Preview
SUPERIOR COURT OF CALIFORNIA
COUNTY OF SAN FRANCISCO
Document Scanning Lead Sheet
Nov-07-2012 2:36 pm
Case Number: CGC-10-500934
Filing Date: Nov-07-2012 2:34
Filed by: MICHAEL RAYRAY
Juke Box: 001 Image: 03833265
ANSWER
CATHAY BANK, A CALIFORNIA BANKING CORPORATION VS. RAYMOND
XIANG ZHANG et al
001003833265
Instructions:
Please place this sheet on top of the document to be scanned.Chijeh Hu (SBN 241271)
CJH & ASSOCIATES, P.C.
1440 Broadway, Suite 1000
Oakland, California 94612
Telephone: (510) 832-1686
Facsimile: (510) 251-1155
Attorney for Defendants,
RAYMOND XIANG KAI ZHANG, et al.
SUPERIOR COURT OF CALIFORNIA
COUNTY OF SAN FRANCISCO
CATHAY BANK, a California banking
corporation,
Plaintiff,
Vv.
RAYMOND XIANG KAI ZHANG, aka
RAYMOND KAI ZHANG, aka, RAYMOND
ZHANG, aka XIAHNG KAI ZHANG, an
individual; CINDY ZHANG, an individual;
DONG YING QUI, an individual; XIANG
KAI, LLC, a California limited liability
company; RAY KAI, LLC, a California
limited liability company; RAY KAI, LLC, a
California limited liability company;
ZHANGS, LLC, a California limited liability
company; and DOES 1 through 200, inclusive.
Defendants.
RAYMOND ZHANG, an individual; CINDY
ZHANG, an individual; DONG YING QUI,
an individual; RAY KAI, LLC, a California
limited liability company; and ZHANGS,
LLC, a California limited liability company,
Cross-Complainants,
Vv.
CATHAY BANK, a California banking
corporation; and DOES 201-230, inclusive,
Cross-Defendants.
Case No. CGC-10-500934
FIRST AMENDED ANSWER TO
COMPLAINT FOR:
1. (cause of action dismissed)
2. SPECIFIC PERFORMANCE TO
ENFORCE TERMS AND PROVISIONS OF
DEED OF TRUST; APPOINTMENT OF
RECEIVER; AND INJUNCTIVE RELIEF
3. (cause of action dismissed)
4. SPECIFIC PERFORMANCE TO
ENFORCE TERMS AND PROVISIONS OF
DED OF TRUST; APPOINTMENT OF
RECEIVER; AND INJUNCTIVE RELIEF
5. (cause of action dismissed)
6. SPECIFIC PERFORMANCE TO
ENFORCE TERMS AND PROVISIONS OF
DED OF TRUST; APPOINTMENT OF
RECEIVER; AND INJUNCTIVE RELIEF
7. (cause of action dismissed)
8. (cause of action dismissed)
1
ANSWER TO COMPLAINT
Case No. CGC-10-50093427
cut a Associates, &c.
1440 BRoapwAY, SUITE 1000
OAKLAND. cA 94612
(510) 832-1686
Defendants Raymond Zhang: Cindy Zhang; RAY KAI LLC (aka RAY KAI, LLC);
XIANG KAI, LLC; and ZHANGS, LLC (collectively, the “Defendants”) answer as follows to
the complaint of CATHAY BANK (the “Plaintiff”.
ADMISSIONS AND DENIALS
1, For paragraph 1 of the complaint, the Defendants lack information or belief
sufficient to admit or deny the allegations of that paragraph, and on that basis, they deny them.
2. For paragraph 2, the Defendants admit that Raymond Zhang is, and at all relevant
times was, an individual residing in the county of San Francisco, California.
3. For paragraph 3, the Defendants admit that Cindy Zhang is, and at all relevant
times was, an individual residing in the county of San Francisco, California. Raymond Zhang
and Cindy Zhang are sometimes collectively referred to as the “Zhangs.”
4, For paragraph 4, the Defendants lack information or belief sufficient to admit or
deny the allegations of that paragraph, and on that basis, they deny them.
5. For paragraph 5, the Defendants admit that XIANG KAI, LLC is a California
limited liability company and has its principal place of business in San Francisco, California.
6. For paragraph 6, the Defendants admit that RAI KAI, LLC is a California limited
liability company.
7. For paragraph 7, the Defendants admit that ZHANGS, LLC is a California limited
liability company and has its principal place of business in San Francisco, California.
8. For paragraph 8, the Defendants lack information or belief sufficient to admit or
deny the allegations of that paragraph, and on that basis, they deny them.
9. For paragraph 9, the Defendants deny every allegation.
10. For paragraph 10, the Defendants admit every allegation.
il. For paragraph 11, the Defendants lack information or belief sufficient to admit or
deny the allegation of that paragraph, and on that basis, they deny them.
12. For paragraph 12, the Defendants admit that the Zhangs entered into a business
loan agreement on or about November 2006 (the “LOC Loan”), and that a document is attached
2
ANSWER TO COMPLAINT
Case No. CGC-10-500934wWN
27
can a associates. Fe,
1440 BROADWAY. SUITE 1000
OAKLAND, €4 94612
(510) 832-1686
to the complaint as Exhibit 1.
13. For paragraph 13, the Defendants assert that the terms of Exhibit 1 speak for
themselves. Except for this admission, the Defendants deny each remaining allegation of that
paragraph.
14, For paragraph 14, the Defendants assert that the terms of Exhibit | speak for
themselves. Except for this admission, the Defendants deny each remaining allegation of that
paragraph.
15. For paragraph 15, the Defendants admit that the Zhangs executed a promissory
note in favor of the Plaintiff on or about June 2007 (the “LOC Note 1”), and that a document is
attached to the complaint as Exhibit 2.
16. For paragraph 16, the Defendants assert that the terms of Exhibit 2 speak for
themselves. Except for this admission, the Defendants deny each remaining allegation of that
paragraph.
17. For paragraph 17, the Defendants assert that the terms of Exhibit 2 speak for
themselves. Except for this admission, the Defendants deny each remaining allegation of that
paragraph.
18. For paragraph 18, the Defendants assert that the terms of Exhibit 2 speak for
themselves. Except for this admission, the Defendants deny each remaining allegation of that
paragraph.
19. For paragraph 19, the Defendants admit that XIANG KAI, LLC executed a deed
of trust in favor of the Plaintiff on or about June 2007 (the “LOC DOT 1”), and that a document
is attached to the complaint as Exhibit 3.
20. For paragraph 20, the Defendants assert that the terms of Exhibit 3 speak for
themselves. Except for this admission, the Defendants deny each remaining allegation of that
paragraph.
21. For paragraph 21, the Defendants assert that the terms of Exhibit 3 speak for
themselves. Except for this admission, the Defendants deny each remaining allegation of that
3
ANSWER TO COMPLAINT
Case No. CGC-10-50093427
can a AssociaTes. Fe"
1440 BRoapway. SUITE 1000
OAKLAND. CA 94612
(510) 832-1686
paragraph.
22. For paragraph 22, the Defendants assert that the terms of Exhibit 3 speak for
themselves. Except for this admission, the Defendants deny each remaining allegation of that
paragraph.
23. For paragraph 23, the Defendants admit that the Zhangs executed two LOC
extension agreements with the Plaintiff beginning on or about June 2009 (the “LOC Extension
Agreements”), and that a document is attached to the complaint as Exhibit 4.
24. For paragraph 24, the Defendants admit that the Zhangs executed two change-in-
terms agreements with the Plaintiff beginning on or about December 2009 (the “LOC CITAs”),
and that a document is attached to the complaint as Exhibit 5.
25. For paragraph 25, the Defendants admit that the Zhangs executed a loan
modification agreement with the Plaintiff on or about December 2009 (the “LOC Mod”), and that
a document is attached to the complaint as Exhibit 6.
26. For paragraph 26, the Defendants admit that XIANG KAI, LLC executed a
guaranty in favor of the Plaintiff on or about December 2009 (the “XIANG LOC Guaranty”), and
that a document is attached to the complaint as Exhibit 7.
27. For paragraph 27, the Defendants assert that the terms of Exhibit 7 speak for
themselves.
28. For paragraph 28, the Defendants admit that XIANG KAI, LLC and the Zhangs
executed a security agreement in favor of the Plaintiff on or about December 2009 (the “LOC
Security Agreement”), and that a document is attached to the complaint as Exhibit 8.
29. For paragraph 29, the Defendants assert that the terms of Exhibit 8 speak for
themselves.
30. For paragraph 30, the Defendants assert that the terms of Exhibit 8 speak for
themselves.
31. For paragraph 31, the Defendants lack information or belief sufficient to admit or
deny the allegation of that paragraph, and on that basis, they deny them.
4
ANSWER TO COMPLAINT
Case No. CGC-10-50093427
can a associates. &c,
1440 BROADWAY, SUITE 1000
OAKLAND. €& 94612
(510) 832-1686
32. For paragraph 32, an admission or denial is not required.
33, For paragraph 33, the Defendants admit that RAI KAI, LLC entered into a
construction loan agreement with the Plaintiff on or about October 2006 (the “Construction Loan
2”), and that a document is attached to the complaint as Exhibit 10. The Defendants also admit
that the maximum principal amount of the loan was $7,238,000. Except for these admissions, the
Defendants deny each remaining allegation of that paragraph.
34. For paragraph 34, the Defendants assert that the terms of Exhibit 10 speak for
themselves.
35. For paragraph 35, the Defendants assert that the terms of Exhibit 10 speak for
themselves.
36. For paragraph 36, the Defendants assert that the terms of Exhibit 10 speak for
themselves.
37. For paragraph 37, the Defendants assert that the terms of Exhibit 10 speak for
themselves.
38. For paragraph 38, the Defendants assert that the terms of Exhibit 10 speak for
themselves.
39. For paragraph 39, the Defendants admit that RAI KAI, LLC executed a
promissory note in favor of the Plaintiff on or about October 2006 in the amount of $7,238,000
(the “Construction Note 2”), and that a document is attached to the complaint as Exhibit 11.
Except for these admissions, the Defendants deny each remaining allegation of that paragraph.
40. For paragraph 40, the Defendants assert that the terms of Exhibit 11 speak for
themselves.
41. For paragraph 41, the Defendants assert that the terms of Exhibit 11 speak for
themselves.
42. For paragraph 42, the Defendants admit that RAI KAI, LLC executed a deed of
trust concerning the MacArthur Blvd property in favor of the Plaintiff on or about October 2006
(the “Construction DOT 2”), and that a document is attached to the complaint as Exhibit 12.
5
ANSWER TO COMPLAINT
Case No. CGC-10-50093427
cam a Associates. Fe.
1440 Broapway, SUITE 1000
OAKLAND. cA 94612
(S10) 832-1686
Except for these admissions, the Defendants deny each remaining allegations of that paragraph
and assert that the terms of Exhibit 12 speak for themselves.
43. For paragraph 43, the Defendants assert that the terms of Exhibit 12 speak for
themselves.
44, For paragraph 44, the Defendants lack information or belief sufficient to admit or
deny the allegations of that paragraph, and on that basis, they deny them. They also admit that a
document is attached to the complaint as Exhibit 13.
45. For paragraph 45, the Defendants admit that Raymond Zhang executed a personal
guarantee in favor of the Plaintiff concerning Construction Note 2 on or about October 2006, and
that a document is attached to the Complaint as Exhibit 14. Except for these admissions, the
Defendants deny each remaining allegation of that paragraph and assert that the terms of Exhibit
14 speak for themselves.
46. For paragraph 46, the Defendants admit that Cindy Zhang executed a personal
guarantee in favor of the Plaintiff concerning Construction Note 2 on or about October 2006, and
that a document is attached to the Complaint as Exhibit 15. Except for these admissions, the
Defendants deny each remaining allegation of that paragraph and assert that the terms of Exhibit
15 speak for themselves.
47. For paragraph 47, the Defendants admit that RAI KAI, LLC and the Plaintiff
entered into three extension agreements concerning the Construction Note 2 beginning on or
about June 2008 (the “Extension Agreements”), and that a document is attached to the complaint
as Exhibit 16. Except for these admissions, the Defendants deny each remaining allegation of
that paragraph and assert that the terms of Exhibit 16 speak for themselves.
48. For paragraph 48, the Defendants admit that RAI KAI, LLC and the Plaintiff
entered into a loan modification agreement concerning the Construction Note 2 on or about
February 2009 (the “Loan Mod 1”), and that a document is attached to the complaint as Exhibit
17. Except for these admissions, the Defendants deny each remaining allegation of that
paragraph and assert that the terms of Exhibit 17 speak for themselves.
6
ANSWER TO COMPLAINT
Case No. CGC-10-500934wn
27
can & associates. 76,
1440 BROADWAY. SUITE 1000
OAKLAND, cA 94612
(510) 632-1686
49. For paragraph 49, the Defendants admit that RAI KAI, LLC and the Plaintiff
entered into a loan modification agreement concerning the Construction Loan 2 on or about
December 2009 (the “Loan Mod 2”), and that a document is attached to the complaint as Exhibit
18. Except for these admissions, the Defendants deny each remaining allegation of that
paragraph and assert that the terms of Exhibit 18 speak for themselves.
50. For paragraph 50, the Defendants admit that RAI KAI, LLC and the Plaintiff
entered into a loan modification agreement concerning the Construction Note 2 on or about
February 2010 (the “Loan Mod 3”), and that a document is attached to the complaint as Exhibit
19. Except for these admissions, the Defendants deny each remaining allegations of that
paragraph and assert that the terms of Exhibit 19 speak for themselves.
51. For paragraph 51, the Defendants deny each and every allegation. Except for
these denials, the Defendants admit that a document is attached to the complaint as Exhibit 20.
52. For paragraph 52, the Defendants assert that the terms of Exhibit 20 speak for
themselves.
53. For paragraph 53, the Defendants assert that the terms of Exhibit 20 speak for
themselves.
54. For paragraph 54, the Defendants assert that the terms of Exhibit 20 speak for
themselves.
55. For paragraph 55, the Defendants admit that the Zhangs executed a deed of trust in
favor of the Plaintiff on or about December 2009 (the “DOT 4”), and that a document is attached
to the complaint as Exhibit 21. Except for these admissions, the Defendants deny each remaining
allegation of that paragraph and assert that the terms of Exhibit 21 speak for themselves.
56. For paragraph 56, the Defendants assert that the terms of Exhibit 21 speak for
themselves.
57. For paragraph 57, the Defendants assert that the terms of Exhibit 21 speak for
themselves.
58. For paragraph 58, the Defendants admit that the ZHANGS, LLC executed a deed
7
ANSWER TO COMPLAINT
Case No. CGC-10-50093427
cana associates. F.C:
1440 BRoaDWAY. SUITE 1000
OAKLAND. CA 94612
(S10) 832-1686
of trust in favor of the Plaintiff on or about December 2009 (the “DOT 5”), and that a document
is attached to the complaint as Exhibit 22. Except for these admissions, the Defendants deny
each remaining allegation of that paragraph and assert that the terms of Exhibit 22 speak for
themselves.
59. For paragraph 59, the Defendants assert that the terms of Exhibit 22 speak for
themselves.
60. For paragraph 60, the Defendants assert that the terms of Exhibit 22 speak for
themselves.
61. For paragraph 61, the Defendants lack information or belief sufficient to admit or
deny the allegations of that paragraph, and on that basis, they deny them.
62. For paragraph 62, the Defendants admit that the RAI KAI, LLC executed
additional loan documents in favor of the Plaintiff in connection with the Construction Note 2,
and that a document is attached to the complaint as Exhibit 24. Except for these admissions, the
Defendants deny each remaining allegation of that paragraph and assert that the terms of Exhibit
24 speak for themselves.
63. For paragraph 63, an admission or denial is not required.
64. For paragraph 64, the Defendants admit that the Zhangs are in default under the
LOC Note 1.
65. For paragraph 65, the Defendants admit every allegation.
66. For paragraph 66, the Defendants deny every allegation.
67. For paragraph 67, the Defendants admit every allegation.
68. For paragraph 68, the Defendants lack information or belief sufficient to admit or
deny the allegation of the paragraph, and on that basis, they deny them.
69. For paragraph 69, the Defendants deny every allegation.
HM]
HI
I
8
ANSWER TO COMPLAINT
Case No. CGC-10-50093427
28
can @ AssocIATES, Fe
1440 BROADWAY. SUITE 1000
OAKLAND, €4 94612
(510) 832-1686
AFFIRMATIVE DEFENSES
First Affirmative Defense: ESTOPPEL
1. As a first and separate affirmative defense to all of the Plaintiff's causes of action,
the complaint is barred by the doctrine of estoppel.
Second Affirmative Defense: LACHES
2. Asa second and separate affirmative defense to all of the Plaintiff's causes of
action, the complaint is barred by the doctrine of laches.
Third Affirmative Defense: WAIVER
3. As a third and separate affirmative defense to all of the Plaintiff's causes of action,
the complaint is barred by the doctrine of waiver.
Fourth Affirmative Defense: UNCLEAN HANDS
4, As a fourth and separate affirmative defense to all of the Plaintiff's causes of
action, the Plaintiff has unclean hands with regards to the matters and events referenced in the
complaint, which are incorporated into this affirmative defense as though fully set forth by this
reference. The Plaintiff also has unclean hands with regards to other matters and events.
Fifth Affirmative Defense: PUBLIC INTEREST
5. Asa fifth and separate affirmative defense to all of the Plaintiff's causes of action,
the Plaintiff is barred from relief because of an overriding public interest.
Sixth Affirmative Defense: CONTRIBUTORY OR COMPARATIVE NEGLIGENCE OR
FAULT
6. Asa sixth and separate affirmative defense to all of the Plaintiff's causes of
action, any defenses sustained by the Plaintiff as a result of the occurrences alleged in the
complaint were legally and proximately caused, in whole or in part, by the Plaintiff's own
contributory or comparative negligence or fault.
Ml
Mt
Mt
9
ANSWER TO COMPLAINT
Case No. CGC-10-5009341 || Seventh Affirmative Defense: ADDITIONAL AFFIRMATIVE DEFENSES
2 7. As a seventh and separate affirmative defense to all of Plaintiffs causes of action,
3 || the Defendants reserve the right to assert additional affirmative defenses based on information
4 || gathered in the course of investigation and discovery.
5 PRAYER FOR RELIEF
6 Defendants seek judgment as follows:
7 qd) That the plaintiff recovers nothing by way of its complaint.
8 (2) That the Court enter judgment for the Defendants.
9 (3) For reimbursement of costs incurred in defense of this action.
10 (4) For reimbursement of attorney fees in an amount determined by the Court to be
11 reasonable.
12 (5) For such other relief as the Court may deem proper.
13
14 Date: November 2, 2012 CJH & Associates, P.C.
15
16
Attorney for Defendants, RAYMOND
17 XIANG KAI ZHANG et al.
18
19
20
21
22
23
24
25
26
27
sume °
(510) 832-1696 ANSWER TO COMPLAINT
Case No. CGC-10-500934| Date: October 3) _, 2012
I am a defendant in this action. I have read the foregoing answer to the complaint. The
matters stated in the answer are true of my own knowledge except those matters stated on
information and belief, and as to those matters I believe them to be true.
I declare under penalty of perjury under the laws of the State of California that the
foregoing is true and correct.
—_-—
Raymond Zhang
-l-
ZHANG APPLICATION FOR LEAVE TO AMEND ANSWER TO ATTACH VERIFICATIONPOS-030
ATTORNEY OR PARTY WITHOUT ATTORNEY (Name, State Bar number, and address): FOR COURT USE ONLY
Chijeh Hu (SBN 241271)
CJH & Associates, P.C.
1440 Broadway, Suite 1000
Oakland, CA 94612
TevepHone No: 510-832-1686 FAX NO. (Optional 110-251-1155
E-MAIL ADDRESS (Optional hu@cjhapc.com
ATTORNEY FOR (Name): Defendants Raymond Zhang et al.
SUPERIOR COURT OF CALIFORNIA, COUNTY OF San Francisco
street aopress 400 McAllister Street
maiin avoress:'400 McAllister Street
erry ano zie cove: San Francisco 94102
eranch name: Civic Center Courthouse
PETITIONER/PLAINTIFF:Cathay Bank
RESPONDENT/DEFENDANT:Raymond Zhang et al.
CASE NUMBER
PROOF OF SERVICE BY FIRST-CLASS MAIL—CIVIL CGC-10-500934
(Do not use this Proof of Service to show service of a Summons and Complaint.)
4. lam over 18 years of age and not a party to this action. | am a resident of or employed in the county where the mailing
took place.
2. My residence or business address is:
1440 Broadway, Suite 1000, Oakland, CA 94612
3. On (date):November 7, 2012 | mailed from (city and state): Oakland, CA
the following documents (specify):
First Amended Answer to Complaint
The documents are listed in the Attachment to Proof of Service by First-Class Mait—Civil (Documents Served)
(form POS-030(D))
4. \served the documents by enclosing them in an envelope and (check one):
a. [__] depositing the sealed envelope with the United States Postal Service with the postage fully prepaid.
b. placing the envelope for collection and mailing following our ordinary business practices. | am readily familiar with this
business's practice for collecting and processing correspondence for mailing. On the same day that correspondence is
placed for collection and mailing, it is deposited in the ordinary course of business with the United States Postal Service in
a sealed envelope with postage fully prepaid.
5. The envelope was addressed and mailed as follows:
a. Name of person served: Hanna Raanan
b. Address of person served:
Frandzel Robins Bloom & Csato
6500 Wilshire Blvd., 17th Fl.
Los Angeles, CA 90048
[] The name and address of each person to whom I mailed the documents is listed in the Attachment to Proof of Service
by First-Class Mail—Civil (Persons Served) (POS-030(P)).
I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct.
Date: November 7, 2012
Brian Hofer > Bw \
(TYPE OR PRINT NAME OF PERSON COMPLETING THIS FORM) (SIGNATURE OF PERSON COMPLETING THIS FORM)
Form Approved er Optona Use PROOF OF SERVICE BY FIRST-CLASS MAIL—CIVIL Code of Givi Proce 86 1019. 10198
POS-030 [New January 1, 2005] (Proof of Service)
Preview
SUPERIOR COURT OF CALIFORNIA COUNTY OF SAN FRANCISCO Document Scanning Lead Sheet Nov-07-2012 2:36 pm Case Number: CGC-10-500934 Filing Date: Nov-07-2012 2:34 Filed by: MICHAEL RAYRAY Juke Box: 001 Image: 03833265 ANSWER CATHAY BANK, A CALIFORNIA BANKING CORPORATION VS. RAYMOND XIANG ZHANG et al 001003833265 Instructions: Please place this sheet on top of the document to be scanned.Chijeh Hu (SBN 241271) CJH & ASSOCIATES, P.C. 1440 Broadway, Suite 1000 Oakland, California 94612 Telephone: (510) 832-1686 Facsimile: (510) 251-1155 Attorney for Defendants, RAYMOND XIANG KAI ZHANG, et al. SUPERIOR COURT OF CALIFORNIA COUNTY OF SAN FRANCISCO CATHAY BANK, a California banking corporation, Plaintiff, Vv. RAYMOND XIANG KAI ZHANG, aka RAYMOND KAI ZHANG, aka, RAYMOND ZHANG, aka XIAHNG KAI ZHANG, an individual; CINDY ZHANG, an individual; DONG YING QUI, an individual; XIANG KAI, LLC, a California limited liability company; RAY KAI, LLC, a California limited liability company; RAY KAI, LLC, a California limited liability company; ZHANGS, LLC, a California limited liability company; and DOES 1 through 200, inclusive. Defendants. RAYMOND ZHANG, an individual; CINDY ZHANG, an individual; DONG YING QUI, an individual; RAY KAI, LLC, a California limited liability company; and ZHANGS, LLC, a California limited liability company, Cross-Complainants, Vv. CATHAY BANK, a California banking corporation; and DOES 201-230, inclusive, Cross-Defendants. Case No. CGC-10-500934 FIRST AMENDED ANSWER TO COMPLAINT FOR: 1. (cause of action dismissed) 2. SPECIFIC PERFORMANCE TO ENFORCE TERMS AND PROVISIONS OF DEED OF TRUST; APPOINTMENT OF RECEIVER; AND INJUNCTIVE RELIEF 3. (cause of action dismissed) 4. SPECIFIC PERFORMANCE TO ENFORCE TERMS AND PROVISIONS OF DED OF TRUST; APPOINTMENT OF RECEIVER; AND INJUNCTIVE RELIEF 5. (cause of action dismissed) 6. SPECIFIC PERFORMANCE TO ENFORCE TERMS AND PROVISIONS OF DED OF TRUST; APPOINTMENT OF RECEIVER; AND INJUNCTIVE RELIEF 7. (cause of action dismissed) 8. (cause of action dismissed) 1 ANSWER TO COMPLAINT Case No. CGC-10-50093427 cut a Associates, &c. 1440 BRoapwAY, SUITE 1000 OAKLAND. cA 94612 (510) 832-1686 Defendants Raymond Zhang: Cindy Zhang; RAY KAI LLC (aka RAY KAI, LLC); XIANG KAI, LLC; and ZHANGS, LLC (collectively, the “Defendants”) answer as follows to the complaint of CATHAY BANK (the “Plaintiff”. ADMISSIONS AND DENIALS 1, For paragraph 1 of the complaint, the Defendants lack information or belief sufficient to admit or deny the allegations of that paragraph, and on that basis, they deny them. 2. For paragraph 2, the Defendants admit that Raymond Zhang is, and at all relevant times was, an individual residing in the county of San Francisco, California. 3. For paragraph 3, the Defendants admit that Cindy Zhang is, and at all relevant times was, an individual residing in the county of San Francisco, California. Raymond Zhang and Cindy Zhang are sometimes collectively referred to as the “Zhangs.” 4, For paragraph 4, the Defendants lack information or belief sufficient to admit or deny the allegations of that paragraph, and on that basis, they deny them. 5. For paragraph 5, the Defendants admit that XIANG KAI, LLC is a California limited liability company and has its principal place of business in San Francisco, California. 6. For paragraph 6, the Defendants admit that RAI KAI, LLC is a California limited liability company. 7. For paragraph 7, the Defendants admit that ZHANGS, LLC is a California limited liability company and has its principal place of business in San Francisco, California. 8. For paragraph 8, the Defendants lack information or belief sufficient to admit or deny the allegations of that paragraph, and on that basis, they deny them. 9. For paragraph 9, the Defendants deny every allegation. 10. For paragraph 10, the Defendants admit every allegation. il. For paragraph 11, the Defendants lack information or belief sufficient to admit or deny the allegation of that paragraph, and on that basis, they deny them. 12. For paragraph 12, the Defendants admit that the Zhangs entered into a business loan agreement on or about November 2006 (the “LOC Loan”), and that a document is attached 2 ANSWER TO COMPLAINT Case No. CGC-10-500934wWN 27 can a associates. Fe, 1440 BROADWAY. SUITE 1000 OAKLAND, €4 94612 (510) 832-1686 to the complaint as Exhibit 1. 13. For paragraph 13, the Defendants assert that the terms of Exhibit 1 speak for themselves. Except for this admission, the Defendants deny each remaining allegation of that paragraph. 14, For paragraph 14, the Defendants assert that the terms of Exhibit | speak for themselves. Except for this admission, the Defendants deny each remaining allegation of that paragraph. 15. For paragraph 15, the Defendants admit that the Zhangs executed a promissory note in favor of the Plaintiff on or about June 2007 (the “LOC Note 1”), and that a document is attached to the complaint as Exhibit 2. 16. For paragraph 16, the Defendants assert that the terms of Exhibit 2 speak for themselves. Except for this admission, the Defendants deny each remaining allegation of that paragraph. 17. For paragraph 17, the Defendants assert that the terms of Exhibit 2 speak for themselves. Except for this admission, the Defendants deny each remaining allegation of that paragraph. 18. For paragraph 18, the Defendants assert that the terms of Exhibit 2 speak for themselves. Except for this admission, the Defendants deny each remaining allegation of that paragraph. 19. For paragraph 19, the Defendants admit that XIANG KAI, LLC executed a deed of trust in favor of the Plaintiff on or about June 2007 (the “LOC DOT 1”), and that a document is attached to the complaint as Exhibit 3. 20. For paragraph 20, the Defendants assert that the terms of Exhibit 3 speak for themselves. Except for this admission, the Defendants deny each remaining allegation of that paragraph. 21. For paragraph 21, the Defendants assert that the terms of Exhibit 3 speak for themselves. Except for this admission, the Defendants deny each remaining allegation of that 3 ANSWER TO COMPLAINT Case No. CGC-10-50093427 can a AssociaTes. Fe" 1440 BRoapway. SUITE 1000 OAKLAND. CA 94612 (510) 832-1686 paragraph. 22. For paragraph 22, the Defendants assert that the terms of Exhibit 3 speak for themselves. Except for this admission, the Defendants deny each remaining allegation of that paragraph. 23. For paragraph 23, the Defendants admit that the Zhangs executed two LOC extension agreements with the Plaintiff beginning on or about June 2009 (the “LOC Extension Agreements”), and that a document is attached to the complaint as Exhibit 4. 24. For paragraph 24, the Defendants admit that the Zhangs executed two change-in- terms agreements with the Plaintiff beginning on or about December 2009 (the “LOC CITAs”), and that a document is attached to the complaint as Exhibit 5. 25. For paragraph 25, the Defendants admit that the Zhangs executed a loan modification agreement with the Plaintiff on or about December 2009 (the “LOC Mod”), and that a document is attached to the complaint as Exhibit 6. 26. For paragraph 26, the Defendants admit that XIANG KAI, LLC executed a guaranty in favor of the Plaintiff on or about December 2009 (the “XIANG LOC Guaranty”), and that a document is attached to the complaint as Exhibit 7. 27. For paragraph 27, the Defendants assert that the terms of Exhibit 7 speak for themselves. 28. For paragraph 28, the Defendants admit that XIANG KAI, LLC and the Zhangs executed a security agreement in favor of the Plaintiff on or about December 2009 (the “LOC Security Agreement”), and that a document is attached to the complaint as Exhibit 8. 29. For paragraph 29, the Defendants assert that the terms of Exhibit 8 speak for themselves. 30. For paragraph 30, the Defendants assert that the terms of Exhibit 8 speak for themselves. 31. For paragraph 31, the Defendants lack information or belief sufficient to admit or deny the allegation of that paragraph, and on that basis, they deny them. 4 ANSWER TO COMPLAINT Case No. CGC-10-50093427 can a associates. &c, 1440 BROADWAY, SUITE 1000 OAKLAND. €& 94612 (510) 832-1686 32. For paragraph 32, an admission or denial is not required. 33, For paragraph 33, the Defendants admit that RAI KAI, LLC entered into a construction loan agreement with the Plaintiff on or about October 2006 (the “Construction Loan 2”), and that a document is attached to the complaint as Exhibit 10. The Defendants also admit that the maximum principal amount of the loan was $7,238,000. Except for these admissions, the Defendants deny each remaining allegation of that paragraph. 34. For paragraph 34, the Defendants assert that the terms of Exhibit 10 speak for themselves. 35. For paragraph 35, the Defendants assert that the terms of Exhibit 10 speak for themselves. 36. For paragraph 36, the Defendants assert that the terms of Exhibit 10 speak for themselves. 37. For paragraph 37, the Defendants assert that the terms of Exhibit 10 speak for themselves. 38. For paragraph 38, the Defendants assert that the terms of Exhibit 10 speak for themselves. 39. For paragraph 39, the Defendants admit that RAI KAI, LLC executed a promissory note in favor of the Plaintiff on or about October 2006 in the amount of $7,238,000 (the “Construction Note 2”), and that a document is attached to the complaint as Exhibit 11. Except for these admissions, the Defendants deny each remaining allegation of that paragraph. 40. For paragraph 40, the Defendants assert that the terms of Exhibit 11 speak for themselves. 41. For paragraph 41, the Defendants assert that the terms of Exhibit 11 speak for themselves. 42. For paragraph 42, the Defendants admit that RAI KAI, LLC executed a deed of trust concerning the MacArthur Blvd property in favor of the Plaintiff on or about October 2006 (the “Construction DOT 2”), and that a document is attached to the complaint as Exhibit 12. 5 ANSWER TO COMPLAINT Case No. CGC-10-50093427 cam a Associates. Fe. 1440 Broapway, SUITE 1000 OAKLAND. cA 94612 (S10) 832-1686 Except for these admissions, the Defendants deny each remaining allegations of that paragraph and assert that the terms of Exhibit 12 speak for themselves. 43. For paragraph 43, the Defendants assert that the terms of Exhibit 12 speak for themselves. 44, For paragraph 44, the Defendants lack information or belief sufficient to admit or deny the allegations of that paragraph, and on that basis, they deny them. They also admit that a document is attached to the complaint as Exhibit 13. 45. For paragraph 45, the Defendants admit that Raymond Zhang executed a personal guarantee in favor of the Plaintiff concerning Construction Note 2 on or about October 2006, and that a document is attached to the Complaint as Exhibit 14. Except for these admissions, the Defendants deny each remaining allegation of that paragraph and assert that the terms of Exhibit 14 speak for themselves. 46. For paragraph 46, the Defendants admit that Cindy Zhang executed a personal guarantee in favor of the Plaintiff concerning Construction Note 2 on or about October 2006, and that a document is attached to the Complaint as Exhibit 15. Except for these admissions, the Defendants deny each remaining allegation of that paragraph and assert that the terms of Exhibit 15 speak for themselves. 47. For paragraph 47, the Defendants admit that RAI KAI, LLC and the Plaintiff entered into three extension agreements concerning the Construction Note 2 beginning on or about June 2008 (the “Extension Agreements”), and that a document is attached to the complaint as Exhibit 16. Except for these admissions, the Defendants deny each remaining allegation of that paragraph and assert that the terms of Exhibit 16 speak for themselves. 48. For paragraph 48, the Defendants admit that RAI KAI, LLC and the Plaintiff entered into a loan modification agreement concerning the Construction Note 2 on or about February 2009 (the “Loan Mod 1”), and that a document is attached to the complaint as Exhibit 17. Except for these admissions, the Defendants deny each remaining allegation of that paragraph and assert that the terms of Exhibit 17 speak for themselves. 6 ANSWER TO COMPLAINT Case No. CGC-10-500934wn 27 can & associates. 76, 1440 BROADWAY. SUITE 1000 OAKLAND, cA 94612 (510) 632-1686 49. For paragraph 49, the Defendants admit that RAI KAI, LLC and the Plaintiff entered into a loan modification agreement concerning the Construction Loan 2 on or about December 2009 (the “Loan Mod 2”), and that a document is attached to the complaint as Exhibit 18. Except for these admissions, the Defendants deny each remaining allegation of that paragraph and assert that the terms of Exhibit 18 speak for themselves. 50. For paragraph 50, the Defendants admit that RAI KAI, LLC and the Plaintiff entered into a loan modification agreement concerning the Construction Note 2 on or about February 2010 (the “Loan Mod 3”), and that a document is attached to the complaint as Exhibit 19. Except for these admissions, the Defendants deny each remaining allegations of that paragraph and assert that the terms of Exhibit 19 speak for themselves. 51. For paragraph 51, the Defendants deny each and every allegation. Except for these denials, the Defendants admit that a document is attached to the complaint as Exhibit 20. 52. For paragraph 52, the Defendants assert that the terms of Exhibit 20 speak for themselves. 53. For paragraph 53, the Defendants assert that the terms of Exhibit 20 speak for themselves. 54. For paragraph 54, the Defendants assert that the terms of Exhibit 20 speak for themselves. 55. For paragraph 55, the Defendants admit that the Zhangs executed a deed of trust in favor of the Plaintiff on or about December 2009 (the “DOT 4”), and that a document is attached to the complaint as Exhibit 21. Except for these admissions, the Defendants deny each remaining allegation of that paragraph and assert that the terms of Exhibit 21 speak for themselves. 56. For paragraph 56, the Defendants assert that the terms of Exhibit 21 speak for themselves. 57. For paragraph 57, the Defendants assert that the terms of Exhibit 21 speak for themselves. 58. For paragraph 58, the Defendants admit that the ZHANGS, LLC executed a deed 7 ANSWER TO COMPLAINT Case No. CGC-10-50093427 cana associates. F.C: 1440 BRoaDWAY. SUITE 1000 OAKLAND. CA 94612 (S10) 832-1686 of trust in favor of the Plaintiff on or about December 2009 (the “DOT 5”), and that a document is attached to the complaint as Exhibit 22. Except for these admissions, the Defendants deny each remaining allegation of that paragraph and assert that the terms of Exhibit 22 speak for themselves. 59. For paragraph 59, the Defendants assert that the terms of Exhibit 22 speak for themselves. 60. For paragraph 60, the Defendants assert that the terms of Exhibit 22 speak for themselves. 61. For paragraph 61, the Defendants lack information or belief sufficient to admit or deny the allegations of that paragraph, and on that basis, they deny them. 62. For paragraph 62, the Defendants admit that the RAI KAI, LLC executed additional loan documents in favor of the Plaintiff in connection with the Construction Note 2, and that a document is attached to the complaint as Exhibit 24. Except for these admissions, the Defendants deny each remaining allegation of that paragraph and assert that the terms of Exhibit 24 speak for themselves. 63. For paragraph 63, an admission or denial is not required. 64. For paragraph 64, the Defendants admit that the Zhangs are in default under the LOC Note 1. 65. For paragraph 65, the Defendants admit every allegation. 66. For paragraph 66, the Defendants deny every allegation. 67. For paragraph 67, the Defendants admit every allegation. 68. For paragraph 68, the Defendants lack information or belief sufficient to admit or deny the allegation of the paragraph, and on that basis, they deny them. 69. For paragraph 69, the Defendants deny every allegation. HM] HI I 8 ANSWER TO COMPLAINT Case No. CGC-10-50093427 28 can @ AssocIATES, Fe 1440 BROADWAY. SUITE 1000 OAKLAND, €4 94612 (510) 832-1686 AFFIRMATIVE DEFENSES First Affirmative Defense: ESTOPPEL 1. As a first and separate affirmative defense to all of the Plaintiff's causes of action, the complaint is barred by the doctrine of estoppel. Second Affirmative Defense: LACHES 2. Asa second and separate affirmative defense to all of the Plaintiff's causes of action, the complaint is barred by the doctrine of laches. Third Affirmative Defense: WAIVER 3. As a third and separate affirmative defense to all of the Plaintiff's causes of action, the complaint is barred by the doctrine of waiver. Fourth Affirmative Defense: UNCLEAN HANDS 4, As a fourth and separate affirmative defense to all of the Plaintiff's causes of action, the Plaintiff has unclean hands with regards to the matters and events referenced in the complaint, which are incorporated into this affirmative defense as though fully set forth by this reference. The Plaintiff also has unclean hands with regards to other matters and events. Fifth Affirmative Defense: PUBLIC INTEREST 5. Asa fifth and separate affirmative defense to all of the Plaintiff's causes of action, the Plaintiff is barred from relief because of an overriding public interest. Sixth Affirmative Defense: CONTRIBUTORY OR COMPARATIVE NEGLIGENCE OR FAULT 6. Asa sixth and separate affirmative defense to all of the Plaintiff's causes of action, any defenses sustained by the Plaintiff as a result of the occurrences alleged in the complaint were legally and proximately caused, in whole or in part, by the Plaintiff's own contributory or comparative negligence or fault. Ml Mt Mt 9 ANSWER TO COMPLAINT Case No. CGC-10-5009341 || Seventh Affirmative Defense: ADDITIONAL AFFIRMATIVE DEFENSES 2 7. As a seventh and separate affirmative defense to all of Plaintiffs causes of action, 3 || the Defendants reserve the right to assert additional affirmative defenses based on information 4 || gathered in the course of investigation and discovery. 5 PRAYER FOR RELIEF 6 Defendants seek judgment as follows: 7 qd) That the plaintiff recovers nothing by way of its complaint. 8 (2) That the Court enter judgment for the Defendants. 9 (3) For reimbursement of costs incurred in defense of this action. 10 (4) For reimbursement of attorney fees in an amount determined by the Court to be 11 reasonable. 12 (5) For such other relief as the Court may deem proper. 13 14 Date: November 2, 2012 CJH & Associates, P.C. 15 16 Attorney for Defendants, RAYMOND 17 XIANG KAI ZHANG et al. 18 19 20 21 22 23 24 25 26 27 sume ° (510) 832-1696 ANSWER TO COMPLAINT Case No. CGC-10-500934| Date: October 3) _, 2012 I am a defendant in this action. I have read the foregoing answer to the complaint. The matters stated in the answer are true of my own knowledge except those matters stated on information and belief, and as to those matters I believe them to be true. I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct. —_-— Raymond Zhang -l- ZHANG APPLICATION FOR LEAVE TO AMEND ANSWER TO ATTACH VERIFICATIONPOS-030 ATTORNEY OR PARTY WITHOUT ATTORNEY (Name, State Bar number, and address): FOR COURT USE ONLY Chijeh Hu (SBN 241271) CJH & Associates, P.C. 1440 Broadway, Suite 1000 Oakland, CA 94612 TevepHone No: 510-832-1686 FAX NO. (Optional 110-251-1155 E-MAIL ADDRESS (Optional hu@cjhapc.com ATTORNEY FOR (Name): Defendants Raymond Zhang et al. SUPERIOR COURT OF CALIFORNIA, COUNTY OF San Francisco street aopress 400 McAllister Street maiin avoress:'400 McAllister Street erry ano zie cove: San Francisco 94102 eranch name: Civic Center Courthouse PETITIONER/PLAINTIFF:Cathay Bank RESPONDENT/DEFENDANT:Raymond Zhang et al. CASE NUMBER PROOF OF SERVICE BY FIRST-CLASS MAIL—CIVIL CGC-10-500934 (Do not use this Proof of Service to show service of a Summons and Complaint.) 4. lam over 18 years of age and not a party to this action. | am a resident of or employed in the county where the mailing took place. 2. My residence or business address is: 1440 Broadway, Suite 1000, Oakland, CA 94612 3. On (date):November 7, 2012 | mailed from (city and state): Oakland, CA the following documents (specify): First Amended Answer to Complaint The documents are listed in the Attachment to Proof of Service by First-Class Mait—Civil (Documents Served) (form POS-030(D)) 4. \served the documents by enclosing them in an envelope and (check one): a. [__] depositing the sealed envelope with the United States Postal Service with the postage fully prepaid. b. placing the envelope for collection and mailing following our ordinary business practices. | am readily familiar with this business's practice for collecting and processing correspondence for mailing. On the same day that correspondence is placed for collection and mailing, it is deposited in the ordinary course of business with the United States Postal Service in a sealed envelope with postage fully prepaid. 5. The envelope was addressed and mailed as follows: a. Name of person served: Hanna Raanan b. Address of person served: Frandzel Robins Bloom & Csato 6500 Wilshire Blvd., 17th Fl. Los Angeles, CA 90048 [] The name and address of each person to whom I mailed the documents is listed in the Attachment to Proof of Service by First-Class Mail—Civil (Persons Served) (POS-030(P)). I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct. Date: November 7, 2012 Brian Hofer > Bw \ (TYPE OR PRINT NAME OF PERSON COMPLETING THIS FORM) (SIGNATURE OF PERSON COMPLETING THIS FORM) Form Approved er Optona Use PROOF OF SERVICE BY FIRST-CLASS MAIL—CIVIL Code of Givi Proce 86 1019. 10198 POS-030 [New January 1, 2005] (Proof of Service)