Agenda packet, joint meeting — Glendale City Council, May 24, 2022 (part 3 of 4)

PROMISSORY NOTE

TO THE HOUSING AUTHORITY

OF THE CITY OF GLENDALE
(LMIHAF)

0.75% Interest Glendale, California
$543,000 _____________________, 2022

FOR VALUE RECEIVED, HARROWER VILLAGE, L.P. , a California limited partnership (“Borrower”), hereby promises to pay to the HOUSING AUTHORITY OF THE CITY OF GLENDALE (“Authority”), a public body, corporate and politic, or order, a principal amount of FIVE HUNDRED FORTY -THREE THOUSAND DOLLARS ($543,000), being the principal amount of the Authority’s loan of LMIHAF construction to permanent funds (the “LMIHAF Loan”). This Note is given pursuant to that certain Affordable Housing Agreement dated as of May 24 , 2022, between Borrower and the Authority (the “Affordable Housing Agreement”) and evidences the LMIHAF Loan to Borrower, which provides part of the financing for the acquisition and development of that certain real property located at 912 and 920 East Broadway and 117 S. Belmont Street in the City of Glendale, legally described in the Deed of Trust securing this Note (the “Property”). The obligation of Borrower to Authority hereunder is subject to the terms of the Affordable Housing Agreement , this Note and the fol lowing instruments, each dated on or about the date hereof, and, where applicable, executed and delivered by Borrower for the purpose of securing this Note: an Agreement Containing Covenants (Including Rental Restrictions) (“Agreement Containing Covenants”); a Subordinated Leasehold Deed of Trust, Security Agreement and Fixture Filing (With Assignment of Rents) ( “Authority Deed of Trust”); an Assignment of Rents and Leases ( “Assignment of Rents ”); an Assignment of Agreements (“Assignment of Agreements”); and a UCC-1 Financing Statement. Said documents are public records on file in the offices of Authority, and the provisions of said documents are incorporated herein by this reference. The Borrower will pay interest at the rate, in the amount and at the time hereinafter provided.

1. Capitalized terms not otherwise defined herein will have the meaning ascribed to such term s in the Affordable Housing Agreement. In addition, the following terms have the following meanings:
“Acquisition and Development Costs” means the total cost of acquiring the Property and developing, rehabilitating and constructing the Improvements thereon, in accordance with the Affordable Housing Agreement.

“Affiliate” means any Person directly or indirectly controlling, controlled by or under common control with another Person. The term “control” as used in the immediately preceding sentence, means the power to direct the management or the power to control election of the board of directors. It will be a presumption that control with respect to a corporation or limited liability company is the right to exercise or control, directly or indirectly, more than fifty percent (50%) of the voting rights attributable to the co ntrolled corporation or limited liability company, and, with 274 of 482

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respect to any individual, partnership, trust, other entity or association, control is the possession, indirectly or directly, of the power to direct or cause the direction of the management or p olicies of the controlled entity. For purposes of this definition, each general partner will be considered an “Affiliate” of Borrower.

“Annual Financial Statement” means the annual audited financial statement of Revenue and Operating Expenses and balance sheet for the Improvements, prepared at the Borrower’s expense, by an independent certified public accountant reasonably acceptable to the Authority, which will form the basis for determining the Residual Receipts.

“Authority Deed of Trust ” means the Su bordinated Leasehold Deed of Trust, Security Agreement and Fixture Filing (with Assignment of Rents) executed by Borrower in favor of Authority and dated on or about the date hereof, which secures this Note and the LMIHAF Loan evidenced hereby.

“Authority’s Share of Residual Receipts ” will have the meaning set forth in Section 8, below.

“Construction Financing Event” means the point in time when all conditions precedent to the release of the Construction Loan funds and the Authority Loans funds have been satisfied, in accordance with the Affordable Housing Agreement.

“Construction Loan” means the Construction Period loan to be made to Borrower by Wells Fargo Bank, National Association (together with its successors and assigns, “Construction Lender”) at the time of the Construction Financing Event, secured by the Construction Loan Deed of Trust.

“Construction Loan Deed of Trust ” means the deed of trust securing the Construction Loan that is first in priority.

“Construction Period ” means the period of time commencing upon the Construction Financing Event and ending upon the repayment of the Construction Loan and the funding of the Permanent Loan.

“Conversion” means the point in time when the Permanent Loan has been funded, the additional Limited Partner Capital Contribution has been funded (less that portion, not to exceed 10%, of the Limited Partner Capital Contribution that will be funded upon receipt of Form(s) 8609), and the Construction Loan has been repaid in full.

“Deferred Developer Fee” means that portion of the Developer Fee which was not paid prior to the date of Conversion or from the proceeds of the Investor Limited Par tner’s capital contribution payable upon receipt of Forms 8609s with respect to the Project , and which will be paid from the Revenue remaining after payment of Operating Expenses, prior to any payment of Residual Receipts to the Authority. The term “Deferr ed Developer Fee” will include any loan or capital contribution made by a partner of Borrower to pay such deferred fee. 275 of 482

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“Developer Equity” means funds provided by the Borrower for payment of Acquisition and Development Costs and will not include the Senior Loan, the LMIHAF Loan, the Measure S Loan, the HOME Loan or any other borrowed funds, and will include the Deferred Developer Fee, the Investor Limited Partner’s capital contribution, as well as any other funds of the Borrower.

“Developer Fee” means the fee in the amount set forth in the Project Budget.

“Environmental Indemnity” means the indemnity in the form attached to the Affordable Housing Agreement as Attachment No. 18, which is incorporated herein by this reference.

“General Partner ” mean s Harrower Village GP, LLC a California limited liability company, and its authorized successors and assigns.

“Historic Rehabilitation Tax Credits ” means tax credits authorized by the Federal Historic Preservation Tax Incentives Program and governed by Section 47 of the Internal Revenue Code.

“HOME Loan” means the loan from the Authority to Borrower pursuant to the Affordable Housing Agreement as amended from time to time, in the amount of $1,800,000, which is evidenced by the HOME Loan Note and secured by the lien of the Authority Deed of Trust that is second in priority to the lien of the Senior Loan Deed of Trust.

“HOME Note” means the Promissory Note dated as of the date hereof, evidencing the HOME Loan.

“Improvements” means the 40-unit residential development and ancillary facilities to be constructed on the Property, all as described in the Affordable Housing Agreement.

“Investor Limited Partner” means Wincopin Circle LLLP, a Maryland limited liability limited partnership, and its successors and assigns.

“LMIHAF Loan” means the loan made by the Authority to Borrower in the maximum amount of $543,000, which is evidenced by this Note and secured by the Authority Deed of Trust.

“LMIHAF Loan Documents ” means this Note, the Authority Deed of Tru st, the Agreement Containing Covenants, the Assignment of Rents, the Assignment of Agreements, the Environmental Indemnity, and the UCC -1 Financing Statement, each dated on or about the date hereof.

“LMIHAF Note” means t his Note dated as of the date here of, evidencing the LMIHAF Loan.

“Low Income Housing Tax Credits” means tax credits authorized by the Tax Reform Act of 1986 and governed by Section 42 of the Internal Revenue Code. 276 of 482

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“Measure S Loan” means the loan made by the Authority to Borrower in the maximum amount of $8,357,000, which is evidenced by the Measure S Note and secured by the Authority Deed of Trust.

“Measure S Note” means the Promissory Note dated as of the date hereof, evidencing the Measure S Loan.

“Net Proceeds” means the proceeds of a sale, transfer or refinancing, less the customary and reasonable costs of the transaction.

“Operating Expenses” means actual, reasonable and customary costs, fees and expenses directly attributable to the operation, maintenance and management of the Property that are consistent with an annual independent audit performed by a certified public accountant using generally accepted accounting principles, expressly including, without limitation, payment of the following:

a. Principal and interest and all periodic fees and costs due and payable on the Senior Loan;
b. Property and other taxes and assessments imposed on the Project; c. A general partner partnership management fee to the General Partner of Borrower not to exceed $15,000 per year, to be increased at an annual rate of three percent (3%), which will accrue to the extent not paid;
d. General administrative expenses including but not limited to advertising and marketing, security services and systems and similar customary administrative expenses;
e. Maintenance and repair including but not limited to pest control, landscaping and grounds maintenance, painting and decorating, cleaning, common systems repairs, general repairs, janitorial, supplies, and similar customary services; f. Cash deposited into a replacement reserve fund in the amount of $300 per unit per year to be increased at an annual rate of zero percent (0%); g. Cash deposited into an operating reserve fund in such reasonable amounts as are required by Project lenders, the California Tax Credit Allocation Committee, and the Investor Limited Partner from time to time, and approved by the Authority; h. Utility services not paid fo r directly or reimbursed by tenants, including but not limited to water, sewer, trash collection, gas and electricity; i. License or certificate of occupancy fees required for operation of the Project; j. Premiums for property damage and liability insurance; k. Cable television, satellite and similar services;
l. Recreational amenities, supplies, programs, and services; 277 of 482

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m. Reasonable property management fee payable to a third party property manager acceptable to the Authority in an annual amount not to exceed 8.0% of Income (gross revenues from all leases and rents of all tenants occupying the Project; storage rental and payments or rentals received from concessionaires, licensees or lessees for the use or occupancy of the Project) pursuant to a management contract approved by the Authority;

n. A reasonable resident services coordinator fee payable to a coordinator and costs related to the operation of the resident services program, reasonably acceptable to the Authority;
o. Purchase, repair, servicing and installation o f appliances, equipment, fixtures and furnishings (other than from reserves);
p. Fees and expenses of accountants, attorneys, consultants and other professionals, including annual audits and tax return preparation costs payable to a third party ; and
q. An Asset Management Fee to the Investor Limited Partner in an amount not to exceed $5,000 per year, to be increased at an annual rate of three percent (3.0%); r. Payments required under the First Amended and Restated Agreement of Limited Partnership to the Investor Limited Partner for any credit adjusters and any tax liability of the Investor Limited Partner; and
s. A Project monitoring fee to the Authority in an amount equal to $3,900 per year.

Operating Expenses will not include the following: depreciation, amortization, depletion or other non-cash expenses, any amount expended from a reserve account, or the repayment under Borrower’s partnership agreement of operating expense loans or development deficit loans.

Operating Expenses will be subject to the reasonable approval of the Authority.

“Permanent Loan” means the initial permanent loan to be made to Borrower by Wells Fargo Bank, N.A. (together with its successors and assigns, “Permanent Lender”) at Conversion, secured by the Permanent Loan Deed of Trust.

“Permanent Loan Deed of Trust ” means the leasehold deed of trust securing the Permanent Loan that is first in priority.

“Permanent Period” means the period of time commencing upon the repayment of the Construction Loan and the funding of the Permanent Loan and payment of the Limited Partner Capital Contribution.

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further provided that such transfer is not to a Prohibited Person or would otherwise violate Anti- Terrorism Laws:
a. An assignment of the Affordable Housing Agreement and Borrower’s interests in the Property to an Affiliate or a conveyance back from the Affiliate to Borrower; b. A conveyance of a security interest in the Property or any portion thereof or interest therein, in connection with a Senior Loan;
c. The inclusion of equity participation in the Project by addition of limited partners to Borrower’s partnership or similar mechanism, and transfers of limited partnership interests in Borrower’s partnership;
d. The lease for occupancy of all or any part of the Improvements on the Property in accordance with the Affordable Housing Agreement;
e. The granting of easements or permits to facilitate the development of the Property in accordance with the Affordable Housing Agreement;
f. The withdrawal, removal and/or replacement of a general partner of Borrower’s partnership pursuant to the terms of Borrower’s partnership agreement, or a conveyance of Borrower’s interest in the Property and the Improvements and/or a transfer of limited partnership interests to a general partner or an affiliate of the Investor Limited Partner pursuant to the option provided to that partner in Borrower’s partnership agreement, will not constitute a default under th is Agreement or any of the LMIHAF Loan Documents, nor will such actions accelerate the maturity of the LMIHAF Loan, provided that any required substitute general partner is reasonably acceptable to the Authority, as evidenced by the Authority’s written consent, and is selected with reasonable promptness , provided that the consent of the Authority shall not be req uired for a replacement general partner that is an affiliate of Enterprise Community Asset Management, Inc.; and g. A transfer approved in writing by Authority’s Executive Director or designee, at his or her sole discretion.

A transfer described in clauses a ., b. , or c. will be subject to the reasonable approval of the Authority Executive Director or designee ; provided that, the Authority approves the transfer of limited partner interests in Borrower’s partnership, so long as such transfer is not a result of a resyndication of the Low Income Housing Tax Credits or the Historic Rehabilitation Tax Credits and does not otherwise result in increased equity participation in Borrower, and further provided that such transfer is not to a Prohibited Person or would otherwise violate Anti-Terrorism Laws.

“Person” means an individual, partnership, limited partnership, trust, estate, association, corporation, limited liability company, or other entity, domestic or foreign.

“Property” means the real property described a s the “Property” in and legally described as set forth in Exhibit “A” of the Authority Deed of Trust. 279 of 482

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“Residual Receipts” means the Revenue minus the Operating Expenses, calculat ed on a 12-month basis, minus the theretofore unpaid po rtion of the Deferred Developers Fee. All calculations of Residual Receipts will be subject to verification and reasonable approval by the Authority.

“Revenue” means the gross rental income from the Improvements, and any other income to the Borrower derived from the ownership, operation and management of the Property, including but not limited to the following: 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 m achines; the proceeds of business interruption or similar insurance; the proceeds of casualty insurance to the extent not utilized to repair or rebuild the Project; and condemnation awards for a taking of part or all of the Project for a temporary period. “Revenue” will also include the fair market value of any goods or services provided in consideration for the leasing or other use of any portion of the Project, except that the value of services provided by on-site manager(s) will not be treated as “Revenue” if no more than one dwelling unit is leased to or otherwise used by on-site manager(s). “Revenue” will not include tenants’ security deposits, proceeds from the Senior Loan, the Authority Loans, Developer Equity, including capital contributions or simil ar advances, or interest that is earned on and allocated to reserve accounts.

“Senior Loan” means the Construction Period loan made by Construction Lender (in its capacity as Servicer of the Construction Period loan) to Borrower in the approximate amount of $15,791,380 and the Permanent Loan to be made by Permanent Lender to Borrower to repay all or part of the Construction Loan in the approximate amount of $574,000, which will be secured by a deed of trust that is senior and superior to the Authority Deed of Trust, or any other loan secured by a deed of trust or other instrument to which the Authority agrees, in its sole discretion, to subordinate this Note and the Authority Deed of Trust.

“Term” of this Note means a term that expires on the fifty-fifth (55th) anniversary of the date of Conversion, but no later than December 31, 2082.

“Transfer” will have the meaning set forth in Section 11.e of this Note.

2. This Note evidences the obligation of the Borrower to the Housing Authority for the repayment of the LMIHAF Loan. None of the funds provided pursuant to the LMIHAF Loan were funded directly or indirectly with any obligation the interest on which is exempt from tax under Section 103 of the Internal Revenue Code of 1986, as amended, or pursuant to any United States government federal source.

3. This Note is payable at th e principal office of Authority, 141 North Glendale Avenue, Glendale, California 91206, or at such other place as the holder hereof may inform the Borrower in writing, in lawful money of the United States. 280 of 482

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4. This Note is secured by the Authority Deed of Trust.

5. This Note will bear 0.75% simple interest.

6. Except as described in Section 7 hereof, no payments will be due and payable under this Note except to the extent of (a) the Authority’s share of Residual Receipts as described in Section 8, below, and (b) any refinancing, Cost Savings , or Additional Proceeds, subject to the limitations set forth in Section 10, below.

7. The entire unpaid principal balance of this Note and any accrued but unpaid interest will be due and payable upon the expiration of the Term hereof, or immediately upon the occurrence of either of the following:
a. if the Property or any portion thereof or interest therein is sold, transferred, assigned or refinanced, without the prior written approval of the Authority, except as otherwise permitted in this Note, including a Permitted Transfer; or b. if there is a default by the Borrower under the terms of this Note, the Authority Deed of Trust, the Affordable Housing Agreement , the Agreement Containing Covenants, or any deed of trust or other instrument securing the Senior Loan or other obligations secured by a deed of trust on the Property, which is not cured within the respective time period provided herein and therein.

8. Prior to the expiration of the Term hereof, Borrower will be obligated to repay the LMIHAF Loan exclusively from the Authority’s share of Residual Receipts, as follows:
a. Annually, not later than the thirtieth (30th) day of April, beginning with the year following the year in which Conversion occurs, Borrower will submit to Authority an audited Annual Financial Statement for the preceding calendar year, prepared by a certified public accountant reasonably acceptable to the Authority, determining the amount of Residual Receipts, if any, generated in that year, together with payment of the Authority’s Share of such Residual Receipts. The first such Annual Financial Statement will be for the partial year beginning on the date of Conversion and ending on December 31 of that year. The Authority will review and approve such Annual Financial Statement, or request reasonable revisions, within 30 days after receipt. If as the result of the Authority’s review of the statement, there is an increase in the amount of any payment due and payable to Authority (as the result, for example, of a determination that the actual amount of Residual Receipts to which the Authority is entitled exceeds the amount of Authority’s share of Residual Receipts shown in the Annual Financial Statement submitted by Borrower), Borrower will promptly pay to the Authority the difference, with interest, from the date on which such payment was due, at the rate of one percent (1%) over the Pr ime Rate announced by Bank of America, but in any event within ten (10) days of notice of such increase. b. The Authority’s Share of Residual Rece ipts to be applied to this Note , the Measure S Note, and the HOME Note will be 75%. The Authority’s Share of Resi dual Receipts will be applied to the HOME Note, the LMIHAF Note, and the Measure S Note as follows: 16.82% (i.e., $1,800,000/$10,700,000) will be applied to this Note, 5.07% (i.e., $543,000/$ 10,700,000) 281 of 482

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will be applied to the LMIHAF Note, and 78.10% (i.e., $8,357,000/$10,700,000) will be applied to the Measure S Note.

9. All payments applie d to this Note will be applied first to penalties and late fees, then to interest, then to reduce the principal amount owed.

10. The LMIHAF Loan evidenced by this Note is based on the assumption that, upon completion and stabilization, all Acquisition and Development Costs will be $29,468,731 and the maximum amount of the Permanent Loan to be secured by a first priority deed of trust will be $574,000. To induce Authority to make the LMIHAF Loan evidenced hereby, Borrower covenants and agrees as follows:
a. If Borrower obtains a Permanent Loan in a principal amount in excess of $574,000, Borrower will apply an amount equal to fifty percent (50%) of the proceeds thereof in excess of $574,000 (the “Additional Proceeds”) to pay accrued interest on, and then reduce the principal amount of the LMIHAF Loan, the Measure S Loan, and the HOME Loan, except to the extent such Additional Proceeds are needed to either pay for cost overruns for which no other funds are available (other than from Borrower’s general partners) or to compensate for reductions in other permanent financing sources . If at any time Borrower refinances the Permanent Loan, Borrower will apply the Net Proceeds of any such refinancing first to pay previously incurred Operating Expenses (as defined above) still owing, then fifty percent (50%) of the balance will be paid to the Authority to pay accrued interest on, and then reduce the princi pal amount of the LMIHAF Loan, the Measure S Loan, and the HOME Loan.
b. If there are Cost Savings with respect to the Project, the following will occur: (1) to the extent of fifty percent (50%) of the Cost Savings, any undisbursed amount of the Authority Loans plus any undisbursed capital contributions made by the Investor Limited Partner payable at Conversion and upon receipt of Forms 8609 in excess of the amounts needed to pay developer fee from such capital contributions will be released to the Authorit y as a payment of accrued interest on and then reduction of the principal amount of the Authority Loans; and (2) each Lender’s unfunded commitment will terminate. For purposes hereof, “Cost Savings”, shall mean the difference between the total sources of funds and the total cost of development as shown in the Borrower’s cost certification contained in Borrower’s application to the California Tax Credit Allocation Committee for a Form 8609 for the Project (“Tax Credit Report”); provided, however, the Cost Savings will be adjusted to take into account (i) the loss of any equity investment due to an adjustment in the allowable tax credits; provided that the tax credit factor applied to the required equity contribution will be as set forth in Borrower’s limited partnership agreement; and (ii) any reduction in the first mortgage loan required by the Senior Loan Documents. The amount payable to Authority under this paragraph will be paid within sixty (60) days following submittal of the Tax Credit Report to the California Tax Credit Allocation Committee.

11. Prohibitions on Transfer.
a. Prior to the repayment in full of the LMIHAF Loan and expiration of the Term of the Agreement Containing Covenants , the Borrower must not, except for Permitted Transfers or as permitted b y the Affordable Housing Agreement, assign or attempt to assign the 282 of 482

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Affordable Housing Agreement or this Note or any right therein or herein, nor make any total or partial sale, transfer, conveyance or assignment of the whole or any part of the Property (r eferred to hereinafter as a “ Transfer”), without prior written approval of the Authority, except as expressly permitted by the Affordable Housing Agreement or this Note. Consent to one such transaction will not be deemed to be a waiver of the right to require consent to future or successive transactions. Authority shall not unreasonably withhold or delay its consent. If consent should be given, any such transfer shall be subject to this Section 11, and any such transferee shall assume all obligations hereunder and agree to be bound by all provisions contained herein.

b. Proposed transferees (other than an Affiliate of Borrower) must have the qualifications and financial responsibility necessary and adequate as may be reasonably determined by the Authority, to fulfill Borrower’s obligations undertaken in the Affordable Housing Agreement, the Agreement Containing Covenants, and this Note. A proposed transferee (including an Affiliate of Borrower), by instrument in writing satisfactory to the Authority and in form recordable among the land records, for itself and its successors and assigns, and for the benefit of the Authority must expressly assume all of Borrower’s obligations under the Affordable Housing Agreement, the Agreement Containing Covenants, and this Note and agree to be subject to all conditions and restrictions applicable to Borrower. There must be submitted to the Authority for review all instruments and other legal documents proposed to affect any such transfer; and if approved by the Authority its approval will be indicated to Borrower in writing. If consent should be given, such transfer will be subject to this Section 11. c. In the absence o f specific written agreement by the Authority, no unauthorized Transfer, or approval thereof by the Authority, will be deemed to relieve the Borrower or any other party from any obligations under the Affordable Housing Agreement, the Agreement Containing Covenants, or this Note.
d. In the event of a Transfer prior to the time the LMIHAF Loan is paid in full without the prior written consent of the Authority, the remaining principal balance of the LMIHAF Loan and all accrued but unpaid interest will be immediately due and payable. e. As used herein, “Transfer” means
i. the sale, agreement to sell, transfer or conveyance of the Property, the Project, or any portion thereof or interest therein (including, without limitation, a beneficial interest), whether voluntary, involuntary, by operation of law or otherwise, the execution of any installment sale contract or similar instrument affecting all or a portion of the Property or Project, or the lease of all or substantially all of the Property or Project. ii. “Transfer” also includes the transfer, assignment, hypothecation or conveyance of legal or beneficial ownership of an interest in Borrower, or a conversion of Borrower to an entity form other than that of Borrower at the time of execution of the Affordable Housing Agreement, except that, a cumulative change in ownership interest of a general partner of Borrower of forty -nine percent (49%) or less or a “Permitted Transfer” will not be deemed a “Transfer” for purposes of this Note.
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12. The Authority will not unreasonably withhold, condition, or delay its approval of any matter for which its appr oval is required hereunder. The Authority’s disapproval will be in writing and contain the Authority’s reasons for disapproval.

13. The LMIHAF Loan is funded from the Authority’s LMIHAF. Accordingly, Borrower agrees for itself, its successors and assigns that the use of the property will be subject to the restrictions on rent and occupancy set forth in the Agreement Containing Covenants.

14. Subject to the provisions and limitations of this Section 14, the obligation to repay the LMIHAF Loan is a nonrecourse obligation of the Borrower. Borrower and each general partner or limited partner of Borrower will not have any personal liability for repayment of the loan, except as provided in this Section 14. The sole re course of Authority will be the exercise of its rig hts against the Property and other security for the LMIHAF Loan. Provided, however, that the foregoing will not (a) constitute a waiver of an obligation evidenced by this Note or the Authority Deed of Trust; (b) limit the right of the Authority to name Borrower as a party defendant in any action or suit for judicial foreclosure and sale under this Note and the Authority Deed of Trust or any action or proceeding hereunder so long as no judgment in the nature of a deficiency judgment will be asked for or taken against Borrower; (c) release or impair this Note or the Authority Deed of Trust; (d) prevent or in any way hinder the Authority from exercising, or constitute a defense, an affirmative defense, a counterclaim, or other basis for relief in respect of the exercise of, any other remedy again st the mortgaged Property or other instrument securing the Note or as prescribed by law or in equity in case of default; (e) prevent or in any way hinder the Authority from exercising, or constitute a defense, an affirmative defense, a counterclaim, or other basis for relief in respect of the exercise of , its remedies in respect of deposits, insurance proceeds, condemnation awards or other monies or other collateral or letters of credit securing this Note; (f) relieve Borrower of its obligations under an indemnity delivered by Borrower to Authority; or (g) affect in any way the validity of a guarantee or indemnity from any person of all or any of the obligations evidenced and secured by this Note and the Authority Deed of Trust. The foregoing provisions of this paragraph are limited by the provision that in the event of the occurrence of a default, Borrower and its successors and assigns will have personal liab ility hereunder for any deficiency judgment, but only if and to the extent Borrower, its principals, shareholders, partners or its successors and assigns received rentals, other revenues, or other payments or proceeds in respect of the mortgaged Property after the occurrence of such default , which rentals, other revenues, or other payments or proceeds have not been used for the payment of ordinary and reasonable operating expenses of the mortgaged Property, ordinary and reasonable capital improvements to the mortgaged Property, debt service, real estate taxes in respect of the mortgaged Property and basic management fees, but not incentive fees, payable to an entity or person unaffiliated with Borrower in connection with the operation of the mortgaged Property, which are then due and payable. Notwithstanding the first sentence of this paragraph, Authority may recover directly from Borrower or from any other party (other than Borrower’s Investor Limited Partner):
a. damages, costs and expenses incurred by the Authority as a result of fraud or criminal act or acts of Borrower or a partner, shareholder, officer, director or employee of Borrower, or of a member or general or limite d partner of Borrower, or of a general or limited partner of such member or general or limited partner;
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b. damages, costs and expenses incurred by Authority as a result of misappropriation of funds provided for the payment of Acquisition and Development Costs , as described in the Affordable Housing Agreement , rents and revenues from the operation of the Project, or proceeds of insurance policies or condemnation proceeds; c. all amounts owing by Borrower pursuant to the indemnification regarding Hazardous Substances under the Environmental Indemnity, and d. all court costs and attorneys ’ fees reasonably incurred in enforcing or collecting upon any of the foregoing exceptions (provided that Authority will pay Borrower’s reasonable court costs and attorneys’ fees if Borrower is the prevailing party in such enforcement or collection action).

15. Borrower waives presentment for payment, demand, protest, and notices of dishonor and of protest; the benefits of all waivable exemptions; and all defenses and pleas on the ground of an extension or extensions of the time of payment or of a due date under this Note, in whole or in part, whether before or after maturity and with or without notice. Borrower hereby agrees to pay all costs and expenses, including reasonable attorney’s fees, which may be incurred by the holder hereof, in the enforcement of thi s Note, the Authority Deed of Trust or any term or provision of either thereof.

16. Upon the failure of Borrower to perform or observe a term or provision of this Note, or upon the occurrence of an event of default under the terms of the Authority Deed of Trust, the Affordable Housing Agreement, the Agreement Containing Covenants, or a deed of trust securing a Senior Loan, or other obligations secured by a deed of trust on the Property, and after expiration of the applicable cure period , the holder may exercise its rights or remedies hereunder or thereunder.

17. Defaults and Remedies.
a. Subject to the extensions of time set forth in Section 18, and subject to the further provisions of this Secti on 17, failure or delay by Borrower to perform a material term or provision of this Note, the Authority Deed of T rust, the Affordable Housing Agreement, the Agreement Containing Covenants, or a deed of trust securing a Senior Loan, or other obligations secured by a deed of trust on the Property, constitutes a default under this Note. b. The Authority will give written notice of default to Borrower and the Investor Limited Partner, specifying the default complained of by the Authority. Delay in giving such notice will not constitute a waiver of any default nor will it change the time of default. c. Failures or delays by the Authority in asserting its rights and remedies as to a default will not operate as a waiver of default or of such rights or remedies. Delays by the Authority in asserting its rights and remedies will not deprive the Authority of its right to institute and maintain actions or proceedings which it may deem necessary to protect, assert, or enforce such rights or remedies.
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d. If a monetary event of default occurs under the terms of this Note or the Authority Deed of Trust, or a deed of trust securing a Senior Loan, or other obligations secured by a deed of trust on the Property, prior to exercising its remedies hereunder or thereunder the Authority will give Borrower, each general partner, and the Investor Limited Partner, concurrent written notice of such default. Borrower will have a reasonable period of time after such notice is given within which to cure the default prior to exercise of remedies by the Authority under this Note and the Authority Deed of Trust. In no event will the Authority be precluded from exercising remedies if its security becomes or is about to become materially impa ired by a failure to cure a default or the default is not cured within ten (10) calendar days after the notice of default is received or deemed received.
e. If a non-monetary event of default occurs under the terms of the Affordable Housing Agreement, this Note, the Authority Deed of Trust, the Agreement Containing Covenants, or a document implementing the Affordable Housing Agreement or a deed of trust securin g a Senior Loan or other obligations secured by a deed of trust on the Property, prior to exercising its remedies hereunder or thereunder, the Authority will give Borrower, each General Partner, and the Investor Limited Partner, concurrent notice of such default. If the default is reasonably capable of being cured within thirty (30) calendar days after such notice is received or deemed received, Borrower will have such period to effect a cure prior to exercise of remedies by the Authority under the Affordable Housing Agreement, the Agreement Containing Covenants, this Note and/or the Authority Deed of Trust. If the default is such that it is not reasonably capable of being cured within thirty (30) days, and Borrower (i) initiates corrective action within s aid period, and (ii) diligently and in good faith works to effect a cure as soon as possible, then Borrower will have such additional time as is reasonably necessary to cure the default prior to the Authority’s exercise of remedies. If Borrower fails to ta ke corrective action or to cure the default within the time set forth above in this Subsection 17.e, the Authority will give Borrower , the Senior Lender , the Investor Limited Partner written notice thereof, whereupon the Investor Limited Partner, subject to the terms of Borrower ’s partnersh ip agreement, may take such corrective action, including removing and replacing a general partner. The Investor Limited Partner will have 90 days, or such longer period as is approved by the Authority Executive Director or designee, to remove and replace such general partner of Borrower. The Authority agrees to accept cures tendered by a Senior Lender or the Investor Limited Partner within the time period provided herein. Additionally, in the event the Senior Lender , or Investor Limited Partner is precluded from curing a non - monetary default due to a bankruptcy, injunction, or similar proceeding by or against Borrower or a general partner , the Authority agrees to forbear from completing a foreclosure (judicial or nonjudicial) during the period during which such party is so precluded from acting, not to exceed 90 days or such additional time as is reasonably approved by the Authority Executive Director or designee, provided such Senior Lender or Investor Limited Partner is otherwise in compliance with the foregoing provisions. In no event will Authority be precluded from exercising remedies if its security becomes or is about to become materially jeopardized by a failure to cure a default or the default is not cured within one hundred eighty (180) days after the notice of default is received or deemed received or such additional time as is reasonably approved by the Authority Executive Director or designee.
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f. A notice of default that is transmitted by electronic facsimile transmission followed by delivery of a “hard” copy, will be deemed delivered upon its transmission; a notice of default that is personally delivered (including by means of professional messenger service, courier service such as United Parcel Service or Federal Express, or by U.S. Pos tal Service), will be deemed received on the documented date of receipt by Borrower; and a notice of default that is sent by registered or certified mail, postage prepaid, return receipt required will be deemed received on the date of receipt thereof. Notices will be sent to the following addresses:

To Authority:

HOUSING AUTHORITY OF

THE CITY OF GLENDALE
141 N. Glendale Avenue, Room 202,
Glendale, California 91206
Attention: Executive Director
Facsimile: 818-548-3724

With a copy to:

KANE, BALLMER & BERKMAN
515 S. Figueroa St., Suite 780
Los Angeles, California 90071-3301
Attention: Susan Apy

To Borrower:

Harrower Village, L.P.
c/o Abode Communities
1149 S. Hill Street, Suite 700
Los Angeles, California 90015
Attn: Lara Regus
Facsimile: 213-225-2709

With a copy to:

Enterprise Housing Credit Investments, LLC
70 Corporate Center
11000 Broken Land Parkway, Suite 700
Columbia, MD 21044
Attn: Reagan Maechling

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transportation, governmental restrictions or priority, litigation, unusually severe weather, inability to secure necessary labor, material or tools, delays of any contractor, sub -contractor or supplier, acts of the Authority or any other public or governmental Authority or entity, or any causes beyond the control or without the fault of the Borrower. An extension of time for any such cause (a “Force Majeure Delay”) will be for the period of the enforced delay and will commence to run from the time of the commencement of the cause, if notice by Borrower is sent to the Authority within fifteen (15) days of knowledge of the commencement of the cause. Notwithstanding the foregoing, none of the foregoing events will constitute a Force Majeure Delay unless and until Borrower delivers to the Authority written notice describing the event, its cause, when and how Borrower obtained knowledge, the date and the event commenced, and the estimated delay resulting therefrom. Borrower will deliver such written notice within fifteen (15) days after it obtains actual knowledge of the event. Times of performance under this Note may also be extended in writing by the Authority and Borrower, such revision approval may be denied by either party in its sole discretion.

19. If the rights created by this Note are held by a court of competent jurisdiction to be invalid or unenforceable as to any part of the obligations described herein, the remaining obligations must be completely performed and paid.

20. The Authority Deed of Trust securing this Note and all other LMIHAF Loan Documents, except the Agreement Containing Covenants, have been made subordinate and junior to the claims, liens or charges of the Construction Loan Deed of Trust and all other instruments securing the Construction Loan by that certain Subordination Agreement by and among Authority, Borrower and Construction Lender which is being recorded concurrently with the execution and delivery of this Note and the recorda tion of the Authority Deed of Trust and will also be subordinate and junior to the claims, liens or charges of the Permanent Loan Deed of Trust and all other instruments securing the Permanent Loan.

21. The Authority agrees that the lien of the Authority Deed of Trust will be subordinate to the extended low-income housing commitment (as such term is defined in Section 42(h)(6)(B) of the Internal Revenue Code) (the “Extended Use Agreement”) recorded against the Project; provided that such Extended Use Agreement, by its terms, must terminate upon foreclosure under the Authority Deed of Trust or upon a transfer of the Project by instrument in lieu of foreclosure or comparable conversion of the Loan, in accordance with Section 42(h)(6)(E) of the Internal Revenue Cod e. The following rule contained in Section 42(h)(6)(E)(ii) of the Internal Revenue Code of 1986, as amended, will also apply: for a period of three (3) years from the date of foreclosure, with respect to any unit that had been regulated by the Extended Use Agreement, (i) none of the tenants occupying those units at the time of foreclosure may be evicted or their tenancy terminated (other than for good cause), (ii) nor may any rent be increased except as otherwise permitted under Section 42 of the Code. Bor rower acknowledges and agrees that a default, event of default, or breach (however such terms may be defined) under the Extended Use Agreement will be an event of default under this Note and the Authority Deed of Trust and that all costs, damages or other amounts, including reasonable attorneys ’ fees incurred by the Authority as a result of an event of default by Borrower, and all amounts paid by Authority to cure 288 of 482

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a default under the Extended Use Agreement will be an obligation of Borrower and become a part of the debt evidenced by this Note and secured by the Authority Deed of Trust.

22. With regard to an approval, consent , or other determination by the Authority required under this Note or the other LMIHAF Loan Documents, the Authority will act reasonably and in good faith.

23. Borrower will have the right to prepay the obligation evidenced by this Note, or any part thereof, without penalty. However, prepayment of the obligation evidenced by this Note prior to the expiration of the term o f the Agreement Containing Covenants will not entitle Borrower to a reconveyance of the Authority Deed of Trust.

24. This Note may be executed by each signatory on a separate signature page, and when the executed signature pages are combined, shall constitute one single instrument.

25. The indebted ness evidenced by this Note is and shall be subordinate in right of payment to the prior payment in full of the indebtedness evidenced by a Note dated on or about the date hereof in the original principal amount of $____________ [DRAFTING NOTE: WE

WILL NEED TO FILL IN AN AMOUNT BEFORE THE NOTE IS SIGNED IN THE AMOUNT IN THE APPROVED PROJECT BUDGET] issued by Borrower, and payable to Wells Fargo Bank, National Association, or order, to the extent, in the manner provided, and subject to the terms and conditions in that certain Subordination Agreement dated on or about the date hereof between the Senior Lender and the Authority and consented to by the Borrower (the “Subordination Agreement”) for so long as such Subordination Agreement shall be in force and effect. The Authority Deed of Trust securing this Note is and shall be subject and subordinate in all respects to the liens, terms, covenants and conditions of the Authority Deed of Trust securing the Note, for so long as such Subordination Agreement shall be in force and effect and to the extent, in the manner provided, and subject to the terms and conditions of the Subordination Agreement. The rights and remedies of the payee and each subsequent holder of this Note under the Authority Deed of Trust securing this Note are subject to the restrictions and limitations set forth in the Subordination Agreement, to the extent, in the manner provided, and subject to the terms and conditions of the Subordination Agreement for so long as such Subordination Agreement shall be in force and effect.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

[SIGNATURES ON FOLLOWING PAGE]

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912 and 920 East Broadway & 117 S. Belmont Street
LMIHAF Note
S-1

IN WITNESS WHEREOF Borrower has executed this Note as of the day and year first set forth above.

BORROWER

HARROWER VILLAGE, L.P.,
a California limited partnership

by: Harrower Village GP, LLC,
a California limited liability company,
its general partner

by: Abode Communities,
a California nonprofit public benefit corporation,
its sole and managing member

Dated: __________, 2022 By:___________________________ Lara Regus
Senior Vice President

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PROMISSORY NOTE

TO THE HOUSING AUTHORITY

OF THE CITY OF GLENDALE
(MEASURE S FUNDS)

0.75% Interest Glendale, California
$8,357,000 _____________________, 2022

FOR VALUE RECEIVED, HARROWER VILLAGE, L. P., a California limited partnership (“Borrower”), hereby promises to pay to the HOUSING AUTHORITY OF THE CITY OF GLENDALE (“Authority”), a public body, corporate and politic, or order, a principal amount of EIGHT MILLION THREE HUNDRED FIFTY-SEVEN THOUSAND DOLLARS ($8,357,000), being the principal amount of the Authority’s loan of Measure S combined acquisition and construction to permanent funds (the “Measure S Loan”). This Note is given pursuant to that certain Affordable Housing Agree ment dated as of May 24 , 2022, between Borrower and the Authority (the “Affordable Housing Agreement”) and evidences the Measure S Loan to Borrower, which provides part of the financing for the acquisition and development of that certain real property located at 912 and 920 East Broadway and 117 S. Belmont Street in the City of Glendale, legally described in the Deed of Trust securing this Note (the “Property”). The obligation of Borrower to Authority hereunder is subject to the terms of the Affordable Housing Agreement, this Note and the following instruments, each dated on or about the date hereof, and, where applicable, executed and delivered by Borrower for the purpose of securing this Note: an Agreement Containing Covenants (Including Rental Restri ctions) (“Agreement Containing Covenants”); a Subordinate d Leasehold Deed of Trust, Security Agreement and Fixture Filing (With Assignment of Rents) ( “Authority Deed of Trust”); an Assignment of Rents and Leases (“Assignment of Rents”); an Assignment of Agreements (“Assignment of Agreements”); and a UCC-1 Financing Statement. Said documents are public records on file in the offices of Authority, and the provisions of said documents are incorporated herein by this reference. The Borrower will pay interest at the rate, in the amount and at the time hereinafter provided.

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“Authority Deed of Trust ” means the Subordinated Leasehold Deed of Trust, Security Agreement and Fixture Filing (with Assignment of Rents) executed by Borrower in favor of Authority and dated on or about the date hereof, which secures this Note and the Measure S Loan evidenced hereby.

“Authority’s Share of Residual Receipts ” will have the meaning set forth in Section 8, below.

“Construction Loan Deed of Trust ” means the deed of trust securing the Construction Loan that is first in priority.

“Construction Period ” means the period of time commencing upon the Construction Financing Event and ending upon the repayment of the Construction Loan and the funding of the Permanent Loan.

“Deferred Developer Fee” means that portion of the Developer Fee which was not paid prior to the date of Conversion or from the proceeds of the Investor Limited Part ner’s capital contribution payable upon receipt of Forms 8609s with respect to the Project , and which will be paid from the Revenue remaining after payment of Operating Expenses, prior to any payment of Residual Receipts to the Authority. The term “Deferre d Developer Fee” will include any loan or capital contribution made by a partner of Borrower to pay such deferred fee. 292 of 482

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“Developer Fee” means the fee in the amount set forth in the Project Budget.

“Environmental Indemnity” means the indemnity in the form attached to the Affordable Housing Agreement as Attachment No. 18, which is incorporated herein by this reference.

“General Partner ” means Harrower Village GP, LLC , a California limited liability company, and its authorized successors and assigns.

“Historic Rehabilitation Tax Credits ” means tax credits authorized by the Federal Historic Preservation Tax Incentives Program and governed by Section 47 of the Internal Revenue Code.

“HOME Note” means the Promissory Note dated as of the date hereof, evidencing the HOME Loan.

“Improvements” means the 40-unit residential development and ancillary facilities to be constructed on the Property, all as described in the Affordable Housing Agreement.

“Investor Limited Partner” means Wincopin Circle LLLP, a Maryland limited liability limited partnership, and its successors and assigns.

“LMIHAF Loan” means the loan made by the Authority to Borrower in the maximum amount of $543,000, which is evidenced by the LMIHAF Note and secured by the Authority Deed of Trust.

“LMIHAF Note” means the Promissory Note dated as of the dat e hereof, evidencing the LMIHAF Loan.

“Low Income Housing Tax Credits” means tax credits authorized by the Tax Reform Act of 1986 and governed by Section 42 of the Internal Revenue Code.

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“Measure S Loan” means the loan made by the Authority to Borrower in the maximum amount of $8,357,000, which is evidenced by this Note and secured by the Authority Deed of Trust.

“Measure S Loan Documents ” means this Note, the Authority Deed of Trust, the Agreement Containing Covenants, the Assignment of Rents, the Assignment of Agreements, the Environmental Indemnity, and the UCC -1 Financing Statement, each dated on or about the date hereof.

“Measure S Note” means this Note dated as of the date hereof, evidencing the Measure S Loan.

“Net Proceeds” means the proceeds of a sale, transfer or refinancing, less the customary and reasonable costs of the transaction.

a. Principal and interest and all periodic fees and costs due and payable on the Senior Loan;
b. Property and other taxes and assessments imposed on the Project; c. A general partner partnership management fee to the General Partner of Borrower not to exceed $15,000 per year, to be increased at an annual rate of three percent (3%), which will accrue to the extent not paid;
d. General administrative expenses including but not limited to advertising and marketing, security services and systems and similar customary administrative expenses;
e. Maintenance and repair including but not limited to pest control, landscaping and grounds maintenance, painting and decorating, cleaning, common systems repairs, general repairs, janitorial, supplies, and similar customary services; f. Cash deposited into a replacement reserve fund in the amount of $300 per unit per year to be increased at an annual rate of zero percent (0%); g. Cash deposited into an operating reserve fund in such reasonable amounts as are required by Project lenders, the California Tax Credit Allocation Committee, and the Investor Limited Partner from time to time, and approved by the Authority; h. Utility services not paid for directly or reimbursed by tenants, including but not limited to water, sewer, trash collection, gas and electricity; i. License or certificate of occupancy fees required for operation of the Project; 294 of 482

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j. Premiums for property damage and liability insurance; k. Cable television, satellite and similar services;
l. Recreational amenities, supplies, programs, and services; m. Reasonable property management fee payable to a third party property manager acceptable to the Authority in an annual amount not to exceed 8.0% of Income (gross revenues from all leases and rents of all tenants occupying the Project; storage rental and payments or rentals received from concessionaires, licensees or lessees for the use or occupancy of the Project) pursuant to a management contract approved by the Authority;

n. A reasonable resident services coordinator fee payable to a coordinator and costs related to the operation of the resident services program, reasonably acceptable to the Authority;
o. Purchase, repair, servicing and installation of appliances, equipment, fixtures and furnishings (other than from reserves);
p. Fees and expenses of accountants, attorneys, consultants and other professionals, including annual audits and tax return preparatio n costs payable to a third party ; and
q. An Asset Management Fee to the Investor Limited Partner in an amount not to exceed $5,000 per year, to be increased at an annual rate of three percent (3.0%); r. Payments required under the First Amended and Restated Agreement of Limited Partnership to the Investor Limited Partner for any credit adjusters and any tax liability of the Investor Limited Partner; and
s. A Project monitoring fee to the Authority in an amount equal to $6,000 per year.

Operating Expenses will be subject to the reasonable approval of the Authority.

“Permanent Loan” means the initial permanent loan to be made to Borrower by Wells Fargo Bank, N.A (together with its successors and assigns, “Permanent Lender”) at Conversion, secured by the Permanent Loan Deed of Trust.

“Permanent Loan Deed of Trust ” means the leasehold deed of trust securing the Permanent Loan that is first in priority.

“Permanent Period” means the period of time commencing upon the repayment of the Construction Loan and the funding of the Permanent Loan and payment of the Limited Partner Capital Contribution.

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“Permitted Transfer ” means any of the following, provided (except for subsection f. below) Borrower, a General Partner of Borrower, or an Affiliate of such General Partner, retains day-to-day control over management and operations of the Property and the Improvements and further provided that such transfer is not to a Prohibited Person or would otherwise violate Anti- Terrorism Laws:
a. An assignment of the Affordable Housing Agreement and Borrower’s interests in the Property to an Affiliate or a conveyance back from the Affiliate to Borrower; b. A conveyance of a security interest in the Property or any portion thereof or interest therein, in connection with a Senior Loan;
c. The inclusion of equity participation in the Project by addition of limited partners to Borrower’s partnership or similar mechanism, and transfers of limited partnership interests in Borrower’s partnership;
d. The lease for occupancy of all or any part of the Improvements on the Property in accordance with the Affordable Housing Agreement;
e. The granting of easements or permits to facilitate the development of the Property in accordance with the Affordable Housing Agreement;
f. The withdrawal, removal and/or replacement of a general partner of Borrower’s partnership pursuant to the terms of Borrower’s partnership agreement, or a conveyance of Borrower’s interest in the Property and the Improvements and/or a transfer of limited partnership interests to a general partner or an affiliate of the Investor Limited Partner pursuant to the option provided to that partner in Borrower’s partnership agreement, will not constitute a default under this Agreement or any of the Measure S Loan Documents, nor will such actions accelerate the maturity of the Measure S Loan, provided that any required substitute general partner is reasonably acceptable to the Authority, as evidenced by the Authority’s written consent, and is selected with reasonable promptness , provided that the consent of the Authority shall not be required for a replacement general partner that is an affiliate of Enterprise Community Asset Management, Inc.; and g. A transfer approved in writing by A uthority’s Executive Director or designee, at his or her sole discretion.

A transfer described in clauses a., b. , or c. will be subject to the reasonable approval of the Authority Executive Director or designee ; provided that, the Authority approves the transfer of limited partner interests in Borrower’s partnership, so long as such transfer is not a result of a resyndication of the Low Income Housing Tax Credits or the Historic Rehabilitation Tax Credits and does not otherwise result in increased equity participation in Borrower, and further provided that such transfer is not to a Prohibited Person or would otherwise violate Anti-Terrorism Laws.

“Person” means an individual, partnership, limited partnership, trust, estate, ass ociation, corporation, limited liability company, or other entity, domestic or foreign. 296 of 482

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“Property” means the real property described as the “Property” in and legally described as set forth in Exhibit “A” of the Authority Deed of Trust.

“Residual Receipts” means the Revenue minus the Operating Expenses, calculat ed on a 12-month basis, minus the theretofore unpaid po rtion of the Deferred Developer s Fee. All calculations of Residual Receipts will be subject to verification and reasonable approval by the Authority.

“Revenue” means the gross rental income from the Improvements, and any other income to the Borrower derived from the ownership, operation and management of the Property, including but not limited to the following: 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 to the extent not utilized to repair or rebuild the Project; and condemnation awards for a taking of part or all of the Project for a temporary period. “Revenue” will also include the fair market value of any goods or services provided in consideration for the leasing or other use of any portion of the Project, except that the value of services provided by on-site manager(s) will not be treated as “Revenue” if no more than one dwelling unit is leased to or otherwise used by on-site manager(s). “Revenue” will not include tenants’ security deposits, proceeds from the Senior Loan, the Authority Loans, Developer Equity, including capital contributions or similar advances, or interest that is earned on and allocated to reserve accounts.

“Senior Loan” means the Construction Period loan made by Construction Lender (in its capacity as Servicer of the Construction Period loan) to Borrower in the approximate amount of $15,791,380 and the Permanent Loan to be made by Permanent Lender to Borrower to repay all or part of the Construction Loan in the approximate amount o f $574,000, which will be secured by a deed of trust that is senior and superior to the Authority Deed of Trust, or any other loan secured by a deed of trust or other instrument to which the Authority agrees, in its sole discretion, to subordinate this Note and the Authority Deed of Trust.

“Term” of this Note means a term that expires on the fifty-fifth (55th) anniversary of the date of Conversion, but no later than December 31, 2082.

“Transfer” will have the meaning set forth in Section 11.e of this Note.

2. This Note evidences the obligation of the Borrower to the Housing Authority for the repayment of the Measure S Loan. None of the funds provided pursuant to the Measure S Loan were funded directly or indirectly with any obligation the interest on which is exempt from tax under Section 103 of the Internal Revenue Code of 1986, as amended, or pursuant to any United States government federal source.
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3. This Note is payable at the principal office of Authority, 141 North Glendale Avenue, Glendale, California 91206, or at such other place as the holder hereof may inform the Borrower in writing, in lawful money of the United States.

4. This Note is secured by the Authority Deed of Trust.

5. This Note will bear 0.75% simple interest.

8. Prior to the expiration of the Term hereof, Borrower will be obligated to repay the Measure S Loan exclusively from the Authority’s share of Residual Receipts, as follows:
a. Annually, not later than the thirtieth (30th) day of April, beginning with the year following the year in which Conversion occurs, Borrower will submit to Authority an audited Annual Financial Statement for the preceding calendar year, prepared by a certified public accountant reasonably acceptable to the Authority, determining the amount of Residual Receipts, if any, generated in that year, together with payment of the Authority’s Share of such Residual Receipts. The first such Annual Financial Statement will be for the partial year beginning on the date of Conversion and ending on December 31 of that year. The Authority will review and approve such Annual Financial Statement, or request reasonable revisions, within 30 days after receipt. If as the result of the Authority’s review of the statement, there is an increase in the amount of any payment due and payable to Authority (as the result, for example, of a determination that the actual amount of Residual Receipts to which the Authority is entitled exceeds the amount of Authority’s share of Residual Receipts shown in the Annual Financial Statement submitted by Borrower), Borrower will promptly pay to the Authority the difference, with interest, from the date on which such payment was due, at the rate of one percent (1%) over the Prime Rate announced by Bank of America, but in any event within ten (10) days of notice of such increase. 298 of 482

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b. The Authority’s Share of Residual Rece ipts to be applied to this Note , the LMIHAF Note, and the HOME Note will be 75%. The Authority’s Share of Residual Receipts will be applied to the HOME Note, the LMIHAF Note, and the Measure S Note as follows: 16.82% (i.e., $1,800,000/$10,700,000) will be applied to this Note, 5.07% (i.e., $543,000/$ 10,700,000) will be applied to the LMIHAF Note, and 78.10% (i.e., $8,357,000/$10,700,000) will be applied to the Measure S Note.

9. All payments applie d to this Note w ill be applied first to penalties and late fees, then to interest, then to reduce the principal amount owed.

10. The Measure S Loan evidenced by this Note is based on the assumption that, upon completion and stabilization, all Acquisition and Development Costs will be $29,468,731 and the maximum amount of the Permanent Loan to be secured by a first priority deed of trust will be $574,000. To induce Authority to make the Measure S Loan evidenced hereby, Borrower covenants and agrees as follows:
a. If Borrower obtains a Permanent Loan in a principal amount in excess of $574,000, Borrower will apply an amount equal to fifty percent (50%) of the proceeds thereof in excess of $574,000 (the “Additional Proceeds”) to pay accrued interest on, and then red uce the principal amount of the LMIHAF Loan, the Measure S Loan, and the HOME Loan, except to the extent such Additional Proceeds are needed to either pay for cost overruns for which no other funds are available (other than from Borrower’s general partners) or to compensate for reductions in other permanent financing sources . If at any time Borrower refinances the Permanent Loan, Borrower will apply the Net Proceeds of any such refinancing first to pay previously incurred Operating Expenses (as defined above) still owing, then fifty percent (50%) of the balance will be paid to the Authority to pay accrued interest on, and then reduce the princip al amount of the LMIHAF Loan, the Measure S Loan, and the HOME Loan.
b. If there are Cost Savings with respe ct to the Project, the following will occur: (1) to the extent of fifty percent (50%) of the Cost Savings, any undisbursed amount of the Authority Loans plus any undisbursed capital contributions made by the Investor Limited Partner payable at Conversion and upon receipt of Forms 8609 in excess of the amounts needed to pay developer fee from such capital contributions will be released to the Authority as a payment of accrued interest on and then reduction of the principal amount of the Authority Loans; and (2) each Lender’s unfunded commitment will terminate. For purposes hereof, “Cost Savings”, shall mean the difference between the total sources of funds and the total cost of development as shown in the Borrower’s cost certification contained in Borrower’s application to the California Tax Credit Allocation Committee for a Form 8609 for the Project (“Tax Credit Report”); provided, however, the Cost Savings will be adjusted to take into account (i) the loss of any equity investment due to an adjustment in the allowable tax credits; provided that the tax credit factor applied to the required equity contribution will be as set forth in Borrower’s limited partnership agreement; and (ii) any reduction in the first mortgage loan required by the Senior Loan Documents. The amount payable to Authority under this paragraph will be paid within sixty (60) days following submittal of the Tax Credit Report to the California Tax Credit Allocation Committee. 299 of 482

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11. Prohibitions on Transfer.
a. Prior to the repayment in full of the Measure S Loan and expiration of the Term of the Agreement Containing Covenants , the Borrower must not, except for Permitted Transfers or as permitted by the Affordable Housing Agreement, assign or attempt to assign the Affordable Housing Agreement or this Note or any right therein or herein, nor make any total or partial sale, transfer, conveyance or assignment of the whole or any part of the Property (referred to hereinafter as a “ Transfer”), without prior written approval of the Authority, except as expressly permitted by the Affordable Housing Agreement or this Note. Consent to one such transaction will not be deemed to be a waiver of the right to require consent to future or successive transactions. Authority shall not unreasonably withhold or delay its consent. If consent should be given, any such transfer shall be subject to this Section 11, and any such transferee shall assume all obligations hereunder and agree to be bound by all provisions contained herein.

b. Proposed transferees (other than an Affi liate of Borrower) must have the qualifications and financial responsibility necessary and adequate as may be reasonably determined by the Authority, to fulfill Borrower’s obligations undertaken in the Affordable Housing Agreement, the Agreement Containing Covenants, and this Note. A proposed transferee (including an Affiliate of Borrower), by instrument in writing satisfactory to the Authority and in form recordable among the land records, for itself and its successors and assigns, and for the benefit of t he Authority must expressly assume all of Borrower’s obligations under the Affordable Housing Agreement, the Agreement Containing Covenants, and this Note and agree to be subject to all conditions and restrictions applicable to Borrower. There must be submitted to the Authority for review all instruments and other legal documents proposed to affect any such transfer; and if approved by the Authority its approval will be indicated to Borrower in writing. If consent should be given, such transfer will be subject to this Section 11. c. In the absence of specific written agreement by the Authority, no unauthorized Transfer, or approval thereof by th e Authority, will be deemed to relieve the Borrower or any other party from any obligations under the Affordable Housing Agreement, the Agreement Containing Covenants, or this Note.
d. In the event of a Transfer prior to the time the Measure S Loan is paid in full without the prior written consent of the Authority, the remaining principal balance of the Measure S Loan and all accrued but unpaid interest will be immediately due and payable. e. As used herein, “Transfer” means
i. the sale, agreement to sell, transfer or conveyance of the Property, the Project, or any portion thereof or interest therein (including, without limitation, a beneficial interest), whether voluntary, involuntary, by operation of law or otherwise, the execution of any installment sale contract or similar instrument affecting all or a portion of the Property or Project, or the lease of all or substantially all of the Property or Project. ii. “Transfer” also includes the transfer, assignment, hypothecation or conveyance of legal or beneficia l ownership of an interest in Borrower, or a conversion of 300 of 482

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Borrower to an entity form other than that of Borrower at the time of execution of the Affordable Housing Agreement, except that, a cumulative change in ownership interest of a general partner of Borrower of forty -nine percent (49%) or less or a “Permitted Transfer” will not be deemed a “Transfer” for purposes of this Note.

12. The Authority will not unreasonably withhold, condition , or delay its approval of any matter for which its appr oval is required hereunder. The Authority’s disapproval will be in writing and contain the Authority’s reasons for disapproval.

13. The Measure S Loan is funded from the Authority’s Measure S funds. Accordingly, Borrower agrees for itself, its successors and assigns that the use of the property will be subject to the restrictions on rent and occupancy set forth in the Agreement Containing Covenants.

14. Subject to the provisions and limitations of this Section 14, the obligation to repay the Measure S Loan is a nonrecourse obligation of the Borrower. Borrower and each general partner or limited partner of Borrower will not have any personal liability for repayment of the loan, except as provided in this Section 14. The sole recourse of Authority will be the exercise of its rights against the Property and other security for the Measure S Loan. Provided, however, that the foregoing will not (a) constitute a waiver of an obligation evidenced by this Note or the Authority Deed of Trust; (b) limit the right of the Authority to name Borrower as a party defendant in any action or suit for judicial foreclosure and sale under this Note and the Authority Deed of Trust or any action or proceeding hereunder so long as no judgment in the nature of a deficiency judgment will be asked for or taken against Borrower; (c) releas e or impair this Note or the Authority Deed of Trust; (d) prevent or in any way hinder the Authority from exercising, or constitute a defense, an affirmative defense, a counterclaim, or other basis for relief in respect of the exercise of, any other remedy against the mortgaged Property or other instrument securing the Note or as prescribed by law or in equity in case of default; (e) prevent or in any way hinder the Authority from exercising, or constitute a defense, an affirmative defense, a counterclaim, or other basis for relief in respect of the exercise of, its remedies in respect of deposits, insurance proceeds, condemnation awards or other monies or other collateral or letters of credit securing this Note; (f) relieve Borrower of its obligations under an indemnity delivered by Borrower to Authority; or (g) affect in any way the validity of a guarantee or indemnity from any person of all or any of the obligations evidenced and secured by this Note and the Authority Deed of Trust. The foregoing provisions of this paragraph are limited by the provision that in the event of the occurrence of a default, Borrower and its successors and assigns will have personal liability hereunder for any deficiency judgment, but only if and to the extent Borrower, its prin cipals, shareholders, partners or its successors and assigns received rentals, other revenues, or other payments or proceeds in respect of the mortgaged Property after the occurrence of such default , which rentals, other revenues, or other payments or proc eeds have not been used for the payment of ordinary and reasonable operating expenses of the mortgaged Property, ordinary and reasonable capital improvements to the mortgaged Property, debt service, real estate taxes in respect of the mortgaged Property an d basic management fees, but not incentive fees, payable to an entity or person unaffiliated with Borrower in connection with the operation of the mortgaged Property, which are then due and payable. Notwithstanding the first sentence of this paragraph, Authority may recover directly from Borrower or from any other party (other than Borrower’s Investor Limited Partner):
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a. damages, costs and expenses incurred by the Authority as a result of fraud or criminal act or acts of Borrower or a partner, shareholder, o fficer, director or employee of Borrower, or of a member or general or limite d partner of Borrower, or of a general or limited partner of such member or general or limited partner;
b. damages, costs and expenses incurred by Authority as a result of misappropriation of funds provided for the payment of Acquisition and Development Costs , as described in the Affordable Housing Agreement , rents and revenues from the operation of the Project, or proceeds of insurance policies or condemnation proceeds; c. all amounts owing by Borrower pursuant to the indemnification regarding Hazardous Substances under the Environmental Indemnity, and d. all court costs and attorneys ’ fees reasonably incurred in enforcing or collecting upon any of the foregoing exceptions (prov ided that Authority will pay Borrower’s reasonable court costs and attorneys’ fees if Borrower is the prevailing party in such enforcement or collection action).

15. Borrower waives presentment for payment, demand, protest, and notices of dishonor and of protest; the benefits of all waivable exemptions; and all defenses and pleas on the ground of an extension or extensions of the time of payment or of a due date under this Note, in whole or in part, whether before or after maturity and with or without notice. Borrower hereby agrees to pay all costs and expenses, including reasonable attorney’s fees, which may be incurred by the holder hereof, in the enforcement of this Note, the Authority Deed of Trust or any term or provision of either thereof.

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c. Failures or delays by the Authority in asserting its rights and remedies as to a default will not operate as a waiver of default or of such rights or remedies. Delays by the Authority in asserting its rights and remedies will not deprive the Authority of its right to institute and maintain actions or proceedings which it may deem necessary to protect, assert, or enforce such rights or remedies.
d. If a monetary event of default occurs under the terms of this Note or the Authority Deed of Trust, or a deed of trust securing a Senior Loan, or other obligations secured by a deed of trust on the Pr operty, prior to exercising its remedies hereunder or thereunder the Authority will give Borrower, each general partner, and the Investor Limited Partner, concurrent written notice of such default. Borrower will have a reasonable period of time after such notice is given within which to cure the default prior to exercise of remedies by the Authority under this Note and the Authority Deed of Trust. In no event will the Authority be precluded from exercising remedies if its security becomes or is about to become materially impa ired by a failure to cure a default or the default is not cured within ten (10) calendar days after the notice of default is received or deemed received.
e. If a non-monetary event of default occurs under the terms of the Affordable Housing Agreement, this Note, the Authority Deed of Trust, the Agreement Containing Covenants, or a document implementing the Affordable Housing Agreement or a deed of trust securin g a Senior Loan or other obligations secured by a deed of trust on the Property, prior to exercising its remedies hereunder or thereunder, the Authority will give Borrower, each General Partner, and the Investor Limited Partner, concurrent notice of such default. If the default is reasonably capable of being cured within thirty (30) calendar days after such notice is received or deemed received, Borrower will have such period to effect a cure prior to exercise of remedies by the Authority under the Affordable Housing Agreement, the Agreement Containing Covenants, this Note and/or the Authority Deed of Trust. If the default is such that it is not reasonably capable of being cured within thirty (30) days, and Borrower (i) initiates corrective action within s aid period, and (ii) diligently and in good faith works to effect a cure as soon as possible, then Borrower will have such additional time as is reasonably necessary to cure the default prior to the Authority’s exercise of remedies. If Borrower fails to ta ke corrective action or to cure the default within the time set forth above in this Subsection 17.e, the Authority will give Borrower , the Senior Lender , the Investor Limited Partner written notice thereof, whereupon the Investor Limited Partner, subject to the terms of Borrower ’s partnersh ip agreement, may take such corrective action, including removing and replacing a general partner. The Investor Limited Partner will have 90 days, or such longer period as is approved by the Authority Executive Director or designee, to remove and replace such general partner of Borrower. The Authority agrees to accept cures tendered by a Senior Lender or the Investor Limited Partner within the time period provided herein. Additionally, in the event the Senior Lender , or Investor Limited Partner is precluded from curing a non - monetary default due to a bankruptcy, injunction, or similar proceeding by or against Borrower or a general partner , the Authority agrees to forbear from completing a foreclosure (judicial or nonjudicial) during the period during which such party is so precluded from acting, not to exceed 90 days or such additional time as is reasonably approved by the Authority Executive Director or designee, provided such Senior Lender or Investor Limited Partner is otherwise in compliance with the foregoing provisions. In no event will Authority be precluded from exercising remedies if its 303 of 482

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security becomes or is about to become materially jeopardized by a failure to cure a default or the default is not cured within one hundred eighty (180) days after the notice of default is received or deemed received or such additional time as is reasonably approved by the Authority Executive Director or designee.
f. A notice of default that is transmitted by electronic facsimile transmission followed by delivery of a “hard” copy, will be deemed delivered upon its transmission; a notice of default that is personally delivered (including by means of professional messenger service, courier service such as United Parcel Service or Federal Express, or by U.S. Pos tal Service), will be deemed received on the documented date of receipt by Borrower; and a notice of default that is sent by registered or certified mail, postage prepaid, return receipt required will be deemed received on the date of receipt thereof. Notices will be sent to the following addresses:

To Authority:

HOUSING AUTHORITY OF

THE CITY OF GLENDALE
141 N. Glendale Avenue, Room 202,
Glendale, California 91206
Attention: Executive Director
Facsimile: 818-548-3724

With a copy to:

KANE, BALLMER & BERKMAN
515 S. Figueroa St., Suite 780
Los Angeles, California 90071-3301
Attention: Susan Apy

To Borrower:

Harrower Village, L.P.
c/o Abode Communities
1149 S. Hill Street, Suite 700
Los Angeles, California 90015
Attn: Lara Regus
Facsimile: 213-225-2709

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With a copy to:

Enterprise Housing Credit Investments, LLC
70 Corporate Center
11000 Broken Land Parkway, Suite 700
Columbia, MD 21044
Attn: Reagan Maechling

18. Notwithstanding specific provisions of this Note, Borrower will not be deemed to be in default for failure to perform a non-monetary obligation hereunder where delays or defaults are due to war, insurrection, strikes, lock -outs, riots, floods, earthquakes, fires, casualties, acts of God, acts of the public enemy, epid emics, quarantine restrictions, freight embargoes, lack of transportation, governmental restrictions or priority, litigation, unusually severe weather, inability to secure necessary labor, material or tools, delays of any contractor, sub -contractor or supplier, acts of the Authority or any other public or governmental Authority or entity, or any causes beyond the control or without the fault of the Borrower. An extension of time for any such cause (a “Force Majeure Delay”) will be for the period of the enforced delay and will commence to run from the time of the commencement of the cause, if notice by Borrower is sent to the Authority within fifteen (15) days of knowledge of the commencement of the cause. Notwithstanding the foregoing, none of the foregoing events will constitute a Force Majeure Delay unless and until Borrower delivers to the Authority written notice describing the event, its cause, when and how Borrower obtained knowledge, the date and the event commenced, and the estimated delay resulting therefrom. Borrower will deliver such written notice within fifteen (15) days after it obtains actual knowledge of the event. Times of performance under this Note may also be extended in writing by the Authority and Borrower, such revision approval may be denied by either party in its sole discretion.

20. The Authority Deed of Trust securing this Note and all other Measure S Loan Documents, except the Agreement Containing Covenants, have been made subordinate and junior to the claims, liens or charges of the Construction Loan Deed of Trust and all other instruments securing the Construction Loan by that certain Subordination Agreement by and among Authority, Borrower and Construction Lender which is being recorded concurrently with the execution and delivery of this Note and the recorda tion of the Authority Deed of Trust and will also be subordinate and junior to the claims, liens or charges of the Permanent Loan Deed of Trust and all other instruments securing the Permanent Loan.

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lieu of foreclosure or comparable conversion of the Loan, in accordance with Section 42(h)(6)(E) of the Internal Revenue Cod e. The following rule contained in Section 42(h)(6)(E)(ii) of the Internal Revenue Code of 1986, as amended, will also apply: for a period of three (3) years from the date of foreclosure, with respect to any unit that had been regulated by the Extended Use Agreement, (i) none of the tenants occupying those units at the time of foreclosure may be evicted or their tenancy terminated (other than for good cause), (ii) nor may any rent be increased except as otherwise permitted under Section 42 of the Code. Bor rower acknowledges and agrees that a default, event of default, or breach (however such terms may be defined) under the Extended Use Agreement will be an event of default under this Note and the Authority Deed of Trust and that all costs, damages or other amounts, including reasonable attorneys ’ fees incurred by the Authority as a result of an event of default by Borrower, and all amounts paid by Authority to cure a default under the Extended Use Agreement will be an obligation of Borrower and become a part of the debt evidenced by this Note and secured by the Authority Deed of Trust.

22. With regard to an approval, consent , or other determination by the Authority required under this Note or the other Measure S Loan Documents, the Authority will act reasonably and in good faith.

23. Borrower will have the right to prepay the obligation evidenced by this Note, or any part thereof, without penalty. However, prepayment of the obligation evidenced by this Note prior to the expiration of the ter m of the Agreement Containing Covenants will not entitle Borrower to a reconveyance of the Authority Deed of Trust. 306 of 482

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24. This Note may be executed by each signatory on a separate signature page, and when the executed signature pages are combined, shall constitute one single instrument.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

[SIGNATURES ON FOLLOWING PAGE]

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912 and 920 East Broadway & 117 S. Belmont Street
Measure S Note
S-1

IN WITNESS WHEREOF Borrower has executed this Note as of the day and year first set forth above.

BORROWER

HARROWER VILLAGE, L.P.,
a California limited partnership

by: Harrower Village GP, LLC,
a California limited liability company,
its general partner

by: Abode Communities,
a California nonprofit public benefit corporation,
its sole and managing member

Dated: __________, 2022 By:___________________________ Lara Regus
Senior Vice President

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PROMISSORY NOTE

TO THE HOUSING AUTHORITY

OF THE CITY OF GLENDALE
(HOME PROGRAM FUNDS)

0.75% Interest Glendale, California
$1,800,000 _____________________, 2022

FOR VALUE RECEIVED, HARROWER VILLAGE, L. P., a California limited partnership (“Borrower”), hereby promises to pay to the HOUSING AUTHORITY OF THE CITY OF GLENDALE (“Authority”), a public body, corporate and politic, or order, a principal amount of ONE MILLION EIGHT HUNDRED THOUSAND DOLLARS ($1,800,000), being the principal amount of the Authority’s loan of HOME Program construction to permanent funds (the “HOME Loan”). This Note is given pursuant to that certain Affordable Housing Agreement dated as of May 24, 2022, between Borrower and the Authority (the “Affordable Housing Agreement”) and evidences the HOME Loan to Borrower, which provides part of the financing for the acquisition and development of that certain real property located at 912 and 920 East Broadway and 117 S. Belmont Street in the City of Glendale, legally described in the Deed of Trust securing this Note (the “Property”). The obligation of Borrower to Authority hereunder is subject to the terms of the Affordable Housing Agreement, this Note and the following instruments, each dated on or about the date hereof, and, where applicable, executed and delivered by Borrower for the purpose of securing this Note: an Agreement Containing HOME Program Requirements (“HOME Regulatory Agreement ”); a Subordinate d Leasehold Deed of Trust, Security Agreement and Fixture Filing (With Assignment of Rents) (“Authority Deed of Trust”); an Assignment of Rents and Leases ( “Assignment of Rents ”); an Assignment of Agreements ( “Assignment of Agreements”); and a UCC-1 Financing Statement. Said documents are public records on file in the offices of Authority, and the provisions of said documents are incorporated herein by this reference. The Borrower will pay interest at the rate, in the amount and at the time herei nafter provided.

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“Authority Deed of Trust ” means the Su bordinated Leasehold Deed of Trust, Security Agreement and Fixture Filing (with Assignment of Rents) executed by Borrower in favor of Authority and dated on or about the date hereof , which secures this Note and the HOME Loan evidenced hereby.

“Authority’s Share of Residual Receipts ” will have the meaning set forth in Section 8, below.

“Construction Financing Event” means the point in time when all conditions precedent to the release of the Construction Loan funds and the Authority Loan s funds have been satisfied, in accordance with the Affordable Housing Agreement.

“Construction Loan Deed of Trust ” means the deed of trust securing the Construction Loan that is first in priority.

“Construction Period ” means the period of time commencing upon the Construction Financing Event and ending upon the repayment of the Construction Loan and the funding of the Permanent Loan.

“Deferred Developer Fee” means that portion of the Developer Fee which was not paid prior to the date of Conversion or from the proceeds of the Investor Limited Partner’ s capital contribution payable upon receipt of Forms 8609s with respect to the Project , and which will be paid from the Revenue remaining after payment of Operating Expenses, prior to any payment of Residual Receipts to the Authority. The term “Deferred Developer Fee” will include any loan or capital contribution made by a partner of Borrower to pay such deferred fee. 310 of 482

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“Developer Fee” means the fee in the amount set forth in the Project Budget.

“Environmental Indemnity” means the indemnity in the form attached to the Affordable Housing Agreement as Attachment No. 18, which is incorporated herein by this reference.

“General Partner ” means Harrower Village GP, LLC, a California limited liability company, and its authorized successors and assigns.

“Historic Rehabilitation Tax Credits ” means tax credits authorized by the Federal Historic Preservation Tax Incentives Program and governed by Section 47 of the Internal Revenue Code.

“HOME Loan” means the loan from the Authority to Borrower pursuant to the Affordable Housing Agreement as amended from time to time, in the amount of $1,800,000, which is evidenced by this Note and secured by the lien of the Authority Deed of Trust that is second in priority to the lien of the Senior Loan Deed of Trust.

“HOME Loan Documents ” means this Note, the Authority Deed of Trust, the HOME Regulatory Agreement, the Assignment of Rents, the Assignment of Agreements, the Environmental Indemnity and the UCC -1 Financing Statement, each dated on or about the date hereof.

“HOME Note” means this Note dated as of the date hereof, evidencing the HOME Loan.

“Improvements” means the 40-unit residential development and ancillary facilities to be constructed on the Property, all as described in the Affordable Housing Agreement.

“Investor Limited Partner” means Wincopin Circle LLLP, a Maryland limited liability limited partnership, and its successors and assigns.

“LMIHAF Loan” means the loan made by the Authority to Borrower in the maximum amount of $543,000, which is evidenced by the LMIHAF Note and secured by the Authority Deed of Trust.

“LMIHAF Note” means the Promissory Note dated as of the date hereof, evidencing the LMIHAF Loan.

“Low Income Housing Tax Credits” means tax credits authorized by the Tax Reform Act of 1986 and governed by Section 42 of the Internal Revenue Code. 311 of 482

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“Measure S Loan” means the loan made by the Authority to Borrower in the maximum amount of $8,357,000, which is evidenced by the Measure S Note and secured by the Authority Deed of Trust.

“Measure S Note” means the Promissory Note dated as of the date hereof, evidencing the Measure S Loan.

“Net Proceeds” means the proceeds of a sale, transfer or refinancing, less the customary and reasonable costs of the transaction.

a. Principal and interest and all periodic fees and costs due and payable on the Senior Loan;
b. Property and other taxes and assessments imposed on the Project; c. A general partner partnership management fee to the General Partner of Borrower not to exceed $15,000 per year, to be increased at an annual rate of three percent (3%), which will accrue to the extent not paid;
d. General administrative expenses inc luding but not limited to advertising and marketing, security services and systems and similar customary administrative expenses;
e. Maintenance and repair including but not limited to pest control, landscaping and grounds maintenance, painting and decorating, cleaning, common systems repairs, general repairs, janitorial, supplies, and similar customary services; f. Cash deposited into a replacement reserve fund in the amount of $300 per unit per year to be increased at an annual rate of zero percent (0%); g. Cash deposited into an operating reserve fund in such reasonable amounts as are required by Project lenders, the California Tax Credit Allocation Committee, and the Investor Limited Partner from time to time, and approved by the Authority; h. Utility services not paid for directly or reimbursed by tenants, including but not limited to water, sewer, trash collection, gas and electricity; i. License or certificate of occupancy fees required for operation of the Project; j. Premiums for property damage and liability insurance; k. Cable television, satellite and similar services;
l. Recreational amenities, supplies, programs, and services; 312 of 482

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n. A reasonable resident services coordinator fee payable to a coordinator and costs related to the operation of the resident services program, reasonably acceptable to the Authority;
o. Purchase, repair, servicing and installation of appliances, equipment, fixtures and furnishings (other than from reserves);
p. Fees and expenses of accountants, attorneys, consultants and other professionals, including annual audits and tax return preparatio n costs payable to a third party; and
q. An Asset Management Fee to the Investor Limited Partner in an amount not to exceed $5,000 per year, to be increased at an annual rate of three percent (3.0%); r. Payments required under the First Amended and Restated Ag reement of Limited Partnership to the Investor Limited Partner for any credit adjusters and any tax liability of the Investor Limited Partner; and
s. A Project monitoring fee to the Authority in an amount equal to $6,000 per year.

Operating Expenses will be subject to the reasonable approval of the Authority.

“Permanent Loan Deed of Trust ” means the leasehold deed of trust securing the Permanent Loan that is first in priority.

“Permanent Period” means the period of time commencing upon the repayment of the Construction Loan and the funding of the Permanent Loan and payment of the Limited Partner Capital Contribution.

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further provided that such transfer is not to a Prohibited Person or would otherwise violate Anti - Terrorism Laws:
a. An assignment of the Affordable Housing Agreement and Borrower’s interests in the Property to an Affiliate or a conveyance back from the Affiliate to Borrower; b. A conveyance of a security interest in the Property or any portion thereof or interest therein, in connection with a Senior Loan;
c. The inclusion of equity participation in the Project by addition of limited partners to Borrower’s partnership or similar mechanism, and transfers of limited partnership interests in Borrower’s partnership;
d. The lease for occupancy of all or any part of the Improvements on the Property in accordance with the Affordable Housing Agreement;
e. The granting of easements or permits to facilitate the development of the Property in accordance with the Affordable Housing Agreement;
f. The withdrawal, remov al and/or replacement of a general partner of Borrower’s partnership pursuant to the terms of Borrower’s partnership agreement, or a conveyance of Borrower’s interest in the Property and the Improvements and /or a transfer of limited partnership interests t o a general partner or an affiliate of the Investor Limited Partner pursuant to the option provided to that partner in Borrower’s partnership agreement, will not constitute a default under this Agreement or any of the HOME Loan Documents, nor will such actions accelerate the maturity of the HOME Loan, provided that any required substitute general partner is reasonably acceptable to the Authority, as evidenced by the Authority’s written consent, and is selected with reasonable promptness , provided that the consent of the Authority shall not be required for a replacement general partner that is an affiliate of Enterprise Community Asset Management, Inc.; and g. A transfer approved in writing by Authority’s Executive Director or designee, at his or her sole discretion.

A trans fer described in clauses a., b., or c. will be subject to the reasonable approval of the Authority Executive Director or designee ; provided that, the Authority approves the transfer of limited partner interests in Borrower’s partnership , so long as such transfer is not a result of a resyndication of the Low Income Housing Tax Credits or the Historic Rehabilitation Tax Credits and does not otherwise result in increased equity participation in Borrower, and further provided that such transfer is not to a Prohibited Person or would otherwise violate Anti-Terrorism Laws.

“Person” means an individual, partnership, limited partnership, trust, estate, association, corporation, limited liability company, or other entity, domestic or foreign.

“Property” means the real property described as the “Property” in and legally described as set forth in Exhibit “A” of the Authority Deed of Trust. 314 of 482

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“Residual Receipts” means the Revenue minus the Operating Expenses, calculat ed on a 12-month basis, minus the theretofore unpaid po rtion of the Deferred Developer s Fee. All calculations of Residual Receipts will be subject to verification and reasonable approval by the Authority.

“Revenue” means the gross rental income from the Improvements, and any other in come to the Borrower derived from the ownership, operation and management of the Property, including but not limited to the following: all rents, fees and charges paid by tenants, Section 8 payments or other rental subsidy payments received for the dwellin g 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 insura nce; the proceeds of casualty insurance to the extent not utilized to repair or rebuild the Project; and condemnation awards for a taking of part or all of the Project for a temporary period. “Revenue” will also include the fair market value of any goods o r services provided in consideration for the leasing or other use of any portion of the Project, except that the value of services provided by on-site manager(s) will not be treated as “Revenue” if no more than one dwelling unit is leased to or otherwise used by on-site manager(s). “Revenue” will not include tenants’ security deposits, proceeds from the Senior Loan, the Authority Loans, Developer Equity, including capital contributions or similar advances, or interest that is earned on and allocated to reserve accounts.

“Term” of this Note means a term that expires on the fifty-fifth (55th) anniversary of the date of Conversion, but no later than December 31, 2082.

“Transfer” will have the meaning set forth in Section 11.e of this Note.

2. This Note evidences the obligation of the Borrower to the Housing Authority for the repayment of the HOME Loan. None of the funds provided pursuant to the HOME Loan were funded directly or indirectly with any obligation the interest on which is exempt from tax under Section 103 of the Internal Revenue Code of 1986, as amended, or pursuant to any United States government federal source.

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4. This Note is secured by the Authority Deed of Trust.

5. This Note will bear 0.75% simple interest.

7. The entire unpaid principal balance of this Note and any accrued but unpaid interest will be due and payable upon the expiration of the Term hereof, or immediately upon the occurrence of either of the following:
a. if the Property or any portion thereof or interest therein is sold, transferred, assigned or refinanced, without the prior written approval of the Authority, except as otherwise permitted in this Note, including a Permitted Transfer; or b. if there is a default by the Borrower under the terms of this Note, the Authority Deed of Trust, the Affordable Housing Agreement, the HOME Regulatory Agreement, or any deed of trust or other instrument securing the Senior Loan or other obligations secured by a deed of trust on the Property, which is not cured within the respective time period provided herein and therein.

8. Prior to the expiration of the Term hereof, Borrower will be obligated to repay the HOME Loan exclusively from the Authority’s share of Residual Receipts, as follows:
a. Annually, not later than the thirtieth (30th) day of April, beginning with the year following the year in which Conversion occurs, Borrower will submit to Authority an audited Annual Financial Statement for the preceding calen dar year, prepared by a certified public accountant reasonably acceptable to the Authority, determining the amount of Residual Receipts, if any, generated in that year, together with payment of the Authority’s Share of such Residual Receipts. The first suc h Annual Financial Statement will be for the partial year beginning on the date of Conversion and ending on December 31 of that year. The Authority will review and approve such Annual Financial Statement, or request reasonable revisions, within 30 days aft er receipt. If as the result of the Authority’s review of the statement, there is an increase in the amount of any payment due and payable to Authority (as the result, for example, of a determination that the actual amount of Residual Receipts to which the Authority is entitled exceeds the amount of Authority’s share of Residual Receipts shown in the Annual Financial Statement submitted by Borrower), Borrower will promptly pay to the Authority the difference, with interest, from the date on which such payment was due, at the rate of one percent (1%) over the Prime Rate announced by Bank of America, but in any event within ten (10) days of notice of such increase. b. The Authority’s Share of Residual Receipts to be applied to this Note, the LMIHAF Note, and the Measure S Note will be 75%. The Authority’s Share of Residual Receipts will be applied to the HOME Note, the LMIHAF Note, and the Measure S Note as follows: 16.82% (i.e., $1,800,000/$10,700,000) will be applied to this Note, 5.07% (i.e., $543,000/$ 10,700,000) 316 of 482

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will be applied to the LMIHAF Note, and 78.10% (i.e., $8,357,000/$10,700,000) will be applied to the Measure S Note.

9. All payments applie d to this N ote will be applied first to penalties and late fees, then to interest, then to reduce the principal amount owed.

10. The HOME Loan evidenced by this Note is based on the assumption that, upon completion and stabilization, all Acquisition and Development Costs will be $29,468,731 and the maximum amount of the Permanent Loan to be secured by a first priority deed of trust will be $574,000. To induce Authority to make the HOME Loan evidenced hereby, Borrower covenants and agrees as follows:
a. If Borrower obtains a Permanent Loan in a principal amount in excess of $574,000, Borrower will apply an amount equal to fifty percent (50%) of the proceeds thereof in excess of $574,000 (the “Additional Proceeds”) to pay accrued interest on, and then redu ce the principal amount of the LMIHAF Loan, the Measure S Loan, and the HOME Loan, except to the extent such Additional Proceeds are needed to either pay for cost overruns for which no other funds are available (other than from Borrower’s general partners) or to compensate for reductions in other permanent financing sources . If at any time Borrower refinances the Permanent Loan, Borrower will apply the Net Proceeds of any such refinancing first to pay previously incurred Operating Expenses (as defined above) still owing, then fifty percent (50%) of the balance will be paid to the Authority to pay accrued interest on, and then reduce the princip al amount of the LMIHAF Loan, the Measure S Loan, and the HOME Loan.
b. If there are Cost Savings with respect to the Project, the following will occur: (1) to the extent of fifty percent (50%) of the Cost Savings, any undisbursed amount of the Authority Loans plus any undisbursed capital contributions made by the Investor Limited Partner payable at Conversion and upon receipt of Forms 8609 in excess of the amounts needed to pay developer fee from such capital contributions will be released to the Authority as a payment of accrued interest on and then reduction of the principal amount of the Authority Loans; and (2) each Lender’s unfunded commitment will terminate. For purposes hereof, “Cost Savings”, shall mean the difference between the total sources of funds and the total cost of development as shown in the Borrower’s cost certification contained in Borrower’s application to the California Tax Credit Allocation Committee for a Form 8609 for the Project (“Tax Credit Report”); provided, however, the Cost Savings will be adjusted to take into account (i) the loss of any equity investment due to an adjustment in the allowable tax credits; provided that the tax credit factor applied to the required equity contribution will be as set forth in Borrower’s limited partnership agreement; and (ii) any reduction in the first mortgage loan required by the Senior Loan Documents. The amount payable to Authority under this paragraph will be paid within sixty (60) days following submittal of the Tax Credit Report to the California Tax Credit Allocation Committee. 317 of 482

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11. Prohibitions on Transfer.
a. Prior to the repayment in full of the HOME Loan and expiration of the Term of the HOME Regulatory Agreement, the Borrower must not, except for Permitted Transfers or as permitted by the Affordable Housing Agreement, assign or attempt to assign the Affordable Housing Agreement or this Note or any right therein or herein, nor make any total or partial sale, transfer, conveyance or assignment of the whole or any part of the Property (referred to hereinafter as a “Transfer”), without prior written approval of the Authority, except as expressly permit ted by the Affordable Housing Agreement or this Note. Consent to one such transaction will not be deemed to be a waiver of the right to require consent to future or successive transactions. Authority shall not unreasonably withhold or delay its consent. If consent should be given, any such transfer shall be subject to this Section 11, and any such transferee shall assume all obligations hereunder and agree to be bound by all provisions contained herein.

b. Proposed transferees (other than an Affiliate of Bor rower) must have the qualifications and financial responsibility necessary and adequate as may be reasonably determined by the Authority, to fulfill Borrower’s obligations undertaken in the Affordable Housing Agreement , the HOME Regulatory Agreement , and this Note . A proposed transferee (including an Affiliate of Borrower), by instrument in writing satisfactory to the Authority and in form recordable among the land records, for itself and its successors and assigns, and for the benefit of the Authority must expressly assume all of Borrower’s obligations under the Affordable Housing Agreement, the HOME Regulatory Agreement, and this Note and agree to be subject to all conditions and restrictions applicable to Borrower. There must be submitted to the Authority for review all instruments and other legal documents proposed to affect any such transfer; and if approved by the Authority its approval will be indicated to Borrower in writing. If consent should be given, such transfer will be subject to this Section 11. c. In the absence of specific written agreement by the Authority, no unauthorized Transfer, or approval thereof by the Authority, will be deemed to relieve the Borrower or any other party from any obligations under the Affordable Housing Agreement, the HOME Regulatory Agreement, or this Note.
d. In the event of a Transfer prior to the time the HOME Loan is paid in full without the prior written consent of the Authority, the remaining principal balance of the HOME Loan and all accrued but unpaid interest will be immediately due and payable. e. As used herein, “Transfer” means
i. the sale, agreement to sell, transfer or conveyance of the Property, the Project, or any portion thereof or interest therein (including, without limitation, a beneficial interest), whether voluntary, involuntary, by operation of law or otherwise, the execution of any installment sale contract or similar instrument affecting all or a portion of the Property or Project, or the lease of all or substantially all of the Property or Project. ii. “Transfer” also includes the transfer, assignment, hypothecation or conveyance of legal or beneficial ownership of an interest in Borrower, or a conversion of 318 of 482

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12. The Authority will not unreasonably withhold, condition , or delay its approval of any matter for which its appr oval is required hereunder. The Authority ’s disapproval will be in writing and contain the Authority’s reasons for disapproval.

13. The HOME Loan is funded from the Authority’s HOME Program Funds .

Accordingly, Borrower agrees for itself, its successors and assigns that the use of the property will be subject to the restrictions on rent and occupancy set forth in the HOME Regulatory Agreement.

14. Subject to the provisions and limitations of this Section 14, the obligation to repay the HOME Loan is a nonrecourse obligation of the Borrower. Borrower and each general partner or limited partner of Borrower will not have any personal liability for repayment of the loan, except as provided in this Section 14. The sole recourse of Authority will be the exercise of its rig hts against the Property and other security for the HOME Loan. Provided, however, that the foregoing will not (a) constitute a waiver of an obligation evidenced by this Note or the Authority Deed of Trust; (b) limit the right of the Authority to name Borrower as a party defendant in any action or suit for judicial foreclosure and sale under this Note and the Authority Deed of Trust or any action or proceeding hereunder so long as no judgment in the nature of a deficiency judgment will be asked for or taken against Borrower; (c) release or impair this Note or the Authority Deed of Trust; (d) prevent or in any way hinder the Authority from exercising, or constitute a defense, an affirmative defense, a counterclaim, or other basis for relief in respect of the exercise of, any other remedy against the mortgaged Property or other instrument securing the Note or as prescribed by law or in equity in case of default; (e) prevent or in any way hinder the Authority from exercising, or constitute a defense, an affirmative defense, a counterclaim, or other basis for relief in respect of the exercise of , its remedies in respect of deposits, insurance proceeds, condemnation awards or other monies or other collateral or letters of credit securing this Note; (f) relieve Borrower of its obligations under an indemnity delivered by Borrower to Authority; or (g) affec t in any way the validity of a guarantee or indemnity from any person of all or any of the obligations evidenced and secured by this Note and the Authority Deed of Trust. The foregoing provisions of this paragraph are limited by the provision that in the event of the occurrence of a default, Borrower and its successors and assigns will have personal liability hereunder for any deficiency judgment, but only if and to the extent Borrower, its principals, shareholders, partners or its successors and assigns received rentals, other revenues, or other payments or proceeds in respect of the mortgaged Property after the occurrence of such default, which rentals, other revenues, or other payments or proceeds have not been used for the payment of ordinary and reasonable operating expenses of the mortgaged Property, ordinary and reasonable capital improvements to the mortgaged Property, debt service, real estate taxes in respect of the mortgaged Property and basic management fees, but not incentive fees, payable to an entity or person unaffiliated with Borrower in connection with the operation of the mortgaged Property, which are then due and payable. Notwithstandin g the first sentence of this paragraph, Authority may recover directly from Borrower or from any other party (other than Borrower’s Investor Limited Partner):
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a. damages, costs and expenses incurred by the Authority as a result of fraud or criminal act or act s of Borrower or a partner, shareholder, officer, director or employee of Borrower, or of a member or general or limite d partner of Borrower, or of a general or limited partner of such member or general or limited partner;
b. damages, costs and expenses incu rred by Authority as a result of misappropriation of funds provided for the payment of Acquisition and Development Costs , as described in the Affordable Housing Agreement , rents and revenues from the operation of the Project, or proceeds of insurance policies or condemnation proceeds; c. all amounts owing by Borrower pursuant to the indemnification regarding Hazardous Substances under the Environmental Indemnity, and d. all court costs and attorneys ’ fees reasonably incurred in enforcing or collecting upon any o f the foregoing exceptions (provided that Authority will pay Borrower’s reasonable court costs and attorneys’ fees if Borrower is the prevailing party in such enforcement or collection action).

15. Borrower waives presentment for payment, demand, protest, and notices of dishonor and of protest; the benefits of all waivable exemptions; and all defenses and pleas on the ground of an extension or extensions of the time of payment or of a due date under this Note, in whole or in part, whether before or after maturity and with or without notice. Borrower hereby agrees to pay all costs and expenses, including reasonable attorney’s fees, which may be incurred by the holder hereof, in the enforcement of this Note, the Authority Deed of Trust or any term or provision of either thereof.

16. Upon the failure of Borrower to perform or observe a term or provision of this Note, or upon the occurrence of an event of default under the terms of the Authority Deed of Trust, the Affordable Housing Agreement, the HOME Regulatory Agreement, or a deed of trust securing a Senior Loan, or other obligations secured by a deed of trust on the Property, and after expiration of the applicable cure period , the holder may exercise its r ights or remedies hereunder or thereunder.

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c. Failures or delays by the Authority in asserting its rights and remedies as to a default will not operate as a waiver of default or of such rights or remedies. Delays by the Authority in asserting its rights and remedies will not deprive the Authority of its right to institute and maintain actions or proceedings which it may deem necessary to protect, assert, or enforce such rights or remedies.
d. If a monetary event of default occurs under the terms o f this Note or the Authority Deed of Trust, or a deed of trust securing a Senior Loan, or other obligations secured by a deed of trust on the Property, prior to exercising its remedies hereunder or thereunder the Authority will give Borrower, each general partner, and the Investor Limited Partner, concurrent written notice of such default. Borrower will have a reasonable period of time after such notice is given within which to cure the default prior to exercise of remedies by the Authority under this Note and the Authority Deed of Trust. In no event will the Authority be precluded from exercising remedies if its security becomes or is about to become materially impa ired by a failure to cure a default or the default is not cured within ten (10) calendar days after the notice of default is received or deemed received.
e. If a non-monetary event of default occurs under the terms of the Affordable Housing Agreement, this Note, the Authority Deed of Trust, the HOME Regulatory Agreement, or a document implementing the Affordable Housing Agreement or a deed of trust securing a Senior Loan or other obligations secured by a deed of trust on the Property, prior to exercising its remedies hereunder or thereunder, the Authority will give Borrower, each General Partner, and the Investor Limited Partner, concurrent notice of such default. If the default is reasonably capable of being cured within thirty (30) calendar days after such notice is received or deemed received, Borrower will have such period to effect a cure prior to exercise of remedies by the Authority under the Affordable Housing Agreement, the HOME Regulatory Agreement, this Note and/or the Authority Deed of Trust. If the default is such that it is not reasonably capable of being cured within thirty (30) days, and Borrower (i) initiates corrective action within said period, and (ii) diligently and in good faith works to effect a cure as soon as possible, then Borrower will have such additional time as is reasonably necessary to cure the default prior to the Authority’s exercise of remedies. If Borrower fails to take corrective action or to cure the default within the time set forth above in this Subsection 17.e, the Authority will give Borrower , the Senior Lender , the Investor Limited Partner written notice thereof, whereupon the Investor Limited Partner, subject to the terms of Borrower ’s partnership agreement, may take such corrective action, including removing and replacing a general partner. The Investor Limited Partner will have 90 days, or such longer period as is approved by the Authority Executive Director or designee, to remove and replace such general partner of Borrower. The Authority agrees to accept cures tendered by a Senior Lender or the Investor Limited Partner within the time period provided herein. Additionally, in the event the Senior Lender , or Investor Limited Partner is precluded from curing a non - monetary default due to a bankruptcy, injunction, or similar proceeding by or against Borrower or a general partner , the Authority agrees to forbear from completing a foreclosure (judicial or nonjudicial) during the period during which such party is so precluded from acting, not to exceed 90 days or such additional time as is reasonably approved by the Authority Executive Director or designee, provided such Senior Lender or Investor Limited Partner is otherwise in compliance with the foregoing provisions. In no event will Authority be precluded from exercising remedies if its 321 of 482

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To Authority:

HOUSING AUTHORITY OF

THE CITY OF GLENDALE
141 N. Glendale Avenue, Room 202,
Glendale, California 91206
Attention: Executive Director
Facsimile: 818-548-3724

With a copy to:

KANE, BALLMER & BERKMAN
515 S. Figueroa St., Suite 780
Los Angeles, California 90071-3301
Attention: Susan Apy

To Borrower:

Harrower Village, L.P.
c/o Abode Communities
1149 S. Hill Street, Suite 700
Los Angeles, California 90015
Attn: Lara Regus
Facsimile: 213-225-2709

With a copy to:

Enterprise Housing Credit Investments, LLC
70 Corporate Center
11000 Broken Land Parkway, Suite 700
Columbia, MD 21044
Attn: Reagan Maechling

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18. Notwithstanding specific provisions of this Note, Borrower will not be deemed to be in default for failure to perform a non-monetary obligation hereunder where delays or defaults are due to war, insurrection, strikes, lock -outs, riots, floods, earthquakes, fires, casualties, acts of God, acts of the public enemy, epid emics, quarantine restrictions, freight embargoes, lack of transportation, governmental restrictions or priority, litigation, unusually severe weather, inability to secure necessary labor, material or tools, delays of any contractor, sub -contractor or supplier, acts of the Authority or any other public or governmental Authority or entity, or any causes beyond the control or without the fault of the Borrower. An extension of time for any such cause (a “Force Majeure Delay”) will be for the period of the enforced delay and will commence to run from the time of the commencement of the cause, if notice by Borrower is sent to the Authority within fifteen (15) days of knowledge of the commencement of the cause. Notwithstanding the foregoing, none of the foregoing events will constitute a Force Majeure Delay unless and until Borrower delivers to the Authority written notice describing the event, its cause, when and how Borrower obtained knowledge, the date and the event commenced, and t he estimated delay resulting therefrom. Borrower will deliver such written notice within fifteen (15) days after it obtains actual knowledge of the event. Times of performance under this Note may also be extended in writing by the Authority and Borrower, such revision approval may be denied by either party in its sole discretion.

20. The Authority Deed of Trust securing this Note and all other HOME Loan Documents, except the HOME Regulatory Agreement, have been made subordinate and junior to the claims, liens or charges of the Construction Loan Deed of T rust and all other instruments securing the Construction Loan by that certain Subordination Agreement by and among Authority, Borrower and Construction Lender which is being recorded concurrently with the execution and delivery of this N ote and the recordation of the Authority Deed of Trust and will also be subordinate and junior to the claims, liens or charges of the Permanent Loan Deed of Trust and all other instruments securing the Permanent Loan.

21. The Authority agrees that the lien of the Authority Deed of Trust will be subordinate to the extended low-income housing commitment (as such term is defined in Section 42(h)(6)(B) of the Internal Revenue Code) (the “Extended Use Agreement”) recorded against the Project; provided that such Extended Use Agreement, by its terms, must terminate upon foreclosure under the Authority Deed of Trust or upon a transfer of the Project by instrument in lieu of foreclosure or comparable conversion of the Loan, in accordance with Section 42(h)(6)(E) of the Internal Revenue Code. The following rule contained in Section 42(h)(6)(E)(ii) of the Internal Revenue Code of 1986, as amended, will also apply: for a period of three (3) years from the date of foreclo sure, with respect to any unit that had been regulated by the Extended Use Agreement, (i) none of the tenants occupying those units at the time of foreclosure may be evicted or their tenancy terminated (other than for good cause), (ii) nor may any rent be increased except as otherwise permitted under Section 42 of the Code. Borrower acknowledges and agrees that a default, event of default, or breach (however such terms may be defined) under the Extended 323 of 482

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Use Agreement will be an event of defaul t under this Note and the Authority Deed of Trust and that all costs, damages or other amounts, including reasonable attorneys ’ fees incurred by the Authority as a result of an event of default by Borrower, and all amounts paid by Authority to cure a default under the Extended Use Agreement will be an obligation of Borrower and become a part of the debt evidenced by this Note and secured by the Authority Deed of Trust.

22. With regard to an approval, consent , or other determination by the Authority required under this Note or the other HOME Loan Documents, the Authority will act reasonably and in good faith.

23. Borrower will have the right to prepay the obligation evidenced by this Note, or any part thereof, without penalty. However, prepayment of the obligation evidenced by this Note prior to the expiration of the term of the HOME Regulatory Agreement will not entitle Borrower to a reconveyance of the Authority Deed of Trust.

24. This Note may be executed by each signatory on a separate signature page, and when the executed signature pages are combined, shall constitute one single instrument.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

[SIGNATURES ON FOLLOWING PAGE]

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912 and 920 East Broadway & 117 S. Belmont Street
HOME Note
S-1

IN WITNESS WHEREOF Borrower has executed this Note as of the day and year first set forth above.

BORROWER

HARROWER VILLAGE, L.P.,
a California limited partnership

by: Harrower Village GP, LLC,
a California limited liability company,
its general partner

by: Abode Communities,
a California nonprofit public benefit corporation,
its sole and managing member

Dated: __________, 2022 By:___________________________ Lara Regus
Senior Vice President

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Recording Requested by and
When Recorded Mail to:

HOUSING AUTHORITY OF

THE CITY OF GLENDALE
141 North Glendale Avenue, Suite 202
Glendale, California 91206
Attention: Director of Housing
and Community Development

SPACE ABOVE THIS LINE FOR RECORDER’S USE
APN: 5674-010-901
Document entitled to free
recording per Government
Code Section 27383

SUBORDINATED LEASEHOLD DEED OF TRUST,

SECURITY AGREEMENT AND FIXTURE FILING
(WITH ASSIGNMENT OF RENTS)
(912 and 920 East Broadway & 117 S. Belmont Street)

This Subordinated Leasehold Deed of Trust, Security Agreement and Fixture Filing (With Assignment of Rents) is made as of __________________, 2022 by HARROWER VILLAGE, L.P., a California limited partnership (“Trustor”) (whose address is 1149 S. Hill Street, Suite 700, Los Angeles, California 90015), to COMMONWEALTH LAND TITLE COMPANY, a California corporation (“Trustee”), for the benefit of THE HOUSING AUTHORIT Y OF THE CITY OF GLENDALE, a public body corporate and politic (“ Beneficiary”), whose address is 141 North Glendale Avenue, Suite 202, Glendale, California 91206.

Witnesseth: That Trustor IRREVOCABLY GRANTS, TRANSFERS AND ASSIGNS to Trustee, its successors and assigns, in Trust, with POWER OF SALE TOGETHER WITH RIGHT OF ENTRY AND POSSESSION the following property (the “Trust Estate”):
(a) That certain real property in the City of Glendale, County of Los Angeles, State of California more particularly described in Exhibit “A” attached hereto and by this reference made a part hereof (the “Subject Property”);
(b) All buildings, structures and other improvements now or in the future located or to be constructed on the Subject Property (the “Improvements”); 326 of 482

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(c) all tenements, hereditaments, appurtenances, privileges, franchises and other rights and interests now or in the future benefitting or otherwise relating to the Subject Property or the Improvements, including easements, rights -of-way and development rights (the “Appurtenances”). (The Appurtenances, together with the Subject Property and the Improvements, are hereafter referred to as the “Real Property”); (d) subject to the assignment to Beneficiary set forth in Paragraph 4 below, all rents, issues, income, revenues, ro yalties and profits now or in the future payable with respect to or otherwise derived from the Trust Estate or the ownership, use, management, operation leasing or occupancy of the Trust Estate, including those past due and unpaid (the “Rents”); (e) all p resent and future right, title and interest of Trustor in and to all inventory, equipment, fixtures and other goods (as those terms are defined in Division 9 of the California Uniform Commercial Code (the “UCC”), and whether existing now or in the future) now or in the future located at, upon or about, or affixed or attached to or installed in, the Real Property, or used or to be used in connection with or otherwise relating to the Real Property or the ownership, use, development, construction, maintenance, management, operation, marketing, leasing or occupancy of the Real Property, including furniture, furnishings, machinery, appliances, building materials and supplies, generators, boilers, furnaces, water tanks, heating ventilating and air conditioning equipment and all other types of tangible personal property of any kind or nature, and all accessories, additions, attachments, parts, proceeds, products, repairs, replacements and substitutions of or to any of such property, but not including personal proper ty that is donated to Trustor (the “Goods,” and together with the Real Property, the “Property”); and (f) all present and future right, title and interest of Trustor in and to all accounts, general intangibles, chattel paper, deposit accounts, money, instruments and documents (as those terms are defined in the UCC) and all other agreements, obligations, rights and written material (in each case whether existing now or in the future) now or in the future relating to or otherwise arising in connection with or derived from the Property or any other part of the Trust Estate or the ownership, use, development, construction, maintenance, management, operation, marketing, leasing, occupancy, sale or financing of the property or any other part of the Trust Estate, including (to the extent applicable to the Property or any other portion of the Trust Estate) (i) permits, approvals and other governmental authorizations, (ii) improvement plans and specifications and architectural drawings, (iii) agreements with contract ors, subcontractors, suppliers, project managers, supervisors, designers, architects, engineers, sales agents, leasing agents, consultants and property managers, (iv) takeout, refinancing and permanent loan commitments, (v) warranties, guaranties, indemnities and insurance policies, together with insurance payments and unearned insurance premiums, (vi) claims, demands, awards, settlements, and other payments arising or resulting from or otherwise relating to any insurance or any loss or destruction of, injury or damage to, trespass on or taking, condemnation (or conveyance in lieu of condemnation) or public use of any of the Property, (vii) license agreements, service and maintenance agreements, purchase and sale agreements and purchase options, together with advance payments, security deposits and other amounts paid to or deposited with Trustor under any such agreements, (viii) reserves, deposits, bonds, deferred payments, refunds, rebates, discounts, cost savings, escrow proceeds, sale 327 of 482

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proceeds and other ri ghts to the payment of money, trade names, trademarks, goodwill and all other types on intangible personal property of any kind or nature, and (ix) all supplements, modifications, amendments, renewals, extensions, proceeds, replacements and substitutions o f or to any of such property (the “Intangibles”).

Trustor further grants to Trustee and Beneficiary, pursuant to the UCC, a security interest in all present and future right, title and interest of Trustor in and to all Goods and Intangibles and all of the Trust Estates described above in which a security interest may be created under the UCC (collectively, the “ Personal Property ”). This Deed of Trust constitutes a security agreement under the UCC, conveying a security interest in the Personal Property to Trustee and Beneficiary.

Trustee and Beneficiary will have, in addition to all rights and remedies provided herein, all the rights and remedies of a “secured party” under the UCC and other applicable California law.

Trustor covenants and agrees that this Deed of Trust constitutes a fixture filing under Section 9313 and 9402(6) of the UCC.

FOR THE PURPOSE OF SECURING , in such order of priority as Beneficiary may elect, the following:
(1) due, prompt and complete observance, performance and discharge of each and every condition, obligation, covenant and agreement contained herein or contained in the following:

(a) a promissory note in the original principal amount of $543,000, executed by Trustor of even date herewith (the “LMIHAF Note”);
(b) a promissory note in the original principal amount of $8,357,000, executed by Trustor of even date herewith (the “Measure S Note”); (c) a promissory note in the original principal amount of $1,800,000, executed by Trustor of even date herewith (the “ HOME Note”) (the LMIHAF Note , the Measure S Note, and the HOME Note may collectively be referred to herein as the “Notes”);
(d) the Affordable Housing Agreement dated as of May 24 , 2022 (the “Affordable Housing Agreement”), between Trustor and Beneficiary; (e) the Agreement Containing Coven ants (Including Rental Restrictions) between Trustor and Beneficiary, recorded concurrently herewith (“ Agreement Containing Covenants”); and
(f) the Agreement Containing HOME Program Requirements between Trustor and Beneficiary, recorded concurrently herewith (“HOME Regulatory Agreement”); and
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(2) payment of indebtedness of the Trustor to the Beneficiary in the principal sum of $543,000 or so much thereof as will be advanced, evidenced by the LMIHAF Note secured hereby, with interest, according to the terms of the LMIHAF Note secured hereby; (3) payment of indebtedness of the Trustor to the Beneficiary in the principal sum of $8,357,000 or so much thereof as will be advanced, evidenced by the Measure S Note secured hereby, with interest, according to the terms of the Measure S Note secured hereby; and
(4) payment of indebtedness of the Trustor to the Beneficiary in the principal sum of $1,800,000 or so much thereof as will be advanced, evidenced by the HOME Note secured hereby, with interest, according to the terms of the HOME Note secured hereby.

The Affordable Housing Agreement, including all Attachments thereto, and the documents and instruments executed by Trustor in connection with the Project, including the Agreement Containing Covenants, the HOME Regu latory Agreement, the LMIHAF Note, the Measure S Note, the HOME Note, the Assignment of Rents and Leases, and the Assignment of Agreements, all as described in the Affordable Housing Agreement (collectively referred to as the “ Secured Obligations”) and all of their terms are incorporated herein by reference and this conveyance will secure any and all extensions, amendments, modifications or renewals thereof however evidenced, and additional advances evidenced by any note reciting that it is secured hereby. Each capitalized term that is not otherwise defined in this Deed of Trust has the meaning ascribed to it in the Affordable Housing Agreement.

AND TO PROTECT THE SECURITY OF THIS DEED OF TRUST, TRUSTOR COVENANTS AND AGREES:

1. That Trustor will pay the Notes secured hereby at the time and in the manner provided therein, and perform the obligations of the Developer as set forth in the Secured Obligations at the time and in the manner respectively provided therein;

2. That Trustor will not permit or suffer the use of any of the property for any purpose other than the uses permitted by the Affordable Housing Agreement, the Agreement Containing Covenants, and the HOME Regulatory Agreement;

3. That the Secured Obligations are incorp orated in and made a part of this Deed of Trust. Upon default of a Secured Obligation, and after the giving of notice and the expiration of any applicable cure period, the Beneficiary, at its option, may declare the whole of the indebtedness secured hereby to be due and payable.

4. That all rents, profits and income from the property covered by this Deed of Trust are hereby assigned to the Beneficiary for the purpose of discharging the debt hereby secured.

Permission is hereby given to Trustor so long as no default exists hereunder after the giving of 329 of 482

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notice and the expiration of any applicable cure period, to collect such rents, profits and income for use in accordance with the provisions of the Affordable Housing Agreement.

5. That upon default hereunder or under the aforementioned agreements, and after the giving of notice and the expiration of any applicable cure period, Beneficiary will be entitled to the appointment of a receiver by any court having jurisdiction, without notice, to take possession and protect the property described herein and operate same and collect the rents, profits and income therefrom;

6. That Trustor will keep the improvements to be constructed on the Property in accordance with the Affordable Housing Agreement insured against loss by fire and such other hazards, casualties, and contingencies as may reasonably be required in writing from time to time by the Beneficiary, and all such insurance will be evidenced by standard fire and extended coverage insurance policy or policies. In no event will the amounts of coverage be less than 100 percent of the insurable value of the Property. Such policies will be endorsed with standard mortgage clause with loss payable to the Beneficiary and certificates thereof together with copies of original policies will be deposited with the Beneficiary;

7. To pay, at least 10 days before delinquency, any taxes and assessments affecting said Property; to pay, when due, all encumbrances, charges and liens, with interest, on said Property or any part thereof which appear to be prior or superior hereto; and to pay all costs, fees, and expenses of this Trust. Notwithstanding anything to the contrary contained in this Deed of Trust, Trustor will not be required to pay and discharge any such tax, assessment, charge or lev y so long as Trustor is contesting the legality thereof in good faith and by appropriate proceedings, and Trustor has adequate funds to pay any liabilities contested pursuant to this Section 7.

8. To keep said property in good condition and repair, subjec t to ordinary wear and tear, casualty and condemnation, not to remove or demolish any buildings thereon; to complete or restore promptly and in good and workmanlike manner any building which may be constructed, damaged, or destroyed thereon and to pay when due all claims for labor performed and materials furnished therefor; to comply with all laws affecting said property or requiring any alterations or improvements to be made thereon (subject to Trustor’s right to contest the validity or applicability of laws or regulations); not to commit or permit waste thereof; not to commit, suffer or permit any act upon said property in violation of law and/or covenants, conditions and/or restrictions affecting said property; not to permit or suffer any material alterat ion of or addition to the buildings or improvements hereafter constructed in or upon said property without the consent of the Beneficiary;

9. To appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee, and to pay all costs and expenses, including cost of evidence of title and reasonable attorney’s fees in a reasonable sum, in any such action or proceeding in which Beneficiary or Trustee may appear; 330 of 482

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10. Should Trustor fail, after the giving of notice and the expiration of any applicable cure period, to make any payment or do any act as herein provided, then Beneficiary or Trustee, but without obligation so to do and without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof, may make or do the same in such manner and to such extent as either may deem necessary to protect the security hereof. Following default, after the giving of notice and the expiration of any applicable cure period, Beneficiary or Trustee being authorized to enter upon said property for such purposes, may commence, appear in and/or defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee; may pay, purchase , contest, or compromise any encumbrance, charge, or lien which in the judgment of either appears to be prior or superior hereto; and, in exercising any such powers, may pay necessary expenses, employ counsel, and pay his reasonable fees. Notwithstanding t he foregoing, in the event of default under this Deed of Trust, the Beneficiary may also require Trustor to maintain and submit additional records. Beneficiary will specify in writing the particular records that must be maintained and the information or reports that must be submitted;

11. Beneficiary will have the right to pay fire and other property insurance premiums when due should Trustor fail to make any required premium payments. All such payments made by the Beneficiary will be added to the principal sum secured hereby;

12. To pay immediately and without demand all sums so expended by Beneficiary or Trustee, under permission given under this Deed of Trust, with interest from date of expenditure at the rate specified in the Notes secured hereby;

13. That the funds to be advanced hereunder are to be used in accordance with the Secured Obligations and upon the failure of Trustor, after the giving of notice and the expiration of any applicable cure period, to keep and perform all the covenants, condit ions, and agreements of said agreements, the principal sum and all arrears of interest, and other charges provided for in the Notes secured hereby will at the option of the Beneficiary of this Deed of Trust become due and payable, anything contained herein to the contrary notwithstanding;

14. Trustor further covenants that it will not voluntarily create, suffer, or permit to be created against the property subject to this Deed of Trust any lien or liens except as permitted by the Secured Obligations or oth erwise approved by Beneficiary, and further that it will keep and maintain the property free from the claims of all persons supplying labor or materials which will enter into the construction of any and all buildings now being erected or to be erected on s aid premises. Notwithstanding anything to the contrary contained in this Deed of Trust, Trustor will not be obligated to pay any claims for labor, materials or services which Trustor in good faith disputes and is diligently contesting, provided that Trust or will, at Beneficiary’s written request, within thirty (30) days after the filing of any claim or lien (but in any event, and without any requirement that Beneficiary must first provide a written request, prior to foreclosure) record in the Office of the Recorder of Los Angeles County, a surety bond in an amount one -and-one-half (1½) times the amount of such claim item to protect against a claim of lien, or provide such other security reasonably satisfactory to Beneficiary;
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15. That any and all improvements made or about to be made upon the premises covered by this Deed of Trust, and all plans and specifications, comply with all applicable municipal ordinances and regulations and all other applicable regulations made or promulgat ed, now or hereafter, by lawful authority, and that the same will upon completion comply with all such municipal ordinances and regulations and with the rules of the applicable fire rating or inspection organization, bureau, association or office;

16. Trustor herein agrees to pay to Beneficiary or to the authorized loan servicing representative of the Beneficiary a reasonable charge for providing a statement regarding the obligation secured by this Deed of Trust as provided by Section 2954, Article 2, Chap ter 2 Title 14, Division 3, of the California Civil Code.

IT IS MUTUALLY AGREED THAT:

17. Should the Property or any part thereof be taken or damaged by reason of any public improvement or condemnation proceeding, or damaged by fire, or earthquake, or in any other manner, subject to the r ights of the beneficiary of the Construction Loan Deed of Trust, the Permanent Loan Deed of Trust and any other obligation having a lien on the Property that is senior to the lien of this Deed of Trust (“ Senior Lender ”), B eneficiary will be entitled to all compensation, awards, and other payments or relief therefor which are not used to reconstruct, restore or otherwise improve the property or part thereof that was taken or damaged, and will be entitled at its option to com mence, appear in and prosecute in its own name, any action or proceedings, or to make any compromise or settlement, in connection with such taking or damage; provided, that Beneficiary shall permit the use of such funds to reconstruct, restore or otherwise improve the property or part thereof that was taken or damaged as long as such reconstruction or restoration is feasible and can be completed prior to the expiration of the Term of the Loan. Subject to the rights of the Senior Lenders, all such compensation, awards, damages, rights of ac tion and proceeds which are not used to reconstruct, restore or otherwise improve the property or part thereof that was taken or damaged, including the proceeds of any policies of fire and other insurance affecting said property, are hereby assigned to Ben eficiary. After deducting therefrom all its expenses, including reasonable attorney’s fees, the balance of the proceeds which are not used to reconstruct, restore or otherwise improve the property or part thereof that was taken or damaged, will be applied to the amount due under the Note s secured hereby. No amount applied to the reduction of the principal will relieve the Trustor from making regular payments as required by the Notes secured hereby;

18. Upon default by Trustor in making any payments provided for in the Notes secured hereby or in this Deed of Trust, or in performing any obligation set forth in any of the Secured Obligations, and if such default is not cured within the respective time provided therefor in Section 34 of this Deed of Trust, below, Beneficiary may declare all sums secured hereby immediately due and payable by delivery to Trustee of written declaration of default and demand for sale, and of written notice of default and of election to cause the Property to be sold, which notice Trustee will cause to be duly filed for record and Beneficiary may foreclose this Deed of Trust. Beneficiary 332 of 482

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will also deposit with Trustee this Deed of Trust , the Note s and all documents evidencing expenditures secured hereby;

19. a. Prior to the repayment in full of the LMIHAF Loan, the Measure S Loan, and the HOME Loan and expiration of the terms of the Agreement Containing Covenants and the HOME Regulatory Agreement , the Trustor will not assign or attempt to assign the Affordable Housing Agreement or any right therein, nor make any total or partial sale, transfer, conveyance or assignment of the whole or any part of the Property, the Project thereon, or any portion thereof or interest therein (referred to hereinafter as a “Transfer”), without prior written approval of the Beneficiary, except for the Permitted Transfers described in Section 19.e.(3) below, or as otherwise permitted in the Notes secured hereby. Consent to one such transaction will not be deemed to be a waiver of the right to require consent to future or successive transactions. Beneficiary will not unreasonably withhold or delay its consent. If consent should be given, any such transfer will be subject to this Section 19, and any such transferee will assume all obligations hereunder and agree to be bound by all provisions contained herein, subject to the provisions of paragraph e.(3) of this Section 19, below.
b. Any such proposed transferee will have the qualifications and financial responsibility nece ssary and adequate as may be reasonably determined by the Beneficiary, to fulfill the obligations undertaken by Trustor in the Affordable Housing Agreement and the Authority Loan Documents. Any such proposed transferee, by instrument in writing satisfacto ry to the Beneficiary and in form recordable among the land records of Los Angeles County, for itself and its successors and assigns, and for the benefit of the Beneficiary will expressly assume all of the obligations of the Trustor under the Affordable Ho using Agreement and the Authority Loan Documents, and agree to be subject to all conditions and restrictions applicable to the Trustor in this Deed of Trust, subject to the provisions of paragraph e.(3) of this Section 19. There will be submitted to the B eneficiary for review all instruments and other legal documents proposed to effect any such transfer; and if approved by the Beneficiary its approval will be indicated to the Trustor in writing.
c. In the absence of specific written agreement by the Bene ficiary, no unauthorized Transfer, or approval thereof by the Beneficiary, will be deemed to relieve the Trustor or any other party from any obligations under the Affordable Housing Agreement or any other Authority Loan Document.
d. In the event of a Tra nsfer without the prior written consent of the Beneficiary, prior to the time the LMIHAF Loan, the Measure S Loan, and the HOME Loan are paid in full, the net proceeds (after repayment in full of any Senior Loan and the reconveyance of the Construction Loan Deed of Trust or Permanent Loan Deed of Trust ), will be paid to the Beneficiary to the extent necessary to pay in full the accrued interest, if any, current interest and remaining principal balance of the LMIHAF Loan, the Measure S Loan, and the HOME Loan. e. (1) As used herein, “Transfer” includes the sale, agreement to sell, transfer or conveyance of the Property, the Project, or any portion thereof or interest therein, 333 of 482

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whether voluntary, involuntary, by operation of law or otherwise, the execution of any installment land sale contract or similar instrument affecting all or a portion of the Property or Project, or the lease of all or substantially all of the Property or Project, except as provided in subparagraph e.(3) of this Section 19, below.
(2) “Transfer” will also include the transfer, assignment, hypothecation or conveyance of legal or beneficial ownership of any interest in Trustor, or any conversion of Trustor to an entity form other than that of Trustor at the time of execution of the Affordabl e Housing Agreement, except that a cumulative change in ownership interest of any general partner of forty- nine percent (49%) or less will not be deemed a “transfer” for purposes of this Deed of Trust and except for a “Permitted Transfer.”
(3) “Notwithstanding paragraphs (1) and (2), above, “Transfer” will not include any of the following Permitted Transfers , provided (except for subsection (f) below) Trustor, a general partner of Trustor , or an Affiliate of such general partner, retains day-to-day control over management of the Property and Improvements:
(a) An assignment of the Affordable Housing Agreement and sale of all of Trustor’s interest in the Property to an Affiliate, or a sale back to Trustor , which will be subject to the reasonable approval of Beneficiary’s Executive Director or designee; (b) A conveyance of a security interest in the Property in connection with a Senior Loan; provided that, a refinancing that increases the principal balance of the Senior Loan, increases the principal and interest payments required under the Senior Loan, changes the maturity of the Senior Loan, increases the interest rate of the Senior Loan, or otherwise changes the Senior Loan terms in a manner that creates an adverse effect upon the Authority will not be considered a Permitted Transfer and must be appro ved by Beneficiary’s Executive Director or designee;
(c) The inclusion of equity participation by Trustor by addition of limited partners to Trustor’s partnership, or similar mechanisms, and any transfers of limited partnership interests in Trustor’s partnership;
(d) The leasing for occupancy of all or any part of the Improvements on the Property , in accordance with the Affordable Housing Agreement , the Agreement Containing Covenants, and the HOME Regulatory Agreement; (e) The granting of easements or permits to facilitate the development of the Property in accordance with the Affordable Housing Agreement; (f) In addition, the withdrawal, removal and/or replacement of a general partner of Trustor’s partnership pursuant to the terms of the Trustor’s partnership agreement or a conveyance of Trustor’s interest in the Property and the Improvements or a transfer of limited partnership interests to a general partner pursuant to the option provided to that partner in Trustor’s partnership agreement will not constitute a default under this Deed of Trust or any of 334 of 482

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the Authority Loan Documents, nor will such actions accelerate the maturity of the LMIHAF Loan, Measure S Loan , or the HOME Loan , provided that any required substitute general partner , is reasonably acceptable to the Beneficiary and is selected with reasonable promptness ; provided, that an affiliate of Enterprise Community Asset Managem ent, Inc. shall not be require Beneficiary's approval; and,
(g) Any transfer approved in writing by Beneficiary’s Executive Director or designee, at his or her sole discretion.

Transfers described in clauses (a), (b), or (c) will be subject to the reasonable appr oval of the Beneficiary’s Executive Director or designee; provided that, the Beneficiary approves the transfer of limited partner interests in Trustor’s partnership, so long as such transfer is not a result of a resyndication of the Low Income Housing Tax Credits or the Historic Rehabilitation Tax Credits and does not otherwise result in increased equity participation in Trustor, and further provided that such transfer is not to a Prohibited Person or would otherwise violate Anti-Terrorism Laws. f. The Beneficiary will not unreasonably withhold, condition or delay its approval of any matter for which its approval is required hereunder.

Any disapproval will be in writing and contain the Beneficiary’s reasons for disapproval.

20. After the lapse of such time as may then be required by law following the recordation of said notice of default, and notice of sale having been given as then required by law, Trustee, without demand on Trustor, will sell said property at the time and place fixed by it in said notice of sale, either as a whole or in separate parcels, and in such order as it may determine at public auction to the highest bidder for cash in lawful money of the United States, payable at time of sale. Trustee may postpone sale of all or any portion of said property by public announcement at the time and place of sale, and from time to time thereafter may postpone the sale by public announcement at the time and place of sale, and from time to time thereafter may postpone the sale by public announcement at the time fixed by the preceding postponement. Trustee will deliver to the purchaser its Deed conveying the property so sold, but without any covenant or warranty, express or implied. The recitals in the Deed of any matters or facts will be conclusive proof of the truthfulness thereof. Any person, including Trustor, Trustee or Beneficiary, may purchase at the sale. The Trustee will apply the proceeds of sale to payment of (1) the expenses of such sale, together with the reasonable expenses of this trust in cluding therein reasonable Trustee ’s fees or attorney’s fees for conducting the sale, and the actual cost of publishing, recording, mailing and posting notice of the sale; (2) the cost of any search and/or other evidence of title procured in connection with such sale and revenue stamps on Trustee’s Deed; (3) all sums expended under the terms hereof, not then repaid, with accrued interest at the rate specified in the Note s; (4) all other sums then secured hereby; and (5) the remainder, if any, to the person or persons legally entitled thereto;

21. Beneficiary may from time to time substitute a successor or successors to any Trustee named herein or acting hereunder to execute this Trust. Upon such appointment, and 335 of 482

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without conveyance to the successor trustee, the latter will be vested with all title, powers, and duties conferred upon any Trustee herein named or acting hereunder. Each such appointment and substitution will be made by written instrument executed by Beneficiary, containing reference to this Deed of Trust and its place of record, which, when duly recorded in the proper office of the county or counties in which the property is situated, will be conclusive proof of proper appointment of the successor trustee;

22. The pleading of any statute of limitations as a defense to any and all obligations secured by this Deed of Trust is hereby waived to the full extent permissible by law;

23. Upon written request of Beneficiary stating that all sums secured hereby have been paid and all obligations secured hereby have been satisfied, and upon surrender of this Deed of Trust and the Notes to Trustee for cancellation and retention and upon payment of its fees, Trustee will reconvey, without warranty, the property then held hereunder. The recitals in such reconveyance of any matters or fact will be conclusive proof of the truthfulness thereof. The grantee in such reconveyance may be described as “the person or persons legally entitled thereto”;

24. The trust created hereby is irrevocable by Trustor;

25. This Deed of Trust applies to, inures to the benefit of, and binds all parties hereto, their heirs, legatees, devisees, administrators, executors, successors, and assigns. The term “Beneficiary” will include not only the original Beneficiary hereunder but also any future owner and holder including pledgees, of the Note s secured hereby. In this Deed of Trust, whenever the context so requires, the masculine gender includes the feminine and/or neuter, and the singular number includes the plural. All obligations of Trustor hereunder are joint and several;

26. Trustee accepts this Trust when this Deed of Trust, duly executed and acknowledged, is made public record as provided by law. Except as otherwise provided by law the Trustee is not obligated to notify any party hereto of pending sale under this Deed of Trust or of any action of proceeding in which Trustor, Beneficiary, or Trustee will be a party unless brought by Trustee;

27. The undersigned Trustor requests that a copy of any notice of default and of any notice of sale hereunder be mailed to Trustor at the following address:

Harrower Village, L.P.
c/o Abode Communities
1149 S. Hill Street, Suite 700
Los Angeles, California 90015
Attn: Lara Regus
(Facsimile: 213-225-2709)

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With a copy to Limited Partner:

Wincopin Circle LLLP
c/o Enterprise Community Asset Management, Inc.
70 Corporate Center
11000 Broken Land Parkway, Suite 700
Columbia, MD 21044
Attn: General Counsel

28. Trustor agrees at any time and from time to time upon receipt of a written request from Beneficiary, to furnish to Beneficiary detailed statements in writing of income, rents, profits, and operating expenses of the premises, and the names of the occupants and tenants in possession, together with the expiration dates of their leases and full information regar ding all rental and occupancy agreements, and the rents provided for by such leases and rental and occupancy agreements, and such other information regarding the premises and their use as may be requested by Beneficiary.

29. Trustor agrees that the loan secured by this Deed of Trust is made expressly for the purpose of financing the acquisition, development , rehabilitation, and construction of the Improvements, including 39 dwelling units of affo rdable housing (plus one manager’s unit) for Extremely Low, Very Low Income , and Low Income Senior Citizen H ouseholds, and such dwelling units will be occupied exclusively by such persons as set forth in the Secured Obligations.

30. Trustor agrees that, except as otherwise provided in the Notes secured hereby or in this Deed of Trust, upon sale or refinancing of the Property, the entire principal balance of the debt secured by this Deed of Trust, plus any accrued but unpaid interest thereon, will at the option of Beneficiary be immediately due and payable.

31. The obligation to repay the LMIHAF Loan, the Measure S Loan, and the HOME Loan is a nonrecourse obligation of the Trustor and its partners. Neither Trustor nor any of its general or limited partners, nor any other party, will have any personal liability for repayment of the loan. T he sole recourse of Beneficiary will be the exercise of its rights against the Property and any related security for the LMIHAF Loan, the Measure S Loan , and the HOME Loan .

Notwithstanding the foregoing, Beneficiary may recover directly from Trustor or fr om any other party (other than Trustor’s Investor Limited Partner):
(a) any damages, costs and expenses incurred by Beneficiary as a result of fraud or any criminal act or acts of Trustor or any partner, shareholder, officer, director or employee of Trustor, or of any member or general or limited partner of Trustor, or of any general or limited partner of such member or general or limited partner; (b) any damages, costs and expenses incurred by Beneficiary as a result of any misappropriation of funds provided for the construction of the Improvements, rents and 337 of 482

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revenues from the operation of the Improvements or proceeds of insurance policies or condemnation proceeds;
(c) any and all amounts owing by Trustor pursuant to the indemnification regarding Hazardous Substances pursuant to the Environmental Indemnity, and (d) all court costs and attorneys’ fees reasonably incurred in enforcing or collecting upon any of the foregoing exceptions (provided that Beneficiary will pay Trustor’s reasonable court costs and attorneys’ fees if Trustor is the prevailing party in any such enforcement or collection action).

32. Notwithstanding specific provisions of this Deed of Trust, non -monetary performance hereunder will not be deemed to be in default where delays or defaults are proximately caused by any of the following Force Majeure events, provided such event actually delays and interferes with the timely performance of the matter, and, despite the exercise of diligence and good business practices, such event is beyond the reasonable control of Trustor:

War; insurrection; strikes; lock-outs; riots; floods; earthquakes; fires; casualties; acts of God; acts of the public enemy; acts of terrorism, epidemics; quarantine restrictions; freight embargoes; lack of transportation; governmental restrictions or priority; litigation including litigation challenging the validity of this transaction or any element thereof; unusually severe weather; inability to secure necessary labor, materials or tools; delays of any contractor, subcontractor, or suppliers; acts of the other party; acts or failure to act of any Governmental Authority (except acts or failure to act of the Beneficiary will not excuse performance by the Beneficiary); the imposition of any applicable moratorium by a Governmental Authority; or any other causes which despite the exercise of diligence and good business practices are or would be beyond the reasonable control of the party claiming such delay and interferenc e. Notwithstanding the foregoing, none of the foregoing events will constitute a Force Majeure Event unless and until Trustor delivers to Beneficiary written notice describing the event, its cause, when and how Trustor obtained knowledge, the date the even t commenced, and the estimated delay resulting therefrom. Trustor will deliver such written notice within fifteen (15 ) days after it obtains actual knowledge of the event.

33. If the rights and liens created by this Deed of Trust will be held by a court of competent jurisdiction to be invalid or unenforceable as to any part of the obligations described herein, the unsecured portion of such obligations will be completely performed and paid prior to the performance and payment of the remaining and secured p ortion of the obligations, and all performance and payments made by Trustor will be considered to have been performed and paid on and applied first to the complete payment of the unsecured portion of the obligations.

34. (a) Subject to the extensions of t ime set forth in Section 32, and subject to the further provisions of this Section 34, failure or delay by Trustor to perform any term or provision respectively required to be performed under the Secured Obligations or this Deed of Trust constitutes a default under this Deed of Trust.
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(b) Beneficiary will give written notice of default to Trustor and the Investor Limited Partner, specifying the default complained of by the Beneficiary. Delay in giving such notice will not constitute a waiver of any default nor will it change the time of default. (c) Any failures or delays by Beneficiary in asserting any of its rights and remedies as to any default will not operate as a waiver of any default or of any such rights or remedies. Delays by Beneficiary in asserting any of its rights and rem edies will not deprive Beneficiary of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert, or enforce any such rights or remedies. (d) If a monetary event of default occurs, prior to exercising an y remedies hereunder, prior to exercising its remedies, Beneficiary will give Trustor, each general partner, and the Investor Limited Partner, concurrent written notice of such default. Trustor and the Investor Limited Partner will have a reasonable period of time after such notice is giv en within which to cure the default prior to exercise of remedies by the Beneficiary under this Deed of Trust. In no event will the Beneficiary be precluded from exercising remedies if its security becomes or is about to become materially impaired by a fai lure to cure a default or the default is not cured within ten (10) calendar days after the notice of default is received or deemed received. (e) If a non -monetary event of default occurs, prior to exercising any remedies hereunder, Beneficiary will give T rustor, each general partner, and the Investor Limited Partner, concurrent notice of such default. If the default is reasonably capable of being cured within thirty (30) calendar days after such notice is received or deemed received, Trustor will have such period to effect a cure prior to exercise of remedies by the Beneficiary under this Deed of Trust. If the default is such that it is not reasonably capable of being cured within thirty (30) days, and Trustor (i) initiates corrective action within said period, and (ii) diligently and in good faith works to effect a cure as soon as possible, then Trustor will have such additional time as is reasonably necessary to cure the default prior to the Beneficiary’s exercise of remedies. If Trustor fails to take corrective action or to cure the default within the time set forth above in this subsection (e), Beneficiary will give Trustor, the Senior Lender, and the Investor Limited Partner written notice thereof, whereupon the Investor Limited Partner, subject to the terms of Trustor’s partnership agreement, may take such corrective action, including removing and replacing a general partner. The Investor Limited Partner will have 90 days, or such longer period as is approved by the Beneficiary Executive Director or designee, to remove and replace such general partner of Trustor. Beneficiary agrees to accept cures tendered by a Senior Lender or the Investor Limited Partner within the time period provided herein. Additionally, in the event the Senior Lender or Investor L imited Partner is precluded from curing a non -monetary default due to a bankruptcy, injunction, or similar proceeding by or against Trustor or a general partner, Beneficiary agrees to forbear from completing a foreclosure (judicial or nonjudicial) during the period during which such party is so precluded from acting, not to exceed 90 days or such additional time as is reasonably approved by the Beneficiary Executive Director or designee, provided such Senior Lender or Investor Limited Partner is otherwise in compliance with the foregoing provisions. In no event will Beneficiary be precluded from exercising remedies if its security becomes or is about to become materially jeopardized by a failure to cure a default or the default is not cured within one hundr ed eighty 339 of 482

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(180) days after the notice of default is received or deemed received or such additional time as is reasonably approved by the Beneficiary Executive Director or designee. (f) After Trustor gives written notice to Beneficiary that the Investor Limited Partner has been admitted to the Trustor, Beneficiary will send to the Investor Limited Partner a copy of all notices of default and all other notices that Beneficiary sends to Trustor, at the address for the Investor Limited Partner as provided by written notice to Beneficiary by Trustor. (g) Any notice of default that is transmitted by electronic facsimile transmission followed by delivery of a “hard” copy, will be deemed delivered upon its transmission; any notice of default that is personally delivered (including by means of professional messenger service, courier service such as United Parcel Service or Federal Express, or by U.S. Postal Service), will be deemed received on the documented date of receipt by Trustor; and any notice of default that is sent by registered or certified mail, postage prepaid, return receipt required will be deemed received on the date of receipt thereof.

35. This Deed of Trust will be subordinate and junior to the Construction Loan Deed of Trust. Following the reconveyance of the lien of the Construction Loan Deed of Trust , this Deed of Trust will be subordinate and junior to the deed of trust in favor of the maker of any permanent or take-out loan (each of which loans is referred to herein as a “Permanent Loan”), as described in the Notes secured hereby. The Executive Director of the Beneficiary or his designee will execute such instruments as may be necessary to subordinate the lien of this Deed of Trust and the Secured Obligations, to the dee d of trust securing the Construction Loan, the Permanent Loan, any regulatory agreement recorded in connection with the issuance of the Low Income Housing Tax Credits. In the event of a default or breach by Trustor of any security instrument securing a Sen ior Loan described in this Section 35, Beneficiary will have the right to cure the default prior to completion of any foreclosure. In such event, Beneficiary will be entitled to reimbursement by Trustor of all reasonable costs and expenses incurred by Beneficiary in curing the default. The amount of any such disbursements will be a lien against the Subject Property and added to the obligation secured by this Deed of Trust until repaid, with interest at the highest rate permitted by law.

36. The Trustor h as informed the Beneficiary that Trustor intends that the Project qualify for an allocation of low -income housing tax credits under Section 42 of the Internal Revenue Code (“Tax Credits”). In order to receive an allocation of Tax Credits, the Trustor will be required to record in the real property records of the County of Los Angeles an “extended low- income housing commitment” (as defined in Code Section 42(h)(6)(B)) (the “ Extended Use Agreement”). If the Trustor demonstrates to the reasonable satisfactio n of the Beneficiary that the Tax Credit Allocation Committee or applicable federal law requires that the lien of this Deed of Trust be subordinate to the Extended Use Agreement, then the Beneficiary will execute a subordination agreement (“ Extended Use Subordination Agreement”) wherein the lien of this Deed of Trust is subordinated to the Extended Use Agreement. The Extended Use Subordination Agreement will:
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(a) provide that such Extended Use Agreement, by its terms, must terminate upon foreclosure under this Deed of Trust or upon a transfer of the Property by instrument in lieu of foreclosure or comparable conversion of the LMIHAF Loan, the Measure S Loan, and HOME Loan, in accordance with Section 42(h)(6)(E) of the Internal Revenue Code; (b) provide that the following rule contained in Section 42(h)(6)(E)(ii) of the Internal Revenue Code of 1986, as amended, will also apply: for a period of three (3) years from the date of foreclosure, with respect to any unit that had been regulated by the Extended U se Agreement, (i) none of the tenants occupying those units at the time of foreclosure may be evicted or their tenancy terminated (other than for good cause), (ii) nor may any rent be increased except as otherwise permitted under Section 42 of the Code;
(c) provide that Trustor acknowledges and agrees that any default, event of default, or breach (however such terms may be defined) under the Extended Use Agreement will be an event of default under this Deed of Trust and that any costs, damages or other amounts, including reasonable attorneys’ fees incurred by Beneficiary as a result of an event of default by Trustor, and any amounts paid by Beneficiary to cure any defau lt under the Extended Use Agreement will be an obligation of Trustor and become a pa rt of the debt evidenced by the LMIHAF Loan, the Measure S Note, and/or the HOME Note, as applicable, and secured by this Deed of Trust; and
(d) otherwise be in a form reasonably acceptable to Beneficiary.

37. This Deed of Trust will be subject to the terms and conditions set forth in that certain Subordination Agreement recorded concurrently herewith by and among the Trustor, Senior Lender, and the Beneficiary, as the same may be amended, restated, supplemented or modified from time to time.
[Remainder of page intentionally blank]
[signatures on following page]

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912 and 920 East Broadway & 117 S. Belmont Street
Authority Deed of Trust
S-1
IN WITNESS WHEREOF Trustor has executed this Deed of Trust as of the day and year set forth above.

HARROWER VILLAGE, L.P.,
a California limited partnership

by: Harrower Village GP, LLC,
a California limited liability company,
its general partner

by: Abode Communities,
a California nonprofit public benefit corporation,
its sole and managing member

By:___________________________
Lara Regus
Senior Vice President

342 of 482

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 (Seal)

A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. 343 of 482

STATE OF CALIFORNIA )
)

COUNTY OF )

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)

912 and 920 East Broadway & 117 S. Belmont Street
Authority Deed of Trust
Exhibit A – Legal Description
Exhibit A

LEGAL DESCRIPTION

A leasehold interest created by that certain Ground Le ase between the Housing Authority of the City of Glendale and HARROWER VILLAGE, L.P., a California limited partnership, dated as of _______________, 2022 in the real property described as follows:

LOTS 1, 2, 3, 4 AND 5 OF THE MAX MUIR TRACT, IN THE CITY OF GLENDALE,

COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 10 PAGE 102 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.

EXCEPT THE NORTH 20 FEET OF LOTS 1, 2 AND 3 CONDEMNED BY THE CITY GLENDALE FOR STREET PURPOSES.

APN: 5674-010-901

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RECORDING REQUESTED BY
AND WHEN RECORDED RETURN TO:

HOUSING AUTHORITY OF THE

CITY OF GLENDALE
141 North Glendale Avenue, Suite 202
Glendale, California 91206
Attn: Director of Housing
and Community Development

SPACE ABOVE THIS LINE FOR RECORDER’S USE

APN: 5674-010-901 OFFICIAL BUSINESS
Document entitled to free
recording per Government
Code Section 27383

ASSIGNMENT OF RENTS AND LEASES

THIS ASSIGNMENT OF RENTS AND LEASES (the “Assignment”) is made as of _______________________, 202 2 by HARROWER VILLAGE, L. P., a California limited partnership ( “Borrower”), in favor of the HOUSING AUTHORITY OF THE CITY OF GLENDALE, a public body, corporate and politic, and its successors and assigns (collectively, the “Authority”).

RECITALS

A. Borrower is the owner of a leasehold interest in real property described in Exhibit “A” attached hereto, and the owner of all of the personalty, fixtures, and improvements now or hereafter located thereon or attached thereto now existing or to be constructed thereon. Said real property, personalty, fixtures, and the improvements are herein referred to collectively as the “Premises”.

B. Authority has agreed to make three loans to Borrower in the original principal amounts of FIVE HUNDRED FORTY -THREE THOUSAND DOLLARS ($543,000) (“LMIHAF Loan ”), EIGHT MILLION T HREE HUNDRED FIFTY-SEVEN THOUSAND DOLLARS ($ 8,357,000) (“ Measure S Loan ”), and ONE MILLION EIGHT HUNDRE D THOUSAND DOLLARS ($1 ,800,000) (“HOME Loan” and, together with the LMIH AF Loan and the Measure S Loan, collectively, the “ Authority Loan s”), pursuant to the terms of an Affordable Housing Agreement by and between Borrower and Authority dated as of May 24, 2022 (“Loan Agreement”). The LMIHAF Loan, the Measure S Loan, and the HOME Loan are each 346 of 482

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evidenced by a promissory note of even date herewith (each, a “ Note”) and are secured by a Subordinated Leasehold Deed of Trust, Security Agreement and Fixture Filing, of even date herewith, executed by Borrower, as Trustor, for the benefit of Authority, as Beneficiary (“Deed of Trust”).

C. In order to induce Authority to make the Authority Loans to Borrower, Borrower has agreed to execute this Assignment.

NOW, THEREFORE, with reference to the foregoing and in reliance thereon and for good and valuable consideration, the receipt of which is hereby acknowledged, Borrower agrees as follows:

AGREEMENT

1. All initially capitalized terms used herein, unless otherwise defined or required by context, have the meaning ascribed to them in the Loan Agreement.

2. Borrower hereby absolutely grants, sells, assigns, transfers, and sets over to Authority, by this Assignment, all of Borrower ’s interests, whether now existing or hereafter acquired, in all leases and other occupancy agreements of any natu re, now or hereafter covering all or any part of the Premises, together with all extensions, renewals, modifications, or replacements of said leases and occupancy agreements, and together with any and all guarantees of the obligations of the lessees and oc cupants (“Lessees”) thereunder, whether now existing or hereafter executed, and all extensions and renewals of said guarantees. (Said leases and occupancy agreements, together with any and all guarantees, modifications, extensions and renewals thereof, are hereinafter referred to collectively as the “Leases” and individually as a “Lease”.)

3. Borrower’s purpose in making this Assignment is to relinquish to Authority its right to collect and enjoy the rents, royalties, issues, profits, income, and other benefits at any time accruing by virtue of the Leases (hereinafter called “Rents and Profits”).

4. This Assignment is a present, absolute and unconditional assignmen t, subordinate to the rights of Wells Fargo Bank , National Association, a national banking association , and its successors and assigns (“Senior Lender”) and, immediately upon execution, gives the Authority the right to collect the Rents and Profits and to apply them in payment of the principal and interest and all other sums payable on the Indebtedness and other Obligations under each Note and other loan documents, as well as all other sums payable under the Deed of Trust or any other instrument given as security for the Indebtedness , subject to the rights of the Senior Lender and Permanent Lender. However, the Authority hereby grants to Borrower a license to collect and use, subject to the provisions set forth below, the Rents and Profits as they respectively become due and to enforce the Leases, so long as there is no Default by Borrower in performance of the terms, covenants, or provisions of the Deed of Trust, any Note, or the Loan Agreement, this Assignment or any other 347 of 482

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loan document, after the expiration of any applicable notice and cure periods. Nothing contained herein, nor any collection of Rents and Profits by Authority or by a receiver, will be construed to make Authority a “mortgagee in possession” of the Premises so long as Authority has not entered into actual possession of the Premises.

5. Upon the occurrence of any Default or Event of Default, after the expiration of any applicable notice and cure periods, under the terms and conditions of this Assignment, each Note, the Deed of Trust, the Loan Agreement or any other loan document, this Assignment will constitute a direction and full authority to each Lessee under any Lease and each guarantor of any Lease to pay all Rents and Profits to Authority without proof of the Default relied upon. Borrower hereby irrevocably authorizes each Lessee and guarantor to rely upon and comply with any notice or demand by Authority for the payment to Authority of any Rents and Profits due or to become due.

6. Borrower represents and warrants as to each Lease now or hereafter covering all or any portion of the Premises, unless Authority has been otherwise advised in writing by Borrower:

a. That each Lease is in full force and effect;

b. That no materi al default exists on the part of the Lessee thereunder or Borrower;

c. That no rent in excess of one month’s rent has been collected in advance;

d. That no Lease or any interest therein has been previously assigned or pledged;

e. That no Lessee un der any Lease has any defense, setoff or counterclaim against Borrower; and

f. That all rent due to date under each Lease has been collected and no concession has been granted to any Lessee in the form of a waiver, release, reduction, discount, or other alteration of rent due or to become due except as previously disclosed to Borrower in writing.

7. Borrower agrees with respect to each Lease:

a. If any Lease provides for a security deposit paid by the Lessee to Borrower, this Assignment transfers to Authority all of Borrower’s right, title, and interest in and to each such security deposit; provided, however, that Borrower will have the right to retain said security deposit so long as Borrower is not in Default, after the expiration of any applicable notice and cure periods, under this Assignment, the Deed of Trust, each Note, the Loan Agreement or any other Loan Document; and provided further that Authority will have no obligation to the Lessee with 348 of 482

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respect to such security deposit unless and until Authority comes into actual possession and control of said security deposit.

b. If any Lease provides for the abatement of rent during repair of the leased premises by reason of fire or other casualty, Borrower will furnish rental insurance to Authority, the policies to be with companies and in form, content, policy limits, and terms as are customary in the case of entities owning similar property or assets similarly situated.

c. Each Lease will remain in full force and effect despite any merger of the interest of Borrower and any Lessee thereunder. Except as otherwise provided in the Loan Agreement, Borrower will not terminate any Lease (except pursuant to the terms of the Lease upon a Default by any Lessee thereunder), or materially modify or amend any Lease or any of the terms thereof, or grant any concessions in connection therewith or accept a surrender thereof, without the prior written consent of Authority, which consent will not be unreasonably withheld.

d. Except as otherwise provided in the Loan Agreement, Borrower will not hereafter execute any Lease, the terms and conditions of which have not been previously approved in writing by Authority, which approval will not be unreasonably withheld or delayed.

e. Borrower will not collect any Rents and Profits more than thirty (30) days in advance of the date on which they become due under the terms of any Lease , provided that Borrower may collect customary security deposits more than 30 days in advance.

f. Borrower will not discount any future accruing Rents and Profits.

g. Borrower will not consent to any assignment of any Lease, or any subletting thereunder, whether or not in accordance with its terms, on any terms less favorable than those that would reflect an arm ’s length transaction in light of prevailing market conditions (subject to the rent restrictions applicable to the Premises), without the prior written consent of Authority, except as otherwise provided in the Loan Agreement.

h. Except as ot herwise provided in the Loan Agreement, Borrower will not execute any further assignment of any of the Rents and Profits or any interest therein or suffer or permit any such assignment to occur by operation of law.

i. Borrower will not request, consent to, agree to, or accept a subordination of any Lease to any mortgage, deed of trust or other encumbrance, or any other lease, now or hereafter affecting the Premises or any part thereof, or suffer or permit conversion of any Lease to a sublease, without Authority’s prior written consent.

j. Borrower will faithfully perform and discharge all obligations of the lessor under each Lease, and will give prompt written notice to Authority of any notice of Borrower ’s 349 of 482

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default received from any Lessee or any other person and furnish Authority with a complete copy of said notice. Borrower will appear in and defend, at no cost to Authority, any action or proceeding arising under or in any manner connected with any Lease. If requested by Authority , Borrower will enforce each Lease and all remedies available to Borrower against the Lessee in the case of default under the Lease by the Lessee.

k. Except as otherwise provided in the Loan Agreement, Borrower will give Authority written annual reports of al l L eases entered into during the previous year, and will promptly upon request of Authority provide to Authority a true and correct copy of each executed Lease. All Leases entered into by Borrower will be deemed included in this Assignment as though originally listed herein. At Authority’s option, such reports may be recorded in the Official Records of Los Angeles County, California, which report will refer to this Assignment.

l. Except as otherwise provided in the Loan Agreement, at Authority’s option, Borrower will not hire, retain, or contract with any third party for property management services with respect to the Premises, without the prior written approval of Authority of such party and the terms of its contract for management services.

m. Nothing herein will be construed to impose any liability or obligation on Authority under or with respect to any Lease. Borrower will indemnify, defend, and hold Authority, its officers, directors, agents, employees, and represe ntatives (the Indemnitees) harmless from and against any and all liabilities, losses, and damages that any Indemnitee may incur under any Lease or by reason of this Assignment, and of and from any and all claims and demands whatsoever that may be asserted against any Indemnitee by reason of any alleged obligations to be performed or discharged by Authority under any Lease or this Agreement, unless any of the foregoing arises from or results from the gross negligence or willful misconduct of any Indemnitee. Should any Indemnitee incur any liability, loss, or damage under any Lease or by reason of this Assignment and such liability, loss, or damage falls within the foregoing indemnification, Borrower will immediately upon demand reimburse such Indemnitee for the amount thereof together with all costs and expenses and reasonable attorneys ’ fees (based on itemized invoices for time and charges) and court costs incurred by such Indemnitee. All of the foregoing sums will bear interest at the maximum rate permitted by law from demand by Indemnitee until paid. Any Rents and Profits collected by Authority may be applied by Authority, in its discretion, in satisfaction of any such liability, loss, damage, claim, demand, cost , expense, or fees.

8. Subject to the rights of Senior Lender, Borrower hereby grants to Authority the following rights:

a. Upon an Event of Default as defined in the Loan Agreement, Authority will be deemed to be the creditor of each Lessee in respec t of any assignments for the benefit of creditors and any bankruptcy, arrangement, reorganization, insolvency, dissolution, receivership, 350 of 482

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or other debtor relief proceedings affecting such Lessee, without obligation on the part of Authority, however, to file timely claims in such proceedings or otherwise pursue creditor’s rights therein.

b. Authority will have the right to assign Borrower ’s right, title, and interest in the Leases to any subsequent holder of the Deed of Trust or any participating interest therein or to any person acquiring title to all or any part of the Premises through foreclosure or otherwise.

Any subsequent Authority will have all the rights and powers herein provided to Authority.

c. Authority will have the right (but not the oblig ation), upon any Event of Default under the Deed of Trust or the Loan Agreement, to take any action as Authority may deem necessary or appropriate to protect its security, including but not limited to appearing in any action or proceeding and performing any obligations of the lessor under any Lease; and Borrower agrees to pay, on demand, all costs and expenses, including without limitation reasonable attorneys’ fees and court costs incurred by Authority in connection therewith, together with interest thereon at the rate of ten percent (10%) per annum.

d. Upon any Default under this Assignment, the Deed of Trust, any Note, the Loan Agreement , or any other loan document (subject to any notice and cure provisions), and without notice to or consent of Borrower, Authority will have the following rights (none of which will be construed to be obligations of Authority):

i. Authority will have the right under this Assignment to use and possess, without rental or charge, the Fixtures, Equipment, and Personal Property of the Borrower located in or on the Premises and used in the operation or occupancy thereof. Authority will have the right to apply any of the Rents and Profits to pay installments due for Personal Property rented or purchased on credit, insurance premiums on Personal Property, or other charges relating to Personal Property in or on the Premises. However, this Assignment will not make Authority responsible for the control, care, management, or repair of the Premises or any Personal Property or for the carrying out of any of the terms or provisions of any Lease.

ii. Authority will have the right to apply the Rents and Profits and any sums recovered by Authority hereunder to the outstanding Indebtedness, as well as to charges for taxes, insurance, improvements, maintenance, and other items relating to the operation of the Premises.

iii. Authority will have the right to take possession of the Premises, manage and operate the Premises and Borrower’s business thereon, and to take possession of and use all books of account and financial records of Borrower and its property managers or representatives relating to the Premises.

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iv. Authority will have the right to execute new Leases of any part of the Premises, including Leases that extend beyond the term of the Deed of Trust.

v. Authority will have the right to cancel or alter any existing Leases.

vi. Authority will have the irrevocable authority, as Borrower ’s attorney-in-fact, such authority being coupled with an interest, to sign the name of Borrower and to bind Borrower on all papers and documents relating to the operation, leasing and mainten ance of the Premises.

e. All of the foregoing rights and remedies of Authority are cumulative, and Authority will also have upon the occurrence of any such Default or Event of Default all other rights and remedies provided under each Note, the Loan Agreement, the Deed of Trust, or any other loan document or other agreement between Borrower and Authority or between Borrower and Authority, or otherwise available at law or in equity or by statute subject to the nonrecourse clause set forth in each Note.

9. Failure of Authority to avail itself of any terms, covenants, or conditions of this Assignment for any period of time or for any reason will not constitute a waiver thereof.

10. Notwithstanding any future modification of the terms of any Note, the Deed of Trust, the Loan Agreement , or any other loan document, this Assignment and the rights and benefits hereby assigned and granted will continue in favor of Authority in accordance with the terms of this Assignment.

11. This Assignment will be binding up on and inure to the benefit of the respective heirs, legal representatives, successors, and assigns of the parties hereto (including without limitation in the case of Authority, any third parties now or hereafter acquiring any interest in the Indebtedness or other obligations of Borrower under each Note or Deed of Trust or a part thereof, whether by virtue of assignment, participation, or otherwise). The words Borrower, Authority, and Lessee, wherever used herein, will include the persons and entities named herein or in any Lease and designated as such and their respective heirs, legal representatives, successors and assigns, provided that any action taken by the named Authority or any successor, designated as such by an instrument recorded in the Official R ecords of Los Angeles County, California, referring to this Assignment, will be sufficient for all purposes notwithstanding that Authority may have theretofore assigned or participated any interest in the obligation to a third party. All words and phrases will be taken to include the singular or plural number, and the masculine, feminine, or neuter gender, as may fit the case.

12. Any change, amendment, modification, abridgment, cancellation, or discharge of this Assignment or any term or provision hereof will be invalid without the written consent of Authority.
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13. Upon payment to Authority of the full amount of the Indebtedness and other obligations secured hereby and by each Note and Deed of Trust, as evidenced by a recorded satisfaction or release of the Deed of Trust, this Assignment will be void and of no further effect.

14. All notices, demands, approvals, and other communications provided for in the Loan Documents will be in writing and be delivered by telegraph, cable, overnight air courier, personal delivery, or registered or certified U.S. mail, postage prepaid with return receipt requested to the appropriate party at its address as follows:

If to Borrower:

Harrower Village, L.P.
c/o Abode Communities
1149 S. Hill Street, Suite 700
Los Angeles, California 90015
Attn: Lara Regus
Facsimile: 213-225-2709

If to Authority:

Glendale Housing Authority
141 N. Glendale Avenue, Room 202
Glendale, California 91206
Attn: Executive Director
Facsimile: 818-548-3724

Addresses for notice may be changed from time to time by written notice to all other parties. Any communications given by telegram or cable must be confirmed within forty -eight (48) hours by overnight air courier or mail in the manner hereinbefore described. If any communication is given by mail in the manner hereinabove described, it will be effective upon the earlier of (a) three (3) days after deposit in a post office or other official depository under the c are and custody of the United States Postal Service, or (b) actual receipt, as indicated by the return receipt; if given by telegraph or cable, when delivered to the telegraph company with charges prepaid; and if given by personal delivery, or by overnight air courier, when delivered to the appropriate address set forth above.

15. This Assignment may be recorded in the Official Records of Los Angeles County, California, and Borrower will pay all fees, charges, costs, and expenses of such recording.

16. If any provision hereof is determined to be illegal or unenforceable for any reason, the remaining provisions hereof will not be affected thereby. 353 of 482

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17. This Assignment will be governed by and construed in accordance with the laws of the State of California.

18. If Authority should bring any action to enforce its rights hereunder at law or at equity, Borrower will reimburse Authority for all reasonable attorneys ’ fees and costs expended in connection therewith.

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Assignment of Rents
S-1

IN WITNESS WHEREOF, the undersigned Borrower has executed this Assignment as of the date first above written.

HARROWER VILLAGE, L.P.,
a California limited partnership

by: Harrower Village GP, LLC,
a California limited liability company,
its general partner

by: Abode Communities,
a California nonprofit public benefit corporation,
its sole and managing member

By:___________________________
Lara Regus
Senior Vice President

355 of 482

STATE OF CALIFORNIA )
)

COUNTY OF )

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 )

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)

912 and 920 East Broadway & 117 S. Belmont Street
Assignment of Rents
Exhibit A – Legal Description

EXHIBIT “A”

TO ASSIGNMENT OF RENTS AND LEASES

LEGAL DESCRIPTION

A leasehold interest created by that certain Ground Lease between the Housing Authority of the City of Glendale and HARROWER VILLAGE, L.P., a California limited partnership, dated as of _______________, 2022 in the real property described as follows:

LOTS 1, 2, 3, 4 AND 5 OF THE MAX MUIR TRACT, IN THE CITY OF GLENDALE,

COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 10 PAGE 102 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.

EXCEPT THE NORTH 20 FEET OF LOTS 1, 2 AND 3 CONDEMNED BY THE CITY GLENDALE FOR STREET PURPOSES.

APN: 5674-010-901

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ASSIGNMENT OF AGREEMENTS
FOR VALUE RECEIVED, the undersigned, HARROWER VILLAGE, L.P., a California limited partnership (“Borrower”), assigns to the HOUSING AUTHORITY OF THE CITY OF GLENDALE (“Authority”), all of its rights, title and interest in and to:

1. All architectural, design, engineering and development agreements, and any and all amendments, modifications, supplements, addenda and general conditions thereto (collectively, “Architectural Agreements”); and

2. All plans and specifications, shop drawings, working drawings, amendments, modifications, changes, supplements, general conditions and addenda thereto (collectively “Plans and Specifications”)
heretofore or hereafter into o r prepared by any architect, engineer or other person or entity (collectively “Architect”), for or on behalf of Borrower in connection with the construction of the Improvements. The Plans and Specifications, as of the date hereof, include the entitlement package prepared by KFA, LLP and those further Plans and Specifications which Borrower has heretofore, or will hereafter deliver to Authority. The Architectural Agreements include, but are not limited to, the architectural contract between Borrower and Omgivning, located at 724 S.

Spring Street, Suite 501, Los Angeles, CA 90014.

This ASSIGNMENT OF AGREEMENT S AND PLANS AND SPECIFICATION (“Assignment”) constitutes a present and absolute assignment to Authority as of the Effective Date, subordinate to the rights of Wells Fargo Bank, National Association , a national banking association (together with its successors and/or assigns, “Senior Lender”); provided, however, Authority confers upon Borrower the right to enforce the terms of the Architectural Agreements and Borrower’s rights to the Plans and Specifications so long as no Default or event which would constitute a Default after notice or the passage of time, or both, has occurred and is continuing under the Affordable Housing Agreement dated as of May 24 , 2022 , between Authority and Borrower (the “Affordable Housing Agreement ”), as well as any amendments and implementation agreements. Capitalized terms not otherwise defined herein have the meaning set forth in the Affordable Housing Agreement. Upon the occurrence of a Default or event which would constitute a Default after notice or the passage of time, or both, under the Affordable Housing Agreement, Authority may, in its sole discretion, give notice to Architect of its intent to enforce the rights of Borrower under the Architect Agreements and of its rights to the Plans and Specifications and may initiate or participate in any legal proceedings respecting the enforcement of said rights. Borrower acknowledges that by accepting this Assignment, Authority does not assume any of Borrower’s obligations under the Architectural Agreements or with respect to the Plans and Specifications.
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Borrower represents and warrants to Authority, as of the Effective Date, that: (a) all Architectural Agreements entered into by Borrower are in full force and effect and are enforceable in accordance with their terms and no default, or event which would constitute a default after notice or the passage of time, or both, exists with respect to said Architectural Agreements; (b) all copies of the Architectural Agreements and Plans and Specifications delivered to Authority are complete and correct; and (c) Borrower has not assigned any of its rights under the Architectural Agreements or with respect to the Plans and Specifications.

Borrower agrees: (a) to pay and perform all obligations of Borrower under the Architectural Agreements; (b) to enforce the payment and performance of all obligations of any other person or entity under the Architectural Agreements; (c) not to modify the existing Architectural Agreements nor to enter into any future Architectural Agreements without Authority ’s prior written approval except as otherwise may be permitted in the Affordable Housing Agreement; and (d) not to further assign (other than assignment in connectio n with a loan from the Senior Lender), for security or any other purposes, its rights under the Architectural Agreements or with respect to the Plans and Specifications with Authority’s prior written consent.

This Assignment secures performance by Borrower of all obligations of Borrower under the Affordable Housing Agreement. This Assignment is supplemented by the provisions of the Affordable Housing Agreement and said provisions are incorporated herein by reference.

This Assignment will be governed by the laws of the State of California, without reference to the principles governing conflicts of laws , and Borrower consents to the jurisdiction of any Federal or State Court within the State of California having proper venue for the filing and maintenance of any action arising hereunder and agrees that the prevailing party in any such action will be entitled, in addition to any other recovery, to reasonable attorney’s fees and costs.

This Assignment will be binding upon and inure to the benefit of the hei rs, legal representatives, assigns, and successors-in-interest of Borrower and Authority; provided, however, this will not be construed and is not intended to waive any restrictions on assignment, sale, transfer, mortgage, pledge, hypothecation or encumbrance by Borrower contained in any of the Affordable Housing Agreement.

The attached Architect’s Consent, Schedule 1, and Exhibit A are incorporated by reference.

[SIGNATURES ON FOLLOWING PAGES]
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Assignment of Agreements
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BORROWER:

HARROWER VILLAGE, L.P.,
a California limited partnership

by: Harrower Village GP, LLC,
a California limited liability company,
its general partner

by: Abode Communities,
a California nonprofit public benefit corporation,
its sole and managing member

Dated: __________, 2022 By:___________________________ Lara Regus
Senior Vice President

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Architect’s Consent

ARCHITECT’S CONSENT
The undersigned architect ( “Architect”) hereby consents to the foregoing Assignment to which this Architect’s Consent (“Consent”) is part, and acknowledges that there presently exists no unpaid claims due to the Architect except as set forth on Schedule 1 attached hereto, arising out of the preparation and delivery of the Plans and Specifications to Borrower and/or the performance of the Architect’s obligations under the Assignment.

Architect agrees that if, at any time, Authority will become the owner of said Property, or, pursuant to its rights under the Affordable Housing Agreement, elects to undertake or cause the completion of construction of the Improvements on any portion of the Property, in accordance with the Plans and Specifications, and gives Architect written notice of such election; THEN, so long as Architect has received, receives or continues to receive the compensation called for under the Agreements, Authority may, at its option, use and rely on the Plans and Specifications for the purposes for which they were prepared, and Architect will continue to perform its obligations under the Agreements for the benefit and account of Authority in the same manner as if performed for the benefit or account of Borrower in the absence of the Assignment.

Architect further agrees that, in the event of a breach by Borrower of the Agreements, or any agreement entered into with Architect in connection with the Plans and Specifications, so long as Borrower’s interest in the Agreements and Plans and Specifications is assigned to Authority, Architect will give written notice to Authority of such breach at the address shown below.

Authority will have thirty (30) days from the receipt of such written notice of default to remedy or cure said default. Nothing herein will require Authority to cure said default or to undertake completion of construction of the Improvements.

[Architect’s Signature on Following Page]

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912 and 920 East Broadway & 117 S. Belmont Street
Assignment of Agreements
Architect’s Consent

Architect warrants and represents that it/he /she has no knowledge of any prior assignment(s) of any interest in the Plans and Specifications and/or the Agreements. Except as otherwise defined herein, the terms used herein will have the meanings given them in the Assignment.

Executed as of___________, 2022.

OMGIVNING

By: __________________________
Name: _________________
Title: __________________

724 S. SPRING STREET, SUITE 501
LOS ANGELES, CA 90014
Authority’s Address:

HOUSING AUTHORITY OF THE

CITY OF GLENDALE
141 North Glendale Avenue, Suite 202
Glendale, California 91206
Attn: Executive Director
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912 and 920 East Broadway & 117 S. Belmont Street
Assignment of Agreements
Schedule of Unpaid Claims

SCHEDULE OF UNPAID CLAIMS

Schedule 1 to Assignment of Architectural Agreements and Plans and Specifications dated as of____________, 2022 between HARROWER VILLAGE, L. P. as Borrower, and HOUSING AUTHORITY OF THE CITY OF GLENDALE, as Authority.

List Claims: None
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912 and 920 East Broadway & 117 S. Belmont Street
Assignment of Agreements
Exhibit A
Legal Description

EXHIBIT A

PROPERTY DESCRIPTION

A leasehold interest created by that certain Ground Lease between the Housing Authority of the City of Glendale and HARROWER VILLAGE, L.P., a California limited partnership, dated as of _______________, 2022 in the real property described as follows:

LOTS 1, 2, 3, 4 AND 5 OF THE MAX MUIR TRACT, IN THE CITY OF GLENDALE,

COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 10 PAGE 102 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.

EXCEPT THE NORTH 20 FEET OF LOTS 1, 2 AND 3 CONDEMNED BY THE CITY GLENDALE FOR STREET PURPOSES.

APN: 5674-010-901

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ENVIRONMENTAL INDEMNITY

THIS ENVIRONMENTAL INDEMNITY (“ Indemnity”), dated as of _________________, 2022, made by HARROWER VILLAGE, L. P., a California limited partnership (“Borrower”), in favor of the HOUSING AUTHORITY OF THE CITY OF GLENDALE, a public body corporate and politic (“Authority”).

WITNESSETH
WHEREAS, Borrower is the owner of a leasehold interest in the real property in the City of Glendale, as more particularly described on Exhibit A attached hereto and made a part hereof, and the real property improvements thereon (collectively referred to as the “Property”); WHEREAS, Borrower and the Authority, entered into that certain Affordable Housing Agreement, dated as of May 24, 2022 (“Affordable Housing Agreement”), pursuant to which the Authority agreed to make three loans to Borrower in the original principal amounts of FIVE HUNDRED FORTY-THREE THOUSAND DOLLARS ($543,000) (“LMIHAF Loan”), EIGHT MILLION THREE HUNDRED FIFTY-SEVEN THOUSAND DOLLARS ($ 8,357,000) (“Measure S Loan ”), and ONE MILLION EIGHT HU NDRED THOUSAND DOLLA RS ($1,800,000) (“HOME Loan”), and, together with the LMI HAF Loan and the Measure S Loan , collectively referred to herein as the “ Authority Loans”, to provide part of the financing for the acquisition, development, r ehabilitation, and operation of a 40 -unit housing project thereon (the Affordable Housing Agreement and the documents and instruments referred to therein which are being executed by Borrower concurrently herewith are referred to collectively as the “ Loan Documents”);
WHEREAS, Borrower has agreed to execute and deliver to the Authority this Indemnity to induce the Authority to make the Authority Loans.

NOW, THEREFORE, in consideration of the foregoing and in consideration of the mutual agreements hereinafter set forth, Borrower hereby agrees with the Authority as follows:

Section 1. DEFINITIONS
For the purpose of this Indemnity, “Hazardous Materials” or “Hazardous Substances” will include, but not be limited to, substances defined as “extremely hazardous substances,” “hazardous substances,” “hazardous materials,” “hazardous waste” or “toxic substances” in the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. Sections 11001-11050; the Hazardous Materials Transportation Act, 49 U.S.C. Sections 1801, et seq.; the Resource Conservation and Recovery Act, 42 U.S.C. Sections 6901, et seq.; and those substances defined as “hazardous waste” in Section 25117 of the California Health and Safety Code, as “infectious waste ” in Section 25117.5 of the California Health and Safety Code, or as “hazardous substances” in Section 25316 of the California Health and Safety Code or 366 of 482

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“hazardous materials” as defined in Section 353 of the California Vehicle Code; and in the regulations adopted and publications promulgated pursuant to said laws. Other capitalized terms used in this Indemnity will have the meanings ascribed to them in the Affordable Housing Agreement with the same force and effect as if set forth in full below.

Section 2. COVENANTS AND INDEMNITY
The following covenants and indemnities are hereby given and made by Borrower:

2.1 Covenants.
(a) Borrower covenants that it will comply with any and all laws, regulations, and/or orders which may be promulgated, from time t o time, with respect to the discharge and/or removal of Hazardous Materials, to pay immediately when due the costs of the removal of, or any other action required by law with respect to, any such Hazardous Materials, and to keep the Property free of any lien imposed pursuant to any such laws, regulations, or orders. (b) Borrower covenants that the Property will not, while Borrower is the owner thereof, be used for any activities involving, directly or indirectly, the use, generation, treatment, storage, release, or disposal of any Hazardous Materials, except for de minimis quantities used at the Property in compliance with all applicable environmental laws and required in connection with the routine construction, operation and maintenance of the Property. (c) Borrower further agrees that Borrower will not release or dispose of any Hazardous Materials at the Property without the express written approval of the Authority and that any such release or disposal will be effected in strict compliance with a ll applicable laws and all conditions, if any, established by the Authority.
(d) The Authority will have the right, at any time, to conduct an environmental audit of the Property at the Authority’s expense, unless Hazardous Materials are found, then at Borrower’s sole cost and expense, and Borrower will cause Borrower to cooperate in the conduct of any such environmental audit but in no event will such audit be conducted unless the Authority believes that such audit is warranted. Other than in an emergency, such audit will be conducted only after reasonable prior notice has been given to Borrower and onl y in the presence of a representative of Borrower. Borrower will give the Authority and its agents and employees access to the Property at all reasonable times to remove, or otherwise to mitigate against the effects of, Hazardous Materials.
(e) Borrowe r will not install, or permit to be installed, on the Property friable asbestos or any substance containing asbestos and deemed hazardous by federal or state regulations respecting such material, and, with respect to any such material currently present in the Property, Borrower will promptly either (i) remove or cause to be removed any material that such regulations deem hazardous and require to be removed, or (ii) otherwise comply with such federal and state 367 of 482

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regulations, at Borrower’s sole cost and expense . If Borrower will fail to so do within the cure period permitted under applicable law, regulation, or order, the Authority may do whatever is necessary to eliminate said substances from the premises or to otherwise comply with the applicable law, regulation, or order, and the costs thereof will be added to the Obligations (as hereinafter defined) of Borrower under this Section 2.
(f) Borrower will immediately advise the Authority in writing of any of the following: (i) any pending or threatened environmental claim against Borrower or the Property, (ii) any condition or occurrence on the Property that (A) results in noncompliance by Borrower with any applicable environmental law, (B) could reasonably be anticipated to cause the Property to be subject to any restrictions on the ownership, occupancy, use or transferability of the Property under any environmental law, or (C) could reasonably be anticipated to form the basis of an environmental claim against the Property or Borrower.

2.2 Indemnity. Borrower will indemnify, protect, and hold the Authority harmless from and against any and all damages, losses, liabilities, obligations, penalties, claims, litigation, demands, defenses, judgments, suits, proceedings, costs, disbursements, or expenses (including, without limitation, reasonable attorneys’ and exp erts’ fees and disbursements) of any kind or of any nature whatsoever (collectively, the Obligations) which may at any time be imposed upon, incurred by or asserted or awarded against the Authority and arising from or out of:
(a) The presence of any Hazard ous Materials on, in, under, or affecting all or any portion of the Property or any surrounding areas;
(b) The breach of any covenant made by Borrower in Section 2.1 hereof; or (c) The enforcement by the Authority of any of the provisions of this Section

2.2 or the assertion by Borrower of any defense to its obligations hereunder.

Subject to the qualifications set forth in Section 2.3, below, Borrower will be liable for payment and performance of the Obligations to the full extent (but only to the extent) o f the property and assets (including the Property) which constitute security for such Obligations. If default occurs in the timely and proper payment and performance of any such Obligations (after notice and reasonable opportunity to cure) , any judicial p roceedings brought by the Authority against Borrower will be limited to the protection and preservation of the Property, the preservation, enforcement and foreclosure of the liens, mortgages, assignments, rights and security interests securing such Obligations and enforcement and collection of such Obligations for which Borrower remains directly liable as provided in this Section. If there is a foreclosure of any such liens, mortgages, assignments, rights and security interests by power of sale or otherwis e, no personal judgment for any deficiency thereon will be sought or obtained by the Authority against Borrower, or its officers, directors, agents, attorneys, servants or employees. In no event shall Borrower be liable for any Obligations resulting exclu sively from the gross negligence and/or willful misconduct of the Authority. Notwithstanding the foregoing, Developer shall have no obligation 368 of 482

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to indemnify the Authority and its officers, agents, employees, contractors and attorneys for loss, liability, cl aims, and damages, and expenses arising from Developer’s mere discovery of Hazardous Substances already present on the Site prior to the commencement of this Agreement, so long as Developer has not contributed to the placement, releases, or migration of su ch pre - existing Hazardous Substances.

2.3 Exceptions to Non-Recourse Liability. Notwithstanding the foregoing provisions of Section 2.2 or any other agreements,
(a) the Authority may proceed against any other person or entity whatsoever with respect to the enforcement of any guarantees, surety bonds, letters of credit, reimbursement agreements or similar rights to payment or performance; and (b) The Authority may recover personally from any person or entity other than Borrower’s Managing General Partner and Limited Partners:
(1) any damages, costs and expenses incurred by the Authority as a result of the negligence of such person or entity, involving, directly or indirectly, the use, generation, treatment, storage, release, or disposal of any Hazardous Materials by such person or entity or by others; provided, however, that neither Borrower nor any officer, partner, agent, attorney, servant or employee of Borrower will have any personal liability if the act or omission complained of was performed in good faith and was not reckless, wanton, intentional or grossly negligent; (2) any damages, costs and expenses incurred by Authority as a result of fraud or any criminal act or acts of Borrower or any partner, shareholder, officer, director or employee of Borrower, or of any general or limited partner of Borrower; and (3) all court costs and attorneys’ fees reasonably incurred in enforcing or collecting upon any of the foregoing exceptions (provided that Authority will pay Borrower’s reasonable cou rt costs and attorneys’ fees if Borrower is the prevailing party in any such enforcement or collection action).

Section 3. BORROWER’S UNCONDITIONAL OBLIGATIONS

3.1 Unconditional Obligations . Borrower hereby agrees that the Obligations will be paid and performed strictly in accordance with the terms of this Indemnity, regardless of any law, regulation, or order now or hereafter in effect in any jurisdiction affecting any of the Loan Documents or affecting any of the rights of the Authority with respect thereto. The obligations of Borrower hereunder will be absolute and unconditional irrespective of:
(a) The validity, regularity, or enforceability of the Loan Documents or any other instrument or document executed or delivered in connection therewith; 369 of 482

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(b) Any alteration, amendment, modification, release, termination, or cancellation of any of the Loan Documents, or any change in the time, manner, or place of payment of, or in any other term in respect of, all or any of the obligations of Borrower contained in any of the Loan Documents;
(c) Any extension of the maturity of the Authority Loans or any waiver of, or consent to any departure from, any provision contained in any of the Loan Documents;
(d) Any exculpatory provision in any of the Loan Documents limiting the Authority’s recourse to property encumbered by the Deed of Trust securing the Authority Loans, or to any other security, or limiting the Authority’s rights to a deficiency judgment against Borrower;
(e) Any exchange, addition, subordination, or release of, or nonperfection of any lien on or security interest in, any collateral for the Authority Loans, or any release, amendment, waiver of, or consent to any departure from any provision of, any other Borrower or guarantee given in respect of the Authority Loans; (f) The insolvency or bankruptcy of Borrower, Borrower, or of any indemnitor or guarantor under any other indemnity or guarantee given in respect of the Authority Loans; or
(g) Any other circumstance that might otherwise constitute a defense available to, or a discharge of, Borrower, Borrower, or any other indemnitor or guarantor with respect to the Authority Loans or any or all of the Obligations.

3.2 Continuation. This Indemnity (a) is a continuing indemnity and will remain in full force and effect until the satisfaction in full of all of the Obligations (notwithstanding the payment in full of the Authority Loans or the release or other extinguishment of any security for the Authority Loans); and (b) will continue to be effective or will be reinstated, as the case may be, if at any time any payment of any of the Obligations is rescinded or must otherwise be returned by the Authority upon the insolvency, bankruptcy, or reorganization of Borrower, Borrower o r otherwise, all as though such payment had not been made.

3.3 Termination. Notwithstanding the payment (and performance) in full of all of the Obligations and the payment (or performance) in full of all of Borrower’s obligations under the Loan Documents, this Indemnity will not terminate if any of the following will have occurred:
(a) The Authority has at any time or in any manner participated in the management or control of, taken possession of (whether personally, by agent or by appointment of a receiver), or taken title to the Property or any portion thereof, 370 of 482

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whether by forec losure, deed in lieu of foreclosure, sale under power of sale or otherwise; or
(b) There has been a change, between the date hereof and the date on which all of the Obligations are paid and performed in full, in any Hazardous Materials laws, the effect of which may be to make a lender or mortgagee liable in respect of any of the Obligations, notwithstanding the fact that no event, circumstance, or condition of the nature described in paragraph (a) above ever occurred.

Section 4. WAIVER
Borrower hereby waives the following:
(a) Promptness and diligence;
(b) Notice of acceptance and notice of the incurrence of any obligation by Borrower;
(c) Notice of any action taken by the Authority, Borrower, or any other interested party under any Loan Document or u nder any other agreement or instrument relating thereto;
(d) All other notices, demands, and protests, and all other formalities of every kind, in connection with the enforcement of the Obligations, the omission of or delay in which, but for the provisio ns of this Section 4, might constitute grounds for relieving Borrower of its Obligations hereunder;
(e) The right to a trial by jury with respect to any dispute arising under, or relating to, this Indemnity;
(f) Any requirement that the Authority prote ct, secure, perfect, or insure any security interest or lien in or on any property subject thereto; (g) Any requirement that the Authority exhaust any right or take any action against Borrower or any other person or collateral; and (h) Any defense that may arise by reason of:
(1) The incapacity, lack of authority, death or disability of, or revocation hereof by, any person or persons;
(2) The failure of the Authority to file or enforce any claim against the estate (in probate, bankruptcy, or any other proceedings) of any person or persons; or 371 of 482

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(3) Any defense based upon an election of remedies by the Authority, including, without limitation, an election to proceed by nonjudicial foreclosure or which destroys or otherwise impairs the subrogation rights of the Authority or any other right of the Authority to proceed against Borrower.

Section 5. NOTICES
Any notice, demand, statement, request, or consent made hereunder will be in writing and will be personally served, mailed by first -class registered mail, return receipt requested, to the address set forth in the first paragraph of this Indemnity, above, or given by telecopier to the telecopier numbers stated below, with confirmations mailed by first class registered mail, return receipt requested to the address set forth above, of the party to whom such notice is to be given (or to such other address as the parties hereto, will designate in writing):

In the case of the Authority:

The Housing Authority of the City of Glendale
141 N. Glendale Avenue, Room 202
Glendale, California 91206
Attn: Executive Director
Facsimile: 818-548-3724

In the case of Borrower:

Harrower Village, L.P.
c/o Abode Communities
1149 S. Hill Street, Suite 700
Los Angeles, California 90015
Attn: Lara Regus
Facsimile: 213-225-2709

With a copy to Investor Limited Partner at:

Enterprise Housing Credit Investments, LLC
70 Corporate Center
11000 Broken Land Parkway, Suite 700
Columbia, MD 21044
Attn: Reagan Maechling

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Any notice that is transmitted by electronic facsimile transmission followed by delivery of a “hard” copy, will be deemed delivered upon its transmission; any notice that is personally delivered (including by means of professional messenger service, courie r service such as United Parcel Service or Federal Express, or by U.S. Postal Service), will be deemed received on the documented date of receipt; and any notice that is sent by registered or certified mail, postage prepaid, return receipt required will be deemed received on the date of receipt thereof.

Section 6. MISCELLANEOUS

6.1 Borrower will make any payment required to be made hereunder in lawful money of the United States of America, and in same day funds, to the Authority at its address specified in the first paragraph hereof.

6.2 No amendment of any provision of this Indemnity will be effective unless it is in writing and signed by Borrower and the Authority, and no waiver of any provision of this Indemnity, and no consent to any departure by Borro wer from any provision of this Indemnity, will be effective unless it is in writing and signed by the Authority, and then such waiver or consent will be effective only in the specific instance and for the specific purpose for which given.

6.3 No failure on the part of the Authority to exercise, and no delay in exercising, any right hereunder or under any other Loan Document will operate as a waiver thereof, nor will any single or partial exercise of any right preclude any other or further exercise thereof or the exercise of any other right. The rights and remedies of the Authority provided herein and in the other Loan Documents are cumulative and are in addition to, and not exclusive of, any rights or remedies provided by law. The rights of the Authority under any Loan Document against any party thereto are not conditional or contingent on any attempt by the Authority to exercise any of its rights under any other Loan Document against such party or against any other person or collateral.

6.4 Any provision o f this Indemnity that is prohibited or unenforceable in any jurisdiction will, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining portions hereof and without affecting the validity or enforceability of such provision in any other jurisdiction.

6.5 This Indemnity will (a) be binding upon Borrower, and Borrower’s successors and assigns; and (b) inure, together with all rights and remedies of the Authority hereunder, to the benefit of the Authority, its respective directors, officers, employees, and agents, any successors to the Authority’s interest in the Property, any other person who acquires any portion of the Property at a foreclosure sale or otherwise through the exercise of th e Authority’s rights and remedies under the Loan Documents, any successors to any such person, and all directors, officers, employees, and agents of all of the aforementioned parties. Without limiting the generality of clause (b) of the immediately preceding sentence, the Authority may, subject to, and in accordance with, the provisions of the Loan Documents, assign or otherwise transfer all or any portion of its rights and obligations under any other Loan Document, to any other person, and such other person 373 of 482

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will thereupon become vested with all of the rights and obligations in respect thereof that were granted to the Authority herein or otherwise. None of the rights or obligations of Borrower hereunder may be assigned or otherwise transferred without the prior wr itten consent of the Authority.

6.6 Borrower hereby (a) irrevocably submits to the jurisdiction of any California or federal court sitting, in each instance, in Los Angeles County in any action or proceeding arising out of or relating to this Indemnity, (b) waives any defense based on doctrines of venue or forum non convenient or similar rules or doctrines, and (c) irrevocably agrees that all claims in respect of any such action or proceeding may be heard and determined in such California or federal court.

Borrower irrevocably consents to the service of any and all process which may be required or permitted in any such action or proceeding to the address specified in the first paragraph of this Indemnity, above. Borrower agrees that a final judgment in any such action or proceeding will be conclusive and may be enforced in any other jurisdiction by suit on the judgment or in any other manner provided by law.

6.7 The title of this document and the captions used herein are inserted only as a matter of convenience and for reference and will in no way define, limit, or describe the scope or the intent of this Indemnity or any of the provisions hereof.

6.8 This Indemnity will be governed by, and construed and interpreted in accordance with, the laws of the State of California applicable to contracts made and to be performed therein, except to the extent that the laws of the United States preempt the laws of the State of California.

6.9 This Indemnity may be executed in any number of counterparts, each of which will constitute an original and all of which together will constitute one agreement.

[Remainder of Page Intentionally Left Blank; Signatures on Following Page]

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912 and 920 East Broadway & 117 S. Belmont Street
Environmental Indemnity
S-1

IN WITNESS WHEREOF, Borrower has duly executed this Indemnity as of the date first set forth above.

HARROWER VILLAGE, L.P.,
a California limited partnership

By: Harrower Village GP, LLC,
a California limited liability company,
its general partner

By: Abode Communities,
a California nonprofit public benefit corporation,
its sole and managing member

Dated: __________, 2022 By:___________________________ Lara Regus
Senior Vice President

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912 and 920 East Broadway & 117 S. Belmont Street
Environmental Indemnity
Exhibit A – Legal Description

Exhibit A
to Environmental Indemnity

LEGAL DESCRIPTION

Real Property in the City of Glendale, County of Los Angeles, State of California, described as follows:

A leasehold interest created by that certain Ground Lease between the Housing Authority of the City of Glendale and HARROWER VILLAGE, L.P., a California limited partnership, dated as of _______________, 2022 in the real property described as follows:

LOTS 1 , 2, 3, 4 AND 5 OF THE MAX MUIR TRACT, IN THE CITY OF GLENDALE,

COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 10 PAGE 102 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.

EXCEPT THE NORTH 20 FEET OF LOTS 1, 2 AND 3 C ONDEMNED BY THE CITY GLENDALE FOR STREET PURPOSES.

APN: 5674-010-901
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DISBURSEMENT AGREEMENT
(912 and 920 East Broadway & 117 S. Belmont Street)

THIS DISBURSEMENT AG REEMENT is entered into by and among the HOUSING AUTHORITY OF THE CITY OF GLENDALE (“Authority”), HARROWER VILLAGE, L.P., a California limited partnership (“Borrower”), and WELLS FARGO, N ATIONAL ASSOCIATION, (“Construction Lender”), as of _______________, 2022.

R E C I T A L S

A. Authority and Borrower have heretofore entered into that certain Affordable Housing Agreement dated as of May 24, 2022 (“Affordable Housing Agreement”), relating to the real property described in Attachment No. 2 to the Affordable Housing Agreement (the “Property”). Terms not defined herein will have the meaning given to them in the A ffordable Housing Agreement.

B. In accordance with the Affordable Housing Agreement, Borrower intends to rehabilitate and construct a multifamily rental development consisting of 40 total dwelling units (the “Units”) and ancillary facilities , as described in the Scope of Development attached to the Affordable Housing Agreement as Attachment No. 4 (the “Project”). Thirty-nine (39) of the Units will be rented to and occupied by Extremely Low Income, Very Low Income, and Low Income Senior Citizen Households. The costs of acquiring the Property and developing the Project ( the “Costs”) are set forth in the Project Budget approved by the Authority and Construction Lender as the final project budget, which is attached to this Agreement as Exhibit “A” and incorporated herein by this reference (the “Project Budget”). The Project Budget will be subject to amendment from time to time, subject to prior written approval by the Construction Lender and the Authority Executive Director or designee, to the extent applicable, upon which approval the Project Budget will be replaced by the approved revised Project Budget.

C. Pursuant to the Affordable Housing Agreement, the Authority has agreed to make three loans to Borrower in the original principal amounts of $543,000 (“LMIHAF Loan ”), $8,357,000 (“Measure S Loan”), and $1,800,000 (“HOME LOAN”), (collectively referred to as the “Authority Loans” and the “Authority Funds”) to be used to finance a portion of the Costs.

The Affordable Housing Agreement, the promissory notes evidencing the Authority Loans, the deed of trust securing the Authority Loans, an Agreement Containing Covenants, and an Agreement Containing HOME Program Requirements, each dated on or around the date hereof, and other instruments referred to in the Affordable Housing Agreement, are sometimes referred to collectively as the “Authority Loan Documents.”
D. Construction Lender and Borrower have entered into that certain Construction Loan Agreement dated on or around the date hereof (“ Construction Loan Agreement”), pursuant to which Construction Lender has agreed to lend Borrower funds in the amount of approximately $15,791,380 (variously referred to as the “Construction Loan” and the “Construction Lender Funds”) to finance a portion of the Costs. The Construction Loan Agreement, the promissory note 377 of 482

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evidencing the Construction Loan, the deed of trust securing the Construction Loan and other instruments referred to in the Construction Loan Agreement are sometimes referred to collectively as the “Construction Loan Documents.”
E. In addition, Borrower has agreed to provide at least $1,987,754 in Borrower’s funds during the construction period , as set forth in subsection 1.a. below, (“Borrower’s Funds”), to pay that portion of the Costs in excess of the sum of the Authority Funds and the Construction Lender Funds.

F. The Authority Funds , Construction Lender Funds, and Borrower ’s Funds are referred to collectively as the “Project Funds.” The Authority and Construction Lender are referred to collectively as the “Lenders” or individually as a “Lender”.

G. The Lenders and Borrower desire to enter into this Disbursement Agreement solely to provide for the disbursement of the Project F unds for approved Costs and to provide for cooperation among the Lenders.

NOW, THEREFORE, the parties agree as follows:

1. Deposit and Use of Funds.
a. Borrower’s Account. The Borrower’s Funds consist of the following:
(1) Borrower will be responsible, during the construction period, to provide funds if and as needed to pay for cost overruns and contingencies not otherwise funded by other sources of construction financing, in accordance with the requirements and procedures of the Construction Loan Documents; (2) In addition, Borrower will defer $1,128,232 of the Developer Fee set forth in the Project Budget, $214,354 of which will be paid at cons truction completion,$707,367 of which will be paid at Conversion, $150,048 to be paid upon receipt of 8609s, and any balance to be paid from the Revenue of the Project remaining after payment of operating expenses and debt service but prior to any payment of Residual Receipts to the Authority. (3) In addition, Borrower’s Investor Limited Partner will disburse advances and capital contributions prior to conversion in the approximate amo unt of $915,986.
(4) In addition, Borrower will defer to Conversion the payment of other Costs, consisting of the capitalization of the Operating Reserve and payment of permanent financing costs, in the approximate amount of $1,297,964. b. Except to the exten t Borr ower’s Funds have been spent on Costs prior to the Construction Financing Event, or as otherwise agreed to between the Authority and 378 of 482

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Construction Lender , Borrower will deposit Borrowe r’s Funds (except for the deferred Developer Fee and Costs deferred until Conversion), into a fully segregated disbursement account held by the Construction Lender (the “Borrower’s Account”), at such times as the amounts are payable by the Investor Limited Partner pursuant to the Partnership Agreement.

2. Loan Balancing.
a. If either of the Lenders reasonably determines, from time -to-time, that the combined amounts of the Authority Funds , Construction Lender Funds, and Borrower’s Funds, as set forth in the attached Project Budget, are insufficient to pay all Costs at Completion, plus payment of increased costs due to change orders, cost overruns or otherwise , which have not been funded by Borrower , then, upon fifteen (15) days’ advance notice from such Lender (“Balancing Call”), Borrower will deposit into the Borrower’s Account held by the Construction Lender such additional Borrower’s Funds as may be necessary to pay all such obligations. b. If Borrower fails to deposit such additional Borrower’s Funds into the Borrower’s Account, the Lenders, subject to the terms of applicable subordination agreements, will each have the right (but not the obligation) to exercise all rights and remedies, including, without limitation, to declare a default, to commence judicial and non - judicial foreclosure actions, to seek the appointment of a receiver or to advance additional money to pay such additional costs as such Lender may deem necessary to protect its collateral and complete construction of the Project. Additional amounts advanced by a Lender to pay such c osts will (to the extent such c osts constitute Approved Costs, as her einafter defined) be added to the stated loan amount of the applicable Loan.
c. To the extent funds from Borrower ’s Account or any other Borrower Funds are used to pay such obligations, such funds will be disbursed in accordance with the terms of the Construction Loan Documents, before any further disbursement of the Authority Funds and the Construction Lender Funds.
d. As used in this Disbursement Agreement, the term “Approved Costs” will mean all hard and soft cost line items (and modifications thereto), which were approved or deemed approved by the Authority and Construction Lender pursuant to this Disbursement Agreement and which are needed for the completion of the Project.

3. Amendments to Project Budget.
a. Subject to the terms and provisions of this Disbursement Agreement, the Authority Loan Documents, and the Construction Loan Documents, certain change orders or Project Budget amendments (collectively referred to as a “Revision”) will require the approval of the Authority and the Construction Lender. The Authority will be deemed to have approved a requested Revision for which Construction Lender’s 379 of 482

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approval is not required under the terms of the Construction Loan Agreement, or which has been approved by the Construction Lender, if, within five (5) business days after receipt of the request for Revision, the Authority receives such explanation and/or back -up information as was received and relied upon by the Construction Lender in connection with its approval of the Revision, and if the following conditions are satisfied:
(1) To the extent the Revision is limited to a reallocation of budgeted funds among Project Budget line items without any increase in the total Project Budget, (a) the amount of the Revision does not exceed $100,000, (b) the funds in the line item(s) to be reduced remain sufficient for completion of the Project, and (c) the requested increase in one or more line item(s) is to be used to pay Approved Costs.
(2) To the extent the Revision involves an incre ase in the total Costs, (a) additional funds in an amount equal to the increase in the total Costs will be provided by Borrower or a Lender pursuant to the Loan Balancing procedure described in Section 2, above, and (b) the requested increase in the total Costs is to be used to pay Approved Costs.
(3) The Revision will not shorten the useful life of the Project or any element of the Project or impair the functionality of any system or component of the Project.
(4) The Revision will not reduce the quality or functionality of the fixtures, finishes, furnishings, window materials, doors, hardware or appliances in the residential units or the common use facilities.
(5) The Revision will not change the interior layout of any of the residential units.

4. Lender Funds.
a. Authority Funds . The Authority Funds will be held by the Authority as the Authority will determine, to be disbursed as provided in this Disbursement Agreement. The Authority Funds are not pledged to the Construction Lender or any other lender, nor will they constitute security for the Construction Loan or any other loan.
b. Construction Lender Funds. The Construction Lender Funds will be deposited and held by the Construction Lender as the Construction Lender will determine, to be disbursed as provided in the Construction Loan Agreement. The Construction Lender Funds are not pledged to the Authority or any other lender , nor will they constitute security for the Authority Loans or any other loan. 380 of 482

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5. Use of Funds to Pay Costs.
a. Intentionally Omitted.
b. Approved Costs . The Authority Funds , Construction Lender Funds, and the Borrower’s Funds will be used exclusively for the payment of, or reimbursement for, the Costs shown in the Project Budget, as the same may be amended from time to time with the written approval of the Construction Lender and the written approval or deemed approval of the Autho rity (subject to paragra ph c. of this Section 5). Payment of, or reimbursement for, Approved Costs will be made only after they have been incurred by the Borrower.
c. Budget Amendments: Construction Lender ’s Right to Disburse Funds without Authority Approval . Notwithstanding any provision of thi s Disbursement Agreement requiring approval by the Authority of amendments to the Project Budget, the Construction Lender will have the right, without Authority approval, to disburse Borrower’s Funds and Construction Lender Funds (as applicable) to pay interest on the Construction Loan and costs of the Project, whether or not Authority has approved such amendment. The parties acknowledge and agree that the Project Budget attached to this Disbursement Agreement is approved as of the date hereof.

6. Application for Payments.
a. Applications for Payment . Disbursements of Project Funds will be made upon submission of a written itemized statement or draw request in a form that is mutually acceptable to the Lenders (the “Application for Payment ”), subject to the conditions set forth below. Each Application for Payment will include a representation by Borrower that it has obtained the approval of the Investor Limited Partner, to the extent such approval is required by the Partnership Agreement. The term “disbursement” will include, without limitation, disbursement of the Authority Funds, Borrower’s Funds that have been delivered to Construction Lender as “Borrower’s Funds, ” Borrower’s prior expenditures of Borrower ’s Funds and Construction Lender Funds. Applications for Payment may be submitted not more frequently than once monthly. Each Lender will determine whether or not the conditions precedent to its obligation to advance its funds have been satisfie d or whether or not to waive a condition precedent to such obligation to advance its loan. b. Order of Disbursement. Each Lender and the Borrower will disburse its respective Project Funds as follows:
(1) First, the Authority will be deemed to have disbursed $7,200,000 of the Measure S Loan at the Construction Financing Event to pay the fully capitalized value of Borrower’s ground rent under the Lease. 381 of 482

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(2) Second, approximately $1,773,400 of the Borrower’s Funds will be disbursed to pay Approved Costs.
(3) Third, the Authority will disburse the following:
(i) $1,041,300 (consisting of the $1,157,000 balance of the Measure S Loan after the disbursement described in paragraph (1), less the hold-back of ten percent (10%) described in paragraph (4) below), (ii) $488,700 (consisting of the $543,000 LMIHAF Loan less the hold- back of ten percent (10%) described in paragraph (4) below), and (iii) $1,620,000 (consisting of the $1,800,000 HOME Loan less the hold- back of ten percent (10%) described in paragraph (7) below).

The Measure S Loan disbursements, the LMIHAF Loan disbursements, and the HOME Loan disbursements will each be made pari passu and pro rata with Construction Lender’s disbursement of the Construction Loan, or on such other basis requested by Borrower as the Authority Executive Director reasonably determines protects the Authorit y’s investment of funds in the Project and ensures the completion of construction of the Improvements. (4) The Authority will hold back ten percent (10%) of disbursements of the $1,157,000 portion of the remaining Measure S Loan referenced in paragraph (3), which will be disbursed to Borrower to pay Approved Costs as set forth in Section 8 below.
(5) The Authority will hold back ten percent (10%) of disbursements of the $543,000 LMIHAF Loan, which will be disbursed to Borrower to pa y Approved Costs as set forth in Section 8 below.
(6) The Authority will hold back ten percent (10%) of disbursements of the $1,800,000 HOME Loan, which will be disbursed to Borrower to pay Approved Costs as set forth in Section 8 below.
(7) Disbursement of the Construction Loan will be subject to such retention as may be provided for in the Construction Loan Agreement. The Construction Loan retention will be disbursed when and as required by the Construction Loan Agreement. The Construction Lender will disburse to itself , from principal of the Construction Loan, on a monthly basis, an amount equal to interest accrued on the outstanding p rincipal of the Construction Loan during the previous month, and each amount so disbursed will reduce the undisbursed balance of the Construction Loan for purposes of calculation of the proportionate disbursement with the Measure S Loan, the LMIHAF Loan, and the HOME Loan.
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c. Contents of Application for Payment . Subject to any additional requirements of the Construction Lender (which will not, in any event, apply to the disbursement of Authority Funds), each Application for Payment will set forth: (1) a description of the work performed, material supplied and/or Costs incurred or due for which disbursement is requested with respect to any Costs shown as a line item ( “Item”) in the Project Budget; (2) the total amount incurred, expended and/or due for each requested Item, less prior disbursements; and (3) the percentage of co mpletion of the portion of the work to be paid from the Item. The Authority hereby consents to the use of the form of Application for Payment attached to the Construc tion Loan Agreement for draw requests.
d. Delivery of Applications for Payment . Borrower will deliver copies of each Application for Payment concurrently to each of the Lenders. Each Application for Payment will be subject to the approval of the Lenders, wi th respect to their respective loans, in accordance with this Disbursement Agreement , and, if prevailing wage requirements are applicable, will be subject to review and approval by the Authority’s prevailing wage consultant, if needed to determine complian ce with applicable state and federal prevailing wage requirements. e. Documentation. Each Application for Payment will be accompanied by the following: (i) change order(s) to the general contract , if any, (ii) copies of paid invoices and (except for the firs t Application for Payment) unconditional lien releases for construction costs paid with the proceeds of the prior Application for Payment, and (iii) conditional (upon receipt of payment) lien releases for construction costs to be paid with the proceeds of the instant Application for Payment, which invoices and lien releases will be considered a part of each Application for Payment. Where Borrower is requesting Project Funds for Costs other than general contract payments, Borrower will attach to the Application for Payment copies of invoices or such other appropriate documentation to evidence, document, justify and support the request, which will be an amount within the amount of the applicable line item in the Project Budget. Lenders may require Borrower to separate lien waivers and hard cost invoices from the other materials provided with Applications for Payment. Each Application for Payment submitted to the Authority will be accompanied by documentation satisfactory to the Authority to demonstrate Borrower’s compliance with applicable prevailing wage requirements.
f. Submittal of Inspection Report to Authority. Immediately after each disbursement pursuant to an Application for Payment, the Construction Lender will transmit to the Authority a copy of its inspection report or other documentation indicating the determination by Construction Lender ’s inspector of the percentage of work completed, pertaining to such Application for Payment. No representation or warranty of Construction Lender is made or will be implied with respect to any matter shown in such inspection report or other documentation. 383 of 482

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7. Approval of Applications for Payment
a. General. Approval of each Application for Payment will be subject to satisfaction of the requirements of this Agreement and the Lenders’ respective Loan Documents.
b. Procedure. Except as otherwise provided in the Construction Loan Agreement with respect to the Construction Loan, e ach Lender will, within fiftee n (15) business days after receipt of an Application for Payment containing all of the items described in Section 6, above, determine the amount of the Application for Payment that is approved, notify Borrower, appropriate members of the construction team and the other Lenders of such amount, and, if and as requi red by paragraph b of Section 6 above, disburse the approved amount. With respect to disbursements of Authority Funds, The Authority will promptly disburse the approved amounts, by check, in either of the following ways (as the Authority may determine in its sole discretion): (i) to Borrower , and Borrower will promptly disburse such funds as provided in the Application for Payment, (ii) to subcontractors and/or suppliers entitled to such payment as provided in the Application for Payment, or (iii) jointly to Borrower and such subcontractors and/or suppliers.
c. Disapprovals. An item in an Application for Payment which is not specifically approved within fifteen (15) business days will be deemed disapproved. On the basis of the progress of the work performed on the Project and the conditions precedent to making disbursements contained in their respective agreements with Borrower, each Lender may disapprove all or part of an Application for Payment.

If a Lender disapproves any portion of the amount requested by Borrower in an Application for Payment, such Lender will promptly notify the other Lenders and the Borrower of the disapproved amoun t and the reason therefor. A Lender’s disapproval of an amount requested in an Application for Payment is not binding on the other Lenders.
d. Concurrent Review of Applications for Payment. If requested payment for an item in the Application for Payment is disapproved or deemed disapproved, the representatives of Borrower and the Lenders will meet promptly and in good faith to attempt to resolve the matter to their mutual satisfaction. To effectuate this paragraph, the Lenders will review each Application for Payment concurrently, and notify the other Lenders of its approval or disapproval (in whole or in part) of such request as soon as possible. Each Lender will signify its approval of an Application for Payment by signin g and transmitting to the other Lenders a copy of the Application for Payment, by hard copy or facsimile transmission. e. Disbursement of Undisputed Amounts. If there is a dispute over an item included in an Application for Payment , the Lenders and Borrower will each, if and as required by paragraph b of Section 6 above, disburse the portion of the Application for Paym ent not in dispute, and fund the disputed amounts promptly upon 384 of 482

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resolution of the dispute. If a Lender elects to fund an amount disputed by another Lender, and the Lenders and Borrower subsequently resolve such dispute so that the Lender that disputed the amount agrees to fund the previously disputed amount, the Lender that disputed the amount will so disburse its funds to reimburse the other Lender for the amount such Lender previously funded. Disputed amounts will not be deducted from the Lenders ’ respective loans, but will be available for disbursement for other approved Costs in accordance with the Project Budget. f. Disbursement by Construction Lender to Pay Disputed Amounts. Notwithstanding any provision of this Disbursement Agreement requiring approval by all Lenders of disbursements to be made by any Lender, the Construction Lender will have the right, without the other Lender s’ approval, to disburse Borrower’s Funds and Construction Lender Funds to pay Approved Costs as provided in an Application for Payment that is not approved by the Authority, including amounts to pay cost overruns, without regard to whether such advance would cause the outstandin g principal amount of the Construction Loan to exceed the original stated amount thereof. With respect to disbursements by the Construction Lender, all such amounts so advanced to pay Approved Costs will be and remain senior to the liens of the deeds of trust securing the Authority Loans all on the terms and conditions set forth in the applicable subordination agreement. Notwithstanding any provision in this Agreement or any o ther document or instrument, disbursements of Construction Lender’s Funds pursuant to this paragraph to pay Approved Costs will be deemed approved disbursements for purposes of subordination of the Authority Loans to the Construction Loan, and the subordination of the Authority Loans to the Construction Loan will include all such disburse ments and advances by the Construction Lender, all on terms and conditions set forth in the respective subordination agreement.
g. Right to Condition Disbursements . The Lender s will each have the right to condition a disbursement upon receipt and approval of such documentation, evidence or information that such Lender may request, including, but not limited to, vouchers, invoices, and architect ’s inspector ’s and/or engineer ’s periodic certifications of the percentage and/or stage of construction that has been completed.
h. General Conditions Applicable to Disbursements . Disbursements will be subject to the following conditions:
(1) Each Lender will use the disbursement procedures set forth in the respective Loan Documents and this Agreement; provided, however, none of the Lenders will be obligated to disburse any Project Funds until the other 385 of 482

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Lender has approved, or is deemed to have approved, all or a portion of the Application for Payment for the funds to be disbursed; and (2) The Lenders will make agreed disbursements of Project Funds: (a) to Borrower for reimbursement of soft costs incurred and paid by Borrower and for payment to third-party contractors, subcontractors or creditors of the Project, as the case may be; or (b) to Construction Lender for financing costs, including without limitation, loan fees, interest and reimbursement for Construction Lender ’s costs as set forth in the Construction Loan Documents and included in the Project Budget. Notwithstanding the foregoing, the Authority and Construction Lender will each have the right in their sole discretion to make disbursements of Project Funds directly to third parties entitled to such payment.

8. Approval of Final Application for Payment
Subject to additional conditions set forth in the Construction Loan Agreement (which will not, in any event, apply to any disbursement of Authority Funds), the final contractor ’s invoice (representing retention on the construction contract) will be disbursed by the Construction Lender to Borrower upon the submission by Borrower of documentation of the final cost of completing the Project, and the following (referred to as the “Completion”): (a) issuance of a permanent certificate of occupancy for the Project by the City of Glendale, (b) recordation of a Notice of Completion, (c) submission to the Lenders of unconditional lien releases or waivers obtained by Borrower or Borrower’s agent, (d) certification by the project architect that the Project has been completed in a good and workmanli ke manner and in substantial accordance with the approved plans and specifications, (e) disposition of any mechanic ’s liens that have been recorded or stop notices that have been delivered to any Lender, so that any such liens will have been paid, settled, bonded or insured around or otherwise extinguished or discharged and the Lenders have been provided satisfactory evidence of such payment, settlement, bond, title insurance or title insurance commitment or discharge, including without limit ation all statutory waivers, and (f) issuance by the Authority of its Release of Construction Covenants pursuant to the Affordable Housing Agreement. Subject to additional conditions set forth in the Authority Loan Documents (which will not, in any event, apply to a disbursement of Construction Lender Funds), the Authority will disburse to Borrower the portion of the Authority Funds held back as retention upon Borrower’s documentation of satisfaction of all conditions precedent to Conversion.

9. Disbursement of Borrower’s Funds.

Subject to the terms of the Construction Loan Agreement, Construction Lender will disburse all of the Borrower ’s Funds (other than the Borrower’s Funds that will be disbursed at closing) to pay Costs on the basis of Applications for Payment approved by the Construction Lender and approved or deemed approved by the Authority and the Lender in accordance with this Agreement.

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Glendale City CouncilMay 24, 2022

Glendale City Council
May 24, 2022