CDC - Item 4A - Acquisition of 9331 Glendon Way, Rosemead•
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ROSEMEAD COMMUNITY
DEVELOPMENT COMMISSION
STAFF REPORT
TO: THE HONORABLE CHAIRMAN AND COMMISSIONERS
FROM: OLIVER CHI, EXECUTIVE DIRECTOR C5'A_G_12-
DATE: APRIL 22, 2008
SUBJECT: ACQUISTION OF 9331 GLENDON WAY, ROSEMEAD
SUMMARY
On October 9, 2007, City Council entered into an Agreement with Rio Hondo
Community Development Corporation (RHCDC) for the production of affordable housing
using the 15% 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 9331 Glendon Way in the City of Rosemead became available for sale
with an asking price of $450,000. We were one of several offers made on the property
and the owner selected RHCDC's offer of $445,000. In addition to the $445,000,
RHCDC would be required to pay approximately $7,899 in related soft costs and closing
costs, and is in need of $5,000 for some cosmetic improvements upon acquiring the
property. Therefore, the total amount needed would be $457,899, pending funding
approval of a 0% deferred payment loan by the City Council in the amount of $214,615
from the HOME CHDO Set-Aside Fund and a 0% forgivable loan by the Rosemead
Community Development Commission of $243,284 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 1,259 square foot, three-bedroom, two bathrooms, single-family residence
built in 1961 on a 6,046 square foot, R1-zoned lot (see Attachment A).
Staff Recommendation
Staff recommends the Commission approve a 0% deferred payment loan in the amount
of $243,284 funded by the Redevelopment Low and Moderate Income Housing Fund to
the Rio Hondo Community Development Corporation for the purchase of the property
located at 9331GIendon Way and approve and authorize the Chairman to enter into all
related documents including the Regulatory Agreement (see Attachment B). The loan
would be forgivable in year 55 if all conditions of the agreements are met.
APPROVED FOR CITY COUNCIL AGENDA: V
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Community Development Commission
April 22, 2008
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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 $445,000 (see Attachment C).
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 $167,400 in HOME CHDO funds if not spent by July
31, 2008.
Upon acquiring the property, the RHCDC plans on making some cosmetic
improvements totaling to approximately $5,000. 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 will be required to 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 with preference
given to current Rosemead residents. A draft copy of this document has been attached
for the CDC's review (see Attachment D).
If the purchase were 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 Regulatory Agreement has been reviewed and approved by the
Commission's Attorney.
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Community Development Commission
April 22. 2008
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Preparredd,bby:
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Michelle G. Ramirez
Economic Development Administrator
Director
Attachment A - Pictures
Attachment B - Regulatory Agreement
Attachment C -Appraisal Report
Attachment D - Tenant Selection and Affirmative Fair Housing Marketing Plan
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Attachment A
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• Attachment B •
Recording Requested By
WHEN RECORDED MAIL TO
City of Rosemead
Attention: Michelle Ramirez
8838 E. Valley Boulevard
Rosemead, California 91770
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 April 22, 2008 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 lower and very low income families; and
B. 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 lower and
very low income families; and
C. 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:
9331 Glendon Way, 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."
D. 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
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E. 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 very low income families; and
F. WHEREAS, the RHCDC desires to purchase the rental property; and.
G. WHEREAS, the CITY has agreed to loan RHCDC funds in the amount of Two Hundred
Fourteen Thousand Six Hundred and Fifteen Dollars ($214,615.00) and the CDC has agreed to loan
RHCDC funds in the amount of Two Hundred Forty-Three Thousand Two Hundred Eighty-Four Dollars
($243,284.00) to assist in the purchase of one property for a total of $457,899.00 to be used as an
affordable low income rental property (as defined under the HOME Investment Partnership Regulations)
for a minimum of fifty-five (55) years; and
H. WHEREAS, RHCDC has agreed to acquire and operate the PROPERTY subject to the
terms of this REGULATORY AGREEMENT; and
1. 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 purposes 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 1 and Il of the National Affordable Housing Act
of 1990 and all related amendments and successors statutes thereto.
o, "HUD" means the Department of Housing and Urban Development of the United States of
America.
d. "Low Income Household" means low-income families whose annual incomes do 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.
e. "Monthly Rent" means the total monthly payments for (1) use and occupancy of the one (1)
residential dwelling unit within 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 not included in (f)(1) or (f)(2) of this Section 2
(Definitions), above, including garbage collection, sewer, water, electricity, gas and other
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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.
f. "NOTE" means that certain promissory note secured by the DEEDOF TRUST and executed
by RHCDC in favor of CITY and CDC in the amount of $457,899.00.
g. "Related Documents" means the NOTE, DEED OF TRUST, COVENANTS, CONDITIONS
AND RESTRICTIONS.
h. "Very-Low Income Households" means very-low income families whose annual incomes do
not exceed fifty percent (50%) 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 I I 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.
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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 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. AFFORDABILITY.
RHCDC agrees to make available, restrict occupancy to, and rent the PROPERTY to Low
Income Households, at an Affordable Rent. (hereinafter referred to as the "PROPERTY"). 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 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 within the PROPERTY shall remain affordable for a period of fifty-five (55) years
following the date of recordation of this duly executed REGULATORY AGREEMENT.
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, in order to preserve the public interest in maintaining the affordability of the
PROPERTY. The terms 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 from 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 rent and
utility allowance determinations to the RHCDC each year after such Monthly Rents have been annually
determined. As the PROPERTY shall be restricted to Low 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.
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In the eventa tenant-household's. income increases above levels that qualify it as a Low 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 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
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;
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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 not 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:
a. 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.
b. The prohibition set forth in paragraph (h) of this Section 9 notwithstanding, a tenant may be
obligated to pay costs if the tenant loses.
c. 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.
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10. AFFIRMATIVE MARKETING. 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 seven (7)-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
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
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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.
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 (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 its sole discretion, determines 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
8
0 . •
Reserve. Capital repairs to, and replacement of, the PROPERTY' 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;
lighting fixture replacement; elevator replacement and upgraded work; miscellaneous motors and
blowers; common area furniture replacement, and common area repainting.
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.
17. RECORD RETENTION & ACCESS TO RECORDS. Records shall be retained as
follows:
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.
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.
The City of Rosemead, the Rosemead Community Development Commission, the United States
Department of Housing and Urban Development 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.
0. •
18. NON-DISCRIMINATION 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 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
10
• 0
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 officers 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 a comprehensive liability policy in
the amount of at least One Million Dollars ($1,000,000) for any person, One Million
Dollars ($1,000,000) for any occurrence, and One Million Dollars ($1,000,000)
property damage naming the City and CDC as additional insureds. RHCDC shall
also insure the Property (fire, etc.) for the full acquisition amount.
C. The RHCDC shall furnish a certificate of insurance signed by an authorized agent of
the insurance carrier setting forth the general provisions of the insurance coverage.
This certificate of insurance shall name the City and the CDC and their respective
officers, agents and employees as additional insureds under the policy. The
certificate of insurance shall contain a statement of obligation on the part of the
carrier to notify the City and CDC by certified mail of any modification, cancellation
or termination of the coverage at least thirty (30) days in advance of the effective date
of any such modification, cancellation or termination. Coverage provided hereunder
11
by the RHCDC shall be primary insurance and not contributing with any insurance
maintained by the CDC or City, and the policy shall contain such an endorsement.
D. The RHCDC shall also furnish or cause to be furnished to the CDC and City evidence
satisfactory to the CDC that any contractor with whom it has contracted for the
performance of work on the Property or otherwise pursuant to this Agreement carries
worker's compensation insurance as required by law.
20. DEFAULTS & REMEDIES. Defaults (i.e. "Events of Default") 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 Parry 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 (h) 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,
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 for any amount which may become due to
the RHCDC or its successors, or on any obligations under the terms of this REGULATORY
AGREEMENT.
23. TIME. Time is of the essence under this REGULATORY AGREEMENT. The Parties
acknowledge and agree that the time period and set forth herein are to be strictly adhered to, unless
otherwise provided under this REGULATORY AGREEMENT or unless strict compliance with such
deadlines 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
Development Services Department
8838 E. Valley Boulevard
Rosemead, California 91770
Attention: Oliver Chi, City Manager
c/o Michelle Ramirez, Economic Dev. Administrator
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
12
• •
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 from
the date this duly executed REGULATORY AGREEMENT is recorded, whichever is recorded later; this
period shall hereinafter 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 as herein provided.
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,
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.
13
•
•
IN WITNESS . WHEREOF, the parties hereto have executed this REGULATORY
AGREEMENT as of April 22, 2008.
CITY OF ROSEMEAD, municipal
corporation
RIO HONDO COMMUNITY
DEVELOPMENT CORPORATION, a
California public benefit corporation
Tran, Mayor
By:
Oliver Chi, City Manager
APPROVED AS TO FORM:
By:
City Attorney
Date:
ROSEMEAD COMMUNITY
DEVELOPMENT COMMISSION,
municipal corporation
Bv:
John Tran, Chairman
Bv:
Oliver Chi, Executive Director
APPROVED AS TO FORM:
Bv:
Commission Legal Counsel
Donna Duncan, President
Date:
14
• •
EXHIBIT `A'
LEGAL DESCRIPTION OF THE PROPERTY
Subject Address:
9331 Glendon Way
Legal Description:
Landdes in doe no 3010, 75-2-28 parcel map as per bk 57 pg 64 of P M lot 3
City:
Rosemead
County:
Los Angeles
State:
California
Zip Code:
91770-2006
Census Tract:
4329.01
Map Reference:
59647
APN:
8594022042
15
EXHIBIT `B'
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EXHIBIT C
DEED OF TRUST
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17
Recording Requested By
WHEN RECORDED MAIL TO
CITY OF ROSEMEAD
Attention: Michelle Ramirez
8838 E. Valley Boulevard
Rosemead, California 91770
LINE 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 April 22, 2008, 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 ("City") and the Rosemead Community Development Commission, a municipal
corporation, its successors and assigns (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 of even
date herewith in the principal amount not to exceed Four Hundred Fifty-Seven Thousand Eight
Hundred Ninety-Nine Dollars ($457,899), together with interest thereon specified therein, 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 provided for
herein or in the Promissory Note, becoming due or payable under the provisions of this Deed of
Trust, the Loan Agreement dated as of April 22, 2008, by and between Trustor and the Beneficiaries
or any other instrument or instruments 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 Loan Document.
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, 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 described in Exhibit "A" (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
said structures, buildings, improvements on the real property described in Exhibit "A" 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 described in Exhibit "A" as between the parties hereto and all persons
claiming by, through or under such parties except that same shall not include such machinery and
equipment of Trustor, its contractors or subcontractors, or any tenant of any portion of the real
property described in Exhibit "A" or Improvements, which is part of and/or used in the conduct of
the normal business of Trustor or its tenant conducted upon the real property described in Exhibit
"A" i
(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 enumerations herein not excluding the general, now or at any time hereafter
2
• •
placed upon or used in any way in connection with the ownership, operation or maintenance of the
real property described in Exhibit "A" 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 described in Exhibit "A" 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, real property described in Exhibit "A" shall not include (i) personal property which may
be owned by lessees or other occupants of the real property described in Exhibit "A"; (ii) inventory
of any lessee or occupant of the real property described in Exhibit "A" 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 described in Exhibit "A" 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 described in Exhibit "A";
(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 property described in Exhibit "A" or now or hereafter used in connection with or now or
hereafter belonging or appertaining to the real property described in Exhibit "A"; 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 described in Exhibit "A";
(e) All judgments, awards of damages, settlements and any and all proceeds derived from
such hereafter made as a result of or in lieu of any taking of the real property described in Exhibit
"A" 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 property described in Exhibit "A" 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 described in Exhibit "A", 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 described in Exhibit
"A" 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.
3
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 or 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. Truster 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 they are
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 as otherwise provided in this section, or approved in
writing by Beneficiaries, and 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 Truster 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. Truster'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 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
buildings and other improvements now or hereafter located on the Property in a good and reasonable
condition and state of repair. Trustor shall not commit or suffer any waste; 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 building or improvement that may be constructed, damaged or
destroyed on the Property, and pay when due all costs incurred therefor.
7. Alterations. No building or other improvement on the Property 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
on or related to 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 on or about the Property.
(b) Trustor shall, at its sole expense, comply and cause each tenant leasing space
within the Property to comply with all applicable laws, regulations, codes and ordinances relating to
any Hazardous Materials or to any Environmental Activities (as defined herein 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
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the Property to assure and monitor continued compliance by Trustor and each tenant leasing space in
the Property 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 Property is not now 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 Property for Hazardous
Materials. Trustor hereby grants to Beneficiaries, their agents, employees, consultants and
contractors the right to enter upon the Property 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 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
6
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 Property. Beneficiaries
reserve the right, in its sole and reasonable discretion, to retain, at Truster's expense, an independent
professional consultant to review any report prepared by Trustor and/or to conduct its own
investigation of the Property. Trustor hereby grants to Beneficiaries, their agent, employees,
consultants and contractors the right to enter upon the Property 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) 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.
7
"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 Property.
(f) Trustor hereby agrees, at its sole cost and expense, to indemnify, protect, hold
harmless and defend (with counsel of Beneficiaries' choice), Beneficiaries, their 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:
(i) Any past, present or future presence of any Hazardous Materials on,
in, under or affecting all or any portion of the Property or on, in, under or affecting all or any
portion of any property adjacent or proximate to the Property, if such Hazardous Materials
originated or allegedly originated on or from the Property;
(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 Property 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 Property or the presence of Hazardous Materials on, in, under
or affecting all or any portion of the Property including, without limitation, all Environmental
Laws;
(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 Property 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 Property or any other property
adjacent or proximate to the Property, if such Hazardous Materials originated or allegedly
originated on or from the Property;
(vi) Any past, present or future presence, permitting, operation, closure,
abandonment or removal from the Property of any storage tank that at any time contains or
contained any Hazardous Materials and is or was located on, in or under the Property or any
portion thereof,
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(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 Property or into the
air, any body of water, any other public domain or any property adjacent or proximate to the
Property;
(viii) Any failure of any Hazardous Materials generated or moved from the-
Property to be removed, contained, transported or disposed of in compliance with all
applicable Environmental Laws; or
(ix) Any breach by Truster of any of its covenants, representations or
warranties regarding Environmental Matters contained in this Deed of Trust.
The indemnity contained herein shall terminate and be of no further force and
effect, if no Claim is pending, upon the repayment of the Loan in accordance with its terms.
(g) Trustor hereby represents and warrants as follows:
(i) The Property is not and has not been a site for the use, generation,
manufacture, storage, treatment, release, threatened release, discharge, disposal, or
transportation of any Hazardous Materials;
(ii) The Property is 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 Truster or any
previous owner or user of the Property (and relating to Trustor's and/or such previous
owner's or user's ownership of the Property), by any governmental entity or agency or any
other person or entity and relating to Hazardous Materials or pursuant to Environmental
Laws; and
(iv) Truster has not received any written notice (i) pursuant to which the
Property has 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 Property 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 Property that could cause the Property 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
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10. 1. Casualty Insurance. Trustor shall at all times keep the Property 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 of 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 Property, 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 Property is 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 improvements
on the Property, or any substantial portion thereof, a Builder's All Risk policy with extended
coverage with course of construction and completed value endorsements, for an amount at least
equal to the full insurable value of the improvements on the Property with provision for replacement
with the coverage described in Section 10.1.5, without gaps or lapsed coverage, for any completed
portion of improvements on the Property 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 Property is 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 Property, or any street, drive, sidewalk, curb, or
passageway adjacent to it, 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
10.3. Other Insurance. Trustor shall procure and maintain such other insurance or
such additional amounts of insurance, covering Trustor and the Property, as (a) may be required by
the terms of any construction contract for any improvements on the Property 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, 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, Truster 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 carved 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
I1
required under this Section 10 or otherwise then in force with respect to the Property 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 Property 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 Warran ty. 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
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 Property, 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, repaid, replace, and rebuild the Property as nearly as
possible to its value, condition, and character immediately before the damage, loss or destruction.
11. 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
Property, 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
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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 Property,
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 Property. 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 of the following terms and conditions:
(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 Property is
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;
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(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
adequate to restore the Property 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
Property 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
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(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 performing labor
on or furnishing materials to the Property; (iii) a certificate executed by an architect or engineer
approved by Beneficiaries confirming that the Property has 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 the appropriate governmental authorities authorizing the
occupancy.of the Property 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 Property 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 Property 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 Property 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
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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
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 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. Truster agrees to consent to inclusion of the Property in
any local improvement or special assessment district and to the imposition of any special or local
improvement assessment against the Property, 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
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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.
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. Tmstor 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 Property, Trustor agrees that:
(a) Trustor shall take all reasonable measures to cause each dwelling unit
on the 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
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such dwelling unit on the 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 Property
shall comply with the covenants of the Trustor under the Loan Agreement, this 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 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
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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
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 Securi ty. 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:
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(a) In order to induce Beneficiaries to make the loan secured hereby, Trustor
agrees that if the real property described in Exhibit "A" 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 described in Exhibit "A" 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 described in Exhibit "A"; provided,
however, that any transfer of the real property described in Exhibit "A" 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
described in Exhibit "A" 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 described in Exhibit "A" 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 described in
Exhibit "A".
(b) Trustor may request Beneficiaries to approve a sale or transfer of the real
property described in Exhibit "A" 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 described in Exhibit "A", 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 described in Exhibit "A", 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 described in Exhibit "A", 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 described in Exhibit "A" 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 described in Exhibit "A"
20
contained in paragraph 24(a).
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 ofTrustor'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, except for that certain purchase money subordinate deed of trust of even date herewith by
and among the Trustor, the City and the Trustee in the original principal amount of $457,899 to
which the Beneficiaries hereby consent as a subordinate security interest to this Deed of Trust.
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, 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 ten
(10) days nor greater 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 shall 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;
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(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
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
22
0
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
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
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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
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,
24
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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
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
25
• •
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 attorney-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.
(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
26
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
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.
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(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. Truster agrees to indemnify and hold harmless
Trustee and Beneficiaries from and against any and all losses, liabilities, penalties, claims, charges,
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
Truster 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
28
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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. Truster 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.
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
29
• •
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 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. [RESERVED NO TEXT].
30
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 mailed, postage prepaid, to the address of the Trustor stated hereinabove, or to such other address
that Truster 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 terms of the respective leases or the rental
arrangements. Truster shall permit Beneficiaries or their representative to examine all books and
31
•
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 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.
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 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
32
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.
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.
33
•
•
IN WITNESS WHEREOF, Trustor hereby duly executes this Deed of Trust and
Assignment of Rents as of April 22, 2008.
TRUSTOR
[NOTARY JURAT ATTACHED]
Rio Hondo Community Development Corporation, a
California public benefit corporation
Donna Duncan, President
By:
Date:
34
EXHIBIT "A"
LEGAL DESCRIPTION OF PROPERTY
Subject Address: 9331 Glendon Way
Legal Description: Landdes in doc no 3010, 75-2-28 parcel map as per bk 57 pg 64 of P M lot
3
City: Rosemead
County: Los Angeles
State: California
Zip Code: 91770-2006
Census Tract: 4329.01
Map Reference: 59647
APN: 8594022042
35
e
EXHIBIT D
RHCDC PROPOSAL
53
..Y. i,. oo inu ua:au tAA 625 443
0695
GREATER
EL MONTE ESCROW
0
0
Rio Hondo Community Developmeut Corporation
a nonprafir affordable howaing and commaniy economic developer
April 17, 2008
Ms. Michelle Ramirez
rkonomic Development Administrator
City of Rosemead
8838 East Valley Blvd,
Rosemead, CA 91770
Re: Funding Request for 9331 Glendon Way, Rosemead, California
Dear Ms. Ramirez
The Rio Hondo Community Development Corporation is pleased to advise you that we recently
open escrow for the purchase of 9331 Glendon Way in Rosemead with the intent to own and
manage the property as affordable rental housing fnr a Rosemead low-income resident family, as
defined by Federal and State laws and regulations. Additionally, we plan to remove (demolish) an
ten-permitted room addition shortly after the close of escrow and invest approximately $20,000 in
properly improvements over the next five years.
Toward this end, we are requesting that the City of Rosemead Redevelopment Agency provide us
with $243,284 loan and that the City of Rosemead provide us with a $214,615 HOME Investment
Partnerships Program loan. These loans will total $457,899. As detailed in the attached
development and operating proforma, $445,000 will be used to purchase the property, SS,ooo for
demolition of an un-permitted room addition, $2,500 for environmental inspections and reports,
and $5,399 for various soft costs (title, escrow, recording, appraisal, etc,).
As previously noted, the Glendon Way project will be made available to a low-income Rosemead
farrily with eligibility consistent with Federal and State affordable housing program
requirements- We are proposing that the initial contract tent be $877 per month, resulting in a
monthly housing expense (contract rent + utility allowance) of $997. We believe that this rent for
a high quality standard unit represents an exciting opportunity for a Rosemead family, the City of
Rosemead and Rio Hondo CDC_
The City of Rosemead's assistance in this matter will be greatly appreciated. Please do not
hesitate to contact Tom Morgan or myself should you have any questions or need additional
information.
RIO HONDDO COMMUNITY DEVELOPMENT CORPORATION,
By V-Aae-P~" A-ze
Donna L. Duncan, President
A-' -bv-dopm to P4 opmdEW Pmtoma
Q001
11401 Valley Boulevard, Suite 201 ♦El Monte, CA, 917319PH: 626,401.2784*FX: 626.401,377&
nccdc@sbcglobal.net
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•
•
DEVELOPMENT BUDGET
USE OF FUNDS
Total
%of:
1. Land
a. Acquisition - Land & Acq. Related Soft Costs $
-
0.0%
b. Acquisition-Exist.lmprovmnts & Related Soft Cost $
447,700
97.8% $445 offer+ 2700 for closing cost
c. Off-site improvements $
-
0.0%
d. Off-site contingency $
-
0.0%
e. Demolition $
5,000
1.1% demo unpermitted room/office
Total Land $
452,700
98.9%
2. Construction / Rehab
a. Rehab
$
- 0.0%
b. Rehab
$
- 0.0%
c. New Construct.
$
- 0.0%
d. Overhead and Profit
$
- 0.0%
e."Disproportionate Stds"P'Excess Market Costs"
$
- 0.0%
SUBTOTAL
$
- 0.0%
f. Construction Contingency
$
- 0.0%
g. Commerical/Other Non-Residential Construction
See separate development but
Total Construction of Improvements
$
- 0.0%
3. Architect, Engineer, Survey, Etc
a. Architect - Design
$
- 0.0%
b. Architect - Supervision
$
- 0.0%
c. Geotechnical
$
- 0.0%
Total Architect
$
0.0%
4. Survey & Engineering
a. Survey & Engineering
$
- 0.0%
5. Construction Interest & Fees
a. Construction Loan Fees
$
- 0.0%
b. Construction Interest (from below or see comment)
$
- 0.0%
c. Bond Premium
$
- 0.0%
e. Insurance - Construction Period
$
- 0.0%
f. Taxes - Construction Period
$
- 0.0%
g. Title & Recording - Construction Loan
$
- 0.0%
h. Legal - Construction Loan
$
- 0.0%
Total Construction Interest & Fees
$
- 0.0%
6. Permanent & Bridge Loan Costs
a. Perm. Loan & Credit Enhancement Fees
$
- 0.0%
b. Bridge Loan Fees
$
- 0.0%
c. Bridge Loan Interest
$
- 0.0%
d. Title &'Recording - Perm & Bridge
$
- 0.0%
e. Perm Legal and Other
$
- 0.0%
Total Perm Interest & Fees
$
0.0%
7. Other Legal
a. Organizational Legal
$
- 0.0%
b. Other Legal
$
- 0.0%
Total Legal
$
- 0.0%
8. Reserves
a. Captialized Reserves
$
- 0.0%
b. Lease-up Reserves (=6 months Op. Exp.)
$
- 0.0%
Total Reserves
$
- 0.0%
9. Appraisal
a. Appraisal
$
- 0.0%
10. Other
a. TCAC Fees (from "Basis..." worksheet)
$
- 0.0%
b. Environmental Audit
$
2,500 o.5%
Rosemead-9331-Glendon-Way (4), Development, 3 of 6
DEVELOPMENT BUDGET
USE OF FUNDS
c. Local Development Impact Fees
d. Permit Processing Fees
e. Capital Fees
f. Marketing
g. Relocation
h. Furnishings
i. Market Study
j. Other: Environmental Mitigation
Other:
Other : Soft Cost Contingency
Total Other Costs
11. Developer Costs
Total
$ 2,699
$ 5,199
•
% of:
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.6%
tf%
$13,000 CHDO O.E. Grant
0.0%
0.0%
0.0%
0.0%
0.0%
a. Developer Fee Off Project Budget
b. Consultant/ Processing Agent $ -
c. Project Administration $ -
d. Construction Management Oversight $ -
e. Other $ -
Total Developer Costs $
TOTAL PROJECT COSTS
Syndication Costs
$ 457,899 foo%
Per Unit $ 457,899
0.0%
TOTAL DEVELOPMENT COSTS $ 457,899 1oo.o%
Rosemead_9331_Glendon Way (4), Development, 4 o16
0 0
MORTGAGE WORKSHEET
kf a first Mort d 7147 I"'~F `P#"~nn ualMIZ
Term
$ 55
Interest rate
0.0%
Amount
$ 243,284
Scheduled Payment (if any)
$ -
.
F
U+ 3
✓
"
r*
w
C`
i '
r Llr
s
L.
u
.L.
.
i
1
ela.2
iG
Term
55
Interest Rate
0.0%
Amount
$ 214,615
Scheduled Payment (if any)
$ -
Term
0
Interest Rate
0.0%
Amount
$ -
Scheduled Payment (if any)
$ -
therr ''T"
yF R`'~ k7 I'IMMb
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I.M
e
1J~
Y~
0
Interest Rate
0.0%
Amount
$ -
Scheduled Payment (if any)
$
Rosemead _9331_Glendon_Way (4),Mor,gages,5 of 6
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• •
EXHIBIT E
LEAD BASED PAINT AND ASBESTOS REPORTS
(To Be Inserted)
61
_ Letter of Transmittal
Summary of Salient Features
URAR
Additional Comparables 4-6
Building Sketch (Page -1)
Plat Map
Location Map
Aerial Map
Subject Photos
Photograph Addendum
Photograph Addendum
Photograph Addendum
Comparable Photos 1-3......
> Comparable Photos 4-6
License
1
2
3
9
10
11
12
13
14
15
16
17
18
19
20
Date of Valuation:
04/092008
Located At:
9331 Glendon Way
Landdes in doc no 3010, 75-2-28 parcel map as per bk 57 pg 64 of P M lot 3
Rosemead, Ca 91770-2006
For:
Rio Hondo CDC
11401 Valley Blvd. Suite 201, El Monte, CA 91731
Table of Contents:
F.J. CR4STAIN (909) 949-1933
Farm TCG - WnTOTAP appraisal software by a Is mode, inc. -1-8o0-ALAMODE
File No.: 15086
APPRAISAL OF REAL PROPERTY
n
L J
~J
Frank Chastain
P.O. Box 733
Upland, Ca 91785-0733
909-949-1933
04/09/2008
Rio Hondo CDC
11401 Valley Blvd. Suite 201
El Monte, CA 91731
Re: Property: 9331 Glendon Way
Rosemead, Ca 91770-2006
Bonrower: Rio Hondo CDC
File No.: 15086
In accordance vnth 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 title of ownership.
This report is based on a physical analysis of the site and improvements, a localional analysis of the neighborhood and
city, and an economic analysis of the market for properties such as the 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 effective date stated in the body of the report and contingent upon the
certification and limiting conditions attached.
It has been a pleasure to assist you. Please do rat hesitate to contact me or any of my staff If we win be of additional
service to you.
Sink
Frank Chastain...
Real Estate Appraiser
• 0
SUMMARY OF SALIENT FEATURES
Subject Address 9331 Glendon Way
Legal Description Landdes in doc no 3010, 75-2-28 parcel map as per bk 57 pg 64 of P M lot 3
City Rosemead
County Los Angeles
State Ca
Lp Cade 91770-2006
Census Tract 4329.01
Map Reference 596-J7
Sale Price $ 445,000
-
Date of Sale Current
Borrower/Client Rio Hondo CDC
Lender Rio Hondo CDC
Size (Square Feel) 1,259
Price per Square Foot $ 353.46
Location Alley access
Age 47 years
Cordilian Average
Total Rooms 5
Bedrooms 3
Baths 2
Appraiser Frank Chastain...
Date of Appraised Value 04/09/2008
Final Estimate of Value $ 445,000
Fan SSD - •WnTOTAL• appraisal sa0were by a la made, inc. -1-800-ALAMODE
• FJ. CHASTAIN (909) 949-1933 • Ble N
Uniform Residential Appraisal Report Flle# 15086
The purpose of this summa appraisal report is to provide the lender/c6en1 with an accurate, and adequate supported, opinion of the market value of the subject property.
Property Address 9331 Glendon Wa City Rosemead Stale Ca L Code 91770-2006
Borrower Rio Hondo CDC Owner of Public Record Paredes Thomas L & Rowena B Coun Las An eles
Legal Description Landtles in doe no 3010, 75-2-28 parcel ma as per 1 57 64 of P M lot 3 lost
Assessor's Parcel # 8594-022-042 Tax Year 2007 R.E. Taxes E 4,087,67
Neighborhood Name N/A Ma Reference 596-J7 Census Tract 4329,01
Occupant Owner Tenant 1-1 Vacant $ eclal Assessments$ Unknown PUD HOA$ N/A per year per month
Property Rights Appraised Fee Simple Leasehold Other describe
Asst nmentT a Purchase Transaction Refinance Transaction Other describe
Lender/Client Rio Hondo CDC Address 11401 Valle Blvd. Suite 201, El Monte CA 91731
Is the subject property current offered for sale or has it been offered for sale in the twelve months prior to the effecu've date of this a miser? N Yes No
Heard data sources used, offeriprices), and date 5 . Mll 008041798 at $450,000 with 18 DOM
I 0 did N did not anayze the contract for sale for the subject purchase transaction. Explain Its results of the analysis of the contract lot sale or why the anaysis was not
performed. Not Provided at this time
Contract Price$ 445,000 Date of Contract Current Is the prop" seller the owner of pubic record? Yes No Data Sources Title
Is there any financial assistance (loan charges, sale concessions, gift or downpayment assistance, etc.) to be paid by any pall on behalf of the borrower? 0 Yes N No
If Yes, re on the total dollar amount and describe the items to be aid. To the appraisers knowledge there are no onancin concessions.
Note: Race and the rectal composition of the neighbor oo d are notappraisal fedora.
Neighborhood Characteristics
One-Unit Housin Trends
One-Unit HOUSin
Present Land Use%
Location Urban Suburban Rural
Property Values Iwreasi Stable Dec$ni
PRICE AGE
One-Unit 85 %
_ Built-U Over 75% 25-75% Under 25%
Denarid/Su Shortage N N Balance Over Supply
b ODD rs
2-4 Unit 4%
Growth Rapid Stable Slaw
Markets Time Undg3 rafts 3-6 mlhs Over 6 arm
385 Low 40
Mn-Family i %
Neighborhood Boundaries North: Valle Blvd. South: Carve Ave.
500 High 80
Contra al %
East: Ballwin Ave. West: San Gabriel Blvd.
440 Pred. 48
Oder 10 %
Neighborhood Description The subject is located in an established neighborhood of primarily single tams residences similar in des n age. cendition
and appeal. The sub act is located in an area of close proximity to necessary services stores schools and public transportation . Freeway
access is less than 1/4 mile to the 10 freeway.
Market Conditions (including support for the above conclusions Market conditions in the area has been stable over the past several month as most houses
have been reduced in rice to sell quickly. Marketing times have increased. Competitive interest rates appear available. It appears to indicate
stability in the area with average marketability. Analysis of similar listed properties in the neighborhood are contained in the sales comparison rid.
Dimensions 6 x 143.50 x 77 x 62.50 x 83 x 206 Area 6,046 S .ft Slue Fla View None
Specific Zan Classilibbon RMR1 Zahn Description Si le Family Residence
Zoning Compliances Legal Legal Noncontomti GrandfaNered Use No Zoning [legal describe
Is the highest and best use of subject property as improved or as proposed per tans and specifications) the resent use? Yes No N No, describe
Utilities Public Other(desi Public Offer(describe) Off-she lm rowirents-Type Public Predate
Elecoci Water X1 El Street Asphalt ED D
Gas Sanih Sewer Ate No
FEMA Special Flood Hazard Area Yes No FEW Flood Zone x FEMA Ma # FEW Ma Date
Are the utilities and off-site improve ends typical for the market area? Yes No 0No, describe
Are there an adverse site conditions or external factors (easements, encroachments, environmental conditions, land uses, etc.? Yes No If Yes, describe
The sub'ed is located on a small alley/easement which is access for 3 houses. The easement is approx. 26.88 feet to.. The lot size has been
reduced in size to approx. 5,000 square feet. This type of of location is typical in the area it does not appear to have an adverse effect on the
property at this time, however the dnvewa is now shorter than typical this will have a dollar effect on value. See adj
ustment in rid under location.
General Description
Foundation
Exterior Description materials/condition
Interior materiels/condhion
Unis One One with Accessory Unit
Concrete Slab CrawlSpace
Foundation Walls Concrete/Av
Floors Tile/Lanni
#of Stories One
Fua Basement Partial Basement
Exterior Walls Wood/Stucco/A
Walls D l
Type Det At. 1-1 S-DesJEnd Unit
Basement Area Nome s.ft.
Root Surface Com osftlort/A
TriptlRnish Wood/Av
Existing Proposed Under Const.
Basement Finish None %
Gutters 8 Downspouts None
Bath Four Til
Design S le Single story
Outside En /Exit Sum Pump
Window Type Alum Slider/Am
Bath Wainscot Till
Year Buitt 1961
Evidence of Infestation
Stan SasMrsuoted None
Car Stance None
ThOnline Age rs 32 Years
] Dampness ❑ Settlement
Screens Yes/AV
Driveway # 01 Can 0
Attic None
Heating TWA 11 1 HWBB Radians
Amenities Woodstor s #
Driveway Surface Asphalt
0 Drop Stair Stairs
Other Fuel Gas
Fre laces # Fence cl bur wd it
Garage # Of Cars 2 Car
Fluor Scunle
Coati Central Air COnditioni
Patio/Deck Slab Parch
Caron #of Cars
0 Brushed Heated
ndi dual Offer Wall
0 Pool Other
N Aft. 0 Del. Built-in
A lances 0 Refrigerator N Ra AFOven ® Dishwasher N Dis oral 0 Microwave 0 Washer /Dryer 0 Other describe
Finished area above grade contains: 5 Roams 3 Bedrooms 2 Bath 5 1,259 Square Feet of Gross Livi Area Above Grade
. Addidmul leatures s ecial ener efficient items, etc.). To fimHn wood Wminated fbarin in bedrooms.
Describe hie coal of the property includin needed repairs. deterioration, renovatlons, remodeling, eta.. Physical Depreciation percentage was denied b the
formula - Depreciation Effective A e/Effective age t Remains Economic Life. The subject has several items which will effect the subject.
There is a un ermitted addition which must be removed. Estimated cost to cure is approx. $5,000. There needs several ins ection which should be
considered. The first is a termite inspection as the eves and rafter tails appear to need work. The other inspection is electrical as the area in the
garage has several wires taped which is not to code. These cost are not known at this time.
Are there an physical deficiencies or adverse conditions that aflecl N livability, soundness, or structural tri ri of the property? Yes No N Yes, describe
Does the property eneN contain to the neighborhood func6orel Of style, condition use, construction, etc. ? Yes No N No, describe
Freddie Mac Form 70 March 2005 Page 1 of 6 Fannie Mae Form 1004 March 2005
Form 1004- VnTOW appraisal software by a Is mode, inc. - l-BOGALAMODE
• 0
Uniform Residential Appraisal Repart File At 15086
There are 8 comparable ro ernes cufferoy offered far sale in the subject neighborhood ranging in ice from $ 410,000 to S 484,500
There are 5 com amble sales in the subject
neighborhood within the past twelve mont
hs ranging in sale rice from $ 385.0 00 to $ 528,000
FEATURE SUBJECT
COMPARABLE SALE # 1
COMPARABLE SALE # 2
COMPARABLE SALE # 3
Address 9331 Glendon Way
Rosemead Ca 91770-2006
3619 Ellis To.
8593-017-031
8728 Guess St.
5390-009-032
8633 Norwood PI.
5390-002-042
Proximity to Subject
0.32 miles E
0.83 miles NW
0.86 miles W
Sale Price
$ 445,000
.
$ 435,000
$ 528.000
$ 490,000
Sale Price/Gross Liv. Area
$ 353.46 s Jt.
$ 415.08 5 It.
$ 424.78 soft,
$ 347.03 5 .It. .
Data Sources
Win2Data7Tit1e/MLS
Win2Data7Title/MLS
Win2Data/Title/MLS
Verification Source(s)
Doc# 488600
Doc# 488664
Doc# 344271
VALUE ADJUSTMENTS
DESCRIPTION
DESCRIPTION
$ Adjustment
DESCRIPTION
$Adusmnent
DESCRIPTION
$ Adjustment
Saks or Prancing
Concessions
Conventional
1800001ld
Conventional
300,000 lid
Conventional
392,000 lid
Date of SaleRme
03/21/08
03121108
02/28108
Location
Alley access
Typical access
-5,000
Typical access
-5.00 0
Typical access
-5,000
LeasehD*Tse Simple
Fee Simple
Fee Simple
Fee Simple
Fee Simple
Site
60465 .ft
70725 .ft
74055 .ft
56195 .tt
Yew
None
None
None
None
Design (Style)
le story
Si le story
Single story
Single story
Duality of Construction
Av Stucco
A /Stucco
A /Stucco
A /Stucco
Actual Abe
47 Years
60 Years
56 years
49 Years
Condition
Avera a
Aver
a ePlus
-5000
AV /Remo
d 1
-15000
Av /Remodel
-15000
Above Grade
Total Barns.
Bass
Total
Bdrms.
Baths
Total
Bdrms.
Baths
Total
Bdrms.
Baths
Room Count
5 3
2
5
3
1
+6 500
5
3
2
6
4
2
Gross Lid Area
1,259 s .ft.
1,048 S JL
+9,50 0
1,243 s .ft.
1,412 5 .ft.
-6 900
Basement S Finished!
Room Below Grade
None
Nona
None
None
None
None
None
None
Functional Utili
Avera a
Avera a
Avera a
Avera e
Hearing/Cooling
FAU/CAC
FAU/CAC
FAU/CAC
FAU/CAC
Energy Efficient Items
Standard
Standard
Stallard
Standard
Garage/Carport
Aft-2-Gara a
Det-2-Gars a
-16w2-Garage
Aft-2-Garage
PordVa6olDeck
Slab
Cov. Patio
-1,000
Cov. Patio
-1,000
Cov. Patio
-1,000
Fire lace
-2000
Trust Sale
' Days on Market
18 DOM
118 DOM
31 DOM
262 DOM
- Net Adjustment (Total)
-
+ -
$ 5000
+ -
$ -23000
+ -
$ -27900
Adjusted Sale Price
of Com ambles
.
Net Adj. 1.1 %
Gross Ad'. 6.2 %
$ 440 000
Net Adj. 4.4 %
Gross Ad'. 4.4 %
$ 505 000
Net Adj. 5.7 %
Gross Ad'. 5.7 %
$ 462,100
I did did not research the sale or transfer hi
story of the subject property and comparable sales. If not, explain Prior sales listed below.
M research did did not reveal any nor sales or transfers of the subject property for the three ears prior to the effective date of this appraisal.
Data Sources Title
research did did not reveal a nor sales or irensfers of the comparable sales for the year riot to the date of sale of the comparable sale.
Data Sources Title
Report the results of the research and analysis of the mar sale or transfer history of the subject property and c
omparable sales (report additional po
or sales on page 3).
ITEM
SUBJECT
COMPARABLE SALE #1
COMPARABLE SALE #2
COMPARABLE SALE #3
Date of Prior Sa'e/Transler
02/27/2004
N/A
06/20/2007
05126/1964
Price of Prior Sak/Transler 1
321,000
430,000
26,000
Data Sources
Title
Title
Too
Title
Effective Date of Data SOUfC¢ s
Aril 2008
Aril 2008
Aril 2008
Aril 2008
Analysis of prior sale or transfer history of the subject property and comparable sales Al prior sales are listed above.
Summa of Sales Comparison Approach The gross livi area adustment is based on $45.00 per square foot where the variance exceeds 100 square
feet. Adjustments for less than 100 square feet are deemed unnecessa . After investigation, conversations with area brokers sales people and
research of the MLS system, it is the appraiser's opinion that comparable sales collected for this analysis are the most recent and most relevant
available at this time. All comparable sales are considered reliable Indicators of the subject's market value. Note that there are no known
maintenance agreements for the easement alley and there is no known HOA for the easement.
Indicated Value by Sales Comparison Aroach$ 445,000
Indicated Value by: Sales Comparison Approach $ 445000 Cost Approach (if developed)$ 443,954 Income Approach Rideveloped)IS N/A
The sales comparison approach or market approach is the best indicator of market values as it best typifies bur r/seller motivation on the open
market. Accordingly, it was given the highest consideration in this report and is supported b the costa roach.
TIPS appraisal is made ❑ "as is", ❑ subject to completion per plans and specifications on the basis of a hypothetical condition that Ne improvements have been
completed, ® subject to rile following repairs or allerabons on the basis of a Hypothetical condition but the repairs or striations have been completed, or ❑ subject to the
• following required inspection based on the extraordinary assumption that the condition or deficient does hot require alienation or repair. The addition must be removed.
The inspections are u to the b r and sellers agents. However it these inspection are completed it is recommended that re air work be done.
Based on a complete visual inspection of the interior and exterior areas of the subject property defined scope of work statement of assumptions and limiting
conditions, and appraiser's certification, my (our) opinion of the market value, as defined, cf iAe real property that is the subject of this report is
$ 445,000 as of 04/09/2008 which is the date of Inspection and the effective date of this appraisal.
Freddie Mac Form 70 March 2005 Page 2 of 6 Fannie Mae Fan 1004 March 2005
Form 1004 - 'WinTOTAL' appraisal software by a la mode, inc. -1-800 ALAMODE
• • N
Uniform Residential Appraisal Report File# 15086
Escrow instructions and preliminary title report not reviewed. Land value obtained b abstraction. Land value typocal for the immediate area. Cost
analysis information obtained from Marshall and Swift. Sub ad is located in an area of rimadl owner- occupied sfes. The income approach is not
considered to be mean ful. For this reason it is not used.
COST APPROACH TO VALUE (not required b Fannie Mae)
Provide ade Late intonation for the lerder/client to replicate the below cost figures and calculations.
Support for the opinion of site value summa of comparable land sales or other methods for estimatin site value In the subjects case the neighborhood does not
have si le vacant sites available. It is typical to value site b extraction. Extraction is a roced ure in which the contribution of the im rovements are
deducted from the total property,
ESHMATED ®REPRODUCOON OR REPLACEMENT COST NEW
OPINION OF SITE VALUE. =5 350,000
Source of cost data Marshall and Sv4ft
DWELLING 1,259 S .FL @ $ 125.00 157,375
Quality ad from cost service Average EUecUve date of cost data 2008
None S .Ft. $
Comments on Cost Approach (gross Irvin area calculations, depreciation, etc.
_
The sub'ed's land value exceeds the 30% uidelines for most lenders.
Gainge/Carporl 400 S .FL E 30.00 12,000
This is cute common wAh property the Southern California area at this
Total Wends of Cost-New 169,375
time and does not adverse) affect the subject's value or marketability.
Less P Sical
Functional
Edema)
0 reciahon 77,4211
5,000 =E 82,421)
Depreciated Cost of Improvements 86,954
'As-is' Value of Site Improvements 7,000
Estimated Remaining Ecommic Life HUD and VA onty 38 Years
INDICATED VALUE BY COST APPROACH 443,954
- INCOME APPROACH TO VALUE (not required b Fannie Mae)..' ,
Estimated Month) Market Rents N/A % Gross Rent Multiplier N/A Indicated Value by triApproach
Summa of Imam Approach (including su o l for market rent and GRM
PROJECT INFORMATION FOR PUDs(ifapplicable)
Is the deveb rNwlda in control of the Homeowners' Association OA ? Yes 1-1 No Unit type(s) Detached Attached
Provide the following information for PUDs ONLY if the deveb er/builder is in control of the HOA and the subject property is an attached dwomn unit.
Legal Name of Pro act
Total n rnber of phases Total number of units Total number of units sold
Total number of unit; rested Total number of units for sale Data source s
- Was the project created h the comenion of edstibuildings) into a PUD? Yes No If Yes, date of conversion.
Does the project contains multi-dwelin ums? Yes No Data Source
Are the unds, common elements, and recreation facilities complete? Yes F-I No If No, describe the status of completion.
Are the common elements leased to orb the Homeowners' Association? F-I Yes No If Yes, describe the rental tenns and o tions,
Describe common elements and recreational facilities.
Freddie Mac form 70 March 2005 Page 3 of 6 Fannie Mae Form 1004 March 2005
Fonn 1004 -'WnTOTAL' appraisal soltware by a ta mode, inc. - 1-800 ALAMODE
0
umtorm
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 street, (4) research, verify, 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 am 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 tens 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 site 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, toxic 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 Mac Form 70 March 2005 Page 4 of 6 Fannie Mae Form 1004 March 2005
Form 1004 -'WinTOTAL' appraisal sonviare by a la mode, inc. -1-800AlAMODF
• 10
Uniform Residential Appraisal Report Filep 15086
APPRAISER'S CERTIFICATION: The Appraiser certifies and agrees that:
1. 1 have, at a minimum, developed and reported this appraisal in accordance with 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. I 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 my 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. 1 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 on 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. 1 have knowledge and experience in appraising this type of property in this market area.
12. I 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. I obtained the information, estimates, and opinions furnished 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 and/or compensation for performing 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 supporting) a
predetermined specific value, a predetermined minimum value, a range or direction in value, a value that favors the cause of
any parry, or the attainment of a specific result or occurrence of a specific subsequent event (such as approval of a pending
mortgage loan application).
19. 1 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 of 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 item 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 Form 70 March 2005 Page 5 of 6 Fannie Mae Form 1004 March 2005
Form 1004-'winTOTAL' appraisal software by a la mode, inc. -1-800 AI AM00E
•
• N 1 P
unlTOFM meslOenilal
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 appraiser's (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 Uniform 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. If 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. I 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 state 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 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.
APPRAISER
Signature
Name Frank C astain...
Company Name Frank Chastain
Company Address P.O. Box 733, Upland CA 91785-0733
Telephone Number (9 091 949-19 33
Email Address frankchastainOwedzon. net
Date of Signature and Report 04/09/2008
Effective Date of Appraisal 04109/2008
'State Certification # AR004441
or State License #
or Other (describe) State #
State CA
Expiration Date of Certification or License 2/152009
ADDRESS OF PROPERTY APPRAISED
9331 Glendon Way
Rosemead Ca 91770-2006
APPRAISED VALUE OF SUBJECT PROPERTY $ 445.000
LENDERICLIENT
Name
Company Name Rio Rondo CDC
Company Address 11401 Valley Blvd. Suite 201, El Monte. CA
Email Address
SUPERVISORY APPRAISER (ONLY IF REQUIRED)
Signature
Name
Company Name
Company Address
Email Address
Date of Signature
Slate Certification #
or State License #
State
Number
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 Farm 70 March 2005
Page 6 of 6
Fan 1004 -'WinTOTAL' appraisal software by a la mode, inc. -1-BOUALAMODE
Fannie Mae Fan 1004 March 2005
Uniform Residential Appraisal Report File# 15086
FEATURE
SUBJECT
COMPARABLE SALE #4
COMPARABLE SALE #5
COMPARABLE SALE #6
Address 9331 Glendon Way
Rosemeatl Ca 91770-2006
3841 Rio Honda Ave.
8594-012-011
8735 Ralph St.
5391
Proximity to Subject
0.24 miles NE
0.76 miles NW
Sale Price
$ 445.00 0
is
430.000
$ 509 000
E
Sale Price/Grass Liv. Area
$ 353.46 5 fl.
E 335.15 s ft.
F
$ 415.85 s
E s .0.
Data Sources
Win2Data7TillaNi
Wln2Data7Tit1e/MLS
Verification Sources
Doc# 2456960
MLS# W08048326 Active Listi
VALUE ADJUSTMENTS
DESCRIPTION
DESCRIPTION
EAdustment
DESCRIPTION
$Adushient
DESCRIPTION
SAdustment
Sales or Financing
Concessions
-
Conventional
3440001td
Possible offer
5% reduction
-25450
Date at Sale/Time
10/31/07
Cuvent Listi
Location
Allay access
Typical access
-5,00 0
Typical access
0
-5.00
Leaseholdi Simple
Fee Simple
Fee Simple
Fee Simple
site
60465 .ft
73205 .ft
75005 .ft
View
None
None
None
Design S k
Si rare story
Si le story
Si le story
Duality of Construction
A Stucw
A Stucco
A Stucco
Actual Age
47 Years
78 Years
-20.000
66 Years
' Condition
Aver
a a
Avera a
Aver
a e
Above Glade
Trial
Bdrms.
B3N5
Total Bit
Batal
Taal
Mrms.
BANS
Trial
Btlrms.
BaNs
Room Count
5
3
2
5 3
2
5
3
2
Grass LMn Area
1,259 soft
1,283 sort.
1,224 5 .ft.
s .ft.
Basement&Finished
Rooms Below Grade
None
None
None
None
None
None
Functional Utility
Average
Average
Average
Heatl Coolie
FAU/CAC
FAU/CAC
FAU/CAC
Energy Efficient flame
Standard
Standand
Standard
Gam e/Carpod
Aft-2-Gate a
Aff-2-Gara a
Det-2-Garage
ParcNPaBrVDeck
Slab
Slab
Slab
Fire lace
-2000
Fireplace
-2000
Days on Market
18 DOM
110 DOM
7 DOM
Net Adjustment (Total)
+ -
$
13 000
+ -
E -32.45 0
+ -
$
Adjusted Sale Price
of Comparable;
Net Adj. 3.0 %
Gross Ad'. 6.3 %
$
443 000
Net Adj. 6.4 %
Grass Ad'. 6.4 %
S 476,550
Net Adj. %
Gross Ad'. %
E
Retain the results of the researc
h and analysis of the nor sale or transfer h
isto
of the subject p
roperty co
mparab
le sales (report additi
onal n
or sales an pa
ge 3).
ITEM
SUBJECT
COMPARABLE SA
LE #4
COMPARABLE SALE # 5
COMPAR
ABLE SALE #6
Date of Prior Sale flafer
0212712004
03/27/1995
N/A
Price of Prior Sale/Traoster
1
321,000
1
190,000
Data Sources
Title
Title
Title
Effective Date of Data Sources
A HI2008
Aril
2008
A d12008
Ara sis of prior sale or transfer
Nsto of the subject
property and comparable sales Ad prior sales are listed above.
Ara sis/Commerds
Freddie Mac Form 70 March 2005
Fannie Mae Form 1004 March 2005
Form 1004TAQ -'W nTOTAL' appraisal software by a la made, IN. - 1-800 ALAMODE
• • HI
Building Sketch
Bom s,eaC{el9 Rio Hondo CDC
Property Address 9331 Glendon Way
city Rosemead County Los Angeles State Ca L Code 91770-2006
Lender Rio Hondo CDC
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Comments:
AREA CALCULATIONS SUMMARY
Cods Uesody0oo wt s[or
Net Totals
GIA1 First Floor
1259.0
1259.0
GM Garage
300.0
400.0
Net LIVABLE Area
(Rounded)
1259
LIVING AREA BREAKDOWN
& .ojown soMota]s
First Floor
22.0 z 50.0
1100.0
2.0 22.0
44.1
5.0 z 23.0
115.0
3 Items (Rounded)
1259
Form SKT.BldSkl - WnTOTAL' appraisal software by a la mode, inc. -1-800-ALAMODE
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• Location Map •
Bonower/CG¢M RioHondo CDC
Pra Address 9331 Glendon Wa
Ci Rosemead Caen Los Anueles State Ca L Code 91770-2006
Lender Rio Hondo CDC
Form MAP.LOC -'WInTOTAL' appraisal software by a la made, inc. -1-800-ALAMODE
E) P #
Aerial Map
9orrowerlCfem Ru Hondo CDC
Pra Address 9331 Glendon Way
Ci Rosemead Coun Los Angeles Slate Ca Zip Code 91 7 7 0-2006
Lencer Rio Hondo CDC
Form MAP.LOC - W aTOTAL' appraisal software by a la mode, inc. -1-80WAtAMODE
i
• • FIe NO 1508fi Paoe #14 a1F
Subject Photo Page
Borrower/Client Rio Hondo CDC
ProAtldress 9331 Glendon Way
city Rosemead Carr Los eles Slate Ca L Code 91770-2006
Lender Rio Hondo CDC
Subject Front
9331 Glendon Way
Sales Price
445,000
Grass Liking Area
1,259
Total Rooms
5
Total Bedrooms
3
Total BaWOOnla
2
Localion
May access
View
None
Site
6,046 Sg.fl
Quality
Avg/Stucco
Age
47 Years
Subject Rear
Subject Street
Form PICPO(.SR -'WinTOTAL' appraisal software by a Is mode, inc. -1-800-ALAMODE
• 0
Photograph Addendum
6¢nowulCG¢N Rq Hondo CDC
zc Address 9331 Glenda. Way
city Rosemead County Los Angeles State Ca Zip Code 97770-2006
Lender Rio Hondo CDC
Form PICSV2 - WnTOTAL' awaisal software by a la made, inc. -1-800 ALAMODE
E
Photograph Addendum
FhNg. 150851 Eau A] QQ12Q
Bonower/CGeN Rio Hontlo CDC
Pro Addmss 9331 Glentlon Way
Ci Rosemead COUn Los Angeles State Ca L Code 91770-2006
Lender Rio Hontlo CDC
Form PICSI%2 - WnTOTAL' appraisal software by a la mode, inc. -1-800-AIAMODE
N P k17 1
• Photograph Addendum •
Baramer/Clend Rb Hondo CDC
Proed Address 9331 Glendon Way
Icily Rosemead Coen Los Angeles Stale C. L Code 91770-2006
Lender Rio Hondo CDC
Foml PICSIX2 - WnTOTAL' appraisal software by a la mode, inc. -1-800 AlAMODE
® Comparable Photo Page
BongwerlCliem Rio Hondo CDC
Pro a Address 9331 Glenoon Way
Ci Rosemead County Los Angeles Slate C. L Code 91770-2006
Lender Rb Hondo CDC
t
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Comparable 1
3619 Ellis Ln.
Prox to Subject 0.32 miles E
Sale Price
435,000
Gross l iq Area
1,048
Total Rooms
5
Total Bedroom
3
Total Bathrooms
1
Location
Typical access
few
None
Site
7,072 Sq.ft
Quality
Avg/Stucco
Age
60 years
Comparable 2
1
t f
f r
8728 Guess St.
Prm to Subject 0.83 miles NW
Sale price
528,000
Gross Lidng Area
1,243
Total Rooms
5
Total Bedrooms
3
Total Bathrooms
2
Location
Typical access
View
None
Site
7,405 Sq.ft
Quality
Avg/Stucw
Age
56 Years
Comparable 3
8633 Norwood PI.
Prox to Subject 0.86 miles W
Sale Place
490,000
Gross Liong Area
1,412
Total Room
6
Total Bedrooms
4
Total Bathrooms
2
Locagon
Typical access
View
None
Site
5,619 Sq.ft
Quality
Avg/Stucoo
Age
49 Years
Form PICPD(.CR - WinTOTAC appraisal software by a la mode, inc. - 1-800 ALAMODE
® File N.1 # f2
Comparable Photo Page
BarmwedCliem Rio Honda CDC
Prosery Address 9331 Glendon Way
City Rosemead County Los Angeles State Ca L Code 91770-2006
Lender Rio Hondo CDC
Comparable 4
3841 Rio Hondo Ave.
Prot to Subject 0.24 miles NE
Sale Price
430,000
Gross Living Area
1,283
Total Rooms
5
Total Bedrooms
3
Total Bathrooms
2
Location
Typical access
View
None
Site
7,320 Sq ft
Quality
Avg/Stucco
Age
78 Years
Comparable 5
8735 Ralph St.
Prox. to Subject 0.76 miles NW
Sale Price
509,000
Grass Living Area
1,224
Total Roams
5
Total Bedrooms
3
Total Bathrooms
2
Location
Typical access
View
None
site
7,500 Sq.ft
Quality
Avg/Stucco
Age
66 Years
Comparable 6
Prox. to Subject
Sale Price
Grass Living Area
Total Roams
Total Bedrooms
Total Ballrooms
Location
View
Site
Quality
Age
Form PICKUR -'WInTeTAC appraisal software by a to made, inc.-1-800-ALAMODE
• License FA-le N of 20
License
FamSCNLGL-'WhTOTAL' rpprdsA wftwm by a b nndA he -1-BOD MANODE
Form SCNLGL - WInTOTAL' appraisal software by a la made, inc. - 1-80UALAMODE
Attachment D •
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 - I (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.
Ae,
Aly
Project Summary
The Project will consist of a single (1) three-bedroom, single-family detach[ dsstructure. The Project will
receive financial assistance from the City of Rosemead and theZRosemead@ommunity Development
Commission. Certain Federal requirements, which may be,found`at:24 CFRPR F92 apply due to the
utilization of HOME Investment Partnerships Program funds in financing this pro3ect
Eligibility
As a condition of Federal and City of Rosemead public agencyfunding, Rio Hondo CDC has agreed to
the following threshold eligibility requirements and preferences. 061
Program Threshold Requirements: IS{
Income Eligibility -5
Since the unfit, is receiving HO Prog am assistance, the maximum household
income canto_f exceed 80% of the area (Los Angeles PMSA) median income.
Expense (Gross Rent) -At not~me may the total housing expense' (gross rent)
exceed the Federa11, lished&using expense limit.
Id S1, q, proprtate for Unit Size-
The household size should be appropriate to the size of the unit. "Appropriate
size" is; fined as:
No.,of Bedrooms
Min. Household Size
Max. Household Size
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 residents2 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 thefol
a. The non-resident is an employee of a company having,i l- cor
the City F~
b. The non-resident employee conducts at least 51 percent of tfiE
City AP
c. The non-resident employee commences and`coholudes their
work period within the City.
7. All other eligible Non-residents.
Marketing Strategy
1. Signage- An exterior sign will provide=the Name and 1
Firm / Leasing Agent. Zap
'
2. Agency Outreach- Rio Hondo CDC will announce=t
Community Organizations and Public ySector--fAge
contacted and supplieil~"with flyers that desc b the
provide the
City of Ro
Rosemead
3936 Nortl
of Rosemead
Valley Blvc
CA 91770
Rosemead S651
3907 Rosemew
Rosemead, CA
ontact information.
Garvey School District
2730 No. Del Mar Avenue
Rosemead, California, 91770
tests:
headquarters within
work activity within the
or other similar
of the Property Management
ibility of project units to relevant
The following agencies will be
and Eligibility Requirements and
2 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.
L
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 tit
Monterey Park, CA
Catholic Charities of Los Angeles -
3017 Tyler Avenue
El Monte, CA 9173,1
People for Peopl
860 East Mi s of
San Gabriel, CA
•
Rio Hondo CDC will develop and distribute press releases and public service
various media outlets that serve the City of Rosemead.
San Gabriel Valley Tribune
1210 N. Azusa Canyon Road
West Covina, CA 91790
Phone No.: (626) 962-8811
a. Press releases will be provided to the following local newspapers and newsletters:
0 0
Mid Valley News
11401 Valley Boulevard, Ste. 100
El Monte, CA 91731
Phone No.: (626) 443-1753
Chinese Dailey News
1588 Corporate Center Drive
Monterey Park, CA 91754
La Opinion
411 W. Fifth Street, 2"d Floor
Los Angeles, CA 90013
(213) 896-2272