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HomeMy WebLinkAboutC-1978RECORDEDIT- ILED IN OFFICIAL RECORD RECORDER'S OFFICE LOS ANGELES COUN1Y CALIFORNIA 8:21 AM OCT 02 2003 L E A D S H E E T Assessor's Identification Number (AIN) To be completed by Examiner OR Title Company in black ink. I OT TO BE DUPLICATED D.T.T Number of Parcels Shown 0 f r RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: The Arcadia Redevelopment Agency 240 West Huntington Drive Post Office Box 60021 Arcadia, California 91006 -6021 Attn: Executive Director FIRST AMENDMENT TO ;mpt -Govt. Code Section 6103 (Space above for Recorder's Use) HERITAGE PARK OWNER PARTICIPATION AGREEMENT/ LOAN AGREEMENT between THE ARCADIA REDEVELOPMENT AGENCY a public body, corporate and politic and ARCADIA HERITAGE PARK, L.P. a California limited partnership [Dated as of July 1, 2003 for reference purposes only] RVPUB\KCV \655659 XA " r,, to ARTICLE 1. PARTIES AND EFFECTIVE DATE 03 2930.22 a. 1.1 Parties to First Amendment. This First Amendment to Heritage Park Owner Participation Agreement - Loan Agreement ( "First Amendment ") is entered into by and between (i) the Arcadia Redevelopment Agency, a public body, corporate and politic ( "Agency "), and (ii) Arcadia Heritage Park, L.P., a California limited partnership ( "Owner "). This First Amendment is dated as of July, 2003 for reference purposes only. 1.2 Effective Date. This First Amendment shall not become effective or operative until the date ( "Effective Date ") that: (i) this First Amendment has been approved by Owner and executed by Owner's authorized representatives, and (ii) this First Amendment has been executed by Agency's Executive Director. ARTICLE 2. RECITALS 2.1 Agency and Owner are parties to that certain agreement entitled "Heritage Park Owner Participation Agreement - Loan Agreement" ( "Original OPA "), dated January 21, 2003 for reference purposes only. All initially capitalized terms used, but not otherwise defined, in this First Amendment shall have the meanings ascribed to them in the Original OPA. 2.2 Pursuant to the Original OPA, Owner agreed to, among other things, develop, operate and maintain a fifty -four (54) unit affordable housing project in consideration for receiving certain financial assistance from Agency. 2.3 Owner has requested that various terms of the Original OPA be modified. 2.4 Pursuant to the terms and conditions of this Agreement, Agency and Owner have agreed to amend their respective rights and obligations under the Original OPA. ARTICLE 3. TERMS 3.1 Effect Upon Original OPA. Unless otherwise expressly amended by this First Amendment, the Original OPA remains in full force and effect according to its terms. From and after the Effective Date of this First Amendment, wherever the term "Agreement" appears in the Original OPA, it shall be understood to mean the Original OPA as amended by this First Amendment. 3.2 Representation and Warranties Regarding Defaults; Ratification. Owner represents and warrants to Agency that Agency is not, as of the Effective Date of this First Amendment, in material default under the Original OPA and that there have been no events which, with the passage of time, giving of notice or both, would constitute material events of default under the Original OPA. RVPUB\KCV \655659 -1- 2930122 Agency represents and warrants to Owner that Owner is not, as of the Effective Date of this First Amendment, in material default under the Original OPA and that there have been no events which, with the passage of time, giving of notice or both, would constitute material events of default under the Original OPA. Agency and Owner each ratify and reaffirm the Original OPA and each and every one of their respective obligations under the Original OPA. Agency and Owner further agree and stipulate that, other than this First Amendment, there have been no oral or written amendments, modifications or alterations to the Original OPA. 3.3 Amendment to Section 2.2 of the Original OPA. Section 2.2 of the Original OPA is deleted in its entirety and replaced with the following: "2.2 The Property and the Project. The Owner is presently in a conditional escrow to acquire the Property and has expressed an interest in participating in the redevelopment of the Project Area by completing the Project on the Property. The Owner has submitted to the Agency a redevelopment proposal for the Project and estimates the costs of undertaking the completion of the Project to be approximately Eight Million Seven Hundred Twenty Thousand Dollars ($8,720,000). The Owner is requesting the Agency's assistance with the undertaking the completion of the Project in the form of an interest bearing loan. The Owner desires to enter into an Owner Participation Agreement / Loan Agreement with the Agency pursuant to which the Owner would carry out construction of the Project and satisfy certain covenants and conditions set forth therein, and the Agency would provide financial assistance to the Owner for a portion of the actual costs of completing the Project in the form of a secured loan to the Owner for an amount not to exceed One Million Eight Hundred Thousand Dollars ($1,800,000)." 3.4 Deletion of Section 3.6 of the Original OPA. The text of Section 3.6 of the Original OPA is deleted in its entirety and replaced with the following: "[Reserved - no text]" 3.5 Amendment to Section 4.4 of the Original OPA. Section 4.4 of the Original OPA is deleted in its entirety and replaced with the following: RVPUB\KCV \655659 -2- "4.4 Agency's Approval of Contractor. Agency hereby approves Coury Enterprises, Inc. as the general contractor ( "Contractor ") responsible for the construction of the Project based on: (i) the Contractor's fitness and experience to construct the Project; (ii) Contractor's references and referrals for past projects; (iii) Contractor's licenses, permits and qualifications; and (iv) Contractor's ability to construct the Project in a manner acceptable to the Agency. The Agency's approval of Contractor is for internal purposes only and by doing so, the Agency is not passing judgment on the fitness of Contract or the quality of work performed by Contractor nor may the Owner rely on the Agency's approvals for such. Neither the Owner nor any person or entity not a signatory to this Agreement shall have any rights or causes of action against any party to this Agreement as a result of any Agency approval hereunder. In the event that Owner causes any other general contractor assume any responsibility for the construction of the Project, Owner shall obtain written approval of the Agency for such general contractor." 3.6 Amendment to Section 4.12 of the Original OPA. Section 4.12 of the Original OPA is deleted in its entirety and replaced with the following: "4.12 Prohibition Against Transfer. Prior to the issuance of a Certificate of Completion, the Owner may not assign or attempt to assign this Agreement or any right or obligation herein, or make any total or partial sale, transfer, lease, conveyance or assignment of the Project or Property, or any portion thereof, without prior written approval of the Agency, which may be given or withheld in the Agency's reasonable discretion. In determining whether to approve of such a partial sale, transfer, conveyance or assignment of the Project or the Property, or any portion thereof, the Agency shall evaluate: (i) the financial ability of the proposed transferee to own and operate the Project, or portion so transferred, and to meet the Owner's obligations under this Agreement; and (ii) the fitness and experience of the proposed transferee to own and operate the Project or portion so transferred. The foregoing prohibition shall not apply to: (i) any assignment of any general partnership interest in Owner to AIG SunAmerica Inc. or any affiliate of AIG SunAmerica Inc., or (ii) any assignment of the limited partnership interest in Owner. Any such assignment, sale, transfer or conveyance shall not relieve Owner of liability for the timely and faithful performance of any assigned obligation, absent an express agreement between Agency, Owner and the third party transferee to the contrary. RVPUB\KCV \655659 -3- 03 2930122 No unpermitted sale, transfer, conveyance or assignment of this Agreement or all or any portion of the Project or the Property shall be deemed to relieve the Owner or any other party from any obligation under this Agreement, nor shall any such unpermitted sale, transfer, conveyance or assignment transfer any rights in this Agreement, the Project or the Property." 3.7 Amendment to Section 4.13 of the Original OPA. Section 4.13 of the Original OPA is deleted in its entirety and replaced with the following: "4.13 Permitted Encumbrances. The Owner shall not, at any time prior to the recordation of a Certificate of Completion, grant or permit any mortgage, deed of trust, sale and leaseback or any other form of conveyance or encumbrance in connection with the financing or development of the Property ( "Lien ") other than a Permitted Encumbrance, as hereinafter defined. For purposes hereof, a "Permitted Encumbrance" means either (a) the Senior Indebtedness (as defined in that certain Subordination and Standstill Agreement dated as of July 1, 2003 by and among Arcadia Heritage Park, LY a California limited partnership, BNY Western Trust Company, a banking corporation organized under the laws of the State of California, AIG SunAmerica Inc., a Delaware corporation, and the Arcadia Redevelopment Agency, a public body, corporate and politic ("Subordination Agreement ")), or (b) any Lien which secures financing: (i) provided to Owner by a nationally or state chartered bank or any finance subsidiary thereof, an insurance company (or affiliate thereof) rated at least B+ XII by A.M. Best; (ii) providing sufficient funds to permit the completion of the Project; (iii) collateralized by the Property; (iv) with respect to which the Agency receives written notice prior to the recordation of any documentation recording such Lien, (v) with respect to which the lender agrees to give the Agency written notice, concurrently with notice to the Owner, of any default under any ofthe financing documents pertaining to such Lien and the right to cure such default within any cure period afforded Owner by such lender or by law; and (vi) with respect to which the lender provides the Agency the right to purchase the lender's interest upon payment of all sums owed by the Owner to such lender under the financing documents, which right may not expire any sooner than three (3) business days prior to sale of the Property pursuant to power of sale or judgment in foreclosure. RVPUB\KCV \655659 03 2930122 Nothing in this Agreement shall be deemed to obligate the holder of any Permitted Encumbrance to construct the Project or to guarantee such completion. Nothing in this Agreement shall be deemed to permit or authorize any such holder to develop the Property or construct the Project thereon except in strict compliance with this Agreement. Any right, title and interest in the Projector the Property, or any portion thereof, acquired by any means by any holder of a Lien, or by such holder's assignees or successors, shall be subject to the terms and provisions of this Agreement and the Exhibits attached hereto." 3.8 Amendment to Section 5.3 of the Original OPA. Section 5.3 of the Original OPA is deleted in its entirety and replaced with the following: "5.3 Notice and Opportunity to Cure. If either Party to this Agreement believes that the other Party has failed to perform any obligation of that Party in accordance with the terms of this Agreement ( "Default "), the Party alleging the Default shall provide written notice ( "Default Notice ") to the other Party, setting forth the nature of the alleged Default. In the event of Owner's Default, the Agency shall also provide a Default Notice to AIG SunAmerica Inc., a Delaware corporation, One SunAmerica Center, Century City, Los Angeles, California 90067, Attention: Michael L. Fowler. Unless otherwise provided by a specific term of this Agreement or the Loan Documents, the Party claimed to be in Default shall have ten (10) business days after its receipt of the Default Notice to completely cure such Default or, if such Default cannot reasonably be cured within such ten (10) business day period, to commence the cure of such Default within the ten (10) business day period and diligently prosecute the cure to completion thereafter. In the event of Owner's Default, AIG SunAmerica Inc., a Delaware corporation, One SunAmerica Center, Century City, Los Angeles, California 90067, Attention: Michael L. Fowler, shall also have (10) business days after its receipt of the Default Notice to completely cure such Default or, if such Default cannot reasonably be cured within such ten (10) business day period, to commence the cure of such Default within the ten (10) business day period and diligently prosecute the cure to completion thereafter. If a Default is not cured, as provided in the preceding paragraph, the Party alleging the Default may exercise such rights and remedies as provided for in this Agreement or the Loan Documents upon an Event of Default." RVPUB\KCV \655659 -5- 43 2931122 3.9 Amendment to Exhibit D of the Original OPA. Exhibit D (Residual Receipts Promissory Note) of the Original OPA is deleted in its entirety and replaced with Exhibit A attached hereto and incorporated herein by reference. 3.10 Amendment to Exhibit E of the Original OPA. Exhibit E (Deed of Trust and Assignment of Rents) of the Original OPA is deleted in its entirety and replaced with Exhibit B attached hereto and incorporated herein by reference. 3.11 Amendment to Section 2.15.2 of Exhibit G of the Original OPA. Section 2.15.2 of Exhibit G (Regulatory Agreement and Declaration of Restrictive Covenants) of the Original OPA is deleted in its entirety and replaced and replaced with the following: "2.15.2 of Management Agent If Agency determines in its reasonable judgment that the Project is not being operated or managed in accordance with all the requirements and standards of this Regulatory Agreement or the Related Agreements or other applicable laws and ordinances, then the Agency may deliver written notice to the Owner setting forth with reasonable detail the nature of the deficiencies. Within ten (10) business days following the Owner's receipt of such notice, the Agency and the Owner shall meet and confer in good faith concerning the nature of the Agency's alleged deficiencies and the actions which the Agency believes necessary to cure such deficiencies. Within sixty (60) calendar days from the conclusion of such discussions, the Owner shall cure such deficiencies and shall ensure that such deficiencies do not recur. If such deficiencies are not cured within said sixty (60) calendar day period, or if such deficiencies recur at a future date, the Agency may, at its option, require the Owner to replace the Management Agent with another Management Agent selected by the Owner in its reasonable discretion, provided, that the Owner shall ensure that such replacement Management Agent has the necessary skills, experience and financial ability to operate and manage the Project in accordance with all of the requirements and standards of this Regulatory Agreement, the Related Agreements and all other applicable laws and ordinances and that AIG SunAmerica Inc. shall have approved in writing the replacement Management Agent, which approval shall not be unreasonably withheld, delayed or conditioned. Any contract for the operation or management of the Project entered into by the Owner shall provide that such contract shall be terminated upon thirty (60) calendar days' notice, with or without cause. The Owner's failure to remove and replace a Management Agent in accordance with the provisions of this Section 2.15 shall constitute an event of default under this Regulatory Agreement and the Related Agreements." RVPUB\KCV \655659 -6' 03 2930122 3.12 Counterparts. This First Amendment may be executed in duplicate originals, each of which is deemed to be an original, but when taken together shall constitute but one and the same instrument. [Signatures on Following Pages] RVPUS\KCV \655659 -7- 2930122 SIGNATURE PAGE TO FIRST AMENDMENT TO HERITAGE PARK OWNER PARTICIPATION AGREEMENT/LOAN AGREEMENT ATTEST: B ,° AD cy Secretary APPROVED AS TO LEGAL FORM: RVPUB\KCV \655659 "AGENCY" THE ARCADIA REDEVELOPMENT AGENCY a public body, corporate and politic i William Kelly Executive Director -g- 03 2930122 RFCT RFCT Rr KRTR(:RR T T P SIGNATURE PAGE TO FIRST AMENDMENT TO HERITAGE PARK OWNER PARTICIPATION AGREEMENT/LOAN AGREEMENT • JI ' ARCADIA HERITAGE PARK, LP a California limited partnership By: ASL ARCADIA, INC. a California corporation Its: Development General Partner Roger Davila Vice - President By: HERITAGE COMMUNITY HOUSING, INC. a California non - profit corporation Its: Managing General Partner C igley ive Vi By: AMERICAN SENIOR LIVING, INC. a California corporation Its: Developer Roger Davila Vice - President 293012 RVPUB\KCV \655659 -9- 03 STATE OF CALIFORNIA COUNTY OF LOS ANGELES On July 9 , 2003, before me, the undersigned notary public, personally appeared William Kelly personally known to me OR 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. WITNESS my hand and official seal. By: 1 Signature of Notary Public CAPACITY CLAIMED BY SIGNER: Individual(s) Officer(s) Partner(s) Attorney -in -Fact Trustee(s) Subscribing Witness Guardian/Conservator Other SIGNER IS REPRESENTING: NAME OF PERSON(S) OR ENTITY(IES) s Commhftn #f 1410608 .Nokuy PuM - CaftnVo Los ArgWft County Comm. bow MW9, 2007 RVPUB\KCV \655659 -10- 2 9 3 0 12 21 STATE OF CALIFORNIA } I ICAPACITY CLAIMED BY SIGNER: COUNTY OF LOS ANGELES On , 2003, before me, the undersigned notary public, personally appeared , personally known to me OR 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. WITNESS my hand and official seal. Signature of Notary Public RVPUB\KCV \655659 -11- Individual(s) Partner(s) Attorney -in -Fact Trustee(s) — Subscribing Witness Guardian/Conservator — Other SIGNER IS REPRESENTING: NAME OF PERSON(S) OR ENTITY(IES) � r STATE OF CALIFORNIA COUNTY OF LOS ANGELES On , 2003, before me, the undersigned notary public, personally appeared , personally known to me OR 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. WITNESS my hand and official seal. Signature of Notary Public CAPACITY CLAIMED BY SIGNER: — Individual(s) — Corporate Officer(s) — Partner(s) — Attorney -in -Fact Trustee(s) Subscribing Witness Guardian/Conservator — Other SIGNER IS REPRESENTING: NAME OF PERSON(S) OR ENTITY(IES) RVPUB\ICCV \655659 -12' 302 i EXHIBIT A TO FIRST AMENDMENT TO HERITAGE PARK OWNER PARTICIPATION AGREEMENT/LOAN AGREEMENT Residual Receipts Promissory Note [Attached Behind This Page] RVPUB\KCV\655659 03 2930122 RESIDUAL RECEIPTS PROMISSORY NOTE $1,800,000 , 2003 Arcadia, California FOR VALUE RECEIVED, the undersigned, ARCADIA HERITAGE PARK, L.P., a California limited partnership ( "Maker "), promises to pay to THE ARCADIA REDEVELOPMENT AGENCY, a public body, corporate and politic ( "Holder "), or order at Holder's office at 240 West Huntington Drive, Arcadia, California 91006 -6021, or such other place as Holder may designate in writing, the principal sum of One Million Eight Hundred Thousand Dollars ($1,800,000) together with interest as provided herein. 1. Related Agreements. The rights and obligations of Maker and Holder under this Residual Receipts Promissory Note ( "Note ") are made with respect to that certain Heritage Park Owner Participation Agreement/Loan Agreement dated January 21, 2003 ( "Agreement "); that certain Deed of Trust and Assignment of Rents dated , 2003 ( "Trust Deed "); and that certain Regulatory Agreement dated January 21, 2003 ( "Regulatory Agreement "). The Agreement, Trust Deed and Regulatory Agreement shall hereinafter be collectively referred to as the "Related Agreements." All initially capitalized terms used and not otherwise defined in this Note shall have the meanings given to them in the Related Agreements. 2. Repayment of Note. Maker will pay to Holder the principal amount of this Note, and all accrued interest ( "Payment Amount ") as follows: 2.1 From the date of this Note until paid in full, the unpaid principal balance of this Note will bear simple interest computed at the rate of four and one -half percent (4.5 %) per annum, compounded annually. 2.2 Interest shall be computed on the basis of a year of three hundred sixty (360) days and actual days elapsed and shall be payable on the unpaid principal balance hereof outstanding annually as set forth in Section 2.3 until the Payment Amount is paid in full. 2.3 The amounts due under this Note shall be repaid on an annual basis from fifty percent (50 %) of the Project's Residual Receipts. "Residual Receipts" shall mean all money and income from the Project ( "Gross Receipts ") remaining annually after the payment of all normal and necessary expenses of operation of the Project, including but not limited to the following expenses: RVPUB\KCV \655659 (i) The normally amortized principal and interest payments due on mortgages which are senior to the Note which have been approved by the Holder; (ii) The fee deferred by the developer of the Project, payable pursuant to the terms of the Partnership Agreement, and approved by the Owner and the tax credit investor for the services of developer related to the A -1 03 2930122 development of the Project, including the preparation of plans, tests, studies and supervision of construction related to the Project, in an amount not to exceed fifteen percent (15 %) of eligible basis as defined in Section 42 of the Internal Revenue Service Code; (iii) Insurance on the Project; (iv) Ad valorem taxes and assessment payments; (v) Property management fees, expenses and costs in an amount not to exceed five percent (5 %) ofthe Gross Receipts. The Maker shall fund all costs of the Project's social programs as well as the costs of compliance monitoring and reporting from such project management fees and no other deduction from the Gross Receipts shall be allowed for the same; (vi) Limited partnership asset management fees not to exceed Five Thousand Dollars ($5,000) per year, subject to annual adjustments equal to the lesser of. (a) the increase or decrease in the Consumer Price Index for All Urban Consumers (CPI -U) (Los Angeles), (base year 2002 = 100), published by the United States Department of Labor, Bureau of Labor Statistics, but in no event shall operation of the above result in an increase or decrease in excess of three percent (3 %) in any one year; (vii) General partner administrative fees, not to exceed Ten Thousand Dollars ($10,000) per year subject to annual adjustments equal to the lesser of (a) the increase or decrease in the Consumer Price Index for All Urban Consumers (CPI -U) (Los Angeles), (base year 2002 =100), published by the United States Department of Labor, Bureau of Labor Statistics, but in no event shall operation of the above result in an increase or decrease in excess of three percent (3 %) in any one year; (viii) Annual reserves for repair and replacement ofthe improvements in the Project not more than the greater of (a) Two Hundred Dollars ($200) per Unit, or (b) such amount per Unit as may be required by a tax credit investor or holder of senior financing; (ix) Auditing and accounting fees for standard, customary and non - forensic audits required by any tax credit investor, holder of senior financing, the County of Los Angeles, or the City; (x) Any fees payable to AIG SunAmerica Inc., a Delaware corporation, or any of its affiliates pursuant to that certain Amended and Restated Agreement of Limited Partnership of the Maker, dated as of July 1, 2003 (the "Partnership Agreement ") (including but not limited to the SAI Facility Fee and the SAI Construction Phase Credit Facility Fee); and (xi) Debt service on any loan made by any partner of the Maker to cover operating deficits pursuant to the Partnership Agreement. Operating expenses shall be considered "normal and necessary" if incurred generally for similarly structured, financed and restricted rental properties operated by similar entities. Non -cash RVPUB\KCV \655659 A -2 03 2930122-' expenditures, including without implied limitation, depreciation expenses, shall not be considered normal and necessary operating expenses of the Project and shall not be deducted from the Gross Receipts for the purposes of determining Residual Receipts. Any and all capital repairs and replacement costs shall first be funded from the applicable reserve account and shall be expensed only if the reserve account is completely depleted. The amount of the annual payment to the Holder shall be an amount equal to fifty percent (50 %) of the Residual Receipts multiplied by a fraction, the numerator of which is the original principal amount of this Note and the denominator of which is the original principal amount of this Note plus the original principal amount of the County of Los Angeles HOME Funds ( "Holder's Share "). Payment of the Holder's Share of the Residual Receipts produced from the Project shall be made by the Maker to the Holder annually on or before July 15` of each year. Payment shall be applied first to accrued interest and thereafter to principal. Maker shall annually provide the Holder with an accounting acceptable to the Holder, documenting the calculation of Residual Receipts for the previous calendar year ending December 31. This accounting shall be made on or before July 15, together with the payment of Holder's Share of the Residual Receipts. 2.4 For the purpose of this Note, the "Note Term" shall be the period beginning as of the disbursement of the Agency's Loan and ending on the thirtieth (30 ') anniversary ( "Maturity Date ") of the date that the first certificate of occupancy for the Project is issued by the City. On the Maturity Date, any outstanding balances due pursuant to this Note shall be due and payable from any and all funds available to Maker provided, however, that in the event of any refinancing of all or any portion of the senior liens and encumbrances prior to the Maturity Date, one hundred percent (100 %) of the net proceeds thereof shall be used as necessary, up to and including one hundred percent (100 %) of said proceeds, to prepay the principal and accrued interest of this Note 2.5 The Payment Amount may be prepaid, without penalty, in whole or in part, at any time and from time to time without penalty or premium. The foregoing notwithstanding, payment or prepayment shall not relieve the Maker of the covenants, conditions and obligations set forth in this Note or the Related Agreements. 2.6 Maker's obligations under this Note and the Related Agreements are absolute and not contingent upon Maker's completion of the Project, Maker's ability to locate tenants to occupy the Project on the Property, or any other condition. 2.7 All payments due hereunder are payable in lawful money of the United States of America in same day funds. Any payments made shall be applied first to accrued interest and thereafter to reduction of principal. 2.8 In the event Maker fails to make the required payment of principal and /or interest under this Note within ten (10) business days after such payment becomes due and payable, a late charge of five percent (5 %) of the overdue payment of principal and /or interest (or of principal only if by the laws of the State of California a late charge may not be charged on overdue interest) may be charged by Holder, unless applicable law requires a lesser such charge, in which event the maximum rate permitted by such law may be charged by Holder. The parties agree that this late RVPUB\KCV \655659 A'3 03 2930122 i charge represents a reasonable sum considering all of the circumstances existing on the date of this Note and represents a fair and reasonable estimate of the costs and damages that Holder will incur by reason of the late payment. The parties further agree that proof of actual damages would be costly or inconvenient. Acceptance of any late charge shall not constitute a waiver of the default with respect to the overdue amount, and shall not prevent Holder from exercising any of the other rights and remedies available to Holder. The foregoing shall not be construed as obligating the Holder to accept any payment after its due date. 3. Security. This Note is secured by the Trust Deed. 4. Non - Recourse. Except as otherwise provided in this Section 4, the Maker shall have no personal liability under this Note or the Related Agreements for the repayment of the indebtedness evidenced by this Note ( "Indebtedness ") or for the performance of any other obligations of the Maker under the Related Agreements, and the Holder's only recourse for the satisfaction of the Indebtedness and the performance of such obligations shall be the Holder's exercise of its rights and remedies with respect to the Property under the Related Agreements and any other collateral held by the Holder as security for the Indebtedness. 4.1 The Maker shall be personally liable to the Holder for the repayment of a portion of the Indebtedness equal to any loss or damage actually suffered by the Holder as a result of (i) failure of the Maker to pay to the Holder any rents, insurance proceeds or condemnation proceeds to the extent required by the Deed of Trust following an Event of Default; or (ii) fraud or written material misrepresentation by the Maker or any officer, director, partner, member or employee of the Maker in connection with the application for or creation of the Indebtedness or any request for any action or consent by the Holder, except that the Maker will not be personally liable to the extent that the Maker lacks the legal right to direct the disbursement of such sums because of a bankruptcy, receivership or similar judicial proceeding. 4.2 To the extent that the Maker has personal liability under this Section 4, the Holder may exercise its rights against the Maker personally without regard to whether the Holder has exercised any rights against the Property or any other security, or pursued any rights against any guarantor, or pursued any other rights available to the Holder under this Note or the Related Agreements or applicable law. 5. Default. An "Event of Default" shall be deemed to occur upon any material breach of an obligation under either this Note or the Related Agreements, if the breach is not cured within ten (10) business days after Maker receives initial notice of such breach. Furthermore, any event defined as a "Default" or "Event of Default" under the Related Agreements shall constitute an Event of Default under this Note. The foregoing notwithstanding, upon the occurrence of any of the following, an Event of Default shall be deemed to have occurred and the Holder may, at Holder's option, without prior notice and without regard to whether the Maturity Date has occurred, declare the unpaid principal balance and all accrued interest due under this Note to be immediately due and payable, and the same shall immediately become due and payable: 5.1 Maker fails to make any payment under this Note when due or within ten (10) business days following written notice of such failure from Holder; or RVPUB\KCV \655659 A -4 03 2930122 5.2 Maker (i) becomes insolvent or unable to pay Maker's debts generally as they €` mature, (ii) makes a general assignment for the benefit of creditors, (iii) admits in writing Maker's inability to pay Maker's debts generally as they mature, (iv) files or has filed against it a petition in bankruptcy or a petition or answer seeking a reorganization, arrangement with creditors or other similar relief under the Federal bankruptcy laws or under any other applicable law of the United States of America or any state thereof, or (v) consents to the appointment of a trustee or receiver for it or for a substantial part of Maker's property; or 5.3 Any order, judgment or decree is entered appointing, without Maker's consent, a trustee or receiver for it or for a substantial part of Maker's property that is not removed within sixty (60) business days from such entry; or 5.4 A judgment against Maker for the payment of money totaling in excess of Two Hundred Fifty Thousand Dollars ($250,000) is outstanding for a period of sixty (60) business days without a stay of execution thereof, or 5.5 Maker fails to materially comply with any obligation required of it pursuant to this Note, the Related Agreements, or any other agreement between Maker and Holder. Notwithstanding the above, in the event of an actual or deemed entry of an order for relief with respect to Maker under the Federal Bankruptcy Code, this Note and all interest and other amounts due hereon shall automatically become and be due and payable, without presentment, demand, protest or any notice of any kind, all of which are hereby expressly waived by Maker. The Holder may exercise Holder's option to accelerate after any Event of Default, regardless of any prior forbearance. 6. Indemnification. Maker agrees to indemnify Holder to hold Holder and Holder's successors and assigns harmless from and against any and all claims, demands, costs, liabilities and obligations of any kind or nature arising out of any default hereunder, including, without limitation, all costs of collection, including actual attorneys' and expert witness fees and all costs of suit, in the event the unpaid principal sum of this Note and /or any interest thereon is not paid when due. 7. Amendments and Modifications. This Note may be amended or modified only in writing signed by Maker and Holder. 8. Severability. The unenforceability or invalidity of any provision or provisions of this Note as to any persons or circumstances shall not render that provision or those provisions unenforceable or invalid as to any other person or circumstances, and all provisions hereof, in all other respects, shall remain valid and enforceable. 9. Successors and Assigns. This Note shall bind Maker and Maker's -successors and assigns and the benefits hereof shall inure to Holder and Holder's successors and assigns. 10. Governing Law. The validity, interpretation and performance of this Note shall be governed by and construed in accordance with the laws of the State of California, without regard to RVPUB\KCV \655659 A -5 03 2930,22 7 conflicts of laws principles. 11. Time of the Essence. Time is of the essence of this Note. 12. Joint and Several Obligation. Maker and all other persons liable or to become liable for all or part of this indebtedness, jointly and severally waive demand, presentment for payment, notice of nonpayment, protest and notice of protest hereon, and agree to pay, in the Event of Default hereunder, all costs of collection, including attorneys fees', whether or not suit is commenced. 13. Jurisdiction. The Holder and the Maker acknowledge and stipulate that the obligation hereunder was entered into in the City of Arcadia, Los Angeles County, California. Any legal action or proceeding to interpret, enforce, or which in any way arises out of this Note shall be instituted and prosecuted in the appropriate court in Los Angeles County, California. Maker expressly waives, to the maximum legal extent, any legal right it may have to have such action or proceeding transferred to or prosecuted in any other court or jurisdiction. 14. Attorneys' Fees. Maker agrees that if any amounts due under this Note are not paid when due, Maker shall pay in addition, all costs and expenses of collection and reasonable attorneys' fees paid or incurred in connection with the collection or enforcement of this Note, whether or not a suit is filed. 15. Subordination. The indebtedness evidenced by this Note is and shall be subordinate in right of payment to the prior payment in full of the Senior Indebtedness (as defined in that certain Subordination and Standstill Agreement dated as of July 1, 2003 by and among Arcadia Heritage Park, L.P., a California limited partnership, BNY Western Trust Company, a banking corporation organized under the laws of the State of California, AIG SunAmerica Inc., a Delaware corporation, and the Arcadia Redevelopment Agency, a public body, corporate and politic ("Subordination Agreement ")). The Trust Deed securing this Note is and shall be subject and subordinate in all respects to the liens, terms, covenants and conditions of the Loan Documents (as defined in the Subordination Agreement). The rights and remedies of the Holder and each subsequent holder ofthis Note under the Trust Deed securing this Note are subject to the restrictions and limitations set forth in the Subordination Agreement. Each subsequent holder of this Note shall be deemed, by virtue of such holder's acquisition of the Note, to have agreed to perform and observe all of the terms, covenants and conditions to be performed or observed by the Subordinate Lender under the Subordination Agreement. [Signatures on Following Page] RVPUB\KCV \655659 "MAKER" ARCADIA HERITAGE PARK, LP a California limited partnership By: ASL ARCADIA, INC. a California corporation Its: Development General Partner By: Roger Davila Vice - President By: HERITAGE COMMUNITY HOUSING, INC. a California non - profit corporation Its: Managing General Partner By: John Bigley Executive Vice - President By: AMERICAN SENIOR LIVING, INC. a California corporation Its: Developer By: Roger Davila Vice - President RVPUB\KCV \655659 A -7 EXHIBIT B TO FIRST AMENDMENT TO HERITAGE PARK OWNER PARTICIPATION AGREEMENT/LOAN AGREEMENT Deed of Trust and Assignment of Rents [Attached Behind This Page] t RVPUB\KCV \655659 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: The Arcadia Redevelopment Agency 240 West Huntington Drive Post Office Box 60021 Arcadia, California 91006 -6021 Attn: Executive Director (Fee Exempt -Govt. Code '61031 (Space above for Recorder's Use) HERITAGE PARK OWNER PARTICIPATION AGREEMENT / LOAN AGREEMENT DEED OF TRUST AND ASSIGNMENT OF RENTS THIS DEED OF TRUST AND ASSIGNMENT OF RENTS ( "Deed of Trust "), dated , 2003, is made by ARCADIA HERITAGE PARK, L.P., a California limited partnership, whose address is 1740 East Garry Avenue, Suite 105, Santa Ana, California ( "Trustor "), in favor of , a ( "Trustee "), and THE ARCADIA REDEVELOPMENT AGENCY, a public body, corporate and politic, whose address is 240 West Huntington Drive, Post Office Box 60021, Arcadia, California 91006 -6021 ( "Beneficiary"), and is executed to secure, that certain Promissory Note of even date herewith ( "Note "), in the principal amount of One Million Eight Hundred Thousand Dollars ($1,800,000), executed by Trustor in favor of Beneficiary. This Deed of Trust is made with respect to the Note; that certain Heritage Park Owner Participation Agreement/Loan Agreement dated January 21, 2003 ( "Agreement "); and that certain Regulatory Agreement dated January 21, 2003 ( "Regulatory Agreement "). All initially capitalized terms used and not otherwise defined in this Deed of Trust shall have the meanings given to them in the Agreement. 1. Grant in Trust and Security Agreement. For valuable consideration, Trustor irrevocably grants, transfers and assigns to Trustee, in trust, with power of sale, for the benefit of Beneficiary, the following property ( "Trust Estate "): 1.1 the real property described in Exhibit A attached to this Deed of Trust and incorporated in this Deed of Trust by reference ( "Land "); 1.2 all buildings, structures and other improvements now or in the future located or to be constructed on the Land ( "Improvements "); and 1.3 all tenements, hereditaments, appurtenances, privileges and other rights and interests now or in the future benefiting or otherwise relating to the Land or RVPUMKCV \655659 �A 3 2930122 the Improvements, including easements, rights -of -way, development rights, mineral rights, water rights and water stock ( "Appurtenances," and together with the Land and the Improvements, "Real Property "). 2. Obligations Secured. This Deed of Trust is given for the purpose of securing payment and performance of the following ( "Secured Obligations "): 2.1 all present and future indebtedness evidenced by the Note, including principal, interest and all other amounts payable under the terms of the Note; 3. as follows: 2.2 all present and future obligations of Trustor to Beneficiary under this Deed of Trust; and 2.3 all additional present and future obligations of Trustor to Beneficiary under the Agreement, Regulatory Agreement, or any other agreement or instrument (whether existing now or in the future) which states that it is, or such obligations are, secured by this Deed of Trust; in each case as such indebtedness and other obligations may from time to time be supplemented, modified, amended, renewed and extended, whether evidenced by new or additional documents or resulting in a change in the interest rate on any indebtedness or otherwise. Trustor's Covenants. To protect the security of this Deed of Trust, Trustor agrees 3.1 Payment and Performance of Secured Obligations; Purchase Agreement. Trustor shall pay and perform all Secured Obligations in accordance with the respective terms of such Secured Obligations, whether evidenced by or arising under this Deed of Trust or the Note. 3.2 Maintenance of Trust Estate. Unless Beneficiary otherwise consents in writing, Trustor shall: 3.2.1 keep the Trust Estate in good condition and repair, and promptly and in a good and workmanlike manner (and with new materials of good quality) complete any Improvements to be constructed on the Land, repair or restore any part of the Real Property that may be injured, damaged or destroyed, and repair, restore or replace any goods that may be injured, damaged, destroyed or lost or that may be or become obsolete, defective or worn out (except that Trustor shall not be required to repair, restore or replace any such goods of insignificant value which are not reasonably necessary or appropriate to the efficient operation of the Real Property), and in each case pay when due all valid claims for labor, service, equipment and material and any other costs incurred in connection with any such action; RVPUB\KCV \655659 rte', 3.2.2 not remove, demolish or materially alter any Improvements; 3.2.3 not commit or permit any waste of any part of the Trust Estate; 3.2.4 comply in all material respects with all laws and other requirements, and not commit or permit any material violation of any laws or other requirements, which affect any part of the Trust Estate or require any alterations or improvements to be made to any part of the Trust Estate; 3.2.5 take such action from time to time as may be reasonably necessary or appropriate, or as Beneficiary may reasonably require, to protect the physical security of the Trust Estate; 3.2.6 except as otherwise permitted by the Agreement, not part with possession of or abandon any part of the Trust Estate or cause or permit any interest in any part of the Trust Estate to be sold, transferred, leased, encumbered, released, relinquished, terminated or otherwise disposed of (whether voluntarily, by operation of law or otherwise); and 3.2.7 take all other action which may be reasonably necessary or appropriate to preserve, maintain and protect the Trust Estate, including the enforcement or performance of any rights or obligations of Trustor or any conditions with respect to any Rights. 3.3 Assignment of Rents, Issues and Profits. Trustor hereby assigns and transfers absolutely to the Beneficiary all of the rents from the Units and hereby gives to and confers upon the Beneficiary the right, power and authority to collect such rents at such times and upon the occurrence of such events as provided herein. Trustor irrevocably appoints the Beneficiary, its true and lawful attorney -in -fact, at its option, at any time and from time to time, to demand, receive and enforce payment, to give receipts, releases and satisfactions, and to sue, in its name or in the name of Trustor, for all such rents, and apply the same to the obligations secured hereby; provided, however, that Trustor shall have the right to collect such rents (but no more than one (1) month in advance unless the written approval has first been obtained), and to retain and enjoy the same, so long as an Event of Default shall not have occurred hereunder or, if occurred, be cured as provided hereunder. The assignment of rents in this Section 3.3 is intended to be an absolute assignment from Trustor to the Beneficiary and not merely the passing of a security interest. The foregoing power of attorney is coupled with an interest and cannot be revoked. 3.4 Insurance, Condemnation and Damage Claims. Trustor shall maintain the commercial, general liability and automobile insurance policies covering the Improvements and Real Property in the amounts set forth below: (a) $1,000,000 for any one person; and RVPUMKCV \655659 B -3 03 2930122 (b) $3,000,000 for any one occurrence; and (c) $1,000,000 for any property damage. The policies shall be "occurrence," not "claims made," policies and shall be primary and non- contributing to any insurance that the Beneficiary may elect to obtain. Such policies shall contain a full waiver of subrogation clause. The policies shall be issued by a carrier licensed to do business in California, with a then - current Best's rating of A: VIII or better. Said policies shall provide that they shall not be canceled or reduced in types of coverage or amount of coverage without at least thirty (3 0) business days' prior written notice to the Beneficiary and that such reduction or cancellation shall become effective until at least twenty (20) business days after receipt by the Beneficiary of the written notice thereof. All proceeds of any claim, demand, award, settlement or other payment arising or resulting from or otherwise relating to any loss or destruction of, injury or damage to, trespass on or taking, condemnation (or conveyance in lieu of condemnation) or public use of any ofthe Property ( "Damage Claim ") are assigned and shall be payable and delivered to Beneficiary (any such proceeds of any Damage Claim being referred to in this Deed of Trust as "Damage Proceeds "). Trustor shall take all action reasonably necessary or required by Beneficiary in order to protect Trustor's and Beneficiary's rights and interests with respect to any Damage Claim, including the commencement of, appearance in and prosecution of any appropriate action or other proceeding, and Beneficiary may in its discretion participate in any such action or proceeding at the expense of Trustor. So long as no Event of Default, as defined in Section 3.9 of this Deed of Trust, has occurred and is continuing, Trustor may settle, compromise or adjust any Damage Claim with the prior written consent of Beneficiary (which shall not be unreasonably withheld). Upon the occurrence and during the continuance of any Event of Default, Beneficiary shall have the sole right to settle, compromise or adjust any Damage Claim in such manner as Beneficiary may determine, and for this purpose Beneficiary may, in its own name or in the name of Trustor, take such action as Beneficiary deems appropriate to realize on any such Damage Claim. In either case, all Damage Proceeds payable in connection with any such Damage Claim shall be delivered directly to Beneficiary as provided in the preceding paragraph. Any Damage Proceeds received by Beneficiary may be applied by Beneficiary in payment of the Secured Obligations in such order and manner as Beneficiary may determine, provided that so long as no Event of Default has occurred and is continuing, Beneficiary shall release such Damage Proceeds to Trustor for the Restoration of the Trust Estate in the Beneficiary's sole discretion, except that Beneficiary shall not be required to release such Damage Proceeds (and may apply such Damage Proceeds to the Secured Obligations as set forth above) to the extent that such Damage Proceeds relate to any condemnation, seizure or other appropriation by any governmental agency of all or any portion of the Trust Estate (including Damage Proceeds payable in lieu of any such action), or if Beneficiary has reasonably determined that the security of this Deed of Trust has been impaired, or will be impaired upon the release of Damage Proceeds to Trustor. 3.5 Liens and Taxes. Subject to the right of Trustor to contest any such payments in accordance with the terms of the Agreement, (i) Trustor shall pay, prior to delinquency, RVPUB\KCV \655659 B -4 3 293012Z all taxes, if any, which are or may become a lien affecting any part of the Trust Estate (including assessments on appurtenant water stock), and (ii) Trustor shall pay and perform when due all other obligations secured by or constituting a lien affecting any part of the Trust Estate. 3.6 Actions. Trustor shall appear in and defend any claim or any action or other proceeding purporting to affect title or other interests relating to any part of the Trust Estate, the security of this Deed of Trust or the rights or powers of Beneficiary or Trustee, and give Beneficiary prompt written notice of any such claim, action or proceeding. Beneficiary and Trustee may, at the expense of Trustor, appear in and defend any such claim, action or proceeding and any claim, action or other proceeding asserted or brought against Beneficiary or Trustee in connection with or relating to any part of the Trust Estate or this Deed of Trust. 3.7 Action by Beneficiary or Trustee. If Trustor fails to perform any of its obligations under this Deed of Trust, Beneficiary or Trustee may, but without any obligation to do so and without notice to or demand upon Trustor and without releasing Trustor from any obligations under this Deed of Trust, and at the expense of Trustor: (a) perform such obligations in such manner and to such extent and make such payments and take such other action as either may deem necessary in order to protect the security of this Deed of Trust, Beneficiary or Trustee being authorized to enter upon the Property for such purposes; (b) appear in and defend any claim or any action or other proceeding purporting to affect title or other interests relating to any part of the Trust Estate, the security of this Deed of Trust or the rights or powers ofBeneficiary of Trustee; and (c) pay, purchase, contest or compromise any lien or right of others which in the reasonable judgment of either is or appears to be or may for any reason become prior or superior to this Deed of Trust. If Beneficiary or Trustee shall elect to pay any such lien or right of others or any taxes which are or may become a lien affecting any part of the Trust Estate or make any other payments to protect the security of this Deed of Trust, Beneficiary or Trustee may do so without inquiring into the validity or enforceability of any apparent or threatened lien, right of others or taxes, and may pay any such taxes in reliance on information from the appropriate taxing authority or public office without further inquiry. 3.8 Obligations With Respect to Trust Estate. Neither Beneficiary nor Trustee shall be under any obligation to preserve, maintain or protect the Trust Estate or any of Trustor's rights or interests in the Trust Estate, or make or give any presentments, demands for performance, protests, notices of nonperformance, protest or dishonor or other notices of any kind in connection with any Rights, or take any other action with respect to any other matters relating to the Trust Estate. Beneficiary and Trustee do not assume and shall have no liability for, and shall not be obligated to perform, any of Trustor's obligations with respect to any Rights or any other matters relating to the Trust Estate, and nothing contained in this Deed of Trust shall release Trustor from any such obligations. 3.9 Default. An "Event of Default" shall be deemed to occur upon any material breach of an obligation under any of the following: (i) this Deed of Trust; (ii) the Note; (iii) the Agreement; or (iv) the Regulatory Agreement, if the breach is not cured within ten (10) business days after Trustor receives initial notice of such breach. Furthermore, any event defined as a "Default" or "Event of Default" under the Note, the Agreement or the Regulatory Agreement shall constitute an Event of Default under this Deed of Trust. RVPUB\KCV \655659 B -5 0 2930122 Upon the occurrence of any Event of Default: (i) Trustor shall be in default under this Deed of Trust, and all Secured Obligations shall immediately become due and payable without further notice to Trustor; (ii) upon demand by Beneficiary, Trustor shall pay to Beneficiary, in addition to all other payments specifically required under the Note, in monthly installments, at the times and in the amounts required by Beneficiary from time to time, sums which when cumulated will be sufficient to pay one month prior to the time the same become delinquent, all Taxes which are or may become a Lien affecting the Trust Estate and the premiums for any policies of insurance to be obtained hereunder (all such payments to be held in a cash collateral account as additional security for the Secured Obligations over which Beneficiary shall have sole and exclusive control and right of withdrawal); and (iii) Beneficiary may, without notice to or demand upon Trustor, which are expressly waived by Trustor (except for notices or demands otherwise required by applicable Laws to the extent not effectively waived by Trustor and any notices or demands specified below), and without releasing Trustor from any of its Obligations, exercise any one or more of the following Remedies as Beneficiary may determine: 3.9.1 Beneficiary may, either directly or through an agent or court- appointed receiver, and without regard to the adequacy of any security for the Secured Obligations: (i) enter, take possession of, manage, operate, protect, preserve and maintain, and exercise any other rights of an owner of the Trust Estate, and use any other properties or facilities of Trustor relating to the Trust Estate, all without payment of rent or other compensation to Trustor; (ii) enter into such contracts and take such other action as Beneficiary deems appropriate to complete all or any part of any construction which may have commenced on the Land, subject to such modifications and other changes in the plan of development as Beneficiary may deem appropriate; (iii) make, cancel, enforce or modify leases, obtain and evict tenants, fix or modify rents and, in its own name or in the name of Trustor, otherwise conduct any business of Trustor in relation to the Trust Estate and deal with Trustor's creditors, debtors, tenants, agents and employees and any other Persons having any relationship with Trustor in relation to the Trust Estate, and amend any contracts between them, in any manner Beneficiary may determine; (iv) endorse, in the name of Trustor, all checks, drafts and other evidences of payment relating to the Trust Estate, and receive, open and dispose of all mail addressed to Trustor and notify the postal authorities to change the address for delivery of such mail to such address as Beneficiary may designate; and RVPUB\KCV \655659 B -6 03 293012 (v) take such other action as Beneficiary deems appropriate to protect the security of this Deed of Trust. Beneficiary's agent or court- appointed receiver shall hold all monies and proceeds, including, without limitation, proceeds from the sale of the Trust Estate or any portion thereof, for the benefit of the Trustor and shall not disburse the monies or proceeds for the satisfaction of the Secured Obligations without the prior written consent of Beneficiary. The Beneficiary's agent or court- appointed receiver may, but without any obligation to do so and without notice to or demand upon Trustor and without releasing Trustor from any Obligations under this Deed of Trust, and at the expense of Trustor, follow the written instruction of Beneficiary under this Section 3.9. 3.9.2 Beneficiary may execute and deliver to Trustee written declaration of default and demand for sale and written notice of default and of election to cause all or any part of the Trust Estate to be sold, which notice Trustee shall cause to be filed for record; and after the lapse of such time as may then be required by law following the recordation of such notice of default, and notice of sale having been given as then required by law, Trustee, without demand on Trustor, shall sell such Trust Estate at the time and place fixed by it in such notice of sale, either as a whole or in separate parcels and in such order as Beneficiary may direct ( Trustor waiving any right to direct the order of sale), at public auction to the highest bidder for cash in lawful money of the United States (or cash equivalents acceptable to Trustee to the extent permitted by applicable law), payable at the time of sale. Trustee may postpone the sale of all or any part of the Trust Estate by public announcement at such time and place of sale, and from time to time after any such postponement may postpone such sale by public announcement at the time fixed by the preceding postponement. Trustee shall deliver to the purchaser at such sale its deed conveying the Trust Estate so sold, but without any covenant or warranty, express or implied, and the recitals in such deed of any matters or facts shall be conclusive proof of the truthfulness thereof. Any person, including Trustee or Beneficiary, may purchase at such sale, and any bid by Beneficiary may be, in whole or in part, in the form of cancellation of all or any part of the Secured Obligations. Any such sale shall be free and clear of any interest of Trustor and any lease, encumbrance or other matter affecting the Trust Estate so sold which is subject or subordinate to this Deed of Trust, except that any such sale shall not result in the termination of any such lease, (i) if and to the extent otherwise provided in any estoppel or other agreement executed by the tenant and Beneficiary (or executed by the tenant in favor of, and accepted by, Beneficiary), or (ii) if the purchaser at such sale gives written notice to the tenant, within thirty (30) business days after date of sale, that the lease will continue in effect. 3.9.3 Beneficiary may proceed to protect, exercise and enforce any and all other Remedies provided under the Note, the Agreement, the Regulatory Agreement, this Deed of Trust or by applicable Laws. All proceeds of collection, sale or other liquidation ofthe Trust Estate shall be applied first to all costs, fees, expenses and other amounts (including interest) payable by Trustor under this Deed of Trust and to all other Secured Obligations not otherwise repaid in such order and manner as Beneficiary may determine, and the remainder, if any, to the Person or Persons legally entitled thereto. RVPUB\KCV \655659 B -7 ("� ��rqy �/ �J ° Each of the Remedies provided in this Deed of Trust is cumulative and not exclusive of, and shall not prejudice, any other Remedy provided in this Deed of Trust or by applicable Laws. Each Remedy may be exercised from time to time as often as deemed necessary by Trustee and Beneficiary, and in such order and manner as Beneficiary may determine. This Deed of Trust is independent of any other security for the Secured Obligations, and upon the occurrence of an Event of Default, Trustee or Beneficiary may proceed in the enforcement of this Deed of Trust independently of any other Remedy that Trustee or Beneficiary may at any time hold with respect to the Trust Estate or the Secured Obligations or any other security. Trustor, for itself and for any other Person claiming by or through Trustor, waives, to the fullest extent permitted by applicable Laws, all rights to require a marshaling of assets by Trustee or Beneficiary or to require Trustee or Beneficiary to first resort to any particular portion of the Trust Estate or any other security (whether such portion shall have been retained or conveyed by Trustor) before resorting to any other portion, and all rights of redemption, stay and appraisal. Upon the occurrence of a transfer of the Trust Estate or any part of it or interest in it is transferred, sold, or alienated ( "Event of Default "), Trustor shall be in default under this Deed of Trust and the Note shall become due and payable without further notice to Trustor at the option of the Beneficiary. 3.10 Costs, Fees and Expenses. Trustor shall pay, on demand, all costs, fees, expenses, advances, charges, losses and liabilities of Trustee and Beneficiary under or in connection with this Deed of Trust or the enforcement of, or the exercise of any Remedy or any other action taken by Trustee or Beneficiary under, this Deed of Trust or the collection of the Secured Obligations, in each case including: (a) reconveyance and foreclosure fees of Trustee; (b) costs and expenses of Beneficiary or Trustee or any receiver appointed under this Deed of Trust in connection with the operation, maintenance, management, protection, preservation, collection, sale or other liquidation of the Trust Estate or foreclosure of this Deed of Trust; (c) advances made by Beneficiary to complete or partially construct all or any part of any construction which may have commenced on the Land or otherwise to protect the security of this Deed of Trust; (d) cost of evidence of title; and (e) the reasonable fees and disbursements of Trustee's and Beneficiary's legal counsel and other out - of- pocket expenses, and the reasonable charges of Beneficiary's internal legal counsel. 3.11 Late Payments. By accepting payment of any part ofthe Secured Obligations after its due date, Beneficiary does not waive its right either to require prompt payment when due of all other Secured Obligations or to declare a default for failure to so pay. 3.12 Action by Trustee. At any time and from time to time upon written request of Beneficiary and presentation of this Deed of Trust for endorsement, and without affecting the personal liability of any Person for payment of the Secured Obligations or the security of this Deed of Trust for the full amount of the Secured Obligations on all property remaining subject to this Deed of Trust, Trustee may, without notice and without liability for such action, and notwithstanding the absence of any payment on the Secured Obligations or any other consideration: (a) reconvey all or any part of the Trust Estate, (b) consent to the making and recording, or either, of any map or plat of the Land; (c) join in granting any easement affecting the Land; or (d) join in or consent to any extension agreement or any agreement subordinating the Lien of this Deed of Trust. Trustee is not RVPUB\KCV \655659 B -g 2930122 obligated to notify Trustor or Beneficiary of any pending sale under any other deed of trust or of any action or other proceeding in which Trustor, Beneficiary or Trustee is a party unless brought by Trustee. 3.13 Reconveyance. Upon written request of Beneficiary and surrender of this Deed of Trust and the Note to Trustee for cancellation or endorsement, and upon payment of its fees and charges, Trustee shall reconvey, without warranty, all or any part of the property then subject to this Deed of Trust. Any reconveyance, whether full or partial, may be made in terms to "the person or persons legally entitled thereto," and the recitals in such reconveyance of any matters or facts shall be conclusive proof of the truthfulness thereof. Beneficiary shall not be required to cause any property to be released from this Deed of Trust until final payment and performance in full of all Secured Obligations and termination of all obligations of Beneficiary under or in connection with the Note or until the Secured Obligations are forgiven. 3.14 Substitution of Trustee. Beneficiary may from time to time, by instrument in writing, substitute a successor or successors to any Trustee named in or acting under this Deed of Trust, which instrument, when executed by Beneficiary and duly acknowledged and recorded in the office of the recorder of the county or counties where the Land is situated, shall be conclusive proof of proper substitution of such successor Trustee or Trustees who shall, without conveyance from the predecessor Trustee, succeed to all of its title, estate, rights, powers and duties. Such instrument must contain the name of the original Trustor, Trustee and Beneficiary, the book and page where this Deed of Trust is recorded (or the date of recording and instrument number) and the name and address of the new Trustee. 3.15 Attorney -in -Fact. Trustor appoints Beneficiary as Trustor's attorney -in -fact, with full authority in the place of Trustor and in the name of Trustor or Beneficiary, to take such action and execute such Documents as Beneficiary may reasonably deem necessary or advisable in connection with the exercise of any Remedies or any other action taken by Beneficiary or Trustee under this Deed of Trust. 3.16 Successors and Assigns. This Deed of Trust applies to and shall be binding on and inure to the benefit of all parties to this Deed of Trust and their respective successors and assigns. 3.17 Acceptance. Notice of acceptance of this Deed of Trust by Beneficiary or Trustee is waived by Trustor. Trustee accepts this Deed of Trust when this Deed of Trust, duly executed and acknowledged, is made a public record as provided by law. 3.18 Beneficiary's Statements. For any statement regarding the Secured Obligations, Beneficiary may charge the maximum amount permitted by law at the time of the request for such statement. 3.19 Governing Law. This Deed of Trust shall be governed by, and construed and enforced in accordance with, the Laws of California. RVPUB\KCV \655659 B -9 03 21930122 3.20 Request for Notice. Trustor requests that a copy of any notice of default and a copy of any notice of sale be mailed to Trustor at Trustor's address set forth above. [Signatures on Following Pages] RVPUMKCV \655659 MIN 11-P 1 Rll STOR ARCADIA HERITAGE PARK, LP a California limited partnership By: ASL ARCADIA, INC. a California corporation Its: Development General Partner By: Roger Davila Vice - President By: HERITAGE COMMUNITY HOUSING, INC. a California non - profit corporation Its: Managing General Partner By: John Bigley Executive Vice - President By: AMERICAN SENIOR LIVING, INC. a California corporation Its: Developer By: Roger Davila Vice - President [3 RVPUB\KCV \655659 B-11 2 CALIFORNIA ALL - PURPOSE ACKNOWLEDGMENT State of California -? ss. County of On 7k IV —0 3 before me, Aud i e y f os'c , Date Name and 1,tle of Officer (e.g., "Jane Doe, Notary Public ") e - , I l ,.-- i — n I . personally appeared �. AUDREY }`2trESE MESLA Commission # 1326095 Notary Public - Califamia :z San Francisco County My Comm. Expires W 20, 2005 Name(s) of Signers) ❑ ersonally known to me proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) 4/are subscribed to the within instrument and acknowledged to me that hteilb r /they executed the same in tTs/tter /their authorized capacity(ies), and that by +ri5�/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. .4 , " lure of Notary Public OPTIONAL Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Document: Document Date: Number of Pages: Signer(s) Other Than Named Above: Capacity(ies) Claimed by Signer Signer's Name: ❑ Individual Top of thumb here ❑ Corporate Officer — Title(s): ❑ Partner — ❑ Limited ❑ General ❑ Attorney -in -Fact ❑ Trustee ❑ Guardian or Conservator ❑ Other: Signer Is Representing: © 1999 National Notary Association - 9350 De Soto Ave., P.O. Box 2402 - Chatsworth, CA 913132402 - www.nationalnotary.org Prod. No. 5907 Reorder: Call Toll -Free 1- 800 - 876 -6827