Sunnyvale City Council
November 19, 2024

DDA EXHIBIT F – SUBORDINATE LOAN NOTE
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the close of and for such Fiscal Year, all in reasonable detail, certified by a general partner of Borrower;
(b) Annual Operating Statements . As soon as available but in no event later than one hundred eighty (180) days after the close of each Fiscal Year, an “Annual Operating Statement” showing Gross Income, Annual Operating Expenses, Debt Service and any other amounts taken into considerati on in computing Net Operating Income, if any, for the subject Fiscal Year, in a form reasonably satisfactory to the Director of Community Development;
(d) Audit Reports . Following receipt thereof, copies of all reports submitted to Borrower by independent public accountants in connection with each annual, interim or special audit of the financial statements of Borrower, made by such accountants;

5. Payment. Borrower shall make payment on this Note in accordance with the following:

5.1 Annual Payment . If, when Borrower delivers each Annual Operating Statement to Lender pursuant to Subdivision 4(b), above, said Annual Operating Statement shows that there was Net Operating Income for the subject Fiscal Year, or part thereof, Borrower shall make payment to Lender on account of this Note in the amount of the City's Pro Rata Share of Net Operating Income at the same time that Borrower provides the Annual Operating Statement to the Lender. The first payment of Net Operating Income shall b e due one hundred eighty (180) days after the end of the first full Fiscal Year after completion of construction as evidenced by a certificate of occupancy. Notwithstanding the above, the full principal and interest due hereunder shall be due in full in t he event the DDA is terminated prior to the Ground Lease being executed, unless such amounts are forgiven by the Lender.

7. Maturity. This Note shall be all due and payable on the 55th anniversary of the date the Senior Loan converts to permanent financing, but in any event no later than December 31, 2086 or earlier termination thereof.

8. Application of Payments. Any payments received by Lender pursuant to the terms hereof shall be applied first to sums, other than principal and interest, due Lender pursuant to this Note; next to the payment of all interest accrued to the date of such payment; and the balance, if any, to the payment of principal.

9. Form of Payment. All amounts due hereunder are payable in immediately available funds and lawful monies of the United States of America.

10. Dispute Regarding Annual Operating Statement. If Lender disputes any Annual Operating Statement, Lender shall notify Borrower of such dispute and the parties shall cause their representatives to meet and confer concerning the dispute and to use all reasonable efforts to reach a mutually acceptable resolution of the matter in question within thirty (30) days after Lender’s notice of such dispute. If the parties are unable to DRAFT
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achieve a mutually acceptable resolution within such 30 -day period, then, within twenty (20) days after the expiration of such period, Borrower shall appoint a national firm of certified public accountants to review the dispute and to make a determination as to the matter in question within thirty (30) days after such appointment. Such firm’s determination shall be final and binding upon the parties. Such firm shall have full access to the books, records and accounts of the Borrower and the Project.

10.1 Underpayment. If any audit by Lender reports an
underpayment by Borrower on this Note, Borrower shall pay the amount of any such underpayment, together with the late charge specified in Section 13 of this Note, to Lender within five (5) days after notice thereof to Borrower or, in the event of a dispute, after notice to Borrower of the resolution of such dispute by the independent firm of certified public accountants, as the case may be, and, if such underpayment amounts to more than three percent (3% ) of the disputed payment for the period audited, then, notwithstanding anything to the contrary in this Section, Borrower shall pay to Lender, within five (5) days after demand, Lender’s reasonable costs and expenses in conducting such audit and exercising its rights under Section 10 of this Note (including a reasonable charge for the services of any employees of Lender conducting such audit and exercising its rights under this Section).

10.2 Overpayment. If any audit by Lender reports an overpayment by Borrower on this Note, Lender shall promptly reimburse the amount of any such overpayment to Borrower within five (5) days after notice thereof to Lender.

11. Prepayment. At any time, Borrower may prepay in whole or in part, without penalty, the outstanding principal balance under this Note, together with all accrued and unpaid interest, fees, costs and expenses payable hereunder.

12. Security. This Note and all amounts payable hereunder shall be unsecured until the recordation of the City Subordinate Loan Deed of Trust, which shall be recorded against the Borrower's leasehold interest created by the Ground Lease, at such time as the Ground Lease is executed and the Memorandum of the Ground Lease is recorded in the Official Records. Once the City Subordinate Loan Deed of Trust is recorded, the terms of the City Subordinate Loan Deed of Trust are incorporated herein and made a part hereof to the same extent and with the same force and effect as if fully set forth herein. Once the City Subordinate Loan Deed of Trust is recorded, a default under any of the provisions of the City Subordinate Loan Deed of Trust shall be a default hereunder, and a default hereunder shall be a default under the City Subordinate Loan Deed of Trust.

13. Late Payment. If any annual payment of accrued interest and principal is not received by the Lender within ten (10) calendar days after the installment is due, Borrower shall pay to the Lender a late charge of five percent (5%) of such payment, such late charge to be immediately due and payable without demand by Lender.

14. Acceleration and Other Remedies. If:

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(a) any payment under this Note is not made when due and Borrower fails to cure said default within fifteen (15) days after notice from Lender; (b) Borrower defaults under any other provision of this Note and Borrower shall have failed to cure said default within thirty (30) days after notice from Lender, provided, however, if cure of such default reasonably requires more than thirty (30) days, th en, provided that Borrower commences to cure within such thirty (30) -day period and thereafter diligently and continuously prosecutes the cure to completion, Borrower shall not be in default during the cure period; (c) there is an event or occurrence which, pursuant to the City Subordinate Loan Deed of Trust, gives rise to acceleration of the indebtedness evidenced by this Note,
(d) there is a default under the Senior Loan;
(e) the DDA is terminated prior to the execution of the Ground Lease due to a default by Borrower, unless such amounts are forgiven by the Lender; the entire principal amount outstanding hereunder and accrued interest thereon shall at once become due and payable, at the option of Lender.

15. Remedies. Upon the occurrence of an event of default and the expiration of any cure period therefor as provided in this Note without such event of default having been cured, then, at the option of Lender, the entire balance of principal together with all accrued interest thereon shall, without demand or notice, but subject to the non-recourse provisions of Section 20 of this Note, 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 together with all accrued interest shall bear interest at the lesser of (a) the maximum rate permitted by law, and (b) the Base Rate plus three percent (3%) per annum. No delay or omission on the part of Lender in exercising any right under this Note or under the City Subordinate Loan Deed of Trust shall operate as a waiver of such right.

16. Third Party Cure Rights . Notwithstanding anything to the contrary contained in this Note or the City Subordinate Loan Deed of Trust (collectively, the “Subordinate Loan Documents ”), prior to declaring any default or taking any remedy permitted under the Subordinate Loan Documents or applicable law based upon an alleged default under the Subordinate Loan Documents, Borrowers investor tax credit partner shall have a period of not le ss than (a) fifteen (15) days to cure such alleged default if of a monetary nature, and (b) thirty (30) days to cure such alleged default if of a nonmonetary nature; provided, however, if in order to cure such a default the investor limited partner reasonably determines that it must remove the general partner of the Borrower, the investor limited partner shall so notify the Lender and so long as the investor limited partner is diligently and continuously attempting to so remove such general partner, the investor limited partner shall have until the date thirty (30) days after th e DRAFT
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effective date of the removal of the general partner or general partners to cure such default.

17. Waiver. Except as otherwise expressly provided herein, Borrower hereby waives diligence, presentment, protest and demand, notice of protest, dishonor and nonpayment of this Note, and expressly agrees that, without in any way affecting the liability of Borrower hereunder, Lender may extend any maturity date or the time for payment of any installment due hereunder, accept additional security, release any party liable hereunder and release any security now or hereafter securing this Note. Borrower further waives, to the full extent permitted by law, the right to plead any and all statutes of limitations as a defense to any demand on this Note, or on any deed of trust, security agreement, lease assignment, guaranty or other agreement now or hereafter secur ing this Note.

18. Attorneys’ Fees. If this Note is not paid when due or if any event of default occurs, Borrower promises to pay all costs of enforcement and collection, including but not limited to, reasonable attorney’s fees, whether or not any action or proceeding is brought to enforce the provisions hereof.

19. Severability. Every provision of this Note is intended to be severable. In the event any term or provision hereof is declared by a court of competent jurisdiction to be illegal or invalid for any reason whatsoever, such illegality or invalidity shall not affect the balance of the terms and provisions hereof, which terms and provisions shall remain binding and enforceable.

20. Interest Rate Limitation . Lender and Borrower stipulate and agree that none of the terms and provisions contained herein or in any of the loan instruments shall ever 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 such holder, be credited to the payment of the sums due hereunder or returned to Borrower.

21. Non-Recourse. Notwithstanding anything to the contrary contained in this Note or in the City Subordinate Loan Deed of Trust referred to in this Note, but without in any manner affecting the validity of this Note or the lien or charge of the City Subordinate Loan Deed of Trust, after the City Subordinate Loan Deed of Trust is executed and recorded in the Official Records, in the event of any default under the terms of this Note or the City Subordinate Loan Deed of Trust, the sole recourse of the Lender for any and all such defaults shall be by judicial foreclosure or by the exercise of the trustee’s power of sale, and the undersigned, and the partners of the undersigned, shall not be personally liable for the payment of this Note or for any other default under the City Subordinate Loan Deed of Trust or for the payment of any deficiency established after judicial foreclosure or trustee’s sale under the City Subordinate Loan Deed of Trust. Nothing DRAFT
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DDA EXHIBIT F – SUBORDINATE LOAN NOTE
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contained in the foregoing limitation of liability shall: (a) limit or impair the enforcement against all such security for the Note of all the rights and remedies of the Lender thereunder; or (b) be deemed in any way to impair the right of the Lender to assert the unpaid principal amount of the Note as demand for money within the meaning and intendment of Section 431.70 of the California Code of Civil Procedure or any successor provision thereto. The foregoing limitation of liability is intended to apply only to the obligation for the repayment of the principal of, and payment of interest on the Note and the performance of the Borrower's obligations under the City Subordinate Loan Deed of Trust, except as hereafter set forth; nothing contained herein is i ntended to relieve the Borrower of its obligation to indemnify the Lender under any provisions of the Ground Lease, or liability for: (i) fraud or willful misrepresentation; (ii) the failure to pay taxes, assessments or other charges which may create lien s on the Property that are payable or applicable prior to any foreclosure under the City Subordinate Loan Deed of Trust (to the full extent of such taxes, assessments or other charges); (iii) the fair market value of any personal property or fixtures remov ed or disposed of by Borrower other than in accordance with the City Subordinate Loan Deed of Trust; and (iv) the misappropriation of any proceeds under any insurance policies or awards resulting from condemnation or the exercise of the power of eminent domain or by reason of damage, loss or destruction to any portion of the Property.

22. Headings. Headings at the beginning of each numbered Section of this Note are intended solely for convenience and are not to be deemed or construed to be a part of this Note.

23. Giving of Notice. Unless applicable law requires a different method, any notice that must be given to Borrower under this Note will be given by mailing it by first class mail to Borrower at the following address:

MP 1171 Sonora I Associates, L.P.
303 Vintage Park Drive, Suite 250
Foster City, CA 94404
Attn: President/CEO
or at a different address if Borrower gives Lender a notice of that different address.

Any notice that must be given to Lender under this Note will be given by mailing it by first class mail to Lender at the following address:

City of Sunnyvale
456 West Olive Avenue
Sunnyvale, California 94086
Attention: Director of Community Development
or at a different address if Lender gives Borrower a notice of that different address.

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25. Choice of Law . This Note shall be governed by and construed and enforced in accordance with the laws of the State of California , excluding its conflicts of laws provisions.
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DDA EXHIBIT F – SUBORDINATE LOAN NOTE
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BORROWER:

MP 1171 SONORA I ASSOCIATES, L.P., a
California limited partnership
BY: MP 1171 SONORA I LLC, a California
limited liability company, its general partner
BY: MID-PENINSULA BAKER PARK,
INC., a California nonprofit public benefit
corporation, its sole member/manager

By: __________________________
Matthew O. Franklin
President/CEO

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DDA EXHIBIT G – SUBORDINATE LOAN DEED OF TRUST

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DDA EXHIBIT G

SUBORDINATED DEED OF TRUST

WITH ASSIGNMENT OF RENTS
RECORDING REQUESTED BY:

CITY OF SUNNYVALE
AND WHEN RECORDED RETURN TO:

CITY OF SUNNYVALE
456 West Olive Avenue
Sunnyvale, California 94086
Attention: Director of Community Development
[Free Recording Requested
Government Code § 6103]

SUBORDINATED DEED OF TRUST

WITH ASSIGNMENT OF RENTS
1171 SONORA COURT - HOUSING PROJECT

CITY SUBORDINATE LOAN DEED OF TRUST
This DEED OF TRUST is made as of ___________, ____, by and between MP 1171 SONORA I ASSOCIATES, L.P., a California limited partnership (“ Trustor”), ______________ TITLE COMPANY, a California corporation (“ Trustee”), and CITY OF SUNNYVALE, a California chartered municipal corporation (“Beneficiary”).

Trustor grants, transfers and assigns to Trustee in trust, upon the trusts, covenants, conditions and agreements and for the uses and purposes hereinafter contained, with power of sale, and right of entry and possession, all of its title and interest in that real property (the “Property”) in the City of Sunnyvale, County of Santa Clara, State of California, described in Exhibit A attached hereto and incorporated herein by this reference.

Together with Beneficiary’s interest in all buildings, structures and improvements of every nature whatsoever now or hereafter situated on the Property; and Together with the rents, issues and profits thereof; and together with all buildings and improvements of every kind and description now or hereafter erected or placed thereon, and all fixtures, including but not limited to all gas and electric fixtures, en gines DRAFT
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and machinery, radiators, heaters, furnaces, heating equipment, laundry equipment, steam and hot-water boilers, stoves, ranges, elevators and motors, bathtubs, sinks, water closets, basins, pipes, faucets and other plumbing and heating fixtures, mantles, cabinets, refrigerating plant and refrigerators, whether mechanical or otherwise, cooking apparatus and appurtenances, and all shades, awnings, screens, blinds and other furnishings, it being hereby agreed that all such fixtures and furnishings shall to the extent permitted by law be deemed to be permanently affixed to and a part of the realty; and Together with all building materials and equipment now or hereafter delivered to said premises and intended to be installed therein; and Together with all plans, drawings, specifications, and articles of personal property now or hereafter attached to or used in and about the building or buildings now erected or hereafter to be erected on the Property which are necessary to the completion an d comfortable use and occupancy of such building or buildings for the purposes for which they were or are to be erected, including all other goods and chattels and personal property as are ever used or furnished in operating a building, or the activities conducted therein, similar to the one herein described and referred to, and all renewals or replacements thereof or articles in substitution therefor, whether or not the same are, or shall be attached to said building or buildings in any manner.

To have and to hold the property hereinbefore described (including the Property and all appurtenances), all such property being referred to collectively herein as the “Property,” to Trustee, its successors and assigns forever.

FOR THE PURPOSE of securing (1) payment of indebtedness of Trustor to the Beneficiary in the principal sum of One Million Five Hundred Thirty Three Thousand Dollars ($1,533,000) (the “ City Subordinate Loan ”), evidenced by a promissory note of even date herewith between Trustor and Beneficiary (the “City Subordinate Loan Note”), together with all sums due thereunder including interest and other charges; and (2) the performance of each agreement of Trustor in this Deed of Trust and the City Subordinate Loan Note. The City Subordinate Loan Note and all of its terms are incorporated herein by reference and this conveyance shall secure any and all extensions, amendments, modifications or renewals thereof however evidenced, and additional advances of the City Subordinate Loan evidenced by any note reciting that it is secured hereby.

AND TO PROTECT THE SECURITY OF THIS DEED OF TRUST, TRUSTOR COVENANTS AND AGREES:

1. That it will pay the City Subordinate Loan Note at the time and in the manner provided therein;

2. That it will not permit or suffer the use of any of the Property for any purpose other than the use for which the same was intended at the time this Deed of Trust was executed, namely, as affordable rental housing;
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3. That the City Subordinate Loan Note is incorporated herein and made a part of this Deed of Trust. Upon default under the City Subordinate Loan Note or this Deed of Trust, Beneficiary, at its option, may declare the whole of the indebtedness secured hereby to be due and payable;

4. That all rents, profits and income from the Property covered by this Deed of Trust are hereby assigned to Beneficiary for the purpose of discharging the debt hereby secured. Permission is hereby given to Trustor so long as no default exists hereunder, to collect such rents, profits and income;

5. That upon default hereunder, Beneficiary shall be entitled to the appointment of a receiver by any court having jurisdiction, without notice, to take possession and protect the Property described herein and operate same and collect the rents, profits and income therefrom;

6. That Trustor will keep the improvements now existing or hereafter erected on the Property insured against loss by fire and such other hazards, casualties and contingencies as may be required in writing from time to time by Beneficiary, and all such insurance shall be evidenced by standard fire and extended coverage insurance policy or policies, in the amount of the replacement value of the improvements. Such policies shall be endorsed with a standard mortgage clause with loss payable to Beneficiary subordinate to the rights and interest of the beneficiary of the Senior Loan Deed of Trust described in paragraph 31, below) and certificates thereof together with copies of original policies shall be deposited with Beneficiary;

7. To pay, at least ten (10) days before delinquency, any taxes and assessments affecting said Property when due, all encumbrances, charges and liens, with interest, on said Property or any part thereof which appear to be prior or superior hereto, all costs, fees and expenses of this Trust;

8. To keep said Property in good condition and repair, not to remove or demolish any buildings thereon; to complete or restore promptly and in good and workmanlike manner any building which may be constructed, damaged, or destroyed thereon and to pay when due all claims for labor performed and materials furnished therefor (unless contested in good faith if Trustor provides security satisfactory to Beneficiary that any amounts found to be due will be paid and no sale of the Property or other impairment of the s ecurity hereunder will occur); to comply with all laws affecting said Property or requiring any alterations or improvements to be made thereon; not to commit or permit waste thereof; not to commit, suffer or permit any act upon said Property in violation of law and/or covenants, conditions and/or restrictions affecting said Property; not to permit or suffer any alteration of or addition to the buildings or improvements hereafter constructed in or upon said Property without the consent of Beneficiary;

9. To appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee, and to pay all costs and expenses, including cost of evidence of title and attorneys’ fees in a reasonable sum, in any such action or proceeding in which Beneficiary or Trustee may appear; DRAFT
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10. Should Trustor fail to make any payment or do any act as herein provided, then Beneficiary or Trustee, but without obligation so to do and without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof, may make or do the same in such manner and to such extent as either may deem necessary to protect the security hereof. Beneficiary or Trustee, being authorized to enter upon said Property for such purposes, may commence, appear in and/or defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee; may pay, purchase, contest or compromise any encumbrance, charge, or lien which in the judgment of either appears to be prior or superior hereto; and, in exercising any such powers, may pay necessary expenses, employ counsel, and pay counsel’s reasonable fees;

11. Beneficiary shall have the right to pay fire and other property insurance premiums when due should Trustor fail to make any required premium payments. All such payments made by Beneficiary shall be added to the principal sum secured hereby;

12. To pay immediately and without demand all sums so expended by Beneficiary or Trustee, under permission given under this Deed of Trust, with interest from date of expenditure at the rate specified in the City Subordinate Loan Note;

13. That the City Subordinate Loan advanced hereunder is to be used in the development of the Property; and upon the failure of Trustor to keep and perform such covenants, the principal sum and all arrears of interest, and other charges provided for in the Cit y Subordinate Loan Note shall, at the option of Beneficiary, become due and payable, anything contained herein to the contrary notwithstanding;

14. Trustor further covenants that it will not voluntarily create, suffer or permit to be created against the Property, subject to this Deed of Trust, any lien or liens except as authorized by Beneficiary and further that it will keep and maintain the Property free from the claims of all persons supplying labor or materials which will enter into the construction of any and all buildings now being erected or to be erected on the Property;

15. That any and all improvements made or about to be made upon the Property, and all plans and specifications, comply with all applicable municipal ordinances and regulations and all other regulations made or promulgated, now or hereafter, by lawful authority, and that the same will upon completion comply with all such municipal ordinances and regulations and with the rules of the applicable fire rating or inspection organization, bureau, association or office;

16. Trustor herein agrees to pay to Beneficiary or to the authorized loan servicing representative of Beneficiary a charge not to exceed that permitted by law for providing a statement regarding the obligation secured by this Deed of Trust as provided by Section 2954, Article 2, Chapter 2, Title 14, Division 3 of the California Civil Code.

IT IS MUTUALLY AGREED THAT:

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17. Subject to the additional cure rights in Section 16 of the City Subordinate Loan Note, if the construction of any improvements as herein referred to shall not be carried on with reasonable diligence, or shall be discontinued at any time for any reason other than events of Force Majeure pursuant to Section 36 hereof, Beneficiary, after due notice to Trustor or any subsequent owner, is hereby invested with full and complete authority to enter upon the Property, employ watchmen to protect such improvements from depredation or injury and to preserve and protect the personal property therein, and to continue any and all outstanding contracts for the erection and completion of said building or buildings, to make and enter into any contracts and obligations whereve r necessary, either in its own name or in the name of Trustor, and to pay and discharge all debts, obligations and liabilities incurred thereby. All such sums so advanced by Beneficiary (exclusive of advances of the principal of the indebtedness secured he reby) shall be added to the principal of the indebtedness secured hereby and shall be secured by this Deed of Trust and shall be due and payable on demand;

18. In the event of any fire or other casualty to the Project or eminent domain proceedings resulting in condemnation of the Project or any part thereof, Trustor shall have the right to rebuild the Project, and to use all available insurance or condemnation proceeds therefor, provided that (a) such proceeds are sufficient to rebuild the Project in a manner that provides adequate security to Beneficiary for repayment of the City Subordinate Loan or if such proceeds are insufficient then Trustor shall have funded any deficiency, (b) Beneficiary shall have the right to approve plans and specifications for any major rebuilding and the right to approve disbursements of insurance or condemnation proceeds for rebuilding under a construction escrow or similar arrangemen t, and (c) no material default then exists under the City Subordinate Loan Note or this Deed of Trust.

If the casualty or condemnation affects only part of the Project and total rebuilding is infeasible, then proceeds may be used for partial rebuilding and partial repayment of the City Subordinate Loan in a manner that provides adequate security for repayment of the remaining balance of the City Subordinate Loan. The rights of the Beneficiary to any insurance proceeds or condemnation awards pursuant to this Section 18 are and shall be subject to the prior right to any insurance proceeds or condemnation awards of the beneficiary of the Senior Loan Deed of Trust described in Section 31;

19. Upon default by Trustor in making any payments provided for herein or in the City Subordinate Loan Note secured hereby, and if such default is not made good within ten (10) days after notice from Beneficiary, or if Trustor shall fail to perform any covenant or agreement in this Deed of Trust within thirty (30) days after written demand therefor by Beneficiary (or, in the event that more than thirty (30) days is reasonably required to cure such default, should Trustor fail to promptly commence such cure, and diligently prosecute same to completion), Beneficiary may declare all sums secured hereby immediately due and payable by delivery to Trustee of written declaration of default and demand for sale, and of written notice of default and of election to cause t he Property to be sold, which notice Trustee shall cause to be duly filed for record and Beneficiary may foreclose this Deed of Trust. Beneficiary shall also deposit with Trustee this Deed of Trust, the City Subordinate Loan Note and all documents evidenci ng expenditures secured hereby;
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20. After the lapse of such time as may then be required by law following the recordation of said notice of default, and notice of sale having been given as then required by law, Trustee, without demand on Trustor, shall sell said Property at the time and place fixed by it in said notice of sale, either as a whole or in separate parcels, and in such order as it may determine at public auction to the highest bidder for cash in lawful money of the United States, payable at time of sale. Trustee may postpone sale of all or any portion of said Property by public announcement at the time and place of sale, and from time to time thereafter may postpone the sale by public announcement at the time fixed by the preceding postponement. Trustee shall deliver to the purchas er its deed conveying the property so sold, but without any covenant or warranty, express or implied. The recitals in the deed of any matters or facts shall be conclusive proof of the truthfulness thereof.

Any person, including Trustor, Trustee or Beneficiary, may purchase at the sale. Trustee shall apply the proceeds of sale to payment of (1) the expenses of such sale, together with the reasonable expenses of this trust including therein reasonable Trustee’s fees or attorneys’ fees for conducting the sale, and the actual cost of publishing, recording, mailing and posting notice of the sale; (2) the cost of any search and/or other evidence of title procured in connection with such sale and revenue stamps on Trustee’s deed; (3) all sums expended under the terms hereof, not then repaid, with accrued interest at the rate specified in the City Subordinate Loan Note; (4) all other sums then secured hereby; and (5) the remainder, if any, to the person or persons legally entitled thereto;

21. Beneficiary may from time to time substitute a successor or successors to any Trustee named herein or acting hereunder to execute this Deed of Trust. Upon such appointment, and without conveyance to the successor trustee, the latter shall be vested with al l title, powers, and duties conferred upon any Trustee herein named or acting hereunder. Each such appointment and substitution shall be made by written instrument executed by Beneficiary, containing reference to this Deed of Trust and its place of record, which, when duly recorded in the proper office of the county or counties in which the property is situated, shall be conclusive proof of proper appointment of the successor trustee;

22. The pleading of any statute of limitations as a defense to any and all obligations secured by this Deed of Trust is hereby waived to the full extent permissible by law;

23. Upon written request of Beneficiary stating that all sums secured hereby have been paid, and upon surrender of this Deed of Trust and the City Subordinate Loan Note to Trustee for cancellation and retention and upon payment of its fees, Trustee shall reconvey, without warranty, the property then held hereunder. The recitals in such reconveyance of any matters of fact shall be conclusive proof of the truthfulness thereof.

The grantee in such reconveyance may be described as “the person or persons legally entitled thereto”;

24. The trust created hereby is irrevocable by Trustor;

25. This Deed of Trust applies to, inures to the benefit of, and binds all parties hereto, their heirs, legatees, devisees, administrators, executors, successors, and DRAFT
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assigns. The term “Beneficiary” shall include not only the original Beneficiary hereunder but also any future owner and holder including pledgees, of the City Subordinate Loan Note secured hereby. In this Deed of Trust, whenever the context so requires, the masculine gender includes the feminine and/or neuter, and the singular number includes the plural. All obligations of each Trustor hereunder are joint and several;

26. Trustee accepts this trust when this Deed of Trust, duly executed and acknowledged, is made public record as provided by law. Except as otherwise provided by law, Trustee is not obligated to notify any party hereto of pending sale under this Deed of Trust or of any action or proceeding in which Trustor, Beneficiary, or Trustee shall be a party unless brought by Trustee;

27. The undersigned Trustor requests that copies of any notice of default and of any notice of sale hereunder be mailed to it c/o MidPen Housing, 303 Vintage Park Drive, Suite 250, Foster City, California 94404.

28. Trustor agrees at any time and from time to time upon receipt of a written request from Beneficiary, to furnish to Beneficiary a detailed statement in writing of income, rents, profits, and operating expenses of the premises, and the names of the occupants and tenants in possession, together with the expiration dates of their leases and full information regarding all rental and occupancy agreements, and the rents provided for by such leases and rental and occupancy agreements, and such other information regarding the Property and their use as may be requested by Beneficiary.

29. The full principal amount outstanding plus accrued but unpaid interest thereon, shall be due and payable on the earlier to occur of the following:
(a) sale of the Property as provided further in this paragraph 29; unless in the case of a sale in which the sale proceeds are insufficient to repay in full the City Subordinate Loan, the Beneficiary approves such sale and the purchaser assumes the balance of the City Subordinate Loan in accordance with the terms of the City Subordinate Loan Note.
(b) In order to induce Beneficiary to make the loan evidenced hereby, Trustor agrees that in the event of any transfer of the Property without the prior written consent of Beneficiary (other than a transfer resulting from a foreclosure, or conveyance by deed in lieu of foreclosure, by the holder of the Senior Loan Deed of Trust), Beneficiary shall have the absolute right at its option, without prior demand or notice, to declare all sums secured hereby immediately due and payable. Consent to one such transaction shall not be deemed to be a waiver of the right to require consent to future or successive transactions. Beneficiary may grant or deny such consent in its sole discretion and, if consent should be given, any such transfer shall be subject to this paragraph 29, and any such transferee shall assume all obligations hereunder and agree to be bound by all provisions contained herein. Such assumption shall not, however, release Trustor from any liability thereunder without the prior written consent of Beneficiary.

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(c) As used herein, “ transfer” includes the sale, agreement to sell, transfer or conveyance of the Property, or any portion thereof or interest therein, whether voluntary, involuntary, by operation of law or otherwise, the execution of any installment land sale contract or similar ins trument affecting all or a portion of the Property, or the lease of all or substantially all of the Property. “ Transfer” shall not include the leasing of individual residential units on the Property or a refinancing of the Property. (d) The term “ Sale” means any transfer, assignment, conveyance or lease (other than to a tenant for occupancy) of the Property and/or the improvements thereon, or any portion thereof. Sale includes a sale in condemnation or under threat thereof. Sale does not include dedications and grants of easements to public and private utility companies of the kind customary in real estate development.

Notwithstanding anything to the contrary contained in this Deed of Trust or in the City Subordinate Loan Note, prior to declaring any default or taking any remedy permitted under this Deed of Trust, the City Subordinate Loan Note or applicable law based up on an alleged default, Trustor's limited partner shall have a period of not less than thirty (30) days to cure such alleged default; provided, however, if in order to cure such default Trustor's limited partner reasonably believes that it must remove a gen eral partner of Trustor, or all of them, Trustor's limited partner shall so notify Beneficiary and so long as Trustor's limited partner is reasonably and diligently attempting to remove the general partner or general partners, Trustor's limited partner sha ll have until the date thirty (30) days after the effective date of the removal of the general partner or general partners to cure such default.

30. Trustor shall permit Beneficiary and its agents or representatives, to inspect the Property at any and all reasonable times, with or without advance notice. Inspections shall be conducted so as not to interfere with the tenants’ use and enjoyment of the Property.

31. It is hereby expressly agreed and acknowledged by Trustor and Beneficiary that this Deed of Trust is a subordinate deed of trust, and that the City Subordinate Loan secured hereby, and the City Subordinate Loan Note are subject and subordinate only to the deed of trust securing a loan to Trustor in an approximate original principal amount not to exceed $____________ in which ______________________ (“ Senior Lender”) is the Beneficiary, including any loan that refinances the balance of the Senior Loan or an assignment of the Senior Loan (collectively referred to as the “Senior Loan”).

32. For purposes of this Deed of Trust, “Hazardous Materials” mean and include any hazardous, toxic or dangerous waste, substance or material including, without limitation, flammable explosives, radioactive materials, asbestos, hazardous wastes, toxic substances and any materials or substances defined as hazardous materials, hazardous substances or toxic substances in (or for purposes of) the Comprehensive Environmental Response, Compensation and Liability Act of 1380 (“ CERCLA”), as amended (42 U.S.C. §9601, et seq.), the Hazardous Materials Transportation Act (49 U.S.C. §1801 et seq.), the Resource Conservation and Recovery Act (42 U.S.C. §6901 et seq.) and those substances defined as hazardous wastes in §25117 of the California DRAFT
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Health and Safety Code or as hazardous substances in §25316 of the California Health and Safety Code or in any regulations promulgated under either such law, any so -called “Superfund” or “Superlien” law, or any other federal, state or local statute, law, ordinance, code, rule, regulation, order or decree regulating, relating to, or imposing liability or standards of conduct concerning any hazardous, toxic or dangerous waste, substance or material, as now or at any time hereafter in effect.

33. In addition to the general and specific representations, covenants and warranties set forth in the Deed of Trust or otherwise, Trustor represents, covenants and warrants, with respect to Hazardous Materials, as follows:
(a) Trustor has not caused or permitted any Hazardous Materials to be manufactured, placed, held, located or disposed of on, under or at the Property or any part thereof, and neither the Property nor any part thereof, or any property adjacent thereto, has ever been used as a manufacturing site, dump site or storage site (whether permanent or temporary) for any Hazardous Materials;
(b) Trustor hereby agrees to indemnify Beneficiary, its officers, employees, contractors and agents, and hold Beneficiary, its officers, employees, contractors and agents harmless from and against any and all losses, liabilities, damages, injuries, costs, expenses and claims of any and every kind whatsoever paid, incurred or suffered by, or asserted against Beneficiary, its officers, employees, contractors or agents for, with respect to, or as a direct or indirect result of, the presence or use, generation, storage, release, threatened release or disposal of Hazardous Materials on or under the Property or the escape, seepage, leakage, spillage, discharge, emission or release of any Hazardous Materials from the Property (including, without limitation, any losses, liabilities, damages, injuries, costs, expenses or claims asserted or arising under CERCLA, any so- called “Superfund” or “ Superlien” law, or any other federal, state or local statute, law, ordinance, code, rule, regulation, order or decree regulating, rel ating to or imposing liability or standards of conduct concerning any Hazardous Materials), caused by Trustor. (c) Trustor has not received any notice of (i) the happening of any event involving the use, spillage, discharge or cleanup of any Hazardous Materials (“Hazardous Discharge”) affecting Trustor or the Property or (ii) any complaint, order, citation or notice with regard to air emissions, water discharges, noise emissions or any other environmental, health or safety matter affecting Trustor or the Property (“ Environmental Complaint”) from any person or entity, including, without limitation, the United States Environmental Protection Agency (“ EPA”). If Trustor receives any such notice after the date hereof, then Trustor will give, within seven (7) business days thereafter, oral and written notice of same to Beneficiary.
(d) Without limitation of Beneficiary’s rights under this Deed of Trust, Beneficiary shall have the right, but not the obligation, to enter onto the Property or to take such other actions as it deems necessary or advisable to clean up, remove, resolve or minim ize the impact of, or otherwise deal with, any such Hazardous Materials or Environmental Complaint upon its receipt of any notice from any person or entity, including without limitation, the EPA, asserting the existence of any Hazardous Materials DRAFT
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or an Environmental Complaint on or pertaining to the Property which, if true, could result in an order, suit or other action against Trustor affecting any part of the Property by any governmental agency or otherwise which, in the sole opinion of Beneficia ry, could jeopardize its security under this Deed of Trust. All reasonable costs and expenses incurred by Beneficiary in the exercise of any such rights shall be secured by this Deed of Trust and shall be payable by Trustor upon demand together with interest thereon at a rate equal to the highest rate payable under the City Subordinate Loan Note secured hereby.

34. The following shall be an Event of Default:
(a) Failure of Trustor to pay, when due, principal and interest and any other sums or charges on the City Subordinate Loan Note, in accordance with the provisions set forth in the City Subordinate Loan Note and subject to any cure rights set forth therein;
(e) A violation of the terms, conditions or covenants of the City Subordinate Loan Note or this Deed of Trust; or
(f) A default under the Senior Loan Deed of Trust to which the lien of this Deed of Trust is subordinate.

35. Subject to the extensions of time set forth in paragraph 36, and subject to the further provisions of this paragraph 35 and of paragraph 37, failure or delay by the Trustor to perform any term or provision of this Deed of Trust constitutes a default under this Deed of Trust. The Trustor must immediately commence to cure, correct, or remedy such failure or delay and shall complete such cure, correction or remedy with reasonable diligence.
(b) The Beneficiary shall give written notice of default to the Trustor, specifying the default complained of by the Beneficiary. Delay in giving such notice shall not constitute a waiver of any default nor shall it change the time of default. (g) The Trustor shall not be in default so long as it endeavors to complete such cure, correction or remedy with reasonable diligence, provided such cure, correction or remedy is completed within thirty (30) days after receipt of written notice (or such additional time as may be deemed by the Beneficiary to be reasonably necessary to correct the cause).
(h) Any failures or delays by the Beneficiary in asserting any of its rights and remedies as to any default shall not operate as a waiver of any default or of any such rights or remedies. Delays by the Beneficiary in asserting any of its rights and remedies shall not deprive the Beneficiary of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert, or enforce any such rights or remedies.

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36. Notwithstanding specific provisions of this Deed of Trust, performance hereunder shall not be deemed to be in default where delays or defaults are due to: war; insurrection; strikes; lock-outs; riots; floods; earthquakes; fires; casualties; acts of God or other deities; acts of the public enemy; epidemics; quarantine restrictions; freight embargoes; lack of transportation; governmental restrictions or priority; litigation; unusually severe weather; inability to secure necessary labor, materials or tools; d elays of any contractor or supplier; acts of the other party; acts or failure to act of the Beneficiary, or any other public or governmental agency or entity (except that any act or failure to act of Beneficiary shall not excuse performance by Beneficiary) ; or any other causes beyond the reasonable control or without the fault of the party claiming an extension of time to perform. An extension of time for any such cause shall be for the period of the enforced delay and shall commence to run from the time the party claiming such extension gives notice to the other party, provided notice by the party claiming such extension is given within thirty (30) days after the commencement of the cause. Times of performance under this Deed of Trust may also be extended in writing by the Beneficiary and Trustor.

37. If a monetary event of default occurs under the terms of the City Subordinate Loan Note or this Deed of Trust, prior to exercising any remedies thereunder Beneficiary shall give Trustor written notice of such default. Trustor shall have a period of fifteen (15) days after such notice is given within which to cure the default prior to exercise of remedies by Beneficiary under the City Subordinate Loan Note and this Deed of Trust.

38. If a non -monetary event of default occurs under the terms of the City Subordinate Loan Note or this Deed of Trust, prior to exercising any remedies thereunder, Beneficiary shall give Trustor notice of such default. If the default is reasonably capable of being cured within thirty (30) days, Trustor shall have such period to effect a cure prior to exercise of remedies by the Beneficiary under the City Subordinate Loan Note and this Deed of Trust. If the default is such that it is not reasonably capable of being cured within thirty (30) days, and Trustor (a) initiates corrective action within said period, and (b) diligently, continually, and in good faith works to effect a cure as soon as possible, then Trustor shall have such additional time as is reasonably necessary to cure the default prior to exercise of any remedies by Beneficiary.

39. Upon the occurrence of an Event of Default as described in Section 34, Trustor shall be obligated to repay the City Subordinate Loan and, subject to the nonrecourse provision of the City Subordinate Loan Note, Beneficiary may seek to enforce payment of any and all amounts due by Trustor pursuant to the terms of the City Subordinate Loan Note.

40. All expenses (including reasonable attorneys’ fees and costs and allowances) incurred in connection with an action to foreclose, or the exercise of any other remedy provided by this Deed of Trust, including the curing of any Event of Default, shall be the responsibility of Trustor.

41. Except as provided in paragraph 31, each successor owner of an interest in the Property, other than through foreclosure, deed in lieu of foreclosure or an owner DRAFT
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who takes an interest in the Property after a foreclosure has occurred, shall take its interest subject to this Deed of Trust.

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TRUSTOR:

MP 1171 SONORA I ASSOCIATES, L.P., a
California limited partnership
BY: MP 1171 SONORA I LLC, a California
limited liability company, its general partner
BY: MID-PENINSULA BAKER PARK,
INC., a California nonprofit public benefit
corporation, its sole member/manager

By: __________________________
Matthew O. Franklin
President/CEO
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EXHIBIT A (TO EXHIBIT G OF THE DDA)

LEGAL DESCRIPTION OF PROPERTY
The land referred to is situated in the County of Santa Clara, City of Sunnyvale, State of California, and is described as follows:

All of Parcel 1, as shown upon that certain Map entitled, “Parcel Map being a Resubdivision of Parcel “B”, as shown on that certain Map entitled “Parcel Map” recorded in Book 384 of Maps, at Page 20 Santa Clara County Records, City of Sunnyvale, California”, which Map was filed for record in the Office of the Recorder of the County of Santa Clara, State of California on March 25, 1976, in Book 369 of Maps, at Page 15.

Excepting therefrom all oil, gas, petroleum and other mineral or hydrocarbon substances in and under the land, together with the right to use that portion only, of said land, which underlies a plane parallel to and 500 feet below the present surface of said land for the purposes of prospecting for, developing and/or extracting said oil, gas petroleum and other hydrocarbon substances from said land by means of wells drilled into said subsurface of said land from drill sites located on other land, with no rights of surface entry, as reserved in the Deed from Robert K. Chambers, et al, to West Bay Industrial Corp., dated May 13, 1974, recorded June 19, 1974, in Book B001 of Official Records, Page 243, Instrument No. 4812325.

APN: 205-50-024

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EXHIBIT H

AFFORDABLE HOUSING AGREEMENT AND

DECLARATION OF RESTRICTIVE COVENANTS

RECORDING REQUESTED BY:

CITY OF SUNNYVALE
AND WHEN RECORDED RETURN TO:

CITY OF SUNNYVALE
456 West Olive Avenue
Sunnyvale, California 94086
Attention: Director of Community Development
[Free Recording Requested
Government Code § 6103]

AFFORDABLE HOUSING AGREEMENT AND

DECLARATION OF RESTRICTIVE COVENANTS

(1171 Sonora Court Housing Project)

This AFFORDABLE HOUSING AGREEMENT AND DECLARATION OF
RESTRICTIVE COVENANTS ( “Agreement”) is entered into as of this ______ day of __________, ____, by and between the CITY OF SUNNYVALE, a California chartered municipal corporation (the “ City”), and MP 1171 SONORA I ASSOCIATES, L.P. , a California limited partnership (the “Developer”) (together the “Parties”), with reference to the following facts:

A. The City owns fee title to 1.3 acres of improved land located at 1171 Sonora Court (APN# 205-50-024) in the City of Sunnyvale and legally described as Parcel A on Exhibit A attached to this Agreement (the “Property”).

B. The City and the Developer have entered into a Disposition and Development Agreement dated ________________, 2024 (the “DDA”), pursuant to which the City will enter into a long-term ground lease with the Developer (the “Ground Lease”) for the Property.

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C. Pursuant to the DDA, the City has provided a loan to the Developer secured by the City Subordinate Deed of Trust (the “City Subordinate Loan”) for the purpose of developing an affordable housing project on the Property (the “Project”).

D. The Project shall provide one hundred seventy (17 0) affordable rental housing units for Extremely Low -, Very Low- and Low-Income Households as each are defined below (collectively “Lower -Income Households”) and two (2) unrestricted manager's unit for a total of one hundred seventy-two (172) units.

E. The Loan is to be provided by the City with funds from its Housing Mitigation Fund and Low and Moderate Income Housing Asset Fund. The City has agreed to lease the Property and make the Loan to the Developer on the condition that the Property be maintained and operated in accordance with restrictions concerning affordability, operation, and maintenance, as specified in this Agreement and the Ground Lease.

F. As a further condition of leasing the Property and providing the Loan to the Developer, the City requires the Developer to execute this Agreement to regulate one hundred seventy (170) of the units in the Project as “Assisted Units”, as more particularly described in Exhibit B of this Agreement, which is incorporated by this reference, to ensure that the units are occupied by and affordable to Lower-Income Households for the term of this Agreement.

NOW, THEREFORE, it is mutually agreed by and between the Parties as follows.

The Parties agree and acknowledge that the above recitals are true and accurate, and are incorporated into this Agreement by this reference.

1. DEFINITIONS AND EXHIBITS.

1.1. Definitions. The following terms have the following meanings in this Agreement:

“Adjusted Income” shall mean the total anticipated annual income of all persons in a household as calculated in accordance with 24 CFR 92.203(b)(1), which incorporates 24 CFR 5.609.

“Affordability Term” is the period that commences when the City issues an occupancy permit for or approves the final inspection of the Project, whichever occurs first, and that terminates eighty-five (85) years after such date.

“Agreement” shall mean this Affordable Housing Agreement and Declaration of Restrictive Covenants.

“Assisted Units” are defined in Exhibit B.

“Assumed Household Size ” shall mean, solely for the purposes of DRAFT
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establishing maximum rent limits for the Assisted Units, a household size equal to the number of bedrooms in the Assisted Unit, plus one. For example, the Assumed Household Size for a two- bedroom Assisted Unit shall be a household of three. Assumed Household Size is not intended to be used as a maximum occupancy limit for the Assisted Units.

“City” is defined in the first paragraph on page 1 of this Agreement.

“City Subordinate Loan” is defined in Recital C of this Agreement.

“City Subordinate Loan Documents ” means the City Subordinate Loan Agreement, the DDA, the City Subordinate Loan Note evidencing all or any part of the Loan, and the City Subordinate Loan Deed of Trust to the City on the Developer's leasehold interest in the Property which secures repayment of the Loan and the performance of terms of the City Subordinate Loan Note, and this Agreement.

“DDA” is defined in Recital B of this Agreement.

“Developer” is defined in the first paragraph on page 1 of this Agreement.

“Director” means the Community Development Director of the City or successor position, or his or her designee.
“Extremely Low -Income Household ” shall mean a household with an Adjusted Income that does not exceed the qualifying limits for extremely low -income households in Santa Clara County, as published by the California Tax Credit Allocation Committee (“TCAC”), which generally do not exceed thirty percent (30%) of area Median Income.

“Extremely Low-Income Rent” shall mean the maximum allowable rent for an Extremely Low Income Household pursuant to Section 2.2(d) below.

“Ground Lease” is defined in Recital B of this Agreement.

“Household Income ” means the combined gross, pre -tax income of all adult occupants of the applicant household, as calculated using the guidelines provided in California Code of Regulations, Title 25, Section 6914.

“Household Size ” shall mean the actual number of persons in the applicable household.

“Lower-Income Households” is defined in Recital D of this Agreement.

“Low-Income Household ” shall mean a household whose Adjusted Income is eighty percent (80%) or less of the area Median Income as determined by DRAFT
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TCAC.

“Low-Income Rent ” shall mean the maximum allowable rent for a Low Income household pursuant to Section 2.2(a) below.

“Median Income” shall mean the median gross yearly Household Income, adjusted for Household Size, in Santa Clara County, California, as published from time to time by TCAC. In the event that such income determinations are no longer published, or are not updated for a period of at least eighteen (18) months, the City shall provide the Developer with other income determinations which are reasonably similar with respect to methods of calculation to those previously published by TCAC.

“Parties” are defined in the first paragraph on page 1 of this Agreement.

“Project” is defined in Recital C.
“Property” is defined in Recital A.

“Rent” shall mean the total of monthly payments by the Tenant of an Assisted Unit for the following: use and occupancy of the Assisted Unit and land and associated facilities, including parking; any separately charged fees or service charges assessed by the Developer w hich are required of all Tenants, other than security deposits; an allowance for the cost of an adequate level of service for utilities individually metered and/or paid for separately by the Tenant, including garbage collection, sewer, water, electricity, gas and other heating, cooking and refrigeration fuel, but not telephone service, cable TV, or internet service; and any other interest, taxes, fees or charges for use of the land or associated facilities and assessed by a public or private entity other than the Developer, and paid by the Tenant.

“Tenant” is a household occupying an Assisted Unit.

“Tenant Selection Plan” is defined in Section 4.2 of this Agreement.

“Unit” for leasing and management purposes shall mean one of the 17 2 apartments in the Property.

“Very Low-Income Household” shall mean a household with an Adjusted Income that does not exceed the qualifying limits for very low income households, as published by TCAC, which generally do not exceed fifty percent (50%) of area Median Income.

“Very Low -Income Rent ” shall mean the maximum allowable rent for a Very Low Income Household pursuant to Section 2.2(b) below.

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1.2. Exhibits. The following exhibits are attached to this Agreement and incorporated by reference:

Exhibit A - Legal Description of the Property
Exhibit B - Schedule of Assisted Units

2. AFFORDABILITY AND OCCUPANCY COVENANTS.

2.1. Occupancy Requirements . The Developer shall cause all one hundred seventy (170) Assisted Units to be rented to and occupied by or, if vacant, available for occupancy by Lower-Income Households, all in accordance with the Schedule of Assisted Units set forth in Exhibit B.

2.2. Allowable Rent.

(a) Low-Income Rent. Rents (including utility allowance) charged to Tenants of Assisted Units in a Low Income Household shall not exceed one-twelfth (1/12) of thirty percent (30%) of eighty percent (80%) of Median Income limit for Santa Clara County, as published by TCAC, and adjusted for Assumed Household Size.

(b) Very Low -Income Rent . Rents (including utility allowance) charged to Tenants of Assisted Units in a Very Low Income Household shall not exceed one-twelfth (1/12) of thirty percent (30%) of fifty percent (50%) of Median Income limit for Santa Clara County, as published by TCAC, adjusted for Assumed Household Size.

(c) Extremely Low-Income Rent. Rents (including utility allowance) charged to Tenants of Assisted Units in an Extremely Low Income Household shall not exceed one - twelfth (1/12) of thirty percent (30%) of thirty percent (30%) of Median Income limit for Santa Clara County, as published by TCAC, adjusted for Assumed Household Size.

(d) City Approval of Rents . Initial Rents for all Assisted Units shall be approved by the City prior to occupancy. Any subsequent rent increases shall also be subject to the maximum rent limits defined above. The City shall provide the Developer with a schedule of maximum permissible rents for the Assisted Units annually based on the formulas described in Section 2.2 above. The Rent limits are adjusted annually by the City following the annual release of county area median income statistics by TCAC, or in the e vent such statistics are no longer provided by TCAC, comparable statistics available from another reliable source, such as the U.S. Department of Housing and Urban Development or the U.S.

Census Bureau. Notwithstanding anything to the contrary set forth herein, in the event that the Median Income limit decreases in any given calendar year, Owner DRAFT
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is permitted to apply the "hold harmless" policy (“Policy”) implemented by TCAC pursuant to the Housing and Economic Recovery Act of 2008 (H.R. 3221). The Policy states that, as of the date of placed -in-service, (or rent floor election date, available afte r TCAC award/reservation), rent limits for a given calendar year cannot be lower than the highest amount of rent limits for each calendar year since placed-in-service.

2.3. Increased Income of Tenants.

(a) Non-Qualifying Household. If, upon recertification of the income of a Tenant of an Assisted Unit, the Developer determines that

(i) A former Extremely Low -Income Household's Adjusted Income has increased and exceeds the income limit for an Extremely Low-Income Household as defined above but does not exceed the income limit for a Very Low Income Household, such Tenant shall be permitted to continue to occupy the Unit and, then, upon expiration of the Tenant's lease such Tenant's Rent shall be increased to the Very Low Income Rent Limit, upon sixty (60) days' written notice to Tenant, and the next available Very Low Income Unit shall be rented to an Extremely Low-Income Household in compliance with Exhibit B; and/or

(ii) A former Extremely -Low, or Very Low-Income Household's Adjusted Income has increased and exceeds the income limit for a Ve ry Low- Income Household as defined above but does not exceed the income limit for a Low-Income Household, such Tenant's rent shall be increased to the Low-Income Rent Limit, upon sixty (60) days' written notice to Tenant, and the next available Low-Income Unit shall be rented to an Extremely Low - or Very Low -Income Household in compliance with Exhibit B; and/or

(iii) A former Extremely Low -Income, Very Low -Income, or Low - Income Household's Adjusted Income has increased and exceeds the income limit for a Low-Income Household as defined above, upon sixty (60) days' written notice to Tenant, such Tenant's rent shall be increased to 30% of the Tenant's actual monthly Household Income and the next available Assisted Unit shall be rented to an Extremely Low -, Very Low -, or Low -Income Household in compliance with Exhibit B. If such an increase is expressly prohibited under a d eed restriction of a lienholder senior to the City lien, or federal IRS tax credit regulations applicable to the Project at the time or the regulations of the California Tax Credit Allocation Committee, the rent shall remain at the then -current Low-Income Limit, an d the number of Low -Income Units occupied by Tenants with incomes over the Low Income limit shall be reported to the City on an annual basis in Developer's annual reports to the City as required under this Agreement.

(b) Termination of Occupancy . Upon termination of occupancy of an Assisted Unit by a Tenant, such Assisted Unit shall be deemed to be continuously DRAFT
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occupied by a household of the same income level (e.g., Extremely Low Income, Very Low Income Household or Low Income) as the initial income level of the vacating Tenant, until such Assisted Unit is reoccupied, at which time the status of the Assisted Unit shall be determined based on the income level of the new Tenant.

(c) Lease Provisions. The Developer shall use a form of Tenant lease approved by the City for the Assisted Units. The Tenant lease form shall, among other matters:

(i) provide for termination of the lease for failure: (1) to provide any information required under this Agreement or reasonably requested by the Developer to establish or recertify the Tenant's qualification, or the qualification of the Tenant's household, fo r occupancy of the Assisted Units in accordance with this Agreement, or (2) to qualify as a Lower Income Household as a result of any material misrepresentation made by such Tenant with respect to the income computation or certification;

(ii) provide that the Rent may not be raised more often than once every twelve (12) months. The Developer will provide each Tenant with at least thirty (30) days written notice of any increase in Rent applicable to such Tenant, and with such further notice as may be required by this Section, State law or any other regulatory requirements applicable to the Project; (iii) prohibit subleasing of the Assisted Unit or any portion of the unit, contain nondiscrimination provisions, and include the Tenant's obligation to inform the Developer of any need for maintenance or repair;

(iv) include reasonable rules of conduct consistent with California law; and

(v) allow termination of the tenancy only for good cause, including violation of the terms and conditions of the lease, violations of applicable federal, state, or local law, or other good cause.

2.4. Adjustments to Affordability and Occupancy Covenants.

(a) TCAC Provisions . Notwithstanding anything contained in this Agreement to the contrary, if and when the Assisted Units are subject to the requirements of the California and/or Federal Low -Income Housing Tax Credit Program under the provisions of Section 42 of the Code and /or Section 23610.5 of the California Revenue and Taxation Code, as applicable (collectively, the “ Tax Credit Program ”) and are anticipating being subject to a recorded regulatory agreement that meets standards established by the California Tax Credit Allocation Committee (“TCAC”), if the applicable Tax Credit Program rents, income levels, or household sizes approved by TCAC conflict with the requirements of this Agreement, then Developer may apply the Tax Credit DRAFT
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Program requirements for rents, income levels, and household sizes.

(b) Foreclosure Provisions or Loss of Subsidy . If (i) title to the Ground Lease is transferred through foreclosure or deed in lieu of foreclosure under any Mortgage (as defined in the Ground Lease) or (ii) there is a loss or reduction of the Section 8 rental subsidies or other rental subsidies and depletion of any transition reserve, if any; or (iii) upon the maturity date of the City Subordinate Loan then Developer may increase the Rent on one or more of the Assisted Units, to the Low Income Rent, subject to the following requirements:

(i) At the time Developer requests an increase in the Rent, Developer shall provide the City with an updated Pro Forma Budget (as defined in the Ground Lease) for the Development for the City's approval pursuant to Section

8.1 of the Ground Lease, showing the need for the increase;

(ii) The number of Units subject to the Rent increase and the level of rent increase may not be greater than the amount required to ensure that the Development generates sufficient income to cover its operating costs and debt service as shown on the Pro Forma Budget and/or to pay off the outstanding debt when due, and as is necessary to maintain the financial stability of the Project; and

(iii) Any such Rent increase must be pursuant to a
transition plan approved by the City, consistent with remedial measures set forth in California Code of Regulations Title 4, Division 17, Chapter 1, Section 10337(a)(3) or successor regulation applicable to the Tax Credit Program.

Developer shall use good faith efforts to obtain sources of rental subsidies and shall provide the City with annual progress reports on efforts to obtain sources of rental subsidies that would allow the rents on the Assisted Units to be reduced back to the Rents set out in Section 2.2 of this Agreement. Upon receipt of any rental subsidies, Developer shall reduce the rents on the Assisted Units back to the Rents set out in Section 2.2 of this Agreement, to the extent that the rental subsidies provide suffic ient income to cover the operating costs and debt service of the Project as shown on the Pro Forma Budget.

3. INCOME CERTIFICATION AND REPORTING.

3.1. Income Certification . The Developer will obtain, complete and maintain on file, immediately prior to initial occupancy and annually thereafter, income certifications from each Tenant renting any of the Assisted Units. The Developer shall make a good faith effort to verify tha t the income provided by an applicant or occupying household in an income certification is accurate by taking two or more of the following steps as a part of the verification process: (a) obtain a pay stub for the most recent two pay periods; (b) obtain an income tax return for the most recent tax year; (c) conduct a credit agency or similar search; (d) obtain an income verification form from the applicant's DRAFT
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current employer; (e) obtain an income verification form from the Social Security Administration and/or the California Department of Social Services if the applicant receives assistance from either of such agencies; or (f) if the applicant is unemployed and has no such tax return, obtain another form of independent verification, such as an affidavit signed by the applicant under penalty of perjury, a court order of support, or similar verification. Copies of Tenant income certifications shall be available t o the City upon request. The initial Household Income certification shall be consistent with the “Part 5 Method” described in 24 CFR 5.609.

3.2. Annual Report to the City . The Developer shall submit to the City (a) not later than the ninetieth (90th) day after the close of each fiscal year, or such other date as may be requested by the City but in no event earlier than the ninetieth (90th) day after the close of each fisca l year, a statistical report in a form acceptable to the City verifying compliance by Developer with the terms of this Agreement and certified as correct by the Developer under penalty of perjury. The annual report shall include without limitation the following information:

(a) Certifications of eligibility for all Tenants of Assisted Units at the time of initial occupancy and upon the yearly anniversary of their continuing tenancies. Such certification shall include copies of the income certifications required by subparagraph (a) of this Section for all Tenants renting any of the Assisted Units and the number of persons occupying each Assisted Unit.

(b) Certification of the amount of Rent charged for the year for all Assisted Units.

(c) Other information reasonably required by the City related directly to the income eligibility of a Tenant or the Rent charged for an Assisted Unit.

3.3. Additional Information. Within thirty (30) days after receipt of a written request from the City, Developer shall provide any other information or completed forms reasonably requested by the City to ensure compliance with this Agreement. The City shall have the right to examine and make copies of all books, records or other documents of the Developer which pertain to the Project.

3.4. Records. The Developer shall maintain complete, accurate and current records pertaining to the Project, and shall permit any duly authorized representative of the City to inspect records, including records pertaining to income of Tenants. All Tenant lists, applications and waiting lists relating to the Project shall at all times be kept separate and identifiable from any other business of the Developer and shall be maintained as required by the City, in a reasonable condition for proper audit and subject to examination during business hours by representatives of the City. The Developer shall retain c opies of all materials obtained or produced with respect to occupancy of the Assisted Units for a period of at least five (5) years.

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3.5. On-site Inspection. The City shall have the right to perform an on- site inspection of the Project at least one time per year with adequate notice to Developer, of a minimum of thirty (30) days. The Developer agrees to cooperate in such inspection.

4. OPERATIONS AND PROPERTY MAINTENANCE.

4.1. Tenant Selection and Marketing Plan.

(a) Developer shall provide for City review and approval, no later than six (6) months prior to the projected date of completion of construction of the Project, a detailed plan for marketing the Assisted Units, compliance with fair housing laws and Developer’s tenant selection and wait list procedures for the Assisted Units (the “Tenant Selection Plan”).

(b) City will review the Tenant Selection Plan and approve or disapprove it within thirty (30) days after receipt. If the Tenant Selection Plan is not approved, the Developer shall submit a revised Tenant Selection Plan within thirty (30) days, and the City shall approve or disapprove it within fifteen (15) days after submission.

If the City does not approve the revised Tenant Selection Plan, the Developer shall be in default hereunder. If the City fails to approve or disapprove the Tenant Selection Plan within thirty (30) days of submission it shall be deemed approved.

(c) The Tenant Selection Plan shall include a period of at least two weeks of marketing and outreach targeted primarily to Sunnyvale residents and workers.

To the extent possible without conflicting with the non -discrimination provisions of this Agreement or w ith the requirements of other Project funding agencies and/or state or federal fair housing laws, the Tenant Selection Plan shall provide local preference for applicants who reside within Sunnyvale city limits and applicants with at least one adult household member who is employed within Sunnyvale.

(d) City acknowledges that Santa Clara County prohibits a local preference in permanent supportive housing units that are referred from the Coordinated Entry intake process; and that Santa Clara County Housing Authority prohibits local preference in units that receive Project Based Vouchers and that therefore the local preference required under Section 4.1(c) shall not apply to the Assisted Units that either receive Project Based Vouchers or are designated as permanent supportive housing Units.

4.2. Management Responsibilities. The Developer is responsible for all management functions with respect to the Project, including, without limitation, the annual certification and recertification of Household Size and income, evictions, collection of rents and deposits, maintenance, lan dscaping, routine and extraordinary repairs, replacement of capital items, and security. The City shall have no responsibility over management of the Project. The Developer shall retain a professional property DRAFT
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management company approved by the City in its reasonable discretion to perform its management duties hereunder, unless the City approves self - management by the Developer. A resident manager shall also be required. The City hereby approves MidPen Property Management as the property management company.

(a) Accounting Records . In a manner subject to City approval, the Developer shall maintain, on an accrual or modified accrual basis, a general ledger accounting system that is posted monthly and that accurately and fully shows all assets, liabilities, income and expenses of the Project, and shall cause to be prepared an annual independent fiscal audit conducted in accordance with generally accepted accounting principles. All records and books relating to this system shall be kept for a period of at least seven years and in such a manner as to ensure that the records are reasonably protected from destruction or tampering. All records shall be subject to City inspection and audit upon reasonable notice.
(b) Use of Income from Operations . The Developer, or its management agent, shall promptly deposit all operating income in a segregated account established exclusively for the Project with an FDIC or other comparable federally-insured financial institution.

4.3. Management Agent; Periodic Reports . Unless the City approves self-management by the Developer, the Project shall at all times be managed by an experienced management agent reasonably acceptable to the City, with demonstrated ability to operate residential facilities like the Project in a manner that will provide decent, safe, and sanitary housing (as approved, the “Management Agent”). The Developer shall submit for the City's approval the identity of any proposed Management Agent. The Developer shall also submit such additional information about the background, experience and financial condition of any proposed Management Agent as is reasonably necessary for the City to determine whether the proposed Management Agent meets the standard for a qualified Management Agent set forth above. If the proposed Management Agent meets the standard for a qualified Management Agent set forth above, the City shall approve the proposed Management Agent by notifying the Developer in writing.

Unless the proposed Manageme nt Agent is disapproved by the City within thirty (30) days, which disapproval shall state with reasonable specificity the basis for disapproval, it shall be deemed approved.

4.4. Performance Review . The City reserves the right to conduct an annual (or more frequently, if deemed necessary by the City) review of the management practices and financial status of the Project. The purpose of each periodic review will be to enable the City to determine if the Project is being operated and managed in accordance with the requirements and standards of this Agreement. The Developer shall cooperate with the City in such reviews.

4.5. Replacement of Management Agent . If, as a result of a periodic review, the City determines in its reasonable judgment that the Project is not being DRAFT
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operated and managed in accordance with any of the material requirements and standards of this Agreement, the City shall deliver notice to Developer of its intention to cause replacement of the Management Agent, or, if the Project is being self-managed, to cause the Developer to retain a Management Agent, including the reasons therefor.

Within fifteen (15) days of receipt by Developer of such written notice, City staff, as applicable, and the Developer shall meet in good faith to consider methods for improving the financial and operating status of the Project, including, without limitation, replacement of the Management Agent.

If, after such meeting, City staff, as applicable, recommends in writing the replacement of the Management Agent, Developer shall promptly dismiss the then Management Agent, or cease self -management if the Project is self -managed and shall appoint as the M anagement Agent a person or entity meeting the standards for a Management Agent set forth above and approved by the City.

Any contract for the operation or management of the Project entered into by Developer shall provide that the contract can be terminated as set forth above. Failure to remove the Management Agent or to appoint a Management Agent instead of self - management in accordance with the provisions of this Section shall constitute default under this Agreement, and the City may enforce this provision through legal proceedings.

Section 4.6. Approval of Management Policies . Within thirty (30) days after receipt of a written request from the City, the Developer shall submit its written management policies with respect to the Project to the City for its review. The Developer shall amend such policies in any way reasonably requested by the City in writing to ensure that such policies comply with the provisions of this Agreement.

Section 4.7. Property Maintenance. The Developer agrees, for the entire Term of this Agreement, to maintain all interior and exterior improvements, including landscaping, on the Property in good condition and repair (and, as to landscaping, in a healthy condition) and in accordance with a ll applicable laws, rules, ordinances, orders and regulations of all federal, state, City, municipal, and other governmental agencies and bodies having or claiming jurisdiction and all their respective departments, bureaus, and officials. The Developer shall make all repairs and replacements necessary to keep the improvements in good condition and repair.

5. ENFORCEMENT.

5.1. Covenants Running with the Land. The City and Developer hereby declare their express intent that the covenants and restrictions set forth in this Agreement shall apply to and bind Developer and its heirs, executors, administrators, successors, transferees, and assignees having or acquiring any right, title or interest in or to any part of the Property and shall run with and burden such portions of the Property until the end of the Affordability Term. Until all or portions of the Property are expressly released from the burdens of this Ag reement, each and every contract, deed or other instrument DRAFT
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hereafter executed covering or conveying the Property or any portion thereof shall be held conclusively to have been executed, delivered, and accepted subject to such covenants and restrictions, regardless of whether such covenants or restrictions are set forth in such contract, deed or other instrument. In the event of foreclosure or transfer by deed -in-lieu of all or any portion of the Property prior to the end of the Affordability Term, title to all or any portion of the Property shall be taken subject to this Agreement.

5.2. Compliance with Ground Lease, Loan Documents . Developer's actions with respect to the Project and the use of funds provided herein shall at all times be in full conformity with all requirements of the Ground Lease and the Loan Documents.

5.3. Default. If the Developer fails to perform any obligation under this Agreement, and fails to cure the default within thirty (30) days after the City has notified the Developer in writing of the default or, if the default cannot be cured within thirty (30) days, fails to commence to cure within thirty (30) days and thereafter diligently pursue such cure and complete such cure within ninety (90) days, the City shall have the right to enforce this Agreement by any or all of the following actions, or any other remedy provided by law:

(a) Calling the Loan . The City may declare a default under the Loan Documents, accelerate the indebtedness evidenced by the City Subordinate Loan Note, including outstanding principal and interest, and demand immediate repayment thereof.

Upon failure to repay such accelerated amount in full, the City may proceed with a foreclosure in accordance with the provisions of the Loan Documents and State law regarding foreclosures.
(b) Collect Rents. Collect all rents and income in connection with the operation of the Project and use the same and the reserve funds for the operation and maintenance of the Project.

(c) Excess Rents. In the event that the breach or violation involves the rents to Tenants or other charges in excess of those permitted under this Agreement, the City may demand, and seek as an additional remedy, the return of such excess rents or other charge to the affected households.

(d) Action to Compel Performance or for Damages . The City may bring an action at law or in equity to compel the Developer's performance of its obligations under this Agreement, and/or for damages, or for the appointment of a receiver to take over and operate the Project in accordance with the terms of this Agreement or for such other relief as may be appropriate.

(e) Remedies Provided Under DDA or the Loan Documents. The City may exercise any other remedy provided under the DDA or the Loan Documents.

(f) Remedies Cumulative . The remedies of the City hereunder are DRAFT
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cumulative, and the exercise of one or more of such remedies shall not be deemed an election of remedies and shall not preclude the exercise by the City of any one or more of its other remedies.

Notwithstanding anything to the contrary contained in this Agreement, prior to declaring any default or taking any remedy permitted under this Agreement or applicable law based upon an alleged default, __________________ (the “Investor Limited Partner”) shall have a period of not less than thirty (30) days to cure such alleged default; provided, however, if in order to cure such default the Investor Limited Partner reasonably believes that it must remove a general partner of Developer, or all of them, pursuant to that certain Amended and Restated Agreement of Limited Partnership dated on or around the date of this Agreement, shall so notify the City and so long as the Investor Limited Partner is reasonably and diligently attempting to remove the general part ner or general partners, the Investor Limited Partner shall have until the date thirty (30) days after the effective date of the removal of the general partner or general partners to cure such default.

5.4. Attorney's Fees and Costs . In any action brought to enforce this Agreement, the prevailing party shall be entitled to all costs and expenses of suit, including reasonable attorneys' fees. This section shall be interpreted in accordance with California Civil Code Section 1717 and judicial decisions interpreting that statute. In the event litigation is not instituted, the City shall be entitled to receive from the Developer, or any person violating the requirements of this Agreement, the costs of enforcing this Agreement, including without limitation reasonable attorn eys' fees and the costs of City staff time.

6. GENERAL PROVISIONS.

6.1. Appointment of Other Agencies. At its sole discretion, the City may designate, appoint or contract with any other public agency or for -profit or non -profit organization to perform some or all of the City's obligations under this Agreement.

6.2. Nondiscrimination. Except as specified in this Agreement, all of the Assisted Units shall be available for occupancy on a continuous basis to members of the general public who are income eligible and otherwise eligible for the applicable unit type and/or preference as desc ribed in the approved Tenant Selection Plan. The Developer shall not give preference to any particular class or group of persons in renting or selling the Units, or any part of the Project except to the extent that the Units are requ ired to be leased to eligible households as described herein and to the extent that preference is to be provided to Sunnyvale residents and individuals employed in Sunnyvale as described in the Tenant Selection Plan, while complying with state and federal fair housing laws.

There shall be no discrimination against or segregation of any person or group of persons, on account of race, color, creed, religion, sex, sexual orientation, marital status, national origin, veteran status, source of income (e.g., SSI) , age, ancestry, or disability, in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of any Unit or in DRAFT
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the use or enjoyment of the Project, nor shall the Developer or any person claiming under or through the Developer, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy, of tenants, lessees, sublessees, subtenants, or vendees of any Unit or any part of the Project or in connection with the employment of persons for the construction, operation and management of any Project.

6.3. Section 8 Certificate Holders . The Developer will accept as Tenants, on the same basis as all other prospective Tenants, persons who are recipients of federal certificates for rent subsidies pursuant to the existing housing program under Section 8 of the United States Housing Act, or its successor. The Developer shall not apply selection criteria to Section 8 certificate or voucher holders that are more burdensome than criteria applied to all other prospective Tenants, nor shall the Developer apply or permit the application of management policies or lease provisions with respect to the Project which have the effect of precluding occupancy of Assisted Units by such prospective Tenants.

6.4. Notice of Expiration of Affordability Term . The Developer shall provide all notifications required by Government Code Sections 65863.10 and 65863.11 or successor provisions and any other notification required by federal, state or local law.

The Developer shall file a copy of any notices sent by th e Developer pursuant to this Section 6.4 with the City. At least six (6) months prior to the expiration of the Affordability Term, the Developer shall provide by first -class mail, postage prepaid, a notice to all Tenants in City Assisted Units containing (a) the anticipated date of the expiration of the Affordability Term, (b) any anticipated Rent increase upon the expiration of the Affordability Term, (c) a statement that a copy of such notice will be sent to the City, and (d) a statement that a public hearing may be held by the City on the issue and that the Tenant will receive notice of the hearing at least fifteen (15) days in advance of any such hearing. The Developer shall also file a copy of the above -described notice with the Housing Officer of the City.

6.5. Hold Harmless . Developer will indemnify and hold harmless (without limit as to amount) City and its elected officials, officers, employees and agents in their official capacity (hereinafter collectively referred to as “Indemnitees”), and any of them, from and against a ll loss, all risk of loss and all damage (including expense) sustained or incurred because of or by reason of any and all claims, demands, suits, actions, judgments and executions for damages of any and every kind and by whomever and whenever made or obtai ned, allegedly caused by, arising out of or relating in any manner to the Project, the Assisted Units, or Developer's performance or non - performance under this Agreement, including claims pursuant to California Labor Code Section 1720 et seq., provided, however, such indemnification obligations created by this Agreement shall not extend to repayment of principal and interest under the promissory note, and shall protect and defend Indemnitees, and any of them with respect thereto, except to the extent arising from the gross negligence or willful misconduct of the City or its elected officials, officers, employees or agents. The provisions of this Section shall DRAFT
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survive expiration or other termination of this Agreement or any release of part or all of the Property from the burdens of this Agreement, and the provisions of this Section shall remain in full force and effect.

6.6. Notices. All notices required pursuant to this Agreement shall be in writing and may be given by personal delivery or by registered or certified mail, return receipt requested, to the Party to receive such notice at the addressed set forth below:

TO THE CITY:

City of Sunnyvale
Community Development Department
456 W. Olive Ave. Sunnyvale, CA 94086
Attn: Director of Community Development
TO THE DEVELOPER:

MP 1171 Sonora I Associates, L.P.
303 Vintage Park Drive, Suite 250
Foster City, CA 94404
Attn: President/CEO

Any Party may change the address to which notices are to be sent by notifying the other Parties of the new address, in the manner set forth above.

6.7. Integrated Agreement . This Agreement constitutes the entire Agreement between the Parties and no modification hereof shall be binding unless reduced to writing and signed by the Parties hereto.

6.8. Each Party's Role in Drafting the Agreement . Each Party to this Agreement has had an opportunity to review the Agreement, confer with legal counsel regarding the meaning of the Agreement, and negotiate revisions to the Agreement.

Accordingly, neither Party shall rely upon Civil Code Section 1654 in order to interpret any uncertainty in the meaning of the Agreement.

6.9. Amendment of Agreement. Major amendments to this Agreement, including any proposal to make any material changes in the Project, the DDA, or the Loan Documents shall be subject to the review and approval of the decision-making body which approved the Project. Minor amendments to this Agreement may be approved by the Director. Upon approval, a new Agreement containing the amendments shall be executed and recorded.

6.10. No Claims . Nothing contained in this Agreement shall create or justify any claim against the City by any person that Developer may have employed or with whom Developer may have contracted relative to the purchase of materials, supplies DRAFT
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or equipment, or the furnishing or the performance of any work or services with respect to the Property or the construction of the Project or construction of the Assisted Units.

6.11. Applicable Law . This Agreement shall be governed by California law. Venue shall be the County of Santa Clara.

6.12. Waivers. Any waiver by the City of any obligation or condition in this Agreement must be in writing. No waiver will be implied from any delay or failure by the City to take action on any breach or default of Developer or to pursue any remedy allowed under this Ag reement or applicable law. Any extension of time granted to Developer to perform any obligation under this Agreement shall not operate as a waiver or release from any of its obligations under this Agreement. Consent by the City to any act or o mission by Developer shall not be construed to be a consent to any other or subsequent act or omission or to waive the requirement for the City's written consent to future waivers.

6.13. Title of Parts and Sections. Any titles of the sections, subsections, or subparagraphs of this Agreement are inserted for convenience of reference only and shall be disregarded in interpreting any part of the Agreement's provisions.

6.14. Multiple Originals; Counterpart. This Agreement may be executed in multiple originals, each of which is deemed to be an original, and may be signed in counterparts.

6.15. Recording of Agreement . The Developer shall cause this Agreement to be recorded against the Property in the Official Records of the County of Santa Clara.

6.16. Severability. In the event any limitation, condition, restriction, covenant, or provision contained in this Agreement is to be held invalid, void or unenforceable by any court of competent jurisdiction, the remaining portions of this Agreement shall nevertheless be and remain in full force and effect.

[remainder of page intentionally left blank]

[signature page next page]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed on the dates hereinafter respectively set forth.

DEVELOPER:

MP 1171 SONORA I ASSOCIATES, L.P., a California limited partnership
BY: MP 1171 SONORA I LLC, a California limited liability company, its general partner
BY: MID-PENINSULA BAKER PARK, INC., a
California nonprofit public benefit corporation, its sole member/manager

By: ______________________________
Matthew O. Franklin
President/CEO

[signatures continue on next page]

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CITY:

CITY OF SUNNYVALE,
a municipal corporation

By: ______________________________
Tim Kirby
City Manager

APPROVED AS TO FORM:

By: ________________________
Rebecca Moon
City Attorney

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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 )
) SS.

COUNTY OF )
On _________________________, 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(ies) 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 of Notary Public
[SEAL]
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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 )
) SS.

COUNTY OF )
On _________________________, 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(ies) 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 of Notary Public
[SEAL]

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EXHIBIT A (TO EXHIBIT H OF THE DDA)

LEGAL DESCRIPTION OF PROPERTY
The land referred to is situated in the County of Santa Clara, City of Sunnyvale, State of California, and is described as follows:

All of Parcel 1, as shown upon that certain Map entitled, “Parcel Map being a Resubdivision of Parcel “B”, as shown on that certain Map entitled “Parcel Map” recorded in Book 384 of Maps, at Page 20 Santa Clara County Records, City of Sunnyvale, California”, which Map was filed for record in the Office of the Recorder of the County of Santa Clara, State of California on March 25, 1976, in Book 369 of Maps, at Page 15.

Excepting therefrom all oil, gas, petroleum and other mineral or hydrocarbon substances in and under the land, together with the right to use that portion only, of said land, which underlies a plane parallel to and 500 feet below the present surface of said land for the purposes of prospecting for, developing and/or extracting said oil, gas petroleum and other hydrocarbon substances from said land by means of wells drilled into said subsurface of said land from drill sites located on other land, with no rights of surface entry, as reserved in the Deed from Robert K. Chambers, et al, to West Bay Industrial Corp., dated May 13, 1974, recorded June 19, 1974, in Book B001 of Official Records, Page 243, Instrument No. 4812325.

APN: 205-50-024
.

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EXHIBIT B (TO EXHIBIT H OF THE DDA)

SCHEDULE OF ASSISTED UNITS

The Developer shall use the Project as rental housing and ancillary purposes with one hundred seventy-two (172) total units, used as follows:

• The one hundred seventy (170) Assisted Units in the Project shall be rented to Extremely Low Income, Very Low Income and Low-Income Households, whose Adjusted Income do not exceed the incomes required by the Tax Credit Program. Without limiting the generality of the foregoing, (a) the average maximum permitted household incomes of tenants occupying Assisted Units in the Project shall not exceed fifty percent (50%) of area median income as published by TCAC upon initial occupancy, and (b) at least twenty percent (20%) of the Assisted Units in the Project shall be rented to households whose incomes do not exceed thirty percent (30%) of area median income upon initial occupancy. The City and the Partnership acknowledge and agree that the affordability restrictions set forth in the Affordable Housing Agreement may be modified prior to Construction Loan Closing if required as part of approval by the City and the Partnership of the Final Project Budget;

• Two manager's units can be rented without income limitation; and

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EXHIBIT I

MEMORANDUM OF UNRECORDED GROUND LEASE
1171 Sonora Court - Housing Project

RECORDING REQUESTED BY AND
WHEN RECORDED RETURN TO:

City of Sunnyvale
456 West Olive Avenue
Sunnyvale, CA 94086
Attn: Director of Community Development

AND MAIL TAX STATEMENTS TO:

MP 1171 Sonora I Associates, L.P.
303 Vintage Park Drive, Suite 250
Foster City, California 94404
Attn: President/CEO

APN: 205-50-024 [Free Recording Requested]
[Government Code Section 6103]

MEMORANDUM OF UNRECORDED GROUND LEASE
1171 Sonora Court - Housing Project
THIS MEMORANDUM OF UNRECORDED LEASE (the “Memorandum”), dated as of ____________, ___, for identification purposes only, is made by and between CITY OF SUNNYVALE , a California chartered municipal corporation (“ Landlord”), and MP 1171 SONORA I ASSOCIATES L.P., a California limited partnership (“ Tenant”), with reference to the following:

RECITALS
A. WHEREAS, concurrently herewith, Landlord and Tenant have entered into that certain Ground Lease dated as of _____________, _____ (the “ Ground Lease”); and
B. WHEREAS, Landlord and Tenant desire to enter into this Memorandum to provide for the Ground Lease and to place it of record.

NOW, THEREFORE, Landlord and Tenant hereby agree as follows:

1. Landlord and Tenant are party to that certain unrecorded Ground Lease dated as of __________, ___, for the premises (“ Premises”) located in Sunnyvale, California, as more specifically described on Exhibit A attached hereto. The term of the Ground Lease DRAFT
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commences on the date on which this Memorandum first records in the Official Records of the County of Santa Clara, California, and expires on the eighty-fifth (85th) anniversary of the date on which the deed of trust for the Take Out Loan is recorded.

2. The rent to be paid by Tenant and all of the rights and obligations of the parties with respect to the Premises are set forth in the Ground Lease.

3. This instrument is a memorandum of the aforesaid Ground Lease and is subject to all of the terms and conditions thereof. This instrument is not intended to alter, amend, expand or restrict the terms and provisions of the aforesaid Ground Lease, or the respective rights or obligations of Landlord and/or Tenant thereunder, all of which are fully incorporated herein by this reference.

4. This Memorandum may be executed in multiple counterparts, each of which shall be deemed an original. All Exhibits attached hereto are incorporated herein by reference.

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IN WITNESS WHEREOF, the parties have executed this Memorandum as of the day and year first above written.

LANDLORD:

CITY OF SUNNYVALE,
a municipal corporation

By:

Tim Kirby
City Manager

APPROVED AS TO FORM:

By:

Rebecca Moon
City Attorney

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PARTNERSHIP:

MP 1171 SONORA I ASSOCIATES, L.P.,
a California limited partnership
BY: MP 1171 SONORA I LLC, a California limited
liability company, its general partner
BY: MID-PENINSULA BAKER PARK, INC., a
California nonprofit public benefit corporation,
its sole member/manager

By: ______________________________
Matthew O. Franklin
President/CEO

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EXHIBIT A (TO EXHIBIT I OF THE DDA)

LEGAL DESCRIPTION OF PROPERTY
The land referred to is situated in the County of Santa Clara, City of Sunnyvale, State of California, and is described as follows:

All of Parcel 1, as shown upon that certain Map entitled, “Parcel Map being a Resubdivision of Parcel “B”, as shown on that certain Map entitled “Parcel Map” recorded in Book 384 of Maps, at Page 20 Santa Clara County Records, City of Sunnyvale, California”, which Map was filed for record in the Office of the Recorder of the County of Santa Clara, State of California on March 25, 1976, in Book 369 of Maps, at Page 15.

Excepting therefrom all oil, gas, petroleum and other mineral or hydrocarbon substances in and under the land, together with the right to use that portion only, of said land, which underlies a plane parallel to and 500 feet below the present surface of said land for the purposes of prospecting for, developing and/or extracting said oil, gas petroleum and other hydrocarbon substances from said land by means of wells drilled into said subsurface of said land from drill sites located on other land, with no rights of surface entry, as reserved in the Deed from Robert K. Chambers, et al, to West Bay Industrial Corp., dated May 13, 1974, recorded June 19, 1974, in Book B001 of Official Records, Page 243, Instrument No. 4812325.

APN: 205-50-024

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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 )
) SS.

COUNTY OF )
On _________________________, 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(ies) 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 of Notary Public
[SEAL]
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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 )
) SS.

COUNTY OF )
On _________________________, 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(ies) 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 of Notary Public
[SEAL]
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DDA EXHIBIT J – SHORT-TERM LEASE

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LEASE OF CITY REAL PROPERTY AT 1171 SONORA COURT TO
MP 1171 SONORA I ASSOCIATES, L.P.

This lease of real property (“Lease”) at 117 1 Sonora Court dated _______________, ____, is by and between the City of Sunnyvale , a California chartered municipal corporation of the State of California, hereafter called “Lessor,” and MP 1171 Sonora Associates, L.P. , a California limited partnership, hereafter called “Lessee”, collectively referred to as “the Parties”.

RECITALS

A. WHEREAS, lessor is the owner in fee of all that certain property described in Exhibit “A”, attached hereto and incorporated herein by this reference, along with all buildings and improvements located thereon, hereafter referred to as “Property”; and

B. WHEREAS, the City and Developer entered into that certain “Disposition and Development Agreement” dated __________________, 2024 (the “DDA”); and

C. WHEREAS, the DDA provided that upon the satisfaction of certain conditions, the City would ground lease the Property to Lessee; and

D. WHEREAS, Lessee has requested a short-term lease for the Property until ___________________, _____ and upon closing the construction loan will thereafter enter into the ground lease in accordance with the DDA.

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

1. Lease of Property. Lessor hereby leases to Lessee the building and improvements located at 117 1 Sonora Court in the City of Sunnyvale, California, particularly described in Exhibit “A”.

2. Term of Lease. The term of this Lease shall be for twelve (12) months and shall commence on _______________, ____ and shall expire _______________, ____.

At the end of the term the Parties may mutually agree to extend the term on a month -to- month basis for a period of twelve (12) months. The Parties may also mutually agree to an early termination in accordance with Section 8 below.

3. Condition of Property. Lessee is fully aware of the existing condition of the Property and accepts the Property in said condition.

4. Rent. Rent shall be $_____ per month paid on or before the 1st of each and every month of the Term and any extensions herein. In the event this rent amount is not received by Lessor by the 1st of the month, a late fee of $50.00 shall be assessed, except that the late fee shall not be assessed until the 10th of the month for the first month’s rent only.

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5. Use of Property. The Property shall be used for general office purposes and no demolition, alterations or construction shall occur during the term unless otherwise authorized in accordance with Section 16 below. Additionally, Lessee is required to maintain the Property in accordance with Section 13 below and keep the Property secured at all times.

6. Assignment and Sublease. Lessee shall not assign this Lease or any interest therein, nor let or sublet the whole or any part of the said Property without the express written consent of Lessor.

7. Expiration. Upon the expiration of the term of this Lease, or of any mutually agreed upon extension, Lessee shall quit and surrender the Property in as good state and condition, reasonable wear and tear excepted, as its condition at the commencement of said term.

8. Early Mutual Termination. The Parties may agree to Terminate this Lease prior to the end of the Term and enter into a ground lease in accordance with the DDA.

In the event of early termination, any partial month’s rent shall be prorated accordingly.

9. Compliance with All Laws. Lessee, at its sole cost, shall comply with all applicable lawful requirements, policies, statutes and ordinances with respect to the use of the Property.

10. Utilities. Lessee shall pay all charges for utilities and other services upon the Property, including but not limited to gas, electricity, sewer, water and garbage charges.

11. Indemnification and Hold Harmless. Lessee shall defend, indemnify and hold harmless Lessor, its officers, agents, and employees against any liability, claim or loss for damage to any property or injury to or death of any person or persons arising from or connected with the exercise by Lesse e of its rights with respect to the Property under this Lease, except to the extent such liability claim or loss is attributable to the gross negligence or willful misconduct of Lessor, its officers, agents, or employees.

12. Hazardous Materials.

A. Hazardous materials are those substances listed in Division 4, Chapter 30, Article 9 of Title 22, California Code of Regulations, or those which meet the toxicity, reactivity, corrosiveness or flammability criteria of Article 11 of the above Code, as well as any other substance which poses a hazard to health or environment.

B. Except as otherwise permitted in the Lease, Lessee shall not use, create, store or allow any such substances on the Property. Fuel stored in a motor vehicle for the exclusive use in such vehicle is excepted.

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C. In no case shall Lessee cause or allow the deposit or disposal of any such substance on the Property.

D. However, household products necessary for routine cleaning and maintenance of the property may be kept on the Property in quantities reasonable for current needs.

E. Lessor, or its agents or contractors, shall at all times have the right, upon reasonable notice, to go upon and inspect the Property and the operations conducted thereon to assure compliance with the requirements herein stated. This inspection may include taking samples of substances and materials present for testing, and/or testing soils or underground tanks on the Property.

F. Breach of any of these covenants, terms and conditions shall give Lessor authority to immediately terminate this Lease. It is the intent of the parties hereto that the Lessee shall be responsible for and bear the entire cost of removal and disposal of hazardous materials or waste introduced to the Property during the term of this Lease. The Lessee shall also be responsible for any cleanup and decontamination on or off the Property necessitated by such materials or waste.

G. Lessee shall further indemnify, defend, and hold Lessor and its officers or employees, harmless from any and all responsibility, loss, damage, liability and expenses (including reasonable attorneys’ fees) resulting from the presence or use of hazardous mat erials on the Property during the Lessee's periods of use and possession.

13. Maintenance and Repairs. Except as provided herein, Lessee at its cost shall maintain and repair all Lessee's personal property. Lessee shall be responsible for maintenance and repair of the building’s HVAC, plumbing, electrical, lighting, interior walls, ceilings, floors, windows, doors, plate glass and skylights. Lessor shall not maintain any part of the property.

14. Taxes.

14.1. Lessee shall pay before delinquency all taxes, assessments, license fees, and other charges that are levied and assessed against Lessee's personal property installed or located in or on the Property, and that become payable during the term of this Lease. On demand by Lessor, Lessee shall furnish Lessor with satisfactory evidence of these payments.

14.2. Lessor shall pay all possessory interest taxes assessed against the Property.

15. Insurance. As a condition precedent to this Lease, Lessee shall provide evidence of insurance in accordance with the insurance requirements shown in Exhibit “B” and incorporated herein by reference. Lessee shall maintain these insurance DRAFT
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requirements throughout the lease term and name Lessor as additional insured on its insurance policies.

16. Alterations, Additions and Improvements.

16.1. Lessee shall not undertake any demolition, building, construction, reconstruction or development on the Property without submitting to Lessor a plan and receiving Lessor's approval thereof. Any such approved alterations, additions or improvements shall be made solely at the cost of Lessee.

16.2 Lessee shall keep the Property free and clear of any and all liens or encumbrances. Lessor shall have the right to post and keep posted in a conspicuous place on the Property a notice of non-responsibility during the period of time during which any alterations, additions or improvements may be made by Lessee.

17. Waiver. No waiver by either party at any time of any of the terms, conditions or covenants of this Agreement shall be deemed as a waiver at any time thereafter of the same or of any other term, condition or covenant herein contained, nor of the strict and prompt p erformance thereof. No delay, failure or omission of Lessor to reenter the Property or to exercise any right, power or privilege or option arising from any breach shall impair any such rights, power, privilege or option or be construed as a waiver of such breach or a relinquishment of any right or acquiescence therein.

18. Default. Should Lessee default at any time in the payment of any installment of rent, or of any other charges when the same become due, or should Lessee default in the performance of any covenant or agreement or condition hereunder, including the use of the Property, and fail to cure the default after thi rty (30) days' written notice of such default by Lessor to Lessee, Lessor shall have the right to terminate this Lease forthwith.

In the event of such termination, Lessee shall quit and surrender the Property to Lessor and Lessor shall have the right of im mediate reentry. The right to terminate this Lease shall be in addition to the other rights or remedies of Lessor in the event of a default.

19. Binding on Successors . The covenants and conditions herein contained shall, subject to the provisions as to assignment, apply to and bind the heirs, successors, executors, administrators and assigns of all the parties hereto.

20. Severability. If any section, paragraph, sentence, clause, phrase, or portion of this Lease is invalid or shal l be held to be invalid, such invalidity shall not affect the validity of the balance of the Lease.

21. Notice. Any notices herein provided to be given, or which may be given by either party to the other, shall be deemed to have been fully given when made in writing and either personally delivered to the other party or deposited in the United States mail, postage prepaid and addressed as follows:

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TO THE LESSEE:

City of Sunnyvale
Community Development Department
456 W. Olive Ave. Sunnyvale, CA 94086
Attn: Director of Community Development
TO THE LESSOR:

MP 1171 Sonora I Associates, L.P.
303 Vintage Park Drive, Suite 250
Foster City, CA 94404
Attn: President/CEO

22. Destruction of Property . In the event the Property is totally or partially destroyed, rendering the Property totally or partially inaccessible or unusable, either party may terminate this Lease by giving written notice of such termination to the other party..

23. Taking by Eminent Domain . If, during the term of this Lease there is any taking of all or any part of the Property or any interest in this Lease by condemnation, the rights and obligations of the parties shall be determined pursuant to this paragraph. If the Property is totally taken by condemnation, this Lease shall terminate on the date of taking.

If any portion of the Property is taken by condemnation, the lease terminates as to the part taken and remains in effect as to the remainder. The terms of this Lease shall remain in effect, including a pro rata percentage of the rent commensurate with the percentage of the remainder, as to the remainder unless Lessee shall give written notice of termination to Lessor within thirty (30) days of the date of taking. In the event of either a total or partial taking by condemnation, Lessor shall be entitled to all compensation paid as a result of the taking, whether by negotiated settlement or judgment entered by a court, and Lessee shall have no claim to or interest in any of the proceeds of such eminent domain action.

24. Reserved.

25. Governing Law, Jurisdiction and Venue. This Agreement shall be governed by and construed in accordance with the laws of the State of California, excluding its conflict of law principles. Proper venue for legal actions will be exclusively vested in a state court in the County of Santa Clara. The parties agree that subject matter and personal jurisdiction are proper in state court in the County of Santa Clara and waive all venue objections.

26. Integrated Agreement; Amendment . This document represents the entire and integrated agreement between Lessor and Lessee and supersedes all prior negotiations, representations, and agreements, either written or oral. This document may be amended only by written instrument signed by both Lessor and Lessee.

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27. Electronic Execution and Counterparts. The Parties agree that this Lease may be signed electronically and may be executed in counterparts.

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IN WITNESS WHEREOF, the parties have executed this Lease as of the day and year first above written.

LESSOR:

CITY OF SUNNYVALE,
a municipal corporation

By:

Tim Kirby
City Manager

APPROVED AS TO FORM:

By:

Rebecca Moon
City Attorney

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LESSEE:

MP 1171 SONORA I ASSOCIATES, L.P.,
a California limited partnership
BY: MP 1171 SONORA I LLC, a California limited
liability company, its general partner
BY: MID-PENINSULA BAKER PARK, INC., a
California nonprofit public benefit corporation,
its sole member/manager

By: ______________________________
Matthew O. Franklin
President/CEO

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EXHIBIT A (TO EXHIBIT J OF THE DDA)

LEGAL DESCRIPTION OF PROPERTY
1171 Sonora Court, Sunnyvale, CA

The land referred to is situated in the County of Santa Clara, City of Sunnyvale, State of California, and is described as follows:

All of Parcel 1, as shown upon that certain Map entitled, “Parcel Map being a Resubdivision of Parcel “B”, as shown on that certain Map entitled “Parcel Map” recorded in Book 384 of Maps, at Page 20 Santa Clara County Records, City of Sunnyvale, California”, which Map was filed for record in the Office of the Recorder of the County of Santa Clara, State of California on March 25, 1976, in Book 369 of Maps, at Page 15.

Excepting therefrom all oil, gas, petroleum and other mineral or hydrocarbon substances in and under the land, together with the right to use that portion only, of said land, which underlies a plane parallel to and 500 feet below the present surface of said land for the purposes of prospecting for, developing and/or extracting said oil, gas petroleum and other hydrocarbon substances from said land by means of wells drilled into said subsurface of said land from drill sites located on other land, with no rights of surface entry, as reserved in the Deed from Robert K. Chambers, et al, to West Bay Industrial Corp., dated May 13, 1974, recorded June 19, 1974, in Book B001 of Official Records, Page 243, Instrument No. 4812325.

APN: 205-50-024

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EXHIBIT B (TO EXHIBIT J OF THE DDA)

INSURANCE REQUIREMENTS FOR LESSEE
Insurance. Landlord requires that Tenant maintain insurance requirements on the Pacific Insurance Network System (PINS) from and after the Commencement Date until the termination of this Lease. Tenant shall procure and maintain, at its own expense during the life of this Lease, policies of insurance as specified below and shall provide all certificates and endorsements as specified below through PINS for appro val by the Landlord Risk Manager prior to the Commencement Date of this Lease.

Tenant shall procure and maintain for the duration of the Lease insurance against claims for injuries to persons or damages to property which may arise from or in connection with the performance of the work by the Tenant, their agents, representatives, or employees.

Minimum Scope and Limits of Insurance. Tenant shall maintain limits not less than:

1. Commercial General Liability : coverage written on an occurrence basis with limits not less than $2,000,000 per occurrence and $4,000,000 aggregate for bodily injury, personal injury and property damage. ISO Occurrence Form shall be at least as broad as CG 0001.

2. Automobile Liability: coverage with a combined single limit of not less than $1,000,000 per occurrence applying to all owned, non-owned, or hired vehicles used in conjunction with this Lease for bodily injury and property damage. ISO Form shall be at least as broad as CA 0001; or
Hired & Non-owned Auto: coverage with a combined single limit of not less than $2,000,000 per occurrence for bodily injury and property damage in lieu of Business Auto Liability.

3. Workers’ Compensation : Statutory Limits and Employer's Liability:
$1,000,000 per accident for bodily injury or disease.

Deductibles, Self -Insured Retentions, and Other Coverages . Any deductibles in excess of Twenty -Five Thousand Dollars ($25,000.00) per occurrence or self -insured retentions must be declared and approved by the Landlord’s Risk Manager. At the option of the Landlord’s Risk Manager, Tenant may be required to reduce or eliminate such deductibles or self -insured retentions or to procure a bond guaranteeing payment of losses and related investigations, claim administration and defense costs. Tenant shall guarantee payment of any losses and related investigations, claim administration and defense expenses within the deductible or self-insured retention.

The aforementioned insurance requirements can be met through any combination of self- insured, primary and excess/umbrella policies that fulfill the stipulated coverage as cited above.

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Other Insurance Provisions.

1. During the term of the Lease, the Landlord, its officers, officials, employees, agents, and volunteers are to be covered as an additional insured in Tenant's commercial general liability policy with respect to liability arising out of activities performed by or on behalf of the Tenant; products and completed operations of the Tenant; premises owned, occupied or used by the Tenant. The coverage shall contain no special limitations on the scope of protection afforded to the Landlord, its officers, officials, employees, agents, or volunteers.

2. During the term of the Lease, the Tenant's Workers' Compensation policy shall be endorsed with a waiver of subrogation in favor of the Landlord.

Tenant hereby grants to Landlord a waiver of any right to subrogation which any insurer of said Tenant may acquire against the Landlord by virtue of the payment of any loss under such insurance. Tenant agrees to obtain any endorsement that may be necessary to affect this waiver of subrogation, but this provision applies regardless of whether or not the Landlord has received a waiver of subrogation endorsement from the insurer.

3. Intentionally deleted.

4. For any claims related to this project, the Tenant's insurance shall be primary.

Any insurance or self-insurance maintained by the Landlord, its officers, officials, employees, agents and volunteers shall be excess of the Tenant's insurance and shall not contribute with it and shall be at least as broad as ISO CG 20 01 04 13.

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

6. The Tenant's insurance shall apply separately to each insured against whom claim is made or suit is brought, except with respect to the limits of the insurer's liability.

7. Each insurance policy required by this clause shall be endorsed to state that coverage shall not be suspended, voided, cancelled by either party, reduced in coverage or in limits except after thirty (30) days' prior written notice by certified mail, return receipt requested, has been given to the Landlord.

8. Any umbrella or excess insurance liability policies shall be true "following form" of the underlying policy coverage, terms, conditions, and provisions and shall meet all of the insurance requirements stated in this document, including the additional insured, SIR, and primary and non-contributory insurance DRAFT
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requirements for the benefit of Landlord (if agreed to in a written Lease) until all coverage carried by or available to the Tenant's primary and excess liability policies are exhausted and before the Landlord's own Insurance or self-insurance shall be called upon to contribute to a loss.

9. The policy limits of coverage shall be made available to the full limits of the policy. The minimum limits stated above shall not serve to reduce the Tenant's policy limits of coverage. Therefore, the requirements for coverage and limits shall be (1) the minimum coverage and limits specified in this Lease, or (2) the broader coverage and maximum limits of coverage of any insurance policy or proceeds available to the named insured, whichever is greater.

10. Landlord reserves the right to modify the requirements herein, including coverages and limits, based on the nature of the risk, prior experience, insurer, coverage, or other special circumstances. Landlord shall provide written notice to Tenant of any changes to these requirements.

Acceptability of Insurers . Insurance is to be placed with insurers with a current A.M.

Best's rating of no less than superior or excellent, and who are admitted and authorized to do business and in good standing in California unless otherwise acceptable to the Landlord’s Risk Manager.

Verification of Coverage. Landlord utilizes an electronic insurance verification system to track and verify all insurance related documents. Landlord is no longer accepting Certificates of Insurance by mail and will only accept electronic insurance documents.

Landlord will email the Tenant requesting proof of insurance for this Lease through an electronic insurance verification system, which include instructions on how to upload insurance documents electronically. Tenant shall furnish the Landlord with an electronic Certificate of Insurance effecting the coverage required. The certificates are to be signed by a person authorized by that insurer to bind coverage on its behalf and name the City of Sunnyvale, Attn; Risk Management, 456 Olive Avenue, Sunnyvale, CA 94086 as the certificate holder. All certificates are to be received and approved by the Landlord’s Risk Manager prior to Commencement Date of this Lease.

The Tenant shall provide certificate(s) evidencing renewals of all insurance required herein prior to the expiration date of any such insurance. Tenant shall submit insurance certificates reflecting the policy renewals through an electronic insurance verification system. Landlord reserves the right to require complete, certified copies of all required insurance policies, at any time.

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