Pleasanton City Council
June 4, 2024

Current Affordability TCAC Targeting
AMI Unit
Size
Number AMI Unit
Size
Number
25% 1 9 30% 1 18
33% 1 36 50% 1 55
50% 1 27 60% 1 102
60% 1 108 80% 1 5
25% 2 1 30% 2 2
33% 2 4 50% 2 5
50% 2 3 60% 2 8
60% 2 12 80% 2 3
Total 200 Total 198
Two 2-bedroom
employee units
Two unrestricted 2-
bedroom employee units
• Restricts annual rent increases for existing residents to the lesser of either (1) the percentage increase allowed by California Tax Credit Allocation Committee (CTCAC) regulations, and (2) the percentage increase allowed by applicable State law. As noted, upon vacancy rents may increase to the TCAC maximum allowable rents for designated AMI categories.
• Sets the term of the Regulatory Agreement for a period of 55 years commencing upon completion of construction to mirror the 55-year tax credit regulatory agreement. • Allows deeply targeted rents to "float up" to 60% AMI following a foreclosure, which facilitates a higher appraised value and supports a higher loan amount. • Establishes the City’s preference criteria in leasing the property subject to applicable fair housing and financing requirements.
• Establishes property management and maintenance expectations for the property and allows the City the right, subject to investor and lender approval, to request replacement of the management agent in the event of default of those management responsibilities.
• Describes ongoing monitoring, tenant recertification and reporting requirements for the project.
• Requires payment of $10,000 per year to the City as a monitoring fee, increasing by an annual escalation of 3%.

After Eden Housing closes its low-income housing tax credit resyndication deal, it can begin to substantially rehabilitate the exterior of Ridge View Commons as well as the interior of the 200 units at the property. Constructed in 1989, the 35-year old property would significantly benefit from a substantial renovation. Planned exterior improvements include window replacements, rebuilding patio decks, new fencing, new site lighting, and new landscape and irrigation.

Interior work to be undertaken includes new electrical and plumbing systems and individual units provided with new ranges and hoods, exhaust fans in the bathrooms, new faucets in the kitchens and bathrooms, new toilets, as well as accessibility improvements for some units.

Additionally, the resyndication would result in financial benefits to the City as the City would receive annual payments towards the repayment of the City loan as well as a monitoring fee that would allow City staff to ensure the property is adhering to its affordability restrictions.

EQUITY AND SUSTAINABILITY
The action directly implements the Housing Element that serves as the City’s strategy for addressing its housing needs for all residents at all income levels. Housing Element Policy 3.3 is to preserve the affordability of restricted units affordable to extremely low-, very low- and low-income households for the longest term feasible, including requiring units to be deed- restricted in perpetuity whenever allowable.

OUTREACH
No outreach was conducted, as this item is a routine matter of City business.

STRATEGIC PLAN ALIGNMENT
Approval of this action advances the ONE Pleasanton strategic goal of Building a Community Where Everyone Belongs, Strategy 6 to implement the Housing Element, by preserving and rehabilitating an existing affordable rental housing community for seniors.

FISCAL IMPACT
It is anticipated that the City will receive approximately $300,000 from the project's net operation incomes at the end of construction and completion of the cost certification, which is projected approximately on September 30, 2025. The City is then projected to receive approximately $30,000 annually from the project’s cash flow. The City will also receive a $10,000 annual monitoring fee with an annual escalation increase of 3%. All payments received would be applied toward repayment of the City loan.

Prepared by: Submitted by: Approved by:

Steve Hernandez, Housing
Division Program Manager
Ellen Clark, Director of Community
Development

Gerry Beaudin, City
Manager

Attachments:

1. Resolution Ridge View Commons

RESOLUTION NO.

A RESO

LUTION OF THE CITY COUNCIL OF THE CITY OF PLEASANTON TO APPROVE THE RIDGE VIEW COMMONS SENIOR RENTAL HOUSING COMPLEX’S AMENDED AND RESTATED GROUND LEASE; AND AUTHORIZE THE CITY

MANAGER TO EXECUTE ALL NECESSARY DOCUMENTS INCLUDING
SUBORDINATION AGREEMENTS FOR EDEN HOUSING’S TAX CREDIT FINANCING

FOR THE RENOVATION OF RIDGE VIEW COMMONS
WHEREAS, Ridge View Commons at 5200 Case Avenue is a 200-u nit senior rental housing complex. The City owns the underlying land and has a Ground Lease with Eden Housing, which owns the apartment buildings and manages the rental of very-low and low-i ncome affordable units as well as market-rate units at the complex; and WHEREAS, when Ridge View Commons was originally developed in 1989, the City acquired the land, waived development fees, and provided loans in the amount of: $4,000,000 in 1988 from a Department of Housing and Urban Development (HUD) grant through the Housing Development Grant (HODAG) program; and $2,250,000 loan in 1999 increased by $225,000 in 2009 from the City’s Affordable Housing Funds. As Ridge View Commons provides many significantly affordable units, the complex has not been able to pay off these loans, and outstanding interest has continued to accrue; and
WHEREAS, Eden Housing has been selected by the State of California to receive an allocation of tax exempt bond financing and low -income housing tax credits to fund capital improvements for the renovation of Ridge View Commons, as well as upgrade to about 20 units to meet current accessibility requirements. Eden Housing has asked to convey the complex to a new limited partnership controlled by an affiliate of Eden, amend these existing City loans, have a new regulatory agreement to clarify affordability requirements, modify the ground lease to extend the term as required by the tax credit financing, and subordinate the deed of trust securing repayment of the City loans to the construction/permanent lender; and WHEREAS, the tax credit financing will ensure the renovation of Ridge View Commons so that it can continue to serve as a vital senior housing complex with affordable units that keeps existing residents safely in the Pleasanton community, thereby implementing the Livibility and Community Development strategies of the ONE Pleasanton strategic plan.

NOW, T HEREFORE, THE CI TY C OUNCIL OF T HE CI TY O F P LEASANTON DOES RESOLVE, DECLARE, DETERMINE AND ORDER THE FOLLOWING:

SECTION 1. Finds that the agreements facilitate the funding for the rehabilitation, maintenance and repair of the existing residential improvements at Ridge View Commons and those are a Class 1 Categorical Exemption under the California Environmental Quality Act (CEQA) per Regulation §15301 Existing Facilities.

SECTION 2. Approves: (A) Amended and Restated Documents (Promissory Note, Deed of Trust, Regulatory Agreement) attached as Exhibit A; (B) Amended and Restated Ground Lease attached as Exhibit B; agrees to subordinate the City deed of trust to the construction/ permanent lender, and authorizes the City Manager to execute any required Subordination Agreement(s) in a form approved by the City Attorney; and authorizes the City Manager and City Attorney to make minor modifications to the agreements; and authorizes the City Manager to execute the
ATTACHMENT 1

Resolution No.

agreements and any other documents related to the re-syndication and financing for rehabilitation of Ridge View Commons.

PASSED, APPROVED AND ADOPTED by the City Council of the City of Pleasanton at a regular meeting held on May 21, 2024.

I, Jocelyn Kwong, City Clerk of the City of Pleasanton, California, certify that the foregoing resolution was adopted by the City Council at a regular meeting held on the 21st day of May, 2024, by the following vote:

Ayes:

Noes:

Absent:

Abstain:

_____________________________
Jocelyn Kwong, City Clerk

APPROVED AS TO FORM:

_______________________________
Daniel G. Sodergren, City Attorney

Resolution No.

EXHIBIT A
Amended and Restated Documents
(Promissory Note, Deed of Trust, Regulatory Agreement)

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AMENDED AND RESTATED SECURED PROMISSORY NOTE
(Ridge View Commons)

[$16,632,775] ____________, 2024
[$6,475,000 plus accrued interest] Pleasanton, California

FOR VALUE RECEIVED, Ridge View Commons II Associates, L.P., a California limited partnership (“Borrower”), promises to pay to the City of Pleasanton, a municipal corporation (the “City”), in lawful money of the United States of America, the principal sum of [______________________ ($______)] together with interest on the outstanding principal balance in accordance with the terms and conditions described herein.

This Note amends, restates, and supersedes in their entirety: (i) that certain Promissory Note Secured by Deed of Trust in the original principal amount of Four Million Dollars ($4,000,000) dated as of June 27, 1988, executed by Eden Housing, Inc., a California nonprofit corporation (“Eden”) and subsequently amended by an Amendment to Promissory Note Secured by Deed of Trust executed by Eden and dated December 28, 1988 (as so amended, the “Prior HDG Note”); and (ii) that certain Promissory Note dated September 1, 1999, executed by Ridge View Commons Associates, a California limited partnership (“Ridge View I”) in the original principal amount of Two Million Two Hundred Fifty Thousand Dollars ($2,250,000), and subsequently amended to increase the principal amount to Two Million, Four Hundred Seventy- Five Thousand Dollars ($2,475,000) pursuant to that certain First Amendment to Promissory Note dated January 27, 2010, and executed by Ridge View I and City (as so amended, the “Prior Additional Note”). Eden’s obligation to pay the Prior HDG Note was assumed by Ridge View I pursuant to that certain Assumption and Assignment Agreement dated October 31, 1989, executed by and among Eden, Ridge View I, and City, and recorded in the Official Records of Alameda County (“Official Records”) on November 14, 1989 as Instrument No. 89-308003.

The Prior HDG Note and the Prior Additional Note, each as previously amended and assigned are collectively referred to herein as the “Prior Notes.” As evidenced by this Note, Borrower has assumed the obligation to pay the Prior Notes.

The original principal amount of this Note is equal to the aggregate sum of the outstanding principal balances of the Prior Notes, together with interest accrued thereon as of [May 1, 2024].

This Note is secured by an Amended and Restated Leasehold Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing (“Deed of Trust”) dated as of the date hereof, executed by Borrower as trustor for the benefit of City, and recorded in the Official Records substantially concurrently with the delivery of this Note. City shall be entitled to the benefits of the security provided by the Deed of Trust and shall have the right to enforce the covenants and agreements contained herein, in the Deed of Trust, the Ground Lease (defined below), and that certain Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants dated as of the date hereof, executed by and between City and Borrower, and recorded in the Official Records substantially concurrently with the delivery of this Note (the “Regulatory Agreement”). The rent restrictions and other requirements set forth in the Regulatory

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Agreement and in that certain Amended and Restated Ground Lease dated as of the date hereof and executed by and between City and Borrower (“Ground Lease”) shall remain effective for the full term of such documents, and shall survive the repayment of this Note. Capitalized terms used without definition herein shall have the meanings ascribed to such terms in the Ground Lease. The Ground Lease, this Note, the Deed of Trust, and the Regulatory Agreement are collectively referred to herein as the “City Documents.”

1. PAYMENTS.

1.1 INTEREST RATE. Interest shall accrue on the principal balance of this Note outstanding from time to time at the rate of [Four and 55/100 percent (4.55%) compounded annually] (the Applicable Federal Rate). Interest shall be calculated on the basis of a year of 365 days, and charged for the actual number of days elapsed.

1.2 INITIAL PAYMENT; ANNUAL PAYMENT DATES; MATURITY DATE. On the date that Borrower’s Project construction loan converts to a permanent loan, Borrower shall pay to City the sum of ______________ Dollars ($_______) which shall be applied to the outstanding balance payable under this Note. Thereafter, annual payments toward principal and interest accrued on this Note shall be payable on a residual receipts basis as described below.

Such annual payments shall be credited first to any unpaid late charges and other costs and fees then due, then to accrued interest, and then to principal. Notwithstanding the foregoing, in City’s sole discretion, City may elect to apply Surplus Cash payments received from Borrower toward payments due under the Ground Lease in lieu of applying such payments toward the sums due under this Note. In no event shall any amount due under this Note become subject to any rights, offset, deduction or counterclaim on the part of Borrower. The entire outstanding principal balance of this Note, together with interest accrued thereon and all other sums accrued hereunder shall be payable in full on the date (the “Maturity Date”) which is the earlier of (i) the fifty-fifth (55th) anniversary of the date upon which the City Building Inspector signs off on the final inspection of the Project following completion of rehabilitation and issues a certificate of occupancy or equivalent for the Project, and (ii) the fifty-seventh (57th) anniversary of the date of this Note; provided however, the Maturity Date shall not be earlier than the date of expiration or termination of the Regulatory Agreement that the California Tax Credit Allocation Committee (CTCAC) will cause to be recorded against Borrower’s leasehold interest in the Property at about the time that the Project is placed in service in connection with the allocation of federal Low- Income Housing Tax Credits for the Project.

1.3 ANNUAL PAYMENTS FROM SURPLUS CASH. During the 15-year period commencing upon the Project placed-in-service date, by no later than June 30 of each year, Borrower shall pay to City thirty-three and 33/100 percent (33.33%) of all Surplus Cash generated by the Project during the previous calendar year to reduce the indebtedness owed under this Note. Commencing upon the earlier of (a) the commencement of the sixteenth (16 th)
year following the Project placed-in-service date, and (b) the date that any deferred developer fee has been fully paid, annual payments due under this Note shall increase to equal fifty percent (50%) of Surplus Cash generated by the Project during the previous calendar year. Each payment of Surplus Cash due pursuant to this Section shall be due and payable to the City by not later than June 30 for the previous calendar year.

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Borrower acknowledges that in City’s sole discretion, by written notice to Borrower, City may elect to apply Borrower’s payments of Surplus Cash toward the balance payable under the Ground Lease in lieu of applying such payments toward the balance payable under this Note.

By not later than April 30 of each year, Borrower shall provide to City Borrower’s calculation of Surplus Cash for the previous calendar year, accompanied by such supporting documentation as City may reasonably request, including without limitation, an independent audit prepared for the Project by a certified public accountant in accordance with generally accepted accounting principles. The annual report shall include, without limitation, a Project income and expense statement and an accounting of deposits to and withdrawals from the Project replacement, operating, and other reserves. City shall have the right to inspect and audit Borrower’s books and records concerning the calculation of Surplus Cash, and to object within sixty (60) days from receipt of the report. Failure to timely object shall be deemed acceptance of the report. If City does object, City shall specify the reasons for disapproval. Borrower shall have thirty (30) days to reconcile any disapproved item. If Borrower and City cannot agree on the amount of Surplus Cash, an independent auditor mutually selected by Borrower and City shall resolve any disputed items. The cost of the auditor shall be shared equally by Borrower and City.

By not later than November 1 of each year, Borrower shall provide to City a proposed budget for the following calendar year which shall include estimated Project revenue, expenses and debt service, and an estimate of Surplus Cash. City will review the proposed budget and, if acceptable, approve it, which approval shall not be unreasonably withheld, provided, however, if the proposed budget has not been rejected by City within forty-five (45) days of receipt, City shall be deemed to have accepted the budget. If the budget is not acceptable, City shall specify the reasons for disapproval. Once approved, any changes to the budget that exceed ten percent (10%) of the total budget shall require City's prior written consent, which consent shall not be unreasonably withheld. Upon City’s request, the budget shall include a long-term capital needs and replacement reserve plan supported by a physical needs assessment prepared by a third-party at Borrower’s expense.

1.3.1 “Surplus Cash” shall mean for each calendar year during the term hereof, the amount by which Gross Revenue (defined below) exceeds Annual Operating Expenses (defined below) for the Project. Surplus Cash shall also include net cash proceeds realized from any refinancing of the Project as described in Section 1.6 below, and net cash proceeds from any sale of the Project, less fees and closing costs reasonably incurred by Borrower in connection with such sale or refinancing, and any use of proceeds approved by City in the exercise of City’s sole discretion.

1.3.2 “Gross Revenue” shall mean for each calendar year during the term hereof, all revenue, income, receipts and other consideration actually received by Borrower from the operation and leasing of the Project. Gross Revenue shall include, but not be limited to: all rents, fees and charges paid by tenants; Section 8 payments and other rental subsidy payments received for the dwelling units; deposits forfeited by tenants; all cancellation fees, price index adjustments and any other rental adjustments to leases or rental agreements; proceeds from vending and laundry room machines; the proceeds of business interruption or similar insurance; the proceeds of casualty insurance not required to be paid to the holders of Approved Senior

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Loans (provided however, expenditure of such proceeds for repair or restoration of the Project shall be included within Annual Operating Expenses in the year of the expenditure, and with City’s written consent, proceeds of casualty insurance may be excluded from Gross Revenue until the year such proceeds will be expended for repair or restoration of the Project provided that Borrower provides adequate assurance that such proceeds will be expended for such purposes); condemnation awards for a taking of part or all of the Property or the Project for a temporary period; and the fair market value of any goods or services provided to Borrower in consideration for the leasing or other use of any part of the Project. Gross Revenue shall include any release of funds from replacement, operating, and other reserve accounts other than for the purposes for which such reserves were established. Gross Revenue shall not include tenant security deposits, loan or grant proceeds, capital contributions, or similar advances.

1.3.3 “Annual Operating Expenses” shall mean for each calendar year during term hereof, the following costs reasonably and actually incurred for the operation and maintenance of the Project to the extent that they are consistent with an annual independent audit performed by a certified public accountant using generally accepted accounting principles:
property taxes and assessments; debt service currently due and payable on a non-optional basis (excluding debt service due from residual receipts or surplus cash of the Project) on loans which have been approved in writing by the City and which are secured by deeds of trust senior in priority to the Deed of Trust (“Approved Senior Loans”); reasonable property management fees and reimbursements in an amount not to exceed Sixty Dollars ($60) per unit per month, increasing by two percent (2%) annually, but in no event greater than six percent (6%) of the Project’s effective gross income for the applicable year, and paid pursuant to a property management agreement approved by City (or with respect to units subject to a Section 8 Housing Assistance Payments contract, if any, such greater amount as permitted by HUD); premiums for property damage and liability insurance; utility service costs not paid for directly or indirectly by tenants; maintenance and repair costs; fees for licenses and permits required for the operation of the Project; organizational costs (e.g., annual franchise tax payments) and costs associated with accounting, tax preparation and legal fees of Borrower incurred in the ordinary course of business; expenses for security services; advertising and marketing costs; payment of deductibles in connection with casualty insurance claims not paid from reserves; tenant services; the amount of uninsured losses actually replaced, repaired or restored and not paid from reserves; cash deposits into reserves for capital replacements in an amount no more than Five Hundred Forty- Five Dollars $545 per unit per year or such greater amount as reasonably required by the holder of an Approved Senior Loan or as required by a physical needs assessment prepared by a third- party selected or approved by City and prepared at Borrower’s expense; any required annual loan and monitoring fees payable to the City or other public agency lenders; cash deposits into operating reserves in an amount reasonably approved by the City or required by the holder of an Approved Senior Loan or the Investor Limited Partner, but only if the accumulated operating reserve does not exceed four (4) months’ projected Project operating expenses and debt service; and other ordinary and reasonable operating expenses in accordance with the approved annual budget. Commencing on the Project placed in service date, Annual Operating Expenses shall also include a partnership management fee payable to Borrower’s general partner in the maximum annual amount of Twenty-Five Thousand Dollars ($25,000), and during the first fifteen (15) years following the date upon which the Project is placed in service, an asset management fee payable to the Investor Limited Partner in the maximum annual amount of Seven Thousand Five Hundred Dollars ($7,500), each payable in accordance with Borrower’s

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partnership agreement; provided however, for the purpose of calculating Annual Operating Expenses, the partnership management fee and the asset management fee may increase annually by a maximum of three percent (3%), and provided further, that subject to the proviso below, such fees may be included as Annual Operating Expenses only to the extent actually paid in any calendar year. Notwithstanding the immediately preceding sentence, during the fifteen (15) year period commencing upon the Project placed-in-service date, unpaid partnership management fees and asset management fees may accrue for up to a maximum of three (3) years; any otherwise accrued but unpaid portion of the partnership management fee or asset management fee that is not paid on a current basis in any particular year shall be payable only from Borrower’s share of Surplus Cash. The asset management fee payable to the Investor Limited Partner shall be included in Annual Operating Expenses only during the fifteen (15) year period commencing upon the Project placed-in-service date. Following such 15-year period, for the purpose of calculating Surplus Cash, only the partnership management fee shall be includable in Annual Operating Expenses.

1.3.4 EXCLUSIONS FROM ANNUAL OPERATING EXPENSES. For the purpose of calculating Surplus Cash, except to the extent expressly permitted pursuant to Section

1.3.3 above, Annual Operating Expenses shall exclude the following: incentive management fees, developer fees and interest on any deferred developer fees; contributions to Project reserves (except as permitted pursuant to Section 1.3.3); debt service payments on any loan which is not an Approved Senior Loan, including without limitation, unsecured loans, sponsor loans, and loans secured by deeds of trust that are subordinate to the Deed of Trust; depreciation, amortization, depletion and other non-cash expenses; expenses paid for with disbursements from any reserve account; capital expenditures unless approved in advance by City; distributions to partners; any amount paid to any general partner of Borrower or any entity controlling or under common control with the entities that control any general partner of Borrower. Notwithstanding the foregoing limitation regarding payments to Borrower and related parties, the following fees shall be included in Annual Operating Expenses, subject to applicable limitations set forth in Section 1.3.3 above, even if paid to Borrower, an affiliate of Borrower, or a partner of Borrower:
fees paid to a property management agent, resident services agent, or social services agent pursuant to a property management agreement or services agreement approved by City; partnership management fees, asset management fees, and subject to Section 1.3.5, repayment of cash advances by Borrower or its partners to cover Project operating expense deficits or emergency cash needs of the Project. Payments to Borrower, its partners or affiliates in excess of the applicable limitations set forth in Section 1.3.3 or for purposes that are excluded from Annual Operating Expenses pursuant to the terms of this Note, shall not be counted toward Annual Operating Expenses for the purpose of calculating Surplus Cash but may be paid from Borrower’s share of Surplus Cash.

1.3.5 ADJUSTMENT TO OPERATING EXPENSES. Notwithstanding anything to the contrary set forth herein, for the purpose of calculating Surplus Cash, Annual Operating Expenses shall include: (a) the repayment of operating deficit loans provided by Borrower’s limited partner(s) provided however, interest payable on such loans may be included in Annual Operating Expenses only in an amount equivalent to the lesser of (i) interest accrued at the actual interest rate charged for the loan, and (ii) interest accrued at the then-current Applicable Federal Rate, and (b) the amount of any tax credit adjuster that is required to be paid solely from Project cash flow.

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1.4 COST SAVINGS. Within ten (10) business days after the Investor Limited Partner pays its capital contribution following the issuance of the IRS Form 8609 for the Project, Borrower shall pay to the City as a reduction of the outstanding principal balance of this Note, a one-time payment in the amount of Fifty Percent (50%) of Excess Proceeds. “Excess Proceeds” shall mean the sum of all sources of funding received by Borrower to finance the leasing of the Property and the acquisition and rehabilitation of the Project, including without limitation, construction and permanent loans, equity contributions, and grants and loans from private or public agency sources, less the sum of actual uses as shown on the final cost certificate for the Project. For the purpose of calculating Excess Proceeds, Project sources of funding shall take into consideration any reduction or increase in equity contributions by the Investor Limited Partner, including any additional contribution due to an upward credit adjustor. In the event that any “upward credit adjuster” is paid to Borrower that has not been included in the calculation of Excess Proceeds pursuant to this Section, one-half of any such amount shall be paid to City as a reduction of the outstanding principal balance of this Note within thirty (30) days after Borrower’s receipt of such funds. If other public agency lenders require payment of Excess Proceeds, then Excess Proceeds shall be allocated among the City and such lenders pro rata in proportion to each lender’s financial contribution to the Project.

1.5 DUE ON SALE. The entire unpaid principal balance and all interest and other sums accrued hereunder shall be due and payable upon the Transfer absent City consent, of all or any part of the Project or the Property or any interest therein other than a Transfer permitted without City consent pursuant to the Ground Lease. Without limiting the generality of the foregoing, this Note shall not be assumable without City’s prior written consent, which consent may be granted or denied in City’s sole discretion.

1.6 RESYNDICATION/REFINANCING. Borrower shall pay to City as a reduction of the outstanding balance of this Note, the amount equal to fifty percent (50%) of the Net Proceeds of Project refinancing or resyndication in accordance with this Section. For purposes of this Section “Net Proceeds” means all proceeds of refinancing or resyndication less: (a) the amount used to repay the refinanced debt, (b) reasonable out-of-pocket expenses Borrower is required to pay to third parties in connection with the refinancing or resyndication, including fees and closing costs reasonably incurred by Borrower, (c) the reasonable costs paid by Borrower to rehabilitate, construct and install capital improvements to the Project as approved by City in writing (including without limitation reasonable architects’ and engineers’ fees incurred in connection with such capital improvements), (d) any reasonable increase in Project reserves that Borrower is required to fund as a condition to such refinancing or resyndication, provided that Borrower actually funds such reserves and such reserves are held for Borrower’s benefit by a third-party financial institution, (e) if applicable, the reasonable amount required to be paid to purchase the Investor Limited Partner’s interest in the Partnership provided that the Investor Limited Partner that is being replaced is not affiliated with Eden, and provided further that such amount does not exceed the fair market value of such interest as reasonably and customarily determined for such interests in partnerships that own and operate affordable housing developments financed with low-income housing tax credits and located in the greater San Francisco Bay Area, and (f) other uses of proceeds approved by City in the exercise of City’s sole discretion. All Net Proceeds shall be used to pay down the outstanding balance of this Note

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and such other purposes as City may approve in writing in the exercise of City’s discretion. If other public agency lenders require payment of Net Proceeds, then Net Proceeds shall be allocated among the City and such lenders pro rata in proportion to each lender’s financial contribution to the Project.

1.7 PREPAYMENT. Borrower may, without premium or penalty, at any time and from time to time, prepay all or any portion of the outstanding principal balance due under this Note, provided that each such prepayment is accompanied by accrued interest on the amount of principal prepaid calculated to the date of such prepayment. Prepayments shall be applied first to any unpaid late charges and other costs and fees then due, then to accrued but unpaid interest, and then to principal. The Regulatory Agreement shall remain in full force for the entire term thereof regardless of any prepayment of this Note.

1.8 MANNER OF PAYMENT. All payments of principal and interest on this Note shall be made to City at P.O. Box 520, 123 Main Street, Pleasanton, CA 94566 or such other place as City shall designate to Borrower in writing, or by wire transfer of immediately available funds to an account designated by City in writing.

2. DEFAULTS AND REMEDIES.

2.1 EVENTS OF DEFAULT. The occurrence of any one or more of the following events shall constitute an event of default hereunder (“Event of Default”):
(A) Borrower fails to pay when due the principal and interest payable hereunder and such failure continues for ten (10) days after the due date for such payment. (B) Pursuant to or within the meaning of the United States Bankruptcy Code or any other federal or state law relating to insolvency or relief of debtors (“Bankruptcy Law”), Borrower or any general partner thereof (i) commences a voluntary case or proceeding; (ii) consents to the entry of an order for relief against Borrower or any general partner thereof in an involuntary case; (iii) consents to the appointment of a trustee, receiver, assignee, liquidator or similar official for Borrower or any general partner thereof; (iv) makes an assignment for the benefit of its creditors; or (v) admits in writing its inability to pay its debts as they become due. (C) A court of competent jurisdiction enters an order or decree under any Bankruptcy Law that (i) is for relief against Borrower or any general partner thereof in an involuntary case, (ii) appoints a trustee, receiver, assignee, liquidator or similar official for Borrower, or any general partner thereof, or substantially all of such entity’s assets, (iii) orders the liquidation of Borrower or any general partner thereof, or (iv) issues or levies a judgment, writ, warrant of attachment or similar process against the Property or the Project, and in each case the order or decree is not released, vacated, dismissed or fully bonded within sixty (60) days after its issuance.
(D) Borrower shall have voluntarily suspended its business or Borrower shall have been dissolved or terminated.

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(E) The occurrence of a Transfer in violation of the Ground Lease or the Regulatory Agreement.
(F) The holder of any debt instrument secured by a mortgage or deed of trust on the Project or Borrower’s leasehold interest in the Property declares a default and such default remains uncured beyond any applicable cure period such that the holder of such instrument has the right to accelerate payment thereunder.
(G) Borrower fails to maintain insurance on the Property and the Project as required pursuant to the City Documents and Borrower fails to cure such default within five (5) days. (H) Subject to Borrower’s right to contest the following charges pursuant to the City Documents, if Borrower fails to pay taxes or assessments due on the Property or the Project or fails to pay any other charge that may result in a lien on the Property or the Project, and Borrower fails to cure such default within twenty (20) days of the date of delinquency, but in all events prior to the date upon which the holder of any such tax or other lien has the right to foreclose thereon.
(I) If any Borrower representation or warranty contained in any City Document, or any certificate furnished in connection therewith, proves to have been false or misleading in any adverse respect when made and continues to be adverse to the City. (J) An Event of Default shall have been declared under the Ground Lease or any other City Document, and remains uncured beyond the expiration of the applicable cure period. (K) Reserved.

2.2 REMEDIES. Upon the occurrence of an Event of Default hereunder, City may, at its option (i) by written notice to Borrower, declare the entire unpaid principal balance of this Note, together with all accrued interest thereon and all sums due hereunder, immediately due and payable regardless of any prior forbearance, (ii) exercise any and all rights and remedies available to it under applicable law, and (iii) exercise any and all rights and remedies available to City under this Note and the other City Documents, including without limitation, the right to pursue foreclosure under the Deed of Trust. Borrower shall pay all reasonable costs and expenses incurred by or on behalf of City including, without limitation, reasonable attorneys' fees, incurred in connection with City's enforcement of this Note and the exercise of any or all of its rights and remedies hereunder and all such sums shall be a part of the indebtedness secured by the Deed of Trust. The rights and remedies of City under this Note shall be cumulative and not alternative.

2.3 DEFAULT RATE. Upon the occurrence of an Event of Default, interest shall automatically be increased without notice to the rate of the lesser of ten percent (10%) per annum or the maximum rate permitted by law (the “Default Rate”); provided however, if any payment due hereunder is not paid when due, the Default Rate shall apply commencing upon the due date for such payment. When Borrower is no longer in default, the Default Rate shall no longer apply, and the interest rate shall once again be the rate specified in Section 1.1 of this Note.

Notwithstanding the foregoing provisions, if the interest rate charged exceeds the maximum

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legal rate of interest, the rate shall be the maximum rate permitted by law. The imposition or acceptance of the Default Rate shall in no event constitute a waiver of a default under this Note or prevent City from exercising any of its other rights or remedies.

2.4 LIMITED PARTNERS RIGHT TO CURE. Borrower’s limited partner(s) shall have the right to cure any default of Borrower hereunder upon the same terms and conditions afforded to Borrower. Any cure tendered by a limited partner of Borrower shall be deemed to be a cure by Borrower and shall be accepted or rejected on the same basis as if tendered by Borrower.

3. MISCELLANEOUS.

3.1 WAIVERS; AMENDMENTS; BORROWER’S WAIVERS. No waiver by City of any right or remedy under this Note shall be effective unless in a writing signed by City.

Neither the failure nor any delay in exercising any right, power or privilege under this Note will operate as a waiver of such right, power or privilege, and no single or partial exercise of any such right, power or privilege by City will preclude any other or further exercise of such right, power or privilege or the exercise of any other right, power or privilege. No waiver that may be given by City will be applicable except in the specific instance for which it is given. No notice to or demand on Borrower will be deemed to be a waiver of any obligation of Borrower or of the right of City to take further action without notice or demand as provided in this Note. There shall be no amendment to or modification of this Note except by written instrument executed by Borrower and City.

To the maximum extent permitted by applicable law Borrower hereby waives presentment, demand, protest, notices of dishonor and of protest and all defenses and pleas on the grounds of any extension or extensions of the time of payment or of any due date under this Note, in whole or in part, whether before or after maturity and with or without notice.

3.2 NOTICES. Any notice required or permitted to be given hereunder shall be given in accordance with the Ground Lease.

3.3 SEVERABILITY. If any provision in this Note is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Note will remain in full force and effect. Any provision of this Note held invalid or unenforceable only in part or degree will remain in full force and effect to the extent not held invalid or unenforceable.

3.4 GOVERNING LAW; VENUE. This Note shall be governed by the laws of the State of California without regard to principles of conflicts of laws. Any legal action filed in connection with this Note shall be filed in the Superior Court of Alameda County, California, or in the Federal District Court for the Northern District of California.

3.5 BINDING ON SUCCESSORS. This Note shall bind Borrower and its successors and assigns and shall accrue to the benefit of City and its successors and assigns.

3.6 SECTION HEADINGS, CONSTRUCTION. The headings of Sections in this Note are provided for convenience only and will not affect its construction or interpretation.

4854-3151-6602 v3 10

3.7 RELATIONSHIP OF THE PARTIES. The relationship of Borrower and City under this Note is solely that of borrower and lender, and the indebtedness evidenced by this Note (the “Loan”) and secured by the Deed of Trust will in no manner make City the partner or joint venturer of Borrower.

3.8 TIME IS OF THE ESSENCE. Time is of the essence with respect to every provision of this Note.

3.9 NONRECOURSE. Except as expressly provided in this Section 3.9, neither Borrower nor its partners shall have personal liability for payment of the principal of, or interest on, this Note, and the sole recourse of City with respect to the payment of the principal of, and interest on, this Note shall be to the Project, the Property and any other collateral held by City as security for this Note; provided however, nothing contained in the foregoing limitation of liability shall:
(A) impair the enforcement against all such security for the Loan of all the rights and remedies of the City under the Deed of Trust and any financing statements City files in connection with the Loan as each of the foregoing may be amended, modified, or restated from time to time; (B) impair the right of City to bring a foreclosure action, action for specific performance or other appropriate action or proceeding to enable City to enforce and realize upon the Deed of Trust, the interest in the Project and the Property created thereby and any other collateral given to City in connection with the indebtedness evidenced hereby and to name the Borrower as party defendant in any such action;
(C) be deemed in any way to impair the right of the City to assert the unpaid principal amount of the Loan as a demand for money within the meaning of Section 431.70 of the California Code of Civil Procedure or any successor provision thereto; (D) constitute a waiver of any right which City may have under any bankruptcy law to file a claim for the full amount of the indebtedness owed to City hereunder or to require that the Project and the Property shall continue to secure all of the indebtedness owed to City hereunder in accordance with this Note and the Deed of Trust; or
(E) limit or restrict the ability of City to seek or obtain a judgment against Borrower to enforce against Borrower and its general partners to:
(1) recover under any provision of any City Document that obligates Borrower to indemnify City, or
(2) recover from Borrower and its general partners compensatory damages as well as other costs and expenses incurred by City (including without limitation reasonable attorneys’ fees and expenses) arising as a result of the occurrence of any of the following:
(a) any fraud or intentional misrepresentation on the part of the Borrower, any general partner thereof, or any officer, director or authorized representative of Borrower or any general partner thereof in connection with the request for or

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creation of the Loan, or in any City Document, or in connection with any request for any action or consent by City in connection with the Loan; (b) any failure to maintain insurance on the Property and the Project as required pursuant to the City Documents;
(c) failure to pay taxes, assessments or other charges which may become liens on the Property or the Project (subject to any right to contest as set forth in the Ground Lease);
(d) the presence of Hazardous Materials on the Property or other violation of the Borrower’s obligations under the Ground Lease or the Deed of Trust pertaining to environmental matters;
(e) the occurrence of any act or omission of Borrower that results in waste to or of the Project or the Property and which has a material adverse effect on the value of the Project or the Property;
(f) [reserved]
(g) the removal or disposal of any personal property or fixtures or the retention of rents, insurance proceeds, or condemnation awards in violation of the Deed of Trust;
(h) the material misapplication of the proceeds of any insurance policy or award resulting from condemnation or the exercise of the power of eminent domain or by reason of damage, loss or destruction to any portion of the Project or the Property; and
(i) the failure of Borrower to pay all amounts payable under this Note in full if Borrower Transfers the Property in violation of the Ground Lease or the Regulatory Agreement.

SIGNATURE ON FOLLOWING PAGE.

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IN WITNESS WHEREOF, Borrower has executed this Amended and Restated Secured Promissory Note as of the date first written above.

BORROWER:

Ridge View Commons II Associates, L.P., a California limited partnership

By: Ridge View Commons LLC,
a California limited liability company,
its general partner

By: Eden Investments, Inc.,
a California nonprofit public benefit corporation,
its sole member/manager

By: ____________________________
Andrea Osgood, Chief of Real Estate Development and
Executive Vice President

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RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:

City of Pleasanton
P.O. Box 520
123 Main Street
Pleasanton, CA 94566
Attention: City Manager

EXEMPT FROM RECORDING FEES PER
GOVERNMENT CODE §§6103, 27383, 27388.1

(SPACE ABOVE THIS LINE RESERVED FOR RECORDER’S USE)
APN: 947-0008-010

LEASEHOLD DEED OF TRUST, ASSIGNMENT OF RENTS,

SECURITY AGREEMENT AND FIXTURE FILING

THIS LEASEHOLD DEED OF TRUST, ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND FIXTURE FILING ( “Deed of Trust”) dated as of ___________, 2024, is executed by Ridge View Commons II Associates, L.P., a California limited partnership (“Trustor”) to WFG National Title Insurance Company as trustee (“Trustee”), for the benefit of the City of Pleasanton, a municipal corporation (“Beneficiary”).

RECITALS
A. The City owns fee title to the land described in Exhibit A attached hereto and incorporated herein by this reference (the “Land”). The Land is located in the City of Pleasanton, Alameda County, California. Pursuant to that certain Ground Lease dated as of the date hereof, and executed by and between City and Trustor (“Ground Lease”), Trustor holds a leasehold interest in the Land. Trustor intends to rehabilitate, own and operate an affordable multifamily residential development on the Land (the “Project”). Pursuant to the Ground Lease, during the term of the Ground Lease, Trustor is the owner of all Improvements presently located or to be constructed on the Land. A memorandum of the Ground Lease has been recorded in the Official Records of Alameda County (“Official Records”).

B. City provided certain loans to Trustor’s predecessor in interest in connection with the development of the Project (collectively, the “Loan”). With Beneficiary’s consent, Trustor has assumed the obligation to repay the Loan. In connection therewith, Trustor has executed and delivered to City an Amended and Restated Secured Promissory Note (the “Note”) payable to City in the original principal amount of [$16,632,775].

C. Trustor and Beneficiary have also executed an Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants (the “Regulatory Agreement”) dated as of the date hereof, and which will be recorded in the Official Records of Alameda County (“Official Records”) substantially concurrently herewith. Among other provisions, the Regulatory Agreement requires the residential units in the Project to be rented to Eligible Households at Affordable Rents (as defined in the Regulatory Agreement).

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D. As a condition precedent to allowing Trustor to assume the obligation to repay the Loan, Beneficiary has required that Trustor enter into this Deed of Trust and grant to Trustee for the benefit of Beneficiary, a lien and security interest in the Project and Trustor’s leasehold interest in the Land and interests in the Property (defined below) to secure repayment of the Note and performance of Trustor’s obligations under the City Documents (defined below).

NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, it is agreed as follows.

1. Grant in Trust. In consideration of the foregoing and for the purpose of securing payment and performance of the Secured Obligations defined and described in Section 2, Trustor hereby irrevocably and unconditionally grants, conveys, transfers and assigns to Trustee, in trust for the benefit of Beneficiary, with power of sale and right of entry and possession, all estate, right, title and interest which Trustor now has or may later acquire in and to the Land, and all of the following, whether presently owned or hereafter acquired:
a. All buildings, structures, and improvements, now or hereafter located or constructed on the Land (“Improvements”);
b. All appurtenances, easements, rights of way, pipes, transmission lines or wires and other rights used in connection with the Land or the Improvements or as a means of access thereto, whether now or hereafter owned or constructed or placed upon or in the Land or Improvements and all existing and future privileges, rights, franchises and tenements of the Land, including all minerals, oils, gas and other commercially valuable substances which may be in, under or produced from any part of the Land, and all water rights, rights of way, gores or strips of land, and any land lying in the streets, ways, and alleys, open or proposed, in front of or adjoining the Land and Improvements (collectively, “Appurtenances”); c. All machinery, equipment, fixtures, goods and other personal property of the Trustor, whether moveable or not, now owned or hereafter acquired by the Trustor and now or hereafter located at or used in connection with the Land, the Improvements or Appurtenances, and all improvements, restorations, replacements, repairs, additions or substitutions thereto (collectively, “Equipment”);
d. All existing and future leases, subleases, licenses, and other agreements relating to the use or occupancy of all or any portion of the Land or Improvements (collectively, “Leases”), all amendments, extensions, renewals or modifications thereof, and all rent, royalties, or other payments which may now or hereafter accrue or otherwise become payable thereunder to or for the benefit of Trustor, including but not limited to security deposits (collectively, “Rents”); e. All insurance proceeds and any other proceeds from the Land, Improvements, Appurtenances, Equipment, Leases, and Rents, including without limitation, all deposits made with or other security deposits given to utility companies, all claims or demands relating to insurance awards which the Trustor now has or may hereafter acquire, including all advance payments of insurance premiums made by Trustor, and all condemnation awards or payments now or later made in connection with any condemnation or eminent domain proceeding (“Proceeds”);

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f. All revenues, income, rents, royalties, payments and profits produced by the Land, Improvements, Appurtenances and Equipment, whether now owned or hereafter acquired by Trustor (“Gross Revenues”);
g. All architectural, structural and mechanical plans, specifications, design documents and studies produced in connection with development of the Land and construction of the Improvements (collectively, “Plans”); and

h. All interests and rights in any private or governmental grants, subsidies, loans or other financing provided in connection with development of the Land and construction of the Improvements (collectively, “Financing”).

All of the above-referenced interests of Trustor in the Land, Improvements, Appurtenances, Equipment, Leases, Rents, Proceeds, Gross Revenues, Plans and Financing as hereby conveyed to Trustee or made subject to the security interest herein described are collectively referred to herein as the “Property.”

2. Obligations Secured. This Deed of Trust is given for the purpose of securing payment and performance of the following (collectively, the “Secured Obligations”): (i) all present and future indebtedness evidenced by the Note and any amendment thereof, including principal, interest and all other amounts payable under the terms of the Note; (ii) all present and future obligations of Trustor to Beneficiary under the Loan Documents (defined below); (iii) all additional present and future obligations of Trustor to Beneficiary under any other agreement or instrument acknowledged by Trustor (whether existing now or in the future) which states that it is or such obligations are, secured by this Deed of Trust; (iv) all obligations of Trustor to Beneficiary under all modifications, supplements, amendments, renewals, or extensions of any of the foregoing, whether evidenced by new or additional documents; and (v) reimbursement of all amounts advanced by or on behalf of Beneficiary to protect Beneficiary’s interests under this Deed of Trust or any other City Document. The Ground Lease, the Note, the Regulatory Agreement, and this Deed of Trust as any of the foregoing instruments may be modified, supplemented, amended, renewed, or extended, are herein collectively referred to as the “City Documents.”

3. Assignment of Rents, Issues, and Profits. Trustor hereby irrevocably, absolutely, presently and unconditionally assigns to Beneficiary the Rents, royalties, issues, profits, revenue, income and proceeds of the Property. This is an absolute assignment and not an assignment for security only. Beneficiary hereby confers upon Trustor a license to collect and retain such Rents, royalties, issues, profits, revenue, income and proceeds as they become due and payable prior to any Event of Default hereunder. Upon the occurrence of any such Event of Default, Beneficiary may terminate such license without notice to or demand upon Trustor and without regard to the adequacy of any security for the indebtedness hereby secured, and may either in person, by agent, or by a receiver to be appointed by a court, enter upon and take possession of the Property or any part thereof, and sue for or otherwise collect such rents, issues, and profits, including those past due and unpaid, and apply the same, less costs and expenses of operation and collection, including reasonable attorneys’ fees, to any indebtedness secured hereby, and in such order as Beneficiary may determine. Beneficiary’s right to the rents, royalties, issues, profits, revenue, income and proceeds of the Property does not depend upon whether or not Beneficiary

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takes possession of the Property. The entering upon and taking possession of the Property, the collection of such rents, issues, and profits, and the application thereof as aforesaid, shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. If an Event of Default occurs while Beneficiary is in possession of all or part of the Property and/or is collecting and applying Rents as permitted under this Deed of Trust, Beneficiary, Trustee and any receiver shall nevertheless be entitled to exercise and invoke every right and remedy afforded any of them under this Deed of Trust and at law or in equity, including the right to exercise the power of sale granted hereunder. Regardless of whether or not Beneficiary, in person or by agent, takes actual possession of the Land or the Improvements, Beneficiary shall not be deemed to be a “mortgagee in possession,” shall not be responsible for performing any obligation of Trustor under any Lease, shall not be liable in any manner for the Property, or the use, occupancy, enjoyment or operation of any part of it, and shall not be responsible for any waste committed by Trustor, lessees or any third parties, or for dangerous or defective condition of the Property or any negligence in the management, repair or control of the Property. Absent Beneficiary’s written consent, Trustor shall not accept prepayment of Rents for any rental period exceeding one month.

4. Security Agreement. Trustor intends this Deed of Trust to create a lien on Trustor’s interest in the Property, and an absolute assignment of the Rents and Leases, all in favor of Beneficiary. To the extent that any of the Property is, or is determined under applicable law, to be personal property or fixtures, Trustor as debtor hereby grants to Beneficiary as secured party a security interest in all such Property to secure payment and performance of the Secured Obligations. This Deed of Trust constitutes a security agreement under the California Uniform Commercial Code, as amended or recodified from time to time (the “UCC”), covering all such Property. To the extent such Property is not real property encumbered by the lien granted above, and is not absolutely assigned by the assignment set forth above, Trustor intends that such Property shall constitute “proceeds, products, offspring, rents, or profits” (as defined in and for the purposes of Section 552(b) of the United States Bankruptcy Code, as such section may be modified or supplemented) of the Land and Improvements.

5. Financing Statements. Pursuant to the UCC, Trustor, as debtor, hereby authorizes Beneficiary, as secured party, to file such financing statements and amendments thereof and such continuation statements with respect thereto as Beneficiary may deem appropriate to perfect and preserve Beneficiary's security interest in the Property and Rents, without requiring any signature or further authorization by Trustor. If requested by Beneficiary, Trustor shall pay all fees and costs that Beneficiary may incur in filing such documents in public offices and in obtaining such record searches as Beneficiary may reasonably require. If any financing statement or other document is filed in the records normally pertaining to personal property, that filing shall not be construed as in any way derogating from or impairing this Deed of Trust or the rights or obligations of the parties under it.

Everything used in connection with the Property and/or adapted for use therein and/or which is described or reflected in this Deed of Trust is, and at all times and for all purposes and in all proceedings both legal or equitable shall be regarded as part of the estate encumbered by this Deed of Trust irrespective of whether (i) any such item is physically attached to the Improvements, (ii) serial numbers are used for the better identification of certain equipment items capable of being thus identified in a recital contained herein or in any list filed with

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Beneficiary, or (iii) any such item is referred to or reflected in any such financing statement so filed at any time. Similarly, the mention in any such financing statement of (1) rights in or to the proceeds of any fire and/or hazard insurance policy, or (2) any award in eminent domain proceedings for a taking or for lessening of value, or (3) Trustor's interest as lessor in any present or future lease or rights to income growing out of the use and/or occupancy of the property conveyed hereby, whether pursuant to lease or otherwise, shall not be construed as in any way altering any of the rights of Beneficiary as determined by this instrument or impugning the priority of Beneficiary’s lien granted hereby or by any other recorded document. Such mention in any financing statement is declared to be solely for the protection of Beneficiary in the event any court or judge shall at any time hold, with respect to the matters set forth in the foregoing clauses (1), (2), and (3), that notice of Beneficiary's priority of interest is required in order to be effective against a particular class of persons, including but not limited to the federal government and any subdivisions or entity of the federal government.

6. Fixture Filing. This Deed of Trust is intended to be and constitutes a fixture filing pursuant to the provisions of the UCC with respect to all of the Property constituting fixtures, is being recorded as a fixture financing statement and filing under the UCC, and covers property, goods and equipment which are or are to become fixtures related to the Land and the Improvements. Trustor covenants and agrees that this Deed of Trust is to be filed in the real estate records of Santa Clara County and shall also operate from the date of such filing as a fixture filing in accordance with Section 9502 and other applicable provisions of the UCC. This Deed of Trust shall also be effective as a financing statement covering minerals or the like (including oil and gas) and accounts subject to the UCC, as amended. Trustor shall be deemed to be the “debtor” and Beneficiary shall be deemed to be the “secured party” for all purposes under the UCC.

7. Trustor’s Representations, Warranties and Covenants; Rights and Duties of the Parties.

7.1 Representations and Warranties. Trustor represents and warrants that: (i) Trustor lawfully possesses and holds a leasehold interest in the Land, (ii) Trustor will hold a fee interest in the Improvements that Trustor will cause to be constructed on the Land pursuant to the Ground Lease; (iii) Trustor has good and marketable title to or a leasehold interest in all of the Property; (iv) other than as limited by the City Documents, Trustor has the full and unlimited power, right and authority to encumber Trustor’s interests in the Property with this Deed of Trust and assign the Rents as contemplated herein; (v) this Deed of Trust creates a valid lien on Trustor’s entire interest in the Property subject only to encumbrances of record and senior liens permitted pursuant to the City Documents or otherwise approved in writing by Beneficiary (“Permitted Encumbrances”); (vi) except with respect to Permitted Encumbrances, Trustor will hold a leasehold interest in the Land and a fee interest in the Improvements free and clear of all deeds of trust, mortgages, security agreements, reservations of title or conditional sales contracts, (vii) there is no financing statement affecting the Property or any part thereof on file in any public office other than as disclosed in writing to Beneficiary; and (vii) the correct address of Trustor’s chief executive office is specified in Section 11.2.

7.2 Condition of Property. Trustor represents and warrants that except as disclosed to Beneficiary in writing, as of the date hereof: (i) Trustor has not received any notice from any governmental authority of any threatened or pending zoning, building, fire, or health and safety

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code violation, or violation of other governmental regulations concerning the Property that has not previously been corrected, and except as disclosed to Beneficiary in writing, no condition on the Land violates any health, safety, fire, environmental, building, or other federal, state or local law, ordinance or regulation; (ii) except as disclosed to Beneficiary in writing, no contracts, licenses, leases or commitments regarding the maintenance or use of the Property or allowing any third party rights to use the Property are in force; (iii) there are no threatened or pending actions, suits, or administrative proceedings against or affecting the Property or any portion thereof or the interest of Trustor in the Property; (iv) there are no threatened or pending condemnation, eminent domain, or similar proceedings affecting the Property or any portion thereof; (v) Trustor has not received any notice from any insurer of defects of the Property which have not been corrected; (vi) there are no natural or artificial conditions upon the Land or any part thereof that could result in a material and adverse change in the condition of the Land; (vii) all information that Trustor has delivered to Beneficiary, either directly or through Trustor's agents, is accurate and complete; and (viii) Trustor or Trustor’s agents have disclosed to Beneficiary all material facts concerning the Property.

7.3 Authority. Trustor represents and warrants that this Deed of Trust and all other documents delivered or to be delivered by Trustor in connection herewith: (a) have been duly authorized, executed, and delivered by Trustor; (b) are binding obligations of Trustor; and (c) do not violate the provisions of any agreement to which Trustor is a party or which affects the Property. Trustor further represents and warrants that there are no pending, or to Trustor’s knowledge, threatened actions or proceedings before any court or administrative agency which may adversely affect Trustor’s ownership of, or interest in, the Property or part thereof.

7.4 Payment and Performance of Secured Obligations. Trustor shall promptly pay when due the principal and all interest due on the indebtedness evidenced by the Note, and shall promptly pay and perform all other obligations of Trustor arising in connection with the Secured Obligations, the City Documents, in accordance with the respective terms thereof.

7.5 Preservation and Maintenance of Property; Compliance with Laws. Trustor covenants that it shall keep the Land and Improvements in good repair and condition, reasonable wear and tear excepted, and from time to time shall make necessary repairs, renewals and replacements thereto so that the Property shall be preserved and maintained. Trustor covenants that it shall comply with all federal, state and local laws, regulations, ordinances and rules applicable to the Property and the Project, including without limitation all applicable requirements of state and local building codes and regulations, all applicable prevailing wage laws, and all applicable statutes and regulations relating to accessibility for the disabled. Trustor shall not remove, demolish or materially alter any Improvement without Beneficiary’s consent, shall complete or restore promptly and in good and workmanlike manner any building, fixture or other improvement which may be constructed, damaged, or destroyed thereon, and shall pay when due all claims for labor performed and materials furnished therefor, subject to Trustor’s rights under Section 7.8 below. Trustor shall use the Land and the Improvements solely for purposes authorized by the City Documents, shall not commit or allow waste of the Property, and shall not commit or allow any act upon or use of the Property which would violate any applicable law or order of any governmental authority, nor shall Trustor bring on or keep any article on the Property or cause or allow any condition to exist thereon which could invalidate or

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which would be prohibited by any insurance coverage required to be maintained on the Property pursuant to the City Documents.

7.6 Restrictions on Conveyance and Encumbrance; Acceleration. It shall be an Event of Default hereunder if the Property or the Improvements, or any part thereof, or interest therein is sold, assigned, conveyed, transferred, hypothecated, leased, licensed, or encumbered in violation of the City Documents or if any other Transfer (as defined in the Loan Agreement) occurs in violation of the City Documents. If any such Transfer shall occur in violation of such requirements, without limiting the provisions of Section 8 hereof, all obligations secured by this Deed of Trust, irrespective of the maturity dates of such obligations, shall at the option of Beneficiary, and without demand, immediately become due and payable, subject to any applicable cure period.

7.7 Inspections; Books and Records. Beneficiary and its agents and representatives shall have the right at any reasonable time upon reasonable notice to enter upon the Land and inspect the Property to ensure compliance with the City Documents. Trustor shall maintain complete and accurate books of account and other records (including copies of supporting bills and invoices) adequate to document the operation of the Property, together with copies of all written contracts, Leases and other instruments which affect the Property. The books, records, contracts, Leases and other instruments shall be subject to examination and inspection by Beneficiary at any reasonable time following at least two (2) business days’ prior notice.

7.8 Charges, Liens, Taxes and Assessments. Trustor shall pay before delinquency all taxes, levies, assessments and other charges affecting the Property that are (or if not paid may become) a lien on all or part of the Property. Trustor may, at Trustor’s expense, contest the validity or application of any tax, levy, assessment or charge affecting the Property by appropriate legal proceedings promptly initiated and conducted in good faith and with due diligence, provided that (i) Beneficiary is reasonably satisfied that neither the Property nor any part thereof or interest therein will be in danger of being sold, forfeited, or lost as a result of such contest, and (ii) Trustor shall have posted a bond or furnished other security as may reasonably be required from time to time by Beneficiary; and provided further that Trustor shall timely make any payment necessary to prevent a lien foreclosure, sale, forfeiture or loss of the Property.

7.9 Subrogation. Beneficiary shall be subrogated to the liens of all encumbrances, whether released of record or not, which are discharged in whole or in part by Beneficiary in accordance with this Deed of Trust.

7.10 Hazard, Liability and Workers’ Compensation Insurance. At all times during the term hereof, at Trustor’s expense, Trustor shall keep the Improvements and personal property now existing or hereafter located on the Property insured against loss by fire, vandalism and malicious mischief by a policy of standard fire and extended all-risk insurance. The policy shall be written on a full replacement value basis and shall name Beneficiary as loss payee as its interest may appear. The full replacement value of the improvements to be insured shall be determined by the company issuing the policy at the time the policy is initially obtained. Not more frequently than once every two (2) years, either the Trustor or the Beneficiary shall have the right to notify the other party that it elects to have the replacement value redetermined by the insurance company. Subject to the rights of any senior lienholder, and the terms of the Ground

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Lease, the proceeds collected under any insurance policy may be applied by Beneficiary to any indebtedness secured hereby and in such order as Beneficiary may determine, or at the option of Beneficiary, the entire amount so collected or any part thereof may be released to Trustor for repair or replacement of the Improvements; provided however, if Trustor is not in default under the City Documents, the proceeds shall be released to Trustor to repair or rebuild the Project provided that sufficient additional sources of financing to complete such repair or rebuilding are available to complete such work and provided further, that all senior lienholders also permit such proceeds to be used for such purposes. Such application or release shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice.

7.10.1 Trustor shall at all times during the term hereof, maintain insurance coverage in the amounts and in accordance with the requirements specified in the City Documents, and shall otherwise comply with all requirements pertaining to insurance specified in the City Documents.

7.10.2 Trustor shall file with Beneficiary prior to the commencement of the term hereof, certificates (or such other proof as Beneficiary may require, including without limitation, copies of the required insurance policies) evidencing each of the insurance policies and endorsements thereto as required by the City Documents, and such certificates (or policies) shall provide that at least thirty (30) days’ prior written notice shall be provided to Beneficiary prior to the expiration, cancellation or change in coverage under each such policy.

7.10.3 If any insurance policy required by the City Documents is canceled or the coverage provided thereunder is reduced, Trustor shall, within five (5) days after receipt of written notice of such cancellation or reduction in coverage, but in no event later than the effective date of cancellation or reduction, file with Beneficiary a certificate showing that the required insurance has been reinstated or provided through another insurance company or companies. Upon failure to so file such certificate, Beneficiary may, without further notice and at its option, procure such insurance coverage at Trustor’s expense, and Trustor shall promptly reimburse Beneficiary for such expense upon receipt of billing from Beneficiary.

7.10.4 The insurance policies required hereunder shall be issued by insurance companies authorized to do business in the State of California with a financial rating of at least A VII status as rated in the most recent edition of Best's Key Rating Guide. Each policy of insurance shall contain an endorsement requiring the insurer to provide at least thirty (30) days written notice to Beneficiary prior to change in coverage, cancellation or expiration thereof.

7.11 Hazardous Materials. Trustor represents and warrants that except as disclosed to Beneficiary in writing, as of the date hereof to the best knowledge of Trustor: (i) the Land is free and has always been free of Hazardous Materials (as defined below) and is not and has never been in violation of any Environmental Law (as defined below); (ii) there are no buried or partially buried storage tanks located on the Land; (iii) Trustor has received no notice, warning, notice of violation, administrative complaint, judicial complaint, or other formal or informal notice alleging that conditions on the Land are or have ever been in violation of any Environmental Law or informing Trustor that the Land is subject to investigation or inquiry regarding Hazardous Materials on the Land or the potential violation of any Environmental Law; (iv) there is no monitoring program required by the Environmental Protection Agency or any

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other governmental agency concerning the Land; (v) no toxic or hazardous chemicals, waste, or substances of any kind have ever been spilled, disposed of, or stored on, under or at the Land, whether by accident, burying, drainage, or storage in containers, tanks, holding areas, or any other means; (vi) the Land has never been used as a dump or landfill; and (vii) Trustor has disclosed to Beneficiary all information, records, and studies in Trustor’s possession or reasonably available to Trustor relating to the Land concerning Hazardous Materials.

Trustor shall not cause or permit any Hazardous Material (as defined below) to be brought upon, kept, stored or used in, on, under, or about the Land by Trustor, its agents, employees, contractors or invitees except for incidental supplies ordinarily used in connection with the construction, rehabilitation, maintenance, repair, and operation of multifamily residential developments and used, stored, and disposed of in compliance with all applicable laws, and shall not cause any release of Hazardous Materials into, onto, under or through the Land. If any Hazardous Material is discharged, released, dumped, or spilled in, on, under, or about the Land and results in any contamination of the Land or adjacent property, or otherwise results in the release or discharge of Hazardous Materials in, on, under or from the Land, Trustor shall promptly take all actions at its sole expense as are necessary to comply with all Environmental Laws (as defined below).

To the greatest extent permitted by law, Trustor shall indemnify, defend (with counsel reasonably acceptable to Beneficiary), and hold Beneficiary and its elected and appointed officials, officers, agents and employees (collectively, “Indemnitees”) harmless from and against any and all loss, claim, liability, damage, demand, judgment, order, penalty, fine, injunctive or other relief, cost, expense (including reasonable fees and expenses of attorneys, expert witnesses, and other professionals advising or assisting Beneficiary), action, or cause of action (all of the foregoing, hereafter individually “Claim” and collectively “Claims”) arising in connection with the breach of Trustor’s covenants and obligations set forth in this Section 7.11 or otherwise arising in connection with the presence or release of Hazardous Materials in, on, under, or from the Property, except to the extent caused by the gross negligence or willful misconduct of the Indemnitees. The foregoing indemnity includes, without limitation, all costs of investigation, assessment, containment, removal, remediation of any kind, and disposal of Hazardous Materials, all costs of determining whether the Land is in compliance with Environmental Laws, all costs associated with bringing the Land into compliance with all applicable Environmental Laws, and all costs associated with claims for damages or injury to persons, property, or natural resources.

Without limiting the generality of the foregoing, Trustor shall, at Trustor’s own cost and expense, do all of the following:
a. pay or satisfy any judgment or decree that may be entered against any Indemnitee or Indemnitees in any legal or administrative proceeding incident to any matters against which Indemnitees are entitled to be indemnified under this Deed of Trust; b. reimburse Indemnitees for any expenses paid or incurred in connection with any matters against which Indemnitees are entitled to be indemnified under this Deed of Trust; and c. reimburse Indemnitees for any and all expenses, including without limitation out- of-pocket expenses and fees of attorneys and expert witnesses, paid or incurred in connection

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with the enforcement by Indemnitees of their rights under this Deed of Trust, or in monitoring and participating in any legal or administrative proceeding.

Trustor’s obligation to indemnify the Indemnitees shall not be limited or impaired by any of the following, or by any failure of Trustor to receive notice of or consideration for any of the following: (i) any amendment or modification of any City Document; (ii) any extensions of time for performance required by any City Document; (iii) any provision in any of the City Documents limiting Beneficiary's recourse to property securing the Secured Obligations, or limiting the personal liability of Trustor, or any other party for payment of all or any part of the Secured Obligations; (iv) the accuracy or inaccuracy of any representation and warranty made by Trustor under this Deed of Trust or by Trustor or any other party under any City Document, (v) the release of Trustor or any other person, by Beneficiary 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 the Secured Obligations; and (vii) Beneficiary’s failure to properly perfect any lien or security interest given as security for the Secured Obligations.

The provisions of this Section 7.11 shall be in addition to any and all other obligations and liabilities that Trustor may have under applicable law, and each Indemnitee shall be entitled to indemnification under this Section without regard to whether Beneficiary or that Indemnitee has exercised any rights against the Property or any other security, pursued any rights against any guarantor or other party, or pursued any other rights available under the City Documents or applicable law. The obligations of Trustor to indemnify the Indemnitees under this Section shall survive any repayment or discharge of the Secured Obligations, any foreclosure proceeding, any foreclosure sale, any delivery of any deed in lieu of foreclosure, and any release of record of the lien of this Deed of Trust.

Without limiting any of the remedies provided in this Deed of Trust, Trustor acknowledges and agrees that each of the provisions in this Section 7.11 is an environmental provision (as defined in Section 736(f)(2) of the California Code of Civil Procedure) made by Trustor relating to real property security (the “Environmental Provisions”), and that Trustor's failure to comply with any of the Environmental Provisions will be a breach of contract that will entitle Beneficiary to pursue the remedies provided by Section 736 of the California Code of Civil Procedure (“Section 736”) for the recovery of damages and for the enforcement of the Environmental Provisions. Pursuant to Section 736, Beneficiary's action for recovery of damages or enforcement of the Environmental Provisions shall not constitute an action within the meaning of Section 726(a) of the California Code of Civil Procedure or constitute a money judgment for a deficiency or a deficiency judgment within the meaning of Sections 580a, 580b, 580d, or 726(b) of the California Code of Civil Procedure. “Hazardous Materials” means any substance, material or waste which is or becomes regulated by any federal, state or local governmental authority, and includes without limitation (i) petroleum or oil or gas or any direct or indirect product or by-product thereof; (ii) asbestos and any material containing asbestos; (iii) any substance, material or waste regulated by or listed (directly or by reference) as a “hazardous substance”, “hazardous material”, “hazardous waste”, “toxic waste”, “toxic pollutant”, “toxic substance”, “solid waste” or “pollutant or contaminant” in or pursuant to, or similarly identified as hazardous to human health or the environment in or pursuant to, the Toxic Substances Control Act [15 U.S.C. Section 2601, et seq.]; the

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Comprehensive Environmental Response, Compensation and Liability Act [42 U.S.C. Section 9601, et seq.], the Hazardous Materials Transportation Authorization Act [49 U.S.C. Section 5101, et seq.], the Resource Conservation and Recovery Act [42 U.S.C. Section 6901, et seq.], the Federal Water Pollution Control Act [33 U.S.C. Section 1251], the Clean Air Act [42 U.S.C.

Section 7401, et seq.], the California Underground Storage of Hazardous Substances Act [California Health and Safety Code Section 25280, et seq.], the California Hazardous Substances Account Act [California Health and Safety Code Section 25300, et seq.], the California Hazardous Waste Act [California Health and Safety Code Section 25100, et seq.], the California Safe Drinking Water and Toxic Enforcement Act [California Health and Safety Code Section 25249.5, et seq.], and the Porter-Cologne Water Quality Control Act [California Water Code Section 13000, et seq.], as they now exist or are hereafter amended, together with any regulations promulgated thereunder; (iv) any substance, material or waste which is defined as such or regulated by any “Superfund” or “Superlien” law, or any Environmental Law; or (v) any other substance, material, chemical, waste or pollutant identified as hazardous or toxic and regulated under any other federal, state or local environmental law, including without limitation, asbestos, polychlorinated biphenyls, petroleum, natural gas and synthetic fuel products and by-products. “Environmental Law” means all federal, state or local statutes, ordinances, rules, regulations, orders, decrees, judgments or common law doctrines, and provisions and conditions of permits, licenses and other operating authorizations regulating, or relating to, or imposing liability or standards of conduct concerning (i) pollution or protection of the environment, including natural resources; (ii) exposure of persons, including employees and agents, to any Hazardous Material (as defined above) or other products, raw materials, chemicals or other substances; (iii) protection of the public health or welfare from the effects of by-products, wastes, emissions, discharges or releases of chemical substances from industrial or commercial activities; (iv) the manufacture, use or introduction into commerce of chemical substances, including without limitation, their manufacture, formulation, labeling, distribution, transportation, handling, storage and disposal; or (iv) the use, release or disposal of toxic or hazardous substances or Hazardous Materials or the remediation of air, surface waters, groundwaters or soil, as now or may at any later time be in effect, including but not limited to the Toxic Substances Control Act [15 U.S.C. 2601, et seq.]; the Comprehensive Environmental Response, Compensation and Liability Act [42 U.S.C. Section 9601, et seq.], the Hazardous Materials Transportation Authorization Act [49 U.S.C. Section 5101, et seq.], the Resource Conservation and Recovery Act [42 U.S.C. 6901, et seq.], the Federal Water Pollution Control Act [33 U.S.C. Section 1251], the Clean Air Act [42 U.S.C. Section 7401, et seq.], the California Underground Storage of Hazardous Substances Act [California Health and Safety Code Section 25280, et seq.], the California Hazardous Substances Account Act [California Health and Safety Code Section 25300, et seq.], the California Hazardous Waste Act [California Health and Safety Code Section 25100, et seq.], the California Safe Drinking Water and Toxic Enforcement Act [California Health and Safety Code Section 25249.5, et seq.], and the Porter-Cologne Water Quality Control Act [California Water Code Section 13000, et seq.], as they now exist or are hereafter amended, together with any regulations promulgated thereunder.

7.12 Notice of Claims; Defense of Security; Reimbursement of Costs. a. Notice of Claims. Trustor shall provide written notice to Beneficiary of any uninsured or partially uninsured loss affecting the Property through fire, theft, liability, or

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property damage in excess of an aggregate of Fifty Thousand Dollars ($50,000) within three (3) business days of the occurrence of such loss. Trustor shall ensure that Beneficiary shall receive timely notice of, and shall have a right to cure, any default under any other financing document or other lien affecting the Property and shall use best efforts to ensure that provisions mandating such notice and allowing such right to cure shall be included in all such documents. Within three (3) business days of Trustor’s receipt thereof, Trustor shall provide Beneficiary with a copy of any notice of default Trustor receives in connection with any financing document secured by the Property or any part thereof.
b. Defense of Security. At Trustor’s sole expense, Trustor shall protect, preserve and defend the Property and Trustor’s interest in, and right of possession of, the Property, the security of this Deed of Trust and the rights and powers of Beneficiary and Trustee created under it, against all adverse claims.
c. Compensation; Reimbursement of Costs. Trustor agrees to pay all reasonable fees, costs and expenses charged by Beneficiary or Trustee for any service that Beneficiary or Trustee may render in connection with this Deed of Trust, including without limitation, fees and expenses related to provision of a statement of obligations or related to a reconveyance. Trustor further agrees to pay or reimburse Beneficiary for all costs, expenses and other advances which may be incurred or made by Beneficiary or Trustee in any efforts to enforce any terms of this Deed of Trust, including without limitation any rights or remedies afforded to Beneficiary or Trustee or both of them under Sections 7.18 and 8.2, whether or not any lawsuit is filed, or in defending any action or proceeding arising under or relating to this Deed of Trust, including reasonable attorneys’ fees and other legal costs, costs of any disposition of the Property under the power of sale granted hereunder or any judicial foreclosure, and any cost of evidence of title. d. Notice of Changes. Trustor shall give Beneficiary prior written notice of any change in the address of Trustor and the location of any Property, including books and records pertaining to the Property.

7.13 Indemnification. To the greatest extent permitted by law, Trustor shall indemnify, defend (with counsel reasonably acceptable to Beneficiary), and hold harmless the Trustee and the Indemnitees (as defined in Section 7.11) from and against all Claims arising directly or indirectly in any manner in connection with or as a result of (a) any breach of Trustor’s covenants under any City Document, (b) any representation by Trustor in any City Document which proves to be false or misleading in any material respect when made, (c) injury or death to persons or damage to property or other loss occurring on the Land or in any improvement located thereon, whether caused by the negligence or any other act or omission of Trustor or any other person or by negligent, faulty, inadequate or defective design, building, construction or maintenance or any other condition or otherwise, (d) any Claim, demand or cause of action, or any action or other proceeding, whether meritorious or not, brought or asserted against any Indemnitee which relates to or arises out of the Property, the Project, or any City Document or any transaction contemplated thereby, or any failure of Trustor to comply with all applicable state, federal and local laws and regulations applicable to the Property, except to the extent arising from the gross negligence or willful misconduct of the Indemnitees. The obligations of Trustor under this Section shall survive the repayment of the Loan and shall be secured by this Deed of Trust. Notwithstanding any contrary provision contained herein, the obligations of

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Trustor under this Section shall survive any foreclosure proceeding, any foreclosure sale, any delivery of a deed in lieu of foreclosure, and any release or reconveyance of this Deed of Trust.

7.14. Limitation of Liability. Beneficiary shall not be directly or indirectly liable to Trustor or any other person as a consequence of any of the following: (i) Beneficiary's exercise of or failure to exercise any rights, remedies or powers granted to Beneficiary in this Deed of Trust; (ii) Beneficiary's failure or refusal to perform or discharge any obligation or liability of Trustor under any agreement related to the Property or under this Deed of Trust; (iii) any waste committed by Trustor, the lessees of the Property or any third parties, or any dangerous or defective condition of the Property; or (iv) any loss sustained by Trustor or any third party resulting from any act or omission of Beneficiary in managing the Property after an Event of Default, except to the extent the loss is caused by the willful misconduct or gross negligence of Beneficiary. Trustor hereby expressly waives and releases all liability of the types described in this Section 7.14 and agrees that Trustor shall assert no claim related to any of the foregoing against Beneficiary.

7.15 Insurance and Condemnation Proceeds. Subject to the rights of any senior lienholders and the provisions of the Ground Lease, any award of damages in connection with any condemnation for public use of, or injury to the Property or any part thereof is hereby assigned and shall be paid to Beneficiary who may apply such moneys to any indebtedness secured hereby in such order as Beneficiary may determine, or at the option of Beneficiary the entire amount so collected or any part thereof may be released to Trustor. Such application or release shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. Notwithstanding the foregoing, provided that all senior lenders have consented to the use of condemnation and insurance proceeds for the repair or restoration of the Property, Beneficiary will not withhold consent to the use of such proceeds for such purpose provided that adequate funds are available to Trustor to complete such repair or restoration, and the security for Beneficiary’s lien will not be impaired.

7.16 Release, Extension, Modification. At any time and from time to time, without liability therefor and without notice, upon written request of Beneficiary and presentation of this Deed of Trust and the Note for endorsement, Trustee may release or reconvey all or any part of the Property, consent to the making of any map or plat of the Land or part thereof, join in granting any easement or creating any restriction affecting the Property, or join in any extension agreement or other agreement affecting the lien or charge hereof. At any time and from time to time, without liability therefor and without notice, Beneficiary may (i) release any person liable for payment of any Secured Obligation, (ii) extend the time for payment or otherwise alter the terms of payment of any Secured Obligation; (iii) accept additional real or personal property of any kind as security for any Secured Obligation, or (iv) substitute or release any property securing the Secured Obligations.

7.17 Reconveyance. Upon written request of Beneficiary stating that all of the Secured Obligations have been paid in full, and upon surrender of this Deed of Trust, and the Note, Trustee shall reconvey, without warranty, the Property or so much of it as is then held under this Deed of Trust. The recitals in any reconveyance executed under this Deed of Trust of any matters or facts shall be conclusive proof of the truthfulness thereof. Trustor shall pay all fees of Trustee and all recordation fees related to such reconveyance.

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7.18 Cure; Protection of Security. Either Beneficiary or Trustee may cure any breach or default of Trustor if Trustor fails to do so within the applicable cure period, and if it chooses to do so in connection with any such cure, Beneficiary or Trustee may also enter the Property and/or do any and all other things which it may in its sole discretion consider necessary and appropriate to protect the security of this Deed of Trust. Such other things may include:
appearing in and/or defending any action or proceeding which purports to affect the security of, or the rights or powers of Beneficiary or Trustee under, this Deed of Trust; paying, purchasing, contesting or compromising any encumbrance, charge, lien or claim of lien which in Beneficiary’s or Trustee’s sole judgment is or may be senior in priority to this Deed of Trust, such judgment of Beneficiary or Trustee to be conclusive as among Beneficiary, Trustee and Trustor; obtaining insurance and/or paying any premiums or charges for insurance required to be carried hereunder; otherwise caring for and protecting any and all of the Property; and/or employing counsel, accountants, contractors and other appropriate persons to assist Beneficiary or Trustee. Beneficiary and Trustee may take any of the actions permitted under this Section

7.18 either with or without giving notice, except for notices required under applicable law. Any amounts disbursed by Beneficiary pursuant to this paragraph shall become additional indebtedness secured by this Deed of Trust.

7.19 Limited Partners Right to Cure. Trustor’s limited partners shall have the right to cure any default of Trustor hereunder upon the same terms and conditions afforded to Trustor.

Beneficiary shall provide any notice of default hereunder to the limited partners at the address set forth in Section 11.2 below concurrently with the provision of such notice to Trustor.

8. Default and Remedies.

8.1 Events of Default. Trustor acknowledges and agrees that an Event of Default shall occur under this Deed of Trust upon the occurrence of any one or more of the following events.
a. An event of default arises under any City Document and remains uncured beyond the expiration of the applicable cure period set forth in such document; b. Trustor fails to perform any monetary obligation which arises under this Deed of Trust or any other City Document, and does not cure that failure within ten (10) days following written notice from Beneficiary or Trustee;
c. Trustor’s interest in the Property or any part thereof is voluntarily or involuntarily sold, transferred, leased, encumbered, or otherwise conveyed in violation of the City Documents;
d. Trustor fails to maintain the insurance coverage required hereunder or under the other City Documents and fails to cure such default within five (5) days, or Trustor otherwise fails to comply with the requirements of Section 7.10 hereof and Trustor fails to cure such default within the applicable time specified in Section 7.10; e. Subject to Trustor’s right to contest such charges as provided herein, Trustor fails to pay taxes or assessments due on the Land or the Improvements or fails to pay when due any other charge that may result in a lien on the Land or the Improvements, and

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Trustor fails to cure such default within twenty (20) days of the date of delinquency, but in all events prior to the date upon which the holder of any such lien has the right to pursue foreclosure thereof.
f. Any representation or warranty made by or on behalf of Trustor contained in, or made in connection with, the execution and delivery of this Deed of Trust or any other City Document, or in any certificate or statement furnished pursuant to any City Document, proves to have been false or misleading in any adverse respect when made and continues to be adverse to the City;
g. If, pursuant to or within the meaning of the United States Bankruptcy Code or any other federal or state law relating to insolvency or relief of debtors (“Bankruptcy Law”), Trustor or any general partner thereof (i) commences a voluntary case or proceeding; (ii) consents to the entry of an order for relief against Trustor or any general partner thereof in an involuntary case; (iii) consents to the appointment of a trustee, receiver, assignee, liquidator or similar official for Trustor or any general partner thereof; (iv) makes an assignment for the benefit of its creditors; or (v) admits in writing its inability to pay its debts as they become due; h. If a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that (i) is for relief against Trustor or any general partner thereof in an involuntary case, (ii) appoints a trustee, receiver, assignee, liquidator or similar official for Trustor or any general partner thereof or substantially all of such entity’s assets, (iii) orders the liquidation of Trustor or any general partner thereof, or (iv) issues or levies a judgment, writ, warrant of attachment or similar process against the Property or the Project or any part thereof, and in each case the order or decree is not released, vacated, dismissed or fully bonded within sixty (60) days after its issuance;
i. The holder of any other debt instrument secured by a mortgage or deed of trust on the Property or part thereof declares an event of default thereunder and exercises a right to declare all amounts due under that debt instrument immediately due and payable, subject to the expiration of any applicable cure period set forth in such holder’s documents; j. A default on the part of Trustor arises under the Ground Lease and remains uncured beyond the expiration of all applicable cure periods; or k. Trustor fails to perform any obligation arising under this Deed of Trust other than one enumerated in this Section 8.1, and does not cure that failure either within ten (10) days after written notice from Beneficiary or Trustee in the event of a monetary default, or within thirty (30) days after such written notice in the event of a nonmonetary default, provided that in the case of a nonmonetary default that in Beneficiary’s reasonable judgment cannot reasonably be cured within thirty (30) days, an Event of Default shall not arise hereunder if Trustor commences to cure such default within thirty (30) days and thereafter prosecutes such cure to completion with due diligence and in good faith and in no event later than ninety (90) days following receipt of notice of default.

8.2 Remedies. Subject to the applicable notice and cure provisions set forth herein, at any time after an Event of Default, Beneficiary and Trustee shall be entitled to invoke any and all

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of the rights and remedies described below, and may exercise any one or more or all, of the remedies set forth in any City Document, and any other remedy existing at law or in equity or by statute. All of Beneficiary’s rights and remedies shall be cumulative, and the exercise of any one or more of them shall not constitute an election of remedies. Beneficiary shall be entitled to collect all expenses incurred in pursuing the remedies provided hereunder, including without limitation reasonable attorneys’ fees and costs.
a. Acceleration. Beneficiary may declare any or all of the Secured Obligations, including without limitation all sums payable under the Note and this Deed of Trust, to be due and payable immediately.
b. Receiver. Beneficiary may apply to any court of competent jurisdiction for, and obtain appointment of, a receiver for the Property. c. Entry. Beneficiary, in person, by agent or by court-appointed receiver, may enter, take possession of, manage and operate all or any part of the Property, and may also do any and all other things in connection with those actions that Beneficiary may in its sole discretion consider necessary and appropriate to protect the security of this Deed of Trust. Such other things may include: taking and possessing copies of all of Trustor’s or the then owner's books and records concerning the Property; entering into, enforcing, modifying, or canceling Leases on such terms and conditions as Beneficiary may consider proper; obtaining and evicting tenants; fixing or modifying Rents; collecting and receiving any payment of money owing to Trustor; completing any unfinished construction; and/or contracting for and making repairs and alterations. If Beneficiary so requests, Trustor shall assemble all of the Property that has been removed from the Land and make all of it available to Beneficiary at the site of the Land. Trustor hereby irrevocably constitutes and appoints Beneficiary as Trustor's attorney-in-fact to perform such acts and execute such documents as Beneficiary in its sole discretion may consider to be appropriate in connection with taking these measures, including endorsement of Trustor's name on any instruments.
d. UCC Remedies. Beneficiary may exercise any or all of the remedies granted to a secured party under the UCC.
e. Judicial Action. Beneficiary may bring an action in any court of competent jurisdiction to foreclose this Deed of Trust in the manner provided by law for foreclosure of mortgages on real property and/or to obtain specific enforcement of any of the covenants or agreements of this Deed of Trust.
f. Power of Sale. Under the power of sale hereby granted, Beneficiary shall have the discretionary right to cause some or all of the Property, including any Property which constitutes personal property, to be sold or otherwise disposed of in any combination and in any manner permitted by applicable law.

8.3 Power of Sale. If Beneficiary elects to invoke the power of sale hereby granted, Beneficiary shall execute or cause the Trustee to execute a written notice of such default and of its election to cause the Property to be sold to satisfy the obligations hereof, and shall cause such

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notice to be recorded in the office of the Recorder of each County wherein the Property or some part thereof is situated as required by law and this Deed of Trust.

Prior to publication of the notice of sale, Beneficiary shall deliver to Trustee this Deed of Trust and the Note or other evidence of indebtedness which is secured hereby, together with a written request for the Trustee to proceed with a sale of the Property, pursuant to the provisions of law and this Deed of Trust.

Notice of sale having been given as then required by law, and not less than the time then required by law having elapsed after recordation of such notice of default, Trustee, without demand on Trustor, shall sell the Property at the time and place fixed by it in the notice of sale, either as a whole or in separate parcels and in such order as it may determine, at public auction to the highest bidder for cash in lawful money of the United States, payable at time of sale. Trustee may, and at Beneficiary’s request shall, postpone sale of all or any portion of the Property by public announcement at such time and place of sale, and from time to time thereafter may postpone such sale by public announcement at the time and place fixed by the preceding postponement. Trustee shall deliver to the purchaser its deed conveying the property so sold, but without any covenant or warranty, express or implied. The recitals in such deed of any matters or facts shall be conclusive proof of the truthfulness thereof. Any person, including Trustor, Trustee, or Beneficiary, may purchase at such sale.

After deducting all costs, fees, and expenses of Trustee and of the trust hereby created, including reasonable attorneys’ fees in connection with sale, Trustee shall apply the proceeds of sale to payment of all sums advanced or expended by Beneficiary or Trustee under the terms hereof and all outstanding sums then secured hereby, and the remainder, if any, to the person or persons legally entitled thereto.

Without limiting the generality of the foregoing, Trustor acknowledges and agrees that regardless of whether or not a default has occurred hereunder, if an Event of Default has occurred under the City Documents, and if in connection with such Event of Default Beneficiary exercises its right to foreclose on the Property, then: (i) Beneficiary shall be entitled to declare all amounts due under the Note immediately due and payable, and (ii) the proceeds of any sale of the Property in connection with such foreclosure shall be used to pay all Secured Obligations, including without limitation, the outstanding principal balance and all other amounts due under the Note.

At any foreclosure sale, any person, including Trustor, Trustee or Beneficiary, may bid for and acquire the Property or any part of it to the extent permitted by then applicable law.

Instead of paying cash for such property, Beneficiary may settle for the purchase price by crediting the sales price of the property against the following obligations:
a. First, the portion of the Secured Obligations attributable to the expenses of sale, costs of any action and any other sums for which Trustor is obligated to pay or reimburse Beneficiary or Trustee under Section 7.12(c); and

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b. Second, the remaining balance of all other Secured Obligations in any order and proportions as Beneficiary in its sole discretion may choose.

8.4 Trustor’s Right to Reinstate. Notwithstanding Beneficiary’s acceleration of the sums secured by this Deed of Trust, Trustor shall have the right to have any proceedings begun by Beneficiary to enforce this Deed of Trust discontinued at any time prior to five days before sale of the Property pursuant to the power of sale contained in this Deed of Trust or at any time prior to entry of a judgment enforcing this Deed of Trust if: (a) Trustor pays Beneficiary all sums which would be then due under the City Documents if the Secured Obligations had no acceleration provision; (b) Trustor cures all breaches of any other covenants or agreements of Trustor contained in this Deed of Trust; (c) Trustor pays all reasonable expenses incurred by Beneficiary and Trustee in enforcing the covenants and agreements of Trustor contained in this Deed of Trust, and in enforcing Beneficiary’s and Trustee’s remedies as provided herein, including, but not limited to, reasonable attorney’s fees; and (d) Trustor takes such action as Beneficiary may reasonably require to assure that the lien of this Deed of Trust, Beneficiary’s interest in the Property and Trustor’s obligation to pay the sums secured by this Deed of Trust shall continue unimpaired. Upon such payment and cure by Trustor, this Deed of Trust and the obligations secured hereby shall remain in full force and effect as if no acceleration had occurred.

9. Trustor’s Waivers. To the fullest extent permitted by law, Trustor waives: (a) all statutes of limitations as a defense to any action or proceeding brought against Trustor by Beneficiary; (b) the benefit of all laws now existing or which may hereafter be enacted providing for any appraisement, valuation, stay, extension, redemption or moratorium; (c) all rights of marshalling in the event of foreclosure; and (d) all presentments, demands for performance, notices of nonperformance, protests, notices of protest, notices of dishonor, notices of acceptance of this Deed of Trust and of the existence, creation, or incurring of new or additional indebtedness, and demands and notices of every kind.

10. Leasehold Mortgagee Provisions.

10.1 The provisions of this Section 10 shall apply for so long as any portion of the Property consists of Trustor's interest as tenant under the Ground Lease defined and described in Recital A. As used in this Section 10, the term “Ground Lease” means the Ground Lease and any extension, renewal or replacement thereof. The lien of this Deed of Trust shall encumber all of Trustor's rights and interests under and in connection with the Ground Lease, including without limitation renewal and extension rights and purchase options (if any), all of which rights shall be collectively referred to herein as the “Leasehold.”

10.2 Intentionally omitted.

10.3 Unless Beneficiary otherwise consents in writing, so long as any Secured Obligation remains outstanding, neither the fee title to, nor any other estate or interest in, the property subject to the Ground Lease shall merge with any leasehold, notwithstanding the union of such estates in the landlord or the tenant or in a third party. Any acquisition of the landlord's interest in the Ground Lease by Trustor or any affiliate of Trustor shall be accomplished in such

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a manner as to avoid a merger of the interests of landlord and tenant unless Beneficiary consents to such merger in writing.

10.4 If Trustor acquires fee title to any portion of the real property subject to the Ground Lease, this Deed of Trust shall automatically be a lien on such fee title.

10.5 Except as permitted by the City Documents, Trustor shall not subordinate the Ground Lease or Leasehold to any deed of trust or other encumbrance of, or lien on, any interest in the real property subject to such Leasehold without the prior written consent of Beneficiary.

Any such subordination without such consent shall, at Beneficiary's option, be void.

10.6 Trustor shall notify Beneficiary promptly in writing of the institution of any legal proceeding involving obligations under the Ground Lease, and Beneficiary may intervene in any such legal proceeding and be made a party. Trustor shall promptly provide Beneficiary with a copy of any decision rendered in connection with any such proceeding.

10.7 To the extent permitted by law, the price payable by Trustor or any other party in the exercise of the right of redemption, if any, from any sale under, or decree of foreclosure of, this Deed of Trust shall include all rents and other amounts paid and other sums advanced by Beneficiary on behalf of Trustor as the tenant under the Ground Lease.

10.8 Trustor shall promptly notify the landlord in writing, in accordance with Section 25359.7 of the California Health and Safety Code and any successor and/or similar statutes (and shall simultaneously notify Beneficiary in writing), in the event that Trustor knows or has cause to believe that any Hazardous Materials have come to be located on or beneath the property leased under the Ground Lease.

10.9 The generality of the provisions of this Deed of Trust shall not be limited by any provision of Section 10 and the subsections thereof that sets forth particular obligations of Trustor as the tenant under the Ground Lease.

11. Miscellaneous Provisions.

11.1 Additional Provisions. The City Documents grant further rights to Beneficiary and contain further agreements and affirmative and negative covenants by Trustor which apply to this Deed of Trust and the Property.

11.2 Notices. Trustor requests that a copy of notice of default and notice of sale be mailed to Trustor at the address set forth below. That address is also the mailing address of Trustor as debtor under the UCC. Beneficiary’s address set forth below is the address for Beneficiary as secured party under the UCC. Except for any notice required under applicable law to be given in another manner, all notices to be sent pursuant to this Deed of Trust shall be made in writing, and sent to the parties at their respective addresses specified below or to such other address as a party may designate by written notice delivered to the other parties in accordance with this Section. All such notices shall be sent by: (a) personal delivery, in which case notice shall be deemed delivered upon receipt; (b) certified or registered mail, return receipt requested, in which case notice shall be deemed delivered two (2) business days after deposit,

20 4860-6036-3710v2
postage prepaid in the United States mail; or (c) nationally recognized overnight courier, in which case notice shall be deemed delivered one (1) day after deposit with such courier.

TRUSTOR: Ridge View Commons II Associates, L.P.
c/o Eden Housing, Inc.
22645 Grand Street
Hayward, CA 94541
Attention: President

with a copy to: Gubb & Barshay LLP
235 Montgomery Street, Suite 1110
San Francisco, CA 94104
Attention: Nicole Kline

with a copy to:

BENEFICIARY: City of Pleasanton
P.O. Box 520
123 Main Street
Pleasanton, CA 94566
Attention: City Manager

with a copy to: Burke, Williams & Sorensen, LLP
1999 Harrison Street, Suite 1650
Oakland, CA 94612-3501
Attention: Susan E. Bloch, Esq.

11.3 Binding on Successors. The terms, covenants and conditions of this Deed of Trust shall be binding upon and inure to the benefit of the heirs, administrators, executors, successors in interest, transferees, and assigns of the Trustor, Beneficiary and Trustee; provided however this Section 11.3 does not waive the provisions of Section 7.6.

11.4 Substitution of Trustee. Beneficiary may from time to time or at any time substitute a trustee or trustees to execute the trust hereby created, and when any such substitution has been filed for record in the office of the Recorder of Santa Clara County, it shall be conclusive evidence of the appointment of such trustee or trustees, and such new trustee or trustees shall succeed to all of the powers and duties of the Trustee named herein.

11.5 Attorneys’ Fees and Costs. In any action or proceeding to foreclose this Deed of Trust or to enforce any right of Beneficiary or of Trustee, Trustor shall pay to Beneficiary and Trustee all costs of such action or proceeding, including reasonable attorneys’ fees.

11.6 Governing Law; Severability; Interpretation. This Deed of Trust shall be governed by the laws of the State of California without regard to principles of conflicts of laws.

Trustor agrees that any controversy arising under or in relation to this Deed of Trust shall be litigated exclusively in state or federal courts with jurisdiction in Santa Clara County, California.

21 4860-6036-3710v2
Trustor irrevocably consents to service, jurisdiction, and venue of such courts for any such litigation, and waives any other venue to which it might be entitled by virtue of domicile, habitual residence or otherwise. If any provision of this Deed of Trust is held unenforceable or void, that provision shall be deemed severable from the remaining provisions, and shall in no way affect the validity of this Deed of Trust. The captions used in this Deed of Trust are for convenience only and are not intended to affect the interpretation or construction of the provisions herein contained. In this Deed of Trust, whenever the context so requires, the singular number includes the plural.

11.7 Waiver, Modification and Amendment. Any waiver by Beneficiary of any obligation of Trustor hereunder must be in writing, and no waiver shall be construed as a continuing waiver. No waiver shall be implied from any delay or failure by Beneficiary or Trustee to take action on account of any default of Trustor. Consent by Beneficiary or Trustee to any act or omission by Trustor shall not be construed as a consent to any other or subsequent act or omission or to waive the requirement for Beneficiary’s or Trustee’s consent to be obtained in any future or other instance. No amendment to or modification of this Deed of Trust shall be effective unless and until such amendment or modification is in writing, executed by Trustor and Beneficiary. Without limiting the generality of the foregoing, Beneficiary’s acceptance of payment of any sum secured hereby after its due date shall not constitute a waiver by Beneficiary of its right either to require prompt payment when due of all other sums so secured or to declare default for failure so to pay.

11.8 Action by Beneficiary. Except as may be otherwise specifically provided herein, whenever any approval, notice, direction, or consent by the Beneficiary is required or permitted under this Agreement, such action shall be in writing, and such action may be given, made or taken by Beneficiary’s City Manager or by any person who shall have been designated by Beneficiary’s City Manager, without further approval by the governing board of Beneficiary.

11.9 Joint and Several Liability. If Trustor consists of more than one person or entity, each shall be jointly and severally liable for the faithful performance of all of Trustor’s obligations under this Deed of Trust.

11.10 Time is of the Essence. Time is of the essence for each provision of this Deed of Trust.

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

11.12 Partial Subordination to Extended Use Agreement. Trustor and the California Tax Credit Allocation Committee may enter into a Regulatory Agreement (the “CTCAC Regulatory Agreement”) which constitutes the extended low-income housing commitment described in Section 42(h)(6)(B) of the Internal Revenue Code of 1986, as amended (the “Code”). In the event of a foreclosure of Beneficiary’s interest under this Deed of Trust or delivery by the Trustor of a deed in lieu thereof (collectively, a “Foreclosure”), the following rule shall apply pursuant to Section 42(h)(6)(e)(ii) of the Code:

22 4860-6036-3710v2
With respect to dwelling units that had been regulated by the C TCAC Regulatory Agreement , for a period of three (3) years following a Foreclosure: none of the tenants occupying such units at the time of the Foreclosure may be evicted or have their tenancy terminated other than for good cause , nor may any rent be increased except as otherwise permitted under Section 42 of the Code.

SIGNATURES ON FOLLOWING PAGE

23 4860-6036-3710v2
IN WITNESS WHEREOF, Trustor has executed this Leasehold Deed of Trust as of the date first written above.

TRUSTOR:

Ridge View Commons II Associates, L.P., a California limited partnership

By: Ridge View Commons LLC,
a California limited liability company,
its general partner

By: Eden Investments, Inc.,
a California nonprofit public benefit corporation,
its sole member/manager

By: ____________________________
Andrea Osgood, Chief of Real Estate Development and
Executive Vice President

SIGNATURES MUST BE NOTARIZED.

24 4860-6036-3710v2

CALIFORNIA ALL-PURPOSE 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.

STATE OF CALIFORNIA

COUNTY OF _____________________
On ______________ before me, _______________________ (here insert name and title of the officer), personally appeared _________________________ who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

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

WITNESS my hand and official seal.

Signature _______________________________ (Seal)

25 4860-6036-3710v2
Exhibit A

LAND

The land referred to is situated in the City of Pleasanton, County of Alameda, State of California, and is described as follows:

PARCEL ONE:

ALL BUILDINGS AND OTHER IMPROVEMENTS WHICH BUILDINGS AND IMPROVEMENTS ARE AND SHALL REMAIN AS REAL PROPERTY, SITUATED ON THE FOLLOWING DESCRIBED:

PARCEL 2 AS SHOWN ON PARCEL MAP NO. 5231, FILED APRIL 22, 1988, IN BOOK 176 OF MAPS AT PAGES 40 AND 41, ALAMEDA COUNTY RECORDS.

PARCEL TWO:

PARCEL 2 AS SHOWN ON PARCEL MAP NO. 5231, FILED APRIL 22, 1988, IN BOOK 176 OF MAPS AT PAGES 40 AND 41, ALAMEDA COUNTY RECORDS.

EXCEPTING FROM PARCEL TWO ALL BUILDINGS AND OTHER IMPROVEMENTS SITUATED ON ABOVE SAID LAND, WHICH ARE AND SHALL REMAIN AS REAL PROPERTY.

APN: 947-0008-010

4879-3324-5885v2

RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:

City of Pleasanton
P.O. Box 520
123 Main Street
Pleasanton, CA 94566
Attention: City Manager

EXEMPT FROM RECORDING FEES PER
GOVERNMENT CODE §§6103, 27383, 27388.1

Space above this line for Recorder’s use.

AFFORDABLE HOUSING REGULATORY AGREEMENT

AND

DECLARATION OF RESTRICTIVE COVENANTS

by and between

THE CITY OF PLEASANTON

and

RIDGE VIEW COMMONS II ASSOCIATES, L.P.

(Ridge View Commons)

____________, 2024

4879-3324-5885v3
2 This Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants (this “Agreement”) is entered into effective as of __________, 2024 (“Effective Date”) by and between the City of Pleasanton, a municipal corporation (“City”) and Ridge View Commons II Associates, L.P., a California limited partnership (“Owner”). The City and the Owner are collectively referred to herein as the “Parties.”

R E C I T A L S
A. City owns the real property located in the City of Pleasanton, Alameda County, California, located at 5200 Case Avenue, known as Alameda County Assessor Parcel No. 947- 0008-010, and more particularly described in Exhibit A attached hereto (the “Property”).

B. City and Owner have entered into a ground lease dated as of the date hereof (the “Ground Lease”), pursuant to which Owner will lease the Property from City for a term of seventy-five (75) years, and rehabilitate, own and operate an affordable senior housing development thereon consisting of 200 apartments and related improvements (the “Project”) in accordance with the Ground Lease. A Memorandum of the Ground Lease will be recorded in the Official Records of Alameda County substantially concurrently herewith.

C. This Agreement requires the Restricted Units within the Project to be available to Eligible Households at Affordable Rents in accordance with this Agreement for a period of not less than fifty-five (55) years. The Ground Lease imposes affordability requirements that will continue to apply following the expiration of the Initial Affordability Restriction Period.

D. City provided certain loans to Owner’s predecessor in interest in connection with the development of the Project (collectively, the “Loan”). City has agreed to allow Owner to assume the obligation to repay the Loan. In connection therewith, Owner shall execute and deliver to City an Amended and Restated Secured Promissory Note (the “Note”) which shall be secured by an Amended and Restated Leasehold Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing that shall be executed by Owner for the benefit of City (the “Deed of Trust”) and recorded against the Project and Owner’s leasehold interest in the Property substantially concurrently herewith.

E. 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 Owner and Owner’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. Definitions. The following terms have the meanings set forth in this Section wherever used in this Agreement or the attached exhibits.

4879-3324-5885v3
3 “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 42(g)(2) of the Internal Revenue Code of 1986 as amended, and applicable federal and CTCAC regulations.

"Affordable Rent" means a monthly rent less a utility allowance and other fees and charges required to be paid by tenants of the Project on a non-optional basis in the amount not greater than the maximum rents specified in CTCAC Regulations for households of the applicable Area Median Income categories as set forth in Sections 3.2(c) and 3.2(d) of this Agreement.

“Affordable Housing Monitoring Fee” is defined in Section 4.3.

“Annual Report” is defined in Section 4.4.

“Applicable Rules and Regulations” means the State of California and federal rules and regulations applicable to the Project, including without limitation, Sections 42 and 142 of the Internal Revenue Code of 1986, as amended, Treasury Regulations 26 CFR §1.42 et seq., and the CTCAC Regulations.

“Area Median Income ” or “AMI” means the median income for Alameda County, California, adjusted for Actual Household Size, as determined by HUD pursuant to Section 8 of the United States Housing Act of 1937 and as published from time to time by the State of California Department of Housing and Community Development (“HCD”) in Section 6932 of Title 25 of the California Code of Regulations or successor provision published pursuant to California Health and Safety Code Section 50093(c).

“City’s Authorized Representative” means the City Manager of the City of Pleasanton .

“City Documents ” means collectively, the Loan Agreement, the Note, the De ed of Trust, the Ground Lease , and this Agreement.
“Claims ” means collectively, liabilities, loss es, costs, expense s (including without limitation attorneys’ fees and costs of litigation), claims , demands , actions , suits, judicial or administrative proceedings , penalt ies, deficienc ies, fine s, order s, and damage s. “CTCAC” means the California Tax Credit Allocation Committee. “CTCAC Regulations” means collectively , the CTCAC regulations published at Title 24 California Code of Regulations Section 10300 et seq. , as may hereafter be amended, and CTCAC memoranda published annually setting forth maximum household income limits and maximum rents for projects financed with low -income housing tax credits .

4879-3324-5885v3
4 “Deed of Trust” is defined in Recital D.
“Eligible Household” means a household for which household Gross Income upon initial occupancy does not exceed the maximum income level for a Restricted Unit as specified in Sections 3.2(c) and 3.2(d) and that includes at least one member who is age 62 or older or other qualifying resident as defined in California Civil Code Section 51.3. “Financial Feasibility” is defined in Section 3.3.
“Gross Income” means the applicable household’s total Gross Income as determined in accordance with Section 42(g)(2) of the Internal Revenue Code of 1986, as amended, and applicable federal and CTCAC Regulations.

“Ground Lease” is defined in Recital B.

“HUD” means the U.S. Department of Housing and Urban Development. “Indemnitees” means collectively, the City and its elected and appointed officers, officials, employees, agents, contractors, consultants, and representatives. “Initial Affordability Restriction Period” is defined in Section 2. “Loan” is defined in Recital D.
“Marketing Plan” is defined in Section 6.5.
“Note” is defined in Recital D.
“Permitted Annual Rent Increase” is defined in Section 3.2(b). “Project” is defined in Recital B.
“Property” is defined in Recital A.
“Property Management Plan” is defined in Section 6.5.
"Restricted Units" means the 198 dwelling units in the Project that are reserved for occupancy at an Affordable Rent by Eligible Households of specified household income levels as set forth in Section 3.2.
“Term” is defined in Section 2.

2. Term of Agreement; Initial Affordability Restriction Period.

2.1 Term. The term of this Agreement (the “Term”) shall be coterminous with the Ground Lease, i.e., this Agreement shall remain in effect for the period commencing on the Effective Date and terminating on the seventy-fifth (75th) anniversary of the Effective Date, subject to the following:

4879-3324-5885v3
5 (a) The rent restrictions and household Gross Income restrictions set forth in Section

3.2(c) shall remain in effect for the period (the “Initial Affordability Restriction Period”) commencing on the Effective Date and terminating on the fifty-fifth (55th) anniversary of the date upon which the Project construction loan converts to permanent financing. If such date cannot be ascertained, the Interim Affordability Restriction Period shall terminate on the fifty-seventh (57th) anniversary of the Effective Date of this Agreement.
(b) Upon the expiration of the Initial Affordability Restriction Period, the rent restrictions and household Gross Income restrictions set forth in Section 3.2(d) shall apply for the remainder of the Term, and all other provisions of this Agreement, including without limitation, the provisions restricting annual rent increases, shall remain in effect throughout the Term.

2.2 Effectiveness Succeeds Conveyance of Property and Repayment of Loan. This Agreement shall remain effective and fully binding for the full Term regardless of (i) any sale, assignment, transfer, or conveyance of the Project or Owner’s leasehold interest in the Property, or any part thereof or interest therein, (ii) any payment, prepayment or extinguishment of the Loan or the Note, or (iii) any reconveyance of the Deed of Trust.

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

3. Use and Affordability Restrictions. Owner hereby covenants and agrees, for itself and its successors and assigns, that the Property shall be used solely for the operation of a multifamily senior housing development in accordance with the requirements set forth in this Agreement.

Owner represents and warrants that it has not entered into any agreement that would restrict or compromise its ability to comply with the occupancy and affordability restrictions set forth in this Agreement, and Owner covenants that it shall not enter into any agreement that is inconsistent with such restrictions without the express written consent of City.

3.1 Senior Housing. Owner has elected to operate the Project as a senior housing development and as such to require all dwelling units in the Project except for the manager s’ units to be occupied or held available for occupancy by households that include “elderly” or “senior” residents in accordance with applicable law. To the extent applicable, the Project will be operated at all times in accordance with (a) the Unruh Act, including without limitation California Civil Code Sections 51.2, 51.3, and 51.4; (b) the federal Fair Housing Act, 42 U.S.C.

Section 3607(b) and 24 CFR 100.304; (c) the California Fair Employment and Housing Act, Government Code Section 12900 et seq ., and (d) all other applicable laws and regulations.

Owner shall develop and implement appropriate age verification procedures to ensure compliance with this Section 3.1, and shall provide City with a copy of such verification procedures. Owner will indemnify, defend, and hold the Indemnitees harmless from all Claims arising out of Owner’s failure to comply with applicable legal requirements related to housing for seniors. The indemnity provisions of this paragraph shall survive the expiration o r other termination of this Agreement.

4879-3324-5885v3
6 3.2 Affordability Restrictions. Owner shall comply with all of the following requirements:

(a) Monthly Rent for Existing Residents. Rent payable by residents residing in the Project as of the Effective Date shall be limited to the rent required by the resident’s lease or rental agreement in effect immediately prior to the Effective Date, subject to Permitted Annual Rent Increases.
(b) Permitted Annual Rent Increases. Rent payable by residents of the Project may be increased no more often than once during each 12-month period of a tenant’s occupancy of a Restricted Unit, and rent increases shall be limited to not more than the lowest of the following (the “Permitted Annual Rent Increase”): (i) the percentage increase allowed by CTCAC Regulations, (ii) the percentage increase allowed by applicable State law, and (iii) the percentage by which maximum allowable rents for the applicable Area Median Income categories as published in the CTCAC Regulations has increased over the applicable maximum allowable rents published by CTCAC for the immediately preceding year. (c) Monthly Rent Upon Vacancy – Initial Affordability Restriction Period. During the Initial Affordability Restriction Period, rent for Restricted Units that are vacated shall be set at not greater than Affordable Rent for the applicable Area Median Income category as set forth in this Section. Thereafter, annual rent increases shall be limited as set forth in the preceding paragraph (b).

Subject to paragraph (a) above, and as described in the table below, throughout the Initial Affordability Restriction Period: not less than twenty (20) residential units in the Project shall be occupied, or if vacant available for occupancy, at Affordable Rents to households whose household Gross Income is no greater than thirty percent (30%) of Area Median Income adjusted for Actual Household Size, not less than an additional sixty (60) residential units in the Project shall be shall be occupied, or if vacant available for occupancy, at Affordable Rents to households whose household Gross Income is no greater than fifty percent (50%) of Area Median Income adjusted for Actual Household Size, and not less than an additional one hundred eighteen (118) residential units in the Project shall be occupied, or if vacant available for occupancy, at Affordable Rents to households whose household Gross Income is no greater than sixty percent (60%) of Area Median Income adjusted for Actual Household Size. Two (2) residential units shall be manager/staff units that will not be subject to rent or occupancy restrictions. Notwithstanding the foregoing, the Parties acknowledge that as of the Effective Date, eight (8) Project residents have household Gross Income exceeding sixty percent (60%) AMI. Until the expiration of the Initial Affordability Restriction Period, upon vacancy, the units occupied by such residents shall be occupied or available for occupancy at Affordable Rent by households whose household Gross Income does not exceed sixty percent (60%) of Area Median Income adjusted for Actual Household Size.

4879-3324-5885v3
7 Maximum
Household Income

Unit Size
30%
AMI
50%
AMI
60%
AMI

Subtotal

Mgr
Unit

Total
1-Bedroom

18 55 107 180 0 180
2-Bedroom

2 5 11 18 2 20
Total 20 60 118 198 2 200

In the event that recertification of tenant incomes indicates that the number of residential units actually occupied by Eligible Households falls below the number reserved for each income group as specified in this Section, Owner 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.

(d) Income Limits and Maximum Rents Following Expiration of Initial Affordability Restriction Period. Upon expiration of the Initial Affordability Restriction Period, subject to Section 3.5 below: (i) upon vacancy, the Restricted Units shall be occupied, or if vacant available for occupancy, by households with household Gross Income not greater than eighty percent (80%) of Area Median Income adjusted for Actual Household Size, and (ii) maximum rents shall be limited to not greater than Affordable Rent for households whose household Gross Income does not exceed eighty percent (80%) of Area Median Income Adjusted for Household Size Appropriate for the Unit as published by CTCAC; provided however, rent payable by residents residing in a Restricted Unit as of the date that the Initial Affordability Restriction Period expires shall be limited to the rent required by the resident’s lease or rental agreement in effect immediately prior to such expiration date, subject to Permitted Annual Rent Increases.

3.3 Rent Float-Up Provisions. Subject to compliance with Section 3.2(b) and the provisions of this Section, if necessary to preserve Project feasibility, in the event of (i) a loss of project-based vouchers or other operating subsidy for the Project, or (ii) a foreclosure or threatened foreclosure of a senior mortgage secured by the Project, rents on any units restricted at thirty percent (30%) or fifty percent (50%) of Area Median Income may be permitted to increase to the rent allowable for units restricted at sixty percent (60%) of Area Median Income (or such lesser amount as may be necessary to ensure Project Financial Feasibility (defined below)), but only to the extent, for the number of units, and for the period of time necessary to achieve Financial Feasibility.

Owner shall immediately notify City in writing of any impending or threatened foreclosure and any impending or threatened termination or reduction of any project-based rental assistance or operating subsidy for the Project, and Owner shall make every effort to find alternative subsidies or financing structures that would enable the rents, income-targeting, and occupancy restrictions set forth in Section 3.2(c) to be maintained. As used in this Agreement, “Financial Feasibility” means that the Project’s annual net operating income (i.e., gross annual income received minus operating expenses and deposits into operating and replacement reserves

4879-3324-5885v3
8 in the amounts required by lenders that have provided Project financing that is payable on a non- residual receipts basis) divided by annual debt service payable on non-residual receipts loans equals at least 1.10.

The increased rents and income-targeting permitted pursuant to this Section may remain in effect only for so long as required to maintain Financial Feasibility. Owner will use best efforts to obtain alternate sources of financing or adjustments in the terms of Project financing provided by lenders other than City in efforts to avoid the necessity for rent increases and enable the Project to comply with the rent and occupancy restrictions set forth in Section 3.2(c). Any rent increases permitted pursuant to this Section will be subject to the applicable regulations of other agencies that have provided financing for the Project and applicable law. If rents for any Restricted Units are increased pursuant to this Section, Owner shall include in each Annual Report submitted pursuant to Section 4.4 below, documentation that the increase in rents is required for Financial Feasibility, and documentation regarding Owner’s efforts to secure additional sources of rent or operating subsidy for the Project.

3.4 Project Based Vouchers and Other Subsidies. If any residential units in the Project are subsidized with Section 8 project-based vouchers through a Housing Assistance Payment Contract with HUD or the Housing Authority of the County of Alameda, or with another source of rent or operating subsidy, the rules and regulations applicable to such programs shall prevail with respect to the setting of rents, implementation of occupancy requirements, and determination of household Gross Income for the units assisted by such programs.

3.5 Compliance with Most Restrictive Requirements. Notwithstanding anything to the contrary set forth in this Agreement, if the CTCAC Regulatory Agreement or restrictions imposed by 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 by this Agreement, the requirements of the CTCAC Regulatory Agreement and such other lenders, investors or regulatory agencies shall prevail during the time that that they are effective.

3.6 Increased Resident Income. 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 Gross 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 household Gross Income of a household that qualified at the applicable income limit at initial occupancy exceeds the applicable income limit for a Restricted Unit, that unit will continue to be considered as satisfying the applicable income limit if the rent for the unit remains at not greater than the applicable restricted amount. In the event a tenant’s household income exceeds the limits specified in this Section, Owner shall apply the rules applicable to the Project pursuant to Section 42 of the Internal Revenue Code of 1986, as amended, the federal regulations applicable thereto, and the CTCAC Regulations. In the event of inconsistency between the provisions of this Section and the Applicable Rules and Regulations, the Applicable Rules and Regulations shall prevail.

4879-3324-5885v3
9 3.7 Manager’s Units. Two (2) dwelling units in the Project may be used as resident manager’s units, and shall be exempt from the occupancy and rent restrictions set forth in this Agreement.

3.8 No Condominium Conversion. Owner shall not convert the Project to condominium or cooperative ownership or sell condominium or cooperative rights to the Project or any part thereof during the Term.

3.9 Non-Discrimination; Compliance with Fair Housing Laws.

3.9.1 Preference for City of Pleasanton Residents and Employees. In order to ensure that there is an adequate supply of affordable housing within the City of Pleasanton for residents and employees of businesses within the City, to the extent permitted by law and consistent with the program regulations for funding sources used for the Project, Owner shall give a preference in the rental of the Restricted Units to Eligible Households that include a member who lives or works in the City of Pleasanton. Notwithstanding the foregoing, in the event of a conflict between this provision and Applicable Rules and Regulations, the provisions of such Applicable Rules and Regulations shall control. Owner shall comply with City’s affirmative marketing policies and procedures as they may be amended from time to time to ensure that City residents and people who work in Pleasanton are provided reasonable notice and opportunity to rent units in the Project.

3.9.2 Fair Housing; Section 8 Vouchers. Owner shall comply with State and federal fair housing laws in the marketing and rental of the Restricted Units. Owner shall accept as tenants, on the same basis as all other prospective tenants, persons who are recipients of rent subsidies, including without limitation Section 8 vouchers.

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

Owner shall include such provision in all deeds, leases, contracts and other instruments executed by or on behalf of Owner, and shall enforce the same diligently and in good faith.

3.10 Relocation. Persons residing in the Project as of the Effective Date shall not be displaced before suitable replacement housing is available. Owner shall ensure that all occupants

4879-3324-5885v3
10 of the Project 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 local, State and federal laws, regulations and policies, including but not limited to the Uniform Relocation Act (42 U.S.C. § 4601 et seq.) and implementing regulations (all of the foregoing, collectively “Relocation Laws”) relating to the displacement and relocation of eligible persons as defined in such Relocation Laws. All costs incurred in connection with the temporary and/or permanent displacement and/or relocation of occupants of the Project, 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 Owner, and City shall have no responsibility for payment therefor.

Owner shall indemnify, defend with counsel approved by City, and hold the Indemnitees harmless from and against all Claims arising from the breach of Owner’s obligations set forth in this Section whether or not any insurance policies shall have been determined to be applicable to any such Claims. Owner’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 Owner 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 Owner, of any of the insurance policies described in this Agreement.

3.11 Rental Agreements. Lease and rental agreements for the Restricted Units must comply with the following terms.
(1) The term must be not less than one (1) year unless by mutual agreement between tenant and Owner.
(2) Any termination of tenancy or refusal to renew a lease must be preceded by thirty (30) days written notice (or such longer period as required by law) specifying the grounds for the action. Owner shall not terminate the tenancy or refuse to renew the lease of a tenant except for serious or repeated violation of the terms and conditions of the lease, for violation of applicable federal, state, or local law, or for other good cause.
(3) Leases may not contain any of the following prohibited clauses:
• Agreement by the tenant to be sued, to admit guilt, or to a judgment in favor of Owner or Owner’s agent in a lawsuit brought in connection with the lease; • Agreement by the tenant that Owner may take, hold, or sell personal property of household members without notice to the tenant and a court decision on the rights of the parties. This prohibition, however, does not apply to an agreement by the tenant concerning disposition of personal property remaining in the housing unit after the tenant has moved out of the unit. Owner may dispose of this personal property in accordance with State law;

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11 • Agreement by the tenant not to hold Owner or Owner’s agents legally responsible for any action or failure to act, whether intentional or negligent; • Agreement of the tenant that Owner or Owner’s agent may institute a lawsuit without notice to the tenant;
• Agreement by the tenant that Owner or Owner’s agent may evict the tenant or household members without instituting a civil court proceeding in which the tenant has the opportunity to present a defense, or before a court decision on the rights of the parties;
• Agreement by the tenant to waive any right to a trial by jury; • Agreement by the tenant to waive tenant’s right to appeal, or to otherwise challenge in court, a court decision in connection with the lease; and • Agreement by the tenant to pay attorneys’ fees or other legal costs even if the tenant wins in a court proceeding by Owner against the tenant. The tenant, however, may be obligated to pay costs if the tenant loses.

4. Reporting Requirements; Annual Monitoring Fee; Inspections.

4.1 Financial Accounting and Post-Completion Audit. No later than 60 days following City’s issuance of a final certificate of occupancy or equivalent following completion of Project rehabilitation, Owner shall provide to City a summary of all sources and uses of funds for the Project and a draft of the Project Cost Certification.

4.2 Tenant Certification. Owner or Owner’s authorized agent shall obtain from each household prior to initial occupancy of each Restricted Unit, and on every anniversary thereafter, a written certificate containing all of the following in such format and with such supporting documentation as City may reasonably require:
(i) The identity of each household member;
(ii) The total household Gross Income; and
(iii) The age of each household member or other basis upon which the household qualifies as an Eligible Household.

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

4.3 Monitoring Fee. Following completion of rehabilitation of the Project, as evidenced by City’s issuance of a final certificate of occupancy or equivalent, Owner shall be obligated to pay to City an annual fee (the “Affordable Housing Monitoring Fee”) in the amount of (Ten Thousand Dollars ($10,000). The Affordable Housing Monitoring Fee is payable annually on the same date that the Annual Report is due pursuant to Section 4.4 below. City shall have the right to file a lien against the Project if the Affordable Housing Monitoring Fee is not

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12 paid when due and remains unpaid thirty (30) days following the date that City provides written notice of the delinquency. The Affordable Housing Monitoring Fee will increase annually by three percent (3%) over the prior year.

4.4 Annual Report; Estimate of Surplus Cash; Annual Budget.

4.4.1 Annual Report; Estimate of Surplus Cash. By not later than April 30 of each year during the Term, Owner shall submit an annual report (“Annual Report”) to the City in form satisfactory to City, together with a certification that the Project is in compliance with the affordability and occupancy requirements of this Agreement. The Annual Report shall, at a minimum, include the following information for each Restricted Unit: (i) unit number; (ii) number of bedrooms; (iii) current rent, utility, and other charges; (iv) the affordability category and affordability restrictions that apply to the unit; (v) dates of any vacancies during the previous year; (vi) number of people residing in the unit; (vii) total household Gross Income; (viii) documentation of source of household income; (ix) lease commencement and termination dates; and (x) the information required by Section 4.2.

Owner shall include with the Annual Report, an income recertification for each household, documentation verifying tenant eligibility, and such additional information as City may reasonably request from time to time in order to demonstrate compliance with this Agreement. The Annual Report shall conform to the format requested by City; provided however, during such time that the 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, Owner 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) A summary of maintenance and other issues anticipated to affect the current budget needs of the Project and the amount expected to be needed for major repairs or other needs during the following fiscal year;

(iii) A report on the Project operating and replacement reserve accounts summarizing draws of such funds and remaining balances;

(iv) Information on the status of the waiting list for units, including the number of households on the list and the number of City of Pleasanton residents and persons employed in the City on the list;

(v) If rents for any Restricted Units have been increased pursuant to Section

3.3, documentation that the increase in rents is required for Financial Feasibility, and documentation regarding Owner’s efforts to secure additional sources of rent or operating subsidy for the Project;

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13 (vi) 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; and

(vii) In accordance with Section 1.3 of the Note, a calculation of Project surplus cash for the preceding calendar year accompanied by the supporting documentation described in the Note.

City may, in its reasonable discretion, from time to time request additional information, and Owner shall promptly supply such information in the Annual Report.

4.4.2 Annual Budget. In accordance with Section 1.3 of the Note, by not later than November 1 of each year, Owner shall provide to City a proposed Project budget for the following calendar year which shall include estimated Project revenue, expenses and debt service, and an estimate of Surplus Cash. City will review the proposed budget and, if acceptable, approve it, which approval shall not be unreasonably withheld, provided, however, if the proposed budget has not been rejected by City within forty-five (45) days of receipt, City shall be deemed to have accepted the budget. If the budget is not acceptable, City shall specify the reasons for disapproval. Once approved, any changes to the budget that exceed ten percent (10%) of the total budget shall require City's prior written consent, which consent shall not be unreasonably withheld. Upon City’s request, the budget shall include a long-term capital needs and replacement reserve plan supported by a physical needs assessment prepared by a third-party at Borrower’s expense.

4.5 Maintenance and Inspection of Books and Records; Audits.

4.5.1 Maintenance of Books and Records. Owner shall keep and maintain at the Property or Owner’s principal place of business, or elsewhere with City’s consent, full, complete and accurate books, records, and accounts relating to the Project, including all such books, records, and accounts necessary to evidence and substantiate compliance with the City Documents, without limitation, the records required to substantiate compliance with Relocation Laws and if applicable to the Project, California Labor Code Section 1720 et seq. (Prevailing Wage Laws), the calculation of payments required under the Note and the Ground Lease, and the records required to substantiate compliance with this Agreement. Books shall be kept and maintained in accordance with generally accepted accounting principles consistently applied.

Owner shall maintain all records regarding the rehabilitation of the Project for five (5) years after final payment and all other pending matters are closed. Owner shall also maintain tenant leases, income certifications and other matters related to the leasing of the Project for a period of five (5) years after the final date of occupancy by each tenant. If any litigation, claim, negotiation, audit exception, monitoring, inspection or other action relating to the use of the Loan is pending at the end of the record retention period stated herein, then Owner shall retain such records until such action and all related issues are resolved.

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14 4.5.2 Access to Records; Inspection and Audit. Upon request, and with at least two (2) business days’ prior written notice, Owner shall permit the City and its authorized agents and representatives to inspect during normal business hours, those books, records and all other documents of Owner necessary to determine Owner’s compliance with the terms of this Agreement and the other City Documents. All Project books, records, and accounts, and all tax returns and other reports that Owner may be required to furnish to any governmental agency shall be open to and available for audit, inspection and copying by the City, its auditors and other authorized representatives at reasonable intervals during normal business hours upon not less than two (2) business days’ prior written notice. With at least two (2) business days’ 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.

City shall notify Owner of any records it reasonably deems insufficient. Owner shall have fifteen (15) calendar days from such notice to correct any specified deficiency in the records, or, if more than fifteen (15) days shall be reasonably necessary to correct the deficiency, Owner shall begin to correct the deficiency within fifteen (15) days and diligently pursue the correction of the deficiency as soon as reasonably possible.

City’s receipt or acceptance of any statement delivered or payment made by Owner pursuant to this Agreement or the other City Documents shall not bind the City as to the correctness of such statement or payment. Within three (3) years after the receipt of any such statement or payment, the City or its designated agent shall be entitled to audit all books, records, and accounts pertaining to the calculation of payment amounts due under the City Documents.

Such audit shall be conducted upon not less than two (2) business days’ prior written notice during normal business hours at the principal place of business of Owner and other places where Project records are kept. Promptly following completion of an audit, the City shall deliver a copy of the audit results to Owner. If the audit determines that there has been a deficiency in a payment under the Note or the Ground Lease, then subject to Owner’s right to provide a reconciliation of such deficiency to City within 30 days following Owner’s receipt of the audit results, such deficiency shall, if not reconciled to the satisfaction of City, become immediately due and payable with interest at the rate set forth in the Note, accruing from the date that such payment should have been made; provided however, if Owner's failure, refusal, or repeated failure to correctly calculate and/or submit the payment required under the Note or the Ground Lease constitutes an Event of Default, interest shall be payable at the default rate specified in the Note accruing from the date that such payment should have been made. In addition, if the City audit for any period determines that surplus cash payable pursuant to the Note or the Ground Lease during such period exceeds Owner’s calculation by the lesser of (a) five percent (5%) of the amount payable or (b) Five Thousand Dollars ($5,000), then in addition to the interest charges described above, Owner shall pay the City's cost to conduct the audit.

5. Binding Upon Successors; Covenants to Run with the Land. Owner hereby subjects its interest in the Property and the Project to the covenants and restrictions set forth in this Agreement. The City and Owner hereby declare their express intent that the covenants and

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15 restrictions set forth herein shall be deemed covenants running with the land and shall be binding upon and inure to the benefit of the heirs, administrators, executors, successors in interest, transferees, and assigns of Owner and City, regardless of any sale, assignment, conveyance or transfer of the Property, the Project or any part thereof or interest therein. Any successor-in-interest to Owner, including without limitation any purchaser, transferee or lessee of the Property or the 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. 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 other instrument. If any such contract, deed, ground lease or other instrument has been executed prior to the date hereof, Owner hereby covenants to obtain and deliver to City an instrument in recordable form signed by the parties to such contract, deed, ground lease or other instrument pursuant to which such parties acknowledge and accept this Agreement and agree to be bound hereby. Owner agrees for itself and for its successors that in the event that a court of competent jurisdiction determines that the covenants herein do not run with the land, such covenants shall be enforced as equitable servitudes against the Property and the Project in favor of City.

6. Property Management; Repair and Maintenance; Marketing.

6.1 Management Responsibilities. Owner shall be responsible for all management functions with respect to the Property and the 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.

6.2 Management Entity . City shall have the right to review and approve the qualifications of (i) the management entity, and shall have the right to review and approve any agreement executed between Owner and such entity, which approval shall not be unreasonably withheld. The contracting of management services to a management entity shall not relieve Owner of its primary responsibility for proper performance of management duties. City hereby approves Eden Housing Management, Inc., a California nonprofit public benefit 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 or delayed. Upon City determination and delivery of written notice to Owner that Owner 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 Owner 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.

6.3 Repair, Maintenance and Security. Throughout the Term, Owner 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

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16 state, federal, and local laws, ordinances, codes, and regulations. Without limiting the foregoing, Owner 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. Owner 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. Owner shall provide adequate security measures for the Project, including without limitation, the installation of adequate lighting and deadbolt locks.

6.3.1 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 Pleasanton business license if required under local law. To the extent allowed by state and federal laws, Owner shall limit the installation of satellite dish, antenna and other such equipment to screened locations on the Property as approved by the City. Owner shall diligently work to resolve complaints related to noise, parking, litter or other neighborhood concerns related to the Project.

6.4 City’s Right to Perform Maintenance. In the event that Owner breaches any of the covenants contained in Section 6.3, and such default continues for a period of ten (10) days after written notice from City (with respect to graffiti, debris, and waste material) or thirty (30) days after written notice from City (with respect to landscaping, building improvements and general maintenance), then City, in addition to any other remedy it may have under this Agreement or at law or in equity, shall have the right, but not the obligation, to enter upon the Property and perform all acts and work necessary to protect, maintain, and preserve the improvements and the landscaped areas on the Property. All costs expended by City in connection with the foregoing, shall constitute an indebtedness secured by the Deed of Trust, and shall be paid by Owner to City upon demand. All such sums remaining unpaid thirty (30) days following delivery of City’s invoice therefor shall bear interest at the lesser of 10% per annum or the highest rate permitted by applicable law. City shall have a lien against the Project for the amount of such unpaid sums and shall have the right to record a Notice of Claim of Lien against the Project.

6.5 Property Management and Marketing; Form of Residential Lease. Prior to the Closing Date, O wner shall submit to City for City review and approval proposed forms of the following documents for the Project: (i) the property management plan (“Property Management Plan”), (ii) the property management agreement, (iii) a plan for marketing the Property (“Marketing Plan”), and (iv) the form of rental agreement that Owner proposes to enter into with Project tenants. The Marketing Plan shall address in detail how Owner plans to market the Restricted Units to prospective Eligible Households in accordance with fair housing laws and this Agreement. The Property Management Plan shall include descriptions of (i) the procedures to be used to certify the eligibility of prospective tenants; (ii) the management team; and (iii) procedures Owner and the management entity will follow to manage and maintain the Property and the Project. Owner shall abide by the terms of the Marketing Plan and the Property

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17 Management Plan as approved by City, and throughout the Term, shall submit proposed modifications to City for review and approval.

In addition to the foregoing, the Marketing Plan and the Property Management Plan, as applicable, shall address the following:
(a) The actions to be taken by Owner 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 3.9.1 above; (b) Criteria, procedures and policies that will be used to determine 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) Subject to Section 3.9.1, a requirement that eligible tenants be selected based on order of application, lottery or other reasonable method approved by City;

(d) A requirement that eligible applicants be notified of eligibility and 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) Specific procedures through which applicants deemed to be ineligible may appeal this determination;

(g) Maintenance of a waiting list of eligible applicants;

(h) Specific procedures for obtaining documentation regarding prospective tenants’ incomes, as necessary, to certify that such income does not exceed income limits;

(i) Specific procedures for certification and recertification of household incomes and procedures for handling over-income tenants;

(j) A description of actions that will be taken to provide reasonable accommodations to residents as needed;

(k) A requirement that a written rental agreement (in form approved by City) be executed with each Eligible Household selected to occupy a Restricted Unit;

(l) A detailed listing of reasonable rules of conduct and occupancy which

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18 shall be consistent with federal and state law, and a written copy of which shall be provided to each tenant upon occupancy;

(m) 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;

(n) A parking management plan which details, among other things, how parking spaces will be assigned, how guest parking will be handled and how parking will be managed to encourage tenants to use their assigned parking spaces;

(o) Procedures for maintenance and management of the Project;

(p) Procedures for dealing with tenant or neighborhood issues or concerns;

(q) Procedures for maintaining a reserve account, budgeting for maintenance and repair needs as well as long-term rehabilitation needs, and handling net cash flow; and
(r) Such other requirements and criteria/procedures as City may reasonably determine appropriate.

6.6 Approval of Amendments. If City has not responded to any submission of the Property Management Plan, the Marketing Plan, the proposed management entity, the proposed management agreement, 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.

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

6.8 Insurance Coverage. Throughout the Term, Owner shall comply with the insurance requirements set forth in Exhibit B, and shall, at Owner’s expense, maintain in full force and effect insurance coverage as specified in Exhibit B.

6.9 Property Damage or Destruction. If any part of the Project is damaged or destroyed, Owner shall repair or restore the same, consistent with the occupancy and rent restriction requirements set forth in this Agreement. Such work shall be commenced as soon as reasonably practicable after the damage or loss occurs and shall be completed within one

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19 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 senior 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.

6.10 Reserves. Owner shall establish and maintain operating and replacement reserves in the amounts required by Project lenders and investors . City’s advance written consent, which shall not be unreasonably withheld, shall be required for withdrawals from reserves for non-routine expenses exceeding the sum of $ 50,000. If City does not respond within twenty (20) days of City’s receipt of a reserve withdrawal request, such request shall be deemed approved. City will not withhold consent if the withdrawal has been approved by Project lenders and investors if consent by such parties is required.

7. Recordation; No Subordination. This Agreement shall be recorded in the Official Records senior in priority to all deeds of trust recorded against the Project or Owner’s leasehold interest in the Property. Owner hereby represents, warrants and covenants that with the exception of easements of record, absent the written consent of City, this Agreement shall not be subordinated in priority to any lien (other than those pertaining to taxes or assessments), encumbrance, deed of trust, or other interest in the Property or the Project. If at the time this Agreement is recorded, any interest, lien, or encumbrance has been recorded against the Project in position superior to this Agreement, upon the request of City, Owner hereby covenants and agrees to promptly undertake all action necessary to clear such matter from title or to subordinate such interest to this Agreement consistent with the intent of and in accordance with this Section 7, and to provide such evidence thereof as City may reasonably request.

8. Transfer and Encumbrance.

8.1 Restrictions on Transfer and Encumbrance. During the Term, except as permitted pursuant to the Ground Lease or this Agreement, Owner shall not directly or indirectly, voluntarily, involuntarily or by operation of law make or attempt any total or partial sale, transfer, conveyance, assignment or lease (collectively, “Transfer”) of the whole or any part of the Property, the Project, or the improvements located on the Property, without the prior written consent of the City, which approval shall not be unreasonably withheld. In addition, prior to the expiration of the Term, except as expressly permitted by this Agreement or the Ground Lease, Owner shall not undergo any significant change of ownership without the prior written approval of City. For purposes of this Agreement, a “significant change of ownership” shall mean a transfer of the beneficial interest of more than twenty-five percent (25%) in aggregate of the present ownership and /or control of Owner, taking all transfers into account on a cumulative basis; provided however, neither the admission of an investor limited partner, nor the transfer by the investor limited partner to subsequent limited partners shall be restricted by this provision.

8.2 Conditionally Permitted Transfers. Subject to Section 8.3 below, the prohibitions on Transfer set forth in this Section 8, shall not be deemed to prevent: (i) the granting of easements or permits to facilitate development of the Property; (ii) the dedication of any property required pursuant to the Ground Lease; (iii) the lease of individual dwelling units to tenants for

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20 occupancy as their principal residence in accordance with this Agreement; (iv) assignments creating security interests for the purpose of financing the acquisition, rehabilitation, construction, or permanent financing of the Project or the Property provided that such financing is Approved Financing (as defined in the Ground Lease), or Transfers directly resulting from the foreclosure of, or granting of a deed in lieu of foreclosure of, such a security interest; (v) a Transfer of the Project and Owner’s interest in the Property or a Transfer of the limited partner’s interest in Owner to a tax-exempt entity under the direct control of or under common control with Eden Housing Inc., a California nonprofit public benefit corporation (“Eden”); (vi) a Transfer to a limited partnership or limited liability company in which a tax-exempt affiliate of Eden is the managing general partner or managing member/sole member, as applicable; (vii) the admission of limited partners and any transfer of limited partnership interests in accordance with Owner’s agreement of limited partnership (the “Partnership Agreement”); (viii) the removal of Owner’s general partner by the limited partner of Owner for a default under the Partnership Agreement, provided that the replacement general partner is an entity reasonably satisfactory to City or is an affiliate of a limited partner of Owner that will serve as general partner for an interim period of no more than 180 days during which time a permanent replacement general partner reasonably satisfactory to City shall be identified and admitted; (ix) the transfer of the general 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; or (x) the transfer of the Project and Owner’s interest in the Property or a Transfer of the limited partner’s interest in Owner to Owner’s general partner, Eden or an affiliate of Eden pursuant to an option or right of first refusal granted such parties pursuant to the Partnership Agreement.

8.3 Requirements for Proposed Transfers. The City may, in the exercise of its sole discretion, consent to a proposed Transfer of this Agreement, the Project, and Owner’s interest in the Property, or part thereof if all of the requirements set forth in this Section 8.3 are met (provided however, the requirements of this Section 8.3 shall not apply to Transfers described in clauses (i), (ii), (iii), (iv), and (vii) of Section 8.2, and solely with respect to the removal of the general partner by the limited partner for a default under the Partnership Agreement and the replacement of the general partner with an affiliate of the limited partner for an interim period of not more than 180 days, clause (viii) of Section 8.2; provided that the provisions of this Section

8.3 shall apply to the selection of a replacement general partner after such interim period.

(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 rehabilitation of the Project, manage the Project and otherwise fulfill the obligations undertaken by the Owner under this Agreement. The assumption of such obligations shall be documented in an assignment and assumption agreement in form approved by City.

(ii) The Owner 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 Project or this Agreement together with such documentation of the proposed transferee’s qualifications and

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21 development capacity as the City may reasonably request.

(iii) The proposed transferee shall expressly assume all of the rights and obligations of the Owner under this Agreement and the other City Documents arising after the effective date of the Transfer and all obligations of Owner arising prior to the effective date of the Transfer (unless Owner expressly remains responsible for such obligations) and shall agree to be subject to and assume all of Owner’s obligations under this Agreement and the Ground Lease.

(iv) 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, operating agreement, and other organizational documents of the proposed transferee and its general partner(s)/managing member, 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.

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 or requested additional information regarding a proposed Transfer in writing within forty-five (45) days following City’s receipt of written request by Owner, the proposed Transfer shall be deemed approved.

8.4 Effect of Transfer without City Consent. In the absence of specific written agreement by the City, no Transfer of the Project or Owner’s interest in the Property shall be deemed to relieve the Owner 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, Owner assigns or Transfers the Project or Owner’s interest in the Property, or any part thereof of interest therein, or undergoes any other Transfer (including without limitation, any assignment for security or encumbrance of the Property, or the Project, or part thereof) in violation of Section 8.

8.5 Recovery of City Costs. Within ten (10) days following City’s delivery to Owner of an invoice detailing such costs, Owner shall reimburse City for all City costs, including but not limited to reasonable attorneys’ fees, incurred in reviewing instruments and other legal documents proposed to effect any Transfer, and in reviewing the qualifications and financial resources of a proposed transferee.

8.6 Encumbrances. Owner agrees to cooperate with City in good faith to ensure that all deeds of trust or other security instruments and any applicable subordination agreement recorded against Owner’s interest in 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 Owner concurrently with provision of such notice to Owner; and (ii) City shall have the

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22 reasonable right, but not the obligation, to cure any default by Owner within the same period of time provided to Owner for such cure extended by an additional ninety (90) days. Owner agrees to provide to City a copy of any notice of default Owner receives from any Third-Party Lender within three (3) business days following Owner’s receipt thereof.

8.7 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 Owner’s interest in 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 Owner’s interest in the Property that such violation has occurred.

9. Default and Remedies.

9.1 Events of Default. The occurrence of any one or more of the following events shall constitute an event of default hereunder ("Event of Default"):
(i) The occurrence of a Transfer in violation of Section 8 hereof; (ii) Owner’s failure to maintain insurance on the Property and the Project as required hereunder, and the failure of Owner to cure such default within five (5) days; (iii) Subject to Owner’s right to contest the following charges, Owner’s failure to pay prior to delinquency taxes or assessments due on the Property or the Project or failure to pay when due any other charge that may result in a lien on the Property or the Project, and Owner’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; (iv) A default arises under any loan secured by a mortgage, deed of trust or other security instrument recorded against the Project or Owner’s interest in 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) Owner defaults under the Note, the Deed of Trust, or the Ground Lease and such default remains uncured beyond the expiration of any applicable cure period; (vi) Owner defaults 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 Owner, or if the nature of any such non-monetary default is such that it cannot be cured within thirty (30) days, Owner’s failure to commence to cure the default within thirty (30) days and thereafter prosecute the curing of such default to completion with due diligence and in good

4879-3324-5885v3
23 faith, but in no event later than ninety (90) days from receipt of the notice of default.

9.2 Limited Partner’s Right to Cure. Owner’s limited partners shall have the right to cure any default of Owner hereunder upon the same terms and conditions afforded to Owner; 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 Owner 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 Owner.

9.3 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:

(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 Note 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 a charge in an amount equal to the actual amount collected in excess of the Affordable Rent; or
(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, Owner shall indemnify, defend (with counsel approved by City) 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 Owner’s or Owner’s employees’, agents’, contractors’, or subcontractors’ (all of the foregoing, collectively, “Owner’s Parties”) rehabilitation, construction, management, or operation of the Property and the Project, failure to comply with applicable law, including without limitation, State and federal fair housing laws, or any failure to perform any obligation as and when required by this Agreement. Owner’s indemnification obligations set forth in this Section: (i) shall survive the expiration or earlier termination of this Agreement; (ii) shall apply whether or not any insurance policies shall have been determined to be applicable to any Claim, (iii) shall not extend to Claims

4879-3324-5885v3
24 to the extent arising from the gross negligence or willful misconduct of the Indemnitees, and (iv) shall be subject to the additional provisions set forth in Section 10.1.

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 Owner’s obligations to indemnify City and the other Indemnitees, including without limitation, Sections 3.1, 3.10, and

10. In connection with each such provision, all of the following shall apply:

(a) City does not and shall not waive any rights 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 Owner, of any of the insurance policies described in this Agreement or the Ground Lease.

(b) Owner’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 Owner, or any other party for payment of all or any part of the indebtedness evidenced by the Note; (iv) the accuracy or inaccuracy of any representation and warranty made by Owner under this Agreement or by Owner or any other party under any City Document, (v) the release of Owner or any other 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 Note; and (vii) City’s failure to properly perfect any lien or security interest given as security for repayment of the indebtedness evidenced by the Note.

(c) The obligations of Owner to indemnify the Indemnitees shall survive any repayment or discharge of the indebtedness evidenced by the Note, any foreclosure proceeding, any foreclosure sale, any delivery of any deed in lieu of foreclosure, any release of record of the lien of the Deed of Trust, and the termination or expiration of this Agreement.

11. Miscellaneous.

11.1 Amendments. This Agreement may be amended or modified only by a written instrument signed by both Parties and recorded in the Official Records.

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

4879-3324-5885v3
25 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 Pleasanton
P.O. Box 520
123 Main Street
Pleasanton, CA 94566
Attention: City Manager

With a copy to: Burke, Williams & Sorensen, LLP
1999 Harrison Street, Suite 1650
Oakland, CA 94612
Attention: Susan E. Bloch, Esq.

Owner: Ridge View Commons II Associates, L.P. c/o Eden Housing, Inc.
22645 Grand Street
Hayward, California 84541
Attention: President

With a copy to: Gubb & Barshay LLP
235 Montgomery Street, Suite 1110
San Francisco, CA 94104
Attention: Nicole Kline, Esq.

With a copy to:

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

11.5 Parties Not Co-Venturers; 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 Owner 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 Owner (except as expressly provided in this

4879-3324-5885v3
26 Agreement) or to any third party with respect to the Project. Owner and its employees are not employees of City but rather are, and shall always be considered independent contractors.

Furthermore, Owner 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, Owner shall not have any authority to act as an agent of City or to bind City to any obligation.

11.6 Action by the City. Except as may be otherwise specifically provided herein, whenever any approval, notice, direction, consent or request by the City is required or permitted 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.

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

11.8 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. Except as otherwise expressly stated herein, any reference to a particular section of this Agreement shall mean a reference to all subsections of such section. 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 Pleasanton 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.

11.9 Time is of the Essence. Time is of the essence in the performance of this Agreement.

11.10 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.

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

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

11.13 Entire Agreement; Exhibits. This Agreement, together with the Note, the Deed of Trust, and the Ground Lease 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

4879-3324-5885v3
27 respect thereto. Exhibits A and B, attached hereto are incorporated herein by this reference.

11.14 Survival. Owner’s obligations pursuant to Sections 3.1, 3.10, and 10, and all other provisions that expressly so state shall survive the expiration or termination 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.

SIGNATURES ON FOLLOWING PAGE(S).

4879-3324-5885v3 28
IN WITNESS WHEREOF, the Parties have executed this Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants as of the date first written above.

CITY:

City of Pleasanton, a municipal corporation

By: _______________________________
Gerry Beaudin, City Manager

ATTEST:
_____________________________
Jocelyn Kwong, City Clerk

APPROVED AS TO FORM:

____________________________________
Daniel G. Sodergren, City Attorney

OWNER:

Ridge View Commons II Associates, L.P., a California limited partnership

By: Ridge View Commons LLC,
a California limited liability company,
its general partner

By: Eden Investments, Inc.,
a California nonprofit public benefit corporation,
its sole member/manager

By: ____________________________
Andrea Osgood, Chief of Real Estate Development and
Executive Vice President

SIGNATURES MUST BE NOTARIZED.

4879-3324-5885v3 29

ACKNOWLEDGMENT

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)
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.

4879-3324-5885v3 30

ACKNOWLEDGMENT

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)
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.

4879-3324-5885v3 31
Exhibit A

LEGAL DESCRIPTION OF THE PROPERTY

The land referred to is situated in the City of Pleasanton, County of Alameda, State of California, and is described as follows:

PARCEL ONE:

ALL BUILDINGS AND OTHER IMPROVEMENTS WHICH BUILDINGS AND IMPROVEMENTS ARE AND SHALL REMAIN AS REAL PROPERTY, SITUATED ON THE FOLLOWING DESCRIBED:

PARCEL 2 AS SHOWN ON PARCEL MAP NO. 5231, FILED APRIL 22, 1988, IN BOOK 176 OF MAPS AT PAGES 40 AND 41, ALAMEDA COUNTY RECORDS.

PARCEL TWO:

PARCEL 2 AS SHOWN ON PARCEL MAP NO. 5231, FILED APRIL 22, 1988, IN BOOK 176 OF MAPS AT PAGES 40 AND 41, ALAMEDA COUNTY RECORDS.

EXCEPTING FROM PARCEL TWO ALL BUILDINGS AND OTHER IMPROVEMENTS SITUATED ON ABOVE SAID LAND, WHICH ARE AND SHALL REMAIN AS REAL PROPERTY.

APN: 947-0008-010

4879-3324-5885v3 32
Exhibit B

INSURANCE REQUIREMENTS – subject to City review.

Prior to initiating work on the Project and continuing through throughout the Term, Owner shall obtain and maintain the following policies of insurance:

(a) Commercial General Liability. Owner shall maintain a commercial general liability policy in the amount of Two Million Dollars ($2,000,000) each occurrence, Four Million Dollars ($4,000,000) annual aggregate, together with Ten Million Dollars ($10,000,000) excess liability coverage, or such other policy limits as City may require in its reasonable discretion, including coverage for bodily injury, property damage, products, completed operations and contractual liability coverage. Such policy or policies shall be written on an occurrence basis and shall name the Indemnitees as additional insureds.

(b) Automobile. if Owner owns any vehicles, a comprehensive automobile liability coverage in the amount of Two Million Dollars ($2,000,000), combined single limit including coverage for owned and non-owned vehicles and shall furnish or cause to be furnished to City evidence satisfactory to City that Owner and any contractor with whom Owner has contracted for the performance of work on the Property or otherwise pursuant to this Agreement carries workers’ compensation insurance as required by law. Automobile liability policies shall name the Indemnitees as additional insureds.

(c) Workers’ Compensation and Employer’s Liability. Owner shall furnish or cause to be furnished to City evidence satisfactory to City that Owner (if it has any employees) and any contractor that has contracted for the performance of work on the Property or otherwise pursuant to this Agreement carries statutory Workers’ Compensation insurance and Employer’s Liability insurance in a minimum amount of One Million Dollars ($1,000,000) per accident.

(d) Builder’s Risk. Upon commencement of construction work and continuing until issuance of a final certificate of occupancy or equivalent for the Project, Owner and all contractors working on behalf of Owner 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 with a lender’s loss payable endorsement for the benefit of City.

(e) Professional Liability/Errors and Omissions. Owner shall require the Project architect, engineer, and general contractor to maintain Professional Liability/Errors and Omissions (“E&O”) insurance with limits not less than Two Million Dollars ($2,000,000) each claim. The City’s Risk Manager may approve lower limits for professionals that will provide a limited scope of services for the Project. Certificates evidencing this coverage must reference both the Owner and the Indemnitees. If the professional liability/errors and omissions insurance is written on a claims made form: (i) the retroactive date must be shown and must be before the Effective Date, (ii) insurance must be maintained and evidence of insurance must be provided for at least three (3) years after completion of Project rehabilitation, and (iii) if coverage is cancelled or non-renewed and not replaced with another claims made policy form with a retroactive date prior to the Effective Date, Owner must purchase, or require the provision of, extended period

4879-3324-5885v3 33
coverage for a minimum of three (3) years after completion of construction. (f) Pollution Legal Liability. Owner shall require the general contractor to carry pollution liability insurance to provide third-party coverage for bodily injury, property damage, cleanup, and related defense costs, with limits not less than One Million ($1,000,000) per occurrence or claim and Two Million ($2,000,000) policy aggregate. If the policy provides coverage on a claims-made basis, the retroactive date must be shown and must be before the Closing Date.
(g) Property Insurance. Owner shall maintain property insurance covering all risks of loss (other than earthquake), including flood (if required) for 100% of the replacement value of the Project with deductible, if any, in an amount acceptable to City, with a lender’s loss payable endorsement for the benefit of City.
(h) Insurance Providers. 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.

(i) Evidence of Insurance; Endorsements; Policies. Prior to the Effective Date of this Agreement, Owner shall furnish City with certificates of insurance in form acceptable to City evidencing the required insurance coverage and duly executed endorsements required hereunder.

The certificates shall contain a statement of obligation on the part of the carrier to notify City of any material adverse change, cancellation, termination or non-renewal of the coverage at least thirty (30) days in advance of the effective date of any such material adverse change, cancellation, termination or non-renewal. Upon request by the City Attorney, Owner shall provide or arrange for the insurer to provide within thirty (30) days of the request, certified copies of the actual insurance policies or relevant portions thereof.

(j) Additional Insured Endorsements. The additional insured endorsements for the general liability coverage shall use Insurance Services Office (ISO) Form No. CG 20 09 11 85 or CG 20 10 11 85, or equivalent, including (if used together) CG 2010 10 01 and CG 2037 10 01; but shall not use the following forms: CG 20 10 10 93 or 03 94.

(k) Reinstatement. If any insurance policy or coverage required hereunder is canceled or reduced, Owner shall, within five (5) days after receipt of notice of such cancellation or reduction in coverage, but in no event later than the effective date of cancellation or reduction, file with City a certificate showing that the required insurance has been reinstated or provided through another insurance company or companies. Upon failure to so file such certificate, City may, without further notice and at its option, procure such insurance coverage at Owner’s expense, and Owner shall promptly reimburse City for such expense upon receipt of billing from City. Owner shall require all persons and entities that are required to provide professional liability/E&O coverage pursuant to paragraph (e) above to use best efforts to reinstate the required coverage limits in the event coverage under such policies is reduced.

(l) Coverage; Waiver of Subrogation; Annual Aggregate Limits. All coverage shall be primary insurance and shall not be contributing with any insurance, or self-insurance maintained by City, and the policies shall so provide. Each insurance policy shall contain a

4879-3324-5885v3 34
waiver of subrogation for the benefit of the City. Owner agrees to waive subrogation rights for commercial general liability, automobile liability, and worker’s compensation against Indemnitees regardless of the applicability of insurance proceeds, and agrees to require all contractors and subcontractors to do likewise. With the exception of E&O policies, if any of the required insurance is provided under a form of coverage that includes an annual aggregate limit or provides that claims investigation or legal defense costs are included in such annual aggregate limit, such annual aggregate limit shall be three times the applicable occurrence limits specified above.

(m) Deductibles/Retentions. Any deductibles or self-insured retentions shall be declared to, and shall be subject to approval by, the City Attorney. At the option of and upon request by the City Attorney if the City Attorney determines that such deductibles or retentions are unreasonably high, either the insurer shall reduce or eliminate such deductibles or self- insurance retentions as respects the Indemnitees or Owner shall procure a bond guaranteeing payment of losses and related investigations, claims administration and defense expenses.

(n) Adjustments. The 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 Effective Date nor more than once in every three (3) year period) to address changes in circumstances, including, but not limited to, changes in inflation 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 City’s delivery of written notice of any such adjustments, Owner shall provide City with amended or new insurance certificates and endorsements evidencing compliance with such adjustments.

(o) Additional Insured Coverage; Liability Limits. For all liability insurance required by this Agreement except E&O and Workers’ Compensation policies, Owner (and Owner’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 Owner (and Owner’s contractors) to obtain and provide for the benefit of the Indemnitees, additional insured coverage in the same amount of insurance carried by Owner (or Owner’s contractors, as applicable), but in no event less than the minimum amounts specified in this Agreement. In the event that Owner (or Owner’s contractors as applicable) obtains 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 the minimum amounts specified in this Agreement.

Resolution No.

EXHIBIT B
Amended and Restated Ground Lease

OAK #4823-7863-2026 v6

GROUND LEASE

by and between

CITY OF PLEASANTON, AS LESSOR

and

RIDGE VIEW COMMONS ASSOCIATES II, L.P., AS LESSEE

Ridge View Commons

TABLE OF CONTENTS
PAGE
i
4859-3312-3005v3
ARTICLE 1. DEFINITIONS .................................................................................................... 1 Section 1.1 Definitions.................................................................................................. 1 Section 1.2 Exhibits ...................................................................................................... 7 ARTICLE 2. LEASE OF THE LAND ...................................................................................... 7 Section 2.1 Lease of Land ............................................................................................. 7 Section 2.2 Term ........................................................................................................... 7 Section 2.3 Use ............................................................................................................. 7 Section 2.4 Possession .................................................................................................. 8 Section 2.5 Memorandum of Lease .............................................................................. 8 Section 2.6 AS-IS Conveyance………………………………………………………..8
Section 2.7 Lessee to Rely on Own Experts…………………………………………..9 ARTICLE 3. THE IMPROVEMENTS
Section 3.1 Construction ............................................................................................... 9 Section 3.2 Liens ......................................................................................................... 10 Section 3.3 Permits, Licenses and Easements ………………………………….

Section 3.4 Title to Improvements .............................................................................. 11 Section 3.5 Benefits of Improvements During Term .................................................. 11 ARTICLE 4. RENTS .............................................................................................................. 12 Section 4.1 Ground Rent ............................................................................................. 12 Section 4.2 Payments .................................................................................................. 12 ARTICLE 5 TAXES AND OTHER IMPOSITIONS; UTILITIES ...................................... 12 Section 5.1 Payment of Impositions ........................................................................... 12 Section 5.2 Possessory Interest Taxes ........................................................................ 13 Section 5.3 Contested Taxes and Other Impositions .................................................. 13 Section 5.4 Valuation Assessment/Property Tax Exemption ..................................... 13 Section 5.5 Failure to Pay Impositions ....................................................................... 13 Section 5.6 Utilities ..................................................................................................... 13 ARTICLE 6. INSURANCE .................................................................................................... 14 Section 6.1 Required Insurance Coverage .................................................................. 14 Section 6.2 Insurance Policies and Premiums ............................................................ 15 Section 6.3 Proceeds of Insurance .............................................................................. 16 ARTICLE 7. MAINTENANCE, ALTERATIONS, REPAIRS AND
REPLACEMENTS ............................................................................................ 17

ii
4859-3312-3005v3
Section 7.1 Maintenance of Leased Premises; Landscaping ...................................... 17 Section 7.2 Landscaping Maintenance ....................................................................... 18 Section 7.4 Indemnification ........................................................................................ 18 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 ................................................................... 23 Section 8.5 Notice and Right to Cure Defaults Under Approved Loans .................... 23 Section 8.6 Rights of Investor ..................................................................................... 23 Section 8.7 Right to Pay Taxes and Senior Mortgage ................................................ 23 ARTICLE 9. REPRESENTATIONS, WARRANTIES AND COVENANTS ....................... 23 Section 9.1 Representations, Warranties and Covenants of Lessee ............................ 25 Section 9.2 Relocation ................................................................................................ 25 Section 9.3 Hazardous Materials Indemnification ...................................................... 26 Section 9.4 Prevailing Wage Requirements ................................................................ 26 Section 9.5 Compliance with Laws ............................................................................ 27 Section 9.6 Affordability and Use Restrictions .......................................................... 27 Section 9.7 Preference for City of Pleasanton Residents and Employees .................. 27 Section 9.8 Reporting Requirements; Access to Information; Inspections ................ 29 Section 9.9 Fair Housing
Section 9.10 Management Entity
ARTICLE 10 EMINENT DOMAIN ........................................................................................ 30 Section 10.1 Termination of Lease ............................................................................... 30 Section 10.2 Continuation of Lease and Presumption of Restoration .......................... 30 Section 10.3 Temporary Taking ................................................................................... 30 Section 10.4 Joinder ...................................................................................................... 32 ARTICLE 11. DAMAGE OR DESTRUCTION ...................................................................... 32 Section 11.1 Damage or Destruction to Leased Premises ............................................ 32 Section 11.2 Damage or Destruction Near End of Term .............................................. 33 Section 11.3 Distribution of Insurance Proceeds .......................................................... 33 Section 11.4 Insurance Coverage .................................................................................. 33

iii
4859-3312-3005v3
ARTICLE 12. EVENTS OF DEFAULT .................................................................................. 33 Section 12.1 Events of Default ..................................................................................... 33 Section 12.2 Rights and Remedies................................................................................ 35 Section 12.3 Default by Lessor ..................................................................................... 36 Section 12.4 Notices ..................................................................................................... 37 ARTICLE 13. QUIET ENJOYMENT AND POSSESSION; INSPECTIONS ........................ 37 Section 13.1 Quiet Enjoyment ...................................................................................... 37 Section 13.2 Lessor’s Right of Inspection .................................................................... 37 ARTICLE 14. VACATION OF LEASED PREMISES ............................................................ 37 Section 14.1 Vacation Upon Termination .................................................................... 37 ARTICLE 15. NON-MERGER ................................................................................................ 37 Section 15.1 Non-Merger.............................................................................................. 37 ARTICLE 16. TRANSFERS .................................................................................................... 38 Section 16.1 Permitted Transfer by Lessee ................................................................... 38 ARTICLE 17. MISCELLANEOUS PROVISIONS ................................................................. 39

Exhibit A: Legal Description of the Leased Premises
Exhibit B: Form of Memorandum of Lease
Exhibit C: Regulatory Agreement
Exhibit D: Note

1 4859-3312-3005v2

GROUND LEASE
(Ridge View Commons)

This Ground Lease (the “Lease”) dated as of ___________, 2024, is entered into by and between City of Pleasanton, a California municipal corporation (“Lessor”) and Ridge View Commons II Associates, L.P., a California limited partnership (“Lessee”).

RECITALS
A. Lessor is the owner of the real property located at 5200 Case Avenue in the City of Pleasanton, known as Alameda County Assessor’s Parcel No. 947-0008-010, and more particularly described in Exhibit A attached hereto (the “Land”).

B. Lessor and Eden Housing, Inc., a California nonprofit public benefit corporation (“Eden”), entered into that certain Ground Lease of the Land dated as of June 1, 1988 (the “Original Ground Lease”), a short form of which was recorded in the Official Records of Alameda County (“Official Records”) on June 9, 1988 as Instrument No. 88-138518. The Original Ground Lease was amended by that certain Amendment to Ground Lease and Short Form Ground Lease dated June 27, 1988, executed by City and Eden, and recorded in the Official Records on June 30, 1988 as Instrument No. 88-157652. Pursuant to an Assignment of Lease dated October 31, 1989, executed by and among City, Eden, and Ridge View Commons Associates, a California limited partnership (“Ridge View”), and recorded in the Official Records on November 14, 1989 as Instrument No. 89-308001, Eden assigned its rights under the Original Ground Lease (as amended) to Ridge View. The Original Ground Lease as amended and assigned is referred to herein as the “Prior Ground Lease”. During the term of the Prior Ground Lease, Ridge View was the owner of the 200-unit multi-family residential project and related improvements located on the Land (the “Project”).

C. Substantially concurrently with the execution and delivery of this Lease, Ridge View will sell the Project to Lessee.

D. This Lease supersedes and replaces the Prior Ground Lease in its entirety.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Lessor and Lessee hereby agree as follows:

ARTICLE 1.

DEFINITIONS
Section 1.1 Definitions. For the purposes of this Lease, the following terms shall have the meanings set forth in this Article 1:
“Additional Rent” means all sums payable by Lessee to Lessor pursuant to this Lease other than Rent, including without limitation, sums payable to reimburse Lessor for the following, together with applicable interest and penalties thereon: (i) amounts paid by Lessor to discharge liens and claims pursuant to Section 3.2, (ii) Impositions paid by Lessor pursuant to

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Section 5.5, (iii) amounts paid by Lessor pursuant to Section 7.2, and (iv) amounts paid by Lessor to cure Lessee defaults under loans secured by the Leased Premises and the Improvements.
“Affordable Rent” is defined in the Regulatory Agreement. “Applicable Laws” is defined in Section 9.7.
“Approved Loans” means the Senior Loan, the Seller Loan, and the City Loan, and other loans obtained from time to time by Lessee for the rehabilitation, construction and permanent financing of the Improvements, as approved by Lessor, which approval will not be unreasonably withheld.
“Casualty” is defined in Article 11 hereof.
“City” means the City of Pleasanton, California.
“City Documents” means collectively, this Lease, the Regulatory Agreement, the Note and the Deed of Trust.
“City Loan” means the financing provided by Lessor to Lessee’s predecessor in interest in connection with the development of the Project. Lessor has assumed the obligation to repay the City Loan, as evidenced by the Note and secured by the Deed of Trust. “City Manager” means the City Manager of the City of Pleasanton. “Claims” means collectively: claims, demands, 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, remedial action requirements, and enforcement actions of any kind. “Construction Plans” means all construction documents upon which Lessee and Lessee’s contractors shall rely in rehabilitating 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. “County” means the County of Alameda, California.
“Commencement Date” means the date that the Memorandum is recorded in the Official Records.
“CTCAC Regulatory Agreement” means the agreement to be executed by Lessee and CTCAC that sets forth certain affordability restrictions and other terms and conditions pertaining to operation of the Project, and that will be recorded against Lessee’s Estate following completion of rehabilitation of the Improvements and the conversion of the Project construction loan.

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“CTCAC” means the California Tax Credit Allocation Committee. “CTCAC Rider” means the CTCAC Lease Rider that will be recorded against the Land and the Leased Premises in form approved by Lessor, Lessee, and CTCAC following completion of rehabilitation of the Improvements and the conversion of the Project construction loan. “Deed of Trust” means that certain Amended and Restated Leasehold Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing dated as of the date hereof, executed by Lessee as Trustor for the benefit of Lessor as Beneficiary and securing Lessee’s obligation to repay the City Loan.
“Eden” is defined in Recital B.
“Eligible Household” is defined in the Regulatory Agreement. “Environmental Laws” means all federal, state or local statutes, ordinances, rules, regulations, orders, decrees, judgments or common law doctrines, and provisions and conditions of permits, licenses and other operating authorizations regulating, or relating to, or imposing liability or standards of conduct concerning (i) pollution or protection of the environment, including natural resources; (ii) exposure of persons, including employees and agents, to Hazardous Materials 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.
“Event of Default” is defined in Article 12 of this Lease. “Governmental Authorities” means all federal, State and local governmental or quasi- governmental entities, subdivisions, agencies, authorities or instrumentalities having jurisdiction over the Leased Premises, the Improvements, Lessor or Lessee. “Hazardous Materials” means 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

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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 biphenyls; 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. “HUD” means the U.S. Department of Housing and Urban Development. “Impositions” means 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 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. “Improvements” or “Project” means the affordable senior housing development comprised of 200 multi-family residential dwelling units located on the Land, all of which, other than two (2) manager’s units, will be restricted for occupancy by Eligible Households at Affordable Rents in accordance with the Regulatory Agreement, and related improvements, including without limitation, the following: community space, parking, and related ancillary facilities, together with any and all replacements or substitutions therefor or modifications thereto, in accordance with all City approvals and use conditions applicable to the Leased Premises. The Improvements will be rehabilitated in accordance with construction plans approved by the City.
“Indemnitees” means collectively, Lessor and its elected and appointed officers, officials, employees, agents, contractors, consultants and representatives. “Insurance Requirements” means the 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.

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“Investor” means the low income housing tax credit investor that will provide equity to the Project and all permitted successors and assigns. __________________ is the initial Investor. “Land” is defined in Recital A.
“Lease Year” means a calendar year during the term of this Lease. “Leased Premises” means the Land, together with all easements, licenses, privileges and appurtenances attaching or in any way belonging thereto. “Leasehold Mortgage” means any mortgage, deed of trust, security agreement or collateral assignment pursuant to an Approved Loan encumbering Lessee’s Estate as a leasehold mortgage lien.
“Legal Requirements” means 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.
“Lender” means the holder, mortgagee, grantee or secured party under any Leasehold Mortgage, including, without limitation, the Senior Lender. “Lessee’s Estate” or “Leasehold Estate” means during the Term of this Lease, Lessee’s leasehold interest in the Land and Lessee’s fee ownership interest in the Improvements. “Lessor’s Estate” means Lessor’s fee estate in the Land and reversionary interest in the Improvements pursuant to this Lease.
“Management Agent” means the person or entity designated from time to time as “Management Agent” of all or any portion of the Improvements under any property management agreement entered into from time to time with Lessee.
“Memorandum” means the Memorandum of Ground Lease to be executed by the Parties substantially in the form attached hereto as Exhibit B and recorded in the Official Records as of the Commencement Date.
“Note” means that certain Amended and Restated Secured Promissory Note dated as of the date hereof, executed by Lessee for the benefit of Lessor and evidencing Lessee’s obligation to repay the City Loan. The form of Note is attached hereto as Exhibit D. “Net Condemnation Award” means 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
“Official Records” means the Official Records of Alameda County.

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“Party” means Lessor or Lessee, as applicable. Lessor and Lessee shall be referred to collectively as the “Parties.”
“Permitted Encumbrances” means permitted title encumbrances as defined in Section

9.1(a).
“Project” means the Improvements as defined above.
“Regulatory Agreement” means that certain Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants dated as of the date hereof, executed by Lessor and Lessee and recorded concurrently with execution of this Lease. The Regulatory Agreement is attached hereto as Exhibit C, and is incorporated into this Lease. “Rent” is defined in Section 4.1 hereof.
“Seller Loan” means that certain Seller carryback loan to be provided by Ridge View to Lessee in the amount of approximately [Five Million Two Hundred Sixteen Thousand Five Hundred Thirty-Five Dollars ($5,216,535)].
“Seller Deed of Trust” means that certain Short Form Leasehold Deed of Trust and Assignment of Rents dated as of [June 1, 2024], executed by Lessee for the benefit of Ridge View and to be recorded in the Official Records on the Commencement Date. “Senior Loan” means that certain construction loan in the original principal amount of approximately [Thirty-Nine Million, Six Hundred Sixty-Eight Thousand, Six Hundred Dollars ($39,668,600)] to be provided to Lessee by Senior Lender. “Senior Loan Documents” means all documents executed by Lessee evidencing or securing the Senior Loan.
“Senior Lender” means Silicon Valley Bank, a division of First-Citizens Bank & Trust Company.
“Senior Deed of Trust” means that certain Construction and Permanent Leasehold Deed of Trust, with Assignment of Leases and Rents, Security Agreement and Fixture Filing, securing Lessee’s obligation to repay the Senior Loan, dated as of [May 1, 2024], executed by Lessee for the benefit of California Housing Finance Agency, a public instrumentality and political subdivision of the State of California (“CalHFA”), to be recorded in the Official Records on the Commencement Date, and for which CalHFA’s beneficial interest has been assigned to [Senior Lender] [First-Citizens Bank & Trust Company].
“Surplus Cash” is defined in the Note.
“Taking” means 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

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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. “Tenant” means any tenant that has the right to reside in a residential unit in the Project pursuant to a Tenant Lease.
“Tenant Lease” means any lease or rental agreement entered into by Lessee with a Tenant.
“Term” is defined in Section 2.2 hereof.
“Transfer” is defined in the Regulatory Agreement.

Section 1.2 Exhibits. The following exhibits are attached hereto and are incorporated into this Lease:

Exhibit A: Legal Description of the Land
Exhibit B: Form of Memorandum of Lease
Exhibit C: Regulatory Agreement
Exhibit D: Note

ARTICLE 2.

LEASE OF THE LAND
Section 2.1 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 2.2 Te
rm. 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 at midnight the day immediately preceding the seventy-fifth (75th) anniversary thereof.

Section 2.3 Us e. Subject to the provisions hereof, Lessee shall use the Leased Premises for the rehabilitation and operation of the Project, which includes the redevelopment, construction, 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) not to use the Leased Premises for any disorderly or unlawful purpose; (b) to use reasonable efforts to prevent any Tenant from committing or maintaining any nuisance or unlawful conduct on or about the Leased Premises;

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(c) to use reasonable efforts to prevent any action by any Tenant that would cause Lessee to violate any of the covenants and conditions of this Lease with respect to the Improvements;
(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; 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 2.4 Possession; Permitted Encumbrances. Lessor shall provide possession of the Leased Premises to Lessee on the Commencement Date. Lessor hereby approves the encumbrances associated with the Senior Loan, the City Loan, and the Seller Loan, provided that: (i) the Regulatory Agreement shall remain senior in lien priority to the Senior Deed of Trust and the Seller Deed of Trust, and (ii) the City Deed of Trust shall remain senior in lien priority to the Seller Deed of Trust. Lessor agrees to permit recordation of the CTCAC Rider against the Land and Lessee’s Estate, and agrees to permit recordation of the CTCAC Regulatory Agreement against Lessee’s Estate, each in form approved by Lessor, Lessee, and CTCAC.

Section 2.5 Mem
orandum of Lease. The Parties shall execute and acknowledge a memorandum of ground lease, substantially in the form attached hereto as Exhibit B, which shall be recorded at Lessee’s expense
Section 2.6 AS-I S 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, parking facilities, (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 2.7 L
essee to Rely on Own Experts. Lessee understands that notwithstanding the delivery by Lessor to Lessee of any materials, including, without limitation, third party reports, Lessee will rely entirely on Lessee’s own experts and consultants and its own independent investigation in proceeding with the leasing of the Leased Premises.

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ARTICLE 3.

THE IMPROVEMENTS
Section 3.1 Construction. Lessee shall cause the Improvements to be rehabilitated in compliance with the Construction Plans approved by City and the terms and conditions of Project land use permits and approvals and building permits. Any and all Improvements constructed or rehabilitated by or on behalf of Lessee shall be constructed and rehabilitated in a good and workmanlike manner, in compliance with all applicable Legal Requirements. Lessee shall bear the entire and sole cost of planning, designing, engineering, financing, constructing, rehabilitating, supervising, and inspecting the Improvements, including all fees and mitigation measures. Lessor acknowledges that as of the Commencement Date, the City has approved the Construction Plans.

Section 3.2 Li
ens. 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, rehabilitation, 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, and with utility easements and other customary easements necessary and incidental to the development, rehabilitation, 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.

The Lessee shall not create or permit or suffer to be created or to remain upon the Lessor’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, 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. 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 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 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. 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

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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 a mechanic’s lien or work, 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 3.3 Permits, Licenses and Easements. Lessor agrees to use reasonable efforts to assist Lessee in obtaining 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 to grant, or to assist Lessee in 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 operation of the Improvements. Payment of all fees, costs and expenses associated with any of the foregoing shall be the responsibility of Lessee, and Lessor shall have no responsibility to pay any such fees, costs or expenses.

Section 3.4 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

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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. (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.

Section 3.5 B
enefits of Improvements 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, substitutions therefor, fixtures therein and other property relating thereto shall be deducted or credited exclusively by Lessee during the Term.

ARTICLE 4.

RENTS
Section 4.1 Ground Rent. Subject to the provisions of this Section, during the period commencing on the Commencement Date and ending on the fifty-fifth (55th) anniversary of the Commencement Date, Lessee shall pay rent to Lessor in the aggregate amount of Five Million Dollars ($5,000,000) (“Aggregate Rent”). During the 15- year period commencing upon the Project placed -in-service date, by not later than June 30 of each Lease Year, Lessee shall pay to Lessor thirty-three and 33/100 percent (33.33%) of all Surplus Cash (as defined in and calculated pursuant to the Note) generated by the Project during the previous calendar year.

Commencing upon the earlier of (a) the commencement of the sixteenth (16 th) year following the
Project placed-in-service date, and (b) the date that any deferred developer fee has been fully paid, annual payments due under this Section shall increase to equal fifty percent (50%) of Surplus Cash generated by the Project during the previous calendar year. Each payment of Surplus Cash due pursuant to this Section shall be considered “Rent” due and payable hereunder; provided however, Lessee acknowledges that in Lessor’s sole discretion, by written notice to Lessee, Lessor may elect to apply Lessee’s payments of Surplus Cash toward the

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balance payable under the Note in lieu of treating such payments as Rent. Any unpaid balance of Aggregate Rent shall be due and payable by not later than June 30, 2079.

Section 4.2 Payments. All Rent, Additional Rent, and other sums, if any, due 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.

ARTICLE 5.

TAXES AND OTHER IMPOSITIONS; UTILITIES
Section 5.1 Payment 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 5.2 P
ossessory Interest Taxes. 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 5.3 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.

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) As may be necessary or desirable, Lessor or Lessee, as applicable, upon the request of the other Party, shall use reasonable efforts to assist in any such proceeding to contest the validity or amount of any Imposition.

Section 5.4 Valuation 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 shall 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

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this Lease for any assistance (or limitation of assistance) provided to Lessee pursuant to this Section.

Section 5.5 Failure to Pay Impositions. If Lessee fails 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 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 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 5.6 U
tilities. Lessee shall pay all charges for all utilities used, rendered or supplied upon or in connection with the Improvements and the operation, rehabilitation 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 rents 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 provide in the applicable Tenant Lease. Notwithstanding any contrary provision of this Lease, Lessor shall have no responsibility for payment of any Utility Charges.

ARTICLE 6.

INSURANCE
Section 6.1 Required Insurance Coverage. Throughout the term of this Lease, Lessee shall maintain the following policies of insurance and shall comply with the requirements set forth in this Article 6 and the requirements set forth in Exhibit B of the Regulatory Agreement. (a) P
roperty Insurance. Lessee shall 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 Improvements. (b) L
iability and Property Damage Insurance . During the Lease Term, Lessee shall keep in full force and effect a policy or policies of comprehensive general liability and property damage insurance against liability for bodily injury to or death of any person or property damage arising out of an occurrence on or about the Leased Premises. The limits of such insurance shall be not less than Two Million Dollars ($2,000,000) combined single limit each occurrence, Four Million Dollars ($4,000,000) annual aggregate, together with Ten Million Dollars ($10,000,000) excess liability coverage, or such other policy limits as Lessor may require in its reasonable discretion, including coverage for bodily injury, property damage, hired and non-owned automobile liability, products, completed operations and contractual liability coverage. (c) W
orkers’ Compensation Insurance . Lessee shall require all contractors performing work on the Leased Premises to carry workers’ compensation insurance covering all

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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. (d) Builders’ 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 with a lender’s loss payable endorsement for the benefit of Lessor. 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.

Section 6.2
Insurance 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. Duplicate copies of such policies or certificates of such insurance shall be promptly furnished to Lessor. (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 five (5) 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) Coverage provided by Lessee shall 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

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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. (f) Deductibles/Retentions. Any deductibles or self-insured retentions shall be declared to, and shall be subject to Lessor approval. At the option of and upon request by the Lessor, if Lessor determines that such deductibles or retentions are unreasonably high, either the insurer shall reduce or eliminate such deductibles or self-insurance retentions as respects the Indemnitees or Lessee shall procure a bond guaranteeing payment of losses and related investigations, claims administration and defense expenses. (g) A
djustments . The 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 inflation 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.
(h) A
dditional Insured. For all liability insurance required by this Lease, 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 Lease. This Lease 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 Lease. 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 Lease, the actual limits provided by such policies shall be deemed to be the amounts required under this Lease. Without limiting the foregoing, the limits of liability coverage specified in this Lease are not intended, nor shall they operate, to limit Lessor’s ability to recover amounts in excess of such minimum amounts.

Section 6.3 P
roceeds of Insurance.
(a) For so long as the Senior Deed of Trust or any deed of trust securing a loan approved by Lessor that refinances the Senior Loan, 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) the Senior Lender or the holder of the refinanced Senior Loan permits 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.

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(b) If the Improvements are not repaired or rebuilt, all such proceeds shall be applied in a manner consistent with the terms of the Senior Deed of Trust or if the Senior Deed of Trust is not outstanding, shall be applied in a manner consistent with the City Deed of Trust. (c) In the event that none of the Senior Deed of Trust, any deed of trust securing a refinancing of the Senior Loan, nor the City Deed of Trust are 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. (d) To the extent any of the above provisions are inconsistent with the provisions of the Senior Loan Documents, the Senior Loan Documents shall control.

ARTICLE 7.

MAINTENANCE, ALTERATIONS, REPAIRS AND REPLACEMENTS
Section 7.1 Maintenance of Leased Premises; Landscaping. During the Term, at Lessee’s sole cost and expense, Lessee shall keep and maintain the Leased Premises, all Improvements, and all appurtenances thereto, 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 L
andscaping Maintenance.
(a) Lessee, at no expense to the Lessor, 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. “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. (b) If, in the reasonable judgment of the City Engineer, Lessee has failed to maintain properly any landscaping as required by this Lease, the Lessor may perform such maintenance, at its 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.
(c) 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

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Engineer, and such maintenance is not performed, or cannot be performed, 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.

Section 7.3 Alterations to Leased Premises. Lessee may make additions, alterations or changes in or to the Improvements (“Alterations”) subject, however, to the following conditions:
(a) No 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;
(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 join in the application for such permits or authorizations whenever such action is necessary or helpful and is requested by Lessee, and shall use Lessor’s reasonable efforts to obtain such permits or authorization;
(d) All Alterations shall be performed in good and workmanlike manner and in compliance with all applicable Legal Requirements and all applicable Insurance Requirements; and
(e) 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 Indemnification. 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 (by counsel reasonably satisfactory to Lessor) the Indemnitees from and against any and all Claims, arising from or relating to Lessee’s obligations under this Lease or the rehabilitation, construction or operation of the Improvements or any Alterations except to the extent any such Claim arises from the gross negligence or willful misconduct of the Indemnitees. In addition, if any contractor or subcontractor that performed any construction work for Lessee or Lessee’s affiliates on the Improvements or Alterations shall assert any claim against Lessor 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

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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 costs and expenses in connection therewith. The provisions of this Section shall survive the expiration or termination of this Lease.

ARTICLE 8.

MORTGAGE LOANS
Section 8.1 Intentionally omitted.

Section 8.2 Liens 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 (collectively, “Liens”) provided that all documents evidencing such Liens are consistent with the terms and conditions of this Lease and subject to Lessor’s approval which shall not be unreasonably withheld.
(a) For 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 any 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 Senior Lender.

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 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 or Additional Rent 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 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 thirty (30) days in the case of a monetary default, and by an additional sixty (60) 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 statement identifying the obligations breached and the cure expected by Lessor; provided, however, that if any nonmonetary default is not susceptible to cure within

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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, the Senior Lender 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 applicable period described in the preceding Paragraph (3) 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 the period described in the preceding Paragraph (3), 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. (5) Lessor shall promptly provide estoppel certificates reasonably requested by Lenders or Project 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 Paragraph (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. Provided Lessee (or Lender) has delivered Lessor the name and contact information of the Lender having an 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.

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(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 shall be personally liable under this Lease or such new lease only for the period of time that the Lender or its Nominee remains Lessee thereunder, 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, 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. (9) In
the event (A) a Lender, its designee or another purchaser in foreclosure proceedings becomes the legal owner of the Leasehold Estate, or (B) Lessor terminates this Lease by reason of any Event of Default (as defined herein), then, upon written request by Lender given within sixty (60) days after such transfer or receipt of notice of such termination of the Leasehold Estate, Lessor 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 Paragraph (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) 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, 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 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