Attachment 3 - Executed - ERNA Nystrom Village 9-13-2022.pdf

EXCLUSIVE RIGHT TO NEGOTIATE AGREEMENT
(Nystrom Village)
THIS EXCLUSIVE RIGHT TO NEGOTIATE AGREEMENT (this "Agreement") is Housing Services, a California nonprofit public benefit corporation ("RNHS" and together with McCormack, the "Developer"). RHA, McCormack, and RNHS are collectively referred to herein as the "Parties."

RECITALS
A. RHA is a public housing authority formed pursuant to Section 34200 et seq. of the California Health and Safety Code and governed by certain regulations promulgated by the U.S.

Department of Housing and Urban Development ("HUD").

RHA is the fee owner of the real property located in the City of Richmond, Contra Costa County, California consisting of the approximately nine (9) acre, four-block area bounded by Florida and Virginia Avenues and by South 13th and South 16th Streets, and the improvements thereon including 100 units of public housing consisting of 51 woodframe duplexes built in 1941.

The Property is depicted in Exhibit A, and consists of the following: Contra Costa County Assessor's Parcel Nos: 544-132-001 ("Block A"), 544-111-001 ("Block B"), 544-112-001 ("Block C"), and 544-113-001 ("Block D) (as more particularly described in Exhibit A, collectively, the "Property").

C. Developer proposes to ground lease Block A and Block B for the development of affordable rental housing and purchase Blocks C and D for development of for-sale moderate- income and workforce housing (all of the foregoing, collectively, the "Development"). As of the date of this Agreement, and subject to availability of financing, Developer contemplates that the Development will include the following elements: (i) rehabilitation of at least three (3) of the existing original duplexes consistent with applicable regulations pertaining to historic preservation, (i1) demolition of the remainder of the existing residential units, (iii) construction of 100 multifamily rental units on Block A or B that will serve as replacement housing for the existing public housing units and that will be affordable to very low-income households, (iv) construction of approximately 100 workforce multifamily rental units on Block A or B, and (v) construction of approximately 90 moderate-income for-sale units on Blocks C and D. The Development will be undertaken in a series of separately financed phases (each, a "Phase"). Each Phase will be subject to a separate Ground Lease or Disposition and Development Agreement between RHA and the to- be-formed entity that will be the ground lessee or owner of the portion of the Property applicable to such Phase (each an "Owner Entity").

On September 21, 2021, after a competitive selection process that began with the issuance of a Request for Proposals on April 20, 2020 ("RFP"), Developer was selected by the Richmond Housing Authority Board of Commissioners ("Commission"') to enter into exclusive ERNA - Nystrom Village
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negotiations consistent with the terms of this Agreement regarding the terms and conditions of an agreement or agreements governing the disposition and development of the Property (collectively, the "Master Development Agreement" or "MDA") pursuant to which Developer would acquire leasehold and fee interests in applicable portions of the Property, and develop and operate. the Development. As described in Developer's response to the RFP, in addition to Developer, the proposed development team will include the following: Mithun for architectural services, McCormack Baron Management, Inc. for property management services, Urban Strategies, Inc. and Strategic Partners I for community support and community engagement services, Hood Design Studios for landscape architecture, and Baines Group, Inc. as construction workforce consultant.

E. The purpose of this Agreement is to set forth the agreement of the Parties to: (i) hearial eat this or o determine the financial feasibility of developing the Property; (ii) seek funds to finance development of the Property; (iii) establish the tasks and schedule that will be undertaken during the Exclusive Period to position the Developer to apply for financing and land use and regulatory approvals for the Development; and (iv) establish a timeframe for the negotiation of the MDA.

F. The Property is currently operated by RHA as public housing, and is subject to requirements contained in a Declaration of Trust benefiting HUD and an Annual Contributions Contract ("ACC"). For the Development to occur, RHA must seek disposition approval from HUD in accordance with Section 18 of the 1937 Housing Act, 24 CFR part 970 and PIH Notice 2018-

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

AGREEMENT

1. Incorporation of Recitals. The Parties each acknowledge the truth of the foregoing Recitals which are hereby incorporated into this Agreement.

2. Exclusive Negotiation Period. RHA and Developer agree to negotiate the terms and conditions of the MDA exclusively with each other during the ninety (90) day period commencing on the Effective Date (as such may be extended pursuant to this Section, the "Exclusive Period"). Provided that the Parties are continuing to negotiate the MDA in good faith, the term of this Agreement may be extended for two (2) periods of thirty (30) days each if mutually agreed upon by the Parties. During the Exclusive Period, each Party will cooperate and in good faith endeavor to negotiate the MDA setting forth the respective duties, obligations and rights of Developer and RHA. RHA agrees that during the Exclusive Period it will not offer, or negotiate with any other person or entity relating to the use, leasing, acquisition, disposition, or development of the Property without the prior written consent of Developer. The Parties each acknowledge that this Agreement does not impose a binding obligation on RHA to convey or lease any portion of, or interest in, the Property, nor does it obligate RHA or the City of Richmond ("City") to grant any approvals or authorizations required for the Development. Without limiting the generality of the foregoing, Developer expressly acknowledges that any agreement resulting from the negotiations contemplated hereby shall become effective only if the agreement is approved by the ERNA -Nystrom Village 2
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Commission following compliance with all applicable notice and hearing requirements and compliance with all other requirements of law, including without limitation the California Environmental Quality Act ("CEQA") and if applicable, the National Environmental Policy Act ("NEPA").

Investigation. Developer agrees that during the Exclusive Period, and continuing through an initial period to be established in the MDA (the "Due Diligence Period"), Developer will conduct its initial due diligence review regarding the Property (the "Due Diligence Review"). The Due Diligence Review may include, but shall not be limited to, review of certain studies, tests, surveys and other environmental or land use information available regarding the Property. During the Due Diligence Period, with the RHA's consent, Developer shall have the right, at Developer's option, to conduct, at its sole cost and expense, any further investigations that it deems necessary regarding the Property. Developer agrees that any damage resulting from entry or activity upon the Property by Developer or its employees, agents, contractors, or consultants, will be repaired, and the Property will be restored to its pre-inspection condition. Concurrently with the mutual execution of this Agreement, Developer shall execute and deliver to RHA a right of entry and release of liability agreement substantially in the form attached hereto as Exhibit B.

Deposit; Predevelopment Expenses. Upon execution of this Agreement, McCormack shall pay to RHA the sum of One Hundred Thousand Dollars ($100,000) which shall be treated as a nonrefundable fee. In Developer's discretion, such fee may be included as an element of the Development budget, and may be allocated among Phases; however, the fee shall not be applied toward the purchase price or ground rent of the Property, and shall not be applied toward RHA and City expenses as described in paragraph (o) of Section 5 below.

Terms and Conditions. RHA and Developer shall in good faith endeavor to negotiate the MDA. The Parties acknowledge that any final MDA and any Implementing Agreement (as defined below) may include terms relating to the conveyance of the Property and development of the Development that may differ from, or be in addition to, the terms set forth in this Agreement. The Parties intend that the terms, conditions, and provisions of the MDA and such Implementing Agreements shall be controlling. Developer may form a single-purpose, joint venture entity with McCormack and RNHS (or their affiliates) as the sole members, and cause that entity to enter into the MDA (and if applicable, Implementing Agreements, although the parties' general assumption is that Owner Entities will enter into Implementing Agreements).

As applicable, for purposes of the MDA and Implementing Agreements, such joint venture entity shall serve as the "Developer." MBA Properties, Inc., a Delaware corporation, shall provide a guaranty of the obligations of such entity under the MDA in form approved by RHA. The MDA and the Implementing Agreements shall include the following terms and provisions:
(a) Term Sheet. The terms and conditions set forth in the Nystrom Village Term Sheet dated September 7, 2021 attached hereto as Exhibit C to this Agreement and incorporated herein by this reference.
(b) AS-IS, Where-Is; Release; Environmental Remediation Indemnity. The Property will be conveyed and leased on a Phase-by-Phase basis in "AS-IS, Where-Is" condition without ERNA-Nystrom Village 3
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any representation or warranties by RHA of the physical or environmental condition or any other aspect of the Property or improvements thereon except as may be expressly stated in the MDA and/or applicable Implementing Agreement. The MDA will obligate Developer, and the Implementing Agreements will obligate the Owner Entity for the applicable portion of the Property that will be conveyed or leased to such Owner Entity for each Phase ("Applicable Parcel"), to release RHA and the Indemnified Parties (defined below) from all liability associated with the physical or environmental condition of the Applicable Parcel. In addition, except as may be expressly stated in the MDA and applicable Implementing Agreement, after the conveyance or lease of the Applicable Parcel at Closing the Implementing Agreements will obligate the Developer and the Owner Entity of the Applicable Parcel to indemnify, defend (with counsel approved by RHA), and hold the Indemnified Parties harmless from and against all Claims (defined below) relating to or arising in connection with the demolition of existing improvements; the removal, transportation, or disposal of hazardous materials; the violation of environmental laws by Developer, Owner Entity, or their respective employees, consultants, contractors, subcontractors, or agents; the failure of any such parties to comply with regulatory agency orders or other remediation requirements relating to site preparation, construction, development, or operation of the Applicable Parcel; or the failure of Developer or as applicable, the Owner Entity of the Applicable Parcel, and their respective employees, consultants, contractors, subcontractors, and agents, to comply with laws pertaining to hazardous materials.
(c) Environmental Remediation. Following the Closing for each Phase of the Development, the Owner Entity for the Applicable Parcel shall be responsible, at such party's cost, for all environmental remediation required for development of the Applicable Parcel in accordance with the requirements of applicable law and regulatory agencies. If any hazardous material is required to be removed from the site, the Developer or Owner Entity (and not RHA) will be identified as 'generator' of the waste in waste manifests or associated documents. Except as may be expressly stated in the MDA and/or applicable Implementing Agreement, neither RHA nor the City shall have any responsibility for payment of costs associated with remediation of the Property or development of the Property. Notwithstanding the foregoing, however, if the Parties are able to secure a substantial source of capital funding for the Development available prior to the closing of a given Phase (such as a Choice Neighborhoods Initiative Implementation grant) then the Parties will seek to use such funding (through a contract between RHA and Developer or its affiliate) to carry out remediation of the Property in order to deliver a "clean and buildable" site at the closing of each Phase.
(d) Prevailing Wage. Developer and the applicable Owner Entity for each Phase shall comply, and shall cause its contractors, subcontractors and agents to comply, with California Labor Code Section 1720 et seg. and the regulations adopted pursuant thereto, and if required by applicable law, the federal Davis Bacon Act and implementing regulations (all of the foregoing, Entitlements. Upon timely application by Developer, RHA will help facilitate and cooperate with Developer, within RHA's reasonable authority, in obtaining all entitlements for the Development in a good faith, diligent manner. Developer agrees to pay for the full cost of all entitlements for the Development which may include services provided by third-party consultants.

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Closing Conditions. The close of escrow for the lease and disposition of the applicable portion of the Property for each Phase ("Closing") will be contingent upon the satisfaction of certain conditions to be specified in the MDA, including but not limited to receipt of applicable HUD approvals, and Developer's receipt, and RHA's approval of: financing commitments including, if applicable the award of tax credits and the allocation of tax-exempt bond authority; loan documents; partnership agreements and related documents; development approvals; environmental clearance; insurance; construction contracts; performance bonds; building permits; and property management agreements. The MDA will specify that the Development will be developed in Phases and that each Phase may have a different closing date.

Schedule for Developer Performance. The Schedule of Performance shall set deadlines for performance of the respective obligations of the Developer and RHA including, but not limited to, the submission and approval of plans, and approval of title and site conditions, as (h) General Indemnity. The MDA and Implementing Agreements shall include general indemnity provisions substantially in the following form (subject to adjustment to reflect final terms regarding relocation responsibilities, if applicable). As used in this Section, "Developer" means the party executing the MDA as "Developer" and the party executing an Implementing Agreement as "Owner Entity":

Without limiting and in addition to any indemnification obligations of Developer set forth elsewhere in the MDA (or Implementing Agreement, as applicable), Developer shall indemnify, defend (with counsel reasonably acceptable to RHA and the City, protect and hold harmless RHA, the City, and their respective elected and appointed officials, commissioners, officers, employees, agents, consultants, contractors, advisory boards, commissions, and affiliated entities (all of the foregoing, collectively, "Indemnified Parties") from and against any and all claims, demands, actions, causes of action, proceedings, liabilities, losses, damages, fines, penalties, liens, costs and expenses (including court costs and reasonable attorneys', experts' and consultants' fees and costs) of any nature whatsoever (all of the foregoing, collectively, "Claims) directly or indirectly arising out of or relating to (a) Developer's lease, ownership, development, occupancy, operation, or management of the Property or the Development, or part thereof, (b) the construction, rehabilitation, and development of the Property or part thereot by Developer or Developer's contractors, subcontractors, agents, or employees, or (c) Developer's obligations or performance or non-performance under the MDA, the Implementing Agreements, and related documents. The indemnity obligations (but not the duty to defend under this Section shall not apply to the extent any Claims are finally determined to have been caused by the willful misconduct or gross negligence of RHA or City. Insurance limits shall not operate to limit the indemnity obligations under this Section or in the MDA, the Implementing Agreement, or related documents. The provisions of this Section and all other indemnity obligations of Developer shall survive the expiration or sooner termination of the MDA or applicable Implementing Agreement, and shall remain in full force and effect.

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Responsibility Prior to Closing for Applicable Parcels. The MDA shall provide that prior to Closing for conveyance of each Applicable Parcel, RHA will remain responsible for all costs and liabilities associated with the ownership, operation, management and maintenance of the Applicable Parcel.
(i) Land Use Indemnity. The MDA shall have a CEQA/entitlement indemnity provision substantially in the following form, and the Implementing Agreements shall have a substantially similar provision binding the Owner Entity for each Phase:

Developer shall indemnify, defend and hold harmless RHA, the City, the City Planning Commission, and their respective elected and appointed officials, commissioners, officers, any development or land use permit, application, license, denial, approval or authorization related to the Development, including, but not limited to, variances, use permits, developments plans, specific plans, general plan amendments, zoning amendments, approvals and certifications pursuant to the California Environmental Quality Act, and /or any mitigation monitoring program, or brought against the City or RHA with respect to the Development, but subject to any exclusions specified in California Government Code Section 66474.9. This indemnification shall include, but not be limited to, damages, fees and/or costs awarded against the City or RHA, if any, and costs of suit, attorneys' fees and other costs, liabilities and expenses incurred in connection with such proceeding whether incurred by Developer, City, RHA, and/or parties initiating or bringing such Proceeding.

If Developer is required to defend the City or RHA as set forth above, the City and RHA shall retain the right to reasonably approve the counsel selected by Developer who shall defend the City and RHA.
(k) HUD Approvals/Requirements. The Parties shall cooperate in the planning, investigation and communication necessary to prepare and submit to HUD a Section 18 Disposition application for the Development. The Parties acknowledge that HUD's approval is necessary for disposition of the Property, and that HUD sets forth the conditions under which the Property, as a public housing site, may be transferred (as such approval may be amended by HUD, the "Disposition Approval").
(1) Affirmative Action and Section 3 Requirements. Developer shall comply with the Affirmative Action and Section 3 Requirements and MBE/WBE participation policies in accordance with Exhibit D, as such policies may be amended. Developer shall use best efforts to achieve or exceed the following goals on a voluntary basis for construction and non-construction activities: twenty percent (20%) MBE participation; five percent (5%) WBE participation; and twenty-five percent (25%) of all workforce hours to Section 3 residents. During the first ninety (90) calendar days of the Exclusive Period, Developer and RHA will develop a plan for achieving these goals, including a plan for initiating a training program for residents sufficiently in advance of construction to maximize their opportunities to obtain construction jobs; provided, however, that the training and job opportunities in the plan shall in no event be limited to construction jobs.

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The Parties acknowledge and agree that resident hiring by Developer in connection with the -
Development is of upmost importance to RHA, and was a material factor in the selection of Relocation. Provided the Development receives Disposition Approval, relocation counseling/advising services, (4) paying actual and reasonable moving costs (as defined by RHA), (5) compliance with fair housing and accessibility requirements, (6) issuance of 90-day notice cannot begin prior to Disposition Approval, and (7) disposition and demolition cannot commence until residents are relocated. For purpose of relocation, the switch from public housing to Section 8 constitutes a change of housing if not a physical move. Developer will provide a draft Relocation Plan for RHA review. All relocation costs and expenses, including without limitation, the payment of moving expenses, relocation benefits, and the cost of a relocation consultant, will be included in the sources and uses for the Development and/or particular Phases, as applicable. The MDA and Implementing Agreements will further specify the respective obligations of the Parties with respect to relocation.

Compliance with Law. In developing and operating the Development, Developer shall comply all applicable local, State, and federal laws, rules, statutes, ordinances, and regulations, including without limitation, the City ordinances identified in Section 15 below. (p) Reimbursement of RHA and City Expenses. By not later than the Closing date, Developer shall reimburse RHA for all expenses incurred by RHA and/or the City in connection with (i) the solicitation and review of proposals for development of the Property, (i) negotiation and preparation of all documents pertaining to the disposition, development, and financing of the Development, including without limitation, this Agreement, the MDA, and, as applicable ground leases, purchase and sale agreements, disposition and development agreements, loan documents, regulatory agreements, and resale restriction agreements ("Implementing Agreements"), and (iv) review of all financing and other documents pertaining to the Development, including without limitation construction documents, loan documents, bond financing documents, and partnership agreements and related documents. Such reimbursable expenses shall include without limitation, expenses incurred by RHA and/or the City in connection with: legal fees; relocation costs; design, land use, financial and development consulting fees; appraisal costs; environmental studies, and feasibility studies. The MDA will include additional detail regarding anticipated budgets for such expenses in order to enable Developer to include such expenses in the budget for each Phase. (g) No City or RHA Subsidy. No City or RHA loan, grant, or waiver, reduction, or deferral of City impact, permit, or other fees will be provided for the Development.

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Review and Approval of Financing Plans. RHA shall have the right to review and approve financing plans for each phase of the Development, including without limitation, the sources and uses.

Closing Documents and Closing Guarantees. At each Closing, except as provided in the MDA, the MDA will terminate relative to the subject Phase and Applicable Parcel (but remain in effect for the remaining Phases of the Development), and the Implementing Agreements executed by the Owner Entity for such Phase will control. At each Closing, MBA Properties, Inc. will provide RHA with a guaranty of construction completion of the subject Phase and with a guaranty of the environmental remediation indemnity obligation of the Developer and applicable Owner Entity.

6. Financial Feasibility, Conceptual Plans, Development Schedule. During the Exclusive Period, Developer shall provide RHA with preliminary versions of each of the following, in form and substance reasonably satisfactory to RHA: (1) documentation demonstrating the financial feasibility of each phase of the Development, including documentation establishing Developer's capacity to finance the Development, and development and operating pro formas, (2) a preliminary draft master plan, including conceptual renderings, and (3) a proposed development phasing plan, including the
schedule for commencement and completion of construction for each phase. establish a process and standards for the Parties to confer and mutually approve updates to the foregoing submittals as the development process moves forward, including without limitation, through consultation with residents.

7. Finality of the Determination. Notwithstanding anything to the contrary set forth in this Agreement, the determination by each of RHA and Developer as to whether to enter into an MDA shall be made in such Party's sole and absolute discretion and shall be final and conclusive, without any liability therefor on the part of such Party to the other Parties. Developer shall have the right to terminate this Agreement at any time on or before the last day of the Exclusive Period by giving notice thereof to RHA, whereupon none of the Parties shall have any further rights, liabilities, or obligations to each other pursuant to this Agreement except as expressly stated herein. Without limiting the generality of the foregoing, the Parties each acknowledge that no Party has an obligation to enter into an MDA or any Implementing Agreement or other instrument regarding the disposition or conveyance of the Property or any part thereof, and no MDA or Implementing Agreement or other such instrument shall be effective unless approved by the Commission and, if applicable, by HUD.

Reports and Plans. If, despite good faith efforts by the Parties, negotiations fail to result in an approved and executed MDA within the Exclusive Period, this Agreement shall terminate.

Developer agrees thereupon to promptly provide to RHA, without representation or warranty, all findings and determinations relating to the proposed Development prepared by Developer or provided to Developer by third parties, and shall provide to RHA, all plans, studies and reports prepared for Developer in connection with this Agreement and/or the Property, or the Development. Nothing set forth in the preceding provisions of this paragraph shall obligate ERNA - Nystrom Village 8
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Developer to provide to RHA copies of proprietary financial information or projections prepared by Developer for its internal use. This Section shall survive the termination of this Agreement.

Assignment. Developer's rights and obligations under this Agreement are not assignable or transferable, in whole or in part, voluntarily or involuntarily, without the prior written consent of RHA in its sole and absolute discretion; provided however, in connection with the syndication general partner.

10. Compliance with Regulations. Developer understands, acknowledges and agrees that it must comply with requirements and provisions of the City of Richmond (including, without limitation, approvals required by City of Richmond Planning Commission, Design Review Board and other commissions/officers/agencies of the City of Richmond), as well as approvals that must be obtained from various state and federal regulatory agencies, and there are no assurances that any such approvals can be obtained.

11. Disclosure of Information. Developer understands, acknowledges and confirms that in connection with Developer's proposal in response to the RFP, Developer has made full and unconditional disclosures regarding all members and officers of Developer and all other pertinent information concerning Developer, and Developer will continue to make and update all such disclosures as reasonably required by RHA.

12. Disclosure of Financing. Notwithstanding the provisions of Section 8 above, Developer understands, acknowledges and agrees that Developer shall disclose to RHA detailed information regarding the financial feasibility of the Development and the methods and sources of financing to be used in developing the Development.

Approvals. Developer understands, acknowledges and agrees that if negotiations culminate in an MDA that RHA staff recommends to the Commission, such MDA shall become final and effective only if and when the MDA has been considered and approved by the Commission in its sole and absolute discretion.

Waiver of Lis Pendens. It is expressly understood and agreed by the Parties that no lis pendens shall be filed against any portion of the Property with respect to this Agreement or any dispute or act arising from it.

15. City Ordinances. Without limiting any other provisions of this Agreement, Developer agrees to comply with the City of Richmond Business Equal Opportunity Ordinance (RMC Chapter 2.50), the Local Employment Program (RMC Chapter 2.56), Living Wage Requirement Ordinance (RMC Chapter 2.60), the Ordinance Banning the Requirement to Provide Information of Prior Criminal Convictions on All Employment Applications (RMC Chapter 2.65), One- Percent for Public Art on Private Projects Program (RMC Chapter 12.62) and other City ordinances, regulations and programs referenced in the MDA and Implementing Agreements.

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16. Default. If Developer defaults in the performance of any of the covenants, conditions or agreements contained in this Agreement, then Developer shall be deemed to have breached the Agreement. If any such a default is not cured within twenty (20) days following written notice thereof from RHA, RHA shall have, in addition to all other remedies at law or equity, the right to terminate this Agreement and to seek monetary damages and/or equitable relief.

17. General Provisions.

17.1 Actions by the Authority. Whenever this Agreement calls for or permits the approval, consent, authorization or waiver of RHA, the approval, consent, authorization, or waiver of the Executive Director shall constitute the approval, consent, authorization or waiver of RHA without further action of the Commission.

17.2 Broker's Fees. No broker's fees, finder's fees or real estate commissions will be paid in connection with this Agreement, the transactions described herein, the MDA, or any Implementing Agreement.

17.3 Governing Law; Venue. This Agreement shall be governed and construed in accordance with the laws of the State of California, excluding principles of conflicts of law. Any litigation arising under this Agreement shall be prosecuted in the Superior Court of California, County of Contra Costa, and all parties waive their respective rights to change venue pursuant to Section 394 of the Code of Civil Procedure.

17.4 Entire Agreement. This Agreement, together with Exhibits A through D attached hereto and incorporated herein by reference, constitutes the entire agreement between the Parties with respect to the subject matter hereof, and supersedes all prior oral or written agreements pertaining thereto.

17.5 Amendments; Waivers. This Agreement may not be amended or modified except by a written instrument signed by both Parties. No waiver of any breach of any covenant or provision of this Agreement shall be deemed a waiver of any other covenant or provision hereof, and no waiver shall be valid unless in writing and executed by the waiving party. An extension of time for performance of any obligation or act shall not be deemed an extension of the time for performance of any other obligation or act, and no extension shall be valid unless in writing anc executed by the waiving party

17.6 Notices. Except as otherwise specified in this Agreement, all notices to be sent pursuant to this Agreement shall be made in writing, and sent to the Parties at their respective addresses specified below or to such other address as a Party may designate by written notice delivered to the other parties in accordance with this Section. All such notices shall be sent by:
(i) personal delivery, in which case notice is effective upon delivery; (ii) certified or registered mail, return receipt requested, in which case notice shall be deemed delivered on receipt if delivery is confirmed by a return receipt; or (iii) nationally recognized overnight courier, with charges ERNA - Nystrom Village 10
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prepaid or charged to the sender's account, in which case notice is effective on delivery if delivery is confirmed by the delivery service. -
RHA: Housing Authority of the City of Richmond
330 24th Street
Richmond, CA 94804
Attn: Executive Director
McCormack: McCormack Baron Salazar, Inc.
720 Olive Street
St. Louis, MO 63101
Attn: General Counsel
RNHS: Richmond Neighborhood Housing Services
12972 San Pablo Avenue
Richmond, CA 94805
Attn: Executive Director

17.7 Binding on Successors; Limitation on Assignment. This Agreement shall be binding upon and inure to the benefit of the Parties and their permitted successors and assigns, subject to the limitations on assignment set forth herein.

17.8 Severability. Each provision of this Agreement shall be considered severable, and if any provision of this Agreement is determined to be invalid or contrary to any existing or future law, such invalidity shall not impair the remainder of this Agreement provided that the remainder of the Agreement can, absent the excised portion, be reasonably interpreted to give effect to the intentions of the Parties.

17.9 No Waiver. No waiver by either Party of any default or breach of any covenant by the other Party shall be implied from any omission to take action on account of such default.

No waiver of any provision under this Agreement shall be effective unless in writing and signed by the waiving party. A waiver of any covenant, term or condition contained herein shall not be construed as a waiver of any subsequent breach of the same covenant, term or condition

17.10 Headings; Interpretation. The section headings and captions used herein are solely for convenience and shall not be used to interpret this Agreement. Any reference to a particular section of this Agreement shall mean a reference to all subsections thereof. The Parties acknowledge that this Agreement is the product of negotiation and compromise on the part of both Parties, and the Parties agree, that since both Parties have participated in the negotiation and drafting of this Agreement, this Agreement shall not be construed as if prepared by one of the Parties, but rather according to its fair meaning as a whole, as if both Parties had prepared it..

17.11 No Third Party Beneficiaries. Except as expressly set forth herein, nothing in this Agreement is intended to or shall be deemed to confer upon any person other than the Parties any legal or equitable right, remedy or claim under or by reason of this Agreement.

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17.12 Parties Not Co-Venturers. Nothing in this Agreement is intended to or shall establish the Parties as partners, co-venturers, or principal and agent with one another.

17.13 Non-Liability of Officials, Employees and Agents. No official, employee or agent of RHA shall be personally liable to Developer or its successors in interest in the event of any default or breach by RHA or for any amount which may become due to Developer or its successors in interest pursuant to this Agreement.

17.14 Authority. Each person executing this Agreement on behalf of a Party presents that he or she is duly authorized to sign and deliver this Agreement on behall of su arty, and that this Agreement is binding on such Party in accordance with its term

17.15 Counterparts. This Agreement may be executed in several counterparts, each of which shall be deemed to be an original, and all of which together shall constitute one and the same instrument.
[SIGNATURES ON FOLLOWING PAGE.]
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IN WITNESS WHEREOF, the parties have entered into this Exclusive Right to Negotiate Agreement as of the date first written above.

RHA:

Approved as to form:

HOUSING AUTHORITY OF THE CITY
OF RICHMOND, a public body, corporate
Hennette beacham
By:

Susan E. Bloch, Special Counsel • Nanette J. Beacham, Executive Director
mela Christa
DEVELOPER:

MCCORMACK BARON SALAZAR, INC.,
a Missouri corporation
By: Wom
Print Name: Vincent R. Bennett
Title: President

RICHMOND NEIGHBORHOOD
IOUSING SERVICES, a Californi
lonprofit public benefit corporatior
By:_
Print Name:

Title:

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IN WITNESS WHEREOF, the parties have entered into this Exclusive Right to Negotiate Agreement as of the date first written above. -
RHA:

Approved as to form:, HOUSING AUTHORITY OF THE CITY
OF RICHMOND, a public body, corporate
and politic
By:

Nannette J. Beacham, Executive
Director
Attest:

DEVELOPER:

MCCORMACK BARON SALAZAR, INC.,
a Missouri corporation
By:

Print Name:

Title:

RICHMOND NEIGHBORHOOD
HOUSING SERVICES, a California
Pine Nick A BaSen
Firedit
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Exhibit A

PROPERTY
(Attach diagram and legal description of the Property.) Exhibit B

RIGHT OF ENTRY AGREEMENT
(Attach form of Right of Entry Agreement.)
Exhibit C

TERM SHEET
(Attach Nystrom Term Sheet dated September 7, 2021.)
Exhibit D
AFFIRMATIVE ACTION AND SECTION 3 REQUIREMENTS
(Attach Affirmative Action/Section 3 Requirements.)
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Exhibit A

PROPERTY
Nystrom Village, Marina Way South and Maine Ave, Richmond, CA 94801 Florida and Virginia Ave (North to South) and South 13 St. and South 16 St. (East to West) (APNs: 544-111-001, 544-112-001, 544-113-001, and 544-132-001)

SITE SIZE
392,475 SF or 9 acres
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Exhibit B

RIGHT OF ENTRY AGREEMENT
(Attach form of Right of Entry Agreement.)
Exhibit C

PERMIT TO ENTER AND RELEASE OF LIABILITY AGREEMENT
-
("Agreement"), dated as of A /3, 2022 ("Effective Date"), is made and entered into by 22222
• RECITALS
A. RHA is a public housing authority formed pursuant to Section 34200 et seq. of th California Health and Safety Code and governed by certain regulations promulgated by th United States Department of Housing and Urban Development ("HUD").

B. RHA is the fee owner of the real property located in the City of Richmond, Contra Costa County, California consisting of the approximately nine (9) acre, four-block area bounded by Florida and Virginia Avenues and by South 13th and South 16th Streets, and the improvements thereon including 100 units of public housing consisting of 51 woodframe duplexes built in 1941. The Property consists of the following: Contra Costa County Assessor's Parcel Nos: 544-132-001 ("Block A"), 544-111-001 ("Block B"), 544-112-001 ("Block C"), and 544-113-001 ("Block D") (as more particularly described in Exhibit A, collectively, the "Property").

C. RHA and Permittee entered into that certain Exclusive Right to Negotiate Agreement dated as of the date hereof (the "ERNA") regarding the potential lease and/or conveyance of the Property for the development of the Development (as that term is defined in the ERNA).

D. In anticipation of Permittee's acquisition of the Property and development of the Development, and pursuant to the ERNA, Permittee wishes to conduct inspections and investigations of the Property (the "Permitted Investigation").

NOW, THEREFORE, for good and valuable consideration, RHA and Permittee agree as follows:

1. Recitals. The defined terms of the foregoing Recitals are a substantive part of this Agreement.

Provision of Permit. RHA hereby provides to Permittee a Permit to Enter the Property (hereinafter referred to as the "Permit") during the Exclusive Period (as defined in the notify and procure RHA's written consent at least three (3) business days prior to each entry onto. 1 OAK #4883-4424-2996 v1
the Property. Consent to the start of Permitted Investigation shall be conditioned on (i) Permittee's acquiring all applicable permits required by governmental authorities; (i) Permittee's furnishing to RHA copies of such permits; (iii) Permittee's compliance with the conditions of all applicable laws, permits and approvals in a prompt and expeditious manner; and (iv) Permittee's receipt of RHA's approval of evidence of insurance coverage as set forth in Section 11, below.

Permittee agrees that except as otherwise expressly agreed upon in writing by RHA, Permittee shall repair any and all damage resulting from the Permitted Investigation and restore the Property to its pre-inspection condition. Permittee further agrees that Permittee shall not disturb the residents of the Property for any purpose or by any of its actions in undertaking the Permitted Investigation.

3. Entry at Permittee's Own Risk; Release. In entering the Property and engaging in Permitted Investigation, Permittee agrees, on its own behalf and on behalf of its contractors and subcontractors, employees, officers, guests, volunteers, invitees, and their respective successors and assigns (all of the foregoing, the "Releasors") that it will and hereby does, release, discharge and covenant not to sue RHA, the RHA Board of Commissioners, the City of Richmond, or their respective elected or appointed officials, City Council members, commissioners, officers, directors, employees, agents, consultants, contractors, advisory board therefor on account of injury to or death of persons, or injury or damage to property resulting directly or indirectly from Releasors' entry upon or about the Property or any facilities or equipment therein, or engaging in Permitted Investigation, unless such loss, damages, claim or demand is determined (by a court's final judgment after all appeals have been concluded or exhausted) to have been caused by the sole active negligence or willful misconduct of the Released Parties. Permittee acknowledges that the Property and any entry thereon shall be in the Property's "AS-IS" and "WITH ALL FAULTS" condition, and with no representations or warranties whatsover, express or implied, on the part of RHA or the City of Richmond, or arising by operation of law, including without limitation, any warranty of condition or habitability.

In connection with the release set forth in this Section 3, Permittee, for itselt and all Releasors, hereby waives the benefit of California Civil Code section 1542, which provides as follows:

A general release does not extend to claims that the creditor or releasing party does not know or suspect to exist in his or her favor at the time of executing the release, and that if known by him or her, would have materially affected his or her settlement with the The provisions of this Section 3 shall survive the expiration or earlier termination of the Permit, this Agreement, and the ERNA.

4. Mechanic's Liens. Permittee shall not permit or suffer any mechanic's or materialmen's or other liens of any kind or nature to be recorded and/or enforced against the Property, and Permittee shall indemnify and hold harmless RHA and the Property from and 2 OAK #4883-4424-2996 vi
against any and all liens, claims, and expenses related to work done, labor performed, activities -
undertaken, or materials furnished in connection with the Permittee's entry on the Property pursuant to this Agreement. The provisions of this Section 4 shall survive the expiration or earlier termination of this Agreement
Compliance with Law. Permittee shall cause all work performed and activities undertaken in connection with this Agreement to be performed and undertaken in compliance with all applicable federal, state and local laws, statutes and ordinances, and all directions, rules and regulations of any fire marshal, health officer, building inspector, or other officer of every governmental agency now having or hereafter acquiring jurisdiction (collectively, the "Rules and Regulations"). Compliance under this provision includes compliance with the California Environmental Quality Act ("CEQA") and all provisions of the Municipal Code of the City of Richmond, including Chapters 2.28, 2.39, 2.50, 2.52, 2.56, 2.60, and 2.65, if applicable, which are herein incorporated by reference. All work performed and activities undertaken shall proceed only after procurement of each permit, license, or other authorization that may be required by any governmental agency having jurisdiction, whether discretionary or ministerial, and Permittee shall be responsible to RHA for the procurement and maintenance thereof, as may be required of Permittee and all entities using the Property or engaged Permitted Investigation. Permittee shall require all contractors, subcontractors, employees, officers, guests, invitees, volunteers and assigns entering upon the Property to obey and observe all terms of the Permit and all Rules and Regulations. Permittee shall be responsible for paying for fines or charges which may be levied by any governmental bodies, agencies, authorities or courts for violations of Rules and Regulations.

6. Hazardous Materials.
(a) In connection with conducting the Permitted Investigation, Permittee shall take no action, nor cause the Property to be, in violation of any federal, state or local laws, ordinances or regulations relating to industrial hygiene or to the environmental conditions on, under or about the Property, including, but not limited to, soil and ground water conditions.

Permittee shall not use, generate, load, handle, remove, manufacture, store or dispose of on, under, or about the Property or transport to or from the Property, contaminated water, soil, bunkers, chipped or removed paint, flammable explosives, radioactive materials, hazardous wastes, toxic substances or related materials, including without limitation, any substances defined as or included in the definition of "hazardous substances," "hazardous wastes," "hazardous materials," or "toxic substances" under any applicable federal or state laws or regulations (collectively referred to hereinafter as "Hazardous Materials"). (b) Permittee shall immediately advise RHA in writing if at any time it receives written notice of (i) any and all enforcement, cleanup, removal or other governmental or regulatory actions instituted, completed or threatened against Permittee or the Property pursuant to any applicable federal, state or local laws, ordinances, or regulations relating to any Hazardous Materials, ("'Hazardous Materials Law"); (i) all claims made or threatened by any third party against Permittee or the Property, relating to damage, contribution, cost recovery compensation, loss or injury resulting from any Hazardous Materials (the matters set forth in 3 OAK #4883-4424-2996 v1
clauses (i) and (ii) above are hereinafter referred to as "Hazardous Materials Claims"); and (iii) Permittee's discovery of any occurrence or condition on any real properties adjoining or in the vicinity of the Property that could cause the Property or any part thereof to be classified as "border-zone property" under the provision of California Health and Safety Code, Sections 25220 et seq. or any regulation adopted in accordance therewith, or to be otherwise subject to any restrictions on the ownership, occupancy, transferability or use of the Property under any Hazardous Materials Law.
(c) RHA has the right to join and participate in, as a party if it so elects, any legal proceedings or actions initiated in connection with any Hazardous Materials Claims. (d) Permittee acknowledges that as described in the ERNA and to be documented in the Master Development Agreement and/or other documents governing the disposition of the Property, following Closing (as defined in the ERNA) Permittee shall be obligated to remediate the Property and dispose of Hazardous Materials in compliance with all applicable laws.

Security and Utilities. Permittee acknowledges that RHA does not and will not provide security services or utilities in connection with the Permitted Investigation, and Permittee shall provide, at its sole cost and expense, all such services and utilities necessary or appropriate for its conduct of Permitted Investigation.

8. Indemnification. To the fullest extent allowed by law, Permittee shall defend (with counsel reasonably acceptable to RHA and the City of Richmond), indemnify and hold harmless, and require its contractors and subcontractors to defend, indemnify and hold harmless the Released Parties (defined in Section 3 above), from any and all liability, penalties, fines, costs, losses, damages, actions, proceedings, causes of action, demands, claims or judgments, expenses (including attorneys' fees, expert fees, consultants' fees, court costs, and other defense costs) (all of the foregoing, "Claims"), resulting from: (i) injury to or death sustained by any person (including the Releasors and their respective employees and agents), (ii) damage to property of any kind, or (i) any other injury or damage whatsoever, which injury, death or damage arises directly or indirectly out of, or is in any way related to entry on the Property pursuant to this Agreement or the Permitted Investigation, regardless of Permittee's fault or negligence, except that (a) such indemnity shall not apply to the extent a Claim results from the gross negligence or willful misconduct of any Released Party, and (b) such indemnity shall not apply to Claims relating to Hazardous Materials existing on the Property as of the Effective Date unless any such Claim results from the actions of Permittee or its employees or agents.

The indemnification obligations of Permittee and its contractors, and subcontractors shall extend to Claims asserted after the expiration or termination of this Agreement, provided that such Claims arose during the term of this Agreement. The provisions of this Section 8 shall survive the expiration or earlier termination of this Agreement Term. The term of the Permit and this Agreement shall commence on the Effective Date and shall expire and terminate upon the first to occur of the following: (a) expiration of the Exclusive Period (as defined in the ERNA), (b) termination of the ERNA pursuant to its terms, or (c) the date that a Master Development Agreement or other agreement governing the disposition of the Property is fully executed; and thereupon and thereafter the 4 OAK #4883-4424-2996 vl
Permit and this Agreement shall be null and void and of no further force or effect, except as to those provisions of this Agreement that expressly survive the expiration or earlier termination - of this Agreement.

10. Signs. No signs or placards of an advertising or promotional nature shall be painted, inscribed or placed in or on the Property or on any building or structure located thereon without the prior written consent of the RHA at RHA's sole and absolute discretion.

Permittee agrees to remove promptly and to the satisfaction of RHA, at the cost and expense of Permittee, upon the termination of the Permit, any and all signs and placards placed by it upon the Property pursuant to this Section.

11. Insurance. Permittee shall, at all times, maintain at its sole cost and expense the insurance coverage set forth in Exhibit B and for the benefit of RHA and all other additional insureds required thereunder. Permittee shall furnish RHA with written evidence of the required insurance coverage prior to entering the Property and engaging in Permitted Investigation. No activities permitted pursuant to the Permit shall be initiated prior to Permittee's receipt of RHA's approval of evidence of insurance coverage related thereto.

Taxes. Permittee shall pay all taxes which may be levied, imposed or assessed upon or against the Property arising out of this Agreement or the Permit, or any possessory interest right which Permittee may have in or to the Property by reason of its use or occupancy thereof. Permittee recognizes and understands that the Permit may create a possessory interest subject to property taxation and that Permittee may be subject to the payment of property taxes levied on such interest. Permittee agrees to pay all taxes, assessments, and charges on goods, merchandise, appliances, equipment and property owned by it in or about the Property.

13. Default. If Permittee defaults in the performance of any of the covenants, conditions or agreements contained in this Agreement, then Permittee shall be deemed to have breached the Agreement. Upon the occurrence of such a default which is not cured within ten (10) days following written notice thereof from RHA, RHA shall have, in addition to all other remedies at law or equity, the right to terminate the Permit and to seek monetary damages and/or equitable relief

14. No Property Interest; No Assignment, This Agreement and the Permit create only a temporary and revocable license and do not create any interest in the Property or any other real property. This Agreement shall not be recorded. This Agreement is personal to Permittee and may not be voluntarily or involuntarily assigned, in whole or in part, by Permittee.

15. Miscellaneous.

15.1 Attorneys' Fees. If any legal action or proceeding arising out of or relating to this Agreement is brought by either party hereto, the prevailing party shall be entitled to receive from the other party, in addition to any other relief that may be granted, the reasonable attorney's fees and expert fees, costs, and expenses incurred in the action or proceeding brought or defended by the prevailing party. 5 OAK #4883-4424-2996 v1

15.2 Waivers. Any waiver by RHA of any obligation or condition in this Agreement must be in writing. No waiver will be implied from any delay or failure by RHA to - ake action on any breach or default of Permittee or to pursue any remedy allowed under thi greement or applicable law. Consent by RHA to any act or omission by Permittee shall not b construed to be a consent to any other or subsequent act or omission or to waive the requirement for RHA's written consent to future waivers.

15.3 Entire Agreement. This Agreement together with the exhibits attached hereto and incorporated herein by reference, and the ERNA constitutes the entire agreement between RHA and Permittee relating to the subject matter hereof, and supersedes all prior oral or written agreements pertaining thereto.

15.4 Governing Law; Venue. This Agreement shall be governed and construed in accordance with the laws of the State of California, excluding principles of conflicts of law.

Any litigation arising under this Agreement shall be prosecuted in the Superior Court of California, County of Contra Costa, and all parties waive their respective rights to change venue pursuant to Section 394 of the Code of Civil Procedure

15.5 Severability. Each provision of this Agreement shall be considered severable, and if any provision of this Agreement is determined to be invalid or contrary to any existing or future law, such invalidity shall not impair the remainder of this Agreement provided that the remainder of the Agreement can, absent the excised portion, be reasonably interpreted to give effect to the intentions of the Parties

15.6 Headings; Interpretation. The section headings and captions used herein are solely for convenience and shall not be used to interpret this Agreement. Any reference to a particular section of this Agreement shall mean a reference to all subsections thereof. The Parties acknowledge that this Agreement is the product of negotiation and compromise on the part of both Parties, and the Parties agree, that since both Parties have participated in the negotiation and drafting of this Agreement, this Agreement shall not be construed as if prepared by one of the Parties, but rather according to its fair meaning as a whole, as if both Parties had prepared it.

15.7 No Third Party Beneficiaries. There are no other third party beneficiaries of this Agreement.

15.8 Parties Not Co-Venturers. Nothing in this Agreement is intended to or shall establish the Parties as partners, co-venturers, or principal and agent with one another.

15.9 Notices. Notices to be sent pursuant to this Agreement shall be in writing and shall be sent in accordance with Section 17.6 of the ERNA.

15.10 Amendments. This Agreement may not be amended or modified except by a written instrument signed by the Parties.

15.11 Counterparts. This Agreement may be executed in multiple original counterparts, each of which is deemed to be an original, and all such counterparts shall constitute 6 OAK #4883-4424-2996 vl
one and the same instrument. A facsimile or electronic signature on this Agreement shall be as valid as an ink-signed original.
[REMAINDER OF THIS PAGE IS BLANK; SIGNATURES ON NEXT PAGE] 7 OAK. #4883-4424-2996 v1
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above. -
RHA:

HOUSING AUTHORITY OF THE CITY OF RICHMOND, a public body, By. hannette Beacham
/ Nannette J. Beacham, Executive Director
By:_
Susan E. Bloch, Special Counsel
PERMITTEE:

MCCORMACK BARON SALAZAR, INC., a Missouri corporation
By: wom
Print Name: Vincent R. Bennett
Title: President
RICHMOND NEIGHBORHOOD HOUSING SERVICES, a California
nonprofit public benefit corporation
By:

Print Name:_
Title:

OAK #4883-4424-2996v1
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above. -
RHA:

HOUSING AUTHORITY OF THE CITY OF RICHMOND, a public body, corporate and politic
By:

Nannette J. Beacham, Executive Director
Approved as to form:

By:

DEVELOPER:

MCCORMACK BARON SALAZAR, INC., a Missouri corporation
By:

Print Name: -
Title:

RICHMOND NEIGHBORHOOD HOUSING SERVICES, a California
8 OAK #4876-9538-8718 v2
Exhibit A

PROPERTY
[Insert legal description.]
Exhibit B

INSURANCE REQUIREMENTS
[Attach insurance requirements.]
9 OAK #4876-9538-8718 v2
Exhibit A

SITE SIZE
392,475 SF or 9 acres
OAK. #4883-4424-2996 vl

EXHIBIT B
City of Richmond - Insurance Requirements - Type 1:

Consultants and Contractors
In all instances where a CONTRACTOR or its representatives will be conducting business and/or providing services, the City requires the following MINIMUM insurance requirements and limits.

CONTRACTOR shall procure and maintain for the duration of the contract, agreement, or other order for work, services or City as a material breach of contract.

Original, signed certificates and original, separate policy endorsements, naming the City as an additional insured for eneral lability, as well as a waiver of subrogation for Workers' Compensation insurance, shall be received and approved by the City before any work may begin. However, failure to do so shall not operate as a waiver of these insurance requirements.

City reserves the right to modify or require additional coverages for specific risk exposures depending on scope of CONTRACTORS work.

Minimum coverage is detailed below. The policy limits of coverage shall be made available to the full limits of the policy.

The minimum limits stated herein shall not serve to reduce the policy limits of coverage of CONTRACTOR.

Minimum Scope of Insurance - the following forms shall be provided and coverage shall be at least as broad as the following:

1. Including serage for bodily and personal alry, proper a so real co ted

2. Insurance Services Office Automobile Liability coverage (ISO Form CA 0001, Code 1, Any Auto)

3. Original and Separate Additional Insured Endorsements for General Liability (ISO Form CG 20 10 11/85 or its equivalent) with primary and non-contributory language.

4. Workers' Compensation Insurance as required by the State of California including Employer's Liability coverage.

5. Original and Separate Waiver of Subrogation for Workers' Compensation and Builder's Risk/ Course of Construction Insurance.

6. Builder's Risk/Course of Construction insurance covering all risks of loss less policy exclusions when the ity of Richmond has a financial interest in the property. - (Only required for Construction Contract nvolving property.

7. Contractor's Pollution Liability (if applicable for Construction Contractors) Required Coverage Minimum Limits
Statutory limits as required by the State of California including $1 million Employers Latingtion and Employers' Liability per accident, per employee for bodily injury or disease.

If CONTRACTOR is self-insured, provide a certificate of Permission to Self- Insure, signed by the California Department of Industrial Relations and Self- Insurance. If CONTRACTOR is a sole proprietor (has no employees) then CONTRACTOR must sign "Contractor Release of Liability" found at:
http://www.ci.richmond.ca.us/index.aspx?nid=61.

General Liability PROJECT COST REQUIRED LIMIT
$0 - $5 million $2 million p/o
Type 1 - Page 1 of 4
Revised: September 2011

EXHIBIT B
City of Richmond - Insurance Requirements - Type 1:

Consultants and Contractors
(primary and excess limits $5 million - $10 million $5 million p/o combined) Over $10 million $10 million p/o
Fireworks
Includes coverage for bodily injury, personal injury, property damage and products and completed operations. The policy shall not exclude coverage fo ‹CU perils (explosion, collapse, or damage to underground property).

If the pollcy includes a general aggregate, either the general aggregate shall apply separately to this project, service or location or the minimum required gregate timmy: shall be twice the per occurrence limit ($4 licy shall be endorsed to name the City of Richmond as an addition sured per the conditions detalled belov
Automobile Liability $1,000,000 per occurrence for bodily injury and property damage.

Coverage shall include all risks of direct physical loss, excluding earthquake for an amount equal to the full completed value of the covered structure or replacement value of alterations or additions, including soft costs and Builders' Risk/Course of business interruption.

Construction - Covers property If the project does not involve new or major reconstruction, an Installation under construction, repair or Floater may be acceptable. For such projects, a property installation floater renovation as well as equipment shall be obtained that provides for the improvement, remodel, modification, and materials to be installed.
(Only required for Construction
Projects involving property and
equipment installation.)
the City of Richmond's site.
appear. The insured sal wave l das or sure as is interest ma Contractor's Pollution Liability Same limits as General Liability.

Protects against:
unexpected/unintended release of
pollution resulting from contractor's
covered operations such as:

HVAC, paving, carpentry, pipeline
& tank installation, drillers,
remediation contractors,
maintenance, mechanical,
Required Policy Conditions
A. M. Best Rating A:VII or Better. If the A.M. Best Rating falls below the required rating, CONTRACTOR must replace coverage immediately and provide notice to City.

Additional Insured Endorsement Applicable to General Liability Coverage.

The City of Richmond, its officers, officials, employees, agents and volunteers are to be named as additional insureds for all liability arising out of the operations by or on behalf of the named insured, including but not limited to bodily injury, deaths and property damage or destruction arising in any respect directly or indirectly in the performance of this contract.

ISO form CG 20 10 (11/85) or its equivalent is required. The endorsement must not exclude products and completed operations coverage. If it does, then CG 20 37(10/01) is also required.

Additional Insured Endorsement SAMPLE Endorsements can be found at (continued) http://www.ci.richmond.ca.us/index.aspx?nid=61 Primary and Noncontributory CONTRACTOR's insurance coverage must be primary coverage as it pertains to the City, its officers, officials, employees, agents and volunteers. Any Type 1 - Page 2 of 4
Revised: September 2011

EXHIBIT B
City of Richmond - Insurance Requirements - Type 1:

Consultants and Contractors
responsibility to provide insurance.

Walver of Subrogation CONTRACTOR's insurer will provide a Walver of Subrogation in favor of the Endorsement Form City for Workers Compensation and Builder's Risk/ Course of Construction coverage during the life of this contract.

SAMPLE Endorsements can be found at
http://www.ci.richmond.ca.us/index.aspx?nid=61
Deductibles and Self-Insured ny deductible or self-insured retention must be declared to and approve Retentions y the City. At the option of the City either the insurer shall reduce o related investigations, claims administration and defense expenses.

CONTRACTOR is responsible for satisfaction of the deductible and/or self- insured retention for each loss.

Loss Payable Endorsement (only Applicable to Builder's Risk/Course of Construction naming the City of required when Builder's Risk Richmond as Loss Payee
Insurance is requirenstruction
SURETY BONDS CONTRACTOR shall provide:
(If a Public Works/Engineering 1. A Bid bond
Project) 2. A Performance Bond

3. A Payment Bond
Umbrella/Excess Liability Policies
fan Umbrella or Excess Liability Policy is used to meet the liability limits, coverage shall be as broad as specified fo inderlying coverages and cover those insured in the underlying policies Claims-Made Policies
f any insurance policy is written on a claims-made form: 1) the retroactive date must be shown, and must be before th ate of the contract or the beginning of contract work. 2) Insurance must be maintained and evidence of insurance mu Subcontractors
CONTRACTOR shall include all subcontractors as insured under its policies or shall furnish to the City for review and pproval, separate certificates and endorsements for each subcontractor. All coverage for subcontractors shall be subje all of the requirements stated herei
CONTRACTOR agrees to defend and indemnify the City of Richmond for any damage resulting to it from failure of eithe CONTRACTOR or any subcontractor to take out or maintain the required insurance policies. The fact that insurance is Verification of Coverage
endorsements affecting the coverage at any time
Type 1 - Page 3 of 4
Revised: September 2011

EXHIBIT B
City of Richmond - Insurance Requirements - Type 1:

Consultants and Contractors
Original insurance certificates and required policy endorsements shall be mailed, or delivered to the Designated Project Manager for the City of Richmond.

Insurance certificates and endorsements may be faxed to the Designated Project Manager. However, CONTRACTOR must mail the original certificates and endorsements to Designated Project Manager once faxed.

Designated Project Manager.

Cancellation
CONTRACTOR shall ensure that coverage shall not be cancelled, reduced or otherwise materially changed except after thirty (30) days' prior written notice has been given to the City.

Reporting Requirements
Any failure to comply with reporting or other provisions of the policies including breaches of warranties shall not affect coverage provided to the City, its officers, officials, employees or volunteers.

Consistent with Public Policy
The insuring provisions, insofar as they may be judged to be against public policy shall be void and unenforceable only to the minimum extent necessary so that the remaining terms and provisions herein may be consistent with public policy and thus enforceable.

Type 1 - Page 4 of 4
Revised: September 2011
Nystrom Term Sheet: ERNA
September 7, 2021
Topic/Item Deal Points

1. Development Site Developer will be responsible for redevelopment of four blocks (APNs: 544-132-001, 544-111-001, 544-112-001, 544-113-001) comprising 392,475 SF (9 acres); referred to as Blocks A, B, C, and D respectively (See Exhibit 1).

2. Entitlements Existing zoning: RM-1 Medium Density Multi-Family Residential

3. Development Developer must replace existing 100 PHA units (on Block A or Block B). Additionally, proposed development Program program includes appx. 100 workforce rental units on Block A or B and appx. 90 moderate-income homeownership units on Blocks C and D. Phasing to be determined based on market/financing opportunities and relocation plan.

4. Predevelopment a. Upon execution of MDA, all predevelopment expenses, including relocation, will be paid by Developer or Expenses sources secured by the Developer.
b. Eligible predevelopment expenses paid by RHA and/or the City of Richmond through closing will be reimbursed at closing, including but not limited to development financial consulting and legal expense.

5. Developer Fee Developer Fee is subject to the maximum allowable per CA LIHTC regulations at time of closing, and as agreed to (Rental Housing) by the parties. To the extent that any developer fee is deferred, developer will receive payment of that fee through its 50% share of net cash flow (residual receipts) In no way should this be construed as a minimum guaranteed cash developer fee payment for either Block or both combined.

6. Net Cash Flow For Rental Blocks A and B, RHA and the Developer will share residual net cash flow (residual receipts), with 50% (Sharing) Residual going to Developer and 50% to all applicable public funders which will require to-be-negotiated terms for waterfall Receipts (Rental distributions.

Housing)

7. General Partner Developer's maximum yearly general partner asset management fee will be capped at $15,000 per Block for rental Asset Management housing.

Fee (Rental Housing)

8. Property Developer will cap its property management fee for rental blocks at $550 per unit per annum (PUPA), escalated at Management Fee the CP for All Urban Consumers (CPI-U) for the San Francisco Area starting in 2022, unless otherwise agreed to (Rental Housing) between the parties, consistent with the maximum allowable per CA LIHT regulations at time of closing.

9. Cash Deposit Developer agrees to pay a $100,000 non-refundable cash deposit upon execution of the ERNA.

10. Ground Lease: RHA will provide a ground lease of the sites for rental housing (Blocks A and B). Lease amount will be based on Rental Blocks A & B the restricted value of the land after accounting for affordability of each project, using appraisal assumptions and methodology to be specified in the MDA. RHA will receive a capitalized ground lease payment of at least ' To be defined in Master Development Agreement (MDA).

Nystrom Term Sheet: ERNA
September 7, 2021
$500,000 for each block payable in two installments during construction. RHA will receive an annual ground lease payment equal to its pari passu share of 50% of residual receipts?, shared with other soft lenders if and as necessary. During years 1-12, RHA will receive a minimum ground lease of $50,000 per year. If residual receipts are not sufficient to pay ground lease, ground lease payments accrue with interest and are payable in future years from residual receipts.

11. Property Sale: RHA will sell sites for ownership housing (Blocks C and D) to Developer for a price determined by appraisal at the Owner Blocks C & D proposed use within 60 days of closing. The amount of cash payment to RHA for the land at construction loan closing will be determined based on the final closing pro forma, not to exceed appraised value, providing a fixed profit margin to be specified in the MDA (as a % of total development costs, including cash land payment) to Developer. Any shortfall of the appraised land price will be treated as RHA's equity in the project, secured by individual second mortgages on each unit, payable upon the homeowner's future sale or refinance of the home (unless RHA decides to allow the second mortgage to be transferred to a new owner to secure longer affordability).

12. Financial Developer will provide financial guarantees required by lenders and investors related to the construction loan, tax Guarantees credit delivery and operating deficits.

13. Project-Based RHA will work with Contra Costa County Housing Authority (CCCHA) and Developer to secure Project-Based Vouchers Vouchers (PBVs) allocated by HUD for replacement PHA units and to ascertain whether any PBVs are available for Block B. Number of vouchers to be determined according to HUD methodology based on occupancy of existing public housing units over the last 24 months prior to Section 18 approval.

14. Financing Sources Developer will work diligently to pursue all sources of financing necessary to provide full funding for development of all four blocks. The initial proposal anticipates 4% tax credits and tax-exempt bonds for the PHA replacement units and conventional debt and private equity for the workforce rental units. Gap financing for owner units on Block C and D may be pursued to deepen affordability.

15. Bid Construction The Developer will share all bid documents with RHA and comply with RHA requirements regarding construction and Permanent Debt hiring goals and prevailing wage. Developer will solicit construction and other financing for each ownership Block and Tax Credit Equity (C and D) and lender and investor bids for each rental Block (A and B) to obtain most competitive pricing, terms and conditions. RHA and its Advisor will review and approve bid documents, list of lenders and/or investors to receive them, subsequent lender/investor proposals and Developer's recommendations for all such financing.

16. Financing Plan From time to time, and as requested by RHA, during the predevelopment phase and prior to Project Closing, Modifications Developer shall submit to RHA and its Advisor for review updated versions of the Financing Plan for each Block reflecting any and all changes from prior versions submitted to RHA. RHA and Developer shall jointly approve 2 To be defined in MDA.
3 Interest rate to be specified in MDA.

Nystrom Term Sheet: ERNA
September 7, 2021
changes to the Financing Plan through construction loan closing. Developer and RHA will meet and confer if costs increase creating a funding gap. If the funding gap cannot be closed, Developer will have the right to terminate the Agreement. RHA can terminate the Agreement for cause if Developer is in default of the Agreement.

17. Cost Savings In the event, upon completion of the final cost cert and receipt of the Form 8609 for LIHTC-financed Blocks, there (Rental Blocks with are Net Proceeds of Permanent Financing (defined as permanent financing sources in excess of total development LIHTCs) costs), 100% of these Net Proceeds will be returned to RHA as payment on its Seller Loan(s), except as other public funders may require sharing of these cost savings. Developer will not be entitled to any construction cost savings.

18. RHA Approval RHA shall have approval rights, which shall not be unreasonable withheld or delayed, over:

Rights a. Key members of the development team, including planning consultant, architects), and general contractor. b. Key documents, including Construction Plans and Construction Contract c. Appraisal
d. Project financing, consistent with the requirements of the lender/investor. e. Sale and refinancing, consistent with the requirements of the lender/investor f. Property management agent for rental housing
g. Sales broker and market agent for owner housing
h. Lease-up, marketing and sales plans, consistent with fair housing requirements

19. Transfer or Developer agrees to RHA approval rights over transfer or assignment that are industry standard for tax credit Assignment financed rental housing. Developer agrees to RHA approval rights over transfer or assignment of owner Blocks.

20. Removal of Developer agrees to RHA rights to: 1) remove and replace property management agent for cause; 2) remove and Property Manager replace general partner for cause with approval of lenders and investor. and GP (Rental)

21. Resident Services On-site resident services appropriate to the tenant population will be provided for each rental block (consider one (Rental Housing) location for both blocks?) and funded through the operating budget. RHA will have approval rights over a resident services plan.

22. Time of The MDA will specify 1) time of performance benchmarks by Block, including but not limited to: application for Performance entitlements; financing applications; relocation; start of construction; 2) provision for extensions; 3) consequences for failure to meeting deadlines.

RICHMOND HOUSING AUTHORITY MODERNIZATION # DEVELOPMENT # ARCHITECTURAL SERVICES AFFIRMATIVE ACTION AND SECTION 3 REQUIREMENTS This contract is subject to the following conditions under Section 3 of the Housing and Urban Development Act of 1968, as amended, 12 U.S.C. 1701u (Section 3):

AFFIRMATIVE ACTION REQUIREMENT
A. The work to be performed under this contract is subject to the requirements of Section 3 of the Housing and Urban Development Act of Under Executive Order 11246, as amended, the Richmond 1968, as amended, 12 U.S.C. 1701u (Section 3). The purpose of Housing Authority shall advise all construction-related contractors and Section 3 is to ensure that employment and other economic opportunities contracts over $10,000 to document affirmative actions taken to ensure generated by HUD assistance or HUD-assisted projects covered by equal opportunity in employment. This documentation is subject to review by the Regional Office of the Department of Labor. As a part of Section 3, shall, to the greatest extent feasible, be directed to low-and very low-income persons, particularly persons who are recipients of HUD normal contract administration, the Richmond Housing Authority will assistance for housing. determine compllance with the equal opportunity
affirmative action requirements and will review Contractor performance to The parties to this contract agree to comply with HUD's B.
ensure that these responsibilities are met. regulations in 24 FR part 135, which Implement Section 3, As evidenced by their execution of this contract, the parties to this contract

RESPONSIBILITIES OF CONTRACTORS AND SUBCONTRACTORS
certify that they are under no contractual or other impediment that would prevent them from complying with the part 135 regulations.

All Contractors and Subcontractors on modernization or other development activities are required to take affirmative action to comply The contractor agrees to send to each labor organization or C.
representative of workers with which the contractor has a collective 11246, as amended. bargaining agreement or other understanding, if any, a notice advising the labor organization or workers' representative of the contractor's All Subcontractors shall perform on the site, and with its own commitments under this Section 3 clause, and will post copies of the forces, work of a value equivalent to no less than seventy-five percent notice in conspicuous places at the work site where both employees and (75%) of the total amount of work to be performed under the applicants for training and employment positions can see the notice. The subcontract. This percentage may be reduced by a supplemental notice shall describe the Section 3 preference, shall set forth minimum agreement to this contract, if during performance of the work, the number and job titles subject to hire, availability of apprenticeship and Subcontractor requests a reduction and the Contracting Officer determines that such reduction would be to the advantage of the training positions, the qualifications for each; and the name and location of the person(s) taking Richmond Housing Authority. applications for each of the positions; and the anticipated date the work shall begin.

DEFINITIONS
D. The contractor agrees to include this Section 3 clause in every Section 3 business concern means a business concern, subcontract subject to compliance with regulations in 24 CFR part 135, defined as: and agrees to take appropriate action, as provided in an applicable (1) That is 51 percent or more owned by section 3 provision of the subcontract or in this Section 3 clause, upon a finding that residents; or the subcontractor is in violation of the regulations in 24 FR part 135. (2) Whose permanent, full-time employees include The contractor will not subcontract with any subcontractor where the persons, at least 30 percent of whom are currently section 3 residents, or contractor has notice or knowledge that the subcontractor has been found within three years of the date of first employment with the business in violation of the regulations in 24 CFR part 135. concern were section 3 residents; or
(3) That provides evidence of a commitment to The contractor will certify that any vacant employment E.
subcontract in excess of 25 percent of the dollar award of all subcontracts positions, including training positions, that are filled 91) after the to be awarded to business concerns that meet the qualifications set forth contractor is selected but before the contract is executed, and (2) with in paragraphs (1) or (2) in this definition of "section 3 business concern." persons other than those to whom the regulations of 24 FR part 135 require employment opportunities to be directed, were not filled to Section 3 resident means:
circumvent the contractor's obligations under 24 CFR part 125.

An Richmond public housing resident; or
An individual who resides in the City of Richmond: Noncompllance with HUD's regulations in 24 CFR part 135 may A low-income person, as this term is result in sanctions, termination of this contract for default, and debarment defined in section 3(b)(2) of the 1937 Act (42 U.S.C. 1437a(b)(2). or suspension from future HUD-assisted contracts.

Section 3(b)(2) of the 1937 Act defines this term to mean families (including single persons) whose incomes do not exceed 80 percent of G. With respect to work performed in connection with Section 3 the median income for the area, as determined by the Secretary, with covered Indian housing assistance, Section 7(b) of the Indian Self- adjustments for smaller and larger families, except that the Secretary may Determination and Education Assistance Act (25 U.S.C. 450e) also establish income ceilings higher or lower than 80 per centum of the applies to the work to be performed under this contract. Section 7(b) median for the area on the basis of the Secretary's findings that such requires that to the greatest extent feasible (i) preference and varlations are necessary because of prevailing levels of construction opportunities for training and employment shall be given to Indians, and costs or unusually high or low-income families; or (il) preference in the award of contracts and subcontracts shall be given to A very low-income person, as this term is Indian organizations and Indian-owned Economic Enterprises. Parties to defined in section 3(b)(2) of the 1937 Act (42 U.S.C. 1437a(b)(2). this contract that are subject to the provisions of Section 3 and Section Section 3(b)(2) of the 1937 Act (42 U.S.C. 1437a(b)(2) defines this term 7(b) agree to comply with Section 3 to the maximum extent feasible, but to mean families (including single persons) whose incomes do not exceed not in derogation of compliance with Section 7(b). 50 per centum of the median family income for the area, as determined by the Secretary with adjustments for smaller and larger families, except that ECONOMIC OPPORTUNITIES POLICY the Secretary may establish income cellings higher or lower than 50 per centum of the median for the area on the basis of the Secretary's findings Section 3 of the Federal Housing Act of 1968, as amended, that such variations are necessary because of unusually high or low (hereinafter referred to as "Section 3) requires that economic opportunities generated by certain U.S. Department of Housing and RICHMOND HOUSING AUTHORITY MODERNIZATION # DEVELOPMENT # ARCHITECTURAL SERVICES Jrban Development financial assistance for housing and community manner construed as a relief from other efforts to pursue eligible vendors development programs shall, to the greatest extent feasible, be given to and individuals that conform to Section 3 contracting goals stated in these ow-and very low-income persons, particularly those who are recipients of Requirements. EMT will merely be a resource to assist Contractor in th government assistance for housing, and to businesses that provide ulfillment of contracting goals economic opportunities for these persons.

Pursuant to Section 3 of the Housing Act of 1968, as amended, and 24 CFR part 135, the Richmond Housing Authority has adopted an Economic Opportunities Policy. It is the intent of the policy to comply illy with Section 3; and by publication of this policy, the Richmon lousing Authority wishes to provide direction for application of this policy It is the policy of the Richmond Housing Authority to assure that at least 25% of the construction related work force hours be provided to the greatest extent feasible to low- and very low-income persons in accordance with these Requirements and to businesses meeting the definition of "Section 3 business concern" as defined by 24 CFR part 135.

In furtherance of this policy, the Richmond Housing Authority shall develop programs and procedures necessary to implement this policy covering all procurement contracts where labor and/or professional services are provided, in order to achieve the goals outlined below. This policy does not apply to contractors who only furnish materials or supplies, and do not undertake work, as in the installation of the material or equipment.

MONITORING
The Authority will monitor

SANCTIONS

COMPLAINT PROCESS

INDEMNIFICATION
Subconsultants,
firm, or corporatior
furnishing or supplying work, materials, or supples Ir
imployment and Training (EMT) to obtain list of eligible Section :
vendors, individuals, and businesses to fill employment and contracting opportunities related to the Project. Nevertheless, eligibility list from Employment and Training are not meant to be exhaustive and in any

Richmond City CouncilJune 20, 2023

Richmond City Council
June 20, 2023