Loading...
HomeMy WebLinkAbout2005 CON CDC Plaza City Apartments - LoanLOAN AGREEMENT (Plaza Apartments) THIS LOAN AGREEMENT (this "Agreement") is made and entered into as of November 1, 2005, by and between THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY ("CDC"), and PLAZA CITY APARTMENTS, LP, a California limited partnership (the "Borrower"). Reference is hereby made to the following: A. Subject to the terms and conditions set forth herein and the Loan Documents entered in connection with this Agreement, CDC is making a loan to Borrower in the amount of Two Million Seven Hundred Thousand Dollars ($2,700,000) (the "Loan"). The proceeds of the Loan will be used by Borrower to pay the balance of the purchase price and additional costs relating to the acquisition, demolition, and development of certain real property located in the City of National City, County of San Diego, State of California commonly known as 1535 Plaza Boulevard (the "Land"). B. Borrower intends to develop a multifamily apartment complex on the Land intended for rental to senior citizen tenants of low income (the "Project"). C. Borrower's obligations with respect to the Loan: (a) will be evidenced by a promissory note of even date herewith in the stated principal amount of $2,700,000 executed by Borrower in favor of CDC (the "Note"); (b) will be secured by a Deed of Trust, of even date herewith executed by Borrower, as trustor, for the benefit of CDC, as beneficiary (the "Deed of Trust"), which Deed of Trust will encumber the Land (and other collateral defined therein); and (c) will be guaranteed by a Repayment Guaranty of even date herewith ("Guaranty") executed by Davis Slajchert, and individual, Laura Slajchert, an individual, and Willow Partners LLC (collectively the "Guarantor"), in favor of CDC. This Agreement, the Note, the Deed of Trust and the Guaranty are collectively referred to herein as the "Loan Documents." Accordingly, in order to induce CDC to make the Loan, Borrower hereby agrees with CDC as follows: 1. Conditions Precedent to the Funding of the Loan. CDC will fund the initial $1,000,000 of the Loan ("Initial Funding") concurrently with the execution of this Agreement. CDC will fund the remaining $1,700,000 in three installments ("Subsequent Fundings") in accordance with Section 3 below. 1.1 Conditions to Initial Funding. CDC's obligation to make the Initial Funding and all other obligations of CDC hereunder are conditioned upon CDC's receipt and approval of the following documents or materials, each of which shall be in the form and substance satisfactory to CDC in its sole and absolute discretion and, where appropriate, S476011.5 1136796.1 J. 1L 1V1,V11L1• v,L. duly executed (and acknowledged where necessary) and delivered by the appropriate parties thereto: (a) this Agreement; (b) the Note; (c) the Deed of Trust; (d) the Guaranty; (e) such other documents, agreements, instruments, certificates and opinions as CDC may reasonably require; (f) an ALTA loan title insurance policy issued by Chicago Title Company having a liability in the amount of $1,000,000, which can be increased to the full amount of the Loan when the Subsequent Fundings are made, and insuring CDC, as of the time and date that the Deed of Trust is recorded that fee title to the Land is vested in Borrower and that the lien of the Deed of Trust is a valid lien on the Land, subject only to a senior loan made by SA Affordable Housing, LLC, and those liens and exceptions as shall be acceptable to CDC; (g) a copy of the acquisition agreement that Borrower entered with the seller of the Land in connection with Borrower's acquisition of the Land; (h) a Phase I Environmental Site Assessment for the Land (the "Environmental Report"); and (i) evidence, in the form of insurance binders, certificates or policies, that Borrower has obtained the insurance coverage required by the Deed of Trust, with CDC named as loss payee and additional insured (as more particularly provided in the Deed of Trust). 1.2 Conditions to Subsequent Fundings. CDC's obligation to make the Subsequent Fundings are conditioned upon CDC's receipt and approval of the following documents or materials, each of which shall be in the form and substance satisfactory to CDC in its sole and absolute discretion: (a) all documents that were conditions of the Initial Funding will have been previously entered; (b) Borrower will have entered into a construction contract for the construction of the Project with a contractor reasonably approved by CDC, which will obligate the contractor to complete all construction of the Project with a guaranteed maximum contract price that does not exceed the amount budgeted for construction costs in the budget for the Project most recently presented to and approved by CDC ("Project Budget"); (c) Borrower will have obtained a commitment for a construction loan ("Construction Loan") with terms satisfactory to CDC in its sole and absolute discretion and in an amount necessary to, when added to the equity contributed to the Partnership, complete the development of the Project in accordance with the Project Budget; 1 ..a.vI1(lVIV a •.OVI ♦ VC a„ aswvf.aw.vv ••,z.. ,+w..v.-. ---------- (d) Borrower will have obtained a written commitment, in form acceptable to CDC in its sole and absolute discretion, for a permanent loan in an amount necessary to refinance the Construction Loan; (e) Borrower will have obtained a written commitment ("Equity Commitment"), in form acceptable to CDC in its sole and absolute discretion, from an investor that will be admitted or continue as a limited partner in the Partnership, for the investment of sufficient equity into the Partnership to cause the Project to be completed in accordance with the Project Budget; and (f) Borrower will have obtained all requisite building permits and commenced construction of the Project no later than July 1, 2007. 2. Failure to Close Loan. Notwithstanding anything herein to the contrary, if the Loan has not funded by November 7, 2005, or such later date as the parties may otherwise agree because Borrower has failed to satisfy all of the conditions to the Initial Funding, then CDC may at its option terminate this Agreement. 3. Disbursement of Loan Proceeds. CDC will make the Initial Funding on the date of this Agreement. CDC will make the Subsequent Fundings in three equal installments of $566,667 when the following events have occurred, subject to the satisfaction of the conditions in Section 1.2 above: (i) the first installment will be made to Borrower when Borrower obtains all requisite building permits for the construction of the Project; (ii) the second installment will made to Borrower when Borrower completes 50% of the construction of the Project, as certified by the architect responsible for the design of the Project; and (iii) the third installment will be made to Borrower when Borrower completes construction and obtains a temporary certificate of occupancy for the Project. Borrower will use all Loan proceeds for acquisition, demolition, and development costs associated with the Project and not in connection with any other project. 4. Residual Receipts Payments. Borrower will be required to make no interest or principal payments under the Loan until the earlier of (i) the payment in full of all deferred Developer's Fees (as defined in Section 9 below), and (ii) the ninth anniversary of the date that the Project is placed in service as defined in Section 42 of the Internal Revenue Code, 26 U.S.C. § 42 (the "Payment Commencement Date"). Following the Payment Commencement Date, Borrower will make an annual payment to CDC in the amount of 50% of the residual receipts generated by the operations of the Project. For purposes of this Agreement, "residual receipts" means the gross income generated from the Project from rents and all other sources less the operating expenses of the Project. The "operating expenses" of the Project, as used in this Agreement, means all actual reasonable and customary expenses in connection with the operation, maintenance, and debts of the Partnership, including, without limitation, reasonable and customary insurance or such other insurance required by any lender, debt service under any loan approved by CDC, property taxes, reasonable property management fees not to exceed 5.5% of the Project's gross income, payment of any fees to the tax credit investor specified in the Equity Commitment, payment of asset management fees to the limited partner and the general partner as set forth in the Equity Commitment, payment of the deferred Developer's Fee if any portion of the Developer's Fee remains unpaid on the Payment Commencement Date, and reasonable reserves in accordance with Section 8 below which have been set forth in the approved Project Budget. 5. Covenants, Representations and Warranties. Borrower covenants, represents and warrants to CDC that: (a) Authority. Borrower is a limited partnership which has been duly organized and is validly existing in good standing under the laws of the State of California and has all requisite power and authority (i) to enter into and perform under each of the Loan Documents to which it is a party; and (ii) to own and operate its properties and assets and to carry on its business as it is currently being conducted. The execution, delivery and performance by Borrower of each of the Loan Documents to which it is a party has been duly authorized by all necessary action on the part of Borrower and requires no approval or filing with any governmental authority which has not been obtained or performed. Each of the documents in connection with the Loan to which Borrower is a party constitutes a legal, valid and binding obligation of Borrower, enforceable against Borrower in accordance with its terms. (b) Financial Statements. Each financial statement of Borrower or financial statement applicable to the Project that is delivered to CDC will be complete and correct as of the date delivered and will present fairly the financial position of the person, entity, or property to which it relates as of the date thereof. Borrower or the Project's property manager will furnish CDC with such additional financial statements and other information respecting its or his respective financial condition and operations, the Land or the Project as CDC may from time to time request. (c) Place of Business. Borrower maintains its place of business at the address set forth in Section 10 below, and will immediately notify CDC of any change in such address. (d) Use of Proceeds. The proceeds of the Loan shall be utilized by Borrower to acquire, demolish, and develop the Land. (e) Litigation. There is no litigation or proceeding against Borrower pending or threatened before any court, administrative agency, or other governmental authority which would, if adversely determined, have a material adverse effect on Borrower or the Project. (f) No Defaults on Outstanding Judgments or Orders. Borrower has received no notice that Borrower is in default with respect to any judgment, writ, injunction, decree, rule, or regulation of any court, arbitrator, or federal, state, municipal, or other governmental authority, commission, board, bureau, agency, or instrumentality, domestic or foreign, which default may materially and adversely affect the ability of Borrower to operate its businesses as presently contemplated or to perform its obligations under any of the Loan Documents. (g) Zoning. The Land is properly zoned for the Project. (h) Eminent Domain. No governmental entity or agency has commenced or, to Borrower's knowledge, threatened exercise of the power of eminent domain affecting all or any part of the Land. (i) Brokers or Finders. The parties agree that no broker or finder has any claim for commissions or fees in connection with this Loan. Borrower hereby agrees to indemnify CDC against any brokers' or finders' fees or commissions claimed through Borrower in connection with any transactions contemplated hereby. (j) Hazardous Substances. Except as disclosed in the Environmental Report, to Borrower's knowledge, after due inquiry and investigation, (i) the Land does not contain any hazardous substances (as defined under any applicable environmental statute); and (ii) no underground storage tanks or underground deposits of hazardous substances are or previously have been located on, under or about the Land. Borrower has duly complied in all material respects with, and its businesses, operations, assets, equipment, property, leaseholds or other facilities are in compliance with, the provisions of all applicable federal, state and local environmental, health and safety laws, codes and ordinances and all rules and regulations promulgated thereunder. 6. Default and Remedies. (a) The occurrence of any of the following events will constitute an event of default hereunder ("Event of Default"): (i) Borrower fails to make when due any payment when required under the Loan documents; or (ii) any representation or warranty that Borrower makes in the Loan Documents or in any certificate, agreement, instrument or statement contemplated by or made or delivered pursuant to or in connection with the Loan Documents is proven to have been known by Borrower, or that should have been known by Borrower, to be incorrect in any material respect when made; or (iii) Borrower fails to perform or observe any other term, covenant or agreement contained in the Loan Documents on its part to be performed or observed, and any such failure continues for a period of 30 days after CDG proves to Borrower written notice thereof; or (iv) if, for any reason (other than full satisfaction or written release by CDC) any of the Loan Documents cease to be valid and binding and in full force and effect or Borrower asserts that it is not liable under any of the Loan Documents; or (v) either Borrower or Guarantor (A) applies for or consents to the appointment of a receiver, trustee, liquidator or custodian or the like of itself or of the Project, (B) admits in writing its inability to pay its debts generally as they become due, (C) makes a general assignment for the benefit of creditors, (D) is adjudicated a bankrupt or insolvent, or (E) commences a voluntary case under the federal bankruptcy laws of the United States of America or file a voluntary petition or answer seeking reorganization, an arrangement with creditors or an order for relief or seeking to take advantage of any insolvency law or file an answer admitting the material allegations of a petition filed against it in any bankruptcy, reorganization or insolvency proceeding; or corporate or other action shall be taken by it for the purpose of effecting any of the foregoing; or nave me rouowinQ rYvnrs• (vi) without the application, approval or consent of Borrower or Guarantor, a proceeding is instituted in any court of competent jurisdiction under any law relating to bankruptcy, insolvency, reorganization, or relief of debtors seeking in respect of Borrower or Guarantor, respectively, an order for relief or an adjudication in bankruptcy, reorganization, dissolution, winding up, liquidation, a composition or arrangement with creditors, a readjustment of debts, the appointment of a trustee, receiver, liquidator or custodian or the like of either Borrower or Guarantor, of all or any substantial part of its assets, or other like relief in respect thereof under any bankruptcy or insolvency law, and, if such proceeding is being contested by Borrower or Guarantor, in good faith, the same will (A) nevertheless result in the entry of an order for relief or in any such adjudication or appointment or (B) continue undismissed, or pending and unstayed, for any period of 60 consecutive days; or (vii) Either Borrower or Guarantor fails to make any payment in respect of any of its indebtedness when due (whether at maturity or upon acceleration) or within any applicable grace period, or any other event or condition occurs that results in acceleration of the maturity of the Partnership's indebtedness which would have a material adverse effect on Borrower, its business or operations, or Guarantor, its business or operations; or (viii) a judgment or order for the payment of money is rendered against either Borrower or Guarantor, which has a material adverse effect on Borrower's business or its operations and such judgment or order continues unsatisfied and unstayed for a period of 90 days; or (ix) any change occurs in the beneficial ownership of any interest in Borrower without CDC's prior written consent; or (x) Guarantor fails to perform or observe any term, covenant or agreement contained in the Guaranty; or (xi) the death of both of the individuals who comprise the Guarantor. (b) Upon the occurrence of an Event of Default in addition to any other rights or remedies it may have under the Loan Documents, at law, in equity or otherwise, CDC will have the following rights: (i) Acceleration. CDC may, at its option, declare all sums of interest and principal remaining outstanding on the Loan and all other sums outstanding under or in respect of this Agreement or any other Loan Document to be immediately due and payable, without notice of default, presentment, demand, protest, or further notice of any kind, all of which are hereby expressly waived by Borrower. (ii) Sale of Property. CDC will have all rights and remedies of a secured party under the Uniform Commercial Code in force in the State of California, including without limitation, the right without demand or notice to Borrower, to collect, receive or take possession of the Property (as set forth in the Deed of Trust) or any part thereof. Borrower will be liable for, and shall pay on demand, all expenses of retaking, holding, preparing for sale, sale, or the like, and all reasonable attorneys' fees and other expenses incurred by CDC in enforcing its rights under the Loan Documents following an Event of Default, all of which expenses and fees will constitute additional obligations secured by the Loan Documents. Borrower will execute and deliver, or cause to be executed and delivered, such instruments, documents, assignments, waivers, certificates and affidavits and supply or cause to be supplied such further information and take such action as CDC shall require in connection with such sale. (iii) Application of Proceeds. The proceeds of all foreclosure sales and collections, and any other monies, the application of which is not otherwise herein provided for, shall be applied as follows: (A) first, to the payment of all then -existing loans that are senior to the Loan and all costs and expenses in connection with the re -payment of such loans; (B) second, to the costs and expenses of any sale or sales initiated by CDC, and the reasonable compensation of CDC and its counsel; (C) third, to the payment of the unpaid obligations under the Loan in such order and manner as CDC in its sole discretion may determine; and (D) fourth, to payment to Borrower, subject, however, to the rights of the holders of any then -existing lien of which CDC has actual notice. 7. Regulatory Agreements; Subordination. Borrower agrees to execute a Declaration of Covenants, Conditions, and Restrictions ("Declaration") or other document that will be recorded against the Land for the benefit of CDC. The Declaration will restrict the use of the Project and the rents that can be charged in connection with the operation of the Project, all in accordance with terms approved by CDC. CDC agrees that the Declaration will be subordinate to any regulatory agreement required by the California Tax Credit Allocation Committee ("TCAC") in connection with the issuance of Tax Credits to the Project, and will be subordinate to the lien of the Construction Loan, the Permanent Loan and any other loan to Borrower or the Project approved by CDC. CDC agrees to execute any documents reasonably requested by Borrower or any lender that confirms the subordination of the Declaration to the agreements described in this Section 7. In any subordination agreement with a senior lender, CDC will have the right to obtain the ability to cure a default by Borrower under the terms of the senior loan. 8. Reserves. Borrower will set aside reserves for the repair and replacement of the Project and for all anticipated capital expenditures. The annual amount of the reserves ("Reserves") will be equal to the greater of (i) the amount of reserves required by any lender that then has an outstanding loan to the Partnership; (ii) the amount of reserves required to be set aside for the Project under any then -applicable guidelines published by TCAC; and (iii) $20,000. CDC will have the right to approve the use of the Reserves, which must be used in connection with the Project, which approval may not be unreasonably withheld or delayed. 9. Developer's Fee. The fee paid to Willow Partners, LLC, an affiliate of Borrower, for its services as developer of the Project ("Developer's Fee") may not exceed the maximum amount for such fee, as a percentage of the Project's eligible basis, as determined under TCAC regulations. Borrower may not disburse more than 50% of the Developer's Fee to the developer until Borrower has (i) completed the construction of the Projects and obtained a temporary certificate of occupancy, and (ii) has paid or caused to be paid all contractors, sub- contractors, material suppliers and others who have provided labor or services in connection with the acquisition, development, and construction of the Project. 10. Notices. All notices and other communications provided for under this Agreement must be in writing and must be personally delivered or sent by first class United States mail, by nationally recognized overnight courier such as Federal Express or DHL, or by telecopy or by other means of telecommunication, to the following addresses: to Borrower: to CDC: Plaza City Apartments, LP 310 N. Westlake Boulevard Suite 250 Westlake Village, CA 91362 Attention: Davis Slajchert Facsimile No.: (805) 379-8556 National City Community Redevelopment Commission 140 East 12th Street, Suite B National City, CA 91950 Attention: Executive Director or, as to each party, at such other address as shall be designated by such party in a written notice to the other party complying as to delivery with the terms of this Section. All such notices and communications shall be deemed received (i) if personally delivered, upon delivery; (ii) if sent by first class United States mail, following receipt by the recipient; (iii) if sent by courier service, then the next Business Day following the date of delivery to such courier service, with all applicable charges paid; and (iv) if sent by telex, telecopy or similar form of telecommunications, upon receipt by the intended recipient. For purposes hereof, "Business Day" means each day which is not a Saturday, Sunday, or other day on which commercial banks in the State of California are authorized or required to close under the laws of the State of California or federal law. 11. Legal Fees. If CDC employs counsel to collect on the Loan, or otherwise to exercise its remedies, including without limitation filing a claim in connection with any bankruptcy or insolvency proceedings, Borrower shall pay the reasonable fees, costs and expenses of CDC, including without limitation attorneys' fees, whether or not suit is brought. 12. No Waiver; Remedies. No failure on the part of CDC or Borrower to exercise, and no delay in exercising, any right, power, or remedy under any Loan Document will operate as a waiver thereof; nor will any single or partial exercise thereof or the exercise of any other right. The remedies provided in the Loan Documents are cumulative and not exclusive of any remedies provided by law. 13. Governing Law; Consent to Jurisdiction. This Agreement is governed by, and construed in accordance with the laws of the State of California. Borrower and CDC hereby consent to the personal jurisdiction over Borrower and CDC, respectively, of the Superior Court for the County of San Diego, California and the United States District Court for the Central District of California sitting in Los Angeles, California, and waive all objections to the venue of such courts, for the adjudication of any case or controversy arising under or relating to this Agreement. Borrower and CDC further consent to service of process upon each of them in such manner as permitted by the laws of the State of California if litigation or other legal process is commenced in the courts of the State of California or by applicable federal law (including reference to state law) if litigation or legal process is commenced in the United States District Court for the Southern District of California. 14. Severability. Any provision of any Loan Document that is prohibited or unenforceable in any jurisdiction will be, as to such jurisdiction, ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions of the Loan Documents or affecting the validity or enforceability of the provision in any other jurisdiction. 15. Waiver of Jury Trial. BORROWER AND CDC EACH WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, ANY OF THE OTHER LOAN DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR PARTIES, WHETHER WITH RESPECT TO CONTRACT, CLAIMS, TORT CLAIMS, OR OTHERWISE. BORROWER AND CDC EACH AGREE THAT ANY CLAIM OR CAUSE OF ACTION WILL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING THAT SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR ANY PROVISION IIEREOF OR THEREOF. THIS WAIVER APPLIES TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS. 16. Assignment and Assumption. Borrower may not assign this Loan to any partnership or other entity without the consent of CDC, which consent will not be unreasonably withheld, delayed, or conditioned. 17. Miscellaneous. Amendments to this Agreement may be made only in writing by both CDC and Borrower. Compliance with any warranty, covenant, or condition herein set forth may be omitted or waived only in writing by CDC. This Agreement, together with the other Loan Documents, constitutes the entire agreement among the parties with respect to the subject matter contained herein and therein, and supersedes any prior agreements or understanding among the parties, whether written or oral. The Loan Documents do not create and the parties do not intend to create a joint venture, partnership, trust or other business or fiduciary relationship between Borrower and CDC, other than that of debtor and creditor. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original and all of which together shall be deemed to constitute one and the same document. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, personal representatives, successors and assigns. IN WITNESS WHEREOF, CDC and Borrower have executed this Agreement as of the date first written above. CDC: THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY Approved as to form: By: By: Nick Inzunza Chairman of the Board BORROWER: PLAZA CITY APARTMENTS, LP, a California limited partnership By: WP Plaza City, LLC, a California limited liability company By: By: Davis Slajchert, Member Laura Slajchert, Member IN WITNESS WHEREOF, CDC and Borrower have executed this Agreement as of the date first written above. CDC: TIIE COMMUNITY DEVELOPMENT COMMISSION OF TIIE CITY OF NATIONAL CITY Approved as to form: By: By: Nick Inzunza Chairman of the Board BORROWER: PLAZA CITY APARTMENTS, 1.P, a California limited partnership By: WP Plaza ('ity, LLC, a California limited liability company By: By: Laura Slajchert, Member U 36796.1 1O Execution Copy PROMISSORY NOTE (PLAZA) $2,700,000 November 1, 2005 Los Angeles, California 1. For value received PLAZA CITY APARTMENTS, LP, a California limited partnership ("Borrower"), hereby promises to pay to the order of THE COMMUNITY DEVELOPMENT COMMISSION OF TIIE CITY OF NATIONAL CITY (together with any future holders of this Note, "CDC"), at its place of business or at a location that CDC identifies to Borrower. the principal sum of TWO MILLION SEVEN HUNDRED THOUSAND DOLLARS ($2,700,000) or so much thereof as is disbursed pursuant hereto. together with interest thereon as described below. This Promissory Note is the "Note" referred to in the Loan Agreement of even date herewith (as amended from time to time, "Loan Agreement") between Borrower and CDC, and is entitled to all of the benefits of the Loan Agreement. All capitalized terms not otherwise defined herein shall have the meanings set forth in the Loan Agreement. 2. (a) Interest shall accrue at a fixed rate equal to three percent (3%) per annum, compounded annually, on the outstanding principal balance of this Promissory Note ("Note"); (b) Borrower shall make annual payments of interest and principal commencing on the earlier of (i) the payment in full of all deferred Developer's Fees (as defined in Section 9 of the Loan Agreement, and (ii) the ninth anniversary of the date that the Project is placed in service as defined in Section 42 of the Internal Revenue Code, 26 U.S.C. § 42 (the "Payment Commencement Date"). Following the Payment Commencement Date, Borrower will make an annual payment to CDC in the amount of 50% of the residual receipts (as defined in Section 4 of the Loan Agreement) generated by the operations of the Project; (c) The principal balance of this Note, together with all accrued but unpaid interest, shall be due and payable, unless subsequently agreed to by CDC, on the earlier of (i) Borrower's failure to demolish the existing structures on the Land before December 31, 2005 at Borrower's sole cost and expense; (ii) Borrower's failure to commence construction of the Project on or before July 1, 2007, and (iii) 55 years after the date of this Note (the "Maturity Date"). 3. All principal and interest shall be payable in lawful money of the United States of America. Payment shall be deemed made at the time the CDC receives such payment, subject to the condition subsequent that any check or similar instrument is honored as drawn on sufficient funds. 4. Payment of the indebtedness evidenced by this Note is secured by, among other things, that certain Deed of Trust ("Deed of Trust"), of even date herewith, and made by the Borrower, as trustor, to Chicago Title Company, as trustee, for the benefit of the CDC, as beneficiary, which encumbers real property located in the County of San Diego, State of California. as more particularly described therein and in the Loan Agreement, together with the improvements located thereon. 11:36797. I 5. Borrower may prepay all or any portion of the principal hereof and any accrued interest at any time without premium or penalty. 6. Except as provided herein, Borrower, for itself and its legal representatives, successors and assigns and any endorsers, guarantors and sureties of this Note expressly waives presentment, protest, demand, notice of dishonor, notice of nonpayment, notice of maturity, notice of protest, presentment for the purpose of accelerating maturity, and diligence in collection. 7. UPON TIIE OCCURRENCE OF AN EVENT OF DEFAULT UNDER THE LOAN AGREEMENT, THE UNPAID PRINCIPAL BALANCE OF THIS NOTE AND ANY ACCRUED BUT UNPAID INTEREST SHALL THEREUPON BE IMMEDIATELY DUE AND PAYABLE AT THE OPTION OF THE CDC HEREOF, WITHOUT FURTHER PRESENTMENT, DEMAND, PROTEST OR NOTICE OF PROTEST OF ANY KIND, ALL OF WHICH ARF. HEREBY EXPRESSLY WAIVED. 8. Borrower agrees to pay reasonable costs and expenses (including, without limitation, reasonable attorneys' fees) incurred by the CDC in connection with or related to any action taken to collect this Note, whether or not suit is brought. 9. No waiver or modification of any of the terms or provisions of this Note shall be valid or binding unless set forth in a writing signed by Borrower and CDC, and then only to the extent therein specifically set forth and no such waiver on one occasion shall be construed as a waiver on any other occasion. Borrower agrees and acluiowlcdgcs that CDC has not made any representations concerning CDC's willingness not to exercise, or to delay exercising, its rights to enforce this Note or to demand payment hereof No delay or omission on the part of CDC in exercising any right or remedy to enforce this Note shall operate as a waiver of such right or remedy under this Note. 10. This Note shall he governed, construed and interpreted in accordance with the internal laws of the State of California applicable to contracts made and to he performed in such state. 11. All notices and othcr communications to the parties of this Note should be delivered in accordance with the terms of the Loan Agreement. 12. Borrower agrees that the rights granted to CDC pursuant to this Note shall accrue to any endorsee of this Note who is lawfully in possession of this Note. [Signatures on next page] 2 1136797. I Execution Copy IN WITNESS WHEREOF, Borrower has executed and delivered this Note as of the date first referred to above. BORROWER: PLAZA CITY APARTMENTS, LP, a California limited partnership By: WP Plaza City, LLC, a California limited liability company By: By: Davis Sla'c aura Slajchert, TCTiber 1136797. l SI Execution Copy REPAYMENT GUARANTY This REPAYMENT GUARANTY (this "Guaranty") is dated for reference purposes only as of November 1, 2005, and is made by DAVIS SLAJCHERT, an individual. LAURA SLAJCIIERT, an individual, and WILLOW PARTNERS, LLC, a California limited liability company (jointly and severally, and collectively herein referred to as "Guarantor"), in favor of THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAI, CITY ("CI)(7"). RECITALS A. Reference is made to that certain Loan Agreement of even date herewith ("Loan Agreement") by and between CDC Plaza City Apartments, LP, a California limited partnership ("Borrower"), pursuant to which Borrower will borrow the sum of Two Million Seven IIundred Thousand Dollars ($2,700,000) from CDC ("Loan"). Capitalized terms used herein and not otherwise defined shall have the meanings provided therefor in the Loan Agreement. B. Guarantor has a financial interest in Borrower. C. CDC is not willing to make the Loan to Borrower unless Guarantor executes and delivers to CDC this Guaranty. NOW, THEREFORE, for and in consideration of the making of the Loan by CDC and as a material inducement to CDC to execute the Loan Documents, Guarantor hereby absolutely, presently, continually, unconditionally and irrevocably guarantees the rc-payment by Borrower of the amount funded to Borrower in the Initial Funding if Borrower does not commence construction of the Project on or before July 1, 2007 and complete the construction on or before December 31, 2008 (the "Guaranteed Obligations"), and further agrees as follows: I . Modification or Assignment of Loan Documents. It is specifically agreed and understood that the terms, covenants and conditions of the Loan Documents may he altered, affected, modified, amended, compromised, or otherwise changed by agreement between CDC and Borrower, or by course of conduct and Guarantor does guaranty and promise to perform all of the Guaranteed Obligations of Borrower under the Loan Documents as so altered, affected, modified, amended, compromised, or changed, and the Loan Documents may be assigned by or with the consent of CDC or any assignee of CDC without consent or notice to Guarantor and that this Guaranty shall thereupon and thereafter guaranty the performance of the Guaranteed Obligations as so changed, modified, amended, compromised, altered or assigned. 2. No Release. This Guaranty shall not be released, modified or affected by failure or delay on the part of CDC to enforce any of the rights or remedies of CDC under the Loan Documents, whether pursuant to the terms thereof or at law or in equity, or by any release of any person liable under the terms of the Loan Documents (including, without limitation, Borrower or any Guarantor). Page 1 113641.1 3. Duration of Guaranty. Guarantor's Liability under this Guaranty shall continue until the completion of the construction of the Project. Before the completion of construction of the Project, if all or any portion of the Guaranteed Obligations are paid or performed by Borrower, the obligations ol'Guarantor hereunder shall continue and remain in full force and effect in case all or any part of such payment(s) or performance(s) is avoided or recovered directly or indirectly from CDC as a preference, fraudulent transfer or otherwise. 4. Representations and Warrantees of Guarantor. Guarantor warrants and represents to CDC that Guarantor now has and will continue to have full and complete access to any and all information concerning the Loan Documents, the value of the assets owned or to'be acquired by Borrower, Borrower's financial status and its ability to pay and perform the obligations owed to CDC under the Loan Documents. Guarantor further warrants and represents that Guarantor has reviewed and approved copies of the Loan Documents (including all amendments, addenda or other modifications thereto) and is fully informed of the remedies CDC may pursue, with or without notice to Borrower, in the event of default under the Loan Documents. So long as any of the Guarantor's obligations hereunder remain unsatisfied or owing to CDC, Guarantor shall keep fully informed as to all aspects of Borrower's financial condition and the performance of said obligations. 5. Cure of Defaults. Guarantor hereby covenants and agrees with CDC that if a default shall at any time occur in the payment of any sums due under the Loan Documents by Borrower, or in the performance of any other obligation of Borrower under the Loan Documents, Guarantor shall and will forthwith upon demand pay such sums and any arrears thereof, to CDC in legal currency of the United States of America for payment of public and private debts, and take all other actions necessary to cure such default and perform such obligations of Borrower. 6. Guaranty of Payment and Performance. The liability of Guarantor under this Guaranty is a guaranty of payment and performance and not of collectahility, and is not conditioned or contingent upon the genuineness, validity, regularity or enforceability of the Loan Documents or the pursuit by CDC of any remedies which it now has or may hereafter have with respect thereto, at law, in equity or otherwise. 7. Waivers by Guarantor. Guarantor hereby waives and agrees not to assert or take advantage of to the extent permitted by law: (i) all notices to Guarantor, to Borrower, or to any other person, including, but not limited to, notices of the acceptance of this Guaranty or the creation, renewal, extension, assignment, modification or accrual of any of the obligations owcd to CDC under the Loan Documents and enforcement of any right or remedy with respect thereto, and notice of any other matters relating thereto; (ii) notice of acceptance of this Guaranty; (iii) demand of payment, presentation and protest; (iv) any right to require CDC to apply to any default any security deposit or other security it may hold under the Loan Documents; (v) any statute of limitations affecting Guarantor's liability hereunder or the enforcement thereof; (vi) any right or defense that may arise by reason of the incapacity, lack of authority, death or disability of Borrower or any other person; and (vii) all principles or provisions of law which conflict with the terms of this Guaranty. Guarantor further agrees that CDC may enforce this Guaranty upon the occurrence of a default under the Loan Documents, notwithstanding any dispute between CDC and Borrower with respect to the existence of said default or performance of the obligations under the Loan Documents or any counterclaim, set-off Page 2 11368411 or other claim which Borrower may allege against CDC with respect thereto. Moreover, Guarantor agrees that Guarantor's obligations shall not be affected by any circumstances which constitute a legal or equitable discharge of a Guarantor or surety. Guarantor agrees that CDC may enforce this Guaranty without the necessity of proceeding against Borrower or any other Guarantor, or the obligation to pursue any other remedy or to enforce any other right. 8. No Discharge of Guarantor. Guarantor agrees that nothing contained herein shall prevent CDC from suing on the Loan Documents or from exercising any rights available to it thereunder and that the exercise of any of the aforesaid rights shall not constitute a legal or equitable discharge of Guarantor. 9. No Right of Subrogation. Guarantor agrees that Guarantor shall have no right of subrogation against Borrower or any right of contribution against each other or any other Guarantor unless and until the Guaranteed Obligations have been satisfied in full. Guarantor further agrees that, to the extent the waiver of Guarantor' rights of subrogation and/or contribution as set forth herein is found by a court of competent jurisdiction to be void or voidable for any reason, any rights of subrogation Guarantor may have against Borrower shall be junior and subordinate to any rights CDC may have against Borrower, and any rights of contribution each Guarantor may have against any other Guarantor shall be junior and subordinate to any rights CDC may have against such other Guarantor. 10. Bankruptcy. The obligations of Guarantor under this Guaranty shall not he altered, limited or affected by any case, voluntary or involuntary, involving the bankruptcy, insolvency, receivership, reorganization, liquidation or arrangement of Borrower or any defense which Borrower may have by reason of order, decree or decision of any court or administrative body resulting from any such case. CDC shall have the sole right to accept or reject any plan on behalf of Guarantor proposed in such case and to take any other action which Guarantor would be entitled to take, including, without limitation, the decision to file or not file a claim. Guarantor acknowledges and agrees that any payment which accrues with respect to Borrower's obligations under the Loan Documents (including, without limitation, the payment of rent) alter the commencement of any such proceeding (or, if any such payment ceases to accrue by operation of law by reason of the commencement of such proceeding, such payment as would have accrued if said proceedings had not been commenced) shall he included in Guarantor's obligations hereunder because it is the intention of the parties that said obligations should be determined without regard to any rule or law or order which may relieve Borrower of any of its obligations under the Loan Documents. Guarantor hereby permits any trustee in bankruptcy, receiver, debtor -in -possession, assignee for the benefit of creditors or similar person to pay CDC, or allow the claim of CDC in respect of, any such payment accruing after the date on which such proceeding is commenced. Guarantor hereby assigns to CDC Guarantor's right to receive any payments from any trustee in bankruptcy, receiver, debtor -in -possession, assignee for the benefit of creditors or similar person by way of dividend, adequate protection payment or otherwise. 1 1. Notices. Any notice, statement, demand, consent, approval or other communication required or permitted to he given, rendered or made by either party to the other, pursuant to this Guaranty or pursuant to any applicable law or requirement of public authority, shall be in writing (whether or not so stated elsewhere in this Guaranty) and shall be delivered in accordance with the terms of the Loan Agreement. Page 3 It3684I 1 12. Authority. Guarantor represents and warrants to CDC as follows: 12.1 No consent of any other person, including, without limitation, any creditors of Guarantor, and no license, permit, approval or authorization of, exemption by, notice or report to, or registration, filing or declaration with, any governmental authority is required by Guarantor in connection with this Guaranty or the execution, delivery, performance, validity or enforceability of this Guaranty and all obligations required hereunder. This Guaranty has been duly executed and delivered by Guarantor, and constitutes the legally valid and binding obligation of Guarantor enforceable against Guarantor in accordance with its terms. 12.2 The execution, delivery and performance of this Guaranty will not violate any provision of any existing law or regulation binding on Guarantor, or any order, judgment, award or decree of any court, arbitrator or goverruncntal authority binding on Guarantor, or of any mortgage, indenture, Loan Documents, contract or other agreement, instrument or undertaking to which a Guarantor is a party or by which Guarantor or any of a Civarantor's assets may be bound, and will not result in, or require, the creation or imposition of any lien on any of Guarantor's property, assets or revenues pursuant to the provisions of any such mortgage, indenture, Loan Documents, contract, or other agreement, instrument or undertaking. 13. Financial Statements. Guarantor shall deliver to CDC upon request, but not more often than annually, a financial statement in form and with detail reasonably acceptable to CDC ("Financial Statement"). If Guarantor fails to deliver to CDC the Financial Statement within 10 days after CDC requests the sane (provided such request is not made more than once each year), then CDC may declare an Event of Default under the Loan Documents. The Financial Statement will contain a statement of Guarantor's current income, assets, and liabilities, and will be certified by Guarantor as accurate. 14. Successors and Assigns. This Guaranty shall he binding upon Guarantor, and Guarantor's heirs, representatives, administrators, executors, successors and assigns and shall inure to the benefit of and shall he enforceable by CDC, its successors, endorsees and assigns. Any married person liable under this Guaranty agrees that recourse may be had against community assets and against his separate property for the satisfaction of all obligations herein guaranteed. As used herein, the singular shall include the plural, and the masculine shall include the feminine and neuter and vice versa, if the context so requires. 15. Definition of Borrower. The term "Borrower" whenever used herein refers to and means the Borrower specifically named in the Loan Documents, any assignee of Borrower under the Loan Documents, and any successor to the interests of Borrower or such assignee. 16. Costs and Expenses. If any dispute or litigation arises with regard to a default by Borrower under the Loan Documents or a default by Guarantor under this Guaranty, or with regard to the enforcement or validity of the Loan Documents or this Guaranty, Guarantor shall be obligated to pay all charges, costs and expenses (including, without limitation, reasonable attorneys' fees) incurred by CDC in connection therewith, whether or not any action or proceeding is commenced regarding such dispute and whether or not such litigation is Page 4 113684►.1 prosecuted to judgment, including without limitation, any cost and expenses (including attorneys' tees) incurred in connection with the enforcement or collection of any judgment against Borrower or Guarantor (collectively, "Remedy Costs"). 17. Governing Law. This Guaranty shall be governed by and construed in accordance with the laws of the State of California. 18. Severability. Each provision of this Guaranty is intended to be severable. if any term or provision hereof is declared to he illegal or invalid for any reason whatsoever by a court of competent jurisdiction, such illegality or invalidity shall not affect the balance of the terms and provisions hereof which terms and provisions shall remain binding and enforceable. 19. Counterparts. This Guaranty may be executed in any number of counterparts each of which shall he deemed an original and all of which shall constitute one and the same Guaranty with the same effect as if all parties had signed the same signature page. Any signature page of this Guaranty may he detached from any counterpart of this Guaranty and re- attached to any other counterpart of this Guaranty identical in form hereto but having attached to it one or more additional signature pages. 20. No Waiver. No failure or delay on the part of CDC to exercise any power, right or privilege under this Guaranty shall impair any such power, right or privilege, or he construed to be a waiver of any default or any acquiescence therein, nor shall any single or partial exercise of such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege. 21. Entire Agreement. This Guaranty constitutes the entire agreement between Guarantor and the CDC with respect to the subject matter hereof. No provision of this Guaranty or right of CDC hereunder may be waived nor may Guarantor be released from any obligation hereunder except by a writing duly executed by an authorized officer, director or trustee of CDC. 22. Cumulative Rights and Remedies. The liability of Guarantor and all rights, powers and remedies of CDC hereunder and under any other agreement now or at any time hereafter in force between CDC and Guarantor relating to the Loan Documents shall be cumulative and not alternative and such rights, powers and remedies shall be in addition to all rights, powers and remedies given to CDC by law. Page 5 1136841.I 23. Capitalized 'Perms. Except as otherwise provided herein, all capitalized terms used herein shall have the same meanings given such terms in the Loan Agreement. IN WITNESS WHEREOF, Guarantor has executed this Guaranty as of the day and year first above written. Page 6 G. dwit Laura Slajchert WILLOW PARTNERS, LLC, a California limited liability company By: By: G. Dav M wing :Member Q.U_ BIZ cu aura Slajchert Managing Member 1116811.1 'RECORDING REQUESTED BY CHICAGO TITLE COMPANY AND WIZEN RECORDED MAIL TO NATIONAL CITY COMM. L)EV. COMMISSION 140 EAST 12TH STREET SUITE B NATIONAL CITY, CALIFORNIA 91950 ATTN: EXECUTIVE DIRECTOR L� _J Escrow No. - Order No. 58031007-7 557-250-36-00 6782 DOC # 2005-0957050 IIIIIIII III IIII IIIII IIIII IIIII IIIII IIIII IIIII IIIII IIIII IIIII IIII IIII NOV 03, 2005 11:07 AM i iFFICI.AL HEC:IIRDS SPN DIE60 COUNT`r" RECORDER'S OFFICE uRIG 1R',',J. SMITH COIJNFYRECORDER FF.ES• 000 WAYS: PAGES. E DA 1 I IIIQ Ills IN pill IIIII Hill MIN Hill IN IN IIII I111 dill 111 I11 2005-0957050 •31 ...,C MOW./ C .111, 1.1111C 1.A1 11..,,.,,,C11 .] V,a. DEED OF TRUST AND ASSIGNMENT OF RENTS BEGET 'E.f. DEL Gommono- heve!r"" THIS PAGE ADDED TO PROVIDE ADEQUATE SPACE FOR RECORDING INFORMATION (Additional recording fee applies) CPFR4 - 11/1319ebk 6783 Execution Copy When recorded mail to: National City Community Development Commission 140 East 12th Street, Suite B National City, California 91950 Attention: Executive Director DEED OF TRUST WITH ASSIGNMENT OF RENTS This DEED OF TRUST, made as of this 1 s' day of November 2005, between PLAZA CITY APARTMENTS LP, a California limited partnership, herein called TRUSTOR, CHICAGO TITLE COMPANY, herein called TRUSTEE, and THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY, herein called BENEFICIARY. Trustor irrevocably grants, transfers and assigns to Trustee in Trust, WITH POWER OF SALE that property in the City of National City, County of San Diego, , State of California, and more particularly described on Exhibit A attached hereto and incorporated herein by this reference (hereafter, the "Property"): Together with the rents, issues and profits thereof, subject, however, to the right, power and authority hereinafter given to and conferred upon Beneficiary to collect and apply such rents, issues and profits. FOR THE PURPOSE OF SECURING (1) payment of the sum of Two Million Seven Hundred Thousand Dollars ($2,700,000.00) or such amount that has been advanced to Trustor with interest thereon according to the terms of that certain Promissory Note and Loan Agreement, each of which is dated of even date herewith, executed by Trustor in favor of Beneficiary; (2) the performance of each agreement of Trustor incorporated by reference or contained herein or reciting it is so secured; (3) payment of additional sums and interest thereon which may hereafter be loaned to Trustor, or its successors or assigns, when evidenced by a promissory note or notes, or other agreements, reciting that they are secured by this Deed of Trust. A. To protect the security of this Deed of Trust, and with respect to the property above described, Trustor agrees: (1) To keep the Property in good condition and repair; to not take any actions that are reasonably likely to decrease the value of the Property, to complete or restore promptly and in good and workmanlike manner any building which may be constructed, damaged or destroyed thereon and to pay when due all claims for labor performed and materials furnished therefor; to comply with all laws affecting the Property or requiring any alterations or improvements to be made thereon; not to commit or permit waste thereof; not to commit, suffer or permit any act upon the Property in violation of the law; to cultivate, irrigate, fertilize, fumigate, prune and do all other acts which from the character or use of the Property may be reasonably necessary, the specific enumerations herein not excluding the general. (2) To provide, maintain and deliver to Beneficiary fire and other forms of insurance satisfactory to and with loss payable to Beneficiary. The amount collected under any fire or other insurance policy must be applied by Trustor to restore the Property or, at Trustor's option, delivered to Beneficiary to reduce any indebtedness secured hereby and in such order as beneficiary may determine. Such application or release shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. (3) To appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee; and to pay all costs and expenses, including cost of evidence of title and attorneys fees in a reasonable sum, in any action or proceeding in which Beneficiary or Trustee may appear, and in any suit brought by Beneficiary to foreclose this Deed of Trust. (4) To pay: at least ten days before delinquency all taxes and assessments affecting the Property, including assessments on appurtenant water stock or in connection with any applicable homeowner's association or any recorded Covenants. Conditions and Restrictions; when due, all • 6784 encumbrances, charges and liens, with interest, on the Property or any part thereof, which appear to be prior or superior hereto; all costs, fees and expenses of this Trust. If Trustor fails to make any payment or to do any act as herein provided, then Beneficiary or Trustee, but without obligation so to do and without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof, may: make or do the same in such manner and to such extent as either may deem necessary to protect the security hereof, Beneficiary or Trustee being authorized to enter upon the Property for such purposes; appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee; pay, purchase, contest or compromise any encumbrance, charge, or lien which in the judgment of either appears to be prior or superior hereto; and, in exercising any such powers, pay necessary expenses, employ counsel and pay his or her reasonable fees. (5) To pay immediately and without demand all sums so expended by Beneficiary or Trustee, with interest from date of expenditure at the amount allowed by law in effect at the date hereof, and to pay for any statement provided for by law in effect at the date hereof regarding the obligation secured hereby, any amount demanded by the Beneficiary not to exceed the maximum allowed by law at the time when said statement is demanded. B. It is mutually agreed: (1) That any award of damages in connection with any condemnation for public use of or injury to the Property or any part thereof is hereby assigned and shall be paid to Beneficiary who may apply or release such moneys received by him or her in the same manner and with the same effect as above provided for disposition or proceeds of fire or other insurance. (2) That by accepting payment of any sum secured hereby after its due date, Beneficiary does not waive his or her right either to require prompt payment when due of all other sums so secured or to declare default for failure so to pay. (3) That at any time or from time to time, without liability therefor and without notice, upon written request of Beneficiary and presentation of this Deed of Trust and said Promissory Note for endorsement, and without affecting the personal liability or any person for payment of the indebtedness secured hereby, Trustee may: reconvey or release from this Deed of Trust any part of the Property; consent to the making of any map or plat thereof; join in granting any easement thereon; or join in any extension agreement or any agreement subordinating the lien or charge hereof. (4) That upon written request of Beneficiary stating that all sums secured hereby have been paid, and upon surrender of this Deed of Trust and the Promissory Note to Trustee for cancellation and retention or other disposition as Trustee in its sole discretion may choose and upon payment of its fees, Trustee shall reconvey, without warranty, the property then held hereunder. The recitals in such reconveyance of any matters or facts shall be conclusive proof of the truthfulness thereof. The Grantee in such reconveyance may be described as "the person or persons legally entitled thereto." (5) That as additional security, Trustor hereby gives to and confers upon Beneficiary the right, power and authority, during the continuance of these Trusts, to collect the rents, issues and profits of the Property, reserving unto Trustor the right, prior to any default by Trustor in payment of any indebtedness secured hereby or in performance of any agreement hereunder, to collect and retain such rents, issues and profits as they become due and payable. Upon any such default, Beneficiary may at any time without notice, either in person, by agent, or by a receiver to be appointed by a court, and without regard to the adequacy of any security for the indebtedness hereby secured, enter upon and take possession of the Property or any part thereof, in his or her own name sue for or otherwise collect such rents, issues, and profits, including those past due and unpaid, and apply the same, Tess costs and expenses of operation and collection, including reasonable attorney's fees, upon any indebtedness secured hereby, and in such order as Beneficiary may determine. The entering upon and taking possession of the Property, the collection of such rents, issues and profits and the application thereof as aforesaid, shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. (6) That upon default by Trustor in payment of any indebtedness secured hereby or in performance of any agreement hereunder, Beneficiary may declare all sums secured hereby immediately due and payable by delivery to Trustee of written declaration of default and demand for sale and of written 1116814 I 2 6 785 notice of default and of election to cause to be sold the Property, which notice Trustee shall cause to be filed for record. Beneficiary also shall deposit with Trustee this Deed of Trust, said Promissory Note, and all documents evidencing expenditures secured hereby. After the lapse of such time as may then be required by law following the recordation of said notice of default, and notice of sale having been given as then required by law, Trustee without demand on Trustor, shall sell the Property at the time and place fixed by it in said notice of sale, at public auction to the highest bidder for cash in lawful money of the United States, payable at time of sale. Trustee may postpone sale of all or any portion of the Property by public announcement at such time and place of sale, and from time to time thereafter may postpone such sale by public announcement at the time fixed by the preceding postponement. Trustee shall deliver to such purchaser its deed conveying the Property or portion thereof so sold, but without any convenant or warranty, express or implied. The recitals in such deed of any matters or facts shall be conclusive proof of the truthfulness thereof. Any person, including Trustor, Trustee, or Beneficiary as hereinafter defined, may purchase at such sale. After deducting all costs, fees and expenses of Trustee and of this Trust, including cost of evidence of title in connection with sale, Trustee shall apply the proceeds of sale to payment of: all sums expended under the terms hereof, not then repaid, with accrued interest at the amount allowed by law in effect at the date hereof; all other sums then secured hereby; and the remainder, if any, to the person or persons legally entitled thereto. (7) If Trustor sells, contracts to sell, gives an option to purchase, conveys, leases with an option to purchase, or alienates the Property, or any interest in it, or refinances or secures any loan after the date of this Deed of Trust secured by a lien against the Property, whether voluntarily or involuntarily; or if Borrower changes or permits to be changed the character or use of the Property; or if title to such Property becomes subject to any new monetary lien or charge, voluntary or involuntary, contractual or statutory, without Trustor's prior written consent and not discharged within a reasonable period, then Trustor, at Trustor's option, may, without prior notice, declare all sums owed under the Promissory Note and/or 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. (8) Beneficiary, or any successor in ownership of any indebtedness secured hereby, may from time to time, by instrument in writing, substitute a successor of successors to any Trustee named herein or acting hereunder, which instrument, executed by the Beneficiary and duly acknowledged and recorded in the office of the recorder of the county or counties where the Property is situated, shall be conclusive proof of proper substitution of such successor Trustee or Trustees, who shall, without conveyance from the Trustee predecessor, succeed to all its title, estate, rights, powers and duties. Said instrument must contain the name of the original Trustor, Trustee and Beneficiary hereunder, the book and page where this Deed of Trust is recorded and the name and address of the new Trustee. (9) That this Deed of Trust applies to, inures to the benefit of, and binds all parties hereto, their heirs, legatees, devisees, administrators, executors, successors, and assigns. The term Beneficiary shall mean the owner and holder , including pledgees, of the Promissory Note secured hereby, whether or not named as Beneficiary herein. In this Deed of Trust, whenever the context so requires, the masculine gender includes the feminine and/or the neuter, and the singular number includes the plural. (10) The Trustee accepts this Deed of Trust, when it is duly executed and acknowledged, and is made a public record as provided by law. Trustee is not obliged to notify any party hereto of pending sale under any other deed of trust or of any action or proceeding in which Trustor, Beneficiary or Trustee shall be a party unless brought by Trustee. (11) This Deed of Trust is subordinate to the lien of the Deed of Trust recorded by SA Affordable Housing, LLC, a Delaware limited liability company ("SunAmerica"), which holds a first priority lien on the Property. Beneficiary agrees to provide notice to SunAmerica if Beneficiary determines that Trustor is in default under this Deed of Trust, the Promissory Note, or the Loan Agreement, and will provide SunAmerica reasonable time and an opportunity, which may be done in SunAmerica's sole discretion, to cure any such default. I130{44.1 3 • • 6786 The undersigned Trustor requests that a copy of any notice of default and any notice of sale hereunder be mailed to the following address: Plaza City Apartments, LP, c/o Willow Partners, LLC, 310 N. Westlake Boulevard, Suite 250, Westlake Village, CA 91362. Attention: Davis Slajchert. Executed as of the date first written above. STATE OF CALIFORNIA COUNTY ON2n� PLAZA CITY APARTMENTS, LP, a California limited partnership By: WP Plaza City, LLC, a California limited liability company Its: General Partner ) SS. On V\bV before me, oorPA..k \.c\N‘C��`1n Notary Public in and for said state, personally appeared G. Davis Slajchert, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. WITNESS my hand and official seal. Notary Public in and for sa''dd, tate Alba tti ANSA- I COMM. a 1520168 z Notary Public • California Ventura County Meow. E rues Oct.18, 2008 t136314.I 4 EXHIBIT A 6787 c4 PARCEL D OF PARCEL MAP NO. 3114, FILED IN TIF OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY ON OCTOBER 15, 1974, AS FILE NO. 74-275627 OF OFFICIAL RECORDS, IN THE OFFICE OF NATIONAL CITY, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA.