Glendale City Council
December 2, 2025

indirectly from any acts or activities of Developer or its sublessees, or any person acting for Developer, or under its respective control or direction, and also to protect against loss from liability imposed by law for damages to any property of any person occurring on or about the Property, or in connection with the operation thereof, caused directly or indirectly by or from acts or activities of Developer or its tenants, or any person acting for Developer, or under its control or direction.

Such property damage and personal injury insurance will also provide for and protect Authority against incurring any reasonable legal cost in defend ing claims for alleged loss. Such personal injury and property damage insurance will be maintained in full force and effect during the t erm of the Authority Loans in the following amounts: commercial general liability in a general aggregate amount of not less than Five Million Dollars ($5,000,000); and not less than Two Million Dollars ($ 2,000,000) of bodily injury and property damage insurance . Developer agrees that provisions of this paragraph as to maintenance of insurance will not be construed as limiting in any way the extent to which Developer may be held responsible for the indemnification of Authority or the payment of damages to persons or property resulting from Developer’s activities, activities of its tenants or the activi ties of any other person or persons for which Developer is otherwise responsible. Developer will require its insurer to waive its subrogation rights against the Authority and the City and will provide endorsements evidencing same. (iv) Workers’ Compensation Insurance: Developer will maintain or cause to be maintained workers’ compensation insurance issued by a responsible carrier authorized under the laws of the State of California to insure employers against liability for compensation under the workers’ compensation laws now in force in California, or any laws hereafter enacted as an amendment or supplement thereto or in lieu thereof. Such work ers’ compensation insurance will cover all persons employed by Developer in connection with the Property and will cover liability within statutory limits for compensation under any such act aforesaid, based upon death or bodily injury claims made by, for or on behalf of any person incurring or suffering injury or death in connection with the Property or the operation thereof by Developer. Notwithstanding the foregoing, Developer may, in compliance with the laws of the State of California and in lieu of maintaining such insurance, self -insure for workers ’ compensation in which event Lessee will deliver to Authority evidence that such self-insurance has been approved by the appropriate State authorities. If Developer is required to maintain Workers’ Compensation Insurance under this paragraph, Developer will furnish the Authority with a certificate of waiver of subrogation under the terms of the Workers’ Compensation Insurance. Developer will require its general contractor to waive subrogation and will require that its subcontractors waive subrogation to the extent that such a waiver is commercially available.
c. All policies hereunder will not be subject to cancellation or non -renewal except after notice in writing will have been sent by mail addressed to the Authority and the City not less than 30 days in advance of the cancellation date, except for cancellation for nonpayment of premium, in which event notice will be given not less than ten days in advance of the cancellation date. All policies will include the Developer as named insured and, where applicable, the Authority as additional insured and/or loss payee where applicable.

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d. The term “full insurable value ” as used in this Section 4.12 means the actual replacement cost (excluding the cost of excavation, foundation and footings below the lowest floor and without deduction for depreciation) of the Improvements on the Property immediately before such casualty or other loss, including hard and soft costs of construction, such as architectural and engineering fees, inspection , and supervision. To ascer tain the reasonable amount of coverage required, Developer will review the full insurable value on an annual basis. e. All insurance provided under this Section 4.12 will be for the benefit of Developer, Authority and City. Developer agrees to timely pay all premiums for such insurance and, at its sole cost and expense, to comply and secure compliance with all insurance requirements necessary for the maintenance of such insurance. Developer agrees to submit policies of all insurance required by this Section 4.12, or certificates and endorsements evidencing the existence thereof, to Authority prior to the Closing, indicating compliance with the contractual liability imposed hereby. Within thirty (30) days, if practicable, but in any event prior to expiration of any such policy, copies of renewal policies, or certificates evidencing the existence thereof, will be submitted to Authority. All insurance herein provided for under this Section 4.12 will be effected under policies issued by insurers of recognized responsibility, licensed or permitted to do business in the State of California reasonably approved by Authority. f. Developer must cause all contractors and subcontractors performing work relating to the Project to maintain, at a minimum, the liability insurance and workers compensation insurance described in this Section 4.12, except that with respect to any contractor s such contractors shall maintain in full force commercial general liability in an aggregate amount of not less than Ten Million Dollars ($10,000,000) and not less than Ten Million Dollars ($10,000,000) of bodily injury and property damage insurance, and w ith respect to any subcontractors such subcontractors shall maintain in full force commercial general liability in an amount not less than One Million Dollars ($1,000,000) of bodily injury and property damage insurance, and the Developer must also cause it s architects and engineers to maintain Architects and Engineers Professional Liability (Errors and Omissions) insurance on a “claims made basis” in an amount of not less $1,000,000. When coverage is provided on a “claims made basis”, Developer must cause all contractors and subcontractors to continue to renew the insurance for a period of five (5) years after Completion. Such insurance must have the same coverage and limits as the policy that was in effect prior to Completion , and cover Developer for all claims made by the Authority arising out of any acts or omissions of Developer, or its officers, employees or agents prior to Completion. g. If Developer fails or refuses to procure or maintain insurance as required by this Agreement, Authority will have the right, at Authority ’s election, and upon ten (10) days prior notice to Developer, to procure and maintain such insurance. The premiums paid by Authority will be treated as a loan, due from Developer, to be paid on the first day of the month following the date on which the premiums were paid. Authority will give prompt notice of the payment of such premiums, stating the amounts paid and the name of the insured(s).

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Section 4.13 Disclaimer of Authority Responsibility
Except as provided in this Agreement, the Authority neither undertakes nor assumes nor will have any responsibility or duty to Developer or to any third party to review, inspect, supervise, pass judgment upon or inform Developer or any third party of any matter in connection with the Property, whether with respect to the quality, adequacy or suitability of the plans, any labor, service, equipment or material furnished to the Project, any person furnishing the same or otherwise. Developer and all third parties will rely upon its or their own judgment regarding such matters, and any review, inspection, supervision, exercise of judgment or information supplied to Developer or to any third party by the Authority or the City in connection with such matter is for the public purpose of providing affordable housing, and neither Developer (except for the purposes set forth in this Agreement) nor any third party is entitled to rely thereon. Neither may Developer or any third party assert such review, inspection, supervision, exercise of judgment or information supplied to Developer or to any third party as a defense to the indemnification obligation set forth in Section 4.12 of this Agreement.

Section 4.14 Permits
Before commencement of construction or development of any buildings, structures or other work of improvement upon any portion of the Property, Developer will, at its own expense, secure or cause to be secured, any and all permits which may be required by the City or any other governmental authority affected by such construction, development or work.

Section 4.15 Rights of Access
Commencing upon the Closing, representatives of the Authority and the City will have the reasonable right of access to the Property, upon two (2) business days’ written notice to Developer (except in the case of an emergency, in which case Authority will provide such notice, if any, as may be practical under the circumstances), without charges or fees, at normal construction hours during the period of construction for the purposes of this Agreement, including, but not limited to, the inspection of the work being performed in constructing the improvements.

Section 4.16 Taxes, Assessments, Encumbrances and Liens Commencing upon the Closing, Developer will pay prior to delinquency all real estate taxes and assessments assessed and levied on or against the Property. Developer will not place, or allow to be placed, on title to the Property or any portion thereof, any mortgage, trust deed, encumbrance or lien not authorized by this Agreement. In addition, Developer will remove, or will have removed, any levy or attachment made on title to the Property (or any portion thereof), or will assure the satisfaction thereof within a reasonable time but in any event prior to a sale thereunder. Nothing herein contained will be deemed to prohibit the Developer from contesting the validity or amount of any tax as sessment, encumbrance or lien, or to limit the remedies available to the Developer in respect thereto.

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Section 4.17 Rights to Plans
All work product prepared pursuant to this Agreement, including (but not limited to), all Plans, construction documents, soils tests and similar reports, permits and other entitlements are hereby assigned to the Authority as security for Developer’s obligations hereunder. In the event that this Agreement is terminated by the Authority, Developer will, within ten (10) business days of such termination, transmit all such work product to the Authority.

Section 4.18 Release of Construction Covenants
a. Promptly after Completion, as generally and specifically required by this Agreement and in particular the Scope of Development, the Authority will furnish Developer with a Release of Construction Covenants upon written request therefor by Developer. The Authority will not unreasonably withhold such Release of Construction Covenants and such Release of Construction Covenants will be issued so long as Developer has constructed and developed the Property in accordance with this Agreement and substantially in accordance with the Plans approved by the Authority pursuant hereto. Such Release of Construction Covenants will be, and will so state, conclusive determination of satisfactory completion of all of the construction required by this Agreement.
b. The Release of Construction Covenants will be in such form as to permit it to be recorded in the official records of Los Angeles County. No Release of Construction Covenants will be recorded for less than the completed Improvements and development of the entire Property. c. If the Authority refuses or fails to furnish a Release of Construction Covenants for the Property after written request from Developer, the Authority will, within thirty (30) days of the written request, provide Developer with a written statement of the reasons the Authority refused or failed to furnish a Release of Construction Covenants. The statement will also contain the Authority’s opinion of the action Developer must take to obtain a Release of Construction Covenants. If the reason for such refusal is confined to the immediate availability of specific items or materials for landscaping, and/or minor items, the Authority will issue its Release of Construction Covenants upon the posting of a bond by Developer with the Authority in an amount representing a fair value of the work not yet completed. If the Authority will have failed to provide such written statement within said 30-day period, Developer will be deemed to have received the Release of Construction Covenants.
d. The Release of Construction Covenants will not constitute evidence of compliance with or satisfaction of any obligation of Developer to the beneficiary of the Construction Loan Deed of Trust or any other P erson. The Release of Construction Covenants is not a notice of completion as referred to in Section 3093 of the California Civil Code.

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ARTICLE V. USE OF THE PROPERTY
Section 5.01 Use As Affordable Housing
a. Developer covenants and agrees (for itself, its successors, its assigns, and every successor in interest to the Property or any part thereof) that Developer, its successors and assigns will use the Property exclusively to provide affordable housing for Very Low Income HOME Tenants and the Qualifying Population, in conformance with the HOME Regulatory Agreement, including common areas associated therewith . No change in the use of the Property will be permitted without the prior written approval of the Authority. Developer covenants and agrees (for itself, its successors, its assigns, and every successor in interest to the Property or any part thereof) that five (5) HOME Units will be made available to and occupied by Very Low Income HOME Tenants at HOME Rents and fourteen (14) HOME ARP Units will made available to and occupied by a Qualifying Population at HOME ARP Rents , as set forth in the HOME Regulatory Agreement.
b. The HOME Units and the HOME ARP Units must be operated in accordance with the following requirements:

1. The HOME Units and the HOME ARP Units will be designated as floating units. Prior to lease-up of the Project, Developer must identify the street address and unit number of the units that will be operated as HOME Units and HOME ARP Units. Proposed changes to such units must be approved in advance by the Authority. Each substituted unit must be comparable in terms of size, features, and number of bedrooms to the originally designated HOME Units or HOME ARP Unit.

2. The maximum monthly rent (including a reasonable utility allowance) may not exceed HOME Rents or HOME ARP Rents, as applicable, as set forth in this Agreement. The HOME rent limits published by HUD will include average occupancy per unit and adjusted income assumptions.

3. Failure to comply with the affordability requirements of this Agreement or the HOME Regulatory Agreement , subject to the notice and cure periods in Section 6.01, is an event of default under the terms of the HOME CHDO Loan and the HOME ARP Loan. Pursuant to the HOME CHDO Note evidencing the HOME CHDO Loan and the HOME ARP Note evidencing the HOME ARP Loan, the HOME CHDO Loan and the HOME ARP Loan will be due and payable, subject to the notice and cure periods in Section 6.01, if the housing does not meet the affordability requirements of this Agreement and the HOME Regulatory Agreement.

4. Developer must submit its rent schedule and utility allowances thirty (30) days prior to initial rental of the units and on an annual basis thereafter. The Authority will review and approve or disapprove the proposed rent schedule and utility allowances for compliance with the maximum rent limitations contained in 24 CFR 92.252, as applicable.

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5. The Authority will provide updated HUD income and rent limits to Developer as they become available. Developer will be responsible for ensuring that the current operative HOME income and rent limits in effect at the time of the tenant’s rental application will be used to determine initial tenant eligibility and conformance with HOME affordability requirements and that each tenant recertification is conducted using current HOME income and rent limits to assure compliance with HOME Regulations, as applicable.

6. Income determination and rental rate adjustments will occur upon annual lease renewal, as applicable. Any increase in rents for HOME Units or HOME ARP Units is subject to the provisions of existing leases, including the provision that rents may not be adjusted until leases are renewed. Developer must provide tenants with not less than thirty (30) days prior written notice before implementing any increase in rents.

7. Developer agrees that prior to the initial lease-up of the Project, Developer will consult with and obtain the approval of the Authority in developing an affirmative marketing plan for renting the Units. The affirmative marketing plan must comply with the requirements of 24 CFR 92.351.

8. No offic er, employee, agent, official, consultant, or immediate family member of Developer (or immediate family member of an officer, employee, agent, official, or consultant of Developer) may occupy a HOME Unit or a HOME ARP Unit. c. The Authority and its successors and assigns will have the right to monitor and enforce the covenants contained in this Section 5.01. Developer covenants that it will comply with the monitoring program established by the Authority to enforce said covenants. In complying with such monitoring program, Developer or its agent will prepare and submit to the Authority an annual occupancy report, financial information and income verification documents for each tenant and all supporting documentation, on forms provided by the Authority, setting forth the required information for the preceding year. On an annual basis, Developer or its agent will additionally submit to the Authority evidence o f each tenant’s continuing eligibility to occupy the unit. The Authority will review such reports for certification of continuing affordability of Units and eligibility of tenants.

Section 5.02 Management Plan; Annual Project Budget; Quarterly Report a. Within the time set forth therefor in the Schedule of Performance , Developer will submit to the Authority Executive Director a Management Plan reasonably acceptable to the Authority Executive Directo r, describing the proposed plan for managing and operating the Property, including policies and procedures to assure accessibility to persons with disabilities. The Authority will provide Developer a draft Management Plan which Developer shall use to prepare the final Management Plan submitted to the Authority. Developer will manage and operate the Property in accordance with the approved Management Plan, including such amendments as may be approved in writing from time to time by the Developer and the Authority Executive Director or designee, for the entire Restricted Period.

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b. In addition, the Developer will submit on or before the first day of each fiscal year of the Restricted Period an estimated annual budget for management of the Property (the “Annual Project Budget ”) in accordance with the Management Plan. The Annual Project Budget will include all necessary operating expenses, current maintenance charges, expenses of reasonable upkeep and repairs, taxes and special assessment levies, prorated amount required for insurance and all other expenses incident to the operation of the Project; and will show the expected revenues to pay such expenses, including annual debt service requirements and reserve fund deposits and balances. The Annual Project Budget, including any amendments proposed by the Developer, will be subject to the approval of the Authority Executive Director , which approval will not be unreasonably withheld or delayed.
c. Beginning on the date of first occupancy, for each fiscal year of the Restricted Period, Developer will also submit on a quarterly basis a quarterly report for the management of the Property (the “Quarterly Report”) in a form that is reasonably acceptable to the Authority Executive Director. The Quarterly Report will include a profit and loss statement, budget to date figures, and occupancy report. Developer’s failure to timely submit the Quarterly Reports , after the Authority has provided written notice to Developer and at least seven business days to cure such failure, will, at the discretion of the Authority, cause the imposition of a monetary penalty of $500 to be paid to the Authority. The Authority Executive Director, in his sole discretion may waive the requirement of the Quarterly Report for one or more quarterly reporting periods.

However, such waiver will not operate to waive any subsequent requirement of the Quarterly Report for the Restricted Period upon written notice to Developer by the Authorit y Executive Director.
d. The HOME Regulatory Agreement will contain appropriate provisions implementing this Section 5.02.

Section 5.03 Property Maintenance
a. Within the time set forth therefor in the Schedule of Performance , the Developer will prepare and submit to the Authority Executive Director or his designee for revie w and approval a program (the “Maintenance Program”) for the exterior and interior maintenance of the Property and the Improvements. The Authority will provide Developer a draft Maintenance Program which Developer shall use to prepare the final Maintenance Program submitted to the Authority.
b. The Maintenance Program will describe in reasonable detail the standards to be followed in maintaining the interior and exterior of the Improvements, including a schedule indicating the proposed frequency of each element of maintenance, and will include, at a minimum, the following: periodic cleaning of the interior and exterior of the Improvements, including windows; removing graffiti; removing debris and waste materials and otherwise maintaining indoor and outdoor areas of the Property; maintaining any lawns, plants, shrubs and trees or other landscaping planted on the Property; performing inspections of all exterior features to determine DRAFT
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whether repairs are required; conducting periodic protective treatments such as rust removal and caulking; conducting repairs to facades, roof, doors, windows and other exterior features; maintaining fencing and other security devices and systems; periodic repainting of the exterior; periodic repainting of the interior units and common areas; periodic replacing of the interior unit carpets; checking building systems, including, but not limited to the heating and cooling systems, smoke alarms and water heate rs; checking interior unit appliances; and monitoring interior unit bathrooms for mold/mildew. The Maintenance Program, including any amendments proposed by the Developer, will be subject to the reasonable approval of the Authority Executive Director. c. At all times during the Restricted Period, the Developer will maintain the Property and the Improvements in accordance with the approved Maintenance Program. To implement this requirement, Developer agrees to budget sufficient funds to pay for all reasonably anticipated costs (as indicated in the Annual Project Budget). In the event the Developer fails to maintain the Property and the Improvements in accordance with the approved Maintenance Program, and does not cure such failure within thirty (30) days following notice from the Authority , with such additional time as may be reasonably necessary to cure such default provided that Developer has commenced to cure within such thirty (30) day period and i s diligently prosecuting the cure to completion, the Authority will have the right, but not the obligation, to enter the Property, correct any violation, and hold the Developer responsible for the cost thereof, and such cost, until paid, will constitute a lien on the Property. Prior to undertaking any work to correct any such maintenance deficiency, the Authority will provide written notice that the Developer must correct the deficiency within a reasonable time. The Developer will have a reasonable time in which to comply following such notice from the Authority.
d. The HOME Regulatory Agreement will contain appropriate provisions implementing this Section 5.03.

Section 5.04 Obligation to Refrain from Discrimination
a. Developer covenants and agrees for itself, its successors and its assigns in interest to the Property or any part thereof, that there will be no discrimination against or segregation of any person, or group of persons, on account of race, color, creed, religion, sex, sexual orientation, marital status, national origin, or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property, nor will Developer itself or any person claiming under or through it establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees of the Property.
b. All deeds, leases or contracts will contain or be subject to substantially the following nondiscrimination or nonsegregation clauses:

1. In deeds: “The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators, and assigns, and all persons claiming under or through them, that there will be no discrimination against or segregation of, any DRAFT
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person or group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises herein conveyed, nor will the grantee or any person claiming under or through him or her, establish or permit any practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the premises herein conveyed. The foregoing covenants will run with the land.”
Notwithstanding the preceding paragraph, the provisions relating to discrimination on the basis of familial status will not be construed to apply to housing for older persons, as defined in Section 12955.9 of the Government Code nor be construed to affect Sections 51.2, 51.3, 51.4, 51.10, 51.11, and 799.5 of the Civil Code, relating to housing for senior citizens. Subdivision (d) of Section 51 and Section 1360 of the Civil Code and subdivisions (n), (o), and (p) of Section 12955 of the Government Code will also apply to the preceding paragraph.

2. In leases: “The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators, and assigns, and all persons claiming under or through him or her, and this lease is made and accepted upon and subject to the following conditions:

That there will be no discrimination against or segregation of any person or group of persons, on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the premises herein leased nor will the lessee himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy, of tenants, lessees, sublessees, subtenants, or vendees in the premises herein leased.” Notwithstanding the preceding paragraph, the provisions relating to discrimination on the basis of familial status will not be construed to apply to housing for older persons, as defined in Section 12955.9 of the Government Code nor be construed to affect Sections 51.2, 51.3, 51.4, 51.10, 51.11, and 799.5 of the Civil Code, relating to housing for senior citizens. Subdivision (d) of Section 51 and Section 1360 of the Civil Code and subdivisions (n), (o), and (p) of Section 12955 of the Government Code will also apply to the preceding paragraph.

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3. In contracts: There will be no discrimination against or segregation of any person or group of persons, on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the land, nor will the transferee itself or any person claim ing under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy, of tenants, lessees, sublessees, subtenants, or vendees of the land.”
Section 5.05 Equal Employment Opportunity
During the term of this Agreement, Developer agrees as follows:
a. Developer will not discriminate against any employee or applicant for employment because of race, color, religion, sex, or national origin(s). Developer will take affirmative action to ensure the applicants are employed, and that employees are treated during employment, without regard to their race, color, religion, sex or national origin(s). Such action shall include, but not be limited to, the following: employment, upgrading, demotion, or transfer, recruitment or recruitment advertising; layoff or termin ation; rates of pay or other forms of compensation; and selection for training, including apprenticeship. Developer agrees to post in conspicuous places, available to employees and applicants for employment, notices setting forth the provisions of this nondiscrimination clause.
b. Developer will, in all solicitations or advertisements for employees placed by or on behalf of Developer, state that all qualified applicants will receive consideration for employment without regard to race, color, religion, sex, or national origin. c. Developer will send to each labor union or representative of workers with which he has a collective bargaining agreement or other contract or understanding, a notice advising the labor union or worker’s representative of Developer’s commitments under Secti on 202 of Executive Order No. 11246 of September 24, 1965, and shall post copies of the notice in conspicuous places available to employees and applicants for employment. d. Developer will comply with all provisions of Executive Order 11246 of September 24, 1965, and of the rules, regulations, and relevant orders of the Secretary of Labor. e. Developer will furnish all information and reports required by Executive Order 11246 of September 24, 1965, and by the rules, regulations, and orders of the Secretary of Labor, or pursuant thereto, and will permit access to its books, records, and accounts by the Authority and the Secretary of Labor for purposes of investigation to ascertain compliance with such rules, regulations, and order.

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f. If Developer is found to be in noncompliance with the nondiscrimination clauses of this Agreement or with any of such rules, regulations or orders, this Agreement may be canceled, terminated or suspended in whole or in part and Developer may be declared ineligible for further Government contracts in accordance with procedures authorized in Executive Order 11246 of September 24, 1965, and such other sanctions may be imposed and remedies invoked as provided in Executive Order 11246 of September 24, 1965 or by rule, regulations, or order of the Secretary of Labor or as otherwise provided by law.
g. Developer will include the provisions of paragraphs (a) through (g) of this Section

5.05 in every contract or purchase order related to the Project unless exempted by rules, regulations, or orders of the Secretary of Labor issued pursuant to section 204 of Executive Order 11246 of September 24, 1965, so that such provisions will be binding up on each contractor or vendor providing services related to the Project. Developer will take such action with respect to any contract or purchase order as the Authority may direct as a means of enforcing such provisions, including sanctions for noncompliance.

Section 5.06 Labor, Training, and Business Opportunity
Developer agrees to comply with the federal regulations governing training, employment and business opportunities, including but not limited to Section 3 of the Housing and Urban Development Act of 1968, to the extent such regulations apply to Developer. Compliance with the provisions of Section 3, the regulations set forth in 24 Code of Federal Regulations and all applicable rules and orders of the Department of Housing and Urban Development issued thereunder prior to the execution of this Agreement will b e a condition precedent to federal financial assistance being provided to the Project as well as a continuing condition, binding upon the applicant or recipient for such assistance, its successors, and assigns. Failure to fulfill these requirements will subject Developer, its contractors and subcontractors, its successors, and assigns to those sanctions specified by 24 Code of Federal Regulations as well as with any and all applicable amendments thereto.

Section 5.07 Effect and Duration of Covenants
The covenants established in this Agreement will run with the land, without regard to technical classification and designation, and will be for the benefit and in favor of Authority, its successors and assigns, and the City. The covenants described in this Part 5 will commence upon recordation of the HOME Regulatory Agreement and will be set forth in the HOME Regulatory Agreement and will remain in effect for the respective periods specified therein.

Section 5.08 Enforcement of Covenants
The Authority and the City are deemed beneficiaries of the terms and provisions of this Agreement and the covenants herein, both for and in their own right and for the purposes of protecting the interests of the community and other parties, public or priva te, for whose benefit this Agreement and the covenants running with the land have been provided. The Authority will have the right if the covenants contained in this Agreement are breached and such breach is not DRAFT
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cured within the time periods set forth in Section 6.01, to exercise all rights and remedies, and to maintain any actions or suits at law or in equity or other proper proceedings , including but not limited to an action for specific performance, to enforce the curing of such breaches to which it or any other beneficiaries of this Agreement and covenants are entitled.

Section 5.09 Monitoring
On an annual basis, Developer will submit to the Authority information on rents and occupancy of the HOME Units and the HOME ARP Units to demonstrate compliance with the income and affordability requirements of 24 CFR 92.252 and this Agreement. Developer must also provide the Authority with information regarding HOME Unit and HOME ARP Unit substitution and filling of vacancies sufficient to demonstrate that the Project remains in compliance with HOME rental occupancy requirements.

Section 5.10 HOME Regulatory Agreement
Concurrently with the Closing, Developer and Authority will execute and deposit with the Escrow Agent a HOME Regulatory Agreement substantially in the form attached to th is Agreement as Attachment No. 5.

ARTICLE VI. DEFAULTS AND REMEDIES
Section 6.01 Defaults - General
a. Subject to the Force Majeure Delay, as provided in Section 7.04 and the cure periods provided herein, failure or delay by either party to perform any term or provision of this Agreement constitutes a default under this Agreement. The party who fails or delays must immediately commence to cure, correct or remedy such failure or delay and will complete such cure, correction or remedy with reasonable diligence.
b. The injured party will give written notice of default to the party in default, specifying the default complained of by the injured party. Failure or delay in giving such notice will not constitute a waiver of any default, nor will it change the time of default. Except as otherwise expressly provided in this Agreement, any failures or delays by either party 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 either party in asserting any of its rights and remedies will not deprive either party of its right to institute and maintain any actions or proceedings which i t may deem necessary to protect, assert or enforce any such rights or remedies. c. If a monetary event of default occurs, prior to exercising any remedies hereunder, the injured party will give the party in default written notice of such default. The party in default will have a period of ten (10) days after such notice is given within which to cure the default prior to exercise of remedies by the injured party.

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d. If a non -monetary event of default occurs, prior to exercising any remedies hereunder, the injured party will give the party in default notice of such default. If the default is reasonably capable of being cured within thirty (30) days, the party in default will have such period to effect a cure prior to exercise of remedies by the injured party. If the default is such that it is not reasonably capable of being cured within thirty (30) days, and the party in default (i) initiates corrective action within sa id period, and (ii) diligently, continually, and in good faith works to effect a cure as soon as possible, then the party in default will have such additional time as is reasonably necessary to cure the default prior to exercise of any remedies by the injured party.

Section 6.02 Institution of Legal Actions
Subject to the notice and cure provisions of Section 6.01, in addition to any other rights or remedies (and except as otherwise provided in this Agreement), either party may institute legal action to cure, correct or remedy any default, to recover damages for any default, or to obtain any other remedy consistent with the purpose of this Agreement. Such legal actions must be instituted in the Superior Court of the County of Los Angeles, State of California, in any other appropriate court of that county, or in the United States District Court for the Central District of California.

Section 6.03 Applicable Law
The laws of the State of California will govern the interpretation and enforcement of this Agreement, without reference to the principles relating to conflicts of laws.

Section 6.04 Acceptance of Service of Process
a. If legal action is commenced by the Developer against the Authority, service of process on the Authority will be made by personal service upon the Executive Director of the Authority, or in such other manner as may be provided by law. b. If legal action is commenced by the Authority against the Developer, service of process on the Developer will be made by personal service upon the Developer (or upon a general partner, managing member or officer of the Developer) and will be valid whether made within or without the State of California, or in such manner as may be provided by law.

Section 6.05 Rights and Remedies are Cumulative
Except with respect to rights and remedies expressly declared to be exclusive in this Agreement, the rights and remedies of the parties are cumulative, and the exercise by either party of one or more of such rights or remedies will not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by the other party.

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Section 6.06 Damages
If either party defaults with regard to any of the provisions of this Agreement, subject to the notice and cure provisions of Section 6.01 and the non-recourse provisions of Section 6.11, the defaulting party will be liable to the non-defaulting party for any damages caused by such default, and the non -defaulting party may, after such notice and opportunity to cure (but not before) commence an action for damages against the defaulting party with respect to such default.

Section 6.07 Specific Performance
If either party defaults with regard to any of the provisions of this Agreement, subject to the notice and cure provisions of Section 6.01, the non-defaulting party, at its option, may, after such notice and opportunity to cure (but not before) commence an action for specific performance of the terms of this Agreement pertaining to such default.

Section 6.08 Termination by Either Party
Prior to the Closing, either party will have the right to terminate this Agreement in the event (i) the other party is in default of any material term or provision of this Agreement, and, following notice, fails to cure such default within the time provided in Section 6.01 or (ii) the parties mutually determine that, despite using good faith commercially reasonable efforts, Developer will be unable to obtain the necessary financing for the Project.

Section 6.09 Termination by Developer
Prior to the Closing, subject to the notice and cure provisions of Section 6.01, Developer will have the right to terminate this Agreement, by providing written notice to the Authority, in the event of a default by Authority pursuant to this Agreement.

Section 6.10 Termination by Authority
a. In accordance with 24 CFR 85.43 and subject to applicable notice and cure periods, suspension or termination of this Agreement may occur if Developer materially fails to comply with any term of the award of HOME Program Funds or HOME ARP Program Funds , and the award may be terminated for convenience with the consent of the Developer in accordance with 24 CFR 85.44, subject to applicable notice and cure periods. b. Subject to the notice and cure provisions of Section 6.01, the Authority will have the right, prior to the Closing, to terminate this Agreement, by providing written notice to Developer, in the event of a default by Developer or failure of any condition precedent to the occurrence of the Closing which is in the control of Developer, including but not limited to the following:

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1. Developer fails to submit to the Authority evidence of financing or fails to satisfy any other condition precedent to the occurrence of the Closing within the time established for Closing in the Schedule of Performance; or

2. Developer (or any successor in interest) assigns or attempts to assign any of Developer’s rights in and to the Property or any portion thereof or interest therein, or this Agreement or any portion hereof, except as permitted by this Agreement; or

3. Except for a Permitted Transfer, there is substantial change in the ownership of the Developer, or with respect to the identity of the parties in control of Developer, or the degree thereof contrary to the provisions of Section 1.06.b. of this Agreement. c. After the Closing, but before Completion, Authority will have the additional right to terminate this Agreement in the event any of the following defaults will occur:

1. Developer fails to commence construction of the Improvements as required by this Agreement and such breach is not cured within the time provided in Section 6.01 of this Agreement; or

2. Developer abandons or substantially suspends construction of the Improvements and such breach is not cured within the time provided in Section 6.01 of this Agreement; or

3. Developer assigns or attempts to assign this Agreement, or any rights herein, or transfer, or suffer any involuntary transfer of the Property, or any part thereof, in violation of this Agreement, and such breach is not cured within the time provided in Section 6.01 of this Agreement; or

4. Developer otherwise materially breaches this Agreement, and such breach is not cured within the time provided in Section 6.01 of this Agreement. d. Notwithstanding the foregoing, the Authority will have the right to terminate this Agreement upon a final determination by state or federal court or the California Fair Political Practices Commission, subject to cure rights or appeal, of a criminal, material, and/or repeated violation of local, state, or federal campaign finance laws by Developer or a general partner of Developer or a member of such general partner or an officer or other Person exercising management or control over such member.

Section 6.11 Limited Recourse Obligations
a. Subject to the provisions and limitations of this Section 6.11, the obligation to repay the Authority Loan s is a nonrecourse obligation of the Developer. Developer will not have any personal liability for repayment of the Authority Loans, except as provided in this Section 6.11.

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security for the Authority Loan s. Provided, however, that the foregoing will not (a) constitute a waiver of an obligation evidenced by the HOME CDHO Note, the HOME ARP Note, or the Authority Deed of Trust; (b) limit the right of the Authority to name Developer as a party defendant in an action or suit for judicial foreclosure and sale under the HOME CDHO Note, the HOME ARP Note or the Authority Deed of Trust or an action or proceeding thereunder so long as no judgment in the nature of a deficiency judgment will be asked for or taken against Developer; (c) release or impair the HOME CDHO Note, the HOME ARP 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 any other instrument securing the Authority Loans 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 the Authority Loans; (f) relieve Developer of its obligations under an indemnity delivered by Developer to the Authority; or (g) affect in any way the validity of a guarantee (if any) or indemnity from any person of all or any of the obligations evidenced and secured by the HOME CDHO Note, the HOME ARP Note, or 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, Developer and its successors and assigns will have personal liability hereunder for any deficiency judgment, but only if and to the extent Developer, 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 Developer in connection with the operation of the mortgaged Property, which are then due and payable. Notwithstanding the first sentence of this paragraph, the Authority may recover directly from Developer or from any other party:

1. damages, costs and expenses incurred by the Authority as a result of fraud or criminal act or acts of Developer or a partner, shareholder, officer, director or employee of Developer, or of a member or general or limited partner of Developer, or of a general or limited partner of such member or general or limited partner;

2. damages, costs and expenses incurred by the Authority as a result of misappropriation of funds provided for the construction of the Improvements, rents and revenues from the operation of the Improvements or proceeds of insurance policies or condemnation proceeds;

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4. all court costs and attorneys ’ fees reasonably incurred in enforcing or collecting upon any of the foregoing exceptions (provided that Authority will pay Developer’s reasonable court costs and attorneys’ fees if Developer is the prevailing party in such enforcement or collection action).

ARTICLE VII. GENERAL PROVISIONS
Section 7.01 Notices
Formal notices, demands and communications between the Authority and the Developer will be sufficiently given if dispatched by registered or certified mail, postage prepaid, return receipt requested, to the principal offices of the Authority and the Developer, as designated in Section 1.04 and Section 1.05 hereof. Such written notices, demands and communications may be sent in the same manner to such other addresses as either party may from time to time designate by mail as provided in this Section 7.01. 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, 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 the recipient; 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 7.02 Conflicts of Interest
a. No member, official or employee of the Authority will have any personal interest, direct or indirect, in this Agreement nor will any such member, official or employee participate in any decision relating to the Agreement which affects his personal interests or the interests of any corporation, partnership or association in which he is, directly or indirectly, interested. b. Developer warrants that it has not paid or given, and will not pay or give, any third party any money or other consideration for obtaining this Agreement.

Section 7.03 Nonliability of Authority Officials and Employees No member, official, employee or consultant of the Authority will be personally liable to the Developer, or any successor in interest, in the event of any default or breach by the Authority or for any amount which may become due to the Developer or to its successor, or on any obligations under the terms of this Agreement.

Section 7.04 Force Majeure
In addition to specific provisions of this Agreement, performance by either party hereunder will not be deemed to be in default where delays or defaults are due to Force Majeure Events.

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Section 7.05 Inspection of Books and Records
a. Developer will maintain complete, accurate, and current records pertaining to the Property for a period of five (5) years after the creation of such records, and shall permit any duly authorized representative of the Authority to inspect and copy records, during regular business hours upon reasonable advance notice. Records must be kept accurate and current. b. The Authority reserves the right to inspect, monitors, and observe work and services performed by Developer at any and all reasonable times. c. The Authority reserves the right to audit the records of Developer any time during the performance of this Agreement and for a period of five years after final payment is made under this Agreement.
d. If required, Developer will provide the Authority with a certified audit of Developer’s records representing the January 1 – December 31 fiscal year, pursuant to the requirements of OMB Circular A-133.
e. Access will be immediately granted to the Authority, HUD, the Comptroller General of the United States, or any of their duly authorized representatives to any books, documents, papers, and records of Developer or its contractors for the purpose of performing audits and examinations or making copies and transcriptions. This requirement must be included in all contracts and subcontracts.

Section 7.06 Approvals
a. Except as otherwise expressly provided in this Agreement, approvals required of Authority or Developer in this Agreement, including the attachments hereto, will not be unreasonably withheld or delayed. All approvals will be in writing. Except as otherwise expressly provided in this Agreement, f ailure by either party to approve a matter within the time provided for approval of the matter will not be deemed a disapproval, and failure by either party to disapprove a matter within the time provided for approva l of the matter will not be deemed an approval.
b. Except as otherwise expressly provided in this Agreement, approvals required of the Authority will be deemed granted upon the written approval of the Authority ’s Executive Director or designee. Authority agrees to provide notice to Developer of the name of the Executive Director’s designee on a timely basis, and to provide updates from time to time. Notwithstanding the foregoing, the Executive Director or designee may, in his or her sole discretion, refer to the governing body of the Authority any item req uiring Authority approval; otherwise, “Authority approval” means and refer to approval by the Executive Director or designee.

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Section 7.07 Real Estate Commissions
Neither the Authority nor the Developer will be liable for any real estate commis sions, brokerage fees or finder fees which may arise from this transaction. The Authority and the Developer each represent to the other that it has employed no broker, agent, or finder in connection with this transaction.

Section 7.08 No Third Party Beneficiaries
This Agreement is made solely and specifically between the Authority and Developer and their respective successors and assigns; and, except as expressly provided otherwise in this Agreement, no other person will have any rights, interest or claims under this Agreement or be entitled to any benefits under or on account of this Agreement as a third party beneficiary or otherwise.

Section 7.09 Authority to Sign
Developer hereby represents that each person executing this Agreement on behalf of Developer has full authority to do so and to bind Developer to perform pursuant to the terms and conditions of this Agreement.

Section 7.10 No Partnership
Nothing contained in this Agreement will be deemed or construed to create a partnership, joint venture, or any other similar relationship between the parties hereto or cause Authority to be responsible in any way for the debts or obligations of Developer or any other Person.

Section 7.11 Compliance With Law
Developer agrees to comply with all the requirements now in force, or which may hereafter be in force, of all municipal, county, state and federal authorities, pertaining to the development and use of the Property and the Improvements, as well as operations conduct ed thereon. The judgment of any court of competent jurisdic tion, or the admission of Developer in any action or proceeding, whether Authority be a party thereto or not, that Developer has violated any such ordinance or statute in the development and use of the Property will be conclusive of that fact as between Authority and Developer.

Section 7.12 Binding Effect
This Agreement, and the terms, provisions, promises, covenants and conditions hereof, will be binding upon and will inure to the benefit of the parties hereto and their respective heirs, legal representatives, successors and assigns.

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Section 7.13 Incorporation by Reference
Each of the attachments and exhibits attached hereto is incorporated herein by this reference.

Section 7.14 Counterparts
This Agreement may be executed by each party on a separate signature page, and when the executed signature pages are combined, will constitute one single instrument.

Section 7.15 Construction and Interpretation of Agreement a. The language in all parts of this Agreement will in all cases be construed simply, as a whole and in accordance with its fair meaning and not strictly for or against any party. The parties hereto acknowledge and agree that this Agreement has been prepared jointly by the parties and has been the subject of arm’s length and careful negotiation over a considerable period of time, that each party has been given the opportunity to independently review this Agreement with legal counsel, and that each party has the requisite experience and sophistication to understand, interpret, and agree to the particular language of the provisions hereof. Accordingly, in the event of an ambiguity in or dispute regarding the interpretation of this Agreement, this Agreement will not be interpreted or construed against the party preparing it, and instead other rules of interpretation and construction will be utilized.
b. If any term or provision of this Agreement, the deletion of which would not adversely affect the receipt of any material benefit by any party hereunder, will be held by a court of competent jurisdiction to be invalid or unenforceable, the remainder of this Agreement will not be affected thereby and each other term and provision of this Agreement will be valid and enforceable to the fullest extent permitted by law. It is the intention of the parties hereto that in lieu of each clause or provision of this Agr eement that is illegal, invalid, or unenforceable, there be added as a part of this Agreement an enforceable clause or provision as similar in terms to such illegal, invalid, or unenforceable clause or provision as may be possible. c. The captions of the articles, sections and subsections herein are inserted solely for convenience and under no circumstances are they or any of them to be treated or construed as part of this instrument.
d. References in this instrument to this “Agreement” mean, refer to and include this instrument as well as any riders, exhibits, addenda and attachments hereto (which are hereby incorporated herein by this reference) or other documents expressly incorporated by reference in this instrument. Any references to any covenant, condition, obligation, and/or undertaking “herein,” “hereunder,” or “pursuant hereto ” (or language of like import) means, refer to, and include the covenants, obligations, and undertakings existing pursuant to this instrument and any riders, exhibits, addenda, and attachments or other documents affixed to or expressly incorporated by reference in this instrument.

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e. As used in this Agreement, and as the context may require, the singular includes the plural and vice versa, and the masculine gender includes the feminine and vice versa.

Section 7.16 Entire Agreement, Waivers and Amendments
a. This Agreement may be executed in duplicate originals each of which is deemed to be an original. This Agreement will constitute the entire understanding and agreement of the parties.
b. This Agreement integrates all of the terms and conditions mentioned herein or incidental hereto, and supersedes all negotiations or previous agreements between the parties with respect to all or any part of the Property.
c. All waivers of the provisions of this Agreement must be in writing and signed by the appropriate authorities of the Authority or the Developer, and all amendments hereto must be in writing and signed by the appropriate authorities of the Authority and the Developer. This Agreement and any provisions hereof may be amended by mutual written agreement by the Developer and the Authority.

Section 7.17 Time for Acceptance of Agreement by Authority This Agreement, when executed by Developer and delivered to Authority, must be authorized, executed and delivered by Authority within thirty (30) days after date of signature by Developer or this Agreement may be terminated by Developer upon written notice to Authority.

Section 7.18 Effective Date
The effective date of this Agreement will be the date when this Agreement has been executed by Authority and that certain Affordable Housing Acquisition Loan Agreement (Including Home Program Requirements) by and between Authority and Developer dated for reference purposes as of October 1, 1996 , as amended by that certain First Amendment to Affordable Housing Acquisition Loan Agreement (Including Home Program Requirements) dated for reference purposes as of August 2, 1999 (collectively, the “ Original Agreement”) and all continuing operative documents entered in connection the Original Agreement have been terminated.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
[SIGNATURES ON FOLLOWING PAGE]
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Page S-1
IN WITNESS WHEREOF, Authority and Developer have signed this Agreement as of the dates set opposite their signatures.
“AUTHORITY”
Housing Authority of the
City of Glendale

Dated: _______________, 202__ By: _____________________________ Roubik Golanian
Executive Director

APPROVED AS TO FORM AND LEGALITY:

MICHAEL J. GARCIA, CITY ATTORNEY
General Counsel to the Authority

By:______________________________
Michael J. Garcia

APPROVED AS TO FORM:

KANE, BALLMER & BERKMAN
Special Counsel to the Authority

By: ___________________________
Susan Apy

[SIGNATURES CONTINUE ON NEXT PAGE]

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Page S-2
“DEVELOPER”

Verdugo Housing Corporation, a California nonprofit public benefit corporation

Dated: __________, 202__ By: ____________________________ Name: ______________________
Title: ______________________

Dated: __________, 202__ By: ____________________________ Name: ______________________
Title: ______________________
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ATTACHMENT NO. 1

LEGAL DESCRIPTION
[REDACTED]
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ATTACHMENT NO. 2

SCOPE OF DEVELOPMENT

The rehabilitation and development of the Project shall expand and significantly upgrade the existing facilities. The scope of work includes converting most of the existing 14 unit facility into 19 permanent supportive micro -studio apartments and upgrading infrastructure, including mechanical, electrical, and plumbing systems. Additionally, 3 ADA-compliant units shall be created, as well as new common areas such as case management and designated therapy rooms, a recreation room for children, a family lounge and classroom, and updated administrative offices.

The rehabilitation also includes necessary upgrades to the electrical system (including switchgear), HVAC systems, sewer, and plumbing infrastructure, as well as the installation of a new security gate and fence.

The rehabilitation and development of the Project shall be completed pursuant to Plans approved by the City and Authority, and shall include the following:

Downstairs:
2 new units
4 renovated units
Case management and therapy offices
Children’s Activity Room
Family Lounge & Classroom
Building upgrades: new electrical system and switchgear, HVAC, plumbing, and sewer

Upstairs
5 new units
8 renovated units

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ATTACHMENT NO. 3

SCHEDULE OF PERFORMANCE

Execution of Agreement. The Agreement is
executed and delivered to Developer by
Authority.

Within thirty (30) days after Developer delivers
a copy of the Agreement signed by Developer to
Authority.

Conditions to Closing. Developer shall satisfy all
conditions precedent to the Closing set forth in
Section 3.06 of the Agreement. .

Within _____ (___) days following the execution
of Agreement by Authority.

Commencement of Rehabilitation. Developer
shall commence rehabilitation and development
of the Property in accordance with the
Agreement.

Within thirty (30) days after the Closing.

Completion. Completion shall occur in
accordance with the Agreement.

Within eighteen (18) months after the Closing.

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ATTACHMENT NO. 4

PROJECT BUDGET
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PHASE 1+2

DESCRIPTION OF WORK SCHEDULE

OF VALUES
General Conditions $274,000.00
General Requirements $30,000.00
Division 2: Site Work $323,100.00
Division 3: Structural/Concrete $118,250.00
Division 5: Metals $64,500.00
Division 6: Wood, Plastics & Composite $420,418.00
Division 7: Thermal & Moisture Protection $111,263.00
Division 8: Openings $112,060.00
Division 9: Finishes $339,088.00
Division 10: Specialties $32,600.00
Division 12: Millwork and Finish $160,000.00
Division 21: Fire Suppression $301,150.00
Division 22: Plumbing $323,150.00
Division 23: Heating, Ventilation, AC $255,750.00
Division 26: Electrical $360,288.00
Division 27: Communication & Structured Cabling $45,425.00 Construction Subtotal $3,271,042.00
5% Contingency $163,552.10
Construction Cost $3,434,594.10
Permits and Soft Costs $180,000.00
Fixtures, Furnishings & Equipment $70,000.00
5% Owner Contingency $184,229.71
Overhead (10%) $386,882.38
Profit (10%) $425,570.62
GRAND TOTAL $4,681,276.80
Phase 1 + 2 Cost Proposal - June 2025
Attachment No. 4
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ATTACHMENT NO. 5

HOME REGULATORY AGREEMENT

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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
Attention: Director of Housing
and Community Development

SPACE ABOVE THIS LINE FOR RECORDER’S USE

APN: OFFICIAL BUSINESS
Document entitled to free
(Govt. Code §27383)

AGREEMENT CONTAINING HOME PROGRAM AND HOME ARP REQUIREMENTS (24 CFR § 92.504)

THE HOUSING AUTHORITY OF THE CITY OF GLENDALE, a public body, corporate and politic (“Authority”), and VERDUGO HOUSING CORPORATION, a California nonprofit public benefit corporation (“Developer”), in furtherance of Notice CPD-21-10 Requirements for the Use of Funds in the HOME -American Rescue Plan Program issued by the United States Department of Housing and Urban Development (“HUD”) on September 13, 2021, as it may be modified, revised, amended, or supplemented from time to time (“HOME ARP Notice ”), and regulations issued by HUD set forth in 24 CFR Part 92 (the “HOME Regulations”), hereby agree as follows as of this ____ day of ___________________, 202__.

WHEREAS, the Authority is responsible for administering the use of certain funds made available to the City of Glendale by HUD under the HOME Investment Partnerships Program (the “HOME Program”). At least fifteen percent (15%) of HOME Program funds must be set aside for specific activities to be undertaken by a special type of nonprofit called a Community Housing Development Organization (“CHDO”). Developer has been or will be certified as the CHDO for this project;

WHEREAS, the Authority is responsible for administering the use of certain funds allocated or reallocated by HUD which are appropriated under section 3205 of the American Rescue Plan Act of 2021 (P.L. 117 -2) (“ARP”) for the HOME Investment Partnerships Program DRAFT
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(“HOME”) to provide homelessness assistance and supportive services, also known as the HOME-American Rescue Plan or “HOME ARP”; and

WHEREAS, Developer is the fee owner of that certain real property (the “ Property”) located in the City of Glendale and more particularly described in Exhibit “A” which is attached hereto and incorporated herein by this reference; and
WHEREAS, the Authority and Developer have entered into that certain Affordable Housing Agreement dated as of December 2, 2025, as it may be amended or modified from time to time (the “AHA”), providing, among other things, for the rehabilitation and development of the Property which is improved with an existing 14 -unit, transitional affordable housing project for women and their families affected by domestic violence; and

WHEREAS, pursuant to the AHA, the Authority is providing a loan of HOME Program funds to Developer as the CHDO for the Project in the aggregate principal amount of Six Hundred Eighty-Three Thousand Three Hundred Sixty -One Dollars ($ 683,361) (the “ HOME CHDO Loan”) and a loan of HOME ARP Program Funds to Developer in the aggregate principal amount of Two Million One Hundred Thousand Dollars ($ 2,100,000) (the “ HOME ARP Loan”), for payment of a portion of the Development Costs of the Project; and

WHEREAS, the parties mutually desire to comply with the HOME ARP Notice and all applicable HOME Regulations.

NOW, THEREFORE, the Authority and Developer hereby agree as follows:

1. Term of this Agreement.

This Agreement will remain in effect for twenty (20) years following the date of recordation of this Agreement.

2. Affordable Housing Agreement.

The AHA, as it may be amended from time to time, including all the attachments appended thereto, is incorporated herein by this reference. Any capitalized term not otherwise defined herein will have the meaning ascribed to such term in the AHA.

3. Use of HOME Program and HOME ARP Program Funds. 24 CFR 92.504(c)(3)(i).

The HOME Program funds and HOME ARP Program Funds will be used exclusively for the payment of costs incurred in connection with the development of the Property and the rehabilitation thereon of the Project (sometimes referred to herein as the “ Project Activities”) in accordance with the AHA.

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a. Schedule. Subject to Force Majeure Delays, t he development of the Property will be accomplished within the time provided in the Schedule of Performance, which is attached to the AHA as Attachment No. 3.
b. Tasks and Budget. The tasks to be performed with the use of the HOME Program funds and ARP Program Funds are set forth in the Scope of Development and Project Budget, attached to the AHA as Attachment No. 2 and Attachment No. 4, respectively.

4. Affordability. 24 CFR 92.252; 92.504(c)(3)(ii); HOME ARP Notice. a. The Property and Project will be used exclusively as affordable housing as required by the AHA and this Agreement . Developer covenants and agrees (for itself, its successors, its assigns, and every successor in interest to the Property or any part thereof) that Developer, its successors and assigns will use the Property exclusively to provide affordable housing for Ver y Low Income HOME Tenants and the Qualifying Population, in conformance with this Agreement, including common areas associated therewith. No change in the use of the Property will be permitted without the prior written approval of the Authority. b. Developer covenants and agrees (for itself, its successors, its assigns, and every successor in interest to the Property or any part thereof) that five (5) HOME Units will be made available to and occupied by Very Low Income HOME Tenants at HOME Rents and fourteen (14) HOME ARP Units will made available to and occupied by a Qualifying Population at HOME ARP Rents, as set forth herein. The HOME Units and the HOME ARP Units must be operated in accordance with the following requirements:

i. One hundred percent ( 100%) of HOME ARP Program Funds used for the Project must benefit individuals and families in the Qualifying Population. ii. The HOME Units and the HOME ARP Units will be designated as floating units. Prior to lease-up of the Project, Developer must identify the street address and unit number of the units that will be operated as HOME Units and HOME ARP Units. Proposed changes to such units must be approved in advance by the Authority. Each substituted unit must be comparable in terms of size, features, and number of bedrooms to the originally designated HOME Units or HOME ARP Unit.
iii. Rent for the HOME Units shall not exceed HOME Rents. “ Home Rents” means maximum rent, including a reasonable utility allowance for utilities and services (excluding telephone), to be paid by HOME Unit households must meet either A. or B. of the following rent requirements:

A. The rent does not exceed the lesser of (1) 30 percent of the DRAFT
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annual income of a family whose income equals 50 percent of the median income for the area, as determined by HUD, with adjustments for smaller and larger families, as provided by HUD; or (2) the fair market rent for existing housing for comparable units in the area as established by HUD under 24 CFR 888.111; or

B. The rent does not exceed 30 percent of the family’s adjusted income. If the unit receives Federal or State project -based rental subsidy and the family pays as contribution toward rent not more than 30 percent of the family’s adjusted income, then the maximum rent (i.e., tenant contribution plus project -based rental subsidy) is the rent allowable under the Federal or State project-based rental subsidy program.

iv. Rent for the HOME ARP Units shall not exceed HOME ARP Rents. “HOME ARP Rents” means rent that meets the following requirements:

A. The rent may not exceed 30 percent of the annual income of a family whose income equals 50 percent of the median income for the area, as determined by HUD, with adjustments for smaller and larger families. HUD annually provides the HOME Rent Limits, that are also applicable to HOME ARP, which include average occupancy per unit and adjusted income assumptions. This is also known as the low HOME rent limit.

B. If a HOME ARP Unit receives federal or state project-based rental subsidy and the very low -income family pays as a contribution toward rent not more than 30 percent of the family’s adjusted income, then the maximum rent (i.e., tenant contribution plus project-based rental subsidy) is the rent allowable under the federal or state project -based rental subsidy program.

C. If a HOME ARP Unit household receives Tenant -Based Rental Assistance (TBRA), the rent is the rent permissible under the applicable rental assistance program (i.e., the tenant rental contribution plus the rental subsidy allowable under that rental assistance program).

D. The rent limits for HOME ARP Tenants include the rent plus the utility allowance established pursuant to Section VI.B.13.d of the HOME ARP Notice.

E. A qualifying household may not contribute to rent more than is affordable based on the determination of the household’s income.

F. A household that met the definition of the Qualifying Population at initial occupancy remains a qualifying household throughout their period of occupancy irrespective of changes in income or whether they continue to meet a Qualifying Population definition.

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v. Changes in Income and Over Income Households : A qualifying household whose annual income at the time of recertification is above 50 percent of median income for the area but below 80 percent of median income for the area must pay the rent specified in 24 CFR 92.252(a).

vi. The HOME rent limits published by HUD will include average occupancy per unit and adjusted income assumptions.

vii. HOME Rents shall not exceed the maximum rent limits provided by HUD at the date of initial occupancy and will be adjusted periodically thereafter in accordance with 24 CFR part 92.252(f) and (g). HOME ARP Rents shall not exceed the maximum rent limits provided in the HOME ARP Notice.

viii. Rents for the HOME Units and the HOME ARP Units will remain affordable pursuant to this Agreement for the term set forth in Section 1 of this Agreement.

ix. Prior to initial lease -up of the Project, Developer must submit to Authority for its approval the street address and unit number of the proposed HOME Units and the HOME ARP Units. Developer may not thereafter change the identity of the HOME Units or the HOME ARP Units without prior written approval by the Authority. Each substituted unit must be comparable to the originally designated HOME Units or HOME ARP Unit, as applicable, in terms of size, features, and number of bedrooms.

c. Failure to comply with the affordability requirements of this Agreement is an event of default under the terms of the HOME CHDO Loan and HOME ARP Loan. Pursuant to the HOME CHDO Note evidencing the HOME CHDO Loan and the HOME ARP Note evidencing the HOME ARP Loan, subject to the right to cure, the HOME CHDO Loan and the HOME ARP Loan will be due and payable immediately if the rents for HOME Units or the HOME ARP Units do not meet the affordability requirements of this Agreement. d. All income calculations required for income determinations must use the annual income definition in 24 CFR 5.609 in accordance with the requirements of 24 CFR

92.203(a)(1) or the HOME ARP Notice, as applicable.

5. Project Requirements. 24 CFR 92 Subpart F (92.250 - 92.258).

Developer will comply with all applicable requirements set forth in Subpart F of the HOME Regulations, as provided elsewhere in this Agreement and also including the following:

a. Maximum Per-Unit Subsidy. 24 CFR 92.250 . The amount of the HOME CHDO Loan may not exceed the per unit dollar limits established by HUD pursuant to section DRAFT
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221(d)(3)(ii) of the National Housing Act, as implemented in regulations issued by HUD, 24 CFR 221.514(b)(1) and (c). These provisions do not apply to this Project as to the HOME ARP Units. b. Property Standards. 24 CFR 92.251; 24 CFR 92.504 (c)(3)(iv). i. The development and maintenance of the Property will comply with the City’s building code and all other applicable local codes, rehabilitation standards, ordinances and zoning ordinances in effect at the time of project completion, and the Property will be decent, safe and sanitary will conform to the following codes that have been adopted by the City of Glendale: Uniform Building Code (UBC) as adopted by the State of California (California Building Code [Title 24 Part 2], National Electrical Code (NEC), Uniform Plumbing Code (UPC), Uniform Mechanical Code (UMC) and California Energy Code (CEC). ii. The Property will comply with the accessibility requirements at 24 CFR Part 8, which implements Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794) and, if applicable, the design and construction requirements at 24 CFR 100.205 for covered multifamily dwellings, as defined at 24 CFR 100.201, which implements the Fair Housing Act (42 U.S.C. 3601-3619).
iii. The Project will comply with the lead -based paint standards in Section 92.355. Housing assisted with HOME Program funds and HOME ARP Program funds constitutes HUD-associated housing for the purpose of Lead -Based Paint Poisoning Prevention Act (42 U.S.C. Section 4821, et seq.) and is, therefore, subject to 24 Code of Federal Regulations Part 35. Accordingly, and pursuant to Section 92.355 of the Regulations, Developer hereby agrees to and will be responsible for testing and abatement activities specified in the Lead-Based Paint Poisoning Prevention Act and the regulations set forth at 24 Code of Federal Regulations Part 25 with respect to the construction of the Property.
c. Tenant Protections. 24 CFR 92.253 . The Developer will comply with the tenant protection provisions of 24 CFR 92.253.
d. Termination of Tenancy. 24 CFR 253(c) . Developer, its successors or assigns, may not terminate the tenancy or refuse to renew the lease of a tenant, except (i) for serious or repeated violation of the terms and conditions of the lease; (ii) for violation of applicable federal, state, or local law; or (iii) for other good cause. Pursuant to 24 C.F.R. 92.253(c), any termination or refusal to renew must be preceded by not less than 30 days by the Developer’s service upon the tenant of a written notice specifying the grounds for the action. e. Converting Rental Units to Homeownership Units for Existing Tenants. 24 CFR 92.255. Conversion of rental units to homeownership units will not be permitted.

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f. Faith Based Activities. 24 CFR 92.257 . Developer will comply with the restrictions on the use of HOME Program funds and HOME ARP Program Funds for faith based activities as set forth in Section 92.257. Developer hereby certifies that HOME Program funds and HOME ARP Program Funds will not be used for the acquisition, construction or rehabilitation of structures to the extent that those structures are used for inherently religious activities. Developer will use the HOME Program funds and HOME ARP Program Funds for the construction of structures only to the extent the structures are used for conducting eligible activities under 24 CFR Part 92.
g. Affirmative Marketing Requirements. 24 CFR 92.351; 92.504(c)(3)(v) .

Prior to the initial lease-up of the Project, Developer will consult with and obtain the approval of the Authority in developing an affirmative marketing plan for renting the Units. The affirmative marketing plan must comply with the requirements of 24 CFR 92.351.

6. Records and Reports. 24 CFR 92.504(c)(3)(vi); 92.508; 92.61.

To assist the Authority in meeting its recordkeeping and reporting requirements, Developer will prepare, maintain and submit to the Authority, as appropriate, the following records and reports:

a. Records which demonstrate that the Property meets the property standard s described in Section 5.b;
b. Records which demonstrate, in accordance with 24 CFR 92.203 , that each family occupying a HOME Unit or a HOME ARP Unit is eligible in accordance with this Agreement;
c. Records which demonstrate that the Property meets the affordability and, if applicable, income targeting requirements of 24 CFR 92.252 for the Term of this Agreement.

Records will be kept for each family in a HOME Unit and in a HOME ARP Unit; d. Records which demonstrate that each lease for a HOME Unit and a HOME ARP Unit complies with the tenant protections specified in 24 CFR 92.253; e. Equal opportunity and fair housing records, including, as applicable:
i. data on the extent to which each racial and ethnic group and single- headed household (by gender of household head) have applied for, participated in, or benefitted from, any program or activity funded in whole or in part with HOME Program funds and HOME ARP Program Funds;
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ii. documentation of actions undertaken to meet the requirements of 24 CFR Part 135 which implements section 3 of the Housing Development Act of 1968, as amended (12 U.S.C. 1701u);
iii. documentation of actions taken to affirmatively further fair housing with respect to the Project;
f. Affirmative Marketing and MBE/WBE records, including, as applicable:
i. records documenting compliance with the affirmative marketing procedures and requirements of 24 CFR 92.351;
ii. documentation and data on the steps taken by Developer to implement the Authority’s outreach programs to minority -owned and female -owned businesses including data indicating the racial/ethnic or gender character of each business entity receiving a contract or subcontract of $25,000 or more paid, or to be paid, with HOME Program funds and HOME ARP Program Funds, the amount of the contract or subcontract, and documentation of the Developer’s affirmative steps to assure that minority business and women’s busin ess enterprises have an equal opportunity to obtain or compete for contracts and subcontracts as sources of supplies, equipment, construction and services;
iii. records which demonstrate compliance with the requirements of 24 CFR 92.353 relating to displacement, relocation and real property acquisition, including project occupancy lists identifying the name and address of all persons occupying or moving into the Property on and after the date on which Developer obtained site control; iv. records demonstrating compliance with the labor requirements of 24 CFR 92.354, including contract provisions and payroll records; g. Records which support any exceptions to the conflict of interest prohibition of 24 CFR 92.356.
h. Debarment and suspension certifications required by 24 CFR Parts 24 and

91. i. Records, data and documentation as required for the Authority’s performance of its reporting obligations under the Federal Funding Accountability and Transparency Act of 2006 (FFATA), to the full est extent applicable to the Project, which may include but is not necessarily limited to reporting of executive compensation received by executives of Developer and/or executives of Developer’s partners or members and/or executives of partners or members of any of Developer’s partners or members.

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7. Retention and Inspection of Records. 24 CFR 92.504(c) & (d). a. Developer will retain all books and records relevant to the Project for a minimum of five years after the project completion date, except that records of individual tenant income verifications, project rents and project inspections will be retained for the most recent five year period until five years after the affordability period terminates. If any litigation, claim, negotiation, audit, monitoring, inspection, or other action has been started before the expiration of the required record retention period, records must be retained until the completion of the action and resolution of all issues which arise from it, or until the end of the required period, whichever is later.
b. The Authority, HUD, and the Comptroller General of the United States, and any of their representatives, will have the right of access to any pertinent books, documents, papers or other records of the Developer, in order to make audits, examinations, excerpts and transcripts.

8. Enforcement of the Agreement. 24 CFR 92.504(c)(3)(vii).

The AHA and all of its attachments, will be enforceable by the Authority in accordance with the terms thereof. Each of the AHA, this Agreement, the HOME CHDO Note, the HOME ARP Note, and the Authority Deed of Trust provide a means of enforcement if the Developer is in breach of its obligations hereunder and thereunder, including liens on the Property, deed restrictions and covenants running with the land. Developer hereby agrees that specific enforcement of its obligations contained herein is the only means by which the Authority may fully obtain the benefits of this Agreement, and Developer therefore agrees to the imposition of the remedy of specific performance against it in the case of uncured default by Developer hereunder. Provided however, the rights and remedies of the Agency are cumulative, and the exercise by the Agency of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other def ault by Owner. Failure to comply with the requirements of this Agreement is an event of default under the terms of the HOME CHDO Note, the HOME ARP Note, and the Authority Deed of Trust. Notwithstanding anything to the contrary stated herein, a breach of this Agreement by Developer or its successors and assigns will in no way defeat, invalidate or impair the obligation or priority of any mortgage or deed of trust encumbering the Property.

Failure or delay by Developer to perform a material term or provision of this Agreement constitutes a default under this Agreement. The Authority will give written notice of default to Developer at the address set forth below, 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. 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 DRAFT
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which it may deem necessary to protect, assert, or enforce such rights or remedies.

If a monetary event of default occurs under the terms of this Agreement, prior to exercising its remedies hereunder, the Authority will give Developer written notice of such default. Developer will have ten (10) calendar days after the notice of default is received or deemed received to cure the default prior to exercise of remedies by the Authority under this Agreement.

If a non-monetary event of default occurs under the terms of this Agreement, prior to exercising its remedies hereunder, the Authority will give Developer written 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, Developer will have such period to effect a cure prior to exercise of remedies by the Authority under this Agreement. If the default is such that it is not reasonably capable of being cured within thirty (30) days, and Developer (i) initiates corrective action within said period, and (ii) diligently and in good faith works to effect a cure as soon as possible, then Developer will have such additional time as is reasonably necessary to cure the default prior to the Authority’s exercise of remedies. In no event will Authority be precluded from exercising remedies if its security becomes or is about to become materially jeopardi zed 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.

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 messeng er 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 Developer; 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

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With a copy to: CITY OF GLENDALE
City Attorney’s Office
613 E. Broadway
Suite 220
Glendale, California 91206
Attention: City Attorney

To Developer:

Verdugo Housing Corporation
221 E. Walnut St.

Suite 112
Pasadena, CA 91101

9. Requests for Disbursement of Funds. 24 CFR 92.504(c)(3)(viii).

Developer will not request disbursement of HOME Program funds or HOME ARP Program Funds until the funds are needed to pay eligible costs. The amount of each disbursement request will be limited to the amount needed. The Authority will have the right to disapprove any request if the Authority determines the request is for an ineligible item or is otherwise not in compliance with or inconsistent with the AHA and this Agreement.

10. Duration of Agreement. 24 CFR 92.504(c)(3)(ix).

The Agreement will remain in effect for the period of affordability set forth in Section 1 of this Agreement.

11. Other Program Requirements. 24 CFR 92, Subpart H (92.350 - 92.358).

Developer will comply with all applicable federal requirements set forth in Subpart H of the HOME regulations, including the following:

a. Other Federal Requirements and Nondiscrimination. 24 CFR 92.350 .

Developer acknowledges that 24 CFR 92.350 provides that the Federal requirements set forth in 24 CFR Part 5, subpart A, are applicable to participants in the HOME Program and the HOME ARP Program, and that these Federal requirements include the following:
i. Nondiscrimination and Equal Opportunity.
ii. Civil Rights, Fair Housing, and Age and Disability Discrimination Acts Assurances: During the performance of the AHA, Developer will assure that no otherwise qualified person will be excluded from participation or employment, denied program benefits, or DRAFT
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be subjected to discrimination based on race, color, national origin, sex, actual or perceived sexual orientation, gender identity, marital status, age, handicap, religion, religious preference or source of income (including but not limited to Section 8 Rental Assistance, Temporary Assistance for Needy Families (TANF), Supplemental Security Income (SSI), Social Security Disability Insurance (SSDI) or earnings from seasonal employment), under any program or activity funded by this Agreement, as required by s tate law, the Fair Housing Act (42 U.S.C. 3601 -19) and implementing regulations at 24 CFR part 100 et seq., Executive Order 11063 as amended by Executive Order 12259 (3 CFR, 1959-1963 Comp., p. 652 and 3 CFR, 1980 Comp., p. 307) (Equal Opportunity in Housing Programs) and implementing regulations at 24 CFR part 107, title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d- 2000d-4) (Nondiscrimination in Federally Assisted Programs) and implementing regulations at 24 CFR part 1, the Age Discrimination Act o f 1975 (42 U.S.C. 6101 -6107) and implementing regulations at 24 CFR part 146, section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794) and implementing regulations at 24 CFR part 8, Title VI of the Civil Rights Act of 1964, the Fair Housing Act (42 U.S.C. 3601-20) and all implementing regulations, and the Age Discrimination Act of 1975, and all implementing regulations. iii. Training, Employment, and Contracting Opportunities Assurance of Compliance: The Project Activities to be performed under the Agreement are on a project assisted under a program providing direct federal financial assistance from HUD which is subject to the requirements of Section 3 of the Housing and Urban Development Act of 1968, as amended, 12 U.S.C. 1701u (“Section 3”), and the regulations issued by HUD to implement Section 3 (24 CFR Part 135) (the “ Section 3 Regulations ”). Pursuant to 24 CFR 135.3, the requirements of the Section 3 Regulations apply to the recipient of such financial assistance only where the amount of federal assistance exceeds $200,000, and apply to a contractor or subcontractor of such recipient only where the amount of assistance ex ceeds $200,000 and the amount of the contract or subcontract exceeds $100,000. Developer will provide, to the greatest extent feasible, training, employment and contracting opportunities generated by the financial assistance to low- and very- low income persons and business concerns owned by low- or very-low income persons, or which employ low- or very-low income persons.
iv. MBE/WBE Affir mative Action Outreach Program: Developer hereby agrees to comply with the Authority’s minority and women business outreach program in accordance with Executive Order 11625, as amended by Executive Order 12007 (3 CFR, 1971 - 1975 Comp., p. 616 and 3 CFR, 1977 Comp., p. 139) (Minority Business Enterprises); Executive Order 12432 (3 CFR, 1983 Comp., p. 198) (Minority Business Enterprise Development); and Executive Order 12138, as amended by Executive Order 12608 (3 CFR, 1977 Comp., p. 393 and 3 CFR, 1987 Comp., p. 245) (Women’s Business Enterprise). v. Disclosure Requirements. The disclosure requirements and prohibitions of 31 U.S.C. 1352 and implementing regulations at 24 CFR Part 87; and the DRAFT
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requirements for funding competitions established by the Housing and Urban Development Reform Act of 1989 (42 U.S.C. 3531 et seq.).
vi. Debarred, Suspended or Ineligible Contractors. The prohibitions at 24 CFR Part 24 on the use of debarred, suspended or ineligible contractors. vii. Drug-free Workplace. The Drug -Free Workplace Act of 1988 (41 U.S.C. 701 et seq.) and HUD’s implementing regulations at 24 CFR Part 24. b. Affirmative Marketing. 24 CFR 92.351 . Developer will comply with the Authority’s Affirmative Marketing requirements.
c. Displacement, Relocation and Acquisition. 24 CFR 92.353. Developer will carry out relocation activities in conformance with the relocation plan approved by the Authority and will certify that it has complied with the federal relocation, displacement and acquisition rules governing the HOME Program and the HOME ARP Program, which are contained in the Uniform Relocation Act, 49 CFR Part 24, and applicable program regulations. 24 CFR Section 92.353 requires that tenants who are displaced from housing units demolished or converted as a result of HOME Program or HOME ARP-funded activities be provided with relocation assistance. d. Labor. 24 CFR 92.354. The Project will comply with the labor requirements in 92.354.
e. Lead-based Paint. 24 CFR 92.355. The Property will comply with the lead- based paint standards in 92.355, as provided in Section 5.b, above. f. Conflict of Interest. 24 CFR 92.356.
i. Interest of Employees, Officers and Officials. No employee, agent, consultant, officer or elected official or appointed official of the Authority, or employee, agent, consultant or officer of Developer, and no other public official of the Authority who exercises any functions or responsibilities with respect to the activities assisted with HOME Program funds or HOME ARP Program Funds or who are in a position to participate in a decision making process or gain inside information with regard to these activit ies, during their tenure and for one year thereafter, may obtain a financial interest or benefit from a HOME Program or HOME ARP assisted activity or have an interest in any contract or subcontract, or agreement with respect thereto, or the proceeds thereunder, either for themselves or those with whom they have family or business ties. Developer will incorporate, or cause to be incorporated, in all such contractors or subcontracts a provision prohibiting such interest pursuant to the purposes of this Secti on.

Fulfillment of “sweat equity” obligations as defined in Section 8201 of the HOME regulations will not be considered a violation of this prohibition.

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ii. Prohibition Against Occupying HOME Units and HOME ARP Units. No officer, employee, agent, official or consultant of Developer may occupy a HOME Unit or a HOME ARP Unit.
iii. Consultant Activities. 24 CFR 92.358. No person providing consultant services in an employer-employee type relationship will receive more than a reasonable rate of compensation for personal services paid for with HOME Program funds or HOME ARP Program Funds. In no event, however, will such compensation exceed the limits in effect under the provisions of any applicable statute (e.g., annual HUD appropriations acts which have set the limit at the equivalent of the daily rate paid for Level IV of the Executive Schedule). Such services will be evidenced by written agreements between the parties which detail the responsibilities, standards and compensation. Consultant services provided under an independent contractor relationship are not subject to the compensation limitation of Level IV of the Executive Schedule.

12. Lobbying Prohibition. 24 CFR 91.225.

Developer hereby certifies to the Authority, under penalty of perjury, under the terms of applicable federal law, that at all applicable times before, during and after the term of this Agreement:

a. No Federal appropriated funds have been paid or will be paid, by or on behalf of it, to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with the awarding of any Federal contract, the making of any Federal grant, the making of any Federal loan, the entering into of any cooperative agreement, and the extension, continuation, renewal, amendment, or modification of any Federal contract, grant, loan, or cooperative agreement; and
b. If any funds other than Federal appropriated funds have been paid or will be paid to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with this Federal contract, grant, lo an, or cooperative agreement, Developer will complete and submit Standard Form-LLL, “Disclosure Form to Report Lobbying,” in accordance with its instructions; and
c. Developer will require that the above stated language in paragraphs a. and b. be included in the award documents for all subawards at all tiers, including subcontracts, subgrants, loans, contracts, and cooperative agreements concerning the subject matter of this Agreement; and
d. Further, Developer and all subawards at all tiers, including subcontracts, subgrants, loans, contracts, and cooperative agreements concerning the subject matter of this Agreement, at DRAFT
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all times, will certify compliance with the provisions of 31 U.S.C. §1352 and any and all terms and conditions of the Byrd Anti-Lobbying Amendment, as amended from time to time.

13. Execution in Counterparts.

This Agreement may be executed by each party on a separate signature page, and when the executed signature pages are combined, will constitute one single instrument.

[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK; SIGNATURES ON FOLLOWING PAGES]
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Page S-1
IN WITNESS WHEREOF, the Authority and the Developer have executed this Agreement.

THE HOUSING AUTHORITY OF THE

CITY OF GLENDALE
Dated:_________________, 202___ By: ____________________________ Roubik Golanian
Executive Director
APPROVED AS TO FORM AND LEGALITY:

MICHAEL J. GARCIA, CITY ATTORNEY
General Counsel to the Authority
By: ________________________________
Michael J. Garcia
APPROVED AS TO FORM:

KANE, BALLMER & BERKMAN
Special Counsel to the Authority
By: ___________________________
Susan Apy
[SIGNATURES CONTINUE ON FOLLOWING PAGE]
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Page S-2

“DEVELOPER”

Verdugo Housing Corporation, a California nonprofit public benefit corporation

Dated: __________, 202__ By: ____________________________ Name: ______________________
Title: ______________________

Dated: __________, 202__ By: ____________________________ Name: ______________________
Title: ______________________

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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.

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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.

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Exhibit A

LEGAL DESCRIPTION OF PROPERTY
[REDACTED]
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Exhibit A – Legal Description
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Exhibit B – Affordability Requirements
Exhibit B
Affordability Requirements
(24 CFR 92.252; 92.504(c)(3)(iii))
Developer will submit its rent schedule and utility allowances thirty (30) days prior to initial rental of the HOME Units or the HOME ARP Units and on an annual basis thereafter. The Authority will review and approve or disapprove the proposed rent schedule and utility allowances for compliance with the maximum rent limitations.

The Authority will provide updated HUD rent limits to Developer as they become available.

Developer will be responsible for ensuring that the current operative HOME and HOME ARP rent limits in effect will be used to determine conformance with HOME and HOME ARP affordability requirements and that each tenant recertification is conducted using current HOME and HOME ARP rent limits to assure compliance with HOME Regulations and the HOME ARP Notice.

Rental rate adjustments will occur upon annual lease renewal. Any increase in rents for HOME Units or HOME ARP Units is subject to the provisions of existing leases, including the provision that rents may not be adjusted until leases are renewed. Developer must provide tenants with not less than thirty (30) days prior written notice before implementing any increase in rents.

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ATTACHMENT NO. 6

HOME CHDO NOTE

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PROMISSORY NOTE

TO THE HOUSING AUTHORITY

OF THE CITY OF GLENDALE
(HOME PROGRAM FUNDS - CHDO)
3% Interest Glendale, California
$683,361 ______________, 202__
FOR VALUE RECEIVED, VERDUGO HOUSING CORPORATION, a California nonprofit public benefit corporation (“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 Six Hundred Eighty-Three Thousand Three Hundred Sixty- One Dollars ($683,361), being the principal amount of the Authority’s loan of HOME Program funds (the “HOME CHDO Loan”). This Note is given pursuant to that certain Affordable Housing Agreement dated as of December 2, 2025 between Borrower and the Authority, as it may be amended from time to time (the “Affordable Housing Agreement”) and evidences the HOME CHDO Loan to Borrower, which provides part of the financing for the rehabilitation and development of that certain real property 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 and HOME ARP Requirements, as it may be amended from time to time (“HOME Regulatory Agreement”) and a Deed of Trust, Security Agreement and Fixture Filing (With Assignment of Rents) , as it may be amended from time to time (“Authority Deed of Trust”). 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:
“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 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 CHDO Loan evidenced hereby.

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

“HOME ARP Loan” means the loan made by the Authority to Borrower in the maximum amount of $2,100,000, which is evidenced by the HOME ARP Note and secured by the Authority Deed of Trust.

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

“HOME CHDO 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 $683,361, which is evidenced by this Note and secured by the Authority Deed of Trust.

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

“Net Proceeds” means the proceeds of a sale, transfer or refinancing, less the customary and reasonable costs of the transaction which costs are subject to the prior written approval of the Authority Executive Director or designee.

“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. Property and other taxes and assessments imposed on the Project; b. General administrative expenses including but not limited to advertising and marketing, security services and systems and similar customary administrative expenses;
c. 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; d. Funds deposited into a replacement reserve fund in the amount of $ _____ per unit per year to be increased at an annual rate of three percent (3%); e. Funds deposited into an operating reserve fund in such reasonable amounts as are required by the Authority;
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g. License or certificate of occupancy fees required for operation of the Project; h. Premiums for property damage and liability insurance; i. Cable television, satellite, and similar services;
j. Recreational amenities, supplies, programs, and services; k. Purchase, repair, servicing and installation of appliances, equipment, fixtures and furnishings (other than from reserves); and
l. Fees and expenses of accountants, attorneys, consultants and other professionals, including annual audits and tax return preparation costs payable to a third party.

Operating Expenses will not include the following: depreciation, amortization, depletion or other non-cash expenses, or any amount expended from a reserve account. Operating Expenses will be subject to the reasonable approval of the Authority.

“Residual Receipts” means the Revenue minus the Operating Expenses, calculat ed on a 12-month basis. 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 re ntal agreements; proceeds from vending an d 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. “Revenue” will not include tenants’ security deposits, 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 thirtieth (30th) anniversary of the date of this Note.

“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 Authority for the repayment of the HOME CHDO Loan. None of the funds provided pursuant to the HOME CHDO 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 3% simple interest. Interest will begin to accrue on the date of each disbursement of the HOME CHDO Loan.

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 Net Proceeds as 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 Project or any portion thereof or interest therein is sold, transferred, assigned , hypothecated, 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 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 CHDO Loan from the Authority’s Share of Residual Receipts, as follows:
a. Annually, not later than the thirtieth (30th) day of April, beginning with the April 30, 2027, 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 year beginning on the later of (i) the date of this Note or (ii) January 1, 2026 and ending on December 31, 2026 (which may be a partial year depending on the date of this Note). 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 DRAFT
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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 and the HOME ARP Note will be fifty percent (50%). The Authority’s Share of Residual Receipts will be applied to the HOME CHDO Note and the HOME ARP Note as follows: 25% will be applied to the HOME CHDO Note and 75% will be applied to the HOME ARP Note. The HOME CHDO Note shall have priority over the HOME ARP 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. To induce Authority to make the HOME CHDO Loan evidenced hereby, Borrower covenants and agrees that if at any time Borrower obtains any Net Proceeds, Borrower will apply the Net Proceeds first to pay previously incurred and unpaid Operating Expenses (as defined above) still owing, then, one hundred percent (100%) of the balance will be paid to the Authority to pay accrued interest on, and then reduce the principal amount of , the HOME CHDO Loan and the HOME ARP Loan, with 25% repayment to the HOME CHDO Loan and 75% repayment to the HOME ARP Loan.

11. Prohibitions on Transfer.
a. Prior to the repayment in full of the HOME CHDO 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 or Project (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 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, this Note , the HOME ARP Note, and the Environmental Indemnity . A proposed transferee, 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 bene fit of the Authority must expressly assume all of Borrower’s obligations under the Affordable Housing Agreement, the HOME Regulatory Agreement, this Note, the HOME ARP Note, and the Environmental Indemnity 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 DRAFT
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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, this Note, the HOME ARP Note, or the Environmental Indemnity. d. In the event of a Transfer prior to the time the HOME CHDO Loan is paid in full without the prior written consent of the Authority, the remaining principal balance of the HOME CHDO 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 execu tion 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.

12. The HOME CHDO 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.

13. Subject to the provisions and limitations of this Section 13, the obligation to repay the HOME CHDO Loan is a nonrecourse obligation of the Borrower. Borrower will not have any personal liability for repayment of the loan, except as provided in this Section 13. The sole recourse of Authority will be the exercise of its rights against the Property and other security for the HOME CHDO 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 d eficiency 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 DRAFT
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deposits, insurance proceeds, condemnation awards or other monies or other collateral o r 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 principals, shareholders, partners or its successors and assigns received rentals, other revenues, or other payments or proceeds in respect of the m ortgaged 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:
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;
b. damages, costs and expenses incurred by Authority as a result of misappropriation of funds provided for the payment of 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).

14. 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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15. 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 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.

16. Defaults and Remedies.
a. Subject to the extensions of time set forth in Section 17, and subject to the further provisions of this Secti on 16, failure or delay by Borrower to perform a material term or provision of this Note, the Authority Deed of Trust, the Affordable Housing Agreement , the HOME Regulatory Agreement, 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 at the address set forth below, 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.
d. If a monetary event of default occurs under the terms of this Note or the Authority Deed of Trust, 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 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 impaired 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 other obligations secured by a deed of trust on the Property, prior to exercising its remedies hereunder or thereunder, the Authority will give Borrower written 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) DRAFT
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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. In no event will Authority be precluded from exercising remedies if its security becomes or is about to become materially je opardized 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. Postal 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 p repaid, 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
With a copy to: CITY OF GLENDALE
City Attorney’s Office
613 E. Broadway
Suite 220
Glendale, California 91206
Attention: City Attorney
To Borrower:

Verdugo Housing Corporation
221 E. Walnut St.

Suite 112
Pasadena, CA 91101

17. 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, epidemics, quarantine restrictions, freight embargoes, lack of transportation, governmental restrictions or priority, litigation, unusually severe weather, inability to secure necessary labor, mate rial or tools, delays of any contractor, sub -contractor or supplier, DRAFT
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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 event s 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 denie d by either party in its sole discretion.

18. 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.

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

20. 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.

21. 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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S-1

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

BORROWER

Verdugo Housing Corporation, a California nonprofit
public benefit corporation

By: ____________________________
Name: ______________________
Title: ______________________

By: ____________________________
Name: ______________________
Title: ______________________

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ATTACHMENT NO. 7

HOME ARP NOTE

[behind this page]
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PROMISSORY NOTE

TO THE HOUSING AUTHORITY

OF THE CITY OF GLENDALE
(HOME ARP PROGRAM FUNDS)
3% Interest Glendale, California
$2,100,000 ______________, 202__
FOR VALUE RECEIVED, VERDUGO HOUSING CORPORATION, a California nonprofit public benefit corporation (“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 Two Million One Hundred Thousand Dollars ($2,100,000), being the principal amount of the Authority’s loan of HOME Program funds (the “HOME ARP Loan”). This Note is given pursuant to that certain Affordable Housing Agreement dated as of December 2, 2025, between Borrower and the Authority, as it may be amended from time to time (the “Affordable Housing Agreement”) and evidences the HOME ARP Loan to Borrower, which provides part of the financing for the rehabilitation and development of that certain real property 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 and HOME ARP Requirements, as it may be amended from time to time (“HOME Regulatory Agreement”) and a Deed of Trust, Security Agreement and Fixture Filing (With Assignment of Rents) , as it may be amended from time to time (“Authority Deed of Trust ”). 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:
“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 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 ARP Loan evidenced hereby.

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

“HOME ARP 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 $2,100,000, which is evidenced by this Note and secured by the Authority Deed of Trust.

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

“HOME CHDO Loan” means the loan made by the Authority to Borrower in the maximum amount of $683,361, which is evidenced by the HOME CHDO Note and secured by the Authority Deed of Trust.

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

“Net Proceeds” means the proceeds of a sale, transfer or refinancing, less the customary and reasonable costs of the transaction which costs are subject to the prior written approval of the Authority Executive Director or designee.

“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. Property and other taxes and assessments imposed on the Project; b. General administrative expenses including but not limited to advertising and marketing, security services and systems and similar customary administrative expenses;
c. 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; d. Funds deposited into a replacement reserve fund in the amount of $ _____ per unit per year to be increased at an annual rate of three percent (3%); e. Funds deposited into an operating reserve fund in such reasonable amounts as are required by the Authority;
f. Utility services not paid for directly or reimbursed by tenants, including but not limited to water, sewer, trash collection, gas and electricity; DRAFT
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g. License or certificate of occupancy fees required for operation of the Project; h. Premiums for property damage and liability insurance; i. Cable television, satellite, and similar services;
j. Recreational amenities, supplies, programs, and services; k. Purchase, repair, servicing and installation of appliances, equipment, fixtures and furnishings (other than from reserves); and
l. Fees and expenses of accountants, attorneys, consultants and other professionals, including annual audits and tax return preparation costs payable to a third party.

Operating Expenses will not include the following: depreciation, amortization, depletion or other non-cash expenses, or any amount expended from a reserve account. Operating Expenses will be subject to the reasonable approval of the Authority.

“Residual Receipts” means the Revenue minus the Operating Expenses, calculat ed on a 12-month basis. 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 re ntal agreements; proceeds from vending an d 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. “Revenue” will not include tenants’ security deposits, 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 thirtieth (30th) anniversary of the date of this Note.

“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 Authority for the repayment of the HOME ARP Loan. None of the funds provided pursuant to the HOME ARP 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 3% simple interest. Interest will begin to accrue on the date of each disbursement of the HOME ARP Loan.

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 Net Proceeds as 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 Project or any portion thereof or interest therein is sold, transferred, assigned , hypothecated, 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 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 ARP Loan from the Authority’s Share of Residual Receipts, as follows:
a. Annually, not later than the thirtieth (30th) day of April, beginning with the April 30, 2027, 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 year beginning on the later of (i) the date of this Note or (ii) January 1, 2026 and ending on December 31, 2026 (which may be a partial year depending on the date of this Note). 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 DRAFT
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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 and the HOME CHDO Note will be fifty percent (50%). The Authority’s Share of Residual Receipts will be applied to the HOME CHDO Note and the HOME ARP Note as follows: 25% will be applied to the HOME CHDO Note and 75% will be applied to the HOME ARP Note. The HOME CHDO Note shall have priority over the HOME ARP 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. To induce Authority to make the HOME ARP Loan evidenced hereby, Borrower covenants and agrees that if at any time Borrower obtains any Net Proceeds, Borrower will apply the Net Proceeds first to pay previously incurred and unpaid Operating Expenses (as defined above) still owing, then, one hundred percent (100%) of the balance will be paid to the Authority to pay accrued interest on, and then reduce the principal amount of , the HOME CHDO Loan and the HOME ARP Loan, with 25% repayment to the HOME CHDO Loan a nd 75% repayment to the HOME ARP Loan.

11. Prohibitions on Transfer.
a. Prior to the repayment in full of the HOME ARP 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 or Project (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 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, this Note, the HOME CHDO Note, and the Environmental Indemnity . A proposed transferee, 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 ben efit of the Authority must expressly assume all of Borrower’s obligations under the Affordable Housing Agreement, the HOME Regulatory Agreement, this Note , the HOME CHDO Note, and the Environmental Indemnity 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 DRAFT
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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, this Note , the HOME CHDO Note, or the Environmental Indemnity.
d. In the event of a Transfer prior to the time the HOME ARP Loan is paid in full without the prior written consent of the Authority, the remaining principal balance of the HOME ARP 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 execu tion 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.

12. The HOME ARP Loan is funded from the Authority’s HOME ARP 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.

13. Subject to the provisions and limitations of this Section 13, the obligation to repay the HOME ARP Loan is a nonrecourse obligation of the Borrower. Borrower will not have any personal liability for repayment of the loan, except as provided in this Section 13. The sole recourse of Authority will be the exercise of its rights against the Property and other security for the HOME ARP 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 de ficiency 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 DRAFT
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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 o r 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 principals, shareholders, partners or its successors and assigns received rentals, other revenues, or other payments or proceeds in respect of the m ortgaged Property after the occurrence of such default, which rentals, other revenues, or other pay ments 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 p aragraph, Authority may recover directly from Borrower or from any other party:
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;
b. damages, costs and expenses incurred by Authority as a result of misappropriation of funds provided for the payment of 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).

14. 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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15. 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 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.

16. Defaults and Remedies.
a. Subject to the extensions of time set forth in Section 17, and subject to the further provisions of this Secti on 16, failure or delay by Borrower to perform a material term or provision of this Note, the Authority Deed of Trust, the Affordable Housing Agreement , the HOME Regulatory Agreement, 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 at the address set forth below, 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.
d. If a monetary event of default occurs under the terms of this Note or the Authority Deed of Trust, 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 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 impaired 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 other obligations secured by a deed of trust on the Property, prior to exercising its remedies hereunder or thereunder, the Authority will give Borrower written notice of such default. If the default is reasonably capable of being cured within thirty (30) calendar days after such no tice 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) DRAFT
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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. In no event will Authority be precluded from exercising remedies if its security becomes or is about to become materially je opardized 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. Postal 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 p repaid, 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
With a copy to: CITY OF GLENDALE
City Attorney’s Office
613 E. Broadway
Suite 220
Glendale, California 91206
Attention: City Attorney
To Borrower:

Verdugo Housing Corporation
221 E. Walnut St.

Suite 112
Pasadena, CA 91101

17. 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, epidemics, quarantine restrictions, freight embargoes, lack of transportation, governmental restrictions or priority, litigation, unusually severe weather, inability to secure necessary labor, mate rial or tools, delays of any contractor, sub -contractor or supplier, DRAFT
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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.

18. 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.

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

20. 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.

21. 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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S-1

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

BORROWER

Verdugo Housing Corporation, a California nonprofit
public benefit corporation

By: ____________________________
Name: ______________________
Title: ______________________

By: ____________________________
Name: ______________________
Title: ______________________

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ATTACHMENT NO. 8

AUTHORITY DEED OF TRUST

[behind this page]
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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:

Document entitled to free
recording per Government
Code Section 27383

DEED OF TRUST,

SECURITY AGREEMENT AND FIXTURE FILING
(WITH ASSIGNMENT OF RENTS)
(Hamilton Court)
This Deed of Trust, Security Agreement and Fixture Filing (with Assignment of Rents) is made as of __________________, 2 02___ by VERDUGO HOUSING CORPORATION, a California nonprofit public benefit corporation (“Trustor”) (whose address is 221 E. Walnut St., Suite 112, Pasadena, CA 91101 ), to _________________, a California corporation (“Trustee”), for the benefit of THE HOUSING AUTHORITY OF THE CITY OF GLENDALE, a public body corporate and politic (“ Beneficiary”), whose address is 14 1 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”); DRAFT
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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, royalties 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 present 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 ownershi p, use, development, construction, ma intenance, 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 perso nal property 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, right s 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) perm its, approvals and other governmental authorizations, (ii) improvement plans and specifications and architectural drawings, (iii) agreements with contractors, 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) cla ims, 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 su ch agreements, (viii) reserves, deposits, bonds, deferred payments, refunds, rebates, discounts, cost savings, escrow proceeds, sale DRAFT
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proceeds and other rights 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 of 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 $ 683,361, executed by Trustor (“Borrower” therein) of even date herewith , as it may be amended or modified from time to time (the “HOME CHDO Note”);
(b) a promissory note in the original principal amount of $2,100,000, executed by Trustor (“Borrower” therein) of even date herewith , as it may be amended or modified from time to time (the “HOME ARP Note”) (the HOME CHDO Note and the HOME ARP Note may collectively be referred to herein as the “Notes”); (c) the Affordable Housing Agreement dated as of December 2, 2025 between Trustor (“Developer” therein) and Beneficiary (“Authority” therein), as it may be amended, implemented, or modified from time to time (the “Affordable Housing Agreement”); and
(d) the Agreement Containing HOME Program and HOME ARP Requirements between Trustor (“Developer” therein) and Beneficiary (“Authority” therein) , recorded concurrently herewith, as it may be amended, implemented, or modified from time to time (“HOME Regulatory Agreement”); and
(2) payment of indebtedness of the Trustor to the Beneficiary in the principal sum of $683,361 or so much thereof as will be advanced, evidenced by the HOME CHDO Note DRAFT
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secured hereby, with interest, according to the terms of the HOME CHDO Note secured hereby; and
(3) payment of indebtedness of the Trustor to the Beneficiary in the principal sum of $2,100,000 or so much thereof as will be advanced, evidenced by the HOME ARP Note secured hereby, with interest, according to the terms of the HOME ARP 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 HOME Regulatory Agreement, the HOME CHDO Note, and the HOME ARP Note, 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 ho wever 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 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 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;
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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. Suc h 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 levy so long as Trustor is contesting the le gality 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, subject 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 alteration 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;

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 o r 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, DRAFT
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may pay necessary expenses, employ counsel, and pay his reasonable fees. Notwithstanding the 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, conditio ns, 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 otherwise approved by Beneficiary, and fur ther 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 said 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 Trustor 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;

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 promulgated, 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; and

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 DRAFT
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obligation secured by this Deed of Trust as provided by Section 2954, Article 2, Chapter 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, Beneficiary 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 commence, 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 pr operty 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. All such compensation, awards, damages, rights of action 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 Beneficiary. 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 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 HOME CHDO Loan and the HOME ARP Loan and expiration of the terms of 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 DRAFT
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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 necessary and adequate as may be reasonably determined by the Beneficiary, to fulfill the obligations undertaken by Trustor in the Affordable Housing Agreement, the Notes, the HOME Regulatory Agreement, and the Environmental Indemnity. Any such proposed transferee, by instrument in writing satisfactory 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 Housing Agreement , the Notes, the HOME Regulatory Agreement, and the Environmental Indemnity, 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 Beneficiary 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 Beneficiary, 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 , the Notes, the HOME Regulatory Agreement, or the Environmental Indemnity. d. In the event of a Transfer without the prior written consent of the Beneficiary prior to the time the HOME CHDO Loan and the HOME ARP Loan are paid in full or prior to the expiration of term of the HOME Regulatory Agreement , the net proceeds 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 HOME CHDO Loan and the HOME ARP Loan, , with 25% repayment to the HOME CHDO Loan and 75% repayment to the HOME ARP 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, 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 Affordable Housing Agreement.
(3) “Transfer” will not include any of the following Permitted Transfers , provided Trustor retains day-to-day control over management of the Property and Improvements:

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(a) The leasing for occupancy of all or any part of the Improvements on the Property, in accordance with the Affordable Housing Agreement and the HOME Regulatory Agreement;
(b) The granting of easements or permits to facilitate the development of the Property in accordance with the Affordable Housing Agreement; or (c) Any transfer approved in writing by Beneficiary’s Executive Director or designee, at his or her sole discretion.
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 including 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 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, whi ch, 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;
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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 T rust 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:

Verdugo Housing Corporation
221 E. Walnut St.

Suite 112
Pasadena, CA 91101

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 regarding 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 rehabilitation and development of the Project as set forth in the Affordable DRAFT
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Housing Agreement, and the Project and Property are subject to the restrictions 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. 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 portion 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; and

32. (a) 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.
(b) Delay in giving any 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 remedies 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 any remedies hereunder, Beneficiary will give Trustor written notice of such default. Trustor will have ten (10) calendar days after the notice of default is received or deemed received within which to cure the default. In no event will the Beneficiary be precluded from exercising remedies if its security becomes or is about to become materially impaired 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, prior to exercising any remedies hereunder, Beneficiary will give Trustor written 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. In no event will Beneficiary be precluded from exercising remedies if its security DRAFT
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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 Beneficiary Executive Director or designee.
(f) 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.

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[signatures on following page]

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S-1
IN WITNESS WHEREOF Trustor has executed this Deed of Trust as of the day and year set forth above.

Verdugo Housing Corporation, a California nonprofit public benefit corporation

By: ____________________________
Name: ______________________
Title: ______________________

By: ____________________________
Name: ______________________
Title: ______________________

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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.

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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.

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Exhibit A – Legal Description
Exhibit A

LEGAL DESCRIPTION
[REDACTED]
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ATTACHMENT NO. 9

ENVIRONMENTAL INDEMNITY

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ENVIRONMENTAL INDEMNITY
THIS ENVIRONMENTAL INDEMNITY (“ Indemnity”), dated as of _________________, 202____, made by VERDUGO HOUSING CORPORATION, a California nonprofit public benefit corporation (“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 that certain 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 December 2, 2025, as it may be amended from time to time (“Affordable Housing Agreement”), pursuant to which the Authority agreed to make two loans to Borrower in the original principal amounts of Six Hundred Eighty-Three Thousand Three Hundred Sixty-One Dollars ($ 683,361) (the “ HOME CHDO Loan”) and Two Million One Hundred Thousand Dollars ($2,100,000) (the “ HOME ARP Loan”) for payment of a portion of the Development Costs of the Project . The HOME CDHO Loan and the HOME ARP Loan may be collectively referred to herein as the “ Authority Loans .” 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;” and 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 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 690 1, 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 “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 DRAFT
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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 to time, with respect to the discharge and/or removal of Hazardous Substances, to pay immediately when due the costs of the removal of, or any other action required by law with respect to, any such Hazardous Substances, 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 Substances, 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 Substances 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 all 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 Substances 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 only 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 Substances.
(e) Borrower 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 Pr operty, 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 regulations, at Borrower’s sole co st 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 DRAFT
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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 r easonably 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 experts’ 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 Hazardous Substances 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) of the property and assets (including the Property) which constitute security for such Obligations. If default occurs in the timely and proper payment an d performance of any such Obligations (after notice and reasonable opportunity to cure) , any judicial proceedings 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 otherwise, 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 exclusively from the gross negligence and/or willful misconduct of the Authority.

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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:
(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 disp osal of any Hazardous Substances 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 court 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; (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;
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(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 or 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, whether by foreclosure, deed in lieu of foreclosure, sale under power of sale or otherwise; or
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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 under 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 provisions of this Section 4, might constitute grounds for relieving B orrower 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 protect, 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 (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.

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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 fi rst 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:

HOUSING AUTHORITY OF

THE CITY OF GLENDALE
141 N. Glendale Avenue, Room 202,
Glendale, California 91206
Attention: Executive Director
With a copy to: CITY OF GLENDALE
City Attorney’s Office
613 E. Broadway
Suite 220
Glendale, California 91206
Attention: City Attorney
In the case of Borrower:

Verdugo Housing Corporation
221 E. Walnut St.

Suite 112
Pasadena, CA 91101
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, 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; 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.

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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 Borrower 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 of 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 successor s 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 the 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 will thereupon become vested with all of the rights and obligati ons 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 written 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 DRAFT
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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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S-1

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

“Borrower”

Verdugo Housing Corporation, a California nonprofit public benefit corporation

By: ____________________________
Name: ______________________
Title: ______________________

By: ____________________________
Name: ______________________
Title: ______________________

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Exhibit A
to Environmental Indemnity

LEGAL DESCRIPTION
[REDACTED]
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Environmental Indemnity
Exhibit A – Legal Description
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