Agenda packet — Livermore City Council, March 24, 2025 (part 3 of 5)

8.2. 8.5 R ecovery of City Costs. Borrower shall reimburse City for all City costs, including but not limited to reasonable attorneys’ fees, incurred in reviewing instruments and other legal documents proposed to effect a Transfer under this Agreement and in reviewing the qualifications and financial resources of a proposed successor, assignee, or transferee within ten (10) days following City’s delivery to Borrower of an invoice detailing such costs.

8.6 Encumbrances. B orrower agrees to use good faith commercially reasonable efforts to ensure that all deeds of trust or other security instruments and any applicable subordination agreement recorded against the Property, the Project or part thereof for the benefit of a lender other than City (“Third-Party Lender”) shall contain each of the following provisions: (i) Third-Party Lender shall use its best efforts to provide to City a copy of any notice of default issued to Borrower concurrently with provision of such notice to Borrower; (ii) City shall have the reasonable right, but not the obligation, to cure any default by Borrower within the same period of time provided to Borrower for such cure extended by an additional ninety (90) days; (iii) provided that City has cured any default under Third-Party Lender’s deed of trust and other loan documents, City shall have the right to foreclose the Deed of Trust, and take title to the Project without acceleration of Third-Party Lender’s debt; and (iv) City shall have the right to transfer the Project without acceleration of Third-Party Lender’s debt to a nonprofit corporation or other entity which shall own and operate the Project as an affordable rental housing Project, subject to the prior written consent of the T hird-Party Lender. Borrower agrees to provide to City a copy of any notice of default Borrower receives from any Third-Party Lender within five (5) business days following Borrower’s receipt thereof.

8.7 Mortgagee Protection. No violation of any provision contained herein shall defeat or render invalid the lien of any mortgage or deed of trust made in good faith and for value upon all or any portion of the Project or the Property, and the purchaser at any trustee’s sale or foreclosure sale shall not be liable for any violation of any provision hereof occurring prior to the acquisition of title by such purchaser. Such purchaser shall be bound by and subject to this Agreement from and after such trustee’s sale or foreclosure sale. Promptly upon determining that a violation of this Agreement has occurred, City shall give written notice to the holders of record of any mortgages or deeds of trust encumbering the Project or the Property that such violation has occurred.

9. Default and Remedies.

EXHIBIT A
519
135.054/633510
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23 9.1 E vents of Default. The occurrence of any one or more of the following events shall constitute an event of default hereunder (“Event of Default”):
(i) The occurrence of a Transfer in violation of Section 8 hereof; (ii) Borrower’s failure to maintain insurance on the Property and the Project as required hereunder, and the failure of Borrower to cure such default within five (5) days; (iii) Subject to Borrower’s right to contest the following charges, Borrower’s failure to pay taxes or assessments due on the Property or the Project or failure to pay any other charge that may result in a lien on the Property or the Project, and Borrower’s failure to cure such default within thirty (30) days of delinquency, but in all events prior to the date upon which the holder of any such lien has the right to foreclose thereon; (iv) A default arises under any loan secured by a mortgage, deed of trust or other security instrument recorded against the Property and remains uncured beyond any applicable cure period such that the holder of such security instrument has the right to accelerate repayment of such loan;
(v) A default arises under the Loan Agreement, the Notes, or the Deed of Trust, and remains uncured beyond the expiration of any applicable cure period; (vi) Borrower’s default in the performance of any term, provision or covenant under this Agreement (other than an obligation enumerated in this Section 9.1), and unless such provision specifies a shorter cure period for such default, the continuation of such default for ten (10) days in the event of a monetary default or thirty (30) days in the event of a non- monetary default following the date upon which City shall have given written notice of the default to Borrower, or if the nature of any such non-monetary default is such that it cannot be cured within thirty (30) days, Borrower’s failure to commence to cure the default within thirty (30) days and thereafter prosecute the curing of such default with due diligence and in good faith, but in no event longer than ninety (90) days from receipt of the notice of default, unless City agrees to such longer period, in its reasonable discretion.

The limite d partners of Borrower shall have the right to cure any default of Borrower hereunder upon the same terms and conditions afforded to Borrower; provided however, if the default is of such nature that the limited partners reasonably determine that it is necessary to replace the general partner of Borrower in order to cure such default, then the cure period shall be extended by an additional sixty (60) days after the removal and replacement of such general partner, provided that the limited partners have promptly commenced and diligently proceeded with all requisite actions to effect such removal and replacement. City shall provide a copy of any notice of default hereunder to the limited partners at the address set forth in Section 11.3 hereof, or to such other address provided to the City in writing, concurrently with the provision of such notice to Borrower.

9.2 Remedies. Upon the occurrence of an Event of Default and its continuation beyond any applicable cure period, City may proceed with any of the following remedies:

EXHIBIT A
520
135.054/633510
6017309
24 (i) Bring an action for equitable relief seeking the specific performance of the terms and conditions of this Agreement, and/or enjoining, abating, or preventing any violation of such terms and conditions, and/or seeking declaratory relief; (ii) Accelerate and declare the balance of the Notes and interest accrued thereon immediately due and payable and proceed with foreclosure under the Deed of Trust; (iii) For violations of obligations with respect to rents for Restricted Units, impose as liquidated damages a charge in an amount equal to the actual amount collected in excess of the Affordable Rent; and
(iv) Pursue any other remedy allowed under the City Documents or at law or in equity.

Each
of the remedies provided herein is cumulative and not exclusive. The City may exercise from time to time any rights and remedies available to it under applicable law or in equity, in addition to, and not in lieu of, any rights and remedies expressly provided in this Agreement.

10. Indemnity. To the greatest extent permitted by law, Borrower shall indemnify, defend and hold the Indemnitees harmless from and against all Claims arising directly or indirectly, in whole or in part, as a result of or in connection with Borrower’s construction, management, or operation of the Property and the Project or any failure to perform any obligation as and when required by this Agreement. Borrower’s indemnification obligations under this Section 10 shall not extend to Claims to the extent resulting from the gross negligence or willful misconduct of Indemnitees. The provisions of this Section 10 shall survive the expiration or earlier termination of this Agreement.

City does not and shall not waive any rights against Borrower that it may have by reason of any indemnity and hold harmless provision set forth in this Agreement because of the acceptance by City, or the deposit with City by Borrower, of any of the insurance policies described in this Agreement.

10.1 Terms Applicable to Indemnity Provisions. The terms set forth in this Section 10.1 shall apply to all provisions of this Agreement that pertain to Borrower’s obligations to indemnify City and the other Indemnitees, including without limitation, Sections 2.7 and 10. In connection with each such provision, all of the following shall apply:
(a) C
ity does not and shall not waive any rights against Borrower that it may have by reason of any indemnity and hold harmless provision set forth in this Agreement because of the acceptance by City, or the deposit with City by Borrower, of any of the insurance policies described in this Agreement;
(b)
Borrower’s obligation to indemnify the Indemnitees shall not be limited or impaired by any of the following: (i) any amendment or modification of any City Document; (ii) any extensions of time for performance required by any City Document; (iii) any provision in any of the City Documents limiting City’s recourse to property securing the Secured Obligations (as defined in the Deed of Trust, or limiting the personal liability of Borrower, or any other party for payment of all or any part of the indebtedness evidenced by the Notes; (iv) the accuracy or inaccuracy of any representation and warranty made by Borrower under this Agreement or by Borrower or any other party under any City Document, (v) the release of Borrower or any other

EXHIBIT A
521
135.054/633510
6017309
25 person, by City or by operation of law, from performance of any obligation under any City Document; (vi) the release or substitution in whole or in part of any security for repayment of the indebtedness evidenced by the Notes; and (vii) City’s failure to properly perfect any lien or security interest given as security for repayment of the indebtedness evidenced by the Notes; and (c) Th
e obligations of Borrower to indemnify the Indemnitees shall survive any repayment or discharge of the indebtedness evidenced by the Notes, any foreclosure proceeding, any foreclosure sale, any delivery of any deed in lieu of foreclosure, and any release of record of the lien of the Deed of Trust.

11. Miscellaneous.

11.1 Amendments. This Agreement may be amended or modified only by a written instrument signed by both Parties.

11.2 No Waiver. Any waiver by City of any term or provision of this Agreement must be in writing. No waiver shall be implied from any delay or failure by City to take action on any breach or default hereunder or to pursue any remedy allowed under this Agreement or applicable law. No failure or delay by City at any time to require strict performance by Borrower of any provision of this Agreement or to exercise any election contained herein or any right, power or remedy hereunder shall be construed as a waiver of any other provision or any succeeding breach of the same or any other provision hereof or a relinquishment for the future of such election.

11.3 Notices. Except as otherwise specified herein, all notices to be sent pursuant to this Agreement shall be made in writing, and sent to the Parties at their respective addresses specified below or to such other address as a Party may designate by written notice delivered to the other parties in accordance with this Section. All such notices shall be sent by: (i) personal delivery, in which case notice is effective upon delivery; (ii) certified or registered mail, return receipt requested, in which case notice shall be deemed delivered upon receipt if delivery is confirmed by a return receipt; or (iii) nationally recognized overnight courier, with charges prepaid or charged to the sender’s account, in which case notice is effective on delivery if delivery is confirmed by the delivery service.

City: City of Livermore
1052 S. Livermore Avenue
Livermore, CA 94550
Attention: City Manager
Bo
rrower: c/o Satellite Affordable Housing Associates
1835 Alcatraz Avenue
Berkeley, CA 94703
Attn: Eve Stewart, Senior Vice President of Real Estate Development
And

EXHIBIT A
522
135.054/633510
6017309
26 Interfaith Housing, Inc.
550 Hillcrest Avenue
Livermore, CA 94550
Attn: President
Wi
th a copy to:

Gubb &
Barshay LLP
505 14th Street, Suite 450
Oakland, CA 94612
Attention: Erica Williams Orcharton
And a
copy to Borrower’s limited partner:

NE
F Assignment Corporation
10 South Riverside Plaza
Suite 1700
Chicago, Illinois 60606
Attention: General Counsel
Email: [email protected] with subject line of SMT #83146; 83452
Wi
th a copy to:

NE
F Assignment Corporation
10 South Riverside Plaza
Suite 1700
Chicago, Illinois 60606
Attention: SVP Asset Management
And:

Boc
arsly Emden Cowan Esmail & Arndt LLP
633 W. Fifth Street, Suite 5880
Los Angeles, California 90017
Attention: Rachel Rosner, Esq

11.4 Notice of Expiration of Term.
a) At least six (6) months prior to the expiration of the Term, Borrower shall provide by first-class mail, postage prepaid, a notice to all Tenants containing (i) the anticipated date of the expiration of the Term, (ii) any anticipated increase in Rent upon the expiration of the Term, (iii) a statement that a copy of such notice will be sent to the City, and (iv) a statement that a public hearing may be held by the City on the issue and that the Tenant will receive notice of the hearing at least fifteen (15) days in advance of any such hearing. Borrower shall also file a copy of the above-described notice with the City Manager.

EXHIBIT A
523
135.054/633510
6017309
27 b) In addition to the notice required above, Borrower shall comply with the requirements set forth in California Government Code Sections 65863.10 and 65863.11. Such notice requirements include: (i) a twelve (12) month notice to existing tenants, prospective tenants and Affected Public Agencies (as defined in California Government Code Section 65863.10(a), which would include the City Manager ) prior to the expiration of the Term, (ii) a six (6) month notice requirement to existing tenants, prospective tenants and Affected Public Agencies prior to the expiration of the Term; (iii) a notice of an offer to purchase the Development to "qualified entities" (as defined in California Government Code Section 65863.11(d)), if the Development is to be sold within five (5) years of the end of the Term; (iv) a notice of right of first refusal within the one hundred eighty (180) day period that qualified entities may purchase the Development.

11.5 Further Assurances. The Parties shall execute, acknowledge and deliver to the other such other documents and instruments, and take such other actions, as either shall reasonably request as may be necessary to carry out the intent of this Agreement.

11.6 Parties Not Co-Venturers; Independent Contractor; No Agency Relationship.

Nothing in this Agreement is intended to or shall establish the Parties as partners, co-venturers, or principal and agent with one another. The relationship of Borrower and City shall not be construed as a joint venture, equity venture, partnership or any other relationship. City neither undertakes nor assumes any responsibility or duty to Borrower (except as expressly provided in this Agreement) or to any third party with respect to the Project. Borrower and its employees are not employees of City but rather are, and shall always be considered independent contractors.

Furthermore, Borrower and its employees shall at no time pretend to be or hold themselves out as employees or agents of City. Except as City may specify in writing, Borrower shall not have any authority to act as an agent of City or to bind City to any obligation.

11.7 A ction by the City. Except as may be otherwise specifically provided herein, whenever any approval, notice, direction, consent or request by the City is required or permitted under this Agreement, such action shall be in writing, and such action may be given, made or taken by the City’s Authorized Representative or by any person who shall have been designated by the City’s Authorized Representative, without further approval by the City Council.

11.8 Nonliability of City and City Officials, Employees and Agents. No member, official, employee or agent of the City shall be personally liable to Borrower or any successor in interest, in the event of any default or breach by the City, or for any amount of money which may become due to Borrower or its successor or for any obligation of City under this Agreement.

11.9 Headings; Construction; Statutory References. The headings of the sections and paragraphs of this Agreement are for convenience only and shall not be used to interpret this Agreement. The language of this Agreement shall be construed as a whole according to its fair meaning and not strictly for or against any Party. All references in this Agreement to particular statutes, regulations, ordinances or resolutions of the United States, the State of California, or the City of Livermore shall be deemed to include the same statute, regulation, ordinance or resolution as hereafter amended or renumbered, or if repealed, to such other provisions as may thereafter govern the same subject.

EXHIBIT A
524
135.054/633510
6017309
28 11.10 Time is of the Essence. Time is of the essence in the performance of this Agreement.

11.11 Governing Law; Venue. This Agreement shall be construed in accordance with the laws of the State of California without regard to principles of conflicts of law. Any action to enforce or interpret this Agreement shall be filed and heard in the Superior Court of Alameda County, California or in the Federal District Court for the Northern District of California.

11.12 A ttorneys' Fees and Costs. If any legal or administrative action is brought to interpret or enforce the terms of this Agreement, the prevailing party shall be entitled to recover all reasonable attorneys' fees and costs incurred in such action.

11.13 Severability. If any provision of this Agreement is held invalid, illegal, or unenforceable by a court of competent jurisdiction, the validity, legality, and enforceability of the remaining provisions shall not be affected or impaired thereby.

11.14 Entire Agreement; Exhibits. This Agreement, together with the Loan Agreement, the Notes, and the Deed of Trust, contains the entire agreement of Parties with respect to the subject matter hereof, and supersedes all prior oral or written agreements between the Parties with respect thereto. Exhibits A through C, attached hereto are incorporated herein by this reference.

11.15 Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be an original and all of which together shall constitute one agreement.

11.16 Underwriting Standards . The City attests that the underwriting standards being utilized for this transaction are those that have been submitted and approved by the California Department of Housing and Community Development.

11.17 Special Provision. In the event that the Lender is no longer in operation, Borrower shall make all payments due to the California Department of Housing and Community Development.

SIGNATURES ON FOLLOWING PAGE(S).

EXHIBIT A
525
29 IN WITNESS WHEREOF, the Parties have executed this Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants as of the date first written above.

CIT
Y:

CIT

Y OF LIVERMORE,
a California municipal corporation
By:

Print Name: Marianna A. Burch
Title: City Manager
ATTES
T:

By:

City Clerk
APP
ROVED AS TO FORM:

Deputy/Assistant/Senior Assistant/City Attorney
BO
RROWER:

Pac Avenue, L.P.,
a California limited partnership
By:

Pac Avenue LLC,
a California limited liability company,
its general partner
By:

Satellite Affordable Housing Associates,
a California nonprofit public benefit corporation,
a member and the manager
By:
____________________________
Eve Stewart,
Senior Vice President of Real Estate Development
SIGNATURES MUST BE NOTARIZED.

EXHIBIT A
526
ACKNO

WLEDGMENT
Sta
te of California )
) ss
County of _________ )
On , before me, ___________, Notary Public_______________, (N ame of Notary)
nota
ry 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 cert
ify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WI
TNESS my hand and official seal.
(Notary S ignature)
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.

EXHIBIT A
527
Exhibit A
LEGA

L DESCRIPTION OF THE PROPERTY

EXHIBIT A
528
EXH
IBIT A
LEGA

L DESCRIPTION OF THE PROPERTY
ALL TH

AT REAL PROPERTY IN THE CITY OF LIVERMORE, COUNTY OF ALAMEDA, STATE OF CALIFORNIA, DESCRIBED AS FOLLOWS:

PA
RCEL 2, OF PARCEL MAP 10858, FILED NOVEMBER 27, 2024, IN BOOK 360 OF PARCEL MAPS, AT PAGES 87, 88, and 89.

APN:
a portion of 099-0950-008-02

EXHIBIT A
529

EXHIBIT A
530
Exhibit B
Ins
urance Requirements

EXHIBIT A
531

SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE

THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS.

INSURER(S) AFFORDING COVERAGE
INSURER F :

INSURER E :

INSURER D :

INSURER C :

INSURER B :

INSURER A :

NAIC #
NAME:

CONTACT
(A/C, No):

FAX
E-MAIL
ADDRESS:

PRODUCER
(A/C, No, Ext):

PHONE

INSURED
REVISION NUMBER:CERTIFICATE NUMBER:COVERAGES
IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must have ADDITIONAL INSURED provisions or be endorsed.

If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s).

THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS

CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER.

OTHER:
(Per accident)
(Ea accident)
$
$
N / A
SUBR
WVD
ADDL
INSD

THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS

CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. $ $
$
$PROPERTY DAMAGE
BODILY INJURY (Per accident)
BODILY INJURY (Per person)

COMBINED SINGLE LIMIT

AUTOS ONLY

AUTOSAUTOS ONLY

NON-OWNED

SCHEDULEDOWNED

ANY AUTO

AUTOMOBILE LIABILITY
Y / N

WORKERS COMPENSATION

AND EMPLOYERS' LIABILITY
OFFICER/MEMBER EXCLUDED?
(Mandatory in NH)
DESCRIPTION OF OPERATIONS below
If yes, describe under

ANY PROPRIETOR/PARTNER/EXECUTIVE
$
$
$
E.L. DISEASE - POLICY LIMIT
E.L. DISEASE - EA EMPLOYEE
E.L. EACH ACCIDENT
ER
OTH-

STATUTE
PER

LIMITS(MM/DD/YYYY)

POLICY EXP
(MM/DD/YYYY)

POLICY EFF

POLICY NUMBERTYPE OF INSURANCELTR
INSR
DESCRIPTION OF OPERATIONS / LOCATIONS / VEHICLES (ACORD 101, Additional Remarks Schedule, may be attached if more space is required)

EXCESS LIAB
UMBRELLA LIAB $EACH OCCURRENCE
$AGGREGATE
$
OCCUR

CLAIMS-MADE
DED RETENTION $
$PRODUCTS - COMP/OP AGG
$GENERAL AGGREGATE
$PERSONAL & ADV INJURY
$MED EXP (Any one person)
$EACH OCCURRENCE

DAMAGE TO RENTED
$PREMISES (Ea occurrence)

COMMERCIAL GENERAL LIABILITY

CLAIMS-MADE OCCUR
GEN'L AGGREGATE LIMIT APPLIES PER:

POLICY PRO-

JECT LOC

CERTIFICATE OF LIABILITY INSURANCE

DATE (MM/DD/YYYY)

CANCELLATION

AUTHORIZED REPRESENTATIVE
ACORD 25 (2016/03)
© 1988-2015 ACORD CORPORATION. All rights reserved.

CERTIFICATE HOLDER
The ACORD name and logo are registered marks of ACORD
HIRED

AUTOS ONLY
2/13/2025
Arthur J. Gallagher Risk Management Services, LLC
595 Market Street
Suite 2100
San Francisco CA 94105
Annabel Korsgaard-Radutiu
415-536-8041
415-536-8499
[email protected]
License#: 0D69293
Insurance Company of the West
27847
SATEHOU-01
AXIS Surplus Insurance Company
26620
Satellite Affordable Housing Associates
1835 Alcatraz Ave
Berkeley, CA 94703
1738001887
B
X
2,000,000
X
P00100105638503
1/1/2025
1/1/2026
2,000,000
A
X
WPL503985007
2/15/2025
2/15/2026
1,000,000
1,000,000
1,000,000
Excess Liability coverage:
-$2,000,000 xs Primary GL
01/01/2025 - 01/01/2026
Carrier: AXIS Surplus Insurance Company
Policy #P00100105638503
-$3,000,000 xs $2,000,000
See Attached...

City of Livermore, its officers, officials,
employees, or volunteers
1052 S. Livermore Avenue
Livermore CA 94550
USA

EXHIBIT A
532
ACORD 101 (2008/01)
The ACORD name and logo are registered marks of ACORD
© 2008 ACORD CORPORATION. All rights reserved.

THIS ADDITIONAL REMARKS FORM IS A SCHEDULE TO ACORD FORM, FORM NUMBER: FORM TITLE:

ADDITIONAL REMARKS
ADDITIONAL REMARKS SCHEDULE Page of
AGENCY CUSTOMER ID:

LOC #:

AGENCY

CARRIER NAIC CODE

POLICY NUMBER

NAMED INSURED
EFFECTIVE DATE:

SATEHOU-01
1 1
Arthur J. Gallagher Risk Management Services, LLC
Satellite Affordable Housing Associates
1835 Alcatraz Ave
Berkeley, CA 94703
25 CERTIFICATE OF LIABILITY INSURANCE
01/01/2025 - 01/01/2026
Carrier: Admiral Insurance Company
Policy # UX0000050702
-$5,000,000 xs $5,000,000
01/01/2025 - 01/01/2026
Carrier: Texas Insurance Company
Policy #JT124XANN0298202
Underlying Insurance:

General Liability Policy # 3406408225
Carrier: Lexington Insurance Company
01/01/2025 to 01/01/2026
$1,000,000 Each Occurrence
$1,000,000 Personal and Advertising Injury - any one person or organization $1,000,000 Any One Fire
$2,000,000 General Aggregate
$2,000,000 Products Completed Operations Aggregate
30 days notice of cancellation except for nonpayment of premium which is 10 days notice.

RE: Pacific Ave project

EXHIBIT A
533
Exhibit C
Fo
rm of Annual Report

EXHIBIT A
534

MULTI-FAMILY RENTAL PROJECT ANNUAL REPORT
Property Conditions
List any physical defects or major repair work undertaken within the reporting period:

Comments on any general management/performance issues within the reporting period:

Compliance with Required Number of Restricted Units
Total number of Restricted Units which are currently occupied (or reserved and available for occupancy):

Number of vacant Restricted Units at the time of this report:

I hereby certify that these units in the quantity listed above have been continuously designated as units for occupancy by Eligible Households during the reporting period:

Name of Project Owner or Authorized Agent Title Compliance with Rent Limits
List below the current monthly rents of the Restricted Units as well as the prior rents (if increases were made during the report period). Complete attached Restricted Unit occupancy table.

Plan Number of
Bedrooms
Current
Rent
Prior Rent % Increase Additional
Fees Charged
Utility Allowance
(if applicable) or Amount of
Tenant Paid Utilities
I hereby certify that the rents for all Restricted Units did not exceed the levels authorized under the Regulatory Agreement/restrictive covenants with the City of Livermore during the reporting period:

Name of Project Owner or Authorized Agent Title Property Name & Address
Person Completing Report
Date
Report Period

EXHIBIT C

Page 1 of 2 ends

EXHIBIT A
535

MULTI-FAMILY RENTAL PROJECT ANNUAL REPORT
Rest
ricted Unit Occupancy Information
Unit
#
Bdrms Unit
Income
Level
Tenant Last
Name/Identifier
Move-
In Date
# in
Household
Reported
Annual
Income
Effective
Date of
Current
Rent
Tenant
Paid
Rent
Section
8?
(Y/N)
Homeless
Unit?
(Y/N)

Page 2 of 2 ends

EXHIBIT A
536
135.054/639247
Exhibit F

INSURANCE REQUIREMENTS

EXHIBIT A
537

SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE

THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS.

INSURER(S) AFFORDING COVERAGE
INSURER F :

INSURER E :

INSURER D :

INSURER C :

INSURER B :

INSURER A :

NAIC #
NAME:

CONTACT
(A/C, No):

FAX
E-MAIL
ADDRESS:

PRODUCER
(A/C, No, Ext):

PHONE

INSURED
REVISION NUMBER:CERTIFICATE NUMBER:COVERAGES
IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must have ADDITIONAL INSURED provisions or be endorsed.

THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS

OTHER:
(Per accident)
(Ea accident)
$
$
N / A
SUBR
WVD
ADDL
INSD

COMBINED SINGLE LIMIT

AUTOS ONLY

AUTOSAUTOS ONLY

NON-OWNED

SCHEDULEDOWNED

ANY AUTO

AUTOMOBILE LIABILITY
Y / N

WORKERS COMPENSATION

AND EMPLOYERS' LIABILITY
OFFICER/MEMBER EXCLUDED?
(Mandatory in NH)
DESCRIPTION OF OPERATIONS below
If yes, describe under

ANY PROPRIETOR/PARTNER/EXECUTIVE
$
$
$
E.L. DISEASE - POLICY LIMIT
E.L. DISEASE - EA EMPLOYEE
E.L. EACH ACCIDENT
ER
OTH-

STATUTE
PER

LIMITS(MM/DD/YYYY)

POLICY EXP
(MM/DD/YYYY)

POLICY EFF

POLICY NUMBERTYPE OF INSURANCELTR
INSR
DESCRIPTION OF OPERATIONS / LOCATIONS / VEHICLES (ACORD 101, Additional Remarks Schedule, may be attached if more space is required)

EXCESS LIAB
UMBRELLA LIAB $EACH OCCURRENCE
$AGGREGATE
$
OCCUR

CLAIMS-MADE
DED RETENTION $
$PRODUCTS - COMP/OP AGG
$GENERAL AGGREGATE
$PERSONAL & ADV INJURY
$MED EXP (Any one person)
$EACH OCCURRENCE

DAMAGE TO RENTED
$PREMISES (Ea occurrence)

COMMERCIAL GENERAL LIABILITY

CLAIMS-MADE OCCUR
GEN'L AGGREGATE LIMIT APPLIES PER:

POLICY PRO-

JECT LOC

CERTIFICATE OF LIABILITY INSURANCE

DATE (MM/DD/YYYY)

CANCELLATION

AUTHORIZED REPRESENTATIVE
ACORD 25 (2016/03)
© 1988-2015 ACORD CORPORATION. All rights reserved.

CERTIFICATE HOLDER
The ACORD name and logo are registered marks of ACORD
HIRED

City of Livermore, its officers, officials,
employees, or volunteers
1052 S. Livermore Avenue
Livermore CA 94550
USA

EXHIBIT A
538
ACORD 101 (2008/01)
The ACORD name and logo are registered marks of ACORD
© 2008 ACORD CORPORATION. All rights reserved.

THIS ADDITIONAL REMARKS FORM IS A SCHEDULE TO ACORD FORM, FORM NUMBER: FORM TITLE:

ADDITIONAL REMARKS
ADDITIONAL REMARKS SCHEDULE Page of
AGENCY CUSTOMER ID:

LOC #:

AGENCY

CARRIER NAIC CODE

POLICY NUMBER

NAMED INSURED
EFFECTIVE DATE:

RE: Pacific Ave project

EXHIBIT A
539
135.054/639247
Exhibit G

APPROVED DEVELOPMENT BUDGET

EXHIBIT A
540
Sources
Permanent Sources
Description Totals
Tax Credit Equity 23,821,439$
HCD NPLH 6,257,776$
FHLB AHP 1,000,000$
City of Livermore Loan 6,500,000$
City of Livermore Predevelopment Loan 657,000$
Alameda County A1 Bonds 6,234,012$
Accrued Interest on Soft Loans 359,090$
HUD Section 202 6,947,852$
GP Capital Contribution (HUD 202 Deposit) 10,000$
Total Sources 52,966,260$
Uses
Description Budgeted

CONSTRUCTION
Unit Construction 27,313,036$
Site Work 1,291,650$
Contractor Overhead & Profit 1,636,619$
General Conditions 1,352,030$
Contractor Insurance & Bonds 532,305$
Owner Furnishings 158,000$
PV System 900,000$
Hard Cost Contingency 2,033,044$
CONSTRUCTION TOTAL 35,216,684$

ARCHITECTURAL FEES
Architecture 1,299,926$
ARCHITECTURAL FEES TOTAL 1,299,926$

SURVEY & ENGINEERING
Survey 960,000$
Enviro Assessment &Testing 60,000$
SURVEY & ENGINEERING TOTAL 1,020,000$
Description Budgeted

CONST INTEREST & FEES
Construction Loan Fees 357,418$
Construction Lender Costs 35,000$
Construction Lender Legal 140,000$
Contruction Loan Interest 3,554,505$
Accrued Interest 359,090$
Prevailing Wage Monitoring 42,000$
Construction Title & Recording 105,000$
CONST INTEREST & FEES TOTAL 4,593,013$

PERM FINANCING COSTS
Perm Title & Recording 25,000$
PERM FINANCING TOTAL 25,000$

OWNER LEGAL
Owner Legal - Org, RE, Synd & Perm Loan 90,000$
LEGAL TOTAL 90,000$

RESERVES
Operating Reserve 605,526$
HCD Pooled Transition Reserve Fee 20,916$
HCD NPLH Transition Reserve 217,120$
Supplemental SAHA NPLH Reserve 260,000$
Capitalized Operating Deficit Reserve 1,571,000$
RESERVES TOTAL 2,674,562$

OTHER COSTS
Other Taxes 35,000$
Permit Fees - Building 695,000$
Impact Fees 2,152,573$
Utility Connection Fees 805,000$
Builders Risk Insurance 720,000$
Appraisal 5,000$
Market Study 15,000$
Marketing & Leasing 233,528$
Soft Cost Contingency 814,674$
OTHER COSTS TOTAL 5,475,775$

DEVELOPER COSTS
Developer Fee 2,200,000$
Construction Management 90,000$
DEVELOPER COSTS TOTAL 2,290,000$

SYNDICATION COSTS
Syndication Consultant 55,000$
Syndication Legal 85,000$
Accountant Fee 25,000$
TCAC Fees 116,300$
SYNDICATION COSTS TOTAL 281,300$
52,966,260$

EXHIBIT A
541
Unit Mix (Rent and Income Levels)
Bedrooms AMI Section 8
Total
Units
Gross
Rent
Utility
Allowance Net Rent
Proposed
Rent
Annual
Rental
Income
1 20% 16 584$ 97$ 487$ 487$ 93,504$ 1 30% 8 876$ 97$ 779$ 779$ 74,784$ 1 50% 14 1,460$ 97$ 1,363$ 779$ 130,872$ 1 50% Yes 5 1,460$ 97$ 1,363$ 1,363$ 81,780$ 1 50% 24 1,460$ 97$ 1,363$ 1,363$ 392,544$ 1 60% 9 1,752$ 97$ 1,655$ 1,655$ 178,740$ 2 30% 1 1,051$ 131$ 920$ 920$ 11,042$ 2 60% 1 2,102$ 131$ 1,971$ 1,971$ 23,657$ 2 MNGR 1 -$ 131$ -$ -$ -$ -$
-$
-$
-$
-$
-$
-$
-$
Avg AMI: 42.3% 5 79 986,923$

EXHIBIT A
542
Cash Flow
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15 Income
Rent 2.0% 818,652$ 835,025$ 851,726$ 868,760$ 886,135$ 903,858$ 921,935$ 940,374$ 959,181$ 978,365$ 997,932$ 1,017,891$ 1,038,249$ 1,059,014$ 1,080,194$ NPLH Rent 2.0% 76,320$ 77,846$ 79,403$ 80,991$ 82,611$ 84,263$ 85,949$ 87,668$ 89,421$ 91,209$ 93,034$ 94,894$ 96,792$ 98,728$ 100,703$ Section 8 Income 54,777$ 56,990$ 58,130$ 59,292$ 60,478$ 61,688$ 62,922$ 64,180$ 65,464$ 66,773$ 68,108$ 69,470$ 70,860$ 72,277$ 73,723$ HUD 202 PRAC Income 174,420$ 181,467$ 185,096$ 188,798$ 192,574$ 196,425$ 200,354$ 204,361$ 208,448$ 212,617$ 216,869$ 221,207$ 225,631$ 230,143$ 234,746$ Draw on NPLH COSR 2,662$ 12,848$ 223,465$ 231,200$ 232,789$ 232,789$ 232,789$ 232,789$ 232,789$ 232,789$ 232,789$ 232,789$ 232,789$ 232,789$ 232,789$ Draw on Supplemental NPLH Reserve 56,848$ 203,152$ -$ -$ -$ -$ -$ -$ -$ Draw on Operating Deficit Reserve 101,690$ -$ 3,768$ 1,819$ 34,929$ 52,395$ 70,623$ 89,641$ 109,479$ 130,165$ 151,729$ 174,204$ 197,623$ 222,017$ 247,423$ Laundry & Vending Income 2.0% 8,424$ 8,592$ 8,764$ 8,940$ 9,118$ 9,301$ 9,487$ 9,677$ 9,870$ 10,067$ 10,269$ 10,474$ 10,684$ 10,897$ 11,115$ POTENTIAL GROSS INCOME: 1,293,793$ 1,375,921$ 1,410,352$ 1,439,800$ 1,498,635$ 1,540,719$ 1,584,059$ 1,628,689$ 1,674, 652$ 1,721,986$ 1,770,730$ 1,820,929$ 1,872,628$ 1,925,865$ 1,980,693$ LIHTC Units Vacancy 5.0% (60,874)$ (64,904)$ (66,547)$ (67,940)$ (70,801)$ (72,823)$ (74,905)$ (77,051)$ (79,262)$ (81,539)$ (83,885)$ (86,302)$ (88,792)$ (91,357)$ (94,000)$ NPLH Units Vacancy 10.0% (7,632)$ (7,785)$ (7,940)$ (8,099)$ (8,261)$ (8,426)$ (8,595)$ (8,767)$ (8,942)$ ( 9,121)$ (9,303)$ (9,489)$ (9,679)$ (9,873)$ (10,070)$ EFFECTIVE GROSS INCOME: 1,225,287$ 1,303,233$ 1,335,864$ 1,363,760$ 1,419,573$ 1,459,470$ 1,500,558$ 1,542,871$ 1,586,449$ 1,631,326$ 1,677,542$ 1,725,138$ 1,774,157$ 1,824,635$ 1,876,623$ Expenses
Operating Expenses 3.0% 1,132,569$ 1,166,546$ 1,201,542$ 1,237,589$ 1,274,716$ 1,312,958$ 1,352,347$ 1,392,917$ 1,434,705$ 1,477,746$ 1,522,078$ 1,567,740$ 1,614,773$ 1,663,216$ 1,713,112$ Replacement Reserve Deposits 47,400$ 47,400$ 47,400$ 47,400$ 47,400$ 47,400$ 47,400$ 47,400$ 47,400$ 47,400$ 47,400$ 47,400$ 47,400$ 47,400$ 47,400$ TOTAL EXPENSES 1,179,969$ 1,213,946$ 1,248,942$ 1,284,989$ 1,322,116$ 1,360,358$ 1,399,747$ 1,440,317$ 1,482,105$ 1,525,146$ 1,569,478$ 1,615,140$ 1,662,173$ 1,710,616$ 1,760,512$ NET OPERATING INCOME 45,318$ 89,286$ 86,922$ 78,772$ 97,456$ 99,112$ 100,812$ 102,554$ 104,344$ 106,180$ 108,063$ 109,998$ 111,984$ 114,020$ 116,111$ Required Payments
NPLH Monitoring Fee 26,283$ 26,283$ 26,283$ 26,283$ 26,283$ 26,283$ 26,283$ 26,283$ 26,283$ 26,283$ 26,283$ 26,283$ 26,283$ 26,283$ 26,283$ 26,283$ County A1 Monitoring Fee 4,800$ 4,800$ 4,800$ 4,800$ 4,800$ 4,800$ 4,800$ 4,800$ 4,800$ 4,800$ 4,800$ 4,800$ 4,800$ 4,800$ 4,800$ 4,800$ City Monitoring Fee 2,662$ 2,662$ 2,715$ 2,770$ 2,825$ 2,881$ 2,939$ 2,998$ 3,058$ 3,119$ 3,181$ 3,245$ 3,310$ 3,376$ 3,444$ 3,512$ CASH FLOW: 11,574$ 55,489$ 53,070$ 44,864$ 63,492$ 65,090$ 66,731$ 68,414$ 70,143$ 71,916$ 73,736$ 75,605$ 77,525$ 79,493$ 81,516$ Investor Management Fee 1,250$ 5,000$ 5,000$ 5,000$ 5,000$ 5,000$ 5,000$ 5,000$ 5,000$ 5,000$ 5,000$ 5,000$ 5,000$ 5,000$ 5,000$ P
artnership Management Fee 8,972$ 35,887$ 35,887$ 35,887$ 35,887$ 35,887$ 35,887$ 35,887$ 35,887$ 35,887$ 35,887$ 35,887$ 35,887$ 35,887$ 35,887$ Residual Receipts to Soft Loans 100% 1,352$ 14,602$ 12,183$ 3,977$ 22,605$ 24,203$ 25,844$ 27,527$ 29,256$ 31,029$ 32,849$ 34,718$ 36,638$ 38,606$ 40,629$

EXHIBIT A
543
135.054/639247
Exhibit H

FORM OF GROUND LEASE (PHASE 1)

A copy of the executed Ground Lease can be obtained from the City Clerk of the City of Livermore at the address 1052 S. Livermore Avenue, Livermore, CA 94550.

EXHIBIT A
544

RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:

City of Livermore
1052 S Livermore Avenue
Livermore, CA 94550
Attention: City Clerk

EXEMPT FROM RECORDING FEES PER
GOVERNMENT CODE §§6103, 27383

Space above this line for Recorder’s use.

AFFORDABLE HOUSING REGULATORY AGREEMENT

AND

DECLARATION OF RESTRICTIVE COVENANTS

by and between

THE CITY OF LIVERMORE

and

Pac Avenue, L.P.

Pacific Senior Apartments Phase 1

_________________, 2025

EXHIBIT B
545

135.054/633510
6017309
2 This Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants (this “Agreement”) is entered into effective as of _________________, 2025 (“Effective Date”) by and between the City of Livermore, a municipal corporation (“City”) and Pac Avenue, L.P., a California limited partnership (“Borrower”). The City and the Borrower are collectively referred to herein as the “Parties.”

R E C I T A L S
A. Borrower owns a leasehold interest in that certain real property located adjacent to Sunken Gardens Park (3800 Pacific Avenue) at the eastern terminus of Pacific Avenue in Livermore, California, Alameda County Assessor Parcel No. 10858, in the Official Records of Alameda County, Book 360, Pages 87- 89 of Map, subdividing the real property two parcels, Parcels 2 & 4. The Borrower intends to lease Parcel 2 for Phase 1 of Project, and more particularly described in Exhibit A attached hereto (the “Property”). For purposes of clarity this Agreement shall only encumber Borrower’s leasehold interest in the Property and not the City’s fee interest in the land underlying the Property.

B. City and Borrower have entered into an Affordable Housing Loan Agreement (the “Loan Agreement”) dated ___________________ and a Ground Lease dated ________________ concurrently herewith. Borrower will develop, own, and operate a 79 -unit affordable housing development for seniors on the Property (“ Phase 1” or the “Project”). Phase 1 is part of a two - phased project to be known as the “Pacific Avenue Project”. The second phase of the Pacific Avenue Project is anticipated to be a 61-unit affordable housing development for seniors (“Phase 2”). This Agreement only encumbers Phase 1. Capitalized terms used without definition herein shall have the meaning ascribed to such terms in the Loan Agreement.

C. The Loan Agreement provides that the Restricted Units to be developed on the Property will be required to be available to Eligible Households at Affordable Rents in accordance with this Agreement for a period of not less than the term of fifty-five (55) years.

D. The City recognizes there is a shortage of affordable housing and, in particular, low-income Seniors face barriers that inhibit equal access to housing. Therefore, reserving affordable units for Seniors and providing services that allow them to live independently is needed to offer equal access to housing.

E. Subject to the terms and conditions set forth in the Loan Agreement, City has agreed to provide a development loan in an amount not to exceed Seven Million One Hundred Fifty - Seven Thousand Dollars ( $7,157,000.00), (the “Loan” or “City Loan”, which financing was apportioned as (i) Six Hundred Fifty- Seven Thousand Dollars ($657,000) in predevelopment financing and (ii) Six Million Five Hundred Thousand Dollars ($6,500,000) in permanent development financing. As a condition precedent to the funding of the Loan, City requires the Project to be subject to the terms, conditions, and restrictions set forth herein.

F. P
ursuant to the Loan Agreement , Borrower has executed and deliver ed to City Secured Promissory Notes (the “ A&R Predevelopment Note” and “ Development Note ” or “Notes”) to evidence Borrower’s obligation to repay the Loan. The Notes are secured by a Leasehold Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing executed

EXHIBIT B
546
135.054/633510
6017309
3 by Borrower for the benefit of City (the “Deed of Trust ”) recorded in the Official Records of Alameda County concurrently herewith.

G. The Project received no Density Bonus in accordance with Section 6.02.030 of the Livermore Development Code.

H. The purpose of this Agreement is to satisfy the affordability requirements of the City’s affordable housing program and to regulate and restrict the occupancy and rents of the Project’s Restricted Units for the benefit of the Project occupants. The Parties intend the covenants set forth in this Agreement to run with the land and to be binding upon Borrower and Borrower’s successors and assigns for the full term of this Agreement.

NOW THEREFORE, in consideration of the foregoing, and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows.

1.1 Definitions; Exhibits. The following terms have the meanings set forth in this Section wherever used in this Agreement or the attached exhibits. “Actual Household Size” means the actual number of persons in the applicable household. “Adjusted for Family Size Appropriate for the Unit” shall be determined consistent with Section 50052.5(h) of the California Health and Safety Code, subject to the application of federal rules and regulations applicable to Project financing sources, including Section 42(g)(2) of the Internal Revenue Code of 1986 as amended (or successor provision). “Affordable Rent” means the following amounts, less a utility allowance and other fees and charges required to be paid by tenants of the Project on a non-optional basis which have been approved by the City, : (i) for units that are restricted for rental to households with incomes of not more than twenty percent (20%) of AMI (“20% Units”), a monthly rent that does not exceed one- twelfth of t hirty percent (30%) of twenty percent (20%) of Area Median Income, Adjusted for Family Size Appropriate for the Unit; (ii) for units that are restricted for rental to households with incomes of not more than thirty percent (30%) of AMI (“30% Units”), a monthly rent that does not exceed one-twelfth of thirty percent (30%) of thirty percent (30%) of Area Median Income, Adjusted for Family Size Appropriate for the Unit; (iii) for units that are restricted for rental to households with incomes of not more than fifty percent (50%) of AMI (“50% Units”), a monthly rent that does not exceed one-twelfth of thirty percent (30%) of fifty percent (50%) of Area Median Income, Adjusted for Family Size Appropriate for the Unit; and (iv) for units that are restricted for rental to households with incomes of not more than sixty percent (60%) of AMI (“60% Units”), a monthly rent that does not exceed one-twelfth of thirty percent (30%) of sixty p ercent (60%) of Area Median Income, Adjusted for Family Size Appropriate for the Unit. Rents shall be limited to no greater than the TCAC-published rents for the aforementioned income categories. “A&
R Predevelopment Note” is defined in Recital F.
“Ar
ea Median Income” or “AMI” means the median income for Alameda County, California, adjusted for Actual Household Size, as determined pursuant to California Tax Credit Allocation (“TCAC”) regulations.

EXHIBIT B
547
135.054/633510
6017309
4 “City’s Authorized Representative” means the City Manager of the City of Livermore or his/her designee .
“City Documents ” means that certain “Disposition, Development and Loan Agreement” by and between the City , SAHA and IFH dated September 1 6, 2021 (the “DDLA”), the Loan Agreement , the Notes, the Leasehold De ed of Trust, and this Agreement. “Claims ” is defined in Section [2.6].
“Development Note” is defined in Recital F.
“Eligible Household” means a household for which gross household income upon initial occupancy does not exceed the maximum income level for a Restricted Unit as specified in Section [2.1]. “IFH” means Interfaith Housing, Inc., a California non-profit corporation. “Indemnitees” is defined in Section [2.6].
“Lender” means the financial institution providing the loan(s). “Leasehold Deed of Trust” is defined in Recital F.
“LHTF” is defined as the Local Housing Trust Fund.
“Loan” is defined in Recital E.
“Loan Agreement” is defined in Recital B.
“Marketing and Tenant Selection Plan” is defined in Section 6.5. “SAHA” means Satellite Affordable Housing Associates , a California nonprofit public benefit corporation, and Borrower’s predecessor in interest. “Senior” is defined as a person who is age 62 years or older. “Notes” is defined in Recital F.
“Rent Restricted ” is defined in Section [2.2.1].
“Restricted Unit” means a dwelling unit which is reserved for occupancy at an Affordable Rent by Eligible Households of specified household income levels as set forth in Sections 2.1 and

2.2. “TCAC” means California Tax Credit Allocation Committee. “Tenant” means the occupant of a Restricted Unit.
“Veteran” is defined as a member who is a Veteran of the U.S. military and meets VA health care eligibility requirements.

EXHIBIT B
548
135.054/633510
6017309
5 1.2 Exhibits. The following Exhibits are attached hereto and incorporated into this Agreement by this reference:

A Leg al Description of Property
B Insurance Requirements
C Form of Annual Report

2. Use and Affordability Restrictions. Borrower hereby covenants and agrees, for itself and its successors and assigns, that the Property shall be used solely for the operation of a multifamily rental housing development for Seniors in compliance with the Loan Agreement , and the requirements set forth herein. Borrower represents and warrants that it has not entered into any agreement that would restrict or compromise its ability to comply with the occupancy and affordability restrictions set forth in this Agreement, and Borrower covenants that it shall not enter into any agreement that is inconsistent with such restrictions without the express written consent of City. The Borrower agrees to comply with affordability restrictions as published annually by the California Department of Housing and Community Development and not just the Federal Department of Housing and Urban Development exclusively.

2.1 Affordability and Occupancy Requirements of the City Restricted Units .

Throughout the term of this Agreement (as defined in Section 4.1 below) Borrower agrees that: (i) not less than 16 of the residential units shall be both Rent Restricted and occupied (or if vacant, available for occupancy) by Eligible Households whose gross household income is no greater than twenty percent (20 %) of AMI, (ii) not less than 9 of the residential units shall be both Rent Restricted and occupied (or if vacant, available for occupancy) by Eligible Households whose gross household income is no greater than thirty percent (30%) of AMI; (iii) 43 of the residential units shall be both Rent Restricted and occupied (or if vacant, available for occupancy) by Eligible Households whose gross household income is no greater than fifty percent (50%) of AMI, for a total of 68 of the residential units in the Project restricted to extremely low and very low income households; (iv) 10 of the residential units shall be both Rent Restricted and occupied (or if vacant, available for occupancy) by Eligible Households whose gross household income is no greater than sixty percent (60%) of AMI (“Restrictive Units); and (v) all other units, except for one (1) of the residential units in the Project which shall be a manager’s unit for which rent will not be restricted, will be restricted by the TCAC restrictive covenant to be recorded when the units are placed-in- service by TCAC’s definition (“ TCAC Units”). The Restricted Units shall generally reflect the unit bedroom mix of all of the units in the Project. Maximum unit occupancy standards shall be established according to TCAC regulations or in the absence of such regulations shall be two persons per bedroom plus one additional person. A total of 78 units will be allocated to the Local Housing Trust Fund (LHTF).

Number of Targeted
Low-Income Units
Percent of Area
Median-Moderate
Income (AMI) (20%-
60%)
Percentage of Low-
Income Units
(before rounding down)

EXHIBIT B
549
135.054/633510
6017309
6 16 20% 20.51
9 30% 11.54
43 50% 55.13
10 60% 12.82
City
has applied for and received an award of State LHTF to be used for the Development Loan for the Projec t and as a requirement of that program at least 30% of LHTF program funds and City’s matching funds (demonstrated through the City’s application to the State) must be allocated towards ELI Households (30% AMI or less); no more than 20% of program funds and matching funds may be allocated towards Moderate Income Households (Between 80% and 120% AMI), the remainder of program funds and matching funds may be alloc ated toward Lower Income Households (Between 30% to 80% AMI) The City’s affordability restrictions described herein are intended to conform to the LHTF program requirements.

In the event that recertification of tenant incomes indicates that the number of Restricted Units actually occupied by Eligible Households falls below the number reserved for each income group as specified in this Section 2.1, Borrower shall rectify the condition by renting the next available dwelling unit(s) in the Project to Eligible Household(s) until the required income mix is achieved. A dwelling unit shall qualify as “ Rent Restricted ” if the gross rent charged for such unit does not exceed the Affordable Rent for the applicable household income category as set forth in Section [2.2].

Notwithstanding anything to the contrary contained in this Agreement, if other Project lenders, Project investors, or regulatory agencies restrict a greater number of units than restricted by this Agreement or require stricter household income eligibility or affordability requirements than those imposed hereby, the requirements of such other lenders, investors or regulatory agencies shall prevail, including without limitation, the rent and occupancy requirements imposed in connection with the use of project based vouchers or other rent subsidies.

2.1.1. P roject Based Section 8 Units. To the extent allowed under the rules and regulations applicable to such program, Borrower agrees that Project Based Section 8 assistance received for the Project shall be prioritized to those Restricted Units serving the lowest income tenants in the Project. Notwithstanding any contrary provision of this Agreement, for units that are subsidized with Section 8 project-based vouchers, the rules and regulations applicable to such program shall prevail with respect to the setting of rents, implementation of occupancy requirements, and determination of gross household income.

2.1.3 Disabled Persons Occupancy.
a) Borrower shall cause the Project to be operated at all times in compliance with all applicable federal, state, and local disabled persons accessibility requirements including, but not limited to the applicable provisions of: (i) the Unruh Act, (ii) the California Fair Employment and Housing Act, (iii) Section 504 of the Rehabilitation Act of 1973, (iv) the United States Fair

EXHIBIT B
550
135.054/633510
6017309
7 Housing Act, as amended, (v) the Americans With Disabilities Act of 1990, and (vi) Chapters 11A and 11B of Title 24 of the California Code of Regulations, which relate to disabled persons access (collectively, the "Accessibility Requirements"). b) Borrower shall indemnify, protect, hold harmless and defend the City , and its board members, officers and employees, from all suits, actions, claims, causes of action, costs, demands, judgments and liens arising out of Borrower's failure to comply with the Accessibility Requirements. This obligation to indemnify survives termination of this Agreement, repayment of the City Loan and the reconveyance of the Deed of Trust.

2.1.4 Loss of Subsidy.

It is anticipated that certain Units in the Project (the "Subsidy Units") will receive Project-Based Section 8 or other rental subsidies (the "Rental Subsidy") throughout the Term, as reflected in the Financing Plan for the Project. If any change in federal law occurs, or any action (or inaction) by Congress or any federal or state agency occurs, which results in a material reduction, termination or nonrenewal of the Rental Subsidy through no fault of the Borrower, such that the Rental Subsidy shown on the Finance Plan for the Project approved by the City is no longer available, Borrower shall, in anticipation of such loss in Rental Subsidy, use good faith
efforts for a period of ninety (90) days, to identify and obtain alternative sources of rental subsidies and shall provide the City progress reports on Borrower's efforts to identify and obtain alternative sources of rental subsidies. If at the end of such ninety (90) day period Borrower is unable to secure an alternate source of rental subsidy, notwithstanding Section 2.2, Borrower may increase the rent on one or more of the City Restricted Units that overlap with a Subsidy Unit, up to sixty percent (60%) of AMI (“TCAC Maximum Rent Limit”), subject to the following requirements:
a) Any such rent increase must be pursuant to a transition plan approved by the City showing how the rent increase will be implemented, and which Restricted Units will be subject to the increase, and, if applicable, be consistent with remedial measures set forth in California Code of Regulations Title 4, Division 17, Chapter 1, Section 10337(a)(3) or successor regulation applicable to California's Federal and State Low Income Housing Tax Credit Program;
b) At the time Borrower requests an increase in the Restricted Unit rent, Borrower shall provide the City with a copy of the proposed Annual Operating Budget showing the impact of the loss or reduction of the Rental Subsidy; c) Any subsequent rent increases remain subject to Section [2.2] above; and, d) The
number of Restricted Units subject to the rent increase and the level of rent increase may not be greater than the amount required to ensure that the Project generates sufficient income to cover its operating costs and debt service as shown on the Annual Operating Budget, and as is necessary to maintain the financial stability of the Development.

EXHIBIT B
551
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8 e) Upon r
eceipt of any alternative rental subsidies, Borrower shall reduce the rents on the Restricted Units back to the Affordable Rents set out in Section

2.1, to the extent that the alternative rental subsidies provide sufficient income to cover the operating costs and debt service of the Development as shown on the Annual Operating Budget.

2.1.5 Rent Increases on Foreclosure.

Notwithstanding this Section 2.1, in the event that a Senior Lender (as defined in the Loan Agreement) foreclosures on the Project (or receives a deed in lieu of foreclosure), the Rents on one or more of the Restricted Units may be increased up to the TCAC Maximum Rent Limit to maintain the financial feasibility of the Project, subject to the following requirements:
a) Any such rent increase must be pursuant to a transition plan approved by the City showing: (i) how the rent increase will be phased-in; (ii) which Restricted Units will be subject to the increase; and (iii) the operating income and expenses for the Project comparing the current rent structure to the proposed rent structure;
b) The number of Restricted Units subject to the rent increase and the level of rent increase may not be greater than the amount required to ensure that the Project generates sufficient income to cover its operating costs and debt service, and as is necessary to maintain the financial stability of the Development; and
c) The rent increase may occur only at the time of renewal of the term of the lease of an existing Tenant or the time of leasing a Restricted Unit to a new tenant. Any subsequent rent increases remain subject to Section 2.1 above.

2.2 Rents for Restricted Units; Unit Sizes. For all Restricted Units rents shall be limited to Affordable Rents for households of the applicable income limit and presumed household size in accordance with Section 2.1. In the event that TCAC no longer publishes the income and rent information that this Agreement contemplates that TCAC will publish, respectively, the City shall provide Borrower with other income and rent determinations which are reasonably similar with respect to methods of calculation to those previously published by TCAC, as applicable. Notwithstanding the foregoing, no tenant qualifying for a Restricted Unit shall be denied continued occupancy of a unit in the Project because, after admission, such tenant's household income increases to exceed the qualifying limit for such Restricted Unit. A household which at initial occupancy qualifies in a particular income category shall be treated as continuing to be of such income category so long as the household’s gross income does not exceed one hundred forty percent (140%) of the applicable income limit. In the event the gross household income of a household that qualified at the applicable income limit at initial occupancy exceeds the applicable income limit for a unit, that unit will continue to be considered as satisfying the applicable income limit if the unit remains Rent-Restricted. In the event a tenant’s household income exceeds the limits specified in this Section, Borrower shall apply the rules applicable to the Project pursuant to Section 42 of the Internal Revenue Code of 1986, as amended and the

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9 federal Regulations applicable thereto. In the event of inconsistency between the provisions of this Section [2.2] and the rules applicable to the Project in connection with low-income housing tax credits, the rules applicable pursuant to such financing source shall prevail. a) For the purpose of determining whether a household is an Eligible Household, gross household income shall be determined in accordance with TCAC regulations and federal regulations applicable to low-income housing tax credits. b) Subject to Section 2.3(a), if, upon recertification of the income of a Tenant of a City-Assisted Unit, Borrower determines that a Tenant of a City-Assisted Unit has an Adjusted Income exceeding the maximum qualifying income for a 50% AMI Household, such Tenant shall be permitted to continue occupying the City- Assisted Unit and upon sixty (60) days written notice, t he Rent may be increased to one-twelfth (1/12th) of thirty percent (30%) of the actual Adjusted Income of the Tenant, and Borrower shall rent the next available Unit of the appropriate size to a 20% AMI Household, a 30% AMI Household, a 40% AMI Household, or a 50% AMI Household, as applicable, at a Rent not exceeding the maximum Rent specified in Section 2.2, or designate another Unit in the Development with a 20% AMI Household as a 20% Unit, a 30% AMI Household as a 30% Unit, a 40% AMI Household as a 40% Unit, or a 50% AMI Household as a 50% Unit, as applicable, at a Rent not exceeding the maximum Rent specified in Section [2.2(a)].
c) Initial Rents are subject to City approval. Rents may not be increased more often than once every twelve (12) months and by no more than five percent (5%) per year.

Borrower shall provide each Tenant with at least sixty (60) days written notice of any increase in Rent applicable to such Tenant.

2.3 Manager’s Unit. One (1) dwelling unit in the Project may be used as resident manager’s unit and shall be exempt from the occupancy and rent restrictions set forth in this Agreement.

2.4 No Condominium Conversion. Borrower shall not convert the Project to condominium or cooperative Borrowership or sell condominium or cooperative rights to the Project or any part thereof during the term of this Agreement.

2.5 Non-Discrimination; Compliance with Fair Housing Laws.

2.5.1 S election of Tenants. In order to ensure that there is an adequate supply of affordable housing within the City of Livermore for senior residents to the extent permitted by law and consistent with the program regulations for funding sources used for development of the Project, applications will be selected pursuant to an equitable selection method, and in accordance with a City approved guideline. Notwithstanding the foregoing, in the event of a conflict between this provision and the provisions of Section 42 of the Internal Revenue Code of 1986, as amended, the provisions of such Section 42 shall control. Lessee shall develop marketing policies or other rental policies and procedures approved by the City, as may be amended from time to time, to ensure that residents and people who qualify for the P roject are provided adequate notice and opportunity to rent units in the Project.

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10 2.5.2 Fa ir Housing. Borrower shall comply with state and federal fair housing laws in the marketing and rental of the units in the Project. Borrower shall accept as tenants, on the same basis as all other prospective tenants, persons who are recipients of federal certificates or vouchers for rent subsidies pursuant to the existing Section 8 program or any successor thereto.

2.5.3 No n-Discrimination. Borrower shall not restrict the rental, sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property, or any portion thereof, on the basis of race, color, religion, creed, sex, sexual orientation, disability, marital status, ancestry, or national origin of any person. Borrower covenants for itself and all persons claiming under or through it, and this Agreement is made and accepted upon and subject to the condition that there shall be no discrimination against or segregation of any person or group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property or part thereof, nor shall Borrower or any person claiming under or through Borrower establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in, of, or for the Property or part thereof.

Borrower shall include such provision in all deeds, leases, contracts and other instruments executed by
Borrower, and shall enforce the same diligently and in good faith.

All deeds, leases, and contracts pertaining to management of the Project, made or entered into by Borrower, its successors or assigns, as to any portion of the Property or the Improvements shall contain the following language:
(a) (1
) In Deeds, the following language shall appear:
“Gr
antee herein covenants by and for itself, its successors and assigns, and all persons claiming under or through it, that there shall be no discrimination against or segregation of a person or of a group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the property herein conveyed nor shall the grantee or any person claiming under or through the grantee establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the property herein conveyed. The foregoing covenant shall run with the land.” (b)
(1) In Leases, the following language shall appear:
“The l
essee herein covenants by and for the lessee and lessee’s heirs, personal representatives and assigns, and all persons claiming under the lessee or through the lessee, that this lease is made subject to the condition that there shall be no discrimination against or segregation of any person or of a group of persons on account of race, color, creed, religion, sex, sexual orientation, marital status,

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11 national origin, ancestry or disability in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the property herein leased nor shall the lessee or any person claiming under or through the lessee establish or permit any such practice or practices of discrimination of segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sublessees, subtenants, or vendees in the property herein leased.”
(c) In C
ontracts pertaining to management of the Project, the following language, or substantially similar language prohibiting discrimination and segregation shall appear:
“Th
ere shall be no discrimination against or segregation of any person or group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the property nor shall the transferee or any person claiming under or through the transferee establish or permit any such practice or practices of discrimination or segregation with reference to selection, location, number, use or occupancy of tenants, lessee, subtenants, sublessees or vendees of the land.”

2.6 R elocation. Notwithstanding eviction, persons residing on the Property shall not be displaced before suitable replacement housing is available. Borrower shall ensure that all occupants of the Property receive all notices, benefits and assistance to which they are entitled. All costs incurred in connection with the temporary and/or permanent displacement and/or relocation of occupants of the Property, including without limitation payments to a relocation consultant, moving expenses, and payments for temporary and permanent relocation benefits pursuant to any applicable relocation laws shall be paid by Borrower, and City shall have no responsibility for payment therefor. Borrower shall be liable for any and all claims for applicable relocation benefits sought by any current, former or future tenant of the Project.

To the greatest extent permitted by law, Borrower shall indemnify, defend (with counsel approved by City) and hold the City and its elected and appointed officers, officials, employees, agents, consultants, contractors, representatives and designated volunteers (collectively, the “Indemnitees”) harmless from and against all liability, loss, cost, expense (including without limitation attorneys’ fees and costs of litigation), claim, demand, action, suit, judicial or administrative proceeding, penalty, deficiency, fine, order, and damage (all of the foregoing collectively “Claims”) arising from the breach of Borrower’s obligations set forth in this Section whether or not any insurance policies shall have been determined to be applicable to any such Claims. Borrower’s indemnification obligations set forth in this Section (i) shall survive the expiration or earlier termination of this Agreement, and (ii) shall not extend to Claims to the extent arising from the gross negligence or willful misconduct of the Indemnitees. City does not and shall not waive any rights against Borrower that it may have by reason of any indemnity and hold harmless provision set forth in this Agreement because of the acceptance by City, or the deposit with City by Borrower, of any of the insurance policies described in th is Agreement.

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12 3. Tenant Income Certifications; Reporting Requirements; Access to Information; Inspections.

3.1 T enant Income Certification. Borrower or Borrower’s authorized agent shall obtain from each household prior to initial occupancy of each Restricted Unit, and on every anniversary thereafter, a written certificate containing all of the following in such format and with such supporting documentation as City may reasonably require:
(i) The identity of each household member; and
(ii) Th e total gross household income (as determined pursuant to Section [2.2].

Borrower shall retain such certificates for not less than five (5) years, and upon City’s request, shall provide copies of such certificates to City and make the originals available for City inspection.

3.2 Annual Report; Inspections. Following completion of construction of the Project, by not later than April 1 of each year during the term of this Agreement, Borrower shall submit an annual report (“Annual Report”) to the City in form satisfactory to City and attached at Exhibit C, together with a certification that the Project is in compliance with the requirements of this Agreement. Notwithstanding the Annual report requirements, Borrower shall submit to the City an initial lease up report containing the tenant certification and occupancy information described in this section. The Annual Report shall, at a minimum, include the following information for each dwelling unit in the Project: (i) unit number and name; (ii) number of bedrooms; (iii) current rent and other charges; (iv) move in date and dates of any vacancies during the previous year; (v) number of people residing in the unit; (vi) total gross household income of residents; (vii) documentation of source of household income; and (viii) the information required by Section 3.1.

Borrower shall include with the Annual Report, an income recertification for each household, documentation verifying tenant eligibility, and such additional information as City may reasonably request from time to time in order to demonstrate compliance with this Agreement. The Annual Report shall conform to the format requested by City; provided however, during such time that the Project is subject to a regulatory agreement restricting occupancy and/or rents pursuant to requirements imposed in connection with the use of state or federal low-income housing tax credits, Borrower may satisfy the requirements of this Section that pertain to tenant income certification and rents by providing City with a copy of compliance reports required in connection with such financing.

In addition to the information described above, the Annual Report shall include the following:
(i) A Project income and expense statement for the reporting period; (ii)
Proposed annual budget for the next fiscal year which sets forth Borrower’s estimate of operating income, operating expenses and debt service for the year, amounts payable to reserves and proposed rent adjustments;
(iii)
A report on management, maintenance and other issues anticipated to affect the current budget needs of the Project as well as the amount in the Project’s reserve accounts and

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13 the amount expected to be needed for major repairs or other needs during the new fiscal year; (iv) In
formation on the status of the waiting list for units, including the number of households on the list and the number of persons qualifying for each of the City’s selection preference categories on the list, and the number of applicants screened and denied on the waitlist; (
v) A financial audit of the books and records of the Project prepared in accordance with generally accepted auditing standards by an independent certified public accountant. City may require the audit to be accompanied by a supplemental report prepared in accordance with City’s requirements; and
(vi) City m
ay, from time to time request additional or different information, and Borrower shall promptly supply such information in the reports required hereunder.

3.3. M aintenance of Records.

3.3.1 B
orrower shall maintain all records regarding the construction of the Project for five (5) years after final payment and all other pending matters are closed. Borrower shall also maintain tenant leases, income certifications and other matters related to the leasing of the affordable units for a period of five (5) years after the final date of occupancy by the tenant.

3.3.2 R
ecords must be kept accurate and up-to-date. City shall notify Borrower of any records it deems insufficient. Borrower shall have thirty (30) calendar days from such notice to correct any specified deficiency in the records, or, if more than thirty (30) days shall be reasonably necessary to correct the deficiency, Borrower shall begin to correct the deficiency within thirty (30) days and diligently pursue the correction of the deficiency as soon as reasonably possible as determined by the City.

3.4 A ccess to Records; Inspections.

3.4.1 B
orrower shall provide City and its authorized agents and representatives access to any books, documents, papers and records of the Project for the purpose of making audits, examinations, excerpts and transcriptions.

3.4.2 W
ith 48-hours’ prior written notice, during normal business hours and as often as may be deemed necessary, City and its authorized agents and representatives shall be permitted access to and the right to examine the Project and the Property and to interview tenants and employees of the Project, for the purpose of verifying compliance with applicable regulations and compliance with the conditions of this Agreement and the other City Documents.

4. Term of Agreement.

4.1 Term of Restrictions. This Agreement shall remain in effect until the fifty-five (55th) anniversary of recordation of this Agreement in the Official Records.

4.2 Ef fectiveness Succeeds Conveyance of Property and Repayment of Loan. This Agreement shall remain effective and fully binding for the full term hereof regardless of (i) any sale,

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14 assignment, transfer, or conveyance of the Project or Borrower’s fee interest in the Property, or any part thereof or interest therein, (ii) any payment, prepayment or extinguishment of the Loan, the Notes (iii) any reconveyance of the Deed of Trust.

4.3 R econveyance. Upon the termination of this Agreement, the Parties agree to execute and record appropriate instruments to release and discharge this Agreement; provided, however, the execution and recordation of such instruments shall not be necessary or a prerequisite to the termination of this Agreement upon the expiration of the term.

5. Binding Upon Successors; Covenants to Run with the Land. Borrower hereby subjects its interest in the Property and the Project to the covenants and restrictions set forth in this Agreement. The City and Borrower hereby declare their express intent that the covenants and restrictions set forth herein shall be deemed covenants running with the land and shall be binding upon and inure to the benefit of the heirs, administrators, executors, successors in interest, transferees, and assigns of Borrower and City, regardless of any sale, assignment, conveyance or transfer of the Property, the Project or any part thereof or interest therein. Any successor-in-interest to Borrower, including without limitation any purchaser, transferee or lessee of the Property or the Project (other than the tenants of the individual dwelling units within the Project) shall be subject to all of the duties and obligations imposed hereby for the full term of this Agreement. Each and every contract, deed, ground lease or other instrument affecting or conveying the Property or the Project or any part thereof, shall conclusively be held to have been executed, delivered and accepted subject to the covenants, restrictions, duties and obligations set forth herein, regardless of whether such covenants, restrictions, duties and obligations are set forth in such contract, deed, ground lease or o
ther instrument. If any such contract, deed, ground lease or other instrument has been executed prior to the date hereof, Borrower hereby covenants to obtain and deliver to City an instrument in recordable form signed by the parties to such contract, deed, ground lease or other instrument pursuant to which such parties acknowledge and accept this Agreement and agree to be bound hereby. Borrower agrees for itself and for its successors that in the event that a court of competent jurisdiction determines that the covenants herein do not run with the land, such covenants shall be enforced as equitable servitudes against the Property and the Project in favor of City.

Notwithstanding anything to the contrary contained herein, the terms of this Section 5 shall be subject to the terms of any subordination agreement entered into by City in accordance with the terms of Section 7 hereof.

6. Property Management; Repair and Maintenance; Marketing.

6.1 Management Responsibilities. Borrower shall be responsible for all management functions with respect to the Property and the Project, including without limitation the selection of tenants, certification and recertification of household income and eligibility, evictions, collection of rents and deposits, maintenance, landscaping, routine and extraordinary repairs, replacement of capital items, and security. City shall have no responsibility for management or maintenance of the Property or the Project. Borrower shall submit its written management policies with respect to the Project (the “Management Plan”) to the City for its review and shall amend such policies in any way necessary to ensure that such policies comply with the provisions of this Agreement. The Management Plan shall minimally include the following:
a) A parking management plan which details, among other things, how

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15 parking spaces will be allocated assigned, and how parking will be managed to encourage tenants, services providers and guests to use parking in accordance with the plan; b) Pr
ocedures for maintenance and management of the Project; c) Pr
ocedures for dealing with tenant or neighborhood issues or concerns; d) Pr
ocedures for maintaining a reserve account, budgeting for maintenance and repair needs as well as long-term rehabilitation needs, and handling net cash flow; and e) Su
ch other requirements and criteria/procedures as City may determine appropriate.

6.2 Management Entity and Replacement of Management Agent . City shall have the right to review and approve the qualifications of the management entity proposed by Borrower for the Project, and shall have the right to review and approve any agreement executed between Borrower and the management entity, which approval shall not be unreasonably withheld, conditioned or delayed. The contracting of management services to a management entity shall not relieve Borrower of its primary responsibility for proper performance of management duties.

City hereby approves Satellite Affordable Housing Associates Property Management, as the initial management entity for the Project. Any subsequent management entity shall be subject to City review and approval, which shall not be unreasonably withheld, conditioned or delayed. Upon City determination and delivery of written notice to Borrower that Borrower has failed to operate the Project in accordance with this Agreement, subject to any applicable cure period and the approval of the Project lenders and equity investors, City may require Borrower to contract with a qualified management agent selected by City and approved by the Project lender and equity investor, to operate the Project, or to make such other arrangements as City deems necessary to ensure performance of the required functions. An on-site property management representative is required to reside on the property. If the on-site property management representative is not also the assigned property management staff for the Project, then the representative shall still be available to address resident issues and to serve as the point of contact for City business and the public after regular business hours at the Property.

6.3 Repair, Maintenance and Security. Throughout the term of this Agreement, Borrower shall at its own expense, maintain the Property and the Project in good physical condition, in good repair, and in decent, safe, sanitary, habitable and tenantable living conditions in conformity with all applicable state, federal, and local laws, ordinances, codes, and regulations.

Without limiting the foregoing, Borrower agrees to maintain the Project and the Property (including without limitation, the residential units, common areas, meeting rooms, landscaping, driveways, parking areas and walkways) in a condition free of all waste, nuisance, debris, unmaintained landscaping, graffiti, disrepair, abandoned vehicles/appliances, and illegal activity, and shall take all reasonable steps to prevent the same from occurring on the Property or at the Project. Borrower shall prevent and/or rectify any physical deterioration of the Property and the Project and shall make all repairs, renewals and replacements necessary to keep the Property and the improvements located thereon in good condition and repair. Borrower shall provide adequate security measures for the Project, including without limitation, the installation of

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16 adequate lighting and deadbolt locks.

Addi
tionally, Borrower agrees to participate in the City’s Crime Free Multi-Family Housing Program, which is designed to help Borrowers and managers of multi-family housing to prevent and reduce the incidence of crime occurring at multi-family housing properties. Borrower agrees Borrower or Borrower ’s property management designee(s) shall participate and become certified in the program, including ensuring implementation of the crime-free lease addendum for all tenants on the Property.

6.3.2 Additional Requirements. All construction work and professional services for the Project shall be performed by persons or entities licensed or otherwise authorized to perform the applicable work or service in the State of California and shall have a current City of Livermore business license if required under local law. To the extent allowed by state and federal laws, Borrower shall limit the installation of satellite dish, antenna and other such equipment to screened locations on the Property as approved by the City. Borrower shall diligently work to resolve complaints related to noise, parking, litter or other neighborhood concerns.

6.4 City’s Right to Perform Maintenance. In the event that Borrower breaches any of the covenants contained in Section 6.3, and such default continues for a period of ten (10) days after written notice from City (with respect to graffiti, debris, and waste material) or thirty (30) days after written notice from City (with respect to landscaping, building improvements and general maintenance), then City, in addition to any other remedy it may have under this Agreement or at law or in equity, shall have the right, but not the obligation, to enter upon the Property and perform all acts and work necessary to protect, maintain, and preserve the improvements and the landscaped areas on the Property. All costs expended by City in connection with the foregoing, shall constitute an indebtedness secured by the Deed of Trust, and shall be paid by Borrower to City upon demand.

All such sums remaining unpaid thirty (30) days following delivery of City’s invoice therefor shall bear interest at the lesser of 10% per annum or the highest rate permitted by applicable law.

6.5 Marketing and Tenant Selection Plan. Not later than ninety (90) days following commencement of construction work on the Project, Borrower shall submit for City review and approval, a plan for marketing and tenant selection for the Property (“Marketing and Tenant Selection Plan” or “Plan”). To the extent permitted by Applicable Laws, Borrower shall reasonably work with the City to incorporate the City’s applicant selection preferences for Livermore residents and Veterans into the Plan for units which do not receive HUD 202, State HCD’s No Place Like Home Funding, Alameda County A1 Bond or Livermore Housing Authority subsidies/funding. The Plan shall address in detail how Borrower plans to market the City Restricted Units to prospective Eligible Households in accordance with fair housing laws and this Agreement, Borrower’s tenant selection criteria, and how Borrower plans to certify the eligibility of Eligible Households. The Plan shall include the proposed management agreement and the form of rental agreement that Borrower proposes to enter into with Project tenants. Borrower shall abide by the terms of the Marketing and Tenant Selection Plan in marketing, managing, and maintaining the Property and the Project, and throughout the term of this Agreement, shall submit proposed modifications to City for review and approval.

In addition to the foregoing, the Marketing and Tenant Selection Plan shall address the following:

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17 (a) The actions to be taken by Borrower to affirmatively market units in compliance with fair housing laws and in compliance with City’s policies and procedures, including the policies described in Section [2.5] above; (b) Criteria for determining tenant eligibility, including certification of household income and size, age of household members or other qualifying criteria, and establishing reasonable occupancy standards (which shall not exceed standards established by state and federal fair housing laws and state housing and building codes), and procedures for screening prospective tenants, including obtaining credit reports, unlawful detainer reports, landlord references and criminal background investigations; (c) A
requirement that eligible tenants be selected based on order of application, selection preference, lottery or other reasonable method approved by City and incorporates a method of prioritizing and establishing a screening order for applications. (d) A
requirement that eligible applicants be notified of eligibility and, when possible, be provided an estimate regarding when a unit may be available; (e) A
requirement that ineligible applicants be notified of the reason for their ineligibility;
(f) Sp
ecific procedures through which applicants deemed to be ineligible may appeal this determination;
(g) M
aintenance of a waiting list of eligible applicants, including specific procedures for screening Project Based Section 8 eligible applicants in coordination with the Housing Authority of the City of Livermore;
(h) Specific procedures for obtaining documentation regarding prospective tenants’ incomes, as necessary, to certify that such income does not exceed income limits; (i) S
pecific procedures for certification and recertification of household incomes and procedures for handling over-income tenants; (j) A
requirement that a written rental agreement (subject to City approval) be executed with each eligible household selected to occupy a unit.

6.6 Lease Provisions.

No later than four (4) months prior to the date construction of the Project is projected to be complete, Borrower shall submit to the City Borrower’s proposed form of lease agreement for the City's review and approval. The form of lease must comply with all requirements of this Agreement, the other Loan Documents and must, among other matters:
1) Provide for termination of the lease and consent by the Tenant to immediate eviction for failure: (i) to provide any information required under this Agreement or reasonably

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18 requested by Borrower to establish or recertify the Tenant's qualification, or the qualification of the Tenant's household, for occupancy in the Project in accordance with the standards set forth in this Agreement, or (ii) to qualify as a 20%, 30%, 50%, or 60% AMI household, as applicable, as a result of any material misrepresentation made by such Tenant with respect to the income computation.
2) Be for an initial term of not less than one (1) year, unless by mutual agreement between the Tenant and Borrower, and provide for no increase in Rent during such year. After the initial year of tenancy, the lease may be month -to-month by mutual agreement of Borrower and the Tenant. Notwithstanding the above, any Rent increases shall be subject to the requirements of Section [2.3].
3) Include a provision which shall require a Tenant who is residing in a Restricted Unit made accessible pursuant to Section 5.11 of the Loan Agreement and who is not in need of an accessible unit to move to a non-accessible unit when a non-accessible unit becomes available and another Tenant or prospective Tenant is in need of an accessible unit. 4) Include any provisions necessary to comply with the requirements of the Violence Against Women Reauthorization Act of 2013 (Pub. L. 113 –4, 127 Stat. 54) applicable to HUD - funded programs.
5) Any termination of a lease or refusal to renew a lease for a Restricted Unit within the Development must be preceded by not less than sixty (60) days written notice to the Tenant by Borrower specifying the grounds for the action.
6) Include a detailed listing of reasonable rules of conduct and occupancy which shall be in writing, shall be consistent with federal and state law, and shall be provided to each tenant upon occupancy;
7) Include a requirement that there be no storage on balconies and patios and that tenants must keep all balconies, patios and other exterior areas neat, clean and clutter free, including no clotheslines or laundry.

6.7 Resident Services Plan and Budget.
a) No later than six (6) months prior to the projected date of the completion of the Project, Borrower shall submit to the City a plan for providing supportive services to the Tenants (the "Resident Services Plan") and a budget for providing those services (the "Resident Services Budget") for the initial year of operation of the Project. The Resident Services Plan must identify service provider(s) and staffing levels, and describe the services provided. The Resident Services Plan must include copies of contracts and/or memoranda of understanding for the provision of services by service providers, along with any annual compliance certifications. The Resident Services Budget must state the dollar value of the services, and the funding source(s) for the services (cash or in-kind).
b) Upon receipt by the City of the proposed Resident Services Plan and Resident Services Budget, the C ity shall promptly review the same and approve or disapprove it within fifteen (15) days, provided that such approval shall not be unreasonably denied. If the Resident

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19 Services Plan and/or Resident Services Budget are not approved by the C ity, the C ity shall set forth in writing and notify Borrower of the City's reasons for withholding such approval, which may include a request by the C ity for a change in the nature or scope of resident services or a change in service provider. Borrower shall, within fifteen (15) days thereafter, submit a revised Resident Services Plan and/or Resident Services Budget for City approval in accordance with this subsection. If the City does not approve the revised Resident Service Plan, Borrower shall be in Default hereunder.
c) Borrower shall thereafter submit to the C ity annual updates to the Resident Services Plan and Resident Services Budget by October 1st of each year of operation of the Development, identifying any changes made to the previously approved Resident Services Plan and Resident Services Budget. Any revisions to the Resident Services Plan and Resident Services Budget shall be subject to the C ity's review and approval and the process for timing and review of such revisions shall be subject to the process identifi ed in Section 6.7.

6.8 Approval of Amendments. If City has not responded to any submission of the Management and Tenant Selection Plan, the proposed management entity, the proposed management agreement, the Management Plan, the Resident Services Plan or Resident Service Budget or a proposed amendment or change to any of the foregoing within sixty (60) days following City’s receipt of such plan, proposal, agreement or amendment, the plan, proposal, agreement, or amendment shall be deemed approved by City.

6.9 Fe es, Taxes, and Other Levies. Borrower shall be responsible for payment of all fees, assessments, taxes, charges, liens and levies applicable to the Property or the Project, including without limitation possessory interest taxes, if applicable, imposed by any public entity, and shall pay such charges prior to delinquency. However, Borrower shall not be required to pay any such charge so long as (a) Borrower is contesting such charge in good faith and by appropriate proceedings, (b) Borrower maintains reserves adequate to pay any contested liabilities, and (c) on final determination of the proceeding or contest, Borrower immediately pays or discharges any decision or judgment rendered against it, together with all costs, charges and interest. The foregoing is not intended to impair Borrower’s ability to apply for any applicable exemption from property taxes or other assessments and fees.

6.10 Insurance Coverage. Throughout the term of this Agreement Borrower shall comply with the insurance requirements set forth in Exhibit B, and shall, at Borrower’s expense, maintain in full force and effect insurance coverage as specified in Exhibit B.

6.11 Property Damage or Destruction. If any part of the Project is damaged or destroyed, Borrower shall repair or restore the same, consistent with the occupancy and rent restriction requirements set forth in this Agreement. Such work shall be commenced as soon as reasonably practicable after the damage or loss occurs and shall be completed within one year thereafter or as soon as reasonably practicable, provided that insurance proceeds are available to be applied to such repairs or restoration within such period and the repair or restoration is financially feasible.

During such time that lenders or low-income housing tax credit investors providing financing for the Project impose requirements that differ from the requirements of this Section the requirements of such lenders and investors shall prevail.

EXHIBIT B
563
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20 7. Recordation; Subordination. This Agreement shall be recorded in the Official Records of Alameda County. The City agrees that the City will not withhold consent to reasonable requests for subordination of this Agreement to deeds of trust provided for the benefit of lenders identified in the financing plan submitted to City for the Project, as such plan may be updated with City approval, provided that the instruments effecting such subordination include reasonable protections to the City in the event of default, including without limitation, extended notice and cure rights.

8. Transfer and Encumbrance.

8.1 Re strictions on Transfer and Encumbrance. During the term of this Agreement, except as permitted pursuant to the Loan Agreement or this Agreement, Borrower shall not directly or indirectly, voluntarily, involuntarily or by operation of law make or attempt any total or partial sale, transfer, conveyance, assignment or lease (collectively, “Transfer”) of the whole or any part of the Property, the Project, or the improvements located on the Property, without the prior written consent of the City, which approval shall not be unreasonably withheld, conditioned or delayed.

In addition, prior to the expiration of the term of this Agreement, except as expressly permitted by this Agreement or the Loan Agreement, Borrower shall not undergo any significant change of Borrowership without the prior written approval of City. For purposes of this Agreement, a “significant change of Borrowership” shall mean a transfer of the beneficial interest of more than twenty-five percent (25%) in aggregate of the present Borrowership and /or control of Borrower, taking all transfers into account on a cumulative basis; provided however, neither the admission of an investor limited partner, nor the transfer by the investor limited partner to subsequent limited partners shall be restricted by this provision.

8.2 P ermitted Transfers. Notwithstanding any contrary provision hereof, the prohibitions set forth in this Article shall not be deemed to prevent: (i) the granting of temporary or permanent easements or permits to facilitate development of the Property; (ii) the dedication of any property required pursuant to this Agreement; (iii) the lease of individual residences to tenants for occupancy as their principal residence in accordance with the Regulatory Agreement; (iv) assignments creating security interests for the purpose of financing the acquisition, construction or permanent financing of the Project and subject to the requirements of Article IX , or Transfers directly resulting from the foreclosure of, or granting of a deed in lieu of foreclosure of, such a security interest; (v) the admission of limited partners and any transfer of limited partnership interests in accordance with Borrower’s agreement of limited partnership (the “Partnership Agreement”); (vi) the removal of Borrower’s general partner by the investor limited partner for a default under the Partnership Agreement, provided that the replacement general partner is an entity reasonably satisfactory to City or is the investor limited partner or an affiliate of the investor limited partner that will serve as general partner for an interim period of no more than 180 days; or (vii) granting of a purchase option or right of first refusal and the exercise thereof resulting in a the transfer of the project or the limited partner’s interest to a nonprofit entity that is tax -exempt under Section 501(c)(3) of the Internal Revenue Code of 1986 as amended, or to a limited liability company whose sole member is a nonprofit entity that is tax- exempt under Section 501(c)(3) of the Internal Revenue Code of 1986 as amended, provided such replacement general partner is reasonably satisfactory to City.

8.3 R equirements for Proposed Transfers. The City may, in the exercise of its sole but

EXHIBIT B
564
135.054/633510
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21 reasonable discretion, consent to a proposed Transfer of this Agreement, the Property, the Improvements or part thereof if all of the following requirements are met (provided however, the requirements of this Section 8.4 shall not apply to Transfers described in clauses (i), (ii), (iii), (v), and (vii) of Section 8.3, and solely with respect to removal of the general partner by the investor limited partner for a default under the Partnership Agreement, clause (vi) of Section 8.3, provided that the provisions of this Section 8.4 shall apply to the selection of a replacement general partner in the event of a removal of the general partner in accordance with clause (vi) of Section 8.3):
(i) The proposed transferee demonstrates to the City’s satisfaction that it has the qualifications, experience and financial resources necessary and adequate as may be reasonably determined by the City to competently complete and manage the Project and to otherwise fulfill the obligations undertaken by the Borrower under this Agreement. (ii) The Borrower and the proposed transferee shall submit for City review and approval all instruments and other legal documents proposed to effect any Transfer of all or any part of or interest in the Property, the Improvements or this Agreement together with such documentation of the proposed transferee’s qualifications and development capacity as the City may reasonably request.
(iii) The proposed transferee shall expressly assume all of the rights and obligations of the Borrower under this Agreement and the other City Documents arising after the effective date of the Transfer and all obligations of Borrower arising prior to the effecti ve date of the Transfer (unless Borrower expressly remains responsible for such obligations) and shall agree to be subject to and assume all of Borrower’s obligations pursuant to all conditions and restrictions set forth in the City Documents.
(iv) Except in the case of partnership interest Transfers, the Transfer shall be effectuated pursuant to a written instrument satisfactory to the City in form recordable in the Official Records.
(v) The final form of the Partnership Agreement and any subsequent amendments that affect the City’s economic interests under this Agreement or the City Documents shall be subject to City’s review and approval. Amendments to the Partnership Agreement solel y to effectuate Permitted Transfers shall not require the City’s review and approval.

Consent to any proposed Transfer may be given by the City’s Authorized Representative unless the City’s Authorized Representative, in his or her discretion, refers the matter of approval to the City Council. If the City has not rejected a proposed Transfer, requested additional information regarding a proposed Transfer, or notified Borrower that City Council approval will be required in writing within sixty (60) days following City’s receipt of written request by Borrower, the proposed Transfer shall be deemed approved provided that the provisions of this Section 8.4 shall apply to the selection of a replacement general partner in the event of a removal of the general partner in accordance with clause (vi) of Section 8.3 and replacement of the general partner with any entity other than the investor limited partner or any affiliate of the investor limited partner that will serve as general partner for an interim period of no more than 180 days).

EXHIBIT B
565
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22 8.4 E ffect of Transfer without City Consent. In the absence of specific written agreement by the City, no Transfer of the Property or the Project shall be deemed to relieve the Borrower or any other party from any obligation under this Agreement. It shall be an Event of Default hereunder entitling City to pursue remedies including without limitation, acceleration of the Loan and/or foreclosure under the Deed of Trust if without the prior written approval of the City, Borrower assigns or Transfers this Agreement, the Improvements, or the Property in violation of Section 8. This Section 8.4 shall not apply to Transfers described in clauses (i), (ii), (iii), (iv), (v) and (vii) of Section 8.2. and solely with respect to the removal of the general partner by the investor limited partner for a default under the Partnership Agreement, clause (vi) of Section 8.2, provided that the provisions of this Section 8.3 shall apply to the selection of a replacement general partner in the event of a removal of the general partner in accordance with clause (vi) of Section

9. Default and Remedies.

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23 9.1 E vents of Default. The occurrence of any one or more of the following events shall constitute an event of default hereunder (“Event of Default”):
(i) The occurrence of a Transfer in violation of Section 8 hereof; (ii) Borrower’s failure to maintain insurance on the Property and the Project as required hereunder, and the failure of Borrower to cure such default within five (5) days; (iii) Subject to Borrower’s right to contest the following charges, Borrower’s failure to pay taxes or assessments due on the Property or the Project or failure to pay any other charge that may result in a lien on the Property or the Project, and Borrower’s failure to cure such default within thirty (30) days of delinquency, but in all events prior to the date upon which the holder of any such lien has the right to foreclose thereon; (iv) A default arises under any loan secured by a mortgage, deed of trust or other security instrument recorded against the Property and remains uncured beyond any applicable cure period such that the holder of such security instrument has the right to accelerate repayment of such loan;
(v) A default arises under the Loan Agreement, the Notes, or the Deed of Trust, and remains uncured beyond the expiration of any applicable cure period; (vi) Borrower’s default in the performance of any term, provision or covenant under this Agreement (other than an obligation enumerated in this Section 9.1), and unless such provision specifies a shorter cure period for such default, the continuation of such default for ten (10) days in the event of a monetary default or thirty (30) days in the event of a non- monetary default following the date upon which City shall have given written notice of the default to Borrower, or if the nature of any such non-monetary default is such that it cannot be cured within thirty (30) days, Borrower’s failure to commence to cure the default within thirty (30) days and thereafter prosecute the curing of such default with due diligence and in good faith, but in no event longer than ninety (90) days from receipt of the notice of default, unless City agrees to such longer period, in its reasonable discretion.

9.2 Remedies. Upon the occurrence of an Event of Default and its continuation beyond any applicable cure period, City may proceed with any of the following remedies:

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24 (i) Bring an action for equitable relief seeking the specific performance of the terms and conditions of this Agreement, and/or enjoining, abating, or preventing any violation of such terms and conditions, and/or seeking declaratory relief; (ii) Accelerate and declare the balance of the Notes and interest accrued thereon immediately due and payable and proceed with foreclosure under the Deed of Trust; (iii) For violations of obligations with respect to rents for Restricted Units, impose as liquidated damages a charge in an amount equal to the actual amount collected in excess of the Affordable Rent; and
(iv) Pursue any other remedy allowed under the City Documents or at law or in equity.

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568
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25 person, by City or by operation of law, from performance of any obligation under any City Document; (vi) the release or substitution in whole or in part of any security for repayment of the indebtedness evidenced by the Notes; and (vii) City’s failure to properly perfect any lien or security interest given as security for repayment of the indebtedness evidenced by the Notes; and (c) Th
e obligations of Borrower to indemnify the Indemnitees shall survive any repayment or discharge of the indebtedness evidenced by the Notes, any foreclosure proceeding, any foreclosure sale, any delivery of any deed in lieu of foreclosure, and any release of record of the lien of the Deed of Trust.

11. Miscellaneous.

11.1 Amendments. This Agreement may be amended or modified only by a written instrument signed by both Parties.

EXHIBIT B
569
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26 Interfaith Housing, Inc.
550 Hillcrest Avenue
Livermore, CA 94550
Attn: President
Wi
th a copy to:

Gubb &
Barshay LLP
505 14th Street, Suite 450
Oakland, CA 94612
Attention: Erica Williams Orcharton
And a
copy to Borrower’s limited partner:

NE
F Assignment Corporation
10 South Riverside Plaza
Suite 1700
Chicago, Illinois 60606
Attention: General Counsel
Email: [email protected] with subject line of SMT #83146; 83452
Wi
th a copy to:

NE
F Assignment Corporation
10 South Riverside Plaza
Suite 1700
Chicago, Illinois 60606
Attention: SVP Asset Management
And:

Boc
arsly Emden Cowan Esmail & Arndt LLP
633 W. Fifth Street, Suite 5880
Los Angeles, California 90017
Attention: Rachel Rosner, Esq

EXHIBIT B
570
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27 b) In addition to the notice required above, Borrower shall comply with the requirements set forth in California Government Code Sections 65863.10 and 65863.11. Such notice requirements include: (i) a twelve (12) month notice to existing tenants, prospective tenants and Affected Public Agencies (as defined in California Government Code Section 65863.10(a), which would include the City Manager ) prior to the expiration of the Term, (ii) a six (6) month notice requirement to existing tenants, prospective tenants and Affected Public Agencies prior to the expiration of the Term; (iii) a notice of an offer to purchase the Development to "qualified entities" (as defined in California Government Code Section 65863.11(d)), if the Development is to be sold within five (5) years of the end of the Term; (iv) a notice of right of first refusal within the one hundred eighty (180) day period that qualified entities may purchase the Development.

11.6 Parties Not Co-Venturers; Independent Contractor; No Agency Relationship.

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571
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28 11.10 Time is of the Essence. Time is of the essence in the performance of this Agreement.

11.15 Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be an original and all of which together shall constitute one agreement.

11.17 Special Provision. In the event that the Lender is no longer in operation, Borrower shall make all payments due to the California Department of Housing and Community Development.

SIGNATURES ON FOLLOWING PAGE(S).

EXHIBIT B
572
29 IN WITNESS WHEREOF, the Parties have executed this Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants as of the date first written above.

CIT
Y:

CIT

Y OF LIVERMORE,
a California municipal corporation
By:

Print Name: Marianna A. Burch
Title: City Manager
ATTES
T:

By:

City Clerk
APP
ROVED AS TO FORM:

Deputy/Assistant/Senior Assistant/City Attorney
BO
RROWER:

Pac Avenue, L.P.,
a California limited partnership
By:

Pac Avenue LLC,
a California limited liability company,
its general partner
By:

EXHIBIT B
573
ACKNO

I cert
ify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

EXHIBIT B
574
Exhibit A
LEGA

L DESCRIPTION OF THE PROPERTY

EXHIBIT B
575
EXH
IBIT A
LEGA

L DESCRIPTION OF THE PROPERTY
ALL TH

AT REAL PROPERTY IN THE CITY OF LIVERMORE, COUNTY OF ALAMEDA, STATE OF CALIFORNIA, DESCRIBED AS FOLLOWS:

PA
RCEL 2, OF PARCEL MAP 10858, FILED NOVEMBER 27, 2024, IN BOOK 360 OF PARCEL MAPS, AT PAGES 87, 88, and 89.

APN:
a portion of 099-0950-008-02

EXHIBIT B
576

EXHIBIT B
577
Exhibit B
Ins
urance Requirements

EXHIBIT B
578

SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE

THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS.

INSURER(S) AFFORDING COVERAGE
INSURER F :

INSURER E :

INSURER D :

INSURER C :

INSURER B :

INSURER A :

NAIC #
NAME:

CONTACT
(A/C, No):

FAX
E-MAIL
ADDRESS:

PRODUCER
(A/C, No, Ext):

PHONE

INSURED
REVISION NUMBER:CERTIFICATE NUMBER:COVERAGES
IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must have ADDITIONAL INSURED provisions or be endorsed.

THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS

OTHER:
(Per accident)
(Ea accident)
$
$
N / A
SUBR
WVD
ADDL
INSD

COMBINED SINGLE LIMIT

AUTOS ONLY

AUTOSAUTOS ONLY

NON-OWNED

SCHEDULEDOWNED

ANY AUTO

AUTOMOBILE LIABILITY
Y / N

WORKERS COMPENSATION

AND EMPLOYERS' LIABILITY
OFFICER/MEMBER EXCLUDED?
(Mandatory in NH)
DESCRIPTION OF OPERATIONS below
If yes, describe under

ANY PROPRIETOR/PARTNER/EXECUTIVE
$
$
$
E.L. DISEASE - POLICY LIMIT
E.L. DISEASE - EA EMPLOYEE
E.L. EACH ACCIDENT
ER
OTH-

STATUTE
PER

LIMITS(MM/DD/YYYY)

POLICY EXP
(MM/DD/YYYY)

POLICY EFF

POLICY NUMBERTYPE OF INSURANCELTR
INSR
DESCRIPTION OF OPERATIONS / LOCATIONS / VEHICLES (ACORD 101, Additional Remarks Schedule, may be attached if more space is required)

EXCESS LIAB
UMBRELLA LIAB $EACH OCCURRENCE
$AGGREGATE
$
OCCUR

CLAIMS-MADE
DED RETENTION $
$PRODUCTS - COMP/OP AGG
$GENERAL AGGREGATE
$PERSONAL & ADV INJURY
$MED EXP (Any one person)
$EACH OCCURRENCE

DAMAGE TO RENTED
$PREMISES (Ea occurrence)

COMMERCIAL GENERAL LIABILITY

CLAIMS-MADE OCCUR
GEN'L AGGREGATE LIMIT APPLIES PER:

POLICY PRO-

JECT LOC

CERTIFICATE OF LIABILITY INSURANCE

DATE (MM/DD/YYYY)

CANCELLATION

AUTHORIZED REPRESENTATIVE
ACORD 25 (2016/03)
© 1988-2015 ACORD CORPORATION. All rights reserved.

CERTIFICATE HOLDER
The ACORD name and logo are registered marks of ACORD
HIRED

City of Livermore, its officers, officials,
employees, or volunteers
1052 S. Livermore Avenue
Livermore CA 94550
USA

EXHIBIT B
579
ACORD 101 (2008/01)
The ACORD name and logo are registered marks of ACORD
© 2008 ACORD CORPORATION. All rights reserved.

THIS ADDITIONAL REMARKS FORM IS A SCHEDULE TO ACORD FORM, FORM NUMBER: FORM TITLE:

ADDITIONAL REMARKS
ADDITIONAL REMARKS SCHEDULE Page of
AGENCY CUSTOMER ID:

LOC #:

AGENCY

CARRIER NAIC CODE

POLICY NUMBER

NAMED INSURED
EFFECTIVE DATE:

RE: Pacific Ave project

EXHIBIT B
580
Exhibit C
Fo
rm of Annual Report

EXHIBIT B
581

MULTI-FAMILY RENTAL PROJECT ANNUAL REPORT
Property Conditions
List any physical defects or major repair work undertaken within the reporting period:

Comments on any general management/performance issues within the reporting period:

Compliance with Required Number of Restricted Units
Total number of Restricted Units which are currently occupied (or reserved and available for occupancy):

Number of vacant Restricted Units at the time of this report:

I hereby certify that these units in the quantity listed above have been continuously designated as units for occupancy by Eligible Households during the reporting period:

Name of Project Owner or Authorized Agent Title Property Name & Address
Person Completing Report
Date
Report Period

EXHIBIT C

Page 1 of 2 ends

EXHIBIT B
582

Page 2 of 2 ends

EXHIBIT B
583
G

ROUND LEASE
by
and between
C
ity of Livermore, as Lessor
and
Pa
c Avenue, L.P., as Lessee
Dated as of ________________, 2025
P
acific Avenue Senior Apartments Phase 1

EXHIBIT C
584

TABLE OF CONTENTS
PAGE
i
ARTICLE 1. DEFINITIONS .................................................................................................... 1 Section 1.1 Definitions.................................................................................................. 1 Section 1.2 Exhibits ...................................................................................................... 8 ARTICLE 2. LEASE OF THE LAND ...................................................................................... 8 Section 2.1 Lease of Land ............................................................................................. 8 Section 2.2 Term ........................................................................................................... 8 Section 2.3 Use ............................................................................................................. 8 Section 2.4 Possession .................................................................................................. 9 Section 2.5 Memorandum of Lease .............................................................................. 9 Section 2.6 As-Is Conveyance………………………………………………………...9
Section 2.7 Lesse to Rely on Own Experts……………………………………………9 ARTICLE 3. THE IMPROVEMENTS ................................................................................... 10 Section 3.1 Construction ............................................................................................. 10 Section 3.2 Liens ......................................................................................................... 10 Section 3.3 Permits, Licenses and Easements ……………………………………….11 Section 3.4 Title to Improvements .............................................................................. 11 Section 3.5 Benefits of Improvement During Term ................................................... 12 ARTICLE 4. RENTS .............................................................................................................. 12 Section 4.1 Ground Rent ............................................................................................. 13 Section 4.2 Payments .................................................................................................. 13 Section 4.3 Determination of Market Rate Rent……………………………………..13

ARTICLE 5. TAXES AND OTHER IMPOSITIONS; UTILITIES ....................................... 13 Section 5.1 Payment of Impositions ........................................................................... 13 Section 5.2 Lessor’s Estate ......................................................................................... 13 Section 5.3 Contested Taxes and Other Impositions .................................................. 14 Section 5.4 Valuation Assessment/Property Tax Exemption ..................................... 14 Section 5.5 Failure to Pay Impositions ....................................................................... 14 Section 5.6 Utilities ..................................................................................................... 14 ARTICLE 6. INSURANCE .................................................................................................... 15 Section 6.1 Required Insurance Coverage .................................................................. 15 Section 6.2 Insurance Policies and Premiums ............................................................ 16 Section 6.3 Proceeds of Insurance...…………………………………………………17

EXHIBIT C
585
ii
Section 6.4 Limitation of Liability .............................................................................. 17 ARTICLE 7. MAINTENANCE, ALTERATIONS, REPAIRS AND
REPLACEMENTS ............................................................................................ 17 Section 7.1 Maintenance of Leased Premises; Landscaping ...................................... 17 Section 7.2 Landscaping Maintenance ....................................................................... 18 Section 7.3 Alterations to Leased Premises …………………………………………18 Section 7.4 Indemnifications ...................................................................................... 19 ARTICLE 8. MORTGAGE LOANS ...................................................................................... 19 Section 8.1 Intentionally Omitted ............................................................................... 19 Section 8.2 Liens and Encumbrances Against the Leasehold Estate .......................... 19 Section 8.3 Cost of Approved Loans to be Paid by Tenant ........................................ 23 Section 8.4 Proceeds of Approved Loans ................................................................... 24 Section 8.5 Notice and Right to Cure Defaults Under Approved Loans .................... 24 Section 8.6 Rights of Investor ..................................................................................... 24 Section 8.7 Right to Pay Taxes and Leasehold ........................................................... 24 ARTICLE 9. REPRESENTATIONS, WARRANTIES AND COVENANTS ....................... 24 Section 9.1 Representations, Warranties and Covenants of Lessor ............................ 24 Section 9.2 Representations, Warranties and Covenants of Lessee ............................ 26 Section 9.3 Hazardous Materials ................................................................................ 26 Section 9.4 Relocation Obligations and Indemnity .................................................... 26 Section 9.5 Hazardous Materials Indemnification ...................................................... 27 Section 9.6 Prevailing Wage Requirements ................................................................ 27 Section 9.7 Compliance with Laws ............................................................................ 28 Section 9.8 Affordability and Use Restrictions .......................................................... 28 Section 9.9 Selection of Tenants ................................................................................. 32 Section 9.10 Reporting Requirements; Access to Information; Inspections ................ 33 Section 9.11 Non-Discrimination; Compliance with Fair Housing Laws…………….34 Section 9.12 Fair Housing…………………………………………………………….34
Section 9.13 Management Entity and Replacement of Management Agent………….34 ARTICLE 10. EMINENT DOMAIN ........................................................................................ 35 Section 10.1 Termination of Lease ............................................................................... 35 Section 10.2 Continuation of Lease and Presumption of Restoration .......................... 35

EXHIBIT C
586
iii
Section 10.3 Temporary Taking ................................................................................... 35 Section 10.4 Appointment of Award ………………………………………………… 35 Section 10.5 Joinder ...................................................................................................... 37 Section 10.6 City Reservation of Rights………………………………………………37 ARTICLE 11. DAMAGE OR DESTRUCTION ...................................................................... 37 Section 11.1 Damage or Destruction to Leased Premises ............................................ 37 Section 11.2 Damage or Destruction Near End of Term .............................................. 38 Section 11.3 Distribution of Insurance Proceeds .......................................................... 38 Section 11.4 Insurance Requirements ........................................................................... 38 ARTICLE 12. EVENTS OF DEFAULT .................................................................................. 39 Section 12.1 Events of Default ..................................................................................... 39 Section 12.2 Rights and Remedies................................................................................ 40 Section 12.3 Default by Lessor ..................................................................................... 42 Section 12.4 Notices ..................................................................................................... 42 ARTICLE 13. QUIET ENJOYMENT AND POSSESSION; INSPECTIONS ........................ 42 Section 13.1 Quiet Enjoyment ...................................................................................... 42 Section 13.2 Lessor’s Right of Inspection .................................................................... 42 ARTICLE 14. VACATION OF LEASED PREMISES ............................................................ 43 Section 14.1 Vacation Upon Termination .................................................................... 43 Section 14.2 Surrender ………………………………………………………………..43
ARTICLE 15. NON-MERGER ................................................................................................ 43 Section 15.1 Non-Merger.............................................................................................. 43 ARTICLE 16. TRANSFERS .................................................................................................... 43 Section 16.1 Permitted Transfer by Lessee ................................................................... 43 ARTICLE 17. MISCELLANEOUS PROVISIONS ................................................................. 44 Section 17.1 Consents .................................................................................................. 45 Section 17.2 Enforced Delay; Extension of Times of Performance ............................. 45 Section 17.3 Interpretation ............................................................................................ 45 Section 17.4 Entire Agreement: Modifications ............................................................ 45 Section 17.5 Governing Law ........................................................................................ 45 Section 17.6 Binding Effect .......................................................................................... 46 Section 17.7 Severability .............................................................................................. 46

EXHIBIT C
587
iv
Section 17.8 Further Assurances................................................................................... 46 Section 17.9 Authority to Execute Agreement ............................................................. 46 Section 17.10 Lease Administration and Approvals ....................................................... 46 Section 17.11 Captions ................................................................................................... 46 Section 17.12 Gender ...................................................................................................... 46 Section 17.13 Exhibits .................................................................................................... 46 Section 17.14 References ................................................................................................ 46 Section 17.15 Cumulative ............................................................................................... 47 Section 17.16 Notices ..................................................................................................... 47 Section 17.17 Counterparts ............................................................................................. 48 Section 17.18 Time of Essence ....................................................................................... 48 Section 17.19 Attorneys’ Fees ........................................................................................ 48 Section 17.20 No Third-Party Beneficiaries ................................................................... 48 Section 17.21 Parties Not Co-Venturers; Independent Contractor; No Agency Relationship ................................................................................ 48 Section 17.22 Holding Over ……………………………………………………………48
Section 17.23 End of Term Transfer of Improvements and Leasehold Estate …………48

Exhibit A: Legal Description of the Leased Premises
Exhibit B: Site Map of the Leased Premises
Exhibit C: Memorandum of Lease
Exhibit D: Financing Plan
Exhibit E: Estoppel Certificate
Exhibit F: Addendum Section 202
Exhibit G: Schedule of Related Documents

EXHIBIT C
588

1 135.054/633016

GROUND LEASE
(Phase 1 of Pacific Avenue Development Project)

This Ground Lease (the “Lease”) is entered into as of _______________, 2025 (the “Commencement Date”), by and between City of Livermore, a California municipal corporation (“Lessor”) and Pac Avenue, L.P., a California limited partnership (“Lessee”).

RECITALS
A. Satellite Affordable Housing Associates, Inc., a California nonprofit public benefit corporation (“Satellite Affordable Housing Associates”), entered into that certain Disposition, Development and Loan Agreement for Pacific Senior Development Project dated September 16, 2021, with Lessor, and the City of Livermore, a public body corporate and politic (the “City”), as amended by that certain First Amendment to Disposition, Development and Loan Agreement dated December 13, 2022, (collectively, the “DDLA”). Under the DDLA, the City agreed to ground lease the property on Parcel Map No. 10858, in Book 360, Pages 87-89 of Map, Parcel 2 (the “Land”) to Lessee for ninety-nine (99) years or such longer term as required by lenders and investors, and Lessee has agreed to develop and operate thereon seventy-nine (79) residential dwelling units and related interior and exterior improvements, including but not limited to, a rental office and a community center (the “Improvements”).

B. Lessor desires to lease the Land to Lessee for a period of ninety-nine (99) years pursuant to the terms of this Lease.

C. Capitalized terms which are referred to and utilized throughout this Lease are defined in Article 1 of this Lease.

NOW, THEREFORE, for and in consideration of the foregoing premises, the covenants, representations, warranties and agreements set forth herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto do hereby agree as follows:

ARTICLE 1

DEFINITIONS
Section 1.1 Definitions. For the purposes of this Lease, the following defined terms shall have the meanings ascribed thereto in this Article 1:
(a) Additional Rent: is any amount in addition to Rent and is due and payable within 30 days of invoice from Lessor.
(b) Adjusted for Family Size Appropriate for the Unit: shall be determined consistent with Section 50052.5(h) of the California Health and Safety Code, subject to the application of federal rules and regulations applicable to Project financing sources, including Section 42(g)(2) of the Internal Revenue Code of 1986 as amended (or successor provision).

EXHIBIT C
589
2 (c) A ffordable Housing Loan Agreement: is the legal contract between the City and Pac Avenue, L.P. that establishes the agreed loan conditions for Phase 1 of the Pacific Avenue Project, as listed in Exhibit “G” hereto.
(d) Affordable Rent( s): means the following amounts, less a utility allowance and other fees and charges required to be paid by tenants of the Project on a non-optional basis which have been approved by the City (i) for units that are restricted for rental to households with incomes of not more than twenty percent (20%) of AMI (“20% Units”), a monthly rent that does not exceed one-twelfth of thirty percent (30%) of thirty percent (30%) of Area Median Income, Adjusted for Family Size Appropriate for the Unit (ii) for units that are restricted for rental to households with incomes of not more than thirty percent (30%) of AMI (“30% Units”), a monthly rent that does not exceed one-twelfth of thirty percent (30%) of thirty percent (30%) of Area Median Income, Adjusted for Family Size Appropriate for the Unit; (iii) for units that are restricted for rental to households with incomes of not more than fifty percent (50%) of AMI (“50% Units”), a monthly rent that does not exceed one-twelfth of thirty percent (30%) of fifty percent (50%) of Area Median Income, Adjusted for Family Size Appropriate for the Unit; and (iv) for units that are restricted for rental to households with incomes of not more than sixty percent (60%) of AMI (“60% Units”), a monthly rent that does not exceed one-twelfth of thirty percent (30%) of sixty percent (60%) of Area Median Income, Adjusted for Family Size Appropriate for the Unit. Rents shall be limited to no greater than the TCAC published rents for the aforementioned income categories.
(e) Affordability Term: A term of fifty-
eight (58) years following the date of
recording of this Lease in the Official Records of the County of Alameda. (f) AMI: See definition of Area Median Income.
(g) Applicable Laws: are defined in Section 9.7.
(h) Area Median Income or AMI: means the median income for Alameda County, California, adjusted for actual household size, as determined in accordance with TCAC regulations.
(i) Approved Loans: A
ll loans, including without limitation, the City A&R
Predevelopment Loan, the City Development Loan, the County Loan, the AHP Loan, HUD 202 Loan, as listed in Exhibit G, and the Senior Loan as defined in the Affordable Housing Loan Agreement, obtained from time to time by Lessee for the construction and permanent financing of the Improvements in compliance with the Financing Plan attached hereto as Exhibit D, as such Financing Plan may be revised from time to time by written consent of the Parties, and the refinancing of any such loan provided that the new loan does not exceed the greater of (i) the outstanding principal balance of the original loan, and (ii) eighty percent (80%) the value of the Improvements as determined by an appraisal conducted at Lessee’s expense by an MAI appraiser selected by the lender and approved by Lessor. The Financing Plan cannot be amended to remove a reference to an Approved Loan unless that Loan has been repaid in full. (j) Casualty:

As defined in Article 11 hereof.
(k) City: The City of Livermore, California.

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3 (l) C ity Loan: means that certain City A&R Predevelopment loan from City to be assumed by Lessee and that certain City Development Loan to be provided by City to Lessee pursuant to the terms set forth in that certain Affordable Housing Loan Agreement, listed in Exhibit G, between City and Lessee, to assist the Lessee with predevelopment and construction costs of the Project.
(m) Claims: means collectively: claims, demands, investigations, actions, causes of action, suits, judicial or administrative proceedings, damages, losses, liabilities, costs, expenses (including without limitation reasonable attorneys’ fees), damages, penalties, deficiencies, fines, orders, charges, judgments, awards, liens, remedial action requirements, and enforcement actions of any kind.
(n) Construction Plans: m eans all construction documents upon which Lessee and Lessee’s contractors shall rely in developing the Land and constructing the Project (including landscaping, parking, common and public areas) and shall include, without limitation, final architectural drawings, the site development plan, landscaping, exterior lighting and signage plans and specifications, materials specifications, final elevations, and building plans and specifications.
(o) County: The County of Alameda, California.
(p) County Loan: means collectively, that certain construction/permanent loan of Measure A1 funds to be provided by County to Lessee in the principal amount of $6,234,012. (q) Commencement Date: T he date set forth in the first paragraph of this Lease.
(r) DDLA : As defined in Recital A.
(s) Eligible Household: A household for which gross household income upon initial occupancy does not exceed the maximum income level as specified in Section 9.8 and which includes at least one member who is age 62 or older or other qualifying resident pursuant to California Civil Code Section 51.3.
(t) Environmental Laws: All federal, state or local statutes, ordinances, rules, regulations, orders, decrees, judgments or common law doctrines, and provisions and conditions of permits, licenses and other operating authorizations regulating, or relating to, or imposing liability or standards of conduct concerning (i) pollution or protection of the environment, including natural resources; (ii) exposure of persons, including employees and agents, to Hazardous Materials or other products, raw materials, chemicals or other substances; (iii) protection of the public health or welfare from the effects of by-products, wastes, emissions, discharges or releases of chemical substances from industrial or commercial activities; (iv) the manufacture, use or introduction into commerce of Hazardous Materials, including without limitation, their manufacture, formulation, labeling, distribution, transportation, handling, storage and disposal; or (iv) the use, release or disposal of Hazardous Materials or the remediation of air, surface waters, groundwaters or soil, as now or may at any later time be in effect, together with any regulations promulgated thereunder.

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4 (u) E nvironmental Report : means the Phase 1 Environmental Site Assessment dated June 2021, prepared by Geocon Consultants, listed in Exhibit G. (v) Event of Default: As described in Article 12 of this Lease. (w) Financing Plan: the plan attached hereto as Exhibit D which among other things describes the sources and uses for construction and permanent financing for the Project. (x) Governmental Authorities: Any applicable federal, State or local governmental or quasi-governmental entities, subdivisions, agencies, authorities or instrumentalities having jurisdiction over the Leased Premises, the Improvements, Lessor or Lessee.
(y) Hazardous Materials: Any chemical, material or substance now or hereafter defined as or included in the definition of hazardous substances, hazardous wastes, hazardous materials, extremely hazardous waste, restricted hazardous waste, toxic substances, pollutant or contaminant, imminently hazardous chemical substance or mixture, hazardous air pollutant, toxic pollutant, or words of similar import under any local, state or federal law or under the regulations adopted or publications promulgated pursuant thereto applicable to the Leased Premises, including, without limitation: the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. 9601, et seq. (“CERCLA”); the Hazardous Materials Transportation Act, as amended, 49 U.S.C. 5101, et seq.; the Federal Water Pollution Control Act, as amended, 33 U.S.C. 1251, et seq.; and the Resource Conservation and Recovery Act of 1976, 42 U.S.C. 6901, et seq. (“RCRA”). The term Hazardous Materials shall also include any of the following: any and all toxic or hazardous substances, materials or wastes listed in the United States Department of Transportation Table (49 CFR 172.101) or by the Environmental Protection Agency as hazardous substances (40 CFR Part 302) and in any and all amendments thereto; oil, petroleum, petroleum products (including, without limitation, crude oil or any fraction thereof), asbestos and asbestos-containing materials, natural gas, natural gas liquids, liquefied natural gas or synthetic gas usable for fuel, not otherwise designated as a hazardous substance under CERCLA; any substance which is toxic, explosive, corrosive, reactive, flammable, infectious or radioactive (including any source, special nuclear or by product material as defined at 42 U.S.C. 2011, et seq.), carcinogenic, mutagenic, or otherwise hazardous and is or becomes regulated by any governmental authority; asbestos in any form; urea formaldehyde foam insulation; transformers or other equipment which contain dielectric fluid containing levels of polychlorinated byphenyls; radon gas; or any other chemical, material or substance (i) which poses a hazard to the Leased Premises, to adjacent properties, or to persons on or about the Leased Premises, (ii) which causes the Leased Premises to be in violation of any of the aforementioned laws or regulations, or (iii) the presence of which on or in the Leased Premises requires investigation, reporting or remediation under any such laws or regulations.
(z) Impositions:

All taxes, assessments, water and sewer charges, charges for public utilities, excises, levies, license and permit fees and other charges that shall or may be assessed, levied or imposed during the Term by any Governmental Authorities upon the Leased Premises or any part thereof, including the buildings or improvements now or hereafter located thereon, including without limitation, possessory interest taxes. “Impositions” shall not include

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5 any income tax, capital levy, estate, succession, inheritance, or similar taxes of Lessor. Except for a tax, assessment, or charge resulting from Lessee’s use of the Leased Premises pursuant to this Lease, “Impositions” shall not include any franchise tax imposed upon any owner of the fee of the Leased Premises, or any income, profits or revenue tax, assessment or charge imposed upon the rent or other benefit received by Lessor under this Lease by any Governmental Authorities.
(aa) Imp
rovements : The senior affordable rental housing development comprised of seventy nine (79) residential dwelling units to be developed on the Land, all of which, other than one (1) Management Unit, will be restricted for occupancy by Eligible Households at Affordable Rents, including, without limitation the following: community space, parking, tenant related space and related ancillary facilities, together with any and all replacements or substitutions therefor or modifications thereto, in accordance with all approvals and conditions for use by the City for the Leased Premises. The Improvements are also referred to in this Lease as “Phase 1” or the “Project”.
(bb) Indemnitees: Lessor and its elected and appointed officials, officers, directors, employees, agents, contractors, representatives and designated volunteers. (cc) Insurance Requirements: T he requirements, whether now or hereafter in force, of any insurer or insurance carrier, any board of fire underwriters or any other company, bureau, organization or entity performing the same or similar functions, applicable to the Leased Premises and/or the Improvements, or any portion thereof, to the extent so applicable. (dd) Investor:

The low-income housing tax credit investor that will provide equity to the Project and all permitted successors and assigns. (ee) Land: As defined in Recital A above.
(ff) Lease Year: A calendar year.
(gg) Leased Premises: The Land, together with all and singular rights, easements, licenses, privileges and appurtenances thereunto attaching or in any way belonging thereto.
(hh) Leasehold Mortgage:

Any mortgage, deed of trust, security agreement or
collateral assignment pursuant to an Approved Loan encumbering Lessee’s Estate as a leasehold mortgage lien.
(ii) Legal Requirements: All laws, statutes, codes, ordinances, orders, rules, regulations and requirements of all Governmental Authorities and the appropriate agencies, officers, departments, boards and commissions thereof, whether now or hereafter in force applicable to Lessor, Lessee, the Leased Premises, the Improvements, or any portion thereof, to the extent so applicable.
(jj) Lender:

The holder, mortgagee, grantee or secured party under any Leasehold Mortgage.

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6 (kk) L essee’ s Estate or Leasehold Estate: During the Term of this Lease, Lessee’s leasehold interest in the Land and Lessee’s fee ownership interest in the Improvements, subject to Lessor’s reversionary interest in the Improvements pursuant to this Lease. (ll) Lessor’s E state: Lessor’s fee estate in the Land and reversionary interest in the Improvements pursuant to this Lease.
(mm) Loan Agreement: means the Affordable Housing Loan Agreement executed by City and Lessor, executed concurrently herewith, which evidences the City Loan. (nn) Loan Documents: All documents executed by Lessee evidencing or securing an Approved Loan.
(oo) Management Agent: The Person designated from time to time as “Management Agent” of all or any portion of the Improvements under any management agreement entered into from time to time with Lessee. The initial Management Agent will be Satellite Affordable Housing Associates Property Management Corporation.

(pp) Mar
ket Rate Rent : shall be the fair market rental value as reasonably determined by Lessor.
(qq) Net Condemnation Award: The net amounts owed or paid to the Parties or to which either of the Parties may be or become entitled by reason of any Taking or pursuant to any agreement with any condemning authority which has been made in settlement of any proceeding relating to a Taking, less any costs and expenses incurred by the Parties in collecting such award or payment.
(rr) Partnership:

The limited partnership that is the Lessee.
(ss) Party: Lessor or Lessee, as applicable. Lessor and Lessee shall be referred to collectively as the “Parties”.
(tt) Permitted Encumbrances: Permitted title encumbrances as defined in Section 9.1(a).
(uu) Person: An individual, partnership, corporation, public benefit corporation, trust, unincorporated association, or other entity or association. (vv) Phase 1 of the Project: Improvements will be developed on Parcel 2 of Parcel Map 10858 (“Phase 1”), as described in Exhibit A, and will consist of approximately seventy-nine (79) units in a mix of one- and two-bedroom units and one manager’s unit. (ww) Phase 2 of the Project: I mprovements will be developed on Parcel 4 of Parcel Map 10858 (“Phase 2”), and will consist of approximately sixty-one (61) units in a mix of one- and two-bedroom units.

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7 (xx) R egulatory Agreement: That certain Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants to be executed by Lessor and Lessee, as a condition of the Loan Agreement.
(yy) Rent( s): As described in Section 4.1 hereof.
(zz) Rent Restricted: As described in Section 9.8 hereof. (aaa) Restricted Unit(s): As described in Section 9.8 hereof. (bbb) Senior Lender: means First-Citizens Bank & Trust Company. (ccc) Senior Leasehold Mortgage: means that certain Construction Deed of Trust, with Assignment of Leases and Rents, Security Agreement, and Fixture Filing executed by Lessee for the benefit of Senior Lender, dated _________as it may be amended from time to time, listed in Exhibit G. The Senior Leasehold Mortgage is the Leasehold Mortgage with a first position lien and security interest on the Leasehold Estate. (ddd) Senior Loan: means that certain construction loan in the amount of $30,223,785.00_ made by Senior Lender to Lessee pursuant to the terms of the Senior Loan Documents.
(eee) Senior Loan Documents:
means those certain loan documents evidencing
and/or securing the Senior Loan (including, without limitation, the Senior Leasehold Mortgage), listed in Exhibit G, as they may be amended from time to time. (fff) Taking: A taking during the Term hereof of all or any part of the Leased Premises and/or the Improvements, or any interest therein or right accruing thereto, as a result of the exercise of the right of condemnation or eminent domain materially affecting the Leased Premises or any part thereof. A conveyance in lieu of or in anticipation of the exercise of any such right of condemnation or eminent domain shall be considered a Taking. Any such Taking shall be deemed to have occurred upon the earlier to occur of (a) the date on which the property, right or interest so taken must be surrendered to the condemning authority, or (b) the date title vested in a condemning authority or other party pursuant to any Taking. (ggg) Tax Credit Eligible Household:

A household that is eligible to rent and
occupy a qualified low-income dwelling unit under Section 42 of the Internal Revenue Code and applicable TCAC and State of California Legal Requirements relating to low-income housing tax credits including but not limited to California Revenue and Taxation Code Sections 17057.5, 17058, 23610.4, and 23610.5 and California Health and Safety Code Section 50199, et seq. (hhh) Tax Credit Restrictive Covenant:

The agreement with TCAC to be
executed by Lessee and properly recorded against the Lessee’s Estate in the land records of the County, setting forth certain terms and conditions under which seventy-nine (79) of the residential units in the Improvements will be operated. (iii) TCAC: means the California Tax Credit Allocation Committee.

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8 (jjj) T enant(s) : Any tenant, sublessee or licensee of Lessee under any Tenant Lease(s).
(kkk) Tenant Lease(s): Any lease or license agreement entered into by Lessee with residents of the residential units to be developed on the Land. (lll) Term: The period of time described in Section 2.2 hereof. (mmm)Transfer: Any sale, assignment, transfer, conveyance, lease, sublease, encumbrance, mortgage, or hypothecation, in any manner or form or any agreement to do any of the foregoing.

Section 1.2 Exhibits. The Exhibits referred to in this Lease and attached hereto are:

Exhibit A: Legal Description of the Land
E
xhibit B: Site Map of the Land
Exhibit C: Memorandum of Lease
Exhibit D: Financing Plan
Exhibit E: Estoppel Certificate
Exhibit F: Addendum Section 202
Exhibit G: Schedule of Related Documents

ARTICLE 1.

LEASE OF THE LAND
Section 1.1 Lease of Land. Subject to the terms hereof and in consideration of the covenants of payment and performance stipulated herein, Lessor leases the Land to Lessee, and in consideration thereof, Lessee takes, hires and leases the Land from the Lessor, pursuant to the terms of this Lease.

Section 1.2 Ter
m. Unless sooner terminated pursuant to the provisions hereof, this Lease shall continue in full force and effect for a term (“Term”), commencing on the Commencement Date and expiring on midnight the day immediately preceding the ninety-ninth year (99th) anniversary from the Commencement Date.

Section 1.3 Use. Subject to the provisions hereof, Lessee shall use the Leased Premises for the construction and operation of the Project, which includes the construction, development and operation of the Improvements on the Land in accordance with the restrictions and requirements set forth in Article 3 hereof. Further, Lessee agrees:
(a) n
ot to use the Leased Premises or permit the Leased Premises to be used for any disorderly or unlawful purpose, and not to commit or permit to be committed any unlawful conduct on the Leased Premises;

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9 (b) to use reasonable efforts to prevent any Tenant from committing or maintaining any nuisance or unlawful conduct on or about the Leased Premises; (c) to use reasonable efforts to prevent any action by any Tenant that would cause Lessee to violate this Lease;
(d) to take reasonable action, if necessary, to abate any action by any Tenant that violates, or that would cause Lessee to violate this Lease or any law or regulation; and (e) subject to the laws of the State of California and the rights of Tenants, to permit Lessor and its agents to inspect the Leased Premises or any part thereof at any reasonable time during the Term.

Section 1.4 P ossession. Lessor agrees to and shall provide possession of the Leased Premises to Lessee, free and clear of all rights to possession or use by any tenants or other individuals or entities other than Lessee (except as disclosed to Lessee or apparent from Lessee’s inspection), and free and clear of any encumbrances (except for Permitted Encumbrances) except as expressly approved by Lessee and Senior Lender in writing. Lessee hereby approves the Regulatory Agreement and encumbrances associated with the City Loan, the State’s Tax Credit Allocation Committee (TCAC), the County Loan, the Senior Loan, Section 202 funding from HUD, No Place Like Home funding from the State and all other financing for the project.

Section 1.5 Memo
randum of Lease. The Parties shall execute and acknowledge a memorandum of ground lease, substantially in the form attached hereto as Exhibit C, which shall be recorded at Lessee’s expense.

Section 1.6 AS-IS
Conveyance. Lessee specifically acknowledges that Lessor is leasing the Leased Premises to Lessee on an “AS IS”, “WHERE IS” and “WITH ALL FAULTS” basis and that except as may be expressly stated in this Lease, Lessee is not relying on any representations or warranties of any kind whatsoever, express or implied, from Lessor as to any matters concerning the Leased Premises, including without limitation: (i) the quality, nature, adequacy and physical condition of the Leased Premises, including, but not limited to, appurtenances, access, landscaping, (ii) the quality, nature, adequacy, and physical condition of soils, geology and any groundwater, (iii) the existence, quality, nature, adequacy and physical condition of utilities serving the Leased Premises, (iv) the development potential of the Leased Premises, and the Leased Premises’ use, merchantability, or fitness, suitability, value or adequacy of the Leased Premises for any particular purpose, (v) the zoning or other legal status of the Leased Premises or any other public or private restrictions on use of the Leased Premises, (vi) the compliance of the Leased Premises or its operation with any Environmental Laws, covenants, conditions and restrictions of any governmental or quasi-governmental entity or of any other person or entity, (vii) the presence or removal of Hazardous Material, substances or wastes on, under or about the Leased Premises or the adjoining or neighboring property; (viii) the quality of any labor and materials used in any improvements on the Leased Premises, or (ix) the condition of title to the Leased Premises.

Section 1.7 Le
ssee to Rely on Own Experts. Lessee understands that notwithstanding the delivery by Lessor to Lessee of any documents or disclosures, including, without limitation,

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10 third party reports, Lessee has relied and will rely entirely on Lessee’s own experts and consultants and its own independent investigation in proceeding with the leasing of the Leased Premises.

ARTICLE 2.

THE IMPROVEMENTS
Section 2.1 Construction. Lessee shall cause the Improvements to be constructed in substantial compliance with the Construction Plans approved by City and the terms and conditions of the land use permits and approvals and building permits, including any variances granted for the Improvements to be approved by Lessor, within twenty-four (24) months from the execution of this Lease. Any and all Improvements constructed by or on behalf of Lessee shall be constructed in a good and workerlike manner, in compliance with all applicable Legal Requirements. Except as may be specified in the documents evidencing the City Loan and any City financing for the Project that may be approved by the City in its sole discretion, Lessee shall bear the entire and sole cost of planning, designing, engineering, financing, constructing, supervising, and inspecting the Improvements, including all fees and mitigation measures.

Lessee shall provide plans and as-built drawings to City.

Section 2.2 Lie
ns. Lessee shall not have any right, authority or power to bind Lessor, Lessor’s Estate, or any interest of Lessor in the Land or the Leased Premises, for any claim for labor or material, or for any other charge or expense, lien or security interest incurred in connection with Lessee’s use of the Land, or the development, construction or operation of the Improvements, or any change, alteration or addition thereto. Lessee shall have the right to encumber Lessee’s Estate with security instruments required in connection with the Approved Loans, which Approved Loans shall not require the Lessor’s consent, and with utility easements and other customary easements necessary and incidental to the development, construction and operation of the Improvements, provided that such easements are subject to the approval of Lessor, which shall not be unreasonably withheld, conditioned or delayed. One year prior to the termination of the Lease, the Lessee shall provide the City notice of all easements on the property and the City shall have the sole right to determine whether the easement shall be removed from the property or continue to remain with the land. Lessee shall provide to the City all documents the City determines in its sole discretion are necessary to (1) evaluate said easements and (2) either remove from or continue said easements on the Leased Premises.

The Lessee shall not create or permit or suffer to be created or to remain upon the L
essor’s Estate or any interest of Lessor in the Land or the Leased Premises, or upon the Leased Premises, or any part thereof, and will discharge, any lien (except as permitted in the preceding paragraph and/or Section 2.4 hereof), including, but not limited to, the liens of mechanics, laborers, materialmen, suppliers or vendors for work or materials alleged to be done or furnished in connection with the Leased Premises or the Project, or any part thereof. Except as permitted in the preceding paragraph and/or Section 2.4 hereof, if any claim of lien is filed against the Lessor’s Estate or any interest of Lessor in the Land or the Leased Premises, or a stop notice is served on any other lender or other third party in connection with the Leased Premises or the Improvements, or upon the Leased Premises, or any part thereof, then the Lessee shall, within twenty (20) days after such filing or service, either pay and fully discharge the lien or stop

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11 notice, effect the release of such lien or stop notice by delivering to the Lessor a surety bond in sufficient form and amount, or provide the Lessor with other assurance satisfactory to the Lessor that the claim of lien or stop notice will be paid or discharged. If the Lessee fails to discharge any lien, encumbrance, charge, or claim in the manner required in this Lease, then in addition to any other right or remedy, the Lessor may (but shall be under no obligation to) following not less than 10 business days’ written notice to Lessee, discharge such lien, encumbrance, charge, or claim at the Lessee’s expense. Any expense incurred by Lessor pursuant to this Section shall be immediately due and payable by Lessee to Lessor as Additional Rent under this Lease within thirty (30) days of invoice from Lessor. The Lessee shall have the right to contest in good faith and by appropriate legal proceedings the validity or amount of any mechanics’, laborers’, materialmen’s, suppliers’ or vendors’ lien or claimed lien; provided that the Lessee shall utilize all reasonable means (including the posting of adequate security for payment) to protect the Leasehold Estate, the Lessor’s Estate and any other interest of Lessor in the Land or the Leased Premises against foreclosure. In addition to any other indemnities provided in this Lease, Lessee shall indemnify, protect, defend (with counsel of Lessor’s choosing), and hold harmless the Indemnitees from any and all alleged or actual Claims arising by reason of or in connection with a contractor’s lien or work, stop notice, labor, services, or materials supplied or claimed to have been supplied to Lessee or anyone holding the Leased Premises or the Improvements, or any part thereof, through or under Lessee.

Nothing in this Lease shall be construed as constituting the consent of the Lessor, expressed or implied, to the performance of any labor or the furnishing of any materials or any specific improvements, alterations of or repairs to the Leased Premises or the Project, or any part thereof, by any contractor, subcontractor, laborer or materialman, nor as giving the Lessee or any other person any right, power or authority to act as agent of or to contract for, or permit the rendering of, any services or the furnishing of any materials in such manner as would give rise to the filing of mechanics’ liens or other claims against the Lessor’s Estate or any other interest of Lessor in the Land or the Leased Premises. The Lessor shall have the right at all reasonable times to post and keep posted on the Leased Premises any notices which the Lessor may deem necessary for the protection of the Lessor and of Lessor’s Estate or any other interest of Lessor in the Land or the Leased Premises from mechanics’ liens or other claims. In addition, but subject to the paragraph above, the Lessee shall make, or cause to be made, prompt payment of all monies due and legally owing to all persons doing any work or furnishing any materials or supplies to the Lessee, or any of its respective contractors or subcontractors in connection with the Leased Premises and the Project. The provisions of this Section shall survive the expiration or termination of this Lease.

Section 2.3 P
ermits, Licenses and Easements. Lessor shall not unlawfully obstruct or impede Lessee from seeking any and all permits, licenses, easements and other authorizations required by any Governmental Authority with respect to any construction or other work to be performed on the Leased Premises and, Lessor will not unlawfully obstruct or impede Lessee from obtaining as applicable, all permits, licenses, easements and other governmental authorizations that are necessary or helpful for electric, telephone, gas, cable television, water, sewer, drainage, access and such other public or private utilities or facilities as may be reasonably necessary or desirable in connection with the construction or operation of the Improvements. Payment of all fees, costs and expenses associated with any of the foregoing, including, without limitation, utility

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12 connection fees and ongoing service fees, shall be the responsibility of Lessee, and Lessor shall have no responsibility to pay any such fees, costs or expenses.

Section 2.4 T itle to Improvements.
(a) During the Term. Lessor hereby grants to Lessee, without warranty express or implied, any right, title, or interest that Lessor may have in the Improvements now or hereafter located on the Leased Premises. Notwithstanding any provision in this Lease to the contrary, the Improvements and all alterations, additions, equipment, and fixtures built, made or installed by Lessee in, on, under or to the Leased Premises or Improvements shall be the sole property of Lessee until the expiration of the Term or other termination of this Lease; provided, however, that Lessee shall have no right to destroy, demolish or remove the Improvements except as specifically provided for in this Lease or as approved in writing by Lessor. It is the intent of the parties hereto that this Lease shall create a constructive notice of severance of the Improvements from the Leased Premises without the necessity of a deed from Lessor after the Improvements have been constructed. Notwithstanding the foregoing, Lessee shall be permitted to demolish any improvements located on the Leased Premises as of the Commencement Date, provided that all work related to such demolition is performed in compliance with all Legal Requirements, including without limitation, all Environmental Laws. (b) After the Term. Upon the expiration of the Term or other termination of the Lease, the Improvements and all alterations, additions, equipment and fixtures shall be deemed to be and shall automatically become the property of Lessor, without cost or charge to Lessor. Lessor agrees that Lessee, at any time prior to the expiration or other termination of this Lease, may remove from the Leased Premises any and all equipment which Lessee has furnished for maintenance purposes or for the use of the Management Agent, provided that Lessee shall repair any physical damage to the Leased Premises caused by the removal of such equipment and property. Lessee agrees to execute, at the request of Lessor at the end of the Term, a confirmatory quitclaim deed of the Improvements to Lessor to be recorded at Lessor’s option and expense and any other documents that may be reasonably required by Lessor or Lessor’s title company to provide Lessor title to the Leased Premises and the Improvements free and clear of all monetary liens and monetary encumbrances not caused or agreed to by Lessor. Without limiting the foregoing, upon the expiration or sooner termination of this Lease, Lessee shall deliver the Leased Premises and the Improvements to Lessor free of all monetary liens and encumbrances unless otherwise consented to in writing by Lessor. Any equipment or other personal property not removed from the Leased Premises by the expiration of the Term shall become the property of Lessor, and Lessor shall have the right to dispose of such equipment and property in the manner of Lessor’s choosing. Lessee expressly waives the protections in Sections 1980-1993.09 of the California Civil Code, amended from time to time, as applicable. Lessee shall require Tenant Leases to include a waiver of the protections in Sections 1980-1992 of the California Civil Code, as amended from time to time, so long as there is no legal prohibition against a waiver of these provisions for residential tenancies.

Section 2.5 Be
nefits of Improvement During Term. Lessor acknowledges and agrees that any and all depreciation, amortization and tax credits for federal or state tax purposes relating to the Improvements located on the Leased Premises and any and all additions thereto,

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13 substitutions therefor, fixtures therein and other property relating thereto shall be deducted or credited exclusively by Lessee during the Term.

ARTICLE 3.

RENTS
Section 3.1 Ground Rent. For each Lease Year during the Term during which rent charged to residential Tenants is restricted by a regulatory agreement recorded for the benefit of TCAC or another governmental agency that imposes rent restrictions that are more stringent than those set forth in Section 9.8 of this Lease (“Affordability Restrictions”), annual rent shall be paid by the Lessee to the Lessor in advance on or before the first calendar day of March each year (“Rent”) in the nominal amount of $1.00 per Lease Year or partial Lease Year. If at any time during the Term, rent charged to residential Tenants is no longer restricted by Affordability Restrictions that are more stringent than those set forth in Section 9.8, then commencing upon the expiration of such restrictions, Lessee shall pay annual Rent in an amount equal to Market Rate Rent as determined in accordance with Section 4.3, commencing with the first month following the date the Affordability Restrictions no longer encumber the Improvements, in advance for each succeeding (or partial) year remaining in the Term.

Section 3.2 Pa
yments. All Rent, Additional Rent, and other sums, if any, due to Lessor hereunder shall be paid by Lessee to Lessor at the address of Lessor set forth hereinafter for notices, or to such other person and/or at such other address as Lessor may direct by written notice to Lessee, without notice or demand, and without abatement, deduction or set off.

Additional Rent or other sums shall be due and owing to Lessor within thirty (30) days of Lessor’s demand to Lessee.

Section 4.3 Det
ermination of Market Rate Rent. Market Rate Rent shall be the fair market rental value as reasonably determined by Lessor; provided however, if Lessee reasonably and in good faith disputes Lessor’s determination of Market Rate Rent, then Market Rate Rent shall be determined by appraisal by an independent real estate appraiser with an MAI certificate or the equivalent mutually selected by Lessor and Lessee. If Lessor and Lessee cannot agree upon an appraiser, then each of Lessor and Lessee shall select, within fifteen (15) days following their inability to agree upon an appraiser, an MAI appraiser who has no less than ten (10) years of experience valuing residential apartment projects in Alameda County, California. If a party fails to select an appraiser within such fifteen (15) day period, then such party shall have irrevocably waived its right to select an appraiser. The two appraisers shall determine the Market Rate Rent. If the two appraisers are unable to agree upon the Market Rate Rent, then Market Rate Rent shall be the average of both determinations; provided however if the determinations of the two appraisers differ by ten (10%) or more, a third appraiser shall be selected jointly by the two appraisers, and the average of the highest two appraisals shall be used to determine the Market Rate Rent.

ARTICLE 4.

TAXES AND OTHER IMPOSITIONS; UTILITIES

EXHIBIT C 601
14 Section 4.1 P ayment of Impositions. As and when the same shall become due, Lessee will pay all of the Impositions, except that if any Imposition that Lessee is obligated to pay in whole or in part is permitted by law to be paid in installments, Lessee may pay or cause to be paid such Imposition (or its proportionate part thereof) in installments as and when such installments become due. Upon the written request of Lessor, Lessee shall provide to Lessor evidence satisfactory to Lessor of payment of all Impositions. During the first and last years of the Term, all Impositions shall become payable during each calendar, fiscal, tax or Lease Year, as applicable, shall be ratably adjusted on a per diem basis between Lessor and Lessee in accordance with the respective portions of such calendar, fiscal, tax, assessment or Lease Year during the Term. If any special assessments are payable in installments, Lessee shall pay only those installments that are due and payable during the Term.

Section 4.2 Lesso
r’s Estate.

Notwithstanding anything contained in this Lease to the contrary, any and all Impositions for taxes and assessments charged against the value of Lessor’s Estate shall be the responsibility and obligation of Lessor. Notwithstanding any contrary provision of this Lease, Lessee shall be responsible for payment of any possessory interest taxes payable in connection with this Lease and the Leasehold Estate.

Section 4.3 C
ontested Taxes and Other Impositions.
(a) Lessee, in its own name or in the name of Lessor if prior written consent of Lessor is obtained by Lessee, may contest the validity or amount of any Imposition relating to all or any portion of the Leased Premises, in which event the payment thereof, if authorized by applicable law, may be deferred during the pendency of such contest, if diligently prosecuted in good faith. If applicable law is silent on or expressly disallows deferring payment pending the contest of validity, Lessee shall timely pay any Imposition that is subject to dispute under protest, reserving any and all rights for repayment from the applicable taxing entity if resolution of such contest results in a decision or judgment in Lessee’s favor. (b) Intentionally omitted.

Section 4.4 V
aluation Assessment/Property Tax Exemption.

If applicable, Lessee may attempt to obtain a lowering of the assessed valuation of the Leased Premises for any year or obtain a property tax exemption for the purpose of reducing taxes thereon. In such event, upon Lessee’s request, Lessor may use reasonable efforts to assist Lessee in such endeavor; provided, however, that Lessor shall incur no liability or otherwise be construed as being in default under this Lease for any assistance (or limitation of assistance) provided to Lessee pursuant to this Section.

Section 4.5 F
ailure to Pay Impositions. If Lessee shall fail to pay any Impositions before the same become delinquent, except if Lessee is in good faith contesting such Impositions pursuant to Section 5.3 hereof, Lessor, at its sole election, may pay such Impositions (but shall not be obligated to pay same), together with any interest and penalties due thereon, and the amount so paid by Lessor shall be repayable to Lessor by Lessee, with an additional interest payment payable to Lessor in an amount of 10% of the total payment (including interest and

EXHIBIT C
602
15 payments) paid by Lessor for the Imposition, or the maximum amount of interest allowable pursuant to law, whichever is less, within thirty (30) days as Additional Rent hereunder.

Section 4.6 U tilities. Lessee shall pay all charges for all utilities used, rendered or supplied upon or in connection with the Improvements and the operation or construction thereof including, but not limited to, all charges for gas, electricity, light, heat or power, all telephone and other communications services, all water and sewer service charges, and all sanitation fees or charges (all of the foregoing, collectively “Utility Charges”) levied or charged against the Leased Premises during the Term; provided, however, that Lessee shall have no responsibility hereunder for the payment of Utility Charges for utilities supplied by the respective providers directly to Tenants for such Tenants’ use in connection with the occupancy of their respective residential units unless otherwise provided in the applicable Tenant Lease. Notwithstanding any contrary provision of this Lease, Lessor shall have no responsibility for payment of any Utility Charges.

There are existing public utilities located at Pacific Avenue. It will be the Lessee’s responsibility to extend services to serve their development.

ARTICLE 5.

INSURANCE
Section 5.1 Required Insurance Coverage. Standard “All Risk” Casualty and Fire and Extended Coverage Endorsement. Lessee shall during the Lease Term keep the Leased Premises insured against loss or damage by a standard all risk policy, excluding earthquake risks, in amounts such that the proceeds of such insurance shall not be less than the full replacement value of the Leased Premises unless otherwise consented to in writing by City’s Risk Manager. (a) Liability Insurance. D
uring the Lease Term, Lessee shall keep in full
force and effect a policy or policies of comprehensive general liability insurance against liability for bodily injury to or death of any person arising out of an occurrence on or about the Leased Premises. The limits of such insurance shall be not less than Three Million Dollars ($3,000,000) combined single limit each occurrence, Six Million Dollars ($6,000,000) annual aggregate, including coverage for bodily injury, property damage, hired and non-owned automobile liability, products, completed operations and contractual liability coverage. (b) Workers’ Compensation Insurance.

Lessee shall require all contractors
performing work on the Leased Premises to carry workers’ compensation insurance covering all persons employed in connection with the Leased Premises or the Improvements and with respect to whom death, bodily injury, or sickness insurance claims could be asserted against Lessor and/or Lessee. Lessee shall furnish or cause to be furnished to Lessor evidence satisfactory to Lessor that Lessee (if Lessee has any employees), and any contractor that has contracted for the performance of work on the Leased Premises, or otherwise pursuant to this Lease carries statutory Workers’ Compensation insurance and Employer’s Liability insurance in a minimum amount of One Million Dollars ($1,000,000) per accident.

(c) C
ommercial Property Insurance . During the Lease Term, Lessee shall maintain property insurance coverage to cover full replacement value, to include improvements, and shall be written on an all-risk basis. The policy will also include a provision that protects the

EXHIBIT C
603
16 location and the Lessor’s interest if the Property is vacant and/or unoccupied for more than thirty (30) days. The policy must also include a business interruption provision to cover loan payments for twelve (12) to twenty-four (24) months if the property is damaged and cannot be sold or occupied.
(d) B uilders ’ Risk Insurance. Upon commencement of construction and continuing until issuance of a certificate of occupancy, or equivalent for the Improvements, Lessee and all contractors working on behalf of Lessee shall maintain a policy of builder’s all- risk insurance in an amount not less than the full insurable cost of the Project on a replacement cost basis naming Lessor as loss payee as its interests may appear. During the course of any alteration, construction or reconstruction, the cost of which exceeds Two Hundred Fifty Thousand Dollars ($250,000), Lessee shall require any contractor to provide builders’ risk insurance for the full insurable cost of the work and liability insurance in an amount not less than One Million Dollars ($1,000,000) combined single limit for bodily injury or property damage insuring the interests of Lessor, Lessee and any contractors and subcontractors. (c) Pollution Legal Liability Insurance.

During the course of construction,
Lessee shall maintain Pollution Legal Liability Insurance with a combined single limit of $1,000,000 for each pollution incident, $2,000,000 aggregate, and with coverage to include legal liability arising from the sudden and accidental release of pollutants, and no less than a three- year extended reporting period. Also, this coverage is to include non-owned disposal coverage.

Section 5.2 Ins
urance Policies and Premiums.
(a) All liability policies required by this Lease shall be written on an occurrence basis, and shall name the Indemnitees as additional insureds. (b) All policies of insurance shall include an endorsement that provides that notice of any change or cancellation of said policy must be made in writing and sent to Lessee and Lessor at their respective principal offices at least thirty (30) days before the effective date of change or cancellation.

(c) Companies writing the insurance required hereunder shall be licensed to do business in the State of California. Insurance shall be placed with insurers with a current A.M. Best’s rating of no less than A: VII.
(d) If any insurance policy or coverage required hereunder is canceled or reduced, Lessee shall, within fifteen (15) days after receipt of notice of such cancellation or reduction in coverage, but in no event later than the effective date of cancellation or reduction, file with Lessor a certificate showing that the required insurance has been reinstated or provided through another insurance company or companies. Upon failure to so file such certificate, Lessor may, with notice and at its option, procure such insurance coverage at Lessee’s expense, and Lessee shall promptly reimburse Lessor for such expense upon receipt of billing from Lessor.
(e) The limits of insurance required in this agreement may be satisfied by a combination of primary and umbrella or excess insurance. Coverage provided by Lessee shall

EXHIBIT C
604
17 be primary insurance and shall not be contributing with any insurance, or self-insurance maintained by Lessor, and the policies shall so provide. The insurance policies shall contain a waiver of subrogation for the benefit of the Lessor. Lessee shall furnish the required certificates and endorsements to Lessor prior to the commencement of rehabilitation or construction work on the Project and shall provide Lessor with certified copies of the required insurance policies upon request of Lessor.

(e) D
eductibles/Retentions. Any deductibles or self- insured retentions shall be declared to, and be subject to approval by City’s Risk Manager. At the option of and upon request by City’s Risk Manager, if it is determined that such deductibles or retentions are unreasonably high, the insurer shall reduce or eliminate such deductibles or self-insurance retentions or Lessee shall procure a bond guaranteeing payment of losses and related investigations, claims administration and defense expenses. (f) Adjustments. T
he limits of the liability coverage and, if necessary, the terms and conditions of insurance, shall be reasonably adjusted from time to time (not less than every five (5) years after the Commencement Date nor more than once in every three (3) year period) to address changes in circumstances, including, but not limited to, changes in the purchasing power of the dollar and the litigation climate in California, provided that such adjustments are consistent with generally prevailing requirements for residential multi-family developments similar to the Project and located in the San Francisco/Alameda County area.

Within thirty (30) days following Lessor’s delivery of written notice of any such adjustments, Lessee shall provide Lessor with amended or new insurance certificates and endorsements evidencing compliance with such adjustments.

(g) A
dditional Insured. For all liability insurance required by this Agreement, Lessee (and Lessee’s contractors, as applicable) shall obtain endorsements that name the Indemnitees as additional insured in the full amount of all applicable policies, notwithstanding any lesser minimum limits specified in this Agreement. This Agreement requires Lessee (and Lessee’s contractors) to obtain and provide for the benefit of the Indemnitees, additional insured coverage in the same amount of insurance carried by Lessee (or Lessee’s contractors, as applicable), but in no event less than the minimum amounts specified in this Agreement. In the event that Lessee (or Lessee’s contractors as applicable) obtain insurance policies that provide liability coverage in excess of the amounts specified in this Agreement, the actual limits provided by such policies shall be deemed to be the amounts required under this Agreement. Without limiting the foregoing, the limits of liability coverage specified in this Agreement are not intended, nor shall they operate, to limit City’s ability to recover amounts in excess of such minimum amounts.

Section 6.3 P
roceeds of Insurance.

For so long as any Leasehold Mortgage on the Leased Premises is outstanding: All fire and standard risk or extended coverage (casualty) insurance proceeds shall be applied to the payment of the costs of repairing or rebuilding that part of the Leased Premises damaged or destroyed if (i) Lessee agrees in writing within ninety (90) days after payment of the proceeds of insurance that such repair or rebuilding is economically feasible, and (ii) each Lender permits

EXHIBIT C
605
18 such repair or rebuilding, provided that the extent of the Lessee’s obligation to restore the Leased Premises shall be limited to the amount of the insurance proceeds.

If the Improvements are not repaired or rebuilt, all such proceeds shall be applied in a manner consistent with the terms of the Leasehold Mortgages.

In the event that no Leasehold Mortgage is outstanding, all insurance proceeds received under the policies set forth in this Article 6 shall be paid to Lessee, provided that Lessee agrees that it shall apply such proceeds for reconstruction or repair of the Improvements unless such repair or reconstruction is not economically feasible.

To the extent any of the above provisions are inconsistent with the provisions of any of the Loan Documents, the Loan Documents shall be controlling.

Section 6.4 L
imitation of Liability.

In addition to any other indemnities provided in this Lease, to the fullest extend permitted by law, Lessee shall indemnify, protect, defend (with counsel selected by or otherwise acceptable to Lessor), and hold harmless the Indemnitees from and against any and all Claims of every nature arising out of or in connection with, attributable to or otherwise occasioned, in whole or in part, by any act or omission of Lessee or Lessee’s officials, officers, directors, employees, agents, contractors, servants, volunteers, tenants, assignees, licensees, or invitees, arising from or relating to (i) breach of Lessee’s representations and warranties, (ii) the construction of the Improvements or operation of the Leased Premises; (iii) the use, occupation, improvement, or maintenance of the Leased Premises or any work or activity in or about the Premises by Lessee or its assignees or Tenants or their respective authorized representatives, licensees, or invites; (iv) any activity, condition, or occurrence in or about the Leased Premises; (v) the filing or potential filing of any liens against the Leased Premises in connection with any work done or caused to be done by lessee or its assignees or Tenants; (vi) any breach or failure to perform any obligation imposed on Lessee under this Lease; or (vii) any other actor omission of Lessee or its officials, officers, directors, employees, agents, contractors, servants, volunteers, Tenants, assignees, licensees, or invitees, except to the extent any such Claim is cause by the sole active gross negligence or willful misconduct of the Indemnitees.

(a) The provisions of this Section 6.4 and other indemnities provided in this Lease shall survive the expiration or termination of this Lease. The Lessee’s obligations to hold harmless, indemnify, and defend shall not be excused because of Lessee’s inability to evaluate Claims or because Lessee evaluates Claims and determines that Lessee is not liable to claimant.

The obligations in this Section 6.4 and other indemnities provided in this Lease shall not in any way be limited by the minimum insurance obliga tions contained in this Lease. Lessee must respond within 30 days to the tender of any claim for defense and indemnity by the City.

(b) Modification for Construction Contracts. To the extent this Lease is a “construction contract” covered by California Civil Code section 2782, then Lessee’s duty to indemnify, as specified in this Section 6.4 and other indemnities in this Lease, shall not apply in a manner prohibited by California Civil Code section 2782.

EXHIBIT C
606
19 (c) Modification for Design Professional Services. To the extent this Lease is construed as an agreement for “design professional services” defined in California Civil Code section 2782.8, then Lessee’s duties to defend and indemnify shall only apply to the e xtent provided for in California Civil Code section 2782.8(a), unless Section 2782.8(a) is not applicable for one of the reasons set forth in 2782.8(e).

ARTICLE 7

MAINTENANCE, ALTERATIONS, REPAIRS AND REPLACEMENTS

Section 7.1 Mai ntenance of Leased Premises; Landscaping. During the Term, at Lessee’s sole cost and expense, Lessee shall keep and maintain the Leased Premises, all Improvements hereafter developed, and all appurtenances thereunto belonging, in good and safe order, condition and repair. All such maintenance and repair shall conform to and comply with all Legal Requirements affecting the Leased Premises.

Section 7.2 Lan
dscaping Maintenance.
(a) The provisions of this Section 7.1.1 Care intended to satisfy, with respect to the Leased Premises, Condition No. 66 of the Conditions of Approval approved by the City of Livermore in connection with its approval of Planned Unit Development for File No. PUD-101. (b) Lessee, at no expense to the Lessor and in compliance with all laws and regulations, shall maintain in healthful, attractive and reasonably weed-free manner all the landscaped areas related to the Project as shown in the landscaping plan approved by the City, listed in Exhibit G, and which may be amended or revised from time to time. “Landscaped areas” as used in this Lease shall mean plantings and irrigation systems which have been installed, or are proposed to be installed, pursuant to the City-approved landscaped plan for the Project including those in City right-of-ways. All plantings shall be maintained using generally accepted methods of cultivation to ensure reasonably normal, healthy plant growth. Maintenance shall include replacement of plantings, when necessary, and all ordinary and usual care, including, but not limited to, irrigation, fertilization, pest and disease control, weeding, rotation of plantings and the removal of trimmings, rubbish, debris, and other solid waste. Lessee shall, at no expense to the Lessor, install, maintain, repair, and replace, where necessary, such irrigation systems as are required to provide adequate irrigation in compliance with water conservation practices.
(c) If, in the reasonable judgment of the Public Works Director, Lessee has failed to maintain properly any landscaping as required by this Lease, the Lessor may perform such maintenance, at its sole option, after thirty (30) days’ prior written notice to Lessee of such failure to maintain. In such event, the Lessor’s performance of such maintenance shall be at the Lessee’s sole expense and Lessee, upon demand by the Lessor, shall pay to the Lessor all reasonable expenses incurred by the Lessor in the performance of such maintenance. (d) If any maintenance, repair, or replacement of landscaping needs immediate correction as a result of a public safety or health hazard, as reasonably determined by the City Public Works Director, and such maintenance is not performed, or cannot be performed,

EXHIBIT C
607
20 by Lessee within twenty-four (24) hours of receipt of such notice thereof, the Lessor may perform or cause to be performed such maintenance at Lessee’s expense, and Lessee, upon demand by the Lessor, shall pay to the Lessor all reasonable expenses incurred by the Lessor in the performance of such maintenance within thirty (30) days of Lessor’s demand.

Section 7.3 Alterations to Leased Premises. Lessee may make any additions, alterations or changes (sometimes collectively referred to herein as “Alterations”) in or to the Improvements subject, however, to the following conditions:
(a) N
o Alterations shall be made that would tend to impair the structural soundness of the Improvements;
(b) No Alterations shall be undertaken that are prohibited by, or would cause the Leased Premises, the Improvements, Lessee, or Lessor to be in breach or violation of any Legal Requirements, including those concerning prevailing wage, or this Lease;

(c) No Alterations shall be undertaken until Lessee shall have procured, to the extent the same may be required from time to time, all permits and authorizations of all applicable Governmental Authorities, all required consents of any Lender, and the consent of Lessor. Lessor shall not unlawfully obstruct the application for such permits or authorizations; and
(d) Any Alterations shall be performed in good and workerlike manner and in compliance with all applicable Legal Requirements and all applicable Insurance Requirements. (e) Any and all Alterations shall be consistent with the use of the Leased Premises as authorized under this Lease.

(f) Any Alteration that will exceed the sum of Two Hundred Fifty Thousand Dollars ($250,000) in cost (increasing annually by the amount of the Consumer Price Index- Urban (CPI-U) for the San Francisco-Oakland-San Jose, California metropolitan area) shall require Lessor’s advance written consent which shall not be unreasonably withheld.

Section 7.4 In
demnifications. Notwithstanding any other provision of this Lease to the contrary, and in addition to any other indemnities provided in this Lease, to the fullest extent permitted by law, Lessee hereby agrees to indemnify, protect, hold harmless and defend with counsel selected by or otherwise acceptable to Lessor) the Indemnitees from and against any and all Claims of every nature arising out of or relating to (1) Lessee’s obligations under this Lease or the (2) construction or operation of the Improvements or any Alterations except to the extent any such Claim arises from the sole active gross negligence or willful misconduct of the Indemnitees. In addition, if any contractor or subcontractor which performed any construction work for Lessee or Lessee’s affiliates on the Improvements or Alterations shall assert any Claim against Lessor or the Indemnitees on account of any damage alleged to have been caused by reason of acts of negligence of Lessee or Lessee’s affiliates, members, partners, officers, directors, affiliates, agents, employees or construction contractors, Lessee shall defend at its own expense any suit based upon such Claim; and if any judgment or claim against Lessor shall be allowed, Lessee shall pay or cause to be paid or satisfied such judgment of claim and pay all

EXHIBIT C
608
21 costs and expenses in connection therewith. The provisions of this Section shall survive the expiration or termination of this Lease. Lessee must respond within 30 days to the tender of any claim for defense and indemnity by the City. The provisions in Section 6.4(b), (c), and (d) of this Lease apply to this obligation to defend, indemnify, and hold harmless.

ARTICLE 8

MORTGAGE LOANS
Section 8.1 Intentionally omitted.

Section 8.2 L iens and Encumbrances Against the Leasehold Estate. The Lessee shall have the right to encumber the Leasehold Estate and the Improvements with leasehold deeds of trust, mortgages, and regulatory and affordability agreements related to the Approved Loans without Lessor’s consent (collectively, “Liens”) provided that all documents evidencing such Liens are consistent with the terms and conditions of this Lease and the Financing Plan. (a) F
or as long as there is any Lien securing any Approved Loan:
(1) Lessor shall not agree to any cancellation, termination (except for a termination for a default by Lessee which is not cured by Lessee or Lender in accordance with this Lease), or accept any surrender of this Lease, nor shall Lessor consent to any amendment or modification of this Lease without the prior written consent of the Lenders that have outstanding Approved Loans. In the event that Lessor receives competing or conflicting offers to cure any default under this Lease, Lessor shall accept the offers to cure in the following order: first, Lessee or the limited partner (or members, as applicable) therein, then each Lender in the same relative priority as their respective Liens.
(2) Notwithstanding any default by Lessee under this Lease, Lessor shall have no right to terminate this Lease or exercise any other right or remedies under this Lease unless Lessor shall have given the Lenders that have outstanding Approved Loans written notice of such default and such Lenders shall have failed to remedy such default or acquire the Leasehold Estate or commence foreclosure or other appropriate proceedings as set forth in, and within the time specified by, this Section 8.2.
(3) Any Lender that has an outstanding Approved Loan shall have the right, but not the obligation, at any time to pay any or all of the Rent, Additional Rent, or any other sums due pursuant to the terms of this Lease, and do any other act or thing required of Lessee by the terms of this Lease, to prevent termination of this Lease. Lessor shall provide each Lender that has an outstanding Approved Loan written notice of default concurrently with delivery of such notice to Lessee. Each Lender shall have the same period to cure such default as afforded to Lessee, extended by an additional twenty (20) days in the case of a monetary default, and by an additional forty-five (45) days in the case of a nonmonetary default. The notice of default shall describe the action necessary to cure the default, and shall include, with respect to any monetary default, a detailed statement identifying the amounts due and the obligations to which amounts relate, and with respect to any non-monetary default, a detailed

EXHIBIT C
609
22 statement identifying the obligations breached and the cure expected by Lessor; provided, however, that if any nonmonetary default is not susceptible to cure within the applicable cure period, the Lender shall have such longer period, not to exceed an additional ninety (90) days, as may be necessary to cure the default, so long as such Lender is diligently prosecuting such cure to completion. All payments so made and all things so done shall be as effective to prevent a termination of this Lease as the same would have been if made and performed by Lessee instead of by the Lender(s).
(4) In addition to the cure periods described in the preceding paragraph (3), if the default is such that possession of the Leasehold Estate may be reasonably necessary to remedy the default, any Lender that has an outstanding Approved Loan shall have a reasonable time after the expiration of the applicable cure period described in the preceding paragraph (3) within which to remedy such default, provided that (A) such Lender shall have fully cured any default in the payment of any monetary obligations of Lessee under this Lease within the first sixty (60) days following Lessor’s delivery of notice pursuant to subsection (3) of this Section 8.2(a) and shall continue to pay currently such monetary obligations when the same are due; (B) such Lender shall have acquired Lessee’s Leasehold Estate hereunder or commenced foreclosure or other appropriate proceedings prior to or within 150 days following Lessor’s delivery of notice pursuant to subsection (2) of this Section 8.2(a), and shall be diligently prosecuting the same; and (C) and after acquiring possession of the Leasehold Estate, such Lender shall diligently prosecute to completion such cures as may be reasonably possible to remedy nonmonetary defaults existing under this Lease. Any default under this Lease which by its nature cannot be remedied by Lender shall be deemed remedied upon Lender or its Nominee (as hereinafter defined) acquiring Lessee’s interest in the Premises as provided in this Section and curing said default.
(5) Lessor shall promptly provide estoppel certificates reasonably requested by lenders or investors.
(6) If the Lenders are prohibited, stayed or enjoined by any bankruptcy or insolvency proceeding of any court, including without limitation a court having jurisdiction over Lessee in such proceeding, from commencing or prosecuting foreclosure proceedings, the times specified for commencing or prosecuting such foreclosure or other proceedings shall be extended for the period of such prohibition; provided that any Lender shall have fully cured any default in the payment of any monetary obligations of Lessee under this Lease, including without limitation any monetary obligations to third parties which have become, or threaten to become, liens against the Leased Premises or any portion thereof, and shall continue to pay currently such monetary obligations when the same fall due; provided, further, that, subject to subsection (1) of this Section 8.2(a), such Lender shall not interfere with Lessor’s efforts to seek compliance by Lessee with any non-monetary obligation under this Lease. (7) Lessor shall mail or deliver to any Lenders that have any outstanding Approved Loans a duplicate copy of any notice which Lessor may deliver to Lessee pursuant to this Lease, including any notice of default. Lessee shall deliver to Lessor the name and contact information for all Lenders that have outstanding Approved Loans, including successors in interest to Approved Loans immediately upon demand of Lessor. Provided Lessee (or Lender) has delivered Lessor the name and contact information of the Lender having an

EXHIBIT C
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23 outstanding Approved Loan, no notice of default by Lessor to Lessee shall be effective as to that Lender unless and until a copy of the notice shall have been mailed or delivered to such Lender as set forth in this Section.
(8) The foreclosure of an Approved Loan, any sale thereunder, whether by judicial proceedings or by virtue of any power contained in the leasehold mortgage securing the Approved Loan, or any conveyance of the Leasehold Estate created hereby from Lessee to a Lender through or in lieu of foreclosure (a “Foreclosure Event”), shall not require the consent of Lessor or constitute a breach of any provision of this Lease. In the event any Lender or its Nominee (as defined herein) becomes Lessee under this Lease by such means or pursuant to any new lease obtained under paragraph (9) of this Section 8.2(a) below, Lessor shall recognize the Lender or its Nominee as Lessee hereunder or under such new lease and the Lender or such Nominee, as applicable, shall be personally liable under this Lease or such new lease only for the period of time that the Lender or such Nominee, as applicable, remains Lessee thereunder (and such liability shall be limited to Lender’s or Nominee’s, as applicable, interest in the Leaseholder Estate), provided that the Lender or its Nominee attorns to Lessor and agrees to be subject to the restrictions of this Lease. If a Lender or its Nominee becomes the lessee under this Lease or any such new lease, the Lender shall have the right thereafter to assign or sublease this Lease or such new lease one time, provided that any assignee: (A) shall take the Leasehold Estate subject to all of the provisions of this Lease or such new lease, and (B) shall assume and agree to perform all obligations of Lessee under this Lease. Any further assignment shall be subject to the consent of Lessor, which consent shall not be unreasonably withheld. Nothing in this Section shall be construed to obligate any Lender to remedy any default of Lessee, except under the circumstances where the Lender becomes the Lessee, and any failure of any Lender to complete any such cure after commencing the same shall not give rise to any liability of any Lender to Lessor or Lessee, except under the circumstances where the Lender becomes the Lessee.
(9) In the event (A) a Lender, its designee or another purchaser in foreclosure proceedings becomes the legal owner of the Leasehold Estate, (B) Lessor terminates this Lease by reason of any Event of Default (as defined herein), or (C) if the Lease is terminated for any other reason (including, without limitation, in connection with a bankruptcy proceeding) then, upon written request by Lender given within one hundred twenty (120) days after such transfer or receipt of notice of such termination of the Leasehold Estate, the City shall execute and deliver a new lease of the Leased Premises to such Lender, or its nominee, purchaser, assignee or transferee (the “Nominee”), provided that, except as provided in subsection (8) of this Section 8.2(a) if such Nominee is not the purchaser at a foreclosure sale and is not wholly owned by one or more Lenders, such Nominee is approved by Lessor in its reasonable discretion.

Such new lease shall be substantially in the same form as this Lease, shall have a term equal to the remainder of the Lease Term with the same agreements, covenants, reversionary interests and conditions (except for any requirements which have been fulfilled by Lessee prior to termination or that is personal to Lessee) as are contained in this Lease and with priority equal to this Lease with respect to encumbrances of Lessor’s interest in the Land or the Leased Premises or encumbrances of Lessee’s interest in the Leased Premises permitted or caused by Lessor (with Lessee's and Senior Lender's prior written approval), together with any provisions legally required in the event the Nominee is a governmental entity; provided, however, that any defaults by Lessee susceptible to cure by the Lender have been cured or reasonable assurance has been

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24 provided to Lessor that such defaults shall be cured. Upon execution and delivery of such new lease by Lessor and the Nominee, the Nominee shall have acquired all the right, title and interest of Lessee under this Lease prior to its termination. Lessor, shall cooperate in taking such action as shall be necessary to cancel and discharge this Lease and to remove Lessee from the Leased Premises. After such termination and cancellation of the Lease and prior to the expiration of the period within which Lender or Nominee may elect to obtain a new lease from Lessor, Lessor shall refrain from terminating any existing sublease or otherwise encumbering the Premises without the prior written consent of Lender or Nominee. Any new lease granted hereby shall vest in Lender or Nominee all right, title, interest, power and privileges of Lessee hereunder in and to the Premises, including, without limitation, the assignment of Lessee’s interest in and to all then existing subleases and sublease rentals and the automatic vesting of title to all Improvements, fixtures and personal property of Lessee in Lender or Nominee. Lessee shall provide to Lender or Nominee and Lessor copies of any residential or commercial subleases and estoppels to disclose any obligations encumbering the Leased Premises. Such new lease shall provide, with respect to each and every permitted sublease shall be deemed to have recognized the sublessee under the sublease, pursuant to the terms of the sublease as though the sublease had never terminated but had continued in full force and effect after the termination of the Lease, and to have assumed all the obligations of the sublessor under the sublease accruing from and after the termination of the Lease, except that the obligation of the new lessee, as sublessor, under any covenant of quiet enjoyment, expressed or implied, contained in any such sublease shall be limited to the acts of such new lessee and those claiming by, under or through such new lessee.

If more than one Lender is entitled to a new lease pursuant to this subsection, Lessor shall enter into such new lease with the lender whose mortgage or deed of trust that has the highest lien priority.
(10) If a Lender or Nominee subsequently transfers its interest under this Lease after acquiring such interest by foreclosure or deed in lieu of foreclosure and, in connection with any such transfer, the transferee obtains a mortgage or deed of trust encumbering such leasehold interest to secure all or any portion of the purchase price given to the Lender or Nominee for such transfer, then such mortgage or deed of trust shall be considered an Approved Loan hereunder, and the Lender shall be entitled to receive the benefit of and to enforce the provisions of this Lease or the new lease approved pursuant paragraph (9) of this Section 8.2(a).
(11) U
nless the Lenders otherwise consent in writing, Lessor and Lessee each hereby waives, and agrees not to assert or otherwise take the benefit of, that portion of Section 365(d)4, or any other applicable provisions, of the United States Bankruptcy Code (11 U.S.C. Section 101 et seq.), which provides for the deemed rejection of a lease in certain circumstances, so long as the trustee is paying the rent due under the Lease and performs, or causes the performance of, the uses of the Leased Premises for the Project pursuant to this Lease. (12) S
ubject to the rights of the Lenders, which shall have priority over all persons or entities given rights under this clause (12), any Investor limited partners (or members, as applicable) of Lessee shall have the same rights as any Lender authorized under paragraphs (2), (3) and (7) of this Section 8.2(a) of this Lease and any reference to a Lender in paragraphs 2), (3) and (7) of this Section 8.2(a) shall be deemed to include such limited partners (or members, as applicable).

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25 (13) Lessor shall cooperate in including in this Lease by suitable amendment from time to time any provision which may reasonably be requested by any Lender or any proposed lender, for the purpose of implementing the mortgagee-protection provisions contained in this Lease and allowing such Lender or proposed lender reasonable means to protect or preserve the lien of the leasehold mortgage and the value of its security, and to include any additional rights and privileges reasonably requested to be added by such Lender. Lessor, subject to City Council approval which may be withheld, agrees to execute and deliver (and to acknowledge, if necessary, for recording purposes) any agreement necessary to effect any such amendment; provided, however, that any such amendment shall not in any way affect Lessor’s Estate or any other interest of Lessor in the Land or the Leased Premises, affect the Lease Term or rent under this Lease, or otherwise in any material respect adversely affect any rights of Lessor under this Lease.
(b) Notwithstanding any contrary provision of this Lease, in no event may any mortgage or other security instrument, including without limitation any Leasehold Mortgage, be recorded against Lessor’s fee interest in the Land or reversionary interest in the Improvements without Lessor’s prior written consent, which Lessor may grant or withhold in the exercise of Lessor’s sole discretion.
(c) Intentionally omitted.
(d) Notwithstanding any contrary provision hereof, if prior to completion of construction of the Improvements, a Lender completes a foreclosure sale or accepts a deed in lieu of foreclosure, such Lender or such Lender’s nominee may complete construction with modifications to the Construction Plans as necessary to make the Project economically feasible and as reasonably approved by the City of Livermore provided that such modifications will not result in a reduction in the number of residential units, a reduction in the number of on-site parking spaces, or a significant reduction in Project common space or amenities.

Section 8.3 Cost of Approved Loans to be Paid by Tenant .

Lessee affirms that it shall
bear all of the costs and expenses in connection with (a) the preparation and securing of the Approved Loans, (b) the delivery of any instruments and documents and their filing and recording, if required, and (c) all taxes and charges payable in connection with the Approved Loans.

Section 8.4 Pr
oceeds of Approved Loans. It is expressly understood and agreed that all Approved Loan proceeds shall be paid to and become the property of Lessee, and that Lessor shall have no right to receive any such Approved Loan proceeds.

Section 8.5 Not
ice and Right to Cure Defaults Under Approved Loans. Upon the recording of a memorandum of this Lease, Lessor may record in the Official Records of the County of Alameda a request for notice of any default under each Approved Loan. In the event of default by Lessee under an Approved Loan, Lessee or Lessor shall have the right, but not the obligation, to cure the default in accordance with the Loan Documents. Any payments made by Lessor to cure a default shall be treated as Additional Rent due from Lessee hereunder, which shall be paid within thirty (30) days of the date on which the payment was made by Lessor.

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26 Section 8.6 Rights of Investor. The Investor shall have the same notice and cure rights as any Lender for so long as it is a limited partner of Lessee; provided however, the references in this Section 8 to additional cure periods of Lender to permit Lender to foreclose shall instead refer to Investor’s actions to remove the general partner of Lessee.

Section 8.7 Ri
ght to Pay Taxes and Senior Mortgage. All Lenders shall have the right (but not the obligation) to pay any taxes payable by Lessor with respect to the Leased Premises, and to cure any monetary or nonmonetary default by Lessor under any mortgage or other encumbrance on the Leased Premises which has priority over this Lease; and, if a Lender does so pay or cure, Lessor agrees that it will reimburse the Lender for the amount thereof promptly following request by the Lender therefor.

ART
ICLE 9.

In the event of any conflict between this Article 9 and any other term or provision of this lease this Article 9 shall control.

REPRESENTATIONS, WARRANTIES AND COVENANTS

Section 9.1 R epresentations, Warranties and Covenants of Lessor. As an inducement to Lessee to enter into and proceed under this Lease, Lessor warrants and represents to Lessee as follows, which warranties, representations and covenants are true and correct as of the date of this Lease, to the actual knowledge of Lessor:
(a) L
essor has good and marketable, fee simple title to the Leased Premises, subject only to encumbrances of record or disclosed in writing to Lessee (“Permitted Encumbrances”), and has the right, power and authority to enter into this Lease and to lease the Leased Premises to Lessee in accordance with the terms, provisions and conditions contained in this Lease, and no other party has any right or option to or in connection with Lessor’s interest in the Leased Premises; and Lessor shall not encumber the fee interest in the Leased Premises without Lessee’s and Senior Leander’s prior written consent. (b) there is no litigation or action, pending or threatened, affecting the Leased Premises or any streets or other public rights-of-way abutting or serving the Leased Premises; (c) Lessor has received no written notice and has no knowledge, nor has Lessor been otherwise advised, of any pending or threatened Taking relating to all or any part of the Leased Premises;
(d) Lessor has received no written notice and has no actual knowledge of the intention of any party holding an easement affecting the Leased Premises or any part thereof to expand the exercise of any such easement beyond the current scope permitted by the applicable Permitted Encumbrance;

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27 (e) the entry by Lessor into this Lease with Lessee and the performance of all of the terms, provisions and conditions contained herein will not, or with the giving of notice or the passage of time, or both, would not, violate or cause a breach or default under any other agreement relating to the Leased Premises to which Lessor is a party or by which it is bound, including, without limitation, the Permitted Encumbrances; (f) except as disclosed to Lessee or as is apparent from Lessee’s inspection, there is no tenant, lessee or other occupant of the Leased Premises having any right or claim to possession or use of the Leased Premises;
(g) there are no unpaid special assessments of which Lessor has received notice for sewer, sidewalk, water, paving, gas, electrical or utility improvements or other capital expenditures affecting the Leased Premises;
(h) there are no outstanding notices of, nor, to Lessor’s knowledge, any violations of any Legal Requirements affecting any portion of the Leased Premises that materially affect the development of the Improvements;
(i) To Lessor’s actual knowledge, except as disclosed in that certain Phase 1 Environmental Site Assessment dated June 2021, prepared by Geocon Consultants (“Environmental Report”), neither the Leased Premises nor any part thereof has been used for the disposal of refuse or waste, or for the generation, processing, manufacture, storage, handling, treatment, transportation or disposal of any Hazardous Materials, as provided to the Lessee through the DDLA. To Lessor’s actual knowledge, except as disclosed in the Environmental Reports, no Hazardous Materials have been installed, used, stored, handled, or located on or beneath the Leased Premises, which Hazardous Materials, if found on or beneath the Leased Premises, or improperly disposed of away from the Leased Premises, would subject the owner or occupant of the Leased Premises to damages, penalties, liabilities or an obligation to perform any work, cleanup, removal, repair, construction, alteration, demolition, renovation or installation in or in connection with the Leased Premises (“Environmental Cleanup Work”) in order to comply with any Legal Requirements applicable to Hazardous Materials. To Lessor’s actual knowledge, there is no notice from any Governmental Authority or any Person, claiming any violation of any Legal Requirement pertaining to Hazardous Materials or any liability thereunder, or requiring or calling any attention to the need for any Environmental Cleanup Work on or in connection with the Leased Premises, and neither Lessor, its agents or employees has ever been informed of any threatened or proposed serving of any such notice of violation or corrective work order. To Lessor’s actual knowledge, except as disclosed in the Environmental Reports, no part of the Leased Premises is affected by any “Hazardous Materials Contamination,” which for purposes hereof, shall mean (i) the contamination of any improvement, facilities, soil, subsurface strata, ground water, ambient air, biota or other elements on or of the Leased Premises by Hazardous Materials, or (ii) the contamination of the buildings, facilities, soil, subsurface strata, ground water, ambient air, biota or other elements on, or of, any other property as a result of Hazardous Materials emanating from the Leased Premises.

Section 9.2 R
epresentations, Warranties and Covenants of Lessee.

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28 As an inducement to Lessor to enter into and to proceed under this Lease, Lessee warrants and represents to Lessor as follows, which warranties, representations and covenants are true and correct as of the date of this Lease:
(j) A uthority . Lessee has the right, power and authority to enter into this Lease and the right, power and authority to comply with the terms, obligations, provisions and conditions contained in this Lease;
(k) No Breach of Obligations.

The entry by Lessee into this Lease and the
performance of all of the terms, provisions and conditions contained herein will not, or with the giving of notice or the passage of time, or both, would not, violate or cause a breach or default under any other agreements to which Lessee is a party or by which it is bound.

Section 9.3 Hazar
dous Materials. Lessee (i) shall not cause or permit any Hazardous Materials to be placed, held, located or disposed of on, under or at the Leased Premises or any part thereof, except in commercially reasonable amounts used in the construction and operation of the Improvements and in accordance with Legal Requirements, and (ii) shall not cause or permit any Hazardous Materials contamination of the Leased Premises or any part thereof.

Section 9.4 Re
location Obligations and Indemnity. Lessee covenants that persons residing on the Leased Premises shall not be displaced before suitable temporary replacement housing is available within the Project or elsewhere. Lessee shall ensure that all occupants of the Leased Premises receive all notices, benefits and assistance to which they are entitled in accordance with California Relocation Assistance Law (Government Code Section 7260 et seq.), all state and local regulations implementing such law, and all other applicable federal, state, or local relocation law, regulation, or policy, including but not limited to the Uniform Relocation Act (42 U.S.C. § 4601 et seq.) and implementing regulations (collectively referred to herein as “Relocation Laws”). Any and all costs incurred in connection with the temporary and/or permanent displacement and/or relocation of occupants of the Leased Premises, including without limitation payments to a relocation consultant, moving expenses, and payments for temporary and permanent relocation benefits pursuant to Relocation Laws shall be paid by Lessee, and Lessor shall have no responsibility for payment therefor. Lessee shall be liable for any and all claims for applicable relocation benefits sought by any current, former or future tenant of the Land or the Improvements existing or to be constructed on the Land pursuant to this Lease.

In addition to any other indemnities provided by Lessee in this Lease, to the fullest extent permitted by law, Lessee shall indemnify, protect, defend (with counsel selected by or otherwise acceptable to Lessor), and hold harmless the Indemnitees from and against any and all alleged or actual Claims arising out of or in connection with the breach of Lessee’s obligations set forth in this Section or arising directly or indirectly from the transfer of the Leased Premises to the Lessee, including without limitation Claims for relocation benefits and assistance under any Relocation Laws, all leasehold interests and rights of tenancy or occupancy, any bonus value, lost income (past or future), failure to locate a suitable replacement residential location, lost rental income or sublease or license income, severance damages (if any), pre-condemnation damages (if any), economic or consequential damages, professional consultant fees, attorneys’ fees and costs, expert witness fees and costs, and any and all compensable interests, and/or

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29 damages, and/or claims, of any kind and nature, claimed or to be claimed, suffered or to be suffered, by any person or entity that is or claims to be a current or former tenant or sub-tenant or occupant with a right to use or occupy the Leased Premises. The provisions of this Section shall survive the expiration or termination of this Lease. The provisions in Section 6.4(b), (c), and (d) of this Lease apply to this obligation to defend, indemnify, and hold harmless.

Section 9.5 H
azardous Materials Indemnification. In addition to any other indemnities provided in this Lease, to the fullest extent permitted by law, from and after the Commencement Date, Lessee shall indemnify, protect, hold harmless and defend (with counsel selected by or otherwise acceptable to Lessor) the Indemnitees from and against any and all Claims arising directly or indirectly, in whole or in part, out of (i) any activity by Lessee, its affiliates or its agents or contractors or subcontractors carried on or undertaken on or off the Leased Premises in connection with the handling, treatment, removal, storage, decontamination, cleanup, transport or disposal of any Hazardous Materials located or present in, on, under or about the Leased Premises; or (ii) the failure of Lessee to comply with any Environmental Laws relating to the handling, treatment, presence, removal, storage, decontamination, cleanup, transportation, or disposal of Hazardous Materials into, on, under or from the Leased Premises, except to the extent any such Claim arises from the sole active gross negligence or willful misconduct of the Indemnitees. The provisions of this Section shall survive the expiration or termination of this Lease. The provisions in Section 6.4(b), (c), and (d) of this Lease apply to this obligation to defend, indemnify, and hold harmless.

Notwithstanding any contrary provision hereof, the indemnity provided in this Section

9.5 shall not apply to Claims arising in connection with or resulting from Hazardous Materials present on the Property prior to the Commencement Date including as identified in that certain Environmental Site Assessment dated June 2021, prepared by Geocon Consultants, except to the extent such Claims result from or arise out of or in connection with the acts or omission of Lessee or its affiliations, employees, officers, directors, volunteer, agents, contractors, or subcontractors or relate to or arise in connection with the demolition of existing improvements on the Leased Premises including without limitation, the release, transportation or disposal of Hazardous Materials in connection with such demolition.

Section 9.6 Pr
evailing Wage Requirements. If required by applicable federal and state law, Lessee and its contractors, subcontractors, affiliates, and agents shall comply with the federal Davis Bacon Act and implementing regulations and with California Labor Code Section 1720 et seq. and the regulations adopted pursuant thereto (all of the foregoing, collectively, “Prevailing Wage Laws”), and shall be responsible for carrying out the requirements of such provisions. To the greatest extent permitted by law, Lessee shall indemnify, defend (with counsel selected or otherwise acceptable by Lessor) and hold the Indemnitees harmless from and against all Claims which directly or indirectly, in whole or in part, are caused by, arise in connection with, result from, relate to, or are alleged to be caused by, arise in connection with, or relate to, the payment or requirement of payment of prevailing wages (including without limitation, all Claims that may be made by contractors, subcontractors or other third party claimants pursuant to Labor Code Sections 1726 and 1781) or the requirement of competitive bidding in connection with the Project, the failure to comply with any state or federal labor laws, regulations or standards in connection with this Lease, including but not limited to the Prevailing Wage Laws, or any act or omission of Lessee related to this Lease with respect to the payment or

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30 requirement of payment of prevailing wages or the requirement of competitive bidding, whether or not any insurance policies shall have been determined to be applicable to any such Claims.

The provisions of this Section shall survive the expiration or earlier termination of this Lease.

The provisions in Section 6.4(b), (c), and (d) of this Lease apply to this obligation to defend, indemnify, and hold harmless.

Section 9.7 C
ompliance with Laws. Lessee shall carry out and shall cause its contractors, subcontractors, agents, and affiliates to carry out the construction of the Project, and shall operate the Project in conformity with all applicable federal, state and local laws, rules, ordinances and regulations (“Applicable Laws”), including without limitation, all applicable federal and state labor laws and standards, Section 3 of the Housing and Community Development Act of 1974, as amended (if applicable), applicable provisions of the California Public Contracts Code (if any), the City’s zoning and development standards, building, plumbing, mechanical and electrical codes, all other provisions of the City’s Municipal Code, and all applicable disabled and handicapped access requirements, including without limitation, the Americans with Disabilities Act, 42 U.S.C. Section 12101, et seq., Government Code Section 4450, et seq., Government Code Section 11135, et seq., and the Unruh Civil Rights Act, Civil Code Section 51, et seq. To the fullest extent permitted by law, Lessee shall indemnify, defend (with counsel selected by or otherwise acceptable to Lessor) and hold harmless the Indemnitees from and against any and all Claims arising in connection with or related to the breach of Lessee’s obligations set forth in this Section whether or not any insurance policies shall have been determined to be applicable to any such Claims. This Section shall survive the expiration or termination of this Lease. The provisions in Section 6.4(b), (c), and (d) of this Lease apply to this obligation to defend, indemnify, and hold harmless.

Section 9.8 Af
fordability and Use Restrictions. Lessee hereby covenants and agrees that the Leased Premises shall be used solely for the operation of a multifamily rental senior housing development in compliance with the requirements set forth herein. Throughout the Affordability Term, (as defined in Section 1.1(e) Lessee agrees that: (i) not less than 16 of the residential units shall be both Rent Restricted and occupied (or if vacant, available for occupancy) by Eligible Households whose gross household income is no greater than twenty percent (20%) of AMI, (ii) not less than 8 of the residential units shall be both Rent Restricted and occupied (or if vacant, available for occupancy) by Eligible Households whose gross household income is no greater than thirty percent (30%) of AMI; (iii) 43 of the residential units shall be both Rent Restricted and occupied (or if vacant, available for occupancy) by Eligible Households whose gross household income is no greater than fifty percent (50%) of AMI, for a total of 68 of the residential units in the Project restricted to extremely low and very low income households; (iv) 9 of the residential units shall be both Rent Restricted and occupied (or if vacant, available for occupancy) by Eligible Households whose gross household income is no greater than sixty percent (60%) of AMI (“Restricted Unit(s)”); and (v) all units, except for one (1) of the residential units in the Project which shall be a manager’s unit for which rent will not be restricted, will be restricted by the TCAC restrictive covenant to be recorded when the units are placed-in-service by TCAC’s definition (“TCAC Units”). The Restricted Units shall have maximum unit occupancy standards established according to TCAC regulations or in the absence of such regulations shall be two persons per bedroom plus one additional person. A total of 78 units will be allocated to the Local Housing Trust Fund (LHTF). Presumed occupancy for the purposes of determining Restricted Rent shall be based upon TCAC rules, but in absence of

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31 those rules, shall be as follows: 1 person occupying a studio unit; 2 persons occupying a one- bedroom Unit; and, 3 persons occupying a two-bedroom unit. The intent of the affordability restrictions in this Section 9.8 is to duplicate the restrictions set forth in the Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants by and between the Lessor and Lessee dated on or about the same date of this Lease (the “City Regulatory Agreement”), as such during the term of the Regulatory Agreement, Lessee’s compliance with the Regulatory Agreement shall be deemed compliance with this Section 9.8 and any conflicts between this Section 9.8, or any other section of this Lease, and the Regulatory Agreement shall be resolved in favor of the Regulatory Agreement.

Number of Targeted
Low-Income Units
Percent of Area
Median Income (AMI)
(20%-50%)
Percentage of Low-
Income Units
(before rounding down)
16 20% 20.51
9 30% 11.54
43 50% 55.13
10 60% 12.82

Following expiration of the Affordability Term and through the remainder of the Lease Term, at least forty-nine percent (49%) of the residential units in the Project, other than the management units, shall be restricted for Seniors earning up to 60% of Area Median Income.

In the event that recertification of tenant incomes indicates that the number of Restricted Units actually occupied by Eligible Households falls below the number reserved for each income group as specified in this section, Lessee shall rectify the condition by renting the next available dwelling unit(s) in the Project to Eligible Household(s) until the required income mix is achieved. A dwelling unit shall qualify as “Rent Restricted” if the gross rent charged for such unit does not exceed the Affordable Rent for the applicable household income category as set forth herein.

9.8.1. P
roject Based Section 8 Units. To the extent allowed under the rules and regulations applicable to such program, Lessee agrees that Project Based Section 8 assistance received for the Project shall be prioritized to those Restricted Units serving the lowest income tenants in the Project. Notwithstanding any contrary provision of this Agreement, for units that are subsidized with Section 8 project -based vouchers, the rules and regulations applicable to such program shall prevail with respect to the s etting of rents, implementation of occupancy requirements, and determination of gross household income.

9.8.2 Tenant Recertification.

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32 Household(s) until the required income mix is achieved. A dwelling unit shall qualify as “Rent Restricted” if the gross rent charged for such unit does not exceed the Affordable Rent for the applicable household income category as set forth in Section 9.8.

9.8.3 D
isabled Persons Occupancy .
a) Lessee shall cause the Project to be operated at all times in compliance with all applicable federal, state, and local disabled persons accessibility requirements including, but not limited to the applicable provisions of: (i) the Unruh Act, (ii) the California Fair Employment and Housing Act, (iii) Section 504 of the Rehabilitation Act of 1973, (iv) the United States Fair Housing Act, as amended, (v) the Americans With Disabilities Act of 1990, and (vi) Chapters 11A and 11B of Title 24 of the Californi a Code of Regulations, which relate to disabled persons access (collectively, the "Accessibility Requirements"). b) To the fullest extent permitted by law, Lessee shall indemnify, protect, hold harmless and defend (with counsel selected by or otherwise acceptable to Lessor) the Indemnitees from and against Claims arising out of or related to Lessee's, or Lessee’s officials, officers, directors, employees, agents, servants, volunteers, assignees, or licensees failure to comply with the Accessibility Requirements. The provisions in Section 6.4(b), (c), and (d) of this Lease apply to this obligation to defend, indemnify, and hold harmless.

9.8.4 L
oss of Subsidy .

It is anticipated that certain Restricted Units in the Project (the "Subsidy Units") will receive Project-Based Section 8 or other rental subsidies (the "Rental Subsidy") throughout the Term, as reflected in the Financing Plan for the Project. If any change in federal law occurs, or any action (or inaction) by Congress or any federal or state agency occurs, which results in a material reduction, termination or nonrenewal of the Rental Subsidy through no fault of the Lessee, such that the Rental Subsidy shown on the Finance Plan for the Project approved by the Lessor is no longer available, Lessee shall, in anticipation of such loss in Rental Subsidy, use good faith efforts for a period of ninety (90) days, to identify and obtain alternative sources of rental subsidies and shall provide the Lessor progress reports on Lessee's efforts to identify and obtain alternative sources of rental subsidies. If at the end of such ninety (90) day period, Lessee is unable to secure an alternate source of rental subsidy, notwithstanding Section 9.8.2, Lessee may increase the rent on one or more of the Restricted Units that overlap with a Subsidy Unit, up to sixty percent (60%) of AMI (“TCAC Maximum Rent Limit”), subject to the following requirements:

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620
33 a) Any such rent increase must be pursuant to a transition plan approved by the Lessor showing how the rent increase will be implemented, and which Restricted Units will be subject to the increase, and, if applicable, be consistent with remedial measures set forth in California Code of Regulations Title 4, Division 17, Chapter 1, Section 10337(a)(3) or successor regulation applicable to California's Federal and State Low Income Housing Tax Credit Program;
b) At the time Lessee requests an increase in the Restricted Unit rent, Lessee shall provide the Lessor with a copy of the proposed Annual Operating Budget showing the impact of the loss or reduction of the Rental Subsidy;
c) Any subsequent rent increases remain subject to Section 9.8.4 above; and, d) The number of Restricted Units subject to the rent increase and the level of rent increase may not be greater than the amount required to ensure that the Project generates sufficient income to cover its operating costs and debt service as shown on the A nnual Operating Budget, and as is necessary to maintain the financial stability of the Development. e) Upon receipt of any alternative rental subsidies, Lessee shall reduce the rents on the Restricted Units back to the Affordable Rents set out in Section 9.8 , to the extent that the alternative rental subsidies provide sufficient income to cover the operating costs and debt service of the Project as shown on the Annual Operating Budget.

9.8.5 R
ent Increases on Foreclosure .

In the event that a Senior Lender (as defined in the Loan Agreement) foreclosures on the Project (or receives a deed in lieu of foreclosure), the rents on one or more of the Restricted Units may be increased up to the TCAC Maximum Rent Limit to maintain the financial feasibility of the Project, subject to the following requirements:
a) I n no event shall fewer than 49% of all units in the Development be maintained as Restricted Units at or below 60% of Area Median Income. Any such rent increase must be pursuant to a transition plan approved by the Lessor showing: (i) how the rent increase will be phased-in; (ii) which Restricted Units will be subject to the increase; and (iii) the operating income and expenses for the Project comparing the current rent structure to the proposed rent structure;
b) The number of Restricted Units subject to the rent increase and the level of rent increase may not be greater than the amount required to ensure that the Project generates sufficient income to cover its operating costs and debt service, and as is necessary to maintain the financial stability of the Development; and
c) The rent increase may occur only at the time of renewal of the term of the lease of an existing Tenant or the time of leasing a Restricted Unit to a new tenant. Any subsequent rent increases remain subject to Section 9.8.4 above.

9.8.6 R
ents for Restricted Units; Unit Sizes .

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34 For all Restricted Units rents shall be limited to Affordable Rents for households of the applicable income limit and presumed household size in accordance with TCAC Standards. In the event that TCAC no longer publishes the income and rent information that this Lease contemplates that TCAC will publish, respectively, the Lessor shall provide Lessee with other income and rent determinations which are reasonably similar with respect to methods of calculation to those previously published by TCAC, as applicable. Notwithstanding the foregoing, no tenant qualifying for a Restricted Unit shall be denied continued occupancy of a unit in the Project because, after admission, such tenant's household income increases to exceed the qualifying limit for such Restricted Unit. A household which at initial occupancy qualifies in a particular income category shall be treated as continuing to be of such income category so long as the household’s gross income does not exceed one hundred forty percent (140%) of the applicable income limit. In the event the gross household income of a household that qualified at the applicable income limit at initial occupancy exceeds the applicable income limit for a unit, that unit will continue to be considered as satisfying the applicable income limit if the unit remains Rent-Restricted. In the event a tenant’s household income exceeds the limits specified in this Section, Lessee shall apply the rules applicable to the Project pursuant to Section 42 of the Internal Revenue Code of 1986, as amended and the federal Regulations applicable thereto. In the event of inconsistency between the provisions of this Section and the rules applicable to the Project in connection with low-income housing tax credits, the rules applicable pursuant to such financing source shall prevail.
a) For the purpose of determining whether a household is an Eligible Household, gross household income shall be determined in accordance with TCAC regulations and federal regulations applicable to low-income housing tax credits. b) Subject to Section 9.8.3(a), if, upon recertification of the income of a Tenant of a City-Assisted Unit, Lessee determines that a Tenant of a Restricted Unit has an Adjusted Income exceeding the maximum qualifying income for a 50% AMI Household, such Tenant shall be permitted to continue occupying the Restricted Unit and upon sixty (60) days written notice, the Rent may be increased to one-twelfth (1/12th) of thirty percent (30%) of the actual Adjusted Income of the Tenant, and Lessee shall rent the next available Unit of the appropriate size to a 20% AMI Household, a 30% AMI Household, a 40% AMI Household, or a 50% AMI Household, as applicable, at a Rent not exceeding the maximum Rent specified in Section 2.2, or designate another Unit in the Development with a 20% AMI Household as a 20% Unit, a 30% AMI Household as a 30% Unit, a 40% AMI Household as a 40% Unit, or a 50% AMI Household as a 50% Unit, as applicable, at a Rent not exceeding the maximum Rent specified in Section [2.2(a)].
c) Initial Rents are subject to Lessor approval. Rents may not be increased more often than once every twelve (12) months and by no more than five percent (5%) per year.

Borrower shall provide each Tenant with at least sixty (60) days written notice of any increase in Rent applicable to such Tenant.

Section 9.9 S
election of Tenants.

In order to ensure that there is an adequate supply of affordable housing within the City of Livermore for senior residents within the City, including an application preference for

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35 Veteran Seniors, as defined in the Regulatory Agreement, to the extent permitted by law (including but not limited to federal, state and local fair housing laws) and consistent with the program regulations for funding sources used for development of the Project, applications will be selected pursuant to an equitable selection method, and in accordance with City approved guidelines. Notwithstanding the foregoing, in the event of a conflict between this provision and the provisions of Section 42 of the Internal Revenue Code of 1986, as amended, or HUD Regulations applicable to the Project, the provisions of such Section 42 and HUD Regulations shall control. Lessee shall comply wit h City’s Affirmative Marketing Policies or other rental policies and procedures as they may be amended from time -to-time.

Section 9.10 R
eporting Requirements; Access to Information; Inspections. (a) Tenant Certification. Lessee or Lessee’s authorized agent shall obtain from each household prior to initial occupancy of each residential unit in the Project (except the manager’s unit), and on every anniversary thereafter, a written certificate containing all of the following in such format and with such supporting documentation as Lessor may reasonably require: (i) the identity of each household member; and (ii) the total gross household income.

Lessee shall retain such certificates for not less than five (5) years, and upon City’s request, shall provide copies of such certificates to City and make the originals available for City inspection. (b) Annual Report. Following completion of construction of the Project, on each April 1 during the term of this Lease, Lessee shall submit an annual report (“Annual Report”) to the Lessor in form satisfactory to Lessor, together with a certification that the Project is in compliance with the requirements of this Lease. Notwithstanding the Annual Report requirements, Lessee shall submit to the City an initial lease up report containing the tenant certification and occupancy information described in this section. The Annual Report shall, at a minimum, include the following information for each dwelling unit in the Project: (i) unit number and name; (ii) number of bedrooms; (iii) current rent and other charges; (iv) move in date and dates of any vacancies during the previous year; (v) number of people residing in the unit; (vi) total gross household income of residents; (vii) documentation of source of household income; and (viii) the information required by Paragraph (a). Lessee shall include with the Annual Report, an income recertification for each household, documentation verifying tenant eligibility, and such additional information as Lessor may reasonably request from time to time in order to demonstrate compliance with this Lease. The Annual Report shall conform to the format requested by Lessor; provided however, during such time that the Project is subject to a regulatory agreement restricting occupancy and/or rents pursuant to requirements imposed in connection with the use of state or federal low-income housing tax credits, Lessee may satisfy the requirements of this Section that pertain to tenant income certification and rents by providing Lessor with a copy of compliance reports required in connection with such financing.

I
n addition to the information described above, the Annual Report shall include the following:
(i) A Project income and expense statement for the reporting period;

(ii) Proposed annual budget for the next fiscal year which sets forth Lessee’ s estimate of operating income, operating expenses and debt service for the year, amounts payable to reserves and proposed rent adjustments;

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36 (iii) A report on maintenance and other issues anticipated to affect the current budget needs of the Project as well as the amount in the Project’s reserve accounts and the amount expected to be needed for major repairs or other needs during the new fiscal year;

(iv) Information on the status of the waiting list for units, including the number of households on the list; and

(v) A financial audit of the books and records of the Project prepared in accordance with generally accepted auditing standards by an independent certified public accountant.

(vi) Lessor may, from time to time request additional or different information, and Lessee shall promptly supply such information in the reports required hereunder. (c) Maintenance of Records, Inspections. Lessee shall maintain copies of tenant leases, income certifications and other matters related to the leasing of the residential units in the Project for a period of five (5) years after the final date of occupancy by the tenant. Lessee shall provide Lessor and its authorized agents and representatives access to and copies of any books, documents, papers and records of the Project for the purpose of making audits, examinations, excerpts and transcriptions. With 48-hours’ notice, during normal business hours and as often as may be deemed necessary, Lessor and its authorized agents and representatives shall be permitted access to and the right to examine the Improvements and the Leased Premises and to interview employees of the Project, for the purpose of verifying compliance with applicable regulations and compliance with the conditions of this Lease.

Section 9.11 No
n-Discrimination; Compliance with Fair Housing Laws. Lessee shall not restrict the rental, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Leased Premises, or any portion thereof, on the basis of race, color, religion, creed, sex, sexual orientation, disability, marital status, ancestry, or national origin of any person. Lessee covenants for itself and all persons claiming under or through it, and this Lease is made and accepted upon and subject to the condition that there shall be no discrimination against or segregation of any person or group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property or part thereof, nor shall Lessee or any person claiming under or through Lessee establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in, of, or for the Property or part thereof. Lessee shall include such provision in all leases and rental agreements affecting the Leased Premises or part thereof, and shall enforce the same diligently and in good faith.

Section 9.12 F
air Housing. Lessee shall comply with state and federal fair housing laws in the marketing and rental of the units in the Project. Lessee shall accept as tenants, on the same basis as all other prospective tenants, persons who are recipients of federal certificates or vouchers for rent subsidies pursuant to the existing Section 8 program or any successor thereto.

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37 Section 9.13 Man agement Entity and Replacement of Management Agent. City shall be notified at least 90 days prior to any changes in the Management Entity and shall have the right to review and approve the qualifications of the management entity proposed by Lessee for the Project and shall have the right to review and approve any agreement prior to execution between Owner and the management entity, which approval shall not be unreasonably withheld, conditioned or delayed. The contracting of management services to a management entity shall not relieve Lessee of its primary responsibility for proper performance of management duties.

City hereby approves Satellite Affordable Housing Associates Property Management Corporation as the initial management entity for the Project. Any subsequent management entity shall be subject to City review and approval, which shall not be unreasonably withheld, conditioned or delayed. Upon City determination and delivery of written notice to Lessee that Lessee has failed to operate the Project in accordance with this Agreement, subject to any applicable cure period and the approval of the Project lenders and equity investors, City may require Lessee to contract with a qualified management agent selected by City and approved by the Project lender and equity investor, to operate the Project, or to make such other arrangements as City deems necessary to ensure performance of the required functions. An on-site property management representative is required to reside on the property. If the on-site property management representative is not also the assigned property management staff for the Project, then the representative shall still be available to address resident issues and to serve as the point of contact for City business and the public after regular business hours at the Property.

ARTICLE 10.

EMINENT DOMAIN
Section 10.1 Termination of Lease. Lessor and Lessee agree that, in the event of a Taking such that Lessee reasonably determines that the Leased Premises cannot continue to be operated, at reasonable cost, for its then-current use, then, subject to the rights and consent of Lenders, this Lease shall, at Lessee’s sole option, terminate as of the date of the Taking.

Section 10.2 Cont
inuation of Lease and Presumption of Restoration. Lessor and Lessee agree that, in the event of Taking that does not result in the termination of this Lease pursuant to Section 10.1 above, this Lease shall continue in effect as to the remainder of the Leased Premises, and the Net Condemnation Award will be disbursed in accordance with Section 10.4 below to Lessor and Lessee and/or any Lender, if the terms of the applicable Leasehold Mortgage so require, and shall be used so as to make the same as complete, unified and efficient operating unit as nearly as reasonably possible to the condition existing prior to the Taking, subject to any applicable requirements of the Lender.

Section 10.3 Te
mporary Taking. If there shall be a temporary Taking with respect to all or any part of the Leased Premises or of Lessee’s interest in this Lease, then the Term shall not be reduced and Lessee shall continue to pay in full all Rents, Impositions and other charges required herein, without reduction or abatement thereof at the times herein specified; provided, however, that Lessee shall not be required to perform such obligations that Lessee is prevented from performing by reason of such temporary Taking.

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38 Section 10.4 Apportionment of Award . If there is a Taking, whether whole or partial, Lessor and Lessee shall be entitled to receive and retain such separate awards and portions of lump sum awards as may be allocated to their respective interests in any condemnation proceedings, or as may be otherwise agreed, taking into consideration Lessor’s fee interest in the Land (as encumbered by this Lease) and reversionary interest in the Improvements upon the expiration of the Term or termination of this Lease. If the Leased Premises are restored as is contemplated in Section 10.2 above, Lessee shall be entitled to recover the costs and expenses reasonably incurred in such restoration out of any Net Condemnation Award payable to Lessee.

Thereafter, if the condemning authority does not make separate awards, the Parties agree that any Net Condemnation Award will be allocated as follows on a proportionate basis reflecting the Parties’ respective interests in the Land and Improvements and the remaining duration of the Term as follows:
(A) Award on Total or Substantial Taking. In the event of a total or substantial taking, the award shall be apportioned as follows, in the following order:
(a) To the Lenders in an amount equal to the amounts owing on the Leasehold Mortgages (provided that the Lender whose loan is secured by the mortgage or deed of trust that has the highest lien priority shall be paid in full first, prior to any portion of the award being distributed to a Lender whose loan is secured by a mortgage or deed of trust with a lower lien priority).
(b) To Lessor that portion of the award equal to the fair market value of the Land and its reversionary interest in the Improvements. (c) To Lessee, that portion of the award equal to the fair market value of the Improvements (subject to Lessor’s reversionary interest), less the amount paid to the Lenders pursuant to (a) above.
(d) Any “bonus value” (i.e., any portion of the award attributable to the fact that the rent payable by Lessee under this Lease is at a below market rate) shall be paid to Lessor; provided however, if the condemning agency is Lessor, any such “bonus value” shall be equally divided between Lessor and Lessee.
(e) The balance, if any, shall be allocated between Lessor and Lessee respectively in that proportion in which (i) the fair market value of the Land bears to (ii) the fair market value of the Improvements, exclusive of Lessor’s reversionary interest. (B) A
ward on Partial Taking . In the event of a partial taking, then subject to the terms and provisions of the Senior Leasehold Mortgage, after application of the Award for restoration, any remaining portion of such award shall be apportioned as follows, subject to the allocations in Section 10.4 above, in the following order:
(
a) To the Lenders in an amount equal to the amounts owing on the Leasehold Mortgages (provided that the Lender whose loan is secured by the mortgage or deed of trust that has the highest lien priority shall be paid in full first, prior to any portion of the award being distributed to a Lender whose loan is secured by a mortgage or deed of trust with a lower lien priority).

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39 (b) To Lessor, that portion of the award attributable to the fair market value of the portion of the Land taken and that portion of the award attributable to the fair market value of its reversionary interest in the Improvements taken. (c) To Lessee, that portion of the award equal to the fair market value of the portion of the Improvements taken (subject to Lessor’s reversionary interest), less the amount paid to the Lenders pursuant to (a) above, but only to the extent that the proceeds of the award are not used for restoration of the Improvements. (d) Any “bonus value” (i.e., any portion of the award attributable to the fact that the rent payable by Lessee under this Lease is at a below market rate) shall be paid to Lessor; provided however, if the condemning agency is Lessor, any such “bonus value” shall be equally divided between Lessor and Lessee.
(e) The balance, if any, shall be allocated between Lessor and Lessee respectively in that proportion in which (i) the fair market value of the Land bears to (ii) the fair market value of the Improvements exclusive of the reversionary interest of Lessor.
(f) Any severance damages awarded or payable because only a portion of the Land and Improvements are taken by eminent domain shall be (a) paid to Lessee during the first 49.5 years of this Lease and (b) equally divided between Lessee and Lessor during the next 49.5 years of this Lease (except to the extent needed to replace any Improvements taken by eminent domain with equivalent Improvements on the remainder of the Land).
(C) Award for Temporary Taking. Any award for a temporary taking shall, subject to the rights of any Lender, be awarded and retained by Lessee. (D) Rent Abatement for Partial Taking. In the event of any partial taking of the Improvements, commencing upon the date of the final order of condemnation, Rent payable under this Lease shall be reduced by the percentage equal to the square footage of the condemned portion of the Improvements divided by the total square footage of the Improvements prior to the taking.

Section 10.5 Joinder. I
f a Leasehold Mortgage exists, the Lenders, to the extent permitted by law, shall be made a party to any Taking proceeding.

Section 10.6 City Reservation of Rights. Notwithstanding any provisions in this Lease to the contrary, nothing herein does or shall be construed to limit or require the City to exercise its ability to condemn any property, including the Leased Premises, in accordance with applicable law. Nothing in this Lease does or shall be construed as requiring the City to pay to Lessee, any Lender, or any other third party with an interest in the Leased Premises, any amount of money, as compensation for alleged condemnation or otherwise, if City (or its successor) seeks to enforce any of the rights and obligations under this Lease and any executed attachments thereto. Except when City exercises its ability to condemn the Leased Premises by adoption of a resolution of necessity and pursuant to other provisions of applicable law, City shall not be a

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40 construed as pursuing or effectuating a Taking or acting as a “condemning authority” under this Lease.

ARTICLE 11.

DAMAGE OR DESTRUCTION
Section 11.1 Damage or Destruction to Leased Premises. Lessee shall give prompt written notice to Lessor after the occurrence of any fire, earthquake, act of God or other casualty to or in connection with the Leased Premises, the Improvements or any portion thereof (hereinafter sometimes referred to as “Casualty”). Subject to Section 11.2 below and the rights of the Lenders under their Loan Documents, if during the Term the Improvements shall be damaged or destroyed by Casualty, Lessee shall repair or restore the Improvements, so long as Lessee determines, in its sole discretion, that it is feasible to do so and in such event Lessee provides or causes to be provided sufficient additional funds which, when added to such insurance proceeds, will fully effect such repair or restoration. Upon the occurrence of any such Casualty, Lessee, promptly and with all due diligence, shall apply for and collect all applicable insurance proceeds recoverable with respect to such Casualty, for the benefit of the Lenders (which insurance proceeds shall be immediately turned over to the Senior Lender to be held and disbursed in accordance with the terms and provisions of the Senior Leasehold Mortgage). In the event that Lessee shall determine, with Investor’s prior written consent during the Compliance Period (as defined in Section 42 of the Code), subject to the rights of the Lenders, by notice to Lessor given within thirty (30) days after receipt by Lessee of any such insurance proceeds, that it is not economically practical to restore the Improvements and/or the Leased Premises to substantially the same condition in which they existed prior to the occurrence of such Casualty, then, subject to the written approval of Lenders, Lessee may terminate this Lease as of a date that is not fewer than thirty (30) days after the date of such notice. If Lessee terminates this Lease pursuant to this Section 11.1, Lessee shall surrender possession of the Leased Premises to Lessor immediately and assign to Lessor (or, if same has already been received by Lessee, pay to Lessor) all of its right, title and interest in and to the proceeds from Lessee’s insurance upon the Leased Premises, subject to the prior rights of any Lender therein, as referenced in Section 11.3 below.

Section 11.2 Dam
age or Destruction Near End of Term. If, during the last seven (7) years of the Term, the Improvements shall be damaged by Casualty, then Lessee shall have the option, to be exercised within one hundred twenty (120) days after such Casualty:
(a) t
o repair or restore the Improvements as hereinabove provided in this Article 11; or
(b) subject to the rights and approval of Lenders, to terminate this Lease by notice to Lessor, which termination shall be deemed to be effective as of the date of the option to terminate the Lease is exercised by Lessee giving written notice of such termination to Lessor. If Lessee terminates this Lease pursuant to this Section 11.2, Lessee shall surrender possession of the Leased Premises to Lessor immediately and assign to Lessor (or, if same has already been received by Lessee, pay to Lessor) all of its right, title and interest in and to the proceeds from

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41 Lessee’s insurance upon the Leased Premises, subject to the prior rights of any Lender therein, as referenced in Section 11.3 below.

Section 11.3 D istribution of Insurance Proceeds. In the event that this Lease is terminated pursuant to Sections 11.1 or 11.2 hereof, the insurance proceeds received as the result of such Casualty shall be distributed as follows: (a) first, if Leasehold Mortgage(s) are in place, to the Lenders to the extent of any indebtedness then owed to such Lender in order of the Lien priority of the Leasehold Mortgages; (b) second, the balance, if any, of such insurance proceeds shall be paid to Lessee or, as applicable pursuant to Sections 11.1 and 11.2 above, assigned or paid over to Lessor.

Section 11.4 Ins
urance Requirements. Nothing in this Article 11 does permit or shall be construed as permitting Lessee to maintain less than the minimum insurance requirements set forth in this Lease.

ARTICLE 12.

EVENTS OF DEFAULT
Section 12.1 Events of Default. Each of the following shall be an “Event of Default” by Lessee hereunder:
(a) f ailure by Lessee to pay any Rent or Additional Rent when due if such failure shall continue for a period of thirty (30) days after notice thereof has been given by Lessor to Lessee;
(b) Lessee’s default in the performance of any term, provision or covenant under this Lease, and unless such provision specifies an alternate cure period for such default, the continuation of such default for thirty (30) days in the event of a monetary default or sixty (60) days in the event of a non-monetary default following the date upon which Lessor shall have given written notice of the default to Lessee, or if the nature of any such non-monetary default is such that it cannot be cured within sixty (60) days, Lessee’s failure to commence to cure the default within sixty (60) days and thereafter prosecute the curing of such default with due diligence and in good faith, but in no event longer than one hundred twenty (120) days from receipt of the notice of default;
(c) Lessee’s failure to maintain insurance on the Leased Premises and/or the Improvements as required hereunder, and the failure of Lessee to cure such default within five (5) days or written notice from Lessee;
(d) Subject to Lessee’s right to contest the following charges, Lessee’s failure to pay taxes or assessments due on the Leased Premises or the Improvements or failure to pay any other charge that may result in a lien on the Leased Premises or the Improvements, and Lessee’s failure to cure such default within twenty (20) days of delinquency, but in all events prior to the date upon which the holder of any such lien has the right to foreclose thereon; (e) A Transfer (other than a Permitted Transfer) occurs, either voluntarily or involuntarily, in violation of this Lease;

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42 (f) the subjection of any right or interest of Lessee in this Lease to attachment, execution, or other levy, or to seizure under legal process, if not released within ninety (90) days after imposed;
(g) Lessee shall have voluntarily suspended its business for a period in excess of thirty (30) days for reasons other than Force Majeure, or Lessee shall have been dissolved or terminated;
(h) Intentionally omitted.
(i) the appointment of a receiver, to take possession of Lessee’s Estate or of Lessee’s operations on the Leased Premises for any reason (not including receivership pursuant to a Leasehold Mortgage), if such receivership is not terminated dismissed or vacated within ninety (90) days after the appointment of the receiver; (j) pur
suant to or within the meaning of the United States Bankruptcy Code or any other federal or state law relating to insolvency or relief of debtors (“Bankruptcy Law”), Lessee or any general partner thereof (i) commences a voluntary case or proceeding; (ii) consents to the entry of an order for relief against Lessee or any general partner thereof in an involuntary case; [Intentionally Omitted](iii) consents to the appointment of a trustee, receiver, assignee, liquidator or similar official for Lessee or any general partner thereof or for the Leased Premises; (iv) makes an assignment for the benefit of its creditors; or (v) admits in writing its inability to pay its debts as they become due; provided however, with respect to Lessee’s general partner, the foregoing actions shall not constitute an Event of Default if the Investor promptly takes action to replace the general partner; (k) t
he filing against Lessee of any involuntary proceedings under such Bankruptcy Code or similar law (other than by a Lender), if such proceedings have not been vacated or stayed within ninety (90) days of filing;
(l) the appointment of a trustee or receiver for Lessee or for all or the major part of Lessee’s property or the Leased Premises, in any involuntary proceeding, or the taking of jurisdiction by any court over all or the major part of Lessee’s property or the Leased Premises in any involuntary proceeding for the reorganization, dissolution, liquidation or winding up of Lessee (in each case other than at the request of or direction of any Lender), if such trustee or receiver shall not be discharged or such jurisdiction relinquished or vacated or stayed on appeal or otherwise stayed within ninety (90) days of the appointment or the taking of jurisdiction;
(m) any of Lessee’s representations or warranties contained in this Lease or in any financial statement, certificate or report submitted to Lessor in connection with this Lease proves to have been incorrect in any material and adverse respect when made and continues to be materially adverse to Lessor beyond the expiration of the applicable cure period specified in paragraph (b) above.

Section 12.2 R
ights and Remedies.

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43 (a) At any time after the occurrence of an Event of Default hereunder, subject in all respects to the provisions of this Lease with respect to Lessor’s rights to cure defaults by Lessee and with respect to the rights of any Lenders, Lessor may, in addition to any other rights and remedies available at law or in equity, terminate this Lease by giving Lessee written notice thereof (with a copy of such notice to the Lenders), setting forth in such notice an effective date for termination which is not less than thirty (30) days after the date of such notice, in which event this Lease and Lessee’s Estate created hereby and all interest of Lessee and all parties claiming by, through or under Lessee shall automatically terminate upon the effective date for termination as set forth in such notice, with the same force and effect and to the same extent as if the effective date of such notice had been the date originally fixed in Article 2 hereof for the expiration of the Term. In such event, Lessor, its agents or representatives, and the Indemnitees shall have the right, without further demand or notice, to re-enter and take possession of the Leased Premises (including all buildings and other Improvements comprising any part thereof) at any time from and after the effective termination date without being deemed guilty of any manner of trespass and without prejudice to any remedies for arrears of Rent or existing breaches of covenants. The Lessor has the remedy described in California Civil Code Section 1951.4 (Lessor may continue lease in effect after Lessee’s breach and abandonment and recover rent as it becomes due, if Lessee has right to sublet or assign, subject only to reasonable limitations). (b) Upon the exercise of Lessor’s remedies pursuant to this Section 12.2, Lessee shall execute such releases, deeds and other instruments in recordable form as Lessor shall reasonably request in order to accurately set forth of record the then current status of Lessee’s Estate, Lessee’s rights hereunder, and of any Tenant Leases. (c) If Lessee shall have failed to cure a default by Lessee after expiration of the applicable time for cure of a particular default, Lessor, at its election, but without obligation therefor, and subject to the rights of Lenders, (i) may seek specific performance of any obligation of Lessee, after which Lessor shall retain, and may exercise and enforce, any and all rights that Lessor may have against Lessee as a result of such default, (ii) from time to time without releasing Lessee in whole or in part from the obligations to be performed by Lessee hereunder, may cure the default at Lessee’s cost, (iii) may terminate this Lease pursuant to subsection (a), (iv) subject to the rights of Lenders, may have a receiver appointed to take possession of Lessee’s interest in the Leasehold Estate with power in the receiver (a) to administer Lessee’s interest in the Leasehold Estate, (b) to collect all funds available in connection with the operation of the Project, and (c) to perform all other acts consistent with Lessee’s obligations under this Lease, as the court deems proper. and/or (v) may exercise any other remedy given hereunder or now or hereafter existing at law or in equity. Any reasonable cost incurred by Lessor in order to cure such a default by Lessee shall be due immediately from Lessee, together with interest, and may be offset against any amounts due from Lessor to Lessee. (d) R
emedies Cumulative . No remedy provided in this Section shall be considered exclusive of any other remedy, but the same shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity or by statute, and every power and remedy given by this Lease may be exercised from time to time and as often as occasion may arise or as may be deemed expedient, subject to any limitations referred to hereinabove.

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44 (e) N o Election of Remedies. The rights given in this Section to receive, collect or sue for any rent or rents, moneys or payments, or to enforce the terms, provisions and conditions of this Lease, or to prevent the breach or nonobservance thereof, or the exercise of any such right or of any other right or remedy hereunder or otherwise granted or arising, shall not in any way affect or impair or toll the right or power of Lessor upon the conditions and subject to the provisions in this Lease to terminate Lessee’s right of possession because of any default in or breach of any of the covenants, provisions or conditions of this Lease beyond the applicable cure period.
(f) Survival of Obligations.

Nothing herein shall be deemed to affect the
right of Lessor to indemnification for liability arising prior to the termination of the Lease for personal injuries or property damage or in connection with any other Claim, nor shall anything herein be deemed to affect the right of Lessor to equitable relief where such relief is appropriate.

No expiration or termination of this Lease by operation of law or otherwise, and no repossession of the Leased Premises or any part thereof, shall relieve Lessee of any of its obligations to indemnify and defend the Indemnitees pursuant to the provisions of this Lease, and all such provisions, and all of Lessee’s accrued liabilities and obligations hereunder, shall survive such expiration, termination or repossession.
(g) No Waiver. F
ailure to insist upon the strict performance of any term or conditions in this Agreement, no matter how long the failure continues, is not a waiver of the term or condition and does not bar the right to subsequently demand strict performance. To be effective, a waiver must be in writing and signed by the non-breaching party.

Section 12.3 Def
ault by Lessor.
(a) Events of Default. Lessor shall be in default of this Lease if it fails to perform any provision of this Lease that is obligated to perform within sixty (60) days after written notice of the default has been given to Lessor by Lessee. If the default cannot reasonably be cured within sixty (60) days, Lessor shall not be in default of this Lease if Lessor commences to cure the default within such 60-day period and diligently and in good faith continues to cure the default until completion.
(b) Right to Cure; Lessee’s R emedies. If Lessor shall have failed to cure a default by Lessor after expiration of the applicable time for cure of a particular default, Lessee, at its election, but without obligation therefor (i) may seek specific performance of any obligation of Lessor, after which Lessee shall retain, and may exercise and enforce, any and all rights that Lessee may have against Lessor as a result of such default, and/or (ii) from time to time without releasing Lessor in whole or in part from the obligation to be performed by Lessor hereunder, may cure the default at Lessor’s cost provided that Lessor has been given sixty (60) days advance written notice of Lessee’s election to do so and Lessor has not within such time notified Lessee that Lessor will cure the default.

Section 12.4 N
otices. Notices given by Lessor under Section 12.1 or by Lessee under Section 12.4 shall specify the alleged default and the applicable Lease provisions, and shall demand that Lessee or Lessor, as applicable, perform the appropriate provisions of this Lease within the applicable period of time for cure. No such notice shall be deemed a forfeiture or

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45 termination of this Lease unless expressly set forth in such notice. A notice by Lessor shall not be deemed ineffective if Lessor fails to provide the required time period to cure, so long as, any additional notice period required by this Lease, in addition to that already provided by Lessor, is thereafter provided by Lessor in writing.

ARTICLE 13.

QUIET ENJOYMENT AND POSSESSION; INSPECTIONS
Section 13.1 Quiet Enjoyment. Lessor covenants and warrants that Lessee, upon payment of all sums herein provided and upon performance and observance of all its covenants herein contained, shall peaceably and quietly have, hold, occupy, use and enjoy, and shall have the full, exclusive and unrestricted use and enjoyment of, all of the Leased Premises during the Term, subject only to the provisions of this Lease and all applicable Legal Requirements.

Section 13.2 Lesso
r’s Right of Inspection. Notwithstanding Section 13.1 above, Lessor, in person or through its agents, upon reasonable prior notice to Lessee, shall have the right, subject to the rights of Tenants, to enter upon the Leased Premises for purpose of reasonable inspections performed during reasonable business hours in order to assure compliance by Lessee with its obligations under this Lease or a Tenant Leases.

ARTICLE 14.

VACATION OF LEASED PREMISES
Section 14.1 Vacation Upon Termination. Lessee covenants that upon any termination of this Lease, whether by lapse of time or because of any of the conditions or provisions contained herein, Lessee will peaceably and quietly yield and surrender possession of the Leased Premises to Lessor. The foregoing, however, will be subject to the rights of Tenants or others in possession pursuant to Tenant Leases with Lessee, provided that such Tenants are not in default thereunder and attorn to Lessor as their lessor. An action of forcible detainer shall lie if Lessee holds over after a demand for possession is made by Lessor.

Section 14.2 Sur
render. Lessee agrees that on expiration or termination of the Term, Lessee shall surrender the Leased Premises, the Improvements, and any fixtures on the Leased Premises to Lessor, in good order, condition, and repair, reasonable wear and tear and obsolescence. The Improvements and any fixtures on the Leased Premises shall become the property of Lessor, free from any liens or Claims whatsoever, without any further compensation therefor from Lessor to Lessee or any other person. Contemporaneous with the expiration or termination of the Term, Lessee shall immediately deliver to the Lessor the following: (i) such documents, instruments, and conveyances as Lessor may request to enable Lessor’s ownership of the Improvements and fixtures on the Leased Premises to be reflected of record, including, without limitation, a quitclaim deed in recordable form; (ii) all construction plans, surveys, permits, and other documents relating to the Improvements and fixtures on the Leased Premises as may be in the possession of Lessee at the time; and (iii) copies of Tenant Leases for current and prior Tenants and any estoppels as reasonably requested by Lessor. All documents and instruments required to be delivered by Lessee to Lessor pursuant to this Section shall be in a form and contain content reasonably satisfactory to Lessor. Notwithstanding the above, Lessor

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46 may, in its sole discretion, reject ownership of the Improvements and fixtures and request either their removal from the Leased Premises or their transfer to another entity.

ARTICLE 15.

NON-MERGER
Section 15.1 Non-Merger. Except upon expiration of the Term or upon termination of this Lease, there shall be no merger of either this Lease or Lessee’s Estate created hereunder with Lessor’s fee interest in the Land or Lessee’s fee interest in the Improvements by reason of the fact that the same person may acquire, own or hold, directly or indirectly, (a) this Lease, Lessee’s Estate created hereunder or any interest in this Lease or the Improvements, and (b) a fee interest in the Land or the Improvements, unless and until the Lessor, all Lenders with an Approved Loan and all persons, including any assignee of Lessor, having an interest in (i) this Lease or Lessee’s Estate created hereunder, and (ii) the fee estate in the Leased Premises or any part thereof, shall join in a written instrument effecting such merger and shall duly record the same.

ARTICLE 16.

TRANSFERS
Section 16.1 Permitted Transfer by Lessee. Except as provided in this Article 16, Lessee shall have no right to Transfer, assign or sublease any legal or beneficial interest in Lessee’s Estate hereunder without Lessor’s prior written consent. In determining whether to consent to a proposed transfer, assignment, or sublease, the Lessor will consider whether the proposed transferee shall submit for Lessor review and approval all instruments and other legal documents proposed to affect any Transfer of all or any part of or interest in the Property, the Improvements or this Agreement together with such documentation of the proposed transferee’s qualifications and solvency, or any other documents, as the Lessor may reasonably request. The Lessor will consider:
(a) If th
e proposed transferee demonstrates to the Lessor’s satisfaction that it has the qualifications, experience and financial resources necessary and adequate as may be reasonably determined by the Lessor to competently complete and manage the Project and to otherwise fulfill the obligations undertaken by the Lessee under this Agreement in determining whether to consent to a proposed transfer, assignment or sublease under this Lease. (b) Notwithstanding the foregoing, by its execution of this Lease, Lessor is deemed to have consented to the following (“Permitted Transfers”) and the requirements of Section 16.1(a) shall not apply:
(1) Permitted Encumbrances, Approved Loans and Leasehold Mortgages;
(2) a conveyance of the leasehold interest in the Lessee’s Estate resulting from the foreclosure of a Leasehold Mortgage (or an assignment, new lease or deed-in- lieu of such a foreclosure) and the transfer by such person to a third party subject to the provisions of paragraph (8) of Section 8.2(a);

EXHIBIT C
634
47 (3) any transfer of equity in the Lessee that does not change management or operational control of Lessee or the Project other than to permit the admittance of an affiliate of Satellite Affordable Housing Associates Housing Corporation, a California nonprofit public benefit corporation, as the managing general partner of Lessee; (4) the lease of the residential units consistent with the Tax Credit Restrictive Covenant and the Regulatory Agreement;
(5) the transfer of limited partnership interests in Lessee; (6) in the event that any general partner of Lessee is removed by the Investor for cause following default under Lessee’s partnership agreement, the transfer of the general partner interest to Investor or an affiliate of the Investor or to a 501(c)(3) tax-exempt nonprofit corporation selected by the Investor and approved by Lessor, in its reasonable discretion, provided that the successor nonprofit corporation has experience, assets and access to capital and private funding sufficient to construct (if the Project has not been fully constructed) and operate the Project in accordance with this Lease; and (7) the transfer of the Project from Lessee to one of the members of the general partner of the Lessee or an affiliate of the general partners of the Lessee at the end of the tax credit compliance period for the Project.
(c) Upon the granting of any consent (deemed or otherwise) by Lessor with respect to a Transfer by Lessee, this Lease shall be binding upon and shall inure to the benefit of Lessor and Lessee and their respective heirs, successors, assigns, legal representatives, Lenders, Tenants and other transferees.

ARTICLE 17.

MISCELLANEOUS PROVISIONS
Section 17.1 Consents. Lessor agrees not to unreasonably withhold or delay its consent to matters requiring Lessor’s consent hereunder unless the applicable provision of this Lease permits Lessor to exercise Lessor’s sole discretion with respect to a particular matter.

Section 17.2 E nforced Delay; Extension of Times of Performance. Time is of the essence in the performance of each of the Parties’ respective obligations set forth in this Lease.

Except as expressly set forth in this Section 17.2, performance by any Party hereunder shall not be deemed to be in default and such Party shall be entitled to an extension of time to perform its obligations hereunder where delays in performance are due to causes beyond the reasonable control and without the fault of such Party, including as applicable: war; insurrection; strikes; lockouts; riots; floods; earthquakes; fires; casualties; acts of the public enemy; epidemics; quarantine restrictions; freight embargoes; lack of transportation; governmental restrictions or priority aside from that of Lessor; unusually severe weather; inability to secure necessary labor, materials or tools; delays of any contractor, subcontractor or supplies that are not caused by any Party; acts or the failure to act of any public or governmental agency or entity, aside from the Lessor, that are not caused by Lessee; or other causes beyond the reasonable control of the Party (“Force Majeure”). Notwithstanding the foregoing, Lessee’s inability to secure satisfactory

EXHIBIT C
635
48 financing, interest rates, and market and economic conditions shall not entitle Lessee to an extension of time to perform. An extension of time for any cause permitted under this Section

17.2 shall be limited to the period of the enforced delay, which period shall commence to run from the time of the commencement of the cause, if notice by the Party claiming such extension is sent to the other Party within thirty (30) days of knowledge of the commencement of the cause. If no written notice is sent within thirty (30) days, for purposes of measuring the extension period for performance of the obligation in question, the period of the enforced delay shall commence to run from the date written notice is sent to the other Party. Times of performance under this Lease may be extended by mutual written agreement of the Parties but in no event shall a period of enforced delay extend the Term of the Lease past its expiration, which is set forth in Section 2.2 of this Agreement. .

Section 17.3 In
terpretation. The terms of this Lease shall be construed in accordance with the meaning of the language used and shall not be construed for or against any Party by reason of the authorship of this Lease or any other rule of construction which might otherwise apply. The Section headings are for purposes of convenience only, and shall not be construed to limit or extend the meaning of this Lease.

Section 17.4 En
tire Agreement: Modifications. This Lease supersedes all prior discussions and agreements between the Parties with respect to the leasing of the Leased Premises. This Lease shall not be modified or amended in any respect, except by written instrument specifically referencing such modification or amendment which is executed by or on behalf of the Parties in the same manner as this Lease is executed and, to which each Lender has consented in writing (if required by the applicable Loan Documents). The Parties acknowledge and agree that pursuant to Section 2.3 of the DDLA, the DDLA is terminated with respect to the Leased Premises and Phase 1 as of the Commencement Date. The Parties agree that any deletion of language from this Lease before its mutual execution by Lessor and Lessee shall not be construed to have any particular meaning or to raise any presumption canon of construction, or implication, including, without limitation, any implication that the parties intended to state the converse, obverse, or opposite of the deleted language.

Section 17.5 Gove
rning Law. This Lease, and the rights and obligations of the Parties hereunder, shall be governed by and construed in accordance with the substantive laws of the State of California without regard to conflict of law principles. Venue for any dispute hereunder shall be in Alameda County, California.

Section 17.6 Bi
nding Effect. This Lease shall inure to the benefit of and be binding upon the Parties hereto, their successors, administrators, executors and permitted assigns.

Section 17.7 Se verability. In the event any provision or portion of this Lease is held by any court of competent jurisdiction to be invalid or unenforceable, such holdings shall not affect the remainder hereof, and the remaining provisions shall continue in full force and effect to the same extent as would have been the case had such invalid or unenforceable provision or portion never been a part hereof, except to the extent the rights and obligations of the parties have been materially altered by such unenforceability.

EXHIBIT C
636
49 Section 17.8 F urther Assurances. From and after the date of this Lease, Lessor and Lessee, at the request of the other Party, shall make, execute and deliver or obtain and deliver all such affidavits, deeds, certificates, resolutions and other instruments and documents, and shall do or cause to be done all such other things that either Party may reasonably require in order to effectuate the provisions and the intention of this Lease.

Section 17.9 Aut
hority to Execute Agreement . The persons executing this Lease on behalf of each Party represents and warrants to the other Party that by proper action such persons have been duly authorized to execute and deliver this Lease.

Section 17.10 Le
ase Administration and Approvals . The City Manager of the City of Livermore, or his or her designee shall be the person designated by Lessor to administer this Lease on behalf of Lessor. The City Manager of the City of Livermore shall have the authority to consent to any matter requiring Lessor approval or consent as provided in this Lease, and to perform and carry out any activities concerning this Lease, including but not limited to, the execution of any additional agreements, addenda or amendments so long as such actions do not substantially affect the rights and obligations of Lessor as specified herein.

Section 17.11 Ca
ptions. All captions, headings, paragraphs, subparagraphs, letters and other reference captions are solely for the purpose of facilitating convenient reference to this Lease, shall not supplement, limit or otherwise vary the text of this Lease in any respect, and shall be wholly disregarded when interpreting the meaning of any terms or provisions hereof.

All references to particular articles, sections, subsections, paragraphs and subparagraphs by number refer to the text of such items as so numbered in this Lease.

Section 17.12 Ge
nder. Words of any gender used in this Lease shall be held and construed to include any other gender, and words of a singular number shall be held to include the plural, and vice-versa, unless the context requires otherwise.

Section 17.13 Exhi
bits. Each and every exhibit referred to or otherwise mentioned in this Lease is attached to this Lease and is and shall be construed to be made a part of this Lease by such reference or other mention at each point at which such reference or other mention occurs, in the same manner and with the same effect as if each exhibit were set forth in full at length every time it is referred to and otherwise mentioned.

Section 17.14 Ref
erences. All references to paragraphs or subparagraphs shall be deemed to refer to the appropriate paragraph or subparagraph of this Lease. Unless otherwise specified in this Lease, the terms “herein,” “hereof,” “hereinafter,” “hereunder” and other terms of like similar import, shall be deemed to refer to this Lease as a whole, and not to any particular paragraph or subparagraph hereof.

Section 17.15 Cum
ulative. Except as expressly limited by the terms of this Lease, all rights, powers and privileges conferred hereunder shall be cumulative and not restrictive of those provided at law or in equity.

Section 17.16 No
tices. All notices, requests, demands, or other communications required or permitted to be given hereunder shall be in writing and shall be addressed and delivered by certified mail, return receipt requested; by reputable commercial delivery service; or by hand

EXHIBIT C
637
50 delivery by a reputable courier, to each Party at the addresses set forth below. Any such notice, request, demand or other communication shall be considered given or delivered, as the case may be, on the date shown on the delivery receipt as the date of delivery, the date delivery was refused or the date the item was returned as undeliverable. By giving prior written notice thereof, any Party, from time to time, may change its address for notices under this Lease.

To Lessor: City of Livermore
1052 South Livermore Avenue
Livermore, CA 94550
Attention: City Manager

To Lessee: Pac Avenue, L.P.
1835 Alcatraz Avenue
Berkeley, CA 94703
Attention: Eve Stewart, Senior Vice President of Real Estate Development

AND Interfaith Housing, Inc.
550 Hillcrest Avenue
Livermore, CA 94550
Attention: Laning Thompson, Board President

To Investor: NEF Assignment Corporation
10 South Riverside Plaza
Suite 1700
Chicago, Illinois 60606
Attention: General Counsel
Email: [email protected] with subject line of SMT #83146; 83452

With a copy to:

NEF Assignment Corporation
10 South Riverside Plaza
Suite 1700
Chicago, Illinois 60606
Attention: SVP Asset Management

EXHIBIT C
638
51 And:

Bocarsly Emden Cowan Esmail & Arndt LLP
633 W. Fifth Street, Suite 5880
Los Angeles, California 90017
Attention: Rachel Rosner, Esq.

Section 17.17 C ounterparts. This Lease may be executed in several counterparts, each of which shall be deemed an original, and all such counterparts together shall constitute one and the same agreement.

Section 17.18 Ti
me of Essence. Time is and shall be of the essence in this Lease.

Section 17.19 Attorneys’ Fees. In any litigation or other action brought by a Party to this Lease to enforce this Lease or regarding a dispute over terms of the Lease or the performance of a Party, the prevailing Party in such litigation or action shall be entitled to attorneys’ fees and the costs of such litigation.

Section 17.20 No
Third-Party Beneficiaries. Except as expressly set forth herein, nothing contained in this Lease is intended to or shall be deemed to confer upon any person, other than the Parties and their respective successors and assigns, any rights or remedies hereunder.

Section 17.21 Par
ties Not Co-Venturers; Independent Contractor; No Agency Relationship. Nothing in this Lease is intended to or shall establish the Parties as partners, co- venturers, or principal and agent with one another. The relationship of Lessee and Lessor is and shall remain solely that of a tenant and landlord, and shall not be construed as a joint venture, equity venture, partnership or any other relationship. Lessor neither undertakes nor assumes any responsibility or duty to Lessee (except as expressly provided in this Lease) or to any third party with respect to the Project.

Section 17.22 Holding Over .

If Lessee holds over at the Leased Premises after the
expiration of the Term with the consent of the Lessor, either express or implied, such holding over shall be construed to create only a tenancy from month-to-month subject to all the other terms in the Lease.

Section 17.23 End of Term Transfer of Improvements and Leasehold Estate. At the end of the Term, City may assume rights to the Leasehold Estate, including any Improvements or fixtures on the Leased Premises, or transfer the Leasehold Estate, Improvements and fixtures to another non-profit entity. Lessee shall provide the Improvements in as-is but generally the same condition minus ordinary wear and tear and shall provide estoppels and copies of leases with respect to the subtenants, including Tenant Leases.

EXHIBIT C
639
52 SIGNATURES ON FOLLOWING PAGE

EXHIBIT C
640

53 135.054/633016
IN WITNESS WHEREOF, this Lease is made and entered into in multiple original counterparts on the day and year first above written.

LESSOR:

City of Livermore, a California municipal corporation

By:

Marianna A. Burch, City Manager

APPROVED AS TO FORM:

By: ___________________________________

Jason Alcala
City Attorney

APPROVED AS TO INSURANCE:

By: __________________________________

Risk Manager/Analyst

EXHIBIT C
641
54 LESSEE:

Pac Avenue, L.P.,
a California limited partnership

By: Pac Avenue LLC,
a California limited liability company,
its general partner

By: Satellite Affordable Housing Associates,
a California nonprofit public benefit
corporation, a member and the manager

By: ____________________________
Eve Stewart,
Senior Vice President of Real Estate
Development

EXHIBIT C
642

A-1

EXHIBIT A

Legal Description of Leased Premises

EXHIBIT C
643
EXH
IBIT A
LEGA

L DESCRIPTION OF THE PROPERTY
ALL TH

AT REAL PROPERTY IN THE CITY OF LIVERMORE, COUNTY OF ALAMEDA, STATE OF CALIFORNIA, DESCRIBED AS FOLLOWS:

PA
RCEL 2, OF PARCEL MAP 10858, FILED NOVEMBER 27, 2024, IN BOOK 360 OF PARCEL MAPS, AT PAGES 87, 88, and 89.

APN:
a portion of 099-0950-008-02

EXHIBIT C
644

B-1

EXHIBIT B

Site Plan of Leased Premises
(Attached)

EXHIBIT C
645

EXHIBIT B

EXHIBIT C
646

C-1

EXHIBIT C

Form of Memorandum of Lease

EXHIBIT C
647
1 Exhibit C

Recording Requested by
and when Recorded, return to:

City of Livermore
1052 South Livermore Avenue
Livermore, CA 94550
Attention: City Manager

EXEMPT FROM RECORDING FEES PER
GOVERNMENT CODE §§6103, 27383

Space above this line for Recorder’s use.

APN 099-095000802 (portion only - parcel 2)

MEMORANDUM OF GROUND LEASE
(Pacific Avenue Senior Apartments – Phase 1)

THIS MEMORANDUM OF GROUND LEASE (the “Memorandum”) is entered into as of __________________, 2025, by and between the City of Livermore, a California municipal corporation (the “Lessor”) and Pac Avenue, L.P., a California limited partnership (the “Lessee”), with respect to that certain Ground Lease dated _____________, 2025 (the “Lease”), between the Lessor and the Lessee. All capitalized terms used in this Memorandum and not defined shall have the meaning set forth in the Lease.

1. Documentary Transfer Tax is not shown pursuant to Revenue and Taxation Code Section 11932. See that certain Statement of Documentary Transfer Tax Due, which shall be affixed to this Memorandum in the Official Records of Alameda County after record of this Memorandum is made and before the original is returned as specified in Government Code Section 27321.

2. Pursuant to the Lease, Lessor leases to Lessee and Lessee leases from Lessor that certain real property, more particularly described in Exhibit A, attached hereto and incorporated herein (the “Property”). The Lease shall commence on _______________, 2025, and shall remain in effect for the ninety-nine (99) year term of the Lease, unless sooner terminated pursuant to the terms and conditions of the Lease.

As more particularly set forth in the Lease, certain development, affordability and occupancy restrictions apply to the use of the Property.

1. This Memorandum shall incorporate herein all of the terms and provisions of the Lease as though fully set forth herein.

2. This Memorandum is solely for recording purposes and shall not be construed to alter, modify, amend or supplement the Lease, of which this is a memorandum. In the event of any inconsistency between the terms and conditions of this Memorandum and the terms and conditions of the Lease, the terms and conditions of the Lease shall control.

EXHIBIT C
648
2 3. This Memorandum may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts so executed shall together constitute but one and the same instrument.

[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]

EXHIBIT C
649
3 IN WITNESS WHEREOF, the parties have caused this Memorandum to be duly executed as of the date first above written.

LESSOR:

City of Livermore, a California municipal corporation

By: ______________________________________
Marianna A. Burch, City Manager

ATTEST:

By:

APPROVED AS TO FORM:

City Attorney

EXHIBIT C
650
4 LESSEE:

Pac Avenue, L.P.,
a California limited partnership

By: Pac Avenue LLC,
a California limited liability company,
its general partner

By: Satellite Affordable Housing Associates,
a California nonprofit public benefit
corporation, a member and the manager

By: ____________________________
Eve Stewart,
Senior Vice President of Real Estate
Development

[SIGNATURES MUST BE NOTARIZED]

EXHIBIT C
651
5 ACKNOWLEDGMENT

State of California )
) ss
County of ___________ )

On
, before me, _____________________________________,
(Name of Notary)

not
ary 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.

(Notary Signature)

SIGNATURES MUST BE NOTARIZED.

ACKNOWLEDGMENT

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.

EXHIBIT C
652
6 State of California
)
) ss

County of ___________ )

On
, before me, _____________________________________,
(Name of Notary)

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.

(Notary Signature)

SIGNATURES MUST BE NOTARIZED.

EXHIBIT C
653
7 Exhibit A

LAND
(To Be Inserted By Title)

EXHIBIT C
654

D-1

EXHIBIT D

Financing Plan

EXHIBIT C
655
Sources
Permanent Sources
Description Totals
Tax Credit Equity 23,821,439$
HCD NPLH 6,257,776$
FHLB AHP 1,000,000$
City of Livermore Loan 6,500,000$
City of Livermore Predevelopment Loan 657,000$
Alameda County A1 Bonds 6,234,012$
Accrued Interest on Soft Loans 359,090$
HUD Section 202 6,947,852$
GP Capital Contribution (HUD 202 Deposit) 10,000$
Total Sources 52,966,260$
Uses
Description Budgeted

ARCHITECTURAL FEES
Architecture 1,299,926$
ARCHITECTURAL FEES TOTAL 1,299,926$

SURVEY & ENGINEERING
Survey 960,000$
Enviro Assessment &Testing 60,000$
SURVEY & ENGINEERING TOTAL 1,020,000$
Description Budgeted

PERM FINANCING COSTS
Perm Title & Recording 25,000$
PERM FINANCING TOTAL 25,000$

OWNER LEGAL
Owner Legal - Org, RE, Synd & Perm Loan 90,000$
LEGAL TOTAL 90,000$

DEVELOPER COSTS
Developer Fee 2,200,000$
Construction Management 90,000$
DEVELOPER COSTS TOTAL 2,290,000$

SYNDICATION COSTS
Syndication Consultant 55,000$
Syndication Legal 85,000$
Accountant Fee 25,000$
TCAC Fees 116,300$
SYNDICATION COSTS TOTAL 281,300$
52,966,260$

EXHIBIT C
656
Unit Mix (Rent and Income Levels)
Bedrooms AMI Section 8
Total
Units
Gross
Rent
Utility
Allowance Net Rent
Proposed
Rent
Annual
Rental
Income
1 20% 16 584$ 97$ 487$ 487$ 93,504$ 1 30% 8 876$ 97$ 779$ 779$ 74,784$ 1 50% 14 1,460$ 97$ 1,363$ 779$ 130,872$ 1 50% Yes 5 1,460$ 97$ 1,363$ 1,363$ 81,780$ 1 50% 24 1,460$ 97$ 1,363$ 1,363$ 392,544$ 1 60% 9 1,752$ 97$ 1,655$ 1,655$ 178,740$ 2 30% 1 1,051$ 131$ 920$ 920$ 11,042$ 2 60% 1 2,102$ 131$ 1,971$ 1,971$ 23,657$ 2 MNGR 1 -$ 131$ -$ -$ -$ -$
-$
-$
-$
-$
-$
-$
-$
Avg AMI: 42.3% 5 79 986,923$

EXHIBIT C
657
Cash Flow
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15 Income
Rent 2.0% 818,652$ 835,025$ 851,726$ 868,760$ 886,135$ 903,858$ 921,935$ 940,374$ 959,181$ 978,365$ 997,932$ 1,017,891$ 1,038,249$ 1,059,014$ 1,080,194$ NPLH Rent 2.0% 76,320$ 77,846$ 79,403$ 80,991$ 82,611$ 84,263$ 85,949$ 87,668$ 89,421$ 91,209$ 93,034$ 94,894$ 96,792$ 98,728$ 100,703$ Section 8 Income 54,777$ 56,990$ 58,130$ 59,292$ 60,478$ 61,688$ 62,922$ 64,180$ 65,464$ 66,773$ 68,108$ 69,470$ 70,860$ 72,277$ 73,723$ HUD 202 PRAC Income 174,420$ 181,467$ 185,096$ 188,798$ 192,574$ 196,425$ 200,354$ 204,361$ 208,448$ 212,617$ 216,869$ 221,207$ 225,631$ 230,143$ 234,746$ Draw on NPLH COSR 2,662$ 12,848$ 223,465$ 231,200$ 232,789$ 232,789$ 232,789$ 232,789$ 232,789$ 232,789$ 232,789$ 232,789$ 232,789$ 232,789$ 232,789$ Draw on Supplemental NPLH Reserve 56,848$ 203,152$ -$ -$ -$ -$ -$ -$ -$ Draw on Operating Deficit Reserve 101,690$ -$ 3,768$ 1,819$ 34,929$ 52,395$ 70,623$ 89,641$ 109,479$ 130,165$ 151,729$ 174,204$ 197,623$ 222,017$ 247,423$ Laundry & Vending Income 2.0% 8,424$ 8,592$ 8,764$ 8,940$ 9,118$ 9,301$ 9,487$ 9,677$ 9,870$ 10,067$ 10,269$ 10,474$ 10,684$ 10,897$ 11,115$ POTENTIAL GROSS INCOME: 1,293,793$ 1,375,921$ 1,410,352$ 1,439,800$ 1,498,635$ 1,540,719$ 1,584,059$ 1,628,689$ 1,674, 652$ 1,721,986$ 1,770,730$ 1,820,929$ 1,872,628$ 1,925,865$ 1,980,693$ LIHTC Units Vacancy 5.0% (60,874)$ (64,904)$ (66,547)$ (67,940)$ (70,801)$ (72,823)$ (74,905)$ (77,051)$ (79,262)$ (81,539)$ (83,885)$ (86,302)$ (88,792)$ (91,357)$ (94,000)$ NPLH Units Vacancy 10.0% (7,632)$ (7,785)$ (7,940)$ (8,099)$ (8,261)$ (8,426)$ (8,595)$ (8,767)$ (8,942)$ ( 9,121)$ (9,303)$ (9,489)$ (9,679)$ (9,873)$ (10,070)$ EFFECTIVE GROSS INCOME: 1,225,287$ 1,303,233$ 1,335,864$ 1,363,760$ 1,419,573$ 1,459,470$ 1,500,558$ 1,542,871$ 1,586,449$ 1,631,326$ 1,677,542$ 1,725,138$ 1,774,157$ 1,824,635$ 1,876,623$ Expenses
Operating Expenses 3.0% 1,132,569$ 1,166,546$ 1,201,542$ 1,237,589$ 1,274,716$ 1,312,958$ 1,352,347$ 1,392,917$ 1,434,705$ 1,477,746$ 1,522,078$ 1,567,740$ 1,614,773$ 1,663,216$ 1,713,112$ Replacement Reserve Deposits 47,400$ 47,400$ 47,400$ 47,400$ 47,400$ 47,400$ 47,400$ 47,400$ 47,400$ 47,400$ 47,400$ 47,400$ 47,400$ 47,400$ 47,400$ TOTAL EXPENSES 1,179,969$ 1,213,946$ 1,248,942$ 1,284,989$ 1,322,116$ 1,360,358$ 1,399,747$ 1,440,317$ 1,482,105$ 1,525,146$ 1,569,478$ 1,615,140$ 1,662,173$ 1,710,616$ 1,760,512$ NET OPERATING INCOME 45,318$ 89,286$ 86,922$ 78,772$ 97,456$ 99,112$ 100,812$ 102,554$ 104,344$ 106,180$ 108,063$ 109,998$ 111,984$ 114,020$ 116,111$ Required Payments
NPLH Monitoring Fee 26,283$ 26,283$ 26,283$ 26,283$ 26,283$ 26,283$ 26,283$ 26,283$ 26,283$ 26,283$ 26,283$ 26,283$ 26,283$ 26,283$ 26,283$ 26,283$ County A1 Monitoring Fee 4,800$ 4,800$ 4,800$ 4,800$ 4,800$ 4,800$ 4,800$ 4,800$ 4,800$ 4,800$ 4,800$ 4,800$ 4,800$ 4,800$ 4,800$ 4,800$ City Monitoring Fee 2,662$ 2,662$ 2,715$ 2,770$ 2,825$ 2,881$ 2,939$ 2,998$ 3,058$ 3,119$ 3,181$ 3,245$ 3,310$ 3,376$ 3,444$ 3,512$ CASH FLOW: 11,574$ 55,489$ 53,070$ 44,864$ 63,492$ 65,090$ 66,731$ 68,414$ 70,143$ 71,916$ 73,736$ 75,605$ 77,525$ 79,493$ 81,516$ Investor Management Fee 1,250$ 5,000$ 5,000$ 5,000$ 5,000$ 5,000$ 5,000$ 5,000$ 5,000$ 5,000$ 5,000$ 5,000$ 5,000$ 5,000$ 5,000$ P
artnership Management Fee 8,972$ 35,887$ 35,887$ 35,887$ 35,887$ 35,887$ 35,887$ 35,887$ 35,887$ 35,887$ 35,887$ 35,887$ 35,887$ 35,887$ 35,887$ Residual Receipts to Soft Loans 100% 1,352$ 14,602$ 12,183$ 3,977$ 22,605$ 24,203$ 25,844$ 27,527$ 29,256$ 31,029$ 32,849$ 34,718$ 36,638$ 38,606$ 40,629$

EXHIBIT C
658

D-1

EXHIBIT E

Estoppel Certificate

EXHIBIT C
659

SMRH:4927-0975-6435.1 -1-
0100-922359

60173159.1
Exhibit E

GROUND LESSOR ESTOPPEL CERTIFICATE

This Ground Lessor Estoppel Certificate (this " Certificate"), dated as of [__________], 2025, is executed by the City of Livermore, a California municipal corporation ("Ground Lessor") in favor of FIRST- CITIZENS BANK & TRUST COMPANY , its successors, transferees and assigns ("Senior Lender"), and NEF ASSIGNMENT CORPORATION , an Illinois not -for-profit corporation, as nominee (“ Investor”).

Substantially concurrently with the delivery of this Certificate, Senior Lender has made or intends to make a loan in the initial approximate stated principal amount of $[__________] (the "Loan") to PAC AVENUE, L.P., a California limited partnership ("Tenant") pursuant to, among other things, a Loan Agreement (Construction Loan) by and between Tenant and Senior Lender (the " Loan Agreement "). Tenant's obligations with respect to the Loan are secured by (among other things) a Construction Leasehold Deed of Trust, with Assignment of Leases and Rents, Security Agreement, and Fixture Filing made by Tenant with respect to the Loan (the “ Senior Deed of Trust”), encumbering (among other things) Tenant's leasehold estate under the Ground Lease (as defined below) and a ll improvements now existing or hereafter made on or within the land leased to Tenant pursuant to the Ground Lease (the "Land"). As used herein, references to the Loan and the Loan Agreement shall also include all renewals, extensions, modifications, amendments and restatements thereof, including without limitation those that increase the principal amount or the interest rate thereof or extend the maturity date thereof. Substantially concurrently with the delivery of this Certificate, Pac Avenue LLC, a Ca lifornia limited liability company, as general partner, and Investor, as limited partner, will enter into that certain Amended and Restated Limited Partnership Agreement (as may be amended, the “ Partnership Agreement”), pursuant to and subject to the conditions thereof, among other things, Investor will make capital contributions to the Partnership in the approximate aggregate principal amount of $[_____] (the “ Investment”). Ground Lessor's delivery of this Certificate to Senior Lender and Investor is a condition to Senior Lender's making the Loan and Investor making the Investment. Ground Lessor acknowledges that (i) Senior Lender is a “Lender” and the "Senior Lender" as such terms are defined in the Ground Lease, and that the Senior Lender shall be entitled to all of the rights and privileges afforded to a Lender and the Senior Lender under the Ground Lease and (ii) the Senior Deed of Trust is a “Leasehold Mortgage” and the "Senior Leasehold Mortgage" as such terms are defined in the Ground Lease, and that the Senior Deed of Trust shall be entitled to all of the rights and privileges afforded to a Leasehold Mortgage and the Senior Leasehold Mortgage under the Ground Lease.

Ground Lessor further acknowledges that Investor is a “Investor” as such term is defined i n the Ground Lease, and that Investor shall be entitled to all of the rights and privileges afforded to an Investor under the Ground Lease.

NOW, THEREFORE, for the purpose of providing information to the Senior Lender and Investor with respect to the Ground Lease (as defined below), with the understanding that the Senior Lender and Investor will rely upon the information provided herein, the undersigned Ground Lessor certifies to the Senior Lender and Investor the truth and accuracy of the following statements of fact as of the date first stated above:

1. Ground Lessor is the current "Lessor" under the Ground Lease (as defined below). Ground Lessor has not assigned or otherwise transferred all or any part of Ground Lessor's interest in the Ground Lease.

2. The "Ground Lease" consists of the documents described in paragraph 2.1 below, which have not been amended, modified or supplemented except as described in paragraph 2.1 below.

2.1 Ground Lease.
(a) Ground Lease (Phase 1 of Pacific Avenue Development Project) dated as [____________], 2025, between Ground Lessor as lessor and Tenant as lessee.

EXHIBIT C
660

SMRH:4927-0975-6435.1 -2-
0100-922359

60173159.1
(b) Memorandum of Lease dated as of [____________], 202 5, between Ground Lessor as lessor and Tenant as lessee, recorded on [____________], 2025 as Document No. [____________] in the official public records of the County of Alameda, California (" Official Records").

3. A true, correct and complete copy of the Ground Lease (including all documents listed in paragraph 2.1 above) are attached hereto as Exhibit A.

4. Ground Lessor has not encumbered its fee interest in the Land covered by the Ground Lease with any mortgage or deed of trust.

5. Ground Lessor does not hold any security deposit or letter of credit for Tenant's performance under the Ground Lease, and no security deposit or letter of credit for Tenant's performance under the Ground Lease is currently required under the terms of the Ground Lease.

6. Ground Lessor is not a party to, and to Ground Lessor's actual knowledge there is no, pending or threatened condemnation, litigation, administrative or quasi-administrative action or proceeding at law or in equity that could adversely affect the Ground Lease or the Land.

7. All of the payments required to be made by Tenant to Ground Lessor under the Ground Lease through the date first stated above have been paid in full.

8. The notice address for Senior Lender is:

First-Citizens Bank & Trust Company
222 2nd Street, 17th Floor
San Francisco, CA 94105
Attention: Community Development Finance
The Notice address for City is:

City of Livermore
1052 South Livermore Avenue
Livermore, CA 94550
Attention: City Manager

The Notice address for Investor is:

NEF Assignment Corporation
10 South Riverside Plaza
Suite 1700
Chicago, Illinois 60606
Attention: General Counsel
Email: [email protected] with subject line of SMT #83146; 83452

and:

NEF Assignment Corporation
10 South Riverside Plaza
Suite 1700
Chicago, Illinois 60606
Attention: SVP Asset Management

with a copy to:

Bocarsly Emden Cowan Esmail & Arndt LLP

EXHIBIT C
661

SMRH:4927-0975-6435.1 -3-
0100-922359

60173159.1
633 W. Fifth Street, Suite 5880
Los Angeles, California 90017
Attention: Rachel Rosner

[Remainder of Page Left Intentionally Blank]

EXHIBIT C
662

SMRH:4927-0975-6435.1 S-1
0100-922359

60173159.1

IN WITNESS WHEREOF, Ground Lessor has executed this Certificate in favor of the Estoppel Parties as of the date first stated above.

“GROUND LESSOR”:

CITY OF LIVERMORE,
a California municipal corporation
By: _____________________________
Marianna A. Burch, City Manager

EXHIBIT C
663

SMRH:4927-0975-6435.1 Exhibit A
0100-922359

60173159.1

Exhibit A

Copy of Ground Lease Documents

[Attached]

EXHIBIT C
664

D-1

EXHIBIT F

Addendum Section 202

EXHIBIT C
665

F-1
Ver.2 7-19-12
921\33\3928482.3
Exhibit F
LEASE ADDENDUM SECTION 202
(Lessor – Lessee)
Notwithstanding any other provisions of the Ground Lease (this "Lease"), between the City of Livermore, a California municipal corporation ("Lessor"), and Pac Avenue, L.P., a California limited partnership ("Lessee"), if and so long as the Leasehold Estate is subject to a Section 202 Deed of Trust held by the Secretary of Housing and Urban Development ("HUD"), or given to the Secretary of HUD in connection with a resale, or the demised premises are acquired and held by him because of a default under said mortgage:
(1) Lessee is authorized to obtain a Section 202 Capital Advance from the Secretary of HUD, secured by a mortgage on the Leasehold Estate. Lessee is further authorized to execute a mortgage on the Leasehold Estate and otherwise to comply with the requirements of HUD for obtaining a mortgage.
(2) Intentionally omitted.
(3) If approved by the Secretary of HUD, Lessee may assign, transfer or sell its interest in the demised premises.
(4) Insurance.
(a) Insurance policies shall be in an amount, and by such companies, and in such form, and against such risks and hazards, as shall be required by any Lender and/or the Secretary of HUD.
(b) Lessor shall not take out separate insurance concurrent in form or contributing in the event of loss with that specifically required to be furnished by Lessee to HUD. Lessor may at its own expense, however, take out separate insurance which is not concurrent in form or not contributing in the event of loss with that specifically required to be furnished by Lessee.
(5) Condemnation.
(a) If all or any part of the demised premises shall be taken by condemnation, that portion of any award attributable to the improvements, or damage to the improvements, shall be paid to the mortgagee or otherwise disposed of as may be provided in the mortgage. Any portion of the award attributable solely to the taking of the land shall be paid to Lessor. After the date of taking, the annual ground rent shall be reduced ratably by the proportion which the award paid to Lessor bears to the total value of the land as established by the amount the Secretary of HUD would be required to pay upon acquisition of the fee. (b) In the event of a negotiated sale of all of any portion of the demised premises in lieu of condemnation, the proceeds shall be distributed and ground rents reduced as provided in cases of condemnation, but the approval of the Secretary of HUD shall be required as to the amount and division of the payment to be received.

EXHIBIT C
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F-2
Ver.2 7-19-12
921\33\3928482.3
(6) Lessor agrees that, within ten (10) calendar days after receipt of written request from Lessee, it will join in any authorizations required by any governmental or other body claiming jurisdiction in connection with any work which Lessee may do hereunder, and will also join in any grants for easements for electric, telephone, gas, water, sewer and such other public utilities and facilities as may be reasonable necessary in the operating of the demised premises or of any improvements that may be erected thereon.
(7) Nothing contained in this Lease shall require Lessee to pay any franchise, estate, inheritance, succession, capital levy or transfer tax, or any other tax, assessment, change or levy upon the rent payable by Lessee under this Lease.
(8) Upon any default under this Lease which authorized the cancellation thereof by Lessor, Lessor shall give notice to the Secretary of HUD, and the Secretary of HUD, his successors and assigns, shall have the right and time within six (6) months from the date of such notice to correct the default and reinstate this Lease unless Lessor has first terminated this Lease as provided herein.

At any time after two (2) months from the date a notice of default is given to the Secretary of HUD, Lessor may elect to terminate this Lease and acquire possession of the demised premises. Upon acquiring possession of the demised premises, Lessor shall notify the Secretary of HUD. The Secretary of HUD shall have six (6) months from the date of such notice of acquisition to elect to take a new lease on the demised premises. Such new lease shall have a term equal to the unexpired portion of the term of this Lease and shall be on the same terms and conditions as contained in this Lease, except that the Secretary of HUD's liability for ground rent shall not extend beyond his occupancy under such lease. Lessor shall tender such new lease to the Secretary of HUD within thirty (30) calendar days after a request for such lease and shall deliver possession of the demised premises immediately upon execution of the new lease. Upon executing a new lease, the Secretary of HUD shall pay to Lessor any unpaid ground rentals due or that would have become due under this Lease to the date of execution of the new lease, including any taxes which were liens on demised premises and which were paid by Lessor, less any net rentals or other income which Lessor may have received on account of this property since the date of default under this Lease.
(9) All notices, demands and requests which are required to be given by Lessor, Lessee or the Secretary of HUD shall be in writing and shall be sent by registered or certified mail, postage prepaid, and addressed to:

U.S. Department of Housing and Urban Development
One Sansome Street, Suite 1200
San Francisco, California 94104
Attention: Office of Regional Counsel
unless a request for a change in this address has been sent the party giving the notice by registered or certified mail prior to the time when such notice is given. (10) This Lease shall not be modified without the consent of the Secretary of HUD.

The remainder of this page is blank.

EXHIBIT C
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D-1

EXHIBIT G

Schedule of Related Documents

EXHIBIT C
668

EXHIBIT G
Schedule of Related Documents

1) Phase 1 Environmental Site Assessment dated June 2021, prepared by Geocon Consultants; Location of Record: City of Livermore
2) Affordable Housing Loan Agreement by and between the City of Livermore and Pac Avenue, L.P for Pacific Senior Apartments Phase 1, entered into after this lease agreement. Location of Record: City of Livermore.
3) The Deed of Trust with Assignment of Rents, Regulatory Agreement for Capital Advance Mixed Finance Program, the Capital Advance Mixed-Finance Program Use Agreement and the UCC Financing Statement by and between the U.S. Department of Housing and Urban Development and Pac Avenue L.P ., collectively, the “HUD 202 Loan Documents”, entered into after this lease agreement. Location of Record: City of Livermore
4) Loan Agreement (Construction Loan) by and between First Citizens Bank and Trust Company and Pac Avenue, L.P . along with the Promissory Note secured by the Construction Deed of Trust, with Assignment of Leases and Rents, Security Agreement, and Fixture Filing entered into after this lease agreement, collectively, “Senior Loan Documents”. Location of Record: City of Livermore. 5) Site Plan Design Review (SPDR) 20-005 and Subdivision (SUB) 20-001 for the Pacific Avenue Affordable Housing Project consisting of 140 affordable senior housing rental units, approved by the Livermore Planning Commission on November 16, 2021

EXHIBIT C
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1 535\105\3907464.1

RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:

Alameda County
Housing and Community Development Department
224 W. Winton Avenue, Room 108
Hayward, CA 94544
Attention: Housing Director
N
o fee for recording pursuant to
Government Code Section 27383 and 27388.1
(SPACE ABOVE THIS LINE FOR RECORDER'S USE)
S

UBORDINATION AGREEMENT
(City - County – Pacific Avenue Senior)
NO
TICE: THIS SUBORDINATION AGREEMENT RESULTS IN YOUR SECURITY

INTEREST IN AND RESTRICTIVE COVENANTS AFFECTING THE

PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY

THAN THE LIEN OF SOME OTHER OR LATER SECURITY
INSTRUMENT AND RESTRICTIVE COVENANTS.

T
HIS SUBORDINATION AGREEMENT (the "Agreement") is made as of [March 1, 2025], by Pac Avenue, L.P., a California limited partnership ("Borrower"), the County of Alameda, a political subdivision of the State of California (the "County"), and the City of Livermore, a California municipal corporation (the "City").

ECITALS
A. Borrower is constructing a seventy-nine (79) unit housing development, including one (1) manager's unit (the "Improvements"), on certain real property located in the City of Livermore, County of Alameda, State of California as more particularly described in Exhibit A (the "Property"). The Improvements and the Property are collectively referred to as the "Development."
B. B
orrower and the County entered into that certain County Development Loan Agreement (the "County Loan Agreement") dated [March 1, 2025], pursuant to which the County agreed to provide a loan to Borrower in the amount of Six Million Two Hundred Thirty- Four Thousand and Twelve Dollars ($6,234,012) (the "County Loan"). The County Loan will be used to partially finance Borrower's Development.

C. T
he County Loan is evidenced by a Promissory Note in the amount of the County Loan (the "County Note") dated as of [March 1, 2025], and secured by a Leasehold Deed of Trust with Assignment of Rents, Security Agreement, and Fixture Filing dated as of [March 1, 2025], naming Borrower as trustor, the County as beneficiary, and Old Republic Title Company

EXHIBIT D
670
2 535\105\3907464.1
as trustee (the "County Deed of Trust"). In connection with the County Loan, the County and Borrower also executed a Regulatory Agreement and Declaration of Restrictive Covenants (the "County Regulatory Agreement") dated as of [March 1, 2025]. The County Deed of Trust and the County Regulatory Agreement will be recorded against the Property in the Official Records of Alameda County ("Official Records") concurrently herewith. Collectively, the County Loan Agreement, the County Deed of Trust, the County Note, and the County Regulatory Agreement shall be referred to as the "County Loan Documents."

D. Pursuant to an Affordable Housing Loan Agreement, dated as of [March 1, 2025], between the City and Borrower (the "City Loan Agreement"), the City is making a loan to Borrower to partially finance construction of the Development in the total amount of Seven Million One Hundred Fifty-Seven Thousand Dollars ($7,157,000) (the "City Loan"). The City Loan is evidenced by a Promissory Note (Pacific Avenue Senior Predevelopment Loan), in the amount of Six Hundred Fifty Seven Thousand Dollars ($657,000) (the "Predevelopment Note") and a Promissory Note (Pacific Senior Phase 1 Development Loan Secured by a Leasehold Deed of Trust) in an amount of Six Million Five Hundred Thousand Dollars ($6,500,000) (the "Development Note") (collectively, the Predevelopment Note and the Development Note are referred to as the "City Note") in the amount of the City Loan dated as of [March 1, 2025], and secured by a Leasehold Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing (the "City Deed of Trust") dated as of [March 1, 2025], naming Borrower as trustor, the City as beneficiary, and Old Republic Title Company as trustee, to be recorded against the Property in the Official Records concurrently herewith. In connection with the City Loan, the City and Borrower also executed an Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants (the "City Regulatory Agreement") dated as of [March 1, 2025], to be recorded against the Property in the Official Records currently herewith. The City Note, the City Deed of Trust, the City Loan Agreement, and the City Regulatory Agreement shall be referred to herein, collectively, as the "City Loan Documents."

E. Borrower, the City, and the County hereby acknowledge and agree that the documents referenced herein shall be recorded in the Official Records in the following order:

1. County Regulatory Agreement

2. City Regulatory Agreement

3. City Deed of Trust

4. County Deed of Trust

F. As a condition to funding the County Loan, the County requires that the City and Borrower execute and deliver this Agreement, and that the City provide the County notice of defaults and the right to cure defaults under the City Loan Documents.

G. As a condition to funding the City Loan, the City requires that the County and Borrower execute and deliver this Agreement, and that the County provide the City notice of defaults and the right to cure defaults under the County Loan Documents.

NOW THEREFORE, for valuable consideration the parties agree as follows:

EXHIBIT D
671
3 535\105\3907464.1

1. Borrower and the City each acknowledge and agree for the benefit of the County that the County Regulatory Agreement, and any modifications, renewals, or extensions thereof approved in writing by the City, shall unconditionally be and at all times remain a lien or charge on the Property prior and superior to the rights of the City under the City Deed of Trust and the City Regulatory Agreement. The City intentionally and unconditionally subordinates all of the City's right, title and interest in and to the City Deed of Trust and the City Regulatory Agreement to the lien or charge of the County Regulatory Agreement.

2. Borrower and the County each acknowledge and agree for the benefit of the City that the City Regulatory Agreement and City Deed of Trust, and any modifications, renewals, or extensions thereof approved in writing by the County, shall unconditionally be and at all times remain a lien or charge on the Property prior and superior to the rights of the County under the County Deed of Trust. The County intentionally and unconditionally subordinates all of the County's right, title and interest in and to the County Deed of Trust to the lien or charge of the City Regulatory Agreement and the City Deed of Trust.

3. The County agrees that, upon the occurrence of an event of default under the County Loan Documents, the County shall:

(a) concurrently with notifying Borrower of the occurrence of an event of default, notify the City of the occurrence of such event of default by delivering a notice to the City at its address set forth in the City Loan Agreement;

(b) permit the City to cure or correct (provided that such event of default is curable) any such event of default within ninety (90) calendar days after receipt of such notice;

(c) accept all payments and all acts done by the City on behalf of Borrower within the cure period specified in Paragraph 3(b) above as though the same had been timely done and performed by Borrower, so that such acts and payments shall fully and totally cure and correct all such defaults, breaches, failures or refusals for all purposes; and

(d) have the continuing right to record a notice of default, obtain a court appointed receiver and otherwise exercise the County's rights and remedies under the County Loan Documents during the above-mentioned cure period.

4. The City agrees that, upon the occurrence of an event of default under the City Loan Documents, the City shall:

(a) concurrently with notifying Borrower of the occurrence of an event of default, notify the County of the occurrence of such event of default by delivering a notice to the County, at its address set forth in the County Loan Agreement;

(b) permit the County to cure or correct (provided that such event of default is curable) any such event of default within ninety (90) calendar days after receipt of such notice;

EXHIBIT D
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4 535\105\3907464.1
(c) accept all payments and all acts done by the County on behalf of Borrower within the cure period specified in Paragraph 4(b) above as though the same had been timely done and performed by Borrower, so that such acts and payments shall fully and totally cure and correct all such defaults, breaches, failures or refusals for all purposes; and

(d) have the continuing right to record a notice of default, obtain a court appointed receiver and otherwise exercise the City's rights and remedies under the City Loan Documents during the above-mentioned cure period.

5. The parties hereto agree to cooperate with each other and perform any acts and execute, acknowledge and deliver any additional agreements, documents, or instruments that may be reasonably necessary or desirable to carry out the provisions or to effectuate the purpose of this Agreement.

6. If, subject to the terms of Section 4 above, prior to any foreclosure sale of the Development under the City Deed of Trust, the County takes title to or possession of the Development pursuant to a foreclosure sale of the Development under the County Deed of Trust and cures the outstanding defaults under the City Loan, if any, the City hereby agrees not to exercise any rights it may have to accelerate the City Loan by reason of the transfer of title or possession to the County, or if acceleration has already occurred, the City hereby agrees that it will reinstate the City Loan, as applicable, at that time, and agrees that it will recognize the County as borrower under the City Loan under the same terms and conditions of said City Loan, provided that: (i) the County expressly assumes all of Borrower's obligations under the City Loan Documents, and (ii) the County provides the City with evidence reasonably satisfactory to the City that the County has authority to assume all of Borrower's obligations under the City Loan Documents.

7. If the County takes title to the Development pursuant to a foreclosure sale of the Development under the County Deed of Trust and cures the outstanding defaults under the City Loan Documents, if any, the County shall have the right to transfer the Development to another nonprofit housing developer reasonably approved in advance in writing by the City. In connection with any such transfer approved by the City, the City agrees that such transfer shall not constitute a default under the City Loan Documents, and the City shall not exercise any rights it may have to accelerate the City Loan as a result of such transfer, provided such transferee expressly assumes the obligations of Borrower under the City Loan Documents.

8. This Agreement represents the entire agreement among the parties on the subject matter hereof, and except as expressly provided herein, shall not be affected by reference to any other documents. Neither this Agreement nor any provision hereof may be changed, waived, discharged, or terminated orally, but such may be accomplished only by an instrument in writing signed by the party against whom enforcement of the change, waiver, discharge, or termination is sought.

9. If any of the provisions or terms of this Agreement shall for any reason be held invalid or unenforceable, such invalidity or unenforceability shall not affect any other of the

EXHIBIT D
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5 535\105\3907464.1
terms hereof, and this Agreement shall be construed as if such unenforceable term had never been contained herein.

10. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute and be construed as one and the same instrument.

Exhibit A is attached hereto and incorporated herein by this reference.

NOTICE: THIS SUBORDINATION AGREEMENT CONTAINS A PROVISION

WHICH ALLOWS THE PERSON OBLIGATED ON YOUR REAL PROPERTY

SECURITY TO OBTAIN A LOAN, A PORTION OF WHICH MAY BE EXPENDED FOR OTHER PURPOSES THAN IMPROVEMENT OF THE LAND.

IT IS RECOMMENDED THAT, PRIOR TO THE EXECUTION OF THIS

AGREEMENT, THE PARTIES CONSULT WITH THEIR ATTORNEYS WITH RESPECT HERETO.

[SIGNATURES ON FOLLOWING PAGES]

EXHIBIT D
674
S-1
City-County Subordination Agreement

535\105\3907464.1
IN WITNESS WHEREOF, the parties have entered into this Agreement, as of the date first written above.

BORROWER:

PAC AVENUE, L.P.,
a California limited partnership

By: Pac Avenue LLC,
a California limited liability company,
its general partner

By: Satellite Affordable Housing Associates,
a California nonprofit public benefit corporation, its
sole member and manager

By: _________________________________
Eve Stewart,
Senior Vice President of Real Estate

COUNTY:

COUNTY OF ALAMEDA,
a political subdivision of the State of California

By: _____________________________________
Michelle Starratt, Director
Housing and Community Development Department

[SIGNATURES CONTINUE ON FOLLOWING PAGE]

EXHIBIT D
675
S-2
City-County Subordination Agreement
535\105\3907464.1
CITY:

CITY OF LIVERMORE, a California municipal corporation
By: _______________________________________
Marianna A. Burch, City Manager

APPROVED AS TO FORM:

By: _______________________

Name: _______________________

Title: Deputy/Assistant/Senior Assistant/
City Attorney

[SIGNATURES MUST BE NOTARIZED]

EXHIBIT D
676

535\105\3907464.1

STATE OF CALIFORNIA )
)
COUNTY OF __________________ )

On ____________________, before me, ___________________________, 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.

______________________________________
Name: ______________________________
Notary Public
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.

EXHIBIT D
677

535\105\3907464.1

STATE OF CALIFORNIA )
)
COUNTY OF __________________ )

I certify UNDER PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

EXHIBIT D
678

535\105\3907464.1

STATE OF CALIFORNIA )
)
COUNTY OF __________________ )

I certify UNDER PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

EXHIBIT D
679

A-1
535\105\3907464.1

EXHIBIT A

LEGAL DESCRIPTION OF THE PROPERTY

ALL THAT REAL PROPERTY IN THE CITY OF LIVERMORE, COUNTY OF ALAMEDA, STATE OF CALIFORNIA, DESCRIBED AS FOLLOWS:

PARCEL 2, OF PARCEL MAP 10858, FILED NOVEMBER 27, 2024, IN BOOK 360 OF PARCEL MAPS, AT PAGES 87, 88, and 89.

APN: 099-0950-008-02

EXHIBIT D
680
SMRH:4937-7778-8178.4 -1-
022625 21CT-403085

RECORDING REQUESTED BY
AND WHEN RECORDED RETURN TO:

First-Citizens Bank & Trust Company
222 2nd Street, 17th Floor
San Francisco, California 94105
Attention: Community Development Finance
APN: a portion of 099-0950-008-02
(SPACE ABOVE THIS LINE FOR RECORDER’S USE)

SUBORDINATION AGREEMENT
(CITY LOAN)
THIS SUBORDINATION AGREEMENT (this “Agreement”) is dated as of March __, 2025 by and among (i) PAC AVENUE, L.P., a California limited partnership (the “Borrower”), (ii) CITY OF LIVERMORE, a California municipal corporation (the “Subordinate Lender”); and (iii) FIRST-CITIZENS BANK & TRUST COMPANY (the “Senior Lender”).

Recitals
A. Borrower is the owner of a leasehold interest in certain real property located in the City of Livermore, County of Alameda, California and described in Exhibit A attached to this Agreement (the “Property”).

B. Pursuant to that certain Loan Agreement (Cons truction Loan) dated as of March __, 2025 (the “First Mortgage Loan Agreement”) by and between the Senior Lender and the Borrower, the Senior Lender has agreed to make a mortgage loan (collectively, the “First Mortgage Loan”) to Borrower in the aggregate principal amount of [$30,605,014.00] to financ e, in part the construction of the improvements
on the Property. The First Mortgage Loan is or will be s ecured by a first mortgage lien (the “First Mortgage”) on the Property ex ecuted by Borrower for the benefit of t he Senior Lender. The Borro wer’s obligation to repay the First Mortgage Loan is evidenced by a Promissory Note Secured by Deed of Trus t (Construction Loan) in the aggregate principal amount of [$30,605,014.00] (the “First Mortgage Note”).

The First Mortgage Loan Agreement, the First Mortgage Note, the First Mortgage and all other documents executed in connection with the First Mortgage Loan are herein referred to collectively, the “First Mortgage Loan Documents”).

C. Subordinate Lender h as made a loan to Borrower in the principal amount of up to $7,157,000.00 (“Subordinate Loan”) pursuant to an Affordable Housing Loan Agreement dated as of __________, 2025 (“Subordinate Loan Agreement ”). The Subordi nate Loan is evidenced by (i ) that certain Promissory Note dated as of __________, 2025 in the original principal amount of $657,000.00 made by Borrower to the order of Subordinate Lender (the “Predevelopment Loan Note”); and (ii) that certain Promissory Note Secured by Deed of Trust, Assignment of Rent s and Fixture Filing dated as of ___________, 2025 in the original principal amount of $6,500,00 0.00 made by Borrower to the order of Subordinate Lender (the “Development Loan Note ” and together with the Predevelopm ent Loan Note, collectively, t he “Subordinate Note ”). The Subordinate Loan evidenced by the Subordinate Note is secured by that ce rtain Leasehold Deed of Trust, Assi gnment of Rents, Security Agreement and Fixture Filing dated as of __________, 2025, made by Borro wer for the benefit of Subordinate Lender and to be recorded concurrently herewith on the Prope rty (the “Subordinate Mortgage”). In connection with the Subordinate Loan, Borrower has also executed the City Restrictions (d efined below ) which will be

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recorded concurrently herewith on the Property. The City Restrictions shall be senior in priority to the First Mortgage Loan Documents.

D. The Senior Lender has agreed to permit the Subordinate Lender to make the Subordinate Loan and to place subordinate mortgage liens against the Property subject to all of the conditions contained in this Agreement.

NOW, THEREFORE, in order to induce the Senior Lender to permit the Subordinate Lender to make the Subordinate Loan to the Borrower and to place a subordinate mortgage lien against the Property, and in consideration thereof, the Senior Lender, the Subordinate Lender and the Borrower agree as follows:

1. Definitions.

In addition to the terms defined in the Recitals to this Agreement, for purposes of this Agreement the following terms have the respective meanings set forth below:
“Affiliate” means, when used with respect to a Person, any corporation, partnership, joint venture, limited liability company, limited liability partnership, trust or individual controlled by, under common control with, or which controls such Person (the term “control” for these purposes shall mean the ability, whether by the ownership of shares or other equity interests, by contract or otherwise, to elect a majority of the directors of a corporation, to make management decisions on behalf of, or independently to select the managing partner of, a partnership, or otherwise to have the power independently to remove and then select a majority of those individuals exercising manage rial authority over an entity, and control shall be conclusively presumed in the case of the ownership of 50% or more of the equity interests). “Borrower” means the Person named as such in the first paragraph of this Agreement and any other Person (other than the Senior Lender) who acquires title to the Property after the date of this Agreement. “Business Day ” means any day other than Saturday, Sunday or a day on which the Senior Lender is not open for business.
“City Restrictions” means that certain Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants dated as of _________, 2025, made by Borrower in favor of Subordinate Lender, to be recorded in the Official Records of Alameda County, California concurrently herewith. “ Default Notice” means: (a) a copy of the written notice from the Senior Lender to the Borrower stating that a First Mortgage Loan De fault has occurred under the First Mortgage Loan; or (b) a copy of the written notice from the Subordinate Lender to the Borrower stating that a Subordinate Loan Default has occurred under the Subordinate Loan. Each Default Notice shall specify the default upon which such Default Notice is based.
“First Mortgage Loan Default ” means the occurrence of an “Event of Default” as that term is defined in the First Mortgage Loan Documents.
“First Mortgage Loan Documents” means the First Mortgage Loan Agreement, the First Mortgage Note, the First Mortgage, and all other documents evidencing, securing or otherwise executed and delivered in connection with the First Mortgage Loan.
“Person” means an individual, estate, trust, partnership, corporation, limited liability company, limited liability partnership, governmental department or agency or any other entity which has the legal capacity to own property.
“Senior Lender” means the Person named as such in the first paragraph of this Agreement. When any other Person becomes the legal holder of the First Mortgage Note, such other Person shall automatically become the Senior Lender.

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“Subordinate Lender” has the meaning set forth in the first paragraph of this Agreement. “Subordinate Loan” has the meaning set forth in Recital C of this Agreement. “Subordinate Loan Default” means a default by the Borrower in performing or observing any of the terms, covenants or conditions in the Subordinate Loan Documents to be performed or observed by it, which continues beyond any applicable period provided in the Subordinate Loan Documents for curing the default.
“Subordinate Loan Documents” means the Subordinate Loan Agreement, the Subordinate Note, the Subordinate Mortgage, and all other documents evidencing, securing or otherwise executed and delivered in connection with the Subordinate Loan.

2. Permission to Place Mortgage Lien Against Property.

The
Senior Lender agrees, notwithstanding the prohibition against inferior liens on the Property contained in the First Mortgage Loan Documents and subject to the provisions of this Agreement, to permit the Subordinate Lender to record the Subordinate Mortgage and other recordable Subordinate Loan Documents against the Property (which are subordinate with respect to payment and lien priority to the lien of the First Mortgage except for the City Restrictions which are senior in priority) to secure the Borrower’s obligation to repay the Subordinate Note and all other obligations, indebtedness and liabilities of the Borrower to the Subordinate Lender under and in connection with the Subordinate Loan. Such permission is subject to the condition that each of the representations and warranties made by the Borrower and the Subordinate Lender in Section 4 is true and correct on the date of this Agreement and on the date on which the proceeds of the Subordinate Loan are disbursed to the Borrower. If any of the representations and warranties made by the Borrower and the Subordinate Lender in Section 4 is not true and correct on both of those dates, the provisions of the First Mortgage Loan Documents applicable to unpermitted liens on the Property shall apply.

3. Li
en Priority.

Each
of Senior Lender and the Subordinate Lender agree that the Subordinate Loan Documents and City Restrictions are unconditionally and will remain at all times, liens, claims, or charges on the Property in the following priority order:
(a)
The City Restrictions;
(b)
The First Mortgage and First Mortgage Loan Documents; and (c)
The Subordinate Mortgage and Subordinate Loan Documents (except for the City Restric
tions).

4. Borrower’s and Subordinate Lender’s Representations and Warranties.

The
Borrower and the Subordinate Lender each makes the following representations and warranties to the Senior Lender as indicated below:
(a) Reserved.
(b) Relat
ionship of Borrower to Subordinate Lender and Senior Lender. The Subord
inate Lender represents it is not an Affilia te of the Borrower. The Subordinate Lender represents it is not in possession of any facts which would lead it to believe that the Senior Lender is an Affiliate of the Borrower.

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(c) Term. The Subordinate Lender understands the term of the First Mortgage Note is a thirty (30) month construction term (with two possible ninety-day extensions). Based on this information, the Subordinate Lender represents that the term of the Subordinate Note does not end before the term of the First Mortgage Note.
(d) Subordinate Loan Documents and City Restrictions. The Subordinate Lender represents that the executed Subordinate Loan Documents and City Restrictions are substantially in the same forms as those submitted to the Senior Lender for approval prior to the recording of this Agreement. Upon execution and delivery of the Subordinate Loan Documents and City Restrictions, Borrower represents and warrants that it shall promptly provide to Senior Lender a true, complete and correct executed copy of each of the Subordinate Loan Documents and City Restrictions. (e) First Mortgage Loan Documents. The Borrower represents that executed First Mortgage Loan Documents are substantially in the same forms as those submitted to the Borrower and Subordinate Lender for approval prior to the recording of this Agreement. Upon execution and delivery of the First Mortgage Loan Documents, Borrower represents and warrants that it shall promptly provide to Subordinate Lender a true, complete and correct executed copy of each of the First Mortgage Documents.

5. Terms of Subordination.
(a) Agreement to Subordinate. The Senior Lender and the Subordinate Lender agree that: (i) the indebtedness evidenced by the Subordinate Loan Documents is and shall be subordinated in right of payment, to the extent and in the manner provided in this Agreement to the prior payment in full of the indebtedness evidenced by the First Mortgage Loan Documents, and (ii) the Subordinate Mortgage and the other Subordinate Loan Documents except for the City Restrictions are and shall be subject and subordinate in all respects to the liens of the First Mortgage and the other First Mortgage Loan Documents and to all advances heretofore made or which may hereafter be made pursuant to the First Mortgage and the other First Mortgage Loan Documents (including but not limited to, all sums advanced for the purposes of (1) protecting or further securing the lien of the First Mortgage, curing defaults by the Borrower under the First Mortgage Loan Documents or for any other purpose expressly permitted by the First Mortgage, or (2) constructing, renovating, repairing, furnishing, fixturing or equipping the Property). (b) Subordination of Subrogation Rights. The Subordinate Lender agrees that if, by reason of its payment of real estate taxes or ot her monetary obligations of the Borrower, or by reason of its exercise of any other right or remedy under the Subordinate Loan Documents, it acquires by right of subrogation or otherwise a lien on the Property which (but for this subsection) would be senior to the lien of the First Mortgage, then, in that event, such lien shall be subject and subordinate to the lien of the First Mortgage.
(c) Payments Before First Mortgage Loan Default. Until the Subordinate Lender receives a Default Notice of a First Mortgage Loan Default from the Senior Lender, the Subordinate Lender shall be entitled to retain for its own account all payments made under or pursuant to the Subordinate Loan Documents.
(d) Payments After First Mortgage Loan Default. The Borrower agrees that, after it receives notice (or otherwise acquires knowledge) of a First Mortgage Loan Default, it will not make any payments under or pursuant to the Subordinate Loan Documents (including but not limited to principal, interest, additional interest, late payment charges, default interest, attorney’s fees, or any other sums secured by the Subordinate Mortgage) without the Senior Lender’s prior written consent.

The Subordinate Lender agrees that, after it receives a Default Notice from the Senior Lender with written instructions directing the Subordinate Lender not to accept payments from the Borrower on account of the Subordinate Loan, it will not accept any payments under or pursuant to the Subordinate Loan Documents (including but not limited to principal, interest, additional interest, late

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payment charges, default interest, attorney’s fees, or any other sums secured by the Subordinate Mortgage) without the Senior Lender’s prior written consent. If the Subordinate Lender receives written notice from the Senior Lender that the First Mortgage Loan Default which gave rise to the Subordinate Lender’s obligation not to accept payments has been cured, waived, or otherwise suspended by the Senior Lender, the restrictions on payment to the Subordinate Lender in this Section 5 shall terminate, and the Senior Lender shall have no right to any subsequent payments made to the Subordinate Lender by the Borrower prior to the Subordinate Lender’s receipt of a new Default Notice from the Senior Lender in accordance with the provisions of this Section 5(d). (e) Remitting Subordinate Loan Payments to Senior Lender. If, after the Subordinate Lender receives a Default Notice from the Senior Lender in accordance with subsection (d) above, the Subordinate Lender receives any payments under the Subordinate Loan Documents, the Subordinate Lender agrees that such payment or other distribution will be promptly remitted, in kind to the Senior Lender, properly endorsed to the Senior Lender, to be applied to the principal of, interest on and other amounts due under the First Mortgage Loan Documents in accordance with the provisions of the First Mortgage Loan Documents. By executing this Agreement, the Borrower specifically authorizes the Subordinate Lender to endorse and remit any such payments to the Senior Lender, and specifically waives any and all rights to have such payments returned to the Borrower or credited against the Subordinate Loan. Borrower and Senior Lender acknowledge and agree that payments received by the Subordinate Lender, and remitted to the Senior Lender under this Section 5, shall not be applied or otherwise credited against the Subordinate Loan, nor shall the tender of such payment to the Senior Lender waive any Subordinate Loan Default which may arise from the inability of the Subordinate Lender to retain such payment or apply such payment to the Subordinate Loan.
(f) Agreement Not to Commence Bankruptcy Proceeding. The Subordinate Lender agrees that during the term of this Agreement it will not commence, or join with any other creditor in commencing any bankruptcy reorganizat ion, arrangement, insolvency or liquidation proceedings with respect to the Borrower, without the Senior Lender’s prior written consent.

6. Default Under Subordinate Loan Documents or City Restrictions. (a) Notice of Default and Cure Rights. The Subordinate Lender shall deliver to the Senior Lender a Default Notice within five (5) Business Days of delivery to the Borrower in each case where the Subordinate Lender has given a Default Notice to the Borrower. Failure of the Subordinate Lender to send a Default Notice to the Senior Lender shall not prevent the exercise of the Subordinate Lender’s rights and remedies under the Subordinate Loan Documents or City Restrictions, subject to the provisions of this Agreement. The Senior Lender shall have the right, but not the obligation, to cure any such Subordinate Loan Default as provided below. Senior Lender may have up to thirty (30) days from the date of the Default Notice to cure any monetary default under the Subordinate Loan Documents or City Restrictions; provided, however that the Subordinate Lender shall be entitled, during such 30-day period to continue to pursue its rights and remedies under the Subordinate Loan Documents or City Restrictions with respect to the Property. Senior Lender may have up to ninety (90) days from the date of the Default Notice to cure any non- monetary default under the Subordinate Loan Documents or City Restrictions. In the event that such a non-monetary default creates an unacceptable level of risk relative to the Property, or Subordinate Lender’s secured position relative to the Property, as determined by Subordinate Lender in its sole discretion, then Subordinate Lender may exercise during such 90-day period all available rights and remedies under the Subordinate Loan Documents to protect and preserve the Property and the rents, revenues and other proceeds from the Property and enforce the City Restrictions. All amounts paid by the Senior Lender in accordance with the First Mortgage Loan Documents to cure a Subordinate Loan Default shall be deemed to have been advanced by the Senior Lender pursuant to, and shall be secured by the lien of, the First Mortgage. (b) Intentionally Omitted.

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(c) Cross Default . The Borrower and the Subordinate Lender agree that a Subordinate Loan Default shall constitute a First Mortgage Loan Default under the First Mortgage Loan Documents and the Senior Lender shall have the right to exercise all rights or remedies under the First Mortgage Loan Documents in the same manner as in the case of any other First Mortgage Loan Default. If the Subordinate Lender notifies the Senior Lender in writing that any Subordinate Loan Default of which the Senior Lender has received a Default Notice has been cured or waived, as determined by the Subordinate Lender in its sole discretion, then provided that Senior Lender has not conducted a sale of the Property pursuant to its rights under the First Mortgage Loan Documents, any First Mortgage Loan Default under the First Mortgage Loan Documents arising solely from such Subordinate Loan Default shall be deemed cured, and the First Mortgage Loan shall be reinstated, provided, however, that the Senior Lender shall not be required to return or otherwise credit for the benefit of the Borrower any default rate interest or other default related charges or payments received by the Senior Lender during such First Mortgage Loan Default.

7. Default Under First Mortgage Loan Documents.
(a) Notice of Default and Cure Rights. The Senior Lender shall deliver to the Subordinate Lender a Default Notice within five (5) Business Days of sending such Default Notice to the Borrower. The Subordinate Lender shall have the right, but not the obligation, to cure any such First Mortgage Loan Default as provided below. Subordinate Lender may have up to thirty (30) days from the date of the Default Notice to cure any monetary default under the First Mortgage Loan Documents; provided, however, that the Senior Lender shall be entitled during such 30-day period to continue to pursue its remedies with respect to the Property. Subordinate Lender may have up to ninety (90) days from the date of the Default Notice to cure a non-monetary default. In the event that such a non-monetary default creates an unacceptable level of risk relative to the Property, or Senior Lender’s secured position relative to the Property, as determined by Senior Lender in its sole discretion, then Senior Lender may exercise during such 60-day period all available rights and remedies to protect and preserve the Property and the rents, revenues and other proceeds from the Property. At a minimum, the Subordinate Lender shall have the right to cure on the same terms as the Borrower. All amounts paid by the Subordinate Lender to the Senior Lender to cure a First Mortgage Loan Default shall be deemed to have been advanced by the Subordinate Lender pursuant to, and shall be secured by the lien of, the Subordinate Mortgage. Senior Lender shall not complete a foreclosure sale or accept a deed in lieu of foreclosure prior to the expiration of any applicable cure periods provided to Subordinate Lender. (b) If a cure of the First Mortgage Loan Default is completed within the applicable cure period, the Senior Lender: (i) will rescind any notice of default recorded and request dismissal of any receiver who has been appointed, after reimbursement of all of Senior Lender’s costs, including, without limitation, reasonable attorney’s fees and costs, and (ii) will not exercise its right to accelerate (or will de-accelerate) the amounts due under the Senior Loan Documents by reason of the Default Notice cured by Subordinate Lender or Borrower; provided, however, that nothing herein shall be construed to waive or limit any of the Senior Lender’s rights or remedies as to any uncured default, or any subsequent default, by Borrower.
(c) Cross Default. The Subordinate Lender agrees that, notwithstanding any contrary provision contained in the Subordinate Loan Documents, a First Mortgage Loan Default shall not constitute a default under the Subordinate Loan Documents if no other default occurred under the Subordinate Loan Documents until either (i) the Senior Lender has accelerated the maturity of the First Mortgage Loan, (ii) the Senior Lender has taken affirmative action to exercise its rights under the First Mortgage to collect rent, to appoint (or seek the appointment of) a receiver or to foreclose on (or to exercise a power of sale contained in) the First Mortgage, or (iii) the Senior Lender has delivered a Default Notice to the Borrower. At any time after a First Mortgage Loan Default is determined to constitute a default under the Subordinate Loan Documents, the Subordinate Lender shall be permitted to pursue its remedies for default under the Subordinate Loan Documents, subject to the restrictions and limitations of this Agreement. If at any time the Borrower cures any First

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Mortgage Loan Default to the satisfaction of the Senior Lender, as evidenced by written notice from the Senior Lender to the Subordinate Lender, any default under the Subordinate Loan Documents arising solely from such First Mortgage Loan Default shall be deemed cured and the Subordinate Loan shall be retroactively reinstated as if such First Mortgage Loan Default had never occurred.

8. Conflict.

The Borrower, the Senior Lender and the Subordina te Lender each agrees that, in the event of any conflict between the terms of the First Mort gage Loan Documents, any of the Subordinate Loan Documents and the terms of this Agreement, the terms of this Agreement shall govern and control solely as to the following: (a) the relative priority of the security interests of the Senior Lender and the Subordinate Lender in the Property; and (b) solely as between the Senior Lender and the Subordinate Lender, the notice requirements, cure rights, and the other rights and obligations which the Senior Lender and the Subordinate Lender have agreed to as expressly provided in this Agreement. Borrower acknowledges that the terms and provisions of this Agreement shall not, and shall not be deemed to:
extend Borrower’s time to cure any First Mortgage Loan Default or Subordinate Loan Default, as the case may be; give the Borrower the right to notice of any First Mortgage Loan Default or Subordinate Loan Default, as the case may be other than that, if any, provided, respectively under the First Mortgage Loan Documents or the Subordinate Loan Documents; or create any other right or benefit for Borrower as against Senior Lender or Subordinate Lender.

9. Rights and Obligations of the Subordinate Lender Under the Subordinate Loan Documents and of the Senior Lender under the First Mortgage Loan Documents.

Subject to each of the other terms of this Ag reement, all of the following provisions shall supersede any provisions of the Subordinate Loan Documents covering the same subject matter:
(a) Protection of Security Interest. The Subordinate Lender shall not, without the prior written consent of the Senior Lender in each instance, amend its Subordinate Loan Documents to increase the indebtedness outstanding under, or secured by, the Subordinate Loan Documents, except that the Subordinate Lender shall have the right to advance funds to cure First Mortgage Loan Defaults pursuant to Section 7(a) above and advance funds pursuant to the Subordinate Mortgage for the purpose of paying real estate taxes and insurance premiums, making necessary repairs to the Property and curing other defaults by the Borrower under the Subordinate Loan Documents.
(b) Condemnation or Casualty. In the event of: a taking or threatened taking by condemnation or other exercise of eminent domain of all or a portion of the Property (collectively, a “Taking”); or the occurrence of a fire or other casualty resulting in damage to all or a portion of the Property (collectively, a “Casualty”), at any time or times when the First Mortgage remains a lien on the Property the following provisions shall apply:
(1) The Subordinate Lender hereby agrees that its rights (under the Subordinate Loan Documents or otherwise) to participate in any proceeding or action relating to a Taking and/or a Casualty, or to participate or join in any settlement of, or to adjust, any claims resulting from a Taking or a Casualty shall be and remain subordinate in all respects to the Senior Lender’s rights under the First Mortgage Loan Documents with respect thereto, and the Subordinate Lender shall be bound by any settlement or adjustment of a claim resulting from a Taking or a Casualty made by the Senior Lender; provided, however, this subsection and/or anything contained in this Agreement shall not limit the rights of the Subordinate Lender to file any pleadings, documents, claims or notices with the appropriate court with jurisdiction over the proposed Taking and/or Casualty; and (2) all proceeds received or to be received on account of a Taking or a Casualty, or both, shall be applied (either to payment of the costs and expenses of repair

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and restoration or to payment of the First Mortgage Loan) in the manner determined by the Senior Lender in its sole discretion; provided, however, that if the Senior Lender elects to apply such proceeds to payment of the principal of, interest on and other amounts payable under the First Mortgage Loan, any proceeds remaining after the satisfaction in full of the principal of, interest on and other amounts payable under the First Mortgage Loan shall be paid to, and may be applied by, the Subordinate Lender in accordance with the applicable provisions of the Subordinate Loan Document s, provided however, the Senior Lender agrees to consult with the Subordinate Lender in determining the application of Casualty proceeds, provided further however that in the event of any disagreement between the Senior Lender and the Subordinate Lender over the application of Casualty proceeds, the decision of the Senior Lender, in its sole discretion, shall prevail. (c) No Modification of Subordinate Loan Documents or City Restrictions. The Borrower and the Subordinate Lender each agrees that, until the principal of, interest on and all other amounts payable under the First Mortgage Loan Documents have been paid in full, it will not, without the prior written consent of the Senior Lender in each instance, amend its documents to increase the amount of the Subordinate Loan, increase the required payments due under the Subordinate Loan, decrease the term of the Subordinate Loan, increase the interest rate on the Subordinate Loan, or otherwise amend either of the Subordinate Loan’s repayment terms in a manner that creates an adverse effect upon the Senior Lender under the First Mortgage Loan Documents. Any unauthorized amendment of the Subordinate Loan Documents or City Restrictions or assignment of the Subordinate Lender’s interest in the Subordinate Loan without the Senior Lender’s consent shall be void ab initio and of no effect whatsoever.

10. Modification of First Mortgage Loan.

The Subordinate Lender consents to any agreement or amendment by which the Senior Lender waives, postpones, extends, reduces or modifies any provisions of the First Mortgage Loan Documents, including any provision requiring the payment of money provided, however, that such consent shall not extend to any provision that increases the amount of the Senior Loan (other than pursuant to a protective advance permitted by the First Mortgage Loan Documents or applicable law); increases the interest rate, except as set forth in the First Mortgage Loan Documents; or decreases the term of the Senior Loan; or increases the required payments due under the Senior Loan except as set forth in the First Mortgage Loan Documents.

11. Default by the Subordinate Lender or Senior Lender.

If the Subordinate Lender or Senior Lender defaul ts in performing or observing any of the terms, covenants or conditions to be performed or observed by it under this Agreement, the other, non-defaulting lender shall have the right to all available legal and equitable relief.

12. Notices.

Each notice, request, demand, consent, approval or other communication (hereinafter in this Section referred to collectively as “notices” and referred to singly as a “notice”) which the Senior Lender or the Subordinate Lender are required or permitted to give to the other party pursuant to this Agreement shall be in writing and shall be deemed to have been duly and sufficiently given if: (a) personally delivered with proof of delivery thereof (any notice so delivered shall be deemed to have been received at the time so delivered); or (b) sent by Federal Express (or other similar national overnight courier) designating early morning delivery (any notice so delivered shall be deemed to have been received on the next Business Day following receipt by the courier); or (c) sent by United States register ed or certified mail, return receipt requested, postage prepaid, at a post office regularly maintained by the United States Postal Service (any notice so sent shall be deemed to have been received two days after mailing in the United States), addressed to the respective parties as follows:

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SENIOR LENDER: First-Citizens Bank & Trust Company
222 2 nd Street, 17th Floor
San Francisco, CA 94105
Attention: Community Development Finance

BORROWER: Pac Avenue, L.P.
c/o Satellite Affordable Housing Associates
1835 Alcatraz Avenue
Berkeley, CA 94703
Attn: Eve Stewart

with a copy to :

Interfaith Housing, Inc.
550 Hillcrest Avenue
Livermore, CA 94550
Attn: President

SUBORDINATE City of Livermore
LENDER: 1052 S. Livermore Avenue
Livermore, CA 94550-1052
Attention: City Manager

Any party may, by notice given pursuant to this Section, change the person or persons and/or address or addresses, or designate an additional person or persons or an additional address or addresses for its notices, but notice of a change of address shall only be effective upon receipt.

13. General.
(a) Assignment/Successors. This Agreement shall be binding upon the Borrower, the Senior Lender and the Subordinate Lender and shall inure to the benefit of the respective legal successors and assigns of the Senior Lender and the Subordinate Lender. (b) No Partnership or Joint Venture. The Senior Lender’s permission for the placement of the Subordinate Loan Documents and City Restrictions does not constitute the Senior Lender as a joint venturer or partner of the Subordinate Lender. Neither party hereto shall hold itself out as a partner, agent or Affiliate of the other party hereto. (c) Senior Lender’s and Subordinate Lender’s Consent. Wherever the Senior Lender’s consent or approval is required by any provision of this Agreement, such consent or approval may be granted or denied by the Senior Lender in its sole and absolute discretion, unless otherwise expressly provided in this Agreement. Wherever the Subordinate Lender’s consent or approval is required by any provision of this Agreement, such consent or approval may be granted or denied by the Subordinate Lender in its sole and absolute discretion, unless otherwise expressly provided in this Agreement.
(d) Further Assurances. The Subordinate Lender, the Senior Lender and the Borrower each agree, at the Borrower’s expense, to execute and deliver all additional instruments and/or documents reasonably required by any other party to this Agreement in order to evidence that the Subordinate Mortgage is subordinate to the lien, covenants and conditions of the First Mortgage, or to further evidence the intent of this Agreement.

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(e) Amendment. This Agreement shall not be amended except by written instrument signed by all parties hereto.
(f) Governing Law. This Agreement shall be governed by the laws of the State in which the Property is located.
(g) Severable Provisions. If any provision of this Agreement shall be invalid or unenforceable to any extent, then the other provisions of this Agreement, shall not be affected thereby and shall be enforced to the greatest extent permitted by law. (h) Term. The term of this Agreement shall commence on the date hereof and shall continue until the earliest to occur of the following events: (i) the payment of all of the principal of, interest on and other amounts payable under the First Mortgage Loan Documents; (ii) the payment of all of the principal of, interest on and other amounts payable under the Subordinate Loan Documents, other than by reason of payments which the Subordinate Lender is obligated to remit to the Senior Lender pursuant to Section 5 hereof; (iii) the acquisition by the Senior Lender of title to the Property pursuant to a foreclosure or a deed in lieu of foreclosure of, or the exercise of a power of sale contained in, the First Mortgage; or (iv) the acquisition by the Subordinate Lender of title to the Property pursuant to a foreclosure or a deed in lieu of foreclosure of, or the exercise of a power of sale contained in, the Subordinate Mortgage, but only if such acquisition of title does not violate any of the terms of this Agreement.
(i) Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be considered an original for all purposes; provided, however, that all such counterparts shall together constitute one and the same instrument. [Remainder of Page Intentionally Left Blank]

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first written above.

SENIOR LENDER:

FIRST-CITIZENS BANK & TRUST COMPANY

By:

Carlotta R. Mills
Vice President

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SUBORDINATE LENDER:

C I T Y O F L I V E R M O R E ,
a California municipal corporation
By: ______________________________
Marianna A. Burch
City Manager
A T T E S T :

By:

APPROVED AS TO FORM:

By: ____________________________
Name: Katherine Mirassou
Assistant City Attorney
_______________________________

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BORROWER:

PAC AVENUE, L.P.,
a California limited partnership
By: Pac Avenue LLC,
a California limited liability company
Its General Partner

By: Satellite Affordable Housing Associates,
a California nonprofit public benefit corporation
Its Member and Manager

By: _________________________________
Eve Stewart
Senior Vice President of Real Estate Development

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693

SMRH:4937-7778-8178.4 Acknowledgment
022625 21CT-403085

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 sa me in his/her/their authorized capaci ty(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.

Si
gnature

EXHIBIT E
694

SMRH:4937-7778-8178.4 Acknowledgment
022625 21CT-403085

State of California )
County of _____________________ )

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

Si
gnature

EXHIBIT E
695

SMRH:4937-7778-8178.4 Acknowledgment
022625 21CT-403085

State of California )
County of _____________________ )

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

Si
gnature

EXHIBIT E
696

SMRH:4937-7778-8178.4 Exhibit A
022625 21CT-403085

Exhibit A

Legal Description

ALL THAT REAL PROPERTY LOCATED IN THE CITY OF LIVERMORE, COUNTY OF ALAMEDA, CALIFORNIA, DESCRIBED AS FOLLOWS:

Parcel 2 of Parcel Map 10858, filed on November 27, 2024, in Book 360 of Parcel Maps, at Pages 87, 88 and 89.

APN: a portion of 099-0950-008-02

EXHIBIT E
697
1 Modification and Subordination Agreement
(Pacific Avenue Senior Homes)
921\33\3908790.1

MODIFICATION AND SUBORDINATION AGREEMENT
(City of Livermore Loan)
(Pacific Avenue Senior Homes)
NOTICE: THIS AGREEMENT RESULTS IN CERTAIN COVENANTS AND DEEDS

OF TRUST TO BE SUBJECT TO AND OF LOWER PRIORITY THAN OTHER

COVENANTS AND FURTHER RESULTS IN A SECURITY INTEREST UNDER A

CERTAIN DEED OF TRUST BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENT.

This Modification and Subordination Agreement (this "Agreement"), is made as of _________________, 2026, by and among Pac Avenue, L.P., a California limited partnership (the "Borrower"), the City of Livermore, a municipal corporation (the "Lender"), present holder and owner of the deed of trust and note first hereinafter described, for the benefit of the United States of America, acting by and through the Secretary of Housing and Urban Development ("HUD"), with reference to the following facts:

RECITALS
A. WHEREAS, the Borrower owns that certain property legally described in Exhibit A, attached hereto and incorporated herein by this reference (the "Property"); B. WHEREAS, the Borrower and the Lender are parties to that certain Affordable Housing Loan Agreement, dated as of March ___, 2025 (the "Junior Loan Agreement");

RECORDING REQUESTED BY
AND WHEN RECORDED RETURN TO:

U.S. Department of Housing and Urban
Development
One Sansome Street, Suite 1200
San Francisco, California 94104
Attention: Office of Regional Counsel

NO FEE FOR RECORDING PURSUANT
TO GOVERNMENT CODE SECTION 27383
AND 27388.1(a)(2)(C)
APN: 099-0950-008-02
Address: 3701 Pacific Avenue, Livermore, California 94550

SPACE ABOVE THIS LINE FOR RECORDER'S USE

EXHIBIT F
698

2 Modification and Subordination Agreement
(Pacific Avenue Senior Homes)
921\33\3908790.1
C. WHEREAS, the Junior Loan Agreement provides that the Borrower would construct and maintain improvements as more particularly set forth in the Junior Loan Agreement, including the operation of affordable rental housing on the Property. In addition, the Junior Loan Agreement provides that the Lender would make a loan in the original principal amount of Six Million Five Hundred Thousand and No/100ths Dollars ($6,500,000.00) (the "Junior Loan"). The Junior Loan is evidenced by an unrecorded Promissory Note, dated as of March ___, 2025 (the "Junior Note"), and is secured by a Leasehold Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing, dated as of March ___, 2025, and recorded in the Official Records of Alameda County, California (the "Official Records") on March ___, 2025, as Instrument Number 2025-____________ (the "Junior Deed of Trust," and together with the Junior Loan Agreement and the Junior Note, collectively, the "Junior Loan Documents");
D. WHEREAS, the Junior Loan Documents provide that it was contemplated that HUD would originate a loan to the Borrower from capital advance funds following substantial completion of construction of the improvements to the Property (the "HUD Loan"), and that the Lender would subordinate the Junior Loan Documents to each of the following documents required by HUD to secure the HUD Loan: (i) Deed of Trust With Assignment of Rents, (ii) Regulatory Agreement for Capital Advance Mixed Finance Program, (iii) Capital Advance Mixed-Finance Program Use Agreement, and (iv) UCC Financing Statement (collectively, the "HUD Loan Documents");
E. WHEREAS, it is a condition precedent to obtaining funding of the HUD Loan that each of the HUD Loan Documents shall unconditionally be a lien or charge upon the Property prior and superior to the lien or charge of each of the Junior Loan Documents; F. WHEREAS, HUD requires that each of the Junior Loan Documents be modified to add the HUD-Required Provisions Rider, attached hereto as Exhibit B, and to be subordinated to the HUD Loan Documents pursuant to this Agreement; and G. WHEREAS, it is to the mutual benefit of the parties hereto that HUD originate the loan to the Borrower, and the Lender agrees that the Junior Loan Documents shall be junior and subordinate to each of the HUD Loan Documents.

NOW, THEREFORE, in consideration of the mutual benefits accruing to the parties hereto and other valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and in order to induce the Lender to make the Junior Loan above referred to and to induce HUD to disburse proceeds of the HUD Loan above referred to, it is hereby declared, understood, and agreed as follows:

AGREEMENT

1. That each of the HUD Loan Documents shall unconditionally be a lien or charge on the Property prior and superior to the lien or charge of the Junior Loan Documents.

EXHIBIT F
699

3 Modification and Subordination Agreement
(Pacific Avenue Senior Homes)
921\33\3908790.1

2. That the HUD-Required Provisions Rider, attached hereto as Exhibit B, is incorporated and made a part of the Junior Deed of Trust as if fully set forth therein.

3. That HUD would not make the above-described HUD Loan without this Agreement.

4. In the event of a mortgage or deed of trust default or breach by the Borrower, whether prior to or after the completion of the construction of any of the "Improvements" (as defined in the Junior Loan Agreement) or any part thereof (continuing until the expiration of the term of the Junior Loan Agreement), the Borrower shall immediately deliver to each of the Lender and HUD a copy of any applicable notice of default. If the holder of any mortgage or deed of trust has not exercised its option to construct, each of HUD and the Lender shall have the right but not the obligation to cure the default. In such event, HUD and the Lender, as applicable, shall be entitled to reimbursement from the Borrower of all proper costs and expenses incurred by HUD or the Lender, as applicable, in curing such default.

Each of the Lender and the Borrower agree to provide HUD with notice of default by the Borrower under the Junior Loan Agreement, including instruments delivered in connection therewith, with HUD being afforded a reasonable time (not less than ninety (90) calendar days from the date of receipt of the notice of default) to cure (but under no obligation to do so); provided that the obligation of the Lender to provide notice is limited to matters of which the Lender has actual knowledge.
[SIGNATURE PAGES FOLLOW]

EXHIBIT F
700

S-1
Modification and Subordination Agreement
(Pacific Avenue Senior Homes)
921\33\3908790.1
BORROWER:

PAC AVENUE, L.P.,
a California limited partnership
By: Pac Avenue LLC,
a California limited liability company,
its general partner
By: Satellite Affordable Housing
Associates,
a California nonprofit public benefit
corporation,
a member and the manager
By: ________________________
Eve Stewart
Senior Vice President of Real
Estate Development
[SIGNATURES MUST BE ACKNOWLEDGED]

EXHIBIT F
701

Modification and Subordination Agreement
(Pacific Avenue Senior Homes)
921\33\3908790.1
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.

STATE OF CALIFORNIA )
)

COUNTY OF ALAMEDA )
On __________________, 2026, before me, ___________________________, Notary Public, personally appeared Eve Stewart, 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.
__________________________________________
Name: ____________________________________

EXHIBIT F
702

S-2
Modification and Subordination Agreement
(Pacific Avenue Senior Homes)
921\33\3908790.1
LENDER:

CITY OF LIVERMORE,
a municipal corporation
By: ____________________________________
Marianna A. Burch
City Manager
ATTEST:

By: ____________________________________
APPROVED AS TO FORM:
____________________________________
Deputy/Assistant/Senior Assistant/City Attorney
[SIGNATURES MUST BE ACKNOWLEDGED]

EXHIBIT F
703

STATE OF CALIFORNIA )
)

COUNTY OF ALAMEDA )
On __________________, 2026, before me, ___________________________, Notary Public, personally appeared Marianna A. Burch, 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.
__________________________________________
Name: ____________________________________

EXHIBIT F
704

S-3
Modification and Subordination Agreement
(Pacific Avenue Senior Homes)
921\33\3908790.1
HUD:

THE UNITED STATES OF AMERICA,

ACTING BY AND THROUGH THE

SECRETARY OF HOUSING AND URBAN

DEVELOPMENT
By: __________________________________
Name: __________________________________
Its: Authorized Agent
[SIGNATURES MUST BE ACKNOWLEDGED]

EXHIBIT F
705

STATE OF CALIFORNIA )
)

COUNTY OF SAN FRANCISCO )
On __________________, 2026, before me, ___________________________, 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.
__________________________________________
Name: ____________________________________

EXHIBIT F
706

A-1
Modification and Subordination Agreement
(Pacific Avenue Senior Homes)
921\33\3908790.1

EXHIBIT A

LEGAL DESCRIPTION OF THE PROPERTY
The land referred to is situated in the County of Alameda, City of Livermore, State of California, and is described as follows:

Parcel 2, of Parcel Map 10858, filed on November 27, 2024, in Book 360 of Parcel Maps, at Pages 87, 88, and 89.

APN: a portion of 099-0950-008-02.

EXHIBIT F
707

B-1
Modification and Subordination Agreement
(Pacific Avenue Senior Homes)
921\33\3908790.1

EXHIBIT B

HUD-REQUIRED PROVISIONS RIDER
For value received, the undersigned agree that the following provisions (this "Rider") shall be incorporated into and made a part of the following documents: (i) that certain Affordable Housing Loan Agreement (the "Junior Loan Agreement"), between Pac Avenue, L.P., a California limited partnership (the "Borrower"), and the City of Livermore, a municipal corporation (the "Lender"), (ii) that certain Promissory Note, from the Borrower to the Lender (the "Junior Note"), (iii) that certain Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants, between the Borrower and the Lender (the "Junior Regulatory Agreement"), and (iv) that certain Leasehold Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing, by the Borrower to the Lender (the "Junior Deed of Trust"), each dated as of March ___, 2025 (collectively, the "Junior Loan Documents"), relating to the property commonly known as Pacific Avenue Senior Homes (the "Project").

In the event of any conflict, inconsistency or ambiguity between the provisions of this Rider and the provisions of the Junior Loan Documents, the provisions of this Rider shall control. All capitalized terms used herein and not otherwise defined herein shall have the meaning given to such terms in the Junior Loan Documents. As used in this Rider, the term "HUD Loan Documents" shall mean the following documents relating to the HUD Section 202 Capital Advance (the "HUD Capital Advance"), for the Project (HUD Project Number 121- EE240):

A. Deed of Trust With Assignment of Rents, from the Borrower to HUD (the "HUD Deed of Trust");
B. Regulatory Agreement for Capital Advance Mixed Finance Program, between the Borrower and HUD, recorded against the Property (the "HUD Regulatory Agreement"); C. Capital Advance Mixed-Finance Program Use Agreement, between the Borrower and HUD recorded concurrently herewith (the "HUD Use Agreement"), incorporated by reference in the HUD Deed of Trust;
D. Security Agreement, between the Borrower and HUD (the "HUD Security Agreement");
E. Project Rental Assistance Contract (the "PRAC"); and F. Other HUD Capital Advance documents.

1. Term of Rider. Notwithstanding anything else in this Rider to the contrary, the provisions of this Rider shall be and remain in effect only so long as any of the HUD Loan

EXHIBIT F
708

B-2
Modification and Subordination Agreement
(Pacific Avenue Senior Homes)
921\33\3908790.1
Documents are in effect; thereafter, this Rider and its requirements shall be deemed no longer in effect.

2. Subordination. The covenants contained in the Junior Loan Documents shall be subordinate to the rights of HUD under the HUD Loan Documents, and to the HUD rules and regulations pertaining thereto; and furthermore, the Junior Loan Documents shall not be enforceable against the Secretary of HUD, his or her successors and assigns, should the Secretary of HUD acquire title to the Project by power of sale, foreclosure, or by deed-in-lieu of foreclosure. In addition, so long as the HUD Loan Documents are in effect, in the event that there are any conflicts between the terms and conditions in the Junior Loan Documents and the terms and conditions of the HUD Loan Documents and HUD rules and regulations pertaining thereto, the HUD Loan Documents and HUD rules and regulations shall prevail. No default may be declared under the Junior Loan Documents without prior written HUD consent.

3. HUD Rules. During the time period in which Section 202 or the PRAC regulations apply to the Project, rents approved by HUD pursuant to the Section 202 program and the PRAC shall be deemed to be in compliance with the Junior Regulatory Agreement, and compliance by the Borrower with the Section 202 regulations and the PRAC with respect to continued occupancy by households whose incomes are at or below the eligible income limitations in Section 2.1 of the Junior Regulatory Agreement, or other matters set forth in Section 2 of the Junior Regulatory Agreement, shall be deemed to be in compliance with the requirements of the Junior Loan Documents. Nothing in the Junior Loan Documents shall in any way limit, interfere or conflict with the rights of HUD with respect to development, operation and management of the Project; nor can the Junior Loan Documents in any way jeopardize the continued operation of the project on terms at least as favorable to existing as well as future tenants.

4. Maturity Date. The Junior Note may not mature, and may not bear a maturity date, prior to the date on which the HUD Note matures. The term of the Junior Loan Documents shall be extended if the Junior Note matures, there are no residual receipts or non-Project funds available for repayment and the HUD Deed of Trust has not been retired in full or if HUD grants a deferment of amortization or forbearance that results in an extended maturity of the HUD Loan Documents.

5. Residual Receipts. As long as HUD, its successors or assigns, is the insurer or holder of the HUD Loan Documents, any payments due from Project income from the Section 202 units under the Junior Loan Documents, or any prepayments made with Project income from the Section 202 units, shall be payable only from residual receipts of the Project, as that term is defined in the HUD Regulatory Agreement, between HUD and the Borrower, and subject to the availability of residual receipts in accordance with the provision of the HUD Regulatory Agreement. No payments or prepayments using residual receipts can be made without HUD approval. The Borrower may make payments or prepayments at any time without HUD approval using funds that do not come from Project income from the Section 202 units.

The restrictions on payment imposed by this Section 5 shall not excuse any default caused by the failure of the makers to pay the indebtedness evidenced by the Junior Note.

EXHIBIT F
709

B-3
Modification and Subordination Agreement
(Pacific Avenue Senior Homes)
921\33\3908790.1

6. Indemnification. Enforcement by the Lender of any indemnification provisions in the Junior Loan Documents will not and shall not result in any monetary claim against the Project, the proceeds of the HUD Capital Advance, any reserve or deposit required by HUD in connection with the HUD Capital Advance, or the rents or other income from the Section 202 units in the Project other than residual receipts authorized for release by HUD, without the prior written consent of HUD, but the Lender shall have the right to add any amounts due the Lender pursuant to indemnification provisions in the Junior Loan Documents to the principal amount of the Junior Loan and the Junior Note and interest shall accrue thereon commencing on the date indemnification payments are due. In addition, any indemnification provisions shall not be enforceable against the Secretary of HUD, his or her successors and assigns, should the Secretary of HUD acquire title to the Project by power of sale, foreclosure, or by deed-in-lieu of foreclosure.

7. Transfer. Approval by HUD of a Transfer of Physical Assets (as defined in HUD Handbook 4350.1, REV-1, Chapter 13) ("TPA") shall constitute approval of the transfer by the Lender, and the Borrower shall deliver to the Lender at the same time as its delivery to HUD, any application for approval of a proposed transfer to HUD. Also, the Borrower shall require the transferee to expressly assume the obligations of the Borrower under the Junior Loan Documents; provided, however, HUD shall not be required to enforce the requirements of this sentence and if the Borrower and any transferee fail to include such assumption in transfer documents, such failure shall not affect the validity of the transfer. The Lender shall have the right to specifically enforce the requirement that any transferee assume the obligations of the Borrower under the Junior Loan Documents. In the absence of such written assumption, no transfer shall be deemed to relieve the transferor from any obligations under the Junior Loan Documents.

8. Default under Junior Loan Documents. The Lender shall not declare a default under the Junior Loan Documents unless it has received the prior written approval of HUD, and the right of the Lender to accelerate the Junior Note during the term of the HUD Loan Documents shall be enforceable only with the prior written approval of HUD.

9. Receiver. The Lender, for itself, its successors and assigns, further covenants and agrees that in the event of the appointment of a receiver in any action by the Lender, its successors and assigns, to foreclose the Junior Deed of Trust, no rents, revenue or other income of the Project collected by the receiver or by the mortgagee-in-possession shall be utilized for the payment of interest, principal, or any other charges due and payable under the Junior Deed of Trust, except from "Residual Receipts," if any, as the term is defined in the HUD Regulatory Agreement. The appointment of a receiver shall require approval by the Secretary of HUD, and pursuant to HUD regulations, as long as the Lender is beneficiary under the Junior Deed of Trust, the Lender cannot be mortgagee-in-possession. In the event of the appointment, by any court, of any person, other than HUD, the Lender, as a receiver or a mortgagee or party in possession, or in the event of any enforcement of any assignment of leases, rents, issues, profits, or contracts contained in the Junior Loan Documents, with or without court action, no rents, revenue or other income of the Project collected by the receiver, person in possession or person pursuing enforcement as aforesaid, shall be utilized for the payment of interest, principal or any

EXHIBIT F
710

B-4
Modification and Subordination Agreement
(Pacific Avenue Senior Homes)
921\33\3908790.1
other amount due and payable under the provisions of the Junior Loan Documents, except from Residual Receipts in accordance with the HUD Regulatory Agreement. The receiver, person in possession or person pursuing enforcement shall operate the Project in accordance with all provisions of the HUD Loan Documents.

10. Deed-in-Lieu of Foreclosure. In the event that HUD acquires title to the Project by deed-in-lieu of foreclosure, the lien of the Junior Deed of Trust will automatically terminate subject to the conditions as hereinafter described. HUD may cure a default under the HUD Deed of Trust prior to conveyance by deed-in-lieu of foreclosure. HUD shall give written notice to the Lender of a proposed tender of title in the event HUD decides to accept a deed-in-lieu of foreclosure. HUD will only give such written notice if, at the time of the placing of the subordinate lien against the Property, HUD receives a copy of an endorsement to the title policy of the Borrower or the Lender which indicates that (a) the Junior Deed of Trust has been recorded, and (b) HUD is required to give notice of any proposed election or tender of a deed-in- lieu of foreclosure. Such notice shall be given at the address stated in the Junior Deed of Trust or such other addresses as later on provided to HUD by written notice, and designated by the Lender as its legal business address. The Lender shall have thirty (30) calendar days to cure the default after notice of intent to accept a deed-in-lieu of foreclosure is mailed.

11. Borrower's Notice to Agency. Notwithstanding the requirements set forth in Section 10 of this Rider, in the event that the Borrower contemplates executing a deed-in-lieu of foreclosure, the Borrower shall first give the Lender thirty (30) calendar days prior written notice; provided, however, that the failure of the Borrower to give said notice shall have no effect on the right of HUD to accept a deed-in-lieu of foreclosure.

12. Sale, Transfer or Assignment of the Junior Note. The Junior Note is non- negotiable and may not be sold, transferred, assigned or pledged by the Lender except with the prior approval of HUD.

13. Amendment. No amendment to the Junior Loan Documents made after the date of this Rider shall have any force or affect until and unless such amendment is approved in writing by HUD.
[SIGNATURE PAGE FOLLOWS]

EXHIBIT F
711

B-5
Modification and Subordination Agreement
(Pacific Avenue Senior Homes)
921\33\3908790.1
IN WITNESS WHEREOF, the Borrower and the Lender have executed this Rider as follows:

BORROWER:

EXHIBIT F
712

B-6
Modification and Subordination Agreement
(Pacific Avenue Senior Homes)
921\33\3908790.1
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.

STATE OF CALIFORNIA )
)

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.
__________________________________________
Name: ____________________________________

EXHIBIT F
713

B-7
Modification and Subordination Agreement
(Pacific Avenue Senior Homes)
921\33\3908790.1
LENDER:

CITY OF LIVERMORE,
a municipal corporation
By: ____________________________________
Marianna A. Burch
City Manager
ATTEST:

By: ____________________________________

APPROVED AS TO FORM:
____________________________________
Deputy/Assistant/Senior Assistant/City Attorney
[SIGNATURES MUST BE ACKNOWLEDGED]

EXHIBIT F
714

B-8
Modification and Subordination Agreement
(Pacific Avenue Senior Homes)
921\33\3908790.1
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.

STATE OF CALIFORNIA )
)

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.
__________________________________________
Name: ____________________________________

EXHIBIT F
715
921\33\3928061.2

CAPITAL ADVANCE MIXED-FINANCE PROGRAM USE AGREEMENT
(Pacific Avenue Senior Homes)

RECORDING REQUESTED BY
AND WHEN RECORDED RETURN TO:

U.S. Department of Housing and Urban
Development
One Sansome Street, Suite 1200
San Francisco, California 94104
Attention: Office of Regional Counsel

NO FEE FOR RECORDING PURSUANT
TO GOVERNMENT CODE SECTION 27383
AND 27388.1(a)(2)(C)
APN: 099-0950-008-02
Address: 3701 Pacific Avenue, Livermore, California 94550

SPACE ABOVE THIS LINE FOR RECORDER'S USE

EXHIBIT G
716

Page 1 of 10 ends

Livermore City CouncilMarch 24, 2025

Livermore City Council
March 24, 2025