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HomeMy WebLinkAboutItem 7.1 Eden Housing Vets Family Apartments or 19 82 STAFF REPORT CITY CLERK CITY COUNCIL File #600-30 DATE: June 16, 2015 TO: Honorable Mayor and City Councilmembers FROM: Christopher L. Foss, City Manager " SUBJECT: Regulatory Agreement, Loan Agreement, Revised Predevelopment Loan Agreement, and Management and Marketing Plan Agreement with affiliates of Eden Housing, Inc. for the Veterans Family Apartments Development Prepared by Amy Cunningham, Assistant to the City Manager, Kim Obstfeld, Housing Specialist, Tim Cremin, Principal, Meyers Nave, and Lauren Quint, Associate, Meyers Nave EXECUTIVE SUMMARY: The City Council will consider resolutions approving a Regulatory Agreement, Management and Marketing Plan Agreement, a Revised Predevelopment Loan Agreement with Corona Crescent, Inc. (an affiliate of Eden Housing, Inc.) and a Loan Agreement in the amount of $5 million with Eden Housing, Inc. for the Veterans Family Apartments development. On November 18, 2014, the City Council committed a total of $6.4 million to the Veterans Family Apartments from the City's Affordable Housing Fund. The City Council authorized initial funding in the form of a $1.4 million Predevelopment Loan on January 20, 2015. Authorization of the remaining $5 million will provide for funding for project construction. Approval of the Regulatory Agreement will establish key terms and requirements for the ongoing operation of the project. FINANCIAL IMPACT: If approved, the Loan Agreement will require a budget change in the amount of $5 million from the City's Affordable Housing Fund, as well as an additional allocation of$75,000 from the City's Affordable Housing Fund for legal services associated with the project. RECOMMENDATION: Staff recommends that the City Council (1) Adopt the Resolutions Approving (a) the Regulatory Agreement and Management and Marketing Plan Agreement, (b) Loan Agreement, and (c) revised Predevelopment Loan Agreement, all relating to the development of an affordable housing project with a veterans preference; and (2) Approve the budget change to allocate adequate funding for the Loan and legal services associated with the project. Page 1 of 6 ITEM NO. 7.1 Submitted By ' � Submitted By 'A Reviewed By Community Development City Attorney Assistant City Manager Director DESCRIPTION: The City Council has committed to providing financial assistance to Eden Housing (or a controlled affiliate) for the development of a 66-unit affordable rental project targeted to house veterans of the U.S. armed forces and their families. The project is tentatively named Veterans Family Apartments. The development of veterans housing is a key City Council Strategic Initiative. At the November 18, 2014 City Council meeting, the City Council committed to providing a $6.4 million loan from the City's Affordable Housing Fund to partially finance the development of Veterans Family Apartments. At that meeting, the City Council also directed staff to work with Eden Housing to negotiate the agreements required to develop the project. Since that time, Staff has worked closely with Eden Housing to prepare and revise a Predevelopment Loan Agreement, prepare a Regulatory Agreement and Declaration of Restrictive Covenants, Management and Marketing Plan Agreement, and a Loan Agreement to establish requirements and terms associated with acceptance of the City loan funds. Proiect Overview The Veterans Family Apartments site is located at 6707 Golden Gate Drive in close proximity to the West Dublin / Pleasanton BART station as well as downtown shops, services, and amenities. Figure 1 shows an aerial map of the site location. The four-story building will include a mix of one, two, and three-bedroom apartments to accommodate a variety of family types. Planned amenities will include a community room, private meeting areas for smaller groups, computer lab, laundry facilities, community gardens, outdoor grill area, play area, and coordinated case management and other support services provided in partnership with local veterans' organizations. Page 2 of 6 Figure 1. Veterans Family Housing Site Location �G i I �X; 1 sy f i I , Project Financing The estimated total cost to develop the Veterans Family Apartments is approximately $28 million. In addition to a City of Dublin loan, Eden Housing has secured financing from Alameda County (Boomerang, HOME, and CHDO funds), Bank of America, and from the California Department of Housing and Community Development (Infill Infrastructure Grant). Applications for additional funds from the Federal Home Loan Bank Affordable Housing Program and Home Depot Foundation are pending. The primary source of project financing is Low-Income Housing Tax Credits (LIHTC). Eden Housing submitted a non-competitive 4% LIHTC application in May 2015. Confirmation of the LIHTC award is expected in August 2015. Eden Housing has applied for 25 project-based housing vouchers from the Alameda County Housing Authority, all or a portion of which may be converted to Veterans Affairs Supportive Housing (VASH) vouchers once the project nears completion. The table below shows secured and pending funding sources. Source Amount Status Bank of America, Department of Justice $3,000,000 Secured Subordinate Loan City of Dublin $6,400,000 Secured — City Council Resolution #199-14 Infill Infrastructure Grant, State of $2,101,547 Secured California Alameda County Boomerang Fund $990,000 Secured Alameda County HOME and CHDO $300,000 Secured Funds Federal Home Loan Bank Affordable $500,000 Application pending (award Housing Program announcement in June 2015) Home Depot Foundation Grant $250,000 Application pending (award announcement expected in August Page 3 of 6 Source Amount Status 2015) 4% Low Income Housing Tax Credits $14,000,000 Application pending (non- competitive award) The approximately 1.4-acre project site was transferred to Eden Housing at a nominal price by BWD Dublin, LLC, an affiliate of Bay West Development Partners IV LLC (Bay West). Bay West is the developer of the 314-unit market-rate residential project to the immediate north of the Veterans Family Apartments site (across Saint Patrick Way). This transfer was approved by the City Council as a component of the Bay West Community Benefit Agreement on October 7, 2014. The land transfer served as a means of facilitating the Veterans Family Apartments development and satisfied the inclusionary housing obligation for the Bay West project. Project Schedule Eden Housing expects to finalize financing and break ground on the project in August or September 2015. It is anticipated that units will be complete and ready for occupancy by December 2016. Revised Predevelopment Loan Agreement The initial Predevelopment Loan Agreement was negotiated with Eden and approved by the City Council on January 20, 2015 (Resolution #05-15). Eden has since requested minor changes to the Predevelopment Loan Agreement. Proposed changes include: • Predevelopment Loan Repayment: Changes to Recital E and Section 1.2(c) would allow Eden to use funds from the Bank of America Department of Justice loan to repay the City Predevelopment Loan. This change will allow Eden to meet the tight funding use timeframe associated with the Bank of America loan. Once the Predevelopment Loan is repaid, Eden could draw from the undispersed $6.4 million construction loan, pursuant to the terms of the Loan Agreement outlined below. • Eden Affiliate: Revisions to Sections 1.2(b) and 5.1 would change the Eden owned and operated affiliate from Corona Crescent, Inc. to Eden Development, Inc. Eden Development, Inc. is a Community Housing Development Organization (CHDO) as defined by the United States Department of Housing and Urban Development. CHDO's must meet certain characteristics regarding legal status and organizational structure. Making this change will allow Eden to take advantage of an additional $300,000 in funds from Alameda County. • Regulatory Agreement: A change to Section 1.7 would eliminate detail regarding the use and operation of the development and refer instead to the Regulatory Agreement as described below. This is useful in ensuring consistency and clarity throughout the document package. Regulatory Agreement and Declaration of Restrictive Covenants The negotiated Regulatory Agreement and Declaration of Restrictive Covenants establish City requirements for the operation of the project throughout the term of the agreement (55 years). Key terms of the Regulatory Agreement and Declaration of Restrictive Covenants include: • Affordability: With the exception of a manager's unit, all units will be rented at affordable levels to very low and low income households for a period of no less than 55 years. • Veteran's preference: Eden Housing will conduct extensive outreach to veterans organizations and prioritize placement of veterans households in project units, to the Page 4 of 6 extent allowed under fair housing and other relevant law. In addition, Eden Housing will apply for VASH vouchers from the Veterans Administration and set aside units for VASH voucher holders as appropriate. • Fair housing and non-discrimination: Eden Housing will comply with all relevant state and federal fair housing laws and will not discriminate against any person or group in the operation of the project. • Annual monitoring: The project will be subject to annual monitoring to verify compliance with agreement terms and ensure that tenant eligibility is verified upon initial occupancy and annually thereafter. Eden Housing will provide a written report and will be subject to an in-person records and site inspection. • Affordable unit credits: The project will generate a total of 57 affordable unit credits (66 total units less 8 needed to satisfy the 12.5% requirement for the project as a whole and 1 manager's unit). As established in the Bay West Community Benefit Agreement, Eden Housing is eligible for an award of affordable unit credits generated from the project development. The City has agreed to grant Eden Housing up to 17 affordable unit credits, which may be sold to another developer and used to satisfy that developer's inclusionary housing obligation, subject to approval by the Community Development Director. Credits issued to Eden Housing will revert to the City if not used prior to the project securing its permanent financing (shortly following completion of construction). The remaining 40 affordable unit credits will be retained by the City. • Maintenance, repair, and management: Eden Housing will be fully responsible for management of the property and will maintain the property in good physical condition. • Management and Marketing Plan: Eden Housing will prepare and submit a Management and Marketing Plan for the project for the City's review and approval. The Plan will describe marketing and outreach efforts to prospective tenants, particularly veterans' households, as well as wait list management, eligibility verification procedures, and ongoing standards for maintaining and managing the property. Management and Marketing Plan Agreement The Management and Marketing Plan Agreement establishes the preference points system for unit leasing, a key component of the Management and Marketing Plan. The Management and Marketing Plan is required under the Regulatory Agreement and will be completed by Eden Housing, Inc. and reviewed and approved by the City during the construction period. The preference points system is intended to ensure that veteran households receive priority in the application and leasing process, with secondary preferences for those families that live/work in Dublin, as well as seniors and persons with disabilities. Loan Agreement The Loan Agreement establishes requirements for the issuance, use, and repayment of City loan funds. Key terms of the Loan Agreement include: • Loan amount: The City will provide a total loan of up to $6.4 million, $1.4 million of which is in the form of a predevelopment loan (as approved by the City Council on January 20, 2015). • Excess proceeds: Eden will repay a portion of the principal balance of the City loan with any excess proceeds when permanent project financing is secured. Excess proceeds are the difference between the amount secured in permanent financing and final construction costs. • Loan terms: The loan is offered at a maximum 3% simple interest rate (rate may be lowered if needed to facilitate a permanent financing package), maturing in 55 years. Page 5 of 6 • Repayment: Loan repayment will be based on residual receipts from the operation of the project. Eden may retain 40% of annual residual receipts and 60% will be applied toward repayment of the City loan as well as loans from Alameda County, HCD, and other project financing sources. • Use of loan funds: Loan funds must be used to finance the predevelopment, development, and construction of the Veterans Family Apartments project. The project must be developed and operated in accordance with the Regulatory Agreement and Declaration of Restrictive Covenants, the components of which are outlined above. NOTICING REQUIREMENTS/PUBLIC OUTREACH: None. ATTACHMENTS: 1. Resolution Approving Regulatory Agreement and Declaration of Restrictive Covenants Exhibit A - Regulatory Agreement 2. Resolution Approving Loan Agreement Exhibit A - Loan Agreement 3. Resolution Approving Revised Predevelopment Loan Agreement Exhibit A - Revised Predevelopment Loan Agreement 4. Management and Marketing Plan Agreement 5. Budget Change Form Page 6 of 6 RESOLUTION NO. ** -15 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DUBLIN ********* APPROVING AN AFFORDABLE HOUSING REGULATORY AGREEMENT AND DECLARATION OF RESTRICTIVE COVENANTS BETWEEN THE CITY OF DUBLIN AND CORONA CRESCENT, INC., RELATING TO THE DEVELOPMENT OF AN AFFORDABLE HOUSING PROJECT WITH VETERANS PREFERENCE AND APPROVING A MANAGEMENT AND MARKETING PLAN AGREEMENT SETTING FORTH A POINTS PREFERENCE SYSTEM FOR THE PROJECT WHEREAS, Corona Crescent, Inc., a California nonprofit public benefit corporation ("Developer") and the City of Dublin (the "City") desire to enter into an Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants ("Agreement") on property to be developed on a site within the Downtown Dublin Specific Plan area, located at 6707 Golden Gate Drive, Dublin, California, (APN 941- 1500-030-02) as more particularly described in Exhibit A in the Agreement attached to this Resolution ("Property"); and WHEREAS, Developer is an affiliate of Eden Housing Inc., and is controlled by the same board of directors; and WHEREAS, Developer has acquired the Property from BWD Dublin, LLC, an affiliate of Bay West Development Partners IV LLC, a California limited liability company (the "Market Rate Developer") who intends to develop a mixed-use project on Market Rate Developer's adjacent parcel (APN 941-1500-015-09) located at 7544 Dublin Boulevard in Dublin. Pursuant to that certain "City of Dublin Community Benefit Agreement with Bay West Development Partners IV LLC," dated October 7, 2014, the Market Rate Developer transferred the Property to Developer for a nominal sum; and WHEREAS, Developer intends to construct a residential project on the Property consisting of approximately 66 affordable rental housing units primarily for veterans and their families and other very low and low income families, and related improvements ("Development"); and WHEREAS, Developer has requested, and the City has agreed to provide a loan to Developer in an amount not to exceed Six Million Four Hundred Thousand Dollars ($6,400,000) (the "Total Approved Loan Amount") to finance a portion of the predevelopment, development, and construction costs of the project. The loan shall be made, disbursed, used, and repaid in accordance with the Predevelopment Loan Agreement and Loan Agreement as well as related loan documents including a Promissory Note, Assignment Agreement, and Deed of Trust; and WHEREAS, the Total Approved Loan Amount and the Predevelopment Loan amount were approved by the City Council on November 18, 20147 by Resolution No. 199-14; and ATTACHMENT 1 WHEREAS, an initial draft of the Predevelopment Loan Agreement was approved by the City Council on January 20, 2015 by Resolution No. 05-15; and WHEREAS, the Predevelopment Loan Agreement requires the preparation and recordation of the Regulatory Agreement and Declaration of Restrictive Covenants (the "Regulatory Agreement") to establish the affordability and veterans preference restrictions on the Development. The Regulatory Agreement must be recorded on the Property within ninety (90) days of the Developer's acquisition. This time period was extended until August 1, 2015 with approval from the City Manager on May 13, 2015; and WHEREAS, the Regulatory Agreement establishes requirements for the operation of the Development throughout the 55-year term including rental unit affordability for very low and low income households, fair housing and non- discrimination practices, priority for eligible veterans households, ongoing annual monitoring, maintenance, repair, and management of the property, and preparation and maintenance of a Management and Marketing Plan; and WHEREAS, the "City of Dublin Community Benefit Agreement with Bay West Development Partners IV LLC," dated October 7, 2014 establishes that any affordable unit credits created by the construction of this Development will be controlled by the owner of the project site (Developer); and WHEREAS, the Regulatory Agreement states that a total of 57 affordable unit credits will be generated from the construction of this Development. Developer will be granted 17 of these credits and 40 will be retained by the City. Credits issued to Developer will revert to the City if not used prior the close of permanent project financing. Issuance and use of the credits must comply with Section 8.68.060 of the City of Dublin Municipal Code; and WHEREAS, the City Council hereby finds that the preference points system set forth in a Marketing and Management Agreement, attached hereto as Exhibit B will supersede the points system in section 8.68.050 of the Dublin Municipal Code, and has been approved as an alternate means of compliance by the City Council pursuant to Dublin Municipal Code section 8.86.040(E), as it facilitates the City's desire to serve veterans and their families. NOW, THEREFORE, BE IT RESOLVED THAT the City Council of the City of Dublin approves and authorizes the City Manager to execute the Regulatory Agreement in substantially the form attached hereto as Exhibit A, upon the satisfaction of the conditions set forth in the Agreement. BE IT FURTHER RESOLVED THAT the City Council of the City of Dublin approves and authorizes the City Manager to execute the Management and Marketing Plan Agreement in substantially the form attached hereto as Exhibit B, upon the satisfaction of the conditions set forth in the Agreement. ATTACHMENT 1 PASSED, APPROVED AND ADOPTED this 16th day of June, 2015 by the following vote: AYES: NOES: ABSENT: ABSTAIN: Mayor ATTEST: City Clerk 2448689.1 ATTACHMENT 1 Recording Requested by and when Recorded, return to: City of Dublin 100 Civic Plaza Dublin, CA 94568 Attn: City Clerk EXEMPT FROM RECORDING FEES PER GOVERNMENT CODE §§6103, 27383 APN 941-1500-32-02 Space above this line for Recorder's use. AFFORDABLE HOUSING REGULATORY AGREEMENT AND DECLARATION OF RESTRICTIVE COVENANTS This Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants (this "Agreement") is dated as of , 20157 by and between the City of Dublin, a municipal corporation ("City") and Corona Crescent, Inc., a California nonprofit public benefit corporation ("Owner"). City and Owner are hereinafter collectively referred to as the "Parties." This Agreement shall be effective as of the date this Agreement is recorded ("Effective Date"). RECITALS A. The City has adopted the City Inclusionary Zoning Regulations Ordinance, set forth in Chapter 8.68 of the Dublin Municipal Code (the "Ordinance"). The Ordinance at 8.68.030A requires that all new residential development projects of 20 units or more designed and intended for permanent occupancy shall construct 12.5% of the total number of dwelling units within the development as affordable units, except as otherwise provided in the Ordinance. B. A developer may meet its 8.68.030(A) inclusionary housing requirement through one or more of the exceptions set in 8.68.040 of the Ordinance, which includes land dedication to the City or City-designated local non-profit housing developer in lieu of the developer's construction of some or all of the required affordable units if the City Council finds that (1) the dedication of land is consistent with the Ordinance's goal of creating housing for very-low, low- and moderate-income households, (2) the dedicated land is useable for its intended purposes, is free of toxic substances and contaminated soils, and is fully improved, with infrastructure, adjacent utilities, grading, and all development-impact fees paid excluding any inclusionary zoning ordinance fees, and (3) the proposed land dedication is of sufficient size to meet the requirements set forth in 8.68.040(C)(3). Section 8.68.040 also provides that the City Council may waive, wholly or partially, the requirements of the Ordinance and approve alternate methods of compliance which meet the purposes of the Ordinance. 2445 83 5.11 Final Regulatory Agreement I June 2015 Pagel of 23 C. Owner acquired certain property located at the corner of Golden Gate Drive south of Saint Patrick Way in the City of Dublin, California more particularly described as Exhibit A_ (the "Property") from BWD Dublin LLC, a California limited liability company ("Market Rate Developer") who has obtained entitlements for the development of Market Rate Developer's property consisting of two parcels, one parcel identified as APN 941-1500-015-09 (referred to in these Recitals as Parcel A) located on Golden Gate Avenue between Saint Patrick Way and Dublin Boulevard, and the other parcel being Owner's Property (identified as APN 941-1500- 032-02 and sometimes referred to in these Recitals as Parcel B). The Market Rate Developer obtained units from the City's Development Pool in order to construct a mixed-use project (the "Market Rate Developer's Project") consisting of market-rate residential rental units and general commercial uses on Parcel A and affordable rental housing on Parcel B. D. The Market Rate Developer transferred for a nominal sale price the Property to Owner, an affordable housing developer, to satisfy the Market Rate Developer's Project obligations under the City's Inclusionary Zoning Regulations. The transfer of the Property (Parcel B) to Owner also served as a Community Benefit in exchange for the allocation of units from the City's Development Pool, approved by City Council Resolution No. 168-14 dated October 7, 2014. E. As of the date of this Agreement, the Market Rate Developer's Project is evidenced in the following conditions of approval: (1) Conditions of approval dated March 26, 2013 for Planned Development Application No. PLPA-2012-0006 for up to 314 market rate residential units on Parcel A; and (2) Conditions of approval dated March 26, 2013 for Planning Application No. PLPA-2012-00060 for up to 72 units of affordable rental housing on Parcel B. Affordable Unit Credits (created by the construction of affordable rental housing units in excess of the units to be required on Parcel B in accordance with 8.68.060(A) will be owned and controlled by the Owner of the Property, not the Market Rate Housing Developer. F. The above recitals relating to the Market Rate Developer's Project are for information purposes only, and in no way affect the Owner's and City's rights and obligations under this Agreement with respect to the Property, regardless of whether any Affordable Unit Credits are used or applied as recited above. The above recitals also are not intended to relieve the Market Rate Developer of any additional inclusionary obligations the Market Rate Developer may incur as a result of modifications to development plans for Parcel A existing as of the date of this Agreement. G. The Owner intends to develop, construct, own, and operate on the Property the affordable rental housing project consisting of approximately 66 affordable rental housing units primarily for Veterans and their families and other Very Low and Low Income families and related improvements (the "Development"). The Development will include a manager's unit that will not be subject to affordability restrictions. H. The City has entered into or intends to enter into a Predevelopment Loan Agreement with the Owner pursuant to which the City will loan One Million Four Hundred Thousand Dollars ($1,400,000) in Affordable Housing funds to assist in financing Owner's predevelopment costs for the Development (the "Predevelopment Loan"). The City intends to enter into a Loan Agreement (the "Loan Agreement") with the Owner pursuant to which the City will loan Six Million Four Hundred Thousand Dollars ($6,400,000) in Affordable Housing funds, including the $1,400,000 Predevelopment Loan which will be re-loaned or "rolled into" the $6,400,000 City loan (the "City Loan"). The City Loan will be used, together with funds Dublin Vet RegAgmt Final Regulatory Agreement I June 2015 Page 2 of 23 obtained from other sources, for the development, construction and operation of the Development and will make the Development more competitive for the other affordable housing funding sources. I. The Parties have agreed to enter into and record this Agreement in order to satisfy the conditions described in the foregoing Recitals. The Parties intend the covenants set forth in this Agreement to run with the land and to be binding upon Owner and Owner's successors and assigns for a period of not less than fifty-five (55) years. NOW THEREFORE, in consideration of the foregoing, and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows. 1. Definitions. The following terms have the meanings set forth in this Section wherever used in this Agreement or the attached exhibits. "Actual Household Size" means the actual number of persons in the applicable household. "Adjusted for Family Size Appropriate to the Unit" shall be determined consistent with Section 50052.5(h) of the California Health and Safety Code and applicable federal rules, including the rules and regulations applicable to the use of federal low-income housing tax credits. "Adjusted Income" means the total anticipated annual income of all persons in a household, as calculated in accordance with 25 California Code of Regulations Section 6914 or pursuant to a successor State housing program that utilizes a reasonably similar method of calculation of adjusted income. In the event that no such program exists, the City shall provide the Owner with a reasonably similar method of calculation of adjusted income as provided in said Section 6914. "Affordable Rent" means that the gross monthly rent payable by the tenant does not exceed one-twelfth of thirty percent (30%) of the applicable AMI limit, Adjusted for Family Size Appropriate to the Unit, as specified in Section 2.2, less a reasonable utility allowance. "Area Median Income" or "AMI" means the median gross yearly income adjusted for Actual Household Size (to qualify residents) or Assumed Household Size (to calculate rents), as applicable, in the County of Alameda, California, as published from time to time by HCD. In the event that such income determinations are no longer published, or are not updated for a period of at least eighteen (18) months, the City shall provide the Owner with other income determinations which are reasonably similar with respect to methods of calculation to those previously published by HCD. "Assumed Household Size" shall have the meaning set forth in Section 2.2. The definition is utilized to calculate Affordable Rent and is not intended to be a limit on the number of persons occupying a unit. "Claims" is defined in Section 10. Dublin Vet RegAgmt Final Regulatory Agreement I June 2015 Page 3 of 23 "Eligible Household" means a household for which gross household income upon initial occupancy does not exceed the applicable maximum income level for a Restricted Unit as specified in Section 2.1. "Indemnitees" is defined in Section 10. "HCD" means the California Department of Housing and Community Development. "Low Income Household" shall mean a household with an Adjusted Income that does not exceed 50% of area medium income, as established and amended from time to time pursuant to Section 8 of the United States Housing Act of 1937 by HCD. "Low Income Rent" means the rent allowed to be charged on the Low Income Units pursuant to Section 2.1(a) below. "Low Income Units" mean the Units that, pursuant to Section 2.1(a) below, are required to be occupied by Low Income Households. "Management and Marketing Plan" is defined in Section 6.4. "Note" means the Predevelopment Secured Promissory Note dated as of 2015, in the original principal amount of$1,400,000, executed by Corona Crescent, Inc. in favor of the City. If and when the Predevelopment Secured Promissory Note is cancelled and replaced, or amended and restated, by the construction and permanent period Promissory Note in the amount of$6,400,000, the term "Note" shall mean the $6,400,000 Promissory Note evidencing the City's construction and permanent loan to the Owner. "Regulations" means Title 25 of the California Code of Regulations. "Rent" means the total of monthly payments by the residents of a Unit (other than the manager's Unit) for the following: (1) use and occupancy of the Unit and land and related improvements, including parking; (2) any separately charged fees or service charges assessed by the Owner which are required of all tenants, other than security deposits; (3) the cost of an adequate level of service for utilities paid by the tenant, including garbage collection, sewer, water, electricity, gas and other heating, cooking and refrigeration fuel, but not telephone service, cable service or any other utility or service permitted to be excluded from the calculation of Rent pursuant to the terms of 25 California Code of Regulations Section 6918; and (4) any other interest, taxes, fees or charges for use of the land or associated facilities and assessed by a public or private entity other than the Owner, and paid by the tenant. "Restricted Unit" means a dwelling unit which is reserved for occupancy at an Affordable Rent by a household of not more than a specified household income in accordance with and as set forth in Section 2.1. "Very Low Income Household" shall mean a household with an Adjusted Income that does not exceed the qualifying limits for very low income households, adjusted for Actual Household Size, as established and amended from time to time pursuant to Section 8 of the United States Housing Act of 1937, and as published by HCD. Dublin Vet RegAgmt Final Regulatory Agreement I June 2015 Page 4 of 23 "Very Low Income Rent" shall mean the rent permitted to be charged for a Very Low Income Unit pursuant to Section 2.1(b) below. "Very Low Income Units" shall mean the Units, which, pursuant to Section 2.1(b) below, are required to be occupied by Low Income Households. "Veteran" shall mean a person who served in the active United States military, naval, or air service, or such other definition of"Veteran" that may be used by any federal or State agency or public, private or non-profit lender (other than an entity affiliated with the Owner) providing affordable housing funding to the Development, as identified in the financing plan or such other financing (e.g., additional, replacement, or refinancing) approved by the City from time to time. 2. Use and Affordability Restrictions. Owner hereby covenants and agrees, for itself and its successors and assigns, that the Property shall be used solely for the operation of an affordable residential rental development primarily for Veterans consisting of the Development and related improvements, in compliance with the Loan Agreement and the requirements set forth herein. Owner represents and warrants that it has not entered into any agreement that would restrict or compromise its ability to comply with the occupancy and affordability restrictions set forth in this Agreement, and Owner covenants that it shall not enter into any agreement that is inconsistent with such restrictions without the express written consent of City. 2.1 Affordability Requirements. For a term of fifty-five (55) years commencing upon the date of issuance of a final certificate of occupancy or equivalent for the Development, forty-nine percent (49%) of the residential units in the Development will be restricted for occupancy by Very Low and Low Income Households as set forth below (the "Restricted Units"). The City and the Owner acknowledge that other financing sources for the Development may impose additional affordability restrictions on the Development. (a) Seventy-five (75%) of the Restricted Units (i.e., twenty-four (24) units) shall be rented to and occupied by or, if vacant, available for occupancy by Low Income Households; and (b) Twenty-five (25%) of the Restricted Units (i.e., Eight (8) units) shall be rented to and occupied by, or if vacant, available for occupancy by Very Low Income Households. In the event that recertification of tenant incomes indicates that the number of Restricted Units in the Development actually occupied by Eligible Households falls below the number reserved for each income group as specified in this Section 2.1, Owner shall rectify the condition by renting the next available dwelling unit(s) in the Development to Eligible Household(s) until the required income mix is achieved. 2.2 Affordable Unit Credits. As set forth in the City's Municipal Code, 12.5% of the total dwelling units within the Development must be affordable units (eight (8) of the sixty-six (66) units). Because the Development will include sixty-five (65) affordable units, one affordable unit credit certificate Dublin Vet RegAgmt Final Regulatory Agreement I June 2015 Page 5 of 23 shall be issued for each affordable unit constructed in excess of the number of affordable units required to be constructed for the Development. Therefore, at the time building permits are issued, fifty-seven (57) affordable unit credits will be created (Fifty-eight (58) minus one (1) manager's unit). Forty (40) credits will be issued to the City of Dublin and seventeen (17) credits will be issued to Eden Housing, Inc. or an affiliate approved by the City. Credits issued to Eden Housing Inc. will remain effective until all permanent financing for the Development has closed in sufficient amounts to cover all development and construction costs as shown in the Form 8609 issued by TCAC. Eden Housing Inc. agrees to notify the City, in writing, when all permanent financing has closed and the amount of such permanent financing was sufficient to cover the Development's development and construction costs. If Eden Housing Inc. proposes to sell affordable unit credit certificates, it shall first obtain the consent of the City of Dublin Community Development Director, who will document the transfer by certificate number. If the sale of affordable unit credit certificates is not needed by Eden Housing Inc. to cover any gap between the permanent financing and the development and construction costs of the Development, any unused affordable housing credits will revert to the City. Except as set forth in this Agreement, all City rules and regulations set forth in Section 6.68.030(D) of the Inclusionary Zoning Regulations pertaining to affordable housing credits shall apply . 2.3 Rents for Restricted Units. (a) Low Income Rent. Subject to Section 2.3(e) below, the Rent charged to Residents of the Low Income Units shall not exceed one-twelfth (1/12`") of thirty percent (30%) of sixty percent (60%) of Area Median Income, adjusted for Assumed Household Size. (b) Very Low Income Rent. Subject to Section 2.3(e) below, the Rent charged to Residents of the Low Income Units shall not exceed one-twelfth (1/12`") of thirty percent (30%) of fifty percent (50%) of Area Median Income, adjusted for Assumed Household Size. (c) In calculating the allowable Rent for the Units, Assumed Household Size shall be the federally-mandated household size assumptions as set forth in federal statutes or regulations for programs also providing financial assistance to the Development ("Assumed Household Size"). (d) The Rent may only be increased one time per year (unless otherwise approved in writing by the City) and the Rent level following an increase, or upon a new occupancy, shall not exceed the Rent level set forth in subsection a above, as applicable. Households occupying Units shall be given at least thirty (30) days written notice prior to any increase in the Rent. (e) It is anticipated that the Development will receive Project-Based Section 8 or other rental subsidy payments (collectively referred to as the "Rental Subsidies") throughout the Term. If, during the Term, any change in federal law occurs or any action (or inaction) by Congress or any federal or State agency, which results in a reduction, termination or nonrenewal of the Rental Subsidies through no fault of the Owner ("Federal or State Action"), such that the rental subsidy projected on the approved Financing Plan is no longer available, Dublin Vet RegAgmt Final Regulatory Agreement I June 2015 Page 6 of 23 the City shall allow the Developer to increase the rents on one or more of the Very Low Income Units to Low Income Rents only if and to the extent that the Developer has demonstrated to the satisfaction of the City Manager that such a rent increase is necessary to maintain the financial stability of the Development. The Developer shall provide the City Manager with a projected operating budget for the Development showing the impact of the loss or reduction of the rental subsidy as well as the last two full years of audited financial statements for the Development showing actual costs and expenses of operating the Development at the time Developer requests an increase in the rents. The City Manager shall have authority to approve an increase in the rents on a sufficient number of Very Low Income Units to a rent not exceeding the Low Income Rent in order to ensure that the Development generates sufficient income to cover its operating costs and debt service as shown on the submitted operating budget, provided, however, any such rent increase shall only be allowed pursuant to a transition plan mutually agreed upon by the City and Developer consistent with California Tax Credit Allocation Committee ("TCAC") regulations and only to the extent not otherwise prohibited under the TCAC Regulatory Agreement or any other regulatory agreement recorded on the Development. Developer shall make all commercially reasonable efforts to obtain alternative sources of rental subsidies and shall provide the City with annual progress reports on efforts to obtain alternative sources of rental subsidies that would allow the rents on the Very Low Income Units to be reduced to the Very Low Income Rents. Upon receipt of any alternative rental subsidies, the Developer shall reduce the rents on the units subject to the rent increase to the Very Low Income Rents to the greatest extent possible. (f) Notwithstanding anything to the contrary contained in this Agreement, if the other lenders, tax credit investor, or regulatory agencies require stricter household income eligibility or affordability requirements than those imposed hereby, the requirements of such other lenders, tax credit investor, or regulatory agencies shall prevail. In meeting all such income and affordability requirements, the Owner may count each unit at a specific income eligibility level as meeting the same specific income eligibility level requirement in each of the lender, tax credit, or regulatory agency regulatory agreements. (g) 2.4 Increase in Tenant Income. 2.4.1 Increase Above Initial Qualifying Income. If upon recertification of tenant incomes, Owner determines that the household income of a tenant has increased and exceeds the income level for a Very Low Income Household, Low Income Household, or other applicable the applicable income category in which the tenant initially qualified under a regulatory agreement required by other Development financing, then upon expiration of the tenant's lease: (i) such tenant's unit shall continue to be considered as a unit in the initial applicable income category, (ii) upon ninety (90) days' written notice to the Tenant, such tenant's rent may be increased to an Affordable Rent for the income category for which the tenant qualifies, and (iii) Owner shall rent the next available residential unit at an Affordable Rent to a household that qualifies in the income category in which the tenant initially qualified in order to achieve the affordability requirements of this Agreement. 2.4.2 Non-Qualifying Household. If, upon recertification of tenant incomes, Owner determines that a tenant's household income has increased to exceed 80% of the Area Median Income, such tenant shall be permitted to continue to occupy the unit and upon expiration of the tenant's lease: (i) upon 90 days' written notice, such tenant's rent may be increased to the lesser of one-twelfth of thirty percent (30%) of the household's actual income or the fair market rent, (ii) the unit shall continue to be classified as satisfying the income Dublin Vet RegAgmt Final Regulatory Agreement I June 2015 Page 7 of 23 category for which the tenant originally qualified, and (iii) when the tenant vacates the unit, the unit shall be rented at an Affordable Rent to an Eligible Household that qualifies in the income category for which the former tenant initially qualified in order to achieve the affordability requirements of this Agreement. In the event of inconsistency between the provisions of Sections 2.4.1 or 2.4.2 and the rules applicable to the Project in connection with low-income housing tax credits, tax-exempt bond financing, or financing or rent subsidies provided to the Project by a federal, State or other public agency, the rules applicable pursuant to such financing or subsidy source shall prevail. 2.5 Veterans Units. Owner and the City intend for the Development to provide affordable rental housing for Very Low and Low Income households primarily for Very Low and Low income Veterans of the United States Armed Forces and their families. Owner shall use its best efforts to apply for the resources and assistance to provide eligible Veterans and their families with affordable housing in and services through the Development. Such resources and assistance include, but are not limited to, applying for rental subsidies and financing specifically for or targeting Veterans, affirmative marketing which targets Veterans and their families, contracting with service providers that provide services specifically for or targeted to the needs of Veterans and their families, and working with the Veterans Administration and other veterans advocacy groups and organizations in providing such assistance, marketing, and services. Applications will be ranked in lottery and preference order. Preferences determine the ranking by which applicants are selected but will not affect an applicant's eligibility. Preference order will be determined based on a point preference system established by the City for this Development with priority given to Veterans (the "Points Preference System"). The City shall provide its point system and preference order to the Owner for incorporation by reference and attachment as an exhibit to the Management and Marketing Plan. The City's point system and preference order referenced in and attached to the Management and Marketing Plan will supersede the points system in section 8.68.050 of the Dublin Municipal Code, and has been approved as an alternate means of compliance by the City Council pursuant to Dublin Municipal Code section 8.86.040(E). The point system and preference order shall not apply to applicants with VASH Vouchers, and shall be subject to the program requirements of Project-Based Section 8 or other Rental Subsidies. In addition to the other requirements to be set forth in Management and Marketing Plan under Section 6.4 below, the Management and Marketing Plan shall include Owner's marketing, services, and other assistance and programs to fulfill the Owner's and City's intent to operate the Development primarily for Veterans and their families. Owner currently anticipates receiving project-based Veteran Affairs Supporting Housing ("VASH") vouchers from the Veterans Administration for a portion of the Units in the Development, with the understanding that current regulations prohibit VASH vouchers from being committed to a specific development until the development is ready for marketing. Owner shall throughout the term of this Agreement apply for project-based VASH vouchers for the Development as are available and shall rent to homeless or previously homeless Veterans and their families the number of Units supported by project-based VASH Vouchers. Owner shall apply for other rental subsidies, funding, and financing that are targeted to or specifically for Veterans and their families. Nothing in this Section 2.5 shall require Owner to delay the construction, reconstruction, rehabilitation, financing, refinancing of the Development, the initial marketing or remarketing of Units in the Development, or occupancy in order to apply for and/or Dublin Vet RegAgmt Final Regulatory Agreement I June 2015 Page 8 of 23 obtain VASH vouchers or other rental subsidy, funding, or assistance requiring or allowing for the rental of Units in the Development for Veterans and their families. This Section 2.5 is subject to Development financing approved by the City and to fair housing laws. 2.6 Manager's Unit. One (1) dwelling unit in the Development may be used as resident manager's units, and shall be exempt from the occupancy and rent restrictions set forth in this Agreement. 2.7 No Condominium Conversion. Owner shall not convert the Development to condominium or cooperative ownership or sell condominium or cooperative rights to the Development or any part thereof during the term of this Agreement. 2.8 Non-Discrimination; Compliance with Fair Housing Laws. 2.8.1 Fair Housing. Owner shall comply with state and federal fair housing laws in the marketing and rental of the units in the Development. Owner shall accept as tenants, on the same basis as all other prospective tenants, persons who are recipients of federal certificates or vouchers for rent subsidies pursuant to the existing Section 8 program or any successor thereto. 2.8.2 Non-Discrimination. Owner shall not restrict the rental, sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property, or any portion thereof, on the basis of race, color, religion, creed, sex, sexual orientation, disability, marital status, ancestry, or national origin of any person. Owner covenants for itself and all persons claiming under or through it, and this Agreement is made and accepted upon and subject to the condition that there shall be no discrimination against or segregation of any person or group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code in, the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property or part thereof, nor shall Owner or any person claiming under or through Owner establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in, of, or for the Property or part thereof. Owner shall include such provision in all deeds, leases, contracts and other instruments executed by Owner, and shall enforce the same diligently and in good faith. 3. Reporting Requirements. 3.1 Tenant Certification. Owner or Owner's authorized agent shall obtain from each household prior to initial occupancy of each Restricted Unit, and on every anniversary thereafter, a written certificate containing all of the following in such format and with such supporting documentation as City may reasonably require: (a) The identity of each household member; and (b) The total gross household income; and Dublin Vet RegAgmt Final Regulatory Agreement I June 2015 Page 9 of 23 (c) The number and type of calculated preference points, if applicable. Owner shall retain such certificates for not less than five (5) years, and upon City's request, shall provide copies of such certificates to City and make the originals available for City inspection. 3.2 Annual Report; Inspections. By not later than April 30 of each year during the term of this Agreement, Owner shall submit an annual report ("Annual Report") to the City in form satisfactory to City, together with a certification that the Development is in compliance with the requirements of this Agreement. The Annual Report shall, at a minimum, include the following information for each dwelling unit in the Development as of the date of the Annual Report: (i) unit number; (ii) number of bedrooms; (iii) current rent and other charges, specifying the amount chargeable to the Tenant; and (iv) dates of any vacancies during the previous year; (v) number of people residing in the unit ; (vi) total gross household income of residents; (vii) documentation of source of household income; and (viii) the information required by Section 3_1. The Annual Report shall include a site improvement and maintenance plan and shall include a report on the current waitlist, including number of households, unit size desired, typical wait period, and the number and percentage of Veteran households on the waitlist. Owner shall include with the Annual Report, an income recertification for each household, documentation verifying tenant eligibility, and such additional information as City may reasonably request from time to time in order to demonstrate compliance with this Agreement. The Annual Report shall conform to the format requested by City; provided however, during such time that the Development is subject to a regulatory agreement restricting occupancy and/or rents pursuant to requirements imposed in connection with the use of state or federal low-income housing tax credits or tax-exempt bond financing, Owner may satisfy the requirements of this Section by providing City with a copy of compliance reports required in connection with such financing. Owner shall permit representatives of City to enter and inspect the Property, the Development, and records, during reasonable business hours in order to monitor compliance with this Agreement upon forty-eight (48) hours advance notice of such visit to Owner or to Owner's management agent. The Development shall be subject to an annual monitoring fee, as adjusted from time to time pursuant to the City's Master Fee Schedule. 4. Term of Agreement. 4.1 Term of Restrictions. This Agreement shall remain in effect through the 55`" anniversary of the issuance of the final certificate of occupancy or equivalent, or the final inspection for the Development, unless the term is extended by mutual agreement of the Parties. 4.2 Effectiveness Succeeds Conveyance of Property and Repayment of Loan. This Agreement shall remain effective and fully binding for the full term hereof, as such may be extended pursuant to Section 4.1, regardless of(i) any sale, assignment, transfer, or conveyance of the Property or the Development or any part thereof or interest therein, (ii) any payment, prepayment or extinguishment of the Loan or Note, or (iii) any reconveyance of the Deed of Trust. Dublin Vet RegAgmt Final Regulatory Agreement I June 2015 Page 10 of 23 4.3 Reconveyance. Upon the termination of this Agreement, the Parties agree to execute and record appropriate instruments to release and discharge this Agreement; provided, however, the execution and recordation of such instruments shall not be necessary or a prerequisite to the termination of this Agreement upon the expiration of the term as such may be extended pursuant to Section 4.1. 5. Binding Upon Successors; Covenants to Run with the Land. Owner hereby subjects its interest in the Property and the Development to the covenants and restrictions set forth in this Agreement. The City and Owner hereby declare their express intent that the covenants and restrictions set forth herein shall be deemed covenants running with the land and shall be binding upon and inure to the benefit of the heirs, administrators, executors, successors in interest, transferees, and assigns of Owner and City, regardless of any sale, assignment, conveyance or transfer of the Property, the Development or any part thereof or interest therein. Any successor-in-interest to Owner, including without limitation any purchaser, transferee or lessee of the Property or the Development (other than the tenants of the individual dwelling units within the Development) shall be subject to all of the duties and obligations imposed hereby for the full term of this Agreement. Each and every contract, deed, or other instrument affecting or conveying the Property or the Development or any part thereof, shall conclusively be held to have been executed, delivered and accepted subject to the covenants, restrictions, duties and obligations set forth herein, regardless of whether such covenants, restrictions, duties and obligations are set forth in such contract, deed, or other instrument. If any such contract, deed, or other instrument has been executed prior to the date hereof, Owner hereby covenants to obtain and deliver to City an instrument in recordable form signed by the parties to such contract, deed, or other instrument pursuant to which such parties acknowledge and accept this Agreement and agree to be bound hereby. Owner agrees for itself and for its successors that in the event that a court of competent jurisdiction determines that the covenants herein do not run with the land, such covenants shall be enforced as equitable servitudes against the Property and the Development in favor of City. 6. Property Management; Repair and Maintenance; Marketing. 6.1 Management Responsibilities. Owner shall be responsible for all management functions with respect to the Property and the Development, including without limitation the selection of tenants, certification and recertification of household income and eligibility, evictions, collection of rents and deposits, maintenance, landscaping, routine and extraordinary repairs, replacement of capital items, and security. City shall have no responsibility for management or maintenance of the Property or the Development. 6.2 Management Entity. City shall have the right to review and approve the qualifications of the management entity proposed by Owner for the Development. The contracting of management services to a management entity shall not relieve Owner of its primary responsibility for proper performance of management duties. City hereby approves Eden Housing Management, Inc. as the initial management entity for the Development. 6.3 Repair, Maintenance and Security. Throughout the term of this Agreement, Owner shall at its own expense, maintain the Property and the Development in good physical condition, in good repair, and in decent, safe, sanitary, habitable and tenantable living conditions in conformity with all applicable state, federal, and local laws, ordinances, codes, and regulations. Without limiting the foregoing, Owner agrees to maintain the Development and the Property Dublin Vet RegAgmt Final Regulatory Agreement I June 2015 Page 11 of 23 (including without limitation, the residential units, common areas, meeting rooms, landscaping, driveways, parking areas and walkways) in a condition free of all waste, nuisance, debris, unmaintained landscaping, graffiti, disrepair, abandoned vehicles/appliances, and illegal activity, and shall take all reasonable steps to prevent the same from occurring on the Property or at the Development. Owner shall prevent and/or rectify any physical deterioration of the Property and the Development and shall make all repairs, renewals and replacements necessary to keep the Property and the improvements located thereon in good condition and repair. Owner shall provide adequate security services for occupants of the Development. The Management and Marketing Plan shall provide for the installation of a security camera system at initial occupancy. Nothing in the proceeding sentence shall require the continued use of a camera system if the parties agree upon a different or updated security system. 6.3.1 City's Right to Perform Maintenance. In the event that Owner breaches any of the covenants contained in Section 6.3, and such default continues for a period of ten (10) days after written notice from City (with respect to graffiti, debris, and waste material) or thirty (30) days after written notice from City (with respect to landscaping, building improvements and general maintenance), then City, in addition to any other remedy it may have under this Agreement or at law or in equity, shall have the right, but not the obligation, to enter upon the Property and perform all acts and work necessary to protect, maintain, and preserve the improvements and the landscaped areas on the Property. All costs expended by City in connection with the foregoing, shall constitute an indebtedness secured by a deed of trust in favor of the City, which shall be recorded upon the closing of the City Loan (the "Deed of Trust"), and shall be paid by Owner to City upon demand. All such sums remaining unpaid thirty (30) days following delivery of City's invoice therefor shall bear interest at the lesser of ten percent (10%) per annum or the highest rate permitted by applicable law. 6.4 Management and Marketing Plan. Prior to the start of construction of the Development, Owner shall submit for City review and approval, a plan for managing the Property and marketing the Project. (the "Management and Marketing Plan"). The Management and Marketing Plan shall be updated after two (2) years and then again every five (5) years. The City will provide no less than 90 days' notice to Owner before each Management and Marketing Plan is due. Updates and revisions to the Management and Marketing Plan may be subject to prior approval of Owner's investor limited partner or other project lenders before being implemented. The Management and Marketing Plan shall describe the management team and shall address how the Owner and the management entity plan to manage and maintain the Property and the Development. The Management and Marketing Plan shall include the proposed management agreement and the form of rental agreement that Owner proposes to enter into with Development tenants. The Management and Marketing Plan shall address in detail how Owner plans to market the Restricted Units to prospective Eligible Households and targeted outreach to Veterans in accordance with the City's Inclusionary Zoning Ordinance Regulations, subject to any City waivers for this Development, fair housing laws and this Agreement, Owner's tenant selection criteria, and how Owner plans to certify the eligibility of Eligible Households. The Management and Marketing Plan shall also address Owner's plans concerning Veterans set forth in Section 2.5 of this Agreement. Owner shall abide by the terms of the Management and Marketing Plan in marketing, managing, and maintaining the Property and the Development, and throughout the term of this Agreement, shall submit proposed modifications to City for review and approval. Dublin Vet RegAgmt Final Regulatory Agreement I June 2015 Page 12 of 23 The Management and Marketing Plan shall also include the following: (a) Establishment of a "crime free" environment by participation in the City of Dublin's Crime Free Multi Housing Program, to the extent such participation is consistent or not in conflict with applicable policy and procedures established by the United States Department of Veterans Affairs. (b) Description of targeted outreach to Veterans. (c) Plan to provide on-site programs and services for Veterans and low income residents. 6.5 Approval of Amendments. If City has not responded to any submission of the Management and Marketing Plan, the proposed management entity, or a proposed amendment or change to any of the foregoing within forty-five (45) days following City's receipt of such plan, proposal or amendment, the plan, proposal or amendment shall be deemed approved by City. 6.6 Fees, Taxes, and Other Levies. Owner shall be responsible for payment of all fees, assessments, taxes, charges, liens and levies applicable to the Property or the Development, including without limitation possessory interest taxes, if applicable, imposed by any public entity, and shall pay such charges prior to delinquency. However, Owner shall not be required to pay any such charge so long as (a) Owner is contesting such charge in good faith and by appropriate proceedings, (b) Owner maintains reserves adequate to pay any contested liabilities, and (c) on final determination of the proceeding or contest, Owner immediately pays or discharges any decision or judgment rendered against it, together with all costs, charges and interest. The Parties acknowledge that the Owner will apply for exemption from property tax under Revenue and Taxation Code Section 214. 6.7 Insurance Coverage. Throughout the term of this Agreement Owner shall at Owner's expense, maintain in full force and effect insurance coverage as specified in the Deed of Trust and shall comply with all insurance requirements set forth in the Deed of Trust. 6.8 Property Damage or Destruction. If any part of the Development is damaged or destroyed, Owner shall repair or restore the same, consistent with the occupancy and rent restriction requirements set forth in this Agreement. Such work shall be commenced as soon as reasonably practicable after the damage or loss occurs and shall be completed within one year thereafter or as soon as reasonably practicable, provided that insurance proceeds are available to be applied to such repairs or restoration within such period and the repair or restoration is financially feasible. During such time that lenders or low-income housing tax credit investors providing financing for the Development impose requirements that differ from the requirements of this Section the requirements of such lenders and investors shall prevail. 7. Recordation; Subordination. This Agreement shall be recorded in the Official Records of Alameda County. Owner hereby represents, warrants and covenants that with the exception of easements of record, absent the written consent of City, this Agreement shall not be subordinated in priority to any lien (other than those pertaining to taxes or assessments), encumbrance, or other interest in the Property or the Development. If at the time this Agreement is recorded, any interest, lien, or encumbrance has been recorded against the Development in position superior to this Agreement, upon the request of City, Owner hereby covenants and agrees to promptly undertake all action necessary to clear such matter from title Dublin Vet RegAgmt Final Regulatory Agreement I June 2015 Page 13 of 23 or to subordinate such interest to this Agreement consistent with the intent of and in accordance with this Section 7, and to provide such evidence thereof as City may reasonably request. Notwithstanding the foregoing, the City agrees that City will not withhold consent to reasonable requests for subordination of this Agreement to deeds of trust provided for the benefit of lenders identified in the Financing Plan (as defined in the Loan Agreement) as it may be updated with City approval, provided that the instruments effecting such subordination include reasonable protections to the City in the event of default, including without limitation, extended notice and cure rights. 8. Transfer and Encumbrance. 8.1 Restrictions on Transfer and Encumbrance. During the term of this Agreement, except as permitted pursuant to the Loan Agreement or this Agreement, Owner shall not directly or indirectly, voluntarily, involuntarily or by operation of law make or attempt any total or partial sale, transfer, conveyance, assignment or lease (collectively, "Transfer") of the whole or any part of the Property, the Development, or the improvements located on the Property, without the prior written consent of the City, which approval shall not be unreasonably withheld. In addition, prior to the expiration of the term of this Agreement, except as expressly permitted by this Agreement or the Loan Agreement, Owner shall not undergo any significant change of ownership without the prior written approval of City. For purposes of this Agreement, a "significant change of ownership" shall mean a transfer of the beneficial interest of more than twenty-five percent (25%) in aggregate of the present ownership and /or control of Owner, taking all transfers into account on a cumulative basis; provided however, neither the admission of an investor limited partner, nor the transfer by the investor limited partner to subsequent limited partners shall be restricted by this provision. 8.2 Permitted Transfers. Notwithstanding any contrary provision hereof, the prohibitions on Transfer set forth herein shall not be deemed to prevent: (i) the granting of easements or permits to facilitate development of the Property; (ii) the dedication of any property required pursuant to the Loan Agreement; (iii) the lease of individual dwelling units to tenants for occupancy as their principal residence in accordance with this Agreement or the lease of commercial space to commercial tenants, if applicable; (iv) assignments creating security interests for the purpose of financing the acquisition, construction, or permanent financing of the Development or the Property in accordance with the Loan Agreement, or Transfers directly resulting from the foreclosure of, or granting of a deed in lieu of foreclosure of, such a security interest; (v) a Transfer to a limited partnership in which the managing general partner is a tax-exempt entity under the direct control of or under common control with Eden; (vi) the admission of limited partners and any transfer of limited partnership interests in accordance with Owner's agreement of limited partnership (the "Partnership Agreement"), provided that the Partnership Agreement and/or the instrument of Transfer provides for development and operation of the Property and Development in a manner consistent with the Loan Agreement and this Agreement; (vii) the removal of the general partner by the investor limited partner for a default under the Partnership Agreement, provided the replacement general partner is reasonably satisfactory to City; or (viii) the transfer of the General Partner's interest to a nonprofit entity that is or its member/manager is tax-exempt under Section 501(c)(3) of the Internal Revenue Code of 1986 as amended, provided such replacement general partner is reasonably satisfactory to City. In addition, City shall not withhold its consent to the sale, transfer or other disposition of the Development, in whole or in part, provided that (a) the Development is and shall continue to Dublin Vet RegAgmt Final Regulatory Agreement I June 2015 Page 14 of 23 be operated in compliance with this Agreement; (b) the transferee expressly assumes all obligations of Owner imposed by this Agreement; (c) the transferee executes all documents reasonably requested by the City with respect to the assumption of the Owner's obligations under this Agreement, and upon City's request, delivers to the City an opinion of its counsel to the effect that such document and this Agreement are valid, binding and enforceable obligations of such transferee; and (d) either (A) the transferee has at least three (3) years' experience in the ownership, operation and management of low-income multifamily rental housing projects of similar size to that of the Development, without any record of material violations of nondiscrimination provisions or other state or federal laws or regulations applicable to such projects, or (B) the transferee agrees to retain a property management firm with the experience and record described in subclause (A). Article VI of the Loan Agreement shall govern procedures applicable to requests for, and City's approval of, proposed Transfers. Unless waived by City, Owner shall reimburse City for all City costs, including but not limited to reasonable attorneys' fees, incurred in reviewing instruments and other legal documents proposed to effect a Transfer under this Agreement and in reviewing the qualifications and financial resources of a proposed successor, assignee, or transferee within ten (10) days following City's delivery of an invoice detailing such costs. 8.3 Encumbrances. Owner agrees to use best efforts to ensure that any subordination agreement recorded against the Property, the Development or part thereof for the benefit of a lender other than City ("Third-Party Lender") shall contain each of the following provisions: (i) Third-Party Lender shall use its best efforts to provide to City a copy of any notice of default issued to Owner concurrently with provision of such notice to Owner; (ii) City shall have the reasonable right, but not the obligation, to cure any default by Owner within the same period of time provided to Owner for such cure extended by an additional sixty (60) days; (iii) provided that City has cured any default under Third-Party Lender's deed of trust and other loan documents, City shall have the right to foreclose City's Deed of Trust and take title to the Development without acceleration of Third-Party Lender's debt; and (iv) City shall have the right to transfer the Development without acceleration of Third-Party Lender's debt to a nonprofit corporation or other entity which shall own and operate the Development as an affordable rental housing project, subject to the prior written consent of the Third-Party Lender. Owner agrees to provide to City a copy of any notice of default Owner receives from any Third-Party Lender within three (3) business days following Owner's receipt thereof. 8.4 Mortgagee Protection. No violation of any provision contained herein shall defeat or render invalid the lien of any mortgage or deed of trust made in good faith and for value upon all or any portion of the Development or the Property, and the purchaser at any trustee's sale or foreclosure sale shall not be liable for any violation of any provision hereof occurring prior to the acquisition of title by such purchaser. Promptly upon determining that a violation of this Agreement has occurred, City shall give written notice to the holders of record of any mortgages or deeds of trust encumbering the Development or the Property that such violation has occurred. 9. Default and Remedies. 9.1 Events of Default. The occurrence of any one or more of the following events shall constitute an event of default hereunder ("Event of Default"): (a) The occurrence of a Transfer in violation of Section 8 hereof; Dublin Vet RegAgmt Final Regulatory Agreement I June 2015 Page 15 of 23 (b) Owner's failure to maintain insurance on the Property and the Development as required hereunder, and the failure of Owner to cure such default within ten (10) days; (c) Subject to Owner's right to contest the following charges, Owner's failure to pay taxes or assessments due on the Property or the Development or failure to pay any other charge that may result in a lien on the Property or the Development, and Owner's failure to cure such default within thirty (30) days of delinquency; (d) A default has been declared under any loan secured by a mortgage, deed of trust or other security instrument recorded against the Property and remains uncured beyond any applicable cure period such that the holder of such security instrument has the right to accelerate repayment of such loan; (e) A default arises under the Loan Agreement, the Note, the Deed of Trust or any other City Document (as defined in the Loan Agreement) and remains uncured beyond the expiration of any applicable cure period; (f) Owner's default in the performance of any term, provision or covenant under this Agreement (other than an obligation enumerated in this Subsection 9.1), and unless such provision specifies a shorter cure period for such default, the continuation of such default for ten (10) days in the event of a monetary default or thirty (30) days in the event of a non- monetary default following the date upon which City shall have given written notice of the default to Owner, or if the nature of any such non-monetary default is such that it cannot be cured within thirty (30) days, Owner's failure to commence to cure the default within thirty (30) days and thereafter prosecute the curing of such default with due diligence and in good faith, but in no event longer than ninety (90) days from receipt of the notice of default or such longer period of time as City may allow. The limited partners of Owner shall have the right to cure any default of Owner hereunder upon the same terms and conditions afforded to Owner. Provided that City has been given written notice of the address for delivery of notices to the limited partners, City shall provide any notice of default hereunder to the limited partners concurrently with the provision of such notice to Owner, and as to the limited partners, the cure periods specified herein shall commence upon the date of delivery of such notice in accordance with Subsection 11.3. 9.2 Remedies. Upon the occurrence of an Event of Default and its continuation beyond any applicable cure period, City may proceed with any of the following remedies: A. Bring an action for equitable relief seeking the specific performance of the terms and conditions of this Agreement, and/or enjoining, abating, or preventing any violation of such terms and conditions, and/or seeking declaratory relief; B. Accelerate and declare the balance of the Note and interest accrued thereon immediately due and payable and proceed with foreclosure under the Deed of Trust; C. For violations of obligations with respect to rents for Restricted Units, impose as liquidated damages a charge in an amount equal to the actual amount collected in excess of the Affordable Rent; Dublin Vet RegAgmt Final Regulatory Agreement I June 2015 Page 16 of 23 D. Pursue any other remedy allowed at law or in equity. Each of the remedies provided herein is cumulative and not exclusive. The City may exercise from time to time any rights and remedies available to it under applicable law or in equity, in addition to, and not in lieu of, any rights and remedies expressly provided in this Agreement. 10. Indemnity. Notwithstanding any other provision in the Loan Agreement or other documents executed in connection with the City Loan, Owner shall indemnify, defend (with counsel approved by City) and hold City and their respective elected and appointed officers, officials, employees, agents, and representatives (collectively, the "Indemnitees") harmless from and against all liability, loss, cost, expense (including without limitation attorneys' fees and costs of litigation), claim, demand, action, suit,judicial or administrative proceeding, penalty, deficiency, fine, order, and damage (all of the foregoing collectively "Claims") arising directly or indirectly, in whole or in part, as a result of or in connection with Owner's construction, management, or operation of the Property and the Development or any failure to perform any obligation as and when required by this Agreement. Owner's indemnification obligations under this Section 10 shall not extend to Claims resulting in whole or in part from Owner's adoption and/or utilization of the Points Preference System (provided however if any such claim is based in part on Owner's adoption and/or utilization of the Points Preference System, the exclusion to the Owner's indemnification obligation shall be limited to only the portion(s) of such claim based on Owner's adoption and/or utilization of the Points Preference System) or resulting solely from the gross negligence or willful misconduct of Indemnitees. It is further agreed that City does not and shall not waive any rights against Owner that it may have by reason of this indemnity and hold harmless agreement because of the acceptance by City, or the deposit with City by Owner, of any of the insurance policies described in this Agreement or the Loan Agreement. City shall indemnify, defend, and hold Owner and its affiliates, officers, officials, employees, agents or representatives harmless from and against Claims by applicants for the Project housing or other potential aggrieved parties resulting in whole or in part from Owner's adoption and/or utilization of the Points Preference System to rank applicants. If any such claim is based in part on Owner's adoption and/or utilization of the Points Preference System, City's duty to indemnify, defend and hold harmless shall only extend to the portion(s) of such Claim based on Owner's adoption and/or utilization of the Points Preference System. The provisions of this Section 10 shall survive the expiration or earlier termination of this Agreement. 11. Miscellaneous. 11.1 Amendments. This Agreement may be amended or modified only by a written instrument signed by both Parties. 11.2 No Waiver. Any waiver by City of any term or provision of this Agreement must be in writing. No waiver shall be implied from any delay or failure by City to take action on any breach or default hereunder or to pursue any remedy allowed under this Agreement or applicable law. No failure or delay by City at any time to require strict performance by Owner of any provision of this Agreement or to exercise any election contained herein or any right, power or remedy hereunder shall be construed as a waiver of any other provision or any succeeding Dublin Vet RegAgmt Final Regulatory Agreement I June 2015 Page 17 of 23 breach of the same or any other provision hereof or a relinquishment for the future of such election. 11.3 Notices. Except as otherwise specified herein, all notices to be sent pursuant to this Agreement shall be made in writing, and sent to the Parties at their respective addresses specified below or to such other address as a Party may designate by written notice delivered to the other parties in accordance with this Section. All such notices shall be sent by: (i) personal delivery, in which case notice is effective upon delivery; (ii) certified or registered mail, return receipt requested, in which case notice shall be deemed delivered upon receipt if delivery is confirmed by a return receipt; (iii) nationally recognized overnight courier, with charges prepaid or charged to the sender's account, in which case notice is effective on delivery if delivery is confirmed by the delivery service; (iv) facsimile transmission, in which case notice shall be deemed delivered upon transmittal, provided that (a) a duplicate copy of the notice is promptly delivered by first-class or certified mail or by overnight delivery, or (b) a transmission report is generated reflecting the accurate transmission thereof. Any notice given by facsimile shall be considered to have been received on the next business day if it is received after 5:00 p.m. recipient's time or on a nonbusiness day. City: City of Dublin 100 Civic Plaza Dublin, CA 94568 Attention: City Manager Facsimile: (925) 833-6651 Owner: Corona Crescent, Inc. 22645 Grand Street Hayward, CA 94541-5031 Attention: President Facsimile: (510) 582-6523 With a copy to Owner's investor limited partner: [to be provided] 11.4 Further Assurances. The Parties shall execute, acknowledge and deliver to the other such other documents and instruments, and take such other actions, as either shall reasonably request as may be necessary to carry out the intent of this Agreement. 11.5 Parties Not Co-Venturers. Nothing in this Agreement is intended to or shall establish the Parties as partners, co-venturers, or principal and agent with one another. 11.6 Action by the City. Except as may be otherwise specifically provided herein, whenever any approval, notice, direction, consent or request by the City is required or permitted Dublin Vet RegAgmt Final Regulatory Agreement I June 2015 Page 18 of 23 under this Agreement, such action shall be in writing, and such action may be given, made or taken by the City's City Manager or by any person who shall have been designated by the City Manager, without further approval by the City Council. 11.7 Non-Liability of City Officials, Officers, Directors, Employees and Agents. No member, official, employee or agent of the City shall be personally liable to Owner or any successor in interest, in the event of any default or breach by the City, or for any amount of money which may become due to Owner or its successor or for any obligation of City under this Agreement. No director, officer, employee or agent of the Owner shall be personally liable to the City or any successor in interest, in the event of any default or breach by the Owner, or for any amount of money which may become due to the City or its successor or for any obligation of the Owner under this Agreement. 11.8 Headings; Construction. The headings of the sections and paragraphs of this Agreement are for convenience only and shall not be used to interpret this Agreement. The language of this Agreement shall be construed as a whole according to its fair meaning and not strictly for or against any Party. 11.9 Time is of the Essence. Time is of the essence in the performance of this Agreement. 11.10 Governing Law. This Agreement shall be construed in accordance with the laws of the State of California without regard to principles of conflicts of law. 11.11 Attorneys' Fees and Costs. If any legal or administrative action is brought to interpret or enforce the terms of this Agreement, the prevailing party shall be entitled to recover all reasonable attorneys' fees and costs incurred in such action. 11.12 Severability. If any provision of this Agreement is held invalid, illegal, or unenforceable by a court of competent jurisdiction, the validity, legality, and enforceability of the remaining provisions shall not be affected or impaired thereby. 11.13 Entire Agreement. This Agreement, together with the Loan Agreement, the Note and the Deed of Trust contains the entire agreement of Parties with respect to the subject matter hereof, and supersedes all prior oral or written agreements between the Parties with respect thereto. 11.14 Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be an original and all of which together shall constitute one agreement. SIGNATURES ON FOLLOWING PAGES. Dublin Vet RegAgmt Final Regulatory Agreement I June 2015 Page 19 of 23 IN WITNESS WHEREOF, the Parties have executed this Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants as of the date first written above. CITY City of Dublin, a municipal corporation By: Christopher Foss, City Manager Attest: City Clerk Approved as to form: City Attorney DEVELOPER Corona Crescent, Inc. By: Linda Mandolini, SIGNATURES MUST BE NOTARIZED. 2445835.11 20 Final Regulatory Agreement I June 2015 Page 20 of 23 STATE OF CALIFORNIA ) COUNTY OF ALAMEDA ) On , 20_, before me, (here insert name and title of the officer), personally appeared 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 (Seal) STATE OF CALIFORNIA ) COUNTY OF ALAMEDA ) On , 20_7 before me, (here insert name and title of the officer), personally appeared 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 (Seal) 2445835.11 21 Final Regulatory Agreement I June 2015 Page 21 of 23 Exhibit A PROPERTY (Attach legal description.) 2445835.11 22 Final Regulatory Agreement I June 2015 Page 22 of 23 Exhibit A LEGAL DESCRIPTION OF PROPERTY Real property in the City of Dublin, County of Alameda, State of California, described as follows: PARCEL D, AS SHOWN ON PARCEL MAP 2621, FILED DECEMBER 20, 1978 IN BOOK 107, PAGE 50 OF MAPS, ALAMEDA COUNTY RECORDS. EXCEPTING THEREFROM, THAT PORTION CONVEYED IN THE DEED TO THE COUNTY OF ALAMEDA, A POLITICAL SUBDIVISION OF THE STATE OF CALIFORNIA, RECORDED FEBRUARY 14, 2004 AS INSTRUMENT NO. 2002-073439 OF OFFICIAL RECORDS. APN: 941-1500-032-02 Final Regulatory Agreement I June 2015 1 Legal Description Page 1 of 1 Exhibit A RESOLUTION NO. ** -15 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DUBLIN ********* APPROVING A LOAN AGREEMENT BETWEEN THE CITY OF DUBLIN AND CORONA CRESCENT, INC., RELATING TO THE DEVELOPMENT OF AN AFFORDABLE HOUSING PROJECT WITH VETERANS PREFERENCE WHEREAS, Corona Crescent, Inc., a California nonprofit public benefit corporation ("Developer") and the City of Dublin (the "City") desire to enter into a Loan Agreement ("Agreement") on property to be developed on a site within the Downtown Dublin Specific Plan area, located at 6707 Golden Gate Drive, Dublin, California, (APN 941-1500-030-02) as more particularly described in Exhibit A in the Agreement attached to this Resolution ("Property"); and WHEREAS, Developer is an affiliate of Eden Housing Inc., and is controlled by the same board of directors; and WHEREAS, Developer has acquired the Property from BWD Dublin, LLC, an affiliate of Bay West Development Partners IV LLC, a California limited liability company (the "Market Rate Developer") who intends to develop a mixed-use project on Market Rate Developer's adjacent parcel (APN 941-1500-015-09) located at 7544 Dublin Boulevard in Dublin. Pursuant to that certain "City of Dublin Community Benefit Agreement with Bay West Development Partners IV LLC," dated October 7, 2014, the Market Rate Developer transferred the Property to Developer for a nominal sum; and WHEREAS, Developer intends to construct a residential project on the Property consisting of approximately 66 affordable rental housing units primarily for veterans and their families and other very low and low income families, and related improvements ("Development"); and WHEREAS, Developer has requested, and the City has agreed to provide a loan to Developer in an amount not to exceed Six Million Four Hundred Thousand Dollars ($6,400,000) (the "Total Approved Loan Amount") to finance a portion of the predevelopment, development, and construction costs of the project. One Million Four Hundred Thousand Dollars ($1,400,000) of the Total Approved Loan Amount shall be a predevelopment loan (the "Predevelopment Loan"), which shall be made, disbursed, used and repaid in accordance with the Predevelopment Loan Agreement; and WHEREAS, the Total Approved Loan Amount and the Predevelopment Loan amount were approved by the City Council on November 18, 20147 by Resolution No. 199-14; and WHEREAS, an initial Predevelopment Loan Agreement was approved by the City Council on January 20, 20157 by Resolution No. 05-15 and has since been revised and approved by the City Council; and ATTACHMENT 2 WHEREAS, funds not to exceed the Total Approved Loan Amount shall be made, disbursed, used and repaid in accordance with this Loan Agreement and related loan documents including a Construction/Permanent Note, Assignment Agreement, and Modification to Deed of Trust. The Promissory Note, Assignment Agreement and Deed of Trust are attached as Exhibits to this Agreement; and WHEREAS, the Loan Agreement provides for a City loan, including funds disbursed under the Predevelopment Loan, not to exceed the Total Approved Loan Amount at a simple interest rate of up to 3% for a period of up to 55 years. Repayment is based on residual receipts from the operation of the Development. The Development must be operated in accordance with the Regulatory Agreement and Declaration of Restrictive Covenants; and NOW, THEREFORE, BE IT RESOLVED THAT the City Council of the City of Dublin approves and authorizes the City Manager to execute the Loan Agreement and related Loan Documents in substantially the form attached hereto as Exhibit A, upon the satisfaction of the conditions set forth in the Agreement. PASSED, APPROVED AND ADOPTED this 16th day of June, 2015 by the following vote: AYES: NOES: ABSENT: ABSTAIN: Mayor ATTEST: City Clerk 2448692.2 ATTACHMENT 2 LOAN AGREEMENT by and between THE CITY OF DUBLIN and DUBLIN FAMILY, L.P., A CALIFORNIA LIMITED PARTNERSHIP (Dublin Veterans Family Housing) [to he dated as of the first day of the month in which the construction loan closing will occur] Final Loan Agreement I June 2015 Pagel of 34 Exhibits A Legal Description of Property B Form of Promissory Note (Construction/Permanent) C Form of Assignment Agreement(CCI to Developer) D Form Modification to Deed of Trust E Financing Plan Final Loan Agreement I June 2015 Page 2 of 34 THIS LOAN AGREEMENT (this "Agreement")is entered into effective as of[month of construction loan closing] 1, 2015 ("Effective Date")by and between the City of Dublin, a municipal corporation ("City") and Dublin Family, L.P., a California limited partnership ("Developer"). City and Developer are hereinafter collectively referred to as the "Parties." RECITALS A. Developer owns or will own that certain real property located at 6707 Golden Gate Drive, Dublin, California, (APN 941-1500-032-02) as more particularly described in Exhibit A attached to this Agreement(the "Property"). B. Developer acquired the Property from an affiliate Corona Crescent, Inc., a California nonprofit public benefit corporation ("CCI")which acquired the Property from BWD Dublin, LLC, an affiliate of Bay West Development Partners IV LLC, a California limited liability company (the "Market Rate Developer")who intends to develop a mixed-use project on Market Rate Developer's adjacent parcel (APN 941-1500-015-09)located at 7544 Dublin Boulevard in Dublin. Pursuant to that certain "City of Dublin Community Benefit Agreement with Bay West Development Partners IV LLC" dated October 7, 2014 (the "Community Benefit Agreement"), the Market Rate Developer transferred the Property to CCI for a nominal sum. CCI and the City entered into an Option Agreement dated February 9, 2015 in which CCI granted to the City the option to purchase the Property as evidenced by that Memorandum of Option recorded in the Official Records of Alameda County on February 13, 2015 as Instrument No. 2015-043712 (the "City Option Agreement"). C. The City made a predevelopment loan to CCI in the principal amount of $1,400,000 evidenced by that Predevelopment Loan Agreement dated as of , 2015 between the City and CCI("Predevelopment Loan Agreement"), that Promissory Note in the amount of $1,400,000 dated as of , 2015 from CCI in favor of the City ("Predevelopment Note"), secured by that Deed of Trust recorded , 2015 as Instrument No. 2015- ("Existing Deed of Trust") and the Assignment of Agreements, Plans and Specifications dated as of , 2015 between the City and CCI("Assignment Agreement"). D. Developer intends to construct, own and operate on the Property a 66-unit affordable multifamily rental housing project consisting of 65 affordable rental housing units primarily for veterans and their families and other Very Low and Low income families, one resident manager's unit, and other related improvements (the "Project"). The residential units in the Project will be rented at affordable rents to low- and very low- income households as more particularly described in an Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants ("Regulatory Agreement")between the City and CCI recorded against the Property on , 2015 as Instrument No. 2015- E. Pursuant to that certain Assignment and Assumption of City Loan Documents dated as of , 2015, executed by CCI and Developer and acknowledged by City (the "Assignment and Assumption Agreement"), CCI has assigned to Developer, and Developer has assumed, all rights and obligations of CCI under the Predevelopment Loan Agreement, the Predevelopment Promissory Note executed by CCI for the benefit of City (the "Predevelopment Note"), the Existing Deed of Trust, the Assignment Agreement, the City Option Agreement, and the Regulatory Agreement. Final Loan Agreement I June 2015 Page 3 of 34 F. This Agreement is intended to amend and restate the Predevelopment Loan Agreement. The Promissory Note to be executed by Developer in connection with this Agreement(the "Note")is intended to amend and restate the Predevelopment Note. In connection with this Agreement, Developer, Eden and City will execute and record a modification to the Existing Deed of Trust("Modification to Deed of Trust")which will provide that repayment of the Note is secured by the Existing Deed of Trust as amended. G. The City has determined that development of the Project is in the interests of the health, safety and welfare of the residents of the City, and that the City financing is necessary to make the Project affordable to Low- and Very Low-Income households. The City has further determined that provision of financing by City to Developer for the purposes described herein is a qualified use of the City Affordable Housing Fund which shall be used to fund the Loan. H. A material inducement to the City to enter into this Agreement is the agreement by Developer to develop the Project within the time periods specified herein and in accordance with the provisions hereof, and the City would be unwilling to enter into this Agreement in the absence of an enforceable commitment by Developer to complete the Project in accordance with such provisions and within such time periods, subject to the terms and conditions set forth herein. L In connection with this Agreement: Developer shall execute such documentation as City shall reasonably require in connection with the Loan, including without limitation the Note, the Modification to Deed of Trust, and the Regulatory Agreement. This Agreement, the Note, the Assignment and Assumption Agreement, the Assignment Agreement, the Existing Deed of Trust, the Modification to Deed of Trust, the City Option Agreement and the Regulatory Agreement are collectively hereinafter referred to as the "City Documents." NOW, THEREFORE, in consideration of the mutual covenants contained herein and good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows. ARTICLE I INCORPORATION OF RECITALS 1.1 Incorporation of Recitals. The Parties acknowledge the truth of the foregoing Recitals which are by this reference incorporated into this Agreement. ARTICLE II REPRESENTATIONS; EFFECTIVE DATE AND TERM 2.1 Developer's Representations. Developer represents and warrants to City as follows, and Developer covenants that until the expiration or earlier termination of this Agreement, upon learning of any fact or condition which would cause any of the warranties and representations in this Section 2.1 not to be true, Developer shall immediately give written notice Final Loan Agreement I June 2015 Page 4 of 34 of such fact or condition to City. Developer acknowledges that City shall rely upon Developer's representations made herein notwithstanding any investigation made by or on behalf of City. (i) Authority. Developer is a limited partnership duly organized and in good standing under the laws of the State of California. Developer's general partner is a limited liability company, duly organized and in good standing under the laws of the State of California, whose sole member and manager is a nonprofit public benefit corporation, duly organized and in good standing under the laws of the State of California and tax-exempt under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended. Developer has the full right,power and authority to undertake all obligations of Developer as provided herein, and the execution, performance and delivery of this Agreement by Developer has been duly authorized by all requisite actions. The persons executing this Agreement on behalf of Developer have been duly authorized to do so. This Agreement and the other City Documents constitute valid and binding obligations of Developer, enforceable in accordance with their respective terms. (ii) No Conflict. Developer's execution, delivery, and performance of its obligations under this Agreement will not constitute a default or a breach under any contract, agreement or order to which Developer is a party or by which it is bound. (iii) No Litigation or Other Proceeding. No litigation or other proceeding (whether administrative or otherwise)is outstanding or has been threatened which would prevent, hinder or delay the ability of Developer to perform its obligations under this Agreement. (iv) No Developer Bankrupta. Developer is not the subject of a bankruptcy or insolvency proceeding. 2.2 Effective Date. The obligations of Developer and City hereunder shall be effective as of the Effective Date. ARTICLE III DEVELOPMENT OF THE PROJECT 3.1 The Property. Developer represents and warrants that as of the Effective Date: (i) Developer has acquired or has the contractual right to acquire the Property, and (ii) the Property is subject to no covenant, condition, restriction or agreement that would prevent the development of the Project in accordance with this Agreement. If at any time the foregoing statements become untrue, the City shall have the right to terminate this Agreement upon written notice to Developer. 3.2 Scope of Development. Developer shall develop the Project in accordance with the terms and conditions of this Agreement and in compliance with the terms and conditions of all approvals, entitlements and permits that the City or any other governmental body or agency with jurisdiction over the Project or the Property has granted or issued as of the date hereof or may hereafter grant or issue in connection with development of the Project, including without limitation, all mitigation measures imposed in connection with environmental review of the Project and all conditions of approval imposed in connection with any entitlements, approvals or Final Loan Agreement I June 2015 Page 5 of 34 permits (all of the foregoing approvals, entitlements,permits, mitigation measures and conditions of approval are hereafter collectively referred to as the"Conditions of Approval"). The Project will consist of the design, development and construction on the Property of a sixty-six (66)unit multi-family residential development restricted to Affordable Rent to primarily serve veterans as set forth in the Regulatory Agreement and other Project documents that will include one market rate resident manager's unit, common areas, on-site parking, laundry facilities, and landscaping (all of the foregoing are collectively hereinafter referred to as the "Improvements"). 3.3 Affordable Housing. Developer covenants and agrees for itself, its successors and assigns that the Property will be owned and operating in accordance with this Agreement and the Regulatory Agreement recorded against the Property. 3.4 Project Approvals. Developer acknowledges and agrees that execution of this Agreement by City does not constitute approval for the purpose of the issuance of building permits for the construction of the Project, does not limit in any manner the discretion of City in such approval process, and does not relieve Developer from the obligation to apply for and obtain all necessary entitlements, approvals, and permits for the construction of the Project, including without limitation, the approval of architectural plans, the issuance of any certificates regarding historic resources required in connection with the Project(if any), and the completion of any required environmental review. Developer covenants that it shall: (i) obtain all necessary permits and approvals which may be required by City, or any other governmental agency having jurisdiction over the construction of the Project or the development of the Property, (ii) comply with all Conditions of Approval, (iii) comply with all mitigation measures imposed in connection with any environmental review of the Project, and (iv) not commence construction work on the Project prior to issuance of building permits required for such work. City staff shall work cooperatively with Developer to assist in coordinating the expeditious processing and consideration of all permits, entitlements and approvals necessary for development of the Project. 3.5 Fees. Developer shall be solely responsible for, and shall promptly pay when due, all customary and usual fees and charges of City in connection with obtaining building permits and other approvals for the Project, including without limitation, those related to the processing and consideration of amendments, if any, to the current entitlements, any related approvals and permits, environmental review, design review, architectural review, and any subsequent approvals for the Project or the development of the Property. 3.6 Cost of Acquisition and Construction. Except as expressly set forth herein, Developer shall be solely responsible for all direct and indirect costs and expenses incurred in connection with the acquisition of the Property, the design, development and construction of the Project and compliance with the Conditions of Approval, including without limitation the installation and construction of all off-site or on-site improvements required by City in connection therewith, and none of such costs and expenses shall be the obligation of the City or the City. Final Loan Agreement I June 2015 Page 6 of 34 3.7 Financing Plan. As set forth in the attached Exhibit E, Developer has provided City with a financing plan for the Project("Financing Plan")which describes (i) the estimated costs of Project development, including acquisition costs, and hard and soft construction costs, (ii) an operating pro forma which describes projected revenue and expenses for the Project, and (iii)identification of sources of construction and permanent financing. Developer may update the Financing Plan throughout the term of this Agreement,provided that Developer shall provide prior written notice to the City of any proposed modifications. If the City fails to approve of any such modification within fifteen (15) days following City's receipt of the proposed modifications (as such time may be extended if the City Manager determines that City Council consideration is necessary), the Parties shall meet to discuss the proposed modifications. If the City fails to approve the proposed modification or revised modification within five (5) days following the meeting, then the City shall deliver to Developer the City's written reasons for its disapproval. Thereafter, the proposed modifications shall be deemed disapproved by the City. The City agrees not to unreasonably withhold consent to proposed modifications to the Financing Plan. 3.7.1 Evidence of Availability of Funds. Prior to the Closing Date, Developer shall submit to the City copies of all loan documents, including any regulatory agreements or use agreement, for the financing sources identified in the approved Financing Plan, together with evidence reasonably satisfactory to City that(i) all conditions to the release and expenditure of the initial draw of funds from each source described in the approved Financing Plan as a source of construction financing for the Project have been met(or will be met upon the closing of the Loan and the satisfaction of such additional conditions as City shall reasonably approve), and(ii) all construction financing (including draws subsequent to the initial draw of funds)will be available upon the satisfaction of the conditions set forth in the construction loan documents. 3.8 Development Schedule. Developer shall commence and complete construction of the Project and shall satisfy all other obligations of Developer under this Agreement within the time periods set forth herein, as such time periods may be extended upon the mutual written consent of the Parties. Subject to force majeure, the availability of financing, and the City's issuance of permits and approvals, Developer shall commence construction of the Project by not later than the date required by the California Tax Credit Allocation Committee ("CTCAU)in connection with its allocation of low income housing tax credits for the Project. Developer shall commence construction work on the Project within thirty (30) days following issuance of building permits, and Developer shall diligently prosecute to completion the construction of the Project in order to allow City to issue a final certificate of occupancy or equivalent within twenty-four(24) months following commencement of construction work. Subject to force majeure, the availability of financing for the Property and/or Project, and the City's issuance of permits and approvals, Developer's failure to commence or complete construction of the Project in accordance with the time periods specified in this Section 3.8 shall be an Event of Developer Default hereunder. 3.9 Rights of Access. For the purpose of ensuring that the Project is developed in compliance with this Agreement, Developer shall permit representatives of the City to enter upon the Property to inspect the Project following forty-eight(48) hours written notice (except in the case of emergency in which case such notice as may be practical under the circumstances shall be provided). Developer shall have the right to accompany any City representative performing an inspection of the Project. This Section shall not limit or modify City access for the purpose of Final Loan Agreement I June 2015 Page 7 of 34 conducting inspections by the City's Building and Safety or Public Works personnel in connection with Project construction. 3.10 City Disclaimer. Developer acknowledges that the City is under no obligation, and City does not undertake or assume any responsibility or duty to Developer or to any third party, to in any manner review, supervise, or inspect the progress of construction or the operation of the Project. Developer and all third parties shall rely entirely upon its or their own supervision and inspection in determining the quality and suitability of the materials and work, the performance of architects, subcontractors, and material suppliers, and all other matters relating to the construction and operation of the Project. Any review or inspection undertaken by the City is solely for the purpose of determining whether Developer is properly discharging its obligations under this Agreement, and shall not be relied upon by Developer or any third party as a warranty or representation by the City as to the quality of the design or construction of the Improvements or otherwise. 3.11 Construction Plans. Prior to commencement of Project construction, Developer shall submit to City's Building Department detailed construction plans for the development of the Project(the "Construction Plans"). As used herein "Construction Plans" means all construction documents upon which Developer and Developer's contractors shall rely in constructing the Project(including the landscaping,parking, and common areas) and shall include, without limitation, the site development plan, final architectural drawings, landscaping, exterior lighting and signage plans and specifications, materials specifications, final elevations, and building plans and specifications. The Construction Plans shall be based upon the scope of development set forth herein and upon the approvals issued by the City and the City for the Project, and shall not materially deviate therefrom without the express written consent of City. 3.12 Construction Pursuant to Plans. Developer shall develop the Project in accordance with the approved Construction Plans, the Conditions of Approval, and all other permits and approvals granted by the City pertaining to construction of the Project. Developer shall comply with all directions, rules and regulations of any fire marshal, health officer, building inspector or other officer of every governmental agency having jurisdiction over the Property or the Project. Each element of the work shall proceed only after procurement of each permit, license or other authorization that may be required for such element by any governmental agency having jurisdiction. All design and construction work on the Project shall be performed by licensed contractors, engineers or architects, as applicable. 3.13 Change in Construction Plans. If Developer desires to make any material change in the approved Construction Plans, Developer shall submit the proposed change in writing to City in accordance with its standard review process. Nothing in this Section is intended to or shall be deemed to modify the City's standard plan review procedures. 3.14 Defects in Plans. City shall not be responsible to Developer or to any third party for any defect in the Construction Plans or for any structural or other defect in any work done pursuant to the Construction Plans. Subject to the last sentence of this Section 3.14, Developer shall indemnify, defend (with counsel approved by City) and hold harmless the Indemnitees from and against all Claims arising out of, or relating to, or alleged to arise from or relate to defects in the Construction Plans or defects in any work done pursuant to the Construction Plans whether Final Loan Agreement I June 2015 Page 8 of 34 or not any insurance policies shall have been determined to be applicable to any such Claims. Developer's indemnification obligations set forth in this Section shall survive the expiration or earlier termination of this Agreement. It is further agreed that City does not, and shall not, waive any rights against Developer which they may have by reason of this indemnity and hold harmless agreement because of the acceptance by City, or Developer's deposit with City of any of the insurance policies described in this Agreement. Developer's indemnification obligations pursuant to this Section shall not extend to Claims to the extent arising due to the gross negligence or willful misconduct of one or more of the Indemnitees. 3.15 Intentionally Omitted 3.16 Equal Opportunity. During the construction of the Project, there shall be no discrimination on the basis of race, color, religion, creed, sex, sexual orientation, marital status, ancestry or national origin in the hiring, firing,promoting or demoting of any person engaged in construction of the Project, and Developer shall direct its contractors and subcontractors to refrain from discrimination on such basis. 3.17 Prevailing Wage Requirements. To the full extent required by all applicable state and federal laws, rules and regulations, if any, Developer and its contractors and agents shall comply with California Labor Code Section 1720 et seq. and the regulations adopted pursuant thereto ("Prevailing Wage Laws"), and shall be responsible for carrying out the requirements of such provisions. If required by California law or City policy, Developer shall submit to City a plan for monitoring payment of prevailing wages and shall implement such plan at Developer's expense. Developer shall indemnify, defend(with counsel approved by City) and hold the City and its elected and appointed officers, officials, employees, agents, consultants, and contractors (collectively, the"Indemnitees") harmless from and against all liability, loss, cost, expense (including without limitation attorneys' fees and costs of litigation), claim, demand, action, suit, judicial or administrative proceeding,penalty, deficiency, fine, order, and damage (all of the foregoing collectively "Claims") which directly or indirectly, in whole or in part, are caused by, arise in connection with, result from, relate to, or are alleged to be caused by, arise in connection with, or relate to, the payment or requirement of payment of prevailing wages (including without limitation, all claims that may be made by contractors, subcontractors or other third party claimants pursuant to Labor Code Sections 1726 and 1781), the failure to comply with any state or federal labor laws, regulations or standards in connection with this Agreement, including but not limited to the Prevailing Wage Laws, or any act or omission of Developer related to this Agreement with respect to the payment or requirement of payment of prevailing wages, whether or not any insurance policies shall have been determined to be applicable to any such Claims. It is further agreed that City does not and shall not waive any rights against Developer which it may have by reason of this indemnity and hold harmless agreement because of the acceptance by City, or Developer's deposit with City of any of the insurance policies described in this Agreement. The provisions of this Section 3.17 shall survive the expiration or earlier termination of this Agreement. 3.18 Compliance with Laws. In connection with development and construction of the Project, Developer shall comply, and shall cause its contractors to comply with all applicable Final Loan Agreement I June 2015 Page 9 of 34 federal, state and local laws, rules, ordinances and regulations, including without limitation, all applicable federal and state labor laws and standards, applicable provisions of the California Public Contracts Code (if any), the City zoning and development standards, building,plumbing, mechanical and electrical codes, all other provisions of the City's Municipal Code, and all applicable disabled and handicapped access requirements, including without limitation, applicable provisions of the Americans with Disabilities Act, 42 U.S.C. Section 12101, et seq., Government Code Section 4450, et seq., Government Code Section 11135, et seq., and the Unruh Civil Rights Act, Civil Code Section 51, et seq.. Developer shall indemnify, defend (with counsel approved by City) and hold harmless the Indemnitees from and against any and all Claims arising in connection with the breach of Developer's obligations set forth in this Section whether or not any insurance policies shall have been determined to be applicable to any such Claims. It is further agreed that City does not and shall not waive any rights against Developer which they may have by reason of this indemnity and hold harmless agreement because of the acceptance by City, or Developer's deposit with City of any of the insurance policies described in this Agreement. Developer's indemnification obligations under this Section shall not extend to Claims resulting in whole or in part from Developer's adoption and/or utilization of the Points Preference System (provided however if any such claim is based in part on Developer's adoption and/or utilization of the Points Preference System, the exclusion to the Developer's indemnification obligation shall be limited to only the portion(s) of such claim based on Developer's adoption and/or utilization of the Points Preference System) or resulting solely from the gross negligence or willful misconduct of Indemnitees. Developer's defense and indemnification obligations set forth in this Section 3.18 shall survive the expiration or earlier termination of this Agreement. 3.19 Liens and Stop Notices. Until the expiration of the term of the Regulatory Agreement and full repayment of the Loan, if a claim of a lien or stop notice is given or recorded affecting the Project or the Property, Developer shall within twenty (20) days of such recording or service: (a)pay and discharge (or cause to be paid and discharged) the same; or (b) effect the release thereof by recording and delivering (or causing to be recorded and delivered) to the party entitled thereto a surety bond in sufficient form and amount; or (c)provide other assurance satisfactory to City that the claim of lien or stop notice will be paid or discharged. 3.20 Right of City to Satisfy Liens on the Property. If Developer fails to satisfy or discharge any lien or stop notice on the Property pursuant to and within the time period set forth in Section 3.19 above, the City shall have the right, but not the obligation, to satisfy any such liens or stop notices at Developer's expense with prior written notice to Developer and all sums advanced by City for such purpose shall be part of the indebtedness secured by the Deed of Trust. In such event Developer shall be liable for and shall immediately reimburse City for such paid lien or stop notice. Alternatively, the City may require Developer to immediately deposit with City the amount necessary to satisfy such lien or claim pending resolution thereof. The City may use such deposit to satisfy any claim or lien that is adversely determined against Developer. Developer shall file a valid notice of cessation or notice of completion upon cessation of construction of the Improvements for a continuous period of thirty (30) days or more, and shall take all other reasonable steps to forestall the assertion of claims or liens against the Property or the Improvements. The City may (but has no obligation to), with prior written notice to Developer, record any notices of completion or cessation of labor, or any other notice that the City deems necessary or desirable to protect its interest in the Property and the Improvements. Final Loan Agreement I June 2015 Page 10 of 34 3.21 Performance and Payment Bonds. Prior to commencement of construction work on the Project, Developer shall cause its general contractor to deliver to the City copies of payment bond(s) and performance bond(s)issued by a reputable insurance company licensed to do business in California, each in a penal sum of not less than one hundred percent(100%) of the scheduled cost of construction of the Project. The bonds shall name the City as co-obligees. In lieu of such performance and payment bonds, subject to City's approval of the form and substance thereof, Developer may submit evidence satisfactory to the City of the contractor's ability to commence and complete construction of the Project in the form of an irrevocable letter of credit,pledge of cash deposit, certificate of deposit, or other marketable securities held by a broker or other financial institution, with signature authority of the City required for any withdrawal, or a completion guaranty in a form and from a guarantor acceptable to City. Such evidence must be submitted to City in approvable form in sufficient time to allow for City's review and approval prior to the scheduled construction start date. 3.22 Insurance Requirements. Developer shall maintain and shall cause its contractors to maintain all applicable insurance coverage specified in Article X. ARTICLE IV CITY FINANCIAL ASSISTANCE 4.1 City Loan. In order to increase the affordability of the Project, City agrees to provide a loan to Developer in the maximum aggregate amount of up to Six Million Four Hundred Thousand Dollars ($6,400,000) (the "Loan")upon the terms and conditions and for the purposes set forth in this Agreement. The parties acknowledge that as of the Effective Date, the outstanding principal balance of the Predevelopment Loan is $ and that as of the Effective Date, the accrued interest thereon is $ . Pursuant to the Predevelopment Loan Agreement, the outstanding principal balance of the Predevelopment Loan plus accrued interest shall be paid from the proceeds of this Loan, which the Parties agree shall be deemed to have occurred as of the Effective Date. Accordingly, after repaying the Predevelopment Loan in full, the remaining principal amount of this Loan to be disbursed in accordance with Section 4.5 below is $ 4.1.1 Construction/Permanent Note. Upon closing for the Loan, the Predevelopment Note shall be cancelled, and Developer shall execute the Note substantially in the form attached hereto as Exhibit B, which Note shall evidence Developer's obligation to repay both the balance that had been payable under the Predevelopment Note as of the Effective Date and the amount of the additional funds to be advanced by the City pursuant to this Agreement. Concurrently with Developer's execution and delivery to City of the Note: (i) Developer shall execute the Modification to Deed of Trust reflecting the $6,400,000 construction/permanent Loan amount , and (ii) City shall return the Predevelopment Note to Developer, marked "Cancelled." City shall cause the Modification to Deed of Trust to be recorded in the Official Records on or before the Closing Date. Provided that Developer has complied with all conditions precedent to disbursement of the Loan set forth in Section 4.5, the proceeds of the Loan ("Loan Proceeds") shall be disbursed Final Loan Agreement I June 2015 Page 11 of 34 in accordance with Section 4.4 hereof. Developer shall be permitted to use the Loan Proceeds only for the purposes set forth in Section 4.4. 4.2 Interest Rate, Payment Dates, Maturity Date, Excess Proceeds. Interest shall accrue on the outstanding principal balance of this Note at the simple rate of[three percent (3%)]* per year from the date of disbursement until this Note is paid in full. [*Note. See #14 of Term Sheet. If prior to the execution of this Note, which will be just prior to the admission of the investor limited partner and the construction loan closing, it is demonstrated by Eden Housing that a reduction or elimination of the interest rate on the City Loan is required to keep the investor limited partner's capital account from going negative during the Low-Income Housing Tax Credit period, the City Manager shall have the right to adjust the interest rate without additional Council approval, provided City staff has made a determination that such an interest rate change is required in order to keep the project financially feasible.] Comment: The above cannot be finalized until the numbers are run just before the investor is admitted which will be a couple of days or day prior to the construction loan closing. Annual payments shall be due and payable on a residual receipts basis in accordance with the formula set forth in the Note. The entire outstanding principal balance of the Loan together with accrued interest and all other sums due under the City Documents shall be payable in full on the date (the "Maturity Date")which is the fifty-fifth(55th) anniversary of the date that the certificate of occupancy or its equivalent is issued by the City for the Project. Notwithstanding the foregoing, the City shall have the right to accelerate the Maturity Date and declare all sums payable under the Note immediately due and payable upon the occurrence of an Event of Developer Default under this Agreement or the Note, including without limitation, Developer's failure to commence or complete construction of the Project within the times periods specified in Section 3.8. Within ten (10)business days after Developer's receipt of its limited partner(s)' capital contribution following the issuance of the IRS Form 8609 for the Project, Developer shall pay to City as a reduction of the outstanding principal balance of the Note, a one-time payment of a share of Excess Proceeds as defined in and pursuant to the Note. 4.3 Security. As security for repayment of the Note, Developer shall execute the Modification to Deed of Trust in favor of City as beneficiary pursuant to which City shall be provided a lien against Developer's interest in the Property and the Improvements. The Modification to Deed of Trust shall be dated as of the Closing Date, shall be substantially in the form attached hereto as Exhibit D, and shall be recorded in the Official Records on or before the Closing Date. The Modification to Deed of Trust may be subordinated only as provided in Section 7.1.1. Developer acknowledges that the Modification to Deed of Trust will secure Developer's performance of Developer's obligations pursuant to this Agreement and the Regulatory Agreement which may survive repayment of the Note, and that the Modification to Deed of Trust shall not be reconveyed prior to Developer's satisfaction of such obligations. The repayment of the Note also is secured by the Assignment Agreement. Final Loan Agreement I June 2015 Page 12 of 34 4.4 Use and Disbursement of Proceeds. The Loan Proceeds shall be used solely to fund Project development costs (in an amount and for such development costs as are approved for funding by the City, such as building permits and fees) and to fund construction of the Project consistent with the approved Financing Plan, as it may be updated with City approval, and Project approvals. 4.5 Conditions to Disbursement of Construction/Permanent Loan Proceeds. City's obligation to fund the Loan and disburse the Loan Proceeds is conditioned upon the satisfaction of all of the following conditions: (i) Developer's delivery to City (or deposit into escrow, as applicable) of fully-executed originals of the CCI Assignment and Assumption Agreement, the Note, the Assignment Agreement the Modification to Deed of Trust, and the Regulatory Agreement if not previously recorded. (ii) Recordation of the CCI Assignment and Assumption Agreement, the Modification to Deed of Trust and the Regulatory Agreement(if not previously recorded)in the Official Records. (iii) The issuance by an insurer satisfactory to City of an A.L.T.A. lender's policy of title insurance ("Title Policy") for the benefit of City in the amount of the Loan, insuring that the lien of the Deed of Trust and the Regulatory Agreement are subject only to deeds of trust, regulatory agreements and related documents provided for the benefit of Project lenders approved pursuant to the Financing Plan, and such other defects, liens, conditions, encumbrances, restrictions, easements and exceptions as City may approve in writing (collectively, the"Permitted Exceptions") and containing such endorsements as City may reasonably require, with the cost of such Title Policy to be paid by Developer. (iv) Developer's delivery to the City of evidence of property and liability insurance coverage in accordance with the requirements set forth in Article X, if not previously submitted to the City. (v) Developer's delivery to the City of payment bonds and performance bonds or other assurance of completion consistent with the requirements of Section 3.21. (vi) Developer's delivery to City of evidence reasonably satisfactory to City that there are no mechanics' liens or stop notices related to the Property or the Project, and Developer's provision to City of full waivers or releases of lien clams if required by City. (vii) Developer's delivery to City of each of the following organizational documents: (a) certified copy of Developer's LP-1, (b) a copy of Developer's executed partnership agreement, certified as accurate and complete by an authorized officer of Developer's general partner("General Partner"); (c) certified copies of the General Partner's LLC-1 and operating agreement; and (c) articles of incorporation and bylaws for the General Partner's sole member and verification of such entity's federal tax-exempt status. (viii) Developer's delivery to City of each of the following: (i) certificates of good standing, certified by the Secretary of State indicating that Developer, the General Partner, Final Loan Agreement I June 2015 Page 13 of 34 and the General Partner's sole member are properly organized, in good standing, and authorized to do business in the State of California, (ii) a certified resolution indicating that Developer and the General Partner have authorized the transactions contemplated by this Agreement and that the persons executing the City Documents on behalf of Developer have been duly authorized to do so. (ix) No material adverse change as determined by City in its reasonable judgment shall have occurred in the condition of the Property or in the financial or other condition of Developer since the date of this Agreement. (x) (a) City shall have approved the final plans and specifications for the Project; (b) Developer shall have delivered to City evidence reasonably satisfactory to City that Developer has obtained all necessary entitlements, permits (including without limitation building permits), licenses, and approvals required to develop the Project, or that the receipt of such permits is subject only to such conditions as City shall reasonably approve; (c) Developer's construction financing for the Project shall have closed or shall close concurrently with City's disbursement of funds for construction, and Developer shall have delivered to City evidence reasonably satisfactory to City that Developer has secured binding commitments, subject only to commercially reasonable conditions, for all Project construction and permanent financing; (d) Developer's delivery to City, and City approval of all of the following: (1) any modifications to the Project construction and operating budgets previously approved by City; (2) any modification to the construction schedule; and(3) copies of such other documents related to the financing of the Project as City may reasonably request. (xi) City's receipt of a written requisition from Developer specifying the amount and use of the requested funds, accompanied by copies of third-party invoices for services rendered in connection with the Project(accompanied by or to be followed by evidence of payment of such invoices, as applicable), and such other documentation as City shall reasonably require, including without limitation, executed consents to the extent required by the Assignment Agreement. 4.6 No Obligation to Disburse Proceeds Upon Default. Notwithstanding any other provision of this Agreement, the City shall have no obligation to disburse or authorize the disbursement of any portion of the Loan Proceeds following: (i) the failure of any of Developer's representations and warranties made in this Agreement or in connection with the Loan to be true and correct in all material respects; (ii) the termination of this Agreement; (iii) the failure of any of Developer's representations and warranties set forth in any City Document to be true and correct in all material respects; or (iv) the occurrence of an Event of Developer Default under any City Document which remains uncured beyond any applicable cure period, or the existence of any condition, event or act which upon the giving of notice or the passage of time or both would constitute an Event of Developer Default under any City Document Final Loan Agreement I June 2015 Page 14 of 34 4.7 Prepayment, Acceleration. (a) Prepayment. Developer shall have the right to prepay the Loan and the Note at any time and from time to time, without penalty or premium,provided that any prepayment of principal must be accompanied by interest accrued but unpaid to the date of prepayment. Prepayments shall be applied first to accrued but unpaid interest and then to principal. Any such prepayment shall have no effect upon Developer's obligations under the Regulatory Agreement which shall survive for the full term of the Regulatory Agreement. (b) Due On Transfer or Encumbrance. Unless City agrees otherwise in writing, the entire unpaid principal balance and all interest and other sums accrued under the Note shall be due and payable upon the Transfer absent the prior written consent of City of all or any part of or interest in the Property or the Project except as otherwise permitted pursuant to this Agreement. 4.8 Nonrecourse. The Note shall be non-recourse to Developer as provided in Section 3.9 of the Note. 4.9 Escrow. City and Developer shall open escrow at the office of North American Title Company located in Castro Valley, California, or such other title company as the Parties may agree upon ("Title Company" or "Escrow Agent")in order to consummate the closing of escrow for the transactions contemplated hereby. 4.10 Costs of Closing and Escrow. Developer shall pay all recording fees, transfer taxes, escrow fees and closing costs incurred in connection with the Loan and related transactions. Developer shall pay for the cost of the Title Policy. 4.11 Inspection of Books and Records. Upon request, Developer shall permit the City to inspect at reasonable times and on a confidential basis those books, records and all other documents of Developer necessary to determine Developer's compliance with the terms of this Agreement and the City Documents. ARTICLE V USE OF THE PROPERTY 5.1 Use; Affordable Housing. Developer covenants and agrees for itself and its successors and assigns that the Property shall be used for the development and operation of a multi-family residential project with Affordable Rent primarily to serve veterans, in accordance with the terms and conditions of this Agreement and the Regulatory Agreement. 5.2 Maintenance. Developer shall at its own expense, maintain the Property, the Improvements and related landscaping and common areas in good physical condition, in good repair, and in decent, safe, sanitary, habitable and tenantable living conditions in conformity with all applicable state, federal, and local laws, ordinances, codes, and regulations. Without limiting the foregoing, Developer agrees to maintain the Project and the Property (including without limitation, the residential units, common areas, landscaping, driveways,parking areas, and walkways)in a condition free of all waste, nuisance, debris, unmaintained landscaping, graffiti, Final Loan Agreement I June 2015 Page 15 of 34 disrepair, abandoned vehicles/appliances, and illegal activity, and shall take all reasonable steps to prevent the same from occurring on the Property or at the Project. Developer shall prevent and/or rectify any physical deterioration of the Property and the Project and shall make all repairs, renewals and replacements necessary to keep the Property and the improvements located thereon in good condition and repair. Developer shall provide adequate security for occupants of the Project. 5.3 Taxes and Assessments. Developer shall pay all real and personal property taxes, assessments and charges and all franchise, income,payroll, withholding, sales, and other taxes assessed against the Property or the Improvements and payable by Developer, at such times and in such manner as to prevent any penalty from accruing, or any lien or charge from attaching to the Property or the Improvements; provided, however, that Developer shall have the right to contest in good faith, any such taxes, assessments, or charges. In the event the Developer exercises its right to contest any tax, assessment, or charge, the Developer, on final determination of the proceeding or contest, shall immediately pay or discharge any decision or judgment rendered against it, together with all costs, charges and interest. The City acknowledges that Developer will apply for an exemption from property taxes pursuant to California Revenue and Taxation Code Section 214(8). 5.4 Obligation to Refrain from Discrimination. Developer shall not restrict the rental, sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property or the Improvements, or any portion thereof, on the basis of race, color, religion, creed, sex, sexual orientation, disability, marital status, ancestry, or national origin of any person. Developer covenants for itself and all persons claiming under or through it, and this Agreement is made and accepted upon and subject to the condition that there shall be no discrimination against or segregation of any person or group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property or the Improvements or part thereof, nor shall Developer or any person claiming under or through Developer establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in, of, or for the Property or the Improvements or part thereof. Developer shall include such provision in all deeds, leases, contracts and other instruments executed by Developer, and shall enforce the same diligently and in good faith. All deeds, leases or contracts made or entered into by Developer, its successors or assigns, as to any portion of the Property or the Improvements shall contain the following language: (a) In Deeds, the following language shall appear: "Grantee herein covenants by and for itself, its successors and assigns, and all persons claiming under or through it, that there shall be no discrimination against or segregation of a person or of a group of persons on account of any basis listed in subdivision (a) or(d) of Section 12955 of the Government Code, as those bases Final Loan Agreement I June 2015 Page 16 of 34 are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the property herein conveyed nor shall the grantee or any person claiming under or through the grantee establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the property herein conveyed. The foregoing covenant shall run with the land." (b) In Leases, the following language shall appear: "The lessee herein covenants by and for the lessee and lessee's heirs,personal representatives and assigns, and all persons claiming under the lessee or through the lessee, that this lease is made subject to the condition that there shall be no discrimination against or segregation of any person or of a group of persons on account of race, color, creed, religion, sex, sexual orientation, marital status, national origin, ancestry or disability in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the property herein leased nor shall the lessee or any person claiming under or through the lessee establish or permit any such practice or practices of discrimination of segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sublessees, subtenants, or vendees in the property herein leased." (c) In Contracts, the following language shall appear: "There shall be no discrimination against or segregation of any person or group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph(1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the property nor shall the transferee or any person claiming under or through the transferee establish or permit any such practice or practices of discrimination or segregation with reference to selection, location, number, use or occupancy of tenants, lessee, subtenants, sublessees or vendees of the land." ARTICLE VI LIMITATIONS ON CHANGE IN OWNERSHIP, MANAGEMENT AND CONTROL OF DEVELOPER 6.1 Change Pursuant to this Agreement. Developer and its principals have represented that they possess the necessary expertise, skill and ability to carry out the development of the Project on the Property pursuant to this Agreement. The qualifications, experience, financial capacity and expertise of Developer and its principals are of particular concern to the City. It is because of these qualifications, experience, financial capacity and Final Loan Agreement I June 2015 Page 17 of 34 expertise that the City has entered into this Agreement with Developer. No voluntary or involuntary successor, assignee or transferee of Developer shall acquire any rights or powers under this Agreement, except as expressly provided herein. 6.2 Prohibition on Transfer. Prior to the expiration of the term of the Regulatory Agreement, Developer shall not, except as expressly permitted by this Agreement, directly or indirectly, voluntarily, involuntarily or by operation of law make or attempt any total or partial sale, transfer, conveyance, assignment or lease(collectively, "Transfer") of the whole or any part of the Property, the Project, the Improvements, or this Agreement, without the prior written approval of City, which approval shall not be unreasonably withheld. Any such attempt to assign this Agreement without the City's consent shall be null and void and shall confer no rights or privileges upon the purported assignee. In addition to the foregoing,prior to the expiration of the term of the Regulatory Agreement, except as expressly permitted by this Agreement, Developer shall not undergo any significant change of ownership without the prior written approval of City. For purposes of this Agreement, a"significant change of ownership" shall mean a transfer of the beneficial interest of more than twenty-five percent(25%)in aggregate of the present ownership and/or control of Developer, taking all transfers into account on a cumulative basis; provided however, neither the admission of an investor limited partner, nor the transfer by the investor limited partner to subsequent limited partners shall be restricted by this provision. 6.3 Permitted Transfers. Notwithstanding any contrary provision hereof, the prohibitions set forth in this Article shall not be deemed to prevent: (i) the granting of easements or permits to facilitate development of the Property, (ii) the dedication of any property required pursuant to this Agreement; (iii) the lease of individual residences to tenants for occupancy as their principal residence in accordance with the Regulatory Agreement; (iv) assignments creating security interests for the purpose of financing the acquisition, construction or permanent financing of the Project or the Property in accordance with the approved Financing Plan as it may be updated with City's written approval, and subject to the requirements of Article VII, or Transfers directly resulting from the foreclosure of, or granting of a deed in lieu of foreclosure of, such a security interest; (v) the admission of limited partners and any transfer of limited partnership interests in accordance with Developer's agreement of limited partnership (the "Partnership Agreement"),provided that the Partnership Agreement and/or the instrument of Transfer provides for development and operation of the Property and Project in a manner consistent with this Agreement; (vi) the removal of the general partner by the investor limited partner for a default under the Partnership Agreement,provided the replacement general partner is reasonably satisfactory to City; or(vii) the transfer of the General Partner's interest to a nonprofit entity that is or its member/manager is tax-exempt under Section 501(c)(3) of the Internal Revenue Code of 1986 as amended,provided such replacement general partner is reasonably satisfactory to City. 6.4 Requirements for Proposed Transfers. The City may, in the exercise of its sole discretion, consent to a proposed Transfer of this Agreement, the Improvements, the Property or portion thereof if all of the following requirements are met(provided however, the requirements of this Section 6.4 shall not apply to Transfers described in Section 6.3): Final Loan Agreement I June 2015 Page 18 of 34 (i) The proposed transferee demonstrates to the City's satisfaction that it has the qualifications, experience and financial resources necessary and adequate as may be reasonably determined by the City to competently complete and manage the Project and to otherwise fulfill the obligations undertaken by the Developer under this Agreement. (ii) The Developer and the proposed transferee shall submit for City review and approval all instruments and other legal documents proposed to effect any Transfer of this Agreement, the Improvements, the Property or interest therein together with such documentation of the proposed transferee's qualifications and development capacity as the City may reasonably request. (iii) The proposed transferee shall expressly assume all of the rights and obligations of the Developer under this Agreement and the City Documents arising after the effective date of the Transfer and all obligations of Developer arising prior to the effective date of the Transfer(unless Developer expressly remains responsible for such obligations) and shall agree to be subject to and assume all of Developer's obligations pursuant to the Conditions of Approval and all other conditions, and restrictions set forth in this Agreement and the Regulatory Agreement. (iv) The Transfer shall be effectuated pursuant to a written instrument satisfactory to the City in form recordable in the Official Records. Consent to any proposed Transfer may be given by the City Manager unless the City Manager, in his or her discretion, refers the matter of approval to the City Council. If a proposed Transfer has not been approved by City in writing within thirty (30) days following City's receipt of written request by Developer(as such time may be extended if the City Manager determines that City Council consideration is necessary), the City shall provide its reason(s) for such disapproval in writing to Developer and the proposed transferee. Within fifteen (15) days thereafter, Developer, the proposed transferee, and City shall meet to discuss the reason(s) for disapproval and any proposed modifications to the transfer. If the Parties are unable to cure the City's reasons for disapproval, the proposed transfer shall be deemed rejected. 6.5 Effect of Transfer without City Consent. 6.5.1 In the absence of specific written agreement by the City, no Transfer by Developer shall be deemed to relieve the Developer or any other party from any obligation under this Agreement. 6.5.2 Without limiting any other remedy City may have under this Agreement, or under law or equity, it shall be an Event of Developer Default hereunder entitling City to terminate this Agreement and/or pursue other remedies hereunder if without the prior written approval of the City, Developer assigns or Transfers this Agreement, the Improvements, or the Property prior to the expiration of the Regulatory Agreement. This Section 6.5.2 shall not apply to Transfers described in Section 6.3. 6.6 Recovery of City Costs. Developer shall reimburse City for all City costs, including but not limited to reasonable attorneys' fees, incurred in reviewing instruments and other legal documents proposed to effect a Transfer under this Agreement and in reviewing the Final Loan Agreement I June 2015 Page 19 of 34 qualifications and financial resources of a proposed successor, assignee, or transferee within ten (10) days following City's delivery to Developer of an invoice detailing such costs. ARTICLE VII SECURITY FINANCING AND RIGHTS OF MORTGAGEES 7.1 Mortgages and Deeds of Trust for Development. Mortgages and deeds of trust, or any other reasonable security instrument are permitted to be placed upon the Property or the Improvements only for the purpose of securing loans for the purpose of financing, the design and construction of the Improvements, and other expenditures reasonably necessary for development of the Property pursuant to this Agreement. Developer shall not enter into any conveyance for such financing that is not contemplated in the Financing Plan as it may be updated with City approval, without the prior written approval of the City Manager or his or her designee. As used herein, the terms "mortgage" and "deed of trust" shall mean any security instrument used in financing real estate acquisition, construction and land development. 7.1.1 Regulatory Agreement Subordination. The City agrees that City will not withhold consent to reasonable requests for subordination of the Modification to Deed of Trust and Regulatory Agreement to deeds of trust provided for the benefit of lenders identified in the Financing Plan as it may be updated with City approval,provided that the instruments effecting such subordination include reasonable protections to the City in the event of default, including providing reasonable notice and cure rights to the City. 7.2 Holder Not Obligated to Construct. The holder of any mortgage, deed of trust authorized by this Agreement shall not be obligated to complete construction of the Improvements or to guarantee such completion. Nothing in this Agreement shall be deemed to permit or authorize any such holder to devote the Property or any portion thereof to any uses, or to construct any improvements thereon, other than those uses or improvements provided for or authorized by this Agreement and the Regulatory Agreement. 7.3 Notice of Default and Right to Cure. Whenever City delivers any notice of default hereunder, City shall concurrently deliver a copy of such notice to each holder of record of any mortgage or deed of trust secured by the Property or the Improvements,provided that City has been provided with the address for delivery of such notice. City shall have no liability to any such holder for any failure by the City to provide such notice to such holder. Each such holder shall have the right, but not the obligation, at its option, to cure or remedy any such default or breach within the cure period provided to Developer extended by an additional sixty (60) days. 7.4 Intentionally omitted. 7.5 City Right to Cure Defaults. In the event of a breach or default by Developer under a mortgage or deed of trust secured by the Property or the Improvements, Developer agrees that City may cure the default following prior notice thereof to the holder of such instrument and Developer. In such event, Developer shall be liable for, and City shall be entitled to reimbursement from Developer for all costs and expenses incurred by City associated with and attributable to the curing of the default or breach and such sum shall constitute a part of the indebtedness secured by the Deed of Trust. Final Loan Agreement I June 2015 Page 20 of 34 7.6 Holder to be Notified. Developer shall ensure that City shall have the right to receive notices of default and shall have the right to cure defaults under senior deeds of trust, mortgages and other security instruments recorded against the Property, unless the City approves in writing a waiver of this requirement prior to Developer entering into said security instrument or Requests for Notice of Default are recorded for each senior loan recorded against the Property 7.7 Modifications to Agreement. City shall not unreasonably withhold its consent to modifications of this Agreement requested by Project lenders or investors provided such modifications do not alter City's substantive rights and obligations under this Agreement. 7.8 Estoppel Certificates. Either Party shall, at any time, and from time to time, within fifteen (15) days after receipt of written request from the other Party, execute and deliver to such Party a written statement certifying that, to the knowledge of the certifying Party: (i) this Agreement is in full force and effect and a binding obligation of the Parties (if such be the case), (ii) this Agreement has not been amended or modified, or if so amended, identifying the amendments, and(iii) the requesting Party is not in default in the performance of its obligations under this Agreement, or if in default, describing the nature of any such defaults. ARTICLE VIII ENVIRONMENTAL MATTERS 8.1 No City Liability; Developer's Covenants. City shall not be responsible for the cost of any soil, groundwater or other environmental remediation or other response activities for any Hazardous Materials existing or occurring in, on, under or about the Improvements, the Property or any portion thereof. Upon receipt of any notice regarding the presence, release or discharge of Hazardous Materials in, on or under the Improvements, the Property, or any portion thereof, Developer agrees to timely initiate and diligently pursue and complete all appropriate response, remediation and removal actions for the presence, release or discharge of such Hazardous Materials within such deadlines as specified by applicable Environmental Laws. Developer hereby covenants and agrees that: (i) Developer shall not knowingly permit the Project or the Property or any portion of either to be a site for the use, generation, treatment, manufacture, storage, disposal or transportation of Hazardous Materials or otherwise knowingly permit the presence or release of Hazardous Materials in, on, under, about or from the Project or the Property with the exception of cleaning supplies and other materials customarily used in construction, operation or maintenance of residential property on the Project, and used, stored and disposed of in compliance with Hazardous Materials Laws, and (ii) Developer shall keep and maintain the Project and the Property and each portion thereof in compliance with, and shall not cause or permit the Project or the Property or any portion of either to be in violation of, any Hazardous Materials Laws. 8.2 Environmental Indemnification. Subject to the last sentence of this Section, Developer shall indemnify, defend(with counsel approved by City) and hold the Indemnitees harmless from and against any and all Claims including without limitation any expenses Final Loan Agreement I June 2015 Page 21 of 34 associated with the investigation, assessment, monitoring, response, removal, treatment, abatement or remediation of Hazardous Materials and administrative, enforcement or judicial proceedings resulting, arising, or based directly or indirectly in whole or in part, upon (i) the presence, release, use, generation, discharge, storage or disposal or the alleged presence, release, discharge, storage or disposal of any Hazardous Materials on, under, in or about, or the transportation of any such Hazardous Materials to or from, the Property, or (ii) the failure of Developer, Developer's employees, agents, contractors, subcontractors, or any person acting on behalf of any of the foregoing to comply with Hazardous Materials Laws or the covenants set forth in Section 8.1. The foregoing indemnity shall further apply to any residual contamination in, on, under or about the Property or affecting any natural resources, and to any contamination of any property or natural resources arising in connection with the generation, use, handling, treatment, storage, transport or disposal of any such Hazardous Materials, and irrespective of whether any of such activities were or will be undertaken in accordance with Hazardous Materials Laws. The provisions of this Section 8.2 shall survive the expiration or earlier termination of this Agreement. Developer's indemnification obligations set forth in this Section shall also apply to Claims arising directly or indirectly as a result of the actions or omissions of CCI or Developer or CCI's or Developer's employees, agents, contractors, subcontractors, or any person acting on behalf of any of the foregoing relating to activity on the Property prior to Developer's acquisition of the Property. 8.2.1 No Limitation. Developer hereby acknowledges and agrees that Developer's duties, obligations and liabilities under this Agreement, including, without limitation, under Section 8.2 above, are in no way limited or otherwise affected by any information the City may have concerning the Property and/or the presence in, on, under or about the Property of any Hazardous Materials, whether the City obtained such information from the Developer or from its own investigations. It is further agreed that City does not and shall not waive any rights against Developer that they may have by reason of this indemnity and hold harmless agreement because of the acceptance by City, or the deposit with City by Developer, of any of the insurance policies described in this Agreement. 8.3 Hazardous Materials. As used herein, the term "Hazardous Materials" means any substance, material or waste which is or becomes regulated by any federal, state or local governmental authority, and includes without limitation (i)petroleum or oil or gas or any direct or indirect product or by-product thereof, (ii) asbestos and any material containing asbestos; (iii) any substance, material or waste regulated by or listed(directly or by reference) as a"hazardous substance", "hazardous material", "hazardous waste", "toxic waste", "toxic pollutant", "toxic substance", "solid waste" or"pollutant or contaminant" in or pursuant to, or similarly identified as hazardous to human health or the environment in or pursuant to, the Toxic Substances Control Act [15 U.S.C. Section 2601, et seq.]; the Comprehensive Environmental Response, Compensation and Liability Act [42 U.S.C. Section 9601, et seq.], the Hazardous Materials Transportation Authorization Act [49 U.S.C. Section 5101, et seq.], the Resource Conservation and Recovery Act [42 U.S.C. Section 6901, et seq.], the Federal Water Pollution Control Act [33 U.S.C. Section 1251], the Clean Air Act [42 U.S.C. Section 7401, et seq.], the California Underground Storage of Hazardous Substances Act [California Health and Safety Code Section 25280, et seq.], the California Hazardous Substances Account Act [California Health and Safety Code Section 25300, et seq.], the California Hazardous Waste Act [California Health and Safety Code Section 25100, et seq.], the California Safe Drinking Water and Toxic Enforcement Act Final Loan Agreement I June 2015 Page 22 of 34 [California Health and Safety Code Section 25249.5, et seq.], and the Porter-Cologne Water Quality Control Act [California Water Code Section 13000, et seq.], as they now exist or are hereafter amended, together with any regulations promulgated thereunder; (iv) any substance, material or waste which is defined as such or regulated by any "Superfund" or"Superlien" law, or any Environmental Law; or(v) any other substance, material, chemical, waste or pollutant identified as hazardous or toxic and regulated under any other federal, state or local environmental law, including without limitation, asbestos,polychlorinated biphenyls,petroleum, natural gas and synthetic fuel products and by-products. 8.4 Environmental Laws. As used herein, the term "Environmental Laws" means all federal, state or local statutes, ordinances, rules, regulations, orders, decrees,judgments or common law doctrines, and provisions and conditions of permits, licenses and other operating authorizations regulating, or relating to, or imposing liability or standards of conduct concerning (i)pollution or protection of the environment, including natural resources; (ii) exposure of persons, including employees and agents, to Hazardous Materials (as defined above) or other products, raw materials, chemicals or other substances; (iii)protection of the public health or welfare from the effects of by-products, wastes, emissions, discharges or releases of chemical substances from industrial or commercial activities; (iv) the manufacture, use or introduction into commerce of chemical substances, including without limitation, their manufacture, formulation, labeling, distribution, transportation, handling, storage and disposal; or (iv) the use, release or disposal of toxic or hazardous substances or Hazardous Materials or the remediation of air, surface waters, groundwaters or soil, as now or may at any later time be in effect, including but not limited to the Toxic Substances Control Act [15 U.S.C. Section 2601, et seq.]; the Comprehensive Environmental Response, Compensation and Liability Act [42 U.S.C. Section 9601, et seq.], the Hazardous Materials Transportation Authorization Act [49 U.S.C. Section 5101, et seq.], the Resource Conservation and Recovery Act [42 U.S.C. Section 6901, et seq.], the Federal Water Pollution Control Act [33 U.S.C. Section 1251], the Clean Air Act [42 U.S.C. Section 7401, et seq.], the California Underground Storage of Hazardous Substances Act [California Health and Safety Code Section 25280, et seq.], the California Hazardous Substances Account Act [California Health and Safety Code Section 25300, et seq.], the California Hazardous Waste Act [California Health and Safety Code Section 25100, et seq.], the California Safe Drinking Water and Toxic Enforcement Act [California Health and Safety Code Section 25249.5, et seq.], and the Porter-Cologne Water Quality Control Act [California Water Code Section 13000, et seq.], as each of the foregoing now exist or are hereafter amended, together with any regulations promulgated thereunder. ARTICLE IX DEFAULTS,REMEDIES AND TERMINATION 9.1 Event of Developer Default. The following events shall constitute an event of default on the part of Developer("Event of Developer Default"): (a) Subject to force majeure, the availability of financing for the development of the Project pursuant to the Regulatory Agreement and this Agreement, and City's issuance of Final Loan Agreement I June 2015 Page 23 of 34 permits and approvals, Developer fails to commence or complete construction of the Project within the times set forth in Section 3.8, or subject to force majeure, abandons or suspends construction of the Project prior to completion for a period of sixty (60) days or more; (b) Developer fails to pay when due the principal and interest(if any)payable under the Note and such failure continues for twenty-one (2 1) days after City notifies Developer thereof in writing; (c) A Transfer occurs, either voluntarily or involuntarily, in violation of Article VI; (d) Developer fails to maintain insurance as required pursuant to this Agreement, and Developer fails to cure such default within ten (10) days; (e) Subject to Developer's right to contest the following charges pursuant to Section 5.3, Developer fails to pay prior to delinquency taxes or assessments due on the Property or the Project or fails to pay when due any other charge that may result in a lien on the Property or the Project, and Developer fails to cure any such default within thirty (30) days of delinquency; (f) A default is declared under any loan secured by a mortgage, deed of trust or other security instrument recorded against the Property, the Improvements, or Developer's interest therein, and remains uncured beyond any applicable cure period such that the holder of such security instrument has the right to accelerate repayment of such loan; (g) Any representation or warranty contained in this Agreement or in any application, financial statement, certificate or report submitted to the City or the City in connection with this Agreement or any City Document or Developer's request for the Loan proves to have been incorrect in any material and adverse respect when made and continues to be materially adverse to the City; (h) If,pursuant to or within the meaning of the United States Bankruptcy Code or any other federal or state law relating to insolvency or relief of debtors ("Bankruptcy Law"), Developer or any general partner thereof(i) commences a voluntary case or proceeding; (ii) consents to the entry of an order for relief against Developer or any general partner thereof in an involuntary case; (iii) consents to the appointment of a trustee, receiver, assignee, liquidator or similar official for Developer or any general partner thereof, (iv) makes an assignment for the benefit of its creditors; or(v) admits in writing its inability to pay its debts as they become due; (i) A court of competent jurisdiction shall have made or entered any decree or order(1) adjudging the Developer to be bankrupt or insolvent, (2) approving as properly filed a petition seeking reorganization of the Developer or seeking any arrangement for Developer under bankruptcy law or any other applicable debtor's relief law or statute of the United States or any state or other jurisdiction, (3) appointing a receiver, trustee, liquidator, or assignee of the Developer in bankruptcy or insolvency or for any of its properties, or(4) directing the winding up or liquidation of the Developer; Final Loan Agreement I June 2015 Page 24 of 34 0) Developer shall have assigned its assets for the benefit of its creditors (other than pursuant to a mortgage loan) or suffered a sequestration or attachment of or execution on any substantial part of its property, unless the property so assigned, sequestered, attached or executed upon shall have been returned or released within sixty (60) days after such event (unless a lesser time period is permitted for cure under any other mortgage on the Property or the Improvements, in which event such lesser time period shall apply under this subsection as well) or prior to any sooner sale pursuant to such sequestration, attachment, or execution; (k) The Developer shall have voluntarily suspended its business or Developer shall have been dissolved or terminated; (1) An event of default on the part of Developer arises under any City Document and remains uncured beyond any applicable cure period; (m) Developer defaults in the performance of any term,provision, covenant or agreement contained in this Agreement other than an obligation enumerated in this Section 9.1 and unless a shorter cure period is specified for such default, the default continues for twenty-one (21) days in the event of a monetary default or sixty (60) days in the event of a nonmonetary default after the date upon which City shall have given written notice of the default to Developer; provided however, if the default is of a nature that it cannot be cured within sixty (60) days, an Event of Developer Default shall not arise hereunder if Developer commences to cure the default within sixty (60) days and thereafter prosecutes the curing of such default with due diligence and in good faith to completion and in no event later than 120 days after receipt of notice of the default; or (n) Borrower fails to use Loan proceeds in accordance with this Agreement or fails to use Loan proceeds in accordance with the applicable request for disbursement. 9.2 City Default. An event of default on the part of City ("Event of City Default") shall arise hereunder if City fails to keep, observe, or perform any of its covenants, duties, or obligations under this Agreement, and the default continues for a period of thirty (30) days after written notice thereof from Developer to City, or in the case of a default which cannot with due diligence be cured within thirty (30) days, City fails to commence to cure the default within thirty (30) days of such notice and thereafter fails to prosecute the curing of such default with due diligence and in good faith to completion. 9.3 City's Right to Terminate Agreement. If an Event of Developer Default shall occur and be continuing beyond any applicable cure period, then City shall, in addition to other rights available to it under law or this Agreement, have the right to terminate this Agreement. If City makes such election, City shall give written notice to Developer and to any mortgagee entitled to such notice specifying the nature of the default and stating that this Agreement shall expire and terminate on the date specified in such notice, and upon the date specified in the notice, this Agreement and all rights of Developer under this Agreement, shall expire and terminate. 9.4 City's Remedies and Rights Upon an Event of Developer Default. Upon the occurrence of an Event of Developer Default and the expiration of any applicable cure period, Final Loan Agreement I June 2015 Page 25 of 34 City shall have all remedies available to it under this Agreement, the City Documents, or under law or equity, including, but not limited to the following, and City may, at its election, without notice to or demand upon Developer, except for notices or demands required by law or expressly required pursuant to the City Documents, exercise one or more of the following remedies subject to the nonrecourse provision contained the Note: (a) Accelerate and declare the balance of the Note and interest accrued thereon immediately due and payable; (b) Seek specific performance to enforce the terms of the City Documents; (c) Foreclose pursuant to the Deed of Trust; (d) Pursue any and all other remedies available under this Agreement, the City Documents or under law or equity to enforce the terms of this Agreement and the City Documents and City's rights thereunder. 9.5 Developer's Remedies Upon an Event of City Default. Subject to the notice and cure provisions of Section 9.2, upon the occurrence of an Event of City Default, in addition to pursuing any other remedy allowed at law or in equity or otherwise provided in this Agreement, Developer may bring an action for equitable relief seeking the specific performance of the terms and conditions of this Agreement, and/or enjoining, abating, or preventing any violation of such terms and conditions, and/or seeking to obtain any other remedy consistent with the purpose of this Agreement. 9.6 Remedies Cumulative, No Consequential Damages. Except as otherwise expressly stated in this Agreement, the rights and remedies of the Parties are cumulative, and the exercise by either Party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different time, of any other rights or remedies for the same or any other default by the other Party. Notwithstanding anything to the contrary set forth herein, a Party's right to recover damages in the event of a default shall be limited to actual damages and shall exclude consequential damages. A Party may exercise any rights and remedies available under applicable law, in addition to, and not in lieu of, any rights and remedies expressly granted in this Agreement. 9.7 Inaction Not a Waiver of Default. No failure or delay by either Party in asserting any of its rights and remedies as to any default shall operate as a waiver of such default or of any such rights or remedies, nor deprive either Party of its rights to institute and maintain any action or proceeding which it may deem necessary to protect, assert or enforce any such rights or remedies in the same or any subsequent default. 9.8 Rights of Limited Partners. Provided that City has been given the address for such notices, whenever City delivers any notice of default hereunder, City shall concurrently deliver a copy of such notice to Developer's limited partner(s)in accordance with Section 11.3. No notice of default given to Borrower shall be effective until the Investor receives such notice. The limited partner(s) shall have the same right as Developer to cure or remedy any default hereunder within the cure period provided to Developer, extended by sixty (60) days. Notwithstanding any default by Developer under this Agreement, City shall have no right to Final Loan Agreement I June 2015 Page 26 of 34 terminate this Agreement or exercise any remedies hereunder or under applicable law or take any other enforcement action hereunder unless City shall have first given the limited partners written notice of such default and the limited partners shall have failed to remedy such default or remove the general partner within the applicable cure period. ARTICLE X INDEMNITY AND INSURANCE 10.1 Indemnitv. Developer shall indemnify, defend(with counsel approved by City) and hold Indemnitees harmless from and against any and all Claims, including without limitation, Claims arising directly or indirectly, in whole or in part, as a result of or in connection with Developer's or Developer's contractors, subcontractors, agents or employees development, construction, improvement, operation, ownership or maintenance of the Project or the Property, or any part thereof or otherwise arising out of or in connection with Developer's performance under this Agreement. Developer's indemnification obligations under this Section 10.1 shall not extend to Claims resulting in whole or in part from Developer's adoption and/or utilization of the Points Preference System (provided however if any such claim is based in part on Developer's adoption and/or utilization of the Points Preference System, the exclusion to the Developer's indemnification obligation shall be limited to only the portion(s) of such claim based on Developer's adoption and/or utilization of the Points Preference System) or resulting solely from the gross negligence or willful misconduct of Indemnitees. It is further agreed that City does not and shall not waive any rights against Developer that they may have by reason of this indemnity and hold harmless agreement because of the acceptance by City, or the deposit with City by Developer, of any of the insurance policies described in this Agreement. City shall indemnify, defend, and hold Developer and its affiliates, officers, officials, employees, agents or representatives harmless from and against Claims by applicants for the Project housing or other potential aggrieved parties resulting in whole or in part from Developer's adoption and/or utilization of the Points Preference System to rank applicants. If any such claim is based in part on Developer's adoption and/or utilization of the Points Preference System, City's duty to indemnify, defend and hold harmless shall only extend to the portion(s) of such Claim based on Developer's adoption and/or utilization of the Points Preference System. The provisions of this Section 10.1 shall survive expiration or earlier termination of this Agreement. 10.2 Liability and Workers Compensation Insurance. (a) Prior to initiating work on the Project and continuing through the issuance of the final certificate of occupancy or equivalent for the Project, Developer and all contractors working on behalf of Developer on the Project shall maintain a commercial general liability policy in the amount of One Million Dollars ($1,000,000) each occurrence, Two Million Dollars ($2,000,000) annual aggregate, together with Three Million Dollars ($3,000,000) excess liability coverage, or such other policy limits as City may require in its reasonable discretion, including coverage for bodily injury, property damage,products, completed operations and contractual Final Loan Agreement I June 2015 Page 27 of 34 liability coverage. Such policy or policies shall be written on an occurrence basis and shall name the Indemnitees as additional insureds. (b) Until issuance of the final certificate of occupancy or equivalent for the Project, Developer and all contractors working on behalf of Developer shall maintain a comprehensive automobile liability coverage in the amount of One Million Dollars ($1,000,000), combined single limit including coverage for owned and non-owned vehicles and shall furnish or cause to be furnished to City evidence satisfactory to City that Developer and any contractor with whom Developer has contracted for the performance of work on the Property or otherwise pursuant to this Agreement carries workers' compensation insurance as required by law. Automobile liability policies shall name the Indemnitees as additional insureds. (c) Upon commencement of construction work and continuing until issuance of the final certificate of occupancy or equivalent for the Project, Developer and all contractors working on behalf of Developer shall maintain a policy of builder's all-risk insurance in an amount not less than the full insurable cost of the Project on a replacement cost basis naming City as loss payee. Such insurance shall include coverage for risks of direct physical loss or damage, excluding the perils of earthquake, flood, and earth movement. (d) Upon completion of construction, Developer shall maintain property insurance covering all risks of loss (other than earthquake and flood) for 100% of the replacement value of the Project with deductible, if any, in an amount acceptable to City, naming City as loss payee. (e) Companies writing the insurance required hereunder shall be licensed to do business in the State of California or shall be listed on the California Department List of Approved Surplus Line Insurers (LASLI). Insurance shall be placed with insurers with a current A.M. Best's rating of no less than A: VII. The Commercial General Liability and comprehensive automobile policies required hereunder shall name the Indemnitees as additional insureds. Builder's Risk and property insurance shall name City as loss payee as its interests may appear. (f) Prior to commencement of construction work, Developer shall furnish City with certificates of insurance in form acceptable to City evidencing the required insurance coverage and duly executed endorsements evidencing such additional insured status. The certificates shall contain a statement of obligation on the part of the carrier to notify City of any material adverse change, cancellation, termination or non-renewal of the coverage at least thirty (30) days in advance of the effective date of any such material adverse change, cancellation, termination or non-renewal. (g) If any insurance policy or coverage required hereunder is canceled or reduced, Developer shall, within fifteen (15) days after receipt of notice of such cancellation or reduction in coverage, but in no event later than the effective date of cancellation or reduction, file with City a certificate showing that the required insurance has been reinstated or provided through another insurance company or companies. Upon failure to so file such certificate, City may, without further notice and at its option,procure such insurance coverage at Developer's expense, and Developer shall promptly reimburse City for such expense upon receipt of billing from City. Final Loan Agreement I June 2015 Page 28 of 34 (h) Coverage provided by Developer shall be primary insurance and shall not be contributing with any insurance, or self-insurance maintained by City, and the policies shall so provide. The insurance policies shall contain a waiver of subrogation for the benefit of the City. Developer shall furnish the required certificates and endorsements to City prior to the commencement of construction of the Project, and shall provide City with certified copies of the required insurance policies upon request of City. ARTICLE XI MISCELLANEOUS PROVISIONS 11.1 No Brokers. Each Party warrants and represents to the other that no person or entity can properly claim a right to a real estate commission, brokerage fee, finder's fee, or other compensation with respect to the transactions contemplated by this Agreement. Each Party agrees to defend, indemnify and hold harmless the other Party from any claims, expenses, costs or liabilities arising in connection with a breach of this warranty and representation. The terms of this Section shall survive the expiration or earlier termination of this Agreement. 11.2 Enforced Delay; Extension of Times of Performance. Subject to the limitations set forth below,performance by either Party shall not be deemed to be in default, and all performance and other dates specified in this Agreement shall be extended where delays are due to: war, insurrection, strikes, lockouts, riots, floods, earthquakes, fires, casualties, acts of God, acts of the public enemy, epidemics, quarantine restrictions, freight embargoes, governmental restrictions or priority, litigation, including court delays, unusually severe weather, acts or omissions of the other Party, acts or failures to act of the City or any other public or governmental agency or entity (other than the acts or failures to act of City which shall not excuse performance by City), or any other cause beyond the affected Party's reasonable control. An extension of time for any such cause shall be for the period of the enforced delay and shall commence to run from the time of the commencement of the cause, if notice by the Party claiming such extension is sent to the other Party within thirty (30) days of the commencement of the cause and such extension is not rejected in writing by the other Party within ten (10) days of receipt of the notice. Neither Party shall unreasonably withhold consent to an extension of time pursuant to this Section. Times of performance under this Agreement may also be extended in writing by the mutual agreement of Developer and City (acting in the discretion of the City Manager unless he or she determines in his or her discretion to refer such matter to the City Council). 11.3 Notices. Except as otherwise specified in this Agreement, all notices to be sent pursuant to this Agreement shall be made in writing, and sent to the Parties at their respective addresses specified below or to such other address as a Party may designate by written notice delivered to the other Parties in accordance with this Section. All such notices shall be sent by: (i) personal delivery, in which case notice is effective upon delivery; (ii) certified or registered mail, return receipt requested, in which case notice shall be deemed delivered on receipt if delivery is confirmed by a return receipt; Final Loan Agreement I June 2015 Page 29 of 34 (iii) nationally recognized overnight courier, with charges prepaid or charged to the sender's account, in which case notice is effective on delivery if delivery is confirmed by the delivery service; (iv) facsimile transmission, in which case notice shall be deemed delivered upon transmittal,provided that(a) a duplicate copy of the notice is promptly delivered by first- class or certified mail or by overnight delivery, or(b) a transmission report is generated reflecting the accurate transmission thereof. Any notice given by facsimile shall be considered to have been received on the next business day if it is received after 5:00 p.m. recipient's time or on a nonbusiness day. City: City of Dublin 100 Civic Plaza Dublin, CA 94568 Attention: City Manager Facsimile: (925) 833-6651 Borrower: Dublin Family, L.P. c/o Eden Development, Inc. 22645 Grand Street Hayward, CA 94541-5031 Attention: President Facsimile: (510) 582-6523 With copy to: [to be provided] 11.4 Attorneys' Fees. If either Party fails to perform any of its obligations under this Agreement, or if any dispute arises between the Parties concerning the meaning or interpretation of any provision hereof, then the prevailing Party in any proceeding in connection with such dispute shall be entitled to the costs and expenses it incurs on account thereof and in enforcing or establishing its rights hereunder, including, without limitation, court costs and reasonable attorneys' fees and disbursements. 11.5 Waivers, Modification. No waiver of any breach of any covenant or provision of this Agreement shall be deemed a waiver of any other covenant or provision hereof, and no waiver shall be valid unless in writing and executed by the waiving Party. An extension of time for performance of any obligation or act shall not be deemed an extension of the time for performance of any other obligation or act, and no extension shall be valid unless in writing and executed by the Party granting the extension. This Agreement may be amended or modified only by a written instrument executed by the Parties. 11.6 Binding on Successors. Subject to the restrictions on Transfers set forth in Article VI, this Agreement shall bind and inure to the benefit of the Parties and their respective permitted successors and assigns. Any reference in this Agreement to a specifically named Party shall be deemed to apply to any permitted successor and assign of such Party who has acquired an interest in compliance with this Agreement or under law. Final Loan Agreement I June 2015 Page 30 of 34 11.7 Survival. All representations made by Developer hereunder and Developer's obligations pursuant to Sections 3.14, 3.17, 3.18, 8.2, 10.1, and 11.1 shall survive the expiration or termination of this Agreement. 11.8 Construction. The section headings and captions used herein are solely for convenience and shall not be used to interpret this Agreement. The Parties acknowledge that this Agreement is the product of negotiation and compromise on the part of both Parties, and the Parties agree, that since both Parties have participated in the negotiation and drafting of this Agreement, this Agreement shall not be construed as if prepared by one of the Parties, but rather according to its fair meaning as a whole, as if both Parties had prepared it. 11.9 Action or Approval. Whenever action and/or approval by City is required under this Agreement, the City Manager or his or her designee may act on and/or approve such matter unless specifically provided otherwise, or unless the City Manager determines in his or her discretion that such action or approval requires referral to City Council for consideration; provided, however, that the City Manager or his/her authorized designee shall not have the authority to increase the Loan amount. 11.10 Entire Agreement. This Agreement, including Exhibits A through F attached hereto and incorporated herein by this reference, together with the other City Documents contains the entire agreement between the Parties with respect to the subject matter hereof, and supersedes all prior written or oral agreements, understandings, representations or statements between the Parties with respect to the subject matter hereof, including without limitation, any commitment letter issued by City with respect to City financing for the Project. 11.11 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be an original and all of which taken together shall constitute one instrument. The signature page of any counterpart may be detached therefrom without impairing the legal effect of the signature(s) thereon provided such signature page is attached to any other counterpart identical thereto having additional signature pages executed by the other Party. Any executed counterpart of this Agreement may be delivered to the other Party by facsimile and shall be deemed as binding as if an originally signed counterpart was delivered. 11.12 Severability. If any term,provision, or condition of this Agreement is held by a court of competent jurisdiction to be invalid or unenforceable, the remainder of this Agreement shall continue in full force and effect unless an essential purpose of this Agreement is defeated by such invalidity or unenforceability. 11.13 No Third Party Beneficiaries. Nothing contained in this Agreement is intended to or shall be deemed to confer upon any person, other than the Parties and their respective successors and assigns, any rights or remedies hereunder; provided however, Developer's limited partners shall be third party beneficiaries with respect to notice and cure rights granted the limited partners in this Agreement. 11.14 Parties Not Co-Venturers. Nothing in this Agreement is intended to or shall establish the Parties as partners, co-venturers, or principal and agent with one another. Final Loan Agreement I June 2015 Page 31 of 34 11.15 Non-Liability of Officials, Directors, Employees and Agents. No officer, official, employee or agent of City shall be personally liable to Developer or its successors in interest in the event of any default or breach by City or for any amount which may become due to Developer or its successors in interest pursuant to this Agreement. No officer, director, employee or agent of Developer shall be personally liable to the City or its successors in interest in the event of any default or breach by Developer or for any amount which may become due to the City or its successors in interest pursuant to this Agreement. 11.16 Time of the Essence, Calculation of Time Periods. Time is of the essence for each condition, term, obligation and provision of this Agreement. Unless otherwise specified, in computing any period of time described in this Agreement, the day of the act or event after which the designated period of time begins to run is not to be included and the last day of the period so computed is to be included, unless such last day is not a business day, in which event the period shall run until the next business day. The final day of any such period shall be deemed to end at 5:00 p.m., local time at the Property. For purposes of this Agreement, a "business day" means a day that is not a Saturday, Sunday, a federal holiday or a state holiday under the laws of California. 11.17 Governing Law, Venue. This Agreement shall be governed by and construed in accordance with the laws of the State of California without regard to principles of conflicts of laws. Any action to enforce or interpret this Agreement shall be filed in the Superior Court of Alameda County, California or in the Federal District Court for the Northern District of California. 11.18 City Status. Developer recognizes and agrees that while the City has entered into this Agreement governing the City's Loan to the Developer, the City is not a commercial lending institution, but a municipal corporation exercising its authority to protect the public health, safety and welfare. Any duties or obligations which a commercial lending institution may have to Developer shall not apply to this transaction except as set forth herein, or in the Deed of Trust, the Note, or as otherwise required by law. SIGNATURES ON FOLLOWING PAGE. Final Loan Agreement I June 2015 Page 32 of 34 IN WITNESS WHEREOF, the Parties have entered into this Agreement effective as of the date first written above. CITY City of Dublin, a municipal corporation By: Christopher Foss, City Manager Attest: City Cleric Approved as to form: City Attorney DEVELOPER Dublin Family, L.P., a California limited partnership By: Dublin Family LLC, a California limited liability company Its: General Partner By: Eden Development, Inc., a California nonprofit public benefit corporation Its: Sole Member/Manager By: Linda Mandolin, President Final Loan Agreement I June 2015 Page 33 of 34 Exhibit A LEGAL DESCRIPTION OF PROPERTY (Attach legal description.) Exhibit B FORM OF CONSTRUCTION/PERMANENT NOTE (Attach form of Construction/Permanent Note.) Exhibit C FORM OF CCI ASSIGNMENT AGREEMENT (Attach form of CCI Assignment Agreement.) Exhibit D FORM OF MODIFICATION TO DEED OF TRUST (Attach form of Modification to Deed of Trust .) Exhibit E FINANCING PLAN (Attach Financing Plan.) 2450396.2 Final Loan Agreement June 2015 Page 34 of 34 Exhibit A LEGAL DESCRIPTION OF PROPERTY Real property in the City of Dublin, County of Alameda, State of California, described as follows: PARCEL D, AS SHOWN ON PARCEL MAP 2621, FILED DECEMBER 20, 1978 IN BOOK 107, PAGE 50 OF MAPS, ALAMEDA COUNTY RECORDS. EXCEPTING THEREFROM, THAT PORTION CONVEYED IN THE DEED TO THE COUNTY OF ALAMEDA, A POLITICAL SUBDIVISION OF THE STATE OF CALIFORNIA, RECORDED FEBRUARY 14, 2004 AS INSTRUMENT NO. 2002-073439 OF OFFICIAL RECORDS. APN: 941-1500-032-02 Final Loan Agreement I June 2015 1 Legal Description Exhibit A PROMISSORY NOTE (Construction/Permanent Loan) (Dublin Veterans Family Housing Project) $6,400,000.00 Dublin, California , 2015 FOR VALUE RECEIVED, Dublin Family, L.P., a California limited partnership ("Borrower") promises to pay to the City of Dublin, a municipal corporation ("City"), in lawful money of the United States of America, the principal sum of Six Million, Four Hundred Thousand Dollars ($6,400,000) or so much thereof as may be advanced by City from time to time pursuant to the Loan Agreement referred to below, in the manner provided below. Interest shall accrue on the outstanding principal balance of this Note at the simple rate of [three percent (3%)]* per year from the date of disbursement until this Note is paid in full. [*Note. See #14 of Term Sheet. If prior to the execution of this Note, which will be just prior to the admission of the investor limited partner and the construction loan closing, it is demonstrated by Eden Housing that a reduction or elimination of the interest rate on the City Loan is required to keep the investor limited partner's capital account from going negative during the Low-Income Housing Tax Credit period, the City Manager shall have the right to adjust the interest rate without additional Council approval, provided City staff has made a determination that such an interest rate change is required in order to keep the project financially feasible.] This Promissory Note (this "Note") has been executed and delivered pursuant to and in accordance with that certain Loan Agreement, dated as of the date hereof, and executed by and between Borrower and City (the " Loan Agreement"), and is subject to the terms and conditions of the Loan Agreement which is by this reference incorporated herein and made a part hereof. Capitalized terms used but not defined herein shall have the meaning ascribed to such terms in the Loan Agreement. This Note is secured by a Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing, as amended by that Modification to Deed of Trust, dated as of the date hereof ("Deed of Trust") executed by Borrower for the benefit of City and encumbering the property described therein and by the Assignment Agreement dated as of the date hereof. City shall be entitled to the benefits of the security provided by the Deed of Trust and the Assignment Agreement and shall have the right to enforce the covenants and agreements contained herein, in the Loan Agreement, the Deed of Trust, and the Assignment Agreement. Final Construction Loan I June 2015 1 Promissory Note Page 1 of 10 Exhibit B 1. PAYMENTS 1.1 Annual Payments. Commencing on the May 1St following the issuance of the first Certificate of Occupancy, and continuing every May 1St thereafter until the full repayment of the Loan or the Maturity Date (defined below), Borrower shall pay to the City, the City's Proportionate Share of Residual Receipts, as defined below. Repayments shall be credited first to interest, then to principal. Interest that has accrued for which Residual Receipts are not available in a given year shall be deferred to the following year. (a) The following special definitions shall apply for purposes of this Note: i. "City's Proportionate Share of Residual Receipts" shall mean the City's proportion of the "Lenders' Share of Residual Receipts" (defined below) payable to the City, which shall be the sum of principal amount of the Loan actually disbursed divided by the sum of the aggregate original principal amounts actually disbursed of all loans approved by the City as part of the Financing and payable on a "residual receipts," which may also be called "net cash flow," "surplus cash," or similar terms as used in the other loan approved by the City. The "Lenders' Share of Residual Receipts" shall mean sixty percent (60%) of the Residual Receipts with the Borrower entitled to retain forty percent (40%) of the Residual Receipts. ii. "Annual Operating Expenses" with respect to a particular calendar year shall mean the following costs reasonably and actually incurred for operation and maintenance of the Development to the extent that they are consistent with an annual independent audit performed by a certified public accountant using generally accepted accounting principles: property taxes and assessments imposed on the Development; debt service currently due on a non-optional basis (excluding debt service due from residual receipts or surplus cash of the Development) on loans associated with development of the Development; property management fees and reimbursements, not to exceed fees and reimbursements which are standard in the industry; partnership management fees and asset management fees including all fees paid to the Permitted Limited Partner, if any, in the amount of Thirty-Three Thousand Five Hundred Dollars ($33,500) increasing by three percent (3%) annually during the fifteen year Tax Credit compliance period and after the expiration of the fifteen year compliance period, in the amount of Twenty-Five Thousand Dollars ($25,000) which amount will increase by three percent (3%) annually commencing on the first anniversary of the expiration of the tax credit compliance period, and such other reasonable fees as may be approved by the City at the time the tax credit syndication occurs; organizational costs (e.g., annual franchise tax payments) and costs associated with accounting, tax preparation and legal fees of Borrower incurred in the ordinary cost of business; premiums for property damage and liability insurance; utility services not paid for directly by tenants, including water, sewer, and trash collection; maintenance and repair; any annual license or certificate of occupancy fees required for operation of the Development; security services; advertising and marketing; cash deposited into reserves for capital replacements of the Development in an amount required in connection with the Final Construction Loan I June 2015 1 Promissory Note Page 2 of 10 Exhibit B permanent financing and the tax credit syndication (or any greater amount approved by the City); cash deposited into a reasonable operating reserve required in connection with the permanent financing and the tax credit syndication (or any greater amount approved by the City); payment of any previously unpaid portion of the Developer Fee (without interest) not exceeding a cumulative developer fee in the maximum amount of Two Million Five Hundred Thousand Dollars ($2,500,000); on-site service provider fees and reimbursements for tenant social services at the Development; extraordinary operating costs specifically approved by the City; payments of deductibles in connection with casualty insurance claims not normally paid from reserves, the amount of uninsured losses actually replaced, repaired or restored, and not normally paid from reserves, and other ordinary and reasonable operating expenses not listed above. Annual Operating Expenses shall not include the following: depreciation, amortization, depletion or other non-cash expenses; any amount expended from a reserve account; and any capital cost with respect to the Development, as determined by the accountant for the Development. iii. "Gross Revenue" with respect to a particular calendar year shall mean all revenue, income, receipts, and other consideration actually received from operation and leasing of the Development. Gross Revenue shall include, but not be limited to: all rents, fees and charges paid by tenants, Section 8 payments or other rental subsidy payments received for the dwelling units, deposits forfeited by tenants, all cancellation fees, price index adjustments and any other rental adjustments to leases or rental agreements; proceeds from vending and laundry room machines; the proceeds of business interruption or similar insurance; the proceeds of casualty insurance not used to rebuild the Development; and condemnation awards for a taking of part or all of the Development for a temporary period. Gross Revenue shall not include tenants' security deposits, loan proceeds, capital contributions or similar advances. iv. "Residual Receipts" in a particular calendar year shall mean: the amount by which Gross Revenue exceeds Annual Operating Expenses. In connection with each payment of the City's Proportionate Share of Residual Receipts, the Borrower shall furnish to the City an audited statement duly certified by an independent firm of certified public accountants approved by the City, setting forth in reasonable detail the computation and amount of City's Proportionate Share of Residual Receipts during the preceding calendar year. Borrower shall provide the City with any other documentation reasonably requested by the City to substantiate the amount of the City's Proportionate Share of Residual Receipts. 1.2 One-Time Special Prepayment from Excess Proceeds. Within ten (10) business days after Borrower's receipt of its limited partner(s)' capital contribution following the issuance of the IRS Form 8609 for the Development, Borrower shall pay to the City as a reduction of the outstanding principal balance of the Loan, a special repayment from a portion of Excess Proceeds, if any, which shall be shared on a prorata basis with other Project lenders requiring prepayment from Excess Proceeds. "Excess Proceeds" shall mean the sum of permanent financing for the Project Final Construction Loan I June 2015 1 Promissory Note Page 3 of 10 Exhibit B (including equity and mortgage debt) less the sum of actual uses as shown on the final cost certificate for the Project. Deferred developer fees, required reserve accounts and other Project costs may be paid with a portion of the Excess Proceeds. 1.3 Payment in Full. All principal and interest on the Loan shall be due upon the earliest of: (a) the occurrence of an Event of Default for which the City exercises its right to cause the Loan indebtedness to become immediately due and payable, or for which the Predevelopment Loan indebtedness is automatically specified to become immediately due and payable pursuant to applicable subsections of Section 2.1 below; or (b) the fifty-fifth (55th) anniversary of the date of the issuance of the Certificate of Occupancy or its equivalent for the Development. 1.4 DUE ON SALE. The entire unpaid principal balance and all interest and other sums accrued hereunder shall be due and payable upon the sale, conveyance or other transfer of the Property or any part thereof or interest therein absent City's prior written consent, provided however, City will not withhold consent to a transfer of the Property to a limited partnership in which Borrower serves as general partner. Without limiting the generality of the foregoing, this Note shall not be assumable without City's prior written consent, which consent may be granted or denied in City's sole discretion; provided however, City will not withhold consent to the assumption of this Note by a limited partnership in which Borrower serves as general partner. 1.5 PREPAYMENT. Borrower may, without premium or penalty, at any time and from time to time, prepay all or any portion of the outstanding principal balance due under this Note. Prepayments shall be applied first to any unpaid late charges and other costs and fees then due and then to principal. In no event shall any amount due under this Note become subject to any rights of offset, deduction or counterclaim on the part of Borrower. 1.6 MANNER OF PAYMENT. All payments on this Note shall be made to City at 100 Civic Plaza, Dublin, CA 94568 or such other place as City shall designate to Borrower in writing, or by wire transfer of immediately available funds to an account designated by City in writing. 2. DEFAULTS 2.1. EVENTS OF DEFAULT. The occurrence of any one or more of the following events shall constitute an event of default hereunder ("Event of Default"): (a) Borrower fails to pay when due any sum payable hereunder and such failure continues for ten (10) days after City notifies Borrower thereof in writing. Final Construction Loan I June 2015 1 Promissory Note Page 4 of 10 Exhibit B (b) Borrower fails to use Loan proceeds in accordance with the Loan Agreement, fails to use Loan proceeds in accordance with the applicable request for disbursement and does not cure such failure within thirty (30) days following written notice from City. (c) Any representation or warranty contained in the Loan Agreement, the Deed of Trust, the Assignment Agreement, Regulatory Agreement or any certificate furnished in connection therewith, or in connection with any request for disbursement of Loan proceeds proves to have been false or misleading in any material adverse respect when made and continues to be materially adverse to the City. (d) Borrower fails to maintain insurance as required pursuant to the Loan Agreement and Borrower fails to cure such default within ten (10) days. (e) Pursuant to or within the meaning of the United States Bankruptcy Code or any other federal or state law relating to insolvency or relief of debtors ("Bankruptcy Law"), Borrower: (i) commences a voluntary case or proceeding; (ii) consents to the entry of an order for relief against Borrower in an involuntary case; (iii) consents to the appointment of a trustee, receiver, assignee, liquidator or similar official for Borrower; (iv) makes an assignment for the benefit of its creditors; or (v) admits in writing its inability to pay its debts as they become due. (f) A court of competent jurisdiction enters an order or decree under any Bankruptcy Law that: (i) is for relief against Borrower in an involuntary case, (ii) appoints a trustee, receiver, assignee, liquidator or similar official for Borrower or substantially all of such entity's assets, (iii) orders the liquidation of Borrower, or (iv) issues or levies a judgment, writ, warrant of attachment or similar process against the Property or the Project, and in each case the order or decree is not released, vacated, dismissed or fully bonded within 60 days after its issuance. (g) An Event of Default on the part of Borrower is declared under the Loan Agreement, Regulatory Agreement, or the Deed of Trust, or Borrower has defaulted under the Assignment Agreement and such default remains uncured beyond the expiration of any applicable cure period. (h) Borrower sells, conveys, assigns, encumbers, pledges or otherwise transfers the Property or any part thereof or interest therein absent City's prior written consent, provided however, City will not withhold consent to a transfer of the Property to a limited partnership in which Borrower serves as general partner. (i) Subject to Borrower's right to contest the following charges pursuant to the Deed of Trust, Borrower fails to pay prior to delinquency taxes or assessments due on the Property or fails to pay when due any other charge that may result in a lien on the Property, and Borrower fails to cure such default within ninety (90) days of the date of delinquency, but in all events prior to the Final Construction Loan I June 2015 1 Promissory Note Page 5 of 10 Exhibit B date upon which the holder of any lien has the right to pursue foreclosure thereof; (j) A default arises under any loan secured by a mortgage, deed of trust or other security instrument recorded against the Property and remains uncured beyond any applicable cure period such that the holder of such security instrument has the right to accelerate repayment of such loan. (k) The Borrower does not commence construction of the Project on the Property in accordance with Section 3.8 of the Loan Agreement. 2.2 REMEDIES. The rights and remedies of City under this Note shall be cumulative and not alternative. Upon the occurrence of an Event of Default hereunder, City may, at its option: (i) by written notice to Borrower declare the entire unpaid principal balance of this Note, together with all accrued interest thereon and all sums due hereunder, immediately due and payable regardless of any prior forbearance, (ii) exercise any and all rights and remedies available to it under law or equity, and (iii) exercise any and all rights and remedies available to City pursuant to the Loan Agreement, the Deed of Trust (including without limitation the right to pursue judicial or nonjudicial foreclosure), Regulatory Agreement or the Assignment Agreement. Borrower shall pay all reasonable costs and expenses incurred by or on behalf of City including, without limitation, reasonable attorneys' fees, incurred in connection with City's enforcement of this Note and the exercise of any or all of its rights and remedies hereunder and all such sums shall constitute an indebtedness secured by the Deed of Trust. 2.3 DEFAULT RATE. Upon the occurrence of an Event of Default, interest shall automatically accrue without notice at a rate equal to the lesser of the maximum rate permitted by law or ten percent (10%) per annum (the "Default Rate"). When Borrower is no longer in default, the Default Rate shall no longer apply, and the interest rate shall once again be the rate specified in the first paragraph of this Note. The imposition or acceptance of the Default Rate shall in no event constitute a waiver of a default under this Note or prevent City from exercising any of its other rights or remedies. 3. MISCELLANEOUS 3.1. WAIVER; AMENDMENT. No waiver by City of any right or remedy under this Note shall be effective unless in a writing signed by City. Neither the failure nor any delay in exercising any right, power or privilege under this Note will operate as a waiver of such right, power or privilege, and no single or partial exercise of any such right, power or privilege by City will preclude any other or further exercise of such right, power or privilege or the exercise of any other right, power or privilege. No waiver that may be given by City will be applicable except in the specific instance for which it is given. No notice to or demand on Borrower will be deemed to be a waiver of any obligation of Borrower or of the Final Construction Loan I June 2015 1 Promissory Note Page 6 of 10 Exhibit B right of City to take further action without notice or demand as provided in this Note. To the maximum extent permitted by applicable law, Borrower hereby waives presentment, demand, protest, notices of dishonor and of protest and all defenses and pleas on the grounds of any extension or extensions of the time of payment or of any due date under this Note, in whole or in part, whether before or after maturity and with or without notice. There shall be no amendment to or modification of this Note except by written instrument executed by Borrower and City. 3.2. NOTICES. Any notice required or permitted to be given hereunder shall be given in accordance with Section 11.3 of the Loan Agreement. 3.3. SEVERABILITY. If any provision in this Note is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Note will remain in full force and effect. Any provision of this Note held invalid or unenforceable only in part or degree will remain in full force and effect to the extent not held invalid or unenforceable. 3.4 GOVERNING LAW; VENUE. This Note shall be construed and enforced in accordance with the laws of the State of California without regard to principles of conflicts of law. Any legal action filed in connection with this Note shall be filed and heard in the Superior Court of Alameda County, California, or in the Federal District Court for the Northern District of California. 3.5 PARTIES IN INTEREST. This Note shall bind Borrower and its successors and assigns and shall accrue to the benefit of City and its successors and assigns. 3.6 SECTION HEADINGS, CONSTRUCTION. The headings of Sections in this Note are provided for convenience only and will not affect its construction or interpretation. 3.7 RELATIONSHIP OF THE PARTIES. The relationship of Borrower and City under this Note is solely that of borrower and lender, and the Loan evidenced by this Note and secured by the Deed of Trust and the Assignment Agreement will in no manner make City the partner or joint venturer of Borrower. 3.8 TIME IS OF THE ESSENCE. Time is of the essence with respect to every provision of this Note. 3.9 NON-RECOURSE. Except as expressly provided in this Section 3.9, Borrower shall have no personal liability for payment of the principal of, or interest on, this Note, and the sole recourse of City with respect to the payment of the principal of, and interest on, this Note shall be to the Property (as defined in the Deed of Trust), the Assigned Documents (as defined in the Assignment Agreement) and any other collateral held by City as security for this Note; provided however, nothing contained in the foregoing limitation of liability shall: Final Construction Loan I June 2015 1 Promissory Note Page 7 of 10 Exhibit B (A) impair the enforcement against all such security for this Note of all the rights and remedies of the City under the Deed of Trust, the Assignment Agreement, , and any financing statements City files in connection with this Note, as each of the foregoing may be amended, modified, or restated from time to time; (B) impair the right of City to bring a foreclosure action, an action for specific performance or other appropriate action or proceeding to enable City to enforce and realize upon the Property under the Deed of Trust, the Assignment Agreement, the interest in the Assigned Documents created thereby and any other collateral given to City in connection with the indebtedness evidenced by this Note, and to name the Borrower as party defendant in any such action; (C) be deemed in any way to impair the right of the City to assert the unpaid principal amount of the Loan as a demand for money within the meaning of Section 431.70 of the California Code of Civil Procedure or any successor provision thereto; (D) constitute a waiver of any right which City may have under any bankruptcy law to file a claim for the full amount of the indebtedness owed to City under this Note or to require that the Property (as defined in the Deed of Trust) and the Assigned Documents shall continue to secure all of the indebtedness owed to City in accordance with this Note; or (E) limit or restrict the ability of City to seek or obtain a judgment against Borrower to enforce against Borrower to: (1) recover under Sections 3.18, 8.2 and 10.1 of the Loan Agreement (pertaining to Borrower's indemnification obligations), or (2) recover from Borrower compensatory damages, as well as other costs and expenses incurred by City (including without limitation attorney's fees and expenses), arising as a result of the occurrence of any of the following: (a) any fraud or material misrepresentation on the part of the Borrower, or any officer, director or authorized representative of Borrower in connection with any request for Loan Proceeds, or creation of the Loan, or in the Loan Agreement, the Deed of Trust the Assignment Agreement, or in connection with any request for any action or consent by City in connection with the Loan or the use of Loan Proceeds; (b) the material misapplication of Loan Proceeds; (c) any failure to maintain insurance on the Property and the Project as required pursuant to the Loan Agreement; Final Construction Loan I June 2015 1 Promissory Note Page 8 of 10 Exhibit B (d) any failure to pay taxes, assessments or other charges which may become liens on the Property; (e) the presence of Hazardous Materials on the Property or other violation of the Borrower's obligations under Section 7.11 of the Deed of Trust (pertaining to environmental matters); (f) the occurrence of any act or omission of Borrower that results in waste to or of the Property or the improvements to be constructed thereon (the "Improvements") and which has a material adverse effect on the value of the Property or the Improvements; (g) the removal or disposal of any personal property or fixtures or the retention of rents, insurance proceeds, or condemnation awards in violation of the Deed of Trust; and (h) the material misapplication of the proceeds of any insurance policy or award resulting from condemnation or the exercise of the power of eminent domain or by reason of damage, loss or destruction to any portion of the Property. (i) the failure of Borrower to pay all amounts payable under this Note in full if Borrower Transfers the Property in violation of the Loan Agreement. SIGNATURE(S) ON FOLLOWING PAGE(S). Final Construction Loan I June 2015 1 Promissory Note Page 9 of 10 Exhibit B IN WITNESS WHEREOF, Borrower has executed and delivered this Note as of the date first written above. BORROWER: Dublin Family, L.P. By: Dublin Family LLC, a California limited liability company, its general partner By: Eden Development, Inc., a California nonprofit public benefit corporation, its sole member/manager By: Name: Title: 2443934. 9 Final Construction Loan I June 2015 1 Promissory Note Page 10 of 10 Exhibit B North American Title Company Order/Escrow No. 54605- APN: RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: City of Dublin 100 Civic Plaza Dublin, CA 94568 Attn: City Cleric EXEMPT FROM RECORDING FEES PER GOVERNMENT CODE§§6103,27383 Space above this line for Recorder's use. ASSIGNMENT AND ASSUMPTION OF CITY DOCUMENTS THIS ASSIGNMENT AND ASSUMPTION OF CITY DOCUMENTS (this "Agreement")is dated as of , 2015 , by and between Corona Crescent, Inc., a California nonprofit public benefit corporation ("Assignor") and Dublin Family, L.P., a California limited partnership ("Assignee")with reference to the following facts: A. Assignor has engaged in certain predevelopment activities relating to the property located at 6707 Golden Gate Drive in Dublin and more particularly described in Exhibit A attached hereto (the "Property")in connection with the development of a 66-unit affordable rental development for very low and low income households primarily for veterans and one resident manager (the " Project"). In connection with the Project, the City of Dublin, a municipal corporation ("City") has provided certain financing to Assignor, and Assignor has executed certain agreements for the benefit of City in connection with such financing. B. Assignee is affiliated with Assignor and was formed to construct, own and operate the Project, and in order for Assignee to do so, Assignor desires to assign to Assignee and Assignee desires to assume all rights and obligations of Assignor pursuant to the documents listed below in Section 1. NOW, THEREFORE, in consideration of the mutual promises of the parties and for other good and valuable consideration, the receipt and sufficiency of which are acknowledged, the parties mutually agree as follows: 1. Assignment by Assignor. Assignor hereby assigns to Assignee all of Assignor's right, title, interest and obligations under the following documents (collectively, the "Assigned Agreements"): i. That certain unrecorded Predevelopment Loan Agreement dated as of 2015, executed by and between City and Assignor; Final Construction Loan I June 2015 1 Assign.of Agmts Page 1 of 5 Exhibit C ii. That certain unrecorded Predevelopment Promissory Note dated as of , 2015, executed by Assignor for the benefit of City in the face amount of One Million Four Hundred Thousand Dollars ($1,400,000); iii. That certain Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing dated as of , 2015, executed by Assignor as Trustor for the benefit of City and recorded in the Official Records of Alameda County on , 2015 as Instrument No. 2015- iv. That certain unrecorded Assignment of Agreements, Plans and Specifications dated as of , 2015, executed by Assignor for the benefit of City; V. That certain Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants dated as of , 2015, executed by and between Assignor and the City and recorded in the Official Records of Alameda County on , 2015 as Instrument No. 2015- (the "Regulatory Agreement"); and vi. That certain Option Agreement dated February 9, 2015 in which Assignor granted to the City the option to purchase the Property as evidenced by that Memorandum of Option recorded in the Official Records of Alameda County on February 13, 2015 as Instrument No. 2015-043712 (the "Option Agreement"). 2. Acceptance of Assignment. Assignee hereby accepts the assignment described in Section 1, and agrees to perform all of the obligations imposed under the Assigned Agreements. 3. Payment of Obligations. All amounts due from Assignor under the Assigned Agreements shall be paid directly by Assignee, and Assignee shall reimburse Assignor for any amounts previously paid by Assignor under the Assigned Agreements. 4. Representation. Assignor represents and warrants that it has not previously assigned, pledged or otherwise transferred any of its rights under the Assigned Agreements, except to Assignor's lenders as part of the lenders' security for loans made to Assignor. 5. Effective Date. The assignment set forth in Section 1 above shall be effective as of the date this Assignment is recorded in Alameda County Official Records. 6. Counterparts. This Assignment may be executed in counterparts, each of which shall be an original and all of which counterparts taken together shall constitute one and the same instrument. Final Construction Loan I June 2015 1 Assign.of Agmts Page 2 of 5 Exhibit C IN WITNESS WHEREOF, the parties have executed this Assignment as of the date first written above. ASSIGNOR: CORONA CRESCENT, INC., a California nonprofit public benefit corporation By: Linda Mandolin, President ASSIGNEE: DUBLIN FAMILY, L.P., a California limited partnership By: Dublin Family LLC, a California limited liability company, its general partner By: Eden Development, Inc., a California nonprofit public benefit corporation, its member/manager By: Linda Mandolin, President Acknowledgement and Consent The City of Dublin, a municipal corporation hereby acknowledges and consents to the assignment and assumption of the Assigned Agreements as described above. City of Dublin, a municipal corporation By: Christopher Foss, City Manager Attest: City Clerk Approved as to form: City Attorney Final Construction Loan I June 2015 1 Assign.of Agmts Page 3 of 5 Exhibit C STATE OF CALIFORNIA ) COUNTY OF ALAMEDA ) On , 20_, before me, (here insert name and title of the officer), personally appeared , 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 (Seal) STATE OF CALIFORNIA ) COUNTY OF ALAMEDA ) On , 20_, before me, (here insert name and title of the officer), personally appeared , 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 (Seal) Final Construction Loan I June 2015 1 Assign.of Agmts Page 4 of 5 Exhibit C Exhibit A PROPERTY (Attach legal description.) Final Construction Loan I June 2015 1 Assign.of Agmts Page 5 of 5 Exhibit C RECORDING REQUESTED BY North American Title Company Escrow No. 54605- APN: 941-1500-032-02 AND WHEN RECORDED MAIL TO: City of Dublin 100 Civic Plaza Dublin, CA 94568 Attn: City Cleric EXEMPT FROM RECORDING FEES PER GOVERNMENT CODE§§6103,27383 MODIFICATION TO DEED OF TRUST, SECURITY AGREEMENT AND FIXTURE FILING (Construction and Permanent Loan) This First Modification to Deed of Trust, Security Agreement and Fixture Filing (the "Modification")is made as of , 2015 between DUBLIN FAMILY, L.P., a California limited partnership ("Trustor"), and the CITY OF DUBLIN, a municipal corporation ('Beneficiary"). Trustor and Beneficiary are hereafter collectively referred to as the "Parties." Capitalized terms used without definition in this Modification shall have the meaning ascribed to such terms in the Existing Deed of Trust(defined below). RECITALS A. For the benefit of Beneficiary, Corona Crescent, Inc., a California nonprofit public benefit corporation ("CCI") executed that certain Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing dated as of , 2015, and recorded in the Official Records of Alameda County, California ("Official Records") on , 2015 as Instrument No. (the "Existing Deed of Trust"). B. Pursuant to that certain Assignment and Assumption of City Documents ("Assignment Agreement") dated as of , 2015, executed by and between CCI and Trustor, acknowledged by Beneficiary, and recorded in the Official Records substantially concurrently herewith, CCI assigned its rights and obligations under the Existing Deed of Trust and certain other agreements relating to the Secured Obligations, including without limitation, the promissory note secured by the Existing Deed of Trust, to Trustor, and Trustor assumed such rights and obligations. Final Construction Loan I June 2015 1 Form of DOT Page 1 of 9 Exhibit D C. The obligations secured by the Existing Deed of Trust have been modified, and Trustor and Beneficiary have agreed to amend the Existing Deed of Trust to accurately reflect the obligations secured thereby. D. Trustor has entered into that certain Loan Agreement dated as of (as amended, restated, supplemented, or otherwise modified from time to time, the "Loan Agreement")between Trustor, as borrower, and Beneficiary, as lender,pursuant to which Beneficiary has agreed to make a loan to Trustor in the principal amount of Six Million, Four Hundred Thousand Dollars ($6,400,000) (the "Loan") evidenced by that Promissory Note (Construction/Permanent Loan) dated as of this Modification in the principal amount $6,400,000 (the "Note"). E. The above defined Loan Agreement supersedes and replaces that Predevelopment Loan Agreement dated as of , 2015 between CCI which was assigned to Trustor, as borrower, and Beneficiary, pursuant to which Beneficiary made a predevelopment loan to CCI which was assigned to Trustor in the amount of$1,400,000 evidenced by that Predevelopment Secured Promissory Note dated as of signed by CCI and assigned to Trustor in the principal amount of$1,400,000, which has been cancelled and replaced by the above defined Note. F. As a condition precedent to the making of the Loan, Beneficiary has required that Trustor enter into this Modification in order for that Existing Deed of Trust originally securing Trustor's obligations to pay the predevelopment loan shall now be modified to secure Trustor's obligation to pay the increased indebtedness evidenced by the above defined Loan Agreement and Note in the amount of$6,400,000.00. NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are acknowledged, the parties hereto agree as follows: AGREEMENT 1. The reference to the Note and Loan Agreement in the definition of Secured Obligation in Section 2 of the Deed of Trust shall mean the Note and Loan Agreement defined in Recital D above. 2. The real property described in the Existing Deed of Trust and Exhibit A attached hereto shall remain subject to the lien, charge or encumbrance of the Existing Deed of Trust and nothing herein contained or done pursuant hereto shall affect or be construed to affect the liens, charges or encumbrances of the Existing Deed of Trust, or the priority thereof over other liens, charges or encumbrances, or to release or affect the liability of any party who may now or hereafter be liable under or on account of the Loan Agreement, the Note, and/or the Existing Deed of Trust. Final Construction Loan I June 2015 1 Form of DOT Page 2 of 9 Exhibit D 3. All notices to be sent pursuant to the Existing Deed of Trust as modified by this Modification shall be made in writing, and sent to the Parties at their respective addresses specified below or to such other address as a Party may designate by written notice delivered to the other Parties in accordance with this Section. All such notices shall be sent by: (i) personal delivery, in which case notice is effective upon delivery; (ii) certified or registered mail, return receipt requested, in which case notice shall be deemed delivered on receipt if delivery is confirmed by a return receipt; (iii) nationally recognized overnight courier, with charges prepaid or charged to the sender's account, in which case notice is effective on delivery if delivery is confirmed by the delivery service; (iv) facsimile transmission, in which case notice shall be deemed delivered upon transmittal,provided that(a) a duplicate copy of the notice is promptly delivered by first-class or certified mail or by overnight delivery, or(b) a transmission report is generated reflecting the accurate transmission thereof. Any notice given by facsimile shall be considered to have been received on the next business day if it is received after 5:00 p.m. recipient's time or on a nonbusiness day. Beneficiary: City of Dublin 100 Civic Plaza Dublin, CA 94568 Attention: City Manager Facsimile: (925) 833-6651 Trustor: Dublin Family, L.P. c/o Eden Development, Inc. 22645 Grand Street Hayward, CA 94541-5031 Attention: President Facsimile: (510) 582-6523 With copy to: [investor limited partner—to be provided prior to execution] Final Construction Loan I June 2015 1 Form of DOT Page 3 of 9 Exhibit D 4. All terms and conditions of the Existing Deed of Trust not expressly amended or modified herein remain in full force and effect, without waiver or amendment. This Modification and the Existing Deed of Trust shall be read together, as one document. 5. This Modification may be executed in counterparts, each of which shall constitute an original and all of which taken together shall constitute one and the same instrument.. [signature page follows] Final Construction Loan I June 2015 1 Form of DOT Page 4 of 9 Exhibit D IN WITNESS WHEREOF, the parties hereto have caused this Modification to be duly executed as of the date first set forth above. "Trustor" DUBLIN FAMILY, L.P., a California limited partnership By: Dublin Family LLC, a California limited liability company, its General Partner By: Eden Development, Inc., a California nonprofit public benefit corporation, its sole member/manager By: Name: Title: Final Construction Loan June 2015 Form of DOT Page 5 of 9 Exhibit D "Beneficiary" City of Dublin, a municipal corporation By: Christopher Foss, City Manager Attest: City Cleric Approved as to form: City Attorney Final Construction Loan I June 2015 1 Form of DOT Page 6 of 9 Exhibit D STATE OF CALIFORNIA ) COUNTY OF ) On before me, a Notary Public, personally appeared 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 Final Construction Loan I June 2015 1 Form of DOT Page 7 of 9 Exhibit D STATE OF CALIFORNIA ) COUNTY OF ) On before me, a Notary Public, personally appeared 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 Final Construction Loan I June 2015 1 Form of DOT Page 8 of 9 Exhibit D EXHIBIT A-LEGAL DESCRIPTION OF REAL PROPERTY 2450568.2 Final Construction Loan I June 2015 1 Form of DOT Page 9 of 9 Exhibit D Alameda county Ulilky lowances. 16R 2 AIR 3 ER INCOME ECPENSES AND CASH FLOW ANALYSIS 213 31 47 2015 LCAC I'll 4.1 AMI(Section SMASH) I AMI(Section SMASH AMI(zt 5o%AMl rents] 1 20 21 21 2 44 23 24 2 4 4� 2 2 4 AMI(Section SMASH 12 AIR AN(zt 5o%AMl rents] 18 210 21 220 22 231 233 243 24 256 26 268 23 28 289 296 16 3 AIR AMI(zt 5o%AMl rents] Hzoe 1.161 25 28 29 299 30 31 3 330 33 34 35 364 33 38 392 402 11%= /o AAL INCOME e/VASH)-NASH i!!e AMI(Section SMASH -76 2 AIR AMI(Section SMASH 150% 1,]43 697 23 34 TOTAL RESIDENTIAL EGI 791 013 916 404 936 958 117 111 979 515 1 001 540 1 024 078 1 047 143 1 070 746 1 094 900 1 119 620 1 144 917 1 170 806 1 197 302 1 224 418 1 252 170 3'R 41 C oPnty MOnitoRring Fee 300 14 Couina tons L Fe 41 P .77 eeoHO%ol_flow] 25.000 1 10 144 341 47�43 Final Loan Agreement(June 2015(Predevelopment Budget Page 1 Exhibit E EDEN HOUSING Dublin Veterans Family Apartments Financing Summary Unit Mix 1BR/1BA 24 2BR/1BA 21 3BR/2BA 21 Total 66 DEVELOPMENT BUDGET Total Per Unit Total Land & Improvements $2,749,507 $41,659 Total Design &Consulting $1,679,134 $25,441 Total Construction $21,068,693 $319,223 Total Indirect Costs $6,976,472 $105,704 Total Finance&Carry Costs $1,651,680 $25,025 Total TCAC/Syndication $168,056 $2,546 TOTAL DEVELOPMENT COSTS $34,293,543 $519,599 SOURCES OF FINANCING Total Per Unit City of Dublin $6,400,000 $96,970 Bank of America Subordinate Loan $3,000,000 $45,455 Alameda County HOME/Boomerang $1,290,000 $19,545 Infill Infrastructure Grant $2,713,000 $41,106 HOME Depot Grant $350,000 $5,303 LIH Tax Credit-LP Capital Contribution $13,461,758 $203,966 Permanent Financing $1,387,732 $21,026 Permanent Financing-2nd Mortgage $2,551,153 $38,654 Deferred Developer Fee $500,000 $7,576 TOTAL SOURCES OF FUN IDS'' $34,293,543 $519,599 Final Loan Agreement I June 2015 1 Predevelopment Budget Page 2 Exhibit E RESOLUTION NO. ** -15 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DUBLIN ********* APPROVING A REVISED PREDEVELOPMENT LOAN AGREEMENT BETWEEN THE CITY OF DUBLIN AND CORONA CRESCENT, INC., RELATING TO THE DEVELOPMENT OF AN AFFORDABLE HOUSING PROJECT WITH VETERANS PREFERENCE WHEREAS, Corona Crescent, Inc., a California nonprofit public benefit corporation ("Developer") and the City of Dublin (the "City") desire to enter into a Predevelopment Loan Agreement ("Agreement") on property to be developed on a site within the Downtown Dublin Specific Plan area, located at 6707 Golden Gate Drive, Dublin, California, (APN 941-1500-030-02) as more particularly described in Exhibit A in the Agreement attached to this Resolution ("Property"); and WHEREAS, Developer is an affiliate of Eden Housing Inc., and is controlled by the same board of directors; and WHEREAS, Developer acquired the Property from BWD Dublin, LLC, an affiliate of Bay West Development Partners IV LLC, a California limited liability company (the "Market Rate Developer") who intends to develop a mixed-use project on Market Rate Developer's adjacent parcel (APN 941-1500-015-09) located at 7544 Dublin Boulevard in Dublin. Pursuant to that certain "City of Dublin Community Benefit Agreement with Bay West Development Partners IV LLC," dated October 7, 2014, the Market Rate Developer has transferred the Property to Developer for a nominal sum; and WHEREAS, Developer intends to construct a residential project on the Property consisting of approximately 66 affordable rental housing units primarily for veterans and their families and other very low and low income families, and related improvements ("Development"); and WHEREAS, Developer has requested, and the City has agreed to provide a loan to Developer in an amount not to exceed Six Million Four Hundred Thousand Dollars ($6,400,000) (the "Total Approved Loan Amount") to finance a portion of the predevelopment, development, and construction costs of the project. One Million Four Hundred Thousand Dollars ($1,400,000) of the Total Approved Loan Amount shall be a predevelopment loan (the "Predevelopment Loan"), which shall be made, disbursed, used and repaid in accordance with this Agreement and the predevelopment loan documents including a Promissory Note, Assignment Agreement, and Deed of Trust, (the "Predevelopment Loan Documents"). The Promissory Note, Assignment Agreement and Deed of Trust are attached as Exhibits to the Agreement; and WHEREAS, the Total Approved Loan Amount and the Predevelopment Loan amount were approved by the City Council on November 18, 20147 by Resolution No. 199-14; and ATTACHMENT#3 WHEREAS, an initial draft of the Predevelopment Loan Agreement was approved by the City Council on January 20, 2015 by Resolution No. 05-15; and WHEREAS, the Developer has requested substantive revisions to the draft Predevelopment Loan Agreement that will allow the Developer to utilize other secured financing sources and ensure consistency among agreements associated with this project: the Predevelopment Loan Agreement, Loan Agreement, and Regulatory Agreement; and NOW, THEREFORE, BE IT RESOLVED THAT the City Council of the City of Dublin approves and authorizes the City Manager to execute the Predevelopment Loan Agreement and related Predevelopment Loan Documents in substantially the form attached hereto as Exhibit A, upon the satisfaction of the conditions set forth in the Agreement. PASSED, APPROVED AND ADOPTED this 16th day of June, 2015 by the following vote: AYES: NOES: ABSENT: ABSTAIN: Mayor ATTEST: City Clerk 2448694.1 ATTACHMENT#3 PREDEVELOPMENT LOAN AGREEMENT (Veterans Family Housing Project) This Predevelopment Loan Agreement (this "Agreement") is entered into effective as of , 2015 ("Effective Date") by and between the City of Dublin, a municipal corporation (the "City") and Corona Crescent, Inc., a California nonprofit public benefit corporation (the "Borrower"). City and Borrower are hereinafter collectively referred to as the "Parties." A. Borrower owns that certain real property located at 6707 Golden Gate Drive, Dublin, California, (APN 941-1500-032-02) as more particularly described in Exhibit A attached to this Agreement (the "Property"). B. Borrower acquired the Property from BWD Dublin, LLC, an affiliate of Bay West Development Partners IV LLC, a California limited liability company (the "Market Rate Developer") who intends to develop a mixed-use project on Market Rate Developer's adjacent parcel (APN 941-1500-015-09) located at 7544 Dublin Boulevard in Dublin. Pursuant to that certain "City of Dublin Community Benefit Agreement with Bay West Development Partners IV LLC" dated October 7, 2014 (the "Community Benefit Agreement"), the Market Rate Developer transferred the Property to Borrower, an affordable housing developer, for a nominal sum. The Community Benefit Agreement involves the Market Rate Developer's provision, pursuant to the Downtown Dublin Specific Plan, of a Community Benefit in exchange for additional development potential on its parcel and the Property. C. The transfer of the Property to the Borrower satisfies the Market Rate Developer's obligation under the Community Benefit Agreement to transfer the Property to the City, Borrower, or another similar affordable housing provider. The transfer also serves to satisfy the Market Rate Developer's affordable housing obligations under the City's Inclusionary Zoning Regulations. Concurrently with Borrower's acquisition of title to the Property, the Parties recorded that certain Memorandum of Option Agreement by Borrower in favor of City recorded on February 13, 2015 as Instrument No, 2015043712 of the Official Records of Alameda County disclosing that Option Agreement between Borrower and the City dated February 9, 2015 (the "City Option Agreement") under which City shall have the right to acquire the Property from Borrower if construction of the affordable housing project is not commenced within the time set for therein. D. Borrower intends to construct, own and operate on the Property an affordable multifamily rental housing project consisting of approximately 64 to 72 affordable rental housing units primarily for veterans and their families and other Very Low and Low income families, one resident manager's unit, and other related improvements (the "Project"). The residential units in the Project will be rented at affordable rents to low- and very low- income households as more particularly described in an Affordable Housing Regulatory Agreement and Declaration of 2437364.1 1 Final Predevelopment Loan Agreement I May 2015 Restrictive Covenants ("Regulatory Agreement") to be recorded against the Property as set forth herein in Section 1.7. E. Borrower has requested, and the City has agreed to provide a loan to Borrower in an amount not to exceed Six Million Four Hundred Thousand Dollars ($6,400,000) (the "Total Approved Loan Amount") to finance a portion of the predevelopment, development, and construction costs of the Project. One Million Four Hundred Thousand Dollars ($1,400,000) of the Total Approved Loan Amount shall be a predevelopment loan (the "Predevelopment Loan"), which shall be made, disbursed, used and repaid in accordance with this Agreement and the predevelopment loan documents referred to herein. The Total Approved Loan Amount in excess of the Predevelopment Loan amount undisbursed as of the construction loan closing for the Development shall be referred to herein as the "Construction Loan Component." The Total Approved Loan Amount and the predevelopment loan component were approved by the City Council on November 18, 2014 by Resolution No. 199-14. F. The disbursement of any amount of the Construction Loan Component shall require a separate agreement with the City and shall not be disbursed pursuant to the terms of this Agreement. G. The City has determined that development of the Project is in the interests of the health, safety and welfare of the residents of the City, and that the City financing is necessary to make the Project affordable to Low- and Very Low-Income households. The City has further determined that provision of financing by City to Borrower for the purposes described herein is a qualified use of the City Affordable Housing Fund. NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows. 1. THE PREDEVELOPMENT LOAN AND DISBURSEMENT OF THE PREDEVELOPMENT LOAN PROCEEDS. 1.1 Loan and Note. Upon the terms and conditions and for the purposes set forth herein, City agrees to loan to Borrower, and Borrower agrees to borrow from and repay to City the Predevelopment Loan, a sum in the maximum principal amount of One Million, Four Hundred Thousand Dollars ($1,400,000).The Predevelopment Loan shall be evidenced by a promissory note dated as of the Effective Date and executed by Borrower substantially in the form attached hereto as Exhibit B (the "Promissory Note"). As used herein, the term "Predevelopment Loan Documents" means this Agreement, the Promissory Note, Assignment Agreement (defined below), Deed of Trust (defined below), Regulatory Agreement (defined below), and City Option Agreement. 2437364.1 2 Final Predevelopment Loan Agreement I May 2015 Provided that Borrower has complied with all conditions set forth in Section 1.6, the Predevelopment Loan proceeds shall be disbursed in accordance with Section 1.5 and 1.6 hereof. 1.2 Interest; Maturity Date. (a) The outstanding principal balance of the Predevelopment Loan shall bear simple interest at the rate of three percent (3%) per year commencing from the date of disbursement until paid in full. The outstanding principal balance of the Predevelopment Loan and any other sums due under the Predevelopment Note shall be payable in full on the third (3rd) anniversary of the date of the Promissory Note (the "Maturity Date") unless the term of the Predevelopment Loan is extended by mutual written agreement of the Parties or the Predevelopment Loan is forgiven pursuant to the terms hereof; provided, however, the Parties agree that if the City disburses the Construction Loan Component, or a portion thereof, prior to the Maturity Date, the outstanding balance of the Predevelopment Loan shall be repaid with such financing on the date such financing is provided. (b) The Parties intend that on the Maturity Date: (i) Borrower (or, if applicable a limited partnership in which Borrower or other controlled affiliate of Eden Housing, Inc. serves as general partner) shall execute a 55-year new promissory note evidencing the obligation to repay the Predevelopment Loan together with the Construction Loan Component and amount of additional financing (if any) committed by City for the Project on a residual receipts basis from Project cash flow; (ii) City shall mark the Predevelopment Note "cancelled" and shall return the original to Borrower; and (iii) the Parties shall execute and record an amendment to the Deed of Trust evidencing the additional City financing as a secured obligation. (c) Special Prepayment Upon the Closing of the Bank of America DOJ Loan and Re-loan of Amount Prepaid. Notwithstanding any other provision in this Agreement or the promissory note evidencing the Predevelopment Loan, the City shall accept a full or partial prepayment of the Predevelopment Loan with accrued interest thereon from the proceeds of the $3,000,000 DOJ Loan to be made to Borrower by Bank of America or an affiliate ("Bank") ("DOJ Loan"), which DOJ Loan requires full disbursement on or before August 15, 2015 or such other date as may be required by the Bank or the Department of Justice. The principal amount of the Predevelopment Loan prepaid with the proceeds of the DOJ Loan may be re-disbursed to Borrower in accordance with Section 1.5 of this Agreement with interest accruing on the outstanding principal balance of the amount re-disbursed from the date of re-disbursement. The principal amount of the Predevelopment Loan which is undisbursed (originally not disbursed or disbursed and prepaid) as of the closing of the Construction Loan Component shall be disbursed in accordance with the disbursement provisions in the separate construction loan agreement with the City. 2437364.1 3 Final Predevelopment Loan Agreement I May 2015 1.3 Security for the Predevelopment Loan; Subordination; Nonrecourse. (a) Security. The Predevelopment Note shall be secured by Borrower's assignment to the City of Borrower's rights to any and all architectural agreements, contracts, plans, specifications, reports, and studies relating to the Property or the Project which have been financed with the proceeds of the Predevelopment Loan ( the "Assignment Agreement") in the form attached hereto as Exhibit C. The Assignment Agreement may be amended upon City's request to reflect the additional financing provided pursuant to this Agreement. Borrower shall execute a deed of trust substantially in the form attached hereto as Exhibit D (the "Deed of Trust") pursuant to which City shall be provided a lien against the Property and the improvements to be constructed thereon as security for repayment of the Promissory Note. The Deed of Trust shall be dated as of the Effective Date and shall be recorded in the official records of Alameda County. (b) Subordination. City agrees to execute, and record at Borrower's cost, subordination agreements to subordinate the City's Deed of Trust and Regulatory Agreement (defined in Section 1.7 below) to Borrower's construction and/or permanent loans for the Project if (A) such construction and/or permanent financing is provided by (i) the Department of Housing and Community Development ("HCD"), the California Housing Financing Agency ("CaIHFA"), HUD, or other public senior lender that requires by statute or regulation that regulatory agreements with local public entities be subordinated, or (ii) in the case of tax-exempt bond financing, subordination of the Regulatory Agreements is required by such financing or Bond Counsel, or (B) (1) the affordable rental component is financed in part by HUD, Low-Income Housing Tax Credits, or tax- exempt bond financing and is subject to a recorded regulatory agreement in connection with such financing, and (2) Borrower demonstrates to City that, compared to financing available to Borrower if the Deed of Trust and Regulatory Agreements are subordinated, financing without such subordination will be offered on materially less favorable terms. In all cases, City shall each be entitled to receive notice of default and shall each be entitled to cure defaults arising under the senior documents. (c) Nonrecourse. Except as expressly provided in this Section 1.3(c), Borrower shall have no personal liability for payment of the principal of, or interest on the Promissory Note, and the sole recourse of City with respect to the payment of the principal of, and interest on, the Promissory Note shall be to the Property (as defined in the Deed of Trust), the Assigned Documents (as defined in the Assignment Agreement) and any other collateral held by City as security for the Promissory Note; provided however, nothing contained in the foregoing limitation of liability shall: (1) impair the enforcement against all such security for this Note of all the rights and remedies of the City under the Deed of Trust, the Assignment Agreement and any financing statements City files in 2437364.1 4 Final Predevelopment Loan Agreement I May 2015 connection with the Promissory Note, as each of the foregoing may be amended, modified, or restated from time to time; (2) impair the right of City to bring a foreclosure action, an action for specific performance or other appropriate action or proceeding to enable City to enforce and realize upon the Property under the Deed of Trust, the Assignment Agreement, the interest in the Assigned Documents created thereby and any other collateral given to City in connection with the indebtedness evidenced by the Promissory Note, and to name the Borrower as party defendant in any such action; (3) be deemed in any way to impair the right of the City to assert the unpaid principal amount of the Predevelopment Loan as a demand for money within the meaning of Section 431.70 of the California Code of Civil Procedure or any successor provision thereto; (4) constitute a waiver of any right which City may have under any bankruptcy law to file a claim for the full amount of the indebtedness owed to City under the Promissory Note or to require that the Property (as defined in the Deed of Trust) and the Assigned Documents shall continue to secure all of the indebtedness owed to City in accordance with the Promissory Note; or (5) limit or restrict the ability of City to seek or obtain a judgment against Borrower to enforce against Borrower to: (i) recover under Sections 3.2 of this Agreement (pertaining to Borrower's indemnification obligations), or (ii) recover from Borrower compensatory damages, as well as other costs and expenses incurred by City (including without limitation attorney's fees and expenses) arising as a result of the occurrence of any of the following: (a) any fraud or material misrepresentation on the part of the Borrower, or any officer, director or authorized representative of Borrower in connection with any request for Predevelopment Loan proceeds, or creation of the Predevelopment Loan, or in this Agreement, the Deed of Trust, the Assignment Agreement, or in connection with any request for any action or consent by City in connection with the Predevelopment Loan or the use of Predevelopment Loan proceeds; (b) the material misapplication of Predevelopment Loan proceeds; 2437364.1 5 Final Predevelopment Loan Agreement May 2015 (c) any failure to maintain insurance on the Property and the Project as required pursuant to this Agreement; (d) any failure to pay taxes, assessments or other charges which may become liens on the Property; (e) the presence of Hazardous Materials on the Property or other violation of the Borrower's obligations under Section 7.10 of the Deed of Trust (pertaining to environmental matters); (f) the occurrence of any act or omission of Borrower that results in waste to or of the Property or the improvements to be constructed thereon (the "Improvements") and which has a material adverse effect on the value of the Property or the Improvements; (g) the removal or disposal of any personal property or fixtures or the retention of rents, insurance proceeds, or condemnation awards in violation of the Deed of Trust; and (h) the material misapplication of the proceeds of any insurance policy or award resulting from condemnation or the exercise of the power of eminent domain or by reason of damage, loss or destruction to any portion of the Property. 1.4 Use of Predevelopment Loan Proceeds. The Predevelopment Loan proceeds shall be used solely and exclusively for Predevelopment costs required for the Project as set forth in the Predevelopment Budget attached hereto as Exhibit E, and such other costs related to development of the Project as the City may approve in writing. Predevelopment Loan proceeds shall be disbursed to Borrower on a cost reimbursement basis in accordance with Section 1.5. Notwithstanding any contrary provision of this Agreement, disbursements of Predevelopment Loan proceeds pursuant to this Agreement, shall not exceed the aggregate sum of One Million, Four Hundred Thousand Dollars ($1,400,000). 1.5 Disbursement of Predevelopment Loan Proceeds. Upon Borrower's satisfaction of the conditions set forth in Section 1.6, provided that Borrower has provided City with a written requisition that specifies the amount and use of the requested funds and which is accompanied by copies of third-party invoices, evidence of payment for services rendered in connection with the Project, Borrower's certification that the funds requested will be used solely for the purposes described in the requisition, and such other documentation as City may reasonably require, the City shall disburse the Predevelopment Loan proceeds for Borrower's Predevelopment costs 2437364.1 6 Final Predevelopment Loan Agreement I May 2015 in the amounts and for the items set forth in the Predevelopment Budget set forth in Exhibit E. The Parties acknowledge and agree that the line items are subject to change upon written agreement of the Parties. 1.6 Conditions Precedent to Disbursement of Funds. (a) City's obligation to disburse the Predevelopment Loan proceeds is conditioned upon satisfaction of all of the following conditions: (b) Borrower's execution and delivery to the City of this Agreement, the Predevelopment Note, the Regulatory Agreement (subject to the terms in item (ii) below), the Deed of Trust, and the Assignment Agreement; (c) Recordation of the Deed of Trust and Regulatory Agreement in the official records of Alameda County, provided, however, that notwithstanding the foregoing, prior to the recordation of the Regulatory Agreement and after recordation of the Deed of Trust, the City agrees to a limited disbursement of Predevelopment Loan proceeds not to exceed Two Hundred and Fifty Thousand Dollars ($250,000.00) to reimburse Borrower for its acquisition costs paid to the Market Rate Developer for the Land and assigned Project documents and for title, escrow, legal, and other costs relating to Borrower's acquisition of the Land, which costs shall be subject to the City's review and approval; (d) Borrower's delivery to City of consents to the assignment of agreements, plans, specifications, studies, reports and other work product prepared for the Project, executed by the Project architect and the other parties preparing such plans, specifications, studies, reports and other work product; (e) Borrower's delivery to the City of evidence of insurance coverage in the form and in such amounts as specified in Exhibit F attached hereto; (f) Borrower's delivery to City of each of the following: (i) certificate of good standing, certified by the Secretary of State indicating that Borrower is properly organized and authorized to do business in the State of California; (ii) a certified resolution indicating that Borrower has authorized this transaction and that the persons executing this Agreement, the Predevelopment Note, the Deed of Trust, the Regulatory Agreement, and the Assignment Agreement on behalf of Borrower have been duly authorized to do so; and (iii) certified copies of Borrower's articles of incorporation, bylaws, and I.R.S. tax-exemption determination letter; and (g) The issuance of an ALTA lender's policy of title insurance for the benefit of City, insuring that the Deed of Trust is a lien on the Property subject to only such exceptions as City shall reasonably approve, and with such endorsements as City shall reasonably require, with the cost of such policy to be paid by Borrower. 2437364.1 7 Final Predevelopment Loan Agreement I May 2015 1.7 Regulatory Agreement. A City Regulatory Agreement and Declaration of Restrictive Covenants that includes restrictions on the eligible tenant household income and eligible tenant rent, among other terms, conditions, and provisions, for a term of not less than fifty-five (55) years shall be recorded against the Property not later than ninety (90) days from the date of Borrower's acquisition of title, unless the 90-day period is extended by the City in accordance with the City Option Agreement (defined in Recital C). The Regulatory Agreement shall also include Borrower's commitment to operate the Development for very low and low income households primarily for very low and low income veterans of the United States Armed Forces and their families. 1.8 No Obligation to Disburse Proceeds Upon Default. Notwithstanding any other provision of this Agreement except as specified in Paragraph 1.9 (b), the City shall have no obligation to disburse any Predevelopment Loan proceeds following: (a) termination of this Agreement; (b) the failure of any of Borrower's representations and warranties set forth in this Agreement to be true and correct in all material respects; or (c) the occurrence of an Event of Default on the part of Borrower under this Agreement, the Promissory Note, the Deed of Trust, the Assignment Agreement, the Regulatory Agreement, or the City Option Agreement. 1.9 Termination of Agreement. (a) Termination by Borrower. Provided that Borrower is not in default under this Agreement, the Promissory Note, the Assignment Agreement, the Regulatory Agreement or the Deed of Trust, Borrower may terminate this Agreement for any of the following reasons by providing written notice of such termination to City: (1) Borrower does not receive all governmental approvals (including, without limitation, land use approvals) required for development of the Property or construction of the Project, despite Borrower's commercially reasonable efforts to obtain such approvals; or (2) Borrower determines, in its commercially reasonable discretion, that any (i) remediation work with respect to hazardous materials; or (ii) construction costs relating to the physical condition of the Property or to the proposed or required improvements thereon are so expensive or burdensome as to make the Project, or a required part thereof, financially infeasible; or (3) Borrower does not receive commitments for all financing necessary for the development, construction, and operation of the Project, despite Borrower's commercially reasonable efforts to obtain such financing. 2437364.1 8 Final Predevelopment Loan Agreement I May 2015 (b) Reimbursement. If this Agreement is terminated by Borrower pursuant to paragraph (a) above, or by mutual agreement of the Parties for any other reason, City shall reimburse Borrower for the following costs in an aggregate amount not to exceed the undisbursed balance of the Predevelopment Loan on the date of termination: Predevelopment costs incurred by Borrower prior to the date of termination of this Agreement provided that (1) such costs and fees are identified in the Predevelopment Budget or have otherwise been approved by City in writing, and (2) Borrower has provided City with a written requisition specifying the amount and use of the requested Predevelopment Loan proceeds accompanied by copies of third-party invoices for services rendered in connection with the Project, and such other documentation as City may reasonably require. (c) Forgiveness of the Predevelopment Loan. If this Agreement is terminated by Borrower pursuant to paragraph (a) above, or by mutual agreement of the Parties for any other reason, City shall forgive the outstanding balance of the Predevelopment Loan (including any amounts reimbursed to Borrower pursuant to paragraph (b) above) upon completion of the following: (1) Borrower's delivery of all architectural contracts, plans, specifications, reports, and studies to which City is entitled pursuant to the Assignment Agreement; and (2) Transfer of title to the Property to City. Upon delivery of such documents and transfer of title to the Property to City, City shall deliver to Borrower the original Promissory Note marked "Cancelled" and this Agreement shall be terminated; provided however, Borrower's obligation to indemnify City pursuant to Section 3.2 of this Agreement shall survive termination of this Agreement. Notwithstanding the foregoing, the City shall have no obligation to forgive Borrower's obligation to repay the Predevelopment Loan and cancel the Promissory Note if, after the applicable notice and cure period, the City has declared Borrower in default under this Agreement and such default remains uncured at the time of Borrower's request for forgiveness of the Predevelopment Loan. 2. USE RESTRICTIONS 2.1 Non-Discrimination. Borrower covenants by and for itself and its successors and assigns that there shall be no discrimination against or segregation of any person or any group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Project or the Property, nor shall Borrower 2437364.1 9 Final Predevelopment Loan Agreement I May 2015 or any person claiming under or through Borrower establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the Project. 2.2 Mandatory Language in All Subsequent Deeds, Leases and Contracts. All deeds, leases or contracts made or entered into by Borrower, its successors or assigns, as to any portion of the Property or the Project shall contain therein the following language: In Deeds: "Grantee herein covenants by and for itself, its successors and assigns that there shall be no discrimination against or segregation of any person or any group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the property herein conveyed nor shall the grantee or any person claiming under or through the grantee establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the property herein conveyed. The foregoing covenant shall run with the land." In Leases: "The lessee herein covenants by and for the lessee and lessee's heirs, personal representatives and assigns and all persons claiming under the lessee or through the lessee that this lease is made subject to the condition that there shall be no discrimination against or segregation of any person or any group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the land herein leased nor shall the lessee or any person claiming under or through the lessee establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sublessees, subtenants, or vendees in the land herein leased." In Contracts: "There shall be no discrimination against or segregation of any person or group of persons on account of any basis listed in subdivision (a) or (d) of 2437364.1 10 Final Predevelopment Loan Agreement I May 2015 Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the property nor shall the transferee or any person claiming under or through the transferee establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the land." 3. ADDITIONAL COVENANTS, REPRESENTATIONS AND WARRANTIES OF BORROWER 3.1 Representations of Borrower. Borrower represents and warrants to the City as follows: (a) Organization of the Borrower; Tax-exempt Status. Borrower is a duly organized nonprofit public benefit corporation, validly existing and in good standing under the laws of the State of California. Borrower has all requisite power and authority to acquire the Property, to develop, own and operate the Project, to carry on its business as now conducted, and to execute, deliver and perform its obligations under this Agreement, the Predevelopment Note, the Deed of Trust, and the Assignment Agreement. Borrower has received a determination from the Internal Revenue Service that it is exempt from federal tax under Section 501(c)(3) of the Internal Revenue Code of 1986 as amended, and such determination is in full force and effect as of the Effective Date. (b) Authorization of the Predevelopment Loan; No Violation. The execution, delivery and performance of this Agreement, the Predevelopment Note, the Deed of Trust, and the Assignment Agreement have been duly authorized by Borrower, and this Agreement, the Predevelopment Note, the Deed of Trust, and the Assignment Agreement, , when duly executed and delivered will constitute the valid and binding obligations of Borrower enforceable in accordance with their respective terms. Borrower's execution of this Agreement, the Predevelopment Note, the Deed of Trust, and the Assignment Agreement, and performance thereunder will not result in a breach of or constitute a default under any agreement, indenture or other instrument to which Borrower is a party or by which Borrower may be bound. The persons executing this Agreement, the Note, the Deed of Trust, and the Assignment Agreement on behalf of Borrower have been duly authorized to do so. (c) Litigation. There are no pending or threatened actions or proceedings before any court or administrative agency which may adversely affect the financial condition or operation of Borrower or its ability to carry out the obligations of Borrower under this Agreement, the Predevelopment Note, the 2437364.1 1 1 Final Predevelopment Loan Agreement I May 2015 Deed of Trust, and the Assignment Agreement. Borrower is not the subject of an action under federal or state Bankruptcy Law (as defined below). 3.2 Indemnification. Borrower shall indemnify, defend (with counsel approved by City) and hold the City and its elected and appointed officers, officials, employees, contractors and agents (all of the foregoing, collectively "Indemnitees") harmless from and against any and all demands, claims, suits, costs, expenses (including court costs and reasonable attorneys' fees), losses, damage, causes of action, fines, judgments, penalties, deficiencies, or liabilities of any kind (all of the foregoing, collectively "Claims") arising directly or indirectly in any manner in connection with or resulting from (a) any and all Predevelopment, development or construction activities conducted in connection with the Property or the Project, including without limitation, site investigations conducted by or for Borrower, (b) any failure of any of Borrower's representations or warranties set forth in this Agreement, or made by Borrower in connection with the execution and delivery of this Agreement or in any certificate furnished pursuant hereto, or in connection with any request for disbursement of Predevelopment Loan proceeds to be correct in all material respects, (c) any Claim, whether meritorious or not, brought or asserted against any Indemnitee which relates to or arises in connection with the Predevelopment Loan, the Predevelopment Note, the Deed of Trust, the Assignment Agreement, or any transaction contemplated thereby, or the relationship between Borrower and City. Borrower's obligations under this Section shall survive the making and repayment of the Predevelopment Loan and the expiration or termination of this Agreement. Borrower's indemnity obligations shall not apply to any Claims arising as a result of the willful misconduct or gross negligence of the Indemnitees. 3.3 Books and Records. The City shall have the right, during business hours and after reasonable notice to Borrower, to inspect and copy Borrower's books and records concerning the Property, the Project, and the Predevelopment Loan. 3.4 Other Documents. Upon the City's reasonable request, Borrower shall deliver to the City copies of documents related to the Project, including without limitation, construction contracts, consulting agreements, architects' agreements, loan and financing applications, studies, reports, management plans, loan documents, and property management agreements. 4. DEFAULT AND REMEDIES 4.1 Events of Default. The occurrence of any one or more of the following events shall constitute an event of default hereunder ("Event of Default"): (a) Borrower fails to pay when due the principal payable under the Predevelopment Note and such failure continues for ten (10) days after City notifies Borrower thereof in writing. (b) An Event of Default is declared under Regulatory Agreement, the Predevelopment Note, the Deed of Trust, the City Option Agreement, or the 2437364.1 12 Final Predevelopment Loan Agreement I May 2015 Assignment Agreement, and such failure continues after expiration of the applicable notice and cure periods set forth in such documents. (c) The Regulatory Agreement is not recorded within the time set forth in Section 1.7. (d) Any of Borrower's representations or warranties contained in this Agreement, or made by Borrower in connection with the execution and delivery of this Agreement or in any certificate furnished pursuant hereto, or in connection with any request for disbursement of Predevelopment Loan proceeds shall prove to have been incorrect when made in any material respect. (e) Pursuant to or within the meaning of the United States Bankruptcy Code or any other federal or state law relating to insolvency or relief of debtors ("Bankruptcy Law"), Borrower (i) commences a voluntary case or proceeding; (ii) consents to the entry of an order for relief against Borrower in an involuntary case; (iii) consents to the appointment of a trustee, receiver, assignee, liquidator or similar official for Borrower; (iv) makes an assignment for the benefit of its creditors; or (v) admits in writing its inability to pay its debts as they become due. (f) A court of competent jurisdiction enters an order or decree under any Bankruptcy Law that (i) is for relief against Borrower in an involuntary case, (ii) appoints a trustee, receiver, assignee, liquidator or similar official for Borrower or substantially all of such entity's assets, (iii) orders the liquidation of Borrower, or (iv) issues or levies a judgment, writ, warrant of attachment or similar process against the Property or the Project, and in each case the order or decree is not released, vacated, dismissed or fully bonded within 60 days after its issuance. (g) Borrower fails to maintain insurance as required pursuant to this Agreement, and Borrower fails to cure such default within 10 days. (h) Borrower fails to use Predevelopment Loan proceeds in accordance with this Agreement or fails to use Predevelopment Loan proceeds in accordance with the applicable request for disbursement. (i) Borrower defaults in the performance of any term, provision, covenant or agreement contained in this Agreement other than an obligation enumerated in this Section 4.1, and unless such a shorter cure period is specified for such default, the default continues for ten (10) days in the event of a monetary default or thirty (30) days in the event of a nonmonetary default after the date upon which City shall have given written notice of the default to Borrower, provided that in the case of a nonmonetary default that is not susceptible of cure within thirty (30) days, an Event of Default shall not arise hereunder if Borrower commences to cure the default within thirty (30) days and thereafter prosecutes the curing of such default to completion with due diligence and in good faith, but in no event longer than 120 days from the receipt of notice of default. 2437364.1 13 Final Predevelopment Loan Agreement I May 2015 4.2 Remedies. Upon the occurrence of an Event of Default, the City shall have the following rights, in addition to any other rights and remedies provided by law: (a) The City may declare the entire outstanding principal balance of the Predevelopment Loan immediately due and payable; (b) The City may exercise any and all rights and remedies granted to the City pursuant to this Agreement, the Deed of Trust (including without limitation, pursuit of a judicial or nonjudicial foreclosure), the Predevelopment Note, the Regulatory Agreement, the City Option Agreement, or the Assignment Agreement; (c) The City may seek an order of specific performance; and (d) The City may terminate this Agreement. Each of the remedies provided herein is cumulative and not exclusive of, and shall not prejudice any other remedy provided herein, in the Predevelopment Note, the Deed of Trust, the Regulatory Agreement, the City Option Agreement, or the Assignment Agreement. The City may exercise any rights and remedies available under applicable law, in addition to, and not in lieu of, any rights and remedies expressly granted in this Agreement. 4.3 No Waiver. No failure or delay by City at any time to require performance by Borrower of any provision of this Agreement or to exercise any right, power or remedy hereunder shall be construed as a waiver of any other provision or any succeeding breach of the same or any other provision hereof. The failure of City to insist upon the strict performance of any provision of this Agreement, or to exercise any election contained herein shall not be construed as a waiver or relinquishment for the future of such provision or election nor shall it constitute a waiver of the City's right to assert any remedy provided for in this Agreement, the Predevelopment Note, the Deed of Trust, the Regulatory Agreement, or the Assignment Agreement on the basis of the same or a similar breach of a covenant or warranty or other event of default. 5. MISCELLANEOUS 5.1 Assignment. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and assigns. Notwithstanding the foregoing, City's obligation to make the Predevelopment Loan is personal to Borrower, and shall not be assignable by Borrower by operation of law or otherwise absent the express written consent of City, and any such assignment by operation of law or otherwise shall be void. This Section shall not apply to an assignment to a wholly- controlled affiliate of Borrower's sponsor Eden Housing, Inc. or a limited partnership whose general partner is a wholly-controlled affiliate of Borrower's sponsor Eden Housing, Inc. 2437364.1 14 Final Predevelopment Loan Agreement I May 2015 5.2 Insurance. Borrower shall maintain and keep in force, at Borrower's expense, the insurance required pursuant to this Agreement as set forth in Exhibit F. For each of Borrower's insurance policies, Borrower shall provide to City within ten (10) days following execution of this Agreement, but in no event later than the initial disbursement of Predevelopment Loan proceeds, a certificate of insurance and an endorsement which provides that no cancellation, major change in coverage or expiration will be effective during the term of this Agreement without 30 days written notice to the City prior to the effective date of such cancellation, change in coverage or expiration. Upon request by the City from time to time, Borrower shall deliver to the City originals or copies of all such insurance policies and certificates evidencing such policies. 5.3 Notices. Except as otherwise specified herein, all notices to be sent pursuant to this Agreement shall be made in writing, and sent to the Parties at their respective addresses specified below or to such other address as a Party may designate by written notice delivered to the other parties in accordance with this Section. All such notices shall be sent by: (a) personal delivery, in which case notice is effective upon delivery; (b) certified or registered mail, return receipt requested, in which case notice shall be deemed delivered on receipt if delivery is confirmed by a return receipt; (c) nationally recognized overnight courier, with charges prepaid or charged to the sender's account, in which case notice is effective on delivery if delivery is confirmed by the delivery service; (d) facsimile transmission, in which case notice shall be deemed delivered upon transmittal, provided that (a) a duplicate copy of the notice is promptly delivered by first-class or certified mail or by overnight delivery, or (b) a transmission report is generated reflecting the accurate transmission thereof. Any notice given by facsimile shall be considered to have been received on the next business day if it is received after 5:00 p.m. recipient's time or on a nonbusiness day. CITY: City of Dublin 100 Civic Plaza Dublin, CA 94568 Attention: City Manager Fax No. (925) 829-9248 BORROWER: Corona Crescent, Inc. 22645 Grand Street Hayward, CA 94541-5031 Attention: President Fax No. (510) 582-6523 2437364.1 15 Final Predevelopment Loan Agreement I May 2015 5.4 Waiver, Modification and Amendment. No modification or waiver of any provision of this Agreement, nor any consent to any departure by Borrower therefrom, shall in any event be effective unless the same shall be in writing, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. No notice to or demand on the Borrower in any case shall entitle the Borrower to any other or further notice or demand in similar or other circumstances. No amendment to or modification of this Agreement shall be effective unless and until such amendment or modification is in writing, properly approved in accordance with applicable procedures, and executed by the Parties. 5.5 Further Assurances. The Parties shall execute, acknowledge and deliver to the other such other documents and instruments, and shall take such other actions, as may reasonably be necessary to carry out the intent of this Agreement. 5.6 Parties Not Co-Venturers. Nothing in this Agreement is intended to or shall establish the Parties as partners, co-venturers, or principal and agent with one another. 5.7 Action by the City. Except as may be otherwise specifically provided herein, whenever any approval, notice, direction, consent or request by the City is required or permitted under this Agreement, such action shall be in writing, and such action may be given, made or taken by the City Manager or by any person who shall have been designated by the City Manager, without further approval by the City Council. 5.8 Non-Liability of City, City Officials, Directors, Employees and Agents. No member, official, employee or agent of the City shall be personally liable to Borrower, or any successor in interest, in the event of any default or breach by the City, or for any amount of money which may become due to Borrower or its successor or for any obligation of City under this Agreement. No director, officer, employee or agent of Borrower shall be personally liable to the City, or any successor in interest, in the event of any default or breach by Borrower, or for any amount of money which may become due to City or its successor or for any obligation of Borrower under this Agreement. 5.9 No Third Party Beneficiaries. There shall be no third party beneficiaries to this Agreement. 5.10 Captions; Construction; Time is of the Essence. The headings of the sections and paragraphs of this Agreement have been inserted for convenience only and shall not be used to construe this Agreement. The language of this Agreement shall be construed as a whole according to its fair meaning and not strictly for or against any Party. Time is of the essence in the performance of this Agreement. 5.11 Governing Law; Venue. This Agreement, the Promissory Note, the Deed of Trust, the Regulatory Agreement, the City Option Agreement, and the Assignment Agreement shall be construed and enforced in accordance with the laws of the State of 2437364.1 16 Final Predevelopment Loan Agreement I May 2015 California without regard to principles of conflicts of law. The Parties agree that any dispute regarding the interpretation or enforcement of this Agreement shall be filed and heard in courts having jurisdiction in Alameda County, California. 5.12 Attorneys' Fees. In the event any legal action is commenced to interpret or to enforce the terms of this Agreement or to collect damages as a result of any breach thereof, the Party prevailing in any such action shall be entitled to recover against the other Party all reasonable attorneys' fees and costs incurred in such action. 5.13 Severability. If any term of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the provisions shall continue in full force and effect unless the rights and obligations of the Parties are materially altered or abridged by such invalidation, voiding or unenforceability. 5.14 Entire Agreement; Exhibits. This Agreement, together with the Promissory Note, the Deed of Trust, the Assignment Agreement, and the additional documents referenced herein contains the entire agreement between the Parties with respect to the subject matter hereof, and supersedes all prior oral or written agreements between the Parties with respect thereto. Exhibits A through F attached hereto are incorporated herein by this reference. 5.15 Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be an original and all of which together shall constitute one and the same instrument. 5.16 City Status. Borrower recognizes and agrees that City is not a commercial lending institution, but a municipal corporation exercising its authority to protect the public health, safety and welfare. Any duties or obligations which a commercial lending institution may have to Borrower shall not apply to this transaction except as set forth herein or in the Promissory Note or as otherwise required by law. SIGNATURES ON FOLLOWING PAGE. 2437364.1 17 Final Predevelopment Loan Agreement I May 2015 IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written above. BORROWER: CORONA CRESCENT, INC., a California nonprofit public benefit corporation By: Linda Mandolini, President CITY: CITY OF DUBLIN, a municipal corporation By: Christopher Foss City Manager ATTEST: By: City Clerk APPROVED AS TO FORM: By: City Attorney 2437364.1 18 Final Predevelopment Loan Agreement May 2015 Exhibit A LEGAL DESCRIPTION OF PROPERTY Real property in the City of Dublin, County of Alameda, State of California, described as follows: PARCEL D, AS SHOWN ON PARCEL MAP 2621, FILED DECEMBER 20, 1978 IN BOOK 107, PAGE 50 OF MAPS, ALAMEDA COUNTY RECORDS. EXCEPTING THEREFROM, THAT PORTION CONVEYED IN THE DEED TO THE COUNTY OF ALAMEDA, A POLITICAL SUBDIVISION OF THE STATE OF CALIFORNIA, RECORDED FEBRUARY 14, 2004 AS INSTRUMENT NO. 2002-073439 OF OFFICIAL RECORDS. APN: 941-1500-032-02 2437364.1 Final Predevelopment Loan Agreement I May 2015 Exhibit A Exhibit B FORM OF PROMISSORY NOTE (Attach form of Promissory Note.) 2437364.1 Final Predevelopment Loan Agreement I May 2015 Exhibit B PROMISSORY NOTE (Predevelopment Loan) (Dublin Veterans Family Housing Project) $1,400,000 Dublin, California , 2015 FOR VALUE RECEIVED, Corona Crescent, Inc., a California nonprofit public benefit corporation ("Borrower") promises to pay to the City of Dublin, a municipal corporation ("City"), in lawful money of the United States of America, the principal sum of One Million, Four Hundred Thousand Dollars ($1,400,000) or so much thereof as may be advanced by City from time to time pursuant to the Predevelopment Loan Agreement referred to below, in the manner provided below. Interest shall accrue on the outstanding principal balance of this Note at the simple rate of three percent (3%) per year from the date of disbursement until this Note is paid in full. This Promissory Note (this "Note") has been executed and delivered pursuant to and in accordance with that certain Predevelopment Loan Agreement, dated as of the date hereof, and executed by and between Borrower and City (the "Predevelopment Loan Agreement"), and is subject to the terms and conditions of the Predevelopment Loan Agreement which is by this reference incorporated herein and made a part hereof. Capitalized terms used but not defined herein shall have the meaning ascribed to such terms in the Predevelopment Loan Agreement. This Note is secured by a Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing ("Deed of Trust") dated as of the date hereof, executed by Borrower for the benefit of City and encumbering the property described therein and by the Assignment Agreement dated as of the date hereof. City shall be entitled to the benefits of the security provided by the Deed of Trust and the Assignment Agreement and shall have the right to enforce the covenants and agreements contained herein, in the Predevelopment Loan Agreement, the Deed of Trust, the City Option Agreement, and the Assignment Agreement. 1. PAYMENTS 1.1 MATURITY DATE. The entire principal balance outstanding under this Note, together with all other sums accrued hereunder, shall be due and payable in one lump sum on the third (3rd) anniversary of the date of this Note (the "Maturity Date") unless the term of the Maturity Date is extended by mutual written agreement of the Parties or the Predevelopment Loan is forgiven pursuant to Section 1.9 of the Predevelopment Loan Agreement, however, the Parties agree that if the City disburses the Construction Loan Component (as defined in the Predevelopment Loan Agreement), or a portion thereof, prior to the Maturity Date, the outstanding balance of the Predevelopment Loan shall become part of the repaid with such financing on the 1 Final Predevelopment Loan Agreement I May 2015 1 Form of Promissory Note Exhibit B date such financing is provided. The Parties intend that on the Maturity Date: (i) Borrower (or, if applicable a limited partnership in which Borrower serves as general partner) shall execute a 55-year new promissory note evidencing the obligation to repay the Predevelopment Loan proceeds together with the Construction Loan Component and amount of any additional financing committed by City for the Project) on a residual receipts basis from Project cash flow; (ii) City shall mark this Note "cancelled" and shall return the original to Borrower; and (iii) the Parties shall execute and record an amendment to the Deed of Trust evidencing the addition of any such additional City financing as a secured obligation. 1.2 DUE ON SALE. The entire unpaid principal balance and all interest and other sums accrued hereunder shall be due and payable upon the sale, conveyance or other transfer of the Property or any part thereof or interest therein absent City's prior written consent, provided however, City will not withhold consent to a transfer of the Property to a limited partnership in which Borrower serves as general partner. Without limiting the generality of the foregoing, this Note shall not be assumable without City's prior written consent, which consent may be granted or denied in City's sole discretion; provided however, City will not withhold consent to the assumption of this Note by a limited partnership in which Borrower serves as general partner. 1.3 PREPAYMENT. Borrower may, without premium or penalty, at any time and from time to time, prepay all or any portion of the outstanding principal balance due under this Note. Prepayments shall be applied first to any unpaid late charges and other costs and fees then due and then to principal. In no event shall any amount due under this Note become subject to any rights of offset, deduction or counterclaim on the part of Borrower. 1.4 MANNER OF PAYMENT. All payments on this Note shall be made to City at 100 Civic Plaza, Dublin, CA 94568 or such other place as City shall designate to Borrower in writing, or by wire transfer of immediately available funds to an account designated by City in writing. 2. DEFAULTS 2.1. EVENTS OF DEFAULT. The occurrence of any one or more of the following events shall constitute an event of default hereunder ("Event of Default")- (a) Borrower fails to pay when due any sum payable hereunder and such failure continues for ten (10) days after City notifies Borrower thereof in writing. (b) Borrower fails to use Predevelopment Loan proceeds in accordance with the Predevelopment Loan Agreement, fails to use Predevelopment Loan proceeds in accordance with the applicable request for 2 Final Predevelopment Loan Agreement I May 2015 1 Form of Promissory Note Exhibit B disbursement and does not cure such failure within thirty (30) days following written notice from City. (c) Any representation or warranty contained in the Predevelopment Loan Agreement, the Deed of Trust, the Assignment Agreement, City Option Agreement, Regulatory Agreement or any certificate furnished in connection therewith, or in connection with any request for disbursement of Predevelopment Loan proceeds proves to have been false or misleading in any material adverse respect when made and continues to be materially adverse to the City. (d) Borrower fails to maintain insurance as required pursuant to the Predevelopment Loan Agreement and Borrower fails to cure such default within ten (10) days. (e) Pursuant to or within the meaning of the United States Bankruptcy Code or any other federal or state law relating to insolvency or relief of debtors ("Bankruptcy Law"), Borrower: (i) commences a voluntary case or proceeding; (ii) consents to the entry of an order for relief against Borrower in an involuntary case; (iii) consents to the appointment of a trustee, receiver, assignee, liquidator or similar official for Borrower; (iv) makes an assignment for the benefit of its creditors; or (v) admits in writing its inability to pay its debts as they become due. (f) A court of competent jurisdiction enters an order or decree under any Bankruptcy Law that: (i) is for relief against Borrower in an involuntary case, (ii) appoints a trustee, receiver, assignee, liquidator or similar official for Borrower or substantially all of such entity's assets, (iii) orders the liquidation of Borrower, or (iv) issues or levies a judgment, writ, warrant of attachment or similar process against the Property or the Project, and in each case the order or decree is not released, vacated, dismissed or fully bonded within 60 days after its issuance. (g) An Event of Default on the part of Borrower is declared under the Predevelopment Loan Agreement, Regulatory Agreement, City Option Agreement or the Deed of Trust, or Borrower has defaulted under the Assignment Agreement and such default remains uncured beyond the expiration of any applicable cure period. (h) Borrower sells, conveys, assigns, encumbers, pledges or otherwise transfers the Property or any part thereof or interest therein absent City's prior written consent, provided however, City will not withhold consent to a transfer of the Property to a limited partnership in which Borrower serves as general partner. (i) Subject to Borrower's right to contest the following charges pursuant to the Deed of Trust, Borrower fails to pay prior to delinquency taxes or assessments due on the Property or fails to pay when due any other charge that may result in a lien on the Property, and Borrower fails to cure such default 3 Final Predevelopment Loan Agreement I May 2015 1 Form of Promissory Note Exhibit B within ninety (90) days of the date of delinquency, but in all events prior to the date upon which the holder of any lien has the right to pursue foreclosure thereof; (j) A default arises under any loan secured by a mortgage, deed of trust or other security instrument recorded against the Property and remains uncured beyond any applicable cure period such that the holder of such security instrument has the right to accelerate repayment of such loan. 2.2 REMEDIES. The rights and remedies of City under this Note shall be cumulative and not alternative. Upon the occurrence of an Event of Default hereunder, City may, at its option: (i) by written notice to Borrower declare the entire unpaid principal balance of this Note, together with all accrued interest thereon and all sums due hereunder, immediately due and payable regardless of any prior forbearance, (ii) exercise any and all rights and remedies available to it under law or equity, and (iii) exercise any and all rights and remedies available to City pursuant to the Predevelopment Loan Agreement, the Deed of Trust (including without limitation the right to pursue judicial or nonjudicial foreclosure), the City Option Agreement, Regulatory Agreement or the Assignment Agreement. Borrower shall pay all reasonable costs and expenses incurred by or on behalf of City including, without limitation, reasonable attorneys' fees, incurred in connection with City's enforcement of this Note and the exercise of any or all of its rights and remedies hereunder and all such sums shall constitute an indebtedness secured by the Deed of Trust. 2.3 DEFAULT RATE. Upon the occurrence of an Event of Default, interest shall automatically accrue without notice at a rate equal to the lesser of the maximum rate permitted by law or ten percent (10%) per annum (the "Default Rate"). When Borrower is no longer in default, the Default Rate shall no longer apply, and the interest rate shall once again be the rate specified in the first paragraph of this Note. The imposition or acceptance of the Default Rate shall in no event constitute a waiver of a default under this Note or prevent City from exercising any of its other rights or remedies. 3. MISCELLANEOUS 3.1. WAIVER; AMENDMENT. No waiver by City of any right or remedy under this Note shall be effective unless in a writing signed by City. Neither the failure nor any delay in exercising any right, power or privilege under this Note will operate as a waiver of such right, power or privilege, and no single or partial exercise of any such right, power or privilege by City will preclude any other or further exercise of such right, power or privilege or the exercise of any other right, power or privilege. No waiver that may be given by City will be applicable except in the specific instance for which it is given. No notice to or demand on Borrower will be deemed to be a waiver of any obligation of Borrower or of the right of City to take further action without notice or demand as provided in this 4 Final Predevelopment Loan Agreement I May 2015 1 Form of Promissory Note Exhibit B Note. To the maximum extent permitted by applicable law, Borrower hereby waives presentment, demand, protest, notices of dishonor and of protest and all defenses and pleas on the grounds of any extension or extensions of the time of payment or of any due date under this Note, in whole or in part, whether before or after maturity and with or without notice. There shall be no amendment to or modification of this Note except by written instrument executed by Borrower and City. 3.2. NOTICES. Any notice required or permitted to be given hereunder shall be given in accordance with Section 5.3 of the Predevelopment Loan Agreement. 3.3. SEVERABILITY. If any provision in this Note is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Note will remain in full force and effect. Any provision of this Note held invalid or unenforceable only in part or degree will remain in full force and effect to the extent not held invalid or unenforceable. 3.4 GOVERNING LAW; VENUE. This Note shall be construed and enforced in accordance with the laws of the State of California without regard to principles of conflicts of law. Any legal action filed in connection with this Note shall be filed and heard in the Superior Court of Alameda County, California, or in the Federal District Court for the Northern District of California. 3.5 PARTIES IN INTEREST. This Note shall bind Borrower and its successors and assigns and shall accrue to the benefit of City and its successors and assigns. 3.6 SECTION HEADINGS, CONSTRUCTION. The headings of sections in this Note are provided for convenience only and will not affect its construction or interpretation. 3.7 RELATIONSHIP OF THE PARTIES. The relationship of Borrower and City under this Note is solely that of borrower and lender, and the Predevelopment Loan evidenced by this Note and secured by the Deed of Trust and the Assignment Agreement will in no manner make City the partner or joint venturer of Borrower. 3.8 TIME IS OF THE ESSENCE. Time is of the essence with respect to every provision of this Note. 3.9 NON-RECOURSE. Except as expressly provided in this Section 3.9, Borrower shall have no personal liability for payment of the principal of, or interest on, this Note, and the sole recourse of City with respect to the payment of the principal of, and interest on, this Note shall be to the Property (as defined in the Deed of Trust), the Assigned Documents (as defined in the Assignment Agreement) and any other collateral held by City as security for this Note; provided however, nothing contained in the foregoing limitation of liability shall: 5 Final Predevelopment Loan Agreement I May 2015 1 Form of Promissory Note Exhibit B (A) impair the enforcement against all such security for this Note of all the rights and remedies of the City under the Deed of Trust, the Assignment Agreement, the City Option Agreement, and any financing statements City files in connection with this Note, as each of the foregoing may be amended, modified, or restated from time to time; (B) impair the right of City to bring a foreclosure action, an action for specific performance or other appropriate action or proceeding to enable City to enforce and realize upon the Property under the Deed of Trust, the Assignment Agreement, the interest in the Assigned Documents created thereby and any other collateral given to City in connection with the indebtedness evidenced by this Note, and to name the Borrower as party defendant in any such action; (C) be deemed in any way to impair the right of the City to assert the unpaid principal amount of the Loan as a demand for money within the meaning of Section 431.70 of the California Code of Civil Procedure or any successor provision thereto; (D) constitute a waiver of any right which City may have under any bankruptcy law to file a claim for the full amount of the indebtedness owed to City under this Note or to require that the Property (as defined in the Deed of Trust) and the Assigned Documents shall continue to secure all of the indebtedness owed to City in accordance with this Note; or (E) limit or restrict the ability of City to seek or obtain a judgment against Borrower to enforce against Borrower to: (1) recover under Sections 3.2 of the Predevelopment Loan Agreement (pertaining to Borrower's indemnification obligations), or (2) recover from Borrower compensatory damages, as well as other costs and expenses incurred by City (including without limitation attorney's fees and expenses), arising as a result of the occurrence of any of the following: (a) any fraud or material misrepresentation on the part of the Borrower, or any officer, director or authorized representative of Borrower in connection with any request for Loan Proceeds, or creation of the Loan, or in the Predevelopment Loan Agreement, the Deed of Trust, the City Option Agreement, the Assignment Agreement, or in connection with any request for any action or consent by City in connection with the Loan or the use of Loan Proceeds; (b) the material misapplication of Loan Proceeds; (c) any failure to maintain insurance on the Property and the Project as required pursuant to the Predevelopment Loan Agreement; 6 Final Predevelopment Loan Agreement I May 2015 1 Form of Promissory Note Exhibit B (d) any failure to pay taxes, assessments or other charges which may become liens on the Property; (e) the presence of Hazardous Materials on the Property or other violation of the Borrower's obligations under Section 7.10 of the Deed of Trust (pertaining to environmental matters); (f) the occurrence of any act or omission of Borrower that results in waste to or of the Property or the improvements to be constructed thereon (the "Improvements") and which has a material adverse effect on the value of the Property or the Improvements; (g) the removal or disposal of any personal property or fixtures or the retention of rents, insurance proceeds, or condemnation awards in violation of the Deed of Trust; and (h) the material misapplication of the proceeds of any insurance policy or award resulting from condemnation or the exercise of the power of eminent domain or by reason of damage, loss or destruction to any portion of the Property. SIGNATURE ON FOLLOWING PAGE. 7 Final Predevelopment Loan Agreement I May 2015 1 Form of Promissory Note Exhibit B IN WITNESS WHEREOF, Borrower has executed and delivered this Note as of the date first written above. BORROWER: Corona Crescent, Inc., a California nonprofit public benefit corporation By: Name: Title: 2385220.2 8 Final Predevelopment Loan Agreement I May 2015 1 Form of Promissory Note Exhibit B Exhibit C FORM OF ASSIGNMENT AGREEMENT (Attach form of Assignment Agreement 2437364.1 Final Predevelopment Loan Agreement I May 2015 Exhibit C ASSIGNMENT OF AGREEMENTS, PLANS AND SPECIFICATIONS (Dublin Veterans Housing Project) This Assignment of Agreements, Plans and Specifications (this "Agreement") is entered into effective as of , 2015 ("Effective Date") by and among the City of Dublin, a municipal corporation ("City") and Corona Crescent, Inc., a California nonprofit public benefit corporation ("Developer"). City and Developer are hereinafter collectively referred to as the "Parties." Capitalized terms used but not defined herein shall have the meaning ascribed to such terms in the Predevelopment Loan Agreement (defined below). For valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows. 1. Developer hereby assigns to City and grants to City a security interest in all of its right, title and interest in and to the contracts and agreements listed in Exhibit A attached hereto and incorporated herein by reference, and all of the items listed in the following paragraphs (A), (B) and (C). All of the foregoing are collectively hereafter referred to as the "Assigned Documents". (A) All architectural, design, engineering, consulting and construction contracts, and any and all amendments, modifications, supplements, addenda and general conditions thereto (collectively "Agreements"), heretofore or hereafter entered into by Developer (or Developer's sponsor Eden Housing, Inc., or other affiliate limited partnership formed to construct, own and operate the Improvements (defined below) and any architect, engineer, analyst, contractor or other person or entity ("Contractor") in connection with the preparation of plans, specifications, studies, analyses, drawings or any other similar service related to the Property, the Project, or the improvements existing or to be installed or constructed on the Property (the "Improvements"); (B) All reports, analyses, studies, plans and specifications, shop drawings, working drawings, amendments, modifications, changes, supplements, general conditions and addenda thereto (collectively, "Reports, Plans and Specifications") heretofore or hereafter prepared by or for Developer or any affiliate, agent, employee or Contractor of Developer with respect to the Property, the Project or the Improvements; and (C) All Construction Plans. 2. This Agreement is entered into pursuant to that certain Predevelopment Loan Agreement executed by and between Developer and City dated as of the date 1 Final Predevelopment Loan Agreement I May 2015 1 Form of Assignment Agreement Exhibit C hereof (the " Predevelopment Loan Agreement"). The Parties acknowledge that pursuant to the Predevelopment Loan Agreement, Developer shall repay the funds advanced by the City pursuant to the Predevelopment Loan Agreement. 3. This Agreement is made to secure: (a) payment to the City of all sums now or hereafter owing to City pursuant to the Promissory Note, and any and all additional advances, modifications, extensions, renewals and amendments thereof; and (b) payment and performance by Developer of all of its obligations under the Predevelopment Loan Agreement. 4. Developer hereby irrevocably appoints City as its attorney-in-fact (which City is coupled with an interest) upon the occurrence of an Event of Default under the Predevelopment Loan Agreement, to demand, receive, and enforce any and all of such Developer's rights with respect to the Assigned Documents, and to perform any and all acts in the name of such Developer or in the name of the City with the same force and effect as if performed by such Developer in the absence of this Agreement. 5. Developer agrees to obtain from each Contractor and deliver to City a duly executed Consent substantially in the form attached hereto as Exhibit B. 6. Developer represents and warrants to City that no previous assignment of its respective rights or interest in or to any of the Assigned Documents has been made. So long as the City holds or retains any interest under the Predevelopment Loan Agreement or the Promissory Note, Developer agrees not to assign, sell, pledge, transfer, mortgage, or hypothecate its respective rights or interest in any of the Assigned Documents without prior written approval of the City. The preceding sentence shall not apply to the permitted assignment to an affiliate limited partnership described in the last sentence of Section 5.1 of the Predevelopment Loan Agreement. 7. This Agreement shall be binding upon and inure to the benefit of the heirs, legal representatives, assigns, and successors-in-interest of Developer and the City; provided, however, this shall not be construed and is not intended to waive the restrictions on assignment, sale, transfer, mortgage, pledge, hypothecation or encumbrance contained in the Predevelopment Loan Agreement. 8. Unless an Event of Default (as defined in the Predevelopment Loan Agreement) shall have occurred, Developer shall be entitled (subject to the provisions of Section 6 above) to enjoy and enforce all of its rights under the Assigned Documents. If such an Event of Default occurs and City gives written notice to any Contractor who is a party to any Assigned Document referring to this Agreement and stating that such an Event of Developer Default has occurred and that City intends to exercise its rights hereunder (an "Exercise Notice"), then City shall be entitled thereafter to enjoy and enforce all of the rights of Developer under such Assigned Document and shall become bound to perform all future obligations of Developer thereunder, it being understood that in no event shall City be liable for payments or costs relating to any work which any 2 Final Predevelopment Loan Agreement I May 2015 1 Form of Assignment Agreement Exhibit C Contractor has performed prior to the date of City's delivery of such Exercise Notice. Unless and until such Exercise Notice is given, City shall not be obliged to perform any of the obligations of Developer under the Assigned Documents. 9. Developer represents and warrants that to the best of its knowledge after reasonable inquiry, there are no defaults under any Assigned Document by any party thereto. 10. Developer further represents and warrants that all sums due and owing to any Contractor to date under any Assigned Document have been duly paid in full, except to the extent deferral of such sums is allowed pursuant to such Assigned Document. 11. City may assign its rights under this Agreement, and the Assigned Documents, and the rights and obligations of any assignee of City shall be the same as provided herein as to City and Contractor. City may, in its discretion, make any such assignment to a third party, with the consent of the Contractor who is a party to such Assigned Documents, provided such consent shall not be unreasonably withheld, conditioned or delayed. 12. This Agreement shall not be deemed to release or affect in any way the obligations of Developer to any Contractor under the Assigned Documents. 13. Developer is executing this Agreement to induce City to enter into and disburse funds pursuant to the Predevelopment Loan Agreement, and Developer understands that City would not do so but for the execution and delivery of this Agreement by Developer. 14. Financing Statements. 14.1 Developer shall execute any and all further agreements, assignments (including separate assignments of Assigned Documents), documents, financing statements, and authorizations of financing statements, and shall take such other further actions as City may reasonably request from time to time, in order to evidence, protect, perfect, or continue the security interest of City in the Assigned Documents or otherwise carry out the purposes and intent of this Agreement. 14.2 Developer authorizes City to file financing statements (and continuation statements, and amendments thereto) in all states, counties, and other jurisdictions as City may elect without the signature of Developer to the extent permitted by law. 15. Notices. Except as otherwise specified herein, all notices to be sent pursuant to this Agreement shall be made in writing, and sent to the Parties at their respective addresses specified below (or in the case of Contractor, to the address 3 Final Predevelopment Loan Agreement I May 2015 1 Form of Assignment Agreement Exhibit C specified in the Consent attached hereto) or to such other address as a party may designate by written notice delivered to the other parties in accordance with this Section. All such notices shall be sent by: (i) personal delivery, in which case notice is effective upon delivery; (ii) certified or registered mail, return receipt requested, in which case notice shall be deemed delivered on receipt if delivery is confirmed by a return receipt; (iii) nationally recognized overnight courier, with charges prepaid or charged to the sender's account, in which case notice is effective on delivery if delivery is confirmed by the delivery service; (iv) facsimile transmission, in which case notice shall be deemed delivered upon transmittal, provided that (a) a duplicate copy of the notice is promptly delivered by first-class or certified mail or by overnight delivery, or (b) a transmission report is generated reflecting the accurate transmission thereof. Any notice given by facsimile shall be considered to have been received on the next business day if it is received after 5:00 p.m. recipient's time or on a nonbusiness day. CITY: City of Dublin 100 Civic Plaza Dublin, CA 94568 Attention: City Manager Fax No. (925) 833-6651 DEVELOPER: Corona Crescent, Inc. 22645 Grand Street Hayward, CA 94541-5031 Attention: President Fax No. (510) 582-6523 16. Amendments. This Agreement may be modified only by a written instrument signed by the Parties. 17. Further Assurances; Consents. The Parties shall execute, acknowledge and deliver to the other such other documents and instruments, and take such other actions, as either shall reasonably request as may be necessary to carry out the intent of this Agreement. 18. Parties Not Co-Venturers. Nothing in this Agreement is intended to or shall establish the Parties as partners, co-venturers, or principal and agent with one another. 4 Final Predevelopment Loan Agreement I May 2015 1 Form of Assignment Agreement Exhibit C 19. Action by the City. Except as may be otherwise specifically provided herein, whenever any approval, notice, direction, consent or request by the City is required or permitted under this Agreement, such action shall be in writing, and such action may be given, made or taken by the City's Community Development Director or by any person who shall have been designated by the City's Community Development Director, without further approval by the City's governing board unless the City's Community Development Director determines that such matter requires the consent of such governing board. 20. Non-Liability of City and City Officials, Employees and Agents. No member, official, employee or agent of the City shall be personally liable to Developer, or any successor in interest, in the event of any default or breach by the City, or for any amount of money which may become due to Developer or its successor or for any obligation of City under this Agreement. 21. No Third Party Beneficiaries. There shall be no third party beneficiaries to this Agreement. 22. Headings; Construction. The headings of the sections and paragraphs of this Agreement have been inserted for convenience only and shall not be used to construe this Agreement. The language of this Agreement shall be construed as a whole according to its fair meaning and not strictly for or against any Party. Time is of the essence in the performance of this Agreement. 23. Governing Law; Venue. This Agreement shall be construed in accordance with the laws of the State of California without regard to principles of conflicts of law. Developer agrees that any controversy arising under or in relation to this Agreement, the Predevelopment Loan Agreement or any other City Document shall be litigated exclusively in courts having jurisdiction in Alameda County. 24. Attorneys' Fees. If any claim, at law or otherwise is made by either Party, the prevailing party or the nondefaulting party, as the case may be, shall be entitled to its costs and reasonable attorneys' fees. 25. Severability. If any term of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the provisions shall continue in full force and effect unless the rights and obligations of the Parties are materially altered or abridged by such invalidation, voiding or unenforceability. 26. Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be an original and all of which together shall constitute one agreement. SIGNATURES ON FOLLOWING PAGE. 5 Final Predevelopment Loan Agreement I May 2015 1 Form of Assignment Agreement Exhibit C IN WITNESS WHEREOF, Developer and City have each duly executed this Agreement effective as of the date first above written. DEVELOPER: CORONA CRESCENT, INC., a California nonprofit public benefit corporation By: Linda Mandolini, President CITY: CITY OF DUBLIN, a municipal corporation By: Christopher Foss, City Manager ATTEST: By: City Clerk APPROVED AS TO FORM: By: City Attorney 6 Final Predevelopment Loan Agreement May 2015 Form of Assignment Agreement Exhibit C Exhibit A CONTRACTS AND AGREEMENTS (Attach List.) 7 Final Predevelopment Loan Agreement I May 2015 1 Form of Assignment Agreement Exhibit C Exhibit B CONSENT This Consent ("Consent") is executed effective as of 20_, pursuant to that certain Assignment of Agreements, Plans and Specifications ("Assignment Agreement") executed by and between Corona Crescent, Inc., a California nonprofit public benefit corporation ("Developer") and the City of Dublin, a municipal corporation ("City") dated as of , 20_. Unless otherwise defined herein, capitalized terms used in this Consent shall have the meanings given them in the Assignment Agreement. The undersigned architect, engineer, contractor and/or Contractor ("Contractor") hereby consents to the Assignment Agreement and the assignments contemplated thereby, and hereby waives all provisions in the Assigned Documents to which Contractor is a party which would impair, hinder or prevent the making of any such assignment by Developer to City or the enforcement thereof by City. Contractor agrees that if at any time, the City shall, pursuant to its rights under the Assignment Agreement, deliver an Exercise Notice to Contractor, then provided that Contractor has received, receives or continues to receive the compensation called for under the Assigned Documents to which Contractor is a party, the City may, at its option, use and rely upon the Assigned Documents for the purposes for which they were prepared, and Contractor will continue to perform its obligations under the Assigned Documents to which Contractor is a party for the benefit and account of the City in the same manner as if performed for the benefit or account of Developer in the absence of the Assignment Agreement. Contractor agrees that it shall rely conclusively upon any Exercise Notice given to Contractor by City, and Contractor agrees to be bound by such Exercise Notice. By its execution of this Consent, Contractor agrees to look solely to Developer and its successors in interest for performance of Developer's obligations under the Assigned Documents to which Contractor is a party unless and until Contractor shall have received an Exercise Notice from City. Contractor agrees that, after the occurrence of an Event of Developer Default under the Predevelopment Loan Agreement and the giving of an Exercise Notice by City, Contractor will perform all of its obligations under the Assigned Documents to which Contractor is a party, City being liable to pay the costs thereof relating to any services performed at the direction of City after the giving of the Exercise Notice. However, City is not and will in no event become liable for any costs, charges, expenses and liabilities incurred under the Assigned Documents or otherwise unless it has given the Exercise Notice (and, if it has given the Exercise Notice, City will not become liable for any such costs, charges or expenses incurred prior to the giving of such Exercise Notice), and the fact that Developer may not have paid and/or may be 8 Final Predevelopment Loan Agreement I May 2015 1 Form of Assignment Agreement Exhibit C unable to pay any such costs, charges, expenses or liabilities may not be asserted by Contractor as a defense to its obligations to perform services for City as set forth herein. Contractor agrees that, notwithstanding anything hereinabove contained or contained in the Assigned Documents to the contrary, City will have the right to receive and to use (without cost to City) any and all Assigned Documents relating to the Property, the Project or the Improvements, as the same may be amended or modified from time to time, which Contractor may own or have the right to use and to grant others the right to use. Contractor further agrees that, upon the written request of City (whether or not any Event of Developer Default has occurred), it will execute and deliver a certification confirming City's rights with respect to such Assigned Documents as City from time to time may reasonably request. Contractor agrees that for so long as the Assignment Agreement is effective, if Developer defaults in making any required payment or in performing any other obligation under any Assigned Document to which Contractor is a party, Contractor shall give prompt written notice thereof to City. Unless and until such notice is given to City, and for a period of 15 business days thereafter, Contractor shall not exercise any of its rights or remedies against Developer under the Assigned Documents (including, without limitation, the right to terminate any Assigned Document or to stop work thereunder). After such notice is given and for a period of 15 business days thereafter, City may, at its option, cure (but shall have no obligation to cure) any such default by Developer and, if such default is so cured during such notice period, Contractor shall continue performance under the Assigned Documents to which such Contractor is a party. Contractor represents and warrants that (i) the Assigned Documents to which Contractor is a party are in full force and effect, and to Contractor's knowledge there are no defaults thereunder by any party thereto; (ii) Contractor has made no assignment of any Assigned Document to which Contractor is a party or of its rights thereunder (other than to City); and (iii) there presently exists no unpaid claims presently due to Contractor, except as disclosed in writing to the City, arising in connection with the performance of Contractor's obligations under the Assigned Documents to which Contractor is a party. Contractor agrees that for so long as the Assignment Agreement is effective, Contractor shall not assign its rights or interest in any of the Assigned Documents (absent the prior written consent of City) to any entity other than a lender whose loan is secured by the Property, the Project or the Improvements with the prior written approval of the City. SIGNATURE ON FOLLOWING PAGE. 9 Final Predevelopment Loan Agreement I May 2015 1 Form of Assignment Agreement Exhibit C IN WITNESS WHEREOF, Contractor has duly executed this Consent as of the date first written above. CONTRACTOR By: Contractor's Address: Its: Telephone: Facsimile: 2384744.3 10 Final Predevelopment Loan Agreement I May 2015 1 Form of Assignment Agreement Exhibit C Exhibit D FORM OF DEED OF TRUST (Attach form of Deed of Trust.) 2437364.1 Final Predevelopment Loan Agreement I May 2015 Exhibit D RECORDING REQUESTED BY North American Title Company Escrow No. 54605-1135999 APN: 941-1500-032-02 AND WHEN RECORDED MAIL TO: City of Dublin 100 Civic Plaza Dublin, CA 94568 Attn: City Clerk EXEMPT FROM RECORDING FEES PER GOVERNMENT CODE 6103,27383 Space above this line for Recorder's use. DEED OF TRUST, ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND FIXTURE FILING (Predevelopment Loan) THIS DEED OF TRUST, ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND FIXTURE FILING ("Deed of Trust") is made as of , 2015, by Corona Crescent, Inc., a California nonprofit public benefit corporation ("Trustor") to North American Title Company as trustee ("Trustee"), for the benefit of the City of Dublin, a municipal corporation ("Beneficiary"). RECITALS A. Trustor owns fee simple title to the land described in Exhibit A attached hereto and incorporated herein by this reference (the "Land"). The Land is located in the City of Dublin, Alameda County, California. Trustor intends to construct, own and operate an affordable multifamily residential development on the Land (the "Project" or "Improvements"). B. Beneficiary and Trustor have entered into a Predevelopment Loan Agreement dated as of , 2015, pursuant to which Beneficiary has agreed to provide a loan to Trustor in the aggregate amount of up to One Million, Four Hundred Thousand Dollars ($1,400,000) (the "Loan") for the purpose of partially financing the Project. To evidence Trustor's obligation to repay the Loan, Trustor has issued to Beneficiary a Predevelopment Secured Promissory Note dated as of 2015, in the original principal amount of$1,400,000 (the "Note"). C. As a condition precedent to the making of the Loan, Beneficiary has required that Trustor enter into this Deed of Trust and grant to Trustee for the benefit of Beneficiary, a lien and security interest in the Property (defined below) to secure repayment of the Note and performance of Trustor's obligations under the Loan Agreement and under the Loan Documents (defined below). 1 Final Predevelopment Loan Agreement I May 2015 1 Form of Deed of Trust Exhibit D NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, it is agreed as follows. 1. Grant in Trust. In consideration of the foregoing and for the purpose of securing payment and performance of the Secured Obligations defined and described in Section 2, Trustor hereby irrevocably and unconditionally grants, conveys, transfers and assigns to Trustee, in trust for the benefit of Beneficiary, with power of sale and right of entry and possession, all estate, right, title and interest which Trustor now has or may later acquire in and to the Land, and all of the following, whether presently owned or hereafter acquired: a. All buildings, structures, and improvements, now or hereafter located or constructed on the Land; b. All appurtenances, easements, rights of way, pipes, transmission lines or wires and other rights used in connection with the Land or the Improvements or as a means of access thereto, whether now or hereafter owned or constructed or placed upon or in the Land or Improvements and all existing and future privileges, rights, franchises and tenements of the Land, including all minerals, oils, gas and other commercially valuable substances which may be in, under or produced from any part of the Land, and all water rights, rights of way, gores or strips of land, and any land lying in the streets, ways, and alleys, open or proposed, in front of or adjoining the Land and Improvements (collectively, "Appurtenances"); C. All machinery, equipment, fixtures, goods and other personal property of the Trustor, whether moveable or not, now owned or hereafter acquired by the Trustor and now or hereafter located at or used in connection with the Land, the Improvements or Appurtenances, and all improvements, restorations, replacements, repairs, additions or substitutions thereto (collectively, "Equipment"); d. All existing and future leases, subleases, licenses, and other agreements relating to the use or occupancy of all or any portion of the Land or Improvements (collectively, "Leases"), all amendments, extensions, renewals or modifications thereof, and all rent, royalties, or other payments which may now or hereafter accrue or otherwise become payable thereunder to or for the benefit of Trustor, including but not limited to security deposits (collectively, "Rents"); e. All insurance proceeds and any other proceeds from the Land, Improvements, Appurtenances, Equipment, Leases, and Rents, including without limitation, all deposits made with or other security deposits given to utility companies, all claims or demands relating to insurance awards which the Trustor now has or may hereafter acquire, including all advance payments of insurance premiums made by Trustor, and all condemnation awards or payments now or later made in connection with any condemnation or eminent domain proceeding ("Proceeds"); 2 Final Predevelopment Loan Agreement I May 2015 1 Form of Deed of Trust Exhibit D f. All revenues, income, rents, royalties, payments and profits produced by the Land, Improvements, Appurtenances and Equipment, whether now owned or hereafter acquired by Trustor ("Gross Revenues"); g. All architectural, structural and mechanical plans, specifications, design documents and studies produced in connection with development of the Land and construction of the Improvements (collectively, "Plans"); and h. All interests and rights in any private or governmental grants, subsidies, loans or other financing provided in connection with development of the Land and construction of the Improvements (collectively, "Financing"). All of the above-referenced interests of Trustor in the Land, Improvements, Project, Appurtenances, Equipment, Leases, Rents, Proceeds, Gross Revenues, Plans and Financing as hereby conveyed to Trustee or made subject to the security interest herein described are collectively referred to herein as the "Property." 2. Obligations Secured. This Deed of Trust is given for the purpose of securing payment and performance of the following (collectively, the "Secured Obligations")- (i) all present and future indebtedness evidenced by the Note and any amendment and/or restatement thereof, including principal, interest and all other amounts payable under the terms of the Note; (ii) all present and future obligations of Trustor to Beneficiary under the Loan Documents (defined below); (iii) all additional present and future obligations of Trustor to Beneficiary under any other agreement or instrument acknowledged by Trustor (whether existing now or in the future) which states that it is or such obligations are, secured by this Deed of Trust; (iv) all obligations of Trustor to Beneficiary under all modifications, supplements, amendments, renewals, or extensions of any of the foregoing, whether evidenced by new or additional documents; and (v) reimbursement of all amounts advanced by or on behalf of Beneficiary to protect Beneficiary's interests under this Deed of Trust or any other Loan Document as such may be modified, supplemented, amended, renewed or extended. The Note, the Loan Agreement, this Deed of Trust, any Affordable Housing Regulatory Agreements and Declaration of Restrictive Covenants that shall hereafter be recorded against the Land for the benefit of Beneficiary, that certain Option Agreement by Trustor in favor of Beneficiary recorded on 2015, as Instrument No. 2015- , and any and all amendments, restatements, modifications and extensions of any of the foregoing are hereafter collectively referred to as the "Loan Documents." 3. Assignment of Rents, Issues, and Profits. Trustor hereby irrevocably, absolutely, presently and unconditionally assigns to Beneficiary the Rents, royalties, issues, profits, revenue, income and proceeds of the Property. This is an absolute assignment and not an assignment for security only. Beneficiary hereby confers upon Trustor a license to collect and retain such Rents, royalties, issues, profits, revenue, income and proceeds as they become due and payable prior to any Event of Default hereunder. Upon the occurrence of any such Event of Default, Beneficiary may terminate such license without notice to or demand upon Trustor and without regard to the adequacy of any 3 Final Predevelopment Loan Agreement I May 2015 1 Form of Deed of Trust Exhibit D security for the indebtedness hereby secured, and may either in person, by agent, or by a receiver to be appointed by a court, enter upon and take possession of the Property or any part thereof, and 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 attorneys' fees, to any indebtedness secured hereby, and in such order as Beneficiary may determine. Beneficiary's right to the rents, royalties, issues, profits, revenue, income and proceeds of the Property does not depend upon whether or not Beneficiary takes possession of the Property. The entering upon and taking possession of the 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. If an Event of Default occurs while Beneficiary is in possession of all or part of the Property and/or is collecting and applying Rents as permitted under this Deed of Trust, Beneficiary, Trustee and any receiver shall nevertheless be entitled to exercise and invoke every right and remedy afforded any of them under this Deed of Trust and at law or in equity, including the right to exercise the power of sale granted hereunder. Regardless of whether or not Beneficiary, in person or by agent, takes actual possession of the Land or the Improvements, Beneficiary shall not be deemed to be a "mortgagee in possession," shall not be responsible for performing any obligation of Trustor under any Lease, shall not be liable in any manner for the Property, or the use, occupancy, enjoyment or operation of any part of it unless due to the willful misconduct or gross negligence of Beneficiary„ and shall not be responsible for any waste committed by Trustor, lessees or any third parties, or for dangerous or defective condition of the Property or any negligence in the management, repair or control of the Property. Absent Beneficiary's written consent, Trustor shall not accept prepayment of Rents for any rental period exceeding one month. 4. Security Agreement. The parties intend for this Deed of Trust to create a lien on the Property, and an absolute assignment of the Rents and Leases, all in favor of Beneficiary. The parties acknowledge that some of the Property may be determined under applicable law to be personal property or fixtures. To the extent that any Property may be or be determined to be personal property, Trustor as debtor hereby grants to Beneficiary as secured party a security interest in all such Property to secure payment and performance of the Secured Obligations. This Deed of Trust constitutes a security agreement under the California Uniform Commercial Code, as amended or recodified from time to time (the "UCC"), covering all such Property. To the extent such Property is not real property encumbered by the lien granted above, and is not absolutely assigned by the assignment set forth above, it is the intention of the parties that such Property shall constitute "proceeds, products, offspring, rents, or profits" (as defined in and for the purposes of Section 552(b) of the United States Bankruptcy Code, as such section may be modified or supplemented) of the Land and Improvements. 5. Financing Statements. Pursuant to the UCC, Trustor, as debtor, hereby authorizes Beneficiary, as secured party, to file such financing statements and amendments thereof and such continuation statements with respect thereto as Beneficiary may deem appropriate to perfect and preserve Beneficiary's security interest 4 Final Predevelopment Loan Agreement I May 2015 1 Form of Deed of Trust Exhibit D in the Property and Rents, without requiring any signature or further authorization by Trustor. If requested by Beneficiary, Trustor shall pay all fees and costs that Beneficiary may incur in filing such documents in public offices and in obtaining such record searches as Beneficiary may reasonably require. If any financing statement or other document is filed in the records normally pertaining to personal property, that filing shall not be construed as in any way derogating from or impairing this Deed of Trust or the rights or obligations of the parties under it. Everything used in connection with the Property and/or adapted for use therein and/or which is described or reflected in this Deed of Trust is, and at all times and for all purposes and in all proceedings both legal or equitable shall be regarded as part of the estate encumbered by this Deed of Trust irrespective of whether (i) any such item is physically attached to the Improvements, (ii) serial numbers are used for the better identification of certain equipment items capable of being thus identified in a recital contained herein or in any list filed with Beneficiary, or (iii) any such item is referred to or reflected in any such financing statement so filed at any time. Similarly, the mention in any such financing statement of (1) rights in or to the proceeds of any fire and/or hazard insurance policy, or (2) any award in eminent domain proceedings for a taking or for lessening of value, or (3) Trustor's interest as lessor in any present or future lease or rights to income growing out of the use and/or occupancy of the property conveyed hereby, whether pursuant to lease or otherwise, shall not be construed as in any way altering any of the rights of Beneficiary as determined by this instrument or impugning the priority of Beneficiary's lien granted hereby or by any other recorded document. Such mention in any financing statement is declared to be solely for the protection of Beneficiary in the event any court or judge shall at any time hold, with respect to the matters set forth in the foregoing clauses (1), (2), and (3), that notice of Beneficiary's priority of interest is required in order to be effective against a particular class of persons, including but not limited to the federal government and any subdivisions or entity of the federal government. 6. Fixture Filing. This Deed of Trust is intended to be and constitutes a fixture filing pursuant to the provisions of the UCC with respect to all of the Property constituting fixtures, is being recorded as a fixture financing statement and filing under the UCC, and covers property, goods and equipment which are or are to become fixtures related to the Land and the Improvements. Trustor covenants and agrees that this Deed of Trust is to be filed in the real estate records of Alameda County and shall also operate from the date of such filing as a fixture filing in accordance with Section 9502 and other applicable provisions of the UCC. This Deed of Trust shall also be effective as a financing statement covering minerals or the like (including oil and gas) and accounts subject to the UCC, as amended. Trustor shall be deemed to be the "debtor" and Beneficiary shall be deemed to be the "secured party" for all purposes under the UCC. 7. Trustor's Representations, Warranties and Covenants; Rights and Duties of the Parties. 7.1 Representations and Warranties. Trustor represents and warrants that: (i) Trustor lawfully possesses and holds a fee simple interest in the Land and the 5 Final Predevelopment Loan Agreement I May 2015 1 Form of Deed of Trust Exhibit D Improvements when constructed or installed, (ii) Trustor has good and marketable title to all of the Property; (iii) other than as limited by the Loan Documents, Trustor has the full and unlimited power, right and authority to encumber the Property and assign the Rents; (iv) subject only to encumbrances of record and senior liens permitted pursuant to the Loan Documents or otherwise approved in writing by Beneficiary ("Permitted Encumbrances"), this Deed of Trust creates a valid lien on Trustor's entire interest in the Property; (v) except with respect to Permitted Encumbrances, Trustor owns the Property free and clear of all deeds of trust, mortgages, security agreements, reservations of title or conditional sales contracts, (vi) there is no financing statement affecting the Property on file in any public office other than as disclosed in writing to Beneficiary; and (vii) the correct address of Trustor's chief executive office is specified in Section 10.2. 7.2 Condition of Property. Trustor represents and warrants that except as disclosed to Beneficiary in writing, as of the date hereof: (i) Trustor has not received any notice from any governmental authority of any threatened or pending zoning, building, fire, or health code violation or violation of other governmental regulations concerning the Property that has not previously been corrected, and no condition on the Land violates any health, safety, fire, environmental, sewage, building, or other federal, state or local law, ordinance or regulation; (ii) no contracts, licenses, leases or commitments regarding the maintenance or use of the Property or allowing any third party rights to use the Property are in force; (iii) there are no threatened or pending actions, suits, or administrative proceedings against or affecting the Property or any portion thereof or the interest of Trustor in the Property; (iv) there are no threatened or pending condemnation, eminent domain, or similar proceedings affecting the Property or any portion thereof; (v) Trustor has not received any notice from any insurer of defects of the Property which have not been corrected; (vi) there are no natural or artificial conditions upon the Land or any part thereof that could result in a material and adverse change in the condition of the Land; (vii) all information that Trustor has delivered to Beneficiary, either directly or through Trustor's agents, is accurate and complete; and (viii) Trustor or Trustor's agents have disclosed to Beneficiary all material facts concerning the Property. 7.3 Authority. Trustor represents and warrants that this Deed of Trust and all other documents delivered or to be delivered by Trustor in connection herewith: (a) have been duly authorized, executed, and delivered by Trustor; (b) are binding obligations of Trustor; and (c) do not violate the provisions of any agreement to which Trustor is a party or which affects the Property. Trustor further represents and warrants that there are no pending, or to Trustor's knowledge, threatened actions or proceedings before any court or administrative agency which may adversely affect Trustor's ownership of the Property. 7.4 Payment and Performance of Secured Obligations. Trustor shall promptly pay when due the principal and any interest due on the indebtedness evidenced by the Note, and shall promptly pay and perform all other obligations of Trustor arising in 6 Final Predevelopment Loan Agreement I May 2015 1 Form of Deed of Trust Exhibit D connection with the Secured Obligations or the Loan Documents in accordance with the respective terms thereof. 7.5 Use of Loan Proceeds; Preservation and Maintenance of Property: Compliance with Laws. Trustor covenants that it shall use the Loan Proceeds solely for purposes authorized by the Loan Documents. Trustor covenants that it shall keep the Land and Improvements in good repair and condition, and from time to time shall make necessary repairs, renewals and replacements thereto so that the Property shall be preserved and maintained. Trustor covenants to comply with all federal, state and local laws, regulations, ordinances and rules applicable to the Property and the Project, including without limitation all applicable requirements of state and local building codes and regulations, and all applicable statutes and regulations relating to accessibility for the disabled. Trustor shall not remove, demolish or materially alter any Improvement without Beneficiary's consent, shall complete or restore promptly and in good and workmanlike manner any building, fixture or other improvement which may be constructed, damaged, or destroyed thereon, and shall pay when due all claims for labor performed and materials furnished therefor. Trustor shall use the Land and the Improvements solely for purposes authorized by the Loan Documents, shall not commit or allow waste of the Property, and shall not commit or allow any act upon or use of the Property which would violate any applicable law or order of any governmental authority, nor shall Trustor bring on or keep any article on the Property or cause or allow any condition to exist thereon which could invalidate or which would be prohibited by any insurance coverage required to be maintained on the Property pursuant to the Loan Documents. 7.6 Restrictions on Conveyance and Encumbrance; Acceleration. It shall be an Event of Default hereunder if the Property, any part thereof, or interest therein is sold, assigned, conveyed, transferred, hypothecated, leased, licensed, or encumbered in violation of the Loan Documents or if any other Transfer (as defined in the Loan Agreement) occurs in violation of the Loan Documents. If any such Transfer shall occur in violation of such requirements, without limiting the provisions of Section 8 hereof, all obligations secured by this Deed of Trust, irrespective of the maturity dates of such obligations, shall at the option of Beneficiary, and without demand, immediately become due and payable, subject to any applicable cure period. 7.7 Inspections; Books and Records. Beneficiary and its agents and representatives shall have the right at any reasonable time upon reasonable notice to Trustor to enter upon the Land and inspect the Property to ensure compliance with the Loan Documents. Trustor shall maintain complete and accurate books of account and other records (including copies of supporting bills and invoices) adequate to document the use of the Loan Proceeds and the operation of the Property, together with copies of all written contracts, Leases and other instruments which affect the Property. The books, records, contracts, Leases and other instruments shall be subject to examination and inspection by Beneficiary at any reasonable time following two business days prior notice. 7 Final Predevelopment Loan Agreement I May 2015 1 Form of Deed of Trust Exhibit D 7.8 Charges, Liens, Taxes and Assessments. Trustor shall pay before delinquency all taxes, levies, assessments and other charges affecting the Property that are (or if not paid may become) a lien on all or part of the Property. Trustor may, at Trustor's expense, contest the validity or application of any tax, levy, assessment or charge affecting the Property by appropriate legal proceedings promptly initiated and conducted in good faith and with due diligence, provided that (i) Beneficiary is reasonably satisfied that neither the Property nor any part thereof or interest therein will be in danger of being sold, forfeited, or lost as a result of such contest, and (ii) Trustor shall have posted a bond or furnished other security as may reasonably be required from time to time by Beneficiary; and provided further that Trustor shall timely make any payment necessary to prevent a lien foreclosure, sale, forfeiture or loss of the Property. 7.9 Subrogation. Beneficiary shall be subrogated to the liens of all encumbrances, whether released of record or not, which are discharged in whole or in part by Beneficiary in accordance with this Deed of Trust. 7.10 Hazard, Liability and Workers' Compensation Insurance. At all times during the term hereof, at Trustor's expense, Trustor shall keep the Improvements and personal property now existing or hereafter located on the Property insured against loss by fire, vandalism and malicious mischief by a policy of standard fire and extended all- risk insurance. The policy shall be written on a full replacement value basis and shall name Beneficiary as loss payee as its interest may appear. The full replacement value of the improvements to be insured shall be determined by the company issuing the policy at the time the policy is initially obtained. Not more frequently than once every two (2) years, either the Trustor or the Beneficiary shall have the right to notify the other party that it elects to have the replacement value redetermined by the insurance company. Subject to the rights of any senior lienholder, the proceeds collected under any insurance policy may be applied by Beneficiary to any indebtedness secured hereby and in such order as Beneficiary may determine, or at the option of Beneficiary, the entire amount so collected or any part thereof may be released to Trustor. Such application or release shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. Notwithstanding anything to the contrary set forth herein, provided that Trustor is not in default under any Loan Document, Trustor shall be permitted to use the proceeds of insurance to rebuild the Improvements. 7.10.1 Trustor shall at all times during the term hereof, maintain a comprehensive general liability insurance policy in an amount not less than One Million Dollars ($1,000,000) each occurrence, Two Million Dollars ($2,000,000) annual aggregate, together with Three Million Dollars ($3,000,000) excess liability coverage or such other policy limits as Agency may require in its reasonable discretion, including coverage for bodily injury, property damage, products, completed operations and contractual liability coverage. Such policy or policies shall be written on an occurrence basis and shall name the Beneficiary as an additional insured. Trustor shall maintain workers' compensation insurance as required by law. 8 Final Predevelopment Loan Agreement I May 2015 1 Form of Deed of Trust Exhibit D 7.10.2 Trustor shall file with Beneficiary prior to the commencement of the term hereof, certificates (or such other proof as Beneficiary may require, including without limitation, copies of the required insurance policies) evidencing each of the insurance policies and endorsements thereto as required by this Section, and such certificates (or policies) shall provide that at least thirty (30) days' prior written notice shall be provided to Beneficiary prior to the expiration, cancellation or change in coverage under each such policy. 7.10.3 If any insurance policy required hereunder is canceled or the coverage provided thereunder is reduced, Trustor shall, within fifteen (15) days after receipt of written notice of such cancellation or reduction in coverage, but in no event later than the effective date of cancellation or reduction, file with Beneficiary a certificate showing that the required insurance has been reinstated or provided through another insurance company or companies. Upon failure to so file such certificate, Beneficiary may, without further notice and at its option, procure such insurance coverage at Trustor's expense, and Trustor shall promptly reimburse Beneficiary for such expense upon receipt of billing from Beneficiary. 7.10.4 The insurance policies required hereunder shall be issued by insurance companies authorized to do business in the State of California with a financial rating of at least A VII status as rated in the most recent edition of Best's Key Rating Guide. Each policy of insurance shall contain an endorsement requiring the insurer to provide at least thirty (30) days written notice to Beneficiary prior to change in coverage, cancellation or expiration thereof. If any insurance policy required pursuant to the Loan Documents is canceled or the coverage provided thereunder is reduced, Trustor shall, within ten (10) days after receipt of written notice of such cancellation or reduction in coverage, but in no event later than the effective date of cancellation or reduction, file with Beneficiary a certificate showing that the required insurance has been reinstated or provided through another insurance company or companies. Upon failure to so file such certificate, Beneficiary may, without further notice and at its option, procure such insurance coverage at Trustor's expense, and Trustor shall promptly reimburse Beneficiary for such expense upon receipt of billing from Beneficiary. 7.11 Hazardous Materials. Trustor represents and warrants that except as disclosed to Beneficiary in writing, as of the date hereof to the best knowledge of Trustor: (i) the Land is free and has always been free of Hazardous Materials (as defined below) and is not and has never been in violation of any Environmental Law (as defined below); (ii) there are no buried or partially buried storage tanks located on the Land; (iii) Trustor has received no notice, warning, notice of violation, administrative complaint, judicial complaint, or other formal or informal notice alleging that conditions on the Land are or have ever been in violation of any Environmental Law or informing Trustor that the Land is subject to investigation or inquiry regarding Hazardous Materials on the Land or the potential violation of any Environmental Law; (iv) there is no monitoring program required by the Environmental Protection Agency or any other governmental agency concerning the Land; (v) no toxic or hazardous chemicals, waste, or substances of any kind have ever been spilled, disposed of, or stored on, under or at 9 Final Predevelopment Loan Agreement I May 2015 1 Form of Deed of Trust Exhibit D the Land, whether by accident, burying, drainage, or storage in containers, tanks, holding areas, or any other means; (vi) the Land has never been used as a dump or landfill; and (vii) Trustor has disclosed to Beneficiary all information, records, and studies in Trustor's possession or reasonably available to Trustor relating to the Land concerning Hazardous Materials. Trustor shall not cause or permit any Hazardous Material (as defined below) to be brought upon, kept, stored or used in, on, under, or about the Land by Trustor, its agents, employees, contractors or invitees except for incidental supplies ordinarily used in connection with the construction, rehabilitation, repair, and operation of residential developments and in compliance with all applicable laws, and shall not cause any release of Hazardous Materials into, onto, under or through the Land. If any Hazardous Material is discharged, released, dumped, or spilled in, on, under, or about the Land and results in any contamination of the Land or adjacent property, or otherwise results in the release or discharge of Hazardous Materials in, on, under or from the Land, Trustor shall promptly take all actions at its sole expense as are necessary to comply with all Environmental Laws (as defined below). To the fullest extent permitted by law, Trustor shall indemnify, defend (with counsel reasonably acceptable to Beneficiary), and hold Beneficiary and its elected and appointed officials, officers, agents and employees (collectively, "Indemnitees") harmless from and against any and all loss, claim, liability, damage, demand, judgment, order, penalty, fine, injunctive or other relief, cost, expense (including reasonable fees and expenses of attorneys, expert witnesses, and other professionals advising or assisting Beneficiary), action, or cause of action (all of the foregoing, hereafter individually "Claim" and collectively "Claims") arising in connection with the breach of Trustor's covenants and obligations set forth in this Section 7.11 or otherwise arising in connection with the presence or release of Hazardous Materials in, on, under, or from the Property. The foregoing indemnity includes, without limitation, all costs of investigation, assessment, containment, removal, remediation of any kind, and disposal of Hazardous Materials, all costs of determining whether the Land is in compliance with Environmental Laws, all costs associated with bringing the Land into compliance with all applicable Environmental Laws, and all costs associated with claims for damages or injury to persons, property, or natural resources. Without limiting the generality of the foregoing, Trustor shall, at Trustor's own cost and expense, do all of the following: a. pay or satisfy any judgment or decree that may be entered against any Indemnitee or Indemnitees in any legal or administrative proceeding incident to any matters against which Indemnitees are entitled to be indemnified under this Deed of Trust; b. reimburse Indemnitees for any expenses paid or incurred in connection with any matters against which Indemnitees are entitled to be indemnified under this Deed of Trust; and 10 Final Predevelopment Loan Agreement I May 2015 1 Form of Deed of Trust Exhibit D C. reimburse Indemnitees for any and all expenses, including without limitation out-of-pocket expenses and fees of attorneys and expert witnesses, paid or incurred in connection with the enforcement by Indemnitees of their rights under this Deed of Trust, or in monitoring and participating in any legal or administrative proceeding. Trustor's obligation to indemnify the Indemnitees shall not be limited or impaired by any of the following, or by any failure of Trustor to receive notice of or consideration for any of the following: (i) any amendment or modification of any Loan Document; (ii) any extensions of time for performance required by any Loan Document; (iii) any provision in any of the Loan Documents limiting Beneficiary's recourse to property securing the Secured Obligations, or limiting the personal liability of Trustor, or any other party for payment of all or any part of the Secured Obligations; (iv) the accuracy or inaccuracy of any representation and warranty made by Trustor under this Deed of Trust or by Trustor or any other party under any Loan Document, (v) the release of Trustor or any other person, by Beneficiary or by operation of law, from performance of any obligation under any Loan Document; (vi) the release or substitution in whole or in part of any security for the Secured Obligations; and (vii) Beneficiary's failure to properly perfect any lien or security interest given as security for the Secured Obligations. The provisions of this Section 7.11 shall be in addition to any and all other obligations and liabilities that Trustor may have under applicable law, and each Indemnitee shall be entitled to indemnification under this Section without regard to whether Beneficiary or that Indemnitee has exercised any rights against the Property or any other security, pursued any rights against any guarantor or other party, or pursued any other rights available under the Loan Documents or applicable law. The obligations of Trustor to indemnify the Indemnitees under this Section shall survive any repayment or discharge of the Secured Obligations, any foreclosure proceeding, any foreclosure sale, any delivery of any deed in lieu of foreclosure, and any release of record of the lien of this Deed of Trust. Without limiting any of the remedies provided in this Deed of Trust, Trustor acknowledges and agrees that each of the provisions in this Section 7.11 is an environmental provision (as defined in Section 736(f)(2) of the California Code of Civil Procedure) made by Trustor relating to real property security (the "Environmental Provisions"), and that Trustor's failure to comply with any of the Environmental Provisions will be a breach of contract that will entitle Beneficiary to pursue the remedies provided by Section 736 of the California Code of Civil Procedure ("Section 736") for the recovery of damages and for the enforcement of the Environmental Provisions. Pursuant to Section 736, Beneficiary's action for recovery of damages or enforcement of the Environmental Provisions shall not constitute an action within the meaning of Section 726(a) of the California Code of Civil Procedure or constitute a money judgment for a deficiency or a deficiency judgment within the meaning of Sections 580a, 580b, 580d, or 726(b) of the California Code of Civil Procedure. "Hazardous Materials" means any substance, material or waste which is or becomes regulated by any federal, state or local governmental authority, and includes 11 Final Predevelopment Loan Agreement I May 2015 1 Form of Deed of Trust Exhibit D without limitation (i) petroleum or oil or gas or any direct or indirect product or by- product thereof; (ii) asbestos and any material containing asbestos; (iii) any substance, material or waste regulated by or listed (directly or by reference) as a "hazardous substance", "hazardous material", "hazardous waste", "toxic waste", "toxic pollutant", "toxic substance", "solid waste" or "pollutant or contaminant" in or pursuant to, or similarly identified as hazardous to human health or the environment in or pursuant to, the Toxic Substances Control Act [15 U.S.C. Section 2601, et seq.]; the Comprehensive Environmental Response, Compensation and Liability Act [42 U.S.C. Section 9601, et seq.], the Hazardous Materials Transportation Authorization Act [49 U.S.C. Section 5101, et seq.], the Resource Conservation and Recovery Act [42 U.S.C. Section 6901, et seq.], the Federal Water Pollution Control Act [33 U.S.C. Section 1251], the Clean Air Act [42 U.S.C. Section 7401, et seq.], the California Underground Storage of Hazardous Substances Act [California Health and Safety Code Section 25280, et seq.], the California Hazardous Substances Account Act [California Health and Safety Code Section 25300, et seq.], the California Hazardous Waste Act [California Health and Safety Code Section 25100, et seq.], the California Safe Drinking Water and Toxic Enforcement Act [California Health and Safety Code Section 25249.5, et seq.], and the Porter-Cologne Water Quality Control Act [California Water Code Section 13000, et seq.], as they now exist or are hereafter amended, together with any regulations promulgated thereunder; (iv) any substance, material or waste which is defined as such or regulated by any "Superfund" or "Superlien" law, or any Environmental Law; or (v) any other substance, material, chemical, waste or pollutant identified as hazardous or toxic and regulated under any other federal, state or local environmental law, including without limitation, asbestos, polychlorinated biphenyls, petroleum, natural gas and synthetic fuel products and by-products. "Environmental Law" means all federal, state or local statutes, ordinances, rules, regulations, orders, decrees, judgments or common law doctrines, and provisions and conditions of permits, licenses and other operating authorizations regulating, or relating to, or imposing liability or standards of conduct concerning (i) pollution or protection of the environment, including natural resources; (ii) exposure of persons, including employees and agents, to any Hazardous Material (as defined above) or other products, raw materials, chemicals or other substances; (iii) protection of the public health or welfare from the effects of by-products, wastes, emissions, discharges or releases of chemical substances from industrial or commercial activities; (iv) the manufacture, use or introduction into commerce of chemical substances, including without limitation, their manufacture, formulation, labeling, distribution, transportation, handling, storage and disposal; or (iv) the use, release or disposal of toxic or hazardous substances or Hazardous Materials or the remediation of air, surface waters, groundwaters or soil, as now or may at any later time be in effect, including but not limited to the Toxic Substances Control Act [15 U.S.C. 2601, et seq.]; the Comprehensive Environmental Response, Compensation and Liability Act [42 U.S.C. Section 9601, et seq.], the Hazardous Materials Transportation Authorization Act [49 U.S.C. Section 5101, et seq.], the Resource Conservation and Recovery Act [42 U.S.C. 6901, et seq.], the Federal Water Pollution Control Act [33 U.S.C. Section 1251], the Clean Air Act [42 U.S.C. Section 7401, et seq.], the California Underground Storage of 12 Final Predevelopment Loan Agreement I May 2015 1 Form of Deed of Trust Exhibit D Hazardous Substances Act [California Health and Safety Code Section 25280, et seq.], the California Hazardous Substances Account Act [California Health and Safety Code Section 25300, et seq.], the California Hazardous Waste Act [California Health and Safety Code Section 25100, et seq.], the California Safe Drinking Water and Toxic Enforcement Act [California Health and Safety Code Section 25249.5, et seq.], and the Porter-Cologne Water Quality Control Act [California Water Code Section 13000, et seq.], as they now exist or are hereafter amended, together with any regulations promulgated thereunder. 7.12 Notice of Claims; Defense of Security: Reimbursement of Costs. a. Notice of Claims. Trustor shall provide written notice to Beneficiary of any uninsured or partially uninsured loss affecting the Property through fire, theft, liability, or property damage in excess of an aggregate of Fifty Thousand Dollars ($50,000) within five (5) business days of the occurrence of such loss. Trustor shall use its best efforts to ensure that Beneficiary shall receive timely notice of, and shall have a right to cure, any default under any other financing document or other lien affecting the Property and shall use best efforts to ensure that provisions mandating such notice and allowing such right to cure shall be included in all such documents. Within three business days of Trustor's receipt thereof, Trustor shall provide Beneficiary with a copy of any notice of default Trustor receives in connection with any financing document secured by the Property or any part thereof. b. Defense of Security. At Trustor's sole expense, Trustor shall protect, preserve and defend the Property and title to and right of possession of the Property, the security of this Deed of Trust and the rights and powers of Beneficiary and Trustee created under it, against all adverse claims. C. Compensation; Reimbursement of Costs. Trustor agrees to pay all reasonable fees, costs and expenses charged by Beneficiary or Trustee for any service that Beneficiary or Trustee may render in connection with this Deed of Trust, including without limitation, fees and expenses related to provision of a statement of obligations or related to a reconveyance. Trustor further agrees to pay or reimburse Beneficiary for all costs, expenses and other advances which may be incurred or made by Beneficiary or Trustee in any efforts to enforce any terms of this Deed of Trust, including without limitation any rights or remedies afforded to Beneficiary or Trustee or both of them under Sections 7.18 and 8.2, whether or not any lawsuit is filed, or in defending any action or proceeding arising under or relating to this Deed of Trust, including reasonable attorneys' fees and other legal costs, costs of any disposition of the Property under the power of sale granted hereunder or any judicial foreclosure, and any cost of evidence of title. d. Notice of Changes. Trustor shall give Beneficiary prior written notice of any change in the address of Trustor and the location of any property, including books and records pertaining to the Property. 13 Final Predevelopment Loan Agreement I May 2015 1 Form of Deed of Trust Exhibit D 7.13 Indemnification. Trustor shall indemnify, defend (with counsel reasonably acceptable to Beneficiary), and hold harmless the Trustee and the Indemnitees (as defined in Section 7.11) from and against all Claims arising directly or indirectly in any manner in connection with or as a result of (a) any breach of Trustor's covenants under any Loan Document, (b) any representation by Trustor in any Loan Document which proves to be false or misleading in any material respect when made, (c) injury or death to persons or damage to property or other loss occurring on the Land or in any improvement located thereon, whether caused by the negligence or any other act or omission of Trustor or any other person or by negligent, faulty, inadequate or defective design, building, construction or maintenance or any other condition or otherwise, (d) any claim, demand or cause of action, or any action or other proceeding, whether meritorious or not, brought or asserted against any Indemnitee which relates to or arises out of the Property, or any Loan Document or any transaction contemplated thereby, or any failure of Trustor to comply with all applicable state, federal and local laws and regulations applicable to the Property, provided that no Indemnitee shall be entitled to indemnification under this Section for matters caused by such Indemnitee's gross negligence or willful misconduct. The obligations of Trustor under this Section shall survive the repayment of the Loan and shall be secured by this Deed of Trust. Notwithstanding any contrary provision contained herein, the obligations of Trustor under this Section shall survive any foreclosure proceeding, any foreclosure sale, any delivery of a deed in lieu of foreclosure, and any release or reconveyance of this Deed of Trust. 7.14. Limitation of Liability. Beneficiary shall not be directly or indirectly liable to Trustor or any other person as a consequence of any of the following: (i) Beneficiary's exercise of or failure to exercise any rights, remedies or powers granted to Beneficiary in this Deed of Trust; (ii) Beneficiary's failure or refusal to perform or discharge any obligation or liability of Trustor under any agreement related to the Property or under this Deed of Trust; (iii) any waste committed by Trustor, the lessees of the Property or any third parties, or any dangerous or defective condition of the Property; or (iv) any loss sustained by Trustor or any third party resulting from any act or omission of Beneficiary in managing the Property after an Event of Default, unless the loss is caused by the willful misconduct, gross negligence, or bad faith of Beneficiary. Trustor hereby expressly waives and releases all liability of the types described in this Section 7.14 and agrees that Trustor shall assert no claim related to any of the foregoing against Beneficiary. 7.15 Insurance and Condemnation Proceeds. Subject to the rights of any senior lienholders, any award of damages in connection with any condemnation for public use of, or injury to the Property or any part thereof is hereby assigned and shall be paid to Beneficiary who may apply such moneys to any indebtedness secured hereby in such order as Beneficiary may determine, or at the option of Beneficiary the entire amount so collected or any part thereof may be released to Trustor. Such application or release shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. Notwithstanding the foregoing, so 14 Final Predevelopment Loan Agreement I May 2015 1 Form of Deed of Trust Exhibit D long as the value of Beneficiary's lien is not impaired, insurance and/or condemnation proceeds shall be used to repair and/or restore the Project. 7.16 Release, Extension, Modification. At any time and from time to time, without liability therefor and without notice, upon written request of Beneficiary and presentation of this Deed of Trust and the Note for endorsement, Trustee may release or reconvey all or any part of the Property, consent to the making of any map or plat of the Land or part thereof, join in granting any easement or creating any restriction affecting the Property, or join in any extension agreement or other agreement affecting the lien or charge hereof. At any time and from time to time, without liability therefor and without notice, Beneficiary may (i) release any person liable for payment of any Secured Obligation, (ii) extend the time for payment or otherwise alter the terms of payment of any Secured Obligation; (iii) accept additional real or personal property of any kind as security for any Secured Obligation, or (iv) substitute or release any property securing the Secured Obligations. 7.17 Reconveyance. Upon written request of Beneficiary stating that all of the Secured Obligations have been paid in full, and upon surrender of this Deed of Trust, and the Note, Trustee shall reconvey, without warranty, the Property or so much of it as is then held under this Deed of Trust. The recitals in any reconveyance executed under this Deed of Trust of any matters or facts shall be conclusive proof of the truthfulness thereof. Trustor shall pay all fees of Trustee and all recordation fees related to such reconveyance. 7.18 Cure; Protection of Security. Either Beneficiary or Trustee may cure any breach or default of Trustor, and if it chooses to do so in connection with any such cure, Beneficiary or Trustee may also enter the Property and/or do any and all other things which it may in its sole discretion consider necessary and appropriate to protect the security of this Deed of Trust. Such other things may include: appearing in and/or defending any action or proceeding which purports to affect the security of, or the rights or powers of Beneficiary or Trustee under, this Deed of Trust; paying, purchasing, contesting or compromising any encumbrance, charge, lien or claim of lien which in Beneficiary's or Trustee's sole judgment is or may be senior in priority to this Deed of Trust, such judgment of Beneficiary or Trustee to be conclusive as among Beneficiary, Trustee and Trustor; obtaining insurance and/or paying any premiums or charges for insurance required to be carried hereunder; otherwise caring for and protecting any and all of the Property; and/or employing counsel, accountants, contractors and other appropriate persons to assist Beneficiary or Trustee. Beneficiary and Trustee may take any of the actions permitted under this Section 7.18 either with or without giving notice, except for notices required under applicable law or under the Loan Documents. Any amounts disbursed by Beneficiary pursuant to this paragraph shall become additional indebtedness secured by this Deed of Trust. 7.19 Limited Partners Right to Cure. Trustor's limited partners shall have the right to cure any default of Trustor hereunder upon the same terms and conditions afforded to Trustor. Provided that Beneficiary has been given written notice of the address for delivery of notices to the limited partners, Beneficiary shall provide any 15 Final Predevelopment Loan Agreement I May 2015 1 Form of Deed of Trust Exhibit D notice of default hereunder to the limited partners concurrently with the provision of such notice to Trustor, and as to the limited partners, the cure periods specified herein shall commence upon the date of delivery of such notice in accordance with Section 10.2. 8. Default and Remedies. 8.1 Events of Default. Trustor acknowledges and agrees that an Event of Default shall occur under this Deed of Trust upon the occurrence of any one or more of the following events: a. Beneficiary's declaration of an Event of Default under any Loan Document, subject to the expiration of any applicable cure period set forth in such document; b. Trustor fails to perform any monetary obligation which arises under this Deed of Trust, and does not cure that failure within ten (10) days following written notice from Beneficiary or Trustee; C. If Trustor's interest in the Property or any part thereof is voluntarily or involuntarily sold, transferred, leased, encumbered, or otherwise conveyed in violation of Section 7.6 hereof or if any other Transfer occurs in violation of the Loan Agreement and Trustor fails to rescind such conveyance or otherwise cure such breach within the time period specified in paragraph j below; d. Trustor fails to maintain the insurance coverage required hereunder or otherwise fails to comply with the requirements of Section 7.10 hereof and Trustor fails to cure such default within the applicable time specified in Section 7.10; e. Subject to Trustor's right to contest such charges as provided herein, Trustor fails to pay taxes or assessments due on the Land or the Improvements or fails to pay any other charge that may result in a lien on the Land or the Improvements, and Trustor fails to cure such default within 10 days. f. Any representation or warranty of Trustor contained in or made in connection with the execution and delivery of this Deed of Trust or in any certificate or statement furnished pursuant hereto or in any other Loan Document proves to have been false or misleading in any material adverse respect when made; g. If, pursuant to or within the meaning of the United States Bankruptcy Code or any other federal or state law relating to insolvency or relief of debtors ("Bankruptcy Law"), Trustor or any general partner thereof (i) commences a voluntary case or proceeding; (ii) consents to the entry of an order for relief against Trustor or any general partner thereof in an involuntary case; (iii) consents to the appointment of a trustee, receiver, assignee, liquidator or similar official for Trustor or any general partner thereof; (iv) makes an assignment for the benefit of its creditors; or (v) admits in writing its inability to pay its debts as they become due. 16 Final Predevelopment Loan Agreement I May 2015 1 Form of Deed of Trust Exhibit D h. If a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that (i) is for relief against Trustor or any general partner thereof in an involuntary case, (ii) appoints a trustee, receiver, assignee, liquidator or similar official for Trustor or any general partner thereof or substantially all of such entity's assets, (iii) orders the liquidation of Trustor or any general partner thereof, or (iv) issues or levies a judgment, writ, warrant of attachment or similar process against the Property or the Project or any part thereof, and in each case the order or decree is not released, vacated, dismissed or fully bonded within 60 days after its issuance. i. The holder of any other debt instrument secured by a mortgage or deed of trust on the Property or part thereof declares an event of default thereunder and exercises a right to declare all amounts due under that debt instrument immediately due and payable, subject to the expiration of any applicable cure period set forth in such holder's documents; or j. Trustor fails to perform any obligation arising under this Deed of Trust other than one enumerated in this Section 8.1, and does not cure that failure either within ten (10) days after written notice from Beneficiary or Trustee in the event of a monetary default, or within thirty (30) days after such written notice in the event of a nonmonetary default, provided that in the case of a nonmonetary default that in Beneficiary's reasonable judgment cannot reasonably be cured within thirty (30) days, an Event of Default shall not arise hereunder if Trustor commences to cure such default within thirty (30) days and thereafter prosecutes such cure to completion with due diligence and in good faith and in no event later than sixty (60) days following receipt of notice of default or such longer period as Beneficiary may allow. 8.2 Remedies. Subject to the applicable notice and cure provisions set forth herein and the limited recourse provisions set forth in the Note, at any time after an Event of Default, Beneficiary and Trustee shall be entitled to invoke any and all of the rights and remedies described below, and may exercise any one or more or all, of the remedies set forth in any Loan Document, and any other remedy existing at law or in equity or by statute. All of Beneficiary's rights and remedies shall be cumulative, and the exercise of any one or more of them shall not constitute an election of remedies. Beneficiary shall be entitled to collect all expenses incurred in pursuing the remedies provided hereunder, including without limitation reasonable attorneys' fees and costs. a. Acceleration. Beneficiary may declare any or all of the Secured Obligations, including without limitation all sums payable under the Note and this Deed of Trust, to be due and payable immediately. b. Receiver. Beneficiary may apply to any court of competent jurisdiction for, and obtain appointment of, a receiver for the Property. C. Entry. Beneficiary, in person, by agent or by court-appointed receiver, may enter, take possession of, manage and operate all or any part of the Property, and may also do any and all other things in connection with those actions that Beneficiary may in its sole discretion consider necessary and appropriate to protect the 17 Final Predevelopment Loan Agreement I May 2015 1 Form of Deed of Trust Exhibit D security of this Deed of Trust. Such other things may include: taking and possessing copies of all of Trustor's or the then owner's books and records concerning the Property; entering into, enforcing, modifying, or canceling Leases on such terms and conditions as Beneficiary may consider proper; obtaining and evicting tenants; fixing or modifying Rents; collecting and receiving any payment of money owing to Trustor; completing any unfinished construction; and/or contracting for and making repairs and alterations. If Beneficiary so requests, Trustor shall assemble all of the Property that has been removed from the Land and make all of it available to Beneficiary at the site of the Land. Trustor hereby irrevocably constitutes and appoints Beneficiary as Trustor's attorney-in- fact to perform such acts and execute such documents as Beneficiary in its sole discretion may consider to be appropriate in connection with taking these measures, including endorsement of Trustor's name on any instruments. d. UCC Remedies. Beneficiary may exercise any or all of the remedies granted to a secured party under the UCC. e. Judicial Action. Beneficiary may bring an action in any court of competent jurisdiction to foreclose this Deed of Trust in the manner provided by law for foreclosure of mortgages on real property and/or to obtain specific enforcement of any of the covenants or agreements of this Deed of Trust. f. Power of Sale. Under the power of sale hereby granted, Beneficiary shall have the discretionary right to cause some or all of the Property, including any Property which constitutes personal property, to be sold or otherwise disposed of in any combination and in any manner permitted by applicable law. 8.3 Power of Sale. If Beneficiary elects to invoke the power of sale hereby granted, Beneficiary shall execute or cause the Trustee to execute a written notice of such default and of its election to cause the Property to be sold to satisfy the obligations hereof, and shall cause such notice to be recorded in the office of the Recorder of each County wherein the Property or some part thereof is situated as required by law and this Deed of Trust. Prior to publication of the notice of sale, Beneficiary shall deliver to Trustee this Deed of Trust and the Note or other evidence of indebtedness which is secured hereby, together with a written request for the Trustee to proceed with a sale of the Property, pursuant to the provisions of law and this Deed of Trust. Notice of sale having been given as then required by law, and not less than the time then required by law having elapsed after recordation of such notice of default, Trustee, without demand on Trustor, shall sell the Property at the time and place fixed by it in the 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, and at Beneficiary's request shall, postpone sale of all or any portion of the 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 and place fixed by the preceding postponement. Trustee 18 Final Predevelopment Loan Agreement I May 2015 1 Form of Deed of Trust Exhibit D shall deliver to the 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, may purchase at such sale. After deducting all costs, fees, and expenses of Trustee and of the trust hereby created, including reasonable attorneys' fees in connection with sale, Trustee shall apply the proceeds of sale to payment of all sums advanced or expended by Beneficiary or Trustee under the terms hereof and all outstanding sums then secured hereby, and the remainder, if any, to the person or persons legally entitled thereto. Without limiting the generality of the foregoing, Trustor acknowledges and agrees that regardless of whether or not a default has occurred hereunder, if an Event of Default has occurred under the Loan Documents, and if in connection with such Event of Default Beneficiary exercises its right to foreclose on the Property, then: (i) Beneficiary shall be entitled to declare all amounts due under the Note immediately due and payable, and (ii) the proceeds of any sale of the Property in connection with such foreclosure shall be used to pay all Secured Obligations, including without limitation, the outstanding principal balance and all other amounts due under the Note. At any foreclosure sale, any person, including Trustor, Trustee or Beneficiary, may bid for and acquire the Property or any part of it to the extent permitted by then applicable law. Instead of paying cash for such property, Beneficiary may settle for the purchase price by crediting the sales price of the property against the following obligations: a. First, the portion of the Secured Obligations attributable to the expenses of sale, costs of any action and any other sums for which Trustor is obligated to pay or reimburse Beneficiary or Trustee under Section 7.12(c); and b. Second, the remaining balance of all other Secured Obligations in any order and proportions as Beneficiary in its sole discretion may choose. 8.4 Trustor's Right to Reinstate. Notwithstanding Beneficiary's acceleration of the sums secured by this Deed of Trust, Trustor shall have the right to have any proceedings begun by Beneficiary to enforce this Deed of Trust discontinued at any time prior to five days before sale of the Property pursuant to the power of sale contained in this Deed of Trust or at any time prior to entry of a judgment enforcing this Deed of Trust if: (a) Trustor pays Beneficiary all sums which would be then due under the Loan Documents if the Secured Obligations had no acceleration provision; (b) Trustor cures all breaches of any other covenants or agreements of Trustor contained in this Deed of Trust; (c) Trustor pays all reasonable expenses incurred by Beneficiary and Trustee in enforcing the covenants and agreements of Trustor contained in this Deed of Trust, and in enforcing Beneficiary's and Trustee's remedies as provided herein, including, but not limited to, reasonable attorney's fees; and (d) Trustor takes such action as Beneficiary may reasonably require to assure that the lien of this Deed of Trust, Beneficiary's interest in the Property and Trustor's obligation to pay the sums 19 Final Predevelopment Loan Agreement I May 2015 1 Form of Deed of Trust Exhibit D secured by this Deed of Trust shall continue unimpaired. Upon such payment and cure by Trustor, this Deed of Trust and the obligations secured hereby shall remain in full force and effect as if no acceleration had occurred.. 9. Trustor's Waivers. To the fullest extent permitted by law, Trustor waives: (a) all statutes of limitations as a defense to any action or proceeding brought against Trustor by Beneficiary; (b) the benefit of all laws now existing or which may hereafter be enacted providing for any appraisement, valuation, stay, extension, redemption or moratorium; (c) all rights of marshalling in the event of foreclosure; and (d) all presentments, demands for performance, notices of nonperformance, protests, notices of protest, notices of dishonor, notices of acceptance of this Deed of Trust and of the existence, creation, or incurring of new or additional indebtedness, and demands and notices of every kind. 10. Miscellaneous Provisions. 10.1 Additional Provisions. The Loan Documents grant further rights to Beneficiary and contain further agreements and affirmative and negative covenants by Trustor which apply to this Deed of Trust and the Property. 10.2 Notices. Trustor requests that a copy of notice of default and notice of sale be mailed to Trustor at the address set forth below. That address is also the mailing address of Trustor as debtor under the UCC. Beneficiary's address set forth below is the address for Beneficiary as secured party under the UCC. Except for any notice required under applicable law to be given in another manner, all notices to be sent pursuant to this Deed of Trust shall be made in writing, and sent to the parties at their respective addresses specified below or to such other address as a party may designate by written notice delivered to the other parties in accordance with this Section. All such notices shall be sent by: a. personal delivery, in which case notice shall be deemed delivered upon receipt; b. certified or registered mail, return receipt requested, in which case notice shall be deemed delivered two (2) business days after deposit, postage prepaid in the United States mail; C. nationally recognized overnight courier, in which case notice shall be deemed delivered one (1) day after deposit with such courier; or d. facsimile transmission, in which case notice shall be deemed delivered on transmittal, provided that a transmission report is generated reflecting the accurate transmission thereof. 20 Final Predevelopment Loan Agreement I May 2015 1 Form of Deed of Trust Exhibit D BENEFICIARY: City of Dublin 100 Civic Plaza Dublin, CA 94568 Attention: City Manager Fax No. (925) 833-6651 TRUSTOR: Corona Crescent, Inc. 22645 Grand Street Hayward, CA 94541-5031 Attention: President Fax No. (510) 582-6523 With a copy to: Trustor's investor limited partner at its address to be provided. 10.3 Binding on Successors. The terms, covenants and conditions of this Deed of Trust shall be binding upon and inure to the benefit of the heirs, administrators, executors, successors in interest, transferees, and assigns of the Trustor, Beneficiary and Trustee; provided however this Section 10.3 does not waive the provisions of Section 7.6. 10.4 Substitution of Trustee. Beneficiary may from time to time or at any time substitute a trustee or trustees to execute the trust hereby created, and when any such substitution has been filed for record in the office of the Recorder of Alameda County, it shall be conclusive evidence of the appointment of such trustee or trustees, and such new trustee or trustees shall succeed to all of the powers and duties of the Trustee named herein. 10.5 Attorneys' Fees and Costs. In any action or proceeding to foreclose this Deed of Trust or to enforce any right of Beneficiary or of Trustee, Trustor shall pay to Beneficiary and Trustee all costs of such action or proceeding, including reasonable attorneys' fees. 10.6 Governing Law; Severability; Interpretation. This Deed of Trust shall be governed by the laws of the State of California without regard to principles of conflicts of laws. Trustor agrees that any controversy arising under or in relation to this Deed of Trust shall be litigated exclusively in the jurisdiction where the Land is located (the "Property Jurisdiction"). The state and federal courts and authorities with jurisdiction in the Property Jurisdiction shall have exclusive jurisdiction over all controversies which shall arise under or in relation to the Loan Documents. Trustor irrevocably consents to service, jurisdiction, and venue of such courts for any such litigation, and waives any other venue to which it might be entitled by virtue of domicile, habitual residence or otherwise. If any provision of this Deed of Trust is held unenforceable or void, that provision shall be deemed severable from the remaining provisions, and shall in no way affect the validity of this Deed of Trust. The captions used in this Deed of Trust are for convenience only and are not intended to affect the interpretation or construction of the 21 Final Predevelopment Loan Agreement I May 2015 1 Form of Deed of Trust Exhibit D provisions herein contained. In this Deed of Trust, whenever the context so requires, the singular number includes the plural. 10.7 Waiver, Modification and Amendment. Any waiver by Beneficiary of any obligation of Trustor hereunder must be in writing, and no waiver shall be construed as a continuing waiver. No waiver shall be implied from any delay or failure by Beneficiary or Trustee to take action on account of any default of Trustor. Consent by Beneficiary or Trustee to any act or omission by Trustor shall not be construed as a consent to any other or subsequent act or omission or to waive the requirement for Beneficiary's or Trustee's consent to be obtained in any future or other instance. No amendment to or modification of this Deed of Trust shall be effective unless and until such amendment or modification is in writing, executed by Trustor and Beneficiary. Without limiting the generality of the foregoing, Beneficiary's acceptance of payment of any sum secured hereby after its due date shall not constitute a waiver by Beneficiary of its right either to require prompt payment when due of all other sums so secured or to declare default for failure so to pay. 10.8 Action by Beneficiary. Except as may be otherwise specifically provided herein or required by law, whenever any approval, notice, direction, or consent by the Beneficiary is required or permitted under this Agreement, such action shall be in writing, and such action may be given, made or taken by Beneficiary's City Manager or by any person who shall have been designated by Beneficiary's City Manager, without further approval by the City Council of Beneficiary. 10.9 Joint and Several Liability. If Trustor consists of more than one person or entity, each shall be jointly and severally liable for the faithful performance of all of Trustor's obligations under this Deed of Trust. 10.10 Time is of the Essence. Time is of the essence for each provision of this Deed of Trust. 10.11 Partial Subordination to Extended Use Agreement. Trustor and the California Tax Credit Allocation Committee may enter into a Regulatory Agreement(s) (the "TCAC Extended Use Agreement"), which constitutes the extended low-income housing commitment described in Section 42(h)(6)(B) of the Internal Revenue Code, as amended (the "Code"). In the event of a foreclosure of Beneficiary's interest under this Deed of Trust or delivery by the Trustor of a deed in lieu thereof (collectively, a "Foreclosure"), the following rule shall apply: In the event of a Foreclosure, throughout the extended use period specified in the TCAC Extended Use Agreement, with respect to any unit that had been regulated by the TCAC Extended Use Agreement, (i) none of the eligible tenants occupying those units at the time of Foreclosure may be evicted or their tenancy terminated (other than for good cause, including but not limited to, the tenants' ineligibility pursuant to regulations of the HOME Program or Section 42 of the 22 Final Predevelopment Loan Agreement I May 2015 1 Form of Deed of Trust Exhibit D Code), (ii) nor may any rent be increased except as otherwise permitted under Section 42 of the Code. SIGNATURE ON FOLLOWING PAGE. 23 Final Predevelopment Loan Agreement I May 2015 1 Form of Deed of Trust Exhibit D IN WITNESS WHEREOF, Trustor has executed this Deed of Trust as of the date first written above. TRUSTOR: Corona Crescent, Inc., a California nonprofit public benefit corporation By: Name: Linda Mandolini Title: SIGNATURE MUST BE NOTARIZED. 24 Final Predevelopment Loan Agreement I May 2015 1 Form of Deed of Trust Exhibit D STATE OF CALIFORNIA ) COUNTY OF ALAMEDA ) On , 20 , before me, (here insert name and title of the officer), personally appeared , 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 (Seal) 25 Final Predevelopment Loan Agreement I May 2015 1 Form of Deed of Trust Exhibit D Exhibit A Legal Description of Land Real property in the City of Dublin, County of Alameda, State of California, described as follows: PARCEL D, AS SHOWN ON PARCEL MAP 2621, FILED DECEMBER 20, 1978 IN BOOK 107, PAGE 50 OF MAPS, ALAMEDA COUNTY RECORDS. EXCEPTING THEREFROM, THAT PORTION CONVEYED IN THE DEED TO THE COUNTY OF ALAMEDA, A POLITICAL SUBDIVISION OF THE STATE OF CALIFORNIA, RECORDED FEBRUARY 14, 2004 AS INSTRUMENT NO. 2002-073439 OF OFFICIAL RECORDS. APN: 941-1500-032-02 2385062.3 26 Final Predevelopment Loan Agreement I May 2015 1 Form of Deed of Trust Exhibit D Exhibit E PREDEVELOPMENT BUDGET Predevelopment Loan proceeds may be disbursed for predevelopment costs incurred by Borrower for predevelopment activities for the Project, including: Architecture Landscape architecture Engineering Joint trench Environmental Consultant fees (e.g. Financial/syndication, fair housing, relocation) Legal/organizational costs Planning, permit, and impact fees Site acquisition and predevelopment loan closing costs Site holding costs (insurance, real estate taxes, security) Financial application fees (TCAC tax credit fees, CDLAC bond fees, Section 8 application fee) Market study Appraisal 2437364.1 Final Predevelopment Loan Agreement I May 2015 Exhibit E Exhibit F INSURANCE REQUIREMENTS (a) Borrower and all contractors working on behalf of Borrower on the Project shall maintain a commercial general liability policy in the amount of One Million Dollars ($1,000,000) each occurrence, Two Million Dollars ($2,000,000) annual aggregate, together with Three Million Dollars ($3,000,000) excess liability coverage, or such other policy limits as City may require in its reasonable discretion, including coverage for bodily injury, property damage, products, completed operations and contractual liability coverage. Such policy or policies shall be written on an occurrence basis and shall name the Indemnitees as additional insureds. (b) Borrower and all contractors working on behalf of Borrower shall maintain a comprehensive automobile liability coverage in the amount of One Million Dollars ($1,000,000), combined single limit including coverage for owned and non-owned vehicles and shall furnish or cause to be furnished to City evidence satisfactory to City that Borrower and any contractor with whom Borrower has contracted for the performance of work on the Property or otherwise pursuant to this Agreement carries workers' compensation insurance as required by law. Automobile liability policies shall name the Indemnitees as additional insureds. (c) Upon commencement of construction work and continuing until issuance of the final certificate of occupancy or equivalent for the Project, Borrower and all contractors working on behalf of Borrower shall maintain a policy of builder's all-risk insurance in an amount not less than the full insurable cost of the Project on a replacement cost basis naming City as loss payee. Such insurance shall include coverage for risks of direct physical loss or damage, excluding the perils of earthquake, flood, and earth movement. (d) Upon completion of construction, Borrower shall maintain property insurance covering all risks of loss (other than earthquake and flood) for 100% of the replacement value of the Project with deductible, if any, in an amount acceptable to City, naming City as loss payee. (e) Companies writing the insurance required hereunder shall be licensed to do business in the State of California or shall be listed on the California Department List of Approved Surplus Line Insurers (LASLI) . Insurance shall be placed with insurers with a current A.M. Best's rating of no less than A: VII. The Commercial General Liability and comprehensive automobile policies required hereunder shall name the Indemnitees as additional insureds. Builder's Risk and property insurance shall name City as loss payee as its interests may appear. (f) Borrower shall furnish City with certificates of insurance in form acceptable to City evidencing the required insurance coverage and duly executed 2437364.1 Final Predevelopment Loan Agreement I May 2015 Exhibit F endorsements evidencing such additional insured status. The certificates shall contain a statement of obligation on the part of the carrier to notify City of any material adverse change, cancellation, termination or non-renewal of the coverage at least thirty (30) days in advance of the effective date of any such material adverse change, cancellation, termination or non-renewal. (g) If any insurance policy or coverage required hereunder is canceled or reduced, Borrower shall, within fifteen (15) days after receipt of notice of such cancellation or reduction in coverage, but in no event later than the effective date of cancellation or reduction, file with City a certificate showing that the required insurance has been reinstated or provided through another insurance company or companies. Upon failure to so file such certificate, City may, without further notice and at its option, procure such insurance coverage at Borrower's expense, and Borrower shall promptly reimburse City for such expense upon receipt of billing from City. (h) Coverage provided by Borrower shall be primary insurance and shall not be contributing with any insurance, or self-insurance maintained by City, and the policies shall so provide. The insurance policies shall contain a waiver of subrogation for the benefit of the City. Borrower shall furnish the required certificates and endorsements to City prior to the commencement of construction of the Project, and shall provide City with certified copies of the required insurance policies upon request of City. 2437364.1 Final Predevelopment Loan Agreement I May 2015 Exhibit F MANAGEMENT AND MARKETING PLAN AGREEMENT (To Memorialize the Points Preference System) This Management and Marketing Plan Agreement (this "Agreement") is dated as of , 20157 by and between the City of Dublin, a municipal corporation ("City") and Corona Crescent, Inc., a California nonprofit public benefit corporation ("Owner"). City and Owner are hereinafter collectively referred to as the "Parties." RECITALS A. The Parties have entered into or intend to enter into an Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants (the "Regulatory Agreement"), pertaining to an affordable rental housing project consisting of approximately 66 affordable rental housing units primarily for Veterans and their families and other Very Low and Low Income families and related improvements (the "Development") on Owner's property, identified as APN 941-1500-032-02. B. Pursuant to Section 2.5 of the Regulatory Agreement, applications for housing within the Development will be ranked in lottery and preference order and preference order will be determined based on a point preference system established by the City for this Development with priority given to Veterans. This preference system will be included in a plan for managing and marketing the project (the "Management and Marketing Plan"). C. The Parties have negotiated the points preference system to be included in the preliminary Management and Marketing Plan and now wish to enter into this Agreement to memorialize such terms. D. Except as otherwise defined herein, all capitalized terms used but not defined in this Agreement shall correspond to the defined terms in the Regulatory Agreement. NOW THEREFORE, in consideration of the foregoing, and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows. 1. Preference Points System. The Management and Marketing Plan, which Owner shall submit for City review and approval prior to construction of the Development, and which can be updated and/or revised pursuant to Section 6.4 of the Regulatory Agreement, shall set forth a points preference system as follows: Management&Marketing Plan I June 2015 Page 1 of 3 ATTACHMENT#4 Preference Points Qualifications Veteran 4 Families that, at the time of selection from the waiting list, Preference include a member who is a veteran. Veteran shall mean a person who served in the active United States military, naval, or air service and who was discharged or released from such service under conditions other than dishonorable. Dublin 1 Families that, at the time of selection from the waiting list, Live/Work reside in the city of Dublin, or include a member who works, or has been hired to work in the city of Dublin. Use of this preference will not have the purpose or effect of delaying or otherwise denying admission to the program based on the race, color, ethnic origin, gender, religion, disability, or age of any member of an applicant family. Senior 1 Sole persons 62 years of age or older -or- household made up exclusively of seniors (e.g. senior couple or senior siblings).2 Disabled 1 Families that, at the time of selection from the waiting list, include a member who is a person with disabilities. (Persons with disabilities include persons who have a disability as defined under the Social Security Act or Developmental Disabilities Care Act, or a person who has a physical or mental impairment expected to be of long and indefinite duration and whose ability to live independently is substantially impeded by that impairment but could be improved by more suitable housing conditions. This includes persons with AIDS or conditions arising from AIDS but excludes persons whose disability is based solely on drug or alcohol dependence). Within all categories, priority will be given to families that, at the time of selection from the waiting list, include a member who is a veteran or serviceperson. A veteran is a person who served in the active military, naval, or air service and who was discharged or released from such service under conditions other than dishonorable. A serviceperson is a person currently serving in the active military, naval, or air service. This "priority"will only be applied to the Section 8 project-based voucher units as is required of housing authorities under CA Health and Safety Code 34322.2. 2 For Section 8 project-based voucher units, the senior preference will be given only to sole persons 62 years of age or older, as required by 24 CFR 982.207(b)(5). 2449506.2 2 Management&Marketing Plan I June 2015 Page 2 of 3 The City's point system and preference order above shall supersede the points system in section 8.68.050 of the Dublin Municipal Code, and has been approved as an alternate means of compliance by the City Council pursuant to Dublin Municipal Code section 8.86.040(E). The point system and preference order shall not apply to applicants with VASH Vouchers. Units with Project Based Section 8 or other Rental Subsities shall be subject to their respective program requirements. 2 Amendments; Termination. This Agreement may be amended or modified only by a written instrument approved by the City Council and signed by both Parties. No waiver by City of any provision hereunder shall be effective unless approved by the City Council. Upon the City's written approval of the initial Management and Marketing Plan submitted by Owner in accordance with the Regulatory Agreement, which shall contain the above point preference system, this Agreement memorializing the points preference system shall have no further purpose and shall automatically terminate. 3. Notices. All notices to be sent pursuant to this Agreement shall be made in writing, and sent to the Parties in accordance with Section 11.3 of the Regulatory Agreement. 4. Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be an original and all of which together shall constitute one agreement. IN WITNESS WHEREOF, the Parties have executed this Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants as of the date first written above. CITY City of Dublin, a municipal corporation By: Christopher Foss, City Manager Attest: City Clerk Approved as to form: City Attorney DEVELOPER Corona Crescent, Inc. By: Linda Mandolini, 2449506.2 3 Management&Marketing Plan I June 2015 Page 3 of 3 CITY OF DUBLIN FISCAL YEAR 2014-15 BUDGET CHANGE FORM Budget Change Reference#: City Council's Approval Required,,,, From Un-Appropriated Reserves x Budget Transfer Between Funds From Designated Reserves Other DECREASE,BUDGET AMOUNT­ I,N CI EASE BUDGET AMOUNT Account Amount Account Amount Affordable Housing Fund -Housing -Housing Dev. Loan 2901.5701.66102 $5)0007000 Affordable Housing Fund -Professional Services (Legal) 2901.1501.65106 $757000 REASON,N FOR,BUDG'ET CHANGE, , On 11/18/14 the City Council approved to fund $6.4 million to Eden Housing for the Veterans Family Apartments project from the Affordable Housing Fund. This budget change of$5,075,000 is for construction costs ($5 million)and legal costs associated with the project($75,000). A$1.4 million loan for pre-development costs was approved on 01/20/15. As Presented at the City Council Meeting 5/5/2015 • Posted By: Date: C:\Users\agenda\Desktop\7.1 attch 8 7.1 attch 8