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2001-868423 DO0 # 001-0868423 ,, NOU 29, 2001 B:5.5 Atqi OFFIglAL REgORD8 ~COR~ ~qu~s'r o~ 8AN DIE~ ~OUNTY REOORDER'8 OFFICE First American Title 7 8 7 1 GREGORY J. SMITH, COUNTY REP, ORDER RECORDING REQUESTED BY ~Y: 2 CITY OF ENCINITAS 200~-0Bs842a KI~ COMMUNITY DEVELOPMENT DEPARTMENT 505 S. Vulcan Ave. Encinitas, CA 92024 ~ ~- ~-~/~ _~/) This document is exempt from the _~~/P77~:~ payment of a recording fee pursuant to Government Code Section 27383. (Space above this line for Reeorder'$ use) DEED OF TRUST WITH ASSIGNMENT OF RENTS This Deed of Trust is made this~day of A~Ct'~.,~, 2001, by Encinitas Ranch Apartments, LLC, a California Limited Liability Corporation (the "Borrower), whose ~ 'business address is 10679 Westview Parkway, San Diego, CA 92126~ to First American I"-. Title Company (the "Trustee"), whose business address is 411 Ivy Street, San Diego ' California 92101 in favor of the City of Encinitas, ("City"), whose principal office is at 505 S. V. ulcan Ave., Encinitas, California 92024. BORROWER HEREBY IRREVOCABLY GRANTS, TRANSFERS AND ASSIGNS to Trustee in trust, with power of sale and right of entry and possession, all of Borrower's rights, title and interest now held or hereafter acquired in and to the following: (a) All of that certain real property located in the City of Encinitas, State of California, described in Exhibit A (attached) which Exhibit is incorporated in this Deed of Trust by this reference; and (b) all buildings, and improvements now or hereafter erected thereon, and all appurtenances, easements, and articles of property now or hereafter affixed to, placed upon or used in connection with the property and owned by Borrower or in which Borrower has an interest, together with all additions to, substitutions for, changes in or replacements of the whole or any part of said articles of property (all of which real and personal property are sometimes referred to as the ("Property"); all of which are hereby pledged and assigned, transferred, and set over unto Trustee, and for purposes of this Deed of Trust declared to be part of the realty. 2. BORROWER HEREBY ABSOLUTELY, UNCONDITIONALLY AND IRREVOCABLY ASSIGNS to the City all rents, royalties, issues, accounts and profits of or relating to the Property and all of Borrower's interest under all leases, subleases, rental agreements and other contracts and occupancy agreements relating to the use and possession of the property, for the purposes and upon the terms and conditions CITY OF ENCINITAS/ENCINITAS RANCH APARTMENTS, LLC - DEED OF TRUST Page 1 7872 hereinafter set forth. This assignment is absolute, primary and direct and is not intended to be a separate or secondary pledge, or other form of additional security, and no further act or step is or shall be required of City to perfect this assignment. Notwithstanding the foregoing, the City confers upon the Borrower a license to collect and retain the rents, issues and profits of the Property as they become due and payable until an Event of Default (hereinafter defined), upon the occurrence of which said license shall be automatically revoked. This assignment shall not impose upon City any duty to cause the Property to produce rents nor shall the City be deemed to be a mortgagee in possession by reason thereof for any purpose. 3. THE ABOVE GRANT, TRANSFER, AND ASSIGNMENTS ARE FOR THE PURPOSE OF SECURING: (a) Payment of the indebtedness of the Borrower evidenced by a promissory note of even date herewith, in the face amount of Six-Hundred Thousand Dollars ($600,000) (the "Note"), together with interest on such indebtedness according to the terms of such Note, and any and all amendments, modifications, extensions or renewals of the Note and the indebtedness and all other sums becoming due and payable to the City, or Trustee, pursuant to the terms of this Deed of Trust; (b) Payment of such additional indebtedness, when evidenced by a promissory note or notes reciting the same to be secured by this Deed of Trust, together with interest, as the City may advance to Borrower, or its successor in interest, from time to time and payment or performance of such other obligations as the then record owner of the Property may agree to pay or perform when evidenced by a promissory note or other instrument or agreement reciting that it is secured hereby; and (c) Performance and observance of all of the terms, covenants and conditions to be performed or observed by Borrower under any note, Deed of Trust, or other document or agreement relating to the project as described herein and in the HOME Development Agreement which are incorporated herein and made part of this Deed of Trust. 4. TO PROTECT THE SECURITY OF THIS DEED OF TRUST, BORROWER AGREES: 4.1 Maintenance of the Property. (a) To keep the Property in a decent, safe, sanitary, and tenantable condition and repair and permit no waste thereof; (b) not to construct any buildings and improvements on the Property, other than the buildings and improvements now or hereinafter located on the Property and which are listed in the Development Agreement; (¢) to rebuild promptly any buildings or improvements on the Property that may become damaged or be destroyed while subject to the lien of this Deed of Trust; (d) to comply with all applicable laws or governmental regulations affecting the Property or requiring any alteration or improvement thereof, and not to suffer or permit any violations of any such laws, ordinances or governmental CITY OF ENCINITAS/ENCINITAS RANCH APARTMENTS, LLC - DEED OF TRUST Page 2 7873 regulations, nor of any covenant, condition or restriction affecting the Property; (e) not to initiate or acquiesce in any change in any zoning or other land use or legal classification which affects any of the Property without the City's prior written consent; and (f) not to alter the use of all or any part of the Property without the prior written consent of the City. 4.2 Personal Iniury and Property Damage Insurance, a) Borrower shall purchase and maintain, and shall cause its Contractor (and any subcontractors (hereafter, 'Contractors') to purchase and maintain, at their sole cost and expense, throughout the term of this agreement, the following insurance policies: i) Comprehensive general liability insurance, with minimum limits of One Million Dollars ($1,000,000) combined single limit per occurrence, covering all bodily injury and property damage arising out of this agreement. Policy must include contractual liability. ii) Vehicle insurance covering all bodily injury and property liability incurred during the performance of this agreement, with a minimum coverage of $1,000,000 combined single limit per accident. If there are no company owned vehicles, vehicle insurance covering non-owned and hired vehicles shall be obtained. (1) Regarding above policies: the City and their officials, elected officials and employees are to be covered as insureds as respects: liability arising out of activities performed by or on behalf of Borrower and Contractors; products and completed operations of Borrower and Contractors; premises owned, leased or used by Borrower and Contractors; or automobiles owned, leased, hired or borrowed by Borrower and Contractors. The coverage shall contain no special limitations on the scope of protection afforded to City, the City and their officials, employees or elected officials. Notwithstanding the foregoing, the above policies shall only cover activities performed pursuant to this Agreement. (2) City, as well as their officials, employees, agents, and elected officials shall be named as additional insured only as respects those activities arising out of this Agreement. iii) Workers' compensation insurance covering all employees. Workers' compensation limits as required by the Labor Code of the State of California and Employers' Liability limits of $1,000,000 per accident. The insurer shall agree to waive all rights of subrogation against City, its officials, employees and elected officials for losses arising from work performed by Borrower and Contractor for City. CITY OF ENCINITAS/ENCINITAS RANCH APARTMENTS, LLC - DEED OF TRUST Page 3 7874 iv) Borrower shall procure and maintain comprehensive dishonesty, destruction fire, all risk and disappearance coverage with minimum limits of $300,000 with City named and a co-obligee covering all Borrower's employees and owners. v) Borrower shall keep the building and improvements located on Sites insured for replacement value of not less than 100 percent of structural value. b) Any failure to comply with reporting provisions of the policies shall not affect coverage provided to City, its officials, employees or elected officials. c) Borrower's and Contractors insurance coverage shall be primary insurance as respects City, their officials, employees and elected officials as respects to this Agreement. Any insurance or self-insurance maintained by City, their officials, employees or elected officials shall be excess of Borrower's and Contractors insurance and shall not contribute with it. d) Each insurance policy required by this clause shall be endorsed to state that coverage shall not be suspended, voided, cancelled, reduced in coverage or in limit except after thirty (30) days prior written notice by certified mail, return receipt requested, has been given to City. e) Coverage shall be provided on an "occurrence" basis only. 0 Insurance will be written with only California admitted companies having a Best Rating of A+7 or better. g) As to all insurance coverage required herein, any deductible or self-insured retention exceeding $5,000.00 shall be disclosed to and be subject to written approval by City. h) If Borrower does not keep an insurance policy in full force and effect at all times during the term of the Agreement, City may elect to treat the failure to maintain the requisite insurance as a breach of the Agreement and terminate this Agreement as provided herein. i) The effective term of this insurance provision shall continue during the term of this Agreement. 4.3 Payment of Taxes and Utility Charqes. To pay prior to delinquency, all taxes and assessments, both general and special, fines, penalties, levies and charges of every type or nature levied upon or assessed against any part of the Property or upon Trustee's or the City's interest in the Property. CITY OF ENCINITAS/ENCINITAS RANCH APARTMENTS, LLC - DEED OF TRUST Page 4 757 4.4 Payment and Discharqe of Liens. Borrower will pay, when due, all claims of every kind and nature which might or could become a lien on the Property or any part thereof of any kind or nature other than this Deed of Trust; provided, however, that the following are excepted from this prohibition: (a) liens for taxes and assessments which are not delinquent although by law are given the status of a lien, and (b) such of the above claims as are, and only during the time they are, being contested by Borrower in good faith and by appropriate legal proceedings. Borrower shall post security for the payment of these contested claims as may be requested by City. 4.5 Rights of City to Remedy Defaults. If Borrower defaults in payment of any tax, assessment, lien, claim, insurance premium, or any other proper charge in whole or in part, or defaults in the performance of any of the Loan Documents (as defined in the Development Agreement), City at any time and from time to time, with notice or demand upon Borrower, may make such payments or perform any such acts required of Borrower, to such extent and in any form or manner deemed expedient by City and pay any other sums, expenses and charges, including attorneys' fees, necessary to protect the Property and the lien of this Deed of Trust, without incurring any obligation so to do or releasing Borrower from any obligations and without waiving or curing any default. City shall reasonably judge of the validity, priority, and amount of any such tax, assessment, lien, premium, claim or charge so paid by it and the necessity for the performance by City of any such obligation which Borrower was required but failed to perform. City, at its option, shall be subrogated to any tax, assessment, lien, premium, claim or charge which it has paid under these provisions and any such subrogation rights shall be additional and cumulative security to those set forth in the Loan Documents. 4.6 Repayment to City. Upon City's payment of any tax, assessment, lien, claim, insurance premium or other charge which Borrower fails to pay or upon City performance of any obligation which Borrower fails to perform after notice to Borrower, all as set forth in paragraph 4.5 above, the amount so paid or the cost of performing any such obligation, together with other necessary sums paid or incurred by City, including charges, expenses and reasonable attorneys' fees thereon from date of payment at the rate of six percent (6%) per annum, shall be paid by Borrower to City upon written demand. The aggregate of all such amounts, including interest, shall be secured by the lien of this Deed of Trust. 4.7 Defense of Actions and Payment of Costs. At Borrower's sole cost, Borrower shall appear in and defend all actions and proceedings purporting to affect the Property or any right or power of City or Trustee hereunder, provided that City and Trustee, or either of them, may, at their sole cost, appear in and defend any such action or proceeding. Borrower shall give City prompt written notice in writing of (a) the assertion of any claim, (b) the filing of an action or proceeding, (c) the occurrence of any damage to any of the Property, (d) any condemnation and (e) any other material nonmonetary default. 5. IT IS MUTUALLY AGREED THAT: CITY OF ENCINITAS/ENClNITAS RANCH APARTMENTS, LLC - DEED OF TRUST Page 5 7876 5.1 Awards and Damages. All judgments, awards of damages, settlements and compensation made in connection with or in lieu of (a) taking of all or any part of or any interest in the Property by or under assertion of the power of eminent domain, (b) any other injury or damage to all or any part of the Property, are hereby assigned to and shall be paid to City. City is authorized and empowered (but not required) to collect and receive any such sums and is authorized to apply them in whole or in part upon any indebtedness or obligation secured hereby, in such order and entitled to settle and adjust all claims under insurance policies provided under this Deed of Trust and may deduct and retain from the proceeds of such insurance the amount of all reasonable and necessary expenses incurred by it in connection with any such settlement or adjustment. All or any part of the amounts so collected and recovered by City shall be released to Borrower upon such reasonable and necessary conditions as City may impose for its disposition. Application of all or any part of the amounts collected and received by City or the release thereof shall not cure or waive any default under this Deed of Trust unless all such obligations are paid in full. 5.2 Sales and Encumbrances Prohibited. Borrower shall not make any sale, assignment or conveyance, or transfer in any other form, nor any further pledge, encumbrance or mortgaging, of the entire Property, or its entire interest therein, other than in accordance with the terms of the Loan Documents, or with written permission from the City. 5.3 Sale or Forbearance. No sale of the Property, forbearance on the part of City or extension of the time for payment of the indebtedness hereby secured shall operate to release, discharge, waive, modify, change or affect the liability of Borrower either in whole or in part. 5.4 Late Payment. City's acceptance of late payment of any sum shall not constitute a waiver of its rights to require prompt payment when due of all other indebtedness, or to declare a default for any failure so to pay, or to proceed with foreclosure or sale for any other default then existing. City's acceptance of partial payment of any sum after default shall not cure such default or affect any notice of default unless City expressly revokes such notice of default in writing or Borrower makes full payment of the amount owed and past due. 5.5 City's Ri.qhts to Release. VVithout affecting the liability of any person for payment of any indebtedness hereby secured (other than any person released pursuant hereto), including without limitation, any one or more endorsers or guarantors, and without affecting the lien hereof upon any of the Property not released pursuant hereto, at any time and from time to time without notice: (a) City may, at its sole discretion, (i) release any person now or hereafter liable for payment of any or all such indebtedness, (ii) extend the time for or agree to alter the terms of payment of any or all of such indebtedness, and (iii) release or accept additional security for such indebtedness, or subordinate the lien or charge hereof; and (b) Trustee, acting pursuant to the written request of City, may reconvey all or any part of the Property, consent to the making of CITY OF ENClNITAS/ENCINITAS RANCH APARTMENTS, LLC - DEED OF TRUST Page 6 7877 5.1 Awards and Damages. All judgments, awards of damages, settlements and compensation made in connection with or in lieu of (a) taking of all or any part of or any interest in the Property by or under assertion of the power of eminent domain, (b) any other injury or damage to all or any part of the Property, are hereby assigned to and shall be paid to City. City is authorized and empowered (but not required) to collect and receive any such sums and is authorized to apply them in whole or in part upon any indebtedness or obligation secured hereby, in such order and entitled to settle and adjust all claims under insurance policies provided under this Deed of Trust and may deduct and retain from the proceeds of such insurance the amount of all reasonable and necessary expenses incurred by it in connection with any such settlement or adjustment. All or any part of the amounts so collected and recovered by City shall be released to Borrower upon such reasonable and necessary conditions as City may impose for its disposition. Application of all or any part of the amounts collected and received by City or the release thereof shall not cure or waive any default under this Deed of Trust unless all such obligations are paid in full. 5.2 Sales and Encumbrances Prohibited. Borrower shall not make any sale, assignment or conveyance, or transfer in any other form, nor any further pledge, encumbrance or mortgaging, of the entire Property, or its entire interest therein, other than in accordance with the terms of the Loan Documents, or with written permission from the City. 5.3 Sale or Forbearance. No sale of the Property, forbearance on the part of City or extension of the time for payment of the indebtedness hereby secured shall operate to release, discharge, waive, modify, change or affect the liability of Borrower either in whole or in part. 5.4 Late Payment. City's acceptance of late payment of any sum shall not constitute a waiver of its rights to require prompt payment when due of all other indebtedness, or to declare a default for any failure so to pay, or to proceed with foreclosure or sale for any other default then existing. City's acceptance of partial payment of any sum after default shall not cure such default or affect any notice of default unless City expressly revokes such notice of default in writing or Borrower makes full payment of the amount owed and past due. 5.5 City's Rights to Release. Without affecting the liability of any person for payment of any indebtedness hereby secured (other than any person released pursuant hereto), including without limitation, any one or more endorsers or guarantors, and without affecting the lien hereof upon any of the Property not released pursuant hereto, at any time and from time to time without notice: (a) City may, at its sole discretion, (i) release any person now or hereafter liable for payment of any or all such indebtedness, (ii) extend the time for or agree to alter the terms of payment of any or all of such indebtedness, and (iii) release or accept additional security for such indebtedness, or subordinate the lien or charge hereof; and (b) Trustee, acting pursuant to the written request of City, may reconvey all or any part of the Property, consent to the making of CITY OF ENCINITAS/ENCINITAS RANCH APARTMENTS, LLC - DEED OF TRUST Page 6 7878 any map or plat thereof, join in granting any easement thereon, or join in any such agreement of extension or subordination. 5.6 Reconveyance. Upon written request of City stating that all sums and obligations secured hereby have been discharged, or otherwise as requested in writing by City, and upon surrender of this Deed of Trust and the Note and any additional loan notes to Trustee for cancellation, and upon payment to Trustee of its fees and expense, Trustee shall reconvey, without warranty, the Property or that part thereof then held hereunder. The recitals in any reconveyance shall be conclusive proof of their truthfulness and the grantee in any such reconveyance may be described "as the person or persons legally entitled thereto." When the Property has been fully reconveyed, the last such reconveyance shall operate as a reassignment of all of the rents, royalties, issues, accounts and profits of the Property to the person or persons legally entitled thereto unless such reconveyance expressly provides to the contrary. 5.7 Events of Default. Any one or more of the following events shall constitute a default under this Deed of Trust: (a) Failure of the Borrower to pay the indebtedness secured hereby or any installment thereof, whether principal or interest, payable, whether at maturity or by acceleration or otherwise; or (b) failure of Borrower to observe or to perform any covenant and/or condition to be observed or performed by Borrower pursuant to the Loan Documents. 5.8 Acceleration and Sale. (a) Acceleration. In the event of any default as set forth in paragraph 5.7 above, City, with demand on Borrower, may declare all sums hereby secured immediately due and payable by notice thereof to the Borrower or by executing and recording or by causing the Trustee to execute and record a notice of default and election to cause the Property to be sold to satisfl/the obligations secured hereby, or by the commencement of an appropriate action to foreclose this Deed of Trust or by any other appropriate manner; (b) Foreclosure Procedure. Whenever a notice of default and intent to sell is issued pursuant to Civil Code Section 2924, the City will follow the notice and hearing procedures established in Section 7938 Title 25, California Administrative Code in addition to other provisions of law. 5.9 Entry Possession and Receivership. In the event of any default hereunder and irrespective of whether City accelerates the maturity of all indebtedness secured hereby or files a notice of default hereunder, City at any time, with notice of demand or regard to the adequacy of any security for the indebtedness and obligations hereby secured, in person, or by any agent or employee, or by receiver appointed by court, may enter upon and take the possession of the Property or any part thereof and including the right to rent, lease, operate and maintain any part or all of the Property, and may sue for or otherwise collect and receive all rents, royalties, issues, accounts and profits thereof, including these past due as well as those accruing thereafter. CITY OF ENClNITAS/ENCINITAS RANCH APARTMENTS, LLC - DEED OF TRUST Page 7 7879 Borr6wer hereby presently assigns to City, absolutely and regardless of possession of the Property, al~ rents and other monies now due or hereafter to become due under any ~ease or agreement or otherwise for the use of occupation of all or any part of the Property, now existing or hereafter made, reserving to Borrower such rents as they become due, but not otherwise. Borrower shah on demand execute such further assignments to City of any or a~ such leases, agreements, rants or monies as the City may reasonably require, and deliver to City a fully executed original of any or all such leases or agreements. City by any agent, employee or receiver, may also take possession of, and for these purposes use, any and all of Borrower's personal property contained in or on the Property and used by Borrower in the operation, rental or leasing thereof or any part thereof. The expense (including, but not limited to, receivers' fees, attorneys' fees and agents' compensation) incurred by City pursuant to the power herein contained shall be secured hereby. City may bring or defend any legal action in connection with the Property, as necessary and proper, and may, from time to time, make all necessary or proper repairs, replacements and alterations to the Property, as it may seem judicious, and may insure and reinsure the same, and may lease the property or any part or parts thereof in such parcels and for such periods and on such terms as it may seem fit,. including leases for terms and for terms expiring after the maturity of the indebtedness hereby secured, and may terminate any lease for any case which would entitle Borrower to terminate it. After deducting the reasonable expenses of managing and operating the same and all necessary maintenance, repairs, replacements and alterations and all payments which may be made for taxes, assessments, liens, claims, insurance premiums, or other proper charges of the Property or any part necessary, City shall apply any and all remaining funds to the payments of the indebtedness hereby secured in such order and proportion as City may reasonably determine. Neither application of said amounts to such indebtedness nor any other action taken by City under this paragraph shall cure or waive any default hereunder or nullify the affect of any such notice of default or invalidate any act done pursuant to such notice or any cause of action to foreclose this Deed of Trust. The right to enter and take possession of the Property, to manage and operate the same, and to collect the rents, issues and profits thereof, whether by a receiver or otherwise, shall be in addition to any other right to remedy hereunder or afforded by law, and may be exercised concurrently therewith or independently thereof. City shall be liable to account only for such rents, royalties, issues, accounts and profits actually received by it. 5.10 Attorneys' Fees. If any party commences or is made a party to a lawsuit, arbitration or other proceeding to enforce or interpret this agreement, the prevailing party in such proceeding shall be entitled to recover from the other party all attorneys' fees and other costs (whether otherwise taxable or recoverable) incurred in connection with such proceeding, including without limitation any appeal or enforcement of any judgment or decision randered in such proceeding. 5.11 Exercise of Remedies; Delay. No exercise of any right or remedy herein contained or provided by law, and no delay by City or Trustee in exercising any such CITY OF ENCINITAS/ENClNITAS RANCH APARTMENTS, LLC - DEED OF TRUST Page 8 7880 right br remedy hereunder shall operate as a waiver thereof or preclude the exercise thereof during the continuance of any default hereunder. 5.12 Trustee Substitution. The irrevocable power to appoint a substitute trustee or trustees hereunder is hereby expressly granted to City to be exercised at any time hereafter, without specifying any reason therefor by filing for record in the office where this Deed of Trust is recorded a deed of appointment, and said power of appointment of successor trustee or trustees may be exercised as often as and whenever City deems advisable. The exercise of said power of appointment, no matter how often, shall not be deemed an exhaustion thereof, and upon recording of such deed or deeds of appointment, the trustee or trustees so appointed shall thereupon, without further act or deed of conveyance, succeed to and become fully vested with identically the same title and estate in and to the Property hereby conveyed and with all the rights, powers, trusts and duties of the predecessor in the trust hereunder, with the like effect as if originally named as trustee or as one of the trustees. 5.13 Remedies Cumulative. No remedy herein contained or conferred upon City or Trustee is intended to be exclusive of any other remedy or remedies afforded by law or by the terms hereof to the City or Trustee but each and every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity. 5.14 Successors, Assi.qns, Gender, Number. The covenants and agreements herein contained shall bind, and the benefit and advantages shall inure to, the respective heirs, executors, administrators, successors and assigns of the parties. Wherever used, the singular number shall include the plural, and the plural the singular, and the use of any gender shall be applicable to all genders. 5.15 Headinqs. The headings are inserted only for convenience of reference and in no way define, limit, or describe the scope or intent of this Deed of Trust, or of any particular provision thereof, or the proper construction thereof. 5.16 Actions on Behalf of City. Except as is otherwise specifically provided herein, whenever any approval, notice, direction, consent, request or other action by City is required or permitted under this Deed of Trust, such action shall be in writing. 5.17 Obliqations of Borrower. If more than one person has executed this Deed of Trust as Borrower, the obligations of all such persons hereunder shall be joint and several. 5.18 Miscellaneous Provisions. (a) Beneficiary Statement. City may charge a fee of fifty dollars ($50) for furnishing any statement required by California Civil Code Section 2943. CITY OF ENCINITAS/ENCINITAS RANCH APARTMENTS, LLC - DEED OF TRUST Page 9 7 8 (b) Severability. If any provision of this Deed of. Trust shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions hereof shall not in any way be affected or impaired. (c) Indemnification. Borrower will indemnify and hold City, its elected officials, officers and agents harmless against any and all losses, claims, demands, penalties and liabilities which City, its elected officials, officers or agents may sustain or suffer by reason of Borrower's willful or grossly negligent acts or omissions in connection with this Deed of Trust or this Agreement and not assert any claim against City, its elected officials, officers or agents by reason of any action so taken or omitted. Borrower shall, at Borrower's expense, defend, indemnify, save and hold expenses, damages (general, punitive or otherwise), causes of action (whether legal or equitable in nature) asserted by any person; firm, corporation or other entity arising out of this Deed of Trust and Borrower shall pay City upon demand all claims, judgments, damages, losses or expenses (including reasonable legal expense) incurred by City as a result of any legal action arising out of this Deed of Trust. (d) Offset. Borrower shall not under any circumstances fail or delay to perform (or resist the enforcement of) any of its obligations to City in connection with this Deed of Trust or any other contract, note or instrument executed by Borrower in favor of City because of any indebtedness or obligation of City which has not been confirmed in a final judgment of a court of competent jurisdiction (sustained on appeal, if any) against City, and Borrower hereby waives any such rights of set-off (or offset) which it might otherwise have with respect to any such claims or causes of action against City or any such obligations or indebtedness of City, unless and until such right of set-off (or offset) is confirmed and liquidated by such final judgment. Borrower further waives any right which it might otherwise have (if any) to require a marshalling of any security of the City or to direct the order in which City pursues its rights or remedies with respect to any of its security. IN WITNESS WHEREOF, Borrower has executed this Deed of Trust on the day and year set forth above. If a mailing address is set forth opposite its signature below, and not otherwise, the Borrower shall be deemed to have requested that a copy of any notice of default and of any notice of sale hereunder be mailed to it at such address. MAILING ADDRESS FOR NOTICES To Borrower: To Beneficiary: Encinitas Ranch Apartments, LLC City of Encinitas 10679 Westview Parkway 505 S. Vulcan Ave. San Diego, CA 92126 Encinitas, CA 92024 Attn: President CITY OF ENClNITAS/ENClNITAS RANCH APARTMENTS, LLC - DEED OF TRUST Page 10 7882 SIGNATURE OF BORROWER Encinitas Ranch Apartments, LLC BY: ,M~~n r~ ATTACH ACKNOWLEDGEMENTS HERE CITY OF ENCINITAS/ENCINITAS RANCH APARTMENTS, LLC - DEED OF TRUST Page 11 7883 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT County of ~,~ On /W~v. ,~ -/, ~.oc~, before me, ,,~/,'/~'¢ DATE NAME, TITLE OF OFFICER - E,G., ",~NE DOE, NOTARY PUBUC' personally appeared /,~.u ~ ~ ,/~/~'r~', ~, ~ , NAME(S) OF SIGNER(S) [~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 ac- knowledged to me that he/she/they executed the same in his/her/their authorized capacity(ice), and that by his/her/their ..... signature(s) on the instrument the person(s), ~ ~L'L~.'c'o~'~''' ~1~ or the enti'ty upon behalf of which the ~[~'~.}~J~c-ca~a ~m person(s) acted, executed the instrument. My m. Exp. Aby ~3, 2oo5. [ WITNESS my hand and official seal. $1ONATURE OPTIONAL Though th, d~,ta I~low i~ not required blt I~w, it malt pro¥~ Yaluablo to p~on~ mlyin~ on thG document and ~ould pm¥~nt ~udul*nt mattachm,nt of thi~ [orm. ~A~NiI'D' ~I.~I~£D BY 81$NFR ~£SCRIPIION 0F ~rrgCltED DflCUM£NI [] }~DIVID~ ~ ~R~ OFFICER TITLE OR ~PE OF DOCUMENT ~s) ~ PA~ER(S) ~ LIMED ~ GENE~L ~ A~ORN~-IN-FACT NUMBER OF PAGES ~ TRUS~E(S) ~ GUARDI~NSERVATOR ~ O~ER: DATE OF ~CUMENT SIGNER IS REPRESENTING: N~ME OF PER~ON(S) OR Ek~FrY(IES) SIGNER(S) OTHER THAN NAMED ABOVE EXHIBIT A LEGAL DESCRIPTION The land referred to herein is situated in the State of California, County of San Diego, and described as follows: Lot 45 of amended map of City of Encinitas Map No. 13258, City of Encinitas Tract No. 94-066, Units I, II and Ill, in the City of Encinitas, County of San Diego, State of California, according to Map thereof No. 13333, filed in the office of the County Recorder of San Diego County, June 3, 1996. APN: 257-040-46-00 CITY OF ENCINITAS/ENCINITAS RANCH APARTMENTS, LLC - DEED OF TRUST Page 12