project and Eligibility Requirements and provide the appropriate contact information. City of Rosemead Rosemead Community Center 3936 North Muscatel Rosemead, CA 91770 City of Rosemead Development Services 8838 East Valley Blvd. Rosemead, CA 91770 Rosemead School District 3907 Rosemead Blvd. Rosemead, CA 91770 Garvey School District 2730 No. Del Mar Avenue Rosemead, California, 91770 ' Generally, a Rosemead resident is an individual or household that can demonstrate that they have lived continuously within the corporate limits of the City of Rosemead for at least 90 days prior to the date of application for rental housing. However, "homeless persons" or "households' are considered to be a "Rosemead resident" with respect to this provision. Los Angeles County Housing Authority 12131 Telegraph Road Santa Fe Springs, CA 90670 Los Angeles County Homeless Services Authority 548 South Spring Street, Suite 400 Los Angeles, CA 90013 Southern California Housing Rights Center 3415 South Sepulveda Blvd., Suite 150 Los Angeles, CA 90034 Vietnamese American Senior Association 9241 Valley Blvd., Suite 104 Rosemead, CA 91770 Family Counseling Services 121. South Santa Anita Street San Gabriel, CA 91776 Boys & Girls Club of West San Gabriel Valley 328 South Ramona Avenue Monterey Park, CA 91754 Catholic Charities of Los Angeles — San Gabriel Valley Region 3017 Tyler Avenue El Monte, CA 91731 People for People 860 East Mission San Gabriel, CA 91776 Church of Our Saviour Center 4368 Santa Anita Avenue El Monte, CA 91731 Services Center for Independent Living P.O. Box 549 Claremont, CA 91711 3. Media Outreach — Rio Hondo CDC will develop and distribute press releases and public service announcements for various media outlets that serve the City of Rosemead. a. Press releases will be provided to the following local newspapers and newsletters: San Gabriel Valley Tribune 1210 N. Azusa Canyon Road West Covina, CA 91790 Phone No.: (626) 962 -8811 Mid Valley News 11401 Valley Boulevard, Ste. 100 El Monte, CA 91731 Phone No.: (626) 443 -1753 La Opinion 411 W. Fifth Street, 2"" Floor Los Angeles, CA 90013 (213) 896 -2272 Chinese Dailey News 1588 Corporate Center Drive Monterey Park, CA 91754