Complaint Unlimited Fee AppliesCal. Super. - 6th Dist.March 23, 2021\OOOQON 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 E-FILED 3/23/2021 10:37 PM JOSHUA BORGER, CA STATE BAR N0. 23 1 591 Clerk Of Court BERLINER COHEN’ LLP Superior Court of CA, TEN ALMADEN BOULEVARD County of Santa ClaraELEVENTH FLOOR SAN JOSE, CALIFORNIA 951 13-2233 21 C_V381 025 TELEPHONE: (408) 286-5800 ReVIewed By: V. Taylor FACSIMILE: (408) 998-5388 joshua.borger@berliner.com ATTORNEYS FOR PLAINTIFF NORTHPOINT CAPITAL FUND, LLC SUPERIOR COURT OF CALIFORNIA, COUNTY OF SANTA CLARA UNLIMITED JURISDICTION NORTHPOINT CAPITAL FUND, LLC, a CASE NO. 21 CV381 025 Delaware limited liability company, PLAINTIFF’S COMPLAINT Plaintiff, V. JAMES MCCLENAHAN; SAUL FLORES; EAGLE HOME LOANS AND INVESTMENT, LLC; IRON SPRINGS DEVELOPMENT, LLC; and DOES 1 through 25, inclusive, Defendants. Plaintiff alleges as follows: PRELIMINARY ALLEGATIONS PARTIES 1. Plaintiff Northpoint Capital Fund, LLC is and at all times relevant herein was a limited liability company which is incorporated in the State 0f Delaware. 2. Upon information and belief, Defendant Eagle Home Loans and Investment, LLC is a limited liability company based in the County of Santa Clara, California. 3. Upon information and belief, Defendant Iron Springs Development, LLC is a limited liability company based in the County of Santa Clara, California. Defendant Iron Springs Development, LLC is suspended by the California Secretary of State. 4813-6418-9152v1 _1_ JBORGER\28568002 PLAINTIFF’S COMPLAINT \OOOQON 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 4. Upon information and belief, Defendant James McClenahan is and at all times relevant herein was a resident 0f Santa Clara County, California. 5 . Upon information and belief, Defendant Saul Flores is and at all times relevant herein was a resident 0f Santa Clara County, California. 6. The plaintiff is ignorant of the true names and capacities 0f the defendants sued as Does 1 through 25, inclusive, and, therefore, sues said defendants by such fictitious names. The plaintiff Will amend this complaint When the true names and capacities 0f said defendants are ascertained by the plaintiff. 7. Upon information and belief, at all relevant times mentioned in this complaint, each defendant was the alter ego, agent, representative, subsidiary, affiliate and/or employee 0f each of the other defendants and was, With respect to the matters referred to in this complaint, acting within the course, purpose and scope 0f such agency, affiliation, representation and/or employment and, further, that each of such defendants has ratified, directed, controlled, authorized, and/or approved the acts 0f each other and their respective agents, subsidiaries, representatives, affiliates and/or employees as alleged in this Complaint. Plaintiff is unaware 0f the exact relationship between each defendant, but the relationships are known full well t0 all of the defendants. FACTUAL ALLEGATIONS 8. On August 18, 201 8, PlaintiffNorthpoint Capital Fund, LLC (“Northpoint Capital”) entered into an installment note with Defendants Eagle Home Loans and Investment, LLC (“Eagle Home Loans”) and Iron Springs Development, LLC (“Iron Springs”). A true and correct copy of the installment note is attached as Exhibit A to the complaint. 9. James McClenahan drafted the installment note in his capacity as a licensed real estate professional for Northpoint Capital. 10. Defendant Saul Flores executed the installment note on behalf of both Eagle Home Loans and Irons Springs as their managing partner. 11. Upon information and belief, Eagle Home Loans is involved in real estate development. Upon information and belief, Defendant Flores is the manager and/or a member of Eagle Home Loans. 4813-6418-9152v1 _2_ JBORGER\28568002 PLAINTIFF’S COMPLAINT \OOOQON 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 12. Upon information and belief, Defendant Flores is the manager and/or a member 0f Iron Springs. 13. Pursuant to the terms ofthe installment note, Northpoint Capital agreed t0 loan Eagle Home Loans and Iron Springs the sum total of five hundred thousand dollars ($500,000.00). The principal and interest were due monthly until January 15, 2019. The interest rate on the loan was twelve percent. 14. The note was secured by two deeds of trust. The first deed of trust was secured by the property located at 20525 Iron Springs Road, Los Gatos, California, which was owned at the time by Iron Springs. 15. The second deed of trust was secured by property located at 925 and 929 E1 Rio Drive, San Jose, California (collectively the “E1 Rio Properties”), which was owned at the time by Eagle Home Loans. A true and correct copy of the deed of trust is attached as Exhibit B to the complaint. 16. On March 28, 2019, Northpoint Capital, Eagle Home Loans, and Iron Springs executed an updated installment note. A true and correct copy of the updated installment note is attached as Exhibit C to the complaint. Pursuant t0 the new terms, Northpoint Capital loaned Eagle Home Loans and Iron Springs the sum total oftwo hundred and fifty thousand dollars ($250,000.00). Principal accrued interest at twelve percent with late payments accruing interest at eighteen percent. The note remained secured by the deeds 0f trust. Defendant Saul Flores executed the updated installment note 0n behalf 0fboth Eagle Home Loans and Irons Springs as their managing partner. 17. On May 1, 2019, Northpoint Capital, Eagle Home Loans, and Iron Springs executed another updated installment note. A true and correct copy 0fthe updated installment note is attached as Exhibit D t0 the complaint. The principal accrued interest at twelve percent. The note was due in its entirety on August 15, 2019. Defendant Saul Flores executed the updated installment note 0n behalf 0f both Eagle Home Loans and Irons Springs as their managing partner. 18. Neither Eagle Home Loans nor Iron Springs Development, LLC has paid the amounts owed (Whether principal or interest) t0 Northpoint Capital. 4813-6418-9152v1 _3_ JBORGER\28568002 PLAINTIFF’S COMPLAINT \OOOQON 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 19. On June 19, 2020, Northpoint Capital recorded a notice of trustee’s sale to foreclose 0n the Deed of Trust secured by properties owned by Eagle Home Loans. The date 0f sale was July 15, 2020. However, upon information and belief, Defendants implemented acts to prevent the foreclosure by Northpoint Capital. The same acts have been used as a pattern and practice by Defendants who serially enter into installment notes, receive large sums 0f money secured by collateral, and then commit fraud to remove the collateral, thus leaving the lender without a remedy. 20. Upon information and belief, unbeknownst to Northpoint Capital, the Defendants received money pursuant to installment notes that they entered into with other persons. Upon information and belief, the installment notes were secured by property located at 95 East Hamilton Avenue, Campbell, California. The property was owned by 95 Hamilton, LLC, ofwhich Defendant Flores is the manager and/or a member. Upon information and belief, Defendant Flores informed the lenders that the Defendants could not repay the loans. Upon information and belief, the Defendants convinced the investors to execute new installment notes that would each be secured by the E1 Rio Properties. 2 1. Upon information and belief, the Defendants intentionally used the E1 Rio Properties as collateral for loans that were more than the value of the properties. Upon information and belief, the Defendants intentionally removed most if not all of the collateral on the property located at 95 East Hamilton Avenue so they would own the property either free and clear of all encumbrances 01' with far fewer encumbrances. 22. Upon information and belief, the Defendants stopped paying the mortgage 0n the E1 Rio Properties. As a result, upon information and belief, the first lienholder commenced foreclosure proceedings. 23. Upon information and belief, Northpoint Capital began foreclosure proceedings on the E1 Rio Properties two days after the foreclosure proceedings commenced by the first lienholder. The first lienholder informed Northpoint Capital that it intended t0 wait to allow Northpoint Capital to finish its foreclosure proceeding. 4813-6418-9152v1 _4_ JBORGER\28568002 PLAINTIFF’S COMPLAINT \OOOQON 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 24. Northpoint Capital intended to purchase the E1 Rio Properties at the foreclosure and pay off the prior lienholder(s). Northpoint Capital intended t0 renovate the E1 Rio Properties and sell them. 25. Upon information and belief, Defendant Flores’ attorney at the time contacted the company processing the foreclosure and stated that it could not foreclose on the E1 Rio Properties because the installment note contained a usury interest rate. As a result, the company refused t0 proceed With the foreclosure. 26. Since Nofihpoint Capital was unable to proceed with the foreclosure, the first lienholder foreclosed on the property. The remaining lienholders were removed as a matter of law and Northpoint Capital did not receive any money from the foreclosure. 27. Upon information and belief, the Defendants have engaged in a pattern and practice 0fdrafting installment notes With a usury interest rate for the purpose of later arguing that the interest on the notes is unenforceable. 28. Upon information and belief, the Defendants continue to renovate the property located at 95 East Hamilton Avenue, Which they intend to sell at a profit since the liens were removed, albeit through fraud. 29. Defendants’ conduct was conducted with oppression, fraud, and/or malice warranting an award of punitive damages. INCORPORATION OF PREVIOUS ALLEGATIONS 30. Unless the context clearly indicates otherwise, the previous allegations contained herein shall be deemed to be incorporated herein by reference, as though fully set forth at length, in each and every cause of action set forth in this complaint. FIRST CAUSE OF ACTION AGAINST DEFENDANT EAGLE HOME LOANS AND INVESTMENT, LLC FOR BREACH OF CONTRACT 31. Plaintiff and Eagle Home Loans and Investment, LLC entered into a contract. 32. Plaintiff did all, or substantially all, 0f the significant things that the contract required it t0 d0; and/or was excused from having t0 certain things. 4813-6418-9152v1 _5_ JBORGER\28568002 PLAINTIFF’S COMPLAINT \OOOQON 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 33. A11 conditions required for defendant’s performance have occurred and/or were waived or excused. 34. Defendant failed t0 do something that the contract required it t0 do and/or did something that the contract prohibited it from doing. 35. Plaintiff was harmed. 36. Defendant’s breach of contract was a substantial factor in causing Plaintiff’ s harm. SECOND CAUSE OF ACTION AGAINST DEFENDANT IRON SPRINGS DEVELOPMENT, LLC FOR BREACH OF CONTRACT 37. Plaintiff and Iron Springs Development, LLC entered into a contract. 38. Plaintiff did all, or substantially all, 0f the significant things that the contract required it t0 d0; and/or was excused from having t0 certain things. 39. A11 conditions required for defendant’s performance have occurred and/or were waived or excused. 40. Defendant failed t0 do something that the contract required it t0 do and/or did something that the contract prohibited it from doing. 4 1. Plaintiff was harmed. 42. Defendant’s breach of contract was a substantial factor in causing Plaintiff’ s harm. THIRD CAUSE OF ACTION AGAINST DEFENDANT EAGLE HOME LOANS AND INVESTMENT. LLC FOR BREACH OF THE IMPLIED COVENANT OF GOOD FAITH AND FAIR DEALING 43. Plaintiff and Eagle Home Loans and Investment, LLC entered into a contract. 44. Plaintiff did all, or substantially all 0f the significant things that the contract required it to do and/or it was excused from having to do those things. 45. A11 conditions required for defendant’s performance had occurred and/or were excused. 46. Defendant prevented Plaintiff from receiving the benefits under the contract. jsgizflsazgzézam -6- PLAINTIFF’S COMPLAINT \OOOQON 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 47. By doing so, Defendant did not act fairly and in good faith. 48. Plaintiffwas harmed by Defendant’s conduct. FOURTH CAUSE OF ACTION AGAINST DEFENDANT IRON SPRINGS DEVELOPMENT, LLC FOR BREACH OF THE IMPLIED COVENANT OF GOOD FAITH AND FAIR DEALING 49. Plaintiff and Iron Springs Development, LLC entered into a contract. 50. Plaintiff did all, or substantially all 0f the significant things that the contract required it t0 d0 and/or it was excused from having t0 d0 those things. 51. A11 conditions required for defendant’s performance had occurred and/or were excused. 52. Defendant prevented Plaintiff from receiving the benefits under the contract. 53. By doing so, Defendant did not act fairly and in good faith. 54. Plaintiffwas harmed by Defendant’s conduct. FIFTH CAUSE OF ACTION AGAINST ALL DEFENDANTS FOR FRAUD (FALSE PROMISE) 55. Defendants made promises t0 Plaintiff. 56. Defendants did not intend t0 perform their promises When they made them. 57. Plaintiff reasonably relied on Defendants’ promises. 58. Defendants did not perform the promised acts. 59. Plaintiffwas harmed. 60. Plaintiff’s reliance 0n Defendants’ promise was a substantial factor in causing Plaintiff s harm. SIXTH CAUSE OF ACTION AGAINST DEFENDANTS MCCLENAHAN AND FLORES FOR INTENTIONAL INTERFERENCE WITH CONTRACTUAL RELATIONS 4813-6418-9152v1 _7_ JBORGER\28568002 PLAINTIFF’S COMPLAINT \OOOQON 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 61. There were contracts between Plaintiff and Eagle Home Loans and Investment, LLC, and Plaintiff and Iron Springs Development, LLC. 62. Defendants McClenahan and Flores knew 0f the contracts. 63. Defendants’ conduct prevented performance 0r made performance more expensive 0r difficult. 64. Defendants intended t0 disrupt the performance 0f the contracts and/or knew that disruption ofperformance was certain or substantially certain t0 occur. 65. Plaintiffwas harmed. 66. Defendants’ conduct was a substantial factor in causing Plaintiff s harm. SEVENTH CAUSE OF ACTION AGAINST DEFENDANT McCLENAHAN FOR BREACH OF BREACH OF FIDUCIARY DUTY 67. Defendant McClenahan, a real estate agent, was the real estate agent Who dictated the terms of and drafted the installment notes for Plaintiff. 68. Defendant knowingly acted against Plaintiff’ s interests in connection with the installment notes, and acted 0n behalf 0f a party Whose interests were adverse t0 Plaintiff. 69. Plaintiff did not give informed consent t0 Defendant’s conduct. 70. Plaintiff was harmed. 71. Defendant’s conduct was a substantial factor in causing Plaintiff harm. EIGHTH CAUSE OF ACTION AGAINST ALL DEFENDANTS FOR AIDING AND ABETTING FRAUD, BREACH OF FIDUCIARY DUTY, AND CONVERSION OF COLLATERAL 72. Defendants knew that a fraud, breach of fiduciary duty, and/or conversion of collateral was being and/or going to be committed by the other Defendants against Plaintiff. 73. Each Defendant gave substantial assistance or encouragement to the other Defendants. 74. The Defendants’ conduct was a substantial factor in causing Plaintiff” s harm. jsgizflsazgzézam -8- PLAINTIFF’S COMPLAINT \OOOQON 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 NINTH CAUSE OF ACTION AGAINST ALL DEFENDANTS FOR CONSPIRACY 75. Each defendant was aware that the other defendants intended t0 commit fraud, breach of fiduciary duty, and/or conversion 0f collateral. 76. Each defendant agreed with the other defendants and intended that the acts be committed. TENTH CAUSE OF ACTION AGAINST ALL DEFENDANTS FOR CONVERSION OF COLLATERAL 77. Plaintiff had a right t0 have the installment notes secured by the Deeds of Trust. 78. Defendants substantially interfered With Plaintiff s right and collateral by knowingly and intentionally, fraudulently and without Plaintiff” s permission or approval preventing the nonjudicial foreclosure 0f the collateral. 79. The Defendants’ conduct was a substantial factor in causing Plaintiff s harm. ELEVENTH CAUSE OF ACTION AGAINST ALL DEFENDANTS EXCEPT FLORES AND MCCLENAHAN FOR REFORMATION OF THE DEED OF TRUST 80. Through unilateral and/or mutual mistake, the Deed of Trust securing the E1 Rio Properties refers t0 the beneficiary as North Capital Fund, LLC rather than Northpoint Capital Fund, LLC, the intended beneficiary. Therefore, Northpoint Capital Fund, LLC seeks a judicial decree reforming the Deed 0f Trust. PRAYER Wherefore, Plaintiff prays forjudgment against Defendants, and each of them, as follows: 1. For damages in the form of any and all consequential damages, compensatory, general, special, economic and noneconomic damages allowed by law; 2. Reformation 0f the Deed 0f Trust; 3. Punitive damages; 4. Attorney’s fees and costs; jsgizflsazgzézam -9- PLAINTIFF’S COMPLAINT AU) \DOOQON 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 5. Prejudgment interest; and 6. For such other and further relief the court deems just and proper. DATED: MARCH 23, 2021 4813-6418-9152v1 JBORGER\28568002 BERLINER COHEN, LLP ggi E ”ham. BY: " JOSHUA BORGER ATTORNEYS FOR PLAINTIFF NORTHPOINT CAPITAL FUND. LLC -10- PLAINTIFF’S COMPLAINT 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 EXHIBIT A DO NOT DESTROY THIS NOTE: When paid, this note, with Deed of Trust securing same, must be surrendered ,to Trustee for cancellation before reconveyance wilt be made Escrow No. INSTALLMENT NOTE -- INTEREST INCLUDED $500,000.00 San Jose, California August 10, 2018 For value received, Iron Springs Development, LLC, Eagle Home Loans and Investment, LLC C‘payor/trustor") promise to pay to Northpoint Capitai Fund, LLC. C‘payee/beneficiary") or order, at place designated by C‘payee/beneflciary"), the principal sum of Five Hundred Thousand dollars, with Interest from August 10, 2018 at the rate of 12.0 percent per annum on the amounts of principai sum remaining unpaid from time to time. Principal and interest payable in monthly installments of as per balance owing at end of every month or more each, on the 18th day of each and every month beginning on September 10, 2018 and continuing until January 15, 2019. Late Charge of 10% on any and all payments received 10 days from due date. ”Ihis note is a Line of Credit, payment based on the oustanding balance at the end of every month. No prepayment penalty Extension avaiable with a 1.0% per month pius note rate. Default interst at 18.0% plus note rate. Note is secured by a Deed of Trust on: 20525 Iron Springs Road, Los Gates, CA. 95030, 925 Ei Rio Drive, San Jose, CA. 95125 and 929 El Rio Drive, San Jose, CA. 95125 The Deed of Trust securing this note contains the following provision: In the event the herein described property, or any part thereof, or any Interest therein, is sold, agreed to be sold, conveyed or ailenated by the Trustor, or by the operation of law or otherwise, alt obligations secured by this instrument, irrespective of the maturity dates expressed therein, at the option of the holder hereof, and without demand or notice, shall immediately become due and payable. Each payment shall be credited first on interest then due and the remainder on principal; and interest shall then cease upon the principal so credited. Principal, interest, and all other sums which may become due 1n connection with this note and the deed of trust securing same, shall be payable in lawful money of th'e United States of America. Should default be made In any payment when due, the whole Sum o'f principal and Interest shail become imm iateiy due at the option of the holder of this note. If action be instituted on this note, sums as the Court may fix as win?fem ‘‘ \ 5/ é / i Mffigs Developmént, LLC. by it’s managing jagte’fiom'é'mwérfi afid Investment, LLC. by4t's’ partner: Saul R. Flores managing partner: Saul R. Flores 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 EXHIBIT B RECORDING REQUESTED BY: , A- 24052470 North Capital Fund, Inc. Regina mcomendras Santa Clara County - Clerk-Recorder ORDER NOI: 10/30/2018 12:48 PM APN: 439-51-025 43951-026 Titles: 2 Pages: 6 Fees: $215.00 WHEN RECORDED MAIL TO Taxes: $000 Total: $215.00 North Cam. Fund, LLc. lm mumrinwmh."l:uwmmmmu mm. II m 305 Vineyard Town Center #228 Morgan Hill, CA. 95037 CPAFFARnl/F THIC/ INF [C FOP Deed of Trust and Assignment of Rents This Deed of Trust, made this lst day of October, 2018, between Eagle Home Loans and Investments, LLC, herein called TRUSTQR, whose address ‘s 929 & 925 E! Rio Drive San Jose, CA. 95‘- 7': (“d Repubfic Tit!e Cl, a Caiifornia-__,, w corporation, herein called TRUSTEE, and North Capital Fund, LLC., herein called BENEFICIARY, Witnesseth: That Trustor IRREVOCABLY GRANTS, TRANSFERS AND ASSIGNS to TRUSTEE IN TRUST, WITH POWER OF SALE, that property in Santa Clara County, California, described as: See "Schedule A" attached hereto and made a part hereof. Commonly Known as: 929 & 925 El Rio Drive, San Jose, CA. 95125 In the event the herein described property, or any part thereof, 0r any interest therein, is sold, agreed to be sold, conveyed or alienated by the Trustor, or by the operation of law or otherwise, all obligations secured by this instrument, irrespective of the maturity dates expressed therein, as the option of the holder hereof, and without demand or notice, shall immediately become due and payable. Together With the rents, issues and profits thereof, SUBJECT, HOWEVER, to the right, power and authority hereinafter given to and conferred upon Beneficiary to collect and apply such rents, issues and profits. For the Purpose of Securing: 1. Performance of each agreement of Trustor herein contained. 2. Payment of the indebtedness evidenced by one promissory note of even date herewith, and any extension or renewal thereof, in the principal sum $250,000.00 of executed by Trustor in favor of Beneficiary or order. 3. Payment of such further sums as the then record owner of said property hereafter may borrow from Beneficiary, when evidenced by another note (or notes) reciting it is so secured. Deed of Trust and Assignment of Rents Page 1 of4 To Protect the Security of This Deed of Trust, Trustor Agrees: (1) To keep said property in good condition and repair; not to remove or demolish any building thereon; to complete or restore promptly and in good and workmanlike manner any building which may be constructed, damaged or destroyed thereon and t0 pay when due all claims for labor performed and materials furnished therefor; to comply with all laws affecting said property or requiring any alterations or improvements to be made thereon; not to commit or permit waste thereof; not to commit, suffer or permit any act upon said property in violation 0f law; to cultivate, irrigate, fertilize, fumigate, prune and do all other acts which from the character or use of said property may be reasonably necessary, the specific enumerations herein not excluding the general. (2) To provide, maintain and deliver to Beneficiary fire insurance satisfactory to and with loss payable to Beneficiary. The amount collected under any fire or other insurance policy may be applied by Beneficiary upon any indebtedness secured hereby and in such order as Beneficiary may determine, or at option of Beneficiary the entire amount so collected or any part thereof may be released to Trustor. Such application or release shall not cure 0r waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. (3) To appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee; and to pay all costs and expenses, including cost of evidence of title and attorney’s fees in a reasonable sum, in any such action or proceeding in which Beneficiary or Trustee may appear, and in any suit brought by Beneficiary to foreclose this Deed. (4) To pay: at least ten days before delinquency all taxes and assessments affecting said property, including assessments on appurtenant water stock; when due, all encumbrances, charges and liens, with interest, on said property or any part thereof, which appear to be prior or superior hereto; all costs, fees and expenses of this Trust. Should Trustor fail t0 make any payment or to do any act as herein provided, then Beneficiary 0r Trustee, but without obligation so to do and without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof, may: make or do the same in such manner and to such extent as either may deem necessary to protect the security hereof, Beneficiary or Trustee being authorized to enter upon said property for such purposes; appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee; pay, purchase, contest or compromise any encumbrance, charge or lien which in the judgment of either appears to be prior or superior hereto; and, in exercising any such powers, pay necessary expenses, emp|oy counsel and pay his reasonable fees. (5) To pay immediately and without demand all sums so expended by Beneficiary or Trustee, with interest from date of expenditure at the amount allowed by law in effect at the date hereof, and t0 pay for any statement provided for by law in effect at the date hereof regarding the obligation secured hereby any amount demanded by the Beneficiary not to exceed the maximum allowed by law at the time when said statement is demanded. (6) That any award of damages in connection with any condemnation for public use 0f or injury to said property or any part thereof is hereby assigned and shall be paid to Beneficiary who may apply 0r release such moneys received by him in the same manner and with the same effect as above provided for disposition of proceeds of fire or other insurance. (7) That by accepting payment of any sum secured hereby after its due date, Beneficiary does not waive his right either t0 require prompt payment when due of all other sums so secured or to declare default for fai|ure so to pay. (8) That at any time or from time t0 time, without liability therefor and without notice, upon written request of Beneficiary and presentation of this Deed and said note for endorsement, and without affecting the personal liability of any person for payment of the indebtedness secured hereby, Trustee may: reconvey any part of said property; consent to the making of any map or plat thereof; join in granting any easement thereon; or join in any extension agreement or any agreement subordinating the lien of charge thereof. (9) That upon written request of Beneficiary stating that all sums secured hereby have been paid, and upon surrender of this Deed and said note to Trustee for cancellation and retention and upon payment of its fees, Trustee shall reconvey, without warranty, the property then held hereunder. The recitals in such reconveyance of any matters or facts shall be conclusive proof of the truthfulness thereof. The grantee in such reconveyance may be described as “the person 0r persons legally entitled thereto”. Five years after issuance of such full reconveyance, Trustee may Deed of Trust and Assignment of Rents Page 2 of 4 destroy said note and this Deed (unless directed in such request to retain them). (10) That as additional security, Trustor hereby gives to and confers upon Beneficiary the right, power and authority, during the continuance of these Trusts, to collect the rents, issues and profits of said property, reserving unto Trustor the right, prior to any default by Trustor in payment of any indebtedness secured hereby or in performance of any agreement hereunder, to collect and retain such rents, issues and profits as they become due and payable. Upon any such default, Beneficiary may at any time without notice, either in person, by agent, 0r by a receiver to be appointed by a court, and without regard to the adequacy of any security for the indebtedness hereby secured, enter upon and take possession of said property or any part thereof, in his own name sue for or otherwise collect such rents, issues and profits, including those past due and unpaid, and apply the same, less costs and expenses of operation and collection, including reasonable attorney’s fees, upon any indebtedness secured hereby, and in such order as Beneficiary may determine. The entering upon and taking possession 0f said property, the collection of such rents, issues and profits and the application thereof as aforesaid, shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. (11) That upon default by Trustor in payment of any indebtedness secured hereby or in performance 0f any agreement hereunder, Beneficiary may declare all sums secured hereby immediately due and payable by delivery to Trustee of written declaration of default and demand for sale and of written notice of default and of election t0 cause to be sold said property, which notice Trustee shall cause to be filed for record. Beneficiary also shall deposit with Trustee this Deed, said note and all documents evidencing expenditures secured hereby. After the lapse of such time as may then be required by law following the recordation of said notice 0f default, and notice of sale having been given as then required by law, Trustee, without demand on‘Trustor, shall sell said property at the time and place fixed by it in said notice of sale, either as a whole or in separate parcels, and in such order as it may determine, at public auction to the highest bidder for cash in lawful money of the United States, payable at time of sale. Trustee may postpone sale of all or any portion of said property by public announcement at such time and place of sale, and from time to time thereafter may postpone such sale by public announcement at the time fixed by the preceding postponement. Trustee shall deliver to such purchaser its deed conveying the property so sold, but without any covenant or warranty, express or implied. The recitals in such deed of any matters or facts shall be conclusive proof of the truthfulness thereof. Any person, including Trustor, Trustee, or Beneficiary as hereinafter defined, may purchase at such sale. After deducting all costs, fees and expenses of Trustee and of this Trust, including cost 0f evidence of title in connection with sale, Trustee shall apply the proceeds of sale to payment of: a|| sums expended under the terms hereof, not then repaid, with accrued interest at the amount allowed by law in effect at the date hereof; all other sums then secured hereby; and the remainder, if any, to the person or persons legally entitled thereto. (12) Beneficiary, or any successor in ownership of any indebtedness secured hereby, may from time to time, by instrument in writing, substitute a successor or successors to any Trustee named herein or acting hereunder, which instrument, executed by the Beneficiary and duly acknowledged and recorded in the office of the recorder of the county or counties where said property is situated, shall be conclusive proof of proper substitution of such successor Trustee orTrustees, who shall, without conveyance from the Trustee predecessor, succeed to all its title, estate, rights, powers and duties. Said instrument must contain the name of the original Trustor, Trustee and Beneficiary hereunder, the book and page where this Deed is recorded and the name and address of the new Trustee. (13) That this Deed applies to, inures t0 the benefit of, and binds all parties hereto, their heirs, legatees, devisees, administrators, executors, successors and assigns. The term Beneficiary shall mean the owner and holder, including pledges, of the note secured hereby, whether or not named as Beneficiary herein. In this Deed, whenever the context so requires, the masculine gender includes the feminine and/or neuter, and the singular number includes the plural. (14) That Trustee accepts this Trust when this Deed, duly executed and acknowledged, is made a public record as provided by law. Trustee is not obligated to notify any party hereto of pending sale under any other Deed of Trust or of any action or proceeding in which Trustor, Beneficiary or Trustee shall be a party unless brought by Trustee. Deed 0f Trust and Assignment 0f Rents Page 3 of 4 The undersigned Trustor requests that a copy of any Notice of Default and of any Notice of Sale hereunder be mailed t_o him at hlsmfis herein ore set forth. Z Z J EagIe/oKH e Loans and Iniestments, LLC. by Saul R. Floreé it‘s Managing partner 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. 3 ‘ , ‘ State of (Méf‘mék County of )(‘xhfl ( \UIH n ‘ ‘ ~ A p ‘ 1:, On I fore me ynnlgh (Jaw n a Notary Public, personally appeared > _ L y P}UY£S 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. '11]; S: I certify under correct. ENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and Signature. ////77¢Y YZ/ ' Name: YEHV (‘JGU] Xfyped orfirinted)J (Seal) Deed of Trust and Assignment 0f Rents Page 4 of 4 EXHIBIT "A" Legal Description For APN/Parcel |D(s): 439-51 ~026 THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF SAN JOSE, COUNTY OF SANTA CLARA, STATE OF CALIFORNIA AND IS DESCRIBED AS FOLLOWS: LOT 32, AS SHOWN UPON THE MAP ENTITLED, "TRACT NO. 283 CIMINO BROS. SUBDIVISION", WHICH MAP WAS FILED FOR RECORD IN THE OFFICE OF THE RECORDER OF THE COUNTY OF SANTA CLARA, STATE OF CALIFORNIA, ON MAY 22, 1946 IN BOOK 1O OF MAPS, AT PAGE(S) 36. CLTA Preliminary Report Form ~ Modified (1 1 17.06) Primed: 10.09.15 @ 17:05 AM by F SCA0002402.doc/Updated: 08.24‘15 3 CA»--SPS-1-15-FWPS-3021150701 EXHIBIT "A" Legal Description For APN/Parcel lD(s): 439-51 -025 THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF SAN JOSE, COUNTY OF SANTA CLARA, STATE OF CALIFORNIA AND IS DESCRIBED AS FOLLOWS: ALL OF LOT 31, AS DELINEATED UPON THAT CERTAIN MAP ENTITLED, "TRACT NO. 283 CIMINO BROS. SUBDIVISION", FILED FOR RECORD IN THE OFFICE OF THE RECORDER OF THE COUNTY OF SANTA CLARA, STATE OF CALIFORNIA, ON MAY 22, 1946 IN BOOK 10 OF MAPS, AT PAGE(S) 36. CLTA Preliminary Report Form - Modified (1 1 .1706) Printed: 1009.15 @ 09:47 AM by GSCA0002402.dOC/Updated: 0824.15 3 CA--SPS-1>15-FWPS»2986151688 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 EXHIBIT C Updated Installment Note Amount: $ 250,000 Date: March 28 2019 Santa Clara, CA FOR VALUE RECEIVED, Iron Springs Development, LLC, Eagle Home Loans and Investment, LLC (“payor/tmstor”) the undersigned promises to pay to the order ofNorth point Capital Fund, LLC (payee/beneficiary") or order, at place designated by (“paycc/bcneficiary”), The principal sum of Two Hundred Fifty, Thousand g $250000) Dollars in legal tender of the United States, with interest from Februm 15 ,20 l 9 or the date of funding at the rate of 12% annualized per year for 6 months. Interest Only payments will be made monthly, starting 30 days after the close in the amount of$2.500 per month. If any payment is not paid when due or if payment made does not cover all interest accrued through date ofpayment, remaining interest accrued shall be added t0 principal and shall bear interest 18% plus note rate. Payments, principal and interest shall be payable at the office of holder(s): Northpoint Capital Fund, LLC 305 Vineyard Town Center #228, Morgan Hill CA 95037 at any such other place as the holder hereofmay designate in writing. This note is due in its entirety at the earlier of the sale or transfer 0fthe property or 6 months from the origination. If fulfillment of any provision hereof or any transaction related hereto or to any indebtedness secured hereby, at the time performance of such provisions shall be due, shall involve transcending the limit of validity prescribed by law, then ipso facto, the obligation to be fulfilled shall be reduced to the limit ofsuch validity; and if any clause or provisions herein contained operate or would prospectively operate t0 invalidate this Note in whole or in part, then such clause or provision only shall be held for naught, as though not herein contained, and the remainder ofthis Note shall remain operative and in fiJll force and effect. In the event any payment is made by personal check, and such check is returned by the financial institution on which it is drawn without payment of same, for any reason, the holder of this Note shall be entitled to collect from the borrower a handling fee of 5% ofthe amount ofsuch check or $35.00, whichever is greater. Such fee shall be in addition to any other fees and costs allowed by this Note. Late Charge of 10% on any and all payments received 10 days from due date. 2W Extension Feé: Prepaid 1% per month Minter-G’LWW ; No prepayment penalty. Note is secured by a deed ofTrust on: 20525 Iron Springs Road, Los Gatos, CA 95030, 925 El Rio Drive, San Jose, CA 95 125, and 929 E1 Rio Drive, San Jose, CA 95125, from original note dated August 10, 2018. The deed of trust securing this note contains the following provision: In the event the herein described property, or any part thereof, or any interest therein, is sold, agreed to be sold, conveyed or alienated by the Trustor, or by the operation of law or otherwise, all obligations secured by this instrument, irrespective of the maturity dates expressed therein, at the option of the holder hereof, and without demand or notice, shall immediately become due and payable. Default under any other obligation of maker, or makers, jointly and severally, to note holder, shall be considered a default under this note also. 1t is further agreed that failure of the holder to exercise this right of accelerating the maturity ofthe debt, or indulgence granted from time to time, shall in no event be considered as a waiver of such right of acceleration or estop the holder from exercising the right. Each payment shall be credited first on interest then due and the remainder on principal; and interest shall then case upon the principal so credited. Principal, interest, and all other sums which may become due in connection with this note and the deed of trust securing same, shall be payable in lawful money of the United States of American. Should default be made in any payment when due, the whole sum of principal and interest shall become immediately due at the option of the holder of this note. If action be instituted on this note, I promise to pay such sums as the Court may fix as attorney’s fees. And each of the undersigned, whether principal, surety, guarantor, endorser, or other party, severally waives and renounces each for himself and family, any and a1] homestead and exemption rights either of us, or the family of either of us, may have under or by virtue ofthe laws ofthe State of California, or any other State, or the United States, as against this debt or any renewal or extension thereof, and further waive emand, protest, presentment, notice of demand, protest and nonpayment. WITNESS ‘e h and se of undersigned. % ' / /Vl/ Dateazdfl y 0/7/ Datjz4/Z// lro_ ngs Developme LC /E21gl¢Means and Investment, LLC. y Its managmg panner: aul Flores by its managing partner: Saul Flor 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 EXHIBIT D DO NOT DESTROY THIS NOTE: When paid, this note, with Deed of Trust securing same, must be surrendered to Trustee for canceflation before reconveyance will be made Escrow No. INSTALLMENT NOTE - INTEREST INCLUDED $500,000.00 San Jose, Callfomia August 10, 2018 For value received, Iron Springs Development, LLC, Eagle Home Loans and Investment, LLC (“payor/trustor") promise to pay to Northpoint Capitai Fund, LLC. C‘payee/beneficiary") or order, at place designated by (“payee/beneflciary"), me principal sum of Five Hundred Thousand dollars, with Interest from August 10, 2018 at the rate of 12.0 percent per annum on the amounts of prindpai sum remaining unpaid from fime to flme. Principal and interest payable in monmly installments of as per balance owing at end of every month or more each, on the 10m day of each and every month beginning on September 10, 2018 and continuing until January 15, 2019. Late GIarge of 10% on any and all payments received 10 days from due date. This note Is a Une of Credit, payment based on the oustandlng balance at the end of every month. No prepayment penalty Extenslon avaiable with a 1.0% per month plus note rate. Default Interst at 18.0% ptus note rate. Note is secured by a Deed of Trust on: 20525 Iron Springs Road, Los Gams, CA. 95030, 925 El Rlo Drive, San Jose, CA. 95125 and 929 El Rio Drive, San Jose, CA. 95125 The Deed of Trust securing this note contains the following provision: In the event the hereln descnbed pmpedy, or any part fl-Iereof, or any Interest therein, is sold, agreed to be sold, conveyed or aflenated by me Trustor, or bvy the operation of law or otheanse, all obligations secured by thls instrument, Irrespective of the maturity dates expressed therein, at me option of the holder hereof, and without demand or notice, shall immediame become due and payable. Each payment shall be credited first on interest then due and the remainder on principal; and interest shall men cease upon the princlpal so credited. Principai, interest, and all other sums which may become due In connection with this note and the deed of trust securing same, shall be payable In lawful money of the United States of America. Should default be made in any payment when due, the whole sum o‘f principal and Interest shaH become im iately due at me option of the holder of this note. If action be instituted on this note, sums as the Court may fix as atjnyfejM {7, 42>” rungs Develop nt, LLC. by It's managing jagh’flome'Lo‘ér‘fs afid Investment, LLC.W partner: Saul R. Flores managing partner: Saul R. Flores
