St. Helena City Council
May 14, 2024

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Attachment 3

in and prosecute any action arising from such insurance policies, to collect and receive insurance proceeds, and to deduct therefrom Beneficiary’s expenses incurred in the collection of such proceeds; provided, however, that nothing contained in this Section shall require Beneficiary to incur any expense or take any action hereunder. Trustor hereby authorizes and empowers Beneficiary, at Beneficiary’s option, as attorney-in-fact for Trustor, to commence, appear in, and prosecute, in Beneficiary’s or Trustor’s name, any action or proceeding relating to any condemnation or other taking of all or any part of the Property, whether direct or indirect, and to settle or compromise any claim in connection with such condemnation or other taking. The proceeds of any award payment or claim for damages, direct or consequential, in connection with any condemnation or other taking, whether direct or indirect, of the Property, or any part thereof, or for conveyances in lieu of the Property, or any part thereof, shall be paid to Beneficiary. The foregoing powers of attorney are coupled with an interest and are irrevocable. Trustor hereby authorizes Beneficiary to apply such awards, payments, proceeds or damages relating to condemnation of the Property and insurance covering the Property, after the deduction of Beneficiary’s expenses incurred in the collection of such amounts, subject to the requirements of applicable law and the provisions hereof, to restoration or repair of the Property or to payment of the sums secured by this Deed of Trust. Beneficiary shall be under no obligation to question the amount of any compensation, awards, proceeds, damages, claims, rights of action, and payments relating to condemnation or other taking of the Property or insured casualty affecting the Property, and may accept the same in the amount in which the same shall be paid. Trustor shall execute such further evidence of assignment of any awards, proceeds, damages or claims arising in connection with such condemnation or taking or such insurance as Beneficiary may require.

Notwithstanding the above, the Beneficiary shall release all insurance and condemnation proceeds to Trustor to be used to reconstruct the improvements on the Property provided that Beneficiary reasonably determines that such restoration, repair or rebuilding is economically feasible, provided, Beneficiary acknowledges and agrees that if any casualty affects the Property at any point after the execution of this Deed of Trust and prior to the rehabilitation of the Trustor’s Improvements, the Trustor shall not be obligated to reconstruct any improvements on the Property. If such insurance proceeds shall be insufficient for such purposes, Trustor shall make up the deficiency. If the Project is subject to a partial condemnation or taking, then the proceeds received therefrom shall be applied to restore the Project taken, provided the Beneficiary determines that such restoration is economically feasible and no default exists under the Loan Documents following the expiration of all applicable cure periods. If the Project is subject to a total condemnation, or if Beneficiary determines that restoration of the Project is not feasible following a partial condemnation, or if a default exists then the proceeds from any condemnation award or claim for damages shall be used first to repay all sums under the Note, with the excess, if any, paid to Trustor, subject to the rights of the senior lender.

17. Severability. If any one or more of the provisions contained in this Deed of Trust shall for any reason be held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provisions of this Deed of Trust, but this Deed of Trust shall be construed as if such invalid, illegal, or unenforceable provision had never been contained herein or therein, but only to the extent of such invalidity.

18. Estoppel Certificate. Trustor shall, within fifteen (15) days of a written request from Beneficiary, furnish Beneficiary with a written statement, duly acknowledged, setting forth Agenda Item #12.1.

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Attachment 3

the sums secured by this Deed of Trust and any right of set-off, counterclaim or other defense which exists against such sums and the obligations of this Deed of Trust.

19. California Uniform Commercial Code Security Agreement; Fixture Filing.

Trustor hereby grants Beneficiary a security interest in all personal property of Trustor located on the Property and wherever located and used in any way in connection with or in any way relating to the Property, and whether now owned or hereafter in existence, acquired or created (including equipment, inventory, goods, documents, instruments, general intangibles, chattel paper, accounts, accounts receivable, deposit accounts, and contract rights), and all fixtures of Trustor now owned or hereafter in existence, acquired or created on, of or relating to the Property, and all substitutions, replacements, additions, accessions, and proceeds (including insurance proceeds) of all of the foregoing (collectively, the “Personal Property”). Beneficiary may file this Deed of Trust, or a reproduction hereof, in the real estate records or other appropriate index, as a financing statement for the Personal Property. Any reproduction of this Deed of Trust or of any other security agreement or financing statement shall be sufficient as a financing statement. In addition, Trustor shall execute and deliver to Beneficiary, upon Beneficiary’s request, any financing statements, as well as extensions, renewals, and amendments thereof, and reproductions of this Deed of Trust in such form as Beneficiary may require to perfect a security interest with respect to the Personal Property. Trustor shall pay all costs of filing such financing statements and any extensions, renewals, amendments, and releases thereof, and shall pay all reasonable costs and expenses of any record searches for financing statements Beneficiary may reasonably require. Upon Trustor’s breach of any covenant or agreement of Trustor contained in this Deed of Trust, including the covenants to pay when due all sums secured by this Deed of Trust, Beneficiary shall have the remedies of a secured party under the California Uniform Commercial Code and, at Beneficiary’s option, may also invoke any remedies provided in this Deed of Trust as to the Personal Property. In exercising any of such remedies, Beneficiary may proceed against the Property and any of the Personal Property separately or together and in any order whatsoever, without in any way affecting the availability of Beneficiary’s remedies under the California Uniform Commercial Code or the remedies provided in the Deed of Trust. This Deed of Trust also covers goods which are or which are to become fixtures on the Property and constitutes and is filed as a fixture filing under the California Uniform Commercial Code.

20. Due-On-Sale or Encumbrance. Except as authorized under the Affordable Housing Covenant or a subordination agreement affecting the Secured Obligations, if all or any part of the Property, or any interest therein, or any beneficial interest in Trustor (if Trustor is not a natural person or persons but is a corporation, partnership, trust, limited liability company or other legal entity), is sold, transferred, mortgaged, assigned, pledged, or further encumbered, whether directly or indirectly, whether voluntarily or involuntarily, or by operation of law, Beneficiary may, at Beneficiary’s option, declare all of the sums secured by this Deed of Trust to be immediately due and payable, and Beneficiary may invoke any remedies permitted by this Deed of Trust.
[CONTINUED ON NEXT PAGE]
Agenda Item #12.1.

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Attachment 3

The undersigned Trustor requests that a copy of any Notice of Default and of any Notice of Sale hereunder be mailed to Trustor at Trustor’s address hereinbefore set forth, and to Trustor’s limited partner at its address set forth in the Loan Agreement entered into by and between Trustor and Beneficiary referenced in Section 1, above.

TRUSTOR:

Hunt Pradera II, L.P.,
a California limited partnership
By: Hunt Pradera II, LLC,
a California limited liability company,
its General Partner
By: BRIDGE Housing Corporation,
a California nonprofit public benefit corporation,
its Managing Member
By: ______________________________
Smitha Seshadri
Executive Vice President
By: Napa Valley Community Housing,
a California nonprofit public benefit corporation,
its Managing Member
By: ___________________________
Erica R. Sklar
President and Chief Executive
Officer
Agenda Item #12.1.

83578.00012\42274830.1
Exhibit A

EXHIBIT A

LEGAL DESCRIPTION OF THE PROPERTY

TO BE ADDED
Agenda Item #12.1.

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ACKNOWLEDGEMENT
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

STATE OF CALIFORNIA )

COUNTY OF )
On _________________, 2024 before me, , Notary Public,
personally appeared , who proved to me on the
basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

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

WITNESS my hand and official seal.

Signature: (seal)
Agenda Item #12.1.

83578.00012\42274830.1

ACKNOWLEDGEMENT
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

STATE OF CALIFORNIA )

COUNTY OF )
On _________________, 2024 before me, , Notary Public,
personally appeared , who proved to me on the
basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

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

WITNESS my hand and official seal.

Signature: (seal)
Agenda Item #12.1.

83578.00012\42274830.1
Attachment 4

ATTACHMENT NO. 4

FORM OF AFFORDABLE HOUSING COVENANT

RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
1088 College Avenue
St. Helena, California 94574
Attn: City Manager
Space above line for Recorder’s use only
Exempt from Recording Fees pursuant to Govt. Code § 27383 CITY OF ST. HELENA

AFFORDABLE HOUSING COVENANT
(Hunt’s Grove)
THIS AFFORDABLE HOUSING COVENANT (the “Affordable Housing Covenant”) is entered into as of __________________, 2024, by and between the CITY OF ST. HELENA, a California municipal corporation (the "City") and Hunt Pradera II, L.P., a California limited partnership, ("Owner"), which parties agree that certain parcel of real property (the "Property") legally described on Exhibit A. Owner owns a leasehold interest pursuant to a Ground Lease, entered into on or about the same date hereof (the “Ground Lease”) with the City, which owns the fee interest in the Property. Pursuant to the Ground Lease, which has a term of ninety-nine (99) years, Owner shall operate the Property in accordance with this Affordable Housing Covenant, will be subject to the conditions, restrictions, reservations, rights and power of termination of the City specified below:

1. PURPOSE. This Affordable Housing Covenant is entered into concurrently with an Agreement For Amendment, Assignment, and Assumption of Affordable Housing Loan (“Affordable Housing Loan Agreement”), for purposes of imposing affordability covenants on the Property for the term of the Ground Lease.

2. USE OF THE PROPERTY. Owner hereby covenants and agrees, for itself, its lessees, successors and assigns, that the Owner shall not use the Property other than for the development, rehabilitation, and operation of an affordable rental housing project (including ancillary uses) in compliance with this Affordable Housing Covenant for the duration of the Ground Lease. All capitalized terms in this Affordable Housing Covenant that are not defined herein shall have the meaning set forth in the Affordable Housing Loan Agreement.

3. REHABILITATION OF THE PROJECT. Owner shall rehabilitate the existing rental units on the Property in accordance with the terms of the Affordable Housing Loan Agreement (the "Project").

Agenda Item #12.1.

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Attachment 4

4. OCCUPANCY.
(a) For the purposes of this Affordable Housing Covenant, the following definitions shall apply:
(i) Affordable Rent. Affordable Rent shall mean a rent that does not exceed the rent limitations published by the California Tax Credit Allocation Committee (“CTCAC”) for a “Low Income Household” or “Moderate Income Household,” as defined herein, with a reasonable utility allowance.
(ii) Area Median Income or AMI. The area median gross yearly income area median income for the Napa, California MSA, as published periodically by the United States Department of Housing and Urban Development (HUD). (iii) Low Income Household. A low income household is defined to be a household whose gross income does not exceed eighty percent (80%) but more than fifty percent (50%) of the Adjusted Median Income.
(iv) Moderate Income Household. A moderate income household is defined to be a household whose gross income is less than one hundred twenty percent (120%) but more than eighty percent (80%) of the Adjusted Median Income. (b) Affordability Requirements.
(i) Rent and Income Restrictions. From the date of the recording of this Affordable Housing Covenant and thereafter, for the remaining Term of this Affordable Housing Covenant , Owner, for itself and any successors in interest, hereby covenants and agrees that fifty five (55) dwelling units (“Affordable Units”) within the Project shall be rented to Low Income Households or Moderate Income Households at a rent that does not exceed the Affordable Rent, as adjusted for household size appropriate to the applicable unit. (ii) Affordable Unit Mix. At least twenty seven (27) Affordable Units shall be restricted for occupancy by qualifying at or below Low Income Households (the “Low Income Units”). The remaining units shall be set aside for at or below Moderate Income Households (the “Moderate Income Units”).
(c) Occupancy of the Property shall be open to all persons regardless of age, race, sex, marital status, color, religion, sexual orientation, political affiliation or opinion, national origin, ancestry, medical condition, or condition of physical or mental disability. In addition, the Owner agrees to conduct its own affirmative action and affirmative action marketing programs as provided herein. Owner additionally shall comply with Title VI of the Civil Rights Act of 1964 (Public Law 88-352), and with the City’s equal employment opportunity programs.

5. INCOME CERTIFICATION.

Agenda Item #12.1.

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Attachment 4

Owner shall certify the incomes of all households on the Property in order to ensure that the occupancy standards specified in Section 3 are met. This certification shall be made as follows:
(a) Owner shall verify the incomes of the applicants to establish that the applicants’ households have incomes at or below the limits applicable to Low Income Households or Moderate Income Households as specified in Section 3 of this Affordable Housing Covenant. (b) Owner shall report to the City annually on vacancies filled during the prior year and certify each new household’s income as specified above to determine that the occupancy of the Property complies with Section 3.
(c) Tenants who qualify as households of very low, low or moderate income at the commencement of their tenancy shall be deemed to continue throughout the term of their tenancies to be very low, low or moderate income households, respectively, to the end that no tenant shall be denied continued occupancy in the Property because, after occupancy, such tenant’s income increases such that the income for such household will no longer qualify such household as qualifying tenants.

6. INCOME AND RENT LEVELS.
(a) For the purposes of this Affordable Housing Covenant, affordable rent levels applicable to very low, low and moderate income households shall comply with rent limitations published by the California Tax Credit Allocation Committee, and shall not exceed the following for the respective income category:

Low Income Household: Adjusted Median Income x 80 % x 30% = Maximum Allowable Rent (Annual).

Moderate Income Household: Adjusted Median Income x 120 % x 30% = Maximum Allowable Rent (Annual).

7. MANAGEMENT AND MAINTENANCE.
(a) The Owner shall be ultimately responsible for all management and maintenance functions at the Property, including selection of tenants, certification of incomes, evictions and other terminations of tenancies, collection of rents, and all repair and maintenance functions, including ordinary and extraordinary maintenance and replacement items, but may discharge such obligations by appointment of a property management agent to assume such functions.
(b) The Owner may contract with a private or public entity for the performance of services or duties required pursuant to subsection 0 above. Such management agent and the terms and conditions of the contract for management services between the Owner and the management agent shall be subject to prior approval of the City, which consent shall not unreasonably be withheld. However, such a contractual arrangement shall not relieve the Owner of responsibility for proper performance of all management duties described herein.

Agenda Item #12.1.

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Attachment 4

8. PROHIBITED ACTS.
(a) The Owner shall not without prior written approval of the City:
(i) Make any sale, encumbrance, hypothecation, assignment, conveyance, or transfer of the Property in any form (except individual leases or rental agreements to tenants in accordance with the provisions in this Affordable Housing Covenant) of the Property or any part thereof or any of its interest therein, without prior written approval of the City. Any sale, transfer, encumbrance, hypothecation, assignment, conveyance, or other disposition of the Property or change in the composition of the entities comprising the Owner in violation of this Section shall be null, void and without effect, shall cause a reversion of the title to the Owner and shall be ineffective to relieve the Owner of its obligations under this Affordable Housing Covenant, and any attempted sale, encumbrance, hypothecation, assignment, conveyance, transfer, or other disposition of the Property shall be a breach hereof and default under the Deed of Trust.
(ii) Execute any other agreement(s) with provisions contradictory of, or in opposition to, the provisions hereof. The Owner affirms that the requirements of this Affordable Housing Covenant are paramount and controlling as to the rights and obligations, set forth herein and supersede any other requirements in conflict therewith which are inferior in recorded priority to this Affordable Housing Covenant.
(iii) Permit the use of the dwelling units at the Property for any purpose except that which was originally intended. To that end, the Owner shall not permit any transient use, or permit any commercial use, of the Property except as approved by the City in writing. (iv) Invest any funds from the Property in any property, whether real, personal or mixed, other than in the ordinary course of business, except as authorized in writing by the City.

9. DEFAULT.
(a) Events of Default. The occurrence of any of the following shall constitute an Event of Default:

1. The Owner’s failure to perform any other obligation (other than obligations described in subparagraph (i), above) under this Affordable Housing Covenant, and such failure is not cured within thirty (30) days after the City gives the Owner written notice that such obligation was not performed; provided that, if such cure cannot reasonably be effected with such 30 day period, such failure shall not be an Event of Default so long as the Owner promptly (in any event, within six months after such notice is given) commences cure, and thereafter diligently prosecutes such cure to completion; or

2. Any representation or warranty in this Affordable Housing Covenant proves to have been incorrect in any material respect when made; or Agenda Item #12.1.

83578.00012\42274830.1
Attachment 4

3. The Owner is dissolved, liquidated or terminated, and is not replaced by an entity acceptable to the City (which approval shall not unreasonably be withheld); or

4. The Owner is the subject of an order for relief by a bankruptcy court, or is unable or admits its inability to pay its debts as they mature, or makes an assignment for the benefit of creditors; or the Owner applies or consents ‘to the appointment of any receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar officer for it or any part of its property; or any receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar officer is appointed without the application or consent of the Owner and the appointment continues undischarged or unstayed for 60 days; or the Owner institutes or consents to any bankruptcy, insolvency, reorganization, arrangement, readjustment of debt, dissolution, custodianship, conservatorship, liquidation, rehabilitation or similar proceeding relating to it or any part of its property; or any similar proceeding is instituted without the consent of the Owner and continues undismissed or unstayed for 60 days.
(b) Remedies Upon Default.

Upon the occurrence of any Event of Default, the City may:

1. Declare the entire sum of accrued interest and the then outstanding principal balance of any promissory note from the City to Owner immediately due and payable.

2. Collect all rents, profits, income and charges in connection with the operation of the units in the Property and use the same, or the proceeds thereof, in such order as the City may determine, toward satisfaction of the Owner’s obligations under this Affordable Housing Covenant, toward payment of obligations arising under any trust deeds superior to the Deed of Trust, and toward the necessary expenses of preserving and operating the Property.

3. Take possession of the Property, bring any action necessary to enforce any rights of the Owner growing out of the operation of the Property, and operate the Property in accordance with the terms of this Affordable Housing Covenant and the Deed of Trust, until such time as the City, in its sole discretion, shall determine that the Owner is again in a position to operate the Property in accordance with the terms of this Affordable Housing Covenant.

4. Apply to any court, State or Federal, for specific performance of this Affordable Housing Covenant; for an injunction against any violation by the Owner of this Affordable Housing Covenant, for the appointment of a receiver to take over and operate the Property in accordance with the terms of this Affordable Housing Covenant, or for such other relief as may be appropriate, including but not limited to, payment of the principal balance of the Loan plus accrued interest thereon.

The remedies of the City herein, or under any other instrument providing for or evidencing the financial assistance provided herein, are cumulative, and the exercise of one or more of such remedies shall not be deemed an election of all remedies and shall not preclude the exercise by the City of any one or more of its other remedies.

Agenda Item #12.1.

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Attachment 4

At the Owner’s request, the City shall provide by mail copies of any notice of any violation to all other lien holders, at the address for notices most recently provided by the Owner or such lien holders for such notices, and such parties shall have the same right to cure the Owner’s defaults hereunder on behalf of the Owner.

10. SUBORDINATION OF THIS REGULATORY AGREEMENT. Notwithstanding anything in this Agreement to the contrary, in the event that any provision of this Agreement in any way tends to contradict, modify or in any way change the terms of any senior recorded trust deed, security instrument or regulatory agreement encumbering the Property, the Borrower’s compliance with such conflicting or contradictory terms of superior trust deeds, security agreements and regulatory agreements shall not be a default hereunder. Notwithstanding the foregoing, no provision hereof shall be construed as being in conflict with or contradicting a superior instrument if the obligations arising hereunder merely require a higher standard of performance than is required under a superior instrument.

11. GENERAL PROVISIONS
(a) The terms of this instrument shall bind, and the benefits shall inure to, the respective parties hereto, their legal representatives, executors, administrators, and successors in office or interest.
(b) The City, its agents and employees, shall have the right after reasonable notice, to review and inspect the books, records and accounts of the Owner specifically regarding the Property, from and after the date of the recordation of this Affordable Housing Covenant and until the termination of this Affordable Housing Covenant. (c) Any notice, tender, or delivery to be given hereunder by either party to the other shall be in writing and may be effected by personal delivery or by mail, postage prepaid, and shall be deemed received upon delivery, if personally delivered, or as of three (3) days from mailing. Notices shall be addressed as set forth below; each party may change its address by written notice in accordance with this Section.

Agenda Item #12.1.

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Attachment 4

Owner:

And:

Hunt Pradera II, L.P., a California limited partnership c/o BRIDGE Housing Corporation
600 California Street, Suite 900
San Francisco, CA 94108
Attention: Smitha Seshadri
c/o Napa Valley Community Housing
150 Camino Dorado
Napa, CA 94558
Attention: Erica R. Sklar
And a copy to: Gubb & Barshay LLP
235 Montgomery Street, Suite 1110
San Francisco, CA 94104
Attn: Evan Gross
And a copy to: MCC Housing LLC
c/o Merritt Community Capital Corporation
1901 Harrison Street, Suite 1650
Oakland, California 94612
Attention: President & CEO
City : City of St. Helena
1088 College Avenue
St. Helena, California 94574
Attn: City Manager
With a copy to: Best Best & Krieger LLP
500 Capitol Mall, Suite 1700
Sacramento, CA 95814
Attn: Ethan Walsh
(d) This Affordable Housing Covenant represents the entire agreement of the parties hereto with respect to the subject matter hereof and may not be altered or amended except by writing executed between the party to be charged.
(e) If any provision of this Affordable Housing Covenant shall be found to be invalid, illegal or unenforceable by a court of competent jurisdiction, the validity, legality and enforceability of the remaining provisions hereof shall not in any way be affected or impaired thereby.

Agenda Item #12.1.

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Attachment 4

(f) The use of the plural in this Affordable Housing Covenant shall include the singular and the singular shall include the plural, and the use of one gender shall be deemed to include all genders.
(g) This Affordable Housing Covenant shall, at the expense of the Owner, be acknowledged by each of the parties and recorded in the Official Records of the County of Napa.

This Affordable Housing Covenant shall be indexed in the grantor index to the name of the Owner and in the grantee index to the name of the City. (h) The Owner and its successor in interest agrees to indemnify, defend, and hold harmless the City, its respective agents, employees and officers from any and all claims, losses, liabilities or causes of action (including reasonable attorney’s fees) arising from or in connection with the Owner’s management, maintenance or operation of the Property, except for the gross negligence or intentional misconduct of City or any of its employees, or officers. (i) No waiver by the City of any breach of or default under this Affordable Housing Covenant shall be deemed to be a waiver of any other or subsequent breach thereof or default hereunder.
(j) This Affordable Housing Covenant shall be construed in accordance with and governed by the laws of the State of California.
[Signatures to appear on the following page.]
Agenda Item #12.1.

83578.00012\42274830.1
Attachment 4

IN WITNESS WHEREOF, the City and the Owner have executed this Affordable Housing Covenant by duly authorized representatives, all on the date first written above.

Date:

CITY:

CITY OF ST. HELENA, a municipal corporation
By:
[insert name]
Title: ___________________
ATTEST:

City Clerk
APPROVED AS TO FORM:

City Attorney
Agenda Item #12.1.

83578.00012\42274830.1
Attachment 4

Date: OWNER:

Hunt Pradera II, L.P.,
a California limited partnership
By: Hunt Pradera II, LLC,
a California limited liability company,
its General Partner
By: BRIDGE Housing Corporation,
a California nonprofit public benefit corporation,
its Managing Member
By: __________________________
Smitha Seshadri
Executive Vice President
By: Napa Valley Community Housing,
a California nonprofit public benefit corporation,
its Managing Member
By: ___________________________
Erica R. Sklar
President and Chief Executive
Officer
All signatures must be notarized.

Agenda Item #12.1.

83578.00012\42274830.1
Exhibit A

EXHIBIT A
Property Legal Description
Merger Description
Lands of Our Town St. Helena
City of St. Helena, County of Napa, State of California Real property situated in the City of St. Helena, County of Napa, State of California, being all of Tract One, Parcel One together with all of Tract Two as said Tracts are described in the Grant Deed to Our Town St. Helena, a California non-profit benefit corporation recorded September 20, 2019 as instrument number 2019-0018836 in the Official Records of the County of Napa, said Tracts being described as a whole for the purposes of a voluntary merger as follows:

Beginning at the Northern corner of said Tract One, Parcel One, described in said instrument number 2019-0018836 as being “the most Western corner of a lot heretofore conveyed to George Chase and wife to one Mrs. F. M. Woodward by Deed recorded December 12, 1884 in Volume 35 of Deeds at page 387, Napa County Records;
thence running along the South Westerly line of lot so conveyed to Mrs. F. M. Woodward, South 38º 30’ East 150 feet” to the most Eastern corner of said Tract One, Parcel One; thence South 51º 30’ West parallel with Pope Street and 150 feet distant therefrom 60 feet to the most Southern corner of said Tract One, Parcel One, being the most Eastern corner of said Tract Two;
thence South 51º 30’ West 25.0 feet to the most Southern corner of said Tract Two; thence North 38º 30’ West, parallel to the line common to said Tract One, Parcel One and said Tract Two 150.0 feet to the Southeastern line of Pope Street, being the most Western corner of said Tract Two;
thence along said Southeastern line of Pope Street North 51º 30’ East 25.00 feet to the most Northern corner of said Tract Two, being the most Western corner of said Tract One, Parcel One; thence along said Southeastern line of Pope Street North 51º 30’ East 60 feet to the Point of Beginning of this description.

Agenda Item #12.1.

83578.00012\42274830.1

ACKNOWLEDGMENT
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

STATE OF CALIFORNIA )

COUNTY OF )
On _________________, 2023 before me, , Notary Public,
personally appeared , who proved to me on the
basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

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

WITNESS my hand and official seal.

Signature: (seal)
Agenda Item #12.1.

83578.00012\42274830.1

ACKNOWLEDGMENT
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

STATE OF CALIFORNIA )

COUNTY OF )
On _________________, 2023 before me, , Notary Public,
personally appeared , who proved to me on the
basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

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

WITNESS my hand and official seal.

Signature: (seal)
Agenda Item #12.1.

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ATTACHMENT NO. 5

REHABILITATION WORK
[TO BE ADDED]
Agenda Item #12.1.

83578.00012\42274830.1
ATTACHMENT NO. 6

GROUND LEASE
[TO BE ADDED]
Agenda Item #12.1.

83578.00012\42274935.1
CITY DRAFT 5/7/24
1 GROUND LEASE
(Hunt’s Grove Affordable Housing)
This Ground Lease (Hunt’s Grove Affordable Housing) (“Lease”) is made and entered into as of ___________, 2024 (the “Effective Date”) by and between the CITY OF ST.

HELENA, a municipal corporation of the State of California (“Landlord” or “City”), and Hunt Pradera II, L.P., a California limited partnership (“Tenant”).

RECITALS
A. WHEREAS, the City and BRIDGE Housing Corporation, a California nonprofit public benefit corporation (“BRIDGE”) and Napa Valley Housing Corporation, a California nonprofit public benefit corporation (“NHVC”) are parties to that Option to Ground Lease Agreement, dated on or about August 22, 2023 (“Option Agreement”), regarding an option to lease certain real property described therein and located at 548 Hunt Avenue in the City of St.

Helena, California (the “Property”).

B. WHEREAS, the land comprising the Property (the “Land Parcel”) is owned in fee by the Landlord, and leased to BRIDGE pursuant to a Second Amended and Restated Land Lease, dated as of May 15, 1991 (the “Existing Ground Lease”).

C. WHEREAS, the Property is developed with fifty five (55) units of affordable rental housing restricted for occupancy to low- and moderate-income households, plus one (1) unrestricted manager’s unit, and related amenities and improvements, which are leased to eligible household pursuant to an Affordable Housing Covenant (the “Project”).

D. WHEREAS, the Project is owned by Hunt Avenue Associates, a California Limited Partnership (“Existing Owner”), which operates low-income affordable housing project under an existing sublease from BRIDGE, dated on or about __________ (“Existing Sublease”).

E. WHEREAS, Landlord and Tenant desire to enter into this Lease in accordance with the Option Agreement to permit Existing Owner, BRIDGE, and Tenant to obtain financing that will be used to rehabilitate the Property and the Project.

F. WHEREAS, Landlord and Tenant enter into this Lease to preserve affordable rental housing within the City of Helena for the term of the Lease.

NOW THEREFORE, FOR GOOD AND VALUABLE CONSIDERATION, including the representations and covenants contained in this Agreement, Landlord and Tenant agree as follows:

ARTICLE 1.

PROPERTY AND BACKGROUND

1.1 Purpose. The purpose of this Lease is to provide for the lease of that certain Property (defined in Section 1.3) upon which Tenant will own and operate fifty five (55) rental units affordable to low-income households, plus one (1) unrestricted manager’s unit, and related amenities (collectively, the “Improvements”).

Agenda Item #12.1.

83578.00012\42274935.1
2 1.2 Tenant. Tenant is Hunt Pradera II, L.P., a California limited partnership. Tenant will operate the Project in accordance with this Lease, subject to the assignment and subletting provisions set forth in Article 15 herein.

1.3 Property. Landlord owns the fee interest in the real property located at and commonly known as 548 Hunt Avenue in St. Helena, California (the “Property”), which is more particularly described in the legal description attached hereto as Exhibit A and incorporated herein by this reference.

1.4 Improvements. The Project includes fifty six (56) residential apartments, which were originally developed by Existing Owner, pursuant to the Existing Ground Lease and Existing Sublease. Existing Owner has conveyed, or will convey, ownership of the Improvements to Tenant pursuant to the Agreement For Amendment, Assignment, and Assumption of Affordable Housing Loan (“Loan Amendment”).

1.5 Termination of Existing Leases. Upon the Effective Date of this Lease, the Existing Ground Lease and Existing Sublease shall terminate. Notwithstanding anything to the contrary herein, the termination of the Existing Ground Lease and Existing Sublease shall not operate to terminate the existing leases or otherwise change or modify the rights of occupancy for current residents of the Property.

1.6 Lease of the Property. For and in consideration of the payment of rentals and the performance of all the covenants and conditions of this Lease, including the affordability covenants set forth herein, Landlord hereby leases and demises to Tenant, and Tenant hereby leases and hires from Landlord, the Property, for the term and upon the covenants and conditions set forth herein. The Tenant acknowledges and understands that the Property will be leased to the Tenant solely for purposes of development and operation of the Project pursuant to this Lease. Upon termination of the Existing Ground Lease and commencement of this Lease, Tenant shall be solely responsible for management of the Property, the Improvements, and all existing leases for residents of the Property.

1.7 Financing. Tenant has secured or will secure financing from Umpqua Bank, an Oregon corporation (“Initial Senior Leasehold Mortgagee”), a loan from the City of St. Helena pursuant to that Agreement for Amendment, Assignment, and Assumption of Affordable Housing Loan, of even date herewith, and the Approved Project Financing as defined therein, and the Carryback Loan set forth in Section 4.2 (the “Approved Initial Financing”) for the purpose of the acquisition, rehabilitation and operation of the Property and the Project. Tenant shall have the right to encumber the leasehold estate created by this Lease by a mortgage, deed of trust or other security instrument, including, without limitation, an assignment of the rents, issues and profits from the Project (the “Approved Leasehold Mortgage”) to secure repayment of the following (collectively the “Approved Financing”): (i) Approved Initial Financing, (ii) any refinancings of the Approved Initial Financing or any subsequent Approved Financing, and (iii) in connection with a first transfer from an Approved Leasehold Mortgagee (or its nominee) to a third-party following any foreclosure or deed in lieu of foreclosure by such Approved Leasehold Mortgagee (or it nominee). Notwithstanding anything to the contrary herein, the beneficiary under the Leasehold Mortgage (the “Approved Leasehold Mortgagee”) shall be entitled to the Agenda Item #12.1.

83578.00012\42274935.1
3 lender protections set forth in Exhibit E with respect to the Approved Financing. Exhibit E is incorporated into this Lease as if set forth at full length herein.

ARTICLE 2.

TERM

2.1 Term. Unless terminated earlier in accordance with the provisions of this Lease, the initial term of this Lease shall be for a period of ninety nine (99) years (the “Term”). The term shall expire at 11:59 p.m. on the date which is the ninety ninth (99th) anniversary of the Effective Date.

ARTICLE 3.

CONVEYANCE OF LEASEHOLD TITLE TO THE PROPERTY

3.1 Conveyance of Leasehold Title to the Property.

A. Memorandum of Lease. The Landlord and the Tenant agree to execute and acknowledge for recording, a memorandum in form of Exhibit D, attached hereto, with the Tenant being responsible for the payment of the documentary transfer tax, if any, that may be due in connection with the recording thereof.

B. Condition of Title. At the time that the Landlord delivers possession of the Property to the Tenant, title shall be free and clear of all recorded liens, encumbrances, assessments, leases and taxes except easements of record and encumbrances that are consistent with this Lease as determined by Landlord, and the Approved Financing, as defined herein.

Tenant agrees and understands that the commencement of this Lease is subject to termination of all rights of the Existing Ground Lease and Existing Sublease.

C. Delivery of Possession. Existing Owner is in current possession of the Property. Tenant agrees to take possession of the Property upon termination of the Existing Ground Lease directly from Existing Owner, in the Property’s current, as-is condition, and subject to the leases or sub-leases of existing residents on the Property. Except for this New Ground Lease, Landlord shall not grant or authorize any other right of possession for the Property.

ARTICLE 4.

RENT

4.1 Base Rent. Commencing on the Commencement Date and during the Term of the Lease, Tenant shall pay annual rent of ONE DOLLAR ($1) (the “Base Rent”). Base Rent shall be payable in arrears on each anniversary of the Commencement Date. Tenant may prepay all or any portion of the Base Rent at any time.

4.2 Carryback Loan. Tenant agrees to make a one-time additional payment on the Commencement Date of Eight Hundred Thousand Dollars ($800,000), which amount Landlord shall loan to Tenant (the “Carryback Loan”) on the Commencement Date, which Carryback Loan shall be evidenced by a promissory note in favor of Landlord for the same amount, on the terms and conditions set forth therein in the form attached hereto as Exhibit B (the “Carryback Agenda Item #12.1.

83578.00012\42274935.1
4 Note”), and secured by the subordinate leasehold deed of trust on the terms and conditions set forth in the form attached hereto as Exhibit C (the “Carryback Deed of Trust”).

4.3 Additional Rent. In addition to and not by way of limitation of Landlord’s rights under specific provisions of this Lease, Landlord shall at all times have the right (at its sole election and without any obligation to do so) to advance on behalf of Tenant any amount payable under the terms hereof by Tenant, or to otherwise satisfy any of Tenant’s obligations hereunder, provided that (except in case of an emergency calling for immediate payment) Landlord shall first have given Tenant no less than ten (10) business days’ advance written notice of Landlord’s intent to advance such amounts on behalf of Tenant, and Tenant fails to perform the act/make the expenditure prior to the expiration of such ten (10) business day period. No advance by Landlord shall operate as a waiver of any of Landlord’s rights under this Lease and Tenant shall remain fully responsible for the performance of its obligations under this Lease. All amounts advanced by Landlord shall constitute Additional Rent under this Lease, shall be due and payable by Tenant to Landlord within five (5) business days of Tenant’s receipt of an invoice from Landlord therefor, together with supporting documentation, and shall bear interest at the rate specified in Section 4.5, below from the date of advance until paid in full.

4.4 Net Lease. This Lease is a net lease and Rent and other payments due and payable hereunder to or on behalf of Landlord shall be paid without notice or demand and, except as specifically provided for in this Lease, without offset, counterclaim, abatement, suspension, deferment, deduction or defense.

4.5 Late Payment of Rent. Any rent required under the terms of this Lease not paid when due shall bear interest at the lesser of eight percent (8%) per annum, simple interest or the maximum rate allowed by law, from the date due.

ARTICLE 5.

TAXES AND ASSESSMENTS

5.1 Personal Property Taxes. Tenant shall pay before delinquency all taxes, assessments, license fees and other charges (“taxes”) that are levied and assessed against Tenant’s personal property installed or located in or on the Property which become payable during the Term. On demand by Landlord, Tenant shall furnish Landlord with satisfactory evidence of these payments.

5.2 Real Property Taxes.

A. Revenue & Taxation Code Section 107.6. Possessory Interest Tax.

Tenant recognizes and understands that this Lease may create a possessory interest subject to property taxes and that, if a possessory interest is created, Tenant shall, in accordance with this Section 5.2, be responsible for payment of property taxes levied against such possessory interest B. Tenant shall pay all real property taxes, assessments and general and special taxes including, without limitation, possessory interest taxes (“real property taxes”), levied and assessed against the Property and all real property taxes and assessments levied against Tenant’s interests in the Property during the Term. In the event Landlord receives a tax bill for the Property, Landlord shall notify Tenant of the real property taxes, and immediately on Agenda Item #12.1.

83578.00012\42274935.1
5 receipt of the tax bill, shall furnish Tenant with a copy of the tax bill. Tenant shall, semiannually, pay the real property taxes not later than the taxing authority’s delinquency date.

If at any time during the Term of this Lease any authority having the power to tax, including, without limitation, any federal, state, county, city government or any political subdivision thereof (collectively, “taxing authority”), shall alter the methods and/or standards of taxation and assessment against the legal or equitable interests of Landlord in the Property or the Improvements located or constructed thereon, in whole or in part, so as to impose a monetary obligation on Landlord in lieu of or in addition to the taxes and assessments in existence as of the date of this Lease, such taxes or assessments based thereon, including, without limitation, (a) a tax, assessment, excise, surcharge, fee, levy, penalty, bond or similar imposition (collectively, “impositions”), on Landlord’s right to rental or other income from the Property or as against Landlord’s leasing of the Property, (b) any impositions in substitution or in lieu, partially or totally, of any impositions assessed upon real property prior to any such alteration, (c) any impositions allocable to or measured by the area of the Property or the rental payable hereunder, including, without limitation, any impositions levied by any taxing authority with respect to the receipt of such rental or with respect to the possession, leasing, operation, management, maintenance, alteration, repair, use or occupancy by Tenant or any subtenant of the Property or any portion thereof, (d) any impositions upon this lease transaction or any document to which Tenant is a party which creates or transfers any interest or estate in or to the Property (other than any transfer tax which may be due upon recordation of the Memorandum of Lease described in Section 3.1), or (e) any special, unforeseen or extraordinary impositions which, although not specifically described above, can fairly be characterized as a real property tax or a substitute for real property tax, shall be considered as “real property taxes” for the purposes of this Lease. “Real property taxes” shall exclude, however, all general income taxes, gift taxes, inheritance taxes and estate taxes owed by Landlord.

5.3 New Assessments. If any general or special assessment or other governmental charge is levied on any business conducted on the Property, Tenant shall pay any such charge and shall have the right to vote or instruct the Landlord to vote in any election held in connection with the approval of such a charge. If any general or special assessment or other governmental charge is levied on the Property, Landlord shall have the right to vote in any election held in connection with the approval of such charge. Landlord may elect to pay the assessment in full or allow it to go to bond. If Landlord pays the assessment in full, Tenant shall pay to Landlord each time a payment of real property taxes is made a sum equal to that which would have been payable (as both principal and interest) had Landlord allowed the assessment to go to bond.

5.4 Tenant’s Tax Liability Prorated. Tenant shall pay all real property taxes and new assessments, if any, regardless of whether the Lease commences on a date that results in a fractional portion of a fiscal tax year included in the lease term. At the expiration or earlier termination of the Term, Tenant’s tax liability shall be prorated on the basis of a three hundred sixty-five (365) day year to account for any fractional portion of a fiscal tax year in accordance with this Lease.

5.5 Tax Contest. Without Landlord’s prior written consent, Tenant shall not seek a reduction in the assessed valuation of the Property or contest any real property taxes that are to be paid by Tenant. Landlord’s consent shall not be unreasonably withheld or delayed. If Landlord consents and Tenant seeks a reduction or contests the real property taxes, the failure on Agenda Item #12.1.

83578.00012\42274935.1
6 Tenant’s part to pay the real property taxes shall not constitute default as long as Tenant complies with the provisions of this Section 5.5. Nothing in this Section prevents or prohibits Tenant from applying for a welfare tax exemption in a manner authorized by law.

Landlord shall not be required to join in any proceeding or contest brought by Tenant except to the extent that Landlord is required to join in such proceeding in which case it shall be at no cost to Landlord and Landlord shall be provided with an indemnity from Tenant in connection with the same approved by Landlord in its reasonable discretion. Tenant, on final determination of the proceeding or contest, shall immediately pay or discharge any decision or judgment rendered, together with all costs, charges, interest and penalties incidental to the decision or judgment. If Tenant does not pay the real property taxes when due and Tenant seeks a reduction or contests them as provided in this Section 5.5, before the commencement of the proceeding or contest Tenant shall furnish to Landlord a surety bond issued by an insurance company qualified to do business in California. The amount of the bond shall equal one hundred ten percent (110%) of the total amount of real property taxes in dispute. The bond shall hold Landlord and the premises harmless from any damage arising out of the proceeding or contest and shall insure the payment of any judgment that may be rendered.

ARTICLE 6.

USE, CHARACTER, OPERATION AND MAINTENANCE OF

IMPROVEMENTS

6.1 General. Tenant may use the Property and the Project only for the uses specified in Section 1.1 (“primary uses”) and uses ancillary to such primary uses as herein specified.

Tenant shall use the Property and the Improvements thereon for no other purpose without the prior written consent of Landlord which Landlord may grant or withhold in its sole discretion.

6.2 Nondiscrimination. There shall be no discrimination against or segregation of any person or group of persons on account of race, color, religion, sex, gender, gender identity, gender expression, sexual orientation, marital status, national origin, ancestry, familial or marital status, disability, veteran or military status, genetic information, political affiliation or opinion, medical condition, pregnancy or pregnancy-related condition, or condition of physical or mental disability or other handicap, age, or source of income or status with regard to public assistance in the sublease, transfer, use, occupancy, tenure or enjoyment of the Property or the Improvements thereon, or any part thereof, and the Tenant itself, or any person claiming under or through it, shall not establish or permit any such practice of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the Property or the Improvements thereon, or any part thereof.

6.3 Housing Affordability. Tenant shall lease the rental units to eligible Low Income Households and Moderate Income Households, and otherwise operate the Project, pursuant to the requirements of the Affordable Housing Covenant executed in connection with the Loan Amendment (the “Affordable Housing Covenant”). From the Effective Date of this Lease and thereafter, for the remaining Term of this Lease, Tenant, for itself and any successors in interest, hereby covenants and agrees that fifty five (55) dwelling units within the Project shall be rented to Low Income Households or Moderate Income Households at a rent that does not exceed the Affordable Rent, as adjusted for household size appropriate to the applicable unit. Capitalized Agenda Item #12.1.

83578.00012\42274935.1
7 terms used in this Section 6.3 but not otherwise defined in the Lease shall have the meanings set forth in the Affordable Housing Covenant.

6.4 Use Prohibitions. Tenant agrees that in connection with the use and operation of the Property it will not:

A. Permit undue accumulations of garbage, trash, rubbish or any other refuse; or
B. Create, cause, maintain or permit any nuisance (as the same may be defined by applicable law) in, on or about the Property; or C. Commit or suffer to be committed any waste in, on or about the Property; or
D. Use or allow the Property to be used for any unlawful purpose, or for any purpose which violates the terms of any recorded instrument affecting the Property; or E. Do or permit to be done anything which in any way unreasonably disturbs the occupants of neighboring property; or
F. Cause or permit any insurance coverage on the Property or the Improvements to become void or voidable or make it impossible to obtain any required insurance at commercially feasible rates; or
G. Intentionally cause or knowingly permit any material structural damage to the Property or the Improvements or to any adjacent public or private property; or H. Violate any law, ordinance or regulation applicable to the Property and the Improvements thereon.

6.5 General Standards of Maintenance. Tenant shall be fully responsible for the operation and maintenance of the Property and the Improvements, and shall operate and maintain, or cause to be operated and maintained, such Improvements and open space and common areas in good order, condition and repair consistent with the purpose set forth in Section

1.1, subject only to normal wear and tear customary in accordance with applicable codes and ordinances and the practices prevailing in the operation of similar facilities in Napa County.

Without limiting the generality of the foregoing, Tenant shall, in accordance with the practices prevailing in the operation of similar developments, observe the following standards:

A. Maintain the surface of all pedestrian areas level, smooth and evenly covered with the type of surfacing material originally installed thereon or such substitute therefor as shall be in all respects equal thereto or better in quality, appearance and durability; B. Remove all papers, debris, filth and refuse, and sweep, wash down and/or clean all hard surfaces, including brick, metal, concrete, glass, wood and other permanent poles, walls or structural members as required;
Agenda Item #12.1.

83578.00012\42274935.1
8 C. Maintain such appropriate entrance, exit and directional signs, markers and lights as shall be reasonably required;
D. Clean lighting fixtures and relamp and/or reballast as needed; E. Repaint striping, markers, directional signs, etc., as necessary to maintain in first class condition;
F. Maintain landscaping as necessary to maintain in good condition; G. Maintain signs, including relamping and/or reballasting and/or repairing as required;
H. Maintain and keep in good condition and repair all benches, shelters, planters, mall coverings, banners, furniture, trash containers, sculptures and other exterior elements;
I. Clean, repair and maintain all common utility systems to the extent that the same are not cleaned, repaired and maintained by public utilities; J. Provide adequate security lighting in all areas during periods of unrestricted public access, and maintain all security and decorative light fixtures and associated wiring systems;
K. Maintain all surface and storm lateral drainage systems; and L. Maintain all sanitary sewer lateral connections.

M. Promptly remove any graffiti on or about the Property.

6.6 Governmental Requirements. Except with respect to Landlord’s obligations under Article 6 of this Lease, Tenant shall at all times comply with, and shall pay all costs and expenses which may be incurred or required to be paid in order to comply with, any and all laws, statutes, ordinances, rules and regulations (“laws”) which apply to the operation and use of the Property, including those requiring alterations or additions to be made to, or safety appliances and devices to be maintained or installed in, on or about the Property under any laws now or hereafter adopted, enacted or made and applicable to the Property, and payment of any fees, charges or assessments arising out of or in any way related to the Property as a source of adverse environmental impacts or effects.

ARTICLE 7.

CONDITION OF PROPERTY

7.1 Condition of Property; Remediation and Indemnity.

A. Tenant acknowledges and agrees that it shall take possession of the Property and Improvements from the Existing Owner. Tenant is owned or controlled by Existing Owner and therefore Tenant is fully aware of and knowledgeable about the condition of the Agenda Item #12.1.

83578.00012\42274935.1
9 Property, the Improvements, and existing residents of the Property. Tenant agrees and acknowledges that it takes possession of the Property and the Improvements pursuant to this Lease “as is,” in their current physical condition, with no warranties, express or implied, as to the physical condition thereof, the presence or absence of any latent or patent condition thereon or therein, including, without limitation, any Hazardous Materials, as defined below, thereon or therein, and any other matters affecting the Property.

B. Tenant shall defend, indemnify, protect and hold harmless the Landlord and its officers, beneficiaries, employees, agents, attorneys, representatives, legal successors and assigns (“Indemnities”) from, regarding and against any and all liabilities, obligations, orders, decrees, judgments, liens, demands, actions, Environmental Response Actions (as defined herein), claims, losses, damages, fines, penalties, expenses, Environmental Response Costs (as defined herein) or costs of any kind or nature whatsoever, together with fees (including, without limitation, reasonable attorneys’ fees and experts’ and consultants’ fees), (“Damages”) whenever arising, and resulting from or in connection with the actual or claimed generation, storage, handling, transportation, use, presence, placement, migration and/or release of Hazardous Materials (as defined herein), at, on, in, beneath or from the Property (sometimes herein collectively referred to as “Contamination”), except if such Damages result from the gross negligence, willful misconduct, fraud, misrepresentation or failure to disclose by the Indemnities.

The Developer’s defense, indemnification, protection and hold harmless obligations herein shall include, without limitation, the duty to respond to any governmental inquiry, investigation, claim or demand regarding the Contamination, at the Developer’s sole cost.

C. As used in this Lease, the term “Hazardous Materials” means any substance, material or waste that is (1) defined as a “hazardous waste,” “hazardous material,” “hazardous substance,” “extremely hazardous waste,” or “restricted hazardous waste” under any provision of California law; (2) petroleum; (3) asbestos; (4) poly-chlorinated biphenyls; (5) radioactive materials; (6) designated as a “hazardous substance” pursuant to Section 311 of the Clean Water Act, 33 U.S.C. Section 1251 et seq. (33 U.S.C. Section 1321) or listed pursuant to Section 307 of the Clean Water Act (33 U.S.C. Section 1317); (7) defined as a “hazardous substance” pursuant to the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq. (42 U.S.C. Section 6903) or its implementing regulations; (8) defined as a “hazardous substance” pursuant to Section 101 of the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. Section 9601 et seq. (42 U.S.C. Section 9601); or (9) determined by California, federal or local governmental authority to be capable of posing a risk of injury to health, safety or property..

7.2 Bona Fide Prospective Purchaser. Landlord and Tenant agree to cooperate and comply with all applicable laws and regulations that may permit either to assert defenses available under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended (“CERCLA”) or qualify as a bona fide prospective purchaser, including but not limited to the following:

A. Providing all legally required notices with respect to the discovery or release of any hazardous substance at the Property.

Agenda Item #12.1.

83578.00012\42274935.1
10 B. Exercising appropriate care with respect to hazardous substances found at the Property by taking reasonable steps to:

1. Stop any continuing release;

2. Prevent any threatened future release; and

3. Prevent or limit human, environmental, or natural resource exposure to any previously released hazardous substance.

C. Providing full cooperation, assistance and access to persons that are authorized to conduct response actions or natural resource restoration at the Property (including the cooperation and access necessary for the installation, integrity and maintenance of any complete or partial response action or natural resource restoration at the Property).

D. Maintaining compliance with any land use restrictions established or relied on in connection with a response action at the Property.

E. Not impeding the effectiveness or integrity of any institutional control employed at the Property or in connection with a response action.

F. Complying with any request for information or administrative subpoena issued by the President of the United States of America under CERCLA.

ARTICLE 8.

CONSTRUCTION AND LIENS

8.1 Scope of Development. The Property shall be rehabilitated, consistent with plans and specifications that have been reviewed and approved by the Landlord in connection with the Loan Amendment. Notwithstanding anything to the contrary in this Lease, the Rehabilitation Work, as defined below, shall be performed and completed in accordance with all approvals by and regulatory requirements from the City.

8.2 Rehabilitation Work. Tenant shall complete all construction and rehabilitation (“Rehabilitation Work”) in full conformity with the plans, drawings and related documents provided to and approved by the Landlord at Tenant’s sole cost and expense.

8.3 Protection of Landlord. Nothing in this Lease shall be construed as constituting the consent of Landlord, expressed or implied, to the performance of any labor or the furnishing of any materials or any specific improvements, alterations of or repairs to the Property, the Improvements, or any part thereof by any contractor, subcontractor, laborer or materialman, nor as giving Tenant or any other person any right, power or authority to act as agent of or to contract for, or permit the rendering of, any services, or the furnishing of any materials, in such manner as would give rise to the filing of mechanics’ liens or other claims against the fee of the Property or the Improvements thereon. Landlord shall have the right at all reasonable times to post, and keep posted, on the Property any notices which Landlord may reasonably deem necessary for the protection of Landlord and of the Property and the Improvements thereon from mechanics’ liens or other claims. Tenant shall give Landlord ten (10) days’ prior written notice Agenda Item #12.1.

83578.00012\42274935.1
11 of the commencement of any work to be done on the Property to enable Landlord to post such notices. In addition, Tenant shall make, or cause to be made, prompt payment of all monies due and legally owing to all persons doing any work or furnishing any materials or supplies to Tenant or any of its contractors or subcontractors in connection with the Property and the Improvements thereon.

A. Tenant shall keep the Property and the Improvements thereon free and clear of all mechanics’ liens and other liens on account of work done for Tenant or persons claiming under it. Tenant agrees to and shall indemnify and save Landlord harmless against liability, loss, damages, costs, attorneys’ fees, and all other expenses on account of claims of lien of laborers or materialmen or others for work performed or materials or supplies furnished to Tenant or persons claiming under it.

B. In the event any lien is recorded and not expunged within sixty (60) days of recording, Tenant shall, upon demand, furnish the bond described in California Civil Code Section 8424, or successor statute, which results in the removal of such lien from the Property.

8.4 Notice. Should any claims of lien be filed against the Property or the Improvements thereon, or any action affecting the title to such property, be commenced, the party receiving notice of such lien or action shall forthwith give the other party written notice thereof.

ARTICLE 9.

OWNERSHIP OF IMPROVEMENTS AND PERSONAL PROPERTY

9.1 Ownership of Improvements During Term. During the Term of this Lease, the Improvements, including all buildings, structures, fixtures, additions and improvements located on the Property (other than personal property owned by Landlord or others) shall be owned in fee by Tenant; provided, however, that Tenant’s rights and powers with respect to such Improvements are subject to the terms and limitations of this Lease and Tenant’s interest in such Improvements shall terminate upon the expiration or sooner termination of this Lease but only following the expiration without exercise by Senior Leasehold Mortgagee of its new lease right under Section 2.7 of Exhibit E. Landlord and Tenant covenant for themselves and all persons claiming under or through them that the Improvements are real property. The parties hereto agree that Tenant shall bear all risk of loss with respect to the Improvements and that the benefits and burdens of ownership of the Improvements are vested in Tenant. It is the intention of the parties that the Tenant be treated as owner of the Improvements for federal income tax purposes and shall have all the rights incidental thereto.

9.2 Landlord’s Right on Default by Tenant. In the event of any default (if ongoing after any applicable notice and cure period) on the part of Tenant in performing the terms and provisions of this Lease entitling Landlord to possession of the Property, Landlord shall have the immediate right of possession of all personal property permanently affixed to the Property and the right to assume any ownership or leasehold interest of Tenant in any financed or leased personal property, subject to the rights of third party lenders and equipment lessors.

9.3 Removal and Ownership at Termination; Improvements and Personal Property.

Agenda Item #12.1.

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12 A. Improvements. At the expiration or sooner termination of this lease Term but only following the expiration without exercise by Senior Leasehold Mortgagee of its new lease right under Section 2.7 of Exhibit E, the fee title to all improvements, including the Project, shall vest in Landlord without further action of any party, without any obligation by Landlord to pay any compensation therefor to Tenant and without the necessity of a deed from Tenant to Landlord, except as requested by Landlord pursuant to Section 16.2 of this Lease.

B. Personal Property. At the expiration or sooner termination of this lease Term but only following the expiration without exercise by Senior Leasehold Mortgagee of its new lease right under Section 2.7 of Exhibit E, Landlord may, at Landlord’s election, require the removal from the Property, at Tenant’s sole cost and expense, of all personal property (other than fixtures), as specified in the notice provided for below. A request to take effect at the normal expiration of the Term shall be effected by notice given at least one hundred twenty (120) days before the expiration date. A demand to take effect on any other termination of this lease Term shall be effectuated by notice given concurrently with notice of such termination or within ten (10) days after such termination. Tenant shall be liable to Landlord for costs incurred by Landlord in effecting the removal of personal property, which Tenant has failed to remove after demand pursuant to this section.

1. Tenant may remove any personal property during the Term of this Lease, and within forty-five (45) days after the expiration of the Term of this Lease, that may be removed without damage to the structural integrity of the Property and the Improvements thereon. Tenant shall repair all damage caused by any such removal.

2. Any personal property owned by Tenant and not removed by Tenant within forty-five (45) days following expiration of the Term shall be deemed to be abandoned by Tenant and shall, without compensation to Tenant, then become the Landlord’s property, free and clear of all claims to or against them by Tenant or any other person, but subject to the rights of third party lenders and equipment lessors as to which Landlord has notice.

ARTICLE 10.

UTILITIES

10.1 Tenant shall pay when due and shall hold Landlord harmless from any liability for all charges for water, gas, sewage, electricity, telephone waste removal and other utility service supplied to the Property.

ARTICLE 11.

INSURANCE AND INDEMNITY

11.1 Indemnity. Tenant agrees to protect and does hereby agree to indemnify, defend and hold Landlord, its officials, employees, contractors, invitees, and agents harmless from all demands, liability, claims, actions and damages to any person or property, costs and expenses (including, but not limited to, reasonable attorneys’ fees) arising out of or connected with: (i) a default by Tenant of its obligations under this Lease, (ii) the use or occupancy of the Property by Tenant, its agents, employees, invitees or contractors, other than those attributable to the Agenda Item #12.1.

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13 negligence or willful misconduct of Landlord, its officials, employees, contractors, invitees, or agents, (iii) any workers compensation claim or determination relating to any employee of Tenant or its contractors; (iv) any Prevailing Wage Action arising from or related to the Approved Financing; (v) any Environmental Claim attributable to any action or failure to act by Tenant, and (vi) any claim for relocation assistance or benefits from any residents at the Property. Tenant assumes the risk of delays and damages that may result to Tenant from any third party legal actions related to Landlord’s approval of this Ground Lease or any associated approvals, even in the event that an error, omission or abuse of discretion by Landlord is determined to have occurred.

A. For purposes of this Ground Lease, a “Prevailing Wage Action” means any of the following: (a) any determination by the California Department of Industrial Relations that prevailing wage rates should have been paid, but were not; (b) any determination by the California Department of Industrial Relations that higher prevailing wage rates than those paid should have been paid; (c) any administrative or legal action or proceeding arising from any failure to comply with the Federal Davis-Bacon Act (codified as 40 U.S.C. §§ 3141 et seq.) or California Labor Code Sections 1720 through 1781, as amended from time to time, regarding prevailing wages, including maintaining certified payroll records; or (d) any administrative or legal action or proceeding to recover wage amounts at law or in equity.

B. For purposes of this Ground Lease, an “Environmental Claim” means any of the following: (a) any claim referenced in Section 7.1(B), and (b) any and all claims, demands, damages, losses, liabilities, obligations, penalties, fines, actions, causes of action, judgments, suits, proceedings, costs, disbursements and expenses, including reasonable attorney’s fees and costs and costs of environmental consultants and other experts, and all foreseeable and unforeseeable damages or costs of any kind or of any nature whatsoever, directly or indirectly, relating to or arising from any actual or alleged violation of any Federal or California law regarding any of the following at, in, under, above, or upon the Property: (a) air, environmental, ground water, or soil conditions; or (b) clean-up, remediation, control, disposal, generation, storage, release, discharge, transportation, use of, or liability or standards of conduct concerning, Hazardous Materials, as now or may, at any later time, be in effect.

11.2 Insurance.

A. Tenant shall obtain or require all contractors it directly engages for rehabilitation of the Improvements to obtain and maintain insurance of the types and in the amounts described below in a form and with carriers satisfactory to Landlord during the term of this Lease.

1. Commercial General Liability Insurance. Occurrence version commercial general liability insurance or equivalent form with a limit of not less than three million dollars ($3,000,000.00) (or such lesser amount as may be approved in writing by Landlord). If such insurance contains a general aggregate limit, it shall apply separately to construction work authorized by this License or be no less than two times the occurrence limit and shall also name Landlord, its officials, officers, employees, agents, and volunteers as additional insureds by endorsement. The coverage shall contain no special limitations on the scope of its protection afforded to the above-listed additional insureds.

Agenda Item #12.1.

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14 2. Business Automobile Liability Insurance. Business automobile liability insurance or equivalent form with a limit of not less than one million dollars ($1,000,000.00) each accident shall be maintained. Such insurance shall include coverage for owned, hired, and non-owned automobiles and shall contain the same provisions regarding additional insureds as set forth in Section 14.A.i. above.

3. Workers’ Compensation Insurance. Workers’ compensation insurance with statutory limits and employer’s liability insurance with limits of not less than one million dollars ($1,000,000.00) each accident.

4. Property Insurance. All-risk property insurance covering the Improvements in the full value of the completed work.

B. Insurance During Rehabilitation Work. During the performance of the rehabilitation work approved under Section 8.1 of this Lease, Tenant, or its contractor, shall maintain Builder’s Risk Insurance to be written on an All Risk Completed Value form, in an aggregate amount equal to 100% of the completed insurable value of the Project or portion of the Project on which such contractor is performing work
C. Other insurance requirements. Tenant shall:

1. Prior to taking any actions authorized by this Lease, furnish Landlord with properly executed certificates of insurance and endorsements or copies of insurance policies that evidence all insurance required in this Section 11.2 and that such insurance may not be canceled, allowed to expire, or be materially reduced in coverage except with thirty (30) days’ prior written notice to Licensor.

2. Replace or require the replacement of certificates, policies, and endorsements for any insurance required herein expiring prior to substantial completion of the Improvements.

3. Maintain all insurance required herein through termination of this Lease.

4. Place all insurance required herein with insurers licensed to do business in California and reasonably acceptable to Landlord.

ARTICLE 12.

DAMAGE OR DESTRUCTION

12.1 Restoration.

A. Insured Damage. No loss or damage by fire or any other cause resulting in either partial or total destruction of the Improvements now or hereafter located on the Property, or any fixtures, equipment or machinery used or intended to be used in connection with the Property or the Improvements thereon, shall (except as otherwise provided in Sections

12.1.B, below) operate to terminate this Lease or to relieve or discharge Tenant from the payment of any rent, or other amounts payable hereunder, as and when they become due and Agenda Item #12.1.

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15 payable, or from the performance and observance of any of the agreements, covenants and conditions herein contained to be performed and observed by Tenant. Tenant covenants to repair or cause to be repaired and/or reconstruct or cause to be reconstructed any Improvements so damaged or destroyed to the extent, condition and value of such Improvements immediately prior (or if Tenant was in default of its maintenance and repair obligations at the time of such damage or destruction, to the condition and value which would have existed if Tenant had not been in default) to such damage or destruction, assuming full compliance with this Lease.

Subject to the rights of Approved Leasehold Mortgagee (as defined in Section 1.7), Tenant also covenants that all insurance proceeds will be applied to the repair and/or reconstruction of such Improvements. Tenant’s failure to make such full repair and restoration under any conditions in which it was elected or required so to do shall constitute default hereunder.

B. Uninsured Damage. Notwithstanding the provisions of Section 12.1.A, if, during the term, (i) the Improvements are totally or partially destroyed from a risk not covered one hundred percent (100%) by the sum of the applicable deductible and the insurance required to be carried by Tenant under this Lease, rendering the premises totally or partially inaccessible or unusable, and (ii) the cost of restoration exceeds ten percent (10%) of the then replacement value of the Improvements, Tenant can elect to terminate this Lease, with the consent of each Approved Leasehold Mortgagee and the Investor Limited Partner, by giving notice to Landlord within thirty (30) days after determining the restoration cost and replacement value. If Tenant elects to terminate this Lease and each Leasehold Mortgagee and Investor Limited Partner have consented to the same, Landlord, within ninety (90) days after receiving Tenant’s notice to terminate, can elect to pay to Tenant, at the time Landlord notifies Tenant of its election, the difference between one hundred percent (100%) of the replacement value of the Improvements and the actual cost of restoration, in which case Tenant shall restore the Improvements. On Landlord’s making its election to contribute, Landlord shall deposit immediately the amount of its contribution with the insurance trustee provided for in the following provisions. If Tenant elects to terminate this Lease and each Approved Leasehold Mortgagee and Investor Limited Partner have consented to the same, and Landlord does not elect to contribute toward the cost of restoration as provided in this paragraph, this Lease shall terminate as of the ninety-first (91st) day following Tenant’s notice.

C. Establishment of Insurance Trust and Disbursement Procedures.

Assuming that Landlord has made the foregoing election to contribute, and there is available to Tenant insurance proceeds for a portion of the cost of the restoration, Tenant shall make the loss adjustment with the insurance company insuring the loss and on receipt of the proceeds, subject to the rights of all Approved Leasehold Mortgagees, shall immediately pay them to a builder’s control company, title company, or bank selected by the mutual agreement of the parties (the “insurance trustee”). Landlord shall also immediately deposit with the insurance trustee its required contribution toward the cost of restoration. All sums deposited with the insurance trustee shall be held for the following purposes and the insurance trustee shall have the following powers and duties:

1. The sums shall be paid in installments by the insurance trustee to the contractor retained by Tenant as construction progresses, for payment of the cost of restoration. Any final retention provided for in the contract with such contractor will be paid to the contractor on completion of restoration, payment of all costs, expiration of all applicable lien Agenda Item #12.1.

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16 periods, and proof that the Improvements and the Property are free of all mechanics’ liens and lienable claims.

2. Payments shall be made on presentation of certificates or vouchers from the architect or engineer retained by Tenant showing the amount due. If the insurance trustee, in its reasonable discretion, determines that the certificates or vouchers are being improperly approved by the architect or engineer retained by Tenant, the insurance trustee shall have the right to appoint an architect or an engineer to supervise construction and to make payments on certificates or vouchers approved by the architect or engineer retained by the insurance trustee. The reasonable expenses and charges of the architect or engineer retained by the insurance trustee shall be paid by the insurance trustee out of the trust fund.

3. If the sums held by the insurance trustee are not sufficient to pay the actual cost of restoration Landlord and Tenant shall each deposit one-half (1/2) the amount of the deficiency with the insurance trustee within ten (10) business days after request by the insurance trustee indicating the amount of the deficiency.

4. Any undisbursed funds after compliance with the provisions of this paragraph shall be delivered to Landlord to the extent of Landlord’s contribution to the fund, and the balance, if any, shall be paid to Tenant.

5. All actual costs and charges of the insurance trustee shall be paid by Tenant.

6. If the insurance trustee resigns or for any reason is unwilling to act or continue to act, the parties shall substitute a new trustee in the place of the designated insurance trustee.

7. Both parties shall promptly execute all documents and perform all acts reasonably required by the insurance trustee to perform its obligations under this paragraph.

12.2 Waiver. The provisions of this Article 12 shall govern the rights of the parties in the event of any full or partial destruction of the Property. Tenant hereby waives the provisions of Civil Code Section 1932(2) and Civil Code Section 1933(4) and any similar successor statute or law with respect to any destruction of the Property or the Improvements thereon.

12.3 Procedures for Repair and Restoration. In the event of any damage or destruction, Tenant shall promptly give Landlord written notice of such damage or destruction and the date on which such damage or destruction occurred. Tenant shall promptly make proof of loss and shall proceed promptly to collect, or cause to be collected, all valid claims which Tenant may have against insurers or others based upon any such damage or destruction. Except as otherwise provided below, amounts received on account of any losses pursuant to insurance policies shall, subject to the rights of all Approved Leasehold Mortgagees, be used and expended for the purpose of fully repairing or reconstructing the portions of the Improvements on the Property which have been destroyed or damaged. Tenant shall commence and complete or cause to be corrected and completed, in a good and workmanlike manner and in accordance with this Lease, the reconstruction or repair of any part of the Improvements on the Property damaged or Agenda Item #12.1.

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17 destroyed, after Landlord has approved Tenant’s plans, drawings, specifications and construction schedule for such reconstruction or repair.

ARTICLE 13.

CONDEMNATION

13.1 Definitions.

A. “Condemnation” means (1) the exercise of any governmental power in eminent domain, whether by legal proceedings or otherwise, by a condemnor, and (2) a voluntary sale or transfer to any condemnor, either under threat of condemnation or while legal proceedings for condemnation are pending.

B. “Date of taking” means the date the condemnor has the right to possession of the property being condemned.

C. “Award” means all compensation, sums or anything of value awarded, paid or received on a total or partial condemnation.

D. “Condemnor” means any public or quasi-public authority, or private corporation or individual, having the power of condemnation.

13.2 Parties’ Rights and Obligations to be Governed by Lease. If during the Term there is any taking of all or any part of the Property, any Improvements on the Property or any interest in this Lease by condemnation, the rights and obligations of the parties shall be determined pursuant to the provisions of this Article 13.

13.3 Total Taking. If the Property is totally taken by condemnation, this Lease shall terminate on the date of taking.

13.4 Effect of Partial Taking. If any portion of the Property or the Improvements thereon is taken by condemnation, this Lease shall remain in effect, except that Tenant may elect to terminate this Lease, with the consent of each Approved Leasehold Mortgagee and Investor Limited partner, if the remaining portion of the Property is rendered unsuitable (as defined herein) for Tenant’s continued use. The remaining portion of the Property shall be deemed unsuitable for Tenant’s continued use if, following a reasonable amount of reconstruction, Tenant’s business on the Property could not be operated at an economically feasible level.

Tenant must exercise its right to terminate by giving Landlord written notice of its election within ninety (90) days after the nature and extent of the taking have been finally determined (and such notice shall include evidence of the consent of each Approved Leasehold Mortgagee and Investor Limited Partner). Such notice shall also specify the date of termination, which shall not be prior to the date of taking. Failure to properly exercise the election provided for in this Section will result in this Lease continuing in full force and effect.

13.5 Restoration of the Premises. If, in Tenant’s judgment it is reasonably possible and economically feasible to do so, Tenant shall be entitled to use so much of the award as is necessary to restore or to add on to the Property so that the area and approximate layout of the Property will be substantially the same after the date of taking as they were before the date of Agenda Item #12.1.

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18 taking. If it is not reasonably possible and economically feasible to so restore the area and layout of the Property, the remaining provisions of this Article 13 shall govern the rights of the parties.

If, after receipt of the award, Tenant fails to promptly commence any reasonably required repair, restoration or reconstruction of the Property and diligently prosecute such repair, restoration or reconstruction to completion, and such failure is not remedied within thirty (30) days of written notice from the Landlord to Tenant, this Lease may be terminated by the Landlord; provided, however, that in the event that the nature of the cure is such that more than thirty (30) days are reasonably required, Tenant shall have such additional period of time as is reasonably required provided that Tenant commences the required repair, restoration or reconstruction within such thirty (30) days and thereafter diligently and continuously prosecutes it to completion.

13.6 Waiver of CCP Section 1265.130. Each party waives the provisions of the Code of Civil Procedure Section 1265.130 allowing either party to petition the Superior Court to terminate this Lease in the event of a partial taking of the Property.

13.7 Award. Subject to the rights of Approved Leasehold Mortgagee, the award for the Property and for the Improvements (the “Condemnation Award”) shall be allocated as follows:

A. Landlord and Tenant shall be entitled to receive and retain such separate awards and portions of lump sum awards as may be allocated to their respective interests in any condemnation proceedings, or as may be otherwise agreed, taking into consideration the fact that Landlord’s interest in the Property is limited to the land (exclusive of the Improvements), as encumbered by this Lease, and, upon the expiration of the Term, a reversionary interest in the Leased Premises and the Improvements. If the Property shall be restored as is contemplated in Section 13.5 above, Tenant shall be entitled to recover the costs and expenses incurred in such restoration out of any award. Thereafter, if the condemning authority does not make separate awards, the Parties agree that any award will be allocated on a proportionate basis.

B. If the parties are unable to agree as to amounts that are to be allocated to the respective interests of each party, then each party shall select an independent M.A.I. real estate appraiser (an “Appraiser”). Each Appraiser shall separately determine the amount of the balance of the award that is to be allocated to the interests of each Party. If the percentage of the balance of the award each Appraiser allocates to Landlord (a) are within ten percent (10%) of each other, the two (2) allocations shall be averaged, and such average shall be the final allocation of the award, or (b) are not within ten percent (10%) of each other, the two (2) Appraisers shall then select a third Appraiser, who shall independently allocate the award between Landlord and Tenant, and the middle of such three allocations shall be the final allocation of the award. Notwithstanding the foregoing, if required by the Senior Leasehold Mortgagee, the Condemnation Award shall be distributed to the Senior Leasehold Mortgagee in accordance with the Senior Leasehold Mortgage if such Taking occurs while the Senior Leasehold Mortgage encumbers the Property. Tenant shall have the right to negotiate directly with the condemnor for the recovery of the portion of the award that Tenant is entitled to under this Section 13.7. Nothing in this Section 13.7 shall be deemed a waiver or surrender by Tenant or any subtenant of any right to receive relocation assistance under Government Code Section 7260, et seq., or compensation for moving of personal property under Code of Civil Procedure Section 1263.260.

Agenda Item #12.1.

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19 ARTICLE 14.

ASSIGNMENT AND SUBLETTING

14.1 General. Except as expressly provided herein, Tenant shall not have the right to assign its rights or obligations under this Lease unless such assignment has been approved in writing by Landlord. Landlord may grant or withhold such approval at its sole but reasonable discretion. Any permitted assignment shall specifically provide that Developer’s assignee agrees to be bound by the provisions of this Lease.

When Landlord’s consent is required, it shall not unreasonably be withheld, conditioned or delayed. It shall not be unreasonable for Landlord to condition its approval, among other things, upon the proposed assignee having a financial net worth, according to a current financial statement prepared by a certified public accountant, which is reasonably acceptable to Landlord, upon the proposed assignee having a reputation for and experience and qualifications in operating and maintaining similar properties reasonably comparable to that of the Tenant, and upon the proposed assignee having a first-class business reputation. In evaluating the acceptability of the net worth of a proposed assignee, Landlord may require that the assignee’s net worth be sufficient to carry out the performance of Tenant’s obligation under this Lease. Notwithstanding the foregoing, Landlord agrees that it will not withhold its consent to Tenant’s assignment of its interest in this Lease if Tenant demonstrates to the reasonable satisfaction of Landlord that such assignee has a net worth equal to or exceeding that of Tenant as of the Commencement Date, has a reputation for and experience and qualifications in operating and maintaining at least three (3) similar properties, and has a first class business reputation in the real estate industry. Landlord’s consent to any one assignment or sublease shall not constitute consent to any other assignment or sublease, and shall not constitute a waiver of the right to give or withhold consent in accordance with this Article 14.

14.2 Subleases.

A. Tenant may sublease all or any portion of the Property upon Landlord’s written consent, which shall not be unreasonably withheld, conditioned or delayed.

1. Subleases of Residential Units. Landlord hereby consents to all subleases of individual residential rental units constructed on the Property, provided the sublease is consistent with the requirements of Section 6.3 of this Lease and the Affordable Housing Covenant. Tenant shall provide Landlord with copies of all reports and certifications given to state or federal regulatory agencies concerning the rental and income qualifications of subtenants.

2. Other Subleases. For any sublease other than those described in Section 14.2.A.1. above, it shall not be unreasonable for Landlord to withhold its consent of any proposed sublease if the proposed sublessee intends to use the Property for a use other than those authorized by this Lease or that is prohibited under Article 6 of this Lease. At least thirty (30) days prior to the effective date of any sublease of the Property or of any amendment or assignment of an existing sublease, Tenant shall submit a copy of the sublease, amendment or assignment to the Landlord, together with a certification of Tenant that the sublease or Agenda Item #12.1.

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20 amendment does not grant to the proposed subtenant any option or other right to purchase the Tenant’s leasehold interest in the portion of the Property which is the subject of such sublease.

B. In the event that Tenant is unable to make the certifications set forth in subsection A of this Section 14.2, no such sublease, amendment or assignment shall be approved by Landlord. Landlord shall approve or disapprove each such proposed sublease within thirty (30) calendar days of receipt of a copy of the sublease and if not approved or disapproved within such time, the sublease, amendment or assignment shall be deemed approved, but only if the written transmittal of the sublease contains a prominent notice in bold face type that failure to approve or disapprove the sublease within thirty (30) calendar days will result in the sublease being deemed approved. Tenant agrees to promptly provide Landlord with any information reasonably requested by Landlord relating to the identity of any proposed subtenant, the nature of such subtenant’s business and the proposed subtenant’s financial responsibility.

C. Each sublease entered into on the Property shall comply with the applicable provisions of the Lease. No sublease shall have a term, which extends beyond the Term of this Lease.

14.3 Nondisturbance Agreement. If Landlord has consented to a sublease, then Landlord shall, at Tenant’s request, execute and deliver to any subtenant a recognition and nondisturbance agreement which shall assure such subtenant, so long as it is not in default under its sublease, the quiet possession of its subleasehold during the term thereof, notwithstanding Tenant’s default or any termination of this Lease, provided that, except to the extent expressly agreed upon by Landlord in writing in such nondisturbance agreement: (a) no sublease shall be for a term which exceeds the Term of this Lease; (b) no sublease shall provide for prepaid rent (excepting an advance payment of the first month’s rent and no more than an additional two month’s rent as a security deposit); (c) all rental terms shall be reasonable and at prevailing market rates for comparable properties; and (d) no greater burdens are placed upon the Landlord in the sublease than are undertaken by the Landlord under this Lease. To obtain the recognition and nondisturbance agreement, Tenant shall provide Landlord with a fully executed copy of any sublease along with a written request for such agreement.

ARTICLE 15.

TENANT DEFAULTS AND LANDLORD’S REMEDIES

15.1 Defaults by Tenant. Tenant shall be in default under the Lease if:

A. Tenant is at any time in default in the payment of rent or any other monetary sum called for by this Lease for more than ten (10) days following written notice from Landlord to Tenant; or
B. Tenant fails to commence the Rehabilitation Work for a period of ninety (90) days after written notice from the Landlord; or
C. Tenant abandons or substantially suspends construction of improvements on the Property for a period of ninety (90) days after written notice of such abandonment or suspension from Landlord, subject to force majeure as set forth in Section 16.4 hereof; or Agenda Item #12.1.

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21 D. Tenant transfers, or suffers any involuntary transfer of the Property or any part thereof in violation of this Agreement; or
E. Tenant assigns, sells, transfers, conveys, encumbers, hypothecates or leases the whole or any part of the Property or any improvement constructed thereon in violation of this Lease; or
F. Tenant fails to perform any other material term or provision of this Lease, including but not limited to compliance with the rent and income restrictions for the residential units in compliance with the Affordable Housing Covenant, within ninety (90) days after written notice thereof from the Landlord; or
G. There occurs, in violation of this Lease, any change in control of Tenant or of a part thereof, or any other act or transaction involving or resulting in a change in the identity of the parties in control of Tenant or the degree of such control.

City agrees to provide to Tenant’s limited partner a copy of any Notice of default delivered to Tenant hereunder and to accept any cure made or tendered by Tenant’s limited partner as if made or tendered by Tenant

15.2 Remedies. Subject to the rights of the Approved Leasehold Mortgagee as set forth in Exhibit E, upon the occurrence of any default, in addition to any and all other rights or remedies of Landlord hereunder, or by law or in equity provided, Landlord shall have the sole option to exercise the following rights and remedies:

A. Landlord may terminate this Lease by giving Tenant notice of termination.

On the giving of the notice, all Tenant’s rights in the Property and in all Improvements shall terminate. Promptly after notice of termination, Tenant shall surrender and vacate the Property and all Improvements in broom-clean condition; and, subject to the provisions in Section 15.2.B, below, respecting the right of certain subtenants to remain, Landlord may reenter and take possession of the Property and all Improvements and eject all parties in possession or eject some and not others, or eject none. Termination under this paragraph shall not relieve Tenant from the payment of any sum then due to Landlord or from any claim for damages previously accrued or then accruing against Tenant.

B. Without terminating this Lease, Landlord may at any time and from time to time relet the Property and Improvements thereon or any part or parts of them for the account and in the name of Tenant or otherwise. Landlord may at Landlord’s election eject all persons or eject some and not others, or eject none; provided, however, that Landlord shall not have the right to eject any subtenant who is not in default under a sublease whose lease has been duly submitted and approved (if required) in writing by Landlord pursuant to Section 15.3 of this Lease and is not then in default. Any reletting may be for the remainder of the Term or for a longer or shorter period. Landlord may execute any leases made under this provision either in Landlord’s name or in Tenant’s name, and shall be entitled to all rents from the use, operation, or occupancy of the Property or Improvements thereon, or both. Tenant hereby appoints Landlord its attorney-in-fact for purpose of such leasing. Tenant shall nevertheless pay to Landlord on the due dates specified in this Lease the equivalent of all sums required of Tenant under this Lease, Agenda Item #12.1.

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22 less the revenue received by Landlord from any reletting or attornment, plus Landlord’s expenses, including (by way of example), but not limited to, remodeling expenses, commissions and advertising costs. No act by or on behalf of Landlord under this provision shall constitute a termination of this Lease unless Landlord gives Tenant notice of termination.

C. Reletting by Landlord pursuant to Paragraph C, above, does not waive Landlord’s right to thereafter terminate this Lease and all of Tenant’s rights in or to the leased Property.

D. Notwithstanding the foregoing, during the fifteen (15) year tax credit compliance period for the Project, Landlord shall not be entitled to terminate the Ground Lease, except for an uncured default for failure to comply with the affordability covenants in Section 6 of this Ground Lease.

15.3 Landlord’s Right to Cure Tenant’s Default. Landlord, at any time after Tenant commits a default which Tenant has failed to cure within the time established therefor, may cure the default at Tenant’s cost. If Landlord at any time, by reason of Tenant’s default, pays any sum, the sum paid by Landlord shall be due immediately from Tenant to Landlord at the time the sum is paid, and if paid at a later date, shall bear interest at the rate provided in Section 4.5 from the date the sum is paid by Landlord until Landlord is reimbursed by Tenant. The sum, together with interest on it, shall be considered Additional Rent.

ARTICLE 16.

MISCELLANEOUS

16.1 Holding Over. If Tenant shall hold over the leased Property after the expiration of the Term hereof with the consent of Landlord, either express or implied, such holding over shall be construed to be only a tenancy from month to month, subject to all the covenants, conditions and obligations contained in this Lease. Tenant hereby agrees to pay during any such holdover period to Landlord as monthly rental an amount equal to the fair market value of the Tenant’s leasehold interest at the time of termination, which shall be determined pursuant to an appraisal by a qualified appraiser.

16.2 Attorneys’ Fees. In the event that any action or arbitration is brought by either party hereto as against the other party hereto for the enforcement or declaration of any right or remedies in or under this Lease or for the breach of any covenant or condition of this Lease, then and in that event the prevailing party shall be entitled to recover, and the other party agrees to pay all fees and costs to be fixed by the court or arbitrator therein including, but not limited to, attorneys’ fees.

16.3 Quiet Possession. Landlord agrees that Tenant, so long as Tenant is not in default under this Lease and is paying the rent and performing the covenants and conditions of this Lease, shall quietly have, hold and enjoy the leased Property throughout the Term hereof without interruption or disturbance from Landlord or any other persons claiming by, through or under Landlord; and Landlord warrants to Tenant that as of the Commencement Date of said lease term, there were no existing tenancies on the leased Property.

Agenda Item #12.1.

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23 16.4 Force Majeure. Except as to the payment of rent, in addition to the specific provisions of this Lease, neither of the parties hereto shall be chargeable with, liable for, or responsible to, the other for anything or in any amount for any delays due to war; act of terrorism; insurrection; strikes; lock-outs; riots; floods; earthquakes; fires; casualties; acts of God; acts of the public enemy; epidemics; pandemics; quarantine restrictions; freight embargoes; lack of transportation; governmental restrictions or priority; litigation; unusually severe weather; inability to secure necessary labor, materials or tools; delays of any contractor, subcontractor or supplier; acts of another party; acts or the failure to act of any public or governmental agency or entity (except that acts or the failure to act of the Landlord shall not excuse performance by the Landlord); or any other causes whether similar or dissimilar to the foregoing which is beyond the reasonable control or without the fault of the party claiming an extension of time to perform, and any delay due to said causes or any of them shall not be deemed a breach of or default in the performance of this Lease. An extension of time for any such cause shall only be for the period of the enforced delay, which period shall commence to run from the time of the commencement of the cause. If, however, notice by the party claiming such extension is sent to the other party more than thirty (30) days after the commencement of the cause, the period shall commence to run only thirty (30) days prior to the giving of such notice.

16.5 Notices. Any notice to be given or other document to be delivered by either party to the other hereunder shall be in writing and shall be deemed to have been duly given and received (i) upon personal delivery, (ii) as of the third business day after mailing by United States registered or certified mail, return receipt requested, postage prepaid, addressed as set forth below, (iii) the immediately succeeding business day after deposit with Federal Express or other equivalent overnight delivery system or (iv) upon electronic transmission to the principal offices of Landlord and Tenant, and addressed to the party for whom intended, as follows:

Agenda Item #12.1.

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24 Landlord: City of St. Helena
1088 College Avenue
St. Helena, CA 94574
Attention: City Manager
With a copy to: Best Best & Krieger LLP
500 Capitol Mall, Suite 1700
Sacramento, CA 95814
Attn: Ethan Walsh
Tenant:

And:

Hunt Pradera II, L.P., a California
limited partnership
c/o BRIDGE Housing Corporation
600 California Street, Suite 900
San Francisco, CA 94108
Attention: Smitha Seshadri
c/o Napa Valley Community
Housing
150 Camino Dorado
Napa, CA 94558
Attention: Erica R. Sklar
And a copy to: Gubb & Barshay LLP
235 Montgomery Street, Suite 1110
San Francisco, CA 94104
Attn: Evan Gross
And a copy to: MCC Housing LLC
c/o Merritt Community Capital
Corporation
1901 Harrison Street, Suite 1650
Oakland, California 94612
Attention: President & CEO
Lender: TO BE ADDED
Any party hereto may from time to time, by written notice to the other, designate a different address which shall be substituted for the one above specified.

16.6 Waiver. No waiver of any breach of any of the terms, covenants, agreements, restrictions or conditions of this Lease shall be construed to be a waiver of any succeeding breach of the same or other terms, covenants, agreements, restrictions and conditions hereof.

Agenda Item #12.1.

83578.00012\42274935.1
25 16.7 Surrender. Upon the expiration or sooner termination of the Term of this Lease, and notwithstanding anything herein contained to the contrary, Tenant shall surrender to Landlord all and singular the leased Property, together with the Improvements then situated thereon, in good condition and repair, except for reasonable wear and tear.

16.8 Binding. Subject to the restrictions set forth herein regarding assignment of the leasehold estate, each of the terms, covenants and conditions of this Lease shall extend to and be binding on and shall inure to the benefit of not only Landlord and Tenant, but to each of their respective heirs, administrators, executors, successors and assigns. Whenever in this Lease reference is made to either Landlord or Tenant, the reference shall be deemed to include, wherever applicable, the heirs, administrators, executors, successors and assigns of such parties, the same as if in every case expressed.

16.9 Landlord’s Right to Enter Property. Landlord and its authorized representatives shall have the right to enter the Property at all reasonable times, after giving Tenant three (3) business days’ prior written notice, for any of the following purposes: to determine whether the Property is in good condition and whether Tenant is complying with its obligations under this Lease; to do any necessary maintenance and to make any restoration to the Property that Landlord has the right or obligation to perform; to serve, post or keep posted any notices required or allowed under the provisions of this Lease; to do any necessary maintenance and to make any restoration to the Property that Landlord has the right or obligation to perform; to serve, post or keep posted any notices required or allowed under the provisions of this Lease; to post “for sale” signs at any time during the term, so long as such signs make it clear at first impression it is Landlord’s interest alone that is for sale; to post “for rent” or “for lease” signs during the last one (1) year of the term, or during any period while Tenant is in default; to show the Property to prospective brokers, agents, buyers, tenants or persons interested in an exchange, at any time during the term; and to do any act or thing necessary for the safety or preservation of the Property if any excavation or other construction is undertaken or is about to be undertaken on any adjacent property or nearby street.

A. Landlord shall not be liable in any manner for any inconvenience, disturbance, loss of business, nuisance, or other damage arising out of Landlord’s entry on the Property as provided in this section other than those caused by the negligence or willful misconduct of Landlord, its agents, employees or contractors.

B. Tenant shall not be entitled to an abatement or reduction of rent if Landlord exercises any rights reserved in this section.

16.10 Disclaimer of Partnership. The relationship of the parties hereto is that of Landlord and Tenant, and it is expressly understood and agreed that Landlord does not in any way nor for any purpose become a partner of Tenant or a joint venturer with Tenant in the conduct of Tenant’s business or otherwise.

16.11 Memorandum. A short form Memorandum of this Lease (“Memorandum”), in form attached as Exhibit D, shall be recorded within five (5) working days after the time this Lease is executed. The Parties agree to make any amendment or modification of the Memorandum in such form as shall be reasonably required (i) for Tenant to be able to obtain a Agenda Item #12.1.

83578.00012\42274935.1
26 leasehold title policy insuring Tenant’s leasehold interest in the Property, or (ii) by Approved Leasehold Mortgagee.

16.12 Quitclaim. At the expiration or earlier termination of this Lease, Tenant shall execute, acknowledge and deliver to Landlord within thirty (30) days after written demand from Landlord to Tenant, any quitclaim deed or other document required by any reputable title company to remove the cloud of this Lease from the real property subject to this Lease.

16.13 Interpretation. The titles to the paragraphs of this Lease are not a part of this Lease and shall have no effect upon the construction or interpretation of any part of this Lease.

16.14 Covenants and Conditions. Each term and each provision, including, without limitation, the obligation for the payment of rent, to be performed by Tenant or Landlord, as the case may be, shall be construed to be both a covenant and a condition of this Lease.

16.15 Integration. This Lease and the exhibits and documents of both incorporated by reference, constitutes the entire agreement between the parties and there are no conditions, representations or agreements regarding the matters covered by this Lease which are not expressed herein.

16.16 Estoppel Certificate. If upon any sale, assignment, proposed financing or hypothecation of the Property or the land thereunder by Landlord or Tenant an estoppel certificate shall be required from Tenant or Landlord (as applicable), Tenant and Landlord agrees to deliver to the other, within ten (10) business days after written request therefor by the other, a statement in recordable form addressed to any such proposed mortgagee or purchaser, or to Landlord, in a form requested by Landlord’s or Tenant’s mortgagee or purchaser, certifying that this Lease is unmodified and is in full force and effect (if such be the case), certifying the commencement and termination dates of the lease term, certifying that there has been no assignment or subletting of this Lease (or providing detail regarding any such assignment or subletting), and that there are no defenses or offsets hereto (or stating those claimed by Tenant or Landlord, as applicable) and containing such other information as may reasonably be requested by the party to whom such certificate is addressed. In the event Tenant or Landlord fails to deliver such estoppel certificate to the other within the ten (10) day period provided above, it shall be deemed that this Lease is in full force and effect and that such party has no defenses or offsets against the other.

16.17 Landlord’s Right to Sell. Landlord shall have the right to sell its fee estate in the Property and assign its interest in this Lease without limitation; provided, however, that any such sale shall be subject to this Lease. Upon any such conveyance, Landlord shall automatically be relieved of any obligations under this Lease other than those obligations, which accrued prior to the date of such conveyance.

16.18 Restriction on Landlord's Right to Encumber its Interest. Landlord shall not mortgage, hypothecate, pledge or encumber its interest in the Property or any part thereof without the prior written consent of the Approved Leasehold Mortgagees, unless there is an express subordination of the new lender's lien on Landlord's interest in the Property to this Lease (and all Approved Leasehold Mortgagees made in compliance with this Lease), which Agenda Item #12.1.

83578.00012\42274935.1
27 subordination shall be in a form acceptable to the Approved Leasehold Mortgagee, in its sole and absolute discretion. Provided that either (i) this Lease is in effect, (ii) Senior Leasehold Mortgagee’s right to a new lease under Section 2.7 has not expired following any termination, or (iii) a new lease with Senior Leasehold Mortgagee (or its nominee) is in effect per Section 2.7, Landlord further irrevocably and unconditionally agrees that any mortgage, deed of trust or other security instrument now or hereafter encumbering all or any part of the Landlord’s interest in the Property shall automatically be subject and subordinate in all respects to the lien of the Lease (and all amendments, modifications, extensions and renewals hereof) and all existing and future Approved Leasehold Mortgages (and all amendments, modifications, extensions and renewals thereof). Landlord shall, at the request of any Approved Leasehold Mortgagee, cause the holder of each such mortgage, deed of trust and other security instrument to execute and deliver to the requesting Approved Leasehold Mortgagee a written and recordable subordination agreement in form and substance as required by such Approved Leasehold Mortgagee in its sole and absolute discretion.

16.19 Amendments to This Lease. Landlord and Tenant agree to mutually consider reasonable requests for amendments to this Lease that may be made by either of them, subtenants of Tenant, lending institutions or bond counsel or financial consultants to Landlord or Tenant, provided such requests are consistent with this Lease and would not materially alter the basic business terms included herein. No amendment hereto shall be effective unless in writing and signed by the parties hereto.

16.20 Time is of the Essence. Time is of the essence in the performance of the terms and conditions of this Lease.
[Signatures continued on following page]
Agenda Item #12.1.

83578.00012\42274935.1
28 IN WITNESS WHEREOF, the parties hereto have caused this Lease to be executed by their lawfully authorized representatives.

LANDLORD:

CITY OF ST. HELENA, a municipal
corporation of the State of California
By:________________________________
Anil Comelo, City Manager
APPROVED AS TO FORM:
______________________________________________________________________________ Ethan Walsh, City Attorney
TENANT:

Hunt Pradera II, L.P.,
a California limited partnership
By: Hunt Pradera II, LLC,
a California limited liability company,
its General Partner
By: BRIDGE Housing Corporation,
a California nonprofit public benefit
corporation,
its Managing Member
By: __________________________
Smitha Seshadri
Executive Vice President
By: Napa Valley Community Housing,
a California nonprofit public benefit
corporation,
its Managing Member
By: ___________________________
Erica R. Sklar
President and Chief Executive
Officer
Agenda Item #12.1.

83578.00012\42274935.1
Exhibit A

EXHIBIT A
Property Legal Description
[TO BE ADDED]
Agenda Item #12.1.

Exhibit B
4839-3028-5526v.2 4900000-001457

EXHIBIT B

FORM OF NOTE

RESIDUAL RECEIPTS PROMISSORY NOTE
(Hunt’s Grove Lease)
Principal Sum Not to Exceed _________, 2024
$800,000.00 St. Helena, California

1. FUNDAMENTAL PROVISIONS.

The following terms will be used as defined terms in this Residual Receipts Promissory Note (as it may be amended, modified, extended and renewed from time to time, this “Note”).

Lender/Payee: City of St. Helena, a California municipal corporation.

Borrower/Maker: Hunt Pradera II, L.P., a California limited partnership Principal Amount: Eight Hundred Thousand Dollars ($800,000.00).

Interest Rate: 3% per annum simple interest.

Default Interest Rate: Eight percent (8%) per annum.

Maturity Date: _________, 2081, unless the Maturity Date is accelerated as otherwise provided in this Note.

Business Day: Any day of the year other than Saturdays, Sundays and legal holidays on which Lender’s main office at 1088 College Avenue St. Helena, California 94574, is closed.

Ground Lease: The Ground Lease entered into by Borrower and Lender, dated of even date herewith, regarding the affordable housing project located on the Property.

Leasehold Deed of Trust The deed of trust executed by Borrower in favor of City to secure this Note.

Loan Documents: This Note and all other documents securing the repayment of the Note, and instruments executed by the Borrower to consummate and secure the Note.

Agenda Item #12.1.

Exhibit B
4839-3028-5526v.2 4900000-001457
Loan: The loan from Lender to Borrower, with all principal and accrued interest, as evidenced by this Note, for purposes of paying rent under the Ground Lease.

Property: The real estate located at 548 Hunt Avenue in the City of St.

Helena, California, and all improvements thereon, and the real estate located at 38 Brannan Street in the City of Calistoga, and all improvements thereon.

Project: The affordable housing project operated on the Property, with fifty five rental units restricted for occupancy by low- and moderateincome households and with forty-seven rental units restricted for occupancy by low- and moderate-income households.

2. PROMISE TO PAY.

For value received, Borrower promises to pay to the order of Lender, at its office at 1088 College Avenue, St. Helena, California 94574, or at such other place as the Lender hereof may from time to time designate in writing, the Principal Amount together with interest thereon, and all other sums due under and secured by the Deed of Trust or by any other Loan Documents.

3. INTEREST; PAYMENTS.
(a) Absent a continuing Event of Default hereunder or under any of the Loan Documents, and subject to Lender’s rights and remedies for an Event of Default, the Loan made hereunder shall bear three percent (3%) simple interest annually. Interest shall be calculated on the basis of a year of 365 days, and charged for the actual number of days elapsed. (b) All payments of principal and interest due hereunder shall be made (i) without deduction of any present and future taxes, levies, imposts, deductions, charges or withholdings, which amounts shall be paid by Borrower, and (ii) without any other set off, claim or defense of any kind or nature. Borrower will pay the amounts necessary such that the gross amount of the principal and interest received by the holder hereof is not less than that required by this Note and/or the Loan Documents. Notwithstanding the foregoing, Borrower shall not be required to pay franchise taxes and taxes imposed on or measured by Lender’s net income or gross receipts or other taxes imposed in lieu of such taxes.
(c) If any payment of principal and interest to be made by Borrower hereunder shall become due on a day which is not a Business Day, such payment shall be made on the next succeeding Business Day.
(d) Annual Residual Receipts Payments. Commencing upon the Project placed-inservice date, by no later than [June 30] of each year, Borrower shall make a payment equal to City’s Pro Rata Share of fifty percent (50%) of all Surplus Cash generated by the Project during the previous calendar year to City to reduce the indebtedness owed under this Note (a “Residual Agenda Item #12.1.

Exhibit B
4839-3028-5526v.2 4900000-001457
Receipts Payment”). Each Residual Receipts Payment due pursuant to this Section shall be due and payable to the City by not later than [June 30] for the previous calendar year. (i) For purposes of this Note, “City’s Pro Rata Share” means the percentage calculated by dividing the original principal amount of this Note by the sum of the original principal amounts of (a) this Note, (b) the loans provided by the Department of Housing and Community Development (“HCD”) for the Project, and (c) the loan provided by the City of Calistoga to Borrower that is secured against the Property . The City’s Pro Rata Share will be [5.46%]. By not later than [May 1] of each year following City’s issuance of a final certificate of occupancy or equivalent for the Project, Borrower shall provide to City Borrower’s calculation of Surplus Cash for the previous calendar year, accompanied by such supporting documentation as City may reasonably request.
(ii) For purposes of this Note, “Surplus Cash” means for each calendar year during the term hereof, the amount by which Gross Revenue (defined below) exceeds Annual Operating Expenses (defined below) for the Project. Surplus Cash shall also include net cash proceeds realized from any sale or refinancing of the Project, less fees and closing costs reasonably incurred in connection with such sale or refinancing, and any City-approved uses of the net cash proceeds of the sale or refinancing
(iii) For purposes of this Note, “Annual Operating Expenses” means for each calendar year, the costs reasonably and actually incurred for operation and maintenance of the Property, which shall generally include: (i) Property taxes and assessments imposed on the Project; (ii) debt service due on a non-optional basis (excluding debt service due from residual receipts or surplus cash of the Project) on senior financing approved by the City (“Approved Senior Loans”); (iii) property management fees and reimbursements, on–site property management office expenses, and salaries of property management and maintenance personnel, not to exceed amounts that are standard in the industry and which are pursuant to a management contract approved by the City; (iv) fees for accounting, audit, and legal services incurred by Borrower's general partner in the asset management of the Property, not to exceed amounts that are standard in the industry, to the extent such fees are not included in the approved partnership/asset fees; (v) premiums for insurance required to satisfy the requirements of any lender of senior financing approved by the City or authorized by the Ground Lease; (vi) utility services not paid for directly by tenants, including water, sewer, and trash collection; (vii) maintenance and repair expenses and services; (viii) any annual license or certificate of occupancy fees required for operation of the Project; (ix) security services; (x) advertising and marketing; (xi) accrued obligations including amounts payable under the Ground Lease or senior financing approved by the City or authorized by the Ground Lease; (xii) cash deposited into an operating reserve account as authorized by the City (excluding amounts deposited to initially capitalize the account); (xiii) cash deposits into reserves for capital replacements in an amount no more than $500 per unit per year or such greater amount as reasonably required by the holder of an Approved Senior Loan or as required by a physical needs assessment prepared by a thirdAgenda Item #12.1.

Exhibit B
4839-3028-5526v.2 4900000-001457
party selected or approved by City (xiv) extraordinary operating costs specifically approved in writing by the City; (xv) payments of deductibles in connection with casualty insurance claims not normally paid from reserves, the amount of uninsured losses actually replaced, repaired or restored, and not normally paid from reserves,; (xvi) tenant services, (xvii) any previously unpaid portion of the developer fee; provided however, the aggregate amount of the developer fee may not exceed the developer fee allowable for the Project pursuant to California Tax Credit Allocation Committee regulations; (xviii) a partnership management fee payable to the general partner of Borrower and an asset management fee payable to the investor limited partner of Borrower; (xix) any tax credit adjuster payments owed to Borrower’s limited partner pursuant to the Partnership Agreement; and (xx) and other ordinary and reasonable operating expenses approved in writing by the City and not listed above. Annual Operating Expenses do not include the following: depreciation, amortization, depletion or other non-cash expenses, initial deposits to capitalize a reserve account, any amount expended from a reserve account, and any capital cost associated with the Property.
(iv) For purposes of this Note, “Gross Revenue” means for each calendar year, all revenue, income, receipts, and other consideration actually received from the operation and leasing of the Property under the Ground Lease. Gross Revenue includes, but is not limited to: (i) all rents, fees and charges paid by tenants; (ii) Section 8 payments or other rental subsidy payments received for the dwelling units; (iii) deposits forfeited by tenants; (iv) all cancellation fees; (v) price index adjustments and any other rental adjustments to leases or rental agreements; (vi) net proceeds from vending and laundry room machines; (vii) the proceeds of business interruption or similar insurance not paid to senior lenders; (viii) the proceeds of casualty insurance not used to rebuild the Project and not paid to senior lenders; and (ix) condemnation awards for a taking of part or all of the Project for a temporary period. Gross Revenue does not include tenants' security deposits, loan proceeds, capital contributions or similar advances. (iii) Borrower shall furnish to City, on an annual basis on or before the anniversary of the execution of this Note, and on or before each May 1 thereafter, the financial statements of Borrower, which may be internally prepared, on a consolidating and consolidated basis and in conformity with GAAP, consisting of at least statements of income, cash flow, changes in financial position and stockholders” equity, and a consolidated balance sheet, setting forth in each case in comparative form corresponding figures from the previous financial statements delivered to City pursuant to this Section. (e) Final Payment. On the Maturity Date, Borrower shall pay the City all principal and interest remaining on the Loan.

4. PREPAYMENT.
(a) Borrower may prepay the Loan, in whole or in part, at any time and from time to time without penalty.

Agenda Item #12.1.

Exhibit B
4839-3028-5526v.2 4900000-001457
(b) In no event shall Borrower be entitled to re-borrow any amounts prepaid.

5. LAWFUL MONEY.

Principal and interest are payable in lawful money of the United States of America.

6. APPLICATION OF PAYMENTS/LATE CHARGE.
(a) Unless otherwise agreed to, in writing, or otherwise required by applicable law, payments will be applied first to accrued, unpaid interest, then to any unpaid collection costs, late charges and other charges, and any remaining amount to principal, provided, however, during the continuance of an Event of Default, as defined herein or in any other Loan Document, Lender reserves the right to apply payments among principal, interest, late charges, collection costs and other charges in such order of priority as Lender shall from time to time determine in its sole discretion. All prepayments shall be applied to the indebtedness owing hereunder in such order and manner as Lender may from time to time determine in its sole discretion. (b) Upon the occurrence, and during the continuance, of an Event of Default, including the failure to pay upon final maturity, Lender, may at its option and in its sole discretion: (i) increase the applicable Interest Rate on this Note to the Default Interest Rate, and/or (ii) add any unpaid accrued interest to principal and such sum will bear interest therefrom until paid at the Default Interest Rate. The undersigned acknowledges that, during the time that any amount is in default, Lender will incur losses that are impracticable, costly, and inconvenient to ascertain. Those losses include, without limitation, the ability to invest amounts then due at the current rate of return and the unavailability of liquid funds. The undersigned agrees that the interest payable hereunder represents a reasonable sum considering all of the circumstances existing on the date of the execution of this Note and represents a reasonable estimate of the losses Lender will incur by reason of late payment. The undersigned further agrees that proof of actual losses would be costly, inconvenient, impracticable, and extremely difficult to fix.

Acceptance of the interest will not constitute a waiver of the default with respect to the overdue installment and will not prevent Lender from exercising any of the other rights and remedies available under this Note and/or the Loan Documents. Notwithstanding anything contained herein, the interest rate will not exceed the maximum rate permitted by applicable law.

7. SECURITY.

This Note is secured, among other security, by security instruments covering real property and personal property of the undersigned located in California, including, without limitation, the Leasehold Deed of Trust, which creates a lien on that certain real and personal property described therein.

8. EVENT OF DEFAULT.

The occurrence of any of the following shall be deemed to be an event of default (“Event of Default”) hereunder:

Agenda Item #12.1.

Exhibit B
4839-3028-5526v.2 4900000-001457
(a) default in the payment of principal and/or interest, and/or any other sum advanced by Lender pursuant to the terms and provisions of this Note and/or the Loan Documents within five (5) days from the date due; and/or
(b) the failure to perform any of the other terms, provisions, and obligations of the Borrower and/or any indemnitor pursuant to the Loan Documents within thirty (30) days from the receipt of written notice from the Lender (the “30 Day Notice”) that such performance was due; provided, however that if such failure is not reasonably susceptible to cure within said thirty (30) days from receipt of the 30 Day Notice and provided that (i) Borrower shall have in good faith undertaken such cure within said thirty (30) day period and (ii) Borrower shall have diligently prosecuted such cure thereafter, Borrower shall have additional time to prosecute such cure, such additional time not to exceed the one hundred twenty (120) days, from receipt by Borrower of the 30 Day Notice; City agrees to provide to Borrower’s limited partner a copy of any Notice of default delivered to Borrower hereunder and to accept any cure made or tendered by Borrower’s limited partner as if made or tendered by Borrower; (c) if any event occurs that is an Event of Default under any of the Loan Documents, the Affordable Housing Covenant; and/or a breach of the Ground Lease.

9. REMEDIES.

Upon the occurrence, and during the continuance, of an Event of Default, then at the sole election and option of the holder hereof, the entire balance of principal together with all accrued interest thereon, and all other amounts payable by Borrower under the Loan Documents shall, without demand or notice, immediately become due and payable. Upon the occurrence of an Event of Default (and so long as such Event of Default shall continue), the entire balance of principal hereof, together with all accrued interest thereon, all other amounts due under the Loan Documents, and any judgment for such principal, interest, and other amounts due under the Loan Documents, shall bear interest at the Default Interest Rate, subject to the limitations contained in Section 14 hereof. No delay or omission on the part of the holder hereof in exercising any right or remedy under this Note and/or under any of the other Loan Documents hereof shall operate as a waiver of such right.

10. WAIVER.

Borrower hereby waives diligence, demand for payment, presentment for payment, protest, notice of nonpayment, notice of protest, notice of intent to accelerate, notice of acceleration, notice of dishonor, and all other notices or demands of any kind (except notices specifically provided for in the Loan Documents, if any). Borrower waives to the full extent permitted by law, the right to plead any and all statutes of limitations and/or any defenses relating to marshaling of assets as a defense.

11. CHANGE, DISCHARGE, TERMINATION, OR WAIVER.

No provision of this Note may be changed, discharged, terminated, or waived except in a writing Agenda Item #12.1.

Exhibit B
4839-3028-5526v.2 4900000-001457
signed by the party against whom enforcement of the change, discharge, termination, or waiver is sought. No failure on the part of the holder hereof to exercise and no delay by the holder hereof in exercising any right or remedy under this Note and/or the Loan Documents and/or under the law shall operate as a waiver thereof.

12. ATTORNEY’S FEES.

The undersigned agrees to pay all reasonable costs including, without limitation, reasonable attorney fees, incurred by the holder of this Note in enforcing payment, whether or not suit is filed, including, without limitation, all costs, attorney fees, and expenses incurred by the holder of this Note in connection with any bankruptcy, reorganization, arrangement, or other similar proceedings involving the undersigned that in any way affects the exercise by the holder of this Note of its rights and remedies under this Note. All costs incurred by the holder of this Note in any action undertaken to obtain relief from the stay of bankruptcy statutes are specifically included in those costs and expenses to be paid by the undersigned. Borrower will pay to Lender all attorney fees and other costs referred to in this Section 13 on demand, together with interest from the date of the demand at the Default Rate until paid.

13. SEVERABILITY.

If any provision of this Note is unenforceable, the enforceability of the other provisions shall not be affected and they shall remain in full force and effect.

14. INTEREST RATE LIMITATION.

Borrower hereby agrees to pay an effective rate of interest that is the sum of the interest rate provided for herein, together with any additional rate of interest resulting from any other charges of interest or in the nature of interest paid or to be paid in connection with the Loan, including, without limitation, the Loan Fee and any other fees to be paid by Borrower pursuant to the provisions of the Loan Documents. Lender and Borrower agree that none of the terms and provisions contained herein or in any of the Loan Documents shall be construed to create a contract for the use, forbearance or detention of money requiring payment of interest at a rate in excess of the maximum interest rate permitted to be charged by the laws of the State of California. In such event, if any holder of this Note shall collect monies which are deemed to constitute interest which would otherwise increase the effective interest rate on this Note to a rate in excess of the maximum rate permitted to be charged by the laws of the State of California, all such sums deemed to constitute interest in excess of such maximum rate shall, at the option of the holder, be credited to the payment of other amounts payable under this Note and/or the Loan Documents or returned to Borrower.

15. NUMBER AND GENDER.

In this Note the singular shall include the plural and the masculine shall include the feminine and neuter gender, and vice versa.

16. HEADINGS.

Agenda Item #12.1.

Exhibit B
4839-3028-5526v.2 4900000-001457
Headings at the beginning of each numbered section of this Note are intended solely for convenience and are not part of this Note.

17. CHOICE OF LAW.

THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH

THE LAWS OF THE STATE OF CALIFORNIA WITHOUT GIVING EFFECT TO CONFLICT OF LAWS PRINCIPLES.

18. INTEGRATION.

The Loan Documents contain the complete understanding and agreement of the holder hereof and Borrower and supersede all prior representations, warranties, agreements, arrangements, understandings, and negotiations.

19. BINDING EFFECT.

The Loan Documents will be binding upon, and inure to the benefit of, the holder hereof, Borrower, and their respective successors and assigns. Borrower may not assign its obligations under the Loan Documents.

20. TIME OF THE ESSENCE.

Time is of the essence with regard to each provision of the Loan Documents as to which time is a factor.

21. SURVIVAL.

The representations, warranties, and covenants of the Borrower in the Loan Documents shall survive the execution and delivery of the Loan Documents and the making of the Loan.

22. NONRECOURSE.

This Note is a nonrecourse obligation of Borrower. Neither Borrower nor any of its officers, directors, members, or general and limited partners shall have any personal liability for repaying the principal or interest of the Note. In any action brought to enforce the obligations of Maker under this Note, the Deed of Trust or any other instrument or agreement evidencing, securing or relating to the indebtedness evidenced by this Note, the judgment or decree shall be enforceable against Borrower solely and only to the extent of its interest in the property described in the Deed of Trust or its interest in any other security provided by Borrower as security for this Note, and Lender shall not seek any deficiency judgment against the Borrower. The foregoing provisions shall not prevent recourse to the collateral security for the loan, including but not limited to all contracts, documents, reports, surveys, materials, architectural drawings and specifications and other information related to the Project, or constitute a waiver, release or Agenda Item #12.1.

Exhibit B
4839-3028-5526v.2 4900000-001457
discharge of or otherwise affect the obligation to pay, any indebtedness evidenced by the loan documents executed in connection with the Project or limit the right of any person to name the Borrower or any other person claiming an interest in or right to such collateral as party defendant in any action or suit for judicial foreclosure or in the exercise of any other remedy, including injunctive or other equitable relief, under any of the loan documents executed in connection with this Project so long as no deficiency judgment shall be sought against the Borrower.

MAKER / BORROWER:

Hunt Pradera II, L.P.,
a California limited partnership
By: Hunt Pradera II, LLC,
a California limited liability company,
its General Partner
By: BRIDGE Housing Corporation,
a California nonprofit public benefit corporation,
its Managing Member
By: ______________________________
Smitha Seshadri
Executive Vice President
Agenda Item #12.1.

Exhibit C
4839-3028-5526v.2 4900000-001457

EXHIBIT C

FORM OF LEASEHOLD DEED OF TRUST

FORM OF DEED OF TRUST

RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:

City of St. Helena
1088 College Avenue
St. Helena, California 94574
Attn: City Manager
Space above line for Recorder’s use only
Exempt from Recording Fees pursuant to Govt. Code § 27383 CITY OF ST. HELENA

LEASEHOLD DEED OF TRUST, ASSIGNMENT OF RENTS, SECURITY

AGREEMENT AND FIXTURE FILING
This Leasehold Deed of Trust (“Deed of Trust”) is made as of ________, 2024, among Hunt Pradera II, L.P., a California limited partnership, a California limited partnership (“TRUSTOR”), whose address is ___________________, and the CITY OF ST. HELENA, as trustee and beneficiary (hereafter, “BENEFICIARY”), whose address is 1088 College Avenue, St. Helena, California 94574.

Trustor irrevocably grants, conveys, transfers, and assigns to Trustee in trust, with power of sale and right of entry and possession, all of Trustor’s estate, right, title, and interest in, to and under the following property (collectively, the “Property”): (a) the real property located in the City of St. Helena, Napa County, California, at 548 Hunt Avenue, known as Napa County Assessor’s Parcel No. 009-030-019-000 (the “St. Helena Property”), described on Exhibit A attached hereto and incorporated herein by this reference, and the real property located in the City of Calistoga, Napa County, California, at 38 Brannan Street, known as Napa County Assessor’s Parcel No. 011-050-027-000 (the “Calistoga Property”), together with all existing and future easements and rights affording access to the St. Helena Property and the Calistoga Property (collectively, the “Land”), (b) together with all buildings, structures, and improvements now existing or hereafter constructed thereon (the “Improvements”), (c) together with all articles of personal property now or hereafter attached to, placed upon for an indefinite term, or used in connection with the Land and/or Improvements, together with all goods and other property that are, or at any time become, so related to the Property that an interest in them arises under real estate law, or they are otherwise adjudged to be a “fixture” under applicable law (each a “Fixture,” collectively “Fixtures”), (d) together with all other property and interests of any Agenda Item #12.1.

Exhibit C
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kind or character which may be reasonably necessary or desirable to promote the present and future beneficial use and enjoyment of such real property and improvements.

1. Secured Obligations. Trustor makes the grant, conveyance, transfer, and assignment herein for the purpose of securing the following obligations (the “Secured Obligations”): (a) payment of the principal sum of Eight Hundred Thousand Dollars ($800,000.00), with interest thereon, according to the terms of a Residual Receipts Promissory Note (the “Note”) of even date herewith, executed by Trustor in favor of Beneficiary or order and any extension or renewals thereof; (b) payment of such further sums as the then record owner of the Property may borrow from Beneficiary, when evidenced by a promissory note or notes reciting that they are secured by this Deed of Trust; and (c) the obligation to pay rent from Residual Receipts, as set forth in the Ground Lease. The payment of the amount owing pursuant to the terms of the Note by Trustor does not extinguish the rights of the Beneficiary under the Ground Lease. This Leasehold Deed of Trust shall secure the Beneficiary against any default under the Ground Lease for non-payment of rent.

2. Maintenance and Repair. Trustor shall (a) keep the Property in good condition and repair and not remove or demolish any building except as may be necessary to construct the Project; (b) complete or restore promptly and in good and workmanlike manner any building which may be constructed, damaged or destroyed; (c) pay when due all claims for labor performed and materials furnished; (d) comply with all laws affecting the Property or requiring any alterations or improvements to be made; (e) not commit or permit waste; and (f) cultivate, irrigate, fertilize, fumigate, prune, and do all other acts which from the character or use of the Property may be reasonably necessary.

3. Insurance. Trustor shall maintain hazard insurance against loss by fire, hazards included with the term “extended coverage,” and any other hazards for which Beneficiary requires insurance, and liability insurance as set forth in the Loan Agreement. The insurance carrier and the insurance policies and amounts of coverage shall comply with the terms of the Loan Agreement or shall otherwise be acceptable to Beneficiary, the policies shall name Beneficiary as a loss payee or an additional insured, as applicable, the policies shall include Beneficiary as an additional insured, as applicable.

4. Defense of Security. Trustor shall appear in and defend any action or proceeding purporting to affect the security or the rights or powers of Beneficiary or Trustee. Trustor shall pay all costs and expenses, including costs of evidence of title and attorneys’ fees, in any such action or proceeding in which Trustee or Beneficiary may appear, and in any suit brought by Beneficiary to foreclose this Deed of Trust.

5. Payment of Taxes and Liens. Trustor shall pay (a) at least 10 days before delinquency, all non-abated taxes and assessments affecting the Property, including water stock assessments; (b) when due, all encumbrances, charges, and liens, with interest, on the Property, which are or appear to be prior or superior to this Deed of Trust; and (c) upon demand all reasonable and documented costs, fees, and expenses of this Deed of Trust. If Trustor fails to make any payment or to do any act provided for in this Deed of Trust after written notice of such failure by Beneficiary and a reasonably opportunity to cure, then Beneficiary or Trustee may, without obligation to do so, and with or without notice to or demand upon Trustor, and without Agenda Item #12.1.

Exhibit C
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releasing Trustor from any obligation under this Deed of Trust: (w) make or do the same in such manner and to such extent as either may deem necessary to protect the security, Beneficiary or Trustee being authorized to enter upon the Property for such purposes; (x) appear in or commence any action or proceeding purporting to affect the security, or the rights or powers of Beneficiary or Trustee; (y) pay, purchase, contest or settle any encumbrance, charge or lien which in the judgment of either appears to be senior to this Deed of Trust; and (z) in exercising any such powers, pay allowable expenses, including attorneys’ fees.

6. Reimbursement of Costs. Trustor shall pay upon demand all reasonable and documented sums expended by Beneficiary or Trustee provided for in this Deed of Trust or allowed by law, with interest from date of expenditure at the maximum rate provided in the Note.

7. No Waiver. By accepting payment of any sum after its due date, Beneficiary does not waive its right either to require prompt payment when due of all other sums or declare a default for failure to pay.

8. Reconveyance. That upon written request of Beneficiary stating that all sums secured hereby have been paid, and upon surrender of this Deed of Trust and said note or notes to Trustee for cancellation and retention or other disposition as Trustee in its sole discretion may choose and upon payment of its fees, Trustee shall reconvey, without warranty, the property then held hereunder. The recitals of such reconveyance of any matters or facts shall be conclusive proof of the truthfulness thereof. The grantee in such reconveyance may be described as “the person or persons legally entitled thereto.”

9. Assignment of Rents. Subject to the rights of senior lenders, Trustor hereby absolutely and unconditionally assigns to Beneficiary all of the rents, issues, profits, royalties, revenues, income, and other benefits (collectively, the “Rents”) derived from the Property, whether now due, past due or to become due, and hereby gives to and confers upon Beneficiary, either directly or through a receiver, the right, power, and authority, but not the obligation, to collect the Rents, and to sue, either in the name of Trustor or Beneficiary, for all such Rents and to apply the same to the indebtedness secured hereby in such order as Beneficiary may determine in its sole discretion. This assignment of Rents is intended to create and shall be construed to create an absolute assignment to Beneficiary of all of Trustor’s right, title, and interest in the Rents. So long as no default exists by Trustor in the payment of any indebtedness secured hereby, or in any other covenant contained herein, or in said note or notes or in any other document evidencing or securing such indebtedness, Trustor shall have the right to collect all Rents from the Property and to retain, use, and enjoy the same. Upon the occurrence of such a default beyond any applicable notice and cure periods, without the necessity of demand or other notice to Trustor or any other act to enforce Beneficiary’s interest pursuant to this assignment, Trustor shall have no interest whatsoever in the Rents that are received by Trustor after a default, and all such Rents shall be received and held by Trustor in constructive trust for Beneficiary and delivered promptly to Beneficiary, or to a court-appointed receiver for the Property, without the necessity for further notice to, or demand upon, Trustor. Upon the occurrence of such a default, beyond any applicable notice and cure periods, and at any time thereafter during the continuance thereof, Beneficiary may, at its option, send any tenant of the Property a notice to the effect that:
(a) a default has occurred; (b) Beneficiary has elected to exercise its rights under this assignment; and (c) such tenant is thereby directed to thereafter make all payments of Rents to or for the Agenda Item #12.1.

Exhibit C
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benefit of Beneficiary or as Beneficiary shall direct. Any such tenant shall be entitled to rely upon any notice from Beneficiary and shall be protected with respect to any payment of Rents made pursuant to such notice, irrespective of whether a dispute exists between Trustor and Beneficiary with respect to the existence of a default or the rights of Beneficiary hereunder. Any such tenant shall not be required to investigate or determine the validity or accuracy of such notice or the validity or enforceability of this assignment. Trustor hereby agrees to indemnify, defend, and hold any such tenant harmless from and against any and all losses, claims, damages or liabilities arising from or related to any payment of Rents by such tenant made in reliance on and pursuant to such notice.

10. Default and Foreclosure. Upon default by Trustor in payment or performance of any Secured Obligation, subject to any applicable notice and cure period, Beneficiary may declare all sums secured immediately due and payable by delivery to Trustee of a declaration of default and demand for sale and of a notice of default and of a notice of sale, which notice Trustee shall cause to be filed for record. Beneficiary also shall deposit with Trustee this Deed of Trust, said note or notes, and all documents evidencing expenditures secured by this Deed of Trust. Upon default of any obligation secured by this Deed of Trust and acceleration of all sums due, Beneficiary may instruct Trustee to proceed with a sale of the Property under the power of sale granted in this Deed of Trust, noticed and held in accordance with California Civil Code Sections 2924, et seq., as such statutes may be amended from time to time. Trustor waives all rights it may have to require marshaling of assets or to require sales of assets in any particular order, including any rights under California Civil Code Sections 2899 and 3455.

11. Distribution of Foreclosure Proceeds. The proceeds generated by any Foreclosure (“Proceeds”) shall be distributed as follows: (i) First, senior liens and encumbrances (if any) on the Project shall be fully paid from the Proceeds; (ii) Second, Beneficiary shall be fully paid any amounts owing under the Secured Obligations; (iii) Third, to the Trustor to the extent the Trustor or its affiliate has unreimbursed predevelopment costs advanced in connection with the Project; (iv) Fourth, Beneficiary shall be paid the difference between the appraised value of the completed Project (applicable portion thereof) as restricted by the Affordable Housing Covenant (“Restricted Value”) and the Proceeds (“Differential”); (v) Fifth, any remaining Proceeds shall be distributed in accordance with California Civil Code Section 2924(k). The Differential shall be deposited in Beneficiary’s housing fund. Trustor expressly acknowledges and agrees that the Loan Agreement and this Deed of Trust constitutes a lien against the Project and the Differential, including in accordance with California Civil Code Sections 2872, 2924 to 2924h, inclusive (“Differential Lien”). In the event of a Foreclosure, for purposes of distribution of the Differential only, the Differential Lien shall be considered a junior lien or encumbrance within the meaning of California Civil Code section 2924k(a)(3). Trustor hereby irrevocably instructs any holder of the Differential or similar proceeds generated by Foreclosure to immediately disburse the Differential to Beneficiary, and agrees to defend, indemnify and hold Beneficiary and such holder harmless from any and all claims related to such distribution. As used herein, “Foreclosure” means any judicial or non-judicial foreclosure, trustee’s sale, deed-in-lieu transfer, short sale, or similar transaction.

12. Substitution of Trustee. Beneficiary, or any successor in ownership of any indebtedness secured hereby, may from time to time, by instrument in writing, substitute a successor or successors to any Trustee named herein or acting hereunder, which instrument Agenda Item #12.1.

Exhibit C
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executed by the Beneficiary and duly acknowledged and recorded in the office of the recorder of the county or counties where the Property is situated, shall be conclusive proof of proper substitution of such successor Trustee or Trustees, who shall, without conveyance from the Trustee predecessor, succeed to all its title, estate, rights, powers, and duties. Said instrument must contain the name of the original Trustor, Trustee, and Beneficiary hereunder, the book and page where this Deed of Trust is recorded, and the name and address of the new Trustee.

13. Successors and Assigns. This Deed of Trust applies to, inures to the benefit of, and binds all parties hereto, their heirs, legatees, devisees, administrators, executors, successors, and assigns. The term “Beneficiary” shall mean the owner and holder, including pledgees, of the secured note or notes, whether or not named as Beneficiary herein.

14. Trustee Acceptance. Beneficiary agrees to act as Trustee for this Deed of Trust, when it is duly executed and acknowledged, and made a public record as provided by law.

Trustee is not obligated to notify any party hereto of pending sale under any other deed of trust or of any action or proceeding in which Trustor, Beneficiary or Trustee shall be a party unless brought by Trustee.

15. Further Assurances. Trustor shall, at its own cost and expense, do, execute, acknowledge, and deliver all and every such further acts, deeds, conveyances, mortgages, assignments, notices of assignments, transfers, and assurances as Trustee or Beneficiary shall from time to time reasonably require, for better assuring, conveying, assigning, transferring, and confirming unto Trustee the Property and rights hereby conveyed or assigned or intended now or hereafter so to be, or which Trustor may be or may hereafter become bound to convey or assign to Trustee, or for carrying out the intention or facilitating the performance of the terms of this Deed of Trust, or for filing, registering, or recording this Deed of Trust. Trustor shall, on demand, execute and deliver, and hereby authorizes Trustee and Beneficiary, or either of them, to execute in the name of Trustor, to the extent it may lawfully do so, one or more financing statements, chattel mortgages, or comparable security instruments, to evidence more effectively the lien hereof. Immediately upon the execution and delivery of this Deed of Trust, and thereafter from time to time, Trustor shall cause this Deed of Trust, and any security instruments creating a lien or evidencing the lien hereof upon any personal property and each instrument of further assurance, to be filed, registered, or recorded in such manner and in such places as may be required by any present or future law in order to publish notice of and fully to protect the lien hereof upon, and the title of Trustee to, the Property encumbered hereby.

16. Condemnation and Insurance Proceeds. Immediately upon obtaining knowledge of the institution of any proceedings for the condemnation or other taking of all or any portion of the Property, or knowledge of any casualty damage to the Property, or damage in any other manner, Trustor shall immediately notify Beneficiary thereof. Trustor hereby authorizes and empowers Beneficiary as attorney-in-fact for Trustor to make proof of loss, to adjust and compromise any claim under the insurance policies covering the Property, to appear in and prosecute any action arising from such insurance policies, to collect and receive insurance proceeds, and to deduct therefrom Beneficiary’s expenses incurred in the collection of such proceeds; provided, however, that nothing contained in this Section shall require Beneficiary to incur any expense or take any action hereunder. Trustor hereby authorizes and empowers Beneficiary, at Beneficiary’s option, as attorney-in-fact for Trustor, to commence, appear in, and Agenda Item #12.1.

Exhibit C
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prosecute, in Beneficiary’s or Trustor’s name, any action or proceeding relating to any condemnation or other taking of all or any part of the Property, whether direct or indirect, and to settle or compromise any claim in connection with such condemnation or other taking. The proceeds of any award payment or claim for damages, direct or consequential, in connection with any condemnation or other taking, whether direct or indirect, of the Property, or any part thereof, or for conveyances in lieu of the Property, or any part thereof, shall be paid to Beneficiary. The foregoing powers of attorney are coupled with an interest and are irrevocable. Trustor hereby authorizes Beneficiary to apply such awards, payments, proceeds or damages relating to condemnation of the Property and insurance covering the Property, after the deduction of Beneficiary’s expenses incurred in the collection of such amounts, subject to the requirements of applicable law and the provisions hereof, to restoration or repair of the Property or to payment of the sums secured by this Deed of Trust. Beneficiary shall be under no obligation to question the amount of any compensation, awards, proceeds, damages, claims, rights of action, and payments relating to condemnation or other taking of the Property or insured casualty affecting the Property, and may accept the same in the amount in which the same shall be paid. Trustor shall execute such further evidence of assignment of any awards, proceeds, damages or claims arising in connection with such condemnation or taking or such insurance as Beneficiary may require.

Notwithstanding the above, the Beneficiary shall release all insurance and condemnation proceeds to Trustor to be used to reconstruct the improvements on the Property provided that Beneficiary reasonably determines that such restoration, repair or rebuilding is economically feasible, provided, Beneficiary acknowledges and agrees that if any casualty affects the Property at any point after the execution of this Deed of Trust and prior to the construction of the Trustor’s new Improvements, the Trustor shall not be obligated to reconstruct any improvements on the Property. If such insurance proceeds shall be insufficient for such purposes, Trustor shall make up the deficiency. If the Project is subject to a partial condemnation or taking, then the proceeds received therefrom shall be applied to restore the Project taken, provided the Beneficiary determines that such restoration is economically feasible and no default exists under the Loan Documents following the expiration of all applicable cure periods. If the Project is subject to a total condemnation, or if Beneficiary determines that restoration of the Project is not feasible following a partial condemnation, or if a default exists then the proceeds from any condemnation award or claim for damages shall be used first to repay all sums under the Note, with the excess, if any, paid to Trustor, subject to the rights of the senior lender.

17. Severability. If any one or more of the provisions contained in this Deed of Trust shall for any reason be held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provisions of this Deed of Trust, but this Deed of Trust shall be construed as if such invalid, illegal, or unenforceable provision had never been contained herein or therein, but only to the extent of such invalidity.

18. Estoppel Certificate. Trustor shall, within thirty (30) days of a written request from Beneficiary, furnish Beneficiary with a written statement, duly acknowledged, setting forth the sums secured by this Deed of Trust and any right of set-off, counterclaim or other defense which exists against such sums and the obligations of this Deed of Trust.

19. California Uniform Commercial Code Security Agreement; Fixture Filing.

Trustor hereby grants Beneficiary a security interest in all personal property of Trustor located on the Property and wherever located and used in any way in connection with or in any way Agenda Item #12.1.

Exhibit C
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relating to the Property, and whether now owned or hereafter in existence, acquired or created (including equipment, inventory, goods, documents, instruments, general intangibles, chattel paper, accounts, accounts receivable, deposit accounts, and contract rights), and all fixtures of Trustor now owned or hereafter in existence, acquired or created on, of or relating to the Property, and all substitutions, replacements, additions, accessions, and proceeds (including insurance proceeds) of all of the foregoing (collectively, the “Personal Property”). Beneficiary may file this Deed of Trust, or a reproduction hereof, in the real estate records or other appropriate index, as a financing statement for the Personal Property. Any reproduction of this Deed of Trust or of any other security agreement or financing statement shall be sufficient as a financing statement. In addition, Trustor shall execute and deliver to Beneficiary, upon Beneficiary’s request, any financing statements, as well as extensions, renewals, and amendments thereof, and reproductions of this Deed of Trust in such form as Beneficiary may require to perfect a security interest with respect to the Personal Property. Trustor shall pay all costs of filing such financing statements and any extensions, renewals, amendments, and releases thereof, and shall pay all reasonable costs and expenses of any record searches for financing statements Beneficiary may reasonably require. Upon Trustor’s breach of any covenant or agreement of Trustor contained in this Deed of Trust, including the covenants to pay when due all sums secured by this Deed of Trust, Beneficiary shall have the remedies of a secured party under the California Uniform Commercial Code and, at Beneficiary’s option, may also invoke any remedies provided in this Deed of Trust as to the Personal Property. In exercising any of such remedies, Beneficiary may proceed against the Property and any of the Personal Property separately or together and in any order whatsoever, without in any way affecting the availability of Beneficiary’s remedies under the California Uniform Commercial Code or the remedies provided in the Deed of Trust. This Deed of Trust also covers goods which are or which are to become fixtures on the Property and constitutes and is filed as a fixture filing under the California Uniform Commercial Code.

20. Due-On-Sale or Encumbrance. Except as authorized under the Affordable Housing Covenant or a subordination agreement affecting the Secured Obligations, if all or any part of the Property, or any interest therein, or any beneficial interest in Trustor (if Trustor is not a natural person or persons but is a corporation, partnership, trust, limited liability company or other legal entity), is sold, transferred, mortgaged, assigned, pledged, or further encumbered, whether directly or indirectly, whether voluntarily or involuntarily, or by operation of law, Beneficiary may, at Beneficiary’s option, declare all of the sums secured by this Deed of Trust to be immediately due and payable, and Beneficiary may invoke any remedies permitted by this Deed of Trust.
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Agenda Item #12.1.

Exhibit C
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The undersigned Trustor requests that a copy of any Notice of Default and of any Notice of Sale hereunder be mailed to Trustor at Trustor’s address hereinbefore set forth, and to Trustor’s limited partner at its address set forth in the Loan Agreement entered into by and between Trustor and Beneficiary referenced in Section 1, above.

TRUSTOR:

Hunt Pradera II, L.P.,
a California limited partnership
By: Hunt Pradera II, LLC,
a California limited liability company,
its General Partner
By: BRIDGE Housing Corporation,
a California nonprofit public benefit corporation,
its Managing Member
By: ______________________________
Smitha Seshadri
Executive Vice President
Agenda Item #12.1.

Exhibit D
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EXHIBIT D

FORM OF MEMORANDUM

MEMORANDUM OF LEASE
This Memorandum of Lease (“Memorandum”) is hereby entered into as of _____________, 20__ by and between the City of St. Helena, a California municipal corporation and charter city, (“Landlord”), and _______________________ (“Tenant”).

RECITALS
A. Landlord and Tenant have entered into that certain Ground Lease, dated concurrently herewith, for that certain parcel of real property which is legally described in Exhibit A, attached hereto and incorporated herein by reference (the “Property”). A copy of the Ground Lease is available for public inspection at Landlord’s office at 1088 College Avenue, St.

Helena, CA 94574. The term of the Ground Lease is ninety-nine (99) years, the Commencement Date of which is _______________, 20__.

B. The Ground Lease provides that a short form memorandum of the Ground Lease shall be executed and recorded in the Official Records of Napa County, California.

NOW, THEREFORE, the parties hereto certify as follows:

Landlord, pursuant to the Ground Lease, hereby leases the Property to the Tenant upon the terms and conditions provided for therein. This Memorandum is not a complete summary of the Ground Lease, and shall not be used to interpret the provisions of the Ground Lease. [Signatures to appear on the following page.]
Agenda Item #12.1.

Exhibit D
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LANDLORD:

CITY OF ST. HELENA, a municipal
corporation of the State of California
By:________________________________
Anil Comelo, City Manager
APPROVED AS TO FORM:
______________________________________________________________________________ Ethan Walsh, City Attorney
TENANT:

Hunt Pradera II, L.P.,
a California limited partnership
By: Hunt Pradera II, LLC,
a California limited liability company,
its General Partner
By: BRIDGE Housing Corporation,
a California nonprofit public benefit
corporation,
its Managing Member
By: __________________________
Smitha Seshadri
Executive Vice President
By: Napa Valley Community Housing,
a California nonprofit public benefit
corporation,
its Managing Member
By: ___________________________
Erica R. Sklar
President and Chief Executive
Officer
Agenda Item #12.1.

Exhibit E
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EXHIBIT E

LEASEHOLD MORTGAGEE PROTECTIONS
This is Exhibit E to that certain Ground Lease dated _______________ (the “Lease”), by and between __________________ (“Landlord”) and ___________________________ (“Tenant”), pursuant to which Tenant is acquiring an interest (the “Leasehold”) in the real property described therein (the “Premises”). In the event of any conflict between the provisions of this addendum and the provisions of the Lease, this exhibit shall control.

1. Tenant is hereby given the express right, in addition to any other rights herein granted, and without the necessity of obtaining Landlord’s consent, to mortgage the Leasehold, or any part or parts thereof, and any sublease of the Premises, under one or more leasehold mortgage(s) and/or under a purchase money leasehold mortgage in connection with any sale of such interest, and to assign the Lease or the Leasehold, or any part or parts thereof, and any sublease, as collateral security for such mortgage(s), upon the condition that it is in connection with an Approved Financing described in the Lease and all rights acquired under such mortgage(s) shall be subject to each and all of the covenants, conditions and restrictions set forth in the Lease, and to all rights and interests of Landlord herein, none of which covenants, conditions or restrictions is or shall be waived by Landlord by reason of the foregoing, except as expressly provided herein. In the event of any conflict between the provisions of the Lease and the provisions of any mortgage, the provisions of the Lease shall control, except as herein specifically provided.

2. If Tenant shall mortgage the Leasehold, or any part or parts thereof, and if the holder(s) of such mortgage(s) (each, a “Lender”) shall send to Landlord a true copy thereof, together with written notice specifying the name and address of the mortgagee(s) and the pertinent recording data with respect to such mortgage(s), the following provisions shall apply:

2.1 There shall be no cancellation, surrender or modification of the Lease by joint action of Landlord and Tenant without the prior consent in writing of each leasehold mortgagee, nor shall any election, determination or waiver by Tenant (whether through action or inaction) that materially impairs the value of the Leasehold be effective without such prior written consent. Without limitation upon the foregoing, no election by Tenant to terminate the Lease shall be effective unless the same is contained in a written instrument signed by Tenant and each leasehold mortgagee.

2.2 Landlord shall, upon serving Tenant with any notice of default or other material notice pursuant to the provisions of the Lease, simultaneously serve a copy of the notice upon any leasehold mortgagee(s). No such notice by Landlord to Tenant under the Lease shall be deemed to have been served unless and until a copy thereof shall have been served upon each leasehold mortgagee as set forth herein. Each notice required or permitted to be served on or given to any leasehold mortgagee pursuant to this Lease shall be given by U.S. mail, as certified or registered material, postage prepaid and addressed to such leasehold mortgagee at the address for notices set forth in such leasehold mortgagee’s leasehold mortgage (or, if such leasehold Agenda Item #12.1.

Exhibit E
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mortgagee gives Landlord written notice of a change in notice address, at such other address as such leasehold mortgagee may specify in such notice) and shall be effective upon receipt.

2.3 Any leasehold mortgagee shall have the right, but not the obligation, at any time prior to termination of the Lease and without payment of any penalty, to pay all of the rents due hereunder, to effect any insurance, to pay any taxes or assessments, to make any repairs or improvements, to do any other act or thing required of Tenant under the Lease, and to do any act or thing which may be necessary and proper to be done in the performance and observance of the agreements, covenants and conditions to prevent termination of the Lease. Any leasehold mortgagee and its agents and contractors shall have full access to the Premises for purposes of accomplishing any of the foregoing. Any of the foregoing done by any leasehold mortgagee shall be as effective to prevent a termination of the Lease as the same would have been if done by Tenant.

2.4 Notwithstanding anything to the contrary contained in the Lease, Landlord shall have no right to terminate the Lease on account of any uncured default of Tenant unless (a) following the expiration of all applicable grace and cure periods afforded to Tenant under the Lease, Landlord first gives each Lender not less than sixty (60) days’ notice of its intent to terminate the Lease as a result of such default, if Tenant’s default consists of a failure to pay money to Landlord (a “Monetary Default”), and not less than one hundred eighty (180) days’ notice of its intent to terminate the Lease, if Tenant’s default is of any other type (a “Nonmonetary Default”), and (b) each Lender fails to cure such Monetary Default within sixty (60) days after receipt of such notice (in the case of a Monetary Default) or each Lender fails to cure or, in good faith and with reasonable diligence and continuity, commence to cure such Nonmonetary Default within said one hundred eighty (180) day period (in the case of a Nonmonetary Default). If any such Non-monetary Default cannot reasonably be cured by such Lender within said one hundred eighty (180) day period (or is such that possession of the Premises is necessary for Lender to remedy the default), the date for termination shall be extended for such period of time as may be reasonably required to enable a Lender to remedy such default, if (a) a Lender shall have fully cured any Monetary Default under this Lease within sixty (60) days after its receipt of notice of Landlord’s intent to terminate the Lease, and shall continue to pay currently such monetary obligations as and when the same are due (subject to any notice and cure provisions given in the Lease), and (b) a Lender commences, or causes any trustee under the applicable mortgage to commence, within such 180 day period, proceedings to foreclose, either non-judicially or judicially, upon the interest in the Premises encumbered by the mortgage (and thereafter pursues such proceedings with reasonable diligence). Nothing in this Section 2.4 shall be construed to require a Lender to continue any foreclosure proceeding it may have commenced against Tenant after all defaults have been cured by Lender or Tenant, and if such defaults shall be cured and the Lender shall discontinue such foreclosure proceedings, the Lease shall continue in full force and effect as if Tenant had never defaulted under the Lease.

Nothing herein shall require a Lender who has acquired Tenant’s leasehold interest and has taken possession of the Premises to cure any Non-monetary Default which is not reasonably capable of being cured by such Lender, and such default shall be deemed to be waived following Lender’s acquisition of Tenant’s leasehold interest and such Lender’s timely cure of all Monetary Defaults and all Non-monetary Defaults which are reasonably capable of cure by such Lender in accordance with the foregoing provisions.

Agenda Item #12.1.

Exhibit E
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2.5 All right of Landlord to terminate the Lease as the result of the occurrence of any default shall be subject to, and conditioned upon, Landlord having first given to each leasehold mortgagee written notice of the default as required under paragraph 2.2, above, and each leasehold mortgagee having failed to remedy such default or acquire the Leasehold or commence foreclosure or other appropriate proceedings in the nature thereof as set forth in paragraph 2.4, above.

2.6 If any leasehold mortgagee is prohibited from commencing or prosecuting foreclosure or other appropriate proceedings in the nature thereof by any process or injunction issued by any court or by reason of any action by any court having jurisdiction of any bankruptcy or insolvency proceeding involving Tenant, the times specified in paragraph 2.4, above, for commencing or prosecuting foreclosure or other proceedings shall be extended for the period of the prohibition; provided that the leasehold mortgagee shall have fully cured any default in the payment of any monetary obligations of Tenant under the Lease (other than the payment of any amount secured by a lien on the Leasehold that is junior to such mortgage) and shall continue to pay currently those monetary obligations as and when the same fall due.

2.7 Landlord agrees that, in the event of termination of the Lease for any reason (including without limitation by reason of any default by Tenant or by reason of the disaffirmance thereof by a receiver, liquidator or trustee for Tenant or its property), Landlord (a) shall promptly give each leasehold mortgagee written notice of such termination and (b) shall, if requested by any leasehold mortgagee, enter into a new lease of the Premises with the most senior leasehold mortgagee (the “Senior Leasehold Mortgagee”) requesting a new lease, which new lease shall commence as of the date of termination of the Lease and shall run for the remainder of the Lease term, at the same rent and additional rent and upon the same terms, provisions, covenants and agreements, and subject to the rights, if any, of any parties then in possession of any part of the Premises, provided:
(a) The leasehold mortgagee shall make written request upon Landlord for the new lease not later than sixty (60) days after the date such leasehold mortgagee receives written notice of such termination from Landlord;
(b) The leasehold mortgagee shall pay to Landlord at the time of the execution and delivery of the new lease any and all sums which would, at the time of the execution and delivery thereof, be due and unpaid pursuant to the Lease but for its termination (other than the payment of any amount that was secured by a lien on the Leasehold that was junior to such mortgage), and in addition thereto any expenses, including reasonable attorneys' fees, to which Landlord shall have been subjected by reason of Tenant's default; (c) The leasehold mortgagee shall perform and observe all covenants in the Lease to be performed and observed by Tenant, and shall further remedy any other conditions which Tenant under the terminated Lease was obligated to perform under its terms, to the extent the same are curable or may be performed by the leasehold mortgagee; (d) The new lease shall be expressly made subject to the rights, if any, of Tenant under the terminated Lease; and
Agenda Item #12.1.

Exhibit E
4839-3028-5526v.2 4900000-001457
(e) The lessee under the new lease shall have the same right, title and interest in and to the buildings and improvements on the Premises as Tenant had under the terminated Lease immediately prior to its termination.

2.8 Notwithstanding anything to the contrary expressed or implied in the Lease, any new lease made pursuant to paragraph 2.7, above, shall be prior to any mortgage, deed of trust, or other lien, charge, or encumbrance on the Land Parcel (as defined in the Lease), and shall be accompanied by a conveyance of title to the improvements (free of any mortgage, deed of trust, lien, charge, or encumbrance created by Landlord) for a term of years equal to the term of the new lease, subject to the reversion in favor of Landlord upon expiration or sooner termination of the new lease.

2.9 Nothing herein contained shall require any leasehold mortgagee to enter into a new lease pursuant to paragraph 2.7, above, nor to cure any default of Tenant referred to above.

2.10 Foreclosure of any leasehold mortgage, or any sale thereunder, whether by judicial proceedings or by virtue of any power contained in the leasehold mortgage, or any conveyance of the Leasehold from Tenant to any leasehold mortgagee or its designee through, or in lieu of, foreclosure or other appropriate proceedings in the nature thereof, shall not require the consent of Landlord or constitute a breach of any provision of, or a default under, the Lease, and upon such foreclosure, sale or conveyance, Landlord shall recognize the purchaser or other transferee in connection therewith as the Tenant under the Lease.

2.11 In the event any leasehold mortgagee or any designee of it becomes the Tenant under the Lease or under any new lease obtained pursuant to paragraph 2.7, above, the leasehold mortgagee or its designee shall be personally liable for the obligations of Tenant under the Lease or new lease only to the extent that they arise during the period of time that the leasehold mortgagee or its designee constitutes the actual beneficial holder of the leasehold estate. The leasehold mortgagee's, or its designee's, right thereafter to assign the Lease or the new lease shall not be subject to any restriction.

2.12 If a leasehold mortgagee shall elect to demand a new lease, Landlord agrees, at the request of, on behalf of and at the expense of the leasehold mortgagee, upon a guaranty or other assurance from it reasonably satisfactory to Landlord, to institute and pursue diligently to conclusion the appropriate legal remedy or remedies to oust or remove the original Tenant from the Premises, but not any sub-Tenants actually occupying the Premises or any part thereof.

2.13 Unless and until Landlord has received notice from each leasehold mortgagee that the leasehold mortgagee elects not to demand a new lease as provided in paragraph 2.7, above, or until the period therefor has expired, Landlord shall not cancel or agree to the termination or surrender of any existing subleases nor enter into any new subleases hereunder without the prior written consent of the leasehold mortgagee(s).

Agenda Item #12.1.

Exhibit E
4839-3028-5526v.2 4900000-001457

2.14 Landlord agrees that the name(s) of the leasehold mortgagee(s) may be added to the “Loss Payable Endorsement” of any and all insurance policies required to be carried by Tenant under the Lease.

2.15 The proceeds from any insurance policies and the proceeds arising from any condemnation shall be paid to and held by the leasehold mortgagee of highest priority and applied by such leasehold mortgagee pursuant to the provisions of its leasehold mortgage (and such leasehold mortgagee(s) may reserve the right to apply to the mortgage debt all, or any part, of such proceeds pursuant to the terms of its leasehold mortgage documents).

2.16 The parties hereto shall give all leasehold mortgagee(s) notice of any arbitration or condemnation proceedings, or of any pending adjustment of insurance claims, and any leasehold mortgagee shall have the right to intervene therein and shall be made a party to such proceedings. The parties hereto do hereby consent to such intervention. In the event that any leasehold mortgagee shall not elect to intervene or become a party to the proceedings, that leasehold mortgagee shall receive notice and a copy of any award or decision made in connection therewith.

2.17 Landlord and Tenant shall cooperate in including in the Lease by suitable amendment from time to time any provision which may be reasonably requested by any proposed institutional leasehold mortgagee for the purpose of implementing the mortgagee protection provisions contained in this paragraph 2 and of allowing that leasehold mortgagee reasonable means to protect or preserve the lien of its leasehold mortgage upon the occurrence of a default under the terms of the Lease. Landlord and Tenant each agree to execute and deliver (and to acknowledge, if necessary, for recording purposes) any agreement necessary to effect any such amendment; provided, however, that any such amendment shall not in any way affect the term or rent under the Lease nor otherwise in any material respect adversely affect any rights of Landlord under the Lease.

2.18 Landlord shall, upon request, execute, acknowledge and deliver to each leasehold mortgagee, an agreement prepared at the sole cost and expense of Tenant, in form satisfactory to each leasehold mortgagee, between Landlord, Tenant and the leasehold mortgagee(s), agreeing to all of the provisions hereof.

3. The term “mortgage,” whenever used herein, shall include whatever security instruments are used in the locale of the Premises, such as, without limitation, deeds of trust, security deeds, and conditional deeds, as well as financing statements, security agreements and other documentation required pursuant to the Uniform Commercial Code. The term “mortgage,” whenever used herein, shall also include any instruments required in connection with a sale leaseback transaction. The term “mortgagee” shall include the holder of the secured position under each of the foregoing types of instruments, including but not limited to the beneficiary under a deed of trust, the secured party under a security agreement and the lessor in a sale leaseback transaction.

4. Landlord shall not encumber the Land Parcel without the prior written consent of each leasehold mortgagee, which consent shall be granted or withheld in such leasehold mortgagee’s sole and absolute discretion. Lessor further irrevocably and unconditionally agrees Agenda Item #12.1.

Exhibit E
4839-3028-5526v.2 4900000-001457
that any mortgage, deed of trust or other security instrument now or hereafter encumbering all or any part of the Land Parcel shall automatically be subject and subordinate in all respects to the lien of the Lease (and all amendments, modifications, extensions and renewals hereof) and all existing and future Leasehold Mortgages (and all amendments, modifications, extensions and renewals thereof). Landlord shall, at the request of any Leasehold Mortgagee, cause the holder of each such mortgage, deed of trust and other security instrument to execute and deliver to the requesting Leasehold Mortgagee a written and recordable subordination agreement in form and substance as required by such Leasehold Mortgagee in its sole and absolute discretion.

5. Notwithstanding anything in the Lease to the contrary, following the completion of any foreclosure under any leasehold mortgage, or acceptance of a deed in lieu of foreclosure, (a) neither a breach or default under, nor a failure to comply with, the terms and conditions of any other document, instrument or agreement (whether or not such document, instrument or agreement is incorporated into the Lease or otherwise referenced in the Lease), but exclusive of the Affordable Housing Covenant, shall constitute a breach, default or event of default under the Lease (and no leasehold mortgagee shall, as a condition to curing a default under the Lease, be required to cure a default under the Lease based upon a breach, default or event of default occurring under any such other document, instrument or agreement), (b) no leasehold mortgagee, and no individual or entity acquiring the leasehold estate under the Lease, shall be required to indemnify Landlord for any act or omission of the prior lessee under the Lease (or to cure any failure of any such prior lessee to indemnify the Landlord), (c) no payments relating to the subordinate Carryback Note or subordinate Carryback Deed of Trust shall thereafter be due and payable, (d) in no event shall Landlord have any right to terminate the Lease for any default other than non-payment of rent, and (e) in no event may Landlord or Tenant exercise any right to terminate the Lease in connection with any casualty or condemnation or similar matter without the prior written consent of each leasehold mortgagee (each in its sole and absolute discretion).

In addition, no leasehold mortgagee (or affiliate) shall be required to cure any breach, default or event of default which is based, in whole or in part, upon the failure of lessee to construct or complete any improvements, Tenant shall have the right to contest by appropriate legal proceedings, without cost or expense to Landlord, the validity of any law, ordinance, order, rule, regulation or requirement, provided, however, that, upon request by Landlord, Tenant shall first furnish to Landlord a bond, in form and amount, and issued by a surety company, reasonably satisfactory to Landlord, guaranteeing to Landlord compliance by Tenant with such law, ordinance, order, rule, regulation or requirement, and indemnifying Landlord against any and all liability, loss and damage which Landlord may sustain by reason of Tenant's failure or delay in complying therewith, and provided further, that Landlord shall not be subjected to any risk of criminal liability by reason of any such contest. Landlord shall have the right, but shall be under no obligation, to contest by appropriate legal proceedings, at Landlord's expense, any such law, ordinance, rule, regulation or requirement. Tenant agrees that each leasehold mortgagee or its designee or affiliate (i) shall be automatically released from any liability that arises following the date of the transfer of the Premises to a third-party purchaser and (ii) shall have no liability hereunder in excess of such party's interest in the Leased Premises except in the event of fraud, gross negligence or willful misconduct.

6. Notwithstanding anything to the contrary contained in the Lease, if Tenant deems any tax imposed in connection with the ownership, use or occupancy of the Premises to be excessive or illegal, Tenant may defer payment thereof so long as the validity or the amount Agenda Item #12.1.

Exhibit E
4839-3028-5526v.2 4900000-001457
thereof is contested by Tenant with diligence and in good faith; provided, however, that Tenant, upon request by Landlord, shall furnish to Landlord a bond in form, and issued by a surety company, reasonably satisfactory to Landlord, in an amount equal to the amount of the tax so contested, which bond shall guarantee the payment thereof with interest and penalties thereon; and provided further that if, at any time, payment of the whole of such tax shall become necessary in order to prevent the termination by sale or otherwise of the right of redemption of all or any part of the Premises, or to prevent eviction of Landlord or of Tenant because of nonpayment thereof, Tenant shall pay the same, or cause the same to be paid, in time to prevent such termination of the right of redemption or such eviction. Any contest as to the validity or amount of any tax, whether before or after payment, may be made by Tenant in the name of Landlord or of Tenant, or both, as Tenant shall determine, and Landlord agrees that it will, at Tenant's expense, cooperate with Tenant in any such contest to such extent as Tenant may reasonably request, it being understood, however, that Landlord shall not be subject to any liability for the payment of any costs or expenses in connection with any proceedings brought by Tenant, and Tenant covenants to pay, and to indemnify and save Landlord harmless from, any such costs or expenses. Tenant shall be entitled to any refund of any such tax and penalties or interest thereon which have been paid by Tenant or by Landlord and reimbursed to Landlord by Tenant.

7. In the event Landlord fails to timely pay any tax affecting the Premises which Landlord is obligated to pay, Tenant may pay such tax and deduct the amount of any such payment(s) from the next installment(s) of rent.

8. Landlord shall, at any time upon not less than ten (10) days' prior written notice from Tenant, execute, acknowledge and deliver to Tenant a statement in writing (i) certifying that the Lease is unmodified and in full force and effect (or, if modified, stating the nature of such modification and certifying that the Lease, as so modified, is in full force and effect) and the date to which the rent and other charges are paid in advance, if any, and (ii) acknowledging that there are not, to Landlord's knowledge, any uncured defaults on the part of Tenant, or specifying such defaults if any are claimed. Any such statement may be conclusively relied on by any encumbrancer or prospective encumbrancer of the Lease. Landlord's failure to deliver such statement within such time shall be conclusive upon Landlord (i) that the Lease is in full force and effect without modification except as may be represented by Tenant, and (ii) that there are no uncured defaults in Tenant's performance; or such failure may be considered by Tenant as a default by Landlord under the Lease.

9. The Leasehold shall not merge with the fee interest in all or any portion of the Premises, notwithstanding the ownership of the fee and the Leasehold by the same person(s) or entity(ies), without the written consent of every leasehold mortgagee.

10. All rights herein granted to Tenant shall also apply to every successor and assign of Tenant (including, but not limited to, any sublessee of Tenant). All rights herein granted to any leasehold mortgagee of Tenant shall also apply to any leasehold mortgagee of any successor or assign of Tenant.

11. This document may be executed in counterparts with the same force and effect as if the parties had executed one instrument, and each such counterpart shall constitute an original hereof.

Agenda Item #12.1.

Exhibit E
4839-3028-5526v.2 4900000-001457
[Signature pages follow]
Agenda Item #12.1.

LANDLORD:
_______________________________,
a ______________________________
By: __________________________
Name: __________________________
Title: __________________________
Agenda Item #12.1.

83578.00012\42274935.1
TENANT:
_______________________________,
a ______________________________
By: __________________________
Name: __________________________
Title: __________________________
Agenda Item #12.1.

Hunt’s Grove
Ground Landlord Estoppel Certificate
4867-0856-7995v.1 0113877-000049

GROUND LANDLORD ESTOPPEL CERTIFICATE
_____________________ __, 2024
Umpqua Bank
One Capitol Mall, Suite 610
Sacramento, California 95814
Attention: Gabriel Brown
Re: That certain Ground Lease (Hunt’s Grove Affordable Housing dated as of ________________, 2024 (the “Ground Lease”), by and between HUNT PRADERA II, L.P., a California limited partnership (“Tenant”), as Tenant, and CITY OF ST. HELENA, a municipal corporation (“Landlord”), as Landlord, relating to certain real property located in the County of Napa, State of California, as more particularly described in the Ground Lease
Ladies and Gentlemen:

The undersigned, as Landlord, does hereby state, declare, represent and warrant to Umpqua Bank, an Oregon banking corporation, and its successors and/or assigns (collectively, the “Lender”), as follows:

1. Attached hereto as Exhibit A is a true, correct and complete copy of the abovecaptioned Ground Lease. There are no amendments, supplements, modifications or changes to the Ground Lease. Terms not otherwise defined herein shall have the meanings as ascribed to such terms in the Ground Lease.

2. The undersigned is the Landlord under the Ground Lease. The undersigned has not assigned the Landlord’s interest under the Ground Lease in whole or in part.

3. The Ground Lease is in full force and effect.

4. The current fixed rent under the Lease is $1.00 per annum and has been paid in full in advance on the Commencement Date. The additional payment due from Tenant under Section 4.2 under the Ground Lease has been paid in full on the Commencement Date reflected in the disbursement in full of the Carryback Loan on the Commencement Date. No additional rent or charge (including taxes, maintenance, operating expenses or otherwise) that has been billed to Tenant by Landlord is overdue. There are no provisions for, and Landlord has no rights with respect to, increasing the rent, except as expressly set forth in the Lease.

5. Landlord has reviewed and approved the plans and specifications described on Exhibit B and all approvals required under Section 8.1 relating thereto have been received.

Agenda Item #12.1.

6. No default, or any event or condition which with the passing of time or the giving of notice, or both, would constitute a default on the part of Landlord or, to Landlord’s actual knowledge, Tenant exists under the Ground Lease.

7. Landlord has received no written notice of any prior assignment, hypothecation, mortgage or pledge of Tenant’s interest under the Ground Lease, except in connection with the Loans.

8. Landlord hereby consents to Tenant’s executing, delivering and recording the leasehold mortgage, encumbering the Property, in favor of Lender, as security for its construction loan to Tenant (the “Leasehold Mortgage”). Landlord acknowledges receipt of a copy of the Leasehold Mortgage. Landlord further acknowledges that all conditions precedent to the encumbrance of the Tenant’s leasehold estate under the Ground Lease with the Leasehold Mortgage have been satisfied or waived. Landlord further acknowledges receipt of all notices and certificates required pursuant to the Ground Lease to encumber Tenant’s leasehold interest in the Property with the Leasehold Mortgage and that Lender, upon the recordation of the Leasehold Mortgage, will be a “Lender”, the “Senior Leasehold Mortgagee” and the “senior lender” under the Ground Lease and will be entitled to all of the rights of a “Lender”, “Senior Leasehold Mortgagee” and the “senior lender” under the Ground Lease. This Ground Landlord Estoppel Certificate (this “Estoppel”) shall constitute Landlord’s acknowledgement of the receipt by Landlord of the address for which to provide notices to Lender as required under Exhibit E, Section 2 of the Ground Lease.

9. The address for notice to Lender, for all purposes under the Ground Lease, is:

Umpqua Bank
One Capitol Mall, Suite 610
Sacramento, California 95814
Attention: Gabriel Brown
With a Copy to:

Davis Wright Tremaine LLP
865 S. Figueroa Street, Suite 2400
Los Angeles, California 90017
Attention: Tiffany Switzer, Esq.

The Landlord executes this Estoppel, solely in its capacity as the Landlord under the Ground Lease, for the benefit and protection of Lender, with full knowledge that Lender is relying on this Estoppel in making a loan to Tenant.
[Signature Page Follows]
Agenda Item #12.1.

S-1
Hunt’s Grove
Ground Landlord Estoppel Certificate
4867-0856-7995v.1 0113877-000049
IN WITNESS WHEREOF, the undersigned, as Landlord, has executed this Estoppel as of the date first written above.

LANDLORD:

APPROVED AS TO FORM:
________________________
Ethan Walsh, City Attorney
LANDLORD:

CITY OF ST. HELENA,
a municipal corporation of the State of
California
By:________________________________
Anil Comelo, City Manager
Agenda Item #12.1.

A-1
Hunt’s Grove
Ground Landlord Estoppel Certificate
4867-0856-7995v.1 0113877-000049

EXHIBIT A

GROUND LEASE
[See Attached]
Agenda Item #12.1.

B-1
Hunt’s Grove
Ground Landlord Estoppel Certificate
4867-0856-7995v.1 0113877-000049

EXHIBIT B

APPROVED PLANS AND SPECIFICATIONS
[See Attached]
Agenda Item #12.1.

4883-5063-5449v.3 0113877-000049
WHEN RECORDED MAIL TO:

Umpqua Bank
1333 N California Blvd.

Suite 370
Walnut Creek, CA 94596
Attention: Tiiu Newlin
Space above this line reserved for recorder’s use

SUBORDINATION AGREEMENT
(CITY OF ST. HELENA)
NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN CERTAIN INTERESTS IN

THE PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENT.

THIS SUBORDINATION AGREEMENT (“Agreement”) is entered into this 1st day of June, 2024, by and among (i) UMPQUA BANK, an Oregon state chartered bank, as agent, (in such capacity, together with its successors and assigns and any subsequent holder of the Senior Mortgage, “Senior Mortgagee”) for the CALIFORNIA MUNICIPAL FINANCE AUTHORITY, a joint exercise of powers agency, duly organized and validly existing under the laws of the State of California (“Issuer”), pursuant to that certain Master Agency Agreement (“Master Agency Agreement”), dated as of June 1, 2024, by and between the Senior Mortgagee and Issuer, and (ii) the CITY OF ST. HELENA, a municipal corporation organized and existing under the law of the State of California (“Subordinate Mortgagee”).

RECITALS
A. HUNT PRADERA II, L.P., a California limited partnership (“Borrower”), is the owner or lessee of certain land located in Napa County, California, described in Exhibit A attached hereto (“Land”). The Land is or will be improved with a multifamily rental housing project (the “Improvements”). The Land and the Improvement now or hereafter located thereon shall be referred to herein, collectively, as the “Project”.

B. Pursuant to that certain Master Pledge and Assignment (“Master Pledge”) dated as of even date herewith, by and among Issuer, Senior Mortgagee, and Umpqua Bank, an Oregon state chartered bank, in its capacity as the initial purchaser of the Bonds (in such capacity, “Holder”), Issuer has issued its California Municipal Finance Authority Multifamily Housing Revenue Bonds (Hunt’s Grove and La Pradera) 2024 Series A-1 in the original principal amount of $17,031,631 (the “Series A-1 Bonds”), and its California Municipal Finance Authority Multifamily Housing Revenue Bonds (Hunt’s Grove and La Pradera) 2024 Series A-2 (Taxable) in the original principal amount of ///[$2,847,020]/// (the “Series A-2 Bonds”; and together with the Series A-1 Bonds, the “Bonds”). Holder has agreed to purchase the Bonds, and Issuer will use the proceeds from the sale of the Bonds to fund a construction converting to permanent loan to Borrower in the amount of $17,031,631 (“Senior Tax-Exempt Loan”), and a construction Agenda Item #12.1.

only loan to Borrower in the amount of ///[$2,847,020]/// (the “Senior Taxable Loan”; and together with the Senior Tax-Exempt Loan, the “Senior Loan”). The Senior Loan is made pursuant to that certain Construction and Term Loan Agreement dated as of even date herewith, by and between Senior Mortgagee and Borrower (the “Senior Loan Agreement”). The Senior Loan is evidenced by that certain Promissory Note (Tax-Exempt – Series A-1) dated as of even herewith, made by Borrower in favor of Senior Mortgagee, in the face principal amount of $17,031,631 (the “Senior Tax-Exempt Note”), and that certain Promissory Note (Taxable – Series A-2) dated as of even herewith, made by Borrower in favor of Senior Mortgagee, in the face principal amount of ///[$2,847,020]/// (the “Senior Taxable Note”; and together with the Senior Tax-Exempt Note, the “Senior Note”), and secured by that certain Construction Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing (the “Senior Mortgage”), dated as of even date herewith, by Borrower for the benefit of Senior Mortgagee, encumbering the Land, the Improvements and the related personal property and other property described and defined in the Senior Mortgage as the “Property” (the “Mortgaged Property”), and recorded substantially concurrently herewith in the Official Records of Napa County, California (the “Official Records”). As security for the repayment of the principal and interest owing on the Bonds, Senior Mortgagee has assigned to Holder all of its right, title and interest in, to and under the Senior Loan Documents. All capitalized terms used herein and not otherwise defined in this Agreement, will have the meanings given to those terms in the Senior Loan Agreement.

C. Pursuant to that certain Agreement for Amendment, Assignment, and Assumption of Affordable Housing Loan (Hunt’s Grove Affordable Housing) dated as of _______________, between Subordinate Mortgagee and Borrower (“Subordinate Assignment Agreement”), Borrower is assuming the obligations of Hunt Avenue Associates, a California limited partnership (“Original Borrower”) in connection with a loan previously made by Subordinate Mortgagee to Original Borrower in the principal amount of $762,752 (the “Subordinate Existing City Loan”), including the obligations under that certain promissory note dated on or about June 18, 1991, executed by Original Borrower to Subordinate Mortgagee in the amount of $762,752 (the “Original Subordinate Note”), and under that certain Leasehold Deed of Trust and Assignment of Rents executed by BRIDGE Housing Corporation, a California nonprofit public benefit corporation (“BRIDGE”), for the benefit of Subordinate Mortgagee, which was recorded in the Official Records on June 18, 1991 as Instrument No. ____________ (the “Original Subordinate Mortgage”). Concurrently with the Subordinate Assignment Agreement, Borrower is executing (i) that certain Amended and Restated Promissory Note (Hunt’s Grove Affordable Housing Loan) dated as of ______________, in favor of Subordinate Mortgagee which will amended and restate the Original Subordinate Note in its entirety (the “Subordinate $762,752 Note”), and (ii) that certain Amended and Restated Leasehold Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing dated as of ________________, in favor of Subordinate Mortgagee which will amend and restate the Original Subordinate Mortgage in its entirety, and which will record in the Official Records substantially concurrently herewith (the “Subordinate $762,752 Deed of Trust”).

D. Substantially concurrently herewith, Subordinate Mortgagee is ground leasing a portion of the Property to Borrower pursuant to that certain Ground Lease (Hunt’s Grove Affordable Housing) dated as of ______________ (the “St. Helena Ground Lease”), a memorandum of which is recording in the Official Records substantially concurrently herewith. In connection Agenda Item #12.1.

with the St. Helena Ground Lease, Subordinate Mortgagee is making a carryback loan to Borrower in the amount of $800,000 to be used to pay for a portion of the rent due under the St.

Helena Ground Lease (the “Subordinate Carryback Loan”; and together with the Subordinate Existing Loan, the “Subordinate Loans”). The Subordinate Carryback Loan will be evidenced by that certain Residual Receipts Promissory Note (Hunt’s Grove Lease) dated as of ____________, from Borrower to Subordinate Mortgagee in the face principal amount of $800,000 (the “Subordinate $800,000 Note”; and together with the Subordinate $762,752 Note, the “Subordinate Notes”). Subordinate $800,000 Note will be secured by that certain Leasehold Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing dated as of ____________, from Borrower to Subordinate Mortgagee, which is recording in the Official Records substantially concurrently herewith (“Subordinate $800,000 Deed of Trust”; and together with the Subordinate $762,752 Deed of Trust, the “Subordinate Deeds of Trust”).

E. In connection with the St. Helena Ground Lease and the Subordinate Loans, Borrower and Subordinate Mortgagee have also executed that certain Affordable Housing Covenant (Hunt’s Grove) dated as of ______________, which is recording in the Official Records substantially concurrently herewith (“Affordable Housing Covenant”). As used herein, the “Subordinate Affordable Housing Covenant Provisions” shall mean Sections 3, 8(a)(i),(ii), and (iv), inclusive, 9(b)1. through 3., inclusive.

F. The execution and delivery of this Agreement is a condition precedent to Holder purchasing the Bonds and the Issuer making the Loan, as applicable.

NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which are acknowledged, the parties agree as follows:

1. DEFINITIONS. THE FOLLOWING TERMS, WHEN USED IN THIS

AGREEMENT (INCLUDING, AS APPROPRIATE, WHEN USED IN THE ABOVE RECITALS), WILL HAVE THE FOLLOWING MEANINGS:
(A) “AFFORDABLE HOUSING COVENANT” HAS THE MEANING
ASCRIBED THERETO IN RECITAL E, ABOVE.
(B) “BANKRUPTCY PROCEEDING” MEANS ANY BANKRUPTCY,

REORGANIZATION, INSOLVENCY, COMPOSITION, RESTRUCTURING,

DISSOLUTION, LIQUIDATION, RECEIVERSHIP, ASSIGNMENT FOR THE BENEFIT OF

CREDITORS, OR CUSTODIANSHIP ACTION OR PROCEEDING UNDER ANY FEDERAL

OR STATE LAW WITH RESPECT TO BORROWER, ANY GUARANTOR OF ANY OF

THE SENIOR INDEBTEDNESS, ANY OF THEIR RESPECTIVE PROPERTIES, OR ANY

OF THEIR RESPECTIVE PARTNERS, MEMBERS, OFFICERS, DIRECTORS, OR SHAREHOLDERS.
(C) “BORROWER” MEANS ALL PERSONS OR ENTITIES IDENTIFIED AS “BORROWER” IN THE FIRST RECITAL OF THIS AGREEMENT, TOGETHER WITH

THEIR SUCCESSORS AND ASSIGNS, AND ANY OTHER PERSON OR ENTITY WHO

ACQUIRES TITLE TO THE MORTGAGED PROPERTY AFTER THE DATE OF THIS AGREEMENT; PROVIDED THAT THE TERM “BORROWER” WILL NOT INCLUDE Agenda Item #12.1.

SENIOR MORTGAGEE IF SENIOR MORTGAGEE ACQUIRE TITLES TO THE MORTGAGED PROPERTY.
(D) “CASUALTY” MEANS THE OCCURRENCE OF DAMAGE TO OR

LOSS OF ALL OR ANY PORTION OF THE MORTGAGED PROPERTY BY FIRE OR OTHER CASUALTY.
(E) “CONDEMNATION” MEANS THE PROJECT OR ANY PART

THEREOF IS TAKEN BY CONDEMNATION OR EMINENT DOMAIN OR BY GRANT OF THE MORTGAGED PROPERTY IN LIEU THEREOF.
(F) “ENFORCEMENT ACTION” MEANS ANY OF THE FOLLOWING
ACTIONS TAKEN BY OR AT THE DIRECTION OF SUBORDINATE MORTGAGEE: THE

ACCELERATION OF ALL OR ANY PART OF THE SUBORDINATE INDEBTEDNESS,

THE ADVERTISING OF OR COMMENCEMENT OF ANY FORECLOSURE OR TRUSTEE’S SALE PROCEEDINGS, THE EXERCISE OF ANY POWER OF SALE, THE

ACCEPTANCE OF A DEED OR ASSIGNMENT IN LIEU OF FORECLOSURE OR SALE,

THE COLLECTING OF RENTS, THE OBTAINING OF OR SEEKING OF THE

APPOINTMENT OF A RECEIVER, THE SEEKING OF DEFAULT INTEREST, THE

TAKING OF POSSESSION OR CONTROL OF ANY OF THE MORTGAGED PROPERTY,

THE COMMENCEMENT OF ANY SUIT OR OTHER LEGAL, ADMINISTRATIVE, OR

ARBITRATION PROCEEDING BASED UPON ANY SUBORDINATE NOTE OR ANY

OTHER OF THE SUBORDINATE LOAN DOCUMENTS OR THE AFFORDABLE HOUSING COVENANT, THE EXERCISING OF ANY BANKER’S LIEN OR RIGHTS OF

SET-OFF OR RECOUPMENT, OR THE EXERCISE OF ANY OTHER REMEDIAL ACTION

AGAINST BORROWER, ANY OTHER PARTY LIABLE FOR ANY OF THE

SUBORDINATE INDEBTEDNESS OR OBLIGATED UNDER ANY OF THE
SUBORDINATE LOAN DOCUMENTS, OR THE MORTGAGED PROPERTY.
(G) “ENFORCEMENT ACTION NOTICE” MEANS A WRITTEN

NOTICE FROM SUBORDINATE MORTGAGEE TO SENIOR MORTGAGEE, GIVEN

FOLLOWING ONE OR MORE SUBORDINATE MORTGAGE DEFAULT(S) AND THE

EXPIRATION OF ANY NOTICE OR CURE PERIODS PROVIDED FOR SUCH

SUBORDINATE MORTGAGE DEFAULT(S) IN THE SUBORDINATE LOAN

DOCUMENTS OR THE AFFORDABLE HOUSING COVENANT, SETTING FORTH IN

REASONABLE DETAIL THE SUBORDINATE MORTGAGE DEFAULT(S) AND THE

ENFORCEMENT ACTIONS PROPOSED TO BE TAKEN BY SUBORDINATE MORTGAGEE.
(H) “IMPOSITIONS” MEANS (I) ALL GENERAL AND SPECIFIC REAL

PROPERTY TAXES AND ASSESSMENTS IMPOSED ON THE MORTGAGED PROPERTY; (II) ALL OTHER TAXES AND ASSESSMENTS AND CHARGES OF EVERY

KIND THAT ARE ASSESSED UPON THE MORTGAGED PROPERTY (OR UPON THE

OWNER AND/OR OPERATOR OF THE MORTGAGED PROPERTY) AND THAT CREATE

OR MAY CREATE A LIEN UPON THE MORTGAGED PROPERTY (OR UPON ANY

PERSONAL PROPERTY OR FIXTURES USED IN CONNECTION WITH THE

MORTGAGED PROPERTY), INCLUDING WITHOUT LIMITATION
Agenda Item #12.1.

NONGOVERNMENTAL LEVIES AND ASSESSMENTS PURSUANT TO APPLICABLE COVENANTS, CONDITIONS OR RESTRICTIONS; AND (III) ALL LICENSE FEES,

TAXES AND ASSESSMENTS IMPOSED ON ANY MORTGAGEE (OTHER THAN SUCH MORTGAGEE’S INCOME OR FRANCHISE TAXES) WHICH ARE MEASURED BY OR

BASED UPON (IN WHOLE OR IN PART) THE AMOUNT OF THE OBLIGATIONS SECURED BY THE MORTGAGED PROPERTY.
(I) “LEASES” MEANS, COLLECTIVELY, ALL LEASES OF THE

MORTGAGED PROPERTY OR ANY PORTION THEREOF, ALL LICENSES AND

AGREEMENTS RELATING TO THE MANAGEMENT, LEASING OR OPERATION OF

THE MORTGAGED PROPERTY OR ANY PORTION THEREOF, AND ALL OTHER

AGREEMENTS OF ANY KIND RELATING TO THE USE OR OCCUPANCY OF THE MORTGAGED PROPERTY OR ANY PORTION THEREOF.
(J) “LOSS PROCEEDS” MEANS ALL MONIES RECEIVED OR TO BE

RECEIVED UNDER ANY INSURANCE POLICY, FROM ANY CONDEMNING

AUTHORITY, OR FROM ANY OTHER SOURCE, AS A RESULT OR ANY CONDEMNATION OR CASUALTY.
(K) “NOTICE” IS DEFINED IN SECTION 6(D).
(L) “RECYCLED TAX-EXEMPT LOAN NOTE” HAS THE MEANING
SET FORTH IN SECTION 7 OF THIS AGREEMENT.
(M) “RECYCLED TAX-EXEMPT LOAN” HAS THE MEANING SET
FORTH IN SECTION 7 OF THIS AGREEMENT.
(N) “RENTS” SHALL HAVE THE MEANING SET FORTH IN THE
SENIOR MORTGAGE.
(O) “SENIOR INDEBTEDNESS” MEANS SENIOR LOAN.
(P) “SENIOR LOAN AGREEMENT” HAS THE MEANING ASCRIBED
THERETO IN RECITAL B, ABOVE.
(Q) “SENIOR LOAN DOCUMENTS” MEANS, THE SENIOR LOAN

AGREEMENT, THE SENIOR NOTE, THE SENIOR MORTGAGE AND ALL OTHER “LOAN DOCUMENTS” DESCRIBED IN THE SENIOR LOAN AGREEMENT. (R) “SENIOR MORTGAGE” HAS THE MEANING ASCRIBED
THERETO IN RECITAL B, ABOVE.
(S) “SENIOR MORTGAGE DEFAULT” MEANS ANY ACT, FAILURE

TO ACT, EVENT, CONDITION, OR OCCURRENCE WHICH CONSTITUTES, OR WHICH

WITH THE GIVING OF NOTICE OR THE PASSAGE OF TIME, OR BOTH, WOULD CONSTITUTE, A “DEFAULT” OR AN “EVENT OF DEFAULT” AS DEFINED IN THE SENIOR LOAN AGREEMENT.

Agenda Item #12.1.

(T) “SENIOR MORTGAGEE” HAS THE MEANING ASCRIBED
THERETO IN THE PREAMBLE TO THIS AGREEMENT.
(U) “SENIOR NOTE” HAS THE MEANING ASCRIBED THERETO IN
RECITAL B, ABOVE, AS MAY BE AMENDED FROM TIME TO TIME.
(V) “SERIES A-3 RECYCLED BONDS” HAS THE MEANING SET
FORTH IN SECTION 7 OF THIS AGREEMENT.
(W) “SERIES A-3 RECYCLED BONDS ISSUANCE” HAS THE
MEANING SET FORTH IN SECTION 7 OF THIS AGREEMENT.
(X) “SUBORDINATE INDEBTEDNESS” MEANS ALL SUMS

EVIDENCED OR SECURED OR GUARANTEED BY, OR OTHERWISE DUE AND

PAYABLE TO SUBORDINATE MORTGAGEE PURSUANT TO, THE SUBORDINATE LOAN DOCUMENTS.
(Y) “SUBORDINATE LOAN DOCUMENTS” MEANS THE

SUBORDINATE ASSIGNMENT, THE SUBORDINATE NOTES, THE SUBORDINATE

MORTGAGES, THE SUBORDINATE AFFORDABLE HOUSING COVENANT

PROVISIONS, AND ALL OTHER DOCUMENTS AT ANY TIME EVIDENCING,

SECURING, GUARANTEEING, OR OTHERWISE DELIVERED IN CONNECTION WITH THE SUBORDINATE INDEBTEDNESS, AS THE SAME MAY BE AMENDED.

NOTWITHSTANDING THE FOREGOING, THE ST. HELENA GROUND LEASE AND THE

AFFORDABLE HOUSING COVENANT (WITH THE EXCEPTION OF THE

SUBORDINATE AFFORDABLE HOUSING COVENANT PROVISIONS) SHALL NOT BE “SUBORDINATE LOAN DOCUMENTS” HEREUNDER.
(Z) “SUBORDINATE MORTGAGE DEFAULT” MEANS ANY ACT,

FAILURE TO ACT, EVENT, CONDITION, OR OCCURRENCE WHICH ALLOWS (BUT

FOR ANY CONTRARY PROVISION OF THIS AGREEMENT), OR WHICH WITH THE

GIVING OF NOTICE OR THE PASSAGE OF TIME, OR BOTH, WOULD ALLOW (BUT

FOR ANY CONTRARY PROVISION OF THIS AGREEMENT), SUBORDINATE MORTGAGEES TO TAKE AN ENFORCEMENT ACTION.
(AA) “SUBORDINATE MORTGAGEE” MEANS THE PERSON OR

ENTITY NAMED AS SUCH IN THE FIRST PARAGRAPH OF THIS AGREEMENT AND

ANY OTHER PERSON OR ENTITY WHO BECOMES THE LEGAL HOLDER OF ANY SUBORDINATE NOTE AFTER THE DATE OF THIS AGREEMENT.
(BB) “SUBORDINATE MORTGAGES” HAS THE MEANING ASCRIBED
THERETO IN RECITAL D, ABOVE.
(CC) “SUBORDINATE NOTES” HAS THE MEANING ASCRIBED
THERETO IN RECITAL D, ABOVE.
(DD) “SUPPLEMENTAL DOCUMENTS” HAS THE MEANING SET
FORTH IN SECTION 7 OF THIS AGREEMENT.

Agenda Item #12.1.

2. SUBORDINATION OF SUBORDINATE INDEBTEDNESS.
(A) THE SUBORDINATE INDEBTEDNESS IS AND WILL AT ALL

TIMES CONTINUE TO BE SUBJECT AND SUBORDINATE IN RIGHT OF PAYMENT TO THE PRIOR PAYMENT IN FULL OF THE SENIOR INDEBTEDNESS.
(B) UNTIL THE OCCURRENCE OF A SENIOR MORTGAGE DEFAULT,

SUBORDINATE MORTGAGEE WILL BE ENTITLED TO RETAIN FOR ITS OWN

ACCOUNT ALL PAYMENTS MADE ON ACCOUNT OF THE PRINCIPAL OF AND

INTEREST ON THE SUBORDINATE INDEBTEDNESS IN ACCORDANCE WITH THE REQUIREMENTS OF THE SUBORDINATE LOAN DOCUMENTS; PROVIDED NO SUCH PAYMENT IS MADE MORE THAN 10 DAYS IN ADVANCE OF ITS DUE DATE AND

PROVIDED FURTHER THAT NO SUCH PAYMENT EXCEEDS THE AMOUNT PERMITTED UNDER THE SUBORDINATE LOAN DOCUMENTS. HOWEVER, IMMEDIATELY UPON SUBORDINATE MORTGAGEE’S RECEIPT OF NOTICE OR

ACTUAL KNOWLEDGE OF A SENIOR MORTGAGE DEFAULT, SUBORDINATE

MORTGAGEE WILL NOT ACCEPT ANY PAYMENTS ON ACCOUNT OF THE SUBORDINATE INDEBTEDNESS, AND THE PROVISIONS OF SECTION 2(C) OF THIS AGREEMENT WILL APPLY. SUBORDINATE MORTGAGEE ACKNOWLEDGES THAT A

SUBORDINATE MORTGAGE DEFAULT CONSTITUTES A SENIOR MORTGAGE DEFAULT. ACCORDINGLY, UPON THE SUBORDINATE MORTGAGEE’S

KNOWLEDGE OF A SUBORDINATE MORTGAGE DEFAULT, SUBORDINATE

MORTGAGEE WILL BE DEEMED TO HAVE ACTUAL KNOWLEDGE OF A SENIOR MORTGAGE DEFAULT.
(C) IF (I) SUBORDINATE MORTGAGEE RECEIVES ANY PAYMENT,

PROPERTY, OR ASSET OF ANY KIND OR IN ANY FORM ON ACCOUNT OF THE

SUBORDINATE INDEBTEDNESS (INCLUDING ANY PROCEEDS FROM ANY

ENFORCEMENT ACTION) AFTER A SENIOR MORTGAGE DEFAULT OF WHICH

SUBORDINATE MORTGAGEE HAS ACTUAL KNOWLEDGE (OR IS DEEMED TO HAVE ACTUAL KNOWLEDGE AS PROVIDED IN 2(B) ABOVE) OR HAS BEEN GIVEN

NOTICE, OR (II) SUBORDINATE MORTGAGEE RECEIVES, VOLUNTARILY OR

INVOLUNTARILY, BY OPERATION OF LAW OR OTHERWISE, ANY PAYMENT,

PROPERTY, OR ASSET IN OR IN CONNECTION WITH ANY BANKRUPTCY

PROCEEDING, SUCH PAYMENT, PROPERTY, OR ASSET WILL BE RECEIVED AND HELD IN TRUST FOR SENIOR MORTGAGEE. SUBORDINATE MORTGAGEE WILL

PROMPTLY REMIT, IN KIND AND PROPERLY ENDORSED AS NECESSARY, ALL SUCH PAYMENTS, PROPERTIES, AND ASSETS TO SENIOR MORTGAGEE. SENIOR

MORTGAGEE WILL APPLY ANY PAYMENT, ASSET, OR PROPERTY SO RECEIVED

FROM SUBORDINATE MORTGAGEE TO THE SENIOR INDEBTEDNESS IN SUCH

ORDER, AMOUNT (WITH RESPECT TO ANY ASSET OR PROPERTY OTHER THAN

IMMEDIATELY AVAILABLE FUNDS), AND MANNER AS SENIOR MORTGAGEE DETERMINES IN ITS SOLE AND ABSOLUTE DISCRETION.
(D) WITHOUT LIMITING THE COMPLETE SUBORDINATION OF THE

SUBORDINATE INDEBTEDNESS TO THE PAYMENT IN FULL OF THE SENIOR

INDEBTEDNESS, IN ANY BANKRUPTCY PROCEEDING, UPON ANY PAYMENT OR

DISTRIBUTION (WHETHER IN CASH, PROPERTY, SECURITIES, OR OTHERWISE) TO Agenda Item #12.1.

CREDITORS (I) THE SENIOR INDEBTEDNESS WILL FIRST BE PAID IN FULL IN CASH

BEFORE SUBORDINATE MORTGAGEE WILL BE ENTITLED TO RECEIVE ANY

PAYMENT OR OTHER DISTRIBUTION ON ACCOUNT OF OR IN RESPECT OF THE

SUBORDINATE INDEBTEDNESS, AND (II) UNTIL ALL OF THE SENIOR

INDEBTEDNESS IS PAID IN FULL IN CASH, ANY PAYMENT OR DISTRIBUTION TO

WHICH SUBORDINATE MORTGAGEE WOULD BE ENTITLED BUT FOR THIS

AGREEMENT (WHETHER IN CASH, PROPERTY, OR OTHER ASSETS) WILL BE MADE TO SENIOR MORTGAGEE.
(E) THE SUBORDINATION OF THE SUBORDINATE INDEBTEDNESS

WILL CONTINUE IF ANY PAYMENT UNDER THE SENIOR LOAN DOCUMENTS (WHETHER BY OR ON BEHALF OF BORROWER, AS PROCEEDS OF SECURITY OR

ENFORCEMENT OF ANY RIGHT OF SET-OFF OR OTHERWISE) IS FOR ANY REASON

REPAID OR RETURNED TO BORROWER OR ITS INSOLVENT ESTATE, OR AVOIDED,

SET ASIDE OR REQUIRED TO BE PAID TO BORROWER, A TRUSTEE, RECEIVER OR

OTHER SIMILAR PARTY UNDER ANY BANKRUPTCY, INSOLVENCY, RECEIVERSHIP OR SIMILAR LAW. IN SUCH EVENT, ANY OR ALL OF THE SENIOR INDEBTEDNESS

ORIGINALLY INTENDED TO BE SATISFIED WILL BE DEEMED TO BE REINSTATED

AND OUTSTANDING TO THE EXTENT OF ANY REPAYMENT, RETURN, OR OTHER

ACTION, AS IF SUCH PAYMENT ON ACCOUNT OF THE SENIOR INDEBTEDNESS HAD NOT BEEN MADE.

3. SUBORDINATION OF SUBORDINATE LOAN DOCUMENTS.
(A) EACH OF THE SUBORDINATE LOAN DOCUMENTS IS, AND WILL

AT ALL TIMES REMAIN, SUBJECT AND SUBORDINATE IN ALL RESPECTS TO THE

LIENS, TERMS, COVENANTS, CONDITIONS, OPERATIONS, AND EFFECTS OF EACH OF THE SENIOR LOAN DOCUMENTS. SUBORDINATE MORTGAGEE

INTENTIONALLY AND UNCONDITIONALLY SUBORDINATES THE LIEN OR CHARGE

OF THE SUBORDINATE LOAN DOCUMENTS IN FAVOR OF THE LIEN OR CHARGE

UPON THE MORTGAGED PROPERTY OF THE SENIOR MORTGAGE AND THE OTHER

SENIOR LOAN DOCUMENTS, AND UNDERSTANDS THAT IN RELIANCE UPON AND

IN CONSIDERATION OF THIS SUBORDINATION, SPECIFIC LOANS AND ADVANCES

ARE BEING AND WILL BE MADE AND, AS PART AND PARCEL THEREOF, SPECIFIC

MONETARY AND OTHER OBLIGATIONS ARE BEING AND WILL BE ENTERED INTO

WHICH WOULD NOT BE MADE OR ENTERED INTO BUT FOR SAID RELIANCE UPON THIS SUBORDINATION.
(B) THE SUBORDINATION OF THE SUBORDINATE LOAN

DOCUMENTS AND OF THE SUBORDINATE INDEBTEDNESS WILL APPLY AND

CONTINUE NOTWITHSTANDING (I) THE ACTUAL DATE AND TIME OF EXECUTION,

DELIVERY, RECORDING, FILING OR PERFECTION OF EACH OF THE SENIOR LOAN

DOCUMENTS AND OF EACH OF THE SUBORDINATE LOAN DOCUMENTS, (II) THE

AVAILABILITY OF ANY COLLATERAL TO SENIOR MORTGAGEE, INCLUDING THE

AVAILABILITY OF ANY COLLATERAL OTHER THAN THE MORTGAGED PROPERTY,

AND (III) THE AMENDMENT AND RESTATEMENT OF THE SENIOR NOTE AND THE

SENIOR MORTGAGE ON THE CONVERSION DATE (AS DEFINED IN THE SENIOR LOAN AGREEMENT).

Agenda Item #12.1.

(C) BY REASON OF, AND WITHOUT IN ANY WAY LIMITING, THE

FULL SUBORDINATION OF THE SUBORDINATE INDEBTEDNESS AND THE

SUBORDINATE LOAN DOCUMENTS PROVIDED FOR IN THIS AGREEMENT, ALL

RIGHTS AND CLAIMS OF SUBORDINATE MORTGAGEE UNDER THE SUBORDINATE

LOAN DOCUMENTS IN OR TO ALL OR ANY PORTION OF THE MORTGAGED

PROPERTY ARE EXPRESSLY SUBJECT AND SUBORDINATE IN ALL RESPECTS TO

THE RIGHTS AND CLAIMS OF SENIOR MORTGAGEE UNDER THE SENIOR LOAN DOCUMENTS IN OR TO THE MORTGAGED PROPERTY.
(D) IF SUBORDINATE MORTGAGEE, BY INDEMNIFICATION,

SUBROGATION OR OTHERWISE, ACQUIRES ANY LIEN, ESTATE, RIGHT OR OTHER

INTEREST IN ANY OF THE MORTGAGED PROPERTY, THEN THAT LIEN, ESTATE,

RIGHT OR OTHER INTEREST WILL BE FULLY SUBJECT AND SUBORDINATE TO THE

RECEIPT BY SENIOR MORTGAGEE OF PAYMENT IN FULL OF THE SENIOR

INDEBTEDNESS, AND TO THE SENIOR LOAN DOCUMENTS, TO THE SAME EXTENT

AS THE SUBORDINATE INDEBTEDNESS AND THE SUBORDINATE LOAN DOCUMENTS ARE SUBORDINATE PURSUANT TO THIS AGREEMENT.

4. ADDITIONAL REPRESENTATIONS AND COVENANTS.
(A) SUBORDINATE MORTGAGEE REPRESENTS AND WARRANTS
THAT EACH OF THE FOLLOWING IS TRUE:
(I) SUBORDINATE MORTGAGEE IS NOW THE OWNER AND
HOLDER OF THE SUBORDINATE LOAN DOCUMENTS.
(II) THE SUBORDINATE LOAN DOCUMENTS AND THE
AFFORDABLE HOUSING COVENANT ARE NOW IN FULL FORCE AND EFFECT. (III) THE SUBORDINATE LOAN DOCUMENTS AND THE

AFFORDABLE HOUSING COVENANT HAVE NOT BEEN MODIFIED OR AMENDED EXCEPT AS EXPRESSLY STATED IN THE RECITALS HERETO.
(IV) NO SUBORDINATE MORTGAGE DEFAULT HAS
OCCURRED.
(V) THE CURRENT UNPAID AGGREGATE PRINCIPAL
BALANCE OF THE SUBORDINATE INDEBTEDNESS IS $______________. (VI) NO SCHEDULED MONTHLY PAYMENTS UNDER ANY
SUBORDINATE NOTE HAVE BEEN OR WILL BE PREPAID.
(VII) NONE OF THE RIGHTS OF SUBORDINATE MORTGAGEE

UNDER ANY OF THE SUBORDINATE LOAN DOCUMENTS ARE SUBJECT TO THE

RIGHTS OF ANY THIRD PARTIES, BY WAY OF SUBROGATION, INDEMNIFICATION OR OTHERWISE.
(B) WITHOUT THE PRIOR WRITTEN CONSENT OF SENIOR

MORTGAGEE IN EACH INSTANCE, SUBORDINATE MORTGAGEE WILL NOT DO ANY OF THE FOLLOWING:

Agenda Item #12.1.

(I) AMEND, MODIFY, WAIVE, EXTEND, RENEW, OR

REPLACE ANY PROVISION OF ANY OF THE SUBORDINATE LOAN DOCUMENTS OR THE AFFORDABLE HOUSING COVENANT.
(II) PLEDGE, ASSIGN, TRANSFER, CONVEY, OR SELL ANY

INTEREST IN THE SUBORDINATE INDEBTEDNESS OR ANY OF THE SUBORDINATE LOAN DOCUMENTS OR THE AFFORDABLE HOUSING COVENANT.
(III) ACCEPT ANY PAYMENT ON ACCOUNT OF THE

SUBORDINATE INDEBTEDNESS OTHER THAN A REGULARLY SCHEDULED

PAYMENT OF INTEREST OR PRINCIPAL AND INTEREST MADE NOT EARLIER THAN TEN (10) DAYS PRIOR TO ITS DUE DATE, OR AS EXPRESSLY AUTHORIZED IN SECTION 4(I) BELOW.
(IV) TAKE ANY ACTION WHICH HAS THE EFFECT OF
INCREASING THE SUBORDINATE INDEBTEDNESS.
(V) APPEAR IN, DEFEND OR BRING ANY ACTION TO
PROTECT SUBORDINATE MORTGAGEE’S INTEREST IN THE MORTGAGED PROPERTY.
(VI) TAKE ANY ACTION CONCERNING ENVIRONMENTAL
MATTERS AFFECTING THE MORTGAGED PROPERTY.
(C) SUBORDINATE MORTGAGEE WILL DELIVER TO SENIOR

MORTGAGEE A COPY OF EACH NOTICE RECEIVED OR DELIVERED BY

SUBORDINATE MORTGAGEE PURSUANT TO THE SUBORDINATE LOAN

DOCUMENTS, THE AFFORDABLE HOUSING COVENANT OR IN CONNECTION WITH

THE SUBORDINATE INDEBTEDNESS, SIMULTANEOUSLY WITH SUBORDINATE MORTGAGEE’S DELIVERY OR RECEIPT OF SUCH NOTICE. SENIOR MORTGAGEE

WILL DELIVER TO SUBORDINATE MORTGAGEE IN THE MANNER REQUIRED IN SECTION 5(B) A COPY OF EACH NOTICE OF A SENIOR MORTGAGE DEFAULT DELIVERED TO BORROWER BY SENIOR MORTGAGEE. NEITHER GIVING NOR

FAILING TO GIVE A NOTICE TO SENIOR MORTGAGEE OR SUBORDINATE MORTGAGEE PURSUANT TO THIS SECTION 4(C) WILL AFFECT THE VALIDITY OF

ANY NOTICE GIVEN BY SENIOR MORTGAGEE OR SUBORDINATE MORTGAGEE TO

BORROWER, AS BETWEEN BORROWER AND SUCH OF SENIOR MORTGAGEE OR SUBORDINATE MORTGAGEE AS PROVIDED THE NOTICE TO BORROWER. (D) WITHOUT THE PRIOR WRITTEN CONSENT OF SENIOR

MORTGAGEE IN EACH INSTANCE, SUBORDINATE MORTGAGEE WILL NOT

COMMENCE, OR JOIN WITH ANY OTHER CREDITOR IN COMMENCING, ANY BANKRUPTCY PROCEEDING. IN THE EVENT OF A BANKRUPTCY PROCEEDING,

SUBORDINATE MORTGAGEE WILL NOT VOTE AFFIRMATIVELY IN FAVOR OF ANY

PLAN OF REORGANIZATION OR LIQUIDATION UNLESS SENIOR MORTGAGEE HAS ALSO VOTED AFFIRMATIVELY IN FAVOR OF SUCH PLAN. IN THE EVENT OF ANY

BANKRUPTCY PROCEEDING, SUBORDINATE MORTGAGEE WILL NOT CONTEST Agenda Item #12.1.

THE CONTINUED ACCRUAL OF INTEREST ON THE SENIOR INDEBTEDNESS, IN

ACCORDANCE WITH AND AT THE RATES SPECIFIED IN THE SENIOR LOAN

DOCUMENTS, BOTH FOR PERIODS BEFORE AND FOR PERIODS AFTER THE COMMENCEMENT OF SUCH BANKRUPTCY PROCEEDINGS.
(E) WHENEVER THE SUBORDINATE LOAN DOCUMENTS GIVE

SUBORDINATE MORTGAGEE APPROVAL OR CONSENT RIGHTS WITH RESPECT TO

ANY MATTER, AND A RIGHT OF APPROVAL OR CONSENT WITH REGARD TO THE

SAME OR SUBSTANTIALLY THE SAME MATTER IS ALSO GRANTED TO SENIOR

MORTGAGEE PURSUANT TO THE SENIOR LOAN DOCUMENTS OR OTHERWISE, SENIOR MORTGAGEE’S APPROVAL OR CONSENT OR FAILURE TO APPROVE OR

CONSENT, AS THE CASE MAY BE, WILL BE BINDING ON SUBORDINATE MORTGAGEE. NONE OF THE OTHER PROVISIONS OF THIS SECTION 4 ARE

INTENDED TO BE IN ANY WAY IN LIMITATION OF THE PROVISIONS OF THIS SECTION 4(E).
(F) ALL REQUIREMENTS PERTAINING TO INSURANCE UNDER THE

SUBORDINATE LOAN DOCUMENTS (INCLUDING REQUIREMENTS RELATING TO

AMOUNTS AND TYPES OF COVERAGES, DEDUCTIBLES AND SPECIAL

ENDORSEMENTS) WILL BE DEEMED SATISFIED IF BORROWER COMPLIES WITH

THE INSURANCE REQUIREMENTS UNDER THE SENIOR LOAN DOCUMENTS AND OF SENIOR MORTGAGEE. ALL ORIGINAL POLICIES OF INSURANCE REQUIRED

PURSUANT TO THE SENIOR LOAN DOCUMENTS WILL BE HELD BY SENIOR MORTGAGEE. NOTHING IN THIS SECTION 4(F) WILL PRECLUDE SUBORDINATE

MORTGAGEE FROM REQUIRING THAT IT BE NAMED AS A MORTGAGEE AND LOSS

PAYEE, AS ITS INTEREST MAY APPEAR, UNDER ALL POLICIES OF PROPERTY

DAMAGE INSURANCE MAINTAINED BY BORROWER WITH RESPECT TO THE

MORTGAGED PROPERTY, PROVIDED SUCH ACTION DOES NOT AFFECT THE

PRIORITY OF PAYMENT OF LOSS PROCEEDS, OR THAT SUBORDINATE

MORTGAGEE BE NAMED AS AN ADDITIONAL INSURED UNDER ALL POLICIES OF

LIABILITY INSURANCE MAINTAINED BY BORROWER WITH RESPECT TO THE MORTGAGED PROPERTY.
(G) IN THE EVENT OF A CONDEMNATION OR A CASUALTY, ALL OF THE FOLLOWING PROVISIONS WILL APPLY:
(I) THE RIGHTS OF SUBORDINATE MORTGAGEE (UNDER

THE SUBORDINATE LOAN DOCUMENTS, THE AFFORDABLE HOUSING COVENANT

OR OTHERWISE) TO PARTICIPATE IN ANY PROCEEDING OR ACTION RELATING TO

A CONDEMNATION OR A CASUALTY, OR TO PARTICIPATE OR JOIN IN ANY

SETTLEMENT OF, OR TO ADJUST, ANY CLAIMS RESULTING FROM A

CONDEMNATION OR A CASUALTY, WILL BE AND REMAIN SUBORDINATE IN ALL RESPECTS TO SENIOR MORTGAGEE’S RIGHTS UNDER THE SENIOR LOAN

DOCUMENTS WITH RESPECT THERETO, AND SUBORDINATE MORTGAGEE WILL

BE BOUND BY ANY SETTLEMENT OR ADJUSTMENT OF A CLAIM RESULTING FROM A CONDEMNATION OR A CASUALTY MADE BY SENIOR MORTGAGEE.

Agenda Item #12.1.

(II) ALL LOSS PROCEEDS WILL BE APPLIED EITHER TO

PAYMENT OF THE COSTS AND EXPENSES OF RESTORATION OR TO PAYMENT ON

ACCOUNT OF THE SENIOR INDEBTEDNESS, AS AND IN THE MANNER DETERMINED BY SENIOR MORTGAGEE IN ITS SOLE DISCRETION.
(III) IF SENIOR MORTGAGEE APPLIES OR RELEASES LOSS

PROCEEDS FOR THE PURPOSES OF RESTORATION OF THE MORTGAGED

PROPERTY, THEN SUBORDINATE MORTGAGEE WILL RELEASE FOR SUCH

PURPOSE ALL OF ITS RIGHT, TITLE AND INTEREST, IF ANY, IN AND TO SUCH LOSS PROCEEDS. IF SENIOR MORTGAGEE HOLDS LOSS PROCEEDS, OR MONITORS THE DISBURSEMENT THEREOF, SUBORDINATE MORTGAGEE WILL NOT DO SO.

NOTHING CONTAINED IN THIS AGREEMENT WILL BE DEEMED TO REQUIRE

SENIOR MORTGAGEE TO ACT FOR OR ON BEHALF OF SUBORDINATE

MORTGAGEE IN CONNECTION WITH ANY RESTORATION OR TO HOLD OR

MONITOR ANY LOSS PROCEEDS IN TRUST FOR OR OTHERWISE ON BEHALF OF

SUBORDINATE MORTGAGEE, AND ALL OR ANY LOSS PROCEEDS MAY BE COMMINGLED WITH ANY FUNDS OF SENIOR MORTGAGEE.
(IV) IF SENIOR MORTGAGEE ELECTS TO APPLY LOSS

PROCEEDS TO PAYMENT ON ACCOUNT OF THE SENIOR INDEBTEDNESS, AND IF

THE APPLICATION OF SUCH LOSS PROCEEDS RESULTS IN THE PAYMENT IN FULL

OF THE ENTIRE SENIOR INDEBTEDNESS, ANY REMAINING LOSS PROCEEDS HELD

BY SENIOR MORTGAGEE WILL BE PAID TO SUBORDINATE MORTGAGEE UNLESS ANOTHER PARTY HAS ASSERTED A CLAIM TO THE REMAINING LOSS PROCEEDS. (H) SUBORDINATE MORTGAGEE WILL ENTER INTO ATTORNMENT

AND NON-DISTURBANCE AGREEMENTS WITH ALL TENANTS UNDER

COMMERCIAL OR RETAIL LEASES, IF ANY, TO WHOM SENIOR MORTGAGEE HAS

GRANTED ATTORNMENT AND NON-DISTURBANCE, ON THE SAME TERMS AND CONDITIONS GIVEN BY SENIOR MORTGAGEE.
(I) EXCEPT AS PROVIDED IN THIS SECTION 4(I), AND REGARDLESS

OF ANY CONTRARY PROVISION IN THE SUBORDINATE LOAN DOCUMENTS OR

THE AFFORDABLE HOUSING COVENANT, SUBORDINATE MORTGAGEE WILL NOT

COLLECT PAYMENTS FOR THE PURPOSE OF ESCROWING FOR ANY COST OR

EXPENSE RELATED TO THE MORTGAGED PROPERTY OR FOR ANY PORTION OF THE SUBORDINATE INDEBTEDNESS. HOWEVER, IF SENIOR MORTGAGEE IS NOT

COLLECTING ESCROW PAYMENTS FOR ONE OR MORE IMPOSITIONS,

SUBORDINATE MORTGAGEE MAY COLLECT ESCROW PAYMENTS FOR SUCH IMPOSITIONS; PROVIDED THAT ALL PAYMENTS SO COLLECTED BY

SUBORDINATE MORTGAGEE WILL BE HELD IN TRUST BY SUBORDINATE MORTGAGEE TO BE APPLIED ONLY TO THE PAYMENT OF SUCH IMPOSITIONS. (J) WITHIN 10 DAYS AFTER REQUEST BY SENIOR MORTGAGEE,

SUBORDINATE MORTGAGEE WILL FURNISH SENIOR MORTGAGEE WITH A

STATEMENT, DULY ACKNOWLEDGED AND CERTIFIED SETTING FORTH THE

THEN-CURRENT AMOUNT AND TERMS OF THE SUBORDINATE INDEBTEDNESS, Agenda Item #12.1.

CONFIRMING THAT THERE EXISTS NO DEFAULT UNDER THE S (OR DESCRIBING

ANY DEFAULT THAT DOES EXIST), AND CERTIFYING TO SUCH OTHER

INFORMATION WITH RESPECT TO THE SUBORDINATE INDEBTEDNESS AS SENIOR MORTGAGEE MAY REQUEST.
(K) SENIOR MORTGAGEE MAY AMEND, WAIVE, POSTPONE,

EXTEND, RENEW, REPLACE, REDUCE OR OTHERWISE MODIFY ANY PROVISIONS

OF THE SENIOR LOAN DOCUMENTS WITHOUT THE NECESSITY OF OBTAINING

THE CONSENT OF OR PROVIDING NOTICE TO SUBORDINATE MORTGAGEE, AND WITHOUT AFFECTING ANY OF THE PROVISIONS OF THIS AGREEMENT. (L) NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN,

THIS SUBORDINATION AGREEMENT SHALL NOT ABRIDGE, IMPAIR, OR RESTRAIN THE CITY OF ST. HELENA, ITS OFFICERS, OFFICIALS, EMPLOYEES (COLLECTIVELY, THE “CITY”), AND ANY REGULATORY BODY ACTING ON

BEHALF OF THE CITY, FROM EXERCISING OTHER RIGHTS OR DUTIES AUTHORIZED OR REQUIRED BY LAW. THE CITY SHALL RETAIN ALL RIGHTS TO

ACT IN SUCH REGULATORY CAPACITY AND THIS SUBORDINATION AGREEMENT SHALL NOT BE INTERPRETED OR CONSTRUED TO AFFECT THE CITY’S REGULATORY AUTHORITY OVER BORROWER OR THE PROJECT.

5. DEFAULT UNDER LOAN DOCUMENTS.
(A) FOR A PERIOD OF 90 DAYS FOLLOWING DELIVERY TO SENIOR

MORTGAGEE OF AN ENFORCEMENT ACTION NOTICE, SENIOR MORTGAGEE WILL

HAVE THE RIGHT, BUT NOT THE OBLIGATION, TO CURE ANY SUBORDINATE

MORTGAGE DEFAULT, PROVIDED THAT IF SUCH SUBORDINATE MORTGAGE

DEFAULT IS A NON-MONETARY DEFAULT AND IS NOT CAPABLE OF BEING CURED WITHIN SUCH 90-DAY PERIOD AND SENIOR MORTGAGEE HAS

COMMENCED AND IS DILIGENTLY PURSUING SUCH CURE TO COMPLETION,

SENIOR MORTGAGEE WILL HAVE SUCH ADDITIONAL PERIOD OF TIME AS MAY

BE REQUIRED TO CURE SUCH SUBORDINATE MORTGAGE DEFAULT OR UNTIL

SUCH TIME, IF EVER, AS SENIOR MORTGAGEE (I) DISCONTINUES ITS PURSUIT OF

ANY CURE AND/OR (II) DELIVERS TO SUBORDINATE MORTGAGEE SENIOR MORTGAGEE’S WRITTEN CONSENT TO THE ENFORCEMENT ACTION DESCRIBED IN THE ENFORCEMENT ACTION NOTICE. SENIOR MORTGAGEE WILL NOT BE

SUBROGATED TO THE RIGHTS OF SUBORDINATE MORTGAGEE UNDER THE

SUBORDINATE LOAN DOCUMENTS BY REASON OF SENIOR MORTGAGEE HAVING CURED ANY SUBORDINATE MORTGAGE DEFAULT. HOWEVER, SUBORDINATE

MORTGAGEE ACKNOWLEDGES THAT ALL AMOUNTS ADVANCED OR EXPENDED

BY SENIOR MORTGAGEE IN ACCORDANCE WITH THE SENIOR LOAN DOCUMENTS

OR TO CURE A SUBORDINATE MORTGAGE DEFAULT WILL BE ADDED TO AND

BECOME A PART OF THE SENIOR INDEBTEDNESS AND WILL BE SECURED BY THE LIEN OF THE SENIOR MORTGAGE.
(B) SENIOR MORTGAGEE SHALL NOT COMPLETE A FORECLOSURE

SALE OF THE MORTGAGED PROPERTY OR RECORD A DEED-IN-LIEU OF

FORECLOSURE WITH RESPECT TO THE MORTGAGED PROPERTY (EACH, A Agenda Item #12.1.

“FORECLOSURE REMEDY”) UNLESS SUBORDINATE MORTGAGEE HAS FIRST BEEN GIVEN FORTY-FIVE (45) DAYS WRITTEN NOTICE OF THE SENIOR

MORTGAGE DEFAULT GIVING SENIOR MORTGAGEE THE RIGHT TO COMPLETE

SUCH FORECLOSURE REMEDY, AND UNLESS SUBORDINATE MORTGAGEE HAS FAILED, WITHIN SUCH FORTY-FIVE (45) DAY PERIOD, TO CURE SUCH EVENT(S) OF DEFAULT; PROVIDED, HOWEVER, THAT SENIOR MORTGAGEE SHALL BE ENTITLED DURING SUCH FORTY-FIVE (45) DAY PERIOD TO CONTINUE TO PURSUE

ALL OF ITS RIGHTS AND REMEDIES UNDER THE SENIOR LOAN DOCUMENTS,

INCLUDING, BUT NOT LIMITED TO, ACCELERATION OF THE SENIOR LOAN,

COMMENCEMENT AND PURSUIT OF A JUDICIAL OR NON-JUDICIAL FORECLOSURE (BUT NOT COMPLETION OF THE FORECLOSURE SALE), APPOINTMENT OF A

RECEIVER, ENFORCEMENT OF ANY GUARANTY, AND/OR ENFORCEMENT OF ANY OTHER SENIOR LOAN DOCUMENT. IN THE EVENT SENIOR MORTGAGEE HAS

ACCELERATED THE SENIOR LOAN AND SUBORDINATE MORTGAGEE CURES ALL EVENTS OF DEFAULT GIVING RISE TO SUCH ACCELERATION WITHIN THE FORTYFIVE (45) DAY CURE PERIOD DESCRIBED ABOVE, SUCH CURE SHALL HAVE THE EFFECT OF DE-ACCELERATING THE SENIOR LOAN; PROVIDED, HOWEVER, THAT

SUCH DE-ACCELERATION SHALL NOT WAIVE OR LIMIT ANY OF SENIOR MORTGAGEE’S RIGHTS TO ACCELERATE THE SENIOR LOAN OR EXERCISE ANY

OTHER REMEDIES UNDER THE SENIOR LOAN DOCUMENTS AS TO ANY FUTURE OR CONTINUING EVENT(S) OF DEFAULT. IT IS THE EXPRESS INTENT OF THE

PARTIES HEREUNDER THAT SENIOR MORTGAGEE SHALL HAVE THE RIGHT TO

PURSUE ALL RIGHTS AND REMEDIES EXCEPT COMPLETION OF A FORECLOSURE

REMEDY WITHOUT LIABILITY TO SUBORDINATE MORTGAGEE FOR FAILURE TO

PROVIDE TIMELY NOTICE TO SUBORDINATE MORTGAGEE REQUIRED HEREUNDER, AND THAT SENIOR MORTGAGEE’S LIABILITY HEREUNDER SHALL

BE EXPRESSLY LIMITED TO ACTUAL DAMAGES TO SUBORDINATE MORTGAGEE DIRECTLY CAUSED BY SENIOR MORTGAGEE’S COMPLETION OF A FORECLOSURE

REMEDY WITHOUT SUBORDINATE MORTGAGEE RECEIVING THE NOTICE AND OPPORTUNITY TO CURE DESCRIBED ABOVE. SENIOR MORTGAGEE SHALL GIVE

SUBORDINATE MORTGAGEE ANY REQUIRED NOTICE DESCRIBED ABOVE AT THE ADDRESS SET FORTH BELOW IN SECTION 6(G).

Subordinate Mortgagee will not be subrogated to the rights of Senior Mortgagee under the Senior Loan Documents by reason of Subordinate Mortgagee having cured any Senior Mortgage Default.

However, Senior Mortgagee acknowledges that all amounts paid by Subordinate Mortgagee to Senior Mortgagee to cure a Senior Mortgage Default will be deemed to have been advanced by Subordinate Mortgagee pursuant to, and will be secured by the lien of, the Subordinate Mortgage.

Notwithstanding anything in this Section 5(b) to the contrary, Subordinate Mortgagee’s right to cure any Senior Mortgage Default will terminate immediately upon the occurrence of any Bankruptcy Proceeding.
(C) IN THE EVENT OF A SUBORDINATE MORTGAGE DEFAULT,

SUBORDINATE MORTGAGEE WILL NOT COMMENCE ANY ENFORCEMENT ACTION UNTIL 90 DAYS AFTER SUBORDINATE MORTGAGEE HAS DELIVERED TO SENIOR

MORTGAGEE AN ENFORCEMENT ACTION NOTICE WITH RESPECT TO SUCH ENFORCEMENT ACTION. SUBORDINATE MORTGAGEE MAY NOT COMMENCE Agenda Item #12.1.

ANY OTHER ENFORCEMENT ACTION, INCLUDING ANY FORECLOSURE ACTION

UNDER THE SUBORDINATE LOAN DOCUMENTS, UNTIL THE EARLIER OF (I) THE EXPIRATION OF SUCH 90-DAY PERIOD OR SUCH LONGER PERIOD AS PROVIDED IN SECTION 5(A), OR (II) THE DELIVERY BY SENIOR MORTGAGEE TO SUBORDINATE MORTGAGEE OF SENIOR MORTGAGEE’S WRITTEN CONSENT TO SUCH ENFORCEMENT ACTION BY SUBORDINATE MORTGAGEE. SUBORDINATE

MORTGAGEE ACKNOWLEDGES THAT SENIOR MORTGAGEE MAY GRANT OR REFUSE CONSENT TO SUBORDINATE MORTGAGEE’S ENFORCEMENT ACTION IN SENIOR MORTGAGEE’S SOLE AND ABSOLUTE DISCRETION. AT THE EXPIRATION OF SUCH 90-DAY PERIOD OR SUCH LONGER PERIOD AS PROVIDED IN SECTION 5(A) AND, SUBJECT TO SENIOR MORTGAGEE’S RIGHT TO CURE SET FORTH IN SECTION 5(A), SUBORDINATE MORTGAGEE MAY COMMENCE ANY
ENFORCEMENT ACTION. ANY ENFORCEMENT ACTION ON THE PART OF

SUBORDINATE MORTGAGEE WILL BE SUBJECT TO THE PROVISIONS OF THIS AGREEMENT. SUBORDINATE MORTGAGEE ACKNOWLEDGES THAT THE
PROVISIONS OF THIS SECTION 5(C) ARE FAIR AND REASONABLE UNDER THE

CIRCUMSTANCES, THAT SUBORDINATE MORTGAGEE HAS RECEIVED A

SUBSTANTIAL BENEFIT FROM SENIOR MORTGAGEE HAVING GRANTED ITS

CONSENT TO THE SUBORDINATE MORTGAGE, AND THAT SENIOR MORTGAGEE

WOULD NOT HAVE GRANTED SUCH CONSENT WITHOUT THE INCLUSION OF THESE PROVISIONS IN THIS AGREEMENT.
(D) SENIOR MORTGAGEE MAY PURSUE ALL RIGHTS AND

REMEDIES AVAILABLE TO IT UNDER THE SENIOR LOAN DOCUMENTS, AT LAW,

OR IN EQUITY, REGARDLESS OF ANY ENFORCEMENT ACTION NOTICE OR ENFORCEMENT ACTION BY SUBORDINATE MORTGAGEE. NO ACTION OR FAILURE

TO ACT ON THE PART OF SENIOR MORTGAGEE IN THE EVENT OF A

SUBORDINATE MORTGAGE DEFAULT OR COMMENCEMENT OF AN

ENFORCEMENT ACTION WILL CONSTITUTE A WAIVER ON THE PART OF SENIOR

MORTGAGEE OF ANY PROVISION OF THE SENIOR LOAN DOCUMENTS OR THIS AGREEMENT.
(E) IF THE ENFORCEMENT ACTION TAKEN BY SUBORDINATE

MORTGAGEE IS THE APPOINTMENT OF A RECEIVER FOR ANY OF THE

MORTGAGED PROPERTY, ALL OF THE RENTS, ISSUES, PROFITS AND PROCEEDS

COLLECTED BY THE RECEIVER WILL BE PAID AND APPLIED BY THE RECEIVER

SOLELY TO AND FOR THE BENEFIT OF SENIOR MORTGAGEE UNTIL THE SENIOR INDEBTEDNESS WILL HAVE BEEN PAID IN FULL.
(F) SUBORDINATE MORTGAGEE CONSENTS TO AND AUTHORIZES

THE RELEASE BY SENIOR MORTGAGEE OF ALL OR ANY PORTION OF THE

MORTGAGED PROPERTY FROM THE LIEN, OPERATION, AND EFFECT OF THE SENIOR LOAN DOCUMENTS. SUBORDINATE MORTGAGEE WAIVES TO THE

FULLEST EXTENT PERMITTED BY LAW, ALL EQUITABLE OR OTHER RIGHTS IT

MAY HAVE (I) IN CONNECTION WITH THE RELEASE OF ALL OR ANY PORTION OF

THE MORTGAGED PROPERTY, (II) TO REQUIRE THE SEPARATE SALE OF ANY

PORTION OF THE MORTGAGED PROPERTY, (III) TO REQUIRE SENIOR MORTGAGEE Agenda Item #12.1.

TO EXHAUST ITS REMEDIES AGAINST ALL OR ANY PORTION OF THE

MORTGAGED PROPERTY OR ANY COMBINATION OF PORTIONS OF THE

MORTGAGED PROPERTY OR ANY OTHER COLLATERAL FOR THE SENIOR

INDEBTEDNESS, OR (IV) TO REQUIRE SENIOR MORTGAGEE TO PROCEED AGAINST

BORROWER, ANY OTHER PARTY THAT MAY BE LIABLE FOR ANY OF THE SENIOR

INDEBTEDNESS (INCLUDING ANY GENERAL PARTNER OF BORROWER IF

BORROWER IS A PARTNERSHIP), ALL OR ANY PORTION OF THE MORTGAGED

PROPERTY OR COMBINATION OF PORTIONS OF THE MORTGAGED PROPERTY OR

ANY OTHER COLLATERAL, BEFORE PROCEEDING AGAINST ALL OR SUCH

PORTIONS OR COMBINATION OF PORTIONS OF THE MORTGAGED PROPERTY AS SENIOR MORTGAGEE DETERMINES. SUBORDINATE MORTGAGEE WAIVES TO THE

FULLEST EXTENT PERMITTED BY LAW ANY AND ALL BENEFITS UNDER CALIFORNIA CIVIL CODE SECTIONS 2845, 2849 AND 2850. SUBORDINATE

MORTGAGEE CONSENTS TO AND AUTHORIZES, AT THE OPTION OF SENIOR

MORTGAGEE, THE SALE, EITHER SEPARATELY OR TOGETHER, OF ALL OR ANY PORTION OF THE MORTGAGED PROPERTY. SUBORDINATE MORTGAGEE

ACKNOWLEDGES THAT WITHOUT NOTICE TO SUBORDINATE MORTGAGEE AND

WITHOUT AFFECTING ANY OF THE PROVISIONS OF THIS AGREEMENT, SENIOR

MORTGAGEE MAY (I) EXTEND THE TIME FOR OR WAIVE ANY PAYMENT OR PERFORMANCE UNDER THE SENIOR LOAN DOCUMENTS; (II) MODIFY OR AMEND IN ANY RESPECT ANY PROVISION OF THE SENIOR LOAN DOCUMENTS; AND (III)

MODIFY, EXCHANGE, SURRENDER, RELEASE, AND OTHERWISE DEAL WITH ANY ADDITIONAL COLLATERAL FOR THE SENIOR INDEBTEDNESS.
(G) IF ANY PARTY OTHER THAN BORROWER (INCLUDING SENIOR

MORTGAGEE) ACQUIRES TITLE TO ANY OF THE MORTGAGED PROPERTY PURSUANT TO A FORECLOSURE OF, OR TRUSTEE’S SALE OR OTHER EXERCISE OF

ANY POWER OF SALE UNDER, THE SENIOR MORTGAGE CONDUCTED IN

ACCORDANCE WITH APPLICABLE LAW, THE LIEN, OPERATION, AND EFFECT OF

THE SUBORDINATE MORTGAGES AND OTHER SUBORDINATE LOAN DOCUMENTS

AUTOMATICALLY WILL TERMINATE WITH RESPECT TO SUCH MORTGAGED PROPERTY.

6. SPECIAL PROVISIONS REGARDING AFFORDABLE HOUSING COVENANT (A) TRANSFERS. NOTWITHSTANDING ANYTHING SET FORTH IN THE

AFFORDABLE HOUSING COVENANT TO THE CONTRARY, NOTHING IN THE

AFFORDABLE HOUSING COVENANT SHALL BE DEEMED TO RESTRICT OR LIMIT,

OR REQUIRE THE CONSENT OF SUBORDINATE MORTGAGEE TO ANY

FORECLOSURE OR DEED IN LIEU OF FORECLOSURE OF THE SENIOR MORTGAGE

BY SENIOR MORTGAGEE OR ITS SUCCESSOR, ASSIGNS, OR NOMINEE (A “FORECLOSURE ACTION”), OR AN SUBSEQUENT TRANSFER AFTER ANY SUCH FORECLOSURE ACTION.
(B) COMPLIANCE WITH SUBORDINATE LOAN DOCUMENTS.

NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH IN THE

AFFORDABLE HOUSING COVENANT, FROM AND AFTER ANY FORECLOSURE

ACTION, NEITHER SENIOR MORTGAGEE NOR ANY SUCCESSOR IN INTEREST TO Agenda Item #12.1.

THE PROPERTY FOLLOWING ANY FORECLOSURE ACTION (COLLECTIVELY, THE “SUCCESSOR OWNER”), SHALL BE OBLIGATED TO COMPLY WITH THE TERMS OF

ANY SUBORDINATE LOAN DOCUMENT, AND NEITHER SENIOR MORTGAGEE NOR

ANY SUCCESSOR OWNER SHALL HAVE ANY OBLIGATION TO REPAY THE SUBORDINATE LOAN.

7. RECYCLED BONDS AND SUBORDINATE LENDER CONSENT.
(A) SUBORDINATE MORTGAGEE ACKNOWLEDGES AND AGREES THAT

BORROWER, SUBORDINATE MORTGAGEE AND SENIOR MORTGAGEE ANTICIPATE

THAT THERE MAY BE AN ISSUANCE OF ADDITIONAL RECYCLED TAX-EXEMPT BONDS IN THE APPROXIMATE AMOUNT OF ///[$2,847,020]/// FOLLOWING THE DATE HEREOF PURSUANT TO AND IN ACCORDANCE WITH SECTION 2.1 OF THE MASTER PLEDGE (THE “SERIES A-3 RECYCLED BONDS”). IN THE EVENT THAT (I) SUCH SERIES A-3 RECYCLED BONDS BECOME AVAILABLE, (II) BORROWER REQUESTS

AN ADDITIONAL TAX-EXEMPT LOAN FROM ISSUER IN THE AMOUNT OF ANY SUCH SERIES A-3 RECYCLED BONDS, AND (III) SENIOR MORTGAGEE AGREES TO PURCHASE THE SERIES A-3 RECYCLED BONDS TO PROVIDE FUNDING FOR AGENT,

ON BEHALF OF ISSUER, TO MAKE SUCH ADDITIONAL TAX-EXEMPT LOAN (SUBJECT TO SUCH CONDITIONS AS SENIOR MORTGAGEE SHALL DETERMINE IN ITS SOLE AND ABSOLUTE DISCRETION) (THE “RECYCLED TAX-EXEMPT LOAN”)

AND (IV) ISSUER AGREES TO MAKE SUCH RECYCLED TAX-EXEMPT LOAN, THEN ISSUER SHALL ISSUE THE SERIES A-3 RECYCLED BONDS, SENIOR MORTGAGEE

SHALL PURCHASE THE RECYCLED TAX-EXEMPT BONDS, AND BORROWER SHALL

EXECUTE AN ADDITIONAL PROMISSORY NOTE IN FAVOR OF AGENT (THE “RECYCLED TAX-EXEMPT LOAN NOTE”) EVIDENCING THE RECYCLED TAXEXEMPT LOAN. UPON THE EXECUTION AND DELIVERY OF THE SERIES A-3

RECYCLED BONDS AND THE RECYCLED TAX-EXEMPT LOAN NOTE, AND THE

CLOSING OF THE RECYCLED TAX-EXEMPT LOAN, THE RESPECTIVE MAXIMUM PRINCIPAL AMOUNTS THEREOF SHALL BE DEEMED ADDED TO THE SENIOR TAXEXEMPT LOAN, AND AN EQUAL PORTION OF THE THERETOFORE UN-ADVANCED

MAXIMUM PRINCIPAL AMOUNT OF THE SENIOR TAXABLE NOTE AND SENIOR

TAXABLE LOAN SHALL BE UN-ADVANCEABLE AND DEEMED CANCELED AND

REMOVED FROM THE SENIOR LOAN, AND THE SENIOR TAXABLE NOTE SHALL BE

DEEMED CANCELLED AND TERMINATED AND OF NO FURTHER FORCE AND EFFECT. FOR PURPOSES OF CLARIFICATION, FOLLOWING THE CLOSING OF THE SERIES A-3 RECYCLED BONDS ISSUANCE (AS DEFINED IN THE IMMEDIATELY

SUCCEEDING SENTENCE), THE MAXIMUM PRINCIPAL AMOUNT OF THE

RECYCLED PROJECT LOAN NOTE PLUS THE MAXIMUM PRINCIPAL AMOUNT OF

THE SENIOR TAX-EXEMPT NOTE SHALL EQUAL THE MAXIMUM PRINCIPAL AMOUNT OF THE SENIOR LOAN. THE FOREGOING TRANSACTIONS DESCRIBED IN THIS SECTION 7(A) ARE HEREINAFTER REFERRED TO COLLECTIVELY AS THE “SERIES A-3 RECYCLED BONDS ISSUANCE”.
(B) IN THE EVENT THAT THE SERIES A-3 RECYCLED BONDS ISSUANCE OCCURS AS CONTEMPLATED HEREIN AND IN SECTION 2.1 OF THE MASTER PLEDGE, SUBORDINATE MORTGAGEE HEREBY CONSENTS TO THE SERIES A-3

RECYCLED BOND ISSUANCE, THE MAKING OF THE RECYCLED TAX-EXEMPT Agenda Item #12.1.

LOAN, THE ISSUANCE OF THE SERIES A-3 RECYCLED BONDS, THE EXECUTION OF

THE RECYCLED TAX-EXEMPT NOTE, AND ANY AMENDMENTS, MODIFICATIONS

AND/OR RESTATEMENTS OF THE SENIOR LOAN DOCUMENTS, AND SUCH OTHER

DOCUMENTS OR INSTRUMENTS REASONABLY REQUIRED BY SENIOR
MORTGAGEE, TO EVIDENCE THE SERIES A-3 RECYCLED BONDS ISSUANCE (THE "SUPPLEMENTAL DOCUMENTS"), AND ACKNOWLEDGE AND AGREE THAT

NEITHER THE EXECUTION OF SUCH SUPPLEMENTAL DOCUMENTS OR THE SERIES A-3 RECYCLED BONDS ISSUANCE SHALL ABROGATE OR OTHERWISE AFFECT THE AGREEMENTS OF SUBORDINATE MORTGAGEE SET FORTH HEREIN.

8. MISCELLANEOUS PROVISIONS.
(A) THIS AGREEMENT SHALL BE THE WHOLE AND ONLY

AGREEMENT WITH REGARD TO THE SUBORDINATION OF THE LIEN OR CHARGE

OF THE SUBORDINATE LOAN DOCUMENTS TO THE LIEN OR CHARGE OF THE

SENIOR LOAN DOCUMENTS AND SHALL SUPERSEDE AND CANCEL, BUT ONLY

INSOFAR AS WOULD AFFECT THE PRIORITY BETWEEN SAID DOCUMENTS, ANY

PRIOR AGREEMENTS AS TO SUCH SUBORDINATION, INCLUDING, BUT NOT

LIMITED TO, THOSE PROVISIONS, IF ANY, CONTAINED IN THE SUBORDINATE

LOAN DOCUMENTS WHICH PROVIDE FOR THE SUBORDINATION OF THE LIEN OR

CHARGE THEREOF TO ANOTHER DEED OR DEEDS OF TRUST OR TO ANOTHER MORTGAGE OR MORTGAGES.
(B) IN MAKING DISBURSEMENTS PURSUANT TO ANY OF THE

SENIOR LOAN DOCUMENTS, SENIOR MORTGAGEE IS UNDER NO OBLIGATION OR

DUTY TO, NOR HAS SENIOR MORTGAGEE REPRESENTED THAT IT WILL, SEE TO

THE APPLICATION OF SUCH PROCEEDS BY THE PERSON OR PERSONS TO WHOM

SENIOR MORTGAGEE DISBURSES SUCH PROCEEDS, AND ANY APPLICATION OR

USE OF SUCH PROCEEDS FOR PURPOSES OTHER THAN THOSE PROVIDED FOR IN

SUCH SENIOR LOAN DOCUMENT(S) SHALL NOT DEFEAT THE SUBORDINATION HEREIN MADE IN WHOLE OR IN PART.
(C) SUBORDINATE MORTGAGEE HAS RECEIVED, AND BEEN

AFFORDED A REASONABLE OPPORTUNITY TO REVIEW, THE SENIOR LOAN DOCUMENTS. NO DECISION BY SUBORDINATE MORTGAGEE TO REVIEW, OR NOT

TO REVIEW, THE SENIOR LOAN DOCUMENTS, INCLUDING BUT NOT LIMITED TO

THE DISBURSEMENT PROVISIONS CONTAINED THEREIN, SHALL MODIFY, IMPAIR OR OTHERWISE LIMIT OR AFFECT THE ENFORCEABILITY OF THIS AGREEMENT. (D) IF THERE IS ANY CONFLICT OR INCONSISTENCY BETWEEN

THE TERMS OF THE SUBORDINATE LOAN DOCUMENTS, THE AFFORDABLE

HOUSING COVENANT AND THE TERMS OF THIS AGREEMENT, THEN THE TERMS OF THIS AGREEMENT WILL CONTROL.
(E) THIS AGREEMENT WILL BE BINDING UPON AND WILL INURE

TO THE BENEFIT OF THE RESPECTIVE LEGAL SUCCESSORS AND PERMITTED ASSIGNS OF THE PARTIES TO THIS AGREEMENT. NO OTHER PARTY WILL BE ENTITLED TO ANY BENEFITS UNDER THIS AGREEMENT, WHETHER AS A THIRDPARTY BENEFICIARY OR OTHERWISE.

Agenda Item #12.1.

(F) THIS AGREEMENT DOES NOT CONSTITUTE AN APPROVAL BY
SENIOR MORTGAGEE OF THE TERMS OF THE SUBORDINATE LOAN DOCUMENTS. (G) EACH NOTICE, REQUEST, DEMAND, CONSENT, APPROVAL OR
OTHER COMMUNICATION (COLLECTIVELY, “NOTICES”, AND SINGLY, A “NOTICE”) WHICH IS REQUIRED OR PERMITTED TO BE GIVEN PURSUANT TO THIS

AGREEMENT WILL BE IN WRITING AND WILL BE DEEMED TO HAVE BEEN DULY

AND SUFFICIENTLY GIVEN IF (I) PERSONALLY DELIVERED WITH PROOF OF

DELIVERY (ANY NOTICE SO DELIVERED WILL BE DEEMED TO HAVE BEEN

RECEIVED AT THE TIME SO DELIVERED), OR (II) SENT BY A NATIONAL

OVERNIGHT COURIER SERVICE (SUCH AS FEDEX) DESIGNATING EARLIEST

AVAILABLE DELIVERY (ANY NOTICE SO DELIVERED WILL BE DEEMED TO HAVE

BEEN RECEIVED ON THE NEXT BUSINESS DAY FOLLOWING RECEIPT BY THE

COURIER), OR (III) SENT BY UNITED STATES REGISTERED OR CERTIFIED MAIL,

RETURN RECEIPT REQUESTED, POSTAGE PREPAID, AT A POST OFFICE

REGULARLY MAINTAINED BY THE UNITED STATES POSTAL SERVICE (ANY

NOTICE SO SENT WILL BE DEEMED TO HAVE BEEN RECEIVED ON THE DATE OF

DELIVERY AS CONFIRMED BY THE RETURN RECEIPT), ADDRESSED TO THE RESPECTIVE PARTIES AS FOLLOWS:
(I) NOTICES INTENDED FOR SENIOR MORTGAGEE WILL BE
ADDRESSED TO:

Umpqua Bank
One Capitol Mall, Suite 610
Sacramento, California 95814
Attention: Gabriel Brown
With a copy to:

Umpqua Bank
1333 N California Blvd.

Suite 370
Walnut Creek, CA 94596
Attention: Tiiu Newlin
(II) NOTICES INTENDED FOR SUBORDINATE MORTGAGEE
WILL BE ADDRESSED TO:

City of S. Helena
1088 Main Street
St. Helena, California 94574
Attention: City Manager
Agenda Item #12.1.

(III) NOTICES INTENDED FOR BORROWER WILL BE
ADDRESSED TO:

Hunt Pradera II, L.P.
c/o BRIDGE Housing Corporation
600 California Street, Suite 900
San Francisco, California 94108
Attention: Executive Director
With a copy to:

Napa Valley Community Housing
150 Camino Dorado
Napa, California 94558
Attention: Erica Sklar
Any party, by Notice given pursuant to this Section, may change the person or persons and/or address or addresses, or designate an additional person or persons or an additional address or addresses, for its Notices, but Notice of a change of address will only be effective upon receipt. Neither party will refuse or reject delivery of any Notice given in accordance with this Section. (H) NOTHING IN THIS AGREEMENT OR IN ANY OF THE SENIOR

LOAN DOCUMENTS OR SUBORDINATE LOAN DOCUMENTS WILL BE DEEMED TO

CONSTITUTE SENIOR MORTGAGEE AS A JOINT VENTURER OR PARTNER OF SUBORDINATE MORTGAGEE.
(I) UPON NOTICE FROM SENIOR MORTGAGEE, SUBORDINATE

MORTGAGEE WILL EXECUTE AND DELIVER SUCH ADDITIONAL INSTRUMENTS

AND DOCUMENTS, AND WILL TAKE SUCH ACTIONS, AS ARE REQUIRED BY

SENIOR MORTGAGEE IN ORDER TO FURTHER EVIDENCE OR IMPLEMENT THE PROVISIONS AND INTENT OF THIS AGREEMENT.
(J) THIS AGREEMENT WILL BE GOVERNED BY THE LAWS OF THE
STATE IN WHICH THE LAND IS LOCATED.
(K) IF ANY ONE OR MORE OF THE PROVISIONS CONTAINED IN

THIS AGREEMENT, OR ANY APPLICATION OF ANY SUCH PROVISIONS, IS INVALID,

ILLEGAL, OR UNENFORCEABLE IN ANY RESPECT, THE VALIDITY, LEGALITY,

ENFORCEABILITY, AND APPLICATION OF THE REMAINING PROVISIONS

CONTAINED IN THIS AGREEMENT WILL NOT IN ANY WAY BE AFFECTED OR IMPAIRED.
(L) THE TERM OF THIS AGREEMENT WILL COMMENCE ON THE

DATE OF THIS AGREEMENT AND WILL CONTINUE UNTIL THE EARLIEST TO OCCUR OF THE FOLLOWING EVENTS: (I) THE PAYMENT OF ALL OF THE SENIOR INDEBTEDNESS; PROVIDED THAT THIS AGREEMENT WILL BE REINSTATED IN Agenda Item #12.1.

THE EVENT ANY PAYMENT ON ACCOUNT OF THE SENIOR INDEBTEDNESS IS

AVOIDED, SET ASIDE, RESCINDED OR REPAID BY SENIOR MORTGAGEE AS DESCRIBED IN SECTION 2(E) OF THIS AGREEMENT, (II) THE PAYMENT OF ALL OF

THE SUBORDINATE INDEBTEDNESS OTHER THAN BY REASON OF PAYMENTS

WHICH SUBORDINATE MORTGAGEE IS OBLIGATED TO REMIT TO SENIOR

MORTGAGEE PURSUANT TO THIS AGREEMENT, (III) THE ACQUISITION BY SENIOR

MORTGAGEE OR BY A THIRD PARTY PURCHASER OF TITLE TO THE MORTGAGED

PROPERTY PURSUANT TO A FORECLOSURE OF, DEED IN LIEU OF FORECLOSURE, OR TRUSTEE’S SALE OR OTHER EXERCISE OF A POWER OF SALE OR SIMILAR DISPOSITION UNDER THE SENIOR MORTGAGE; OR (IV) WITH THE PRIOR WRITTEN

CONSENT OF SENIOR MORTGAGEE, WITHOUT LIMITING THE PROVISIONS OF SECTION 5(D), THE ACQUISITION BY SUBORDINATE MORTGAGEE OF TITLE TO

THE MORTGAGED PROPERTY SUBJECT TO THE SENIOR MORTGAGE PURSUANT

TO A FORECLOSURE, OR A DEED IN LIEU OF FORECLOSURE, OF (OR THE EXERCISE OF A POWER OF SALE UNDER) THE SUBORDINATE MORTGAGE.

NOTWITHSTANDING THE FOREGOING, THE TERMS AND CONDITIONS OF SECTION 3 OF THIS AGREEMENT SHALL SURVIVE THE OCCURRENCE OF ANY OF

THE FOREGOING EVENTS (AND THE TERM OF THIS AGREEMENT, AS TO SECTION 3, SHALL BE PERPETUAL).
(M) NO FAILURE OR DELAY ON THE PART OF ANY PARTY TO THIS

AGREEMENT IN EXERCISING ANY RIGHT, POWER, OR REMEDY UNDER THIS

AGREEMENT WILL OPERATE AS A WAIVER OF SUCH RIGHT, POWER, OR REMEDY,

NOR WILL ANY SINGLE OR PARTIAL EXERCISE OF ANY SUCH RIGHT, POWER OR

REMEDY PRECLUDE ANY OTHER OR FURTHER EXERCISE OF SUCH RIGHT,

POWER, OR REMEDY OR THE EXERCISE OF ANY OTHER RIGHT, POWER OR REMEDY UNDER THIS AGREEMENT.
(N) EACH PARTY TO THIS AGREEMENT ACKNOWLEDGES THAT IF

ANY PARTY FAILS TO COMPLY WITH ITS OBLIGATIONS UNDER THIS

AGREEMENT, THE OTHER PARTIES WILL HAVE ALL RIGHTS AVAILABLE AT LAW

AND IN EQUITY, INCLUDING THE RIGHT TO OBTAIN SPECIFIC PERFORMANCE OF THE OBLIGATIONS OF SUCH DEFAULTING PARTY AND INJUNCTIVE RELIEF. (O) THIS AGREEMENT SHALL INURE TO THE BENEFIT OF ANY
SUBSEQUENT HOLDER OF THE SENIOR NOTE.
(P) THIS AGREEMENT MAY BE AMENDED, CHANGED, MODIFIED,

ALTERED OR TERMINATED ONLY BY A WRITTEN INSTRUMENT OR WRITTEN INSTRUMENTS SIGNED BY THE PARTIES TO THIS AGREEMENT.
(Q) THIS AGREEMENT MAY BE EXECUTED IN TWO OR MORE

COUNTERPARTS, EACH OF WHICH WILL BE DEEMED AN ORIGINAL BUT ALL OF WHICH TOGETHER WILL CONSTITUTE ONE AND THE SAME INSTRUMENT. [Signature Pages Follow]
Agenda Item #12.1.

4883-5063-5449v.3 0113877-000049
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the day and year first above written.

SENIOR MORTGAGEE:

UMPQUA BANK, an Oregon state chartered bank,
as “Agent”, pursuant to that certain Master Agency
Agreement dated as of June 1, 2024
between Issuer and Agent
By: ______________________________
Gabriel Brown
Vice President
Agenda Item #12.1.

SUBORDINATE MORTGAGEE:

CITY OF ST. HELENA,
a municipal corporation
By: ______________________________________
Name: _____________________
Title: _____________________
APPROVED AS TO FORM:

By: _____________________________________
Ethan Walsh
City Attorney
Agenda Item #12.1.

4883-5063-5449v.3 0113877-000049

CONSENT OF BORROWER
Borrower acknowledges receipt of a copy of this Subordination Agreement (City of St. Helena) dated ________________, 2024, by and between UMPQUA BANK, an Oregon state chartered bank, as agent (in such capacity, “Senior Mortgagee”) for the CALIFORNIA MUNICIPAL FINANCE AUTHORITY, a joint exercise of powers agency existing under the laws of the State of California (“Issuer”), pursuant to that certain Master Agency Agreement dated as of ______________, 2024, by and between Agent and Issuer.

BORROWER:

HUNT PRADERA II, L.P.,
a California limited partnership
By: Hunt Pradera II, LLC,
a California limited liability company,
its General Partner
By: BRIDGE Housing Corporation,
a California nonprofit public benefit corporation,
its Managing Member
By: ____________________________________
Smitha Seshadri
Executive Vice President
By: Napa Valley Community Housing,
a California nonprofit public benefit corporation,
its Managing Member
By: ____________________________________
Erica R. Sklar
President and Chief Executive Officer
Agenda Item #12.1.

4883-5063-5449v.3 0113877-000049

EXHIBIT A

LEGAL DESCRIPTION
Agenda Item #12.1.

4883-5063-5449v.3 0113877-000049

ACKNOWLEDGMENT
State of California )
) ss
County of _______________________)
On _______________________, 2024 before me, ____________________________________________, a Notary Public, personally appeared _____________________________________, who proved to me on the basis of satisfactory evidence to be the person (s) whose name (s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her their authorized capacity (ies), and that by his/her/their signature (s) on the instrument the person (s), or the entity upon behalf of which the person (s) acted, executed the instrument.

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

WITNESS my hand and official seal.

Signature_____________________________
(Seal)
Agenda Item #12.1.

ACKNOWLEDGMENT
State of California )
) ss
County of _______________________)
On _______________________, 2024 before me, ____________________________________________, a Notary Public, personally appeared _____________________________________, who proved to me on the basis of satisfactory evidence to be the person (s) whose name (s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her their authorized capacity (ies), and that by his/her/their signature (s) on the instrument the person (s), or the entity upon behalf of which the person (s) acted, executed the instrument.

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

WITNESS my hand and official seal.

Signature_____________________________
(Seal)
Agenda Item #12.1.

ACKNOWLEDGMENT
State of California )
) ss
County of _______________________)
On _______________________, 2024 before me, ____________________________________________, a Notary Public, personally appeared _____________________________________, who proved to me on the basis of satisfactory evidence to be the person (s) whose name (s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her their authorized capacity (ies), and that by his/her/their signature (s) on the instrument the person (s), or the entity upon behalf of which the person (s) acted, executed the instrument.

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

WITNESS my hand and official seal.

Signature_____________________________
(Seal)
Agenda Item #12.1.

83578.00012\42274830.1
ATTACHMENT NO. 5

REHABILITATION WORK
Hunt’s Grove Scope:

1. Full or partial replacement of existing plywood/OSB siding

2. Full or partial window replacement

3. ADA modification of 6 first floor units

4. Full or partial roof replacement with new shingles, sheet metal/flashing, gutters & downspouts

5. Partial water heater replacement

6. LED site lighting replacement

7. Site work, path of travel, and parking AC repairs, as identified by GC/architect and approved building permit.

8. Site landscaping, as identified by GC/architect and approved building permit.

9. Appliance, cabinetry, countertop, and other in-unit replacement, per owner’s unit matrix.

10. Other misc. scope items, as identified on approved building permit.

Agenda Item #12.1.

Agenda Report to the City Council
Agenda Section: OLD BUSINESS
Department: Administration
DATE: May 14, 2024
FROM: April Mitts, Assistant City Manager
SUBJECT: Presentation of Opinion Research Data Related to the Proposed November 2024 Real Property Transfer Tax
Revenue Measure and Direction to Staff.

RECOMMENDED
ACTION:

Direct staff to continue working to place both the Charter City and Real Property Transfer Tax on the ballot for the November 2024 Election and provide direction to staff on the City Council's desired Real Property Transfer Tax
structure.

PREVIOUS COUNCIL
ACTION:

February 28, 2023 - BakerTilly Report
May 23, 2023 - Direction from City Council
July 25, 2023 - Direction from City Council
October 10, 2023 - Direction from City Council
February 27, 2024 - Direction from City Council

STATEMENT OF THE
PURPOSE:

To provide data and analysis to City Council for
consideration of a November 2024 revenue-generating
local ballot measure.

FINANCIAL IMPACT: If a proposed charter and real property transfer tax is placed on the November 2024 ballot, the City Clerk
estimates a cost of $60,000 in addition to approximately $5,000 for informational items. Funding for elections has been included in the FY 24 budget and will be carried over into the FY 25 budget.

BACKGROUND:

Consistent with City Council Goal 1 - Strengthen Fiscal Resilience, Goal 2 - Improve Infrastructure and Further Environmental Sustainability, and Goal 5 - Enhance Quality of Life the City Council has received several reports on financing and revenue options to address City infrastructure and staffing deficiencies.

To keep expenditures commensurate with annual revenues while maintaining sufficient reserves, the City has been limited in making investments in several areas for over a decade. This is a good practice, has kept expenditures down, and has helped the City earn a favorable credit rating. However, these required budgetary constraints have resulted in uncompetitive staff compensation, as well as significant deferred maintenance of parks, sidewalks, roads, infrastructure, and buildings. It also resulted in high employee vacancy rate (almost 20% in 2023) and high turnover, and inability to recruit for important positions including Police Officers. To ensure the accuracy of the Agenda Item #12.2.

City's long-range liabilities/needs, and to obtain an outside assessment, a well-known consultancy was hired to conduct a study of the City's finances.

On February 28, 2023, the City Council received a presentation from BakerTilly that included an updated Long Range Financial Forecast (LRFF) which provided financial projections and indicated the requirement to increase revenues and/or further adjust service levels. The presentation provided several ways of dealing with the financial situation including reducing expenditures, engaging more aggressively in shared services, and/or increasing various types of fees and taxes. The key conclusion was that if community expectations are to be met, simply addressing the fiscal gap by only reducing expenditures or sharing costs will not work in the long run and new revenue options would need to be considered.

Actions taken since February 2023
Since the BakerTilly presentation in February 2023, staff has taken several steps that were recommended in the study including:
 Initiated sale of City real property to generate revenue to pay for important City projects.
 Embarked on several process improvements to drive down costs of delivering services.
 Analyzed potential for shared services models for several City services including Police, Fire, Library-Parks and Recreation, Human Resources, and Water/Wastewater.
 Explored various cost cutting measures.
 Evaluated several revenue generation methods including increases in Transient Occupancy Tax (TOT), Sales Tax, Business License Fees.
 Implemented updated Impact Fees and User Fees.
 Actively supported development (housing, restaurants, shops, and hotels) to enhance local economic vibrancy.
 Continue efforts to aggressively seek grants.

The BakerTilly report also mentioned that adjustment in expectations could be another alternative to address the City's long-term financial condition. It should be noted that the City Council and staff have undertaken several measures over the years to respond to lower levels of funding while maintaining sufficient reserves. Cost containment over the last 10-years (requiring expenditures to meet projected revenues) has resulted in various impacts including, but not limited to, insufficient staffing; slower response times for services; inability of staff to consistently respond to requests for assistance; inability to enforce various codes, being reactive instead of proactive; deferred maintenance on roads, sidewalks, and other infrastructure; and inability to construct Capital Improvement Plan (CIP) projects, even when funding was available.

As noted above, the City has already has been cutting costs to match revenues for over a decade, and residents have noted their dissatisfaction through surveys conducted in Agenda Item #12.2.

2016, 2021, 2023, and more recently, March 2024. Among other things, that the community views the following as, Extremely/Very Serious Problem (greater than 70% of respondents). The table below provides data on items viewed as an Extremely/Very Serious Problem in comparison to previous surveys:

Problem
Extremely/Very Serious Problem 2016 2021 2023 2024
Local roads in need of repair 61% 58% 75% 77%
The condition of downtown sidewalks 26% 52% 74% 68%
The condition of local infrastructure -- 58% 74% 71%
The cost of housing 57% 68% 72% 75%
The future of our local water supply -- 83% 70% 85%
Based on this information, it appears unlikely that residents would be willing to further reduce City services. Therefore, a new stable revenue source(s) to fund City services appears to be the resident's preferred option.

As the City Council and staff considered the various options over the last year, none of the possible sources have been estimated to provide either sufficient savings or revenue to address the required estimated $7-$10 million to annually maintain City services that residents have prioritized. The Real Property Transfer Tax (RPTT) is the only option that promises to generate sufficient revenue to address the funding gap.

The following is a summary of City Council actions to explore the RPTT:

May 23, 2023 - City Council further discussed each of the revenue options and directed staff to further pursue the Real Property Transfer Tax and other revenue enhance options.

July 25, 2023 - City Council further directed staff as follows:

1. Move forward with opinion research for a March 2024 General Obligation (GO) Bond which would enable the City to fund projects such as street/road improvements, downtown sidewalk project, and/or provide repair to or new bridges/access ways;

2. Move forward with opinion research for a November 2024 Charter City/Real Property Transfer Tax (to be conducted in March/April 2024); and

3. Established a City Council Revenue Enhancement Ad Hoc Committee comprised of Vice Mayor Hall and Councilmember Summers to assist with: setting opinion research questions, develop ballot language, and, with the Real Property Transfer Tax and corresponding Charter Requirement, draft a charter for City Council consideration.

Agenda Item #12.2.

October 10, 2023 - City Council received a presentation of opinion research related to consideration of a March 2024 General Obligation Bond local ballot measure. Council provided direction to not move forward with this ballot measure and focus on a November 2024 ballot measure for a Charter City/Real Property Transfer Tax.

December 2023 to February 2024 - Staff worked with a citizen's group to seek input and to provide recommendations to Council for the structure of the RPTT. The residents, who met regularly, were from diverse backgrounds, had differing opinions, and spent a considerable amount of time understanding the issues at hand, researching and educating themselves on the City's financial condition, and learning about the RPTT.

This group engaged in robust dialog, asked for and reviewed 18 different options for the structure of the tax, and deliberated on other related items. While not unanimous, this group came to a consensus on six recommendations and two tax structures for consideration as noted in the February 27, 2024 staff report to City Council.

February 27, 2024 - City Council reviewed the recommendations of the citizen committee and staff and City Council directed to conduct opinion research on the following:

1. Tax Structure: Flat tax of 2.5% on total sales price over $1 million resulting in an estimated annual revenue of $6.5 million.

2. Tax Structure: Graduated tax of 1.5% on sales price for property between $1 - $5 million, and 3% tax on total sales price over $5 million resulting in an estimated annual revenue of $5.3 million.

3. Tax Sunset of 8 years.

Additionally, the polling would include voter opinion on the various issues facing St.

Helena.

DISCUSSION:

FM3 Research surveyed support for:

1. Adopting a City of St. Helena Charter to be established as a Charter City with the ability to adopt local funding measures, such as a real property transfer tax with all other City Council powers remaining the same as general law cities; and

2. Adopting a real property transfer tax (RPTT) to fund City services such as repaving streets, repairing local roads/potholes, downtown sidewalks/infrastructure, maintaining emergency/fire response and general government use.

FM3 is presenting to City Council the analysis and interpretation of the results of the opinion research. The slides that will be used for the presentation are attached to this report. FM3 Research will also be available to answer City Council questions.

City staff is seeking City Council direction on the following:

Agenda Item #12.2.

1. Whether to proceed with the November 2024 Charter City and Real Property Transfer Tax ballot measures.

2. The tax structure itself.
a. Flat tax of 2.5% on all sales over $1 million generating and estimated $6.5 million annually
b. Graduated tax of 1.5% on all sales between $1 and $5 million and 3% on all sales over $5 million.

Next Steps
If City Council recommends proceeding with the November 2024 Charter City and Real Property Transfer Tax ballot measures, the next steps are as follows:

Charter City

1. May 14, 2024 - Second Public Hearing - Charter City

2. June 11, 2024 - City Council to consider Charter City measure for November 2024 Ballot
Real Property Transfer Tax

1. June 11, 2024 - City Council to consider Real Property Transfer Tax measure for November 2024 Ballot
ENVIRONMENTAL REVIEW:

N/A
GOAL:

Goal 1: Strengthen Financial Sustainability
Goal 2: Improve Infrastructure & Further Environmental Sustainability Goal 5: Enhance Quality of Life
DOCUMENTS ATTACHMENTS:
220-7051 St. Helena RPTT Survey Analysis - City Council Meeting Agenda Item #12.2.

Key Findings of a Citywide Survey Conducted March 23 – April 4, 2024 220-7051
St. Helena Voter Attitudes Toward a
Real Property Transfer Tax Measure
Agenda Item #12.2.

2 Dates March 23 – April 4, 2024
Survey Type Dual-mode Voter Survey
Research Population Likely November 2024 Voters in the City of St. Helena Total Interviews 403
Margin of Sampling Error ±4.9% at the 95% Confidence Level Contact Methods
Data Collection Modes
Survey Tracking 2016-2023
(Note: Not All Results Will Sum to 100% Due to Rounding) Survey Methodology
Text
Invitations
Telephone
Calls
Email
Invitations
Telephone
Interviews
Online
Interviews
Agenda Item #12.2.

3 Issue Context
Agenda Item #12.2.

4 Q1a.

I am going to read you a list of organizations. Please tell me if you approve or disapprove of the job being done by the organization. 10%
6%
12%
7%
55%
45%
39%
36%
17%
30%
24%
28%
12%
17%
17%
22%
6%
8%
6%
2024
2023
2021
2016
Strng. Appr. Smwt. Appr. Smwt. Disappr. Strng. Disappr. Don't Know Total
Appr.

Total
Disappr.
65% 29%
50% 46%
51% 41%
44% 50%
St. Helena City Government Overall
Nearly two-thirds approve of the job being done
by St. Helena city government.

Agenda Item #12.2.

5 Q1b.

I am going to read you a list of organizations. Please tell me if you approve or disapprove of the job being done by the organization.

The St. Helena City Council
7%
6%
13%
7%
52%
55%
37%
43%
20%
20%
24%
26%
11%
13%
16%
16%
9%
6%
11%
8%
2024
2023
2021
2016
Strng. Appr. Smwt. Appr. Smwt. Disappr. Strng. Disappr. Don't Know Total
Appr.

Total
Disappr.
59% 32%
61% 33%
50% 39%
50% 42%
Three in five approve of the job being done by the
City Council.

Agenda Item #12.2.

6 Q7. ^Not Part of Split Sample
33%
30%
44%
31%
35%
25%
26%
53%
46%
31%
40%
34%
44%
36%
11%
17%
16%
22%
23%
20%
18%
6%
8%
6%
8%
11%
18%
The future of our local water supply
^Local roads in need of repair
^The cost of housing
^The condition of local infrastructure
Water shortages
^The condition of
downtown sidewalks
The amount you pay in local taxes
Ext. Ser. Prob. Very Ser. Prob. Smwt. Ser. Prob. Not a Prob. Don't Know Ext./Very Ser. Prob.
85%
77%
75%
71%
69%
68%
62%
Local water supply, local roads, the cost of housing and local infrastructure conditions are the biggest problems
facing the community.

I’m going to read you a list of things some people say may be problems facing St. Helena.

Please tell me whether you think it is an extremely serious problem, a very serious problem, a somewhat serious problem, or not a problem for St. Helena residents.

Agenda Item #12.2.

7 Q7. I’m going to read you a list of things some people say may be problems facing St. Helena. Please tell me whether you think it is an extremely serious problem, a very serious problem, a somewhat serious problem, or not a problem for St. Helena residents. ^Not Part of Split Sample 23%
24%
18%
22%
21%
24%
22%
7%
33%
29%
34%
27%
27%
18%
17%
17%
30%
32%
29%
31%
26%
23%
18%
29%
9%
12%
18%
16%
21%
32%
33%
44%
5%
5%
10%
Waste and inefficiency in
City government
Drought
Traffic congestion
The health of our local
small businesses and economy
A lack of fire preparedness
Crime
^Slow emergency response times
The impact of visitors
Ext. Ser. Prob. Very Ser. Prob. Smwt. Ser. Prob. Not a Prob. Don't Know Ext./Very Ser. Prob.
56%
54%
52%
49%
48%
43%
39%
25%
Voters are least concerned about emergency
response times and the impact of visitors.

Agenda Item #12.2.
8 Q5. I’m going to read you a list of things some people say may be problems facing St. Helena. Please tell me whether you think it is an extremely serious problem, a very serious problem, a somewhat serious problem, or not a problem for St. Helena residents. ^Not Part of Split Sample Problem
Extremely/Very Serious Problem
2016 2021 2023 2024 Difference
(2023-2024)
The amount you pay in local taxes 30% 40% 35% 62% +27%
The future of our local water supply -- 83% 70% 85% +15% Water shortages -- 78% 63% 69% +6%
^The cost of housing 57% 68% 72% 75% +3%
^Slow emergency response times -- 34% 36% 39% +3%
^Local roads in need of repair 61% 58% 75% 77% +2%
Crime 4% 22% 41% 43% +2%
A lack of fire preparedness -- 48% 47% 48% +1%
^The condition of local infrastructure -- 58% 74% 71% -3% Traffic congestion 50% 49% 56% 52% -4%
Waste and inefficiency in City government 47% 54% 61% 56% -5% ^The condition of downtown sidewalks 26% 52% 74% 68% -6% Drought -- 84% 64% 54% -10%
The impact of visitors -- 33% 48% 25% -23%
The health of our local small businesses and economy -- 69% 76% 49% -27% Relative to 2023, voters are more concerned
about taxes and water supply.

Agenda Item #12.2.
9 Q8.

In your personal opinion, do you think there is a great need, some need, a little need, or no real need for additional funds to provide the level of City services that St. Helena residents need and want? 27%
25%
25%
28%
44%
45%
42%
38%
15%
16%
13%
11%
13%
9%
13%
18%
5%
7%
5%
2024
2023
2021
2016
Great Need Some Need A Little Need No Real Need Don't Know Great/
Some
Need
A Little/
No Real
Need
71% 27%
70% 25%
66% 27%
66% 28%
Seven in ten see a need for funding
for city services.

Agenda Item #12.2.
10 Q9.

Do you think there is a great need, some need, a little need, or no real need for additional funds to address the condition of St. Helena infrastructure? 40%
32%
34%
36%
36%
39%
12%
19%
15%
10%
9%
7% 5%
2024
2023
2021
Great Need Some Need A Little Need No Real Need Don't Know Great/
Some
Need
A Little/
No Real
Need
76% 22%
68% 28%
73% 23%
More than three quarters see a need for
infrastructure funding.

Agenda Item #12.2.
11 Introducing the Measure

Agenda Item #12.2.
12 Charter City Measure
Ballot Language Tested
Q2. Would you vote yes in favor of it, or no to oppose this measure? ST. HELENA CHARTER CITY MEASURE To enhance
local control over funding essential City services,
shall the City of St. Helena Charter be adopted to establish St. Helena as a charter city with the ability to adopt
local funding measures, such as a real property transfer tax, subject to voter approval? The City Council’s powers
otherwise remain unchanged and are governed by state
general law, and any other powers as a charter city would have to be approved by the voters.

Agenda Item #12.2.
13 24%
22%
10%
2%
8%
21%
13%
Definitely yes
Probably yes
Undecided, lean yes
Undecided, lean no
Probably no
Definitely no
Undecided
Q2.

Total
No
31%
Total
Yes
56%
A majority support the proposed
charter city measure.

Would you vote yes in favor of it, or no to oppose this measure?

Agenda Item #12.2.
14 Real Property Transfer Tax Measure
Ballot Language Tested
Q3. Would you vote yes in favor of it, or no to oppose this measure? To fund essential city services such as repaving streets, repairing local roads/potholes, downtown sidewalks/
infrastructure, maintaining emergency/fire response,
and general government use, shall the City of St. Helena measure establishing a real property transfer tax of 2.5% on all sales over $1 million to be paid only by property buyers and sellers at the time of sale, generating approximately $6.5 million annually until ended by voters, all funds staying in St. Helena/cannot be taken by the state, be adopted?

Agenda Item #12.2.
15 27%
27%
5%
4%
7%
25%
5%
Definitely yes
Probably yes
Undecided, lean yes
Undecided, lean no
Probably no
Definitely no
Undecided
Q3.

Total
No
36%
Total
Yes
59%
Nearly three in five say they would vote “yes” on
the proposed RPTT measure.

Would you vote yes in favor of it, or no to oppose this measure?

Agenda Item #12.2.
16 Q4a.

In a few words of your own, why would you vote YES on Measure B? 29%
21%
19%
14%
12%
3%
2%
2%
2%
2%
2%
2%
1%
Revenue/Funds are needed
General support/Needed/Necessary/Agree
Fix the roads/streets/infrastructure
City needs repairs
Safety/Quality of life
It's affordable
Tax the rich/wealthy people
It's been too long/Waiting for a long time
Support a property tax/homeowners tax
Maintain/Improve emergency response times
Other
Don't know/Unsure
Refused/No comment
(Open-ended; Asked of Yes Voters Only, n=239)
Support is motivated by the sense that the funds
are needed.

Agenda Item #12.2.
17 Q4a. In a few words of your own, why would you vote YES on Measure B? Verbatim Comments in Favor of the
RPTT Measure
Wildfires are
rampant. We
need to have fire
safety plans.

High end buyers need to contribute to
rebuilding this city.

The streets
sidewalk are in
need of repairs.

The constant churn of short-term second-home owners
discourages long term community investment.

The city's
infrastructure needs
to be improved.

To provide the city with
adequate funds to finish
maintenance projects in
a timely manner.

Ensures that fire
evacuation routes are
safe.

The city
needs money
and this has
the least
impact on the
citizens.

Our infrastructure is a joke and need
to do something because everything is
falling apart.

The measure
ensures strict
accountability.

The roads are in
extreme need of
repair.

Agenda Item #12.2.
18 Q4b.

In a few words of your own, why would you vote NO on Measure B? 39%
23%
18%
12%
10%
8%
7%
4%
4%
1%
No more taxes/Against tax increase
Budget existing funds/Mismanagement
Too high/costly/High rate
Not needed/Unnecessary
General negative/Bad policy
Increases housing cost/Expensive housing
Untrustworthy/Corrupt/Fraud/Scam
Will decrease property values
Other
Don't know/Unsure
(Open-ended; Asked of No Voters Only, n=144)
Opponents are anti-tax and worry about
mismanagement.

Agenda Item #12.2.

19 Q4b. In a few words of your own, why would you vote NO on Measure B? Verbatim Comments from Opponents
of the Measure
One million
dollar sales are
below average in
the area. I would
vote for this if it
were in the 66th
percentile of
home prices in
the areas.

Budget needs to be spent better
instead of increasing taxes for
"essential services"
Politicians will just
waste tax dollars.

I don't think my house
should be taxed any
further than the taxes I
already paid
The tax is being
levied on the wrong
people. Isolate to
people using their
property as a
second home.

Having additional taxes
to pay for services that
should already be
funded, find money
elsewhere.

Older , longtime owners
depend on full payout. 2.5% tax
increase is
too much.

Prices of homes are impossible already for
new families, and 2. 5% more tax is
unreasonable at the price suggested. If you
did this at a higher price, I’d be in favor.

Will hurt first time
homebuyers.

Agenda Item #12.2.
20 Q3. Would you vote yes in favor of it, or no to oppose this measure? Q5. In that case, would you vote yes in favor of it, or no to oppose this measure? Suppose that instead of establishing a real property transfer tax paid by buyers and sellers of property of 2.5% on all sales over $1 million which would generate $6.5 million annually for city services, this measure established a 1.5% tax on sales $1 million to $5 million and a 3% tax on sales over $5 million generating $5.3 million annually for city services. 34%
24%
5%
3%
9%
20%
5%
27%
27%
5%
4%
7%
25%
5%
Initial Vote 1.5% Tax Vote
Definitely yes
Probably yes
Undecided, lean yes
Undecided, lean no
Probably no
Definitely no
Undecided
Total
No
36%
Total
Yes
59%
Total
No
32%
Total
Yes
63%
Support is more definite for
a 1.5% tax rate.