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HomeMy WebLinkAboutC-6377(A) - Deed of Trust with Assignment of RentersCommonwealth Land Title Company RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO: City of Newport Beach 100 Civic Center Drive Newport Beach, California 92660 Attn: City Manager Recorded in Official Records, Orange County Hugh Nguyen, Clerk -Recorder 11111 1EI 1�11� 11� 11$El11� 111�111$N1El�I �1160,00 *$ R 0 0 0 8 0 4 3 9 5 5$ 2015000645083 4:20 pm 12122+15 232 407 D11 A36 F14 15 0.00 0.00 0.00 0.00 42.00 0.00 0.00 0.00 APN: 04S - i% t+- IS [Free Recording Requested Government Code Sections 6103 and 27383] N ]�DiZi7�1�1;3F 1\:`I_ _ : �yi<t�►1u I �l`►Y 1[701:7 �1►`Y I�� This DEED OF TRUST, dated as ofbtf_phb!AF 16 , 2015 for identification purposes only, is made by and among NEWPORT VETERANS HOUSING, LP, a California limited partnership ("Trustor") CA • C o P. P. ("Trustee"), and CITY OF NEWPORT BEACH, a California municipal corporation and charter city (`Beneficiary"). Trustor grants, transfers and assigns to Trustee in trust, upon the trusts, covenants, conditions and agreements and for the uses and purposes hereinafter contained, with power of sale, and right of entry and possession, all of its title and interest in that real property (the "Property") in the City of Newport Beach, County of Orange, State of California, described in Exhibit A attached hereto and incorporated herein by this reference. Together with Trustor's interest in all buildings, structures and improvements of every nature whatsoever now or hereafter situated on the Property; and Together with the rents, issues and profits thereof, and together with all buildings and improvements of every kind and description now or hereafter erected or placed thereon, and all fixtures, including but not limited to all gas and electric fixtures, engines and machinery, radiators, heaters, furnaces, heating equipment, laundry equipment, steam and hot-water boilers, stoves, ranges, elevators and motors, bathtubs, sinks, water closets, basins, pipes, faucets and other plumbing and heating fixtures, mantles, cabinets, refrigerating plant and refrigerators, whether mechanical or otherwise, cooking apparatus and appurtenances, and all shades, awnings, screens, blinds and other fumishings, it being hereby agreed that all such fixtures and furnishings shall to the extent permitted by law be deemed to be permanently affixed to and a part of the realty; and Together with all building materials and equipment now or hereafter delivered to said premises and intended to be installed therein; and Together with all plans, drawings, specifications, and articles of personal property now or hereafter attached to or used in and about the building or buildings now erected or hereafter to be erected on the Property which are necessary to the completion and comfortable use and occupancy of such building or buildings for the purposes for which they were or are to be erected, including all other goods and chattels and personal property as are ever used or fixmished in operating a building, or the activities conducted therein, similar to the one herein described and referred to, and all renewals or replacements thereof or articles in substitution 9921036753-0123 2765746.6 ai2/16/15 —2— RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO: City of Newport Beach 100 Civic Center Drive Newport Beach, California 92660 Attn: City Manager APN: [Free Recording Requested Government Code Sections 6103 and 27383] DEED OF TRUST WITH ASSIGNMENT OF RENTS This DEED OF TRUST, dated as of , 2015 for identification purposes only, is made by and among NEWPORT VETERANS HOUSING, LP, a California limited partnership ("Trustor'), , a ("Trustee"), and CITY OF NEWPORT BEACH, a California municipal corporation and charter city (`Beneficiary"). Trustor grants, transfers and assigns to Trustee in trust, upon the trusts, covenants, conditions and agreements and for the uses and purposes hereinafter contained, with power of sale, and right of entry and possession, all of its title and interest in that real property (the "Property") in the City of Newport Beach, County of Orange, State of California, described in Exhibit A attached hereto and incorporated herein by this reference. Together with Trustor's interest in all buildings, structures and improvements of every nature whatsoever now or hereafter situated on the Property; and Together with the rents, issues and profits thereof; and together with all buildings and improvements of every kind and description now or hereafter erected or placed thereon, and all fixtures, including but not limited to all gas and electric fixtures, engines and machinery, radiators, heaters, furnaces, heating equipment, laundry equipment, steam and hot-water boilers, stoves, ranges, elevators and motors, bathtubs, sinks, water closets, basins, pipes, faucets and other plumbing and heating fixtures, mantles, cabinets, refrigerating plant and refrigerators, whether mechanical or otherwise, cooking apparatus and appurtenances, and all shades, awnings, screens, blinds and other furnishings, it being hereby agreed that all such fixtures and furnishings shall to the extent permitted by law be deemed to be permanently affixed to and a part of the realty; and Together with all building materials and equipment now or hereafter delivered to said premises and intended to be installed therein; and Together with all plans, drawings, specifications, and articles of personal property now or hereafter attached to or used in and about the building or buildings now erected or hereafter to be erected on the Property which are necessary to the completion and comfortable use and occupancy of such building or buildings for the purposes for which they were or are to be erected, including all other goods and chattels and personal property as are ever used or furnished in operating a building, or the activities conducted therein, similar to the one herein described and referred to, and all renewals or replacements thereof or articles in substitution 882/036753-0123 2765748.6.12/16/15 -2- therefor, whether or not the same are, or shall be attached to said building or buildings in any manner. To have and to hold the property hereinbefore described (including the Property and all appurtenances), all such property being referred to collectively herein as the "Property," to Trustee, its successors and assigns forever. FOR THE PURPOSE of securing (1) payment of indebtedness of Trustor to the Beneficiary in the principal sum of ONE MILLION NINE HUNDRED SEVENTY FIVE THOUSAND DOLLARS ($1,975,000) (the "City Loan"), evidenced by a promissory note dated 12 (f % 2015 between Trustor and Beneficiary (the "City Loan Note"), together with all sums due thereunder including interest and other charges; and (2) the performance of each agreement of Trustor in this Deed of Trust and the City Loan Note, including, without limitation, that certain Affordable Housing Agreement entered into by and between Trustor and Beneficiary on or about t'- 1 14 , 2015 (the "AHA"), and that certain Regulatory Agreement and Declaration of Covenants and Restrictions entered into by and between Trustor and Beneficiary on or about the same date hereof (collectively, the "City Loan Documents"). Said City Loan Note and all of its terms are incorporated herein by reference and this conveyance shall secure any and all extensions, amendments, modifications or renewals thereof however evidenced, and additional advances of the City Loan evidenced by any note reciting that it is secured hereby. AND TO PROTECT THE SECURITY OF THIS DEED OF TRUST, TRUSTOR COVENANTS AND AGREES: That it will pay the City Loan Note at the time and in the manner provided therein; 2. That it will not permit or suffer the use of any of the Property for any purpose other than the use for which the same was intended at the time this Deed of Trust was executed, namely, as affordable rental housing; 3. That the City Loan Note is incorporated herein and made a part of this Deed of Trust. Upon default under the City Loan Note or this Deed of Trust, Beneficiary, at its option, may declare the whole of the indebtedness secured hereby to be due and payable; 4. That all rents, profits and income from the Property covered by this Deed of Trust are hereby assigned to Beneficiary for the purpose of discharging the debt hereby secured. Permission is hereby given to Trustor so long as no default exists hereunder, to collect such rents, profits and income; 5. That upon default hereunder and the expiration of any applicable notice and cure periods, Beneficiary shall be entitled to the appointment of a receiver by any court having jurisdiction, without notice, to take possession and protect the Property described herein and operate same and collect the rents, profits and income therefrom; 6. That Trustor will keep the improvements now existing or hereafter erected on the Property insured against loss by fire and such other hazards, casualties and contingencies as may be required in writing from time to time by Beneficiary, and all such insurance shall be evidenced by standard fire and extended coverage insurance policy or policies, in the amount of 882/036753-0123 2765748.6 a12/16/15 -3- the replacement value of the improvements. Such policies shall be endorsed with a standard mortgage clause with loss payable to Beneficiary and certificates thereof together with copies of original policies shall be deposited with Beneficiary. Such policies shall be endorsed with a standard mortgage clause with loss payable to Beneficiary subordinate to the rights and interest of the beneficiary of the deed of trust securing the Senior Loan, as described in paragraph 30, below) and certificates thereof together with copies of original policies shall be deposited with Beneficiary; 7. To pay, before delinquency, any taxes and assessments affecting said Property when due, all encumbrances, charges and liens, with interest, on said Property or any part thereof which appear to be prior or superior hereto, all costs, fees and expenses of this Trust unless exemption is obtained therefrom; 8. To keep said Property in good condition and repair, not to remove or demolish any buildings thereon, to complete or restore promptly and in good and workmanlike manner any building which may be constructed, damaged, or destroyed thereon and to pay when due all claims for labor performed and materials furnished therefor (unless contested in good faith if Trustor provides security satisfactory to Beneficiary that any amounts found to be due will be paid and no sale of the Property or other impairment of the security hereunder will occur); to comply with all laws affecting said Property or requiring any alterations or improvements to be made thereon; not to commit or permit waste thereof; not to commit, suffer or permit any act upon said Property in violation of law and/or covenants, conditions and/or restrictions affecting said Property; not to permit or suffer any alteration of or addition to the buildings or improvements hereafter constructed in or upon said Property without the consent of Beneficiary; 9. To appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee, and to pay all costs and expenses, including cost of evidence of title and attorneys' fees in a reasonable sum, in any such action or proceeding in which Beneficiary or Trustee may appear; 10. Should Trustor fail to make any payment or do any act as herein provided, then Beneficiary or Trustee, but without obligation so to do and without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof, may make or do the same in such manner and to such extent as either may deem necessary to protect the security hereof. Beneficiary or Trustee, being authorized to enter upon said Property for such purposes, may commence, appear in and/or defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee; may pay, purchase, contest or compromise any encumbrance, charge, or lien which in the judgment of either appears to be prior or superior hereto; and, in exercising any such powers, may pay necessary expenses, employ counsel, and pay counsel's reasonable fees; 11. Beneficiary shall have the right to pay fire and other property insurance premiums when due should Trustor fail to make any required premium payments. All such payments made by Beneficiary shall be added to the principal sum secured hereby; 12. To pay immediately and without demand all sums so expended by Beneficiary or Trustee, under permission given under this Deed of Trust, with interest from date of expenditure at the rate specified in the City Loan Note; 882/036753-0123 2765748.6 al2/16/15 -4- 13. That the City Loan advanced hereunder is to be used for the acquisition of the Property; and upon the failure of Trustor to keep and perform such covenants, the principal sum and all arrears of interest, and other charges provided for in the City Loan Note shall, at the option of Beneficiary, become due and payable, anything contained herein to the contrary notwithstanding; 14. Trustor further covenants that it will not voluntarily create, suffer or permit to be created against the Property, subject to this Deed of Trust, any lien or liens (other than the lien of a deed of trust recorded prior in time and right to this Deed of Trust and/or the lien of a deed of trust to which Trustor has expressly agreed to subordinate the lien of this Deed of Trust, with City's written permission) except as authorized by Beneficiary, and further that it will keep and maintain the Property free from the claims of all persons supplying labor or materials which will enter into the construction of any and all buildings now being erected or to be erected on the Property; 15. That any and all improvements made or about to be made upon the Property, and all plans and specifications, comply with all applicable municipal ordinances and regulations and all other regulations made or promulgated, now or hereafter, by lawful authority, and that the same will upon completion comply with all such municipal ordinances and regulations and with the rules of the applicable fire rating or inspection organization, bureau, association or office. IT IS MUTUALLY AGREED THAT: 16. Subject to any cure rights under the AHA, if the construction of any improvements as herein referred to shall not be carried on with reasonable diligence, or shall be discontinued at any time for any reason other than events of Force Maieure pursuant to Paragraph 35 hereof, Beneficiary, after due notice to Trustor or any subsequent owner, is hereby invested with full and complete authority to enter upon the Property, employ watchmen to protect such improvements from depredation or injury and to preserve and protect the personal property therein, and to continue any and all outstanding contracts for the erection and completion of said building or buildings, to make and enter into any contracts and obligations wherever necessary, either in its own name or in the name of Trustor, and to pay and discharge all debts, obligations and liabilities incurred thereby. All such sums so advanced by Beneficiary (exclusive of advances of the principal of the indebtedness secured hereby) shall be added to the principal of the indebtedness secured hereby and shall be secured by this Deed of Trust and shall be due and payable on demand; 17. In the event of any fire or other casualty to the Project or eminent domain proceedings resulting in condemnation of the Project or any part thereof, Trustor shall have the right to rebuild the Project, and to use all available insurance or condemnation proceeds therefor subject to the prior right to any insurance proceeds or condemnation awards of the beneficiary of the deed of trust securing the Senior Loan, as described in paragraph 30; 18. Upon default by Trustor in making any payments provided for herein or in the City Loan Note secured hereby, and if such default is not made good within fifteen (15) calendar days after notice from Beneficiary, or if Trustor shall fail to perform any covenant or agreement in this Deed of Trust within thirty (30) calendar days after written demand therefor by Beneficiary (or, in the event that more than thirty (30) calendar days is reasonably required to cure such default, should Trustor fail to promptly commence such cure, and diligently prosecute 882/036753-0123 2765748.6 at2/16/15 -5- same to completion), Beneficiary may declare all sums secured hereby immediately due and payable by delivery to Trustee of 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 and Beneficiary may foreclose this Deed of Trust. Beneficiary shall also deposit with Trustee this Deed of Trust, the City Loan Note and all documents evidencing expenditures secured hereby; 19. After the lapse of such time as may then be required by law following the recordation of said notice of default, and notice of sale having been given as then required by law, Trustee, without demand on Trustor, shall sell Trustor's interest in said Property at the time and place fixed by it in said notice of sale, either as a whole or in separate parcels, and in such order as it may determine at public auction to the highest bidder for cash in lawful money of the United States, payable at time of sale. Trustee may postpone sale of all or any portion of said interest by public announcement at the time and place of sale, and from time to time thereafter may postpone the sale by public announcement at the time fixed by the preceding postponement. Trustee shall deliver to the purchaser its deed conveying Truster's interest in the property so sold, but without any covenant or warranty, express or implied. The recitals in the deed of any matters or facts shall be conclusive proof of the truthfulness thereof. Any person, including Trustor, Trustee or Beneficiary, may purchase at the sale. Trustee shall apply the proceeds of sale to payment of (1) the expenses of such sale, together with the reasonable expenses of this trust including therein reasonable Trustee's fees or attorneys' fees for conducting the sale, and the actual cost of publishing, recording, mailing and posting notice of the sale; (2) the cost of any search and/or other evidence of title procured in connection with such sale and revenue stamps on Trustee's deed; (3) all sums expended under the terms hereof, not then repaid, with accrued interest at the rate specified in the City Loan Note; (4) all other sums then secured hereby; and (5) the remainder, if any, to the person or persons legally entitled thereto; 20. Beneficiary may from time to time substitute a successor or successors to any Trustee named herein or acting hereunder to execute this Deed of Trust. Upon such appointment, and without conveyance to the successor trustee, the latter shall be vested with all title, powers, and duties conferred upon any Trustee herein named or acting hereunder. Each such appointment and substitution shall be made by written instrument executed by Beneficiary, containing reference to this Deed of Trust and its place of record, which; when duly recorded in the proper office of the county or counties in which the property is situated, shall be conclusive proof of proper appointment of the successor trustee; 21. The pleading of any statute of limitations as a defense to any and all obligations secured by this Deed of Trust is hereby waived to the full extent permissible by law; 22. Upon written request of Beneficiary stating that all sums secured hereby have been paid, and upon surrender of this Deed of Trust and the City Loan Note 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 such reconveyance of any matters of fact shall be conclusive proof of the truthfulness thereof. The grantee in such reconveyance may be described as "the person or persons legally entitled thereto"; 23. The trust created hereby is irrevocable by Trustor; 24. This Deed of Trust applies to, inures to the benefit of, and binds all parties hereto, 882/036753-0123 2765748.6 a12/16/15 -6- their heirs, legatees, devisees, administrators, executors, successors, and assigns. The term "Beneficiary" shall include not only the original Beneficiary hereunder but also any successor to Beneficiary's rights, powers, and responsibilities, and any future owner and holder including pledgees, of the City Loan Note secured hereby. In this Deed of Trust, whenever the context so requires, the masculine gender includes the feminine and/or neuter, and the singular number includes the plural. All obligations of each Trustor hereunder are joint and several; 25. Trustee accepts this trust when this Deed of Trust, duly executed and acknowledged, is made public record as provided by law. Except as otherwise provided by law, Trustee is not obligated to notify any party hereto of pending sale under this Deed of Trust or of any action or proceeding in which Trustor, Beneficiary, or Trustee shall be a party unless brought by Trustee; 26. The undersigned Trustor requests that copies of any notice of default and of any notice of sale hereunder be mailed to it at: c/o Community Development Partners 3416 Via Oporto, Suite 301 Newport Beach, CA 92663 Attention: Eric A. Paine Trustor agrees, at any time after receipt of a written request from Beneficiary, to furnish to Beneficiary a detailed statement in writing of income, rents, profits, and operating expenses of the premises, and the names of the occupants and tenants in possession, together with the expiration dates of their leases and full information regarding all rental and occupancy agreements, and the rents provided for by such leases and rental and occupancy agreements, and such other information regarding the Property and their use as may be requested by Beneficiary. 27. In order to induce Beneficiary to make the loan evidenced hereby, Trustor agrees that in the event of any Transfer of the Property without the prior written consent of Beneficiary (other than a transfer resulting from a foreclosure, or conveyance by deed in lieu of foreclosure, by the holder of the deed of trust securing the Senior Loan), Beneficiary shall have the absolute right at its option, without prior demand or notice, to declare all sums secured hereby immediately due and payable. Consent to one such transaction shall not be deemed to be a waiver of the right to require consent to future or successive transactions. Beneficiary may grant or deny such consent in its sole discretion and, if consent should be given, any such transfer shall be subject to this paragraph 28, and any such transferee shall assume all obligations hereunder and agree to be bound by all provisions contained herein. Such assumption shall not, however, release Trustor from any liability thereunder without the prior written consent of Beneficiary. (a) As used herein, "transfer" includes the sale, agreement to sell, transfer or conveyance of the Property, or any portion thereof or interest therein, whether voluntary, involuntary, by operation of law or otherwise, the execution of any installment land sale contract or similar instrument affecting all or a portion of the Property, or the lease of all or substantially all of the Property. "Transfer" shall not include the leasing of individual residential units on the Property or any transaction that doesn't require approval by the Beneficiary pursuant to Section 1.5 of the AHA. (b) The term "sale" means any transfer, assignment, conveyance or lease 882/036753-0123 2765748.6 a12/16/15 -7- (other than to a tenant for occupancy) of the Property and/or the improvements thereon, or any portion thereof, or any interest therein by the Trustor, but excludes any purchase option agreement given to Trustor's general partner(s). Sale includes a sale in condemnation or under threat thereof. Sale does not include dedications and grants of easements to public and private utility companies of the kind customary in real estate development. Sale shall also not include any transaction that doesn't require approval by the Beneficiary pursuant to Section 1.5 of the AHA. Notwithstanding anything to the contrary contained in this Deed of Trust or in the City Loan Note, prior to declaring any default or taking any remedy permitted under this Deed of Trust, the City Loan Note or applicable law based upon an alleged default, the Qualified Tax Credit Investor (the "Investor"), if there is one, shall have a period of not less than thirty (30) calendar days to cure such alleged default; provided, however, if in order to cure such default the Investor reasonably believes that it must remove a general partner of Trustor, or all of them, pursuant to authority granted under the agreement that sets forth the terms of Trustor's limited partnership (the "Partnership Agreement"), and consistent with Section 1.5 of the AHA, the Investor shall so notify Beneficiary and so long as the Investor is reasonably and diligently attempting to remove the general partner or general partners, the Investor shall have until the date that is thirty (30) calendar days after the effective date of the removal of the general partner or general partners to cure such default. 28. Trustor shall permit Beneficiary and its agents or representatives to inspect the Property at any and all reasonable times, with twenty-four (24) hours advance notice. Inspections shall be conducted so as not to interfere with the tenants' use and enjoyment of the Property. 29. It is hereby expressly agreed and acknowledged by Trustor and Beneficiary that this Deed of Trust will be a subordinate deed of trust only to the deed of trust securing the Acquisition Loan before the close of escrow. Further, this Deed of Trust shall only be subordinate to the deeds of trust securing the Construction Loan and Take Out Loan upon receipt and approval of the Nine Percent (9%) Tax Credits by Developer, and that the City Loan secured hereby, and the City Loan Note will be subject and subordinate only to these deeds of trust as such are defined in the AHA (collectively referred to as the "Senior Loan"). 30. For purposes of this Deed of Trust, "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", "acutely 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) asbestos, (vii) polychlorinated byphenyls, (viii) listed under Article 9 or defined as "hazardous" or "extremely hazardous" pursuant to Article 11 of Title 22 of the California Code 882/036753-0123 2765748.6 a12/16/15 -$- of Regulations, Chapter 20, (ix) designated as "hazardous substances" pursuant to Section 311 of the Clean Water Act (33 U.S.C. Section 1317), (x) defined as a "hazardous waste" pursuant to Section 1004 of the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq. (42 U.S.C. Section 6903), (xi) defined as "hazardous substances" pursuant to Section 101 of the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. Section 9601 et seq., (xii) methyl -tertiary butyl ether, (xiii) perchlorate or (xiv) any other substance, whether in the form of a solid, liquid, gas or any other form whatsoever, which by any governmental requirements either requires special handling in its use, transportation, generation, collection, storage, handling, treatment or disposal, or is defined as "hazardous" or harmful to the environment. For purposes hereof, "Hazardous Materials" excludes materials and substances in quantities as are commonly used in the construction and operation of an apartment complex provided that such materials and substances are used in accordance with all applicable laws. 31. In addition to the general and specific representations, covenants and warranties set forth in this Deed of Trust or otherwise, Trustor represents, covenants and warrants, with respect to Hazardous Materials, as follows: (a) Neither Trustor nor, to the best knowledge of Trustor, any other person, has ever caused or permitted any Hazardous Materials to be manufactured, placed, held, located or disposed of on, under or at the Property or any part thereof, and neither the Property nor any part thereof, or any property adjacent thereto, has ever been used (whether by Trustor or, to the best knowledge of the Trustor, by any other person) as a manufacturing site, dump site or storage site (whether permanent or temporary) for any Hazardous Materials; (b) Trustor hereby agrees to indemnify Beneficiary, its officers, employees, contractors and agents, and hold Beneficiary, its officers, employees, contractors and agents harmless from and against any and all losses, liabilities, damages, injuries, costs, expenses and claims of any and every kind whatsoever paid, incurred or suffered by, or asserted against Beneficiary, its officers, employees, contractors or agents for, with respect to, or as a direct or indirect result of, the presence or use, generation, storage, release, threatened release or disposal of Hazardous Materials on or under the Property or the escape, seepage, leakage, spillage, discharge, emission or release of any Hazardous Materials from the Property (including, without limitation, any losses, liabilities, damages, injuries, costs, expenses or claims asserted or arising under CERCLA, any so-called "Superfund" or "Superlien" law, or any other federal, state or local statute, law, ordinance, code, rule, regulation, order or decree regulating, relating to or imposing liability or standards of conduct concerning any Hazardous Materials), caused by Trustor. (c) Trustor has not received any notice of (i) the happening of any event involving the use, spillage, discharge or cleanup of any Hazardous Materials ("Hazardous Discharge") affecting Trustor or the Property or (ii) any complaint, order, citation or notice with regard to air emissions, water discharges, noise emissions or any other environmental, health or safety matter affecting Trustor or the Property (`Environmental Complaint") from any person or entity, including, without limitation, the United States Environmental Protection City ("EPA"). If Trustor receives any such notice after the date hereof, then Trustor will give, within seven (7) business days thereafter, oral and written notice of same to Beneficiary. (d) Without limitation of Beneficiary's rights under this Deed of Trust, 882/036753-0123 2765748.6 al2/16/15 -9- Beneficiary shall have the right, but not the obligation, to enter onto the Property or to take such other actions as it deems necessary or advisable to clean up, remove, resolve or minimize the impact of, or otherwise deal with, any such Hazardous Materials or Environmental Complaint upon its receipt of any notice from any person or entity, including without limitation, the EPA, asserting the existence of any Hazardous Materials or an Environmental Complaint on or pertaining to the Property which, if true, could result in an order, suit or other action against Trustor affecting any part of the Property by any governmental agency or otherwise which, in the sole opinion of Beneficiary, could jeopardize its security under this Deed of Trust. All reasonable costs and expenses incurred by Beneficiary in the exercise of any such rights shall be secured by this Deed of Trust and shall be payable by Trustor upon demand together with interest thereon at a rate equal to the highest rate payable under the City Loan Note secured hereby. 32. The following shall be an "Event of Default:" (a) Failure of Trustor to pay, when due, principal and interest and any other sums or charges on the City Loan Note, in accordance with the provisions set forth in the City Loan Note and such failure is not cured within fifteen (15) calendar days after receipt of written notice from Beneficiary; or (b) A violation of the terms, conditions or covenants of the City Loan Note, this Deed of Trust, the AHA or City Regulatory Agreement after the expiration of any applicable cure period. 33. Subject to the extensions of time set forth in paragraph 35, and subject to the further provisions of this paragraph 34 and of paragraphs 36 and 37, failure or delay by the Trustor to perform any term or provision of this Deed of Trust constitutes a default under this Deed of Trust. The Trustor must immediately commence to cure, correct, or remedy such failure or delay and shall complete such cure, correction or remedy with reasonable diligence. (a) The Beneficiary shall give written notice of default to the Trustor with a copy to the limited partners of Trustor for which Beneficiary has been supplied with address for notice, specifying the default complained of by the Beneficiary. Delay in giving such notice shall not constitute a waiver of any default nor shall it change the time of default. (b) The Trustor shall not be in default so long as it endeavors to complete such cure, correction or remedy with reasonable diligence, provided such cure, correction or remedy is completed within thirty (30) calendar days after receipt of written notice (or such additional time as may be reasonably necessary to correct the cause). (c) Any failures or delays by the Beneficiary in asserting any of its rights and remedies as to any default shall not operate as a waiver of any default or of any such rights or remedies. Delays by the Beneficiary in asserting any of its rights and remedies shall not deprive the Beneficiary of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert, or enforce any such rights or remedies. 34. Notwithstanding specific provisions of this Deed of Trust, performance hereunder shall not be deemed to be in default where delays or defaults are due to: war; insurrection; strikes; lock -outs; riots; floods; earthquakes; fires; casualties; acts of God or other deities; acts of the public enemy; epidemics; quarantine restrictions; freight embargoes; lack of transportation; 882/036753-0123 2765748.6 a12/16/15 '10' governmental restrictions or priority; litigation; unusually severe weather; inability to secure necessary labor, materials or tools; delays of any contractor or supplier•, acts of the other party; acts or failure to act of the Beneficiary, or any other public or governmental agency or entity (except that any act or failure to act of Beneficiary shall not excuse performance by Beneficiary); or any other causes beyond the reasonable control or without the fault of the party claiming an extension of time to perform. An extension of time for any such cause shall be for the period of the enforced delay and shall commence to run from the time the party claiming such extension gives notice to the other party, provided notice by the party claiming such extension is given within fifteen (15) calendar days after the commencement of the cause. Times of performance under this Deed of Trust may also be extended in writing by the Beneficiary and Trustor. 35. If a monetary event of default occurs under the terms of the City Loan Note or this Deed of Trust, prior to exercising any remedies thereunder Beneficiary shall give Trustor written notice of such default. Trustor shall have a period of fifteen (15) calendar days after such notice is given within which to cure the default prior to exercise of remedies by Beneficiary under the City Loan Note and this Deed of Trust. 36. If a non -monetary event of default occurs under the terms of the City Loan Note or this Deed of Trust, prior to exercising any remedies hereunder or thereunder, Beneficiary shall give Trustor notice of such default. If the default is reasonably capable of being cured within thirty (30) calendar days, Trustor shall have such period to effect a cure prior to exercise of remedies by the Beneficiary under the City Loan Note and this Deed of Trust. If the default is such that it is not reasonably capable of being cured within thirty (30) calendar days, and Trustor (a) initiates corrective action within said period, and (b) diligently, continually, and in good faith works to effect a cure as soon as possible, then Trustor shall have such additional time as is reasonably necessary to cure the default prior to exercise of any remedies by Beneficiary. In no event shall Beneficiary be precluded from exercising remedies if its security becomes or is about to become materially jeopardized by any failure to cure a default or the default is not cured within one hundred eighty (180) calendar days after the first notice of default is given. 37. Beneficiary shall provide those limited partners of Trustor for which Beneficiary has been supplied with address for notice with a copy of any written notice provided to Trustor under the terms of the City Loan Documents. In the event of a monetary event of default, Trustor's limited partners shall have a period of fifteen (15) calendar days after receipt of such notice, or such longer period of time as may be set forth in the City Loan Documents, to cure the default prior to exercise of any remedy by Beneficiary. In the event a non -monetary event of default occurs under any City Loan Document, Trustor's limited partners shall have a period of thirty (30) calendar days after receipt of such notice, or such longer period of time as may be set forth in the City Loan Documents, to cure the default prior to exercise of any remedy by Beneficiary. Notwithstanding anything to the contrary contained in the City Loan Documents, Beneficiary hereby agrees that any cure of any default made or tendered by Trustor's limited partners shall be deemed to be a cure by Trustor and shall be accepted or rejected on the same basis as if such cure were made or tendered by Trustor. 38. Subject to paragraph 35, Trustor, upon the occurrence of an Event of Default as described in paragraph 33 that has not been cured with the applicable cure period set forth in paragraph 36 or 37, shall be obligated to repay the City Loan and, subject to the nonrecourse provision of the City Loan Note, Beneficiary may seek to enforce payment of any and all 882/036753-0123 2765748.6 al2/16/15 -11- amounts due by Trustor pursuant to the terms of the City Loan Note. 39. All expenses (including reasonable attorneys' fees and costs and allowances) incurred in connection with an action to foreclose, or the exercise of any other remedy provided by this Deed of Trust, including the curing of any Event of Default, shall be the responsibility of Trustor. 40. Except as provided in paragraph 30, each successor owner of an interest in the Property, other than through foreclosure, deed in lieu of foreclosure or an owner who takes an interest in the Property after a foreclosure has occurred, shall take its interest subject to this Deed of Trust. 41. Notwithstanding anything to the contrary herein, Beneficiary agrees that any extended low-income housing commitment (as such term is defined in Section 42(h)(6)(B) of the Internal Revenue Code) (the "Extended Use Agreement") shall be subordinate to this Deed of Trust and shall be recorded against the Property; provided that such Extended Use Agreement, by its terms, will terminate upon foreclosure or upon a transfer of the Property by instrument in lieu of foreclosure in accordance with said Section 42(h)(6)(B). [Signatures on Following Page] 882/036753-0123 2765748.6 a12/16/15 -12- "Trustor" NEWPORT VETERANS HOUSING LP, a California limited partnership Dated: C , 2015 By: CDP Newport LLC, a California limited liability company Its: Administrative General Partner By: Community Development Partners, a California corporation Its: Sole Managing ember By: ric cine Its: CEO By: Mercy House Living Centers, a California nonprofit public benefit corporation Its: Managing General Partner By: Larry4faynes Its: President 882/036753-0123 2765748.6 a12/16/15 -13- A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. STATE OF CALIFORNIA ) )ss. COUNTY OF Oran1a. ) On 0 ece�.ber {�. 7.016 before me, Tito No}ory Public Notary Public, (here insert name and title of the officer) personally appeared Er;c- PA; ne; who proved to me on the basis of satisfactory evidence to be the person(d) whose name(e)o/are subscribed to the within instrument, and acknowled ed to me that@f /she/they executed the same in�er/their authorized capacity(yes), and that by ht /her/their signature(s) on the instrument the person(e, or the entity upon behalf of which the person(j6 acted, executed the instrument. certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS y and and official sea]. Signature.: A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. STATE OF CALIFORNIA ) )ss. COUNTY OF 0 rat n Com VIIIA n 02099074 Nota - cow" Cowry Comm. Expirn Fob 6 2019 OnUecerlDM IWiX013 beforeme,Tint Winotr INa1'ar4 PinbIic Notary Public, (here insert name�tle of the officer) personally appeared J rrrr4 Nrs5 who proved to me on the basis of satisfactory evidence to be the personfp) whose name(Sj ID/are subscribed to the within instrument, and acknowledged to me that�i /she/they executed the same in�/her/their authorized capacity(igg), and that by�i`�i /her/their signature(g) on the instrument the person(, or the entity upon behalf of which the personV acted, executed the instrument. I certify under PENALTY OF PERJURY under foregoing paragraph is true and correct. WITNESS my hand and official seal. 1 Signature_ 882/036753-0123 2765748.6 al2/16/15 -14- the laws of the State of California that the TIM WINGER Commutroo 0 2099071 `NOCKY ft nyomH (seal) Com fM 9 2019 GOVERNMENT CODE SECTION 27361.7 I CERTIFY UNDER PENALTY OF PERJURY THAT THE NOTARY SEAL ON THE DOCUMENT TO WHICH THIS STATEMENT IS ATTACHED READS AS FOLLOWS: NAME OF NOTARY: TIM WINGER DATE COMMISSION EXPIRES: FEB. 6, 2019 COUNTY WHERE BOND IS FILED: ORANGE COMMISSION NO.: 2099074 VENDOR NO.: NNAl PLACE OF EXECUTION: NEWPORT BEACH DATE: 12/22/15 Commonwealth Land Title, California Chris Maziar Exbibit A Leeal Description of Property All that certain real property situated in the County of Orange, State of California, described as follows: Lots 11, 12 and 13 in Block 160 of River Section, Newport Beach, in the City of Newport Beach, County of Orange, State of California, as shown on a map recorded in Book 4, Page 25 of Miscellaneous Maps, in the office of the County Recorder of said County. EXCEPT therefrom Lot 11 all oil, gas, minerals and other hydrocarbon substances lying below a depth shown below but with no right of surface entry, as provided in deeds of record Depth: 50 feet EXCEPT therefrom Lot 13 all oil, gas, minerals and other hydrocarbon substances lying below a depth shown below but with no right of surface entry, as provided in deeds of record Depth: 50 feet EXCEPT therefrom Lot 12 all oil, gas, minerals and other hydrocarbon substances lying below a depth shown below but with no right of surface entry, as provided in deeds of record Depth: 400 feet Assessor's Parcel Number: 045-114-15 Address: 6001 Newport Shores Drive, Newport Beach, CA 92663 H:\REAL ESTATE\NEW BURNESS\DEVELOPMENT LOANS\Community DevelopmentPartners\Newport Shores\Finat\Deed of Trust - Final.doc Page 16 of*