Agenda packet — Rocklin City Council, November 18, 2025 (part 3 of 7)

to Reso. No. 2025-

EXHIBIT A

City of Rocklin
Community Facilities District No. 1 (Annexation No. 95) College Park South (C-2 East and West)

OFFICIAL BALLOT

SPECIAL TAX ANNEXATION ELECTION

This ballot is for the special landowner election. You must return this ballot in the enclosed postage paid envelope to the office of the City Clerk of the City of Rocklin no later than 5:00 p.m. on November 18, 2025, either by mail or in person. The City Clerk's office is located at 3970 Rocklin Road, Rocklin, California 95677.

To Vote, mark a cross (X) in the voting square after the word "YES" or after the word "NO." All marks otherwise made are forbidden. All distinguishing marks are forbidden and make the ballot void.

If you wrongly mar k, tear, or deface this ballot, return it to the City Clerk of the City of Rocklin and obtain another.

BALLOT MEASURE: Shall the City of Rocklin, by and for its Community Facilities District No. 1 (the "CFD"), be authorized to levy special taxes within the territory annexed to the CFD pursuant to and as desc ribed in Resolution No. 2025-215 of the City of Rocklin, ad opted by its Counc il on October 14 , 2025?

YES:____________

NO:_____________

By execution in the space provided below, you also confirm your waiver of the time limit pertaining to the conduct of the election and any requirement for notice of election and analysis and arguments with respect to the ballot measure, as such waivers are described and permitted by Sections 53326(a) and 53327(b) of the California Government Code.

Number of Votes: 8
Property Owner: Sierra Holding 703, L. P.

Name: Sierra Holding 703, L. P.

Address: 3200 Douglas Blvd, Suite 200
Roseville, CA 95661

By:_____________________________
Print Name
________________________________
Signature
Title:____________________________
567

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to Reso. No. 2025-
City of Rocklin
Community Facilities District No. 1 (Annexation No. 95) College Park South (C-2 East and West)

OFFICIAL BALLOT

SPECIAL TAX ANNEXATION ELECTION

This ballot is for the special landowner election. You must return this ballot in the enclosed postage paid envelope to the office of the City Clerk of the City of Rocklin no later than 5:00 p.m. on November 18, 2025, either by mail or in perso n. The City Clerk's office is located at 3970 Rocklin Road, Rocklin, California 95677.

To Vote, mark a cross (X) in the voting square after the word "YES" or after the word "NO." All marks otherwise made are forbidden. All distinguishing marks are forbidden and make the ballot void.

If you wrongly mark, tear, or deface this ballot, return it to the City Clerk of the City of Rocklin and obtain another.

BALLOT MEASURE: Shall the City of Rocklin, by and for its Community Facilities District No. 1 (the "CFD"), be authorized to levy special taxes within the territory annexed to the CFD pursuant to and as desc ribed in Resolution No. 2025 -215 of the City of Rocklin, ad opted by its Council on October 14, 2025?

YES:____________

NO:_____________

Number of Votes: 9
Property Owner: Sierra College Enterprise Services

Name: Sierra College Enterprise Services
Address: 5100 Sierra College Blvd
Rocklin, CA 95677

By:_____________________________
Print Name
________________________________
Signature

Title:____________________________
568
Resolution No. 2025- November 18, 2025 Page 1 of 2
1 RESOLUTION NO. 2025-

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ROCKLIN

DECLARING RESULTS OF SPECIAL ANNEXATION ELECTION, DETERMINING

VALIDITY OF PRIOR PROCEEDINGS, AND DIRECTING RECORDING OF

AMENDED NOTICE OF SPECIAL TAX LIEN PERTAINING TO COMMUNITY FACILITIES DISTRICT NO. 1 (ANNEXATION NO. 95)
(College Park South (C-2 East and West),
APNs 045-131-015-000 and 045-131-016-000)

BE IT RESOLVED by the City Council of the City of Rocklin as follows:

Section 1. The City Council of the City of Rocklin finds as follows:

1. In proceedings heretofore conducted by the City Council pursuant to the Mello-Roos Community Facilities Act of 1982, as amended (the "Ac t"), this City Council has heretofore adopted a resolution calling a special election of the qualified landowner electors in the territory of land proposed to be annexed to Community Fac ilities District No. 1 (Annexation No. 95) (the "CFD");

2. Pursuant to the terms of the resolution which is hereby incorporated herein by this reference, the special election has been held and the City Clerk has filed a Canvass of Votes Cast in Special Election, a copy of which is attached hereto as Exhibit A; and,

3. This City Council has reviewed the Canvass and hereby approves it.

Section 2. The issue presented at the special election was the levy of a special tax within the territory annexed to the CFD, to be levied in accordance with the formula heretofore approved by this City Council as described in Resolution No. 2025-215, the Resolution of Intention.

Section 3. Pursuant to the Canvass on file with the City Clerk, the issue presented at the special election was approved by the landowner-voter being the qualified electors of the territory annexed to the CFD by more than two -thirds of the qualified electors voting at the special election.

Section 4. Pursuant to the voter approval, the annexed territory to the CFD is hereby declared to be fully annexed to and part of the CFD and this City Council may levy special taxes therein as heretofore provided in these proceedings.

Section 5. It is hereby found that all prior proceedings and actions taken by this City Council pursuant to the CFD and the territory annexed thereto were valid and in conformity with the Act.

569
Resolution No. 2025- November 18, 2025 Page 2 of 2
1 Section 6. Within 15 days of the date hereof, the City Clerk shall execute and cause to be recorded in the office of the County Recorder of the County of Placer, an amendment to the Notice of Special Tax Lien as required by Section 3117.5 of the California Streets and Highways Code.

PASSED AND ADOPTED this 18th day of November, 2025 by the following vote:

AYES: Councilmembers:

NOES: Councilmembers:

ABSENT: Councilmembers:

ABSTAIN: Councilmembers:

____________________________________
Jill Gayaldo, Mayor

ATTEST:

____________________________
Avinta Singh, City Clerk

570

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EXHIBIT A

City of Rocklin
Community Facilities District No. 1 (Annexation No. 95) College Park South (C-2 East and West)

CANVASS AND STATEMENT OF RESULT OF ELECTION

I hereby certify that on this date, I canvassed the returns of the election held on this date in the territory annexed to Community Facilities District No. 1 (Annexation No. 95) of the City of Rocklin, which election is designated as the Special Tax Annexa tion Election, and the total number of ballots cast in the territory to be annexed and the total number of votes cast for and against the measure are as follows and the totals as shown for and against the measure are full, true and correct:

Qualified
Landowner
Votes

Votes Cast

YES

NO
City of Rocklin
Community Facilities District No. 1
Annexation No. 95
Special Tax Annexation Election,
November 18, 2025

17 _____

_____

BALLOT MEASURE: Shall the City of Rocklin, by and for its Community Facilities District No. 1 (Annexation No. 95) (the "CFD"), be authorized to levy special taxes within the territory annexed to the CFD pursuant to and as described in Resolution No. 2025-215 of the City of Rocklin, adopted by its Council on October 14, 2025?

IN WITNESS WHEREOF, I HAVE HEREUNTO SET MY HAND this 18th day of November, 2025.

CITY OF ROCKLIN

By:_________________________________
Avinta Singh, City Clerk

571

ROCKLIN ROAD

EL DON DRIVE
PARCEL MAP FORCOLLEGE PARK SOUTH36 PM 107
APN: 045-131-015-000
APN: 045-131-016-000
PARCEL 3
PARCEL 4
± °
±
± °
±

ROCKLIN ROAD

WILDFLOWER LANE
BUILDING RELATIONSHIPS ONE PROJECT AT A TIME3301 C St, Bldg. 100-BTel 916.341.7760Fax 916.341.7767Sacramento, CA 95816OCTOBER 2025 SHEET 1 OF 1 BOOK OF COMMUNITY FACILITIES DISTRICT, PAGE COLLEGE PARK SOUTH C-2 EAST AND WESTANNEXATION MAP NO. 95 OFCOMMUNITY FACILITIES DISTRICT NO. 1BEING A PORTION OF PARCELS 3 AND 4 OF THAT CERTAIN PARCEL MAPENTITLED "COLLEGE PARK SOUTH", FILED FOR RECORD IN BOOK 36 OFPARCEL MAPS, AT PAGE 107, PLACER COUNTY RECORDS, BEING A PORTIONOF SECTION 20, TOWNSHIP 11 NORTH, RANGE 7 EAST, M.D.B.&M., CITY OFROCKLIN , COUNTY OF PLACER, STATE OF CALIFORNIAOCTOBER, 2025

NOT TO SCALEVICINITY MAP
80 SIERRA COLLEGE BLVD

ROCKLIN RD
NORTH
572
City Council Special
Staff Report

Subject:

Annexation Into Community Facilities District No. 5 (College Park South (C-2 East and West))
Date:

November 18, 2025
Submitted By:

Megan Bressem, Management Analyst
Daniel Choe, Administrative Services Deputy Director
Department:

Administrative Services - Finance
Recommendation:

Conduct a Public Hearing and Consider the Following Actions:

A
.

Adopt a Resolution of the City Council of the City of Rocklin of Annexation of Territory to Community Facilities District No. 5 (Annexation No. 81), Authorizing the Levy of a Special Tax, and Submitting Levy of Tax to Qualified Electors (College Park South (C-2 East and West), APNs 045-131-015-000 and 045-131-016-000).

B
.

Adopt a Resolution of the City Council of the City of Rocklin Declaring Results of Special Annexation Election, Determining Validity of Prior Proceedings, and Directing Recording of Amended Notice of Special Tax Lien Pertaining to Community Facilities District No. 5 (Annexation No. 81) (College Park South (C-2 East and West), APNs 045-131-015-000 and 045-131-016-000).

Background:

On October 14, 2025, the City Council adopted Resolution No. 2025-216, a Resolution of Intention to Annex Territory to Rocklin Community Facilities District (CFD) No. 5 (Annexation No. 81) and to Authorize the Levy of Special Taxes Therein regarding College Park South (C-2 East and West). College Park South (C-2 East and West) includes both commercial and residential development and is located on the southerly side of Rocklin Road, east of El Don Drive (Assessor's Parcel Numbers 045-131- 015-000 and 045-131-016-000). A map of the annexation area is included as Attachment 3. A Notice of Public Hearing was published in the Placer Herald on October 24, 2025.

The development of College Park South (C -2 East and West) is conditioned on, among other things, annexation into CFD No. 5. CFD No. 5 finances the operation and maintenance of publicly owned parks, parkways, landscaping and street/parkway lighting.

There are two resolutions for City Council consideration. Resolution A (Attachment 1) finds that no majority protest exists, orders the annexation, and authorizes the levy of the special tax, subject to approval by a two-thirds vote of the landowners.

Item Number PH2.

573
In anticipation of approval of the annexation, the election has already occurred, and Resolution B (Attachment 2) approves the canvass of the election, declares the results of the election, and orders the recording of the amended notice of special tax lien, which gives notice that the land within the project area is now subject to the special tax.

Fiscal Impact:

There is no direct fiscal impact to the General Fund from the staff recommendation.

Annexation into CFD No. 5 would allow special taxes to be levied and collected to pay for services provided to the annexation territory.

ATTACHMENTS:

1. Resolution A - Levy of Special Taxes

2. Resolution B - Annexation Election

3. Annexation Map
574
Resolution No. 2025- November 18, 2025 Page 1 of 3
1 RESOLUTION NO. 2025-

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ROCKLIN
OF ANNEXATION OF TERRITORY TO COMMUNITY FACILITIES DISTRICT NO. 5 (ANNEXATION NO. 81), AUTHORIZING THE LEVY OF A SPECIAL TAX, AND

SUBMITTING LEVY OF TAX TO QUALIFIED ELECTORS
(College Park South (C-2 East and West),
APNs 045-131-015-000 and 045-131-016-000)

BE IT RESOLVED by the City Council of the City of Rocklin as follows:

Section 1. The City Council of the City of Rocklin hereby finds as follows:

1. The City Council on October 14, 2025, adopted Resolution No. 2025-216 (the "Resolution of Intention") stating its intention to annex the territory to the City's Community Facilities District No. 5 (Annexation No. 81) (the "CFD"), pursuant to the Mello-Roos Community Facilities Act of 1982, as amended (the "Act");

2. A copy of the Resolution of Intention, incorporating a description and map of the proposed boundaries of the territory to be annexed to the CF D and stating the facilities and/or services to be provided and the rate and method of apportionment of the special tax to be levied within the CFD to pay for operation and maintenance of publicly owned parks, parkways, landscaping and street/parkway light ing, is on file with the City Clerk and the provisions thereof are fully incorporated herein by this reference as if fully set forth herein;

3. On the date hereof, this City Council held a noticed public hearing as required by the Act and the Resolution of Intention relative to the proposed annexation of territory to the CFD;

4. At said hearing all interested persons desiring to be heard on all matters pertaining to the annexation of territory to the CFD and the levy of said special taxes within the area proposed to be annexed were heard and a full and fair hearing was held;

5. Prior to the time fixed for said hearing, written protests had not been filed against the proposed annexation of territory to the CFD by (i) 50% or more of the registered voters, or six registered voters, whichever is more, residing in the existing CFD, or (ii) 50% or more of the registered voters, or six registered voters, whichever is more, residing in the territory proposed to be annexed to the CFD, or (iii) owners of one -half or more of the area of land in the territory proposed to be annexed to the CFD;

6. Annexation Map No. 81 to the CFD, has been filed with the County Recorder of the County of Placer, which map shows the territory to be annexed in these proceedings, and a copy thereof is on file with the City Clerk; and

575
Resolution No. 2025- November 18, 2025 Page 2 of 3
1 7. All prior proceedings taken by this City Council with respect to the CFD and the proposed annexation of territory thereto have been duly considered and are hereby determined to be valid and in conformity with the Act, and the CFD has been validly established pursuant to the Act.

Section 2. The description and map of the boundaries of the territory to be annexed to CFD, as described in said Annexation Map No. 81 to the CFD on file with the City Clerk are hereby finally approved, are incorporated herein by reference, and shall be included within the boundaries of the CFD, and said territory is hereby ordered annexed to the CFD, subject to voter approval of the levy of the special taxes therein as hereinafter provided.

Section 3. The provisions of the Resolution of Intention as heretofore adopted by this City Council are by this reference incorporated herein, as if fully set forth herein.

Section 4. Pursuant to the provisions of the Act, the proposition of the levy of the special tax within the territory to be annexed to the CFD shall be submitted to the voters of the area to be annexed to the CFD at an election called therefor as hereinafter provided.

Section 5. This City Council hereby finds that fewer than 12 persons have been registered to vote within the territory proposed to be annexed to the CFD for each of the 90 days preceding the close of the hearing heretofore conducted and concluded by this City Council for the purposes of these annexation proceedings. Accordingly, and pursuant to Section 53326 of the Act, this City Council finds that for purposes of these proceedings the qualified electors are the landowners within the territory proposed to be annexed to the CFD and that the vote shall be by said landowners, each having one vote for each acre or portion thereof such landowner owns in the territo ry proposed to be annexed to the CFD.

Section 6. Pursuant to Section 53326 of the Act, the election shall be conducted by mail ballot under Section 4000 of the California Elections Code. This City Council hereby determines that para graphs (a), (b), (c)(1 ) and (2) of said Section 4000 are applicable to this election.

Section 7. The City Council hereby calls a special election to consider the measure described in the ballot referred to in paragraph 8 below, which election shall be held on November 18, 2025, in the regular meeting place of this City Council, City Council Chambers, 3970 Rocklin Road, Rocklin, California.

Section 8. The City Clerk is hereby appointed as the election official to conduct the election and cause to be provided to each landowner(s) in the territory to be annexed to the CFD, a ballot in the form of Exhibit A hereto, which form is hereby approved.

576
Resolution No. 2025- November 18, 2025 Page 3 of 3
1 Section 9. The City Clerk shall accept the ballots of the qualified electors received prior to 5:00 p.m. on November 18 , 2025 , whether received by mail or by personal delivery.

Section 10. This City Council hereby further finds that the provision of Section 53326 of the Act requiring a minimum of 90 days to elapse before said election is for the protection of voters, that the voters have waived such requirement and the date for the election herein above specified is established accordingly.

PASSED AND ADOPTED this 18th day of November, 2025, by the following vote:

AYES: Councilmembers:

NOES: Councilmembers:

ABSENT: Councilmembers:

ABSTAIN: Councilmembers:

____________________________________
Jill Gayaldo, Mayor

ATTEST:

____________________________
Avinta Singh, City Clerk

577

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to Reso. No. 2025-

EXHIBIT A

City of Rocklin
Community Facilities District No. 5 (Annexation No. 81) College Park South (C-2 East and West)

OFFICIAL BALLOT

SPECIAL TAX ANNEXATION ELECTION

To Vote, mark a cross (X) in the voting square after the word "YES" or after the word "NO." All marks otherwise made are forbidden. All distinguishing marks are forbidden and make the ballot void.

If you wrongly mark, tear, or deface this ballot, return it to the City Clerk of the City of Rocklin and obtain another.

BALLOT MEASURE: Shall the City of Rocklin, by and for its Community Facilities District No. 5 (the "CFD"), be authorized to levy special taxes within the territory annexed to the CF D pursuant to and as desc ribed in Resolution No. 2025 -216 of the City of Rocklin, ad opted by its Council on October 14 , 2025?

YES:____________

NO:_____________

Number of Votes: 8
Property Owner: Sierra Holding 703, L. P.

Name: Sierra Holding 703, L. P.

Address: 3200 Douglas Blvd, Suite 200
Roseville, CA 95661

By:_____________________________
Print Name
________________________________
Signature
Title:____________________________
578

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to Reso. No. 2025-
City of Rocklin
Community Facilities District No. 5 (Annexation No. 81) College Park South (C-2 East and West)

OFFICIAL BALLOT

SPECIAL TAX ANNEXATION ELECTION

This ballot is fo r the special landowner election. You must return this ballot in the enclosed postage paid envelope to the office of the City Clerk of the City of Rocklin no later than 5:00 p.m. on November 18, 2025, either by mail or in person. The City Clerk's office is located at 3970 Rocklin Road, Rocklin, California 95677.

To Vote, mark a cross (X) in the voting square after the word "YES" or after the word "NO." All marks otherwise made are forbidden. All distinguishing marks are forbidden and make the ballot void.

If you wrongly mark, tear, or deface this ballot, return it to the City Clerk of the City of Rocklin and obtain another.

BALLOT MEASURE: Shall the City of Rocklin, by and for its Community Facilities District No. 5 (the "CFD"), be authorized to levy special taxes within the territory annexed to the CFD pursuant to and as desc ribed in Resolution No. 2025 -216 of the City of Rocklin, ad opted by its Council on October 14, 2025?

YES:____________

NO:_____________

Number of Votes: 9
Property Owner: Sierra College Enterprise Services

Name: Sierra College Enterprise Services
Address: 5100 Sierra College Blvd
Rocklin, CA 95677

By:_____________________________
Print Name
________________________________
Signature

Title:____________________________
579
Resolution No. 2025- November 18, 2025 Page 1 of 2
1 RESOLUTION NO. 2025-

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ROCKLIN

DECLARING RESULTS OF SPECIAL ANNEXATION ELECTION, DETERMINING

VALIDITY OF PRIOR PROCEEDINGS, AND DIRECTING RECORDING OF

AMENDED NOTICE OF SPECIAL TAX LIEN PERTAINING TO COMMUNITY FACILITIES DISTRICT NO. 5 (ANNEXATION NO. 81)
(College Park South (C-2 East and West),
APNs 045-131-015-000 and 045-131-016-000)

BE IT RESOLVED by the City Council of the City of Rocklin as follows:

Section 1. The City Council of the City of Rocklin finds as follows:

3. This City Council has reviewed the Canvass and hereby approves it.

Section 5. It is hereby found that all prior proceedings and actions taken by this City Council pursuant to the CFD and the territory annexed thereto were valid and in conformity with the Act.

580
Resolution No. 2025- November 18, 2025 Page 2 of 2
1 Section 6. Within 15 days of the date hereof, the City Clerk shall execute and cause to be recorded in the office of the County Recorder of the County of Placer, an amendment to the Notice of Special Tax Lien as required by Section 3117.5 of the California Streets and Highways Code.

PASSED AND ADOPTED this 18th day of November, 2025, by the following vote:

AYES: Councilmembers:

NOES: Councilmembers:

ABSENT: Councilmembers:

ABSTAIN: Councilmembers:

____________________________________
Jill Gayaldo, Mayor

ATTEST:

____________________________
Avinta Singh, City Clerk

581

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to Reso. No. 2025-

EXHIBIT A

City of Rocklin
Community Facilities District No. 5 (Annexation No. 81) College Park South (C-2 East and West)

CANVASS AND STATEMENT OF RESULT OF ELECTION

I hereby certify that on this date, I canvassed the returns of the election held on this date in the territory annexed to Community Facilities District No. 5 (Annexation No. 81) of the City of Rocklin, which election is designated as the Special Tax Annexation Election, and the total number of ballots cast in the territory to be annexed and the total number of votes cast for and against the measure are as follows and the totals as shown for and agains t the measure are full, true and correct:

Qualified
Landowner
Votes

Votes Cast

YES

NO
City of Rocklin
Community Facilities District No. 5
Annexation No. 81
Special Tax Annexation Election,
November 18, 2025

17 _____

_____

BALLOT MEASURE: Shall the City of Rocklin, by and for its Community Facilities District No. 5 (Annexation No. 81) (the "CFD"), be authorized to levy special taxes within the territory annexed to the CFD pursuant to and as described in Resolution No. 2025-216 of the City of Rocklin, adopted by its Council on October 14, 2025?

IN WITNESS WHEREOF, I HAVE HEREUNTO SET MY HAND this 18th day of November, 2025.

CITY OF ROCKLIN

By:_________________________________
Avinta Singh, City Clerk

582

ROCKLIN ROAD

EL DON DRIVE
PARCEL MAP FORCOLLEGE PARK SOUTH36 PM 107
APN: 045-131-015-000
APN: 045-131-016-000
PARCEL 3
PARCEL 4
± °
±
± °
±

ROCKLIN ROAD

WILDFLOWER LANE
BUILDING RELATIONSHIPS ONE PROJECT AT A TIME3301 C St, Bldg. 100-BTel 916.341.7760Fax 916.341.7767Sacramento, CA 95816OCTOBER 2025 SHEET 1 OF 1 BOOK OF COMMUNITY FACILITIES DISTRICT, PAGE COLLEGE PARK SOUTH C-2 EAST AND WESTANNEXATION MAP NO. 81 OFCOMMUNITY FACILITIES DISTRICT NO. 5BEING A PORTION OF PARCELS 3 AND 4 OF THAT CERTAIN PARCEL MAPENTITLED "COLLEGE PARK SOUTH", FILED FOR RECORD IN BOOK 36 OFPARCEL MAPS, AT PAGE 107, PLACER COUNTY RECORDS, BEING A PORTIONOF SECTION 20, TOWNSHIP 11 NORTH, RANGE 7 EAST, M.D.B.&M., CITY OFROCKLIN , COUNTY OF PLACER, STATE OF CALIFORNIAOCTOBER, 2025

NOT TO SCALEVICINITY MAP
80 SIERRA COLLEGE BLVD

ROCKLIN RD
NORTH
583
City Council Special
Staff Report

Subject:

Affordable Housing Agreements with Community HousingWorks for the Development of an Affordable Housing Project at Oak, Pine and Pacific Streets
Date:

November 18, 2025
Submitted By:

Elizabeth Sorg, Assistant to the City Manager
Andrew Keys, Assistant City Manager
Aly Zimmermann, City Manager
Department:

City Manager's Office
Recommendation:

Conduct a Public Hearing and Consider the Following Actions:

A
.

Adopt a Resolution of the City Council of the City of Rocklin Approving an Amended and Restated Affordable Housing Agreement By and Between the City and Pacific Street Housing Associates Four, L.P., a California Limited Partnership.

B
.

Adopt a Resolution of the City Council of the City of Rocklin Approving an Affordable Housing Agreement By and Between the City and Pacific Street Housing Associates Nine, L.P., a California Limited Partnership.

Background:

Project Background Information - Original Site and Original Affordable Housing Agreement The City of Rocklin owns multiple properties bounded by Railroad Avenue on the west, Pine Street on the north, Pacific Street on the east and Oak Street on the south. A site map is included for reference as Attachment 8. The approximately 2.8-acre site is comprised of Assessor’s Parcel Numbers 010-121-001, -002, -004, -005, -006, and 010-040-039. These parcels are referred to in this staff report as the Original Site. The Original Site has previously been designated as surplus to be disposed in accordance with the requirements of the Surplus Land Act (Sections 54220-54234 of the California Government Code; herein, together with the implementing Guidelines as referenced below, the Surplus Land Act). The intention of the City has been to use the Original Site, by means of a sale or ground lease, for the development of affordable rental housing.

The City completed the Surplus Land Act process to solicit proposal from firms interested in constructing affordable housing on the Original Site. Several proposals were received. As a result of that process, Community HousingWorks (CHW) was selected to develop the subject property.

Item Number PH3.

584
At the September 27, 2022 City Council meeting, the City Council authorized and approved issuance of a Preliminary Commitment Letter with CHW with respect to the development of the Original Site for affordable rental housing. The Preliminary Commitment Letter committed Two Million Six Hundred Thousand Dollars ($2,600,000) of Low- and Moderate-Income Housing Asset Funds maintained by the City, subject to the parties entering into a binding agreement containing conditions to disbursement customary in affordable housing agreements. The Preliminary Commitment Letter indicated that the City intended to further negotiate a comprehensive transactional agreement with CHW under which the disposition of a leasehold interest for development of affordable rental housing (the Affordable Housing Agreement, as described below) would be carried out.

At the November 8, 2022 City Council meeting, the City Council approved an Affordable Housing Agreement (the Original AHA) between the City and CHW for the development of 109 units of affordable rental housing, plus one manager’s unit, on the Original Site. The Original AHA contemplated that the City would ground lease the Original Site to CHW or a subsidiary(s) formed by CHW to implement parts of the development of the Original Site.

Project Review and
Approvals
In November 2023, CHW submitted its first design set to the City for review. On March 7, 2024 the project was considered by the Architectural Review Committee (ARC). Prior to the meeting, a sign was posted on the site to notify the public of the meeting. The ARC recommended the project architecture for approval, subject to feedback provided by the ARC.

Following the recommendation, CHW worked with staff to finalize the design. After several rounds of comments and changes, the Design Review was approved by the Community Development Director on May 8, 2025.

The site is located in the Business Attraction, Retention, and Revitalization Overlay (BARRO) Zone. The intent of the BARRO Zone is to provide a process for revitalization of older commercial areas enabling flexible development standards, streamlined approval processes, and reduced application fees. Section 17.59.050 of the Rocklin Municipal Code (RMC) authorizes the Community Development Director to approve applications for entitlements within the BARRO Zone, including Design Reviews and Conditional Use Permits (CUP). While Design Reviews are completely ministerial, pursuant to State Law and the RMC, consideration of a CUP requires a noticed public hearing. For this project, a CUP was necessary to address several conditions, including resident parking on public streets and lots and the inclusion of a previously non-City-owned parcel in the project.

Consistent with the BARRO Zone requirements, staff held a publicly noticed hearing for the CUP on February 4, 2025. Prior to the CUP hearing, notice of the proposed development and the CUP hearing was mailed to the 111 individual addresses within a 600-foot radius of the property. A sign noticing the CUP hearing was also placed on the site in excess of the 10 days prior to the hearing required on site notice.

On November 18, 2025 at 10:00 a.m., staff from CHW and the City will be holding a community workshop discuss the project. Notice of this meeting was provided in the City newsletter and direct mailers were sent to adjacent property owners.

585
Current
Project
Since the approval of the Original AHA in November, 2022, there have been changes to the project that require an updated AHA. These include:

The purchase and subsequent conveyance of a small parcel (which, when combined with the Original Site, is referred to herein as the “Site”); and The splitting of the project into two distinct legal entities for financing purposes, with each portion of the Site to be separately developed and financed. The separation of the Original Site into more than one piece was contemplated under the Original AHA.

Combined
Site
On February 21, 2023 CHW purchased a parcel that was adjacent to the Original Site. This parcel, APN 010-121-006-000, was the only non-City-owned parcel that now comprises the Project Site. By purchasing the parcel, CHW was able to expand the proposed development to the entire Site, "squaring off" the Site. On September 19, 2025, CHW conveyed the parcel to the City at no cost with the intent that it be included in the overall site plan. On February 25, 2025, the City Council adopted Resolution No. 2025-038, which granted the City Manager the authority to adjust the lot lines to incorporate the new parcel into the City’s existing parcels as part of what comprises the Project Site. At the same meeting, the City Council also abandoned an alleyway which had bisected the Site and made it infeasible to construct the project. At the October 28, 2025 City Council meeting, the City Council approved the declaration of the parcel at APN 010-121-006 as exempt surplus so it could be incorporated into the project Site.

Subsequent to this declaration, the lot lines were adjusted to include the newly acquired parcel, resulting in two parcels (which together comprise the Project Site) that correspond to each of the two developments.

Formation of Single-Asset
Entities
The formation of single-asset entities to develop affordable rental projects is common and customary. Consistent with this approach, CHW has created and will be general partner of two entities. Each entity will develop one of the two parcels, with the primary differences being (1) the financing used on the project (4% vs. 9% tax credits) and (2) the required affordability levels as a result of that financing with higher value tax credits requiring greater levels of affordability. CHW applied to the California Tax Credit Allocation Committee for tax credits for each portion of the Site and was awarded both 4% and 9% tax credits. That portion of the Project Site that will be financed in part with 4% tax credits will be developed by Pacific Street Housing Four, LLP (Housing Four). Subject to the satisfaction of conditions precedent showing readiness to proceed, the City will lease a portion of the Project Site to Housing Four. That portion of the Site that will be financed in part with 9% tax credits will be developed by Pacific Street Housing Nine, LLP (Housing Nine). Subject to the satisfaction of conditions precedent showing readiness to proceed, the City will lease a portion of the Site to Housing Nine. Each separate LLP will be responsible for the financing, development, and operation of rental housing on its respective project independent of the other LLP. The City’s original $2,600,000 loan commitment is carried forward to the Housing Four tax credit project; there is no City loan on the other project.

Separate Affordable Housing
Agreements
As a result of the single-asset entity structure, a separate agreement is presented for each proposed development: an Amended and Restated Affordable Housing Agreement with respect to Pacific Street Housing Four, LLP 4% tax credit project, and a (new) Affordable Housing Agreement with respect to the Pacific Street Housing Nine, LLP 9% tax credit project.

The two agreements, as proposed, do not change in the aggregate the unit count, the amount 586
of City funds invested (as a loan), or the unit income and affordability levels. The result of the two agreements, if both are implemented, will be the development and operation of two projects which as combined will provide 109 units of affordable housing at the following Area Median Income (AMI) levels:

Unit Type
Number of Units
Size of Unit (Square
Feet)
Affordability Level
1 Bedroom
12 636
30% AMI
1 Bedroom
20 636
50% AMI
1 Bedroom
18 636
60% AMI
2 Bedroom
4 858
30% AMI
2 Bedroom
9 858
50% AMI
2 Bedroom
22 858
60% AMI
3 Bedroom
12 1,075
30% AMI
3 Bedroom
2 1,075
50% AMI
3 Bedroom
10 1,075
60% AMI
For reference, the 2025 AMI in Placer County for a family of 4 is $120,000. Units in this development will be available to housings at the following income levels:
% of Area Median Income

Annual Household Income
30%
$36,240
50%
$60,400
60%
$72,480

The project is fully financed and it is anticipated that construction will begin in early 2026. Staff recommends the City Council approve the two Affordable Housing Agreements.

Fiscal Impact:

There is no direct fiscal impact to the staff recommendation. The $2.6 million loan from the Low- and Moderate-Income Housing Asset Fund (Fund 270) has been appropriated in the Fiscal Years 2025-2027 Operating Budget.

ATTACHMENTS:

1. Resolution A - 4% Project

2. Amended and Restated Affordable Housing Agreement (4% Project)

3. Ground Lease for 4% Project

4. Resolution B - 9% Project

5. Affordable Housing Agreement (9% Project)

6. Ground Lease for 9% Project

7. California Health and Safety Code 33433 Report

8. Site Plan
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Resolution No. 2025- November 18, 2025 Page 1 of 6
1 RESOLUTION NO. 2025-

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ROCKLIN

APPROVING AN AMENDED AND RESTATED AFFORDABLE HOUSING

AGREEMENT BY AND BETWEEN THE CITY AND PACIFIC STREET
HOUSING ASSOCIATES FOUR, L.P., A CALIFORNIA LIMITED PARTNERSHIP

WHEREAS, the City of Rocklin ("City") previously established a redevelopment agency within the corporate limits of the City, which redevelopment agency was known as the "Rocklin Redevelopment Agency" (the "Former Agency"); and WHEREAS, in connection with the exercise of its public functions, including utilizing certain revenues of the Former Agency to promote affordable housing, the Former Agency established and maintained a low and moderate income housing fund (the "LMIHF"); and
WHEREAS, the State of California eliminated all redevelopment agencies within the State, including without limitation the Former Agency. In connection with activities related to the dissolution of the Former Agency, t he City was designated as the housing successor entity to the Former Agency related to affordable housing; the City received the LMIHF moneys as well as certain land which had been acquired by the Fonner Agency, including without limitation certain land lo cated generally at Pacific, Oak and Pine, and is more particularly described in the "Affordable Housing Agreement" as defined below; that property is referred to herein as the "Original Property"; and WHEREAS, the City has desired to attract an experienced developer and operator of affordable rental housing to accomplish the development of the Original Property for affordable rental housing; and
WHEREAS, as part of the efforts of the City with regard to the Original Property, the City issued a notice of availability as to the Original Property and conducted further efforts in furtherance of California laws and regulations pertaining to the disposition of surplus property; and
WHEREAS, after various proposals were evaluated, the City identified Community HousingWorks, a California nonprofit public benefit corporation (" CHW") as the respondent with the highest number of proposed units and deepest levels of affordability, and staff entered into negotiations toward an agreement pr oviding for the disposition of the Original Property and its operation for affordable rental housing purposes; and WHEREAS, the City and CHW entered into an agreement entitled “Affordable Housing Agreement”, dated as of November 8, 2022 (the “Original Agre ement”) under which it was contemplated that the City would ground lease the Original Property to CHW or one or more subsidiaries of CHW upon which the construction of improvements dedicated to affordable rental housing to households of limited income will be accomplished on the Original Property. The Original Agreement included a commitment of certain moneys previously committed by the City as such commitment was made by 588
Resolution No. 2025- November 18, 2025 Page 2 of 6
1 letter in May of 2022 (the “Original Funding Commitment”); and WHEREAS, subsequent to entering into the Original Agreement, CHW provided a proposal under which property generally conforming to the Original Property would be divided into two portions, an approximately 0.42 acre parcel (the “Portion A Site”) and a second area comprised of approximately 2.51 acres (the “Portion B Area”). CHW created two separate entities, with the first (Pacific Street Housing Associates Four, L.P., a California limited partnership [herein the “4% Developer” ]) to develop an affordable housing project on the Portion A Site, and a second entity (Pacific Street Housing Associates Nine, L.P., a California limited partnership [herein, the “9% Developer”]) to develop the Portion B Area; and
WHEREAS, under the Original Agreement, it was contemplated that CHW would apply for and secure a commitment of federal low income housing tax credits (“Tax Credits”) for each of the Portion A Site and the Portion B Area; and WHEREAS, the 4% Developer has proposed to City to enter into an agreement with City entitled “Amended and Restated Affordable Housing Agreement” (the “Amended Agreement”) in the form submitted herewith; and
WHEREAS, under the Amended Agreement, the 4% Developer would construct improvements referenced in the Amended Agreement (including without limitation all requirements under land use approvals by City (whether made heretofore or hereafter) and to construct fifty (50) rental housing units thereon, all of which would be restricted to households of limited income as more particularly set forth in the Amended Agreement ; and
WHEREAS, the Original Agreement shall be superseded by the Amended Agreement; and
WHEREAS, the Amended Agreement provides for City to make a loa n to the 4% Developer (the “City Loan”) as more particularly set forth in the Amended Agreement; the City Loan would be repayable from "Residual Receipts" as more fully set forth in the Amended Agreement; and
WHEREAS, the Amended Agreement furthers the affordable housing goals of the Former Agency as well as the affordable housing goals of the City as it will facilitate the creation of affordable rental housing; and
WHEREAS, the Legislature declares in Health and Safety Code Section 36000, et seq., that new forms of cooperation with the private sector, such as leased housing, disposition of real property acquired through redevelopment, development approvals, and other forms of housing assistance may involve close participation with the private sector in meeting housing needs, without amounting to development, construction or acquisition of low rent housing projects as contemplated under Article XXXIV of the State Constitution; and
WHEREAS, Health and Safety Code Section 37001.5 provides that a public body 589
Resolution No. 2025- November 18, 2025 Page 3 of 6
1 does not develop, construct or acquire a low rent housing project under Article XXXIV of the State Constitution when the public body provides assistance to a low rent housing project and monitors construction or rehabilitation of the project to the extent of carrying out routine governmental functions, performing conventional activities of a lender, and imposing constitutionally mandated or statutorily authorized conditions accepted by a grantee of assistance; and
WHEREAS, under the Amended Agreement, the City would provide limited financing for the Project, would act as the local land use authority, and would impose restrictions on incomes and rents consistent with the requirements of the sources of the funding that will be utilized by the City; and
WHEREAS, the Amended Agreement provides for assistance by the City to the Project, and the City's monitoring of construction of the Project to the extent of carrying out routine governmental functions, performing conventional activities of a lender, and imposing constitutionally mandated or statutorily authorized conditions accepted by a grantee of assistance; and

WHEREAS, subsequent to the approval of the Original Agreement, State law has been amended to the effect that affordable housing projects funded in whole or in part using Tax Credits are exempt from the requirement of obtaining Article XXXIV approval; and
WHEREAS, under the Amended Agreement, the 4% Developer shall lea se the Project A Site from the City at rent described in a report to the City and City Council concerning the Amended Agreement (the "Report"); the Report, which has been on file with the City Clerk prior to the meeting at which the Amended Agreement is to be considered, contains information similar to that described in Section 33433 of the California Health and Safety Code. The financial participation by the City under the Amended Agreement is in consideration of the particular uses required by the Amended Agreement to be conducted by the 4% Developer on the Project A Site as well as the 4% Developer's undertakings concerning the development and operation of improvements for affordable rental housing; and
WHEREAS, the City, as a municipal corporation and as a housing successor entity, 1s authorized to ground lease the Project A Site on the basis described herein; and
WHEREAS, a public hearing of the City Council on the proposed Agreement was duly noticed substantially in the manner described at Health and Safety Code Sections 33431 and 33433; and
WHEREAS, the proposed Amended Agreement, and a summary report were available for public inspection prior to the public hearing; and WHEREAS, on November 18, 2025, the City Council held a public hearing on the proposed Amended Agreement, at which time the City Council reviewed and evaluated 590
Resolution No. 2025- November 18, 2025 Page 4 of 6
1 all of the information, testimony, and evidence presented during the public hearing; and WHEREAS, all actions required by all applicable law with respect to the proposed Agreement have been taken in an appropriate and timely manner; and WHEREAS, the California Environmental Quality Act (Section 21000, et. seq. of the California Public Resources Code, hereafter "CEQA") requires analysis of agency approvals of discretionary "projects". Under Section 15378 of the California Code of Regulations, Title 14, Division 6, Chapter 3 (“CEQA Guidelines"), a "project" may include "the whole of an action, which has a potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment"; and
WHEREAS, City staff has reviewed the proposed Amended Agreement in relation to the provisions of the California Environmental Quality Act (CEQA) and has determined that the approval of the Amended Agreement is exempt from additional environmental processing at this time in view of the rationale provided below; and WHEREAS, the City Council have duly considered all of the terms and conditions of the proposed Agreement and believes that the development of the Project A Site pursuant to the Amended Agreement is in the best interests of the City of Rocklin and the health, safety, and welfare of its residents, and in accord with the public purposes and provisions of applicable state and local laws and requirements.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF ROCKLIN DOES RESOLVE AS FOLLOWS:

Section 1. The proposed Amended Agreement is not subject to review under CEQA pursuant to CEQA Guidelines Sections 15060(c)(2) and 15061 (b)(3) of the California Does of Regulations, Title 14, Division 6, Chapter 3 ("CEQA Guidelines") as the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment and there is no possibility the activity in question may have a significant effect on the environment.

Section 2. The City Council hereby determines that the assistance to be provided pursuant to the Amended Agreement does not constitute development, construction or acquisition of a low-rent housing project within the meaning of Article XXXIV of the State Constitution. This Resolution is hereby deemed to constitute a final approval of a proposal which may result in housing assistance benefiting persons of low income, within the meaning of Health and Safety Code Section 36005 in the event an exemption based upon use of Tax Credits in funding a housing project is for any reason inapplicable.

The City Council hereby determines, in the alternative, that the proposed project is exempt from the application of Article XXXIV based upon the circumstances that the proposed project is to be funded in whole or in part utilizing Tax Credits.

Section 3. The City Council finds and determines that the commitment of City funding to the extent provided under the Amended Agreement is a continuation of the 591
Resolution No. 2025- November 18, 2025 Page 5 of 6
1 moneys committed by the Original Funding Commitment, which Original Funding Commitment has remained in effect since it was first made.

Section 4. The City Council finds and determines th at, based upon substantial evidence provided in the record before it, the consideration for the City's disposition of the Project A Site by lease pursuant to the terms and conditions of the Amended Agreement is not less than the fair reuse (lease) value at the use and with the covenants and conditions and development costs authorized by the Amended Agreement.

Section 4. The City Council finds and determines that the statements set forth in the preceding Recitals hereof are true and correct.

Section 5. The City Council approves the Amended Agreement in substantially the form presented to the City Council, subject to such revisions as may be made by the City Manager of the City or the City Manager's design ee. A copy of the Amended Agreement when executed by the City shall be placed on file in the office of the City Clerk.

Section 6. The City Manager, or the City Manager's designee, is hereby authorized to execute the Amended Agreement as well as instruments necessary or convenient to implement its terms, and to approve all financial transactions, budgets, and appropriations needed to carry out the financing in connection with the Amended Agreement in accordance with the law and City policy is hereby authorized to approve all financial transactions, budgets, and appropriations needed to carry out the financing in connection with the Amended Agreement in accordance with the law and City policy.

PASSED AND ADOPTED this 18th day of November, 2025, by the following vote:

AYES: Councilmembers
NOES: Councilmembers:

ABSENT: Councilmembers:

ABSTAIN: Councilmembers:

Jill Gayaldo, Mayor

ATTEST:

Avinta Singh, City Clerk

592
Resolution No. 2025- November 18, 2025 Page 6 of 6
1 STATE OF CALIFORNIA )

COUNTY OF PLACER )

CITY OF ROCKLIN )

I, Avinta Singh, City Clerk of the City of Rocklin, do hereby certify that the foregoing Resolution No. 2025-___ was introduced and adopted at a regular meeting provided by law of the City Council of the City of Rocklin held on the 18th day of November, 2025, by the following vote of the members thereof:

AYES:

NOES:

ABSENT: ::

ABSTAIN:

593

Rocklin CHW Site A Portion, v3

AMENDED AND RESTATED AFFORDABLE HOUSING

AGREEMENT
by and between the

CITY OF ROCKLIN
and
PACIFIC STREET HOUSING ASSOCIATES FOUR, L.P.,
a California limited partnership
(Site A: 4% Tax Credits)

594

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Rocklin CHW Site A Portion, v3

TABLE OF CONTENTS
Page

1. DEFINITIONS AND INTERPRETATION .............................................................................. 2

1.1 Defined Terms. ............................................................................................................. 2

1.2 Singular and Plural Terms. ......................................................................................... 15

1.3 References and Other Terms ....................................................................................... 15

1.4 Exhibits Incorporated .................................................................................................. 15

1.5 Representations and Warranties .................................................................................. 15

1.6 Condition of the Portion A Site................................................................................... 17

2. THE PORTION A SITE, SCOPE OF DEVELOPMENT AND SCHEDULE OF PERFORMANCE.................................................................................................................... 20

2.1 The Portion A Site ...................................................................................................... 20

2.2 Scope of Development ................................................................................................ 20

3. DISPOSITION OF THE PORTION A SITE .......................................................................... 20

3.1 Tentative Map and Final Map ..................................................................................... 20

3.2 Lease of the Portion A Site ......................................................................................... 20

3.3 Escrow ......................................................................................................................... 21

3.4 Review of Title ........................................................................................................... 23

3.5 Title Insurance ............................................................................................................ 24

3.6 Financing Package ...................................................................................................... 24

4. CONDITIONS TO DEVELOPER POSSESSION OF THE PORTION A SITE ................... 24

4.1 City Conditions Precedent .......................................................................................... 24

4.2 Developer Conditions Precedent ................................................................................. 26

5. CITY LOAN PROVISIONS ................................................................................................... 27

5.1 Loan Amounts ............................................................................................................. 27

5.2 Interest ......................................................................................................................... 27

5.3 Use of City Loan ......................................................................................................... 27

5.4 Security; Subordination .............................................................................................. 28

5.5 Repayment .................................................................................................................. 29

5.6 Conditions Precedent to Disbursement of City Loan .................................................. 29

5.7 Non-Recourse Obligation ........................................................................................... 30

6. SCOPE OF DEVELOPMENT; INSURANCE AND INDEMNITY, FINANCING .............. 30

6.1 Scope of Development ................................................................................................ 30

6.2 Time of Performance; Progress Reports ..................................................................... 32

6.3 Cost of Development .................................................................................................. 32

6.4 City Loan .................................................................................................................... 32

6.5 Insurance Requirements .............................................................................................. 33

6.6 Obligation to Repair and Restore Damage Due to Casualty ....................................... 33

6.7 Indemnity .................................................................................................................... 33

6.8 Rights of Access ......................................................................................................... 34

6.9 Compliance With Laws ............................................................................................... 35

6.10 Nondiscrimination in Employment ............................................................................. 36 595

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6.11 Taxes and Assessments ............................................................................................... 36

6.12 Liens and Stop Notices ............................................................................................... 36

6.13 Certificate of Completion ........................................................................................... 36

6.14 Further Assurances ...................................................................................................... 37

6.15 Financing of the Improvements .................................................................................. 37

6.16 Holder Not Obligated to Construct Improvements ..................................................... 42

6.17 Notice of Default to Mortgagee or Deed of Trust Holders; Right to Cure ................. 42

6.18 Failure of Holder to Complete Improvements ............................................................ 42

6.19 Right of City to Cure Mortgage or Deed of Trust Default .......................................... 43

6.20 Mechanics of Disbursement of the City Loan Amount .............................................. 44

6.21 Cost Savings Obligation; Excess Tax Credits Obligation .......................................... 45

7. COVENANTS AND RESTRICTIONS .................................................................................. 46

7.1 Use Covenants ............................................................................................................ 46

7.2 Affordable Housing Requirements ............................................................................. 46

7.3 Verifications ................................................................................................................ 48

7.4 [Reserved] ................................................................................................................... 50

7.5 Maintenance of the Portion A Site .............................................................................. 50

7.6 Nondiscrimination Covenants ..................................................................................... 50

7.7 Effect of Violation of the Terms and Provisions of this Agreement After Completion of Construction ........................................................................................ 51

8. DEVELOPER’S GENERAL REPRESENTATIONS AND WARRANTIES ........................ 51

8.1 Formation, Qualification and Compliance .................................................................. 51

8.2 Execution and Performance of Project Documents .................................................... 52

8.3 Covenant Not to Transfer Except in Conformity ........................................................ 52

9. DEFAULTS, REMEDIES, AND TERMINATION ............................................................... 52

9.1 Default Remedies ........................................................................................................ 52

9.2 Institution of Legal Actions ........................................................................................ 53

9.3 Termination by Developer .......................................................................................... 53

9.4 Termination by City .................................................................................................... 53

9.5 Acceptance of Service of Process ............................................................................... 54

9.6 Rights and Remedies Are Cumulative ........................................................................ 54

9.7 Inaction Not a Waiver of Default ................................................................................ 54

9.8 Applicable Law ........................................................................................................... 54

9.9 Covenant Provisions; Certain Amendments ............................................................... 54

9.10 Enforced Delay; Extension of Times of Performance ................................................ 55

9.11 Transfers of Interest in Agreement or of the Portion A Site ....................................... 55

9.12 Non-Liability of Officials and Employees of City ...................................................... 57

9.13 Relationship Between City and Developer ................................................................. 57

9.14 City Approvals and Actions ........................................................................................ 57

9.15 Real Estate Brokers ..................................................................................................... 57

9.16 Attorneys’ Fees ........................................................................................................... 57

9.17 Non-recourse Liability of Developer .......................................................................... 58

10. MISCELLANEOUS ................................................................................................................ 58

10.1 Obligations Unconditional and Independent............................................................... 58

10.2 Notices ........................................................................................................................ 58 596

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10.3 Survival of Representations and Warranties ............................................................... 59

10.4 No Third Parties Benefited Except for City; AB 987 ................................................. 59

10.5 Binding Effect; Assignment of Obligations ................................................................ 60

10.6 Option ......................................................................................................................... 60

10.7 Mandatory Assignment ............................................................................................... 62

10.8 Counterparts ................................................................................................................ 62

10.9 Prior Agreements; Amendments; Consents ................................................................ 62

10.10 Governing Law ........................................................................................................... 62

10.11 Severability of Provisions ........................................................................................... 63

10.12 Headings 63

10.13 Conflicts 63

10.14 Time of the Essence .................................................................................................... 63

10.15 Conflict of Interest ...................................................................................................... 63

10.16 Cure by Limited Partner .............................................................................................. 63

10.17 Warranty Against Payment of Consideration ............................................................. 63

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ATTACHMENTS
ATTACHMENT NO. 1 PORTION A SITE MAP
ATTACHMENT NO. 2 LEGAL DESCRIPTION OF THE PORTION A SITE ATTACHMENT NO. 3 SCHEDULE OF PERFORMANCE
ATTACHMENT NO. 4 CERTIFICATE OF CONTINUING PROGRAM COMPLIANCE ATTACHMENT NO. 5 NOTICE OF AFFORDABILITY RESTRICTIONS
ATTACHMENT NO. 6 CITY LEASE
ATTACHMENT NO. 7 CALCULATION OF AFFORDABLE RENTS
ATTACHMENT NO. 8 REQUEST FOR NOTICE OF DEFAULT
ATTACHMENT NO. 9 SCOPE OF DEVELOPMENT
ATTACHMENT NO. 10 CERTIFICATE OF COMPLETION
ATTACHMENT NO. 11 CITY REGULATORY AGREEMENT
ATTACHMENT NO. 12 INCOME VERIFICATION
ATTACHMENT NO. 13 CITY PROMISSORY NOTE
ATTACHMENT NO. 14 CITY DEED OF TRUST
ATTACHMENT NO. 15 INSURANCE DURING REMAINDER OF LEASE TERM ATTACHMENT NO. 16 INSURANCE DURING CONSTRUCTION
ATTACHMENT NO. 17 MAP OF THE PORTION B AREA
ATTACHMENT NO. 18 MAP OF THE ADJACENT CITY PARKING AREA

598

Rocklin Site A Portion, v3

AMENDED AND RESTATED AFFORDABLE

HOUSING AGREEMENT
This AMENDED AND RESTATED A FFORDABLE HOUSING AGREEMENT (the “Agreement”), dated, for identification purposes only, as of ________ __, 202 5 (the “Date of Agreement”), is entered into by and between the CITY OF ROCKLIN , a municipal corporation (“City”), and PACIFIC STREET HOUSING ASSOCIATES FOUR, L.P. , a California limited partnership (“Developer”).

R E C I T A L S
A. City, as part of its functions as a general law city duly organized and existing under and by virtue of the laws of the State of California and in connection with its municipal code (the “City Code”), is authorized to promote the provision of affordable housing for all income segments of the community. Pursuant to the City Code and resolutions adopted pursuant thereto, City is authorized to defer receipt of all or a portion of its development impact fees chargeable in relation to various projects.

City is authorized to enter into agreements in connection therewith.

B. City previously activated the Rocklin Redevelopment Agency, a public body, corporate and politic (the “Redevelopment Agency”); the Redevelopment Agency operated under the California Redevelopment Law, Part 1 of Division 24 of the Health and Safety Code (the “Redevelopment Law”).

C. City is the housing successor entity to the Redevelopment Agency and in such capacity acquired the “ Portion A Site ” (as defined below) in connection with the dissolution of the Redevelopment Agency.

D. The Redevelopment Plan for the Rocklin Redevelopment Project (herein, the “Redevelopment Project”) was adopted by Ordinance No. 549 by the City Council of the City of Rocklin on June 10, 1986, and was subsequently amended (as amended, the “Redevelopment Plan”).

The Redevelopment Plan, as amended, is on file with City as a public record.

E. Prior to the Date of Agreement (as defined herein), City acquired certain real property consisting of approximately 0.42 acres (the “Portion A Site ”) and an additional approximately 2.51 acres (defined hereinbelow as the “Portion B Area ”) located within the Project Area and within the corporate limits of City. The Portion A Site is depicted on the “ Portion A Site Map” (Attachment No. 1 hereto). The legal description of the Portion A Site is attached hereto as Attachment No. 2. The Portion B Area is depicted on the “Map of the Portion B Area”, Attachment No. 17 hereto.

F. Developer is experienced in the development and operation of affordable multi-family housing.

G. City and Community HousingWorks, a California nonprofit public benefit corporation (“CHW”, as also defined below) and City previously entered into an unrecorded agreement entitled “Affordable Housing Agreement” dated as of October 17, 2022 (the “Original Agreement”). A copy of the Original Agreement is on file with City as a public record. Under the Original Agreement, City committed the sum of Two Million Six Hundred Thousand Dollars ($2,600,000.00) in funding which was to be a loan in support of construction of improvements contemplated under the Original Agreement.
599

2 Rocklin Site A Portion, v3
H. Under the Original Agreement, CHW proposed that City would transfer a ground leasehold interest in each of the Portion A Site the Portion B Area to CHW or one or more single asset entities to be formed by CHW and thereafter approved by City, with the City ground leasing either the Portion A Site and the Portion B Area as a whole or in two parts, whereupon CHW or such single asset entities as shall have been approved in writing by City would be required to develop a designated number of those dwelling units, as more particularly set forth herein, to be rented at “Affordable Rent” and in conformity with the “Prescribed Income Levels” throughout the “Required Covenant Period” (as those terms were defined in the Original Agreement).

I. Subsequent to the Original Agreement, CHW applied for a preliminary reservation of 4% federal low income housing tax credits as generally provided for under Section 42 of the Internal Revenue Code with respect to the development of the Portion A Site; CHW additionally applied for a preliminary reservation of 9% federal low income housing tax credits with respect to the development of the Portion B Area. As contemplated under the Original Agreement and as continues to be the case, CHW intends (and Developer concurs) that the Portion A Site and the Portion B Area , respectively, shall be developed by different development entities, each an affiliate (including single asset entities) of Developer. It is contemplated that the financing for each of the development of the Portion A Site and the Portion B Area will be separate and without cross defaults.

J. By its approval of this Agreement, City approves the Developer as a single asset entity having been formed by CHW and which will dev elop the Portion A Site as provided under this Agreement.

K. Subject to the satisfaction of the applicable conditions in this Agreement, City will make available the aggregate amount of the City Loan (as defined below) to Developer in order to defray a portion of the cost of improvements to the Portion A Site as provided for by this Agreement.

L. In the event the financing plan hereafter submitted by Developer with respect to some or all of the Improvements includes the use of new multifamily housing bonds, which is anticipated to be the case, the issuer shall be the City or another governmental entity designated for such purpose by City acting at its sole discretion. Any issuance of bonds by City shall be accomplished in conformity with the City’s pra ctices and procedures for conduit financings and in strict conformity with this Agreement.

M. This Agreement is in the vital and best interest of the City of Rocklin, California, and the health, safety and welfare of its residents and furthers the public policies of City.

NOW, THEREFORE , for and in consideration of the mutual promises, covenants, and conditions herein contained, the parties hereto agree as follows:

1. DEFINITIONS AND INTERPRETATION

1.1 Defined Terms. As used in this Agreement (and in all other Project Documents, unless otherwise defined), the following capitalized terms shall have the following meanings:
“Adjacent City Parking Area ” means that certain area referenced in the Scope of Development and more fully described in the Map of the Adjacent City Parking Area. 600

3 Rocklin Site A Portion, v3
“Affiliated Person ” means, when used in reference to a specific person, any person that directly or indirectly controls or is controlled by or un der common control with the specified person, any person that is an officer or director o f a trustee of, or a general partner, managing member or operator in, the specified person or of which the specified person is an officer, director, trustee, general partner or managing member, or any person that directly or indirectly is the beneficial owner of ten percent (10%) or more of any class of the outstanding voting securities of the specified person. “Affordable Rent” has the following meaning: For an Extreme ly Low Income Household, Affordable Rent means a monthly rent which does not exceed one twelfth (1/12th) of thirty percent (30%) of thirty percent (30%) of the Median Income for the Area for a household size appropriate to the Unit. For a Very Low Income Household, Affordable Rent means a monthly rent which does not exceed one twelfth (1/12th) of thirty percent (30%) of fifty percent (50%) of the Median Income for the Area for a household size appropriate to the Unit. For a Lower Income Household, Afforda ble Rent means a monthly rent which does not exceed one twelfth (1/12th) of thirty percent (30%) of sixty percent (60%) of the Median Income for the Area for a household size appropriate to the Unit. The maximum monthly rental amount of the Units shall be adjusted annually by the formula set forth above upon the promulgation of revised Placer County median income figures by regulation of the California Department of Housing and Community Development. Actual rent charged may be less than such maximum rent a cost not in excess of the lesser of (i) that rent which may be charged the applicable Eligible Person or Family pursuant to Section 50053 of the California Health and Safety Code and (ii) the limits as set forth in this Agreement. Notwithstanding the foregoing, in the event a reservation of Tax Credits is obtained for the Project, affordable rents, including a reasonable utility allowance, shall not exceed the rent prescribed by deed restrictions or regulatory agreements imposed by TCAC. “Allowable Closing Costs ” means actual, reasonable costs of escrow for the Closing, including but not limited to any payable transfer taxes, recording fees, notary fees, the premium for the City Loan Policy, and all other charges paid which are customarily paid for similar transactions in the County.
“Applicable Federal Rate” means the interest rate set by the United States Treasury from time to time for the purpose of determining applicable Low Income Housing Tax Credit interest rates. The Applicable Federal Rate is published by the Internal Revenue Service in monthly revenue rulings. “Applicable Interest Rate” means the following rates: (a) as to amounts paid when due, three percent (3%) simple interest per annum, and (b) as to amounts not paid when due, the lesser of (i) ten percent (10%) per annum, compounded annually, and (ii) the maximum rate permitted by applicable law.
“Applicable Percentage of Residual Receipts ” means fifty percent (50%) of Residual Receipts; provided that if public agencies other than the Ci ty infuse moneys into the Project on a residual receipts loan basis, the percentage payable to the City will be subject to adjustment by City to reflect the ratable contribution by such other entities. “Approved Assignee” means such entity, if any, as app roved by City (at its discretion) as to any assignment of any interest in Developer (or constituent entity thereof). “Approved Construction and/or Permanent Lender” means Cedar Rapids Bank and Trust Company, an Iowa state -chartered banking corporation (“CR BI”) or one or more entities included under the definition of Approved Construction Lender, an Institutional Lender, or any other lender 601

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approved by the City Manager. Each of California Community Reinvestment Corporation and the County of Placer acting thr ough the Health and Human Services Agency is an Approved Permanent Lender.
“Area” means Placer County, or such area including Placer County as may be periodically defined by HUD.
“Audit” is defined in Section 6.21 hereof.
“Audited Financial Statement ” means an audited financial statement, including without limitation a profit and loss statement, generated by Leaf & Cole, LLP, or another third party certified public accountant acceptable to City in its reasonable discretion, showing, for the previous Lease Year, on a monthly basis and in an easily readable format, Gross Revenues, Operating Expenses, Debt Service, Operating Reserve, Capital Replacement Reserve, General Partner Fee, Limited Partner Fee and Residual Receipts.
“Bank Deed of Trust ” means a deed of trust, among one or more Approved Construction and/or Permanent Lender , as beneficiary and Developer as trustor and a trustee, which may be an affiliate of the holder of the Bank Deed of Trust, in connection with the construction loan provided by an Approved Construction Lender, and upon the take out of the construction loan, a deed of trust by an Approved Permanent Lender to Developer , as well as any swap deed of trust entered into in connection with the Primary Permanent Loan which does not include cross-collateralization or a change in the security.
“Base Pro Forma” means a pro forma dated as October 30, 2025 concerning the Development.

The Base Pro Forma is on file with the City.
“Basic Concept Drawings” is described in Section 6.1 hereof. “Bond Counsel” means such counsel as shall be selected by City at its discretion for all purposes associated with this Agreement and the implementation hereof. “Bond Regulatory Agreement ” means the regulatory agreement, as prepared by Bond Counsel, which it is c ontemplated may be required to be recorded against the Portion A Site with respect to the issuance of new multifamily housing bonds in the event an allocation is obtained for the Improvements on the Portion A Site from CDLAC and Bonds are used in connection with the financing of such improvements. The Bond Regulatory Agreement shall include affordability restrictions not less restrictive than those set forth in the City Regulatory Agreement. “Bond Rules” means Section 103(b) of the Internal Revenue Code, the rules and regulations applied by CDLAC in connection with the private activity bond allocation or the issuance of bonds thereunder and as set forth in the indenture of trust (or similar instrument approved for such purpose by City) in connection with the issuance of the Bonds.
“Bonds” means new multifamily conduit revenue bonds issued in connection with the Improvements (or portions thereof) by City.
“Building Permit ” means the building permit(s) issu ed by City and required for the Improvements.
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“Calculation of Affordable Rents” means Attachment No. 7 to this Agreement. “CDLAC” means the California Debt Limit Allocation Committee. “Capital Replacement Reserve” means a reserve fund to be established by the Lessee under the City Lease as a capital reserve for the Improvements in the amount established therefor by the Lease. To the extent Developer is required to maintain a Capital Replacement Reserve by any Approved Construction and/or Permanent Lender or Investor , Developer shall receive a credit hereunder for such amounts maintained by it in compliance with such Approved Construction and/or Permanent Lender capital replacement reserve requirement. “Certificate of Completion” means Attachment No. 10 to this Agreement. “Certificate of Continuing Program Compliance ” means the Certificate to be filed by Developer or its property manager on behalf of Developer with City, which Certificate shall be substantially in the form attached hereto as Attachment No. 4. “Chargeable Reserves ” means each of the following, within the respective parameters therefor set forth in the City Lease: (i) Capital Replacement Reserve; and (ii) Operating Reserve. “CHW”, as defined above, means Community HousingWorks, a California nonprofit public benefit corporation.
“City,” as defined in the first paragraph hereof, means the City of Rocklin, a municipal corporation.
“City Code,” as defined in the Recitals hereto, is the Municipal Code of the City of Rocklin as may be amended from time to time and includes, without limitation, the Uniform Codes. “City Conditions Precedent” is set forth in Section 4.1 hereof. “City Deed of Trust ” means the deed of trust that will encumber Developer’s leaseh old interest in the Portion A Site and fee interest in the Improvements to secure repayment of the City Loan as evidenced by the City Promissory Note, substantially in the form attached hereto as Attachment No. 14.
“City Documents” means, collectively, this Agreement, the City Promissory Note, the City Deed of Trust, the City Lease, the City Regulatory Agreement, and all other documents required to be executed by Developer in connection with the transaction contemplated by this Agreement. “City Escrow” is described in Section 3.3 hereof.
“City Fees ” means fees charged by the City in connection with the construction of the Improvements where such fees are not collected by City on behalf of another governmental agency.

City Fees includes, without limitation, City Impact Fees, building permit fees and inspection fees. “City Impact Fees” means those facility fees, road improvement fees, and other fees identified by City as development impact fees, including street improvements and/or street im provement fees, required by City and retained by City in connection with the development of the Project. 603

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“City Lease” means a ground lease in the form of Attachment No. 6 to this Agreement, which shall grant Developer a leasehold interest in the Portion A Site and a fee interest in the Improvements. “City Loan” means a loan in the original principal amount of the City Loan Amount to be made from City to Developer pursuant to the terms of this Agreement. “City Loan Amount” means Two Million Six Hundred Thousand Dollars ($2,600,000.00). In addition, and as a condition to the disbursement of any portion of the City Loan Amount, City (upon consultation with a qualified land economist of its choosing) shall have first concluded that the entirety of the City Loan Amount is supportable as going toward the financing of units for Extremely Low Income Households.
“City Loan Policy” is defined in Section 3.5(b) hereof. “City Manager” means the City Manager of City or his or her designee or delegate. “City Promissory Note” means the promissory note that will evidence Developer’s obligation to repay the City Loan as set forth in this Agreement, substantially in the form attached hereto Attachment No. 13.
“City Regulatory Agreement” means Attachment No. 11 to this Agreement. “Closing” is defined in Section 3.3.4 of this Agreement. “Commencement Date of the City Lease” shall have the meaning established therefor in the City Lease.
“Cost Overrun Amounts” means amounts incurred and expended by Developer in connection with construction under this Agreement to the extent that: (i) total construction and demolition costs exceed the amounts set forth therefor in the Base Pro Forma; (ii) such amounts have not been defrayed by moneys provided by City; and (iii) the City Manager, acting in good faith and upon consultation with Developer, confirms that such amounts were reasonably incurred and were not unreasonable as to amount.
“Cost Savings” is defined in Section 6.21 hereof.
“County” means the County of Placer, California.
“Date of Agreement” means ________ __, 2025.
“Debt Service ” means required debt service payments for the Primary Construction Loan and/or the Primary Permanent Loan including the funding obligations in respect of all reserves or escrows required thereunder and scheduled payments as approved as part of the Final Financing Package.
“Default” is defined in Section 7.1 hereof.
“Deferred Developer Fee ” means that portion of the Developer Fee for which payment to CHW is deferred. The amount of the Deferred Developer Fee shall be finally determined in connection with the Final Financing Plan.
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“Developer” means Pacific Street Housing Associates Four, L.P. , a California limited partnership.
“Developer Area” means that certain area conveyed by CHW to City during 2025. “Developer Conditions Precedent” is defined in Section 4.2 hereof. “Developer Contracting Parties” is defined in Section 1.6.1 hereof. “Developer Fee(s)” means the sum of such amounts delineated as developer fees in the Base Pro Forma, but not to exceed those amounts designated by TCAC as developer fees. “Developer Percentage” means fifty percent (50%) of Residual Receipts. “Development” or “Project” means the new apartment complex and associated improvements as required by this Agreement to be: (i) constructed by Developer upon the Portion A Site, with related offsite improvements, as more particularly described in the Scope of Development and (ii) operated as an affordable housing complex in conformity with the City Lease (s), and the City Regulatory Agreement.
“Entitlements” means all development rights as determined under Administrative Determination AD-2025-0004 as approved May 8, 2025 by the Community Development Director of the City of Rocklin (including without limitation all conditions contained therein), and additional and use approvals for the development of the Portion A Site, if any, as may hereafter be approved by the City acting in the exercise of its police power.
“Environmental Laws ” means all la ws, ordinances and regulations relating to Hazardous Materials, including, without limitation: the Clean Air Act, as amended, 42 U.S.C. Section 7401, et seq.; the Federal Water Pollution Control Act, as amended, 33 U.S.C. Section 1251 et seq.; the Resource Conservation and Recovery Act of 1976, as amended, 42 U.S.C. Section 9601, et seq.; the Comprehensive Environment Response, Compensation and Liability Act of 1980, as amended (including the Superfund Amendments and Reauthorization Act of 1986, “CERCLA”), 42 U.S.C.

Section 9601, et seq.; the Toxic Substances Control Act, as amended, 15 U.S.C. Section 2601 et seq.; the Occupational Safety and Health Act, as amended, 29 U.S.C. Section 651, the Emergency Planning and Community Right to Know Act of 1986, 42 U.S.C. Section 11001 et seq.; the Mine Safety and Health Act of 1977, as amended, 30 U.S.C. Section 801 et seq.; the Safe Drinking Water Act, as amended, 42 U.S.C. Section 300f et seq.; all comparable state and local laws, laws of other jurisdictions or orde rs and regulations; and all laws, ordinances, statutes, codes, rules, regulations, orders and decrees of the United States, the State, City, or any other political subdivision in which the Portion A Site is located, and of any other political subdivision, agency or instrumentality exercising jurisdiction over City, Developer, or the Portion A Site. “Escrow Holder ” means Stewart Title Guaranty Company or another mutually acceptable escrow holder.
“Event of Default” has the meaning set forth in Section 9.1 hereof. “Excess Amount” is defined in Section 6.15 hereof.
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“Extremely Low Income Households ” means households earning not greater than thirty percent (30%) of Median Income for the Area pursuant to the Health and Safety Code Section 50106. “Extremely Low Income Unit” means a Unit occupied at Affordable Rent by an Extremely Low Income Household.
“Final Development Budget ” means a detailed enumeration of all projected costs of construction of the Development, including all costs and off -site improvements required to be constructed under this Agreement.
“Final Financing Package” is defined in Section 6.15 hereof. “General Partner” means the general partner of Developer. “General Partner Fee” or “Asset Management Fee” means a fee if charged by the general partner not to exceed the amounts so delineated therefor in the Base Pro Forma; provided that the initial annual amount of such fee shall be limited to increases of three percent (3.0%) annually; provided that the General Partner Fee together with the Limited Partner Fee shall not for any Lease Year exceed the amount permitted under th e City Lease for the Partnership Fees (as such fees are aggregated) . The foregoing shall not limit the amounts which Developer may pay to its General Partner from the Developer Percentage.
“Gross Revenues” shall have the meaning set forth therefor in the City Lease. “Hazardous Material ” or “ Hazardous Materials ” means and include any substance, material, or waste which is or become s regulated by any local governmental authority, including the County, the Regional Water Quality Control Board, the State of California, or the United States Government, including, but not limited to, any material or substance which is: (i) defined as a “hazardous waste,” “acutely hazardous waste,” “restricted hazardous waste,” or “extremely hazardous waste” under Sections 25115, 25117 or 25122.7, or listed pursuant to Section 25140, of the California Health and Safety Code, Division 20, Chapter 6.5 (Haza rdous Waste Control Law); (ii) defined as a “hazardous substance” under Section 25316 of the California Health and Safety Code, Division 20, Chapter 6.8 (Carpenter Presley Tanner Hazardous Substance Account Act); (iii) defined as a “hazardous material,” “h azardous substance,” or “hazardous waste” under Section 25501 of the California Health and Safety Code, Division 20, Chapter 6.95 (Hazardous Materials Release Response Plans and Inventory); (iv) defined as a “hazardous substance” under Section 25281 of the California Health and Safety Code, Division 20, Chapter 6.7 (Underground Storage of Hazardous Substances); (v) petroleum; (vi) asbestos and/or asbestos containing materials; (vii) lead based paint or any lead based or lead products; (viii) polychlorinated biphenyls, (ix) designated as a “hazardous substance” pursuant to Section 311 of the Clean Water Act (33 U.S.C. Section 1317); (x) defined as a “hazardous waste” pursuant to Section 1004 of the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq. (42 U.S.C. Section 6903); (xi) Methyl tert iary Butyl Ether; (xii) defined as “hazardous substances” pursuant to Section 101 of the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. Section 9601, et seq. (42 U.S.C. Section 9601); (xiii) any other substance, whether in the form of a solid, liquid, gas or any other form whatsoever, which by any “Governmental Requirements” (as defined in Paragraph (c) of this Section 308) either requires special handling in its use, transportation, generation, collection, storage, handling, treatment or disposal, or is defined as “hazardous” or harmful to the environment; and/or (xiv) lead based paint pursuant to and defined in the Lead Based Paint Poisoning Prevention Act, Title X of th e 1992 Housing and Community 606

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Development Act, 42 U.S.C. § 4800, et seq., specifically §§ 4821 –4846, and the implementing regulations thereto. Notwithstanding the foregoing, “Hazardous Materials” shall not include such products in quantities below attainme nt levels identified in one or more of the enactments identified above as Governmental Requirements, including those products and amounts as are customarily used in the construction, maintenance, rehabilitation, management, operation and residence of resid ential developments or associated buildings and grounds, or typically used in residential activities in a manner typical of other comparable residential developments, or substances commonly ingested by a significant population living within the Development , including without limitation alcohol, aspirin, tobacco and saccharine.
“Hazardous Materials Contamination” means the contamination (whether presently existing or hereafter occurring) of the improvements, facilities, soil, groundwater, air or other elements on, in, or under the Portion A Site by Hazardous Materials, or the contamination of the buildings, facilities, soil, groundwater, air or other elements on, in or of any other property as a result of Hazardous Materials at any time (whether before or after the Date of Agreement) emanating fr om the Portion A Site.
“HCD” means the Housing and Community Development Department of the State of California.
“Housing Rent” means the total of monthly payments by the tenants of a Unit for (a) use and occupancy for the Unit and facilities associated the rewith, (b) any separately charged fees or service charges assessed by Developer which are required of all tenants of the Units, other than security deposits, (c) a reasonable allowance for utilities not included in (a) or (b) above, including garbage collection, sewer, water, electricity and gas, as determined by regulation of Housing Authority of the County of Placer pursuant to 24 C.F.R. Section 5.600 et seq. or by the California Utility Allowance Calculator as permitted by TCAC, and (d) possessory interest, taxes or other fees or charges assessed for the use of the Units and facilities associated therewith by a public or private entity other than Developer; provided that the rent charged as to any Required Affordable Unit shall not exceed Affordable Rent.
“Improvements” means all of the improvements described in the Scope of Development. “Income Verification” means Attachment No. 12 to this Agreement. “Indemnitees” is defined in Section 1.6.3.
“Investor” means the Developer’s investor limited partner. “Lease Rider” means a lease rider agreement provided by TCAC in a form customarily used by TCAC.
“Lease Year” means the period commencing as of the Commencement Date of the City Lease and ending as of December 31 of that calendar year, then each succeeding ca lendar year thereafter during the Term of the City Lease; provided that the final Lease Year may be a portion of a calendar year.
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“Leasehold Transfer” means the transfer of a leasehold interest in the Portion A Site and fee interest in the Improvements to Developer by the terms of the City Lease upon commencement of the Term of the City Lease.
“Legal Description of the Portion A Site” means Attachment No. 2 to this Agreement. “Lessee” means Developer or other lessee under the City Lease. “Lessee’s Title Policy” is defined in Section 3.5 hereof. “Limited Partner” means NEF Assignment Corporation or its affiliate. “Limited Partner Fee” or “Partnership Management Fee” means fees as so denominated in the Base Pro Forma; provided that such fees may not increas e by more than by three percent (3.0%) annually so long as the Partnership Agreement is in effect ; provided that the General Partner Fee together with the Limited Partner Fee shall not for any Lease Year exceed the amount permitted under this Lease for the Partnership Fees (as such fees are aggregated) . The foregoing shall not limit the amounts which Developer may pay as Limited Partner Fee or Partnership Management Fee from the Developer Percentage.
“Low and Moderate Income Housing Funds” means moneys which were required under the Redevelopment Law to be deposited into a fund created under Health and Safety Code Section 33334.2 and 33334.3.
“Low Income Households” or “Lower Income Households” means households earning not greater than sixty percent (60%) of Median Income.
“Low Income Unit” or “Lower Income Unit” means a Unit occupied at Affordable Rent by a Low Income Household.
“Map of the Adjacent City Parking Area” means Attachment No. 18. “Map of the Portion B Area” means Attachment No. 17.
“Materially Adverse Conditions” are surface or subsurface conditions of the Portion A Site which: (i) are not apparent from a visual inspection of the surface of the Portion A Site ; and (ii) (a) include the presence of Hazardous Materials at the Portion A Site in exce ss of currently applicable levels permitted under federal or state law or regulations, or (b) include the presence of conditions not typically found in properties within City and which a mutually acceptable independent third party geotechnical and/or environmental assessment and remediation firm retained by Developer estimates will increase development costs by over One Hundred Thousand Dollars ($100,000.00). “Maturity Date” has the meaning established therefor in the City Promissory Note. “Median Income” means Median Income for the Area (namely, Placer County), as set forth by regulation of the California Department of Housing and Community Development pursuant to Health and Safety Code Sections 50079.5 and 50105.
“Notice” means a notice in the form prescribed by Section 10.2 hereof. 608

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“Notice of Affordability Restrictions” means Attachment No. 5. “Official Records” means, unless the context otherwise requires, the official land records of the County Recorder of the County of Placer.
“Operating Expenses” has the meaning established therefor in the City Lease. “Operating Reserve” has the meaning set forth therefor in the City Lease. “Partnership Agreement” has the meaning set forth therefor in the City Lease. “Partnership Fees” means the General Partner Fee and the Limited Partner Fee. “Permitted Senior Lien ” means collectively, the deeds of trust securing the Primary Construction Loan and the Primary Permanent Loan.
“Portion A Site” means that real property depicted on the Portion A Site Map and described with greater particularity by the Legal Description of the Portion A Site. “Portion A Site Map” means Attachment No. 1 to this Agreement. The Portion A Site Map depicts the Portion A Site (which is to be developed under this Agreement). “Portion B Area” means that real property depicted on the Map of the Project B Area. “Prescribed Income Levels” means: (i) for six (6) one-bedroom Units, thirty percent (30%) of Median Income; (ii) for two (2) two-bedroom Units, thirty percent (30%) of Median Income; (iii) for six (6) three-bedroom Units, thirty percent (30%) of Median Income; (iv) for seven (7) one-bedroom Units, fifty percent (50%) of Median Income; (v) for four (4) two-bedroom Units, fifty percent (50%) of Median Income; (vi) for two (2) three -bedroom Unit s, fifty percent (50%) of Median Income; (vii) for thirteen (13) one-bedroom Units, sixty percent (60%) of Median Income; (viii) for eight (8) two-bedroom Units, sixty percent (60%) of Median Income; and (ix) for two (2) three-bedroom Units, sixty percent (60%) of Median Income.
“Primary Construction Loan” means, collectively, the mortgage loans and letters of credit obtained by Developer from an Approved Construction Lender. “Primary Permanent Loan” means, collectively, the mortgage loans obtained by Developer from an Approved Permanent Lender in an amount limited to satisfaction of the outstanding balance of the Primary Construction Loan or in an amount in excess of such outstanding balance so long as such excess proceeds are used to pay (or prepay) the Developer Fee, Cost Overrun Amounts and outstanding development costs.
“Principals” means CHW.
“Project Documents” means, collectively, this Agreement, the City Regulatory Agreement, the City Lease , all other Attachments to this Agreement, and any other agreement, document, or instrument that City requires in connection with the execution of this Agreement or from time to time to effectuate the purposes of this Agreement.
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“Reciprocal Easement and Jo int Use Agreement ” means an agreement to be entered into among the Developer, Pacific Street Housing Associates Nine, L.P., a California limited partnership (the “Portion B Entity”), and the City, which shall include provisions satisfactory to City concern ing:
(i) ingress, egress, and access as to the Portion A Site for residents of the Portion B Area; (ii) ingress, egress, and access as to the Portion B Area for the residents of the Portion A Site ; (iii) access of residents of each of the Portion B Area and the Portion A Site to common area facilities including joint use facilities; (iv) access to the manager to be on site at the Portion B Area for residents of the Portion A Site; (v) access to parking for residents of the Portion A Site and residents of th e Portion B Area; (vi) an agreement by City that if the developer of the Portion A Site defaults and the ground lease as to the Portion A Site is terminated, City will make diligent efforts to provide access to residents of the Portion B Area to the Portion A Site; and (vii) a provision that the Reciprocal Easement and Joint Use Agreement may not be amended without the prior written approval of City, which City may grant, conditionally grant, or withhold in its sole discretion. “Recordable Documents” means the following: (i) the City Lease (or a Memorandum thereof prepared by City); (ii) the City Regulatory Agreement; (iii) the Bank Deed (s) of Trust; ( iv) 1-UCC Financing Statement by Developer in favor of an Approved Construction and/or Permanent Lender (as construction lender) for filing as a fixture filing among Official Records; (v) the Notice of Affordability Restrictions; (vi) the City Deed of Trust; and (vii) such other instruments, if any, as shall be approved by City Manager (upon consultation with City’s legal counsel) as necessary or convenient to effectuate and implement the initial financing of the Improvements (and the permanent. “Redevelopment Plan ” means the Redevelopment Plan for the Rocklin Redevelopment Project (the “Redevelopment Project”) first approved by Ordinance No. 549 adopted by the City Council of the City on Ju ne 10, 1986 , as subsequently amended. The Redevelopment Plan , as amended, is on file with City as a public record.
“Refinancing Net Proceeds ” means the proceeds of any refin ancing of any of the Primary Construction Loan or the Primary Permanent Loan or other approved financing secured by interest of Developer in the Portion A Site, net of: (i) the amount of the existing financing which is satisfied out of such proceeds; (ii) reasonable and customary costs and expenses incurred in connection with the refinancing; (iii) the funding of reasonable reserves and costs of improvements to the Portion A Site which constitute the Development, including hard and soft costs to the extent approved in writing by the City Manager prior to the closing of the refinancing; (iv) the balance of loans to the Development made by the Limited Partner(s) of Developer for development or operating deficits, amounts expended to maintain compliance with the Tax Credit Rules, or contributions for capital expenditures in excess of available Project revenues, if any, including interest at the Applicable Federal Rate; (v) the balance, if any, of operating loans or development loans made by the general partners of Developer to the Development, including interest at the Applicable Federal Rate; (vi) payment of unpaid Tax Credit adjustment amounts or reimbursement of Tax Credit adjustment amounts paid by the general partner and/or the guarantors to the Development pursuant to the approved Partnership Agreement, if any; and (vii) the payment to the general partner of Developer of a refinancing fee, which fee is and shall be subject to the approval of the City Manager at the time of each refinancing and which shall not exceed five percent (5%) of the amount of the approved refinancing. “Related Entity ” means CHW, a Principal or an entity in which any interest is held by Developer or one or more of the Principals.
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“Relocation” or “Relocation Laws” means all applicable federal and state relocation laws and regulations, including without limitation, (i) the relocation obligations of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (“URA”), 42 U.S.C. 4201–4655, and the implementing regulations thereto set forth in 49 C.F.R. Part 24, (ii) the California Relocation Assistance Act, Government Code Section 7260, et seq. and the implementing regulations thereto set forth in Title 25, Section 6000, et seq. of the California Code of Regulations, and (iii) any other applicable federal, state or local enactment, regulation or practice providing for relocation assistance, benefits, or compensation for moving and for property interests (including without limitation goodwill and furnishings, fixtures and equipment, and moving expenses), and (iv) any federal law or regulation prohibiting payment of relocation benefits or assistance to persons ineligible for relocation benefits or assistance. City shall be responsib le for any costs or expenses as a result of the application of the Relocation Laws to the Development or this Agreement.
“Reporting Amounts” means the sum of Two Hundred Fifty Dollars ($250.00) per unit per year for each dwelling unit as to which Lessee fa ils to deliver to City, during any Lease Year, a full and adequate report that conforms to Section 33418 of the California Health and Safety Code. “Request for Notice of Default” means an instrument substantially in the form of Attachment No. 8.
“Required Affordable Units” means all of the Units required to be developed on the Portion A Site under this Agreement other than one manager’s unit. The final delineation of affordable units shall be accomplished in connection with approval of the Final Financing Plan (provided that the number of units generated and income levels shall in no event be less beneficial to City than that set forth herein as the Prescribed Income Levels).
“Required Covenant Period” means that eighty-seven (87) year period that is the same as the Term.
“Residual Receipts” for a particular Lease Year means Gross Revenues for the corresponding Lease Year less (i) Debt Service payments made during such Lease Year on the Primary Construction Loan or the Primary Permanent Loan, including pay ments under escrow and reserve provisions thereunder in amounts not in excess of the amounts due and payable during such month (and not including prepayments), and (ii) the sum of Operating Expenses and, to the extent funded, payments made to Chargeable Reserves as made during the corresponding Lease Year, and payments of Deferred Developer Fee as made to CHW and any approved Assignee during the corresponding Lease Year.

All calculations of Residual Receipts shall be made annually, on or before May 15 for the preceding Lease Year, on a cash (and not accrual) basis and the components thereof shall be subject to verification and approval, on an annual basis, based upon conformity with the terms of this AHA and the City Lease, by the City Manager on behalf of the City.
“Schedule of Performance ” means Attachment No. 3 to this Agreement. The Schedule of Performance sets forth the dates by which City and Developer are to perform certain obligations under this Agreement.
“Scope of Development ” means Attachment No. 9 to this Agreement. The Scope of Development is subject to modification as provided in Section 2.2. 611

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“Tax Credit Amount (s)” means the amounts so delineated therefor in the Base Pro Forma, namely: not less than $10,470,758.00 in federal tax credits and not less than $5,989,858.00 in federal tax credits; this amount represents the projected yield from the market of the Tax Credits under the Base Pro Forma and may not correspond to the amount of tax credits ultimately available. “Tax Credit Application s” means that application for Tax Credits previously submitted by CHW to TCAC to obtain an allocation of 4% Tax Credits for the Development or such other financing as may be applied for pursuant to Section 6.15.
“Tax Credit Deadline” means December 30, 2025.
“Tax Credit Rent ” means that maximum rent permitted to be paid for a household corresponding to an income category set forth in this agreement (such as 50% of Median Income) under the Tax Credit Rules.
“Tax Credit Rules ” means Section 42 of the Internal R evenue Code and/or California Revenue and Taxation Code Sections 17057.5, 17058, 23610.4 and 23610.5 and California Health and Safety Code Section 50199, et seq., and the rules and regulations implementing the foregoing, including without limitation the program regulations promulgated by TCAC. “Tax Credits” means 4% Housing Tax Credits granted pursuant to Section 42 of the Internal Revenue Code and/or California Revenue and Taxation Code Sections 17057.5, 17058, 23610.4 and 23610.5 and California Health and Safety Code Section 50199, et seq. “TCAC” means the Tax Credit Allocation Committee of the State of California. “Tenant Selection and Tenant Services Plan” has the meaning established therefor in Section 7.2.3 of this Agreement.
“Term of the City Lease” means a period of eighty-seven (87) years, as more particularly set forth in the City Lease.
“Title Company” shall be Stewart Title Guaranty Company or another title insurer mutually acceptable to City and Developer.
“Uniform Codes” means each of the following as in effect from time to time as approved by City: the Uniform Building Code, the Uniform Housing Code, the National Electrical Code, the Uniform Plumbing Code, the Uniform Mechanical Code, and the Uniform Code for the Abatement of Dangerous Buildings.
“Unit” means each of the dwelling units required to be developed by Developer under this Agreement.
“Universal Application Package” means a packet so designated by City staff which includes comprehensive plans for the development of the Portion A Sit e; Universal Application Package is further described in Section 6.1 of this Agreement.
“Very Low Income Households ” means households earning not greater than fifty percent (50%) of Median Income for the Area pursuant to the Health and Safety Code Section 50105. 612

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“Very Low Income Unit” means a Unit occupied at Affordable Rent by an Extremely Low Income Household.
“Year” means the period commencing as of the Leasehold Transfer and ending as of December 31 of that calendar year, then each succeeding calendar year thereafter during the Required Covenant Period terminating as of the last day of the Required Affordable Period.

1.2 Singular and Plural Terms. Any defined term used in the plural in this Agreement or any Project Document shall refer to all members of the relevant class and any defined term used in the singular shall refer to any number of the members of the relevant class.

1.3 References and Other Terms . Any reference to this Agreement or any Project Document shall include such document both as originally executed and as it may from time to time be modified. References herein to Articles, Sections and Exhibits shall be construed as references to this Agreement unless a different document is named. References to subparagraphs shall be construed as references to the same Section in which the reference appears. The term “document” is used in its broadest sense and encompasses agreements, certificates, opinions , consents, instruments and other written material of every kind. The terms “including” and “include” mean “including (include) without limitation.”

1.4 Exhibits Incorporated . All attachments and exhibits to this Agreement, as now existing and as the same may from time to time be modified, are incorporated herein by this reference.

1.5 Representations and Warranties.

1.5.1 City Representations. City represents and warrants to Developer as follows:
(a) City. City is a municipal corporation , acting as a housing authority existing pursuant to the Housing Authorities Law, which has been authorized to transact business pursuant to action of City. City has full right, power and lawful authority to lease the Portion A Site as provided herein and the execution, performance, and delivery of this Agreement by City has been fully authorized by all requisite actions on the part of City. The parties who have executed this Agreement on behalf of City are authorized to bind City by their signatures hereto. (b) Litigation. To the best of City’s knowledge, there are no actions, suits, material claims, legal proceedings, or any other proceedings including the City affecting the Portion A Site or any portion thereof, at law or in equity before any court or governmental agency, domestic or foreign.
(c) No Conflict . City’s execution, delivery, and performance of its obligations under this Agreement will not constitute a default or a breach under any contract, agreement or order to which City is a party or by which it is bound. (d) Condition of the Portion A Site as of the Leasehold Transfer . The condition of the Portion A Site as of the Leasehold Transfer (including but not limited to the condition of title and the physical condition, excepting to the extent, if any, that these are modified due to activities of Developer) will not be materially different from that existing as of the Date of Agreement. (e) No City Bankruptcy. City is not th e subject of a bankruptcy proceeding.
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Until the Leasehold Transfer, City shall, upon learning of any fact or condition which would cause any of the warranties and representations in this Section 1.5.1 not to be true as of the Leasehold Transfer, immediatel y give written notice of such fact or condition to Developer. Such exception(s) to a representation shall not be deemed a breach by City hereunder, but shall constitute an exception which Developer shall have a right to approve or disapprove if such excep tion would have an effect on the value and/or operation of the Portion A Site . If Developer elects to accept the Leasehold Transfer and possession of the Portion A Site following disclosure of such information, City’s representations and warranties contained herein shall be deemed to have been made as of the Leasehold Transfer, subject to such exception(s). If, following the disclosure of such information, Developer elects to not accept the Leasehold Transfer of and possession of the Portion A Site, then this Agreement shall automatically terminate, and neither party shall have any further rights, obligations or liabilities hereunder. The representations and warranties set forth in this Section 1.5.1 shall survive the Leasehold Transfer.

1.5.2 Developer Representations. Developer represents and warrants to City as follows:
(a) Authority. Developer is a duly organized California nonprofit public benefit corporation organized within and in good standing under the laws of the S tate of California.

Developer has full right, power and lawful authority to lease and accept title to and possession of the Portion A Site and undertake all obligations as provided herein and the execution, performance and delivery of this Agreement by Developer has been fully authorized by all requisite actions on the part of Developer. The parties who have executed this Agreement on behalf of Developer are authorized to bind Developer by their signatures hereto.
(b) Litigation. To the best of Developer’s knowledge, there are no actions, suits, material claims, legal proceedings, or any other proceedings affecting Developer, at law or in equity before any court or governmental agency, domestic or foreign. (c) No Conflict. Developer’s execution, delivery, and pe rformance of its obligations under this Agreement will not constitute a default or a breach under any contract, agreement or order to which Developer is a party or by which it is bound. (d) No Developer Bankruptcy . Developer is not the subject of a bankruptcy proceeding.
(e) Developer Experience; Sophisticated Party. Developer and each of the Principals of Developer are sophisticated parties, with substantial experience in the acquisition, rehabilitation, development, financing, obtaining financing for, marketing, and operation of affordable housing projects, including rental projects, and with the negotiation, review, and preparation of agreements and other documents in connection with such activities. Developer is familiar with and has reviewed all laws and regulations pertaining to the development and operation of the Development, including without limitation the Tax Credit Rules, and has obtained advice from any advisers of its own choosing in connection with this Agreement.
(f) Due Authorization and Execution; Studies Completed. Developer has duly authorized the execution of this Agreement, and prior to the Leasehold Transfer (in the event Developer proceeds with the Leasehold Transfer) will duly authorize the City Regulatory Agreement and the City Lease. Prior to the Leasehold Transfer, Developer shall execute and deposit with City (to 614

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be held pending satisfaction of the City Conditions Precedent as set forth in Section 3.1 hereunder) the City Regulatory Agreement and all documents necessary to effectuate the Le asehold Transfer hereunder.

Until the Leasehold Transfer, Developer shall, upon learning of any fact or condition which would cause any of the warranties and representations in this Section 1.5.2 not to be true as of the Leasehold Transfer, immediately give written notice of such fac t or condition to City. Such exception(s) to a representation shall not be deemed a breach by Developer hereunder, but shall constitute an exception which City shall have a right to approve or disapprove if such exception would have an effect on the devel opment and/or operation of the Portion A Site . If City elects to proceed with the Leasehold Transfer following disclosure of such information, Developer’s representations and warranties contained herein shall be deemed to have been made as of the Leasehol d Transfer, subject to such exception(s). If, following the disclosure of such information, City elects to not close Escrow, then this Agreement and the Escrow shall automatically terminate, and neither party shall have any further rights, obligations or liabilities hereunder. The representations and warranties set forth in this Section 1.5.2 shall survive the Leasehold Transfer.

1.6 Condition of the Portion A Site.

1.6.1 Studies and Reports . Prior to the Clo sing, Developer and its employees, agents, contractors and consultants (collectively, the “ Developer Contracting Parties”) may enter the Portion A Site as necessary during regular business hours to obtain data and make any other or additional surveys, tests, studies, and reports necessary to evaluate the suitability of the Portion A Site for the Development, including but not limited to invasive testing and the investigation of the environmental and physical condition of the Portion A Site (collectively, the “Studies”). Any studies undertaken on the Portion A Site by any of the Developer Contracting Parties prior to the Closing shall be done at the sole expense of Developer, and Developer shall make arrangements with City staff prior to undertaking such work and entering the Portion A Site. Any studies shall be undertaken only after Developer has secured the consent of the City and any necessary permits therefor from the appropriate governmental agencies, including withou t limitation City. Developer hereby agrees to promptly provide City with any and all Studies relating to the environmental condition of the Portion A Site upon Developer’s acquisition thereof but without any representation as to the accuracy of such Studies or City’s or City’s rights to rely thereon. Following the completion of the tests and investigations described in this section, Developer shall restore the surface of the Property to substantially the condition existing prior to the performance of any such tests or investigations. Developer shall also indemnify, defend and hold City and its board members, council members, officers, and employees harmless against any claims for damage to person or property arising from entry on or activities of any of Developer Contracting Parties pursuant to this section, except and to the extent resulting from the gross negligence or willful misconduct of City. This obligation to indemnify shall survive termination of this Agreement.

1.6.2 Approval of Condition of the Site. Developer shall notify City on or before the thirtieth day after the Day of Agreement and prior to commencement of the term of the City Lease to the following effect: (i) that Developer has determined that there are not Materially Adverse Conditions on the Portion A Site, or (ii) that there are Materially Adverse Conditions on the Portion A Site but Developer has located funding sources to remediate, remove or otherwise satisfy such Conditions and that Developer elects to proceed to accept the Leasehold Transfer and proceed with performance, (iii) that there are Materially Adverse Conditions on the Portion A Site and Developer elects to terminate pursuant to Section 7.3(a) hereof unless City and Developer agree, within (15) days 615

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following the date such notice is received by City to otherwise resolve such conditions to Developer’s satisfaction, in Developer’s sole and absolute discretion.

1.6.3 Indemnification. Developer shall save, protect, pay for, defend (with counsel acceptable to each of City), indemnify and hold harmless City and its elected and appointed officials, officers, employees, attorneys, representatives, volunteers, contractors and agents (collectively, “Indemnitees”) from and against any and all liabilit ies, suits, actions, claims, demands, penalties, damages (including, without limitation, penalties, fines and monetary sanctions), losses, costs or expenses (including, without limitation, consultants’ fees, investigation and laboratory fees, attorneys’ fees and remedial and response costs and third -party claims or costs) (the foregoing are hereinafter collectively referred to as “Liabilities”) that may now or in the future be incurred or suffered by Indemnitees by reason of, resulting from, in connection with or arising in any manner whatsoever as a direct or indirect result of: (i) the presence, use, release, escape, seepage, leakage, spillage, emission, generation, discharge, storage, or disposal of any Hazardous Materials in, on, under, or about, or the transportation of any such Hazardous Materials to or from, the Portion A Site occurring after the Closing or caused or contributed to by Developer; (ii) the violation, or alleged violation, of any statute, ordinance, order, rule, regulation, permit, judgment, or license relating to the use, generation, release, leakage, spillage, emission, escape, discharge, storage, disposal, or transportation of Hazardous Materials in, on, under, or about, or to or from, the Portion A Site by Developer or occurring after the Closing; (iii) the physical and environmental condition of the Portion A Site caused or contributed to by Developer or occurring after the Closing, and (iv) any Liabilities caused or contributed to by acts or omissions of Developer relating to any Environmental Laws and other Governmental Requirements relating to Hazardous Materials and/or the environmental and/or physical condition of the Portion A Site. The foregoing indemnification shall continue in full force and effect regardless of whether such condition, liability, loss, damage, cost, penalty, fine, and/or expense shall accrue or be discovered before or after the termination of the Required Covenant Period. This indemnification supplements and in no way limits the indemnification set forth in Article 6.

1.6.4 Duty to Prevent Hazardous Material Contamination . During the construction, development, operation and management of the Development, Developer shall take all necessary precautions to prevent the release of any Hazardous Materials into the enviro nment on or under the Portion A Site . Such precautions shall include, but not be limited to, compliance with all Environmental Laws and other Governmental Requirements. Developer shall notify City, and provide to City a copy or copies of any notices of violation, notices to comply, citations, inquiries, clean up or abatement orders, cease and desist orders, reports filed pursuant to self -reporting requirements and reports filed or applications made pursuant to all Envi ronmental Laws and other Governmental Requirements, and Developer shall report to City, as soon as possible after each incident, any unusual or potentially important incidents in the event of a release of any Hazardous Materials into the environment.

1.6.5 Release of Indemnitees by Developer . Developer hereby waives, releases and discharges forever the Indemnitees from all present and future claims, demands, suits, legal and administrative proceedings and from all liability for damages, losses, costs, liabilitie s, fees and expenses, including attorneys’ fees, court and litigation costs and fees of expert witnesses, present and future, arising out of or in any way connected with Developer’s possession or use of the Portion A Site, improvement of the Portion A Site in accordance with this Agreement, the Scope of Development, and the land use entitlements obtained by Developer for the Development, and for the operation of the Development at the Portion A Site, of any Hazardous Materials on the Portion A Site from the activities of Developer or arising from and after the Closing, or the existence of Hazardous Materials 616

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contamination in any state on, under, or about the Portion A Site, from the activities of Developer or arising from and after the Closing. The foregoing indemnity shall not apply to the condition or use of the Portion A Site prior to the Closing, except and to the extent caused by any conditions which have been caused or exacerbated by any of the Developer Contracting Parties.

In connection with the fore going, Developer acknowledges that it is aware of and familiar with the provisions of Section 1542 of the California Civil Code that provides as follows:
“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH

THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS

OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE,

WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY
AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.”
As such relates to this Section 1.6.5, Developer hereby waives and relinquishes all rights and benefits that it may have under Section 1542 of the California Civil Code.

Notwithstanding the foregoing, this waiver, discharge, and release shall not be effective in the event the presence or release of Hazardous Materials on the Portion A Site (i) occurs prior to the Closing and which is not caused or contributed to by Developer or (ii) as a result of the gross negligence or willful misconduct of City or their respective officers, employees, representatives and agents.

1.6.6 Environmental Inquiries . Developer shall notify City upon receipt, and provide to City a copy or copies, of the following environmental permits, disclosures, applications, entitlements or inquiries relating to the Portion A Site and the Development: notices of violation, notices to comply, citations, inquiries, clean up or abatement orders, cease and desist orders, reports filed pursuant to self -reporting requirements and reports filed or applications made pursuant to any Environmental Laws and other applicable Governmental Requirements relating to Hazardous Materials and underground tanks, and Developer shall report to City, as soon as possible after each incident, all material information relating to or arising from such incide nt, including, but not limited to, the following:
(a) All required reports of releases of Hazardous Materials, including notices of any release of Hazardous Materials as required by any Governmental Requirements; (b) All notices of suspension of any permits relati ng to Hazardous Materials;
(c) All notices of violation from federal, state or local environmental authorities relating to Hazardous Materials;
(d) All orders under the State Hazardous Waste Control Act and the State Hazardous Substance Account Act and correspondi ng federal statutes, concerning investigation, compliance schedules, clean up, or other remedial actions; (e) All orders under the Porter Cologne Act, including corrective action orders, cease and desist orders, and clean up and abatement orders; (f) Any notices o f violation from OSHA or Cal OSHA concerning employees’ exposure to Hazardous Materials;
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(g) All complaints and other pleadings filed against Developer relating to Developer’s storage, use, transportation, handling or disposal of Hazardous Materials on or abou t the Portion A Site; and
(h) Any and all other notices, citations, inquiries, orders, filings or any other reports containing information which would have a materially adverse effect on the Portion A Site or City’s liabilities or obligations relating to Hazardous Materials.

In the event of a release of any Hazardous Materials into the environment, Developer shall, as soon as possible after obtaining knowledge of the release, furnish to City a copy of any and all reports relating thereto and copies of all corre spondence with governmental agencies relating to the release.

Upon request of City and/or City, but subject to any limitations imposed by law or by court order, Developer shall furnish to City a copy or copies of any and all other environmental entitlemen ts or inquiries relating to or affecting the Portion A Site in Developer’s possession and/or shall notify City of any environmental entitlements or inquiries relating to or affecting the Portion A Site within Developer’s actual or constructive knowledge if Developer is not in possession of same, including, but not limited to, all permit applications, permits and reports including, without limitation, those reports and other matters which may be characterized as confidential.

2. THE PORTION A SITE , SCOPE OF DEV ELOPMENT AND SCHEDUL E OF

PERFORMANCE

2.1 The Portion A Site. The Portion A Site is described in Attachments No. 1 and No. 2.

The Adjacent City Parking Area is not part of the Portion A Site.

2.2 Scope of Development. Developer shall develop the Portion A Site in conformity with the Scope of Development. The Scope of Development is subject to modification from time to time based upon the mutual written agreement of City and Developer; the City Manager is authorized by City to modify the Scope of Development to the extent such modifications ar e not material at the discretion of the City Manager without the need for further action by the City. Subsequent to the Date of Agreement, Developer will be applying to City for zoning action, environmental review associated with the development contemplated by this Agreement, any applicable mapping, and associated land use review. Land use review shall be subject to the customary City public hearing process.

3. DISPOSITION OF THE PORTION A SITE

3.1 Tentative Map and Final Map . City hereby agrees that Developer may file an application for a tentative parcel map and a final parcel map in order to reconfigure the Portion A Site.

Developer shall proceed with such activities at its cost ; any costs in connection with processing mapping shall be borne by Dev eloper. Developer’s ability to obtain a final parcel map reasonably acceptable to Developer, and the expiration of any applicable appeal periods without a successful appeal, are conditions precedent to the Closing. Developer’s inability to obtain such a final parcel map shall not, to the extent the failure is not attributable to the acts or omissions of Developer, constitute a Default by Developer hereunder.

3.2 Lease of the Portion A Site . All references in this Agreement to acreage are approximate; payments by Developer (including without limitation those payments required under the City Lease) will not change regardless of whether the actual acreage of the Portion A Site differs from the acreage figures set forth in this Agreement. Subject to the conditions and limitations set forth in 618

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the foregoing part of this Section 3.2 and further subject to the prior satisfaction of the City Conditions Precedent, the Leasehold Transfer of the Portion A Site is to be accomplished as set forth in Sections 3.2 to 3.5 hereof.

In consideration of City entering into the City Lease, Developer shall pay rent under the City Lease, and shall comply with and cause the use of the Portion A Site to conform to the City Lease and the City Regulatory Agreement throughout the Required Covenant Period.

3.3 Escrow. The parties shall open an escrow (the “City Escrow”) with the Escrow Holder, by the time established therefor in the Schedule of Performance for the Leasehold Transfer, and the recordation and delivery of documents described in Article 3. City and Developer agree to execute such escrow instructions as may be reasonably required to implement this Section 3.3. The obligation of City to deliver the Memorandum of Lease (and a copy of the City Lease), as well as the Notice of Affordability Restrictions and, if not previously recorded, the City Regulatory Agreement, to escrow or to proceed with the Leasehold Transfer is contingent upon the satisfaction of the “ City Conditions Precedent,” as set forth in Section 4.1 of this Agreement.

3.3.1 Costs of Escrow. City and Developer shall pay their respective portions of the premium for the Title Policy as set forth in Section 3.5 hereof, City shall pay for the documentary transfer taxes, if any, due with respect to the Leasehold Transfer, and Developer and City each agree to pay one-half of all other usual fees, charges, and costs which arise from Escrow.

3.3.2 Escrow Instructions . The parties hereto agree to do all acts reasonably necessary to close this Escrow in the shortest possible time. Insurance policies for fire or casualty are not to be transferred, and City will cancel its own policies after the Leasehold Transfer. All funds received in the Escrow shall be deposited with other escrow funds in a general escrow account(s) and may be transferred to any other such escrow trust account in any State or National Bank doing business in the State of California. All disbursements shall be made by check from such account.

If in the opinion of any of Developer, City it is necessary or convenient in order to accomplish the Leasehold Transfer, such party may require that the parties sign supplemental escrow instructions; provided that if there is any inconsistency between this Agreement and the supplemental escrow instructions, then the provisions of this Agreement shall control. The parties agree to execute such other and further documents as may be reasonably necessary, helpful or appropriate to effectuate the provisions of this Agreement. The Leasehold Transfer shall take place when the City Conditions Precedent have been satisfied. Escr ow Holder is instructed to release City’s escrow closing and Developer’s escrow closing statements to the respective parties.

3.3.3 Authority of Escrow Holder. Escrow Holder is authorized to, and shall:
(a) Pay and charge Developer and City for their respective shares of the premium of the Lessee’s Title Policy as set forth in Section 3.5 and any amount necessary to place title in the condition necessary to satisfy Section 3.4 of this Agreement. (b) Pay and charge Developer and City for their re spective shares of any escrow fees, charges, and costs payable under Section 3.3.1 of this Agreement. (c) Pay and charge Developer for any endorsements to the Lessee’s Title Policy which are requested by Developer.
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(d) Disburse funds, record and deliver the Record able Documents in the order set forth in Section 3.3.6 and deliver such documents. (e) Do such other actions as necessary to fulfill its obligations under this Agreement.
(f) Deliver to City the City Note duly executed by Developer and those instruments referenced in Section 3.3.6 upon recordation of the City Deed of Trust. (g) Prepare and file with all appropriate governmental or taxing authorities a uniform settlement statement, closing statement, tax withholding forms including an IRS 1099 -S form, and be responsible for withholding taxes, if any such forms are provided for or required by law.

3.3.4 Closing. The Leasehold Transfer and delivery of documents related shall close (“Closing”) as soon as feasible following the parties’ satisfaction of all of the City Conditions Precedent, but in no event later than the last day established therefor in the Schedule of Performance.

The Schedule of Performance is subject to modification from time to time at the mutual concurrence of City and Developer, each acting at its sole discr etion. The “Closing” means the time and day that all of the City Regulatory Agreement, the Notice of Affordability Restrictions , the Memorandum of Lease, the City Deed of Trust have been recorded among Official Records and Escrow Holder holds each of the City Promissory Note for delivery to City. The “Closing Date” means the day on which the Closing occurs. Escrow Holder shall also cause to be recorded among the Official Records a Request for Notice of Default as to each deed of trust hereafter designate d by the City Manager to Escrow Holder; provided that the recording of such Notice(s) of Default shall not be a condition precedent to Closing.

3.3.5 Termination. If Escrow is not in condition to close by the time established therefor in the Schedule of Performance, then a party which has fully performed under this Agreement may, in writing, demand the return of money or property and terminate this Agreement. If either party makes a written demand for return of documents or properties, this Agreement shall not terminate until five (5) days after Escrow Holder shall have delivered copies of such demand to all other parties at the respective addresses shown in this Agreement. If any objections are raised within said five (5) day period, Escrow Holder is authorize d to hold all papers and documents until instructed by a court of competent jurisdiction or by mutual written instructions of the parties. Developer, however, shall have the sole option to withdraw any money depo sited by it with respect to the Closing les s Developer’s share of costs of Escrow. Termination of the Escrow shall be without prejudice as to whatever legal rights either party may have against the other arising from this Agreement. If no timely demands for termination are made, the Escrow Holder shall proceed with the Closing as soon as possible.

3.3.6 Closing Procedure . Escrow Holder shall close Escrow for the Leasehold Transfer as follows:

Record the following documents in this order: (i) the Memorandum of Lease; (ii) the City Regulatory Agreement; (iii) the Approved Construction and/or Permanent Lender’s deed(s) of trust (including any swap deed(s) of trust which do not provide for cross-collateralization or a change in security); (vi) the City Deed of Trust; (vi) the Notice of Affordability Restri ctions; and (vii) such other instruments, if any, as shall be approved by City Manager (upon consultation with City’s legal counsel) as necessary or convenient to effectuate and implement the initial financing of the Improvements (and the permanent financing thereof), including any mutually approved subordination 620

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agreements (provided that the City Regulatory Agreement shall not be subordinated), with instructions for the Recorder of Placer County, California to deliver to City the City Regulatory Agreement, the Memorandum of Lease, the City Deed of Trust, and the Notice of Affordability Restrictions and to deliver a certified copy of each to Developer. The order of recordation shall be subject to revision upon approval of the City Manager;
(a) Instruct the Titl e Company to deliver the Lessee’s Title Policy to Developer, with a copy to City;
(b) Instruct the Title Company to deliver to City the City Loan Policy; (c) File any informational reports required by Internal Revenue Code Section 6045(e), as amended, and any other applicable requirements; (d) Deliver the FIRPTA Certificate, if any, to Developer; (e) Deliver documents as set forth in Section 3.3.3 hereof; and (f) Forward to both Developer and City a separate accounting of all funds received and disbursed for each party and copies of all executed and recorded or filed documents deposited into Escrow, with such recording and filing date and information endorsed thereon.

3.4 Review of Title. City shall cause the Title Company to deliver to Developer a standard preliminary title report (the “Report”) with respect to the leasehold interest in the Portion A Site under the City Lease within thirty (30) business days following the Date of Agreement, and City will endeavor to cause the Title Company to provide to Developer legible copies of the documents underlying the exceptions (“Exceptions”) set forth in the Report at such time. Developer shall have the right to reasonably approve or disapprove the Exceptions; provided, however, that Developer hereby approves the following Exceptions:
(a) The Redevelopment Plan.
(b) The lien of any non -delinquent property taxes and assessments (to be prorated at close of Escrow).
(c) The provisions of the City Regulatory Agreement, the City Lease (and the Memorandum of Lease), the City Deed of Trust, the Notice of Affordability Restrictions. (d) Any incidental easements or other matters affecting title which do not materially impact Developer’s use of the Portion A Site as described in the Scope of Development.

Developer shall have thirty (30) business days from the date of its receipt of the Report to give written notice to City and Escrow Holder of Developer’s approval or disapproval of any of such Exceptions. If Developer notifies City of its disapproval of any Exceptions in the Report, City shall have ten (10) business days from the receipt of written notice of disapproval by Developer to determine whether or not it will undertake the removal of any disapproved Exceptions. If City elects to remove such Exceptions, it shall diligently proceed to effect the removal of such Exceptions, provided that any such Exceptions shall be removed no later than the Closing as a condition precedent to Developer’s obligation to enter into the Lease . If City cannot or does not elect to remove any of the dis approved Exceptions within that period, Developer shall have ten (10) business days after the expiration of such 621

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ten (10) business day period to either give City written notice that Developer elects to proceed with the ground leasing of the Portion A Site subject to the disapproved Exceptions or to give City written notice that Developer elects to terminate this Agreement. The Exceptions to title approved by Developer as provided herein shall hereinafter be referred to as the “Condition of Title.” City shall promptly notify Developer of any additional and/or previously unreported Exceptions reported by the Title Company (which are not created by Developer) after Developer has approved the Condition of Title for the Portion A Site , and Developer shall have the right to approve or disapprove any such additional Exceptions pursuant to the process described in this paragraph as a condition precedent to Developer’s obligation to enter into the City Lease.

3.5 Title Insurance.
(a) Lessee’s Policy of Title Insurance . Concurrently with recordation of the Memorandum of Lease, there shall be issued to Developer an ALTA leasehold owner’s policy (extended coverage) of title insurance (the “Lessee’s Title Policy”), based upon the City’ s or Redevelopment Agency’s original cost to acquire the Portion A Site (or, if different, then-appraised value of the Portion A Site as of the Leasehold Transfer, or, at Developer’s option, an amount equal to the total development costs of the Portion A Site), together with such endorsements as are reasonably requested by Developer, issued by the Title Company insuring that the title to a leasehold interest in the Portion A Site and fee interest in the Improvements are vested in Developer in the condition required by Section 2.4 of this Agreement. The Title Company shall provide City with a copy of the Lessee’s Title Policy. The Lessee’s Title Policy shall be based upon value described in this section.

City shall pay that portion of the premium for the L essee’s Title Policy equal to the cost of a CLTA standard coverage title policy insuring a leasehold in the amount based upon the City’s or Redevelopment Agency’s original cost to acquire the Portion A Site without regard to any improvements thereto . Any additional costs, including the cost of an ALTA policy or any endorsements requested by Developer, shall be borne by Developer. (b) City Lender Policy of Title Insurance. Concurrently with recordation of the City Memorandum of Lease, there shall be issued to City a lender’s policy of title insurance as to City’s beneficial interest under the City Deed of Trust (the “ City Loan Policy”). The City Loan Policy will be to cover the original principal amount of the City Loan. Such policy will include those endorsements as are requested by City and shall insure that the beneficial interests of City under each of the City Deed of Trust is insured in the condition required by Section 3.4 of this Agreement.

Developer shall pay the premiums for the City Loan Policy and endorsements.

3.6 Financing Package . As required herein and as a City Condition Precedent to the Leasehold Transfer, as further set forth in Section 4.1 hereof, Developer shall submit to City evidence that Developer has obtained sufficient equity capital or has arranged for and obtained a binding commitment for construction financing necessary to undertake the development of the Portion A Site and the construction of the Improvements in accordance with this Agreement.

4. CONDITIONS TO DEVELOPER POSSESSION OF THE PORTION A SITE

4.1 City Conditions Precedent. City shall not effect the Leasehold Transfer or disburse any portion of the City Loan, as provided pursuant to this Agreement, and Developer shall not take possession of a leasehold interest in the Portion A Site under the Leasehold Transfer (notwithstanding any provision of this Agreement to contrary effect) unless all of the following conditions precedent (the “City Conditions Precedent”) has been fully satisfied, as determined in good faith by the City 622

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Manager (which condition, if it requires action by Developer, shall also be a covenant of Developer).

City agrees to use diligent, good faith efforts to satisfy those City Conditions Precedent under the control of City.
(a) Recording of Certain Documents . Each of the City Regulatory Agreement, the City Lease or a memorandum of lease in form approved by the City Manager, the City Deed of Trust and the Notice of Affordability Restrictions has been delivered to the Title Company for recording; any documents determined in connection with the Final Financing Packa ge to be executed and delivered in connection with the acquisition of the Portion A Site have been so executed and delivered and, where required to be recorded, have been recorded; and the Title Company is committed to issue the Lessee’s Title Policy to Developer and the City Loan Policy to City. (b) Evidence of Financing. Developer shall have provided written proof acceptable to City that Developer has sufficient internal funds and/or has obtained one or more loans or financing (including the City Loan), sub ject to customary conditions, for construction of the Development, and City has approved such evidence of financing, in accordance with all of Section 6.15 hereof, including that a preliminary reservation of Tax Credits has been obtained for an amount of not less than the Tax Credit Amount and the City shall have approved a Final Financing Package reflecting a high level of assurance that financing has been secured which is sufficient for the development of the Portion A Site and use at the rent levels and income levels required from all sources of financing as referenced in the last paragraph of Section 7.2 . In the event Developer obtains a loan or financing for the construction of the Development, such construction loan or financing for the Development shall be ready to close, and shall close, and a portion of proceeds from the sale of Tax Credits, as provided for in this Agreement and under the Final Financing Package, shall be immediately available for use in constructing the Improvements.
(c) Construction Contract. Developer shall have provided to City a signed copy of a stipulated sum or guaranteed maximum price contract between Developer and the general contractor for the construction of the Development, certified by Developer to be a true and correct copy thereof, and City Manager shall have approved such contractor or contractors, and the construction contract or contracts, pursuant to Section 6.15 hereof. City hereby approves Sun Country Builders as the general contractor for the Project; any other co ntractor shall be subject to approval under Section 6.15.
(d) Payment, Performance and Completion Bonds . Developer or its general contractor shall have obtained payment bonds and performance and completion bonds for the Development, in an amount and from a surety company reasonably acceptable to the City Manager.

All bonds shall be issued by good and solvent sureties qualified to do business in California and shall have a rating of A or better in the most recent edition of Best’s Key Rating Guide. (e) TCAC Approval. All TCAC approvals required in connection with the preliminary reservation of Tax Credits have been obtained in an amount not less than the Tax Credit Amount and remain in full force and effect.
(f) Insurance. City shall have received evidence, satisfactory to City Manager, that all of the insurance policies required by Section 6.5 below as well as coverages required by the City Lease, are in full force and effect.
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(g) Parking Plan. Developer shall have submitted and shall have obtained City approval of a plan for parking for the Project. In the event any parking is provided at the Adjacent City Parking Area, no interest will be conveyed, no liens or restrictions may be imposed as to the Adjacent City Parking Area by Developer or any party providing financing for the Project (excepting therefrom City) and parking spaces would be available only on a non-exclusive basis to residents of the Project under a license agreement or other instrument acceptable to City . The parking plan shall include provisions for parking for each of residents and visitors to the Portion A Site, the Portion B Area, and members of the general public, as well as a plan for maintenance and operation of the Adjacent City Parking Area.
(h) Reciprocal Easement and Joint Use Agreement. Developer shall have presented and obtained the prior written approval of each of Pacific Street Housing Associates Nine, L.P., a California limited partnership and the City to a Reciprocal Easement and Joint Use Agreement that meets all criteria set forth in the definition of Reciprocal Easement and Joint Use Agreement in this Agreement.
(i) Zoning and Land Use Entitlements. Developer shall have zoning and other land use entitlements, as well as mapping approval and environmental clearance, that would authorize the development of the Portion A Site consistent with this Agreement. (j) Representations and Warranties. The representations and warranties of Developer contained in this Agreement shall be correct as of the Leasehold Transfer as though made on and as of that date, and City Manager shall have received a certificate to that effect signed by an officer of Developer.
(k) No Default. No Default by Developer shall have occurred under this Agreement or any other agreement between City and Developer and/or its officers or employees, no event shall have occurred which, with the giving of notice or the passage of time or b oth, would constitute a Default by Developer under this Agreement, and City Manager shall have received a certificate to that effect signed by an officer of Developer.

All conditions set forth in this Section 4.1, or to City’s obligations hereunder, are for City’s benefit only and City Manager may waive all or any part of such rights by written notice to Developer.

If City Manager shall, within the applicable periods set forth herein, disapprove of any of the items which are subject to City’s approval, or if any of the conditions set forth in this Agreement are not met within the times called for, City may thereafter terminate this Agreement without any further liability on the part of City by giving written notice of termination to Developer.

4.2 Developer Conditions Precedent . Developer shall not be obligated to accept the Leasehold Transfer or take possession of a leasehold interest in the Portion A Site under the Leasehold Transfer (notwithstanding any provision of this Agreement to contrary effect) unless all of the following conditions precedent (the “Developer Conditions Precedent”) has been fully satisfied, as determined in good faith by the Developer (which condition, if it requires action by City, shall also be a covenant of City); and the Developer agrees to use diligent, good faith efforts to attempt to satisfy the Developer Conditions Precedent:
(a) Financing Commitments . Developer shall have obtained binding commitments for one or more loans or financing (including the City Loan), subject to customary conditions, for construction of the Development, and City has approved such evidence of financing, in 624

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accordance with all of Section 6.15 hereof, including that a preliminary reservation of Tax Credits has been obtained for an amount of not less than the Tax Credit Amount and the City shall have approved a Final Financing Package.
(b) TCAC Approval. All TCAC approvals required in connection with the preliminary reservation of Tax Credits have been obtained in an amount not less than the Tax Credit Amount and remain in full force and effect.
(c) Representations and Warranties. The representations and warranties of City contained in this Agreement shall be correct as of the Leasehold Transfer as though made on and as of that date, and Developer shall have received a certificate to that effect signed by an officer of the City.
(d) No Default . No Default by City shall have occurred under this Agreement or any other agreement between City and Developer and/or its officers or employees, no event shall have occurred which, with the giving of notice or the passage of time or both, would constitute a Default by City under this Agreement, and Developer shall have received a certificate to that effect signed by an officer of City.
(e) Condition of the Property. The condition of the Property, including but not limited to the physical condition and the condition of title, shall not be materially different than that existing as of the Date of Agreement , subject only to matters caused by the activities of the Developer or any of the Developer Contracting Parties.

All conditions set forth in this Section 4.2, or to Developer’s obligati ons hereunder, are for Developer’s benefit only and Developer may waive all or any part of such rights by written notice to City. If Developer shall, within the applicable periods set forth herein, disapprove of any of the items which are subject to Developer’s approval, or if any of the conditions set forth in this Agreement are not met within the times called for, Developer may thereafter terminate this Agreement without any further liability on the part of Developer by giving written notice of termination to City.

5. CITY LOAN PROVISIONS

5.1 Loan Amounts. Subject to the terms and conditions set forth in the City Documents, City hereby agrees to make a loan to Developer in the amount of the City Loan Amount (the “City Loan”) to fund the shortfall of development and permanent financing costs as shown in the Final Financing Package. Developer’s obligation to repay the City Loan shall be evidenced by the City Promissory Note and s ecured by the City Deed of Trust . The close of the City Loan shall occur concurrently with the Closing.

5.2 Interest. The City Loan shall bear simple interest at the Applicable Interest Rate.

5.3 Use of City Loan. The City Loan shall be used solely for construction and permanent financing in accordance with the Final Financing Package. Developer may not use any proceeds of the City Loan for any other purpose without the prior written con sent of City, which consent may be granted, conditionally granted or refused at the sole and absolute discretion of City. 625

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5.4 Security; Subordination. City agrees to subordinate the City Deed of Trust to liens securing one Primary Construction Loan and subsequently one Primary Permanent Loan (each a “Senior Loan”), but only on condition that all of the following conditions are satisfied:
(a) All the proceeds of the proposed Senior Loan(s), less any transa ction costs, must be used to provide acquisition, construction or permanent financing for the Project, or any combination thereof.
(b) Developer is not in breach of any provision of this Agreement. (c) The proposed lender must be an Approved Construction and/or Permanent Lender.
(d) Developer must demonstrate to City’s reasonable satisfaction that subordination of the City Deed of Trust is necessary to secure adequate construction, rehabilitation and/or permanent financing to ensure the viability of the Development, including the operation of the Development as affordable housing, as required by this Agreement. To satisfy this requirement, Developer must provide to City, in addition to any other information reasonably required by City, evidence demonstrating that the a mount of the proposed Senior Loan(s) is necessary to provide adequate construction, rehabilitation and/or permanent financing to ensure the viability of the Development, and adequate financing for the Development would not be available without the proposed subordination.
(e) The subordination agreement(s) must be structured to minimize the risk that the City Deed of Trust would be extinguished as a result of a foreclosure by the Approved Construction and/or Permanent Lender. To satisfy this requirement, the subordination agreement must provide City with adequate written notice and rights to cure any defaults by Developer, including:
(i) providing City or its successor with copies of any notices of default at the same time and in the same manner as provided to Developer; and (ii) providing City with a cure period of at least thirty (30) days to cure any default.
(f) The subordination(s) described in this Section may be effective only during the original term of the Senior Loan(s) and any extension of its term or refinancing approved in writing by City, and to any refinancing of the Senior Loan(s) as approved by City under this Agreement under which there is no cash out to Developer that is not used for Project related expenses as approved by the City Manager at his or her discretion upon application by Developer. (g) No subordination may limit the effect of the City Deed of Trust before a foreclosure of the Permitted Senior Lien, nor require consent of the holder of the Senior Loan to exercise any remedies by City under the City Documents. (h) Upon a determination by the City Manager that the conditions in this Section have been satisfied, the City Manager or his/her designee will be authorized to execute the approved subordination agreement without the necessity of any further action or approval.

5.4.2 No Subordination of Regulatory Agreements . It is mutually contemplated that the City Regulatory Agreement shall not be subordinated at any time during or with respect to the Term. The City Manager, on behalf of City, and the City Manager, on behalf of City, are each delegated the authority to and shall have the right to consider subordination as to periods of time other 626

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than the first fifty-five (55) years of the Term upon a compelling showing that: (i) such subordination is necessary to accomplish the financing of the Improvements; (ii) the party or parties requesting such subordination are acting reasonably; (iii) Developer has exhausted all reasonable efforts to successfully accomplish the financing of the Improvements; (iv) the provision of reasonable countervailing consideration to City has been considered and is made available to the extent feasible, such as expansions of the rights of City as set forth under Section 10.6(b) of this Agreement; (v) the resulting terms and conditions reasonably protect the interests of City (as determined by the City Manager and the City Manager, respectively); and (vi) without limitation as to other rights or remedies of City, City shall have those rights described in Section 10.6(b) of this Agreement. In addition to the foregoing portion of this Section 5.4.2, each of the City Manager and the City Manager is delegated authority to consider, at his or her respective discretion, such requests in connection with the provision of financing for the Development, as may be received to approve (at the discretion of each) accommodations similar to those which have previously been ap proved by City in connection with other affordable housing transactions within the five (5) years preceding the Date of Agreement.

5.5 Repayment.

5.5.1 Repayment of the City Loan. The City Loan shall be repaid as follows:
(a) Term of the City Loan. The City Loan shall have a term that expires on the date fifty-seven (57) years from the Close of Escrow. (b) Payments. Commencing on the May 1 first occurring after the Year in which the permanent loan closes for the Project but not later than six (6) months after the completion of the Improvements pursuant to this Agreement, and on each May 1 thereafter throughout the term of the City Loan, Developer shall make repayments of the City Loan equal to the Applicable Percentage of Residual Receipts, if any (which pro -rata share shall be calculated based on the original principal amount of other financing which is to be paid from Residual Receipts ). Payments made shall be credited first against accrued interest and then against outstanding principal of the City Loan. (c) Interest on City Loan. Subject to the provisions of subsection (d) below, all principal and interest on the City Loan shall, at the option of City, be due and payable upon the earliest of: (1) a transfer other than a transfer permitted or approved by City as provided in Section

8.3 below; (2) the occurrence of an uncured Default by Developer for which City elects to exercise its right to cause the City Loan to become immediately due and payable; or (3) the expiration of the term of the City Loan.
(d) Prepayment. Developer shall have the right to prepay the City Loan at any time. However, this Agreement, the City Lease, and the City Regulatory Agreement shall remain in effect for their entire respective terms, regardless of any prepayment or timely payment of the City Loan.

5.6 Conditions Precedent to Disbursement of City Loan. City will disburse the City Loan subject to the conditions precedent set forth below. City shall not be obligated to make any disbursements of the City Loan proceeds unless the following conditions precedent are satisfied:
(a) There exists no Default by Developer nor any act, failure, omission or condition that would constitute a Default by Developer under this Agreement; 627

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(b) The conditions precedent described in Section 4.1 have been satisfied or expressly waived in writing by City; and
(c) The undisbursed proceeds of the City Loan, together with other funds or firm commitments for funds that Developer has obtained in connection with the construction of the Development are not less than the amount that City determines is necessary to pay for development costs and to satisfy all of the covenants contained in this Agreement. (d) With respect to disbursements for construction costs, City has received a written draw request from Developer, setting forth the proposed uses of funds consistent with the Final Financing Package, the nu mber of funds needed, and, where applicable, a copy of the bill or invoice covering a cost incurred or to be incurred; and lien releases from Developer’s general contractor and/or mechanics lien title insurance endorsements reasonably acceptable to City.

5.7 Non-Recourse Obligation.

5.7.1 Limitation of Liability. Except as provided below, Developer shall not have any direct or indirect personal liability for payment of the principal of, or interest on, the City Loan or the performance of the covenants of Developer under the City Deed of Trust.

The sole recourse of City with respect to the principal of, or interest on, the City Promissory Note and defaults by Developer in the performance of its covenants under the City Deed of Trust shall be to the property described in the City Deed of Trust; provided, however, that nothing contained in the foregoing limitation of liability shall: (1) limit or impair the enforcement against all such security for the City Promissory Note of all the rights and remedies of City thereunder; or (2) be deemed in any way to impair the right of City to assert the unpaid principal amount of the City Promissory Note as demand for money within the meaning and intendment of Section 431.70 of the California Code of Civil Procedure or any successor provision thereto.

5.7.2 Exceptions. The foregoing limitation of liability is intended to apply only to the obligation for the repayment of the principal of, and payment of interest on the City Promissory Note and the performance of Developer’s obligations under the City Deed of Trust, except as hereafter set forth; nothing contained herein is intended to relieve Developer of its s indemnification obligations under this Agreement, or liability for: (1) fraud or willful misrepresentation; (2) the failure to pay taxes, assessments or other charges which may create liens on Developer’s interest in the Property that are payable or applicable prior to any foreclosure under the City Deed of Trust (to the full extent of such taxes, assessments or other charges); and (3) the misappropriation of any proceeds under any insurance policies or awards resulting from condemnation or the exercise of the power of eminent domain or by reason of damage, loss or destruction to any portion of the Development.

6. SCOPE OF DEVELOPMENT; INSURANCE AND INDEMNITY, FINANCING

6.1 Scope of Development . Developer shall develop the Improvements in accordance with the Entitlements as well as the Scope of Development, as the Scope of Development may be amended under Section 2.2, and the approved plans, drawings and documents for the Improvements.

Plans shall be subject to the City’s development entitlement process, which may include, but is not limited to: design review, consideration of conditional use permit, lot line adjustment/parcel map, and CEQA compliance. In the event of any inconsistency between the Scope of Development and the plans for the Improvements which have been approved by City, the approved Development plans shall 628

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control. In connection with seeking land use approvals for development of the Portion A Site , Developer shall submit a packet commonly referred to by City as a “Universal Application Package” which will include basic concept drawings (“Basic Concept Drawings”) for development of the Improvements. City will review the Basic Concept Drawings and the remainder of the Univ ersal Application Package as submitted in accordance with the City’s customary process, including design review consistent with the architectural guidelines for that area designated by City as the “Quarry District.”

6.1.1 Existing Approvals. Prior to the Date of Agreement, Developer has obtained the Entitlements; Developer may construct in conformity with the Entitlements. If any changes are proposed, then, b efore commencement of construction of the Improvements or other works of improvement upon the Portion A Site (to the extent such construction would rely upon changes after the Entitlements were given in 2025), Developer shall submit to City a Universal Application Package that will include any plans and drawings (collectively, the “Design Development Drawi ngs”) which may be required by City with respect to any permits and entitlements which are required to be obtained to develop the Improvements, which City shall comment on and return to Developer within thirty (30) days from the date of receipt thereof, or sixty (60) days in the case of design review; if the City takes longer to review plans, times for performance by Developer will be deemed extended by the time in excess of the foregoing time limits . Developer, on or prior to the date set forth in the Sch edule of Performance, shall submit to City such plans for the Improvements as required by City in order for Developer to obtain building permits for the Improvements. Within thirty (30) days after City’s disapproval or conditional approval of such plans (or sixty (60) days in the case of design review) , Developer shall revise the portions of such plans identified by City as requiring revisions and resubmit the revised plans to City. Developer shall include in its plans a description of any joint or reci procal use as between the Portion A Site and the Portion B Area, including without limitation ingress, egress, parking, and the use of common area facilities.

6.1.2 City Review and Approval. City shall have all rights to review and approve or disapprove all Design Development Drawings and other required submittals in accordance with the City Code, and nothing set forth in this Agreement shall be construed to constitute City’s approval of any or all of the Design Development Drawings or other entitlements or to limit or affect City’s review and right to approve, approve subject to conditions, or disapprove Design Development Drawings, plans, drawings, applications, or submittals.

6.1.3 Revisions. Any and all change orders or revisions required by City and its inspectors under the City Code and including without limitation all applicable Uniform Codes (e.g.

Building, Plumbing, Fire, Electrical, etc.) and under other applicable laws and regulations shall be included by Developer in its Design Development Drawings and othe r required submittals and shall be completed during the construction of the Improvements.

6.1.4 Defects in Plans. City shall not be responsible either to Developer or to third parties in any way for any defects in the Design Development Drawings, nor for any structural or other defects in any work done according to the approved Design Development Drawings, nor for any delays reasonably caused by the review and approval processes established by this Section 6.1.4.

6.1.5 Land Use Approvals . Developer has obtained the E ntitlements. If any changes are proposed, then before commencement of construction of the Improvements or other works of improvement upon the Portion A Site , Developer shall, at its own expense, secure or cause to be secured any and all land use and other entitlements, permits, and approvals which may be required for 629

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the Improvements by City or any other governmental agency affected by or having jurisdiction over such construction or work, except for those which are the responsibility of City to the extent, if any, as set forth herein, including without limitation a license agreement between Developer and City allowing entry onto the Portion A Site which indemnifies the Indemnitees from any claims made in connection with the activities of Developer. Developer shall, without limitation, apply for and secure, and pay all costs, charges and fees associated therewith, all permits and fees required by City, the County of Placer, and other governmental agencies with jurisdiction over the Improvements.

6.2 Time of Performance; Progress Reports . Developer shall submit all Design Development Drawings, commence and complete all construction of the Improvements, and satisfy all other obligations and conditions of this Agreement within the times established therefor in this Agreement. Construction of the Improvements shall be commenced on or before the time established therefor in the Schedule of Performance. Once construction is commenced, it shall continuously and diligently be pursued to completion and shall not be abandoned for more than thirty (30) days except when due to causes beyond the control and without the fault of Developer as set forth in Section 9.10.

During the course of construction and prior to issuance of the Certificate of Completion, Developer shall provide timely reports of the progress of construction when requested by the City Manager .

Developer shall complete construction of all of the Improvements on the Portion A Site within twenty (20) months after the first to occur of (i) commencement of construction or (ii) the time established by this Agreement for commencement of construction.

6.3 Cost of Development. The cost of planning, designing, developing, and constructing the Improvements and the cost of any mapping the Portion A Site shall be borne solely by Developer (however the City Loan shall be used to pay a portion of such costs). All fees imposed by any governmental entity in connection with the acquisition of the Portion A Site or the development of the Improvements shall be borne by Developer and shall be paid when due by Developer . City shall be responsible for and bear the costs, if any, associated with the application of Relocation Laws to the Development to the extent described above within the definition of “Relocation”. In addition, in the event City desires to rent all or a portion of the Portion A Site for a period commencing after the Date of Agreement (“Post -Agreement Rentals”), any Post -Agreement Rental shall not interfere with Developer’s rights under this Agreement, and City shall be responsible for compliance with Relocation Laws with respect to any such Post-Agreement Rentals in a manner which will not delay or otherwise interfere with the Closing or Developer’s development of the Improvements, including but not limited to a requirement that the Portion A Site shall be free of all rights of occupancy or possession in any third parties no later than the Closing.

6.3.1 Impact Fees. Developer shall pay to City, or cause to be disbursed by the lender making the Primary Construction Loan to City, all of the City Impact Fees not later than concurrently with the closing of the Primary Construction Loan.

6.4 City Loan. The City Loan shall be deemed to be a loan for the benefit of (and payable by) Developer and shall be repaid as set forth in the City Promissory Note. Interest shall accrue on the amounts disbursed as set forth in the City Promissory Note. The City Promissory Note shall be secured by the City Deed of Trust. The obligation of Developer to repay the City Loan is set forth in the City Promissory Note. The City Deed of Trust is to be recorded against Developer’s interest in the Portion A Site (which deed of trust shall be subordinate to liens securing repayment of the Primary Construction Loan and , subsequently, the Primary Permanent Loan ). The Initial Financing Plan as well as the Final Financing Plan shall provide for payments to be made to the City under the City Loan from an amount of not less than the Applicable Percentage of Residual Receipts. 630

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6.5 Insurance Requirements. Commencing as of Leasehold Transfer and continuing throughout the Required Covenant Period, and, in addition at all times during which Developer is conducting work on the Portion A Site or any portion thereof, including times prior to the Leasehold Transfer, Developer shall maintain at Developer’s sole expense, with insurers reasonably approved by City, the following policies of insurance in form and substance reasonably satisfactory to City: (i) at all times commencing with the Leasehold Transfer and continuing throughout the Required Covenant Period, Developer shall provide those coverages described in the Insurance During the Remainder of Lease Term; and (ii) at all times during the period commencing with the Leasehold Transfer and ending as of end of the Required Covenant Period when construction is taking place on the Portion A Site, the Developer shall additionally provide those coverages set forth in the Insurance During Construction.

6.6 Obligation to Repair and Restore Damage Due to Casualty. If during the period of construction the Improvements shall be totally or partially destroyed or rendered wholly o r partly uninhabitable by fire or other casualty required to be insured against and recoverable by insurance proceeds held by such policy(ies) maintained by Developer, Developer shall proceed to obtain insurance proceeds as soon as practicable and take all steps necessary to begin reconstruction and, as soon as practicable upon receipt of insurance proceeds, to commence the repair or replacement of the Improvements to substantially the same condition as the Improvements are required to be constructed pursuant to this Agreement, whether or not the insurance proceeds are sufficient to cover the actual cost of repair, replacement, or restoration, and Developer shall complete the same as soon as practicable thereafter so that the Improvements can be occupied as an affordable housing project in accordance with this Agreement. City acknowledges that the availability of insurance proceeds is subject to rights of the Investor and the Approved Construction Lender. In no event shall the repair, replacement, or restoration period exceed thirty (30) months from the date Developer obtains insurance proceeds unless the City Manager, in his or her sole and absolute discretion, approves a longer period of time. City shall cooperate with Developer, at no expense to City, in obtaining any governmental permits required for the repair, replacement, or restoration. If, however, then-existing laws of any other governmental agencies with jurisdiction over the Portion A Site do not permit the repair, replacement, or restoration, Developer may elect not to repair, replace, or restore the Improvements by giving notice to City (in which event Developer will be entitled to all insurance proceeds after paying to City from such proceeds an amount equal to any assistance expen ded by City but Developer shall be required to remove all debris from the Portion A Site ) or Developer may reconstruct such other improvements on the Portion A Site as are consistent with applicable land use regulations and approved by City and the other governmental agency or agencies with jurisdiction, and City may pursue remedies of its choosing under this Agreement, including without limitation termination.

6.7 Indemnity. Developer shall defend (by counsel satisfactory to City), indemnify and save and hold harmless City and their officers, contractors, agents and employees (collectively, the “Indemnitees”) from and against all claims, damages, demands, actions, losses, liabilities, costs and expenses (including, without lim itation, attorneys’ fees and court costs) arising from or relating to:
(i) Developer’s performance of its obligations under this Agreement; (ii) a claim, demand or cause of action that any person has or asserts against Developer; (iii) any act or omission of Developer, any contractor, subcontractor or material supplier, engineer, architect or other person under Developer’s control or under contract with Developer with respect to the Portion A Site ; (iv) the conditions, use, condition of title, or any claims associated with the acquisition by CHW or Developer of the Developer Area, the transfer of the Developer Area to City, or the transfer by City of a leasehold interest in the Developer Area under this Agreement; or (v) Developer’s ownership, occupancy or use of the Portion A Site, including without limitation tenant selection. Notwithstanding the foregoing, Developer shall not be obligated to indemnify the Indemnitees with respect to the consequences of any act of gross 631

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negligence or willful misconduct of any of the Indemnitees. Developer’s obligations under this Section 6.7 shall survive the issuance of the Certificate of Completion and termination of this Agreement; the requirements under this Section 6.7 are in addition to and do not limit the obligations of Developer under the City Lease.

Developer shall reimburse City immediately upon written demand for all costs reasonably incurred by City (including the reasonable fees and expenses of attorneys, accountants, appraisers and other consultants, whether the same are independent contractors or employees of City) in connection with the enforcement of the Project Documents and all related matters including the following:
(a) City’s commencement of, appearance in, or defense of any action or proceeding purporting to affect the rights or obligations of the parties to any Project Document, and (b) all claims, demands, causes of action, liabilities, losses, commissions and other costs against which City is indemnified under the Project Documents. Such reimbursement obligations shall bear interest based upon the amounts and times of disbursement by City, provided that City gives written demand to Developer at the Applicable Interest Rate. Such reimbursement obligations shall survive t he issuance of the Certificate of Completion and termination of this Agreement and are in addition to and do not limit the obligations of Developer under the City Lease.

Developer shall indemnify City from any real estate commissions or brokerage fees which may arise from this Agreement or the Portion A Site , including without limitation the acquisition of the Portion A Site by Developer, or the leasing of dwelling units on the Portion A Site ; in addition, Developer shall indemnity City from any real estate commissions or brokerage fees which may arise from the acquisition by CHW (or Developer) of the Developer Area or the conveyance by CHW (or Developer) of the Developer Area to City.

In addition, and without limitation to the foregoing, Developer agrees to indemnify, defend and hold City harmless from and against any claim, action, suit, proceeding, loss, cost, damage, liability, deficiency, fine, penalty, punitive damage, or expense (including, without limitation, reasonable attorneys’ fees), resulting from, arising out of, or based upon (i) the presence, release, use, generation, discharge, storage or disposal of any Hazardous Materials on, under, in or about, or the transportation of any such Hazardous Materials to or from, the Portion A Site caused or contributed to by Developer or which occurs after the Closing, or (ii) the violation, or alleged violation, by Developer or anyone acting by or through Developer, of any statute, ordinance, order, rule, regulation, permit, judgment or license re lating to the use, generation, release, discharge, storage, disposal or transportation of Hazardous Materials on, under, in or about, to or from, the Portion A Site which is caused or contributed to by Developer or which occurs after the Closing. This indemnity shall include, without limitation, any damage, liability, fine, penalty, parallel indemnity after closing cost or expense arising from or out of any claim, action, suit or proceeding for personal injury (including sickness, disease or death), tangible or intangible property damage, compensation for lost wages, business income, profits or other economic loss, damage to the natural resource or the environment, nuisance, contamination, leak, spill, release or other adverse effect on the environment. At the request of Developer, City shall cooperate with and assist Developer in its defense of any such claim, action, suit, proceeding, loss, cost, damage, liability, deficiency, fine, penalty, punitive damage, or expense; provided that City shall not be obl igated to incur any expense in connection with such cooperation or assistance.

Notwithstanding anything contained herein to the contrary, Developer shall not indemnify City for any claims arising from City’s gross and active negligence or City’s willful misconduct.

6.8 Rights of Access. Prior to the issuance of the Certificate of Completion, for purposes of assuring compliance with this Agreement, representatives of City shall have the right of access to 632

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the Portion A Site, without charges or fees, at normal construction hours during the period of construction for the purposes of this Agreement, including but not limited to, the inspection of the work being performed in constructing the Improvements so long as City representatives comply with all safety rules. City representatives shall, except in emergency situations, notify Developer prior to exercising its rights pursuant to this Section 6.8. In addition, representatives of City shall have access to the Portion A Site in connection with the enforcement of laws, including without limitation the City Code to the extent used in connection with the exercise of police powers of City without regard to any limitations otherwise set forth in this Section 6.8.

6.9 Compliance With Laws . Developer shall carry out the design, construction and operation of the Improvements in conformity with all applicable laws, including all applicable state labor standards and federal prevailing wage laws (including without limitation provisions for payment of prevailing wages in connection with all construction of the Improvements to the extent applicable), the City zoning and development standards, building, plumbing, mechanical and electrical codes, and all other provisions of the City Code, and the Fair Housing Act, 42 U.S.C. Section 3601 et seq. (and 24 C.F.R. Part 100), the Americans With Disabilities Act, 42 U.S.C. Section 12101, et seq., Government Code Section 4450, et seq., Government Code Section 11135, et seq., the Unruh Civil Rights Act, Civil C ode Section 51, et seq., and the California Building Standards Code, Health and Safety Code Section 18900, et seq. Developer, including but not limited to its contractors and subcontractors, shall comply with Labor Code Section 1720, et seq., and its implementing regulations, regarding the payment of prevailing wages (the “State Prevailing Wage Law”) and, if applicable, federal prevailing wage law (“Federal Prevailing Wage Law” and, together with State Prevailing Wage Law, “Prevailing Wage Laws”) with rega rd to the construction of the Improvements, but only if and to the extent such sections are applicable to the development of the Improvements. Developer shall be solely responsible for determining and effectuating compliance with any applicable Prevailing Wage Laws, and City make s no final representation as to the applicability or non -applicability of the Prevailing Wage Laws to the Improvements, or any part thereof. Developer hereby releases from liability, and agrees to indemnify, defend, assume all responsibility for and hold each of City, and their respective officers, employees, agents and representatives, harmless from any and all claims, demands, actions, suits, proceedings, fines, penalties, damages, expenses resulting from, arising out of, or based upon Developer’s acts or omissions pertaining to the compliance with the Prevailing Wage Laws for the Improvements.

Without limitation as to Section 6.7 of this Agreement, Developer shall indemnify, protect, defend and hold harmless City and its officers , employees, contractors and agents, with counsel reasonably acceptable to City, from and against any and all loss, liability, damage, claim, cost, expense and/or “increased costs” (including reasonable attorney’s fees, court and litigation costs, and fees of expert witnesses) which, in connection with the development, construction, and/or operation of the Improvements, including, without limitation, any and all public works (as defined by applicable law), results or arises in any way from any of the follow ing: (1) the noncompliance by Developer of any applicable local, state and/or federal law, including, without limitation, any applicable federal and/or state labor laws (including, without limitation, if applicable, the requirement to pay state prevailing wages and/or federal prevailing wages); (2) the implementation of Section 1781 of the Labor Code, as the same may be amended from time to time, or any other similar law; and/or (3) failure by Developer to provide any required disclosure or identification as required by Labor Code Section 1781, as the same may be amended from time to time, or any other similar law. It is agreed by the parties that, in connection with the development of the Improvements, including, without limitation, any and all public works (as defined by applicable law), Developer shall bear all risks of payment or non -payment of prevailing wages under California law and/or the implementation of Labor Code Section 1781, as the 633

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same may be amended from time to time, and/or any other simila r law. “Increased costs,” as used in this Section 6.9, shall have the meaning ascribed to it in Labor Code Section 1781, as the same may be amended from time to time. The foregoing indemnity shall survive termination of this Agreement and shall continue after completion of the construction and development of the Improvements by Developer.

6.10 Nondiscrimination in Employment. Developer certifies and agrees that all persons employed or applying for employment by it, its affiliates, subsidiaries, or holding companies are and will be treated equally by it without regard to, or because of race, color, religion, ancestry, national origin, sex, sexual orientation, age, pregnancy, childbirth or related med ical condition, medical condition (cancer related) or physical or mental disability.

6.11 Taxes and Assessments. Subject to Developer’s right to contest taxes and assessments as provided in Section 7.2(c) of the City Lease, Developer shall pay prior to delinquency all ad valorem real estate taxes and assessments on the Portion A Site. Developer shall remove or have removed any levy or attachment made on any of the Portion A Site or any part thereof which is owned or leased by Developer, or assure the satisfaction thereof within a reasonable time, but in no event to exceed sixty (60) days. Developer shall additionally defend, indemnify, and hold harmless City from and against any taxes, assessments, mechanic’s liens, claims of materialmen and suppliers, or other claims by private parties in connection with (a) activities undertaken by Developer or (b) the Portion A Site.

6.12 Liens and Stop Notices. Developer shall not allow to be placed on the Portion A Site or any part thereof any lien or stop notice. If a claim of a lien or stop notice is given or recorded affecting the Improvements Developer shall within thirty ( 30) days of such recording or service or within five (5) days of City’s demand whichever last occurs:
(a) pay and discharge the same; or
(b) affect the release thereof by recording and delivering to City a surety bond in sufficient form and amount, or otherwise; or
(c) provide City with indemnification from the Title Company against such lien or other assurance which City deems, in its sole discretion, to be satisfactory for the payment of such lien or bonded stop notice and for the full and continuous protection of City from the effect of such lien or bonded stop notice.

6.13 Certificate of Completion. Within fifteen (15) days after receipt of written request by Developer after completion of the Improvements in conformity with this Agreement, City shall furnish Developer with a “Certificate of Completion,” substantially in the form of attached hereto.

City shall not unreasonably withhold such Certificate of Completion. Th e Certificate of Completion shall be a conclusive determination of satisfactory completion of the Improvements and the Certificate of Completion shall so state. If City refuses or fails to timely furnish a Certificate of Completion after written request f rom Developer, the Certificate of Completion shall be deemed to have been issued unless City shall, within fifteen (15) days of receipt of written request therefor, provide Developer with a written statement of the reasons City refused or failed to furnish the Certificate of Completion. The statement shall also contain City’s opinion of the actions Developer must take to obtain the Certificate of Completion. The Certificate of Completion is not a notice of completion as referred to in Section 3093 of the California Civil Code.
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6.14 Further Assurances . Developer shall execute and acknowledge (or cause to be executed and acknowledged) and deliver to City all documents, and take all actions, reasonably required by City from time to time to confirm the rights created or now or hereafter intended to be created under the Project Documents or otherwise to carry out the purposes of the Project Documents.

6.15 Financing of the Improvements . Financing shall be provided consistent with the Proof of Financing Commitments.

6.15.1 Approval of Financing . As required herein and as an City Condition Precedent to the Leasehold Transfer, Developer shall submit to City evidence reasonably satisfactory to the City Manager that Developer has obtained sufficient equity capital or has arranged for and obtained a binding commitment for construction financing which, inclusive of proceeds of the City Loan, is necessary to unde rtake the development of the Portion A Site and the construction of the Improvements in accordance with this Agreement (“Proof of Financing Commitments”). This requirement shall be implemented as follows: on or before the time set forth in the Schedule o f Performance for the recording of documents, but not later than thirty (30) days prior to Closing, and prior to taking possession of the Portion A Site, Developer shall submit to the City Manager a proposed final financing package (the “Initial Proposed F inancing Package”) which identifies all funding, including sources, amounts, timing and mechanics for disbursement, sufficient to finance the development of the Improvements in conformity with this Agreement. While the Base Pro Forma sets forth initial financing assumptions, it is mutually acknowledged that Developer may seek additional funding sources and that the actual proposed financing may vary from that described in the Base Pro Forma. Upon receipt of such submittal from Developer of the Initial Proposed Financing Package, the City Manager (and nominees of his choosing for this purpose) will review the Initial Proposed Financing Package and will confer with Developer regarding the Initial Proposed Financing Package.

The City Manager may make suggest ions and propose modifications or substitutions to the Initial Proposed Financing Package. The parties contemplate that more than one submittal may be necessary to achieve a submitted financing package that is approved by the City Manager, and that a consultative process shall occur in connection with each such submittal. At such point as the City Manager may determine, in his or her discretion, to approve a proposed financing package, upon approval by the City Manager, such financing package shall be referred to as the “Final Financing Package.” Attachments hereto shall be subject to change by the terms of the Final Financing Package. The Initial Financing Package and the Final Financing Package shall include the provisions of Section 10.6(c) of this Agreement.

By its approval of this Agreement, the City Council of the City has delegated to the City Manager full authority to make all determinations on behalf of City for all purposes of Section 6.15, including all subparts thereof.

Each of the Initial Financing Package and the Final Financing Package shall provide for the payment by Developer to City of payments of the Applicable Percentage of Residual Receipts under the City Loan and for a Developer Fee not in excess of the limitati on established with respect thereto under the definition of Developer Fee in this Agreement.

The parties intend that Developer is to obtain equity financing for the construction and operation of the Development including the use of Tax Credits (in an amount of not less than the Tax Credit Amount) and obtaining capital contributions from limited partners in the Development in consideration primarily for the receipt of the Tax Credits received by Developer with respect to the Development.
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(a) Required Financing Submittals; Submittal of Construction Contract .

Such evidence of financing for the Development and readiness to commence construction of the Development shall include all of the following:
(i) An updated pro forma and final development budget for the Development, including the Initial Proposed Financing Package, showing the projected costs of construction of the Development, including all on site and offsite improvements to be constructed in connection therewith.
(ii) A copy of the lender’s firm commitment obtained by Developer for the Primary Construction Loan for the Development and, when available, copies of all loan documents evidencing the Primary Construction Loan therefor. The Primary Construction Loan commitments for financing shall be in such form and cont ent acceptable to City and its financial advisor(s) and its legal advisor(s) and as such reasonably evidences a legally binding, firm and enforceable commitment, subject only to the Lender’s customary and normal conditions and terms and subject to the requirements of this Section 6.15. Developer shall provide written certification to City that the loan documents submitted are substantially in the form of the actual loan documents to be executed by Developer concurrently with the Closing. If the Lender req uires a subordination agreement between or among Lender, City and/or Developer, concerning the relative priority among deed of trust, City shall review the form of subordination subject to the reasonable review and approval of the City Manager and legal counsel(s), subject to one or more of the conditions set forth in Section

5.4 necessary for the Primary Construction Loan to be a title insured first monetary lien on the Development.
(iii) A current certified financial statement of Developer (and all partners and members thereof, except the Investor Limited Partner) and/or other documentation satisfactory to City as evidence of other sources of capital sufficient to demonstrate that Developer has adequate funds to cover the difference, if any, between construction and completion costs, and the financing authorized by the Tax Credits, Primary Construction Loan, the City Loan and any additional subsidies, sources of funding, or financing obtained by Developer for the development of the Development.
(iv) Copies of the construction contract(s).

City, which may act through its City Manager, shall have the right to approve or disapprove such evidence of financing within fifteen (15) business days of submission by Developer to City of all complete items required by this Section 6.15 or as otherwise reasonably imposed by Developer’s financing and such approval or disapproval sha ll be provided not less than fifteen (15) business days prior to the date scheduled for the Closing (so long as City has had no fewer than thirty (30) days for review of a complete submittal). Failure by City to approve evidence of financing within such time period shall constitute disapproval unless otherwise agreed between City and Developer. In this regard, Developer agrees it shall use best efforts to cause its Primary Construction Lender to timely provide complete drafts of documents for review by City and its legal counsel(s) to perform within such time frames. Approval shall not be unreasonably withheld or conditioned. If City disapproves any such evidence of financing, City shall do so by written notice to Developer stating the reasons for such disapproval and Developer shall promptly obtain and submit to City new evidence of financing within reset but equal time periods. If Developer’s submission of new evidence of financing is timely and complete and provides City with adequate time to review s uch evidence within the times established in this Section 6.15, City shall approve or disapprove such new evidence of financing in 636

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the same manner and within the same times established in this Section 6.15 for the approval or disapproval of the evidence of financing as submitted to City initially. The Closing shall be extended as necessary to accommodate the time necessary to obtain the City Manager’s approval hereunder.

The evidence of financing shall be deemed to be an ongoing representation by Developer that the sum total of all sources of financing are at least equal to the amount of the approved Project costs as set forth in the Final Development Budget for the Development and that such Final Development Budget conforms to the Tax Credit Applications and the preliminary reservation of Tax Credits, and any and all updates thereto submitted by Developer to TCAC. Once the complete evidence of financing is approved by City, Developer shall promptly notify City in writing of any change in, additional conditions to, or additional sources of financing, including without limitation, the award of state or federal Tax Credits, and any updates or additional information material or relevant to such financing and/or the Tax Credits. The representations made by Developer with respect to the budgets and costs for the Development and the sources of funding and method of financing for the Development, inclusive of all submittals and information related to the Tax Credits, w ere and remain the basis used by City to negotiate the financial terms of this Agreement. (b) Tax Credit Equity. Developer has indicated that it has obtained equity financing for the construction and operation of the Development including the use of Tax Credits and obtaining capital contributions from Limited Partners in Developer in consideration primarily for the receipt of the Tax Credits received by Developer with respect to the Development. The following requirements must be satisfied in order for the eq uity financing for Tax Credit funding for the Development to be approved by City pursuant to this Section 6.15:
(i) Developer understands and agrees that Developer and/or CHW may be required to provide an operating deficit guaranty, tax credit recapture guaran ty, and/or other guaranties which may be required with respect to the Limited Partners’ investment in the Development.

If required for such financing, the execution of such guaranties shall be an additional City Condition Precedent for the purposes of Section 4.1.
(ii) Developer shall submit the following documents as evidence of financing prior to the time set forth in the Schedule of Performance for the recording of documents, but not later than the Closing: (a) a copy of a legally binding, firm and enforceable loan commitment(s) or approval(s) obtained by Developer from unrelated financial institutions for the mortgage loan or loans for financing to fund the construction of the Development, subject to such lenders’ reasonable, customary and normal conditions and terms, (b) a limited partnership agreement or funding agreement from the equity investors in the Development which demonstrates that Developer has sufficient funds for such construction, and that such funds have been committed to such construction, an d a current financial statement of Developer, (c) a copy of a Preliminary Reservation of Tax Credits from the California Tax Credit Allocation Committee for Tax Credits for the construction of the Development, (d) a binding agreement for the purchase of the Tax Credits, and/or (e) other documentation satisfactory to City as evidence of other sources of capital, all of which together are sufficient to demonstrate that Developer has adequate funds to construct and complete the Development. (iii) The equity investme nt of the Limited Partners of the limited partnership shall not be less than the approximate prevailing price for 4% Tax Credits at such time, taking into consideration all relevant factors such as timing of required payments , the amount of the Tax Credits, and the market for tax credits at that time. 637

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(iv) City acknowledges that a Lease Rider for the benefit of TCAC is contemplated in connection with the award of Tax Credits. (c) Required Submissions . Developer shall submit the following documents as evidence of Tax Credit financing:
(i) The Partnership Agreement or equivalent funding commitment letter from the equity investors in the Development which demonstrates that Developer has sufficient funds and committed capital/equity for commencement through completion of construction, and that such funds have been committed to construction of the Development, and a current financial statement of Developer.
(ii) A complete copy of each application for Tax Credits sand supporting documentation submitted to TCAC by Developer, wit hin five (5) days following Developer’s submission thereof to TCAC.
(iii) A copy of a preliminary reservation letter from TCAC notifying Developer that an allocation 4% Tax Credits for not less than the Tax Credit Amount, has been reserved for construction of th e Development, and further documentation demonstrating that Developer remains eligible and qualified to receive such allocation, along with certification that there have not been any material changes to the information provided by Developer in the applicat ions for Tax Credits, as defined and referenced in such reservation letters, and that if there are material changes then such information will be provided to TCAC (and City) forthwith. (d) Approval of Financing. As required above in this Section, Developer shall submit to City evidence that Developer has obtained sufficient equity capital and/or has arranged for and obtained a binding commitment for construction financing on then commercially reasonable terms necessary to undertake the development of the Porti on A Site and the construction of the Improvements in accordance with this Agreement (“Proof of Financing Commitments”).

City shall reasonably approve or disapprove such evidence of financing within thirty (30) days of receipt of each of the respective submittals, provided that such submittal is complete.

Approval shall not be unreasonably withheld so long as the terms and conditions of the financing are consistent with this Agreement, including without limitation the availability of the Tax Credit Amount and the acknowledgment and consent by such lender to City Regulatory Agreement as senior encumbrances, with the further proviso that if the Tax Credit Amount exceeds the amount set forth therefor on the Base Pro Forma, Developer shall agree that the excess remaining after applying amounts necessary to defray Cost Overrun Amounts theretofore experienced or the Developer Fee (the “Excess Amount”) shall be applied first to fund the Operating Reserve and the Capital Replacement Reserve and, to the extent that a ny surplus remains, to pay the Deferred Developer Fee, then to the extent any surplus remains, to be treated as Gross Revenues under the City Lease; financing terms shall be reasonable and customary. If City shall disapprove any such evidence of financing, City shall do so by Notice to Developer stating the reasons for such disapproval and Developer shall endeavor to promptly obtain and submit to City new evidence of financing. City shall approve or disapprove such new evidence of financing in the same manner and within the same times established in this Section

6.15 for the approval or disapproval of the evidence of financing as initially submitted to City.

Developer shall close the approved Tax Credit financing prior to or concurrently with the Closing. 638

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The Proof of Financing Commitment shall include a copy of a legally binding, firm and enforceable loan commitment(s) obtained by Developer from one or more financial institutions for the mortgage loan or loans for financing to fund the construction and completion of the Improvements.

The parties intend that Developer is to obtain equity financing for the construction and operation of the Development including the use of Tax Credits (in an amount of not less th an the Tax Credit Amount) and obtaining capital contributions from limited partners in the Development in consideration primarily for the receipt of the Tax Credits received by Developer with respect to the Development.

In no event shall City be obligated to provide any financial assistance or subsidy to the Development other than as expressly set forth in this Agreement. City shall have no obligation to make any expenditures under this Agreement.

Developer understands and agrees that Developer and/or CHW may be required by third party lenders to provide an operating deficit guaranty, tax credit recapture guaranty, and/or other guaranties which may be required with respect to the limited partners’ investment in the Development. If required for such financing, the execution of such guaranties shall be an additional condition precedent for the purposes of Section 4.1.

Developer shall submit the following documents as evidence of financing:
(a) a copy of a firm loan commitment(s) or approval(s) obtained by Developer from unrelated financial institutions for the mortgage loan or loans for financing to fund the construction of the Development, subject to such lenders’ reasonable, customary and normal conditions a nd terms, (b) a limited partnership agreement or funding agreement from the equity investors in the Development which demonstrates that Developer has sufficient funds for such construction, and that such funds have been committed to such construction, and a current financial statement of Developer and Developer’s other sources of equity capital, (c) a copy of a preliminary reservation of Tax Credits (and when available, the final reservation of Tax Credits) from the California Tax Credit Allocation Committe e for Tax Credits for the construction of the Development (or other evidence satisfactory to the City Manager that Tax Credits will be available), (d) a binding agreement for the purchase of the Tax Credits, and (e) such other documentation as may be reaso nably necessary to satisfy City as to the availability, commitment and adequacy of other sources of capital, all of which together are sufficient to demonstrate that Developer has adequate funds committed for the construction and completion of the Development.

6.15.2 No Encumbrances Except Mortgages, Deeds of Trust, or Sale and Lease Back for Development. Mortgages, deeds of trust and subleases and subleases back on Developer’s leasehold (but not as to the underlying fee) shall be permitted before the completion of the Improvements only with City’s prior written approval, but only for the purpose of securing loans of funds to be used for financing the construction of the Improvements (including architecture, engineering, legal, construction period carrying costs such as property taxes, insurance and interest, and related direct costs as well as indirect costs) on or in connection with the Portion A Site, and the obtaining of a permanent loan (as well as swap contracts, if any, entered into in connection therewith which are consistent with the terms of this Agreement concerning no cross-collateralization or change in security) in the amount of the outstanding balance of the construction loan. In no event, however, shall the amount or amounts of indebtedness secure d by mortgages or deeds of trust on Developer’s leasehold interest as to the Portion A Site exceed the projected Developer’s cost, as evidenced by a pro 639

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forma and a construction contract which have been approved by the City Manager in accordance with this Agreement and which set forth such costs, unless the written approval of the City Manager is first obtained. Developer shall notify City in advance of any mortgage, deed of trust or sublease and sublease back financing, if Developer proposes to enter into the same before completion of the construction of the Improvements. The words “mortgage” and “trust deed” as used hereinafter shall include sublease and sublease back. No liens shall be permitted on City’s fee interest in the Portion A Site.

6.16 Holder Not Obligated to Construct Improvements. The holder of any mortgage or deed of trust on Developer’s leasehold interest authorized by this Agreement shall not be obligated by the provisions of this Agreement to construct, complete, or operate the Improvements or any portion thereof, or to guarantee such construction, completion or operation; nor shall any covenant or any other provision in this Agreement be construed so to obligate such holder. Nothing in this Agreement shall be deemed to permit or authorize any such holder to devote the Portion A Site to any uses or to construct any improvements thereon, other than those uses or improvements provided for or authorized by this Agreement.

6.17 Notice of Default to Mortgagee or Deed of Trust Holders; Right to Cure . With respect to any mortgage or deed of trust granted by Developer as to its leasehold interest as provided herein, whenever City may deliver any notice or demand to Developer with respect to any breach or default by Developer under this Agreement, City shall at the same time deliver to each holder of record of any mortgage or deed of trust authorized by this Agreement a copy of such notice or demand; provided that the failure to notify any holder of record shall not vitiate or affect the effectiveness of notice to Developer. Each such holder shall (insofar as the rights granted by City are concerned) have the right, at its option, within sixty (60) days after the receipt of the notice, or such longer time as expressly provided for a cure under this Agreement, to cure or remedy or commence to cure or remedy and thereafter to pursue with due diligence the cure or remedy of any such default and to add the cost thereof to the mortgage debt and the lien of its mortgage or deed of trust. Nothing contained in th is Agreement shall be deemed to permit or authorize such holder to undertake or continue the construction or completion of the Improvements, or any portion thereof (beyond the extent necessary to conserve or protect the improvements or construction already made) without first having expressly assumed Developer’s obligations to City by written agreement reasonably satisfactory to City. The holder, in that event, must agree to complete, in the manner provided in this Agreement, the improvements to which the lien or title of such holder relates, but on a schedule which takes into account the time reasonably required for the holder to obtain title to and possession of Developer’s leasehold interest in the Portion A Site, analyze and negotiate amendments to plan s, specifications, construction contracts and operating contracts or to negotiate new construction contracts and operating contracts. Any such holder properly completing such improvement shall be entitled, upon compliance with the requirements of Section 6.13 of this Agreement, to a Certificate of Completion. It is understood that a holder shall be deemed to have satisfied the sixty (60) day time limit set forth above for commencing to cure or remedy a Developer default which requires title and/or possession of Developer’s leasehold interest in the Portion A Site (or portion thereof) if and to the extent any such holder has within such sixty (60) day period commenced proceedings to obtain title and/or possession and thereafter the holder diligently pursues such proceedings to completion and cures or remedies the default. The City Manager is authorized to consent, on behalf of City, to the provision of similar cure rights to the limited partner as reasonably requested by the tax credit investor.

6.18 Failure of Holder to Complete Improvements . In any case where, one hundred eighty (180) days after the holder of any mortgage or deed of trust creating a lien or encumbrance upon 640

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the Portion A Site (or leasehold interest therein) or any part thereof receives a notice from City of a default by Developer in completion of construction of any of the Improvements under this Agreement, and such holder is not vested with ownership of Developer’s leasehold interest in the Portion A Site and has not exercised the option to construct as set forth in Section 6.17, or if it has exercised the option but has defaulted hereunder and failed to timely cure such default, in addition to such other rights and remedies as City shall have, City may purchase the mortgage or deed of trust by payment to the holder of the amount of the unpaid mortgage or deed of trust debt, including principal and interest and all other sums secured by the mortgage or deed of trust. If the ownership of the Portion A Site (or Developer’s leasehold interest therein) or any part thereof has vested in the holder, City, if it so desires, shall be entitled to a conveyance from the holder to City upon payment to the holder of an amount equal to the sum of the following:
(a) The unpaid mortgage or deed of trust debt at the time title became vested in the hol der (less all appropriate credits, including those resulting from collection and application of rentals and other income received during foreclosure proceedings); (b) All expenses with respect to foreclosure including reasonable attorneys’ fees;
(c) The net expense, if any, incurred by the holder as a direct result of the subsequent management of the Portion A Site or part thereof; (d) The costs of any improvements made by such holder;
(e) An amount equivalent to the interest that would have accrued at the rate(s) specified in the holder’s loan documents on the aggregate of such amounts had all such amounts become part of the mortgage or deed of trust debt and such debt had continued in existence to the date of payment by City; and
(f) Any customary prepayment charges imposed by the lender pursuant to its loan documents and agreed to by Developer.

The foregoing rights shall supplement and not limit City’s rights as landlord under the City Lease or by operation of law.

6.19 Right of City to Cure Mortgage or Deed of Trust Default. In the event of a mortgage or deed of trust default or breach by Developer whether prior to or after the completion of the construction of any of the Improvements or any part thereof (continuing until the expiration of the term of the City Lease), Developer shall immediately deliver to City a copy of any mortgage holder’s notice of default. If the holder of any mortgage or deed of trust has not exercised its option to construct, City shall have the right but no obligation to cure the default. In such event, City shall be entitled to reimbursement from Developer of all proper costs and expenses incurred by City in curing such default.

Developer agrees to provide documentation evidencing the relinquishment of any and all rights to the Development and under the City Lease in such event; provided that the failure to provide such documentation shall not be construed to mean that Developer retains any rights under the Agreement or the City Lease.
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6.20 Mechanics of Disbursement of the City Loan Amount . Provided that the City Conditions Precedent have first been satisfied, City shall make available moneys from the City Loan Amount as follows: (i) first, moneys will be disbursed to City to defray City Fees (provided that such disbursements shall not be conclusive as to the total amount of fees payable to City in connection with the Improvements), then (ii) moneys will be disbursed to Developer as progress payments based upon the percentage of completion of construction of the Improvements as determined by the City Manager or his or her designee upon consultation with Developer. The further conditions and protocol for payment of the City Loan Amount shall be as follows:
(a) City shall have no obligation to disburse any portion of the City Loan Amount unless and until all of the City Conditions Precedent are first satisfied. (b) City shall not have provided any assistance or other payment pursuant to this Agreement with respect to the acquisition of the Portion A Site and conduct of grubbing and remediation thereon (the “Preliminary Site Work”). Developer assumes all responsibility for any and all costs for the Preliminary Site Work. A portion of those amounts disbursed by City as the City Loan Amount may be applied to defray the cost of the Preliminary Site Work or to reimburse Developer for moneys of the Developer (whether equity or debt) which were theretofore applied for such purpose. (c) Protocol for Disbursement of the City Loan Amount: City shall make available with respect to the Improvements the allocable amount of the City Loan Amount in installments based upon the progress toward completion of the construction of the Improvements with such moneys to be infused ratably with moneys from the Primary Construction Loan, as determined in good faith by the City Manager; provided that amounts to reimburse Developer for Allowable Closing Costs theretofore paid by Developer may be made concurrent with the initial release of moneys from the Primary Construction Loan. Prior to each disbursement of any portion of the City Loan Amount, Developer shall submit to City an “Application for Disbursement” which shall include:

A written, itemized statement, signed by a representative of Developer which sets forth: (i) a description of the work performed, materi al supplied and/or costs incurred or due for which disbursement is requested; and (ii) the total amount incurred, expended and/or due for the requested disbursement. All moneys applied for and disbursed pursuant to this Section 6.20 shall be applied only for Allowable Closing Costs, the costs of fees and permits, or construction and the statement(s) by the representative of Developer shall so affirm. Disbursements may be used only to defray the cost of the Preliminary Site Work, and only where such work i s performed by (and disbursements are made to) third parties not related or connected to Developer. The City Manager shall have the right to review, approve or disapprove the necessity or reasonableness of work undertaken and the costs incurred therefor.

Copies of billing invoices, statements, receipts and other documents evidencing the total amount expended, incurred or due for any requested disbursement.

Mechanics lien waivers from the Developer’s general contractor including: (i) a Conditional Waiver and Release Upon Progress Payment (California Civil Code Section 3262(d)(1)) for itself and each contractor covered by such Request Payment, (ii) an Unconditional Waiver and Release Upon Progress Payment (California Civil Code Section 3262(d)(2)) for itsel f and each of its contractors covering the full amount of all previous payments made to Developer, and (iii) an Unconditional Waiver and Release Upon Final Payment (California Civil Code Section 3262(d)(4)) for its contractors who have competed their work and for whom Developer has received full payment. 642

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A statement that the percentage and/or stage of construction corresponding to the Application for Disbursement has been substantially completed and substantially conforms to the Plans.

Subject to satisfacti on of the requirements of this Section 6.20, City will endeavor to make payments within ten (10) days after the submittals required pursuant to this Section 6.20 are accomplished, review by the City Manager is completed, and the City Manager has had a reasonable opportunity to review the stage of completion. After the approval of this Agreement by City, further approval by the governing board of City shall not be required to authorize the disbursement of moneys pursuant to this Section 6.20.

Notwithstanding the foregoing portion of this Section 6.20, if construction draws from a construction loan for the Improvements are being administered by an Approved Construction and/or Permanent Lender or a major institutional lender having a rating of AA or better as reasonably approved by City, City will consent to such lender acting as a disbursing agent for City provided that such lender agrees by an agreement to which City and such lender are parties to disburse moneys consistent with this Section 6.20, with moneys to be distributed based upon the percentage that (i) City Loan Amount bears to (ii) the sum of (a) the City Loan Amount and (b) the amount of the construction loan being made by such lender, utilizing the disbursement process customarily employed by such lender. Interest earned on the City moneys as so placed with the construction lender shall be maintained in an insured or rated (at investment grade of AA or better), interest-bearing account, with interest to be applied to defray project costs payable to unrelated third parties. The City Manager is authorized to enter into such agreement(s) as may be necessary or convenient to implement this Section 6.20.

6.21 Cost Savings Obligation; Excess Tax Credits Obligation. Developer hereby agrees to apply Cost Savings in connection with the Development in an amount to be determined based on the Audit to be conducted upon completion of construction for the Development (unless sooner applied to fund the Operating Reserve and the Capital Replacement Reserve, or as otherwise hereafter agreed by the City Manager acting at his or her discretion). Disbursement of the Cost Savings is to be made at the time set forth therefor in Section 6.21.1, below.

6.21.1 Audit to Determine Cost Savings and Shared Cost Savings . The actual amount of “Cost Savings” (as defined below) is to be disbursed upon an Audit, as hereafter defined and described. Within one hundred eighty (180) days following the completion of construction of the Development, as evidenced by issuance of the final certificate of occupancy by City’s building official, Developer shall cause its certified public accountant(s) to perform a draft cost certification of the costs of the Development in accordance with the requirements of the Tax Credits, and generally accepted accounting procedures (GAAP) and generally accepted auditing standards (herein, referred to as “Audit”). If the Audit determines that the total sources of permanent financing for the Development (including long -term permanent debt and equity) exceed the total development cost for th e Development (including, without limitation, all hard and soft costs and all onsite and off site improvements required in connection with the development of the Development, including the Developer Fee), such excess shall be considered the “Cost Savings” f or the Development. The Cost Savings less satisfaction of Cost Overrun Amounts, if any, and any unsatisfied portion of the Developer Fee, if any, shall constitute the “Shared Cost Savings.”

6.21.2 Payment of Shared Cost Savings. The Shared Cost Savings, once determined by the Audit pursuant to Section 6.21 shall be due and shall be applied by Developer toward the 643

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Operating Reserve and the Capital Replacement Reserve, with any excess to be treated as Gross Revenues for purposes of the City Lease and the City Loan.

6.21.3 Timing of Payment of Shared Cost Savings . Unless sooner disbursed pursuant to the foregoing portion of this Section 6.21, the Shared Cost Savings shall be applied by Developer as required by Section 6.21.1 upon conversion to permanent loan and completio n of construction, concurrent with the closing of the Primary Permanent Loan or, if earlier, at such time as Developer receives its final Tax Credit equity payment for the Development.

7. COVENANTS AND RESTRICTIONS

7.1 Use Covenants. Developer covenants and agrees for itself, its successors, assigns, and every successor in interest to the Portion A Site or any part thereof, that Developer shall devote the Portion A Site to the uses specified in and shall operate in conformity with this Agreement, the Regulatory Agreement, and the City Lease , whichever is the more restrictive in each case unless expressly provided to contrary effect herein. All uses conducted on the Portion A Site , including, without limitation, all activities undertaken by Developer pursuant to this Agreement, shall conform to the Redevelopment Plan and all applicable provisions of the City Code.

7.2 Affordable Housing Requirements.

7.2.1 Number of Required Affordable Units and Other Units. Developer agrees to make available, restrict occupancy to, and rent all of the Required Affordable Units at Affordable Rent. There shall be fifty (50) multifamily rental units developed on the Portion A Site of which all fifty (50) such rental units shall be Required Affordable Units, with affordability for those units to be provided in conformity with the Prescribed Income Levels and Affordable Rents. Developer shall arrange for and maintain in place use of and access to a manager; it is contemplated that the manager shall be resident on the Portion B Area . The restriction of Units in connection with requirements for tax credits , so long as those requ irements do not supersede the requirements imposed under this Agreement, shall not be deemed to constitute a violation of this Agreement. An example of the calculation of Affordable Rent for the Units is attached hereto as Attachment No. 7 and incorporated herein; however, it is contemplated that rents consistent with the use of Tax Credits will be utilized in connection with the Development. In the event TCAC imposes greater affordability requirements, this Agreement and the attachments hereto will be conformed to meet such requirements.

7.2.2 Duration of Affordability Requirements . The Required Affordable Units shall be maintained as rental units available at and rented to Extremely Low Income Households, and Lower Income Households throughout the Required Covenant Period, as more particularly set forth in the City Regulatory Agreement.

7.2.3 Tenant Selection and Tenant Services Plan; Selection of Tenants. Prior to the issuance of the Certificate of Completion for the Improvements, Developer shall prepare and submit to the City Manager a plan concerning the marketing to and selection of tenants (“ Tenant Selection and Tenant Services Plan ”). The Tenant Selection and Tenant Services Plan shall also describe in detail the services to be provided by Developer to residents, and shall delineate the compensation to be paid for an on-side tenant services administrator to be engaged by the Developer. Developer shall submit to the City Manager within ninety (90) days after the Date of Agreement a draft Tenant Selection and Tenant Services Plan. Upon receipt of such draft Tenant Selection and Tenant Services Plan, the City Manager may approve, conditionally approve or disapprove the draft Tenant Selection 644

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and Tenant Services Plan within sixty (60) days after receipt thereof. If the City Manager disapproves or conditionally approves the draft Tenant Selection and Tenant Services Plan , the parties agree to confer with the goal that Developer will revise the draft Tenant Selection and Tenant Services Plan to address, to the extent feasible, concerns raised by the City Manager. If the City Manager fails to approve or disapprove the draft Tenant Selection and Tenant Services Plan by the time set forth therefor in the preceding portion of this Section 7.2.3, City will be estopped to deny the effectiveness of the draft Tenant Selection and Tenant Services Plan as previously approved as the Final Tenant Selection and Tenant Services Plan. Developer shall be responsible for the selection of tenants for the Required Affordable Units in compliance with the criteria set forth in Section 7.3 of this Agreement and the City Lease.

7.2.4 Income of Tenants . Each tenant shall be a n Extremely Low Income Household or, to the extent provided herein a Lower Income Household which, in accordance with the Prescribed Income Levels, meets the eligibility requirements established for the corresponding Required Affordable Unit, and Developer shall obtain a certification from each tenant renting or leasing each housing unit which substantiates such fact. Developer shall verify the income certification of each tenant as set forth in Section 7.3 hereof. Prior to the rental or lease of any Unit on the Portion A Site to a tenant, and annually thereafter, Developer shall submit to City or its designee, at Developer’s expense, a completed income computation and certification form, in a form to be provided by City.

7.2.5 Determination of Affordable Rent for the Units. Each Required Affordable Unit shall be rented at an “Affordable Rent” to be established as follows: The maximum monthly rental amount for the Required Affordable Units, shall be:
(i) for Extremely Low Income Households, at one -twelfth (1/12) of thirty percent (30%) of thirty percent (30%) of Median Income for the Area for a household of a size appropriate to the housing unit, or, if lower, the maximum rent for such unit as determined under the City Regulatory Agreement;
(ii) for Very Low Inco me Households, at one -twelfth (1/12) of thirty percent (30%) of fifty percent (50%) of Median Income for the Area for a household of a size appropriate to the housing unit, or, if lower, the maximum rent for such unit as determined under the City Regulatory Agreement;
(iii) the maximum monthly rental amount for the Required Affordable Units to be rented to Lower Income Households shall be established at one -twelfth (1/12) of thirty percent (30%) of sixty percent (60%) of Median Income for the Area for a household of a size appropriate to the housing unit, or, if lower, the maximum rent for such unit as determined under the Regulatory Agreement; or
Affordable Rents shall be subject to annual adjustment based upon the promulgation of figures published concerning Median Income for the Area and income limits as annually published by the California Department of Housing and Community Development (“HCD”); actual rents charged may be less than the maximum amounts determined pursuant to the formulas set forth in the preceding portion of this Section 7.2.5. In the event Tax Credits are utilized to finance the Development, rents prescribed under the tax credit program may be utilized as Affordable Rent(s). “Household size appropriate to the unit,” for the purpose of the calc ulation of rent herein (and without regard to actual occupancy), means an amount equal to the number of bedrooms 645

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in the unit plus one (i.e., for a two -bedroom unit, 3 people; for a three -bedroom unit, four people); provided that the maximum monthly rental amount of the Required Affordable Units shall be adjusted annually by the formula set forth above upon the promulgation of revised figures concerning Median Income for the Area by regulation of the California Department of Housing and Community Development (“HCD”). Actual rent charged may be less than such maximum rent.

7.2.6 Relationship to Other Funding Requirements. In the event additional restrictions on income qualification and rents more restrictive than those set forth in this Agreement are required as a condition of availability of Tax Credits or other public funding, compliance with those greater restrictions shall not be deemed to constitute a violation of this Agreement.

7.3 Verifications.

7.3.1 Income Verification. Developer shall verify the income of each proposed and existing tenant of the Required Affordable Units and all other Units developed on the Portion A Site.

7.3.2 Annual Reports. Following the issuance of the Certificate of Completion, and on or before July 15 of each Lease Year commencing after completion of the Improvements, Developer, at its expense, shall submit to City or its designee the reports in the manner described by Health and Safety Code Section 33418, as the same may be amended from time to time, with each such report to be in the form prescribed by City. Each annual report shall cover the immediately preceding Lease Year.

Developer shall maintain on file each tenant’s executed lease and Income Verification and rental records for all Required Affordable Units developed on the Portion A Site. Developer shall maintain complete and accurate records pertaining to the Required Affordable Units and will permit any duly authorized representative of City to inspect the books and records of Developer pertaining to this Agreement and the Required Affordable Units upon reasonable advance notice of not less than twenty four (24) hours and during normal business hours. Developer shall prepare and submit to City (or its designee) annually commencing July 15 following the completion of the Improvements and continuing throughout the Required Covenant Period, a Certificate of Continuing Program Compliance. Such documentation shall state for each Required Affordable Unit the unit size, the rental amount, the number of occupants, and the income of the occupants and any other information which may be used to determine compliance with the terms of this Agreement.

As part of its annual report, Developer shall include a statement of amounts payable by Developer und er this Agreement (including the City Lease ) supported by an Audited Financial Statement (prepared by an independent accounting firm reasonable acceptable to City) which sets forth information in detail sufficient for adequate review by City for the purpos es of confirming those amounts payable by Developer to City as well as showing the general financial performance of the Affordable Housing Project (“Annual Financial Report”). Each Annual Financial Report shall include a profit and loss statement showing Gross Revenues, Operating Expenses, Debt Service, Operating Reserve, Capital Replacement Reserve and Rental Receipts, payments of fees and any other remuneration to Developer all certified by the Audited Financial Statement. In the event the amounts reported or paid deviate by five percent (5%) or more from that amount determined to be owing upon review of Developer’s submittal, Developer shall reimburse City for its cost to review (which may require engagement of auditors) and collect the amounts owing; s uch amounts shall, until paid, be added to the amounts payable as Additional Rent under the City Lease during the first succeeding Lease Year. Developer agrees to maintain records in businesslike manner, and to maintain such records 646

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for the Term of the City Lease. The income and rent restrictions provided for hereunder are intended and shall be maintained in a manner sufficient to satisfy the requirements of Health and Safety Code Section 33413(b) without regard to whether such statute is applicable as a matter of law.

In addition, as part of its annual report and at City’s request, but not less frequently than prior to each initial and subsequent rental of each Unit to a new tenant household (but not lease renewals) and annually thereafter, Developer shall also provide to City completed income computation, asset evaluation, and certification forms, for any such tenant or tenants, in substantially the form provided by City from time to time. Developer shall obtain an annual certification from each household of each Unit demonstrating that such household is an Extremely Low Income Household or a Low Income Household, as applicable, and meets the eligibility requirements established for each such Unit.

Developer shall verify the income certification of each tenant household. In order to comply with this Section 7.3.2, Developer shall submit to City any and all tenant income and occupancy certifications and supporting documentation required to be submitted to TCAC pursuant to the Tax Credit Rules and the Tax Credit Regulatory Agreement for the Project; provided, City may request (and Developer shall provide) additional documentation to assist City’s evaluation of Developer’s compliance with this Agreement, if determined to be necessary in the reasonable discretion of the City Manager, specifically including (without limitation) any documentation or additional certifications that may be necessary to verify compliance with the requirements applicable to funding sources not without to City, as applicable. This requirement is in addition to and does not replace or supersede Developer’s obligation to annually submit the Certificate of Continuing Program Compliance to City. Further, City has the right, but not the obligation to monitor compliance with respect to each tenant household at the Project, and City’s election to monitor some, but not all, of the Units shall not constitute a waiver of City’s right to monitor and enforce compliance with respect to all Units in the future.

7.3.3 Verification of Income of New and Con tinuing Tenants . Gross income calculations for prospective (and continuing) tenants shall be determined in accordance with 25 Cal.

Code Regs. Section 6914 or as required by the Tax Credit Rules. Developer shall verify the income and information provided in the income certification of the proposed tenant as set forth below. (a) Developer shall verify the income of each proposed tenant of the Project and by at least one of the following methods as appropriate to the proposed tenant:
(i) obtain two (2) paycheck stubs from the person’s two (2) most recent pay periods;
(ii) obtain a true copy of an income tax return from the person for the most recent tax year in which a return was filed;
(iii) obtain an income verification certification from the employer of the person;
(iv) obtain an income verification certification from the Social Security Administration and/or the California Department of Social Services if the person receives assistance from such agencies; or
(v) obtain an alternate form of income verification reasonably requested by Authority, if none of the above forms of verification is available to Developer. 647

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(b) Verification Regarding Eligibility of New Tenants . Developer shall retain documentation regarding the eligibility of each new tenant household.

7.4 [Reserved].

7.5 Maintenance of the Portion A Site. Developer agrees for itself and its successors in interest to the Portion A Site, to maintain the improvements on the Portion A Site in conformity with the City Code and the conditions set forth in the City Regulatory Agreement, and shall keep the Portion A Site free from any accumulation of debris or waste materials. During such period, Developer shall also maintain the landscaping planted on the Portion A Site in a healthy condition.

7.6 Nondiscrimination Covenants . Developer covenants by and for itself and any successors in interest that there shall be no discrimination against or seg regation 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 Sec tion 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises herein conveyed, nor shall the grantee or any person claiming under or through him or her, establish or permit any practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the premises herein conveyed. The foregoing covenants shall run with the land.

Developer shall refrain from restricting the rental, sale or lease of the Portion A Site on the basis of race, color, religion, sex, marital status, ancestry or national origin of any person. All such deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses:

In deeds: “The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators, and assigns, and all persons claiming under or through them, that there 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 premises herein conveyed, nor shall the grantee or any person claiming under or through him or her, establish or permit any practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in t he premises herein conveyed. The foregoing covenants shall run with the land.”
In leases: “The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators, and assigns, and all persons claiming under or through him or her, and this lease is made and accepted upon and subject to the following conditions:
“That there 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 leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the premises herein leased nor shall the lessee himself or herself, or any person claiming under or through him or her, establish or permit 648

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any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy, of tenants, lessees, sublessees, subtenants, or vendees in the premises herein leased.”
In contracts: “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 premises which are the subject of this Agreement, nor shall the grantee or any person claiming under or through him or her, establish or permit any practice or practices of discr imination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the premises herein conveyed. The foregoing covenants shall run with the land.”

7.7 Effect of Violation of the Terms and Provisions of this Agreement After Completion of Construction . City is deemed the beneficiary of the terms and provisi ons of this Agreement and of the covenants running with the land, for and in its own right and for the purposes of protecting the interests of the community and other parties, public or private, in whose favor and for whose benefit this Agreement and the c ovenants running with the land have been provided, without regard to whether City has been, remains or is an owner of any land or interest therein in the Portion A Site or in the Project Area of the Redevelopment Plan. City shall have the right, if the Ag reement or any covenants in any agreement pursuant to this Agreement, including without limitation the City Regulatory Agreement and the City Lease, are breached, to exercise all rights and remedies, and to maintain any actions or suits at law or in equity or other proper proceedings to enforce the curing of such breaches to which it or any other beneficiaries of this Agreement and such covenants may be entitled.

8. DEVELOPER’S GENERAL REPRESENTATIONS AND WARRANTIES.

As a material inducement to City to enter into this Agreement, and in addition to the representations and warranties in Section 1.5.2, Developer represents and warrants to City that:

8.1 Formation, Qualification and Compliance . Developer (a) is a California limited partnership validly existing and in good standing under the laws of the State of California; (b) has all requisite and the authority to conduct its business and own, purchase, improve and sell its properties.

Developer is in compliance in all material respects with all laws applicable to its business and has obtained all approvals, licenses, exemptions and other authorizations from, and has accomplished all filings, registrations and qualifications with any governmental agency that are necessary for the transaction of its business; (c) Developer has and will in the future duly authorize, execute and deliver this Agreement and any and all other agreements and documents required to be executed and delivered by Developer in order to carry out, give effect to, and consummate the transactions contemplated by this Agreement; (d) Developer does not have any material contingent obligations or any material contractual agreements which could materially adversely affect the ability of Developer to carry out its obligations hereunder; (e) There are no material pending or, so far as is known to Developer, threatened, legal proceedings to which Developer is or may be ma de a party or to which any of its property is or may become subject, which have not been fully disclosed by Developer to City in this Agreement which could materially adversely affect the ability of Developer to carry out its obligations hereunder; and (f) There is no action or proceeding pending or, to Developer’s best knowledge, threatened, looking toward the dissolution or liquidation of Developer and there is no action or 649

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proceeding pending or, to Developer’s best knowledge, threatened by or against Developer which could affect the validity and enforceability of the terms of this Agreement, or materially and adversely affect the ability of Developer to carry out its obligations hereunder.

Each of the foregoing items (a) to (f), inclusive, shall be deemed to be an ongoing representation and warranty. Developer shall advise City in writing if there is any change pertaining to any matters set forth or referenced in the foregoing items (a) to (f), inclusive.

8.2 Execution and Performance of Project Documents . Developer has all requi site authority to execute and perform its obligations under the Project Documents. The execution and delivery by Developer of, and the performance by Develope r of its obligations under, each Project Document has been authorized by all necessary action and do not and will not violate any provision of, or require any consent or approval not heretofore obtained under, any articles of incorporation, by- laws or other governing document applicable to Developer.

8.3 Covenant Not to Transfer Except in Conformity . Excepting for the rental of individual dwelling units to occupants in the regular course of business (which rental activity shall not be limited by this Section 8.3), or the sale of a partnership interest to generate proceeds in consideration of the Tax Credits, Developer shall not sell, lease, or otherwise transfer or convey all or any part of the Portion A Site, or any interest therein, unless Developer has first obtained the prior written consent of the City Manager, which consent may be granted or refused in the City Manager’s sole and absolute discretion; City shall upon receipt of written request therefor consent to a sale by the relevant Approved Assignee of its interest in the Development to CHW or an affiliated nonprofit public benefit corporation confirmed by the City Manager after the expiration of the tax credit compliance period. In addition, Developer’s limited partner and any successor thereto, may, without the prior consent of City and except as set forth in the senior permitted liens, sell, transfer, assign, pledge, hypothecate, and encumber some or all of its partnership interests in Developer and the same shall not be a violation of this Agreement. Moreover, Developer’s or an Approved Assignee’s Limited Partner and any successor thereto, shall have the right, without the prior consent of City and except as set for in the senior permitted liens, to remove any or all of Developer’s general partners for cause as permitted under Developer’s or Approved Assignee’s limited partnership agreement and replace any or all removed general partners with a person or entity determined in the Limited Partner’s sole discretion. Any sale, lease, transfer or conveyance without such consent shall, at City’s option, be void. A change in ownership of Developer or an Approved Assignee resulting in the individuals executing this Agreement on behalf of Developer retaining less than fifty -one percent (51%) ownership of all outstanding shares of Developer shall be deemed to violate this Section 8.3. In connection with the foregoing consent requirement, Developer acknowledges that City relied upon Developer’s particular expertise in entering into this Agreement and continues to rely on such expertise to ensure the satisfactory completion of all of the Improvements, and the marketing and rental of the Required Affordable Units to Extremely Low Income Househo lds and Low Income Households to afford the community a long-term, quality affordable housing resource.

9. DEFAULTS, REMEDIES, AND TERMINATION.

9.1 Default Remedies. Subject to the extensions of time, if any, pursuant to Section 9.10 of this Agreement, failure by any party to perform any action or covenant required by this Agreement within the time periods provided herein following notice and failure to cure as des cribed hereafter, constitutes a “Default” or “Event of Default” under this Agreement. A party claiming a Default shall give written notice of Default to the other parties specifying the Default. Except as otherwise expressly 650

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provided in this Agreement, and without limiting or affecting rights of parties hereto to terminate this Agreement, the claimant shall not institute any proceedings against any other party, and the other parties shall not be in Default if such party within thirty (30) days from receip t of such notice immediately, with due diligence, commences to cure, correct or remedy the specified Default and shall complete such cure, correction or remedy with diligence. . If a cure is commenced but cannot reasonably be completed within thirty (30) days, the party shall have an additional period of time as reasonably necessary, not to exceed ninety (90) days, to complete the cure. City shall give the Limited Partner (so long as City has received notice of such Limited Partner) a copy of any notice delivered to Developer, and the Limited Partner shall have the right but not the obligation to cure the Default within the time periods specific herein.

9.2 Institution of Legal Actions. In addition to any other rights or remedies and subject to the restrictions otherwise set forth in this Agreement, any party may institute an action at law or equity to seek specific performance of the terms of this Agreement, or to cure, correct or remedy any Default, to recover damages for any Default, or to obtain any other remedy consistent with the purpose of this Agreement; provided, that City shall have no right, in any event, to impose a lien for monetary damages against the Portion A Site or on any improvements erected from time-to-time on the Portion A Site. Such legal actions must be instituted in the Superior Court of the County of Placer, State of California.

9.3 Termination by Developer. In the event that as of the time described below (and if no time is described below, the time established therefor in the Schedule of Performance):
(a) by the time set forth therefor in the Schedule of Performance for the Leasehold Transfer, Developer is not in default under this Agreement and City does not execute the City Lease and effect the Leasehold Transfer to Developer in the manner and condition and by the date provided in this Agreement; or
(b) on or before the thirtieth day after the Date of Agreement , the Developer informs City that the condition of the Portion A Site is not suitable for the proposed Development; or
(c) in the event of any Default of City prior to the Leasehold Transfer which is not cured within the time set forth in Section 7.1 hereof; or (d) the failure to occur of one or more of the Developer Conditions Precedent; and
any such failure is not cured within the applicable time period after written demand by Developer, then this Agreement may, at the option of Developer, be terminated by Notice thereof to City; provided that Developer shall have delivered to City the documents required to be delivered to City pursuant to Section 6.15 of this Agreement. From the date of the Notice of termination of this Agreement by Developer to City and thereafter, this Agreement shall be deemed terminated and there shall be no further rights or obligations among the parties.

9.4 Termination by City. If prior to the time established in the Schedule of Performance for the satisfaction of the City’s Conditions Precedent and subject to the mortgagee protection provisions to the extent expressly set forth herein:
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(a) Developer (or any successor in interest) assigns this Agreement or any rights therein or in the Portion A Site in violation of this Agreement; or (b) One of more of the City Conditions Precedent is not satisfied; or (c) Developer fails to execute (as lessee/covenantee) one or more of the City Promissory Note, the City Deed of Trust, the City Regulatory Agreement, the City Lease or the Memorandum of Lease; or
(d) On or before the thirtieth day after the Date of Agreement, City has not received from Developer a writing confirming that the condition of the Portion A Site is suitable for the proposed Development; or
(e) Developer is otherwise in default of this Agreement and fails to cure such default within the time set forth in Section 7.1 hereof; then this Agreement and any rights of Developer or any assignee or transferee with respect to or arising out of the Agreement or the Portion A Site (including without limitation all attachments to this Agreement), shall, at the option of City, be terminated by City by Notice thereof to Developer. From the date of the Notice of t ermination of this Agreement by City to Developer and thereafter this Agreement (including without limitations all attachments hereto) shall be deemed terminated and there shall be no further rights or obligations among the parties, except that City may pursue any remedies it has hereunder. Prior to completion of any such termination, City shall give the Limited Partner notice of any of the foregoing occurrences giving rise to the City’s right to terminate.

9.5 Acceptance of Service of Process . In the event that any legal action is commenced against City, service of process on City shall be made by personal service upon the City Manager or in such other manner as may be provided by law. In the event that any legal action is commenced against City, service of process on City shall be made by personal service upon the City Manager or in such other manner as may be provided by law. In the event that any legal action is commenced against Developer, service of process on Developer shall be made in such manner as may be provided by law and shall be effective whether served inside or outside of California.

9.6 Rights and Remedies Are Cumulative. Except as otherwise expressly stated in this Agreement, the rights and remedies of the parties are cumulative, and the exercise by a party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by another party.

9.7 Inaction Not a Waiver of Default. Any failures or delays by either party in asserting any of its rights and remedies as to any Default shall not operate as a waiver of any Default or of any such rights or remedies or deprive either such party of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies.

9.8 Applicable Law. The laws of the State of California shall govern the i nterpretation and enforcement of this Agreement.

9.9 Covenant Provisions; Certain Amendments. In the event, as a result of the provision of other financing in connection with the Development, the parties will review and, if appropriate amend covenant and reporting provisions hereof to encompass such other Units as may be regulated 652

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by virtue of such other funding. In the event Developer is required by virtue of such other financing to restrict the affordability of Units in a manner more restrictive than as set forth under the form of City Regulatory Agreement then, from time to time upon receipt of request therefor from the City Manager, Developer agrees to consent to modifications to incorporate such greater restrictions into the City Regulatory Agreement; such request(s) by the City Manager can be made at any time(s) during the Required Covenant Period without regard to whether the City Regulatory Agreement have been recorded.

9.10 Enforced Delay; Extension of Times of Performance . In addition to specific provisions of this Agreement, performance by any party hereunder shall not be deemed to be in Default, and all performance and other dates specified in this Agreement shall be extended, where delays or Defaults are due to: war; insurrection; riots; floods; earthquakes; pandemics; fires; casualties; acts of God; acts of the public enemy; acts or omissions of another party, or acts or failures to act of City or any other public or governmental agency or entity (excepting that acts or failures to act of City shall not excuse performance by City). Notwithstanding anything to the contrary in this Agreement, an extension of time for any such cause shall be for the period of the enforced delay and shall commence to run from the time of the commencement of the cause, if notice by the party claiming such extension is sent to the other party within thirty (30) days of the commencement of the cause. Times of performance under this Agreement may also be extended in writing by the mutual agreement of City and Developer. This Section 9.10 shall not be deemed applicable to the City Lease unless expressly incorporated by reference therein. Notwithstanding the foregoing, the following shall not constitute a basis for enforced delay: the failure of Developer to obtain financing commitments sufficient for the development of the Portion A Site in conformity with this Agreement; the failure to obtain approval of a tentative map or parcel map reasonably acceptable to Developer.

In addition to the foregoing (and without regard to the preceding portion of this Section 9.10), the City Manager shall have the authority, at his or her discretion, to approve extensions on behalf of City to approve extensions of time not to exceed a cumulative total of three hundred sixty -five (365) days.

9.11 Transfers of Interest in Agreem ent or of the Portion A Site. Except as otherwise set forth in Section 8.3 hereof, Section 9.11, and all subsections of this Section 9.11, shall apply to transfers prior to the Leasehold Transfer. Any transfers occurring or proposed after the Leasehold Transfer are subject to the provisions therefor of the City Regulatory Agreement. In the event of conflict between the provisions of this Section 9.11 and the City Lease (concerning transfers of interest), the City Lease shall control.

9.11.1 Prohibition. The qualifications and identity of Developer are of particular concern to City. It is because of those qualifications and identity that City has entered into this Agreement with Developer. For the period commencing upon the date of this Agreement and until the end of the Required Covenant Period, except as otherwise set forth in Section 8.3 hereof, no voluntary or involuntary successor in int erest of Developer shall acquire any rights or powers under this Agreement, nor shall Developer make any total or partial sale, transfer, conveyance, assignment, subdivision, refinancing or lease of the whole or any part of the Portion A Site or the Develo pment thereon (excepting the rental Lease of Units to Occupants) without prior written approval of City, except as expressly set forth herein.

9.11.2 Permitted Transfers. In the event of a proposed assignment by Developer under subparagraphs 9.11.2 through 9.11.3, inclusive, Developer agrees that at least thirty (30) days 653

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prior to such assignment it shall give written notice to City including a request for approval of such assignment and satisfactory evidence that the assignee has assumed jointly with Developer t he Obligations of this Agreement. In addition, no consent of City shall be required in connection with the transfer of Developer’s leasehold interest in the Portion A Site that occurs by foreclosure or deed in lieu of foreclosure of any Permitted Senior L ien to respective holder thereof or to their nominees or assignees exclusive of Developer and CHW. The provisions of this Section 9.11 shall be limited by those transfers permitted in Section 8.3.
(a) Any transfers to an entity or entities in which Developer retains a minimum of fifty-one percent (51%) of the ownership or beneficial interest and retains management and control of the transferee entity or entities or relating to the syndication of Tax Credits or after the Tax Credit period, the removal of the Tax Credit investor. (b) The conveyance or dedication of any portion of the Portion A Site to City or other appropriate governmental agency, or the granting of easements or permits to facilitate construction of the Development.

In the event of a proposed assignment by Developer under subparagraphs (a) and (b) of this Section 9.11.2, inclusive, Developer agrees that at least thirty (30) days prior to such assignment it shall give written notice to City including a request for approval of such assignment and satisfactory evidence that the assignee has assumed jointly with Developer the Obligations of this Agreement. In addition, no consent of City shall be required in connection with the transfer of Developer’s leasehold interest in the Portion A Site that occurs by foreclosure or deed in lieu of foreclosure of any Permitted Senior Lien to respective holder thereof or to their nominees or assignees exclusive of Developer and CHW.

9.11.3 City Consideration of Requested Transfer. City agrees that it will consider in good faith a request made pursuant to this Section 9.11 after the achievement of occupancy of ninety percent (90%) or more of the Units in conformity with this Agreement following the issuance by City of a Certificate of Completi on for the last building to be constructed as part of the Improvements, provided Developer delivers written notice to City requesting such approval, the City Regulatory Agreement remain in full force and effect. Such notice shall be accompanied by suffici ent evidence regarding the proposed assignee’s or purchaser’s development and/or operational qualifications and experience, its financial commitments and resources, and the financial terms of such assignment (including the consideration proposed to flow to Developer or Related Entity and/or any of the Principals) in sufficient detail to enable City to evaluate the proposed assignee or purchaser pursuant to the criteria set forth in this Section 9.11, and as reasonably determined by City. Notwithstanding the foregoing, neither the transfer of limited partnership interests to tax credit investors (or subsequent transfers of limited partnership interests) nor the removal and replacement of Developer’s general partner in accordance with Section 8.3 shall entitle City to receive compensation (in connection with such transfer). City shall evaluate each proposed transferee or assignee on the basis of its development and/or qualifications and experience in the operation of facilities similar to the Development, and its financial commitments and resources, and may reasonably disapprove any proposed transferee or assignee, during the period for which this Section 9.11 applies, which City reasonably determines does not possess sufficient qualifications. An assignment and assumption agreement in form satisfactory to City’s legal counsel shall also be required for all proposed assignments. Developer agrees and acknowledges that in connection with any such assignment approved by City pursuant to this Agreement, Developer shall remain liable for performance pursuant to this Agreement for a period of five (5) Years following such assignment; provided that the five -Year limitation shall not apply (and 654

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the ongoing liability of Developer shall not be there by limited) in connection with the transfer of limited partnership interests to tax credit investors. Within thirty (30) days after the receipt of Developer’s written notice requesting approval of an assignment or transfer pursuant to this Section 9.11, including assignments that do not require City/City Manager approval, City shall either approve or disapprove such proposed assignment or shall respond in writing by stating what further information, if any, City reasonably requires in order to determine the request complete and determine whether or not to grant the requested approval. Upon receipt of such a response, Developer shall promptly furnish to City such further information as may be reasonably requested. In addition, City will not unreasonably withhold its approval of a transfer made at the conclusion of the tax credit period to Developer and affiliates upon the removal of the tax credit investor, so long as there are no defaults under this Agreement and the transferee agrees to be bound by all ex ecutory provisions of this Agreement.

Notwithstanding the foregoing portion of this Section 9.11.3, Section 8.3 shall be enforceable in accordance with its terms.

9.11.4 Successors and Assigns . All of the terms, covenants and conditions of this Agreement shall be binding upon Developer and its permitted successors arid assigns. Whenever the term “Developer” is used in this Agreement, such term shall include any other permitted successors and assigns as herein provided.

9.12 Non-Liability of Officials and Employees of City. No member, official, officer or employee of City shall be personally liable to Developer, or any successor in interest, in the event of any Default or breach by City or for any amount which may become due to Developer or its successors, or on any obligations under the terms of this Agreement.

9.13 Relationship Between City and Developer . It is hereby acknowledged that the relationship between City and Developer is not that of a partnership or joint venture and that City and Developer shall not be deemed or construed for any purpose to be the agent of the other. Accordingly, except as expressly provided in this Agreement, including the Attachments hereto, City shall have no rights, powers, duties or obligations with respect to the development, operation, maintenance or management of the Development so long as such rights are held by Developer under this Agreement.

9.14 City Approvals and Actions. Whenever a reference is made herein to an action or approval to be undertaken by City, the City Manager is authorized to act on behalf of City unless specifically provided otherwise or the law otherwise requires. When a reference is made herein to an action or approval to be undertaken by City , the City Manager is authorized to act on behalf of City unless specifically provided otherwise or the law otherwise requires.

9.15 Real Estate Brokers . City and Developer each represent and warrant to each other that no broker or finder is entitled to any commission or finder’s fee in connection with this transaction, and each agrees to defend and hold harmless the other from any claim to any such commission or fee resulting from any action on its part.

9.16 Attorneys’ Fees. In any action among the parties to interpret, enforce, reform, modify, rescind, or otherwise in connection with any of the terms or provisions of this Agreement, the prevailing party in the action shall be entitled, in addition to any other relief to which it mig ht be entitled, reasonable costs and expenses including, without limitation, litigation costs and reasonable attorneys’ fees.
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9.17 Non-recourse Liability of Developer . Notwithstanding anything to the contrary in this Agreement or any other Project Document, neither Developer nor any of its partners shall be personally liable for any default, loss, claim, damage, expense or liability to any person and the sole remedy against Developer hereunder shall be limited to its interest in the Development, excepting that Developer will be responsible for those liabilities of Developer referenced in Section 6.7.

10. MISCELLANEOUS

10.1 Obligations Unconditional and Independent. Notwithstanding the existence at any time of any obligation or liability of City to Developer, or any other claim by Developer against City, in connection with the Portion A Site or otherwise, Developer hereby waives any right it might otherwise have (a) to offset any such obligation, liability or claim against Developer’s obligations under this Agreement (including without limitation the attachments hereto), or (b) to claim that the existence of any such outstanding obligation, liability or claim excuses the nonperformance by Developer of any of its obligations under the Project Documents.

10.2 Notices. All notices, statements, demands, requests, conse nts, approvals, authorizations, offers, agreements, appointments or designations hereunder by any party to the others (each, a “Notice”) shall be in writing and shall be given either by (i) personal service, (ii) delivery by reputable document delivery service such as Federal Express that provides a receipt showing date and time of delivery, or (iii) mailing in the United States mail, certified or registered mail, return receipt requested, postage prepaid, and addressed as follows:

If to Developer: Pacific Street Housing Associates Four, L.P. c/o Community HousingWorks
3111 Camino del Rio North, Suite 800
San Diego, CA 92108
Attn: Kevin Leichner
Telephone: (619) 282-6647

and a copy to: (which copy shall not constitute notice to Developer) Gubb & Barshay LLP
235 Montgomery Street, Suite 1110
San Francisco, CA 94104
Attention: Nicole Kline

and a copy to: NEF Assignment Corporation
540 W. Madison Street, Suite 1990
Chicago, Il 60661
Attention: General Counsel

and a copy to: Bocarsly Emden Cowan Esmail & Arndt
633 West 5th Street, Suite 5880
Los Angeles, CA 90071
Attention: Rachel Rosner

and a copy to: Cedar Rapids Bank and Trust Company
500 First Avenue NE, Suite 100
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Cedar Rapids, Iowa 52401
Attention: Brad Curtin

and a copy to: Winthrop & Weinstine, P.A.
225 South Sixth Street, Suite 3500
Minneapolis, Minnesota 55402
Attention: Robert P. Singleton

If to City: City of Rocklin
3970 Rocklin Road
Rocklin, CA 95677
Attn: City Manager
and a copy: (which copy shall not constitute notice to City) Office of City Attorney
3970 Rocklin Road
Rocklin, CA 95677
Attention: City Attorney
Addresses for notice may be changed from time to time by written notice to all other parties.

All communications shall be effective when actually received; provided, however, that nonreceipt of any communication as the result of a change of address of which the sending party was not notified or as the result of a refusal to accept delivery shall be deemed receipt of such communication.

10.3 Survival of Representations and Warranties. All representations and warranties in the Project Documents shall survive the Leasehold Transfer and the rental of the Required Affordable Units and have been or will be relied on by City notwithstanding any investigation made by City.

10.4 No Third Parties Benefited Except for City; AB 987. This Agreement is made for the purpose of setting forth rights and obligations of Developer and City, and no other person (except for City) shall have any rights hereunder or by reason hereof. Except for City, which shall be deemed to be a third party beneficiary of this Agreement (including without limitation the Attachments hereto), there shall be no third party beneficiaries of this Agreement. Developer acknowledges that, notwithstanding the foregoing portion of this Section 10.4, pursuant to AB 987 and the amendments to Health and Safety Code Section 33334.3 made effective as of January 1, 2008 by that bill, it is possible that violations of the covenants, conditions and restrictions relating to affordable housing contained in the City Regulatory Agreement may now be enforceable not only by City, but also by each of the persons and/or entities listed in Section 33334.3(f)(7) of the Health and Safety Code, specifically (1) residents of affordable units subject to covenants recorded pursuant to Health and Safety Code Section 33334.3(f)(1) (each, a “Covenanted Unit”), (2) the most recent former residents of such a Covenanted Unit, (3) applicants that are Lower Income Households or Extremely Low Income Households that are denied occupancy of such a Coven anted Unit, and (4) persons that are Lower Income Households or Extremely Low Income Households and who are on a waiting list for occupancy of such a Covenanted Unit. The provisions of AB 987 are to be applicable only to the extent required by law. Noth ing in this Section 10.4 or this Agreement (including the Attachments hereto) is intended to provide an enforcement right to any person or entity not specifically made an intended third party beneficiary of this Agreement; any such third party shall be lim ited in their right to enforce affordability restrictions to the extent provided by Health and Safety Code 657

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Section 33334.3(f). City make s no representation concerning the applicability, vel non , of Section 33334.3 as described in the foregoing portion of this Section 10.4.

10.5 Binding Effect; Assignment of Obligations . This Agreement shall bind, and shall inure to the benefit of, City, Developer and City and their respective successors and assigns. Developer shall not assign any of its rights or obligations under any Project Document without the prior written consent of the City Manager, which consent may be withheld in the City Manager’s sole and absolute discretion; provided that the City Manager shall reasonably consider an assignment to an entity or entities owned or under majority control by Developer or the Principals where Developer pays City’s and City’s costs to review, estimate, process and docu ment such assignment and no other provisions of this Agreement are amended thereby. Any such assignment without such consent shall, at City’s option, be void. In connection with the foregoing consent requirement, Developer acknowledges that City relied upon Developer’s particular expertise in entering this Agreement and continues to rely on such expertise to ensure the satisfactory completion of the Improvements and the use of the Required Affordable Units in conformity with this Agreement.

10.6 Option.
(a) City Option to Acquire Leasehold . Notwithstanding, and in addition to, the remedies provided to City otherwise provided under this Agreement, Developer hereby grants to City the option (“Option”) to purchase Developer’s leasehold interest in the Portion A Site , the Improvements and any other improvements to the Portion A Site (collectively, the “Leasehold Assets”). The purchase Option will begin as of the last day of the fifty -fifth (55th) Lease Year and will continue in effect thereafter for the remainder of the Term. City may, but shall not be required to, purchase the Leasehold Assets for an amount equal to the “Final Value”, as defined below. This Option shall be subordinate to any Approved Construction and/or Permanent Lender and their respective Primary Construction Loan and Primary Permanent Loan, as applicable, and shall terminate and be of no further force and effect upon a foreclosure or deed in lieu thereof. (i) Determination of Initial Value . The value of the Leaseho ld Assets will be determined initially by an appraiser selected by City based upon the greater of (a) the value of the Leasehold Assets subject to the restrictions and limitations on the rental of all units on the Portion A Site to Extremely Low Income Households and Lower Income Households as provided under the City Regulatory Agreement, or (b) all then outstanding amounts (principal and accrued and unpaid interest) owing under such financing secured by Developer’s interest in the Project which financing was theretofore approved in writing by City; the amount as so established constitutes the “Initial Value”. The appraiser shall have sixty (60) days to obtain such appraisal and to tender its offer of sale.
(ii) Developer Submittal. Within ten (10) business days after City has transmitted a writing setting forth the Initial Value to Developer, Developer shall deliver in writing to City a writing setting forth: (a) such Developer’s decision to sell the Leasehold Assets to City for an amount equal to the Initial Value; (b) Developer’s opinion of value , if different from that of the Initial Value as described above; or (c) such Developer’s decision to retain an appraiser to provide an opinion of value of the Leasehold Assets. If Developer approves the Initial Value, such amount shall be deemed to constitute the “Final Value.” In the event Developer is obtaining an appraisal, it shall have sixty (60) days to obtain such appraisal and deliver its offer to sell to City based upon such value.

An amount determined under (b) or (c) of this subsection (ii) shall constitute the “Alternative Value.” In the event Developer fails to deliver its written response to City by the time set forth in this subsection 658

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(ii), then the Initial Value shall be deemed to constitute the “F inal Value.” Notwithstanding the foregoing portion of this Section 10.6, in no event shall the Final Value be deemed to be less than the amount of loans and advances to finance or refinance the Project which loans and advances have been approved by City.
(iii) City Response. Within ten (10) business days after City receives a writing from Developer under subsection (ii) of this Section 10.6(b), City shall notify Developer in writing that: (a) City has elected to open escrow for the purchase of the Leasehold Assets based upon the Initial Value (which shall be applicable in the event Developer agrees that the Initial Value shall constitute the Final Value, or if Developer fails to deliver its written response under subsection (ii) by the time prescribed therefor in such subsection (ii) in which event the Initial Value shall be deemed to constitute the Final Value); (b) City has elected to open escrow for the purchase of the Leasehold Assets treating t he Alternative Value as the Final Value; (c) City has elected to not proceed to exercise its rights to acquire the Leasehold Assets by means of the Option; or (d) City has elected to reject the Alternative Value and instead elects (1) to have the appraiser s who, respectively, determined the Initial Value and the Alternative Value, jointly select a third, independent MAI appraiser (the “Independent MAI Appraiser”) to determine the value of the Leasehold Assets and, if such appraiser fail to reach agreement on the Independent MAI Appraiser, then (2) to have the prepares of the Initial Value and the Alternative Value each designate three (3) MAI appraisers, from which the City Clerk will randomly select one of the MAI appraisers. (iv) Appraiser Determination. In the event the Independent MAI Appraiser is designated, such appraiser shall determine a value for the Leasehold Assets subject to the Appraisal Parameters (the “Independent MAI Value”). Developer and City agree that, in such case, an amount equal to the average of: (a) the Independent MAI Value and (b) whichever of the amount determined under 10.b(b)(i) or (ii) above is closer to the Independent MAI Value, shall be deemed to constitute the “Final Value” for purposes of this Agreement.

In connection with any purchase of the Leasehold Assets under this Section 10.6(b), City shall receive credit for any outstanding indebtedness to City with respect to the Property, including without limitation the City Promissory Note. (v) Implementation of Sale Upon Establishment of Final Value .

Within five (5) working days following the establishment of the Final Value, City shall: (a) deliver its written notice that it elects not to acquire the Leasehold Assets under Section 10.6(b); (b) deliver to Developer both: (1) a written notice of its election to exercise the Option at the Final Value (the “Exercise Notice”), and (2) two (2) copies of City’s standard or customary real estate purchase and sale agreement for income-restricted homes (“Purchase Agreement”), both of which are duly-executed by City . Upon Developer receiving the Exercise Notice and the two (2) duly -executed Purchase Agreements, Developer shall execute both copies of the Purchase Agreement and return one fully - executed original to City. Developer’s failure to execute and deliver a copy of the Purchase Agreement in accordance with this Section 10.6(b)(v) shall not affect the validity of the Purchase Agreement ; in addition, specific performance shall be available to City in such event (without limitation as to ot her rights or remedies) . The Purchase Agreement shall be immediately effective and binding on both Developer and City without further execution by the Parties, on exercise of the Option in accordance with this Section 10.6(b)(v). City may, instead of pur chasing the Leasehold Assets itself, assign its option and right to purchase the Leasehold Assets to City; provided that the Purchase Agreement shall incorporate a price, if greater, equal to the greater of the fair market value of the Leasehold Assets or the amount required to pay off or satisfy all existing debt on the leasehold estate. 659

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(vi) Purchase Option Does Not Limit Remedies. THE PURCHASE

OPTION SHALL NOT LIMIT ANY REMEDIES AVAILABLE TO CITY UNDER THE AHA,

INCLUDING WITHOUT LIMITATION REMEDIES UNDER ONE OR MORE OF THE CITY REGULATORY AGREEMENT OR THE CITY LEASE. Without limitation as to other remedies that are available to City, upon compliance with the foregoing requirements of Section 10.6, the obligation of Developer to convey the Leasehold Assets to City shall be enforceable by specific performance.

10.7 Mandatory Assignment. In the event Developer has not obtained a reservation of tax credits equal to or greater than the Tax Credit Amount by the time set forth therefor in the Schedule of Performance, or if by such time the Developer fails to demonstrate to City that it is obtained binding financing commitments which, together with the infusion of the City Loan, would be sufficient to construct the Project, or if Developer informs City that Developer is unwilling to proceed with the Project on the basis set forth in this Agreement at any time and for any reason, upon giving Developer sixty (60) days to cure or determine that it will proceed to construct the Pro ject on the basis set forth in this Agreement, City reserves the right to assign all rights of Developer herein to a nominee to replace the Developer for all purposes of this Agreement. Such reservation and designation of a substitute developer would be accomplished by writing by City to Developer.

10.8 Counterparts. Any Project Document may be executed in counterparts, all of which, taken together, shall be deemed to be one and the same document.

10.9 Prior Agreements; Amendments; Consents . This Agreement (together with the other Project Documents) contains the entire agreement between City and Developer with respect to the Portion A Site , and all prior neg otiations, understandings and agreements with respect to such matters are superseded by this Agreement and such other Project Documents. The Original Agreement is superseded by this Agreement; the Original Agreement shall hereafter have no further force and effect. No modification of any Project Document (including waivers of rights and conditions) shall be effective unless in writing and s igned by the party or parties against whom enforcement of such modification is sought, and then only in the specific instance and for the specific purpose given. This Agreement is executed in three (3) duplicate originals, each of which is deemed to be an original. This Agreement includes pages 1 through 63, plus signature pages and Attachments 1 through 1 8, which constitutes the entire understanding and agreement of the parties.

This Agreement integrates all of the terms and conditions mentioned herein o r incidental hereto, and supersedes all negotiations or previous agreements among the parties or their predecessors in interest with respect to all or any part of the subject matter hereof.

All waivers of the provisions of this Agreement must be in writing by the appropriate authorities of City and Developer, and all amendments hereto must be in writing by the appropriate authorities of City and Developer. Whenever this Agreement provides for action by City, the City Manager may act on behalf of City unless the context or applicable law requires otherwise.

10.10 Governing Law. All of the Project Documents shall be governed by, and construed and enforced in accordance with, the laws of the State of California. Developer ir revocably and unconditionally submits to the jurisdiction of the Superior Court of the State of California for the County of Placer in connection with any legal action or proceeding arising out of or relating to this Agreement or the other Project Documents. Assuming proper service of process, Developer also waives any objection regarding personal or in rem jurisdiction or venue. 660

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10.11 Severability of Provisions. No provision of any Project Document that is held to be unenforceable or invalid shall affect the remaining provisions, and to this end all provisions of the Project Documents are hereby declared to be severable.

10.12 Headings. Article and section headings are included in the Project Documents for convenience of reference only and shall not be used in construing the Project Documents.

10.13 Conflicts. To the great feasible extent, the provisions of this Agreement shall be construed as consistent with the Project Documents. In the event of any conflict between the provisions of this Agreement and those of any other Project Document executed by City, the Project Documents as executed by City shall prevail; provided however that, with respect to any matter addressed in both such documents, the fact that one document provides for greater, lesser or different rights or obligations than the other shall not be deemed a conflict unless the applicable provisions are inconsistent and could not be simultaneously enforced or performed.

10.14 Time of the Essence. Time is of the essence of all of the Project Documents.

10.15 Conflict of Interest. No member, official or employee of City shall have any direct or indirect interest in this Agreement, nor participate in any decision relating to the Agreement which is prohibited by law.

10.16 Cure by Limited Partner. Limited Partner is not obligated to perform as Developer under this Agreement; however, in the event a breach by Developer is cured by Limited Partner, City will accept such cure. Any cure by Limited Partner shall be accomplished within the time afforded Developer for cure hereunder, excepting that in the event it is necessary to replace the General Partner of Developer in order to effect a cure, Limited Partner shall be afforded an additional reasonable time to replace the General Partner and accomplish the cure.

Notwithstanding any provision of this Lease to contrary effect, approval by the Limited Partner and notice to the Limited Partner shall not be required as of such time as Limited Partner does not hold an interest in the Project or Developer’s rights under this Agreement.

10.17 Warranty Against Payment of Consideration . Developer warrants that it has not paid or given, and will not pay or give, any third person any money or other consideration for obtaining this Agreement.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed on the dates hereinafter respectively set forth.
(signatures on following pages)

661

S-1
Rocklin Site A Portion, v3
DEVELOPER:

PACIFIC STREET HOUSING ASSOCIATES
FOUR, L.P., a California limited partnership
By: CHW Pacific Street Four LLC, its managing
general partner
By: Community HousingWorks, a California
nonprofit public benefit corporation (its sole member
and manager)
By:

Kevin Leichner
Senior Vice President Housing and Real Estate
Development

Consent and approval of CHW:

Community HousingWorks, a California nonprofit
public benefit corporation (“CHW”), hereby
evidences its approval and consent that any rights of
CHW under the Original Agreement are hereby
assigned to Pacific Street Housing Associates Four,
L.P., a California limited partnership
By:

Kevin Leichner
Senior Vice President Housing and Real Estate
Development

662

S-2
Rocklin Site A Portion, v3
CITY:

CITY OF ROCKLIN, a municipal corporation
By:

Jill Gayaldo, Mayor
ATTEST:

Avinta Madhukansh-Singh, City Clerk
APPROVED AS TO FORM:

Mark Huebsch, Consulting Attorney

663

Attachment No. 1

Rocklin Site A Portion, v3
ATTACHMENT NO. 1

PORTION A SITE MAP

664

Attachment No. 2

Rocklin Site A Portion, v3
ATTACHMENT NO. 2

LEGAL DESCRIPTION OF THE PORTION A SITE

665

Attachment No. 3

Page 1 of 1 ends

Rocklin City CouncilNovember 18, 2025

Rocklin City Council
November 18, 2025