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Home My WebLink AboutContract 17561 75C PROMISSORY NOTE Not to Exceed $2,500,000 June 13, 2018 Cathedral City, California ("Effective Date") For value received, City Urban Revitalization Corporation, a California nonprofit public benefit corporation ("CURC"), promises to pay to the City of Cathedral City, a municipal corporation ("City"), or order, at 68-700 Avenida Lalo Guerrero, Cathedral City, CA 92234, or such other place as the City may from time to time designate in writing, the principal sum of Two Million Five Hundred Thousand Dollars ($2,500,000) ("Loan"), or as much thereof as has been disbursed by City to CURC, in lawful money of the United States of America, together with interest thereon, subject to and in accordance with the terms, conditions and limitations contained in this Promissory Note ("Note"). 1. This Note is being given in consideration of CURC's obligations under that certain Fire Station Loan Agreement by and between the City and CURC, dated June 13, 2018 ("Loan Agreement"). Pursuant to the Loan Agreement, the City has provided the Loan to CURC for the purpose of paying a portion of the costs of designing, constructing and installing the Replacement Station, as more fully set forth in the Loan Agreement. This Note is to be construed in conjunction with the Loan Agreement. Capitalized terms not otherwise defined herein shall have the meaning set forth in the Loan Agreement. This Note is secured by a Deed of Trust dated as of the date hereof, executed by CURC for the benefit of City and encumbering the property described therein ("Property"). 2. Except as otherwise provided in Section 9 below, the Loan shall accrue simple interest at four and one-half percent (4.5%) per annum, compounded annually, commencing upon the date of disbursement of the Loan proceeds and continuing thereafter until the Loan is repaid in full. CURC is not required to make periodic payments of either principal or of interest under this Note. Except as provided in Section 29 of the Deed of Trust, the entire principal balance of the Loan and all accrued interest thereon shall be immediately due and payable in full upon the earlier of: (i) the fifth (5th) anniversary ("Maturity Date") of the date of disbursement of the Loan proceeds; and (ii) the occurrence of any default by CURC under the Loan Agreement, this Note, the Lease -Back Agreement, the Letter Agreement, or the Deed of Trust, following notice and expiration of any applicable cure periods. 3. In the event of a default by CURC under the Loan Agreement, this Note or the Deed of Trust, the entire principal and interest balance of the Loan shall be immediately due and payable in full as provided in Sections 8 and 9, below. 4. CURC shall have the right to prepay all or a portion of the principal and interest due under this Note without any charge or penalty. 5. Except as provided in Section 29 of the Deed of Trust, the entire unpaid principal balance and all interest and other sums accrued hereunder shall be due and payable upon a transfer, Exhibit A-1 OAK #4823-1374-1407 v3 07024-0121 C1186-005 -- 3411537.1 absent City consent, of all or any part of the Property or the improvements located or hereafter constructed on the Property (the "Improvements"), or any interest therein. 6. Any notice to CURC provided for in this Note shall be given by personal delivery or by mailing such notice by first class or certified mail, return receipt requested, addressed to CURC at the address stated below, or to such other address CURC may designate by written notice to the City. Any notice to the City shall be given by personal delivery or by mailing such notice by first class or certified mail, return receipt requested, to the City at the address stated above, or at such other address as may have been designated by written notice to CURC. Mailed notices shall be deemed delivered and received three (3) days after deposit in accordance with this provision in the United States mail. City: City of Cathedral City 68-700 Avenida Lalo Guerrero Cathedral City, CA 92234 Attention: Administrative Services Director with a copy to: Burke, Williams & Sorensen 1600 Iowa Avenue, Suite 250 Riverside, CA 92507-7426 Attention: Eric Vail, City Attorney CURC: City Urban Revitalization Corporation 68-700 Avenida Lalo Guerrero Cathedral City, CA 92234 Attention: Executive Director with a copy to: Gresham Savage Nolan & Tilden, PC 550 E. Hospitality Lane, Suite 300 San Bernardino, CA 92408 Attention: Kevin Randolph 7. Any default by CURC under the Loan Agreement, Deed of Trust, or this Note shall constitute an event of default under this Note. Upon the occurrence of any event of default by CURC, or at any time thereafter, at the option of the City, the entire principal balance of this Note and all accrued interest, shall become immediately due and payable. City's failure to exercise such option shall not constitute a waiver of such option with respect to any subsequent event. City's failure in the exercise of any other right or remedy hereunder or under any agreement which secures the indebtedness related thereto shall not affect any right or remedy and no single or partial exercise of any such right or remedy shall preclude any further exercise thereof. 8. Upon the occurrence of a default, interest shall automatically be increased without notice to the rate ("Default Rate") equal to the lesser of ten percent (10%) per annum or the maximum rate permitted by law; provided however, if any payment due hereunder is not paid when due, the Default Rate shall apply commencing upon the due date for such payment. The imposition or acceptance of the Default Rate shall in no even constitute a waiver of a default under this Note or prevent City from exercising any of its other rights or remedies. Exhibit A-2 OAK #4823-1374-1407 v3 07024-0121 C1186-005 -- 3411537.1 9. CURC agrees to pay the following costs, expenses and attorneys' fees paid or incurred by the City or adjudged by a Court: (a) reasonable costs of collection, costs and expenses, and reasonable attorneys' fees paid or incurred in connection with the collection or enforcement of this Note or any part of it or of any covenant of this Note, whether or not suit is filed; (b) costs of suit and such sum as the Court may adjudge as reasonable attorneys' fees in any action to enforce payment of this Note or any part of it; and (c) costs of suit and such sum as the Court may adjudge as attorneys' fees in any other litigation or controversy connected with this Note, including, but not limited to actions for declaratory relief that the City is required to prosecute and defend and actions for relief based on rescission, or actions to cancel this Note that the City is required to defend. 10. Neither the City nor CURC may transfer or assign this Note. 11. (a) CURC and any endorsers hereof and all others who may become liable for all or any part of this obligation, severally waive presentment for payment, demand and protest and notice of protest, and of dishonor and nonpayment of this Note, and expressly consent to any extension of the time of payment hereof or of any installment hereof, to the release of any Party liable for this obligation, and any such extension or release may be made without notice to any of said parties and without any way affecting or discharging this liability. (b) All obligations arising under or related to this Note, the Lease -Back Agreement, the Letter Agreement, the Loan Agreement, and the Deed of Trust are fully and unconditionally non-recourse to CURC and its officers, officials, employees, agents, and contractors. All amounts due or to become due for any reason under the Loan Agreement, this Note, the Lease -Back Agreement, the Letter Agreement, or the Deed of Trust may be satisfied solely from the exercise of the City's rights and remedies against the Mortgaged Property (as defined in the Deed of Trust) and under no circumstances will CURC's present or future real and personal property assets other than the Mortgaged Property be liable for the satisfaction of any amounts that may become due under this Note, the Loan Agreement, the Lease -Back Agreement, the Letter Agreement, or the Deed of Trust. 12. This Note and all of the covenants, promises and agreements contained in it shall be binding upon and inure to the benefit of the respective legal and personal representatives, devises, heirs, successors and assigns of the City and CURC. 13. The relationship between City and CURC under this Note is solely that of borrower and lender, and the indebtedness evidenced by this Note and secured by the Deed of Trust will in no manner make City the partner or joint venturer of CURC. 14. Time is of the essence with respect to every provision of this Note. 15. This Note shall be construed in accordance with and be governed by the procedural and substantive laws of the State of California, without regard to its conflicts of laws principles. Any legal action or proceeding (including arbitration) filed in connection with the Loan Agreement, this Note, the Lease -Back Agreement, the Letter Agreement, or the Deed of Trust shall be filed and litigated in the Superior Court of Riverside County, California, except as may be otherwise provided by California law for actions between private parties and public entities. Exhibit A-3 OAK #4823-1374-1407 v3 07024-0121 C1186-005 -- 341 1537.1 Executed at Cathedral City, California, on this 13th day of June, 2018. CURC: CITY URBAN REVITALIZATION CORPORATION, a California non-profit corporation By: Its: Chief Financial Officer APPROVED AS TO FORM: GRESHAM SAVAGE N & TILDEN, a p lona • -oration olph, -neral ounsel Exhibit A-4 OAK #4823-1374-1407 v3 07024-0121 C1 186-005 -- 3411537.1 FIRE STATION LOAN AGREEMENT THIS FIRE STATION LOAN AGREEMENT ("Agreement") is entered into as of June 13, 2018 ("Effective Date"), by and between the CITY OF CATHEDRAL CITY, a municipal corporation ("City") and the CITY URBAN REVITALIZATION CORPORATION, a California non-profit public benefit corporation ("CURC"). City and CURC are sometimes referred to individually herein as a "Party" and collectively as the "Parties." RECITALS A. CURC is a California 501(c)(3) non-profit public benefit corporation, whose charitable purpose is to assist and alleviate the burdens upon local government, including by fostering economic development with the City's downtown core. B. In 2017, CURC negotiated with the Agua Caliente Band of Cahuilla Indians ("Agua Caliente") regarding the development of a casino/hotel project ("Casino Project") near the City's downtown core. To complete the Casino Project, Agua Caliente needed to acquire land from CURC, the City, and other third parties. Among other things, Agua Caliente needed to acquire the CURC owned parcel ("Existing Parcel") where City Fire Station No. 411 is presently located ("Existing Station"). C. To facilitate the Casino Project, CURC acquired the Existing Parcel and Existing Station from the City on December 15, 2016. City and CURC also entered into that certain Lease -Back Agreement dated December 15, 2016 (the "Lease -Back Agreement"), by which CURC, following its acquisition of the Existing Parcel, has leased the Existing Parcel and Existing Station back to the City for use until the Replacement Station (defined below) is completed and accepted. Agua Caliente acquired the Existing Parcel and Existing Station from CURC on August 18, 2017, subject to the Lease - Back Agreement. D. In connection with CURC's obligation to contract the Replacement Station, CURC and the City entered into that certain "Access and Construction License Agreement" dated September 13, 2017 ("Construction License") allowing CURC and its contractors and other representatives access to the Replacement Parcel (defined below) for the purposes of constructing the Replacement Facility. E. As part of the Lease -Back Agreement, City and CURC agreed that CURC would, at its sole cost and expense, design, develop, construct and dedicate a replacement fire station (the "Replacement Station") on that certain City -owned parcel located at 68752 Buddy Rogers Drive, Cathedral City, California, more particularly described as Assessor's Parcel Numbers 687-181-009 and 687-181-011 ("Replacement Parcel") before the Lease -Back Agreement can be terminated. F. In the Lease -Back Agreement and by letter dated January 26, 2017 ("Letter Agreement"), CURC agreed that: (1) CURC will, at no expense to the City, contract with a project management firm (more fully described in Recital G, below) to design, bid, and build the Replacement Station on the Replacement Parcel in accordance with all applicable laws, including California's prevailing wage statutes; (2) all plans and specifications for the Replacement Station will be subject to the City's approval; (3) CURC will contractually guarantee that Agua Caliente cannot terminate the OAK #4823-1374-1407 v3 07024-0121 C1186-005 - 3411537.1 Lease -Back Agreement until CURC has constructed and the City has accepted the Replacement Station; (4) subject only to force majeure delays, the Replacement Station will be completed no later than 36 months from the close of escrow for the sale of the Existing Parcel from CURC to Agua Caliente; and (5) CURC's obligation to construct the Replacement Station may not be assigned and will remain CURC's obligation. G. CURC and Griffin Structures, Inc. ("Project Manager") have entered into that certain "Agreement for Project and Construction Management and Related Owner Representation Services" ("PM Agreement") dated August 21, 2017, by which CURC retained the Project Manager to manage the design, construction and other aspects of the Replacement Station, as more specifically set forth in the PM Agreement. Pursuant to the PM Agreement, an appropriately licensed general contractor ("General Contractor") will be engaged to oversee the construction of the Replacement Station on the Replacement Parcel. The Project Manager has advised CURC that the total estimated design and construction costs currently exceed the funds that CURC has on hand to design and construct the Replacement Station by approximately Two Million Five Hundred Thousand Dollars ($2,500,000) ("Funding Gap"). H. In consideration for CURC's commitment to construct the Replacement Station on the Replacement Parcel at its sole cost, the City desires to loan to CURC, on the terms set forth herein, the sum of Two Million Five Hundred Thousand Dollars ($2,500,000) for the purposes of filling the Funding Gap. NOW, THEREFORE, for and in consideration of the mutual covenants and agreements contained in this Agreement, the Lease -Back Agreement, the Note (defined in Section 1.B below), and the Deed of Trust (defined in Section 1.B below), and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows: AGREEMENTS Section 1. Loan Commitment. A. Loan Term and Amount. In consideration of CURC's agreements hereunder, including its commitment to design and construct the Replacement Station on the Replacement Parcel at its sole expense, City agrees to provide a secured loan to CURC in an amount not to exceed Two Million Five Hundred Thousand Dollars ($2,500,000) ("Loan") to fund a portion of the costs of designing and constructing the Replacement Station ("Work"). All unpaid portions of the Loan shall bear simple interest at four and one-half percent (4.5%) per annum, compounded annually, commencing on the date of disbursement of the Loan and continuing thereafter until the Loan is repaid in full. The Loan proceeds will be distributed directly to CURC in one (1) lump sum payment within three (3) business days following CURC's written demand, which may be made at any time following the Effective Date of this Agreement. B. Promissory Note and Deed of Trust. The Loan shall be evidenced by a promissory note ("Note") in the form of Exhibit A, attached hereto and incorporated herein. As security for CURC's obligation to repay the Loan, CURC shall grant to City a first priority position deed of trust in that certain real property that CURC owns in fee designated as Riverside County 2 OAK #4823-1374-1407 v3 07024-0121 C1 186-005 -- 341 1537.1 Assessor's Parcel Numbers 687-500-018, 687-500-001, and 687-500-003, and more particularly identified in the deed of trust attached hereto as Exhibit B ("Deed of Trust"). C. No Periodic Payments; Maturity Date; Acceleration Events. CURC is not required to make periodic payments of either principal or of interest under this Agreement, the Note, the Lease -Back Agreement, the Letter Agreement, or the Deed of Trust. Except as provided in Section 29 of the Deed of Trust, the entire principal balance of the Loan and all accrued interest thereon will be immediately due and payable in full upon the earlier of: (i) the fifth (5th) anniversary ("Maturity Date") of the date of disbursement of the Loan Proceeds; and (ii) the occurrence of any Default by CURC under this Agreement or the occurrence of any event of default by CURC under the Note or Deed of Trust, following notice and expiration of any applicable cure periods. Section 2. Restrictions on CURC's Use of Loan. CURC covenants that the proceeds of the Loan shall be used solely to finance costs incurred in connection with the design, construction, and installation of the Replacement Station pursuant to valid, bona fide contracts made by CURC in the ordinary course of its business. The Loan proceeds shall not be used for any purpose other than as set forth in this Section 2. City shall not be responsible for any costs or charges incurred in the construction of the Replacement Station, except as expressly set forth herein with respect to funding of the Loan. Section 3. Prevailing Wage Requirements. CURC acknowledges and agrees that the Replacement Station constitutes a "public work" as defined in Labor Code section 1720 et seq. in that such Replacement Station involves the construction, alteration, demolition, installation, or repair work done under contract and paid for in whole or in part out of public funds. CURC shall comply with all applicable State Labor Code requirements. CURC shall require the general contractor for the Replacement Station to post on the Replacement Parcel prevailing wage rates for all applicable trades and to submit certified copies of payroll records to CURC. CURC shall provide such records monthly to City to ensure compliance with State Labor Code requirements pertaining to "public works." CURC shall also include in the construction contract a provision, in a form acceptable to City, obligating CURC's General Contractor to require its subcontractors to comply with all State Labor Code requirements pertaining to "public works," and, with respect to CURC's General Contractor and its subcontractors, to submit certified copies of payroll records to CURC. CURC shall provide such payroll records monthly to City. Section 4. Insurance. Prior to commencing construction of the Replacement Station and until recordation of a Notice of Completion with respect to such work, CURC, at no cost or expense to City, shall procure and maintain (or shall cause the General Contractor or Project Manager to procure and maintain) the following insurance policies: A. Workers' Compensation Coverage. Workers' Compensation Insurance and Employer's Liability Insurance for CURC's employees in accordance with the laws of the State of California. In addition, CURC shall require each contractor and subcontractor to similarly maintain Workers' Compensation Insurance and Employer's Liability Insurance in accordance with the laws of the State of California for all of the contractor's or subcontractor's employees. Any notice of cancellation or non -renewal of all Workers' Compensation policies must be received by the City at least thirty (30) days prior to such change. The insurer shall agree to waive all rights of subrogation against the City and its officers, agents, employees and volunteers for losses arising from the Replacement Station work. 3 OAK #4823-1374-1407 v3 07024-0121 C1186-005 -- 341 1537.1 B. General Liability Coverage. Commercial general liability insurance in an amount not less than Two Million Dollars ($2,000,000) per occurrence for bodily injury, personal injury and property damage. If a commercial general liability insurance form or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to the work to be performed under this Agreement or the general aggregate limit shall be at least twice the required occurrence limit. C. Automobile Liability Coverage. Automobile liability insurance covering bodily injury and property damage for all activities of CURC and its General Contractor and any subcontractors arising out of or in connection with design and construction of the Replacement Station, including coverage for owned, hired and non -owned vehicles, in an amount not less than Five Hundred Thousand Dollars ($500,000) combined single limit for each occurrence. D. Builder's Risk Coverage. During any construction of the Replacement Station, 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 Replacement Station. E. Policy Endorsements. Each insurance policy shall be with insurers possessing a Best's rating of no less than A:VII and shall be endorsed with the following specific language: (i) City and its elected or appointed officers, officials, employees, agents and volunteers are to be covered as additional insureds with respect to liability arising out of the work performed by or on behalf of the CURC, including materials, parts or equipment furnished in connection with such work or operations. (ii) This policy shall be considered primary insurance as respects the City, its elected or appointed officers, officials, employees, agents and volunteers. Any insurance, self- insurance or joint self-insurance maintained by the City, including any self-insured retention the City may have, shall be considered excess insurance only and shall not contribute with it. (iii) This insurance shall act for each insured and additional insured as though a separate policy had been written for each, except with respect to the limits of liability of the insuring company. (iv) Any failure to comply with reporting provisions of the policies shall not affect coverage provided to the City or its elected or appointed officers, officials, employees, agents or volunteers. (v) The insurance provided by this policy shall not be suspended, voided, canceled, or reduced in coverage or in limits except after thirty (30) days written notice has been received by the City. F. Deductibles and Self -Insured Retentions. Any deductibles or self-insured retentions must be declared to and approved by the City. At the City's option, CURC shall demonstrate financial capability for payment of such deductibles or self-insured retentions. 4 OAK #4823-1374-1407 v3 07024-0121 C1186-005 -- 341 1537.1 G. Certificates of Insurance and Endorsements. CURC shall provide certificates of insurance with original endorsements to City as evidence of the insurance coverage required herein. Certificates of such insurance shall be filed with the City on or before commencement of the construction of the Replacement Station. Current certificates of insurance shall be kept on file with the City at all times during the design and construction of the Replacement Station. Section 5. Title Insurance. City, at CURC's sole cost and expense, may obtain a CLTA or ALTA Lender's Policy of Title Insurance in the full amount of the Note, to protect City against the unenforceability or invalidity of the Note and Deed of Trust due to the existence of a more senior non - statutory lien or encumbrance of record against the Property. Section 6. Indemnification. CURC shall defend, assume all responsibility for and hold the City, and its respective officers, elected officials, volunteers, employees and agents, harmless from all demands, claims, actions, liabilities and damages, including damage to any property or injury to or death of any person (including attorneys' fees and costs), arising out of or caused by any of CURC's activities under this Agreement, including the design, construction and installation of the Replacement Station, whether such activities or performance thereof be by CURC or anyone directly or indirectly employed or contracted with by CURC and whether such damage shall accrue or be discovered before or after completion of the Replacement Station. The foregoing defense and indemnity obligations will not apply to any claims, damages, or other losses to the extent attributable to the City's (or its official's, officer's, employee's, consultant's, contractor's, or representative's) negligence or willful misconduct. Section 7. Default and Remedies. A. CURC Defaults. Any one or all of the following events shall constitute a default by CURC: 1. Any materially misleading statement or misrepresentation by CURC herein or in any other writing at any time furnished by CURC to City; 2. Nonperformance when due of any of the obligations of CURC described herein, or failure to perform any CURC obligation or covenant contained herein; 3. Failure of CURC to repay the Loan when due and such failure continues for a period of ten (10) days after such payment is due; 4. The filing of any liens, levy, attachment, executions, tax assessments or similar processes against the Replacement Property not released (or bonded over) within twenty (20) days; or 5. CURC's failure to use the Loan proceeds for any purpose other than the purposes set forth in Section 2 of this Agreement. B. City Defaults. Any one or all of the following events shall constitute a default by City: 5 OAK #4823-1374-1407 v3 07024-0121 C1186-005 -- 3411537.1 1. Nonperformance when due of any of the obligations of City described herein, or failure to perform any City obligation or covenant contained herein. C. Notice and Cure; Remedies. Upon the occurrence of a default by any Party, in addition to its rights and remedies prescribed in the Note and Deed of Trust or otherwise available at law or in equity, the non -defaulting Party shall have the right to terminate this Agreement, the Lease - Back Agreement, and the Letter Agreement with written notice to the defaulting Party. The defaulting Party will thereupon have a period of fifteen (15) days from its receipt of such notice within which to remedy or cure the default, if possible. If the defaulting Party fails to duly remedy the default within such period to the satisfaction of the non -defaulting Party, this Agreement, the Lease -Back Agreement, and the Letter Agreement will terminate. Following such termination, the non -defaulting Party shall have no further obligations under this Agreement, the Lease -Back Agreement, and the Letter Agreement. D. Force Majeure. Subject to the limitations set forth below, the time within which either Party shall be required to perform any act under this Agreement shall be extended by a period of time equal to the number of days during which performance of such act is delayed unavoidably and beyond the reasonable control of the Party seeking the delay by strikes, lock outs, and other labor difficulties; Acts of God; unusually severe weather, but only to the extent that such weather or its effects (including, without limitation, dry out time) result in delays that cumulatively exceed twenty (20) days for any winter season occurring after commencement of construction of the Replacement Station; failure or inability to secure materials or labor by reason of priority or similar regulations or order of any governmental or regulatory body; any development moratorium or any action of other public agencies that regulate land use, development, or the provision of services that prevents, prohibits, or delays construction of the Replacement Station; enemy action; civil disturbances; wars; terrorist acts; fire; unavoidable casualties; and litigation or other administrative or judicial proceeding involving the Replacement Station or this Agreement (each a "Force Majeure Delay"). 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 of the commencement of the cause, if written notice in accordance with Section 8(E) is sent by the Party claiming such extension to the other Party within sixty (60) days of the commencement of the cause. If notice is sent after such sixty (60) day period, then the extension shall commence to run no sooner than sixty (60) days prior to the giving of such notice. Times of performance under this Agreement may also be extended in writing by the mutual agreement of the City and CURC. Downturns in the economy or CURC's inability or failure to obtain financing for the Replacement Station shall not be deemed to be causes outside the reasonable control of CURC and shall not be the basis for a Force Majeure Delay. E. No Liability of City. No member, official or employee of the City shall be personally liable to CURC, or any successor in interest, in the event of any default or breach by City under this Agreement or for any amount which may become due to CURC or City or any successor or on any obligations under the terms of this Agreement. F. Non -Recourse. All obligations arising under or related to this Agreement, the Note, the Lease -Back Agreement, the Letter Agreement, and the Deed of Trust are fully and unconditionally non-recourse to CURC and its officers, officials, employees, agents, and contractors. All amounts due or to become due for any reason under this Agreement, the Note, or the Deed of Trust 6 C1186-005 -- 3411537.1 OAK #4823-1374-1407 v3 07024-0121 may be satisfied solely from the exercise of the City's rights and remedies against the Mortgaged Property (as defined in the Deed of Trust) and under no circumstances will CURC's present or future real and personal property assets other than the Mortgaged Property be liable for the satisfaction of any amounts that may become due under this Agreement, the Note, the Lease -Back Agreement, the Letter Agreement, or the Deed of Trust. Section 8. Miscellaneous Provisions. A. Transfer or Assignment. CURC shall not transfer or assign this Agreement or its obligation to construct the Replacement Station. B. Compliance With Governmental Regulations. CURC shall, at its sole cost and expense, comply with all applicable municipal, county, state and federal laws, rules, regulations and ordinances now in force, or which may hereafter be in force, pertaining to any and all activities contemplated under this Agreement, including the State's Prevailing Wage Laws, the Americans with Disabilities Act of 1990 ("ADA"), and any amendments to the ADA, as well as all other applicable laws regarding access to, employment of and service to individuals covered by the ADA. C. Governing Law. This Agreement shall be governed by and construed in accordance with the procedural and substantive laws of the State of California, without regard to its choice of laws principles. Any legal action or proceeding (including arbitration) brought relating to this Agreement, the Note, the Lease -Back Agreement, the Letter Agreement, or the Deed of Trust shall be held exclusively in a state court in the County of Riverside, California, except as may be otherwise provided by California law for actions between private parties and public entities. D. Time of the Essence. Time is of the essence of each and every provision of this Agreement. E. Notices. Notices or other communications given under this Agreement shall be in writing and shall be served personally or transmitted by first class mail, postage prepaid. Notices shall be deemed received either at the time of actual receipt or, if mailed in accordance herewith, on the third (3rd) business day after mailing, whichever occurs first. Notices shall be directed to the Parties at the following addresses or at such other addresses as the Parties may indicate by notice: City: with a copy to: CURC: OAK #4823-1374-1407 v3 07024-0121 City of Cathedral City 68-700 Avenida Lalo Guerrero Cathedral City, CA 92234 Attention: Administrative Services Director Burke, Williams & Sorensen 1600 Iowa Avenue, Suite 250 Riverside, CA 92507-7426 Attention: Eric Vail, City Attorney City Urban Revitalization Corporation 68-700 Avenida Lalo Guerrero 7 C1186-005 -- 3411537.1 with a copy to: Cathedral City, CA 92234 Attention: Executive Director Gresham Savage Nolan & Tilden, PC 550 E. Hospitality Lane, Suite 300 San Bernardino, CA 92408 Attention: Kevin Randolph F. Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be prohibited or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity without invalidating the remainder of such or the remaining provisions of this Agreement. G. Waiver. No waiver of any provision of this Agreement shall be deemed or shall constitute a waiver of any other provision, whether or not similar, nor shall any waiver constitute a continuing waiver. No waiver shall be binding unless executed in writing by the Party making the waiver. H. Interpretation. As used in this Agreement, masculine, feminine or neuter gender and the singular or plural number shall each be deemed to include the others where and when the context so dictates. The word "including" shall be construed as if followed by the words "without limitation." This Agreement shall be interpreted as though prepared jointly by all Parties. Titles and captions are for convenience of reference only and do not define, describe or limit the scope or the intent of this Agreement or any of its terms. I. Further Assurances. The Parties shall execute, acknowledge, file or record such other instruments and statements and shall take such additional action as may be necessary to carry out the purpose and intent of this Agreement. J. Binding Effect. This Agreement shall be binding upon and inure to the benefit of the Parties' respective heirs, legal representatives, successors and assigns. K. Entire Agreement. This Agreement and Exhibits A and B, which are incorporated herein, together constitute the entire agreement between the Parties and supersede all prior or contemporaneous agreements, representations, warranties and understandings of the Parties concerning the subject matter contained herein, written or oral. No change, modification, addendum or amendment to any provision of this Agreement shall be valid unless executed in writing by each Party hereto. L. Counterparts. This Agreement may be executed in one or more counterparts each of which shall be deemed an original, but all of which together shall constitute but one and the same instrument. M. Authority — City. City has the legal power, right and authority to enter into this Agreement and the instruments referenced herein, and to consummate the transaction contemplated herein in the execution, delivery and performance of this Agreement. Furthermore, the execution and 8 OAK #4823-1374-1407 v3 07024-0121 C1186-005 -- 341 1537.1 delivery of this Agreement has been duly authorized and no other action by City is required in order to make it a valid and binding contractual obligation of City. The individual(s) executing this Agreement on behalf of City are authorized to do so. N. Authority — CURC. CURC, and each person executing this Agreement on behalf of CURC, does hereby covenant and warrant that (i) it is duly incorporated or otherwise established or formed and validly existing under the laws of its state of incorporation, establishment or formation, (ii) it is duly qualified to do business in California, (iii) it has full corporate, partnership, trust, association or other power and authority to enter into this Agreement and to perform all of its obligations hereunder, and (iv) each person (and all of the persons if more than one signs) signing this Agreement on behalf of CURC, as applicable, is duly and validly authorized to do so. [SIGNATURES ON FOLLOWING PAGES] 9 OAK #4823-1374-1407 v3 07024-0121 C1 186-005 -- 341 1537.1 IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the day and year first above written. ATTEST: Gary F. Howell, City Clerk APPROVED A Eric S. Vail, ity Attorney APPROVED AS TO FORM: GRES : ► _ e AGE NOLAN :- TILDEN, a profes 'onal corpo : ion Kevi ,Gene .1 ounsel OAK #4823-1374-1407 v3 07024-0121 CITY: CITY OF CATHEDRAL CITY, a municipal Alice ration 1 Charles P. McClendon, City Manager CURC: CITY URBAN REVITALIZATION CORPORATION, . alifornia non-profit corporation By: Name: /y Its: �� /A/.w`Ntl ads,. JAMI e . S6,1 -r 10 C1 186-005 -- 3411537.1 EXHIBIT A PROMISSORY NOTE Not to Exceed $2,500,000 , 2018 Cathedral City, California ("Effective Date") For value received, City Urban Revitalization Corporation, a California nonprofit public benefit corporation ("CURC"), promises to pay to the City of Cathedral City, a municipal corporation ("City"), or order, at 68-700 Avenida Lalo Guerrero, Cathedral City, CA 92234, or such other place as the City may from time to time designate in writing, the principal sum of Two Million Five Hundred Thousand Dollars ($2,500,000) ("Loan"), or as much thereof as has been disbursed by City to CURC, in lawful money of the United States of America, together with interest thereon, subject to and in accordance with the terms, conditions and limitations contained in this Promissory Note ("Note"). 1. This Note is being given in consideration of CURC's obligations under that certain Fire Station Loan Agreement by and between the City and CURC, dated , 2018 ("Loan Agreement"). Pursuant to the Loan Agreement, the City has provided the Loan to CURC for the purpose of paying a portion of the costs of designing, constructing and installing the Replacement Station, as more fully set forth in the Loan Agreement. This Note is to be construed in conjunction with the Loan Agreement. Capitalized terms not otherwise defined herein shall have the meaning set forth in the Loan Agreement. This Note is secured by a Deed of Trust dated as of the date hereof, executed by CURC for the benefit of City and encumbering the property described therein ("Property"). 2. Except as otherwise provided in Section 9 below, the Loan shall accrue simple interest at four and one-half percent (4.5%) per annum, compounded annually, commencing upon the date of disbursement of the Loan proceeds and continuing thereafter until the Loan is repaid in full. CURC is not required to make periodic payments of either principal or of interest under this Note. Except as provided in Section 29 of the Deed of Trust, the entire principal balance of the Loan and all accrued interest thereon shall be immediately due and payable in full upon the earlier of: (i) the fifth (5th) anniversary ("Maturity Date") of the date of disbursement of the Loan proceeds; and (ii) the occurrence of any default by CURC under the Loan Agreement, this Note, the Lease -Back Agreement, the Letter Agreement, or the Deed of Trust, following notice and expiration of any applicable cure periods. 3. In the event of a default by CURC under the Loan Agreement, this Note or the Deed of Trust, the entire principal and interest balance of the Loan shall be immediately due and payable in full as provided in Sections 8 and 9, below. 4. CURC shall have the right to prepay all or a portion of the principal and interest due under this Note without any charge or penalty. Exhibit A-1 OAK #4823-1374-1407 v3 07024-0121 CI 186-005 -- 3411537.1 5. Except as provided in Section 29 of the Deed of Trust, the entire unpaid principal balance and all interest and other sums accrued hereunder shall be due and payable upon a transfer, absent City consent, of all or any part of the Property or the improvements located or hereafter constructed on the Property (the "Improvements"), or any interest therein. 6. Any notice to CURC provided for in this Note shall be given by personal delivery or by mailing such notice by first class or certified mail, return receipt requested, addressed to CURC at the address stated below, or to such other address CURC may designate by written notice to the City. Any notice to the City shall be given by personal delivery or by mailing such notice by first class or certified mail, return receipt requested, to the City at the address stated above, or at such other address as may have been designated by written notice to CURC. Mailed notices shall be deemed delivered and received three (3) days after deposit in accordance with this provision in the United States mail. City: City of Cathedral City 68-700 Avenida Lalo Guerrero Cathedral City, CA 92234 Attention: Administrative Services Director with a copy to: Burke, Williams & Sorensen 1600 Iowa Avenue, Suite 250 Riverside, CA 92507-7426 Attention: Eric Vail, City Attorney CURC: City Urban Revitalization Corporation 68-700 Avenida Lalo Guerrero Cathedral City, CA 92234 Attention: Executive Director with a copy to: Gresham Savage Nolan & Tilden, PC 550 E. Hospitality Lane, Suite 300 San Bernardino, CA 92408 Attention: Kevin Randolph 7. Any default by CURC under the Loan Agreement, Deed of Trust, or this Note shall constitute an event of default under this Note. Upon the occurrence of any event of default by CURC, or at any time thereafter, at the option of the City, the entire principal balance of this Note and all accrued interest, shall become immediately due and payable. City's failure to exercise such option shall not constitute a waiver of such option with respect to any subsequent event. City's failure in the exercise of any other right or remedy hereunder or under any agreement which secures the indebtedness related thereto shall not affect any right or remedy and no single or partial exercise of any such right or remedy shall preclude any further exercise thereof. 8. Upon the occurrence of a default, interest shall automatically be increased without notice to the rate ("Default Rate") equal to the lesser of ten percent (10%) per annum or the maximum rate permitted by law; provided however, if any payment due hereunder is not paid when due, the Default Rate shall apply commencing upon the due date for such payment. The Exhibit A-2 OAK #4823-1374-1407 v3 0 7024-012 1 C1186-005 -- 341 1537.1 imposition or acceptance of the Default Rate shall in no even constitute a waiver of a default under this Note or prevent City from exercising any of its other rights or remedies. 9. CURC agrees to pay the following costs, expenses and attorneys' fees paid or incurred by the City or adjudged by a Court: (a) reasonable costs of collection, costs and expenses, and reasonable attorneys' fees paid or incurred in connection with the collection or enforcement of this Note or any part of it or of any covenant of this Note, whether or not suit is filed; (b) costs of suit and such sum as the Court may adjudge as reasonable attorneys' fees in any action to enforce payment of this Note or any part of it; and (c) costs of suit and such sum as the Court may adjudge as attorneys' fees in any other litigation or controversy connected with this Note, including, but not limited to actions for declaratory relief that the City is required to prosecute and defend and actions for relief based on rescission, or actions to cancel this Note that the City is required to defend. 10. Neither the City nor CURC may transfer or assign this Note. 11. (a) CURC and any endorsers hereof and all others who may become liable for all or any part of this obligation, severally waive presentment for payment, demand and protest and notice of protest, and of dishonor and nonpayment of this Note, and expressly consent to any extension of the time of payment hereof or of any installment hereof, to the release of any Party liable for this obligation, and any such extension or release may be made without notice to any of said parties and without any way affecting or discharging this liability. (b) All obligations arising under or related to this Note, the Lease -Back Agreement, the Letter Agreement, the Loan Agreement, and the Deed of Trust are fully and unconditionally non-recourse to CURC and its officers, officials, employees, agents, and contractors. All amounts due or to become due for any reason under the Loan Agreement, this Note, the Lease -Back Agreement, the Letter Agreement, or the Deed of Trust may be satisfied solely from the exercise of the City's rights and remedies against the Mortgaged Property (as defined in the Deed of Trust) and under no circumstances will CURC's present or future real and personal property assets other than the Mortgaged Property be liable for the satisfaction of any amounts that may become due under this Note, the Loan Agreement, the Lease -Back Agreement, the Letter Agreement, or the Deed of Trust. 12. This Note and all of the covenants, promises and agreements contained in it shall be binding upon and inure to the benefit of the respective legal and personal representatives, devises, heirs, successors and assigns of the City and CURC. 13. The relationship between City and CURC under this Note is solely that of borrower and lender, and the indebtedness evidenced by this Note and secured by the Deed of Trust will in no manner make City the partner or joint venturer of CURC. 14. Time is of the essence with respect to every provision of this Note. 15. This Note shall be construed in accordance with and be governed by the procedural and substantive laws of the State of California, without regard to its conflicts of laws principles. Any legal action or proceeding (including arbitration) filed in connection with the Loan Exhibit A-3 OAK #4823-1374-1407 v3 07024-0121 C1186-005 -- 341 1537.1 Agreement, this Note, the Lease -Back Agreement, the Letter Agreement, or the Deed of Trust shall be filed and litigated in the Superior Court of Riverside County, California, except as may be otherwise provided by California law for actions between private parties and public entities. Executed at Cathedral City, California, on this APPROVED AS TO FORM: GRESHAM SAVAGE NOLAN & TILDEN, a professional corporation Kevin K. Randolph, General Counsel OAK #4823-1374-1407 v3 07024-0121 CURC: day of , 2018. CITY URBAN REVITALIZATION CORPORATION, a California non-profit corporation By: Its: Executive Director Exhibit A-4 C1186-005 -- 3411537.1 EXHIBIT B RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: City of Cathedral City 68-700 Avenida Lalo Guerrero Cathedral City, CA 92234 Attention: Administrative Services Director EXEMPT FROM RECORDING FEES PER GOVERNMENT CODE §§6103, 27383 Space above this line for Recorder's use. DEED OF TRUST, ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND FIXTURE FILING This Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing ("Deed of Trust") is made as of , 2018, by CITY URBAN REVITALIZATION CORPORATION, a California non-profit corporation, whose address is 68700 Avenida Lalo Guerrero, Cathedral City, CA 92234 as trustor ("Borrower"), to , whose address is , as trustee ("Trustee"), for the benefit of the CITY OF CATHEDRAL CITY, a California municipal corporation ("Lender"). To secure the full and timely payment of the Indebtedness and the full and timely performance and discharge of the Obligations, Borrower GRANTS, ASSIGNS, BARGAINS, SELLS, AND CONVEYS to Trustee, in trust, the Mortgaged Property, with power of sale and right of entry and possession, subject only to the Permitted Encumbrances, to have and to hold the Mortgaged Property, and Borrower does hereby bind itself, its successors, and its assigns to warrant and forever defend the title to the Mortgaged Property to Trustee against anyone lawfully claiming it or any part of it; provided, however, that if the Indebtedness is paid in full as and when it becomes due and payable and the Obligations are performed on or before the date they are to be performed and discharged, then the liens, security interests, estates, and rights granted by the Loan Documents shall terminate; otherwise, they shall remain in full force and effect. As additional security for the full and timely payment of the Indebtedness and the full and timely performance and discharge of the Obligations, Borrower grants to Lender a security interest in the Personalty, Fixtures, Leases, and Rents under Article Nine of the Uniform Commercial Code in effect in the State of California to secure the full and timely payment of the Indebtedness and the full and timely performance and discharge of the Obligations. Exhibit B-1 OAK #4823-1374-1407 v3 07024-0121 C1186-005 -- 3411537.1 Borrower agrees to execute and deliver, from time to time, such further instruments, including, but not limited to, security agreements, assignments, and UCC financing statements, as may be requested by Lender to confirm the lien of this Deed of Trust on any of the Mortgaged Property. Borrower further irrevocably grants, transfers, assigns and grants to Lender a security interest in the Rents. This assignment of Rents is to be effective to create a present security interest in existing and future Rents of the Mortgaged Property under California Civil Code §2938. TO MAINTAIN AND PROTECT THE SECURITY OF THIS DEED OF TRUST, TO SECURE THE FULL AND TIMELY PERFORMANCE BY BORROWER OF EACH AND EVERY OBLIGATION, COVENANT, AND AGREEMENT OF BORROWER UNDER THE LOAN DOCUMENTS, AND AS ADDITIONAL CONSIDERATION FOR THE INDEBTEDNESS AND OBLIGATIONS EVIDENCED BY THE LOAN DOCUMENTS, BORROWER HEREBY COVENANTS, REPRESENTS, AND AGREES AS FOLLOWS: 1. This instrument is being executed in connection with that certain Fire Station Loan Agreement executed by and between Borrower and Lender and dated as of , 2018 (the "Loan Agreement"), and to secure that certain Promissory Note executed by and between Borrower and Lender and dated as of , 2018 ("Note"). 2. Definitions. For purposes of this Deed of Trust, each of the following terms shall have the following respective meanings. Capitalized terms used but not defined in this Deed of Trust shall have the meaning ascribed to them in the Loan Agreement. 2.1 Attorneys' Fees. "Attorneys' fees" means the following costs, expenses, and attorneys' fees paid or incurred by Lender, or adjudged by a court: (a) any and all costs of collection and costs, expenses, and reasonable attorneys' fees paid or incurred in connection with the collection or enforcement of the Note or any of the Loan Documents, whether or not suit is filed; (b) any and all costs, expenses, and reasonable attorneys' fees paid or incurred in connection with representing Lender in any bankruptcy, reorganization, receivership, or other proceedings affecting creditors' rights and involving a claim under the Note or any of the Loan Documents; (c) any and all costs, expenses, and attorneys' fees incurred to protect the lien of this Deed of Trust or Lender's interest in the Mortgaged Property; and (d) costs of suit and such sum as the court may adjudge as attorneys' fees in any action to enforce payment of the Note, any of the Loan Documents, or any part of thereof. 2.2 Borrower. "Borrower" means the named Borrower in this Deed of Trust and the obligor under the Note, whether or not named as Borrower in this Deed of Trust, and the heirs, legatees, devisees, administrators, executors, successors in interest to the Mortgaged Property, and the assigns of any such person. Nothing in this Section is intended to modify any provision of the Loan Agreement pertaining to restrictions on transfer of the Mortgaged Property. 2.3 Default Rate. "Default Rate" means the Default Rate as defined in the Note. 2.4 Event of Default. "Event of Default" is defined in Section 20 of this Deed of Trust. Exhibit B-2 OAK #4823-1374-1407 v3 07024-0121 C1186-005 - 3411537.1 2.5 Environmental Laws. "Environmental Laws" means, collectively, (i) the Comprehensive Environmental Response, Compensation and Liability Act, as amended, 42 U.S.C. § 9601, et seq., (ii) the Hazardous Materials Transportation Act, as amended, 49 U.S.C. § 1801, et seq., (iii) the Resource Conservation and Recovery Act, as amended, 42 U.S.C. § 6901, et seq., (iv) the Federal Water Pollution Control Act, as amended, 33 U.S.C. § 1251, et seq., (v) the Clean Air Act, as amended, 42 U.S.C. § 7401, et seq., (vi) the Toxic Substances Control Act , as amended, 15 U.S.C. § 2601, et seq., (vii) the Clean Water Act, as amended, 33 U.S. Code § 1251, et seq., (viii) the Oil Pollution Act, as amended, 33 U.S.C. § 2701, et seq., (ix) California Health & Safety Code ("H&S Code") § 25100, et seq. (Hazardous Waste Control), (x) the Hazardous Substance Account Act, as amended, H&S Code § 25300, et seq., (xi) the Unified Hazardous Waste and Hazardous Materials Management Regulatory Program, as amended, H&S Code § 25404, et seq., (xii) H&S Code § 25531, et seq. (Hazardous Materials Management), (xiii) the California Safe Drinking Water and Toxic Enforcement Act, as amended, H&S Code § 25249.5, et seq., (xiv) H&S Code § 25280, et seq. (Underground Storage of Hazardous Substances), (xv) the California Hazardous Waste Management Act, as amended, H&S Code § 25170.1, et seq., (xvi) H&S Code § 25501, et seq. (Hazardous Materials Response Plans and Inventory), (xvii) H&S Code § 18901, et seq. (California Building Standards), (xviii) the Porter -Cologne Water Quality Control Act, as amended, California Water Code § 13000, et seq., (xix) California Fish and Game Code §§ 5650-5656 and (xx) or any other federal, state or local laws, ordinances, rules, regulations, court orders or common law related in any way to the protection of the environment, health or safety (excluding, however building codes and laws), as any of the foregoing may be amended from time to time. 2.6 Fixtures. "Fixtures" means all materials, supplies, equipment, apparatus, and other items now or later attached to, installed on or in the Land, or that in some fashion are deemed to be fixtures to the Land under the laws of the State of California, including the California Uniform Commercial Code. "Fixtures" includes, without limitation, all items of Personalty to the extent that they may be deemed Fixtures under Governmental Requirements. 2.7 Governmental Authority. "Governmental Authority" means any and all courts, boards, agencies, commissions, offices, or authorities of any nature whatsoever for any governmental unit (federal, state, county, district, municipal, city, or otherwise) whether now or later in existence. 2.8 Governmental Requirements. "Governmental Requirements" means, collectively, any and all applicable local, state, or federal code, ordinance, statute, rule, regulation, enactment, decree, judgment, order, permit, certificate, or law of any Governmental Authority whether now or later in existence including, without limitation: (a) the Americans with Disabilities Act, Title 24 of the California Administrative Code, and other similar federal, state and local laws, (b) building codes, zoning ordinances and any other laws relating to the use, ownership, construction or design of the improvements on the Mortgaged Property, including fire, safety, handicapped access, or seismic design, (c) any Environmental Laws, and (d) and any of the foregoing which are in any way applicable to (i) Borrower, any guarantor (with respect to the Indebtedness or the Mortgaged Property), or the Mortgaged Property, including, but not limited to, those concerning its ownership, use, occupancy, possession, operation, maintenance, alteration, repair, or reconstruction, (ii) Borrower's or any guarantor's presently or subsequently effective bylaws and articles of incorporation, or any instruments establishing any partnership, limited Exhibit B-3 C1186-005 -- 3411537.1 OAK #4823-1374-1407 v3 07024-0121 partnership, joint venture, trust, limited liability company, or other form of business association (if either, both, or all, by any of same), (iii) any and all contracts (written or oral) of any nature to which Borrower or any guarantor may be bound, and (iv) any and all restrictions, reservations, conditions, easements, or other covenants or agreements now or later of record affecting the Mortgaged Property. 2.9 Hazardous Materials. "Hazardous Materials" means any and all substances, contaminants, chemicals, wastes, sewage, materials or emissions which are now or hereafter regulated, controlled, prohibited or otherwise affected by any present or future local, state or federal statute, ordinance, code, rule, regulation, order, decree, permit or other law now or hereafter in effect including: (i) any substance defined as a "hazardous substance," "hazardous material," "hazardous waste," "toxic substance," or "air pollutant" in any Environmental Laws; (ii) any substance the presence of which at the Mortgaged Property causes or threatens to cause a nuisance upon the Mortgaged Property or to adjacent properties or poses or threatens to pose a hazard to the health or safety of human beings; and (iii) any substance the presence of which at the Mortgaged Property or at nearby or adjacent properties could constitute a trespass. In addition to the foregoing, to the extent not already included therein, the term "Hazardous Materials" also means (i) asbestos (including asbestos -containing materials); (ii) flammable, explosive, infectious, carcinogenic, mutagenic, or radioactive materials; (iii) petroleum or any substance containing or consisting of petroleum hydrocarbons (including gasoline, diesel fuel, motor oil, waste oil, grease or any other fraction of crude oil); (iv) paints and solvents; (v) lead; (vi) cyanide; (vii) DDT; (viii) printing inks; (ix) acids; (x) pesticides; (xi) ammonium compounds; (xii) polychlorinated biphenyls; (xiii) radon and radon gas; and (xiv) electromagnetic or magnetic materials, substances or emissions. 2.10 Impositions. "Impositions" means all real estate and personal property taxes, water, gas, sewer, electricity, and other utility rates and charges; charges imposed under any subdivision, planned unit development, or condominium declaration or restrictions; charges for any easement, license, or agreement maintained for the benefit of the Mortgaged Property, and all other taxes, charges, and assessments and any interest, costs, or penalties of any kind and nature that at any time before or after the execution of this Deed of Trust may be assessed, levied, or imposed on the Mortgaged Property or on its ownership, use, occupancy, or enjoyment. 2.11 Indebtedness. "Indebtedness" means the principal of, interest on, and all other amounts and payments due under or evidenced by the following: 2.11.1 The Note (including, without limitation, late payment and other charges payable under the Note); 2.11.2 This Deed of Trust and all other Loan Documents; 2.11.3 All funds later advanced by Lender to or for the benefit of Borrower under any provision of any of the Loan Documents; 2.11.4 Any future loans or amounts advanced by Lender to Borrower when evidenced by a written instrument or document that specifically recites that the Obligations Exhibit B-4 OAK #4823-1374-1407 v3 07024-0121 C 1186-005 -- 3411537.1 evidenced by such document are secured by the terms of this Deed of Trust, including, but not limited to, funds advanced to protect the security or priority of the Deed of Trust; and 2.11.5 Any amendment, modification, extension, rearrangement, restatement, renewal, substitution, or replacement of any of the foregoing. 2.12 Land. "Land" means the real estate or any interest in it described in Attachment A attached to this Deed of Trust and made a part of it, and all rights, titles, and interests appurtenant to it. 2.13 Leases. "Leases" means any and all leases, subleases, licenses, concessions, or other agreements (written or verbal, now or later in effect), that grant a possessory interest in and to, or the right to extract, mine, reside in, sell, or use the Land, and all other agreements, including, but not limited to, utility contracts, maintenance agreements, and service contracts that in any way relate to the use, occupancy, operation, maintenance, enjoyment, or ownership of the Land, except any and all leases, subleases, or other agreements under which Borrower is granted a possessory interest in the Land. 2.14 Lender. "Lender" means the named Lender in this Deed of Trust and the owner and holder (including a pledgee) of any Note, Indebtedness, or Obligations secured by this Deed of Trust, whether or not named as Lender in this Deed of Trust, and the heirs, legatees, devisees, administrators, executors, successors, and assigns of any such person. 2.15 Loan. "Loan" means a loan in the amount of Two Million Five Hundred Thousand Dollars ($2,500,000) from Lender to Borrower. 2.16 Loan Documents. "Loan Documents" means, collectively, this Deed of Trust, the Note, the Loan Agreement, and all other documents and instruments, executed and/or recorded or required to be executed by Borrower or any guarantor in connection with the Loan, and all renewals, modifications, or extensions thereof. 2.17 Mortgaged Property. "Mortgaged Property" means the Land, Fixtures, Personalty, Leases, and Rents, together with: 2.17.1 All right, title, and interest (including any claim or demand or demand in law or equity) that Borrower now has or may later acquire in or to such Mortgaged Property; all easements, rights, privileges, tenements, hereditaments, and appurtenances belonging or in any way appertaining to the Mortgaged Property; all of the estate, right, title, interest, claim, demand, reversion, or remainder of Borrower in or to the Mortgaged Property, either at law or in equity, in possession or expectancy, now or later acquired; all crops growing or to be grown on the Mortgaged Property; all development rights or credits and air rights; all water and water rights (whether or not appurtenant to the Mortgaged Property) and shares of stock pertaining to such water or water rights, ownership of which affects the Mortgaged Property; all minerals, oil, gas, and other hydrocarbon substances and rights thereto in, on, under, or upon the Mortgaged Property and all royalties and profits from any such rights or shares of stock; all right, title, and interest of Borrower in and to any streets, ways, alleys, strips, or gores of land adjoining the Land or any part Exhibit B-5 OAK #4823-1374-1407 v3 07024-0121 C1186-005 - 3411537.1 of it that Borrower now owns or at any time later acquires and all adjacent lands within enclosures or occupied by buildings partly situated on the Mortgaged Property; 2.17.2 All intangible Mortgaged Property and rights relating to the Mortgaged Property or its operation or used in connection with it, including, without limitation, permits, licenses, plans, specifications, construction contracts, subcontracts, bids, deposits for utility services, installations, refunds due Borrower, trade names, trademarks, and service marks; 2.17.3 All of the right, title, and interest of Borrower in and to the land lying in the bed of any street, road, highway, or avenue in front of or adjoining the Land; 2.17.4 Any and all awards previously made or later to be made by any Governmental Authority to the present and all subsequent owners of the Mortgaged Property that may be made with respect to the Mortgaged Property as a result of the exercise of the right of eminent domain, the alteration of the grade of any street, or any other injury to or decrease of value of the Mortgaged Property, which award or awards are assigned to Lender and Lender, at its option, is authorized, directed, and empowered to collect and receive the proceeds of any such award or awards from the authorities making them and to give proper receipts and acquittances for them, and to apply them as provided in Section 5 of this Deed of Trust; 2.17.5 All Leases of the Mortgaged Property or any part of it now or later entered into and all right, title, and interest of Borrower under such Leases, including cash or securities deposited by the tenants to secure performance of their obligations under such Leases (whether such cash or securities are to be held until the expiration of the terms of such Leases or applied to one or more of the installments of rent coming due immediately before the expiration of such terms), all rights to all insurance proceeds and unearned insurance premiums arising from or relating to the Mortgaged Property, all other rights and easements of Borrower now or later existing pertaining to the use and enjoyment of the Mortgaged Property, and all right, title, and interest of Borrower in and to all declarations of covenants, conditions, and restrictions as may affect or otherwise relate to the Mortgaged Property; 2.17.6 All deposits (including tenants' security deposits; provided, however, that if Lender acquires possession or control of tenants' security deposits Lender shall use the tenants' security deposits only for such purposes as Governmental Requirements permit), funds, accounts, contract rights, instruments, documents, general intangibles, and notes or chattel paper arising from or in connection with the Land or other Mortgaged Property; all permits, licenses, certificates, and other rights and privileges obtained in connection with the Land or other Mortgaged Property; all soils reports, engineering reports, land planning maps, drawings, construction contracts, notes, drafts, documents, engineering and architectural drawings, letters of credit, bonds, surety bonds, any other intangible rights relating to the Land, surveys, and other reports, exhibits, or plans used or to be used in connection with the construction, planning, operation, or maintenance of the Land and all amendments and modifications; all proceeds arising from or by virtue of the sale, lease, grant of option, or other disposition of all or any part of the Land, Fixtures, Personalty, or other Mortgaged Property (consent to same is not granted or implied); and all proceeds (including premium refunds) payable or to be payable under each insurance policy relating to the Land, Fixtures, Personalty, or other Mortgaged Property; Exhibit B-6 OAK #4823-1374-1407 v3 07024-0121 C1186-005 -- 3411537.1 2.17.7 All trade names, trademarks, symbols, service marks, and goodwill associated with the Mortgaged Property and any and all state and federal applications and registrations now or later used in connection with the use or operation of the Mortgaged Property; 2.17.8 All tax refunds, bills, notes, inventories, accounts and charges receivable, credits, claims, securities, and documents of all kinds, and all instruments, contract rights, general intangibles, bonds and deposits, and all proceeds and products of the Mortgaged Property; 2.17.9 All accounts, contract rights, chattel paper, documents, instruments, books, records, claims against third parties, money, securities, drafts, notes, proceeds, and other items relating to the Mortgaged Property; and 2.17.10 All proceeds of any of the foregoing. As used in this Deed of Trust, "Mortgaged Property" is expressly defined as meaning all or, when the context permits or requires, any portion of it and all or, when the context permits or requires, any interest in it. 2.18 Note. "Note" means the Promissory Note payable by Borrower to the order of Lender in the principal amount of Two Million Five Hundred Thousand Dollars ($2,500,000) evidencing the Loan, in such form as is acceptable to Lender, together with any and all rearrangements, extensions, renewals, substitutions, replacements, modifications, restatements, and amendments to the Note. 2.19 Obligation(s). "Obligations" means any and all of the covenants, warranties, representations, and other obligations (other than to repay the Indebtedness) made or undertaken by Borrower to Lender or Trustee as set forth in the Loan Documents and each obligation, covenant, and agreement of Borrower in the Loan Documents. 2.20 Permitted Encumbrances. "Permitted Encumbrances" means, at any particular time, (a) liens for taxes, assessments, or governmental charges not then due and payable or not then delinquent; (b) liens, easements, encumbrances, and restrictions on the Mortgaged Property that are allowed by Lender to appear in Schedule B, with Parts I and II of the CLTA or ALTA title policy to be issued to Lender following recordation of the Deed of Trust; and (c) liens in favor of, consented to in writing, or created by Lender or with its knowledge and consent. 2.21 Person. "Person" means natural persons, corporations, partnerships, unincorporated associations, joint ventures, and any other form of legal entity. 2.22 Personalty. "Personalty" means all of the right, title, and interest of Borrower in and to all tangible and intangible personal property, whether now owned or later acquired by Borrower, including, but not limited to, water rights (to the extent they may constitute personal property), all equipment, inventory, goods, consumer goods, accounts, chattel paper, instruments, money, general intangibles, letter -of -credit rights, deposit accounts, investment property, documents, minerals, crops, and timber (as those terms are defined in the California Uniform Commercial Code) and that are now or at any later time located on, attached to, installed, placed, used on, in connection with, or are required for such attachment, installation, placement, or use on Exhibit B-7 OAK #4823-1374-1407 v3 07024-0121 C1186-005 -- 3411537.1 the Land, Fixtures, or on other goods located on the Land, together with all additions, accessions, accessories, amendments, modifications to the Land, extensions, renewals, and enlargements and proceeds of the Land, substitutions for, and income and profits from, the Land. The Personalty includes, but is not limited to, all goods, machinery, tools, equipment (including fire sprinklers and alarm systems); building materials, air conditioning, heating, refrigerating, electronic monitoring, entertainment, recreational, maintenance, extermination of vermin or insects, dust removal, refuse and garbage equipment; vehicle maintenance and repair equipment; office furniture (including tables, chairs, planters, desks, sofas, shelves, lockers, and cabinets); safes, furnishings, appliances (including ice -making machines, refrigerators, fans, water heaters, and incinerators); rugs, carpets, other floor coverings, draperies, drapery rods and brackets, awnings, window shades, venetian blinds, curtains, other window coverings; lamps, chandeliers, other lighting fixtures; office maintenance and other supplies; loan commitments, financing arrangements, bonds, construction contracts, leases, tenants' security deposits, licenses, permits, sales contracts, option contracts, lease contracts, insurance policies, proceeds from policies, plans, specifications, surveys, books, records, funds, bank deposits; and all other intangible personal property. Personalty also includes any other portion or items that constitute personal property under the California Uniform Commercial Code. 2.23 Rents. "Rents" means all rents, issues, revenues, income, proceeds, royalties, profits, license fees, prepaid municipal and utility fees, bonds, and other benefits to which Borrower or the record title owner of the Land may now or later be entitled from or which are derived from the Land, including, without limitation, sale proceeds of the Land; any room or space sales or rentals from the Land; and other benefits paid or payable for using, leasing, licensing, possessing, operating from or in, residing in, selling, mining, extracting, or otherwise enjoying or using the Land. 3. Repair and Maintenance of Mortgaged Property. Borrower shall (a) keep the Mortgaged Property in good condition and repair; (b) not substantially alter, remove, or demolish the Mortgaged Property except for obsolete items or when incident to the replacement of Fixtures, equipment, machinery, or appliances with items of like kind; (c) restore and repair to the equivalent of its original condition all or any part of the Mortgaged Property that may be damaged or destroyed, including, but not limited to, damage from termites and dry rot, soil subsidence, and construction defects, whether or not insurance proceeds are available to cover any part of the cost of such restoration and repair, and regardless of whether Lender permits the use of any insurance proceeds to be used for restoration under Section 6 of this Deed of Trust; (d) subject to Borrower's right to contest, as provided herein, pay when due all claims for labor performed and materials furnished in connection with the Mortgaged Property and not permit any mechanics' or materialman's lien to arise against the Mortgaged Property or furnish a loss or liability bond against such mechanics' or materialman's lien claims; (e) comply with all laws affecting the Mortgaged Property or requiring that any alterations, repairs, replacements, or improvements be made on it; (f) not knowingly or intentionally commit or permit waste on or to the Mortgaged Property, or commit, suffer, or permit any act or violation of law to occur on it; (g) not abandon the Mortgaged Property; (h) if required by Lender, provide for management satisfactory to Lender under a management contract approved by Lender; (i) notify Lender in writing of any condition at or on the Mortgaged Property that may have a significant and measurable effect on its market value; (j) if the Mortgaged Property is rental property, generally operate and maintain it in such Exhibit B-8 OAK #4823-1374-1407 v3 07024-0121 C1186-005 -- 3411537.1 manner as to realize its maximum rental potential; and (k) do all other things that the character or use of the Mortgaged Property may reasonably render necessary to maintain it in the same condition (reasonable wear and tear expected) as existed at the date of this Deed of Trust. 4. Use of Mortgaged Property. Unless otherwise required by Governmental Requirements or unless Lender otherwise consents in writing, Borrower shall not allow changes in the use of the Mortgaged Property from that which is contemplated by Borrower and Lender at the time of execution of this Deed of Trust, as specified in the loan application and the Loan Documents. Borrower shall not initiate or acquiesce in a change in the zoning classification of the Mortgaged Property without Lender' s prior written consent. 5. Insurance. 5.1 Liability Insurance. Borrower shall procure and maintain at its sole cost and expense comprehensive general liability insurance or self-insurance covering Borrower, Trustee, and Lender against claims for bodily injury or death or for damage occurring in, on, about, or resulting from the Mortgaged 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 Two Million Dollars ($2,000,000) combined single limit, or such greater amount as Lender may require, which insurance or self-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 and the Loan Documents (but such coverage or its amount shall in no way limit such indemnification). 5.2 Form of Policies. All insurance or self-insurance required under this Section 5 shall be fully paid for and nonassessable. The policies shall contain such provisions, endorsements, and expiration dates as Lender 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 Lender shall approve in Lender's sole and absolute discretion. Unless otherwise expressly approved in writing by Lender, each insurer shall have a Best Rating of Class A, Category VII, 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 thirty (30) days prior written notice to Lender; (c) with the exception of the comprehensive general liability policy, contain a mortgagee's endorsement (438 BFU Endorsement or equivalent), and name Lender as an additional insured; and (d) include such deductibles as Lender may approve. If a policy required under this Section 5 contains a co- insurance or overage clause, the policy shall include a stipulated value or agreed amount endorsement acceptable to Lender. 5.3 Duplicate Originals or Certificates. Duplicate original policies evidencing the insurance required under this Section 5 and any additional insurance that may be purchased on the Mortgaged Property by or on behalf of Borrower shall be deposited with and held by Lender and, in addition, Borrower shall deliver to Lender (a) receipts evidencing payment of all premiums on the policies and (b) duplicate original renewal policies or a binder with evidence satisfactory to Lender of payment of all premiums at least thirty (30) days before the policy expires. In lieu of the duplicate original policies to be delivered to Lender under this Section 5.3 Borrower may deliver an underlier of any blanket policy, and Borrower may also deliver original certificates from Exhibit B-9 OAK #4823-1374-1407 v3 07024-0121 C1186-005 -- 3411537.1 the issuing insurance company, evidencing that such policies are in full force and effect and containing information that, in Lender's reasonable judgment, is sufficient to allow Lender to ascertain whether such policies comply with the requirements of this Section 5. 5.4 Increased Coverage. If Lender reasonably determines that the limits of any insurance carried by Borrower are inadequate, Borrower shall, within ten (10) days after written notice from Lender, procure such additional coverage as Lender may require in Lender's reasonable discretion. 5.5 Transfer of Title. In the event of foreclosure of this Deed of Trust or other transfer of title or assignment of the Mortgaged Property in extinguishment in lieu of foreclosure, in whole or in part, of the Obligations and the Indebtedness, all right, title, and interest of Borrower in and to all insurance policies required under this Section 5 and all proceeds payable under, and unearned premiums on, such policies shall immediately vest in the purchaser or other transferee of the Mortgaged Property. 5.6 Approval Not Warranty. No approval by Lender of any insurer may be construed to be a representation, certification, or warranty of its solvency and no approval by Lender as to the amount, type, or form of any insurance may be construed to be a representation, certification, or warranty of its sufficiency. 5.7 Lender's Right to Obtain. Borrower shall deliver to Lender original policies or certificates evidencing such insurance at least thirty (30) days before the existing policies expire. If any such policy is not so delivered to Lender or if any such policy is canceled, whether or not Lender has the policy in its possession, and no reinstatement or replacement policy is received before termination of insurance, Lender, without notice to or demand on Borrower, may (but is not obligated to) obtain such insurance insuring only Lender with such company as Lender 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 Borrower or, at Lender's option, may be added to the Indebtedness. Borrower acknowledges that, if Lender obtains insurance, it is for the sole benefit of Lender, and Borrower shall not rely on any insurance obtained by Lender to protect Borrower in any way. 6. Condemnation Proceeds. 6.1 Assignment to Lender. The proceeds of any award or claim for damages, direct or consequential, in connection with any condemnation or other taking of or damage or injury to the Mortgaged Property, or any part of it, or for conveyance in lieu of condemnation, are assigned to and shall be paid to Lender, who shall hold them in a non-interest-bearing general account, regardless of whether Lender's security is impaired. All causes of action, whether accrued before or after the date of this Deed of Trust, of all types for damages or injury to the Mortgaged Property or any part of it, or in connection with any transaction financed by funds lent to Borrower by Lender and secured by this Deed of Trust, or in connection with or affecting the Mortgaged Property or any part of it, including, without limitation, causes of action arising in tort or contract or in equity, are assigned to Lender as additional security, and the proceeds shall be paid to Lender. Lender, at its option, may appear in and prosecute in its own name any action or proceeding to enforce any such cause of action and may make any compromise or settlement of such action. Exhibit B-10 OAK #4823-1374-1407 v3 07024-0121 CI 186-005 -- 3411537.1 Borrower shall notify Lender in writing immediately on obtaining knowledge of any casualty damage to the Mortgaged Property or damage in any other manner in excess of Fifty Thousand Dollars ($50,000) or knowledge of the institution of any proceeding relating to condemnation or other taking of or damage or injury to all or any portion of the Mortgaged Property. Lender, in its sole and absolute discretion, may participate in any such proceedings and may join Borrower in adjusting any loss covered by insurance. Borrower covenants and agrees with Lender, at Lender's request, to make, execute, and deliver, at Borrower's expense, any and all assignments and other instruments sufficient for the purpose of assigning the aforesaid award or awards, causes of action, or claims of damages or proceeds to Lender free, clear, and discharged of any and all encumbrances of any kind or nature. 6.2 Total Condemnation Payments. All compensation, awards, proceeds, damages, claims, insurance recoveries, rights of action, and payments that Borrower may receive or to which Borrower may become entitled with respect to the Mortgaged Property in the event of a total condemnation or other total taking of the Mortgaged Property shall be paid over to Lender and shall be applied first to reimbursement of all Lender's costs and expenses in connection with their recovery, and shall then be applied to the payment of any Indebtedness secured by this Deed of Trust in such order as Lender may determine, until the Indebtedness secured by this Deed of Trust has been paid and satisfied in full. Any surplus remaining after payment and satisfaction of the Indebtedness secured by this Deed of Trust shall be paid to Borrower as its interest may then appear. 6.3 Partial Condemnation Payments. All compensation, awards, proceeds, damages, claims, insurance recoveries, rights of action, and payments that Borrower may receive or to which Borrower may become entitled with respect to the Mortgaged Property in the event of a partial condemnation or other partial taking of the Mortgaged Property, unless Borrower and Lender otherwise agree in writing, shall be divided into two portions, one equal to the principal balance of the Note at the time of receipt of such funds and the other equal to the amount by which such funds exceed the principal balance of the Note at the time of receipt of such funds. The first such portion shall be applied to the sums secured by this Deed of Trust, whether or not then due, including but not limited to principal, accrued interest, and advances, and in such order or combination as Lender may determine, with the balance of the funds paid to Borrower. 6.4 No Cure of Waiver of Default. Any application of such amounts or any portion of it to any Indebtedness secured by this Deed of Trust shall not be construed to cure or waive any default or notice of default under this Deed of Trust or invalidate any act done under any such default or notice. 7. Taxes and Other Sums Due. Borrower shall promptly pay, satisfy, and discharge: (a) all Impositions affecting the Mortgaged Property before they become delinquent; (b) such other amounts, chargeable against Borrower or the Mortgaged Property, as Lender reasonably deems necessary to protect and preserve the Mortgaged Property, this Deed of Trust, or Lender's security for the performance of the Obligations; (c) all encumbrances, charges, and liens on the Mortgaged Property, with interest, which in Lender's judgment are, or appear to be, prior or superior to the lien of this Deed of Trust or all costs necessary to obtain protection against such lien or charge by Exhibit B-11 OAK #4823-1374-1407 v3 07024-0121 C 1186-005 -- 3411537.1 title insurance endorsement or surety company bond; (d) such other charges as Lender deems reasonable for services rendered by Lender at Borrower's request; and (e) all costs, fees, and expenses reasonably incurred by Lender in connection with this Deed of Trust, whether or not specified in this Deed of Trust; provided, however that in all events, Borrower may contest any such amounts if Borrower provides Lender with security satisfactory to Lender, to be held by Lender until such dispute is settled and Borrower settles such dispute prior to any exercise of remedies against the Mortgaged Property. On Lender's request, Borrower shall promptly furnish Lender with all notices of sums due for any amounts specified in the preceding clauses (a) through (e), and, on payment, with written evidence of such payment. If Borrower fails to promptly make any payment required under this Section 7 Lender may (but is not obligated to) make such payment. Borrower shall notify Lender immediately on receipt by Borrower of notice of any increase in the assessed value of the Mortgaged Property and agrees that Lender, in Borrower's name, may (but is not obligated to) contest by appropriate proceedings such increase in assessment. 8. Leases of Mortgaged Property by Borrower. All Leases of the Mortgaged Property are subject to Lender's prior review and approval and must be acceptable to Lender in form and content. Each Lease must specifically provide, inter alia, that (a) it is subordinate to the lien of this Deed of Trust; (b) the tenant attorns to Lender (and Borrower consents to any such attornment), such attornment to be effective on Lender's acquisition of title to the Mortgaged Property; (c) the tenant agrees to execute such further evidence of attornment as Lender may from time to time request; and (d) Lender, at Lender's option, except as otherwise provided in any non -disturbance and attornment agreements with tenants, may accept or reject such attornment. If Borrower learns that any tenant proposes to do, or is doing, any act that may give rise to any right of setoff against rent, Borrower shall immediately (i) take measures reasonably calculated to prevent the accrual of any such right of setoff; (ii) notify Lender of all measures so taken and of the amount of any setoff claimed by any such tenant; and (iii) within ten (10) days after the accrual of any right of setoff against rent, reimburse any tenant who has acquired such right, in full, or take other measures that will effectively discharge such setoff and ensure that rents subsequently due shall continue to be payable without claim of setoff or deduction. At Lender's request following the occurrence of an Event of Default which continues beyond all applicable cure, grace and notice periods, Borrower shall assign to Lender, by written instrument satisfactory to Lender, all Leases of the Mortgaged Property, and all security deposits made by tenants in connection with such Leases. On assignment to Lender of any such Lease, Lender shall succeed to all rights and powers of Borrower with respect to such Lease, and Lender, in Lender's sole and absolute discretion, shall have the right to modify, extend, or terminate such Lease and to execute other further leases with respect to the Mortgaged Property that is the subject of such assigned Lease. 9. Right to Collect and Receive Rents. Despite any other provision of this Deed of Trust, Lender grants permission to Borrower to collect and retain the Rents of the Mortgaged Property as they become due and payable; however, such permission to Borrower shall be automatically revoked following the occurrence of an Event of Default which continues beyond all applicable cure, grace and notice periods, and Lender shall have the rights set forth in California Civil Code §2938 regardless of whether declaration of default has been delivered to Trustee as provided in Exhibit B-12 OAK #4823-1374-1407 v3 07024-0121 C1186-005 -- 3411537.1 Section 22 of this Deed of Trust, and without regard to the adequacy of the security for the Indebtedness secured by this Deed of Trust. Failure of or discontinuance by Lender at any time, or from time to time, to collect any such Rents shall not in any manner affect the subsequent enforcement by Lender at any time, or from time to time, of the right, power, and authority to collect these Rents. The receipt and application by Lender of all such Rents under this Deed of Trust, after execution and delivery of declaration of an Event of Default and demand for sale as provided in this Deed of Trust or during the pendency of trustee's sale proceedings under this Deed of Trust, shall neither cure such breach or default nor affect such sale proceedings, or any sale made under them, but such Rents, less all costs of operation, maintenance, collection, and Attorneys' Fees, when received by Lender, may be applied in reduction of the entire Indebtedness from time to time secured by this Deed of Trust, in such order as Lender may decide. Nothing in this Deed of Trust, nor the exercise of Lender's right to collect, nor an assumption by Lender of any tenancy, lease, or option, nor an assumption of liability under, nor a subordination of the lien or charge of this Deed of Trust to, any such tenancy, lease, or option, shall be, or be construed to be, an affirmation by Lender of any tenancy, lease, or option. If the Rents of the Mortgaged Property are not sufficient to meet the costs, if any, of taking control of and managing the Mortgaged Property and collecting the Rents, any funds expended by Lender for such purposes shall become Indebtedness of Borrower to Lender secured by this Deed of Trust. Unless Lender and Borrower agree in writing to other terms of payment, such amounts shall be payable on notice from Lender to Borrower requesting such payment and shall bear interest from the date of disbursement at the rate stated in the Note unless payment of interest at such rate would be contrary to Governmental Requirements, in which event the amounts shall bear interest at the highest rate that may be collected from Borrower under Governmental Requirements. Borrower expressly understands and agrees that Lender will have no liability to Borrower or any other person for Lender's failure or inability to collect Rents from the Mortgaged Property or for failing to collect such Rents in an amount that is equal to the fair market rental value of the Mortgaged Property. Borrower understands and agrees that neither the assignment of Rents to Lender nor the exercise by Lender of any of its rights or remedies under this Deed of Trust shall be deemed to make Lender a "mortgagee -in -possession" or otherwise responsible or liable in any manner with respect to the Mortgaged Property or the use, occupancy, enjoyment, or operation of all or any portion of it, unless and until Lender, in person or by agent, assumes actual possession of it. Nor shall appointment of a receiver for the Mortgaged Property by any court at the request of Lender or by agreement with Borrower, or the entering into possession of the Mortgaged Property or any part of it by such receiver be deemed to make Lender a mortgagee -in -possession or otherwise responsible or liable in any manner with respect to the Mortgaged Property or the use, occupancy, enjoyment, or operation of all or any portion of it. During an Event of Default, any and all Rents collected or received by Borrower shall be accepted and held for Lender in trust and shall not be commingled with Borrower's funds and property, but shall be promptly paid over to Lender. 10. Funds for Taxes and Insurance. If an Event of Default has occurred, then Lender may at any subsequent time, at its option to be exercised on thirty (30) days written notice to Borrower, require Borrower to deposit with Lender or its designee, at the time of each payment of an Exhibit B-13 OAK #4823-1374-1407 v3 07024-0121 C1186-005 -- 3411537.1 installment of interest or principal under the Note, an additional amount equal to one -twelfth (1/12) of the amount sufficient to discharge the obligations of Borrower under Sections 5 and 7 of this Deed of Trust as they become due. The calculation of the amount payable and of the fractional part of it to be deposited with Lender shall be made by Lender in its sole and absolute discretion. These amounts shall be held by Lender or its designee not in trust and not as agent of Borrower and shall not bear interest, and shall be applied to the payment of any of the Obligations under the Loan Documents in such order or priority as Lender shall determine. If at any time within thirty (30) days before the due date of these obligations the amounts then on deposit shall be insufficient to pay the obligations under Sections 5 and 7 in full, Borrower shall deposit the amount of the deficiency with Lender within ten (10) days after Lender's demand. If the amounts deposited are in excess of the actual obligations for which they were deposited, Lender may refund any such excess, or, at its option, may hold the excess in a reserve account, not in trust and not bearing interest, and reduce proportionately the required monthly deposits for the ensuing year. Nothing in this Section 10 shall be deemed to affect any right or remedy of Lender under any other provision of this Deed of Trust or under any statute or rule of law to pay any such amount and to add the amount so paid to the Indebtedness secured by this Deed of Trust. Lender shall have no obligation to pay insurance premiums or taxes except to the extent the fund established under this Section 10 is sufficient to pay such premiums or taxes, to obtain insurance, or to notify Borrower of any matters relative to the insurance or taxes for which the fund is established under this Section 10. Lender or its designee shall hold all amounts so deposited as additional security for the sums secured by this Deed of Trust. Lender may, in its sole and absolute discretion and without regard to the adequacy of its security under this Deed of Trust, apply such amounts or any portion of it to any Indebtedness secured by this Deed of Trust, and such application shall not be construed to cure or waive any default or notice of default under this Deed of Trust. If Lender requires deposits to be made under this Section 10, Borrower shall deliver to Lender all tax bills, bond and assessment statements, statements for insurance premiums, and statements for any other obligations referred to above as soon as Borrower receives such documents. If Lender sells or assigns this Deed of Trust, Lender shall have the right to transfer all amounts deposited under this Section 10 to the purchaser or assignee. After such a transfer, Lender shall be relieved and have no further liability under this Deed of Trust for the application of such deposits, and Borrower shall look solely to such purchaser or assignee for such application and for all responsibility relating to such deposits. 11. Assignment of Causes of Action, Awards, and Damages. All causes of action, and all sums due or payable to Borrower for injury or damage to the Mortgaged Property, or as damages incurred in connection with the transactions in which the Loan secured by this Deed of Trust was made, including, without limitation, causes of action and damages for breach of contract, fraud, concealment, construction defects, or other torts, or compensation for any conveyance in lieu of condemnation, are assigned to Lender, and all proceeds from such causes of action and all such sums shall be paid to Lender for credit against the Indebtedness secured by this Deed of Trust. Borrower shall notify Lender immediately on receipt by Borrower of notice that any such sums have become due or payable and, immediately on receipt of any such sums, shall promptly remit such sums to Lender. Exhibit B-14 OAK #4823-1374-1407 v3 07024-0121 C1186-005 - 3411537.1 After deducting all expenses, including Attorneys' Fees, incurred by Lender in recovering or collecting any sums under this Section 11, Lender may apply or release the balance of any funds received by it under this Section 11, or any part of such balance, as it elects. Lender, at its option, may appear in and prosecute in its own name any action or proceeding to enforce any cause of action assigned to it under this Section 11 and may make any compromise or settlement in such action whatsoever. Borrower covenants that it shall execute and deliver to Lender such further assignments of any such compensation awards, damages, or causes of action as Lender may request from time to time. If Lender fails or does not elect to prosecute any such action or proceeding and Borrower elects to do so, Borrower may conduct the action or proceeding at its own expense and risk. 12. Defense of Deed of Trust; Litigation. Borrower shall give Lender immediate written notice of any action or proceeding (including, without limitation, any judicial, whether civil, criminal, or probate, or nonjudicial proceeding to foreclose the lien of a junior or senior mortgage or deed of trust) affecting or purporting to affect the Mortgaged Property, this Deed of Trust, Lender's security for the performance of the Obligations and payment of the Indebtedness, or the rights or powers of Lender or Trustee under the Loan Documents and in excess of Five Thousand Dollars ($5,000). Despite any other provision of this Deed of Trust, Borrower agrees that Lender or Trustee may (but is not obligated to) commence, appear in, prosecute, defend, compromise, and settle, in Lender's or Borrower's name, and as attorney-in-fact for Borrower, and incur necessary costs and expenses, including Attorneys' Fees in so doing, any action or proceeding, whether a civil, criminal, or probate judicial matter, nonjudicial proceeding, arbitration, or other alternative dispute resolution procedure, reasonably necessary to preserve or protect, or affecting or purporting to affect, the Mortgaged Property, this Deed of Trust, Lender's security for performance of the Obligations and payment of the Indebtedness, or the rights or powers of Lender or Trustee under the Loan Documents, and that if neither Lender nor Trustee elects to do so, Borrower shall commence, appear in, prosecute, and defend any such action or proceeding. Borrower shall pay all costs and expenses of Lender and Trustee, including costs of evidence of title and Attorneys' Fees, in any such action or proceeding in which Lender or Trustee may appear or for which legal counsel is sought, whether by virtue of being made a party defendant or otherwise, and whether or not the interest of Lender or Trustee in the Mortgaged Property is directly questioned in such action or proceeding, including, without limitation, any action for the condemnation or partition of all or any portion of the Mortgaged Property and any action brought by Lender to foreclose this Deed of Trust or to enforce any of its terms or provisions. 13. Borrower's Failure to Comply With Deed of Trust. If Borrower fails to make any payment or do any act required by this Deed of Trust, or if there is any action or proceeding (including, without limitation, any judicial or nonjudicial proceeding to foreclose the lien of a junior or senior mortgage or deed of trust) affecting or purporting to affect the Mortgaged Property, this Deed of Trust, Lender's security for the performance of the Obligations and payment of the Indebtedness, or the rights or powers of Lender or Trustee under the Note or this Deed of Trust, Lender or Trustee may (but is not obligated to) (a) make any such payment or do any such act in such manner and to such extent as either deems necessary to preserve or protect the Mortgaged Property, this Deed of Trust, or Lender's security for the performance of Borrower's Obligations and payment of the Indebtedness, or the rights or powers of Lender or Trustee under the Loan Documents, Lender and Trustee being authorized to enter on the Mortgaged Property for any such purpose; and (b) in Exhibit B-15 OAK #4823-1374-1407 v3 07024-0121 C1186-005 -- 3411537.1 exercising any such power, pay necessary expenses, retain attorneys, and pay Attorneys' Fees incurred in connection with such action, without notice to or demand on Borrower and without releasing Borrower from any Obligations or Indebtedness. 14. Sums Advanced to Bear Interest and to Be Secured by Deed of Trust. At Lender's request, Borrower shall immediately pay any sums advanced or paid by Lender or Trustee under any provision of this Deed of Trust or the other Loan Documents. Until so repaid, all such sums and all other sums payable to Lender or Trustee shall be added to, and become a part of, the Indebtedness secured by this Deed of Trust and bear interest from the date of advancement or payment by Lender or Trustee at the same rate as provided in the Note, unless payment of interest at such rate would be contrary to Governmental Requirements. All sums advanced by Lender under this Deed of Trust or the other Loan Documents, whether or not required to be advanced by Lender under the terms of this Deed of Trust or the other Loan Documents, shall conclusively be deemed to be mandatory advances required to preserve and protect this Deed of Trust and Lender's security for the performance of the Obligations and payment of the Indebtedness, and shall be secured by this Deed of Trust to the same extent and with the same priority as the principal and interest payable under the Note. 15. Inspection of Mortgaged Property. In addition to any rights Lender may have under California Civil Code §2929.5, Lender may make, or authorize other persons, including, but not limited to, appraisers and prospective purchasers at any foreclosure sale commenced by Lender, to enter on or inspect the Mortgaged Property at reasonable times and for reasonable durations. Borrower shall permit all such entries and inspections to be made as long as Lender has given Borrower written notice of such inspection at least twenty-four (24) hours before the entry and inspection. 16. Financial Statements; Estoppel Certificates. 16.1 Recordkeeping. Borrower shall keep adequate records and books of account in accordance with generally accepted accounting principles and practices or such other accounting method acceptable to Lender in its reasonable discretion and shall permit Lender, by its agents, accountants, and attorneys, to examine Borrower's records and books of account and to discuss the affairs, finances, and accounts of Borrower with the officers of Borrower, at such reasonable times as Lender may request. Borrower shall allow Lender, its representatives and agents, on notice, at any time during normal business hours, access to such books and records regarding acquisition, construction, and development of the Mortgaged Property, including any supporting or related vouchers or papers, shall allow Lender to make extracts or copies of any such papers, and shall furnish to Lender and its agents convenient facilities for the audit of any such statements, books, and records. 16.2 Estoppel Certificates. Within ten (10) days after Lender's request for such information, Borrower shall execute and deliver to Lender, and to any third party designated by Lender, in recordable form, a certificate of the principal financial or accounting officer of Borrower reciting that the Loan Documents are unmodified and in full force and effect, or that the Loan Documents are in full force and effect as modified and specifying all modifications asserted by Borrower. Such certificate shall also recite the amount of the Indebtedness and cover other matters with respect to the Indebtedness or Obligations as Lender may reasonably require, the date(s) Exhibit B-16 C1186-005 -- 3411537.1 OAK #4823-1374-1407 v3 07024-0121 through which payments due on the Indebtedness have been paid and the amount(s) of any payments previously made on the Indebtedness. The certificate shall include a detailed statement of any right of setoff, counterclaim, or other defense that Borrower contends exists against the Indebtedness or the Obligations; a statement that such person knows of no Event of Default or prospective Event of Default that has occurred and is continuing, or, if any Event of Default or prospective Event of Default has occurred and is continuing, a statement specifying the nature and period of its existence and what action Borrower has taken or proposes to take with respect to such matter; and, except as otherwise specified, a statement that Borrower has fulfilled all Obligations that are required to be fulfilled on or before the date of such certificate. 16.3 Failure to Deliver Estoppel Certificate. If Borrower fails to execute and deliver the certificate required by Section 16.2 within such ten (10) day period, (a) the Loan Documents shall, as to Borrower, conclusively be deemed to be either in full force and effect, without modification, or in full force and effect, modified in the manner and to the extent specified by Lender, whichever Lender reasonably and in good faith may represent; (b) the Indebtedness shall, as to Borrower, conclusively be deemed to be in the amount specified by Lender and no setoffs, counterclaims, or other defenses exist against the Indebtedness; and (c) Borrower shall conclusively be deemed to have irrevocably constituted and appointed Lender as Borrower's special attorney-in-fact to execute and deliver such certificate to any third party. 16.4 Reliance on Estoppel Certificate. Borrower and Lender expressly agree that any certificate executed and delivered by Borrower, or any representation in lieu of a certificate made by Lender under Section 16.2, may be relied on by any prospective purchaser or any prospective assignee of any interest of Lender in the Note and other Indebtedness secured by this Deed of Trust or in the Mortgaged Property, and by any other person, without independent investigation or examination, to verify the accuracy, reasonableness, or good faith of the recitals in the certificate or representation. 16.5 No Waiver of Default or Rights. Lender's exercise of any right or remedy provided under this Deed of Trust shall not constitute a waiver of, or operate to cure, any default by Borrower under this Deed of Trust, or preclude any other right or remedy that is otherwise available to Lender under this Deed of Trust or Governmental Requirements. 17. Uniform Commercial Code Security Agreement. This Deed of Trust is intended to be and shall constitute a security agreement under the California Uniform Commercial Code for any of the Personalty specified as part of the Mortgaged Property that, under Governmental Requirements, may be subject to a security interest under the California Uniform Commercial Code, and Borrower grants to Lender a security interest in those items. Borrower authorizes Lender to file financing statements in all states, counties, and other jurisdictions as Lender may elect, without Borrower's signature if permitted by law. Borrower agrees that Lender may file this Deed of Trust, or a copy of it, in the real estate records or other appropriate index or in the Office of the Secretary of State of the State of California and such other states as the Lender may elect, as a financing statement for any of the items specified above as part of the Mortgaged Property. Any reproduction of this Deed of Trust or executed duplicate original of this Deed of Trust, or a copy certified by a County Recorder in the State of California, or of any other security agreement or financing statement, shall be sufficient as a financing statement. In addition, Borrower agrees to execute and deliver to Lender, at Lender's request, any UCC financing statements, as well as Exhibit B-17 OAK #4823-1374-1407 v3 07024-0121 C1186-005 -- 3411537.1 any extensions, renewals, and amendments, and copies of this Deed of Trust in such form as Lender may require to perfect a security interest with respect to the Personalty. Borrower shall pay all costs of filing such financing statements and any extensions, renewals, amendments, and releases of such statements, and shall pay all reasonable costs and expenses of any record searches for financing statements that Lender may reasonably require. Without the prior written consent of Lender, Borrower shall not create or suffer to be created any other security interest in the items, including any replacements and additions. On any Event of Default which continues beyond all applicable grace, notice and cure periods, Lender shall have the remedies of a secured party under the California Uniform Commercial Code and, at Lender's option, may also invoke the remedies in Section 21 of this Deed of Trust as to such items. In exercising any of these remedies, Lender may proceed against the items of Mortgaged Property and any items of Personalty separately or together and in any order whatsoever, without in any way affecting the availability of Lender's remedies under the California Uniform Commercial Code or of the remedies in Section 21 of this Deed of Trust. 18. Fixture Filing. This Deed of Trust constitutes a financing statement filed as a fixture filing under California Commercial Code § 9502(c), as amended or recodified from time to time, covering any portion of the Mortgaged Property that now is or later may become a fixture attached to the Mortgaged Property or to any Improvement. 19. Waiver of Statute of Limitations. Borrower waives the right to assert any statute of limitations as a defense to the Loan Documents and the Obligations secured by this Deed of Trust, to the fullest extent permitted by Governmental Requirements. 20. Events of Default. The term "Event of Default" as used in this Deed of Trust means the occurrence or happening, at any time and from time to time, of any one or more of the following: 20.1 Payment of Indebtedness. Borrower fails to pay any installment of interest and/or principal under the Note or any other Indebtedness when due and such failure continues for more than five (5) days after City notifies Borrower in writing, whether on maturity, the date stipulated in any Loan Document, by acceleration, or otherwise. 20.2 Performance of Obligations. The failure, refusal, or neglect to perform and discharge fully and timely any of the Obligations as and when required, and the continuance of such failure for thirty (30) days after Lender gives written notice of such failure to Borrower, provided, however, that if the cure of any such failure cannot reasonably be made within thirty (30) days and Borrower promptly and diligently commences to cure such failure within thirty (30) days, then the period to cure shall be deemed extended for up to an additional sixty (60) days after Lender's default notice as long as Borrower diligently and continuously proceeds to cure such failure to Lender's satisfaction. 20.3 Judgment. If any final judgment, order, or decree is rendered against Borrower in such amount as to materially adversely affect Borrower's ability to satisfy the Obligations and is not paid or executed on, or is not stayed by perfection of an appeal or other appropriate action, such as being bonded, or is not otherwise satisfied or disposed of to Lender's satisfaction within sixty (60) days after entry of the judgment, order, or decree. Exhibit B-18 OAK #4823-1374-1407 v3 07024-0121 C1186 -005--3411537.I 20.4 Foreclosure of Other Liens. If the holder of any lien or security interest on the Mortgaged Property (without implying Lender's consent to the existence, placing, creating, or permitting of any lien or security interest) institutes foreclosure or other proceedings to enforce its remedies thereunder and any such proceedings are not stayed or discharged within sixty (60) days after institution of such foreclosure proceedings. 20.5 Sale, Lease, Encumbrance, or Other Transfer. Except as permitted herein, any sale, lease, exchange, assignment, conveyance, encumbrance (other than a Permitted Encumbrance), transfer of possession, or other disposition of all or any portion of the Land or any of Borrower's interest in the Land without Lender's prior written consent, or, except as provided herein, any sale, lease, exchange, assignment, conveyance, encumbrance (other than a Permitted Encumbrance), or other disposition of any portion of the Personalty, without Lender's prior written consent. 20.6 Title and Lien Priority. If Borrower's title to any or all of the Mortgaged Property or the status of this Deed of Trust as a first and prior lien and security interest on the Mortgaged Property is endangered in any manner, and Borrower fails to cure the same on Lender's demand; provided, however, that Borrower shall not be in default under this Section 20 if Borrower is diligently pursuing a contest or cure of such title or lien issue and Borrower has posted adequate security to protect Lender's rights, interest, and priority under this Deed of Trust, as determined by Lender. 20.7 Other Defaults. The occurrence of an Event of Default or any default, as defined or described in the other Loan Documents, or the occurrence of a default on any Indebtedness or Obligations, beyond all applicable cure periods. 20.8 Levy on Assets. A levy on any of the assets of Borrower, and such levy is not stayed or abated within sixty (60) days after such levy. 20.9 Breach of Representations. The breach of any representation or warranty in this Deed of Trust when made. 20.10 Default Under Other Deeds of Trust, Security Instruments, or Liens. The failure to pay on a timely basis, or the occurrence of any other default under any note, deed of trust, contract of sale, lien, charge, encumbrance, or security interest encumbering or affecting the Mortgaged Property, which default gives rise to rights and remedies on behalf of such other party thereto. 20.11 Borrower's Right to Cure. If for more than thirty (30) days after receipt of notice from Lender, Borrower remains in default under any term, covenant, or condition of this Deed of Trust, the Note or any of the other Loan Documents other than as specified in this Section 20; provided, however, that if the cure of any such default cannot reasonably be made within thirty (30) days and Borrower promptly and diligently commences to cure such default within thirty (30) days, then the period to cure shall be deemed extended for up to an additional sixty (60) days after Lender's default notice as long as Borrower diligently and continuously proceeds to cure such default to Lender's satisfaction. 21. Acceleration on Transfer or Encumbrance. Exhibit B-19 OAK #4823-1374-1407 v3 07024-0121 C1186-005 -- 3411537.1 21.1 Acceleration on Transfer or Encumbrance of Mortgaged Property. Except as provided in Section 29 or otherwise as provided herein, if Borrower sells, contracts to sell, gives an option to purchase, conveys, leases with an option to purchase, encumbers, or alienates the Mortgaged Property, or any interest in it, or suffers its title to, or any interest in, the Mortgaged Property to be divested, whether voluntarily or involuntarily; or if Borrower changes or permits to be changed the character or use of the Mortgaged Property, or drills or extracts or enters into any lease for the drilling or extracting of oil, gas, or other hydrocarbon substances or any mineral of any kind or character on the Mortgaged Property; or if title to such Mortgaged Property becomes subject to any lien or charge, voluntary or involuntary, contractual or statutory, without Lender's prior written consent, which consent shall not be unreasonably withheld, delayed or conditioned, then Lender, at Lender's option, may, without prior notice, declare all sums secured by this Deed of Trust, regardless of their stated due date(s), immediately due and payable and may exercise all rights and remedies in this Deed of Trust, including those set forth in Section 22. 21.2 Replacement Personalty. Despite the provisions of Section 21.1, Borrower may from time to time replace Personalty constituting a part of the Mortgaged Property, as long as (a) the replacements for such Personalty are of equivalent value and quality or such Personalty is obsolete; (b) Borrower has good and clear title to such replacement Personalty free and clear of any and all liens, encumbrances, security interests, ownership interests, claims of title (contingent or otherwise), or charges of any kind, or the rights of any conditional sellers, vendors, or any other third parties in or to such replacement Personalty have been expressly subordinated to the lien of the Deed of Trust in a manner satisfactory to Lender and at no cost to Lender; and (c) at Lender's option, Borrower provides at no cost to Lender satisfactory evidence that the Deed of Trust constitutes a valid and subsisting lien on and security interest in such replacement Personalty of the same priority as this Deed of Trust has on the Mortgaged Property and is not subject to being subordinated or its priority affected under any Governmental Requirements, including §9334 of the California Commercial Code. 22. Acceleration and Sale on Default. If an Event of Default occurs, Lender, at its option, in addition to other remedies provided at law, may declare all sums secured by this Deed of Trust immediately due and payable by delivering to Trustee a written affidavit or declaration of default and demand for sale, executed by Lender and reciting facts demonstrating such default by Borrower, together with a written notice of default and election to sell the Mortgaged Property. Lender shall also deposit with Trustee the Note, this Deed of Trust, and documents evidencing any additional advances or expenditures secured by this Deed of Trust. On receipt by Trustee of such affidavit or declaration of default and such notice of default and election to sell, Trustee shall accept such election to sell as true and conclusive of all facts and statements in such affidavit or declaration of default and shall cause such notice of default and election to sell to be recorded as required by Governmental Requirements. On the expiration of such period as may then be required by Governmental Requirements following recordation of such notice of default, and after notice of sale has been given in the manner and for the period required by Governmental Requirements, Trustee, without demand on Borrower, shall sell the Mortgaged Property at the time and place fixed in such notice of sale, either in whole or in separate parcels, and in such order as Trustee may determine or Lender may direct (Borrower waives any right it may have under Governmental Requirements to direct the order of sale), at public auction to the highest bidder for cash in lawful money of the United States, payable at the time of sale; provided, however, that Lender may offset Exhibit B-20 OAK #4823-1374-1407 v3 07024-0121 C1186-005 -- 3411537.1 its bid at such sale to the extent of the full amount owed to Lender under the Loan Documents, including, without limitation, Trustee's fees, expenses of sale, and costs, expenses, and Attorneys' Fees incurred by or on behalf of Lender in connection with collecting, litigating, or otherwise enforcing any right under the Loan Documents. Trustee may postpone the sale of all or any portion of the Mortgaged Property by public announcement made at the initial time and place of sale, and from time to time later by public announcement made at the time and place of sale fixed by the preceding postponement. Trustee shall deliver to the purchaser at such public auction its deed conveying the Mortgaged Property sold, but without any covenant or warranty, express or implied. The recital in such deed of any matter of fact concerning notices shall be conclusive proof of its truthfulness. Any person, including Borrower, Trustee, or Lender, may purchase at such sale. The proceeds or avails of any sale made under or by virtue of this Deed of Trust, together with any other sums secured by this Deed of Trust, which then may be held by the Trustee or Lender or any other person, shall be applied as follows: FIRST: To the payment of the costs and expenses of such sale, including Trustee's fees, costs of title evidence, Attorneys' Fees, and reasonable compensation to Lender and its agents and consultants, and of any judicial proceedings in which the same costs and expenses of sale may be made, and of all expenses, liabilities, and advances made or incurred by the Trustee or Lender under this Deed of Trust, together with interest at the rate set forth in the Note on all advances made by the Trustee or Lender and all taxes or assessments, except any taxes, assessments, or other charges subject to which the Mortgaged Property was sold. SECOND: To the payment of the whole amount then due, owing, or unpaid on the Note for interest and principal, with interest on the unpaid principal at the Default Rate (as defined in the Note), from the due date of any such payment of principal until the same is paid. THIRD: To the payment of any other Indebtedness required to be paid by Borrower under any provision of this Deed of Trust, the Note, or any of the other Loan Documents. FOURTH: To the payment of the surplus, if any, to whomsoever may be lawfully entitled to receive it. 23. Obligation to Notify Lender of Bankruptcy, Insolvency, Transfer, or Encumbrance. Borrower shall notify Lender in writing, at or before the time of the occurrence of any event described in Sections 20 and 21 of this Deed of Trust, of such event and shall promptly furnish Lender with any and all information on such event that Lender may request. 24. Waiver of Marshaling. Despite the existence of interests in the Mortgaged Property other than that created by this Deed of Trust, and despite any other provision of this Deed of Trust, if Borrower defaults in paying the Indebtedness or in performing any Obligations, Lender shall have the right, in Lender's sole and absolute discretion, to establish the order in which the Mortgaged Property will be subjected to the remedies provided in this Deed of Trust and to establish the order in which all or any part of the Indebtedness secured by this Deed of Trust is satisfied from the proceeds realized on the exercise of the remedies provided in this Deed of Trust. Borrower and any person who now has or later acquires any interest in the Mortgaged Property with actual or constructive notice of this Deed of Trust waives any and all rights to require a marshaling of assets Exhibit B-21 OAK #4823-1374-1407 v3 07024-0121 C1186-005 - 3411537.1 in connection with the exercise of any of the remedies provided in this Deed of Trust or otherwise provided by Governmental Requirements. 25. Environmental Matters. 25.1 Borrower's Representations and Warranties. Borrower represents and warrants to Lender that: 25.1.1 To the best of Borrower' s knowledge, neither the Mortgaged Property nor Borrower are in violation of any Environmental Laws or subject to any existing, pending, or threatened investigation by any Governmental Authority under any Environmental Laws. 25.1.2 Borrower has not obtained and, to the best of Borrower's knowledge, is not required by any Environmental Laws to obtain any permits or licenses to construct or use the Mortgaged Property. 25.1.3 Borrower has conducted an appropriate inquiry into previous uses and ownership of the Mortgaged Property, and, except as disclosed to Lender, after such inquiry has determined that no Hazardous Materials have been disposed of, transported, or released on or at the Mortgaged Property. 25.1.4 No part of the Mortgaged Property is being used or, to the best of Borrower's knowledge, has been used at any previous time, for the disposal, storage, treatment, processing, transporting, or other handling of Hazardous Materials, nor is any part of the Mortgaged Property affected by any Hazardous Materials contamination. 25.1.5 To the best of Borrower's knowledge and belief, no real property adjoining the Mortgaged Property is being used, or has ever been used at any previous time, for the disposal, storage, treatment, processing, or other handling of Hazardous Materials, nor is any other real property adjoining the Mortgaged Property affected by Hazardous Materials contamination. 25.1.6 To the best of Borrower's knowledge, no investigation, administrative order, consent order or agreement, litigation, or settlement with respect to Hazardous Materials or Hazardous Materials contamination is proposed, threatened, anticipated, or in existence regarding the Mortgaged Property. The Mortgaged Property is not currently on, and to Borrower's knowledge, after diligent investigation and inquiry, has never been on, any federal or state "Superfund" or "Superlien" list. 25.1.7 Neither Borrower nor, to the best of Borrower's knowledge and belief, any tenant of any portion of the Mortgaged Property has received any notice from any Governmental Authority regarding any violation of any Environmental Laws. 25.1.8 The use that Borrower makes and intends to make of the Mortgaged Property shall not result in the disposal or release of any Hazardous Materials on, in, or to the Mortgaged Property except in the ordinary course of construction and business at the Mortgaged Property and in compliance with Environmental Laws. Exhibit B-22 OAK #4823-1374-1407 v3 07024-0121 C 1186-005 -- 3411537.1 25.1.9 Borrower shall not cause any violation of any Environmental Laws, nor permit any tenant of any portion of the Mortgaged Property to cause such a violation, nor permit any environmental liens to be placed on any portion of the Mortgaged Property. 25.1.10 Borrower shall not, and shall not permit or cause any third party to, use, generate, manufacture, store, release, discharge, or dispose of any Hazardous Materials on, under, or about the Mortgaged Property, or transport any Hazardous Materials to or from the Mortgaged Property, other than Hazardous Materials used in the course of construction and in the ordinary course of business and in compliance with Environmental Laws. 25.2 Survival of Representations and Warranties. The foregoing representations and warranties shall be continuing and shall be true and correct for the period from the date of this instrument to the release of this Deed of Trust (whether by payment of the Indebtedness secured by this Deed of Trust or foreclosure or action in lieu of foreclosure), and these representations and warranties shall survive such release. 25.3 Notice to Lender. Borrower shall give prompt written notice to Lender of: 25.3.1 Any proceeding or inquiry by any Governmental Authority (including, without limitation, the California State Department of Health Services) regarding the presence or threatened presence of any Hazardous Materials on the Mortgaged Property; 25.3.2 All claims made or threatened by any third party against Borrower or the Mortgaged Property relating to any loss or injury resulting from any Hazardous Materials; 25.3.3 Any notice given to Borrower under California Civil Code §851(b); and 25.3.4 Borrower's discovery of any occurrence or condition on any real property adjoining or in the vicinity of the Mortgaged Property that could cause it or any part of it to be subject to any restrictions on the ownership, occupancy, transferability, or use of the Mortgaged Property under any Environmental Laws. 25.4 Lender's Right to Join Legal Actions. Lender shall have the right, at its option, but at Borrower's sole cost and expense, to join and participate in, as a party if it so elects, any legal proceedings or actions initiated by or against Borrower or the Mortgaged Property in connection with any Environmental Laws. 25.5 Borrower's Indemnity. Borrower shall indemnify, defend, and hold harmless Lender, its elected and appointed officials, officers, employees, agents, successors, and assigns from and against any loss, damage, cost, expense, or liability directly or indirectly arising from or attributable to the use, generation, manufacture, production, storage, release, threatened release, discharge, disposal, or presence of Hazardous Materials on, under, or about the Mortgaged Property, or any order, consent decree, or settlement relating to the cleanup of Hazardous Materials, or any claims of loss, damage, liability, expense, or injury relating to or arising from, directly or indirectly, any disclosure by Lender to anyone of information, whether true or not, relative to Hazardous Materials or an Environmental Law violation, including, without limitation, Attorneys' Fees. This indemnity shall survive the release of this Deed of Trust (whether by Exhibit B-23 OAK #4823-1374-1407 v3 07024-0121 C 1186-005 -- 3411537.1 payment of the Indebtedness secured by this Deed of Trust or foreclosure or action in lieu of foreclosure), provided, however, Borrower shall have no obligations hereunder to the extent of any Hazardous Materials first introduced at the Mortgaged Property from and after a foreclosure or other transfer of the Mortgaged Property. 26. Trustee. The Trustee shall be deemed to have accepted the terms of this trust when this Deed of Trust, duly executed and acknowledged, is made a public record as provided by law. The Trustee shall not be obligated to notify any party to this Deed of Trust of any pending sale under any other deed of trust or of any action or proceeding in which Borrower, Lender, or Trustee is a party, unless such sale relates to or reasonably might affect the Mortgaged Property, this Deed of Trust, Lender's security for the payment of the Indebtedness and the performance of the Obligations, or the rights or powers of Lender or Trustee under the Loan Documents, or unless such action or proceeding has been instituted by Trustee against the Mortgaged Property, Borrower, or Lender. 27. Power of Trustee to Reconvey or Consent. At any time, without liability and without notice to Borrower, on Lender's written request and presentation of the Note and this Deed of Trust to Trustee for endorsement, and without altering or affecting (a) the personal liability of Borrower or any other person for the payment of the Indebtedness secured by this Deed of Trust, or (b) the lien of this Deed of Trust on the remainder of the Mortgaged Property as security for the repayment of the full amount of the Indebtedness then or later secured by this Deed of Trust, (c) or any right or power of Lender or Trustee with respect to the remainder of the Mortgaged Property, Trustee may (i) reconvey or release any part of the Mortgaged Property from the lien of this Deed of Trust; (ii) approve the preparation or filing of any map or plat of the Mortgaged Property; (iii) join in the granting of any easement burdening the Mortgaged Property; or (iv) enter into any extension or subordination agreement affecting the Mortgaged Property or the lien of this Deed of Trust. 28. Duty to Reconvey. On Lender's written request reciting that all sums secured hereby have been paid, surrender of the Note and this Deed of Trust to Trustee for cancellation and retention by Trustee, and payment by Borrower of any reconveyance fees customarily charged by Trustee, Trustee shall reconvey, without warranty, the Mortgaged Property then held by Trustee under this Deed of Trust. The recitals in such reconveyance of any matters of fact shall be conclusive proof of their truthfulness. The grantee in such reconveyance may be described as "the person or persons legally entitled to the Mortgaged Property." Such request and reconveyance shall operate as a reassignment of the Rents assigned to Lender in this Deed of Trust. 29. Partial Releases. Provided that all of the conditions set forth in this Section 29 have been satisfied, notwithstanding the provisions of Section 21, upon Borrower's written request, Lender agrees to cause the Trustee to prepare, execute, and record a partial release and reconveyance of the lien of this Deed of Trust with respect to one or more parcels comprising the Land described in Attachment A that Borrower intends to sell or otherwise convey to third parties. All of the following conditions must be satisfied prior to the execution and recordation of any such partial release and reconveyance: 29.1 No Current Default. At the time of the request, Borrower is not in default under the Note or the Deed of Trust in the payment of principal, interest, loan costs, or fees, or in the Exhibit B-24 OAK #4823-1374-1407 v3 07024-0121 C 1186-005 -- 3411537.1 performance of any of the terms, conditions, or covenants of the Note, the Deed of Trust, or the Loan Agreement. 29.2 No Future Default. No event has occurred that after notice, passage of time, or both, shall constitute a default under the Note, the Deed of Trust, or the Loan Agreement. 29.3 Payment of Consideration. Borrower shall have paid to Lender the consideration for the requested partial release and reconveyance in the amount of the greater of (a) the Net Proceeds (defined below) from the sale, or (b) such amount which, when applied as a reduction to the outstanding principal balance of the Loan will result in the ratio, expressed as a percentage, of the outstanding principal balance of the Loan divided by the appraised value of the portion of the Mortgaged Property remaining subject to the lien of this Deed of Trust to be not greater than eighty percent (80%), with such determination of value to be made based upon an appraisal conducted at the time of Borrower's request by an appraiser selected by Lender, and with the cost of such appraisal to be paid by Borrower. For purposes of this Deed of Trust, "Net Proceeds" shall mean the proceeds of sale received by Borrower from the sale of any or all of the parcels comprising the Land less costs incurred for marketing, appraisals, brokers' fees, escrow and survey charges, closing costs, and title insurance. 29.4 Remaining Property Secured. All Mortgaged Property and Personalty providing security for the payment of the Note and other Indebtedness described in this Deed of Trust, (other than portions of the Mortgaged Property security, if any, previously reconveyed and portions of the Mortgaged Property that may be released as provided in this Section 29), is still and shall remain subject to the lien of this Deed of Trust. 29.5 Access. No portion of the Mortgaged Property shall be released from the lien of this Deed of Trust if such release will prevent Lender's means of ingress and egress to the Mortgaged Property not yet released unless Borrower provides Lender with an easement providing access to the unreleased Mortgaged Property, or the Mortgaged Property to be released contains streets or roads dedicated to public use that would allow Lender access to Mortgaged Property not yet released. 29.6 Lender's Fees and Costs. Borrower shall have paid all costs and expenses reasonably incurred in connection with the reconveyance, including without limitation, trustee's fees, recording fees, escrow fees, the cost of title endorsements required by Lender, Attorneys' Fees incurred by Lender, and the cost of any appraisal conducted pursuant to Section 29.3. 29.7 Title Endorsements. Lender shall receive, at Borrower's expense, a CLTA Endorsement No. 111 to Lender's title insurance policy obtained upon the making of the Loan and the recordation of this Deed of Trust, and any other title endorsements reasonably required by Lender. 29.8 Other Documents. Borrower shall cause to be executed and recorded a reciprocal easement agreement, declaration of covenants, conditions, and restrictions, or other agreement that will burden the portion of the Mortgaged Property to be reconveyed with rights of access, ingress, and egress, in favor of the remainder of the Mortgaged Property, in form and content approved by Lender. Exhibit B-25 OAK #4823-1374-1407 v3 07024-0121 C 1186-005 -- 3411537.1 29.9 Legal Subdivision. The portion of the Mortgaged Property to be reconveyed and the remainder of the Mortgaged Property shall each be comprised of lawful parcels under the Subdivision Map Act of the State of California and all applicable local ordinances. 30. Substitution of Trustee. Lender, at Lender's option, may from time to time, by written instrument, substitute a successor or successors to any Trustee named in or acting under this Deed of Trust, which instrument, when executed and acknowledged by Lender and recorded in the office of the Recorder of the County of Riverside, shall constitute conclusive proof of the proper substitution of such successor Trustee or Trustees, who shall, without conveyance from the predecessor Trustee, succeed to all right, title, estate, powers, and duties of such predecessor Trustee, including, without limitation, the power to reconvey the Mortgaged Property. To be effective, the instrument must contain the names of the original Borrower, Trustee, and Lender under this Deed of Trust, the book and page or instrument or document number at which, and the county or counties in which, this Deed of Trust is recorded, and the name and address of the substitute Trustee. If any notice of default has been recorded under this Deed of Trust, this power of substitution cannot be exercised until all costs, fees, and expenses of the then acting Trustee have been paid. On such payment, the then acting Trustee shall endorse receipt of the payment on the instrument of substitution. The procedure provided in this Section 30 for substitution of Trustees is not exclusive of other provisions for substitution provided by Governmental Requirements. 31. No Waiver by Lender. No waiver by Lender of any right or remedy provided by the Loan Documents or Governmental Requirements shall be effective unless such waiver is in writing and signed by the City Manager. Waiver by Lender of any right or remedy granted to Lender under the Loan Documents or Governmental Requirements as to any transaction or occurrence shall not be deemed a waiver of any future transaction or occurrence. The acceptance of payment of any sum secured by this Deed of Trust after its due date, or the payment by Lender of any Indebtedness or the performance by Lender of any Obligations of Borrower under the Loan Documents, on Borrower's failure to do so, or the addition of any payment so made by Lender to the Indebtedness secured by this Deed of Trust, or the exercise of Lender's right to enter the Mortgaged Property and receive and collect the Rents from it, or the assertion by Lender of any other right or remedy under the Loan Documents, shall not constitute a waiver of Lender's right to require prompt performance of all other Obligations of Borrower under the Loan Documents and payment of the Indebtedness, or to exercise any other right or remedy under the Loan Documents for any failure by Borrower to timely and fully pay the Indebtedness and perform its Obligations under the Loan Documents. Lender may waive any right or remedy under the Loan Documents or Governmental Requirements without notice to or consent from Borrower, any guarantor of the Indebtedness and of Borrower's Obligations under the Loan Documents, or any holder or claimant of a lien or other interest in the Mortgaged Property that is junior to the lien of this Deed of Trust, and without incurring liability to Borrower or any other person by so doing. 32. Consents and Modifications; Borrower and Lien Not Released. Despite Borrower's default in the payment of any Indebtedness secured by this Deed of Trust or in the performance of any Obligations under this Deed of Trust or Borrower's breach of any obligation, covenant, or agreement in the Loan Documents, Lender, at Lender's option, without notice to or consent from Borrower, any guarantor of the Indebtedness and of Borrower's Obligations under the Loan Documents, or any holder or claimant of a lien or interest in the Mortgaged Property that is junior Exhibit B-26 OAK #4823-1374-1407 v3 07024-0121 Cl 186-005 -- 3411537.1 to the lien of this Deed of Trust, and without incurring liability to Borrower or any other person by so doing, may from time to time (a) extend the time for payment of all or any portion of Borrower's Indebtedness under the Loan Documents; (b) accept a renewal note or notes, or release any person from liability, for all or any portion of such Indebtedness; (c) agree with Borrower to modify the terms and conditions of payment under the Loan Documents; (d) reduce the amount of the monthly installments due under Section 10 of this Deed of Trust; (e) reconvey or release other or additional security for the repayment of Borrower's Indebtedness under the Loan Documents; (0 approve the preparation or filing of any map or plat with respect to the Mortgaged Property; (g) enter into any extension or subordination agreement affecting the Mortgaged Property or the lien of this Deed of Trust; and (h) agree with Borrower to modify the term, the rate of interest, or the period of amortization of the Note or alter the amount of the monthly installments payable under the Note. No action taken by Lender under this Section 32 shall be effective unless it is in writing, subscribed by Lender, and, except as expressly stated in such writing, no such action will impair or affect (i) Borrower's obligation to pay the Indebtedness secured by this Deed of Trust and to observe all Obligations of Borrower contained in the Loan Documents; (ii) the guaranty of any Person of the payment of the Indebtedness secured by this Deed of Trust; or (iii) the lien or priority of the lien of this Deed of Trust. At Lender's request, Borrower shall promptly pay Lender a reasonable service charge, together with all insurance premiums and Attorneys' Fees as Lender may have advanced, for any action taken by Lender under this Section 32. Whenever Lender's consent or approval is specified as a condition of any provision of this Deed of Trust, such consent or approval shall not be effective unless such consent or approval is in writing, signed by the City Manager. 33. Waiver of Right of Offset. No portion of the Indebtedness secured by this Deed of Trust shall be or be deemed to be offset or compensated by all or any part of any claim, cause of action, counterclaim, or cross-claim, whether liquidated or unliquidated, that Borrower may have or claim to have against Lender. Borrower hereby waives, to the fullest extent permitted by Governmental Requirements, the benefits of California Code of Civil Procedure §431.70, which provides: Where cross -demands for money have existed between persons at any point in time when neither demand was barred by the statute of limitations, and an action is thereafter commenced by one such person, the other person may assert in the answer the defense of payment in that the two demands are compensated so far as they equal each other, notwithstanding that an independent action asserting the person's claim would at the time of filing the answer be barred by the statute of limitations. If the cross -demand would otherwise be barred by the statute of limitations, the relief accorded under this section shall not exceed the value of the relief granted to the other party. The defense provided by this section is not available if the cross -demand is barred for failure to assert it in a prior action under Section 426.30. Neither person can be deprived of the benefits of this section by the assignment or death of the other. For the purposes of this section, a money judgment is a "demand for money" and, as applied to a money judgment, the demand is barred by the statute of limitations when enforcement of the Exhibit B-27 OAK #4823-1374-1407 v3 07024-0121 C1186-005 - 3411537.1 judgment is barred under Chapter 3 (commencing with Section 683.010) of Division 1 of Title 9. 34. Future Advances. On request by Borrower, Lender, at Lender's option, may make future advances to Borrower. All such future advances, with interest, shall be added to and become a part of the Indebtedness secured by this Deed of Trust when evidenced by promissory note(s) reciting that such note(s) are secured by this Deed of Trust. 35. Intentionally omitted. 36. Additional Borrower Representations and Covenants. To induce Lender to enter into this Deed of Trust, the Note, and the Loan Agreement and to make the Loan, Borrower makes the following representations and warranties, which are deemed made as of both the date and the recordation of this Deed of Trust: 36.1 Capacity. Borrower and the individuals executing Loan Documents on Borrower's behalf have the full power, authority, and legal right to execute and deliver, and to perform and observe the provisions of this Deed of Trust, the Note, the other Loan Documents, and any other document, agreement, certificate, or instrument executed in connection with the Loan, and to carry out the contemplated transactions. 36.2 Authority and Enforceability. Borrower's execution, delivery, and performance of this Deed of Trust, the Note, the Loan Agreement, and any other document, agreement, certificate, or instrument executed in connection with the Loan have been duly authorized by all necessary corporate or other business entity action and do not and shall not require any registration with, consent, or approval of, notice to, or any action by any Person or Governmental Authority. Borrower has obtained or will obtain on or before the recordation of this Deed of Trust all necessary Governmental Authority and other approvals necessary for Borrower to comply with the Loan Documents. This Deed of Trust, the Note, and Loan Agreement, when executed and delivered by Borrower, shall constitute the legal, valid, binding, and joint and several obligations of Borrower enforceable in accordance with their respective terms. 36.3 Compliance With Other Instruments. The execution and delivery of this Deed of Trust, the Note, and the Loan Agreement, and compliance with their respective terms, and the issuance of the Note and other Loan Documents as contemplated in this Deed of Trust, shall not result in a breach of any of the terms or conditions of, or result in the imposition of, any lien, charge, or encumbrance (except as created by this Deed of Trust and the other Loan Documents) on any properties of Borrower, or constitute a default (with due notice or lapse of time or both) or result in an occurrence of an event for which any holder or holders of indebtedness may declare the same due and payable under, any indenture, agreement, order, judgment, or instrument to which Borrower is a party or by which Borrower or its properties may be bound or affected. 36.4 Compliance With Law. The execution and delivery of this Deed of Trust, the Note, and the other Loan Documents, or any other document, agreement, certificate, or instrument to which Borrower is bound in connection with the Loan, do not conflict with, result in a breach or default under, or create any lien or charge under any provision of any Governmental Requirements to which it is subject and shall not violate any of the Governmental Requirements. Exhibit B-28 OAK #4823-1374-1407 v3 07024-0121 C1186-005 - 3411537.1 36.5 Litigation. There are no actions, suits, investigations, or proceedings pending or, to Borrower's knowledge after due inquiry and investigation, threatened against or affecting Borrower at law or in equity, before or by any Person or Governmental Authority, that, if adversely determined, would have a material adverse effect on the business, properties, or condition (financial or otherwise) of Borrower or on the validity or enforceability of this Deed of Trust, any of the other Loan Documents, or the ability of Borrower to perform under any of the Loan Documents. 36.6 No Untrue Statements. All statements, representations, and warranties made by Borrower in this Deed of Trust or any other Loan Document and any other agreement, document, certificate, or instrument previously furnished or to be furnished by Borrower to Lender under the Loan Documents (a) are and shall be true, correct, and complete in all material respects at the time they were made and on and as of the recordation of this Deed of Trust, (b) do not and shall not contain any untrue statement of a material fact, and (c) do not and shall not omit to state a material fact necessary to make the information in them neither misleading nor incomplete. Borrower understands that all such statements, representations, and warranties shall be deemed to have been relied on by Lender as a material inducement to make the Loan. 36.7 Policies of Insurance. Each copy of the insurance policies relating to the Mortgaged Property delivered to Lender by Borrower: (a) is a true, correct, and complete copy of the respective original policy in effect on the date of this Deed of Trust, and no amendments or modifications of said documents or instruments not included in such copies have been made, except as disclosed to Lender in writing, and (b) has not been terminated and is in full force and effect. Borrower is not in default in the observance or performance of its material obligations under said documents or instruments and Borrower has done all things required to be done as of the date of this Deed of Trust to keep unimpaired its rights thereunder. 36.8 Taxes. Borrower has filed or caused to be filed all tax returns that are required to be filed by Borrower under the Governmental Requirements of each Governmental Authority with taxing power over Borrower, and Borrower has paid, or made provision for the payment of, all taxes, assessments, fees, and other governmental charges that have or may have become due under said returns, or otherwise, or under any assessment received by Borrower except that such taxes, if any, as are being contested in good faith and as to which adequate reserves (determined in accordance with generally accepted accounting principles) have been provided. 36.9 Title to Mortgaged Property. As of the date of recordation of this Deed of Trust, Borrower holds full legal and equitable title to the Mortgaged Property. 36.10 Leases. If the Mortgaged Property includes a leasehold estate, Borrower has not and shall not surrender, terminate, cancel, waive, accept waiver, change, supplement, grant subleases of, alter, surrender, or amend, and shall comply with all terms, covenants, and conditions in the Leasehold. 36.11 Further Acts. Borrower shall, at its sole cost and expense, and without expense to Trustee or Lender, do, execute, acknowledge, and deliver all and every such further acts, deeds, conveyances, deeds of trust, mortgages, assignments, notices of assignments, transfers, and assurances as Trustee or Lender shall from time to time reasonably require, for the purpose of Exhibit B-29 OAK #4823-1374-1407 v3 07024-0121 C1186 -005--3411537.I better assuring, conveying, assigning, transferring, pledging, mortgaging, warranting, and confirming to Trustee the Mortgaged Property and rights, and as to Lender the security interest as to the Personalty, conveyed or assigned by this Deed of Trust or intended now or later so to be, or for carrying out the intention or facilitating the performance of the terms of this Deed of Trust, or for filing, registering, or recording this Deed of Trust and, on demand, shall execute and deliver, and authorizes Lender to execute in the name of Borrower, to the extent it may lawfully do so, one or more financing statements, chattel mortgages, or comparable security instruments, to evidence more effectively the lien of this Deed of Trust on the Mortgaged Property. 36.12 Filing Fees. Borrower shall pay all filing, registration, or recording fees, all Governmental Authority stamp taxes and other fees, taxes, duties, imposts, assessments, and all other charges incident to, arising from, or in connection with the preparation, execution, delivery, and enforcement of the Note, this Deed of Trust, the other Loan Documents, any supplemental deed of trust or mortgage, or any instrument of further assurance. 36.13 Entity Compliance. As long as it is the owner of the Mortgaged Property, Borrower, if a corporation, limited liability company, or partnership, shall do all things necessary to preserve and keep in full force and effect its existence, franchises, rights, and privileges as such entity under the laws of the state of its incorporation or formation, and shall comply with all Governmental Requirements of any Governmental Authority applicable to Borrower or to the Mortgaged Property or any part of it. 37. Governing Law. This instrument shall be deemed to have been made in the State of California, and the validity of this Deed of Trust and the Loan Documents shall be governed by, interpreted under, and construed and enforceable in accordance with, the procedural and substantive laws of the State of California for all purposes; except when federal law applies (including, without limitation, any federal usury ceiling or other federal law preempting state usury laws, which, from time to time, is applicable to the indebtedness evidenced by the Note). The parties agree that all actions or proceedings (including arbitration) arising in connection with this Deed of Trust and the other Loan Documents shall be tried and litigated only in the state courts located in the County of Riverside, State of California, except as may be otherwise provided by California law for actions between private parties and public entities. 38. Mechanics' Liens. Borrower shall pay from time to time when due, all lawful claims and demands of mechanics, materialmen, laborers, and others that, if unpaid, might result in, or permit the creation of, a lien on the Mortgaged Property or any part of it, or on the Rents arising therefrom, and in general shall do or cause to be done everything necessary so that the lien and security interest of this Deed of Trust shall be fully preserved, at Borrower's expense, without expense to Lender; provided, however, that if Governmental Requirements empower Borrower to discharge of record any mechanics', laborer' s, materialman's, or other lien against the Mortgaged Property by the posting of a bond or other security, Borrower shall not have to make such payment if Borrower posts such bond or other security on the earlier of (a) ten (10) days after the filing or recording of same or (b) within the time prescribed by law, so as not to place the Mortgaged Property in jeopardy of a lien or forfeiture. Exhibit B-30 OAK #4823-1374-1407 v3 07024-0121 C 1186-005 -- 3411537.1 39. Liability for Acts or Omissions. Lender shall not be liable or responsible for its acts or omissions under this Deed of Trust, except for Lender's (or its officials, officers, employees, agents, contractor's or representatives) own gross negligence or willful misconduct. 40. Notices. Except for any notice required by Governmental Requirements to be given in another manner, any notices required or permitted to be given hereunder shall be given in writing and shall be delivered (a) in person, (b) by certified mail, postage prepaid, return receipt requested, or (c) by a commercial overnight courier that guarantees next day delivery and provides a receipt. Such notices shall be addressed as follows: Lender Notice Address: City of Cathedral City 68-700 Avenida Lalo Guerrero Cathedral City, CA 92234 Attention: Administrative Services Director with copies to: Burke, Williams & Sorensen 1600 Iowa Avenue, Suite 250 Riverside, CA 92507-7426 Attention: Eric Vail, City Attorney Borrower Notice Address: City Urban Revitalization Corporation 68-700 Avenida Lalo Guerrero Cathedral City, CA 92234 Attention: Executive Director with a copy to: Gresham Savage Nolan & Tilden, PC 550 E. Hospitality Lane, Suite 300 San Bernardino, CA 92408 Attention: Kevin Randolph or to such other address as either party may from time to time specify in writing to the other party. All notices shall be deemed effective on the earliest of (i) actual receipt; (ii) rejection of delivery; (iii) if sent by certified mail, the third day on which regular United States mail delivery service is provided after the day of mailing or, if sent by overnight delivery service, on the next day on which such service makes next -business -day deliveries after the day of sending. For notice purposes, Borrower agrees to keep Lender informed at all times of Borrower's current address(es). 41. Statement of Obligations. Except as otherwise provided by Governmental Requirements, at Lender's request, Borrower shall promptly pay to Lender such fee as may then be provided by law as the maximum charge for each statement of obligations, Lender's statement, Lender's Exhibit B-31 C1186-005 -- 3411537.1 OAK #4823-1374-1407 v3 07024-0121 demand, payoff statement, or other statement on the condition of, or balance owed, under the Note or secured by this Deed of Trust. 42. Application of Payments. Except as otherwise expressly provided by Governmental Requirements or any other provision of this Deed of Trust, all payments received by Lender from Borrower under the Loan Documents shall be applied by Lender in the following order: (a) costs, fees, charges, and advances paid or incurred by Lender or payable to Lender and interest under any provision of this Note or the Deed of Trust, in such order as Lender, in its sole and absolute discretion, elects, (b) interest payable under the Note, and (c) principal under the Note. 43. Remedies Are Cumulative. Each remedy in this Deed of Trust is separate and distinct and is cumulative to all other rights and remedies provided by this Deed of Trust or by Governmental Requirements, and each may be exercised concurrently, independently, or successively, in any order whatsoever. 44. Non -Recourse. The obligations under the Loan Documents are fully and unconditionally non-recourse to CURC and its officers, officials, employees, agents, and contractors. All amounts due or to become due for any reason under the Loan Documents may be satisfied solely from the exercise of the City's rights and remedies against the Mortgaged Property and under no circumstances will CURC's present or future real and personal property assets other than the Mortgaged Property be liable for the satisfaction of any amounts that may become due under the Loan Documents. 45. Severability. If any provision of the Loan Documents, or the application of them to the circumstances, is held void, invalid, or unenforceable by a court of competent jurisdiction, the Loan Documents, and the applications of such provision to other parties or circumstances, shall not be affected thereby, the provisions of the Loan Documents being severable in any such instance. 46. Delegation of Authority. Whenever this Deed of Trust provides that Borrower authorizes and appoints Lender as Borrower's attorney-in-fact to perform any act for or on behalf of Borrower or in the name, place, and stead of Borrower, Borrower expressly understands and agrees that this authority shall be deemed a power coupled with an interest and such power shall be irrevocable. 47. General Provisions. 47.1 Successors and Assigns. Subject to Sections 20 and 21 of this Deed of Trust, this Deed of Trust applies to, inures to the benefit of, and binds, the respective heirs, legatees, devisees, administrators, executors, successors, and assigns of each party to this Deed of Trust. 47.2 Meaning of Certain Terms. As used in this Deed of Trust and unless the context otherwise provides, the words "herein," "hereunder" and "hereof" mean and include this Deed of Trust as a whole, rather than any particular provision of it. 47.3 Authorized Agents. In exercising any right or remedy, or taking any action provided in this Deed of Trust, Lender may act through its employees, agents, or independent contractors, as Lender expressly authorizes. Exhibit B-32 OAK#4823-1374-1407 v3 07024-0121 C1186-005 -- 3411537.1 47.4 Gender and Number. Wherever the context so requires in this Deed of Trust, the masculine gender includes the feminine and neuter, the singular number includes the plural, and vice versa. 47.5 Captions. Captions and section headings used in this Deed of Trust are for convenience of reference only, are not a part of this Deed of Trust, and shall not be used in construing it. 47.6 Time Is of the Essence. As a material inducement and consideration to the parties entering into this Deed of Trust, and but for this provision the parties would not enter into this Deed of Trust, the parties agree that the performance in a timely manner of each deadline set forth in this Deed of Trust before its expiration is of crucial importance to the parties. Failure by a party to timely perform an obligation before the deadline set forth in this Deed of Trust (no matter for what reason, nor how soon thereafter it may have been performed, nor the lack of prejudice to the other party as the result of such nonperformance) shall result in a default by the nonperforming party or the failure of a condition, as appropriate. The parties expressly waive any equitable relief with respect to a missed deadline. 47.7 No Limitation of Remedies. Nothing in this Deed of Trust shall be deemed to apply to or limit the right of Lender to: (a) exercise self-help remedies, (b) foreclose judicially or nonjudicially against any real or personal property collateral, or to exercise judicial or nonjudicial power of sale rights, (c) obtain from a court provisional or ancillary remedies (including, but not limited to, injunctive relief, a writ of possession, prejudgment attachment, a protective order or the appointment of a receiver), or (d) pursue rights against Borrower or any other party in a third party proceeding in any action brought against Lender (including, but not limited to, actions in bankruptcy court). IN WITNESS WHEREOF, Borrower has executed and delivered this Deed of Trust as of the date first written above. BORROWER: CITY URBAN REVITALIZATION CORPORATION, a non-profit corporation By: Name: Title: Exhibit B-33 OAK #4823-1374-1407 v3 07024-0121 C1186-005 -- 3411537.1 This Notary Acknowledgement is attached to a document entitled-: DEED OF TRUST, ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND FIXTURE FILING 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 COUNTY OF On before me, (insert name and title of the officer) personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) Acknowledgment OAK #4823-1374-1407 v3 07024-0121 ATTACHMENT A LEGAL DESCRIPTION OF LAND All that real property in the City of Cathedral City, County of Riverside, State of California, described as follows: Parcel 1 of Parcel Map No. 32932, as shown on the map filed in Book 217 of Parcel Maps, at Pages 7 through 10, inclusive, in the office of the County Recorder of Riverside County, California. APN: 687-500-001, 687-500-003, 687-500-018 Attachment A OAK #4823-1374-1407 v3 07024-0121