Attachment 2 - Draft Nevin 2 - Lease DDA LDDA 4892-0329-9990 v.6.pdf

4892-0329-9990 v6

LEASE DISPOSITION AND DEVELOPMENT AGREEMENT

by and between

THE HOUSING AUTHORITY OF THE CITY OF RICHMOND

and

NEVIN PLAZA II, L.P.

(Nevin Plaza – Phase II)

_______________, 2024

4892-0329-9990 v6 2
THIS LEASE DISPOSITION AND DEVELOPMENT AGREEMENT (this
“Agreement”) is entered into effective as of _______________, 2024 (“Effective Date”) by and between the Housing Authority of the City of Richmond, a public body corporate and politic (“RHA”) and Nevin Plaza II, L.P., a California limited partnership (“Developer”). RHA and the Developer are collectively referred to herein as the “Parties.”

RECITALS
A. RHA is the owner of the real property consisting of approximately 21,579 square feet of unimproved land in the City of Richmond, California, known as Contra Costa County Assessor’s Parcel Nos. 515-261-010, 515-261-003, 515-261-002 and 515-261-001 (ptn), and more particularly described in Exhibit A attached hereto (the “Property”).

B. Following RHA’s solicitation and evaluation of development proposals for the Property, RHA entered into an Exclusive Right to Negotiate Agreement with EAH Inc., a California nonprofit public benefit corporation (“EAH”) dated as of July 1, 2020 (the “ERNA”).

C. Authority and EAH entered into that certain unrecorded Master Development Agreement dated as of December 15, 2020 (“Original Master Development Agreement”) and amended by that certain unrecorded First Amendment to Master Development Agreement dated as of March 1, 2023 and executed by and between Authority and EAH (as so amended, the “Master Development Agreement”).

D. Authority and Nevin Plaza I, L.P., a California limited partnership (“Phase I Partnership”) entered into that certain License Agreement dated as of March 1, 2023 and recorded in the Official Records on March 20, 2023 as Instrument No. 2023-0025657 (the “License Agreement”).

E. Developer has proposed the development of a multifamily rental housing development on the Property that will be affordable to low-, extremely-low, and very low- income households (as more particularly described herein, the “Project”).

F. Among other approvals for the Project, if applicable, the City will consider Developer’s application for a density bonus for the Project pursuant to the State Density Bonus Law, and Developer’s application for streamlined review of the Project pursuant to SB 35. The proposed Project may be exempt from California Environmental Quality Act (“CEQA”) review if it qualifies for streamlined review under SB 35.

G. Upon satisfaction of the conditions precedent set forth in this Agreement and subject to the terms and conditions set forth herein, RHA will lease the Property to Developer pursuant to a Ground Lease substantially in the form attached hereto as Exhibit E (“Ground Lease”) for development and operation of the Project.

H. Substantially concurrently with the Closing, among other documents, Developer will execute and deliver to RHA the Ground Lease and an Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants that will require rents for the residential

4892-0329-9990 v6 3
units to be affordable to low-, extremely-low, and very low-income households for the term of the Ground Lease.

I. A material inducement to RHA to enter into this Agreement is the agreement by Developer to develop the Project within the time periods specified herein and in accordance with the provisions hereof, and RHA would be unwilling to enter into this Agreement in the absence of an enforceable commitment by Developer to take such actions and complete such work in accordance with such provisions and within such time periods.

NOW, THEREFORE, in consideration of the mutual covenants contained herein and good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows.

ARTICLE I
DEFINITIONS; EXHIBITS

1.1 Incorporation of Recitals. The Parties acknowledge the truth of the foregoing recitals which are hereby incorporated into this Agreement by this reference.

1.2 Definitions. The following terms shall have the meanings set forth below whenever used in this Agreement and the Exhibits attached hereto. Additional terms are defined in the Recitals and text of this Agreement.
“Affordable Rent” is defined in the Regulatory Agreement.

“Applicable Laws” is defined in Section 5.15.

“Area Median Income” is defined in Section 5.22.1.
“Assignment Agreement” is defined in Recital H.
“Authorized Representative” means RHA’s Executive Director or his or her designee.
“Building Permit Application” means the complete application for Project building permits, including all Construction Plans and other documentation required by RHA or the City.
“CDLAC” means the California Debt Limit Allocation Committee. “Certificate of Completion” is defined in Section 5.12. “City” means the City of Richmond, a California municipal corporation. “Claims” is defined in Section 5.11.

4892-0329-9990 v6 4
“Closing,” “Closing Date” and “Close of Escrow” shall be the date that escrow closes for Project construction financing, and shall be the date upon which the term of the Ground Lease commences and the Memorandum of Lease is recorded.
“Commencement Date” means the date that the term of the Ground Lease commences, and shall be Closing Date.
“Conditions of Approval” is defined in Section 5.4.
“Construction Plans” is defined in Section 5.6.

“Conversion Date” means the date that the Project’s conventional construction loan converts to a permanent loan.
“County” means the County of Contra Costa.
“CTCAC” means the California Tax Credit Allocation Committee. “Developer” means Nevin Plaza II, L.P., a California limited partnership. “Developer Parties” means Developer and Developer’s agents, employees, consultants, contractors, and subcontractors, and any person acting on behalf of, or as the invitee of, any of the foregoing.

“Developer’s Permitted Exceptions” is defined in Section 3.1.

“EAH” is defined in Recital B.

“Effective Date” is the date specified in the preamble to this Agreement.

“ERNA” is defined in Recital B.

“Environmental Laws” is defined in Section 6.10.2.
“Escrow Agent” is defined in Section 3.4.
“Fifteen Year Compliance Period” means the fifteen (15) year compliance period described in Section 42(i)(1) of the Internal Revenue Code of 1986, as amended.
“Force Majeure” is defined in Section 11.2.
“Gross Income” is defined in the Regulatory Agreement.
“Ground Lease” is defined in Recital F.
“Hazardous Material” is defined in Section 6.10.1.

4892-0329-9990 v6 5
“HCD” means the California Department of Housing and Community Development.
“HUD” means the U.S. Department of Housing and Urban Development. “HUD Documents” means collectively, a Release of Declaration of Trust and a Use Agreement in form approved by HUD.
“Improvements” means the improvements to be developed on the Property pursuant to this Agreement and the Ground Lease. “Indemnitees” is defined in Section 5.11.
“Investor Limited Partner” means the entity to be admitted as a limited partner pursuant to the Partnership Agreement, and that will provide equity contributions to fund development of the Project.
“License Agreement” is defined in Recital D.
“Master Development Agreement” is defined in Recital C.

“Memorandum of Lease” is defined in Section 3.7.

“Original Master Development Agreement” is defined in Recital C.

“Official Records” means the Official Records of Contra Costa County.

“Partnership Agreement” means Developer’s agreement of limited partnership as such may from time to time be amended or amended and restated. “Phase I Partnership” is defined in Recital D.
“Phase I Project” means the 140 unit multifamily project owned by the Phase I Partnership and located adjacent to the Property on land leased from RHA.
“Project” is defined in Recital E and more particularly described in Section 2.3.
“Property” is defined in Recital A and described in Exhibit A. “Reciprocal Easement Agreement” is defined in Section 2.3. “Regulatory Agreement” is defined in Section 3.7.
“Restricted Unit” means a dwelling unit that is reserved for occupancy at an Affordable Rent by eligible households of specified household income levels as set forth in this Agreement and the Regulatory Agreement.

4892-0329-9990 v6 6
“RHA” means the Housing Authority of the City of Richmond, a public body corporate and politic.
“RHA Documents” means collectively, this Agreement, the Regulatory Agreement, the Ground Lease, and the Memorandum of Lease. “SB 35” means California Government Code Section 65913.4 (Chapter 366, Statutes of 2017).
“State Density Bonus Law” means California Government Code Section 65915 et. seq.
“Term” is defined in Section 3.3.
“Title Company” is defined in Section 3.4.
“Title Report” is defined in Section 3.1.

“Transfer” is defined in Section 7.2.
“Updated Financing Plan” is defined in Section 2.5.2.

1.3 Exhibits. The following Exhibits are attached hereto and incorporated into this Agreement by this reference:

A Legal Description of the Property
B Project Schedule
C Form of Certificate of Completion
D Form of Regulatory Agreement
E Form of Ground Lease
F-1 Preliminary Financing Plan
F-2 Final Financing Plan

ARTICLE II
REPRESENTATIONS; EFFECTIVE DATE; PROJECT SCOPE; FINANCING PLAN

2.1 Representations. Developer covenants that until the expiration or earlier termination of this Agreement, upon learning of any fact or condition which would cause any of the warranties and representations in this Section 2.1 to be untrue, Developer shall immediately give written notice of such fact or condition to RHA. Developer acknowledges that RHA shall rely upon Developer’s representations made herein notwithstanding any investigation made by or on behalf of RHA. Developer hereby represents, warrants, and covenants that the following are true and correct as of the Effective Date, and shall be true and correct as of the Closing Date.

(a) Organization. Developer is a limited partnership, duly organized and in good standing under the laws of the State of California. Developer’s Managing General Partner is Nevin Plaza II EAH, LLC, a California limited liability company duly organized and in good

4892-0329-9990 v6 7
standing under the laws of the State of California, whose sole member and manager is EAH Inc., a California nonprofit public benefit corporation, duly organized and in good standing under the laws of the State of California, and tax-exempt under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended.
(b) Authority of Developer. Developer has full power and authority to execute and deliver the RHA Documents and all other documents or instruments that have been or that will be executed and delivered by Developer pursuant to or in connection with this Agreement, and to perform and observe the terms and provisions of all of the foregoing. (c) Authority of Persons Executing Documents. This Agreement, the other RHA Documents, and all other documents or instruments that have been or that will be executed and delivered by Developer pursuant to or in connection with to this Agreement, have been executed and delivered, or will be executed and delivered, by persons who are duly authorized to execute and deliver the same for and on behalf of Developer, and all actions required under Developer’s organizational documents and applicable governing law for the authorization, execution, delivery and performance of this Agreement, the other RHA Documents, and all other documents or instruments that have been or that will be executed and delivered by Developer pursuant to or in connection with this Agreement, have been duly taken or will have been duly taken (to the extent such actions are required) as of the date of execution and delivery of such documents.
(d) Valid and Binding Agreements. This Agreement, the other RHA documents, and all other documents or instruments that have been or that will be executed and delivered by Developer pursuant to or in connection with this Agreement constitute, or if not yet executed or delivered, will when so executed and delivered, constitute, legal, valid and binding obligations of Developer, enforceable in accordance with their respective terms, subject to laws affecting creditors’ rights and principles of equity.
(e) No Breach of Law or Agreement. Neither the execution nor delivery of this Agreement, the other RHA Documents, or any other documents or instruments that have been or that will be executed and delivered by Developer pursuant to or in connection with this Agreement, nor the performance of any provision, condition, covenant or other term hereof or thereof, will conflict with or result in a breach of any statute, rule or regulation, or any judgment, decree or order of any court, board, commission or agency binding on Developer, or any provision of the organizational documents of Developer, or will conflict with or constitute a breach of or a default under any agreement to which Developer is a party, or will result in the creation or imposition of any lien upon any assets or property of Developer, other than liens established pursuant hereto.
(f) Pending Proceedings. Except as disclosed in writing to RHA prior to execution of this Agreement, Developer is not in default under or in violation of any law or regulation or under any order of any court, board, commission or agency whatsoever, and, to the best knowledge of the principals of Developer’s general partners, there are no claims, actions, suits or proceedings pending or threatened against or affecting Developer, at law or in equity, before or by any court, board, commission or agency. Neither Developer nor any of its general partners are the subject of a bankruptcy or insolvency proceeding, and no general assignment or

4892-0329-9990 v6 8
general arrangement for the benefit of creditors or the appointment of a trustee or receiver to take possession of all or substantially all of Developer’s or any general partner’s assets has been made.

2.2 Effective Date; Master Development Agreement and License Agreement. The obligations of Developer and RHA hereunder shall be effective as of the Effective Date which date is set forth in the preamble to this Agreement. Effective as of the Commencement Date, the Master Development Agreement and the License Agreement shall each terminate with the exception of any provisions that expressly survive termination, and the provisions of the Ground Lease and the RHA Documents will prevail over any inconsistent provisions of the Master Development Agreement or the License Agreement. The Parties acknowledge that this Section is consistent with the intent of Section 6.1 of the Original Master Development Agreement and Section 2 of the License Agreement.

2.3 Project Scope; Parking. The Project will include the construction of approximately 76 units of multi-family rental housing, of which 75 will be subject to affordability and occupancy restrictions. One of the residential units will be a manager’s unit that is not subject to affordability and occupancy restrictions. The Project will include at least thirty-eight (38) parking spaces in a structured garage (“Garage”). Concurrently with the commencement of the term of the Ground Lease: (i) the License Agreement will terminate in accordance with its terms, and (ii) Developer and Phase I Partnership will execute and record a reciprocal easement agreement that addresses Garage operation and maintenance obligations and provides that residents of the Project and residents of the Phase I Project will be permitted to park in the Garage (“Reciprocal Easement Agreement”).

2.4 Design Review; Environmental Review. Developer will submit design documents for the Project including a site plan, elevations, and schematic drawings for review and approval by RHA and the City.

The Parties acknowledge that Developer may submit an application for streamlined review of the Project pursuant to SB 35. In its capacity as the owner of the Property, RHA hereby consents to the submittal of such application. The Parties acknowledge that the proposed Project would be exempt from CEQA review if it qualifies for streamlined review under SB 35.

In the event that the proposed Project is modified or other circumstances arise that would affect the Project’s eligibility for exemption from CEQA review, prior to submitting an application for land use approvals for the Project, RHA and City shall cause to be performed any additional environmental studies required in connection with environmental review of the Project in accordance with CEQA. If additional environmental review is required under CEQA, Developer acknowledges that such review may involve preparation and consideration of additional information, as well as consideration of input from interested organizations and individuals, and Developer acknowledges that nothing in this Agreement is intended to, or shall be interpreted as a commitment to approve a project or program prior to completion of any required CEQA review. In addition, Developer acknowledges that any required approvals by any other local, state or federal agency may require additional environmental review, and that any approval by RHA shall not bind any other local, state or federal agency to approve the

4892-0329-9990 v6 9
Project or to impose mitigation measures that are consistent with the terms of this Agreement or with the terms of any mitigation measures required pursuant to environmental review. Prior to the Close of Escrow, Developer shall have the right to terminate this Agreement by delivery of written notice to RHA if Developer determines that implementation of any required environmental mitigation measures would cause development of the Project to become economically infeasible.

2.5 Financing Plan; Project Schedule.

2.5.1 Preliminary Financing Plan and Project Schedule. As set forth in the preliminary financing plan attached as Exhibit F-1 (“Preliminary Financing Plan”), Developer has proposed financing the Project with a combination of a conventional construction loan that will convert to a permanent loan upon completion of construction, equity contributions from federal low-income housing tax credit investors, tax-exempt bond financing, and loans and/or grants from state and federal agencies. By the time specified in Exhibit B, Developer shall submit to RHA projected development and operating pro formas for the Project. Exhibit B attached hereto sets forth the anticipated schedule for financing and development of the Project (“Project Schedule”), including target dates for submittal of financing applications and submittal of the Building Permit Application.

2.5.2 Updated Financing Plan. Developer shall submit for RHA review and approval Developer’s updated plans for construction and permanent financing of the Project (the “Updated Financing Plan”) in accordance with the schedule set forth in Exhibit B. The Updated Financing Plan shall indicate all sources of funds necessary to pay, when due, the estimated costs of the Project, including without limitation Ground Lease rent, and hard and soft construction costs, and shall be accompanied by evidence that all such funds are subject to binding commitments, in form acceptable to RHA, from Developer, equity investors, and lenders, subject only to commercially reasonable conditions. The Updated Financing Plan shall include updated development and operating pro formas that set out in detail Developer’s plan for financing the costs of leasing the Property, and constructing and operating the Project. In addition, if applicable, the Updated Financing Plan shall be accompanied by an updated Project Schedule.

2.5.3 RHA Review of Updated Financing Plan. RHA staff shall review the proposed Updated Financing Plan, and shall use reasonable efforts to review it within thirty (30) days following receipt (“Financing Plan Review Period”). If RHA does not approve the Updated Financing Plan, RHA shall set forth its objections in writing and notify Developer of the reasons for its disapproval. If RHA does not approve the Updated Financing Plan or provide written objections to Developer within the Financing Plan Review Period, then upon the expiration of the Financing Plan Review Period, Developer may provide written notice to RHA that the Financing Plan Review Period has expired (“Notice of Expiration of Financing Plan Review Period”), and if RHA does not respond within ten (10) business days following the date that RHA receives such Notice of Expiration of Financing Plan Review Period, then RHA shall be deemed to have approved the Updated Financing Plan. If RHA disapproves the Updated Financing Plan, Developer shall submit revisions that addresses the reasons for disapproval, and RHA shall grant Developer a reasonable extension of the time deadlines set forth in this Agreement as required to restructure the Updated Financing Plan, subject to the outside time

4892-0329-9990 v6 10
limit for completion set forth in Section 5.1 below. RHA’s approval of the Updated Financing Plan shall be a condition precedent to RHA’s obligation to lease the Property. The approved final Updated Financing Plan shall be attached to this Agreement as Exhibit F-2 or shall be set forth in an addendum to this Agreement. Unless expressly stated otherwise in a written instrument executed by the Parties, the terms set forth in the body of this Agreement shall prevail in the event of a conflict between the information set forth in the Updated Financing Plan and the terms set forth in the body of this Agreement.

If Developer proposes to modify the Updated Financing Plan after it has been approved by RHA, Developer shall submit proposed modifications to RHA for review and approval. The same review and notice provisions set forth in the preceding paragraph shall apply to RHA’s review of proposed modifications.

2.5.4 Tax Credit Funds and Other Financing Sources. Developer will submit applications to HCD, CDLAC, CTCAC, and other funding sources in accordance with the timeframe set forth in Exhibit B in order to secure allocations of tax-exempt bonds, federal low- income housing tax credits, and if applicable, state tax credits, and other financing for the Project to enable construction to commence by the deadline specified in Section 5.1. Subject to the deadline for start of Project construction specified in Section 5.1, Developer will submit applications to CDLAC and CTCAC in subsequent rounds if necessary to secure tax credit and tax-exempt bond allocations. Upon award of a preliminary reservation from CTCAC, Developer shall exercise diligent good faith efforts to obtain a funding commitment from a reputable equity investor. Developer’s procurement of CTCAC and CDLAC allocations and receipt of commitments from an equity investor and construction and permanent lenders sufficient to fully finance development of the Project are conditions precedent to RHA’s obligation to lease the Property to Developer and Developer’s obligation to develop the Project. Developer shall provide RHA with copies of all applications for Project financing submitted to CTCAC, CDLAC, HCD, and the Contra Costa County Housing Authority.

Consistent with the schedule set forth in Exhibit B, as such deadlines may be extended pursuant to Sections 5.1 and 11.2, Developer shall provide to RHA satisfactory evidence that all sources of construction and permanent financing for the Project are committed by investors, lenders, public agencies, or grantors, and that all such funds will be available in time to enable Project construction to commence and be completed within the times specified in Section 5.1. If Developer does not provide evidence of the commitment of all such funds by the time set forth in Exhibit B, as such deadline may be extended pursuant to Sections 5.1 and 11.2, RHA shall have the right, by delivery of written notice to Developer, to terminate this Agreement and upon such termination, except as expressly set forth herein, all rights and obligations of the Parties under this Agreement shall terminate, including without limitation, any obligation that may be construed to have arisen under this Agreement relating to the leasing of the Property or financing of the Project.

2.5.5 Loan and Grant Documents; Partnership Agreement. Developer shall submit to RHA for its review and approval, copies of all loan and/or grant documents for all Project financing sources, and a copy of the Partnership Agreement, all amendments thereto, all exhibits thereto, and all related documents.

4892-0329-9990 v6 11

ARTICLE III

LEASE OF THE PROPERTY; CONDITIONS

PRECEDENT TO CLOSING

3.1 Lease of Property; Review of Title. Developer acknowledges receipt of a preliminary title report for the Property issued by Title Company and dated ___________, 20__ (the “Title Report”). Provided that all conditions precedent set forth in this Agreement have been satisfied or waived, RHA shall lease to Developer, and Developer shall lease from RHA, the Property in accordance with and subject to the terms, covenants and conditions of this Agreement and the Ground Lease, subject to: (a) the provisions and effects of the RHA Documents and the HUD Documents, (b) applicable building and zoning laws and regulations, (c) any lien for current taxes and assessments or taxes and assessments accruing for periods subsequent to recordation of the Memorandum of Lease, (d) the exceptions shown on the Title Report, (e) liens and encumbrances created or permitted by Developer or Developer’s affiliates, employees or agents, and (f) such other conditions, liens, encumbrances, restrictions, easements and exceptions as Developer may approve in writing, which approval shall not be unreasonably withheld. All of the foregoing are collectively hereinafter referred to as “Developer’s Permitted Exceptions.”

3.1.1 Supplemental Title Review. If any new or additional items appear of record after the date of the Title Report, Developer shall obtain from the Title Company an updated preliminary title report ("Supplemental Report"). Following receipt of the Supplemental Report and documents pertaining to new exceptions appearing on the Supplemental Report, Developer shall have ten (10) business days to provide to RHA Developer’s written objections to the Supplemental Report. If Developer fails to provide written objections within such period, Developer shall be deemed to have accepted the Supplemental Report and all new exceptions listed therein. If Developer provides written notice of objections to new exceptions listed in the Supplemental Report, RHA shall have five (5) business days to notify Developer of whether RHA will undertake to remove the exceptions to which Developer has objected. If RHA fails to respond, RHA shall be deemed to have elected not to cure any of the exceptions, and in such case, Developer may elect to proceed to Close of Escrow or terminate this Agreement by written notice to RHA. Notwithstanding anything to the contrary in this Section 3.1.1: (a) Developer shall be deemed to have accepted any new exceptions that pertain to liens and encumbrances created or permitted by Developer or Developer’s affiliates, employees or agents, and (b) RHA shall take action to remove any new monetary liens affecting title to the Property that are created or permitted by RHA.

3.2 Reserved.

3.3 Ground Lease Terms. As more particularly set forth therein, the Ground Lease will include, without limitation, the following terms:
(i) The term of the Ground Lease shall commence on the Closing Date. (ii) The term of the Ground Lease (“Term”) will be for a period of ninety- nine (99) years.

4892-0329-9990 v6 12
(iii) Base Rent shall be payable annually on a residual receipts basis as described in Section 4.1.
(iv) During the term of the Ground Lease as it may be extended, Developer shall own the Improvements. Upon termination of the Ground Lease, ownership of the Improvements shall revert to RHA.
(v) RHA consent shall be required for material modifications to the Improvements.
(vi) Developer shall be obligated to pay all applicable property taxes and assessments, including without limitation, possessory interest taxes. Developer shall be permitted to apply for a “welfare” exemption from property taxes. (vii) Regulatory agreements, mortgages, and other encumbrances may be recorded only against the Improvements and Developer’s leasehold interest in the Property. No such agreements or encumbrances may be recorded against RHA’s fee interest in the Property with the exception of documents required to be recorded against the fee interest by HUD or by State of California program regulations applicable to Project financing sources.

3.4 Escrow. RHA and Developer shall open escrow at the office of Old Republic Title Company or such other title company as the Parties may agree upon (“Escrow Agent” or “Title Company”) in order to consummate the lease of the Property to Developer and the closing of escrow for the transactions contemplated hereby.

3.5 Costs of Closing and Escrow; Legal and Financial Consultant Fees. Developer shall pay all title insurance premiums for policies Developer elects to purchase in connection with the lease of the Property and the financing of the Project, and Developer shall pay all recording fees, transfer taxes, escrow fees and closing costs incurred in connection with the lease of the Property and the financing of the Project. If applicable, Developer shall pay for the cost of any lender’s policy of title insurance that RHA or City elect to acquire in connection with the transactions contemplated hereby. Property taxes and assessments shall be prorated as of the Closing Date. RHA and Developer shall provide Escrow Agent with a copy of this Agreement, which together with such supplemental instructions as RHA or Developer may provide and that are consistent with this Agreement or that are otherwise mutually agreed upon by RHA and Developer, shall serve as escrow instructions for the Close of Escrow. At Close of Escrow, Developer shall pay RHA’s legal fees and financial consultant fees incurred in connection with the transactions contemplated by this Agreement, including without limitation, the negotiation and preparation of this Agreement, the Ground Lease and RHA Documents, review of the Partnership Agreement and loan documents, and review of other documents required in connection with the lease of the Property, the financing of the Project, and the Close of Escrow.

3.6 Closing; Recorded Documents. The Closing Date shall be a date that is mutually acceptable to the Parties consistent with Section 5.1, and which shall occur within thirty (30) days following the Developer’s satisfaction or RHA’s waiver of all conditions precedent to the lease of the Property as set forth in Section 3.8 . Prior to the Close of Escrow, Developer shall deposit into escrow the Reciprocal Easement Agreement and the RHA Documents and HUD

4892-0329-9990 v6 13
Documents to which Developer is a party, executed and acknowledged as applicable, Developer’s share of closing costs and all other costs and expenses payable by Developer pursuant to this Agreement and the RHA Documents. Provided that all conditions precedent to Close of Escrow have been satisfied or waived, RHA shall deposit into escrow executed copies of the HUD Documents and the RHA Documents to which RHA is a party. On the Closing Date, the Escrow Agent shall cause the HUD Documents, the Memorandum of Lease, the Regulatory Agreement, the Reciprocal Easement Agreement, and a termination of the License Agreement to be recorded in the Official Records.

3.7 RHA’s Conditions to Closing. RHA’s obligations to lease the Property to Developer is conditioned upon the satisfaction of all of the terms and conditions set forth in this Section 3.7 prior to the Commencement Date, unless any such condition is waived in writing by RHA acting in the discretion of its Authorized Representative.

(a) No Default. There shall exist no condition, event or act which would constitute a breach or default by Developer under this Agreement or any other RHA Document, or which, upon the giving of notice or the passage of time, or both, would constitute such a breach or default.

(b) Representations. All representations and warranties of Developer contained herein or in any other RHA Document or certificate delivered in connection with the transactions contemplated by this Agreement shall be true and correct in all respects as of the Close of Escrow.

Developer shall have delivered to RHA copies of all of the following, including updated versions of any of the following that have been amended or modified since the date of any prior delivery of such documents to RHA: (i) Developer’s Partnership Agreement as proposed to be amended and restated upon admission of the Investor Limited Partner; (ii) an executed copy of the amended and restated Partnership Agreement in form approved by RHA; (iii) copies of Developer’s LP-1, LP-2, and good standing certificate, each certified by the Secretary of State; (iv) for each general partner and for the manager/sole member of each general partner (a) a good standing certificate and articles of incorporation/LLC-1, each certified by the Secretary of State, and (b) the entity’s bylaws/operating agreement, and resolutions authorizing Developer’s execution of and performance under this Agreement and the other RHA Documents, each certified by an officer or other authorized party as accurate, complete, and in full force and effect.
(d) Execution, Delivery and Recordation of Documents. Developer shall have executed, acknowledged as applicable, and delivered to RHA this Agreement, and all other documents required in connection with the transactions contemplated hereby, including without limitation an Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants substantially in the form attached hereto as Exhibit D (the “Regulatory Agreement”), the Ground Lease, and a Memorandum of Lease substantially in the form attached as an exhibit to the Ground Lease (“Memorandum of Lease”). Concurrently with the Close of Escrow, the Memorandum of Lease and the Regulatory Agreement shall be recorded in the Official Records against Developer’s leasehold interest in the Property.

4892-0329-9990 v6 14
(e) Reserved.

(f) Financing Plan. RHA shall have approved the final Financing Plan, including without limitation, the sources of construction and permanent financing, and the construction and operating budgets for the Project.

(g) Approval of Partnership Agreement and Financing Documents; Evidence of Availability of Funds. RHA shall have approved the Partnership Agreement as amended, and shall have approved the loan and grant documents for all financing sources for the Project. All sources of construction financing for the Project shall have closed or shall close concurrently with the closing for the lease of the Property, and Developer shall have provided evidence reasonably satisfactory to RHA that (i) all conditions to the release and expenditure of the initial draw of funds from each source described in the approved final Financing Plan as a source of construction financing for the Project have been met and that such funds will be available, and (ii) all construction financing (including draws subsequent to the initial draw of funds) will be available upon the satisfaction of the conditions set forth in the applicable documents. (h) Construction Contract, Plans, Budget and Schedule. RHA shall have approved the general contractor, the construction budget and schedule, and the construction contract for the Project, and RHA and City shall have approved the final Construction Plans and specifications for the Project. Developer shall have delivered an executed copy of the construction contract for the Project to RHA.

(i) Permits and Land Use Approvals. Developer shall have delivered evidence satisfactory to RHA that Developer has obtained all land use approvals and all permits (including without limitation building and off-site improvement permits) required to construct the Project, or that the receipt of such permits is subject only to such conditions as RHA may reasonably approve. A “permit ready” letter indicating that building permits for the Project shall be issued upon payment of applicable fees may serve as satisfactory evidence regarding issuance of the building permit. All applicable CEQA and NEPA review shall have been completed. (j) Payment of Fees. Developer shall have paid when due all fees and charges in connection with the processing of all applicable City permits and approvals. Building permit fees may be paid concurrently with Closing.
(k) Insurance; Payment and Performance Bonds. Developer shall have provided evidence satisfactory to RHA that Developer has obtained insurance coverage meeting the requirements set forth in Article X, and shall have provided to RHA copies of payment bonds and performance bonds in form approved by RHA pursuant to Section 5.18.

(l) Reserved.
(m) Other Documents. Developer’s delivery to RHA, and RHA approval of such other documents related to the development and financing of the Project as RHA may reasonably request.

4892-0329-9990 v6 15
(n) Settlement Statement. RHA shall have approved the final settlement statement for the Close of Escrow;
(o) Concurrent Closing; Commencement of Ground Lease. The term of the Ground Lease shall commence on the Closing Date upon recordation of the Memorandum of Lease. Closing for the Project construction financing shall close concurrently with the commencement of the term of the Ground Lease.

3.8 Developer’s Conditions to Closing. Developer’s obligation to proceed with the leasing of the Property is subject to the satisfaction or Developer’s waiver of the following conditions:

(a) No Default. RHA shall not be in default under the terms of this Agreement, and all representations and warranties of RHA contained herein shall be true and correct;

(b) Execution of Documents. RHA shall have executed and acknowledged the Memorandum of Lease, the Regulatory Agreement, and all other RHA Documents and HUD Documents to which RHA is a party, and shall have delivered such documents into escrow; and

(c) Owner’s Title Policy. The Title Company shall, upon payment of the premium therefor, be ready to issue an Owner's Title Insurance Policy for the benefit and protection of Developer showing a leasehold interest in the Property vested in Developer, subject only to Developer’s Permitted Exceptions and containing such endorsements as Developer may reasonably require, with the cost of such title policy to be paid by Developer.

(d) Permits and Land Use Approvals. Developer shall have obtained all land use approvals and all permits (or permit ready letters) required to construct the Project, or the receipt of such permits shall be subject only to such conditions as Developer may reasonably approve.
(e) Financing Plan. Developer shall have approved the final Financing Plan, including without limitation, the sources of construction and permanent financing, and the construction and operating budgets for the Project.

ARTICLE IV

GROUND LEASE RENT

4.1 Annual Residual Receipts Payments; Financial Reports and Operating Budgets.

Subject to the provisions of the Ground Lease, annual payments of Base Rent shall be due and payable based upon the appraised value of the Property determined as of the Commencement Date. Fifty percent (50%) of Project annual residual receipts shall be paid toward Base Rent during each year of the term of the Ground Lease; provided however, such percentage share may be reduced on a pro rata basis if other public agencies provide Project financing payable on a residual receipts basis. Any unpaid portion of Base Rent payable shall accrue and shall bear interest at the Applicable Federal Rate in effect as of the Commencement Date.

4892-0329-9990 v6 16
As set forth in the Ground Lease, Developer shall be obligated to provide for RHA review and approval, an annual operating budget for the Project, and shall be obligated to provide annual financial reports including an income and expense statement and report on the status of Project reserves.

4.2 Treatment of Certain Expenses for Calculation of Residual Receipts. As more particularly set forth in the Ground Lease, for the purpose of calculating residual receipts, the following expenses are subject to the following limitations: (i) the annual partnership management fee payable prior to the calculation of residual receipts shall be limited to Twenty- Five Thousand Dollars ($25,000), increasing at three percent (3%) per year, (ii) the cash portion of the developer fee shall be limited to Two Million, Five Hundred Thousand Dollars ($2,500,000) or such greater amount that CTCAC permits to be paid as an upfront developer fee paid from construction sources (“Cash Developer Fee”), (iii) any deferred portion of the developer fee shall not bear interest, and shall be payable only from Developer’s share of residual receipts unless definitive Project financial projections clearly demonstrate that an adjustment is necessary (e.g. to satisfy the “true debt” test for federal income tax purposes); provided however, any portion of the Cash Developer Fee that is not paid from construction financing sources may be paid prior to the calculation of residual receipts, (iv) the property management fee payable prior to the calculation of residual receipts shall be capped at $531 per unit per year increasing at the CPI for All Urban Consumers (“CPI-U”) for the San Francisco Area commencing in 2021, (v) the annual asset management fee payable to the Investor Limited Partner prior to the calculation of residual receipts shall be limited to Seven Thousand Five Hundred Dollars ($7,500), increasing at three percent (3%) per year, shall be payable only during the Fifteen Year Compliance Period, and any accrued but unpaid portion of the asset management fee shall be payable only from Developer’s share of residual receipts, (vi) replacement reserve deposits made prior to the calculation of residual receipts shall be limited to $500 per unit per year, and (vii) operating/debt service reserve deposits made prior to the calculation of residual receipts shall be limited to the amount necessary to replenish such reserve to the amount equal to three (3) months’ anticipated operating expenses and debt service.

As more particularly set forth in the Ground Lease, among others, the following expenses will be payable from Developer’s share of residual receipts: (i) any incentive management fee, (ii) any amount in excess of the permitted partnership management fee, asset management fee, or property management fee, including any unpaid and accrued portion of such fees, (iii) deferred developer fees and interest on any deferred developer fee (except as otherwise payable pursuant to clause (iii) of Section 4.2 above), (iv) contributions to reserve accounts in excess of the amounts specified in the Ground Lease, (v) expenses paid with withdrawals from reserve accounts, (vi) distributions to partners, (vii) debt service or repayment of sponsor or general partner construction loans, and (viii) depreciation, amortization, depletion, and other non-cash expenses.

In the event of any inconsistency between the Partnership Agreement and the Ground Lease with respect to the payment of Base Rent, including without limitation, provisions pertaining to regarding the calculation of residual receipts or distribution of Project net cash flow, the Ground Lease shall control.

4892-0329-9990 v6 17

4.3 Reserved.

4.4 Reserved.

4.5 Refinancing/Resyndication. As more particularly set forth in the Ground Lease, fifty percent (50%) of Net Proceeds of Project refinancing or resyndication shall be used to make a payment toward any accrued and unpaid Base Rent in accordance with this paragraph and any additional provisions set forth in the Ground Lease. For purposes of this paragraph “Net Proceeds” means all proceeds of refinancing or resyndication less: (a) the amount used to repay the refinanced debt, (b) the reasonable out-of-pocket expenses Developer is required to pay to third parties in connection with the refinancing or resyndication, (c) the reasonable costs paid by Developer to rehabilitate, construct and install capital improvements to the Project as approved by RHA’s advance written consent (including without limitation reasonable architects’ and engineers’ fees incurred in connection with such capital improvements), (d) any reasonable increase in Project reserves that Developer is required to fund as a condition to such refinancing or resyndication, provided that Developer actually funds such reserves and such reserves are held for Developer’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 Developer provided 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) payment for such other purposes as RHA may approve in writing in the exercise of RHA’s sole discretion. If other public agency lenders require payment of Net Proceeds, then Net Proceeds shall be allocated among RHA and such lenders pro rata in proportion to each lender’s financial contribution to the Project.

ARTICLE V

DEVELOPMENT AND USE OF THE PROPERTY

5.1 Development Schedule. Construction of the Project shall commence within thirty (30) days following Closing, and subject to Force Majeure and any extension permitted pursuant to this Section or Section 11.2: (i) the Closing shall occur by not later than the fourth (4th) anniversary of the Effective Date, and (ii) Developer shall diligently prosecute to completion the construction of the Project to enable the City to issue final certificates of occupancy for all residential units and all non-residential components of the Project within twenty-eight (28) months following commencement of construction. Notwithstanding the foregoing, nothing in this Agreement is intended to extend the term of validity of Project entitlements beyond the maximum term specified in applicable California statutes. Developer shall use diligent and commercially reasonable efforts to perform Developer’s obligations under this Agreement within the times periods set forth herein, and if no such time is provided, within a reasonable time, designed to permit issuance of final certificates of occupancy for all residential units in the Project by the date specified in this Section 5.1. Subject to Force Majeure, the City’s issuance of permits and approvals, and any extension permitted pursuant to this Section or Section 11.2, Developer’s failure to commence or complete construction of the Project in accordance with the time periods specified in this Section 5.1 shall be an Event of Developer Default hereunder. Two one-year extensions of the deadline for commencement of construction

4892-0329-9990 v6 18
of the Project set forth in this Section may be granted by RHA’s Authorized representative if Developer has met all performance milestones set forth in Exhibit B, but despite Developer’s good faith and diligent efforts, Developer has been unable to secure adequate financing for development of the Project. Any extension of the deadline for commencement of construction to a date later than the sixth (6th) anniversary of the Effective Date, including any extension requested due to Force Majeure delay, shall require approval of the RHA governing board.

5.2 Cost of Leasing and Construction. Except as expressly set forth herein, Developer shall be solely responsible for all direct and indirect costs and expenses incurred in connection with the leasing of the Property, including without limitation appraisal fees, title reports and any environmental assessments Developer elects to undertake. Except as expressly set forth herein, all costs of designing, developing and constructing the Project and compliance with the Conditions of Approval, including without limitation all off-site and on-site improvements required by the City in connection therewith, shall be borne solely by Developer.

5.3 Permits and Approvals; Payment of Fees; Cooperation. Developer acknowledges that the execution of this Agreement by RHA does not constitute City approval for the purpose of the issuance of building permits, does not limit in any manner the discretion of the City in such approval process, and does not relieve Developer from the obligation to apply for and to obtain from the City and all other agencies with jurisdiction over the Property, all necessary approvals, entitlements, and permits for the construction of the Project (including without limitation the approval of architectural plans, the issuance of any certificates regarding historic resources required in connection with the development of the Property (if any), and the approval of the Project in compliance with CEQA if applicable, and if applicable, NEPA, nor does it limit in any manner the discretion of the City or any other agency in the approval process. Prior to the Close of Escrow, Developer shall have obtained all entitlements, permits, licenses and approvals required for the construction of the Project, including without limitation, fire department permits, building permits, and use permits or shall provide evidence satisfactory to RHA that receipt of such permits and approvals is subject only to such conditions as RHA may reasonably approve.

Developer shall pay when due all customary and usual fees and charges in connection with the processing of all applicable permits and approvals. Developer shall not commence construction work on the Project prior to issuance of building permits required for such work. RHA staff shall work cooperatively with Developer to assist in coordinating the expeditious processing and consideration of all permits, entitlements and approvals necessary for the development and operation of the Project as contemplated by this Agreement.

5.4 Conditions of Approval. Developer shall develop the Property and all off-site improvements necessary to develop and operate the Project in accordance with the terms and conditions of this Agreement and the Ground Lease, and in compliance with the terms and conditions of all approvals, entitlements and permits that the City or any other governmental body or agency with jurisdiction over the Project or the Property has granted or issued as of the date hereof or may hereafter grant or issue in connection with development of the Project, including without limitation, all mitigation measures imposed in connection with environmental review of the Project and all conditions of approval imposed in connection with any entitlements, approvals or permits (all of the foregoing approvals, entitlements, permits, mitigation measures and conditions of approval are hereafter collectively referred to as the “Conditions of Approval”).

4892-0329-9990 v6 19

5.5 Fees. Developer shall be solely responsible for, and shall promptly pay when due, all customary and usual fees and charges of the City and all other agencies with jurisdiction over development of the Property in connection with obtaining fire department permits, building permits, off-site improvement permits, and other approvals for the Project, including without limitation, those related to the processing and consideration of amendments, if any, to the current entitlements, any related approvals and permits, environmental review, architectural review, historic review, and any subsequent approvals for the Project.

5.6 Construction Plans. In accordance with the timeframe set forth in Exhibit B, Developer shall submit to the City Building Department a complete Building Permit Application, including detailed construction plans for the Project (the “Construction Plans”). As used herein “Construction Plans” means all construction documents upon which Developer and Developer’s contractors shall rely in constructing the Project (including but not limited to, the landscaping, parking, and common areas) and shall include, without limitation, the on-site development plan, the construction management plan, final architectural drawings, landscaping, exterior lighting and signage plans and specifications, materials specifications, final elevations, building plans and specifications, plans for all off-site improvements necessary to develop and operate the Project as required by the Conditions of Approval, including, without limitation, utilities, curbs, gutters, sidewalks, and driveways along the Project frontages, and all items City requires to be submitted in connection with applications for building permits. The Construction Plans shall be based upon the scope of development and development standards set forth herein and upon the approvals issued by the City for the Project, and shall not materially deviate therefrom without the express written consent of RHA and the City.

5.7 Construction Pursuant to Plans. Developer shall develop each component of the Project in accordance with the approved Construction Plans, the Conditions of Approval, and all other permits and approvals granted by the City pertaining to the Project. Developer shall comply with all directions, rules and regulations of any fire marshal, health officer, Public Works Department, Building Division, and fire inspector or other officer of every governmental agency having jurisdiction over the Property or the Project. Each element of the work shall proceed only after procurement of each permit, license or other authorization that may be required for such element by any governmental agency having jurisdiction. All design and construction work on the Project shall be performed by licensed contractors, engineers or architects, as applicable.

5.8 Change in Construction Plans; Review and Approval of Change Orders. RHA shall have the right to approve changes to the Construction Plans that (i) would change the value or quality of the building materials or equipment, or the architecture, design, function, use, or amenities of the Project as shown on the latest approved Construction Plans, or (ii) where the individual change exceeds One Hundred Thousand Dollars ($100,000) in cost, or on a cumulative basis, changes in the Construction Plans will exceed in the aggregate, Two Hundred Fifty Thousand Dollars ($250,000) in cost. If RHA has not approved or disapproved a requested change within ten (10) business days after Developer’s written request, such change shall be deemed to have been approved by RHA.

RHA will not unreasonably withhold approval of a requested change if the Construction Plans, as modified by the proposed change: (i) meet all applicable federal, California, and local

4892-0329-9990 v6 20
codes and regulations, (ii) conform to the requirements of this Agreement and any approvals issued by RHA or the City after the Effective Date, and (iii) do not substantially nor materially and adversely change the building materials or equipment, the architecture, design, function, use, or amenities of the Project, or the structural or architectural design or appearance of the Project as shown on the latest approved Construction Plans.

Nothing in this Section 5.8 is intended to or shall be deemed to modify Developer’s obligation to submit proposed changes in the approved Construction Plans to City departments, including but not limited to the Community Development Department, Public Works Department, Building Department and Fire Department, as applicable, as may be required by City’s standard plan review procedures for proposed development. Changes that require review for code or permit conformance will be reviewed by the relevant City departments in accordance with their standard procedures, and nothing in this Section is intended to or shall be deemed to modify or limit City’s discretion under City’s standard plan review procedures.

5.9 Rights of Access. For the purpose of ensuring that the construction of the Project is completed in compliance with this Agreement, Developer shall permit representatives of RHA and the City to enter upon the Property during normal business hours following at least 48 hours’ prior written notice (except in the case of emergency in which case such notice as may be practical under the circumstances shall be provided).

5.10 RHA Disclaimer. Developer acknowledges that neither RHA nor the City are under any obligation, and neither RHA nor City undertakes or assumes any responsibility or duty to Developer or to any third party, to in any manner review, supervise, or inspect the progress of construction or the operation of the Project. Developer and all third parties shall rely entirely upon its or their own supervision and inspection in determining the quality and suitability of the materials and work, the performance of architects, subcontractors, and material suppliers, and all other matters relating to the construction and operation of the Project. Any review or inspection undertaken by RHA or City is solely for the purpose of determining whether Developer is properly discharging its obligations under this Agreement, and shall not be relied upon by Developer or any third party as a warranty or representation by RHA or City as to the quality of the design or construction of the Project or otherwise.

5.11 Defects in Plans. Neither RHA nor City shall be responsible to Developer or to any third party for any defect in the Construction Plans or for any structural or other defect in any work done pursuant to the Construction Plans. To the greatest extent allowed by law, Developer shall indemnify, defend (with counsel approved by RHA) and hold harmless RHA and the City and their respective elected and appointed officers, officials, employees, agents, consultants, and contractors (all of the foregoing, collectively, the “Indemnitees”) from and against all liability, loss, cost, expense (including without limitation attorneys’ fees and costs of litigation), claim, demand, action, suit, judicial or administrative proceeding, penalty, deficiency, fine, order, and damage (all of the foregoing collectively “Claims”) arising out of, or relating to, or alleged to arise from or relate to defects in the Construction Plans or defects in any work done on the Project pursuant to the Construction Plans or otherwise. Developer’s indemnification obligation set forth in this Section shall survive the expiration or earlier termination of this Agreement and the recordation of a Certificate of Completion, and is subject to the provisions of Section 10.2 below. Developer’s indemnification obligation pursuant to this Section shall not

4892-0329-9990 v6 21
extend to Claims to the extent arising from the gross negligence or willful misconduct of the Indemnitees.

5.12 Certificate of Completion for Project. Promptly after completion of construction of the Project, City’s issuance of a final certificate of occupancy or equivalent for all residential units in the Project and all other Improvements, and the written request of Developer, RHA will provide a certificate substantially in the form attached hereto as Exhibit C (“Certificate of Completion”), provided that at the time such certificate is requested all applicable work has been completed for the Project. The Certificate of Completion shall be conclusive evidence that Developer has satisfied its obligations regarding the construction of the Project. At Developer’s option the Certificate of Completion shall be recorded in the Official Records. The Certificate of Completion shall not constitute evidence of compliance with or satisfaction of any obligation of Developer to any holder of a deed of trust or mortgage securing money loaned to finance the Project or any part thereof and shall not be deemed a notice of completion under the California Civil Code, nor shall such Certificate provide evidence that Developer has satisfied any obligation that survives the expiration of this Agreement.

5.13 Equal Opportunity; Section 3; First Source Hiring.

5.13.1 Nondiscrimination. There shall be no discrimination on the basis of race, color, religion, creed, sex, sexual orientation, marital status, ancestry or national origin in the hiring, firing, promoting or demoting of any person engaged in construction work on the Property, and Developer shall direct its contractors and subcontractors to refrain from discrimination on such basis.

5.13.2 Section 3. To the extent applicable, Developer shall comply with Section 3 of the Housing and Urban Development Act of 1968 (12 U.S.C. 1701u) (“Section 3”) and implementing regulations at 24 CFR Part 135. The responsibilities outlined in 24 CFR Subpart B, § 135.32 include: (i) implementing procedures designed to notify Section 3 residents about training and employment opportunities generated by Section 3 covered assistance and Section 3 business concerns about contracting opportunities generated by Section 3 covered assistance, (ii) notifying potential contractors for Section 3 covered projects of the requirements of Section 3 and incorporating the Section 3 clause set forth in 24 CFR Section 135.38 in all solicitations and contracts in excess of $100,000, (iii) facilitating the training and employment of Section 3 residents and the award of contracts to Section 3 business concerns by undertaking activities to reach the goals set forth in 24 CFR Section 135.30, (iv) assisting and actively cooperating with RHA and HUD in obtaining the compliance of contractors and subcontractors with the requirements of Section 3, and refraining from entering into any contract with any contractor where the recipient has notice or knowledge that the contractor has been found in violation of the regulations in 24 CFR Part 135, and (v) documenting actions taken to comply with the requirements of Section 3, the results of those actions taken and impediments, if any.

5.13.3 First Source Hiring. The Improvements shall be subject to compliance with the Richmond Municipal Code (“RMC”) including without limitation, the local business and local hire requirements set forth therein, including the City’s Business Opportunity Ordinance (RMC, Chapter 2.50) and Local Employment Program Ordinance (RMC, Chapter

2.56) (the “Local Business and Local Hire Requirements”). Pursuant to RMC Chapter 2.56,

4892-0329-9990 v6 22
and prior to the Commencement Date, Developer shall also enter into a First Source Hiring Agreement with the City in form approved by City. Developer shall provide RHA with written acknowledgement by its general contractor of the requirements of RMC Section 2.56.030(c), which code section shall be reproduced in full within the written acknowledgement. The written acknowledgement shall also include an express commitment by the general contractor to use its best efforts to see that all of its subcontractors comply with all Local Business and Local Hire Requirements.

5.14 Prevailing Wage Requirements. Developer shall comply and shall cause its contractors, subcontractors and agents to comply with California Labor Code Section 1720 et seq. and the regulations adopted pursuant thereto, the federal Davis Bacon Act and implementing regulations (if applicable), and the City’s Living Wage Ordinance (Richmond Municipal Code

2.60) (“RMC Chapter 2.60”) (all of the foregoing, collectively, “Prevailing Wage Laws”), including without limitation, the requirement to pay prevailing wages and living wages, as applicable, in the development of the Project as those wages are determined pursuant to Prevailing Wage Laws and RMC Chapter 2.60, and shall be responsible for carrying out the requirements of such provisions. Developer shall submit to RHA a plan for monitoring payment of prevailing wages and at Developer’s expense shall implement such plan and comply with all applicable reporting and recordkeeping requirements. In addition, if applicable, Developer shall comply with all applicable requirements set forth in California Government Code Section 65913.4(a)(8).

Without limiting the generality of the preceding paragraph, to the extent required by applicable law Developer shall:
(i) pay, and shall cause all contractors and subcontractors to pay, prevailing wages in the construction of the Improvements as those wages are determined pursuant to California Labor Code Section 1720 et seq. and RMC Chapter 2.60; (ii) cause all contractors and subcontractors to employ apprentices as required by California Labor Code Section 1777.5 et seq., and the implementing regulations of the Department of Industrial Relations (“DIR”), and to comply with the other applicable provisions of Prevailing Wage Laws;
(iii) keep and retain, and shall cause all contractors and subcontractors to keep and retain, such records as are necessary to determine if such prevailing wages have been paid as required pursuant to California Labor Code Section 1720 et seq. and RMC Chapter 2.60, and apprentices have been employed as required by California Labor Code Section 1777.5 et seq.;
(iv) post at the Property, or cause the contractor to post at the Property, the applicable prevailing rates of per diem wages. Copies of the currently applicable current per diem prevailing wages are available from DIR;
(v) cause contractors and subcontractors constructing the Improvements to be registered as set forth in California Labor Code Section 1725.5;

4892-0329-9990 v6 23
(vi) cause its contractors and subcontractors, in all calls for bids, bidding materials and the construction contract documents for the construction of the Improvements to specify that:
(a) no contractor or subcontractor may be listed on a bid proposal nor be awarded a contract for the construction of the Improvements unless registered with the DIR pursuant to California Labor Code Section 1725.5; and (b) the construction of the Improvements is subject to compliance monitoring and enforcement by the DIR.
(vii) provide RHA all information required by California Labor Code Section 1773.3 as set forth in the DIR's online form PWC-100 within 2 days of the award of any contract (https://www.dir.ca.gov/pwc100ext/);
(viii) cause its contractors to post job site notices, as prescribed by regulation by the DIR; and
(ix) cause its contractors to furnish payroll records required by California Labor Code Section 1776 directly to the Labor Commissioner, at least monthly in the electronic format prescribed by the Labor Commissioner.

To the greatest extent allowed by law, Developer shall indemnify, defend (with counsel approved by RHA) and hold harmless the Indemnitees from and against all Claims arising directly or indirectly, in whole or in part, from the failure or alleged failure by Developer, or any other person, including without limitation, Developer’s contractor and subcontractors to comply with all applicable provisions of Prevailing Wage Laws in connection with construction of the Project, including without limitation, all Claims that may be made by contractors, subcontractors or other third party claimants pursuant to Labor Code Sections 1726 and 1781, all Claims relating to any failure to pay prevailing wages, employ apprentices, or comply with all applicable State or federal labor laws, regulations or standards in connection with this Agreement, including but not limited to the Prevailing Wage Laws. The provisions of this Section 5.14 shall survive the expiration or earlier termination of this Agreement and the issuance of a Certificate of Completion for the Project and are subject to the provisions of Section 10.2 below. Developer’s indemnification obligations set forth in this Section shall not apply to Claims to the extent arising from the gross negligence or willful misconduct of the Indemnitees.

5.15 Compliance with Laws; Indemnity. Developer shall carry out and shall cause its contractors and subcontractors to carry out the construction of the Project in conformity with all applicable federal, state and local laws, rules, ordinances and regulations (“Applicable Laws”), including without limitation, all applicable Environmental Laws, all applicable federal and state labor laws and standards, Section 3 of the Housing and Community Development Act of 1974, as amended (if applicable pursuant to financing sources used for the Project), applicable provisions of the California Public Contracts Code, City’s zoning and development standards, building, plumbing, mechanical and electrical codes, all other provisions of the Richmond Municipal Code, and all applicable disabled and handicapped access requirements, including without limitation, the Americans with Disabilities Act, 42 U.S.C. Section 12101, et seq.;

4892-0329-9990 v6 24
Government Code Section 4450, et seq.; Government Code Section 11135, et seq.; the Unruh Civil Rights Act, Civil Code Section 51, et seq.; the California Fair Employment and Housing Act; Section 504 of the Rehabilitation Act of 1973; the United States Fair Housing Act, as amended; and Chapters 11A and 11B of Title 24 of the California Code of Regulations relating to accessibility.

To the greatest extent allowed by law, Developer shall indemnify, defend (with counsel approved by RHA) and hold harmless the Indemnitees from and against any and all Claims arising in connection with the breach of Developer’s obligations set forth in this Section.

Developer’s indemnification obligations set forth in this Section shall not apply to Claims to the extent arising from the gross negligence or willful misconduct of the Indemnitees. Developer’s defense and indemnification obligations set forth in this Section 5.15 shall survive the expiration or earlier termination of this Agreement and the issuance of a Certificate of Completion for the Project, and are subject to the provisions of Section 10.2 below.

5.16 Liens and Stop Notices. Until the expiration of the term of the Ground Lease and any extension thereof, Developer shall not allow to be placed on the Property, the Project, or any part thereof any lien or stop notice on account of materials supplied to or labor performed on behalf of Developer. If a claim of a lien or stop notice is given or recorded affecting the Project or the Property or any part thereof, Developer shall within twenty (20) days of such recording or service: (a) pay and discharge (or cause to be paid and discharged) the same; or (b) effect the release thereof by recording and delivering (or causing to be recorded and delivered) to the party entitled thereto a surety bond in sufficient form and amount; or (c) provide other assurance satisfactory to RHA that the claim of lien or stop notice will be paid or discharged.

5.17 Right of RHA to Satisfy Liens on the Property. If Developer fails to satisfy or discharge any lien or stop notice on the Property or any part thereof pursuant to and within the time period set forth in Section 5.16 above, RHA shall have the right, but not the obligation, to satisfy any such liens or stop notices at Developer’s expense and without further notice to Developer, and all sums advanced by RHA for such purpose shall be considered indebtedness payable by Developer to RHA. In such event Developer shall be liable for and shall immediately reimburse RHA for such paid lien or stop notice. Alternatively, RHA may require Developer to immediately deposit with RHA the amount necessary to satisfy such lien or claim pending resolution thereof. RHA may use such deposit to satisfy any claim or lien that is adversely determined against Developer. Developer shall file a valid notice of cessation or notice of completion upon cessation of construction work on the Property for a continuous period of thirty (30) days or more, and shall take all other reasonable steps to forestall the assertion of claims or liens against the Property. RHA may (but has no obligation to) record any notices of completion or cessation of labor, or any other notice that RHA deems necessary or desirable to protect its interest in the Property.

5.18 Performance and Payment Bonds. Prior to Closing, Developer shall cause its general contractor to deliver to RHA copies of payment bond(s) and performance bond(s) issued by a reputable insurance company licensed to do business in California, each in a penal sum of not less than one hundred percent (100%) of the scheduled cost of construction of the Project.

RHA may require separate payment and performance bonds to ensure completion of any public

4892-0329-9990 v6 25
improvements required pursuant to the Conditions of Approval. All bonds shall name RHA as co-obligee.

5.19 Insurance Requirements. Developer shall maintain and shall cause its contractors to maintain all applicable insurance coverage specified in Article X.

5.20 Quarterly Performance Reporting. During construction of the Project, Developer shall submit to RHA a Quarterly Performance Report within 30 days following the end of each calendar quarter. The report shall be in the form of a narrative description of all activities performed in relation to the Project including all development activities. The report shall include a Project timeline, including a schedule for completing milestones and/or tasks, and indicate the status of the Project in relation to this timeline. Developer shall provide the quarterly reports described in this Section until construction of the Project is complete, even if all of the Loan Proceeds have been disbursed.

5.21 Project Completion Reporting. Within sixty (60) days following completion of construction of the Project, Developer shall provide to RHA a Project Financial Completion audit or similar audit required under tax credit requirements, performed by an independent certified public accountant, that identifies all sources and uses of all Project funds. Developer shall provide to RHA a copy of any Project Cost Audit concurrently with Developer’s provision of such audits to other regulatory or financing agencies. By not later than ninety (90) days after the Project placed-in-service date, Developer shall provide to RHA an audited financial report showing the sources and uses of all funds utilized for development of the Project. Developer may satisfy this requirement may be satisfied by providing RHA with a copy of the Final Cost Certification Sources and Uses of Funds that Developer submits to CTCAC and prepared in accordance with generally accepted accounting principles.

5.22 Affordable Housing.

5.22.1 Rent and Occupancy Restrictions. The Property will be restricted for development and operation of an affordable rental residential development with ancillary uses consistent with the Project scope approved by RHA, and in accordance with RHA Documents. Throughout the term of the Ground Lease, all of the residential units in the Project (except the manager’s unit) shall be occupied or available for occupancy at Affordable Rent by households whose household Gross Income is not greater than sixty percent (60%) of Area Median Income. In addition, all of the following conditions shall apply: (A) RHA, City and Developer will make best good faith efforts (including without limitation, seeking funds from the City, the County, other public agencies, and private sources) to secure rent subsidies and social services funding sufficient to enable Developer to set aside of eight (8) residential units for formerly unhoused residents with the tenant-paid portion of the rent payable for such units not greater than 30% of the tenant’s monthly household Gross Income; and (B) if applicable, to satisfy the requirements applicable to State Density Bonus Law and SB 35 (including, without limitation, Government Code Sections 65915(c)(1)(A) and 65913.4(k)) the following shall apply:

(i) For a total of not less than ____________ (___) of the Restricted Units, Affordable Rent shall be determined in accordance with Health and Safety Code

4892-0329-9990 v6 26
Section 50053, and maximum household Gross Income shall be determined in accordance with Health and Safety Code Sections 50093, 50105, and 50196, as applicable; and

(ii) For the remaining _____________ (___) Restricted Units, Affordable Rent and maximum household Gross Income shall be determined using applicable CTCAC rules and regulations.

“Area Median Income” means the following: (i) in accordance with the rules and regulations applicable to State Density Bonus Law and SB 35, for _______ (__) of the Restricted Units, the median income for Contra Costa 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 HCD in Section 6932 of Title 25 of the California Code of Regulations or successor provision, and (ii) for the remainder of the Restricted Units, the median income for Contra Costa County, California, adjusted for actual household size, as determined by CTCAC regulations.

Developer shall comply with the rent and occupancy restrictions imposed by all applicable financing sources and regulatory agencies. If such agencies impose requirements on the Project that are more stringent than those set forth in this Agreement and the other RHA Documents, the more restrictive requirements shall prevail during such time that they are effective.

5.23 Management, Marketing; Local Preference Policy. As more particularly set forth in the Ground Lease and the Regulatory Agreement, by not later than sixty (60) days prior to Closing, Developer shall deliver to RHA for RHA’s review and approval (i) a proposed property management plan, a (ii) proposed property management agreement, (iii) a proposed social services plan, (iv) a proposed social services agreement, (v) the proposed form of residential lease, and (vi) a proposed marketing plan. The marketing plan shall include Developer’s plan for affirmatively furthering fair housing in the marketing and operation of the Project.

Developer has proposed that EAH will serve as property manager, and that EAH or another qualified provider will be the social services provider.

5.24 Monitoring Fee. As more particularly set forth in the Ground Lease and the Regulatory Agreement, Developer shall be obligated to pay to RHA an annual Affordable Housing Monitoring Fee in the amount of Fifteen Thousand Dollars ($15,000). Following completion of construction of the Project, the Affordable Housing Monitoring Fee shall be payable annually on each April 30 during the term of the Ground Lease. The annual Affordable Housing Monitoring Fee will increase annually by three percent (3%).

5.25 Reserved.

5.26 Maintenance. Commencing upon the Closing Date, Developer shall at its own expense, maintain the Property and the Improvements, including the landscaping and common areas, in good physical condition, in good repair, and in decent, safe, sanitary, habitable and tenantable living conditions in conformity with all Applicable Laws. Without limiting the foregoing, Developer agrees to maintain the Property and the Improvements (including without

4892-0329-9990 v6 27
limitation, 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. Developer shall prevent and/or rectify any physical deterioration of the Improvements and shall make all repairs, renewals and replacements necessary to keep the Property and the Improvements in good condition and repair.

5.27 Taxes and Assessments. Commencing upon the Closing Date, Developer shall pay all real and personal property taxes, possessory interest taxes, assessments and charges and all franchise, income, payroll, withholding, sales, and other taxes assessed against the Property and/or the Improvements, at such times and in such manner as to prevent any penalty from accruing, or any lien or charge from attaching to the Property or Improvements; provided, however, Developer shall have the right to contest in good faith, any such taxes, assessments, or charges. In the event the Developer exercises its right to contest any tax, assessment, or charge, the Developer, on final determination of the proceeding or contest, shall immediately pay or discharge any decision or judgment rendered against it, together with all costs, charges and interest.

5.28 Obligation to Refrain from Discrimination. Developer shall not restrict the rental, sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property or the Improvements, or any portion thereof, on the basis of race, color, religion, creed, sex, sexual orientation, disability, marital status, ancestry, national origin, or immigration status of any person. Developer covenants for itself and all persons claiming under or through it, and this Agreement is made and accepted upon and subject to the condition that there shall be no discrimination against or segregation of any person or group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property or the Improvements, or part thereof, nor shall Developer or any person claiming under or through Developer establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in, of, or for the Property or Improvements, or part thereof. Developer shall include such provision in all deeds, leases, contracts and other instruments executed by or on behalf of Developer, and shall enforce the same diligently and in good faith.

ARTICLE VI

CONDITION OF THE SITE; ENVIRONMENTAL MATTERS

6.1 Access to Site; Inspections. Prior to the Close of Escrow, Developer and Developer’s authorized representatives may enter upon and conduct reviews and assessments of the physical and environmental condition of the Property and the condition of any existing improvements. RHA may require Developer to execute a right of entry agreement satisfactory to RHA prior to entry onto the Property for such purpose and shall require Developer to provide proof of liability insurance acceptable to RHA. Developer’s inspection, examination, survey and review of the Property shall be at Developer's sole expense. Developer shall provide RHA,

4892-0329-9990 v6 28
without representation or warranty, copies of all reports and test results promptly following completion of such reports and testing. Developer hereby agrees to notify RHA twenty-four (24) hours in advance of its intention to enter the Property and will provide workplans, drawings, and descriptions of any intrusive sampling it intends to do. Developer must keep the Property in a safe condition during its entry. Developer shall repair, restore and return the Property to its condition immediately preceding Developer’s entry thereon at Developer’s sole expense Developer will not permit any mechanics liens, stop notices, or other liens or encumbrances to be placed against the Property prior to Close of Escrow. Without limiting any other indemnity provisions set forth in this Agreement, to the greatest extent permitted by law, Developer shall indemnify, defend (with counsel approved by RHA) and hold the Indemnitees harmless from and against all Claims resulting from or arising in connection with entry upon the Property by any Developer Parties pursuant to this Section 6.1 except to the extent arising from the gross negligence or willful misconduct of the Indemnitees. Developer’s indemnification obligations set forth in this Section 6.1 shall not apply to Claims relating to the diminution in value of the Property solely resulting from Developer’s mere discovery of Hazardous Materials or other conditions of the Property that existed prior to Developer’s entry onto the Property, provided that no such condition is exacerbated due to the activities of any Developer Parties. Developer’s indemnification obligations set forth in this Section 6.1 shall survive the Close of Escrow and the termination of this Agreement and shall be subject to the provisions of Section 10.2.

6.2 Environmental Disclosure. To the extent RHA has copies of investigation reports concerning the Property, it will provide copies to Developer upon request; but the Parties acknowledge that RHA will not be conducting a public records search of any regulatory agency files—although RHA urges Developer to do so to satisfy itself regarding the environmental condition of the Property. By execution of this Agreement, Developer: (i) acknowledges its receipt of the foregoing notice respecting the environmental condition of the Property; (ii) acknowledges that it will have an opportunity to conduct its own independent review and investigation of the Property prior to the Close of Escrow; (iii) agrees to rely solely on its own experts in assessing the environmental condition of the Property and its sufficiency for its intended use; and (iv) waives any and all rights Developer may have to assert that RHA failed to disclose information about the environmental condition of the Property. This Section is intended as a written request for information and response concerning the environmental condition of the Property as required by California Code of Civil Procedure Section 726.5(d)(2).

6.3 Property Leased “AS IS”. Developer specifically acknowledges that RHA will lease the Property to Developer on an "AS IS”, “WHERE IS” and “WITH ALL FAULTS" basis and that Developer is not relying on any representations or warranties of any kind whatsoever, express or implied, from RHA, its employees, board members, agents, or brokers as to any matters concerning the Property. RHA makes no representations or warranties as to any matters concerning the Property, including without limitation: (i) the quality, nature, adequacy and physical condition of the Property, including, but not limited to, the 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 Property, (iv) the development potential of the Property, and the Property's use, habitability, merchantability, or fitness, suitability, value or adequacy of the Property for any particular purpose, (v) the zoning or other legal status of the property or any

4892-0329-9990 v6 29
other public or private restrictions on use of the Property, (vi) the compliance of the Property 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 Property or the adjoining or neighboring property; (viii) the condition of title to the Property, or (x) the service contracts, or other agreements affecting the Property.

6.4 Developer to Rely on Own Experts. Developer understands that notwithstanding the delivery by RHA to Developer of any materials, including, without limitation, third party reports, Developer will rely entirely on Developer’s own experts and consultants and its own independent investigation in proceeding with the leasing of the Property.

6.5 Release by Developer. Developer hereby WAIVES, RELEASES, REMISES, ACQUITS AND FOREVER DISCHARGES the Indemnitees and any person acting on behalf of RHA, from any and all Claims, direct or indirect, known or unknown, foreseen or unforeseen, which Developer now has or which may arise in the future on account of or in any way arising out of or in connection with the physical condition of the Property, the presence of Hazardous Material in, on, under or about the Property, or any law or regulation applicable thereto including, without limiting the generality of the foregoing, all Environmental Laws.

DEVELOPER ACKNOWLEDGES THAT DEVELOPER IS FAMILIAR WITH SECTION 1542 OF THE CALIFORNIA CIVIL CODE, WHICH PROVIDES AS FOLLOWS:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS

WHICH 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 DEBTOR
OR RELEASED PARTY.

BY INITIALING BELOW, DEVELOPER EXPRESSLY WAIVES THE BENEFITS OF SECTION 1542 OF THE CALIFORNIA CIVIL CODE WITH RESPECT TO THE FOREGOING RELEASE.

Developer’s initials: _____________

4892-0329-9990 v6 30

6.6 Developer’s Post-Closing Obligations. Developer hereby covenants and agrees that:

(1) Developer shall not permit the Property or the Project or any portion thereof to be a site for the use, generation, treatment, manufacture, storage, disposal or transportation of Hazardous Material nor shall Developer otherwise permit the presence or release of Hazardous Material in, on, under, about or from the Property with the exception of limited amounts of cleaning supplies and other materials customarily used in construction, use or maintenance of residential properties similar in nature to the Project, and used, stored and disposed of in compliance with Environmental Laws. (2) From and after the Closing Date, Developer shall keep and maintain the Property and the Project in compliance with, and shall not cause or permit the Project or the Property or any portion of either to be in violation of, any Environmental Laws. (3) Developer shall immediately advise RHA in writing of: (i) any and all enforcement, cleanup, removal or other governmental or regulatory actions instituted, completed or threatened against Developer or the Property pursuant to any applicable Environmental Laws; (ii) any and all claims made or threatened by any third party against the Developer or the Property relating to damage, contribution, cost recovery, compensation, loss or injury resulting from any Hazardous Material; (iii) the presence or release of any Hazardous Material in, on, under, about or from the Property; or (iv) Developer’s discovery of any occurrence or condition on any real property adjoining or in the vicinity of the Project that may in any way affect the Property pursuant to any Environmental Laws. The matters set forth in the foregoing clauses (i) through (iv) are hereinafter referred to as "Hazardous Materials Claims"). RHA shall have 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 Claim.

(4) Without RHA’s prior written consent, which shall not be unreasonably withheld or delayed, Developer shall not take any remedial action in response to the presence of any Hazardous Material in, on, under, or about the Property (other than in emergency situations or as required by governmental agencies having jurisdiction in which case RHA agrees to provide its consent), nor enter into any settlement agreement, consent decree, or other compromise in respect to any Hazardous Materials Claim. RHA shall have 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 and to have its reasonable attorneys’ fees in connection therewith paid by Developer.

6.7 Environmental Indemnity. To the greatest extent allowed by law, Developer shall indemnify, defend (with counsel approved by RHA) and hold Indemnitees harmless from and against all Claims, including without limitation, Hazardous Materials Claims resulting, arising, or based directly or indirectly in whole or in part, upon (i) the presence, release, use, generation, discharge, storage or disposal of any Hazardous Material on, under, in or about the Property, or the transportation of any such Hazardous Material to or from, the Property, or (ii) the failure of Developer Parties to comply with Environmental Laws, except to the extent caused by RHA’s gross negligence or willful misconduct. The foregoing indemnity shall further apply to any

4892-0329-9990 v6 31
residual contamination in, on, under or about the Property or affecting any natural resources, and to any contamination of any property or natural resources arising in connection with the generation, use, handling, treatment, storage, transport or disposal of any such Hazardous Material, and irrespective of whether any of such activities were or will be undertaken in accordance with Environmental Laws. Developer’s indemnity obligations set forth in this Section 6.7 shall not apply to Claims solely relating to the presence of Hazardous Materials in, on, or under the Property prior to the Closing Date.

The provisions of this Section 6.7 shall be in addition to any and all other obligations and liabilities that Developer may have under applicable law, and each Indemnitee shall be entitled to indemnification under this Section without regard to whether RHA 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 RHA Documents or applicable law. The obligations of Developer to indemnify the Indemnitees under this Section shall survive the expiration or earlier termination of this Agreement or the Ground Lease, any foreclosure proceeding, any foreclosure sale, and any delivery of any deed in lieu of foreclosure.

The Parties acknowledge and agree that the provisions of this Section 6.7 are intended to be an “environmental provision” for purposes of California Code of Civil Procedure Section 736.

Developer’s indemnification obligations set forth in this Section 6.7 shall survive the Close of Escrow and shall be subject to the provisions of Section 10.2. Developer’s indemnification obligations set forth in this Section 6.7 shall not apply to Claims to the extent arising from the gross negligence or willful misconduct of the Indemnitees.

6.8 Reserved.

6.9 No Limitation. Developer hereby acknowledges and agrees that Developer's duties, obligations and liabilities under this Agreement are in no way limited or otherwise affected by any information RHA may have concerning the Property and/or the presence in, on, under or about the Property of any Hazardous Material, whether RHA obtained such information from the Developer or from its own investigations.

6.10 Definitions.

6.10.1 “Hazardous Material” means any chemical, compound, material, mixture, or substance that is now or may in the future be defined or listed in, or otherwise classified pursuant to any Environmental Laws (defined below) as a “hazardous substance”, “hazardous material”, “hazardous waste”, “extremely hazardous waste”, infectious waste”, toxic substance”, toxic pollutant”, or any other formulation intended to define, list or classify substances by reason of deleterious properties such as ignitability, corrosivity, reactivity, carcinogenicity, or toxicity. The term “hazardous material” shall also include asbestos or asbestos-containing materials, radon, chrome and/or chromium, polychlorinated biphenyls, petroleum, petroleum products or by-products, petroleum components, oil, mineral spirits, natural gas, natural gas liquids, liquefied natural gas, or synthetic gas usable as fuel, perchlorate, and methyl-tert butyl ether, whether or not defined as a hazardous waste or hazardous substance in the Environmental Laws.

4892-0329-9990 v6 32

6.10.2 "Environmental Laws" means any and all federal, state and local statutes, ordinances, orders, rules, regulations, guidance documents, judgments, governmental authorizations or directives, or any other requirements of governmental authorities, as may presently exist, or as may be amended or supplemented, or hereafter enacted, relating to the presence, release, generation, use, handling, treatment, storage, transportation or disposal of Hazardous Material, or the protection of the environment or human, plant or animal health, including, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended by the Superfund Amendments and Reauthorization Act of 1986 (42 U.S.C. § 9601), the Hazardous Materials Transportation Act (49 U.S.C. § 1801 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. § 1251 et seq.), the Clean Air Act (42 U.S.C. § 7401 et seq.), the Toxic Substances Control Act (15 U.S.C. § 2601 et seq.), the Oil Pollution Act (33 U.S.C. § 2701 et seq.), the Emergency Planning and Community Right-to-Know Act (42 U.S.C. § 11001 et seq.), the Porter-Cologne Water Quality Control Act (Cal. Water Code § 13000 et seq.), the Toxic Mold Protection Act (Cal. Health & Safety Code § 26100, et seq.), the Safe Drinking Water and Toxic Enforcement Act of 1986 (Cal. Health & Safety Code § 25249.5 et seq.), the Hazardous Waste Control Act (Cal. Health & Safety Code § 25100 et seq.), the Hazardous Materials Release Response Plans & Inventory Act (Cal. Health & Safety Code § 25500 et seq.), and the Carpenter-Presley-Tanner Hazardous Substances Account Act (Cal.

Health and Safety Code, Section 25300 et seq.).

ARTICLE VII

LIMITATIONS ON CHANGE IN OWNERSHIP, MANAGEMENT

AND CONTROL OF DEVELOPER

7.1 Identity of Developer; Changes Only Pursuant to this Agreement. Developer and its principals have represented that they possess the necessary expertise, skill and ability to carry out the development of the Project pursuant to this Agreement. The qualifications, experience, financial capacity and expertise of Developer and its principals are of particular concern to RHA.

It is because of these qualifications, experience, financial capacity and expertise that RHA has entered into this Agreement with Developer. No voluntary or involuntary successor, assignee or transferee of Developer shall acquire any rights or powers under this Agreement, except as expressly provided herein.

7.2 Prohibition on Transfer. Prior to the expiration of the term of the Ground Lease as such may be extended, Developer shall not, except as expressly permitted by this Agreement or the Ground Lease, 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 Project, the Improvements, this Agreement, or Developer’s interest in the Property without the prior written approval of RHA which approval shall not be unreasonably withheld. Any such attempt to assign this Agreement without RHA’s consent shall be null and void and shall confer no rights or privileges upon the purported assignee. In addition to the foregoing, prior to the expiration of the term of the Ground Lease as such may be extended, except as expressly permitted by this Agreement or the Ground Lease, Developer shall not undergo any significant change of ownership without the prior written

4892-0329-9990 v6 33
approval of RHA. 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 Developer, taking all transfers into account on a cumulative basis, or a change in any general partner of Developer; 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.

7.3 Conditionally Permitted Transfers. Subject to the conditions set forth in this Section 7.3 and if applicable, Section 7.4, the prohibitions and other requirements set forth in this Article shall not be deemed to prevent: (i) the granting of temporary easements or permits to facilitate development of the Property, subject to RHA’s approval as owner of the Property; (ii) the lease of individual residences to tenants for occupancy as their principal residence in accordance with this Agreement, the Ground Lease, and the Regulatory Agreement; (iii) the lease of retail/commercial space (if any) in accordance with this Agreement and the Ground Lease; (iv) encumbrances, liens, and assignments creating security interests in connection with loans obtained by Developer for the purpose of financing the leasing of the Property or the construction or permanent financing of the Project in accordance with the approved Financing Plan as it may be updated with RHA approval and subject to the requirements of Article VIII, or Transfers directly resulting from the foreclosure of, or granting of a deed in lieu of foreclosure of, such a security interest; (v) the admission of limited partners and any transfer of limited partner interests in accordance with the Partnership Agreement; (vi) the removal of Developer’s general partner by the Investor Limited Partner for a default under the Partnership Agreement, provided that the replacement general partner is an entity reasonably satisfactory to RHA or is an affiliate of the Investor Limited Partner 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 RHA shall be identified and admitted; (vii) 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, provided such replacement general partner is reasonably satisfactory to RHA; or (viii) the transfer of the Property or the Investor Limited Partner’s interest in Developer to EAH or an affiliate of EAH pursuant to the exercise of a purchase option or right of first refusal agreement included as an element of, or an exhibit to, the Partnership Agreement.

7.4 Requirements for Proposed Transfers. RHA may, in the exercise of its sole discretion, consent to a proposed Transfer of this Agreement, the Improvements, or the leasehold interest in the Property, or part thereof if all of the following requirements are met (provided however, the requirements of this Section 7.4 shall not apply to Transfers described in clause (ii), clause (iii), or clause (iv) of Section 7.3, or clause (v) of Section 7.3 (except if the proposed transfer of limited partner interests is to EAH or an affiliate of EAH), and solely with respect to the removal of the general partner by the Investor Limited Partner for a default under the Partnership Agreement and the replacement of the general partner with an affiliate of the Investor Limited Partner for an interim period of not more than 180 days, clause (vi) of Section

7.3, provided that the provisions of this Section 7.4 shall apply to the selection of a replacement general partner after such interim period):
(i) The proposed transferee demonstrates to RHA’s satisfaction that it has the qualifications, experience and financial resources necessary and adequate as may be reasonably

4892-0329-9990 v6 34
determined by RHA to competently complete and manage the Project and to otherwise fulfill the obligations undertaken by the Developer under this Agreement and the other RHA Documents. (ii) The Developer and the proposed transferee shall submit for RHA review and approval all instruments and other legal documents proposed to effect any Transfer of all or any part of or interest in the Property, the Improvements, or this Agreement together with such documentation of the proposed transferee’s qualifications and development capacity as RHA may reasonably request.
(iii) The proposed transferee shall expressly assume all of the rights and obligations of the Developer under this Agreement and the other RHA Documents arising after the effective date of the Transfer and all obligations of Developer arising prior to the effective date of the Transfer (unless Developer expressly remains responsible for such obligations), and shall agree to be subject to, and assume all of, Developer’s obligations pursuant to the Conditions of Approval and all other conditions, and restrictions set forth in this Agreement and the other RHA Documents. The assumption of such obligations shall be documented in an assignment and assumption agreement in form approved by RHA. (iv) The Transfer shall be effectuated pursuant to a written instrument satisfactory to RHA 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 RHA's economic interests under this Agreement or RHA Documents shall be subject to RHA’s review and approval.

Consent to any proposed Transfer may be given by RHA’s Authorized Representative unless the Authorized Representative, in his or her discretion, refers the matter of approval to the RHA governing board. If RHA has not rejected a proposed Transfer or requested additional information regarding a proposed Transfer in writing within forty-five (45) days following RHA’s receipt of written request by Developer, the proposed Transfer shall be deemed approved.

7.5 Effect of Transfer without RHA Consent.

7.5.1 In the absence of specific written agreement by RHA, no Transfer shall be deemed to relieve the Developer or any other party from any obligation under this Agreement.

7.5.2 It shall be an Event of Developer Default hereunder entitling RHA to pursue remedies including without limitation, termination of this Agreement and the remedies provided under the Ground Lease and the other RHA Documents, if without the prior written approval of RHA, Developer assigns or Transfers this Agreement, the Improvements, or Developer’s interest in the Property, or any part thereof or interest therein, or undergoes any other Transfer in violation of Article VII. This Section 7.5.2 shall not apply to Transfers described in clauses (ii), (iii), (iv), and (vi) of Section 7.3).

7.6 Recovery of RHA Costs. Within ten (10) days following RHA’s delivery to Developer of an invoice detailing such costs, Developer shall reimburse RHA for all reasonable

4892-0329-9990 v6 35
RHA costs, including but not limited to reasonable attorneys’ and financial consultant fees, incurred in reviewing instruments and other legal documents proposed to effect a Transfer of this Agreement, the Improvements, or Developer’s interest in the Property, or part thereof, and in reviewing the qualifications and financial resources of a proposed successor, assignee, or transferee.

7.7 Treatment of Reserves. Notwithstanding any language to the contrary in the Partnership Agreement, for the full term of the Ground Lease, unless RHA agrees otherwise in writing, all funds in all Project reserve accounts shall remain with the Project to be used for the benefit of the Project and/or its residents.

ARTICLE VIII

SECURITY FINANCING AND RIGHTS OF MORTGAGEES

8.1 Mortgages and Deeds of Trust for Development. Mortgages and deeds of trust, or any other reasonable security instrument are permitted to be placed upon the Improvements and Developer’s leasehold interest in the Property only for the purpose of securing loans for the purpose of financing the leasing of the Property, the design and construction of the Improvements, and other expenditures reasonably necessary for the development of the Project pursuant to this Agreement. No such instruments shall be recorded against RHA’s fee interest in the Property. Developer shall not enter into any conveyance for such financing that is not described in the Financing Plan as it may be updated with RHA approval without the prior written approval of the Authorized Representative or his or her designee. As used herein, the terms “mortgage” and “deed of trust” shall mean any security instrument used in financing real estate acquisition, construction or land development. Developer shall use best efforts to ensure that RHA and City have the right to receive notices of any default under mortgages or other security instruments recorded against the Improvements and Developer’s leasehold interest in the Property concurrently with the lender’s provision of notice to Developer, and the right, but not the obligation to cure such defaults.

8.2 Subordination. The affordability restrictions set forth in the Ground Lease and the Regulatory Agreement shall not be subordinated to any deed of trust or other security instrument.

8.3 Holder Not Obligated to Construct. The holder of any mortgage or deed of trust authorized by this Agreement shall not be obligated to complete construction of the Project (unless such holder succeeds to the lessee’s interest under the Ground Lease), or to guarantee such completion. Nothing in this Agreement shall be deemed to permit or authorize any such holder to devote the Property or any portion thereof to any uses, or to construct any improvements thereon, other than those uses or improvements provided for or authorized by this Agreement.

8.4 Notice of Default and Lender Right to Cure. Whenever RHA delivers any notice of default hereunder, RHA shall concurrently deliver a copy of such notice to each holder of record of any mortgage or deed of trust secured by the Improvements or Developer’s interest in the Property, provided that RHA has been provided with the address for delivery of such notice.

RHA shall have no liability to any such holder for any failure by RHA to provide such notice to such holder. Each such holder shall have the right, but not the obligation, at its option, to cure or

4892-0329-9990 v6 36
remedy any such default or breach within the cure period provided to Developer. In the event that possession of a leasehold interest in the Property or the Improvements (or any portion thereof) is required to effectuate such cure or remedy, the holder shall be deemed to have timely cured or remedied the default if it commences the proceedings necessary to obtain possession of such leasehold interest or Improvements, as applicable, within the applicable cure period, diligently pursues such proceedings to completion, and after obtaining possession, diligently completes such cure or remedy. A holder who chooses to exercise its right to cure or remedy a default or breach shall first notify RHA of its intent to exercise such right prior to commencing to cure or remedy such default or breach. Nothing contained in this Agreement shall be deemed to permit or authorize such holder to undertake or continue the construction of the Project (beyond the extent necessary to conserve or protect the same) without first having expressly assumed in writing Developer’s obligations to RHA under this Agreement. The holder in that event must agree to complete the Project in the manner provided in this Agreement and the Ground Lease, and submit evidence reasonably satisfactory to RHA that it has the development capability on staff or retainer and the financial capacity necessary to perform such obligations.

Any such holder properly completing the Project pursuant to this Section shall assume all rights and obligations of Developer under this Agreement.

8.5 Failure of Holder to Complete Improvements. In any case where, six (6) months after default by Developer in completion of construction of the Project, the holder of record of any mortgage or deed of trust has not exercised its option to complete construction of the Project, or having first exercised such option, has not proceeded diligently with such work, RHA shall be afforded those rights against such holder that it would otherwise have against Developer under this Agreement.

8.6 Modifications to Agreement. RHA shall not unreasonably withhold its consent to modifications of this Agreement requested by Project lenders or investors provided such modifications do not alter RHA’s substantive rights and obligations under this Agreement.

8.7 Estoppel Certificates. Either Party shall, at any time, and from time to time, within fifteen (15) days after receipt of written request from the other Party, execute and deliver to such Party a written statement certifying that, to the knowledge of the certifying Party: (i) this Agreement is in full force and effect and a binding obligation of the Parties (if such be the case), (ii) this Agreement has not been amended or modified, or if so amended, identifying the amendments, and (iii) the requesting Party is not in default in the performance of its obligations under this Agreement, or if in default, describing the nature of any such defaults.

ARTICLE IX

DEFAULTS, REMEDIES AND TERMINATION

9.1 Event of Developer Default. The following events shall constitute an event of default on the part of Developer hereunder (“Event of Developer Default”):
(a) Developer fails to commence or complete construction of the Project within the time period set forth in Section 5.1, or subject to Force Majeure, abandons or suspends construction of the Project prior to completion for a period of thirty (30) days or more;

4892-0329-9990 v6 37
(b) Developer fails to pay when due the rent payable under the Ground Lease and such failure continues for ten (10) days after RHA notifies Developer thereof in writing; (c) A Transfer occurs, either voluntarily or involuntarily, in violation of Article VII;
(d) Developer fails to maintain insurance as required pursuant to this Agreement, and Developer fails to cure such default within five (5) days; (e) Following the Closing, Developer fails to pay prior to delinquency taxes or assessments due on the Property or the Improvements or fails to pay when due any other charge that may result in a lien on the Property or the Improvements, and Developer 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 foreclose thereon; (f) A default arises under any loan secured by a mortgage, deed of trust or other security instrument recorded against the Property and remains uncured beyond any applicable cure period such that the holder of such security instrument has the right to accelerate repayment of such loan;
(g) Any representation or warranty contained in this Agreement or the other RHA Documents, or in any application, financial statement, certificate or report submitted to RHA in connection with this Agreement proves to have been incorrect in any material adverse respect;
(h) 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”), Developer or any general partner thereof : (i) commences a voluntary case or proceeding; (ii) consents to the entry of an order for relief against Developer or any general partner thereof in an involuntary case; (iii) consents to the appointment of a trustee, receiver, assignee, liquidator or similar official for Developer 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;
(i) A court of competent jurisdiction shall have made or entered any decree or order (1) adjudging the Developer or any general partners thereof to be bankrupt or insolvent, (2) approving as properly filed a petition seeking reorganization of the Developer or any general partner thereof, or seeking any arrangement for Developer or any general partners thereof under bankruptcy law or any other applicable debtor's relief law or statute of the United States or any state or other jurisdiction, (3) appointing a receiver, trustee, liquidator, or assignee of Developer or nay general partner thereof in bankruptcy or insolvency or for any of its properties, or (4) directing the winding up or liquidation of the Developer or any general partner thereof, in each case if such decree, order, petition, or appointment is not removed or rescinded within sixty (60) days;
(j) Developer or any general partner thereof shall have assigned its assets for the benefit of its creditors (other than pursuant to a mortgage loan) or suffered a sequestration or attachment of or execution on any substantial part of its property, unless the property so

4892-0329-9990 v6 38
assigned, sequestered, attached or executed upon shall have been returned or released within sixty (60) days after such event (unless a lesser time period is permitted for cure pursuant to paragraphs (h) or (i) above or pursuant to any other mortgage on the Property, in which event such lesser time period shall apply under this subsection as well) or prior to any sooner sale pursuant to such sequestration, attachment, or execution; (k) Developer or any general partner thereof shall have voluntarily suspended its business or Developer or any general partner thereof shall have been dissolved or terminated; (l) An event of default arises under any RHA Document and remains uncured beyond any applicable cure period; or
(m) Developer defaults in the performance of any term, provision, covenant or agreement contained in this Agreement other than an obligation enumerated in this Section 9.1 and unless a shorter cure period is specified for such default, the default continues for ten (10) days in the event of a monetary default or thirty (30) days in the event of a nonmonetary default after the date upon which RHA shall have given written notice of the default to Developer; provided however, if such default is of a nature that it cannot be cured within thirty (30) days, an Event of Developer Default shall not arise hereunder if Developer commences to cure the default within thirty (30) days and thereafter prosecutes the curing of such default with due diligence and in good faith to completion.

9.2 RHA’s Right to Terminate Agreement. If an Event of Developer Default shall occur and be continuing beyond the applicable cure period, then RHA shall, in addition to other rights available to it under law or this Agreement, have the right to terminate this Agreement. If RHA makes such election, RHA shall give written notice to Developer and to any mortgagee entitled to such notice specifying the nature of the default and stating that this Agreement shall expire and terminate on the date specified in such notice, and upon the date specified in the notice, this Agreement and all rights of Developer under this Agreement, shall expire and terminate.

9.3 RHA’s Remedies and Rights Upon an Event of Developer Default. Upon the occurrence of an Event of Developer Default and the expiration of the applicable cure period, RHA shall have all remedies available to it under this Agreement or under law or equity, including, but not limited to the following, and RHA may, at its election, without notice to or demand upon Developer, except for notices or demands required by law or expressly required pursuant to RHA Documents, exercise one or more of the following remedies:
(a) Accelerate and declare any outstanding balance payable under the Ground Lease and interest accrued thereon immediately due and payable; (b) Seek specific performance to enforce the terms of RHA Documents; (c) Terminate this Agreement pursuant to Section 9.2; and (d) Pursue any and all other remedies available under this Agreement or under law or equity to enforce the terms of RHA Documents and RHA’s rights thereunder.

4892-0329-9990 v6 39
The foregoing rights and remedies are cumulative, and RHA’s exercise of one or more of such rights or remedies shall not preclude its exercise, at the same or different time, of any other rights or remedies for the same or any other default by Developer.

9.4 Developer’s Remedies Upon an Event of RHA Default. Upon the occurrence of a default hereunder by RHA, as its sole remedy, Developer may 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.

9.5 Inaction Not a Waiver of Default. No failure or delay by either Party in asserting any of its rights and remedies as to any default shall operate as a waiver of such default or of any such rights or remedies, nor deprive either Party of its rights to institute and maintain any action or proceeding which it may deem necessary to protect, assert or enforce any such rights or remedies in the same or any subsequent default.

9.6 Construction Plans. If this Agreement is terminated by mutual agreement of the Parties or by RHA as a result of an Event of Developer Default, Developer, at no cost to RHA, shall deliver to RHA copies of all construction plans and studies in the Developer's possession or in the possession of the Developer' s consultants related to development of the Project, including without limitation, the Construction Plans, subject only to the rights of senior lenders identified in the Financing Plan as it may be updated with RHA approval. If RHA utilizes the Construction Plans or studies, RHA shall indemnify the Developer for any claims arising from such use. If requested by RHA, Developer shall execute and deliver to RHA an assignment agreement in form approved by RHA to implement this Section 9.6.

9.7 Rights of Limited Partners. Whenever RHA delivers any notice of default hereunder, RHA shall concurrently deliver a copy of such notice to the Investor Limited Partner in accordance with Section 11.3. The Investor Limited Partner shall have the same right as Developer to cure or remedy any default hereunder within the cure period provided to Developer; provided however, if the default is of such nature that the Investor Limited Partner reasonably determines that it is necessary to replace the general partner of Developer 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 Investor Limited Partner has promptly commenced and diligently proceeded with all requisite actions to effect such removal and replacement.

ARTICLE X

INDEMNITY AND INSURANCE

10.1 Indemnity. To the greatest extent allowed by law, Developer shall indemnify, defend (with counsel reasonably approved by RHA) and hold the Indemnitees harmless from and against any and all Claims (including without limitation, Claims arising from any injury, death, illness, property damage, or loss of property) arising directly or indirectly, in whole or in part, as a result of or in connection with the development, construction, improvement, operation, ownership or maintenance of the Project or the Property, or any part thereof by any Developer Parties, or otherwise arising out of or in connection with Developer’s performance or failure to

4892-0329-9990 v6 40
perform under this Agreement, including without limitation, Claims arising or alleged to have arisen in connection with any violation of Applicable Laws in connection with the development, operation or management of the Project, or relating to approval of the Project or approval of this Agreement. Developer’s indemnification obligations under this Section 10.1 shall not extend to Claims to the extent arising from the gross negligence or willful misconduct of Indemnitees.

Developer’s obligations under this Section 10.1 shall survive the expiration or earlier termination of this Agreement and are subject to the provisions of Section 10.2.

10.2 Terms Applicable to Indemnity Provisions. The terms set forth in this Section

10.2 shall apply to all provisions of this Agreement that pertain to Developer’s obligations to indemnify RHA and the other Indemnitees, including without limitation, Sections 5.11, 5.14,

5.15, 6.1, 6.7, 10.1, 10.2, and 11.1. In connection with each such provision, all of the following shall apply:
(a) RHA does not and shall not waive any rights against Developer that it may have by reason of any indemnity and hold harmless provision set forth in this Agreement because of the acceptance by RHA, or the deposit with RHA by Developer, of any of the insurance policies described in this Agreement.
(b) Developer’s obligation to indemnify the Indemnitees shall not be limited or impaired by any of the following: (i) any amendment or modification of any RHA Document; (ii) any extensions of time for performance required by any RHA Document; (iii) any provision in any of RHA Documents limiting the personal liability of Developer; (iv) the accuracy or inaccuracy of any representation and warranty made by Developer under this Agreement or by Developer or any other party under any RHA Document, and (v) the release of Developer or any other person, by RHA or by operation of law, from performance of any obligation under any RHA Document.
(c) The obligation of Developer to indemnify the Indemnitees shall survive the expiration or earlier termination of this Agreement and the Ground Lease.

10.3 Insurance Requirements.
(a) Commercial General Liability. Developer (and until issuance of the final certificate of occupancy or equivalent for the Project all contractors and subcontractors working on behalf of Developer on the Project) shall maintain a commercial general liability policy including coverage for bodily injury, property damage, products, completed operations and contractual liability coverage with coverage limits in an amount equal to the greater of : (a) the amounts required by the construction and permanent lenders for the Project, and (b) Five Million Dollars ($5,000,000) each occurrence or such other policy limits as RHA may require in its reasonable discretion; provided however, the coverage requirements for subcontractors shall be Two Million Dollars ($2,000,000) per occurrence, Four Million ($4,000,000) annual aggregate.

Such policy or policies shall be written on an occurrence basis and shall name the Indemnitees as additional insureds. RHA’s Risk Manager may consider requests for lower limits for subcontractors that will provide a limited scope of services for the Project.

4892-0329-9990 v6 41
(b) Automobile. Developer (and until issuance of the final certificate of occupancy or equivalent for the Project, all contractors and subcontractors working on behalf of Developer on the Project) shall maintain a comprehensive automobile liability coverage in the amount of Three Million Dollars ($3,000,000), combined single limit including coverage for owned, hired, and non-owned vehicles. Automobile liability policies shall name the Indemnitees as additional named insureds.
(c) Worker’s Compensation; Employer’s Liability. Developer shall furnish to RHA evidence satisfactory to RHA that Developer and any contractor or subcontractor with whom Developer or the general contractor 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 Three Million Dollars ($3,000,000) per accident.
(d) Builder’s Risk. Upon commencement of construction work and continuing until RHA’s issuance of the final certificate of occupancy or equivalent for the Project, Developer and all contractors working on behalf of Developer 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 RHA. (e) Professional Liability/Errors and Omissions. Developer shall require the Project architect, engineer, and general contractor to maintain Professional Liability/Errors and Omissions (“E&O”) insurance with limits not less than Five Million Dollars ($5,000,000) each claim. RHA’s Risk Manager may consider requests for lower limits for professionals that will provide a limited scope of services for the Project. Certificates evidencing this coverage must reference both the Developer 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 construction, 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, Developer must purchase, or require the provision of, extended period coverage for a minimum of three (3) years after completion of construction.
(f) Pollution Legal Liability. Developer 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 Two Million ($2,000,000) per occurrence or claim and Four Million ($4,000,000) 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. Developer shall maintain property insurance covering all risks of loss (including earthquake and flood (if required)) for 100% of the replacement value of the Project with deductible, if any, in an amount acceptable to RHA, with a lender’s loss payable endorsement for the benefit of RHA.

4892-0329-9990 v6 42
(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, Developer shall furnish RHA with certificates of insurance in form acceptable to RHA evidencing the required insurance coverage required under paragraphs (a), (b), (c) and (e) above, duly executed endorsements evidencing the Indemnitees status as additional insured (except for E&O and Workers’ Compensation policies), and all other endorsements and coverage required hereunder pertaining to such coverage. Not less than twenty (20) days prior to Closing, Developer shall furnish RHA with certificates of insurance in form acceptable to RHA evidencing the insurance coverage required under paragraphs (d) and (f) above together with duly executed endorsements evidencing RHA’s status as lender’s loss payee.

Prior to RHA’s issuance of a final certificate of occupancy or equivalent for the Project, Developer shall furnish RHA with certificates of insurance in form acceptable to RHA evidencing the insurance coverage required under paragraph (g) above with a duly executed endorsement evidencing RHA’s status as lender’s loss payee. All insurance certificates shall contain a statement of obligation on the part of the carrier to notify RHA 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 RHA’s request, Developer shall, within thirty (30) days of the request, provide or arrange for the insurer to provide to RHA, complete certified copies of all insurance policies required under this Agreement. RHA’s failure to make such request shall not constitute a waiver of the right to require delivery of the policies in the future.

(j) Additional Insured Endorsements. The additional insured endorsements for the general liability coverage shall provide coverage at least as broad as Insurance Services Office (ISO) Form No. CG 20 09 11 85 or CG 20 10 11 85, or (if used together) at least as broad as CG 2010 10 01 and CG 2037 10 01; but shall not be provided using the following forms: CG 20 10 10 93 or 03 94. Upon RHA’s request, Developer shall provide or arrange for the insurer to provide certified copies of the actual insurance policies within thirty (30) days of the request.

(k) Reinstatement. If any insurance policy or coverage required hereunder is canceled or reduced, Developer 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 RHA 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, RHA may, without further notice and at its option, procure such insurance coverage at Developer’s expense, and Developer shall promptly reimburse RHA for such expense upon receipt of billing from RHA. Developer 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) Primary 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 RHA or City, and the policies shall so provide. Each insurance policy shall contain a waiver of subrogation for the benefit of RHA and City. Developer agrees to waive

4892-0329-9990 v6 43
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 RHA’s Risk Manager. Payment of all deductibles and self-insured retentions shall be the responsibility of Developer. At the option of and upon request by RHA’s Risk Manager if the Risk Manager 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 Developer shall procure a bond guaranteeing payment of losses and related investigations, claims administration and defense expenses. Policies shall not contain any self-insurance provision that limits the satisfaction of the self-insured retention or deductible to the named insured, and shall provide, or be endorsed to provide that the self-insured retention/deductible may be satisfied by either the named insured or in the exercise of their sole discretion, by the City or RHA. Developer shall promptly reimburse the City and RHA for any advances the City or RHA make to fund a self-insured retention or deductible.
(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 following completion of Project construction) 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 Contra Costa County area. Within thirty (30) days following RHA’s delivery of written notice of any such adjustments, Developer shall provide RHA 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, Developer (and Developer’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 Developer (and Developer’s contractors) to obtain and provide for the benefit of the Indemnitees, additional insured coverage in the same amount of insurance carried by Developer (or Developer’s contractors, as applicable), but in no event less than the minimum amounts specified in this Agreement. In the event that Developer (or Developer’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 RHA’s or City’s ability to recover amounts in excess of the minimum amounts specified in this Agreement.

4892-0329-9990 v6 44

ARTICLE XI

MISCELLANEOUS PROVISIONS

11.1 No Brokers. Each Party warrants and represents to the other that no person or entity can properly claim a right to a real estate commission, brokerage fee, finder’s fee, or other compensation with respect to the transactions contemplated by this Agreement. Each Party agrees to defend, indemnify and hold harmless the other Party from any claims, expenses, costs or liabilities arising in connection with a breach of this warranty and representation. The terms of this Section shall survive the close of escrow and the expiration or earlier termination of this Agreement.

11.2 Enforced Delay; Extension of Times of Performance. The time for performance of provisions of this Agreement by either Party shall be extended for a period equal to the period of any delay directly affecting the Project or this Agreement which is caused by war, insurrection, strikes, lockouts, riots, floods, earthquakes, fires, casualties, acts of God, acts of a public enemy, epidemics, pandemics, quarantine restrictions, freight embargoes, lack of transportation, suits filed by unrelated third parties concerning or arising out of this Agreement or unseasonable weather conditions (“Force Majeure”). An extension of time for any of the above-specified causes will be deemed granted only if written notice by the Party claiming such extension is sent to the other Party within ten (10) calendar days from the commencement of the cause. RHA and Developer acknowledge that adverse changes in economic conditions, either of the affected Party specifically or the economy generally, changes in market conditions or demand, and/or inability to obtain financing to complete the Project shall not constitute grounds of enforced delay pursuant to this Section. Each Party expressly assumes the risk of such adverse economic or market changes and/or financial inability, whether or not foreseeable as of the Effective Date.

Subject to the limitations set forth in Section 5.1, times of performance under this Agreement may also be extended in writing by the mutual agreement of Developer and RHA (acting in the reasonable discretion of the Authorized Representative unless he or she determines in his or her discretion to refer such matter to the RHA governing board).

11.3 Notices. Except as otherwise specified in this Agreement, all notices to be sent pursuant to this Agreement or any other RHA Document 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 prepaid or charged to the sender’s account, in which case notice is effective on delivery if delivery is confirmed by the delivery service.

4892-0329-9990 v6 45
RHA: City of Richmond
450 Civic Center Plaza, 2nd Floor
Richmond, CA 94804
Attention: Executive Director

Developer: Nevin Plaza II, L.P.
c/o EAH Inc.
22 Pelican Way
San Rafael, CA 94901
Attention: Chief Real Estate Development Officer

11.4 Attorneys’ Fees. If either Party fails to perform any of its obligations under this Agreement, or if any dispute arises between the Parties concerning the meaning or interpretation of any provision hereof, then the prevailing Party in any proceeding in connection with such dispute shall be entitled to the costs and expenses it incurs on account thereof and in enforcing or establishing its rights hereunder, including, without limitation, court costs and reasonable attorneys’ fees and disbursements, and attorneys’ fees attributable to RHA in-house counsel based upon comparable fees of private attorneys practicing in Contra Costa County. .

11.5 Waivers; Modification. 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 and executed by the Party granting the extension. This Agreement may be amended or modified only by a written instrument executed by the Parties.

11.6 Binding on Successors. Subject to the restrictions on Transfers set forth in Article VII, this Agreement shall bind and inure to the benefit of the Parties and their respective permitted successors and assigns. Any reference in this Agreement to a specifically named Party shall be deemed to apply to any permitted successor and assign of such Party who has acquired an interest in compliance with this Agreement or under law.

11.7 Survival. All representations made by Developer hereunder, Developer’s obligations pursuant to Sections 5.11, 5.14, 5.15, 6.1, 6.5, 6.7, 10.1, 10.2 and 11.1, and all other provisions that expressly so state, shall survive the expiration or termination of this Agreement.

11.8 Headings; Interpretation; Statutory References. The section headings and captions used herein are solely for convenience and shall not be used to interpret this Agreement.

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. All references in RHA Documents to particular statutes, regulations, ordinances or resolutions of the United States, the State of California, or the City of Richmond shall be deemed

4892-0329-9990 v6 46
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 Action or Approval. Whenever action and/or approval by RHA is required under this Agreement, RHA’s Authorized Representative or his or her designee may act on and/or approve such matter unless specifically provided otherwise, or unless the Authorized Representative determines in his or her discretion that such action or approval requires referral to the RHA governing board for consideration.

11.10 Entire Agreement. This Agreement, including Exhibits A through F-2 attached hereto and incorporated herein by this reference, together with the other RHA Documents, contains the entire agreement between the Parties with respect to the subject matter hereof, and supersedes all prior written or oral agreements, understandings, representations or statements between the Parties with respect to the subject matter hereof. If the Exhibits to this Agreement are inconsistent with this Agreement, the more restrictive requirements shall control, as determined by RHA’s Authorized Representative. In the event of a conflict between this Agreement and the other RHA Documents, the more restrictive requirements shall control, as determined by the Authorized Representative.

11.11 Severability. If any term, provision, or condition of this Agreement is held by a court of competent jurisdiction to be invalid or unenforceable, the remainder of this Agreement shall continue in full force and effect unless an essential purpose of this Agreement is defeated by such invalidity or unenforceability.

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

11.13 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 Developer and RHA shall not be construed as a joint venture, equity venture, partnership or any other relationship. RHA neither undertakes nor assumes any responsibility or duty to Developer (except as expressly provided in this Agreement) or to any third party with respect to the Project. Developer and its employees are not employees of RHA but rather are, and shall always be, considered independent contractors. Furthermore, Developer and its employees shall at no time hold themselves out as employees or agents of RHA. Except as RHA may specify in writing, Developer shall not have any authority to act as an agent of RHA or to bind RHA to any obligation.

11.14 Time of the Essence; Calculation of Time Periods. Time is of the essence for each condition, term, obligation and provision of this Agreement. Unless otherwise specified, in computing any period of time described in this Agreement, the day of the act or event after which the designated period of time begins to run is not to be included and the last day of the period so computed is to be included, unless such last day is not a business day, in which event the period shall run until the next business day. The final day of any such period shall be deemed to end at 5:00 p.m., local time at the Property. For purposes of this Agreement, a

4892-0329-9990 v6 47
“business day” means a day that is not a Saturday, Sunday, a federal holiday or a state holiday under the laws of the State of California.

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

11.16 Maintenance and Inspection of Books and Records. Developer shall keep and maintain at the Project or elsewhere with RHA’s consent, full, complete, and accurate books, records, and accounts relating to the Project, including such books, records, and accounts necessary to document Developer’s compliance with this Agreement and RHA Documents, including without limitation, the records required to substantiate compliance with Prevailing Wage Laws, the calculation of payments required under the Ground Lease, and the records required to substantiate compliance with the Ground Lease and the Regulatory Agreement. Upon request, Developer shall permit RHA to inspect at reasonable times and on a confidential basis those books, records and all other documents of Developer necessary to determine Developer’s compliance with the terms of this Agreement and RHA Documents.

11.17 Political Activity. None of the funds, materials, property or services contributed by RHA to Developer under this Agreement shall be used for any partisan political activity or the election or defeat of any candidate for public office.

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

11.19 Conflict of Interest.
(a) Except for approved eligible administrative or personnel costs, no person described in subsection (b) below who exercises or has exercised any functions or responsibilities with respect to the activities funded pursuant to this Agreement or who is in a position to participate in a decision-making process or gain inside information with regard to such activities, may obtain a personal or financial interest or benefit from the activity, or have an interest in any contract, subcontract or agreement with respect thereto, or the proceeds thereunder, either for themselves or those with whom they have family or business ties, during, or at any time after, such person’s tenure. The Developer shall exercise due diligence to ensure that the prohibition in this Section is followed.
(b) In accordance with Government Code Section 1090 and the Political Reform Act, Government Code Section 87100 et seq., no person who is a director, officer, partner, trustee or employee or consultant of the Developer, or immediate family member of any of the preceding, shall make or participate in a decision, made by RHA or a RHA board, commission or committee, if it is reasonably foreseeable that the decision will have a material effect on any source of income, investment or interest in real property of that person or the Developer.

4892-0329-9990 v6 48
Interpretation of this Section shall be governed by the definitions and provisions used in the Political Reform Act, Government Code Section 87100 et seq., its implementing regulations manual and codes, and Government Code Section 1090.

11.20 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be an original and all of which taken together shall constitute one instrument.

SIGNATURES ON FOLLOWING PAGES.

4892-0329-9990 v6 49
IN WITNESS WHEREOF, the Parties have entered into this Agreement effective as of the date first written above.

RHA:

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

By:

Print Name:__________________________

Title:_______________________________

DEVELOPER:

Nevin Plaza II, L.P., a California limited partnership

By: _________________, a ___________

Its: Managing General Partner

By: EAH Inc, a California nonprofit public
benefit corporation, its sole member/manager

By:____________________
Print Name:___________________
Title:________________________

4892-0329-9990 v6 50
Exhibit A

LEGAL DESCRIPTION OF THE PROPERTY

The land situated in the County of Contra Costa, City of Richmond, State of California described as follows:

Lots 7 through 10, inclusive and 19 through 22, inclusive and a portion of Lot 6 and Lot 23, Block 2, as shown on the map of "Nicholl MacDonald Avenue Civic Center, Richmond, California", which map was filed on October 29, 1912 in Map Book 8, Page 190, Contra Costa County Records, more particularly described as follows:

Beginning at the intersection of the southerly line of Nevin Avenue and the easterly line of 24th Street (formerly Grand Blvd.) as said Nevin Avenue and Grand Blvd. are shown on said map; thence along said easterly line of said 24th Street, South 10°12’53” West, 141.90 feet to the point of beginning; thence South 79°45’00” East, 199.81 feet to the westerly line of 25th Street (formerly Elmer Ave) as shown on said map; thence along last said line, South 10°13’28” West, 108.00 feet to the most southerly corner of said Lot 19; thence along the southerly lines of said Lots 19 and 10, North 79°45’00” West, 199.79 feet to said easterly line of said 24th Street; thence along last said line, North 10°12’53” East, 108.00 feet to the point of beginning.

APN’s: 515-261-010, 515-261-003, 515-261-002 and portion 515-261-001

4892-0329-9990 v6 51
Exhibit B

PROJECT SCHEDULE [to be revised]

Item Ref. Action

Target Date for Completion

§2.5.1 Developer submits preliminary Financing Plan and schedule of target dates for submittal of financing
applications and Project development
Prior to Effective Date. These are
attached as Exhibit B and Exhibit
F-1.
§10.3 Developer submits evidence of CGL, auto, workers
comp, employer liability, and E&O insurance to
RHA
Prior to Effective Date
§§2.3,

2.4 If applicable, Developer submits SB 35 and Density
Bonus applications
Within ____ days following
Effective Date
§§2.5.2,

2.5.3 Developer submits Updated Financing Plan
including updated schedule for submittal of
Project financing applications and the Project
Building Permit Application
_____ days following Effective
Date, and to be updated prior to
Closing. To be attached as Exhibit
F-2 or addendum.
§2.5.4 Developer submits funding applications to HCD Initial application for any HCD funding to be submitted in 20__.
§2.5.4 Developer submits CTCAC and CDLAC applications

Initial applications to be
submitted in 20__ in the earliest
possible round.
§3.8(j) Developer identifies proposed General Contractor Within 45 days following receipt of preliminary tax credit
reservation
§5.6 Developer submits complete Building Permit
Application, including all necessary Construction
Plans, to City Building Department for review
Within ____ days following
Effective Date
§§2.5.3,

2.54 Developer submits updated Financing Plan to RHA
with sources and uses, development and
operating pro formas
Within 60 days following receipt
of preliminary tax credit
reservation. To be attached as
Exhibit F-2 or addendum
§3.2 Developer obtains appraisal of Property

Six (6) months prior to Closing.
§5.23 Developer submits drafts of Marketing Plan,
proposed resident lease, Property Management
Plan, Property Management Agreement, Social
Services Plan, and Social Services Agreement for
RHA review and approval
Not later than 60 days prior to
Closing
§3.8(i) Developer submits draft Construction Contract to RHA
Not later than 30 days prior to
Closing

4892-0329-9990 v6 52
§5.18 Developer submits draft payment and
performance bonds, evidence of all required
insurance to RHA
Not later than 10 business days
prior to Closing
§5.1 Construction commences Not later than 4th anniversary of Effective Date, unless extended
§5.1 Construction completed

28 months after commencement.
§5.21 Developer submits Project completion audit to
RHA
Within 60 days following
completion of construction

4892-0329-9990 v6 53
Exhibit C

FORM OF CERTIFICATE OF COMPLETION

Recording requested by
and when recorded mail to:

Housing Authority of the City of Richmond
450 Civic Center Plaza, 2nd floor
Richmond, CA 94804
Attention: Executive Director

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

Space above this line for Recorder’s use.

CERTIFICATE OF COMPLETION

This Certificate of Completion (this “Certificate”) is made by the Housing Authority of the City of Richmond, a public body corporate and politic (“RHA”) effective as of __________, 20___.

RECITALS

A. RHA and Nevin Plaza II, L.P., a California limited partnership (“Developer”) entered into that certain unrecorded Lease Disposition and Development Agreement dated as of _____________, 2024 (the “LDDA”) concerning the development of certain real property located in the City of Richmond, Contra Costa County, California and more particularly described in Exhibit A attached hereto (the “Property”). Capitalized terms used herein without definition shall have the meaning ascribed to such terms in the LDDA.

B. Pursuant to Section 5.12 of the LDDA, RHA is required to furnish the Developer or its successors with a Certificate of Completion upon completion of development of the Project in accordance with the LDDA.

C. RHA has determined that the development of the Project has been satisfactorily completed in accordance with the LDDA.

NOW, THEREFORE, RHA hereby certifies as follows:

1. Development of the Project has been satisfactorily completed in conformance with the LDDA.

2. All indemnity, use, maintenance, and nondiscrimination covenants contained in the LDDA shall remain in effect and enforceable in accordance with the LDDA. This Certificate does not constitute evidence of Developer’s compliance with those covenants in the LDDA that survive the issuance of this Certificate, including

4892-0329-9990 v6 54
without limitation, Developer’s indemnity obligations, compliance with the Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants entered into pursuant to the LDDA and recorded in the Official Records of Contra Costa County (“Official Records”) on _______, 20__ as Instrument No. ___ Book___, Page___, and compliance with the Ground Lease executed by and between RHA and Developer, a memorandum of which was recorded in the Official Records on ________, 20__ as Instrument no._________.

3. This Certificate does not constitute evidence of compliance with or satisfaction of any obligation of Developer to any holder of a deed of trust securing money loaned to finance the improvements located on the Property, and does not constitute a notice of completion under California Civil Code Section 3093.

4. Nothing contained in this instrument shall modify any provisions of the LDDA or any other document executed in connection therewith.

IN WITNESS WHEREOF, RHA has executed and issued this Certificate of Completion as of the date first written above.

HOUSING AUTHORITY OF THE CITY OF RICHMOND, a municipal corporation

By: _____FORM-DO NOT SIGN _____

Name: _______________________________
Authorized Signatory

ATTEST:

By: _FORM-DO NOT SIGN _____

APPROVED AS TO FORM:

By: _____FORM-DO NOT SIGN __________
RHA Attorney

4892-0329-9990 v6 55
Exhibit A to Certificate of Completion

PROPERTY

(Attach legal description.)

4892-0329-9990 v6 56

Exhibit D

FORM OF REGULATORY AGREEMENT
(Attach form of Regulatory Agreement.)

Exhibit E

FORM OF GROUND LEASE
(Attach form of Ground Lease.)

Exhibit F-1

PRELIMINARY FINANCING PLAN
(Attach preliminary Financing Plan.)

Exhibit F-2

UPDATED FINANCING PLAN
(Attach final Updated Financing Plan when approved.)

Richmond City CouncilDecember 17, 2024

Richmond City Council
December 17, 2024