2018-11-28 (17) SRR Deed of Trust Security Agrmt, Fixutre Filing & Assign of Leases & Rents RecordedF�114 r c°,,o • cs>
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RECORDING REQUESTED BY:
MOSAIC SILVERROCK, LLC,
a Delaware limited liability company
AND WHEN RECORDED MAIL TO:
Greenberg Traurig, LLP
1840 Century Park East, Suite 1900
Los Angeles, California 90067
Attention. Michael H. Davis, Esq.
APNs: 776-150-028; 777-490-038,
777-490-040, 777-490-037, 777-490-
041, 777-490-036, 777-490-042, 777-
490-043; 777-490-044, 777-490-045,
777-490-046, 777-490-053, 777-490-
054, 777-490-055, 777-060-076, 777-
060-077, 777-060-078, 777-060-075
DOC # 2018-0464681
11 /28/2018 03:02 PM Fees: $457.00
Page 1 of 53
Recorded in Official Records
County of Riverside
Peter Aldana
Assessor -County Clerk -Recorder
"This document was electronically submitted
to the County of Riverside for recording"
Receipted by: TERESA #134
CONSTRUCTION DEED OF TRUST, SECURITY AGREEMENT, FIXTURE FILING
AND ASSIGNMENT OF LEASES AND RENTS
ATTENTION COUNTY RECORDER: THIS INSTRUMENT IS INTENDED TO
BE EFFECTIVE AS A FINANCING STATEMENT FILED AS A FIXTURE
FILING PURSUANT TO SECTION 9502 OF THE CALIFORNIA COMMERCIAL
CODE. PORTIONS OF THE GOODS COMPRISING A PART OF THE
MORTGAGED PROPERTY ARE OR ARE TO BECOME FIXTURES RELATED
TO THE LAND MORE FULLY DESCRIBED IN EXHIBIT A HERETO. THIS
INSTRUMENT IS TO BE FILED FOR RECORD IN THE RECORDS OF THE
COUNTY WHERE DEEDS OF TRUST ON REAL PROPERTY ARE
RECORDED AND SHOULD BE INDEXED AS BOTH A DEED OF TRUST AND
AS A FINANCING STATEMENT COVERING FIXTURES. THE ADDRESSES
OF TRUSTOR (DEBTOR) AND BENEFICIARY (SECURED PARTY) ARE
SPECIFIED IN THE FIRST PARAGRAPH ON PAGE 1 OF THIS INSTRUMENT.
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THIS CONSTRUCTION DEED OF TRUST SECURES A NOTE WHICH PROVIDES
FOR A VARIABLE INTEREST RATE
CONSTRUCTION DEED OF TRUST, SECURITY AGREEMENT, FIXTURE
FILING AND ASSIGNMENT OF LEASES AND RENTS
THIS CONSTRUCTION DEED OF TRUST, SECURITY AGREEMENT,
FIXTURE FILING AND ASSIGNMENT OF LEASES AND RENTS (this "Security
Instrument") is made as of November 28, 2018, by SilverRock Lodging, LLC, a Delaware
limited liability company, SilverRock Luxury Residences, LLC, a Delaware limited liability
company, and SilverRock Lifestyle Residences, LLC, a Delaware limited liability company
(each, an "Additional Borrower" and collectively, the "Additional Borrowers") and SilverRock
Phase I, LLC, a Delaware limited liability company (together with any Additional Borrower
subject to a Transfer described in Section 4(a)(ii)(c) hereof, "Trustor"; and together with the
Additional Borrowers, collectively, "Grantor") and each having its address at 3551 Fortuna
Ranch Road, Encinitas, California 92924, to Fidelity National Title Insurance Company, a
Florida corporation ("Trustee"), for the benefit of MOSAIC SILVERROCK, LLC, a Delaware
limited liability company, having its address at c/o Mosaic Real Estate Investors, LLC 23975
Park Sorrento, Suite 420 Calabasas, California 91302, attention: Vicky Schiff and Sterling
Johnson, together with its successors and assigns ("Beneficiary").
RECITALS
A. Loan Agreement and Loan Documents. Beneficiary is making a loan to Grantor
(the "Loan") in an amount not to exceed Two Hundred Twelve Million Two Hundred Fifty
Thousand and 00/100 Dollars ($212,250,000) pursuant to that certain Construction Loan
Agreement of even date herewith by and between Grantor and Beneficiary, the provisions of
which are incorporated herein by reference to the same extent as if fully set forth herein (said
Construction Loan Agreement and any and all extensions and renewals thereof, amendments
thereto and substitutions or replacements therefor is referred to herein as the "Loan Agreement";
any terms not defined herein shall have the meanings ascribed to such terms in the Loan
Agreement). The Loan is evidenced by that certain Promissory Note of even date herewith in the
principal amount of $212,250,000 from Grantor to Beneficiary (together with all renewals,
amendments, modifications, increases and extensions thereof, the "Note"). The Loan is due and
payable in full on November 28, 2021 (the "Maturity"), subject to extension as provided in
the Loan Agreement or accelerated pursuant to the terms hereof or of any other Loan Document
(as hereinafter defined). This Security Instrument encumbers certain real estate owned by
SilverRock Phase I, LLC, a Delaware limited liability company ("Phase I") located in Riverside
County, California, more fully described on Exhibit A attached hereto, and payment of the Note
is secured by this Security Instrument, financing statements and other security documents (this
Security Instrument, the Note, the Loan Agreement, the Rate Management Agreement (as
defined below) and all other documents evidencing or securing the Loan (as amended, modified,
replaced or restated from time to time) are individually hereinafter referred to as a "Loan
Document" and collectively referred to as the "Loan Documents"). All initially capitalized terms
used herein and not otherwise defined shall have the meaning ascribed to such terms in the Loan
Agreement. As used herein, the term "Rate Management Agreements" means any agreement,
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device or arrangement providing for payments which are related to fluctuations of interest rates,
exchange rates, forward rates, or equity prices, including, but not limited to, dollar —denominated
or cross -currency interest rate exchange agreements, forward currency exchange agreements,
interest rate cap or collar protection agreements, forward rate currency or interest rate options,
puts and warrants, and any agreement pertaining to equity derivative transactions (e.g., equity or
equity index swaps, options, caps, floors, collars and forwards), including without limitation any
ISDA Master Agreement between Grantor and Beneficiary, or any Affiliate of Beneficiary, and
any schedules, confirmations and documents and other confirming evidence between the parties
confirming transactions thereunder, all whether now existing or hereafter arising and in each
case, as amended, modified or supplemented from time to time. The Loan bears interest at a
variable rate of interest.
GRANT
NOW THEREFORE, to secure (i) the payment when and as due and payable of the
principal of and interest on the Loan or so much thereof as may be advanced from time to time,
and any and all late charges, and all other indebtedness, loans, advances and each and every
obligation and liability evidenced by, owing, arising under or in connection with the Loan, the
Note and any of the other Loan Documents (other than the obligations under each of the
Environmental Indemnity Agreement and each Guaranty, which obligations are and shall remain,
for as long as Beneficiary deems necessary, unsecured obligations), together with any
extensions, modifications, renewals or refinancings of any of the foregoing, (ii) the payment of
all other expenses, costs, advances and indebtedness which this Security Instrument by its terms
secures, (iii) the performance and observance of the covenants and agreements contained in this
Security Instrument, the Loan Agreement, the Note and each of the other Loan Documents (other
than the obligations under each of the Environmental Indemnity Agreement and each Guaranty,
which obligations are and shall remain, for as long as Beneficiary deems necessary, unsecured
obligations), (iv) any and all obligations of Grantor to Beneficiary or any affiliate of Beneficiary,
whether absolute, contingent or otherwise and howsoever and whensoever (whether now or
hereafter) created, arising, evidenced or acquired (including renewals, extensions and
modifications thereof and substitutions theretofore) , under or in connection with (I) any and all
Rate Management Agreements, and (II) any and all cancellations, buy -backs, reversals,
terminations or assignments of any Rate Management Agreement ("Rate Manajzeme
Obligations"), except for Rate Management Obligations that constitute "Excluded Swap
Obligations" (as defined in the Loan Agreement), (v) all obligations to perform or forbear from
performing acts, and agreements, instruments and documents evidencing, guarantying, securing
or otherwise executed in connection with any of the foregoing, together with any amendments,
modifications and restatements thereof, and all expenses and attorneys' fees incurred by
Beneficiary hereunder or any other document, instrument or agreement related to any of the
foregoing, and (vi) all other loans, advances, indebtedness and each and every other obligation
or liability of Grantor owed to Beneficiary or its successors, however created, of every kind and
description whether now existing or hereafter arising and whether direct or indirect, primary or
as guarantor or surety, absolute or contingent, liquidated or unliquidated, matured or unmatured,
participated in whole or in part, created by trust agreement, lease overdraft, agreement or
otherwise, whether or not secured by additional collateral, whether originated with Beneficiary
or owed to others and acquired by Beneficiary by purchase, assignment or otherwise, and all
obligations to perform or forbear from performing acts, and agreements, instruments and
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documents evidencing, guarantying, securing or otherwise executed in connection with any of
the foregoing, together with any amendments, modifications and restatements thereof, and all
expenses and attorneys' fees incurred by Beneficiary hereunder or any other document,
instrument or agreement related hereto or to any of the foregoing (all of such indebtedness,
obligations and liabilities identified in (i), (ii), (iii), (iv) and (v) above being hereinafter referred
to as the "Obligations"). For the purpose of securing payment and performance of the
Obligations, Grantor hereby irrevocably and unconditionally grants, conveys, transfers and
assigns to Trustee, its successors and assigns, IN TRUST, WITH POWER OF SALE
TOGETHER WITH THE RIGHT OF ENTRY AND POSSESSION, for the benefit and security
of Beneficiary, all present and future rights, titles, interests, estates, powers and privileges that
Grantor now has or may hereafter acquire in and does hereby grant to Beneficiary, its successors
and assigns a security interest in all of Grantor's assets, wherever and howsoever located, and all
products and proceeds thereof, including, without limitation, all and singular the properties,
rights, interests and privileges described in Granting Clauses I, II, III, IV, V, VI, VII, VIII, IX
and X below, all of same being collectively referred to herein as the "Mortgaged Property":
GRANTING CLAUSE I:
THE LAND, all estate, right, title, interest, claim and demand whatsoever which Trustor
now or hereafter acquires, either in law or in equity, in possession or expectancy, of, in and to the
real property described on Exhibit A attached hereto and made a part hereof (the "Land"),
together with any greater estate therein as hereafter may be acquired by Trustor; provided,
however, neither the failure to designate an address nor any inaccuracy in the address designated
shall affect the validity or priority of the lien of this Security Instrument on the Land;
GRANTING CLAUSE II:
TOGETHER WITH all buildings, structures and improvements of every nature
whatsoever now or hereafter situated on the Land, including all extensions, additions,
improvements, betterments, renewals, substitutions and replacements to or for any such
buildings, structures and improvements and all of the right, title and interest of the Trustor now
or hereafter acquired in and to any of the foregoing, including without limitation those certain
improvements to be constructed on the Land in accordance with the Loan Agreement
(collectively, the "Improvements");
GRANTING CLAUSE III:
TOGETHER WITH all easements, rights of way, strips and gores of land, streets, ways,
alleys, sidewalks, vaults, passages, sewer rights, waters, water courses, water drainage and
reservoir rights and powers (whether or not appurtenant), all estates, rights, titles, interests,
privileges, liberties, tenements, hereditaments, easements, franchises, appendages, options to
purchase all or any part of the Land or Improvements or any interest therein (and any greater
estate in the Land or Improvements now owned or hereafter acquired by Trustor pursuant
thereto), and appurtenances whatsoever, in any way belonging, benefitting, relating or
appertaining to the Land or the Improvements, whether now owned or hereafter acquired by the
Trustor, including without limitation the PSDA, the TOT Agreement and all other documents
related to the development of the Project issued by any Governmental Authority all existing and
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future mineral, oil and gas rights which are appurtenant to or which have been used in
connection with the Land, all existing and future water stock relating to the Land or the
Improvements, all existing and future share of stock respecting water and water rights pertaining
to the Land or the Improvements or other evidence of ownership thereof, and the reversions and
remainders thereof (the "Appurtenant Rights");
GRANTING CLAUSE IV:
TOGETHER WITH all machinery, apparatus, equipment, fittings and fixtures of every
kind and nature whatsoever, and all furniture, furnishings and other personal property now or
hereafter owned by the Trustor and forming a part of, or used or obtained for use in connection
with, the Land or the Improvements or any present or future operation, occupancy, maintenance
or leasing thereof; including, but without limitation, any and all heating, ventilating and air
conditioning equipment and systems, antennae, appliances, apparatus, awnings, basins, bathtubs,
bidets, boilers, bookcases, cabinets, carpets, communication systems, coolers, curtains,
dehumidifiers, dishwashers, disposals, doors, drapes, drapery rods, dryers, ducts, dynamos,
elevators, engines, equipment, escalators, fans, fittings, floor coverings, furnaces, furnishings,
furniture, hardware, heaters, humidifiers, incinerators, lighting, machinery, motors, ovens, pipes,
plumbing and electric equipment, pool equipment, pumps, radiators, ranges, recreational
facilities and equipment, refrigerators, screens, sprinklers, stokers, stoves, shades, shelving,
sinks, security systems, toilets, ventilators, wall coverings, washers, windows, window covering,
wiring, beds, bureaus, chiffoniers, chests, chairs, desks, mirrors, tables, screens, paintings,
hangings, pictures, divans, couches, luggage carts, luggage racks, stools, sofas, chinaware,
linens, pillows, blankets, glassware, foodcarts, cookware, dry cleaning facilities, dining room
wagons, keys or other entry systems, bars, bar fixtures, liquor and other drink dispensers,
icemakers, radios, television sets, intercom and paging equipment, electric and electronic
equipment, dictating equipment, private telephone systems, facsimile machines, medical
equipment, potted plants, lighting fixtures, fire prevention and extinguishing apparatus, fittings,
plants, laundry machines, tools, machinery, engines, switchboards, conduits, compressors,
vacuum cleaning systems, floor cleaning, waxing and polishing equipment, call systems,
brackets, electrical signs, bulbs, bells, ash and fuel, conveyors, lockers, spotlighting equipment,
garbage disposals, and other customary hotel equipment and all extensions, renewals or
replacements thereof or substitutions therefor or additions thereto, whether or not the same are or
shall be attached to the Land or the Improvements in any manner (collectively, the "Fixtures"); it
being agreed that all of said property owned by the Trustor and placed on the Land or on or in
the Improvements (whether affixed or annexed thereto or not) shall, so far as permitted by law,
conclusively be deemed to be real property and conveyed hereby for purposes of this Security
Instrument.
GRANTING CLAUSE V:
TOGETHER WITH the following (the "Personal Property"):
All personal property of every nature whatsoever now or hereafter owned by Trustor or
used in connection with the Land or the improvements thereon, including all extensions,
additions, improvements, betterments, renewals, substitutions and replacements thereof and all of
the right, title and interest of Trustor in and to any such personal property together with the
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benefit of any deposits or payments now or hereafter made on such personal property by Grantor
or on its behalf, including without limitation, any and all Goods, Investment Property,
Instruments, Chattel Paper, Documents, Letter of Credit Rights, Accounts, Deposit Accounts,
Commercial Tort Claims and General Intangibles, each as defined in the Uniform Commercial
Code of the State of California (as amended from time to time, the "CA UCC");
All proceeds of the foregoing, including, without limitation, all judgments, awards of
damages and settlements hereafter made resulting from condemnation proceeds or the taking of
the Land or improvements thereon or any portion thereof under the power of eminent domain,
any proceeds of any policies of insurance, maintained with respect to the Land or the
Improvements or proceeds of any sale, option or contract to sell the Land or the Improvements or
any portion thereof,
Any and all additions and accessories to all of the foregoing and any and all proceeds
(including proceeds of insurance, eminent domain or other governmental takings and tort
claims), renewals, replacements and substitutions of all of the foregoing;
All of the books and records pertaining to the foregoing;
GRANTING CLAUSE VI:
TOGETHER WITH all right, title and interest which the Trustor hereafter may acquire in
and to all leases and other agreements now or hereafter entered into for the occupancy or use of
the Land, the Appurtenant Rights, the Improvements, the Fixtures and the Personal Property or
any portion thereof, whether written or oral (herein collectively referred to as the "Leases"), and
all rents, issues, incomes and profits in any manner arising thereunder (herein collectively
referred to as the "Rents"), credit card receipts collected from guest rooms, restaurants, bars,
meeting rooms, banquet rooms and recreational facilities and parking charges, the rendering of
services by Trustor or any operator or manager of a hotel or the commercial space located in the
Improvements or acquired from others (including, without limitation, from the rental of any
office space, retail space, guest rooms or other space, halls, stores and offices, and deposits
securing reservations of such space), license, lease, sublease and concession fees and rentals,
health club membership fees, food and beverage wholesale and retail sales, service charges,
vending machine sales and any other items of revenue, receipts and/or income as identified in the
Uniform System of Accounts for the Lodging Industry, 1 Oth Edition, published by the American
Hotel and Lodging Association in conjunction with the HFTP, as from time to time amended)
and all right, title and interest which the Trustor now has or hereafter may acquire in and to any
bank accounts, security deposits, and any and all other amounts held as security under the
Leases, reserving to the Trustor any statutory rights;
GRANTING CLAUSE VII:
TOGETHER WITH any and all awards and insurance proceeds, or proceeds of any sale,
option or contract to sell the Mortgaged Property or any portion thereof (provided that no right,
consent or authority to sell the Mortgaged Property or any portion thereof shall be inferred or
deemed to exist by reason hereof); and the Grantor hereby authorizes, directs and empowers the
Beneficiary, at its option, on the Grantor's behalf, or on behalf of the successors or assigns of the
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Grantor, to adjust, compromise, claim, collect and receive such proceeds; to give acquittances
therefor; and, after deducting expenses of collection, including attorneys' fees, costs and
disbursements, to apply the Insurance Proceeds to the extent not utilized for the restoration of the
Mortgaged Property as provided in the Loan Agreement, to payment of the Obligations,
notwithstanding the fact that the same may not then be due and payable or that the Obligations is
otherwise adequately secured; and the Grantor agrees to execute and deliver from time to time
such further instruments as may be requested by the Beneficiary to confirm such assignment to
the Beneficiary of any such proceeds;
GRANTING CLAUSE VIII:
TOGETHER WITH all estate, right, title and interest, homestead or other claim or
demand, as well in law as in equity, which the Grantor now has or hereafter may acquire of, in
and to the Mortgaged Property, or any part thereof, and any and all other property of every kind
and nature from time to time hereafter (by delivery or by writing of any kind) conveyed, pledged,
assigned or transferred as and for additional security hereunder by the Grantor or by anyone on
behalf of the Grantor to Beneficiary;
GRANTING CLAUSE IX:
TOGETHER WITH all of Grantor's right title, and interest in and to all contracts and
agreements (including, without limitation, that certain Purchase, Sale, and Development
Agreement by and between the City of La Quinta and SRDC dated November 19, 2014, as
amended by Amendment No. 1 to Purchase, Sale, and Development Agreement by and between
the City of La Quinta and SRDC dated October 29, 2015 and by Amendment No. 2 to Purchase,
Sale, and Development Agreement by and between the City of La Quinta and SRDC dated on or
about April 18, 2017 and by Amendment No. 3 to Purchase, Sale, and Development Agreement
by and between the City of La Quinta and SRDC dated on or about November 28, 2018
(collectively, and as may be further amended with Beneficiary's reasonable approval, the
"PSDA"), and any development agreements, redevelopment agreements, construction, operation,
reciprocal easement and use restriction agreements, parking rights agreements, and other similar
agreements) now or hereafter entered into covering or relating to any part of the Mortgaged
Property or the improvements thereon (collectively, the "Contracts") and all revenue, income and
other benefits thereof, including, without limitation, management agreements, franchise
agreements, service contracts, maintenance contracts, equipment leases, personal property leases
and any contracts or documents relating to the construction on any part of the Mortgaged
Property or the improvements (including plans, drawings, surveys, tests, reports, bonds and
governmental approvals) or to the management or operation of any part of the Mortgaged
Property or the improvements thereon and any and all warranties and guaranties relating to or in
connection with the Contracts or any of the other foregoing items; all water taps, sewer taps,
certificates of occupancy, permits, licenses, franchises, certificates, contracts, agreements
consents, approvals and other rights and privileges now or hereafter obtained in connection with
the Mortgaged Property or the improvements thereon and all present and future warranties and
guaranties relating to the improvements or to any equipment, fixtures, furniture, furnishings,
personal property or components of any of the foregoing now or hereafter located or installed on
the Mortgaged Property or the improvements; All building materials, supplies and equipment
now or hereafter placed on the Mortgaged Property and/or the improvements and all
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architectural, engineering and other renderings, models, drawings, plans, specifications, studies
and data now or hereafter relating to the Mortgaged Property and/or the improvements,
including, without limitation, the plans and specifications;
GRANTING CLAUSE X:
TOGETHER WITH All of Grantor's right, title and interest in all commitments for
financing, including, without limitation, takeout financing, and all right, title and interest in all
contracts to sell all or a portion of the Land and/or improvements, including, without limitation,
all guaranties thereof and all earnest money and credit support thereof, including, without
limitation, surety bonds and letters of credit;
TO HAVE AND TO HOLD the Mortgaged Property, unto the Trustee, its successors and
substitutes in trust, IN FEE SIMPLE (or leasehold interest as applicable) forever; subject,
however, to those encumbrances which the Beneficiary has approved in the Loan Agreement or
otherwise approved in writing (collectively, the "Permitted Encumbrances");
UPON CONDITION that, subject to the terms hereof and except during the existence of
an Event of Default hereunder, the Grantor shall be permitted to possess and use the Mortgaged
Property;
SUBJECT to the covenants and conditions hereinafter set forth.
PROVIDED, NEVERTHELESS, that if (i) the Grantor shall pay and perform in full
when due the Obligations and shall duly and timely perform and observe all of the covenants and
conditions herein and in the other Loan Documents required to be performed and observed by
the Grantor, and (ii) the Lender shall have no further obligation to make any further
disbursements of the Loan to or for the benefit of Grantor under the provisions of the Loan
Agreement, then the Lender shall execute and deliver to the Grantor such instruments as may be
reasonably requested by the Grantor which are sufficient to release this Security Instrument.
THE GRANTOR FURTHER COVENANTS AND AGREES AS FOLLOWS:
1. Grantor's Covenants.
(a) The Recitals and Grant set forth above are true and correct and incorporated
herein by reference.
(b) Title. Phase I hereby covenants with and warrants to Beneficiary and to the
purchaser at any foreclosure sale: (i) that at the execution and delivery hereof, it is
well seized of the Mortgaged Property, and of a good, indefeasible estate therein,
in fee simple, and that this Security Instrument is a first and prior lien on the
Mortgaged Property; (ii) that the Mortgaged Property is free from all
encumbrances whatsoever (and any claim of any other person thereto) other than
(A) the security interest granted to Beneficiary herein and pursuant to the Loan
Documents and (B) the Permitted Encumbrances, that it has good and lawful
right to sell, mortgage, encumber and convey the Mortgaged Property; and (iii)
that it and its successors and assigns will forever warrant and defend the
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Mortgaged Property against all claims and demands whatsoever with the
exception of the Permitted Encumbrances.
(c) Performance of Secured Obligations. Grantor shall, prior to the expiration of any
grace period: (i) pay the Obligations when due, and (ii) duly and punctually
perform and observe all of the covenants and conditions to be performed or
observed by the Grantor as provided in the Note, the Loan Agreement, this
Security Instrument and the other Loan Documents.
(d) Repair/Maintenance. Grantor shall (i) maintain, repair, restore, replace or rebuild
any portion of the Mortgaged Property which may be damaged or destroyed in
accordance with the requirements of the Loan Agreement; (ii) keep the
Mortgaged Property in good condition and repair, free from waste; (iii) pay all
operating costs and expenses of the Mortgaged Property when due; (iv) comply
with all Applicable Laws, observe and comply with any conditions and
requirements necessary to preserve and extend any and all rights, licenses, permits
(including without limitation zoning variances, special exceptions and
nonconforming uses), privileges, franchises and concessions that are applicable to
all or any portion of the Mortgaged Property or the use and occupancy thereof, (v)
refrain from any action, and correct any condition known to the Grantor, which
would materially increase the risk of fire or other hazard to the Mortgaged
Property or any portion thereof; and (vi) cause the Mortgaged Property to be
managed in a competent and professional manner.
(e) Alteration of Mortgaged Property. Without the prior written consent of
Beneficiary, Grantor shall not cause, suffer or permit (i) any material alteration of
the Mortgaged Property, except as required by any applicable legal requirement or
as otherwise contemplated by the Loan Agreement; (ii) any change in the zoning
classification or intended use or occupancy of the Mortgaged Property, including
without limitation any change which would increase any fire or other hazard; (iii)
any change in the identity of the Grantor or the person or entity responsible for
managing the Mortgaged Property except as otherwise permitted pursuant to the
terms of Section 4(a)(ii)(d) of this Security Instrument; or (iv) any modification of
the licenses, permits, privileges, franchises, covenants, conditions or declarations
of use applicable to the Mortgaged Property except as necessary to construct and
operate the project contemplated by the Loan Agreement. Further, Grantor shall
not, without the consent of Beneficiary, impose any restrictions, agreements or
covenants which run with the land upon the Mortgaged Property or any part
thereof, nor plat, re -plat, subdivide, re -subdivide or record condominium
documents against the Mortgaged Property, except as required to operate the
Mortgaged Property in the manner required hereunder or required by the terms of
the PSDA (specifically, the Developer CC&Rs as defined in the PSDA). The
Developer CC&Rs and any related condominium subdivision and/or plan
("Condo Subdivision") shall be subject to Beneficiary's review and approval in
accordance with the terms of the Loan Documents. If the Developer CC&Rs and
Condo Subdivision are reasonably acceptable to Beneficiary, Beneficiary shall
into a commercially reasonable form of recordable consent and subordination
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evidencing its consent to the same and subordination of this Security Instrument
and the lien created hereunder to the Developer CC&Rs and a commercially
reasonable form of consent to the Condo Subdivision subject to Grantor's
execution and delivery of any Project Component Appurtenant Documents
required under the Loan Documents including without limitation a commercially
reasonable assignment of declarants rights under any Condo Subdivision.
(f) Organizational Documents of Grantor. Except as may be incident to a Permitted
Transfer, the Borrower Operating Agreement, or the organizational documents of
any Material Constituent Entity shall not, without the prior written consent of the
Beneficiary, be amended or modified in any material respect, nor shall any direct
or indirect Constituent Entity be released or discharged from its, his or her
obligations under the Grantor's Certificate of Formation or Operating Agreement,
nor, other than to Beneficiary, shall any Material Constituent Entity transfer,
pledge or encumber in any way any interest in the Grantor or the right to receive
income or proceeds from the Grantor. At all times prior to the repayment of the
Loan, SRDC shall be the sole member of Phase I and Phase I shall be the sole
member of the other entities comprising the Grantor, and at all times prior to
repayment of the Loan, Robert Green, directly or indirectly shall Control SRDC.
(g) Continuing Existence; Merger:position of Assets. Grantor shall not (i) permit
itself to be dissolved or its existence terminated, (ii) except as contemplated under
Section 4(a)(ii) of this Security Instrument, change its capital structure, (iii) merge
or consolidate with any entity, (iv) except as contemplated under Section 4(a)(ii)
of this Security Instrument, amend or change the Borrower Entity Documents or
(v) except as contemplated under Section 4(a)(ii) of this Security Instrument, sell,
lease, transfer or otherwise dispose of, or grant any person an option to acquire, or
sell and leaseback, all or any portion of its assets, whether now owned or hereafter
acquired other than Obsolete Collateral (defined below), except for a bona fide
sales of inventory in the ordinary course of business and dispositions of property
which is obsolete and not used or useful in its business.
(h) Compliance with Applicable Laws. The Grantor shall comply with all Applicable
Laws. Grantor shall obtain and maintain any and all licenses, permits, franchises,
governmental authorizations, patents, trademarks, copyrights or other rights
necessary for the ownership of the Mortgaged Property and the advantageous
conduct of its business and as may be required from time to time by Applicable
Laws.
(i) Insurance. The Grantor shall obtain and maintain or cause to be obtained and
maintained, in full force and effect at all times insurance with respect to Grantor
and the Mortgaged Property as required pursuant to the Loan Agreement.
(j) Stamp and other Taxes. If the Federal, or any state, county, local, municipal or
other government or any subdivision of any thereof having jurisdiction, shall levy,
assess or charge any tax (excepting therefrom any income tax on the Beneficiary's
receipt of interest payments on the principal portion of the Obligations),
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assessment or imposition upon this Security Instrument, any of the other
Obligations, or any of the other Loan Documents, the interest of the Beneficiary
in the Mortgaged Property, or any of the foregoing, or upon the Beneficiary by
reason of or as holder of any of the foregoing, or shall at any time or times require
revenue stamps to be affixed to this Security Instrument or any of the other Loan
Documents, the Grantor shall pay, or cause to be paid, all such taxes and stamps
to or for the Beneficiary as they become due and payable. If any law or
regulation is enacted or adopted permitting, authorizing or requiring any tax,
assessment or imposition to be levied, assessed or charged, which law or
regulation prohibits the Grantor from paying the tax, assessment, stamp, or
imposition to or for the Beneficiary, then such event shall constitute an Event of
Default hereunder and all sums hereby secured shall become immediately due and
payable at the option of the Beneficiary.
(k) Eminent Domain. In case the Mortgaged Property, or any part or interest in any
thereof, is taken by condemnation or eminent domain, all condemnation awards
are to be settled, assigned and applied in accordance with the terms of the Loan
Agreement. Grantor has assigned to the Beneficiary all of its right, title and
interest in, to and under all condemnation awards as provided in the Loan
Agreement.
(1) Delivery of Documents. Grantor will at all times deliver to Beneficiary either all
of its executed originals (in the case of chattel paper or instruments) or (in all
other cases), if requested by Beneficiary, certified copies of all Leases (as defined
in the Loan Agreement), agreements creating or evidencing intangibles, Plans,
Construction Contracts (as defined in the Loan Agreement), contracts for services,
contracts for sale, all amendments and supplements thereto, and any other
document which is, or which evidences, governs, or creates, the Mortgaged
Property.
(m) Changes in Use; Zoning. Unless required by Applicable Laws, or unless
Beneficiary has otherwise first agreed in writing, the Grantor shall not make or
allow any changes to be made in the nature of the occupancy or use of the
Mortgaged Property or any portion thereof for which the Mortgaged Property or
such portion was intended at the time this Security Instrument was delivered. The
Grantor shall not initiate or acquiesce in any change in any zoning or other land
use classification now or hereafter in effect and affecting the Mortgaged Property
or any part thereof without in each case obtaining the Beneficiary's prior written
consent thereto.
(n) Acceptance of Trust; Powers and Duties of Trustee.
(i) Trustee accepts this trust when this Security Instrument is recorded.
Except as may be required by Applicable Laws, Trustee or Beneficiary
may from time to time apply to any court of competent jurisdiction for aid
and direction in the execution of the trust hereunder and the enforcement
of the rights and remedies available hereunder, and may obtain orders or
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decrees directing or confirming or approving acts in the execution of said
trust and the enforcement of said remedies.
(ii) Trustee shall not be required to take any action toward the execution and
enforcement of the trust hereby created or to institute, appear in, or defend
any action, suit, or other proceeding in connection therewith where, in its
opinion, such action would be likely to involve it in expense or liability,
unless requested so to do by a written instrument signed by Beneficiary
and, if Trustee so requests, unless Trustee is tendered security and
indemnity satisfactory to Trustee against any and all cost, expense, and
liability arising therefrom. Trustee shall not be responsible for the
execution, acknowledgment, or validity of the Loan Documents, or for the
proper authorization thereof, or for the sufficiency of the lien and security
interest purported to be created hereby, and Trustee makes no
representation in respect thereof or in respect of the rights, remedies, and
recourses of Beneficiary.
(iii) With the approval of Beneficiary, Trustee shall have the right to take any
and all of the following actions: (i) to select, employ, and advise with
counsel (who may be, but need not be, counsel for Beneficiary) upon any
matters arising hereunder, including the preparation, execution, and
interpretation of the Loan Documents, and shall be fully protected in
relying as to legal matters on the advice of counsel, (ii) to execute any of
the trusts and powers hereof and to perform any duty hereunder either
directly or through its agents or attorneys, (iii) to select and employ, in and
about the execution of its duties hereunder, suitable accountants, engineers
and other experts, agents and attorneys in fact, either corporate or
individual, not regularly in the employ of Trustee, and Trustee shall not be
answerable for any act, default, negligence, or misconduct of any such
accountant, engineer or other expert, agent or attorney in fact, if selected
with reasonable care, or for any error of judgment or act done by Trustee
in good faith, or be otherwise responsible or accountable under any
circumstances whatsoever, except for Trustee's gross negligence or bad
faith, and (iv) any and all other lawful action as Beneficiary may instruct
Trustee to take to protect or enforce Beneficiary's rights hereunder.
Trustee shall not be personally liable in case of entry by Trustee, or
anyone entering by virtue of the powers herein granted to Trustee, upon
the Mortgaged Property for debts contracted for or liability or damages
incurred in the management or operation of the Mortgaged Property.
Trustee shall have the right to rely on any instrument, document, or
signature authorizing or supporting any action taken or proposed to be
taken by Trustee hereunder, believed by Trustee in good faith to be
genuine. Trustee shall be entitled to reimbursement permitted under
Applicable Law for expenses incurred by Trustee in the performance of
Trustee's duties hereunder and to reasonable compensation for such of
Trustee's services hereunder as shall be rendered. GRANTOR WILL,
FROM TIME TO TIME, PAY THE COMPENSATION DUE TO
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TRUSTEE HEREUNDER AND REIMBURSE TRUSTEE FOR, AND
INDEMNIFY AND HOLD HARMLESS TRUSTEE AGAINST, ANY
AND ALL LIABILITY AND EXPENSES WHICH MAY BE
INCURRED BY TRUSTEE IN THE PERFORMANCE OF TRUSTEE'S
DUTIES, IN ALL INSTANCES IN SUCH AMOUNTS PERMITTED
UNDER APPLICABLE LAW.
(iv) All moneys received by Trustee shall, until used or applied as herein
provided, be held in trust for the purposes for which they were received,
but need not be segregated in any manner from any other moneys (except
to the extent required by Applicable Laws) and Trustee shall be under no
liability for interest on any moneys received by Trustee hereunder.
(v) Should any deed, conveyance, or instrument of any nature be required
from Grantor by any Trustee or substitute Trustee to more fully and
certainly vest in and confirm to the Trustee or substitute Trustee such
estates, rights, powers, and duties, then, upon request by the Trustee or
substitute Trustee, any and all such deeds, conveyances and instruments
shall be made, executed, acknowledged, and delivered and shall be caused
to be recorded and/or filed by Grantor.
(vi) By accepting or approving anything required to be observed, performed,
or fulfilled or to be given to Trustee pursuant to the Loan Documents,
including without limitation, any deed, conveyance, instrument, officer's
certificate, balance sheet, statement of profit and loss or other financial
statement, survey, appraisal, or insurance policy, Trustee shall not be
deemed to have warranted, consented to, or affirmed the sufficiency,
legality, effectiveness, or legal effect of the same, or of any term,
provision, or condition thereof, and such acceptance or approval thereof
shall not be or constitute any warranty or affirmation with respect thereto
by Trustee.
(o) Trustee Compensation; Exculpation; Indemnification.
(i) Grantor shall pay Trustee's fees to the fullest extent permitted under
Applicable Law and reimburse Trustee for expenses in the administration
of this trust, including attorneys' fees. Grantor shall pay to Beneficiary
reasonable compensation for services rendered concerning this Security
Instrument, including without limit any statement of amounts owing under
any Obligations. Beneficiary shall not directly or indirectly be liable to
Grantor or any other person as a consequence of (i) the exercise of the
rights, remedies or powers granted to Beneficiary in this Security
Instrument; (ii) the failure or refusal of Beneficiary to perform or
discharge any obligation or liability of Grantor under any agreement
related to the Mortgaged Property or under this Security Instrument; or
(iii) any loss sustained by Grantor or any third party resulting from
Beneficiary's failure (whether by malfeasance, nonfeasance or refusal to
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act) to lease the Improvements after an Event of Default (as defined
below) or from any other act or omission (regardless of whether same
constitutes negligence) of Beneficiary in managing the Improvements after
an Event of Default (as defined below) unless the loss is caused by the
gross negligence or willful misconduct of Beneficiary and no such liability
shall be asserted against or imposed upon Beneficiary, and all such
liability is hereby expressly waived and released by Grantor.
(ii) GRANTOR INDEMNIFIES TRUSTEE AND BENEFICIARY
AGAINST, AND HOLDS TRUSTEE AND BENEFICIARY
HARMLESS FROM, ALL LOSSES, DAMAGES, LIABILITIES,
CLAIMS, CAUSES OF ACTION, JUDGMENTS, COURT COSTS,
ATTORNEYS' FEES AND OTHER LEGAL EXPENSES, COST OF
EVIDENCE OF TITLE, COST OF EVIDENCE OF VALUE, AND
OTHER EXPENSES WHICH EITHER MAY SUFFER OR INCUR: (i)
BY REASON OF THIS SECURITY INSTRUMENT; (ii) BY REASON
OF THE EXECUTION OF THIS SECURITY INSTRUMENT OR IN
PERFORMANCE OF ANY ACT REQUIRED OR PERMITTED
HEREUNDER OR BY APPLICABLE LAWS; (iii) AS A RESULT OF
ANY FAILURE OF GRANTOR TO PERFORM GRANTOR'S
OBLIGATIONS SECURED BY THIS SECURITY INSTRUMENT; OR
(iv) BY REASON OF ANY ALLEGED OBLIGATION OR
UNDERTAKING ON BENEFICIARY'S PART TO PERFORM OR
DISCHARGE ANY OF THE REPRESENTATIONS, WARRANTIES,
CONDITIONS, COVENANTS OR OTHER OBLIGATIONS
CONTAINED IN ANY OTHER DOCUMENT RELATED TO THE
MORTGAGED PROPERTY, EXCEPT FOR THE GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT OF BENEFICIARY OR
TRUSTEE. THE ABOVE OBLIGATION OF GRANTOR TO
INDEMNIFY AND HOLD HARMLESS TRUSTEE AND
BENEFICIARY SHALL SURVIVE THE RELEASE AND
CANCELLATION OF THE OBLIGATIONS AND THE RELEASE
AND RECONVEYANCE OR PARTIAL RELEASE AND
RECONVEYANCE OF THIS SECURITY INSTRUMENT.
(iii) Grantor shall pay all amounts and indebtedness arising under this Section
if o) immediately upon demand by Trustee or Beneficiary together with
interest thereon from the date the indebtedness arises at the rate of interest
then applicable to the principal balance of the Loan as specified in the
Loan Agreement.
(p) Substitution of Trustee. From time to time, by a written instrument, signed and
acknowledged by Beneficiary and recorded in the Office of the Recorder of the
County in which the Mortgaged Property is situated, Beneficiary may appoint
another trustee to act in the place and stead of Trustee or any successor. Such
written instrument shall set forth any information required by Applicable Laws.
The recordation of such instrument of substitution shall discharge Trustee herein
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named and shall appoint the new trustee as the trustee hereunder with the same
effect as if originally named Trustee herein. A writing recorded pursuant to the
provisions of this Section 1(p) shall be conclusive proof of the proper substitution
of such new Trustee.
2. Liens, Contest and Defense of Title.
(a) The Grantor shall not create or suffer or permit any lien, charge or encumbrance
to attach to or be filed against the Mortgaged Property or any part thereof, or
interest thereon, or any other rights and properties conveyed, mortgaged,
transferred and granted hereunder (except for Permitted Encumbrances), whether
such lien, charge or encumbrance is on a parity, inferior or superior to the lien of
this Security Instrument, including liens for labor or materials with respect to the
Mortgaged Property (collectively, "Mechanic's Liens").
(b) Notwithstanding paragraph (a) of this Section 2, the Grantor may in good faith
and with reasonable diligence contest the validity or amount of any Mechanic's
Liens and defer payment and discharge thereof during the pendency of such
contest, provided that: (i) such contest shall prevent the sale or forfeiture of the
Mortgaged Property, or any part thereof or any interest therein, to satisfy such
Mechanic's Liens and shall not result in a forfeiture or impairment of the lien of
this Security Instrument; and (ii) within thirty (30) days after the Grantor has been
notified of the filing of any such Mechanic's Liens, Grantor shall have notified
the Beneficiary in writing of the Grantor's intention to contest such Mechanic's
Liens, or to cause such other party to contest such Mechanic's Liens, and shall
have obtained a title insurance endorsement over such Mechanic's Liens in form
and substance reasonably satisfactory to the Beneficiary, insuring the Beneficiary
against loss or damage by reason of such Mechanic's Liens; provided that in lieu
of such title insurance endorsement the Grantor may deposit and keep on deposit
with the Beneficiary (or such depositary as may be designated by the Beneficiary)
a sum of money sufficient, in the judgment of the Beneficiary, to pay in full such
Mechanic's Liens and all interest thereon. Any such deposits are to be held
without any allowance of interest and may be used by the Beneficiary, for itself,
in its sole discretion to protect the priority of this Security Instrument. In case the
Grantor shall fail to maintain such title insurance or deposit, or to prosecute or
cause the prosecution of such contest with reasonable diligence, or to pay or cause
to be paid the amount of the Mechanic's Lien, plus any interest finally determined
to be due upon the conclusion of such contest; then the Beneficiary may, at its
option, apply any money and liquidate any securities then on deposit with the
Beneficiary (or other depositary designated by the Beneficiary) in payment of or
on account of such Mechanic's Liens, or that part thereof then unpaid, together
with all interest thereon according to any written bill, notice or statement, without
inquiring into the amount, validity or enforceability thereof. If the amount of
money so deposited shall (in the Beneficiary's sole and absolute judgment) be
insufficient for the payment in full of such Mechanic's Liens, together with all
interest thereon, then Grantor shall forthwith, upon demand, deposit with the
Beneficiary (or other depositary designated by the Beneficiary) the sum which
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shall (in Beneficiary's sole and absolute judgment, when added to the funds then
on deposit with Beneficiary) be necessary to make such payment in full (or such
other security as shall be reasonably satisfactory to Beneficiary). If a Mechanic's
Lien claim is ultimately resolved in the claimant's favor, then the monies so
deposited shall be applied in full payment of such Mechanic's Lien or that part
thereof then unpaid, together with all interest thereon (provided no Event of
Default shall then exist) when the Beneficiary has been furnished with
satisfactory evidence of the amount of payment to be made. Any excess monies
remaining on deposit with the Beneficiary (or other depositary) under this Section
shall be paid to the Grantor, provided that no Event of Default shall then
exist.
(c) If the lien and security interest of the Beneficiary in or to the Mortgaged Property,
or any part thereof, shall be endangered or shall be attacked, directly or indirectly,
the Grantor shall immediately notify the Beneficiary and shall appear in and
defend any action or proceeding purporting to affect the Mortgaged Property, or
any part thereof, and shall file and prosecute such proceedings and take all actions
necessary to preserve and protect such title, lien and security interest in and to the
Mortgaged Property.
(d) Third Party Agreements.
(i) Performance of Obligations. The Grantor will, for the benefit of the
Beneficiary, fully and promptly keep, observe, perform and satisfy each
obligation, condition, covenant, and restriction of the Grantor affecting the
Mortgaged Property or imposed on it under any Third Party Agreements
so that there will be no default thereunder and so that the persons (other
than the Grantor) obligated thereon shall be and remain at all times
obligated to perform for the benefit of the Beneficiary. The Grantor will
not permit to exist any condition, event or fact which could allow or serve
as a basis or justification for any such person to avoid such performance.
The Grantor shall promptly deliver to Beneficiary copies of any demands
or notices of default sent or received by the Grantor in connection with
any Third Party Agreement and allow the Beneficiary the right but not the
obligation, for itself, to cure any such default. For purposes hereof, "Third
Party greements" shall mean all agreements between the Grantor (or its
predecessor(s) in title) relating to the Mortgaged Property or the
Obligations secured hereby, including, without limitation all reciprocal
easement agreements and covenants, conditions and restrictions affecting
the Mortgaged Property, the Project Agreements, the Construction
Contracts, the Hotel Documents, contracts for sale, contracts for services,
the intangibles and any other document imposing an obligation, covenant
or restriction against the Mortgaged Property or Grantor.
(ii) Enforceability. In addition, the Grantor will enforce, at its expense, each
and every material obligation of the parties (other than the Grantor) under
the Third Party Agreements. Without the prior written consent of the
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Beneficiary, the Grantor shall not (i) collect the proceeds of any
intangibles more than thirty (30) days before the same shall be due and
payable; (ii) modify, amend, cancel or terminate any of the Third Party
Agreements if the same would adversely affect the Mortgaged Property or
Beneficiary's security therein in any material respect, or (iii) in any other
manner impair Beneficiary's rights and interest with respect to the Third
Party Agreements.
3. Security Agreement and Fixture Filing.
(a) Grant of Security Interest. This Security Instrument shall constitute a security
agreement as that term is used in the Uniform Commercial Code of California
(the "CA UCC") and Grantor hereby grants and assigns to Beneficiary, for itself,
as additional collateral for and to secure the Obligations, a security interest in all
of the Personal Property. Beneficiary shall have all of the rights and remedies of
a secured party under the CA UCC, as well as all other rights and remedies
available at law or in equity.
(b) Perfection. Grantor hereby consents to any instrument that may be requested by
Beneficiary to publish notice or protect, perfect, preserve, continue, extend, or
maintain the security interest and lien, and the priority thereof, of this Security
Instrument or the interest of Beneficiary in the Personal Property, including,
without limitation, deeds of trust, security agreements, financing statements,
continuation statements, and instruments of similar character, and Grantor shall
pay or cause to be paid (i) all filing and recording taxes and fees incident to each
such filing or recording, (ii) all expenses, including without limitation, actual
attorneys' fees and costs (of both in house and outside counsel), incurred by
Beneficiary in connection with the preparation and acknowledgement of all such
instruments, and (iii) all federal, state, county and municipal stamp taxes and
other taxes, duties, imposts, assessments, and charges arising out of or in
connection with the delivery of such instruments. Grantor hereby consents to, and
hereby ratifies, the filing of any financing statements relating to the Loan made
prior to the date hereof. Grantor hereby irrevocably constitutes and appoints
Beneficiary, for the benefit of itself, as the attorney -in -fact of Grantor, to file with
the appropriate filing office any such instruments. In addition, Grantor hereby
authorizes Beneficiary to cause any financing statement or fixture filing to be
filed or recorded without the necessity of obtaining the consent of Grantor.
(c) Rights of Beneficiary. In addition to Beneficiary's rights as a "Secured Party"
under the CA UCC, Beneficiary may, but shall not be obligated to, at any time
without notice and at the expense of Grantor: (a) give notice to any person of
Beneficiary's rights hereunder and enforce such rights at law or in equity;
(b) insure, protect, defend and preserve the Personal Property or any rights or
interests of Beneficiary therein; (c) inspect the Personal Property; and (d) endorse,
collect and receive any right to payment of money owing to Grantor under or
from the Personal Property. Notwithstanding the above, in no event shall
Beneficiary be deemed to have accepted any property other than cash in
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satisfaction of any obligation of Grantor to Beneficiary or to any Bank unless
Beneficiary or such other Bank shall make an express written election of said
remedy under CA UCC §9620, or other applicable law.
(d) Power of Attorney. Grantor hereby irrevocably appoints Beneficiary as Grantor's
attorney -in -fact (such agency being coupled with an interest), and as such
attorney -in -fact Beneficiary may, without the obligation to do so, in Beneficiary's
name, or in the name of Grantor, prepare, execute and file or record financing
statements, continuation statements, applications for registration and like papers
necessary to create, perfect or preserve any of Beneficiary's' security interests and
rights in or to any of the Personal Property, and, upon and during the continuance
of an Event of Default hereunder, take any other action required of Grantor;
provided, however, that Beneficiary as such attorney -in -fact shall be accountable
only for such funds as are actually received by Beneficiary.
(e) Rights of Beneficiary upon Event of Default. Upon the occurrence and during the
continuance of an Event of Default, then in addition to all of Beneficiary's rights
as a "Secured Party" under the CA UCC or otherwise at law, and to the fullest
extent not prohibited by Applicable Laws:
(i) Beneficiary may (i) upon written notice, require Grantor to assemble any
or all of the Personal Property and make it available to Beneficiary at a
place designated by Beneficiary; (ii) without prior notice, enter upon the
Land or other place where any of the Personal Property may be located
and take possession of, collect, sell, lease, license and dispose of any or all
of the Personal Property, and store the same at locations acceptable to
Beneficiary at Grantor's expense; (iii) sell, assign and deliver at any place
or in any lawful manner all or any part of the Personal Property and bid
and become the purchaser at any such sales; and
(ii) Beneficiary may, for the account of Grantor and at Grantor's expense: (i)
operate, use, consume, sell, lease, license or dispose of the Personal
Property as Beneficiary deems appropriate; (ii) enter into any agreement,
compromise, or settlement, including insurance claims, which Beneficiary
may deem desirable or proper with respect to any of the Personal Property;
and (iii) endorse and deliver evidences of title for, and receive, enforce
and collect by legal action or otherwise, all indebtedness and obligations
now or hereafter owing to Grantor in connection with or on account of any
or all of the Personal Property; and
(iii) In disposing of Personal Property hereunder, Beneficiary may disclaim all
warranties of title, possession, quiet enjoyment and the like. Any proceeds
of any disposition of any Personal Property may be applied by Beneficiary
to the payment of expenses incurred by Beneficiary in connection with the
foregoing, including attorneys' fees, and the balance of such proceeds may
be applied by Beneficiary, for itself, toward the payment of the
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Obligations in such order of application as Beneficiary may from time to
time elect.
Notwithstanding any other provision hereof, Beneficiary shall not be deemed to
have accepted any property other than cash in satisfaction of any obligation of
Grantor to Beneficiary unless Grantor shall make an express written election of
said remedy under CA UCC §9620, or other Applicable Laws. Trustor agrees
that Beneficiary shall have no obligation to process or prepare any Personal
Property for sale or other disposition.
(f} Place of Business. Grantor maintains its chief executive office as set forth as the
address of Grantor in Section 20 below, and Grantor will notify Beneficiary in
writing of any change in its place of business within five (5) days of such change.
(g) Fixture Filing. This Security Instrument is intended to be a financing statement
within the purview of Section 9502(c) of the CA UCC and will be recorded as a
"fixture filing" in accordance with the CA UCC.
(h) Representations and Warranties. Grantor represents and warrants that: (i) Phase I
is the record owner of the Mortgaged Property, including the Personal Property;
(ii) the Grantor's chief executive office is located in California; (iii) Grantor's
state of formation is the State of Delaware; (iv) Grantor's exact legal name is as
set forth on Page 1 of this Security Instrument; (v) Grantor's organizational
identification number is 35-2622247, as to Phase I, 83-2324493 as to SilverRock
Lodging, LLC, 83-2316598 as to SilverRock Luxury Residences, LLC and 83-
2300721 as to SilverRock Lifestyle Residences, LLC , (vi) Phase I is the owner of
the Personal Property subject to no liens, charges or encumbrances other than the
lien hereof, (vii) the Personal Property (other than Obsolete Collateral) will not be
removed from the Mortgaged Property without the consent of the unless the same
is replaced with comparable Personal Property, and (viii) no financing statement
covering any of the Personal Property or any proceeds thereof is on file in any
public office except pursuant hereto.
4. Restrictions on Transfer.
(a) The Grantor, without the prior written consent of the Beneficiary, which
Beneficiary may withhold in its sole discretion, shall not effect, suffer or permit
any Prohibited Transfer (as defined herein). Any merger or consolidation, change
in capital structure, or any conveyance, sale, assignment, transfer, lien, pledge,
mortgage, security interest or other encumbrance or alienation (or any agreement
to do any of the foregoing) (a "Transfer") of any of the following properties or
interests shall, unless otherwise is a Permitted Transfer as defined in Section
4(a)(ii) below constitute a "Prohibited Transfer":
(i) The Mortgaged Property or any part thereof or interest therein, excepting
only (x) sales or other dispositions of collateral ("Obsolete Collateral") no
longer useful in connection with the operation of the Mortgaged Property,
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provided that prior to the sale or other disposition thereof, such Obsolete
Collateral has been replaced by Collateral of at least equal value and
utility which is subject to the lien hereof with the same priority as with
respect to the Obsolete Collateral and (y) Permitted Encumbrances; or
(ii) All or any part of the direct or indirect ownership interests in the Grantor,
including, without limitation, any interests in any Constituent Entity;
notwithstanding the foregoing, Beneficiary agrees that the following
(each, a "Permitted Transfer") shall not constitute Prohibited Transfers
hereunder: (a) with respect to each holder of an indirect interest in Grantor
that is a natural person, the Transfer of such indirect interests for bona fide
estate planning purposes to the spouse, sibling, child, parent, grandparent,
grandchild, niece, nephew, aunt or uncle of such holder, or to a trust for
the benefit of such holder or for the benefit of the spouse, sibling, child,
parent, grandparent, grandchild, niece, nephew, aunt or uncle of such
holder; (b) the Transfer of indirect interests in Grantor to one or more
Affiliates of the transferor thereof; (c) the Transfer to SilverRock Luxury
Residences, LLC of Parcel 1 of Parcel Map No. 37207, in the City of La
Quinta, County of Riverside, State of California, filed in Book 242, Pages
72 through 87 of Parcel Maps, in the Office of the County Recorder of
said County (the "Parcel Map"), the Transfer to SilverRock Lodging,
LLC of Parcels 3, 4, 5, 6 and 7 of the Parcel Map and the Transfer to
SilverRock Lifestyle Residences, LLC of Parcel 9 of the Parcel Map
(concurrently with each of the foregoing Transfers described in this
Section 4(a)(ii)(c), the applicable Additional Borrower transferee shall be
deemed to have remade each of the representations and warranties set
forth in this Security Instrument with respect to itself and the applicable
Mortgaged Property, subject to Grantor's right to update the same
pursuant to Section 5.25 of the Loan Agreement); (d) the admission of one
or more investor members to Phase I and/or SilverRock Development
Company, LLC ("SRDC") and resulting change in the terms of the
operating agreement and/or certificate of formation of Phase I and/or
SRDC provided (x) such investor complies with Beneficiary's
commercially reasonable "know -your -customer" requirements; and (y)
Beneficiary has approved in its reasonable discretion any voting or
approval rights of the investor member relating to decisions of the
manager of Phase I and/or SRDC and its affiliates and/or rights to replace
such manager; provided that in connection with such approval, Lender
may impose additional transfer restrictions or conditions reasonably
acceptable to Beneficiary (including without limitation restrictions on the
direct or indirect Transfer of beneficial interests in such investor and/or
replacement guarantor or developer requirements in the event of any
replacement of the manager of Phase I and/or SRDC); and (e) Partial
Releases in accordance with Section 2.9 of the Loan Agreement; provided
that, in each case, Robert Green directly or indirectly remains in Control
of Grantor (subject to any voting or approval rights approved by
Beneficiary in accordance with this Section 4.3(a)(ii)) and continues to
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hold (directly or indirectly) 20% of the direct or indirect beneficial
interests in and to Grantor.
in each case whether any such Transfer is effected directly, indirectly, voluntarily
or involuntarily, by operation of law or otherwise; provided, however, that the
foregoing provisions of this section shall not apply (i) to liens securing the
Obligations, (ii) to the lien of current Taxes not in default, (iii) to any Transfers of
the beneficial interests, or shares of stock or partnership or joint venture interests,
as the case may be of any Constituent Entity, by or on behalf of an owner thereof
who is deceased or declared judicially incompetent, to such owner's heirs,
legatees, devisees, executors, administrators, estate or personal representatives, or
(iv) to Leases permitted by the terms of the Loan Documents, if any.
(b) In determining whether or not to make the Loan, Beneficiary evaluated the
background and experience of the Grantor, Grantor's manager, the Guarantors,
and each Material Constituent Entity in owning and operating property such as the
Mortgaged Property, found it acceptable and relied and continues to rely upon
same as the means of maintaining the value of the Mortgaged Property which is
the Beneficiary's security for the Note. The Grantor, each Material Constituent
Entity, and the Guarantors are well experienced in borrowing money and owning
and operating property such as the Mortgaged Property, were ably represented by
a licensed attorney at law in the negotiation and documentation of the Loan and
bargained at arm's length and without duress of any kind for all of the terms and
conditions of the Loan, including this provision. The Grantor recognizes that the
Beneficiary is entitled to keep its loan portfolio at current interest rates by either
making new loans at such rates or collecting assumption fees and/or increasing
the interest rate on a loan, the security for which is purchased by a party other
than the original Grantor. The Grantor further recognizes that any secondary
junior financing placed upon the Mortgaged Property (i) may divert funds which
would otherwise be used to pay the Note; (ii) could result in acceleration and
foreclosure by any such junior encumbrancer which would force the Beneficiary
to take measures and incur expenses to protect its security; (iii) would detract
from the value of the Mortgaged Property should the Beneficiary come into
possession thereof with the intention of selling same; and (iv) would impair the
Beneficiary's right to accept a deed in lieu of foreclosure, as a foreclosure by the
Beneficiary would be necessary to clear the title to the Mortgaged Property. In
accordance with the foregoing and for the purposes of (a) protecting the
Beneficiary security, both of repayment and of value of the Mortgaged Property;
(b) giving the Beneficiary the full benefit of their bargain and contract with the
Grantor; (c) allowing the Beneficiary to raise the interest rate and collect
assumption fees; and (d) keeping the Mortgaged Property free of subordinate
financing liens, the Grantor agrees that if this section is deemed a restraint on
alienation, that it is a reasonable one.
5. Events of Default. Any one or more of the following events shall constitute an
"Event of Default" under this Security Instrument:
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(a) If the Grantor shall fail to make any payment required under the Loan Documents
and such payment is not cured within the applicable cure period set forth in the
Loan Documents; or
(b) If a Prohibited Transfer shall occur; or
(c) Grantor fails to perform or cause to be performed any other obligation or observe
any other condition, covenant, term, agreement or provision required to be
performed or observed by Grantor contained in this Security Instrument and not
specifically referred to elsewhere in this Section 5; provided, however, that if such
failure by its nature can be cured, then so long as the continued operation and
safety of the Mortgaged Property, and the priority, validity and enforceability of
the liens created by this Security Instrument or any of the other Loan Documents
and the value of the Mortgaged Property, are not impaired, threatened or
jeopardized, then Grantor shall have a period (the "Cure Period") of thirty (30)
days after such failure to cure the same and an Event of Default shall not be
deemed to exist during the Cure Period (provided, however, such period shall be
limited to ten (10) days if such failure can be cured by the payment of money);
provided further that if Grantor commences to cure such failure during the Cure
Period and is diligently and in good faith attempting to effect such cure, the Cure
Period shall be extended for sixty (60) additional days, but in no event shall the
Cure Period be longer than ninety (90) days in the aggregate; or
(d) If any Event of Default occurs under the Loan Agreement or any other Loan
Document, including, without limitation, nonpayment by Grantor of any Rate
Management Obligation when due or the breach by Grantor of any term,
provision or condition contained in any Rate Management Agreement.
6. Remedies. Upon the occurrence and during the continuance of an Event of
Default (regardless of the pendency of any proceeding which has or might have the effect of
preventing Grantor from complying with the terms of this Security Instrument), and in addition
to such other rights as may be available under any other Loan Document or under Applicable
Laws, but subject at all times to any mandatory legal requirements:
(a) Acceleration. Beneficiary may declare the outstanding principal balance of the
Note and all unpaid indebtedness of Grantor hereby secured, including interest
then accrued thereon, to be forthwith due and payable, whereupon the same shall
become and be forthwith due and payable, without other notice or demand of any
kind (and upon the occurrence of any Event of Default described in Section
11.1 e (i.e, bankruptcy of Grantor or any Guarantor) of the Loan Agreement,
such indebtedness shall automatically become due and payable without any action
by Beneficiary).
(b) Uniform Commercial Code. Beneficiary shall, with respect to the Personal
Property, have all the rights, options and remedies of a secured party under the
CA UCC, including without limitation, the right to the possession of any such
property or any part thereof, and the right to enter with legal process any premises
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where any such property may be found. Any requirement of the CA UCC for
reasonable notification shall be met by mailing written notice to Grantor at its
address set forth in Section 20 hereof at least ten (10) days prior to the sale or
other event for which such notice is required. Any such sale may be held as part
of and in conjunction with any foreclosure sale of the other properties and rights
constituting the Mortgaged Property in order that the Mortgaged Property,
including the Personal Property, may be sold as a single parcel if the Beneficiary
elects. The Grantor hereby agrees that if the Beneficiary demands or attempts to
take possession of the Personal Property or any portion thereof in exercise of its
rights and remedies hereunder, the Grantor will promptly turn over and deliver
possession thereof to the Beneficiary, and the Grantor authorizes, to the extent the
Grantor may now or hereafter lawfully grant such authority, the Beneficiary, its
employees and agents, and potential bidders or purchasers to enter upon the
Mortgaged Property or any other office, building or property where the Personal
Property or any portion thereof may at the time be located (or believed to be
located) and the Beneficiary may (i) remove the same therefrom or render the
same inoperable (with or without removal from such location); (ii) repair, operate,
use or manage the Personal Property or any portion thereof; (iii) maintain, repair
or store the Personal Property or any portion thereof; (iv) view, inspect and
prepare the Personal Property or any portion thereof for sale, lease or disposition;
(v) sell, lease, dispose of or consume the same or bid thereon; or (vi) incorporate
the Personal Property or any portion thereof into the Land or the Improvements or
Fixtures and sell, convey or transfer the same. The expenses of retaking, selling
and otherwise disposing of the Personal Property, including reasonable attorneys'
fees and legal expenses incurred in connection therewith, shall constitute so much
additional Obligations and shall be payable upon demand with interest at the
Default Rate until paid to Beneficiary.
(c) Foreclosure. Beneficiary may proceed to protect and enforce the rights of
Beneficiary for itself hereunder (i) by any action at law, suit in equity or other
appropriate proceedings, whether for the specific performance of any agreement
contained herein, or for an injunction against the violation of any of the terms
hereof, or in aid of the exercise of any power granted hereby or by law, or (ii) by
the foreclosure of this Security Instrument. In any suit to foreclose the lien
hereof, there shall be allowed and included as additional Obligations in the decree
of sale, all expenditures and expenses authorized by the foreclosure laws of the
State of California, as from time to time amended (the "Foreclosure Laws") and
all other expenditures and expenses which may be paid or incurred by or on
behalf of Beneficiary for attorneys' fees, appraiser's fees, outlays for
documentary and expert evidence, stenographer's charges, publication costs, and
costs (which may be reasonably estimated as to items to be expended after entry
of the decree) of procuring all such abstracts of title, title searches and
examinations, title insurance policies, and similar data and assurance with respect
to title as Beneficiary may deem reasonably necessary either to prosecute such
suit or to evidence to bidders at sales which may be had pursuant to such decree
the true conditions of the title to or the value of the Mortgaged Property. All
expenditures and expenses of the nature mentioned in this paragraph, and such
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other expenses and fees as may be incurred in the protection of the Mortgaged
Property and rents and income therefrom and the maintenance of the lien of this
Security Instrument, including the reasonable fees of any attorney employed by
Beneficiary in any litigation or proceedings affecting this Security Instrument, the
Note, any of the other Loan Documents or the Mortgaged Property, including
bankruptcy proceedings, or in preparation of the commencement or defense of
any proceedings or threatened suit or proceeding, or otherwise in dealing
specifically therewith, shall be so much additional Obligations and shall be
immediately due and payable by Grantor, with interest thereon at the Default Rate
until paid to Beneficiary.
(d) Appointment of Receiver. Beneficiary shall, as a matter of right, without notice
and without giving bond to Grantor or anyone claiming by, under or through it,
and without regard to the solvency or insolvency of Grantor or the then value of
the Mortgaged Property, be entitled to have a receiver appointed pursuant to the
Foreclosure Laws of all or any part of the Mortgaged Property and the rents,
issues and profits thereof, with such power as the court making such appointment
shall confer, and Grantor hereby consents to the appointment of such receiver and
shall not oppose any such appointment. Any such receiver may, to the fullest
extent permitted under Applicable Laws, without notice, enter upon and take
possession of the Mortgaged Property or any part thereof by summary
proceedings, ejectment or otherwise, and may remove Grantor or other persons
and any and all property therefrom, and may hold, operate and manage the same
and receive all earnings, income, rents, issues and proceeds accruing with respect
thereto or any part thereof, whether during the pendency of any foreclosure or
until any right of redemption shall expire or otherwise.
(e) Taking Possession, Collecting Rents, Etc. To the fullest extent not prohibited by
Applicable Laws, upon demand by Beneficiary, Grantor shall surrender to
Beneficiary and Beneficiary may enter and take possession of the Mortgaged
Property or any part thereof personally, by its agent or attorneys or be placed in
possession pursuant to court order as mortgagee in possession or receiver as
provided in the Foreclosure Laws, and Beneficiary, in its discretion, personally,
by its agents or attorneys or pursuant to court order as mortgagee in possession or
receiver as provided in the Foreclosure Laws may enter upon and take and
maintain possession of all or any part of the Mortgaged Property, together with all
documents, books, records, papers, and accounts of Grantor relating thereto, and
may exclude Grantor and any agents and servants thereof wholly therefrom and
may, on behalf of Grantor, or in its own name as Beneficiary and under the
powers herein granted:
(i) hold, operate, manage and control all or any part of the Mortgaged
Property and conduct the business, if any, thereof, either personally or by
its agents, with full power to use such measures, legal or equitable, as in
its discretion may be deemed proper or necessary to enforce the payment
or security of the rents, issues, deposits, profits, and avails of the
Mortgaged Property, including without limitation actions for recovery of
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rent, actions in forcible detainer, and actions in distress for rent, all
without notice to Grantor;
(ii) cancel or terminate any lease or sublease of all or any part of the
Mortgaged Property for any cause or on any ground that would entitle
Grantor to cancel the same;
(iii) elect to disaffirm any lease or sublease of all or any part of the Mortgaged
Property made subsequent to this Security Instrument without
Beneficiary's prior written consent;
(iv) extend or modify any then existing Leases and make new Leases of all or
any part of the Mortgaged Property, which extensions, modifications, and
new Leases may provide for terms to expire, or for options to lessees to
extend or renew terms to expire, beyond the Maturity Date of the Loan
and the issuance of a deed or deeds to a purchaser or purchasers at a
foreclosure sale, it being understood and agreed that any such Leases, and
the options or other such provisions to be contained therein, shall be
binding upon Grantor, all persons whose interests in the Mortgaged
Property are subject to the lien hereof, and the purchaser or purchasers at
any foreclosure sale, notwithstanding any redemption from sale, discharge
of the Obligations, satisfaction of any foreclosure decree, or issuance of
any certificate of sale or deed to any such purchaser;
(v) make all necessary or proper repairs, renewals, replacements, alterations,
additions, betterments, and improvements in connection with the
Mortgaged Property as may seem judicious to Beneficiary, to insure and
reinsure the Mortgaged Property and all risks incidental to Beneficiary
possession, operation and management thereof, and to receive all rents,
issues, deposits, profits, and avails therefrom;
(vi) apply the net income, after allowing a reasonable fee for the collection
thereof and for the management of the Mortgaged Property, to the
payment of Taxes, Premiums and other charges applicable to the
Mortgaged Property, or in reduction of the Obligations in such order and
manner as Beneficiary shall select, in its sole discretion; and
(vii) receive and collect the rents, issues, profits and revenues of the Mortgaged
Property personally or through a receiver so long as an Event of Default
shall exist and during the pendency of any foreclosure proceedings and
during any redemption period, and the Grantor agrees to consent to a
receiver if it is believed necessary or desirable by the Beneficiary to
enforce its rights under this subsection. The collection of rents, issues,
profits or revenues of the Mortgaged Property by the Beneficiary shall in
no way waive the right of the Beneficiary to foreclose this Security
Instrument in the event of any said Event of Default.
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Nothing herein contained shall be construed as constituting the Beneficiary a mortgagee in
possession in the absence of the actual taking of possession of the Mortgaged Property. The
right to enter and take possession of the Mortgaged Property and use any personal property
therein, to manage, operate, conserve and improve the same, and to collect the rents, issues and
profits thereof, shall be in addition to all other rights or remedies of the Beneficiary hereunder or
afforded by law, and may be exercised concurrently therewith or independently thereof or under
the other Loan Documents. The expenses (including any receiver's fees, reasonable counsel
fees, costs and agent's compensation) incurred pursuant to the powers herein contained shall be
secured hereby which expenses Grantor promises to pay upon demand together with interest
thereon at the Default Rate until paid to the Beneficiary. The Beneficiary shall not be liable to
account to Grantor for any action taken pursuant hereto other than to account for any rents
actually received by the Beneficiary. Without taking possession of the Mortgaged Property, the
Beneficiary may, in the event the Mortgaged Property become vacant or are abandoned, take
such steps as it deems appropriate or as required by any Applicable Laws to register, maintain,
repair, protect and secure the Mortgaged Property (including hiring watchmen therefor) and all
costs incurred in so doing shall constitute so much additional Obligations payable upon demand
with interest thereon at the Default Rate.
(f) Indemnity. The Grantor hereby agrees to indemnify, defend, protect and hold
harmless Beneficiary, and their respective employees, officers and agents from
and against any and all liabilities, claims and obligations which may be incurred,
asserted or imposed upon them or any of them as a result of or in connection with
any use, operation, or lease of any of the Mortgaged Property, or any part thereof,
or as a result of Beneficiary seeking to obtain performance of any of the
obligations due with respect to the Mortgaged Property; provided, however, that
the foregoing indemnity shall not extend to such liabilities, claims or obligations
as result from the gross negligence or intentional misconduct of Beneficiary, or
their respective employees, officers or agents.
7. Compliance with Foreclosure Laws.
(a) In the event that any provision in this Security Instrument shall be inconsistent
with any provision of the Foreclosure Laws, the provisions of the Foreclosure
Laws shall take precedence over the inconsistent provisions of this Security
Instrument, but shall not invalidate or render unenforceable any other provision of
this Security Instrument that can be construed in a manner consistent with the
Foreclosure Laws.
(b) If any provision of this Security Instrument shall grant to the Beneficiary any
rights or remedies upon the occurrence of an Event of Default which are more
limited than the rights that would otherwise be vested in the Beneficiary under the
Foreclosure Laws in the absence of said provision, the Beneficiary shall be vested
with the rights granted in the Foreclosure Laws to the full extent permitted by
law.
8. Waiver of Appraisement, Valuation, Etc. Grantor shall not and will not apply
for or avail itself of any appraisement, valuation, stay, extension or exemption laws, or any so-
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called "Moratorium Laws," now existing or hereafter enacted in order to prevent or hinder the
enforcement or foreclosure of this Security Instrument, but hereby waives the benefit of such
Moratorium Laws to the fullest extent not prohibited by Applicable Laws. Grantor for itself and
all who may claim through or under it waives any and all right to have the property and estates
comprising the Mortgaged Property marshalled upon any foreclosure of the lien hereof and
agrees that any court having jurisdiction to foreclose such lien may order the Mortgaged Property
sold as an entirety to the fullest extent not prohibited by Applicable Laws. In the event of any
sale made under or by virtue of this instrument, the whole of the Mortgaged Property may be
sold in one parcel as an entirety or in separate lots or parcels at the same or different times, all as
the Beneficiary may determine in its sole discretion. The Beneficiary shall have the right to
become the purchaser at any sale made under or by virtue of this instrument and the Beneficiary
so purchasing at any such sale shall have the right to be credited upon the amount of the bid
made therefor by the Beneficiary with the amount payable to the Beneficiary out of the net
proceeds of such sale. In the event of any such sale, the outstanding principal amount of the
Loan and the other Obligations, if not previously due, shall be and become immediately due and
payable without demand or notice of any kind.
9. Costs and Expenses of Foreclosure. In any suit to foreclose the lien hereof there
shall be allowed and included as additional indebtedness in the decree for sale all expenditures
and expenses which may be paid or incurred by or on behalf of the Beneficiary for appraiser's
fees, outlays for documentary and expert evidence, stenographic charges, publication costs and
costs (which may be estimated as to items to be expended after the entry of the decree) of
procuring all such abstracts of title, title searches and examination, guarantee policies, and
similar data and assurances with respect to title as the Beneficiary may deem to be reasonably
necessary either to prosecute any foreclosure action or to evidence to the bidder at any sale
pursuant thereto the true condition of the title to or the value of the Mortgaged Property, and
attorneys' fees, all of which expenditures shall become so much additional Obligations which
Grantor agrees to pay and all of such expenditures shall be immediately due and payable with
interest thereon from the date of expenditure until paid to Beneficiary at the Default Rate.
10. Protective Advances.
(a) Advances, disbursements and expenditures made by the Beneficiary for the
following purposes, whether before and during a foreclosure, and at any time
prior to sale, and, where applicable, after sale, and during the pendency of any
related proceedings, for the following purposes, shall, in addition to those
otherwise authorized by this Security Instrument, constitute "Protective
Advances":
(i) all advances by Beneficiary in accordance with the terms of this Security
Instrument to: (A) register, preserve or maintain, repair, restore or rebuild
the Improvements upon the Mortgaged Property; (B) preserve the lien of
this Security Instrument or the priority thereof, or (C) enforce this Security
Instrument;
(ii) payments by the Beneficiary of (A) when due, installments of principal,
interest or other obligations in accordance with the terms of any prior lien
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or encumbrance; (B) when due, installments of Taxes and assessments,
general and special and all other taxes and assessments of any kind or
nature whatsoever which are assessed or imposed upon the Mortgaged
Property or any part thereof; (C) other obligations authorized by this
Security Instrument; or (D) with court approval, any other amounts in
connection with other liens, encumbrances or interests reasonably
necessary to preserve the status of title to the Mortgaged Property;
(iii) advances by Beneficiary in settlement or compromise of any claims
asserted by claimants under any prior liens;
(iv) attorneys' fees and other costs incurred: (A) in connection with the
foreclosure of this Security Instrument; (B) in connection with any action,
suit or proceeding brought by or against the Beneficiary for the
enforcement of this Security Instrument or arising from the interest of the
Beneficiary hereunder or under any of the other Loan Documents; or (C)
in the preparation for the commencement or defense of any such
foreclosure or other action;
(v) the Beneficiary's fees and costs, including attorneys' fees, arising between
the entry of judgment of foreclosure and the confirmation hearing;
(vi) advances of any amount required to make up a deficiency in deposits for
installments of Taxes and assessments and premiums as may be authorized
by this Security Instrument;
(vii) expenses properly deductible from proceeds of sale; and
(viii) expenses incurred and expenditures made by the Beneficiary for any one
or more of the following: (A) premiums for casualty and liability
insurance paid by the Beneficiary whether or not the Beneficiary or a
receiver is in possession, and all renewals thereof, (B) repair or restoration
of damage or destruction in excess of available insurance proceeds or
awards; (C) payments required or deemed by the Beneficiary to be for the
benefit of the Mortgaged Property under any grant or declaration of
easement, easement agreement, agreement with any adjoining land owners
or instruments creating covenants or restrictions for the benefit of or
affecting the Mortgaged Property; (D) shared or common expense
assessments payable to any association or corporation in which the owner
of the mortgaged real estate is a member in any way affecting the
Mortgaged Property; or (E) pursuant to any Lease or other agreement for
occupancy of the Mortgaged Property.
(b) All Protective Advances shall be so much additional Obligations, and shall
become immediately due and payable without notice and with interest thereon
from the date of the advance until paid at the Default Rate.
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(c) This Security Instrument shall be a lien for all Protective Advances as to
subsequent purchasers and judgment creditors from the time this Security
Instrument is recorded.
(d) All Protective Advances shall, except to the extent, if any, that any of the same is
clearly contrary to or inconsistent with the provisions of the Foreclosure Laws,
apply to and be included in the:
(i) determination of the amount of Obligations at any time;
(ii) indebtedness found due and owing to the Beneficiary in the judgment of
foreclosure and any subsequent supplemental judgments, orders,
adjudications or findings by the court of any additional indebtedness
becoming due after such entry of judgment, it being agreed that in any
foreclosure judgment, the court may reserve jurisdiction for such purpose;
(iii) determination of amounts deductible from sale proceeds;
(iv) application of income in the hands of any receiver or mortgagee in
possession; and
(v) computation of any deficiency judgment.
11. Application of Proceeds. The proceeds of any foreclosure sale of the Mortgaged
Property or of any sale of property pursuant to Section 6(c) hereof shall be distributed in the
following order of priority: First, on account of all costs and expenses incident to the foreclosure
or other proceedings including all such items as are mentioned in Sections 6(c) and Section 9
hereof, second, to all items, other than principal and interest evidenced by the Note, which under
the terms hereof constitute Obligations with interest thereon as herein provided; third, to all
unpaid interest on the Note; fourth, to all unpaid principal on the Note; fifth, to whomsoever
shall be lawfully entitled to the same.
12. Rights Cumulative.
(a) Each right, power and remedy herein conferred upon the Beneficiary is
cumulative and in addition to every other right, power or remedy, express or
implied, now or hereafter provided by law or in equity, and each and every right,
power, and remedy herein set forth or otherwise so existing may be exercised
from time to time concurrently or independently and as often and in such order as
may be deemed expedient by the Beneficiary.
(b) By accepting payment of any sums secured by this Security Instrument after the
due date thereof, by accepting performance of any of the Grantor's obligations
hereunder after such performance is due, or by making any payment or
performing any act on behalf of the Grantor which the Grantor was obligated but
failed to perform or pay, the Beneficiary shall not waive, nor be deemed to have
waived, their rights to require payment when due of all sums secured hereby and
the due, punctual and complete performance of the Grantor's obligations under
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this Security Instrument, the Note, and all other Loan Documents. No waiver or
modification of any of the terms of this Security Instrument shall be binding on
the Beneficiary unless set forth in writing signed by the Beneficiary and any such
waiver by the Beneficiary of any Event of Default by the Grantor under this
Security Instrument shall not constitute a waiver of any other Event of Default
under the same or any other provision hereof. If the Beneficiary holds any
additional security for any of the obligations secured hereby, it may pursue its
rights or remedies with respect to such security at its option either before,
contemporaneously with, or after a sale of the Mortgaged Property or any portion
thereof.
(c) No act or omission by the Beneficiary shall release, discharge, modify, change or
otherwise affect the liability of Grantor under the Note, this Security Instrument,
or any of the other Loan Documents, or any other obligation of the Grantor, or
any subsequent purchaser of the Mortgaged Property or any part thereof, or any
maker, co-signer, endorser, surety or guarantor, or preclude the Beneficiary from
exercising any right, power or privilege herein granted or intended to be granted
in the event of any Event of Default then made or of any subsequent Event of
Default, or alter the security interest or lien of this Security Instrument or any of
the other Loan Documents except as expressly provided in an instrument or
instruments executed by the Beneficiary. The exercise of one right, power or
remedy shall not be a waiver of the right to exercise at the same time or thereafter
any other right, power or remedy; and no delay or omission of the Beneficiary in
the exercise of any right, power or remedy accruing hereunder or under any of the
other Loan Documents or arising otherwise shall impair any such right, power or
remedy, or be construed to be a waiver of any Event of Default or acquiescence
therein. Except as otherwise specifically required herein, notice of the exercise of
any right, remedy or power granted to the Beneficiary by this Security Instrument
is not required to be given.
13. Successors and Assigns; Assignment.
(a) This Security Instrument and each and every provision hereof shall be binding
upon the Grantor and its successors and assigns (including, without limitation,
each and every record owner from time to time of the Mortgaged Property or any
other person having an interest therein), and shall inure to the benefit of the
Beneficiary, and their respective successors and assigns.
(b) All of the covenants of this Security Instrument shall run with the Land and be
binding on any successor owners of the Land. In the event that the ownership of
the Mortgaged Property or any portion thereof becomes vested in a person or
persons other than the Grantor, Beneficiary may, without notice to the Grantor,
deal with such successor or successors in interest of the Grantor with reference to
this Security Instrument and the Obligations in the same manner as with the
Grantor without in any way releasing or discharging the Grantor from its
obligations hereunder. The Grantor will give immediate written notice to the
Beneficiary of any conveyance, transfer or change of ownership of the Mortgaged
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Property, but nothing in this Section 13 shall vary or negate the provisions of
Section 4 hereof.
(c) The rights and obligations of Grantor under this Security Instrument may not be
assigned and any purported assignment by Grantor shall be null and void. The
Beneficiary (with Beneficiary's consent) shall have the right to sell, assign or
transfer portions of their respective right, title and/or interest in and to this
Security Instrument and the other Loan Documents (including the sale of
participation interests therein), without the consent or approval of Grantor, and
Grantor agrees to cooperate in all respects with the Beneficiary in connection
therewith, including, without limitation, the execution of all documents and
instruments reasonably requested by the Beneficiary or such transferee provided
that such documents and instruments do not materially adversely affect any of
Grantor's duties or obligations under this Security Instrument and the other Loan
Documents.
14. Execution of Separate Security Agreements, Financing Statements, Etc.;
Estoppel Letter; Corrective Documents.
(a) The Grantor will do, execute, acknowledge and deliver or cause to be done,
executed, acknowledged and delivered all such further acts, conveyances, Note,
mortgages, security agreements, financing statements and assurances as the
Beneficiary shall reasonably require for the better assuring, conveying,
mortgaging, assigning and confirming unto the Beneficiary all property
mortgaged hereby or property intended so to be, whether now owned by the
Grantor or hereafter acquired. Without limitation of the foregoing, the Grantor
will assign to the Beneficiary, upon request, as further security for the
Obligations, its interest in all agreements, contracts, licenses and permits affecting
the Mortgaged Property, such assignments to be made by instruments reasonably
satisfactory to the Beneficiary, but no such assignment shall be construed as a
consent by the Beneficiary to any agreement, contract, license or permit or to
impose upon the Beneficiary any obligations with respect thereto.
(b) From time to time, the Grantor will furnish, within ten (10) days after request
from Beneficiary, a written and duly acknowledged statement of the amount due
under the Note, this Security Instrument and the other Loan Documents and
whether any alleged offsets or defenses exist against the Obligations.
(c) Grantor and Beneficiary shall, at the request of the other, promptly correct any
defect, error or omission which may be discovered in the contents of this Security
Instrument or in the execution or acknowledgment hereof or in any other
instrument executed in connection herewith or in the execution or
acknowledgment of such instrument and will execute and deliver any and all
additional instruments as may be requested by Beneficiary or Grantor, as the case
may be, to correct such defect, error or omission.
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15. Subrogation. If any part of the Obligations is used directly or indirectly to pay
off, discharge or satisfy, in whole or in part, any prior lien or encumbrance upon the Mortgaged
Property or any part thereof, then by advancing the monies to make such payment, the
Beneficiary shall be subrogated to the rights of the holder thereof in and to such other lien or
encumbrance and any additional security held by such holder, and shall have the benefit of the
priority of the same.
16. Governing Law. The validity, enforcement and interpretation of this Security
Instrument shall for all purposes be governed by and construed in accordance with the laws of
the State of California, without reference to the conflicts of law principles of that State, and
applicable United States federal law, and is intended to be performed in accordance with, and
only to the extent permitted by, such laws.
17. Business Loan.
(a) The Grantor declares, represents, certifies and agrees that the proceeds of the Note
will be used solely for business purposes and that the Loan is exempt from
interest limitations and is an exempted transaction under the Truth in Lending
Act, 15 U.S.C. Section 1601 et seq.
(b) All rights, remedies and powers provided by this Security Instrument may be
exercised only to the extent that the exercise thereof does not violate any
applicable provisions of law, and all the provisions of this Security Instrument are
intended to be subject to all applicable mandatory provisions of law which may be
controlling and to be limited to the extent necessary so that they will not render
this Security Instrument invalid or unenforceable under the provisions of any
Applicable Laws.
18. Assignment of Leases and Other Agreements Affecting the Mortgaged
PropertV. In order to further secure payment of the Obligations and the observance,
performance and discharge of the Grantor's obligations under the Loan Documents, the Grantor
hereby irrevocably, absolutely and unconditionally assigns and transfers to the Beneficiary all of
the Grantor's right, title, interest and estate in, to and under all of the Leases and in and to all of
the "Rents and Profits" (defined as all rents, income, issues and profits arising from any Leases,
or other agreements affecting the use, enjoyment or occupancy of the Mortgaged Property now
or hereafter made affecting the Mortgaged Property or any portion thereof). Except during the
existence of an Event of Default, the Grantor shall be entitled to collect the Rents and Profits
(except as otherwise provided in this Security Instrument) as and when they become due and
payable. Neither these assignments nor Beneficiary's enforcement of the provisions of these
assignments (including the receipt of the Rents) will operate to subordinate the lien of this
Security Instrument to any of the rights of any tenant or other party to any other agreement
affecting the use, enjoyment or occupancy of the Mortgaged Property of all or any part of the
Mortgaged Property, or to subject Beneficiary to any liability to any such tenant for the
performance of any obligations of Grantor under any such Lease or other agreement affecting the
Mortgaged Property unless and until Beneficiary agrees to such subordination or assumes such
liability by an appropriate written instrument.
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19. Environmental Matters. Concurrently herewith, Grantor and Guarantors shall
execute and deliver an Environmental Indemnity Agreement in form satisfactory to Beneficiary
(the "Environmental Indemnity Agreement"). The performance of the covenants, undertakings
and obligations of the indemnitors under the Environmental Indemnity Agreement shall not be
secured by this Security Instrument.
20. Notices. All notices or other written communications hereunder shall be deemed
to have been properly given (i) upon delivery, if delivered in person or by electronic mail,
(ii) one (1) Business Day after having been deposited for overnight delivery with any reputable
overnight courier service, or (iii) three (3) Business Days after having been deposited in any post
office or mail depository regularly maintained by the U.S. Postal Service and sent by registered
or certified mail, postage prepaid, return receipt requested, addressed to the addresses set forth
below in this Section 20 or as such party may from time to time designate by written notice to
the other parties. Either party by notice to the other in the manner provided herein may designate
additional or different addresses for subsequent notices or communications:
To the Beneficiary: Mosaic SilverRock, LLC
c/o Mosaic Real Estate Investors, LLC
1880 Century Park East, Suite 300
Los Angeles, California 90067
Attn: Vicky Schiff
Email: vskmosaicrei.com
With a copy to: Greenberg Traurig LLP
1840 Century Park East
Suite 1900
Los Angeles, CA 90067
Attn: Michael H. Davis, Esq.
Telephone: (310) 586-7700
E-mail: davismh@gtlaw.com
To the Grantor: SilverRock Phase I, LLC
c/o the Robert Green Company
3551 Fortuna Ranch Road
Encinitas, CA 92924
Attention: Robert S. Green, Jr.
Telephone: (760) 634-6543
Email: rgreen@therobertgreencompany.com
With a copy to: Crosbie Gliner Schiffman Southard & Swanson
LLP
12750 High Bluff Dr., Suite 250
San Diego, CA 92130
Attention: Dana I. Schiffman, Esq.
Telephone (858) 367-7676
Email: dschiffman2c s�g_3.com
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21. Releases.
(a) Upon payment in full of all sums due under the Note and this Security Instrument
and the other of the Loan Documents, the Beneficiary shall, upon the request of,
and at the cost of, the Grantor, execute a proper reconveyance of this Security
Instrument.
(b) The Beneficiary may, regardless of consideration, cause the release of any part of
the Mortgaged Property from the lien of this Security Instrument without in any
manner affecting or impairing the lien or priority of this Security Instrument as to
the remainder of the Mortgaged Property not so released.
22. Indemnification by the Grantor. The Grantor shall protect and indemnify the
Beneficiary from and against all liabilities, obligations, claims, damages, penalties, causes of
action, costs and expenses (including, without limitation, reasonable attorneys' fees and
disbursements), imposed upon or incurred by or asserted against the Beneficiary or the members,
partners, shareholders, directors, officers, agents or employees of the Beneficiary (the
"Indemnitees") or by reason of (a) ownership of the Mortgaged Property or any interest therein,
or receipt of any Rents and Profits or other sum therefrom, (b) any accident to, injury to or death
of persons or loss of or damage to Mortgaged Property occurring on or about the Mortgaged
Property or the adjoining sidewalks, curbs, vaults or vault space, if any, streets or ways, (c) any
failure on the part of the Grantor or any Guarantor to perform or comply with any of the terms,
covenants, conditions and agreements set forth in this Security Instrument, the Note, any of the
other Loan Documents, or any agreement, reimbursement agreement, guaranty, or any other
agreements executed by the Grantor, or any Guarantor, or any other persons directly or indirectly
liable for the payment of the Obligations, (d) any failure on the part of the Grantor to perform or
comply with (i) any other agreement executed by the Grantor or any guarantor of the Note, or (ii)
any requirement of law, (e) payment of sums for the protection of the lien and security interest of
the Beneficiary in and to the Mortgaged Property, (f) performance of any labor or services or the
furnishing of any materials or other property in respect of the Mortgaged Property or any part
thereof for construction or maintenance or otherwise, or (g) any action brought against the
Beneficiary attacking the validity, priority or enforceability of this Security Instrument, the Note,
any other Loan Document, or any agreement, reimbursement agreement, guaranty, or any other
agreements executed by the Grantor, any Guarantor, or any other persons directly or indirectly
liable for the payment of the Obligations. Any amounts payable to the Beneficiary under this
paragraph shall bear interest at the Default Rate until paid to the Beneficiary and shall be secured
by this Security Instrument. In the event any action, suit or proceeding is brought against the
Beneficiary, or their respective members, partners, shareholders, directors, officers, agents or
employees of the Beneficiary by reason of any such occurrence, the Grantor, upon the request of
the Beneficiary and at Grantor's sole expense, shall resist and defend such action, suit or
proceeding or cause the same to be resisted and defended by counsel designated by Grantor and
approved by the Beneficiary. Such obligations under this paragraph shall survive the termination,
satisfaction or release of this Security Instrument. The obligations under this paragraph shall not
apply to matters arising from the gross negligence or willful misconduct of Beneficiary or any of
the Indemnitees.
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23. Miscellaneous.
(a) Time is of the Essence. Time is of the essence of this Security Instrument.
(b) Captions and Pronouns. The captions and headings of the various Sections of this
Security Instrument are for convenience only, and are not to be construed as
confining or limiting in any way the scope or intent of the provisions hereof.
Whenever the context requires or permits, the singular shall include the plural, the
plural shall include the singular, and the masculine, feminine and neuter shall be
freely interchangeable.
(c) Intentionally omitted.
(d) Beneficiary is not a Joint Venturer or Partner of Grantor. The Grantor and the
Beneficiary acknowledge and agree that in no event shall the Beneficiary be
deemed to be a partner or joint venturer with the Grantor. Without limitation of
the foregoing, the Beneficiary shall not be deemed to be such a partner or joint
venturer on account of its becoming a mortgagee in possession or exercising any
rights pursuant to this Security Instrument or pursuant to any other instrument or
document evidencing or securing any of the Obligations, or otherwise.
(e) Replacement of the Note(s). Upon notice to the Grantor of the loss, theft,
destruction or mutilation of any Note, the Grantor will execute and deliver, in lieu
thereof, a replacement note, identical in form and substance to such Note and
dated as of the date of such Note and upon such execution and delivery all
references in any of the Loan Documents to such Note shall be deemed to refer to
the replacement note.
(f} Waiver of Consequential Damages. To the fullest extent not prohibited by
Applicable Laws, each party covenants and agrees that in no event shall the other
be liable for consequential damages, whatever the nature of a failure by the other
to perform their respective obligations, if any, under the Loan Documents, and
each party hereby expressly waives all claims that it now or may hereafter have
against the other for such consequential damages; provided that such waiver shall
not be deemed to limit Beneficiary's right to indemnification under this Security
Instrument in connection with consequential damages asserted by a third party.
(g) After Acquired Mortgaged Property. The lien hereof will automatically attach,
without further act, to all after -acquired Mortgaged Property attached to and/or
used in connection with or in the operation of the Mortgaged Property or any part
thereof.
(h) Severability. If any provision hereof should be held unenforceable or void, then
such provision shall be deemed separable from the remaining provisions and shall
in no way affect the validity of this Security Instrument except that if such
provision relates to the payment of any monetary sum, then the Beneficiary may,
at its option declare the Obligations immediately due and payable.
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(i) Interpretation of Agreement. Should any provision of this Security Instrument
require interpretation or construction in any judicial, administrative, or other
proceeding or circumstance, it is agreed that the parties hereto intend that the
court, administrative body, or other entity interpreting or construing .the same
shall not apply a presumption that the provisions hereof shall be more strictly
construed against one party by reason of the rule of construction that a document
is to be construed more strictly against the party who itself or through its agent
prepared the same, it being agreed that the agents of both parties hereto have fully
participated in the preparation of all provisions of this Security Instrument,
including, without limitation, all Exhibits attached to this Security Instrument.
0) Intentionally omitted.
(k) Effect of Extensions and Amendments. If the payment of the Obligations, or any
part thereof, be extended or varied, or if any part of the security or guaranties
therefor be released, all persons now or at any time hereafter liable therefor, or
interested in the Mortgaged Property shall be held to assent to such extension,
variation or release, and their liability, and the lien, and all provisions hereof,
shall continue in full force and effect; the right of recourse against all such
persons being expressly reserved by the Beneficiary, notwithstanding any such
extension, variation or release.
(1) Mortgagee -in -Possession. Nothing herein contained shall be construed as
constituting the Beneficiary a mortgagee -in -possession in the absence of the
actual taking of possession of the Mortgaged Property by the Beneficiary pursuant
to this Security Instrument.
(m) No Merger. The parties hereto intend that the Security Instrument and the lien
hereof shall not merge in fee simple title to the Mortgaged Property, and if the
Beneficiary acquires any additional or other interest in or to the Mortgaged
Property or the ownership thereof, then, unless a contrary intent is manifested by
the Beneficiary as evidenced by an express statement to that effect in an
appropriate document duly recorded, this Security Instrument and the lien hereof
shall not merge in the fee simple title and this Security Instrument may be
foreclosed as if owned by a stranger to the fee simple title.
(n) Complete Agreement. This Security Instrument, the Note and the other Loan
Documents constitute the complete agreement between the parties with respect to
the subject matter hereof and the Loan Documents may not be modified, altered
or amended except by an agreement in writing signed by both the Grantor and the
Beneficiary.
(o) Further Assurances. Grantor shall execute, acknowledge and deliver, or cause to
be executed, acknowledged or delivered, any and all such further assurances and
other agreements or instruments, and take or cause to be taken all such other
actions, as shall be reasonably necessary from time to time to give full effect to
the Loan Documents and the transactions contemplated hereby and thereby.
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24. JURISDICTION AND VENUE. GRANTOR AND BENEFICIARY (BY ITS
ACCEPTANCE OF THIS SECURITY INSTRUMENT) HEREBY AGREE THAT ALL
ACTIONS OR PROCEEDINGS INITIATED BY GRANTOR OR BENEFICIARY AND
ARISING DIRECTLY OR INDIRECTLY OUT OF THIS SECURITY INSTRUMENT SHALL
BE LITIGATED IN THE SUPERIOR COURT OF RIVERSIDE COUNTY, CALIFORNIA.
GRANTOR AND BENEFICIARY (BY ITS ACCEPTANCE OF THIS SECURITY
INSTRUMENT) HEREBY EXPRESSLY SUBMIT AND CONSENT IN ADVANCE TO
SUCH JURISDICTION IN ANY ACTION OR PROCEEDING COMMENCED BY
BENEFICIARY OR GRANTOR IN ANY OF SUCH COURTS, AND HEREBY WAIVE
PERSONAL SERVICE OF THE SUMMONS AND COMPLAINT, OR OTHER PROCESS OR
PAPERS ISSUED THEREIN, AND AGREE THAT SERVICE OF SUCH SUMMONS AND
COMPLAINT OR OTHER PROCESS OR PAPERS MAY BE MADE BY REGISTERED OR
CERTIFIED MAIL ADDRESSED TO APPLICABLE PARTY AT THE ADDRESS TO
WHICH NOTICES ARE TO BE SENT PURSUANT TO THIS SECURITY INSTRUMENT.
GRANTOR AND BENEFICIARY (BY ITS ACCEPTANCE OF THIS SECURITY
INSTRUMENT) WAIVE ANY CLAIM THAT RIVERSIDE COUNTY, CALIFORNIA IS AN
INCONVENIENT FORUM OR AN IMPROPER FORUM BASED ON LACK OF VENUE.
25. Waiver of Jury Trial. TO THE EXTENT NOT PROHIBITED BY
APPLICABLE LAWS, BENEFICIARY AND GRANTOR KNOWINGLY, IRREVOCABLY,
VOLUNTARILY AND INTENTIONALLY WAIVE, TO THE FULLEST EXTENT NOT
PROHIBITED BY LAW, ANY RIGHT EITHER MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY ACTION, PROCEEDING OR COUNTERCLAIM BASED ON THIS
SECURITY INSTRUMENT, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH
THIS SECURITY INSTRUMENT OR ANY LOAN DOCUMENT, OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENT (WHETHER VERBAL OR WRITTEN)
OR ACTIONS OF ANY PARTY HERETO OR TO ANY LOAN DOCUMENT.
26. Additional Waivers. TO THE FULLEST EXTENT NOT PROHIBITED BY
APPLICABLE LAWS, GRANTOR EXPRESSLY AND UNCONDITIONALLY WAIVES, IN
CONNECTION WITH ANY SUIT, ACTION OR PROCEEDING BROUGHT BY THE
BENEFICIARY ON THIS SECURITY INSTRUMENT, ANY AND EVERY RIGHT IT MAY
HAVE TO (A) INTERPOSE ANY COUNTERCLAIM THEREIN UNLESS UNDER THE
APPLICABLE RULES OF COURT SUCH COUNTERCLAIM MUST BE ASSERTED IN
SUCH PROCEEDING, OR (B) HAVE THE SAME CONSOLIDATED WITH ANY OTHER
OR SEPARATE SUIT, ACTION OR PROCEEDING UNLESS UNDER THE APPLICABLE
RULES OF COURT SUCH SUIT, ACTION OR PROCEEDING MUST BE CONSOLIDATED
WITH THE PROCEEDING BROUGHT BY THE BENEFICIARY.
27. Compliance with Loan Agreement. Grantor will abide by and comply with and
be governed and restricted by all of the terms, covenants, provisions, restrictions and agreements
contained in the Loan Agreement, and in each and every supplement thereto or amendment
thereof which may at any time or from time to time be executed and delivered by the parties
thereto or their successors and assigns.
28. Provisions of Loan Agreement. The proceeds of the Note are to be disbursed by
the Beneficiary in accordance with the terms contained in the Loan Agreement, the provisions of
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which are incorporated herein by reference to the same extent as if fully set forth herein. Grantor
covenants that any and all monetary disbursements made in accordance with the Loan
Agreement shall constitute adequate consideration to Grantor for the enforceability of this
Security Instrument, the Note and the other Loan Documents, and that all advances and
indebtedness arising and accruing under the Loan Agreement from time to time, whether or not
the total amount thereof may exceed the face amount of aggregate total of the Note, shall be
secured by this Security Instrument. If there is any inconsistency between this Security
Agreement and the Loan Agreement, the Loan Agreement shall control.
29. Construction Loan. The Note evidences a debt created by one or more
disbursements made by Beneficiary to Grantor to finance the cost of the construction of certain
Improvements upon the Land in accordance with the provisions of the Loan Agreement, and this
Security Instrument is a construction mortgage as such term is defined in Section 9-334(h) of the
CA UCC.
30. Trustor. "Trustor" has the meaning provided in the preamble to this Security
Instrument, however, from and after any Transfer described in Section 4(a)(ii)(c), the applicable
Additional Borrower transferee shall be deemed to be a Trustor hereunder. From and after such
time as Phase I has transferred all of the Land owned by it by means of Permitted Transfers such
that Parcels 10, 11 and 12 have been sold to a third party, Parcels 3, 4, 5, 6 and 7 of the Parcel
Map are owned by SilverRock Lodging, LLC, Parcel 1 of the Parcel Map is owned by
SilverRock Luxury Residences, LLC and Parcel 9 of the Parcel Map is owned by SilverRock
Lifestyle Residences, LLC, without releasing Phase I from any obligation or liability it may have
which may predate such Permitted Transfers, the term "Trustor" shall no longer include Phase I
Trustor and shall mean, individually and collectively, only SilverRock Lodging, LLC,
SilverRock Luxury Residences, LLC and SilverRock Lifestyle Residences, LLC.
31. State Specific Provisions -- California.
(a) Principles of Construction. Notwithstanding anything contained herein to the
contrary, the provisions of this Section 30 shall govern and control.
(b) Full Reconveyance. Upon written request of Beneficiary stating that all sums
secured hereby have been paid, upon surrender to Trustee of the Note and the
original or a certified copy of this Security Instrument for cancellation and
retention, and upon payment of its fees, Trustee shall fully reconvey, without
warranty, the entire remaining Mortgaged Property then held hereunder. The
recitals in such reconveyance of any matters of facts shall be conclusive proof of
the truthfulness thereof. The grantee in such reconveyance may be described as
"the person or persons legally entitled thereto."
(c) Dwellings. Except as contemplated in the Loan Agreement, no portion of the
proceeds of the Loan shall be used by Grantor to finance the purchase or
construction of real property containing four (4) or fewer residential units or on
which four (4) or fewer residential units are to be constructed. No portion of the
Mortgaged Property is or will be a "dwelling" within the meaning of Section
10240.1 or Section 10240.2 of the California Business and Professions Code.
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(d) Indemnity Expenses. The Grantor will pay or reimburse the Trustee and the
Beneficiary for all attorneys' fees, costs and expenses incurred by either of them
in any suit, action, legal proceeding or dispute of any kind in which either of them
is made a party or appears as party plaintiff or defendant, affecting the
Obligations, this Security Instrument or the interest created herein, or the
Mortgaged Property, or any appeal thereof, including, but not limited to, activities
related to enforcement of the remedies of Beneficiary, activities related to
protection of Beneficiary's collateral, any foreclosure action or exercise of the
power of sale, any condemnation action involving the Mortgaged Property or any
action to protect the security hereof, any bankruptcy or other insolvency
proceeding commenced by or against the Grantor, and any such amounts paid or
incurred by the Trustee, Beneficiary shall be added to the Obligations and shall be
secured by this Security Instrument. The agreements of this subsection shall
expressly survive in perpetuity satisfaction of this Security Instrument and
repayment of the Obligations, any release, reconveyance, discharge of foreclosure
of this Security Instrument, conveyance by deed in lieu of foreclosure, sale, and
any subsequent transfer by trustee's conveyance of the Mortgaged Property. The
obligations under this paragraph shall not apply to matters arising from the gross
negligence or willful misconduct of Beneficiary.
(e) Supplemental Environmental Provisions. In the event that any portion of the
Mortgaged Property is determined to be "environmentally impaired" (as
"environmentally impaired" is defined in California Code of Civil Procedure
Section 726.5(e)(3)) or to be an "affected parcel" (as "affected parcel" is defined
in California Code of Civil Procedure Section 726.5(e)(1)), then, without
otherwise limiting or in any way affecting Beneficiary's or Trustee's rights and
remedies under this Security Instrument, Beneficiary may elect to exercise its
right under California Code of Civil Procedure Section 726.5(a) to (i) waive its
lien on such environmentally impaired or affected portion of the Mortgaged
Property, and (ii) exercise the rights and remedies of an unsecured creditor,
including reduction of its claim against Grantor to judgment and any other rights
and remedies permitted by Applicable Laws. For purposes of determining
Beneficiary's right to proceed as an unsecured creditor under California Code of
Civil Procedure Section 726.5(a), Grantor shall be deemed to have willfully
permitted or acquiesced in a release or threatened release of hazardous materials,
within the meaning of California Code of Civil Procedure Section 726.5(d)(1), if
the release or threatened release of hazardous materials was knowingly or
negligently caused or contributed to by any lessee, occupant or user of any portion
of the Mortgaged Property and Grantor knew or should have known of the
activity by such lessee, occupant or user which caused or contributed to the
release or threatened release. Beneficiary shall have the right under this Security
Instrument to allocate amounts recovered on the Obligations first to those portions
thereof other than damages and other amounts recoverable under California Code
of Civil Procedure Section 736, and thereafter to damages and other amounts
recoverable under said Section.
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(f) Foreclosure by Power of Sale. Should Beneficiary elect to foreclose by exercise
of the power of sale herein contained, Beneficiary shall deliver to Trustee a
written declaration of default and demand for sale, and shall deposit with Trustee
this Security Instrument and the Note and such receipts and evidence of
expenditures made and secured hereby as Trustee may require.
(i) Upon receipt of notice from Beneficiary, Trustee shall cause to be
recorded, published and delivered to Grantor such notice of default and
election to sell as is then required by Applicable Laws. Trustee shall,
without demand on Grantor, after lapse of such time as may then be
required by Applicable Laws and after recordation of such notice of
default and after notice of sale having been given as required by
Applicable Laws, sell the Mortgaged Property at the time and place of sale
fixed by it in said notice of sale, either as a whole, or in separate lots or
parcels or items and in such order as Beneficiary may direct Trustee so to
do, at public auction to the highest bidder for cash in lawful money of the
United States payable at the time of sale. Trustee shall deliver to such
purchaser or purchasers thereof its good and sufficient deed or deeds
conveying the property so sold, but without any covenant or warranty,
express or implied. The recitals in such deed of any matter or fact shall be
conclusive proof of the truthfulness thereof. Any person, including,
without limitation, Grantor, Trustee or Beneficiary, may purchase at such
sale, and Grantor hereby covenants to warrant and defend the title of such
purchaser or purchasers.
(ii) Subject to Applicable Laws, Trustee may postpone the sale of all or any
portion of the Mortgaged Property by public announcement at the time
and place of sale, and from time to time thereafter may postpone such sale
by public announcement or subsequently noticed sale, and without further
notice make such sale at the time fixed by the last postponement, or may,
in its discretion, give a new notice of sale.
(iii) Trustee shall deliver to the purchaser at such sale a deed conveying the
Mortgaged Property or portion thereof so sold, but without any covenant
or warranty, express or implied. The recitals in the deed of any matters or
facts shall be conclusive proof of the truthfulness thereof. Beneficiary
shall have the right to become the purchaser at any sale held by any
Trustee or substitute or successor Trustee, or by any receiver or public
officer. Any Beneficiary or Lender purchasing at any such sale shall have
the right to credit the secured indebtedness owing to such Beneficiary or
Lender, as applicable, upon the amount of its bid entered at such sale to
the extent necessary to satisfy such bid. Said Trustee may appoint an
attorney -in -fact to act in its stead as Trustee to conduct sale as
hereinbefore provided. Grantor authorizes and empowers the Trustee to
sell the Mortgaged Property, in lots or parcels or as a whole, and to
execute and deliver to the purchaser or purchasers thereof good and
sufficient deeds of conveyance thereto of the estate of title then existing on
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the Mortgaged Property and bills of sale with covenants of general
warranty. Grantor binds himself to warrant and forever defend the title of
such purchaser or purchasers when so made by the Trustee, and agrees to
accept proceeds of said sale, if any, which are payable to Grantor as
provided herein
(g) Separate Sales. The Mortgaged Property may be sold in one or more parcels and
in such manner and order as Beneficiary, in its sole discretion, may direct Trustee
so to do. A sale of less than the whole of the Mortgaged Property or any defective
or irregular sale made hereunder shall not exhaust the power of sale provided for
herein, and subsequent sales may be made hereunder until all Obligations has
been satisfied, or the entire Mortgaged Property sold, without defect or
irregularity.
(h) Right of Rescission. Beneficiary may from time to time rescind any notice of
default or notice of sale before any Trustee's sale in accordance with the
Applicable Laws of the State of California. The exercise by Beneficiary of such
right of rescission shall not constitute a waiver of any breach or default then
existing or subsequently occurring, or impair the right of Beneficiary to execute
and deliver to Trustee, as above provided, other declarations or notices of default
to satisfy the Obligations, nor otherwise affect any provision, covenant or
condition of this Security Instrument or any other Loan Document or any of the
rights, obligations or remedies of Trustee or Beneficiary hereunder or thereunder.
(i) Release of and Resort to Collateral. Beneficiary may release, regardless of
consideration and without the necessity for any notice to a consent by the holder
of any subordinate lien on the Mortgaged Property, any part of the Mortgaged
Property without, as to the remainder, in any way impairing, affecting,
subordinating or releasing the lien or security interests created in or evidenced by
the Loan Documents or their stature as a first and prior lien and security interest
in and to the Mortgaged Property. For payment of the Obligations, Beneficiary
may resort to any other security in such order and manner as Beneficiary may
elect.
(j) Waiver of Redemption, Notice and Marshaling of Assets. To the fullest extent
not prohibited by Applicable Laws, Grantor hereby irrevocably and
unconditionally waives and releases (i) all benefit that might accrue to Grantor by
virtue of any present or future statute of limitations or law or judicial decision
exempting the Mortgaged Property from attachment, levy or sale on execution or
providing for any appraisement, valuation, stay of execution, exemption from
civil process, redemption or extension of time for payment, (ii) all notices of any
Event of Default or of Trustee's election to exercise or his actual exercise of any
right, remedy or recourse provided for under the Loan Documents, and (iii) any
right to a marshaling of assets or a sale in inverse order of alienation.
(k) Discontinuance of Proceedings. If Beneficiary shall have proceeded to invoke
any right, remedy or recourse permitted under the Loan Documents and shall
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thereafter elect to discontinue or abandon it for any reason, Beneficiary shall have
the unqualified right to do so and, in such an event, Grantor and Beneficiary shall
be restored to their former positions with respect to the Obligations, the Loan
Documents, the Mortgaged Property and otherwise, and the rights, remedies,
recourses and powers of Beneficiary shall continue as if the right, remedy or
recourse had never been invoked, but no such discontinuance or abandonment
shall waive any Event of Default which may then exist or the right of Beneficiary
thereafter to exercise any right, remedy or recourse under the Loan Documents for
such Event of Default.
(1) No Mortgagee in Possession. Neither the enforcement of any of the remedies
under this Security Instrument nor any other remedies afforded to Beneficiary
under the Loan Documents, at law or in equity, shall cause Beneficiary or Trustee
to be deemed or construed to be a mortgagee in possession of the Mortgaged
Property, to obligate Beneficiary or Trustee to lease the Mortgaged Property or
attempt to do so, or to take any action, incur any expense, or perform or discharge
any obligation, duty or liability whatsoever under any of the Leases or otherwise.
(m) Intentionally omitted.
(n) Application of Foreclosure Sale Proceeds. If any foreclosure sale is effected,
Trustee shall apply the proceeds of such sale in the following order of priority:
First, to the costs, fees and expenses of exercising the power of sale and of sale,
including, without limitation, the payment of the Trustee's fees and attorneys'
fees permitted pursuant to subdivision (b) of California Civil Code Section 2924d
and subdivision (b) of Section 2924k; Second, to the payment of the Obligations
which are secured by this Security Instrument, in such order as Beneficiary shall
determine in its sole discretion; Third, to satisfy the outstanding balance of
obligations secured by any junior liens or encumbrances in the order of their
priority; and Fourth, to the Grantor or the Grantor's successor in interest, or in the
event the Mortgaged Property has been sold or transferred to another, to the
vested owner of record at the time of the Trustee's sale.
(o) Separate and Community Property. Any married person who executes this
Security Instrument as a "Grantor" agrees that any money judgment which
Beneficiary or Trustee obtains pursuant to the terms of this Security Instrument or
any other obligation of that married person secured by this Security Instrument
may be collected by execution upon any separate property or community property
of that person.
(p) Setoff Claims. For the avoidance of doubt, no portion of the Obligations secured
by this Security Instrument shall be or be deemed to be offset or compensated by
all or any part of any claim, cause of action, counterclaim, or cross -claim, whether
liquidated or unliquidated, that Grantor may have or claim to have against
Beneficiary. Grantor hereby waives, to the fullest extent not prohibited by
Applicable Laws, the benefits of California Code of Civil Procedure §431.70,
which provides:
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LA 133815558v6
DOC #2018-0464681 Page 43 of 53
Where cross -demands for money have existed between persons at
any point in time when neither demand was barred by the statute of
limitations, and an action is thereafter commenced by one such
person, the other person may assert in the answer the defense of
payment in that the two demands are compensated so far as they
equal each other, notwithstanding that an independent action
asserting the person's claim would at the time of filing the answer
be barred by the statute of limitations. If the cross -demand would
otherwise be barred by the statute of limitations, the relief
accorded under this section shall not exceed the value of the relief
granted to the other party. The defense provided by this section is
not available if the cross -demand is barred for failure to assert it in
a prior action under Section 426.30. Neither person can be
deprived of the benefits of this section by the assignment or death
of the other. For the purposes of this section, a money judgment is
a "demand for money" and, as applied to a money judgment, the
demand is barred by the statute of limitations when enforcement of
the judgment is barred under Chapter 3 (commencing with Section
683.010) of Division 1 of Title 9.
(q) Fixture Filing. Some or all of the Mortgaged Property may be or become a fixture
in which Beneficiary has a security interest under this Security Instrument, and
the purpose of this Section 31(g) is to create a fixture filing under Sections 9313
and 9402 of the Uniform Commercial Code, as amended or recodified from time
to time. The rights, remedies and interests of Beneficiary under this Security
Instrument and under other provisions of this Security Instrument are independent
and cumulative, and there shall be no merger of any security interest created by
the Security Instrument with any lien created under the other provisions of this
Security Instrument. Beneficiary may elect to exercise or enforce any of its
rights, remedies, or interests under the provisions of this Security Instrument as
Beneficiary may from time to time deem appropriate.
(r) Remedies, Non -Exclusion; Waiver. Trustee, Beneficiary shall have all powers,
rights and remedies under Applicable Laws whether or not specifically or
generally granted or described in this Security Instrument. Nothing contained
herein shall be construed to impair or to restrict such powers, rights and remedies
or to preclude any procedures or process otherwise available to trustees or
beneficiaries under deeds of trust in the State of California. Trustee and
Beneficiary shall be entitled to enforce the payment and performance of any
Obligations and to exercise all rights and powers under this Security Instrument or
under any other Loan Document or other agreement or any Applicable Laws now
or hereafter in force, notwithstanding the fact that some or all of the indebtedness
and obligations secured hereby may now or hereafter be otherwise secured,
whether by mortgage, deed of trust, pledge, lien, assignment or otherwise.
Neither the acceptance of this Security Instrument nor its enforcement, whether
by court action or pursuant to the power of sale or other powers contained herein,
shall prejudice or in any manner affect Trustee's or Beneficiary's right to realize
42
LA 133815558v6
DOC #2018-0464681 Page 44 of 53
upon or enforce any other rights or security now or hereafter held by Trustee,
Beneficiary. Trustee or Beneficiary shall be entitled to enforce this Security
Instrument and any other rights or security now or hereafter held by Beneficiary
or Trustee in such order and manner as they or either of them may in their
absolute discretion determine. No remedy herein conferred upon or reserved to
Trustee, Beneficiary is intended to be exclusive of any other remedy contained
herein or by Applicable Laws provided or permitted, but each shall be cumulative
and in addition to every other remedy given hereunder or now or hereafter
existing at law or in equity. Every power or remedy given by any of this Security
Instrument or the other Loan Documents to Trustee and Beneficiary, or to which
either of them may be otherwise entitled, may be exercised, concurrently or
independently, from time to time and as often as may be deemed expedient by
Trustee or Beneficiary, and either of them may pursue inconsistent remedies. By
exercising or by failing to exercise any right, option or election hereunder,
Beneficiary shall not be deemed to have waived any provision hereof or to have
released Grantor from any of the Obligations unless such waiver or release is in
writing and signed by Beneficiary, as applicable. The waiver by Beneficiary of
Grantor's failure to perform or observe any term, covenant or condition referred
to or contained herein to be performed or observed by Grantor shall not be
deemed to be a waiver of such term, covenant or condition or of any subsequent
failure of Grantor to perform or observe the same or any other such term,
covenant or condition referred to or contained herein, and no custom or practice
which may develop between Grantor and Beneficiary during the term hereof shall
be deemed a waiver of or in any way affect the right of Beneficiary to insist upon
the performance by Grantor of the Obligations in strict accordance with the terms
hereof or of any other Loan Document.
(s) One Form of Action. By exercising any of Beneficiary's rights or remedies under
this Security Instrument, Grantor acknowledges and agrees, to the maximum
extent permitted by Applicable Laws, that Beneficiary shall not be deemed to
have exercised any equitable right of setoff, foreclosed any statutory banker's
lien, initiated or prosecuted any "action" to enforce the rights secured by this
Security Instrument and the Obligations, or the Loan Documents, as the term
"action" is used in California Code of Civil Procedure Section 726 ("Section
726"), or to have violated the "security first" principle of Section 726.
Accordingly, the exercise of any or all of Beneficiary's rights and remedies under
this Security Instrument shall not in any way prejudice or affect Beneficiary's
right to initiate and complete a judicial or non judicial foreclosure under this
Security Instrument. This Security Instrument evidences the consensual granting
of a personal property security interest in the Reserves, and any accounts used for
holding the Reserves, as permitted by the Uniform Commercial Code; the parties
do not intend that the exercise by Beneficiary of any of its rights or remedies
hereunder shall have any different consequences under Section 726 than the
exercise of rights or remedies under any other security agreement under which a
secured party has been granted a security interest in other types of personal
property.
43
LA 133815558v6
DOC #2018-0464681 Page 45 of 53
(t) Judicial Reference Provision.
(i) In the event the waiver of jury trial set forth in Section 25 is
unenforceable, the parties elect to proceed under this Section 31(t). With
the exception of the items specified below, any controversy, dispute or
claim between the parties relating to this Security Instrument or any other
document, instrument or transaction between the parties, will be resolved
by a reference proceeding in California pursuant to Sections 638 et seq. of
the California Code of Civil Procedure ("CCP"), or their successor
sections, which shall constitute the exclusive remedy for the resolution of
any claim, including whether the claim is subject to reference. Venue for
the reference will be the Superior Court in the County where real property
involved in the action is located (the "Court"). The following matters
shall not be subject to reference: (i) nonjudicial foreclosure of any security
interests in real or personal property, (ii) exercise of self-help remedies
(including without limitation set-off), (iii) appointment of a receiver, and
(iv) temporary, provisional or ancillary remedies (including without
limitation writs of attachment, writs of possession, temporary restraining
orders or preliminary injunctions). The exercise of, or opposition to, any
of the above does not waive the right to a preference hereunder.
(ii) The referee shall be selected by agreement of the parties. If the parties do
not agree, upon request of any party a referee shall be selected by the
Presiding Judge of the Court. The referee shall determine all issues in
accordance with existing case law and statutory law of the State of
California, including without limitation the rules of evidence applicable to
proceedings at law. The referee is empowered to enter equitable and legal
relief, and rule on any motion which would be authorized in a court
proceeding, including without limitation motions for summary judgment
or summary adjudication. The referee shall issue a decision, and pursuant
to CCP §644 the referee's decision shall be entered by the Court as a
judgment or order in the same manner as if tried by the Court. The final
judgment or order from any decision or order entered by the referee shall
be fully appealable as provided by law. The parties reserve the right to
findings of fact, conclusions of law, a written statement of decision, and
the right to move for a new trial or a different judgment, which new trial if
granted, will be a reference hereunder. AFTER CONSULTING (OR
HAVING THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF
ITS CHOICE, EACH PARTY AGREES THAT ALL CLAIMS
RESOLVED UNDER THIS REFERENCE PROVISION WILL BE
DECIDED BY A REFEREE AND NOT A JURY.
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DOC #2018-0464681 Page 46 of 53
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK;
SIGNATURE PAGE FOLLOWS]
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LA 133815558v6
DOC #2018-0464681 Page 47 of 53
IN WITNESS WHEREOF, the Trustor and Additional Borrowers have caused this Security
Instrument to be duly executed and delivered as of the day and year first above written.
TRUSTOR/GRANTOR:
SILVERROCK PHASE I, LLC,
a Delaware limited liability company
By: The Robert Green Company,
a California corporation
Its: Mana
By:
Name: Robert S. Green, Jr.
Its: President and Chief
Executive Officer
ADDITIONAL BORROWER/GRANTOR:
SILVERROCK LODGING, LLC,
a Delaware limited liability company
By: The Robert Green Company,
a California corporation
Its: M
B
y:t
Name: Robert S. Green, Jr.
Its: President and Chief
Executive Officer
Signature Page to the Construction Deed of Trust
LA 133815558v6
DOC #2018-0464681 Page 48 of 53
ADDITIONAL BORROWER/GRANTOR:
SILVERROCK LUXURY RESIDENCES, LLC,
a Delaware limited liability company
By: The Robert Green Company,
a California corporation
Its: M
By.
Name: Robert S. Green, Jr.
Its:President and Chief
Executive Officer
ADDITIONAL BORROWER/GRANTOR:
SILVERROCK LIFESTYLE RESIDENCES, LLC,
a Delaware limited liability company
By: The Robert Green Company,
a California corporation
Its: Mana
By:
Name: Robert S. Gree , Jr.
Its: President and Chief
Executive Officer
Signature Page to the Construction Deed of Trust
L4 133815558v6
DOC #2018-0464681 Page 49 of 53
NOTARY ACKNOWLEDGMENT
A notary public or other officer completing this certificate verifies only the identity of the
individual who signed the document to which this certificate is attached, and not the truthfulness,
accuracy, or validity of that document.
STATE OFi
)ss.
COUNTY OF �SAA
On IJo ✓entbP r 5 , 2018
personally appeared Ro be
before me,1) i Gt.Y& � . L 44-%. LCJI"(L24 RJO I+'
,(Insert Name and Title 6f Offic r; e.g. Jane , Notary Public)
who
proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument
the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature of Notary
Moo ry DIANA L. LYTLE
Notary Public - California
= San Diego County >
Z Commission # 2160643
My Comm. Expires Aug 19, 2020
[Notary Seal]
LA 133815558v6
DOC #2018-0464681 Page 50 of 53
NOTARY ACKNOWLEDGMENT
A notary public or other officer completing this certificate verifies only the identity of the
individual who signed the document to which this certificate is attached, and not the truthfulness,
accuracy, or validity of that document.
STATE OF "'�S rn i A )
)ss.
COUNTY OF )
On Ave r 5 , 2018 before me,.b1 aY1Gt. L , L-4+1E . AJAI-eitJW PUu ,Ic
c �y(Insert Name and Title'tff Officer; e.g. Jane Doei lotary Public)
personally appeared U . ('teen . r who
proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument
the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature of Notary
,.. ` +:. DIANA L. LYTLE
Notary Public . California
= San Diego County >
Z = Commission p 2160643
My Comm. Expires Aug 19, 2020
[Notary Seal]
Signature Page to the Construction Deed of Trust
LA 133815558v6
DOC #2018-0464681 Page 51 of 53
NOTARY ACKNOWLEDGMENT
A notary public or other officer completing this certificate verifies only the identity of the
individual who signed the document to which this certificate is attached, and not the truthfulness,
accuracy, or validity of that document.
STATE OF C' j-,F -s raa )
}�, • - )ss.
COUNTY OF %Sc✓1
On I VP 6-0,r 5 , 2018 before me, S t [. j4+k . Opi" A AUJ01 J' C
(Insert Name and Title of 6fficer; e.g. Jane Do& Notary Public)
personally appeared � �yH Ist Cie►-�; (Tr-. who
proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument
the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
4�� A cs�4LC'
Signature of NotarjO
DIANA L. LYTLE
Notary Public California
San Diego County
_ = Commission N 2160643
2020 3
My Comm. Expires Aug
[Notary Seal]
Signature Page to the Construction Deed of Trust
LA 133815558v6
DOC #2018-0464681 Page 52 of 53
NOTARY ACKNOWLEDGMENT
A notary public or other officer completing this certificate verifies only the identity of the
individual who signed the document to which this certificate is attached, and not the truthfulness,
accuracy, or validity of that document.
STATE OFeQ )
COUNTY OF lS )ss.)
*n 00 11", "Oia L - "4&' 401� it 10
•
(Insert Name and Title ofeJfficer,'e.g. Jane Dob,.Notary Public)
personally appeared fP-r who
proved to me on the basis of satisfactory evi ence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument
the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
e
Signature of Notary
. o., DIANAL. LYTLE
_ s Notary Public • California
San Diego County
`- Commission # 2160643
My Comm. Expires Aug 19, 2020
[Notary Seal]
Signature Page to the Construction Deed of Trust
LA 133815558v6
DOC #2018-0464681 Page 53 of 53
EXHIBIT "A"
LEGAL DESCRIPTION
PARCELS 1, 3, 4, 5 THROUGH 12, D, E, F, AND G ALL OF PARCEL MAP NO. 37207,
IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA,
FILED IN BOOK 242, PAGES 72 THROUGH 87 OF PARCEL MAPS, IN THE OFFICE OF
THE COUNTY RECORDER OF SAID COUNTY.
RESERVING THEREFROM PARCELS 1, 3, 4, 5, AND 6 ALL OIL, GAS,
HYDROCARBON SUBSTANCES, AND MINERALS OF EVERY KIND AND
CHARACTER LYING MORE THAN FIVE HUNDRED (500) FEET BELOW THE
SURFACE, TOGETHER WITH THE RIGHT TO DRILL INTO, THROUGH, AND TO USE
AND OCCUPY ALL PARTS OF THE PHASE IA PROPERTY LYING MORE THAN
FIVE HUNDRED (500) FEET BELOW THE SURFACE THEREOF FOR ANY AND ALL
PURPOSES INCIDENTAL TO THE EXPLORATION FOR AND PRODUCTION OF OIL,
GAS, HYDROCARBON SUBSTANCES OR MINERALS FROM SAID PHASE IA
PROPERTY OR OTHER LANDS, BUT WITHOUT, HOWEVER, ANY RIGHT TO USE
EITHER THE SURFACE FROM SAID PHASE IA PROPERTY OR ANY PORTION
THEREOF WITHIN FIVE HUNDRED (500) FEET OF THE SURFACE FOR ANY
PURPOSE OR PURPOSES WHATSOEVER, OR TO USE THE PHASE I PROPERTY IN
SUCH A MANNER AS TO CREATE A DISTURBANCE TO THE USE OR ENJOYMENT
OF THE PHASE IA PROPERTY, AS RESERVED BY THE CITY OF LA QUINTA, A
CALIFORNIA MUNICIPAL CORPORATION AND CHARTER CITY, IN THE GRANT
DEED RECORDED NOVEMBER 6, 2017, AS INSTRUMENT NO. 2017-0463950 OF
OFFICIAL RECORDS.
APN'S: 776-150-028; 777-490-038, 777-490-040, 777-490-037, 777-490-041, 777-490-036,
777-490-042, 777-490-043; 777-490-044, 777-490-045, 777-490-046, 777-490-053, 777-490-
054, 777-490-055, 777-060-076, 777-060-077, 777-060-078, 777-060-075
LA 133815558v6