Staff Report - City Council-Housing Authority - RVP Group (formerly Central City II [Rental Assistance Demonstration 3]) — Sacramento City Council, May 9, 2023 (part 1 of 2)

City of Sacramento
City Council - 2PM Report
915 I Street Sacramento, CA 95814
www.cityofsacramento.org
File ID: 2022-02567 5/9/2023 Public Hearing Item 2.

City Council/Housing Authority - RVP Group (formerly Central City II [Rental Assistance Demonstration 3]): Tax Equity and Fiscal Responsibility Act (TEFRA) and Approval of Final Tax Exempt Bond and Loan Documents (Noticed on April 25, 2023) File ID: 2022-02567
Location: 2516 H Street, Represented by Councilmember Valenzuela, 917 38 th Street, District 4,
Represented by Mayor Steinberg, and 600 I Street, District 4, Represented by Councilmember Valenzuela
Recommendation: Conduct a public hearing, and upon conclusion adopt: 1) a City Council Resolution indicating the Housing Authority has conducted a Tax Equity and Fiscal Responsibility Act (TEFRA) public hearing related to the proposed acquisition, rehabilitation and development of RVP Group (formerly Central City II (Rental Assistance Demonstration 3) (Project); 2) a Housing Authority Resolution authorizing the Executive Director or designee to a) issue, execute, and deliver mortgage revenue bonds of up to $57 million for the financing of the Project; b) execute and deliver necessary documents relating thereto, c) approve all actions taken by officers and agents of the Housing Authority deemed necessary or advisable to issue and deliver the bonds; 3) a Housing Authority Resolution a) authorizing SHRA to negotiate, enter into, execute and amend from time to time a funding agreement comprised of up to $990,000 in Housing Authority Funds (HAF) and related documents for the construction and permanent financing of the Project with the Sacramento Housing Authority Repositioning Program, Inc. (Developer) and execute other documents, as approved to form by its Office of the General Counsel, and perform other actions required for the HAF funds, including without limitation, negotiation, regulatory agreements, financial restructuring, and extensions, consistent with its adopted policy and with this resolution.

Contact: Christine Weichert, Director, Development Finance, (916) 440-1353, [email protected]; Sacramento Housing and Redevelopment Agency
Presenter: Christine Weichert, Director, Development Finance, (916) 440-1353, [email protected]; Sacramento Housing and Redevelopment Agency
Attachments:
01-Description/Analysis
02-City Council Resolution - TEFRA
03-Housing Authority Resolution - Bonds
04-Exhibit A: A Public Disclosure Relating to Conduit Revenue Obligations

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File ID: 2022-02567 5/9/2023 Public Hearing Item 2.
05-Housing Authority Resolution - HAF Loan Agreement
06-Exhibit A: HAF Loan Documents
07-Exhibit B: Seller Carryback Loan Documents
08-Exhibit C: Cash Proceeds Loan Documents
09-Vicinity Map - Big Trees
10-Vicinity Map - Pine Knoll
11-Vicinity Map - Riverview Plaza
12-Vicinity Map - RVP Group - Big Trees, Pine Knoll and Riverview Plaza 13-Project Pictures
14-Residential Project Summary
15-Cashflow Proforma
16-Maximum Income and Rent Limits
Additional Description/Analysis
Issue Detail: The Housing Authority of the City of Sacramento (HACS) continues to transition its public housing portfolio to the Rental Assistance Demonstration (RAD) program with the conversion of the Big Trees, Pine Knoll, and Riverview Plaza buildings in Sacramento’s Central City. The conversion of the units to RAD will convert them from public housing units to the multifamily bond and Low Income Housing Tax Credit Program (LIHTC) with Project Based Vouchers (PBV). HACS will continue to provide property management of the units.

On October 30, 2018, the Housing Authority Board (Board) of the City of Sacramento (City) adopted Resolution No. 2018-0019, which approved updates to the Housing Authority Asset Repositioning Plan, allowing for the conversion of the public housing portfolio under the RAD and Section 18 Demolition and Disposition Programs. The Board also authorized the Housing Authority to submit an application to the United States Department of Housing and Urban Development (HUD) to reposition and convert City Public Housing Properties.

The Guiding Principles of the Asset Repositioning Plan, adopted as the policy direction for each reposition activity, are to prevent the loss of units for extremely low-income households, facilitate a decrease in reliance on federal funds, incorporate smart growth principles into development opportunities, reinvest any sale proceeds into Housing Authority replacement units, foster partnerships with entities to position development efforts for success, and to pursue actions that would generate fees and other revenue for the Housing Authority. Conversion to RAD is a critical component of the Asset Repositioning plan as RAD allows public housing agencies to convert public housing units to long-term, PBV rental assistance developments. Converting the properties under RAD facilitates access to private debt and equity to address immediate and long-term capital needs.

The Sacramento Housing Authority Repositioning Program, Inc. (Developer) has completed the first two phases of the RAD projects. RAD Phase 1 consists of six scattered sites, including the Pointe Lagoon Apartments (two sites in the County and one in the City of Elk Grove), Rio Garden Apartments in the County, Oak Park Apartments in the City of Sacramento, and Meadow Commons in the City of Sacramento. RAD Phase 2 consists of two scattered sites, including Capitol Terrace and Edge Water Apartments located in the City of Sacramento. The subject of this report is RVP Group (formerly named Central City II (RAD 3)), which is comprised of three scattered sites Big

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File ID: 2022-02567 5/9/2023 Public Hearing Item 2.

Trees, Pine Knoll, and Riverview Plaza, located in the City of Sacramento.

The RAD vouchers will be approved by HUD prior to the close of construction financing. On April 1, 2022, Sacramento Housing and Redevelopment Agency (SHRA), on behalf of HACS, approved the PBVs as follows:

Central City II (RAD 3) Scattered
Site Name and Location
No. of RAD
Vouchers
No. of
PBV
Manager
Unit
Total
Units
Big Trees - 2516 H Street
Sacramento, 95816
6 22 1 29
Pine Knoll - 917 38th Street
Sacramento, 95816
6 23 1 30
Riverview Plaza - 600 I Street
Sacramento, 95814
0 123 1 124
Total 12 168 3 183
On June 14, 2022, the Housing Authority Board (Board) adopted Resolution 2022-0171, approving the Housing Authority of the City of Sacramento to provide a bond issuance not to exceed $57 million for financing the acquisition, construction, and development of the Project.

Also on June 14, 2022, the Council adopted Resolution 2022-0012 approving a loan commitment comprised of $25,417,721 in Seller Carryback Loan, $8,370,000 in Ground Lease Loan, and $6,262,496 in Cash Proceeds Loan and authorizing the Sacramento Housing and Redevelopment Agency (Agency) to negotiate, enter into, execute, and amend from time to time funding agreements with the Developer.

On August 9, 2022, HACS and the Developer submitted a joint application for four percent Low- Income Housing Tax Credits (LIHTC) from the California Tax Credit Allocation Committee (CTCAC) and tax-exempt mortgage revenue bonds (MRB) from California Debt Limit Allocation Committee (CDLAC) for the acquisition, construction, and permanent financing of the Project. On November 30, 2022, the Project was successfully awarded Low-Income Housing Tax Credits and mortgage revenue bonds.

On September 1, 2022, the Developer submitted an application requesting gap financing from the Agency in the amount of $990,000 of Housing Authority Funds (HAF) for the acquisition, construction, and permanent financing of the Project. This gap in financing is a result of interest rate increases on the Project’s permanent loan. The Developer also changed the name of the project from “Central City II” to “RVP Group” and the name of the borrowing entity to “RVP Group LP” to align with legal entity names and improve clarity.

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File ID: 2022-02567 5/9/2023 Public Hearing Item 2.

Staff is recommending adoption of the TEFRA, approval of the final tax-exempt mortgage revenue bond documents, and approval to enter into the HAF funding and related Loan agreements.

Development:

Big Trees
The Big Trees property is located at 2516 H Street located in the Midtown neighborhood. The property has a three
‐
story senior affordable housing development comprised of 29 one ‐
bedroom
units that include a manager’s unit. Also, the property offers a community room with kitchenette and laundry facilities.

Pine Knoll
The Pine Knoll property is located at 917 38th Street in the East Sacramento neighborhood. The property is a two
‐
story senior development comprised of 30 one
‐
bedroom apartment units that
include a manager’s unit. The development also has a community room, kitchen, and laundry room.

Riverview Plaza
The Riverview Plaza property is a mixed
‐
use development located at 600 I Street in downtown
Sacramento. The development was constructed in 1988 with nine percent LIHTC financing. The senior residential portion of the building (floors 3
‐
14) consists of 123 one
‐
bedroom units and one two
‐
bedroom manager unit. In addition to the residential portion described above, this development includes a courtyard and outdoor terraces, swimming pool, fitness room, library, commercial kitchen, craft room, television lounge, computer room, seating areas, an exercise room, and 12 laundry rooms.

There is also a large indoor courtyard common area, the residential lobby, and restrooms. The 15 th
floor has a community/dining room, commercial kitchen, and outdoor terraces. The 16 th floor houses an exercise room, common area restrooms, and an outdoor swimming pool.

The public access common area occupies two floors. The first floor includes the rental office that will serve residents from Big Trees, Pine Knoll, and Riverview Plaza, a former commission meeting room, a hair salon, daycare, and currently vacant deli/market space.

Developer
: The Sacramento Housing Authority Repositioning Program, Inc. (SHARP) is a nonprofit public benefit corporation created by the Housing Authority in 2009 to implement the Housing Authority’s Asset Repositioning Plan. Activities undertaken by SHARP include acquiring, developing, financing, rehabilitating, owning, and operating affordable housing to maintain and preserve these affordable units. SHARP has partnered with BRIDGE Housing to rehabilitate three other Housing

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File ID: 2022-02567 5/9/2023 Public Hearing Item 2.
affordable units. SHARP has partnered with BRIDGE Housing to rehabilitate three other Housing Authority properties, including Sutterview, Washington Plaza, and Sierra Vista Apartments. SHARP completed the rehabilitation of six properties in the first phase of the RAD Program and the rehabilitation of two properties in the second phase of the RAD Program.

Property Management
: Housing Authority staff currently manages over 3,000 housing units throughout the City and County of Sacramento, which includes the Big Trees, Pine Knoll, and Riverview Plaza properties. It is proposed that Housing Authority staff will continue to manage the units after conversion to RAD.

Resident Services: LifeSTEPS will provide 40 hours of resident services each week for the residents of this Project.

Security Plan
: The security plan includes installation of upgraded exterior lighting and surveillance camera equipment at each building.

Project Financing : The proposed financing of the Project includes tax-exempt bonds, four percent LIHTC, a conventional loan, a Housing Authority seller carryback loan, a Housing Authority ground lease loan, a Housing Authority cash proceeds loan, a Housing Authority Funds loan, a net operating income during rehabilitation, a deferred developer fee, RAD Program specific PBVs and HACS PBVs.

Low-Income Set-Aside Requirements : As a condition of receiving LIHTC and the benefits of tax- exempt bond financing, federal law requires some units to be set aside for targeted income groups.

Income restrictions from LIHTC financing require that 20 percent of the units have rents that are affordable to households with income at or below 50 percent of Area Median Income.

The affordability restrictions will be specified in regulatory agreements between SHRA and the Developer. The Project Summary and Cashflow Proforma are included as Attachments 14 and 15. A schedule of maximum income and rents are included in Attachment 16. The anticipated funding sources and their affordability requirements are summarized in the table below for the development:

RVP Group (formerly Central City II [RAD 3])
Unit Type Units % of Units Affordability Restrictions¹
(Area Median Income or AMI)
Tax-Exempt Bonds, Four
Percent LIHTC, HACS Loans
and Project Based Vouchers
60 33% 40% AMI
62 34% 50% AMI
58 32% 60% AMI
Management Unit 3 1%
Total 183 100%
¹Pursuant to 24CFR 983.301, contract rents approved by HUD may exceed the tax-credit rent limits; the tenant rent will not exceed 30% of the household adjusted gross income with PBV.

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File ID: 2022-02567 5/9/2023 Public Hearing Item 2.

Policy Considerations: The recommended actions for the Project are consistent with:
a) United States Department of Housing and Urban Development guidelines to reposition and convert County Public Housing Properties under the Rental Assistance Demonstration Program; b) Housing Authority Asset Repositioning Plan; and c) the 2021-2029 Housing Element, Policies H-6.2, rehabilitation and preservation, d) the Sacramento Promise Zone Plans and Goals, Sustainably Built Community sub-goal is to increase housing types and transit growth to promote livability and connectivity within the Promise Zone (Resolution No. 2015-263) (Riverview Plaza) e) the Opportunity Zone that provides a federal tax incentive for investors, who invest in real estate projects and operating businesses located in designated low-income communities through deferral and partial tax reductions of reinvested capital gains and forgiveness of tax on new capital gains (enacted into federal law through the Tax Cuts and Jobs Act of 2017) (Riverview Plaza); and is generally consistent with the approved Agency’s Multifamily Lending and Mortgage Revenue Bond Policies.

All affordable housing units will be regulated for a period of 55 years by the California Tax Credit Allocation Committee as a LIHTC funding requirement. Regulatory restrictions of the Project will be specified in the bond regulatory agreement between the Developer and the Housing Authority for a period of 55 years. Compliance with the regulatory agreement will be monitored by the Agency on an annual basis.

Economic Impacts: The Project is expected to create 543.98 total jobs (305.39 direct jobs and 238.59 jobs through indirect and induced activities) and create $47,717,888 in total economic output ($29,325,411 of direct output and another $18,392,477 of output through indirect and induced activities).

The indicated economic impacts are estimates calculated using a calculation tool developed by the Center for Strategic Economic Research (CSER). CSER utilized the IMPLAN input-output model (2009 coefficients) to quantify the economic impacts of a hypothetical $1 million of spending in various construction categories within the City of Sacramento in an average one-year period. Actual impacts could differ significantly from the estimates and neither the City of Sacramento nor CSER shall be held responsible for consequences resulting from such differences.

Environmental Considerations: California Environmental Quality Act (CEQA): The disposition and rehabilitation of the identified properties under the RAD program have been found to be Categorically Exempt under CEQA pursuant to CEQA Guidelines Section 15301, “Existing Facilities.” National Environmental Policy Act (NEPA): The disposition and rehabilitation of the identified properties under the RAD program have been found to be Categorically Excluded under NEPA pursuant to 24 CFR 58.35(a)(3)(ii) and (5), and convert to exempt pursuant to 24 CFR 58.34(a)(12).

Sustainability: The proposed project has been reviewed for consistency with the goals, policies, and targets of the City of Sacramento’s 2035 General Plan. If approved, this project will advance Goal H-

1.1 - Sustainable Communities. This is accomplished by reducing the use of fossil fuels, promoting energy-efficient building design and site planning, and creating housing that is healthier, safer, more comfortable, and durable.

Commission/Committee Action: Sacramento Housing and Redevelopment Commission: At its April

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File ID: 2022-02567 5/9/2023 Public Hearing Item 2.
5, 2023 meeting, the Sacramento Housing and Redevelopment Commission reviewed the staff recommendation for this item. The votes were as follows:

AYES: Amanfor, Duncan, Morgan, Nunley, Osmany, Ramos, Ross, Staajabu, Woo NOES: None
ABSENT: Griffin, Starks
Rationale for Recommendation: The recommended actions enable the Agency to continue to fulfill its mission of providing a range of affordable housing opportunities in the City and are consistent with United States Department of Housing and Urban Development guidelines related to the repositioning and conversion of City Public Housing Properties under the Rental Assistance Demonstration Program, Housing Authority Asset Repositioning Plan, 2021-2029 Housing Element as part of Sacramento’s 2035 General Plan, and is generally consistent with the Agency’s previously approved Multifamily Lending and Mortgage Revenue Bond Policies.

Financial Considerations: SHRA will receive a one-time issuance fee of 0.25 percent of the bond amount, which is payable at bond closing, and annual payment for monitoring the regulatory restrictions and administration of the bonds, in the amount of 0.125 percent of the bond amount and $100 per each assisted unit, but not to exceed $25,000 for the term of 55 years. The Developer will be responsible for payment of all costs, fees, and deposits relating to the bond application. Mortgage revenue bonds do not represent a financial obligation of the Agency, Housing Authority, or City of Sacramento. The law firm, Orrick, Herrington and Sutcliffe, LLP, will serve as bond counsel for the Housing Authority.

Local Business Enterprise (LBE): Local Business Enterprise requirements do not apply to this report. Minority and Women’s Business Enterprise requirements and Section 3 will be applied to all activities to the greatest extent feasible and as required by federal funding and in accordance with SHRA’s Section 3 Economic Opportunity Plan. The Developer and general contractor will work with SHRA’s Section 3 Administrator, the Sacramento Employment and Training Agency, the Greater Sacramento Urban League, or similar entities, to promote employment opportunities.

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RESOLUTION NO. 2023-

Adopted by the Sacramento City Council

on date of

RVP GROUP PROJECT: APPROVAL OF THE ISSUANCE OF OBLIGATIONS BY

THE HOUSING AUTHORITY OF THE CITY OF SACRAMENTO ON BEHALF OF RVP

GROUP LP, A CALIFORNIA LIMITED PARTNERSHIP

BACKGROUND

A. The Housing Authority of the City of Sacramento, a housing authority organized and existing under the laws o f the State of California (the Authority ), proposes a plan of financing providing for the issuance of exempt facility bonds for a qualified residential rental project pursuant to Section 142(a)(7) of the Internal Revenue Code of 1986 (the Code) in one or more series issued from time to time, including bonds issued to refund su ch exempt facility bonds in one or more series from time to time, and at no time to exceed $57 million (the “Obligations”) and to lend the proceeds thereof to RVP Group LP, a California Limited Partnership or a partnership of which Sacramento Housing Autho rity Repositioning Program, Inc. (SHARP) (the Developer) or a related person to the Developer is the general partner , to be used to provide funds to finance or refinance the acquisition, rehabilitation and development of the following multifamily housing r esidential facilities: (1) Big Trees Apartments, 2512 ‐2516 H Street, Sacramento, California, consisting of 29 units (Obligation proceeds in an amount not to exceed $1 1 million), (2) Pine Knoll Apartments, 917 38th Street, Sacramento, California, consisting of 30 units (Obligation proceeds in an amount not to exceed $1 1 million), and (3) Riverview Plaza Apartments, 600 I Street, Sacramento, California, consisting of 12 4 units (Obligation proceeds in an amount not to exceed $46 million).

B. Section 147(f) of the Code requires the execution and delivery of the Obligations to be approved by the City Council of the City (the City Council ), as the elected representative of the City of Sacramento and the host jurisdiction of the subject multifamily housing residentia l facility, after a public hearing has been held following reasonable and proper notice.

C. A public hearing was held by the City Council on March 14, 2023, following duly published notice thereof, and all persons desiring to be heard have been heard.

D. It is in the public interest and for the public benefit that the City Council, as the elected representative of the City of Sacramento and the host jurisdiction of the subject multifamily housing residential facility, approve the execution and delivery by the Authority of the Obligations.

BASED ON THE FACTS SET FORTH IN THE BACKGROUND, THE CITY COUNCIL RESOLVES AS FOLLOWS:

Section 1. The City Council of the City of Sacramento hereby finds, determines and declares that issuance by the Authority of the Obligatio ns in the maximum principal amount of $57 million for the purposes described above is hereby approved.

Section 2. This resolution shall take effect immediately upon its adoption.

RESOLUTION NO. 2023 -

Adopted by the Housing Authority of the City of Sacramento

on date of

A RESOLUTION OF THE HOUSING AUTHORITY OF THE CITY OF SACRAMENTO

AUTHORIZING THE ISSUANCE OF MULTIFAMILY HOUSING REVENUE NOTES IN AN AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED $50,000,000 FOR THE

FINANCING OF A MULTIFAMILY RENTAL HOUSING PROJECT TO BE GENERALLY KNOWN AS RVP GROUP PROJECT; AUTHORIZING THE

EXECUTION AND DELIVERY OF A FUNDING LOAN AGREEMENT, A BORROWER

LOAN AGREEMENT AND A REGULATORY AGREEMENT AND DECLARATION OF

RESTRICTIVE COVENANTS FOR EACH PROJECT SITE AND OTHER
DOCUMENTS RELATING THERETO; AND APPROVING OTHER ACTIONS AND

MATTERS RELATING THERETO

BACKGROUND

A. The Housing Authority of the City of Sacramento (the Authority) is authorized by Chapter 1 of Part 2 of Division 24 of the California Health and Safety Code (commencing with Section 34200) (the Act) to issue and sell revenue obligations for the purpose of making loans or otherwise providing funds to finance the acquisition, construction, rehabilitation and development of multifamily residential rental housing projects, including units for households meeting the income limits set forth in the Act.

B. The governing board of the Authority (the Board) hereby finds and declares that it is necessary, essential and a public purpose for the Authority to finance multifamily housing projects pursuant to the Act, in order to increase and maintain the supply of multifamily housing in the City of Sacramento (the City) available to persons and families within the income limitations established by the Act.

C. The proceeds of such obligations issued by a housing authority may be loaned to a nongovernmental owner of multifamily housing, who shall be responsible for the payment of such obligations, to allow such nongovernmental owner to reduce the cost of operating such housing and to assist in providing housing for low and very low income persons.

D. WHEREAS, RVP Group LP, a California limited partnership, and entities related thereto (collectively, the Borrower), has requested the Authority issue its Housing Authority of the City of Sacramento Multifamily Housing Revenue Construction/Permanent Note (RVP Group Pr oject) 2023 Issue A -1 and its Housing Authority of the City of Sacramento Multifamily Housing Revenue Construction Note (RVP Group Project) 2023 Issue A -2 (collectively, the Notes) and use the proceeds thereof to finance the acquisition and rehabilitation of a 183- unit multifamily rental housing development, consisting of (i) a 29 -unit multifamily rental housing development located at 2512 -2516 H Street, Sacramento, California and known as Big Trees; (ii) a 30 -unit multifamily rental housing development located at 917 38th Street, Sacramento, California and known as Pine Knoll, and (ii) a 124 -unit multifamily rental housing development located at 600 I Street, Sacramento, California and known as Riverview Plaza (each a Site), all located in the City, and to be commonly known as RVP Group Project (the Project).

E. WHEREAS, the Notes are to be purchased by Citibank, N.A., or an affiliate thereof (the Funding Lender), as initial holder of the Notes in accordance with the Authority’s private placement policies.

F. WHEREAS, on November 30, 2022, the Authority received an allocation in the amount of $40,559,601 (the Allocation Amount) from the California Debt Limit Allocation Committee in connection with the Project.

G. WHEREAS, the Authority is willing to issue the Not es in an aggregate principal amount not to exceed $50,000,000, provided that the portion of such Notes issued as federally tax-exempt obligations shall not exceed the Allocation Amount, and to loan the proceeds thereof to the Borrower to assist in providin g financing for the Project, which will allow the Borrower to reduce the cost of the Project and to assist in providing housing for persons of low and very low income.

H. WHEREAS, the City Council of the City has by resolution approved the issuance of the Notes by the Authority, following notice and a public hearing as required by Section 147(f) of the Internal Revenue Code of 1986, as amended.

I. WHEREAS, there have been prepared and made available to the Board the following documents required for the issuance of the Notes, and such documents are now in substantial form and appropriate instruments to be executed and delivered for the purposes intended:

(1) Funding Loan Agreement (the Funding Loan Agreement) to be entered into between the Authority and the Funding Lender;

(2) Borrower Loan Agreement (the Borrower Loan Agreement) to be entered into between the Authority and the Borrower;

(3) Regulatory Agreement and Declaration of Restrictive Covenants (the Regulatory Agreement) to be entered into between the Authority and the Borrower, with respect to each Site related to the Project; and

(4) Contingency Draw-Down Agreement (the Contingency Draw -Down Agreement) to be entered into by the Funding Lender and the Borrower.

J. WHEREAS, the Authority hereby finds and declares tha t this resolution is being adopted pursuant to the powers granted by the Act.

K. WHEREAS, all conditions, items and acts required to exist, to have happened and to have been performed precedent to and in connection with the issuance of the Notes as contemplated by this resolution and the documents referred to herein will exist, have happened and have been performed in due time, form and manner as required by the laws of the State of California, including the Act.

L. WHEREAS, pursuant to Section 5852.1 of the California Government Code, the Authority, as a conduit financing provider, has received certain representations and good faith estimates from the Borrower and has disclosed such good faith estimates as set forth on Exhibit A attached hereto.

BASED ON THE FACTS SET FORTH IN THE BACKGROUND, THE HOUSING AUTHORITY OF THE CITY OF SACRAMENTO RESOLVES AS FOLLOWS:

Section 1. The Authority hereby finds and declares that the above recitals are true and correct.

Section 2. Pursuant to the Act and the Funding Loan Agreement the issuance of the Notes designated as “ Housing Authority of the City of Sacramento Multifamily Housing Revenue Construction/Permanent Note (RVP Group Project) 2023 Issue A-1” and “Housing Authority of the City of Sacramento Multifamily Housing Revenue Construction Note (RVP Group Project) 2023 Issue A-2” are hereby authorized, including, if and to the extent necessary, one or more series or sub-series, with appropriate modifications and series and sub -series designations as necessar y, in an aggregate principal amount not to exceed $50,000,000; provided that the aggregate principal amount of any tax -exempt Notes issued shall not exceed the Allocation Amount.

Section 3. The Notes shall be executed and delivered in the form set forth in and otherwise in accordance with the Funding Loan Agreement, and shall be executed on behalf of the Authority by the manual signature of the Executive Director of the Authority, or a designee thereof, acting alone (each an Authorized Officer), with such changes, deletions and insertions as may be approved by such Authorized Officers and legal counsel to the Authority, such approvals being conclusively evidenced by the execution and delivery thereof, and the Clerk of the Sacramento Housing and Redevelopm ent Agency or such designee (the Clerk) is hereby authorized and directed, if required, to attest the Notes in said form by manual or facsimile signature thereof. The Notes shall be secured in accordance with the terms of the Funding Loan Agreement presen ted to this meeting, as hereinafter approved.

Section 4. Payment of the principal and purchase price of, and redemption/prepayment premium, if any, and interest on, the Notes shall be made solely from amounts pledged thereto under the Funding Loan Agreement and the Notes shall not be deemed to constitute a debt or liability of the Authority, the City of Sacramento, the Sacramento Housing and Redevelopment Agency or any commissioners of the Board.

Section 5. The Funding Loan Agreement in the form on file w ith the Clerk, is hereby approved. The Authorized Officers, each acting alone, are hereby authorized for and on behalf of the Authority to execute by manual signature and deliver the Funding Loan Agreement with such changes, additions or deletions as may be approved by such Authorized Officer and legal counsel to the Authority, such approvals to be conclusively evidenced by the execution and delivery thereof. The date, maturity date or dates (which shall not be more than 45 years from the date of execution and delivery thereof), interest rate or rates (which shall not exceed 12%), interest payment dates, denominations, form, registration privileges, manner of execution, place of payment, terms of prepayment and other terms of the Notes shall be as provided in the Funding Loan Agreement as finally executed.

Section 6. The Borrower Loan Agreement in the form on file with the Clerk, is hereby approved. The Authorized Officers, each acting alone, are hereby authorized for and on behalf of the Authority to execute by manual signature and deliver the Borrower Loan Agreement with such changes, additions and deletions as may be approved by such Authorized Officer and legal counsel to the Authority, such approvals to be conclusively evidenced by the execution and delivery thereof.

Section 7. The Regulatory Agreement in the form on file with the Clerk, is hereby approved. The Authorized Officers, each acting alone, are hereby authorized for and on behalf of the Authority to execute by manual signature and deliver a Re gulatory Agreement for each Site with such changes, additions or deletions as may be approved by such Authorized Officer and legal counsel to the Authority, such approvals to be conclusively evidenced by the execution and delivery thereof.

Section 8. The Contingency Draw -Down Agreement in the form presented at this meeting is hereby approved.

Section 9. The Executive Director, or her designee, is hereby authorized to execute and deliver the Notes to the Funding Lender pursuant to the terms and conditions of the Funding Loan Agreement.

Section 10. All actions heretofore taken by the officers and agents of the Authority with respect to the financing of the Project and the sale and issuance of the Notes are hereby approved, confirmed and ratified, and the proper officers of the Authority, including the Authorized Officers, are hereby authorized and directed, for and in the name and on behalf of the Authority, to do any and all things and take any and all actions and execute any and all certificates, agreements and other documents, which they, or any of them, may deem necessary or advisable in order to consummate the lawful sale of the Notes, in accordance with this Resolution, including but not limited to a tax certificate, loan related documents, an assignm ent of deed of trust, subordination or intercreditor agreement s, any endorsement, allonge or assignment of any note, and such other documents as described in documents herein approved. The documents authorized herein may be dated such date, and different s eries designations given to the Notes, as may be appropriate to indicate when the Notes are actually sold or delivered or the nature of the Notes.

Section 11. All consents, approvals, notices, orders, requests and other actions permitted or required by a ny of the documents authorized by this Resolution, whether before or after the issuance of the Notes, including without limitation any of the foregoing that may be necessary or desirable in connection with any default under or amendment of such documents, any transfer or other disposition of the Project, any addition or substitution of security for the Notes or any redemption/prepayment of the Notes, may be given or taken by any Authorized Officer, as appropriate, without further authorization by the Board, and each such officer is hereby authorized and directed to give any such consent, approval, notice, order or request and to take any such action that such officer may deem necessary or desirable to further the purposes of this Resolution and the financing of the Project; provided such action shall not create any obligation or liability of the Authority other than as provided in the Funding Loan Agreement and other documents approved herein.

Section 12. This Resolution shall take effect immediately upon its adoption.

Table of Contents:

Exhibit A: Public Disclosure Relating to Conduit Revenue Obligations

EXHIBIT A

PUBLIC DISCLOSURES RELATING TO CONDUIT REVENUE OBLIGATIONS

Pursuant to California Government Code Section 5852.1, the borrower (the “Borrower”) identified below has provided the following required information to the Housing Authority of the City of Sacramento (the “Housing Authority”) prior to the Housing Authority’s regular meeting (the “Meeting”) of its Housing Authority Board (the “Board”) at which Meeting the Board will consider the authorization of conduit revenue obligations (the “Bonds”) as identified below.

1. Name of Borrower: RVP Group LP, a California limited partnership

2. Authority Meeting Date: March 14, 2023

3. Name of Bond Issue / Conduit Revenue Obligations: Not to exceed $40,559,601 Housing Authority of the City of Sacramento Multifamily Housing Revenue Bonds (Pass-Through – Central City II (RAD3)).

4. _X _Private Placement Lender or Bond Purchaser, __ Underwriter or ___ Financial Advisor (mark one) engaged by the Borrower from which the Borrower obtained the following required good faith estimates relating to the Bonds:

(A) The true interest cost of the Bonds, which means the rate necessary to discount the amounts payable on the respective principal and interest payment dates to the purchase price received for the new issue of Bonds (to the nearest ten- thousandth of one percent): 7.96%__

(B) The finance charge of the Bonds, which means the sum of all fees and charges paid to third parties: $608,394__

(C) The amount of proceeds received by the public body for sale of the Bonds less the finance charge of the bonds described in subparagraph (B) and any reserves or capitalized interest paid or funded with proceeds of the Bonds:
$39,811,207__

(D) The total payment amount, which means the sum total of all payments the borrower will make to pay debt service on the Bonds plus the finance charge of the Bonds described in subparagraph (B) not paid with the proceeds of the Bonds (which total payment amount shall be calculated to the final maturity of the Bonds): $44,413,509___

This document has been made available to the public at the Meeting of the Housing Authority.

RESOLUTION NO. 2023 -

Adopted by the Housing Authority of the City of Sacramento

on date of

RVP GROUP (FORMERLY CENTRAL CITY II [RAD 3]) PROJECT – AUTHORIZING A $990,000 FUNDING COMMITMENT HOUSING AUTHORITY FUNDS (HAF);

EXECUTION OF LOAN AGREEMENT AND RELATED DOCUMENTS WITH RVP GROUP, L.P., OR RELATED ENTITY; RELATED BUDGET AMENDMENT; AND

ENVIRONMENTAL FINDINGS

BACKGROUND

A. On June 14, 2022, the Council adopted Resolution 2022-0012 approving a loan commitment comprised of $25,417,721 in Seller Carryback Loan, $8,370,000 in Ground Lease Loan, and $6,262,496 in Cash Proceeds Loan and authorizing the Sacramento Housing and Redevelopment Agency (Agency) to negotiate, enter into, execute, and amend from time to time said funding agreements with the Sacramento Housing Authority Repositioning Program, Inc., (SHARP), or related entity (Developer) for RVP G roup (formerly Central City II [ Rental Assistance Demonstration 3]) (Project).

B. On September 1, 2022, SHARP applied for an allocation of $990,000 in Housing Authority Funds to assist in funding the acquisition, construction and permanent financing of the Project.

C. HACS finds that an economically feasible alternative method of financing on substantially comparable terms and conditions without subordination is not available. Therefore, HACS will need to subordinate the Housing Authority Funds loan to senior loans.

D. The disposition and rehabilitation of the identified properties under the RAD program have been found to be Categorically Exempt under California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Section 15301, “Existing Facilities.”

E. The disposition and rehabilitation of the identified properties under the RAD program have been found to be Categorically Excluded under the National Environmental Policy Act pursuant to 24 CFR 58.35(a)(3)(ii) and (5), and convert to exempt pursuant to 24 CFR 58.34(a)(12).

BASED ON THE FACTS SET FORTH IN THE BACKGROUND, THE HOUSING AUTHORITY OF THE CITY OF SACRAMENTO RESOLVES AS FOLLOWS:

Section 1. All evidence presented having been duly considered, the findings, including environmental findings regarding this action, as stated above, are found to be true and accurate and are hereby approved adopted.

Section 2. The Executive Director, or her designee, is authorized to negotiate, enter into, execute and amend the $ 990,000 Housing Authority Funds loan agreement and related documents and transmit to RVP Group LP, a California limited partnership, or related entity (Developer), and to enter into other agreements, execute other documents, and perform other actions the Agency deems necessary to fulfill the intent of the Loan Agreement and to ensure proper repayment of the HAF funds, including without limitation, loan restructuring, subordination, and extensions, all as approved by Agency legal counsel.

Table of Contents:

Exhibit A: HAF Loan Documents
Exhibit B: Seller Carryback Loan Documents
Exhibit C: Cash Proceeds Loan Documents

HAF CONSTRUCTION AND PERMANENT LOAN AGREEMENT
RVP Group
IN CONSIDERATION of their mutual promises, the parties agree as follows:

1. LOAN. Lender is making the Loan pursuant to the terms and conditions of this Loan Agreement. Lender a nd B
orrower have entered this Loan Agreement as of the Effective Date.

2. DEFINITIONS TABLES. The capitalized terms in this Loan Agreement shall have the meanings assigned in the following Definitions Tables and in Section 3 Definitions. Terms being defined are indicated by quotation marks. If an item in the Definitions Table is marked “None”, “Not Applicable”, “N/A” or equivalent or is left blank, that defined term is not applicable to this Loan or the referenced item is not required or is not included in this Loan as the context may indicate.

A. “LOAN INFORMATION” The general loan provisions of the Loan:
“EFFECTIVE DATE” May 1, 2023 The date as of which this Loan Agreement shall be effective. “LENDER” The following public agency that is making the Loan, and whose legal status and address are:

Name Housing Authority of the City of Sacramento (HACS) Legal Status A public body, corporate and politic
Principal Address 801 12th Street, Sacramento CA 95814
“BORROWER” The borrower of the Loan Proceeds whose name, legal status and address are:

Name RVP Group LP
Legal Status a California limited partnership
Principal Address 801 12th Street, Sacramento, CA 95814 “LOAN” The Loan made by this Loan Agreement.
“LOAN COMMITMENT” Lender’s loan commitment, made by letter dated as of June 14, 2022, as supplemented effective November 7, 2022
“LOAN PROGRAM” Lender’s Loan Program, commonly known as Housing Authority Funds (HAF) “LOAN AMOUNT” Nine Hundred Ninety Thousand Dollars and No Cents ($990,000.00) “INTEREST RATE” The interest rate is 3% per year, simple interest. “MATURITY DATE” The first day of the 684th calendar month following the Effective Date. “PAYMENT SCHEDULE” The Payment Schedule is in the Promissory Note. “BORROWER EQUITY”
No Less Than Thirty-One Million
Five Hundred Eighty -One Thousand
Dollars and No Cents ($31,581,000)
Which is the minimum amount of cash or cash equivalent
(excluding land equity or other non-cash investment in the Project) that Borrower is investing in the Project.

No Less Than One Million Eight
Hundred Thousand Dollars and No
Cents ($1,800,000)
Which is Borrower’s non- cash contribution to the Project (such as deferred Developer fees).
“SPECIAL TERMS” N/A
“PROJECT”
Which is the Project to be developed
on the Property with the Loan
Proceeds, described as:

The Riverview Plaza property is a mixed‐use development located at 600 I Street in downtown Sacramento. The
development was constructed in 1988 with nine percent
LIHTC financing in 1989. The senior residential portion of the building (floors 3‐14) consists of 123 one‐bedroom units and one two‐bedroom manager unit. In addition to the
residential portion described above, this development
includes a courtyard and outdoor terraces, swimming pool, fitness room, library, commercial kitchen, billiards room, craft room, television lounge, computer room, seating areas, an exercise room, and 12 laundry rooms. There is also a large indoor courtyard common area, the residential lobby, and restrooms. The 15th has a community/dining room,
commercial kitchen, and outdoor terraces. The 16th floor houses an exercise room, common area restrooms, and an
outdoor swimming pool. The public access common area
occupies two floors. The first floor includes the rental office that will serve residents from Big Trees, Pine Knoll, and Exhibit A
RVP Group - HAF Loan Agreement Page 2
Riverview Plaza, two former commission meeting rooms, a hair salon, daycare, and currently vacant deli/market space.

The second floor is vacant and ready for lease office spaces.

The rehabilitation of the Project will address interior improvements, repair and replacement of mechanical
systems, roofing, carpentry, plumbing, windows, and exterior finishes, Americans with Disabilities Act (ADA) upgrades, and site work detailed in the Scope of Development. Property Management will continue under HACS. In lieu of on‐site manager units, both Big Trees and Pine Knoll will employ an equivalent number of on‐site full-time property management staff to comply with S HRA’s Minimum Construction
Standards required during the rehabilitation period. There will also be 24‐hour security available for the residents of Central City II
B. “COLLATERAL” The Collateral securing repayment of the Loan, which Collateral consists of the following:
“PROPERTY” The following described real property, which is security for the Loan and the site of the Project:

Address 600 I Street, Sacramento, 95814
Assessor’s Parcel
Number 006-0032-029-001, 006-0032-029-002, 006-0032-029-003, 006-0032-028-004 “Legal Description” The Property is situated in the State of California, C ity of Sacramento, and is more particularly described in Exhibit 1: Legal Description attached and incorporated by reference.

Borrower’s Title
Interest Borrower has a leasehold interest in the Property. “ADDITIONAL
COLLATERAL”
The Additional Collateral securing repayment of the Loan is any additional security required by Lender under this Loan Agreement, including without limitation the following items, if any “PERSONAL PROPERTY”
Borrower’s interest in the following
personal property, tangible and
intangible, and all other such property
listed as security in this Loan
Agreement:

Materials and supplies for the Project,
Assigned Documents
OTHER ADDITIONAL COLLATERAL Borrower’s interest in the following property: None
C. “ESCROW INFORMATION”:
“Title Company” and
“Escrow Agent” Placer Title Company Which is the title company that will issue the Title Policy and that will act as Escrow Agent for the Escrow.
“Escrow” The escrow with Escrow Agent
“Closing Date” ***TBD*** Which is the date for close of the Escrow, as it may be extended.

D. “LIST OF EXHIBITS” (The following are attached and incorporated in this Loan Agreement):

EXHIBIT DEFINED TERM
Exhibit 1: Legal Description “Legal Description”
Exhibit 2: Scope of Development “Scope of Development”
Exhibit 3: Note Form “Note”
Exhibit 4: Trust Deed Form “Trust Deed”
Exhibit 5: Regulatory Agreement “Regulatory Agreement”
Exhibit 6: Escrow Instructions “Escrow Instructions
Exhibit 7: Funding Requirements “Funding Requirements”
E. “APPROVAL DOCUMENTS” Borrower shall submit the following documents for Lender approval:

Construction Agreement for the Project
Architectural Agreement for the Project
Borrower’s organizational documents, such as partnership agreements or corporate articles and by -laws RVP Group - HAF Loan Agreement Page 3
“Budget” for the Project
Evidence of financing as described in this Loan Agreement Plans and Specifications as defined in this Loan Agreement Relocation Plan
F. “ASSIGNED DOCUMENTS” Borrower shall assign the following documents to Lender:

Subject to the interests of any senior lender, any lease and rental agreements for the Property, or any part of it.

G. “ CONSTRUCTION INFORMATION”:
“Completion Date” ***TBD*** Which is the date on or before which the Completion of the Project must occur.
“General Contractor” ***TBD*** Which is the general contractor for construction of the Project.
“Project Architect” LPAS Architecture and Design
Inc. Which is the architect for design of the project.
“Retention”
The following percentage of each disbursement made
for construction wor k, in aggregate not to exceed the
following percentage of the Loan Amount, which shall
be retained by Lender for disbursement with the final
disbursement of the Loan:

Percentage of
Loan: 10%
H. “SPECIAL PROVISIONS” The following special provisions shall be in addition to the provisions of this Loan Agreement:

Loan Proceeds shall be used solely for Project construction and operation. No Loan Proceeds shall be used for predevelopment costs, except as provided in an approved Lender budget. Unless otherwise noted in the budget, predevelopment costs are not subject to withholding as Retention.

3. DEFINITIONS. Terms not defined in this Loan Agreement shall have the definitions assigned in the Trust Deed. As used in this Loan Agreement, the following terms shall have the following meanings:

3. 1. “Budget” is the budget approved by Lender for the development of the Project.

3. 2. “California Environmental Quality Act” or “CEQA” is established in the California Public Resources Codes § 21000 et seq. and is applicable to private activities requiring discretionary governmental approvals (Pub. Res. Code §210001.1, 21001, 21080 and 14 California Code of Regulations § 15002(c).

3. 3. “Change” means any extra work or installation of materials not included in the Plans and Specifications or any change in or deviation from the Plans and Specifications.

3. 4. “Conversion Date” means the date of the first close of escrow for all or any part of Borrower’s Approved Permanent Financing for the Project.

3. 5. “Close of Escrow” means the fulfillment of the Escrow terms and conclusion of the Escrow, including, without limitation, the execution of unexecuted documents, the recordation of documents specified for recording, the issuance of title insurance policies, the payment of fees and the delivery of funds and documents as directed in the escrow instructions for the Escrow. The Close of Escrow shall occur on the Closing Date.

3. 6. “Completion of the Project” means that, in Lender's sole judgment the Project has been constructed, rehabilitated, completed, equipped, and furnished in a good and proper manner in accordance with the Plans and Specifications, the Scope of Development and the Budget as approved by Lender; all notices of completion with respect to the Project have been filed and all statutory lien periods have expired; all costs of constructing the Project have been paid, including, without limitation, interest on the Note which may be due prior to the Completion Date; all necessary certificates of occupancy or permit sign -offs have been issued; and all of the conditions to final disbursement of the Loan have been satisfied.

3. 7. “Environmental Review” means the investigation and analysis of the Project’s impacts on the environment as may be required by CEQA and/or National Environmental Policy Act (NEPA), or of the Project’s impacts on any species RVP Group - HAF Loan Agreement Page 4
of plant or animal listed as a species of concern, or a threatened or endangered species under California or federal laws or regulations.

3.8. “Escrow” is the escrow with Title Company for the closing of the Loan.

3.9. “Escrow Instructions" means the Escrow Instructions for the Escrow signed by each of the parties to this Loan Agreement.

3.10. “Event of Default” is breach of or default in a party’s obligations under this Loan A greement, the Trust Deed, the Note, the Regulatory Agreement and any other instrument which is incorporated in this Loan Agreement or which otherwise secures the repayment of the Loan.

3.11. “Financial Statements” means the certified financial statements of Bo rrower (and any other persons on whose financial capacity Lender has relied in making this Loan) as may be required by Lender from time to time, including operating statements, balance sheets, and any other financial reports and information that Lender may require.

3.12. “Fixtures” means all fixtures located on or within the Project or now or later installed in or used in connection with any of the Project, including, as applicable and without limitation, all partitions, screens, awnings, motors , engines, boile rs, furnaces, pipes, plumbing, elevators, cleaning and sprinkler systems, fire extinguishing apparatus and equipment, water tanks, heating, ventilating, air conditioning and air cooling equipment, built -in refrigerators, and gas and electric machinery, appurtenances, and equipment, whether or not permanently affixed to the Project.

3.13. “General Contractor” means the general contractor named by Borrower in its application or supporting documents as the general contractor to do the Project, or any other general contractor so designated by Borrower and approved in writing in advance by Lender.

3.14. “Governmental Authority” means the United States of America, the State of California, the C ity of Sacramento, the City of Sacramento or any other political subdivision, age ncy, department, commission, board, bureau, or instrumentality of any of them.

3.15. “Governmental Requirement” means any law, ordinance, order, rule, regulation, plan, ruling, determination or requirement of a Governmental Authority.

3.16. “Loan” is the loan from Lender to Borrower made pursuant to this Loan Agreement.

3.17. “Loan Agreement” means this Construction and Permanent Loan Agreement, all exhibits attached to this Loan Agreement (which are incorporated in this Loan Agreement by this reference) and the Loan Documents which are not otherwise included in this definition.

3.18. “Loan Documents” means the Note, this Loan Agreement, the Security Documents, the Regulatory Agreement, and all other documents (including guaranties, if any) evidencing, securing, or relating to the Loan.

3.19. “Loan Maturity Date” means the date on which the entire unpaid balance of the Loan, including principal and interest, is due and payable.

3.20. “Loan Proceeds” means funds disbursed by Lender on account of the Loan and pursuant to this Loan Agreement.

3.21. “Mitigation Measure(s)” means those feasible measures, actions, or features that are to be incorporated into the Project in order to avoid or substantially reduce the Projects significant impact on the environment.

3.22. “National Environmental Policy Act” or “NEPA” contains the federally required procedures to review and analyze the effect and impact of the Project on the environment as applied to the Project under 24 Code of Federal Regulations Parts 50 and 58 et seq.

3.23. “Note” means that certain promissory note evidencing the Loan and attached hereto as Exhibit 3.

RVP Group - HAF Loan Agreement Page 5

3.24. “Other Lender Draw” means a draw request or other request for disbursement submitted to another lender for the Project.

3.25. “Person” means any natural person, corporation, firm, partnership, ass ociation, trust, government, governmental agency, or any other entity, whether acting in an individual, fiduciary, or other capacity.

3.26. “Personalty” means, whether or not listed as Additional Collateral, all of Borrower's interest in all accounts, contract rights, and general intangibles (specifically including any insurance proceeds and condemnation awards) arising out of the ownership, development, or operation of the Property, and all furniture, furnishings, equipment, machinery, construction materials an d supplies, leasehold interests in personal property, and all other personal property (other than Fixtures) of Borrower now or later located about the Property, together with all present and future attachments, accessions, replacements, substitutions, and additions, and the cash and noncash proceeds.

3.27. “Plans and Specifications” means the final set of architectural, structural, mechanical, electrical, grading, sewer, water, street, and utility plans and specifications for the Project, including all supplemen ts, amendments, and modifications.

3.28. “Potential Default” means an event that would constitute an Event of Default but for any requirement of notice to be given or period of grace or time to elapse.

3.29. “Project” means the development of the Property in accordance with the Plans and Specifications including, without limitation, all existing buildings, improvements, and appurtenances on the Property, all work of demolition and rehabilitation to be conducted on the Property, and all improvements, additions, and re placements constructed or placed at any time on the Property.

3.30. “Retention Draw” means the receipt by Borrower of any sums held by a lender for disbursement of a contractor’s retention after Borrower has completed the project.

3.31. “Security Documents” means t he Trust Deed, together with all other documents entered into between Borrower and Lender or by Borrower in favor of, or for the benefit of, Lender that recite that they are to secure the Loan.

3.32. “Senior Lender” means the maker of a loan with a lien senior to the Loan as set forth on the Title Policy.

3.33. “Title Policy” means the title insurance policies to be issued in connection with this Loan, as further defined in the Escrow Instructions.

3.34. “Trust Deed” means that certain Deed of Trust and Assignment of Rents between Borrower, as trustor, Lender, as beneficiary, and trustee which secures the Note and is attached hereto as Exhibit 4.

3.35. “Unavoidable Delay” is a delay in the performance by a party of any obligation which delay is unforeseeable and beyond the control of such party and without its fault or ne gligence. Unavoidable Delay shall not be reasonably foreseeable events consisting solely of acts of God, acts of the public enemy, acts of the Federal Government, acts of the other party, fires, floods, epidemics, quarantine restrictions, strikes, freight embargoes, and unusually severe weather (as for example, floods, tornadoes, or hurricanes) or delays of subcontractors due to such causes. In the event of the occurrence of any such enforced delay, the time or times for performance of such obligations of the parties shall be extended for the period of the enforced delay, as determined by Lender, provided that the party seeking the benefit of the provisions of this Section shall, within thirty (30) days after it has or should have knowledge of any such enforced delay, have first notified the other party, in writing, of the delay and its cause, and requested an extension for the period of the enforced delay.

4. B
ORROWER'S REPRESENTATIONS AND WARRANTIES. As a material inducement to Lender to enter into this Lo an Agreement and to make the Loan to Borrower, Borrower unconditionally, and each signatory who signs on its behalf, to the extent of their actual knowledge, represents and warrants to Lender, as of the Close of Escrow, as follows:

4.1. L
EGAL ORGANIZATION. Borrower is duly formed and validly exists in the form stated in Section 2 hereof, is qualified to do business in California, and has full power to consummate the transactions contemplated.

RVP Group - HAF Loan Agreement Page 6

4.2. BORROWER'S POWERS. Borrower has full authority to execute this Loa n Agreement, the Note, the Trust Deed, and all of the other Loan Documents, to undertake and consummate the contemplated transactions, and to pay, perform, and observe all of the conditions, covenants, agreements, and obligations.

4.3. BINDING OBLIGATION. Thi s Loan Agreement, the Note, the Trust Deed, and each of the other Loan Documents constitute a legal and binding obligation of, and are valid and enforceable against, each party other than Lender, in accordance with the terms of each.

4.4. LITIGATION. There ar e no actions, suits, or proceedings pending or, to the best knowledge of Borrower, threatened against or affecting Borrower, the Property, or any part of it, or involving the validity or enforceability of the Trust Deed, the priority of the lien, or the va lidity or enforceability of any of the other Loan Documents, at law or in equity, or before or by any Governmental Authority. Borrower is not in default with respect to any order, writ, injunction, decree, or demand of any court or other Governmental Authority.

4.5. N
O OTHER BREACH. The consummation of the transactions covered by this Loan Agreement and the payment and performance of all of the obligations in the Loan Documents will not result in any breach of, or constitute a default under, any mortgage, dee d of trust, lease, contract, loan or credit agreement, corporate charter, bylaws, partnership agreement, trust agreement, or other instrument to which Borrower or any of its general partners is a party or by which it or they or the Property may be bound or affected.

4.6. N
O DEFAULT. There is no Event of Default or Potential Default on the part of Borrower.

4.7. TITLE TO PROPERTY. Borrower is the sole legal and beneficial owner of the Property, which is free of all claims, liens, and encumbrances other than those shown in the Title Policy.

4.8. NO UNAPPROVED LOANS. Borrower has not received financing for either the acquisition of the Property, the construction of the Project or the permanent financing of the Project except as has been specifically disclosed to and approved by Lender in writing.

4.9. TITLE OF PERSONALTY. All Personalty is vested solely in Borrower, free of all claims, liens, and encumbrances, and the security interest of Lender in the Personalty is a first lien.

4.10. USE OF PROCEEDS. All Loan Proceeds will be disbursed as provided in this Loan Agreement and used only for payment of the costs of construction of the Project in accordance with the Plans and Specifications and for other purposes specified in the Loan.

4.11. TAXES PAID. Borrower has filed all required Federal, State, County, and City tax returns and has paid all taxes due and owing. Borrower knows of no basis for additional assessments with respect to any taxes, other than the lien of taxes not yet due.

4.12. PLANS AND SPECIFICATIONS. The Plans and Specifications are satisfactory to Borrower and the General Contractor and have been approved by Lender and all other construction lenders. There are no structural defects in the Project as shown in the Plans and Specifications that are known to o r reasonably should have been known to Borrower or its agents and employees, and to the best of Borrower's knowledge, no violation of any Governmental Requirement, including but not limited to an environmental requirement, exists.

4.13. ACCURACY. All applications, Financial Statements, reports, documents, instruments, information, and forms of evidence delivered to Lender concerning the Loan or required by this Loan Agreement or any of the other Loan Documents are accurate, correct, and sufficiently complete to give Lender true and accurate knowledge of their subject matter, and do not contain any untrue statement of a material fact or omit any material fact necessary to make them not misleading.

5. BORROWER’S COVENANTS AND CONDITIONS. From the Effective Date until payment and performance in full of all obligations of Borrower under this Loan Agreement, the Note, the Security Documents, and the other Loan Documents or the earlier release of the liens of the Loan Documents (and all related obligations) in accord ance with the terms of this Loan Agreement, the Note, the Security Documents, and the other Loan Documents, Borrower hereby covenants and agrees with Lender that:

RVP Group - HAF Loan Agreement Page 7

5.1. USE OF PROCEEDS. All Loan Proceeds will be disbursed as provided in this Loan Agreement and used only for payment of the costs of construction of the Project in accordance with the Plans and Specifications and for other purposes specified in the Loan.

5.2. PROPERTY MANAGEMENT. Subject to Lender’s written approval, Borrower shall obtain and maintain for the life of the Loan a top quality property management agreement with a duly accredited real estate property management company for the management of the Property, and shall assure compliance of the property manager with the property management agreement. Lender shall not disburse any funds under this Loan Agreement unless and until it has reviewed and approved the agreement as adequate and the property management company as top quality and duly accredited. Lender shall have the right to review and a pprove or reject any proposed changes to scope of said agreement and to changes in the real estate property management company prior to making such changes. Any such changes made without Lender approval shall be an Event of Default under this Loan Agreeme nt. Lender has approved SHRA as the qualified property management company for the Project.

5.3. B
ORROWER'S RESPONSIBILITIES. To prevent and avoid construction defects, Borrower shall inspect, review, supervise, and assure the high quality, adequacy, and sui tability of: (i) the Plans and Specifications and all changes and amendments; and (ii) architects, contractors, subcontractors, and material suppliers employed or used in the Project, and the workmanship of and the materials used by all of them; and (iii) the progress and course of construction and its conformance with the Plans and Specifications and any amendments, alterations, and changes that may be approved by Lender. Borrower will, at Borrower's expense, defend, indemnify, save, and hold Lender harml ess against all claims, demands, losses, expenses, damages (general, punitive, or otherwise), and causes of action (whether legal or equitable) asserted by any Person arising out of the use of the proceeds of the Loan. Borrower will pay Lender on demand a ll claims, judgments, damages, losses, or expenses (including attorney fees and expenses) incurred by Lender as a result of any legal action arising out of the use of the proceeds of the Loan. The provisions of this Section will survive the termination of this Loan Agreement and the repayment of the Loan.

6. INSURANCE.

6.1. PROPERTY INSURANCE. Borrower shall procure and maintain property insurance in a form and substance approved by Lender. Coverage shall be for protection against loss of, or damage to the Pr operty and its improvements to their full insurable value. Borrower shall also procure and maintain insurance against specific hazards affecting Lender's security for the Loan as may be required by Lender, governmental regulations, or any permanent lender . All such policies shall contain a standard mortgagee loss payable clause in favor of Lender. The insurance required shall be written with a deductible of not more than Twenty-Five Thousand Dollars ($25,000.00).

6.2. COMMERCIAL GENERAL LIABILITY AND OTHER INSURANCE. Borrower shall carry insurance as set forth below, effective prior to the disbursement of the Loan, and such insurance shall be maintained in full force and effect at al l times. Such insurance coverage must list Lender as an additional insured, and must be approved in writing by Lender prior to the disbursement of the Loan.

6.2.1. Commercial general liability insurance, in Insurance Services Office (ISO) policy form CG 00 01 or equivalent, with limits of liability not less than: $1,000,000 per occurrence, and $2,000,000 general aggregate, all per location of the project, such coverage to include contractual liability to include bodily injury, property damage and persona l injury;

6.2.2. Personal injury insurance with the employment exclusion deleted, unless Lender gives prior written approval for the employment exclusion to remain in the policy;

6.2.3. Workers’ compensation and all other insurance required under applicable law, in the amount required by applicable law or by Lender, whichever amount is greater.

6.3 INSURANCE PROVISIONS. Each policy of insurance required under this Loan Agreement shall be obtained from a provider licensed to do business in California and having a current Best's Insurance Guide rating of A VII or better, which rating has been substantially the same or increasing for the last five (5) years, or such other equivalent rating, as may reasonably be approved by Lender's legal counsel. Each policy shall contain the following provisions as applicable, unless otherwise approved by Lender's legal counsel in writing in advance:

RVP Group - HAF Loan Agreement Page 8

6.3.1 ADDITIONAL INSURED. Borrower shall obtain a policy in ISO form CG 20 33, or equivalent, naming Lender
as additional insured under the Commercial General Liability Policy at the same limits as required above.

6.3.2 SINGLE PROPERTY INSURANCE. It is the intent of the parties that the Project have available all the specified insurance coverages. Borrower shall not provide insurance coverages that are considered in aggregate with other properties which Borrower owns or operates.

6.3.3 CERTIFIED POLICY COPY. Borrower shall provide Lender with a certified copy of each required policy of insurance, upon request by Lender. Borrower shall provide Lender with a Certificate of Insurance of Insurance for each policy on t he applicable ACORD form. And, specific sections of the policy may be requested by Lender for review. The ACORD form shall not substitute for the policy, if the policy is requested. The most current ACORD 25- S “Certificate of Liability Insurance shall be used for liability insurance.

It is Borrower’s responsibility to notify Lender of any notice of cancellation, non- renewal or non- payment of premium in accordance with your policy provisions. In the event insurance is cancelled or not renewed, Borrower shall notify Lender within forty-eight (48) hours of such cancellation or non-renewal.

_____Borrower’s Initials

6.3.5 FAILURE TO MAINTAIN. If Borrower fails to obtain or maintain, or cause to be obtained and maintained, any insurance required by this Loan Agreement, Lender shall have the right to purchase the insurance on Borrower’s behalf, and Borrower shall promptly reimburse the full cost of such insurance to Lender. If Borrower fails to reimburse Lender for insurance, the amount of unpaid reimbursement shall bear interest, at the maximum rate permissible under the law, until paid.

7. NONLIABILITY FOR NEGLIGENCE, LOSS, OR DAMAGE. Borrower acknowledges, understands, and agrees as follows:

7.1. The relationship between Borrower and Lender is, and will at all times remain, solely that of borrower and lender, and Lender neither undertakes nor assumes any responsibility for or duty to Borrower to select, review, inspect, supervise, pass judgment on, or inform Borrower of the quality, adequacy, or suitability of the Project work, except as to matters which are within the intent and purpose for which Lender has made the Loan.

7.2. Lender owes no duty of care to protect Borrower against negligent, faulty, inadequate, or defective building or construction.

7.3. Lender will not be responsible or liable to Borrower for any loss or damage of any kind to person or property whether suffered by Borrower or any other Person or group of Persons or for negligent, faulty, inadequate, or defective building or construction, and Borrower will hold Lender harmless from any l iability, loss, or damage for these things.

7.4. B
ORROWER RESERVES. Borrower shall maintain reserves for replacement and repairs required to be made to the Property, fixtures on the Property or personal property used on the Property, or otherwise as approved by Lender, in an amount, at all times, of not less than Five Hundred and No/100 Dollars ($5 00.00) per unit per year.

7.5. FINANCIAL REPORTING. During the term of the Loan, Borrower shall deliver to Lender within 120 days of the end of each calendar year aud ited Financial Statements prepared in accordance with generally accepted accounting principles and signed by authorized officers of Borrower. Prior to the Close of Escrow and during the term of the Loan, Borrower shall deliver to Lender any such additiona l Financial Statement as may be requested by Lender. Lender reserves the right to review and approve Financial Statements and other credit information and references prior to the Close of Escrow.

During the term of the Loan, Borrower must deliver to Lender a monthly rent -roll including household composition information and operating statements with respect to the Property and improvements, as Lender may request.

7.6. A
NNUAL ADMINISTRATIVE FEE. Borrower agrees to pay an annual administrative fee (“Fee”) to Lender as compensation for monitoring compliance with regulatory restrictions and the administration of the Loan. Borrower shall RVP Group - HAF Loan Agreement Page 9
pay annually a Fee equal to 12.5 basis points (0.125%) of the Loan Amount and One Hundred and No/100 Dollars ($100.00) for each unit assisted by the Loan Program, not to exceed Twenty-Five Thousand Dollars and No Cents ($25,000.00) for the project. Fee payments shall commence on the Closing Date for the prorated semiannual period from the Closing Date to and including ________, 2023, and in equal semiannual installments in advance on each ___ 1 and ____ 1 of each year thereafter throughout the term of the Regulatory Agreement.

7.7. BOND PROCEEDS. Borrower shall secure financing in the amount of _____________No/100 Dollars ($_____________.00) in bond proceeds from the Housing Authority of the City of Sacramento.

8. LOAN. Lender agrees to lend to Borrower, and Borrower agrees to borrow from Lender, an amount not to exc eed the Loan Amount, to finance the development of the Project and for other purposes as specified in the Scope of Development, subject to the terms, conditions, representations, warranties, and covenants in this Loan Agreement.

8.1. P
RINCIPAL AMOUNT. The principal amount of the Loan shall be the actual disbursements of Lender on account of the Project, not to exceed the amounts stated in the Budget (as the Budget may be adjusted by written approval of Lender). In any event, the principal amount of the Loan shall not exceed the Loan Amount.

8.2. U
SE OF LOAN PROCEEDS. Loan Proceeds shall be used solely for actual costs of the Project as stated in the Budget. No Loan Proceeds shall be used for any costs, except as provided in the Budget. Unless otherwise noted in the Budget, allowed predevelopment costs, if any, are not subject to the withholding as Retention.

8.3. LOAN TERMS. The Loan is made pursuant to the Loan Program and is subject to the laws, rules and regulations of the Loan Program. Lender agrees to disburse the Loan Proceeds in the manner and subject to the limitations stated in this Loan Agreement. Interest, at the Interest Rate, shall accrue on each disbursement of Loan Proceeds commencing on the date on which each such disbursement is made. Repa yment of the loan shall be made, in payments of principal and interest, in lawful tender of the United States, in accordance with the Payment Schedule.

8.4. CLOSING IN ADVANCE OF SENIOR LOAN. Lender will subordinate this Loan to the senior loan, provided that the senior loan does not require modification of this Loan Agreement or Lender’s entry into any agreements containing new or modified Loan terms.

8.5. NOTE AND SECURITY DOCUMENTS. The Loan is evidenced by the Note executed by Borrower in favor of Lender and delivered to Lender upon Close of Escrow. Repayment of the Note is secured by the Trust Deed covering the Property and the Project. Borrower shall execute the Trust Deed in favor of the Title Company as Trustor in trust for the benefit of Lender and del iver it to Escrow for recordation. The Loan is also secured by the Additional Collateral, if any, as evidenced by the applicable Security Documents.

8.6. SECURITY AGREEMENT. This Loan Agreement is a "security agreement" within the meaning of the Uniform Commercial Code. Borrower by executing and delivering this Loan Agreement has granted and hereby grants to Lender, as security for the Loan, a security interest in the Additional Collateral to the full extent that the Additional Collateral may be subject to the Uniform Commercial Code. Borrower irrevocably appoints Lender as its true and lawful limited attorney-in-fact solely to execute and deliver any and all financing statements pursuant to the appropriate statutes, and any other documents or instruments a s are required to convey to Lender a valid perfected security interest in the Additional Collateral. Borrower agrees to perform all acts which Lender may reasonably request so as to enable Lender to maintain such valid perfected security interest in the A dditional Collateral in order to secure the payment of the Note in accordance with their terms. Lender is authorized to file a copy of any such financing statement in any jurisdiction(s) as it shall deem appropriate from time to time in order to protect the security interest established pursuant to this Loan Agreement. Lender may require at any time, and from time to time additions of new contracts and other property to the Additional Collateral.

Borrower irrevocably assigns to Lender, effective upon Lender’s written demand, as security for the due performance of this Loan Agreement all of its right, title, and interest in the Assigned Documents.

8.7. R
EGULATORY AGREEMENT. The Regulatory Agreement imposing covenants, conditions and restrictions running with the land is a material consideration for the making of the Loan. Borrower shall execute the Regulatory Agreement prior to Close of Escrow and deliver it to Escrow for recordation. Violation of the Regulatory Agreement is an Event of Default of this Loan.

8.8. E
SCROW. The parties shall open the Escrow promptly after the Effective Date. Escrow shall close as provided in the Escrow Instructions on or before the Closing Date.

RVP Group - HAF Loan Agreement Page 10

8.9. COMMISSIONS. Lender is not responsible, by this Loan Agreement or otherwise, to pay c ommissions in relation to this transaction.

8.10. ACCELERATION ON TRANSFER OR REFINANCING OF THE PROPERTY; ASSUMPTION. Except as otherwise provided in the Loan Agreement, if all or any part of the Property or an interest in the Property is sold, transferred or conveyed to any person, or refinanced by Borrower such that additional debt is added to the Property or the cash flows change without Lender's prior written consent, Lender may, at Lender's option, declare all the sums secured by the Trust Deed to be immediately due and payable. Lender shall have waived such option to accelerate if, prior to the sale or transfer, Lender and the Person to whom the Property is to be sold or transferred reach agreement in writing that the Loan may be assumed. If Lender has waived the option to accelerate provided in this Section and if Borrower's successor in interest has executed a written assumption agreement accepted in writing by Lender, Lender shall release Borrower from all obligations under the Trust Deed and the Note.

9. TITLE INSURANCE. Borrower must procure and deliver to Lender an ALTA Lender's Policy of Title Insurance, together with such endorsements as Lender may require, including but not limited to ALTA endorsement nos. 9.6 and 9.7 (CLTA endorsement nos. 100 and 116) and ALTA endorsement no. 25 (CLTA endorsement no. 116) insuring Lender in an amount equal to the principal amount of the Loan, that Lender 's Trust Deed constitutes a third lien or charge upon the Property and improvements subject only to such items as shall have been approved by Lender. There must be no exceptions permitted for mechanics liens. Title insurance for the Loan must be issued by a title insurer approved by Lender.

10. P
ERFORMANCE CONDITIONS. The following are conditions precedent to performance under this Loan Agreement:

At Close of Escrow, Lender’s Trust Deed shall be a valid lien against the Property securing the Loan and subject to no exceptions to title (of record or off record) other than the exceptions listed in the “Conditions of Title” in the Escrow Instructions.

10.2. CONDITIONS TO LENDER'S PERFORMANCE. Lender's obligation to perform under this Loan Agreement is subject to all of the following conditions: (a) Borrower has performed all of its obligations then to be performed pursuant t o this Loan Agreement; (b) Borrower has met the Additional Conditions to Close of Escrow and applicable Special Provisions, if any; (c) the closing conditions as defined in the Escrow Instructions have been fulfilled as of Close of Escrow; (d) Borrower’s representations and warranties in this Loan Agreement are true and correct as of the date of this Loan Agreement and as of Close of Escrow; (e) this Loan Agreement continues to be in full force and effect, no default on the part of Borrower has occurred under this Loan Agreeme nt, and no event has occurred that, with the giving of notice or the passage of time, will constitute a default by Borrower under this Loan Agreement; and (f) Lender has approved the Approval Documents.

10.3. CONDITIONS TO BORROWER'S PERFORMANCE. Borrower's obligation to perform under this Loan Agreement is subject to satisfaction of all of the following conditions: (a) the closing conditions as defined in the Escrow Instructions have been fulfilled as of Close of Escrow; (b) Lender has met the Additional Conditions to Close of Escrow and applicable Special Provisions, if any; (c) Lender’s representations and warranties in this Loan Agreement are true and correct as of the date of this Loan Agreement and as of the Close of Escrow; and (d) this Loan Agreement continues to be in full force and effect, and no default on the part of Lender has occurred under this Loan Agreement.

11. R
ELOCATION. Lender is required by law to provide relocation services and make relocation payments to eligible tenants that are displaced as a result of the Project. Borrower shall comply fully with all relocation laws that are the obligation of Lender or are otherwise applicable to the Project. Borrower’s compliance with the relocation requirements as stated in this Section 9 or the relocation plan for this project, if any, is a material element of this Loan. Borrower’s failure to comply with the relocation requirements as stated in this Section 9 or a relocation plan prepared for this Project, is an Event of Default, subject to Borrower’s opportunity to cure in accordance with applicable law.

11.1. RELOCATION COSTS. Unless otherwise stated in this Loan Agreement, any amounts paid by Lender for relocation costs and services shall be considered advances under the Loan.

11.2. COOPERATION AND ACCESS. Borrower shall cooperate fully with Lender in complying with such relocation laws, including without limitation, providing Lender access to all tenants of the Property, to all books and recor ds related to the tenants of the Property and to all properties offered for temporary or permanent relocation. Prior to taking any RVP Group - HAF Loan Agreement Page 11
action with respect to relocation of tenants, Borrower shall meet with Lender to establish reasonable protections for tenants and related reporting requirements for Borrower.

11.3. BORROWER AS RELOCATION AGENT. With the approval of Lender, Borrower may act as Lender’s agent in accomplishing such relocation. Lender and Borrower by memorandum in writing shall establish their respective duties related to such relocation. If Lender and Borrower agree that Borrower will act as Lender’s agent for purposes of this Loan, Borrower may enter into agreements for the provision of relocation services, or Borrower may perform such services directly.

Borrower shall, by provisions in its agreements or by direction to its staff, assure that the entity performing the relocation services: (a) shall comply with all applicable law; (b) shall fully inform Lender of all relocation activities; (c) shall mak e all requests for direction or clarification to Lender; and (d) shall respond to and follow Lender’s instruction and direction.

12. CONSTRUCTION. As a condition of the Loan, Borrower will diligently proceed with construction in accordance with the Scope of Development as approved by Lender. Borrower shall complete such work on or before the Completion Date, subject to Unavoidable Delay.

12.1. C
HANGES. In order to assure sufficient funding for the Project, Borrower shall not authorize any Change without the prior written consent of Lender. If in the judgment of Lender, a Change, together with all other Changes contemplated or previously approved by Lender, will cause an increase in the cost of the Project in excess of the contingency reserve identified in the Budget, then Borrower will, as a condition precedent to Lender's consent, provide Lender with proof that the contingency reserve has been increased as necessary to pay for all such Changes. Borrower will submit any such Change to Lender for approval on a form acceptable to Lender, together with approval s by the Project Architect, if any, and the General Contractor. Borrower shall maintain funds available in the contingency reserve that are in substantially the same percentage of the original contingency reserve as the percentage of the Project then rema ining to be completed.

12.2. C
ONTRACTORS AND CONTRACTS. All contracts, subcontracts, contractors, and subcontractors shall be subject to Lender's approval prior to the Closing Date. Lender also reserves the right to require performance and material payment bonds on any or all contractors, or in lieu of bond a letter of credit acceptable in form and substance to Lender, as it determines to its sole satisfaction. Upon Lender’s request, Borrower will furnish to Lender correct lists of all contractors , subcontractors and material suppliers employed in connection with the Project, specifying their addresses, their respective portion of the Project and their respective Project cost. Lender may contact directly each contractor, subcontractor, and material supplier to verify the facts disclosed by the list or for any other purpose related to the Loan. All contracts by Borrower or its contractors relating to the Project will require terms sufficient to permit disclosure to Lender of any information Lender deems, in its sole determination, necessary to make such verifications.

12.3. NO DISCRIMINATION DURING CONSTRUCTION. Borrower for itself, the general contractor and their respective successors and assigns, agrees that the following provisions shall apply to, and be cont ained in all contracts and sub-contracts for the construction of the Project:

12.3.1. EMPLOYMENT. Borrower shall not discriminate against any employee or applicant for employment because of sex, race, color, religion, ancestry, national origin, disability, medic al condition, marital status, or sexual orientation. Borrower will take affirmative action to ensure that applicants are employed, and that employees are treated during employment, without regard to their sex, race, color, religion, ancestry, national ori gin, disability, medical condition, marital status, or sexual orientation. Such action shall include, but not limited to, the following: employment, upgrading, demotion or transfer; recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selection for training, including apprenticeship. Borrower agrees to post in conspicuous places, available to employees and applicants for employment, notices to be provided by Lender setting forth the provisions of t his nondiscrimination clause.

12.3.2. E
CONOMIC OPPORTUNITY EMPLOYMENT REQUIREMENTS. This Loan requires that to the greatest extent feasible, opportunities for training and employment be given to lower income residents in and around the area of the project. Borrow er will instruct its General Contractor and its subcontractors to utilize lower income project area residents as employees to the greatest extent feasible by:

(a) Identifying the number of positions in the various occupational categories including skilled, semi-skilled, and unskilled labor, needed to perform each phase of the Project;

(b) Identifying, within the positions identified in Paragraph (1) of this subsection, the number of positions in the various occupational categories which are currently occupied by regular, permanent employees; RVP Group - HAF Loan Agreement Page 12

(c) Identifying, within the positions described in Paragraph (1) of this subsection, the number of positions in the various occupational categories which are not currently occupied by regular, permanent employees;

(d) Establishing the positions identified in Paragraph (3) of this subsection, a goal which is consistent with the purpose of this subsection within each occupational category of the number of positions to be filled by lower income Project area residents; and

(e) Making a good faith effort to fill all of the positions established in Paragraph (4) of thi s subsection with lower income Project area residents through Greater Sacramento Urban League, Sacramento Works, Sacramento Employment Training Agency, or similar local workforce agencies.

12.3.3. ADVERTISING. Borrower will, in all solicitations or advertisements for employees placed by or on behalf of Borrower, state that all qualified applicants will receive consideration for employment without regard to race, color, religion, creed, sex, marital status, national origin, ancestry, familial status, or disability.

12.3.4. MONITORING PROVISIONS. Borrower, the General Contractor and subcontractors shall comply with the requirements of Lender for monitoring the anti-discrimination and all applicable labor requirements.

12.4. INSPECTION. Lender may, at any time and without notice to Borrower, enter on the Property and inspect the Project; and, during regular business hours, examine the books, records, accounting data, plans, shop drawings, specifications, and other documents of Borrower pertaining to the Project and to make extracts or copies. Borrower shall make all such documents available to Lender promptly on demand. Borrower agrees to cooperate fully (and to cause the General Contractor to cooperate fully) with Lender and its Lender's designated agent and to permit all appropriate access to the Property and to all relevant books and records. Borrower shall bear the cost of reasonable inspections, except that Lender shall bear its costs of inspection. If however, Lender’s inspection discovers issues of a nature that require further third -party review or investigation, Borrower shall bear the costs of such third party review.

12.5. P
ROTECTION AGAINST LIEN CLAIMS. Borrower shall promptly and fully discharge all claims for labor, materials and services in connection with the Project. Borrower shall promptly file a valid Notice of Completion on completion of the Project. Borrower shall promptly file a Notice of Cessation in the event of a cessation of labor on the Project for a co ntinuous Period of (30) days or more. Borrower shall take all other reasonable steps to protect against the assertion of lien claims against the Property. Within ten (10) days after the filing of any claim of lien against the Property, Borrower shall record a surety bond in the office of the Recorder of the County where the Property is located in an amount sufficient to release the claim of lien or deliver to Lender any other assurance as may be acceptable to Lender as evidenced by Lender's written acceptance of such assurance.

12.5.1. Lender, at any time, may require Borrower to obtain a lien waiver with respect to each payment to the General Contractor and each payment by the General Contractor or Borrower to each of the various subcontractors and material suppliers. Lender, at any time, may require Borrower to make any payments for the Project by joint check made payable to the General Contractor and subcontractor for whose account the payment is to be made, as joint payees.

12.5.2. In any event, Borrower is not required to pay, prior to adjudication, any claims for labor, materials, or services that Borrower, in good faith, reasonably disputes, and that Borrower, at its own expense, is currently and diligently contesting in the proper forum, provided that Borrower ha s filed the surety bond or given Lender such other assurance as Lender accepts in writing.

12.6. Other Lender Draw. Borrower shall concurrently submit to Lender any Other Lender Draw. Delivery of such Other Lender Draw shall be made in the same manner as any other notice, except that it shall also be marked “OTHER LENDER DRAW REQUEST” and delivered to the person named in writing by Lender as the recipient of such requests or, in the absence thereof, to Lender’s Portfolio Management office. Borrower shall provide Lender with true, accurate and correct copies of each Other Lender Draw, if any, including without limitation all supporting information, documents, and other required submittals. Lender shall have the right to provide objections to an Other Lende r Draw, for failing to comply with the Loan, for changing the Project in any material way, or for impairing the ability of Lender to enjoy the practical realization of its rights under the Loan and its related instruments. If Lender objects to any Other L ender Draw, Borrower shall cause the Other Lender to confer with Lender in good faith regarding such objections to the Other Lender Draw. After meeting and conferring with the Other Lender in good faith, if in Lender’s sole discretion, Lender’s objections remain unresolved, Lender shall provide notice to Borrower of Lender’s rejection of the Other Lender Draw (the “Other Lender RVP Group - HAF Loan Agreement Page 13
Draw Rejection”), but despite such rejection the Other Lender may fund such draw (so long as such rejected draw is not a Retention Draw); provided, however, until Lender has provided written notice to Borrower that Lender has withdrawn the Other Lender Draw Rejection, Borrower shall not accept any Retention Draw from such Other Lender, and Lender shall not be obligated to make any disbursements under the Loan.

12.6.1. ACKNOWLEDGMENT OF RELIANCE. Borrower acknowledges that Lender is making Loan disbursements in advance of disbursements of other lenders in reliance upon Borrowers compliance with this provision.

12.6.2. LIQUIDATED DAMAGES. IF BORROWER FAILS TO PROVIDE TO LENDER ANY OTHER LENDER

DRAW, AS AND WHEN REQUIRED UNDER THIS LOAN AGREEMENT, LENDER SHALL BE IRREPARABLY HARMED IN THAT BORROWER’S ABILITY TO REPAY THE LOAN AND LENDER’S SECURITY FOR THE LOAN SHALL BE IMPAIRED TO AN UNKNOWN EXTENT. BORROWER AND LENDER AGREE THAT IT WOULD BE IMPRACTICAL OR EXTREMELY DIFFICULT TO FIX ACTUAL RESULTING DAMAGES IN SUCH EVENT . BORROWER AND LENDER, THEREFORE, AGREE THAT AN AMOUNT EQUAL TO TWO PERCENT (2%) OF THE LOAN AMOUNT SHALL CONSTITUTE LIQUIDATED DAMAGES PAYABLE TO LENDER ON ACCOUNT OF SUCH

EVENT, RECEIPT OF WHICH SHALL CONSTITUTE THE EXCLUSIVE REMEDY OF LENDER FOR SUCH EVENT , AND ONLY FOR SUCH EVENT. PAYMENT OF SAID AMOUNT TO LENDER AS LIQUIDATED DAMAGES IS NOT INTENDED AS A FORFEITURE OR PENALTY WITHIN THE MEANING OF CALIFORNIA CIVIL CODE SECTIONS 3275 OR 3369, BUT INSTEAD , IS INTENDED TO CONSTITUTE LIQUIDATED DAMAGES TO LENDER PURSUANT TO SECTIONS 1671, 1676 AND 1677 OF THE CALIFORNIA CIVIL CODE . SAID

AMOUNT SHALL BE IMMEDIATELY DUE AND PAYABLE AS OF THE DATE ON WHICH BORROWER DELIVERED SUCH OTHER LENDER DRAW TO THE OTHER LENDER. LENDER SHALL HAVE THIRTY (30) DAYS AFTER RECEIVING ACTUAL NOTICE OF SUCH EVENT TO NOTIFY BORROWER IN WRITING THAT LIQUIDATED DAMAGES UNDER THIS SECTION ARE DUE. BORROWER SHALL HAVE FIFTEEN (15) DAYS AFTER SUCH WRITTEN NOTIFICATION TO CURE THE DEFAULT BY WITHDRAWING THE OTHER LENDER DRAW AND RETURNING ANY DISBURSEMENT ON ACCOUNT OF SUCH OTHER LENDER DRAW. IF BORROWER FAILS TO PAY LIQUIDATED DAMAGES WHEN DUE UNDER THIS SECTION, THE LOAN SHALL BE ALL DUE AND PAYABLE AT THE ELECTION OF LENDER.

_____Lender’s Initials

_____Borrower’s Initials

12.7. P
ROJECT SIGN. If Borrower places a sign on the Property during construction stating the names of the Project participants, it shall also name Lender as a participant in the Project. Lender’s name on the sign shall be in letters not less than size of letters used to name any of the other participants.

12.8. NO PRIOR LIENS. Borrower shall not allow the Project construction to begin or mate rials to be delivered to the Project until after Close of Escrow.

PREVAILING WAGES. In accordance with Labor Code Section 1720(c)(6)(E)), so long as the public subsidy for the Project consists of below market rate loans, and the Project restricts occupan cy on at least 40% of the units for at least 20 years to individuals or families earning no more than 80% of the area median income, the Project is not subject to prevailing wages.

Borrower represents to Lender that Borrower has obtained no public subsidy for the Project that does not meet such criteria.

If Borrower obtains other non -qualifying public subsidy, Borrower shall pay prevailing wages for the Project. Therefore, Borrower indemnifies, holds harmless and defends Lender from all additional wages, benefits, fees, penalties, fines, legal fees, court costs, arbitration costs, and other costs arising from the improper application of California prevailing wage law s to the Project by Borrower or General Contractor or both of them. If more than eleven (1 1) units are assisted with HOME funds as the Funding Source (as indicated in the Regulatory Agreement), Borrower shall comply with Davis-Bacon prevailing wage requirements as described in the Funding Requirements.

13. LOAN DISBURSEMENT PROCEDURES.

13.1. CONDITIONS PRECEDENT TO EACH LOAN DISBURSEMENT. The obligation of Lender to make any disbursements of Loan Proceeds shall be subject to the following conditions precedent:

13.1.1. No Event of Default or Potential Default of Borrower has occurred and is continuing;

13.1.2. If requested by Lender, Borrower has furnished to Lender, as a Project cost, an endorsement to the Title Policy showing no intervening liens or encumbrances on the Property and insuring the full disbursement, together RVP Group - HAF Loan Agreement Page 14
with a satisfactory report under t he California Uniform Commercial Code showing no liens or interests other than those of Lender;

13.1.3. Borrower has obtained and maintained, and Lender has approved a loan approval from a financial institution or other lender approved by Lender in its sole discretion, to make the permanent financing obtained by Borrower, or has obtained commitments to issue bonds, which repays after completion of the Project all construction and other loans secured by the Project and which is secured by a senior lien against th e Property. Such permanent financing approval must provide: (a) that it is subject only to those conditions that are usual and customary in the industry and that can be satisfied by the proposed closing date of the permanent financing; (b) that it is in full force with no default by any party; (c) any such loan approval or commitments for financing shall not require modification of the Loan Documents, or any term of this commitment letter, (d) any such loan approval or commitments shall not be based upon sources and uses of Project funds that are different from those approved by Lender for the Project, and (e) that Lender will have notice of, and a reasonable opportunity to cure, any Borrower defaults;

13.1.4. Lender is satisfied that all completed work has been done using sound, new materials and fixtures, in a good and proper manner, and all materials, fixtures, and furnishings installed on or acquired for the Property will be owned by Borrower free of any liens, encumbrance, or other interests of any kind other than Lender's lien or security interest;

13.1.5. The representations and warranties in the Loan Documents are correct as of the date of the requested disbursement;

13.1.6. Borrower has paid Lender all commitment, loan, and other fees then due, and Borrower has submitted to, and Lender has approved in writing, all documents, records, statements, certificates, reports, and other materials and information then required to be submitted to Lender for approval under this Loan Agreement;

13.1.7. Borrower shall provide assurances , satisfactory to Lender in its sole discretion, that hazardous materials are not present on the Property or that any hazardous materials on the Property will be remediated and that no further remediation is then required by the environmental agency having responsibility for monitoring such remediation; and

13.1.8. Borrower has delivered to Lender all funds, documents, instruments, policies, evidence of satisfaction of conditions, and other materials then due or otherwise requested by Lender under the Loan Documents.

13.2. C
ONDITIONS PRECEDENT TO FIRST DISBURSEMENT. Borrower’s request for the first disbursement of Loan Proceeds (the “First Disbursement”) is a representation and warranty by Borrower that there has been no material adverse change in Borrower’s financial capacity or in any representation made to Lender in Borrower’s application for the Loan or Borrower’s supporting documentation. Lender shall make the First Disbursement when the following conditions precedent and the conditions precedent stated in Section 13.1 have been met:

13.2.1. There is no legal action threatened or pending against Borrower or affecting the Property or any Additional Collateral;

13.2.2. All conditions to Close of Escrow have been satisfied in accordance with the Loan Agreement;

13.2.3. Borrower has obtained and Lender has approved a loan approval from a financial institution or other lender approved by Lender in its sole discretion, to make the permanent financing obtained by Borrower, or has obtained commitments to issue bonds, which repays after completion of the Project all construction and other loans secured by the Project and which is secured by a senior lien against the Property. Such permanent financing approval must provide: (a) that it is subject only to those conditions that are usual and customary in the industry and that can be satisfied by the proposed closing date of the permanent financing; (b) that it is in full force with no defa ult by any party; and (c) that Lender will have notice of, and a reasonable opportunity to cure, any Borrower defaults;

13.2.4. Borrower has provided proof of all insurance required by the Loan Documents;

13.2.5. The construction lender’s commitment to make a constructi on loan is in full force, has not been modified and no event has occurred that with notice or the passage of time or both could result in the termination of it.

Nothing in the permanent loan commitment, or submissions and approvals made under it, conflicts with this Loan Agreement.

Borrower has done all things necessary to keep unimpaired its rights under the loan commitment for the construction lender's construction loan;
RVP Group - HAF Loan Agreement Page 15

13.2.6. Borrower has filed all tax returns required to be filed and paid all taxes due, whi ch, if unfiled or unpaid, might adversely affect Lender’s security under the Security Documents; and

13.2.7. Borrower must request the First Disbursement consistent with the terms and conditions of this Loan Agreement no later than 11 months following the Effective Date of this Loan Agreement.

13.3. CONDITIONS PRECEDENT TO FINAL DISBURSEMENT. Lender shall make the final loan disbursement under this Loan Agreement when the following conditions precedent and the conditions precedent stated in Section 13.1 have been met:

13.3.1. As applicable, the Project architect and Lender's designated agent will have certified to Lender, on AIA Form G704 and in a manner satisfactory to Lender:

(a) That the Project has been duly completed in a good and proper manner using sound, new materials;

(b) That the Project complies with the Plans and Specifications, the requirements of all Governmental Authorities and any other party having enforceable rights regarding the construction of the Project; and

13.3.2. Borrower has provided to Lender a true, accurate and complete copy of the final draw request to all other lenders for the Project;

13.3.3. Borrower has filed all tax returns required to be filed and paid all taxes due, which, if unfiled or unpaid, might adversely affect Lender’s security under the Security Documents;

13.3.4. Title policy endorsements in form and amount satisfactory to Lender (including an endorsement insuring lien-free completion of the Project) have been furnished to Lender;

13.3.5. Borrower has furnished evidence, in form and substance satisfactory to Lender, that:

(a) The General Contractor and subcontractors and material suppliers and their subcontractors and material suppliers have been paid in full;

(b) Borrower has obtained final certificates of occupancy or permit sign -offs for all of the Project;

(c) All other permits and approvals necessary for the construction, equipping, management, operation, use, or ownership of the Project have been obtained, subject only to those conditions approved by Lender, and

(d) The completed Project complies with all applicable zoning regulations, subdivision map acts, building code provisions, and similar governmental la ws and regulations, and has all utilities and adequate ingress and egress from public streets, that evidence to be in the form of a certificate executed by Borrower in favor of Lender.

13.3.6. That Borrower has provided to Lender an inventory showing make, model, value, cost, and location of all furniture, fixtures, and equipment and other personal property of a value in excess of $1,000 and used in the management, maintenance, and operation of the Project, that are included in the collateral for the Loan;

13.3.7. Borrower has filed a notice of completion of the Project necessary to establish the commencement of the shortest statutory period for filing of mechanics' and materialmen's liens;

13.3.8. Lender has received written approval from the surety on any bond required by Lender;

13.3.9. Borrower has submitted to Lender a final cost certification prepared by a CPA; and

RVP Group - HAF Loan Agreement Page 16

13.3.10. Borrower must request Final Disbursement consistent with terms and conditions of this Loan Agreement no later than 3 years and 11 months following the Effective Date of this Loan Agreement. If Borrower failures to request Final Disbursement consistent with the terms and conditions of this Loan Agreement within 3 years and 11 months of the Effective Date the remaining funds will be recaptured.

13.4. MAKING DISBURSEMENT. Lender shall pay each disbursement request within twenty (20) business days after the disbursement request is submitted to Lender, subject to fulfillment of the conditions precedent as stated in Sectio n

13.1. Lender shall disburse the actual cost of the work represented in the disbursement request by Borrower, reduced by the cost of work included in the request and not satisfactorily completed and by the amount of the Retention to be withheld.

13.5. DISBURSEMENT OF LESS THAN FULL REQUEST. If Lender makes a disbursement which is less than the full amount of the disbursement requested, Lender shall inform Borrower of the items disallowed for disbursement and the reason for disallowing them. Lender shall disburse the Loan in the following order of priority, except as expressly provided and unless paid by Borrower from other funds: (a) first, to pay Lender's Loan fees and expenses due; (b) second, to pay Lender the interest due on the Loan; (c) third, at Lender's option to pay all impositions due; (d) fourth, at Lender's option, to make any other payments that Lender may in its sole discretion deem necessary or advisable to protect Lender's security under the Loan Documents; and (e) fifth, to make the disbursement of funds then due in response to Borrower’s current request for disbursement. For purposes of this section, impositions means all real estate and personal property taxes and other taxes and assessments, water and sewer rates and charges, and all other charges of a Governmental Authority and any interest or costs or penalties with respect to them, ground rent and charges for any easement or agreement maintained for the benefit of the Pro perty, of every nature and any kind that at any time may be assessed, levied, imposed, or become a lien on the Property, Fixtures or income received from the Property or Fixtures, or any use or occupancy of the Property; and any charges, expenses, payments, or assessments of any nature that are or may become a lien on the Property or the income received from it.

13.6. N
O WAIVER BY DISBURSEMENT. Regardless of the failure of any condition precedent to Lender's obligation to make disbursements to Borrower, Lender may make a disbursement if Lender, in its sole discretion, determines it to be advisable. The making of any disbursement shall not be deemed to constitute an approval or acceptance by Lender of the work completed or a waiver of the condition with respect to a subsequent disbursement.

13.7. COMPLIANCE. To the best of Borrower's knowledge, the construction, use, and occupancy of the Property and Project comply in full with, or if built according to the Plans and Specifications, will comply in full with, all Governmental Requirements. No right to construct or use the Project is to any extent dependent on any real property other than the Property.

All approvals, licenses, permits, certifications, filings, and other actions normally accepted as proof of compliance with all Governmental Requirements by prudent lending institutions that make investments secured by real property in the general area of the Property, to the extent available as of the date of this Loan Agreement, have been given or taken, or Borrower is entitled to have them given or taken as the ministerial act of the applicable Governmental Authority.

14. R
ESIDENTIAL OPERATIONS.

14.1. VERIFICATION OF NET INCOME. When requested by Lender, Borrower shall provide Financial Statements and such other evidence as Lender may deem necessary to verify the Project net income, including without limitation copies of certified rent rolls, bank statements, billing statements and invoices.

14.2. SECURITY AND LIGHTING. Project shall include a security camera system approved by Lender and lighting adequate to properly illuminate the parking area and all common spaces. In addition, Project will include security patrol, if necessary.

14.3. RESIDENT SERVICES PLAN: Borrower shall provide Lender with a detailed resident services plan including but not limited to the following information: (1) identification of all entities responsible for providing resident services to Project tenants and each entity’s role in the provision of those services; (2) the services will be provided for a minimum of 15 hours per week, including education activities and service coordination; (3) a description of the services to be provided; , (4) a pro forma resident services budget.

14.4. S
MOKE FREE ENVIRONMENT. All residential units and indoor common areas must be smoke free.

15. DEFAULT.

RVP Group - HAF Loan Agreement Page 17

15.1. EVENTS OF DEFAULT. At the option of Lender, each of the following events will constitute an Event of Default, subject to applicable cure rights, if any:

15.1.1. Borrower’s non-performance of any obligation or breach of this Loan Agreement;

15.1.2. The occurrence of a breach or default under any of the Loan Documents;

15.1.3. Subject to Borrower’s legal rights to contest a Governmental Requirement, Borrower's failure to comply with any Governmental Requirement, unless within ten (10) days after notice of such failure by Lender or the respective governmental entity or after any action has been commenced to enforce such requirement, Borrower has cured such failure

15.1.4. Borrower's failure to keep in full force any permit, license, consent, or approval w ith respect to the construction, occupancy, or use of the Project, unless within ten (10) days after notice by the issuing entity or Lender of such failure, Borrower has promptly cured such failure;

15.1.5. Any material deviation from the Plans and Specifications in the construction of the Project, or the appearance or use of defective workmanship or materials in the construction of the Project, if Borrower fails to remedy them or to diligently proceed to remedy them to Lender's satisfaction within ten (10) days a fter Lender's written demand to do so;

15.1.6. Borrower's failure to complete the construction of the Project by the Completion Date;

15.1.7. The filing of any lien against the Property or Project or the service on Lender of any bonded stop notice related to the Loan, i f the claim of lien or bonded stop notice continues for thirty (30) days without discharge, satisfaction, or the making of provision for payment (including bonding) to the satisfaction of Lender;

15.1.8. The attachment, levy, execution, or other judicial seizure of any portion of the Property or Project, or any substantial portion of the other assets of Borrower, that is not released, expunged, bonded, discharged, or dismissed within thirty (30) days after the attachment, levy, execution, or seizure; and

15.1.9. Making of any unauthorized payment from Loan Proceeds or other funds of Lender.

16. R
EMEDIES.

16.1. OPTION TO ACT. On the occurrence of any Event of Default, in addition to its other rights in this Loan Agreement or in any of the other Loan Documents, at law, or in equity, Lender may, without prior demand, exercise any one or more of the following rights and remedies:

16.1.1. Terminate its obligation to make disbursements;

16.1.2. Declare the Note and all other sums owing to Lender with respect to the other Loan Documents immediately due;

16.1.3. Make any disbursements after the happening of any one or more of the Events of Default, without waiving its right to demand payment of the Note and all other sums owing to Lender with respect to the other Loan Documents or any other right s or remedies and without liability to make any other or further disbursements, regardless of Lender's previous exercise of any rights and remedies;

16.1.4. Proceed as authorized at law or in equity with respect to the Event of Default, and in connection with that, remain entitled to exercise all other rights and remedies described in this Loan Agreement or the Trust Deed; and

16.1.5. Recover its funds expended in exercising or enforcing any of its rights or remedies under any of the Loan Documents, together with interest at the maximum amount allowed by law from the date the funds were spent until repaid which amounts will be deemed secured by the Trust Deed.

16.2. R
IGHTS CUMULATIVE, NO WAIVER. All of Lender's rights and remedies provided in this Loan Agreement or in any of the other Loan Documents are cumulative and may be exercised by Lender at any time. Lender's exercise of any right or remedy will not constitute a cure of any Event of Default unless all sums then due to Lender under the Loan RVP Group - HAF Loan Agreement Page 18
Documents are repaid and Borrower has cured all other Events of Default. No waiver will be implied from Lender's failure to take, or delay in taking, any action concerning any Event of Default or from any previous waiver of any similar or unrelated Event of Default. Any waiver under any of the Loan Documents must be in writing and will be limited to its specific terms.

16.3. DISCLAIMER. Whether Lender elects to employ any of the remedies available to it in connection with an Event of Default, Lender will not be liable to construct, compl ete, or protect the Project; to pay any expense in connection with the exercise of any remedy; or to perform any other obligation of Borrower.

16.4. GRANT OF POWER. Subject to the prior rights of lenders whose loans are secured by the Property and senior to th e rights of Lender, Borrower irrevocably appoints Lender as its attorney- in-fact, with full power and authority, including the power of substitution, exercisable on the occurrence of an Event of Default, to act for Borrower in its name, place, and stead as provided in this Loan Agreement, to take possession of the Property and Project, remove all employees, contractors, and agents of Borrower, to complete or attempt to complete the work of construction, and to market, sell, or lease the Property and Project ; to make any additions, changes, and corrections in the Plans as may be necessary or desirable, in Lender's sole discretion, or as it deems proper to complete the Project; to employ any contractors, subcontractors, suppliers , architects, inspectors, consu ltants, property managers, and other agents that Lender, in its sole discretion, deems proper for the completion of the Project, for the protection or clearance of title to the Property or Personalty, or for the protection of Lender's interests, to employ security guards to protect the Property and Project from injury or damage; to pay, settle, or compromise all bills and claims then existing or later arising against Borrower that Lender, in its sole discretion, deems proper for the completion of the Projec t, for the protection or clearance of title to the Property, or for the protection of Lender's interests; to prosecute and defend all actions and proceedings in connection with the Property or Project; and to execute, acknowledge, and deliver all other ins truments and documents in the name of Borrower that are necessary or desirable, to exercise Borrower's rights under all contracts concerning the Property or Project, and to do all other acts with respect to t he Property or Project that Borrower might do on its own behalf, in each case as Lender in its reasonable discretion deems proper.

17. B
LANKET COVERAGE. Borrower’s obligation to carry insurance as required under this Loan Agreement may be satisfied by coverage under a “blanket” policy or policies of insurance (as the term is customarily used in the insurance industry); provided, however, that Lender shall nevertheless be named as an additional insured under such blanket policy or policies to the extent required by this Section, the coverage afforded Lender will not be reduced or diminished thereby, and all of the other requirements of this Section with respect to such insurance shall otherwise be satisfied by such blanket policy.

18. M
ISCELLANEOUS.

18.1. NONRECOURSE. Subject to the provisions of this Section 18.1, and notwithstanding any provision of the Loan Documents other than this Section 18.1, the personal liability of Borrower, and Borrower’s principals, partners, members, agents, officers, and successors in interest, to pay the principal of and interest on t he debt evidenced by the Note and any other agreement evidencing Borrower's obligations under the Note shall be limited to (a) the Collateral, (b) the personal property described in and pledged under any Loan Document, and (c) the rents, profits, issues, products and income of the Property, including any received or collected by or on behalf of Borrower after an Event of Default.

18.2. C
URE BY PARTY OTHER THAN BORROWER. Any lender whose loan is secured by the property and any principal of Borrower may cure a default of the Loan, provided that such cure rights shall be the same as Borrower’s cure rights. Such other curing party must cure by the date on which Borrower was obligated to cure, except if Lender is obligated by this Loan Agreement to give separate notice to such other curing party, in which instance, the cure period shall begin when Lender makes such notice to such other curing party.

18.3. C
ONDEMNATION. The proceeds of any award or claim for damages, direct or consequential, in connection with any conde mnation or other taking of all or any part of the Property, or for conveyance in lieu of condemnation, are hereby assigned and shall be paid to Lender. In the event of a taking of all of the Property, the proceeds shall be applied to the sums provided by this Loan, subject to any claims of prior lienholder, with the excess, if any, paid to junior lienholders and Borrower, as they may determine. In the event of the partial taking of the Property, unless Borrower and Lender otherwise agree in writing, and subject to any claims of prior lienholders, there shall be applied to the sums secured by the Trust Deed such proportion of the proceeds as is equal to that proportion which the amount of the sums secured by the Trust Deed immediately prior to the date of taking bears to the fair market value of the Property immediately prior to the date of taking, with the balance of the proceeds paid to junior lienholders and Borrower, as they may determine.

RVP Group - HAF Loan Agreement Page 19
If the condemnor offers to make an award or settle a claim for damages to the Property and: (1) the Property is abandoned by Borrower; or (2) after notice by Lender to Borrower of the condemnor’s offer, Borrower fails to respond to Lender within 30 days after the date such notice is mailed; Lender is authorized to collect and apply the proceeds, at Lender's option, either to restoration or repair of the Property or to the sums secured by the Trust Deed.

Unless Lender and Borrower otherwise agree in writing, any such application of proceeds to principal shall not extend or postpone the due date of any payment or change the amount of such payment.

18.4. SUBORDINATION. Lender may subordinate this Loan to a senior loan, provided that any senior loan for the Project indicated in the Budget meets all requirements of this Loan Agr eement, and that such senior loan does not require modification of this Loan Agreement.

18.5. FUNDING REQUIREMENTS. If any Loan Program is federally funded, Borrower shall comply with all laws, rules, regulations and funding requirements that govern the use of such funds. Lender, to the extent required by law, shall cooperate with and assist Borrower in fulfillment of such obligations. If Lender, as a result of actions of Borrower, shall be obligated to repay the Loan Program any amount of the Loan Proceeds, Borrower shall make such repayment on account of Lender and failure to do so shall be an Event of Default.

18.6. N
ATURE OF REPRESENTATIONS AND WARRANTIES. Borrower certifies to Lender that all representations and warranties made in this Loan Agreement and all other Loan Documents are true and correct in all material respects and do not contain any untrue statement of a material fact or omit any material fact necessary to make the representations and warranties not misleading. All representations and warranties will remain true and correct in all material respects and will survive so long as any of Borrower's obligations have not been satisfied or the Loan or any part of it remains outstanding, and for any applicable statute of limitations period. Each request by Borrower for a disbursement will constitute an affirmation that all representations and warranties remain true and correct as of the date of that request. Each representat ion and warranty made in this Loan Agreement, in any other Loan Documents, and in any other document delivered to Lender by Borrower will be deemed to have been relied on by Lender, regardless of any investigation, inspection, or inquiry made by Lender or any related disbursement made by Lender. The representations and warranties that are made to the best knowledge of Borrower have been made after diligent inquiry calculated to ascertain the truth and accuracy of the subject matter of each representation and warranty.

18.7. N
O WAIVER. No failure or delay on the part of Lender in exercising any right or remedy under the Loan Documents will operate as a waiver nor will Lender be estopped to exercise any right or remedy at any future time because of any such failure or delay. No express waiver will affect any matter other than the matter expressly waived and that waiver will be operative only for the time and to the extent stated. Waivers of any covenant, term, or condition in this Loan Agreement will not be construed to waive any subsequent breach of the same covenant, term, or condition.

18.8. N
O THIRD PARTIES BENEFITED. This Loan Agreement is made and entered into for the sole protection and benefit of the parties and their permitted successors and assigns, and no other Person will have any right of action or any rights to funds at any time on deposit in any construction account or impound account, if established.

18.9. NO JOINT VENTURE, PARTNERSHIP, OR OTHER RELATIONSHIP. Nothing contained in this Loan Agreement or in any other document executed in connection with this Loan Agreement shall be construed as creating a joint venture or partnership between Lender and Borrower. Each Party is acting as an independent entity and not as an agent of the other in any respect. No relationship exists as between Lender and Borrower other than that of a lender and a borrower.

18.10. N
OTICES. Borrower irrevocably appoints Lender as its agent (the agency being coupled with an interest) to file for record any notices of completion, cessation of labor, or any other notice that Lender deems necessary or desirabl e to protect its interests under th is Loan Agreement or under the Loan Documents. All notices to be given under this Loan Agreement shall be in writing and sent to the addresses stated above for the respective recipient by one or more of the following methods.

18.10.1. Certified mail, return receipt requested, in which case notice shall be deemed delivered three (3) business days after deposit, postage prepaid in the United States Mail;

18.10.2. A nationally recognized overnight courier, by priority overnight service, in which case notice shall be deemed delivered one (1) business day after deposit with that courier;

RVP Group - HAF Loan Agreement Page 20

18.10.3. Hand delivery with signed receipt for delivery from a person at the place of business of the receiving party and authorized to accept delivery for the receiving party, in which case notice shall be deemed delivered upon receipt, or

18.10.4. Telecopy, if a copy of the notice is also sent the same day by United States Certified Mail, in which case notice shall be deemed delivered one (1) business day after transmittal by telecopier, provided that a transmission report is automatically generated by the telecopier reflecting the accurate transmission of the notices to receiving party at the “Fax Number” given in the Escrow Attachment or to such other address as Borrower or Lender may respectivel y designate by written notice to the other.

18.11. SHORT TERM NOTICES. Notices, including requests for approval, requiring action in less than thirty (30) days may only be given by the foregoing overnight courier or hand delivery method, and shall include the following language on its face: “URGENT – TIME SENSITIVE – IMMEDIATE ACTION REQUIRED” and marked for delivery to Portfolio Management. Such notice shall include the time allowed under this Loan Agreement for action.

18.12. ACTIONS. Lender will have the right to commence, appear in, or defend any action or proceeding purporting to affect the rights, duties, or liabilities of the parties, or the disbursement of any funds under this Loan Agreement.

In connection with that, Lender may incur and pay costs and expens es, including, without limitation, reasonable attorney fees. Borrower agrees to pay to Lender on demand all these expenses, and if applicable, Lender is authorized to disburse funds from the construction account for that purpose. This Section does not apply to actions or proceedings between the parties.

18.13. S
IGNS. Borrower agrees that on the request of Lender, Borrower will erect and place on or in the immediate vicinity of the Property a sign indicating that Lender has provided construction financing for the Project, which sign shall remain for the duration of construction. If Borrower places a sign on the Property during construction stating the names of the Project participants, it shall also name “Sacramento Housing and Redevelopment Agency” as a participant in the Project.

Lender’s name on the sign shall be in letters not less than size of letters used to name any of the other participants.

18.14. ASSIGNMENT. The terms of this Loan Agreement will be binding on and inure to the benefit of successors and assigns of the parties. However, Borrower shall not assign this Loan Agreement or any interest it may have in the monies due or, except as otherwise provided, convey or encumber the Property without the prior written consent of Lender.

Notwithstanding the foregoing, if there is an assignment, conveyance, or encumbrance, Lender may nevertheless at its option continue to make disbursements under this Loan Agreement to Borrower or to those who succeed to Borrower's title, and all sums so disbursed will be deemed to be disbursements under this Loan Agreement and not modifications, and will be secured by the Security Documents. Lender may at any time assign the Loan Documents to any affiliate of Lender or to a national bank or other lender having experience with co nstruction lending, and the assignee will assume the obligations of Lender, and Lender will have no further obligation of any nature. In that case, the provisions of this Loan Agreement will continue to apply to the Loan, and the assignee will be substituted in the place and stead of Lender, with all rights, obligations, and remedies of Lender, including, without limitation, the right to further assign the Loan Documents. In addition, Lender may at any time assign a participation in the Loan to any other party, provided that Lender continues to be primarily obligated under this Loan Agreement.

18.15. P
REPAYMENT. Borrower may prepay the Loan only on and subject to the terms and conditions in the Note.

Borrower shall have no rights to receive, and under no circumstances will Borrower receive repayment of any fees previously paid to Lender.

18.16. CONTROLLING LAW; VENUE. The Loan Documents will be governed by and construed in accordance with California law. The venue for any legal action or proceeding will be in the C ity of Sacramento, California.

18.17. CONSENTS AND APPROVALS. All consents and approvals by Lender required or permitted by any provision of this Loan Agreement will be in writing. Lender's consent to or approval of any act by Borrower requiring further consent or approval will not be deemed to waive or render unnecessary the consent or approval to or of any subsequent similar act.

18.18. SURVIVAL OF WARRANTIES AND COVENANTS. The warranties, representations, conditions, covenants, and agreements in this Loan Agreemen t and in the other Loan Documents will survive the making of the Loan and the execution and delivery of the Note and will continue in full force until the Loan has been paid in full. Nothing in this Section is intended to limit any other provision of the Loan Documents that by their stated terms survive the repayment of the Loan or the termination of any Loan Document.

RVP Group - HAF Loan Agreement Page 21

18.19. RECORDING AND FILING. Borrower, at its expense, will cause the Security Documents and all supplements to be recorded and filed and re-recorded and re-filed in any manner and in any places as Lender will reasonably request, and will pay all recording, filing, re-recording, and re-filing taxes, fees, and other charges.

18.20. LOAN EXPENSES. In making the first disbursement, Lender may, at its option, deduct from the proceeds of that disbursement a sum equal to the aggregate of the following, to the extent Lender has knowledge of it and demand has been made on Lender at the time of the deposit: all expenses specifically incurred in connection with the Loan or the preparation, execution, and delivery of the Loan Documents, including, but not limited to, recording costs and expenses, transfer and other taxes (if any), surveys, appraisal fees, title and hazard insurance premiums, recording, notary , and escrow charges, and all other similar, usual, or customary loan closing charges and expenses; and any other budgeted expenses that have been approved by Lender in writing; and Lender will, for the benefit of Borrower, pay those amounts over to the respective parties on whose behalf the demands will have been received by Lender. Borrower will pay directly any expenses in connection with the Loan not so paid by Lender, including, without limitation, any of the expenses specified above, and will hold Lender free from any cost, liability, or obligation of any nature in connection with it, including reasonable attorney fees incurred by Lender. Borrower further agrees to pay on demand all out-of-pocket costs and expenses reasonably incurred by Lender including, without limitation, the fees and disbursements of Lender's outside counsel, in connection with: (i) the administration of the Loan, including, without limitation, all approvals or consents given or contemplated to be given under the Loan Documents, all amendments to the Loan Documents entered into by Lender or requested by any party to the Loan Documents, and all title insurance policies and endorsements required by Lender, and (ii) the enforcement of any rights or remedies under the Loan Documents, w hether any action or proceeding is commenced, or the protection of the security, or interests of Lender under the Loan Documents. All costs and expenses, together with interest at Interest Rate, will form a part of the indebtedness and will be secured by the Security Documents.

18.21. N
O REPRESENTATIONS BY LENDER. By accepting or approving anything required to be observed, performed, or fulfilled, or to be given to Lender pursuant to this Loan Agreement or pursuant to the Loan Documents, including, but not limit ed to, any officer's certificate, balance sheet, statement of income and expense, or other Financial Statement, survey, appraisal, or insurance policy, Lender will not be deemed to have warranted or represented the sufficiency, legality, effectiveness, or legal effect of it or of any particular term, provision, or condition of it, and any acceptance or approval will not be or constitute any warranty or representation by Lender.

18.22. AMENDMENT. The Loan Documents and the terms of each of them may not be modifie d, waived, discharged, or terminated except by a written instrument signed by the party against whom enforcement of the modification, waiver, discharge, or termination is asserted.

18.23. T
ERMINATION. Except as otherwise provided in the Loan Documents, all rights and obligations under this Loan Agreement will terminate except as to any accrued obligations effective on the payment of all Loan owing by Borrower to Lender.

18.24. COUNTERPARTS. The Loan Documents may be executed in any number of counterparts and by diffe rent parties in separate counterparts, each of which when executed and delivered will be deemed an original and all of which counterparts taken together will constitute one and the same instrument.

18.25. SEVERABILITY. If any term, provision, covenant, or condi tion or any application is held by a court of competent jurisdiction to be invalid, void, or unenforceable, all terms, provisions, covenants, and conditions and all applications not held invalid, void, or unenforceable will continue in full force and will in no way be affected, impaired, or invalidated.

18.26. CAPTIONS. All Article and Section headings in the Loan Documents are inserted for convenience of reference only and do not constitute a part of the Loan Documents for any other purpose.

18.27. INDEMNITY. Borrower agrees to defend, indemnify, and hold Lender harmless from all losses, damages, liabilities, claims, actions, judgments, costs, and reasonable attorney fees that Lender may reasonably incur as a direct or indirect consequence of the making of the Loan, Borrower's failure to perform any obligations as and when required by this Loan Agreement or any of the other Loan Documents, the failure at any time of any of Borrower's representations or warranties to be true and correct, or any act or omission by Borrower, any contractor, subcontractor, engineer, architect, or other Person with respect to the Property, the Project, or any portion of them except to the extent caused by the gross negligence or willful misconduct of Lender. Borrower will pay immediately on Lender's demand any amounts owing under RVP Group - HAF Loan Agreement Page 22
this indemnity, together with interest at the maximum rate permitted by law from the date Lender makes a payment or incurs a loss. Borrower's duty to indemnify Lender will survive the release and cancellation of the Note and the reconveyance or partial reconveyance of the Trust Deed.

18. 28. FURTHER ASSURANCES. At Lender's request and at Borrower's expense, Borrower will execute, acknowledge, and deliver all other instruments and perform all other acts necessary, desirable, or proper to carry out the purposes of the Loan Documents or to perfect and preserve any liens created by the Loan Documents.

18. 29. DISCLOSURE OF INFORMATION. If Lender elects to sell the Loan, Lender may forward to the buyer of the Loan all documents and information related to the Loan in Lender's possession, including without limitation all Financial Statements, whether furnished by Borrower or otherwise.

18. 30. LENDER'S AGENTS. Lender may designate agents or independent contractors to exercise any of Lender's rights under the Loan Documents. Any reference to Lender in any of the Loan Documents will include Lender's employees, agents, and independent contractors.

18. 31. INTEGRATION AND INTERPRETATION. The Loan Documents contain or expressly incorporate by reference the entire agreement between Lender and Borrower with respect to the covered matters and supersede all prior negotiations.

Any reference to the Property or Project in any of the Loan Documents will include all or any portion of them. Any reference to the Loan Documents themselves in any of the Loan Documents will include all amendments, renewals, or extensions approved by Lender.

18. 32. NUMBER, IDENTITY AND GENDER. When the context and construction so require, all words used in the singular will be deemed to have been used in the plural and vice versa. When the context and construction so require, all words which indicate a gender will be deemed to have been used to indicate the gender as indicated by the context.

THE PARTIES HAVE EXECUTED THIS LOAN AGREEMENT in Sacramento, California as of the Effective Date.

BORROWER :

RVP Group LP, a California limited partnership
By: RVP Group LLC, a California limited liability
company, its managing general partner
By: Sacramento Housing Authority
Repositioning Program, Inc., a California
nonprofit public benefit corporation, its sole
member and manager
By: _____________________________
James Shields, President
LENDER:

HOUSING AUTHORITY OF THE CITY OF

SACRAMENTO, A PUBLIC BODY, CORPORATE AND

POLITIC
BY: _______________________________________

LA SHELLE DOZIER, EXECUTIVE DIRECTOR
APPROVED AS TO FORM:
__________________________________________

LENDER COUNSEL
RVP Group – HAF Loan Agreement Page 1
R
iverview Plaza
T
he land described herein is situated in the State of California, County of Sacramento, City of Sacramento, described as follows:

P
arcel A:

P
arcel 1, as shown on that certain Parcel Map entitled "Parcel A, 62 PM 14, also being Lots 1 & 2 of the Block bou nded by 6th, 7th, 'I' and 'J' Streets", recorded October 11, 1988 in Book 107 of Parcel Maps, at Page 28, Records of Sacramento County.

AP
N: 006-0032-029-0001
P
arcel B:

P
arcel 2, as shown on that certain Parcel Map entitled "Parcel A, 62 PM 14, also bei ng Lots 1 & 2 of the Block bounded by 6th, 7th, 'I' and 'J' Streets", recorded October 11, 1988 in Book 107 of Parcel Maps, at Page 28, Records of Sacramento County.

T
ogether with those certain Reciprocal Access Easements (R.A.E.) on, under, over and across Parcel 3, as said Parcel is shown on said Parcel Map.

AP
N: 006-0032-029-0002
P
arcel C:

P
arcel 3, as shown on that certain Parcel Map entitled "Parcel A, 62 PM 14, also being Lots 1 & 2 of the Block bounded by 6th, 7th, 'I' and 'J' Streets", recorded October 11, 1988 in Book 107 of Parcel Maps, at Page 28, Records of Sacramento County.

AP
N: 006-0032-029-0003
P
arcel D:

P
arcel 4, as shown on that certain Parcel Map entitled "Parcel A, 62 PM 14, also being Lots 1 & 2 of the Block bounded by 6th, 7th, 'I' and 'J' Streets", recorded October 11, 1988 in Book 107 of Parcel Maps, at Page 28, Records of Sacramento County.

AP
N: 006-0032-029-0004
Exhibit 1: Legal Description
R
VP Group - HAF Loan Agreement Page 1
Exhibit 2: Scope of Development
S
cope of Development – Rehabilitation of Riverview Plaza Apartments 600 I Street, Sacramento, CA 95814
S
cope of the work for this project includes building envelope and building system improvement and unit tenant improvements for the residential space (3rd through 16th floors). This project does not include any tenant improvement scope of work in the commercial space (ground and 2 nd floors) except the common areas such as lobbies, mechanical/electrical rooms, elevators, stairways, etc. The scope of work shall also contain any hazardous material removals such as asbestos and lead, as described in the attached report, dated December 20, 2019.

Pumps were replaced recently).
11 Replace HVAC units ( condensing units and fan coils) for the residential space and common areas ( The HVAC units serving the 2nd floor were replaced in 2020) 12 Replace Water heaters for residential and commercial area (Existing gas water heaters to be converted into electric water heaters). Replace the associated check and control valves. 13 Replace outdated recessed lighting throughout the residential , elevator and common spaces with energy efficient light fixtures
14 Repair drywall throughout the building as needed.
15 Paint throughout the common area and common space ( commercial area work is limited to common areas )
16 Install new drop ceiling. Existing drop ceilings are aged and material is discontinued. 17 Replaced existing gas fireplaces in the residential common area with electric fire places. 18 Replace existing furniture in the residential lobbies on 3, 5, 7, 9, 11, and 13th floors (including Sofa, Chairs, coffee table, and wall art). Replace tables and chairs in the cafeteria on the 15th floors. 19 Replace garbage trash chute and equipment. Replace locking hardware for the trash chute. Install sprinkler system in the trash chute as mandated by code. 20 Replace fire drops in the commercial kitchen and trash chute space ( in the garage)

RVP Group - HAF Loan Agreement Page 2
21 Upgrade laundry room to comply with ADA requirements, or install in-unit laundry for ADA units ( 12 EA)
22 Upgrade plumbing , drainage and dryer ventilation in the laundry rooms ( 12 EA) 23 Replace existing ventilation fans, supply fans, and dampers throughout the building ( due to age and failing systems)
24 Install building phone entry and card access throughout the building ( controlled access) 25 Replace gas shut off valves ( 2 EA) ( located in the parking space)

3- Tenant Unit Improvements ( 123 Units) ( No Unit TI for the commercial space)* 26 Minimum 10% of units to be converted to fully ADA units 27 Replace interior Light fixtures
28 Replace Kitchen ranges and range hoods
29 Replace PTAC units in the dwelling units
30 Replace plumbing fixtures (toilets, shower heads, kitchen and bathroom faucets) with water-saving fixtures
31 Replace shower surrounds (cultured marble) and mixing valves 32 Replace countertops at Kitchens (granite) and Baths (cult. marble) 33 Replace Kitchen cabinets
34 Replace bathroom vanities
35 Paint unit interiors
36 New LVP flooring and baseboard to replace existing
37 Install new smoke/CO detectors
38 Replace unit entry and interior doors as needed (use existing frames) 39 Replace door hardware throughout the units
40 4% communication features ( bells, strobes etc in ADA units) 41 Replace switches and outlets throughout
42 Refrigerators N.I.C.
43 Replace bathroom exhaust fans
44 Drywall repairs as needed
45 Replace bathroom exhaust fans
4- Fire life and Safety
46 Replace mechanical interface equipment for smoke purge system and smoke pressurization system, including all its components as needed. Architect to conduct a comprehensive analysis of the existing systems and recertify all the equipment. SHARP needs to replace controls, rooftop fan, and blower units.
47 Replace and update emission control sensors and control units 48 Replace and upgrade fire pumps (Only electric components to be replaced. The pumps were replaced recently)
49 Replace and upgrade fire doors and hardware throughout (due to age and parts shortage) 50 Replace fire alarm system and all its devices with new system 51 Build a 2nd emergency exit from the office space
5- Elevators ( 3 EA Passenger, 1 EA freight/Passenger)
52 Replace proprietary elevators' equipment and software 53 Retrofit elevator cab interior finishes
54 Install new elevator controls ( including card readers)

RVP Group - HAF Loan Agreement Page 3
6- Pool
55 Replace swimming pool heaters and filtration system
56 Drain, waterproof and re-plaster pool
57 Replace pool's surrounding tile skirt and waterproof outside deck

SHARP intends to replace all existing cameras and add new cameras. SHARP will provide a layout and equipment list for the cameras.
65 Replace exterior windows with energy efficient Vinyl windows. 66 Replace existing heads with recessed sprinklers heads 67 Recertify/Upgrade commercial kitchen appliances, plumbing and refrigeration and fire safety hood system (15th floor) as needed. Consultant to conduct a comprehensive analysis of the existing equipment and identify systems that need to be replaced or recertified ( at minimum replace the ANSUL fire suppression system and certify the refrigeration equipment) * The scope of work for the project does not include any tenant improvement work in the ground and 2nd floors, except the common spaces such as lobbies, elevators, stairs, etc.

Attachment 1: Rental Property Minimum Construction Standards are on the following page.

RVP Group - HAF Loan Agreement Page 4
Attachment 1: Lender’s Minimum Construction Standards
This attachment is from Exhibit 2 from the Lender’s Multifamily Lending and Mortgage Revenue Bond Policies.

RENTAL PROPERTY MINIMUM CONSTRUCTION STANDARDS

The following is a list of the required minimum construction standards that must be incorporated into projects participati ng in SHRA’s Multifamily Financing and/or Mortgage Revenue Bond programs. All rental units and sites associated with these projects must meet or exceed these standards. Exceptions to these standards may be made for properties subject to U.S. Department of Housing and Urban Development replacement reserve requirements that allow for renovation over time rather than at recapitalization (e.g., Rental Assistance Demonstration conversions for conventional public housing).

Note: For rehabilitation projects, all of the following standards shall apply. The non-rehabilitation sections below shall apply to new construction projects.

Useful Life Expectancy – Rehabilitation only

SHRA shall reference the current edition of FannieMae’s “Instructions for Performing a Multifamily Property Condition Assessment, Appendix F. Estimated Useful Life Tables” in determining the useful life for all building components and systems located within the project. A remaining useful life of 15 years or more is required for all building components and systems located within the approved complex. All items on the FannieMae tables with useful lives indicated to be less than 15 years shall be replaced.

General Requirements

A. All materials funded under this loan must be new unless previously approved. Recycled items must be approved in writing by SHRA prior to their use.

B. All work shall comply with Federal and State ADA accessibility requirements, as well as any other requirements stipulated by the funding source(s). When there are differences the stricter of the two shall apply. The developer is responsible for notifying their architect and/or engineer of all funding sources used on the project. The architect and/or engineer must indicate these funding requirements in the project’s plans/scope.

C. All units shall be approved for occupancy by the local Building Department or any other Agency Having Jurisdiction (AHJ) at the conclusion of the work and prior to occupancy.

D. Web-based security cameras and the equipment to record events are required for primary ingress/egress points to and from the site and for the principal parking and indoor and outdoor common areas where people will be congregating.

E. Site lighting is required for all parking and outside public spaces, and shall be of LED or similarly energy efficient type. The lenses on the exterior lights shall be cleaned with all oxidation removed or replaced. Light poles shall be new or painted, and shall be structurally sound and stable.

F. The developer’s architect is responsible for providing an Operating Procedure Outline Sheet (OPOS) for window washing systems where applicable, per Cal-OSHA requirements.

G. SHRA encourages the use of energy and water-efficient systems wherever they may be incorporated into the project.

General Requirements – Rehabilitation only

A. Any component of the project which does or may present a health or safety hazard to the public or tenants shall be corrected to the satisfaction of the local Building Department or AHJ.

B. A clear pest inspection report will be required at the conclusion of the construction work for rehabilitation projects.

C. For all structures where disturbance of any hazardous materials (e.g. lead, asbestos, mold, etc.) will occur, a clearance report from an environmental consultant is required.

D. Projects deemed historically significant landmark by either the City of Sacramento or the National Register of Historic Places shall consult with the State Historic Preservation Officer (SHPO), and shall conform to the Secretary of the

RVP Group - HAF Loan Agreement Page 5
Interior Standards for the Treatment of Historic Properties.

Site Work

A. Trees and large shrubs must be trimmed, grass areas must be mowed, and all planter areas must be weed -free. The landscape design shall incorporate a sustainable design appropriate for the Sacramento Valley. Vegetation that assists in minimizing crime and enhances public safety is preferred. Trees compromising building envelope materials (roofing, siding, windows, etc.) and/or structural integrity (including foundations) must be removed. An arborist shall be consulted for an opinion on trees prior to major branch trimming, root cutting or tree removal. All trees, bushes and other plants that are to be removed shall have the root ball removed by grinding or by mechanical means. A landscape plan describing the above must be provided to SHRA for approval.

B. All landscaped areas must be served by a programmable automated irrigation system. The irrigation controller shall be a “Smart Controller” that senses rain to reduce water use. Irrigation shall be designed to use bubblers and other water saving measures. Irrigation must not spray on building. Sprinklers should minimize overspray that runs to storm drain drop inlets. Areas that show evidence of erosion of soil shall be landscaped to eliminate problems. The landscape plan must be approved by SHRA and applied.

C. For gated communities containing swinging vehicle gates, driveways shall be striped to show the area under the gate swings for safety purposes.

D. All projects shall contain trash enclosures with concrete aprons. Trash enclosures shall be made of cinde r block or stucco. Trash enclosures shall be accessible to all tenants. Provisions for tenants with disabilities must be addressed in the project Scope of Development or the project plans.

E. All projects shall meet the parking requirements of the local Agency Having Jurisdiction (AHJ) over the project. "Grandfathered Projects" will need to show that they are in fact “Grandfathered” or otherwise exempted by the local AHJ. Otherwise, all projects shall meet the governing ADA requirements for parking.

F. A two percent (2%) slope shall be maintained for a distance of five feet from all structures and no standing water shall remain on the site. Provide an on- site drainage system if necessary.

G. Stairways in common areas must include closed risers and non-slip concrete finish or other slip-resistant material on the treads.

H. Exterior mounted electrical, mechanical, and plumbing systems must be protected from vandalism.

I. For family projects of 50 or more units, a minimum of one school age-appropriate play structure is required. For family projects of 100 or more units, a minimum of one school age and one toddler -appropriate play structure is required.

Site Work – Rehabilitation only

A. All landscaping and irrigation systems must be in a well-maintained condition.

B. All fencing must be in good and serviceable condition. Existing fencing that is to remain shall be free of flaking paint, rust, or any other signs of failure. If existing fencing shows any signs of failure, it shall be repaired, painted and restored to look new. All chain link fencing must be removed and replaced with fencing of another approved material.

All pedestrian gates hardware must be functional and in new or near-new condition. Access Control systems are required at exterior pedestrian gates.

C. All driveways and sidewalks must be in good condition. All cracked or uplifted areas (more than ¼”) shall be repaired or replaced.

D. The asphalt shall be in good condition, with no alligator cracking, longitudinal cracking, potholes, or standing water.

Repairs to portions of parking lots not suitable for new coatings shall be performed by removing and replacing damaged paving. A new seal-coat or slurry-coat shall then be applied to the entire parking lot surface. Parking spaces shall be restriped, including ADA aisles and other applicable striping/painting.

E. All site accessories (bollards, benches, tables, play equipment, bike racks, mailboxes, shade structures, BBQs, sheds, etc.) shall be replaced or in good repair (cleaned, painted and/or re-coated).

RVP Group - HAF Loan Agreement Page 6

Building Envelope and Moisture Protection – Rehabilitation only

A. All areas exposed to moisture must be sealed and watertight. Buildings showing evidence of water intrusion shall have the areas inspected by a licensed architect/engineer or by a certified water intru sion expert. A water intrusion report shall be submitted to SHRA, and shall include the cause of the issue and a resolution to eradicate the water intrusion. If the inspection cannot be completed until the demolition phase of the project, the report shall describe a procedure to inspect the issue during demolition.

B. Roofing must have 15 years or more of remaining life with no visible signs of leakage. For roofs containing composition shingles, a maximum of two layers of shingles are allowed (including any proposed new layers). Provide evidence that the roof system has a 15-year life remaining on the manufacturer’s warranty.

C. All siding must have 15 years or more of remaining life. Hairline cracks in stucco must be sealed and painted with elastomeric paint. If requested by SHRA, a statement by a licensed architect and/or engineer that the existing siding contains at least 15 years of useful life remaining shall be provided.

D. Fireplaces must be clean and meet applicable air quality standards. Chimneys shall b e clean and must be inspected by a certified chimney inspector for structural integrity. All recommended structural repairs shall be performed.

Doors and Windows

A. All dwelling/tenant units must have screens on all windows that are designed to open. Windows designed to open must have functional locks and must operate freely without excessive effort. All windows must be dual -paned (minimum), and shall meet or exceed the State of California’s currently applicable efficiency standards, and any other efficiency standards that may be dictated by the funding source or other governing bodies for the project.

B. All doors must have matching hardware finishes.

C. All exterior doors must have deadbolt locks, keyed latch assemblies, viewers, and screws in strike plates long enough to penetrate the door jamb framing by at least one inch. The dwelling entry door hardware shall have single action hardware to release deadbolt and latch assembly.

D. All sliding exterior doors shall have screen doors and shall have functional locks and must operate freely without excessive effort.

E. All doors and windows must meet current egress standards.

Doors and Windows – Rehabilitation only

A. Any windows showing signs of condensation or leakage of any kind shall be replaced. SHRA allows window replacement using retrofit windows when those windows are installed by trained professionals following manufacturer’s specifications. Retrofit windows must have a similar useful life as “new, construction” (i.e., nail fin) windows.

B. All doors and doorjambs must be in good condition. No damaged or worn doorjambs or doors are allowed. Doors and/or jambs beyond their useful life shall be replaced.

Casework

A. New cabinet boxes shall be made of plywood or solid wood. No particle board boxes will be allowed.

B. All counter tops shall be of solid surface or granite, and in very good condition with no significant scratches, burns or other imperfections.

C. Face frames, doors and drawer faces shall be solid hardwood. No plastic laminate finishes will be allowed.

Casework – Rehabilitation only

RVP Group - HAF Loan Agreement Page 7
A. All cabinets shall be replaced or in very good condition, within their 15 year useful life, both structurally and i n appearance.

Finishes

A. All dwelling unit kitchens shall contain luxury vinyl plank (LVP) flooring. Bathrooms must be floored with LVP, sheet vinyl or ceramic tile to provide a cleanable, impervious surface. Bedrooms, hallways, and living and dining rooms may be floored with carpeting, LVP or hardwood. Wear layer of LVP shall be at least 12 mils inside dwelling units. Tenant unit entries shall be floored with LVP or ceramic tile.

B. In common areas, corridors may be floored with LVP, glue-down carpeting, or carpet tiles. Community rooms and kitchens shall be floored with LVP. Wear layer of LVP in common/commercial areas shall be a minimum of 20 mils thick.

C. Carpet shall meet or exceed the minimum standards as set by HUD’s UM-44D bulletin.

Finishes – Rehabilitation only

A. Floor coverings must be in good, useable condition - no holes, tears, rips, or stains.

B. All exterior and interior surfaces must be painted. No peeling, cracking, chipping, or otherwise failing paint will be allowed. All painted surfaces must be new, or in near new condition and appearance.

C. Acoustic (popcorn) ceiling texture must be removed and refinished with new texture to match wall texture.

Equipment

A. Dishwashers, refrigerator/freezer, oven, stoves and garbage disposals are required in all dwelling unit kitchens. All appliances must be new or in very good operating condition. All appliances must be Energy Star rated, as applicable.

Appliances slated for ADA units shall be per code requirements.

B. SRO projects are encouraged to provide the appliances listed above and will be reviewed and approved on a case -by- case basis.

C. All kitchens must have adequate cabinet and counter space. Installation of shelving for microwaves is required if over - the-range microwaves are not used, with the exception of ADA units.

Furnishings

A. Dwelling units must have window coverings on all windows.

Special Construction

A. Non-habitable structures on property must be painted to match primary buildings and must be structurally sound.

B. Laundry facilities must, at a minimum, be consistent with CTCAC requirements of one washer and dryer for every ten dwelling units for family housing and one for every 15 units for senior and special needs projects. Ten percent of the total number of washer/dryers must be ADA-accessible machines (unless the ADA units contain their own laundry facilities). Solid surface countertops will be required within laundry rooms and countertops shall meet all ADA requirements.

C. Public pool areas shall have self-closing gate(s). Fences and gates at pool areas shall meet applicable current codes and standards. Joints between coping and concrete deck shall be appropriately caulked. Existing pools shall have no cracks in plaster or tile grout joints. The Developer is responsible for ensuring pool and surroundings meet all applicable current codes and standards. If a project contains two or more pools, at least one must remain following rehabilitation.

Mechanical/Plumbing

A. Water heaters must be installed per current applicable codes.

RVP Group - HAF Loan Agreement Page 8

B. All common areas and tenant units must have heating and air conditioning. Wall mount (i.e. PTAC units) or cent ral systems are acceptable. Evaporative coolers are not acceptable. HVAC units should be protected from vandalism, pursuant to discretion of SHRA.

C. Toilets, showerheads, faucets, and mixing valves shall be new and meet current water conservation codes.

D. Tub surrounds must be one unbroken piece per wall and must be of solid surfaces (such as “Swanstone” or other solid acrylic materials, quartz composites), or other similar materials. Fiberglass/acrylic surrounds are acceptable.

Mechanical/Plumbing – Rehabilitation only

A. All toilets, sinks, and tubs shall be chip and stain free.

Electrical

A. All units must have smoke/carbon monoxide detectors installed per current code.

B. Wiring from telephone/data/cable suppliers shall be installed within walls, attic spaces, and/or crawl spaces. No conduits are allowed to be mounted on the exterior of the buildings in new construction.

C. Broadband infrastructure meeting the requirements of 24 CFR 5.100* is required in all new construction projects of 4 or more units.

*Broadband infrastructure means cables, fiber optics, wiring, or other permanent (integral to the structure) infrastructure, including wireless infrastructure, that is capable of providing access to Internet connections in individual housing units, and that meets the definition of “advanced telecommunications capability” determined by the Federal Communications Commission under section 706 of the Telecommunications Act of 1996 (47 U.S.C. 1302).

Electrical – Rehabilitation only

A. All electrical panels shall meet current code.

B. Any rehabilitation projects with un-grounded electrical systems shall be re-wired with grounded systems to meet current code.

C. For rehabilitation projects, switches, outlets and light fixtures shall be replaced with devices that meet current applicable codes.

D. Wiring mounted on the exterior of the surface may be allowed if it is concealed in conduit and conduit is painted to match exterior siding. For projects where exterior siding will be removed, this wiring shall be installed within walls, attic spaces, and/or crawl spaces.

Resident Services Community Space

All properties, regardless of project type (i.e. senior, family, or large family), must devote a minimum of 1,200 s.f. to act ual resident services/community space. Resident services space includes common kitchens, computer rooms, meeting rooms and general gathering space. It does not include public restrooms, leasing offices, laundry facilities and lobbies. Common kitchens are required, including refrigerator, stove, garbage disposal, and dishwasher.

For existing buildings, these requirements shall apply unless SHRA deems there to be significant physical constraints.

End of Scope of Development.

Exhibit 3: Note Form

PROMISSORY NOTE

FOR RVP GROUP

HAF CONSTRUCTION AND PERMANENT LOAN AGREEMENT

BORROWER HAS MADE THIS PROMISSORY NOTE (“NOTE”) AS OF THE EFFECTIVE DATE. The Lender is making the Loan pursuant to the terms and conditions of the Loan Agreement and this Note. This Note includes all attachments and Exhibits listed below, which are attached to and incorporated in this Note by this reference. The capitalized terms in this Note shall have the meanings assigned in the following table of definitions and as defined in the body of the Note. (Terms being defined are indicated by quotation marks. If an item in the table is marked “None, Not Applicable, N/A or equivalent or is left blank, that defined term is not applicable to this Note or the referenced item is not required or is not included in this Note as the context may indicate. ) Capitalized terms not defined in this Note shall have the meanings assigned in the Loan Agreement as it may be amended from time to time . The Lender is making the Loan to Borrower in consideration of Borrower making this Note and delivering it to Lender.

For purposes of this Note, the following terms shall have the following meanings:

DEFINED TERM: DEFINITION:
“Effective Date” ***TBD ***
“Lender” Housing Authority of the City of Sacramento (HACS) “Borrower” RVP Group LP
“Borrower Legal
Status” a California limited partnership
“Loan Agreement” The Loan Agreement between the Borrower and Lender as of the Effective Date for making of the loan (“Loan”) evidenced by this Note.
“Principal
Amount”
Nine Hundred Ninety-Thousand Dollars and No Cents ($990,000.00) “Interest Rate” The interest rate is 3% per year, simple interest. “Accrual Date” Interest shall accrue starting on the following “Accrual Date”: The Effective Date

“Special Terms”
On or before the Conversion Date, Borrower shall submit to Lender a cost certification prepared by a qualified, independent auditor acceptable to Lender, which cost certification shall indicate the amounts actually spent for each item in the cost breakdown. If there is an aggregate savings in the total of all such cost breakdown items from the cost breakdown items in the original Budget approved by the Lender, the Lender shall withhold for itself as Loan repayment, one-half of such savings from the amount of retention then held by the Lender, and the Loan balance shall be reduced by the amount so withheld. The Lender, in its sole discretion, shall determine any reduction and/or repayment of the Loan based upon this cost certification and the original approved Budget for the Project.

PAYMENT SCHEDULE. Repayment of this Note shall be made as follows:
“Maturity Date” The first day of the 684th calendar month following the Effective Date. “Payment
Amount(s)”
ANNUAL REPAYMENT: Annual principal and interest payments shall begin on May 1st following conversion to permanent financing. Annual payments will be made on a Residual Receipts basis, as defined below, until the maturity date. Annual payments shall be applied first to outstanding interest accrued and unpaid and then to principal. “Residual Receipts” is defined as follows: beginning from the Loan’s Effective Date, annual installments (as described in this paragraph) are to begin. Based on the annual audited financial statement from the preceding year, payments will be made upon a “Residual Cash Flow” basis meaning Net Operating Income (NOI) less:
i. to the Limited Partner for unpaid credit deficiency, taxes owed on taxable income allocated to the Limited Partner, and unpaid Investor Services Fees;

ii. to replenish the operating reserve to required level; RVP Group – HAF Promissory Note Page 2

iii. to the property manager for the cash flow portion of property management fee (if related manager);

iv. to the developer to pay off remaining deferred Development Fee;

v. to the General Partner to reimburse operating deficit contributions, to reimburse cost overrun contributions (at the Limited Partner’s sole reasonable discretion after tax analysis), and for Partnership Administration Fee (if applicable);

vi. to contingent loan payments with limits for each loan scheduled in the projections and in accordance with the loan documents;

vii. to a percentage to the General Partner accompanied by a special allocation of income of such amount and the remainder to the Limited Partner per Section B above

To the extent that insufficient Residual Cash Flow is available to pay any of the amounts set forth in Sections (i) through (vii) when due, such amount shall accrue and be payable in the future when there is available Residual Cash Flow, after prior payment of all higher pr iority payments from Residual Cash Flow, as set forth above.

“Operating Expenses” shall mean actual costs, fees and expenses as evidenced by invoices attributable to the operation, recordkeeping, maintenance, taxes and management of the Project, including property management fees; taxes and assessments; payroll, benefits and payroll taxes of for property employees; insurance; security; painting, cleaning, repairs, and alterations; landscaping; sewer charges; utility charges; advertising, promotion and publicity; cable television, satellite and other similar services; office, janitorial, cleaning and building supplies; recreational amenities and supplies; purchase, repair, servicing and installation of appliances; costs and expenses associated with the provision of social and/or co mmunity services to the residents of the Project; equipment, fixtures and furnishing; fire alarm and elevator monitoring; fees and expenses of accountants, attorneys, consultants and other professionals. The definition will include deposits into operating and/or replacement reserves maintained by the Borrower but will not include initial deposits to capitalize the reserve accounts or amounts expended from a reserve account, or capital costs.

FOR VALUE RECEIVED, THE UNDERSIGNED, JOINTLY AND SEVERALLY, PROMISES TO PAY to Lender, or its successors or assigns, the Principal Amount or such lesser amount as may be endorsed on this Note on behalf of Lender. The Loan shall bear interest on the outstanding principal balance, computed from the Accrual Date at the Interest Rate.

1. This Note evidences the obligation of Borrower to Lender for repayment of the Loan. The terms and covenants of the Loan Agreement are incorporated in this Note by reference. The Loan Agreement provides for and incorporates the Regulatory Agreement (as defined in the Loan Agreement), the making of which is further consideration for this Note.

2. All payments on this Note shall be applied first to fees and charges due under the Loan Agreement, if any, then to interest and then to the principal due on this Note. Borrower shall make the payments to the Lender at 801 12 th
RVP Group – HAF Promissory Note Page 3
Street, Sacramento, CA 95814, or to such other person or organization as may be designated by Lender to Borrower and noticed as provided in the Loan Agreement.

3. If any installment under this Note is not received by Lender within fifteen (15) calendar days after the installment is due, Borrower shall pay to Lender a late charge of five percent (5%) of such installment. Such late charge shall be immediately due and payable without demand by Lender.

4. This Note is secured by a Deed of Trust and Assignment of Rents against the real property described in the Loan Agreement (“Property”), recorded in the office of the County Recorder of Sacramento County ("Trust Deed"). The Trust Deed securing this Note provides that Lender may at its option, declare all funds secured by the Trust Deed immediately due and payable, if any interest in the Property is refinanced, sold, hypothecated, transferred or conveyed to any person, whether voluntarily or involuntarily. The Trust Deed further provides that if Borrower does not comply with the requirements of the Regulatory Agreement and fails to come into compliance with the Regulatory Agreement within thirty (30) days after Lender’s written notice to Borrower of such failure, Lender may at its option, declare all funds secured by the Trust Deed immediately due and payable.

5. Lender and Borrower shall comply with and fulfill the Special Terms.

6. Upon occurrence of any one or more of the following, Lender may, at its sole discretion, declare all unpaid principal immediately due and payable, together with all unpaid interest at the stated rate from the date of the advancement of the Loan's proceeds, subject to applicable cure periods, if:

a. Borrower defaults in the payment of any principal or interest when due. b. Lender discovers that Borrower, in any application to Lender in connection with the Loan, either (i) failed to disclose, or (ii) misrepresented any fact that would have prevented Borrower from being eligible for the Loan. c. Lender discovers that Borrower has made any misrepresentations or has intentionally withheld any fact in the making or continuation of this Loan, the knowledge of which could have affected the decision of Lender to make the Loan.
d. Borrower defaults or breaches any of the terms of Loan Agreement, the Trust Deed, the Regulatory Agreement or this Note.
e. Borrower fails to perform any covenant, term or condition in any instrument creating a lien upon the Property which is the security under the Trust Deed, or any part thereof, which lien shall have priority over the lien of the Trust Deed securing this Note.
f. The sale, transfer of title, conveyance or further encumbrance of the Property, whether by sale, exchange, gift, inheritance or other means, without prior written consent of Lender. g. Any of the following occur:
1) Borrower becoming insolvent or bankrupt or being unable or admitting, in writing, Borrower’s inability to pay debts as they mature or making a general assignment of or entering into any restructure payment arrangement with creditors.
2) Proceedings for the appointment of a receiver, trustee or liquidator of the assets of Borrower or a substantial part of such assets, being authorized or instituted by or against the Borrower. 3) Proceedings under any bankruptcy, reorganization, readjustment of debt, insolvency, dissolution, liquidation or other similar law of any jurisdiction being authorized or instituted against Borrower.

7. No waiver of any default or breach by Borrower under this Note shall be implied from any omission by Lender to take action on account of such default, and no express waiver shall affect any default, other than the default RVP Group – HAF Promissory Note Page 4
specified in the waiver. Such waiver shall be in writing and shall be operative only for the t ime and to the extent therein stated.

8. Borrower may prepay this Note in full or in part at any time, without any prepayment penalty being charged by Lender.

9. During the existence of default or delinquency under the terms of this Note or the Trust Deed, the Lender is expressly authorized to apply all payments made on this Note to the payment of all or part of the delinquency, as it may elect.

10. Subject to the provisions of this Section 10, and notwithstanding any provision of the Loan Documents other than this Section 10, the personal liability of Borrower, and Borrower’s principals, partners, members, agents, officers, and successors in interest, to pay the principal of and interest on the debt evidenced by this Note and any other agreement evidencing Borrower's obligations under this Note shall be limited to (a) the Collateral (as defined in the Loan Agreement), (b) the personal property described in and pledged under any Loan Document, and (c) the rents, profits, issues, products and income of the Property, including any received or collected by or on behalf of Borrower after an Event of Default under the Loan Documents.

11. Borrower shall pay to Lender all costs of enforcement of all or any portion of this Note, the Trust Deed, and the Regulatory Agree ment, including attorney's fees, witness fees, investigator fees and court costs, incurred by Lender, whether or not litigation is commenced.

I
N WITNESS WHEREOF, Borrower has executed this Note as of the Effective Date.

Borrower:

RVP Group LP, a California limited partnership

By: RVP Group LLC, a California limited liability company, its managing general partner

By: Sacramento Housing Authority Repositioning
Program, Inc., a California nonprofit public
benefit corporation, its sole member and manager

By: _____________________________
James Shields, President

Exhibit 4: Trust Deed Form
NO FEE DOCUMENT:

Entitled to free recording
per Government Code §§6103 and 27383.

When recorded, return to:

SACRAMENTO HOUSING AND

REDEVELOPMENT AGENCY
801 12th Street
Sacramento, CA 95814
Attention: Portfolio Management

HAF DEED OF TRUST AND ASSIGNMENT OF RENTS
RVP Group

For purposes of this Deed of Trust the following capitalized terms shall have the meanings ascribed in the space adjacent to them:

TERM DEFINITION
“Effective Date” ***TBD***
“Trustor” and
“Borrower”
RVP Group LP, a California limited partnership
“Borrower
Address”
801 12th Street, Sacramento, CA 95814
“Trustee” Placer Title Company
“Beneficiary” and
“Lender”
Housing Authority of the City of Sacramento (HACS) , a public body, corporate and politic
“Lender Address” 801 12th Street, Sacramento, California 95814 “Property”
Which is real property located in the County of Sacramento and the State of California as more particularly described in the Legal Description.

Address 600 I Street, Sacramento, 95814
Assessor’s Parcel Number 006-0032-029-001, 006 -0032-029-002, 006 - 0032-029-003, 006-0032-028-004
“Legal
Description”
The Legal Description of the Property which is more particularly described in the attached Exhibit 1 - Legal Description, which is incorporated in and an integral part of this Deed of Trust
“Loan” Which is Lender’s loan to Borrower evidenced by the Note and which is secured by this Deed of Trust.
“Loan
Agreement”
Which is the agreement between Lender and Borrower stating the term and conditions of the Loan.

Which is dated: ***TBD***
“Additional
Notices”
Lender shall give copies of notices required to be delivered to Borrower to the following parties at the following addresses; provided, however that Borrower acknowledges that such notice is an accommodation and the failure of the Lender to properly deliver any such notice shall not give rise to any claims or defenses of Borrower or a ny third party:
“Note”
Which is Borrower's promissory note made in accordance with the Loan Agreement evidencing the following principal sum or such lesser amount as shall equal the aggregate amount disbursed to Borrower by Lender, with interest.

Which has a principal sum of Nine Hundred Ninety Thousand Dollars and No Cents ($990,000.00)

THIS DEED OF TRUST is made as of the Effective Date between the Trustor also referenced as the Borrower, the Trustee, and the Beneficiary also referenced as Lender.

RVP Group – HAF Deed of Trust and Assignment of Rents Page 2

Borrower, in consideration of the indebtedness described below and the trust created by this Deed of Trust, irrevocably grants and conveys the Property to Trustee, in trust with power of sale.

Together with all the improvements now or subsequently erected on the property, and all easements, rights, appurtenances, rents (subject, however, to the rights and authorities given to Lender to collect and apply such rents), royalties, mineral, oil and gas rights and profits, water, water rig hts, and water stock, and all fixtures, including but not limited to all gas and electric fixtures, engines and machinery, radiators, heaters, furnaces, heating equipment, steam and hot water boilers, stoves, ranges, elevators and motors, bathtubs, sinks, water closets, basins, pipes, faucets and other plumbing and heating equipment, cabinets, mantels, refrigerating plant and refrigerators, whether mechanical or otherwise, cooking apparatus and appurtenances, furniture, shades, awnings, screens, venetian blinds and other furnishings, now or hereafter attached to the property, all of which, including replacements and additions thereto, shall be deemed to be and remain a part of the property covered by this Deed of Trust; and all of the foregoing, together with said property (or the leasehold estate if this Deed of Trust is on a leasehold) are referred to as the "Property";

To secure to Lender: (a) the repayment of the Loan; and (b) the performance of the covenants and agreements of Borrower contained in this Deed of Trust, the Note, or the Loan Agreement.

Borrower covenants that Borrower is lawfully seised of the estate conveyed by this Deed of Trust and has the right to grant and convey the Property, and that Borrower will warrant and defend generally the ti tle of the Property against all claims and demands, subject to any declarations, easements or restrictions listed in a schedule of exceptions to coverage in any title insurance policy insuring Lender's interest in the Property.

Borrower and Lender covenant and agree as follows:

1. Payment of Principal and Interest. Borrower shall promptly pay when due the principal and interest, if any, on the indebtedness evidenced by the Note. All payments received by Lender under the Note shall be applied by Lender first to interest payable on the Note and thereafter to the unpaid principal of the Note.

2. Charges; Liens . Borrower shall pay all taxes, assessments and other charges, fines and impositions attributable to the Property and leasehold payments or ground rents, if any by Borrower making payment, when due, directly to the appropriate payee. Borrower shall promptly furnish to Lender all notices of amounts due under this paragraph, and in the event that Borrower makes payment directly, Borrower shall promptly furnish to Lender receipts evidencing such payments. Borrower shall pay when due any encumbrance, charge and lien, with interest in accordance with its terms, on the Property or any portion which is inferior or superior to this Deed of Trust.

3. Hazard Insurance. Borrower shall keep the improvements now existing or later erected on the Property insured against loss of fire or hazards under a policy approved by Lender consistent with the insurance requirements of the Loan Agreement. In addition, Borrowe r shall insure against loss of all furniture, equipment and other personal property owned by Borrower related to Borrower's operation of the Property.

Lender shall have the right to hold the policies and policy renewals, and Borrower shall promptly furnis h to Lender all renewal notices and all receipts of paid premiums. In the event of loss, Borrower shall give prompt notice to the insurance carrier and Lender. Lender may make proof of loss if not made promptly by Borrower.

Unless Lender and Borrower ot herwise agree in writing, insurance proceeds shall be applied to restoration or repair of the Property damaged, as and to the extent provided in the Loan Agreement.

Unless Lender and Borrower otherwise agree in writing, any such application of insurance proceeds to principal shall not extend or postpone the due date of any Loan payment or change the amount of such payment. If the Property is acquired by Lender pursuant to this Deed of Trust, all right, title and interest of Borrower in and to any insurance policies and proceeds of such policies resulting from damage to the Property prior to the sale of acquisition shall pass to Lender to the extent of the sums secured by this Deed of Trust immediately prior to such sale or acquisition.

RVP Group – HAF Deed of Trust and Assignment of Rents Page 3

4. Liability Insurance. In addition to the casualty insurance required under the Loan Agreement during the course of construction, Borrower shall keep comprehensive general liability insurance for the Property in a form and coverage consistent with the provisions of the Loan Agreement and reasonably approved by Lender.

5. Preservation and Maintenance of Property. Borrower shall keep the Property in good repair and shall not commit waste or permit impairment, demolition, or deterioration of the Property.

6. Protection of Lender's Security. Borrower shall appear and defend any action or proceeding purporting to affect the security under this Deed of Trust or the rights of the Lender. If Borrower fails to perform the covenants and agreements contained in this Deed of Trust, or if any action or proceeding is commenced which materially affects Lender's interest in the Property, including, but not limited to, foreclosure, involuntary sale, eminent domain, insolvency, code enforcement, or arrangements or proceedings involving a bankrupt or decedent, then Lender may, upon notice to Borrower, make such appearances, disburse such sums and take such actions as are necessary to protect Lender's interest, including, but not limited to, disbursement of judgments, costs or reasonable attorney's fees and entry upon the Property to make repairs.

Any amounts disbursed by Lender pursuant to this Section 6, with interest, shall become additional indebtedness of Borrower secured by this Deed of Trust. Unless Borrower and Lender agree to other terms of payment, such amounts shall be payable upon notice from Lender to Borrower requesting payment, and shall bear interest from the date of disbursement at the highest rate permissible under applicable law. In any event, this Section shall be construed as a right and an option of Lender and shall not be construed to require Lender to incur any expense or take any action.

7. Inspection. Lender, by its designated representative, may make reasonable entries upon and inspections of the Property, provided that Lender shall give Borrower and any occupant of the Property reasonable prior notice of any such inspection.

8. Condemnation. The proceeds of any award or claim for damages, direct or consequential, in connection with any condemnation or other taking of all or a ny part of the Property, or for conveyance in lieu of condemnation, shall be applied as provided in the Loan Agreement.

If the Property is abandoned by Borrower, or if, after notice by Lender to Borrower that the condemnor offers to make an award or settl e a claim for damages, Borrower fails to respond to Lender within 30 days after the date such notice is mailed, Lender is authorized to collect and apply the proceeds, at Lender's option, either to restoration or repair of the Property or to the sums secured by this Deed of Trust.

Unless Lender and Borrower otherwise agree in writing, any such application of proceeds to principal shall not extend or postpone the due date of any payment or change the amount of such payment.

9. Borrower Not Released. Extension of the time for payment of the sums secured by this Deed of Trust granted by Lender to Borrower or any successor in interest of Borrower shall not operate to release, in any manner, the liability of the original Borrower and Borrower's successors in int erest. Lender shall not be required to commence proceedings against such successor or refuse to extend time payment by reason of any demand made by the original Borrower or Borrower's successors in interest.

10. Forbearance by Lender Not a Waiver . Any forbe arance by Lender in exercising any right or remedy under this Deed of Trust, or otherwise afforded by applicable law, shall not be a waiver or preclude the exercise of any such right or remedy. The procurement of insurance or the payment of taxes or other liens or charges by Lender shall not be a waiver of Lender's right to accelerate the maturity of the indebtedness secured by this Deed of Trust.

11. Remedies Cumulative. All remedies provided in this Deed of Trust are distinct and cumulative to any other right or remedy under this Deed of Trust, the Note, the Loan Agreement or afforded by law or equity, and may be exercised concurrently, independently or successively.

RVP Group – HAF Deed of Trust and Assignment of Rents Page 4

12. Successors and Assigns Bound; Joint and Several Liability Captions . The covenants and agreements contained in this Deed of Trust shall bind, and the rights under this Deed of Trust shall inure to, the respective successors and assigns of Lender and Borrower, subject to the provisions of Section 15. All covenants and agreements of Borrower shall be joint and several. The captions and headings of the paragraphs of this Deed of Trust are for convenience only and are not to be used to interpret or to define its provisions.

13. Notice. Except for any notice required under applicable law to be given in another manner, any notice to be given under this Deed of Trust shall be given as provided for in the Loan Agreement. Any notice provided for in this Deed of Trust shall be deemed to have been given to Borrower or Lender when given in the manner designated.

14. Governing Law; Severability. This Deed of Trust shall be governed by the law of the State of California.

If any term or provision of this Deed of Trust shall, to any extent, be held invalid or unenforceable, the remainder of this Deed of Trust shall remain in full force and effect and the invalid or unenforceable provision shall be valid and enforceable as to any other person or circumstance.

15. Acceleration on Transfer or Refinancing of the Property; Assumption. Except as otherwise provided in the Loan Agreement, if all or any part of the Property or an interest in the Property is sold or transferred or refinanced by Borrower without Lender's prior written consent, Lender may, at Lender's option, declare all the sums secured by this Deed of Trust to be immediately due and payable. Lender shall have waived such option to accelerate if, prior to the refinancing, sale or transfer, Lender and the person to whom the Property is to be sold or transferred reach agreement in writing that the loan ma y be assumed. If Lender has waived the option to accelerate provided in this Section and if Borrower's successor in interest has executed a written assumption agreement accepted in writing by Lender, Lender shall release Borrower from all obligations under this Deed of Trust and the Note.

If Lender exercises such option to accelerate, Lender shall mail Borrower notice of acceleration. Such notice shall provide a period of not less than 30 days from the date the notice is mailed within which Borrower, or any of its principals or anyone with a substantial legal interest in Borrower, may pay the sums declared due. If Borrower fails to pay such sums prior to the expiration of such period, Lender may, without further notice or demand on Borrower, invoke any remedies permitted by this Deed of Trust.

16. Acceleration on Breach; Remedies . Except as provided in Section 15, upon Borrower's breach of any covenant or agreement of Borrower in this Deed of Trust, the Note, (including the covenants to pay when due any sum s secured by this Deed of Trust and restricting transfer of the Property) the Regulatory Agreement, or Loan Agreement, Lender shall mail notice to Borrower specifying: (1) the breach; (2) the action required to cure such breach; (3) a date, no less than 3 0 days from the date the notice is mailed to Borrower, by which breach must be cured; and (4) that failure to cure such breach on or before the date specified in the notice may result in acceleration of the sums secured by this Deed of Trust and sale of th e Property. If the breach is not cured on or before the date specified in the notice, Lender at Lender's option may declare all of the sums secured by this Deed of Trust to be immediately due and payable without further demand and may invoke the power of sale and any other remedies permitted by applicable law. Lender shall be entitled to collect from the Borrower, or sale proceeds, if any, all reasonable costs and expenses incurred in pursuing the remedies provided in this Section, including, but not limited to reasonable attorney's fees.

If Lender invokes the power of sale, Lender shall execute or cause Trustee to execute a written notice of the occurrence of an event of default and of Lender's election to cause the Property to be sold and shall cause such notice to be recorded in each county in which any portion of the Property is located. Lender or Trustee shall mail copies of such notice in the manner prescribed by applicable law to Borrower and to the other persons prescribed by applicable law. Trustee shall give public notice of sale to the persons and in the manner prescribed by applicable law. After the lapse of such time as may be required by applicable law, Trustee, without demand on Borrower, shall sell the Property at public auction to the hi ghest bidder at the time and place and under the terms designated in the notice of sale, in one or more parcels and in such order as Trustee may determine. Trustee may postpone sale of all or any parcel of the Property by public announcement at the time and place of any previously scheduled sale. Lender or Lender's designee may purchase the Property at any sale.

RVP Group – HAF Deed of Trust and Assignment of Rents Page 5

Trustee shall deliver to the purchaser a Trustee's deed conveying the Property so sold without any covenant or warranty, expressed or implied. The recitals in the Trustee's deed shall be prima facie evidence of the truth of the statements it contains. Trustee shall apply the proceeds of the sale in the following order :
(a) to all reasonable costs and expenses of the sale, including, but not limi ted to, reasonable Trustee's and attorney's fees and costs of title evidence; (b) to all sums secured by this Deed of Trust; and (c) the excess, if any, to the person or persons legally entitled thereto as determined by Lender. In the event of a dispute regarding the excess funds, either Lender or Trustee may file an action in interpleader to determine who shall receive the funds and may then deposit the excess funds with the court.

17. Assignment of Rents; Appointment of Receiver; Lender in Possession. As additional security, Borrower assigns to Lender the rents of the Property, provided that Borrower shall, prior to an acceleration for breach as provided above or abandonment of the Property, have the right to collect such rents as they become due.

Upon acc eleration for breach or abandonment of the Property, Lender, in person, by agent or by judicially appointed receiver shall be entitled to enter upon, take possession of and manage the Property and to collect the rents of the Property including those past due. All rents collected by Lender, its agent, or the receiver shall be applied first to payment of the costs of management of the Property and collection of rents, including, but not limited to receiver's fees, premiums on receiver's bonds and reasonable attorney's fees, and then to the sums secured by this Deed of Trust. Lender, its agent and the receiver shall be liable to account only for those rents actually received.

18. Prior Lienholder . The provisions of this Deed of Trust shall operate subject to t he claims of prior lienholders to the extent of such claims.

19. Nonrecourse. Notwithstanding any provision of this Deed of Trust or any document evidencing or securing the Loan, Borrower, and Borrower’s principals, agents, officers, and successors in interest shall not be personally liable for the payment of the Loan or any obligation of the Loan, and in the event of a default Lender shall look solely to the Property subject to this Deed of Trust and to the rents, issues and profits thereof in satisfaction of the indebtedness evidenced by the Note; provided, that nothing in this condition and no action so taken shall operate to impair any obligation of Borrower under the Regulatory Agreement.

20. Reconveyance. Upon payment of all sums secured by this Deed of Trust, Lender shall request Trustee to reconvey the Property and shall surrender this Deed of Trust and all notes evidencing indebtedness secured by this Deed of Trust to Trustee. Trustee shall reconvey the Property without warranty and without charge to the person or persons legally entitled to such reconveyance. Such person or persons shall pay all costs of recordation, if any. The recitals in the reconveyance of any matters or facts shall be conclusive proof of their truthfulness.

21. Substitute Trustee. Lender, at Lender's option, may from time to time remove Trustee and appoint a successor trustee to any Trustee appointed under this Deed of Trust. Without conveyance of the Property, the successor trustee shall succeed to all the title, power and duties conferred upon the Trustee by this Deed of Trust and applicable law.

22. Request for Notice. Borrower and each party listed to receive Additional Notices request that copies of the notice of default and notice of sale be sent to their respective addresses.

23. Statement of Obligation. Lender may collect a reasonable fee for furnishing the statement of obligation as provided by Section 2943 of the Civil Code of California, as it may be amended from time to time.

24. Use of Property . Borrower shall not permi t or suffer the use of any of the Property for any purpose other than the use for which the same was intended at the time this Deed of Trust was executed.

Code of 1986, as amended (“Code”)) (“E xtended Use Agreement”). Lender acknowledges and agrees that, in the event of a foreclosure of its interest under this Deed of Trust or delivery by Borrower of a deed in lieu thereof (collectively, a “Foreclosure”), Lender expressly agrees to undertake, wi th respect to low -income housing tenants, the requirements of Section 42(h)(6)(E)(ii) of the Code , as amended from time to time.

IN WITNESS WHEREOF, Borrower has executed this Deed of Trust.

BORROWER (Trustor):

RVP Group LP, a California limited partnership

By: RVP Group LLC, a California limited liability company, its managing general partner

By: Sacramento Housing Authority Repositioning
Program, Inc., a California nonprofit public
benefit corporation, its sole member and manager

By: _____________________________
James Shields, President

Exhibit 5: Regulatory Agreement
NO FEE DOCUMENT:

Entitled to free recording
per Government Code §§6103 & 27383.

When recorded, return to:

SACRAMENTO HOUSING AND REDEVELOPMENT AGENCY
801 12th Street, 4th Floor
Sacramento, CA 95814
Attn: Portfolio Management

HAF REGULATORY AGREEMENT FOR RESIDENTIAL RENTAL PROPERTY

AND DECLARATION OF RESTRICTIVE COVENANTS AFFECTING REAL PROPERTY

PROJECT NAME: RVP Group
PROJECT ADDRESS: 600 I Street, Sacramento, 95814
APN: 006-0032-029-001, 006 -0032-029-002, 006-0032-029- 003, 006-0032-028-004

OR GOOD AND VALUABLE CONSIDERATION, THE RECEIPT OF WHICH IS ACKNOWLEDGED , AGENCY AND OWNER

HAVE ENTERED THIS REGULATORY AGREEMENT AND DECLARATION OF RESTRICTIVE COVENANTS AFFECTING REAL PROPERTY (REGULATORY AGREEMENT) AS OF THE EFFECTIVE DATE.

1. GENERAL. This Regulatory Agreement includes the Exhibits listed below which are attached to and incorporated in this Regulatory Agreement by this reference.

2. DEFINITIONS. The capitalized terms in this Regulatory Agreement shall have the meanings assigned in the following table and in the body of this Regulatory Agreement as the context indicates. Terms being defined are indicated by quotation marks.

TERM DEFINITION
“Effective Date” This Regulatory Agreement shall be effective as of the following date: ***TBD*** “Agency” Housing Authority of the City of Sacramento (HACS) a public body, corporate and politic
“Agency Address” Agency’s business address is 801 12th Street, Sacramento, California 95814 “Owner” RVP Group LP, a California limited partnership
“Owner Address” Owner’s business address is as follows: 801 12th Street, Sacramento, CA 95814 “Jurisdiction” City of Sacramento
“Property”
That certain real property which is subject to this Regulatory Agreement as further described in the legal description, attached as Exhibit 1 - Legal Description of the Property and incorporated in this Regulatory Agreement by this reference
“Funding
Agreement”
The Funding Agreement between
Agency and Owner as follows:

Titled: HAF Construction and Permanent Loan
Agreement
Dated: ***TBD***
“Agency Funding” Agency Funding made by Agency to Owner under the Funding Agreement for development of the Property
“Agency Funding
Amount“
The amount of Agency Funding, as follows: $990,000.00
“Proportionate
Agency
Assistance”
The percentage of the Project cost, including without limitation, land, predevelopment and development costs, that is attributable to Agency Funding. For rehabilitation projects, the percentage that Agency Funding bears to the total of the fair market value of the Property before rehabilitation and the total costs of rehabilitation.
34%
RVP Group – HAF Regulatory Agreement Page 2
“Funding
Requirements”
The legal restrictions on the use of the funds that Agency has used to make Agency Funding, as applicable to and restricting the Property. The Funding Requirements are set out in Exhibit 2 - Funding Requirements.
“Approved Use” The only permitted use of the Property, which is as a residential property available for rent by the general public and containing not less than the following number of units:
183

3. RESTRICTED PARCELS; APPROVAL OF LEASES. In order to assure that the proper number and types of units have been rented in accordance with this Regulatory Agreement, Owner is prohibited from leasing any Unit within the Project until either the parties have recorded against the Property a list of the Restricted Units or Agency has approved the individual lease or lease form for the Restricted Units. The following numbers of units are restricted for each respective funding source. The initial rents for the Restricted Units shall be the following; provided, however, that upon the request of Owner, Owner and Age ncy may agree to a schedule for the Restricted Units that complies with the following affordability requirements as of the date when the Project is available for occupancy. In any event the rents for the Restricted Units may be adjusted not more often tha n annually. The rents shall include allowance for utilities and costs reasonably related to the rental of the Restrictive Units, as may be required in determining the rents for the applicable funding sources. Only Restrictive Units indicated under Agency Funding Source are assisted by Agency. Nevertheless, Owner shall assure the affordability of all of the following Restrictive Units at the named affordability levels.

4. R
ESTRICTIVE UNITS. Restrictive Units with HAF as its funding source are fixed units if referenced by Apartment Number or equivalent; otherwise such units are "floating units" in which the number of units of an affordability level and bedroom type remains the same, but the actual designated unit may change from time to time. Notwithstanding any conflicting provision in the Funding Requirements, the Initial Rent per Unit per Month listed in this Regulatory Agreement shall be paramount and controlling.

Agency Funding
Source: Affordability Level: Number of
Units: Restricted Units:

Initial Rent
per Unit per
Month:

Housing Authority
Funds (“HAF”)
50% 4 1-Bedroom $1013.75
HAF 70% 2 1-Bedroom $1420.00

5. MANAGEMENT AGREEMENT. Owner agrees that at all times the Project shall be managed by a property manager (i) approved by Agency in its reasonable discretion and (ii) who has successfully managed at least five projects over forty units in size and subject to a recorded regulatory agreement for at least three years’ prior to the application, without any record of material violations of discrimination restrictions or other state or federal laws or regulations or local governmental requirements applicable to such projects (the “Manager”). Owner shall submit to Agency from time to time such information about the background, experience and financial condition of any existing or proposed Manager as Agency may reasonably require to determine whether such Manager meets the requirements for a Manager set forth herein. Agency reserves the right to conduct periodic reviews of the management pract ices and of the Manager to determine if the Project is being operated and managed in accordance with the requirements and standards of this Regulatory Agreement and the Funding Agreement. Owner agrees to cooperate with Agency in such reviews.

If Agency determines in its reasonable judgment that the Project is not being operated and managed in accordance with one or more of the requirements or standards of the Funding Agreement, Agency may deliver notice to Owner requesting replacement of the Manager, which notice shall state clearly the reasons for such request. Owner agrees that, upon receipt of such notice, Owner shall within 60 days submit to Agency, a proposal to engage a new Manager meeting the requirements of this provision. Agency shall respond within 30 days to such proposal or such approval shall be deemed given. Upon receipt of such consent or deemed consent, Owner shall promptly terminate the existing Manager’s engagement and engage the new Manager.

Owner shall not enter into any management agreement or arrangement with any party with respect to the management of the Project without Agency's prior written consent, such consent not to be unreasonably withheld or delayed. Owner shall not materially modify, amend or terminate any approved management agreement (other than as required to comply with the terms of the Funding Agreement and/or applicable law) without Agency's prior written consent, which consent RVP Group – HAF Regulatory Agreement Page 3
will not be unreasonably withheld or delayed; provided, however, that such consent s hall not be required to extend the term of an existing management agreement.

Approved Management Company
Housing Authority of the City of Sacramento

6. SPECIAL PROVISIONS. Owner shall also comply with the following special provisions.

Provision Term
None N/A

7. REPRESENTATIONS. Agency has provided Agency Funding to Owner to develop the Property, subject to the terms of the Funding Agreement. 7, “Property” shall mean Property or Restricted Unit as the context may indicate. This Regulatory Agreement is a substantial part of the consideration to Agency for making Agency Funding. The funds used by Agency under the Funding Agreement are funds from public funding sources administered by Agency and their use is subject to certain requirements some of which are embodied in this Regulatory Agreement. Further, Agency has made Agency Funding in accordance with the laws, rules and regulations to which Agency is subject. Therefore, Agency has made Agency Funding conditioned upon Owner’s agreement, for itself and its successors and assigns, to comply with all provisions of this Regulatory Agreement, including without limitation, the Funding Agreement. Owner represents that it has had full opportunity to make itself independently familiar with such limitations and restrictions, and Owner accepts them and agrees to comply fully with them.

8. C
OVENANTS. Owner makes the following covenants. Unless Owner has received the prior written consent or Agency approval otherwise, Owner shall fully comply with each and every covenant. Except as otherwise stated in this Regulatory Agreement, the following covenants shall have a term that is the same as the longest term specified in the Funding Requirements.

a. Owner shall use and permit others to use the Property only for the Approved Use.

b. Owner shall ensure full compliance with the Funding Requirements.

c. Owner shall not convey, transfer, hypothecate, or otherwise encumber any of the Property or permit the conveyance, transfer, hypothecation, or encumbrance of the Property unless such assignee, transferee, beneficiary, or encumbrancer has agreed, in writing and in a form suitable for recordation, to be bound by the terms of this Regulatory Agreement.

d. Owner shall not cause and shall not permit expansion, reconstruction, or demolition of any part of improveme nts on the Property, except as provided by the Funding Agreement.

e. Owner shall maintain the Property and all building improvements, grounds and equipment of the Property in good repair and condition and in compliance with all applicable housing quality standards and local code requirements. Owner shall maintain the Property in good condition and shall keep the Property reasonably free from graffiti and unrepaired vandalism and from accumulation of abandoned property, inoperable vehicles, unenclosed storage, debris, waste materials, and hazardous substances. In the event of a casualty loss, Owner shall cause the restoration or replacement of the Property, in a timely manner and provided that such restoration or replacement is then economically feasible.

f. Owner shall not cause and shall not permit discrimination based on race, color, national origin, religion, sexual orientation, gender, familial status, age or disability in the sale, lease, or rental or in the use or occupancy of the Property.

Owner covenants by and for him/her/itself, his/her/its heirs, executors, administrators, and assigns, and all persons claiming under or through them that there shall be no discrimination against or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the Property. This covenant against discrimination shall continue in perpetuity.

g. Owner shall not evict, refuse to rent to, or otherwise treat someone differently because of that person’s status as a victim of domestic violence, dating violence, sexual assault, or stalking, in compliance with the Violence Against Women Act. This protection is available regardless of sex, gender identity, or sexual orientation.

RVP Group – HAF Regulatory Agreement Page 4

h. Owner shall ensur e compliance with the obligations imposed by the federal Personal Responsibility and Work Opportunity Act (Public Law 104-193, commonly known as the Welfare Reform Act) as amended by California Welfare and Institutions Code Section 17851, which restrict Agency funding of federal, state or local benefits to persons who are not citizens or qualified aliens as defined in such act.

i. Owner shall provide Agency with a detailed resident services plan including but not limited to the following information: (1) identification of all entities responsible for providing resident services to Project tenants and each entity’s role in the provision of those services; (2) a description of the services to be provided; (3) a resident services budget and proforma; and (4) Agency approved resident services at the Project according to the following minimum schedule of forty (40) hours per week:

1) Service Coordinator (including case management): fifteen (15) hours per week as follows:
a) Two and a half (2.5) hours per week at Big Trees
b) Two and a half hours (2.5) per week at Pine Knoll
c) Ten hours (10) per week at Riverview Plaza

2) Services of twenty-five (25) hours per week are to be provided and to include, but are not limited to:
a) Educational classes
i) One (1) hour per week at Big Trees
ii) One (1) hour per week at Pine Knoll
iii) Four (4) hours per week at Riverview Plaza
b) Enrichment Activities
i) One (1) hour per week at Big Trees
ii) One (1) hour per week at Pine Knoll
iii) Four (4) hours per week at Riverview Plaza
c) Senior Activities
i) Two (2) hours per week at Big Trees
ii) Two (2) hours per week at Pine Knoll
iii) Nine (9) hours per week at Riverview Plaza

j. Owner shall not pass utility charges paid by Owner, including water, sewer, and garbage collection charges, through to tenants as an add-on to their contracted rent subject to adjustments permitted by applicable utility allowances.

k. Owner shall not make payment of rental insurance premiums a condition of occupancy. If Owner require renters’ insurance, the policy premium must be deducted from the tenant’s rent. Owner shall not add the insurance premium to the tenant’s rent in either the initial or subsequent years.

l. Owner shall make all of the units, indoor common areas and buildings smoke free.

9. N
ATURE OF COVENANTS. The provisions contained in this Regulatory Agreement are covenants which subject and burden the Property, as covenants running with the land. It is intended and agreed that the agreements and covenants provided in this Agreement shall be covenants running with the land and equitable servitudes on the land and that they shall, in any event, and without regard to technical classifications or designation, be binding, to the fullest extent permitted by law and equity, for the benefit and in favor of, and enforceable by, Agency, Agency's s uccessors and assigns, any other governmental entity acting within its authority and any successor in interest to Agency's interest under this Regulatory Agreement against Owner, its successors and assigns and every successor in interest to all or any part of the Property.

10. TERM. The term of this Regulatory Agreement shall commence on the Effective Date and continue until the terms of all of the covenants, including without limitation, the terms stated in the Funding Requirements, have expired or otherwise been terminated. Notwithstanding the term in the Funding Requirements, the term of this Regulatory Agreement shall be Forty-Five (45) years from the Effective Date.

RVP Group – HAF Regulatory Agreement Page 5

11. EXPIRATION OF AFFORDABILITY PERIOD. Owner agrees the rent of "in-place” tenants at the conclusion of the Term will continue to be governed by the applicable affordability restrictions, so long as those tenants continue to live in the development.

12. M
ULTIPLE FUNDING REQUIREMENTS. If more than one form of Funding Requirements is attached, each Restricted Unit shall be subject to the Funding Requirements for every Funding Source applied to the respective Restricted Unit. If the terms of the Funding Requirements shall conflict as to any Restricted Unit, the Funding Requirements shall be construed so as to meet all applicable requirements for the respective Restricted Unit, including without limitation the use of the most restrictive requirements and the use of the “Recapture” formula that results in the greatest repayment to Agency.

13. R
ECORDKEEPING AND REPORTING. Upon request of Agency, Owner shall promptly provide any additional information or documentation requested in writing by Agency to verify Owner's compliance with the provisions of this Regulatory Agreement. At the written request of Agency, Owner shall, within a reasonable time following receipt of such request, furnish reports and shall give specific answers to questions upon which information is desired from time to time relative to the income, assets, liabilities, contracts, operations, and condition of the property and the status of any deeds of trust encumbering the Property.

14. A
UDIT AND INSPECTION. The Property and all related equipment, buildings, plans, offices, books, contracts, records, documents and other related papers shall at all times be maintained in reasonable condition for audit and shall be subject to examination by Agency or its agents. The books and accounts of the operations of the Property shall be kept in accordance with generally accepted accounting principles. Owner shall provide Agency access to the Property and its tenants during reasonable hours for the purpose of reviewing Owner’s compliance with this Regulatory Agreement.

15. INDEMNITY FOR OWNER’S FAILURE TO MEET LEGAL REQUIREMENTS. Owner shall indemnify and hold Agency, its officers, directors, and employees harmless from any and all liability arising from Owner’s failure to comply with the covenants, conditions and restrictions contained in this Regulatory Agreement or to comply with all other laws, rules, regulations and restrictions related to the use of Agency Funding. Without limitation, such indemnity shall include repayment to the appropriate parties of rents or sales proceeds in excess of amounts authorized to be charged and repayment to Agency of the cost s of funds and the value of lost opportunities resulting from the required repayment by Agency to the funding source of funds improperly used.

16. C
HANGES WITHOUT CONSENT OTHERS. Only Agency and its successors and assigns, and Owner (subject to the reasonable approval of Owner's lender) shall have the right to consent and agree to changes in, or to eliminate in whole or in part, any of the covenants or restrictions contained in this Regulatory Agreement without the consent of any easement holder, licensee, other mortgagee, trustee, beneficiary under a deed of trust or any other person or entity having any interest less than a leasehold in the Property.

17. D
EFAULT. Upon a breach of any of the provisions of this Regulatory Agreement by Owner, Agency may give written notice of such breach to Owner by registered or certified mail. If such violation is not corrected to the satisfaction of Agency within thirty (30) days after the date such notice is mailed or within such further time as Agency may determine in its sole and absolute discretion is necessary to correct the breach, and without further notice to Owner, Agency may declare a default under this Agreement, effective on the date of such declaration of default, and upon such default Agency may: (a) take any act ion then available under the Funding Agreement for a default under the Funding Agreement; (b) apply to any court for specific performance of this Regulatory Agreement, (c) apply to any court for an injunction against any violation of this Agreement; (d) ap ply to any court for the appointment of a receiver to take over and operate the Property in accordance with the terms of this Regulatory Agreement, (e) apply to any court for money damages; or (f) apply to any court or other tribunal for such other relief as may be appropriate. The parties agree the injury to Agency arising from a default under any of the terms in this Regulatory Agreement would be irreparable, and the amount of damage would be difficult to ascertain.

18. R
EGULATORY AGREEMENT VIOLATIONS. Owner shall pay the program compliance fees and expenses to Agency set forth in Compliance Violations and Actions (Exhibit 3 - Compliance Violations and Actions) in reimbursement of the amounts and time expended by Agency to insure Owner’s compliance with Sta te statutes and federal regulations and Owner’s obligations under this Regulatory Agreement as a result of Owner not meeting its obligations and reporting requirements. No compliance fee will be assessed for one incident of each type of compliance violatio n per annual RVP Group – HAF Regulatory Agreement Page 6
inspection provided the violation is corrected within the specified corrective time period. The second and subsequent violations will be assessed compliance fees as detailed in the Compliance Violations and Actions tables.

19. BINDING SUCCESSORS IN INTEREST. This Regulatory Agreement shall bind and the benefits shall inure to Owner, its successors in interest and assigns, and to Agency and its successors for the term of this Regulatory Agreement.

20. CONTRADICTORY AGREEMENTS. Owner warrants that it has not, and will not, execute any other agreement with provisions contradictory of or in opposition to, the provisions of this Regulatory Agreement, and that, in any event, to the extent permitted by law, the requirements of this Regulatory Agreement are paramount and controlling as to the rights and obligations set forth and supersede any other requirements in conflict with this Regulatory Agreement.

21. COMPLIANCE AMENDMENTS. If revisions to the provisions of this Regulatory Agreement are necessitated to comply with the laws or regulations governing Agency Funding, Owner agrees to execute modifications to this Regulatory Agreement that are needed to comply with such laws or regulations.

22. A
TTORNEYS' FEES. If the services of any attorney are required by any party to secure the performance of this Regulatory Agreement or otherwise upon the breach of default of another party, or if any judicial remedy or mediation is necessary to enforce or interpret any provision of this Regulatory Agreement or the rights and duties of any person in relation to this Regulatory Agreement, the prevailing party shall be entitled to reasonable attorneys' fees and costs in addition to any other relief to which such party may be entitled. Any award of damages followi ng judicial remedy or arbitration as a result of this Regulatory Agreement or any of its provisions shall include an award of prejudgment interest from the date of the breach at the maximum amount of interest allowed by law. The prevailing party shall mean the party receiving an award in arbitration or a judgment in its favor, unless the award or judgment is less favorable than the best settlement offered in writing in a reasonable manner by the other party, in which case the prevailing party is the other party.

23. S
EVERABILITY. The invalidity or unenforceability of any clause, part or provision of this Regulatory Agreement shall not affect the validity of the remaining portions.

24. E
LECTION OF REMEDIES. To the extent applicable, in the event of any breach of any covenant, condition or restriction contained in this Regulatory Agreement, Agency shall reasonably endeavor to remedy such breach by conference and conciliation. If, in the opinion of Agency, Agency and Owner are unable mutually to agree upon a suitable remedy or the circumstances so warrant, such breach may be enjoined or abated by appropriate proceedings brought by Agency.

Agency may institute or prosecute in its own name, any suit Agency may consider advisable in order to compel performance of any obligation of any owner to develop and maintain the subject property in conformity with this Regulatory Agreement and to remedy any default of this Regulatory Agreement. Agency may also seek a decree requiring removal of any improvements constructed on t he Property which improvements are designed for uses not permitted under this Regulatory Agreement and which improvements are unsuitable only for uses not permitted under this Regulatory Agreement.

The remedies of Agency under this Regulatory Agreement ar e cumulative, and the exercise of one or more of such remedies, including, without limitation, remedies under the Funding Agreement shall not be deemed an election of remedies and shall not preclude the exercise by Agency of any one or more of its other re medies.

25. N
O WAIVER. No waiver by Agency of any breach of or default under this Regulatory Agreement shall be deemed to be a waiver of any other or subsequent breach or default.

26. N
OTICES. Written notices and other written communications by and between the parties shall be addressed to Owner at Owner’s Address and to Agency at Agency Address or such other address as each respective party has designated by written notice to the other party.

RVP Group – HAF Regulatory Agreement Page 7
THE PARTIES HAVE EXECUTED THIS REGULATORY AGREEMENT in Sacramento, California as of the Effective Date

OWNER :

RVP Group LP, a California limited partnership

By: RVP Group LLC, a California limited liability
company, its managing general partner

By: Sacramento Housing Authority
Repositioning Program, Inc., a
California nonprofit public benefit
corporation, its sole member and
manager

By: _____________________________
James Shields, President

AGENCY:

OUSING AUTHORITY OF THE CITY OF

SACRAMENTO,

A PUBLIC BODY, CORPORATE AND POLITIC

BY: _______________________________________

LA SHELLE DOZIER, EXECUTIVE DIRECTOR

A
PPROVED AS TO FORM:

___________________________________________

LENDER COUNSEL

Exhibit 5: Regulatory Agreement
Exhibit 3: Compliance Violations and Actions

Compliance Violations and Actions

COMPLIANCE VIOLATIONS AND ACTIONS
(All payments due and payable within 30-days of assessment)

Tenant Eligibility and Affordability Violations
Compliance
Violation
Fees and Actions* Corrective Time Period
Tenants over income
at
initial move-in
Initial $500 per unit, again every 90 days
until another income qualified tenant is
housed.

Correction: Evict tenant if tenant fraud.

Otherwise, next available unit must be
Affordable and rented to an Income-
Qualified tenant.
90 days from discovery date to avoid additional
$500 charge every 90-days the problem is not
corrected.

Incorrect eligibility
documentation
Initial $50 per file for incorrect
calculations, verifications, or required
documents. Additional $50 per month if
not corrected.

Correction: Submit copies of corrections
to compliance staff as applicable.
30 days from discovery date to submit copies of
corrections to compliance staff to avoid additional
$50 per month if not corrected
Failure to complete
annual
recertifications
Initial $250 for each incomplete file.

Additional $50 per month if not corrected.

Correction: Submit copies of
recertifications to compliance staff.
30 days from discovery date to submit corrections
to avoid additional $50 per month if not
corrected.

Failure to maintain
tenant eligibility
records
Initial $500 per unit, again every 90-days
thereafter until new records in place.

Additional $100 per unit per month the
project remains out of compliance.

Correction: Immediately establish new
files/records.
30 days from discovery date to submit copies of
new records to avoid additional $100 per unit per
month the project remains out of compliance.

Incorrect Rents Reimbursement to tenant of the entire
amount overcharged. $100 payment to
Agency for each over-charged unit.

Correction: Refund tenant with letter of
correction.
30 days from discovery date to avoid additional
$100 per overcharged unit per month fee to
Agency.

Failure to submit
complete and
accurate monthly
Bond Report by due
date
Initial $100 per report. Additional $100
per day until complete and accurate report
submitted. Correction: Submit copies of
corrections to compliance staff as
applicable.
7 days from discovery date to submit complete
and accurate report to avoid additional $100 per
day charge.

Failure to comply
with approved
Management Plan
Initial $100 per report. Additional $100
per day until complete and accurate report
submitted. Correction: Submit copies of
corrections to compliance staff as
applicable.
30 days from discovery date to submit corrections
to avoid additional $100 per day charge.

Failure to submit
complete and
accurate quarterly
Resident Services
report by due date
Initial $100 per report. Additional $100
per day until complete and accurate report
submitted. Correction: Submit copies of
corrections to compliance staff as
applicable.
7 days from discovery date to submit corrections
to avoid additional $100 per day charge.

RVP Group – HAF Regulatory Agreement Page 2
Failure to provide a
resident service
required by Resident
Services Plan
Initial $250 per service. Additional $100
per day until service is provided.

Correction: Implement required service or
new resident services plan submitted and
approved; approved plan implemented.
7 days from discovery date to implement required
service or provide new resident services plan to
avoid additional $100 per day charge; 30 days
from discovery date to implement new plan to
avoid additional $100 per day charge.

Noncompliant lease $100 per noncompliant lease.

Correction: Prepare and execute approved
lease or addendum to address the
deficiency.
30 days from discovery date to avoid additional
$100 per noncompliant lease per month charge to
Agency.

Housing Quality Standards Violations
Compliance
Violation
Fees and Actions* Corrective Time Period
Verifiable existence
of Toxic Mold
$200 per unit. Additional $75 per day
charge each time efforts fall outside of
corrective timeframes.

Correction: Prepare and submit action plan
that addresses scope of work and timetable
to complete. Relocate tenant if necessary.

Obtain certified clearance that mold has
been abated and unit is safe to occupy
once again.
3-days from discovery date to submit action plan
to address. 10-days to relocate tenant if necessary.
30-days to obtain certification that unit is mold
free. $75 per day additional charge each time
efforts fall outside of these timeframes.

Broken pipes and
plumbing facilities
$200 per unit. Additional $75 charge per
day if not corrected.

Correction: Repair/replace as necessary
7-days from discovery date to avoid additional
$75 per day each day thereafter corrective action
not taken.

Smoke detectors not
working in the units
$200 per unit with non-functional smoke
detector. Additional $75 charge per day if
not corrected.

Correction: Replace batteries or non-
working unit within 24 hours.

Within 24 hours of discovery date to avoid $75
per day additional charge each day thereafter
corrective action not taken.

Windows with large
cracks or missing
glass
$200 per unit. Additional $75 charge per
day if not corrected.

Correction: Repair/replace as necessary.
7-days from date of discovery to avoid $75 per
day additional charge each day thereafter
corrective action not taken.

Infestation of roaches
or vermin
$200 per infested unit. Additional $75
charge per day if not corrected.

Correction: Letter from pest control
company verifying removal of pests with
paid invoice to compliance staff.
7-days from date of discovery to avoid $75 per
day additional charge each day thereafter
corrective action not taken.

Non-working heating
unit (Winter) or air
conditioning unit
(Summer)
$500 per nonworking unit. Additional $75
charge per day if not corrected. $75 re-
inspection fee if necessary to verify
problem corrected.

Correction: Repair/replace as necessary.

Within 24 hours of discovery date to avoid $75
per day additional charge each day thereafter
corrective action not taken.

Excessive amount
of urine/ feces
$200 per unit. Additional $75 charge per
day if not corrected.

Correction: Clean unit as necessary and
address problem as the lease allows.

Submit correction letter with
documentation to compliance staff.
7-days from date of discovery to avoid $75 per
day additional charge each day thereafter
corrective action not taken.

Excessive amount of
trash/garbage in the
unit
$75 per unit. Additional $75 charge per
day if not corrected.

Correction: Clean unit and send letter of
correction to compliance staff.
14-days from date of discovery to avoid an
additional $75 per day thereafter each day
corrective action not taken.

RVP Group – HAF Regulatory Agreement Page 3
Hazardous exterior
conditions
$500 for hazardous conditions. Additional
$75 charge per day if not corrected. $75
re-inspection fee.

Correction: Clean and/or repair as
necessary. Re-inspection to verify problem
addressed.
7-days from date of discovery to avoid $75 per
day additional charge each day corrective action
not taken.

Large holes
walls/ceiling
$100 per unit. Additional $75 charge per
day if not corrected.

Correction: Submit correction letter with
documentation to compliance staff.
30-days from date of discovery to avoid $75 per
day additional charge each day corrective action
not taken.

Non-Operable
Security Gate
$500 per non-working gate. Additional
$75 charge per day if not corrected. $75
re-inspection fee if necessary to verify
problem corrected.

Correction: Repair/replace as necessary.
7-days from date of discovery to avoid $75 per
day additional charge each day corrective action
not taken.

No Security Cameras
(if cameras required)
$250 per discovery. Additional $75
charge per day if not corrected. $75 re-
inspection charge to verify problem
corrected.

Correction: Replace cameras.
30-days from the date of discovery to avoid $75
per day additional charge each day thereafter
corrective action not taken.

Non-working
Security Cameras
$100 per camera per discovery.

Additional $75 charge per day if not
corrected. $75 re-inspection charge to
verify problem corrected. Correction:

Repair/replace as necessary.
7-days from date of discovery to avoid $75 per
day additional charge each day corrective action
not taken.

Non-working or non-
accessible
amenities/services
$100 per item per discovery. Additional
$75 charge per day if not corrected. $75
re-inspection charge to verify problem
corrected. Correction: Repair/replace as
necessary.
7-days from date of discovery to avoid $75 per
day additional charge each day corrective action
not taken.

* No compliance fee will be assessed for one incident of each type of compliance violation per annual inspection provided the violation is corrected within the specified corrective time period. The second and subsequent violations will be assessed compliance fees as detailed in the Tenant Eligibility and Affordability Violations and Housing Quality Standards Violations tables.

Exhibit 6: Escrow Instructions

JOINT ESCROW INSTRUCTIONS

FOR AGENCY LOAN

“Effective Date” May 1, 2023

Agency and Borrower execute these Escrow Instructions as of the Effective Date. This document, including attachments and any amendments and additions, shall constitute the joint escrow instructions of Agency and Borrower for the Agency loan secured by the Property.

A
RTICLE I. GENERAL TERMS.

1. GENERAL. These Escrow Instructions, in addition to items listed below, include Article II Instructions, which is attached to and incorporated in these Escrow Instructions by this reference.

“Title
Company”
Placer Title Company
Address: 1180 Iron Point Road, Suite 140, Folsom, CA 95630 “Escrow” with
Title Company
Escrow
Number:
***TBD***

Attention: Jenny Vega

“Agency” Housing Authority of the City of Sacramento, a public body, corporate and politic Address: 801 12th Street, Sacramento, CA 95814
Attention: Seth Wight
“Borrower” RVP Group LP
Address: 801 12th Street, Sacramento, CA 95814
Attention: Larry Jenkins
“Closing Date” ***TBD***
“Property” Address: Pine Knoll – 917 38th Street, Sacramento, 95816; Big Trees – 2516 H Street, Sacramento, 95816;
Riverview Plaza – 600 I Street, Sacramento, 95814
APN: Pine Knoll – 008-032-025-0000, 008-0032-032-0000, 008-0032-033-0000; Big Trees – 007-0033-007-0000;
Riverview Plaza – 006-0032-029-001, 006- 0032-029-002, 006 -0032-029-003, 006-0032-028-004
Description of
the transaction

Agency is providing Borrower with the following loans (aggregate $29, 104, 421.00):

1. Seller Carryback Loan - $28,114,421 made pursuant to the Sel ler Car ryback Loan Agreement, evidenced by Seller Carryback Note and secured by the Seller Carryback Deed of Trust; and

2. Housing Authority F unds (HAF) Loan - $990,000 made pursuant to the HAF Loan Agreement, evidenced by HAF Note, secured by the Seller Carryback Deed of Trust, and recorded against the Property, the HAF Regulatory Agreement to assure a certain level of rental affordability; and

3. Cash Proceeds Loan - $0.00 (as may be increased in accordance with the Special Terms) made pursuant to the Cash Proceeds Loan Agreement, evidenced by Cash Proceeds Note and secured by the Cash Proceeds Deed of Trust.

RVP Group – Joint Escrow Instructions Page 2
“Recorded Documents”- The
following documents are to be
recorded in the order liste d
(top being first in pr iority).

Copies o f th e Recorde d
documents are attached.

Documents:

1. Seller Carryback Deed of Trust

2. HAF Deed of Trust

3. HAF Regulatory Agreement

4. Cash Proceed Deed of Trust

Marked for return to:

Sacramento Housing and
Redevelopment Agency
Development Finance
801 12
th Street – 4th Floor
Sacramento, CA 95814
Attn: Seth Wight
“Agency Items” Promissory Note for subject loan
Loan Agreement for the subject loan
Escrow Instructions

“Borrower Items” Nine Hundred Ninety-Thousand Dollars and No Cents ($990,000.00) Conformed copies of the executed and recorded documents.

“Special Provisions”: Title Policy shall, i n a ddition to customary endorsements, bear the following endorsements:
• ALTA 9.6 and 9.7 (or CLTA 100) Covenants, Conditions or Restrictions • ALTA 25 (or CLTA 116) Improvements Endorsement
• ALTA 102.5 Foundation Endorsement
• CLTA 101.2 Mechanic’s Lien Endorsement
• ***TBD***

“Agency Title Policy” in the
form of an ALTA Agency’s
Policy insuri ng that the
following are valid liens
against the property:

Documents:

Coverage amount:

1. Seller Carryback Deed of Trust

2. HAF Deed of Trust

3. HAF Regulatory Agreement

4. Cash Proceed Deed of Trust
In the amount of the aggregate
loans secured ($29, 104, 421.00)
The title policies s hall be
subject only to the following
“Conditions of Title”:
***TBD*** Dated: May 1, 2023
Number: ***TBD***

RVP Group – Joint Escrow Instructions Page 3
ARTICLE II. INSTRUCTIONS

1. CLOSING DATE. Escrow shall close on or before the Closing Date as it may be changed from time t o time by written agreement of Borrower and Agency.

2. CONDITIONS TO CLOSE OF ESCROW. “Close of Escrow” means the fulfillment of the Escrow terms and conclusion of the Escrow, including, without limi tation, the exec ution of unexecuted documents, the recordation of documents s pecified for recording, the issuance of title insur ance policies, the payment of fees and the delivery of funds and documents as directed in the escrow instructions for the Escrow . The Close of Escrow shall occur on the Closing Date.

2.1. CONDITIONS. The following are conditions to the Close of Escrow:

2.1.1. The conditions precedent to performance stated in the Recorded D ocuments are satisfied as of the Closing Date.

2.1.2. Simultaneously with the Close of Es crow, Title Company shall issue the Agenc y Titl e Insurance to Agency (at Borrower’s c ost) in the amount stated. The Agency Title Insurance shall include all usual and custo mary endorsements and any endorsements and other commitments as Agency may reasonably require. The Agency Title Insurance s hall show the Record ed Documents marked for return to Agency as valid liens a gainst the Property in favor of the Agency, subject onl y to the Conditions of Title, and securing, as applicable, Borrower’s performance of its obligations and repayment of Agency Funding.

2.1.3. Prior to the Closing Date, the p arties shall duly execute ( in Escrow or prior to deposit in Escrow) each such document and shall execute those to be recorded in a manner suitable for recording.

2.1.4. On or before the Closing Date, Agency shall also depos it with Title Company the Borrower Items and any Loan Amount then to be disbursed under this Agreement, but not less than closing costs, fees and charges required for Close of Escrow.

2.1.5. On or bef ore the Close of Escrow, Borrower shall also deposit with Title Company the Agency Items and Borrower’s share of closing costs and fees.

2.1.6. Title Company is satisfied that all required funds have been deposited in Title Company’s account for the Escrow, have cleared the originating bank and are available for transfer by Title Company’s check or wire transfer to the appropriate party.

2.2. DEED OF TRUST FORM. If no exhibit setting out the form of the Deed of Trust form is attached, the Title Company shall draw the Deed of Trust on the Title Company’s Long Form Deed of Trust . Title Company sha ll assure that the Deed of Trust incl udes a st andard clause giving Agency the option to accelerate the Loan upon the sale, conveyance, transfer or further encumbrance of the Property, whether voluntary or involuntary. Title Company s hall also affix the f ollowing provision to the Deed of Trust and incorporate it in the Deed of Trust by reference:

“The Loan Agreement requires the filing of the “Regulat ory Agreement” that i s defined in the Loan Agreement. The Regulatory Agreement con tains covenants running with the land an d is recorded agai nst the Propert y. I f Borrower does not comply with the requirements of the Regulatory Agreement and fails to come into compliance with the Regulatory Agreement within thirty (30) days after Agency’ s written notice to Borrower of such fai lure, the principal balanc e of th e Loan shall, at Agency’s option, be immediately due a nd payable, together with all unpaid interest at the stated rate fr om the date of the advancement of the Loan's proceeds.”

RVP Group – Joint Escrow Instructions Page 4

2.3. UPON CLOSE OF ESCROW. The Close of Escrow sh all take place on the Closing Dat e. On the Closing Date, Title Company shall complete t he Close of Escrow as follows and in the following order (unless otherwise stated, all recorded documents are recorded with the Sacramento County Recorder):

2.3.1. Assure fulfillment of the Special Provisions;

2.3.2. Assure all documents are complete and affix legal d escriptions of the Property as necessary to complete them;

2.3.3. Obtain full execution of all unexecuted documents;

2.3.4. Date all undated documents as of the Closing Date;

2.3.5. Record the Recorded Documents in the priority listed;

2.3.6. Determine all closing costs and fees ; including without limitation, all charges, f ees, taxes and title insurance premiu ms payable under this Agreement on Close of Es crow and any other fe es and charges approved for payment f rom Escrow by bot h parties and deduct such fees from the Loan proceed s deposited by Agency in Escrow;

2.3.7. Deliver the Agency Items to Agency and the Borrower Items to Borrower; and

2.3.8. Prepare and d eliver to Borrower and Age ncy, respectively, one signed origina l of all documents included for delivery to either party and not deli vered for recording, one signed original of Ti tle Company's closing statement showi ng all receipts and disbursements of the Escrow, and one conformed copy of each of the recorded documents.

2.4. INABILITY TO CLOSE. If Title Company is unable to simultaneously perform all of the preceding instructions, Title Company shall noti fy Borrower and Agency, and upon each of their directions return to each party all documents, items an d funds deposited in Escro w by such party (les s fees and expenses incurred by the respective party) and bill the respective parties for any unpaid fees and expenses incurred in Escrow. If Escrow fails to close on th e Closing Date because Borrower has not complied with Borr ower's obligations under this Loan Agreement, then Borrower shall pay the costs incurred through Escrow to the date the Escrow is terminated, including the cost of any preliminary title report and a ny cancellation fees or other costs of t his Escrow. If Es crow fails to close on or before the Closing Date because Agency has not complied with Agency's obligations under t his Loan Agreement, s uch costs shall be paid by Agency. If Escrow fails to close on or before the Closing Date for any other reason, such co sts shall be divided equally between the parties.

2.5. COMMISSIONS. Agen cy is not responsible, by this Loan Agreement or otherwise, to pay commissions in relation to this transaction.

[SIGNATURES APPEAR ON THE FOLLOWING PAGE]
RVP Group – Joint Escrow Instructions Page 5
THE PARTIES HAVE EXECUTED THESE ESCROW INSTRUCTIONS in Sacramento, California as of the date first written above.

BORROWER :

RVP Group LP, a California limited
partnership

By: RVP Group LLC, a California limited
liability company, its managing general
partner

By: Sacramento Housing Authority
Repositioning Program, Inc., a
California nonprofit public benefit
corporation, its sole member and
manager

By:
_____________________________
James Shields, President

LENDER:

HOUSING AUTHORITY OF THE CITY OF

SACRAMENTO, A PUBLIC BODY,

CORPORATE AND POLITIC

BY: _______________________________________

LA SHELLE DOZIER, EXECUTIVE DIRECTOR

APPROVED AS TO FORM:

__________________________________________

LENDER COUNSEL

RVP Group – Joint Escrow Instructions Page 6

ACCEPTANCE OF ESCROW INSTRUCTIONS

Your acceptance of t his escro w shall create a contractual obl igation by you with Agenc y and Borrower for compl ete compliance wit h these instruction s. Agenc y and Borrower reserve the right to jointly revoke this escrow at any time upon their payment to you of your fees and reimbursement to you of your expenses in ac cordance with the terms o f the se e scrow instructions. Your obligat ions as Escrow Holder under these escrow instructions shall be subject to the following provisions:

You are not responsibl e as to the sufficie ncy or correctness as to form, manner of exec ution, or validity of any instrument deposited in this escrow nor as to the authority or rights of any person executing such instrument. Except as otherw ise provided in these escrow instructions, your duties as Escrow Holder are limited to the proper hand ling of monies and the pr oper safekeeping of inst ruments and other items received by y ou as Esc row Holder, and for the performance o f your obligations as specifically provided under these escrow inst ructions. Y ou are responsible for the sufficiency of any instruments or documents prepared by you for this escrow.

Borrower agrees to indemn ify and hold you harmless from damages incurre d as a result of your good faith and diligent performance of your duties under these escrow instructions.

Upon your accept ance of these escrow inst ructions, return the exe cuted counterparts of these escrow instructions to Agency and Borrower, respectively.

Escrow Holder acknow ledges receip t of the foregoing esc row inst ructions and agrees to ac t as Escrow Holder and to comply with the terms and conditions of the escrow instructions.

Dated: _____________________________

ITLE COMPANY
TBD

By: ______________________________
Name:____________________________
Title:_____________________________
Its authorized agent and signatory

RVP Group - HAF Loan Agreement Page 1
Exhibit 7: Funding Requirements

HOUSING AUTHORITY FUNDS
(TAX INCREMENT OR TI) FUNDING REQUIREMENTS

RENTAL PROJECT
These “TI Funding Requirements” are incorporated in the “Regulatory Agreement” to which they are attached. In turn, the Regulatory Agreement is incorporated in the Funding Agreement referenced in the Regulatory Agreement. Pursuant to the Funding Agreement, the Regulatory Ag reement (with these TI Funding Requirements) is recorded against the properties assisted with the “Agency Funding” provided under the Funding Agreement. [The capitalized terms used in these TI Funding Requirements shall have the meanings stated below. Terms being defined are indicated by quotation marks. Capitalized terms that are not defined in these TI Funding Requirements are defined in the Regulatory Agreement.] R
ECITALS. Agency is a redevelopment agency organized and operating under the California Comm unity Redevelopment Law (commencing at Health & Safety Code Section 33000).

Agency has provided the “Agency Funding” from proceeds of the “Housing Fund” (as defined in Health & Safety Code Section 33334.3) for the “Project Area” named in the Regulatory Agreement and Funding Agreement. The Agency Funding is subject to the provisions of the redevelopment plan for the Project Area and the California Community Redevelopment Law.

Agency has approved the Agency Funding on condition that the “Property” named in the Funding Agreement is rehabilitated or developed as the “Project,” as residential property for sale to owner -occupants, and that certain Project housing units are regulated in accordance with Health & Safety Code Section 33487. Such regulation is accom plished by recordation of the Regulatory Agreement with these TI Funding Requirements as covenants running with the land, in accordance with Health & Safety Code Section 33334.3(e). The purpose of such regulation is to make the regulated units affordable t o persons and households that qualify as moderate -income, low-income or very low -income, in accordance with Health & Safety Code Section 33334.2.

The development of the Project benefits and serves the Project Area, and the Project will provide housing for persons who work within the Project Area.

T
ERM. These covenants shall burden and regulate the Restricted Unit for forty-five (45) years.

AFFORDABILITY REQUIREMENTS. In consideration of Agency’s use of the Agency Funding to subsidize Owner’s purchase price for the Restricted Unit (“Owner’s Purchase Price”), the sale and rental of the Restricted Unit are restricted for the term of the Regulatory Agreement.

SALE. If Owner elects to sell the Restricted Unit (“Resale”), Owner shall assure that the Restricted Un its shall be sold for a price (“Resale Price”) or below the following “Affordable Price”:

1. Moderate-Income Restricted Units shall be sold for amounts, the payments for which do not exceed thirty- five percent (35%) of one hundred and ten percent (110%) the S acramento Metropolitan Statistical Area median income (“Median Income”), as determined annually by the federal Department of Housing and Urban Development, as adjusted for family size appropriate to the size and number of bedrooms in the respective Restricted Unit.

2. Low-Income Restricted Units shall be sold for amounts, the payments for which do not exceed thirty percent (30%) of seventy percent (70%) the Median Income as adjusted for family size appropriate to the size and number of bedrooms in the respective Restricted Unit.

3. Very Low-Income Restricted Units shall be sold for amounts, the payments for which do not exceed thirty percent (30%) of fifty percent (50%) the Median Income as adjusted for family size appropriate to the size and number of bedrooms in the respective Restricted Unit.

4. 4) Extremely Low-Income Restricted Units shall be sold for amounts, the payments for which do not exceed thirty percent (30%) of thirty percent (30%) the Median Income as adjusted for family size appropriate to the size and number of bedrooms in the respective Restricted Unit.

R
ENTAL. If Owner elects to rent a Restricted Unit, Owner shall rent the unit only at an “Affordable Rent” as determined in accordance with Health and Safety Code Section 50052.5. Owner shall be responsible to determine the Affordable Rent for

RVP Group - HAF Loan Agreement Page 2
the Restricted Units. Within ten (10) days of Owner request, Agency shall provide all information necessary for Owner to compute such Affordable Rent and will assist Owner in determining such amounts.

RVP Group – Seller Carryback Loan Agreement Page 1

SELLER CARRY-BACK LOAN AGREEMENT

RVP GROUP
___________________________________________________________________________________________________ ARTICLE I TERMS AND DEFINITIONS:
___________________________________________________________________________________________________ “EFFECTIVE DATE” May 1, 2023 Which is the date as of which this Loan Agreement shall be effective.

LENDER AND BORROWER HAVE ENTERED THIS LOAN AGREEMENT AS OF THE EFFECTIVE DATE. This Loan Agreement includes Article II Loan Provisions and the attachments and Exhibits listed below, all of which are incorporated in this Loan Agreement by this reference. The capitalized terms in this Loan Agreement shall have the meanings assigned in Article I Terms and Definitions and as defined in Article II Loan Provisions. (Terms being defined are indicated by quotation marks.

If an item in this Article I table is marked “None,” “Not Applicable,” “N/A” or equivalent or is left blank, that defined term is not applicable to this Loan Agreement or the referenced item is not required or is not included in this Loan Agreement, as the context may indicate.) Lender is making the Loan pursuant to the terms and conditions of this Loan Agreement.

NOW, THEREFORE, in consideration of their mutual promises, the parties agree as follows:

A. “Loan Information” The general loan provisions of the Loan “LENDER” The following public agency that is making the Loan, and whose legal status and address are:

Name Housing Authority of the City of Sacramento (HACS) Legal Status A public body, corporate and politic
Principal Address 801 12th Street, City of Sacramento, Sacramento County, California 95814 “BORROWER” The borrower of the Loan Proceeds whose name, legal status and address are:

Name RVP Group LP
Legal Status a California limited partnership
Principal Address 801 12th Street, Sacramento, CA 95814 “LOAN” The Loan made by this Loan Agreement.
“LOAN COMMITMENT” Lender’s loan commitment, made by letter dated as of June 14, 2022 “LOAN PROGRAM” Lender’s Loan Programs, commonly known as Seller Carryback “LOAN AMOUNT” Twenty-Eight Million One Hundred Fourteen Thousand Four Hundred Twenty-One Dollars and No Cents ($28,114,421.00)
“INTEREST RATE” The interest shall accrue at the Applicable Federal Rate (AFR) in effect on the accrual date, per annum, and compounded annually.
“MATURITY DATE” 57 years or 684 months from the date of closing. “PAYMENT SCHEDULE”
ANNUAL REPAYMENT: Annual principal and interest payments shall begin on May 1st following conversion to permanent financing. Annual payments will be made on a Residual Receipts basis, as defined below, until the maturity date. Annual payments shall be applied first to outstanding interest accrued and unpaid and then to principal. “Residual Receipts” is defined as follows: beginning from the Loan’s Effective Date, annual installments (as described in this paragraph) are to begin. Based on the annual audited financial statement from the preceding year, payments will be made upon a “Residual Cash Flow” basis meaning Net Operating Income (NOI) less:
i. to the Limited Partner for unpaid credit deficiency, taxes owed on taxable income allocated to the Limited Partner, and unpaid Investor Services Fees; ii. to re
plenish the operating reserve to required level;
iii. to the property manager for the cash flow portion of property management fee (if related manager);
Exhibit B
RVP Group – Seller Carryback Loan Agreement Page 2
iv. to the developer to pay off remaining deferred Development Fee; v. to
the General Partner to reimburse operating deficit contributions, to reimburse cost overrun contributions (at the Limited Partner’s sole reasonable discretion after tax analysis), and for Partnership Administration Fee (if applicable); v
i. to contingent loan payments with limits for each loan scheduled in the projections and in accordance with the loan documents;
v
ii. to a percentage to the General Partner accompanied by a special allocation of income of such amount and the remainder to the Limited Partner per Section B
a
bove
T
o the extent that insufficient Residual Cash Flow is available to pay any of the amounts set forth in Sections (i) through (vii) when due, such amount shall accrue and be payable in the future when there is available Residual Cash Flow, after prior payment of all higher priority payments from Residual Cash Flow, as set forth above.

T
he Net Operating Income is defined as periodic “Revenue” less “Operating Expenses.” “Revenue” means all revenue from the leasing of the Project, including but not limited to all rents, fees, and charges paid by tenants as well as rental subsidy payments regardless of the source of these subsidies, forfeited tenant deposits, rent increases, proceeds from vending machines and laundry room machines. Revenue shall not include tenants’ security deposits (unless forfeited), interest on those deposits, loan proceeds, capital contributions or similar advances, or amounts released from reserves or interest on reserves. “O
perating Expenses” shall mean actual costs, fees and expenses as evidenced by invoices attributable to the operation, recordkeeping, maintenance, taxes and management of the Project, including property management fees; taxes and assessments; payroll, benefits and payroll taxes of for property employees; insurance; security; painting, cleaning, repairs, and alterations; landscaping; sewer charges; utility charges; advertising, promotion and publicity; cable television, satellite and other similar services; office, janitorial, cleaning and building supplies; recreational amenities and supplies; purchase, repair, servicing and installation of appliances; costs and expenses associated with the provision of social and/or community services to the residents of the Project; equipment, fixtures and furnishing; fire alarm and elevator monitoring; fees and expenses of accountants, attorneys, consultants and other professionals. The definition will include deposits into operating and/or replacement reserves maintained by the Borrower but will not include initial deposits to capitalize the reserve accounts or amounts expended from a reserve account, or capital costs. “BORROWER EQUITY”
No Less Than Thirty-One Million
Five Hundred Eighty-One Thousand
Dollars and No Cents ($31,581,000)
Which is the minimum amount of cash or cash equivalent
(excluding land equity or other non-cash investment in the Project) that Borrower is investing in the Project.

No Less Than One Million Eight
Hundred Thousand Dollars and No
Cents ($1,800,000)
Which is Borrower’s non- cash contribution to the Project (such as deferred Developer fees).
“SPECIAL TERMS” N/A
B. “Collateral” The Collateral securing repayment of the Loan, which Collateral consists of the following “PROPERTY” The following described real property, which is security for the Loan:

A ddress
Pine Knoll – 917 38th Street, Sacramento, 95816;
Big Trees – 2516 H Street, Sacramento, 95816;
Riverview Plaza – 600 I Street, Sacramento, 95814
RVP Group – Seller Carryback Loan Agreement Page 3

Assessor’s Parcel
Number
Pine Knoll – 008-032-025-0000, 008-0032-032-0000, 008-0032-033-0000; Big Trees – 007-0033-007-0000;
Riverview Plaza – 006-0032-029-001, 006-0032-029-002, 006-0032-029-003, 006-0032-028-004 “Legal Description” The Property is situated in the State of California, County of Sacramento, and is more particularly described in Exhibit - Legal Description attached and incorporated by reference Borrower’s Title
Interest
Borrower has leasehold interest in the Property or, if the Additional Escrow Instructions so indicate, Borrower will acquire a leasehold interest in the Property at Close of Escrow. “ADDITIONAL
COLLATERAL”
The Additional Collateral securing repayment of the Loan is any additional security required by Lender under this Loan Agreement, including without limitation the following items, if any

“PERSONAL PROPERTY”
Borrower’s interest in the following personal
property, tangible and intangible, and all other such
property listed as security in this Loan Agreement

Materials and supplies for the Project,
Assigned Documents

OTHER ADDITIONAL
COLLATERAL Borrower’s interest in the following property: None

C. “ESCROW INFORMATION”:
“Title Company” and
“Escrow Agent” Placer Title Company Which is the title company that will issue the Title Policy and that will act as Escrow Agent for the Escrow
“Escrow” The escrow with Escrow Agent
“Closing Date” ***Closing Date*** Which is the date for close of the Escrow, as it may be extended

D. “LIST OF EXHIBITS” (The following are attached and incorporated in this Loan Agreement):

E. “APPROVAL DOCUMENTS” Borrower shall submit the following documents for Lender approval Construction Agreement for the Project
Architectural Agreement for the Project
Borrower’s organizational documents, such as partnership agreements or corporate articles and by -laws “Budget” for the Project
Evidence of financing as defined in this Loan Agreement Plans and Specifications as defined in this Loan Agreement Relocation Plan

F. “ASSIGNED DOCUMENTS” Borrower assigns the following documents to Lender Subject to the interests of any senior lender, any lease and rental agreements for the Property, or any part of it.

H. “SPECIAL PROVISIONS” The following special provisions shall be in addition to the provisions of this Loan Agreement

Loan funds shall be used solely for actual costs of Property construction and permanent financing. No Loan funds shall be used for predevelopment costs, except as provided in an approved Lender budget. Unless otherwise noted in the budget, predevelopment costs are not subject to withholding as Retention.

RTICLE II LOAN PROVISIONS

LENDER AND BORROWER HAVE ENTERED THIS LOAN AGREEMENT AS OF THE EFFECTIVE DATE. The capitalized terms in this Loan Agreement shall have the meanings assigned in Article I General Terms and as defined in Section 1 of this Article RVP Group – Seller Carryback Loan Agreement Page 4

II Loan Provisions. (Terms being defined are indicated by quotation marks.) Lender is making the Loan pursuant to the Loan Commitment and the terms and conditions of this Loan Agreement.

NOW, THEREFORE, in consideration of their mutual promises, the parties agree as follows:

1. DEFINITIONS. Terms not defined in Article I and II of this Loan Agreement shall have the definitions assigned in the Trust Deed. If a definition in Article I refers to an Exhibit that is a document form, the attached document is a true and correct copy of the document referenced. As used in this Loan Agreement, the following terms shall have the following meanings:

1.1. “Business Day” means regularly schedu led business day of Lender. Whenever any payment to be made under this Loan Agreement is due on a day other than a Business Day, it may be made on the next succeeding Business Day, and the resulting extension of time will be included in the computation of payment of interest.

1.2. “Close of Escrow” means the fulfillment of the Escrow terms and conclusion of the Escrow, including, without limitation, the execution of unexecuted documents, the recordation of documents specified for recording, the issuance of title insurance policies, the payment of fees and the delivery of funds and documents as directed in the escrow instructions for the Escrow. The Close of Escrow shall occur on the Closing Date.

1.3. “Conversion Date” means t he date of the first close of escrow for all or any part of Borrower’s Approved Permanent Financing for the Project.

1.4. “Default Rate” is the maximum legal interest rate.

1.5. “Escrow” is the escrow with Title Company for the closing of the Loan.

1.6. “Escrow Instructions” means the Escrow Instructions for the Escrow signed by each of the parties to this Loan Agreement.

1.7. “Event of Default” is breach of or default in a party’s obligations under this Loan Agreement, the Trust Deed, the Note, the Regulatory Agreement and any other instrument that is incorporated in this Loan Agreement or that otherwise secures the repayment of the Loan.

1.8. “Financial Statements” means the certified financial statements of Borrower (and any other persons on whose financial capacity Lender has relied in making this Loan) as may be required by Lender from time to time, including operating statements, balance sheets, and any other financial reports and information that Lender may require.

1.9. “Fixtures” means all fixtures located on or within the Property or now or later installed in or used in connection with any of the Property, including, as applicable and without limitation, all partitions, screens, awnings, motors, engines, boilers, furnaces, pipes, plumbing, elevators, cleaning and sprinkler systems, fire extinguishing apparatus and equipment, water tanks, heating, ventilating, air conditioning and air cooling equipment, built -in refrigerators, and gas and electric machinery, appurtenances, and equipment, whether or not permanently affixed to the Project.

1.10. “Governmental Authority” means the United States of America, the State of California, the County of Sacramento, the City of Sacramento or any other political subdivision, agency, department, commission, board, bureau, or instrumentality of any of them.

1.11. “Governmental Requirement” means any law, ordinance, order, rule, regulation, plan, ruling, determination or requirement of a Governmental Authority.

1.12. “Loan” is the loan from Lender to Borrower made pursuant to this Loan Agreement.

1.13. “Loan Agreement” means this Loan Agr eement including Article I and II, all Exhibits attached to this Loan Agreement (which are incorporated in this Loan Agreement by this reference) and the Loan Documents which are not otherwise included in this definition.

RVP Group – Seller Carryback Loan Agreement Page 5

1.14. “Loan Documents” means the Note, this Loan Agreement, the Security Documents, the Regulatory Agreement, and all other documents (including guaranties, if any) evidencing, securing, or relating to the Loan.

1.15. “Loan Maturity Date” means the date on which the entire unpaid balance of the Loa n, including principal and interest, is due and payable.

1.16. “Loan Proceeds” means funds disbursed by Lender on account of the Loan and pursuant to this Loan Agreement.

1.17. “Note” means that certain promissory note evidencing the Loan and attached hereto as an E xhibit.

1.18. “Permanent Lender” is the lender for the Permanent Loan.

1.19. “Permanent Loan” means the permanent financing obtained by Borrower, which is to be made concurrently with the Loan and which is secured by a senior lien against the Property.

1.20. “Person” means any natural person, corporation, firm, partnership, association, trust, government, governmental agency, or any other entity, whether acting in an individual, fiduciary, or other capacity.

1.21. “Personalty” means, whether or not listed as Additional Collate ral, all of Borrower's interest in all accounts, contract rights, and general intangibles (specifically including any insurance proceeds and condemnation awards) arising out of the ownership or operation of the Property, and all furniture, furnishings, equipment, machinery, materials and supplies, leasehold interests in personal property, and all other personal property (other than Fixtures) of Borrower now or later located about the Property, together with all present and future attachments, accessions, re placements, substitutions, and additions, and the cash and noncash proceeds.

1.22. “Potential Default” means an event that would constitute an Event of Default but for any requirement of notice to be given or period of grace or time to elapse.

1.23. “Security Documents” means the Trust Deed, together with all other documents entered into between Borrower and Lender or by Borrower in favor of, or for the benefit of, Lender that recite that they are to secure the Loan.

1.24. “Senior Lender” means the maker of a loan with a lien senior to the Loan as set forth on the Title Policy.

1.25. “Title Policy” means the title insurance policies to be issued in connection with this Loan, as further defined in the Escrow Instructions.

1.26. “Trust Deed” means that certain Deed of Trust and Assignment of Rents between Borrower, as trustor, and Lender, as beneficiary and trustee, which secures the Note and is attached hereto as an Exhibit.

2. B
ORROWER'S REPRESENTATIONS AND WARRANTIES. As a material inducement to Lender to enter into this Loan Agreement and to make the Loan to Borrower, Borrower unconditionally, and each signatory who signs on its behalf, to the extent of their actual knowledge, represents and warrants to Lender, as of the Close of Escrow, as follows:

2.1. L
EGAL ORGANIZATION. Borrower is duly formed and validly exists in the form stated in Article I hereof, is qualified to do business in California, and has full power to consummate the transactions contemplated.

2.2. BORROWER'S POWERS. Borrower has full power and authority to execute this Loan Agreement, the Note, the Trust Deed, and all of the other Loan Documents, to undertake and consummate the contemplated transactions, and to pay, perform, and observe all of the conditions, covenants, agreements, and obligations.

2.3. BINDING OBLIGATION. This Loan Agreement, the Note, the Trust Deed, and each of the other Loan Documents constitute a legal and binding obligation of, and are valid and enforceable against, each party other than Lender, in accordance with the terms of each.

2.4. LITIGATION. There are no actions, suits, or proceedings pending or, to the best knowledge of Borrower, threatened against or affecting Borrower, the Property, or any part of it, or involving the validity or enforceability of the Trust Deed, the RVP Group – Seller Carryback Loan Agreement Page 6

priority of the lien, or the validity or enforceability of any of the other Loan Documents, at law or in equity, or before or by any Governmental Authority. Borrower is not in default with respect to any order, writ, injunction, decree, or demand of any court or other Governmental Authority.

2.5. NO VIOLATION. The consummation of the transactions covered by this Loan Agreement and the payment and performance of all of the obligations in the Loan Documents will not result in any breach of, or constitute a default under, any mortgage, deed of trust, lease, contract, loan or credit agreement, corporate charter, bylaws, partnership agreement, trust agreement, or other instrument to which Borrower or any of its general partners is a party or by which it or they or the Property may be bound or affected.

2.6. NO DEFAULT. There is no Event of Default or Potential Default on the part of Borrower.

2.7. TITLE TO PROPERTY. Borrower has leasehold title to the Property, which is free of all claims, liens, and encumbrances other than those shown in the Title Policy.

2.8. NO UNAPPROVED LOANS. Borrower has not received financing for either the acquisition of the Property, the use and operation of the Property, or the permanent financing of the Property except as has been fully disclosed to and approved by Lender in writing.

2.9. TITLE OF PERSONALTY. All Personalty is vested solely in Borrower, free of all claims, liens, and encumbrances, except for those in favor of Senior Lender.

2.10. T
AXES PAID. Borrower has filed all required Federal, State, County, and City tax returns and has paid all taxes due and owing. Borrower knows of no basis for additional assessments with respect to any taxes, other than the lien of taxes not yet due.

2.11. CONSTRUCTION QUALITY. There are no structural defects in the Property that are known to or reasonably should be known to Borrower or its agents and employees, and to the best of Borrower's knowledge, no violation of any Governmental Requirement exists.

2.12. ACCURACY. All applications, Financial Statements, reports, documents, instruments, information, and forms of evidence delivered to Lender concerning the Loan or required by this Loan Agreement or any of the other Loan Documents are accurate, correct, and sufficiently complete to give Lender true and accurate knowledge of their subject matter, and do not contain any untrue statement of a material fact or omit any material fact necessary to make them not misleading.

3. B
ORROWER’S COVENANTS AND CONDITIONS. From the Effective Date until payment and performance in full of all obligations of Borrower under this Loan Agreem ent, the Note, the Security Documents, and the other Loan Documents or the earlier release of the liens of the Loan Documents (and all related obligations) in accordance with the terms of this Loan Agreement, the Note, the Security Documents, and the other Loan Documents, Borrower hereby covenants and agrees with Lender that:

3.1. USE OF LOAN PROCEEDS. Borrower shall use Loan Proceeds solely for acquisition financing of the Property and for other purposes as specified in this Loan Agreement and such specific Property costs as Lender may approve in writing in advance.

3.2. PROPERTY MANAGEMENT. Subject to Lender’s written approval, Borrower shall obtain and maintain for the life of the Loan a property management agreement with a duly accredited real estate property management company for the management of the Property, and shall assure compliance of the property manager with the property management agreement.

Lender shall have the right to review and approve or reject any proposed changes to scope of said a greement and to changes in the real estate property management company prior to making such changes. Any such changes made without Lender approval shall be a default of the loan. Lender has approved Sacramento Housing and Redevelopment Agency as the qualified property management company for the Project.

3.3. B
ORROWER RESERVES. Borrower shall maintain reserves for replacement and repairs required to be made to the Property, fixtures on the Property or personal property used on the Property, or otherwise as approved by Lender, in an amount, at all times, of not less than Five Hundred and No/100 Dollars ($500.00) per unit per year.

RVP Group – Seller Carryback Loan Agreement Page 7

3.4. FINANCIAL STATEMENTS. Borrower shall provide to Lender, upon request, Financial Statements and such other evidence as Lender m ay deem necessary to assure the good status of the Loan and to verify the Property’s net income, including without limitation copies of certified rent roles, bank statements, billing statements and invoices.

4. LOAN. Lender agrees to lend to Borrower, and Borrower agrees to borrow from Lender, the Loan Amount, to finance the purposes and uses of the Property subject to the terms, conditions, representations, warranties, and covenants, all as stated in this Loan Agreement.

4.1. PRINCIPAL AMOUNT. The principal amount of the Loan shall be the Loan Amount.

4.2. USE OF LOAN PROCEEDS. Loan Proceeds shall be used solely for acquisition financing and for other purposes as specified in this Loan Agreement.

4.3. LOAN TERMS. The Loan is made pursuant to the Loan Pr ogram and is subject to the laws, rules and regulations of the Loan Program. Lender agrees to disburse the Loan Proceeds in the manner and subject to the limitations stated in this Loan Agreement. Interest, at the Interest Rate, shall accrue on each disbursement of Loan Proceeds commencing on the date on which each such disbursement is made. Repayment of the loan shall be made, in payments of principal and interest, in lawful tender of the United States, in accordance with the Payment Schedule.

4.4. NOTE AND SECURITY DOCUMENTS. The Loan is evidenced by the Note executed by Borrower in favor of Lender and delivered to Lender upon Close of Escrow. Repayment of the Note is secured by the Trust Deed covering the Property.

Borrower shall execute, as trustor, the Trust Deed in favor of the Title Company, as trustee, in trust for the benefit of Lender, as beneficiary, and deliver it to Escrow for recordation. The Loan is also secured by the Additional Collateral, if any, as evidenced by the applicable Security Documents.

4.5. L
ATE PAYMENT CHARGE. A late charge of six percent (6%) shall be payable with respect to any payment of principal, interest or other charges, not made within ten (10) days after it is due.

4.6. REGULATORY AGREEMENT. The Regulatory Agreement imposing covenants, conditions and restrictions running with the land is a material consideration for the making of the Loan. Borrower shall execute the Regulatory Agreement prior to Close of Escrow and deliver it to Escrow for r ecordation. Violation of the Regulatory Agreement is an Event of Default of this Loan Agreement.

4.7. E
SCROW. The parties shall open the Escrow promptly after the Effective Date. Escrow shall close as provided in the Escrow Instructions on or before the Closing Date.

4.8. COMMISSIONS. Lender is not responsible, by this Loan Agreement or otherwise, to pay commissions in relation to this transaction.

4.9. ACCELERATION ON TRANSFER OR REFINANCING OF THE PROPERTY; ASSUMPTION. Except as otherwise provided in the Loan Agreement, if all or any part of the Property or an interest in the Property is sold, transferred or conveyed to any person, or refinanced by Borrower such that additional debt is added to the Property or the cash flows change without Lender's prior written consent, Lender may, at Lender's option, declare all the sums secured by the Trust Deed to be immediately due and payable. Lender shall have waived such option to accelerate if, prior to the sale or transfer, Lender and the Person to whom the Property is to be sold or transferred reach agreement in writing that the Loan may be assumed. If Lender has waived the option to accelerate provided in this Section and if Borrower's successor in interest has executed a written assumption agreement accepted in writing by Lender, Lender shall release Borrower from all obligations under the Trust Deed and the Note.

5. P
ERFORMANCE CONDITIONS. The following are conditions precedent to performance under this Loan Agreement:

5.1. CONDITION OF TITLE. Lender shall cause Escro w Agent to issue to Borrower (with a copy to Lender) the Preliminary Report, together with copies of all documents relating to title exceptions referred to in the Preliminary Report.

At Close of Escrow, Lender’s Trust Deed shall be a valid lien against t he Property securing the Loan and subject to no exceptions to title (of record or off record) other than the exceptions listed in the “Conditions of Title” in the Escrow Instructions.

RVP Group – Seller Carryback Loan Agreement Page 8

5.2. CONDITIONS TO LENDER'S PERFORMANCE. Lender's obligation to perform under this Loan Agreement is subject to all of the following conditions: (a) Borrower has performed all of its obligations then to be performed pursuant to this Loan Agreement; (b) Borrower has met the Additional Conditions to Close of Escrow and applicable S pecial Provisions, if any; (c) the closing conditions as defined in the Escrow Instructions have been fulfilled as of Close of Escrow; (d) Borrower’s representations and warranties in this Loan Agreement are true and correct as of the date of this Loan Agr eement and as of the Close of Escrow; (e) this Loan Agreement continues to be in full force and effect, no default on the part of Borrower has occurred under this Loan Agreement, and no event has occurred that, with the giving of notice or the passage of t ime, will constitute a default by Borrower under this Loan Agreement; and (f) Lender has approved the Approval Documents.

5.3. CONDITIONS TO BORROWER'S PERFORMANCE. Borrower's obligation to perform under this Loan Agreement is subject to satisfaction of all of the following conditions: (a) the closing conditions as defined in the Escrow Instructions have been fulfilled as of Close of Escrow; (b) Lender has met the Additional Conditions to Close of Escrow and applicable Special Provisions, if any; (c) Lender’s representations and warranties in this Loan Agreement are correct as of the date of this Loan Agreement and as of the Close of Escrow; and (d) this Loan Agreement continues to be in full force and effect, and no default on the part of Lender has occurred under this Loan Agreement.

6. R
ELOCATION. Lender is required by law to provide relocation services and make relocation payments to eligible tenants displaced as a result of Lender’s involvement in the Property. Borrower shall comply fully with all relocation laws that are the obligation of Lender or are otherwise applicable to the Property. Borrower’s compliance with the relocation requirements as stated in this Section 6 is a material element of this Loan. Borrower’s failure to comply with the relocation requirements as stated in this Section 6 is an Event of Default.

6.1. RELOCATION COSTS. Unless otherwise stated in this Loan Agreement, any amounts paid by Lender for relocation costs and services shall be considered advances under the Loan.

6.2. COOPERATION AND ACCESS. Borrower shall cooperate fully with Lender in complying with such relocation laws, including without limitation, providing Lender access to all tenants of the Property, to all books and records related to the tenants of the Property and to all properties offered for temp orary or permanent relocation. Prior to taking any action with respect to relocation of tenants, Borrower shall meet with Lender to establish reasonable protections for tenants and related reporting requirements for Borrower.

6.3. BORROWER AS RELOCATION AGENT. With the approval of Lender, Borrower may act as Lender’s agent in accomplishing such relocation. Lender and Borrower by memorandum in writing shall establish their respective duties related to such relocation. If Lender and Borrower agree that Borrower will act as Lender’s agent for purposes of this Loan, Borrower may enter into agreements for the provision of relocation services, or Borrower may perform such services directly. Borrower shall, by provisions in its agreements or by direction to its st aff, assure that the entity performing the relocation services (a) shall comply with all applicable law, (b) shall fully inform Lender of all relocation activities, (c) shall make all requests for direction or clarification to Lender, and (d) shall respond to and follow Lender’s instruction and direction.

7. A
DDITIONAL SECURITY INSTRUMENTS. Upon request by Lender, Borrower shall execute and deliver to Lender a security instrument in favor of Lender naming as secured property all contracts related to the P roperty and all other property of any kind owned by Borrower and used primarily in connection with the Property. Lender may require such instrument at any time, and from time to time may require additions of new contracts and other property. Borrower irre vocably assigns to Lender, effective upon Lender’s written demand, as security for the due performance of this Loan Agreement all of its right, title, and interest in the Assigned Documents.

8. C
ONDITIONS PRECEDENT TO LOAN DISBURSEMENT. The obligation of Le nder to make any disbursements of Loan Proceeds shall be subject to the following conditions precedent:

8.1. No Event of Default or Potential Default of Borrower has occurred and is continuing;

8.2. If requested by Lender, Borrower has furnished to Lender an endorsement to the Title Policy showing no intervening liens or encumbrances on the Property and insuring the full disbursement, together with a satisfactory report under the California Uniform Commercial Code showing no liens or interests in Personalty other t han those of Lender;

RVP Group – Seller Carryback Loan Agreement Page 9

8.3. The Property, and all fixtures and furnishings installed on or acquired for the Property are owned by Borrower free of any liens, encumbrance, or other interests of any kind other than Lender's lien or security interest;

8.4. The representations and warranties in the Loan Documents are correct as of the date of the requested disbursement;

8.5. Borrower has paid Lender all commitment, loan, and other fees then due, and Borrower has submitted to, and Lender has approved in writing, all documents, records, statements, certificates, reports, and other materials and information then required to be submitted to Lender for approval under this Loan Agreement;

8.6. Borrower shall provide assurances, satisfactory to Lender in its sole discretion, that hazardous materials are not present on the Property or that any hazardous materials on the Property will be remediated and that no further remediation is then required by the environmental agency having responsibility for monitoring such remediation;

8.7. Borrower has delivered to Lender all funds, documents, instruments, policies, evidence of satisfaction of conditions, and other materials then due or otherwise requested by Lender under the Loan Documents;

8.8. There is no legal action threatened or pending against Borrower or affecting the Property or any Additional Collateral;

8.9. All conditions to Close of Escrow have been satisfied in accordance with the Loan Agreement;

8.10. Borrower has obtained and Lender has approved a loan approval from a financial institution (or other lender approved by Lender in its sole discretion) to make the Permanent Loan, which provides (a) that it is subject only to those conditions which are usual and customary in the industry and which can be satisfied by the proposed closing date of the Permanent Loan; (b) that it is in full force with no default by any party; and (c) that Lender will have notice of, and a reasonable opportunity to cure, any Borrower defaults;

8.11. The Permanent Lender’s commitment to make the Permanent Loan is in full force, has not been modified and no event has occurred that with notice or the passage of time or both could result in the termination of it. Nothing in the Permanent Loan commitment, or submissions and approvals made under it, conflicts with this Loan Agreement. Borrower has done all things necessary to keep unimpaired its rights under the Loan Commitment;

8.12. Borrower has filed all tax returns required to be filed and paid a ll taxes due, which, if unfiled or unpaid, might adversely affect Lender’s security under the Security Documents; and

8.13. Borrower has provided proof of all insurance required by this Loan Agreement.

9. M
AKING DISBURSEMENT. Lender shall be deemed to have disbursed the Loan Proceeds, net of all costs which are payable directly by Lender to itself or a third-party pursuant to this Loan Agreement, at Close of Escrow, subject to fulfillment of the conditions precedent as stated in Section 8.

10. REDUCTION FOR OTHER LOANS. In the event that Borrower receives other financing in excess of the amounts shown in the Budget, the Loan Amount shall be reduced by such e xcess amount, and Borrower shall immediately repay any Loan Proceeds disbursed that are in excess of the Loan Amount as reduced herein. If Borrower fails to make such repayment within ten (10) business days of Lender’s demand, the Loan shall be considered to be in default.

11. DEFAULTS

11.1. EVENTS OF DEFAULT. At the option of Lender, each of the following events will constitute a default (each an "Event of Default"):

11.1.1. The occurrence of an event of default under any of the Loan Documents;

11.1.2. Borrower's failure to comply with any Governmental Requirement; provided, however that Borrower’s right to challenge the Governmental Requirement is not abridged;

RVP Group – Seller Carryback Loan Agreement Page 10

11.1.3. Borrower's failure to keep in full force any permit, license, consent, or approval with respect to the occupancy or use of the Property, unless Borrower has renewe d the same or otherwise cured the lapse prior to Lender’s issuance of a notice of the default;

11.1.4. The filing of any lien against the Property, if the claim of lien continues for thirty (30) days without discharge, satisfaction, or the making of provision for payment (including bonding) to the satisfaction of Lender; and

11.1.5. The attachment, levy, execution, or other judicial seizure of any portion of the Property, or any substantial portion of the other assets of Borrower, that is not released, expunged, bonded, discharged, or dismissed within thirty (30) days after the attachment, levy, execution, or seizure.

12. REMEDIES

12.1. OPTION TO ACT. On the occurrence of any Event of Default, in addition to its other rights in this Loan Agreement or in any of the other Loan Documents, at law, or in equity, Lender may, without prior demand, exercise any one or more of the following rights and remedies:

12.1.1. Declare the Note and all other sums owing to Lender with respect to the other Loan Documents immediately due;

12.1.2. Make any disbursements after the happening of any one or more of the Events of Default, without waiving its right to demand payment of the Note and all other sums owing to Lender with respect to the other Loan Documents or any other rights or remedies and without l iability to make any other or further disbursements, regardless of Lender's previous exercise of any rights and remedies;

12.1.3. Proceed as authorized at law or in equity with respect to the Event of Default, and in connection with that, remain entitled to exercise all other rights and remedies described in this Loan Agreement or the Trust Deed; and

12.1.4. Make any unauthorized payment from Loan Proceeds or other funds of Lender that may be reasonably necessary to protect Lender’s rights under this Loan Agreement.

12.1.5. Recover its funds expended in exercising or enforcing any of its rights or remedies under any of the Loan Documents, together with interest at the Default Rate from the date the funds were spent until repaid which amounts will be deemed secured by the Trust Deed.

12.2. R
IGHTS CUMULATIVE, NO WAIVER. All of Lender's rights and remedies provided in this Loan Agreement or in any of the other Loan Documents are cumulative and may be exercised by Lender at any time. Lender's exercise of any right or remedy will not constitute a cure of any Event of Default unless all sums then due to Lender under the Loan Documents are repaid and Borrower has cured all other Events of Default. No waiver will be implied from Lender's failure to take, or delay in taking, any action concerning any Event of Default or from any previous waiver of any similar or unrelated Event of Default. Any waiver under any of the Loan Documents must be in writing and will be limited to its specific terms.

12.3. D
ISCLAIMER. Whether Lender elects to employ any of the remedies available to it in connection with an Event of Default, Lender will not be liable for the failure to protect the Property; the payment of any expense incurred in connection with the exercise of any remedy available to Lender; or the performance or nonperformance of any obligation of Borrower.

13. F
IRE, HAZARD AND EXTENDED COVERAGE INSURANCE. For the duration of Loan Agreement, Borrower shall obtain and maintain fire and hazard insurance to the full insurable value of the Property with endorsements of extended coverage, vandalism, and malicious mischief, and with such other endorsements and in such amounts as Lender may reasonably require to protect the Property. In the event of damage to the Property and subject to the requirements of Lender, Borrower shall use the proceeds of such insurance to reconstruct the Property and the public improve ments.

13.1. INSURANCE PROVISIONS. Each policy of insurance required under this Loan Agreement shall be obtained from a provider licensed to do business in California and having a current Best's Insurance Guide rating of A+VII or better, or such other equivalent rating, as may reasonably be approved by Lender's legal counsel. Each policy shall bear an endorsement RVP Group – Seller Carryback Loan Agreement Page 11

precluding cancellation or termination of the policy or reduction in coverage unless Lender has been given written notice of such intended action at least thirty (30) days prior to its effective date.

13.2. FAILURE TO MAINTAIN. If Borrower fails to obtain or maintain, or cause to be obtained and maintained, any insurance required by this Loan Agreement, Lender shall have the right to purchase the insurance on Borrower’s behalf, and Borrower shall promptly reimburse the full cost of such insurance to Lender. If Borrower fails to reimburse Lender for insurance, the amount of unpaid reimbursement shall bear interest, at the maximum rate permissible under the law, until paid.

14. MISCELLANEOUS.

14.1. NONRECOURSE. Notwithstanding any provision of this Loan Agreement or any document evidencing or securing this Loan, Borrower, and Borrower’s principals, agent, officer, and successors in interest shall not be personally liable for the payment of the Loan or any obligation of the Loan.

14.2. FEDERAL REQUIREMENTS. If any Loan Program is federally funded, Borrower shall comply with all laws, rules, regulations and funding requirements that govern the use of such funds. Lender, to the extent required by law, shall cooperate with and assist Borrower in fulfillment of such obligations. If Lender, as a result of actions of the Borrower, shall be obligated to repay the Loan Program any amount of the Loan Proceeds, Borrowe r shall make such repayment on account of Lender and failure to do so shall be an Event of Default.

14.3. NATURE OF REPRESENTATIONS AND WARRANTIES. Borrower certifies to Lender that all representations and warranties made in this Loan Agreement and all other L oan Documents are true and correct in all material respects and do not contain any untrue statement of a material fact or omit any material fact necessary to make the representations and warranties not misleading. All representations and warranties will r emain true and correct in all material respects and will survive so long as any of Borrower's obligations have not been satisfied or the Loan or any part of it remains outstanding, and for any applicable statute of limitations period. Each request by Borr ower for a disbursement will constitute an affirmation that all representations and warranties remain true and correct as of the date of that request. Each representat ion and warranty made in this Loan Agreement, in any other Loan Documents, and in any ot her document delivered to Lender by Borrower, will be deemed to have been relied on by Lender, regardless of any investigation, inspection, or inquiry made by Lender or any related disbursement made by Lender. The representations and warranties that are m ade to the best knowledge of Borrower have been made after diligent inquiry calculated to ascertain the truth and accuracy of the subject matter of each representation and warranty.

14.4. NO WAIVER. No failure or delay on the part of Lender in exercising any right or remedy under the Loan Documents will operate as a waiver nor will Lender be estopped to exercise any right or remedy at any future time because of any such failure or delay. No express waiver will affect any matter other than the matter expressly waived and that waiver will be operative only for the time and to the extent stated. Waivers of any covenant, term, or condition in this Loan Agreement will not be construed to waive any subsequent breach of the same covenant, term, or condition.

14.5. NO THIRD PARTIES BENEFITED. This Loan Agreement is made and entered into for the sole protection and benefit of the parties and their permitted successors and assigns, and no other Person will have any right of action or any rights to funds at any time on deposit in any construction account or impound account, if established.

14.6. N
OTICES. Borrower irrevocably appoints Lender as its agent (the agency being coupled with an interest) to file for record any notices of completion, cessation of labor, or any other notice that Lender deems necessary or desirable to protect its interests under this Loan Agreement or under the Loan Documents. All notices to be given under this Loan Agreement shall be in writing and sent to the addresses stated above by one or more of the fol lowing methods:

14.6.1. Certified mail, return receipt requested, in which case notice shall be deemed delivered three (3) business days after deposit, postage prepaid in the United States Mail;

14.6.2. A nationally recognized overnight courier, by priority overnight s ervice, in which case notice shall be deemed delivered one (1) business day after deposit with that courier;

14.6.3. Hand delivery with signed receipt for delivery from a person at the place of business of the receiving party and authorized to accept delivery for the receiving party, in which case notice shall be deemed delivered upon receipt, or RVP Group – Seller Carryback Loan Agreement Page 12

14.6.4. Telecopy, if a copy of the notice is also sent the same day by United States Certified Mail, in which case notice shall be deemed delivered one (1) business day after transmittal by telecopier, provided that a transmission report is automatically generated by the telecopier reflecting the accurate transmission of the notices to receiving party at the “Fax Number” given in the Escrow Attachment or to such other address as Borrower or Lender may respectively designate by written notice to the other.

14.7. ACTIONS. Lender will have the right to commence, appear in, or defend any action or proceeding purporting to affect the rights, duties, or liabilities of the partie s, or the disbursement of any funds under this Loan Agreement. In connection with that, Lender may incur and pay costs and expenses, including, without limitation, reasonable attorney fees.

Borrower agrees to pay to Lender on demand all these expenses, and Lender is authorized to disburse funds from any account for that purpose. This Section does not apply to actions or proceedings between the parties.

14.8. A
SSIGNMENT. The terms of this Loan Agreement will be binding on and inure to the benefit of successor s and assigns of the parties. However, Borrower shall not assign this Loan Agreement or any interest it may have in the monies due or, except as otherwise provided, convey or encumber the Property or any Personalty or Fixtures now or later on the Property without the prior written consent of Lender. Notwithstanding the foregoing, if there is an assignment, conveyance, or encumbrance, Lender may nevertheless at its option continue to make disbursements under this Loan Agreement to Borrower or to those who succeed to Borrower's title, and all sums so disbursed will be deemed to be disbursements under this Loan Agreement and not modifications, and will be secured by the Security Documents. Lender may at any time assign the Loan Documents to any affiliate of Lender or to a national bank or other equivalent lender, and the assignee will assume the obligations of Lender, and Lender will have no further obligation of any nature. In that case, the provisions of this Loan Agreement will continue to apply to the Lo an, and the assignee will be substituted in the place and stead of Lender, with all rights, obligations, and remedies of Lender, including, without limitation, the right to further assign the Loan Documents. In addition, Lender may at any time assign a pa rticipation in the Loan to any other party, provided that Lender continues to be primarily obligated under this Loan Agreement.

14.9. PREPAYMENT. Borrower may prepay the Loan only on and subject to the terms and conditions in the Note.

Borrower shall have no rights to receive, and under no circumstances will Borrower receive repayment of any fees previously paid to Lender.

14.10. BORROWER, LENDER RELATIONSHIP. The relationship between Borrower and Lender is, and will at all times remain, solely that of borrower and lender, and Lender neither undertakes nor assumes any responsibility for or duty to Borrower.

14.11. NO JOINT VENTURE, PARTNERSHIP, OR OTHER RELATIONSHIP. Nothing contained in this Loan Agreement or in any other document executed in connection with this Loan Agreement shall be construed as creating a joint venture or partnership between Lender and Borrower. Each Party is acting as an independent entity and not as an agent of the other in any respect. No relationship exists as between Lender and Borrower other than that of a lender and a borrower.

14.12. CONTROLLING LAW; VENUE. The Loan Documents will be governed by and construed in accordance with California law. The venue for any legal action or proceeding will be in the County of Sacramento, California

14.13. CONSENTS AND APPROVALS. All consents and approvals by Lender required or permitted by any provision of this Loan Agreement will be in writing. Lender's consent to or approval of any act by Borrower requiring further consent or approval will not be deemed to waive or render unnecessary the consent or approval to or of any subsequent similar act.

14.14. S
URVIVAL OF WARRANTIES AND COVENANTS. The warranties, representations, conditions, covenants, and agreements in this Loan Agreement and in the other Loan Documents will survive the making of the Loan and the execution and delivery of the Note and will continue in full force until the Loan has been paid in full. Nothing in this Section is intended to limit any other provision of the Loan Documents that by their stat ed terms survive the repayment of the Loan or the termination of any Loan Document.

14.15. RECORDING AND FILING. Borrower, at its expense, will cause the Security Documents and all supplements to be recorded and filed and re-recorded and re-filed in any manner and in any places as Lender will reasonably request, and will pay all recording, filing, re-recording, and re-filing taxes, fees, and other charges.

RVP Group – Seller Carryback Loan Agreement Page 13

14.16. LOAN EXPENSES. In making the first disbursement, Lender may, at its option, deduct from the proceeds of that disbursement a sum equal to the aggregate of the following, to the extent Lender has knowledge of it and demand has been made on Lender at the time of the deposit: all expenses specifically incurred in connection with the Loan or the preparation, execution, and delivery of the Loan Documents, including, but not limited to, recording costs and expenses, transfer and other taxes (if any), surveys, appraisal fees, title and hazard insurance premiums, recording, notary, and escrow charges, and all other similar, usual, or customary loan closing charges and expenses; and any other budgeted expenses that have been approved by Lender in writing; and Lender will, for the benefit of Borrower, pay those amounts over to the respective parties on whose behalf the demands will have been received by Lender. Borrower will pay directly any expenses in connection with the Loan not so paid by Lender, including, without limitation, any of the expenses specified above, and will hold Lender free from any cost, liability, or obligation of any nature in connection with it, including reasonable attorney fees incurred by Lender. Borrower further agrees to pay on demand all out -of-pocket costs and expenses reasonably incurred by Lender including, without limitation, the fees and disbursements of Lender's outside counsel, in connection with: (i) the administration of the Loan, including, without limitation, all approvals or consents given or contemplated to be given under the Loan Documents, all amendments to the Loan Documents entered into by Lender or requested by any party to the Loan Documents, and all title insurance policies and endorsements required by Lender, and (ii) the enforcement of any rights or remedies under the Loan Documents, whether any action or proceeding is commenced, or the protection of the security, or interests of Lender under the Loan Documents. All costs and expenses, together with interest at Interest Rate, will form a part of the indebtedness and will be secured by the Security Documents.

14.17. N
O REPRESENTATIONS BY LENDER. By accepting or approving anything required to be observed, performed, or fulfilled, or to be given to Lender pursuant to this Loan Agreement or pursuant to the Loan Documents, including, but not limited to, any officer's cer tificate, balance sheet, statement of income and expense, or other Financial Statement, survey, appraisal, or insurance policy, Lender will not be deemed to have warranted or represented the sufficiency, legality, effectiveness, or legal effect of it or of any particular term, provision, or condition of it, and any acceptance or approval will not be or constitute any warranty or representation by Lender.

14.18. A
MENDMENT. The Loan Documents and the terms of each of them may not be modified, waived, discharged, or terminated except by a written instrument signed by the party against whom enforcement of the modification, waiver, discharge, or termination is asserted.

14.19. T
ERMINATION. Except as otherwise provided in the Loan Documents, all rights and obligations under this Loan Agreement will terminate except as to any accrued obligations effective on the payment of all Loan owing by Borrower to Lender.

14.20. C
OUNTERPARTS. The Loan Documents may be executed in any number of counterparts and by different parties in separate counterparts, each of which when executed and delivered will be deemed an original and all of which counterparts taken together will constitute one and the same instrument.

14.21. SEVERABILITY. If any term, provision, covenant, or condition or any application is held by a court of competent jurisdiction to be invalid, void, or unenforceable, all terms, provisions, covenants, and conditions and all applications not held invalid, void, or unenforceable will continue in full force and will in no way be affected, i mpaired, or invalidated.

14.22. CAPTIONS. All Article and Section headings in the Loan Documents are inserted for convenience of reference only and do not constitute a part of the Loan Documents for any other purpose.

14.23. INDEMNITY. Borrower agrees to defend, indemnify, and hold Lender harmless from all losses, damages, liabilities, claims, actions, judgments, costs, and reasonable attorney fees that Lender may reasonably incur as a direct or indirect consequence of the making of the Loan, Borrower's failure to pe rform any obligations as and when required by this Loan Agreement or any of the other Loan Documents, the failure at any time of any of Borrower's representations or warranties to be true and correct, or any act or omission by Borrower, any contractor, subcontractor, engineer, architect, or other Person with respect to the Property, or any portion of it. Borrower will pay immediately on Lender's demand any amounts owing under this indemnity, together with interest at the lesser of the Default Rate or the m aximum rate permitted by law from the date Lender makes a payment or incurs a loss. Borrower's duty to indemnify Lender will survive the release and cancellation of the Note and the reconveyance or partial reconveyance of the Trust Deed.

RVP Group – Seller Carryback Loan Agreement Page 14

14.24. FURTHER ASSURANCES. At Lender's request and at Borrower's expense, Borrower will execute, acknowledge, and deliver all other instruments and perform all other acts necessary, desirable, or proper to carry out the purposes of the Loan Documents or to perfect and preserve any liens created by the Loan Documents.

14.25. DISCLOSURE OF INFORMATION. If Lender elects to sell the Loan, Lender may forward to the buyer of the Loan all documents and information related to the Loan in Lender's possession, including without limitation all Financial Statements, whether furnished by Borrower or otherwise.

14.26. LENDER'S AGENTS. Lender may designate agents or independent contractors to exercise any of Lender's rights under the Loan Documents. Any reference to Lender in any of the Loan Documents will include Lender's employees, agents, and independent contractors.

14.27. INTEGRATION AND INTERPRETATION. The Loan Documents contain or expressly incorporate by reference the entire agreement between Lender and Borrower with respect to the covered matters and supersede all prior negotiations. Any reference to the Property in any of the Loan Documents will include all or any portion of them. Any reference to the Loan Documents themselves in any of the Loan Documents will include all amendments, renewals, or e xtensions approved by Lender.

14.28. NUMBER, IDENTITY AND GENDER. When the context and construction so require, all words used in the singular will be deemed to have been used in the plural and vice versa. When the context and construction so require, all words which indicate a gender will be deemed to have been used to indicate the gender as indicated by the context. _________________________________________________________________________________________________

[Signatures appear on the following page.]
RVP Group – Seller Carryback Loan Agreement Page 15

THE PARTIES HAVE EXECUTED THIS LOAN AGREEMENT in Sacramento, California as of the date first written above.

BORROWER :

RVP Group LP, a California limited partnership

By: RVP Group LLC, a California limited liability
company, its managing general partner

By: Sacramento Housing Authority
Repositioning Program, Inc., a California
nonprofit public benefit corporation, its sole
member and manager

By: _____________________________
James Shields, President

LENDER:

HOUSING AUTHORITY OF THE CITY OF

SACRAMENTO, A PUBLIC BODY, CORPORATE AND

POLITIC

BY: _______________________________________

LA SHELLE DOZIER, EXECUTIVE DIRECTOR

APPROVED AS TO FORM:

__________________________________________

LENDER COUNSEL
RVP Group – Seller Carryback Loan Agreement Page 1

Exhibit 1: Legal Description

Pine Knoll

The land described herein is situated in the State of California, County of Sacramento, City of Sacramento, described as follows:

All that certain real property situate in the South ½ of Section 5, Township 8 North, Range 5 East, M.D.B.&M., in the City of Sacramento, County of Sacramento, State of California, being more particularly described as follows:

A portion of Lot 5, as shown on the "Amended Plat of the McIntyre Tract", recorded in Book 5 of Maps, Map No. 52, on October 31, 1904, in the Office of the County Recorder of Sacramento County together with Lot 10 and Lot 11 as said lots are shown on the "Plat of Iverson Tract", recorded in Book 9 of Maps, Map No. 13, on August 5, 1908 in the Office of the County Recorder of Sacramento County, being more particularly described as follows:

55.05 feet to a ¾ inch Iron Pipe tagged L.S. 3723 marking the Northeast corner of Lot 10 of said Iverson Tract; thence along the North line of said Lot 10, North 70° 13' 26" West 99.33 feet to the Northwest corner of said Lot 10; thence South 21° 31' 10" West 100.13 feet along the West line of said Lot 10 and said Lot 11 to the Southwest corner of said Lot 11; thence South 70° 10' 00" East 99.66 feet to a ¾ inch Iron Pipe tagged L.S. 3723 marking the Southeast corner of said Lot 11 and the West line of said Lot 5 of McIntyre Tract; thence along the West line of said Lot 5, South 21° 19' 50" West

59.96 feet to a ¾ inch iron pipe tagged L.S. 3723; thence leaving said West line, South 70° 29' 40" East 111.84 feet to a ¾ inch Iron Pipe on the East line of said Lot 5; thence along the East line of said Lot 5, North 22° 27' 28" East 214.77 feet to the POINT OF BEGINNING.

APN: 008-0032-025-0000, 008-0032-032-0000, 008-0032-033-0000

RVP Group – Seller Carryback Loan Agreement Page 2

Big Trees

The land described herein is situated in the State of California, County of Sacramento, City of Sacramento, described as follows:

Parcel No. 1:

The East one-half of Lot 2 in block bounded by 25th and 26th, "H" and "I" Streets of the City of Sacramento, according to the official plat thereof.

APN:007-0033-006-0000

Parcel No. 2:

The West one-half of Lot 3 in block bounded by 25th and 26th, "H" and "I" Streets of the City of Sacramento, according to the official plat thereof.

APN:007-0033-007-0000

RVP Group – Seller Carryback Loan Agreement Page 3

Riverview Plaza

The land described herein is situated in the State of California, County of Sacramento, City of Sacramento, described as follows:

Parcel A:

Parcel 1, as shown on that certain Parcel Map entitled "Parcel A, 62 PM 14, also being Lots 1 & 2 of the Block bou nded by 6th, 7th, 'I' and 'J' Streets", recorded October 11, 1988 in Book 107 of Parcel Maps, at Page 28, Records of Sacramento County.

APN: 006-0032-029-0001

Parcel B:

Parcel 2, as shown on that certain Parcel Map entitled "Parcel A, 62 PM 14, also bei ng Lots 1 & 2 of the Block bounded by 6th, 7th, 'I' and 'J' Streets", recorded October 11, 1988 in Book 107 of Parcel Maps, at Page 28, Records of Sacramento County.

Together with those certain Reciprocal Access Easements (R.A.E.) on, under, over and acro ss Parcel 3, as said Parcel is shown on said Parcel Map.

APN: 006-0032-029-0002

Parcel C:

Parcel 3, as shown on that certain Parcel Map entitled "Parcel A, 62 PM 14, also being Lots 1 & 2 of the Block bounded by 6th, 7th, 'I' and 'J' Streets", recorded October 11, 1988 in Book 107 of Parcel Maps, at Page 28, Records of Sacramento County.

APN: 006-0032-029-0003

Parcel D:

Parcel 4, as shown on that certain Parcel Map entitled "Parcel A, 62 PM 14, also being Lots 1 & 2 of the Block bounded by 6th, 7th, 'I' and 'J' Streets", recorded October 11, 1988 in Book 107 of Parcel Maps, at Page 28, Records of Sacramento County.

APN: 006-0032-029-0004

RVP Group – Seller Carryback Loan Agreement Page 1

Exhibit 2: Scope of Development

Scope of Development – Rehabilitation of Big Tree Apartments 2516 H Street, Sacramento, CA 95816

Additionally, there is 425 sq. ft. community room that will be utilized for resident services and eight parking stalls for resident parking. The renovation would include converting existing storage space into an office space that will be used for property management. Other property amenities include utility, storage and a laundry rooms.

I. Building Exteriors

Landscape Improvements:

1. Develop landscape/Irrigation improvement plan: owner intends to remove existing landscaping and replace with modern landscaping.

2. Remove (3 EA) Redwood trees. Assist with permitting process for the redwood removal.

Concrete Pavements :

3. Sandblast and re-stripe existing concrete parking lot. Replace concrete to comply with ADA code. Install ADA parking signage.

4. Replace existing concrete sidewalks where required to create an accessible path of travel to the public right of ways. Improve existing sidewalks by increasing width of sidewalks where requested by owner.

Balconies:

5. Replace metal railings with decorative steel railings. Refinish and paint the balconies.

Stucco Exterior:

6. Repair, clean and paint existing stucco. Generate colored elevations to be submitted to city planning department for approval.

Electrical:

7. Remove and replace existing wall packs with upgraded LED light fixtures.

8. Install additional walls packs around the property to provide exterior lighting.

9. Remove existing lighted bollards.

Doors and Windows:

10. Replace doors, windows and storefronts throughout the building.

Roof:

11. Existing multi-ply poly (TPO) roofing and flushing to remain.

12. Roof gravity vents and exhaust fans to be replaced.

13. Replace or repair downspouts as needed.

Site Improvements:

14. Repair or replace wrought iron and wood fences where needed.

15. Add two exit doors with panic hardware to allow an ADA path of travel to parking lot.

16. Reconfigure picnic area, install a gazebo and benches. Remove existing benches and bike racks.

II. Building Interiors
Americans with Disabilities Act (ADA) Units:

RVP Group – Seller Carryback Loan Agreement Page 2

17. There will be a total of 3 (Three) Americans with Disabilities Act (ADA) compliant units, one per floor.

All three units to be equipped with visual and audio communication features that comply with ADA requirements.

18. Convert additional units into adaptable units if required by code and local jurisdiction

19. Complete ADA upgrade of the building as required by code and local jurisdiction.

Appliances:

20. Install new range, and over the range microwave. Existing ranges are electric.

21. Existing refrigerators will be re-used.

22. Remove nurse calls throughout the property
Finishes:

23. Floorings to be replaced throughout the building with luxury vinyl flooring. T his includes all units, corridors, community building, laundry room, office spaces and computer room. Baseboard to be replaced with rubber baseboards.

24. All utility rooms to receive epoxy flooring.

25. Paint all surfaces throughout the property.

Electrical and Lighting:

26. Replace electrical fixtures with LED lights throughout the property. Wiring to be replaced or added as needed.

27. Replace unit load centers (Unit Panels) in all units.

28. Replace breakers with AFCI / GFCI breakers. Verify neutrals are available for the AFCI breakers.

29. Replace switches and outlets throughout the property.

Kitchen:

30. Replace Kitchen cabinets

31. Replace countertops with granite countertops and backsplash

32. Replace sink and faucets with water-saving fixtures.

Bathrooms:

33. Replace shower surrounds (use three piece tub and surrounds) and mixing valves.

34. Replace vanity tops with cultured marble

35. Replace bathroom vanities

36. Replace plumbing fixtures (toilets, shower heads, bathroom faucets, etc.) with water-saving fixtures.

37. Replace bathroom accessories (mirror, medicine cabinet, etc.)

38. Replace bathroom exhaust fans.

Doors and windows:

39. Replace entry doors throughout the building. These include entry doors for dwelling units, janitorial closets, utility rooms, storage rooms, etc.

40. Replace interior doors throughout the building.

41. Replace door hardware throughout the building.

42. Replace unit windows and balcony sliding doors.

Furnishings:

43. Install new vertical blinds in all units and common areas.

44. Install fire extinguishers as needed.

Internet and Phone:

45. Replace existing data and phone jacks throughout the property.

46. Add a data jack in the bedroom.

RVP Group – Seller Carryback Loan Agreement Page 3

Wall and Ceilings:

47. Walls in the bathroom and kitchen to be stripped down to the studs or usable drywall and replaced.

48. Patch and replace drywall as needed.

49. Paint all surfaces including walls and ceilings.

50. Popcorn ceilings to be painted.

III. Building Amenities
Laundry Facility upgrade:

51. The central laundry is located on the first floor and will have four (4) sets of card operated washers and dryers, including two (2) set that complies with ADA requirements.

52. Laundry room to be reconfigured to meet ADA and accommodate four washers and dryers. Install a partition wall to separate the laundry room from existing trash room.

53. Install a folding table and sink.

54. Replace light fixtures, switches and outlets.

55. Replace house panel and breakers with AFCI/ GFCI breakers.

56. Replace flooring and baseboards.

57. Replace plumbing fixtures.

58. Replace exhaust fan.

Community Room Upgrade:

59. Perform a complete ADA upgrade of community room.

60. Replace storefront and windows.

61. Replace Kitchen cabinets and sink. Install new range and over-range- microwave hood

62. Replace plumbing fixtures.

63. Replace light fixtures, switches and outlets.

64. Install backing for a community room TV.

Common Areas, Hallways and Stairs:

65. Replaced existing ceiling with suspended ceiling in all corridors and common areas

66. Install new handrails in the corridors and staircases.

67. Paint all surfaces including walls and ceilings.

68. Replace windows, doors and door hardware in all common areas.

69. Install recessed LED lighting in all corridors and common areas including community room, laundry room, etc. Replace lighting in the stairs.

70. Replace all devices in the hallways and stairs.

Public Bathrooms:

71. Perform complete ADA upgrade of public bathroom.

72. Replace light and plumbing fixtures

73. Replace finishes
Fire Life Safety upgrade:

74. Upgrade buildings fire alarm system including alarm panel, notification and fire alarm devices, ADA upgrade in ADA units and common areas, install wiring and smoke/carbon oxide detectors. System to be upgraded to meet current code and improve life span to a minimum of 20 years. Owner’s preferred manufacturer is Silent Knights.

75. Install a smoke detector in the bedrooms to comply with code. Detectors to be interconnected.

RVP Group – Seller Carryback Loan Agreement Page 4

76. Install fire smoke dumpers if needed.

77. Perform any additional life safety modifications to ensure system meets current code.

Plumbing System:

78. Replace existing gas water heaters with electric water heaters. Upgrade electrical panel as needed.

79. Replace control valves, balancing valves and isolation valves with ball valves.

80. Install isolation valves per floor or stack to allow for isolation during maintenance.

HVAC system:

81. Install a MAU unit to supply corridors and common areas. Currently corridors have a PTAC unit that does not provide adequate air circulation. Work shall include re-using existing ducting for supply and return air.

82. Provide calculations and resize ducts to ensure they meet current code. Seal and Insulate ducts to improve efficiency.

83. Replace PTAC Units and thermostat in all dwelling units.

84. Replace split systems throughout the property

85. Remove electric wall heaters throughout the property Switch Gear and Panel:

86. Replace building main switchgear and panels to ensure over 15 years of useful life. Coordinate with local utility for approval and upgrades where required.

Signage:

87. Replace monument sign.

88. Install new building signs, and unit signs.

89. Install new signage throughout the building as required by code or requested by owner.

90. Install illuminated emergency and exit lightings throughout the building. Provide backup power if needed by code.

Elevators (2 EA):

91. Retrofit elevator cabs with new finishes, lighting and signage. Upgrade control panel.

92. Existing elevators uses hydraulic system and don’t require upgrade.

Site Office:

93. Convert the trash room (located next to laundry room) into a site office. This may require installing a fire rated wall between the two rooms.

94. Install flooring, lighting, switches and outlets, paint, new door and window for the office space.

IV. Design -Build Design Scope
This scope does not require a design and will be designed by owner or by subcontractor. Architect, however, shall provide a diagram or provide written description of the scope on plans to allow general contractors to provide a cost proposal for the work.

Wireless Internet :

95. Install a complete wireless access system incl uding WAPs, POEs, data and power wiring to provide wireless internet to residents. SHARP will furnish a design for this system. Architect to include on its plans.

Security Surveillance Camera System:

96. A new security surveillance camera system to be installed, which includes new security cameras on each floors. SHARP will furnish a design for this system. Architect to include on its plans.

V. ADD ALTs :

RVP Group – Seller Carryback Loan Agreement Page 5

97. Install a manual transfer switch outside the building to allow for a temporary generator in case of outages.

98. Install a PV system for backup power for life safety systems, if required by city or code.

Scope of Development – Rehabilitation of Pine Knoll Apartments 917 38th Street, Sacramento, California 95816

Additionally, there is a community building and laundry facility that will be utilized for resident services. The renovation would include converting existing storage space into an office space that will be used for property management. Other property amenities include utility, storage and an elevator.

VI. Building Exteriors

Landscape Improvements:

1. Develop landscape/Irrigation improvement plan: owner intends to remove existing landscaping and replace with modern landscaping.

2. Remove (5 EA) trees. Assist with permitting process for the removal.

Pavements :

3. Reconfigure the layout of the parking lot to widen space and increase number of parking stalls. Seal and stripe asphalt parking lot.

4. Add ADA parking stalls per code. Install ADA parking signage.

5. Replace existing concrete sidewalks where required to create an accessible path of travel to the public right of ways and amenities per code.

Railings:

6. Replace wooden railings where needed. Replace dry rot as needed.

Stucco Exterior:

7. Repair, clean and paint existing stucco. Generate colored elevations to be s ubmitted to city planning department for approval.

Electrical:

8. Replace existing wall packs with upgraded LED light fixtures.

9. Install additional walls packs around the property to provide exterior lighting.

10. Replace pole light fixtures with LED fixtures.

Doors and Windows:

11. Replace doors, windows and storefronts throughout the property.

Roof:

12. Replace existing composite shingle roofing and flushing for all buildings.

13. Replace downspouts throughout.

Site Improvements:

14. Replace wood fences where needed.

15. Reconfigure picnic area, install a gazebo and benches. Remove existing benches and site lights.

16. Replace dry rot as needed.

17. Build a new trash enclosure on site.

VII. Building Interiors
RVP Group – Seller Carryback Loan Agreement Page 6

Americans with Disabilities Act (ADA) Units:

18. There will be a total of 3 (Three) Americans with Disabilities Act (ADA) compliant units. All three units to be equipped with visual and audio communication features that comply with ADA requirements.

19. Convert additional units into adaptable units if required by code and local juri sdiction

20. Complete ADA upgrade of the building as required by code and local jurisdiction.

Appliances:

21. Install new range, and over the range microwave hood.

22. Existing refrigerators will be re-used.

23. Remove nurse calls throughout the property
Finishes:

24. Floorings to be replaced throughout the building with luxury vinyl flooring. This includes all units, corridors, community building, and laundry room. Baseboard to be replaced with rubber baseboards.

25. All utility rooms to receive epoxy flooring.

26. Paint all surfaces throughout the property.

Electrical and Lighting:

27. Replace electrical fixtures with LED lights throughout the property. Wiring to be replaced or added as needed.

28. Replace unit load centers (Unit Panels) in all units.

29. Replace breakers with AFCI / GFCI breakers. Verify neutrals are available for the AFCI breakers.

30. Replace switches and outlets throughout the property.

Kitchen:

31. Replace Kitchen cabinets

32. Replace countertops with granite countertops and backsplash

33. Replace sink and faucets with water-saving fixtures.

Bathrooms:

34. Replace shower surrounds (use three piece tub and surrounds) and mixing valves.

35. Replace vanity tops with cultured marble

36. Replace bathroom vanities

37. Replace plumbing fixtures (toilets, shower heads, bathroom faucets, etc.) with water-saving fixtures.

38. Replace bathroom accessories (mirror, medicine cabinet, etc.)

39. Replace bathroom exhaust fans
Doors and windows:

40. Replace entry doors throughout the building. These include entry doors for dwelling units, janitorial closets, utility rooms, storage rooms, etc.

41. Replace interior doors throughout.

42. Replace door hardware throughout.

43. Replace unit windows.

Furnishings:

44. Install new vertical blinds in all units and common areas.

45. Install fire extinguishers as needed.

Internet and Phone:

46. Replace existing data and phone jacks throughout the property.

47. Add a data jack in the bedroom.

Wall and Ceilings:

48. Patch and paint drywall as needed.

49. Paint all surfaces including walls and ceilings.

50. Popcorn ceilings to be painted.

VIII. Building Amenities
RVP Group – Seller Carryback Loan Agreement Page 7

Laundry Facility upgrade:

51. The central laundry is located in the community building and will have four (4) sets of card operated washers and dryers, including two (2) that complies with ADA requirements.

52. Laundry room to be reconfigured to meet ADA and accommodate washers and drye rs.

53. Install a laundry sink.

54. Replace light fixtures, switches and outlets.

55. Replace house panel and breakers with AFCI/ GFCI breakers.

56. Replace flooring and baseboards.

57. Replace plumbing fixtures.

58. Replace exhaust fan.

Community Building and Public Bathroom Upgrade:

59. Perform a complete ADA upgrade of community building.

60. Replace storefront and windows.

61. Replace existing ceiling tiles.

62. Replace Kitchen cabinets and sink.

63. Replace plumbing fixtures.

64. Replace commercial water heater.

65. Replace light fixtures, switches and outlets.

66. Install card readers.

67. Relocate the post box.

68. Remove nurse calls.

Fire Life Safety upgrade:

69. Upgrade buildings fire alarm system including alarm panel, notification and fire alarm devices, smoke/carbon oxide detectors and wiring as needed. System to be upgraded to meet current code and improve life span to a minimum of 20 years. Owner’s preferred manufacturer is Silent Knights.

70. Upgrade common areas and community room with visual and audio communication features that compl y with ADA requirements.

71. Install a smoke detector in the bedrooms to comply with code. Detectors to be interconnected.

72. Perform any additional life safety modifications to ensure system meets current code.

Plumbing System:

73. Replace existing electric water heaters.

HVAC system:

74. Existing split systems to remain. Replace thermostats in the units and community building.

75. Replace supply and return registers throughout the property.

Switch Gear and Panel:

76. Replace building main switchgear and panels to ensure over 15 years of useful life. Coordinate with local utility for approval and upgrades where required.

Signage:

77. Replace monument sign and monument sign light.

78. Install new building signs, and unit signs.

79. Install ADA path of travel signage per code.

80. Install new signage throughout the building as required by code or requested by owner.

Elevators:

81. Retrofit elevator cabs with new finishes, lighting and signage. Upgrade control panel with ADA compliant panel.

Add audio visual and arrival indicators for the elevator.

82. Existing elevators uses hydraulic system and don’t require upgrade.

Site Office:

83. Convert the trash room into a site office.

RVP Group – Seller Carryback Loan Agreement Page 8

84. Install a PTAC unit, flooring, lighting, switches and outlets, paint, new door and window for the office space.

IX. Design -Build Design Scope
This scope does not require a design and will be designed by owner or by subcontractor. Architect, however, shall provide a diagram or provide written description of the scope on plans to allow general contractors to provide a cost proposal for the work.

Wireless Internet:

85. Install a complete wireless access system including WAPs, POEs, data and power wiring to provide wireless internet to residents. SHARP will furnish a design for this system. Architect to include on its plans.

Security Surveillance Camera System:

86. A new security surveillance camera system to be installed, which includes new security cameras on each floors.

SHARP will furnish a design for this system. Architect to include on its plans.

Scope of Development – Rehabilitation of Riverview Plaza Apartments 600 I Street, Sacramento, CA 95814

Scope of the work for this project includes building envelope and building system improvement and unit tenant improvements for the residential space (3rd through 16th floors). This project does not include any tenant improvement scope of work in the commercial space (ground and 2 nd floors) except the common areas such as lobbies, mechanical/electrical rooms, elevators, stairways, etc. The scope of work shall also contain any hazardous material removals such as asbestos and lead, as described in the attached report, dated December 20, 2019.

12 Replace Water heaters for residential and commercial area (Existing gas water heaters to be converted into electric water heaters). Replace the associated check and control valves. 13 Replace outdated recessed lighting throughout the residential , elevator and common spaces with energy efficient light fixtures
14 Repair drywall throughout the building as needed.
15 Paint throughout the common area and common space ( commercial area work is limited to common areas )
16 Install new drop ceiling. Existing drop ceilings are aged and material is discontinued. 17 Replaced existing gas fireplaces in the residential common area with electric fire places. 18 Replace existing furniture in the residential lobbies on 3, 5, 7, 9, 11, and 13th floors (including Sofa, Chairs, coffee table, and wall art). Replace tables and chairs in the cafeteria on the 15th floors.
19 Replace garbage trash chute and equipment. Replace locking hardware for the trash chute.

Install sprinkler system in the trash chute as mandated by code. 20 Replace fire drops in the commercial kitchen and trash chute space ( in the garage) 21 Upgrade laundry room to comply with ADA requirements, or install in-unit laundry for ADA units ( 12 EA)
22 Upgrade plumbing , drainage and dryer ventilation in the laundry rooms ( 12 EA) 23 Replace existing ventilation fans, supply fans, and dampers throughout the building ( due to age and failing systems)
24 Install building phone entry and card access throughout the building ( controlled access) 25 Replace gas shut off valves ( 2 EA) ( located in the parking space)

45 Replace bathroom exhaust fans
4- Fire life and Safety
46 Replace mechanical interface equipment for smoke purge system and smoke pressurization system, including all its components as needed. Architect to conduct a comprehensive analysis of the existing systems and recertify all the equipment. SHARP needs to replace controls, rooftop fan, and blower units.
47 Replace and update emission control sensors and control units 48 Replace and upgrade fire pumps (Only electric components to be replaced. The pumps were replaced recently)
49 Replace and upgrade fire doors and hardware throughout (due to age and parts shortage) 50 Replace fire alarm system and all its devices with new system 51 Build a 2nd emergency exit from the office space
5- Elevators ( 3 EA Passenger, 1 EA freight/Passenger)
52 Replace proprietary elevators' equipment and software 53 Retrofit elevator cab interior finishes
54 Install new elevator controls ( including card readers) 6- Pool
55 Replace swimming pool heaters and filtration system
56 Drain, waterproof and re-plaster pool
57 Replace pool's surrounding tile skirt and waterproof outside deck

7- Generator
58 Replace existing leak detection and low fuel alerts to the tanks ( sensors) 8- Parking
59 Seal and stripe underground parking garage
60 Replace parking exhaust fans
61 Replace lighting in the parking lot with energy efficient lighting 62 Recertify/Upgrade carbon monoxide monitoring system
9- ADD ALTS
63 Replace original underground fuel storage tank (Existing 500 Gal galvanic tank). Single walled tank and piping are required to be permanently closed in accordance with Health and safety code.
64 Replace /Add new Camera Video Receivers/Transmitters. Existing cameras are PELCO analogue. SHARP intends to replace all existing cameras and add new cameras. SHARP will provide a layout and equipment list for the cameras.
65 Replace exterior windows with energy efficient Vinyl windows. 66 Replace existing heads with recessed sprinklers heads 67 Recertify/Upgrade commercial kitchen appliances, plumbing and refrigeration and fire safety hood system (15th floor) as needed. Consultant to conduct a comprehensive analysis of the existing equipment and identify systems that need to be replaced or recertified ( at minimum replace the ANSUL fire suppression system and certify the refrigeration equipment) RVP Group – Seller Carryback Loan Agreement Page 11

* The scope of work for the project does not include any tenant improvement work in the ground and 2nd floors, except the common spaces such as lobbies, elevators, stairs, etc.

Attachment 1: Rental Property Minimum Construction Standards are on the following page.

RVP Group – Seller Carryback Loan Agreement Page 12

Attachment 1: Lender’s Minimum Construction Standards
This attachment is from Exhibit 2 from the Lender’s Multifamily Lending and Mortgage Revenue Bond Policies.

RENTAL PROPERTY MINIMUM CONSTRUCTION STANDARDS

The following is a list of the required minimum construction standards that must be incorporated into projects participating in SHRA’s Multifamily Financing and/or Mortgage Revenue Bond programs. All rental units and sites associated with these projects must meet or exceed these standards. Exceptions to these standards may be made for properties subject to U.S. Department of Housing and Urban Development replacement reserve requirements that allow for renovation over time rather than at recapitalization (e.g., Rental Assistance Demonstration conversions for conventional public housing).

Note: For rehabilitation projects, all of the following standards shall apply. The non-rehabilitation sections below shall apply to new construction projects.

Useful Life Expectancy – Rehabilitation only

General Requirements

A. All materials funded under this loan must be new unless previously approved. Recycled items must be approved in writing by SHRA prior to their use.

B. All work shall comply with Federal and State ADA accessibility requirements, as well as any o ther requirements stipulated by the funding source(s). When there are differences the stricter of the two shall apply. The developer is responsible for notifying their architect and/or engineer of all funding sources used on the project. The architect and/ or engineer must indicate these funding requirements in the project’s plans/scope.

C. All units shall be approved for occupancy by the local Building Department or any other Agency Having Jurisdiction (AHJ) at the conclusion of the work and prior to occupancy.

F. The developer’s architect is responsible for providing an Operating Procedure Outline Sheet (OPOS) for window washing systems where applicable, per Cal-OSHA requirements.

G. SHRA encourages the use of energy and water-efficient systems wherever they may be incorporated into the project.

General Requirements – Rehabilitation only

A. Any component of the project which does or may present a health or safety hazard to the public or tenants shall be corrected to the satisfaction of the local Building Department or AHJ.

B. A clear pest inspection report will be required at the conclusion of the construction work for rehabilitation projects.

C. For all structures where disturbance of any hazardous materials (e.g. lead, asbestos, mold, etc.) wi ll occur, a clearance RVP Group – Seller Carryback Loan Agreement Page 13

report from an environmental consultant is required.

Site Work

C. For gated communities containing swinging vehicle gates, driveways shall be striped to show the area under the gate swings for safety purposes.

D. All projects shall contain trash enclosures with concrete aprons. Trash enclosures shall be made of cinder block or stucco. Trash enclosures shall be accessible to all tenants. Provisions for tenants with disabilities must be addressed in the project Scope of Development or the project plans.

F. A two percent (2%) slope shall be maintained for a distance of five feet from all structures and no standing water shall remain on the site. Provide an on- site drainage system if necessary.

G. Stairways in common areas must include closed risers and non-slip concrete finish or other slip-resistant material on the treads.

H. Exterior mounted electrical, mechanical, and plumbing systems must be protected from vandalism.

Site Work – Rehabilitation only

A. All landscaping and irrigation systems must be in a well-maintained condition.

All pedestrian gates hardware must be functional and in new or near-new condition. Access Control systems are required at exterior pedestrian gates.

C. All driveways and sidewalks must be in good condition. All cracked or uplifted areas (more than ¼”) shall be repaired or replaced.

RVP Group – Seller Carryback Loan Agreement Page 14

D. The asphalt shall be in good condition, with no alligator cracking, longitudinal cracking, potholes, or standing water.

Building Envelope and Moisture Protection – Rehabilitation only

A. All areas exposed to moisture must be sealed and watertight. Buildings showing evidence of water intrusion shall have the areas inspected by a licensed architect/engineer or by a certified water intrusion expert. A water intrusion report shall be submitted to SHRA, and shall include the cause of the issue and a resolution to eradicate the water intrusion. If the inspection cannot be completed until the demolition phase of the project, the report shall describe a procedure to inspect the issue during demolition.

D. Fireplaces must be clean and meet applicable air quality standards. Chimneys shall be clean and must be inspected by a certified chimney inspector for structural integrity. All recommended structural repairs shall be performed.

Doors and Windows

B. All doors must have matching hardware finishes.

D. All sliding exterior doors shall have screen doors and shall have functional locks and must operate freely without excessive effort.

E. All doors and windows must meet current egress standards.

Doors and Windows – Rehabilitation only

B. All doors and doorjambs must be in good condition. No damaged or worn doorjambs or doors are allowed. Doors and/or jambs beyond their useful life shall be replaced.

RVP Group – Seller Carryback Loan Agreement Page 15

Casework

A. New cabinet boxes shall be made of plywood or solid wood. No particle board boxes will be allowed.

B. All counter tops shall be of solid surface or granite, and in very good condition with no significant scratches, burns or other imperfections.

C. Face frames, doors and drawer faces shall be solid hardwood. No plastic laminate finishes will be allowed.

Casework – Rehabilitation only

A. All cabinets shall be replaced or in very good condition, within their 15 year useful life, both structurally and in appearance.

Finishes

C. Carpet shall meet or exceed the minimum standards as set by HUD’s UM-44D bulletin.

Finishes – Rehabilitation only

A. Floor coverings must be in good, useable condition - no holes, tears, rips, or stains.

C. Acoustic (popcorn) ceiling texture must be removed and refinished with new texture to match wall texture.

Equipment

Appliances slated for ADA units shall be per code requirements.

B. SRO projects are encouraged to provide the appliances listed above and will be reviewed and approved on a case-by- case basis.

C. All kitchens must have adequate cabinet and counter space. Installation of shelving for microwaves is required if over - the-range microwaves are not used, with the exception of ADA units.

Furnishings

A. Dwelling units must have window coverings on all windows.

Special Construction

A. Non-habitable structures on property must be painted to match primary buildings and must be structurally sound.

RVP Group – Seller Carryback Loan Agreement Page 16

C. Public pool areas shall have self-closing gate(s). Fences and gates at pool areas shall meet applicable current codes and standards. Joints between coping and concrete deck shall be appropriately caulked. Existing pools shall have no cracks in plaster or tile grout joints. The Developer is responsible for ensuring po ol and surroundings meet all applicable current codes and standards. If a project contains two or more pools, at least one must remain following rehabilitation.

Mechanical/Plumbing

A. Water heaters must be installed per current applicable codes.

B. All common areas and tenant units must have heating and air conditioning. Wall mount (i.e. PTAC units) or central systems are acceptable. Evaporative coolers are not acceptable. HVAC units should be protected from vandalism, pursuant to discretion of SHRA.

C. Toilets, showerheads, faucets, and mixing valves shall be new and meet current water conservation codes.

Mechanical/Plumbing – Rehabilitation only

A. All toilets, sinks, and tubs shall be chip and stain free.

Electrical

A. All units must have smoke/carbon monoxide detectors installed per current code.

C. Broadband infrastructure meeting the requirements of 24 CFR 5.100* is required in all new construction projects of 4 or more units.

Electrical – Rehabilitation only

A. All electrical panels shall meet current code.

B. Any rehabilitation projects with un-grounded electrical systems shall be re-wired with grounded systems to meet current code.

C. For rehabilitation projects, switches, outlets and light fixtures shall be replaced with devices that meet current applicable codes.

attic spaces, and/or crawl spaces.

Resident Services Community Space

All properties, regardless of project type (i.e. senior, family, or large family), must devote a minimum of 1,200 s.f. to actual resident services/community space. Resident services space includes common kitchens, computer rooms, meeting rooms and general gathering space. It does not include public restrooms, leasing offices, laundry facilities and lobbies. Common kitchens are required, including refrigerator, stove, garbage disposal, and dishwasher.

For existing buildings, these requirements shall apply unless SHRA deems there to be significant physical constraints.

End of Scope of Development.

Exhibit 3: Note Form

PROMISSORY NOTE

FOR RVP GROUP

SELLER CARRYBACK LOAN

BORROWER HAS MADE THIS PROMISSORY NOTE (“NOTE”) AS OF THE EFFECTIVE DATE. The Lender is making the Loan pursuant to the terms and conditions of the Loan Agreement and this Note. This Note includes all attachments and Exhibits listed below, which are attached to and incorporated in this Note by this reference. The capitalized terms in this Note shall have the meanings assigned in the following table of definitions and as defined in the body of the Note. (Terms being defined are indicated by quotation marks. If an item in the table is marked “None, Not Applicable, N/A or equivalent or is left blank, that defined term is not applicable to this Note or the referenced item is not required or is not included in this Note as the context may indicate.) Capitalized terms not defined in this Note shall have the meanings assigned in the Loan Agreement as it may be amended from time to time . The Lender is making the Loan to Borrower in consideration of Borrower making this Note and delivering it to Lender.

For purposes of this Note, the following terms shall have the following meanings:

DEFINED TERM: DEFINITION:
“Effective Date” ***TBD***
“Lender” Housing Authority of the City of Sacramento (HACS) “Borrower” RVP Group LP
“Borrower Legal
Status”
a California limited partnership
“Loan Agreement” The Loan Agreement between the Borrower and Lender as of the Effective Date for making of the loan (“Loan”) evidenced by this Note.
“Principal
Amount”
Twenty-Eight Million One Hundred Fourteen Thousand Four Hundred Twenty -One Dollars and No Cents ($28,114,421.00)
“Interest Rate” The interest shall accrue at the Applicable Federal Rate (AFR) in effect on the accrual date, per annum, and compounded annually.
“Accrual Date” Interest shall accrue starting on the following “Accrual Date”: The Effective Date

Annual payments shall be applied first to outstanding interest accrued and unpaid and then to principal.
“Residual Receipts” is defined as follows: beginning from the Loan’s Effective Date, annual installments (as described in this paragraph) are to begin. Based on the annual audited financial statement from the preceding year, payments will be RVP Group – Seller Carryback Promissory Note Page 2

made upon a “Residual Cash Flow” basis meaning Net Operating Income (NOI) less:
i. to the Limited Partner for unpaid credit deficiency, taxes owed on taxable income allocated to the Limited Partner, and unpaid Investor Services Fees;

ii. to replenish the operating reserve to required level;

iii. to the property manager for the cash flow portion of property management fee (if related manager);

iv. to the developer to pay off remaining deferred Development Fee;

vi. to contingent loan payments with limits for each loan scheduled in the projections and in accordance with the loan documents;

vii. to a percentage to the General Partner accompanied by a special allocation of income of such amount and the remainder to the Limited Partner per Section B above

To the extent that insufficient Residual Cash Flow is available to pay any of the amounts set forth in Sections (i) through (vii) when due, such amount shall accrue and be payable in the future when there is available Residual Cash Flow, after prior payment of all higher priority payments from Residual Cash Flow, as set forth above.

“Operating Expenses” shall mean actual costs, fees and expenses as evidenced by invoices attributable to the operation, recordkeeping, maintenance, taxes and management of the Project, including property management fees; taxes and assessments; payroll, benefits and payroll taxes of for property employees; insurance; security; painting, cleaning, repairs, and alterations; landscaping; sewer charges; utility charges; advertising, promotion and publicity; cable television, satellite and other similar services; office, janitorial, cleaning and building supplies; recreational amenities and supplies; purchase, repair, servicing and installation of appliances; costs and expenses associated with the provision of social and/or community services to the residents of the Project; equipment, fixtures and furnishing; fire alarm and elevator monitoring; fees and expenses of accountants, attorneys, consultants and other professionals. The definition will include deposits into operating and/or replacement reserves maintained by the Borrower but will not include initial deposits to capitalize the reserve accounts or amounts expended from a reserve account, or capital costs.

RVP Group – Seller Carryback Promissory Note Page 3

1. This Note evidences the obligation of Borrower to Lender for repayment of the Loan. The terms and covenants of the Loan Agreement are incorporated in this Note by reference. The Loan Agreement provides for and incorporates the Regulatory Agreement (as defined in the Loan A greement), the making of which is further consideration for this Note.

2. All payments on this Note shall be applied first to fees and charges due under the Loan Agreement, if any, then to interest and then to the principal due on this Note. Borrower shall make the payments to the Lender at 801 12 th
Street, Sacramento, CA 95814, or to such other person or organization as may be designated by Lender to Borrower and noticed as provided in the Loan Agreement.

5. Lender and Borrower shall comply with and fulfill the Special Terms.

RVP Group – Seller Carryback Promissory Note Page 4

1) Borrower becoming insolvent or bankrupt or being unable or admitting, in writing, Borrower’s inability to pay debts as they mature or making a general assignment of or entering into any restructure payment arrangement with creditors.
2) Proceedings for the appointment of a receiver, trustee or liquidator of the assets of Borrower or a substantial part of such assets, being authorized or instituted by or against the Borrower. 3) Proceedings under any bankruptcy, reorganization, readjustment of debt, insolvency, dissolution, liquidation or other similar law of any jurisdiction being authorized or instituted against Borrower.

7. No waiver of any default or breach by Borrower under this Note shall be implied from any omission by Lender to take action on account of such default, and no express waiver shall affect any default, other than the default specified in the waiver. Such waiver shall be in writing and shall be operative only for the time and to the extent therein stated.

8. Borrower may prepay this Note in full or in part at any time, without any prepayment penalty being charged by Lender.

10. Subject to the provisions of this Section 10, and notwithstanding any provision of the Loan Documents other than this Section 10, the personal liability of Borrower, and Borrower’s principals, partners, members, agents, officers, and successors in interest, to pay the principal of and interest on the debt evidenced by this Note and any other agreement evidencing Borrower's obligat ions under this Note shall be limited to (a) the Collateral (as defined in the Loan Agreement), (b) the personal property described in and pledged under any Loan Document, and (c) the rents, profits, issues, products and income of the Property, including any received or collected by or on behalf of Borrower after an Event of Default under the Loan Documents.

11. Borrower shall pay to Lender all costs of enforcement of all or any portion of this Note, the Trust Deed, and the Regulatory Agreement, including attorney's fees, witness fees, investigator fees and court costs, incurred by Lender, whether or not litigation is commenced.

I
N WITNESS WHEREOF, Borrower has executed this Note as of the Effective Date.

Borrower:

RVP Group LP, a California limited partnership

By: RVP Group LLC, a California limited liability company, its managing general partner

By: Sacramento Housing Authority Repositioning
Program, Inc., a California nonprofit public
benefit corporation, its sole member and manager

By: _____________________________
James Shields, President

Exhibit 4: Trust Deed Form
NO FEE DOCUMENT:

Entitled to free recording
per Government Code §§6103 and 27383.

When recorded, return to:

SACRAMENTO HOUSING AND

REDEVELOPMENT AGENCY
801 12th Street
Sacramento, CA 95814
Attention: Portfolio Management

DEED OF TRUST AND ASSIGNMENT OF RENTS
RVP Group
For purposes of this Deed of Trust the following capitalized terms shall have the meanings ascribed in the space adjacent to them:

TERM DEFINITION
“Effective Date” ***TBD***
“Trustor” and
“Borrower”
RVP Group LP, a California limited partnership
“Borrower
Address”
801 12th Street, Sacramento, CA 95814
“Trustee” Placer Title Company
“Beneficiary” and
“Lender”
Housing Authority of the City of Sacramento, a public body, corporate and politic “Lender Address” 801 12th Street, Sacramento, California 95814 “Property”
Which is real property located in the County of Sacramento and the State of California as more particularly described in the Legal Description.

Address Pine Knoll – 917 38th Street, Sacramento, 95816; Big Trees – 2516 H Street, Sacramento, 95816;
Riverview Plaza – 600 I Street, Sacramento,
95814
Assessor’s Parcel Number Pine Knoll – 008-032-025-0000, 008-0032-032- 0000, 008-0032-033-0000;
Big Trees – 007-0033-007-0000;
Riverview Plaza – 006-0032-029-001, 006-0032-
029-002, 006-0032-029-003, 006-0032-028-004
“Legal
Description”
The Legal Description of the Property which is more particularly described in the attached Exhibit 1 Legal Description, which is incorporated in and an integral part of this Deed of Trust
“Loan” Which is Lender’s loan to Borrower evidenced by the Note and which is secured by this Deed of Trust.
“Loan
Agreement”
Which is the agreement between Lender and Borrower stating the term and conditions of the Loan.

N/A
RVP Group – Seller Carryback Deed of Trust and Assignment of Rents Page 2 “Note”
Which is Borrower's promissory note made in accordance with the Loan Agreement evidencing the following principal sum or such lesser amount as shall equal the aggregate amount disbursed to Borrower by Lender, with interest.

Which has a principal sum of Twenty-Eight Million One Hundred Fourteen Thousand Four Hundred Twenty-One Dollars and
No Cents ($28,114,421.00)

THIS DEED OF TRUST is made as of the Effective Date between the Trustor also referenced as the Borrower, the Trustee, and the Beneficiary also referenced as Lender.

Borrower, in consideration of the indebtedness described below and the trust created by this Deed of Trust, irrevocably grants and conveys the Property to Trustee, in trust with power of sale.

Together with all the improvements now or subsequently erected on the property, and all easements, rights, appurtenances, rents (subject, however, to the rights and authorities given to Lender to collect and apply such rents), royalties, mineral, oil and gas rights and profits, water, water rights, and water stock, and all fixtures, including but not limited to all gas and electric fixtures, engines and machinery, radiators, heaters, furnaces, heating equipment, steam and hot water boilers, stoves, ranges, elevators and motors, bathtubs, sinks, water closets, basins, pipes, faucets and other plumbing and heating equipment, cabinets, mantels, refrigerating plant and ref rigerators, whether mechanical or otherwise, cooking apparatus and appurtenances, furniture, shades, awnings, screens, venetian blinds and other furnishings, now or hereafter attached to the property, all of which, including replacements and additions ther eto, shall be deemed to be and remain a part of the property covered by this Deed of Trust; and all of the foregoing, together with said property (or the leasehold estate if this Deed of Trust is on a leasehold) are referred to as the "Property";

To secure to Lender: (a) the repayment of the Loan; and (b) the performance of the covenants and agreements of Borrower contained in this Deed of Trust, the Note, or the Loan Agreement.

Borrower covenants that Borrower is lawfully seised of the estate conveyed by this Deed of Trust and has the right to grant and convey the Property, and that Borrower will warrant and defend generally the title of the Property against all claims and demands, subject to any declarations, easements or restrictions listed in a schedule of exceptions to coverage in any title insurance policy insuring Lender's interest in the Property.

Borrower and Lender covenant and agree as follows:

2. Charges; Liens . Borrower shall pay al l taxes, assessments and other charges, fines and impositions attributable to the Property and leasehold payments or ground rents, if any by Borrower making payment, when due, directly to the appropriate payee. Borrower shall promptly furnish to Lender all notices of amounts due under this paragraph, and in the event that Borrower makes payment directly, Borrower shall promptly furnish to Lender receipts evidencing such payments. Borrower shall pay when due any encumbrance, charge and lien, with interest in accordance with its terms, on the Property or any portion which is inferior or superior to this Deed of Trust.

3. Hazard Insurance. Borrower shall keep the improvements now existing or later erected on the Property insured against loss of fire or hazards under a policy approved by Lender consistent with the insurance requirements of the Loan Agreement. In addition, Borrower shall insure against loss of all furniture, equipment and other personal property owned by Borrower related to Borrower's ope ration of the Property.

Lender shall have the right to hold the policies and policy renewals, and Borrower shall promptly furnish to Lender all renewal notices and all receipts of paid premiums. In the event of loss, Borrower shall give prompt notice to the insurance carrier and Lender. Lender may make proof of loss if not made promptly by Borrower.

RVP Group – Seller Carryback Deed of Trust and Assignment of Rents Page 3 Unless Lender and Borrower otherwise agree in writing, insurance proceeds shall be applied to restoration or repair of the Property damaged, as and to the extent provided in the Loan Agreement.

Unless Lender and Borrower otherwise agree in writing, any such application of insurance proceeds to principal shall not extend or postpone the due date of any Loan payment or change the amount of such payment. If the Property is acquired by Lender pursuant to this Deed of Trust, all right, title and interest of Borrower in and to any insurance policies and proceeds of such policies resulting from damage to the Property prior to the sale of acquisition shall pass to L ender to the extent of the sums secured by this Deed of Trust immediately prior to such sale or acquisition.

4. Liability Insurance. In addition to the casualty insurance required under the Loan Agreement during the course of construction, Borrower shall ke ep comprehensive general liability insurance for the Property in a form and coverage consistent with the provisions of the Loan Agreement and reasonably approved by Lender.

5. Preservation and Maintenance of Property. Borrower shall keep the Property in good repair and shall not commit waste or permit impairment, demolition, or deterioration of the Property.

6. Protection of Lender's Security. Borrower shall appear and defend any action or proceeding purporting to affect the security under this Deed of Trust or the rights of the Lender. If Borrower fails to perform the covenants and agreements contained in this Deed of Trust, or if any action or proceeding is commenced which materially affects Lender's interest in the Property, including, but not limited to, foreclosure, involuntary sale, eminent domain, insolvency, code enforcement, or arrangements or proceedings involving a bankrupt or decedent, then Lender may, upon notice to Borrower, make such appearances, disburse such sums and take such actions as are n ecessary to protect Lender's interest, including, but not limited to, disbursement of judgments, costs or reasonable attorney's fees and entry upon the Property to make repairs.

Any amounts disbursed by Lender pursuant to this Section 6, with interest, shall become additional indebtedness of Borrower secured by this Deed of Trust. Unless Borrower and Lender agree to other terms of payment, such amounts shall be payable upon notic e from Lender to Borrower requesting payment, and shall bear interest from the date of disbursement at the highest rate permissible under applicable law. In any event, this Section shall be construed as a right and an option of Lender and shall not be construed to require Lender to incur any expense or take any action.

8. Condemnation. The proceeds of any award or claim for damages, direct or consequential, in connection with any condemnation or other taking of all or any part of the Property, or for conveyance in lieu of condemnation, shall be applied as provided in the Loan Agreement.

If the Property is abandoned by Borrower, or if, after notice by Lender to Borrower that the condemnor offers to make an award or settle a claim for damages, Borrower fails to respond t o Lender within 30 days after the date such notice is mailed, Lender is authorized to collect and apply the proceeds, at Lender's option, either to restoration or repair of the Property or to the sums secured by this Deed of Trust.

Unless Lender and Borrower otherwise agree in writing, any such application of proceeds to principal shall not extend or postpone the due date of any payment or change the amount of such payment.

9. Borrower Not Released. Extension of the time for payment of the sums secured by this Deed of Trust granted by Lender to Borrower or any successor in interest of Borrower shall not operate to release, in any manner, the liability of the original Borrower and Borrower's successors in interest. Lender shall not be required to commence proceedings against such successor or refuse to extend time payment by reason of any demand made by the original Borrower or Borrower's successors in interest.

RVP Group – Seller Carryback Deed of Trust and Assignment of Rents Page 4

10. Forbearance by Lender Not a Waiver . Any forbearance by Lender in exercising any right or remedy under this Deed of Trust, or otherwise afforded by applicable law, shall not be a waiver or preclude the exercise of any such right or remedy. The procurement of insurance or the payment of taxes or other liens or charges by Lender shall not be a waiver of Lender's right to accelerate the maturity of the indebtedness secured by this Deed of Trust.

14. Governing Law; Severability. This Deed of Trust shall be governed by the law of the State of California.

15. Acceleration on Transfer or Refinancing of the Property; Assumption. Except as otherwise provided in the Loan Agreement, if all or any part of the Property or an interest in the Property is sold or transferred or refinanced by Borrower without Lender's prior written consent, Lender may, at Lender's option, declare all the sums secured by this Deed of Trust to be immediately due and payable. Lender shall have waived such option to accelerate if, prior to the refinancing, sale or transfer, Lender and the person to whom the Property is to be sold or transferred reach agreement in writing that the loan may be assumed. If Lender has waived the option to accelerate provided in this Section and if Borrower's successor in interest has executed a written assumption agreement accepted in writing by Lender, Lender shall release Borrower from all obligations under this Deed of Trust and the Note.

If Lender exercises such option to accelerate, Lender shall mail Borrower notice of acceleration. Such notice shall provide a period of not less than 30 days from the date the notice is mailed within which Borrower, or any of its principals or anyone with a substantial legal i nterest in Borrower, may pay the sums declared due. If Borrower fails to pay such sums prior to the expiration of such period, Lender may, without further notice or demand on Borrower, invoke any remedies permitted by this Deed of Trust.

16. Acceleration on Breach; Remedies . Except as provided in Section 15, upon Borrower's breach of any covenant or agreement of Borrower in this Deed of Trust, the Note, (including the covenants to pay when due any sums secured by this Deed of Trust and restri cting transfer of the Property) the Regulatory Agreement, or Loan Agreement, Lender shall mail notice to Borrower specifying: (1) the breach; (2) the action required to cure such breach; (3) a date, no less than 30 days from the date the notice is mailed to Borrower, by which breach must be cured; and (4) that failure to cure such breach on or before the date specified in the notice may result in acceleration of the sums secured by this Deed of Trust and sale of the Property. If the breach is not cured on or before the date specified in the notice, Lender at Lender's option may declare all of the sums secured by this Deed of Trust to be immediately due and payable without further demand and may invoke the power of sale and any other remedies permitted by applicable law. Lender shall be entitled to collect from the Borrower, or sale proceeds, if any, all reasonable costs and expenses incurred in pursuing the remedies provided in this Section, including, but not limited to reasonable attorney's fees.

RVP Group – Seller Carryback Deed of Trust and Assignment of Rents Page 5 If Lender invokes the power of sale, Lender shall execute or cause Trustee to execute a written notice of the occurrence of an event of default and of Lender's election to cause the Property to be sold and shall cause such notice to be recorded in each county in which any portion of the Property is located. Lender or Trustee shall mail copies of such notice in the manner prescribed by applicable law to Borrower and to the other persons prescribed by applicable law. Trustee shall give public notice of sale to the persons and in the manner prescribed by applicable law. After the lapse of such time as may be required by applicable law, Trustee, without demand on Borrower, shall sell the Property at public auction to the highest bidder at the time and place and under the terms designated in the notice of sale, in one or more parcels and in such order as Trustee may determine. Trustee may postpone sale of all or any parcel of the Property by public announcement at the time and place of any previously scheduled sale. Lender or Lender's designee may purchase the Property at any sale.

Trustee shall deliver to the purchaser a Trustee's deed conveying the Property so sold without any covenant or warranty, expressed or implied. The recitals in the Trustee's deed shall be prima facie evidence of the truth of the statements it contains. Trustee shall apply the proceeds of the sale in the following order:
(a) to all reasonable costs and expenses of the sale, including, but not limited to, reasonable Trustee's and attorney's fees and costs of title evidence; (b) to all sums secured by this Deed of Trust; and (c) the excess, if any, to the person or persons legally entitled thereto as determined by Lender. In the event of a dispute regarding the excess funds, either Lender or Trustee may file an action in interpleader to determine who shall receive the funds and may then deposit the excess funds with the court.

Upon acceleration for breach or abandonment of the Property, Lender, in person, by agent or by judicially appointed receiver shall be entitled to enter upon, take possession of and manage the Property and to collect the rents of the Property including those past due. All rents collected by Lender, its a gent, or the receiver shall be applied first to payment of the costs of management of the Property and collection of rents, including, but not limited to receiver's fees, premiums on receiver's bonds and reasonable attorney's fees, and then to the sums secured by this Deed of Trust. Lender, its agent and the receiver shall be liable to account only for those rents actually received.

18. Prior Lienholder . The provisions of this Deed of Trust shall operate subject to the claims of prior lienholders to the extent of such claims.

RVP Group – Seller Carryback Deed of Trust and Assignment of Rents Page 6

22. Request for Notice. Borrower and each party listed to receive Additional Notices request that copies of the notice of default and notice of sale be sent to their respective addresses.

24. Use of Property . Borrower shall not permit or suffer the use of any of the Property for any purpose other than the use for which the same was intended at the time this Deed of Trust was executed.

25. Extended Use Agreement. In order to receive an allocation of federal low income housing tax credits, Borrower will be required to record in the real property records of the County in which the property is located, an “extended low-income housing commitment” (as defined in Section 42(h)(6)(B) of the Internal Revenue Code of 1986, as amended (“Code”)) (“Extended Use Agreement”). Lender acknowledges and agrees that, in the event of a foreclosure of its interest under this Deed of Trust or delivery by Borrower of a deed in lieu thereof (collectively, a “Foreclosure”), Lender expressly agrees to undertake, with respect to low -income housing tenants, the requirements of Section 42(h)(6)(E)(ii) of the Code, as amended from time to time.

IN WITNESS WHEREOF, Borrower has executed this Deed of Trust.

BORROWER (Trustor):

RVP Group LP, a California limited partnership

By: RVP Group LLC, a California limited liability company, its managing general partner

By: Sacramento Housing Authority Repositioning
Program, Inc., a California nonprofit public
benefit corporation, its sole member and manager

By: _____________________________
James Shields, President
Exhibit 5: Escrow Instructions

JOINT ESCROW INSTRUCTIONS

FOR AGENCY LOAN
“Effective Date” May 1, 2023
A
gency and Borrower execute these Escrow Instructions as of the Effective Date. This document, including attachments and any amendments and additions, shall constitute the joint escrow instructions of Agency and Borrower for the Agency loan secured by the Property.

ARTICLE I. GENERAL TERMS.

1. GENERAL. These Escrow Instructions, in addition to items listed below, include Article II Instructions, which is attached to and incorporated in these Escrow Instructions by this reference.

2. DEFINITIONS. The capitalized terms in these Escrow Instructions shall have the meanings assigned i n A
rticle I General Terms and as defined in Article II Instructions . (Terms being defined ar e indicated by quot
ation marks.)
“Title
Company”
Placer Title Company
Address: 1180 Iron Point Road, Suite 140, Folsom, CA 95630 “Escrow” with
Title Company
Escrow
Number:
***TBD*** Attention: Jenny Vega
“Agency” Housing Authority of the City of Sacramento, a public body, corporate and politic Address: 801 12th Street, Sacramento, CA 95814
Attention: Seth Wight
“Borrower” RVP Group LP
Address: 801 12th Street, Sacramento, CA 95814
Attention: Larry Jenkins
“Closing Date” ***TBD***
“Property” Address: Pine Knoll – 917 38th Street, Sacramento, 95816; Big Trees – 2516 H Street, Sacramento, 95816;
Riverview Plaza – 600 I Street, Sacramento, 95814
APN: Pine Knoll – 008-032-025-0000, 008-0032-032-0000, 008-0032-033-0000; Big Trees – 007-0033-007-0000;
Riverview Plaza – 006-0032-029-001, 006- 0032-029-002, 006 -0032-029-003, 006-0032-028-004
Description of
the transaction Agency is providing Borrower with the following loans (aggregate $29, 104, 421.00):

1. Seller Carryback Loan - $28,114,421 made pursuant to the Sel ler Car ryback Loa n Agreement, evidenced by Seller Carryback Note and secured by the Seller Carryback Deed of Trust; and

2. Housing Authority F unds (HAF) Loan - $990,000 made pursuant to the HAF Loan A
greement, evidenced by HAF Note, secured by the Seller Carryback Deed of Trust, and recorded against the Property, the HAF Regulatory Agreement to assure a certain level of rental affordability; and

3. C
ash Proceeds Loan - $0.00 (as may be increased in accordance with the Special Terms) made pursuant to the Cash Proceeds Loan Agreement, evidenced by Cash Proceeds Note and secured by the Cash Proceeds Deed of Trust.

RVP Group – Joint Escrow Instructions Page 2
“Recorded Documents”- The
following documents are to be
recorded in the order liste d
(top being first in pr iority).

Copies o f th e Recorde d
documents are attached.

Documents:

1. Seller Carryback Deed of Trust

2. HAF Deed of Trust

3. HAF Regulatory Agreement

4. Cash Proceed Deed of Trust

Marked for return to:

“Borrower Items” Nine Hundred Ninety-Thousand Dollars and No Cents ($990,000.00) Conformed copies of the executed and recorded documents.

“Agency Title Policy” in the
form of an ALTA Agency’s
Policy insuri ng that the
following are valid liens
against the property:

Documents:

Coverage amount:

1. Seller Carryback Deed of Trust

2. HAF Deed of Trust

3. HAF Regulatory Agreement

RVP Group – Joint Escrow Instructions Page 3
ARTICLE II. INSTRUCTIONS

1. CLOSING DATE. Escrow shall close on or before the Closing Date as it may be changed from time t o time by written agreement of Borrower and Agency.

2.1. CONDITIONS. The following are conditions to the Close of Escrow:

2.1.1. The conditions precedent to performance stated in the Recorded D ocuments are satisfied as of the Closing Date.

2.1.5. On or bef ore the Close of Escrow, Borrower shall also deposit with Title Company the Agency Items and Borrower’s share of closing costs and fees.

RVP Group – Joint Escrow Instructions Page 4

2.3.1. Assure fulfillment of the Special Provisions;

2.3.2. Assure all documents are complete and affix legal d escriptions of the Property as necessary to complete them;

2.3.3. Obtain full execution of all unexecuted documents;

2.3.4. Date all undated documents as of the Closing Date;

2.3.5. Record the Recorded Documents in the priority listed;

2.3.7. Deliver the Agency Items to Agency and the Borrower Items to Borrower; and

2.5. COMMISSIONS. Agen cy is not responsible, by this Loan Agreement or otherwise, to pay commissions in relation to this transaction.

BORROWER :

RVP Group LP, a California limited
partnership

By: RVP Group LLC, a California limited
liability company, its managing general
partner

By: Sacramento Housing Authority
Repositioning Program, Inc., a
California nonprofit public benefit
corporation, its sole member and
manager

By:
_____________________________
James Shields, President

LENDER:

HOUSING AUTHORITY OF THE CITY OF

SACRAMENTO, A PUBLIC BODY,

CORPORATE AND POLITIC

BY: _______________________________________

LA SHELLE DOZIER, EXECUTIVE DIRECTOR

APPROVED AS TO FORM:

__________________________________________

LENDER COUNSEL

RVP Group – Joint Escrow Instructions Page 6

ACCEPTANCE OF ESCROW INSTRUCTIONS

Borrower agrees to indemn ify and hold you harmless from damages incurre d as a result of your good faith and diligent performance of your duties under these escrow instructions.

Upon your accept ance of these escrow inst ructions, return the exe cuted counterparts of these escrow instructions to Agency and Borrower, respectively.

Escrow Holder acknow ledges receip t of the foregoing esc row inst ructions and agrees to ac t as Escrow Holder and to comply with the terms and conditions of the escrow instructions.

Dated: _____________________________

ITLE COMPANY
TBD

By: ______________________________
Name:____________________________
Title:_____________________________
Its authorized agent and signatory

CASH PROCEEDS PERMANENT LOAN AGREEMENT

RVP GROUP
IN CONSIDERATION of their mutual promises, the parties agree as follows:

1. LOAN. Lender is making the Loan pursuant to the terms and conditions of this Loan Agreement. Lender and Borrower have entered this Loan Agreement as of the Effective Date.

Name RVP Group LP
Legal Status a California limited partnership
Principal Address 801 12th Street, Sacramento, CA 95814 “LOAN” The Loan made by this Loan Agreement.
“LOAN COMMITMENT” Lender’s loan commitment, made by letter dated as of June 14, 2022 “LOAN PROGRAM” Lender’s Loan Program, commonly known as Other: HACS Cash proceeds from the sale of improvements
“LOAN AMOUNT” Zero Dollars and No Cents ($0.00) as may be increased in accordance with the Special Terms in the Note.
“INTEREST RATE” The interest rate shall accrue on the unpaid Principal Amount of the Loan at the Applicable Federal Rate (AFR) in effect on the accrual date, per annum, and compounded annually. “MATURITY DATE” The first day of the 684th calendar month following the Effective Date. “PAYMENT SCHEDULE”
ANNUAL REPAYMENT: Annual principal and interest payments shall begin on May 1st following conversion to permanent financing. Annual payments will be made on a Residual Receipts basis, as defined below, until the maturity date. Annual payments shall be applied first to outstanding interest accrued and unpaid and then to principal. “Residual Receipts” is defined as follows: beginning from the Loan’s Effective Date, annual installments (as described in this paragraph) are to begin. Based on the annual audited financial statement from the preceding year, payments will be made upon a “Residual Cash Flow” basis meaning Net Operating Income (NOI) less:
i. to the Limited Partner for unpaid credit deficiency, taxes owed on taxable income allocated to the Limited Partner, and unpaid Investor Services Fees; ii. to r
eplenish the operating reserve to required level;
iii. to t
he property manager for the cash flow portion of property management fee (if related manager);
iv. t
o the developer to pay off remaining deferred Development Fee; Exhibit C
RVP Group – Cash Proceeds Loan Agreement Page 2
v. to the General Partner to reimburse operating deficit contributions, to reimburse cost overrun contributions (at the Limited Partner’s sole reasonable discretion after tax analysis), and for Partnership Administration Fee (if applicable);

vi. to contingent loan payments with limits for each loan scheduled in the projections and in accordance with the loan documents;

vii. to a percentage to the General Partner accompanied by a special allocation of income of such amount and the remainder to the Limited Partner per Section B above

To the extent that insufficient Residual Cash Flow is available to pay any of the amounts set forth in Sections (i) through (vii) when due, such amount shall accrue and be payable in the future when there is available Residual Cash Flow, after prior payment of all higher pri ority payments from Residual Cash Flow, as set forth above.

“Operating Expenses” shall mean actual costs, fees and expenses as evidenced by invoices attributable to the operation, recordkeeping, maintenance, taxes and management of the Project, including property management fees; taxes and assessments; payroll, benefits and payroll taxes of for property employees; insurance; security; painting, cleaning, repairs, and alterations; landscaping; sewer charges; utility charges; advertising, promotion and publicity; cable television, satellite and other similar services; office, janitorial, cleaning and building supplies; recreational amenities and supplies; purchase, repair, servicing and installation of appliances; costs and expenses associated with the provision of social and/or community services to the residents of the Project; equipment, fixtures and furnishing; fire alarm and elevator monitorin
g; fees and expenses of accountants, attorneys, consultants and other professionals. The definition will include deposits into operating and/or replacement reserves maintained by the Borrower but will not include initial deposits to capitalize the reserve accounts or amounts expended from a reserve account, or capital costs.

“BORROWER EQUITY”
No Less Than Thirty-One Million
Five Hundred Eighty -One Thousand
Dollars and No Cents ($31,581,000)
Which is the minimum amount of cash or cash equivalent
(excluding land equity or other non-cash investment in the Project) that Borrower is investing in the Project.

Big Trees: The Big Trees property is located at 2516 H Street located in the Midtown neighborhood. The property has a three‐story senior affordable housing development comprised of 29 one‐bedroom units that include a manager’s unit. Upon conversion to the RAD program, the management unit will become a restricted and assisted residential unit. Also, the property offers a community room with kitchenette and
laundry facilities.

Pine Knoll: The Pine Knoll property is located at 917 38th Street in the East Sacramento neighborhood. The property has a two‐story senior development comprised of 30 one‐
RVP Group – Cash Proceeds Loan Agreement Page 3
bedroom apartment units that include a manager’s unit. Upon conversion to the RAD program, the management unit will become a restricted and assisted residential unit. Management offices will be located at the Riverview Plaza site. The development also has a community room, kitchen, and
laundry room.

Riverview Plaza: The Riverview Plaza property is a mixed‐ use development located at 600 I Street in downtown
Sacramento. The development was constructed in 1988 with nine percent LIHTC financing in 1989. The senior residential portion of the building (floors 3‐14) consists of 123 one‐ bedroom units and one two‐bedroom manager unit. In
addition to the residential portion d escribed above, this development includes a courtyard and outdoor terraces,
swimming pool, fitness room, library, commercial kitchen, billiards room, craft room, television lounge, computer room, seating areas, an exercise room, and 12 laundry rooms. There is also a large indoor courtyard common area, the residential lobby, and restrooms. The 15th has a community/dining
room, commercial kitchen, and outdoor terraces. The 16th floor houses an exercise room, common area restrooms, and an outdoor swimming pool. The public access common area occupies two floors. The first floor includes the rental office that will serve residents from Big Trees, Pine Knoll, and Riverview Plaza, two former commission meeting rooms, a hair salon, daycare, and currently vacant deli/market space.

The second floor is vacant and ready for lease office spaces.

The rehabilitation of the Project will address interior improvements, repair and replacement of mechanical
systems, roofing, carpentry, plumbing, windows, and exterior finishes, Americans with Disabilities Act (ADA) upgrades, and site work detailed in the Scope of Development. Property Management will continue under HACS. In lieu of on‐site manager units, both Big Trees and Pine Knoll will employ an equivalent number of on‐site full-time property management staff to comply with SHRA’s Minimum Construction
Standards required during the rehabilitation period. There will also be 24‐hour security available for the residents of Central City II

B. “COLLATERAL” The Collateral securing repayment of the Loan, which Collateral consists of the following:
“PROPERTY” Leasehold interests in the following described real property, which is security for the Loan and the site of the Project:

Address
Pine Knoll –917 38th Street, Sacramento, 95816;
Big Trees–2516 H Street, Sacramento, 95816;
Riverview Plaza–600 I Street, Sacramento, 95814
Assessor’s Parcel
Number
Pine Knoll – 008-032-025-0000, 008-0032-032-0000, 008-0032-033-0000; Big Trees – 007-0033-007-0000;
Riverview Plaza – 006-0032-029-001, 006-0032-029-002, 006-0032-029-003, 006-0032-028-004 “Legal Description” The Property is situated in the State of California, County of Sacramento, and is more particularly described in Exhibit 1: Legal Description attached and incorporated by reference.

Borrower’s Title
Interest Borrower has leasehold interest in the Property “ADDITIONAL
COLLATERAL”
The Additional Collateral securing repayment of the Loan is any additional security required by Lender under this Loan Agreement, including without limitation the following items, if any RVP Group – Cash Proceeds Loan Agreement Page 4

“PERSONAL PROPERTY”
Borrower’s interest in the following
personal property, tangible and
intangible, and all other such property
listed as security in this Loan
Agreement:

Materials and supplies for the Project,
Assigned Documents
OTHER ADDITIONAL COLLATERAL Borrower’s interest in the following property: None

C. “ESCROW INFORMATION”:
“Title Company” and
“Escrow Agent” Placer Title Company Which is the title company that will issue the Title Policy and that will act as Escrow Agent for the Escrow.
“Escrow” The escrow with Escrow Agent
“Closing Date” ***TBD*** Which is the date for close of the Escrow, as it may be extended.

D. “LIST OF EXHIBITS” (The following are attached and incorporated in this Loan Agreement):

E. “APPROVAL DOCUMENTS” Borrower shall submit the following documents for Lender approval:

Construction Agreement for the Project
Architectural Agreement for the Project
Borrower’s organizational documents, such as partnership agreements or corporate articles and by -laws “Budget” for the Project
Evidence of financing as described in this Loan Agreement Plans and Specifications as defined in this Loan Agreement Relocation Plan

F. “ASSIGNED DOCUMENTS” Borrower shall assign the following documents to Lender:

Subject to the interests of any senior lender, any lease and rental agreements for the Property, or any part of it.

G. “CONSTRUCTION INFORMATION”:
“Completion Date” ***TBD*** Which is the date on or before which the Completion of the Project must occur.
“General Contractor” ***TBD*** Which is the general contractor for construction of the Project.
“Project Architect” LPAS Architecture and Design
Inc. Which is the architect for design of the project.
“Retention”
The following percentage of each disbursement made
for construction work, in aggregate not to exceed the
following percentage of the Loan Amount, which shall
be retained by Lender for disbursement with the final
disbursement of the Loan:

Percentage of
Loan: N/A
RVP Group – Cash Proceeds Loan Agreement Page 5
H. “SPECIAL PROVISIONS” The following special provisions shall be in addition to the provisions of this Loan Agreement:

1. Upon the effectiveness of any amendment to the Note, each reference in this Agreement to the Note will mean and be a reference to the Note as amended.

2. Lender acknowledges __________, is the limited partner of Borrower (the “Investor Limited Partner”), whose address is:

_________________

Lender shall provide copies of notices to Borrower to the Investor Limited Partner at the address set forth above; provided, however, that Lender’s failure to deliver notice to the Investor Limited Partner shall have no effect on Lender’s rights and remedies or Borrower’s obligations under the Loan Documents.

3. Loan Proceeds shall be used solely for permanent financing. No Loan Proceeds shall be used for predevelopment costs, except as provided in an approved Lender budget. Unless otherwise noted in the budget, predevelopment costs are not subject to withholding as Retention.

3. DEFINITIONS. Terms not defined in this Loan Agreement shall have the definitions assigned in the Trust Deed.

As used in this Loan Agreement, the following terms shall have the following meanings:

3.1. “Budget” is the budget approved by Lender for the development of the Project.

3.2. “California Environmental Quality Act” or “CEQA” is established in the California Public Resources Codes § 21000 et seq. and is applicable to private activities requiring discretionary governmental approvals (Pub. Res.

Code §210001.1, 21001, 21080 and 14 California Code of Regulations § 15002(c).

3.3. “Change” means any extra work or installation of materials not included in the Plans and Specifications or any change in or deviation from the Plans and Specifications.

3.4. “Close of Escrow” means the fulfillment of the Escrow terms and conclusion of the Escrow, including, without limitation, the execution of unexecuted documents, the recordation of documents specified for recording, the issuance of title insurance policies, the payment of fees and the delivery of funds and docume nts as directed in the escrow instructions for the Escrow. The Close of Escrow shall occur on the Closing Date.

3.5. “Completion of the Project” means that, in Lender's sole judgment the Project has been constructed, rehabilitated, completed, equipped, and fu rnished in a good and proper manner in accordance with the Plans and Specifications, the Scope of Development and the Budget as approved by Lender; all notices of completion with respect to the Project have been filed and all statutory lien periods have expired or appropriate lien waivers have been obtained; all costs of constructing the Project have been paid, including, without limitation, interest on the Note which may be due prior to the Completion Date; all necessary certificates of occupancy or building permit sign-offs have been issued; and all of the conditions to final disbursement of the Loan have been satisfied.

3.6. “Environmental Review” means the investigation and analysis of the Project’s impacts on the environment as may be required by CEQA and/or National Environmental Policy Act (NEPA), or of the Project’s impacts on any species of plant or animal listed as a species of concern, or a threatened or endangered species under California or federal laws or regulations.

3.7. “Escrow” is the escrow with Title Company for the closing of the Loan.

3.8. “Escrow Instructions" means the Escrow Instructions for the Escrow signed by each of the parties to this Loan Agreement.

3.9. “Event of Default” is breach of or default in a party’s obligations under this Loan Agr eement, the Trust Deed, the Note, the Regulatory Agreement and any other instrument which is incorporated in this Loan Agreement or which otherwise secures the repayment of the Loan.

RVP Group – Cash Proceeds Loan Agreement Page 6

3.10. “Financial Statements” means the certified financial statements of Borr ower (and any other persons on whose financial capacity Lender has relied in making this Loan) as may be required by Lender from time to time, including operating statements, balance sheets, and any other financial reports and information that Lender may require.

3.11. “Fixtures” means all fixtures located on or within the Project or now or later installed in or used in connection with any of the Project, including, as applicable and without limitation, all partitions, screens, awnings, motors, engines, boilers , furnaces, pipes, plumbing, elevators, cleaning and sprinkler systems, fire extinguishing apparatus and equipment, water tanks, heating, ventilating, air conditioning and air cooling equipment, built -in refrigerators, and gas and electric machinery, appurtenances, and equipment, whether or not permanently affixed to the Project.

3.12. “General Contractor” means the general contractor named by Borrower in its application or supporting documents as the general contractor to do the Project, or any other general contractor so designated by Borrower and approved in writing in advance by Lender.

3.13. “Governmental Authority” means the United States of America, the State of California, the County of Sacramento, the City of Sacramento or any other political subdivision, agency, department, commission, board, bureau, or instrumentality of any of them.

3.14. “Governmental Requirement” means any law, ordinance, order, rule, regulation, plan, ruling, determination or requirement of a Governmental Authority.

3.15. “Loan” is the loan from Lender to Borrower made pursuant to this Loan Agreement.

3.16. “Loan Agreement” means this Construction and Permanent Loan Agreement, all exhibits attached to this Loan Agreement (which are incorporated in this Loan Agreement by this reference) and the Loan Documents which are not otherwise included in this definition.

3.17. “Loan Documents” means the Note, this Loan Agreement, the Security Documents, the Regulatory Agreement, and all other documents (including guaranties, if any) evidencing, securing, or r elating to the Loan.

3.18. “Loan Maturity Date” means the date on which the entire unpaid balance of the Loan, including principal and interest, is due and payable.

3.19. “Loan Proceeds” means funds disbursed by Lender on account of the Loan and pursuant to this Loa n Agreement.

3.20. “Mitigation Measure(s)” means those feasible measures, actions, or features that are to be incorporated into the Project in order to avoid or substantially reduce the Projects significant impact on the environment.

3.21. “National Environmental Policy Act” or “NEPA” contains the federally required procedures to review and analyze the effect and impact of the Project on the environment as applied to the Project under 24 Code of Federal Regulations Parts 50 and 58 et seq.

3.22. “Note” means that certain promissory note evidencing the Loan and attached hereto as Exhibit 3.

3.23. “Other Lender Draw” means a draw request or other request for disbursement submitted to another lender for the Project.

3.24. “Person” means any natural person, corporation, firm, partnership, association, trust, government, governmental agency, or any other entity, whether acting in an individual, fiduciary, or other capacity.

3.25. “Personalty” means, whether or not listed as Additional Collateral, all of Borrower's interest in all accounts, contract rights, and general intangibles (specifically including any insurance proceeds and condemnation awards) arising out of the ownership, development, or operation of the Property, and all furniture, furnishings, equipment, machinery, constr uction materials and supplies, leasehold interests in personal property, and all other RVP Group – Cash Proceeds Loan Agreement Page 7
personal property (other than Fixtures) of Borrower now or later located about the Property, together with all present and future attachments, accessions, replacements, substitutions, and additions, and the cash and noncash proceeds.

3.26. “Plans and Specifications” means the final set of architectural, structural, mechanical, electrical, grading, sewer, water, street, and utility plans and specifications for the Project, including all supplements, amendments, and modifications.

3.27. “Potential Default” means an event that would constitute an Event of Default but for any requirement of notice to be given or period of grace or time to elapse.

3.28. “Project” means the development of the Property in accordance with the Plans and Specifications including, without limitation, all existing buildings, improvements, and appurtenances on the Property, all work of demolition and rehabilitation to be conducted on the Property, and all improvements , additions, and replacements constructed or placed at any time on the Property.

3.29. “Retention Draw” means the receipt by Borrower of any sums held by a lender for disbursement of a contractor’s retention after Borrower has completed the project.

3.30. “Security Documents” means the Trust Deed, together with all other documents entered into between Borrower and Lender or by Borrower in favor of, or for the benefit of, Lender that recite that they are to secure the Loan.

3.31 “Senior Lender” means the maker of a loa n with a lien senior to the Loan as set forth on the Title Policy.

3.32. “Title Policy” means the title insurance policies to be issued in connection with this Loan, as further defined in the Escrow Instructions.

3.33. “Trust Deed” means that certain Deed of Trust and Assignment of Rents between Borrower, as trustor, Lender, as beneficiary, and trustee which secures the Note and is attached hereto as Exhibit 4.

3.34. “Unavoidable Delay” is a delay in the performance by a party of any obligation which delay is unforeseeable and beyond the control of such party and without its fault or negligence. Unavoidable Delay shall not be reasonably foreseeable events consisting solely of acts of God, acts of the public enemy, acts of the Federal Government, acts of the other party, fires, floods, epidemics, quarantine restrictions, strikes, freight embargoes, and unusually severe weather (as for example, floods, tornadoes, or hurricanes) or delays of subcontractors due to such causes. In the event of the occurrence of any such enforced delay, the time or times for performance of such obligations of the parties shall be extended for the period of the enforced delay, as determined by Lender, provided that the party seeking the benefit of the provisions of this Section shall, within thirty (30) days after it has or should have knowledge of any such enforced delay, have first notified the other party, in writing, of the delay and its cause, and requested an extension for the period of the enforced delay.

4. B
ORROWER'S REPRESENTATIONS AND WARRANTIES. As a material inducement to Lender to enter into this Loan Agreement and to make the Loan to Borrower, Borrower unconditionally, and each signatory who signs on its behalf, to the extent of their actual knowledge, represents and warrants to Lender, as of the Close of Escrow, as follows:

4.1. LEGAL ORGANIZATION. Borrower is duly formed and validly exists in the form stated in Section 2 hereof, is qualified to do business in California, and has full power to consummate the transactions cont emplated.

4.2. BORROWER'S POWERS. Borrower has full authority to execute this Loan Agreement, the Note, the Trust Deed, and all of the other Loan Documents, to undertake and consummate the contemplated transactions, and to pay, perform, and observe all of the conditions, covenants, agreements, and obligations.

4.3. B
INDING OBLIGATION. This Loan Agreement, the Note, the Trust Deed, and each of the other Loan Documents constitute a legal and binding obligation of, and are valid and enforceable against, each party other than Lender, in accordance with the terms of each.

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4.4. LITIGATION. There are no actions, suits, or proceedings pending or, to the best knowledge of Borrower, threatened against or affecting Borrower, the Property, or any part of it, or involving the val idity or enforceability of the Trust Deed, the priority of the lien, or the validity or enforceability of any of the other Loan Documents, at law or in equity, or before or by any Governmental Authority. Borrower is not in default with respect to any order, writ, injunction, decree, or demand of any court or other Governmental Authority.

4.5. NO OTHER BREACH. The consummation of the transactions covered by this Loan Agreement and the payment and performance of all of the obligations in the Loan Documents will not result in any breach of, or constitute a default under, any mortgage, deed of trust, lease, cont ract, loan or credit agreement, corporate charter, bylaws, partnership agreement, trust agreement, or other instrument to which Borrower or any of its general partners is a party or by which it or they or the Property may be bound or affected.

4.6. NO DEFAULT. There is no Event of Default or Potential Default on the part of Borrower.

4.7. TITLE TO PROPERTY. Borrower has leasehold title to the Property, which is free of all claims, liens, and encumbrances other than those shown in the Title Policy.

4.9. TITLE OF PERSONALTY. All Personalty is vested solely in Borrower, free of all claims, liens, and encumbrances except for those in favor of Senior Lender.

4.11. T
AXES PAID. Borrower has filed all required Federal, State, County, and City tax returns and has paid all taxes due and owing. Borrower knows of no basis for additional assessments with respect to any taxes, other than the lien of taxes not yet due.

4.12. PLANS AND SPECIFICATIONS. The Plans and Specifications are satisfactory to Borrower and the General Contractor and have been approved by Lender and all other construction lenders. There are no structural defects in the Project as shown in the Plans and Specifications that are known to or reasonably should have been known to Borrower or its agents and employees, and to the best of Borrower's knowledge, no violation of any Governmental Requirement, including but not limited to an environmental requirement, exists.

4.13. ACCURACY. All applications, Financial Statements, reports, documents, instruments, information, and forms of evidence delivered to Lender concerning the Loan or required by this Loan Agreement or any of the other Loan Documents are accurate, correct, and sufficiently complete to give Lender true and accurate knowledge of their subject matter, and do not con tain any untrue statement of a material fact or omit any material fact necessary to make them not misleading.

5. B
ORROWER’S COVENANTS AND CONDITIONS. From the Effective Date until payment and performance in full of all obligations of Borrower under this Loa n Agreement, the Note, the Security Documents, and the other Loan Documents or the earlier release of the liens of the Loan Documents (and all related obligations) in accordance with the terms of this Loan Agreement, the Note, the Security Documents, and t he other Loan Documents, Borrower hereby covenants and agrees with Lender that:

5.1. U
SE OF PROCEEDS. All Loan Proceeds will be disbursed as provided in this Loan Agreement and used only for payment of the costs of construction of the Project in accordance wi th the Plans and Specifications and for other purposes specified in the Loan.

5.2. PROPERTY MANAGEMENT. Subject to Lender’s written approval, Borrower shall obtain and maintain for the life of the Loan a top quality property management agreement with a duly a ccredited real estate property RVP Group – Cash Proceeds Loan Agreement Page 9
management company for the management of the Property, and shall assure compliance of the property manager with the property management agreement. Lender shall not disburse any funds under this Loan Agreement unless and unti l it has reviewed and approved the agreement as adequate and the property management company as top quality and duly accredited. Lender shall have the right to review and approve or reject any proposed changes to scope of said agreement and to changes in the real estate property management company prior to making such changes. Any such changes made without Lender approval shall be an Event of Default under this Loan Agreement. Lender has approved Sacramento Housing and Redevelopment Agency as the qualified property management company for the Project.

Borrower agrees that at all times the Project shall be managed by a property manager (i) approved by the Lender in its reasonable discretion and (ii) who has successfully managed at least five projects ove r forty units in size and subject to a recorded regulatory agreement or RAD Use Agreement for at least three years’ prior to the application, without any record of material violations of discrimination restrictions or other state or federal laws or regulations or local governmental requirements applicable to such projects (the “Manager”). The Borrower shall submit to the Lender from time to time such information about the background, experience and financial condition of any existing or proposed Manager as the Lender may reasonably require to determine whether such Manager meets the requirements for a Manager set forth herein. The Lender reserves the right to conduct periodic reviews of the management practices of the Manager to determine if the Project is b eing operated and managed in accordance with the requirements and standards of this Loan Agreement. The Borrower agrees to cooperate with the Lender in such reviews.

If the Lender determines in its reasonable judgment that the Project is not being operate d and managed in accordance with one or more of the material requirements or standards of this Loan Agreement, the Lender may deliver notice to the Borrower requesting replacement of the Manager, which notice shall state clearly the reasons for such request. The Borrower agrees that, upon receipt of such notice, the Borrower shall within 60 days submit to the Lender, a proposal to engage a new Manager meeting the requirements of this provision. The Lender shall respond within 30 days to such proposal or such approval shall be deemed given. Upon receipt of such consent or deemed consent, the Borrower shall promptly terminate the existing Manager’s engagement and engage the new Manager. In addition, all management agreements between the Borrower and Manager sh all include a clause alerting the Manager that Lender may require Borrower to terminate the management agreement for the aforementioned reasons.

The Borrower shall not enter into any management agreement or arrangement with any party with respect to the management of the Project without the Lender's prior written consent, such consent not to be unreasonably withheld or delayed. The Borrower shall not materially modify, amend or terminate any approved management agreement (other than as required to comply w ith the terms of this Loan Agreement and/or applicable law) without the Lender's prior written consent, which consent will not be unreasonably withheld or delayed; provided, however, that such consent shall not be required to extend the term of an existing management agreement.

5.3. B
ORROWER'S RESPONSIBILITIES. Borrower will, at Borrower's expense, defend, indemnify, save, and hold Lender harmless against all claims, demands, losses, expenses, damages (general, punitive, or otherwise), and causes of action (whether legal or equitable) asserted by any Person arising out of the use of the proceeds of the Loan.

Borrower will pay Lender on demand all claims, judgments, damages, losses, or expenses (including attorney fees and expenses) incurred by Lender as a resul t of any legal action arising out of the use of the proceeds of the Loan. The provisions of this Section will survive the termination of this Loan Agreement and the repayment of the Loan.

6. INSURANCE.

6.1. PROPERTY INSURANCE. Borrower shall procure and maintain property insurance in a form and substance approved by Lender. Coverage shall be for protection against loss of, or damage to the Property and its improvements to their full insurable value. Borrower shall also procure and maintain insurance against specific hazards affecting Lender's security for the Loan as may be required by Lender, governmental regulations, or any permanent lender. All such policies shall contain a standard mortgagee loss payable clause in favor of Lender. The insurance required shall be written with a deductible of not more than Twenty-Five Thousand Dollars ($25,000.00).

6.2. COMMERCIAL GENERAL LIABILITY AND OTHER INSURANCE. Borrower shall carry insurance as set forth below, effective prior to th e disbursement of the Loan, and such insurance shall be maintained in full force and effect at all times. Such insurance coverage must list Lender as an additional insured, and must be approved in writing by Lender prior to the disbursement of the Loan.

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6.2.1 Commercial general liability insurance, in Insurance Services Office (ISO) policy form CG 00 01 or equivalent, with limits of liability not less than: $1,000,000 per occurrence, and $2,000,000 general aggregate, all per location of the project, such coverage to include contractual liability to include bodily injury, property damage and personal injury;

6.2.2 Personal injury insurance with the employment exclusion deleted, unless Lender gives prior written approval for the employment exclusion to remain in the policy;

6.2.3 Workers’ compensation and all other insurance required under applicable law, in the amount required by applicable law or by Lender, whichever amount is greater.

6.3 INSURANCE PROVISIONS. Each policy of insurance required under this Loan Agreeme nt shall be obtained from a provider licensed to do business in California and having a current Best's Insurance Guide rating of A VII or better, which rating has been substantially the same or increasing for the last five (5) years, or such other equivale nt rating, as may reasonably be approved by Lender's legal counsel. Each policy shall contain the following provisions as applicable, unless otherwise approved by Lender's legal counsel in writing in advance:

6.3.1 A
DDITIONAL INSURED. Borrower shall obtain a policy in ISO form CG 20 33, or equivalent, naming Lender as additional insured under the Commercial General Liability Policy at the same limits as required above.

6.3.3 C
ERTIFIED POLICY COPY. Borrower shall provide Lender with a certifi ed copy of each required policy of insurance, upon request by Lender. Borrower shall provide Lender with a Certificate of Insurance of Insurance for each policy on the applicable ACORD form. And, specific sections of the policy may be requested by Lender for review. The ACORD form shall not substitute for the policy, if the policy is requested. The most current ACORD 25- S “Certificate of Liability Insurance shall be used for liability insurance.

6.3.4 C
ANCELLATION. Each policy shall bear an endorsement prec luding cancellation or termination of the policy or reduction in coverage unless Lender has been given written notice of such intended action at least thirty (30) days prior to its effective date. In the alternative to such endorsement, Borrower will provide Lender with the cancellation clause and/or any amendatory endorsements that modify or change the policy cancellation clause of the insurance policies in force. It is Borrower’s responsibility to notify Lender of any notice of cancellation, non- renewal or non- payment of premium in accordance with your policy provisions. In the event insurance is cancelled or not renewed, Borrower shall notify Lender within forty-eight (48) hours of such cancellation or non-renewal.

_____Borrower’s Initials

7. NONLIABILITY FOR NEGLIGENCE, LOSS, OR DAMAGE. Borrower acknowledges, understands, and agrees as follows:

7.1. The relationship between Borrower and Lender is, and will at all times remain, solely that of borrower and lender, and Lender neither undertakes nor assumes any responsibility for or duty to Borr ower to select, review, inspect, supervise, pass judgment on, or inform Borrower of the quality, adequacy, or suitability of the Project work, except as to matters which are within the intent and purpose for which Lender has made the Loan.

7.2. Lender owes no duty of care to protect Borrower against negligent, faulty, inadequate, or defective building or construction.

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7.4. BORROWER RESERVES. Borrower shall maintain reserves for replacement and repairs required to be made to the Property, fixtures on the Property or personal property used on the Property, or otherwise as approved by Lender, in an amount, at all times, of not less than Five Hundred and No/100 Dollars ($ 500.00) per unit per year.

7.5. FINANCIAL REPORTING. During the term of the Loan, Borrower shall deliver to Lender within 120 days of the end of each calendar year audited Financial Statements prepared in accordance with generally accepted accounting principles and signed by authorized officers of Borrower. Prior to the Close of Escrow and during the term of the Loan, Borrower shall deliver to Lender any such additional Financial Statement as may be requested by Lender.

Lender reserves the right to review and approve Financial Statements and other credit information and references prior to the Close of Escrow. During the term of the Loan, Borrower must deliver to Lender a monthly rent -roll including household composition information and operating statements with respect to the Property and improvements, as Lender may request.

7.6. BOND PROCEEDS. Borrower shall secure financing in the amount of _____________No/100 Dollars ($_____________.00) in bond proceeds from the Housing Authority of the City of S acramento

8. LOAN. Lender agrees to lend to Borrower, and Borrower agrees to borrow from Lender, an amount not to exceed the Loan Amount, to finance the development of the Project and for other purposes as specified in the Scope of Development, subject to the terms, conditions, representations, warranties, and covenants in this Loan Agreement.

8.1. P
RINCIPAL AMOUNT. The principal amount of the Loan shall be the actual disbursements of Lender on account of the Project, not to exceed the amounts stated in the B udget (as the Budget may be adjusted by written approval of Lender). In any event, the principal amount of the Loan shall not exceed the Loan Amount.

8.2. USE OF LOAN PROCEEDS. Loan Proceeds shall be used solely for actual costs of the Project as stated in the Budget. No Loan Proceeds shall be used for any costs, except as provided in the Budget. Unless otherwise noted in the Budget, allowed predevelopment costs, if any, are not subject to the withholding as Retention.

8.3. LOAN TERMS. The Loan is made pursuant to the Loan Program and is subject to the laws, rules and regulations of the Loan Program. Lender agrees to disburse the Loan Proceeds in the manner and subject to the limitations stated in this Loan Agreement. Interest, at the Interest Rate, shall accr ue on each disbursement of Loan Proceeds commencing on the date on which each such disbursement is made. Repayment of the loan shall be made, in payments of principal and interest, in lawful tender of the United States, in accordance with the Payment Sche dule.

8.4. N
OTE AND SECURITY DOCUMENTS. The Loan is evidenced by the Note executed by Borrower in favor of Lender and delivered to Lender upon Close of Escrow. Repayment of the Note is secured by the Trust Deed covering the Property and the Project. Borrower shall execute the Trust Deed in favor of the Title Company as Trustor in trust for the benefit of Lender and deliver it to Escrow for recordation. The Loan is also secured by the Additional Collateral, if any, as evidenced by the applicable Security Documents.

8.5. SECURITY AGREEMENT. This Loan Agreement is a "security agreement" within the meaning of the Uniform Commercial Code. Borrower by executing and delivering this Loan Agreement has granted and hereby grants to Lender, as security for the Loan, a s ecurity interest in the Additional Collateral to the full extent that the Additional Collateral may be subject to the Uniform Commercial Code. Borrower irrevocably appoints Lender as its true and lawful limited attorney-in-fact solely to execute and deliver any and all financing statements pursuant to the appropriate statutes, and any other documents or instruments as are required to convey to Lender a valid perfected security interest in the Additional Collateral. Borrower agrees to perform all acts whic h Lender may reasonably request so as to enable Lender to maintain such valid perfected security interest in the Additional Collateral in order to secure the payment of the Note in accordance with their terms. Lender is authorized to file a copy of any su ch financing statement in any jurisdiction(s) as it shall deem appropriate from time to time in order to protect the security interest established pursuant RVP Group – Cash Proceeds Loan Agreement Page 12
to this Loan Agreement. Lender may require at any time, and from time to time additions of new cont racts and other property to the Additional Collateral. Borrower irrevocably assigns to Lender, effective upon Lender’s written demand, as security for the due performance of this Loan Agreement all of its right, title, and interest in the Assigned Documents.

8.6. REGULATORY AGREEMENT. The Regulatory Agreement imposing covenants, conditions and restrictions running with the land is a material consideration for the making of the Loan. Borrower shall execute the Regulatory Agreement prior to Close of Escrow and deliver it to Escrow for r ecordation. Violation of the Regulatory Agreement is an Event of Default of this Loan.

8.7. ESCROW. The parties shall open the Escrow promptly after the Effective Date. Escrow shall close as provided in the Escrow Instructions on or before the Closing Date.

8.8. COMMISSIONS. Lender is not responsible, by this Loan Agreement or otherwise, to pay commissions in relation to this transaction.

8.9. A
CCELERATION ON TRANSFER OR REFINANCING OF THE PROPERTY; ASSUMPTION. Except as otherwise provided in the Loan Agreement, if all or any part of the Property or an interest in the Property is sold, transferred or conveyed to any person, or refinanced by Borrower such that additional debt is added to the Property or the cash flows change without Lender's prior written consent, Lender may, at Lender's option, declare all the sums secured by the Trust Deed to be immediately due and payable. Lender shall have waived such option to accelerate if, prior to the sale or transfer, Lender and the Person to whom the Property is to be sold or transferred reach agreement in writing that the Loan may be assumed. If Lender has waived the option to accelerate provided in this Section and if Borrower's successor in interest has executed a written assumption agreement accepted in writing by Lender, Lender shall release Borrower from all obligations under the Trust Deed and the Note.

9.7 (CLTA endorsement nos. 100 and 116) and ALTA endorsement no. 25 (CLTA endorsement no. 116) insuring Lender in an amount equal to the principa l amount of the Loan, that Lender 's Trust Deed constitutes a third lien or charge upon the Property and improvements subject only to such items as shall have been approved by Lender. There must be no exceptions permitted for mechanics liens. Title insura nce for the Loan must be issued by a title insurer approved by Lender.

10. P
ERFORMANCE CONDITIONS. The following are conditions precedent to performance under this Loan Agreement:

10.1. CONDITION OF TITLE. Lender shall cause Escrow Agent to issue to Borrower (with a copy to Lender) the Preliminary Report, together with copies of all documents relating to title exceptions referred to in the Preliminary Report. At Close of Escrow, Lender’s Trust Deed shall be a valid lien against the Property securing the Loan and subject to no exceptions to title (of record or off record) other than the exceptions listed in the “Conditions of Title” in the Escrow Instructions.

10.2. C
ONDITIONS TO LENDER'S PERFORMANCE. Lender's obligation to perform under this Loan Agreement is subject to all of the following conditions: (a) Borrower has performed all of its obligations then to be performed pursuant to this Loan Agreement; (b) Borrower has met the Additional Conditions to Close of Escrow and applicable Special Provisions, if any; (c) the closing conditions as defined in the Escrow Instructions have been fulfilled as of Close of Escrow; (d) Borrower’s representations and warranties in this Loan Agreement are true and correct as of the date of this Loan Agreement and as of Close of Escrow ; (e) this Loan Agreement continues to be in full force and effect, no default on the part of Borrower has occurred under this Loan Agreement, and no event has occurred that, with the giving of notice or the passage of time, will constitute a default by Borrower under this Loan Agreement; and (f) Lender has approved the Approval Documents.

10.3. C
ONDITIONS TO BORROWER'S PERFORMANCE. Borrower's obligation to perform under this Loan Agreement is subject to satisfaction of all of the following conditions: (a) the closing conditions as defined in the Escrow Instructions have been fulfilled as of Close of Escrow; (b) Lender has met the Additional Conditions to Close of Escrow and applicable Special Provisions, if any; (c) Lender’s representations and warranties in this Loan Agreement are true RVP Group – Cash Proceeds Loan Agreement Page 13
and correct as of the date of this Loan Agreement and as of the Close of Escrow; and (d) this Loan Agreement continues to be in full force and effect, and no default on the part of Lender has occurred under this Loan Agreement.

Borrower’s failure to comply with the reloca tion requirements as stated in this Section 9 or a relocation plan prepared for this Project, is an Event of Default, subject to Borrower’s opportunity to cure in accordance with applicable law.

11.1. R
ELOCATION COSTS. Unless otherwise stated in this Loan Agreement, any amounts paid by Lender for relocation costs and services shall be considered advances under the Loan.

11.2. COOPERATION AND ACCESS. Borrower shall cooperate fully with Lender in complying with such relocation laws, including without limitation, providing Lender access to all tenants of the Property, to all books and records related to the tenants of the Property and to all properties offered for temporary or permanent relocation. Prior to taking any action with respect to relocation of tenants, Borrower shall meet with Lender to establish reasonable protections for tenants and related reporting requirements for Borrower.

11.3. B
ORROWER AS RELOCATION AGENT. With the approval of Lender, Borrower may act as Lender’s agent in accomplishing such relocation. Lender and Borrower by memorandum in writing shall establish their respective duties related to such relocation. If Lender and Borrower agree that Borrower will act as Lender’s agent for purposes of this Loan, Borrower may enter into agree ments for the provision of relocation services, or Borrower may perform such services directly.

Borrower shall, by provisions in its agreements or by direction to its staff, assure that the entity performing the relocation services: (a) shall comply with all applicable law; (b) shall fully inform Lender of all relocation activities; (c) shall make all requests for direction or clarification to Lender; and (d) shall respond to and follow Lender’s instruction and direction.

12. EMPLOYMENT. Borrower shall not discriminate against any employee or applicant for employment because of sex, race, color, religion, ancestry, national origin, disability, medical condition, marital status, or sexual orientation.

Borrower will take affirmative action to ensure that app licants are employed, and that employees are treated during employment, without regard to their sex, race, color, religion, ancestry, national origin, disability, medical condition, marital status, or sexual orientation. Such action shall include, but not limited to, the following: employment, upgrading, demotion or transfer; recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selection for training, including apprenticeship. Borrower agrees to post in conspicuous places, available to employees and applicants for employment, notices to be provided by Lender setting forth the provisions of this nondiscrimination clause.

13. E
CONOMIC OPPORTUNITY EMPLOYMENT REQUIREMENTS. This Loan requires that to the greatest extent feasible, opportunities for training and employment be given to lower income residents in and around the area of the project. Borrower will instruct its General Contractor and its subcontractors to utilize lower income project area residents as employees to the greatest extent feasible by:

(a) Identifying the number of positions in the various occupational categories including skilled, semi-skilled, and unskilled labor, needed to perform each phase of the Project ;

RVP Group – Cash Proceeds Loan Agreement Page 14
(d) Establishing the positions identified in Paragraph (3) of this subsection, a goal which is consistent with the purpose of this subsection within each occupational category of the number of positions to be filled by lower income Project area residents; and

(e) Making a good faith effort to fill all of the positions established in Paragraph (4) of this subsection with lower income Project area residents through Greater Sacramento Urban League, Sacramento Works, Sacramento Employment Training Agency, or similar local workforce agencies.

13.1 ADVERTISING. Borrower will, in all solicitations or advertisements for employees placed by or on behalf of Borrower, state that all qualified applicants will receive consideration for employment without regard to race, color, religion, creed, sex, marital status, national origin, ancestry, familial status, or d isability.

13.2 MONITORING PROVISIONS. Borrower, the General Contractor and subcontractors shall comply with the requirements of Lender for monitoring the anti-discrimination and all applicable labor requirements.

14. INSPECTION. Lender may, at any time and without notice to Borrower, enter on t he Property and inspect the Project; and, during regular business hours, examine the books, records, accounting data, plans, shop drawings, specifications, and other documents of Borrower pertaining to the Project and to make extracts or copies. Borrower shall make all such documents available to Lender promptly on demand. Borrower agrees to cooperate fully (and to cause the General Contractor to cooperate fully) with Lender and its Lender's designated agent and to permit all appropriate access to the Pro perty and to all relevant books and records. Borrower shall bear the cost of reasonable inspections, except that Lender shall bear its costs of inspection. If however, Lender’s inspection discovers issues of a nature that require further third-party review or investigation, Borrower shall bear the costs of such third party review.

15. P
ROTECTION AGAINST LIEN CLAIMS. Borrower shall promptly and fully discharge all claims for labor, materials and services in connection with the Project. Borrower shall promptl y file a valid Notice of Completion on completion of the Project. Borrower shall promptly file a Notice of Cessation in the event of a cessation of labor on the Project for a continuous Period of (30) days or more. Borrower shall take all other reasonabl e steps to protect against the assertion of lien claims against the Property. Within ten (10) days after the filing of any claim of lien against the Property, Borrower shall record a surety bond in the office of the Recorder of the County where the Propert y is located in an amount sufficient to release the claim of lien or deliver to Lender any other assurance as may be acceptable to Lender as evidenced by Lender's written acceptance of such assurance.

15.1 Lender, at any time, may require Borrower to obta in a lien waiver with respect to each payment
to the General Contractor and each payment by the General Contractor or Borrower to each of the various subcontractors and material suppliers. Lender, at any time, may require Borrower to make any payments for the Project by joint check made payable to the General Contractor and subcontractor for whose account the payment is to be made, as joint payees.

15.2 In any event, Borrower is not required to pay, prior to adjudication, any claims for labor, materials, or services that Borrower, in good faith, reasonably disputes, and that Borrower, at its own expense, is currently and diligently contesting in the proper forum, provided that Borrower has filed the surety bond or given Lender such other assurance as Lender accepts in writing.

16. Other Lender Draw . Borrower shall concurrently submit to Lender any Other Lender Draw. Delivery of such Other Lender Draw shall be made in the same manner as any other notice, except that it shall also be marked “OTHER LENDER DRAW REQ UEST” and delivered to the person named in writing by Lender as the recipient of such requests or, in the absence thereof, to Lender’s Portfolio Management office. Borrower shall provide Lender with true, accurate and correct copies of each Other Lender D raw, if any, including without limitation all supporting information, documents, and other required submittals. Lender shall have the right to provide objections to an Other Lender Draw, for failing to comply with the Loan, for changing the Project in any material way, or for impairing the ability of Lender to enjoy the practical realization of its rights under the Loan and its related instruments. If Lender objects to any Other Lender Draw, Borrower shall cause the Other Lender to confer with Lender in good faith regarding such objections to the Other Lender Draw. After meeting and conferring with the Other Lender in good faith, if in Lender’s sole discretion, Lender’s objections remain unresolved, Lender shall provide notice to Borrower of Lender’s rejection of the Other Lender Draw (the “Other Lender Draw Rejection”), but despite such rejection the Other Lender RVP Group – Cash Proceeds Loan Agreement Page 15
may fund such draw (so long as such rejected draw is not a Retention Draw); provided, however, until Lender has provided written notice to Borrower that Lender has withdrawn the Other Lender Draw Rejection, Borrower shall not accept any Retention Draw from such Other Lender, and Lender shall not be obligated to make any disbursements under the Loan.

16.1 ACKNOWLEDGMENT OF RELIANCE. Borrower acknowledges that Lender is making Loan disbursements in advance of disbursements of other lenders in reliance upon Borrowers compliance with this provision.

16.2 LIQUIDATED DAMAGES. IF BORROWER FAILS TO PROVIDE TO LENDER ANY OTHER LENDER

DRAW, AS AND WHEN REQUIRED UNDER THIS LOAN AGREEMENT, LENDER SHALL BE IRREPARABLY HARMED IN THAT BORROWER’S ABILITY TO REPAY THE LOAN AND LENDER’S SECURITY FOR THE LOAN SHALL BE IMPAIRED TO AN UNKNOWN EXTENT. BORROWER AND LENDER AGREE THAT IT WOULD BE IMPRACTICAL OR EXTREMELY DIFFICULT TO FIX ACTUAL RESULTING DAMAGES IN SUCH EVENT. BORROWER AND LENDER, THEREFORE, AGREE THAT AN AMOUNT EQUAL TO TWO PERCENT (2%) OF THE LOAN AMOUNT SHALL CONSTITUTE LIQUIDATED DAMAGES PAYABLE TO LENDER ON

ACCOUNT OF SUCH EVENT, RECEIPT OF WHICH SHALL CONSTITUTE THE EXCLUSIVE REMEDY OF LENDER FOR SUCH EVENT, AND ONLY FOR SUCH EVENT. PAYMENT OF SAID AMOUNT TO LENDER AS LIQUIDATED DAMAGES IS NOT INTENDED AS A FORFEITURE OR PENALTY WITHIN THE MEANING OF CALIFORNIA CIVIL CODE SECTIONS 3275 OR 3369, BUT INSTEAD, IS INTENDED TO CONSTITUTE LIQUIDATED DAMAGES TO LENDER PURSUANT TO SECTIONS 1671, 1676 AND 1677 OF THE CALIFORNIA CIVIL CODE . SAID AMOUNT SHALL BE IMMEDIATELY DUE AND PAYABLE AS OF THE DATE ON WHICH BORROWER DELIVERED SUCH OTHER LENDER DRAW TO THE OTHER LENDER . LENDER SHALL HAVE THIRTY (30) DAYS

AFTER RECEIVING ACTUAL NOTICE OF SUCH EVENT TO NOTIFY BORROWER IN WRITING THAT LIQUIDATED DAMAGES UNDER THIS SECTION ARE DUE. BORROWER SHALL HAVE FIFTEEN (15) DAYS AFTER SUCH WRITTEN NOTIFICATION TO CURE

THE DEFAULT BY WITHDRAWING THE OTHER LENDER DRAW AND RETURNING ANY DISBURSEMENT ON ACCOUNT OF SUCH OTHER LENDER DRAW. IF BORROWER FAILS TO PAY LIQUIDATED DAMAGES WHEN DUE UNDER THIS SECTION, THE LOAN SHALL BE ALL DUE AND PAYABLE AT THE ELECTION OF LENDER.

_____Lender’s Initials

_____Borrower’s Initials

17. PROJECT SIGN. If Borrower places a sign on the Property during construction stating the names of the Project participants, it shall also name Lender as a participant in the Project. Lender’s name on the sign shall be in letters not less than size of letters used to name any of the other participants.

18. PREVAILING WAGES. In accordance with Labor Code Section 1720(c)(4), so long as the sole and only public subsidy for the Project is from Lender’s Low and Moderate Income Housing Fund, the Project is not subject to prevailing wages. Borrower represents to Lender that Borrower has obtained no other public subsidy for the Project. If Borrower obtains other public subsidy, Borrower shall pay prevailing wages for the Project. Therefore, Borrower indemnifies, holds harmless and defends Lender from all additional wages, benefits , fees, penalties, fines, legal fees, court costs, arbitration costs, and other costs arising from the improper application of California prevailing wage laws to the Project by Borrower or General Contractor or both of them. In accordance with Labor Code Section 1720(c)(6)(E)), so long as the public subsidy for the Project consists of below market rate loans, and the Project restricts occupancy on at least 40% of the units for at least 20 years to individuals or families earning no more than 80% of the area median income, the Project is not subject to prevailing wages. Borrower represents to Lender that Borrower has obtained no public subsidy for the Project that does not meet such criteria. If Borrower obtains other non- qualifying public subsidy, Borrower shall pay prevailing wages for the Project. Therefore, Borrower indemnifies, holds harmless and defends Lender from all additional wages, benefits, fees, penalties, fines, legal fees, court costs, arbitration costs, and other costs arising from the impro per application of California prevailing wage laws to the Project by Borrower or General Contractor or both of them.

19. L
OAN DISBURSEMENT PROCEDURES.

19.1. CONDITIONS PRECEDENT TO EACH LOAN DISBURSEMENT. The obligation of Lender to make any disbursements of Loan Proceeds shall be subject to the following conditions precedent:

RVP Group – Cash Proceeds Loan Agreement Page 16

19.1.1 No Event of Default or Potential Default of Borrower has occurred and is continuing;

19.1.2. If requested by Lender, Borrower has furnished to Lender, as a Project cost, an endorsement to the Title Policy showing no intervening liens or encumbrances on the Property and insuring the full disbursement, together with a satisfactory report under the California Uniform Commercial Code showing no liens or interests other than those of Lender;

19.1.3. Borrower has obtained and maintained, and Lender has approved a loan approval from a financial institution or other lender approved by Lender in its sole discretion, to make the permanent financing obtained by Borrower, or has obtained commitments to issue bonds, which repays after completion of the Project all construction and other loans secured by the Project and which is secured by a senior lien against the Property (“Approved Permanent Financing”). Such permanent financing approval must provide: (a) t hat it is subject only to those conditions that are usual and customary in the industry and that can be satisfied by the proposed closing date of the permanent financing; (b) that it is in full force with no default by any party; (c) any such loan approval or commitments for financing shall not require modification of the Loan Documents, or any term of this commitment letter, (d) any such loan approval or commitments shall not be based upon sources and uses of Project funds that are different from those approved by Lender for the Project, and (e) that Lender will have notice of, and a reasonable opportunity to cure, any Borrower defaults;

19.1.4. Lender is satisfied that all completed work has been done using sound, new materials and fixtures, in a good and proper manner, and all materials, fixtures, and furnishings installed on or acquired for the Property will be owned by Borrower free of any liens, encumbrance, or other interests of any kind other than Lender's lien or security interest;

19.1.5. The representations and warranties in the Loan Documents are correct as of the date of the requested disbursement;

19.1.6. Borrower has paid Lender all commitment, loan, and other fees then due, and Borrower has submitted to, and Lender has approved in writing, all documents, records, s tatements, certificates, reports, and other materials and information then required to be submitted to Lender for approval under this Loan Agreement;

19.1.7. Borrower shall provide assurances, satisfactory to Lender in its sole discretion, that hazardous materials are not present on the Property or that any hazardous materials on the Property will be remediated and that no further remediation is then required by the environmental agency having responsibility for monitoring such remediation; and

19.1.8. Borrower has delivered to Lender all funds, documents, instruments, policies, evidence of satisfaction of conditions, and other materials then due or otherwise requested by Lender under the Loan Documents.

20. C
ONDITIONS PRECEDENT TO LOAN DISBURSEMENT. The obligation of Lender to make any disbursements of Loan Proceeds shall be subject to the following conditions precedent:

20.1. No Event of Default or Potential Default of Borrower has occurred and is continuing;

20.2. If requested by Lender, Borrower has furnished to Lender an endorsement to the Title Policy showing no
intervening liens or encumbrances on the Property and insuring the full disbursement, together with a satisfactory report under the California Uniform Commercial Code showing no liens or interests in P ersonalty other than those of Lender;

20.3. The Property, and all fixtures and furnishings installed on or acquired for the Property are owned by Borrower free of any liens, encumbrance, or other interests of any kind other than Lender's lien or security int erest;

20.4. The representations and warranties in the Loan Documents are correct as of the date of the requested disbursement;

RVP Group – Cash Proceeds Loan Agreement Page 17

20.5. Borrower has paid Lender all commitment, loan, and other fees then due, and Borrower has submitted to,
and Lender has approved in w riting, all documents, records, statements, certificates, reports, and other materials and information then required to be submitted to Lender for approval under this Loan Agreement;

20.6. Borrower shall provide assurances, satisfactory to Lender in its sole discretion, that hazardous materials are
not present on the Property or that any hazardous materials on the Property will be remediated and that no further remediation is then required by the environmental agency having responsibility for monitoring such re mediation;

20.7. Borrower has delivered to Lender all funds, documents, instruments, policies, evidence of satisfaction of
conditions, and other materials then due or otherwise requested by Lender under the Loan Documents;

20.8. There is no legal action threatened or pending against Borrower or affecting the Property or any Additional
Collateral;

20.9. All conditions to Close of Escrow have been satisfied in accordance with the Loan Agreement;

20.10. Borrower has obtained and Lender has approved a loan approval from a financial institution (or other lender
approved by Lender in its sole discretion) to make the Permanent Loan, which provides (a) that it is subject only to those conditions which are usual and customary in the industry and which can be satisfied by the proposed closing date of the Permanent Loan; (b) that it is in full force with no default by any party; and (c) that Lender will have notice of, and a reasonable opportunity to cure, any Borrower defaults;

20.11. The Permanent Lender’s commitment to make the Permanent Loan is in full force, has not been modified and no event has occurred that with notice or the passage of time or both could result in the termination of it. Nothing in the Permanent Loan commitment, or submissions and a pprovals made under it, conflicts with this Loan Agreement.

Borrower has done all things necessary to keep unimpaired its rights under the Loan Commitment;

20.12. Borrower has filed all tax returns required to be filed and paid all taxes due, which, if unfiled or unpaid, might adversely affect Lender’s security under the Security Documents; and

20.13. Borrower has provided proof of all insurance required by this Loan Agreement.

21. MAKING DISBURSEMENT. Lender shall deposit the Loan Proceeds, net of all costs which are payable directly by Lender to itself or a third-party pursuant to this Loan Agreement, in Escrow not later than twenty- four (24) hours prior to Close of Escrow, subject to fulfillment of the conditions precedent as stated in Section 14 .

21.1. REDUCTION FOR OTHER LOANS. In the event that Borrower receives other financing in excess of the amounts shown in the Budget, the Loan Amount shall be reduced by the amount of such excess amount, and Borrower shall immediately repay any Loan Proceeds disbursed that ar e in excess of the Loan Amount as reduced herein. If Borrower fails to make such repayment within ten (10) business days of Lender’s demand, the Loan shall be considered to be in default.

21.2. N
O WAIVER BY DISBURSEMENT. Regardless of the failure of any condition precedent to Lender's obligation to make disbursements to Borrower, Lender may make a disbursement if Lender, in its sole discretion, determines it to be advisable. The making of any disbursement shall not be deemed to constitute an approval or acceptance by Lender of the work completed or a waiver of the condition with respect to a subsequent disbursement.

21.3. COMPLIANCE. To the best of Borrower's knowledge, the construction, use, and occupancy of the Property
RVP Group – Cash Proceeds Loan Agreement Page 18
and Project comply in full with, or if built according to the Plans and Specifications, will comply in full with, all Governmental Requirements. No right to construct or use the Project is to any extent dependent on any real property other than the Property. All approvals, licenses, permits, certifications, filings, and other actions normally accepted as proof of compliance with all Governmental Requirements by prudent lending institutions that make investments secured by real property in the general area of the Property, to the extent availab le as of the date of this Loan Agreement, have been given or taken, or Borrower is entitled to have them given or taken as the ministerial act of the applicable Governmental Authority.

22. R
ESIDENTIAL OPERATIONS.

22.1. VERIFICATION OF NET INCOME. When requested by Lender, Borrower shall provide Financial Statements
and such other evidence as Lender may deem necessary to verify the Project net income, including without limitation copies of certified rent rolls, bank statements, billing statements and invoices.

22.2. SECURITY AND LIGHTING. Project shall include a security camera system approved by Lender and lighting
adequate to properly illuminate the parking area and all common spaces. In addition, Project will include security patrol, if necessary.

22.3. R
ESIDENT SERVICES PLAN: Borrower shall provide Lender with a detailed resident services plan including
but not limited to the following information: (1) identification of all entities responsible for providing resident services to Project tenants and each entity’s role in the provision of those services; (2) the services will be provided for a minimum of 15 hours per week, including education activities and service coordination; (3) a description of the services to be provided; (4) a pro forma resident services budget.

22.4. SMOKE FREE ENVIRONMENT. All residential units and indoor common areas must be smoke free.

23. DEFAULT.

23.1. EVENTS OF DEFAULT. At the option of Lender, each of the following events will constitute an Event of
Default, subject to applicable cure rights, if any:

23.1.1. Borrower’s non-performance of any obligation or breach of this Loan Agreement;

23.1.2. The occurrence of a breach or default under any of the Loan Documents;

23.1.3. Subject to Borrower’s legal rights to contest a Governmental Requirement, Borrower's failure to
comply with any Governmental Requirement, unless within ten (10) days after notice of such failure by Lender or the respective governmental entity or after any action has been commenced to enforce such requirement, Borrower has cured such failure;

23.1.4. Borrower's failure to keep in full force any permit, license, consent, or approval with respect to
the construction, occupancy, or use of the Project, unless within ten (10) days after notice by the issuing entity or Lender of such failure, Borrower has promptly cured such failure;

23.1.5. The filing of any lien against the Property or Project or the service on Lender of any bonded stop
notice related to the Loan, if the claim of lien or bonded stop notice continues for thirty (30) days without discharge, satisfaction, or the making of provision for payment (including bonding) to the satisfaction of Lender;

23.1.6. The attachment, levy, execution, or other judicial seizure of any portion of the Property or RVP Group – Cash Proceeds Loan Agreement Page 19
Project, or any substantial portion of the other assets of Borrower, that is not released, expunged, bonded, discharged, or dismissed within thirty (30) days after the attachment, levy, execution, or seizure; and

23.1.7. Making of any unauthorized payment from Loan Proceeds or other funds of Lender.

24. REMEDIES.

24.1. OPTION TO ACT. On the occurrence of any Event of Default, in addition to its other rights in this Loan Agreement or in any of the other Loan Documents, at law, or in equity, Lender may, without prior demand, exercise any one or more of the following rights and remedies:

24.1.1. Terminate its obligation to make disbursements;

24.1.2. Declare the Note and all other sums owing to Lender with respect to the other Loan Documents
immediately due;

24.1.3. Make any disbursements after the happening of any one or more of the Events of Default, without waiving its right to demand payment of the Note and all other sums owing to Lender with respect to the other Loan Documents or any other rights or remedies and without liability to make any other or further disbursements, regardless of Lender's previous exercise of any rights and remedies;

24.1.4. Proceed as authorized at law or in equity with respect to the Event of Default, and in connection
with that, remain entitled to exercise all other rights and remedies described in this Loan Agreement o r the Trust Deed; an

24.1.5. Recover its funds expended in exercising or enforcing any of its rights or remedies under any of
the Loan Documents, together with interest at the maximum amount allowed by law from the date the funds were spent until repaid which amounts will be deemed secured by the Trust Deed.

24.2. RIGHTS CUMULATIVE, NO WAIVER. All of Lender's rights and remedies provided in this Loan Agreement
or in any of the other Loan Documents are cumulative and may be exercised by Lender at any time. Lender's exercise of any right or remedy will not constitute a cure of any Event of Default unless all sums then due to Lender under the Loan Documents are repaid and Borrower has cured all other Events of Default. No waiver will be implied from Lender's failure to take, or delay in taking, any action concerning any Event of Default or from any previous waiver of any similar or unrelated Event of Default. Any waiver under any of the Loan Documents must be in writing and will be limited to its specific terms.

24.3. D
ISCLAIMER. Whether Lender elects to employ any of the remedies available to it in connection with an
Event of Default, Lender will not be liable to construct, complete, or protect the Project; to pay any expense in connection with the exercise of any remedy; or to perform any other obligation of Borrower.

24.4. GRANT OF POWER. Subject to the prior rights of lenders whose loans are secured by the Property and senior to the rights of Lender, Borrower irrevocably appoints Lender as its attorney- in-fact, with full power and authority, including the power of substitution, exercisable on the occurrence of an Event of Default, to act for Borrower in its name, place, and stead as provided in this Loan Agreement, to take possession of the Property and Project, remove all employees, contractors, and agents of Borrower, to complete or attempt to complete the work of construction, and to market, sell, or lease the Property and Project; to make any additions, changes, and corrections in the Plans as may be necessary or desirable, in Lender's sole discretion, or as it deems proper to complete the Project; to employ any contractors, subcontractors, suppliers, architects, inspectors, consultants, property managers, and other agents that Lender, in its sole discretion, deems prope r for the completion of the Project, for the protection or clearance of title to the Property or Personalty, or for the protection of Lender's interests, to employ security guards to protect the Property RVP Group – Cash Proceeds Loan Agreement Page 20
and Project from injury or damage; to pay, settle, or compromise all bills and claims then existing or later arising against Borrower that Lender, in its sole discretion, deems proper for the completion of the Project, for the protection or clearance of title to the Property, or for the protection of Lender 's interests; to prosecute and defend all actions and proceedings in connection with the Property or Project; and to execute, acknowledge, and deliver all other instruments and documents in the name of Borrower that are necessary or desirable, to exercise Borrower's rights under all contracts concerning the Property or Project, and to do all other acts with respect to the Property or Project that Borrower might do on its own behalf, in each case as Lender in its reasonable discretion deems proper.

25. BLANKET COVERAGE. Borrower’s obligation to carry insurance as required under this Loan Agreement may be satisfied by coverage under a “blanket” policy or policies of insurance (as the term is customarily used in the insurance industry); provided, however, that Lender shall nevertheless be named as an additional insured under such blanket policy or policies to the extent required by this Section, the coverage afforded Lender will not be reduced or diminished thereby, and all of the other requirements of this Section with respect to such insurance shall otherwise be satisfied by such blanket policy.

26. MISCELLANEOUS.

26.1. NONRECOURSE. Subject to the provisions of this Section 18.1, and notwithstanding any provision of the
Loan Documents other than this Section 18. 1, the personal liability of Borrower, and Borrower’s principals, partners, members, agents, officers, and successors in interest, to pay the principal of and interest on the debt evidenced by the Note and any other agreement evidencing Borrower's obligati ons under the Note shall be limited to (a) the Collateral, (b) the personal property described in and pledged under any Loan Document, and (c) the rents, profits, issues, products and income of the Property, including any received or collected by or on behalf of Borrower after an Event of Default.

26.2. CURE BY PARTY OTHER THAN BORROWER. Any lender whose loan is secured by the property, the Investor Limited Partner, and any principal of Borrower may cure a default of the Loan, provided that such cure rights shall be the same as Borrower’s cure rights. Such other curing party must cure by the date on which Borrower was obligated to cure.

26.3. C
ONDEMNATION. The proceeds of any award or claim for damages, direct or consequential, in connection
with any condemnation or other taking of all or any part of the Property, or for conveyance in lieu of condemnation, are hereby assigned and shall be paid to Lender. In the event of a taking of all of the Property, the proceeds shall be applied to the sums provided by this Loan, subject to any claims of prior lienholder, with the excess, if any, paid to junior lienholders and Borrower, as they may determine. In the event of the pa rtial taking of the Property, unless Borrower and Lender otherwise agree in writing, and subject to any claims of prior lienholders, there shall be applied to the sums secured by the Trust Deed such proportion of the proceeds as is equal to that proportion which the amount of the sums secured by the Trust Deed immediately prior to the date of taking bears to the fair market value of the Property immediately prior to the date of taking, with the balance of the proceeds paid to junior lienholders and Borrower, as they may determine.

If the condemnor offers to make an award or settle a claim for damages to the Property and: (1) the Property is abandoned by Borrower; or (2) after notice by Lender to Borrower of the condemnor’s offer, Borrower fails to respond to Lender within 30 days after the date such notice is mailed; Lender is authorized to collect and apply the proceeds, at Lender's option, either to restoration or repair of the Property or to the sums secured by the Trust Deed.

Unless Lender and Borrower otherwise agree in writing, any such application of proceeds to principal shall not extend or postpone the due date of any payment or change the amount of such payment.

26.4. S
UBORDINATION. Lender may subordinate this Loan to a S enior Loan, provided that any senior loan for
the Project indicated in the Budget meets all requirements of this Loan Agreement, and that such senior loan does not require modification of this Loan Agreement.

26.5. F
UNDING REQUIREMENTS. If any Loan Program is federally funded, Borrower shall comply with all laws,
RVP Group – Cash Proceeds Loan Agreement Page 21
rules, regulations and funding requirements that govern the use of such funds. Lender, to the extent required by law, shall cooperate with and assist Borrower in fulfillment of such obligations. If Lender, as a result of actions of Borrower, shall be obligated to repay the Loan Program any amount of the Loan Proceeds, Borrower shall make such repayment on account of Lender and failure to do so shall be an Event of Default.

26.6. NATURE OF REPRESENTATIONS AND WARRANTIES. Borrower certifies to Lender that all representations
and warranties made in this Loan Agreement and all other Loan Documents are true and correct in all material respects and do not contain any untrue statement of a material fact or omit any material fact necessary to make the representations and warranties not misleading. All representations and warranties will remain true and correct in all material respects and will survive so long as any of B orrower's obligations have not been satisfied or the Loan or any part of it remains outstanding, and for any applicable statute of limitations period. Each request by Borrower for a disbursement will constitute an affirmation that all representations and warranties remain true and correct as of the date of that request.

Each representation and warranty made in this Loan Agreement, in any other Loan Documents, and in any other document delivered to Lender by Borrower will be deemed to have been relied on b y Lender, regardless of any investigation, inspection, or inquiry made by Lender or any related disbursement made by Lender. The representations and warranties that are made to the best knowledge of Borrower have been made after diligent inquiry calculate d to ascertain the truth and accuracy of the subject matter of each representation and warranty.

26.7. N
O WAIVER. No failure or delay on the part of Lender in exercising any right or remedy under the Loan Documents will operate as a waiver nor will Lender be estopped to exercise any right or remedy at any future time because of any such failure or delay. No express waiver will affect any matter other than the matter expressly waived and that waiver will be operative only for the time and to the extent stated. Waivers of any covenant, term, or condition in this Loan Agreement will not be construed to waive any subsequent breach of the same covenant, term, or condition.

26.8. NO THIRD PARTIES BENEFITED. This Loan Agreement is made and entered into for the sole protection and benefit of the parties and their permitted successors and assigns, and no other Person will have any right of action or any rights to funds at any time on deposit in any construction account or impound account, if established.

26.9. NO JOINT VENTURE, PARTNERSHIP, OR OTHER RELATIONSHIP. Nothing contained in this Loan Agreement or in any other document executed in connection with this Loan Agreement shall be construed as creating a joint venture or partnership between Lender and Borrower. Each Party is acting as an independent entity and not as an agent of the other in any respect. No relationship exists as between Lender and Borrower other than that of a lender and a borrower.

26.10. NOTICES. Borrower irrevocably appoints Lender as its agent (the agency being coupled with an interest) to
file for record any notices of completion, cessation of labor, or any other notice that Lender deems necessary or desirable to protect its interests under this Loan Agreement or under the Loan Documents. All notices to be given under this Loan Agreement shall be in writing and sent to the addresses stated above for the respective recipient by one or more of the following methods.

26.10.1. Certified mail, return receipt requested, in which case notice shall be deemed delivered three (3)
business days after deposit, postage prepaid in the United States Mail;

26.10.2. A nationally recognized overnight courier, by priority overnight service, in which case notice shall be deemed delivered one (1) business day after deposit with that courier;

26.10.3. Hand delivery with signed receipt for delivery from a person at the place of business of the receiving party and authorized to accept delivery for the receiving party, in which case notice shall be deemed delivered upon receipt, or

26.10.4. Telecopy, if a copy of the notice is also sent the same day by United States Certified Mail, in
which case notice shall be deemed delivered one (1) business day after transmittal by t elecopier, provided that a RVP Group – Cash Proceeds Loan Agreement Page 22
transmission report is automatically generated by the telecopier reflecting the accurate transmission of the notices to receiving party at the “Fax Number” given in the Escrow Attachment or to such other address as Borrower or Le nder may respectively designate by written notice to the other.

26.11. SHORT TERM NOTICES. Notices, including requests for approval, requiring action in less than thirty (30)
days may only be given by the foregoing overnight courier or hand delivery method, and shall include the following language on its face: “URGENT – TIME SENSITIVE – IMMEDIATE ACTION REQUIRED” and marked for delivery to Portfolio Management. Such notice shall include the time allowed under this Loan Agreement for action.

26.12. A
CTIONS. Lender will have the right to commence, appear in, or defend any action or proceeding purporting to affect the rights, duties, or liabilities of the parties, or the disbursement of any funds under this Loan Agreement. In connection with that, Lender may incur an d pay costs and expenses, including, without limitation, reasonable attorney fees. Borrower agrees to pay to Lender on demand all these expenses, and if applicable, Lender is authorized to disburse funds from the construction account for that purpose. This Section does not apply to actions or proceedings between the parties.

26.13. S
IGNS. Borrower agrees that on the request of Lender, Borrower will erect and place on or in the immediate
vicinity of the Property a sign indicating that Lender has provided constr uction financing for the Project, which sign shall remain for the duration of construction. If Borrower places a sign on the Property during construction stating the names of the Project participants, it shall also name “Sacramento Housing and Redevelopment Agency” as a participant in the Project. Lender’s name on the sign shall be in letters not less than size of letters used to name any of the other participants.

26.14. A
SSIGNMENT. The terms of this Loan Agreement will be binding on and inure to the benefit of successors
and assigns of the parties. However, Borrower shall not assign this Loan Agreement or any interest it may have in the monies due or, except as otherwise provide d, convey or encumber the Property without the prior written consent of Lender. Notwithstanding the foregoing, if there is an assignment, conveyance, or encumbrance, Lender may nevertheless at its option continue to make disbursements under this Loan Agre ement to Borrower or to those who succeed to Borrower's title, and all sums so disbursed will be deemed to be disbursements under this Loan Agreement and not modifications, and will be secured by the Security Documents. Lender may at any time assign the L oan Documents to any affiliate of Lender or to a national bank or other lender having experience with construction lending, and the assignee will assume the obligations of Lender, and Lender will have no further obligation of any nature. In that case, the provisions of this Loan Agreement will continue to apply to the Loan, and the assignee will be substituted in the place and stead of Lender, with all rights, obligations, and remedies of Lender, including, without limitation, the right to further assign t he Loan Documents. In addition, Lender may at any time assign a participation in the Loan to any other party, provided that Lender continues to be primarily obligated under this Loan Agreement.

26.15. P
REPAYMENT. Borrower may prepay the Loan only on and subjec t to the terms and conditions in the Note.

Borrower shall have no rights to receive, and under no circumstances will Borrower receive repayment of any fees previously paid to Lender.

26.16. CONTROLLING LAW; VENUE. The Loan Documents will be governed by and construed in accordance with
California law. The venue for any legal action or proceeding will be in the County of Sacramento, California.

26.17. CONSENTS AND APPROVALS. All consents and approvals by Lender requir ed or permitted by any provision
of this Loan Agreement will be in writing. Lender's consent to or approval of any act by Borrower requiring further consent or approval will not be deemed to waive or render unnecessary the consent or approval to or of any subsequent similar act.

26.18. SURVIVAL OF WARRANTIES AND COVENANTS. The warranties, representations, conditions, covenants, RVP Group – Cash Proceeds Loan Agreement Page 23
and
agreements in this Loan Agreement and in the other Loan Documents will survive the making of the Loan and the execution and delivery of the Note and will continue in full force until the Loan has been paid in full. Nothing in this Section is intended to limit any other provision of the Loan Documents that by their stated terms survive the repayment of the Loan or the termination of any Loan Document.

26.19. RECORDING AND FILING. Borrower, at its expense, will cause the Security Documents and all supplements
to be recorded and filed and re-recorded and re-filed in any manner and in any places as Lender will reasonably request, and will pay all recording, filing, re-recording, and re-filing taxes, fees, and other charges.

26.20. LOAN EXPENSES. In making the first disbursement, Lender may, at its option, deduct from the proceeds of
that disbursement a sum equal to the aggregate of the following, to the extent Lender has knowledge of it and demand has been made on Lender at the time of the deposit: all expenses specifically incurred in connection with the Loan or the preparation, execution, and delivery of the Loan Documents, including, but not l imited to, recording costs and expenses, transfer and other taxes (if any), surveys, appraisal fees, title and hazard insurance premiums, recording, notary, and escrow charges, and all other similar, usual, or customary loan closing charges and expenses; and any other budgeted expenses that have been approved by Lender in writing; and Lender will, for the benefit of Borrower, pay those amounts over to the respective parties on whose behalf the demands will have been received by Lender. Borrower will pay directly any expenses in connection with the Loan not so paid by Lender, including, without limitation, any of the expenses specified above, and will hold Lender free from any cost, liability, or obligation of any nature in connection with it, including reas onable attorney fees incurred by Lender. Borrower further agrees to pay on demand all out -of- pocket costs and expenses reasonably incurred by Lender including, without limitation, the fees and disbursements of Lender's outside counsel, in connection with: (i) the administration of the Loan, including, without limitation, all approvals or consents given or contemplated to be given under the Loan Documents, all amendments to the Loan Documents entered into by Lender or requested by any party to the Loan Documents, and all title insurance policies and endorsements required by Lender, and (ii) the enforcement of any rights or remedies under the Loan Documents, whether any action or proceeding is commenced, or the protection of the security, or interests of Lender under the Loan Documents. All costs and expenses, together with interest at Interest Rate, will form a part of the indebtedness and will be secured by the Security Documents.

26.21. N
O REPRESENTATIONS BY LENDER. By accepting or approving anything required to be observed, performed, or fulfilled, or to be given to Lender pursuant to this Loan Agreement or pursuant to the Loan Documents, including, but not limited to, any officer's certificate, balance sheet, statement of income and expense, or other Financial Statement, survey, appraisal, or insurance policy, Lender will not be deemed to have warranted or represented the sufficiency, legality, effectiveness, or legal effect of it or of any particular term, provision, or condition of it, and any acceptance or approval will not be or constitute any warranty or representation by Lender.

26.22. A
MENDMENT. The Loan Documents and the terms of each of them may not be modified, waived, discharged, or terminated except by a written instrument signed by the party against whom enforcement of the modification, waiver, discharge, or termination is asserted.

26.23. TERMINATION. Except as otherwise provided in the Loan Documents, all rights and obligations under this
Loan Agreement will terminate except as to any accrued ob ligations effective on the payment of all Loan owing by Borrower to Lender.

26.24. COUNTERPARTS. The Loan Documents may be executed in any number of counterparts and by different parties in separate counterparts, each of which when executed and delivered will be deemed an original and all of which counterparts taken together will constitute one and the same instrument.

26.25. S
EVERABILITY. If any term, provision, covenant, or condition or any application is held by a court of competent jurisdiction to be invalid, void, or unenforceable, all terms, provisions, covenants, and conditions and all applications not held invalid, void, or unenforceable will continue in full force and will in no way be affected, impaired, or invalidated.

RVP Group – Cash Proceeds Loan Agreement Page 24

26.26. CAPTIONS. All Article and Section headings in the Loan Documents are inserted for convenience of reference only and do not constitute a part of the Loan Documents for any other purpose.

26.27. INDEMNITY. Borrower agrees to defend, indemnify, and hold Lender harmless from all losses, damages, liabilities, claims, actions, judgments, costs, and reasonable attorney fees that Lender may reasonably incur as a direct or indirect consequence of the making of the Loan, Borrower's failure to perform any obligations as and when required by this Loan Agreement or any of the other Loan Documents, the failure at any time of any of Borrower's representations or warranties to be true and correct, or any act or omission by Borrower, any contractor, subcontractor, engineer, architect, or other Person with respect to the Property, the Project, or any portion of them except to the extent caused by the gross negligence or willful misconduct of Lender. Borrower will pay immediately on Lender's demand any amounts owing under this indemnity, together with interest at the maximum rate permitted by law from the date Lender makes a payment or incurs a loss. Borrower's duty to indemnify Lender will survive the release and cancellation of the Note and the reconveyance or partial reconveyance of the Trust Deed.

26.28. F
URTHER ASSURANCES. At Lender's request and at Borrower's expense, Borrower will execute, acknowledge, and deliver all other instruments and perform all other acts necessary, desirable, or proper to carry out the purposes of the Loan Documents or to perfect and preserve any liens created by the Loan Documents.

26.29. DISCLOSURE OF INFORMATION. If Lender elects to sell the Loan, Lender may forward to the buyer of the
Loan all documents and information related to the Loan in Lender's possession, including without limitation all Financial Statements, whether furnished by Borrower or otherwise.

26.30. LENDER'S AGENTS. Lender may designate agents or independent contractors to exercise any of Lender's
rights under the Loan Documents. Any reference to Lender in any of the Loan Documents will include Lender's employees, agents, and independent contractors.

26.31. I
NTEGRATION AND INTERPRETATION. The Loan Documents contain or expressly incorporate by reference
the entire agreement between Lender and Borrower with respect to the covered matters and supersede all prior negotiations. Any reference to the Property or Project in any of the Loan Documents will include all or any portion of them. Any reference to the Loan Documents themselves in any of the Loan Documents will include all amendments, renewals, or extensions approved by Lender.

26.32. NUMBER, IDENTITY AND GENDER. When the context and construction so require, all words used in the singular will be deemed to have been used in the plural and vice versa. When the context and construction so require, all words which indicate a gender will be deemed to have been used to indica te the gender as indicated by the context.

RVP Group – Cash Proceeds Loan Agreement Page 25
THE PARTIES HAVE EXECUTED THIS LOAN AGREEMENT in Sacramento, California as of the Effective Date.

BORROWER :

RVP Group LP, a California limited partnership

RVP Group LLC, a California limited liability company,
its managing general partner

By: Sacramento Housing Authority Repositioning
Program, Inc., a California nonprofit public
benefit corporation, its sole member and manager

By: _____________________________
James Shields, President

LENDER:

HOUSING AUTHORITY OF THE CITY OF

SACRAMENTO, A PUBLIC BODY CORPORATE AND

POLITIC

By: _______________________________________
La Shelle Dozier, Executive Director

Approved as to form:

___________________________________________
Lender Counsel

RVP Group – Cash Proceeds Loan Agreement Page 1
Exhibit 1: Legal Description

Pine Knoll

The land described herein is situated in the State of California, County of Sacramento, City of Sacramento, described as follows:

BEGINNING at a 1 ¼ inch Iron Pipe Marking the true corner of Lots 6, 7, I & J of said McIntyre Tract; thence North 70° 11' 00" West 116.05 feet along the division line between Lot 5 and Lot 8 of said McIntyre Tract to a ¾ inch Iron Pipe tagged L.S. 3723, said pipe marking the Northeast corner of Lot 9 of said Iverson Tract; thence South 21° 19' 50" West 55.05 feet to a ¾ inch Iron Pipe tagged L.S. 3723 marking the Northeast corner of Lot 10 of said Iverson Tract; thence along the North line of said Lot 10, North 70° 13' 26" West 99.33 feet to the Northwest corner of said Lot 10; thence South 21° 31' 10" West 100.13 feet along the West line of said Lot 10 and said Lot 11 to the Southwest corner of said Lot 11; thence South 70° 10' 00" East 99.66 feet to a ¾ inch Iron Pipe tagged L.S. 3723 marking the Southeast corner of said Lot 11 and the West line of said Lot 5 of McIntyre Tract; thence along the West line of said Lot 5, South 21° 19' 50" West 59.96 feet to a ¾ inch iron pipe tagged L.S. 3723; thence leaving said West line, South 70° 29' 40" East 111.84 feet to a ¾ inch Iron Pipe on the East line of said Lot 5; thence along the East line of said Lot 5, North 22° 27' 28" East 214.77 feet to the POINT OF BEGINNING.

APN: 008-0032-025-0000, 008-0032-032-0000, 008-0032-033-0000

RVP Group – Cash Proceeds Loan Agreement Page 2
Big Trees

The land described herein is situated in the State of California, County of Sacramento, City of Sacramento, described as follows:

Parcel No. 1:

The East one-half of Lot 2 in block bounded by 25th and 26th, "H" and "I" Streets of the City of Sacramento, according to the official plat thereof.

APN:007-0033-006-0000

Parcel No. 2:

The West one-half of Lot 3 in block bounded by 25th and 26th, "H" and "I" Streets of the City of Sacrame nto, according to the official plat thereof.

APN:007-0033-007-0000

RVP Group – Cash Proceeds Loan Agreement Page 3
Riverview Plaza

The land described herein is situated in the State of California, County of Sacramento, City of Sacramento, described as follows:

Parcel A:

Parcel 1, as shown on that certain Parcel Map entitled "Parcel A, 62 PM 14, also being Lots 1 & 2 of the Block bounded by 6th, 7th, 'I' and 'J' Streets", recorded October 11, 1988 in Book 107 of Parcel Maps, at Page 28, Records of Sacramento County.

APN: 006-0032-029-0001

Parcel B:

Parcel 2, as shown on that certain Parcel Map entitled "Parcel A, 62 PM 14, also being Lots 1 & 2 of the Block bounded by 6th, 7th, 'I' and 'J' Streets", recorded October 11, 1988 in Book 107 of Parcel Maps, at Page 28, Records of Sacramento County.

Together with those certain Reciprocal Access Easements (R.A.E.) on, under, over and across Parcel 3, as said Parcel is shown on said Parcel Map.

APN: 006-0032-029-0002

Parcel C:

Parcel 3, as shown on that certain Parcel Map entitled "Parcel A, 62 PM 14, also being Lots 1 & 2 of the Block bounded by 6th, 7th, 'I' and 'J' Streets", recorded October 11, 1988 in Book 107 of Parcel Maps, at Page 28, Records of Sacramento County.

APN: 006-0032-029-0003

Parcel D:

Parcel 4, as shown on that certain Parcel Map entitled "Parcel A, 62 PM 14, also being Lots 1 & 2 of the Block bounded by 6th, 7th, 'I' and 'J' Streets", recorded October 11, 1988 in Book 107 of Parcel Maps, at Page 28, Records of Sacramento County.

APN: 006-0032-029-0004

RVP Group – Cash Proceeds Loan Agreement Page 1
Exhibit 2: Scope of Development

Scope of Development – Rehabilitation of Big Tree Apartments 2516 H Street, Sacramento, CA 95816

Big Tree Apartments is an existing three story housing facility with 29 units located on approximately 0.3 acres in 2516 H Street, Sacramento, CA 95816. The project goal is to renovate all existing one bedroom one bath units (450 sq. ft.). Additionally, there is 425 sq. ft. community room that will be utilized for resident services and eight parking stalls for resident parking. The renovation would include converting existing storage space into an office space that will be used for property management. Other property amenities include utility, storage and a laundry rooms.

I. Building Exteriors

Landscape Improvements:

1. Develop landscape/Irrigation improvement plan: owner intends to remove existing landscaping and replace with modern landscaping.

2. Remove (3 EA) Redwood trees. Assist with permitting process for the redwood r emoval.

Concrete Pavements :

3. Sandblast and re -stripe existing concrete parking lot. Replace concrete to comply with ADA code. Install ADA parking signage.

4. Replace existing concrete sidewalks where required to create an accessible path of travel to the public right of ways.

Improve existing sidewalks by increasing width of sidewalks where requested by owner.

Balconies:

5. Replace metal railings with decorative steel railings. Refinish and paint the balconies.

Stucco Exterior:

6. Repair, clean and paint ex isting stucco. Generate colored elevations to be submitted to city planning department for approval.

Electrical:

7. Remove and replace existing wall packs with upgraded LED light fixtures.

8. Install additional walls packs around the property to provide exterior lighting.

9. Remove existing lighted bollards.

Doors and Windows:

10. Replace doors, windows and storefronts throughout the building.

Roof:

11. Existing multi-ply poly (TPO) roofing and flushing to remain.

12. Roof gravity vents and exhaust fans to be replaced.

13. Replace or repair downspouts as needed.

Site Improvements:

14. Repair or replace wrought iron and wood fences where needed.

15. Add two exit doors with panic hardware to allow an ADA path of travel to parking lot.

16. Reconfigure picnic area, install a gazebo and benches. Remove existing benches and bike racks.

II. Building Interiors
Americans with Disabilities Act (ADA) Units:

17. There will be a total of 3 (Three) Americans with Disabilities Act (ADA) compliant units, on e per floor. All three units to be equipped with visual and audio communication features that comply with ADA requirements.

18. Convert additional units into adaptable units if required by code and local jurisdiction

19. Complete ADA upgrade of the building as required by code and local jurisdiction.

RVP Group – Cash Proceeds Loan Agreement Page 2
Appliances:

20. Install new range, and over the range microwave. Existing ranges are electric.

21. Existing refrigerators will be re-used.

22. Remove nurse calls throughout the property
Finishes:

23. Floorings to be replaced throughout the building with luxury vinyl flooring. This includes all units, corridors, community building, laundry room, office spaces and computer room. Baseboard to be replaced with rubber baseboards.

24. All utility rooms to receive epoxy flooring.

25. Paint all surfaces throughout the property.

Electrical and Lighting:

26. Replace electrical fixtures with LED lights throughout the property. Wiring to be replaced or added as needed.

27. Replace unit load centers (Unit Panels) in all units.

28. Replace breakers with AFCI / GFCI breakers. Verify neutrals are available for the AFCI breakers.

29. Replace switches and outlets throughout the property.

Kitchen:

30. Replace Kitchen cabinets

31. Replace countertops with granite countertops and backsplash

32. Replace sink and faucets with water-saving fixtures.

Bathrooms:

33. Replace shower surrounds (use three piece tub and surrounds) and mixing valves.

34. Replace vanity tops with cultured marble

35. Replace bathroom vanities

36. Replace plumbing fixtures (toilets, shower heads, bathroom faucets, etc.) with water -saving fixtures.

37. Replace bathroom accessories (mirror, medicine cabinet, etc.)

38. Replace bathroom exhaust fans.

Doors and windows:

39. Replace entry doors throughout the building. These include entry d oors for dwelling units, janitorial closets, utility rooms, storage rooms, etc.

40. Replace interior doors throughout the building.

41. Replace door hardware throughout the building.

42. Replace unit windows and balcony sliding doors.

Furnishings:

43. Install new vertical blinds in all units and common areas.

44. Install fire extinguishers as needed.

Internet and Phone:

45. Replace existing data and phone jacks throughout the property.

46. Add a data jack in the bedroom.

Wall and Ceilings:

47. Walls in the bathroom and kitchen to be stripped down to the studs or usable drywall and replaced.

48. Patch and replace drywall as needed.

49. Paint all surfaces including walls and ceilings.

50. Popcorn ceilings to be painted.

III. Building Amenities
Laundry Facility upgrade:

51. The central laundry is located on the first floor and will have four (4) sets of card operated washers and dryers, including two (2) set that complies with ADA requirements.

RVP Group – Cash Proceeds Loan Agreement Page 3

52. Laundry room to be reconfigured to meet ADA and accommodate four washers and dryers. Install a partition wall to separate the laundry room from existing trash room.

53. Install a folding table and sink.

54. Replace light fixtures, switches and outlets.

55. Replace house panel and breakers with AFCI/ GFCI breakers.

56. Replace flooring and baseboards.

57. Replace plumbing fixtures.

58. Replace exhaust fan.

Community Room Upgrade:

59. Perform a complete ADA upgrade of community room.

60. Replace storefront and windows.

61. Replace Kitchen cabinets and sink. Install new range and over-range- microwave hood

62. Replace plumbing fixtures.

63. Replace light fixtures, switches and outlets.

64. Install backing for a community room TV.

Common Areas, Hallways and Stairs:

65. Replaced existing ceiling with suspended ceiling in all corridors and common areas

66. Install new handrails in the corridors and staircases.

67. Paint all surfaces including walls and ceilings.

68. Replace windows, doors and door hardware in all common areas.

69. Install recessed LED lighting in all corridors and common areas including community room, laundry room, etc.

Replace lighting in the stairs.

70. Replace all devices in the hallways and stairs.

Public Bathrooms:

71. Perform complete ADA upgrade of public bathroom.

72. Replace light and plumbing fixtures

73. Replace finishes
Fire Life Safety upgrade:

75. Install a smoke detector in the bedrooms to comply with code. Detectors to be interconnected.

76. Install fire smoke dumpers if needed.

77. Perform any additional life safety modifications to ensure system meets current code.

Plumbing System:

78. Replace existing gas water heaters with electric water heaters. Upgrade electrical panel as needed.

79. Replace control valves, balancing valves and isolation valves with ball valves.

80. Install isolation valves per floor or stack to allow for isolation during maintenance.

HVAC system:

82. Provide calculations and resize ducts to ensure they meet current code. Seal and Insulate ducts to improve efficiency.

83. Replace PTAC Units and thermostat in all dwelling units.

84. Replace split systems throughout the property

85. Remove electric wall heaters throughout the property Switch Gear and Panel:

86. Replace building main switchgear and panels to ensure over 15 years of useful life. Coordinate with local utility for approval and upgrades where required.

RVP Group – Cash Proceeds Loan Agreement Page 4
Signage:

87. Replace monument sign.

88. Install new building signs, and unit signs.

89. Install new signage throughout the building as required by code or requested by owner.

90. Install illuminated emergency and exit lightings throughout the building. Provide backup power if needed by code.

Elevators (2 EA):

91. Retrofit elevator cabs with new finishes, lighting and signage. Upgrade control panel.

92. Existing elevators uses hydraulic system and don’t require upgrade.

Site Office:

93. Convert the trash room (located next to laundry room) into a site office. This may re quire installing a fire rated wall between the two rooms.

94. Install flooring, lighting, switches and outlets, paint, new door and window for the office space.

Wireless Internet :

95. Install a complete wireless access system including WAPs, POEs, data and power wiring to provide wireless internet to residents. SHARP will furnish a design for this system. Architect to include on its plans.

Security Surveillance Camera System:

96. A new security surveillance camera system to be installed, which includes new security cameras on each floors.

SHARP will furnish a design for this system. Architect to include on its plans.

V. ADD ALTs :

97. Install a manual transfer switch outside the building to allow for a temporary generator in case of outages.

98. Install a PV system for backup power for life safety systems, if required by city or code.

Scope of Development – Rehabilitation of Pine Knoll Apartments 917 38th Street, Sacramento, California 95816

Pine Knoll Apartments is an existing two story housing facility with 30 units located on approximately 0.78 acres in 917 38th Street, Sacramento, California 95816. The project goal is to renovate all existing one bedroom one bath units (510 sq. ft.). Additionally, there is a community building and laundry facility that will be utilized for resident services. The renovation would include converting existing storage space into an office space that will be used for property management. Other property amenities include utility, storage and an elevator.

VI. Building Exteriors

Landscape Improvements:

1. Develop landscape/Irrigation improvement plan: owner intends to remove existing landscaping and replace w ith modern landscaping.

2. Remove (5 EA) trees. Assist with permitting process for the removal.

Pavements :

RVP Group – Cash Proceeds Loan Agreement Page 5

3. Reconfigure the layout of the parking lot to widen space and increase number of parking stalls. Seal and stripe asphalt parking lot.

4. Add ADA parking stalls per code. Install ADA parking signage.

5. Replace existing concrete sidewalks where required to create an accessible path of travel to the public right of ways and amenities per code.

Railings:

6. Replace wooden railings where needed. Replace dry rot as needed.

Stucco Exterior:

7. Repair, clean and paint existing stucco. Generate colored elevations to be s ubmitted to city planning department for approval.

Electrical:

8. Replace existing wall packs with upgraded LED light fixtures.

9. Install additional walls packs around the property to provide exterior lighting.

10. Replace pole light fixtures with LED fixtures.

Doors and Windows:

11. Replace doors, windows and storefronts throughout the property.

Roof:

12. Replace existing composite shingle roofing and flushing for all buildings.

13. Replace downspouts throughout.

Site Improvements:

14. Replace wood fences where needed.

15. Reconfigure picnic area, install a gazebo and benches. Remove existing benches and site lights.

16. Replace dry rot as needed.

17. Build a new trash enclosure on site.

VII. Building Interiors
Americans with Disabilities Act (ADA) Units:

19. Convert additional units into adaptable units if required by code and local juri sdiction

20. Complete ADA upgrade of the building as required by code and local jurisdiction.

Appliances:

21. Install new range, and over the range microwave hood.

22. Existing refrigerators will be re-used.

23. Remove nurse calls throughout the property
Finishes:

25. All utility rooms to receive epoxy flooring.

26. Paint all surfaces throughout the property.

Electrical and Lighting:

27. Replace electrical fixtures with LED lights throughout the property. Wiring to be replaced or added as needed.

28. Replace unit load centers (Unit Panels) in all units.

29. Replace breakers with AFCI / GFCI breakers. Verify neutrals are available for the AFCI breakers.

30. Replace switches and outlets throughout the property.

Kitchen:

31. Replace Kitchen cabinets

32. Replace countertops with granite countertops and backsplash

RVP Group – Cash Proceeds Loan Agreement Page 6

33. Replace sink and faucets with water-saving fixtures.

Bathrooms:

34. Replace shower surrounds (use three piece tub and surrounds) and mixing valves.

35. Replace vanity tops with cultured marble

36. Replace bathroom vanities

37. Replace plumbing fixtures (toilets, shower heads, bathroom faucets, etc.) with water-saving fixtures.

38. Replace bathroom accessories (mirror, medicine cabinet, etc.)

39. Replace bathroom exhaust fans
Doors and windows:

40. Replace entry doors throughout the building. These include entry doors for dwelling units, janitorial closets, utility rooms, storage rooms, etc.

41. Replace interior doors throughout.

42. Replace door hardware throughout.

43. Replace unit windows.

Furnishings:

44. Install new vertical blinds in all units and common areas.

45. Install fire extinguishers as needed.

Internet and Phone:

46. Replace existing data and phone jacks throughout the property.

47. Add a data jack in the bedroom.

Wall and Ceilings:

48. Patch and paint drywall as needed.

49. Paint all surfaces including walls and ceilings.

50. Popcorn ceilings to be painted.

VIII. Building Amenities
Laundry Facility upgrade:

51. The central laundry is located in the community building and will have four (4) sets of card operated washers and dryers, including two (2) that complies with ADA requirements.

52. Laundry room to be reconfigured to meet ADA and accommodate washers and drye rs.

53. Install a laundry sink.

54. Replace light fixtures, switches and outlets.

55. Replace house panel and breakers with AFCI/ GFCI breakers.

56. Replace flooring and baseboards.

57. Replace plumbing fixtures.

58. Replace exhaust fan.

Community Building and Public Bathroom Upgrade:

59. Perform a complete ADA upgrade of community building.

60. Replace storefront and windows.

61. Replace existing ceiling tiles.

62. Replace Kitchen cabinets and sink.

63. Replace plumbing fixtures.

64. Replace commercial water heater.

65. Replace light fixtures, switches and outlets.

66. Install card readers.

67. Relocate the post box.

68. Remove nurse calls.

RVP Group – Cash Proceeds Loan Agreement Page 7
Fire Life Safety upgrade:

70. Upgrade common areas and community room with visual and audio communication features that compl y with ADA requirements.

71. Install a smoke detector in the bedrooms to comply with code. Detectors to be interconnected.

72. Perform any additional life safety modifications to ensure system meets current code.

Plumbing System:

73. Replace existing electric water heaters.

HVAC system:

74. Existing split systems to remain. Replace thermostats in the units and community building.

75. Replace supply and return registers throughout the property.

Switch Gear and Panel:

76. Replace building main switchgear and panels to ensure over 15 years of useful life. Coordinate with local utility for approval and upgrades where required.

Signage:

77. Replace monument sign and monument sign light.

78. Install new building signs, and unit signs.

79. Install ADA path of travel signage per code.

80. Install new signage throughout the building as required by code or requested by owner.

Elevators:

81. Retrofit elevator cabs with new finishes, lighting and signage. Upgrade control panel with ADA compliant panel.

Add audio visual and arrival indicators for the elevator.

82. Existing elevators uses hydraulic system and don’t require upgrade.

Site Office:

83. Convert the trash room into a site office.

84. Install a PTAC unit, flooring, lighting, switches and outlets, paint, new door and window for the office space.

Wireless Internet:

Security Surveillance Camera System:

86. A new security surveillance camera system to be installed, which includes new security cameras on each floors.

SHARP will furnish a design for this system. Architect to include on its plans.

Scope of Development – Rehabilitation of Riverview Plaza Apartments 600 I Street, Sacramento, CA 95814

Scope of the work for this project includes building envelope and building system improvement and unit tenant improvements for the residential space (3rd through 16 th floors). This project does not include any tenant improvement scope of work in the commercial space (ground and 2 nd floors) except the common areas such as lobbies, mechanical/electrical rooms, elevators, stairways, etc. The scope of work shall also contain any hazardous material removals such as asbestos and lead, as described in the attached report, dated December 20, 2019.

RVP Group – Cash Proceeds Loan Agreement Page 8

No Scope of work for design services
1- Building Envelope
1 Replace metal roof flashing and gutters (non-serviceable gutters preferred) throughout. 2 Remove and Replace Storefront doors and windows (located on ground floor, 15th and 16th floors.) All store fronts are to be replaced.
3 Block out the store front on 16th floor (Storefront causes damages to the flooring and walls due to leakage and sun light deterioration)
4 Recertify or Replace hardware for common area doors throughout all floors 5 Power wash building exterior and windows (ground floor to 16th floor). Paint all exterior surfaces
6 Replace tile skirt surrounding the exterior of the building and entryways on 3 sides (Matching tiles discontinued)
7 Inspect and recertify roof fall restraint system and its components to bring to current code 8 Replace main entry doors & access control.
2- Building Interior
9 Replace existing flooring with new LVP flooring throughout common areas ( including commercial common areas)
10 Replace/repair sewer and storm water drainage throughout the building. Consultant to complete a comprehensive forensic analysis of the building's sewer and storm drainage system in order to identify systems and components that needs to be replaced ( Expecting some piping and fittings to be replaced. Pumps were replaced recently).
11 Replace HVAC units ( condensing units and fan coils) for the residential space and common areas ( The HVAC units serving the 2nd floor were replaced in 2020) 12 Replace Water heaters for residential and commercial area (Existing gas water heaters to be converted into electric water heaters). Replace the associated check and control valves. 13 Replace outdated recessed lighting throughout the residential , elevator and common spaces with energy efficient light fixtures
14 Repair drywall throughout the building as needed.
15 Paint throughout the common area and common space ( commercial area w ork is limited to common areas )
16 Install new drop ceiling. Existing drop ceilings are aged and material is discontinued. 17 Replaced existing gas fireplaces in the residential common area with electric fire places. 18 Replace existing furniture in the residential lobbies on 3, 5, 7, 9, 11, and 13th floors (including Sofa, Chairs, coffee table, and wall art). Replace tables and chairs in the cafeteria on the 15th floors.
19 Replace garbage trash chute and equipment. Replace locking hardware for the trash chute. Install sprinkler system in the trash chute as mandated by code. 20 Replace fire drops in the commercial kitchen and trash chute space ( in the garage) 21 Upgrade laundry room to comply with ADA requirements, or install in-unit laundry for ADA units ( 12 EA)
22 Upgrade plumbing , drainage and dryer ventilation in the laundry rooms ( 12 EA) 23 Replace existing ventilation fans, supply fans, and dampers throughout the building ( due to age and failing systems)

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24 Install building phone entry and card access throughout the building ( controlled access) 25 Replace gas shut off valves ( 2 EA) ( located in the parking space)

3- Tenant Unit Improvements ( 123 Units) ( No Unit TI for the commercial space)* 26 Minimum 10% of units to be converted to fully ADA units 27 Replace interior Light fixtures
28 Replace Kitchen ranges and range hoods
29 Replace PTAC units in the dwelling units
30 Replace plumbing fixtures (toilets, shower heads, kitchen and bathroom faucets) with water - saving fixtures
31 Replace shower surrounds (cultured marble) and mixing valves 32 Replace countertops at Kitchens (granite) and Baths (cult. marble) 33 Replace Kitchen cabinets
34 Replace bathroom vanities
35 Paint unit interiors
36 New LVP flooring and baseboard to replace existing
37 Install new smoke/CO detectors
38 Replace unit entry and interior doors as needed (use existing frames) 39 Replace door hardware throughout the units
40 4% communication features ( bells, strobes etc in ADA units) 41 Replace switches and outlets throughout
42 Refrigerators N.I.C.
43 Replace bathroom exhaust fans
44 Drywall repairs as needed
45 Replace bathroom exhaust fans
4- Fire life and Safety
46 Replace mechanical interface equipment for smoke purge system and smoke pressurization system, including all its components as needed. Architect to conduct a comprehensive analysis of the existing systems and recertify all the equipment. SHARP needs to replace controls, rooftop fan, and blower units.
47 Replace and update emission control sensors and control units 48 Replace and upgrade fire pumps (Only electric components to be replaced. The pumps were replaced recently)
49 Replace and upgrade fire doors and hardware throughout (due to age and parts shortage) 50 Replace fire alarm system and all its devices with new system 51 Build a 2nd emergency exit from the office space
5- Elevators ( 3 EA Passenger, 1 EA freight/Passenger)
52 Replace proprietary elevators' equipment and software 53 Retrofit elevator cab interior finishes
54 Install new elevator controls ( including card readers) 6- Pool
55 Replace swimming pool heaters and filtration system

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56 Drain, waterproof and re-plaster pool
57 Replace pool's surrounding tile skirt and waterproof outside deck

7- Generator
58 Replace existing leak detection and low fuel alerts to the tanks ( sensors) 8- Parking
59 Seal and stripe underground parking garage
60 Replace parking exhaust fans
61 Replace lighting in the parking lot with energy efficient lighting 62 Recertify/Upgrade carbon monoxide monitoring system
9- ADD ALTS
63 Replace original underground fuel storage tank (Existing 500 Gal galvanic tank). Single walled tank and piping are required to be permanently closed in accordance with Health and safety code. 64 Replace /Add new Camera Video Receivers/Transmitters. Existing cameras are PELCO analogue. SHARP intends to replace all existing cameras and add new cameras. SHARP will provide a layout and equipment list for the cameras.
65 Replace exterior windows with energy efficient Vinyl windows. 66 Replace existing heads with recessed sprinklers heads 67 Recertify/Upgrade commercial kitchen appliances, plumbing and refrigeration and fire safety hood system (15th floor) as needed. Consultant to conduct a comprehensive analysis of the existing equipment and identify systems that need to be replaced or recertified ( at minimum replace the ANSUL fire suppression system and certify the refrigeration equipment) * The scope of work for the project does not include any tenant improvement work in the ground and 2nd floors, except the common spaces such as lobbies, elevators, stairs, etc.

Attachment 1: Rental Property Minimum Construction Standards are on the following page.

RVP Group – Cash Proceeds Loan Agreement Page 11
Attachment 1: Lender’s Minimum Construction Standards
This attachment is from Exhibit 2 from the Lender’s Multifamily Lending and Mortgage Revenue Bond Policies.

RENTAL PROPERTY MINIMUM CONSTRUCTION STANDARDS

The following is a list of the required minimum construction standards that must be incorporated into projects participating in SHRA’s Multifamily Financing and/or Mortgage Revenue Bond programs. All rental units and sites associated with these projects must meet or exceed these standards. Exceptions t o these standards may be made for properties subject to U.S. Department of Housing and Urban Development replacement reserve requirements that allow for renovation over time rather than at recapitalization (e.g., Rental Assistance Demonstration conversions for conventional public housing).

Note: For rehabilitation projects, all of the following standards shall apply. The non-rehabilitation sections below shall apply to new construction projects.

Useful Life Expectancy – Rehabilitation only

General Requirements

A. All materials funded under this loan must be new unless previously approved. Recycled items must be approved in writing by SHRA prior to their use.

C. All units shall be approved for occupancy by the local Building Department or any other Agency Having Jurisdiction (AHJ) at the conclusion of the work and prior to occupancy.

Light poles shall be new or painted, and shall be structurally sound and stable.

F. The developer’s architect is responsible for providing an Operating Procedure Outline Sheet (OPOS) for window washing systems where applicable, per Cal-OSHA requirements.

G. SHRA encourages the use of energy and water-efficient systems wherever they may be incorporated into the project.

General Requirements – Rehabilitation only

A. Any component of the project which does or may present a health or safety hazard to the public or tenants

RVP Group – Cash Proceeds Loan Agreement Page 12
shall be corrected to the satisfaction of the local Building Department or AHJ.

B. A clear pest inspection report will be required at the conclusion of the construction work for rehabilitation projects.

C. For all structures where disturbance of any hazardous materials (e.g. lead, asbestos, mold, etc.) will occur, a clearance report from an environmental consultant is required.

Site Work

Vegetation that assists in minimizing crime and enhances public safety is preferred. Trees compromising building envelope materials (roofing, siding, windows, etc.) and/or structura l integrity (including foundations) must be removed. An arborist shall be consulted for an opinion on trees prior to major branch trimming, root cutting or tree removal. All trees, bushes and other plants that are to be removed shall have the root ball removed by grinding or by mechanical means. A landscape plan describing the above must be provided to SHRA for approval.

B. All landscaped areas must be served by a programmable automated irrigation system. The irrigation controller shall be a “Smart Controller” that senses rain to reduce water use. Irrigation shall be designed to use bubblers and other water saving measures. Irrigation must not spray on building. Sprinklers should minimize overspray that runs to storm drain drop inlets. Areas that show evide nce of erosion of soil shall be landscaped to eliminate problems. The landscape plan must be approved by SHRA and applied.

C. For gated communities containing swinging vehicle gates, driveways shall be striped to show the area under the gate swings for safety purposes.

D. All projects shall contain trash enclosures with concrete aprons. Trash enclosures shall be made of cinder block or stucco. Trash enclosures shall be accessible to all tenants. Provisions for tenants with disabilities must be addressed in the project Scope of Development or the project plans.

E. All projects shall meet the parking requirements of the local Agency Having Jurisdiction (AHJ) over the project. "Grandfathered Projects" will need to show that they are in fact “Grandfathered” or other wise exempted by the local AHJ. Otherwise, all projects shall meet the governing ADA requirements for parking.

F. A two percent (2%) slope shall be maintained for a distance of five feet from all structures and no standing water shall remain on the site. Provide an on- site drainage system if necessary.

G. Stairways in common areas must include closed risers and non-slip concrete finish or other slip-resistant material on the treads.

H. Exterior mounted electrical, mechanical, and plumbing systems must be protected from vandalism.

Site Work – Rehabilitation only

A. All landscaping and irrigation systems must be in a well-maintained condition.

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C. All driveways and sidewalks must be in good condition. All cracked or uplifted areas (more than ¼”) shall be repaired or replaced.

D. The asphalt shall be in good condition, with no alligator cracking, longitudinal cracking, potholes, or standing water. Repairs to portions of parking lots not suitable for new coatings shall be performed by removing and replacing damaged paving. A new seal-coat or slurry-coat shall then be applied to the entire parking lot surface. Parking spaces shall be restriped, including ADA aisles and other applicable striping/painting.

Building Envelope and Moisture Protection – Rehabilitation only

A. All areas exposed to moisture must be sealed and watertight. Buildings showing evidence of water intrusion shall have the areas inspected by a licensed architect/engineer or by a certified water intrusion expert. A water intrusion report shall be submitted to SHRA, and shall include the cause of the issue and a resolution to eradicate the water intrusion. If the inspection cannot be completed until the demolition phase of the project, the report shall describe a procedure to inspect the issue during demolition.

B. Roofing must have 15 years or more of remaining life with no visible signs of leakage. For roofs containing composition shingles, a maximum of two layers of shingles are allowed (including any proposed new layers). Provide evidence that the roof system has a 15- year life remaining on the manufacturer’s warranty.

D. Fireplaces must be clean and meet applicable air quality standards. Chimneys shall be clean and must be inspected by a certified chimney inspector for structural integrity. All recommended structural repairs shall be performed.

Doors and Windows

A. All dwelling/tenant units must have screens on all windows that are designed to open. Windows designed to open must have functional locks and must operate freely without excessive effort. All windows must be dual-paned (minimum), and shall meet or exceed the State of California’s currently applicable efficiency standards, and any other efficiency standards that may be dictated by the funding source or other governing bodies for the project.

B. All doors must have matching hardware finishes.

D. All sliding exterior doors shall have screen doors and shall have functional locks and must operate freely

RVP Group – Cash Proceeds Loan Agreement Page 14
without excessive effort.

E. All doors and windows must meet current egress standards.

Doors and Windows – Rehabilitation only

B. All doors and doorjambs must be in good condition. No damaged or worn doorjambs or doors are allowed.

Doors and/or jambs beyond their useful life shall be replaced.

Casework

A. New cabinet boxes shall be made of plywood or solid wood. No particle board boxes will be allowed.

B. All counter tops shall be of solid surface or granite, and in very good condition with no significant scratches, burns or other imperfections.

C. Face frames, doors and drawer faces shall be solid hardwood. No plastic laminate finishes will be allowed.

Casework – Rehabilitation only

A. All cabinets shall be replaced or in very good condition, within their 15 year useful life, both structurally and in appearance.

Finishes

C. Carpet shall meet or exceed the minimum standards as set by HUD’s UM-44D bulletin.

Finishes – Rehabilitation only

A. Floor coverings must be in good, useable condition - no holes, tears, rips, or stains.

C. Acoustic (popcorn) ceiling texture must be removed and refinished with new texture to match wall texture.

Equipment

RVP Group – Cash Proceeds Loan Agreement Page 15
B. SRO projects are encouraged to provide the appliances listed above and will be reviewed and approved on a case-by-case basis.

C. All kitchens must have adequate cabinet and counter space. Installation of shelving for microwaves is required if over-the-range microwaves are not used, with the exception of ADA units.

Furnishings

A. Dwelling units must have window coverings on all windows.

Special Construction

A. Non-habitable structures on property must be painted to match primary buildings and must be structurally sound.

Existing pools shall have no cracks in plaster or tile grout joints. The Developer is responsible for ensuring pool and surroundings meet all applicable current codes and standards. If a project contains two or more pools, at least one must remain following rehabilitation.

Mechanical/Plumbing

A. Water heaters must be installed per current applicable codes.

B. All common areas and tenant units must have heating and air conditioning. Wall mount (i.e. PTAC units) or central systems are acceptable. Evaporative coolers are not acceptable. HVAC units should be protected from vandalism, pursuant to discretion of SHRA.

C. Toilets, showerheads, faucets, and mixing valves shall be new and meet current water conservation codes.

Mechanical/Plumbing – Rehabilitation only

A. All toilets, sinks, and tubs shall be chip and stain free.

Electrical

A. All units must have smoke/carbon monoxide detectors installed per current code.

C. Broadband infrastructure meeting the requirements of 24 CFR 5.100* is required in all new construction projects of 4 or more units.

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*Broadband infrastructure means cables, fiber optics, wiring, or other permanent (integral to the structure) infrastructure, including wireless infrastructure, that is capable of providing access to Internet connections in individual housing units, and that meets the definition of “advanced telecommunications capability” determined by the Federal Communications Commission under section 706 of the Telecomm unications Act of 1996 (47 U.S.C. 1302).

Electrical – Rehabilitation only

A. All electrical panels shall meet current code.

B. Any rehabilitation projects with un-grounded electrical systems shall be re-wired with grounded systems to meet current code.

C. For rehabilitation projects, switches, outlets and light fixtures shall be replaced with devices that meet current applicable codes.

Resident Services Community Space

All properties, regardless of project type (i.e. senior, family, or large family), must devote a minimum of 1,200 s.f. to actual resident services/community space. Resident services space includes common kitchens, computer rooms, meeting rooms and general gathering space. It does not include public restrooms, leasing offices, laundry facilities and lobbies. Common kitchens are required, including refrigerator, stove, garbage disposal, and dishwasher.

For existing buildings, these requirements shall apply unless SHRA deems there to be significant physical constraints.

End of Scope of Development
Exhibit 3: Note Form

PROMISSORY NOTE

FOR RVP GROUP
(CASH PROCEEDS)

PERMANENT LOAN AGREEMENT

BORROWER HAS MADE THIS PROMISSORY NOTE (“NOTE”) AS OF THE EFFECTIVE DATE. The Lender is making the Loan pursuant to the terms and conditions of the Loan Agreement and this Note. This Note includes all attachments and Exhibits listed below, which are attached to and incorporated in this Note by this reference. The capitalized terms in this Note shall have the meanings assigned in the following table of definitions and as defined in the body of the Note. (Terms being defined are indicated by quotation marks. If an item in the table is marked “None, Not Applicable, N/A or equivalent or is left blank, that defined term is not applicable to this Note or the referenced item is not required or is not included in this Note as the context may indicate .) Capitalized terms not defined in this Note shall have the meanings assigned in the Loan Agreement as it may be amended from time to time. The Lender is making the Loan to Borrower in consideration of Borrower making this Note and delivering it to Lender.

For purposes of this Note, the following terms shall have the following meanings:

DEFINED TERM: DEFINITION:
“Effective Date” ***TBD***
“Lender” Housing Authority of the City of Sacramento
“Borrower” RVP Group LP
“Borrower Legal
Status”
a California limited partnership
“Loan Agreement” The Loan Agreement between the Borrower and Lender as of the Effective Date for making of the loan (“Loan”) evidenced by this Note.
“Principal
Amount”
Zero Dollars and No Cents ($0.00) as may be increased in accordance with the Special Terms. “Interest Rate” Interest shall accrue on the unpaid Principal Amount of this Note at the applicable federal rate in effect on the accrual date, which was ***AFR*** per annum, compounded annually “Accrual Date”
Interest shall accrue starting on the
following “Accrual Date”:

The date of the first close of escrow for all or any part of Borrower’s Approved Permanent Financing for the
Project (“Conversion Date”). Once the Conversion Date
occurs, it will not be affected by any subsequent close of escrow for any Approved Permanent Financing.
“Special Terms”

1. On or before the Conversion Date, Borrower shall submit to Lender a cost certification prepared by a qualified, independent auditor acceptable to Lender, which cost certification shall indicate the amounts actually spent for each item in the cost breakdown. If there is an aggregate savings in the total of all such cost breakdown items from the cost breakdown items in the original Budget approved by the Lender the Lender shall withhold for itself as Loan repayment, one-half of such savings from the amount of retention then held by the Lender, and the Loan balance shall be reduced by the amount so withheld. The Lender, in its sole discretion, shall determine any reduction and/or repayment of the Loan based upon this cost certification and the original approved Budget for the Project.

2. At any time before the Maturity Date and from time to time, Borrower may request in writing that the Principal Amount be increased (“Loan Increase Request”). If, in Lender’s sole and absolute discretion, Lender approves the Loan Increase Request, the definiti on of Principal Amount in this Note shall be automatically amended to be the aggregate sum of the original principal amount of $0.00 plus all loan increases, provided that the Principal Amount shall never exceed $2,000,000.00 (Two Million Dollars and No Cents).

PAYMENT SCHEDULE. Repayment of this Note shall be made as follows:
“Maturity Date” The first day of the 684th calendar month following the Effective Date.

RVP Group – Cash Proceeds Promissory Note Page 2
“Payment
Amount(s)”
ANNUAL REPAYMENT: Annual principal and interest payments shall begin on May 1st following conversion to permanent financing. Annual payments will be made on a Residual Receipts basis, as defined below, until the maturity date. Annual payments shall be applied first to outstanding interest accrued and unpaid and then to principal. “Residual Receipts” is defined as follows: beginning from the Loan’s Effective Date, annual installments (as described in this paragraph) are to begin. Based on the annual audited financial statement from the preceding year, payments will be made upon a “Residual Cash Flow” basis meaning Net Operating Income (NOI) less:
i. to the Limited Partner for unpaid credit deficiency, taxes owed on taxable income allocated to the Limited Partner, and unpaid Investor Services Fees;

ii. to replenish the operating reserve to required level;

iii. to the property manager for the cash flow portion of property management fee (if related manager);

iv. to the developer to pay off remaining deferred Development Fee;

vi. to contingent loan payments with limits for each loan scheduled in the projections and in accordance with the loan documents;

vii. to a percentage to the General Partner accompanied by a special allocation of income of such amount and the remainder to the Limited Partner per Section B above

To the extent that insufficient Residual Cash Flow is available to pay any of the amounts set forth in Sections (i) through (vii) when due, such amount shall accrue and be payable in the future when there is available Residual Cash Flow, after prior payment of all higher priority payments from Residual Cash Flow, as set forth above.

“Operating Expenses” shall mean actual costs, fees and expenses as evidenced by invoices attributable to the operation, recordkeeping, maintenance, taxes and management of the Project, including property management fees; taxes and assessments; payroll, benefits and payroll taxes of for property employees; insurance; security; painting, cleaning, repairs, and alterations; landscaping; sewer charges; utility charges; advertising, promotion and publicity; cable television, satellite and other similar services; office, janitorial, cleaning and building supplies; recreational amenities and supplies; purchase, repair, servicing and installation of appliances; costs and expenses associated with the provision of social and/or community servi ces to the residents of the Project; equipment, fixtures and furnishing; fire alarm and elevator monitoring; fees and expenses of accountants, attorneys, consultants and other professionals. The definition will include deposits into operating and/or RVP Group – Cash Proceeds Promissory Note Page 3
replacement reserves maintained by the Borrower but will not include initial deposits to capitalize the reserve accounts or amounts expended from a reserve account, or capital cost s.

2. All payments on this Note shall be applied first to fees and charges due under the Loan Agreement, if any, then to interest and then to the principal due on this Note. Borrower shall make the payments to the Lender at 801 12 th
Street, Sacramento, CA 95814, or to such other person or organization as may be designated by Lender to Borrower and noticed as provided in the Loan Agreement.

5. Lender and Borrower shall comply with and fulfill the Special Terms.

RVP Group – Cash Proceeds Promissory Note Page 4
g. Any of the following occur:
1) Borrower becoming insolvent or bankrupt or being unable or admitting, in writing, Borrower’s inability to pay debts as they mature or making a general assignment of or entering into any restructure payment arrangement with creditors.
2) Proceedings for the appointment of a receiver, trustee or liquidator of the assets of Borrower or a substantial part of such assets, being authorized or instituted by or against the Borrower. 3) Proceedings under any bankruptcy, reorganization, readjustment of debt, insolvency, dissolution, liquidation or other similar law of any jurisdiction being authorized or instituted against Borrower.

7. No waiver of any default or breach by Borrower under this Note shall be implied from any omission by Lender to take action on account of such default, and no express waiver shall affect any default, other than the default specified in the waiver. Such waiver shall be in writing and shall be operative only for the time and to the extent therein stated.

8. Borrower may prepay this Note in full or in part at any time, without any prepayment penalty being charged by Lender.

10. Subject to the provisions of this Section 10, and notwithstanding any provision of the Loan Documents other than this Section 10, the personal liability of Borrower, and Borrower’s principals, partners, members, agents, officers, and successors in interest, to pay the principal of and interest on the debt evidenced by this Note and any other agreement evidencing Borrower's obligat ions under this Note shall be limited to (a) the Collateral (as defined in the Loan Agreement), (b) the personal property described in and pledged under any Loan Document, and (c) the rents, profits, issues, products and income of the Property, including any received or collected by or on behalf of Borrower after an Event of Default under the Loan Documents.

11. Borrower shall pay to Lender all costs of enforcement of all or any portion of this Note, the Trust Deed, and the Regulatory Agreement, including attorney's fees, witness fees, investigator fees and court costs, incurred by Lender, whether or not litigation is commenced.

RVP Group – Cash Proceeds Promissory Note Page 5
IN WITNESS WHEREOF, Borrower has executed this Note as of the Effective Date.

Borrower:

RVP Group LP, a California limited partnership

By: RVP Group LLC, a California limited liability company, its managing general partner

By: Sacramento Housing Authority Repositioning
Program, Inc., a California nonprofit public
benefit corporation, its sole member and manager

By: _____________________________
James Shields, President

Exhibit 4: Trust Deed Form
NO FEE DOCUMENT:

Entitled to free recording
per Government Code §§6103 and 27383.

When recorded, return to:

SACRAMENTO HOUSING AND

REDEVELOPMENT AGENCY
801 12th Street
Sacramento, CA 95814
Attention: Portfolio Management

DEED OF TRUST AND ASSIGNMENT OF RENTS
RVP Group

For purposes of this Deed of Trust the following capitalized terms shall have the meanings ascribed in the space adjacent to them:

TERM DEFINITION
“Effective Date” ***TBD***
“Trustor” and
“Borrower”
RVP Group LP, a California limited partnership
“Borrower
Address”
801 12th Street, Sacramento, CA 95814
“Trustee” Placer Title Company
“Beneficiary” and
“Lender”
Housing Authority of the City of Sacramento, a public body, corporate and politic “Lender Address” 801 12th Street, Sacramento, California 95814 “Property”
Which is real property located in the County of Sacramento and the State of California as more particularly described in the Legal Description.

Address Pine Knoll – 917 38th Street, Sacramento, 95816; Big Trees – 2516 H Street, Sacramento , 95816;
Riverview Plaza – 600 I Street, Sacramento ,
95814
Assessor’s Parcel Number Pine Knoll – 008-032-025-0000, 008-0032-032- 0000, 008-0032-033-0000;
Big Trees – 007-0033-007-0000;
Riverview Plaza – 006-0032-029-001, 006-0032-
029-002, 006-0032-029-003, 006-0032-028-004
“Legal
Description”
The Legal Description of the Property which is more particularly described in the attached Exhibit 1: Legal Description, which is incorporated in and an integral part of this Deed of Trust
“Loan” Which is Lender’s loan to Borrower evidenced by the Note and which is secured by this Deed of Trust.
“Loan
Agreement”
Which is the agreement between Lender and Borrower stating the term and conditions of the Loan.

N/A
RVP Group – Cash Proceeds Deed of Trust and Assignment of Rents Page 2 “Note”
Which is Borrower's promissory note made in accordance with the Loan Agreement evidencing the following principal sum or such lesser amount as shall equal the aggregate amount disbursed to Borrower by Lender, with interest.

Which has a principal sum of Zero Dollars and No Cents ($0.00) as may be increased in accordance with the Special Terms in
the Note.

THIS DEED OF TRUST is made as of the Effective Date between the Trustor also referenced as the Borrower, the Trustee, and the Beneficiary also referenced as Lender.

Borrower, in consideration of the indebtedness described below and the trust created by this Deed of Trust, irrevocably grants and conveys the Property to Trustee, in trust with power of sale.

Together with all the improvements now or subsequently erected on the property, and all easements, rights, appurtenances, rents (subject, however, to the rights and authorities given to Lender to collect and apply such rents), royalties, mineral, oil and gas rights and profits, water, water rights, and water stock, and all fixtures, including but not limited to all gas and electric fixtures, engines and machinery, radiators, heaters, furnaces, heating equipment, steam and hot water boilers, stoves, ranges, elevators and motors, bathtubs, sinks, water closets, basins, pipes, faucets and other plumbing and heating equipment, cabinets, mantels, refrigerating plant and refrigerators, whether mechanical or otherwise, cooking apparatus and appurtenances, furniture , shades, awnings, screens, venetian blinds and other furnishings, now or hereafter attached to the property, all of which, including replacements and additions thereto, shall be deemed to be and remain a part of the property covered by this Deed of Trust; and all of the foregoing, together with said property (or the leasehold estate if this Deed of Trust is on a leasehold) are referred to as the "Property";

To secure to Lender: (a) the repayment of the Loan; and (b) the performance of the covenants and agreements of Borrower contained in this Deed of Trust, the Note, or the Loan Agreement.

Borrower covenants that Borrower is lawfully seised of the estate conveyed by this Deed of Trust and has the right to grant and convey the Property, and that Borrower w ill warrant and defend generally the title of the Property against all claims and demands, subject to any declarations, easements or restrictions listed in a schedule of exceptions to coverage in any title insurance policy insuring Lender's interest in the Property.

Borrower and Lender covenant and agree as follows:

3. Hazard Insurance. Borrower shall keep the improvements now existing or later erected on the Property insured against loss of fire or hazards under a policy approved by Lender consistent with the insurance requirements of the Loan Agreement. In addition, Borrower shall insure against loss of all furniture, equipment and other personal property owned by Borrower related to Borrower's operation of the Property.

Lender shall have the right to hold the policies and policy renewals, and Borrower shall promptly furnish to Lender all renewal notices and all receipts of paid premiums. In the event of loss, Borrower shall give prompt notice to the insurance carrier and Lender. Lender may make proof of loss if not made promptly by Borrower.

RVP Group – Cash Proceeds Deed of Trust and Assignment of Rents Page 3 Unless Lender and Borrower otherwise agree in writing, insurance proceeds shall be applied to restoration or repair of the Property damaged, as and to the extent provided in the Loan Agreement.

4. Liability Insurance. Borrower shall keep comprehensive general liability insurance for the Property in a form and coverage consistent with the provisions of the Loan Agreement and reasonably approved by Lender.

5. Preservation and Maintenance o f Property. Borrower shall keep the Property in good repair and shall not commit waste or permit impairment, demolition, or deterioration of the Property.

6. Protection of Lender's Security. Borrower shall appear and defend any action or proceeding purport ing to affect the security under this Deed of Trust or the rights of the Lender. If Borrower fails to perform the covenants and agreements contained in this Deed of Trust, or if any action or proceeding is commenced which materially affects Lender's inter est in the Property, including, but not limited to, foreclosure, involuntary sale, eminent domain, insolvency, code enforcement, or arrangements or proceedings involving a bankrupt or decedent, then Lender may, upon notice to Borrower, make such appearance s, disburse such sums and take such actions as are necessary to protect Lender's interest, including, but not limited to, disbursement of judgments, costs or reasonable attorney's fees and entry upon the Property to make repairs.

Any amounts disbursed by Lender pursuant to this Section 6, with interest, shall become additional indebtedness of Borrower secured by this Deed of Trust. Unless Borrower and Lender agree to other terms of payment, such amounts shall be payable upon notice from Lende r to Borrower requesting payment, and shall bear interest from the date of disbursement at the highest rate permissible under applicable law. In any event, this Section shall be construed as a right and an option of Lender and shall not be construed to require Lender to incur any expense or take any action.

Sacramento City CouncilMay 9, 2023

Sacramento City Council
May 9, 2023